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1   APOCALYPSEFUCKisShostikovitch   ignore (30)   2018 May 31, 5:00pm   ↑ like (0)   ↓ dislike (0)   quote        

Larry and Serge will charge their programmers 3x their wages to sleep in their cars in the company parking lots and randomly pick on to cook on holidays.
2   Strategist   ignore (1)   2018 May 31, 5:31pm   ↑ like (0)   ↓ dislike (0)   quote        

From the article:

"“The housing crisis is going to get worse and worse and worse and worse,” Christopher Thornberg, founding partner with Beacon Economics, said during a presentation at the event. California needs construction of roughly 210,000 to 250,000 residential units a year but is building more like 110,000 annually, he estimated."

We know we know. When demand continues to outstrip supply year after year, the difference gets added to an expanding shortage. Price increases will continue to accelerate, setting off a panic at some point in the future, which will be the start of a bubble. Home prices in parts of California can easily jump by 50% from today's levels before the bubble even starts to form.
Folks, home prices in NY, Miami, Seattle, and California are not dependent on incomes, but assets that people have (foreigners included) With rising real estate prices, and a record high stock market, the net worth of Americans has been exploding.
3   Heraclitusstudent   ignore (1)   2018 May 31, 5:42pm   ↑ like (0)   ↓ dislike (0)   quote        

Why would a bubble start forming from such high level?
Most likely more people will leave, the economy will take a hit and the political chorus of YIMBY will become higher pitched.
4   Heraclitusstudent   ignore (1)   2018 May 31, 5:45pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
the net worth of Americans has been exploding

If we were to build enough, net worth would fall, reflecting how arbitrary this notion of "net worth" really is.
People couldn't convert their "net-worth" to cold cash.
5   mell   ignore (1)   2018 May 31, 6:18pm   ↑ like (0)   ↓ dislike (0)   quote        

I'm pretty certain a stall or even downturn in prices is imminent (as in 2019), but likely no crash since supply will be tighter here in CA for a while. Hear a lot of chatter from bankers and realtors advising their client to sell before 2019, 1 year forecasts on Zillow are very muted (+2%) and 30 day values have corrected down lately. Also keep watching interest rates.
6   mell   ignore (1)   2018 May 31, 6:29pm   ↑ like (0)   ↓ dislike (0)   quote        

Also developers didn't build much more in 2007 either yet the whole market crashed, this metric is somewhat flawed. Outflows and layoffs will influence that much, so will increased shared housing. I'm not bearish yet but not a bull anymore on housing. They can take in as many illegals as they wish but they won't be able to pay for a house not even rent unless they live by the 10s in one place. It' currently that high because there are enough people that can afford it and don't mind overpaying and overbidding, once that number drops below a critical level things will change, tight inventory or not. But probably no dramatic shifts before 2019.
7   Strategist   ignore (1)   2018 May 31, 7:24pm   ↑ like (0)   ↓ dislike (0)   quote        

Heraclitusstudent says
Why would a bubble start forming from such high level?
Most likely more people will leave, the economy will take a hit and the political chorus of YIMBY will become higher pitched.


We still have a growing shortage of homes. As time passes we end up with a ratchet effect, where prices cannot fall below a certain level in the absence of a catastrophe. Coastal California home prices have easily increased ~6% year after year in the past. Price appreciation today is not way off from the historical norms. BA seems to be higher than the rest of California. In the last bubble Ca home prices had increased 30% + in a 12 month period, a clear sign of a bubble.
You will notice real estate bubbles follow the shape of the "S Curve" We are still snaking along in the bottom. I'm confident a real estate bubble will come, and it may even start after a 25% price increase. For now there are no signs of an emerging bubble, just some noise here and there. Just wait until the bartenders and taxi drivers advise you to buy, and mortgage lending becomes easier to get.
8   Strategist   ignore (1)   2018 May 31, 7:34pm   ↑ like (0)   ↓ dislike (0)   quote        

Heraclitusstudent says
Strategist says
the net worth of Americans has been exploding

If we were to build enough, net worth would fall, reflecting how arbitrary this notion of "net worth" really is.
People couldn't convert their "net-worth" to cold cash.


Most likely the net worth would just stabilize. Just catching up to the spiking shortage of homes will easily take years, and we haven't even caught up to building the normal 1.5 million units per year as yet. California is facing an even greater shortage than the national rates.
If you want to capitalize on the California housing shortage, speculate with the Case Schiller Index for leverage, or buy land. Land prices outperform home prices several fold in a bubble.
9   Strategist   ignore (1)   2018 May 31, 7:42pm   ↑ like (0)   ↓ dislike (0)   quote        

mell says
Hear a lot of chatter from bankers and realtors advising their client to sell before 2019


Realtors have a zero capacity to forecast home prices. They are excellent salespeople, and nothing else. They advise clients to sell just to get the listings, which is the easiest way for realtors to make big commissions in a sellers market.
10   mell   ignore (1)   2018 May 31, 8:08pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
mell says
Hear a lot of chatter from bankers and realtors advising their client to sell before 2019


Realtors have a zero capacity to forecast home prices. They are excellent salespeople, and nothing else. They advise clients to sell just to get the listings, which is the easiest way for realtors to make big commissions in a sellers market.


True but those are acquaintances and friends. Rates have started creeping towards 5. And due to leverage this quite affects affordability. If they can keep em under 5 it may be ok in this booming economy.
11   Strategist   ignore (1)   2018 May 31, 8:28pm   ↑ like (2)   ↓ dislike (0)   quote        

mell says
Realtors have a zero capacity to forecast home prices. They are excellent salespeople, and nothing else. They advise clients to sell just to get the listings, which is the easiest way for realtors to make big commissions in a sellers market.


True but those are acquaintances and friends. Rates have started creeping towards 5. And due to leverage this quite affects affordability. If they can keep em under 5 it may be ok in this booming economy.


The real estate business is one of the easiest to get in, potential to make lots of money, and one of the most corrupt.
In 2011 I decided to start buying properties. I got myself a RE license, thinking I would save a ton of money. Offer after offer, I could not even get a fucking counter. I finally wised up, threw away that fucking license, and embarked on a completely different strategy in March 2012.
1. Contacted listing agents who were taking back up offers on sold properties in Southern OC. Told them I have no agent, offered cash, and accepted full price. All verbal. Made 15 verbal offers, and ended up with 5 acceptances on condos. I closed on 4. Next year I did the same with vacant land in the mountain resorts and Hawaii. Also did the same when I helped my daughter buy her first condo 3 years ago.
Realtors, most, not all, are sleazebags, most of whom belong in jail.
It's all about money.
12   anotheraccount   ignore (1)   2018 May 31, 9:06pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
Folks, home prices in NY, Miami, Seattle, and California are not dependent on incomes, but assets that people have (foreigners included) With rising real estate prices, and a record high stock market,
Wow it's seems like you just discovered correlation between all asset prices being in a bubble. If the Fed does not chicken out and keeps raising rates, asset prices will come down eventually.
13   curious2   ignore (1)   2018 May 31, 10:03pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says
Contacted listing agents who were taking back up offers on sold properties


If I may ask, how did you find them?

Strategist says
accepted full price.


By "full price," do you mean advertised asking price, or contract sale price? If the latter, how did you find that information?
14   Strategist   ignore (1)   2018 May 31, 11:35pm   ↑ like (1)   ↓ dislike (0)   quote        

curious2 says
Strategist says
Contacted listing agents who were taking back up offers on sold properties

Redfin and Zillow both show the who the listing agent is. I would double check if there was a doubt by typing in the address on google. Redfin allows you to search by properties in escrow. Many properties fall out of escrow. When a listing agent sees a cash buyer willing to go through them, they have an incentive not to grant extensions to the existing buyers or tolerate defaults. Damn thing worked like magic.

curious2 says
Strategist says
accepted full price.


By "full price," do you mean advertised asking price, or contract sale price? If the latter, how did you find that information?

Yes, I mean full asking price. Almost everything was a short sale at the time. On 2 properties I actually ended up with a lower than asking price, because the short sale prices were already approved by the banks in question. The listing agents could not be bothered to get a better price. On my daughters property the price, which was also a short sale, was so below actual market that I actually bribed the seller with $3,000 in cash at close of escrow. Called it moving expense. I literally waived hundred dollar bills before the listing agent just before signing the offer. he he he. It's shocking what the sight of hundred dollar bills can do.




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