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

[Havasu blue label]

Northeast Phoenix. My home is still up over 3 times in the last 20 years, so there are no real bargains, just opportunities.

It’s 20 years it should be

 

[LargeOrangeFont]

It’s 20 years it should be

Yep. So what does waiting years and years for a deal get you? If the transaction makes sense, do it.

 

[Havasu blue label]

So what you’re saying is it’s ok to buy an over valued property even if it’s drops in value .

 

[LargeOrangeFont]

So what you’re saying is it’s ok to buy an over valued property even if it’s drops in value .

Show me a property that lost value in the last 20 years aside from natural disasters.

 

[bk2drvr]

So what you’re saying is it’s ok to buy an over valued property even if it’s drops in value .

I think what LOF is say is that if you are planning to stay in a property for a long time it doesn't make sense to continue to wait for the bottom. I guess this depends on your need to move. I will be buying a house in the next 2 years and it will be my primary residence. I don't need prices to be at bottom to pull the trigger but feel its in my best interest to follow the market down through next year. I'd be happy with 30% off of 2021 highs and would call that a win. A 1m home that is now 700k. Maybe I'll get it, maybe not.

 

[Englewood]

People gonna be shocked when the trailing RE numbers come out. It’s fricken Dead!

Sales have virtually stopped. Won’t change til rates are below 5.

 

[2Driver]

I’m not sure what to think.

Inventory dropped 3,000 in Phx metro In Nov. The guy that borrows from me sold his last 3 flips in 5 days.
The last 2 single family homes in my neighborhood sold in 10 days at full asking, 1.7 and 1.8. Two patio homes were listed for 1M and sold in 5 days and 2 friends listed their town homes in cave creek both sold in 3 days, one for 510k and the other 640k

 

[Cray Paper]

I’m invested in commercial real estate, but of a light industrial nature in a reasonably recession-proof industry, so I’m feeling pretty good about it. However, the lockdowns and other foolish political moves initiated a change to work-from-home policies at many companies, which is having a devastating effect on office real estate. A few examples, just from my neck of the woods; 1) REI completed construction of a new campus in 2019/2020, totaling 400,000 sq. ft. Before ever moving into it, they told everyone to continue working from home, and sold it to Facebook (who probably has way too much space now); 2) a temporary labor provider (who shall remain unnamed, considering my source) has an office building that housed 400 employees pre-Covid. That building now has only 35 people in it at any time, though the 400 are still employed. ; 3) So many people formerly employed in downtown Seattle offices are now working from home, that gyms, retail stores and restaurants in the area are shutting down (well from work-at-home and the un-prosecuted crimes).

I don’t see office real estate recovering anytime soon, and retail is headed down the same path.

You and I are in the same neck of the woods and sounds like we are in the same industry...I was very involved in the REI project in the last year of it as well the plan for the west parcel after the sale.

The tech industry in the PNW is abandoning office space construction in a very sudden and drastic fashion, all of them. Billions of dollars of executed contracts over the next 2 years are being differed, even the worlds largest software company is focused on stopping the spending with very little concerns for financial impacts of stopping.

 

[Havasu blue label]

I think what LOF is say is that if you are planning to stay in a property for a long time it doesn't make sense to continue to wait for the bottom. I guess this depends on your need to move. I will be buying a house in the next 2 years and it will be my primary residence. I don't need prices to be at bottom to pull the trigger but feel it’s in my best interest to follow the market down through next year. I'd be happy with 30% off of 2021 highs and would call that a win. A 1m home that is now 700k. Maybe I'll get it, maybe

I’m not sure what to think.

Inventory dropped 3,000 in Phx metro In Nov. The guy that borrows from me sold his last 3 flips sold in 5 days. The last 2 single family homes in my neighborhood sold in 10 days at full asking, 1.7 and 1.8. Two patio homes were listed for 1M and sold in 5 days and 2 firneds listed town homes in cave creek both sold in 3 days.

That’s great news

 

[Go-Fly]

You and I are in the same neck of the woods and sounds like we are in the same industry...I was very involved in the REI project in the last year of it as well the plan for the west parcel after the sale.

The tech industry in the PNW is abandoning office space construction in a very sudden and drastic fashion, all of them. Billions of dollars of executed contracts over the next 2 years are being differed, even the worlds largest software company is focused on stopping the spending with very little concerns for financial impacts of stopping.

Contractors in the PNW have no idea what is headed their way.

 

[2Driver]

The massive TSMC chip plant at I17 and Carefree highway is going to employ 10,000 employees its a small town and intel is building the same size faculty in Chandler. Phx area just continues to rage on.

We have friends that have a pool dug, rebared and plumbed and they cant get concrete until March of 2023

 

[hallett21]

My brother is a commercial real estate broker, specifically industrial in So Cal.

Anything in the LA area is going for $1.70+ a sq ft. And we’re talking 25k+ sq ft facilities.

 

[LargeOrangeFont]

My brother is a commercial real estate broker, specifically industrial in So Cal.

Anything in the LA area is going for $1.70+ a sq ft. And we’re talking 25k+ sq ft facilities.

Have you given him a hat yet?

 

[pronstar]

This is sorta terrifying…

‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern

(Bloomberg) -- There’s a hidden risk to the global financial system embedded in the $65 trillion of dollar debt being held by non-US institutions via currency derivatives, according to the Bank for International Settlements. Most Read from Bloomberg‘Huge, Missing and Growing:’ $65 Trillion in...

finance.yahoo.com

 

[Go-Fly]

The massive TSMC chip plant at I17 and Carefree highway is going to employ 10,000 employees its a small town and intel is building the same size faculty in Chandler. Phx area just continues to rage on.

We have friends that have a pool dug, rebared and plumbed and they cant get concrete until March of 2023

They built a chip plant in Eugene Oregon with Government money that employed 10,000 people in all. As soon as the tax credits ran out they left and closed the doors. The money is not in the making it's in the spending.

 

[hallett21]

Have you given him a hat yet?

Their biggest issue is getting clients to accept the fact that today you can’t find something for $1 a ft. Or if you do it’s 50-60 miles from your desired area.

 

[2Driver]

Desite Biden pos victory lap and the wastefull chip act this plant was well underway during Trump era and stands on its own based on best practices for plant location. which makes it even more shameful that the chip act was even passed.

But your right in that the chip industry is cyclical. I was approached to lend on nearby land and declined. You dont know when it will scale back but for the next 5-10 its balls out it seems

 

[Done-it-again]

My brother is a commercial real estate broker, specifically industrial in So Cal.

Anything in the LA area is going for $1.70+ a sq ft. And we’re talking 25k+ sq ft facilities.

Damn, at $1.70 a sq ft sign me up.



Pretty sure you meant $170

 

[hallett21]

Damn, at $1.70 a sq ft sign me up.



Pretty sure you meant $170

Sorry talking leases

 

[Done-it-again]

Sorry talking leases

Kind of thought that after I typed.

I’m at .67 for 18k sq Ft in Ontario. It’s one of the reasons I have moved to TX. TX industrial went nuts and there is not much to begin with. Hard coming from 12k - 23k per month to buy a building.

 

[bonesfab]

My brother is a commercial real estate broker, specifically industrial in So Cal.

Anything in the LA area is going for $1.70+ a sq ft. And we’re talking 25k+ sq ft facilities.

That’s brutal for rent.

 

[NicPaus]

That’s brutal for rent.

I was about to sign a lease on a shop across from lowes on western. After looking for a year. 1800 sq ft. But no parking overnight in your 3 parking spaces. Could fit 2 of my trucks inside. Rest just building spaces. $3500. Backed out when he told me in 6 months it was going to be $4150.

Have friends paying $1200 for a 1000 sq ft. Right by HRP. But those same units are now 1800$ and last time I asked there was 7 people on the waiting list and nothing has opened up in 2 years. One friend might move out of state next year and might sublease it from him if possible. Only other units are next city over and $2200 a month for a 1000 sq ft.

 

[Looking Glass]

I was about to sign a lease on a shop across from lowes on western. After looking for a year. 1800 sq ft. But no parking overnight in your 3 parking spaces. Could fit 2 of my trucks inside. Rest just building spaces. $3500. Backed out when he told me in 6 months it was going to be $4150.

Have friends paying $1200 for a 1000 sq ft. Right by HRP. But those same units are now 1800$ and last time I asked there was 7 people on the waiting list and nothing has opened up in 2 years. One friend might move out of state next year and might sublease it from him if possible. Only other units are next city over and $2200 a month for a 1000 sq ft.

I understand all those in "D NILE" (The Ones With The Most To Lose" BUT!!, how long can this Foolishness continue before the "Consumer" flat out can not pay for all of this, and things come to a "Screeching Halt"

Passing It On, for so long

 

[bonesfab]

I was about to sign a lease on a shop across from lowes on western. After looking for a year. 1800 sq ft. But no parking overnight in your 3 parking spaces. Could fit 2 of my trucks inside. Rest just building spaces. $3500. Backed out when he told me in 6 months it was going to be $4150.

Have friends paying $1200 for a 1000 sq ft. Right by HRP. But those same units are now 1800$ and last time I asked there was 7 people on the waiting list and nothing has opened up in 2 years. One friend might move out of state next year and might sublease it from him if possible. Only other units are next city over and $2200 a month for a 1000 sq ft.

Is I’ll take my .80 cents a foot and be ecstatic I guess.

 

[Sportin' Wood]

People gonna be shocked when the trailing RE numbers come out. It’s fricken Dead!

Sales have virtually stopped. Won’t change til rates are below 5.

OR sellers lower prices.

Looked at a house this week in LHC (Thanks, team RDP) at over $ 400K; the house was a total gut job remodel and needed added square feet to make sense to me. Minimum $150K investment with me doing most all the work myself. That house is worth something in the $200K price range to me. I would have to hold for 5-6 years to even think about getting the after remodel investment back, and with high rates, it just does not make sense.

Same thing in Montana. Still, little inventory would be considered turnkey under $1M on the market. Forget finding anything under $400K that anyone on RDP (Really Deep Pockets) would live in.

Two points to ponder:
Tech industry layoffs may not impact the unemployment rate due to high H-1B work visa employees forced back to India.

In the last major recession (2008), Commercial and industrial RE trailed depreciation significantly. That saved my ass because I could offload my commercial building and cover many losses.

 

[COCA COLA COWBOY]

People gonna be shocked when the trailing RE numbers come out. It’s fricken Dead!

Sales have virtually stopped. Won’t change til rates are below 5.

Yeah, it's brutal! Lower end has some sales, but $700k and up is so quiet!.

 

[badgas]

Show me a property that lost value in the last 20 years aside from natural disasters.

So what you’re saying is it’s ok to buy an over valued property even if it’s drops in value .

What he's saying is that if you can afford it and you would like to buy a house then buy it. Not everyone is flipping their primary residence, some people just want to own a home.

Plenty of people outside of this forum that are ok that they over paid for a home a year ago because they now own a home and have a payment much less than any rent they could get for a like house.

* I might have made this same point 3-6 times in the last 72 pages but did not feeling like scanning the entire thread

 

[TCHB]

If you have a good paying job with cash in the bank I would wait and narrow in your search for your primary house. As prices drop pick a price point and go. The people who bought in the last 12 months could be under water for quite some time. If they have to sell their stuck with the price reduction and real estate fees. If you bought a vacation house for $500k and have a 10% reduction you are upside down $75K with real estate fees. I would not buy a vacation home at this time.

 

[zhandfull]

Kind of thought that after I typed.

I’m at .67 for 18k sq Ft in Ontario. It’s one of the reasons I have moved to TX. TX industrial went nuts and there is not much to begin with. Hard coming from 12k - 23k per month to buy a building.

Wife’s company had lease at .67 SF in Ontario. New rate after Covid BS went up to 1.65 SF so they shut it down after 40 years.

 

[Done-it-again]

Wife’s company had lease at .67 SF in Ontario. New rate after Covid BS went up to 1.65 SF so they shut it down after 40 years.

We have have been very lucky with the owner and has kept rent for us low.

 

[NicPaus]

I understand all those in "D NILE" (The Ones With The Most To Lose" BUT!!, how long can this Foolishness continue before the "Consumer" flat out can not pay for all of this, and things come to a "Screeching Halt"

Passing It On, for so long

Prices are still crazy. I guess to cover overhead. I looked at a bathroom yesterday. Known the lady for 20 years. I gave her a bid over 2 years ago. She has been price shopping since. I bid her kitchen 55K and bathroom 30k.

She told Me yesterday Costco gave her bid on the kitchen. Cabinet refacing and painting 80k. 52K for the quartz countertops. Paint the exterior of the house $28K. Average 1600 sq ft. House.

My Architect has been getting bids to paint the exterior of his house. He found a company he wanted to use. Until they told him $54K.

 

[attitude]

Prices are still crazy. I guess to cover overhead. I looked at a bathroom yesterday. Known the lady for 20 years. I gave her a bid over 2 years ago. She has been price shopping since. I bid her kitchen 55K and bathroom 30k.

She told Me yesterday Costco gave her bid on the kitchen. Cabinet refacing and painting 80k. 52K for the quartz countertops. Paint the exterior of the house $28K. Average 1600 sq ft. House.

My Architect has been getting bids to paint the exterior of his house. He found a company he wanted to use. Until they told him $54K.

28k to paint a 1600sq house, what am I missing here?

 

[Looking Glass]

Prices are still crazy. I guess to cover overhead. I looked at a bathroom yesterday. Known the lady for 20 years. I gave her a bid over 2 years ago. She has been price shopping since. I bid her kitchen 55K and bathroom 30k.

She told Me yesterday Costco gave her bid on the kitchen. Cabinet refacing and painting 80k. 52K for the quartz countertops. Paint the exterior of the house $28K. Average 1600 sq ft. House.

My Architect has been getting bids to paint the exterior of his house. He found a company he wanted to use. Until they told him $54K.

There gets to a point when it does not matter how badly you would want it, it just can't happen.

 

[badgas]

28k to paint a 1600sq house, what am I missing here?

They paint 2 story homes in my hood for $4-$7K

 

[bonesfab]

My Architect has been getting bids to paint the exterior of his house. He found a company he wanted to use. Until they told him $54K.

Does that include block sanding it smooth and a final color sand and buff??? Or is that just glass shards mixed in with the lube?? Wow. And I thought painting a car is nuts.

 

[NicPaus]

Does that include block sanding it smooth and a final color sand and buff??? Or is that just glass shards mixed in with the lube?? Wow. And I thought painting a car is nuts.

He does live on the hill. Before he told me the price I figured 14k. I mentioned it and he said ad 40k. I worked on the house 20 years ago. He has the money and was contemplating just doing it. Not sure if they are trying to take advantage of him because of his age. Or if they bid all jobs that high and occasionally get 1.

There are painters around here that get way more than I would ever expect and they are always busy with numerous crews.

 

[Looking Glass]

He does live on the hill. Before he told me the price I figured 14k. I mentioned it and he said ad 40k. I worked on the house 20 years ago. He has the money and was contemplating just doing it. Not sure if they are trying to take advantage of him because of his age. Or if they bid all jobs that high and occasionally get 1.

There are painters around here that get way more than I would ever expect and they are always busy with numerous crews.

AND!!, Laughing all the way to the Bank!!

 

[TCHB]

They paint 2 story homes in my hood for $4-$7K

In Havasu we had 3 bids around $10k in 2020.

 

[just_floatin]

In the Financial Tech sector, 2023 will defiantly have more layoffs.

Large Tech companies and banking institutions are investing heavily in digital platforms and cloud technologies. There is a push for more customer facing artificial intelligence and offshoring work, which in the end replaces the American Workers.

Combining layoffs with a recession, plus high inflation, leads to a depression directly impacting certain RE markets. If you are liquid, I believe there will be rental property opportunities available again at reasonable prices. A 150k (Phoenix or Tucson) two bedroom condominium will rent for a modest 2000 a month with a break even of 75 months. Realistically with rent increases per new lease agreement, the break even is more like five-ish years. Remember “be fearful when others are greedy and greedy when others are fearful” - Warren Buffett

 

[Cole Trickle]

Does that include block sanding it smooth and a final color sand and buff??? Or is that just glass shards mixed in with the lube?? Wow. And I thought painting a car is nuts.

There wasn't a x mas special for ceramic coat unfortunately..

 

[Havasu blue label]

28k to paint a 1600sq house, what am I missing here?

Those guys just throw out numbers

 

[angiebaby]

Prices are still crazy. I guess to cover overhead. I looked at a bathroom yesterday. Known the lady for 20 years. I gave her a bid over 2 years ago. She has been price shopping since. I bid her kitchen 55K and bathroom 30k.

She told Me yesterday Costco gave her bid on the kitchen. Cabinet refacing and painting 80k. 52K for the quartz countertops. Paint the exterior of the house $28K. Average 1600 sq ft. House.

My Architect has been getting bids to paint the exterior of his house. He found a company he wanted to use. Until they told him $54K.

So what I would consider a "light" kitchen remodel (no floors, lighting, appliances, cabinets, just paint and countertops) is $132K???? What idiot pays for that?

 

[yuppie]

Hold onto your ... hats? $975K for this place? Yeesh! It's nice but... Wow.

 

[shintoooo]

Hold onto your ... hats? $975K for this place? Yeesh! It's nice but... Wow.

View attachment 1179263

That's after a $225K price drop. It was listed for $1.2 mil. Nice house but I agree, I wouldn't pay $975K for it but I'm not in the market either. You only live once. Buy what you can and enjoy it. Who gives a shit what happens to prices, up or down. If you can afford it, buy it and enjoy the hell out of it.

 

[Havasu blue label]

In Havasu we had 3 bids around $10k in 2020.

That's after a $225K price drop. It was listed for $1.2 mil. Nice house but I agree, I wouldn't pay $975K for it but I'm not in the market either. You only live once. Buy what you can and enjoy it. Who gives a shit what happens to prices, up or down. If you can afford it, buy it and enjoy the hell out of it.

Homes in havasu are selling like hot cakes

 

[Cray Paper]

Contractors in the PNW have no idea what is headed their way.

Yes we do, the dollar amount of contracts that were signed and the work is now shelved in the Seattle area is huge, in the billions. It will take a couple of months for the union trades to really get a taste of where the local economy is heading. I saw what was coming a couple of years ago, been through this cycle for more than 3 decades in the construction industry.

The younger generation is in for rude reality check of how things really work, I don't, seen this several times since I entered the work force when I was 15 YO in 1985.

 

[OldSchoolBoats]

So how much longer do we have to wait for this crash to come in the economy?? Just making sure I don't wear my favorite hat outside.

 

[Cray Paper]

The office space market is going well on it's way to cratering, it has several times in the last 20+ years... but this downturn isn't like the others. Think about what it takes for a MS, Amazon, Expedia etc. ( I've worked on campus projects for each of them..) to sustain, let alone build.

The real question is will it ever come back? I was involved with the demo scope of the Amgen campus that Expedia purchased about 8 years ago.. then the build back. Big business knows / directs 'coming....no doubt in my mind.

People working from home eliminates millions / billions of dollars of corporate campus expenses.... the Amgen campus spent more than 100K a month idling it with zero people or equipment in the almost 1M sq' of lab and office space almost a decade ago. Servicing buildings ( cleaners, janitors, building & equipment maintenance) adds up quickly.

I don't see home prices dropping much, but white collar job salaries are going to and their will be a huge loss in construction jobs. That will help drive down home prices but the work from home reality will insure home prices do not crater.

Just my .02

 

[Go-Fly]

So how much longer do we have to wait for this crash to come in the economy?? Just making sure I don't wear my favorite hat outside.

We're going to build for the next two years but, not starting anything new in 2023 or 24. Staff reductions start after the first of the year.

 

[Sportin' Wood]

The younger generation is in for rude reality check of how things really work, I don't, seen this several times since I entered the work force when I was 15 YO in 1985.

Same here.