patrick.net

1337irr says

Eman says

1337irr says

https://www.reddit.com/r/wallstreetbets/comments/15b8lwk/tales_from_a_401k_administrator/
TL;DR- Hardship withdrawals are up to pay mortgages.

What makes you think these people don’t use hardship as an excuse to take money out of their 401k and gamble on the stock market options?

https://finance.yahoo.com/news/foreclosures-rising-experts-means-housing-180030618.html

From your article:

“Even though foreclosures are spiking, it’s not the big deal everyone is making it out to be. We are just reaching a more normal level of foreclosure filings,” said Brian Wittman, owner/CEO at SILT Real Estate and Investments.

“According to ATTOM, there were approximately 150,000 foreclosure filings in Q1 of 2019,” Wittman said. “There are still only roughly around 100,000 in Q1 of 2023. It is a rise year over year of approximately 10%. It still doesn’t appear to be the issue everyone thinks it will be.

Just putting things in perspective.

- The rate for early-stage delinquencies – defined as 30 to 59 days past due – was 1.4% in April 2023, up from April 2022. The share of mortgages 60 to 89 days past due was 0.4%, up from April 2022.

- Over the 2005 to 2008 period, delinquency rates rose from around 5 to over 22 percent for subprime mortgages on investor - owned properties, compared with a rise from 5 to around 18 percent for owner-occupied properties.

We’re not quite there…yet compared to the last housing bubble.

Eman says

It’s sad that our Fed is reactive rather than proactive. The next time we hit recession, they’ll cut Fed fund rate down to 1% again, and the cycle continues. That’s my bet.

Fixed:
The next time we hit recession, they’ll cut Fed fund rate down to 0% again

https://apnews.com/article/personal-finance-off-the-charts-transunion-los-angeles-business-223a7be57d988912ee2cbb9b46096e34

More homeowners tap equity juiced by soaring prices

https://fortune.com/2023/07/27/housing-market-institutional-freeze-invitation-homes-net-seller-wall-street-real-estate/

Housing market institutional freeze: Invitation Homes—the largest owner of U.S. homes—was a net seller for the third straight quarter

Eman says

It’s sad that our Fed is reactive rather than proactive. The next time we hit recession, they’ll cut Fed fund rate down to 1% again, and the cycle continues. That’s my bet.

You assume they're being reactive because you see their role as preserving the economy. But if you see examine the outcome of every Fed action without this assumption, you will quickly realize their role is very different.

AmericanKulak says

Knew I wasn't crazy

Looking at the last crash, used is what had a significant drop, and new really didn't move down that much at all. If that trend follows this time around, used has a LONG way to go, as new is dropping precipitously already.

Cardboard box sales have dropped 20% in the first two quarters, most since 2009. But I'm sure those house prices are fine...

NuttBoxer says

Cardboard box sales have dropped 20% in the first two quarters, most since 2009. But I'm sure those house prices are fine...

Could you please expand on that? What kind of cardboard boxes sales have dropped? CPG? Moving? Industrial? Budweiser?

Anecdotal, but I have using Zillow for a while to look at single family homes in Va and NE and have notice plenty of price drops during the last two weeks of July. Also, I see developers are selling off their lots to the public because apparently builders are not buying those lots. The prices have not fallen enough to make up for the rapid rise of the last few years, at least not yet.

1337irr says

Could you please expand on that? What kind of cardboard boxes sales have dropped? CPG? Moving? Industrial? Budweiser?

The number is from companies who make boxes for everything and anything. Boxes are used to ship products. Less products ordered, less boxes. If you want more than that:
https://www.zerohedge.com/economics/big-drop-cardboard-box-sales-scream-recession

Also Yellow just went under, always a sign of economic strength when the largest LTL in the country goes belly up!

Rubicon says

“Seeing plenty of price drops” is like “I think it’s going to rain at some point.”

I have no detailed analysis, just see lots of these:

Rubicon says

That’s the first rookie mistake. No crash ever happens in the same fashion as circumstances/parameters change. Tired of explaining for the millionth of time why this time is different. Sadly, you will likely never own an house and remain a life long renter stuck in the “but it has to crash” circle.

Nope.

Demographics. Boomers are now almost entirely over 65.

You always have time to hold out when you think you've got many years of stroke-free, chronic-illness free life yet. After 65, you're a slip or a stroke away from Assisted Living, or at least a 1st Story only smaller place. When you can no longer climb stairs with ease, selling may be out of your hands as much as your fork now is. And your kids might sell it to pay for that assisted living senior community.

Rubicon says

NuttBoxer says

1337irr says

Could you please expand on that? What kind of cardboard boxes sales have dropped? CPG? Moving? Industrial? Budweiser?

The number is from companies who make boxes for everything and anything. Boxes are used to ship products. Less products ordered, less boxes. If you want more than that:
https://www.zerohedge.com/economics/big-drop-cardboard-box-sales-scream-recession

Zerohedge….aka the sky is falling….ALWAYS!

+ Reventure Consulting.
However, I see rain in the forecast.

Rubicon says

Nice looking houses! Those are >1M USD in SoCal.

They soon will be!

Yet, at the same time, year-over-year sales of new homes surged by 23.8% while existing-home sales sagged.

“With low existing home inventory, new home inventory is becoming competitive, and new homes are now competitive on price,” said Robert Frick, corporate economist with Navy Federal Credit Union, in an emailed statement. “The premium for a median-priced new house versus an existing house is now only $5,000.

In October 2022, the median sales price for a new home was $496,800, while the median existing-home sales price was $378,800—a difference of $118,000. This gap has since narrowed by roughly 96%.

https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/

Knew I wasn't crazy about seeing the new houses go for not much more than the used housing. Browsing Zillow weekly is useful to get a snapshot.

If inventory is so limited, why is the gap between new and old so small? If the housing market isn't doing badly, why are builders trying to bail out despite having a pricing advantage?

HeadSet says

Rubicon says

“Seeing plenty of price drops” is like “I think it’s going to rain at some point.”

I have no detailed analysis, just see lots of these:

Simply amazing how cheap they could build in the Midwest and South compared to California.

These houses are over $2M here in North San Jose and on tiny lots too.

https://redf.in/fo6KKF

Smaller house. Built on tiny zero lot line with no driveway. Sold for $1.95M last month, and with $336/month HOA dues too.

https://redf.in/oI7Edl

Eman says

Smaller house. Built on tiny zero lot line with no driveway. Sold for $1.95M last month, and with $336/month HOA dues too.

https://redf.in/oI7Edl

It's by H-Mart. That's why it sold for such a high price.

Eman says

Simply amazing how cheap they could build in the Midwest and South compared to California.

These houses are over $2M here in North San Jose and on tiny lots too.

What we're gonna build would be $3M+ probably. Getting bids and nearing $700k. We're gonna suck it up even with high interest rates. Midwest is on paper technically cheap as hell. You can get 2,200 builder grade homes for $250k still. They suck. But it's a house and forced saving for those less disciplined.

I'm just done living in my 20's. I can afford a nice house. Kids ages and work circumstances we'll be at home a lot more. We'll probably keep it till we die or hand it down to our kids. If a crash hits we'll just buy shit up. We have the cash. I kind of want a crash. Not buying a boomer house though (not a dig at boomers though they were 100% the cause of 2006-8). So we're gonna build. Dragging our feet, but we'll get it done.

Life is complicated. You live it once. I have no interest ever in being beholden to a landlord. I want to own my property. I don't even care about prices or anything. I care about knowing I have a place to go. And thing is anyone that's not a deadbeat can go and get a job for $50-60k per month tomorrow. They're out there. There's no excuse to cry poor or say housing will crash. It might. Take advantage of it and prepare to be in that position. No one factors in moving expenses and time lost from work as a renter/ That's part of your rent. It's expensive and time consuming.

Though I'll say don't own a home if you don't know shit about repairing anything. You have to have some mechanical and trades skills. Which I think is the case with many anti owner people. They expect it to be repaired and handled. Guess what your rent goes up. Raising rents is easy. You making more money might not be depending on your work. There's not choice in it. You beholden to another person/management company. That SUCKS.

https://redf.in/fo6KKF


Shoot me in the head. That is ugly as fuck.

Patrick says

Awesome!

GNL says

https://redf.in/fo6KKF


Shoot me in the head. That is ugly as fuck.

If you think that house is ugly, try this one. It’s a 60-year old house without any upgrades. It’s the home to AAPL company. It’s a hot home so it will likely sell above list price.

You see, I don’t make the rules. I don’t wish for housing prices to crash, or to go up. I want housing prices to be affordable to everyone, but the market does whatever the hell it does. It’s simply interesting how people perceive I’m a housing bull.

https://redf.in/lr58lw

Trollhole says

Patrick says

Awesome!

Not sure what makes it so awesome. People have to pay a lot more for the same thing a couple years ago.

1337irr says

Eman says

Smaller house. Built on tiny zero lot line with no driveway. Sold for $1.95M last month, and with $336/month HOA dues too.

https://redf.in/oI7Edl

It's by H-Mart. That's why it sold for such a high price.

I don’t think it has anything to do with H-Mart or Costco nearby. It’s just what the market is willing to pay.

My in-law lives just down the street. Bought 25 years ago for $330k. Redfin has an estimated value between $1.5-$1.6M. It is what is it. I neither hate it, or like it. It’s just the cost of living in the Bay Area is nosing bleeding expensive. Whining and bitching don’t help. Just have to figure out a way to make it work, or move elsewhere.

1337irr says

Rubicon says

NuttBoxer says

1337irr says

Could you please expand on that? What kind of cardboard boxes sales have dropped? CPG? Moving? Industrial? Budweiser?

The number is from companies who make boxes for everything and anything. Boxes are used to ship products. Less products ordered, less boxes. If you want more than that:
https://www.zerohedge.com/economics/big-drop-cardboard-box-sales-scream-recession

Zerohedge….aka the sky is falling….ALWAYS!

+ Reventure Consulting.
However, I see rain in the forecast.

What kind of rain do you see in the forecast?

GNL says

https://redf.in/fo6KKF

Shoot me in the head. That is ugly as fuck.

Feel sad for the victim who would buy this shack and paying insane taxes and HOA!

Feel sad for the victim who would buy this shack and paying insane taxes and HOA!

Yeah, but fairly recently built 4 BR 4 BA it was probably designed for today's buyer in San Jose: multiple working age adults sharing the cost.

That shack is a much better value than this 1400 sq ft 3 BR 2 BA gem across town:
https://www.zillow.com/homes/5359-Keene-Dr-San-Jose,-CA-95124_rb/19746754_zpid/
Blue says

These lucky folks who "got the house" will be on the hook for an annual tax bill north of $30K, - $2500/month. God Bless them for subsidizing our local government.

https://www.reuters.com/world/uk/uk-house-prices-drop-by-most-since-2009-nationwide-2023-08-01/

Eman says

but the market does whatever the hell it does.

This is a loaded statement. Let's envision for a moment a truly free housing market. No licensing required to buy or sell, and I mean for any step of the process. Closing costs, only if you want to hire someone. You want an inspection, up to you whoever you want to do it. No appraiser because if there are property taxes, it's a flat rate set by the area based solely on size and location of the property, doesn't matter what you build on it.
Next no local, state, or federal assistance programs, NONE. All loans go through the bank directly, the bank assumes 100% of the risk, and has no one to back them if you fail to pay. Imagine what that does to lending standards and allowable length of repayment.
Ok, now you can say what you said earlier because the market will truly be allowed to do whatever it wants. But you won't see those prices, I doubt even a 10th of what you see currently.

NuttBoxer says

All loans go through the bank directly, the bank assumes 100% of the risk, and has no one to back them if you fail to pay. Imagine what that does to lending standards and allowable length of repayment.

Yes, government backed loans are the sole reason for the inflated house prices, the mini-mansion boom, and the trend toward oversize homes in general.

zzyzzx says

A picture is worth a thousand words. If history is any indication, this may pullback to 475-500% before resuming to the upside. How much higher can it go? No one knows. In hindsight, 2010 was a great buying opportunity.

Reminds me of someone watching the shore break, not seeing the set that just came in and is about to put them on their ass. One of the best tricks of central government economy is keeping people lost in the weeds, never understanding primary trends or big pictures. Fitch gets it, why don't you?

NuttBoxer says

Reminds me of someone watching the shore break, not seeing the set that just came in and is about to put them on their ass. One of the best tricks of central government economy is keeping people lost in the weeds, never understanding primary trends or big pictures. Fitch gets it, why don't you?

Fitch, Moody’s, etc… the companies that gave the garbage CDO’s AAA ratings during the last housing bubble. They get it. Got it. 👍

You live in an ideal world while I live in reality. We don’t share the same view. We just have to disagree.

Are you kidding, step into a “new construction home” these days. It feels like it was built out of popsicle sticks and dental floss.

They don’t build them like they used to…

Eman says

Fitch, Moody’s, etc… the companies that gave the garbage CDO’s AAA ratings during the last housing bubble. They get it. Got it. 👍

Right, and even they say the economy is going down. You haven't bothered to calculate your inflation losses as a landlord, my friend has. You struggle to understand trends that show huge rent drops coming, because you don't want to lower your rent.

I don't have a dog in this fight, I don't have my livelihood staked on one outcome or another. My only causes are honesty, and responsibility. But your livelihood is deeply tied to your beliefs, which makes you biased, and I'm guessing you're at least 10-20 years older than me, and haven't moved nearly as much, which makes you afraid to change.

Objective facts paint a different picture than what you think. But society pushes mental sickness and disconnection from reality. Don't buy into their bullshit. Muster some courage, face reality, and act accordingly.

@NuttBoxer,

I gave you a pass on the rent chart that you shared. You didn’t interpret the chart correctly so your 24% drop projection/prediction is simply wrong. Go take a look at the chart again and know where you went wrong.

No bias for me. I’m a data/numbers guy. If it weren’t for this, I would still be slaving away at a W2 instead of quitting my job during the last housing bust and went all-in.