bostonbubble.com

[HiramJim]

Hello -

So, I have been keeping very accurate and complete data on Acton, MA for over a year now.

Here's an interesting tidbit I've extracted from the Acton data.

In the boom (2001-2006), there were about 40% piggy back loans, and an average loan to value of 95%. This is consistent with notion that nationally there were a lot of people in the boom buying houses they can't afford and that mortgage brokers, banks, and wall street were all merrily giving out $ like water.


Also consistent wit hthe national picture is that in Acton during the latter part of 1997 (credit crunch) the number of houses selling dropped like a rock. LTV went to 78% with almost no piggyback loans. Meaning that those buying in that era had to actually put some skin in the game if they wanted a (still overpriced) house.

Now.. in the spring I see a divergence in Acton versus the national trend. Mortgages are again being given away! A good deal of the houses sold over the last two are again selling with little money down and piggybacks are reemerging! This doesn't make sense to me. I keep reading on blogs and in the News about the credit crunch still being on and that credit standards have tightened. But the Acton data doesn't support that!

Any theories, counter arguments etc?!




April - June 08

SOLD Price Mortg. LTV


2 WINDEMERE DRIVE
$565,000
$56,400.00 10.0% piggyback
$452,000.00 80.0%
$508,400.00 90.0%

9 Patriots RD
$585,000
$80,250.00 13.7% piggyback
$417,000.00 71.3%
$497,250.00 85.0%

10 Whittier
$500,000
$399,950.00 80.0%

164 WILLOW
$600,000
$480,000.00 80.0%

5 MINOT AVE
$504,000
$496,213.00 98.5%

9 NASH RD
$479,300
$383,440.00 80.0%

7 DURKEE RD
$380,000
$304,000.00 80.0%

73 CHARTER RD
$345,000
$293,000.00 84.9%

3 olde lantern road
$485,000
$388,000.00 80.0%

8 sawmill road
$620,000
$360,000.00 58.1%

336 pope road
$956,700
$765,360.00 80.0%

31 ETHAN ALLEN DRIVE
$410,000
$389,500.00 95.0%

[JCK]

Without knowing the credit scores of the people getting those loans, it's really tough to know how tight or loose credit is.