patrick.net

.

https://www.mortgagenewsdaily.com/markets/mortgage-rates-11032023

Rates for 30 year mortgage recently peaked to 23 year high of 8% ...now sitting at 7.5%

I would not be surprised if the 30 year mortgage rate steadies between 5 and 6% by next spring

.

ad says

.

https://www.mortgagenewsdaily.com/markets/mortgage-rates-11032023

Rates for 30 year mortgage recently peaked to 23 year high of 8% ...now sitting at 7.5%

I would not be surprised if the 30 year mortgage rate steadies between 5 and 6% by next spring

.

they won’t lend you at 6 and risk when treasuries give that without the risk.

FortwayeAsFuckJoeBiden says

ad says

.

https://www.mortgagenewsdaily.com/markets/mortgage-rates-11032023

Rates for 30 year mortgage recently peaked to 23 year high of 8% ...now sitting at 7.5%

I would not be surprised if the 30 year mortgage rate steadies between 5 and 6% by next spring

.

they won’t lend you at 6 and risk when treasuries give that without the risk.

I understand as far as risk premium, or risk vs reward or payoff.

The 10 Yr Treasury tends to track the 30 year mortgage rate. Also mortgages typically only last about every 8 years as people move and pay off their mortgages.

The 10 Year Treasury is at 4.5% so a 6% mortgage rate is offering a 1.5% risk premium.

https://www.cnbc.com/quotes/US10Y

When we got our 3% mortgage rate with the Veteran Affairs (VA) in August 2016, the 10 Year Treasury was around 1.6%.

.

One of the houses in my neighborhood ( a twin of ours) just sold for a record high price. One has to wonder what exactly is going on, but the ones coming on market recently are snapped up right away now after a 9 month lax period when they languished and prices dropped.

It doesn't make any sense.

ad says

Housing stays flat while median income grows at least 2% annually greater than housing for the next 5 years.

If what I heard on rumble.com yesterday is true UAW union won big time this past week and will now be making $89/hr which is about 185K/year. That's without overtime.

Okay, I can't find anything like that at all in the news, maybe he's mistaken and it's 89K/year, I do see some asked for that: https://rumble.com/v3svpqs-big-win-for-striking-auto-workers.html

Yeah, it's $42/hour which works out to 89K/year: https://www.cnbc.com/2023/10/30/gm-uaw-tentative-agreement-labor-strike.html

Jimmy has his comment section in an uproar.

https://www.businessinsider.com/lower-interest-rate-mortgage-new-construction-house-homebuilder-2023-11

it's possible to get a 4.8% mortgage today — here's how

High mortgage rates have deterred many would-be homebuyers from purchasing a property over the last year.

In September, according to the National Association of Realtors, the sales of existing homes in the US declined 15.4% from a year ago — a sign that buyers are continuing to balk at the high cost of homeownership.

But here may be a glimmer of hope: People may have more luck securing a lower mortgage rate if they buy a new-construction home. Mortgage industry veteran Tawn Kelley, the president of financial services at homebuilder Taylor Morrison, told Insider's Alex Nicoll that it's possible to secure a rate as low as 4.8% when buying a new home.

The typical rate right now is above 7%, according to Freddie Mac.

Kelley's tips include seriously considering taking out a mortgage with the builder of the new home and asking for every possible incentive.

Many builders can provide lower interest rates or financing assistance, she said. While that may sound too good to be true, Kelley advises buyers not to automatically dismiss their homebuilder's mortgage offerings as a marketing ploy.

At the end of the day, she added, builders just want to sell more houses. That's how they make the most profit. If offering a favorable mortgage helps them do that, don't second-guess the motivation.

"Finance sells homes, and a house doesn't become a home unless we have the ability to get that customer to the closing table, and they can qualify and confidently make their mortgage payments," Kelley said.

Kelley also suggested that buyers negotiate with builders for every available incentive, as they could add up to substantial savings. Builder incentives include rate buydowns, mortgage rate locks, and forward commitments. (Read more about these incentives and how to get them in Nicoll's story.)

Taylor Morrison has been able to help customers lower their rates from around 8% to 4.875%, Kelley said, reducing the total monthly payment by a third.

However, she warned that some financial incentives can increase over the course of the loan, including temporary rate buydowns.

Failing to budget or plan accordingly could put homebuyers at risk of experiencing problems that cropped up during the 2008 housing crisis, when many people who took out adjustable-rate mortgages failed to account for their monthly costs increasing as interest rates rose.

https://www.reddit.com/r/realtors/comments/17ns662/how_are_your_higher_end_listings_preforming_in/

How are your higher end listings preforming in this market?

I have a handful of $700k-$900k (Close to luxury in my area) listings that have had 0 showings in the last 40 days, even with 5-10% price reductions and 2/1 buydown offers. Recent comps even justify a higher price, but its just been a dead stop.

I know this question is likely to be area specific. But in your experience, how is the Luxury market in your area, what are you doing to land showings/exposure with the higher rates bogging everything down? How have your new higher priced listings preformed? How did they sell?

https://www.reddit.com/r/realestateinvesting/comments/17ni3pg/should_i_rip_the_bandaid_off_and_sell_my_condo/

Should I rip the bandaid off and sell my condo?

I bought my condo in 2019 in Oakland for $405,000.

I lived in it for four years but decided to rent a place with my girlfriend.

I owe roughly $367,000. My payment is $3,400. The breakdown is $2,900 mortgage (taxes and insurance included) and $500 HOA. ~$670 goes to principal and $370 to PMI.

I tried to sell it from June-September for $390,000 (eventually lowered price) and got no offers. Condo prices dropped. My real estate agent and comps said it would be valued ~$350,000 leaving me with a large out of pocket sell price (which I can afford)

Since October I have been renting it out for $2,100. My gut tells me no and I should try and sell again once the lease is up but I’m wondering if there is any way this is justifiable?

I have also thought about a lump sum principal payment to get to the 20% LTV to get rid of the PMI.

zzyzzx says

have also thought about a lump sum principal payment to get to the 20% LTV to get rid of the PMI.

Ordinarily, I would say that might be his best option if he wants to hang in there for a while.

...but in this case, I think he's fucked. High interest rates (even if they lower they will still be higher than before) is fucking housing prices as people masturbated to. This is because Deglobalization adjustments and Boomers retiring and taking their money (aka Capital) out of their retirement investments over the next 10 years. Labor shortages will be with us for a while, too. Demographics are a bitch.

PumpingRedheads says

Labor shortages will be with us for a while, too. Demographics are a bitch.

That is why there needs to be more innovation and productivity. There needs to be better ways as far as caring for the elderly who do not have children and who can live in assisted living communities with the help of technology. This allows for more people to be cared for by 1 nurses assistant, by leveraging technology.

Robots will be of great value in our daily lives. Think about how the Internet has contributed to greater standard of living. Just look at the benefits of a simple security camera like through Wyze or Blink.

.

zzyzzx's quotations from article

I bought my condo in 2019 in Oakland for $405,000.
I lived in it for four years but decided to rent a place with my girlfriend.

It seems like you made a long term decision (buying a condo) that didn't work with your long term needs.

I owe roughly $367,000. ...
I tried to sell it from June-September for $390,000 (eventually lowered price) and got no offers. Condo prices dropped. My real estate agent and comps said it would be valued ~$350,000 leaving me with a large out of pocket sell price (which I can afford)

Sounds like you are under water. Maybe contact the mortgage holder and work out a deal under pressure of a strategic default.

My payment is $3,400. The breakdown is $2,900 mortgage (taxes and insurance included) and $500 HOA. ~$670 goes to principal and $370 to PMI. ...
Since October I have been renting it out for $2,100. My gut tells me no and I should try and sell again once the lease is up but I’m wondering if there is any way this is justifiable?

You're probably not going to move back in, so that's not a reason to hold on. Also, paying $3400 and collecting $2100 while taking on all the risks of landlording and wear-and-tear of the place is a pretty bad monthly loss. Since you appear to be underwater, I don't think selling is the way to go; you may have better options. You've been paying PMI ... well, now it's time put that insurance to use!

I have also thought about a lump sum principal payment to get to the 20% LTV to get rid of the PMI.

I would say that you shouldn't have purchased the place at all if you couldn't make the down payment and get the best rate. But now you might have an advantage by not putting 20% down.

Overall, I'd say you should consult someone who can give you strategic options, given that you are underwater and going down pretty quickly with the current renter situation. Renters can also become a problem with whatever you decided to do.

ad says

That is why there needs to be more innovation and productivity

Older societies don't produce that.

.

Fannie Mae, for example, projects 30-year fixed-rate mortgages will start 2024 at an average of 7.1% and fall to 6.7% by Q4 2024.

"In 2024, do not anticipate mortgage rates to drop significantly. The current market environment leans towards stability rather than volatility and fear," says Nathaniel Pitchon-Getzels, a buyer's agent and listing agent at Compass.

"Before we see rates come down, it's possible we'll experience another rate increase. If they do decrease, it's likely to be a gradual shift, possibly occurring at the end of the second quarter or the beginning of the third quarter," he adds.

https://www.cbsnews.com/news/will-mortgage-rates-go-down-in-2024/

,

PumpingRedheads says

ad says

That is why there needs to be more innovation and productivity

Older societies don't produce that.

Well America has gone through an industrial revolution and then the internet and computer revolution starting in late 1990s.

So I don't see a reason for another period of innovation like we had in the late 1990s that led to the smartphone, videoconferencing, internet security cameras, etc.

There is enough of a population pool that is smart to foster new inventions and concepts that promote innovation which improve our quality of life and standard of living.

.

Before there was Sam Bankman-Fried...there was WeWork!

WeWork Finally Files for Bankruptcy two Years after Going Public via SPAC. Office Landlords, CMBS Holders Face the Music, Stockholders Wiped Out

https://wolfstreet.com/2023/11/07/wework-finally-files-for-bankruptcy-2-years-after-going-public-via-spac-office-landlords-cmbs-holders-face-music-stockholders-wiped-out/

Not sure if this was posted on this thread or another Pat.net thread.

I read this on MishTalk. This is a way to bailout some commercial RE given trends such as work from home.

Hope this leads to 2 bedroom apartments costing $200,000 so that $45 billion will lead to 225,000 new apartments.

****************

Biden is funneling $45 billion from clean energy incentives in the ridiculously named Inflation Reduction Act (IRA) into housing conversions.

https://www.wsj.com/real-estate/commercial/turning-empty-offices-into-apartments-is-getting-even-harder-b6659020

ad says

Biden is funneling $45 billion from clean energy incentives in the ridiculously named Inflation Reduction Act (IRA) into housing conversions.

Translation - Warehouse accommodations for mass illegals.

PumpingRedheads says

Before there was Sam Bankman-Fried...there was WeWork!

WeWork Finally Files for Bankruptcy two Years after Going Public via SPAC. Office Landlords, CMBS Holders Face the Music, Stockholders Wiped Out

https://wolfstreet.com/2023/11/07/wework-finally-files-for-bankruptcy-2-years-after-going-public-via-spac-office-landlords-cmbs-holders-face-music-stockholders-wiped-out/

Its founder (https://en.wikipedia.org/wiki/Adam_Neumann) was paid at least $1.5 billion before being pushed out.

I bet he was happy he got pushed out and not holding the bag as far as worthless stock in WeWork. Who were the fools who bought WeWork when it was within $300 to $500 range ?

.

ad says

Its founder (https://en.wikipedia.org/wiki/Adam_Neumann) was paid at least $1.5 billion before being pushed out.

I bet he was happy he got pushed out and not holding the bag as far as worthless stock in WeWork. Who were the fools who bought WeWork when it was within $300 to $500 range ?

Who was smart enough to buy it at $50?

https://www.reddit.com/r/RealEstate/comments/17psis6/trouble_selling_socal_condo/

Trouble selling SoCal condo

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/17psis6/trouble_selling_socal_condo/

Trouble selling SoCal condo

The price is too damn high.

RWSGFY says

The price is too damn high.

I don't know why so many people can be so dumb as to not understand that.

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/17psis6/trouble_selling_socal_condo/

Trouble selling SoCal condo

AND this is why the housing market is fucked, despite some 'housing experts' claim that inventory will remain locked.

Renting the place out is not an option; without selling we can’t buy another home, and the likelihood of selling is dwindling for the aforementioned reasons, not to mention insurance companies pulling out of California.

For there will always be people forced to sell. And over time, that number will grow. And so their sales will be the ones that set market prices, which will lead to more falling home values. Then there will be an exit stampede. Lot of short sales and all the rest we saw on 2009 - 2011, etc.

Sure, condos are getting hit badly at first. That is the canary in the coal mine.

An aside: How come you never hear about housing coops having the same problems as condos in the news? Anyone know?

PumpingRedheads says

An aside: How come you never hear about housing coops having the same problems as condos in the news? Anyone know?

Housing coops do not allow renters and also buyers have to get approved by the board.

Condos allow renters and the HOA boards do not approve buyers. Some HOA boards of condos may have restrictions on percentage of condos allowed to rent to ensure there is a desired balance between renter-occupied units and owner-occupied units.

.

ad says

Housing coops do not allow renters and also buyers have to get approved by the board.

Bingo! Thought as much. I wonder how they get around the anti-discrimination laws.

https://finance.yahoo.com/news/meredith-whitney-housing-prices-are-due-for-a-fall-starting-in-2024-100042234.html

Housing prices are due for a fall starting in 2024

https://www.reddit.com/r/personalfinance/comments/17q48ff/housing_sell_at_a_loss_or_rent_at_a_loss/

Sell at a loss or Rent at a loss?

We need to move for my job in the next few months.

We purchased a brand new home in May 2022 for 640k with 20% down.

Mortgage + Taxes + HOA is ~$4850.

Current Mortgage Balance is $501,000.

Current rental in our neighborhood is around $4000/mo.

Home is worth maybe 650k now. They are still building in my development.

If we rent for $4000/mo, this leaves us paying $850/mo out of pocket & also 1 month's rent to our realtor listing the place. We'd also lose $4850/mo anytime we're between renters. So $10,200 + $4000, at a minimum each year; $14,200.

At 5 years, & a minimum of $71k in loss, the house would need to appreciate in value to something close to 750k to be in the green for a sale & that's IF we can maintain full occupancy in the rental.

Our dilemma now is whether we sell at a loss, probably clear around 610k after realtor fees, losing us 30k. Or rent at a loss of $14,200/year (at a minimum) & hope that eventually the value of our house exceeds the losses we're taking in rent.

.

the housing stock or inventory has to increase as far as what is available to long term renters and buyers

if rent becomes cheap enough then I would rent and then use the savings from renting to add to my retirement savings like in a conservative mutual fund or ETF like 50% stock / 50% investment grade bond

I want the mutual fund to annually appreciate at least the same as the rate of real estate appreciation

.

Sooooooooo many people are just saying "Fuck It". I will just buy my kid a house.

Over a third of house purchases in September (most recent stats available), were done with all cash...no financing.

https://www.msn.com/en-us/money/realestate/bypassing-mortgage-rates-share-of-us-homes-bought-with-cash-hits-highest-level-in-nearly-a-decade/ar-AA1jER0E?ocid=hpmsn&cvid=485b61f28b794863b44df678e847825c&ei=20

The move down buyer has tons of cash/equity. Middle class homes will stay unaffordable to the middle class. There will need to be government intervention. Does anyone find it interesting that the government helped when the financial system was fucked in 2008? Remember the $8,000(?) first time buyer credit?

GNL says

The move down buyer has tons of cash/equity. Middle class homes will stay unaffordable to the middle class. There will need to be government intervention. Does anyone find it interesting that the government helped when the financial system was fucked in 2008? Remember the $8,000(?) first time buyer credit?

First time buyer credits are available all across the country. They average out at a little over $10k now. Also, for those buying with a mortgage, about 25% of them receive down payment help from their parents.

All these factors: cash buyers, down payment assistance from the government and help from parents with the down payment are elevating the price to income ratios to levels that are much higher than statistical norms.

I think people underestimated how much AirBNB inflated the market too. Reminded me of 2008 when waiters owned 5 houses. I know so many people that have a house as an AirBNB investment.... It's super saturated and I bet another bubble to drop. People are waking up to the fact it's so much easier and cheaper just to stay in a regular hotel...

The 2 advantages airbnb have are 1. Unique locations.
2. Unique accommodations.

I won't do AirBnB anymore due to the woke bullshit. I've looked at the competitors, and have found good hotels to be the cheapest option consistently in the past year.

zzyzzx says

Sell at a loss or Rent at a loss?

They just need to understand what alluded them the first time around, market direction.

https://www.inman.com/2023/11/08/loandepot-warns-more-layoffs-are-coming-but-on-a-smaller-scale/amp/

LoanDepot warns more layoffs are coming

.

A “silver tsunami” of baby boomers will start downsizing next year and 2025.

In terms of the housing market, baby boomers pretty much have it made. They own homes worth a whopping $18 trillion combined, compared to just about $5 trillion for millennials as of the first quarter of 2023, according to a Redfin report released in August.

The ‘silver tsunami’ is about to hit the housing market—but millennials and Gen Zers may not come out any better in the wash

https://fortune.com/2023/11/09/housing-market-affordability-silver-tsunami-home-prices-baby-boomers-millennials-gen-z/

.