For the Real Estate Drop in sales and price Naysayers HOLD ONTO YOUR HATS

[hallett21]

Yup.

There’s a quite a large car-loan bubble, part of which was created when people overpaid for used cars…most of those notes were subprime or worse.

Moving forward, when used prices drop and they owe twice the value of the car, these people ain’t gonna keep making payments.

Is there a way to see if it’s a 2022 F450 vs shit box Kia?

I agree with the data but I imagine the average loan in default (home, auto, etc) are not what the RDP clan is looking to buy.

 

[LargeOrangeFont]

Is there a way to see if it’s a 2022 F450 vs shit box Kia?

I agree with the data but I imagine the average loan in default (home, auto, etc) are not what the RDP clan is looking to buy.

And there is the problem.

 

[Done-it-again]

I would think SxS's first, but I don't know. I'd think larger payments first, no regard for logic. So the crew cab or suburban for the single guy or young couple would hit the block before the pimp toys.

I don’t think so. You still need to look “fly” cruising your pimp ride around. Got to keep up that image.

 

[Done-it-again]

Record low unemployment and a record high quit rate, say otherwise. Employment data is key here. Until job losses start to pile up in high paying positions, then you have a market that is simply going to normalize. Maybe we see a drop in prices but not a huge one. My question to all the "cash buyers", what are you waiting for?? Prices to go back to 2020 levels? How come you just didn't buy back then??

I think the 2022 word of the year is “cash buyers”

In reality how may of the these people are on RDP? Maybe a couple, but not as many who talk about it.

 

[DrunkenSailor]

Guidelines are starting to tighten outside of agency paper. Max ltv's are coming down on non qm. liquidity on the secondary market is becoming a real issue. Two lenders have closed their doors this past month. Its gonna get worse before it gets better.

 

[PaPaG]

Record low unemployment and a record high quit rate, say otherwise. Employment data is key here. Until job losses start to pile up in high paying positions, then you have a market that is simply going to normalize. Maybe we see a drop in prices but not a huge one. My question to all the "cash buyers", what are you waiting for?? Prices to go back to 2020 levels? How come you just didn't buy back then??

With only 62% of the eligable work force working of course we are going to have record low unemployment rates, 38% that can work don't want to work right now...there is no reason in the world ANYONE that wants a job cannot get one during this last 12 months....the tide had turned, employees are terminating, slowing and even halting new hires by the hundreds soon to be by the thousands right now and gonna get worse...Housing data just came out, June home buying contracts had 60,000 cancellations, July expected to have even more. Cash buyers are waiting for the expected big dip in prices that is coming in both homes and vehicles, cash buyers don't want a 5% drop in prices that are still higher than former realistic levels they want 20-30% drops at minimum from these crazy inflated prices.........it has just begun so I expect within 6-12 months it will become a buyers market once again...

 

[monkeyswrench]

I think the 2022 word of the year is “cash buyers”

In reality how may of the these people are on RDP? Maybe a couple, but not as many who talk about it.

I'm a "cash buyer"...but the cash buyer more for the Kia than the F450

Debt is debt. There are those that firmly believe using low interest loans to build wealth and a real estate portfolio is a great thing. In some cases, most actually, it is. The problem lies with the not being able to cover all your payments should your renters not cover their's. If you can do so, you are golden. If you are on the cusp...

I don't like depending on other people. I've never made the kind of coin to afford a home I'd like to live in, and several to rent out. Trusting other people to help make your payment is a partnership I could never get in to.

 

[PaPaG]

I think the 2022 word of the year is “cash buyers”

In reality how may of the these people are on RDP? Maybe a couple, but not as many who talk about it.

I would say more than you would expect.

 

[LargeOrangeFont]

I would say more than you would expect.

I would say less. Why didn’t they buy in 2019 or prior? They had to wait for the .gov to hand them money?

 

[Done-it-again]

Guidelines are starting to tighten outside of agency paper. Max ltv's are coming down on non qm. liquidity on the secondary market is becoming a real issue. Two lenders have closed their doors this past month. Its gonna get worse before it gets better.

So how many “new” lenders opened up doing this boom? It was easy picking when the market is hot. Of course there will be shops closing up when it’s not easy $$$$.

I wonder how many “new” realtors came to be during the same time.

 

[Done-it-again]

I would say more than you would expect.

I would hope so, I’ll be waiting for their LAM post

 

[PaPaG]

I would say less. Why didn’t they buy in 2019 or prior? They had to wait for the .gov to hand them money?

I know a lot of Cash buyers and most of them did not buy in 2019 because the prices had already gotten out of control and a lot of them already owned what they wanted at the time with low or no debt , after that, the market had gotten even more crazy during Covid, inflation, chip shortages, housing price increases like never seen before, etc... a lot of folks I know with cash are waiting for the upcoming corrections to buy investment property, vehicles, future retirement homes, toys that people went out and bought with their GOV money that they could not afford....Its right around the corner....facts are facts.

 

[FishSniper]

Record low unemployment and a record high quit rate, say otherwise. Employment data is key here. Until job losses start to pile up in high paying positions, then you have a market that is simply going to normalize. Maybe we see a drop in prices but not a huge one. My question to all the "cash buyers", what are you waiting for?? Prices to go back to 2020 levels? How come you just didn't buy back then??

Exactly. IMO there are 2 things going on in this thread Ppl like the guy who started it trying to thump his chest that he sold at the top thinking he’s smarter then everyone and people pissed they didn’t buy when it was much lower and now regret not buying since it spiked. Funny part is for the first type is do they think the value of their current place is immune to the drop ?Its not so cheerleading for a crash is counter productive. Things never go straight up the market was going to inevitably slow at some point and it has been exasperated by the bonehead administration in the White House.

 

[PaPaG]

I would hope so, I’ll be waiting for their LAM post

I hope everyone on RD does good, I never wish negative for any good person.....but some don't post all their LAMs some just invest, buy, sell and hopefully make money to add to their CASH AMMO to buy more when the timing is right

 

[LargeOrangeFont]

I know a lot of Cash buyers and most of them did not buy in 2019 because the prices had already gotten out of control and a lot of them already owned what they wanted at the time with low or no debt , after that, the market had gotten even more crazy during Covid, inflation, chip shortages, housing price increases like never seen before, etc... a lot of folks I know with cash are waiting for the upcoming corrections to buy investment property, vehicles, future retirement homes, toys that people went out and bought with their GOV money that they could not afford....Its right around the corner....facts are facts.

I’m not that worried about it either way. But it seems many were complaining that RE prices were unsustainable from 2015-2019.

If prices go back to 2019, will these people you know buy?? Or will it still be too expensive like it was then?

 

[PaPaG]

Exactly. IMO there are 2 things going on in this thread Ppl like the guy who started it trying to thump his chest that he sold at the top thinking he’s smarter then everyone and people pissed they didn’t buy when it was much lower and now regret not buying since it spiked. Funny part is for the first type is do they think the value of their current place is immune to the drop ?Its not so cheerleading for a crash is counter productive. Things never go straight up the market was going to inevitably slow at some point and it has been exasperated by the bonehead administration in the White House.

Funny how people can post their opinions, thoughts or factual info updates and others have to be bitter.....Never was trying to Thump my chest but after your post and pointing out that I thought I was smarter than others, I am actually going to THUMP THUMP IT!, I was smart to sell when I did, made a great profit and amazingly fast sale before the market started to change with the slow down.....BUY LOW SELL HIGH is the name of the game.... :O

 

[PaPaG]

I’m not that worried about it either way. But it seems many were complaining that RE prices were unsustainable from 2015-2019.

If prices go back to 2019, will these people you know buy?? Or will it still be too expensive like it was then?

I am thinking 2016 to 2017 prices.

 

[petie6464]

So how many “new” lenders opened up doing this boom? It was easy picking when the market is hot. Of course there will be shops closing up when it’s not easy $$$$.

I wonder how many “new” realtors came to be during the same time.

I know for a fact 2 outta 3 people in Havasu are realtors. .

Walk into a crowd and start talking how your looking to buy a house, you'll have a swarm of realtors waving their business card at you.

 

[FishSniper]

Funny how people can post their opinions, thoughts or factual info updates and others have to be bitter.....Never was trying to Thump my chest but after your post and pointing out that I thought I was smarter than others, I am actually going to THUMP THUMP IT!, I was smart to sell when I did, made a great profit and amazingly fast sale before the market started to change with the slow down.....BUY LOW SELL HIGH is the name of the game.... :O

Not bitter at all I could have and still could sell at a nice profit but chose not too it didn’t take a genius to see the market was going to be changing with everything going on.

 

[PaPaG]

Not bitter at all I could have and still could sell at a nice profit but chose not too it didn’t take a genius to see the market was going to be changing with everything going on.

Did not take a Genius but it took market insight that is for sure. Lots of folks got caught with their pants down that cannot sell for nearly as much profit as they could now due to interest rate increases, slowing market, etc...

 

[c_land]

Record low unemployment and a record high quit rate, say otherwise. Employment data is key here. Until job losses start to pile up in high paying positions, then you have a market that is simply going to normalize. Maybe we see a drop in prices but not a huge one. My question to all the "cash buyers", what are you waiting for?? Prices to go back to 2020 levels? How come you just didn't buy back then??

I'd love to be a cash buyer....... I just need the cash

 

[hallett21]

I know a lot of Cash buyers and most of them did not buy in 2019 because the prices had already gotten out of control and a lot of them already owned what they wanted at the time with low or no debt , after that, the market had gotten even more crazy during Covid, inflation, chip shortages, housing price increases like never seen before, etc... a lot of folks I know with cash are waiting for the upcoming corrections to buy investment property, vehicles, future retirement homes, toys that people went out and bought with their GOV money that they could not afford....Its right around the corner....facts are facts.

I understand waiting for cars, trucks, boats and toys to come down. I don’t understand comparing a 2001 1 ton truck vs today’s prices. The tech and power train are light years apart lol.

But on the real estate front, by the time you factor in inflation (your cash is less valuable today), missed/lost rental income over 1-4 years, missed/lost tax write offs and appreciation (we can remove that since you’re calling for a 20-30% pullback). Are you really better off waiting?

You’re potentially saving on property taxes but appreciation over 10 years would make that savings moot.

Seems like those trying to time real estate are doing it just to brag that they bought the bottom.

 

[monkeyswrench]

There are several different types of people on this board. You have those that do financing...see peoples numbers and what people are buying. You have people that are in the real estate business, helping people find or sell properties. Then you have the two extreme ends of the spectrum. There are dorks like me, who make "enough", not much more, but doing fine. Then you have the guys I think of as the big fish. I've met a few, normal guys by appearance and attitude, but much different. A lot of them post very little, but read quite a bit. People like them move money to buy properties or businesses like I move money to buy fuel.
90% I'd venture to say fall somewhere in between small fish, like myself, and big fish, like I mentioned. Everyone sees the outcome of all this through their own prism.
Some of us try to listen to all the views we can. Most hold hope the optimists are right, but still worry. These are not like the normal times we've seen before. Add to that an administration lacking any wherewithal about the world in general...

Most here are smarter than me in the world of finance. I know that, and am quite ok with it. The problem is, all the people who's opinions I respect, are not in agreement...and that is a bit unnerving.

 

[hallett21]

I am thinking 2016 to 2017 prices.

Let’s go baby. I need 20 doors!!

 

[Gonefishin5555]

Well my fall back argument is that everyone who bought has 3% loans and low mortgage payment. Year over year price increases will be the norm until at least the end of 2022. Not worried…..yet. Rents are still high and demand is still pretty strong

 

[PaPaG]

I understand waiting for cars, trucks, boats and toys to come down. I don’t understand comparing a 2001 1 ton truck vs today’s prices. The tech and power train are light years apart lol.

But on the real estate front, by the time you factor in inflation (your cash is less valuable today), missed/lost rental income over 1-4 years, missed/lost tax write offs and appreciation (we can remove that since you’re calling for a 20-30% pullback). Are you really better off waiting?

You’re potentially saving on property taxes but appreciation over 10 years would make that savings moot.

Seems like those trying to time real estate are doing it just to brag that they bought the bottom.

I agree there is NO and I mean NO comparison from the older vehicles to the new ones but the problems and crazy costs of the newest and brightest gets a ton of people in financial problems, OR at best takes a way a huge chunk of potential investment money but to each his own, if someone wants a 90k truck by all means go buy one, not my money not my business not my expense, it is all up to each individual to do with their money as they like. As far as real estate goes, it is NOT the only income creating entity, not by far. IF someone knows the stock market and how to invest properly they could invest and get a mild gain of 10% easily and up to 20-25-30% and UP a year if they know what they are doing. (they could also lose it all as well). Last but not least, trying to time real estate and doing it to brag lol I think the key is trying to make as much money as possible with a persons investments or buying a dream home or property not to brag that they bought at the bottom but to enjoy that they got a great deal and did not overpay...

 

[PaPaG]

Well my fall back argument is that everyone who bought has 3% loans and low mortgage payment. Year over year price increases will be the norm until at least the end of 2022. Not worried…..yet. Rents are still high and demand is still pretty strong

I think anyone that bought with a 2 or 3% fixed rate did great, I am not sure we will ever see those rates again but you never know. The money they will save throughout the life of the loan if they go full term will save a crap load of money equaling out any drop in value.

 

[Outdrive1]

Record low unemployment and a record high quit rate, say otherwise. Employment data is key here. Until job losses start to pile up in high paying positions, then you have a market that is simply going to normalize. Maybe we see a drop in prices but not a huge one. My question to all the "cash buyers", what are you waiting for?? Prices to go back to 2020 levels? How come you just didn't buy back then??

I’m far from an expert. I do see that employment is different than 2008. Literally you can’t find anyone to do anything. Everyone in construction trades is working their asses off and unable to find help. Restaurants and stores can’t hire anyone. There’s plenty of vacant jobs. Granted these aren’t white collar high paying jobs, which I have no clue about. I just have a different feeling than the impending doom I felt in 08. There wasn’t much positive to look at back then. Prices needed to stop climbing at record rates every month.

 

[LargeOrangeFont]

I am thinking 2016 to 2017 prices.

Same question again then.

I don’t see us with those drops everywhere. Maybe in a couple markets. If what you say is true I believe there is too much cash on the sidelines to let things drop that far in many markets. Again there is over a decade of people with low rates locked in that aren’t going anywhere in this climate.

But we are just in the beginning, we will see.

 

[c_land]

John Burns Real Estate Consulting does a monthly builder survey. Quoted below are the responses that were received for June sales from builders surveyed.

https://twitter.com/i/web/status/1546500966349819905

• Atlanta builder: “Someone turned out the lights on our sales in June!”
• Austin builder: “Sales have fallen off a cliff. We’re selling 1/3 of what we sold in March and April. Trades are more willing to negotiate pricing since market has adjusted significantly past 60 days.”
• Birmingham builder: “Sales have fallen 75% the last two months in a further out community.”
• Boise builder: “Sales have slowed tremendously. Builders are dropping prices and halting new starts. Seeing prices drop on labor due to slowing of home starts. Expecting 15% to 20% reduction in most costs.”
• Charlotte builder: “This recession is looking like and feeling like a big long five year depression.”
• Colorado Springs builder: “Amazing how fast a market can change with such a rapid increase in rates. So many people were taken out of the market. Most builders will go to suppliers/trades and ask for rollbacks [on costs].”
• Dallas builder: “Framing labor has become readily available, suggesting housing starts slowdown is finally showing its typical signs. Haven’t raised prices in 3 months.”
• Des Moines builder: “Starting to see [construction] trades hold labor prices for us as they are fearful of a downturn.”
• Fort Myers builder: “Investor sales have stalled.”
• Grand Rapids builder: “Believe we’re on the edge of cost reductions. Making every effort to refuse further [cost] increases and pushing for decreases in all areas that have seen significant two year run up.”
• Greenville builder: “Traffic has slowed from red hot. Feels different for sure, but it’s more like a normal market.”
• Harrisburg builder: “Sales decreased to 50% of what they were 3 months ago. Traffic is down and we’re only moving spec homes after dropping prices. No one is buying to-be-built homes at this time.”
• Houston builder: “With the exception of concrete, [construction costs] appear to be stabilizing. Lumber is trailing downward, which is good because we’re going to need that reprieve for buying down mortgage rates to get buyers qualified.”
• Kennewick builder: “Sales have been very slow, and inventory is rising. Repricing our houses to try and find the new market.”
• Melbourne builder: “Our investor sales have stalled.”
• Nashville builder: “Scary times. Hoard cash and hang on for the ride! National builders are cutting staff and offering buyers incentives. Move-up buyers are now practically non-existent due to rising rates in comparison to their existing rate.”
• Phoenix builder: “Some builders are already cutting staff. Cancellations are extremely high. Dismal traffic and sales climate.”
• Reno builder: “With the market slowing, we’re expecting to see costs stabilizing and labor become more available.”
• Riverside-San Bernardino builder: “We’ve reached the top in pricing.”
• San Diego builder: “Fewer people in the market than before, but we are comparing against a market that defied any sense of normality.”
• St Louis builder: “Expecting to see opportunities for lower costs coming in the near future as demand cools and manufacturers and trades see backlogs shrinking.”

 

[LargeOrangeFont]

John Burns Real Estate Consulting does a monthly builder survey. Quoted below are the responses that were received for June sales from builders surveyed.

https://twitter.com/i/web/status/1546500966349819905

Finally. I’m hoping I can swing a deal on landscaping before all the trades pack up and leave the area. I’m done overpaying, that’s for sure

There is no sign of slowing here yet, but I think they are finishing all the stuff that was scheduled out 60-90 days ago.

 

[attitude]

Serious question. Where are all the workers? How are so many people able to sit at home and not work all of the sudden?

 

[OldSchoolBoats]

Serious question. Where are all the workers? How are so many people able to sit at home and not work all of the sudden?

That is the million dollar question.

Mad Madeline's in Old Town Temecula had to shut down on Sunday because they didn't have cooks.

 

[Havasu blue label]

2016 and 2017 prices correct in certain areas havasu

 

[Havasu Rehab]

2016 and 2017 prices correct in certain areas havasu

That's about a 50% estimated decline from current pricing.

You can call me a pessimist, but I don't see that happening. I guess we'll see...

 

[GOTTBoat]

Serious question. Where are all the workers? How are so many people able to sit at home and not work all of the sudden?

I know someone that owns a restaurant here in Havasu and wanted a couple of his employees to bump up from 20 hrs. a week to 30+ hrs a week, both ended up leaving because they would end up losing EBT benefits. How do you compete with free money? How does anybody ever get ahead in life with that work ethic? These employees are in their mid/late twenties. They are probably the turds that complain about no affordable housing in Havasu for the "workers".

 

[LargeOrangeFont]

2016 and 2017 prices correct in certain areas havasu

Would be cool if it happens but with “all the cash in the sidelines” I don’t see $200k duplexes in Havasu happening again. They will be bought up before it gets that low.

If it did, that would make Havasu one of the best long term rental markets in the country.

 

[LargeOrangeFont]

That's about a 50% estimated decline from current pricing.

You can call me a pessimist, but I don't see that happening. I guess we'll see...

And his timeline for the drop was 90 days almost a month ago.

 

[TCHB]

Havasu just went over 400 single family homes for sale. 25% increase in a month.

 

[Sportin' Wood]

Serious question. Where are all the workers? How are so many people able to sit at home and not work all of the sudden?

Just finished a conference call with our leadership team for my division. The Head of HR in Canada has been telling us for months to do whatever we can to keep employees as getting more is going to be difficult. Without too much detail, he told us today that traditional immigrant workforce culture has shifted from immigration for an opportunity to make a better life through hard work, to better life through government hand out. They absolutely will not work for fear of losing the free stuff. Which BTW gives them a better standard of living than where they came from.

I assume the US is not far from this culture shift.

 

[530RL]

The number of people working today is more than it was in early 2019 and within a few hundred thousand people to what it was at its peak in 2019.

 

[Sportin' Wood]

That's about a 50% estimated decline from current pricing.

You can call me a pessimist, but I don't see that happening. I guess we'll see...

I don't see those kinds of drops either and beyond Havasu. I could be wrong, and it would take 18 months of really bad shit. I will be happy with pre-covid prices.

 

[Gonefishin5555]

Just finished a conference call with our leadership team for my division. The Head of HR in Canada has been telling us for months to do whatever we can to keep employees as getting more is going to be difficult. Without too much detail, he told us today that traditional immigrant workforce culture has shifted from immigration for an opportunity to make a better life through hard work, to better life through government hand out. They absolutely will not work for fear of losing the free stuff. Which BTW gives them a better standard of living than where they came from.

I assume the US is not far from this culture shift.

My ex wife already bought into it. Wanted to keep her free health insurance. One of my college kids got some food stamps cause her friend told her how to do it not sure if she had to lie or what.

Edit how much free shit can you get? I’m going to start a new thread and ask the question

 

[Cobalt232]

I know someone that owns a restaurant here in Havasu and wanted a couple of his employees to bump up from 20 hrs. a week to 30+ hrs a week, both ended up leaving because they would end up losing EBT benefits. How do you compete with free money? How does anybody ever get ahead in life with that work ethic? These employees are in their mid/late twenties. They are probably the turds that complain about no affordable housing in Havasu for the "workers".

We have the exact same issue with some of our ' part-time' employees. They can't 'work' too much or it cuts into their subsidized housing benefits.

 

[Havasu blue label]

I don’t remember 200 duplexes they would be in my book

 

[FROGMAN524]

I'm a "cash buyer"...but the cash buyer more for the Kia than the F450

Debt is debt. There are those that firmly believe using low interest loans to build wealth and a real estate portfolio is a great thing. In some cases, most actually, it is. The problem lies with the not being able to cover all your payments should your renters not cover their's. If you can do so, you are golden. If you are on the cusp...

I don't like depending on other people. I've never made the kind of coin to afford a home I'd like to live in, and several to rent out. Trusting other people to help make your payment is a partnership I could never get in to.

That's why Grant Cardone says 1 door is a no-no and 4 or more is the only way to go when renting.

 

[satellitemike]

That is the million dollar question.

Mad Madeline's in Old Town Temecula had to shut down on Sunday because they didn't have cooks.

Thats pretty sad they had to close, how hard is it to flip a burger and cook some fries?

 

[FROGMAN524]

Thats pretty sad they had to close, how hard is it to flip a burger and cook some fries?

I live in North Phoenix. Wife went to get my almost 2 year old some chicken nuggets the other day and we have two Burger Kings in our area.. She went to both and they were both closed, middle of a week day, with signs on the drive through saying sorry we have no workers to stay open. Obviously my son did not get his nuggets.

 

[OldSchoolBoats]

Thats pretty sad they had to close, how hard is it to flip a burger and cook some fries?

Not hard at all and from what I understand, they are paid pretty well for it.

 

[Motor Boater]

I live in North Phoenix. Wife went to get my almost 2 year old some chicken nuggets the other day and we have two Burger Kings in our area.. She went to both and they were both closed, middle of a week day, with signs on the drive through saying sorry we have no workers to stay open. Obviously my son did not get his nuggets.

I stopped 2 times at the Burger King in camp verde on our way up north to get the kids food. Both times they were closed due to staffing issues. It’s all over the place. I know restaurants in Scottsdale that are now closing on Monday’s and Tuesday’s because they need their staff to work the latter part of the week and weekends. It’s crazy.