ID housing nose dive

[Dan Lorenze]

It's a sensitive topic because there are so many RDP members here that are in Real Estate, whether they are agents or mortgage brokers. I can understand they don't like hearing rumblings about a correction in the market. Then we have folks that see a downturn would work in their favor as they could soon be able to afford to relocate or but a second home. It's understandable

 

[EmpirE231]

 

[HB2Havasu]

If there was any doubt next months report is going to show the USA is in a recession the Feds last 2 rate increases just pushed the economy over the cliff by killing the housing industry.

The real problem is Washington DC has a spending problem going back to the George W Bush years. The Fed can no longer print enough or borrow enough to cover the Biden Administrations rampant spending. The only thing they have remaining to stave off inflation is raising rates higher than the inflation rate to put it in check, even if that means putting the economy into a depression. It’s all burning down like Rome and Brandon has Shummer negotiating with Manchion on a $7 Trillion Dollar Build Back Better Boondoggle

 

[Xring01]

SOOOOOO basically you were being an asshole with your original comment? Noted.

Maybe you have been absent for the past year or so but these threads are like a god damn broken record on this site. I am not closing my eyes or complaining about the markets at all!! In fact, I probably listen to more financial podcasts then most people on this site, so I am VERY in tune with what is going on in the world. Yeah, my business is down big time and I am sure there are some people on here that are cheering that....................maybe you are one of them??

Good thing is that I saw this downturn in the mortgage business coming back in November, so we took a large chunk of the money we made over the past 2.5 years and invested in another business that my wife will run to make up for the decline in mortgage income.

It just gets fucking OLD seeing the same shit get regurgitated every single day with a different title............that is ALL I WAS SAYING.

Yes, you are correct, I am probably the biggest asshole on RDP, but the good news.. I know it, and I refuse to change.

Well, why would you click on the thread thats pretty much TITLED something your dont want to read about? Trust me.. I only read threads on titles I am interested in, 90% of them, I never click on. Something to consider.

 

[angiebaby]

Correct no direct tie. Just happens to follow each other lol

Right. We just closed on a house yesterday (terrible timing, I know). We were able to lock our loan at 5.25% a month ago. Because our title office is in Montana and we are in Colorado for the rest of the week, our bank handled the final signing docs. I asked the loan officer what the rate was yesterday. She said 6%. Hmmmm, what happened in the 4 weeks that would cause the interest rate jump .75%? I'm sure it's just a coincidence.

. . . and we are very happy with our decision to not use a real estate agent for the transaction.


edit: I realize that the mortgage rate is not directly tied to the fed benchmark rate, but there is still a direct correlation.

 

[Englewood]

No they are not tied together in writing. But sure is odd how when the fed rate was down so we’re mortgage rates. And when the fed rate went up mortgage rates were and are right behind them. What a coincidence.

Clearly you are not able to grasp how this works. If only for the sake of commenting on RDP financial posts, I'd recommend doing some research on how mortgage rates are decided. You may also be shocked to know that there is not one "Rate". It varies per bank, per borrower, per time of the day.

 

[was thatguy]

Lol
Try being in the oil field…

 

[RiverDave]

It's a sensitive topic because there are so many RDP members here that are in Real Estate, whether they are agents or mortgage brokers. I can understand they don't like hearing rumblings about a correction in the market. Then we have folks that see a downturn would work in their favor as they could soon be able to afford to relocate or but a second home. It's understandable

I don’t think it’s that sensitive. Realtors aren’t fortune predictor’s.. Technically their only job is to market the house, and make sure the deal is done legally and with protection for their clients..

The ones that are sensitive to it have an angle they are working..

When houses are going up 50+% in value in six to eight months here in Havasu…. I think Ray Charles could have seen something has to give.

How bad it gets I dunno. We are about to find out… lol. And like ole Buffet says when the tide goes out we are gonna see who’s wearing pants.

RD

 

[mbrown2]

For what's worth, not much......I work for a large mortgage bank and see it first hand....I worked for a mortgage bank from 1998 - 2015...went through 2007-2008...managed the tech consolidation of Countrywide into BofA and then Merrill into BofA... these threads are necessary it helps so history does not repeat itself...People need to be aware and not sold a bag of shit....The things that lead to that market crash was liquidity, subprime mortgages, toxic paper, investment buyers, highly leveraged buyers with little to no equity, stated income loans... Some of those factors exist today but the key ones don't....but others that were not there in 2007 do like inflation... we will get through it but it take many quarters....

 

[Xring01]

Right. We just closed on a house yesterday (terrible timing, I know). We were able to lock our loan at 5.25% a month ago. Because our title office is in Montana and we are in Colorado for the rest of the week, our bank handled the final signing docs. I asked the loan officer what the rate was yesterday. She said 6%. Hmmmm, what happened in the 4 weeks that would cause the interest rate jump .75%? I'm sure it's just a coincidence.

. . . and we are very happy with our decision to not use a real estate agent for the transaction.

Angie,
If you recall, I am pretty sure we coorsponded awhile back about my move to the Reno area… probably over a year ago or more.
Well I am finally here… I am just on the outskirts of Dayton, “Santa Maria Ranch” area.

My timing was not perfect, but it was pretty damn good. I think I got out of SoCal at the peak, and locked in my new 15 year mortgage in NV at 2.99%

My math was pretty simple… getting out of Ca was going to save me in excess of $20K/year minimum.
I could sell, and try to rent, or just ride the up/downs like I have done in the past, but I at least locked in my interest rate, which could overcome the lower housing price’s coming, combined with higher interest rates, pending how bad it gets.

But I have a home office, and it was better for me to buy… Again, no one has a crystal ball, we only make the best guess with the data we have at the time.

RIght now, I havent lost a penny on the new home. I could sell it for waht I paid for it in Mar 2022. But that could change, if it does it does.. I am not going anywhere for 10 years or more. So I am comfortable with my math/decisions/timing.

 

[530RL]

At random I clicked a few of the reduced ones. Even with the reduction the ones I clicked are asking 75-100k+ over their 2020-2021 sale price.

Supply chain issues are getting better, ocean freight has dropped in half over the last six months. They are still messed up, but not as much.

One has to wonder if this is the end of the world where houses drop in half like some are predicting, or a return to more normal markets where appreciation is low single digits and not double digits a year, for year after year?

It wasn't just car dealers asking for additional markup, it was everything. Maybe that is coming to an end and we will get back to more normal markets? And these price drops reflect the end of "additional market adjustment"?

 

[LargeOrangeFont]

At random I clicked a few of the reduced ones. Even with the reduction the ones I clicked are asking 75-100k+ over their 2020-2021 sale price.

Exactly. These are 20% discounts on the 30% markup.

 

[attitude]

I’m still trying to wrap my head around how many people are able to afford a 5k a month mortgage for a starter home in the IE. If I had to buy tomorrow I would be seriously screwed.

 

[angiebaby]

Angie,
If you recall, I am pretty sure we coorsponded awhile back about my move to the Reno area… probably over a year ago or more.
Well I am finally here… I am just on the outskirts of Dayton, “Santa Maria Ranch” area.

My timing was not perfect, but it was pretty damn good. I think I got out of SoCal at the peak, and locked in my new 15 year mortgage in NV at 2.99%

My math was pretty simple… getting out of Ca was going to save me in excess of $20K/year minimum.
I could sell, and try to rent, or just ride the up/downs like I have done in the past, but I at least locked in my interest rate, which could overcome the lower housing price’s coming, combined with higher interest rates, pending how bad it gets.

But I have a home office, and it was better for me to buy… Again, no one has a crystal ball, we only make the best guess with the data we have at the time.

RIght now, I havent lost a penny on the new home. I could sell it for waht I paid for it in Mar 2022. But that could change, if it does it does.. I am not going anywhere for 10 years or more. So I am comfortable with my math/decisions/timing.

There is a really great nursery in Dayton. I assume it's still there anyway. Glad you were able to get out of CA and lock in that amazing interest rate!

It's caused some anxiety for us to be without a piece of real estate. We really did not want to buy yet, but this was a fair deal on a well-built custom home. It was built in 1978 and we purchased it from the original owners. It's not on the lake, but it has a lake view from both levels. The lake is a block away.

 

[Bpracing1127]

I’m still trying to wrap my head around how many people are able to afford a 5k a month mortgage for a starter home in the IE. If I had to buy tomorrow I would be seriously screwed.

Same. Also to add a vacation home in havasu for 3500/month too.

 

[was thatguy]

I’m still trying to wrap my head around how many people are able to afford a 5k a month mortgage for a starter home in the IE. If I had to buy tomorrow I would be seriously screwed.

CA funny money.
Same reason they drop $700K on a $350K weekend home in Havasu without blinking.

My new neighbor (on the other side) picked up the 3/3 home next to me as a second home at the peak or near it. Nice beach entry pool and RV garage as well.
Young guy with a young family. Very cool dude. He lives and works in SoCal, where his primary home is.
He’s got a big ass cruiser boat, new 28’ cat almost off the build line, platinum f150, Escalade, Big new motor home etc. and so does his brothers and cousins who show up occasionally.
I have no idea what he does for work, but I need to find out! Lol

 

[LargeOrangeFont]

Angie,
If you recall, I am pretty sure we coorsponded awhile back about my move to the Reno area… probably over a year ago or more.
Well I am finally here… I am just on the outskirts of Dayton, “Santa Maria Ranch” area.

My timing was not perfect, but it was pretty damn good. I think I got out of SoCal at the peak, and locked in my new 15 year mortgage in NV at 2.99%

My math was pretty simple… getting out of Ca was going to save me in excess of $20K/year minimum.
I could sell, and try to rent, or just ride the up/downs like I have done in the past, but I at least locked in my interest rate, which could overcome the lower housing price’s coming, combined with higher interest rates, pending how bad it gets.

But I have a home office, and it was better for me to buy… Again, no one has a crystal ball, we only make the best guess with the data we have at the time.

RIght now, I havent lost a penny on the new home. I could sell it for waht I paid for it in Mar 2022. But that could change, if it does it does.. I am not going anywhere for 10 years or more. So I am comfortable with my math/decisions/timing.

We moved at the same time but to different places. If I had moved now when I planned instead of this past March, it would have been a negative $150k+ swing, that does not even include the higher interest rate.

The cost for my new house went up $50-60k and the value of my old house shrunk almost $100k looking at comps.

 

[Xring01]

For what's worth, not much......I work for a large mortgage bank and see it first hand....I worked for a mortgage bank from 1998 - 2015...went through 2007-2008...managed the tech consolidation of Countrywide into BofA and then Merrill into BofA... these threads are necessary it helps so history does not repeat itself...People need to be aware and not sold a bag of shit....The things that lead to that market crash was liquidity, subprime mortgages, toxic paper, investment buyers, highly leveraged buyers with little to no equity, stated income loans... Some of those factors exist today but the key ones don't....but others that were not there in 2007 do like inflation... we will get through it but it take many quarters....

I bet you have some story’s to tell.
Well stated,

My opinion on where we are headed…. Again my opinion…
Inflation is real, meaning the cost of copper, 2x4s, labor, gas, will come down a bit, but they will NOT go back down to where they where a few years ago.

Therefore the cost of building a new house is still quite high. Which props up the value of existing homes.
The fact we have a high demand for housing.
We are allowing open borders, which creates more demand on housing.
World has changed since CV meaning more people want to be home owners..
Un Employment rates are very low, everyone is hiring.

Supply demand equation will keep the cost of housing pretty high for the foreseable future. Will it contract.. yes… most markets will contract. If the fed continues it path, with these rates, it forces the markets to cool down and should fix the problem. The part I dont fully know, GOVERNMENT SPENDING… if we keep spending the way we where, then the fed will have to increase rates even higher. That could make the mess alot worse. I think Biden admin has figured out they are a huge part of the problem.

It could be a short term down turn.
But it could be tip of the ice burg if we continue out of control spending. Which I doubt is going to happen.

Again, I dont have a crystal ball, just my best guess.

 

[hallett21]

I’m still trying to wrap my head around how many people are able to afford a 5k a month mortgage for a starter home in the IE. If I had to buy tomorrow I would be seriously screwed.

Dual income is my guess

 

[LargeOrangeFont]

I’m still trying to wrap my head around how many people are able to afford a 5k a month mortgage for a starter home in the IE. If I had to buy tomorrow I would be seriously screwed.

Easy. They don’t have hobbies and make $200k minimum combined and don’t save much money.

 

[attitude]

Easy. They don’t have hobbies and make $200k minimum combined and don’t save much money.

How many couples do you know that are/were making 200k combined in their mid 20s? That’s a ton of money for even a middle age family.

 

[attitude]

Dual income is my guess

I would assume, still a ton of dough that would need to be brought in every month.

 

[was thatguy]

How many couples do you know that are/were making 200k combined in their mid 20s? That’s a ton of money for even a middle age family.

That’s now near poverty level in Riverside!

 

[HB2Havasu]

How many couples do you know that are/were making 200k combined in their mid 20s? That’s a ton of money for even a middle age family.

In Southern California terms making $200K annually is not exactly putting you into Baller Status, lol. More like just getting by with enough leftover for a car payment and Starbucks addiction, lol

 

[LargeOrangeFont]

How many couples do you know that are/were making 200k combined in their mid 20s? That’s a ton of money for even a middle age family.

Most of them that I knew were right around that. In 06 I was in my mid 20s and thought it would be another decade before I could afford to buy. Affordability has gotten worse since.

Not everyone can afford to live in So Cal.

 

[hallett21]

How many couples do you know that are/were making 200k combined in their mid 20s? That’s a ton of money for even a middle age family.

A fair amount of our friends who are RNs (male and female), Engineers, Union tradesmen, Fire fighters & Police were brining in 150-180k combined by mid to late 20s.

But I think dual income is the only way you can afford a home today. Or you’re self employed and pulling in 150k+ a year on your own.

Now we’re all having kids and this is where it’ll get interesting. I think a lot of families will be relying on grandparents for child care.

 

[attitude]

In Southern California terms making $200K annually is not exactly putting you into Baller Status, lol. More like just getting by with enough leftover for a car payment and Starbucks addiction, lol

Trust me, I know that I am CA poverty lol! I’m talking about starter homes here, I would assume most people buy their first home in their 20s. 200k a year is a dream for most people in their 20s.

 

[attitude]

Most of them that I knew were right around that. In 06 I was in my mid 20s and thought it would be another decade before I could afford to buy. Affordability has gotten worse since.

Not everyone can afford to live in So Cal.

200k in 06!? I’m must be out of touch with reality lol.

 

[LargeOrangeFont]

Trust me, I know that I am CA poverty lol! I’m talking about starter homes here, I would assume most people buy their first home in their 20s. 200k a year is a dream for most people in their 20s.

If you were in your 20s from and buying from 2012-2019 maybe..if you just entered your 20s, maybe again in 2024 or later?

 

[LargeOrangeFont]

200k in 06!? I’m must be out of touch with reality lol.

Tom Leykis was saying it should be yore goal to be making $100k by 30.. 20 years ago.

 

[attitude]

A fair amount of our friends who are RNs (male and female), Engineers, Union tradesmen, Fire fighters & Police were brining in 150-180k combined by mid to late 20s.

But I think dual income is the only way you can afford a home today. Or you’re self employed and pulling in 150k+ a year on your own.

Now we’re all having kids and this is where it’ll get interesting. I think a lot of families will be relying on grandparents for child care.

With 2 kids who aren’t in school it really limits what jobs my fiancée can have. Right now she has an overnight job and doesn’t make much.

My parents work and her parents live in MT so we won’t get lucky with grandparents babysitting.

Most of my friends are still single and working 60-70 hours a week acting like ballers, kids will really throw a wrench in your plans lol!

 

[attitude]

If you were in your 20s from and buying from 2012-2019 maybe..if you just entered your 20s, maybe again in 2024 or later?

I missed the boat by a few years, if I made what I make right now back before 2019 I would definitely own a home. Now I just sit, wait, and lose hair.

 

[LargeOrangeFont]

With 2 kids who aren’t in school it really limits what jobs my fiancée can have. Right now she has an overnight job and doesn’t make much.

My parents work and her parents live in MT so we won’t get lucky with grandparents babysitting.

Most of my friends are still single and working 60-70 hours a week acting like ballers, kids will really throw a wrench in your plans lol!

Different lifestyle choices. Had our first kid at 31, bought house at 28. It’s tough having kids in your 20s in So Cal. Most of the folks I referenced didn’t have kids in their 20s.

 

[hallett21]

With 2 kids who aren’t in school it really limits what jobs my fiancée can have. Right now she has an overnight job and doesn’t make much.

My parents work and her parents live in MT so we won’t get lucky with grandparents babysitting.

Most of my friends are still single and working 60-70 hours a week acting like ballers, kids will really throw a wrench in your plans lol!

I’d sell pictures of my feet on the Internet if someone would buy them

 

[LargeOrangeFont]

I missed the boat by a few years, if I made what I make right now back before 2019 I would definitely own a home. Now I just sit, wait, and lose hair.

Keep saving.. the market will come to you. I’ve been there.

 

[MSum661]

If there was any doubt next months report is going to show the USA is in a recession the Feds last 2 rate increases just pushed the economy over the cliff by killing the housing industry.

The real problem is Washington DC has a spending problem going back to the George W Bush years. The Fed can no longer print enough or borrow enough to cover the Biden Administrations rampant spending. The only thing they have remaining to stave off inflation is raising rates higher than the inflation rate to put it in check, even if that means putting the economy into a depression. It’s all burning down like Rome and Brandon has Shummer negotiating with Manchion on a $7 Trillion Dollar Build Back Better Boondoggle

I agree.

When Powell was asked this morning about 100 bps hikes, he didn't exclude those.
Some analyst's say we can see the next 4 straight months of 9% CPI while Powell's target is closer to 2.5%. lol.
It's hard to imagine how they can spike rates to stop runaway inflation, unwind their balance sheet of approx. $9 Trillion, (MBS, Tresuries, Stimulus), and not nuke the overall economy as a result.

Next Wed. is the next read from Case-Schiller.
Should be interesting to see if this chart changes any.

 

[Xring01]

With 2 kids who aren’t in school it really limits what jobs my fiancée can have. Right now she has an overnight job and doesn’t make much.

My parents work and her parents live in MT so we won’t get lucky with grandparents babysitting.

Most of my friends are still single and working 60-70 hours a week acting like ballers, kids will really throw a wrench in your plans lol!

Been there done that..
My wife and I moved to Murrieta Ca around 1997. All her relative where 450 miles north in NorCal, and all of my family was in Texas. Hell my oldest was close to 3 years old before we got 1 night away from the kids…but that cost me airline tickets from Tex to CA for my sister to come visit.

We made it work on just one income. Mine…
Its not easy, its may not be the best choice for financial success.

But I probably would not have had kids, if both of us had to work. It was something that was important to me. I wanted one of us to be there as they grew up. Honestly, where I am standing now…
22 year old thats graduated Sum-a Cum Laude with Bach of Reg Nursing Degree
24 year old on path to be a Mech Eng who has invites to HAAS, Polaris, Lock Martin and others for internships.

I was never a baller though. Family vacation was camping at Lake Trinity, pretty low budget.. we tent camp even to this day. My wife and I only took one vacation without the kids, and it was severely discounted due to family connections.

It boils down to whats important, whats the plan to get to where you want to be, be ready for lots of curve balls and few crisis‘s along the way.

But due to my early decisions, I will have to work till 65 if I can. But I dont regret one moment of it.

Why, you only get 18 years with your kids… 18 summers, 18 spring breaks… the biggest question you have to ask, have I used the past ones wisely, and what am I going to do to make the best of the future ones.

Again,,, thats my opinion

 

[Flatsix66]

Tom Leykis...

Bring back flash Friday.

 

[was thatguy]

“The best laid plans of mice and men”.



I made $250K - $350K for years, bought 4 acres and a big ass ranch house with a 40K gallon pool!
Diving board and everything!
3 car shop, drag boats in every stall! Lol.
Had to sell the Hydro to make a spot for the corvette! The epitome of douchebaggery!!
In a one year span EVERYTHING disappeared except the Miller and my wife.
5 years later, all I had was a laborer job and the Miller…

Not once did I lose any hair or stress over shit like houses and cars and interest rates.
Our property was in the only possible county where even an idiot like me could lose money on a house. Lol

Do not fall into the trap of requiring perfect timing or perfect returns or any return at all.
It can all end with a single stroke of a pen, a single phone call, a single happening of a thousand different means.
I think back and can identify a never ending string of decisions and expenditures and vacations that make no financial sense whatsoever , and I don’t have a single regret, nor do I have a single grey hair on my head, and at 60 I can still grow a full head of hair!

My point is don’t get too wrapped up in the grind. It isn’t worth it.
Yeah, at 60 I still have to work some more. But pulling close to $200K working half the time is not too bad a deal for an 11th grade dropout living by himself!

 

[was thatguy]

Been there done that..
My wife and I moved to Murrieta Ca around 1997. All her relative where 450 miles north in NorCal, and all of my family was in Texas. Hell my oldest was close to 3 years old before we got 1 night away from the kids…but that cost me airline tickets from Tex to CA for my sister to come visit.

We made it work on just one income. Mine…
Its not easy, its may not be the best choice for financial success.

But I probably would not have had kids, if both of us had to work. It was something that was important to me. I wanted one of us to be there as they grew up. Honestly, where I am standing now…
22 year old thats graduated Sum-a Cum Laude with Bach of Reg Nursing Degree
24 year old on path to be a Mech Eng who has invites to HAAS, Polaris, Lock Martin and others for internships.

I was never a baller though. Family vacation was camping at Lake Trinity, pretty low budget.. we tent camp even to this day. My wife and I only took one vacation without the kids, and it was severely discounted due to family connections.

It boils down to whats important, whats the plan to get to where you want to be, be ready for lots of curve balls and few crisis‘s along the way.

But due to my early decisions, I will have to work till 65 if I can. But I dont regret one moment of it.

Why, you only get 18 years with your kids… 18 summers, 18 spring breaks… the biggest question you have to ask, have I used the past ones wisely, and what am I going to do to make the best of the future ones.

Again,,, thats my opinion

My brother!
(Traeger or no Traeger!)

 

[Havasu blue label]

Come on mr orange 200 a year don’t cut it . It’s called over extended one bad month there screwed

 

[Havasu blue label]

Property taxes will eat them forget the 3 percent mortgage shit is going to hard

 

[hallett21]

Property taxes will eat them forget the 3 percent mortgage shit is going to hard

I think most people just include it in their payment.

I think we’ve moved entirely into a payment driven ideology vs what things cost.

 

[Havasu blue label]

Yes sir always impounded smart move hopefully everyone thinks that way

 

[was thatguy]

Come on mr orange 200 a year don’t cut it . It’s called over extended one bad month there screwed

Its “they’re”…just sayin!

 

[was thatguy]

I think most people just include it in their payment.

I think we’ve moved entirely into a payment driven ideology vs what things cost.

Car salesmen perfected that 20 years ago…!

 

[TeamGreene]

These are the words my wife and I always lived by~

“A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove... but the world may be different because I was important in the life of a child.”​

 

[Let It Ride]

My wife is a realtor in Ca and I’d be scratching my head when she was telling me people paying well over asking price, waving appraisal just to get a house. I asked her how are they doing it and her response was that they are qualifying for their loans, not like last time when you have a pulse and qualified for a loan. But now with a recession coming their talking about jobs being cut along with with work hours, I hope that’s not the case. I’ve seen this before when I bought my vacation home in Havasu in 2005 and it wasn’t nice, luckily I was able to stick it out and hold onto it. Havasu took a big hit being such a small city with a million realtors, some people made out others sank. My opinion is that if you are caught in a work situation due to the recession and try selling a house you paid well over what it’s not worth, that’s going to cause some serious issues.

 

[Havasu blue label]

Maybe a month ago they where selling but big market areas it has slowed . I have two close friends that own mortgage co and title and the real estate office . His comment is they should of saved there money. They pay him 1500 per month for a desk in one office he has 3 offices very wealthy Mexican guy

 

[Tom Slick]

I agree.

When Powell was asked this morning about 100 bps hikes, he didn't exclude those.
Some analyst's say we can see the next 4 straight months of 9% CPI while Powell's target is closer to 2.5%. lol.
It's hard to imagine how they can spike rates to stop runaway inflation, unwind their balance sheet of approx. $9 Trillion, (MBS, Tresuries, Stimulus), and not nuke the overall economy as a result.

Next Wed. is the next read from Case-Schiller.
Should be interesting to see if this chart changes any.

View attachment 1128711

Sadly for all of us their plan is to nuke the economy.