Any guesses on a correction? Timing and severity?

[LargeOrangeFont]

The cash would be sidelined to have a better fund to buy some rental properties or possible small commercial real estate (IF real estate dips significantly)

1. I don't owe much on my primary... we'd need prices to fall 75% + for equity level to go in the red.
2. I don't plan to suck out that much equity... maybe 100k, 150k max
3. My theory on locking in a 30yr fixed rate is that if inflation sticks, and even rises more... the payment amount, and interest amount becomes insignificant overtime now if inflation sticks and rises even more, and a correction never happens...... then the whole process is worthless.

LOL people have been asking that question since 2015.

I'm considering doing the same for a new home purchase.

 

[Cole Trickle]

The cash would be sidelined to have a better fund to buy some rental properties or possible small commercial real estate (IF real estate dips significantly)

1. I don't owe much on my primary... we'd need prices to fall 75% + for equity level to go in the red.
2. I don't plan to suck out that much equity... maybe 100k, 150k max
3. My theory on locking in a 30yr fixed rate is that if inflation sticks, and even rises more... the payment amount, and interest amount becomes insignificant overtime now if inflation sticks and rises even more, and a correction never happens...... then the whole process is worthless.

I don't know enough about cash out refis to know how much you can take out without it becoming a problem. I believe the rates are higher for those?

The way i look at it is if you refinanced over 30 years at todays lower rates you can continue to make the current higher payment but if the world crashes and values plummet now you could turn that into a rental and have a lower mortgage payment long term if you move.

I refinanced my last house to a 15 year and was throwing an extra $400 a month at it with the hopes of having it payed off by age 55.

Now with the new house i have changed my philosophy a tad. I plan to hold onto some extra cash from the sale and i'm going to put the house on a 30. I will still over pay it and try and be done after say 20 years but i want a little freedom just in case.

 

[LargeOrangeFont]

I don't know enough about cash out refis to know how much you can take out without it becoming a problem. I believe the rates are higher for those?

The way i look at it is if you refinanced over 30 years at todays lower rates you can continue to make the current higher payment but if the world crashes and values plummet now you could turn that into a rental and have a lower mortgage payment long term if you move.

Bingo. This is the move and what I think I may do. Leaves me the most options.. but a larger payment on the new house if I decide to sell the "rental" down the road.

 

[Hammer]

Investment property.

Real estate traditionally slightly outpaces inflation for overall “what can I sel it for” value.

Rents rise with inflation.

And inflation shrinks the debt over time.

From my seat the "right" Investment properties are not affordable due to housing prices skyrocketing. If It is affordable, it's overpriced due to inflation and in a poor area where the tenant most likely flips burgers or works a low income job and is probably working paycheck to paycheck. A rent increase doesn't equate to said tenant getting a raise to pay said rent increase(maybe minimum rage increase, but then McDonalds will automate his job to keep costs down, we are already there) since he has no real skills to earn more money, if he did, they would be buying a home or getting a better job somewhere I'd think. I think the timing is wrong to purchase a property as an investment.

I dunno, I could be wrong.

I'd love to understand more. Specifically on how new developments being built in areas that have no corporate infrastructure in town to pay people well to buy these new homes(there is the remote work that is an option, but why would you pay someone CA Wages if they live in an area that doesn't require CA income to live). I have a ton of questions on that subject....

Interesting thread OP. Thanks!

 

[EmpirE231]

I don't know enough about cash out refis to know how much you can take out without it becoming a problem. I believe the rates are higher for those?

The way i look at it is if you refinanced over 30 years at todays lower rates you can continue to make the current higher payment but if the world crashes and values plummet now you could turn that into a rental and have a lower mortgage payment long term if you move.

I refinanced my last house to a 15 year and was throwing an extra $400 a month at it with the hopes of having it payed off by age 55.

Now with the new house i have changed my philosophy a tad. I plan to hold onto some extra cash from the sale and i'm going to put the house on a 30. I will still over pay it and try and be done after say 20 years but i want a little freedom just in case.

The cash out refi's are a little higher of a rate, but still very low (well as of 1 week ago)

I did the same w/ a 15yr a while back... and I think I only have 9 to go... which is very nice, I had a similar plan of being done with it early.

My place wouldn't make a good rental... it's more of a live in it, or sell it type of place.... but my idea on a 30yr, low interest and still a fairly low balance is that if inflation runs away and sticks around... you'd be paying off this fairly low debt with future inflated dollars / income, or I would sell and move on at that point meaning I just took some profit a little early.

who knows... I'm no inflation expert, and not into the leverage game (even though I know it works for some people)

I think holding on to some extra cash like you're doing is smart...... there might be some opportunity ahead?

 

[pronstar]

From my seat the "right" Investment properties are not affordable due to housing prices skyrocketing. If It is affordable, it's overpriced due to inflation and in a poor area where the tenant most likely flips burgers or works a low income job and is probably working paycheck to paycheck. A rent increase doesn't equate to said tenant getting a raise to pay said rent increase(maybe minimum rage increase, but then McDonalds will automate his job to keep costs down, we are already there) since he has no real skills to earn more money, if he did, they would be buying a home or getting a better job somewhere I'd think. I think the timing is wrong to purchase a property as an investment.

I dunno, I could be wrong.

I'd love to understand more. Specifically on how new developments being built in areas that have no corporate infrastructure in town to pay people well to buy these new homes. I have a ton of questions on tat subject....

Interesting thread OP. Thanks!

The way to make rentals work right now, is to either put 20%++ down, or force equity and buy distressed.

I’m finding the best renters in my area, are immigrant families that may “lack papers,” with the breadwinner working trades.

Get first and last months rent.
Quick evictions for late rent.

In a good school district, this will be a long term renter.

 

[hallett21]

The cash out refi's are a little higher of a rate, but still very low (well as of 1 week ago)

I did the same w/ a 15yr a while back... and I think I only have 9 to go... which is very nice, I had a similar plan of being done with it early.

My place wouldn't make a good rental... it's more of a live in it, or sell it type of place.... but my idea on a 30yr, low interest and still a fairly low balance is that if inflation runs away and sticks around... you'd be paying off this fairly low debt with future inflated dollars / income, or I would sell and move on at that point meaning I just took some profit a little early.

who knows... I'm no inflation expert, and not into the leverage game (even though I know it works for some people)

I think holding on to some extra cash like you're doing is smart...... there might be some opportunity ahead?

I like the idea of pulling cash out with a 30 year as long as the payment stayed the same.

I guess my only hesitation would be if you don’t have something to purchase in 60-90 days what’s going to happen to your cash?

Would you put it in the bank, index fund etc?

If you have an investment on the horizon I say go for it.

But for all we know the market could run hot until November.

 

[EmpirE231]

I like the idea of pulling cash out with a 30 year as long as the payment stayed the same.

I guess my only hesitation would be if you don’t have something to purchase in 60-90 days what’s going to happen to your cash?

Would you put it in the bank, index fund etc?

If you have an investment on the horizon I say go for it.

But for all we know the market could run hot until November.

that's the gamble... yeah you pay a fee to sideline more capital for if/when the market turns.

I doubt buying opportunities would be here until a good year or tow AFTER a downturn, so that is the downside.... money sits idle with the risk of inflation. On the flip side, you lock up cheap money before rates go to the moon. who knows what's gonna happen.

 

[hallett21]

that's the gamble... yeah you pay a fee to sideline more capital for if/when the market turns.

I doubt buying opportunities would be here until a good year or tow AFTER a downturn, so that is the downside.... money sits idle with the risk of inflation. On the flip side, you lock up cheap money before rates go to the moon. who knows what's gonna happen.

Would you be paying cash on the investment or would you need another mortgage?

Only reason I ask is let’s say there is a big down turn, the lending spigot will get shut off. I think you’d be better to lock in a low rate on the refi and purchase/rental. Sure you’re buying high but when does rent ever go down?

 

[Done-it-again]

I guess I have a different outlook on the economy than most on this thread. I believe the FED will increase rates between 0.25%-0.50% between now and the November Midterm Elections just to make it look like they are trying to do something to halt inflation without totally killing the economy. The FED's dilemma is that the Biden Administration will have by 11/2022 printed and distributed over 6 Trillion dollars into an already saturated monetary system. (Note: If they ever get Build Back Better passed it could be $10 Trillion) Therefore this will make inflation almost impossible to stop the double digit numbers were heading towards that we will be seeing by fall. Once the Midterms are over and the GOP takes back the majority of seats in the House & Senate the Biden Administration will have the FED increase Interest Rates 6 to 10 times before the 2024 Presidential Election to burn down the economy since they know there is little chance they will win if the they cant get their Voter (Fraud) Rights Bill passed in the next 3 months.

Personally, I feel those who are going all cash are setting themselves up for long term failure. Your $1M today could well be worth only $600K in todays dollars by 2025 when the next administration takes over and has to Cleanup Aisle 46. Move your money into Inflation Proof Investments instead. J/S

I agree 100%, a slight fed increase in April and during the GOP take over in November hit the go button on rate hikes to blame the GOP to try and keep the WH.....

1-1.5% now will hurt the Dems....

 

[LargeOrangeFont]

From my seat the "right" Investment properties are not affordable due to housing prices skyrocketing. If It is affordable, it's overpriced due to inflation and in a poor area where the tenant most likely flips burgers or works a low income job and is probably working paycheck to paycheck. A rent increase doesn't equate to said tenant getting a raise to pay said rent increase(maybe minimum rage increase, but then McDonalds will automate his job to keep costs down, we are already there) since he has no real skills to earn more money, if he did, they would be buying a home or getting a better job somewhere I'd think. I think the timing is wrong to purchase a property as an investment.

I dunno, I could be wrong.

I'd love to understand more. Specifically on how new developments being built in areas that have no corporate infrastructure in town to pay people well to buy these new homes(there is the remote work that is an option, but why would you pay someone CA Wages if they live in an area that doesn't require CA income to live). I have a ton of questions on that subject....

Interesting thread OP. Thanks!

He's not in the West Coast/Southwest.... that is the difference.

 

[JDKRXW]

(there is the remote work that is an option, but why would you pay someone CA Wages if they live in an area that doesn't require CA income to live).

You don't.
After the past 2 yrs, I would never hire anyone for an office position that didn't have 2 rates of pay. One for coming in to the office and on for working from home.

 

[Joe mama]

I’m getting close to selling all toys at the peak and then sitting on the cash for a bit to buy back stuff later

Shit, sitting on that cash you’ll be sitting in the clouds.

 

[HubbaHubbaLife]

Here's my go to..... calling for corrections in '22.....

Mohamed A. El-Erian​

 

[Shlbyntro]

How about a few examples of "Inflation proof Investments"

#1: speed car reservation

 

[HTMike]

In times like these.... do you lock in a new low 30yr mortgage and cash out some equity in the anticipation that a "correction" happens?

IF inflation sticks around... who cares if you reset your term to 30 years because the payment and interest are dirt cheap at that point.

does the sidelined cash become even more worthless as time goes on, if the inflation sticks and we never have a correction / dip (is that even possible lol)

or does one stay the course of minimal / zero debt and paying off the primary asap.

When in doubt, cancel debt out.

Most don't want to do this though. Not as sexy as buying a bad ass SXS or a CAT with a blower motor.

 

[pronstar]

Here’s a question to ask yourself:
If I could borrow money at negative interest, what would you buy?

If the answer is anything but “an asset that pays me to own it” then it’s just consumer debt.

Because let’s face it:
7% stated inflation
15% actual inflation
Cost to borrow cash: less than 7%
…negative interest rates are already here

 

[cofooter]

MSN

www.msn.com

 

[EmpirE231]

Here’s a question to ask yourself:
If I could borrow money at negative interest, what would you buy?

If the answer is anything but “an asset that pays me to own it” then it’s just consumer debt.

Because let’s face it:
7% stated inflation
15% actual inflation
Cost to borrow cash: less than 7%
…negative interest rates are already here

another big question to ask, is IF there is a major economic downturn.... is your income and revenue streams immune to it? If not... leverage and lots of loans out that you are responsible for will become a huge burden. Even if you have rental income as a revenue stream... in the case of a serious economic problem... people wont pay rent, but those "negative" interest rate loans still need to be serviced. At the end of the day, you gotta be able to weather a storm.

 

[HTMike]

....... those "negative" interest rate loans still need to be serviced. At the end of the day, you gotta be able to weather a storm.

Money borrowed at zero percent interest still needs to be paid back. That's why I cringe when people say " but its free money ".

 

[DrunkenSailor]

The market is already self correcting rates before the fed does anything to the interbank exchange rate.

Securitization is the number one take out on all new debt. Over the past 24 months prepay rates have been over 30% on most debt classes. This has led to the weighted average life of securitizations to drop to 3-5 years. At normal levels this is closer to ten years. With the prepay rates so high the bond market has shifted from the 10 year to the 3 year treasury as a more accurate indicator of RMBS bond spreads. In August AAA bond spreads were trading in the 60's. When the Fed started dropping hints of pulling out the spreads started to widen. September and October saw spreads in the 70's and 80's, When the fed actually stopped buying in November the spreads jumped into the 100 -110 range. There was a slight dip in December as end of year demand pushed the market down. Today we are at 120.

With spreads widening the bond coupon rises. AAA bond debt was trading in the .90% range in August. Today it is over 2% and climbing. if the mortgages secured by the bond debt are only paying 3% that leaves only 1% in excess spread meaning that aggregators are paying the mortgage originators less than 1% of the loans balance at purchase. The originators cannot survive under a 1% profit margin so they are raising rates and quickly. Watch the 3 year bond rate closely. As rates rise the 5 year, 7 year and 10 year bond rates will gain importance as the WAL of the RMBS bonds grow as refinances slow down.

I have said it many times but the borrower who owns their home is not the problem it is the rental property pools where the pain is going to come from. Non-QM lending has been growing like crazy. 23bn was issued in new securitizations last year. Over half of that is investor product. The 23bn does not include Prime Jumbo. These are loans to borrowers or small LLC's. There was an additional 7 bn in Single Family Rental (SFR) securitizations issued this year to larger companies and funds classified as CMBS. This market has been on fire since 2018 and is continuing to grow. There is little to no government oversight on this market and a staggering amount of capital has been pumped into it in the last 3 years.

As inflation grows, rates increase and buying power decreases you will see an economic slowdown. the lowest on the economic ladder will get hit the hardest and these are the people who are paying rent. The government will be hard pressed to print their way out of it again as inflation cannot continue rising unabated. At some point the market has to correct. You cannot keep your foot in it and not run out of gas.

 

[Cole Trickle]

The market is already self correcting rates before the fed does anything to the interbank exchange rate.

Securitization is the number one take out on all new debt. Over the past 24 months prepay rates have been over 30% on most debt classes. This has led to the weighted average life of securitizations to drop to 3-5 years. At normal levels this is closer to ten years. With the prepay rates so high the bond market has shifted from the 10 year to the 3 year treasury as a more accurate indicator of RMBS bond spreads. In August AAA bond spreads were trading in the 60's. When the Fed started dropping hints of pulling out the spreads started to widen. September and October saw spreads in the 70's and 80's, When the fed actually stopped buying in November the spreads jumped into the 100 -110 range. There was a slight dip in December as end of year demand pushed the market down. Today we are at 120.

With spreads widening the bond coupon rises. AAA bond debt was trading in the .90% range in August. Today it is over 2% and climbing. if the mortgages secured by the bond debt are only paying 3% that leaves only 1% in excess spread meaning that aggregators are paying the mortgage originators less than 1% of the loans balance at purchase. The originators cannot survive under a 1% profit margin so they are raising rates and quickly. Watch the 3 year bond rate closely. As rates rise the 5 year, 7 year and 10 year bond rates will gain importance as the WAL of the RMBS bonds grow as refinances slow down.

I have said it many times but the borrower who owns their home is not the problem it is the rental property pools where the pain is going to come from. Non-QM lending has been growing like crazy. 23bn was issued in new securitizations last year. Over half of that is investor product. The 23bn does not include Prime Jumbo. These are loans to borrowers or small LLC's. There was an additional 7 bn in Single Family Rental (SFR) securitizations issued this year to larger companies and funds classified as CMBS. This market has been on fire since 2018 and is continuing to grow. There is little to no government oversight on this market and a staggering amount of capital has been pumped into it in the last 3 years.

As inflation grows, rates increase and buying power decreases you will see an economic slowdown. the lowest on the economic ladder will get hit the hardest and these are the people who are paying rent. The government will be hard pressed to print their way out of it again as inflation cannot continue rising unabated. At some point the market has to correct. You cannot keep your foot in it and not run out of gas.

Over the next 3 months how high do you see rates climbing?

I read there could be a slight dip today and maybe today might be a good day to lock after the fed speaks?

I think i need to bite the bullet and commit to a 4 month lock now before things get worse?

Also thoughts on buying points? I know in years past with low rates it might not have made sense but i plan to be at this new house for the long term and i'm not sure when/if rates ever get this low again for a refi.

Thoughts?

 

[COCA COLA COWBOY]

When in doubt, cancel debt out.

Most don't want to do this though. Not as sexy as buying a bad ass SXS or a CAT with a blower motor.

Good chance all those people that usually travel that bought SXS, boats and RV's will be unloading. I think this market will be saturated and we may see those $150k pontoons selling for 60-80k. At least that is what I'm banking on! I'm biased though, I sold all the big toys waiting for this.

 

[DrunkenSailor]

Over the next 3 months how high do you see rates climbing?

I read there could be a slight dip today and maybe today might be a good day to lock after the fed speaks?

I think i need to bite the bullet and commit to a 4 month lock now before things get worse?

Also thoughts on buying points? I know in years past with low rates it might not have made sense but i plan to be at this new house for the long term and i'm not sure when/if rates ever get this low again for a refi.

Thoughts?

I honestly thought the November jump was going to be a market over reaction to the fed pull out and omnicron hype. December's dip led me to believe that I was right. Seeing the bond market over the last two weeks though has me worried. I'm extremely hesitant to give advice on this when it comes to other people's money. Watch the 3 year like a hawk. MBs live is a paid subscription but they have up to the minute pricing data and are offering a one month free trial. I would sign up for an account. The market is extremely unpredictable but the people I trust are saying rates are going up and I agree.

Here is the link for mbslive: https://www.mbslive.net/

 

[Englewood]

we may see those $150k pontoons selling for 60-80k. At least that is what I'm banking on! I'm biased though, I sold all the big toys waiting for this.

Ya, that's not gonna happen. The outboards alone cost more than that. Last I heard is Horizon has no available Trifecta builds until late 2022/23.

 

[DUNEFLYER]

Ya, that's not gonna happen. The outboards alone cost more than that. Last I heard is Horizon has no available Trifecta builds until late 2022/23.

Somebody drove home a nice Blue Trifecta with twin 450's from Horizon over the weekend. Seen it on their lot then later in the day hooked up to a truck and drove in front of my place guessing on its way to a new home..

 

[c_land]

I have said it many times but the borrower who owns their home is not the problem it is the rental property pools where the pain is going to come from. Non-QM lending has been growing like crazy. 23bn was issued in new securitizations last year. Over half of that is investor product. The 23bn does not include Prime Jumbo. These are loans to borrowers or small LLC's. There was an additional 7 bn in Single Family Rental (SFR) securitizations issued this year to larger companies and funds classified as CMBS. This market has been on fire since 2018 and is continuing to grow. There is little to no government oversight on this market and a staggering amount of capital has been pumped into it in the last 3 years.

BUT THIS TIME IT'S DIFFERENT ™

Great data points in that discussion. Too bad the BRRRR movement and HELOC Investors are too busy posting on TikTok to understand they aren't investing on an even playing field when up against the gorillas that are institutional buyers.

 

[Mandelon]

Summary of the real estate industry's predictions for RE pricing. (pulled from Fortune Magazine)

• Zillow +13.6%
• Goldman Sachs 16%
• Redfin +3%
• Mortgage Bankers Association -2.5%
• Corelogic 1.9%
• Fannie Mae 7.9%
• Freddie Mac 7%

Overwhelmingly positive from the industry's biggest players.

 

[Havasu blue label]

Good luck toys and second homes go first credit cards get maxed out to keep the lifestyle going it’s coming and havasu homes will drop like crows shit .

 

[RiverDave]

From my seat the "right" Investment properties are not affordable due to housing prices skyrocketing. If It is affordable, it's overpriced due to inflation and in a poor area where the tenant most likely flips burgers or works a low income job and is probably working paycheck to paycheck. A rent increase doesn't equate to said tenant getting a raise to pay said rent increase(maybe minimum rage increase, but then McDonalds will automate his job to keep costs down, we are already there) since he has no real skills to earn more money, if he did, they would be buying a home or getting a better job somewhere I'd think. I think the timing is wrong to purchase a property as an investment.

I dunno, I could be wrong.

I'd love to understand more. Specifically on how new developments being built in areas that have no corporate infrastructure in town to pay people well to buy these new homes(there is the remote work that is an option, but why would you pay someone CA Wages if they live in an area that doesn't require CA income to live). I have a ton of questions on that subject....

Interesting thread OP. Thanks!

A ton of people that moved to Havasu are working remotely abd making big time cali wages..

There’s a group of video game designers that relocated out here after covid hit.

Since you work remotely I think it’s a no brainer for you.

 

[HTMike]

Ya, that's not gonna happen. The outboards alone cost more than that. Last I heard is Horizon has no available Trifecta builds until late 2022/23.

Lots of those build slots will free up when buyers take a massive hair cut in the markets LOL

 

[RiverDave]

Summary of the real estate industry's predictions for RE pricing. (pulled from Fortune Magazine)

• Zillow +13.6%
• Goldman Sachs 16%
• Redfin +3%
• Mortgage Bankers Association -2.5%
• Corelogic 1.9%
• Fannie Mae 7.9%
• Freddie Mac 7%

Overwhelmingly positive from the industry's biggest players.

I would be interested in hearing those same predictions right before the 06-08 crash..

 

[530RL]

Lots of those build slots will free up when buyers take a massive hair cut in the markets LOL

Fair point.

For existing product to fall in price, first there must be abundantly available new inventory.

When there is an abundance of new inventory, whether it be cars, boats or houses we can start worrying about a fall in existing prices.

For now, that certainly is not the data.

 

[DrunkenSailor]

Fair point.

For existing product to fall in price, first there must be abundantly available new inventory.

When there is an abundance of new inventory, whether it be cars, boats or houses we can start worrying about a fall in existing prices.

For now, that certainly is not the data.

It goes both ways. A reduction in buying power putting a damper on demand can increase inventory. How many people are going to be lining up to pay over MSRP on a truck with a 5% interest rate.

 

[LargeOrangeFont]

It goes both ways. A reduction in buying power putting a damper on demand can increase inventory. How many people are going to be lining up to pay over MSRP on a truck with a 5% interest rate.

As long as they have jobs.. a ton of people.

If they don’t sell trucks over MSRP, they will just go back to they way they sold them in 2019 and have inventory.

 

[LargeOrangeFont]

I would be interested in hearing those same predictions right before the 06-08 crash..

In 07 they said it was going to go back up because there would be a refi boom .

 

[EmpirE231]

Fair point.

For existing product to fall in price, first there must be abundantly available new inventory.

When there is an abundance of new inventory, whether it be cars, boats or houses we can start worrying about a fall in existing prices.

For now, that certainly is not the data.

I’m noticing inventory @ car lots, RV lots etc back up. BMW wanted 20k over MSRP a few months ago, my brother actually got a X7 M package for MSRP right before the end of the year. It’s staring to turn that direction... pretty sure big business and factories are done playing Covid and not shutting down. Yeah people are out sick, but the machine keeps turning... a little slower, but it’s turning.... unlike the dead stop we experienced early 2020.

 

[EmpirE231]

Lots of those build slots will free up when buyers take a massive hair cut in the markets LOL

There will be no hair cuts according to most people in here! All this economic boom is based on sound money and principles! Leverage and debt = great success... and it NEVER fails lol. We’re riding this thing to the moon.

 

[HTMike]

Fair point.

For existing product to fall in price, first there must be abundantly available new inventory.

When there is an abundance of new inventory, whether it be cars, boats or houses we can start worrying about a fall in existing prices.

For now, that certainly is not the data.

I agree with what you state. The only game the fed has left to play is to hike rates interest rates up and to hike them up hard. I have heard some say 10% would be a good start. This .25% bullshit is like pissing on a forest fire.

 

[Done-it-again]

I agree with what you state. The only game the fed has left to play is to hike rates interest rates up and to hike them up hard. I have heard some say 10% would be a good start. This .25% bullshit is like pissing on a forest fire.

I’m all about the feds stop giving out free money first (stimulus) before raising rates and let the economy level out first then raising rates accordingly. You raise them to fast and will have stagnation. Its happened before.

 

[HTMike]

I think they will rip the band aid off after the dems lose the mid terms.

 

[HB2Havasu]

Good luck toys and second homes go first credit cards get maxed out to keep the lifestyle going it’s coming and havasu homes will drop like crows shit .

I don’t think Havasu is the same Havasu as the last slowdown in 2008. There is a lot more full time residents than vacation home residents now. The Work-from-Home Jobs are never going away now that a lot of employers have learned they can trust their employees. The cost savings in unneeded office space saves a grip of cash. It’s become a profit model !!!

Until there is a glut of Inventory yore not going to see prices drop like cow . With the Brandon Economy and double digit inflation on the horizon I wouldn’t be shocked to see Havasu prices go up another 10%-15% this year. People are still fleeing California like there is the Black Plague, lol. Do you know that since the pandemic started over 14 Million people have been permanently made remote workers. There’s a lot of these people now in Havasu with great paying jobs.

 

[Roosky01]

Sounds like the report on inflation supposedly to be released tomorrow is a whopper...

 

[DUNEFLYER]

When the shit hits the fan I think Havi will see a few more peeps show up from Ca. There are quite a few peeps in Ca ready to leave but have to wait or want to wait for something to happen to pull the trigger.
For myself, I have run a business here for over 30 years and the next downturn I will shut down the businesses and retire.
I will get to spend a lot more time on the Arizona side of the lake.
No pension but I should be ok.
I think Havi might stay busy for a bit even after a slowdown.
Anyone know how mortgaged all the homes in the entire city are based on current values?

 

[Ace in the Hole]

Anyone know how mortgaged all the homes in the entire city are based on current values?

I would venture to say far more homes in havasu are owned free and clear than you would think..

I'd like to see data on the LTV and down payments done in the last 2 years in havasu though.

 

[HNL2LHC]

The cash out refi's are a little higher of a rate, but still very low (well as of 1 week ago)

I did the same w/ a 15yr a while back... and I think I only have 9 to go... which is very nice, I had a similar plan of being done with it early.

My place wouldn't make a good rental... it's more of a live in it, or sell it type of place.... but my idea on a 30yr, low interest and still a fairly low balance is that if inflation runs away and sticks around... you'd be paying off this fairly low debt with future inflated dollars / income, or I would sell and move on at that point meaning I just took some profit a little early.

who knows... I'm no inflation expert, and not into the leverage game (even though I know it works for some people)

I think holding on to some extra cash like you're doing is smart...... there might be some opportunity ahead?

I have refied and cashed out when buying our 2Nd, 3rd & 4th home. As noted the rate is a little higher but not even a whole percentage point. Not really much you can do about that. As far as how much you can take out it is all about the ratios. I think that if you go to less than 20% you are dinged again. Talk to a lender to see what the read specifics are.

 

[pkbullet]

I’m noticing inventory @ car lots, RV lots etc back up. BMW wanted 20k over MSRP a few months ago, my brother actually got a X7 M package for MSRP right before the end of the year. It’s staring to turn that direction... pretty sure big business and factories are done playing Covid and not shutting down. Yeah people are out sick, but the machine keeps turning... a little slower, but it’s turning.... unlike the dead stop we experienced early 2020.

My simple survey of one. We have five franchises and my on ground and on order is currently the worst availability that we have experienced to date.

 

[COCA COLA COWBOY]

As long as they have jobs.. a ton of people.

If they don’t sell trucks over MSRP, they will just go back to they way they sold them in 2019 and have inventory.

I was just talking about this with a buddy who works with a lot of Car Dealers as his investors in real estate projects. He said his clients are telling him that quality control went down dramatically due to COVID and it may be best to wait to by trucks until the market goes back to normal. Apparently, lots of issues with new trucks hitting the consumers.

 

[LargeOrangeFont]

I was just talking about this with a buddy who works with a lot of Car Dealers as his investors in real estate projects. He said his clients are telling him that quality control went down dramatically due to COVID and it may be best to wait to by trucks until the market goes back to normal. Apparently, lots of issues with new trucks hitting the consumers.

Yep I can see that totally.

 

[hallett21]

So with inflation up, do we see rapid/increased spending for the next 6-12 months? Until people start to run out of cash?