patrick.net

rocketjoe79 says

Many large companies are mandating a return to the workplace. But, there have been tens of thousands of layoffs. Hard to figure out what this is doing to the housing market, except driving up big city rental prices.

Or is that employees are mandating themselves to return!

rocketjoe79 says

Many large companies are mandating a return to the workplace. But, there have been tens of thousands of layoffs. Hard to figure out what this is doing to the housing market, except driving up big city rental prices.

Yes, we have been hitting record after record on rent prices. Just have to remove ourselves from the equation and let the property management company do their job. We’re too emotional and don’t push rents like them.

ad says

It's too easy to get a license and you then represent people with what will be the largest purchase of their lifetime most likely. Depending on state rules/laws, you can also just start a brokerage without a license and sign on a bunch of agents. Tell one of them to take one for the team and you're essentially a real estate broker without a license. All legal. You just have to hire a managing broker.

Most people fail the brokers exam 1-2 times before getting their license. That should scare you bigly because it's not difficult at all. The average broker is a high school graduate. That's fine if you're painting my house, but not my biggest purchase.

Headset can correct me, but I think most commercial pilots need 500+ hours of flight. I'm not saying flying is easy, but with modern avionics is not as difficult a task as most would think. I think ground school freaks people out the most and they bail. I have two friends that recently bailed on it and they were getting hours in the air which ain't cheap. I feel like real estate should be similar.

Real estate is a racket within the industry. Between the MLS and other fees it came out to close to $3k a year. Considering the industry average for most major brokerages is 70/30, you'd have to sell 2 house, factor in vehicle, time, gas, phone, etc. to break even unless you're in a high price market. It's why I dumped my license. And yes you're an IC so you can write it off, but it doesn't make sense unless you're selling $4M in real estate. That would net you about $60-70k/yr. Easy in a place like CA, but that income doesn't keep up with the cost of living out there. Success is $20M plus in sales. 95% of agents won't get there.

The weird thing is we have Airbnb, VRBO and other vacation rental services. I've never personally dealt with a person at the property to get in. They trust I'm not going to steal anything. Yet with RE you need a buyer agent with you to get it. Like working a lockbox is a fucking challenge?? And what is stopping agents from stealing shit as well? The system needs change for sure. Typing this out my business gears are turning.

WookieMan says

The system needs change for sure. Typing this out my business gears are turning.

Big time people have and are working on changing the way real estate is sold. Any success yet? The NAR has the secret sauce, good luck with your turning gears.

GNL says

Big time people have and are working on changing the way real estate is sold. Any success yet? The NAR has the secret sauce, good luck with your turning gears.

I don't think there will be much luck. I have ideas, but sinking time into them against probably a top 5 lobby is likely impossible. My dad tried as an attorney. It was actually a logical idea, but he didn't have the skill set in business to make it work. I don't want to say too much as I'd like to stay private here. The nut of it was basically to cut out the realtor completely, because as an attorney realtors are the most fucking annoying humans to deal with. They also get paid more than the attorney.

All you really need is someone to review legal documents, get a loan and that's basically it. Then 6 other (making that up) industries trying to get a piece of the pie. I could understand a single woman getting an inspection, but inspectors are useless humans. Marketing is marketing, you need it which I think you do professionally, but why couldn't an attorney just refer your services instead of an agent? They have real estate paralegals that manage showings and marketing and contracts. I did all that and accounting for 15 years. Took care of corperate filings. Fucking car registration. Ipass (tolls). My bosses weekly parking ticket. The list goes on.

Beside actually selling, which I occasionally did, I ran everything except making cold calls and talking to people because I'm a dick. Actually I'm nice if I want to interact or the other person genuinely wants to interact with me. A lot of buyers and sellers expect you to wipe their ass after they shit. I ain't doing that. Hence why I just managed the background stuff that kept the business going.

WookieMan says

Headset can correct me, but I think most commercial pilots need 500+ hours of flight.

Way back when I was flying, it took 250 hours flight time, a flight test, and a written test to get a civilian commercial pilot license. Air Force pilot training graduates had about 200 hours of small jet (T-37 and T-38) but were able to get a civilian commercial license if they wanted by passing a flight test in a civilian pane with a civilian flight instructor. However, "commercial" does not mean left seat airline qualified. That would be an Airline Transport Pilot (ATP) which required a minimum of 1500 hours. Then you need a type rating on top of that (Boeing 737, etc).

HeadSet says

WookieMan says

Headset can correct me, but I think most commercial pilots need 500+ hours of flight.

Way back when I was flying, it took 250 hours flight time, a flight test, and a written test to get a civilian commercial pilot license. Air Force pilot training graduates had about 200 hours of small jet (T-37 and T-38) but were able to get a civilian commercial license if they wanted by passing a flight test in a civilian pane with a civilian flight instructor. However, "commercial" does not mean left seat airline qualified. That would be an Airline Transport Pilot (ATP) which required a minimum of 1500 hours. Then you need a type rating on top of that (Boeing 737, etc).

Ok so 250 hours to get paid shit. With a RE brokers it's 60-90 hours and that's not ACTUAL time of learning. You then get to sell a $1m home and make ~$25k on one transaction. A pilot would work all year to get that much with 250 hours. I get you cannot crash a house and kill people, but substantially more people get burned by shitty real estate brokers than pilots.

Planes don't have basements that can flood and you can lie about it. You can't cover a defect on a plane with annual inspections. Yet people just trust high school drop outs with the biggest purchase of their life. I was one and wouldn't trust one. Realtor, not high school drop out. History major with poly sci minor. Attorney path. Looked miserable so bailed into real estate. Good/bad decision. Made good money, wife's career took off and I realized people are not for me and there's too many in RE.

WookieMan says

there's too many in RE.

There are 9k real estate agents in Columbus, Ohio!

LMAO

As far as GNL's post above (post number 1933), the rich don't get mortgages for homes. They buy with cash such as from stock sale.

So price drops of that percentage are due to poor economy and stock market.

Just like fine art and jewelry sales much be down. Rolex watches should relatively be discount now.

How are yacht sales doing compared to high end luxury housing ?
.

ad says

As far as GNL's post above (post number 1933), the rich don't get mortgages for homes. They buy with cash such as from stock sale.

So price drops of that percentage are due to poor economy and stock market.

Just like fine art and jewelry sales much be down. Rolex watches should relatively be discount now.

How are yacht sales doing compared to high end luxury housing ?

This comment makes sense. I just think the urban areas are going to take a beating and that's what we're going to see. We only told friends and family we were going to build a house. We had and have 5+ people willing to buy our house at generally whatever price we want within reason and no brokers.

Everyone has a different reality. Our current house was one of the best investments we made and was super frugal. I actually think building right now HERE, is a smart decision. Builders are desperate for work. Demand has dropped and so have prices HERE. Sorry for the all caps, but some here think the country is CA so I want to be clear this is IL.

Not all areas are over priced and run like shit. And that's saying a lot as an Illinoisan.

https://www.reddit.com/r/RealEstate/comments/11cycta/when_youre_stuck/

What do you do when you hate the house you bought, the things you hate about it you can’t change (constant traffic noise), and you can’t afford to sell?

We bought it because we owned a 2 bedroom apartment and have 2 kids. I wanted to move before my older daughter started kindergarten so we felt we were in a time crunch even though the market was not ideal for buyers. Basically we needed a house, looked at and made offers on many, and this is the one we got. It checked enough of the boxes but the busyness of the road was something I failed to prioritize or fully realize.

https://www.reddit.com/r/personalfinance/comments/11cqlwa/given_the_current_interest_rate_do_i_have_to_hold/

https://www.reddit.com/r/REBubble/comments/11d11fg/yikes/



Honestly it's not too early to start lowballing people. I'm considering sending a 60% of list offer on a large commercial property. The fact is rising taxes and interest rates don't justify anything near the asking price. If they don't want to be reasonable then I'll simply wait until things get worse and the offer will not be improving when they come back to me later.

https://finance.yahoo.com/news/landlords-face-crisis-mortgage-costs-171034546.html

Landlords face crisis as mortgage costs surge higher than rents

zzyzzx says

Landlords face crisis as mortgage costs surge higher than rents

This is more the case in Britain where all mortgages are variable rate.

GNL says

LMAO

Obviously you don't understand how to invest in RE. Cash flow doesn't matter. No, you invest for future equity but first make sure interest rates are rising.

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/11cycta/when_youre_stuck/

What do you do when you hate the house you bought, the things you hate about it you can’t change (constant traffic noise), and you can’t afford to sell?

We bought it because we owned a 2 bedroom apartment and have 2 kids. I wanted to move before my older daughter started kindergarten so we felt we were in a time crunch even though the market was not ideal for buyers. Basically we needed a house, looked at and made offers on many, and this is the one we got. It checked enough of the boxes but the busyness of the road was something I failed to prioritize or fully realize.

Buyer’s remorse. It’s that simple. No one forced them to buy the house.

GNL says

LMAO

Numbers don’t pencil out. Next.

cisTits says

GNL says

Obviously you don't understand how to invest in RE. Cash flow doesn't matter. No, you invest for future equity but first make sure interest rates are rising.

Only amateurs do that.

Just in case.../sarc

zzyzzx says

https://www.reddit.com/r/REBubble/comments/11d11fg/yikes/



Honestly it's not too early to start lowballing people. I'm considering sending a 60% of list offer on a large commercial property. The fact is rising taxes and interest rates don't justify anything near the asking price. If they don't want to be reasonable then I'll simply wait until things get worse and the offer will not be improving when they come back to me later.

Auction = foreclosure? If this is the case, the owner should ask for a postponement. List the house and sell it for as close to fair market value (FMV) as possible. At auction in the current market environment, my guess is that the house would sell for 70% of FMV at most. The discounted offers are justified.

zzyzzx says

https://finance.yahoo.com/news/landlords-face-crisis-mortgage-costs-171034546.html

Landlords face crisis as mortgage costs surge higher than rents

This is a real issue, especially for commercial properties, where the loans are becoming adjustable. JPM loan officer told us they’ve been doing cash-in refinance on loans that adjust recently. So far, owners have been able to bring in the difference for the refinance. No red flag……yet. This is specifically to Bay Area commercial real estate.

HeadSet says

zzyzzx says

Landlords face crisis as mortgage costs surge higher than rents

This is more the case in Britain where all mortgages are variable rate.

The same with Canada and Australia. Only ARMs. No 30-year fixed mortgages like the USA. 🚀🚀

@cisTits - what about inventory? Here in Northern Virginia, Realtors are telling me every day that things are selling quickly and at full price.

https://wolfstreet.com/2023/02/28/the-most-splendid-housing-bubbles-in-america-february-update-biggest-price-drops-now-in-phoenix-portland-las-vegas-san-francisco-seattle-denver-san-diego/

Housing Bubble 2 is deflating relentlessly, not under the pressure of an unemployment crisis – far from it: the labor market is still historically tight with the highest pay increases in four decades, and an increase in unemployment would be the next shoe to drop on the housing market – but because mortgage rates have reverted to the normal levels of 6% to 7% that existed before the money-printing era started in 2008. And home prices that exploded over the past few years, fueled by mortgage rates of 3% and lower, don’t make sense anymore – and never made sense to begin with. ...

On a month-to-month basis, today’s Case-Shiller Index for single-family house prices dropped in all 20 metros that it covers. The biggest month-to-month drops, those dropping at least 1.0%, occurred in:

Phoenix: -1.9% (second month in a row! The babe is moving fast)
Portland: -1.9%
Las Vegas: -1.8%
San Francisco Bay Area: -1.8%
Seattle: -1.8%
Denver: -1.3%
San Diego: -1.3%
Chicago: -1.2%
Minneapolis: -1.2%
Dallas: -1.1%
Detroit: -1.1%
Charlotte: -1.0%
From their respective peaks, which ranged from May to July 2022, house prices dropped the most in these metros:

San Francisco Bay Area: -16.0%
Seattle: -15.1%
San Diego: -11.1%
Phoenix: -9.4%
Denver: -7.5%
Las Vegas: -8.8%
Los Angeles: -8.1%
Portland: -7.9%
Dallas: -7.6%

West coast and hipster cities are going to eat shit. If someone didn't see that coming after covid you're not thinking. I've beaten this dead horse so many times here and I've 100% been right. There is and will be an exodus from cities. Covid accelerated that with work from home, millennials starting families, defund the police and just shitty politics.

Of the big negatives I think Phoenix has the highest probability of recovery. Denver has needed its ass handed to it for a decade now. The growth was not logical and likely ignited by legal pot. The west coast cities are obvious. Smart people generally don't live in a place led by morons, taxed at insane rates and political policy.

Regardless of interest rates I'm not losing selling my $1M home in Seattle and buying a $500k home in Spokane. Until people realize that most home buyers are white collar and can now work from home, major cities are going to take a beating. I lived the exodus from a major city like Chicago. The floor is much higher here for price loses. We're seeing price gains where I'm at and outside of 10% interest rates it's not stopping. It's not booming but we're hitting 3-5% increases annually still. Not losses.

https://www.businessinsider.com/fed-economists-markets-investing-housing-correction-crash-economy-rate-hikes-2023-2

The Fed's own economists are warning of a 19.5% housing correction and more rate hikes could set off a 'domino effect'

GNL says

Here in Northern Virginia, Realtors are telling me every day that things are selling quickly and at full price.

Probably still the case around here, for now.

https://www.cnbc.com/2023/03/01/mortgage-demand-falls-interest-rates-rise.html

Mortgage demand from homebuyers drops to a 28-year low

Ouch, nothing like paying $16k over ask just to take a $90k loss later...

2/10/2023 Sold $660,000
1/11/2023 Pending sale $699,879
12/7/2022 Price change $699,879
11/28/2022 Price change $799,000
11/16/2022 Price change $825,000
10/20/2022 Listed for sale $850,000
6/16/2022 Sold $750,000
4/26/2022 Pending sale $734,000
4/22/2022 Listed for sale $734,000

https://www.zillow.com/homes/9207-Woodbay-Dr-Tampa,-FL-33626_rb/44857898_zpid/

zzyzzx says

https://www.cnbc.com/2023/03/01/mortgage-demand-falls-interest-rates-rise.html

Mortgage demand from homebuyers drops to a 28-year low

In normally priced markets that are $700k or under, they should weather the storm relatively well. Where this will appear to be a crash is the cities and coastal areas.

Also 90% of owners bought when interest rates were sub 5% and that's not accounting for those that bought with cash. This isn't 2004-08 where we were giving strippers and unqualified people loans based off of undocumented income. Inventory shot above double digits into the 15-20 month range at that time. People might sell in cities to get the fuck out, but people are simply staying put.

I was personally managing 80+ listing during the crash. It was insane. Unless they're giving away loans again, I'm not see it. This is a demographic shift out of cities. Their prices tend to be higher. The national median AND city prices will go down. But it's not a crash.

My sister in law just got an all cash offer on her rental property. No price cuts. 2 weeks. Little cottage house near a lake in Northwest IL. I've never once said there won't be declines. People's perception of the market is from their location and they assume that's how it will be everywhere. It isn't and won't be...

Good news for renters. Heard over the radio 1220am, relief is on the way for renters that 500k apartments will be finished soon and put pressure on upside.

cisTits says

GNL says

cisTits - what about inventory? Here in Northern Virginia, Realtors are telling me every day that things are selling quickly and at full price.

What about it?

I don't think you can expect a crash when inventory is low.

Blue says

500k apartments

Not enough.

Blue says

Good news for renters. Heard over the radio 1220am, relief is on the way for renters that 500k apartments will be finished soon and put pressure on upside.

Lots of apartments going up in Panama City and Panama City Beach.

Seen a lot of apartment websites offering 1 month free for 13 month lease.

Seems like rental prices are back at 2021 levels without the 1 month discount.

I suspect rental rates will be frozen for next couple of years to allow wage growth to better align with past rental price increases.

https://www.zillow.com/home-values/6391/panama-city-beach-fl/

https://www.zillow.com/research/

ad says

https://www.zillow.com/home-values/6391/panama-city-beach-fl/

https://www.zillow.com/research/

That's way too fucking expensive for the panhandle.

Booger says

That's way too fucking expensive for the panhandle.

Housing here in the Florida panhandle needs to drop about 20% from its peak levels. It is already 6% down based on Redfin research data.

.