It’s starting guys …

[77charger]

I wonder if the desk pilots are like the construction dorks? Some of the "newer" ones haven't learned the cycle, and live large...until they can't. I think it may happen to them as well. White collar and blue collar, we all learn from experience. Well, some may have shorter memories as well, no matter the gig.

Good friend In mortgage industry said other day many he knows never been through a downturn yet some bought nice toys or houses living it up. A downturn will hit them hard. He went through one knows ups down. Guys been so busy for last few years says ready to enjoy the slower times the money is saved. I was telling him like construction we have excessive busy and really slow times plan accordingly but seen new hires act like work is busy 24/7 then slows down wondering how they’re gonna pay their new fancy car.

 

[monkeyswrench]

Good friend In mortgage industry said other day many he knows never been through a downturn yet some bought nice toys or houses living it up. A downturn will hit them hard. He went through one knows ups down. Guys been so busy for last few years says ready to enjoy the slower times the money is saved. I was telling him like construction we have excessive busy and really slow times plan accordingly but seen new hires act like work is busy 24/7 then slows down wondering how they’re gonna pay their new fancy car.

I was that dipshit in 07... bootstraps and back at it, but a little smarter now.
Not living large, but was happy to breath again.

 

[colenighthawk]

This house here, in my neighborhood, was 615,000 two weeks ago. I looked at it. Neat and clean, basically same floor plan as mine.
The following week, price drop sign on the sign thingy they put in the front yard.
View attachment 1113765

My wife grew up in Vacaville

 

[JFMFG]

RDP inmates have correctly predicted 17 of the last 2 recessions.

In all seriousness, all the historic indicators point towards one. This one feels different.

I’d be interested to see some disposable income toy spending data. I heard MTI has 88 boats on order.,I’d be curious to see the velocity of new orders or cancellations coming.

Saw a interview with randy they plan to deliver 60+ boats this year. He better do it quick lol.

 

[hawgty55]

I absolutely agree that we are going towards one, not arguing that fact at all. I just don't see it hitting the housing market in a significant way.

Than What market do you think it hits? I mean if i was in that industry id be saying the same thing but…

 

[c_land]

I don’t think the market needs foreclosures for a drop in prices.

Existing home sales have been running at 6 to 6.5 million a year since the pandemic began while they used to hover between 5 and 5.5 million. That means about 1 million more homes per year are being sold than before.

Inventory measures supply that's sitting and not selling. It does not measure total supply which is what existing home sales are a proxy for.

So what has happened is that supply went up by 1 million homes a year, but demand has outstripped that increase in supply as a result of manipulating rates to record lows.

Now consider supply does not need to increase at all. Demand just needs to fall. Skyrocketing rates work at killing demand. That's all you need to restore balance to the market.

Just like the housing market got whiplash up from low rates, there’s a good chance it will get whiplash down from high rates.

https://twitter.com/i/web/status/1523649305600438272

 

[Go-Fly]

I have a question for banker types and real estate types. More of a curiosity and how it may effect the market in general.
"Boomers" if you will, tended to stay in one home much longer than my generation. I was born in 77. Come 1999 or so, to buy a home you kind of went into what you could get. In my case. It was not a nice area. Some of my friends were able to end up in good areas. Most of us "stair-stepped" to get to either better areas, or better homes.

Does the "mobility" of the current home owner play into the current market? My parents owned the same home from '67-'72 and '72 until my Mom passed in '12. From 2000-2012, I had been in 3, and was moving towards the 4th. Our goal was to set up camp before the oldest hit Jr. High, and stay at least until all are out on their own.

It seems we as Americans may be less driven by stability and putting down roots than our predecessors.

When I started working in the 70s, I was working with men that had been at the same company all their lives. The man and good friend that taught me how to be a machinist bought his house in 1964. He lived in it, raised three kids, retired and passed away in the same house. I got to see the change of how the employee became a throw away item and good paying job sent to China. How does that tie into this recession? The working man was told he or she were nonessential by their own government. I think there is going to be a great reset. People are not going to work for nothing anymore. If a company can make billions and sponsor race cars and sporting events but, can't provide healthcare for their employees. Why work there? You are being priced out of healthcare by people who don't work in it. During the recession you are going to see unemployment at an all time low and a help wanted sign on every business. 50% of American's are going to sit on their hands and stop spending money. This is going to blow up the entry level housing market and work it's way up. People have seen the light that you dont need stuff to be happy. This can all change if we turn inflation back, stop printing money to spend and stop loaning stupid money. I think we are headed for good times but we have to kill the cancer first.

 

[monkeyswrench]

When I started working in the 70s, I was working with men that had been at the same company all their lives. The man and good friend that taught me how to be a machinist bought his house in 1964. He lived in it, raised three kids, retired and passed away in the same house. I got to see the change of how the employee became a throw away item and good paying job sent to China. How does that tie into this recession? The working man was told he or she were nonessential by their own government. I think there is going to be a great reset. People are not going to work for nothing anymore. If a company can make billions and sponsor race cars and sporting events but, can't provide healthcare for their employees. Why work there? You are being priced out of healthcare by people who don't work in it. During the recession you are going to see unemployment at an all time low and a help wanted sign on every business. 50% of American's are going to sit on their hands and stop spending money. This is going to blow up the entry level housing market and work it's way up. People have seen the light that you dont need stuff to be happy. This can all change if we turn inflation back, stop printing money to spend and stop loaning stupid money. I think we are headed for good times but we have to kill the cancer first.

We, as a nation, seem to be running low on people that want to learn trades though. I think when the jobs were sent overseas, no one thought to keep the skills alive. Metal shop and wood shop were taken away from most schools. A lot of modern day mechanics are parts changers. My Pops knew some rough carpentry, so I was able to learn. My friend's dad taught me how to stick weld. A lot of old, out of print books showed me how to build my first motor. A lot of society chooses to sit on their hands because they don't know what to do with them. Complacency and comfort has made us weak. All the engineers and architects are relatively useless, it there is nobody to assemble their ideas.

 

[prorider]

Than What market do you think it hits? I mean if i was in that industry id be saying the same thing but…

Housing is going to be hammered.

 

[Desert Whaler]

We, as a nation, seem to be running low on people that want to learn trades though. I think when the jobs were sent overseas, no one thought to keep the skills alive. Metal shop and wood shop were taken away from most schools. A lot of modern day mechanics are parts changers. My Pops knew some rough carpentry, so I was able to learn. My friend's dad taught me how to stick weld. A lot of old, out of print books showed me how to build my first motor. A lot of society chooses to sit on their hands because they don't know what to do with them. Complacency and comfort has made us weak. All the engineers and architects are relatively useless, it there is nobody to assemble their ideas.

It's amazing how much 'Less' money you have to spend by fixing shit yourself . . . I've probably done $20K+ (labor) in repairs around the house this year & it only cost me materials. My neighbors house on the other hand is literally falling down . . . termites, dry-rot, and water damage . . . refuses to fix anything, outlets don't work in some rooms, lights don't come on etc. etc. total fire-trap . . .won't hire anyone, but has no problem taking the family to Maui for a week. Hell for that matter, his wife took over his car because the motor mounts on their Tahoe are broken and it's about ready to fall between the frame rails. Unbelievable . . . . reality check in 3 - 2 - 1 . . .

 

[c_land]

Housing economists noting the trends increased rates to builders this morning.

https://twitter.com/i/web/status/1523670283776782337

https://twitter.com/i/web/status/1523673111954006016

https://twitter.com/i/web/status/1523671863787880448

 

[monkeyswrench]

Housing economists noting the trends increased rates to builders this morning.

https://twitter.com/i/web/status/1523670283776782337

https://twitter.com/i/web/status/1523673111954006016

https://twitter.com/i/web/status/1523671863787880448

Don't worry!
I hear the housing market will be fine

 

[gqchris]

Don't worry!
I hear the housing market will be fine

Did a realtor or Mortgage Broker give you this juicy insider tip?

 

[hallett21]

Lol a 10% pull back this year is still an appreciation of like 30-40% over the last 5 years.

It wasn’t that long ago that homes didn’t sell over asking. That was considered normal. Now we’re calling it financial Armageddon.

 

[77charger]

It's amazing how much 'Less' money you have to spend by fixing shit yourself . . . I've probably done $20K+ (labor) in repairs around the house this year & it only cost me materials. My neighbors house on the other hand is literally falling down . . . termites, dry-rot, and water damage . . . refuses to fix anything, outlets don't work in some rooms, lights don't come on etc. etc. total fire-trap . . .won't hire anyone, but has no problem taking the family to Maui for a week. Hell for that matter, his wife took over his car because the motor mounts on their Tahoe are broken and it's about ready to fall between the frame rails. Unbelievable . . . . reality check in 3 - 2 - 1 . . .

We grew up with my dad and just brothers the type who fix their own stuff. He taught us the same. My moms family barely knows basic at best.

Can’t think of the thousands I have saved and when younger I enjoyed it more working in engines etc. today I do if I have to but lately saved a lot too. Truck knock sensors water pump boat fuel pump and water pump too. Plus minor electrical on house.

Today’s kids have no clue if they can’t do it from an app they’re lost.

 

[RiverDave]

Did a realtor or Mortgage Broker give you this juicy insider tip?

Not all realtors are saying this. I watch my wife have ten conversations a day explaining to people
What is happening in the Havasu market.

As of right now the upper tier homes are still extremely hot.. the mid level (investment homes) have slowed way down, and the lower tier homes are still very active.

Things have and are changing though. Personally I think it’s just kinda getting back to normal though. People are so used to selling houses over asking with a bidding war with one day on the market that was “their new normal”.. that isn’t reality.

 

[FROGMAN524]

I hope whatever happens hurts the 81 million idiots the most. Unfortunately, they're either dead or too stupid and will vote the same way again this November and in 2024.

 

[PaPaG]

Once rates have hit 4 or 5 more increases with the market bottoming out and as long as we do not have more idiots voted in again running our country I think it is going to be a great buying opportunity for cash buyers.

 

[monkeyswrench]

Not all realtors are saying this. I watch my wife have ten conversations a day explaining to people
What is happening in the Havasu market.

As of right now the upper tier homes are still extremely hot.. the mid level (investment homes) have slowed way down, and the lower tier homes are still very active.

Things have and are changing though. Personally I think it’s just kinda getting back to normal though. People are so used to selling houses over asking with a bidding war with one day on the market that was “their new normal”.. that isn’t reality.

That seems to be close to what is happening here. My guess would be we have the "high end" here...which is Cali median...still doing pretty well. The Cali retirees selling their home, and buying their dream home. I'm happy for them!
The mid range homes seem to be slowing a tic, but still moving. We didn't have too much issue with bidding wars, as there was a fair amount of inventory across the board. The "starter" type homes have slowed. To me, that is good. We didn't have to economics to support 400k starter homes.
If things settle to the way they were, I will be extremely happy. I'm not in the business of making money from real estate though. I just want to see people here be able to afford to live here again. All of the people it takes to run this area, can't buy here now. We don't have outlying areas...we are the outlying area

Did a realtor or Mortgage Broker give you this juicy insider tip?

Not friends with many collared shirt folk out here. The shovel and hammer people sure seem to be spending it like the money tree is in full bloom though!

 

[530RL]

Rates quadrupling? That’s gonna change the whole metric of affordability for nearly everyone. I don’t see how it cannot affect it in a significant way.

Quadrupling?

If 30 year fixed rate mortgages are 20 percent plus, the housing market will be the last problem people are worried about.

No never gonna happen I read the experts say that here. Lol

But got a friend in the loan industry been i it for 20 years he’s said they’ve slowed way down the last month he went through 2008 so knows how to manage been taking advantage of the good times saved enough to take time off ride out the bad times which he told me many in the industry will be in for shock.

In the first quarter of 21, 70 percent of every new mortgage origination was a refinance not a purchase.

With rising rates that business goes away.

I’m not certain falling mortgage originations is a perfect indicator of the health of the housing market given the vast majority of the volume is refinance. Maybe falling mortgage volume is more reflective of interest rate change of direction?

 

[Heylam]

Funny how the members of RDP thrive on what they perceive as bad news. Lots of negativity around here, I can see why RD is trying to clean things up.

 

[monkeyswrench]

Maybe falling mortgage volume is more reflective of interest rate change of direction?

I don't think anyone disputes this. Even my dumb ass sees a correlation between the two. How far the pendulum swings is what we all seem to be at odds with. We all hope not very far. Some are optimistic, others are seeing a financial apocalypse.
Me? I don't worry much about money. Why worry about what you don't have?

Some of you have some things to worry about though

 

[240Hallett]

Not all realtors are saying this. I watch my wife have ten conversations a day explaining to people
What is happening in the Havasu market.

As of right now the upper tier homes are still extremely hot.. the mid level (investment homes) have slowed way down, and the lower tier homes are still very active.

Things have and are changing though. Personally I think it’s just kinda getting back to normal though. People are so used to selling houses over asking with a bidding war with one day on the market that was “their new normal”.. that isn’t reality.

Can you give us the approximate price points that separate the three tiers?

 

[Uncle Dave]

Exactly, for the most part Houses aren't priced in real terms, they are priced in what the payment is on a 30. When rates go up, prices go down, so payment remains the same.
That being said, when the buyer pool starts drying up then prices start dropping rapidly.

I would say they are priced in at a very low 5-7 year note due in 30.

With interest forever at near nothing they can jump from short term note to short term note and dodging the slightly higher 30 year rate and not pay any points to secure the longer term note up front.

People that didn't lock the 30 in have a finite window before their payments start to jump.

 

[hallett21]

We’re gonna see 40 year mortgages become normal I bet. Banks will figure a way to increase consumer spending.

They already made car loans 5,6,7 year terms.

 

[jailbird141]

I for one and glad we have ANOTHER recession, home prices falling, interest rates are going up, etc., thread! I had no idea this was happening and the terrible possibilities that are looming. Now that I am aware, I can prepare!! Thanks RDP!! Now to start, I think I need some MRE's, then I can start selling off everything I own!!

 

[Done-it-again]

We’re gonna see 40 year mortgages become normal I bet. Banks will figure a way to increase consumer spending.

They already made car loans 5,6,7 year terms.

You will see arms come back first.....

 

[OldSchoolBoats]

There have been a few dramatic mortgage rate increases, since 1983 and during ALL of those times home prices increased. I am not saying that there will be massive appreciation this year, I am saying that prices will level off and we will see normal appreciation levels. Simply because there is a huge supply and demand issue remaining and nobody can say what the catalyst will be to bring this massive influx of supply.

There will not be a housing crash, no matter how bad some of you want there to be one.......

In spring 2007 there were 3.81 million homes for sale and spring of 2022, there are around 950K. OF COURSE more inventory will start popping up right now as that is what happens during this time of year. Homes with price cuts right now, were just over aggressive in their pricing. I have seen a couple recently in my neighborhood. There happened to be a some homes that sold for between $900K - $1million recently and these houses were sick and totally dialed in. Well that spurred a couple people to list too and around the same price that those just sold for. Only issue is, they didn't have the lot, the pool or the view. Those houses will sit and will have price reductions soon because they are overpriced for what they are.

Remember folks, A MASSIVE shift in housing prices would be around a 20% - 25% drop, which brings us back to 2020 - 2021 levels, when you all were talking about prices being too high, the market crashing and a housing bubble..........

 

[hallett21]

You will see arms come back first.....

Looks like the mid 2-3s right now

 

[FROGMAN524]

My friend works for Chase in their mortgage origination business. He said last year he was processing 15-20 applications a day and that is now down to 1-2 apps a day. Granted, those were 90% refis but it still hurts his pocketbook which in turn hurts how much he can spend on trips and unnecessary stuff. You get enough people who can't afford $6.00 gas and aren't as busy as they were in the last few years and it adds up to a downturn for everybody. GDP is already dropping.

https://www.bea.gov/system/files/gdp1q22_adv_chart-01.png

 

[Done-it-again]

My friend works for Chase in their mortgage origination business. He said last year he was processing 15-20 applications a day and that is now down to 1-2 apps a day. Granted, those were 90% refis but it still hurts his pocketbook which in turn hurts how much he can spend on trips and unnecessary stuff. You get enough people who can't afford $6.00 gas and aren't as busy as they were in the last few years and it adds up to a downturn for everybody. GDP is already dropping.

https://www.bea.gov/system/files/gdp1q22_adv_chart-01.png

How long has your buddy been doing that type of work?

People on the lending side of things will feel it the pain... At the same time, they jumped to that business as it was like taking candy from a baby. Its a great job to have when things are hot, but when it's not you feel the pain.

 

[Tamalewagon]

It's a strange market to be sure. This is where the cash buyers come out to play and get the deals. Wife had a listing go on the market last Tuesday and was off the market by Thursday over asking price. Killer house. www.2876KalmiaPl.com

 

[Done-it-again]

It's a strange market to be sure. This is where the cash buyers come out to play and get the deals. Wife had a listing go on the market last Tuesday and was off the market by Thursday over asking price. Killer house. www.2876KalmiaPl.com

You couldn't build a place like that for the price now... No wonder it sold so quick and cash is king.

 

[Havasu blue label]

We will hit 9 percent . Equity lines will hurt households bad

 

[Done-it-again]

We will hit 9 percent . Equity lines will hurt households bad

If they are smart, they should be looking at converting those now.

 

[Havasu blue label]

Great looking home

 

[rivrrts429]

It's a strange market to be sure. This is where the cash buyers come out to play and get the deals. Wife had a listing go on the market last Tuesday and was off the market by Thursday over asking price. Killer house. www.2876KalmiaPl.com

People who can afford homes like this one have no idea what the cost per gallon of gas is at any given time lol

The wealth gap is greater than its ever been. The high end housing market will remain hot is my guess.

 

[HNL2LHC]

It's a strange market to be sure. This is where the cash buyers come out to play and get the deals. Wife had a listing go on the market last Tuesday and was off the market by Thursday over asking price. Killer house. www.2876KalmiaPl.com

That house has the best aluminum doors and windows available.

 

[HNL2LHC]

People who can afford homes like this one have no idea what the cost per gallon of gas is at any given time lol

The wealth gap is greater than its ever been. The high end housing market will remain hot is my guess.

That is what got us through the 08-09 tough times. 75% of that business just kept on chugging. I see that happening once again. The owners will still have the $$$$ and there will be some products that cut their prices but the upper end brands typically do not. It will be interesting.

 

[Tamalewagon]

That house has the best aluminum doors and windows available.

Fleetwood...yessir.

 

[HB2Havasu]

I’m amazed at so many people drooling at the thought of a recession. It’s not good for anyone, including you!!! A real recession means job loses, foreclosures, families struggling. What is wrong with people?

If yore begging for this to happen to get a cheaper priced home yore probably going to be disappointed, lol. If anything with the lack of inventory and rising interest rates you may see prices come back around what the inflation rate is. This is what you see in a normal market. Not the 20%-30% increases we’ve seen since the beginning of the Plandemic. This market is nothing like 2008!

 

[Done-it-again]

I’m amazed at so many people drooling at the thought of a recession. It’s not good for anyone, including you!!! A real recession means job loses, foreclosures, families struggling. What is wrong with people?

If yore begging for this to happen to get a cheaper priced home yore probably going to be disappointed, lol. If anything with the lack of inventory and rising interest rates you may see prices come back around what the inflation rate is. This is what you see in a normal market. Not the 20%-30% increases we’ve seen since the beginning of the Plandemic. This market is nothing like 2008!

Agree..... crazy!

 

[D19]

I’ve noticed a lot more repo trucks driving around lately. Thinking high price of gas might have something to do with that. I wonder how high auto loan delinquencies are.

 

[Englewood]

All the RDP financial experts who have been predicting this every year for 10 years should be flush with cash ready to get rich...right?

I always get a kick out of people waiting/hoping for a "recession" or "crash" (which they don't even know the definition of BTW), yet they think somehow they will have the same buying power and not be affected? Good luck with that.

Let's do some simple math... RDP Financial Inc., suggests a 20% price drop?

$750k @ 3% = $3,162 ($1,138,330 in payments)
$600k @ 6% = $3,597 ($1,295,029 In payments)

Post "Crash" your mortgage is $435 more per month and $156,699 more over 30 years...Sounds like a good deal. Be careful what you wish for.

Still excited for this "recession"?!

Housing is going to be hammered.

If that happens, everything else follows suit. Construction, home improvement, restaurants, vehicles, etc. It all trickles down.

 

[badgas]

I’ve noticed a lot more repo trucks driving around lately. Thinking high price of gas might have something to do with that. I wonder how high auto loan delinquencies are.

repo in todays market ?

Most cars leased or financed in the last 3 years have gone up in value. I would sell it before I let a repo happen but then again I pay attention to stuff like that.

 

[NicPaus]

repo in todays market ?

Most cars leased or financed in the last 3 years have gone up in value. I would sell it before I let a repo happen but then again I pay attention to stuff like that.

Nieces BF truck was almost in repo mode. Took it to Carmax and walked away with 3500$. It was bought used from a small lot dealer for way to much when I heard about it a few years ago. He lost his job due to covid.

 

[c_land]

I’m amazed at so many people drooling at the thought of a recession. It’s not good for anyone, including you!!! A real recession means job loses, foreclosures, families struggling. What is wrong with people?

If yore begging for this to happen to get a cheaper priced home yore probably going to be disappointed, lol. If anything with the lack of inventory and rising interest rates you may see prices come back around what the inflation rate is. This is what you see in a normal market. Not the 20%-30% increases we’ve seen since the beginning of the Plandemic. This market is nothing like 2008!

All the RDP financial experts who have been predicting this every year for 10 years should be flush with cash ready to get rich...right?

I always get a kick out of people waiting/hoping for a "recession" or "crash" (which they don't even know the definition of BTW), yet they think somehow they will have the same buying power and not be affected? Good luck with that.

Let's do some simple math... RDP Financial Inc., suggests a 20% price drop?

$750k @ 3% = $3,162 ($1,138,330 in payments)
$600k @ 6% = $3,597 ($1,295,029 In payments)

Post "Crash" your mortgage is $435 more per month and $156,699 more over 30 years...Sounds like a good deal. Be careful what you wish for.

Still excited for this "recession"?!



If that happens, everything else follows suit. Construction, home improvement, restaurants, vehicles, etc. It all trickles down.

What's the point of this?

I always find these threads interesting getting perspectives from multiple different sources. I don't see anyone cheering anything on, just a few people sharing their current assessment of their local landscape.

These threads come off the rails when someone pokes the hornet's nest and generalizes claims of those harmlessly participating.

 

[shintoooo]

Have you priced wooden shutters lately?

 

[RiverDave]

Can you give us the approximate price points that separate the three tiers?

Million plus is upper tier.. 400 below is lower tier, everything in the middle kinda stopped.

 

[hallett21]

Im gonna take a rash of shit I’m sure but......

That 10/1 ARM I posted earlier seems pretty attractive. It says maximum APR is 7%. Is that on top of the 3.1%?

10 years of 3.1% today is saving 2-2.5%. If you put that money aside I bet even in a worst case scenario you’d be money ahead for 12-15 years.