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

[LargeOrangeFont]

When you see this, times are good



http://www.offroadloans.com/

Every time I buy something for my RC car a pop up comes up asking if I want to finance it LOL.

 

[LargeOrangeFont]

Several of my clients walked away from long term homes when the walking was good. One really stood out to me as the client was late 50's and bought the house for sub 200K in the 80's yet walked away because he had a 650K + mortgage on the house.....Insane

That is called bank robbery.

 

[Bpracing1127]

Every time I buy something for my RC car a pop up comes up asking if I want to finance it LOL.

Me too! Maybe I should finance my new motor lmao. I think it 26% too

 

[DrunkenSailor]

Last time was a bit of a perfect storm with multiple factors leading to the downturn. Low interest rates due to the tech bubble, deregulation on investment, Arm resets in conjunction with rising interest rates later in the decade and companies over invested in bad loans. Some things are different, some are the same. Interest rates are rising again and banks can still invest in the MBS market which creates an insatiable market to write new debt. We are back to pre 2008 levels in terms of the MBS levels. That being said, loan quality has remained much higher than it was in the 2000's. LTV's are lower, the option arm's and no doc loans are rare. Borrower credit requirements are higher. The major insurer of mortgages today is the US government not companies like AIG and the rating agencies are doing a better job at rating the securities which investment funds depend upon to properly balance their portfolios.

The origination industry has been clamoring for the return of sub prime and its associated cash flow and it has occurred a bit with some lenders providing Non-QM mortgages but the overall percentage of these loans in bank and hedge fund portfolios is low. Non-QM is a completely different animal than sub-prime with tougher requirements. Heloc's and the like aren't getting written anticipating HPA anymore and most require LTV's under 85%.

With the loans backing the securitization's today being of a much higher quality we are in a better position today.

I think the main indicator on the Mortgage side will be when bond trading market slows and this hasn't happened. The investment market is still strong with the stock market performing the way that it is, less funds are relying on MBS within their portfolios. I think the next downturn will have more to do with a stock market correction, higher interest rates and an overall economic slowdown than it will have to do with mortgage.

The securitization market as a whole is nearly twice as large today then it was in 2006 and it isn't mortgage that is driving it. Corporate securities are at an all time high and have doubled since 2006. Treasury securities are also at an all time high and have more than tripled since 2006. If you want to look at over extension and industries that are going to take the worst hits that's where I would start. It concerns me that so many have turned to the government as the safe investment since the crash that treasury securities have tripled. Here is a cool chart.

https://www.sifma.org/resources/research/bond-chart/

 

[LargeOrangeFont]

Last time was a bit of a perfect storm with multiple factors leading to the downturn. Low interest rates due to the tech bubble, deregulation on investment, Arm resets in conjunction with rising interest rates later in the decade and companies over invested in bad loans. Some things are different, some are the same. Interest rates are rising again and banks can still invest in the MBS market which creates an insatiable market to write new debt. We are back to pre 2008 levels in terms of the MBS levels. That being said, loan quality has remained much higher than it was in the 2000's. LTV's are lower, the option arm's and no doc loans are rare. Borrower credit requirements are higher. The major insurer of mortgages today is the US government not companies like AIG and the rating agencies are doing a better job at rating the securities which investment funds depend upon to properly balance their portfolios.

The origination industry has been clamoring for the return of sub prime and its associated cash flow and it has occurred a bit with some lenders providing Non-QM mortgages but the overall percentage of these loans in bank and hedge fund portfolios is low. Non-QM is a completely different animal than sub-prime with tougher requirements. Heloc's and the like aren't getting written anticipating HPA anymore and most require LTV's under 85%.

With the loans backing the securitization's today being of a much higher quality we are in a better position today.

I think the main indicator on the Mortgage side will be when bond trading market slows and this hasn't happened. The investment market is still strong with the stock market performing the way that it is less funds are relying on MBS within their portfolios. I think the next downturn will have more to do with a stock market correction, higher interest rates and a overall economic slowdown than it will have to do with mortgage.

The securitization market as a whole is nearly twice as large today then it was in 2006 and it isn't mortgage that is driving it. Corporate securities are at an all time high and have doubled since 2006. Treasury securities are also at an all time high and have more than tripled since 2006. If you want to look at over extension and industries that are going to take the worst hits that's where I would start. It concerns me that so many have turned to the government as the safe investment since the crash that treasury securities have tripled. Here is a cool chart.

https://www.sifma.org/resources/research/bond-chart/

Dont muck up all these feelings with you doses of reality and facts.

 

[JBS]

I live 3 blocks due east on 1.8 acres. The 607 bucks a foot you received is a grand slam in that neighborhood.

Nice job. Excellent result.

Wait for the new tax bill after closing. They will want to dump that house

 

[rivermobster]

I build street rods and muscle cars and we are just slammed with work. All the other quality shops are also buried in work also. There are also a lot of shops folding up as well, but that's probably because that's what should happen to them. I would say over 50% of my jobs are builds that came from somewhere else that the shop just couldn't get right. It's sad to see what people are willing to do to just to get into somebody's wallet. "I wish I would have found you first!" is something I have heard all too often.

I think if you are honest and do good work, there is plenty of work to be had, regardless of what field you are in. The people I have that support me (trans shops, engine shops, body shops) are all buried in work as well. These are shops I have used for years so they all have a solid reputation as well. Business is Strong here in So Cal. I can't see any reason to leave.

 

[DrunkenSailor]

Think about that for a minute. Treasury bond securities have tripled and the government is the main insurer on every mortgage loan written within the US. Want to talk about too big to fail? Scary shit.

 

[EmpirE231]

Your first post made it seem like you recall things fell apart very quickly. It took 18 months. There was an economic slowdown, followed by job losses, followed by more job losses and then deep recession. Everyone keeps talking about 2006 highs, and 2008-2009 lows.. remember there was a 2007 in there. The lesson is to pay attention to indicators. If you thought everything was all good and suddenly lost your job.. it is too late.

I worked in the mortgage industry and got laid off in 2006, just after the "peak". They knew the party was over. They laid off 17,000 people that day.

Many people don't learn and more importantly, most don't really care. If their toys get repoed..who cares? There is no real consequence. That will be the first thing they stop paying for when they lose a job.

People are not going to lose houses like they did last time. There is little reason for them to walk away... If they bought more than 2-3 years ago, rent is probably as high or higher than their house payment anyway. People walked away from their houses because they could not afford the increasing payments and had no skin in the game. An increasing payment is not a problem with a normal 30 year fixed mortgage like most people have now.

If you are waiting around thinking housing is going to drop 40%+ nationally again in this generation.. it isn't going to happen.

By falling apart... I didn't necessarily mean everything suddenly stopped. It definitely takes time... I was referring to the beginning of the decline.

The not walking away because rent is too high is a good theory... but if an economic decline starts causing the job losses... and people can't pay those payments... they don't really have any other choices. people will fall behind on mortgages, and rents... and when that becomes more common, it will trigger more economic decline and the cycle continues.

I still feel 3.5% isn't much skin in the game... and when the debt is so high that people can barely keep up with their non-adjustable 30yr mortgage... all it takes a few less overtime hours, or slight pay decrease to get the ball rolling on falling apart. My wifes hair girl was just telling he about how they just bought a house... had to be in the desirable part of town to be affordable. they were also able to get a higher loan amount to finance in their closing costs... (to me this sounds like 100% + financing again?)

 

[BajaT]

I see silver at $14/ounce!!!

 

[BHC Vic]

Financing is always possible just depends on how creative you can be.

 

[Flying_Lavey]

I'll toss in my $.02....... I have one of those federally insured loans with zero down and most all closing costs rolled into the financing. If anybody thinks these loans are like they were pre-'06 with just walk-in, sign your name, social security number, pay check stub or 2 and get a zero down loan, you are very wrong. They now crawl up every crevice they can see financially and drive into it. They will go back over a year into your entire bank statements for every account you have.. Couple that alomg with the lack of changing mortgage payments and the fact that rents are absolutely through the roof, people will not be walking away like they did before. Also, i believe a lot of lenders have learned a bit from last time and will work woth borrowers more so to prevent a foreclosure than they did before.

Also, another large contributing factor to the last recession was the crazy high gas prices. They arent really cheap right now, but they arent $5+/gallon like they were back then either all over So Cal.

Sent from my LM-G710VM using Tapatalk

 

[OldSchoolBoats]

Seriously, sick and tired of seeing these threads.

This market is not ANYTHING like what happened in 2008.

You would think that after reading all the other EXACT SAME threads, people would have a clue by now.



Sent from my Pixel using Tapatalk

 

[rivermobster]

Seriously, sick and tired of seeing these threads.

This market is not ANYTHING like what happened in 2008.

You would think that after reading all the other EXACT SAME threads, people would have a clue by now.



Sent from my Pixel using Tapatalk

You must be new here. Welcome!

 

[RCDave]

Sick of what? A discussion on various opinions on the state of the economy? Why so angry? Its just a discussion.

Much hasn't changed with the economy over the years. Massive money printing. Ever increasing deficits (funded and unfunded liabilities topping $100 Trillion Dollars). Runaway spending programs. Massive government intervention in domestic and international markets.

The every increasing money supply has caused many many dollars chasing around limited investment opportunities (especially for the wealthy). Consequently, we have rising asset valuations in the stock market and real estate. Much is artificially induced by government. This creates the opportunity and likely volatility in markets.

Buy low and sell high! Things are currently high

 

[OldSchoolBoats]

Sick of what? A discussion on various opinions on the state of the economy? Why so angry? Its just a discussion.

Much hasn't changed with the economy over the years. Massive money printing. Ever increasing deficits (funded and unfunded liabilities topping $100 Trillion Dollars). Runaway spending programs. Massive government intervention in domestic and international markets.

This is the same discussion that's been going on for years. Housing prices were supposed to drop or flatten out 2 years ago according to Nice Guy Eddie..... But of course they didn't.

and then now because some people are using their Equity to consolidate debt or renovate their house or buy another property...etc...... We must be heading towards another massive real estate collapse [emoji23][emoji23]

seriously this discussion just gets old and it's like beating a freaking dead horse.



Sent from my Pixel using Tapatalk

 

[RCDave]

This is the same discussion that's been going on for years. Housing prices were supposed to drop or flatten out 2 years ago according to Nice Guy Eddie..... But of course they didn't.

and then now because some people are using their Equity to consolidate debt or renovate their house or buy another property...etc...... We must be heading towards another massive real estate collapse [emoji23][emoji23]

seriously this discussion just gets old and it's like beating a freaking dead horse.



Sent from my Pixel using Tapatalk

History does repeat itself often. Some people never learn. Debt is extremely risky, especially when over-levering to purchase toys.

 

[OldSchoolBoats]

History does repeat itself often. Some people never learn. Debt is extremely risky, especially when over-levering to purchase toys.

Actually it doesn't because right now Americans are actually sitting on the most equity in decades and they aren't taking it out. Everybody sees other people buying toys in automatically assumes that they must have used their house as an ATM to get it. Assumptions in my opinion is your first screw up. Nobody Knows the story behind how they got it. Maybe they inherited some money and bought it with that, maybe they got an awesome loan at the credit union and make the payment on it.. who knows and who cares!!

The downturn of 2008 was a once-in-a-generation occurrence. Most of us will never see something like that again in our lifetime.

People need to stop living in the past.



Sent from my Pixel using Tapatalk

 

[RCDave]

Actually it doesn't because right now Americans are actually sitting on the most equity in decades and they aren't taking it out. Everybody sees other people buying toys in automatically assumes that they must have used their house as an ATM to get it. Assumptions in my opinion is your first screw up. Nobody Knows the story behind how they got it. Maybe they inherited some money and bought it with that, maybe they got an awesome loan at the credit union and make the payment on it.. who knows and who cares!!

The downturn of 2008 was a once-in-a-generation occurrence. Most of us will never see something like that again in our lifetime.

People need to stop living in the past.



Sent from my Pixel using Tapatalk

Have you studied the current level of consumer and corporate debt? It might just surprise you. I am not saying we are in for a crash of 2008 proporations. But the risk of recession is clearly a distinct possibility.

https://www.cnbc.com/2018/05/21/consumer-debt-is-set-to-reach-4-trillion-by-the-end-of-2018.html

https://www.cutimes.com/2018/06/15/...rage-onto-riskiest-u/?slreturn=20180821161944

P.S. my career is in the banking sector

 

[OldSchoolBoats]

Have you studied the level of consumer and corporate debt levels? It might just surprise you. I am not saying we are in for a crash of 2008 proporations. But the risk of recession is clearly a distinct possibility.

P.S. my career is in the banking sector

I have been watching the yield curve flatten out for some time now. I know we are due for a recession, but a recession isn't going to bring down the housing market which seems to be everybody's point of contention these days.

Sent from my Pixel using Tapatalk

 

[HB2LHC]

Crazy busy at my shop, but im always planning for the dip. SAVE SAVE SAVE. If I buy/build something its cash.

 

[cxr]

Actually it doesn't because right now Americans are actually sitting on the most equity in decades and they aren't taking it out. Everybody sees other people buying toys in automatically assumes that they must have used their house as an ATM to get it. Assumptions in my opinion is your first screw up. Nobody Knows the story behind how they got it. Maybe they inherited some money and bought it with that, maybe they got an awesome loan at the credit union and make the payment on it.. who knows and who cares!!

The downturn of 2008 was a once-in-a-generation occurrence. Most of us will never see something like that again in our lifetime.

People need to stop living in the past.



Sent from my Pixel using Tapatalk

People are trying to tell you the Equity is not real.. it is being made out of air by debt. your losing dollar purchasing powere how much was your same house in 2008 compared to today?

 

[DrunkenSailor]

Wait for dow to drop to 20k, take out max value refi, default, file all kinds of mod request's etc... live for free for at least a year or two, put all the money into the stock market, buy next house in cash.

 

[Mandelon]

There's a lot of debt coming due. College loans, a lot of retail stores are billions in debt and underperforming. State and municipal governments owe untold billions in unfunded pension liabilities.

Unlike the fed, they can't print money. These chickens will come home to roost in the coming years. There will be lots of tax increases and services cut. Potholes will be going unfilled.

Maybe we should open up a wheel and alignment shop.. LOL

 

[monkeyswrench]

OSB, Sorry if this thread is a re-hashing of old threads, I really am new here. I just wanted to get input from people in different areas. In my daily excursions, I only seem to deal with Ca. retirees, and good 'ol boys with horses and cattle. One group is only seeing interest rates as an effect to income, the other group worries about the cost of hay and diesel. As you can tell, not exactly fingers on the pulse of high finance. I have no interest in home prices anymore, I already told my wife to bury me here.

Like I said, don't want to ruffle feathers. I have spent the last few years trying to be more laid back.

 

[rivermobster]

OSB, Sorry if this thread is a re-hashing of old threads, I really am new here. I just wanted to get input from people in different areas. In my daily excursions, I only seem to deal with Ca. retirees, and good 'ol boys with horses and cattle. One group is only seeing interest rates as an effect to income, the other group worries about the cost of hay and diesel. As you can tell, not exactly fingers on the pulse of high finance. I have no interest in home prices anymore, I already told my wife to bury me here.

Like I said, don't want to ruffle feathers. I have spent the last few years trying to be more laid back.

It's a good thread and a good question.

The problem is people get caught up in an endless argument, and loose sight of the original question.

SSDD around here.

 

[RCDave]

No Stress MW.

Ths purpose of a message board is the share thoughts, ideas, opinions, etc.

An economy is always in a state of change. There will always be differences of opinion on its state and economic policy.

Some just believe the current economic climate is the best in history, just because DT says so. Others can see the greater fundamentals and see the good (ex. like tax cuts, regulatory rollbacks), the Ok (govt. gridlock), and the bad (massive spending, trillion dollar annual deficits, tweets, tariffs, porn star bangin while you wife is prego), in the current state of things.

The other MAGA here is this amazing RDP site allows the freedom to open or not open certain threads. There is no straight jackets here!

 

[2Driver]

Another 6 years of these 30% returns and Im going to retire.

I have 9 carefully thought through hard money loans going, a fair bit well diversified in the market, and about 20% in cash and there aren't many days that I feel like I’m really in control of things. LOL most days I feel like a squirrel in the road trying to figure it out.

 

[lbhsbz]

People are trying to tell you the Equity is not real.. it is being made out of air by debt. your losing dollar purchasing power how much was your same house in 2008 compared to today?

My house that I bought in 2008 as a wreck (kitchen was torn down to studs and plumbing, stucco torn down on one wall, etc...) I paid 316K and it appraised at that time for $425. I've put quite a bit of time and money into it...It's on the market right now for $569K...we'll see how that goes, but I think it's priced fairly accurately.

Equity isn't worth shit until you sell it and turn that equity into dollars.

But, it doesn't really matter...if you're moving local, everything had gone up. The only way to use that equity to your advantage is to upgrade the lot size / house size, but take a few steps back in quality...which is where the discount will come from....then build sweat equity, give it 10 years to appreciate some, and repeat.

Equity on a home in SoCal or other high priced areas only really helps when you're bringing california money to another lower priced state...Where you can get a better house and have a boatload of cash in the bank too.

 

[zhandfull]

OSB, Sorry if this thread is a re-hashing of old threads, I really am new here. I just wanted to get input from people in different areas. In my daily excursions, I only seem to deal with Ca. retirees, and good 'ol boys with horses and cattle. One group is only seeing interest rates as an effect to income, the other group worries about the cost of hay and diesel. As you can tell, not exactly fingers on the pulse of high finance. I have no interest in home prices anymore, I already told my wife to bury me here.

Like I said, don't want to ruffle feathers. I have spent the last few years trying to be more laid back.

I thought it was a good thread but took it as more of a industry specific and regional question for each member. What are they seeing good and bad? Industry trends, are you currently busy or slow? Projected trends for the year ahead. Hiring or laying off in specific industry or area?

 

[monkeyswrench]

I thought it was a good thread but took it as more of a industry specific and regional question for each member. What are they seeing good and bad? Industry trends, are you currently busy or slow? Projected trends for the year ahead. Hiring or laying off in specific industry or area?

That is kind of what I was after. If the whole economy tanks, the wheels fall off for everyone! To me, it was kind of a shock to hear all the toy shops are busy with new builds. Obviously I haven't been shopping for new boats. It's also interesting to see what trades are busy. Just pieces of the bigger picture.

 

[ridebig]

My business is in Albuquerque New Mexico since 1942. The economic situation here has not improved much. We are always 2 years behind the curve. NM is a liberal blood bath death spiral state I’m hoping the mid term elections help! Residential construction is nuts but commercial is negligible. If it’s not state of federal government work there is not much else. We are at the intersection of I-25 and I-40 with great weather and access to labor (other than entitlements that are out of fucking hand). Get some manufacturing or distribution hubs here Damm it! Truckers don’t want to come here No backhaul!! I’m totally on the Trump train and fuck you you grads, squeezer and gmac. I don’t mean to get political but I’m several cocktails in but still of sound mind and body!!! Sorry for the rant.

 

[zhandfull]

Public works construction is going strong in Southern California. If SB1 gas tax gets rolled back that could make things get interesting. As mentioned before seeing a few issues with contractors paying suppliers and subs, not a lot but they seem to be increasing from my prospective.

Labor is an issue for all contractors. The old guys don't have the patience or ability to teach it seems. That or the young guy are too busy checking their phones to learn how to work.

Public works contractors always had 10% retention held per payment in the past to insure project was completed. That changed to 5% about five years ago and the trend seems to be going to no retention held on federally funded projects lately. I have a feeling that is driving profit margins down and is going to be bad for the industry in general.

For now things are crazy busy.

 

[ridebig]

Public works construction is going strong in Southern California. If SB1 gas tax gets rolled back that could make things get interesting. As mentioned before seeing a few issues with contractors paying suppliers and subs, not a lot but they seem to be increasing from my prospective.

Labor is an issue for all contractors. The old guys don't have the patience or ability to teach it seems. That or the young guy are too busy checking their phones to learn how to work.

Public works contractors always had 10% retention held per payment in the past to insure project was completed. That changed to 5% about five years ago and the trend seems to be going to no retention held on federally funded projects lately. I have a feeling that is driving profit margins down and is going to be bad for the industry in general.

For now things are crazy busy.

Labor is any issue everywhere. There is a masonry contractor here that has taken the residential block wall market by using government freebies to intice employees. He tells them max pay is $13.50 per hour BUT you can get housing, healthcare, cellphone and assistance on top. But his employees production is shit. They have no incentive to lay more block. Killer is he is doing everything for below cost. No he doesn’t buy from me but I could GIVE the block to another masonry contractor and they still could not compete even in large volume. Oh but this jackass filed a 13 million dollar bankruptcy in the last crash. Again sorry for the rant. It’s been a long week.

 

[brgrcru]

Two things, I have learned = never say never and
timing is everything.

life was great. and it changed almost overnight.
some are to young to remember the early 90's.
I was buying my first house in 88 20% down and 10.5 % interest.
homes lost 20/40%, around 1991. gas went up from 1.15 to almost $3. (Gulf war) Kalifonia was in a drought.
construction almost stopped. the tech industry got slammed.
it took me a few years to get back on track. hard to do when your just starting out, with a new business, marriage, house and child on the way.

but if you came of age a little after 94/95, you were sitting good and made out.
you could by a house cheaper and get low interest rates.

lucky for me, I learned my lesson way back then 89/90. the crash of 2008--2012 didn't hurt as much as I was prepared.

just my .02

 

[Cdog]

I’ve been watching this thread over the week. So many things didn’t make sense during the pre & obama years it was hard to tell where things were headed. The boomers were in their last phase of risky investments back in the 2000’s. Gen xers buying their first homes and staring families. Boomers leveraging their homes to over pay for millennials college.

I do believe it’s different this time. We will see a correction but not a crash. It will last until health care gets fixed, wages increase and interest rates level out. If millennials don’t start forming families in mass even more correction will be coming down the pipeline. Without a gift from their parents or low down payment financing how do they save to buy a home considering thier baseline cost for living is $750 a month more (health care exp) over gen x at the same age.

If Trump is re-elected and is successful I do believe the economy will grow enough to stabilize the situation. Gen x & millennials need to have a reliably good economy as they take over when the boomers retire & die off. If not we’re all fucked!

If Trump fails or a liberal tax idiot gets elected we’re headed off a cliff bigily. The boomers won’t have anyone to sell their largest assets (real estate) to, since gen x & millennials never had a chance to gain traction in the economy. In this scenario there will be an asset dump by boomers to pay for living expenses & health care as Medicare & SS will be approaching insolvency. The libs will now be catering to the 3rd worlders for a vote so we’ll all have to pay more & receive less.

Also add the macro affect of the boomers moving their money from growth mode to spend & maintenance mode. That’s going to have a huge affect on the markets since they are the only ones with real wealth.

Demographics are destiny.

“Castles made of sand, slip into the sea eventually.” Jimi Hendrix

 

[2FORCEFULL]

One of the larger hard money loans I've done for a ground up spec home just sold for full price in less than 6 weeks. I thought for sure it would sit a bit.

https://www.russlyon.com/homes-for-...3/6109_n_33rd_st/lid-5b6f5823c9e72ec6929ee27b

so I'm try'n to do the math here, and try'n to figure out the 4 mil. for the property...so here's what I thought...there's a little over 1 acre,,, and 6400 sq ft of home.... If you divide that by four.... that would give you 4 ,1/4 acre lots, with four 1600 sq ft homes...with that you would get 4 kitchens, 8 baths, 12 bed rooms,4 two car garages, and 4 rv garages,,four separate drive ways...but heres the part I'm not getting???who would pay 1 mil for a 1600 sq ft home?? and who would give up 4 mil for all four...and so with this post... you shot the dream consept of mine to build a bunch of mini houses... when I should be building one 6400 sq ft house ….????

 

[2FORCEFULL]

as far as havasu slowing down.... didn't happen...still can't get anthing done there... everyone is slammed.....but,... historically... havasu slows down in sept as the conversion of population changes from boaters to snow birds,,,a big percent of boaters have kids in school... with that they are hit with back to school shopping...$$$$$....so most, will not be buy'n anything during aug... and sept...and a lot will wait till spring,... with the thought of everything going down in price...so... is it slow in havasu… kinda… but it is historically not...it's booming...

 

[Shlbyntro]

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.

I live in Austin, Tx. It is crazy out here. A lot of people are still moving here from all over the country causing the housing market to boom. New construction is everywhere, a lot of apartment complexes as well as very high end homes. I've only been here for 5 years and have seen the growth. People who have been here longer say existing home values have just about doubled from 10 years ago because of all the California money flowing in.

This growth is amazing for all who live here, but I'm with you, I don't feel it can be sustained or that it is even capable of leveling off and remaining stable. There have been some small indications here that a substantial downturn is right around the corner. With no state income tax, the state of Texas' main source of revenue comes from property taxes and you can't help but hear of people who have lived here for decades who can't afford to keep their homes because of the extreme rise of property taxes that have come with the extreme rise of property value. It has become increasingly evident that this is becoming increasing more common here and if it isn't arrested people here will start losing their homes which will just be the first brick to fall that could very easily cause a chain reaction.

As much as I don't want to see it, I feel that Austin will be looking at a substantial downturn in the next 5 years. My only hope is that corrective actions are taken now to stabilize the economy here before it expands into a bursting bubble.

 

[monkeyswrench]

Our little town is a very tiny version of Austin in a way. Most of our boom here has been from out of state money. There are bumper stickers that say "Please Don't Californicate Our Town". When people ask, I say I am a refugee. The state I grew up in was hijacked. I moved here because it wasn't Ca, that and my wife wouldn't move any further than this. We have people that move here from everywhere. I think it is because we get four seasons, but not bad enough to need a snow shovel.

 

[Classic Daycruiser]

That is called bank robbery.

Maybe the first $100k, after that it's the lenders screw up.

 

[Classic Daycruiser]

In every big major city, buyers will drive outside the city, as far as needed, to qualify for a home and feel safe in their neighborhood. (2 hours one-way is crazy, but people do it)
Phoenix, Southern California area, San Francisco, anywhere there's terrible traffic, you'll find that pattern of buying.

Companies are having a tough time attracting employees to southern California and the Bay area.

It sucks when we're looking for an experience engineer (15 years+).

We found someone, but the home they presently own (outright), is in the Houston area. If it sold today, it would not be enough for a down payment on something comparable in Orange County area.

 

[LargeOrangeFont]

Maybe the first $100k, after that it's the lenders screw up.

The lender does not care. They get paid back by the government.

 

[78Southwind]

There's a lot of debt coming due. College loans, a lot of retail stores are billions in debt and underperforming. State and municipal governments owe untold billions in unfunded pension liabilities.

Unlike the fed, they can't print money. These chickens will come home to roost in the coming years. There will be lots of tax increases and services cut. Potholes will be going unfilled.

Maybe we should open up a wheel and alignment shop.. LOL

Multi-employer pension plans are in crisis as well as they have a $680 billion shortfall, which could also bring down the small businesses that are responsible for them. https://www.plansponsor.com/stakeholders-beg-congress-act-solvency-multiemployer-pension-plans/ A failure of these plans will create a domino effect and cause the PBGC to fail as well. This is possibly the next bail-out that we will see and if not who knows what will happen. https://www.planadviser.com/democrats-outline-their-vision-for-protecting-union-pensions/ https://www.pensions.senate.gov