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

[Havasu blue label]

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.

Congrats on the purchase

 

[~JM~]

Real Time Precious Metal Quotes and Charts

 

[hallett21]

So let’s say you bought a home in 2014-2019, and you have refinanced into the 2-3% mortgage area. On the low I’m sure you’ve gained 30-40% equity.

Now you could try and time the market and sell in the next 0-18 months, but you need a place to live. So you either rent or buy something else with a 7% mortgage.

Wouldn’t it make more sense to take out a second mortgage at even 7-8% and invest that money into treasuries. Seems like you could get damn close to borrowing 100-200k for 3-4% for 15 years.

You’d still keep your original mortgage rate and the additional second mortgage would cost between $1000-2000. Less after your investments. If no good deals come up you just pay it off.

Seems like there’s always money to be made when you have 100k+ on hand.

 

[Havasu blue label]

Tell me where

 

[hallett21]

Tell me where

Im sure the mortgage guys can chime in on actual costs. But I’m seeing treasuries over 5% right now.

 

[ChumpChange]

Tell me where

Treasuries. Your financial advisor should have access to them. I think we were at 5.41 or something like that last week?

 

[hallett21]

@ChumpChange for a simpleton like myself. Is there a benefit to a 3, 6, 12 month Tbill vs rolling over 1 month ones?

Assuming the rates were the same?

 

[HNL2LHC]

So let’s say you bought a home in 2014-2019, and you have refinanced into the 2-3% mortgage area. On the low I’m sure you’ve gained 30-40% equity.

Now you could try and time the market and sell in the next 0-18 months, but you need a place to live. So you either rent or buy something else with a 7% mortgage.

Wouldn’t it make more sense to take out a second mortgage at even 7-8% and invest that money into treasuries. Seems like you could get damn close to borrowing 100-200k for 3-4% for 15 years.

You’d still keep your original mortgage rate and the additional second mortgage would cost between $1000-2000. Less after your investments. If no good deals come up you just pay it off.

Seems like there’s always money to be made when you have 100k+ on hand.

Before we bought our second home this is what we did and it worked out for us in many ways. Not sure if it could be doable in today’s banking system with the changing times.

I wanted to do a home renovation and just about double the size of our small home. I went to our lender and opened a HELOC for the max that they would give us. The great thing is that if you don’t pull anything out it does not cost you anything. So after we opened up the account we started planning for the build. Turns out that the wife did not want to go through it being that there would still be the issue of traffic of where we were.

We decided to buy in an area that was better for us. We rented our house and then moved into a town home that was a rental of my parents. This allowed to search for our second home and be able to break the lease. You can find people that are willing to rent to you and break the least or month to month after the term of the least. It ended up taking 18 months to find our home. Looking back the best part is that this established our home as a rental in regards to how much we would be able to qualify for.

Then we pulled the $$$ out of the HELOC and used that for the second home purchase. We then worked hard to pay it off or did the paperwork to convert to a fixed second loan on our first house. You can then just rinse and repeat over the years. I had a goal of a new home every 5 years but we were not able to do that while paying for our son’s K-College education.

I do think that soon I will be looking into the Treasuries shortly though so I am looking forward to more info on this from @ChumpChange

 

[LargeOrangeFont]

Yep it’s either another property or Treasuries for me here shortly

 

[hallett21]

Before we bought our second home this is what we did and it worked out for us in many ways. Not sure if it could be doable in today’s banking system with the changing times.

I wanted to do a home renovation and just about double the size of our small home. I went to our lender and opened a HELOC for the max that they would give us. The great thing is that if you don’t pull anything out it does not cost you anything. So after we opened up the account we started planning for the build. Turns out that the wife did not want to go through it being that there would still be the issue of traffic of where we were.

We decided to buy in an area that was better for us. We rented our house and then moved into a town home that was a rental of my parents. This allowed to search for our second home and be able to break the lease. You can find people that are willing to rent to you and break the least or month to month after the term of the least. It ended up taking 18 months to find our home. Looking back the best part is that this established our home as a rental in regards to how much we would be able to qualify for.

Then we pulled the $$$ out of the HELOC and used that for the second home purchase. We then worked hard to pay it off or did the paperwork to convert to a fixed second loan on our first house. You can then just rinse and repeat over the years. I had a goal of a new home every 5 years but we were not able to do that while paying for our son’s K-College education.

I do think that soon I will be looking into the Treasuries shortly though so I am looking forward to more info on this from @ChumpChange

I was going to bring up HELOCs too. But they are variable correct? My only concern with them is if shit hits the fan can’t the bank pull your “line of credit”?

Either way glad you guys could safely leverage and get into where you wanted to.

 

[530RL]

@ChumpChange for a simpleton like myself. Is there a benefit to a 3, 6, 12 month Tbill vs rolling over 1 month ones?

Assuming the rates were the same?

Interest rate risk is the question.

Assuming the yield curve was flat and rates were the same for 1 month or 1 year, the risk question is do you want to lock that return for one year, one month or something in between.

If you believe rates are heading down, you would lock it for a year. If you thought rates were going up, you would only want the one month term to roll to the higher rates in a month.

 

[HNL2LHC]

I was going to bring up HELOCs too. But they are variable correct? My only concern with them is if shit hits the fan can’t the bank pull your “line of credit”?

Either way glad you guys could safely leverage and get into where you wanted to.

It was about 20 years ago so thing were different. That being said our HELCO was variable when you pulled the cash. Only interest until you locked it into the fixed option. Becuase we took the whole chunk at one time and then locked in to the fixed the ARM factor was not a concern. I have heard of a bank calling or pulling your HELOC when the housing market changes. But never happened to us. I assume others in the know will chime in as to what could happen.

 

[angiebaby]

Perhaps I'm missing something. Why would you pull out cash with a HELOC using the hypothetical ARM of 7% to purchase treasuries which pay around 5-5.5%? Paying 7% to make 5% does not seem very smart to me.

 

[angiebaby]

It was about 20 years ago so thing were different. That being said our HELCO was variable when you pulled the cash. Only interest until you locked it into the fixed option. Becuase we took the whole chunk at one time and then locked in to the fixed the ARM factor was not a concern. I have heard of a bank calling or pulling your HELOC when the housing market changes. But never happened to us. I assume others in the know will chime in as to what could happen.

It happened to us (thankfully) in 2008. They didn't call it, but they canceled it. So we could not withdraw any more cash out of the LOC. We were essentially cut off. The reason was that home values had dropped so much.

 

[hallett21]

Perhaps I'm missing something. Why would you pull out cash with a HELOC using the hypothetical ARM of 7% to purchase treasuries which pay around 5-5.5%? Paying 7% to make 5% does not seem very smart to me.

Meaning to keep cash on hand to jump on this “crash”. Basically “creating” a cheap line of credit.

Vs.

Trying to time the market with selling your home, renting/buying and hoping rates and values work in your favor.

For myself I look at that cash on hand being great for real estate investments. But it’s also great for that pickup truck you find in a mobile home park that’s 50% under value. Or buying a few dump trailers and renting them. 6 months ago if all you did is buy Apple stock you’d be a genius.

In an absolute perfect world you take the second mortgage, rent your home for 125% of your 1st and 2nd mortgage, show rental profit and live in a new rental. All while maintaining a good income lol.

 

[NicPaus]

Perhaps I'm missing something. Why would you pull out cash with a HELOC using the hypothetical ARM of 7% to purchase treasuries which pay around 5-5.5%? Paying 7% to make 5% does not seem very smart to me.

If the current house price drops you can cash out the treasury and use the money to buy another house. Getting the most capital from existing house.

 

[Boatles]

Treasuries. Your financial advisor should have access to them. I think we were at 5.41 or something like that last week?

I'm getting over 5% APY from my credit union

 

[hallett21]

Interest rate risk is the question.

Assuming the yield curve was flat and rates were the same for 1 month or 1 year, the risk question is do you want to lock that return for one year, one month or something in between.

If you believe rates are heading down, you would lock it for a year. If you thought rates were going up, you would only want the one month term to roll to the higher rates in a month.

So if rates continue to increase the 1 month makes a little more the following month. But let’s say rates drop by a significant 1-2% mark. Wouldn’t that mean borrowing costs have dropped and that prices (real estate) will begin to increase?

Even if we hit a catastrophic event where rates hit zero and home values drop 50% then you want access to your money quickly.

I’m just not seeing any upside on tying your money up for 3-6 months vs 1 month in the current market.

Put another way, what’s the scenario that a 6 month Tbill at 5.5% today is more valuable when rates dive inside of 3 months? Hope I am wording that right.

Because you could have a 5.5% Tbill that requires 3 months until you get paid while Armageddon is happening.

 

[RiverDave]

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.

Well congratulations on the purchase!

 

[Orange Juice]

Yep it’s either another property or Treasuries for me here shortly

I’m buying more stocks, and started last month buying a few options, out in the 2024 zone. I’m going to need a little help buying my 2025 EV Charger, with the high performance battery package, when there’s no 3yr/0% financing option

I got enough overvalued, paid off property (House & Cabin). I got enough in t-bills rolling over to cover my taxes and insurance, when I need it. I also have a small “treasure“ of backup silver and gold Coins. I got guns, and I got bullets.

Yet I’m just a little nobody, to those that play the game. Just when you reach a milestone, you realize how Much more is out there to gain.

 

[Orange Juice]

Well congratulations on the purchase!

You need to start having free Saturday morning breakfasts, to catch the early worm….

 

[pronstar]

Lakefront properties are the hotness…

Listings for Lake Homes and Lots Jump Nearly $6 Billion Since Winter

Listings for Lake Homes and Lots Jump Nearly $6 Billion Since Winter

link.theepochtimes.com

 

[HNL2LHC]

There have been a few new listings that have popped up in Havasu the last 2 weeks that makes it look as if pricing has dropped a little…..…OR……..the realtors are fishing for multiple offers.

 

[2Driver]

Perhaps I'm missing something. Why would you pull out cash with a HELOC using the hypothetical ARM of 7% to purchase treasuries which pay around 5-5.5%? Paying 7% to make 5% does not seem very smart to me.

LOL, Mr Peabody, set the wayback machine to 2005

 

[2Driver]

Interest rate risk is the question.

Assuming the yield curve was flat and rates were the same for 1 month or 1 year, the risk question is do you want to lock that return for one year, one month or something in between.

If you believe rates are heading down, you would lock it for a year. If you thought rates were going up, you would only want the one month term to roll to the higher rates in a month.

I think I’m close to locking in 3-5 year notes. Anything maturing before 2 years will risk popping out into a lower interest rate environment IMO. If the slow down comes that Powell is pushing for, the rates will drop quick and I don’t want to be stuck with 3 months left to maturity while rates are dropping.

It’s like going up the 110 freeway and timing to need gas at the Rosecrans exit.

 

[bentprops]

Treasuries. Your financial advisor should have access to them. I think we were at 5.41 or something like that last week?

tressuries direct .com

 

[Havasu blue label]

I think I’m close to locking in 3-5 year notes. Anything maturing before 2 years will risk popping out into a lower interest rate environment IMO. If the slow down comes that Powell is pushing for, the rates will drop quick and I don’t want to be stuck with 3 months left to maturity while rates are dropping.

It’s like going up the 110 freeway and timing to need gas at the Rosecrans exit.

Rosecrans that’s a good one

 

[Orange Juice]

I think I’m close to locking in 3-5 year notes. Anything maturing before 2 years will risk popping out into a lower interest rate environment IMO. If the slow down comes that Powell is pushing for, the rates will drop quick and I don’t want to be stuck with 3 months left to maturity while rates are dropping.

It’s like going up the 110 freeway and timing to need gas at the Rosecrans exit.

I don’t think you’ll need to worry about rates going down. Everyone I know is working two jobs or a ton of overtime. There are not enough workers to get the basics done.

 

[nameisbond]

The near 7% interest rates are cooling Canada down. Toronto sales are down 7% year over year. Our American real estate seems to be holding up. We have three one-acre building lots for sale. Two developers want all three. Would have closed already but we have a legal issue with the boundary lines of the properties.

 

[THE WIDGE]

Conv rate limits increased in Mohave co to 726k this past year. Complete bs, I can get a jumbo at 6.35 but a conv lower priced home at 8. So basically a 850k house is same monthly as 1 mill putting 20% down. Definitely hurts that 650-900 price range.

 

[Orange Juice]

Anyone seeing any revised building codes for EV’s yet, outside of California?

New Building Code Standards Will Require Wiring for EVSE

Your next home will probably be able to charge your car. As electric vehicle sales soar, local governments require builders to include EVSE-ready infrastructure in their new builds. Updated U.S. building codes are about to change drastically as soon as early 2021. Quartz reports that homes that...

blinkcharging.com

 

[billt]

Chances are whatever the "experts" predict, the opposite will happen.

 

[2Driver]

Well we are back to 7 weeks supply of homes in the Phoenix area. Sustained high prices and 30 year fixed at 7%.

It isn’t where I would have predicted. I’m surprised so many people are willing to pull that nut with todays prices at 7%.

 

[attitude]

Well we are back to 7 weeks supply of homes in the Phoenix area. Sustained high prices and 30 year fixed at 7%.

It isn’t where I would have predicted. I’m surprised so many people are willing to pull that nut with todays prices at 7%.

View attachment 1250059

I’ve been manually tracking the greater Phoenix on Zillow, in the last two weeks the number of houses for sale has gone down by 400ish but the number of houses for rent has gone up about the same number. Also, on average there are about 50 more homes posted for sale a day than sold. Usually about 150-200 posted a day and about 100-150 sold.

 

[pronstar]

Well we are back to 7 weeks supply of homes in the Phoenix area. Sustained high prices and 30 year fixed at 7%.

It isn’t where I would have predicted. I’m surprised so many people are willing to pull that nut with todays prices at 7%.

View attachment 1250059

I think folks are betting on a refi when/if rates fall

 

[attitude]

I think folks are betting on a refi when/if rates fall

And/or buying with rate buy downs.

 

[LargeOrangeFont]

I think folks are betting on a refi when/if rates fall

This exactly.

 

[2Driver]

I think folks are betting on a refi when/if rates fall

The Fed has said they want the fed funds rate to normalize around 2.5% so it makes sense.

 

[BigQ]

Interesting article about the housing affordabiltiy and what would need to change. Also, talks some about the Airbnb affect, which apparently is small. One reason..."Zillow data shows that the inventory of existing homes for sale is about 50 percent less than it was pre-pandemic. New listings are down significantly this year." https://www.vox.com/technology/2023...pse-housing-shortage?utm_source=pocket-newtab

 

[LuauLounge]

History tends to repeat itself, so, in 2005, my CU had a HELOC at 4.2%, locked for 2 years. I took one out to pay off my 1st as the only cost was $50/yr. Rate was 2% lower. Then a few years later, we did a remodel and started drawing off the HELOC to finance it. Rates were headed up, so back to my CU and took out a fixed rate 2nd, again no fees or costs.
Fast forward to 2015, I get a call from the branch manager, letting me know that my draw period was up and it would revert to a 15 year loan or we could roll it into a new HELOC, again at no cost.
Best move I ever made was opening a HELOC, cheap quick money. Definitely not for someone who is trying to live above their means.

 

[Orange Juice]

I’m predicting the “Haves” will continue to drive home prices up.

 

[DC-88]

History tends to repeat itself, so, in 2005, my CU had a HELOC at 4.2%, locked for 2 years. I took one out to pay off my 1st as the only cost was $50/yr. Rate was 2% lower. Then a few years later, we did a remodel and started drawing off the HELOC to finance it. Rates were headed up, so back to my CU and took out a fixed rate 2nd, again no fees or costs.
Fast forward to 2015, I get a call from the branch manager, letting me know that my draw period was up and it would revert to a 15 year loan or we could roll it into a new HELOC, again at no cost.
Best move I ever made was opening a HELOC, cheap quick money. Definitely not for someone who is trying to live above their means.

I had a heloc through Schwab from 2010 to 20 at prime minus 1% . Used it to build a steady string of spec houses with no const loans for 10 years. It saved so many fees and a ton of time not doing const. loans which are time sensitive, lots of paperwork and bank inspections, and a rip off in general. Average cost to borrow was close to only 4-5k per job with the rates as low as they were.

 

[hallett21]

Take it for what it’s worth coming from Google

 

[hallett21]

Another one

 

[530RL]

If home prices remain flat and inflation is 4 or 6 percent, housing prices in real terms went down 4 or 6 percent.

Houses are getting cheaper in real terms right now, and if inflation comes back down to 2 percent or so, an increase in real pricing is something to consider.

 

[zhandfull]

History tends to repeat itself, so, in 2005, my CU had a HELOC at 4.2%, locked for 2 years. I took one out to pay off my 1st as the only cost was $50/yr. Rate was 2% lower. Then a few years later, we did a remodel and started drawing off the HELOC to finance it. Rates were headed up, so back to my CU and took out a fixed rate 2nd, again no fees or costs.
Fast forward to 2015, I get a call from the branch manager, letting me know that my draw period was up and it would revert to a 15 year loan or we could roll it into a new HELOC, again at no cost.
Best move I ever made was opening a HELOC, cheap quick money. Definitely not for someone who is trying to live above their means.

If you’re okay with credit union rates - can’t beat the cost of borrowing money from them.

 

[hallett21]

I know we were doing these comparisons in reverse about a year ago. But it’s interesting to look at if a home today sells at an almost 8% mortgage vs. a 6% mortgage in the future.

 

[530RL]

High Rates, Low Supply: Home Prices Skyrocket To Unimaginable Peaks As U.S. Home Owners Stop Selling Out Of Fear Of Higher Mortgage Rates

The housing market has grown exponentially since the COVID-19 pandemic, with owner-occupied housing wealth rising to $9 trillion from the first quarter of 2020 to the first quarter of 2022, according to the Federal Reserve. The rising demand, resulting from ultra-low interest rates and limited...

www.yahoo.com

US existing home sales fall; annual house price decline slows

U.S. existing home sales dropped to a five month-low in June, depressed by a chronic shortage of houses on the market that slowed the pace of decline in annual house prices. Existing home sales fell 3.3% in June to a seasonally adjusted annual rate of 4.16 million units, the lowest level since...

www.yahoo.com

 

[regor]

The total amount of corporate debt defaults in the United States this year has already exceeded the amount seen in 2022.

Just like the economy, the housing market is a mirage.


Take the money printer away and it all crumbles.

 

[Runs2rch]

The total amount of corporate debt defaults in the United States this year has already exceeded the amount seen in 2022.

Just like the economy, the housing market is a mirage.


Take the money printer away and it all crumbles.

Exactly all propped up.