patrick.net

richwicks says

The Bay area has a 10% unoccupancy rate,

Then lots of room for illegals to squat..

FarmersWon says

BayArea says

Here in the tri valley, exactly what you describe is happening in the early part of 2022. We have friends in the area who are walking away with >50% gain on houses they bought 2-3yrs ago.

Yes it is true but make sense only if you are leaving bay area.
They will have trouble getting back in market after realtor,uncle sam's and paper manager's cut.
The people who are buying have shit load of money and won't default or lower prices anytime soon.
(Flushed with RSU & real estate sale in south bay money)

I will not sell now in current environment. Someone counting on repurchase can get himself out of market. Small reduction on prices can be eaten by inflation in two years.
Builders already on edge to stop building single family houses due to incredible costs, will go into affordable multifamily because this is where city subsidy make building feasible.
Biden already damage what Trump strat to build. Now we even more dependent from overseas. Half of EU countries have double digit inflation. People cry on prices of heating gas, gasoline, electricity, and won't be better any time soon.
Yes, shortage of goods, components, food, too expensive utilities and fertilizer, will definitely create layoff situation again. The bright spot of grow will be in welfare segment.
Consequently, housing supply be reduced to mostly of relocation and estate sale. Can be easy swallow by successful people.
Immigration is not a factor. Millions of illegals have limited chances to find job, marginal number will ever succeed in US. They still under pressure to send money home. Most will stay on welfare. Theay are not future home buyers or pension supporters (Sweden mistake).
Current house owner more likely can rent room to immigrants than sell house due to cash flow shortage.

Mountain house, Tracy hills, Manteca areas skyrocketed during the last two years. Met someone who is in house upgrade business says all recent purchases in Manteca are from many investors with no occupants. 4 or 5b 1mil new house still looks like may be a bargain compared to few decades old 2 to 4b 3+ mil house in silly con valley.

SFH is king.

I don’t see any new ones going up

HeadSet says

richwicks says

The Bay area has a 10% unoccupancy rate,

Then lots of room for illegals to squat..

didn't go well when I said the same a year ago on nextdoor that it any way come from a blood money from corrupt 3rd world politicians through their network to park here.

Eman says

From my real estate network, the last 3-4 weeks suggested the market is in a holding pattern. Buyers, who used to qualify for $1.8-$2.2M, are getting bumped down to $1.5-$1.8M due to higher interest rate.

Buyers have become more selective. However, homes in good location still sell nicely. Does 2022 feel like 2006 now?

No because loans aren’t being written to people with nothing more than a pulse.

I agree with your mortgage qualification amounts however… And it happened very quickly too!

Booger says

Florida unoccupancy rate is high too.

They are not even rented on a short term basis like vacation rental for 1 month ? Florida does very well on short term rentals that are near amusement parks, nature parks and the beach (within 30 minute drive).

ad says

here in Panama City Beach

You mentioned the clearness and visibility of the water there. I just took a peak at online photos and wow! That's comparable to my Maui beach front condo. Might even be better.

I'm used to the nasty water near Corpus Christi in TX when I think of the gulf. S. Padre is pretty nice though but remote.

BayArea says

tri valley

Tri-Valley. Leafy safe neighborhoods with high-standardized-test-score ("good") schools. Priced beyond the reach of blue collar riff-raff. (Before turn of the century) a reasonably short commute to Silicon Valley. Opportunity for many cool after school activities that are, like the house prices, beyond the reach of blue collar riff-raff. Paradise for the Tech Worker.

Of course, to make it all work required two Silicon Valley Tech Worker incomes even back then. It means, latch-key children. One of those latch key children, a 13 year old girl, disappeared while walking alone from her middle school to her skating practice. That was three decades ago.

A recent headline in local news media remarked how the parents will never give up on their missing child.

What nobody talks about is that the parents had already given up on her, and her twin brother, when they elected to leave the kids Home Alone for their Silicon Valley Tech Worker jobs that paid for the living arrangement, (skating practice, etc).

I know, I know: one isolated case, a long time ago, etc etc.

Still, Tri-Valley, and Dublin in particular, creeps me out even now. Because I've known so many who stretched things too far to pay for their idyllic situation.

B.A.C.A.H. says

BayArea says

tri valley

Still, Tri-Valley, and Dublin in particular, creeps me out even now. Because I've known so many who stretched things too far to pay for their idyllic situation.

What’s the alternative on a <$2M budget?

BayArea says

What’s the alternative on a <$2M budget?

Well, I suppose if a gun were put to my head to coerce me into making my kids latchkey children, no alternative than to take the bullet.

For just about every other scenario the choices we make are choices that reflect our values.

So your point is that the tri valley has many kids here with parents that need to both work full time to afford life here?

I grew up in rougher parts of the east bay (Oakland, Berkeley, Richmond). I’ve seen and experienced many things that I wish my kids don’t.

I was also a latchkey kid… but in Oakland, Richmond, Berkeley if you can imagine that. My parents were immigrants and for years needed to both work full time to make ends meet. Public transportation on buses and BART made for many stories.

The tri valley is paradise compared to what I grew up in. What would have been a concern about safety, crime, poor schools is transitioned to a concern about competition and pressure which kids are under here.

FJB says

You mentioned the clearness and visibility of the water there.

You can snorkel right off the white sand beach.




.

B.A.C.A.H. says

Still, Tri-Valley, and Dublin in particular, creeps me out even now. Because I've known so many who stretched things too far to pay for their idyllic situation.

Yeah, better to find cheaper living conditions like in much lower cost rural areas. Front Royal, Virginia has a large Catholic and Christian home school community. Its about 60 miles east of the Washington DC city limits. The home schooled kids attend community events such as through the churches and sports. They also take more advanced classes together at the churches such as algebra and biology.

.

BayArea says

What’s the alternative on a <$2M budget?

Move.

BayArea says

Richmond

Richmond is serious shit. Or it was in the 80s anyway.

ad says

You can snorkel right off the white sand beach.

I made it to gulf shores MS while staying in New Orleans one day, night, next morning but that was it. It was quite nice actually but clearly I should have gone further.

BayArea says

So your point is that the tri valley has many kids here with parents that need to both work full time to afford life here?

I didn't say that. You said it.


FJB says

Move.

Word.

If recession comes in 22 or 23, someone I watched on youtube says, housing foreclosure went up already in LA-CA, Florida etc. predicts can go down 10-20% at most. He says going down to 50% is hard to imagine.

ad says

You can snorkel right off the white sand beach.

My favorite in the lower 48. I'd say Orange Beach, AL to about Panama City Beach, FL is the best sand I've experienced. I've usually gone during spring break though and it tends to be rougher waters that time of year for some reason. I've been in May in my college years and I think that's the best time. Besides August to October, I think I've been down there every month at some point.

The water can get blue, but nothing beats St. John or some of the BVI's. The beaches/sand are just average, water is amazing. Lake Michigan could compete sand wise.

Blue says

If recession comes in 22 or 23, someone I watched on youtube says, housing foreclosure went up already in LA-CA, Florida etc. predicts can go down 10-20% at most. He says going down to 50% is hard to imagine.

We bought for $187,000 a new 3 bedrm, 2.5 bath, 2 car garage townhome in 2016 about 2 miles from the beach in the Florida panhandle. I figure the fair value is about 4.5% annual appreciation of the purchase price in 2016 to 2022.

(1.045)^6 x $187,000 = $243, 523

The same townhome in my community is selling for around $300,000. I figure prices will crash and bottom to $235,000.

.

There were the same townhomes in my community (development started in 2005) that sold for $280,000 in 2007 and then crashed and sold for $130,000 in 2009.

.

Yeah, I think we peaked out about 2-3 months ago. I'm starting to now see inventory hit with no offers.

Saw an open house sign yesterday on a nice mcmansion. Went in just for fun and not a single person showed up. This was in a really nice subdivision in ATL where a lot of people want to live.

Reatlor literally followed my wife and I around the place and kept talking about how it was all negotiable.

No one else showed up, except for a few neighbors who were nosy. It was dead.

A few months ago it would have sold overnight.

Interest rates have gone up, this reduces people's borrowing abilities - it also places pressure on people already in debt especially if they have an ARM which Bernanke recommended people to get.

Increasing the interest rates also reduces the money supply, because money is actually the amount of debt that can be carried in our fucked up world. If you can borrow 10 million dollars today at 3% interest, but can only borrow 5 million next week at 6% interest, the result is $5 million dollars being removed from circulation - because it's not CASH, it's a bunch of digits in a computer.

Anything that is a debt based asset, margin calls, car loans, credit cards - they're going to contract and we've not even seen real interest rates hikes yet.

There will be QE of course, but that's not going to be extended to retail investors, BLACKROCK and other companies like it will get that. They will use the FREE money they are getting to buy up whatever they damned well please.

We're a communist nation really at this point using proxy bullshit companies to achieve it.

richwicks says

Interest rates have gone up, this reduces people's borrowing abilities - it also places pressure on people already in debt especially if they have an ARM which Bernanke recommended people to get.

Increasing the interest rates also reduces the money supply, because money is actually the amount of debt that can be carried in our fucked up world. If you can borrow 10 million dollars today at 3% interest, but can only borrow 5 million next week at 6% interest, the result is $5 million dollars being removed from circulation - because it's not CASH, it's a bunch of digits in a computer.

Yeah, pretty much. End of last week the avg. rate was 5.41%.

Brother in law who is a realtor said when it hit 5%, things slowed down big and I can only imagine what the next few weeks hold.

The difference between now and a few months ago, was another $1,000/mo in interest payments, for most families using mortgages on a $500-600k place.

More houses are coming up, here is one just listed around.
https://www.redfin.com/CA/Cupertino/10481-N-Stelling-Rd-95014/home/1752807?source=patrick.net

List Price $2,388,000
Est. Mo. Payment $13,264
Redfin Estimate $2,595,765
Price/Sq.Ft. $2,005
Year Built 1950
2Beds,1Bath,1,191Sq Ft
Privilege area prices (not immune from theft and vandalism)

HunterTits says

Eman says

Buyers, who used to qualify for $1.8-$2.2M, are getting bumped down to $1.5-$1.8M due to higher interest rate.

But how can this be? There are PatNetters who proclaimed a) interest rates wouldn't hit 4% let alone 5% or more and b) it wouldn't matter anyway, because 'interest rates don't really impact housing prices' or some shit like that.

The only one that claims interest rates dont matter much was WookieMan as far as I remember.
Obviously, rates have a huge impact to the housing market. I think 99% know this.

What many fail to understand is that a major slowdown doesnt mean crash. You can have a major slowdown from a super hot running housing market and still show YoY price growth. We were running WAAAY to hot. 100-200k over asking price-bidding wars are stupid and not sustainable.
Increased rates calms the demand down, increases inventory and slows down the overall economy.

There is no crash in sight for house prices. Some people call for 40-60% house prices crashes which is just laughable.
We are still negative with YoY inventory.

People who bring 2008 into the discussion dont understand that this all started in 2005. Prices were already declining, inventory rising, rates were higher and the credit profile of owners was significantly different than today.

What we are seeing today is: credit is good, homeowners have tons of equity, jobs are good. House prices are sky high and rates finally went up. And finally bidding wars disappear and inventory rises. all good things..... Remember, a REDUCTION in ASKING prices doesnt mean YoY price reductions.....

Avg. mortgage rate up .14% today alone. Now at 5.55% for the avg. 30 yr fixed.



Damn. I thought it was going to take a full year to get to this point. And it's only been a couple months.

BayArea says

I don’t see any new ones going up

Be the change and erect one in your back yard as is your right (bestowed by the CA legislature under SB-9).

HunterTits says

b) it wouldn't matter anyway, because 'interest rates don't really impact housing prices' or some shit like that.

Hahahaha. I can't imagine anyone on Pat.net said it like that but, yeah, if so, that's about the dumbest shit ever. If rising rates don't effect price, why does lowering rates effect price?

BayArea says

SFH is king.

I don’t see any new ones going up

San Francisco Housing?

First, SF is losing residents, and I'm in the Bay Area, I see a TON of new developments and we're losing residents as well. Also a large number of commercial zones are empty. At my job - which I just left - I still diligently went to work to work on a floor where maybe 10 people showed up that normally housed 200.

“Single family home”

Detached with a yard

Redfin raised my week to week home estimate by $120k this week… wtf

Ad says

You can snorkel right off the white sand beach

I'll stay in my room and order in room service, thank you!

BayArea says

“Single family home”

Detached with a yard

Redfin raised my week to week home estimate by $120k this week… wtf

May be a blowoff top. Create panic "to buy now!!!".

I am 50 and talked quite a bit to my grandparent's generation who went through the Depression. Taxable property isn't an asset, it's a liability - it wasn't an asset for them anyhow, and I'm expecting Depression 2.0. Time will tell.

Raise interest rates to 10%, use QE to keep the country "solvent", raise it to 15%, 20%. People with an ARM are complete slaves.

Maybe it's "different this time" - time will tell.

BayArea says

Single family home

Detached with a yard

Redfin raised my week to week home estimate by $120k this week… wtf

I got a nice $350k Zestimate increase a few months back. I'm wondering what caused such a discontinuous jump. Maybe change to algorithm or maybe a bunch of similar properties just sold?

The construction I see in my area is super-expensive townhouses. I think SFSs (single family shacks) are going to hold value better in the long run. Bulldoze and build what you want (if you can get through all the California red tape). With a condo or townhouse, you are pretty much stuck with the structure you buy, which will com into play 20 years from now when they don't seem all that new anymore.

Redfin gave me a nice theoretical bump, too, but undervalued it by 100k from identical models in less desirable lots. Should I hug them or curse them? It's all vapor until you sell, and I always value the crap shack at 90 percent in the portfolio to take into account fix ups, moving expenses and sales commissions (not to even mention potential acquisition costs of a new crap shack somewhere else).

Moody's is a criminal enterprise.

SunnyvaleCA says

I'm wondering what caused such a discontinuous jump. Maybe change to algorithm or maybe a bunch of similar properties just sold?

Joe Biden is the most popular presidential candidate in all of US history having won the largest percentage of the eligible vote by sheer numbers and percentage of the eligible voting electorate.

I'm rather amazed that people can see an election can be fraudulent, but they can't believe statistics are as well. We're in total clown world. Every statistic is a lie at this point.

Moody's to pay $864 million for pre-2008 ratings deception

Ratings agency Moody's has agreed to a settlement payout with US authorities over mortgage securities fraud that contributed to the 2008 financial crisis. The agreement follows an investigation lasting several years.

Moody's ratings was "directly influenced by the demands of the powerful investment banking clients who issued the securities and paid Moody's to rate them," Connecticut Attorney General George Jepsen said in a statement on Friday.

Twenty-one US states and the Justice Department accused Moody's Investors Services, Moody's Analytics and parent company Moody's Corporation of overvaluing the ratings of securities backed by subprime mortgages and at-risk loans.

Some $437.5 million will go to the Justice Department and $426.3 million to be divided among the states and the District of Columbia.

In March, Moody's agreed to pay $130 million to settle claims by the California Public Employees' Retirement System over allegedly inflated ratings on residential-mortgage bond deals.

In the settlement, the world's second-largest credit ratings agency acknowledged that it hadn't followed its own standards, stating that it had used a more lenient standard for certain financial products and had not made public the differences from its published standards.

"Moody's failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession," Principal Deputy Associate Attorney General Bill Baer said in a statement.

The long con
The credit rating agencies - whose role is to rate debt securities on the basis of a debtor's ability to pay back lenders - played a key role both in fuelling and then not reining in the US subprime mortgage crisis of 2007-2008, which precipitated the global downturn and long subsequent period of austerity.

Banks made loans to homeowners and then bundled them into securities whose interest payments were guaranteed by those homes.

The banks and other lenders then paid S&P and Moody's to rate the bonds, often being given the highest grade even though many mortgages were granted to people knowingly highly likely to default.

The markets continue to rely on credit ratings

The Financial Crisis Inquiry Commission concluded in 2011 that "this crisis could not have happened without the 'Big Three' agencies - Moody's Investors Service, Standard & Poor's and Fitch Ratings," which allowed the ongoing trading of bad debt.

The pools of debt the agencies gave their highest ratings to included over three trillion dollars of loans to homebuyers with bad credit and undocumented incomes up to 2007.

Hundreds of billions of dollars' worth of these triple-A securities were downgraded to 'junk' status by 2010 and the writedowns and losses came to over half a trillion dollars, leading to the collapse or disappearance in 2008-9 of three major investment banks: Bear Stearns, Lehman Brothers and Merrill Lynch.

The US federal government meanwhile was obliged to buy up $700 billion of bad debt from distressed financial institutions.

Standard and Poor's paid a $1.37 billion fine in 2015 for deceiving investors about the quality of subprime mortgages. S&P said at the time it settled to avoid the "delay, uncertainty, inconvenience, and expense” of litigation.

With a third major agency, Fitch, the three ratings firms dominate the bond-rating market with a more than 96 percent share, compared to 98.8 percent in 2007 before the crisis, Bloomberg News reported.

With the District of Columbia, the states involved in the settlement announced Friday are Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington.

https://www.dw.com/en/moodys-to-pay-864-million-for-pre-2008-ratings-deception/a-37131484?source=patrick.net