Are the good times here for much longer? The stars are aligning

[Bigbore500r]

I posted this in another thread, but I think it deserves it's own spot. The starts seem to be aligning to signify we are enjoying the shit out the peak of an economic / housing market cycle.

Everyone is snatching up top dollar toys like they are going out of style. $55,000 1/2 ton pickup trucks are flying off the lots, hell Ford just came out with a $100,000 Super Duty! The line is out the door for $200,000 fun decks. My little shack of a 1480sqft LA suburb home is pushing $600,000k - right back to where it was before the bubble popped.


Are we at the peak? People suggest real estate follows a 10 year cycle - That would put us at 2007 - 2017

Hang on to you ASSets......it's coming ! ! ! ! ! :eek
Los Angeles housing market - My house in particular



Then look at this....consumer debt (credit cards)



HO - LEE - FUK

Everyone is charging it up, im over here paying everything down.

What does everyone think? What are you doing?

 

[LargeOrangeFont]

I'm debt free besides mortgages with a bunch of cash and ready to go. Bring it.

Anyway, I have said this a bunch of times. Nothing is going to happen until people start loosing jobs. When the economy starts shedding jobs month after month, problems will follow. The last dip started in 2006, and took around 18 months. It is going to take huge job losses for people to be forced to walk away from homes this time.

That said I don't know why everyone is so fixated on the bubble home prices from 2005-06. They literally don't mean anything today. There was no ceiling in there that says we wont surge past those prices.. in some places we already have. My house is worth almost $50K more than the peak in 06.

 

[Bigbore500r]

I'm debt free besides mortgages and ready to go. Bring it.

Anyway. I have said this a bunch of times. Nothing is going to happen until people start loosing jobs. When the economy starts shedding jobs month after month, it is only a matter of time. The last dip started in 2006, and took around 18 months.

The age old question - Let it ride?

 

[pronstar]

Everything is cyclical. You'd think more folks would realize this.

I'm minimizing debt, and looking for buying opportunities in real estate.

When there's a downturn, I want to be ready with cash in hand when shit goes on sale [emoji4]

 

[riverroyal]

there is still a housing shortage regardless of price. Dont be scared.

 

[RodnJen]

Right now there is nothing "internally" to implode, ie subprime mortgages. Outside of an unprecedented national defense issue, there isn't much happening that will shock the economy in the near term. Bond yields are rising on the release of yesterday's tax plan but even that will take time.

I do agree with the cyclical nature of RE, but remember, this has been a long slow climb. The slower the climb, the longer the duration.

 

[River Lynchmob]

We moved from Seal to Canyon Lake to a bigger house on more land for a lot less $$. The only thing I owe anything on is my rental property and right now I am making 2 to 3 x on that payment.

 

[westair]

Do the adjustable rate loans still exist? wasn't that a big factor last time

 

[fishing fool]

Of course it will happen again as long as there is a bail out or a bankruptcy only last a few years.
It's nothing like it used to be where you work hard for your things. Now you just borrow against something you are paying for and buy more. Get in trouble then blame the bank for allowing you to do it.

 

[Bigbore500r]

there is still a housing shortage regardless of price. Dont be scared.

I don't think it will drop like last time, but i think it will drop at least 15-20 percent when it does. The housing shortage will help prop it up i think

Housing shortage = crazy home prices

Builders are building homes and apartments to satisfy demand, charging crazy home prices to buyers cause they can. On the back end - Racking up credit to do so (some of them)

Banks are easing requirements so "average joe" can get into crazy home mortgages. Not like the golden days...but they have to continue to loosen them up to make home loans obtainable.

Then....*Pop* - SOMETHING happens

 

[LargeOrangeFont]

The age old question - Let it ride?

I'm not relocating to AZ, so yes. My house is rent/cost control for me, not a nest egg.

At this point I'm just looking to pick up another rental property or two.

 

[Classic Daycruiser]

Everything is cyclical. You'd think more folks would realize this.

I'm minimizing debt, and looking for buying opportunities in real estate.

When there's a downturn, I want to be ready with cash in hand when shit goes on sale [emoji4]

There are a lot of great deals in Florida and Texas right now.

 

[LargeOrangeFont]

I don't think it will drop like last time, but i think it will drop at least 15-20 percent when it does. The housing shortage will help prop it up i think

Housing shortage = crazy home prices

Builders are building homes and apartments to satisfy demand, charging crazy home prices to buyers cause they can. On the back end - Racking up credit to do so (some of them)

Banks are easing requirements so "average joe" can get into crazy home mortgages. Not like the golden days...but they have to continue to loosen them up to make home loans obtainable.

Then....*Pop* - SOMETHING happens

People are far more qualified for loans now than they were before. Again, everything is fine until people lose their jobs. Some people say the sub prime used car loans are going to wreck the economy. I just think it will wreck the used car market and maybe cause an economic slowdown. Those people rent their homes anyway. I think a 10-20% drop is coming when the cycle does turn.. we may be 10% higher before it turns though.

 

[Ziggy]

People having real jobs makes a difference. People spending fun money keeps it rolling.
When you notice people rolling up sleeves enabling them to barely put groceries on the table, then get concerned.

 

[Boat 405]

Right now there is nothing "internally" to implode, ie subprime mortgages. Outside of an unprecedented national defense issue, there isn't much happening that will shock the economy in the near term. Bond yields are rising on the release of yesterday's tax plan but even that will take time.

I do agree with the cyclical nature of RE, but remember, this has been a long slow climb. The slower the climb, the longer the duration.

Think again, the subprime loan market on cars is taking a digger.

 

[Dirtbag]

with upcoming tax breaks especially for businesses i dont think we are in the midst of any bubble. In fact i think we are coming up on a huge boom. If govt passes the tax bill and companies with huge offshore assets bring that money home you will see massive infrastructure booms companies will build new headquarters and all the jobs that go with it should just go nuts....thats the plan anyway....could be some good times ahead for the good ole US of A!

 

[LargeOrangeFont]

Think again, the subprime loan market on cars is taking a digger.

Are there derivatives being sold off of these? The subprime car loan market is sizable, but not the overwhelming majority of auto loans/leases.

Subprime borrowers are now renters, so they will not tank the housing market. They will tank the used and new car market to some degree.

 

[Boat 405]

Are there derivatives being sold off of these? The subprime car loan market is sizable, but not the overwhelming majority of auto loans/leases.

Subprime borrowers are now renters, so they will not tank the housing market. They will tank the used car market.

I don't think that the car market will cause the tumble but it is definitely building and will tank the used car market. There will be some type of catalyst that no one saw coming that will cause the next tumble. The key is what that is. Who knows

 

[J DUNN]

Debt free except I've got a 15yr mortgage on a $1M home in South OC, with 75% LTV. I can't stash much cash this way but I am paying down debt and trying to be in the right spot to buy some 4-plex's by my shop in Fullerton when the market goes down. Until then I'll sit and pay down mortgage.

 

[Bigbore500r]

I don't think that the car market will cause the tumble but it is definitely building and will tank the used car market. There will be some type of catalyst that no one saw coming that will cause the next tumble. The key is what that is. Who knows

When North Korea finally steps over the line with both feet...

 

[nowski]

The age old question - Let it ride?

Two songs come to mind to answer your question. Let the Good Times Roll by The Cars and What Goes Up Must Come Down by Alan Parsons...

 

[2Driver]

I just got a subprime loan. I figure by the time it adjusts in 4 years the house will have doubled

To that end I was already able to get second based on the equity its realized in the first year. So we are shopping for a new deck boat and maybe a tricked out Can Am 4 seat turbo if anything is left over

I figure another 6-8 years of these kind returns and Ill be set.

 

[LargeOrangeFont]

When North Korea finally steps over the line with both feet...

I'm doubting that is going to happen, as it serves no purpose.

 

[Tamalewagon]

Supply and demand. When you start to see the listing inventory increase quite a bit, we're at or over the peak. Residential inventory is still very low currently. http://mymortgagestatus.info/miam/?...C1DA6772BB16EF0BCDD1552C1D8723251122B372523ED

I posted this in another thread, but I think it deserves it's own spot. The starts seem to be aligning to signify we are enjoying the shit out the peak of an economic / housing market cycle.

Everyone is snatching up top dollar toys like they are going out of style. $55,000 1/2 ton pickup trucks are flying off the lots, hell Ford just came out with a $100,000 Super Duty! The line is out the door for $200,000 fun decks. My little shack of a 1480sqft LA suburb home is pushing $600,000k - right back to where it was before the bubble popped.


Are we at the peak? People suggest real estate follows a 10 year cycle - That would put us at 2007 - 2017

Hang on to you ASSets......it's coming ! ! ! ! ! :eek
Los Angeles housing market - My house in particular

View attachment 589481

Then look at this....consumer debt (credit cards)

View attachment 589480

HO - LEE - FUK

Everyone is charging it up, im over here paying everything down.

What does everyone think? What are you doing?

 

[pronstar]

I just got a subprime loan. I figure by the time it adjusts in 4 years the house will have doubled

Not taking a dig at you, but that's part of what sustained the last crash.
If housing prices drop and there's negative equity, it can be a tough hole to dig out of.

 

[NicPaus]

I keep hearing people say houses will keep going up. Same thing I heard before last crash. Every house I drove by earlier was in Escrow over a million in Torrance they are selling fast. One of them will be listed next week for $1.2. The one I am at now when finished would sell for $1.6. They are building a spec on this block they plan to list for $3M. That said market is still not as hot as last boom. Realtor had open house around the block last weekend, great turn out but not 30 people like boom.

I have been working 7 days a week as many hours as i can handle. No stopping until the work does is my mentality. I finally feel like I am back on my feet after last crash. Trying to be debt free before it happens again and hopefully it does not but this time I will be prepared.

 

[Bigbore500r]

Not taking a dig at you, but that's part of what sustained the last crash.
If housing prices drop and there's negative equity, it can be a tough hole to dig out of.

 

[Deja_Vu]

We decided to pull out of the CA housing market last fall.
Our kids all moved out and it was kind of depressing living in a big empty 2 story house.
The traffic noise from the street behind us had really gotten out of hand so that was the last straw.

So we packed up and decided to build a new place in Havasu.
I'm not really concerned too much with how much its worth, cause its going to be our last permanent residence.

If we do get another chance to buy in low I will be shopping for a condo in Kauai.

 

[4Waters]

I'm only about 10 grand (give or take 1000) in debt paying double with a 1200mo mortgage, we should survive.

 

[Englewood]

Just remember, when the tide goes out, you will see who was swimming naked.

I am personally stacking my chips and preparing for a crash but hoping for continued stability.

 

[Cole Trickle]

Not taking a dig at you, but that's part of what sustained the last crash.
If housing prices drop and there's negative equity, it can be a tough hole to dig out of.

2Driver is joking around...lol

He is a hard $$$ loan guy and probably has more $$$ lying around in his sock drawers than most have in savings

 

[pronstar]

2Driver is joking around...lol

He is a hard $$$ loan guy and probably has more $$$ lying around in his sock drawers than most have in savings

Looks like I fell for it lol [emoji4]

 

[DrunkenSailor]

We still aren't completely out of the last housing crisis. If you look at Fannie Freddie and HUD the number of mortgages that are 90+ days delinquent is sitting at 100bn in Unpaid Principle Balances. The majority of these properties are in the North East where Fannie Mae says it should take 3-4 years to foreclose on a property. Throw in delays caused by Bankruptcy and failed repayment plans and that number is now averaging over 6 years to foreclose in NY. As a general rule everything east of the Mississippi is a Judicial foreclosure state and the courts and the sheriffs offices are still backed up. There are still billions of dollars in loans out there that are still delinquent from 06-08 that have not been foreclosed on and many of these properties have renters living in them with rent checks being cut to the borrower who hasn't made a payment in 8 years. Also you have thousands of homes in every county that are vacant. I am hoping that we can at least clean up the last mess before we start on a new one.

 

[DrunkenSailor]

Fannie, Freddie and HUD are liquidating over a billion dollars a quarter in delinquent loans to private investors and they have a long way to go before they are done.

 

[EmpirE231]

It is definitely coming!

it still has a short ride I believe (1-2 years?)

one thing I read about recently that could maybe make that ride last longer is inflation, due to all the money the govt has been printing since QE.


I don't think a massive shedding of jobs is what it takes... all it takes is a soft blow to some peoples hours, or overtime being cut...

 

[mbrown2]

Not taking a dig at you, but that's part of what sustained the last crash.
If housing prices drop and there's negative equity, it can be a tough hole to dig out of.

 

["NOEXCUSES"]

Two songs come to mind to answer your question. Let the Good Times Roll by The Cars and What Goes Up Must Come Down by Alan Parsons...

I prefer "moving in stereo" and "eye in the sky"...
The southern california housing market turning around isn't indicative of the country as a whole. The houses in Phoenix arent what they were back then AND 175K houses dont have brand new tatum cars and fundecks in the drive way. Thats because the 175k houses are sitting at 230-240k. These houses were going for 380-450 back then. All that said if we cant pay cash we cant afford it.

 

[2Driver]

Not taking a dig at you, but that's part of what sustained the last crash.
If housing prices drop and there's negative equity, it can be a tough hole to dig out of.

I didn't think my post required a smilie but apparently I was wrong.

[video=youtube_https;2mSd5t2n3ck]https://youtu.be/2mSd5t2n3ck[/video]

 

[boatnam2]

Hopefully houses will fall 50% here in long beach where i live, if the rate stay semi low may even have a chance to buy one. thinking seeing a two headed donkey is a closer reality.

 

[HB2Havasu]

I seriously doubt your going to see any retreat in housing prices in SoCal over the next 3-4 years based on jobs, low interest rates, and a low inventory of single family housing. If anything prices are going to rise 6%-10% in that time frame then possibly level off after that. I've been reading on this site for 5 years now from the so-called "experts" about the impending bubble bursting and it's done the opposite, lol. I'm not moving so I could really care less if prices rise or fall. I'm just going to continue to make double mortgage payments on my primary residence to reduce my debt and hopefully pay it off in the next 10 years. My rental property is making 150% of the payment so if the market dips who cares I'm still making money, and if that happens then rents just go up. It's a win - win the way I see it!!!

 

[nowski]

[QUOTE="NOEXCUSES";2783475]I prefer "moving in stereo" and "eye in the sky"...
The southern california housing market turning around isn't indicative of the country as a whole. The houses in Phoenix arent what they were back then AND 175K houses dont have brand new tatum cars and fundecks in the drive way. Thats because the 175k houses are sitting at 230-240k. These houses were going for 380-450 back then. All that said if we cant pay cash we cant afford it.[/QUOTE] I like those tunes as well but they didn't align with the thread...

Back to the housing market, how many times in the past did you or someone you know put an offer in on a home to only find out it was outbid by an investor??? The Big Money is waiting on the sidelines (IMO) getting ready to pounce on the market when the time is right...

 

[RiverDave]

We are kinda doing the same thing as others have mentioned. Paid off the CC's, and one of the toys, now it's time to pay off the boat and start stacking $$$ for when it does come. I think it's a ways out though, but when it comes holy smokes it's gonna be a rough one.

RD

 

[GRADS]

I'll tell you when you should start being cautious.....When you start seeing threads like this on RDP. Seriously! I remember all the "bubble" threads in 2007 and then all of a sudden pop.

 

[530RL]

Something to consider is what happens if tax reform passes as currently promulgated and someone who owns rentals can not longer deduct the interest they pay on the debt for that business, and/or one can no longer deduct the state and local income and property taxes they pay on that rental property as the owner. The taxable income on that asset goes up, but the free cash flow goes down.

Would that make rental properties more valuable, or less valuable economically? :hmm

 

[ONE-A-DAY]

It's inevitable, one of the reasons we sold our homes in Havasu and our taking the growth we made over the last 7 years to buy the final retirement home. If it takes a shit then who cares, I'll be in the house I plan on dieing in anyway.

 

[Instigator]

When everyone is Buying...Sell
When everyone is Selling....That is the Best time to Buy
Just my 2 cents.

 

[RiverDave]

When everyone is Buying...Sell
When everyone is Selling....That is the Best time to Buy
Just my 2 cents.

That's a pretty good way to look at it.. but I have asked this before.. where to live in between? I'd love to sell right now and wait, but don't really see it as an option?

 

[LargeOrangeFont]

That's a pretty good way to look at it.. but I have asked this before.. where to live in between? I'd love to sell right now and wait, but don't really see it as an option?

Not many are selling right now in So Cal, inventory is low.

And you are pissing your profit away renting in between while you wait.

 

[LargeOrangeFont]

Something to consider is what happens if tax reform passes as currently promulgated and someone who owns rentals can not longer deduct the interest they pay on the debt for that business, and/or one can no longer deduct the state and local income and property taxes they pay on that rental property as the owner. The taxable income on that asset goes up, but the free cash flow goes down.

Would that make rental properties more valuable, or less valuable economically? :hmm

Depends on if the total tax burden on the business/person goes up or down... And we will have to see what if anything gets passed.

 

[LargeOrangeFont]

I'll tell you when you should start being cautious.....When you start seeing threads like this on RDP. Seriously! I remember all the "bubble" threads in 2007 and then all of a sudden pop.

If this is a bubble it has taken 3X as long to inflate as it did last time. It is not going to pop, it is just going to deflate a little, and then go back to inflating.