patrick.net

@WillyWanker I think a lot depends on interest rates.

Patrick says

@WillyWanker I think a lot depends on interest rates.

It will be interesting to see if they raise rates. But, many other forces are at play. I'm now watching on the sidelines, as I am now living between homes in Spain and Andorra.

I think it depends a lot in interest rates AND the eviction / foreclosure moratoriums. Once all the deadbeats get thrown out of their apartments, the people who are thinking about selling their house while they still have equity in it are going to sell.

zzyzzx says

I think it depends a lot in interest rates AND the eviction / foreclosure moratoriums.

Also lack of development over the last decade, although I understand new home builders are going crazy lately.

Zillow says double digit growth in 2022

Buy now or be priced out forever

… and as long as interest rates are at 3-4%, no we aren’t heading to any declining home prices and certainly no crash.

Stock market took a turn recently, 40yr inflation high, coming out of a global pandemic… how much do you think the Fed will raise those rates… probably not much. They know damn well they will need to be careful with this.

Secondarily, stonks. Wealth effect, yadda, yadda.

I think inflation is countering crash for the time being.

WillyWanker says

I have friends who have just put their homes on the market. And others, who should know better, who are awaiting real estate lotto to be 'able to purchase' homes in communities in Arizona and Florida. I don't think I've heard people speak about waiting in line to buy up a tract house in a gated community since 2006. What gives?

Obviously location is a huge factor. Here in IL people have been leaving the state. Builders here for the most part aren't building subdivisions. Even with the migration out there are more people able to purchase as Millennials start families. If there's going to be a crash somewhere it's going to be because of demographics and inventory. And the Millennials that don't/can't buy will continue to live at Mom and Dad's.

The last crash was because of shit lending standards. I got a $315k loan at 22 for a 2 flat in Chicago. That's not happening now as far as I can tell. I could handle that now easily financially, but if I had the same income as back then no way in hell would I get that loan.

There are a few areas I'd worry about though with stagnating prices or some declines. Denver, CO is one. Sorry PorkChop, but Nashville, TN is of concern. Idaho (not sure of specific towns/cities). Bozeman, MT area is retarded right now. The "rural" town/cities with a lot of blue state transplants have prices that are not sustainable. They have vast amounts of land around them and at some point the people will stop coming and they'll over build.

As Patrick points out, you're buying a payment basically. Fed will throttle that with interest rates, but it's more controlled and I don't think would result in a crash. I'm not a bull on housing though. Markets are hitting a ceiling in areas. Just doesn't mean there will be a crash like last time.

Inflation of goods will for sure cause a slow down as well unless incomes tick up. 2007/08 was a once in a lifetime event. Great Depression style. I could be wrong, but I don't see a 20% plus crash coming anywhere outside of hipster areas where they over built and there's massive amounts of land.

WillyWanker says

I remember this forum as it was one of my favorites in the aughts because I, along with most people who followed Patrick Killelea, believed the frothy real estate market was ready to burst.

I miss the good ol' days when all we had to complain about was over priced crap shacks.

FJB says

WillyWanker says

I remember this forum as it was one of my favorites in the aughts because I, along with most people who followed Patrick Killelea, believed the frothy real estate market was ready to burst.

I miss the good ol' days when all we had to complain about was over priced crap shacks.

I also enjoyed reading all the perma-bear content on here then and now. The regret runs deep I’m sure.

I hope so, I would love nothing more than to see every RE rental investor company or small time scumlord, lose their ass and everything they own. Gambling that they could squeeze $3,000 out of America's struggling families for rent on a shit shack on the other side of the tracks.

If I were King around here, I would tax every SF House a person owns over two homes. And I would tax every SF house a corporation owns as a Federal property tax, then I would use that money to undermine their empires to crash the SF housing market to make it affordable again.

Starting with 10 huge Urban sprawls built through out America that would boom so much work, those hot bed RE areas, would clear out, with no buyers, they calve in half if not quarters. This shit is not natural and is only happening due to America's policy to stop producing SF housing, for the sole purpose of benefiting the Scumlords and Flippers buying them all up.

Real estate isn’t going to crash for one simple reason: the major hedge funds are heavily invested in real estate and will buy more if it goes “on sale.”
It doesn’t matter if people can afford to buy houses or not. Blackrock and Vanguard can afford to buy shacks and they will, just to keep prices stable.

Shaman says

Real estate isn’t going to crash for one simple reason: the major hedge funds are heavily invested in real estate and will buy more if it goes “on sale.”
It doesn’t matter if people can afford to buy houses or not. Blackrock and Vanguard can afford to buy shacks and they will, just to keep prices stable.

Agreed. They own now roughly 1/3 of properties and are turning the US into a renter nation on their terms. Let's go brandon!

WillyWanker says

Patrick says

@WillyWanker I think a lot depends on interest rates.

It will be interesting to see if they raise rates. But, many other forces are at play. I'm now watching on the sidelines, as I am now living between homes in Spain and Andorra.

You're worried about affording a 3rd home?

What's the one universal we all knew in '06 that we know now? Nothing goes up forever.

RC2006 says

I think inflation is countering crash for the time being.

What does that mean?

See Weimer Germany. You can postpone an economic crash by printing, but the end result is a more severe crash. See also Rothbard's boom/bust cycle.

BayArea says

The regret runs deep I’m sure.

Lol, what? I retired 10 years early by renting.

WillyWanker says

I am now living between homes in Spain and Andorra.

That sounds interesting. How are prices and rents compared to here? Do you own or rent there?

Do you have Spanish or other EU citizenship?

Real estate will not crash, but it will slow down.

As mentioned above, REITs are buying up places, which may continue.

The free government money is slowing down finally.
The evictions and foreclosures will pick up, although slowly.

The inventory will increase, slowly.
Landlords who found out about the joys of having deadbeat renters will sell some properties.

Fiat real estate prices not offsetting the fiat Hummer losses in the main portfolio. Pretty soon, hookers and cocaine will become too expensive.

Maybe I should buy a Coeur d'Alene house or two remotely while the fiat money is still seen as currency.

FJB says

WillyWanker says

I remember this forum as it was one of my favorites in the aughts because I, along with most people who followed Patrick Killelea, believed the frothy real estate market was ready to burst.

I miss the good ol' days when all we had to complain about was over priced crap shacks.

Same here. Who would have thought the world would be in this shit-storm when we were told that #FJB was when the 'grown-ups' would be taking control of things. I talk to my family in California, liberals, most of them, and they blame inflation and gas prices on PUTIN! When gas gets to $8 a gallon will they ever wonder if they were wrong?

I wouldn't be buying any real estate in any of the over-heated markets.

I don't know. Most of the wealthy people I know think it's about to tank.

My brother in law who's made millions in real estate says to sell now and buy back in a couple years.

Who knows. The only thing supporting the insanity is the low rates and inflation.

My Future-ometer is my only clock that is never right, not even twice a day.

Between the real estate collapse, the loss of many Hummers from the portfolio, and the pending inflation with currency reset, it's probably time to take that Walmart greeter's vest out of mothballs.

This time it really is different. The great reset will make sure of that. I think the goal is to simply make it more and more difficult to purchase a home for most people. Remember, you'll own nothing and be happy.

Look at this joke of a website...http://housingbubble.blog/?p=5726&source=patrick.net

He's been predicting a crash forever. He won't even allow any kind of serious debate. I got banned simply because I said I was going to take the stance that he is wrong and has been wrong for a long time now. He banned me. What a joke.

I’m a real estate investor and flipper in the Bay Area. I live in the trenches. IMO, today’s real estate prices are ridiculous. I’m not smart enough to know when the housing market will drop/crash and how bad it would be. One thing I see is that paying today’s housing prices would make one an indentured servitude on the property taxes alone.