patrick.net

a more comprehensive chart for housing affordability

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https://wolfstreet.com/2024/08/28/treasury-department-aggressively-pushes-down-long-term-interest-rates-via-shift-to-t-bill-issuance-and-bond-buybacks/

DemocratsAreTotallyFucked says

https://wolfstreet.com/2024/08/28/treasury-department-aggressively-pushes-down-long-term-interest-rates-via-shift-to-t-bill-issuance-and-bond-buybacks/

Election year financial engineering gimmick, almost like Biden releasing the strategic oil reserve in 2022 and then gas prices going up just after the November 2022 midterm election

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AD says

Election year financial engineering gimmick,

Yup!

Hey kids, The days of >5% 13-week T-bills is slipping away.

SoTex says

2. I just remodeled a rent house that easily fetched $2050 monthly rent before the remodel and almost no showings the past 2 weeks. One low ball offer that soon will have made sense to accept. One price drop so far. I've never had a vacancy like this since I started it in 2013.

Still nothing. I may be replacing 4 black kitchen appliances with stainless to keep up with the competition in addition to asking for lower rent. I guess there are labor day sales this weekend so there's that.

Realtor pictures of the place suck too so I'll be doing that myself this holiday weekend as well.

Al_Sharpton_for_President says

Hey kids, The days of >5% 13-week T-bills is slipping away.

Smoke em if you got em!

My Property tax went from $800 in 2018 and is now projected to go to $1050. Basically a 25% increase in 6 years.

My condo assoc fees went from $280 to $420 in the same period, almost all of which was insurance costs. Almost all of the increase in the past 3 years.

I live in a two-story, so exempt from most of the new requirements. I've heard of high rise owners fees more than doubling, and for housing development owners, too.

People are running insurance costs when under contract, finding the insurance company wants $20k in repairs to be insurable, and told their homeowners will START at $5k/year.

Florida is set for a massive reset.

One good piece of news is DeSantis signed a bill that severely restricts HOAs in limiting work vehicles in driveways, requiring them to keep itemized expenses, banning fines without multiple warnings, requiring new fineable rules to be promulgated in writing to all members and not enforceable until after the next board meeting (which by law must be announced well in advance in writing), redefining HOA entry to immediate emergencies only, limiting backyard restrictions, limiting fines to less than the county/cide code violation equivalent, etc. etc.

Excellent news, and this is actually the Realtors and Developers pushing this, since people are shying away from HOAs but 3/4 of the new housing in FL has been under HOAs this century so far.

SoTex says

SoTex says

2. I just remodeled a rent house that easily fetched $2050 monthly rent before the remodel and almost no showings the past 2 weeks. One low ball offer that soon will have made sense to accept. One price drop so far. I've never had a vacancy like this since I started it in 2013.

Still nothing. I may be replacing 4 black kitchen appliances with stainless to keep up with the competition in addition to asking for lower rent. I guess there are labor day sales this weekend so there's that.

Realtor pictures of the place suck too so I'll be doing that myself this holiday weekend as well.

Haha, make sure to post your better photos of what your Realtor provided. Seriously, I’d like to see them.

AmericanKulak says

One good piece of news is DeSantis signed a bill that severely restricts HOAs in limiting work vehicles in driveways, requiring them to keep itemized expenses, banning fines without multiple warnings, requiring new fineable rules to be promulgated in writing to all members and not enforceable until after the next board meeting (which by law must be announced well in advance in writing), redefining HOA entry to immediate emergencies only, limiting backyard restrictions, limiting fines to less than the county/cide code violation equivalent, etc. etc.

Excellent news, and this is actually the Realtors and Developers pushing this, since people are shying away from HOAs but 3/4 of the new housing in FL has been under HOAs this century so far.

Las Vegas needs this too.

GNL says

Haha, make sure to post your better photos of what your Realtor provided. Seriously, I’d like to see them.

I love seeing bad realtor photos. Not a pro like you are, but some realtors that do their own work are astonishingly awful at it. It's like come on dude/gal, you didn't know that was absolute shit. Can't have shitty photos when selling or leasing a place. I prefer real cameras, but there's no reason you can't get passable photos with your phone if you're not lazy.

I've seen photos where they just shoot the toilet in the bathroom. I'd hope everyone knows what a toilet looks like. I want to see the ROOM. They didn't put bath in front of that word for just the shower and toilet. REO (bank owned) properties were the worst around 2009-13. They'd always use the time stamped photos from their inspections. Made the house look like a crime scene. Probably knocked $30-50k off the price just from the photos.

I don't miss those days. You learn a lot about going through other peoples houses. Not including family and friends, I've been in well over 5,000 houses/condos/apartments. Usually 3-7 a work day for 15 years. The way some people live is mind boggling. I wouldn't eat a meal from probably 60% of the houses I entered.

I'd walk out when taking photos if the place looked like shit. Owner of the brokerage would get pissed at me and then I'd show him some quick shots before I gave up. You either want to sell the place or have everyone see your trash all over. I wouldn't shoot houses that looked like turds. I offended plenty of people in those 15 years. I'm actually nice in a casual setting. If you waste my time and can't do the basics I'm an ass hole. Also inspectors are losers. That's another topic/thread though.

Wookie, you hit a lot of notes. I was told, just yesterday, that only 40% of Realtors/listings use professional photography. I have so much to say about this. It blows my mind. It ain't expensive to have a "professional" come and take photos. $200 (of course, depending where you live) should get you 30 HDR photos. HDR has come a long way and lots of Realtors actually like the "look" of HDR. Really, a Realtor can't pay $200 for photos? A broker can't front a Realtor the $200? Not only that but, professional photography helps the Realtor in 3 ways. 1. The photo session can be a show. People like a show. 2. It makes the Realtor look much more like a full time professional to be working with other professionals. And 3. Of course, nice big and bright photos make a house much more desirable than the "other listing" down the street with small and dark photos. It really is a no brainer. Call a professional real estate photographer.

The only nitpick on your comment would be...I believe EVERY listing deserves to be photographed. My closing line when selling a Realtor is..."If you aren't online, you're invisible." This has to do with photos.

Here's a simple photo (please remember, Patrick compresses(?) the photos on upload) one of our photographers (Btw, just today, we charged a Realtor $600 for 3 sets of photographs for 3 different commercial condos that took the photographer a total of 45 minutes to complete) handed in the other day...

https://ycharts.com/indicators/case_shiller_home_price_index_national#:~:text=Case%2DShiller%20Home%20Price%20Index%3A%20National%20is%20at%20a%20current,5.37%25%20from%20one%20year%20ago.

I dunno...maybe this is the top...but there's talk of maybe $25k in "free" money to new homebuyers in addition to the about $10k already being put up by the States.

Except for Florida, I don't see any forced selling, and even in Florida there's tons of folks moving there. If you look at the overall monthly cost for Florida...sure the sales prices may go down, but the increase in HOA expenses and insurance expenses wipe out any "savings" from a lower price.

Developers will build what they can get financing for, and the banks have cut back on financing multi-family. Without a bunch of new supply, it'll put pressure on rents. So much cash in the system too, Dunno how long any downturn in prices would last with the trillions in CDs and trillions in money markets.

Nationwide, if you look at the chart...it doesn't show any slowdown in price increases.

Misc says

HOA expenses and insurance expenses wipe out any "savings" from a lower price

eventually the "system will collapse" when the insurance annual premium (for the HOA master insurance and the HO-6 for condo or HO-3 for townhome) reaches 2.25% of replacement value even with a deductible of 5% (of replacement value)

I estimate that with my HOA master insurance policy AND my HO-3 policy, that the total annual premiums are 1.47% of a replacement value of around $250,000 for a 3 bedroom, 2.5 bath, 2 car garage within 2 miles of the Florida panhandle white sand, emerald water beaches

They were only about 0.6% of replacement value in summer of 2018 before Hurricane Michael hit

Rents have gone down some such as townhome rents on east side of Panama City Beach; so that should help keep down HOA quarterly assessments (i.e., no 10% increase in landscaping, pool service, etc).

Seems rents are at 2021 levels like $1900 for a 3 bedroom townhome on east end of Panama City Beach, whereas same home rented for $1400 in 2017.
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FL Legislature has been busy.

Unless DeSantis exercises his veto power - unlikely - It will be law that all House Sellers must reveal if they've claimed flood damage during their entire ownership of the property. Including filings with any federal programs, not just private insurance. It must be provided Prior to contract execution.

During the 2024 Florida legislative session, the legislature passed CS/CS/HB 1049 Flood Disclosure in the Sale of Real Property. The bill requires sellers of residential real property to provide a completed flood disclosure form to the purchaser before a sales contract is executed. The bill requires the following of the flood disclosure:

- The form's title must be “FLOOD DISCLOSURE.”

- A flood insurance disclaimer must be provided stating: “Flood Insurance: Homeowners' insurance policies do not include coverage for damage resulting from floods. Buyer is encouraged to discuss the need to purchase separate flood insurance coverage with Buyer's insurance agent.”

- The seller must state whether they have filed a claim with an insurance provider relating to flood damage on the property, including, but not limited to, a claim with the National Flood Insurance Program.

- The seller must state whether they have received federal assistance for flood damage to the property, including, but not limited to, assistance from the Federal Emergency Management Agency.

The bill defines flooding as a general or temporary condition of partial or complete inundation of the property caused by any of the following:

- The overflow of inland or tidal waters.

- The unusual and rapid accumulation of runoff or surface waters from any established water source, such as a river, stream, or drainage ditch.

- Sustained periods of standing water resulting from rainfall.

This bill's passage is considered a significant win in Florida’s floodplain management community. A majority of local floodplain administrators and the Florida Floodplain Managers Association supported the bill. Florida now joins 32 other states requiring some form of flood disclosure to sell real property as it becomes more flood-damage resilient. Potential buyers, both in-state and out-of-state, will be informed of flooding risks before purchasing a home and may avoid flood-related costs.

The effective date of this bill is October 1, 2024, unless vetoed by the Governor.

https://www.withforerunner.com/post/florida-flood-disclosure-in-the-sale-of-real-property

AmericanKulak says

Unless DeSantis exercises his veto power - unlikely - It will be law that all House Sellers must reveal if they've claimed flood damage during their entire ownership of the property. Including filings with any federal programs, not just private insurance. It must be provided Prior to contract execution.

Yes, disclosures. Is that not law in FL??? We had to settle out of court over a property that flooded. That's common law in pretty much every state. I've never heard of a state the doesn't require flooding as part of disclosures. Federal programs don't matter, you have to disclose if your house floods.

WookieMan says

Yes, disclosures. Is that not law in FL??? We had to settle out of court over a property that flooded. That's common law in pretty much every state. I've never heard of a state the doesn't require flooding as part of disclosures. Federal programs don't matter, you have to disclose if your house floods.

^^^^ this was my line of thought when reading that too.

But then I thought: FLORIDA

DemocratsAreTotallyFucked says

WookieMan says

Yes, disclosures. Is that not law in FL??? We had to settle out of court over a property that flooded. That's common law in pretty much every state. I've never heard of a state the doesn't require flooding as part of disclosures. Federal programs don't matter, you have to disclose if your house floods.

^^^^ this was my line of thought when reading that too.

But then I thought: FLORIDA

"Florida law requires the seller of residential real property to affirmatively disclose to the buyer all known facts materially affecting the value of the property, which are not readily observable and are not known to the buyer."

But buyer beware, and do a thorough check to see any hidden damage. Check for hidden mold damage. Can run mold and mildew testing also by buying the test kits at Home Depot or Lowes.

Same goes for testing for radon especially in Northern Virginia like Fairfax County and Fauqier County.

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Even Zillow today says the housing market has cooled in Panama City Beach , Florida

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The coming Fed Rate cut is already priced in by the banks. Wall Street fled the SFH market last year.

Needs to be 3.5% to adjust for median income, something that happened for a few months in the last 25 years.

And 2.75% to adjust for the 25-30% nationwide increase property tax and insurance markups these last few years. And the AirBNB battering from both the Economy and from Local Ordinances.

The Realtor's last year excuse of no inventory/no choice rings hollow as Florida inventory skyrockets.


There's only one solution: Pound those asset prices down, beat 'em like the printer from office space.

My prediction is by March, panic ensues.

AmericanKulak says

The Realtor's last year excuse of no inventory/no choice rings hollow as Florida inventory skyrockets.

Florida's problem has been North of I-80 boomers (NY, PA, IL, WI, IN and the rest of the northeast) moving down there. Throw in some vacation rental investments. Tack on a covid friendly governor and you had over investment in housing. This was obvious as shit coming out of your ass every morning after a cup of coffee.

The dreaded Boomer movement and selling is already done. And/or the Boomers that can't retire are just going to stay put for the next decade or two. This Boomer sell off was a thing before the housing bust. When you don't build that shit was fake. FL saw an influx of retirees and thought it wouldn't stop. It is. There goes the market. It's pretty basic if you think about it. Covid bump and poof, it's over. 2-3 years from now I'd be intrigued in the FL market after it crashes. It's got a way to go.

WookieMan says

FL saw an influx of retirees and thought it wouldn't stop. It is.

Yup. And this has happened before with gaps between the Greatest and the Silents, too.

AmericanKulak says

The coming Fed Rate cut is already priced in by the banks. Wall Street fled the SFH market last year.

Needs to be 3.5% to adjust for median income, something that happened for a few months in the last 25 years.

And 2.75% to adjust for the 25-30% nationwide increase property tax and insurance markups these last few years. And the AirBNB battering from both the Economy and from Local Ordinances.

Peak price around Florida panhandle was in early 2022 with a locked in 30 year mortgage rate of 3%.

For every 1% increase (or decrease) in the 30 year mortgage rate, it is equivalent to a 10% increase (or decrease) in home prices.

So if the 30 year rate steadies around 5.5% by next February, as I forecast, then the median home price should be 25% below peak price.

However, this is a very conservative estimate since household income in the Florida panhandle has increased by about at least 15% since early 2022.

So maybe it should only go down about 10% to 15%; a 3 bedroom , 2 car garage townhome about 2 miles from beach in Panama City Beach (a barrier island), sold in early 2022 for around $330,000. Its market price is now around $285,000.

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AmericanKulak says

WookieMan says

FL saw an influx of retirees and thought it wouldn't stop. It is.

Yup. And this has happened before with gaps between the Greatest and the Silents, too.

Ok, Demographics is Destiny (as Larry Sabato states).

So you mean there was an economic slowdown like migration to Florida between the World War 2 generation (Greatest Generation) and the Silent Generation (Korean War Generation) ?

I wonder if Florida has gone a lot more Republican because a replacement of the older Jewish population in South Florida (Greatest and Silent Generations).

Now with Baby Boomers leaving work force for next 5 years , I wonder if that is why we see a lot more job vacancies and a decent labor market despite the economic slow down ?

10 to 15 years ago it was very hard to get a teacher position within the public schools. Now look at how easy it also is to get into the trades like HVAC repair.

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WookieMan says

When you don't build that shit was fake. FL saw an influx of retirees and thought it wouldn't stop. It is. There goes the market. It's pretty basic if you think about it. Covid bump and poof, it's over. 2-3 years from now I'd be intrigued in the FL market after it crashes. It's got a way to go.

The Florida panhandle is unique from this as you get a lot of people from Alabama and Georgia that want to move down here who are in the 20s and 30s.

All of LA (lower alabama) is setting up shop in the Florida panhandle like moving their manufacturing operations here, let alone you have a military presence from Pensacola to Tyndall AFB in Panama City, Florida.

Its not the same retirement demographic like The Villages or Boca Raton.

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The big lie is that we never built enough housing; the real truth is we built enough, a million a year, but the wrong kind.

Single Childless Cat Mom Middle Aged Florida Teachers don't need and can't afford to really keep a $420k 4 bed/2 bath.

At 4% or 7%. And definitely not with the 30% blowup in insurance and property taxes.

AirBNBs are taking a beating; the strategy of buying a zero lot in the burbs a half hour from attractions/tourist areas is dying in most places; actual owners are up in arms and inflation is smashing travel budgets.

AmericanKulak says

The big lie is that we never built enough housing; the real truth is we built enough, a million a year, but the wrong kind.

Single Childless Cat Mom Middle Aged Florida Teachers don't need and can't afford to really keep a $420k 4 bed/2 bath.

At 4% or 7%. And definitely not with the 30% blowup in insurance and property taxes.

Yeah, my master insurance for my HOA (townhome community within 2 miles of beach in Florida panhandle) had $58,000 for insurance premium in 2018. Now it is around $325,000.

In 2018, I was paying $800 for HO-3 insurance for my townhome (1% deductible and $180K replacement value) and now pay $1900 (with 2% deductible, $250k replacement value).

AmericanKulak says

AirBNBs are taking a beating; the strategy of buying a zero lot in the burbs a half hour from attractions/tourist areas is dying in most places; actual owners are up in arms and inflation is smashing travel budgets.

That's what is taking a bite out of the working class finding affordable housing in Panama City Beach even as some townhome HOAs allow vacation rentals.

I am glad AirBnB stock is down 50% from its all time high set around February 2021.

They converted a lot of existing and new housing on the beach (not just condos on the beach) to AirBnB. From my data, at least 92% of the condos on the beach are short term rentals.

So that was not enough and they started to convert housing on Panama City Beach to short term rentals, such as housing that is within a 5 minute walk of the beach.

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AmericanKulak says

The big lie is that we never built enough housing;

I am seeing rent at least staying at 2021 levels if not slightly below that for east end of Panama City Beach, and that includes Urban Blu apartments. And they just broke ground on Hathaway "Luxury" Apartments just down the street near Urban Blu Apartments.

So it seems just buy the asking rental rates that supply has caught up with demand.

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AD says

Now with Baby Boomers leaving work force for next 5 years , I wonder if that is why we see a lot more job vacancies and a decent labor market despite the economic slow down ?

Boomers that could retire already did and moved. The ones that can't retire stay put and work until they die or end up in a home. The big Boomer sell off has already happened. I don't think people realize this.

You have a bunch of 65-80 year old lunch ladies, servers and Home Depot clerks that couldn't 100% retire. They likely downsized already and stayed near family. $300/wk and some SS money. The Boomer generation has moved to FL and AZ already at this point. Those states are going to see a price drop for sure.

Regionally within the state, I think the Panhandle actually does well, maybe a slight drop. The central coastal areas I could see take a baby seal beating of 20-30% drop. Miami will generally always do fine. Condos might take a hit. Condos in general are a bad position to be in, in my opinion. You got the now biggest generation having families. They ain't living in condos. Boomers got their condos. That's a market I wouldn't touch anywhere. HOA's can eat cock as well. If you're well off and don't want to do anything there's still demand. Just not remotely enough to justify prices.

Places like Tampa, Fort Myers, Sarasota, Orlando are going to eat shit price wise. I'm not super familiar with the East coast, but I'm guessing they might be in for a dick in the ass stabbing price wise over the 2-4 years. Won't be a "crash" "crash" but people gonna lose some money.

AZ scares me as well as old people get cold when they're dying. They build retirement communities like they're going out of style. At some point the demographics aren't there to fill them up. So I see some trouble in the AZ market. I don't think it will move the overall market there. Could be job losses though as the geezers die and service jobs start dying off as the non wrinkled people don't have anyone to assist.

Could just move to IL. Lol. Prices are low outside of metro areas. Won't ever give away my town, but outside of winter, if you didn't like it you'd be a common retard. We make our own fun.

"HOA's can eat cock."

No doubt.

WookieMan says

AZ scares me as well as old people get cold when they're dying. They build retirement communities like they're going out of style. At some point the demographics aren't there to fill them up. So I see some trouble in the AZ market. I don't think it will move the overall market there. Could be job losses though as the geezers die and service jobs start dying off as the non wrinkled people don't have anyone to assist.

yes as nursing homes have to lay off people because they are no longer at full capacity

they can repurpose the retirement homes if that is possible and then wait for another 20 years until they get enough of a demographics change to return to full capacity

I think of the shopping mall as 40 years ago I would have never though they would go out of style , and now where I live they are repurposing the Panama City Mall
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I know inflation is propping up prices but how much longer can it last for places like CA. After reading about insurance increases in CA I got a few quotes for my old house I sold. In 2020 my last insurance payment was 1150 now it's around 3k that and property tax the couple that bought my house are paying almost a thousand a month in tax and insurance. Add in car insurance and other cost of living increases and I don't see how everything is still going. Is everyone still there seeing these increases?

AD says

yes as nursing homes have to lay off people because they are no longer at full capacity

My wife works at a nursing home and they charge $7k/month per person. That's for living there, plus medication service, laundry, dining and some events.

Other services charge $1,200 - $3k more on top of that. Like assisted showering.

Two residents moved put back to their families. My wife also worked direct for families, on the side. But all that dried up earlier this year.

Better pray TeslaBots are advanced enough to wipe our butts on the cheap when we hit our seventies.

WookieMan says

Boomers that could retire already did and moved.

Yep. For the most part this is the case; I'd say most of the boomers who could buy are in. There might be a handful trying play catch up, and wait/work a few more years and sell their Northern property first, but they're a minority and the most vulnerable to a downturn.

WookieMan says

Places like Tampa, Fort Myers, Sarasota, Orlando are going to eat shit price wise.

Already happening; Orlando now is mostly in the $300ks; the Southwest around Myers took a beating.

It'll start in Condos first, then spread to townhomes and SFH near the beaches, then outward. Florida is very dependent on retirees freely spending for jobs, too. It's extremely sensitive to old people spending money on dining out and day trips and shopping, as well as tourism. Many governors are trying to diversify out into other things but it's only been a drop in the bucket.