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housing prices peak 2
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2022 Apr 29, 9:29pm 601,328 views 5,634 comments
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1664
GNL
2023 Jan 28, 7:02pm
GNL
2023 Jan 28, 7:02pm
Eman says
The only reason I posted that link is because it was on survivalblog.com. Rawles (the owner of the blog) has been pretty good with advice. Of course, only time will tell. Hindsight is 20/20 btw.
The author is cursing in his article? So professional. If prices are dropping, they’re dropping. It’s a fact. Present the data to back up his thesis. No need to curse. This indicates the author is likely a renter, has missed his buying opportunity, and is simply outraged at Bay Area real estate prices.
The only reason I posted that link is because it was on survivalblog.com. Rawles (the owner of the blog) has been pretty good with advice. Of course, only time will tell. Hindsight is 20/20 btw.
1665
Eman
2023 Jan 28, 7:31pm
Eman
2023 Jan 28, 7:31pm
GNL says
@GNL,
From what you know about him, did he advise people to get out, or don’t buy in 2005-2007? Did he advise people to buy during the downturn?
The market peaked around late spring to early summer so the price decline numbers will only get worse in the coming months when compared YoY. Next year numbers is where it would get interesting. My guess is the decline would be smaller YoY. Then possibly bottom out in 2025. However, I’ve seen some big names called the bottom of the housing market around mid to later this year. Time will tell.
I don’t know if you’ve heard of Bruce Norris, but he called the top in 2006-2007 and told his investors to sell and get out. Some even sold their house, went and rented and bought back in 2010-2012 when Bruce called the bottom. Bruce also called the top last summer so it’s been 3 for 3 from what I know.
Eman says
The author is cursing in his article? So professional. If prices are dropping, they’re dropping. It’s a fact. Present the data to back up his thesis. No need to curse. This indicates the author is likely a renter, has missed his buying opportunity, and is simply outraged at Bay Area real estate prices.
The only reason I posted that link is because it was on survivalblog.com. Rawles (the owner of the blog) has been pretty good with advice. Of course, only time will tell. Hindsight is 20/20 btw.
@GNL,
From what you know about him, did he advise people to get out, or don’t buy in 2005-2007? Did he advise people to buy during the downturn?
The market peaked around late spring to early summer so the price decline numbers will only get worse in the coming months when compared YoY. Next year numbers is where it would get interesting. My guess is the decline would be smaller YoY. Then possibly bottom out in 2025. However, I’ve seen some big names called the bottom of the housing market around mid to later this year. Time will tell.
I don’t know if you’ve heard of Bruce Norris, but he called the top in 2006-2007 and told his investors to sell and get out. Some even sold their house, went and rented and bought back in 2010-2012 when Bruce called the bottom. Bruce also called the top last summer so it’s been 3 for 3 from what I know.
1666
Eman
2023 Jan 28, 7:43pm
Eman
2023 Jan 28, 7:43pm
The reason I remember things vividly because I’ve always been in the market every year for the last plus decade. I bought and/or sold real estate every year. I remember buying a 10- and a 12-unit buildings in 2018 and I went all out with my cash. I told myself what am I doing buying at the top of the market here? While Bruce insisted the market still had more room to run.
I know what numbers Bruce monitors to call the top and bottom. He was right the peak was not in based on his set of parameters, but things seemed so frothy then. In hindsight, one building turned out to be a great deal, and one is a good deal. I already got 38% of my money back on one building and 72% on the other after 3 years of ownership. The formula works. Don’t doubt it. Just rinse and repeat.
I know what numbers Bruce monitors to call the top and bottom. He was right the peak was not in based on his set of parameters, but things seemed so frothy then. In hindsight, one building turned out to be a great deal, and one is a good deal. I already got 38% of my money back on one building and 72% on the other after 3 years of ownership. The formula works. Don’t doubt it. Just rinse and repeat.
1667
GNL
2023 Jan 28, 8:40pm
GNL
2023 Jan 28, 8:40pm
Eman says
He's not a real estate expert but he did advise people to sell their excess properties early 2022. His other investment advice has been pretty good also.
What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?
From what you know about him, did he advise people to get out, or don’t buy in 2005-2007? Did he advise people to buy during the downturn?
He's not a real estate expert but he did advise people to sell their excess properties early 2022. His other investment advice has been pretty good also.
What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?
1668
gabbar
2023 Jan 29, 6:10am
gabbar
2023 Jan 29, 6:10am
GNL says
Fed will fail to control inflation at the current rate of interest. So, it will continue to raise interest to get a handle on inflation. 6% +. Corporations will continue to fire employees, firings will accelerate. IT collapse will continue. Insider sales of stocks continue, no insider is buying stocks. Election season is not too far. How much pain can the American consumer take?
What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?
Fed will fail to control inflation at the current rate of interest. So, it will continue to raise interest to get a handle on inflation. 6% +. Corporations will continue to fire employees, firings will accelerate. IT collapse will continue. Insider sales of stocks continue, no insider is buying stocks. Election season is not too far. How much pain can the American consumer take?
1669
Robert Sproul
2023 Jan 29, 7:59am
Eric Holder says
Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.
clambo says
After a certain level of wealth, you can afford fancy hotels for every day of your life; why own a castle in addition to your beach house in Malibu?
This is what Musk realized (and acted upon).
Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.
1670
GNL
2023 Jan 29, 9:51am
GNL
2023 Jan 29, 9:51am
Robert Sproul says
I'm pretty sure I would do this exact thing. Maybe one house in a dream location so I can entertain family and friends.
Billionaire Weirdo Nicolas Berggruen reportedly sold his homes, keeping only his clothes and his jet, and now lives carefree in 5 star hotels.
If he negotiates the price it might only be a grand or two a night and is certainly much cheaper than owning large homes.
It might be how I would play it.
I'm pretty sure I would do this exact thing. Maybe one house in a dream location so I can entertain family and friends.
1671
Eman
2023 Jan 29, 10:51am
Eman
2023 Jan 29, 10:51am
GNL says
The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.
With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.
If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.
Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the average Joe and Jane don’t. I’ve met Tod in person several times at JPM events for real estate investors. Really nice guy. He shared what he does for free too. He lives in Atherton. He has one rule though. Regardless how busy work is, he has to be home by 7pm and have dinner with his wife. John Sobrato, who owns like half of downtown Cupertino, also lives in Atherton. Nice guy too. 😂
His SIL is a commercial agent in my market. Nice guy too. I’ve done 5 deals with him.
https://www.siliconvalley.com/2023/01/23/sunnyvale-housing-home-apartment-real-estate-buy-develop-build-tech/
What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?
The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.
With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.
If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.
Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the average Joe and Jane don’t. I’ve met Tod in person several times at JPM events for real estate investors. Really nice guy. He shared what he does for free too. He lives in Atherton. He has one rule though. Regardless how busy work is, he has to be home by 7pm and have dinner with his wife. John Sobrato, who owns like half of downtown Cupertino, also lives in Atherton. Nice guy too. 😂
His SIL is a commercial agent in my market. Nice guy too. I’ve done 5 deals with him.
https://www.siliconvalley.com/2023/01/23/sunnyvale-housing-home-apartment-real-estate-buy-develop-build-tech/
1672
FortwayeAsFuckJoeBiden
2023 Jan 29, 8:04pm
Eman says
do you buy now in this market? or its just that 20% vacancy rate formula as only criteria? ive been eyeing frw properties, but cap been very low.
do you just buy full cash, or seed 30% down relying on positive cash flow less mortgage?
GNL says
What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?
The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.
With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.
If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.
Billionaire Tod Spieker just bought/added a 224-unit apartment complex in Sunnyvale for $106M to his portfolio. He must know something the aver...
do you buy now in this market? or its just that 20% vacancy rate formula as only criteria? ive been eyeing frw properties, but cap been very low.
do you just buy full cash, or seed 30% down relying on positive cash flow less mortgage?
1673
Eman
2023 Jan 29, 8:52pm
Eman
2023 Jan 29, 8:52pm
FortwayeAsFuckJoeBiden says
Eman says
GNL says
What's your formula? Is the Fed going to continue to raise? When is the next meeting to decide?
The general consensus is that the Fed will do 2 more 0.25% hikes in Feb and Mar and that should be it before lowering rates later this year or next.
With respect to the formula, it’s like anything else in the business world, expected return on investment. If I can get my seed capital back in 5-7 years, it’s a go. The asset must be able to sustain itself with 20% vacancy.
If one gets lucky and the market carries, getting seed capital back in 2-3 years is possible. I know a lot of skeptics on Patnet. Iwog and I shared real life deals on here. Like anything in life, people will believe what they want to believe.
Billionaire Tod Spieker just bought/added a 224-...
I’m always a buyer or seller for the right price. With that said, I haven’t bought any apartment since last year as the numbers don’t pencil out. Sellers haven’t capitulated while interest rates are high. Now, I’m looking at adding new units on my oversized lots. If I can be all-in at $200k/unit, and it’s worth $275-$300k/unit, then it’s worth the efforts.
I budget $600/sqft for the building, engineering, permit costs, etc…. If I can get the cost down to $500/sqft. Voila. The reason it should cost less because I don’t have to pay for land.
1674
Eman
2023 Jan 29, 8:57pm
Eman
2023 Jan 29, 8:57pm
I’ve never paid all cash for apartment buildings. Even with this new construction, I’ll obtain a construction loan. The lender requires I put in 45% of the equity towards new construction. They’ll lend 55%. The cash flow on the building should be able to cover the debt service of the construction loan so there’s no stress on it. Once done building, refinance it into a permanent loan aka a fixed loan rather than an adjustable construction loan.
1675
zzyzzx
2023 Jan 30, 11:58am
zzyzzx
2023 Jan 30, 11:58am
https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/
Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.
Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.
1676
mell
2023 Jan 30, 12:03pm
zzyzzx says
We made an offer on a place that was 15% below ask. They all got hoes mad and huffed and puffed, saying they already had a much better counter offer. We rescinded, they took the other offer, it fell through probably during inspection, and they eventually sold a few months later just a bit below what we offered. We then proceeded to find a much better place for less a bit more rural. 80% of listings are overpriced by at least 10%-20%
https://www.reddit.com/r/realtors/comments/10p8ku8/buyers_want_to_make_a_ridiculously_low_ball_offer/
Buyers want to make a ridiculously low ball offer I don’t feel is justified. How to tell them without offending them? It’s low enough that I don’t think they are serious at all and may just be using me to throw a number at the wall. These people are acquaintances of mine and in our friend group.
We made an offer on a place that was 15% below ask. They all got hoes mad and huffed and puffed, saying they already had a much better counter offer. We rescinded, they took the other offer, it fell through probably during inspection, and they eventually sold a few months later just a bit below what we offered. We then proceeded to find a much better place for less a bit more rural. 80% of listings are overpriced by at least 10%-20%
1678
Booger
2023 Jan 30, 3:47pm
Booger
2023 Jan 30, 3:47pm
mell says
Fictitious other offers are always a problem.
They all got hoes mad and huffed and puffed, saying they already had a much better counter offer.
Fictitious other offers are always a problem.
1679
Eman
2023 Jan 30, 4:01pm
Eman
2023 Jan 30, 4:01pm
I know Patneters are skeptical of “real” offers, but we believe the agents we work with are honest with them.
Recently, there’s a 10-unit building listed for $2.85M. The agent contacted us. We said price is high and in a fringe area, not interested. Seller got an offer for $2.5M shortly after, but declined. We thought the offer was reasonable given the high borrowing cost and its location. We told him to convince the seller to accept it.
No other offers came in for a couple months. The agent reached out to us and begged to write up an offer that we’re comfortable with. We said $2-$2.2M at most. He wrote it up. Next day, a $2.65M offer came in from some agent. The seller accepted it. That’s how it goes sometimes. We trust the agents we work with. We don’t believe in ghost or fake offers
Recently, there’s a 10-unit building listed for $2.85M. The agent contacted us. We said price is high and in a fringe area, not interested. Seller got an offer for $2.5M shortly after, but declined. We thought the offer was reasonable given the high borrowing cost and its location. We told him to convince the seller to accept it.
No other offers came in for a couple months. The agent reached out to us and begged to write up an offer that we’re comfortable with. We said $2-$2.2M at most. He wrote it up. Next day, a $2.65M offer came in from some agent. The seller accepted it. That’s how it goes sometimes. We trust the agents we work with. We don’t believe in ghost or fake offers
1680
Eman
2023 Jan 31, 3:44pm
Eman
2023 Jan 31, 3:44pm
For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.
1681
zzyzzx
2023 Feb 1, 7:31am
zzyzzx
2023 Feb 1, 7:31am
https://www.reddit.com/r/RealEstate/comments/10qcqxb/would_you_buy_a_house_where_someone_committed/
Would you buy a house where someone committed suicide?
Would you buy a house where someone committed suicide?
1682
Ceffer
2023 Feb 1, 7:32am
Ceffer
2023 Feb 1, 7:32am
zzyzzx says
If it was the real estate agent, it'd be a gimme.
Would you buy a house where someone committed suicide?
If it was the real estate agent, it'd be a gimme.
1684
zzyzzx
2023 Feb 2, 9:32am
zzyzzx
2023 Feb 2, 9:32am
https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html
Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
1685
GNL
2023 Feb 2, 9:39am
GNL
2023 Feb 2, 9:39am
zzyzzx says
What does that mean?
https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html
Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
What does that mean?
1686
zzyzzx
2023 Feb 2, 9:53am
zzyzzx
2023 Feb 2, 9:53am
GNL says
Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.
zzyzzx says
https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html
Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
What does that mean?
Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.
1688
GNL
2023 Feb 3, 9:48am
GNL
2023 Feb 3, 9:48am
zzyzzx says
"Redemption", meaning they can't sell their stock/interest in the fund once a limited amount of real estate inside the fund has been sold?
GNL says
zzyzzx says
https://finance.yahoo.com/news/blackstone-69-billion-real-estate-134542719.html
Blackstone’s $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
What does that mean?
Means that people want to get out of real estate, but can't because the fund limits redemptions to avoid a free fall.
"Redemption", meaning they can't sell their stock/interest in the fund once a limited amount of real estate inside the fund has been sold?
1689
Robert Sproul
2023 Feb 3, 9:58am
Eman says
I assume you are going, maybe you can give us a brief report?
For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.
I assume you are going, maybe you can give us a brief report?
1690
AD
2023 Feb 5, 8:31pm
AD
2023 Feb 5, 8:31pm
For every 1% increase in the 30 yr mortgage rate, there is a 10% drop in price.
Peak housing prices were set at around a 3.25% to 3.5% rate. So if the 30 year mortgage rate settles around 5.5%, then housing needs to at least drop 20% to 25% from peak pricing levels.
Also, the home price to household income ratio should be around 4 for a 30 year mortgage rate of 4.5% to 5.5%.
The ratio is 5 for a rate of 3%, based on my own experience securing a VA mortgage in late summer 2016 and what the regional bank mortgage broker stated, in addition to total monthly payments (principal+interest+insurance+taxes+HOA quarterly assessment) not being more than 37% of household income.
The mortgage broker reminded me I was foremost buying monthly payments as the bank owned the home until the loan was paid off.
A $400,000 mortgage would correspond to an annual household income of $100,000 to $133,000. Granted, a buyer may make a 20% down payment for a $400,000 home given they may have proceeds from a previous home sale, stock sale, etc.
Median household income was around $72,000 in 2022.
Median sales price is around $467,000 in last quarter of 2022. It was $329,000 during first quarter of 2020 :-/
Peak housing prices were set at around a 3.25% to 3.5% rate. So if the 30 year mortgage rate settles around 5.5%, then housing needs to at least drop 20% to 25% from peak pricing levels.
Also, the home price to household income ratio should be around 4 for a 30 year mortgage rate of 4.5% to 5.5%.
The ratio is 5 for a rate of 3%, based on my own experience securing a VA mortgage in late summer 2016 and what the regional bank mortgage broker stated, in addition to total monthly payments (principal+interest+insurance+taxes+HOA quarterly assessment) not being more than 37% of household income.
The mortgage broker reminded me I was foremost buying monthly payments as the bank owned the home until the loan was paid off.
A $400,000 mortgage would correspond to an annual household income of $100,000 to $133,000. Granted, a buyer may make a 20% down payment for a $400,000 home given they may have proceeds from a previous home sale, stock sale, etc.
Median household income was around $72,000 in 2022.
Median sales price is around $467,000 in last quarter of 2022. It was $329,000 during first quarter of 2020 :-/
1693
HeadSet
2023 Feb 6, 11:30am
HeadSet
2023 Feb 6, 11:30am
I knew I should have bought a home in Kindergarten and not wait until First Grade. I blame the teacher.
1694
GNL
2023 Feb 6, 12:33pm
GNL
2023 Feb 6, 12:33pm
cisTits says
What about falling prices?
zzyzzx says
...and now we get to hear some bullshit Housing Expert story that flies into the face of data.
What about falling prices?
1695
HeadSet
2023 Feb 6, 1:50pm
HeadSet
2023 Feb 6, 1:50pm
cisTits says
Good. Mortgages need to go up to 7.5% to 8%.
The average 30-year fixed mortgage rate spiked to 6.39% today, according to Mortgage News Daily, having bounced by 40 basis points in two days off the low of 5.99% on Thursday, giving up a month worth of declines in two days.
Good. Mortgages need to go up to 7.5% to 8%.
1696
REpro
2023 Feb 7, 8:29am
REpro
2023 Feb 7, 8:29am
Eman says
I did attend his meetings years ago.
I like his academic style presentation with supporting research.
He is a very good motivator.
For anyone who is interested in real estate, or where we are in the current housing cycle, bubble or not, etc…. Bruce Norris, who is considered the oracle of real estate by California real estate investors, will share his insights on it. Expect the event to be packed.
I did attend his meetings years ago.
I like his academic style presentation with supporting research.
He is a very good motivator.
1699
Shaman
2023 Feb 7, 9:06am
Shaman
2023 Feb 7, 9:06am
The boomers are sick and dying thanks the the vax and being old. Give it a couple years and the mass glut of boomer property on the market will swamp potential buyers with cheap housing.
1700
zzyzzx
2023 Feb 8, 6:16am
zzyzzx
2023 Feb 8, 6:16am
https://finance.yahoo.com/news/biden-one-size-fits-plan-150000623.html
Looks like Biden is trying to put a lot of smaller landlords out of business. They will sell their housing stock.
Looks like Biden is trying to put a lot of smaller landlords out of business. They will sell their housing stock.
1701
zzyzzx
2023 Feb 8, 9:03am
zzyzzx
2023 Feb 8, 9:03am
https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/
Do HOA dues ever go down?
Do HOA dues ever go down?
1702
RWSGFY
2023 Feb 8, 2:54pm
RWSGFY
2023 Feb 8, 2:54pm
zzyzzx says
Does Pope shit in the woods?
https://www.reddit.com/r/RealEstate/comments/10vq9a8/do_hoa_dues_ever_go_down/
Do HOA dues ever go down?
Does Pope shit in the woods?
1703
zzyzzx
2023 Feb 10, 11:36am
zzyzzx
2023 Feb 10, 11:36am
https://www.reddit.com/r/FirstTimeHomeBuyer/comments/10x4qxg/hold_your_ground_when_the_listing_agent_comes/
Yesterday morning, our offer $13k under asking was accepted. Yesterday afternoon, they “received a full price bid” and were going to be so kind as to let us match the full price if we really wanted the house. We “regretfully declined” to increase our offer at 5:00pm
This morning, at 8:57am, our offer was accepted again.
Yesterday morning, our offer $13k under asking was accepted. Yesterday afternoon, they “received a full price bid” and were going to be so kind as to let us match the full price if we really wanted the house. We “regretfully declined” to increase our offer at 5:00pm
This morning, at 8:57am, our offer was accepted again.
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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.