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housing prices peak 2


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2022 Apr 29, 9:29pm   486,362 views  4,882 comments

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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.

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2849   mell   2023 Jul 16, 7:49am  

GNL says

WookieMan says


I honestly put it at child abuse level to raise a kid in any major city in America at least.

I would agree with this. The best years of my life were in Michigan. My father was a logger and we lived on 10 acres in the middle of almost nowhere. We had a pet racoon and a pet fox even (they do NOT make good pets).

Even leftoid Michigan is nice. At least last time I was in Ann Arbor it was pretty nice. May have changed by now who knows.
2850   WookieMan   2023 Jul 16, 9:06am  

mell says

Even leftoid Michigan is nice. At least last time I was in Ann Arbor it was pretty nice. May have changed by now who knows.

It's a college town. Student population generally exits during the summer. Not saying it's bad, but it's not really a city realistically. 9 months of the year it is. For 3 months it's gonna be a ghost town. Actually now that you mention college towns I hate them more than cities. IL popular schools are NIU, WIU ISU, and U of I. They're generally in the middle of nowhere and they're miserable.

Wife went to WIU and it sucked at a level that was awful. My parents went there too. I'd go out to the University of Iowa almost every weekend. You could drive 100mph and there were no cops. That town sucked (Iowa City). UW Madison is gay. I really dislike college towns in the midwest. If you're into binge drinking have at it, but they're lame places to live full time. Generally pretty shitty maintained as well. Might be different in other parts of the country, but college towns in the midwest are pure shit.
2851   mell   2023 Jul 16, 9:14am  

WookieMan says

Generally pretty shitty maintained as well.

It's been 20 years easily, but Ann Arbor looked very well maintained and clean. Foos was great there too, as were the bars. But that's 2 decades ago.
2852   WookieMan   2023 Jul 16, 9:51am  

mell says

WookieMan says


Generally pretty shitty maintained as well.

It's been 20 years easily, but Ann Arbor looked very well maintained and clean. Foos was great there too, as were the bars. But that's 2 decades ago.

It's probably all chains now. Sure there are probably local places that are good, but few and far between. You're probably looking at Chilis, BWW, Chipotle, etc. You have to find the dive bars in any city or town for the best food.

We did that in Nashville. No wife's or kids and was with a friend for a concert. Our hotel bartender, his brother and some random NFL player went out to the best Nashville dive bar. One of the weirdest days of my life. Buddy broke his leg previously and I got scissors from the front desk and we hacked his cast off at like 2am. I've been deemed a bad influence by his wife since, but it was still epic. It was his idea, not mine. I just got the scissors.
2853   GNL   2023 Jul 16, 10:14am  

We lived outside of a tiny town called Alpena Mi.
2854   B.A.C.A.H.   2023 Jul 16, 10:17am  

Rubicon says

Bay Area is nuts

During errands I'd drive past this gem frequently.

It wasn't on the market very long when it sold at "peak" last summer.

In a ghetto neighborhood (note bars on windows), one house over from a busy road with one of the worst public high schools in the Bay Area on the other side.

Note the estimated rent versus ownership price (3800 vs 6700).

The privilege of ownership.

https://www.zillow.com/homedetails/1785-Hopkins-Dr-San-Jose-CA-95122/19727040_zpid/
2855   just_passing_through   2023 Jul 16, 11:33am  

B.A.C.A.H. says

During errands I'd drive past this gem frequently.


Has a gorgeous view out the front of the East bay hills! What's not to like?
2856   GNL   2023 Jul 16, 11:45am  

B.A.C.A.H. says

Rubicon says


Bay Area is nuts

During errands I'd drive past this gem frequently.

It wasn't on the market very long when it sold at "peak" last summer.

In a ghetto neighborhood (note bars on windows), one house over from a busy road with one of the worst public high schools in the Bay Area on the other side.

Note the estimated rent versus ownership price (3800 vs 6700).

The privilege of ownership.

https://www.zillow.com/homedetails/1785-Hopkins-Dr-San-Jose-CA-95122/19727040_zpid/

Wow.

Serious question: what do most of these people do for a living? I can't imagine being a Doctor and live in something like this.
2857   Ceffer   2023 Jul 16, 12:36pm  

B.A.C.A.H. says

The privilege of ownership.

https://www.zillow.com/homedetails/1785-Hopkins-Dr-San-Jose-CA-95122/19727040_zpid/

Are the bars to keep the adrenochrome child slaves from escaping, or the local thuggies from invading?
2858   HeadSet   2023 Jul 16, 1:30pm  

GNL says

Serious question: what do most of these people do for a living? I can't imagine being a Doctor and live in something like this.

Yes, and where do the janitors, waitresses, and other lower wage folks live?
2859   GNL   2023 Jul 16, 2:00pm  

What good is it to be a professional power couple if this is all you can afford?
2860   Booger   2023 Jul 16, 2:05pm  

Rubicon says

in mind a professional couple makes 250-300k combined there.


Isn't that poor for 2 people in SV?
2861   Eman   2023 Jul 16, 2:48pm  

GNL says

What good is it to be a professional power couple if this is all you can afford?

This says a lot about the love/hate relationship about the Bay Area. $250-$300k/year for a couple is pretty much hand-to-mouth. People, who make it here, love it. It’s the land of opportunity. People, who struggle, either move out of state, or whine and bitch about it. I would think the same applies to other expensive cities like LA and NY.

I like the Bay Area. I just hate its politics and the CA politicians. The moment we have to pay more than $50k/year in state income tax. I’ll buy a place in NV and claim residency there. Not there yet, but I’m working towards that way.
2862   B.A.C.A.H.   2023 Jul 16, 3:20pm  

GNL says

what do most of these people do

Well..... one thing those savvy SF Bay Area homeowners do is pay property taxes.

One of their Privileges of Ownership for this "property" will be a tax bill of about $1,000 per month.

"It's ok, - you get it back on the appreciation". (Sky Is The Limit).

If you say so, homie.
2863   B.A.C.A.H.   2023 Jul 16, 3:31pm  

HeadSet says


Yes, and where do the janitors, waitresses, and other lower wage folks live?

Far out, (but that's getting insane also), or in shabby beat up 1970's RVs on the streets. In backyard sheds, "not converted" garages, and being exploited hot bunking in shabby old apartments (those are everywhere, - just ask eman).

Increasingly, fewer of those folks exist in these parts. It's part of the reason queues are long, hours are shortened, restaurants close. Not enough of the Exploited Class go around serving the elites.
2864   GNL   2023 Jul 16, 3:42pm  

Does anyone have knowledge of why some high end areas have gone bust throughout history in some areas? Lots of reasons I suppose. Interesting to see where the Bay area is in 10, 20 years or so. It would stand to reason if no "staff" can afford to live close enough, the place will change. I'm no Nostradamus though. Maybe the left really do see themselves as the elite. It might explain why all of a sudden they now allow ADUs?
2865   Eman   2023 Jul 16, 5:07pm  

As much as the Bay Area is expensive, I can always find deals and live in a decent part of town for less than others. There’s always a solution for a problem. Be a problem solver rather than a whiner.

Just look at this 4plex in a decent part of town. It’s being surrounded by SFHs costing $1.5M or so. I checked it out last year. I asked the family if anyone wanted it. We could buy and keep it in the family. No one said anything.

I know both listing agents on this deal so I know at what price and terms I had to offer to get it. Live in the 3/2, and have 3 rentals for just over $2M. It’s right by the hospital so other units could easily convert to travel nurse rentals and collect $3.5-$4k/mo/unit. Why settle for a small SFH on Hopkins? 🤷‍♂️

https://redf.in/oK96Xz
2866   Eman   2023 Jul 16, 5:08pm  

GNL says

Does anyone have knowledge of why some high end areas have gone bust throughout history in some areas? Lots of reasons I suppose. Interesting to see where the Bay area is in 10, 20 years or so. It would stand to reason if no "staff" can afford to live close enough, the place will change. I'm no Nostradamus though. Maybe the left really do see themselves as the elite. It might explain why all of a sudden they now allow ADUs?

Can you share some of these high end areas that went bust? I’m not familiar with them.
2867   WookieMan   2023 Jul 16, 6:47pm  

Eman says

I know both listing agents on this deal so I know at what price and terms I had to offer to get it. Live in the 3/2, and have 3 rentals for just over $2M. It’s right by the hospital so other units could easily convert to travel nurse rentals and collect $3.5-$4k/mo/unit. Why settle for a small SFH on Hopkins? 🤷‍♂️

Who in the flying fuck wants to live in a 4 unit? Shared walls? Noise? City? Fuck that. I'd rather have minimum wage income than live like that out in the country. Been there and done that in Chicago. It was awful. Hell it was an 8 unit.

I don't really care about the net. At the end of the day you're living in a shit hole. Even the best of neighborhoods. Again, been there done that. Cities are the absolute worst place to invest currently.
2868   Eman   2023 Jul 16, 8:58pm  

WookieMan says

Eman says


I know both listing agents on this deal so I know at what price and terms I had to offer to get it. Live in the 3/2, and have 3 rentals for just over $2M. It’s right by the hospital so other units could easily convert to travel nurse rentals and collect $3.5-$4k/mo/unit. Why settle for a small SFH on Hopkins? 🤷‍♂️

Who in the flying fuck wants to live in a 4 unit? Shared walls? Noise? City? Fuck that. I'd rather have minimum wage income than live like that out in the country. Been there and done that in Chicago. It was awful. Hell it was an 8 unit.

I don't really care about the net. At the end of the day you're living in a shit hole. Even the best of neighborhoods. Again, been there done that. Cities are the absolute worst place to invest currently.

Let’s just say you don’t know about the area, and we don’t share the same value. We’ll have to agree to disagree.
2869   RWSGFY   2023 Jul 17, 2:21am  

Eman says

GNL says


Does anyone have knowledge of why some high end areas have gone bust throughout history in some areas? Lots of reasons I suppose. Interesting to see where the Bay area is in 10, 20 years or so. It would stand to reason if no "staff" can afford to live close enough, the place will change. I'm no Nostradamus though. Maybe the left really do see themselves as the elite. It might explain why all of a sudden they now allow ADUs?

Can you share some of these high end areas that went bust? I’m not familiar with them.


Wasn't Detroit a kind of equivalent of Bay Area in the heyday of American car manufacturing?
2870   GNL   2023 Jul 17, 3:16am  

Is it possible for a place to out price itself? Or does that even make sense?
2871   UkraineIsTotallyFucked   2023 Jul 17, 4:26am  

RWSGFY says

Wasn't Detroit a kind of equivalent of Bay Area in the heyday of American car manufacturing?


Yup. It was.
2872   zzyzzx   2023 Jul 17, 6:22am  

GNL says

Is it possible for a place to out price itself?


Yes.
2873   Eman   2023 Jul 17, 8:09am  

GNL says

Is it possible for a place to out price itself? Or does that even make sense?

Based on what I’ve learned about history, as an area becomes more and more expensive, the population is being replaced from one class of people to another. Real estate appreciation should slow down in the future to a more sustainable level, but it would still be expensive for the average Joe/Jane.

The only way for an area to have real estate price collapse is the industry in that area to get wiped out like Detroit. Every time I thought it was over for the Bay Area, new innovations was born to keep the area thriving. It’s simply amazing and madness at the same time
2874   NuttBoxer   2023 Jul 17, 8:30am  

Eman says

Rents are cooling in some markets.


Surprised Yuma isn't on that list. Although the drop has been more recent.
2875   NuttBoxer   2023 Jul 17, 8:32am  

mell says

Even leftoid Michigan is nice. At least last time I was in Ann Arbor it was pretty nice. May have changed by now who knows.


Biggest change would be the chemical smell and the acid rain..
2876   NuttBoxer   2023 Jul 17, 8:33am  

Eman says

If I can work from home, I’m out of here. This explains the exodus of Californians to other states thanks to the pandemic and WFH.


People have been leaving in droves for years prior to the Scamdemic. The state has been anti-business since Adobe and Yahoo left. It's been anti-normal for a long time, and the normies got tired of it.
2877   Eman   2023 Jul 17, 8:45am  

NuttBoxer says

Eman says


If I can work from home, I’m out of here. This explains the exodus of Californians to other states thanks to the pandemic and WFH.


People have been leaving in droves for years prior to the Scamdemic. The state has been anti-business since Adobe and Yahoo left. It's been anti-normal for a long time, and the normies got tired of it.

Stats don’t seem to agree with your observation. Indeed CA has seen people leaving since the pandemic, but not prior.

2878   NuttBoxer   2023 Jul 17, 8:51am  

Does that chart account for illegals? Or the people who sold to move into a mansion elsewhere? On that second point they had to sell to someone, but I do give preference to long term residents over ones who just got here.
2879   GNL   2023 Jul 17, 9:21am  

Eman says

GNL says


Is it possible for a place to out price itself? Or does that even make sense?

Based on what I’ve learned about history, as an area becomes more and more expensive, the population is being replaced from one class of people to another. Real estate appreciation should slow down in the future to a more sustainable level, but it would still be expensive for the average Joe/Jane.

The only way for an area to have real estate price collapse is the industry in that area to get wiped out like Detroit. Every time I thought it was over for the Bay Area, new innovations was born to keep the area thriving. It’s simply amazing and madness at the same time

The bay area isn't the only place.
2880   GNL   2023 Jul 17, 9:31am  

Eman says


GNL says


Is it possible for a place to out price itself? Or does that even make sense?

Based on what I’ve learned about history, as an area becomes more and more expensive, the population is being replaced from one class of people to another. Real estate appreciation should slow down in the future to a more sustainable level, but it would still be expensive for the average Joe/Jane.

The only way for an area to have real estate price collapse is the industry in that area to get wiped out like Detroit. Every time I thought it was over for the Bay Area, new innovations was born to keep the area thriving. It’s simply amazing and madness at the same time


Northern Virginia is crazy also. I don't understand these housing doomers.

I can't help but believe somethings no Bueno though.
2881   B.A.C.A.H.   2023 Jul 17, 9:49am  

GNL says


Every time I thought it was over for the Bay Area, new innovations was born to keep the area thriving.

It's a self-selected population of newcomers.

Haolies and second generation of some non-haolie immigrants continue to leave. They're replaced mainly by Asian immigrants and south-of-the-border (including many illegal "migrant") types.

For these folks, even being packed like rats hot bunking in shabby old apartments and homes, backyard sheds and garages is comfortably palatial living compared to where they came from. This is the dynamism of "Silicon Valley" and the SF Bay Area. If you can't "make it here" like the ®eal Estate moguls of Hong Kong, well then you just don't have what it takes: you're a Lazy and Stupid Loser.
2882   Eman   2023 Jul 17, 2:42pm  

There are good reasons to get bearish on commercial real estate, especially the office space, but don’t overly be bearish. The owners and developers will find a way to make use of the space if they can’t lease them out. Here’s an example:

https://www.sfgate.com/local/article/viral-bay-area-zillow-listing-office-to-housing-18199614.php

I also saw an office building got converted into a Public Storage. Very well done.
2883   NuttBoxer   2023 Jul 17, 2:49pm  

A bunch of business's have to shutter due to economic downturn(reasons don't matter). Further people are leaving cities(again reasons don't matter). Further more people are working from home. CRE should have blown up at least a year ago.
2884   Eman   2023 Jul 17, 2:51pm  

“Northern Virginia is crazy also. I don't understand these housing doomers.

I can't help but believe somethings no Bueno though.”

@GNL,

The same thing happens here. Some cities priced out even the professionals. I can only gather knowledge from history and Bay Area retirees/veteran real estate investors, and make me bets accordingly, rightly or wrongly.

Just want to make my stay on this earth as enjoyable as possible. Can’t take anything with me when I’m gone. However, I’m willing to put in the hard work for 10 years so I can enjoy 40 years rather than the other way around. It’s a personal choice.
2885   Eman   2023 Jul 17, 2:53pm  

NuttBoxer says

A bunch of business's have to shutter due to economic downturn(reasons don't matter). Further people are leaving cities(again reasons don't matter). Further more people are working from home. CRE should have blown up at least a year ago.

If it should have blown up at least a year ago, why hasn’t it blown up, or could it be that the blow up is not as big as people anticipate?
2886   GNL   2023 Jul 17, 3:59pm  

Ok, so what's going to happen...

1) Rates come down and save the economy by making housing valuations shoot the moon.

2) Home values come down and save the economy by RE transactions shooting the moon.

3) RE transactions keep going lower until incomes double and everyone can afford a home and we are saved.

4) RE valuations and rates stay where they are and transactions founder. This cause the economy to fall off a cliff because so much of our economy depends of household formation.
2887   Eman   2023 Jul 17, 4:07pm  

History suggests real estate prices go up, then rates go up to cool it down. The Fed will overdo with the rate hikes. Then real estate prices will go down, and will likely drive the economy into a recession. Then the Fed will cut rates to stimulate the economy.

As ironically as it sounds, we’ll have a combination of lower real estate prices and lower rates for those who can buy and finance in time of turmoil. This is why there’s a saying “Fortunes are made during recessions.”
2888   NuttBoxer   2023 Jul 17, 4:23pm  

Except that the central bank has no control over interest rates. They certainly attempt to manipulate through printing money, but that farce has not long to live.

Interest rates will continue to rise, which means housing prices will continue to fall. Contrary to all the bullshit people peddled before '08, and some still peddle now, basic economics dictates you cannot charge more than what someone is willing to pay. But housing is collateral damage. The real bloodbath will be the US dollar, bonds, and everyone who's net worth is tied entirely to paper.

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