patrick.net

zzyzzx says

As long as they can sell more profitable luxury houses, they have no incentive to build affordable housing.

The desire in a big home is real estate brainwashing and might be mostly an American phenomenba.

When rates actually went up the following day to 6.15% after the Fed’s announcement, there was lots of splainin’ to do. Although rates would settle at 6.06% on Friday night, the cracks in the narrative had been widening since late May when mortgage rates started their move down. Every realtor, broker, housing industry publication has made the innuendo or explicit case that when “rates” go down everyone was going to be fine, and the housing engine would restart. Additionally, if you ask one of these industry insiders about mortgage rates, they refer to the latest news from the Fed. No matter how many times I have pounded the table that the Fed does not control mortgage rates, the bond market does, those in the industry failed either to grasp or overtly acknowledge this fact. Do the Fed’s actions have an impact? Sure, but the bond market had already front-run the move with large drops in August when the Yen Carry Trade started to unwind. The confusion out there has gotten so bad that Jerome Powell himself had to state explicitly from the podium that “he can’t really speak to mortgage rates.”

https://open.substack.com/pub/m3melody/p/wait-what

He could control mortgage rates if he wanted to by simply buying a trillion or so MBS.

He's not desperate yet because the Federal government and corporations are expanding the amount of bonds at a reasonable rate.

HeadSet says

I would never prefer a trailer to a built house, but these trailers I have been in are quite nice. They look the same inside as other modest single-story homes, with a similar layout kitchen, bath and bedrooms. You just do not get an attic or basement.

You described an Eichler, lol.

HeadSet says

She was able to buy an acre of land and put a trailer on it.

And it gets a pink slip from the DMV so is not counted as a perm improvement on the property tax assessments. Need to pay more for the loan on them though.

You can have them added as a property improvement, tho. Involves an affidavit that you won't move it off the property and you surrender the pink slip to the property tax authority. Ppl only do that to get better financing for the trailer.

Eric Holder says

You described an Eichler, lol.

Eichlers can have basements/attics tho. Not common, but possible.

DemocratsAreTotallyFucked says

Eric Holder says

You described an Eichler, lol.

Eichlers can have basements/attics tho. Not common, but possible.

I thought they weren't supposed to have the former by definition and the latter are add-ons. There are some Eichlers in Bay Area with added 2nd stories, attics and such, but I never heard of basements in these. The whole "slab-on-grade foundation" thing was pioneered (or put into wide use) by Eichler, no?

DemocratsAreTotallyFucked says

And it gets a pink slip from the DMV so is not counted as a perm improvement on the property tax assessments.

I may have been using the term "trailer" wrong. These homes I am talking about are called "off frame" where two halves are brought to a site and assembled on a foundation. The roof is normal asphalt shingle. That example photo in my above post is one of those off frames.

HeadSet says

The roof is normal asphalt shingle

I was up on the roof today cleaning the gutters to get ready for the wet season.

The 17 years old shingles look a bit frayed at the edges. Supposedly it's a 20 year roof. Maybe we can eek out year 21. Time to start setting aside some money for this inevitability now. Because homie don't borrow.

B.A.C.A.H. says

Because homie don't borrow.

Same here. The only time I borrowed was for my first car and my first house. Paid cash for all cars and residence homes since. I did borrow to biy rental houses, but that is a business and not personal consumption.

HeadSet says

B.A.C.A.H. says

Because homie don't borrow.

Same here. The only time I borrowed was for my first car and my first house. Paid cash for all cars and residence homes since. I did borrow to biy rental houses, but that is a business and not personal consumption.

Who does the note cite as the party who will pay? You or the “business” that is a Corp? Think about risk and what that looks like if people stop paying your mortgage.

HeadSet says

DemocratsAreTotallyFucked says

And it gets a pink slip from the DMV so is not counted as a perm improvement on the property tax assessments.

I may have been using the term "trailer" wrong. These homes I am talking about are called "off frame" where two halves are brought to a site and assembled on a foundation. The roof is normal asphalt shingle. That example photo in my above post is one of those off frames.

When I was a kid I was forced labor for my dad to build two of those. Site prep mainly and finish work once joined. While nicer than a trailer it's kind of shitty.

I toured the Forest River factory in Indiana that makes a ton of them. Never let them put finishes in them. Have your own contractors come in and do flooring, baths, kitchen cabinets, etc. Hell even windows. Just get the frame. My sister still owns one of them. That why I referred to them as trailers because the finishes are almost always trash.

You could make one pretty nice with just the shell doing your own finishes. Especially if handy. The construction is actually surprisingly solid though on the frame. Better than most stick builders on site.

HeadSet says

I may have been using the term "trailer" wrong. These homes I am talking about are called "off frame" where two halves are brought to a site and assembled on a foundation. The roof is normal asphalt shingle. That example photo in my above post is one of those off frames.

'HUDular' manufactured homes? Single wide, double wide, triple wide? Correct?

HeadSet says

I may have been using the term "trailer" wrong. These homes I am talking about are called "off frame" where two halves are brought to a site and assembled on a foundation. The roof is normal asphalt shingle. That example photo in my above post is one of those off frames.

Got it. Okay, I thought it was an RV you were talking about. Big restrictions in many states on those, including in the unincorporated county areas, to give an advantage to big developers and realtors. It sounds like you are referring to a modular home, which are generally well built and a good value. For $100k you can have a new modest house, and $150k gets you a really nice one, providing you can handle the zoning laws.

This is one of Blackrock's LLC owned properties.


I suspect the biggest price drop may have an uninsurability/flood zone issue, or perhaps a personal crisis.

ForcedTQ says

Who does the note cite as the party who will pay? You or the “business” that is a Corp? Think about risk and what that looks like if people stop paying your mortgage.

The point had to do with borrowing for mere consumption verses borrowing to fund a business. Business risk is another issue.

AmericanKulak says

For $100k you can have a new modest house, and $150k gets you a really nice one

Yes, the ones build as two halves and trucked to the site and buttoned together. There is also a modular home builder here that does much more upscale, where the house is factory built in many sections and assembled piece by piece with a crane. The foundations for these have to be perfectly level and all walls in the finished house are absolutely square.

Love it! Those modulars really are something. Some have a great deal of Sq Ft. This tech room one is great for the kids...
https://www.floridamodularhomes.net/manufactured-and-modular-home-floorplans/the-altitude/

Here are some latest RV/Trailer Mobile Homes, which is why I wonder why anybody is into Tiny Houses that are generally harder to move and hook up.
https://rv.campingworld.com/rv/2415101?storecode=KS&scpc=lia-gpm-cwrv-nat&gad_source=1&gclsrc=ds

AmericanKulak says

I wonder why anybody is into Tiny Houses

Just a fad. And yes, they make no sense when house trailers and motor homes have been around since the 1950s.

HeadSet says

anKulak says

I wonder why anybody is into Tiny Houses

Just a fad. And yes, they make no sense when house trailers and motor homes have been around since the 1950s.

Tiny Homes are well insulated and is code built similar to a single family detached home. Its like a ~120 square foot stick home on a metal frame.

.

West Coast of Florida getting creamed.

Inventory much HIGHER than pre-pandemic.

AmericanKulak says

West Coast of Florida getting creamed.

Opposite here in my town. 2 houses for sale. Price history included. This goes to show different locations have different trends.

I think coastal areas are going to take the beating on this one including TX. TN and ID will layer on top of it. I still don't see any downturn being all that bad.

I wonder if the coming storm will annoy housesellers already wanting out.

@AD It's supposedly going straight to Talahassee and will only brush the West Coast. Still, there will be rain and at least some flooding for sure

The largest insurer in Florida claims that a 93% rate increase is necessary
https://floridainsider.com/business/largest-florida-insurer-claims-that-a-93-rate-increase-is-needed/

Insurers use drone to cancel Florida homeowner's policy, citing his 6-year old roof
https://finance.yahoo.com/news/florida-homeowner-dropped-insurer-over-105500151.html

Keeping in mind Florida property insurance is already much higher than the national average, in a state infamous for low wages, while housing prices approach expensive average East Coast Levels.

Percentage change in housing inventory (Q1 2023–Q1 2024): +34.7%
Total change in housing inventory (Q1 2023–Q1 2024): +36,837
Months’ supply (Q1 2024): 5.2
Months’ supply (Q1 2023): 3.8
Median sale price (Q1 2024): $409,448
Median sale price (Q1 2023): $393,866
https://www.kilgorenewsherald.com/florida-sees-the-nations-largest-increase-in-housing-inventory/article_78751b48-697e-5acc-bdb9-c243a64cd623.html

A much better indicator right now would be Median LIST price. Because in June, 56,000 sales contracts were cancelled, an all time record for any June in recorded history.
https://www.youtube.com/watch?v=oznLkWv6u4c

Blackrock and Wall Street abandoning the R/E Market in droves.
https://www.youtube.com/watch?v=G2BZbCbGN0g

AmericanKulak says

Keeping in mind Florida property insurance is already much higher than the national average, in a state infamous for low wages, while housing prices approach expensive average East Coast Levels.

So the bloom is off the Florida rose then? If it's not cheap to live in anymore, what's the point of suffering the heat, humidity and storms? At this point it's better to move to Indiana and just fly to the beach now and then Wookie-style.

AmericanKulak says

The largest insurer in Florida claims that a 93% rate increase is necessary
https://floridainsider.com/business/largest-florida-insurer-claims-that-a-93-rate-increase-is-needed/

Insurers use drone to cancel Florida homeowner's policy, citing his 6-year old roof
https://finance.yahoo.com/news/florida-homeowner-dropped-insurer-over-105500151.html

Keeping in mind Florida property insurance is already much higher than the national average, in a state infamous for low wages, while housing prices approach expensive average East Coast Levels.

I have a friend that moved to Fort Myers right before Hurricane Ian. He bought a foreclosure and had to get the woman out of the home. He decided to forgo property insurance and got creamed. He is still going without property insurance. He’s on a canal in Fort Myers where even a rain storm makes his front lawn become a pond. Oh boy, I wonder if he’s gonna get creamed again.

GNL says

I have a friend that moved to Fort Myers right before Hurricane Ian. He bought a foreclosure and had to get the woman out of the home. He decided to forgo property insurance and got creamed. He is still going without property insurance. He’s on a canal in Fort Myers where even a rain storm makes his front lawn become a pond. Oh boy, I wonder if he’s gonna get creamed again.

Waterfront property is "disposable property." Way back in the day, the rich people would buy property on the highest hill to build. they'd have to rebuild it after the last Nor'Easter.

There's a reason why most coastal real estate was vacant except for summer shacks until after WWII and, more importantly, the hurricane windfall of nearly 20% non-callable 30-year Treasury bonds for the last 40 years was flush enough to backstop this profligacy. Now, Finally, insurance will cost what it REALLY costs, and the coastal mansions will disappear over the next generation.

FYI - It's a REALLY bad time to consider an actuary position.

Eric Holder says

So the bloom is off the Florida rose then? If it's not cheap to live in anymore, what's the point of suffering the heat, humidity and storms? At this point it's better to move to Indiana and just fly to the beach now and then Wookie-style.

Met a guy and gal from Oklahoma. Welder and LPN. She said they are leaving as soon as the lease is up after their first year here.

Wages are only $1 more in Florida for LPNs but actually LESS for Welders because Oklahoma has some oil and industry - but the cost of living from groceries to housing is much, much higher. They also experienced their first Florida summer.

Every Arkie-Oakie I've ever met are pretty cool people I must say.

Eric Holder says

At this point it's better to move to Indiana and just fly to the beach now and then Wookie-style.

For the win! So many cheaper places to live. Most people don't even take time off anyway. Usually a weekend trip. If you have off road vehicles you can go here in Indiana. https://www.badlandsoffroad.com/

Wisconsin has a massive trail system for summer and winter seasons for off roading and snowmobiling. Plenty of lakes to fish in summer or winter. Tons of good hunting opportunities if you're into that. For the midwest good skiing and snowboarding in a few spots.

IL is underrated because of Chicago Democrats. I will bitch about it, but 50-60+ miles outside of Chicago you can get solid houses for $150k, but still close to that airport to go to the beaches or where ever when you have a week or two off.

We're in a raffle for a $25k side by side. 500 tickets only. I think the wife got 3 tickets. Gambling and fundraising. No expectation of winning. My wife wins shit though. We're approaching 15 TV's. She wins them at work golf outings. We have three 50" or larger TV's in the boxes just sitting in our laundry room.

I get people don't like winter, but it's sooooooo much cheaper in the midwest. All my tech friends work from home, so location isn't a biggie. Still want to be within 60 miles of a decent airport. IL it's Chicago, Quad Cities and Peoria. There's St. Louis on the IL side but that airport is a shit hole of an armpit. Kansas city goes down as the shittiest airport. Saint Thomas is bad, but you get off the plane and you're in the Caribbean. Not much to complain about. Though they are upgrading it quite a bit. My wife just booked a vacation and I have no fucking clue where we're going. As long as there's a beach and drinks. Or mountains.

That's where I'm at now, with the oil patch kids in Oklahoma.. Property prices raised up in small town USA, but they had a much smaller starting base. Was in Tampa back in June/July for a month or so. Even with the humidity it was nicer than the Phoenix heat then. Didn't really look at property prices there 'cause the insurance whammy was just getting heard of along with the condo assessment thingy.,

I still think people have lost their minds when it comes to land prices in Phoenix. In Chandler (a suburb), land is going for $300k an acre for frigging desert.

Besides Florida, I haven't really seen any big amounts of properties being put up for sale.

Another month...another record high for the national housing market.

https://www.msn.com/en-us/money/realestate/us-home-prices-hit-yet-another-record-high/ar-AA1rc2ff

@stereotomy, tell me more about the hurricane windfall please.

GNL says

stereotomy, tell me more about the hurricane windfall please.

When Volker raised 30 year Treasury rates above 15% back in the early 80's in a desperate bid to it kill inflation, it set up a dynamic where insurance companies could buy high-yielding long bonds to finance their operations. As rates declined over the next 30 years, they reaped the double windfall of high yields and massive capital appreciation.

Now, they are stuck with low-yield paper bought during the ZIRP regime. They earn no interest and their bonds are all underwater now that interest rates are rising - they're doubly fucked.

AmericanKulak says

She said they are leaving as soon as the lease is up after their first year here.

Here's my Tale of Two Cousins

Sibling retirees from high-tax northeast retired on the West Coast of Florida in recent years.

Sibling #1 & spouse on fixed incomes public school teacher career pensions. Bought their forever home near Ft Meyers area. With a mortgage? I dunno, that's too personal for me to ask. Shared on social media hurricane photos battening down hatches. Fled back to N.E. to un-retire last year. Did they sell the Florida home? I didn't ask.

Sibling #2 affluent retired international arms merchant (no kidding). Cashed out of the appreciated N.E. home. Renting near sibling's (former) residence on Florida west coast. Enjoying not paying state income tax as a Floridian. Traveling the World with spouse. Life is good.

B.A.C.A.H. says

Traveling the World with spouse. Life is good.

I feel that I would have to be anchored in US RE, even if I didn’t live in it. Re-entry after world travel with ever appreciating prices could be problematic. It’s an asset class that you probably need in your portfolio.

stereotomy says

FYI - It's a REALLY bad time to consider an actuary position.

My kid is studying to be an actuary with a BS in computer science. What preparations should be done?

gabbar says

stereotomy says

FYI - It's a REALLY bad time to consider an actuary position.

My kid is studying to be an actuary with a BS in computer science. What preparations should be done?

I guess I'm wrong:

https://www.onetonline.org/link/summary/15-2011.00

That website is awesome - now you know where the HR flunkies get their materials. Have your kid check it out - it's great for building resumes.