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WookieMan says

I'm pushing the trades and get some business acumen for my kids/nephew.

I agree. I met a young cousin's boyfriend over Christmas. He's 21 and rudderless. He said he "tried" HVAC and "didn't like it". I couldn't help but tell him that I thought he was making a mistake by giving it up.

GNL says

WookieMan says

I'm pushing the trades and get some business acumen for my kids/nephew.

I agree. I met a young cousin's boyfriend over Christmas. He's 21 and rudderless. He said he "tried" HVAC and "didn't like it". I couldn't help but tell him that I thought he was making a mistake by giving it up.

The goal should be to be the boss is what I'm telling my boys. You can live your life, travel, do what you want. BUT you have to know the industry. It's dirty and hard hours at first. Once you know the business and industry you'll know who to hire. Your job becomes wining and dining people to get business. Easier said than done, but that's business. Harvard ain't gonna teach you that and you gotta have the gumption to get through the tough years. Hopefully he'll reconsider. We all need AC and heat.

Get your business going. You hire an accountant. You hire out marketing. You hire experienced HVAC techs. You sit back and personally network as much as you can. Mail and websites work, but it's you as the person that sells your business and then preforming on the jobs. People throw too much money at the other shit and don't realize even in todays fucked up reality that personal relationships will make you the most money.

WookieMan says

The goal should be to be the boss

100%. I know 2 millionaires who are millionaires purely because they own their own business. One owns a cleaning business and the other one owns a real estate photography business.

I actually know many more than 2 millionaires but I was trying to "scrape the barrel" on the blue collar scale of services that can, and do, produce wealth if you own the business.

Respecting the aging of America, there's a few way this ends, none of it good.

At some point the trillions of "wealth" held by boomers will turn over. Like it or not, in 6 short years ALL of the baby boomers will be 65+

https://www.census.gov/library/stories/2019/12/by-2030-all-baby-boomers-will-be-age-65-or-older.html

With little money to be made on the "front end" (Melenials / Gen Z buying an and Gen X trading up) banks will try and make up for it on the back end.

How?

1) Big money buys out boomers SF and condos and convert then to rentals.

2) Banks start pushing reverse mortgages to the AARP crowd (again) as a hedge against "long term care expenses"

3) Gen X finally inherits they either sell or rent out there properties... But it's hard to compete with instatutionalized money borrowing at the fed rate.

Unless incomes rise substantially, or we become like the Waltons and have multiple families living under one roof, there isn't enough income to support those trying to get in, and without new buyers the carousel stops and prices fall barring intervention from the outside.

It will take a few years before we see it since lending standards were tightened, and those with a good rate have far less incentive to trade up, which will limit both supply and demand, but we're certainly beyond peak prices 2.0.

The only wildcard is immigration, both legal and "undocumented".

HONEST ANSWER

To unfreeze the housing market, there must be excess inventory. The housing market has been having low inventory due to affordability and existing owners don’t sell as they can’t afford the new mortgage payments if they move.

History suggests housing prices drop gradually over a few years if the economy is weak. For housing prices to drop fast, distressed sales must exist.

As of now, no excess inventory, no distressed sales. For people who buy due to their life circumstances, they’ll suck it up and buy. People, who can’t afford to buy, or don’t want to pay the huge premium of ownership over renting, they’ll continue to rent.

No one has a crystal ball. If they did, they’d be so rich. Everyone has a choice. They’ll make the decision to buy or rent based on their life circumstances and priorities.

Eman says

The housing market has been having low inventory due to affordability and existing owners don’t sell as they can’t afford the new mortgage payments if they move.

I read that it costs at least $100,000 before even the shovel hits the dirt to build a single family home in California.

The costs to develop are getting way out of hand, and a lot of that is not due to the cost of land.

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ad says

Eman says

The housing market has been having low inventory due to affordability and existing owners don’t sell as they can’t afford the new mortgage payments if they move.

I read that it costs at least $100,000 before even the shovel hits the dirt to build a single family home in California.

The costs to develop are getting way out of hand, and a lot of that is not due to the cost of land.

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It’s true. The cost of designing, engineering, city permits and fees is easily $100k before we break ground to build a house. Also, the city requires us to install fire sprinklers, build on-site water reservoir to absorb certain amount of water run-off, etc… these requirements were over a decade ago. Not sure what else the cities require now like net zero electricity BS, etc….Basically, all the requirements make the cost to build extremely expensive.

Eman says

The cost of designing, engineering, city permits and fees is easily $100k before we break ground to build a house.

Basically, all the requirements make the cost to build extremely expensive.

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yes, due to California building code and zoning

in Florida, the builders leverage economies of scale as far as fixed costs and the state is a lot more pro residential development

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ad says

It’s interesting how the top markets are always the cheap/underperforming markets while the expensive markets are always the outperforming markets.

housing prices primarily peaked in early 2022... income increased in 2022 and 2023...hopefully hope prices stay the same and income increases in 2024...

three years of income increases (2022-2024) and a 30 year mortgage rate of 5.5% will mean home prices will not need to decrease as much as far as mortgage affordability standards...

ad says

Eman says

The cost of designing, engineering, city permits and fees is easily $100k before we break ground to build a house.

Basically, all the requirements make the cost to build extremely expensive.

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yes, due to California building code and zoning

in Florida, the builders leverage economies of scale as far as fixed costs and the state is a lot more pro residential development

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All of this is why you won’t see Actual affordable housing built in CA ever again….

California’s largest home insurer will raise rates by an average of 20% this year.

https://www.msn.com/en-us/money/insurance/california-s-largest-home-insurer-to-hike-rates-this-year/ar-AA1mnqi3

https://ottawa.ctvnews.ca/home-prices-in-carleton-place-drop-significantly-1.6718571

Carleton Place homes sold for $400,000 under original selling price

https://www.reddit.com/r/RealEstate/comments/192s3xt/appraisal_came_in_47k_lower_than_contract_price/

Appraisal came in 47K lower than contract price. How does this happen??

zzyzzx says

https://ottawa.ctvnews.ca/home-prices-in-carleton-place-drop-significantly-1.6718571

Carleton Place homes sold for $400,000 under original selling price

Jan of last year a new law in Canada came into effect that restricts real estate foreigners can buy.

This is the result.

30-year fixed mortgage rate is below 6% for the Bay Area now. I guess lenders anticipate the Fed is done with the rate hikes and will cut rate soon.

Marco Cooper, 3154198

Coastal Sun Realty LLCEman says

30-year fixed mortgage rate is below 6% for the Bay Area now. I guess lenders anticipate the Fed is done with the rate hikes and will cut rate soon.

My forecast still is that the 30 year rate will settle around 5.5% for 2024, and about 1.5% above the 10 Yr Treasury.

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Eman says

30-year fixed mortgage rate is below 6% for the Bay Area now.

To be fair, that 5.875% rate requires you pay 0.25 points up front. An APR "as low as" 5.992% is breaking the 6.0 barrier by the barest of margins.

SunnyvaleCA says

Eman says

30-year fixed mortgage rate is below 6% for the Bay Area now.

To be fair, that 5.875% rate requires you pay 0.25 points up front. An APR "as low as" 5.992% is breaking the 6.0 barrier by the barest of margins.

What I would do is get 2 discount points costs along with other closing costs rolled into my VA mortgage. If we buy this year and the 30 yr rate is 5.5%, then we'll buy 4 discount points to get to a 4.5% rate.
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In the current environment, I’m not sure it’s prudent to buy down rate as history suggests there’s a higher chance of interest rate dropping in the coming years rather than rising. Paying 4 points is a lot of money to buy down 1%

SunnyvaleCA says

Eman says

30-year fixed mortgage rate is below 6% for the Bay Area now.

To be fair, that 5.875% rate requires you pay 0.25 points up front. An APR "as low as" 5.992% is breaking the 6.0 barrier by the barest of margins.

Rates were floating around 7.5% and higher just a couple months ago. The Fed hasn’t done anything, and rates fell 150 bps since. I just want to share the dynamic of interest rates. This should provide some tailwind to hold up the housing prices.

A recession is likely needed to see significant housing price drop at this point.

“San Jose rent growth in 2023 pacing below last year. Twelve months into the year, rents in San Jose have fallen 0.7%. From January to December 2022 rents had increased 6.1%.”

“Santa Clara County rent growth in 2023 pacing below last year. Twelve months into the year, rents in Santa Clara County have fallen 1.0%. From January to December 2022 rents had increased 8.7%.”

Eman says

In the current environment, I’m not sure it’s prudent to buy down rate as history suggests there’s a higher chance of interest rate dropping in the coming years rather than rising. Paying 4 points is a lot of money to buy down 1%

Eman, the cost is 4% of the mortgage when you buy down 4 points. It is equivalent to dropping the price 10% (assuming no down payment) and the payback period is around 6 years. If I could buy down to 5% from 6% rate for the 30 year mortgage, then I would refinance likely when the rate drops below 3.75%.

I posit that it is much more profitable to increase prices based on scarcity. With scarcity, there's no effort and prices can go to infinity.

Eman says

“San Jose rent growth in 2023 pacing below last year. Twelve months into the year, rents in San Jose have fallen 0.7%. From January to December 2022 rents had increased 6.1%.”

“Santa Clara County rent growth in 2023 pacing below last year. Twelve months into the year, rents in Santa Clara County have fallen 1.0%. From January to December 2022 rents had increased 8.7%.”

Eman, Venture capital money is drying up more in Silicon Valley compared to 2019-2022. Layoffs are abound in Silicon Valley 😕

ad says

Eman, Venture capital money is drying up more in Silicon Valley compared to 2019-2022. Layoffs are abound in Silicon Valley 😕

Yup. It's really bad. Almost dot.com bust nuclear winter bad.

And contributing to that is the AI scam. That the new 'thing' in SV.

We all know it, but worth repeating. A picture is worth a thousand words. The link is below too.



https://x.com/charliebilello/status/1747316842861838567?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q

Eman says

We all know it, but worth repeating. A picture is worth a thousand words. The link is below too.



https://x.com/charliebilello/status/1747316842861838567?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q

What would you, as an investor, do going forward? Reading the tea leaves (the totality of the economy and the political and financial atmosphere) I'm pretty sure this is the new normal. I believe the homeownership rate is going to fall for years to come.

It may tick up and down from time to time but, the trajectory = down for a long time. IMO, of course.

These analysts are hilarious. The housing market is bottoming. 😂

https://www.marketwatch.com/story/buy-home-depots-stock-because-the-housing-market-is-bottoming-analyst-says-732d5268?siteid=msnheadlines

Eman says

These analysts are hilarious. The housing market is bottoming. 😂

https://www.marketwatch.com/story/buy-home-depots-stock-because-the-housing-market-is-bottoming-analyst-says-732d5268?siteid=msnheadlines

Good candidate for the predictions thread.

GNL says

Eman says

We all know it, but worth repeating. A picture is worth a thousand words. The link is below too.



https://x.com/charliebilello/status/1747316842861838567?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q

What would you, as an investor, do going forward? Reading the tea leaves (the totality of the economy and the political and financial atmosphere) I'm pretty sure this is the new normal. I believe the homeownership rate is going to fall for years to come.

It may tick up and down from time to time but, the trajectory = down for a long time. IMO, of course.

Be patient and wait for opportunities. No reason to force any deals when there are no deals.

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Increase income by +3% annually while hold home prices and 30 yr mortgage rate constant to achieve more housing affordability
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There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !

gabbar says

There was a mainstream media headline that notes that poor Americans are benefiting from falling inflation !

Mainstream media is doing what it can for the Democrats going into this November elections.

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