Harvard: ( ) Neverending Housing Crisis

Yeah, and the other reason that housing prices are staying down is there is no more cheap mortgage money available -- at least not like before.

The securitization market for home mortgages has completely vaporized. Without that source of cheap debt, you are getting far fewer prospective buyers.

That in turn means there are fewer bidders to run up the price on a given house or apt.

I think the consensus is that securitization for home loans is never going to come back, at least not for anything except gold-standard loans, ie no-risk borrowers.

So we're never going to have the vast pools of home buyers that we used to have. And we'll neve have the kind of housing prices that went with that, either.

Huh? Aren't mortgage rates incredibly low right now?

It's not just mortgage rate. It's the income you have to have to qualify, your time at your current job, how much equity you have for the loan and how much you're worth in general.

The threshold for all those criteria were incredibly low on alt-A and subprime mortgages, which fuelled the securitization machine.

"It's not just mortgage rate. It's the income you have to have to qualify, your time at your current job, how much equity you have for the loan and how much you're worth in general."

Gee.

Like the criteria that co-op boards follow.

It's about time the banks caught up.

My point is that there's still a lot of cheap mortgage money available. Not as much as during the boom, perhaps, but the ability to finance shouldn't be a problem by pre-boom standards.

Those Harvard guys completely missed the bubble. They have zero credibility.

http://www.businessweek.com/the_thread/hotproperty/archives/2005/08/there_is_no_bubble.html

The market is de-leveraging. Those people looking for Alt-A mortgages or low down payment loans are just hoping to make money with other people taking the risk. There are plenty of people buying distressed properties as all cash or with very little debt. It just takes time to work the pipe-line through and seeing prices come down is certainly part of it that will help solve the down-payment issue.

"Like the criteria that co-op boards follow.

It's about time the banks caught up."

I bet most NYC co-op board VPs could not get approved by their own board!

Socialist, I rarely post but since you've been around I post quite a bit. "I bet most NYC co-op board VPs could not get approved by their own board!"...I truly beg to differ. As most regulars know we live uptown - 157th st. - and even our building doesn't allow anything to get by. In 7 years we had one foreclosure. After talking with HSBC we decided it was best to let them handle the transaction than for the building to buy the unit and sell it. No one in our building, never mind our board, gets a break. We're in a beautiful pre-war coop yet we're still in a situation where things can be tricky so we always err on the side of being conservative. I will add, most buildings in our area carry more cash than we do so it's very safe to say most people in co ops are at least doing better than average and still make OK decisions. Even in our "ghetto" things are trotting along. I really don't know what your agenda is...are you hoping for NYC real estate decline or a global meltdown?

There are two reasons that NYC real estate has not failed like the rest of the country. First, the top 1% of the worlds wealth own property here, and second (more importantly) the co-op boards. If NYC did not have co-op's - We would have had much larger declines within the real estate marketplace.

Sorry captain, according to most here on Streeteasy, Manhattan real estate is the same as Florida real estate, or Wayne, NJ real estate, or any other place in the country. Those same 1% wealthy can also buy in Peoria. The co-op boards also look out for Scottsdale.