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WookieMan says
And this is when you get a HELOC or cash out refi and pay yourself with other people's money (banks).
If you are taking this HELOC from your residence, it is not "other people's money." It is a loan you have to pay back with interest, and for most of the country that interest is not deductible because of today's high standard deduction. No different buying that new truck with HELOC than financing it through Ford Motor Credit.
“This is why I've been making fun of Rubicon when he said he didn't care if he lost equity if/when RE goes down. “
You don’t lose equity just because your house price goes down. That’s like noob/rookie level. Homeowners don’t treat their house like a stock and sell shortly after they buy. Do you own a house? Do you tell you friends: my Zillow value went dont a % point. They’d laugh at you. Have you ever heard someone writing off an unrealized loss on a house?
In most cases you make money in RE if you hold on for the long run. Believe me kiddo, nobody is going to go for your “I lost equity BS statements”. Just wake up, stop renting, get yourself a house and forget the noise. No reason to overthink this and make the same noob comment over and over again.
“I’ve seen more people fail because of liquor and leverage — leverage being borrowed money. You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.” - Warren Buffett
“More activity does increase inventory.”
More activity gives you more choice. It means more for sales signs. It’s a good thing but it doesn’t move the active inventory number higher. I don’t care if there is a month or two delay in selling and buying. Often, you purchase while you haven’t sold your house yet.
Taking one off the market and adding one doesn’t increase inventory, no matter how you spin it.
NAR’s reported inventory
My friend sent this to me. $750k for this fixer upper in East San Jose, blue collar working class neighborhood.
Eman says
My friend sent this to me. $750k for this fixer upper in East San Jose, blue collar working class neighborhood.
Its appreciated about 5% annually since 1998. I recall Professor Shiller stating the long term (+50 years) median annual appreciation is 4%.
.
That’s all there is to it. It’s not rocket science.
With HELOC at 8%…ish now, it no longer makes sense to take the risk. This puts a liquidity constraint to the real estate market.
This. I rented my whole life until last year. I'll NEVER go back. Owning is bomb but I also bought beneath my means in an amazing area and I have lots of cash to do stuff to the house. I get to modify my castle just the way I want it and no one (landlord) can easily take it away from me as long as I pay my fixed payments. Being a landlord's bitch is emasculating.
Renting is a lose/lose if you need stability. I'm not trying to change your mind. I'm just saying as an owner, it doesn't make sense to me having done both. You do you. Fact is there are cheaper places to own by a long shot outside of CA or even AZ or any West of the Rockies state, CO included.
One penny, which compounds every day for a month (30 days), will be over $1M. The power of compound interest. The power of control and leverage. Let time do the heavy lifting. It’s like planting a tree. It’s a one time effort while we get to harvest it for the rest of our lives.
Eman says
One penny, which compounds every day for a month (30 days), will be over $1M. The power of compound interest. The power of control and leverage. Let time do the heavy lifting. It’s like planting a tree. It’s a one time effort while we get to harvest it for the rest of our lives.
Actually, it's 10 million! But what's an extra zero between friends? :-)
Interesting observation as housing accounts for 33-42% of the CPI. OER = Owners’ Equivalent Rent.
https://x.com/joecarlasare/status/1690715526211817472?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q
Two more insurance companies will exit the California homeowners market, further narrowing options for people seeking to insure their home or to purchase a house with a mortgage.
AmGUARD Insurance—a subsidiary of Berkshire Hathaway GUARD Insurance Companies—will withdraw its homeowners and personal umbrella programs in California, while Falls Lake Insurance will also end its homeowners program.
Both companies made the announcements in little-noticed filings submitted to the state regulator on July 21.
The two companies are the latest insurers to rush for the exits in California or limit their business in the state during the past year. But unlike heavyweights State Farm and Allstate, which declined to sign new homeowners business in the state, AmGUARD and Falls Lake will drop their existing policyholders.
That will force tens of thousands of California homeowners to seek new coverage at a time when the available options are growing fewer.
That will force tens of thousands of California homeowners to seek new coverage at a time when the available options are growing fewer.
that coverage will have very high deductibles
Why are they leaving...fires?
Two insurance industry giants have pulled back from California's home insurance marketplace, saying that increasing wildfire risk and soaring construction costs have prompted them to stop writing new policies in the nation's most populous state.
Two insurance industry giants have pulled back from California's home insurance marketplace, saying that increasing wildfire risk and soaring construction costs have prompted them to stop writing new policies in the nation's most populous state.
Anyone forecasting a RE crash would need to have an idea of how inventory is supposed to skyrocket from todays levels:
Eman says
we need massive job losses
Eman says
job losses have been on the rise since October 2022
Good for you!
Folks pushed out of the housing market = more renters to exploit.
EMAN,
“ Now, record low inventory, strict lending requirements for the last 1.5 decades, home builders are not over building, we need massive job losses to create distressed sales.”
Bingo! Until we see significant increases in unemployment we don’t need to worry about skyrocketing inventory.
Bingo! Until we see significant increases in unemployment we don’t need to worry about skyrocketing inventory.
As Charlie Munger said sometimes it’s best to sit around and twiddle our thumbs. This is likely one of those times.
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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.