patrick.net

This is in one of the nice parts of Baltimore City:

Booger says

This is in one of the nice parts of Baltimore City:

There is only 1 nice part of Baltimore City. The Inner Harbor. And even that ain't so nice since both Stadiums are right there also.

Fells Point has some nice restaurants. And what other city has a Bromo-Seltzer clock tower?

Al_Sharpton_for_President says

Fells Point has some nice restaurants. And what other city has a Bromo-Seltzer clock tower?

My brother had a gun pulled on him on the dance floor in Fells Point. If you remember Hammer Jacks (best f'ing bar I've ever been to), I witnessed a girl hit a guy over the head with a bottle of beer. The top of his whole scalp peeled down over his face. Damn crazy ass place. Girls routinely got on the bar and took their tops off jiggling their titties for all to see.

Patrick says

He predicted that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.

Disagree. Everyone has substantial equity if they bought in the last 5 years or back to 2010ish. We don't have shit loans to unqualified borrowers. People are holding/living in their homes longer. It will stagnate for sure, but I don't see drops until spec building picks up. Might be happening in some spots of the country. Not here.

There's no quality labor. Building is at maybe 1/10th of what it was during the boom & bust. A 25% crash in prices is massive. Just because we lived through a once in a lifetime event doesn't mean it will happen again. Coastal regions are off my radar though. Flyover country is fine outside of hipster hot pockets. Not a chance I lose $50k on my home over the next 2-3 years without a civil war or some other geopolitical event.

WookieMan says

We don't have shit loans to unqualified borrowers.

ARM's and HELOC's are back. Supposedly 27% of homeowners have a HELOC...

WookieMan says

Just because we lived through a once in a lifetime

More than once in my lifetime already, and I'm 56.

WookieMan says

A 25% crash in prices is massive. Just because we lived through a once in a lifetime event doesn't mean it will happen again.

25% decline is massive for real estate if you are thinking of a decline as a percentage from the top. But if it's just a correction for the recent 40% gain, it'll only be setting prices back to what they were before the covid. In my area, it won't even be going back to pre-covid prices.

I just found out that 2 of my friends who work in IT industry have purchased rental properties in 2019 (1 purchased 8 single family homes and the other bought 2 single family homes) as side hustles. They are renting it out to students and other IT employees. The purchases were made in Austin, TX and Columbus, OH.

So, is this a sound and profitable side hustle?

gabbar says

I just found out that 2 of my friends who work in IT industry have purchased rental properties in 2019 (1 purchased 8 single family homes and the other bought 2 single family homes) as side hustles. They are renting it out to students and other IT employees. The purchases were made in Austin, TX and Columbus, OH.

So, is this a sound and profitable side hustle?

Depends on their cost basis and management style. If the revenue is not covering costs, then most likely, no. Ask them.

Generally, real estate investing is very tax efficient, it's better than a W-2 at times with the deductions.

https://www.bloomberg.com/news/articles/2022-06-24/over-8-million-americans-are-late-on-rents-as-prices-increase

More Than 8 Million Americans Are Late on Rent as Prices Increase

zzyzzx says

More Than 8 Million Americans Are Late on Rent as Prices Increase

zzyzzx says

@Wookieman told me that was unpossible. Are you sure this is correct?

https://www.reddit.com/r/RealEstate/comments/weidlb/my_house_finally_sold_after_2_months/

My house finally sold after 2 months and for $75,000 less than the original buyer.

https://www.businessinsider.com/housing-market-bubble-crash-prices-bank-executives-fear-meltdown-survey-2021-10

78% of community bank executives expect the housing market to crash by 2026

zzyzzx says

https://www.businessinsider.com/housing-market-bubble-crash-prices-bank-executives-fear-meltdown-survey-2021-10

78% of community bank executives expect the housing market to crash by 2026

18% up in one year particularly in a very nonproductive year period is completely wrong to begin with. At least this much amount needs to be fixed. But again gov gave away trillions to top 1% that money will chases things like RE. Gov and it’s corrupt policies on fake Covid end up hurting most.

https://rudy.substack.com/p/if-there-must-be-madness-something

Testing new name.

https://www.reddit.com/r/REBubble/comments/wg0kx4/price_drop_60k_14_starting_to_see_big_drops_north/

Price Drop 60k (~14%) Starting to see big drops north of Atlanta

https://www.housingwire.com/articles/foa-cuts-workforce-amid-company-restructuring-market-downturn/

FoA cuts workforce amid company restructuring, market downturn
Texas-based lender had large-scale layoffs in the second and third quarters of 2022

The company loan origination volume fell to $5.1 billion in the first quarter, down 26% from the prior quarter and 39% from the first quarter of 2021. Overall, FoA delivered a $64 million loss in the first quarter of 2022. (The company is expected to report second-quarter earnings on Thursday.)

FoA cut roughly 600 jobs between March 2021 and March 2022.

FoA - Full of Asshoes?

Patrick says

https://rudy.substack.com/p/if-there-must-be-madness-something

This is brilliant lol

https://www.housingwire.com/articles/rockets-profits-drop-dramatically-to-60m-in-q2-2022/

Rocket Mortgage’s profits drop dramatically in Q2 2022

Rocket Companies, the parent of America’s top mortgage lender Rocket Mortgage, reported a $60 million profit in the second quarter, down dramatically from $1 billion just the previous quarter. Company executives attributed the sharp decline to a stronger than expected drop in purchase business.

The stunning decline in profitability suggests Rocket has much work to do in a tough market as higher mortgage rates wipe out refinancing opportunities and even depress purchase deals. To boot, its strategy to add new products and services hasn’t been enough to offset the decline in origination volume.

https://www.wsj.com/articles/home-sellers-cut-prices-as-housing-market-cools-11659671674

Home Sellers Cut Prices as Housing Market Cools

Jennie Jackson, 33 years old, listed her three-bedroom Las Vegas home for $465,000 earlier this summer. In March, her neighbor sold a comparable home for about $485,000, she said. Over the course of about 35 days, she cut the price three times. She recently accepted an offer for about $405,000.

“I thought this may be the highest offer I’ll get so let me get out while the going is good,” said Ms. Jackson.

https://www.cnbc.com/2022/08/05/-santanders-tim-wennes-a-shakeout-among-mortgage-lenders-is-coming.html

A ‘shakeout’ among mortgage lenders is coming, according to CEO of bank that left the business

https://www.barrons.com/articles/housing-market-prices-bubble-51658863104

This Housing Market Won’t Be Like Last Time. History Still Has Lessons.

1977-1982, The Great Inflation Housing Bubble: Real, inflation-adjusted house prices nationally increased 18% over the first three years and then fell 10% over the next three. The number of both existing and new single-family houses sold fell 50% from 1978 to 1982. At the bottom in 1982, real prices were back to 1977 levels.

1985-1993, The Savings & Loan Housing Bubble: Real, inflation-adjusted house prices nationally increased 21% over the first four years then fell 13% over the next four. The number of existing single-family houses sold fell 12% from 1988 to 1991. Sales of new houses fell 32% from 1986 to 1991. At the bottom in 1993, real prices were back to 1986 levels.

1997-2012, The Great Recession Housing Bubble: Real, inflation-adjusted house prices nationally increased 76% over the first nine years and then fell 37% over the next five. The number of existing single-family houses sold fell 42% from 2005 to 2008. Sales of new houses fell 76% from 2005 to 2011. At the bottom in 2012, real prices were back to late 1999 levels, 12 years earlier.

https://www.reddit.com/r/personalfinance/comments/wiyzvi/how_do_i_get_out_of_a_bad_adjustable_rate_heloc/

How do I get out of a bad Adjustable Rate HELOC?

I’m got a 75K balance on an adjustable rate HELOC.
The rate just went from 5% to 6.3% in 1 month.
I pay interest only currently.
I can lock the rate - to prevent it from going higher - but then I would have to pay principal and interest.
How do I get myself out of this mess ?

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/wixk0x/i_made_a_massive_mistake_by_buying_a_house/

I made a massive mistake by buying a house without walking inside of it

https://www.forbes.com/sites/johnwake/2022/08/04/2-reasons-house-prices-will-start-falling-sooner-than-expected/

2 Reasons House Prices Will Start Falling Sooner Than Expected

Many real estate analysts are forecasting U.S. house prices to fall because mortgage interest rates have risen so much. Some are expecting small declines, others, large, but most mention that house prices are “sticky” on the downside and because of that they don't expect prices to start falling until many months after house sales have started falling. Most don't expect these sticky prices to start falling significantly until next year.

A good example of sticky house prices was in 2006. Nationally, the number of single-family houses sold fell 8% in 2006 but house prices actually went up 7% in 2006 before they started to tank in 2007. The number of houses sold fell long before house prices because, as economists like to say, house prices are sticky on the downside.

House prices don’t fall right away because some sellers will decide not to sell if they can’t get the price they want anymore. Many other sellers still want to sell but emotionally they have trouble accepting that prices are actually falling so they’re slow to lower their asking prices. They get paralyzed thinking about how much more money they could have made if they had sold at the top of the market.

In our coming house price correction prices will still be sticky on the downside but two changes since 2006 will make prices a lot less sticky. First, home buyers and sellers have a lot more information about the real estate market today and, second, landlords have bought a lot more single-family houses in recent years than they did last time.

In a falling market it’s a lot easier for landlords to sell than for families who live in the houses they own. The families would have to find new places to live if they sold. Not so for landlords.

Investors purchased a record 21% of single-family houses sold in the U.S. in the first quarter of 2022, according to Redfin. In the first quarter of 2006, investors only bought 10%. Having double the landlord purchases should make house prices less sticky on the downside than in 2006 because it’s easier for landlords to sell when prices start falling.

A much larger difference between 2006 and 2022 is the amount of information available about the real estate market. This may be hard to believe today, but it wasn’t easy to find the sold prices of the houses in your neighborhood in 2006. Zillow didn’t exist until 2006! Today, asking prices and sold prices are all over the internet.

A common explanation of the 2000s boom was that it was a credit bubble. Today, we don’t have all those exotic Liar’s Loans, negative amortization, and interest-only mortgages but, nevertheless, house prices increased faster in 2021 despite not having a credit boom.

Instead of being caused by a credit boom, the pandemic housing boom was caused by sharply falling mortgage rates and a change in the demand for houses caused by the pandemic. But a critical factor that amplified the recent boom is usually ignored. No matter what caused the boom, the huge amount of online information home buyers and sellers had access to increased the speed and height of the boom.

Buyers and sellers could see for themselves how fast house prices were increasing. Buyers felt less fear offering more than the asking price because they could easily see online how fast prices were skyrocketing and how common it was for houses to sell over asking price.

The huge amount of information available to house buyers and sellers today reinforces any upward price momentum so prices go up faster and further. With so much information online, buyers respond more quickly to increases in prices which increases prices even more in a feedback loop.

In the same way, when sellers can easily see asking prices, price reductions, and declining sold prices in real time, it should also speed up the start of our next U.S. house price correction.

And, of course, this time house sellers know prices can go down. In 2006, a lot of sellers didn’t think they could.

Even though we don’t have all the crazy mortgages of the 2000s, today we have a lot more landlord-owned single-family houses, and everyone has easy access to a ton more information about current, local house price trends.

We will still have sellers who are slow to lower their asking prices in softening markets but since they have so much more real time information about the market, they will likely lower their prices faster and house prices will probably start to fall a lot sooner after sales start to fall.

House prices have already started falling in Canada and Australia and in some cities the declines have been shockingly steep. If house prices are less sticky on the downside than experts expect, prices will fall sooner and more steeply in the U.S. as well.

https://www.nationalmortgagenews.com/news/mortgage-players-confirm-more-sweeping-layoffs

Mortgage players confirm more sweeping layoffs

https://fortune.com/2022/08/08/new-home-prices-falling-homebuilders-oversupply/amp/

The pandemic housing boom saw builders get a little greedy. Eager to turn a higher profit, homebuilders ramped up production of unsold homes. Their thinking? Builders could easily find buyers before the so-called spec homes—short for speculative houses—are finished. When the housing market was hot, it went as planned. But the ongoing housing correction has flipped the script. Now homebuilders are fearing what six months ago was unthinkable: oversupply.

There’s not only a record number of unsold homes under construction, there’s also a record number of total homes under construction. Even sold homes are a liability for builders: Spiking mortgage rates are translating into a spike in buyers pulling out of their contracts. Look no further than homebuilding giant D.R. Horton, which saw its cancellation rate jump to 24% in its fiscal third quarter ending June 30.

Earlier this summer, HousingWire lead analyst Logan Mohtashami told Fortune that higher mortgage rates would both slow down the housing market and "put builders on their ass." As the housing cycle "turns over," existing home inventory—which is builders' true competition—will continue to rise. That will cause new-home sales and housing starts to fall, Mohtashami says.

Historically speaking, house price cuts always materialize first in the new-construction market. Homebuilders, who lose money for every additional day they hold on to an unsold home, are more willing to relent. It's a completely different story for homeowners: They won't give in until market forces make them. If inventory continues to rise, sellers in some markets might finally have to relent a bit.

https://www.lasvegasrealtor.com/housing-market-statistics

Las Vegas single-family home Median price falls 3.13% during the month of July, to $465,000