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Wells Fargo tipped its opinion on where it expects housing to go by not making any more HELOCs. https://www.housingwire.com/articles/wells-fargo-joins-chase-in-halting-helocs/
Wells Fargo tipped its opinion on where it expects housing to go by not making any more HELOCs. https://www.housingwire.com/articles/wells-fargo-joins-chase-in-halting-helocs/
In SoCal, the market is hot. Very, very low inventory and strong demand. Low rates are part of the story. In my area, homes below 750k fly off the shelves.
For prices to drop you need inventory to significantly increase. Rates aren’t going up. There is too much downward pressure.
WineHorror1 saysNewbie123 saysIn SoCal, the market is hot. Very, very low inventory and strong demand. Low rates are part of the story. In my area, homes below 750k fly off the shelves.
For prices to drop you need inventory to significantly increase. Rates aren’t going up. There is too much downward pressure.
How is there too much downward pressure if there is no inventory?
Historically, the 10y treasury yield has been a solid indicator to where mortgage rates are headed. Yields found a bottom but are still below 1%.
There is enough spread to re-sell 2.5-3% mortgages with a profit. Rates won’t go higher unless treasury yield improve significantly.
I guess prices will go up forever. As patrick has been saying forever, it's all about inventory and housing just isn't being built.
Basically this: I now expect a Great Depression style event to take the place
We gotta lobby Patrick to bring back all the CHATTER about REAL ESTATE because I honestly think Inflation may EXPLODE
Failing that, we can eat FACE! straight off of attacking survivors.
I now expect a Great Depression style event to take the place of the Covid emergencyNow that China sees this as a brilliant method of asymmetric economic warfare, think about how much worse the next "accidental" lab escapee is going to be.
The house is paid and I've got 142 year supply of yams for 8 people and enough ammo for fire fights running three shifts a day for 80 years.
We've been practicing on cadavers but all of us can behead an attacking cannibal with two swings of a hand ax if we run out of ammo.
Failing that, we can eat FACE! straight off of attacking survivors.
https://www.wellsfargo.com/the-private-bank/insights/cv19-real-estate-impact/
Real estate: a potential safe haven or the next shoe to drop?
So where could all of this economic carnage leave real estate? Just as the world is in many ways in uncharted waters with the coronavirus pandemic, the shelter-in-place orders and closing of non-essential businesses across much of the country and globe has led many classes of real estate into uncertainty over at least the short term. As an asset class, direct-owned real estate has many desirable features when included in a diversified portfolio—namely as a potential hedge against inflation, potentially stable income, and non-correlated risk-adjusted total returns over market cycles.
On the downside, direct-owned real estate has ongoing cash requirements for operating expenses, debt service, capital improvements, and costs associated with renewing and attracting tenants. This cash need is what we feel could be the greatest risk faced by direct-owned real estate investors and is driven by the health of the tenant base. If the predicted recession is short-lived and ends with a steep and robust recovery, the health of the tenant base may recover to levels prior to the onslaught of COVID-19. Pre-COVID-19, market trends were already impacting real estate asset classes in diverse ways, creating relative winners and losers. The pandemic may accelerate and enhance those trends that we will explore in subsequent paragraphs but in the near term, the stability of cash flow will be on every investor’s mind.