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

[Orange Juice]

I found this interesting but not surprising, based on the reduced traffic and available RV spots up here in God's Country this summer. I also read an article stating Glacier NP is partnering with STR owners in the area to house employees for the summer since many were having difficulty finding vacation renters. Alltherooms seems like a legit analytic site. I went on and could see limited data, but any valuable data costs $$. Inventory is still crazy tight up here, so it doesn't look like it's really having an effect on anything yet.

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Since when is Phoenix in Pinal county? (13)

 

[Gonefishin5555]

Keep in mind, this doesn't reflect bookings, it reflects revenue. Could be price reductions, bookings, who knows what else. Additionally, I'm not sure where this company AlltheRooms gets its information from. But yes, it's pretty significant, IMO.

The avg is down because you have an increase in the number of listings? Need to see the raw data to know.

 

[Cdog]

Since when is Phoenix in Pinal county? (13)

Probably aimed at Queen creek area. While it’s tied to Maricopa co commercially it’s actually Pinal Co.

That being said who the F would want a vacation there?

 

[mesquito_creek]

Probably aimed at Queen creek area. While it’s tied to Maricopa co commercially it’s actually Pinal Co.

That being said who the F would want a vacation there?

They don’t, but there is always some “event” going on and they keep creating more dumb holidays.

For my mother in laws 75th birthday we have 4 or 5 out of state people come to town. With hotels in the area running 350 a night in peak winter season we did a VRBO house for a fraction of the cost and put them all in one spot.

Graduations? Birthdays? Anniversary etc etc. and with all the growth in that area those Gilberto’s all need to deal with stuff like that.

… just a guess in my part, no data to back it

 

[LargeOrangeFont]

Keep in mind, this doesn't reflect bookings, it reflects revenue. Could be price reductions, bookings, who knows what else. Additionally, I'm not sure where this company AlltheRooms gets its information from. But yes, it's pretty significant, IMO.

Let’s also keep in mind that this is ONLY AirBnB. And from what I can tell AirBnB has been loosing some marketshare.

If all this was as it looked, and the Doomers here are correct that everyone is just leveraged to the hilt, we would be seeing inventory spikes in these areas if nothing else. It’s obvious that rentals are down, but that is not translating to a market decline at this time.

 

[Gonefishin5555]

Let’s also keep in mind that this is ONLY AirBnB. And from what I can tell AirBnB has been loosing some marketshare.

If all this was as it looked, and the Doomers here are correct that everyone is just leveraged to the hilt, we would be seeing inventory spikes in these areas if nothing else. It’s obvious that rentals are down, but that is not translating to a market decline at this time.

Thats another possibility the revenue is being collected through other channels. The fees they charge are ridiculous. Maybe its time to short the stock

 

[Havasu Rehab]

Thats another possibility the revenue is being collected through other channels. The fees they charge are ridiculous. Maybe its time to short the stock

This video provided an interesting perspective. He concedes that Airbnb rentals are overall down, but apparently Airbnb as a company is still very profitable.

Ultimately it is the internet and I haven’t fact checked it.

 

[DrunkenSailor]

Bond pricing is driving rates up again. Expect another quarter to a half higher than this time last month. We are seeing market squeezing similar to what we saw in Feb/Mar and Oct/Nov last year. Feels topish to me hope I am right.

 

[Gonefishin5555]

This video provided an interesting perspective. He concedes that Airbnb rentals are overall down, but apparently Airbnb as a company is still very profitable.

Ultimately it is the internet and I haven’t fact checked it.

i checked the house near me in bhc its $1773 for two days in august. its booked 20 days in July and 9 days in August right now.

 

[Havasu Rehab]

i checked the house near me in bhc its $1773 for two days in august. its booked 20 days in July and 9 days in August right now.

Wow… that’s nice for the owner. One point also made in the video is there has been an increase in last minute bookings. I don’t know if that has anything to do with anything, but I just thought it was an interesting fact.

 

[LargeOrangeFont]

Wow… that’s nice for the owner. One point also made in the video is there has been an increase in last minute bookings. I don’t know if that has anything to do with anything, but I just thought it was an interesting fact.

Well, people wanting to get away this weekend on a whim can now easily find a rental.. where they were booked solid previously.

 

[Havasu Rehab]

Well, people wanting to get away this weekend on a whim can now easily find a rental.. where they were booked solid previously.

True and to touch on your point from earlier in the thread… I have seen an increase in bookings from outside Airbnb.

Whether it be here from RDP or from co-workers, etc. it has noticeably increased from last season. Albeit, this is only our second year running the STR so maybe the word is just getting out?

 

[Todd Mohr]

Once you rent from VRBO or AIRBB, you usually end up with the host's contact. Now the next time you can contact them directly and not pay the constantly increased fees they now charge. They got too greedy, JMHO.

 

[LargeOrangeFont]

Once you rent from VRBO or AIRBB, you usually end up with the host's contact. Now the next time you can contact them directly and not pay the constantly increased fees they now charge. They got too greedy, JMHO.

Winner.

 

[NicPaus]

Once you rent from VRBO or AIRBB, you usually end up with the host's contact. Now the next time you can contact them directly and not pay the constantly increased fees they now charge. They got too greedy, JMHO.

Same deal with outdoorsy and rv share. My friend recently started renting travel trailers on there. The fees they charge are crazy. He is getting repeat customers now and can give them much better prices directly and still make more money.

 

[DrunkenSailor]

Rates are going crazy... We are rapidly approaching the march highs on the 2 year that we hit during the banking crisis.

2 year treasuries and 10 year treasuries are inverted by over a point. The mortgage industry is raising rates yet again. More pain is coming.

There needs to be a fundamental shift in housing for anything to change. The current agency 30 year fixed average is 7%. At the end of 2022 62% of the mortgages in the us are under 4%, 82% are under 5%, 99% are under 6%. The majority of people moving out of their primary residence will do so due to job loss, relocation or death.

Estimates are all over the place but roughly 10% of the housing market is short term rental and an additional 15% of the market is long term rental. 25% of the market in total is an investment property.

We won't see real changes in housing until the investment property market begins to feel pain. In 2022 it looked like we were starting to see a drop in occupancy rates and revenues year over year this summer has shown a reversal of that trend with occupancy rates up nationally. Long term rental rates have dropped 0.5% year over year which is essentially flat but is a reversal from the year over year gains we have seen since 2017.

Home prices are showing a slight decline for the first time since 2017.

Days on market are up slightly but this is a hard metric to track because properties are routinely pulled and relisted restarting the clock.

Active listings are up 7%

But that's a little misleading... Total listings are down 4.6% and new listings are down 25%.

A stagnant mortgage market is not a good thing.. there needs to be a downward cycle to cure unnaturally high inflation.

Credit tightening and a loss of liquidity will hit the real estate bond market due to the continuing commercial collapse but hasn't caused a credit tightening yet. Liquidity is becoming an issue again though.

 

[arch stanton]

The fed chairman has said repeatedly he will have to bring pain the the housing market to get inflation under control
if you believe him and i do house prices will eventually come down it just takes a lot longer than people realize
i read that never before has a fed chairmen said he was going to cause pain to any industry at any time

 

[Orange Juice]

The fed chairman has said repeatedly he will have to bring pain the the housing market to get inflation under control
if you believe him and i do house prices will eventually come down it just takes a lot longer than people realize
i read that never before has a fed chairmen said he was going to cause pain to any industry at any time

As long as we have wage growth, prices will continue to increase.

 

[DrunkenSailor]

As long as we have wage growth, prices will continue to increase.

Wage growth will never keep up with inflation.

 

[LargeOrangeFont]

The fed chairman has said repeatedly he will have to bring pain the the housing market to get inflation under control
if you believe him and i do house prices will eventually come down it just takes a lot longer than people realize
i read that never before has a fed chairmen said he was going to cause pain to any industry at any time

They literally don’t know what they are doing. The pain is mostly going to be on the commercial side. Over 90% of houses are paid off or under 5%.

Until there are big job losses, there can’t be much pain on the residential side.

As stated earlier here, even a drop back to 2019 house pricing represents a bigger drop than 2008.

 

[DWC]

They literally don’t know what they are doing. The pain is mostly going to be on the commercial side. Over 90% of houses are paid off or under 5%.

Until there are big job losses, there can’t be much pain on the residential side.

As stated earlier here, even a drop back to 2019 house pricing represents a bigger drop than 2008.

The areas that get hit will be the same as last go round. Suburban sprawl/newer builds - combination of being upside down and hammered over higher gas/cost of living. Condos always feel the pinch. Something about $1,000 a month HOA’s when interest rates are up seem to discourage buyers.
I don’t know how the commercial market hasn’t imploded. Guessing long term leases has kept money flowing in. I know our office building is basically empty. If workers aren’t forced to come back it won’t change anytime soon.
I think the job market is gonna get interesting soon. A few inmates going through it now. I know we had some big cuts this week and I’d bet it’s not done. Publicly traded companies are a SOB. They have to keep Wall Street happy and guess what impact the FED is going to have over the next 18-24 mos.

 

[LargeOrangeFont]

The areas that get hit will be the same as last go round. Suburban sprawl/newer builds - combination of being upside down and hammered over higher gas/cost of living. Condos always feel the pinch. Something about $1,000 a month HOA’s when interest rates are up seem to discourage buyers.
I don’t know how the commercial market hasn’t imploded. Guessing long term leases has kept money flowing in. I know our office building is basically empty. If workers aren’t forced to come back it won’t change anytime soon.
I think the job market is gonna get interesting soon. A few inmates going through it now. I know we had some big cuts this week and I’d bet it’s not done. Publicly traded companies are a SOB. They have to keep Wall Street happy and guess what impact the FED is going to have over the next 18-24 mos.

Agreed. It may well be coming. As of May payrolls are still rising. I know the numbers are manipulated but still, it’s been a year and there has only been slight RE fall off, so people have to still be mostly working.

What is weird is why haven’t all these publicly traded companies bailed on their leases for commercial RE? I know people are the easiest thing to cut but ROBO (Remote office/Branch Office) is low hanging fruit as well.

The longer we put along like this, I feel the less likely we are to have the bottom drop out.. and in 18-24 months the FED can claim victory in a “soft landing” recession for Main Street .

I don’t know how a commercial bloodbath affects residential.

 

[DWC]

What is weird is why haven’t all these publicly traded companies bailed on their leases for commercial RE? I know people are the easiest thing to cut but ROBO (Remote office/Branch Office) is low hanging fruit as well.

We went from “re-imagine” your workplace (work from home, to flex 2-3 days in the office (2), to you can only work from home Friday. That just came out this week. Same time as headcount reductions. It’ll be interesting to see how it shakes out.

 

[LargeOrangeFont]

We went from “re-imagine” your workplace (work from home, to flex 2-3 days in the office (2), to you can only work from home Friday. That just came out this week. Same time as headcount reductions. It’ll be interesting to see how it shakes out.

Scare the sheep into compliance .

I suppose that is the reason to keep the commercial space…

 

[Singleton]

Agreed. It may well be coming. As of May payrolls are still rising. I know the numbers are manipulated but still, it’s been a year and there has only been slight RE fall off, so people have to still be mostly working.

What is weird is why haven’t all these publicly traded companies bailed on their leases for commercial RE? I know people are the easiest thing to cut but ROBO (Remote office/Branch Office) is low hanging fruit as well.

The longer we put along like this, I feel the less likely we are to have the bottom drop out.. and in 18-24 months the FED can claim victory in a “soft landing” recession for Main Street .

I don’t know how a commercial bloodbath affects residential.

The smart companies did that already.
In 2021 and 2022, we consolidated a ton of our offices (as leases expired for remote auxiliary locations, they were not renewed). For larger campuses, we went to a smaller footprint and either did not renew leases or sold some of the property we owned. We also, leased some of the property we owned to other companies.

To maintain margin going into our next fiscal, we had a RIF in June. If sales and margins are not maintained through the 2nd month of Q2, we will have another IMO. This part sucks, because we are losing good folks, the lower performing team members were already cut in Nov 2022. We are now cutting those who average $1M+ in ARR a year.

 

[Singleton]

We went from “re-imagine” your workplace (work from home, to flex 2-3 days in the office (2), to you can only work from home Friday. That just came out this week. Same time as headcount reductions. It’ll be interesting to see how it shakes out.

Wife’s company has gone from work from home, to quarterly hub weeks (T-Th), to monthly hub weeks (T-Th), if you live within 45 miles of the office (legal reasons it is at 45 miles). Those that moved outside the 45 mile window, have to commute to the hub once a quarter (employee paid), or be at risk for termination. All ‘remote’ employees, have to gain VP approval to stay remote quarterly (these are employees who used to commute daily, but moved during Covid).

 

[LargeOrangeFont]

The smart companies did that already.
In 2021 and 2022, we consolidated a ton of our offices (as leases expired for remote auxiliary locations, they were not renewed). For larger campuses, we went to a smaller footprint and either did not renew leases or sold some of the property we owned. We also, leased some of the property we owned to other companies.

To maintain margin going into our next fiscal, we had a RIF in June. If sales and margins are not maintained through the 2nd month of Q2, we will have another. This part sucks, because we are losing good folks, the lower performing team members were already cut in Nov 2022. We are now cutting those who average $1M+ in ARR a year.

We will have a RIF next year after our merger. I am fairly well protected in my current role as customers have paid for my teams services, and we are now tasked with forecasting and management of fund drawdown for customers.

There is a giant backlog of service and software funds that need to get off the books as we switch to a Sub and SaaS model.

 

[Singleton]

We will have a RIF next year after our merger. I am fairly well protected in my current role as customers have paid for my teams services, and we are now tasked with forecasting and management of fund drawdown for customers.

There is a giant backlog of service and software funds that need to get off the books as we switch to a Sub and SaaS model.

I thought my team was safe. Work on a very specialized team that only had 4 resources covering the 4 North America industry groups we had in sales (we now have 5 groups). I was wrong.

I told the team last week, all admin activities need to be completed weekly. No more waiting a month to file T&E reports, document customer demo notes, and complete other admin activities. I told them; leadership should only know who you are based on the sales you bring in, not because you are on a red report (report tracking admin activities).

 

[Sportin' Wood]

Mortgage Performance Improves in First Quarter 2023 | OCC

The OCC Mortgage Metrics Report, First Quarter 2023 showed that 97.6 percent of mortgages included in the report were current and performing at the end of the quarter, compared with 97.1 percent in the fourth quarter 2022.

www.occ.treas.gov

 

[DWC]

Wife’s company has gone from work from home, to quarterly hub weeks (T-Th), to monthly hub weeks (T-Th), if you live within 45 miles of the office (legal reasons it is at 45 miles). Those that moved outside the 45 mile window, have to commute to the hub once a quarter (employee paid), or be at risk for termination. All ‘remote’ employees, have to gain VP approval to stay remote quarterly (these are employees who used to commute daily, but moved during Covid).

Sounds like the same slow reel in. I’ve never heard of the 45 mile window. Is that a state or company deal?

 

[Singleton]

Sounds like the same slow reel in. I’ve never heard of the 45 mile window. Is that a state or company deal?

Company deal and it has to do with travel expenses.
When they closed the offices, they moved everyone to ‘remote’ workers, instead of being assigned to an office. When they reopened the office, everyone was assigned back to an office. HR legal got involved and it was discovered if you move someone to remote then reclassify them back to an office, the company is responsible for all travel expenses to the office if the resource is outside of 50 miles. So everyone outside the 45 mile marker was moved back to remote.

 

[stillhustlin]

Just to chime in a though on new home construction. I work for a homebuilder and just received a 7.5% raise at my yearly review. Our q1 sales were incredibly good. Anytime rates jump above 7% things slow drastically. We have been buying finished lots like crazy in 2023 and the inventory we can purchase seems to be running thin. Most guys that only do land development and don’t build vertical can no longer get financing thus leading to a shortage of lots. On a side note if you look at new construction spec inventory in Washington County Utah and The Palm Desert area those would be appear to be bubbles.

 

[Havasu blue label]

Just to chime in a though on new home construction. I work for a homebuilder and just received a 7.5% raise at my yearly review. Our q1 sales were incredibly good. Anytime rates jump above 7% things slow drastically. We have been buying finished lots like crazy in 2023 and the inventory we can purchase seems to be running thin. Most guys that only do land development and don’t build vertical can no longer get financing thus leading to a shortage of lots. On a side note if you look at new construction spec inventory in Washington County Utah and The Palm Desert area those would be appear to be bubbles.

What state and price range

 

[RiverDave]

True and to touch on your point from earlier in the thread… I have seen an increase in bookings from outside Airbnb.

Whether it be here from RDP or from co-workers, etc. it has noticeably increased from last season. Albeit, this is only our second year running the STR so maybe the word is just getting out?

When do I get my booking fees? Lol

 

[RiverDave]

On a side note to this thread.. trdp’s phones are blowing up right now in both the havasu and bullhead city.

 

[Havasu Rehab]

When do I get my booking fees? Lol

I’m not opposed to paying the piper if you monetize it.

Glad TRDP business is good

 

[stillhustlin]

What state and price range

Northern Utah 500k-1 million.

 

[Tank]

Hmmmmm I’ve been waiting for the real estate market to drop for past 6 years. It just keeps climbing. When’s this big drop gonna happen again?

 

[zhandfull]

Hmmmmm I’ve been waiting for the real estate market to drop for past 6 years. It just keeps climbing. When’s this big drop gonna happen again?

Me too! Just bought a place in Havasu so it will probably drop any day now.

 

[zhandfull]

On a side note to this thread.. trdp’s phones are blowing up right now in both the havasu and bullhead

Overall market going crazy or just upper or lower end?

 

[Tank]

Me too! Just bought a place in Havasu so it will probably drop any day now.

Congrats.

 

[pronstar]

There’s way too much leverage against CE, the government can’t afford to let it completely implode.

IMHO they will incentivize companies to bring employees back to the office.

As far as inflation goes, raising rates hasn’t done shit. So they keep raising rates…

you know the saying about doing the same thing over and over and expecting different results…

The feds only tool against inflation is to crash the economy to make you poorer.

And because they use lagging indicators in their models, they’ll raise rates right into an economic tailspin because that what’s happened literally every single time they’ve done this in the past.

 

[DWC]

Latest from FDC Fannie Mae

Surprise rates expected to be down by the next election.

 

[LargeOrangeFont]

Latest from FDC Fannie Mae

Surprise rates expected to be down by the next election.


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So… nothing for another 18 months?

 

[DWC]

So… nothing for another 18 months?

Hell if i know! I think the fastest growing markets over the last few years have additional correction coming. Then again, RD on the hunt for another boat, so it couldn’t be too bad.
The next 18 months will be wild. The consensus seems to be rates down by next election. The article says 5.6%. My bet would be even lower when Biden and team give the FED a wink. The only way that wouldn’t be a disaster is if the FED accelerates their current increases. They need to stomp out inflation/growth completely before dropping them back down. It’ll be like gas on a lit fire if they don’t.

 

[LargeOrangeFont]

Hell if i know! I think the fastest growing markets over the last few years have additional correction coming. Then again, RD on the hunt for another boat, so it couldn’t be too bad.
The next 18 months will be wild. The consensus seems to be rates down by next election. The article says 5.6%. My bet would be even lower when Biden and team give the FED a wink. The only way that wouldn’t be a disaster is if the FED accelerates their current increases. They need to stomp out inflation/growth completely before dropping them back down. It’ll be like gas on a lit fire if they don’t.

Agreed. I don’t see much of anything happening in the next 6 months. The economy is still gaining jobs. Not sure what pops a bubble if everyone is working. People exiting CA is propping up Havasu.. the place is busy all week every week these days.

I keep thinking I’m in a bubble up here. They keep building and people keep moving in. I’m waiting for some indictation it is going to stop

 

[Havasu blue label]

So… nothing for another 18 months?

Every property is different in havasu

 

[RiverDave]

Me too! Just bought a place in Havasu so it will probably drop any day now.

I hope you used us!!

 

[RiverDave]

Overall market going crazy or just upper or lower end?

Mostly upper and lower.. but we are getting buyers all over the board right now. All my agents were out showing houses today which is why I was down at the office this am.

 

[zhandfull]

I hope you used us!!

Not on this one.

No excuse really, other than we were just window shopping with no agent and not serious looking to buy at this time. Unexpectedly found something that check a few boxes for us.

Submitted a lowball offer to seller and were able to put together a deal that worked.

It’s an old mobile on deeded lot. Actually just down from one of @2FORCEFULL properties on the nicest street in the tract IMO.

Lots of work to do and looks like I won’t be driving a new C8 Corvette anytime soon as a midlife crisis. Spent that money on an old mobile in Havasu. Family is happy and it has been a nice distraction from other things that family has been dealing with.