For the Real Estate Drop in sales and price Naysayers HOLD ONTO YOUR HATS

[PaPaG]

Either side will never be exactly right, if so we would all be real estate and stock market multi-millionaires. For some that are confused or are not fully understanding of what a correction or crash in the housing market is, including so many real estate and finance experts, here is a great article giving a basic definition, take it for what it is worth.

From a housing investment site:

Despite a number of people throwing down the terms “correction” and “crash,” not a lot of people know what these terms mean. Just so we’re all on the same page, we thought we’d put together a quick guide. This way you millennials will understand what all of those old bears mean (or if they’re just making s**t up).

What Is A Real Estate Correction?​

A real estate correction is relatively minor drop in the market. The market is in correction territory when the home price index falls not more than 10% from the highest price within a year. Corrections happen with greater frequency than you might expect, and are generally good for balancing market demand.

What Is A Real Estate Crash?​

A real estate crash is much less common than the media would have you think. When the home price index falls by more than 10% from the 52 week peak value, you’re experiencing a crash. Crashes are relatively rare, and are usually accompanied by a strong decline in economic macros. Strong declines in macros are also known as recessions.

 

[OldSchoolBoats]

A must listen for both sides

#1160 Lance Lambert | Is Real Estate About To Crash?

Listen to this episode from The Pomp Podcast on Spotify. Lance Lambert is the real estate editor at Fortune Magazine. In this conversation, we talk about the housing market, mortgage applications, interest rates, federal reserve, and trends & insights across housing and rent. Lance studies the...

open.spotify.com

 

[hallett21]

Yes across the US, Texas, Florida, North Carolina, Northern Nevada, and a few other areas of interest for sure, my thoughts are that once the slower and lower demand areas start to get close to bottom in larger numbers the higher demand areas could should probably would follow but with not as much margins and drops but they will drop (IMO). AZ and NV are getting hit right now and more to come, CA has been hit in some areas but in my opinion much more to follow, time will tell though.

Would you mind posting something you’d be interested in and what price you’d find ideal?

Honestly not a loaded question. Just curious to see where we’re at and where you want to see the market at.

 

[PaPaG]

Would you mind posting something you’d be interested in and what price you’d find ideal?

Honestly not a loaded question. Just curious to see where we’re at and where you want to see the market at.

I check the housing markets in the areas mentioned along with maybe a dozen more areas on roughly a monthly basis, my feelings are that we will have more drops coming down the road so at the moment none of the areas and prices are even close right now. I originally thought the end of '23 would be the bottom but after all the information changes on a constant basis I am thinking that the bottom may be later possibly in '24 sometime. I unlike some that comment on this thread adjust my thoughts and timelines on a constant basis, if the stock or housing market changes with new news I adjust my thoughts and timelines accordingly as any serious investor should do. It is a wait and see game in housing right now for me, in the stock market I am in and out on almost a daily basis. In the end I think another 15-20% drop in certain markets would spark my interest to get back into the housing market but you never know where the market is going to go for sure until it goes there.

 

[hallett21]

I check the housing markets in the areas mentioned along with maybe a dozen more areas on roughly a monthly basis, my feelings are that we will have more drops coming down the road so at the moment none of the areas and prices are even close right now. I originally thought the end of '23 would be the bottom but after all the information changes on a constant basis I am thinking that the bottom may be later possibly in '24 sometime. I unlike some that comment on this thread adjust my thoughts and timelines on a constant basis, if the stock or housing market changes with new news I adjust my thoughts and timelines accordingly as any serious investor should do. It is a wait and see game in housing right now for me, in the stock market I am in and out on almost a daily basis. In the end I think another 15-20% drop in certain markets would spark my interest to get back into the housing market but you never know where the market is going to go for sure until it goes there.

What’s your plan if prices go up 5-10%?

Wait? Sell it all?

 

[PaPaG]

What’s your plan if prices go up 5-10%?

Wait? Sell it all?

I do not think prices will go up and stay up in the areas of my interest in the short term (next 24 months), if they do I will just keep investing in the stock market and wait and see. Other than our river house, I sold all our real estate investments near the end of 2021 and 2022 at close to the peaks as I thought possible.

 

[530RL]

I check the housing markets in the areas mentioned along with maybe a dozen more areas on roughly a monthly basis, my feelings are that we will have more drops coming down the road so at the moment none of the areas and prices are even close right now. I originally thought the end of '23 would be the bottom but after all the information changes on a constant basis I am thinking that the bottom may be later possibly in '24 sometime. I unlike some that comment on this thread adjust my thoughts and timelines on a constant basis, if the stock or housing market changes with new news I adjust my thoughts and timelines accordingly as any serious investor should do. It is a wait and see game in housing right now for me, in the stock market I am in and out on almost a daily basis. In the end I think another 15-20% drop in certain markets would spark my interest to get back into the housing market but you never know where the market is going to go for sure until it goes there.

Is your drop prediction in nominal or real prices?

 

[PaPaG]

Is your drop prediction in nominal or real prices?

Not a prediction just my thoughts and in nominal prices.

 

[2Driver]

Its all educated guess work and opinion, like watching the countless “expert” guests on the financial news networks. No one really knows shit about what the future holds. History just proves it as they all just take turns being right and wrong.

The only thing you can do is secure your personal position. I do know Ive probably lost more money being conservative and procrastinating. But then Ive never been broke either

 

[pronstar]

We’re in financial purgatory right now and have been for some time.

We’re basically between grim forward-looking indicators and rockstar lagging indicators.

 

[2Driver]

A must listen for both sides

#1160 Lance Lambert | Is Real Estate About To Crash?

Listen to this episode from The Pomp Podcast on Spotify. Lance Lambert is the real estate editor at Fortune Magazine. In this conversation, we talk about the housing market, mortgage applications, interest rates, federal reserve, and trends & insights across housing and rent. Lance studies the...

open.spotify.com

I listed to the whole thing. Great info.

 

[Roosky01]

This doesn't appear to be good?

https://twitter.com/i/web/status/1628481653285822467

 

[Orange Juice]

When I search for trends, I‘ve look at homes with 10,000sqft lots, 2-3 car garages, and 2000-3200 sqft. In the NE Phoenix area. It’s very focused. I’ve been do this for 40 years, so I’ve seen a lot of economic cycles.

I turned 18 out of a Scottsdale high school in 1979. Interest rates were easily twice as much as they are today (12%), Unemployed was around 18%. I had no opportunities out of high school, so I join the U.S. Navy for 6 years, and got paid. Back in those days, assuming a prior owners low interest rate loan, from the 1960’s was somewhat common.

Todays recession, if you want to call it that, is different. Unemployed are basically the homeless at 3%. Interest rates are 4-7%. Jobs are paying better then they ever have. So what’s up?

Housing Inventory is very low, prices are going up. That’s because they‘re not making new detached single family homes. Phoenix is exploding at the moment with high density housing (some of it is pricy too).

Affordability wise, families are being steered into rental situations, or into high density housing, close to public transportation and Jobs. It’s the new world. Shared spaces, No maintenance, and still have a pool on the roof.

Unfortunately those who want a traditional 2400sf ranch style home on a 1/4 acre, you’ll have to be patient, and expect higher prices.

 

[jet496]

What’s your plan if prices go up 5-10%?

Wait? Sell it all?

Never sell unless you have to. We were going to sell two of our rentals in a "Peak" in 2005 or so & now they're worth double (one triple). Guaranteed houses will be worth double, triple in 10 - 20 years.

I'd buy more, right now at these prices, but there isn't anything worth buying. Anything worth a shit gets scooped up the moment it's on the market. If it's sitting for more than a few weeks there's something seriously wrong with the property.

 

[DrunkenSailor]

This doesn't appear to be good?

https://twitter.com/i/web/status/1628481653285822467

These application numbers directly corelate to the securitization levels of rmbs which are way down as well. The market should be in a death spiral and for originators it is.

Our market isn't hard to figure out.the majority of People with 2-3% interest rates aren't going to move. They won't be buying up and they won't be downsizing. They are going to sit it out. As a result the inventory of homes available for sale are relegated to the outliers who are forced to sell and Inventories will remain at low levels, keeping price artificially high.

Until something else happens this housing market isn't going to change.

The fed continuing to raise rates will only exasperate the issue as the two industries most directly affected are mortgage and automotive the two industries facing the greatest supply shortages for different reasons. Unfortunately they aren't going to stop raising until the housing cost number in core inflation begins to drop. The only way that happens is when housing prices fall.

We are in uncharted territory. The people saying that the market should crash are correct. The people who say the market won't crash are right too. In the meantime the financial industry is getting pounded.

 

[hallett21]

@OldSchoolBoats i saw something on an Instagram reel. Is it true that FHA loans are all assumable?

The point of the guy’s post was when making an offer on a home, there’s a chance you could assume a significantly lower interest rate.

 

[pronstar]

This article reads much like this thread…a mix of sunshine and gloom, with no clear “what comes next”.

Redfin Reports U.S. Homeowners Have Lost $2.3 Trillion in Value Since June Peak

The Bay Area housing market has lost more value in percentage terms than anywhere else in the country amid sluggish demand. Florida continues to…...

investors.redfin.com

 

[Booger Ray]

You guys missed out on this sweet deal!

9159 Los Angeles St, Bellflower, CA 90706 | realtor.com®

View 2 photos for 9159 Los Angeles St, Bellflower, CA 90706, a 3 bed, 1 bath, 1,036 Sq. Ft. single family home built in 1950 that was last sold on 11/08/2022.

www.realtor.com

 

[OldSchoolBoats]

@OldSchoolBoats i saw something on an Instagram reel. Is it true that FHA loans are all assumable?

The point of the guy’s post was when making an offer on a home, there’s a chance you could assume a significantly lower interest rate.

This is true, but hardly ever happens. Just a way to get clicks.

 

[hallett21]

This is true, but hardly ever happens. Just a way to get clicks.

So what would you do? Assume the loan and make up any difference with cash? Could you take a second for the difference?

To make it easy let’s say house is selling for 500k and 400k is left on the FHA loan.

 

[LuauLounge]

We'd sold our house in the early 80's and were shopping. Firsts were in the 18% range, so looked for assumable loans. Inventory was low, so we ended up renting and buying a couple of years later. Made an offer and firsts were at 12% and dropping every few weeks. Seller rented it to us for 6 months, first was 9.75%. Craziest deal I'd ever been involved in, worked out well.

 

[OldSchoolBoats]

So what would you do? Assume the loan and make up any difference with cash? Could you take a second for the difference?

To make it easy let’s say house is selling for 500k and 400k is left on the FHA loan.

Can't take a 2nd behind an FHA Loan. Would have to be cash and most people that have that kind of money aren't taking FHA loans, that's why it is just a gimmick IMO.

 

[DrunkenSailor]

I'm at the largest securitization conference in the world in Vegas for the next couple of days. I'll report anything earth shattering.

Any other members here shoot me a pm. I'll buy you a drink

 

[530RL]

Today's data dump

Pending home sales jump again in January

Pending home sales rose for the second consecutive month in January, jumping 8.1%, but they are still down 24.1% compared to last year.

www.housingwire.com

 

[530RL]

And some economic humor.....

 

[attitude]

Well looks like there is some good news. Everyone who overpaid for an RV over the last couple years now has an instant revenue stream lol.

 

[Realtori]

Before I get started, the first thing they teach you in Real Estate school is that we are NOT finical advisors. You will never hear myself or anyone else from Team RDP say this is what the future holds.

All we can to is show you what we feel are great deals. Aggressively negotiate deals (buy or sell) for our customers, And obviously do the best marketing in the industry with in house film guys like Michael, social media posts, and obviously using proprietary platforms like this one.

On that note, Dave has asked me to jump here and share the real information with regard to our market here in Lake Havasu so I will update this thread with some of my own opinions of what I think would be great forever homes or airbnbs and I will also be sharing factual (non debatable) market updates.

 

[Realtori]

JP Morgan Chase just announced a layoff of at least 1000 people and more to come due to the drastic drop in both housing purchases credited to CRAZY HOUSING MARKET slowing correcting and the doubling of interest rates..Redfin, Realtor.com did the same...YOU'VE seen Nothing YET.......if you planned on selling I hope you got it done or soon...if not expect some changes very soon. On the other hand, if you are a potential cash buyer TONS of great opportunities around the corner and from what I am guessing another 2 years of downturn and great prices to start very soon....

Here is a screenshot of the actual market data from the start of this thread till today. I can't tell you what the future holds but we can certainly look at the data to see what would have been the smart move in terms of buying or selling.

 

[hallett21]

Well looks like there is some good news. Everyone who overpaid for an RV over the last couple years now has an instant revenue stream lol.
View attachment 1204690

You laugh but my mom gets $145 a night for her 17ft airstream lol.

Converted shipping container (including buying the container, underground, build out etc cost 15k) rents for $165 a night and is booked at least 60 nights a year lol.

 

[attitude]

You laugh but my mom gets $145 a night for her 17ft airstream lol.

Converted shipping container (including buying the container, underground, build out etc cost 15k) rents for $165 a night and is booked at least 60 nights a year lol.

Is that located in a popular travel destination or is it located in Corona on a annual lease?

 

[hallett21]

Is that located in a popular travel destination or is it located in Corona on a annual lease?

Agoura hills by wedding venues so location definitely plays a roll.

 

[attitude]

Agoura hills by wedding venues so location definitely plays a roll.

A big difference between a Airstream vacation rental and a toyhauler being marketed as an actual home lol.

 

[RiverDave]

Here is a screenshot of the actual market data from the start of this thread till today. I can't tell you what the future holds but we can certainly look at the data to see what would have been the smart move in terms of buying or selling. View attachment 1204851

In short from June of 19 ya woulda doubled your money. From June of 22 you would be pretty close to even from the looks of that.

 

[hallett21]

In short from June of 19 ya woulda doubled your money. From June of 22 you would be pretty close to even from the looks of that.

And 3-5% less on your mortgage than today.

 

[ChumpChange]

Proof the market is collapsing.

Britney Spears Takes Nearly $2 Million Loss in Calabasas Home Sale

Britney Spears' quick decision to buy, and then turn around and sell, her new home is creating a significant financial loss for the singer.

www.tmz.com

 

[Flatsix66]

Proof the market is collapsing.

Britney Spears Takes Nearly $2 Million Loss in Calabasas Home Sale

Britney Spears' quick decision to buy, and then turn around and sell, her new home is creating a significant financial loss for the singer.

www.tmz.com

She is known for her smart decisions.

 

[mbrown2]

Proof the market is collapsing.

Britney Spears Takes Nearly $2 Million Loss in Calabasas Home Sale

Britney Spears' quick decision to buy, and then turn around and sell, her new home is creating a significant financial loss for the singer.

www.tmz.com

Oops...she did it again!

 

[LargeOrangeFont]

Proof the market is collapsing.

Britney Spears Takes Nearly $2 Million Loss in Calabasas Home Sale

Britney Spears' quick decision to buy, and then turn around and sell, her new home is creating a significant financial loss for the singer.

www.tmz.com

You don’t see her with a hat very often.

 

[c_land]

Proof the market is collapsing.

Britney Spears Takes Nearly $2 Million Loss in Calabasas Home Sale

Britney Spears' quick decision to buy, and then turn around and sell, her new home is creating a significant financial loss for the singer.

www.tmz.com

Is she part of the smart money that RDP claimed was still buying through 2022?

 

[Havasu blue label]

Yes it is she owns 2 homes on Nottingham dr griffth park area Fulton mgmt handles everything

 

[HCP3]

 

[Looking Glass]

Today 30 Year- 7.1%, Could this be a Misprint?

 

[Havasu blue label]

High 5s and low 6s are out there

 

[regor]

The Face Of Housing Ownership Is Changing​

The U.S. housing market has become a speculative investment and now homebuyers are competing with I-Buyers that have lots of low-cost capital...

FRI MAR 3, AT 9:05 AM


Very sad, the #1 acquisition of wealth building is being removed from millions of young Americans.

This maybe good for us with homes, but it will be devastating to future generations.

 

[TCHB]

I am thinking interest rates will settle into the average for the past 40 years. 7 to 8% for home loans.

 

[regor]

I am thinking interest rates will settle into the average for the past 40 years. 7 to 8% for home loans.

Me too.

US Services PMI Signals Inflation Re-Accelerating In Feb, Return To Expansion​

"...the rate of inflation for goods and services reaccelerated in February to its highest since last October ..."

FRI MAR 3, AT 7:05 AM

 

[OldSchoolBoats]

High 5s and low 6s are out there

Not for conventional. High 5's and low 6's

for FHA/VA.

I am thinking interest rates will settle into the average for the past 40 years. 7 to 8% for home loans.

We don't believe this to be true. We saw a double top this week in bonds. Yesterday, despite the ISM data, bonds rallied. We have non farm payroll and CPI in the next 2 weeks. I believe rates will slowly come down and settle in the mid 5's by summer time.

When conventional rates touched the high 5's in January we saw applications explode so if we settle into that 5.5% range, I think we see a ton of buyers come back into the market.

Interesting article here as well for all the doom and gloomers -

Housing rebound: Home prices will enter growth cycle akin to 1980s-90s

Under that scenario, US home prices will be up 23% in 2027 compared to 2021 levels, economists surveyed by Zillow predicted.

markets.businessinsider.com

 

[Orange Juice]

I’m following the bond yields, and have ladder into the short end of the curve, getting paid every month. (4-5%).

The rental market will loosen up, if the 10 year bond hits 6%, and will sell off if it goes above 7%. Investors will lock in that easy cash, and retire.

Going forward, most new homes will be high density, and near public transportation, and garages/parking spaces are extra..

If you want a home on a 1/4 acre in the “city”, with your own private water, gas, electric, sewer hook-up, expect to pay $1M+ just for the lot).

 

[EmpirE231]

Banking troubles

Silicon Valley Bank fails to find buyer as run on bank outpaced sale process — CNBC

SVB is a major bank for venture-backed companies, and cited cash burn from clients as one reason it was looking to raise additional capital.

stocks.apple.com

 

[Cdog]

Still short on inventory in both SoCal & Phoenix. Golden handcuffs for those with > 4% rates & lack of building in SoCal will continue to be an issue. We have more inventory than the last couple of years but still historically low. Balanced market in Phoenix is around 20k homes on the market. OC & SD average market time is 38-40 days. Some weeks will look like buyers are gaining ground....Some weeks will look like sellers are gaining ground...A lot more of the same...