Tuesday, January 22, 2013

Good morning Comrades.

I thought I'd start out that way to acknowledge our socialist overlords. You heard the swearing in. Right?

The past week Mr S. was super sick. So, I was mostly out of the news cycle - and I never got sick. But I have to tell you, if you can manage to get sick and escape from the world - do that. You can totally understand why a lot of people feel so great about things. I mean, it's fantastic. Aside from the sick thing. It's a completely different world.

The bit of news I want to talk about today is home prices.

Some of you may remember that late last year I tried to refi my rental and was completely turned down because it was not my primary residence. At that time I actually had a small amount of equity. Which made the whole thing infuriating because they were giving preference to irresponsible people in front of me. The banks had 25 plans to help those people. But me, who has a perfect payment history and actual equity - no way.

Skip forward to now, and all of a sudden I am in a lot of equity. Three houses sold on the block my crapshack is on in the past few months, and one puts me close to 20% equity.

Over the past year I've been trying to figure out why home prices have gone up so much. Wages are stagnant. I know there are a lot of Chinese buyers, but still. There is nothing in the economy that can justify that kind of sudden rise. But, just because it doesn't make sense, doesn't mean I won't try to take advantage of it. I think the whole thing is temporary.

This time - the bank accepted me right away and locked me in at 4.33%. I was paying a painful 6.68. Sadly, at the time - that was a pretty decent rate for a non owner occupied home.

The other thing I've noticed recently is jumbo mortgages dominate the sold category. Where in the past four years, you would only see a scattering. If 20 houses sold, only one, if you were lucky, was a jumbo.

So, it appears to me - that banks are actually lending. Despite all the articles I read that say they are not. Another bank was trying to poach my loan this morning. Maybe they are hungry because home sales dipped in December.

Personally, I feel like I got in at that sweet spot before everyone realizes how messed up everything really is. Because now that I am back in the news cycle I'm pretty freaked out.


  1. I think that the supply of homes must be tight because I'm getting solicitations from agents who want to sell my house for me and I'm not even in the market. Good idea about refinancing though, it wouldn't hurt to lock in with rates at zero

  2. Well.. you aren't going to get 0%. The best you will do it somewhere in the low 3's.

    3.25% ish. Houses you don't live in are a full point higher. If that makes things better for you, I'd call. We either go higher, or we go into negative interest rates.

    I'm apparently the only bear on the planet right now, but I'd wager we go lower before higher. But then then economy will be so screwed they might not consider you.

    If the banks are lending though, that means all that money they printed is starting to slosh around. It's a real nail biter. Either way - I'd try.

  3. Oh! I'm curious. How do you know the agents are trying to sell your place?

    I can't know for sure, only what agents and the media say about the tight supply - but a few months ago someone blanketed my whole neighborhood trying to buy a house. They left flyers on everyone's doorsteps saying if they wanted to sell, call them.

    I am not ready to believe "them" because we heard years of "shadow" inventory. Now, somehow it's all soaked up. It doesn't make sense.

  4. They are contacting me through Zillow. I think they sell my info to them or something. Seems like a waste of time to me, but all you need is one or two to hit with the fat commissions they make.