patrick.net

I'm not that interested in this subject, but out of curiosity I looked.
The Redfin page says $1.28 million median home price in San Francisco, down 13.3% from last year.
Either way, 1. houses are a fortune up there 2. some people are pissed off 3. some people are happy.

The thing with houses is that they are ever popular. It's interesting to see.
Rich gazillionaires sometimes buy multiple houses, including fucking castles, etc.

After a certain level of wealth, you can afford fancy hotels for every day of your life; why own a castle in addition to your beach house in Malibu?

clambo says

After a certain level of wealth, you can afford fancy hotels for every day of your life; why own a castle in addition to your beach house in Malibu?

This is what Musk realized (and acted upon).

zzyzzx says

Lol! Sadly this is almost true at least in CA after 1978 prop 13. Boomers never cared even if it is hurting their own children.

Right now is not the time to invest in housing. Prices may continue to climb for a while as it continues to be a tight market. If you are a homebuyer, or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again. - Jerome Powell, June 14, 2022

In 2019, two home-sellers filed a lawsuit [Sitzer et al v. National Association of Realtors (NAR)], alleging that several NAR rules violate the Sherman Antitrust Act, an 1890 law which prohibits activities that restrict interstate commerce and competition. One of the NAR rules in question requires listing brokers to offer buyer brokers a commission to list a property. The lawsuit alleges that this practice inflates sellers' costs and, therefore, is anticompetitive. Traditionally, it takes two agents to sell a house: a buyer's agent and a seller's agent. However, if NAR loses the suit, the real estate industry would effectively see buyers' agents removed from the equation. That means the number of real estate agents in the U.S. (there are 1.5 million right now, according to NAR), could drop precipitously .

"You could see hundreds of thousands of real estate agents leaving the profession, and major brokerages go out of business," said Oppenheim. "We're on the precipice of an armageddon that nobody talks about."

There's hope for a settlement with regulators or an appeal process, but there's a high likelihood the marketplace for real estate agents is about to get majorly overhauled, said Oppenheim. He added that we could see the U.S. ultimately turn towards a model with lower total commissions, as is the case in Australia.

https://law.justia.com/cases/federal/district-courts/missouri/mowdce/4:2019cv00332/145710/741/

gabbar says

Right now is not the time to invest in housing. Prices may continue to climb for a while as it continues to be a tight market. If you are a homebuyer, or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again. - Jerome Powell, June 14, 2022

Actually, this was the time where housing prices peaked….if not a month or two before.

Low inflation and low mortgage rates happened through out the whole 2010’s especially the first half of 2010’s. Whoever didn’t buy after the housing bust missed an opportunity once in a lifetime. Prices have gone up 2-4x since. In the lower end markets, some have gone up 10x since.

GNL says

https://www.investmentwatchblog.com/us-median-home-price-drops-12-in-six-months-largest-drop-since-2009/

From the article...

"San Francisco home prices have already fallen 30% from peak.

Denver, Austin, and Phoenix are all pushing 20% drops from peak.

It’s real. It’s happening. It’s not “small”."

The author is cursing in his article? So professional. If prices are dropping, they’re dropping. It’s a fact. Present the data to back up his thesis. No need to curse. This indicates the author is likely a renter, has missed his buying opportunity, and is simply outraged at Bay Area real estate prices.

To me, it is what it is. Use the data, make our decision to buy or not to buy and live with the consequences.

gabbar says

He added that we could see the U.S. ultimately turn towards a model with lower total commissions, as is the case in Australia.

When I was in England, I noticed that there were no multiple listings. One would list with a preferred "Estate Agent" and only pay 1%. I thought that was a good system.

Eman says

The author is cursing in his article? So professional. If prices are dropping, they’re dropping. It’s a fact. Present the data to back up his thesis. No need to curse. This indicates the author is likely a renter, has missed his buying opportunity, and is simply outraged at Bay Area real estate prices.

The only reason I posted that link is because it was on survivalblog.com. Rawles (the owner of the blog) has been pretty good with advice. Of course, only time will tell. Hindsight is 20/20 btw.

GNL says

Eman says

The author is cursing in his article? So professional. If prices are dropping, they’re dropping. It’s a fact. Present the data to back up his thesis. No need to curse. This indicates the author is likely a renter, has missed his buying opportunity, and is simply outraged at Bay Area real estate prices.

The only reason I posted that link is because it was on survivalblog.com. Rawles (the owner of the blog) has been pretty good with advice. Of course, only time will tell. Hindsight is 20/20 btw.

@GNL,

From what you know about him, did he advise people to get out, or don’t buy in 2005-2007? Did he advise people to buy during the downturn?

The market peaked around late spring to early summer so the price decline numbers will only get worse in the coming months when compared YoY. Next year numbers is where it would get interesting. My guess is the decline would be smaller YoY. Then possibly bottom out in 2025. However, I’ve seen some big names called the bottom of the housing market around mid to later this year. Time will tell.

I don’t know if you’ve heard of Bruce Norris, but he called the top in 2006-2007 and told his investors to sell and get out. Some even sold their house, went and rented and bought back in 2010-2012 when Bruce called the bottom. Bruce also called the top last summer so it’s been 3 for 3 from what I know.

The reason I remember things vividly because I’ve always been in the market every year for the last plus decade. I bought and/or sold real estate every year. I remember buying a 10- and a 12-unit buildings in 2018 and I went all out with my cash. I told myself what am I doing buying at the top of the market here? While Bruce insisted the market still had more room to run.

I know what numbers Bruce monitors to call the top and bottom. He was right the peak was not in based on his set of parameters, but things seemed so frothy then. In hindsight, one building turned out to be a great deal, and one is a good deal. I already got 38% of my money back on one building and 72% on the other after 3 years of ownership. The formula works. Don’t doubt it. Just rinse and repeat.

Eman says

From what you know about him, did he advise people to get out, or don’t buy in 2005-2007? Did he advise people to buy during the downturn?

He's not a real estate expert but he did advise people to sell their excess properties early 2022. His other investment advice has been pretty good also.

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

Fed will fail to control inflation at the current rate of interest. So, it will continue to raise interest to get a handle on inflation. 6% +. Corporations will continue to fire employees, firings will accelerate. IT collapse will continue. Insider sales of stocks continue, no insider is buying stocks. Election season is not too far. How much pain can the American consumer take?

Eric Holder says

clambo says

After a certain level of wealth, you can afford fancy hotels for every day of your life; why own a castle in addition to your beach house in Malibu?

This is what Musk realized (and acted upon).

Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.

Robert Sproul says

Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.

I'm pretty sure I would do this exact thing. Maybe one house in a dream location so I can entertain family and friends.

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the average Joe and Jane don’t. I’ve met Tod in person several times at JPM events for real estate investors. Really nice guy. He shared what he does for free too. He lives in Atherton. He has one rule though. Regardless how busy work is, he has to be home by 7pm and have dinner with his wife. John Sobrato, who owns like half of downtown Cupertino, also lives in Atherton. Nice guy too. 😂

His SIL is a commercial agent in my market. Nice guy too. I’ve done 5 deals with him.

https://www.siliconvalley.com/2023/01/23/sunnyvale-housing-home-apartment-real-estate-buy-develop-build-tech/

Eman says

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the aver...

do you buy now in this market? or its just that 20% vacancy rate formula as only criteria? ive been eyeing frw properties, but cap been very low.

do you just buy full cash, or seed 30% down relying on positive cash flow less mortgage?

FortwayeAsFuckJoeBiden says

Eman says

GNL says

What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?

The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.

With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.

If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.

Billionaire Tod Spieker just bought/added a 224-...

I’m always a buyer or seller for the right price. With that said, I haven’t bought any apartment since last year as the numbers don’t pencil out. Sellers haven’t capitulated while interest rates are high. Now, I’m looking at adding new units on my oversized lots. If I can be all-in at $200k/unit, and it’s worth $275-$300k/unit, then it’s worth the efforts.

I budget $600/sqft for the building, engineering, permit costs, etc…. If I can get the cost down to $500/sqft. Voila. The reason it should cost less because I don’t have to pay for land.

I’ve never paid all cash for apartment buildings. Even with this new construction, I’ll obtain a construction loan. The lender requires I put in 45% of the equity towards new construction. They’ll lend 55%. The cash flow on the building should be able to cover the debt service of the construction loan so there’s no stress on it. Once done building, refinance it into a permanent loan aka a fixed loan rather than an adjustable construction loan.

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

zzyzzx says

https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/

Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.

We made an offer on a place that was 15% below ask. They all got hoes mad and huffed and puffed, saying they already had a much better counter offer. We rescinded, they took the other offer, it fell through probably during inspection, and they eventually sold a few months later just a bit below what we offered. We then proceeded to find a much better place for less a bit more rural. 80% of listings are overpriced by at least 10%-20%

mell says

They all got hoes mad and huffed and puffed, saying they already had a much better counter offer.

Fictitious other offers are always a problem.

I know Patneters are skeptical of “real” offers, but we believe the agents we work with are honest with them.

Recently, there’s a 10-unit building listed for $2.85M. The agent contacted us. We said price is high and in a fringe area, not interested. Seller got an offer for $2.5M shortly after, but declined. We thought the offer was reasonable given the high borrowing cost and its location. We told him to convince the seller to accept it.

No other offers came in for a couple months. The agent reached out to us and begged to write up an offer that we’re comfortable with. We said $2-$2.2M at most. He wrote it up. Next day, a $2.65M offer came in from some agent. The seller accepted it. That’s how it goes sometimes. We trust the agents we work with. We don’t believe in ghost or fake offers

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

https://www.reddit.com/r/RealEstate/comments/10qcqxb/would_you_buy_a_house_where_someone_committed/

Would you buy a house where someone committed suicide?

zzyzzx says

Would you buy a house where someone committed suicide?

If it was the real estate agent, it'd be a gimme.

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

GNL says

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.

zzyzzx says

GNL says

zzyzzx says

https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html

Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January

What does that mean?

Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.

"Redemption", meaning they can't sell their stock/interest in the fund once a limited amount of real estate inside the fund has been sold?

Eman says

For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.

I assume you are going, maybe you can give us a brief report?

For every 1% increase in the 30 yr mortgage rate, there is a 10% drop in price.

Peak housing prices were set at around a 3.25% to 3.5% rate. So if the 30 year mortgage rate settles around 5.5%, then housing needs to at least drop 20% to 25% from peak pricing levels.

Also, the home price to household income ratio should be around 4 for a 30 year mortgage rate of 4.5% to 5.5%.

The ratio is 5 for a rate of 3%, based on my own experience securing a VA mortgage in late summer 2016 and what the regional bank mortgage broker stated, in addition to total monthly payments (principal+interest+insurance+taxes+HOA quarterly assessment) not being more than 37% of household income.

The mortgage broker reminded me I was foremost buying monthly payments as the bank owned the home until the loan was paid off.

A $400,000 mortgage would correspond to an annual household income of $100,000 to $133,000. Granted, a buyer may make a 20% down payment for a $400,000 home given they may have proceeds from a previous home sale, stock sale, etc.

Median household income was around $72,000 in 2022.

Median sales price is around $467,000 in last quarter of 2022. It was $329,000 during first quarter of 2020 :-/

I knew I should have bought a home in Kindergarten and not wait until First Grade. I blame the teacher.

cisTits says

zzyzzx says

...and now we get to hear some bullshit Housing Expert story that flies into the face of data.

What about falling prices?