patrick.net

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.

.

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.
.

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

.

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.



.

House around the corner listed a couple of months ago, initially dropped price by 180k, seemed it sold at a still pretty high price. Sale musta fallen through, back on market yesterday with another 85K price trim.

https://www.reddit.com/r/RealEstate/comments/yh3t9v/does_taxes_go_up_every_year/

Does taxes go up every year?

https://www.reddit.com/r/RealEstate/comments/yhe664/builder_has_homes_listed_40k_less_than_our/

Builder has homes listed $40k less than our contracted sales price.

Yep. Builders slashing prices on accumulating unsold inventory is going to establish new, lower comps.

zzyzzx says

Builder has homes listed $40k less than our contracted sales price.

No doubt this is happening as builders cancel builds that are less than a month away from being move in ready and drop prices on everything that can be sold. They are preparing for an economic winter. The good news is that new inventory is only a fraction (maybe 10%) of existing home sales and of that percentage only a small part (less than 1/3) are at a point in the pipeline that they could be finished. So the overall effect of new home inventory on the total real estate market is minimal.

@ad is the only one here posting relevant facts and I agree with his musings. There hasn't been, and will not be, a national "housing crash" until there is a mass of forced sales. People here are posting good reasons why this can occur (job recession would be my leading guess) but AT THIS TIME the country does not have an excess of bad debt in the mortgage market like in 2006 - 2008 and we do not have a significant number of mortgage holders that are a paycheck away from default.

Housing Crash?!? We can't hope it into existence, and why would we? Most peoples biggest chunk of net worth is tied up in their home. Hoping for a crash is a zero sum mentality.

Are prices falling? In most places they are, but they are still above where they were 24 months ago.

https://www.reddit.com/r/RealEstate/comments/yhn7ff/earnest_money_deposited_seller_lowered_price_by/

Earnest money deposited, seller lowered price by 100K on NEW home.

About a month back, we bought a house for about 800K, and we sent the earnest money (17.5K) along. Yesterday when we looked at the prices, we saw that the same house was now selling for 700K. Same model, same plan, same elevation. I already sent the initial deposit, is there any way I can lower my house price? There is already so much high interest rate. Is there anything I can do? I don’t want to be over paying.

People above talking about tax increases and new buyers signing up for a high tax bill made me think about my area of Sunnyvale. The original owners are dying off and the change in tax, thanks to suppressed tax from Prop 13, can be pretty funny...

2022 tax bills aren't yet listed on Zillow, so you can't see the assessments based on totally bubblicious purchase prices, but here's one that sold for a mere $2.3 MM 18 months ago. If it had sold just 8 months ago you could figure another 30% higher tax.



(Not trying to call the new owner out, but in case people are wondering, this is 558 Croyden Ct, Sunnyvale, CA 94087.)

https://finance.yahoo.com/news/mortgages-down-55-us-lenders-100000026.html

With new mortgages down 55%, US lenders are starting to go bankrupt — could this one factor trigger the worst surge of failures since 2008?

https://www.reddit.com/r/RealEstate/comments/yiu9pn/how_soon_to_reduce_listing_price/

How soon to reduce listing price?

Condo in Boston has been listed for 2 weeks. We’ve had zero interest so far. Not a single person at the open house, no inquiries to our realtor. We are priced competitively but it’s a nicer building and probably on the high end for our area.

Realtor wants us to drop the price which we are fine with but I think dropping the price this quickly reeks of desperation. Should we wait another two weeks?

https://finance.yahoo.com/news/home-prices-falling-faster-now-194540822.html

Home prices are falling faster now than in 2006