2023 recession?

[boatdoc55]

There aren't going to be any cheap foreclosure properties this time around because people have equity and will sell if they get in a bind. Not sure how many times I have to say it, but this market is not 2008 and you will not see properties going for pennies on the dollar at the courthouse steps. The dynamics are completely opposite.

HO HUM, HO HUM, same old song and dance!!!!

 

[Havasu blue label]

You should be fine then . Sell a home get paid do a loan get paid then taxes then the irs you made this amount last year what happened this year then they do a audit

 

[Cdog]

Isn't a big thing too that most everyone has a fixed interest rate now as before in 2008 when most had an ARM the interest rate would change causing the monthly payment to become unaffordable even though the person was still making the same amount each month? Then it became cheaper to rent a place like theirs instead of making a mortgage payment?
Dont think a lot of people will walk away from a low fixed interest rate and a place that the mortgage is cheaper than rent. Even if the economy slows down.

Example:

Had a great job 2015 bought a new house in 2017. Possibly on an arm. Housing market is doing well. 2018-19 comes and rates go up as feds attempt their first sell off.

Covid happens & the family is making 80% of the pay the qualified for. One of them got laid off or she’s staying at home with a new baby.

He finally got laid off but got a new job although in a different industry making the kind of money he qualified for when they bought the house.

They need to refi but the rates are now much higher.

There are 10’s of thousands of these.

 

[BHC Vic]

Here is what caused the last bubble and subsequent crash -

• 100% Financing (no equity to start)
• Interest Only and NEGATIVE AMORTIZATION Payments
• ARM’s (high margins and 2 years fixed) ****Payments skyrocketed at the end of the 2 year term****
• Very few cash transactions
• Appraisers were loosely regulated and pressured by commissioned parties for valuations
• Unqualified / Unstable Buyers (Stated Income)
• No Credit, No problem! (SUB PRIME LOANS)
• Double escrows (buying and selling the same property on the same day)
• Job growth in cyclical industries like; Real Estate, Construction and Tourism

Here is what dominates our current market -

• Down Payments (built in equity / skin in the game)
• Principal & Interest Payments
• Fixed Rates at historic lows
• More cash transactions
• Appraisers more regulated (HOEPA) and answer to underwriters on valuations, separated from commissioned parties
• More stable buyers
• Intent to occupy with renter or owner
• Mandatory wait time between purchase and sale
• Job growth in health, financial and tech industries (more diversified)

Now take the current market dynamics and then add appreciation to that. Homeowners are sitting on a ton of equity so there won't be any foreclosures, regardless of what the resident financial advisors in here tell you.

I’m not a doomer. Only thing I’ll add though which makes me wonder is a lot of people I know already pulled the equity out. That kind of scares me. A lot that did that bought rental properties and some others bought toys or re did their back yards.

Edit: and I’m not hating, I wanted to do it myself. Wife told me to fuck right off with that shit

 

[OldSchoolBoats]

Example:

Had a great job 2015 bought a new house in 2017. Possibly on an arm. Housing market is doing well. 2018-19 comes and rates go up as feds attempt their first sell off.

Covid happens & the family is making 80% of the pay the qualified for. One of them got laid off or she’s staying at home with a new baby.

He finally got laid off but got a new job although in a different industry making the kind of money he qualified for when they bought the house.

They need to refi but the rates are now much higher.

There are 10’s of thousands of these.

ARM's are so few and far between now. On top of that if they purchased with an ARM, these ARM products they have now are PRIME products and don't have 10% Margins like in 2008. They also have caps in place for adjustment. If someone buys using a 5/1 ARM today, they have to qualify at 2% over the note rate.

 

[OldSchoolBoats]

I’m not a doomer. Only thing I’ll add though which makes me wonder is a lot of people I know already pulled the equity out. That kind of scares me. A lot that did that bought rental properties and some others bought toys or re did their back yards.

Well they had to qualify to pull that equity out and at the minimum they have 20% of their home equity remaining. 2008, you could do 100% cash out on a stated income loan. Totally different now versus then. Don't worry about other people, just worry about what you can control and that is YOU.

 

[BHC Vic]

Well they had to qualify to pull that equity out and at the minimum they have 20% of their home equity remaining. 2008, you could do 100% cash out on a stated income loan. Totally different now versus then. Don't worry about other people, just worry about what you can control and that is YOU.

Good to know. Honestly as a mentor to these kids and young adults I feel it’s my job to share as much information with them as possible. I don’t tell anybody what to do, I just try to give information. I love tour what will it take Wednesdays. I’ve showed them in class before just so these kids can get a real idea of what it honestly takes.

 

[Cdog]

ARM's are so few and far between now. On top of that if they purchased with an ARM, these ARM products they have now are PRIME products and don't have 10% Margins like in 2008. They also have caps in place for adjustment. If someone buys using a 5/1 ARM today, they have to qualify at 2% over the note rate.

I get it. Doesn't make up for the loss of the second income nor the tighter credit standards for the guy in a new industry making the same money as he was before. This shit happens.

We all see things through our own eyes and experiences. I guarantee this is somebody's reality right now.

 

[OldSchoolBoats]

Good to know. Honestly as a mentor to these kids and young adults I feel it’s my job to share as much information with them as possible. I don’t tell anybody what to do, I just try to give information. I love tour what will it take Wednesdays. I’ve showed them in class before just so these kids can get a real idea of what it honestly takes.

Thanks brother! I got a new one coming out next week that will be solid. I missed this week because of other deal we were working on.

 

[Go-Fly]

Joe has a plan I'm told. This is the 3rd time I've seen this movie. It starts the same and ends the same. People make arguments on both sides that have facts and opinions that hold ground. Recessions are about inflation, politics and people spending more money then they can pay back. The trigger is the middle class making bad choices of how to spend their money on a daily basis. You're seeing it on this forum every day. There is good money to be made in a recession however. Smart money is not how much you can make. It's how much you can keep long term.

 

[OldSchoolBoats]

I get it. Doesn't make up for the loss of the second income nor the tighter credit standards for the guy in a new industry making the same money as he was before. This shit happens.

We all see things through our own eyes and experiences. I guarantee this is somebody's reality right now.

Don't get me wrong I 100% agree with you that these situations are all around us and it is someone's reality, however they aren't walking away and servicers are working with people to keep them in their homes.

 

[Cdog]

Don't get me wrong I 100% agree with you that these situations are all around us and it is someone's reality, however they aren't walking away and servicers are working with people to keep them in their homes.

That's the wild card right there. Looking at organizations like Black rock you have to wonder if people will only be allowed to fail if there's somebody connected there to profit from it.

I hate to sound too conspiratorial but after the last go around and hearing testimony about alien Robo signers pulling half a million out of "professional financial planners" home while they cry to a judge with a $2500 purse, what can I say I'm jaded. LOL!

I think we're in for a shit storm. But we wont know how it's Turing out till we get there. Could be worse, could be back to 2019 pricing. Which I would be ecstatic to see. We have retards running the country and we no real history of a gentle landings..

 

[MSum661]

Example:

Had a great job 2015 bought a new house in 2017. Possibly on an arm. Housing market is doing well. 2018-19 comes and rates go up as feds attempt their first sell off.

Covid happens & the family is making 80% of the pay the qualified for. One of them got laid off or she’s staying at home with a new baby.

He finally got laid off but got a new job although in a different industry making the kind of money he qualified for when they bought the house.

They need to refi but the rates are now much higher.

There are 10’s of thousands of these.

Good point.

** Using California as a simple barometer since they currently have the highest borrower mortgage debt in any other State.

In 2006 before all Hell broke loose, the home affordability rate in California dropped to a record low of 19%.
Right now the affordability rate in California is around 23%, getting fairly close to that 2006 number, so although sub-prime bank loans we're being whored out to the crowd in masse at the time, the same effect could likely be in play in an entirely different way since it's now the Fed who has recently whored out never seen before ultra-low interest rates that allowed borrowers to enter into record high mortgage debt in trade for a low payment. It's not the payment amount at ultra-low interest rates that are the problem, it's the black hole of debt that a borrower is currently anchored over. So I think you're exactly right, there are probably tens of thousands of mortgages currently out there that came through with scenarios like 30 due in 5 that may not ever be rescued from their debt obligations to their lenders as the Fed continues to aggresively unwind their balance sheet causing mortgage rates to go higher and leaving borrowers in stuck in a position they can't re-fi their way out to survive another day. Unless...of course, they start whoring out 40-50 yr. no-qual, no income verification, stated income with no 2 year tax return loans again....lol.

 

[Cdog]

Good point.

** Using California as a simple barometer since they currently have the highest borrower mortgage debt in any other State.

In 2006 before all Hell broke loose, the home affordability rate in California dropped to a record low of 19%.
Right now the affordability rate in California is around 23%, getting fairly close to that 2006 number, so although sub-prime bank loans we're being whored out to the crowd in masse at the time, the same effect could likely be in play in an entirely different way since it's now the Fed who has recently whored out never seen before ultra-low interest rates that allowed borrowers to enter into record high mortgage debt in trade for a low payment. It's not the payment amount at ultra-low interest rates that are the problem, it's the black hole of debt that a borrower is currently anchored over. So I think you're exactly right, there are probably tens of thousands of mortgages currently out there that came through with scenarios like 30 due in 5 that may not ever be rescued from their debt obligations to their lenders as the Fed continues to aggresively unwind their balance sheet causing mortgage rates to go higher and leaving borrowers in stuck in a position they can't re-fi their way out to live survive another day. Unless...of course, they start whoring out 40-50 yr. no-qual, no income verification, stated income with no 2 year tax return loans again....lol.

Those stated deals have been here for a while, the rates suck. I posted an example of the option arm 40 yr yesterday from mbanc.

The affordability # will probably peak in the next 60-90 days as rates rise & sellers refuse to deal with reality that they’re over priced and missed the boat to cashville.

A Mexican stand off if you will.

This is just one scenario that I see could play out.

 

[MSum661]

Those stated deals have been here for a while, the rates suck. I posted an example of the option arm 40 yr yesterday from mbanc.

The affordability # will probably peak in the next 60-90 days as rates rise & sellers refuse to deal with reality that they’re over priced and missed the boat to cashville.

A Mexican stand off if you will.

This is just one scenario that I see could play out.

I can easily see that happening

 

[CLdrinker]

I don’t know shit. But I know all good things come to an end.
If we only knew when that was, we would all be rich and pay cash for everything... oh wait...

 

[LargeOrangeFont]

Remember there primary home take money out buy a Vaction home and a boat bill is due

At this point they have equity in all 3.

Foreclosures with equity don’t happen. It’s called a sale.

 

[Havasu blue label]

Who is going to buy if they don’t qualify

 

[LargeOrangeFont]

Who is going to buy if they don’t qualify

Who is going to forfeit something they have equity in... why don’t we start there?

 

[Havasu blue label]

Let’s put it simple I sold a house in Havasu in 2020 they didn’t qualify then added another family member to get the deal done. Yes the house on paper is worth 300 hundred grand more but it’s on paper not in the bank . Realty son

 

[FROGMAN524]

There aren't going to be any cheap foreclosure properties this time around because people have equity and will sell if they get in a bind. Not sure how many times I have to say it, but this market is not 2008 and you will not see properties going for pennies on the dollar at the courthouse steps. The dynamics are completely opposite.

What you're not talking about is all the toys that got sold in the last two years during COVID were bought with HELOCs and 2nd mortgages that ate up all the equity they had. Maybe not everyone is in this situation but I am quite sure there are more than a few who are.

Additionally. I believe places like Phoenix, Las Vegas and Dallas and a few others that have so many ballers who are in construction and sales will get hurt when the economy takes a turn. When construction comes to a halt or slows down significantly a lot of mortgage paying income will disappear. Not everyone is a computer programmer and I know a number of sales people in the auto industry who are really hurting since this chip shortage cut their monthly sales from 30 cars to 3.

Obviously I hope nothing happens but I won't be surprised when it does. Consumer debt is at an all time high.

U.S. household debt increased by $1 trillion in 2021, the most since 2007

U.S. consumer debt loads grew in 2021 by the largest amount in 14 years as people ramped up borrowing to afford homes, cars and other goods that are becoming more expensive, according to a report released on Tuesday by the New York Federal Reserve.

www.reuters.com

 

[LargeOrangeFont]

That's the wild card right there. Looking at organizations like Black rock you have to wonder if people will only be allowed to fail if there's somebody connected there to profit from it.

I hate to sound too conspiratorial but after the last go around and hearing testimony about alien Robo signers pulling half a million out of "professional financial planners" home while they cry to a judge with a $2500 purse, what can I say I'm jaded. LOL!

I think we're in for a shit storm. But we wont know how it's Turing out till we get there. Could be worse, could be back to 2019 pricing. Which I would be ecstatic to see. We have retards running the country and we no real history of a gentle landings..

Here’s my question.. how many people are sitting around waiting for 2019 pricing again? My guess is a ton. I am one at this point. Buyers from 2020-2021 aren’t gonna make many moves, as they paid more but have ultra low rates.

We aren’t even talking about the 2010-2018 buyers that Have big equity and low rates

 

[OldSchoolBoats]

What you're not talking about is all the toys that got sold in the last two years during COVID were bought with HELOCs and 2nd mortgages that ate up all the equity they had. Maybe not everyone is in this situation but I am quite sure there are more than a few who are.

Why does everyone have to assume that people bought their stuff with home equity? Also, you can't "eat up all the equity you have" because cash out loans only go to 80% LTV max or 89.9% with a 1st / 2nd combo which you have to be super qualified for.

 

[LargeOrangeFont]

Let’s put it simple I sold a house in Havasu in 2020 they didn’t qualify then added another family member to get the deal done. Yes the house on paper is worth 300 hundred grand more but it’s on paper not in the bank . Realty son

So yore saying they qualified to buy the house and you got paid.

Simple terms - that was the point.

 

[LargeOrangeFont]

Why does everyone have to assume that people bought their stuff with home equity? Also, you can't "eat up all the equity you have" because cash out loans only go to 80% LTV max or 89.9% with a 1st / 2nd combo which you have to be super qualified for.

Because it’s how they make themselves feel better. Not everyone is “highly leveraged” and at the brink of financial disaster. Not everyone pays cash for everything. The single lens view of “everyone” is the flaw in these weekly debates where we all say the same thing every time.

Yes things are gonna get bumpy. Some people are more prepared than others. None of us knows what is gonna happen. We will find out in 18 months.

 

[FROGMAN524]

Here’s my question.. how many people are sitting around waiting for 2019 pricing again? My guess is a ton. I am one at this point. Buyers from 2020-2021 aren’t gonna make many moves, as they paid more but have ultra low rates.

We aren’t even talking about the 2010-2018 buyers that Have big equity and low rates

I bought a home in 2018 and signed a contract for a build on the new one this spring. I have ultra low rates on both, and both are 30 year fixed with no points, PMI or any other negatives. I am happy to be setup before the crash if there is one.

 

[FROGMAN524]

Because it’s how they make themselves feel better. Not everyone is “highly leveraged” and at the brink of financial disaster. Not everyone pays cash for everything. The single lens view of “everyone” is the flaw in these weekly debates where we all say the same thing every time.

Yes things are gonna get bumpy. Some people are more prepared than others. None of us knows what is gonna happen. We will find out in 18 months.

Not everyone paid cash for their new $100,000-500,000 boats or RVs, and if they did, I bet in most cases it was cash from their equity loan. If they didn't pay cash, they have a mid 4 figure payment in most cases. Just my guess.

 

[LargeOrangeFont]

I bought a home in 2018 and signed a contract for a build on the new one this spring. I have ultra low rates on both, and both are 30 year fixed with no points, PMI or any other negatives. I am happy to be setup before the crash if there is one.

Good deal!

 

[LargeOrangeFont]

Not everyone paid cash for their new $100,000-500,000 boats or RVs, and if they did, I bet in most cases it was cash from their equity loan. If they didn't pay cash, they have a mid 4 figure payment in most cases. Just my guess.

There are always smart and dumb people. If given a choice of what to forfeit in that situation... the last thing would be the real estate, because it’s likely they have the most equity in it, and it’s the only asset in that list that will appreciate over the medium to long term. I haven’t even mentioned they need somewhere to live

We are one EO or piece of legislation away from another forcloseure moratorium, that alone will keep housing prices high.

 

[Your ad here]

Not everyone paid cash for their new $100,000-500,000 boats or RVs, and if they did, I bet in most cases it was cash from their equity loan. If they didn't pay cash, they have a mid 4 figure payment in most cases. Just my guess.

Wouldn't a mid 4 figure payment be a 30 year loan in the range of 1,000,000? If 500,000 was pulled out that would be 80% of 625,000. A payment around $3125.

 

[FROGMAN524]

Wouldn't a mid 4 figure payment be a 30 year loan in the range of 1,000,000? If 500,000 was pulled out that would be 80% of 625,000. A payment around $3125.

I’m talking 20 year boat loan on $300,000 toon at 5% is ~$2,000 a month plus storage, insurance, fuel and maintenance.

 

[Your ad here]

I’m talking 20 year boat loan on $300,000 toon at 5% is ~$2,000 a month plus storage, insurance, fuel and maintenance.

I misread the last part in your post I quoted. I saw it but read it as they paid cash for the toy with home equity.

 

[angiebaby]

Why does everyone have to assume that people bought their stuff with home equity? Also, you can't "eat up all the equity you have" because cash out loans only go to 80% LTV max or 89.9% with a 1st / 2nd combo which you have to be super qualified for.

Because several of our neighbors did? Anecdotal evidence is still evidence, despite what Dr. Falsi says.

 

[Done-it-again]

I'm sure arms will come back in play when 6+% interest rates come back.. Anything to get people in to homes....

ARM's are so few and far between now. On top of that if they purchased with an ARM, these ARM products they have now are PRIME products and don't have 10% Margins like in 2008. They also have caps in place for adjustment. If someone buys using a 5/1 ARM today, they have to qualify at 2% over the note rate.

 

[Havasu blue label]

Ok everyone has money no cash outs where done I will leave it at that

 

[Cdog]

Here’s my question.. how many people are sitting around waiting for 2019 pricing again? My guess is a ton. I am one at this point. Buyers from 2020-2021 aren’t gonna make many moves, as they paid more but have ultra low rates.

We aren’t even talking about the 2010-2018 buyers that Have big equity and low rates

I think anyone like myself with two homes at 2.75% 30 fixed rates are sitting tight for a while .

 

[hallett21]

Can we at least bet on the “impending” crash?

 

[Orange Juice]

Example:

Had a great job 2015 bought a new house in 2017. Possibly on an arm. Housing market is doing well. 2018-19 comes and rates go up as feds attempt their first sell off.

Covid happens & the family is making 80% of the pay the qualified for. One of them got laid off or she’s staying at home with a new baby.

He finally got laid off but got a new job although in a different industry making the kind of money he qualified for when they bought the house.

They need to refi but the rates are now much higher.

There are 10’s of thousands of these.

Timing the market is never perfect.

 

[LargeOrangeFont]

I think anyone like myself with two homes at 2.75% 30 fixed rates are sitting tight for a while .

Agreed. Not many are going to walk away from that in the face of uncertainty.

 

[Cdog]

Agreed. Not many are going to walk away from that in the face of uncertainty.

Furthermore, imagine what it would take for me to move up. Would have to take a life altering situation & or 2015 pricing.

I’m here till the next boom. My 12 year old should be finished with asu by then. In the lulls of the next downturn I’m planning to buy land in strategic places to build before building prices go mental again.

 

[CLdrinker]

Is it to much to wish some dumb shits loose their home so I can buy it in the cheap and help out my retirement picture.

I’m not a doom and gloomer, I’m just wanting some opportunity.

 

[LargeOrangeFont]

Is it to much to wish some dumb shits loose their home so I can buy it in the cheap and help out my retirement picture.

I’m not a doom and gloomer, I’m just wanting some opportunity.

Skip the trailer, toyhauler and truck then and paint your retirement picture.

 

[Runs2rch]

Skip the trailer, toyhauler and truck then and paint your retirement picture.

Easy to tent camp.

 

[evantwheeler]

Skip the trailer, toyhauler and truck then and paint your retirement picture.

That's not the California Way.

 

[Havasu blue label]

Move out of California like mr orange take money and payoff debt

 

[LargeOrangeFont]

Move out of California like mr orange take money and payoff debt

What debt? No one here has any.

 

[CLdrinker]

Easy to tent camp.

The enclosed is my tent Haha

 

[CLdrinker]

Skip the trailer, toyhauler and truck then and paint your retirement picture.

4% annual return I live nice, long as I don’t live pass 93 lol
6% annual return my kids get a nice inheritance
Everything else is gravy.
Not really sweating a thing.

 

[BingerFang]

Bank of America analyst warns clients of coming 'recession shock'

Michael Hartnett, chief investment strategist for Bank of America, warned clients on Friday of a looming 'recession shock' in the US economy as the Fed tries to tame rampant inflation.

www.dailymail.co.uk

 

[LargeOrangeFont]

Bank of America analyst warns clients of coming 'recession shock'

Michael Hartnett, chief investment strategist for Bank of America, warned clients on Friday of a looming 'recession shock' in the US economy as the Fed tries to tame rampant inflation.

www.dailymail.co.uk

If the unemployment rate gets to 5.1 as predicted there, that will be a recession, but not a financial apocalypse.

It seems that we all agree there will be a recession of some kind in the next 9-18 months.