patrick.net

Eman says

Reputation is paramount in any biz. Agents/brokers don’t get paid until the deal is closed. They’re essentially working for you, as a buyer, for free. That’s how I view it regardless of what others on this website think.

When we first started out, we called all the listing agents in our farm and asked them out for lunch. Do your homework so you can talk intelligently. Ask them why certain deals went down at such great prices while others are at high prices. Then tell them you’re looking for gre (some text omitted to shorten quote...) nt of them often so they remember you. Whoever brings you a deal, they own that listing for life. Unwritten rules in commercial real estate.

Do what you say you’re going to do. Keep your promise. Be reasonable. Don’t be a pain in the rear to work with so whenever they have a deal, they will remember who to call first, and who will close the deal without being a pain in the rear. They don’t get paid unless the deal is closed. A bird in hand is worth more than 2 in the bush. Be that bird in hand.

Thank you. This is helpful indeed.

Bitcoiner says

Nuttboxer, looking at - let’s say 50 - properties doesn’t give you any meaningful insight / indications of where the market is headed.

Look at indicators for San Diego such as Active listings, expected market time, purchase application data etc. If you actually want to know where the market is headed you would want to follow people who do market tracking for a living. Altos research, Steven Thomas, Logan motashami etc. make it easier on yourself and follow the pros. I know you probably won’t but I thought I try ;)

San diego’s spring market is sizzling hot. Expected market time is 40 ish days. I am living north of San Diego and yes, the +1M homes sit a little longer but they sell eventually. Often all cash offers. By now, inventory should have increased because seasonality is slowly kicking in. It hasn’t. People are dis-incentivized to sell since they are locked in to much lower rates.

It does if you buy/rent one of them. But you're obviously propagandized to a certain opinion. I say that because when I provide specific examples, you ignore them. When I link to articles showing rents on the decline nationally, you ignore them. So what other conclusion can I draw?

WookieMan says

Roths, 401k, HSA, IRA, etc. If you max those out then fine have $40k or $40M in a savings account that could be seized if you default. At that point there's no reason to default, just pay. I'm strictly talking in strategic senses. Middle class person with $100k family income loses a job and can't pay the mortgage. Leverage the default as much as you can. One by not paying. Two protect yourself/finances. Third is short sell and get all liability waived. I/we did this with probably 90 short sales. (some text omitted to shorten quote...) y party can take those funds. Not one client had a dime taken from their checking or savings. The loans are sold off, but even then I would never bank with who lends me the money unless it's a commercial/business account.

I'm in by no ways promoting dumping debt. If you get yourself in a fucked up situation there is a way out is all I'm saying. Too many think it's doom and gloom and do something stupid including taking their life... over money and credit. You can always make more and repair it.

Let me buy you a beer.

https://www.cnbc.com/2023/05/16/home-depot-hd-earnings-q1-2023.html

Home Depot posts worst revenue miss in about 20 years, lowers forecast as consumers delay big projects

Booger says

Home Depot posts worst revenue miss in about 20 years, lowers forecast as consumers delay big projects

Yeah, home sales are in a freeze. Need for the 30 year mortgage to settle for at least 3 months below or near 5.25%.

Home Depot is about 32% below its all time high set in December 2021 and only about 15% above its February 2020 level. So its real return (or inflation adjusted return) is about 5% since February 2020 (which accounts for dividend).

The S&P 500 is about 15% below its all time high set in December 2021, and only 20% above its February 2020 level.

The S&P 500 has been trading sideways for almost the last 12 months.

,

Bitcoiner says

we also know that videos or articles about an upcoming crash / foreclosure crisis / shadow inventory etc get by far more views/clicks than the “boring” reports that the pros (altos research, calculated risk, Steven Thomas and Logan motashami) publish.

For sure. You do have a more balanced view than Logan, who I would never ever follow or listen to. Guy is too much of a hardliner for markets never go down, doesn't have any grasp of economic history. Stats can be easily manipulated if the source is not unbiased, and there's big money in keeping the market hot as long as possible. Not much profit in my view, so naturally makes it more honest.

I'm so fucking tired of the small space here, can't wait to have some room for the first time in three years.

ad says

Yeah, home sales are in a freeze. Need for the 30 year mortgage to settle for at least 3 months below or near 5.25%.

Now why is this the view, instead of house prices just need to be realistic in light of higher interest rates? Higher interest + more down + return to normal 10 - 15 year mortgage = more affordable, responsible housing purchases.

Why are people so sold on lifelong debt slavery? Oh yeah, greed...

NuttBoxer says

Now why is this the view, instead of house prices just need to be realistic in light of higher interest rates? Higher interest + more down + return to normal 10 - 15 year mortgage = more affordable, responsible housing purchases.

Why are people so sold on lifelong debt slavery? Oh yeah, greed...

I think peak prices were set around 3.5% rate for the 30 year mortgage. If the 30 year rate steadies at 5.5% then that means housing should go down 20% based on affordability standards (i.e., 10% drop in price for 1% increase in mortgage rate).

I am hoping wages go up 3% a year while home prices remain constant at 20% below from peak for at least 3 years. I'd like to see that for rentals as well.

I realize that is ideal for affordability but just like any asset or commodity in a free market, its not going to be the case as it will likely over correct due to market volatility.

Bitcoiner says

During times of low interest rates people said that if rates finally go up, prices have to come down significantly. Now people see that this isn’t the case.

It is the case in a few markets (Austin, etc.). In most places it's going to take more time, as in at least a couple of years.

Bitcoiner says

If history is any indication, price is a function of supply and demand (it’s not a function of affordability of the avg Joe)

If the prices do not go down to compensate for the higher borrowing cost, it seems the only way Joe could afford a house is to double up with multigeneration or another family. Do you see this as a trend?

I believe this is all part of the great reset. Bitcoiner, or any of us, may not like where it will ultimately lead.

Bitcoiner says

GNL says

I believe this is all part of the great reset. Bitcoiner, or any of us, may not like where it will ultimately lead.

Can you explain? I have no idea what you are referring to. What means great reset in plain English?

https://www.amazon.com/COVID-19-Great-Reset-Klaus-Schwab/dp/2940631123

Don't buy it. If you want the book, I can get it to you, without giving the assholes any money..

NuttBoxer says

Why are people so sold on lifelong debt slavery? Oh yeah, greed...

You're not "lifelong debt slavery." You don't have to pay it and you could live there for 2-3 years free of anything besides utilities. Rent for 1-2 years and buy again after your credit gets cleaned up. Good luck getting more than 60 days on an eviction if you hit a rough patch and finding a new place. I witnessed both scenarios 100 times each, easy during the housing bust. I lurked and wasn't active here at that time and didn't talk/comment.

Only way I rent will be for 6 months in snowbird locations or a quick vacation rental. I'd prefer to own the snowbird location though. The only upside to renting is if you're disciplined and put any savings away, if there are any. In 8 years I've made $200k on an $85k purchase. That's, on paper, but it is accounted for since my mom is assuming our mortgage to keep the tax rate low. We then "borrow" $100-200k, really gift, but there's loopholes and build and put down another $50-75k. New mortgage will likely be for about $300k. Refi as rates drop. That's not greedy, it's logical.

Yes I'll have a higher mortgage, but a new custom home with warranties on everything and I'll be doing some of the work and watching it like a hawk. I believe you said you have kids. Mine are at that age now where travel is getting tougher because of activities. We'll be home much more even though that doesn't make sense. We're usually traveling 2-3 months of the year. So having a big house didn't make sense. We also bought only thinking we'd have 2... but we have 3 now. Life changed. Renting would have put me in a shit spot in this current climate for renting and our situation.

I've been in a situation renting where the owner decided to sell and had to move. It's how we bought our current house but it sucked. I had no control. Fucking showings all the time. Keeping the place tidy with a baby and 2 year old. Fuck EVER being put in a situation I don't have control over. Paid the rent, were good tenants, no issues, he was just old and wanted to sell. Got our full security deposit back, so no animosity between us, it just sucked.

The rent versus buy comparisons only really work in Coastal areas and popular cities. You'd be a moron to rent where I'm at, but probably makes sense in CA for sure, again if disciplined in investing the rent savings. Otherwise paying down principle and appreciation over almost any 10 year stretch makes owning more lucrative.

If you're not handy though I wouldn't own. Shit breaks and it's a domino effect. You need your 6 month safety net of savings for normal expenses. If you own, I'd say have $20k just for the house for an emergency. Reality is you're paying all this to your landlord renting. They're then investing that in more homes or other assets. Oh and tax free money on appreciation up to $500k if married for having a roof over your head.

The real estate industry is shit, but renting makes no sense in my world. There are a bunch of other scenarios but this comment is too long. Renting is slavery to the landlord should be the term. Even in a tenant friendly city.

ad says

I am hoping wages go up 3% a year while home prices remain constant at 20% below from peak for at least 3 years. I'd like to see that for rentals as well.

I realize that is ideal for affordability but just like any asset or commodity in a free market, its not going to be the case as it will likely over correct due to market volatility.

From what I hear from people in my industry, even 3% isn't happening a lot of places, and inflation is way above that at this point.

Now where does market volatility come from...

Bitcoiner says

Short answer: historic low inventory.

Except this bullshit, and always has been. I've given you my own experience paying hundreds of dollars below market and moving way more than we should have in a hot area(San Diego). Like I already said, central banks, leverage, and greed. That's your short answer, but you have to read some history books to know that one.

Bitcoiner says

GNL says

I believe this is all part of the great reset. Bitcoiner, or any of us, may not like where it will ultimately lead.

Can you explain? I have no idea what you are referring to. What means great reset in plain English?

The plan to steal all your property, all your privacy, and all your freedom. Don't worry, will never happen(in our lifetime). But you may want to worry that you're playing the game they setup for you without knowing your opponent, or that you're even playing.

Bitcoiner says

GNL says

I believe this is all part of the great reset. Bitcoiner, or any of us, may not like where it will ultimately lead.

Can you explain? I have no idea what you are referring to. What means great reset in plain English?

They, whoever "they" are, want everyone to have less. The entire green agenda is about getting people to use less. Ideally, they want no one to own anything while they assure you that you will be happy. Look at the EV push. How many people are ever going to be able to purchase an EV? More and more people will fall down the economic ladder. What are you going to do with all of these people? The money to satiate them will come from those who own everything. That means lots of taxes and maybe even confiscations. It is my belief that that is where we are heading. Maybe it gets turned around but, I really do not think so. Housing, imo, will show us in that inventory will NEVER be high enough from this point forward.

Bitcoiner says

Wait what?! Are you saying you believe active listings don’t matter or are you saying you don’t believe the stats?

days on market is an indicator such as if it is more than 120 days on market than its likely a buyers market

i suspect if the average days on the market is 120 days or more, then supply is greater than demand

GNL says

They, whoever "they" are, want everyone to have less. The entire green agenda is about getting people to use less. Ideally, they want no one to own anything while they assure you that you will be happy. Look at the EV push. How many people are ever going to be able to purchase an EV? More and more people will fall down the economic ladder. What are you going to do with all of these people? The money to satiate them will come from those who own everything. That means lots of taxes and maybe even confiscations. It is my belief that that is where we are heading. Maybe it gets turned around but, I really do not think so. Housing, imo, will show us in that inventory will NEVER be high enough from this point forward.

Interesting theory. I’m not smart enough to understand all of this stuff. However, based on history, less people will own more while the majority will own/have less. You can call it the 1%ers and the 99ers, or 0.1%ers and 99.9%ers. To give yourself and your family/future generations a fighting chance, figure out how to become the 1%er or 0.1%er.

Bitcoiner says

https://www.redfin.com/city/16904/CA/San-Diego/housing-market

Days on market are nowhere near 120days currently. Inventory is historic low. Nuttboxer said that’s BS. So I want to understand why he is saying that.

Maybe people take their houses off the market after 3 months of not getting any reasonable offers.

I'd like to see the median and average price, especially for per square footage by zip code and by home type (condo, townhome, detached home,etc.) as well as lot size.

I'd compare that price data to median household income for that zip code.

.

GNL says

They, whoever "they" are, want everyone to have less. The entire green agenda is about getting people to use less. Ideally, they want no one to own anything while they assure you that you will be happy. Look at the EV push. How many people are ever going to be able to purchase an EV? More and more people will fall down the economic ladder. What are you going to do with all of these people? The money to satiate them will come from those who own everything. That means lots of taxes and maybe even confiscations. It is my belief that that is where we are heading. Maybe it gets turned around but, I really do not think so. Housing, imo, will show us in that inventory will NEVER be high enough from this point forward.

The goal is "equality for the masses" which means the bottom 90%. Its egalitarian with the Woke religion as the amusement or distraction (i.e., Woke theater or "bread and circus").

Cloward Piven Strategy (with tactics like open border and H1B visas) is one means they use to achieve this.

.

Eman says

figure out how to become the 1%er or 0.1%er.

That's like setting a goal for becoming president...anyone "can" become president but, not "everyone" can. It is in everyone's best interest to have a huge middle class. Without it, we become a third world country. I admit that I am a bit of a doomer. Think about how insane things are now. Listen to the things they are telling you/us. Look what they did to Trump without any repercussions whatsoever.

@Eman

If you are a rich guy cruising on passive income, get the fuck out of dodge. Get yourself a nice little vanity farm with goats, chickens and a potato and tomato garden.

Bitcoiner says

Absolutely, if sellers can’t get close to asking and are not forced to sell they take it off the market. You can easily test it yourself. Send out some low ball offers. I did (in the phoenix area). Nobody accepted. My investor buddy is doing the same right now. Wants a deal but no takers. Median household income / affordability has no impact to the market I believe. Especially not measured by median Forced selling and significant increases in inventory impacts price. You can’t have a price crash with historic low inventory. Which city is close to you?

What are your thoughts on the forbearance ending with Covid?

Bitcoiner says

Send out some low ball offers. I did (in the phoenix area). Nobody accepted.

Back in 2009 there were a lot of subprime mortgages and unqualified or delinquent home owners.

Now you have qualified home owners sitting on mortgages that average a 3.5% rate.

There is no motivation incentive for them to sell. And there is no panic as well.

.

Bitcoiner says

That was a big hope for the forbearance crash bros (remember “foreclosure tsunami”). Today, Out of all mortgages less than 1% are in forbearance

https://www.calculatedriskblog.com/2023/05/mba-survey-share-of-mortgage-loans-in.html?m=1

What do you think about it?

Its still a very tight labor market. Not like back in 2007 - 2010.

https://hbr.org/2023/02/is-the-tight-labor-market-due-to-fewer-workers-or-fewer-hours-worked

If labor market severely worsens, then there may be more risk of fire sales and foreclosures.
.

1337irr says

What are your thoughts on the forbearance ending with Covid?

Are you talking mortgages or renters not being kicked out for not paying during covid?

For mortgages they aren't going to foreclose. As long as lenders can show they have a performing asset they will, as long as it's legal. The cost of a foreclosure to a bank is exponentially a bigger loser than trying to work something out. A solid 5-7 years this was my work life.

Taxes
Insurance
Maintenance (banks are not in this business)
BPO's
Appraisals
Attorney fees (probably in house, but still a salary)
Additional accounting fees
REO 3rd party fees
Commission on the eventual sale
Loss of principle being paid
Loss of interest

This could be $30k/yr on even a cheap house ($150k). Banks/lenders learned this in the housing crash. Given the previous low interest rates and even now they're not that high historically, just the most in our lifetimes as homeowners, there is not reason to foreclose. Remember amortization as well. Banks are paid up front basically. so throwing a couple months on the back end is cheaper than foreclosure. 2006 they just knew the people couldn't pay because of shit lending standards. We're not there.

Banks need to lend to make money, so the recent bank failures are of concern. But looking at the market they're in, I think there are other mitigating factors that don't include housing at all. Coastal areas, especially CA would scare me a bit. And big cities. Crime, homelessness, filth, etc. WILL push people out of these urban areas and already are. Millennials are having kids and they are hover parents. They won't want to raise their kids in that. That is the weak spot in the market in my opinion. And cities suck. Not a crash though either.

But big coastal cities are losing a few big whales going to income tax free states. Think Joe Rogan at 13% or 12.9999% on his spotify contract living in TX versus CA. That's one rich individual, as an influencer essentially, taking millions and millions of tax dollars out of the states. The money is moving out, hence why I don't see most of your guys' situation getting any better. Wealthy people will cut and run and come back to visit. Airports do exist.

As far as covid renters being allowed to not pay during peak pandemic, I don't know anything about what that would do to rents and landlords. It's going to take a decade to unwind covid either way. It took about 7 years in my estimation to get back to some normalcy after the housing bust. I started RE in 2005 for perspective. So a good chunk of my adult working life was during that.

Not to turn it political, but this is why Biden needs to be out of office. We are going to NEED energy prices to come down in a big way as we bring back manufacturing. China is toast and we need manufacturing and are bringing it back, slowly. Even Biden. We can do green energy in conjunction with drilling and more fracking. Fuel, gas and electric to produce HAVE to come down or prices will skyrocket for goods as they already are.

We're only year 2.5 into this. We have another 7. I don't think housing will have an issue for now. Cost of living needs to go down on goods since China is lacking and dying and has no younger people to fill the void. We still have some help from other Asian companies, but their labor costs are higher and we still have to ship it across a massive ocean. We're nearing the point where it's cheaper to make it here I think as China crashes.

There Goes the Housing Market: Job Losses SPIKE Credit Pulled and New Zillow Data Worse Than Thought.

https://www.youtube.com/watch?v=fQd5DTmOlds

Al_Sharpton_for_President says

New Zillow Data

You lost me there man. I'd trust Biden's take on housing before zillow or even the tranny Bud Light thing spouting off real estate stats.

We need a TON of job losses for it to effect housing. 60%(ish) or so even own houses. More than you'd think are paid off in the older demo, so no mortgage. Most are low interest so grab a job at McDonalds and pay for the house.

I don't think people realize how thin things are job market wise as far as needing people. We're on the precipice of not being able to deliver USPS mail because they don't have enough people. Anyone can make $50k/yr running around in a car, jamming out to tunes, probably get high and make money. Shit they can get a federal pension and medical care.

I know I've been shitting on CA pretty hard lately, but this is a CA problem from my perspective. As a stand alone they'd be the 5th largest GDP country on the planet. Yes if it goes south that damages the rest of the country, but only to an extent. We're seeing a CA problem, not a national problem overall. This is like Greece or Spain in the Eurozone. Important economies, but it's not the downfall of the US.

Not going to do it again, but get Uhaul rates from SFBA to Boise, ID and then the reverse. Or Phoenix. Shit, I'll just do it again. See attached. You guys are fucked in CA.

WookieMan says

You lost me there man

RJ Talks is, for my money, one of the best economics bloggers around. He triangulates lots of data and reports to formulate a view of where things are going. And thankfully, he lacks the unnecessary affectation schtick that many of the bloggers use. E.g., Manic doomster - Reventure Consulting, obsequiousness preener - Real Estate Mindset.

The screenshot describes the uptick in unemployment payment direct deposits, as reported by Bank of America. I suppose the laid off Facebook programmer could get a job stacking produce in the local Safeway, but that won’t pay the mortgage.

GNL says

Eman

If you are a rich guy cruising on passive income, get the fuck out of dodge. Get yourself a nice little vanity farm with goats, chickens and a potato and tomato garden

Don't forget the mini cows!

https://www.texasmonthly.com/travel/miniature-cattle/

Eman says

How does one rise to the top of their preferred client list?

Reputation is paramount in any biz. Agents/brokers don’t get paid until the deal is closed. They’re essentially working for you, as a buyer, for free. That’s how I view it regardless of what others on this website think.

When we first started out, we called all the listing agents in our farm and asked them out for lunch. Do your homework so you can talk intelligently. Ask them why certain deals went down at such great prices while ot (some text omitted to shorten quote...) nt of them often so they remember you. Whoever brings you a deal, they own that listing for life. Unwritten rules in commercial real estate.

Do what you say you’re going to do. Keep your promise. Be reasonable. Don’t be a pain in the rear to work with so whenever they have a deal, they will remember who to call first, and who will close the deal without being a pain in the rear. They don’t get paid unless the deal is closed. A bird in hand is worth more than 2 in the bush. Be that bird in hand.

This is killer advice you don't see too often.

WookieMan says

Banks are paid up front basically. so throwing a couple months on the back end is cheaper than foreclosure.

This combined with the new 40 year mortgage may be how everyone becomes a renter to the banks. Adding on to the backend of the mortgage steals(?) equity (well, the borrower actually spent the equity via having no $$(?) to pay the mortgage at the time).

just_passing_through says

Eman says

How does one rise to the top of their preferred client list?

Reputation is paramount in any biz. Agents/brokers don’t get paid until the deal is closed. They’re essentially working for you, as a buyer, for free. That’s how I view it regardless of what others on this website think.

When we first started out, we called all the listing agents in our farm and asked them out for lunch. Do your homework so you can talk intelligently. Ask them why certain deals went down at such great pric (some text omitted to shorten quote...) ings you a deal, they own that listing for life. Unwritten rules in commercial real estate.

Do what you say you’re going to do. Keep your promise. Be reasonable. Don’t be a pain in the rear to work with so whenever they have a deal, they will remember who to call first, and who will close the deal without being a pain in the rear. They don’t get paid unless the deal is closed. A bird in hand is worth more than 2 in the bush. Be that bird in hand.

This is killer advice you don't see too often.

He didn't mention the capitol requirements though. :)

WookieMan says

Banks are paid up front basically. so throwing a couple months on the back end is cheaper than foreclosure.

Lenders are doing the same thing with delinquent auto loans as well.

GNL says

He didn't mention the capitol requirements though. :)

True but that's a lot more than I know...

Bitcoiner says

NuttBoxer says

Bitcoiner says

Short answer: historic low inventory.

Except this bullshit, and always has been.

Wait what?! Are you saying you believe active listings don’t matter or are you saying you don’t believe the stats?

Yes to both. I'm sure you learned about vested interest and validating sources in college right? If you pull all your data from an industry that lies in order to perpetually keep people buying and selling, you are deceived. If that industry is further part of a leveraging system built around greed and inflation, you will be completely lost.

My real world experience cuts through all that. I have lived in a "hot market" for over 20 years. During that time, I have moved on average every few years(some kind of wanderer disease, not recommended). I have always paid below market despite moving all the time in an area where inventory is supposed to be low. So am I just the luckiest fucking renter in Socal? Not impossible, but highly improbable.

ad says

Maybe people take their houses off the market after 3 months of not getting any reasonable offers.

Not may, they do. I see that a lot. And a pretty obvious ploy if you aren't so caught up in your narrative, you fail to exercise even the smallest amount of scrutiny.

Eman says

Interesting theory. I’m not smart enough to understand all of this stuff. However, based on history, less people will own more while the majority will own/have less. You can call it the 1%ers and the 99ers, or 0.1%ers and 99.9%ers. To give yourself and your family/future generations a fighting chance, figure out how to become the 1%er or 0.1%er.

Only true during centralization, which is dying in front of our eyes. We are moving back towards decentralization where the community and the individual will again become the seat of power.

NuttBoxer says

Eman says

Interesting theory. I’m not smart enough to understand all of this stuff. However, based on history, less people will own more while the majority will own/have less. You can call it the 1%ers and the 99ers, or 0.1%ers and 99.9%ers. To give yourself and your family/future generations a fighting chance, figure out how to become the 1%er or 0.1%er.

Only true during centralization, which is dying in front of our eyes. We are moving back towards decentralization where the community and the individual will again become the seat of power.

I hope you are correct.