patrick.net

BoomAndBustCycle says

I just got approved for a $100k heloc... so the market still is working for the time being. That amount will last me 3-4 years of mortgage payments if I lose my job. I won’t lose my house. Another reason why buying a home 10 years ago was the smartest decision of my life.

Great time to buy, I think you nailed it.

Malcolm says

$100k heloc... so the market still is working for the time being. That amount will last me 3-4 years of mortgage payments

Borrowing money to make the mortgage sounds like a perpetual motion machine or Fed monetization of debt.

B.A.C.A.H. says

Malcolm says

$100k heloc... so the market still is working for the time being. That amount will last me 3-4 years of mortgage payments

Borrowing money to make the mortgage sounds like a perpetual motion machine or Fed monetization of debt.

If it comes down to it... you do what you can to survive. Makes more sense then trying to sell in a down market. Small businesses and individuals with assets or cash reserves need to think out of the box if they lose a job income in the short term. If you lost your job and sold your house in 2008 for a loss and cashed out your 401k to survive you screwed up royally. If you were able to think ahead and got a large credit line and lived off it until you got a new job and maintained those assets and 401k cash in stocks.... you made out very well. I’ve thankfully kept my job... but I’m preparing as if I lost it... or will lose it.

BoomAndBustCycle says

Patrick claiming this virus is a scam

Please quote.

Or retract your slander.

BoomAndBustCycle says

Can’t have it both ways. Patrick claiming this virus is a scam and nothing burger... then also claiming our economy can’t recover from 2-3 months of hitting the pause button... is just nonsensical. If the virus proves to be nothing... we will be on a v-shaped recovery by end of the summer. If it proves as the experts expect... then yeah, this will be bad.

Economy will recover, but it’ll take time. Patrick is correct here.

BoomAndBustCycle says

Malcolm says

$100k heloc... so the market still is working for the time being. That amount will last me 3-4 years of mortgage payments

That's not my quote BTW.

Patrick says

Please quote.

Or retract your slander.

I retract the “scam” part... but plenty of your posts have insinuated COVID-19 is a “nothingburger”.

You are forgetting that banks weren't selling to individuals like me or yourself.

I was talking about a time before the 2008 crash. No bundling or tranches yet.

BoomAndBustCycle says

COVID-19 is a “nothingburger”.

The actual death toll will be about that of the seasonal flu of 2018, which was barely reported on.

How many landlords do you know who have actually paid off their mortgages? They never do, they borrow against property to buy more property. This works until it doesn't.

I actually did pay off the mortgages on my rental properties, by putting all my extra cash into them, plus the proceeds of a sale from earlier rental property. I also question the bit about landlords "borrow against property." I found that banks refused to lend on rental property, especially any kind of "cash out" you would need to buy another. I got my first 2 properties by a FHA 203k (NEVER AGAIN) program and a VA distressed foreclosed sale. They were cheap, but I had to spend months of my time restoring them. To finance my materials, I had to get a personal loan, which only one bank was willing to do. I had just gotten out of the Air Force, and paid cash for the house I was living in, but did not have much cash left to put into fixing up the properties.

My Financial Wizard says his team thinks this will be more like a U-shaped recovery. Stay the course!

I have about 8% cash in my portfolio, with 11% in alternatives, mostly gold. Should I buy the dip, or am I too late?

rocketjoe79 says

My Financial Wizard says his team thinks this will be more like a U-shaped recovery. Stay the course!

I have about 8% cash in my portfolio, with 11% in alternatives, mostly gold. Should I buy the dip, or am I too late?

Today you still get 25-30 percent discount on anything.

Hotel and airlines bigger discount.

rocketjoe79 says

Should I buy the dip, or am I too late?

Check out the dips and surges in the US stock market indices between October 1929 and 1932.

https://www.dailymail.co.uk/news/article-8197747/Requests-delay-mortgage-payments-jump-nearly-2-000-coronavirus-outbreak.html

Requests to delay mortgage payments jump nearly 2,000% as borrowers seek immediate relief during the coronavirus outbreak

Data from Mortgage Bankers Association (MBA) shows that forbearance requests grew by 1,270 per cent between week of March 2 and week of March 16
That number jumped another 1,896 per cent between March 16 and March 30
Last month, President Donald Trump signed the CARES Act, which allows for a three to six month delay in mortgage payments
But at end of grace period, borrowers will be required to pay entire lump sum

Patrick says

But at end of grace period, borrowers will be required to pay entire lump sum

That is going to be devastating. Patrick, banks aren't going to sit back while prices fall, I picture NODs (Notices of default) being filed as early as they possibly can to preserve their rights.

BoomAndBustCycle says

If you lost your job and sold your house in 2008 for a loss and cashed out your 401k to survive you screwed up royally. If you were able to think ahead and got a large credit line and lived off it until you got a new job and maintained those assets and 401k cash in stocks.... you made out very well.

Hindsight is what? 20/20?

Patrick says

But at end of grace period, borrowers will be required to pay entire lump sum

So, the foreclosures will start en masse when? 6 - 9 months from now?

WineHorror1 says

Hindsight is what? 20/20?

that's punny

I look at the stock market today and gotta say I'm surprised to see we ended the day at a level that puts us down only about 18% from our peak a couple months ago, before we crashed. And, were currently about where we were 1 yr ago.

Granted, if you did a s&p 1 yr trend line and compared our current level with where we likely would have been if we followed the trend instead of crashing, then we are down a good clip.

But, damn, being down only 18% just feels at odds with the atmosphere. I guess big money must feel that the stimulus is sized appropriately in relation to how this event is panning out.

I don't trust words that come out of very many of the talking heads. But I do trust rich billionaire fucks not to lose their fortunes, and right now they seem bullish. But maybe this is just volatility manifesting itself in a spike.

If you be liquid, you may be able to pick up some cheap homes. Asset stripping, Chinese Communist style, comrades.

Hircus says

I look at the stock market today and gotta say I'm surprised to see we ended the day at a level that puts us down only about 18% from our peak a couple months ago, before we crashed. And, were currently about where we were 1 yr ago.

Granted, if you did a s&p 1 yr trend line and compared our current level with where we likely would have been if we followed the trend instead of crashing, then we are down a good clip.

But, damn, being down only 18% just feels at odds with the atmosphere. I guess big money must feel that the stimulus is sized appropriately in relation to how this event is panning out.

I don't trust words that come out of very many of the talking heads. But I do trust rich billionaire fucks not to lose their fortunes, and right now they seem bullish. But maybe this is just volatility manifesting itself in a spike.

There will be continued optimism as most bigger companies can easily take a hit for one quarter. Until earnings I don't see another crash. And if earnings come in at or above estimates we may reach previous levels sooner than later again, but I doubt there will be any meaningful growth beyond that. Next we need to rehire many who lost their jobs without their fault. It's doable if they don't fuck this up with further lockdowns.

Whats going on with the housing market? I thought for sure we would see signs of it cracking by now but still don't see any price declines. I think it needs to correct and thought for sure this virus would be the last straw.

.

https://www.wsj.com/articles/why-home-prices-are-rising-during-the-pandemic-11588671002

Why Home Prices Are Rising During the Pandemic
While buyer demand has softened and sales fell 8.5% in March, the supply of homes on the market is contracting even faster

By Nicole Friedman, Wall Street Journal
Updated May 5, 2020 11:41 am ET

The economy is shrinking, businesses are closing and jobs are disappearing due to the coronavirus pandemic. But in the housing market, prices keep chugging higher.

Home prices plunged during the last recession after a housing crash caused millions of families to lose their homes. Home values could start to erode again, especially when mortgage forbearances end, some economists warn.

But that hasn’t been the case so far. The median home price rose 8% year-over-year to $280,600 in March, according to the National Association of Realtors. While buyer demand has softened and sales fell 8.5% that month from the prior month, the supply of homes on the market is contracting even faster, recent preliminary data shows.

“Demand absolutely just got a kick in the gut, but at the same exact time, so did supply,” said Skylar Olsen, senior principal economist at Zillow Group Inc.

Homes typically go under contract a month or two before the contract closes, so the March NAR data largely reflects purchase decisions made in February or January.

Even by the end of last month, many sellers were reluctant to cut prices. Only about 4% of sellers cut their prices in the week ended April 25, down from 5.7% during the same week last year, according to Realtor.com. ( News Corp, parent of The Wall Street Journal, operates Realtor.com.)

I don’t see it yet.

Hircus says

Granted, if you did a s&p 1 yr trend line and compared our current level with where we likely would have been if we followed the trend instead of crashing, then we are down a good clip.

Good point. You could start a preliminary examination with the P/E ratio. https://www.longtermtrends.net/price-earnings-ratio/

The S&P 500 needs to go down about 20% from current level to return to fair value. However that is calibrated based on the past (i.e., pre-2008) when the Federal Reserve was not as proactive in monetary policies. So perhaps there is a "new average" or "new normal" as far as fair valuation (i.e., P/E ratio range between 15 and 20, instead of 10 to 15).

RC2006 says

Whats going on with the housing market? I thought for sure we would see signs of it cracking by now but still don't see any price declines. I think it needs to correct and thought for sure this virus would be the last straw.

In the Bay Area but here are my observations from people I know:

1) White collar professionals - Working from home continuing to collect paychecks
2) Blue collar trades - Many kept working, some furloughed but will return to work this week
3) Service workers - Furloughed/laid off. Restaurant workers, retail, etc

Who buys homes in the Bay Area? See #1 above. This is one reason why homes have not really budged in price through the shelter in place. Also, I assume the data represents those homes that went under contract just before the shelter in place. It will be interesting to see the data for May and the next couple months though. I know there have been tech layoffs but my company (civil engineering) is continuing to hire during the shelter in place. We are just as busy as before China's covidcrap got dumped on us.

Patrick says

They forgot to shut down democracy completely, though they do pretty completely control the press

I think I understand the Trump Cult fantasy you're promoting here.

I see it more as sort of a good cop bad cop that the oligarchs play. First they'll have a guy in there that half the country doesn't like for one reason or the other, and he (or she) will do the oligarchs bidding while also appealing to their subgroups including some combination of these: the fantasy Q types, the anti globalists, or racists, or libertarians, neocons, or woke on the left, true liberals, whatever, everyone get's a turn, and then you know, flip it around, so next time your group or my gets it's turn, and we can say, "phew democracy still barely works, there's hope."

But meanwhile the government is broken and highly dysfunctional. They have lost the ability to solve problems. You can only be sure the oligarchs are taken care.

marcus says

But meanwhile the government is broken and highly dysfunctional

Yes. Including at the state and local levels. Federal bailout money for state and local government, why should it if the governments don't help themselves? The pensions and retirement medical are not government operations. If government stopped with those expenses, it'd free up cash for operations. Bond debt too. (yikes! you mean those same pension funds are some of the biggest investors in those bonds?)

Anectdotal: My Redfin feed is showing more than normal back on the market and price reduction listings. Especially Oregon, California, although MD-DC area not so. Wonder why, heh, heh.

rigidmember says

In the Bay Area but here are my observations from people I know:

1) White collar professionals - Working from home continuing to collect paychecks
2) Blue collar trades - Many kept working, some furloughed but will return to work this week
3) Service workers - Furloughed/laid off. Restaurant workers, retail, etc

Excellent points.

The same as far as Florida panhandle as the ones who buy homes are not your hourly wage restaurant, retail, and movie theater workers. A vast majority of them are renters.

The blue collar popular trades in the Florida panhandle like auto mechanic and air condition tech are working albeit to a lower pace or revenue pace because of the shutdown. Eastern Shipyard is humming along. Berg Pipe manufacturing is humming along. The Port of Panama City Florida is humming along.

A lot of my white collar friends who own law firms and accounting firms are business as usual now, and have just changed how they work, by working at home mostly.

The Navy Base in Panama City such as its Surface Warfare Center have most of its engineers, contract administrators, etc. working from home and collaborating via the internet and cell phone.

willywonka says

Anectdotal: My Redfin feed is showing more than normal back on the market and price reduction listings. Especially Oregon, California, although MD-DC area not so. Wonder why, heh, heh.

DR Horton just lowered the price of their Hathaway Townhomes (3 bed/2.5 bath/1 car garage) in Panama City Beach from $220,000 to $204,000.

And they just converted the same style townhomes in next-door Lynn Haven, Florida development to rentals, asking $1800 per month lease.

I see it more as sort of a good cop bad cop that the oligarchs play.

Who are these "oligarchs?" Buffet, Gates, Soros, Slim, Bloomberg, Cook?

if it was on the same shelf as the toilet paper....game set match...

rocketjoe79 says

Should I buy the dip, or am I too late?

Y says

Should I buy the dip, or am I too late?

You could be the home builder ETF by symbol "ITB". It is around $37. Its all time high was in February 2020 at $50.

BoomAndBustCycle says

I just got approved for a $100k heloc... so the market still is working for the time being. That amount will last me 3-4 years of mortgage payments if I lose my job. I won’t lose my house. Another reason why buying a home 10 years ago was the smartest decision of my life.

I bought 11 years ago right after financial crash for $1M (SF Bay area). Five years back, I bought out my now ex-wife's share of the house in part by taking out a 600K loan. Since then I have been aggressively paying down mortgage. A couple of weeks back, I cashed in some stock options that vested after corona virus stock crash and paid off the entire mortgage (I would have got much more money if coronavirus would have hit a month later).

Now I am proud owner of a fully paid off $2M house in the middle of silicon valley. The downside is that I am low on cash since all the cash went to ex-wife to buy out the house and then for last five years I have been using every single piece of cash that I could get a hold off to aggressively pay off the mortgage. I have an emergency fund of 50K that should see me through one year if I were to loose my job.

Now I am proud owner of a fully paid off $2M house in the middle of silicon valley.

Tip of the hat to you. If you decide to sell and move, you will find that being a cash buyer will allow you to but the next house cheaper than if you needed mortgage, especially if you have one built. You won't have any contingencies, and would not be bothered with points or origination fees that a mortgagee will ask the seller to pay.

alpo says

Now I am proud owner of a fully paid off $2M house in the middle of silicon valley.

Sell it for $2 million and then move to Arizona, Las Vegas, or New Mexico and buy a nice home for $300,000.

The rest of the approximately $1.7 million can go into a conservative mutual fund like Vanguard Target Retirement Income fund (VTINX).

alpo says

I bought 11 years ago right after financial crash for $1M

What's your annual property tax bill?

Bay County, Florida (i.e. Florida panhandle) housing market latest news: https://www.waltonsun.com/news/20200505/bay-county-housing-market-showing-signs-of-rebound-from-covid-19

PANAMA CITY BEACH — Experts are confident the local housing market will soon bounce back from the COVID-19 pandemic.

According to information provided by Debbie Ashbrook, CEO of Central Panhandle Association of Realtors, home sales have steadily declined over the last couple of months. As of Sunday, purchases had dropped by more than 50% compared to 2019.

However, active listings were up by nearly 20%, with 3% more listings also under contract.

ad says

Sell it for $2 million and then move to Arizona, Las Vegas, or New Mexico and buy a nice home for $300,000.

The rest of the approximately $1.7 million can go into a conservative mutual fund like Vanguard Target Retirement Income fund (VTINX).

Unfortunately I am stuck in the rat race here in bay area due to job and child custody issues. But yeah, if my ex-spouse continues to party as much as she does and get's infected with corona virus, then I might just move to Chicago area with the kid.

B.A.C.A.H. says

What's your annual property tax bill?

Somewhere between 12K and 13K.