Today's housing market in a nutshell...

[GRADS]

 

[Instigator]

Your the only thing in a nutshell but that was pretty funny.

 

[TomD]

That some it up. Crazy out there right now.

 

[BingerFang]

Ahahaha 100%! People are waiving all contingencies on way over full price offers, it’s the Wild West.

 

[Waterjunky]

Can we say 2005 again?

Slightly different mechanics involved but same situation and my guess is the result will be the same.

 

[just_floatin]

When inflation is high it is never good for the economy. The COG on everything are going up. Look at lumber prices. Is there a shortage of trees driving the cost up or greed like the oil companies. Cement. Are we running low on rocks?

This economy priced me out of buying any boat this year. The hyperinflation path we are on has already reduced the value of the dollar although interest rates are still lower than the inflation rate. When interest rates go up and ARM mortgages once again come to fruition, it will get interesting. For today, the buy low sell high investment strategy is far and few between, that is unless you are a day trader.

 

[LargeOrangeFont]

Can we say 2005 again?

Slightly different mechanics involved but same situation and my guess is the result will be the same.

Its not like 2005, this is a different situation. No one is buying houses with 0 down and getting interest only loans. People have been saying it is "2006" since 2014.

 

[motormonkey]

Its not like 2005, this is a different situation. No one is buying houses with 0 down and getting interest only loans. People have been saying it is "2006" since 2014.

I think you are mistaken on this.

 

[LargeOrangeFont]

When inflation is high it is never good for the economy. The COG on everything are going up. Look at lumber prices. Is there a shortage of trees driving the cost up or greed like the oil companies. Cement. Are we running low on rocks?

This economy priced me out of buying any boat this year. The hyperinflation path we are on has already reduced the value of the dollar although interest rates are still lower than the inflation rate. When interest rates go up and ARM mortgages once again come to fruition, it will get interesting. For today, the buy low sell high investment strategy is far and few between, that is unless you are a day trader.

Inflation yes, hyperinflation, no.

Honestly if you want a boat, buy a boat. They are not going to get any cheaper to produce new, which is just going to keep the used boat market high.

 

[LargeOrangeFont]

I think you are mistaken on this.

I'm not. RE prices are high because there is no supply, and we are in the middle of redefining how people work. We have lots of people that lived in shithole cities making good money that now have no reason to live near the shithole city anymore. Their rent or mortgage was high for little real value and even overpaying for an actual house seems like a value for them

No one gives you a loan for over what the house is worth, you have to come up with that money.

And there are the foreign and corporate entities that just sweep in with cash offers.... No one is foreclosing on a paid for house.

They (government) are going to keep the foreclosure moratorium in place for a long time.

 

[motormonkey]

I'm not. RE prices are high because there is no supply, and we are in the middle of redefining how people work. We have lots of people that lived in shithole cities making good money that now have no reason to live near the shithole city anymore. Their rent was high, and even overpaying for a house seems like a value.

No one gives you a loan for over what the house is worth, you have to come up with that money.

And there are the foreign and corporate entities that just sweep in with cash offers.... No one is foreclosing on a paid for house.

They (government) are going to keep the foreclosure moratorium in place for a long time.

Your jumping the gun. LOL.
I commenting that people are using zero down and balloons. It's not what's driving the market.

 

[nameisbond]

Its just as crazy here. Real estate agents are advertising fairly new executive homes with an acre or more of land as tear downs for development potential. An example: For sale: 16505 26 AVENUE, Surrey, British Columbia V3Z9W9 - R2535652 | REALTOR.ca

 

[LargeOrangeFont]

Your jumping the gun. LOL.
I commenting that people are using zero down and balloons. It's not what's driving the market.

People are, sure. It is the average or the standard? not even close.

 

[just_floatin]

Inflation yes, hyperinflation, no.

Honestly if you want a boat, buy a boat. They are not going to get any cheaper to produce new, which is just going to keep the used boat market high.

I stated the hyperinflation path. Not stating we are in a hyperinflation period. That has not occurred in the United States since the Civil War.
Here is a start of commodity prices over last year alone with no end in sight yet.
Lumber: +265%
WTI Crude: +210%
Gasoline: +182%
Brent Crude +163%
Heating Oil: +107%
Corn: +84%
Copper: +83%
Soybeans: +72%
Silver: +65%
Sugar: +59%
Cotton: +54%
Platinum: +52%
Natural Gas: +43%
Palladium: +32%
Wheat: +19%
Coffee: +13%
Gold: +3%

 

[Desert Whaler]

Parents bought their home in 74 for $40K . . . couldn't believe when they hit $300K . . . thought it was completely ridiculous . . . then some original owners sold for $425K and my Dad literally didn't believe it.
Years later there were door-step flyers with prices pushing $700K and he thought they were fake . . . till a family-friend realtor told him it was legit.
An elderly lady's husband passed away at the end of the street and was 'kind', and sold her house to the 'kids' next door who were renting . . $800K.
Now every house listing is between 1.2 and 1.5 million . . . just psycho.
A high school friend stopped by the other day . . . she's a realtor . . . I told her I just couldn't believe it . . . she said, "There was a house in the tract across the street I just sold that was SO DISGUSTING inside I couldn't stay in there or I'd vomit" . . . she had it cleaned / painted and sold it for 1.2 million . . . . people came in and basically leveled it . . . left a couple walls so it could be permitted as a 'remodel'.
This madness can't last. But we've been saying that since 1974 lol.

 

[motormonkey]

As long as interest rates remain low, the market will race to the top. We will know when we've hit the top on the way down. Until then, hold the fuck on.

 

[Christopher Lucero]

 

[Christopher Lucero]

FWIW...the US RE market is not in a vacuum. Global influence counts. Global $$$ counts. BUT the best news is that it is happening...just be aware of the impact of affordability on normal people.

 

[LargeOrangeFont]

I stated the hyperinflation path. Not stating we are in a hyperinflation period. That has not occurred in the United States since the Civil War.
Here is a start of commodity prices over last year alone with no end in sight yet.
Lumber: +265%
WTI Crude: +210%
Gasoline: +182%
Brent Crude +163%
Heating Oil: +107%
Corn: +84%
Copper: +83%
Soybeans: +72%
Silver: +65%
Sugar: +59%
Cotton: +54%
Platinum: +52%
Natural Gas: +43%
Palladium: +32%
Wheat: +19%
Coffee: +13%
Gold: +3%

If the reserve currency of earth hyperinflates... we are going to have much bigger problems than the above. As you noted, everyone is just seeing what the market will bare because of a down 2020.

 

[nameisbond]

Its just as crazy here. Real estate agents are advertising fairly new executive homes with an acre or more of land as tear downs for development potential. An example: For sale: 16505 26 AVENUE, Surrey, British Columbia V3Z9W9 - R2535652 | REALTOR.ca

Oh, developers tear down executive homes on an acre or more for these: 5932 128a Street, Surrey, BC, House For Sale | REW or condos/townhomes.

 

[LargeOrangeFont]

FWIW...the US RE market is not in a vacuum. Global influence counts. Global $$$ counts. BUT the best news is that it is happening...just be aware of the impact of affordability on normal people.

Normal people are going to be renters.

 

[Christopher Lucero]

If the reserve currency of earth hyperinflates... we are going to have much bigger problems than the above. As you noted, everyone is just seeing what the market will bare because of a down 2020.

inflation of commodities cited is artifact of Mar2020 shutdown & collapse of prices. Fed and most analysis expects this next six months to exhibit odd behavior in common measures of year-on-year indices

Consumer Prices in U.S. Advance by Most in Nearly Nine Years

U.S. consumer prices climbed in March by the most in nearly nine years as the end of pandemic lockdowns triggered a rebound in travel and commuting that pushed up the cost of gasoline, car rentals and hotel stays.

www.bloomberg.com

The New Inflation Scare: Is The Economy Really In Danger?

The 10-year Treasury yields are at a post-shutdown high of 1.63%. …These levels remain historically low, and …actual measures of consumer prices are still unremarkable, and well below 2%. But the shift in market psychology has been very swift. Is inflation coming back? a self-fulfilling crisis?

www.forbes.com

 

[Heylam]

Normal people are going to be renters.

If normal people become renters, what do you think will happen to rental property costs? Catch 22, either own or become a victim of landlords.

 

[badluck]

Just my thought, interest rates will go up to slow inflation. When that happens prices of homes drop. When homes are not worth what is owed people will walk. This is all compounded when the economy is in the tank and less jobs are available.

 

[LargeOrangeFont]

If normal people become renters, what do you think will happen to rental property costs? Catch 22, either own or become a victim of landlords.

Why do you think progressive cities are pushing for rent controls and saying there are housing 'shortages"

Everyone has been conditioned to consume everything "as a service", housing is no different. You lease a car, get a new phone every 2 years, pay monthly for streaming, you rent a house and change houses every few years as your needs change. Owning nothing and get the latest and greatest stuff whenever you want to upgrade is how life works.

If people don't see value in purchasing a home, it is on them.

 

[Desert Whaler]

Just my thought, interest rates will go up to slow inflation. When that happens prices of homes drop. When homes are not worth what is owed people will walk. This is all compounded when the economy is in the tank and less jobs are available.

That would be my guess too . . . unfortunately.

 

[LargeOrangeFont]

Just my thought, interest rates will go up to slow inflation. When that happens prices of homes drop. When homes are not worth what is owed people will walk. This is all compounded when the economy is in the tank and less jobs are available.

We are years away from rates going up and RE is still on the upswing of appreciation. Most people have skin in the game in the form of equity or down payment, in conjunction with a low interest payment that is likely lower than or competitive with renting. No one is going to walk away from a house to pay more in rent.

Also if there are foreclosure moratoriums, who is going to walk away? No one.

 

[HotRod82]

I stated the hyperinflation path. Not stating we are in a hyperinflation period. That has not occurred in the United States since the Civil War.
Here is a start of commodity prices over last year alone with no end in sight yet.
Lumber: +265%
WTI Crude: +210%
Gasoline: +182%
Brent Crude +163%
Heating Oil: +107%
Corn: +84%
Copper: +83%
Soybeans: +72%
Silver: +65%
Sugar: +59%
Cotton: +54%
Platinum: +52%
Natural Gas: +43%
Palladium: +32%
Wheat: +19%
Coffee: +13%
Gold: +3%

This list should absolutely terrify everyone but instead people are ignoring it. I fully realize the stock market is now basically "insured" by seemingly unlimited amount of stimulus, but NO AMOUNT of stimulus will be able to keep pace with the prices listed above.

I went to HD yesterday and bought a stick of 1 1/2 copper and a handful of fittings, it was $263 bucks! I don't care how low interest rates are, the price to build or renovate a home is completely unsustainable. We are in for a reckoning, it still may be a few years down the road, but it's coming......

 

[LargeOrangeFont]

This list should absolutely terrify everyone but instead people are ignoring it. I fully realize the stock market is now basically "insured" by seemingly unlimited amount of stimulus, but NO AMOUNT of stimulus will be able to keep pace with the prices listed above.

I went to HD yesterday and bought a stick of 1 1/2 copper and a handful of fittings, it was $263 bucks! I don't care how low interest rates are, the price to build or renovate a home is completely unsustainable. We are in for a reckoning, it still may be a few years down the road, but it's coming......

When people stop consuming the stuff, prices will go back down. There is so much pent up demand from 2020, everyone up and down the stack is trying to capitalize.

 

[outboard_256]

haha. That happened to 2 houses on my block. Raised my house price from the bidding wars.

 

[badgas]

I see debt people

 

[grumpy88]

I see debt people

Lol

 

[BingerFang]

I see debt people

Ahahahahhahaha!!!!

 

[530RL]

I stated the hyperinflation path. Not stating we are in a hyperinflation period. That has not occurred in the United States since the Civil War.
Here is a start of commodity prices over last year alone with no end in sight yet.
Lumber: +265%
WTI Crude: +210%
Gasoline: +182%
Brent Crude +163%
Heating Oil: +107%
Corn: +84%
Copper: +83%
Soybeans: +72%
Silver: +65%
Sugar: +59%
Cotton: +54%
Platinum: +52%
Natural Gas: +43%
Palladium: +32%
Wheat: +19%
Coffee: +13%
Gold: +3%

A part of these increases are a direct result of the government's intentional tax increases, interference and manipulation of markets over the last several years.

Take the tax increases/tariffs off many of these commodities and prices will ameliorate somewhat.

 

[HTTP404]

A part of these increases are a direct result of the government's intentional tax increases, interference and manipulation of markets over the last several years.

Take the tax increases/tariffs off many of these commodities and prices will ameliorate somewhat.

I'll translate.

It's Trump's fault.

 

[pronstar]

A part of these increases are a direct result of the government's intentional tax increases, interference and manipulation of markets over the last several years.

Take the tax increases/tariffs off many of these commodities and prices will ameliorate somewhat.

Still poking the Orange Man fans I see. Honestly it’s long since tiresome.

“Somewhat” = the loosest correlation you can come up with

You know this is bullshit.

The real estate market in nearly every western country is on fire.

Capital is flowing into real estate globally.


Work from home globally, the rise in global citizenship, and low (US) and/or ultra-low/negative (Asia, Europe) interest rates means people needs a place to park money while effectively shorting currency globally due to printing (which every central bank is doing).


For everyone else, the financials or just Google it. The real answers are out there, and they have little to do with Trump.


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[530RL]

Still poking the Orange Man fans I see. Honestly it’s long since tiresome.

“Somewhat” = the loosest correlation you can come up with

You know this is bullshit.

The real estate market in nearly every western country is on fire.

Capital is flowing into real estate globally.


Work from home globally, the rise in global citizenship, and low (US) and/or ultra-low/negative (Asia, Europe) interest rates means people needs a place to park money while effectively shorting currency globally due to printing (which every central bank is doing).


For everyone else, the financials or just Google it. The real answers are out there, and they have little to do with Trump.


Sent from my iPhone using Tapatalk Pro

I agree it has nothing to do with Trump. Tariffs remain in place.

It has to do with higher costs on construction inputs such as taxes/tariffs as well as many others factors.

Your argument that it is "bullshit" to believe higher taxes/tariffs on input costs is correlated to increases in that product is silly. If you put a tax/tariff increase on wood for example, the cost of wood will go up. Pretty simple concept.

That isn't "bullshit" despite your views to the contrary.

 

[pronstar]

I agree it has nothing to do with Trump. Tariffs remain in place.

It has to do with higher costs on construction inputs such as taxes/tariffs as well as many others factors.

Your argument that it is "bullshit" to believe higher taxes/tariffs on input costs is correlated to increases in that product is silly. If you put a tax/tariff increase on wood for example, the cost of wood will go up. Pretty simple concept.

That isn't "bullshit" despite your views to the contrary. [emoji2369][emoji2369][emoji2369]

So Tump tariffs are responsible for the skyrocketing real estate prices in Europe and Asia?

Real rate globally has been increasing in lockstep with the US despite your reasoning which is basically poking the bears on this site.

It’s way bigger than Trump and his moronic policies.

Puff puff pass...


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[badluck]

We are years away from rates going up and RE is still on the upswing of appreciation. Most people have skin in the game in the form of equity or down payment, in conjunction with a low interest payment that is likely lower than or competitive with renting. No one is going to walk away from a house to pay more in rent.

Also if there are foreclosure moratoriums, who is going to walk away? No one.

2005 was similar as in houses dropped in value and people walked or were foreclosed. Back then people bought with 0 down or borrowed against the equity. This is similar but different. It won’t happen overnight but my guess is something has to give. Houses did not appreciate nearly as fast back in the 80s when interest rates were in the teens. They will always go up but like 2005 there are hiccups along the way.

 

[JDKRXW]

Its not like 2005, this is a different situation. No one is buying houses with 0 down and getting interest only loans. People have been saying it is "2006" since 2014.

You're right, it's not like 2005......it's just like 1978-1980, which was when inflation was gaining serious traction and about a year before interest rates went straight through the roof.

 

[nowski]

Just my thought, interest rates will go up to slow inflation. When that happens prices of homes drop. When homes are not worth what is owed people will walk. This is all compounded when the economy is in the tank and less jobs are available.

Will history repeat itself? Only time will tell.

And if home prices drop maybe we'll see used boat prices drop as well. Just a thought to cheer up the boat-less on this site...

 

[just_floatin]

A key indictor to keep an eye on no matter what box you checked on the ballot.

 

[LargeOrangeFont]

You're right, it's not like 2005......it's just like 1978-1980, which was when inflation was gaining serious traction and about a year before interest rates went straight through the roof.

I’d submit this situation we are in today is “just like” nothing we have see in our lifetimes.

 

[Desert Whaler]

I'm sure most of you know this . . . but I had no idea . . . my Ex was in commercial real estate, we were in LA one day . . . I was commenting on how much of a ghost-town a certain area was . . . she said, "All these giant bulidings right along this street are owned my chinese, and they are empty, no tenants, nothing.
I had no clue.
My HS buddy lives in Irvine . . . hates his new home, I asked why? . . . he said most every house in his tract (which is very new) was purchased by chinese and they are all vacant, no one lives in them . . . said it's depressing for his young boys. They have no one to play with, and all the houses are empty. Even his wife hates it. But those places sold for BANK . . . . weird times we're living in.

 

[LargeOrangeFont]

I'm sure most of you know this . . . but I had no idea . . . my Ex was in commercial real estate, we were in LA one day . . . I was commenting on how much of a ghost-town a certain area was . . . she said, "All these giant bulidings right along this street are owned my chinese, and they are empty, no tenants, nothing.
I had no clue.
My HS buddy lives in Irvine . . . hates his new home, I asked why? . . . he said most every house in his tract (which is very new) was purchased by chinese and they are all vacant, no one lives in them . . . said it's depressing for his young boys. They have no one to play with, and all the houses are empty. Even his wife hates it. But those places sold for BANK . . . . weird times we're living in.

Yep. Chinese nationals are just using Irvine RE as a bank to get money out of China. But that has been happening for 20 years.

 

[HotRod82]

When people stop consuming the stuff, prices will go back down. There is so much pent up demand from 2020, everyone up and down the stack is trying to capitalize.

You have to ask yourself "If the economy is so strong, looking at wall street, housing prices, consumer goods, etc. then WHY is the government pumping TRILLIONS into said economy"?

 

[LargeOrangeFont]

You have to ask yourself "If the economy is so strong, looking at wall street, housing prices, consumer goods, etc. then WHY is the government pumping TRILLIONS into said economy"?

The definition of a strong economy is changing, that is the new standard. Everyone is pumping trillions into their economies. If we weren't pumping in trillions we would not be the strongest economy on earth.

 

[hipcash]

Same thing happened with us in Eastvale. We lived in the house for almost 5 years. Chinese owners never lived there


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[RaceTec]

Yep. Chinese nationals are just using Irvine RE as a bank to get money out of China. But that has been happening for 20 years.

Maybe we should make it just as hard for foreign actors to buy in our country as it is in Mexico?

 

[pronstar]

We were talking with a European hedge fund manager.

Long story short, they’d be thrilled to get a 6% rate of return on investment residential real estate.

We could almost just throw darts at MLS listings and deliver that LOL



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