patrick.net

ad says

That is why there needs to be more innovation and productivity

Older societies don't produce that.

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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/

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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.

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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.

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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 ?

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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.

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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.

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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

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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

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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/

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WHAT?????? Home prices might go down. Not with "free money" Joe running things. He's talking about another $25 billion in "free Money" to new home buyers. This is in addition to the $45 billion earmarked for converting commercial properties to residential. Of course this is in addition to the about $10k every new homebuyer already gets from the State and Local governments.

What's not to like??????

https://www.msn.com/en-us/money/realestate/biden-s-plan-aims-to-make-owning-a-home-easier-for-middle-and-low-income-americans/ar-AA1jEqNq?ocid=hpmsn&cvid=030cff096ebd44d7a89eabcc2515c641&ei=13

Misc says

WHAT?????? Home prices might go down. Not with "free money" Joe running things. He's talking about another $25 billion in "free Money" to new home buyers. This is in addition to the $45 billion earmarked for converting commercial properties to residential. Of course this is in addition to the about $10k every new homebuyer already gets from the State and Local governments.

What's not to like??????

Just money to bail out the investors.

https://youtu.be/ircY8foQOnw?si=3iZopJaetVfrTTF6

ad says

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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/

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It was behind a veil for me, but I assume the Forbes (owned by CCP) writer assumed that a near doubling of the rates won't substantially impact used house prices.

ad says

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.

Here in California, these old folks have dirt cheap property tax due to Prop 13. They either stay put and die in situ so their kids can inherit tax free or they leave, but rent out their place until death so their kids can inherit tax free. Fortunately, now, the kinds can't get the dirt cheap tax unless they themselves live in the house.

HeadSet says

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.

You forgot to mention: accommodations that, due to corruption and incompetence, will be 2x more expensive than privately built housing.

You know, housing is just like Bitcoin in a way. Those who already hodl Bitcoin are motivated to pump up its value by that fact alone. Same with housing.

SunnyvaleCA says

Here in California, these old folks have dirt cheap property tax due to Prop 13. They either stay put and die in situ so their kids can inherit tax free or they leave, but rent out their place until death so their kids can inherit tax free. Fortunately, now, the kinds can't get the dirt cheap tax unless they themselves live in the house.

I guess you don't know what a living trust is.

Patrick says

You know, housing is just like Bitcoin in a way. Those who already hodl Bitcoin are motivated to pump up its value by that fact alone. Same with housing.

One difference though - Bitcoin is a speculative device while a house is a place to live. With the house, one is deciding whether rent or buy is the lower cost of obtaining shelter.

PumpingRedheads says

SunnyvaleCA says

Here in California, these old folks have dirt cheap property tax due to Prop 13. They either stay put and die in situ so their kids can inherit tax free or they leave, but rent out their place until death so their kids can inherit tax free. Fortunately, now, the kinds can't get the dirt cheap tax unless they themselves live in the house.

I guess you don't know what a living trust is.

Sunnyvale seems to be right, you may want to check Prop 19.

Prop 19 does make a narrow exception for primary residences transferred only to your child, during your lifetime or after your death—but then your child must themselves live on the property as the owner.

https://www.cunninghamlegal.com/legal-strategy-for-ca-prop-19-trust-transfer/

HeadSet says

Sunnyvale seems to be right, you may want to check Prop 19.

Prop 19 does make a narrow exception for primary residences transferred only to your child, during your lifetime or after your death—but then your child must themselves live on the property as the owner.

If the house is in a living trust.they don't have to live there.

PumpingRedheads says

HeadSet says

Sunnyvale seems to be right, you may want to check Prop 19.

Prop 19 does make a narrow exception for primary residences transferred only to your child, during your lifetime or after your death—but then your child must themselves live on the property as the owner.

If the house is in a living trust.they don't have to live there.

Could you explain this "living trust" idea more completely? Does it let kids sell the house (before parent death) and somehow get the stepped up basis and avoid capital gains? Does it mean, after Prop 19 changes, that they can inherit the house and continue getting the Prop 13 tax assessment without having to live in the house?

SunnyvaleCA says

Does it mean, after Prop 19 changes, that they can inherit the house and continue getting the Prop 13 tax assessment without having to live in the house?

Quite the opposite. Prop 19 removed the former ability of a homeowner to pass Prop 13 tax advantages to the kids via a Living Trust, unless the kid actually lives in that property. You may be interested in this:
https://www.bubbleinfo.com/2020/12/07/prop-19-will-trust-protect-reassessment/

zzyzzx says

Should I rip the bandaid off and sell my condo?

The question about an Oakland Condo should not be a financial question.

It ought to be an existential question.

https://nypost.com/2023/10/28/opinion/oakland-calif-is-falling-apart/