patrick.net

PumpingRedheads says

just_passing_through says

One things I've noticed since I left SF 11 years ago (then spent 10 years in SD) is the food seems to have changed a bit. Nobody fucking eats meat anymore in the bay area or what?

Indians have killed most meat-based restaurants. Esp in Fremont.

No more Outback. No more Sizzler. No.more Cattlemen's, etc. All shut down.

I understand as Indians do not eat beef or red meat, and still mostly to a vegetarian diet.

For me, I try to avoid red meat and pork, and stick to chicken, turkey and fish as well as lentils and cannelli beans, and will consume dairy as far as cheese (i.e., pizza), milk and yogurt. I support humane and slaughter free dairy.

https://freefromharm.org/animal-products-and-ethics/slaughter-free-dairy/

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zzyzzx says

https://www.reddit.com/r/realtors/comments/184w44u/if_my_house_doesnt_sell_should_i_switch_the/

If my house doesn’t sell, should I switch the listing agent?

I’m having the same problem. I’m trying to sell my bitcoin for 68K but it won’t sell.

Its all about the right selling price. Too high of a price and you won't get any reasonable offers.

If we sell, we would let them assume our VA mortgage.

We secured the mortgage at a rate of 3% and have about 23 years left on the mortgage with a balance of about $150,000 (and monthly mortgage of $800, monthly hoa fee of $425, and monthly property tax of $125, and monthly HO-3 property insurance of $150).

We would sell for around $300,000 in this down market, as the peak price was around $335,000 back in early 2022.

We would offer to pay up to 2 discount points to lower their mortgage by 0.5%. So if the 30 year mortgage rate is 6%, that would lower it to 5.5%.

So half of their mortgage would be 3% (from the assumable mortgage) and the other half would be at 5.5%, which results in an average mortgage rate of 4.25%.

This is not bad considering that most owners locked in a 30 year mortgage rate around 3.5% when peak prices was set in early 2022.

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ad says

We would sell for around $300,000 in this down market, as the peak price was around $335,000 back in early 2022.

We would offer to pay up to 2 discount points to lower their mortgage by 0.5%. So if the 30 year mortgage rate is 6%, that would lower it to 5.5%.

So half of their mortgage would be 3% (from the assumable mortgage) and the other half would be at 5.5%, which results in an average mortgage rate of 4.25%.

So, about $2,305 with $60,000 down. About $700/month more than you're paying now?

GNL says

ad says

We would sell for around $300,000 in this down market, as the peak price was around $335,000 back in early 2022.

We would offer to pay up to 2 discount points to lower their mortgage by 0.5%. So if the 30 year mortgage rate is 6%, that would lower it to 5.5%.

So half of their mortgage would be 3% (from the assumable mortgage) and the other half would be at 5.5%, which results in an average mortgage rate of 4.25%.

So, about $2,305 with $60,000 down. About $700/month more than you're paying now?

They will be paying about $800 a month for the assumable mortgage (at 3% rate with 23 years remaining)

They will be paying $852 a month for the mortgage of $150,000 at a rate of 5.5%

The closing costs can be rolled into the VA mortgage and a VA mortgage requires 0% down and no PMI (private mortgage insurance)

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Yes they will be paying $852 more than me for their mortgage since I bought the brand new 3 bedroom, 2.5 bath, 2 car garage townhome about 2 miles from the beach in the Florida panhandle at $187,000 in summer 2016 ...

that is because the market price is around $300,000 now for the townhome ... same style townhome in the HOA was selling at a peak price of around $335,000 back in early 2022 ...

again, I bought it for $187,000 back in summer 2016, and its only 2 miles from the white sand and emerald water beaches of the Florida panhandle, the best place on planet Earth...

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I saw Wolfman at Wolfstreet website posted yesterday about housing prices. The median USA housing price is now about 18% below peak price.

If the 30 year mortgage rate settles around 6% next year, then a 20% drop from peak prices would nearly be an sufficient correction.

For every 1% increase in the mortgage rate, there is a 10% drop in price. Assume peak prices were set in early 2022 around a mortgage rate of 3.5%.

Also income has increased since early 2022 in addition to housing prices dropping about 18%.

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ad says

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I saw Wolfman at Wolfstreet website posted yesterday about housing prices. The median USA housing price is now about 18% below peak price.

If the 30 year mortgage rate settles around 6% next year, then a 20% drop from peak prices would nearly be an sufficient correction.

For every 1% increase in the mortgage rate, there is a 10% drop in price. Assume peak prices were set in early 2022 around a mortgage rate of 3.5%.

Also income has increased since early 2022 in addition to housing prices dropping about 18%.

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My shack dropped 22% from the peak (going by "zestimate").

RWSGFY says

My shack dropped 22% from the peak (going by "zestimate").

Where (city or town) is it?

B.A.C.A.H. says

RWSGFY says

My shack dropped 22% from the peak (going by "zestimate").

Where (city or town) is it?

Tri-Valley.

https://www.cbsnews.com/detroit/news/new-real-estate-data-shows-sellers-incurring-more-losses-sales-down/

New real estate data shows sellers incurring more losses, sales down

Patrick says

I think what we are going to find over the next decade or so is that the home ownership rate is going to trend down.

GNL says

I think what we are going to find over the next decade or so is that the home ownership rate is going to trend down.

Housing is down around 18% from peak. Income has gone up at an annual rate of +5% since peak housing prices were set.

Housing prices can remain unchanged while income goes up +3% a year for the next 5 years.

That should be nearly enough for income to catch up with housing costs.

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ad says

GNL says

I think what we are going to find over the next decade or so is that the home ownership rate is going to trend down.

Housing is down around 18% from peak. Income has gone up at an annual rate of +5% since peak housing prices were set.

Housing prices can remain unchanged while income goes up +3% a year for the next 5 years.

That should be nearly enough for income to catch up with housing costs.

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I think you'd have to take into account the interest rate hikes also, no? Prices went up so far that, I'm not so sure 18% is gonna get it done with high rates.

GNL says

I think you'd have to take into account the interest rate hikes also, no? Prices went up so far that, I'm not so sure 18% is gonna get it done with high rates.

My post factors in a 30 yr mortgage rate between 4% and 6%.

Also it accounts for opportunity to buy down via discount points the mortgage rate by at most 1%.

DR Horton has been promoting recent sales with mortgage rate buy downs.

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@ad, serious question: how is it you are so sure rates will end up where you say they will? What brought you to that conclusion?

GNL says

ad, serious question: how is it you are so sure rates will end up where you say they will? What brought you to that conclusion?

I read on Business Insider: "The MBA forecast predicts that 30-year mortgage rates will drop to 6.1% by the end of 2024. While there's some dispute on exactly how much rates will decrease, the general consensus is that mortgage rates will go down in 2024, and they could even end up close to 6% by the end of the year."

But I think the 30 year mortgage rate will likely drop to 5.5% for 2024.

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ad says

But I think the 30 year mortgage rate will likely drop to 5.5% for 2024.

Being that 2024 is an election year, anything is possible!

SunnyvaleCA says

ad says

But I think the 30 year mortgage rate will likely drop to 5.5% for 2024.

Being that 2024 is an election year, anything is possible!

True, but how do you convince some foreign nations and other large entities to buy US Treasuries? Like the last sale, when no one buys the rates go up, and mortgages follow right along.

excerpted from page A12 of Wall Street Journal November 29, 2023

"Housing Woes Won't Let Them Split Up'
by Clare Ansberry

Divorced and separated couples are facing their worst nightmare: sharing a house with the person they want to get away from.

Behind the uneasy arrangement is the housing market. Mortgage rates are over 7% and average home prices have hit record highs. This means more couples can’t afford to leave their home with its less than 3% mortgage interest rates and set up two different households.

Many don’t tell colleagues about the set up because it seems unthinkable or they are embarrassed. They try to maintain civility for the kids and hold tight until they can afford to buy, rent and furnish two homes.

Danielle and her soon-to be ex-husband, Michael, bought their Mesa, Ariz., area home in July 2022 with a mortgage of about $600,000 that carried an interest rate of 5.62%. Both planned to refinance when mortgage rates fell.

Instead, they are divorcing and saddled with a house that has fallen in value and that neither can afford on their own.

“It’s currently worth less than we paid for it, so we are forced to short sell,” says Danielle, a nurse. The couple, who get along and remain amicable, continued living together in the house for two months, until it became too awkward for them and confusing to their daughters.

Danielle moved out last month after finding an affordable rental on a friend’s Facebook page. Michael, an insurance agent and part-time elementary-school instructional assistant, plans to stay in the home, although they have stopped making payments, until it sells.

“We’re negotiating with the bank to accept a price lower than the house is worth,” says Michael, who plans to live with friends temporarily.

Some people on the brink of divorce are pulling back from actually filing because of uncertainties about jobs, and added expenses of setting up two households, on top of credit-card debt and student loans they might have.

Others are proceeding, but negotiating agreements to defer selling or refinancing the house.

Homes are often a couple’s main asset and deciding what to do with it remains a main issue in divorce. Typically, couples sell the home and split the proceeds or one spouse refinances the mortgage and buys out the other spouse’s interest. But with average mortgage rates at 20-year highs, it can be harder to sell or refinance.

“We are working on what some days feels like the impossible: cohabiting and co-parenting in a 1,200-square-foot home,” says one mom sharing a ranch house in Portland, Ore., with her estranged husband.

It would be a hell of a lot cheaper to make the marriage work. Buuuuut, people be selfish and shit. Divorce imo, is mostly about meism.

https://www.reddit.com/r/realestateinvesting/comments/1863fes/taxes_and_insurance_killing_my_cash_flow/

Taxes and insurance killing my cash flow

I was wondering if others are finding themselves in a similar situation. I don't have great cash flow on my rental in the first place, but my latest tax bill + a particularly large jump in the insurance rates have cut my cash flow. I am seeing a near $100 a month increase between property taxes and insurances rates. it is a SFH. My mortgage was 1169 and my rent 1370. My payments are jumping to nearly $1250. I can't raise rents until May as I just raised them, but I am going to have to go for a full $137 increase (Oregon's max is 10% this year). But this is just moving me back to where I was. I am barely gaining ground.

https://www.msn.com/en-us/money/realestate/the-price-is-wrong-for-housing/ar-AA1kFGVt

The Price Is Wrong for Housing

Lower rates would make U.S. houses more affordable, just not affordable enough.

Take mortgage rates all the way down to 5%, versus September’s 7.2%, and the Atlanta Fed’s measure shows that housing costs are still nearly 25% beyond affordable. One way to make the numbers work at a 5% mortgage rate would, of course, be to boost household incomes by about 25%. The other would be to drop home prices by about 25%.

zzyzzx says

https://www.reddit.com/r/realestateinvesting/comments/1863fes/taxes_and_insurance_killing_my_cash_flow/

Taxes and insurance killing my cash flow

I was wondering if others are finding themselves in a similar situation. I don't have great cash flow on my rental in the first place, but my latest tax bill + a particularly large jump in the insurance rates have cut my cash flow. I am seeing a near $100 a month increase between property taxes and insurances rates. it is a SFH. My mortgage was 1169 and my rent 1370. My payments are jumping to nearly $1250. I can't raise rents until May as I just raised them, but I am going to have to go for a full $137 increase (Oregon's max is 10% this year). But this is just moving me back to where I was. I am barely gaining ground.

Still building equity.

zzyzzx says

https://www.msn.com/en-us/money/realestate/the-price-is-wrong-for-housing/ar-AA1kFGVt

The Price Is Wrong for Housing

Lower rates would make U.S. houses more affordable, just not affordable enough.

Take mortgage rates all the way down to 5%, versus September’s 7.2%, and the Atlanta Fed’s measure shows that housing costs are still nearly 25% beyond affordable. One way to make the numbers work at a 5% mortgage rate would, of course, be to boost household incomes by about 25%. The other would be to drop home prices by about 25%.

Without an increase in building, we will start seeing the homeownership rate decline.

“My mortgage was 1169 and my rent 1370. My payments are jumping to nearly $1250. I can't raise rents until May as I just raised them, but I am going to have to go for a full $137 increase (Oregon's max is 10% this year). But this is just moving me back to where I was. I am barely gaining ground.”

This is why you shouldn’t buy investment real estate with debt unless you can wholly afford the payment on your own without the expected income from said property. These fucks that just buy property on a wing and a prayer expecting it to cash flow have a RISK premium realization problem.

ForcedTQ says

This is why you shouldn’t buy investment real estate with debt unless you can wholly afford the payment on your own without the expected income from said property.

That's the difference between E-man and the schmucks cited in your post.

B.A.C.A.H. says

"Housing Woes Won't Let Them Split Up'
...
Danielle moved out last month after finding an affordable rental ... Michael [...] plans to stay in the home, although they have stopped making payments, until it sells
...
interest rate of 5.62%. Both planned to refinance when mortgage rates fell.

I'm having a hard time seeing this as a housing sob story. Their current interest rate is 5.62% and they are lamenting that neither can buy something else at only 2% higher? The person without the kids could live with roommates — just as I did for my first 7 years out of college. It looks like they are currently underwater, so, even without a divorce, dumping the house on the bank/taxpayers might be a good financial move.

I think the only real takeaway from this is: If you are buying a house, make quite certain that you are going to stay in that house for 10+ years.

Promised my partner not to discuss anything real estate related on any forums until our last flip is closed for this cycle. It’s closed today for $1.05M. https://redf.in/lnJ1AF

We’ll be looking for new opportunities, but deal underwriting will be very stringent.

Made an $8M offer on this 40-unit building in downtown San Jose, but seller is not motivated to sell at this price. 5/1 ARM rate is at 6.5% while bridge loan is at 9% interest only. Tough environment for both buyers and sellers. https://redf.in/JtVkdu

Eman says

Tough environment for both buyers and sellers.

I've been out of the game. Given demographics, we're entering probably one of the best markets ever for buyers. You know how many widows there are going to be holding real estate that they have no fucking clue what to do with it? Not promoting taking advantage of people, but the next 10 years are saucy for people looking to buy and hold, interest rates be damned.

Some are strong, but most women are easily manipulated (legally). They don't want the hassle of what their husbands left them. We're entering a once in a lifetime deal buying phase for the next 5-7 years. Especially multiunit properties. Don't wait for the MLS. Door knock the fuck out of a neighborhood you want to invest in right now. The window is small in my opinion. Might look bad for a year or two, but there's money to be made right now. The hyper focus is on interest rates. Not demographics and people looking to unload and retire.

Eman says

Promised my partner not to discuss anything real estate related on any forums until our last flip is closed for this cycle. It’s closed today for $1.05M. https://redf.in/lnJ1AF

We’ll be looking for new opportunities, but deal underwriting will be very stringent.

Made an $8M offer on this 40-unit building in downtown San Jose, but seller is not motivated to sell at this price. 5/1 ARM rate is at 6.5% while bridge loan is at 9% interest only. Tough environment for both buyers and sellers. https://redf.in/JtVkdu

I thought it was strange you went silent. Stay active here please.

WookieMan says

Some are strong, but most women are easily manipulated (legally). They don't want the hassle of what their husbands left them. We're entering a once in a lifetime deal buying phase for the next 5-7 years. Especially multiunit properties. Don't wait for the MLS. Door knock the fuck out of a neighborhood you want to invest in right now. The window is small in my opinion. Might look bad for a year or two, but there's money to be made right now. The hyper focus is on interest rates. Not demographics and people looking to unload and retire.

I wonder if there is some type of list containing these types of people?

The listing agent overplayed his hand and this fixer-upper has been languished on the market for over 5 months. https://redf.in/Qi5BFb

Eman says

The listing agent overplayed his hand and this fixer-upper has been languished on the market for over 5 months. https://redf.in/Qi5BFb

Teardown, no?

GNL says

I wonder if there is some type of list containing these types of people?

This will sound sick but obituaries. This was the situation my mom was in when my dad passed in 2019. I had no interest in any of the shit my dad had purchased over the years nor my sister. So my mom just unloaded it. If approached by someone without a broker she would have sold at a discount in a heartbeat to be done with it. Access to any database with tax records nationwide is key though. A dude dies locally born in the 40-60's and plug the name in and see what they owned.

In hindsight I'm kind of kicking myself for not taking one of the Florida properties off her, but whatever. Would've been nice to have a cheap water front newer home, 3/2 about 25-30 minutes from Panhandle beaches. A bit FL redneck, but I can deal with those types just fine as long as the neighbors aren't meth heads.

I still might buy her current primary residence which is 60 acres of riverfront land in the country. Or maybe do a swap with my current house. Was a campground at one point. Contemplating opening it back up and making that my job after a current health scare I had that prohibits me from driving potentially forever. Live out there on the weekend and collect cash from campers (no taxes....) and come back to my new house during the week. That way I'm commuting there and back once on back roads on a suspended license.

FWIW don't have a seizure if you can control it... especially while driving. I'm a lucky fucker let me put it that way. MRI tomorrow, but everything else has checked out fine health wise. Happened at work with a work vehicle. Miraculously no damage and no injuries. Bit 1/5th my tongue off and was out for 10-15 minutes after putting the truck in the ditch. Wasn't wearing a seatbelt either. Not housing related, but recent comments here have my gears turning given my new sudden lot in life. Ugh... Probably gonna create a new thread on this so as not to derail this one.

WookieMan says

I still might buy her current primary residence which is 60 acres of riverfront land in the country. Or maybe do a swap with my current house. Was a campground at one point. Contemplating opening it back up and making that my job after a current health scare I had that prohibits me from driving potentially forever. Live out there on the weekend and collect cash from campers (no taxes....) and come back to my new house during the week. That way I'm commuting there and back once on back roads on a suspended license.

It's a no brainer decision imo.

https://www.actionnetwork.com/general/expert-claims-young-mens-focus-on-sports-betting-could-cause-deflation-in-housing-market

Expert Claims Young Men’s Focus on Sports Betting Could Cause Deflation in Housing Market

Whitney claimed that younger men's focus on technology — with sports betting a big culprit — is preventing family formation to a level that will reduce demand in non-rental housing for years to come.

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Housing prices are affected by also property insurance and property tax. Higher property tax will bring down the price such as in Democrat shithole Illinois

the average USA annual home insurance premium is about 0.5% of the home replacement value

https://www.usatoday.com/money/blueprint/home-insurance/average-cost-homeowners-insurance/

in Florida the average is well above 1.25%

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New listings jump by the most in over 2 years

https://markets.businessinsider.com/news/commodities/housing-market-mortgage-rates-fed-rate-cuts-payments-home-listings-2023-11

https://www.bloomberg.com/news/articles/2023-12-06/carson-block-shorts-blackstone-s-publicly-traded-mortgage-reit

Carson Block Shorts Blackstone Publicly Traded Mortgage REIT

Carson Block said he’s short Blackstone Mortgage Trust, saying the publicly traded real estate investment trust is exposed to a perfect storm of economic conditions hitting commercial real estate and may face a liquidity crisis.

The Blackstone Mortgage Trust makes loans collateralized by commercial real estate. Block, who heads short-selling firm Muddy Waters, said the trust is facing a possible liquidity crisis and may default on its loans, and he expects it will have to cut its dividend by at least half.

“There’s been a lot of extending and pretending when things have been backed by paper profits,” Block said in an interview, speaking on the sidelines of the Sohn investment conference in London on Wednesday. “It’ll be the second half of next year that we’ll really start to see losses.”

Block predicted the trust’s borrowers will be unable to refinance and repay the trust and will need to post more collateral.

A spokesperson for the Blackstone Mortgage Trust said in an emailed statement that the trust’s liquidity is at “record levels,” it has continued to reduce its leverage, and has taken steps that leave it “well positioned to navigate this environment.”

“We believe this self-interested and misleading report is designed solely for the purpose of negatively impacting BXMT’s share price for the short seller’s own benefit,” the spokesperson said, adding that the firm plans to issue a more detailed response to the report.

Even if the Federal Reserve lowers interest rates, Block estimates that losses on the trust’s $23.2 billion net book value of loans could reach between $2.5 billion and $4.5 billion, meaning the trust’s equity could be completely wiped out.

Blackstone Mortgage Trust shares fell 8.1% on Wednesday, to close at $20.68.

The vehicle is separate from Blackstone Real Estate Income Trust, the firm’s $64 billion vehicle for wealthy individuals that began limiting withdrawals late last year amid commercial real estate market woes. BREIT has limited withdrawals for 13 straight months but has signaled that the backlog is easing.

Higher Rates

Commercial real estate owners have come under pressure as higher borrowing costs complicate financing and many properties including offices face a shift in demand. Property prices have plunged, with a measure of those values falling 19% through October from its March 2022 peak, according to real estate analytics firm Green Street.

Landlords including Brookfield Asset Management Ltd. and Blackstone Inc. have defaulted on property debt, with some owners opting to take that path to kickstart talks to renegotiate terms with lenders. More than $650 billion of commercial property debt is expected to mature in 2024, according to Mortgage Bankers Association data.

The Blackstone trust hasn’t yet shown signs of distress because it has been modifying troubled loans by extending maturities and allowing payment in kind, Block wrote in a report published on his website. Block estimates that at least nine loans totaling $1.6 billion, or about 6% of the trust’s net book value, have already been modified through the third quarter of this year.

Block, 46, built his reputation as a short seller with bets against companies including Sino-Forest Corp, which he accused of exaggerating its assets. The Chinese company filed for bankruptcy protection 10 months after his report was published. He’s also made several bets against European real estate companies, shorting both Corestate Capital Holding SA and the bonds of Vivion Investments.

Real estate has been a theme for Muddy Waters this year. In November the firm said it was shorting the bonds of CPI Property Group SA. The Eastern European landlord said Block’s firm “purports to conduct research but thrives off shorts and explosive headlines.”

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"Over the next decade, the U.S. population over the age of 75 will increase by 45%, growing from 17 million to nearly 25 million. And many of those people are expected to struggle financially. The report notes that in 2021, nearly 11.2 million older adults were “cost burdened,” which means they spend more than 30% of their income on housing."

https://fortune.com/2023/12/02/housing-baby-boomers-aging-homelessness-elderly/

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