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housing prices peak 2


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2022 Apr 29, 9:29pm   607,245 views  5,687 comments

by AD   ➕follow (1)   💰tip   ignore  

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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net

Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.

Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.

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4020   AD   2024 Jan 1, 1:35pm  

Eman says

The housing market has been having low inventory due to affordability and existing owners don’t sell as they can’t afford the new mortgage payments if they move.


I read that it costs at least $100,000 before even the shovel hits the dirt to build a single family home in California.

The costs to develop are getting way out of hand, and a lot of that is not due to the cost of land.

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4021   Eman   2024 Jan 1, 1:48pm  

ad says

Eman says


The housing market has been having low inventory due to affordability and existing owners don’t sell as they can’t afford the new mortgage payments if they move.


I read that it costs at least $100,000 before even the shovel hits the dirt to build a single family home in California.

The costs to develop are getting way out of hand, and a lot of that is not due to the cost of land.

.

It’s true. The cost of designing, engineering, city permits and fees is easily $100k before we break ground to build a house. Also, the city requires us to install fire sprinklers, build on-site water reservoir to absorb certain amount of water run-off, etc… these requirements were over a decade ago. Not sure what else the cities require now like net zero electricity BS, etc….Basically, all the requirements make the cost to build extremely expensive.
4022   AD   2024 Jan 1, 3:16pm  

Eman says


The cost of designing, engineering, city permits and fees is easily $100k before we break ground to build a house.

Basically, all the requirements make the cost to build extremely expensive.

.

yes, due to California building code and zoning

in Florida, the builders leverage economies of scale as far as fixed costs and the state is a lot more pro residential development

,,,
4023   AD   2024 Jan 5, 11:35am  



4024   Eman   2024 Jan 5, 2:19pm  

ad says





It’s interesting how the top markets are always the cheap/underperforming markets while the expensive markets are always the outperforming markets.
4025   AD   2024 Jan 6, 10:21pm  

housing prices primarily peaked in early 2022... income increased in 2022 and 2023...hopefully hope prices stay the same and income increases in 2024...

three years of income increases (2022-2024) and a 30 year mortgage rate of 5.5% will mean home prices will not need to decrease as much as far as mortgage affordability standards...


4026   ForcedTQ   2024 Jan 6, 10:54pm  

ad says

Eman says



The cost of designing, engineering, city permits and fees is easily $100k before we break ground to build a house.

Basically, all the requirements make the cost to build extremely expensive.

.

yes, due to California building code and zoning

in Florida, the builders leverage economies of scale as far as fixed costs and the state is a lot more pro residential development

,,,


All of this is why you won’t see Actual affordable housing built in CA ever again….
4029   zzyzzx   2024 Jan 10, 11:56am  

https://ottawa.ctvnews.ca/home-prices-in-carleton-place-drop-significantly-1.6718571

Carleton Place homes sold for $400,000 under original selling price
4030   zzyzzx   2024 Jan 10, 12:00pm  

https://www.reddit.com/r/RealEstate/comments/192s3xt/appraisal_came_in_47k_lower_than_contract_price/

Appraisal came in 47K lower than contract price. How does this happen??
4031   DOGEWontAmountToShit   2024 Jan 10, 12:50pm  

zzyzzx says

https://ottawa.ctvnews.ca/home-prices-in-carleton-place-drop-significantly-1.6718571

Carleton Place homes sold for $400,000 under original selling price


Jan of last year a new law in Canada came into effect that restricts real estate foreigners can buy.

This is the result.
4032   Eman   2024 Jan 12, 7:20pm  

30-year fixed mortgage rate is below 6% for the Bay Area now. I guess lenders anticipate the Fed is done with the rate hikes and will cut rate soon.


4033   AD   2024 Jan 12, 10:15pm  

Marco Cooper, 3154198

Coastal Sun Realty LLCEman says


30-year fixed mortgage rate is below 6% for the Bay Area now. I guess lenders anticipate the Fed is done with the rate hikes and will cut rate soon.


My forecast still is that the 30 year rate will settle around 5.5% for 2024, and about 1.5% above the 10 Yr Treasury.

.
4034   SunnyvaleCA   2024 Jan 12, 10:25pm  

Eman says


30-year fixed mortgage rate is below 6% for the Bay Area now.

To be fair, that 5.875% rate requires you pay 0.25 points up front. An APR "as low as" 5.992% is breaking the 6.0 barrier by the barest of margins.
4035   AD   2024 Jan 12, 10:32pm  

SunnyvaleCA says

Eman says

30-year fixed mortgage rate is below 6% for the Bay Area now.

To be fair, that 5.875% rate requires you pay 0.25 points up front. An APR "as low as" 5.992% is breaking the 6.0 barrier by the barest of margins.


What I would do is get 2 discount points costs along with other closing costs rolled into my VA mortgage. If we buy this year and the 30 yr rate is 5.5%, then we'll buy 4 discount points to get to a 4.5% rate.
.



.
4036   AD   2024 Jan 14, 8:38am  



4037   Eman   2024 Jan 14, 10:10am  

In the current environment, I’m not sure it’s prudent to buy down rate as history suggests there’s a higher chance of interest rate dropping in the coming years rather than rising. Paying 4 points is a lot of money to buy down 1%
4038   Eman   2024 Jan 14, 10:15am  

SunnyvaleCA says

Eman says



30-year fixed mortgage rate is below 6% for the Bay Area now.

To be fair, that 5.875% rate requires you pay 0.25 points up front. An APR "as low as" 5.992% is breaking the 6.0 barrier by the barest of margins.

Rates were floating around 7.5% and higher just a couple months ago. The Fed hasn’t done anything, and rates fell 150 bps since. I just want to share the dynamic of interest rates. This should provide some tailwind to hold up the housing prices.

A recession is likely needed to see significant housing price drop at this point.
4040   Eman   2024 Jan 14, 2:24pm  

“San Jose rent growth in 2023 pacing below last year. Twelve months into the year, rents in San Jose have fallen 0.7%. From January to December 2022 rents had increased 6.1%.”

“Santa Clara County rent growth in 2023 pacing below last year. Twelve months into the year, rents in Santa Clara County have fallen 1.0%. From January to December 2022 rents had increased 8.7%.”
4041   AD   2024 Jan 14, 2:43pm  

Eman says


In the current environment, I’m not sure it’s prudent to buy down rate as history suggests there’s a higher chance of interest rate dropping in the coming years rather than rising. Paying 4 points is a lot of money to buy down 1%


Eman, the cost is 4% of the mortgage when you buy down 4 points. It is equivalent to dropping the price 10% (assuming no down payment) and the payback period is around 6 years. If I could buy down to 5% from 6% rate for the 30 year mortgage, then I would refinance likely when the rate drops below 3.75%.
4042   GNL   2024 Jan 14, 2:44pm  

I posit that it is much more profitable to increase prices based on scarcity. With scarcity, there's no effort and prices can go to infinity.
4043   AD   2024 Jan 14, 2:45pm  

Eman says

“San Jose rent growth in 2023 pacing below last year. Twelve months into the year, rents in San Jose have fallen 0.7%. From January to December 2022 rents had increased 6.1%.”

“Santa Clara County rent growth in 2023 pacing below last year. Twelve months into the year, rents in Santa Clara County have fallen 1.0%. From January to December 2022 rents had increased 8.7%.”


Eman, Venture capital money is drying up more in Silicon Valley compared to 2019-2022. Layoffs are abound in Silicon Valley 😕
4045   DOGEWontAmountToShit   2024 Jan 16, 8:33am  

ad says

Eman, Venture capital money is drying up more in Silicon Valley compared to 2019-2022. Layoffs are abound in Silicon Valley 😕


Yup. It's really bad. Almost dot.com bust nuclear winter bad.

And contributing to that is the AI scam. That the new 'thing' in SV.
4046   Eman   2024 Jan 16, 10:51pm  

We all know it, but worth repeating. A picture is worth a thousand words. The link is below too.



https://x.com/charliebilello/status/1747316842861838567?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q
4047   GNL   2024 Jan 17, 5:55am  

Eman says


We all know it, but worth repeating. A picture is worth a thousand words. The link is below too.



https://x.com/charliebilello/status/1747316842861838567?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q

What would you, as an investor, do going forward? Reading the tea leaves (the totality of the economy and the political and financial atmosphere) I'm pretty sure this is the new normal. I believe the homeownership rate is going to fall for years to come.

It may tick up and down from time to time but, the trajectory = down for a long time. IMO, of course.
4049   RWSGFY   2024 Jan 17, 8:46am  

Eman says

These analysts are hilarious. The housing market is bottoming. 😂

https://www.marketwatch.com/story/buy-home-depots-stock-because-the-housing-market-is-bottoming-analyst-says-732d5268?siteid=msnheadlines


Good candidate for the predictions thread.
4050   Eman   2024 Jan 17, 9:15am  

GNL says

Eman says



We all know it, but worth repeating. A picture is worth a thousand words. The link is below too.



https://x.com/charliebilello/status/1747316842861838567?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q

What would you, as an investor, do going forward? Reading the tea leaves (the totality of the economy and the political and financial atmosphere) I'm pretty sure this is the new normal. I believe the homeownership rate is going to fall for years to come.

It may tick up and down from time to time but, the trajectory = down for a long time. IMO, of course.

Be patient and wait for opportunities. No reason to force any deals when there are no deals.
4051   AD   2024 Jan 17, 11:17am  

.

Increase income by +3% annually while hold home prices and 30 yr mortgage rate constant to achieve more housing affordability
.



.
4052   gabbar   2024 Jan 17, 11:23am  

There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !
4053   AD   2024 Jan 17, 11:30am  

gabbar says

There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !


Mainstream media is doing what it can for the Democrats going into this November elections.

.
4054   Eric Holder   2024 Jan 17, 12:15pm  

gabbar says

There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !


Noooooooooo!
4055   SunnyvaleCA   2024 Jan 17, 12:55pm  

gabbar says

There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !

Other than gasoline and used vehicles, too bad poor Americans aren't buying the (few) things whose prices are actually falling. Even those two categories are only falling from all-time highs to being merely near-all-time highs. As for food, clothing, and rents... up up and away!
4056   SunnyvaleCA   2024 Jan 17, 1:03pm  





If the median-income person is a house or apartment renter forever — as has been the case in much of Europe forever — does comparing median housing payment to median income make any sense? Maybe the comparison should be to median income of house owner. I also hear about the trend of investors buying up housing. This will make even more people renters for life and further reduce the predictive utility of the statistic.
4059   GNL   2024 Jan 17, 1:27pm  

gabbar says

There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !

Only the poor benefit from falling prices? LOL

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