Want to ask this of the broad range of people here, what do you see?

[monkeyswrench]

There are people on this board from all financial and business backgrounds, from all over. What do you see economically speaking? Please try to leave the political side out of it. I personally feel they're all liars. That being said, this is what I mean: Things seem quite the same as a few years back. Just heard on the news that some are pulling equity to pay household bills. I've been watching them build houses like all hell out here. Just a lot of things that match the characteristics of before. I live in a smallish town 100 miles N/NW of Phoenix, but don't head there with any regularity to know the cycle there. Things have really picked up here, causing prices for general construction to go up...everyone is busy. For now at least. From the people I talk to that have been here for more than 10 years, it was the same before the last decline. So what is happening in your neck of the woods?
I try to be ready for the next downturn. The product of a construction home growing up I guess. (Rain=Dad's home, though cool when young, bad when you're old enough to realize Dad's home= Dad's not getting paid!) I hope I don't ruffle any feathers, but curious if anyone else has seen this in their area.

 

[JD D05]

Economy is really good here but it always comes back down. Lots and lots of pools going in, people accessing money from refi's etc. It will adjust just tough to say to what degree.

 

[Albert]

Housing starting to slow a bit normal due to the fall season coming but def dipping asking prices are now starting to decline on sales by 20-30k

 

[c_land]

Oh boy here we go

 

[Ziggy]

Pants on fire.
.
It's got to hit a wall again, but just when will that be and what will it affect the most?

 

[2Driver]

The only sure thing is, it never crashes at the bottom.

 

[mitch6601]

In your neck of the woods (my parents live in that area) they have been growing steady for a while now. I honestly cant stand the traffic up there anymore its already awful and will only get worse with more homes going in. My personal opinion is I think they have grown too fast and too much for the infrastructure in the area.

Prescott and its valley are beautiful but they have outgrown the streets and hwy's already. I believe water and sewer is next on the list in my opinion.

 

[Singleton]

Economy is moving along better then it has in the past few years, but companies are more worried about stock price then employees. Happy, well compensated employees are willing to do more for companies. IMO employee wages are not growing as needed and sooner or later this will cause an issue.

 

[RCDave]

I honestly do not believe the economy is as rosy as some media outlets purport or what is coming out of the white house.

The economic statistics released by the government are also VERY misleading (such as significantly under-reporting unemployment, inflation, etc).

Plus the level of deficit spending, which is trending toward $1 Trillion annually. The chickens will come home to roost on that and future generations.

Tariffs will hurt the consumer significantly but help the federal government offset the tax cuts.

I also believe the stock market and real estate valuations are overheated and poised for downward adjustment. The fundamental value drivers are not consistent with current prices.

 

[RiverDave]

All of the marine shops are slammed and trying to catch up, most of them have backlogs of work at this point and customer service is going out the window.. Not intentionally just what happens when you have that much work, and so little time.

Baller Boat sales are out of control right now. Big Center Consoles / Twin 400 Cats and they are getting all the money and back logged.

On a smaller note, home sales have slowed out here, and there is price reductions. The price reductions stem from the fact that some of these sellers are just unrealistic on the prices they are asking and are hoping to "win the lottery" and cash out big.

I have friends with some businesses in different arenas and it seems it's kind of a split right now.. Some are busy as hell, and others are saying they are completely dead right now?

Either way I'm concerned we are going to go into another dip. I know I'm not prepared for it. Given the choice I'd like to sell everything (including my house) and sit on the cash. That said, I don't owe much and my mortgage is dirt cheap so we are going to stay.. In my line of work having a boat isn't really an option. LOL So selling them isn't really in the cards either.

I'm putting as much $$ in the bank as I can right now.

RD

 

[530RL]

No idea as my crystal ball has a construction defect. However some observations.

Hard to find any labor let alone competent labor, input prices are going up very rapidly, plenty of volume but not enough ability to pass on the input costs whether it be labor or material. Margins are getting squeezed but have been saved by very high tax reductions.

Will be interesting to see how q1-19 compares to q1-18 as the boost from the tax cuts will no longer reflect growth as the comparative tax rates will be the same.

Will also be interesting to see how much more rates rise as rising rates bring down the relative value of any asset's future cash flows.

Pigs get fat, Hogs get slaughtered.

 

[thmterry]

All the people I talked to at Sand Sports show said people were buying like crazy. The show was so busy people had to park miles away. When people have toy money the economy is usually good. Just like in the past it can end pretty quick.

 

[CLdrinker]

Great economy’s come and go but boat payments are 10yrs...

 

[DrunkenSailor]

Affordability index on property is looking bad. We will see a slow down in the housing market. Mortgage companies are way down with interest rates going up. One of the big wholesale/correspondent lenders down the road is over 100mm off of goal for the month. Lots of downsizing in the industry. We have looked at a few mortgage originators to buy recently and there are a lot of companies who survived the last crash losing money right now and in pretty bad shape. Ditech is in receivership... The housing market is just one indicator but it doesn't look good right now. I am headed out to a big conference in Miami with all the major players next week. I will let you know what the vibe is.

 

[EmpirE231]

Things are looking great! just as they were before the last down turn. The sex is always best just before it ends

 

[Bpracing1127]

In my line of work (aerospace) we are busier than ever and hiring like crazy. We have hired 20+ people this year alone. And no one has really left the company either. What I do see is we are still paying workers a fair wage but not enough to live in So cal yet alone Orange County. Our business is solely focused on profit numbers at this point, because of that they are not concerned with paying people more money to live. I am seeing things cost more money to the consumer more than ever too. With stagnant wages and little to no savings and or equity the working millennial generation has. I don’t see the economy holding out as the last of the wealth gets spent by our fathers. With all that being said. The amount of money being made by a select few is incredible right now and I don’t see anything changing for at least a few years 2-5 years.

 

[Englewood]

Home Sales have slowed, drastically. The data is typically announced a few months after. I expect the first qtr of 2019 to be very slow in RE once the news hits of the reduced number of sales in Q3/Q4 of 2018.

 

[BingerFang]

There are people on this board from all financial and business backgrounds, from all over. What do you see economically speaking? Please try to leave the political side out of it. I personally feel they're all liars. That being said, this is what I mean: Things seem quite the same as a few years back. Just heard on the news that some are pulling equity to pay household bills. I've been watching them build houses like all hell out here. Just a lot of things that match the characteristics of before. I live in a smallish town 100 miles N/NW of Phoenix, but don't head there with any regularity to know the cycle there. Things have really picked up here, causing prices for general construction to go up...everyone is busy. For now at least. From the people I talk to that have been here for more than 10 years, it was the same before the last decline. So what is happening in your neck of the woods?
I try to be ready for the next downturn. The product of a construction home growing up I guess. (Rain=Dad's home, though cool when young, bad when you're old enough to realize Dad's home= Dad's not getting paid!) I hope I don't ruffle any feathers, but curious if anyone else has seen this in their area.

Are you from Cottonwood? Ahah

I'm in the commercial equipment lending industry and we've broken our company records the last 3 years in the row with no slowing down anywhere in sight...

 

[gqchris]

I read an article that HELOCS are at an all time high again and that it has surpassed 2008 numbers. To me, that seems like a huge indicator of a shit show coming again.

And the SAnd Show was a good indicator that people are spending like its never gonna end!

 

[JD D05]

What does everyone think will happen to land prices when the corrections happens? I get construction cost and all that but does land come down much?

 

[BingerFang]

 

[lbhsbz]

In rehabbing my old house to sell it, I needed some stucco work done. I called about 6 different guys and of the 3 that called me back, none could get to it in less than a month...even though it was about a 20 minute job (I can make stucco smooth, but can't duplicate the texture). I ended up finding a handyman that got it done (in 20 minutes) for about $300.

Tried to find a few other trades to do some work because I was short on time...hard to get a call back, let along someone to do anything within a few months. Everyone is busy right now. In my area of Long Beach where typically you don't see much construction or any real home improvements going on, there are quite a few additions / major remodels happening.

I would say that the economy is doing pretty OK right now....although I'm broke. LOL.

 

[boatnam2]

Just waiting for things to take a shit so I can by some stock and get some construction done at a normal price, sooner the better!

 

[Cole Trickle]

I'ts starting to feel a tad like 2006 to me.....

One of my best friends has a masters from USC in realestate. Big commercial broker that predicted the last drop perfectly when he sold his home in December 2005. I just talked to him last week and he just sold his 1.1 million 1900 sq foot house in Irvine. Asked him why and he said it's not worth what I sold it for and I plan on buying it back in a couple years for 650-700K.

People have somehow forgotten all about the hard times and are back at it with the crazy spending and cash outs for toys and new pools.

The housing market has without a doubt slowed. My mom is selling her house and 6 months ago the realtor said to list it at 1.4 now they are finally ready and listing it at 1.19

Save your money and pay off bills. I got hosed the last go around but am in a much better place financially to take advantage next time.

 

[HNL2LHC]

What does everyone think will happen to land prices when the corrections happens? I get construction cost and all that but does land come down much?

Depends on where you are at. Our family has several homes in different areas. Typically the last area to show apreciation is the first to depreciate. The last down turn the areas that were out of price for most retained pricing. The price did not dip much because once it went down 10% people on the fence found it reasonable. The suburbs did not fair as well. The properties went down around 30%.

That is one of the good things about Hawaii. As a whole the pricing did not go down as much because there are so many groups looking at he islands as a place they want to be. In the 80s the Japanese inflated the pricing, 2000s were the Chinese, 2010 a lot of Californians.

 

[EmpirE231]

When people are considering tiny homes in Havasu... that is a bad sign lol

 

[Classic Daycruiser]

I'll start with this article today on CNBC business news.

https://www.cnbc.com/2018/09/20/home-sellers-are-slashing-prices-especially-in-california.html

 

[Riverbound]

not much to say that hasn't already been said except the only difference between now and the last time is this go around people know what can happen and I think there is a whole group of people that are more prepared for it. pulling back on unnecessary expenditures, making better buying decisions, etc., on the other hand when you look at toys sales they are through the roof so that indicator reflects differently.

I can tell you this much I'm looking forward to the "correction" so that the river and lakes clear up and having work done on my house is cheaper

 

[RCDave]

I can tell you this much I'm looking forward to the "correction" so that the river and lakes clear up and having work done on my house is cheaper

X2!!! Its nuts out there again like 2004-2005 but worse

 

[2Driver]

I did my first hard money loan in 2007 on a premium 1 acre golf lot at the top of Desert Mt in Scottsdale.

I lent 50% of the value and the broker said if the value ever drops more than 50% we’ll have a lot more to worry about than this lot

Not long after it dropped 55%.

 

[BHC Vic]

I read something that kind of scares me the other day. Something about if you have school loans but you are trying to buy a house those loans won’t be held against you. Debt to income. To me that’s scary and I hope I read wrong

 

[ka0tyk]

Like previous stated economy is up, but its not being put into employees. Instead buying back stock. Hiring is up to fill demand but not a fair share. Only way to get raises is to leave and get a whopper somewhere else. Homes still priced where they're unobtainable or unreasonable for most. Then market is shifting slowly with prices dropping but rates going into the 5% soon, so basically loaning money to people that dont have it in order to get into a home thats still out of their budget.

Sounds great... I personally cant wait for a crash so I can capitalize on everyone elses mistakes.

 

[Bigbore500r]

The construction market in CA is on fire, especially major metro areas. Big commercial projects have been flying for the past 5 years, we are still selling jobs at a record pace now. Much of this work will not be executed for 18-24 months.

That being said - I'm keeping things mellow. Hopefully staying put in my house with my "baby sized" mortgage and living comfortable. We want a larger house, but don't want to pay the ridiculous price tag for what they are selling for now. Even though we would sell ours high and have alot of equity, the realtors get a big chunk of that, then we are stuck with the huge property taxes due to the sales price of the new property. Better safe than sorry!

 

[Mandelon]

Home sales may be slowing, but Notices of Default are at very low numbers. This means there's not foreclosures. We are still several years away from any sort of housing crash. And I doubt it will be anything like the last one. Expect a slowdown and leveling off of prices. Maybe even a slight pullback for overpriced homes.

In many markets there is a lack of inventory. Historically lower than the average. This leads to pricing increases. As interest rates rise, the demand for refinance drops, so that explains the loan broker woes.

Obama's economy was the slowest of any in recent history. This would serve to delay the normal 7 to 10 year cycle. No need to worry yet, but don't get yourself in debt if you can help it.

Homes are being built because there is demand. What happens is that too many builders try to fill the demand. It takes a while to get developments approved and built, and sometimes they end up with too much product coming to market all at once. More supply = lower price. Bad for the builder, but better for the consumer.

Unemployment is low, gas prices are reasonable (except in California), tariffs will raise prices a little bit, but probably won't kill any industries.

Full speed ahead for a couple more years.

 

[Done-it-again]

Once you start seeing layoffs in the home market. That’s when things are changing.

Builders are already giving larger incentives to close on houses. When that slows everything related will slow. Layoffs will be seen in the loan and escrow side first (probably soon) and trickle down. Business’s will layoff quicker this go around as employees are the biggest overhead.

This is my 2 pennies worth.

 

[D19]

Once you start seeing layoffs in the home market. That’s when things are changing.

Builders are already giving larger incentives to close on houses. When that slows everything related will slow. Layoffs will be seen in the loan and escrow side first (probably soon) and trickle down. Business’s will layoff quicker this go around as employees are the biggest overhead.

This is my 2 pennies worth.

Wells Fargo Mortgage just laid off 600 people.

 

[RCDave]

Wells Fargo Mortgage just laid off 600 people.

I'm surprised they are not providing each applicant with multiple mortgage loans instead of one! lol

 

[River Lynchmob]

The 2 unions that we are signatory to are both empty...literally not one journeyman or apprentice out of work. I see the house sales slowing, I have read several things about that, one there is a low supply and people that are looking to upgrade have decided to wait it out. We are moving into the fall and things typically slow in that time. If things do take a down turn we are in a good position with almost zero debt and look forward to taking advantage of it.

 

[BHC Vic]

https://www.google.com/amp/s/www.ba...udent-loan-debt-and-afford-mortgage.aspx/amp/
Reading some of this stuff scares me. If you can’t lay off your debt getting creative isn’t the answer. Imo

 

[BHC Vic]

Our halls are empty. Everyone is working. But it’s already been said. 3 or so years and hold on. That’s according to the “experts”

 

[LargeOrangeFont]

Wake me when the economy starts shedding jobs month after month. I'm ready to buy some more toys and property on sale.

 

[LargeOrangeFont]

I read something that kind of scares me the other day. Something about if you have school loans but you are trying to buy a house those loans won’t be held against you. Debt to income. To me that’s scary and I hope I read wrong

The debt is still held against you. There are ways to consolidate it, or reclassify it so it is not part or a lesser part of your debt to income ratio.

 

[BHC Vic]

The debt is still held against you. There are ways to consolidate it, or reclassify it so it is not part or a lesser part of your debt to income ratio.

If ou can’t pay a student loan off how can you pay a house off? First thing my wife and i did was pay off her loans. Then we got the house. Then the car

 

[BONER]

I'm an outside Sales Rep. I'm getting lots of calls for expansion and growth. The Economy out here in Phoenix is booming. I also know this because I knock on 50 doors a day, Cold Calling, and everybody is busy as shit.

Medical Offices, Law Offices, Contractors, CPA's, Printing Shops, you name it. They're all super busy.

 

[LargeOrangeFont]

If ou can’t pay a student loan off how can you pay a house off? First thing my wife and i did was pay off her loans. Then we got the house. Then the car

They are trying to sell mortgages here.. they don't care as long as you have a job.

The student loan is not wiped from your debt to income ratio it does not sound like, unless someone else is paying it for you, which sounds like the only true loophole.

 

[LargeOrangeFont]

I will say those that think it is going to drop as hard as last time are probably in fantasy land. Most of those people said we'd be in financial ruins by now already. Remember all the people saying "Just wait in 18 months..." Here we are 2+ years later.

It really does not matter how much debt you have as long as you have a job to pay for it all.

 

[BHC Vic]

They are trying to sell mortgages here.. they don't care as long as you have a job.

The student loan is not wiped from your debt to income ratio it does not sound like, unless someone else is paying it for you, which sounds like the only true loophole.

I’m far from an expert but I’m pretty sure history is repeating itself. When the construction comes to a halt in about 3 years it’s going to be a shit storm. Olympics will help but we’ll see. I sit in a lot of boring meetings about it. Basically our whole vision 2020 thing is about us not becoming extinct

 

[LargeOrangeFont]

I’m far from an expert but I’m pretty sure history is repeating itself. When the construction comes to a halt in about 3 years it’s going to be a shit storm. Olympics will help but we’ll see. I sit in a lot of boring meetings about it. Basically our whole vision 2020 thing is about us not becoming extinct

Your industry will be one of the hardest hit in the next recession, certainly. If you think houses are going to drop 40%-50% again here, it ain't going to happen. A recession is coming at some point however. The construction industry will build itself right up to and over the cliff of that recession.

 

[BHC Vic]

Your industry will be one of the hardest hit in the next recession, certainly. If you think houses are going to drop 40%-50% again here, it ain't going to happen. Certainly a recession is coming at some point.

I hope the housing market doesn’t crash but I know my industry will have a major slow down. Shedding thousands of members just like last time

 

[BONER]

I hope the housing market doesn’t crash but I know my industry will have a major slow down. Shedding thousands of members just like last time

My Old Man's a Framing Contractor in Tucson. He's busy AF too. But, He got hit REALLY hard 2010- 2016.