patrick.net

This is for purchase financing only, not re-fis.



https://twitter.com/nickgerli1/status/1783158460663632289

UkraineIsTotallyFucked says

Yes. And move into assisted living. No new housing will be built to accommodate the sales of their houses. Kids will likely take it over in most cases because the market is so high. Get a no payment house from the parents. No new housing.

I'm an anomaly, but 3 transaction will take place if it works out. No new inventory. My mom will sell her place to me, I buy hers, she buys mine and I build. Technically 4.

I'm a rich bitch technically and hang out with those types. Parents bought a ton of the kids houses for them. They have no payment. Those won't go on the market. My uncle owns all three of my cousins houses on my dads side. They're not moving and one of them will get a $20M home in Scottsdale and keep it. Generational wealth. Childhood friends, girl neighbor and best man in my wedding their dad owns their houses.

The housing market is different now. My other uncle makes $300k+ in pensions. Everything is paid off. Those two cousins worry about nothing. A family friend just recently passed. Majority holder in a regional bank. Guy is about my age. $100M and two properties that I know of that are $20M+ total. He was adopted.... I dislike boomers because they were greedy, but they can't take the money with them. Which is why I think housing will be fine. Inflation is the bigger concern. Hurts me, but interest rates should be 10% plus right now. Fed needed to put the peddle to floor and we're just dragging out what needs to happen.

WookieMan says

No new housing.

Well, I believe this plays into what I've been saying. 1. lower percentage of homeownership going forward and 2. the economy/jobs will take a hit if/when housing sales/transactions/builds get low enough.

GNL says

WookieMan says

No new housing.

Well, I believe this plays into what I've been saying. 1. lower percentage of homeownership going forward and 2. the economy/jobs will take a hit if/when housing sales/transactions/builds get low enough.

No new housing where? There is a shitton of new housing built recently and still being built around here.
Some of it even standing empty or half-empty like that hideous cluster of apartments near Tesla factory.

WookieMan says

Kids will likely take it over in most cases because the market is so high. Get a no payment house from the parents

All houses inherited by my family had to be sold because there was more than one child involved.

Also, children often live far away and so need to sell.

RWSGFY says

GNL says

WookieMan says

No new housing.

Well, I believe this plays into what I've been saying. 1. lower percentage of homeownership going forward and 2. the economy/jobs will take a hit if/when housing sales/transactions/builds get low enough.

No new housing where? There is a shitton of new housing built recently and still being built around here.
Some of it even standing empty or half-empty like that hideous cluster of apartments near Tesla factory.

We are now below 60% of homes owned by the primary residents. We have been declining since 2007, but he have taken a huge hit in 2023 with interest rates so much higher.

https://twitter.com/InsAgencyOwner/status/1695908944202416375

UkraineIsTotallyFucked says

All houses inherited by my family had to be sold because there was more than one child involved.

Also, children often live far away and so need to sell.

A trust. Hell even an LLC if you're wealthy enough to take the tax bath while you own it. There are plenty of ways to transfer property to multiple kids and they split the proceeds or come to an agreement where whoever takes ownership pays rent to their siblings or get less cash inheritance. There are so many ways that the house doesn't hit the market. I guess maybe people are idiots I suppose?

Literally trying it with my mom. We'll see if it works. She buys my house, we build and I buy her current house as a playground (60 acres). Triple win. No new house even hits the market.

I obviously was in real estate, but I'd say younger people are a bit more savvy than the 50+ people. 50+ could just walk into a bank and buy a house. We have to think outside the box witnessing the massive fuck up of our older peers. I'm at 100% ownership in my peer group of about 20 guys aged 35-45. Most have owned for a decade. Gotta get creative.

A Rebalancing: How America’s ‘Pandemic Boomtowns’ Are Faring 2 Years After They Upended the Housing Market

America’s “pandemic boomtowns”—the places that grew rapidly as remote workers fled there for lower costs of living during the height of COVID-19—have been on a wild, four-year roller-coaster ride.

First, we saw nearly two years of a fast-moving, price-pumping housing market that resulted from the global health crisis. Homes in these towns were selling at breakneck speeds—often well above the asking price—as inventory levels shrank to record lows.

In Denver, for instance, properties were flying off the market in less than a week. In Austin, TX, homes were fetching an average of 10% above the listing price. And in Raleigh, NC, the number of homes for sale dwindled by 80%.

But in spring 2022, the U.S. Federal Reserve began cranking up interest rates to combat inflation, causing a major turn in the market. Potential buyers and sellers began to feel sidelined. And there’s nowhere that felt the burn more than the nation’s pandemic boomtowns.

Cue the stomach-churning free-fall part of the roller-coaster ride.

Today, that electric real estate climate in these cities has fizzled. The depleted inventories have been replenished, homes linger on the market, and sellers increasingly adjust to modest price expectations.

Forgive the cliché, but there’s a “new normal” in some of these places.

As a proud Austinite, Realtor.com® senior economic analyst Hannah Jones has an up-close view of one of these markets.

“It’s been really challenging for sellers here to adjust their expectations because things got so hot, and that memory still feels really fresh,” she says.

Nonetheless, she notes, for buyers in Austin, “there’s a lot more breathing room.”

This rebalancing—between sellers' expectations and buyers' budgets and options—is a theme. At Realtor.com, we can see the areas that had the most dramatic pandemic surges have fallen when we examine the time it takes homes to sell, or what's happened with inventory or prices.

Let's dig into what the numbers show. Using the Realtor.com demand metric, which compares how many page views per listing any given area is receiving to all other areas, we can identify the pandemic boomtowns. We looked at major metro areas where the demand metric rose the most in the two years between the beginning of the pandemic and when interest rates began to rise.

https://www.realtor.com/news/trends/pandemic-boomtown-prices-market-slowdown/

WookieMan says

Hell even an LLC if you're wealthy enough to take the tax bath while you own it.

Tax bath? I know CA fines Californian's $800/year (it probably has gone up) for each LLC they own but otherwise isn't it designed to lower taxes?

https://sfstandard.com/2024/04/27/why-owning-a-home-in-san-francisco-has-never-cost-more/

Home prices in San Francisco may have settled down from the record highs set during the pandemic, but the hidden costs associated with homeownership are skyrocketing.

An analysis from Redfin found that the salary necessary to afford a median-priced home in the Bay Area is $404,332 a year, a nearly 25% increase from the year before. A scan through Zillow confirms that math—the average price for a single-family home remains stubbornly well over $1 million.

Paying for the upfront price of a home is still a buyer’s primary concern. But now, because of factors mostly outside of homeowners’ control, auxiliary costs—like utilities, property taxes, home insurance and maintenance work—are threatening to overtake already hefty monthly mortgage payments.

It’s all adding up to a more complex calculation for those looking to dip their toe in the market, with many first-time buyers already at their limits because of high interest rates. What normally would be a dream come true is quickly becoming a rude awakening for some.

Last year, home ownership affordability in the U.S. plunged to its lowest level since 1984, according to research from financial markets company ICE Mortgage Technology. ...

“The moment you cross the Bay Bridge, the costs double,” Ajdari said, adding that he’s seen workers disperse around the region since the pandemic. Most of the help he brings on tends to commute from the East Bay or Central Valley. ...

For a standard bathroom remodel these days, Ajdari has been quoting his clients at least $30,000 for the cost of labor alone. Any additional electrical work or customizations means extra fees.

The same job would cost half the price in most other states, Ajdari said. In Georgia, hiring a tile setter ran him approximately $3-$5 per square foot. In San Francisco, that number can go anywhere from $18-$30.

WookieMan says

A trust. Hell even an LLC if you're wealthy enough to take the tax bath while you own it. There are plenty of ways to transfer property to multiple kids and they split the proceeds or come to an agreement where whoever takes ownership pays rent to their siblings or get less cash inheritance. There are so many ways that the house doesn't hit the market. I guess maybe people are idiots I suppose?

It was in a trust. Stop talking like you know what is best for other people.

just_passing_through says

Tax bath? I know CA fines Californian's $800/year (it probably has gone up) for each LLC they own but otherwise isn't it designed to lower taxes?

You refer to the LLC's registration fees to the Dept of Corporations?

UkraineIsTotallyFucked says

Tax bath? I know CA fines Californian's $800/year (it probably has gone up) for each LLC they own but otherwise isn't it designed to lower taxes?

Around here, either an LLC or an S corp is used to stop double taxation while still allowing the protection of being a corporation (shield the shareholder from lawsuits or financial risk other than shares owned). A regular C corp is taxed on the profits and then the shareholders are taxed on dividends, hence double taxation. I never heard of an LLC being used to pass on an inheritance, but since an LLC requires no governance or shareholder restrictions (except limited to 100 shareholders) maybe that works. Still, I do not see how an LLC with a Chairperson doling out the inheritance is better than an executor with a will or trust.

HeadSet says

Around here

Right, I forgot about the lawsuit shields, silly me, that's a big part of the reasoning I was considering putting each of 3 houses in an LLC and then putting those under an S-corp in ... someplace I saw a guy yacking about in a pootube vidya a few years back. I think he was recommending Wyoming.

At any rate, I decided against because: my next post

UkraineIsTotallyFucked says

You refer to the LLC's registration fees to the Dept of Corporations?

@UkraineIsTotallyFucked, not exactly:

"Every LLC that is doing business or organized in California must pay an annual tax of $800. This yearly tax will be due, even if you are not conducting business"

https://www.ftb.ca.gov/file/business/types/limited%20liability%20company/index.html

So that would be $2400 for 3 houses which is about 1/2 the profit of one of them. Can you say, "Unfriendly business climate"?

Doh!

" Also, all LLCs and S Corps must pay a minimum franchise tax of $800 annually" - add in another $800 to make it $3200/year. Fuck that. I'm out.

I guess another bonus for moving is that not only can I do this now without getting raped, California isn't taxing my Texas rentals (rental income) anymore, la la la la laaa la!

Normally when it comes up I just tell people I'm saving about 25K in regular CA income taxes (day job in biotech) but it's actually more.

Nor my vacation rental in Maui but Maui and Hawaii make up for that - taxes keep rocketing up, year after year.

just_passing_through says

I was considering putting each of 3 houses in an LLC and then putting those under an S-corp

I can see maybe the LLC but an S corp, no way. Unlike an LLC an S corp requires stuff like setting up a board (President, Secretary, Treasurer) along with detailed tax hoops and reporting requirements.

just_passing_through says

I guess another bonus for moving is that not only can I do this now without getting raped, California isn't taxing my Texas rentals (rental income) anymore, la la la la laaa la!

Normally when it comes up I just tell people I'm saving about 25K in regular CA income taxes (day job in biotech) but it's actually more.

Nor my vacation rental in Maui but Maui and Hawaii make up for that - taxes keep rocketing up, year after year.

Eventually this will happen everywhere. More poor people, more taxes are needed to satiate them. Book it.

HeadSet says

I can see maybe the LLC but an S corp, no way. Unlike an LLC an S corp requires stuff like setting up a board (President, Secretary, Treasurer) along with detailed tax hoops and reporting requirements.

Interesting... It's been a while but perhaps that (basically advert) video I saw had a back end plan for me to pay them to do that. I wouldn't do it without learning all about it first. I'd imagine if you know what you're doing you yourself could be all 3 of those people etc., though.

HeadSet says

I can see maybe the LLC but an S corp, no way.

Used to be Shoobx before Fidelity acquired it.

https://www.fidelityprivateshares.com/

Al_Sharpton_for_President says

HeadSet says

I can see maybe the LLC but an S corp, no way.

Used to be Shoobx before Fidelity acquired it.

https://www.fidelityprivateshares.com/

That is for a C Corp, an even worse a mechanism to pass real estate to kids. Impressive product, though.

UkraineIsTotallyFucked says

But the Rate Cut Geniuses on PatNet said...


https://wolfstreet.com/2024/05/01/oh-deary-where-did-my-rate-cuts-go-feds-wait-and-see-now-entrenched-and-suddenly-lots-of-talk-about-rate-hikes/

Strange. All the homes in my hood are flying off the lot at asking and above, even the very expensive ones. Flight from urban to suburban?
zzyzzx says

UkraineIsTotallyFucked says

https://wolfstreet.com/2024/05/05/the-reasons-feds-bowman-is-willing-to-hike-rates-if-incoming-data-indicate-that-progress-on-inflation-has-stalled-or-reversed/

https://finance.yahoo.com/news/80-of-americans-think-its-a-bad-time-to-buy-a-house-190058819.html

80% of Americans think it's a bad time to buy a house

it’s expensive even here in red state. most people who buy are coming with equity from their big city sale.

Ceffer says

Strange. All the homes in my hood are flying off the lot at asking and above

Here also, in San Jose.

One in my neighborhood had a "sold" sign one week after the "for sale" sign was put up.

According to Zillow these places have about a 100% ownership premium over renting.

There seems to be an air of desperation to secure a purchased residence around here for the privilege to pay double what it'd cost to rent, with a locked in super high property tax bill. Reminds me of patrick.net folks surferex back in the day, and BayArea nowadays.

zzyzzx says

https://finance.yahoo.com/news/80-of-americans-think-its-a-bad-time-to-buy-a-house-190058819.html

80% of Americans think it's a bad time to buy a house

Unless you are to purchase now and then rates go down by a lot in the next few years, that is.

B.A.C.A.H. says

Ceffer says

Strange. All the homes in my hood are flying off the lot at asking and above

Here also, in San Jose.

One in my neighborhood had a "sold" sign one week after the "for sale" sign was put up.

According to Zillow these places have about a 100% ownership premium over renting.

There seems to be an air of desperation to secure a purchased residence around here for the privilege to pay double what it'd cost to rent, with a locked in super high property tax bill. Reminds me of patrick.net folks surferex back in the day, and BayArea nowadays.

I think this will continue. More and more people will have to settle as renters for life and owners will see massive tax increases over ownership lifetime.

GNL says

owners will see massive tax increases over ownership lifetime.

1978 Prop 13 Ponzi scheme limits the tax as it ties in with purchase price and forces owners to lock in the property to make supply thin and skyrocketing RE prices for people with deep pockets. In recent weeks, I heard from a ex-coworker who he knows 2 guys bought shacks, first one worth 4mil, the other guy, his neighbor for few mils as an upgrade and moves out from his current south SJ home! Both work for Nvidia. For some of these guys based on stock run up, buying any house is just a peanut as their options worth double digits mls (I think, I know few!)

B.A.C.A.H. says

Here also, in San Jose.

One in my neighborhood had a "sold" sign one week after the "for sale" sign was put up.

According to Zillow these places have about a 100% ownership premium over renting.

There seems to be an air of desperation to secure a purchased residence around here for the privilege to pay double what it'd cost to rent, with a locked in super high property tax bill. Reminds me of patrick.net folks surferex back in the day, and BayArea nowadays.

Corporate purchases?

Or investors trying to tie up hard assets in real estate before the real currency plunge.

Big Short 2.0

$1 trillion to $2 trillion to be injected into housing by August via GSE Home Equity financing. Election Year!

Inflationary? Not until after the election, of course.

Also, only about 15% of home loans are originated by private lenders today. If Freddie & Fannie were shut down today, the entire mortgage industry would disappear.

https://youtu.be/14l35U0oar0?si=PmkPRY5E8AwH3k--

How will these trillions be injected into housing?

GNL says

How will these trillions be injected into housing?

The fed prints money, they loan this .oney at huge discounts to banks, blackrock is a bank, they will borrow this money, they will by the homes.

This is why deficits matter. The more our government prints the more enslaved our nation is

richwicks says

GNL says

How will these trillions be injected into housing?

The fed prints money, they loan this .oney at huge discounts to banks, blackrock is a bank, they will borrow this money, they will by the homes.

This is why deficits matter. The more our government prints the more enslaved our nation is

I get the printing part but, you’re saying that Blackrock will be given the money to purchase 1-2 trillion dollars worth of homes?

As I understand it, Freddiemac is being given the go ahead to finance 2nd mortgages and home equity loans as a way to get people to spend their equity.

GNL says

I get the printing part but, you’re saying that Blackrock will be given the money to purchase 1-2 trillion dollars worth of homes?

I'm saying that the Uas going into debt is being offset by purpose shoving up home prices. This will make us a nation of slaves.