Home Equity Boomers' Salvation or Destruction?
From the AP:
Home Equity May Be Baby Boomers' Salvation
"It's no secret that baby boomers have not been very diligent about saving for retirement, but that doesn't mean they don't have assets. Many live in homes that have appreciated greatly in value in recent years as real estate prices have soared."
"Some financial experts believe that's going to be the boomers' salvation because they will be able to tap that home equity to help fund their retirements."
"Keene, a regional manager in private client services for San Francisco-based Wells Fargo & Co., added that baby boomers will have a number of options to "monetize" their homes, from buying a less-expensive house or condominium for cash and investing the proceeds, to reverse mortgage loans or interfamily deals."
"To be sure, there are mortgage experts who are skeptical of putting too much faith in tapping home equity to fund retirement."
""If somebody has no savings, the chances are they don't own a million dollar house free and clear either," said Michael Moskowitz, the president of the New York mortgage company Equity Now. "I think it's a bit of wishful thinking.""
"He added: "Without retirement planning, without a 401(k) or IRA savings account, people aren't going to be able to enjoy the same standard of living they had before retirement.""
"Chicaferro also cautioned that baby boomers shouldn't count on their homes appreciating as fast in the future as they have in the past decade."
""There's no guarantee that equity in the home is going to double or triple in value, so it's not a prudent thing to sit there and think it will happen," he said."
(This piece seems more like an advertisement than any kind of journalism to me)
Caveat Emptor!
Grim
Home Equity May Be Baby Boomers' Salvation
"It's no secret that baby boomers have not been very diligent about saving for retirement, but that doesn't mean they don't have assets. Many live in homes that have appreciated greatly in value in recent years as real estate prices have soared."
"Some financial experts believe that's going to be the boomers' salvation because they will be able to tap that home equity to help fund their retirements."
"Keene, a regional manager in private client services for San Francisco-based Wells Fargo & Co., added that baby boomers will have a number of options to "monetize" their homes, from buying a less-expensive house or condominium for cash and investing the proceeds, to reverse mortgage loans or interfamily deals."
"To be sure, there are mortgage experts who are skeptical of putting too much faith in tapping home equity to fund retirement."
""If somebody has no savings, the chances are they don't own a million dollar house free and clear either," said Michael Moskowitz, the president of the New York mortgage company Equity Now. "I think it's a bit of wishful thinking.""
"He added: "Without retirement planning, without a 401(k) or IRA savings account, people aren't going to be able to enjoy the same standard of living they had before retirement.""
"Chicaferro also cautioned that baby boomers shouldn't count on their homes appreciating as fast in the future as they have in the past decade."
""There's no guarantee that equity in the home is going to double or triple in value, so it's not a prudent thing to sit there and think it will happen," he said."
(This piece seems more like an advertisement than any kind of journalism to me)
Caveat Emptor!
Grim
21 Comments:
What is the age range to be considered a baby boomer?
It's WWII vets coming home and having kids. So I think it is people born between 1946-1964.
I always seem to remember that my parents are just a bit older [born 1942], and I am a bit younger [born 1968].
Anon - to answer your question, I guess they are aged 42-60.
Beat me to it..
http://en.wikipedia.org/wiki/Baby_boomer
Actually 42 seems too young.
Maybe the cutoff is 1960-62?
I had a class in demographics where this was taught. A babyboomer is born betwen 1946 and 1964. My wife is a boomer (barely) I am an x-er (barely).
Lean times coming for those baby boomer ATM Bubbleheads.
Boycott Houses!!!
Boooooooyaaaaaaaa
Bob
interest rates up up up means prices down down down + ALOT!
BOYCOTT HOUSES!!!
Booooooooyaaaaaaa
Bob
I've seen several retiree couples selling off their homes last summer to cash out and move to an apartment.
Many hit the market peak just in time last summer, and even those who missed the peak, and sell for $100K+ less this year, will still fund much of their retirement via a house.
Retirees not cashing out now are throwing away money. Some may love their home, but with no income, is that love worth throwing away $500,000 or more?
Listen the concept of your home providing PART of your retirement is not all bad as long as it has not been your cash machine. In all seriousness many people own large homes and will sell them and move into smaller homes thus providing them with extra cash, but they still need to have savings and a plan for when the employment income stops!!! So in short your home contributes to your retirement but it is not the whole thing, this is not an all or nothing type of thing.
Grim:
Thanks so much for helping to check some information about listings in the past.
Here is one I think I had seen it a while back with a much higher price tag at that time.
2276722
so please help to see whether it is a new listing or was it relisted. Thanks!
Who listens to so called overpaid experts anyway?
BABABABABABBABABABABA
BOYCOTT HOUSES!!!
signing up for monthly slave payments gets old very very quickly.
Tell'em NO MAAS to RIPOFF HOUSE PRICES>>>
BOOOOOOOYAAAAAAAA
Bob
The ONLY shortage is of sanely Priced Housing!
BOYCOTT HOUSES!
tell those Baby bloomers its time to save some money outside the Housing slush fund. Lean times are a coming bloomers.
Pa pa pa pa pa pa PANIC!
Booooooyaaaaaaa
Bob
Gluts and Gluts and Gluts and Gluts of Overpriced RIPOFF HOUSES..
Bababababababa
Boycott Houses!
hhttp://www.rockymountainnews.com/drmn/real_estate/article/0%2C1299%2CDRMN_414_46 75068%2C00.html
Homes piling up
Foreclosures help bury metro area in unsold inventory
By John Rebchook, Rocky Mountain News
May 5, 2006
The number of unsold homes on the Denver-area market hit a record 29,045 in April, according to reports released Thursday.
Rising foreclosures were the driving force for the skyrocketing inventory, which is 19.2 percent higher than a year ago, experts said.
April typically sees more homes on the market as sellers try to unload properties during the summer school break, and the foreclosures - more than 4,700 in the metro area in the first three months of this year - added to the number.
"There's a glut of unsold homes on the market," said Doug Pierce, owner of Pierce Realty Co., a Metro Broker company. And that is extending the length of time to sell homes, he added.
This is coming your way NJ baby Blooming ATM housing Bubbleheads.
PApapapapapapapa
PANIC!
Boooooooyaaaaa
Bob
Don't bail these Baby bloomers out.
Ba ba ba ba ba ba BOYCOTT houses!!
Luck has run out Baby blooming ATM housing bubbleheads.
Boooooooooyaaaaaaa
Bob
Be a fool and Buy a house at Monthly Serfdom prices.
Think for once. Run the numbers. think!!!!!!!
It does not compute.
it does not compute.
BOYCOTT RIPOFF HOUSES!
Booooooyaaaaaaa
Bob
"Most homeowners don't have to sell; the new, lower prices will be set by those who have to bail out. They include not just investors but also owners who stretched their finances to buy a house. This year no less than 22% of Americans' $8.7 trillion in mortgages will reset rates--and the extra burden will be big. A typical three-year ARM will go from 3.6% to 5.6%, forcing a borrower with a $500,000 mortgage to pay an extra $800 a month in interest. Delinquencies are already rising rapidly. Since early 2005 delinquency rates have jumped almost 14%, to 2.5% for prime mortgage loans. 'The banks will be forced to take back a lot of properties and sell them for the amount of the loan,' says Mark Zandi of Moody's Economy.com. 'That will add to the already huge supply on the market.'"
"The number of unsold homes on the Denver-area market hit a record 29,045 in April, according to reports released Thursday. Rising foreclosures were the driving force for the skyrocketing inventory, which is 19.2 percent higher than a year ago, experts said."
Looks like a good time to "invest" in real estate.
"This year no less than 22% of Americans' $8.7 trillion in mortgages will reset rates--and the extra burden will be big. A typical three-year ARM will go from 3.6% to 5.6%, forcing a borrower with a $500,000 mortgage to pay an extra $800 a month in interest. Delinquencies are already rising rapidly."
Complete madness!
An extra $800 a month in interest works out to about an extra $13,000 a year in gross income.
About a 20% raise if you are making $65,000 a year. I'd love to hear someone go into their boss and ask a raise because the ARM reset.
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