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

[monkeyswrench]

"Prescott is Open"

But not the redneck side of the valley...Prescott Valley has been closed due to a rattle snake and scorpion infestation. Damn shame really, but best steer clear for your own safety!

 

[Flatsix66]

Nothing for sale in Prescott.


View attachment 1129677

Glad we bought land in Williamson Valley a few years ago. Cant wait to build our retirement ranch in a few years if the building industry comes to grip.

 

[pixrthis]

BIL is a pretty successful realtor and told me his open house yesterday didn’t have one person walk thru, he said he received a bunch of texts from other realtors experiencing the same thing. Not long ago he’d have at least a couple offers the first couple days.

 

[RVR SWPR]

My entire point in the last couple weeks in these type threads is this-

We are truly in uncharted economic times. In my lifetime, I’ve seen the economy up and down, hi and low numerous times. In none of those, had the Government set these cycles in motion 100% with the intention of destroying the petro-economy. 100% of everything we touch, drive, wear, eat, clean with, including medicine. Is now and will continue to be effected by these fuel prices.

The long term, down range effects are not known and cannot be predicted, we’ve never been here.

So how can anyone have one single accurate assessment of what to invest in or where the housing market will go?

We’ve never had to complete for survival with the very folks who have their fingers on the economic thermostat.

Food shortages?
Building materials?
Gas lines?
Runs on the Banks?
Gun confiscation?
Property Confiscation?

What effect will 5-6 million illegals have? They all get phones and credit cards. What effect will that have?

What happens when they get amnesty? What happens when they vote?

These people are insidious and we, rank-and-file Americans mean nothing.

We are but widgets to be controlled. We are used for political divisions, we are used as a means to their ends.

And anyone thinks they can predict financial futures when THEY have changed the rules. Historically predictive data means nothing.

. /

 

[Fastdadtsmith]

BIL is a pretty successful realtor and told me his open house yesterday didn’t have one person walk thru, he said he received a bunch of texts from other realtors experiencing the same thing. Not long ago he’d have at least a couple offers the first couple days.

What area? My SIL and BIL are realtors in Coeur d'alene area and say they are still very busy. Haven't asked the specific question though of how many show up at an open house, or if she's even had one. But driving around Havasu seems to have alot more inventory than in recent future.

 

[pixrthis]

What area? My SIL and BIL are realtors in Coeur d'alene area and say they are still very busy. Haven't asked the specific question though of how many show up at an open house, or if she's even had one. But driving around Havasu seems to have alot more inventory than in recent future.

Probably Acton or Agua Dulce, could of been Santa Clarita or Antelope Valley.

 

[Vib]

As just another dumb ex finance/hedge fund guy who also rode the dot com wave with some pure play startups and has been doing commercial real estate brokerage and development since 2007. My education is finance and post grad CFA.

The best guess to weather the current storm and make some money seems to be income producing raw land i.e. farmland, rv park etc. This used to be the basis behind storage units and car washes, but they have become too capital intensive.

Time will tell, but I believe in it enough to have moved from Denver to Utah and invested over $1m plus time and energy into taking the bet.

If I did want to subdivide the rv sites now. We have standing offers that would put the total sale price just over $10.5m.

However, quick money is not the plan here. Its a lifestyle as well. Knowing we probably made the right choice and are sitting on a large gain does help me sleep at night though

 

[c_land]

Interesting that the viability of the current real estate market depends on new entrants coming in at ever higher prices. If only there was such a term to describe such an arrangement…

 

[c_land]

My realtor sends me weekly market data. Far outlying areas outside the Phx metro area where mass developments are going in are eroding very fast.

Buckeye had a 376% increase in supply from this time last year. In the next 2 weeks Buckeye and Queen Creek will have more supply than buyers ie buyers market.

I remember Corey used to post stats from the MLS about what normal inventory looked like. I recall. Something about my 12,000 in the Phoenix metro was normal.

Phoenix may be at 2018 inventory in a couple of weeks.

Look at the spacing of those last few dots on the 2022 line

 

[2Driver]

Run don’t walk to the nearest exit.

 

[Wheeler]

Those people are insane. A 50-60% price reduction and you’d still have to ask how the local economy supports the pricing.

Calpers?

 

[Havasu blue label]

It’s coming

 

[Wheeler]

It’s coming

When will it arrive? I'm holding out 'till the peak of the market!

 

[monkeyswrench]

Calpers?

Pers, Sters and whatever LEO and Fire have. That is truly what supports the RE market on that side of town. They surely aren't the only buyers now, but 5-10 years ago they made up the lion's share.

5-10 years back, my side of town were mostly early "refugees"...not the high dollar types. As the Prescott market priced people out though, a lot of that market started heading our way. Some giant homes and shops were built, and some still going up. Now, my area has a mix of double wides and million dollar homes...pretty bizarre.

 

[zhandfull]

Ran my utility bill averages the other day. Pretty sure they have nearly doubled in last 4 or 5 years and not from extra usage.

My small mortgage payment would be half of what my new neighbors pay if they have a mortgage.

Maintaining and insuring three paid off cars is approaching $600 a month. Gas has almost doubled in last two years.

No baller but make a decent living. Disposable income nearly non existent today. If not carefully can easily spend more than family income every month.

Should be interesting what the future holds. Have to think there are a lot of people in way over there heads now days and may not even realize it.

 

[stevesdcb]

Glad we bought land in Williamson Valley a few years ago. Cant wait to build our retirement ranch in a few years if the building industry comes to grip.

Flat…..Lots of new builds going up right along Williamson Valley adjacent to Granite mountain, south of Mint Creek, big square footage equestrian stuff. With fuel prices & the cost of materials these builds have to be setting records.

 

[MSum661]

Ran my utility bill averages the other day. Pretty sure they have nearly doubled in last 4 or 5 years and not from extra usage.

My small mortgage payment would be half of what my new neighbors pay if they have a mortgage.

Maintaining and insuring three paid off cars is approaching $600 a month. Gas has almost doubled in last two years.

No baller but make a decent living. Disposable income nearly non existent today. If not carefully can easily spend more than family income every month.

Should be interesting what the future holds. Have to think there are a lot of people in way over there heads now days and may not even realize it.

Stay with Key indicators. They are theee most accurate barometer to roll with, the rest is all Bullshit.
The May 27th read for April Personal Savings rate has crashed.
(The May numbers come out this week on Thursday)

 

[2Driver]

Amazing, all the people that quit work to improve the quality of thier lives are running out of PPP money.

 

[stevesdcb]

Ran my utility bill averages the other day. Pretty sure they have nearly doubled in last 4 or 5 years and not from extra usage.

My small mortgage payment would be half of what my new neighbors pay if they have a mortgage.

Maintaining and insuring three paid off cars is approaching $600 a month. Gas has almost doubled in last two years.

No baller but make a decent living. Disposable income nearly non existent today. If not carefully can easily spend more than family income every month.

Should be interesting what the future holds. Have to think there are a lot of people in way over there heads now days and may not even realize it.

IMO, you are spot on about people being over their heads & not knowing it. So many squeak by with little or no savings account, live pay check to pay check, have credit cards charged up, car payments, boat payments, etc.

High fuel prices & inflation is most likely not going to go away for years. The fallout hasn’t even started yet for those that are not prepared.

How many times have I heard peeps make a big purchase & say, “ I deserve it” or “You only live once”. Unfortunately, if & when they fall flat on their face we all end up paying the price in different ways.

Vulture season has been nonexistent for many years…….. it’s coming.

 

[Wheeler]

Amazing, all the people that quit work to improve the quality of thier lives are running out of PPP money.

First it was the Barney and Bill show with everyone deserves to own a home and most recently with Uncle Joe and his trillion dollar giveaway, we are all about outta money patience or both.

 

[was thatguy]

Amazing, all the people that quit work to improve the quality of thier lives are running out of PPP money.

What people did that?
I know one guy who was a 1099 worker with a sole proprietor LLC that got a $85K loan that he has to pay back now. He’s an idiot imo.
But he didn’t “quit” to get that money.
Or or you talking about people quitting work for unemployment?
Usually quitting disqualifies a person from UI.

Not arguing, I just hear that a lot but don’t know who it actually applies to?
I know I’ve read about business owners taking all kinds of PPP money but not sure how that equates to quitting?
PPP seems to encompass all different types of structured payouts?

 

[LargeOrangeFont]

What people did that?
I know one guy who was a 1099 worker with a sole proprietor LLC that got a $85K loan that he has to pay back now. He’s an idiot imo.
But he didn’t “quit” to get that money.
Or or you talking about people quitting work for unemployment?
Usually quitting disqualifies a person from UI.

Not arguing, I just hear that a lot but don’t know who it actually applies to?
I know I’ve read about business owners taking all kinds of PPP money but not sure how that equates to quitting?
PPP seems to encompass all different types of structured payouts?

There was no wealth before April 2020

 

[was thatguy]

There was no wealth before April 2020

True!
Plus I’m the devil and the cause of all economic downturns because I collected unemployment for 12 weeks or so!
Never mind that I paid that premium for about 35 years without filing a claim.
Never mind that the Covid havoc erased the job I had and 2 other offers I was negotiating at that time.
And yes, I paid the premiums because it is factored into my pay structure negotiations.
In fact my current W2 job I just renegotiated this week concerning that, benefits, and days off pay.

 

[Cdog]

Pers, Sters and whatever LEO and Fire have. That is truly what supports the RE market on that side of town. They surely aren't the only buyers now, but 5-10 years ago they made up the lion's share.

5-10 years back, my side of town were mostly early "refugees"...not the high dollar types. As the Prescott market priced people out though, a lot of that market started heading our way. Some giant homes and shops were built, and some still going up. Now, my area has a mix of double wides and million dollar homes...pretty bizarre.

You’re probably the best person to answer that.

The age, build quality & neighborhoods of all these 800k + houses up there in the pines are laughable. Sure some cool stuff but you have to drive through what looks like homes in 29 palms before you get to them.

Joke!!

 

[Cdog]

I remember Corey used to post stats from the MLS about what normal inventory looked like. I recall. Something about my 12,000 in the Phoenix metro was normal.

Phoenix may be at 2018 inventory in a couple of weeks. View attachment 1130051

Look at the spacing of those last few dots on the 2022 line

Hey good catch!! Yes we’re on our way. Lots of new inventory. Lots of price reductions. Still think many are over priced.

I have some listings coming up in July/August from landlords looking to cash out. They’re 200-250k+ on their rental in 2.5 years which is great. They followed my advice when you get in and now when to get out.

We will list at the most aggressive price reasonable on the low side to get out asap.

It’s been a good run!

 

[Orange Juice]

Here is everything you’ll need to know about housing in your area of the country.

Home price decline odds: This interactive map shows the likelihood in your local housing market | Fortune

The cooling U.S. housing market has seen the odds of a home price decline spike. At least on a regional level.

fortune.com

 

[RiverDave]

As just another dumb ex finance/hedge fund guy who also rode the dot com wave with some pure play startups and has been doing commercial real estate brokerage and development since 2007. My education is finance and post grad CFA.

The best guess to weather the current storm and make some money seems to be income producing raw land i.e. farmland, rv park etc. This used to be the basis behind storage units and car washes, but they have become too capital intensive.

Time will tell, but I believe in it enough to have moved from Denver to Utah and invested over $1m plus time and energy into taking the bet.

If I did want to subdivide the rv sites now. We have standing offers that would put the total sale price just over $10.5m.

However, quick money is not the plan here. Its a lifestyle as well. Knowing we probably made the right choice and are sitting on a large gain does help me sleep at night though

Ten times the money? I would tell them they could keep my trailer on the way out..

 

[Ace in the Hole]

Maintaining and insuring three paid off cars is approaching $600 a month.

You need to shop around...thats fucking insane.

 

[monkeyswrench]

You need to shop around...thats fucking insane.

It may depend on what is in the 3 cars...doing maintenance on my old one ton wasn't cheap. With it being a diesel, the mileage and abuse equated to at least one oil change and filters every month, and tranny service and filters every other. At the time, maybe 2010, it wasn't cheap. I also couldn't justify a new truck knowing it was going to get flat destroyed.

You’re probably the best person to answer that.

The age, build quality & neighborhoods of all these 800k + houses up there in the pines are laughable. Sure some cool stuff but you have to drive through what looks like homes in 29 palms before you get to them.

Joke!!

Yes, I am literally the "median"...have a singlewide on one side, and 3000sqft ranch home on the other...a lot like Norco in the late 90's

 

[HBCraig]

Currently live in Prescott, been here approximately 2 years, semi retired, work locally half time for local government.

A few observations: Yes, houses for sale but currently at California prices. Government pay in Prescott is 1/2 or less of what California pay is. Many businesses, including Government jobs don’t pay enough for younger folks, up & comers, the ability to afford or buy a house especially now combined with the high price of fuel, food, etc.

Pipeline of Californians coming into Prescott, escaping, mostly middle aged or retired that have cash to buy. Million dollar plus sales are very common & often occur within the first day or two of a listing. Californians have changed the whole economic housing structure of Prescott.

Many locals are not happy, they can’t compete monetarily.

What I make part time working my half time government job is chump money, walking around money, Can’t imagine having to make a house payment & support a family on such low pay.

As long as the great escape is occurring, Prescott will continue to have a unique housing market. Once again, cash is king.

I visited Payson last year. Man, what a cool place. Small town feel.

 

[monkeyswrench]

I visited Payson last year. Man, what a cool place. Small town feel.

Payson's really a nice little area. Not too far from Phoenix for your "city fix" either. The only bad thing, and was really apparent with covid, it's surrounding forest can get overrun with "flatlanders" when it gets hot in the valley. Spring and fall though, absolutely beautiful times to be out and about there.

 

[zhandfull]

You need to shop around...thats fucking insane.

Yeah, all three still under full coverage and have an 18 year old daughter. Neither helps my rates on insurance. Can’t afford to replace so full coverage it is. Seems like one of the three vehicles will need new tires each year. Plus the normal oil changes, registration and other routine cost of ownership. Adds up quick even without a loan payment.

 

[Orange Juice]

Yep as long as Cali holds up.
Weve been looking in Talking Rock for 2 years. We have literally found a house the day it went live and were called 1/2 way up I17 to turn around that it was sold.

We said screw it as there were about 4 homes for sale in that little community. There are now 23 homes and 44 lots for sale some with over 100k price reductions.

We may start looking again once things land.

Gas prices will force a few to sell, but line to get into something, move in ready, is deep.

 

[FROGMAN524]

I’m not sure the defaults and sub primes are as prevalent now as they were before 2008 but this scene just gets my heart rate going.

 

[DBMX]

I can only speak to my area in the OC. But, when the 2007 crash happened only 5 cities didn't experience a loss in value
Newport Beach
Irvine
Laguna Beach
CDM
Huntington Beach.

I don't see these 5 cities really taking a drastic downturn

I don't see it either. We live in a townhome community in HB and most local realtors have waiting lists of people trying to buy in here.

 

[Havasu blue label]

A waiting list that’s a good sign

 

[TrollerDave]

When the market crashed 08 i was shopping for a home in Chino thinking id have my pick of the litter. Not the case, I was competing against several cash buyers. It got to the point where I wouldn’t even look at homes anymore I submitted offers on everything in the market. It took until 2010 to finally have an offer accepted. Im talking full price offers. Back then the market crashed because over 36% of mortgages were stated income adjustable rate mortgages, people with shitty credit.

Same thing for us. At first we were contingent on selling our condo. We accepted an off and found a house that accepted ours. The lady buying our condo couldn’t get financed for what she thought had to back out. Sold the condo and did a 3 month lease on an apartment. 3 lease renewals and 1 year later, got a short sale. It was our 7th offer on a place after we got beat out by full cash offers even though they were less. The house we got actually went to another bidder that offered $20K less but only had $18K more to put down. We had a harder time because we wanted a 1 story house.
It was a crazy time for sure. Laws were changing daily.

 

[LargeOrangeFont]

Same thing for us. At first we were contingent on selling our condo. We accepted an off and found a house that accepted ours. The lady buying our condo couldn’t get financed for what she thought had to back out. Sold the condo and did a 3 month lease on an apartment. 3 lease renewals and 1 year later, got a short sale. It was our 7th offer on a place after we got beat out by full cash offers even though they were less. The house we got actually went to another bidder that offered $20K less but only had $18K more to put down. We had a harder time because we wanted a 1 story house.
It was a crazy time for sure. Laws were changing daily.

Yea that was a super frustrating time.

 

[TrollerDave]

Yea that was a super frustrating time.

Unless you could make a full cash offer. Then it was like

 

[LargeOrangeFont]

Unless you could make a full cash offer. Then it was like
View attachment 1130467

Yea I think we made over 30 offers back then. I felt a little doom and gloomish as we rolled into 2011 and values continued to drop. The house we bought probably dropped another 10+% into 2012 before the upswing. But even if we had waited the 2.5 years to buy right then in the pit of despair, the money we would have wasted in rent was more than the equity loss.

 

[Cdog]

I’m not sure the defaults and sub primes are as prevalent now as they were before 2008 but this scene just gets my heart rate going.

I follow Michael Burry anywhere he sprinkles some info or thoughts online. He's predicting a a big sell off.

 

[copterzach]

Anyone interested in 4500 acres in the Brenham, Tx area. Very nice home. Nothing ridiculous. Just an old family ranch owned for over 75 years. It’s for sale, not on sale.

 

[RiverDave]

Things have definitely turned a corner here in Havasu Just like everywhere else..

That said we are still very active and not even to “normal” levels before everything went nuts..

I think a lot of people think Just because you aren’t getting multiple over asking offers within minutes of things hitting the MLS, then the sky must be falling..

I’d have to check what todays number is but we have I think 17 homes in escrow between buying and selling right now. For reference for the last two years that number would be between 30-40 at any given time.

RD

 

[hallett21]

Things have definitely turned a corner here in Havasu Just like everywhere else..

That said we are still very active and not even to “normal” levels before everything went nuts..

I think a lot of people think Just because you aren’t getting multiple over asking offers within minutes of things hitting the MLS, then the sky must be falling..

I’d have to check what todays number is but we have I think 17 homes in escrow between buying and selling right now. For reference for the last two years that number would be between 30-40 at any given time.

RD

It wasn’t that long ago that homes took 30-60 days to sell lol.

Not to mention the latest trend of listing a home under value to start a bidding war.

We may just go back to “normal”. Good agents will be successful and the crappy ones will be flushed out.

Same thing in construction. Everyone and their brother is a “contractor” right now. Takes more than a lifted truck lol

 

[Havasu blue label]

That’s a good one takes more the a lifted truck don’t forget they have to have redwings and a set of plans in the window

 

[HB2Havasu]

Things have definitely turned a corner here in Havasu Just like everywhere else..

That said we are still very active and not even to “normal” levels before everything went nuts..

I think a lot of people think Just because you aren’t getting multiple over asking offers within minutes of things hitting the MLS, then the sky must be falling..

I’d have to check what todays number is but we have I think 17 homes in escrow between buying and selling right now. For reference for the last two years that number would be between 30-40 at any given time.

RD

Curious. Are these mostly cash buyers? Can't imagine anyone buying in at approx. 6% rates nowadays.

 

[RiverDave]

It wasn’t that long ago that homes took 30-60 days to sell lol.

Not to mention the latest trend of listing a home under value to start a bidding war.

We may just go back to “normal”. Good agents will be successful and the crappy ones will be flushed out.

Same thing in construction. Everyone and their brother is a “contractor” right now. Takes more than a lifted truck lol

Yep lol

 

[RiverDave]

Curious. Are these mostly cash buyers? Can't imagine anyone buying in at approx. 6% rates nowadays.

Well two things.. is it really 6% (it isn’t) @Wendi

And the idea of “free money” isn’t normal either.. historically 5% - 6% is pretty good?

 

[Englewood]

I know one guy who was a 1099 worker with a sole proprietor LLC that got a $85K loan that he has to pay back now. He’s an idiot imo.
But he didn’t “quit” to get that money.
Or or you talking about people quitting work for unemployment?
Usually quitting disqualifies a person from UI.

Not arguing, I just hear that a lot but don’t know who it actually applies to?
I know I’ve read about business owners taking all kinds of PPP money but not sure how that equates to quitting?
PPP seems to encompass all different types of structured payouts?

There were 2 types of relief available to employers.

PPP (Paycheck Protection Plan) - Business owners with employees got money to cover paychecks during Covid. The problem was that everyone stayed busy and that money went into the economy, which I believe caused some of the inflationary issues we are now facing. The demand outweighed the supply and no we have a very big problem.

EIDL (Economic Injury Disaster Loan) - Is a 30 yr loan at 3.75%. This has to be paid back and is not forgiven like the PPP can be. I've mentioned it many times but nobody is gonna pay these back. Under 200k = no personal guarantee. Start a new Corp and walk away. Watch.

 

[stillhustlin]

We’re seeing sales start moving in northern utah but prices have dropped about 5-7% off their high. Demand is definitely slowed but it’s still there. I think if your looking for a deal you may need to focus on an area with a lot of new development. As an example builders bought land with development loans and we’re expecting to sell 4 homes a month. If they can only move 2 they may have more inventory then they can handle and the loans may come due before they can move product. This will force them to sell excess lots. A lot of developers have overpaid for land with pricing leveling out. There are a lot of “cowboys” coming from tech and other industries they are dumping cash into real estate but not understanding land development cost and banking on appreciation. Every proforma we’ve been running recently only pencils at 30% less than pricing we contracted 2-3 months ago.