patrick.net

Eman says

You don’t want to be born 10 years earlier. People pay a lot of money to be 10 years younger. I know a 68-year old gentleman who is willing to give all his money ($60M net worth) to be 18 again. If you can enjoy life at a younger age, take it. Money can’t buy your youth back.

Yup. Live life once. Money helps. Enjoy it though. Even if that means being reckless or risky at times. I'll be in the Bahamas, Dominican, AZ and MT in January. Should I? Probably not if you're listening to Dave Ramsey. Fucking live life guys.

The part people don't get. You don't HAVE to pay it. AND you can't take it with you. Until you realize those two truths, you're living a life of misery. Enjoy.

If it floats, flies, or fucks, lease it. The cost of ownership is too damned high.

DD214 says

Lennar offers 5,000 homes to investors with buyer demand sliding

https://unitedbrokersinc.net/2022/12/09/lennar-offers-5000-homes-to-investors-with-buyer-demand-sliding/

It's a stupid time to buy a house.

Prices are only gonna drop.

You're tired of me saying this, but there is a massive demographic shift. For 40 years, boomers powered house buying. Few people in their 60s are looking for 4 bed, 2.5 baths in the burbs. Foreign buyers looking for Pied-a-tierres aren't interested in moving to lower-middle class suburbs of Pittsburgh, Atlanta, or Dallas.

Alot of these 60 somethings are hoping that prices stay high. They won't. And those in their 60s can hardly bitch, having lived through low interest rates for half their lives, multiple decades.

I mean American burbs around the nation, not just SFBA.

cisTits says

AmericanKulak says

If it floats, flies, or fucks, lease it. The cost of ownership is too damned high.

That should be tattooed on every dude's prick (as painlessly as possible).

Some need it branded.

cisTits says

This demographic data and its effects have only been known....since, oh the late 1960s, early 1970s.

True, but maybe not expecting or factoring in the unlimited illegal immigration.

Eman says

I know a 68-year old gentleman who is willing to give all his money ($60M net worth) to be 18 again.

Tell him to retire and start working out a bit.

HeadSet says

cisTits says

This demographic data and its effects have only been known....since, oh the late 1960s, early 1970s.

True, but maybe not expecting or factoring in the unlimited illegal immigration.

Also not factoring crazy Biden printing press and out of control inflation.

Gary Friedman, who leads RH, formerly known as Restoration Hardware, told investors during the company's third quarter earnings call on Thursday that "the housing market is in freefall" and thinks the US housing market is on the brink of collapse similar to what happened in 2008.

He points to low homebuyer demand and the Federal Reserve's aggressive interest rate hikes to tame inflation for the market decline.

"The housing market has collapsed, and it's gone down pretty viciously as interest rates went up," Friedman said during the call. "I haven't seen this kind of drop since 2008."

https://www.businessinsider.com/rh-ceo-says-the-housing-market-collapsing-at-2008-levels-2022-12

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HeadSet says

True, but maybe not expecting or factoring in the unlimited illegal immigration.

From what I've seen, it is not uncommon for illegal immigrants to over crowd housing. For example, I remember in Manassas Park where 3 families lived in a home designed for 1 family.

When my family came to this country, we stayed at my uncle’s house for a year to save money before we could move out. My uncle has 6 kids plus 6 of us so 14 persons in a 4/2.5 house. Our family got 1 room. My parents and little brother slept on the bed. Three of us slept on the carpet floor. That was heaven to me. In my country, I slept on concrete/tile floor so it was a nice cushy step up.

We all turned out okay. All of us own a house in the Silicon Valley. From that perspective, I don’t have issues with people crowding their own house. This country is truly the land of opportunity.

Here's Where You May Want to Move in 2023

“Florida markets dominated the annual appreciation leaderboard in 2022, with Tennessee, the Carolinas and Texas metro areas peppering into the top spots among the 100 largest metros.”

That won’t all go away, Zillow said. “The heat will stay on in the Sunshine State, to be sure,” it said.

“But as affordability has become the key driver of both supply and demand in the market, places that still feature reasonable prices are already seeing momentum shift their way, and should have the healthiest housing markets in 2023,” according to Zillow.

That means the Midwest. “Unlike nearly every other region in the U.S., prices in most Midwest metro areas haven’t run up to extremes,” Zillow said.

Affordability isn’t the only issue. “Having available houses to choose from is another key component of a healthy market, and the Midwest stands out,”

https://www.msn.com/en-us/money/realestate/zillow-here-s-where-you-may-want-to-move-in-2023/ar-AA158aSu

Eman says

When my family came to this country, we stayed at my uncle’s house for a year to save money before we could move out. My uncle has 6 kids plus 6 of us so 14 persons in a 4/2.5 house. Our family got 1 room. My parents and little brother slept on the bed. Three of us slept on the carpet floor. That was heaven to me. In my country, I slept on concrete/tile floor so it was a nice cushy step up.

We all turned out okay. All of us own a house in the Silicon Valley. From that perspective, I don’t have issues with people crowding their own house. This country is truly the land of opportunity.

Great story, brotha. People don't realize the opportunity we have in this country compared to everywhere else.

ad says

For example, I remember in Manassas Park where 3 families lived in a home designed for 1 family.

You mean 1 American family.

How Shady Real Estate Agents Cheat

KATE SWANSONAUG 24, 2022

Kate Swanson has been a property investor for the last 20 years and has moved houses (and continents) several times herself in that time.

There are plenty of good, honest real estate agents. But every industry has its share of shonky practitioners.

Mostly Good, Some Bad

I've had many complaints from realtors about this article! They claim that all realtors are Honest Johns and have their customers' best interests at heart.

Let me make this clear: this is not an attack on the real estate industry.

There are plenty of good, honest real estate agents. But every industry has its share of shonky practitioners—unfortunately, that's just human nature. Take any large group of people, and you'll find a percentage who are prepared to twist the rules to their own advantage. And as we all know, the most fresh-faced, charming people can also be the most crooked, so we can't assume the nice ones are really the nice ones!

For most people, their home is the single biggest investment they'll ever make in their lives, so it's worth being aware of the tricks the unprincipled can get up to.

Realtors can make more money selling several houses cheap, than one house at the best price.

Why Shady Realtors Want to Sell Cheap

At the root of the problem is one huge misconception: that you and the realtor have the same goal in mind, which is to sell your property for the maximum price possible. That's simply not true. You want to sell at the highest possible price. The realtor just wants to sell.

You may be wondering, why on earth would a realtor not want the best price? After all, their commission is based on the selling price, so the higher the price, the more their commission.

The answer is simple: speed. If they hold out for the highest price the market can bear, that means more advertisements and more inspections. True, they will get less commission if the price is lower, but they will also have spent much less time and will be able to move on to the next house much faster.

They can sell six under-priced houses in the same time it takes to sell three full-priced houses, and the result will be more commission!

Of course, legally, the realtor has to agree on a figure with you and stick to it: they can't sell the property if you don't agree with the price. But the shady realtor has ways they can work on you, the seller, to persuade you to accept a lower price in the end.

How a Shady Realtor Reduces Your Sell Price

When the realtor comes to see your house, they point out all the good features of your property and names an impressive price.

Once you've signed up, the agent starts showing possible buyers through your home. After every inspection, they call to tell you how it went. To your surprise, they tell you they're disappointed to be getting negative feedback (which, strangely, they either never mentioned—or dismissed as unimportant—on their first visit!).

The first week, they may say some buyers didn't like the décor and would have to repaint the whole house. The second week, they'll mention buyers who felt the kitchen would need replacing. The third week, it might be a worn carpet or a damaged piece of guttering. Alternatively, they might claim they're getting constant comments on one single major flaw, such as the lack of sunlight in the living room or the deck that needs replacing.

They may also say buyers have said what they might pay, e.g., "I'm getting some interest in the low three hundreds", which means people have said they might pay $300,000 to $350,000 for the house. Whatever the range is, it's always substantially under the figure they first quoted. If you express concern, they'll say, "well, you have to bear in mind, they didn't like . . . "(whatever the latest flaw was).

You may have guessed by now that the buyers probably said nothing of the sort, or if they did, it was a casual comment. They're making it up to create doubt in your mind, to undermine your confidence in that impressive price they originally quoted. Week by week, they drip-feed you negative feedback on the property, aiming to lower your expectations. Meanwhile, they're also working on the buyers . . .

Keep an eye out for agents who have a less than ideal moral compass.

"Hooking" the Buyer

It's illegal to quote a price the seller hasn't agreed to—but if the agent is having a private conversation with a potential buyer, and there are no witnesses, it's the agent's word against theirs—so you can't prove anything, and will probably never know anyway.

If your property is for sale at a fixed price, during the inspections, the realtor will be telling buyers you're "very negotiable" (whether you are or not). If your property is up for auction, the agent will be privately naming a price range that's well below what you're hoping to get.

I've caught more than one agent doing this because I love viewing property, so when an acquaintance puts a house up for sale, I just have to go and look. Once, it was an apartment selling for $380,000. I got talking to the agent, and he told me, "If you're interested, I'm sure they'd take an offer of $340,000".

The next time I met my friend, I asked them how it was going. "Not good," she said glumly. "The agent is telling me they're only getting interest in the low $300s. He originally told us we'd easily get over $375,000, so we're really disappointed."

Of course, he's only getting interest in the low $300s if that's what he's telling buyers it's worth!

If you catch your agent out doing this, they'll tell you, "we quote a low price to hook the buyers' interest, then we can negotiate them up from there". I don't know why anyone ever believes this!

Did this house sell for the price promised?

Clinching the Deal

Eventually, you will get an offer for the house, or auction day will arrive, and someone will bid.

Thanks to the agent, it's quite likely the offer or bid will be lower than you expect. When they present it to you, you're quite likely to say so, to which the agent will reply, "oh yes, but do bear in mind that buyers have all been put off by the lack of sunlight (or whatever the problem was)". They'll tell you how you can never be sure what a property is worth upfront, but now it's been "tested in the marketplace".

This is all utter tosh. The property hasn't been "tested in the marketplace" at its true value because the agent has been telling everyone it's worth less than it really is!

I've had several comments from realtors saying, "I'm sorry you had a bad experience", and assuring me how wonderful most real estate agents are. So I should clarify that this article isn't based on one bad experience.

I do not deny there are good real estate agents out there. But if you embark on selling your home imagining that all agents are angels, you're an idiot!

© 2008 Kate Swanson

https://www.bloomberg.com/news/articles/2022-12-06/millions-of-us-millennials-moved-in-with-their-parents-this-year

Millions of US Millennials Moved in With Their Parents This Year

These days, a luxury high-rise in downtown San Francisco with units that appear to be mostly empty isn’t an uncommon sight. As a cooling real estate market continues to impact the city, downtown condos might be some of the hardest-hit properties around.

Patrick Carlisle, Compass’ chief market analyst, said that while economic headwinds are affecting real estate markets everywhere, downtown San Francisco’s condo market has been hit especially hard.

“That market has been hit hardest in the city,” Carlisle told SFGATE. This is due to a few different factors, he said, one being the mass abandonment of downtown office spaces since the start of the pandemic.

“San Francisco went from probably being the hottest office market in the country to being about the weakest,” Carlisle said. “High-tech workers were the ones who were most likely to say, ‘Well, I can work from any place. I’ll move someplace where housing costs 90% less.’”

Speaking of tech workers, Carlisle said the uncertainty brought on by mass tech layoffs has also affected property sales downtown. He added that an increase in homelessness and crime in downtown areas has affected the “quality-of-life ambiance” for people in those areas, presumably buyers who are reluctant to live among the city’s unhoused populations.

...
According to a recent report from Compass, the median sales price of a two-bedroom condo in downtown areas has dropped by 16% since 2021, compared to a 7% drop in the price of two-bedroom condos outside of that area. The report also states that condo inventory in this area is more than twice as high as the rest of the city — which explains the seemingly empty high-rises looming everywhere downtown.

In October, one 45-story luxury high-rise made news after it was revealed that only 13 of its 146 units had been purchased in the two years they’d been up for sale.

...

https://www.sfgate.com/local/article/downtown-sf-condo-market-struggling-17643941.php?IPID=SFGate-HP-CP-Spotlight

zzyzzx says

https://www.bloomberg.com/news/articles/2022-12-06/millions-of-us-millennials-moved-in-with-their-parents-this-year

Millions of US Millennials Moved in With Their Parents This Year

Living with parents/family members is considered normal and positive in many cultures/countries.

gabbar says

In defense of agent's, what exactly do you want them to do? An agent puts a lot of time, effort and $$ into getting to the point of agreements let alone the amount of $$ they put into a listing. However, I do think there is an argument to be made that the industry is a monopoly. The fact that a Realtor must post all listings to an MLS is where, imo, the control is made most effective. You can sell real estate without being a Realtor.

To above post, not in California.....

zzyzzx says

Where/when do tax valuations change simply by refinancing?

cisTits says

GNL says

Where/when do tax valuations change simply by refinancing?

One good thing about California is that doesn't happen.

Still, I don't get the relationship between the two lines in that meme either.

It doesn't. Not with a refi. Purchase will though. Bought my house for $85k it's worth $300k now and refi'd twice. Property taxes went up $300 annually since we've bought. We're IL unicorns at $3,200 in taxes annually.

GNL says

In defense of agent's, what exactly do you want them to do? An agent puts a lot of time, effort and $$ into getting to the point of agreements let alone the amount of $$ they put into a listing.

Only a fox/stakeholder in real estate can defend other real estate agents/foxes. Real estate agents are worse than used car salespeople.

Current and expected conditions are like those that have signaled past global recessions. Significantly deteriorated financial conditions, increased policy rates, energy concerns, and declining trade volumes indicate the global economy will likely enter a recession in the coming year. The brunt of job losses to hit the technology and real estate sectors. They were among the strongest beneficiaries of the zero-rate environment. - Vanguard Report, December 14, 2022

GNL says

You can sell real estate without being a Realtor.

In Virginia, you can sell your own real estate without a broker, but you cannot sell for someone else without a license.

HeadSet says

GNL says

You can sell real estate without being a Realtor.

In Virginia, you can sell your own real estate without a broker, but you cannot sell for someone else without a license.

As I understand it, you have to have a state license and work under a Broker (I'm pretty sure) but you do not have to join the NAR or become a Realtor. You can simply be a real estate agent.

WookieMan says

GNL says

Where/when do tax valuations change simply by refinancing?

One good thing about California is that doesn't happen.

Still, I don't get the relationship between the two lines in that meme either.

It doesn't. Not with a refi. Purchase will though. Bought my house for $85k it's worth $300k now and refi'd twice. Property taxes went up $300 annually since we've bought. We're IL unicorns at $3,200 in taxes annually.

It doesn't. It just tracks the market price. From what I can tell, the county government's property appraiser office attempts to appraise or assess (for calculating the property tax) the home value to about 25% below the average market price for the year.

Market price is what the home would likely sell at.

That is why I usually multiply the county assessed value by 1.25 to get a rough order of magnitude estimate on what price the house should sell at.

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zzyzzx says

Redfin all time high was about $96 in early 2021. It may be a good bottom feed price now if you willing to hold it for at least 3 years. Look at AirBnb and Zillow, they also got beat up a lot also.

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https://wolfstreet.com/2022/12/11/starting-to-be-housing-bust-2-for-homebuilders-new-single-family-houses/

Starting to Be Housing Bust 2 for Homebuilders & New Single-Family Houses
by Wolf Richter • Dec 11, 2022 • 217 Comments
To get rid of ballooning inventories amid spiking cancellations & plunging sales, builders try to sell to rental operations, but they pulled back too.
By Wolf Richter for WOLF STREET.
If a homebuilder cannot sell their ballooning inventory of unsold new houses to households, at current prices and mortgage rates, amid plunging sales and soaring cancellation rates of signed contracts – topping out at 45% in the Southwest and at 38% in Texas – despite aggressive incentives such as mortgage-rate buydowns to stimulate sales and prevent cancellations, well, whom are homebuilders supposed to sell those houses to?

Rental operations? That may be hard too because many have pulled back for all the same reasons as households: Prices are too high, and financing is too costly. Sales to single-family rental investors have plunged by 32% in Q3 from a year ago. So here we go with a good-luck nod…

Patrick says

https://wolfstreet.com/2022/12/11/starting-to-be-housing-bust-2-for-homebuilders-new-single-family-houses/

Starting to Be Housing Bust 2 for Homebuilders & New Single-Family Houses
by Wolf Richter • Dec 11, 2022 • 217 Comments
To get rid of ballooning inventories amid spiking cancellations & plunging sales, builders try to sell to rental operations, but they pulled back too.
By Wolf Richter for WOLF STREET.
If a homebuilder cannot sell their ballooning inventory of unsold new houses to households, at current prices and mortgage rates, amid plunging sales and soaring cancellation rates of signed contracts – topping out at 45% in the Southwest and at 38% in Texas – despite aggressive incentives such as mortgage-rate buydowns to stimulate sales and prevent cancellations, well, w...

@patrick, short home builder stocks, or XHB?

iShares US Home Construction ETF' 52 week high is $83.22 and its 52 week low is $48.02 (June 2022). Its at $62.84.

Its has to return to its Feb 2022 level of around $50. It likely will bottom around that level.

.

Eman says

short home builder stocks, or XHB

I wouldn't short anything, since losses are potentially unlimited, but buying put options on some overvalued builders (p/e > 30?) might be good.

Patrick says

I wouldn't short anything, since losses are potentially unlimited, but buying put options on some overvalued builders (p/e > 30?) might be good.

The PE is less than 5 for the most home builders. Interestingly, most stocks are on the raise from 2022-Nov.

Fans of the 2008 housing crash redux, rejoice!

It appears the BLS has been cooking the books on employment. Actual job creation since March is about 12k, vs. BLS numbers of 2.7 million. There is no 'strong and tight' labor market.

Zerohedge has been all over this for a while now :

https://www.zerohedge.com/markets/here-comes-job-shock-philadelphia-fed-admits-us-jobs-overstated-least-11-million

While I'm still in the "there won't be a housing crash" camp, I have had the caveat that job loss could create forced selling and it could crash housing.