patrick.net

'Grace's Oasis' homeless camp. What could possibly go wrong? Most homeless camps achieving size eventually burn down do to people not safely using heating, cooking, or just passing out with lit pipes, cigarettes etc.

HeadSet says

Designed for single family use. Can be used otherwise, just like a screwdriver does not only have to be used to drive screws.

So its lawful for more than 1 family to live in a single family house? Do laws prohibit renting out of a single family home in such a way that the owner and an another family lives in a single family home? Do laws specifically prohibit single family homes to be used for business purposes? I know that Asian businesses use their stores as a part time or full time residence. They convert the back of the store to an efficiency apartment like space.

gabbar says

So its lawful for more than 1 family to live in a single family house?

Yes, although some localities limit the number of unrelated people who can leave in a single-family dwelling. Prince Willaim County, Va tried to make that limit 12, but even that generous number was struck down by a court.

gabbar says

Do laws specifically prohibit single family homes to be used for business purposes?

That would be zoning laws. Residential zoned houses are not supposed to be used for commercial purposes.

https://www.reddit.com/r/REBubble/comments/w89voz/i_backed_out_of_builder_contract_made_a_low_offer/

I Backed Out of Builder Contract. Made a Low Offer on Another Home and Got It Accepted.
I was in contract with a builder for a 500K home in April. There were already some issues with this builder that made me want to cancel. After reading this forum everyday for the past 3 months and my own research on the current market, I decided to cancel. I tried everything I can, including pleading with the builder to give me back half of the deposit. At the end, I lost the full deposit of 15K. It sucked, but I knew it was the right decision.

Yesterday, I made an offer on a home that was just completed by another builder. Similar build, but better location, better community amenities, and better priced. This is near Indianapolis. Asking price was 386K. I offered 370k and asked to throw in a new fridge. Seller countered at 374K. I accepted. So yes, the housing market price is going down and you can make a lower than asking offer. This home was back on market after the previous buyer backed out. There are quite a few new builds that I see back on the market in the area. Yes it confirms that builders are having more contracts being canceled.

What I learned from this experience is:

1). Don't ever buy from a national builder because their contract is made to protect them and only them. I had no choice because my husband only liked new construction homes.

2). Don't ever use a realtor. My realtor kept telling me to not give lower than asking offers. She was annoyed that I made low ball offers at several homes. When she realized that I was canceling a 500K home to look at homes under 400K, she tried hard to convince me that other homes have low re-sell values and other flaws.

3). If you can subscribe to a legal plan, do it. My husband's employer offered a discounted legal plan (through a major life insurance company). He can pay about $8 a month and get access to most lawyer services for free, which include real estate contracts. I only found out about this recently and I will be using this in the future if I need to. No need for useless realtors.

zzyzzx says

Don't ever use a realtor. My realtor kept telling me to not give lower than asking offers. She was annoyed that I made low ball offers at several homes. When she realized that I was canceling a 500K home to look at homes under 400K, she tried hard to convince me that other homes have low re-sell values and other flaws.

Buyer's agents don't work for the home buyer (irrespective of what they say). They work for themselves first and are strongly aligned to the seller. Their goal is their commission.

zzyzzx says

Don't ever buy from a national builder because their contract is made to protect them and only them.

All contracts will be written to protect the builder.

zzyzzx says

I just looked up this listing. Something is amiss. They dropped the price by $350,000?

https://nypost.com/2022/07/26/us-home-prices-to-plunge-substantially-on-cratering-demand/

WineHorror1 says

zzyzzx says

I just looked up this listing. Something is amiss. They dropped the price by $350,000?

Fat finger typing problem?

WineHorror1 says

They dropped the price by $350,000?

Motivated seller?

WineHorror1 says

I just looked up this listing. Something is amiss. They dropped the price by $350,000?

May have been repossessed by the bank and the bank is doing some insider trading selling it below value at the expense of all the equity the previous owners put up. Saw it all the time in 2008 in Silly Con Valley.

richwicks says

WineHorror1 says

I just looked up this listing. Something is amiss. They dropped the price by $350,000?

May have been repossessed by the bank and the bank is doing some insider trading selling it below value at the expense of all the equity the previous owners put up. Saw it all the time in 2008 in Silly Con Valley.

How is that insider trading if it's for sale to the general public?

.

https://nypost.com/2022/07/26/us-home-prices-to-plunge-substantially-on-cratering-demand/

The article says prices are overpriced by about 20% based on affordability. That coincides with the 30 year mortgage rate going up about 2% to 5.5%.

I remember my mortgage broker telling me every 1% increase in the 30 year mortgage rate means a 10% drop in price based on affordability.

A 20% drop in home prices will wipe out most of the COVID pandemic gains.

.

I know he was driven off the site but I still like listening to Logan Mitsubishi (don't care enough to look up the spelling of his last name). He says that there will be no "housing crash" in the sense of prices dropping through the floor unless/ until there is normal inventory. Keep in mind that Millennials outnumber boomers and there's an even larger cohort coming right behind them (Z). It's demographics baby.

He called the moderation in price increases before the fed started hiking and views higher mortgage rates as absolutely necessary and good to get the system back in balance. Note that his idea of a healthy market is a predictable/ stable amount of business YOY - his reference is "the industry" and not buyers and sellers. He thinks the current market with the huge increase in prices as unsustainable and unhealthy.

He still thinks this is nothing like 2005-2008 because buyers balance statements are hella strong and there won't be any credit default driven increase in inventory. Keep in mind that despite the hysteria, home prices are not falling (again, all real estate is local) - they are simply moderating from 15%YOY increase to 3%YOY increase.

So yeah for now I'm drinking his kool-aid.

We'll see. If the labor market stays strong I think he's right (prices stabilize but there is no precipitous drop). However if people start losing jobs then we may have a credit default situation, and in a hurry.

1337irr says

Fat finger typing problem?

100%. I'll admit I've fucked up and done the same putting listings in MLS. That's the problem with IDX system of sending out listing info to 3rd party sites. You can't correct the mistake on all the other sites. I could call the MLS/association and have them update the database to fix the original price that other realtors see. But I can't call 1,000 other sites and fix the mistake. You HAVE to be 100% careful entering the price. It could tarnish the value potentially for a decade. Like "why did they cut it $300k in 2017" and the buyer gets concern.

I miss not having my MLS access as I just let my license lapse, but it was approaching $2K year and I wasn't gaining anything from it. I also no longer have legal consequences with real estate buying and selling. I can be shady within normal consumer laws now. Basically I can buy straight from other owners and not disclose I'm a RE agent (required by law in most states). I'll also never need a realtor again either. I got my PhD in the business basically.

stfu mentions RE is local. That's not just a Realtor term/phrase. It's true. No one is building in my area for the most part. If they are, it's owner occupied and likely coming from a rental. So it's not really adding to the housing inventory as someone will rent the place they vacated. Basically no builders are throwing up houses without a buyer anymore (in my area). If that starts happening in your area be concerned. That's like a builder putting $1M on black at the roulette table.

Basically anything being built is accounted for. Moving from a rental or selling your place to a new owner. No new inventory was really created. That's why I don't see a housing crash anytime soon, especially with lending being normal. Millennials I could see problems in the 2030-40's though. Once the boomers really start dying off and estates selling their parents homes, yet they mostly own homes already.

https://www.newsweek.com/us-facing-perfect-storm-2008-like-housing-crisis-economist-1728011

he U.S. is facing a "perfect storm" for a housing crisis similar to that of 2008, according to Jose Torres, a senior economist for Interactive Brokers.

Torres made the comment during an interview with Insider, and his analysis comes as concerns over the economy and housing market remain a key issue for millions of Americans. Housing prices increased throughout the first half of 2022, as inflation continues to affect nearly every sector of the economy, but the prices could soon crash, Torres warned.

He predicted that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.

https://www.floridarealtors.org/news-media/news-articles/2022/07/s-fla-housing-sales-drop-inventory-grows

In S. Fla., Housing Sales Drop as Inventory Grows

Patrick says

He predicted that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.

Early 2023 is when sheet will hit the fan, according to Michael Burry.

WineHorror1 says

How is that insider trading if it's for sale to the general public?

It isn't for sale to the general public. They were listed, but you could not purchase it. Basically, a bank insider was selling it to a friend, or family member or something. By law (well back then, now I don't know) if a repossessed home was sold above the amount of money owed on it, that amount had to be returned to the previous owner. As long as the bank made back their initial loan, they don't care, so they arranged crooked deals.

gabbar says

Patrick says

He predicted that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.

Early 2023 is when sheet will hit the fan, according to Michael Burry.

What are the chances he's right twice?

https://betterdwelling.com/city/toronto/toronto-real-estate-developers-sold-zero-new-single-family-homes-last-month/

Toronto Real Estate Developers Sold Zero New Single-Family Homes Last Month

https://www.redfin.com/news/metros-recession-risk-housing-downturn-2022/

Pandemic Homebuying Hotspots With Steep Price Increases Most Susceptible to Housing Downturn in a Recession

Riverside, Boise, Phoenix and Tampa are among the markets where homeowners stand to lose some of the value they gained over the past two years. Still-affordable Rust Belt metros like Cleveland and Buffalo are most resilient.

zzyzzx says

Riverside, Boise, Phoenix and Tampa are among the markets where homeowners stand to lose some of the value they gained over the past two years.

They went up insane high to begin with. They should come back to normal level.

richwicks says

if a repossessed home was sold above the amount of money owed on it, that amount had to be returned to the previous owner.

True, but a rare circumstance. If the house was worth more than the loan, the owner would have sold it rather than let it be foreclosed. Throwing the keys to the bank happens when the house is not worth what is owed on it.

https://rudy.substack.com/p/zoomtown-rats

Fed rate hike to unleash AVALANCHE of home foreclosures and market drops"
https://www.brighteon.com/1b2255e8-2905-4a98-9af3-1aab13358967
Let the paranoia begin! "Yesterday the Fed hiked the interbank lending rate by 75 basis points (0.75%), which will lead to retail loan rates rising across the board. This is all part of the Fed’s attempt to reel in rising inflation, which the dishonest government claims is at around 9% but the rest of the world already understands to be closer to 20%."

https://archive.ph/f0JuP

Ceffer says

Fed rate hike to unleash AVALANCHE of home foreclosures and market drops"
https://www.brighteon.com/1b2255e8-2905-4a98-9af3-1aab13358967
Let the paranoia begin! "Yesterday the Fed hiked the interbank lending rate by 75 basis points (0.75%), which will lead to retail loan rates rising across the board. This is all part of the Fed’s attempt to reel in rising inflation, which the dishonest government claims is at around 9% but the rest of the world already understands to be closer to 20%."

But @Wookieman says home price declines are unpossible. He used to be a real estate office manager so, I think he knows better than these reporters do.

HeadSet says

True, but a rare circumstance. If the house was worth more than the loan, the owner would have sold it rather than let it be foreclosed. Throwing the keys to the bank happens when the house is not worth what is owed on it.

Very true as this is what happened when housing prices crashed 2008 to 2011 and most homes were underwater (equity was less than outstanding mortgage).

A lot of the underwater homes had 3 year ARMs. Notice you don't see 3 year ARMs but there are 5 year ARMs.

Realtors, take note! Wet pavement suggests wet pussy.

B.A.C.A.H. says

Of course they will take the most they can get. But bidding wars etc are not their fault: it's the buyers' fault for overpaying.

The Freakonomics book (or one of its multiple sequels) had a chapter discussing that real estate agents take longer to sell their own houses compared to selling the houses of clients. The takeaway was that when their own house is on the line, agents take their time and get the highest price.

With that in mind as well as personal observations, I gather that the real estate agents purposefully list low sales prices, get a bunch of anxious buyers interested, and then create a feeding frenzy of over-bidding so as to sell the property at a decent (but not highest) price as quickly as possible. After all, both the buyer's and seller's agent have a vested interest in transacting as quickly as possible, collecting that juicy commission, and moving on to the next transaction. "Bidding wars" achieves this very well.

Here in my part of Sunnyvale, when things are really hopping, a property goes for sale listed $200k low, has open house on weekend (this is just for agents to find new clients, as the real viewing is with an agent who has the combination to the lock box for private showing), bids are taken for the next few days, and the house sells "$200k over asking" that same week. $25k commissions for both agents thank you very much! Most agents spend most of their time trying to find new clients, not actually doing useful work.

Al_Sharpton_for_President says

Realtors, take note! Wet pavement suggests

This is one of the new techniques to fool new buyer as if it is next to a pond!

zzyzzx says

This listing makes no sense. Buy $400k and relish it for $412k? That doesn’t even cover the commissions and closing costs. Where’s the profit?

ad says

HeadSet says

True, but a rare circumstance. If the house was worth more than the loan, the owner would have sold it rather than let it be foreclosed. Throwing the keys to the bank happens when the house is not worth what is owed on it.

Very true as this is what happened when housing prices crashed 2008 to 2011 and most homes were underwater (equity was less than outstanding mortgage).

A lot of the underwater homes had 3 year ARMs. Notice you don't see 3 year ARMs but there are 5 year ARMs.

Banks are a lot smarter now unlike the previous housing bubble. 3/1 ARMs, 5/1 ARMs, or 7/1 ARMs are no longer being underwritten like before. Banks use a much higher qualifying rate to underwrite the loans. They want to be sure the buyers are well qualified in a higher interest rate environment.

With the way these loans are currently being underwritten, I guess banks expect interest rates will come back down in the coming years. Here’s something we recently got from our lender.