patrick.net

Heraclitusstudent says

They can start building smaller homes and apartments today. I don't believe they need years to make new plans.

Wouldn't you have the problem of a major over hang of 30 plus year of supply of bigger homes

Logan Mohtashami says

Wouldn't you have the problem of a major over hang of 30 plus year of supply of bigger homes

What are you saying? That people don't want big houses?
That current big houses are not occupied?

Heraclitusstudent says

That people don't want big houses?

No, people like big homes, big cars, big meals, it's the American way

Logan Mohtashami says

No, people like big homes, big cars, big meals, it's the American way

However if they can afford only smaller apartments, young people would buy that - or at least rent them - provided they are available.

Heraclitusstudent says

However if they can afford only smaller apartments, young people would buy that - or at least rent them - provided they are available.

The young are renting until they get married. Housing with dual incomes & assets is ok. Homeownership for young couples has held up well.

It's just with poor household formation growth, the young hasn't even started to rent like they have had in previous

1. Rent
2. Date
3. Mate
4. Marry

3.5 - 6 years after marriage is usually when young couples buy. We have a major delayed factor after the Great recession

Lenders should turn everyone down for wanting to pay more than 10% of listing price for shacks.

$400,000 x .10% = $40,000, We don't need no steenkin' loan.

Everyone has the right to overpay.
All aboard on the Overpay Bandwagon!

HEY YOU says

Lenders should turn everyone down for wanting to pay more than 10% of listing price for shacks.

If the appraisal comes in low then they won't keep the loan in its current form. The lender would require them to bring the 10% down to cover the higher purchase price.

So if a home is 10% over a listing price and their is no comp to support that then they won't go for it. I haven't had any deals do that this year but last year 2 of my transactions had that happen and the seller cut their price back down

Call it Crazy says

Try this:

http://patrick.net/?p=1251469

- Which goes to core thesis that we simply don't have enough qualified home buyers excluding cash buyers to call this a recovery.

Mutulfunds .com wanted me to shed some light on why Warren Buffet doesn't understand why Americans aren't buying homes with rates so low

When asked to give an opinion as to why Warren Buffet is terribly confused by the low housing demand when rates are so low; my answer: It’s not rocket science, it’s simply math.
My Q&A with Mutualfunds.com

http://mutualfunds.com/q-and-a-and-interviews/interview-with-logan-mohtashami/

Is this how you plan to speak to MutualFunds?
Have they been prepped to expect this impediment?

Logan Mohtashami says

If the Appraisal comes in low then they won't the loan stay in its current form.

SoftShell says

Logan Mohtashami says

If the Appraisal comes in low then they won't the loan stay in its current form.

If the appraisal comes in low, then they won't keep the loan in it's current form.

I slip now and then

Insights from Logan Mohtashami

Logan Mohtashami
In reading much of your recent commentary regarding housing data, you have continued to take quite a skeptical stance as far as Wall Street’s constructive vantage point.

My core thesis since 2010 has been simple. We simply won’t have enough qualified home buyers in America ( X out cash buyers) because we never had the financial good in the first place. Take demand from 1996-2007 with a grain of salt on two fronts:

We had 2 economic cycles that had a financial bubble factor to it, creating fake demand for fake good paying jobs. We don’t have that in this economic cycle.
Exotic loans are all gone. This is a a very good thing as it shows that Americans simply don’t make enough money to own the debt and total cost of a home.
For a clip of Logan commenting on the housing market, click here.

Mortgage purchases as a percent of the market sales has been 20% below historical trends for years now and rates have been 5% since early 2011.

Warren Buffett was quoted recently as being surprised at how slow the real estate recovery has been. Can you point to some of the most recent data that is evident of a housing market that continues to sputter and not quite give us the affirmation of a classic bull market?

In 2000, existing home sales were 5.2 million with 8% interest rates and we had 4 million less people working in the U.S. 2014 is the year that a lot of bulls said demand would grow because supply was coming back. It didn’t happen because we lack real demand from main street.

In 2014

We had rising inventory
We had lower rates
We have rising rents
Still demand is going to be negative year over year.

For additional information, check out Rising Inventory & Low Rates Hasn’t Created More Housing Demand.

Are there areas of the country that stand out from a loan application standpoint?

California is a housing inflation nightmare. My own data shows that 82% of the working population is priced out of the housing market based on Median Income to Median Prices, once you exclude the Rich which to me is 3 times median income, so roughly 180K.

You have cited multi-family housing as a lone bright spot. Do you see this trend continuing?

Demographics of America are bullish for multifamily because we will have a lot of young Americans, aged 20-35, working (hopefully) for 2 decades and they will be natural renters until they rent, date, marry and then buy.

Not sure if you have a market forecast for interest rates for 2015, but where do you see mortgage rates heading?

I don’t see rates going too much higher from here. We could be in a range of 4%-5% for 2015.