patrick.net

clambo says

I have no idea if or when the Federal Reserve cuts interest rates, but when they do, prices of houses will bounce up.

My theory is that peak prices were mostly set in early 2022 and that there was some household income growth since then.

You have to factor that household income growth when you drop the price from peak price if you are accounting for the increase in the 30 year mortgage interest rate since early 2022.

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AD says

My theory is that peak prices were mostly set in early 2022 and that there was some household income growth since then.

Depends on the area and industry. Wife is gonna sell $2M more and make close to $100k more after accounting for margins, SS, 401k, etc. We'll be flush with cash right when we need to be. I'd be shocked if Biden increased the Fed rate in an election year. But he has to deal with inflation. As much as it would hurt me, I like to see the fed rate increase.

When a case of my favorite beer goes from $13.99 to 21.99 in about 4 years WITH interest rate increases. Something is wrong. I'm not seeing cuts, yet at least, unless it's an election year move.

https://lifestylesunlimited.com/ Mr.Del Walmsley in his radio 1220am show says, right now is the best opportunity to buy as the rate decreases and prices will raise!

WookieMan says

When a case of my favorite beer goes from $13.99 to 21.99 in about 4 years WITH interest rate increases. Something is wrong. I'm not seeing cuts, yet at least, unless it's an election year move.

Yes. The Housing Experts of PatNet Who Don't Know Jack Shit About Monetary Issues But Insist Otherwise Because Of Their Copium Problems are once again discredited.

In wine country the boomers keep buying up almost everything coming onto the market, even trashy places. No signs of a downturn in housing prices.

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https://www.redfin.com/news/san-francisco-home-sellers-lose-gain-money/

Nearly 20% of San Francisco Home Sellers Take a Loss on Their Sale, More Than Four Times the National Share

April 10, 2024 by Dana Anderson and Elijah de la Campa

• The share of San Francisco sellers losing money on their home sale is sitting near its highest level in more than a decade, largely because prices have come back down to earth after skyrocketing during the pandemic.

• Nationwide, the share of sellers losing money is much smaller (4%) because home prices remain near their record high.

• In San Francisco, the typical seller who’s parting ways with their home for less than they originally paid is losing $155,500. Nationwide, the median loss is roughly $40,000.

• New England sellers are least likely to lose money, with less than 2% of Providence, RI and Boston sellers taking a loss.

There’s quite a bit of information missing in that article, no? San Franciscan sellers are actually bringing $155,000 to the settlement table? How long did these sellers own the property?

I've been saying the last few years. CA is going to bring down the national median. Freak people out. People are leaving CA because those that live there don't do shit for local politics. Reap what you sow.

I HATE Biden, inflation is bad. Most of the country is just doing fine. CA fucks up and they expect everyone to freak out. We don't care. Your overpriced house is eating shit? Not my problem in IL. You're maybe midway in the exodus from CA. Been there. Lived it. The party is just starting. Thing is the rest of the country gives no shits.

Any half desirable location in CA is still holding pretty strong as far as I can see. I am seeing more price reductions but they started too high. Anything good is gone within a week still in the Lincoln/Rocklin fortress I am looking at.

RedStar says

Any half desirable location in CA is still holding pretty strong as far as I can see.

For sure. But it's the places that got over inflated to $1M per home and now there's human shit at their front door. Those areas will go to $500k. They see guys like Joe Rogan and Dave Rubin getting the fuck out of dodge. They don't want to slip and fall on human shit. Get taxed at outrageous amounts. CA residents are in the early phase of what I dealt with in IL. Half my good friends left. We had a really tight knit group of friends. They all moved to TX, CO, MT, TN and FL.

Just wait. CA will single handily drag down the national home median home price. Probably by 5-10%. The rest of the country will just be like, eh, it's going sideways. New York is due for a beating as well.

WookieMan says

For sure. But it's the places that got over inflated to $1M per home and now there's human shit at their front door. Those areas will go to $500k. They see guys like Joe Rogan and Dave Rubin getting the fuck out of dodge

These are scores of blocks in SF and perhaps scores more in some beach communities in L.A. In a state with about 8 million SFH's. You do the math, bro.

WookieMan says

CA will single handily drag down the national home median home price.

Good.

We dragged it up too much. Too much, too high in California for Californians. If we dragged the US median up too much, sorry about that. Time to drag it down. We mostly hope you're right.

So few homes changed hands with these freaking high prices that most of us could have a massive drop of market values, maybe even like 50% and not be under water. A massive drop will only be a problem for recent buyers who borrowed most of the purchase amount.

The huge drop will be good for almost all Californians, - even local government. Lower prices will lead to more sales and re-assessments-on-sale of decades-old Prop-13 assessments.

UkraineIsTotallyFucked says

The Housing Experts of PatNet Who Don't Know Jack Shit

Who are these housing experts you refer to?

Most self-identified Californians on this site including Patrick himself have expressed skepticism about the Housing Hooplah.

GNL says

There’s quite a bit of information missing in that article, no? San Franciscan sellers are actually bringing $155,000 to the settlement table? How long did these sellers own the property?

These are only people who bought recently (past couple of years) at inflated prices. Anybody pre 2020 is certainly not sitting on a loss

AD says

• Nationwide, the share of sellers losing money is much smaller (4%) because home prices remain near their record high.

True but why!? (re: prices) I have no frigin idear but I have an example, I've been looking for lake front property here in Texas:

https://www.zillow.com/lake-medina-highlands-pipe-creek-tx/

There have been zero houses sold that are 'water front' in 2 years but prior to that plenty of movement. Prices there jumped anywhere from 30-70% for these houses after covid got going and they are still close to all time highs. I do see some insignificant price drops.

And here's the thing, if you switch to satellite view you can see the damn lake is basically empty and has been for quite some time. That's exactly why I'm interested in it - cheap country real estate where sometimes I get to enjoy water, other times I take the side by side down into the dust and target shoot.

I went to an open house last summer for kicks and the real estate lady tried to tell me the owner was offering 20K to put in a well because people used to pump from the lake into tanks. Farmers built the damn 100 years ago and own the water rights and drain it a lot lately.

Anyhoo, she told he she priced it herself but little did she know my best friend's brother lives 2 doors down and did the same thing. He was quoted 60K for the 800ft drill through limestone. He's also formerly senior at D.R Horton so I'm sure he got a good quote.

Only 2 others were there before me and I got there 45mins before the open house was over. I explained that I invest in properties too and that I knew the house was waaaay overpriced (she agreed) and tried to talk her into calling me if she really found a deal. She agreed nothing had sold in over a year at that time too. She didn't want to talk, she wanted to get me the fuck out of the house so I don't scare of non-existent other buyers who might show up lol.

If I see at least a minimum of 30% price drops in meth-ville I'll buy something for my house collection but I'm really not sure that's going to happen there.

nearly 1000 feet of lakefront access of Medina Lake (when the lake is full)

ROTFLMAO

I wanted to buy this 8 acre peninsula there but he was asking 1.150K and property taxes in TX are a killer:

https://www.zillow.com/homedetails/369-County-Road-2602-Mico-TX-78056/87444684_zpid/

It's got some very cool limestone bluffs that you could build a partially submerged house along the ledge - make it bomb proof.

The other thing about that lake, it's on swiss cheese limestone over the Edwards Aquifer so it's leaky at the bottom too.

There is a 10 square mile area that needs to get rained on to fill this lake up near Boerne. Lots of rain lately but not a drop for Medina Lake. No rain in that specific spot, no lake.

https://www.dailymail.co.uk/yourmoney/housing-market/article-13293369/san-francisco-housing-market-stumble-crime.html

Nearly 20% of San Francisco homes are sold at a LOSS - with the average seller getting $155,500 less than they paid - as market crumbles amid soaring crime

The number of homes that sold at a loss was four times the national average

GNL says

San Franciscan sellers are actually bringing $155,000 to the settlement table? How long did these sellers own the property?

Good question, and I wonder if they are flippers or investors who are just trying to cut their loses and put their money in Bitcoin or somewhere else.

I don't think they are sellers who are selling their primary homes and are just emergency eggressing from that shithole San Fran.

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I know someone who is going weekends around San Jose, CA to buy preferably a SFH. He sees lot of crowd to compete while the price is high and going up slightly over the last few weeks rather than going down. The new 7+% interest could get some discount in prices. We suspect, they must be cash buyers!

Blue says

I know someone who is going weekends around San Jose, CA to buy preferably a SFH.

Is that Eman ? He's been AWOL for a while and I wonder if he is going to return.

I feel bad for knocking him because he was a fluffer for San Fran Bay Area, and he was descriptive about escaping the Architect and Engineering rat race to work for himself.

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Blue says

San Jose, CA

Housing Market 2024: Home Prices Are Plummeting in 10 Formerly Overpriced Housing Markets

San Jose, CA
February median home list price: $1.367 million
Median list price year over year: -2.3%

https://www.msn.com/en-us/money/realestate/housing-market-2024-home-prices-are-plummeting-in-10-formerly-overpriced-housing-markets/ss-BB1lkz6A#image=6

Patrick says

https://www.dailymail.co.uk/yourmoney/housing-market/article-13293369/san-francisco-housing-market-stumble-crime.html

Nearly 20% of San Francisco homes are sold at a LOSS - with the average seller getting $155,500 less than they paid - as market crumbles amid soaring crime

The number of homes that sold at a loss was four times the national average

As I mentioned, CA is going to make housing prices look bad. It's not that bad outside of CA and NY nationwide. Those states are in the early phase of exodus. 15 years in RE and witnessing my home state fall apart, I know what it looks like. The prices in those states are high, so it's going to look worse than it actually is. Media is generally based out of those two states as well so the fear porn is going to be projected pretty heavy.

RWSGFY says

nearly 1000 feet of lakefront access of Medina Lake (when the lake is full)

ROTFLMAO

Exactly! There are also meth heads all over, trailer parks and the area is generally run down because it's boom or bust there - boom when the lake is up, bust otherwise. These people are dreaming things will sell at those prices.

As an aside: What is it about lakes and meth addicts? There are meth heads North of town at another large lake and two of the Lakes in California I used to frequent were full of them: Oroville, Clearlake (not sure about Berryessa, Bullard's Bar, Shasta or Fulsom as I was too young to notice)

WookieMan says

It's not that bad outside of CA and NY nationwide.

Tell that to people in San Antonio who want to buy a house and make less to be middle class than virtually any other city of the same size: 3 of my rental houses have increased 100K (50%) over the past few years and prices are not dropping.

WookieMan says

As I mentioned, CA is going to make housing prices look bad. It's not that bad outside of CA and NY nationwide. Those states are in the early phase of exodus. 15 years in RE and witnessing my home state fall apart, I know what it looks like. The prices in those states are high, so it's going to look worse than it actually is. Media is generally based out of those two states as well so the fear porn is going to be projected pretty heavy.

I recall CNN pumping Atlanta (headquarters) RE prices just before the dot com boom started and the SF bay area took off instead. Atlanta was to have a future where it became one of the most expensive places to live. (talking their own book)

just_passing_through says

WookieMan says

It's not that bad outside of CA and NY nationwide.

Tell that to people in San Antonio who want to buy a house and make less to be middle class than virtually any other city of the same size: 3 of my rental houses have increased 100K (50%) over the past few years and prices are not dropping.

So there's demand. Prices rise.

I'm talking about the areas where people are leaving. Specifically CA and NY. Because their median home prices are so high it will drag down the national prices and everyone freaks out. San Antonio would maybe nudge the national median 0.005% either way. A $10M CA mansion or $10M penthouse in NYC sell for 30% less makes the market look way worse.

You can argue is it affordable for most. Probably not. But no one is selling, so are they hurting for money? Doesn't seem like it. CA and NY are what IL was a decade ago. Everyone is leaving.

WookieMan says

I'm talking about the areas where people are leaving. Specifically CA

WookieMan says

CA and NY are what IL was a decade ago. Everyone is leaving.

Good.

The population of California is way above the carrying capacity of the water supply and infrastructure (roads, traffic and congestion, etc).

Housing costs are so freaking high we need a crash. On a cursory google search it said 1.8% of Californians with mortqages are under water, about one fourth the percentage of the rest of the US.

An exodus will be good for us: good for the carrying capacity of the land, for the traffic and congestion, good for house prices for nearly everyone except the Tiny Percentage who recently purchased with borrowed money. It will even be good for local government that's addicted to Property Taxes like crack cocaine. The prices are so damn high there's no reassessments (Proposition 13) that come with the turnover. Local government needs a stimulus, nothing like a crash in prices to help with that.

We had an exodus of Hipsters after the dot.com collapse in the early part of the millenium. Some folks had major rent reductions. My boss at the time told me his rent of his 1 BR apartment was reduced from $2400 per month to less than $2000. I forgot the amount he said. Maybe $1800 or something like that. He told me that the landlord reached out to him and offered an immediate rent reduction even though the lease had months to go.

A housing price collapse and population exodus will make things less unlivable for nearly all Californians who stay.

Bring it on.

There will be no significant decline in either CA or NY unless in some shitty urban, inner big city areas. Rates are already at 7% and prices hardly budged. Builders aren't building and it's a racket anyways. They'll just keep building "affordable housing" in prime areas for 1MM per apartment unit with tax dollars. Also I'd like to see less people in CA as well

mell says

There will be no significant decline in either CA or NY unless in some shitty urban, inner big city areas. Rates are already at 7% and prices hardly budged.

WookieMan says

CA and NY are what IL was a decade ago. Everyone is leaving.

Yup.

That's the difference, mell. You and me live here. We know wtf we're talking about, whereas Wookie is as clueless about the facts on the ground in our state as he is about aviation.

Spending brief amounts of time visiting folks in California makes one no more of informed expert on our region as being a frequent flyer on Southwest makes one an aviation expert.

B.A.C.A.H. says

We had an exodus of Hipsters after the dot.com collapse

I'd thought the hipsters showed up a wee bit later? Libertarians (with the normal faggotry in 'the city') -> metro-sexuals -> hipsters -> woke -> broke -> collapse.

B.A.C.A.H. says

Some folks had major rent reductions. My boss at the time told me his rent of his 1 BR apartment was reduced from $2400 per month to less than $2000.

Oh me too! My studio dropped from 1200 -> 850.

just_passing_through says

B.A.C.A.H. says

We had an exodus of Hipsters after the dot.com collapse

I'd thought the hipsters showed up a wee bit later? Libertarians (with the normal faggotry in 'the city') -> metro-sexuals -> hipsters -> woke -> broke -> collapse.

Before the metro sexual Hipsters were the dot.com Hipsters who came here in the mid-to-late 90's to be part of the scene. The first wave of Smugsters to SF.

just_passing_through says

Oh me too! My studio dropped from 1200 -> 850.

The region did not collapse. Just the dot.com did. And the rents.

B.A.C.A.H. says

The region did not collapse. Just the dot.com did. And the rents.

I was living in a shiitehole in Redwood City at the time.

B.A.C.A.H. says

Before the metro sexual Hipsters were the dot.com Hipsters who came here in the mid-to-late 90's to be part of the scene. The first wave of Smugsters to SF.

I see. I arrived in 97. I'd sort of fell off of the turnip truck at the time with respect to knowing the area and people. Even though I was actually returning after 15 years having moved to Texas with my parents.

While we have more inventory coming onto the market it gets snatched up if there is even a hint of a price cut. Friends, family, and acquaintances get regularly outbid by all cash buyers who pay asking and reduce the contingency period to a few days. If you think housing prices are going to crash you'll have another thing coming.

mell says

If you think housing prices are going to crash you'll have another thing coming.

Did you mean, "If you think Bay Area housing prices are going to crash you'll have another thing coming?"

This is a Fortress Bay Area thread now.
East Bay reporting in. Two bed/ one bath cottages still hanging in there with a median of around $1,000 /sq.ft.

B.A.C.A.H. says

mell says

If you think housing prices are going to crash you'll have another thing coming.

Did you mean, "If you think Bay Area housing prices are going to crash you'll have another thing coming?"

Yeah, but it can be probably be expanded to a general assertion, as long as the area is not a shithole there will be bidders. Most of the places close by I was able to follow the new owners were almost always boomers or gen xers - if not professional flippers. Plenty of money sloshing around with the old generations.

B.A.C.A.H. says

Yup.

That's the difference, mell. You and me live here. We know wtf we're talking about, whereas Wookie is as clueless about the facts on the ground in our state as he is about aviation.

Lol. It's coming. You're in stage 1... https://www.cruse.org.uk/understanding-grief/effects-of-grief/five-stages-of-grief/

Enjoy. I know plenty of Californians. Not just from this site. Your shit show has just started. I'm in the acceptance phase here in IL. You guys are clueless and in the denial phase. It will take a decade to get where I'm at. You'll see. Inflation will make it look pretty on paper. You'll be poorer. That's when the anger kicks in. https://youtu.be/9CZJbrw8mjE?si=J6EuuFQxFdzH6FGt Enjoy. Good tune.

mell says

"If you think housing prices are going to crash you'll have another thing coming."

My take is that higher interest rates are forcing sellers to lower the asking price. Historically this has always been the case.

I could show you a lot of these. The trend looks down.