patrick.net

Nothing that 6 million more illegals can't cure.

Misc says

Nothing that 6 million more illegals can't cure.

Yeah, I've seen in the Florida panhandle a couple with 2 daughters who seem recent arrivals from Central America renting a townhome in my HOA. I think both work and easily make $17 an hour each for a combined $34 an hour for household. Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

They probably earn at least $58,000 a year. Their rent is about $1600 a month for a 2 bedroom, 2.5 bath townhome.

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mell says

I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.

That is what I am thinking as far as liquidity and not seeing a drop off in sales volume.

The seller's agents could convince enough (reasonable) owners to drop the prices 17% (from 2021 peak levels) over 4 to 6 months with steady price drops.

I think the Fed is eyeing at least a 17 to 20% drop in house prices. Prices should fall 10% for every 1% increase in the 30 year mortgage rate.

I just don't see the Nat'l Assoc of Realtors (NAR) (and the Federal Reserve) siting idly during a 25% drop cause then buyers will just remain on sidelines patiently for a 35% to 45% drop as housing may go into a deflation death spiral.

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The household and small business sectors of the economy are in surprisingly good shape. They have learned to deal with government fuckery. They are sitting on about $17 trillion in cash (not stocks or bonds or bitcoin...cash!). There is a record low number of houses being listed for sale. The prices may be more sticky than usual because everyone thinks the Fed will lower rates again when some other sector blows up.

There are trillions of dollars in ponzi schemes outside of housing. The Fed will panic when they start to collapse. At least that's what a lot of homeowners think.

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50. Generally no one wants those jobs and if in a booming area and booming tourist area those people are getting paid more than you'd think. Basically Americans don't like those jobs and therefore a shortage of labor and wages go up for tasks that need to be done.

Outside of STEM and trade/union schools, college as we know it is dead. And until American born citizens realize this they're going to be living with mom and dad for a long time. That also is another factor in housing. If the kids ain't buying and not having kids, there just simply is lower demand for builders to build. Now factor in interest rates.

Prices will drop/stall, but we're not going to see a housing crash like we did 15 years ago. There's significantly less movement and kids, hell adults are staying with mom and dad more. As long as mom and dad aren't paying for everything besides the house, I don't see that as being awful. We stayed with my parents a bit after college. Paid a small rent. Split the utilities. We had our own cell phones. Car payments. Paid our own insurance. Student loans.

My MIL on the other hand still pays car insurance, cell phone, health insurance for 3 of my sister in laws. All are over 30. The 4th is on government insurance because she's a single mom, not really we raise my nephew, and food stamps. Until parents cut the cord so to speak, I don't think younger people say 25-32 are buying houses any time soon. Therefore less building, parents staying in their homes with low mortgage rate (until now) so there's a high floor to RE prices if that makes sense, or at least how I analyze it.

Can't remember if is was ad or someone else above, but when interest rate rise, people are going to stay put. Factor in the young people staying home, I just don't see housing prices dropping all that much except for people that absolutely HAVE to buy and sell. And I'd venture to guess a lot of that is corporate relocations anyway. It would take a big job loss situation for people to not make payments and foreclose.

WookieMan says

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50.

Maybe I should quite my job and clean houses...

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/ycgrjg/my_homebuying_adventure_has_sadly_come_to_an_end/

My homebuying adventure has sadly come to an end.

Unfortunately, it is with great sadness I am forced to end my homebuying adventure. I started back in April 2021, putting 5%/$40,000 down as a deposit on a to be constructed new home, supposed to be finished in June 2022. I had been saving for years for this moment - and here it was, at long last. I thought I was smart - didn't have to deal with a realtor, didn't have to worry about being outbid, didn't have to worry about a home inspection or buying a fixer-upper.

I rate locked for 240 days back in January 2022 at 2.85%. A steal. . . my current rent for a 2 bed 2 bath was $2,750. Here was my chance to own a 3 bed 3 bath brand new townhome - own, not rent for a monthly mortgage payment of $3,060.

Here's where things went sideways. I thought 240 days would enough for a rate lock. Construction was to be done by June 2022 - I even accounted for delays in construction, so 240 days would put me into September, 3 months past the expected completion. As the date crept closer, the progress on the house slowed down. June completion wasn't happening. Neither was July. Or August. . . . and so on and so forth. Simultaneously, rates kept rising. 3%. . . 4%. . . 5% . . .

Around July, I received notice from the builder that they had encountered substantial delays and the close date would now be November. Panicked, I called my lender and asked about a rate lock extension. By now, rates were around 6.5%. We were able to negotiate a rate lock extension starting at the expiry of the original rate lock - 60 days past, which would take me into November. The rate lock cost me an additional $10,000 but to save 3.65% on my mortgage was worth it.

And then, tragedy. Again, delays from the builder. Estimated completion is now February 2023 - 9 months past when it was supposed to be complete. I asked my lender is there any option to do an additional extension - to which they declined. I am now stuck at shopping around for rates. No one is willing to extend a rate to February, let alone any longer. Rates are currently at 7.5%, who knows what whenever this thing is finished. At 7.5%, my monthly payment would be $5,200 - $2,200 more than it would have been if the builder had finished on time. Something that would demolish my monthly budget.

And so, without a lender, without any recourse, and most importantly, without a home, I am forced to end my homebuying adventure and back out of the contract. The builder is claiming "pandemic delays", which allows them to unilaterally extend the closing date without recourse. They will pocket my hard-earned deposit money, and I will return to my apartment, defeated, and begin saving once more, minus the $40,000 I wasted on a gamble.

If you start your own service you can make good money and expense a lot of bull shit that you'd have to pay for a normal W-2 job. Gas, 50% of meals, supplies for cleaning you can use on your own home. Besides the labor it's probably not a bad gig if you really think about it.

My friends wife started a cleaning service in IL and then they moved down to FL. White American female. I think she's pulling $80k/yr in FL cleaning houses. Generally the homeowner leaves or you're doing vacation rentals, so you only have to deal with the initial sale and it's on repeat. She could scale and hire more cleaners and make even more.

Only thing that would creep me out, or gross me out is vacation rentals with cum filled towels, body hair, etc. I don't think I could do that everyday. Most homeowner cleanings they keep that shit clean by themselves as you eventually get to know your cleaner and they you. So you tend to keep the gross stuff out of site.

ad says

Prices should fall 10% for every 1% increase in the 30 year mortgage rate.

At this point that means a 30% decline then.

WookieMan says

you tend to keep the gross stuff out of site.

Ha!

A clever double-entendre by you WookieMan, "out of site / out of sight".

I wish I had your wit!

GNL says

At this point that means a 30% decline then.

Don't you mean 40%?

1337irr says

WookieMan says

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50.

Maybe I should quite my job and clean houses...

My cleaner in Maui makes about $140/hour off my rental. Cleans it in about an hour and does a damn good job too. That's if you exclude the fact that he washes the sheets and towels offsite at his place. He shows up with cleans and swaps them out.

zzyzzx says

GNL says

At this point that means a 30% decline then.

Don't you mean 40%?

But @ad keeps telling me we will only see 5.5% rates and a drop of only 17%.

GNL says

But @ad keeps telling me we will only see 5.5% rates and a drop of only 17%.

GNL, I see about a 20% drop in the Florida panhandle from current levels, and prices have dropped here in my townhome HOA (~2 miles from beach) about 7%. I see rates stabilizing around 5.5% to 6% once inflation starts to steady between 3% and 5% and the Fed Funds rate reaches 4.75%. I think this is plausible around early summer of next year.

Very Respectfully, AD

https://www.dailymail.co.uk/news/article-11350803/Americas-housing-prices-facing-stunning-downfall-West-Coast-facing-fastest-drops.html

America's housing prices are facing a stunning downfall - with the West Coast facing the fastest drops of up to 10% in cities like San Jose and San Francisco: Experts say the trend will soon spread to the Northeast
A new study from the American Enterprise Institute shows that stunning price drops in the housing market are impacting the West Coast
Cities such as San Francisco and San Jose have seen housing price drops over more than eight percent
The study concludes that the same price drops are likely to impact the east coast as higher unemployment and recession loom
Earlier this month, experts concluded in a Bloomberg study that recession was 100 percent likely in the next 12 months

Homeless don't surf!

https://finance.yahoo.com/news/mortgage-rates-top-7-percent-140004228.html

Mortgage rates top 7% for first time since April 2002

Mortgage rates surpassed 7% for the first time since April 2002, adding more reason for price-struck homebuyers to stay on the sidelines.

The rate on the average 30-year fixed mortgage hit 7.08%, up from 6.94% the week prior, according to Freddie Mac.

https://www.cbsnews.com/news/house-price-fall-drop-2023-mortgages/

U.S. home prices could fall as much as 20% next year

When you see it....

A northern Virginia broker just told me his prediction is 14% rates. He's already seen a 9% close.

GNL says

A northern Virginia broker just told me his prediction is 14% rates.

14% was the going rate in 1982.

GNL says

A northern Virginia broker just told me his prediction is 14% rates. He's already seen a 9% close

The 30 year mortgage rates are at 7% , and the highest they've been in at least 15 years.

https://www.freddiemac.com/pmms

Mortgage rates should go down or flat-line when inflation drops notice they peaked in 1981 and steadily dropped as inflation steadily declined.

The 30 year mortgage rates all time high was at 16% in 1981.

....

ad says

The 30 year mortgage rates all time high was at 16% in 1981.

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

GNL says

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

I don't think we'll get hyperinflation like back then. Look at how inflation peaked recently around 9.2% this June. It has trended downward to 8.2% this September.

Banks will charge more interest for loans ranging from mortgages to car loans to home equity loans when inflation increases.

They have to in order to make enough money from the loans as far as the spread or difference between inflation and the interest rate, or more so between the Fed Funds rate and the interest rate of the loan.

Its just that since 1981 to present day, inflation has trended down. We are in a new environment not seen since the early 1980's.

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https://www.reddit.com/r/REBubble/comments/yfcyt0/realtorcom_app_removed_historical_housing_prices/

Realtor.com App Removed Historical Housing Prices

It seems Zillow is hiding information as well.

It's just like when one of them started hiding crime stats.

ad says

GNL says

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

I don't think we'll get hyperinflation like back then. Look at how inflation peaked recently around 9.2% this June. It has trended downward to 8.2% this September.

Banks will charge more interest for loans ranging from mortgages to car loans to home equity loans when inflation increases.

They have to in order to make enough money from the loans as far as the spread or difference between inflation and the interest rate, or more so between the Fed Funds rate and the interest rate of the loan.

Its just that since 1981 to present day, inflation has trended down. We are in a new environment not seen since the early 1980's.

OMG man...
1. inflation has been outpacing loan interest rates for how long now? They lose money on every loan and have been.
2. we didn't have hyper inflation back then.
3. it's different this time? Where have I heard that before?
4. I make no predictions myself.

GNL says

1. inflation has been outpacing loan interest rates for how long now? They lose money on every loan and have been.

Back in August 2013 the 30 year rate mortgage for our new home was 3%. Inflation was no more than 2% back then. That was the lowest level the 30 year rate reached since 1981.

So when the mortgage got issued in August 2013, the rate was higher than inflation. I am referring to the rate being higher than inflation the date when the loan is issued.

We had 16% inflation back in 1981. But I understand that may not be considered hyperinflation compared to other periods of time and in other countries like Germany 1920's.

I just hope that corporations, industry and workforce can roll up their sleeves and get enough motivation and realize enough innovation to increase productivity in order to drive down the costs per units for goods and services.
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cisTits says

ad says

I don't think we'll get hyperinflation like back then.

????

America has never had Hyperinflation.

Hyperinflations persist in countries such Turky and Argentina around 80%. That is hyperinflation, uhhhh.

1) This: "(Bloomberg) -- A heap of distressed debt is expanding in the US corporate bond market and investors worry that a burst of defaults will follow."

https://finance.yahoo.com/news/growing-pile-distressed-debt-signals-110000432.html

Companies like tech companies in Silicon Valley that are will need to refinance existing debt are going to have to cut costs, which means layoffs.

2) and this: Home sales fall 10%

https://www.cnbc.com/2022/10/28/pending-home-sales-fell-10percent-in-september-from-august.html

REpro says

Hyperinflations persist in countries such Turky and Argentina around 80%. That is hyperinflation, uhhhh.

Yes, in the past I was thinking Germany 1920's and in the present I was thinking Venezuela

cisTits says

America has never had Hyperinflation.

https://mises.org/library/inflation-and-american-revolution

I'm pretty sure that the CSA had hyperinflation as well.

A few things that the blogsters are saying will contribute to declining RE prices:

1. Oldsters seeing their cash cow nest egg continue to leak value decide to get while the getting is good and sell, taking the equity and buying a smaller retirement home somewhere, or checking into the Thanatos assisted living facility.

2. Worker bees who were just getting by being able to make their mortgage payment, car payments, Netflix and other streaming services payments, etc., are now unable to pay their bills as inflation is eroding how far their income can go and so they sell or default.

3. Rising debt payments cause companies to cut costs elsewhere and elsewhere includes labor. Layoffs accelerate with rising interest rates.

4. Airbnbust titans of industry are seeing a drop in rental income as inflation eats away at disposable income, and as layoffs take their toll. They jettison money losing properties as they, too, are unable to make the mortgage payments.

A bit off topic, but the show Animal Kingdom describes how crime families can launder ill-gotten gains through rental properties. They buy the properties and then rent to fictitious people, and their crime cash is laundered through the properties as rent. Wonder if this is actually going on.

ad says

GNL says

1. inflation has been outpacing loan interest rates for how long now? They lose money on every loan and have been.

Back in August 2013 the 30 year rate mortgage for our new home was 3%. Inflation was no more than 2% back then. That was the lowest level the 30 year rate reached since 1981.

So when the mortgage got issued in August 2013, the rate was higher than inflation. I am referring to the rate being higher than inflation the date when the loan is issued.

We had 16% inflation back in 1981. But I understand that may not be considered hyperinflation compared to other periods of time and in other countries like Germany 1920's.

I just hope that corporations, industry and workforce can roll up their sleeves and get enough motivation and realize enough innovation to increase productivity in order to drive down the costs per units for goods and...

We need defaults. We've been papering over our problems for decades. Let the defaults begin.

GNL says

We need defaults. We've been papering over our problems for decades. Let the defaults begin.

I think of corporations that have to refinance debt and how they will fare if the Fed Funds rate continues to stay high. Some may go bankrupt or default.

I suspect most will just cut costs which means layoffs, which means some of those laid off will default on bill payments like mortgage and credit card. Of course, this is if the economy is in bad shape.

Prices in our rural area(s) have started climbing again, almost back to highs. Now these are estimates by these online RE firms, and they don't necessarily know about other factors such as rising dues etc., but I don't see a crash anywhere on the horizon thus far.

Santa Cruz for sale is getting gradually more crowded. Capitola, which could go for months with just one or two listings, has many now.

Of course, there will be the musical chair period where people cling to their fiat equities. However, those who need to sell or are bailing out on investments will start dropping prices. Shaded reds are just listings that I had clicked on.

https://www.thegatewaypundit.com/2022/10/biden-economy-home-values-across-country-dropping-rapidly-especially-west-coast/

"BIDEN ECONOMY: Home Values Across the Country Dropping Rapidly – Especially on the West Coast

Ceffer says

"BIDEN ECONOMY: Home Values Across the Country Dropping Rapidly – Especially on the West Coast

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It peaked at 320 in June 2022. It was 220 in April 2020. It increased from 220 to 320 or about 45%. It needs to decrease about 31% to get to 2020 levels based on the Federal Reserve wanting asset prices like home and stocks returning to 2020 levels.



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