Does anyone know if CA home prices will be up or down by 09/09 when my 5/1 Interest Only Arm resets?

Question

I was on a fixed rate mortgage but had to refinance in 2004 due to a divorce. If the 5/1 arm resets at current rates, it will add +2.5% APR plus principal payments to my monthly payment. I could possibly afford that, but if prices continue to go down, my home price will soon be less than I paid for it and there would be no reason to hold onto it. I'm about to jump out of a window. Any other ideas?? Thanks!

Answer 1

Absolutely NO ONE has such info and if they did they would not be here answering questions but out buying real estate or selling off.

Go see a Real Estate agent and ask them how the markets are truning right now. My suspicion that even in Ca. they are slowing down.

Good Luck

Answer 2

I would suggest that you stop looking at your home from a mortgage perspective and look at it from a financial investment perspective. The reason being that the right 'financial' strategies could make a huge difference to the financial outcome.

As an example; there are strategies to pay off your home in half the time - potentially within the same budget - while at the same time creating a substantial wealth fund and potentially tax-free retirement income.

The difference is that of perspective. One perspective looks at selling a home as a product, the other works on a global financial strategy that includes the dynamics of home financing with a view to maximizing the total result.

The fact that thousands of people are facing foreclosure 'speaks' to me of a lack of financial insight and strategy. This is a huge tragedy that, to a large degree, in my opinion, could have and should have been avoided.

Yes prices may be up or down, but don't wait until it is too late to put an action plan in place.

In answer to your question about prices going up or down - look at the inventory on the streets. The glut of foreclosures, bank repos and empty houses need to be flushed out of the system, before strength and confidence will come back into the market. You can gauge this strength and confidence by watching how long it takes for property to move and by how many stand empty or foreclosed. I suspect we have a way to go, before we see a positive turn.

Hope that helps.

Answer 3

Best thing that you can do right now is keep reading the business and or financial news CNN, FOX, YAHOO, all over. As of now in CA, or at least in certain parts because it is in the top 3 of high foreclosure rates it is expected that prices will drop 25% in the next year. You have time watch, read, and hang in there if you put the home for sale now you will lose, do what you need to to hold on and wait for an upswing, when it comes it will be slow, but if you can afford to remain there you will be better off in the long run

Answer 4

Down on 09'. It usually takes 5-10 years for a real estate down market to come back to norm or up. It has only been 1-2 years of down market. Wait at least 3 more years. It also depends on the interest rate. Good luck :)

Answer 5

Well, you need to consider that the US (and as a byproduct) the global economy is headed for at least a mini recession during 2008 caused in major part by the sub=prime mess. Will it turn around by early 2009 -- I think it will just be starting to turn --- but housing prices are not going anywhere towards up until at least 2010. There is just to much inventory out there and with the potential for higher unemployment it is going to be real dicey for a while.

Good luck

Answer 6

If anybody REALLY knew where the market will be on a particular date, we'd all be rich.
As for your situation, if you CAN afford payments and do NOT need to sell, why would it matter to you if your house drops in value? Do you have this house as an investment or to live in it?
My house is worth less now than it was worth in 2005, but I'm planning to stay in this house for at least another 25 years. Why would I worry about my house value now? I'll worry about it in 24 years...
Of course, if you cannot afford payments or need to sell, it's another story.

Answer 7

You're going to be at the tail end of when the most of the ARM's will reset. They should continue down until then and they might continue to go down afterwards. If you're looking for equity to refinance, fat chance.