patrick.net

zzyzzx says

https://www.reddit.com/r/REBubble/comments/11d11fg/yikes/



Honestly it's not too early to start lowballing people. I'm considering sending a 60% of list offer on a large commercial property. The fact is rising taxes and interest rates don't justify anything near the asking price. If they don't want to be reasonable then I'll simply wait until things get worse and the offer will not be improving when they come back to me later.

Auction = foreclosure? If this is the case, the owner should ask for a postponement. List the house and sell it for as close to fair market value (FMV) as possible. At auction in the current market environment, my guess is that the house would sell for 70% of FMV at most. The discounted offers are justified.

zzyzzx says

https://finance.yahoo.com/news/landlords-face-crisis-mortgage-costs-171034546.html

Landlords face crisis as mortgage costs surge higher than rents

This is a real issue, especially for commercial properties, where the loans are becoming adjustable. JPM loan officer told us they’ve been doing cash-in refinance on loans that adjust recently. So far, owners have been able to bring in the difference for the refinance. No red flag……yet. This is specifically to Bay Area commercial real estate.

HeadSet says

zzyzzx says

Landlords face crisis as mortgage costs surge higher than rents

This is more the case in Britain where all mortgages are variable rate.

The same with Canada and Australia. Only ARMs. No 30-year fixed mortgages like the USA. 🚀🚀

@cisTits - what about inventory? Here in Northern Virginia, Realtors are telling me every day that things are selling quickly and at full price.

https://wolfstreet.com/2023/02/28/the-most-splendid-housing-bubbles-in-america-february-update-biggest-price-drops-now-in-phoenix-portland-las-vegas-san-francisco-seattle-denver-san-diego/

Housing Bubble 2 is deflating relentlessly, not under the pressure of an unemployment crisis – far from it: the labor market is still historically tight with the highest pay increases in four decades, and an increase in unemployment would be the next shoe to drop on the housing market – but because mortgage rates have reverted to the normal levels of 6% to 7% that existed before the money-printing era started in 2008. And home prices that exploded over the past few years, fueled by mortgage rates of 3% and lower, don’t make sense anymore – and never made sense to begin with. ...

On a month-to-month basis, today’s Case-Shiller Index for single-family house prices dropped in all 20 metros that it covers. The biggest month-to-month drops, those dropping at least 1.0%, occurred in:

Phoenix: -1.9% (second month in a row! The babe is moving fast)
Portland: -1.9%
Las Vegas: -1.8%
San Francisco Bay Area: -1.8%
Seattle: -1.8%
Denver: -1.3%
San Diego: -1.3%
Chicago: -1.2%
Minneapolis: -1.2%
Dallas: -1.1%
Detroit: -1.1%
Charlotte: -1.0%
From their respective peaks, which ranged from May to July 2022, house prices dropped the most in these metros:

San Francisco Bay Area: -16.0%
Seattle: -15.1%
San Diego: -11.1%
Phoenix: -9.4%
Denver: -7.5%
Las Vegas: -8.8%
Los Angeles: -8.1%
Portland: -7.9%
Dallas: -7.6%

West coast and hipster cities are going to eat shit. If someone didn't see that coming after covid you're not thinking. I've beaten this dead horse so many times here and I've 100% been right. There is and will be an exodus from cities. Covid accelerated that with work from home, millennials starting families, defund the police and just shitty politics.

Of the big negatives I think Phoenix has the highest probability of recovery. Denver has needed its ass handed to it for a decade now. The growth was not logical and likely ignited by legal pot. The west coast cities are obvious. Smart people generally don't live in a place led by morons, taxed at insane rates and political policy.

Regardless of interest rates I'm not losing selling my $1M home in Seattle and buying a $500k home in Spokane. Until people realize that most home buyers are white collar and can now work from home, major cities are going to take a beating. I lived the exodus from a major city like Chicago. The floor is much higher here for price loses. We're seeing price gains where I'm at and outside of 10% interest rates it's not stopping. It's not booming but we're hitting 3-5% increases annually still. Not losses.

https://www.businessinsider.com/fed-economists-markets-investing-housing-correction-crash-economy-rate-hikes-2023-2

The Fed's own economists are warning of a 19.5% housing correction and more rate hikes could set off a 'domino effect'

GNL says

Here in Northern Virginia, Realtors are telling me every day that things are selling quickly and at full price.

Probably still the case around here, for now.

https://www.cnbc.com/2023/03/01/mortgage-demand-falls-interest-rates-rise.html

Mortgage demand from homebuyers drops to a 28-year low

Ouch, nothing like paying $16k over ask just to take a $90k loss later...

2/10/2023 Sold $660,000
1/11/2023 Pending sale $699,879
12/7/2022 Price change $699,879
11/28/2022 Price change $799,000
11/16/2022 Price change $825,000
10/20/2022 Listed for sale $850,000
6/16/2022 Sold $750,000
4/26/2022 Pending sale $734,000
4/22/2022 Listed for sale $734,000

https://www.zillow.com/homes/9207-Woodbay-Dr-Tampa,-FL-33626_rb/44857898_zpid/

zzyzzx says

https://www.cnbc.com/2023/03/01/mortgage-demand-falls-interest-rates-rise.html

Mortgage demand from homebuyers drops to a 28-year low

In normally priced markets that are $700k or under, they should weather the storm relatively well. Where this will appear to be a crash is the cities and coastal areas.

Also 90% of owners bought when interest rates were sub 5% and that's not accounting for those that bought with cash. This isn't 2004-08 where we were giving strippers and unqualified people loans based off of undocumented income. Inventory shot above double digits into the 15-20 month range at that time. People might sell in cities to get the fuck out, but people are simply staying put.

I was personally managing 80+ listing during the crash. It was insane. Unless they're giving away loans again, I'm not see it. This is a demographic shift out of cities. Their prices tend to be higher. The national median AND city prices will go down. But it's not a crash.

My sister in law just got an all cash offer on her rental property. No price cuts. 2 weeks. Little cottage house near a lake in Northwest IL. I've never once said there won't be declines. People's perception of the market is from their location and they assume that's how it will be everywhere. It isn't and won't be...

Good news for renters. Heard over the radio 1220am, relief is on the way for renters that 500k apartments will be finished soon and put pressure on upside.

cisTits says

GNL says

cisTits - what about inventory? Here in Northern Virginia, Realtors are telling me every day that things are selling quickly and at full price.

What about it?

I don't think you can expect a crash when inventory is low.

Blue says

500k apartments

Not enough.

Blue says

Good news for renters. Heard over the radio 1220am, relief is on the way for renters that 500k apartments will be finished soon and put pressure on upside.

Lots of apartments going up in Panama City and Panama City Beach.

Seen a lot of apartment websites offering 1 month free for 13 month lease.

Seems like rental prices are back at 2021 levels without the 1 month discount.

I suspect rental rates will be frozen for next couple of years to allow wage growth to better align with past rental price increases.

https://www.zillow.com/home-values/6391/panama-city-beach-fl/

https://www.zillow.com/research/

ad says

https://www.zillow.com/home-values/6391/panama-city-beach-fl/

https://www.zillow.com/research/

That's way too fucking expensive for the panhandle.

Booger says

That's way too fucking expensive for the panhandle.

Housing here in the Florida panhandle needs to drop about 20% from its peak levels. It is already 6% down based on Redfin research data.

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I haven't looked at prices in the Western panhandle area. Pensacola, Navarre, Destin, Fort Walton, etc. Eastern areas like St. George Island are fucking nuts on all levels. Had a chance to buy our vacation rental at $450k that would rent for $2,200/wk. It's now $900k and easily rents for $5k/wk now.

Unique area. They zoned it so there couldn't be condo towers. Not the same, but similar to CA's prop 13. When you create scarcity prices go bonkers. That's one pocket that's going to likely see a downturn at least in FL that I know well. Rural tourist area. A lot of wealthy Floridians and Georgians go there because it's quiet, good beaches, good fishing, oysters, Appalachicola is a quaint little hipster town. Plantation has a landing strip. Really cool island and regret not investing there.

https://fortune.com/2023/03/02/dallas-fed-housing-market-modest-correction-monetary-policy-severe-price-drop/

https://finance.yahoo.com/news/blackstone-blocked-investor-withdrawals-71-174423166.html

Blackstone blocked investor withdrawals from $71 billion REIT in February

https://www.cnbc.com/amp/2023/03/02/mortgage-rates-back-over-7percent.html
Things getting interesting at 7+% rates. Really a great news if it can sustain the rate for long. But again free printing press might not give a break which makes cash is worth less.

https://padailypost.com/ but i don't see it on their site, so just took some photos:

https://www.foxbusiness.com/economy/us-home-prices-could-plunge-risk-deep-housing-slide-fed-economist-warns

US home prices could plunge 20% amid risk of 'deep' housing slide, Fed economist warns

https://www.redfin.com/news/housing-market-update-home-sale-prices-fall-first-time/

Housing Market Update: Home Prices Fall Annually For First Time In A Decade As Mortgage Rates Pass 7%

Been looking to buy 300 shares in Invitation Homes and sell weekly covered calls for at least 1 year.

Invitation Homes buys residential real estate and then rents them. Another residential rental company of my interest that offers rentals (but has different business model) is Avalon Bay.

I think both are good long term holdings for real estate.

.

Nothing that a few more millions of illegals can't cure.

WookieMan says

Appalachicola is a quaint little hipster town.

Prices are not too bad in this town. What do you think about Tallahassee?

gabbar says

What do you think about Tallahassee?

Not close enough to the beach.

gabbar says

WookieMan says

Appalachicola is a quaint little hipster town.

Prices are not too bad in this town. What do you think about Tallahassee?

The problem with the Panhandle and Northern FL is you're going to run into your stereotypical white trash and southern blacks. So there will be cheap prices for housing inland. @ad could probably speak better to it than I can. My mom unloaded all her property down there over the last 3 years. So I have no stake or interest in knowing prices down there anymore. But you can pick up solid house 30-40 minutes from the beach for $250k, from Pensacola to Tallahassee.

Only been to Tallahassee twice. Didn't like the vibe. Spending 3 days in the Jacksonville area in a couple weeks. I've heard negative things. But I hear that about everywhere. I wouldn't make Tallahassee a destination though. Unless your kid wants to go to FSU. I'm sure outlying suburbs are nice, but Tallahassee proper was college town ghetto from my experience. Probably fun if you want to party and fool around with young college chicks. I would, just don't want to live there and I'm married. lol.

I think I just typed Tallahassee more times in this comment than my entire life...

WookieMan says

The problem with the Panhandle and Northern FL is you're going to run into your stereotypical white trash

What's wrong with that ? It keeps away the Democrat doucebags from the north and California.

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WookieMan says

But you can pick up solid house 30-40 minutes from the beach for $250k, from Pensacola to Tallahassee.

True that. I like all those charming towns like Chipley, Cottondale, Crestview, Florala, Ponce De Leon, etc.

Paradise is living in Florida and only being within a 1 hour drive of Alabama. Roll Tide.

.

ad says

What's wrong with that ? It keeps away the Democrat doucebags from the north and California.

I live in that in IL. Around me is mostly white trash but most our friends are white collar. So not complaining. Uppity people as you say don't like that element. I love it. Real people and fun as long as they control their alcohol consumption and drug usage. I love the Panhandle. Have probably spent 2 years of my life there from Pensacola to St. George island.

My parents had multiple properties in Milton and Navarre. We did have a low rise 2/2 condo there for maybe 10 years at Navarre beach. Had some of the most ridiculous times there from 16-25. Speeding we could get from Chicago land down there in 12 hours. We got kids now and between pissing it's now turned into a 16-18 hour journey where we would usually stop in Trashville, TN.

We fly into PNS now. Southwest flies to Destin haven't tried PCB either. I love St. George but prices for rentals have gotten obscene.

WookieMan says

Only been to Tallahassee twice. Didn't like the vibe. Spending 3 days in the Jacksonville area in a couple weeks. I've heard negative things. But I hear that about everywhere. I wouldn't make Tallahassee a destination though. Unless your kid wants to go to FSU. I'm sure outlying suburbs are nice, but Tallahassee proper was college town ghetto from my experience. Probably fun if you want to party and fool around with young college chicks. I would, just don't want to live there and I'm married. lol.

All the Central Florida towns are full of the high crime element... Ocala, Talahasee, Gainesville. Jax as well.

AmericanKulak says

All the Central Florida towns are full of the high crime element... Ocala, Talahasee, Gainesville. Jax as well.

hood rat environment and culture

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Where is Logan's optimism?

porkchopexpress says

Where is Logan's optimism?

He seemed a little daft to me at the time, was Logan right about EVERYTHING in the last few years?
I know my pessimistic nature has not served me well.
I am getting ready to buy a neighboring property, my first purchase in 10 years, that is likely a negative indicator for the market...

WookieMan says

West coast and hipster cities are going to eat shit.

There's been lots of reasons for the too-high house prices in the SF Bay Area, including very low turnover.
(Low turnover is partly due to Proposition 13 property tax law).

The too high prices to buy made our region, as Wookie Man put it, eating sht for years. It's caused millennials and others to have to double-triple up with roommates, it's the main reason about half the shit boxes on my street have folks living (illegally) in garages and sheds, all working adults with cars, making parking impossible here. It's the reason the local government looks the other way on the illegal living arrangements. It's the main reason so many local government employees and other service workers reside Super Commute distance from their jobs, in outlying areas like Hollister, Watsonville, the Central Valley. Now it's become a reason for Flight Of Large Employers and young families from the region. In short, the Too-High Prices, which due to low turnover a very tiny minority of homeowners have cost sunken into, have made life miserable for here, - as Wookie Man said, our region eating sht. The huge majority of homeowners in the region only had imaginary "equity". If prices drop by half, they won't have lost a thing that they never really had anyway.

A collapse in the prices will be a welcome relief, will make life more livable here, less of eating sh*t kind of life. More affordability will be good for nearly everyone in the region, including ®ealors.

Strange, I already know a couple of people who bought houses for their kids in Texas. Couldn't afford in Coastal Insane LibbyFuck Privilege Land, so kids went to Texas for education or jobs or to raise families, and parents had enough spare change to buy them houses.

https://finance.yahoo.com/news/luxury-housing-market-sees-steep-deceleration-charts-112538320.html

Luxury housing market sees 'steep' deceleration