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

[Havasu blue label]

It’s called buying the listing the tell the owners we can get this sign here then we drop the price the make there money

 

[LargeOrangeFont]

What’s up with realtors posting houses and immediately dropping the price? Is there a tactic here? I’ve noticed multiple houses being dropped less than a week after being posted. One house has been dropped twice in a week, and no it’s not over priced, it’s now the cheapest house in the neighborhood.

It’s a sales tactic pure and simple. Asking price is not market price.

That was true 6 months ago, and it is true today. 6 months ago the tactic was to price low to start a bidding war, today it’s price over market and discount it to market because the market is changing so fast and hoping a buyer is not aware.

 

[c_land]

I just finished listening to an interview with Ivy Zelman this morning. Her firm describes themselves as the preeminent boutique research firm in the housing sector. Ivy Called the top in 06 and the bottom in 2012. Here are my notes

• Where are we in the cycle?
  • Housing has peaked, new home/existing sales, deceleration is demand driven.
  • Market is rapidly deteriorating. Impact of surge in rates.
  • Continuation and more rapid in any period due to the information flow that is available now.
• Is affordability as terrible as it sounds
  • Monthly payment up 50% YOY. Seen a big surge in number of cancellations, and cancellations part of builder scrubbing backlog. Cancellations rates usually between 15-20%, 5% in last 6 months, now at 34% for western states in the last 3 weeks as an average.
  • Significant changes in cancellation rates.
  • Builders in phoenix metro saying cancellation rates at 45%, Orlando at 55%.
• Have we ever seen numbers this high?
  • Yes, during GFC. A lot of the backlog in new homes is spec builds that they were hoping to go into contract at a higher price to capture the difference in material costs during the build
  • Backlog is highest levels since 2006, mostly spec builds that are not yet completed.
• Is supply distorted because of the speculation? With rent spiking, supply number is distorted by speculation NOO,STR, ETC.
  • Q1 cash purchases up 46%, Q4 up 43% YOY
  • Looked through public records and CoreLogic, non-primary buyers are 24% of transactions.
  • Was running 19% pre-covid.
  • The capital follows other capital
  • Private investors speculating are cancelling as well,
  • Listings in phoenix in the last 15 weeks up 220%
    • Adding 1000 new listings a week from the deep pocket investors that are acting as they are distressed.
    • Costs of owning these properties have gone up and they don’t want to own as much
  • Weak and seasonal worse demand
• Speed and severity of rate of change is shocking. Hitting record rate of change on metrics. Consumers have access to a data stream that is moving the market at a rapid pace.
• I buyers are the biggest sellers in the marker right now. Shocking how fast I buyers and private investors are trying to exit.
• 
  
• Do you think more STR will try and head for the exits soon? (Jackson)
  • Yes, and we are trying to get ahead of what’s happening
  • Local buyers have been shut out by STR.
  • No local labor for these STR hotspot
  • Todays buyers cannot afford the homes on the incomes these areas support.
  • Pricing is headed lower
• Nationally, we are looking for 5% declines in 2023.
  • Regional markets are looking at more severe double digit declines.
  • Expect more rush for the exits
  • Skin in the game is different than GFC, but that will only somewhat mitigate a downturn
• Logan Motashami, discusses a savagely unhealthy market, says inventory doesn’t support declines. Thoughts?
  • Look at inventory as a ratio
  • Inventory as a percent of households low, but the increase by end of year will put us near trendline
  • Velocity is important, end of month how many are for sale, how much of inventory is sold at end of month. 20% historically.
  • 60% in middle of last 2 years, demand was off the charts
  • You need to look at what demand is doing.
  • Inventory is rising, but demand surge was so overwhelming that it changed inventory
  • Supply is now changing so rapidly because demand is changing so rapidly.
• Do you think shadow inventory from delayed foreclosures is a concern?
  • Anyone that purchased from end of 21 to now may be underwater if used an FHA loan
  • Eviction filings so far below normal, if that normalizes where are investors going to find the tenants
  • Complacency in the rental market, reality people that are selling are cashing out to go rent
    • Our view is that backlog and pressure brewing because of investors rushing to the exits.
  • Our projections do not include
  • Anything that goes up in a parabolic
  • More normalized levels and builders think it will just stop at 2019 levels.
  • Housing is more balanced if we exclude backlog, but the market thinks there is a massive deficit.
    • Demographics don’t support the amount we are building without speculation
• Boise home price appreciation is north or 70%, influx of coastal buyers. Local builders there are saying that those people are being asked to return to work.
  • Builders having to cut price, the worse thing that a builder can do because it impacts backlog.
  • Consumer that signed a contract for a higher price looking at a price cut after the fact, cancel
  • Those that signed in the last 6 months aren’t seeing that amount of paper equity.
  • Builder credits to mortgage rates don’t stimulate demand.
  • Consumers now realizing that market has shifted act as a turning a large container ship, it acts the same trying to turn the way back positiv
• Quarterly Land Development survey
  • Lot/land inflation is up 28% Q/Q 21/22
  • Builders now pulling back and underwriting lower margins with land prices
  • Assuming that the market stays the way it is
  • No question that new entrants to the builder space are appreciating the risk in paying up for the land prices
• On Build for rent
  • Building too much in the tertiary markets
  • 20% in phoenix new supply is speculative build for rent
  • These leases are priced higher than buyer.
  • What happens when gas prices spike and they need to commute to the City?
• Canadian analyst in Canada:
  • Surrounding Toronto, peak was February 2022
  • Seen jurisdictions around Toronto prices down $500,000 to date (33%)
  • 5,000 units been shelved by builders so far
  • Influx if foreign buyers have been keeping a floor on prices
  • Prices have plummeted, so the numbers don’t work
• Ivy, are you seeing any foreign capital inflow to US cities?
  • We ask brokers in our survey about foreign demand, we haven’t seen any spikes.
  • Still about 2014 levels.
• Ivy On multifamily
  • Input cost inflation is so inflationary that a lot of deals don’t pencil now
  • Backlog cited in multifamily, is highest since 1970
  • Backlog for us means they broke ground, once they break ground those deals are getting completed
  • By 23/24 we will still see Multifamily coming online that will pressure lease prices
  • Cap rates are expanding, but we are finally in price discovery mode
  • When there was 20 bidders for projects, now there is crickets.
• Builder on the call comments:
  • Builder in Texas has 300 under construction
  • Threw the kitchen sink at their incentives outside of prices dropping
  • Sold a net of 15
  • No incentive has meaningfully created additional sales
  • Consumers are not responding, and builders aren’t feeling confident
    • Ivy responds
      • Incentives may stimulate demand in other markets
      • Austin phoenix, Boise are turning markets right now.
      • Where it is working it probably wont last
      • Abortions should be 1 sale per week for price appreciation
        • Those peaked and went above GFC rates
        • 60% of builders were limiting sales, that’s now down to 20%
      • Incredible amount of pressure on absorptions, last Wednesday was .4 per week
        • Anything below 1 there is no pricing power
        • Some of the builders are seeing low absorptions not seen since the GFC
• Do you think this round of pain is different than GFC on the other side?
  • Builders wrote off 50% in the GFC
  • Land Options compared to GFC are the same levels today
    • Smaller projects though
  • Expecting 5-6% write off, in the range of the 1991 cycle.
    • However, we expected 20% in the GFC period and were wrong

They posted this interview up on YouTube if anyone would like to listen. It’s a good one.

She starts at the Seven minute mark to 1:45:00 in the video

 

[bentprops]

YES and that's why real estate is important in the macro view of the economy at large. The NAHB estimates the the housing and RE sectors accounts for ~15% of GDP. It's also highly dependent on credit availability and cost.

From what I listened to this morning there are a significant number (i think she said 50+%) of homeowners now financed at a rate lower than 4%.

How many people took some money out and remodeled a kitchen, bought a new car, put in a pool? How many refied and are saving a significant amount per month and have been spending that in the economy elsewhere?

Then there are existing home sales and the impact to GDP those represent. Professional services involved in the transaction, new home furnishings, etc.

Then new home sales. Builders purchasing land, employing contractors, contractors employing labor, lenders, bank earnings on loans, etc.

So then go back to that 50% of homeowners at a rate under 4%. Those people are uninterested in refinancing at a higher rate, and they are uninterested in moving to a new expensive house at a higher rate. All the spending activities associated with the housing sector summarized above slow or stop.

With rising rates, that 15% GDP tailwind that housing represents turns into a headwind. That's why it's said that housing is a key transmission mechanism of fed policy.

Sounds like 2008.

 

[LargeOrangeFont]

Sounds like 2008.

I don’t think that sounds like 2008 at all?

How were 50% of homes financed below 4% before 2008 and homeowners were disincentivized to move? The complete opposite was true in 2008. Rates were rising on ARMs for a large swath of the population, Those people had no equity, made no down payment, and were paying interest only. They had no reason to stay in their house.

The only thing that sounds like 2008 is the construction and related jobs being impacted.

 

[regor]

The index of builder sentiment finally gave way and plunged to 55 in July from 67 last month, seventh straight monthly decline and lowest since May 2020.



Source: Bloomberg

The 12 point drop is the biggest in the 30-year history of the survey outside of the COVID-Lockdown plunge in 2020.

"Production bottlenecks, rising home building costs and high inflation are causing many builders to halt construction because the cost of land, construction and financing exceeds the market value of the home," said NAHB Chairman Jerry Konter

All three components plunged

• Measure of present single family sales fell to 64 vs 76
• Future single family sales gauge fell to 50 vs 61
• Prospective buyers traffic measure fell to 37 vs 48

Those prices @hallett21 posted are freaking insane!!!!!

I'm no swami, but something tells me they're hedge funds continuing to corner the rent market. Wages are no where CLOSE to tracking with inflation and when the middle class is forced out of the market, nothing good can come from it.

 

[Done-it-again]

People eating at nice restaurants where it costs 350-450 for 4 typically go there for special events, business dinners or they are smart money folks enjoying their smart money investment rewards. I HIGHLY DOUBT 95% of the people there eat there once or twice a week, and if they do I can bet inflation, recession, etc does not really effect them nor does the housing market sales and value decline.

Who eats at the same restaurant 2x a week? I don't , but I like change.

Doesn't matter who was eating, the place was busy for the price of a meal..... On a Sunday, didn't see many "business" meetings. But had a few large groups, 15 or so people.... Most were party's of 2-4. There was one party of 3, a large guy with 2 "paid" ladies....

To me, places like this will see a decline in eating with what you say that is special events mostly vs Chilies.

 

[MSum661]

The index of builder sentiment finally gave way and plunged to 55 in July from 67 last month, seventh straight monthly decline and lowest since May 2020.



Source: Bloomberg

The 12 point drop is the biggest in the 30-year history of the survey outside of the COVID-Lockdown plunge in 2020.


All three components plunged

• Measure of present single family sales fell to 64 vs 76
• Future single family sales gauge fell to 50 vs 61
• Prospective buyers traffic measure fell to 37 vs 48

Those prices @hallett21 posted are freaking insane!!!!!

I'm no swami, but something tells me they're hedge funds continuing to corner the rent market. Wages are no where CLOSE to tracking with inflation and when the middle class is forced out of the market, nothing good can come from it.

Hedge funds are setting up derivatives and are sellers. Larger spread in shorting the selloff than holding out for rental income.
The larger the percentage drop...the more the returns.
The rest of the crowd is locked in at 3+% mortgage rates and will go on with their lives.

 

[c_land]

Sounds like 2008.

In some ways yes in other ways no.

The systemic risk to banks that kicked off the GFC isn’t there. The loans being packaged and traded today are mostly good quality or owned by the taxpayers.

But certain things are looking similar.

https://twitter.com/i/web/status/1549035645351276544

 

[LargeOrangeFont]

Who eats at the same restaurant 2x a week? I don't , but I like change.

Doesn't matter who was eating, the place was busy for the price of a meal..... On a Sunday, didn't see many "business" meetings. But had a few large groups, 15 or so people.... Most were party's of 2-4. There was one party of 3, a large guy with 2 "paid" ladies....

To me, places like this will see a decline in eating with what you say that is special events mostly vs Chilies.

The large guy with the paid laidies was yore smart money.

 

[PaPaG]

Who eats at the same restaurant 2x a week? I don't , but I like change.

Doesn't matter who was eating, the place was busy for the price of a meal..... On a Sunday, didn't see many "business" meetings. But had a few large groups, 15 or so people.... Most were party's of 2-4. There was one party of 3, a large guy with 2 "paid" ladies....

To me, places like this will see a decline in eating with what you say that is special events mostly vs Chilies.

We used to eat out once a week at the same steakhouse every single week but since I bought our 1/2 cow we are eating there less. My point is that higher end restaurants do not typically show a slow down aligned with market trend in real estate. The people with that kind of expendable cash spend it either way so its not a good gauge with what is going on in the housing market nor the stock market. Now look at the housing reports, interest rates, fuel prices, real estate sales and pricing data, now you have a good gauge of what is trending..

 

[PaPaG]

The index of builder sentiment finally gave way and plunged to 55 in July from 67 last month, seventh straight monthly decline and lowest since May 2020.



Source: Bloomberg

The 12 point drop is the biggest in the 30-year history of the survey outside of the COVID-Lockdown plunge in 2020.


All three components plunged

• Measure of present single family sales fell to 64 vs 76
• Future single family sales gauge fell to 50 vs 61
• Prospective buyers traffic measure fell to 37 vs 48

Those prices @hallett21 posted are freaking insane!!!!!

I'm no swami, but something tells me they're hedge funds continuing to corner the rent market. Wages are no where CLOSE to tracking with inflation and when the middle class is forced out of the market, nothing good can come from it.

EXACTLY!, no matter what facts come up there will be the typical Naysayers that refuse to accept facts.

 

[Dan Lorenze]

I bought my first house 21816 Dumetz for $206k in 1993, wish I still had it.

Great area..

 

[Done-it-again]

We used to eat out once a week at the same steakhouse every single week but since I bought our 1/2 cow we are eating there less. My point is that higher end restaurants do not typically show a slow down aligned with market trend in real estate. The people with that kind of expendable cash spend it either way so its not a good gauge with what is going on in the housing market nor the stock market. Now look at the housing reports, interest rates, fuel prices, real estate sales and pricing data, now you have a good gauge of what is trending..

I'll be honest, I'm not that smart of a guy... But what did you think was going to happen to houses when rates increased? Just what it's doing now....The last 5+ yrs was a ride on the housing side that wasn't normal with very low rates... With increased rates it's more of the "standard" housing market..... You cant take the last years and say that was normal and compare to the current trend....

I do work in the industrial laundry market. This goes to uniforms that people wear at your body shops/mfg facilities and linens for hotels/restaurant. These company's are busy and upgrading equipment etc. This represents a large area of business that employs working people, so what happens when work slows for them? typically the business shuts down their uniform program to help save costs.... (hotels/restaurants not so much for obvious reasons) . We are not seeing that at this time. So I find it hard to say we are in doomed scenario just because of housing slowed to a more "standard trend". I'm not saying we wont see a 20% decrees in housing, but again that was from an inflated non normal market.

 

[LargeOrangeFont]

I'll be honest, I'm not that smart of a guy... But what did you think was going to happen to houses when rates increased? Just what it's doing now....The last 5+ yrs was a ride on the housing side that wasn't normal with very low rates... With increased rates it's more of the "standard" housing market..... You cant take the last years and say that was normal and compare to the current trend....

I do work in the industrial laundry market. This goes to uniforms that people wear at your body shops/mfg facilities and linens for hotels/restaurant. These company's are busy and upgrading equipment etc. This represents a large area of business that employs working people, so what happens when work slows for them? typically the business shuts down their uniform program to help save costs.... (hotels/restaurants not so much for obvious reasons) . We are not seeing that at this time. So I find it hard to say we are in doomed scenario just because of housing slowed to a more "standard trend". I'm not saying we wont see a 20% decrees in housing, but again that was from an inflated non normal market.

Agreed X1000. A return to normal market conditions is a downturn off peaks, yes. I can't find anyone that is denying that the market is changing and prices will drop. It is not a collapse of the housing market.

 

[OldSchoolBoats]

I'll be honest, I'm not that smart of a guy... But what did you think was going to happen to houses when rates increased? Just what it's doing now....The last 5+ yrs was a ride on the housing side that wasn't normal with very low rates... With increased rates it's more of the "standard" housing market..... You cant take the last years and say that was normal and compare to the current trend....

I do work in the industrial laundry market. This goes to uniforms that people wear at your body shops/mfg facilities and linens for hotels/restaurant. These company's are busy and upgrading equipment etc. This represents a large area of business that employs working people, so what happens when work slows for them? typically the business shuts down their uniform program to help save costs.... (hotels/restaurants not so much for obvious reasons) . We are not seeing that at this time. So I find it hard to say we are in doomed scenario just because of housing slowed to a more "standard trend". I'm not saying we wont see a 20% decrees in housing, but again that was from an inflated non normal market.

You can't start talking facts with the doom and gloomers. They made their mind up already.

 

[Havasu blue label]

What is normal uniforms I did away with that 20 years ago print shirts and orange vest

 

[Havasu blue label]

I have to agree there is a market out there but in selective areas my comments has to do with havasu

 

[HNL2LHC]

I'll be honest, I'm not that smart of a guy... But what did you think was going to happen to houses when rates increased? Just what it's doing now....The last 5+ yrs was a ride on the housing side that wasn't normal with very low rates... With increased rates it's more of the "standard" housing market..... You cant take the last years and say that was normal and compare to the current trend....

I do work in the industrial laundry market. This goes to uniforms that people wear at your body shops/mfg facilities and linens for hotels/restaurant. These company's are busy and upgrading equipment etc. This represents a large area of business that employs working people, so what happens when work slows for them? typically the business shuts down their uniform program to help save costs.... (hotels/restaurants not so much for obvious reasons) . We are not seeing that at this time. So I find it hard to say we are in doomed scenario just because of housing slowed to a more "standard trend". I'm not saying we wont see a 20% decrees in housing, but again that was from an inflated non normal market.

Those laundry businesses have the $$$$ to blow because of the money they make from the meth lab under their facility. At lease that is what Hank and Gomez told me during a ride along. :looking:

 

[shintoooo]

Those laundry businesses have the $$$$ to blow because of the money they make from the meth lab under their facility. At lease that is what Hank and Gomez told me during a ride along. :looking:

 

[hallett21]

The index of builder sentiment finally gave way and plunged to 55 in July from 67 last month, seventh straight monthly decline and lowest since May 2020.



Source: Bloomberg

The 12 point drop is the biggest in the 30-year history of the survey outside of the COVID-Lockdown plunge in 2020.


All three components plunged

• Measure of present single family sales fell to 64 vs 76
• Future single family sales gauge fell to 50 vs 61
• Prospective buyers traffic measure fell to 37 vs 48

Those prices @hallett21 posted are freaking insane!!!!!

I'm no swami, but something tells me they're hedge funds continuing to corner the rent market. Wages are no where CLOSE to tracking with inflation and when the middle class is forced out of the market, nothing good can come from it.

So with new builds slowing down I gotta imagine that props up existing homes.

Idk how anyone is building a quality home for under $350-400ft today. Quality would include solid doors and not one GFI to cover the entire home.

The rents are out of control. In the areas I posted an ADU (350-700sq ft) will fetch 2-3k a month.

 

[530RL]

So with new builds slowing down I gotta imagine that props up existing homes.

Idk how anyone is building a quality home for under $350-400ft today. Quality would include solid doors and not one GFI to cover the entire home.

The rents are out of control. In the areas I posted an ADU (350-700sq ft) will fetch 2-3k a month.

We have cut back on starts financed in Metro Reno and in Metro Phoenix. It has nothing to do with sales but with labor availability. It's not worth it to try to push any faster as the mistakes outweigh the costs. So you do a little less with higher margins. Same total profit, just on lower volume.

Combine that with the cost of improving lots and buying water, and it makes no sense to keep going at the old pace using up scarce land, lot improvements and water. Just walk down the hill as opposed to charging down the hill as the old saying goes.

We have a 340 lot project we financed just outside Yorba Linda in the County and we are in no rush on that. Why sell it? It just keeps going up in price as the available entitled lots would take a decade to reproduce given all the anti-building sentiment by those that already have their houses.

 

[Done-it-again]

Those laundry businesses have the $$$$ to blow because of the money they make from the meth lab under their facility. At lease that is what Hank and Gomez told me during a ride along. :looking:

I haven't found any "underground" rooms myself. I'll be in Albuquerque in September checking out a place.....Perhaps its the one?

 

[Done-it-again]

What is normal uniforms I did away with that 20 years ago print shirts and orange vest

Depends if they are field guys or shop guys......Shop guys usually do.

We don't!.... I always say we cant, as we work with a lot and cant show favoritism... It's an excuse.

 

[Bobby V]

We have a 340 lot project we financed just outside Yorba Linda in the County and we are in no rush on that. Why sell it? It just keeps going up in price as the available entitled lots would take a decade to reproduce given all the anti-building sentiment by those that already have their houses.

Is that the Esperanza Project in YL that nobody wants.

 

[Havasu blue label]

Mr all stars

 

[530RL]

Is that the Esperanza Project in YL that nobody wants.

That's what everyone said about Cielo Vista..........

 

[Bobby V]

That's what everyone said about Cielo Vista..........

The big concern from the anti Esperanza development is due to the fire YL had about 10 years ago and how the streets were packed with people trying to get out of the homes in the hills. One of the projects has one way in and out using Stonehaven. Not sure if it is your project.

 

[zhandfull]

Most had 3.5% and lower mortgages, others had paid cash and a few renters.

All were having a great time, as they should be.

Anyone have their car or truck repossessed while they were eating dinner?

 

[Done-it-again]

Anyone have their car or truck repossessed while they were eating dinner?

Damn valet took everyone's car......

 

[2FORCEFULL]

What part of Vegas

2965 Juniper Hills Blvd UNIT 203, Las Vegas, NV 89142 | Zillow

2965 Juniper Hills Blvd Unit 203, Las Vegas NV, is a Condo home that contains 889 sq ft and was built in 1987.It contains 2 bedrooms and 2 bathrooms.This home last sold for $160,000 in July 2022. The Zestimate for this Condo is $185,600, which has increased by $3,065 in the last 30 days.The...

www.zillow.com

 

[Havasu blue label]

Nice hit

 

[DRYHEAT]

Should I still be holding onto my hat?

 

[PaPaG]

I'll be honest, I'm not that smart of a guy... But what did you think was going to happen to houses when rates increased? Just what it's doing now....The last 5+ yrs was a ride on the housing side that wasn't normal with very low rates... With increased rates it's more of the "standard" housing market..... You cant take the last years and say that was normal and compare to the current trend....

I do work in the industrial laundry market. This goes to uniforms that people wear at your body shops/mfg facilities and linens for hotels/restaurant. These company's are busy and upgrading equipment etc. This represents a large area of business that employs working people, so what happens when work slows for them? typically the business shuts down their uniform program to help save costs.... (hotels/restaurants not so much for obvious reasons) . We are not seeing that at this time. So I find it hard to say we are in doomed scenario just because of housing slowed to a more "standard trend". I'm not saying we wont see a 20% decrees in housing, but again that was from an inflated non normal market.

The investment market say this time around jobs numbers are not a great gauge as it usually is in a downturn due to the fact that since covid eased up so many able body workers decided to not work. The US has 32% of the able body work force not wanting to go to work right now so labor numbers will be stronger. That said, firms are starting to lay off, a lot have stopped hiring as well and more to follow the trend is heading towards it being an employers market again vs employees. The main point of this thread was not doom and gloom but facts that the prices of housing is going to drop and big...in my opinion 20% is big, so if a house in Havasu or Vegas was selling for 800k and the prices drop 20% (160k drop) that is big in my eyes. Not doom and gloom, doom and gloom in my eyes would be 30-40% + and I highly doubt we will see that much of a drop at least I hope not. With interest rates rising, housing starts and sales always slow and most of all prices come down to compensate for the increased rates and over inflated pricing adjusts, again part of the hold onto your hats warning.

 

[PaPaG]

Agreed X1000. A return to normal market conditions is a downturn off peaks, yes. I can't find anyone that is denying that the market is changing and prices will drop. It is not a collapse of the housing market.

Never said it was a collapse of the housing market but to hold onto your hats...$$ will be lost and prices will correct...point of thread....

 

[Dalton]

2965 Juniper Hills Blvd UNIT 203, Las Vegas, NV 89142 | Zillow

2965 Juniper Hills Blvd Unit 203, Las Vegas NV, is a Condo home that contains 889 sq ft and was built in 1987.It contains 2 bedrooms and 2 bathrooms.This home last sold for $160,000 in July 2022. The Zestimate for this Condo is $185,600, which has increased by $3,065 in the last 30 days.The...

www.zillow.com

This would rent for 500-1k I imagine:

3056 Jennie Ln, Lake Havasu City, AZ 86404 | Zillow

3056 Jennie Ln, Lake Havasu City AZ, is a Mobile / Manufactured home that contains 552 sq ft and was built in 1970.It contains 1 bedroom and 1 bathroom.This home last sold for $99,900 in August 2022. The Zestimate for this Mobile / Manufactured is $127,700, which has increased by $1,803 in the...

www.zillow.com

 

[LargeOrangeFont]

Never said it was a collapse of the housing market but to hold onto your hats...$$ will be lost and prices will correct...point of thread....

Seems that we agree then. Look at that

By the way I read in this thread that was fake equity anyway by self proclaimed experts.

Also prognostications of 2008 or worse.

 

[bentprops]

In some ways yes in other ways no.

The systemic risk to banks that kicked off the GFC isn’t there. The loans being packaged and traded today are mostly good quality or owned by the taxpayers.

But certain things are looking similar.

https://twitter.com/i/web/status/1549035645351276544

I was referring to the cash out refi to buy liabilities, Thats what tipped me off to liquidate in 2005.

 

[bentprops]

I don’t think that sounds like 2008 at all?

How were 50% of homes financed below 4% before 2008 and homeowners were disincentivized to move? The complete opposite was true in 2008. Rates were rising on ARMs for a large swath of the population, Those people had no equity, made no down payment, and were paying interest only. They had no reason to stay in their house.

The only thing that sounds like 2008 is the construction and related jobs being impacted.

Yes and that was what i was refering to, Thats what tipped me off to liquidate in 2005. If housing is 15% of GDP, than add cars trucks boats rv trailers vacations ect ect, it could be 30%

 

[OldSchoolBoats]

I was referring to the cash out refi to buy liabilities, Thats what tipped me off to liquidate in 2005.

A lot of the people who cashed out this time around actually had their monthly payments drop. Also, 80% LTV is max for cash out. No 100% cash out loans with stated income and 550 FICO scores.

 

[Done-it-again]

The investment market say this time around jobs numbers are not a great gauge as it usually is in a downturn due to the fact that since covid eased up so many able body workers decided to not work. The US has 32% of the able body work force not wanting to go to work right now so labor numbers will be stronger. That said, firms are starting to lay off, a lot have stopped hiring as well and more to follow the trend is heading towards it being an employers market again vs employees. The main point of this thread was not doom and gloom but facts that the prices of housing is going to drop and big...in my opinion 20% is big, so if a house in Havasu or Vegas was selling for 800k and the prices drop 20% (160k drop) that is big in my eyes. Not doom and gloom, doom and gloom in my eyes would be 30-40% + and I highly doubt we will see that much of a drop at least I hope not. With interest rates rising, housing starts and sales always slow and most of all prices come down to compensate for the increased rates and over inflated pricing adjusts, again part of the hold onto your hats warning.

No one is going to go to work when the gov (local and fed) are handing out money..... This is also how you make a socialist country, to which I believe the current prez is trying to do.... As for large firms laying off, I don't doubt that. They have hired soooo many people the last couple of years to keep up with demand at pay rates that supersede that position. These company's also remember the down turn and no company is going to keep people on payroll as long as they did before. So you layoff the extra staff that were hired a few years ago at in inflated rate. These same company's will be able to hire back later at a lower pay scale for the same job... This is what I believe you are seeing with layoffs.

As for housing.... 20% down from the inflated pricing is not that big of an issue. If you are talking 20% down before COVID then we are talking, but I still believe the 20% down from the peak is different scenario, and more on the lines of a housing correction.

 

[CLdrinker]

Well wife and I both got good news yesterday.

Crash baby crash!

 

[hallett21]

L

Well wife and I both got good news yesterday.

Crash baby crash!

lol Do explain

 

[Havasu blue label]

Why would you cash out pull equity lower payment then create a boat payment maybe buy a home in havasu shit maybe start a business. Not my kind of wealth

 

[LargeOrangeFont]

Why would you cash out pull equity lower payment then create a boat payment maybe buy a home in havasu shit maybe start a business. Not my kind of wealth

We all can't be the smart money .

Who said there was a boat payment? Why is buying investment property bad? This is America, if you want to start a business, start one. You weren't going to get cheaper financing than your rent controlled home at a fixed payment for 30 years at under 4%.

 

[CLdrinker]

L

lol Do explain

We both got raises enough to pay 1/2 a mortgage.
Before yesterday we were thinking of buying a 200-250k rental or second house in the next few years probably Missouri. After yesterday it’s easily doable.

 

[hallett21]

Congrats!!!

We both got raises enough to pay 1/2 a mortgage.
Before yesterday we were thinking of buying a 200-250k rental or second house in the next few years probably Missouri. After yesterday it’s easily doable.

 

[Havasu blue label]

I don’t use my home as a savings account

 

[Havasu blue label]

Nice save that extra money for 6 months

 

[Badchoices03]

I don’t use my home as a savings account

This is what I don't get, before 2020 I had a little equity in my house, in todays market I have quite a bit more equity...people are telling me I am going to be losing $$$ when the market changes....I don't see it that way, I like my house, I like where I live, I see myself here for many more years.....I just may be part of the dumb money crew...I dont know???