patrick.net

DD214 says

Rents are starting to fall across the US — and they're set to drop even more in 2023

Yes, but why is there less rental demand?

Booger says

My daughter is driving to Homestead it's about an hour drive for her, sometimes over an hour and a half. It's her first IT gig, so she's having fun. I told her not to take the first opportunity that came her way. The guy she's working for runs the IT for a huge Construction Company and their legal team. He sounds a lot like the type of gigs I always liked. The sole IT department from development to server administration to back office support. He brought her on to help with some of the burden, she's just fresh out of college..
Told her the biggest reason that she got the job, because she wasn't full of herself in the interview, going on about how She's going to take over the world with Kubernetes and Panda, like all of the other smug candidates, fresh out of college.

HeadSet says

why is there less rental demand?

Some possible answers here: https://therealdeal.com/2022/10/05/recession-fears-curb-rental-demand-in-us/

HeadSet says

DD214 says

Rents are starting to fall across the US — and they're set to drop even more in 2023

Yes, but why is there less rental demand?

Because I invested in multifamily for the economy of scale. SFH doesn't have an economy of scale. Multifamily the rent is cheapest as opposed to SFH rent because of the economy of scale.

In Austin's MSA, for example, a person can rent a 1 bedroom/1 bath place for about $1,000 a month that would cost $200,000, whereas to buy the same place as a condo would be $280,000 or so. Lastly, a lot of evictions have been done and the 'free money' from the Fed has stopped, so prices have to go down a bit.

More insights here:

As the next 5 years evolve, we’ll likely see rent prices fall gradually. For 2023, higher interest rates and mortgage rates, and higher unemployment are expected thus reducing the wealth of funds renters have to spend on rent.

Yet, renters are desperate and some cities will see big rent prices. With the push to bring corporate workers back from remote work to the office, New York, San Francisco, San Diego, Chicago, Boston and other major metros are seeing strong rent prices this fall.

https://managecasa.com/articles/us-rental-property-market/

Rent prices begin course-correcting:

This month’s report reveals significant price drops throughout much of the country. National one-bedroom median rent is down 0.8% over last month, to $1,491 and the two-bedroom median is down 0.7% to $1,832. More than half the cities on our list posted month-over-month declines and 19 cities remained flat, leaving just 20% of Zumper’s top 100 list with month-over-month increases. This slowdown is showing up in our year-over-year figures, too: After 12 straight months of double-digit year-over-year jumps, the national median is up a slightly more reasonable 9.2% over October of last year.

https://www.zumper.com/blog/rental-price-data/

HeadSet says

Yes, but why is there less rental demand?

Quiet quitting and actual quitting. "Kids" are moving back home.

https://www.newsnationnow.com/us-news/education/college-crisis/boomerang-kids-adults-moving-back-parents/

(NewsNation) — Many Americans have hit a brick wall post-graduation, struggling to find jobs, even with a college degree; while others are struggling financially due to student loan debt and looking for affordable rent. This has led to an increase in “boomerang kids” moving back home with their parents.

“It’s called a ‘boomerang kid’ — that’s someone who leaves home and then comes back,” Stacy Kaiser, a psychotherapist, explained. “I am seeing more of that than ever before.”

The start of the pandemic triggered a massive wave of boomerang kids returning home, and now an estimated 67% of that group are still at home.

HeadSet says

DD214 says

Rents are starting to fall across the US — and they're set to drop even more in 2023

Yes, but why is there less rental demand?

DD214 says

ad says

Mark Zuckerberg said today "he was wrong" as far as managing Meta's finances and announced layoffs of 13% of its workforce.

Meta's H-1B layoffs challenge visa holders and U.S. workers

[Laid-off H-1B workers have] virtually no bargaining power with prospective employers. And [they] will make huge sacrifices just to stay in the country legally.
Ron Hira - Associate professor of political science, Howard University

https://www.techtarget.com/searchhrsoftware/news/252527158/Metas-H-1B-layoffs-challenge-visa-holders-and-US-workers

Onvacation says

Quiet quitting and actual quitting. "Kids" are moving back home.

My experience with the last 2 recessions in the bay area were that perhaps but also that people moved away to cheaper places AND people took on more roommates.

I bet the kids moving back home is a larger phenom than I can imagine this time though.

B.A.C.A.H. says

Meta's H-1B layoffs challenge visa holders and U.S. workers

[Laid-off H-1B workers have] virtually no bargaining power with prospective employers. And [they] will make huge sacrifices just to stay in the country legally.
Ron Hira - Associate professor of political science, Howard University

Meta is laying off the useless purple hairs who don't code or offer any direct value to the bottomline. Its not laying off H1-B visas which most likely are software engineers and coders.

Look at that recent photo of Elon Musk with Twitter employees; that looks like a H1B promotional photo by the US Chamber of Commerce.

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ad says

Its not laying off H1-B visas which most likely are software engineers and coders.

Really?

You know this?

Do you have boots on the ground at Meta?

Besides, regardless of whom they lay off, a large cohort of H1-s leaving the country (Bay Area) is a large cohort of renters who won't any longer be paying the high rents in the Bay Area. I could take you through neighborhoods of beautiful, pricey massive rental apartment complexes SJ that are expat communities of India. Walked through them many times on my cardio strolls around the city. You'll stand out as the haolie, bro.

B.A.C.A.H. says

Really?

You know this?

Do you have boots on the ground at Meta?

H1B for tech and engineering companies are from the STEM fields, because they are the hardest to fill. I worked for an Architecture&Engineering (A&E) firm and they had a few positions that were H1B and they were all engineering.

The purple hairs and deadweights are the ones running the Woke policies departments, like that smug and pretentious fake whistleblower from Meta who testified before Congress.

I'm not haolie, boy. My family is from Colombia.

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B.A.C.A.H. says

ad says

Its not laying off H1-B visas which most likely are software engineers and coders.

Really?

You know this?

Do you have boots on the ground at Meta?

I've seen several layoffs. They will get rid of engineers, and they will be hiring marketers and PR. If you already have a product you can't sell, you don't need to make MORE products you can't sell. You need to sell what you have.

ad says

Besides, regardless of whom they lay off, a large cohort of H1-s leaving the country (Bay Area) is a large cohort of renters who won't any longer be paying the high rents in the Bay Area. I could take you through neighborhoods of beautiful, pricey massive rental apartment complexes SJ that are expat communities of India. Walked through them many times on my cardio strolls around the city. You'll stand out as the haolie, bro.

Blue hairs are probably NOT being fired as much as you think. Basically, there's 2 rounds. 1) managers get rid of the people they don't like 2) then they are forced to get rid of the people that aren't useful.

Corporations are kind of stupid and slovenly.

Facebook is incredibly lazy and stupid in my opinion. They have pissed of all their SMART users a long time ago. They've driven off intelligent and thoughtful people through censorship. They have lied, repeatedly, to their users about their terms of service and enforcement of it. They have promoted wars, Ukraine being an obvious one.

There's kind of two sets of people in society. One set is the NPC normies, they don't matter and they don't change anything. They're just dumb consumers. Then there's the people who aren't NPCs, and (depending on their willfulness) won't put up with shit. They determine what site is "good" and "bad". People will be making fun of Facebook in time in the same way we ONCE did about Yahoo! and more recently MySpace.

richwicks says

People will be making fun of Facebook in time in the same way we ONCE did about Yahoo! and more recently MySpace.

I hope they would lay off any manager who would fire someone they don't like and is a good performer.

I suspect Facebook will adopt and evolve to avoid the same fate. Look at how popular Facebook Reels is. I've seen Reels videos in my Facebook feed that have over 1 million views and 200,000 likes. Instagram is as popular as Youtube.

There may be competitors and Tik Tok is a joke.

My HOA has a Facebook page. I've seen other pages that have serious and thought engaging content like Interesting Engineering page.

Tik Tok does not provide that type of forum.
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ad says

I'm not haolie, boy. My family is from Colombia.

You'll stand out as one of those, too. They may assume you're a custodian or groundskeeper.

We got so many experts about Silicon Valley on patrick.net who didn't live here, who didn't work in those places, have no connections to those places.

I've done all that sh*t and been one of those and many I am close to are in that millieu, including at some outfits (ie, more than one of them) mentioned in this thread.

Speaking anonymously here like richwicks does, I can speak more freely about it.

B.A.C.A.H. says

We got so many experts about Silicon Valley on patrick.net who didn't live here, who didn't work in those places, have no connections to those places.

I am not Mestizo and would not have been selected as an extra in Mel Gibson's Apocalypto.

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ad says

I am not Mestizo and would not have been selected as an extra in Mel Gibson's Apocalypto.

Sounds like a haolie to me, bro.

B.A.C.A.H. says

Sounds like a haolie to me, bro.

Ask those Indians if they consider themselves the same type of Asian as the Chinese. Ask them what they think of the Chicoms.

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ad says

Ask those Indians if they consider themselves the same type of Asian as the Chinese. Ask them what they think of the Chicoms.

Dude, I retired recently. The only time I see those folks nowadays is when I go to their enclave communities to walk about the city. The Indian enclaves are in parts of Sunnyvale and an area known as The Golden Triangle.

The Chinese enclave is Cupertino.

But even though I don't live among them, I worked side by side with all those sorts of folks for decades. I even had a boss who was an H1. Since I was in hardware, there were also Chinese H1's and green carders (if I was in software or IT, well that'd just be the Indians). Most of the departments I worked in had about 40% Indian, 40% Chinese, 20% everyone else. Even worked with a haolie Colombian expat H1 who married his green card.

Chinese and Indians mostly were civil to each other in meetings and collaborations. Of course, they would mostly hire their own kind. But, civil with each other.

BTW, if you only ever lived in what became Silicon Valley, and spent decades in engineering departments in the tech world, you would probably be able to differentiate what you call a Chicom and a Taiwanese. I can't put my finger on it exactly, but I am sure someone who actually lived here and knew wtf they were talking about, would understand my point.

B.A.C.A.H. says

BTW, if you only ever lived in what became Silicon Valley, and spent decades in engineering departments in the tech world, you would probably be able to differentiate what you call a Chicom and a Taiwanese. I can't put my finger on it exactly, but I am sure someone who actually lived here and knew wtf they were talking about, would understand my point.

Don't care to know about that shithole. I'm happy to work in better places like Braintree and Quincy, Massachusetts and Reston, Virginia.

Sounds like a tribal culture as far as what you describe (i.e., "Chinese enclave is Cupertino" and "mostly hire their own kind"). Yeah I am sure it was all California-style Kumbaya (i.e., "civil with each other"). Enjoy your white liberal shithole paradise.

Nothing that a few more million illegals can't cure.

B.A.C.A.H. says

Meta's H-1B layoffs challenge visa holders

ERECTION INTENSIFYING!!!

Misc says

Nothing that a few more million illegals can't cure.

It was commonplace to see in Manassas Park back in the late 1990's and the 2000's at least two families in a home designed and zoned for one family.

A lot of 3 to 4 bedroom homes became boarding houses.
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Booger says

Meta's H-1B layoffs challenge visa holders

ERECTION INTENSIFYING!!!

I don't see the tech companies letting go of a workforce (i.e., H1B visas) that are easy to exploit. I've worked around H1B visas and they are docile and loved by management, cause they will work +50 hours a week without any overtime or credit toward vacation time.

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Esclavos.
ad says

hey will work +50 hours a week without any overtime or credit toward vacation time.

Plunged 32.3% YoY while still higher than the last housing bubble peak, and 5x more buying than the bottom. Just put things in perspective rather than a sensational headline without context. The Fed had really helped to fuel this asset bubble. 🚀🚀

Eman says

Plunged 32.3% YoY

Its got to drop to at least 10,000 housing units for housing prices to reach near the bottom.

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cisTits says

Eman says

Plunged 32.3% YoY while still higher than the last housing bubble peak, and 5x more buying than the bottom.

So what? A 32% drop is still a 32% drop. Who gives a flying fuck about 'last time'?

Are you one of the 'housing experts' who told us earlier this year that rates would not go up like they have? That housing prices would not drop as they have?

I see you like to label people without proof. Also, you’re quite emotional when it comes to this subject. Let’s clarify a couple things. I’ve never claimed I’m a housing expert. I’m a real estate investor, who started in 2009 just before I found Patnet. My biz partner and I own about 100 units in San Jose. We are value-add investors. We don’t pay retail prices. All assets have positive cash flow and appreciated tremendously…up to 4x.

I wasn’t as optimistic as others earlier this year. However, I never thought 30-year fixed mortgage would exceed 6% without crushing the housing market. I’m surprised the housing market hasn’t tanked more than they are.

I’m a numbers guy. I’m ALWAYS a buyer and seller “for the right price”. RE assets are vehicles to get me to my destination, just like a job. I don’t get emotional about them. I haven’t seen rent softness in MY market as reported. In fact, we’ve been getting record rents in the last few months.

The Fed has blown the asset bubbles beyond repair. The only way to fix these asset bubbles is to drive the entire country into a deep depression to reset everything. Do you see it happening? If not, the housing market should rebound and make another run once this recession is over. Developers have already pulled back on current projects and stalled new developments, which should continue to prolong the housing shortage in the short and long term.

Back in 2012, our real estate investing group asked all members to make prediction on the next peak of the housing market. My prediction was summer 2017. One of our members predicted 2021-2023 and shared this chart… A DECADE AGO. He was right on 🎯. He also predicted the bottom around 2027. History suggests 3-5 years, peak to trough, for real estate cycles so 2027 is in the ballpark.

One of my besties works for the Federal Reserve. JPOW is his boss. As much as he’s in the knows, he didn’t foresee his boss and the other 6 governors hiking rates this aggressively.

https://www.businessinsider.com/real-estate-investors-are-fleeing-pandemic-boomtowns-2022-11

Regular homebuyers in Las Vegas and Phoenix stand a chance now that investors are fleeing pandemic boomtowns

cisTits says

And it will at this rate? What? You all think this will suddenly stop and plateau? Or even rise again.

Takes 18 months at least for a housing downturn to run its course. This is barely starting

I would say at least half of the home purchases are with buyers with mortgages. So affordability (principal, interest, property tax, property insurance, and HOA fee) is a major factor as far as price discovery.

I go by the VA mortgage criteria that monthly housing cost (principal, interest, etc.) is no more than around 37% of monthly household income.

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Booger says

To counter your meme, here’s a “real expert” suggests housing prices could rise in 2023. 😂

NAR Economist Lawrence Yun suggests national prices could rise 1% next year, breaking from the pack of projections suggesting a freefall.

https://www.biggerpockets.com/blog/nar-economist-housing-prices-rise

Eman says

Booger says

To counter your meme, here’s a “real expert” suggests housing prices could rise in 2023. 😂

NAR Economist Lawrence Yun suggests national prices could rise 1% next year, breaking from the pack of projections suggesting a freefall.

https://www.biggerpockets.com/blog/nar-economist-housing-prices-rise

An NAR cheerleader is a "Real Expert"?

GNL says

An NAR cheerleader is a "Real Expert"?

I am pretty sure that claiming Yun as an expert is tongue-in-cheek. Lawrence Yun is a long-time butt of jokes on Patrick.net.

GNL says

Eman says

Booger says

To counter your meme, here’s a “real expert” suggests housing prices could rise in 2023. 😂

NAR Economist Lawrence Yun suggests national prices could rise 1% next year, breaking from the pack of projections suggesting a freefall.

https://www.biggerpockets.com/blog/nar-economist-housing-prices-rise

An NAR cheerleader is a "Real Expert"?

Not sure what happens but at some point it stops going down except for few expensive areas as the inflation that is backed by corrupt gov is not going to slowing down any time soon.

Eman says

this chart

I have tried to chart asset values/prices like that.

Yes, we can do it and spin a narrative.

The problem I have with the approach is the vertical axis units is fiat currency. The value / purchasing power of the fiat is not constant and should not be taken for granted.

While the absolute (nominal) values in the chart may be accurate, if we are not careful our conclusions may be misleading.

11/11/2022 Price change $775,000 (-1.9%)$294/sqft

9/23/2022 Price change $790,000 (-11.2%)$300/sqft

9/2/2022 Price change $889,500 (-1.1%)$338/sqft

8/4/2022 Price change $899,000 (-3.3%)$342/sqft

7/11/2022 Listed for sale $929,500 $353/sqft

I saw one house in Santa Cruz (still absurdly high) that had a 500,000 dollar reduction. It was about 2500 sq. ft close to the beach.