WELCOME TO RIVER DAVES PLACE

Something big is about to happen in the housing market

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
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.
There is no problem to exacerbate right now, because jobs are stable

No, we have not been on solid principles for 100 years. If we were on solid principles we'd be talking about great it was the Dow hit 4500 today and we'd have been long since been taken over by some other country.

If you don't think, regardless of what happens, real estate is not going to continue to go up in the long term, I'll ask again - can you show me anyone that held a piece of RE for 20+ years that will stand up and say they regret buying it and it was a money loser (aside from folks that were victims of a natural disaster)?

Those people don't exist. In 2041 you will wish you could have bought at 2021 prices, just like we wish we could have bought at 2001 prices today.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
And just think....this isn't even the REAL national debt.....Its substantially understated and is running north of $125 trillion (including underfunded and unfunded social security, pensions, unfunded government programs).....

Just like all the other government statistics that are spun and lied about daily (like the unemployment rate, real covid death rate, etc).
Its too much to even matter anymore, and as you said those numbers are not even accurate. Who is gonna ask for their money? Most of that (like 75%) we owe to ourselves anyway.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
Bullshit. We'd be the soundest and strongest country on the face of the planet.....
Nope. We'd be waving the Nazi or Chinese flag right now. If we didn't take out debt as working capital to fund wars and our defense programs, and just saved up enough to pay cash for everything like everyone on RDP does, we would have been fucking steamrolled decades ago by another country that paid with a credit card and then killed the creditors.

A sound economic policy and no guns means you are just gonna get robbed.
 
Last edited:

EmpirE231

Well-Known Member
Joined
Jan 10, 2008
Messages
2,424
Reaction score
3,640
There is no problem to exacerbate right now, because jobs are stable

No, we have not been on solid principles for 100 years. If we were on solid principles we'd be talking about great it was the Dow hit 4500 today and we'd have been long since been taken over by some other country.

If you don't think, regardless of what happens, real estate is not going to continue to go up in the long term, I'll ask again - can you show me anyone that held a piece of RE for 20+ years that will stand up and say they regret buying it and it was a money loser (aside from folks that were victims of a natural disaster)?

Those people don't exist. In 2041 you will wish you could have bought at 2021 prices, just like we wish we could have bought at 2001 prices today.
but I bet the guys that bought in 2010-2012 are a lot better off than the guys that bought in 2019-2021 going forward over the next 20+ years. Buy low, sell high.... it is all in timing.

I'd say we are the furthest from any solid principles ever recorded.... could be wrong, but some of ya'll got a little too much "full faith and credit" in the US govt haha. No matter how hard they try to keep this from all falling apart, they will fail.
 

MSum661

Well-Known Member
Joined
Sep 20, 2014
Messages
4,093
Reaction score
5,775
And just think....this isn't even the REAL national debt.....Its substantially understated and is running north of $125 trillion (including underfunded and unfunded social security, pensions, unfunded government programs).....

Just like all the other government statistics that are spun and lied about daily (like the unemployment rate, real covid death rate, etc).
You're close........its actually $153 Trillion+, NOT including other unfunded .GOV debts

Screenshot 2021-07-27 at 14-49-01 U S National Debt Clock Real Time.png
 

Cole Trickle

Member
Joined
Sep 25, 2007
Messages
22,114
Reaction score
12,012
Nope. We'd be waving the Nazi or Chinese flag right now. If we didn't take out debt as working capital to fund wars and our defense programs, and just saved up enough to pay cash for everything like everyone on RDP does, we would have been fucking steamrolled decades ago by another country that paid with a credit card and then killed the creditors.
Pretty interesting series on history right now called the titans that built America. The government basically shit on them due to capitalism and then came running when they needed them for WWII.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
but I bet the guys that bought in 2010-2012 are a lot better off than the guys that bought in 2019-2021 going forward over the next 20+ years. Buy low, sell high.... it is all in timing.

I'd say we are the furthest from any solid principles ever recorded.... could be wrong, but some of ya'll got a little too much "full faith and credit" in the US govt haha. No matter how hard they try to keep this from all falling apart, they will fail.
Well no shit LOL. That is like saying those that bought Amazon during its IPO are better off that those buying it today.

Everyone that has been fear mongering over the economy for the last 6 years has missed more opportunity than they will ever lose in the next "crash". The way you are talking I'd expect you cashed out all your retirement, paid off your house, paid off all your cars, sold all toys and traded all the other cash and investments you had into gold you keep under your bed. :)

There is a balance to be had here, but sitting around waiting for the economy to implode again is a waste of time. Control what you can control, live your life and be prepared to capitalize when you get an opportunity.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
Pretty interesting series on history right now called the titans that built America. The government basically shit on them due to capitalism and then came running when they needed them for WWII.
Imagine that happening today....
 

EmpirE231

Well-Known Member
Joined
Jan 10, 2008
Messages
2,424
Reaction score
3,640
Well no shit LOL. That is like saying those that bought Amazon during its IPO are better off that those buying it today.

Everyone that has been fear mongering over the economy for the last 6 years has missed more opportunity than they will ever lose in the next "crash". The way you are talking I'd expect you cashed out all your retirement, paid off your house, paid off all your cars, sold all toys and traded all the other cash and investments you had into gold you keep under your bed. :)
not quite there, but doesn't sound like a bad plan.

sounds like you're buying real estate left and right for the last 3 years, and crypto.... hope it all works out!
 

BHC Vic

cobra performance boats
Joined
May 24, 2014
Messages
23,785
Reaction score
15,503
not quite there, but doesn't sound like a bad plan.

sounds like you're buying real estate left and right for the last 3 years, and crypto.... hope it all works out!
We had a zoom meeting with all the bosses and all the other instructors. I was asked if I owned any crypto. I had to say that I have a lot more than I’d like to admit 😂😂
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
not quite there, but doesn't sound like a bad plan.

sounds like you're buying real estate left and right for the last 3 years, and crypto.... hope it all works out!
Nope, why would I buy RE at these untenable prices when the markets have done so well in the last 15 months. :p
 

530RL

Well-Known Member
Joined
Sep 18, 2012
Messages
16,208
Reaction score
13,459
Buy a house you like in an area you want to live in at a price you can afford and make it your forever home, and then don’t pay attention to whether it’s going up or down.

I'm with you. I need a place to call home so it is my home, not my investment.

And I fix it up as I want so I enjoy living there, not as someone else may want if I ever sell it. 🤷‍♂️🤷‍♂️
 

Your ad here

Well-Known Member
Joined
Oct 16, 2014
Messages
3,029
Reaction score
4,042
Is it interest rates that are making home values rise? Crude math here but a loan of $180K @ 7% is $1200/month. Loan of $285K @ 2.99% is $1200/month. I'm in an entry level home and would one day like to move up and need a buyer for my house. If the buyer can afford $1200/mo... @ 7% interest I'll have buyers qualified for $180K and offers would be coming in around that price. @ 2.99% the buyers will qualify for $285K and offers would be coming in around that price. I was young in 08-09 but wasn't that a result of lenders qualifying buyer for more than they can afford? I'm sure there are new rules in place today that put a stop to that. Am I on to something here?
 
Last edited:

BHC Vic

cobra performance boats
Joined
May 24, 2014
Messages
23,785
Reaction score
15,503
Is it interest rates that are making home values rise? Crude math here but a loan of $180K @ 7% is $1200/month. Loan of $285K @ 2.99% is $1200/month. I'm in an entry level home and would one day like to move up and need a buyer for my house. If the buyer can afford $1200/mo... @ 7% interest I'll have buyers qualified for $180K and offers would be coming in around that price. @ 2.99% the buyers will qualify for $285K and offers would be coming in around that price. I was young in 08-09 but wasn't that a result of lenders qualifying buyer for more than they can afford? I'm sure there are new rules in place today that put a stop to that. Am I on to something here?
I’m not sure interest rates play a part in what someone is approved for. Based more on your debt to income ratio. But I could be way off
 

riverroyal

Well-Known Member
Joined
Nov 4, 2007
Messages
10,432
Reaction score
11,106
well if the sky is falling...110k for my toon this week. It has a full tank and is clean.
1.6 takes the house and toon. Package deal. This week only
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
well if the sky is falling...110k for my toon this week. It has a full tank and is clean.
1.6 takes the house and toon. Package deal. This week only
I’ll wait until next week when financial armageddon hits and take them both for $900k.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
I’m not sure interest rates play a part in what someone is approved for. Based more on your debt to income ratio. But I could be way off
It’s the the total monthly payment as a percentage of their income. The interest rate affects the payment so it is factored in that way.
 

DC-88

Well-Known Member
Joined
Aug 27, 2012
Messages
1,923
Reaction score
3,135
Is it interest rates that are making home values rise? Crude math here but a loan of $180K @ 7% is $1200/month. Loan of $285K @ 2.99% is $1200/month. I'm in an entry level home and would one day like to move up and need a buyer for my house. If the buyer can afford $1200/mo... @ 7% interest I'll have buyers qualified for $180K and offers would be coming in around that price. @ 2.99% the buyers will qualify for $285K and offers would be coming in around that price. I was young in 08-09 but wasn't that a result of lenders qualifying buyer for more than they can afford? I'm sure there are new rules in place today that put a stop to that. Am I on to something here?
Inflation, higher wages, way more compliance, and more extensive building requirements are also a factor these days, but you're right. My first home loan in 1992 at 22 years old was 180k at a variable around 7% and the nut was about 1,150 with pmi from what I remember. I have a part time employee right now who is a long time buddy who just qualified for a loan of 265k for 30 years to take over a reverse mortgage on his Dad's house after he passed away recently. I wrote a note on letterhead and provided 941 info. documenting he makes at least $3,500 a month and he had no problem qualifying lol. He is debt free and currently single , and supposedly his payment will be $1,100 including prop 13 grandfathered tax based on current assessed value since it was his Dad's house.
 

BHC Vic

cobra performance boats
Joined
May 24, 2014
Messages
23,785
Reaction score
15,503
It’s the the total monthly payment as a percentage of their income. The interest rate affects the payment so it is factored in that way.
It’s been a while but I remember being approved for a certain amount. Like let’s say 800k.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
It's a movie written, shot, and directed by a team that knows about as much about economics as a millennial does about changing his car engine oil
I’d recommend the book “The Monster”. Based on the company I worked for, and documents the sub prime loan business and how Ameriquest, did business.
 

pronstar

President, Dallas Chapter
Joined
Aug 5, 2009
Messages
30,658
Reaction score
29,859
It’s the the total monthly payment as a percentage of their income. The interest rate affects the payment so it is factored in that way.
Yup, that’s the basic affordability index.

Snd it still shows houses are at a historically affordable level, because high prices are offset by low interest rates.

People buy based on the payment they can afford…then they back into a price point that correlates to the payment.


Sent from my iPad using Tapatalk
 

ParkerMagic

Well-Known Member
Joined
Jun 12, 2012
Messages
2,134
Reaction score
2,049
These responses only further show that the sheep of the world will believe anything they are told!

Just like the “shadow inventory” everyone talked about from 2010 on. Now it’s “when the foreclosure moratorium ends” LOL. Banks will modify loans, gov will step in w/ new programs to bail out the ones who can’t afford it. Nothing more than an adjustment will happen, if that. I don’t even think 10% is possible.

As long as rates don’t go up, I think we’re fine. For you keyboard economists, look up the average household equity in 2008 vs 2021.

Typically the people calling for a “crash” are just “hoping” it comes so they can purchase.
 

Havasu blue label

Well-Known Member
Joined
Nov 30, 2018
Messages
2,754
Reaction score
1,405
Sounds like somebody’s worried this is a cleaner market but it’s coming it’s a fake housing market Havasu is perfect example
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
These responses only further show that the sheep of the world will believe anything they are told!

Just like the “shadow inventory” everyone talked about from 2010 on. Now it’s “when the foreclosure moratorium ends” LOL. Banks will modify loans, gov will step in w/ new programs to bail out the ones who can’t afford it. Nothing more than an adjustment will happen, if that. I don’t even think 10% is possible.

As long as rates don’t go up, I think we’re fine. For you keyboard economists, look up the average household equity in 2008 vs 2021.

Typically the people calling for a “crash” are just “hoping” it comes so they can purchase.
Yep. This.
 

boatdoc55

Retired Boat Mechanic
Joined
Jan 28, 2011
Messages
7,110
Reaction score
9,749
If you sold loans or homes would you be telling your customers to wait?
Lol nope. You would preach now is the time to by but buy!

I do not think there will be a crash like 2008.

But I do understand we have been in a market boom for a long time. What goes up must come back down at some point.
There are no large triggers other than what was mentioned above. I feel the forbearance and moratoriums will be part of the snowball.

people of been on shopping sprees for years something has to give.

I spoke to a broker and loan officer recently. The both told me to have money set aside to invest. Opportunity will be coming.
I'm with you on this and I also would like to see home loans go up to 5%-8% because savings will follow it!!!! :)
 

riverroyal

Well-Known Member
Joined
Nov 4, 2007
Messages
10,432
Reaction score
11,106
I’ll wait until next week when financial armageddon hits and take them both for $900k.
Thats fine. That means the house i want in az will drop to 500. All relevant.
Coast north sd typically drops less than other areas. If i drop 20%, others drop 25 plus
 

angiebaby

Love is my religion
Joined
Sep 24, 2007
Messages
2,548
Reaction score
350
There is no problem to exacerbate right now, because jobs are stable
The unemployment rate in October of 2006 was 4.4%
June of 2021 it was 5.9%

Before we sold our house last month, everyone on our street except two had refinanced and pulled cash out. Sounds a bit like 2004-07 to me.
No one knows for certain. We are all going to make decisions based on the best knowledge we have at the time. We chose to cash out and wait. Perhaps we made a mistake. Time will tell. But all I know is I've seen this movie before. It doesn't end well for those with a lot of debt.
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
The unemployment rate in October of 2006 was 4.4%
June of 2021 it was 5.9%

Before we sold our house last month, everyone on our street except two had refinanced and pulled cash out. Sounds a bit like 2004-07 to me.
No one knows for certain. We are all going to make decisions based on the best knowledge we have at the time. We chose to cash out and wait. Perhaps we made a mistake. Time will tell. But all I know is I've seen this movie before. It doesn't end well for those with a lot of debt.
Its nothing like 2007.. those people aren’t pulling out 125% of their homes value, nor are then getting into adjustable rate mortgages. They are pulling equity out at the lowest rate we have ever seen. If you do something smart with that money, the returns would be huge. Or if they were looking at buying a big ticket item it makes more sense to pull the money out at 2% than get a loan for it at 5-6%.
 

Boatymcboatface

Well-Known Member
Joined
Sep 28, 2019
Messages
346
Reaction score
407
I don’t know a whole lot about the housing market but what I do know from talking to my neighbors only one of us could afford our houses at the current pricing in my neighborhood. I talk to pretty much all of the Nieghbor’s on our street we hang out and bbq regularly. A couple families have already cashed out and sold their homes and payed cash out of state for a new home. The ones that stayed all bought years ago and are almost paid off and the rest of us like me bought in the last crash from people just like my new neighbors that panic bought in the last housing frenzy. Soo I’m not saying it’s going to crash but…..
 

hallett21

Well-Known Member
Joined
Nov 9, 2010
Messages
10,573
Reaction score
8,166
Been reading all day no time to comment lol.

If $1k a month is the difference between make it or break it you can’t afford your lifestyle.

@BHC Vic I tip my hat to you for looking after the apprentices and trying to teach them the realities of money. That being said I remember you building chicken coops and sheds for extra money. And that’s only what you posted. I believe you either want better or you don’t. Union or not you put in the work to make it happen.

I’m on my phone so I can’t quote everyone. There’s so much money on the sidelines right now. I know over 20 people with SBA loans in the 6 six figures praying for an economic meltdown. That’s outside of any wealth they may have.

I’m concerned like @LargeOrangeFont said that CA will be the has and the has nots. God forbid people walk away from their payments. Those who have money will buy up the available inventory and force those who sold to rent back from then.

The wedge will get driven further and further between lower and upper class. Assuming we still have a middle class.

Finally if you bought before 2018 a 30% reset puts you back at what you paid (roughly).


Sent from my iPhone using Tapatalk
 
Last edited:

boatdoc55

Retired Boat Mechanic
Joined
Jan 28, 2011
Messages
7,110
Reaction score
9,749
Savings spur capital investment, pruductivity, manufacturing, competitiveness, etc.

BC knows of what he speaks
When home loans were 9%-13% awhile back, ya I know a good while back, I was getting 7% on MY money. Wouldn't that be nice for us old coggers!!! The youngin's didn't even know what money was and some still don't. 🤷‍♂️
 

arch stanton

Well-Known Member
Joined
Jun 30, 2011
Messages
492
Reaction score
1,029
I find all of your view points interesting but I think all of our predictions focus on to narrow a slice of what may be happening and why a few things that have been mentioned and a few that I don't think have been brought up affect housing price and availability

1 I read that about 25% of all home sales are to investors and there are some huge investors like black stone group that are buying thousands of homes and rent them out because the ROI is good now and will be fantastic when or if inflation stays at a high level, if they finance a house at a fixed rate the rent will be able to be increased but the payment will stay the same. A 190 house community was built out and rented by the builder then sold as a package deal to an investment group the builder made 50% more than they normally do doing it that way, this is not good for Joe average that wants to buy a house as this trend is bound to happen more.

2 Negative interest rates are a real thing in other parts of the world you get paid 1/2 % to take out a mortgage what will that do to our housing prices. interest rates have been declining since Jimmy Carter left office, now there have been ups and downs but overall the rate has gone down so if the governments of the world are supporting there housing markets with negative rates it can happen hear. The other side of the negative rates is that if you put money in banks in those countries you lose some % every year maybe 1 or 2 % that is bringing lots of money to America looking for income and safety.

3 home builders are in the market to build and sell homes they do not hold onto lots if they can be sold. In Southern Calif it takes up to 10 years to get permits to build a housing track, when these builders forecast a sales price years ago they did not figure the value would increase at the rate we have seen the last 3 to 4 years they have plenty of profit in the homes they are building now to cover the increase in material costs and if things slow down too much they will be helping buyers qualify for their home by buying down the mortgage rate or other incentives but the main thing they want is the house sales price to not decrease, then factor in the investors that may step in to buy

4 It was said that the housing crash of 08 was not predicted but I remember it being talked about on talk radio for years before the crash. When congress mandated that loans be made to people that would not qualify under the normal requirements of income and down payment and the sub prime lending was mandated it was discussed in great detail and the fact that these sub prime loans were written as adjustable rate mortgages it was all predicted to crash, but in all fairness there is always somebody predicting a crash of something housing,stocks,the world in general but I believed and prepared for that down turn I did not make a fortune I just got my ass Dept free and came out the other side with all my equipment.
this is my take as I remember it these sub prime loans were packaged by Wall Street and sold to investors as derivatives the buyers were pension funds and the other institutional investors once they started having loses because of foreclosure fanny may and Fredy Mac could no longer sell these derivatives and that ended the housing boom, now if the government did what they are doing now keeping rates low and keep lending it probably would not have crashed, a down turn is normal to the ebb and flow of an economy.
 

kurtis500

Well-Known Member
Joined
Jan 8, 2008
Messages
293
Reaction score
441
Ok, but you said no one saw the housing crash coming, which is not true.
Maybe you can show me where then. Certainly there’s some articles in 05-06 by reputable organizations predicting the crash.
 

BHC Vic

cobra performance boats
Joined
May 24, 2014
Messages
23,785
Reaction score
15,503
Been reading all day no time to comment lol.

If $1k a month is the difference between make it or break it you can’t afford your lifestyle.

@BHC Vic I tip my hat to you for looking after the apprentices and trying to teach them the realities of money. That being said I remember you building chicken coops and sheds for extra money. And that’s only what you posted. I believe you either want better or you don’t. Union or not you put in the work to make it happen.

I’m on my phone so I can’t quote everyone. There’s so much money on the sidelines right now. I know over 20 people with SBA loans in the 6 six figures praying for an economic meltdown. That’s outside of any wealth they may have.

I’m concerned like @LargeOrangeFont said that CA will be the has and the has nots. God forbid people walk away from their payments. Those who have money will buy up the available inventory and force those who sold to rent back from then.

The wedge will get driven further and further between lower and upper class. Assuming we still have a middle class.

Finally if you bought before 2018 a 30% reset puts you back at what you paid (roughly).


Sent from my iPhone using Tapatalk
When we hit a recession there won’t be work for my day job or side job. I’ve seen It. I’ve lived it. The reason I work so hard and try to save is to be prepared because I know it’s coming. All the old guys talk about it all the time. In 08 we took a pay cut and lost some benefits. Same happened in I think 94-96 and same in the 80’s. History repeats itself. With as many new contractors as there is today it’s only a matter of time. I’m praying I’m wrong but like I said I’ve already lived it and it would be dumb to make the same mistakes twice because people think it just can’t happen.
 

mash on it

Beyond Hell Crew
Joined
Jan 26, 2011
Messages
2,514
Reaction score
3,215
When congress mandated that loans be made to people that would not qualify under the normal requirements of income and down payment and the sub prime lending was mandated it was discussed in great detail and the fact that these sub prime loans were written as adjustable rate mortgages it was all predicted to crash, but in all fairness there is always somebody predicting a crash of something housing, stocks, the world in general ..... sub prime loans were packaged by Wall Street and sold to investors as derivatives the buyers were pension funds and the other institutional investors once they started having loses because of foreclosure fanny may and Freddy Mac could no longer sell these derivatives and that ended the housing boom, now if the government did what they are doing now keeping rates low and keep lending it probably would not have crashed.
^^^ this x2
And a certain Illinois senator was the deciding vote on said senate committee. '98 or '99? We see how well that worked out.

Dan'l
 

LargeOrangeFont

Moderation Enthusiast
Staff member
Joined
Sep 4, 2015
Messages
31,356
Reaction score
44,588
Maybe you can show me where then. Certainly there’s some articles in 05-06 by reputable organizations predicting the crash.
There were. People all over were talking about it from 06 through 08.
 
Top