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Something big is about to happen in the housing market

2Driver

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No one is paying $10 a roll for TP or $100 for a box of Twinkies anymore.

Once the supply chain thing all catches up things will equalize. Housing jumped 20% in 12 months because of frenzied FOMO buying in a unnatural short supply window combined with inflated material pricing.

When all this settles out a lot of buyers in the last 6 months will be looking at their house like they look at their $100 box of Twinkies :)
 

HB2Havasu

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New home sales are down 20% from June of 2020, and inventory is rising.

2020 was a Unicorn in economics that I would toss in the trash. Home sales are up compared to 2019 so there’s that, lol 😂
 

81Sprint

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I am putting my house on the market in the next week, and buying a 45' Fifth wheel. I don't feel the country is headed in the right direction and something has to give. I could be wrong, but i'm making the move. If they go so far as to shut Vegas down again it will kill jobs in my line of work then I can just move back to a red state.
 

BHC Vic

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You are leaving out one important piece of the story.. why were they no longer able to make payments? You just don’t get foreclosed on at random.

They either lost their job, didn’t refi their ARM or both.

Neither of those conditions exist today. With low rate fixed mortgages, and economy holding jobs for now.

Nor is their excess vacant inventory devaluing home prices.
I already see a huge number of people in my industry that have lost their job. What’s saving them is the extra 300 for edd. That stops this week. So now they need to go back to work if there’s work to be found or start to see money going away quickly because 400 from edd gets spent a lot quicker than 700.
 

BHC Vic

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So basically no one knows where we really stand because everything has been propped up for a year. End of this year will tell the story imo
 

Dennis-19

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You are leaving out one important piece of the story.. why were they no longer able to make payments? You just don’t get foreclosed on at random.

They either lost their job, didn’t refi their ARM or both.

Neither of those conditions exist today. With low rate fixed mortgages, and economy holding jobs for now.

Nor is their excess vacant inventory devaluing home prices.
They lost some or all household income, payment increased or all.

Vacant inventory is not the same as distressed inventory. Properties can be vacant for a number of reasons. For example, in the past year, I've sold at least 7 homes that were vacant. Most of those people just moved. That's not a distressed sale. LOL! They're are a ton of distressed properties, but they are not reported (notice of defaults are not being filed).

I recently sold two homes for people who where over a year behind in payments. They had equity and ran. Neither of those homes had notice of defaults filed therefore the public had no idea of a distressed sale, it's confidential at that point and shows as a "standard sale". What happens when NODs (notice of defaults) start getting filed and every person with a computer can go on Zillow and see all the foreclosures?... I'll tell you, the mentality of buyers will change and everyone will want a deal. They see the seller hurting and they low ball. I'm sure history will repeat itself and those with pending NODs will again waste time trying to renegotiate their mortgages (loan mods), while their equity goes away, if they still had any.
 

LargeOrangeFont

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I already see a huge number of people in my industry that have lost their job. What’s saving them is the extra 300 for edd. That stops this week. So now they need to go back to work if there’s work to be found or start to see money going away quickly because 400 from edd gets spent a lot quicker than 700.
If $1k a month is going to make or break you.. then you need to start hustling on the side, cuttings monthly costs, or both. There is plenty of opportunity out there.

How new are their trucks? How new are their phones? How often do they eat out? Why do they still have their toys?

You see where I’m going with this.
 

HotRod82

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Lots of good points being made here, my neighbor is selling his rental home here in SD because he got lucky and his deadbeat renter moved out. They owed him about 30K in back rent that he will never see. Luckily he could afford to let the deadbeats live in his house rent free for over a year. He is selling because he's just done dealing with renters. I wonder how many homes will be sold for this simple reason if the moratoriums are actually lifted?
 

riverroyal

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The best way to crash a market or put fear into people is blast it all over social media.
if there’s a housing ‘crisis’ or if the sky falls it’s because of social media.

it’s fine if the market mellows out. That’s not a crash. That’s not a panic situation.

if it does crash I’m buying a 08 magic and doing donuts around guys waiting on the speed car 😁
 

LargeOrangeFont

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They lost some or all household income, payment increased or all.

Vacant inventory is not the same as distressed inventory. Properties can be vacant for a number of reasons. For example, in the past year, I've sold at least 7 homes that were vacant. Most of those people just moved. That's not a distressed sale. LOL! They're are a ton of distressed properties, but they are not reported (notice of defaults are not being filed).

I recently sold two homes for people who where over a year behind in payments. They had equity and ran. Neither of those homes had notice of defaults filed therefore the public had no idea of a distressed sale, it's confidential at that point and shows as a "standard sale". What happens when NODs (notice of defaults) start getting filed and every person with a computer can go on Zillow and see all the foreclosures?... I'll tell you, the mentality of buyers will change and everyone will want a deal. They see the seller hurting and they low ball. I'm sure history will repeat itself and those with pending NODs will again waste time trying to renegotiate their mortgages (loan mods), while their equity goes away, if they still had any.
Buyers getting a deal would mean either buyer demand goes down, or inventory supply goes up. Access to cheap mortgages is not going to stop.

What if very few people actually get foreclosed on?
 

Dennis-19

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Buyers getting a deal would mean either buyer demand goes down, or inventory supply goes up. Access to cheap mortgages is not going to stop.

What if very few people actually get foreclosed on?
To your edit, buyer demand increases in a down market because more people can afford homes and investors come back into play.
 

LargeOrangeFont

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Are you in government or in the real estate or finance business?
I’m in the common sense business :) Nothing is going into freefall during Biden’s term. Things will cool off certainly and there will be peaks and valleys, but if you think the Fed and DC are going to let a meltdown and mass foreclosure event happen you have not been paying attention the last 18 months.
 

LargeOrangeFont

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To your edit, buyer demand increases in a down market because more people can afford homes and investors come back into play.
And that drives prices back up. Buyers getting a “deal” comes after values are down, and that would come after lack of demand or increased inventory, causing prices to drop.
 

LuauLounge

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Housing prices go in cycles, some times up, some time down. Know of folks that bought in the peak of 2006, paid nothing down, two years later the value of their place dropped over $200k. They walked, rented for two years and bought another place. Although their old home is up over when they bought it, they came out better financially by walking.
 

BHC Vic

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When this is the first post and the page is filled with
If $1k a month is going to make or break you.. then you need to start hustling on the side, cuttings monthly costs, or both. There is plenty of opportunity out there.

How new are their trucks? How new are their phones? How often do they eat out? Why do they still have their toys?

You see where I’m going with this.
It’s not going to make or break me, you, or most the members here. However i think it’s a larger number than you think. I posted the results of what these guys have saved. Not good. I hope I’m wrong and there isn’t a crash, I like seeing the value of my home go up. I’m just not going to take any extra risks right now because I think timing is bad. I’m just lucky I have that option. There’s a lot of people stuck in between a rock and a hard place. I have to thank rdp because a couple years ago I was one of those guys. I try to help these apprentices but like Noah said you can’t save them all.
 

Dennis-19

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And that drives prices back up. Buyers getting a “deal” comes after values are down, and that would come after lack of demand or increased inventory, causing prices to drop.
I’m in the common sense business :) Nothing is going into freefall during Biden’s term. Things will cool off certainly and there will be peaks and valleys, but if you think the Fed and DC are going to let a meltdown and mass foreclosure event happen you have not been paying attention the last 18 months.
Let's agree to disagree.

Have a great day.
 

EmpirE231

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If $1k a month is going to make or break you.. then you need to start hustling on the side, cuttings monthly costs, or both. There is plenty of opportunity out there.

How new are their trucks? How new are their phones? How often do they eat out? Why do they still have their toys?

You see where I’m going with this.
problem is 1K per month will break MOST people

You are acting as if most people are financially conservative, and have huge savings with a well balanced budget.
 

Cdog

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Inventory in the Phoenix market has gone from just under 7k homes available from February- May to 10,601 as of today. We will see if this trend continues. We could go up to 15-18k homes on the market and go back to a balanced market. I would prefer this. The situation as of January is not sustainable and brings out the dirt bags looking to take advantage of people.
 

2Driver

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Things are still hot but are showing signs of retreat, except carefree/cave creek.

crawford.JPG
 

EmpirE231

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I do not buy into the "low inventory" line. They used that same line in 06-08.

we are currently in a circle jerk of overinflated real estate prices > rolling equity into next over inflated real estate purchase etc etc. playing hot potato... and soon people will get burned. Mix in dollar devaluation / inflation and it is a recipe for disaster.

lockdown 3.5 might trigger it, or keep it going....... who cares anymore haha
 

LargeOrangeFont

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When this is the first post and the page is filled with

It’s not going to make or break me, you, or most the members here. However i think it’s a larger number than you think. I posted the results of what these guys have saved. Not good. I hope I’m wrong and there isn’t a crash, I like seeing the value of my home go up. I’m just not going to take any extra risks right now because I think timing is bad. I’m just lucky I have that option. There’s a lot of people stuck in between a rock and a hard place. I have to thank rdp because a couple years ago I was one of those guys. I try to help these apprentices but like Noah said you can’t save them all.
I mean I agree, but there is a point when you have to be financially responsible for your actions and sleep in the bed that you made for yourself. Like I said, if you can't afford to save some money for hard times, you are doing something wrong.

If your contacts liquidated their equity to buy rental property, there are options. Go live in the rental, and rent out your main house, rent out everything and move elsewhere, sell everything now and move or rent.

Like I said, values are not down, equity still exists. If you have assets you have exit options. That does not mean you they will like the options, but again, they put themselves in the situation.
 

Drew

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A crash in the housing market seemed inevitable during the early weeks of the COVID-19 recession. However, that bust didn't come to fruition, in fact, the opposite happened: A combination of government support, recession-induced low interest rates, and eager homebuyers set off a housing boom. Since the onset of the crisis, median home prices are up a staggering 24%.

But much of that government aid and support is about to go away. The foreclosure moratorium, which prevents foreclosures of federally-backed mortgages, will come to an end on July 31. Then on Sept. 30, the mortgage forbearance program, which allows some borrowers to pause their payments, will lapse. Since the beginning of the pandemic, over 7 million homeowners have been enrolled in the forbearance program. However, as the economy has improved that number has fallen. As of July 11, there are still 1.75 million borrowers, or 3.5% of U.S. mortgages, enrolled in the forbearance program.

The foreclosure crisis following the 2008 housing crash was so bad, in part, because tens of millions of financially strained homeowners were underwater (meaning a borrower's remaining mortgage balance is greater than the home's value) and had no choice but foreclosure. That's unlikely to be the case for financially strapped homeowners this year. These homeowners are likely sitting on sizable home equity (home value minus the outstanding mortgage), and if they can't repay the mortgage they can simply sell into the currently red-hot housing market.

Yeah the housing market will be ok. But what about all those huge SBA loans given the already failing business that will never be paid back ever. You know these loans were sold short just like those shit Mortgages. I wonder what will happen here
 

BHC Vic

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I mean I agree, but there is a point when you have to be financially responsible for your actions and sleep in the bed that you made for yourself. Like I said, if you can't afford to save some money for hard times, you are doing something wrong.

If your contacts liquidated their equity to buy rental property, there are options. Go live in the rental, and rent out your main house, rent out everything and move elsewhere, sell everything now and move or rent.

Like I said, values are not down, equity still exists. If you have assets you have exit options. That does not mean you they will like the options, but again, they put themselves in the situation.
I just hope people exercise their options before it’s too late. Like Dennis was saying. If you wait to long you’re screwed
 

LargeOrangeFont

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I do not buy into the "low inventory" line. They used that same line in 06-08.

we are currently in a circle jerk of overinflated real estate prices > rolling equity into next over inflated real estate purchase etc etc. playing hot potato... and soon people will get burned. Mix in dollar devaluation / inflation and it is a recipe for disaster.

lockdown 3.5 might trigger it, or keep it going....... who cares anymore haha
You guys talk about inflation like econ 101, but don't acknowledge supply and demand from econ 101.

Where I am at.. there is very little for sale. I looked at over 100 houses in my city in my price range 2009. There might be 100 houses for sale within the entire city today, and there are 10-12 in the same price range as my house is in today. There is low inventory. That drives up prices.

I'll ask you again - How do you get burned rolling equity form one house into another purchase? What is the only thing that would force you to walk away from that equity?

Loosing yore income. And who is forcing anyone out of their homes?
 

LargeOrangeFont

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I just hope people exercise their options before it’s too late. Like Dennis was saying. If you wait to long you’re screwed
And if you keep waiting beyond that you cash in again :)

Literally the ONLY people that got screwed on RE values for more than a couple years are the folks that bought in that 2 year period from late 05-07. Those people didn't see values recover for 8 years and at the very worst 10 years.
 
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hallett21

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Realtors are literally throwing their brochure, notepad, calendar etc over our fence twice a week.


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LargeOrangeFont

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problem is 1K per month will break MOST people

You are acting as if most people are financially conservative, and have huge savings with a well balanced budget.
I didn't say they had to have a well balanced budget and be fiscally conservative, but how often do they eat out? What are their car payments? Why do they have a $1K phone? Why do they have toys?

You can get $1K a month out of many peoples budgets, they will just kick and scream about it, or tell you it isn't possible to make those sacrifices.

A guy with a skill in a trade can go make some extra money on the side, lets be real here.
 

BHC Vic

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Realtors are literally throwing their brochure, notepad, calendar etc over our fence twice a week.


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That’s the other thing. Everyone is in real estate now. All the hot girls from highschool all agents and a lot of dudes too. That can’t last forever
 

boatnam2

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I was in a costa mesa neighbor hood the other day, homes were comparable to my area of long beach as far as size and how nice everything is. 4 were for sale on one block alone, cheapest being 1,342,000 mill. Plenty of equity for most people no not sure too much is going to happen anytime soon.
 

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Its not like there are millions of new people in the market to buy a house. The population has not dramatically changed in 2 years. At least in California.

I think a big element to this dramatic rise in so-cal housing prices s people are afraid to sell their house, hence constrained supply.

Afraid of the higher costs of carrying a larger subsequent home purchase. Even with higher equity positions come covering closing costs, higher step up property tax basis, substantially higher living expenses, massive increase in unemployment, free government handouts, change during this liquifaction event, etc..

I'm not predicting anything specific with respect to home prices. I took that risk of the table years ago when I paid off my living space. Up great. Down no big deal as I need a place to live.
There are not millions of new people buying houses. but many that was working from home realized their house didn't work for them, or the location didn't work for them.

People are not afraid to sell, but they see no reason to. Anyone that bought 2 years ago or more is sitting on a nice chunk of equity at a low interest rate. They have no reason to move, they have no reason to walk away, and they have no desire to step back into renting.

I don't know why people keep thinking the events of 2008 are going to happen again when the fundamentals are simply not there.
 

HB2Havasu

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I’m not buying into the fear. Why you ask? 1. Inventories are far below 2019 levels. 2. Mortgage rates are still at approx 3%. 3. Unemployment is non existent for anyone willing to work. 4. Most people even if they haven’t made a payment since the pandemic began still have equity and can either refinance or sell for a profit. 5. Even if shit went South the Fed will step in and buy up defaults and/or re-paper mortgages in arrears. They are not going to want another 2008 on their hands.

If it goes down - I’m going to buy up some panic fearing real estate sellers properties and make a nice little profit in 5-7 years and buy me a 2006 Magic Deck Boat, lol 😛
 

LargeOrangeFont

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I’m not buying into the fear. Why you ask? 1. Inventories are far below 2019 levels. 2. Mortgage rates are still at approx 3%. 3. Unemployment is non existent for anyone willing to work. 4. Most people even if they haven’t made a payment since the pandemic began still have equity and can either refinance or sell for a profit. 5. Even if shit went South the Fed will step in and buy up defaults and/or re-paper mortgages in arrears. They are not going to want another 2008 on their hands.

If it goes down - I’m going to buy up some panic fearing real estate sellers properties and make a nice little profit in 5-7 years and buy me a 2006 Magic Deck Boat, lol 😛
This.
 

Universal Elements

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As Steve (2forcefull) said, inflation is the game changer.... this one is going to be Venezuela style 😳

 
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LargeOrangeFont

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Where did I infer the 2008 conditions exist? I didn't

There is much less incentive to move if there is a significant step up in basis and cost to carry thereafter?
You didn't. But the weekly RE threads since 2016 saying that we are 18 months away from 2008 do. :)

If you hate where you live and only lived there because you had to go into the office and now can work from home, The increased run rate is just the cost of doing business.
 

hallett21

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As Steve (2forcefull) said, inflation is the game changer.... this is one is going to be Venezuela style

If that were to happen even more of a reason to own a home at a fixed low interest rate.


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LargeOrangeFont

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As Steve (2forcefull) said, inflation is the game changer.... this is one is going to be Venezuela style 😳

Eh... If we go, they all fall with us.
 

brgrcru

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The people still with no jobs on the government cheese are the ones not paying rent. They are gonna get evicted as soon as the .gov allows it.
I Believe there are millions with jobs
That are not paying rent or mortgages. Spending all that extra money and not saving a dime
That’s the American way .
 

Holymoses

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Every historical housing chart will tell you we are going to see a change in our housing market. There's way too many conversations and articles saying everything in housing is on the up & up. That's the first sign its not on the up & up:) Get your cash in the bank and be ready for a ride!
 

BHC Vic

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If that were to happen even more of a reason to own a home at a fixed low interest rate.


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You could literally watch the market run with every stimulus check though. Stock moe did videos on it. Made some good money those weeks.
 

EmpirE231

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I didn't say they had to have a well balanced budget and be fiscally conservative, but how often do they eat out? What are their car payments? Why do they have a $1K phone? Why do they have toys?

You can get $1K a month out of many peoples budgets, they will just kick and scream about it, or tell you it isn't possible to make those sacrifices.

A guy with a skill in a trade can go make some extra money on the side, lets be real here.
Okay... say people eat out less... travel less, pull kids out of sports etc.... well there's your job shed for ya.... which then exacerbates the problem.

My take is that we are on very shaky grounds, very thin veneer between things chugging along and falling apart. You seem to think our current economic and real estate situation is on solid ground, and sound principles.
 

LargeOrangeFont

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I Believe there are millions with jobs
That are not paying rent or mortgages. Spending all that extra money and not saving a dime
That’s the American way .
Probably.. They will just get payments tacked onto the end of their loans.
 

lakemadness

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Get on Google and search ‘coming housing crash’ BUT put in the search dates of 2000 to 2006. You’ll notice not ONE single ‘expert’ saw it coming. This includes all the big financial papers.

Why do they think they know it all now and are so confident? Read the articles and you will see nothing has changed in terms of over-confidence.
Did you ever see the movie, Big Short? Doesn’t sound like it…
 

brgrcru

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The best way to crash a market or put fear into people is blast it all over social media.
if there’s a housing ‘crisis’ or if the sky falls it’s because of social media.

it’s fine if the market mellows out. That’s not a crash. That’s not a panic situation.

if it does crash I’m buying a 08 magic and doing donuts around guys waiting on the speed car 😁
the wrong party controls the white house
If the R party had won
It would be all over the media
The housing market is going to crash
The economy is bad
Etc etc etc .
 
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