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housing prices peak 2


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2022 Apr 29, 9:29pm   458,358 views  4,772 comments

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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net

Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.

Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.

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1669   Robert Sproul   2023 Jan 29, 7:59am  

Eric Holder says

clambo says

After a certain level of wealth, you can afford fancy hotels for every day of your life; why own a castle in addition to your beach house in Malibu?

This is what Musk realized (and acted upon).


Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.
1670   GNL   2023 Jan 29, 9:51am  

Robert Sproul says

Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.

I'm pretty sure I would do this exact thing. Maybe one house in a dream location so I can entertain family and friends.
1671   Eman   2023 Jan 29, 10:51am  

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the average Joe and Jane don’t. I’ve met Tod in person several times at JPM events for real estate investors. Really nice guy. He shared what he does for free too. He lives in Atherton. He has one rule though. Regardless how busy work is, he has to be home by 7pm and have dinner with his wife. John Sobrato, who owns like half of downtown Cupertino, also lives in Atherton. Nice guy too. 😂

His SIL is a commercial agent in my market. Nice guy too. I’ve done 5 deals with him.

https://www.siliconvalley.com/2023/01/23/sunnyvale-housing-home-apartment-real-estate-buy-develop-build-tech/
1672   FortwayeAsFuckJoeBiden   2023 Jan 29, 8:04pm  

Eman says


GNL says


What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the aver...



do you buy now in this market? or its just that 20% vacancy rate formula as only criteria? ive been eyeing frw properties, but cap been very low.

do you just buy full cash, or seed 30% down relying on positive cash flow less mortgage?
1673   Eman   2023 Jan 29, 8:52pm  

FortwayeAsFuckJoeBiden says

Eman says



GNL says



What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-...

I’m always a buyer or seller for the right price. With that said, I haven’t bought any apartment since last year as the numbers don’t pencil out. Sellers haven’t capitulated while interest rates are high. Now, I’m looking at adding new units on my oversized lots. If I can be all-in at $200k/unit, and it’s worth $275-$300k/unit, then it’s worth the efforts.

I budget $600/sqft for the building, engineering, permit costs, etc…. If I can get the cost down to $500/sqft. Voila. The reason it should cost less because I don’t have to pay for land.
1674   Eman   2023 Jan 29, 8:57pm  

I’ve never paid all cash for apartment buildings. Even with this new construction, I’ll obtain a construction loan. The lender requires I put in 45% of the equity towards new construction. They’ll lend 55%. The cash flow on the building should be able to cover the debt service of the construction loan so there’s no stress on it. Once done building, refinance it into a permanent loan aka a fixed loan rather than an adjustable construction loan.
1675   zzyzzx   2023 Jan 30, 11:58am  

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.
1676   mell   2023 Jan 30, 12:03pm  

zzyzzx says


https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

We made an offer on a place that was 15% below ask. They all got hoes mad and huffed and puffed, saying they already had a much better counter offer. We rescinded, they took the other offer, it fell through probably during inspection, and they eventually sold a few months later just a bit below what we offered. We then proceeded to find a much better place for less a bit more rural. 80% of listings are overpriced by at least 10%-20%
1678   Booger   2023 Jan 30, 3:47pm  

mell says

They all got hoes mad and huffed and puffed, saying they already had a much better counter offer.


Fictitious other offers are always a problem.
1679   Eman   2023 Jan 30, 4:01pm  

I know Patneters are skeptical of “real” offers, but we believe the agents we work with are honest with them.

Recently, there’s a 10-unit building listed for $2.85M. The agent contacted us. We said price is high and in a fringe area, not interested. Seller got an offer for $2.5M shortly after, but declined. We thought the offer was reasonable given the high borrowing cost and its location. We told him to convince the seller to accept it.

No other offers came in for a couple months. The agent reached out to us and begged to write up an offer that we’re comfortable with. We said $2-$2.2M at most. He wrote it up. Next day, a $2.65M offer came in from some agent. The seller accepted it. That’s how it goes sometimes. We trust the agents we work with. We don’t believe in ghost or fake offers
1680   Eman   2023 Jan 31, 3:44pm  

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.


1682   Ceffer   2023 Feb 1, 7:32am  

zzyzzx says

Would you buy a house where someone committed suicide?

If it was the real estate agent, it'd be a gimme.
1684   zzyzzx   2023 Feb 2, 9:32am  

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
1685   GNL   2023 Feb 2, 9:39am  

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?
1686   zzyzzx   2023 Feb 2, 9:53am  

GNL says

zzyzzx says


https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?


Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.
1688   GNL   2023 Feb 3, 9:48am  

zzyzzx says


GNL says


zzyzzx says


https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?



Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.


"Redemption", meaning they can't sell their stock/interest in the fund once a limited amount of real estate inside the fund has been sold?
1689   Robert Sproul   2023 Feb 3, 9:58am  

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I assume you are going, maybe you can give us a brief report?
1690   AD   2023 Feb 5, 8:31pm  

For every 1% increase in the 30 yr mortgage rate, there is a 10% drop in price.

Peak housing prices were set at around a 3.25% to 3.5% rate. So if the 30 year mortgage rate settles around 5.5%, then housing needs to at least drop 20% to 25% from peak pricing levels.

Also, the home price to household income ratio should be around 4 for a 30 year mortgage rate of 4.5% to 5.5%.

The ratio is 5 for a rate of 3%, based on my own experience securing a VA mortgage in late summer 2016 and what the regional bank mortgage broker stated, in addition to total monthly payments (principal+interest+insurance+taxes+HOA quarterly assessment) not being more than 37% of household income.

The mortgage broker reminded me I was foremost buying monthly payments as the bank owned the home until the loan was paid off.

A $400,000 mortgage would correspond to an annual household income of $100,000 to $133,000. Granted, a buyer may make a 20% down payment for a $400,000 home given they may have proceeds from a previous home sale, stock sale, etc.

Median household income was around $72,000 in 2022.

Median sales price is around $467,000 in last quarter of 2022. It was $329,000 during first quarter of 2020 :-/
1693   HeadSet   2023 Feb 6, 11:30am  

I knew I should have bought a home in Kindergarten and not wait until First Grade. I blame the teacher.
1694   GNL   2023 Feb 6, 12:33pm  

cisTits says

zzyzzx says







...and now we get to hear some bullshit Housing Expert story that flies into the face of data.

What about falling prices?
1695   HeadSet   2023 Feb 6, 1:50pm  

cisTits says

The average 30-year fixed mortgage rate spiked to 6.39% today, according to Mortgage News Daily, having bounced by 40 basis points in two days off the low of 5.99% on Thursday, giving up a month worth of declines in two days.

Good. Mortgages need to go up to 7.5% to 8%.
1696   REpro   2023 Feb 7, 8:29am  

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.





I did attend his meetings years ago.
I like his academic style presentation with supporting research.
He is a very good motivator.
1698   zzyzzx   2023 Feb 7, 9:05am  

Home-Buying Companies Stuck With Hundreds of Houses as Demand Slows

https://archive.is/BXokx
1699   Shaman   2023 Feb 7, 9:06am  

The boomers are sick and dying thanks the the vax and being old. Give it a couple years and the mass glut of boomer property on the market will swamp potential buyers with cheap housing.
1700   zzyzzx   2023 Feb 8, 6:16am  

https://finance.yahoo.com/news/biden-one-size-fits-plan-150000623.html

Looks like Biden is trying to put a lot of smaller landlords out of business. They will sell their housing stock.
1703   zzyzzx   2023 Feb 10, 11:36am  

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/10x4qxg/hold_your_ground_when_the_listing_agent_comes/

Yesterday morning, our offer $13k under asking was accepted. Yesterday afternoon, they “received a full price bid” and were going to be so kind as to let us match the full price if we really wanted the house. We “regretfully declined” to increase our offer at 5:00pm

This morning, at 8:57am, our offer was accepted again.
1704   AD   2023 Feb 10, 3:04pm  

Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

,
1705   Al_Sharpton_for_President   2023 Feb 10, 4:23pm  

ad says


This will help as far as government reported inflation (i.e., CPI).

It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.
1706   AD   2023 Feb 10, 8:43pm  

Al_Sharpton_for_President says


It's the perceptions of those polled regarding owner equivalent rent that is used in the CPI. Don't expect much in terms of accuracy from the sheeple.


True about "owner equivalent rent", the Bureau of Labor Statistics (BLS) tracks rental prices by sampling about 50,000 rental units nationwide and uses the average rents paid for comparable housing (within the same area or zip code).

So they would have to find a comparable rental for my home (3 bedroom, 2.5 bath, 2 car garage, 2 miles from beach in Florida panhandle); they could query some of the rentals in my HOA which are identical in size and design.

I guess for more unique homes which are not "cookie cookie cutter" like detached 4 bedroom homes in non-HOA neighborhoods, the BLS would have to adjust and extrapolate the best they can to apply the "owner equivalent rent" method.

I understand that is the best way for CPI to aggregate or account for housing related cost for owner occupied homes.

I also read CPI considers housing related cost to be 33% of total CPI.

I recall FHA and VA mortgage allows up to around 35% of income to be for housing costs (mortgage, property tax, property insurance and HOA fee).

.
1707   AD   2023 Feb 10, 8:49pm  

But I look at the CPI as just a gauge as far as housing trends such as if housing costs are trending down for last 6 months in general.
1708   Eman   2023 Feb 10, 9:52pm  

ad says


Rent is going down. This will help as far as government reported inflation (i.e., CPI). Stocks should fare better with a lower inflation report this month. Silver and gold may not fare as well unless dollar index (DXY) significantly retreats.

https://www.msn.com/en-us/money/realestate/us-asking-rent-cools-to-near-one-year-low-in-january-as-demand-wanes-supply-grows/ar-AA17kH1C

@ad,

Do you see rental softness in your market? It’s down 5.4% from the peak in August, but still up 2.4% YoY. This trend won’t last very long in the next few months, but 5.4% seems insignificant given rent prices have gone through the roof in the last decade.

In my San Jose market, rents are holding steady while rents around SJSU hit record high. I guess more people are going back to school in the current economic environment.

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