patrick.net

Its ALWAYS a good time to flip a house!

Was a bit surprised to hear Schiller say he thought the RE market would hang in there for another "year or two". He's usually more pessimistic than that.

gbenson says

Was a bit surprised to hear Schiller say he thought the RE market would hang in there for another "year or two".

From what I can tell, there is still a ton of SFH investment cash being lent/raised; if home prices edge slightly downward for a quarter it's inevitable that we'll see another bump up after that.

When the music stops I'm not quite sure, but I think we can all see that the individual homebuyer is getting squeezed out of their seat at the moment..

So wait, Schiller thinks short term prices will rise, long term is uncertain, and best investment is in multi-family units.

Well, color me awe struck. That's amazing. I don't think anyone looking at any market would have seen that.

donjumpsuit says

It couldn't be a worse time to flip a house.

You are a flipper who is relying on, at the very least, steady demand, overbids, and a modest increase over the course of the next 3 months.

You closed in mid May. It is now Late June, and you are about half way through, and the affordability of a monthly mortgage payment just dropped almost 20%.

This fact just cut the legs off a 3.5% FHA buyer, and all cash buyers will have more choice.

Meanwhile homes are flooding the market because the price is aligned with last bubble pricing.

Much better value and choice in a home can be found in a price range that also includes a flipped home, which needs a specific return.

By late August the flippers will be cooked in the hot summer sun. It's like the perfect storm.

Like I said its the perfect time to dump... er... flip a house!

robertoaribas says

You have to buy while most people are still afraid.

I'll buy when house ownership goes below 50% nationwide.

robertoaribas says

why would you give a crap about that rate?

So how would you define, "while most people are still afraid?"

FunTime says

robertoaribas says

why would you give a crap about that rate?

So how would you define, "while most people are still afraid?"

Roberto probably has an even better answer to this ... but ...

When the media in general is more positive about consumer confidence, the housing market, the economy, and you can see sales volume and prices rising in the housing market.

Essentially, right now is the change point. Or, if you want to get picky, those indicators lag by about a month so it's already well upon us.

Rew says

When the media in general is more positive about consumer confidence, the housing market, the economy, and you can see sales volume and prices rising in the housing market.

You mean like in 2007/2008?

Rew says

When the media in general is more positive about consumer confidence, the housing market, the economy, and you can see sales volume and prices rising in the housing market.

It's the opposite of that, but maybe I don't understand what you wrote. If you're using the media as a meter of when to buy, you buy a few months after the media headlines are, "Housing plummeting, zombie apocalypse imminent! Sell, sell, sell!"

robertoaribas says

lots less to worry about today :-)

Yeah, I'd say you moved at a relatively better time! Better than today, for sure!

SFace says

The ownership rate is like 30% in SF. That rate will reflect off the chart high barrier to entry price.

I didn't realize it was that low. I suppose that has it's own problems being 20% below 50% when considering "most" but I get your point. San Francisco will probably just remain ridiculous for me unless some unforeseen windfall occurs.

This puts SF ownership rate at 37%

http://quickfacts.census.gov/qfd/states/06/06075.html

My suggestion was that if more than 50% of people thought it was such a bad deal to buy that they bailed out or stayed out, it would literally represent a "most people afraid to buy" scenario.

I'm not saying that would ever happen. If it did, as SFAce suggested, it might mean the opposite which is that people aren't afraid of buying they're just incapable because prices went balistic.

robertoaribas says

I'm not sure I'd use percent ownership as my indicator

Yeah, I'm ont sure either.

The most fundamental indicator is price/income. The way around that is debt and debt has significant limits for 95% of the population. Unless someone already has a high net worth a multiple of the price of a house, buying a house in a place like San Francisco where prices are a multiple of income necessarily puts an upper bound on net worth. Especially when that multiple is similar to the number of decades one can reasonably be expected to live.