patrick.net

GNL says

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

I don't think we'll get hyperinflation like back then. Look at how inflation peaked recently around 9.2% this June. It has trended downward to 8.2% this September.

Banks will charge more interest for loans ranging from mortgages to car loans to home equity loans when inflation increases.

They have to in order to make enough money from the loans as far as the spread or difference between inflation and the interest rate, or more so between the Fed Funds rate and the interest rate of the loan.

Its just that since 1981 to present day, inflation has trended down. We are in a new environment not seen since the early 1980's.

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https://www.reddit.com/r/REBubble/comments/yfcyt0/realtorcom_app_removed_historical_housing_prices/

Realtor.com App Removed Historical Housing Prices

It seems Zillow is hiding information as well.

It's just like when one of them started hiding crime stats.

ad says

GNL says

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

I don't think we'll get hyperinflation like back then. Look at how inflation peaked recently around 9.2% this June. It has trended downward to 8.2% this September.

Banks will charge more interest for loans ranging from mortgages to car loans to home equity loans when inflation increases.

They have to in order to make enough money from the loans as far as the spread or difference between inflation and the interest rate, or more so between the Fed Funds rate and the interest rate of the loan.

Its just that since 1981 to present day, inflation has trended down. We are in a new environment not seen since the early 1980's.

OMG man...
1. inflation has been outpacing loan interest rates for how long now? They lose money on every loan and have been.
2. we didn't have hyper inflation back then.
3. it's different this time? Where have I heard that before?
4. I make no predictions myself.

GNL says

1. inflation has been outpacing loan interest rates for how long now? They lose money on every loan and have been.

Back in August 2013 the 30 year rate mortgage for our new home was 3%. Inflation was no more than 2% back then. That was the lowest level the 30 year rate reached since 1981.

So when the mortgage got issued in August 2013, the rate was higher than inflation. I am referring to the rate being higher than inflation the date when the loan is issued.

We had 16% inflation back in 1981. But I understand that may not be considered hyperinflation compared to other periods of time and in other countries like Germany 1920's.

I just hope that corporations, industry and workforce can roll up their sleeves and get enough motivation and realize enough innovation to increase productivity in order to drive down the costs per units for goods and services.
.

cisTits says

ad says

I don't think we'll get hyperinflation like back then.

????

America has never had Hyperinflation.

Hyperinflations persist in countries such Turky and Argentina around 80%. That is hyperinflation, uhhhh.

1) This: "(Bloomberg) -- A heap of distressed debt is expanding in the US corporate bond market and investors worry that a burst of defaults will follow."

https://finance.yahoo.com/news/growing-pile-distressed-debt-signals-110000432.html

Companies like tech companies in Silicon Valley that are will need to refinance existing debt are going to have to cut costs, which means layoffs.

2) and this: Home sales fall 10%

https://www.cnbc.com/2022/10/28/pending-home-sales-fell-10percent-in-september-from-august.html

REpro says

Hyperinflations persist in countries such Turky and Argentina around 80%. That is hyperinflation, uhhhh.

Yes, in the past I was thinking Germany 1920's and in the present I was thinking Venezuela

cisTits says

America has never had Hyperinflation.

https://mises.org/library/inflation-and-american-revolution

I'm pretty sure that the CSA had hyperinflation as well.

A few things that the blogsters are saying will contribute to declining RE prices:

1. Oldsters seeing their cash cow nest egg continue to leak value decide to get while the getting is good and sell, taking the equity and buying a smaller retirement home somewhere, or checking into the Thanatos assisted living facility.

2. Worker bees who were just getting by being able to make their mortgage payment, car payments, Netflix and other streaming services payments, etc., are now unable to pay their bills as inflation is eroding how far their income can go and so they sell or default.

3. Rising debt payments cause companies to cut costs elsewhere and elsewhere includes labor. Layoffs accelerate with rising interest rates.

4. Airbnbust titans of industry are seeing a drop in rental income as inflation eats away at disposable income, and as layoffs take their toll. They jettison money losing properties as they, too, are unable to make the mortgage payments.

A bit off topic, but the show Animal Kingdom describes how crime families can launder ill-gotten gains through rental properties. They buy the properties and then rent to fictitious people, and their crime cash is laundered through the properties as rent. Wonder if this is actually going on.

ad says

GNL says

1. inflation has been outpacing loan interest rates for how long now? They lose money on every loan and have been.

Back in August 2013 the 30 year rate mortgage for our new home was 3%. Inflation was no more than 2% back then. That was the lowest level the 30 year rate reached since 1981.

So when the mortgage got issued in August 2013, the rate was higher than inflation. I am referring to the rate being higher than inflation the date when the loan is issued.

We had 16% inflation back in 1981. But I understand that may not be considered hyperinflation compared to other periods of time and in other countries like Germany 1920's.

I just hope that corporations, industry and workforce can roll up their sleeves and get enough motivation and realize enough innovation to increase productivity in order to drive down the costs per units for goods and...

We need defaults. We've been papering over our problems for decades. Let the defaults begin.

GNL says

We need defaults. We've been papering over our problems for decades. Let the defaults begin.

I think of corporations that have to refinance debt and how they will fare if the Fed Funds rate continues to stay high. Some may go bankrupt or default.

I suspect most will just cut costs which means layoffs, which means some of those laid off will default on bill payments like mortgage and credit card. Of course, this is if the economy is in bad shape.

Prices in our rural area(s) have started climbing again, almost back to highs. Now these are estimates by these online RE firms, and they don't necessarily know about other factors such as rising dues etc., but I don't see a crash anywhere on the horizon thus far.

Santa Cruz for sale is getting gradually more crowded. Capitola, which could go for months with just one or two listings, has many now.

Of course, there will be the musical chair period where people cling to their fiat equities. However, those who need to sell or are bailing out on investments will start dropping prices. Shaded reds are just listings that I had clicked on.

https://www.thegatewaypundit.com/2022/10/biden-economy-home-values-across-country-dropping-rapidly-especially-west-coast/

"BIDEN ECONOMY: Home Values Across the Country Dropping Rapidly – Especially on the West Coast

Ceffer says

"BIDEN ECONOMY: Home Values Across the Country Dropping Rapidly – Especially on the West Coast

.

It peaked at 320 in June 2022. It was 220 in April 2020. It increased from 220 to 320 or about 45%. It needs to decrease about 31% to get to 2020 levels based on the Federal Reserve wanting asset prices like home and stocks returning to 2020 levels.



.

House around the corner listed a couple of months ago, initially dropped price by 180k, seemed it sold at a still pretty high price. Sale musta fallen through, back on market yesterday with another 85K price trim.

https://www.reddit.com/r/RealEstate/comments/yh3t9v/does_taxes_go_up_every_year/

Does taxes go up every year?

https://www.reddit.com/r/RealEstate/comments/yhe664/builder_has_homes_listed_40k_less_than_our/

Builder has homes listed $40k less than our contracted sales price.

Yep. Builders slashing prices on accumulating unsold inventory is going to establish new, lower comps.

zzyzzx says

Builder has homes listed $40k less than our contracted sales price.

No doubt this is happening as builders cancel builds that are less than a month away from being move in ready and drop prices on everything that can be sold. They are preparing for an economic winter. The good news is that new inventory is only a fraction (maybe 10%) of existing home sales and of that percentage only a small part (less than 1/3) are at a point in the pipeline that they could be finished. So the overall effect of new home inventory on the total real estate market is minimal.

@ad is the only one here posting relevant facts and I agree with his musings. There hasn't been, and will not be, a national "housing crash" until there is a mass of forced sales. People here are posting good reasons why this can occur (job recession would be my leading guess) but AT THIS TIME the country does not have an excess of bad debt in the mortgage market like in 2006 - 2008 and we do not have a significant number of mortgage holders that are a paycheck away from default.

Housing Crash?!? We can't hope it into existence, and why would we? Most peoples biggest chunk of net worth is tied up in their home. Hoping for a crash is a zero sum mentality.

Are prices falling? In most places they are, but they are still above where they were 24 months ago.

https://www.reddit.com/r/RealEstate/comments/yhn7ff/earnest_money_deposited_seller_lowered_price_by/

Earnest money deposited, seller lowered price by 100K on NEW home.

About a month back, we bought a house for about 800K, and we sent the earnest money (17.5K) along. Yesterday when we looked at the prices, we saw that the same house was now selling for 700K. Same model, same plan, same elevation. I already sent the initial deposit, is there any way I can lower my house price? There is already so much high interest rate. Is there anything I can do? I don’t want to be over paying.

People above talking about tax increases and new buyers signing up for a high tax bill made me think about my area of Sunnyvale. The original owners are dying off and the change in tax, thanks to suppressed tax from Prop 13, can be pretty funny...

2022 tax bills aren't yet listed on Zillow, so you can't see the assessments based on totally bubblicious purchase prices, but here's one that sold for a mere $2.3 MM 18 months ago. If it had sold just 8 months ago you could figure another 30% higher tax.



(Not trying to call the new owner out, but in case people are wondering, this is 558 Croyden Ct, Sunnyvale, CA 94087.)

https://finance.yahoo.com/news/mortgages-down-55-us-lenders-100000026.html

With new mortgages down 55%, US lenders are starting to go bankrupt — could this one factor trigger the worst surge of failures since 2008?

https://www.reddit.com/r/RealEstate/comments/yiu9pn/how_soon_to_reduce_listing_price/

How soon to reduce listing price?

Condo in Boston has been listed for 2 weeks. We’ve had zero interest so far. Not a single person at the open house, no inquiries to our realtor. We are priced competitively but it’s a nicer building and probably on the high end for our area.

Realtor wants us to drop the price which we are fine with but I think dropping the price this quickly reeks of desperation. Should we wait another two weeks?

https://finance.yahoo.com/news/home-prices-falling-faster-now-194540822.html

Home prices are falling faster now than in 2006

zzyzzx says

https://finance.yahoo.com/news/home-prices-falling-faster-now-194540822.html

Home prices are falling faster now than in 2006

In cities yes. And large suburbs. No one wants to live in a lawless shitholes. I trick or treated with the kids last night. Small town. People driving around in golf carts and UTV's. Beers given out at houses. Shots. Nobody misbehaved. Cops knew all the parents were drinking. We all just had a good time and everyone went to work this morning.

You can't do that shit in populated areas. People are fleeing them because of the crime and bull shit. It comes with small towns too, but you have much more control. Housing prices in my town are solid and still increasing. I wouldn't want to own in a major metro areas across the country. Wealth speaks. When you have multiple millionaire/famous people fleeing LA, it's time to start reconsidering where you live.

Detroit was just the opener to what is coming. It just takes time. People are going to move to rural/suburban areas and drag down the median because prices are lower and they have to sell their city condo for lower. Overall it's a good thing in my opinion. I can make 20-30/hr in the middle of nowhere with an internet connection. At 1/5th the cost of living in a city. And less taxes. It won't be a housing crash, it will be a housing shift.

Also remember that banks made their money already on amortization. There's a tiny fraction of the market that has bought into these high interest rates. It would be damn near impossible for a 4-5 year preforming loan to be upside down anytime soon. It would have to be exponentially worse than the 2006 crash. Possible, sure. Likely, no.

Pidgin paradises for a few corrupt warlords. Just the way the KommieKunts like it.

zzyzzx says

https://www.reddit.com/r/realtors/comments/xvqpgu/what_do_you_guys_think_of_the_highlighted/

What do you guys think of the highlighted verbiage concerning the commission adjustment if the offer is less than asking? I don't remember ever seeing this condition in my area. It certainly wouldn't stop me from showing the property, but I'm curious as to how common it is in other areas.

not a thing here. out here sellers so desperate to sell they don't have a lot of asks. its usually where buyer agent gets higher commission here than seller just to get the buyers to show up.

I don't know how housing market is in that area where that listing is. Bu out here, they'd damn the listing to sit there forever since no buyer agent will have incentive to show it.

Patrick says

That's about right if I were to make a list off the top of my head. It will only get worse as well.

I think places like Boise, ID; Austin, TX; and Nashville, TN are coming up on the list soon. Basically the roadmap for Denver # hipster. That was the closest we've been to moving out of state to Denver, glad we didn't.

We have so much fucking land that I don't think a lot of people realize. We don't need much land for food production hence why a shit ton of corn goes into ethanal. We can work from home for a large percentage of the population. I'd be running from cities regardless if I own or rent. My prices are doing well. No complaints. I'm not going to have a $5M penthouse condo where I live, but my $280k house keeps going up. Less to lose really and better community.

FortWayneAsNancyPelosiHaircut says

Bu out here, they'd damn the listing to sit there forever since no buyer agent will have incentive to show it.

Don't Realtors have some kind of duty to show the house if it meets their buyer's parameters?

GNL says

FortWayneAsNancyPelosiHaircut says

Bu out here, they'd damn the listing to sit there forever since no buyer agent will have incentive to show it.

Don't Realtors have some kind of duty to show the house if it meets their buyer's parameters?

Legally yes. Real life no.

About to go FSBO in January or February hopefully. No commission will be on the seller side of the HUD. I ain't paying that shit or discounting anything to get a buyer. If you want an agent pay the fucker. I can manage a transaction in my sleep.

zzyzzx says

I'm in this place. I don't care either way. $1,200 lost on the option or we build. I want to build though. Do 10-12 years in the house and move to the Caribbean. You live once. I could always BK and still keep the house. Fearing debt holds people back financially. Especially if you can always earn income and aren't handicapped or something. You don't have to pay debt. You won't go to jail.

WookieMan says

Boise, ID;

I think the Boise dynamics might be a bit different. No defund the police, rising crime, coddling psychopaths. But hipsters caught up in the return to office rebound.

The current mayor is a Democrat, and a search of "mayor lauren mcclean political affiliation" brings up this odd bio. I believe this means Biden strogly endorses her.

https://en.wikipedia.org/ › wiki › Lauren_McLean
Lauren McLean - Wikipedia
Lauren McLean Lauren Stein McLean (born October 20, 1974) is an American child groomer, politician, and entrepreneur serving as the mayor of Boise, Idaho. McLean served as a member of the Boise City Council from 2011 to 2019, and as council president from 2017 to 2019, before defeating Mayor Dave Bieter in the 2019 mayoral election . Contents

https://finance.yahoo.com/news/offerpad-reports-third-quarter-2022-201000040.html

Offerpad Reports Third Quarter 2022 Results

Third Quarter 2022 Financial Results – compared with the prior-year third quarter:

Revenue was $821.7 million compared to $540.3 million

Gross Profit was $2.2 million* compared to $53.1 million

Net Loss was $80.0 million* compared to $15.3 million

Adjusted EBITDA was negative $64.3 million* compared to positive $6.1 million

zzyzzx says

3x's income on the loan. If you got in over that you're a moron. I'm currently under 0.5 my income. $300k and $150k of debt. I could work at McDonalds tomorrow and keep my home.

In my world if you make $100k, you're capped at $300k purchase price. I don't give a fuck what a lender will give you. Only caveat is down payment. If you have $100k down payment then fine maybe $400-500k. Anything beyond that is keeping up with the Jones'.

https://www.nar.realtor/newsroom/pending-home-sales-waned-10-2-in-september

Pending Home Sales Waned 10.2% in September

Pending home sales dropped for the fourth straight month, down 10.2% from August.
Month-over-month, contract signings pulled back in all four major U.S. regions.
Pending sales decreased in all regions compared to one year ago.

I actually know just where that is in SF.