patrick.net

HeadSet says

Around here, there is a shortage of home listed because people do not want to sell their homes. One major reason is this example:

Current home, $1,000,000 mortgage at 2% has a monthly payment of $3,696.
Downsize home, $750,000 mortgage at 7% has a monthly payment of $4,990.

Moving to a smaller home at today's interest rates actually can increase the monthly nut and that is after costs like realtor commission and loan origination fees.

It's kind of like that here in California. Because the properties are mostly only reassessed upon sale (*).

If the zillow numbers are correct, a new neighbor on my street has an assessment of 1.05 M with annual tax bill of $15,000, for a 3/2 1200 sq ft 1970 construction with a bit of lipstick on the pig. A few doors away our assessment on 4/2 is about 350k with a tax bill of about $6000 (just a pig, no lipstick).

(*) Major renovations or improvements can cause the place to be reassessed without a change of ownership. Before s/he "went silent" on this blog BayArea shared about something like that happening, or threatened by a county agent to happen, after he upgraded his recent TriValley home. I know someone else, also in Alameda County, who had that happen.

AD says

try the best place on Earth ... its the American Riviera ... the Florida panhandle...

Too far to drive every weekend to Central FL. :(

Next housing crash coming soon? I know when we searched for rentals in Yuma, a number of owners were trying to rent after failing to sell for their desired price. And just like last year, a number of rentals dropped their prices a hundred dollars or more before they found tenants. The place we are moving to was originally listed for $100 more a month.

https://www.zerohedge.com/markets/housing-market-cracks-record-number-listed-homes-have-price-drops

AmericanKulak says

AD says

try the best place on Earth ... its the American Riviera ... the Florida panhandle...

Too far to drive every weekend to Central FL. :(

Not trying to be a dick, but who wants to be in central FL? We've been trying out different places in FL besides the Panhandle and central FL is a shit hole of crappy tourism and just nasty locals. I'm on AD's side on this one. Southern Florida is nice, but I'd prefer the Panhandle from Appalachicola to Pensacola. Anything between that and Southern Florida is a bunch of carpet bagging douche bags and shitty cops. Fuck ton of cunt New Yorkers. Count me out.

But the Housing Experts on PatNet told us...

zzyzzx says

With inflation that's a nothing burger. Look at the last peak. $500k is where it crashes. We're not there at least in the South. Remember the last peak was loan related. It's more secure/better at this point. Not perfect.

The largest generation is coming online housing wise. The floor is high. Loans more secure. Less building. I wouldn't bet against housing even if it pisses people off. I'm about to drop $700k on a house in small town America. We can and will be able to afford it. I don't even care if rates come down. I simply don't care.

Inflation is killing poor people. People of means and money are doing just fine. That's why Biden loses. If you can't keep up with the Jones' you have to blame someone. Trump has been out of office almost 4 years. Who they gonna blame?

A new 760 square foot home community in Fort Worth by Lennar on the Left

A row of chicken coops on the Right.

Homes are selling for $197k.



https://x.com/texasrunnerDFW/status/1811039587633906161

WookieMan says

The largest generation is coming online housing wise. The floor is high. Loans more secure. Less building. I wouldn't bet against housing even if it pisses people off. I'm about to drop $700k on a house in small town America. We can and will be able to afford it. I don't even care if rates come down. I simply don't care.

Older people get sicker, can't climb stairs, need less house, need equity to pay for assisted living or physical therapy visits.

A million multifamily units are coming on. Localities are now forcing developers to finish them.

We're about to have the largest group of people in US history - born 1957 - start heading for bum knees, wheelchairs, and Oxygen tanks that make stairs and high counters a bitch.

Leslie Lesbo McCormick of Cape Cod doesn't want to move to the Villages when her mother passes away. She's gonna dump the house for the cash.

Interest rates aren't going down this year, and they'll be cut a fraction each quarter.

Expect a massive rental/housing price collapse.

True, single level houses have been heavily sought after here by old folks lately. I like stairs, gives you a good workout every day

https://wolfstreet.com/2024/07/10/home-buyers-remain-on-strike-housing-market-still-frozen-as-prices-are-too-high-mortgage-rates-still-7/

$100/sqft or walk.

Also, Geodesic Dome houses have major leakage/rot problems, I discovered. Water gets trapped in all the corners, sometimes from INSIDE the house (ie not coming from the outside, but humidity inside). Very common to them.

mell says

True, single level houses have been heavily sought after here by old folks lately. I like stairs, gives you a good workout every day

Takes more land for a ranch hence why you see the "chicken coop" homes in the above comments. Geezers maybe need 800 sq. ft if they want a detached home. Geezer don't want a yard. They can get more per square acre by putting 6 cheaply built homes in one acre.

Housing is math. Boomers didn't save and cannot afford their monstrous houses. They don't want to be embarrassed though by moving into a condo or townhome. So these mini houses with little maintenance are perfect for them. It will become a ghetto when they die though.

WookieMan says

Boomers didn't save and cannot afford their monstrous houses.

Yes, Wookie - and that's the crux.

They GOTTA sell, esp if they get sick and need additional help.

Problem is, nowhere near enough people to buy them. Hector the Mexican and Alice the $18/hr cashier single mom can't afford $450k for a 1800 sq ft ticky tack shack they don't need and can't buy. With the 30-year old roof and the HVAC system that Uncle Fred put up with because at 72 he didn't notice it's 80F inside the house because the system is on the fritz due to old man heat insensitivity.

AmericanKulak says

Problem is, nowhere near enough people to buy them. Hector the Mexican and Alice the $18/hr cashier single mom can't afford $450k for a 1800 sq ft ticky tack shack they don't need and can't buy. With the 30-year old roof and the HVAC system that Uncle Fred put up with because at 72 he didn't notice it's 80F inside the house because the system is on the fritz due to old man heat insensitivity.

yep, its all about housing affordability

such as using rudimentary ratios like housing price to household income ratio to monitor trends with housing affordability

and I agree you have to account for "total ownership costs" or "life cycle costs" which include also maintenance and repair (M&R) ; and that is why a family member is getting a reversible mortgage to help them financially comfortably live in their retirement home

that is why I see it common for Florida panhandle townhomes to be "boarding houses" where each bedroom is rented out

and that is why they are not selling now as the landlord investors are sitting on the sidelines, and from my review of county records, at least 50% of the townhomes are rented

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AD says

and that is why they are not selling now as the landlord investors are sitting on the sidelines, and from my review of county records, at least 50% of the townhomes are rented

Probably waiting for lower rates I imagine.

One a different tack, one nice thing that I think is happening is that Wokanda is falling because Venture Capital can't keep loaning money as Angel Investors to wokish media with these rates. Their money is no longer "Practically Free".

An Aussie firm just basically shut down and cancelled all their content republishing contracts with Vice, Kotaku, and a bunch of other wokey media .

So many things are coming to a head.

AmericanKulak says

Probably waiting for lower rates I imagine.

I wonder how this company Open Door (stock ticker: OPEN) is faring and when will it go bust :

https://www.opendoor.com/homes/colorado-springs

Been hearing about a lot of layoffs recently like today's report of layoffs at John Deere, CNN and Intuit (i.e., Turbotax, etc).

How long before enough voters do not believe the economy is good ? The S&P 500 going up does not help this, as the investor class or Wall Street (not main street) reap the gains.
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WookieMan says

Boomers didn't save and cannot afford their monstrous houses.

A family member age 75 lives in a home around $950,000 in Colorado on eastern side of Rocky Mountains and bordering a national forest. It cost total around $275,000 for the 5 acres land and to finish building the house in 2002.

They have a 1 bedroom garage apartment they rent for $1300 a month (which includes electricity, heating, internet, water, sewer) and their other source of income is $1300 a month from Social Security.

So I helped them secure a reverse mortgage at a rate of CMT + 1.25% margin + 0.5% FHA insurance. CMT is around 5% this year and tracks 1 year Treasury, so their rate this year should be around 6.75%.

Their closing costs are around $22,000 and the bank is willing to give them up to $400,000.

But they only need about $80,000 to pay off a HELOC at the prime rate, and maybe another $100,000 over the next 25 years to cover maintenance and repair, as well as increase in property insurance and property taxes.

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https://www.redfin.com/news/rents-fall-in-florida-austin-june-2024/

Rent Prices Are Dropping Across Florida’s Most Populous Metros

AD says

So I helped them secure a reverse mortgage

Gee, you mean grandma wouldn’t have been kicked out of her two million dollar 1940’s rambler in Solana Beach, and that there was no reason for Prop 13?

Boomers aren't the ones with a problem unless they need assisted care and hence move out. Our local expensive gym is full of boomers talking about their house projects and vacations while the youth is serving them towels. The boomers are mostly nicely set by cutting their taxes while they were young and now coasting on newly embraced socialism Marxism, fucking over their transgendering youth.

mell says

Boomers aren't the ones with a problem unless they need assisted care and hence move out. Our local expensive gym is full of boomers talking about their house projects and vacations while the youth is serving them towels. The boomers are mostly nicely set by cutting their taxes while they were young and now coasting on newly embraced socialism Marxism, fucking over their transgendering youth.

Money needs time to grow. You don't have to be a genius to have couple of mil by the time you are the boomers age. And there is nothing abnormal in not having much money when you're fresh out of school. It's just how money works.

RWSGFY says

mell says

Boomers aren't the ones with a problem unless they need assisted care and hence move out. Our local expensive gym is full of boomers talking about their house projects and vacations while the youth is serving them towels. The boomers are mostly nicely set by cutting their taxes while they were young and now coasting on newly embraced socialism Marxism, fucking over their transgendering youth.

Money needs time to grow. You don't have to be a genius to have couple of mil by the time you are the boomers age. And there is nothing abnormal in not having much money when you're fresh out of school. It's just how money works.

Sure but they cut taxes while they were in their prime to amass more money and now it's all about don't touch myh medicare! Tax the able! Fuck that. Medicare and to a lesser degree SS are the main reason this country is in high debt trouble, followed by money for illegals and welfare, then the mic. There are some rich Gen x ers who made good money with tech stocks but once you crossover to Y/Millenials it's looking bleak for them due to rampant inflation and high debt pressure. They don't make enough to invest much in the already inflated asset market. They would benefit greatly from deflation but they're not gonna get it, that's one reason the housing/rent market won't crash.

No more SS Withhold increase.

Also, no SS Age increase. Cut benefits for those collecting or about to collect.

Literally every single SS "Fix" was thrown on working adults. Let this one be on the retirees for once.

In fact, SS Withhold should be dropped to 10% maximum, including for self-employed.

mell says

Boomers aren't the ones with a problem unless they need assisted care and hence move out.

Maybe in wine country. Ain't that way across most of the country. Boomers are broke in most places. Government workers made out the best.

I like you guys here, but you need to realize that CA is NOT the rest of the country. Not by a long shot. Traveled all lower 48 multiple times over. East of the Rockies is just different and even more different east of the Mississippi. Colorado is the current outlier in that region.

Most boomers are on fixed income. A dismal 401k plan or pension. No actual wealth. My mom has $1M+ in the bank and a $90k/yr pension. She's extremely rare at 70 to have that cash and pension. All my parents friends are around that age. Some do well and 8/10 are broke. Just reality.

They have already started 'means testing' for medicare premiums under Social Security. It is a finger in the wind to see what they can get away with and should be the foundation for a class action suit against the government.

Of course, if they continue the trend in like Starmer, they will means test Social Security itself right down to just denying payments on a pro rata basis to certain groups, and, of course, turn down the spigot to some and turn it up to apparatchiks i.e. "We only have this much and it has to be divided unfairly to bribe those in our Great Decortication and Frontal Lobotomy Project."

Starmer already has sophistry in place virtue signaling his atrocities as some kind of bizarre fairness doctrine.

zzyzzx says

https://www.redfin.com/news/rents-fall-in-florida-austin-june-2024/

Rent Prices Are Dropping Across Florida’s Most Populous Metros

Yeah look at the townhome HOA's or communities on east side of Panama City Beach.

A 3 bedroom, 2.5 bath, 2 car garage townhome is going for $2000 a month, and that is about what was charged 2 years ago.

The same townhome rented for $1500 back in 2017.
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Al_Sharpton_for_President says

AD says

So I helped them secure a reverse mortgage

Gee, you mean grandma wouldn’t have been kicked out of her two million dollar 1940’s rambler in Solana Beach, and that there was no reason for Prop 13?

Nah, it is a family member on the edge of Rocky Mountains in Colorado who saw their home value go from $250,000 in 2002 to around $900,000 in 2024, or about an annual appreciation rate of 6% compare to an average annual inflation rate of around 2.5%.

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WookieMan says

Most boomers are on fixed income.

That means nothing, everybody is when they stop working. There is no reason for a boomer to be broke, just look at the house price appreciation. It's the same for the east coast. Pension and 401k plans just started getting slashed in the past 2 decades til now, and some may still be too high to be sustainable.

mell says

WookieMan says

Most boomers are on fixed income.

That means nothing, everybody is when they stop working. There is no reason for a boomer to be broke, just look at the house price appreciation. It's the same for the east coast. Pension and 401k plans just started getting slashed in the past 2 decades til now, and some may still be too high to be sustainable.

I understand the "pensions getting slashed", but what does "401k getting slashed" mean?

RWSGFY says

Money needs time to grow. You don't have to be a genius to have couple of mil by the time you are the boomers age. And there is nothing abnormal in not having much money when you're fresh out of school. It's just how money works.

Yeah that is why I put $4000 in Vanguard Healthcare Fund back in 1993 and never withdraw from that fund as of today.

Its about "time value of money" and hold-long-term in reliable or safe assets.

.mell says

There are some rich Gen x ers who made good money with tech stocks but once you crossover to Y/Millenials it's looking bleak for them due to rampant inflation and high debt pressure. They don't make enough to invest much in the already inflated asset market. They would benefit greatly from deflation but they're not gonna get it, that's one reason the housing/rent market won't crash.

We shall see when the Trump tax cuts expire next year. CPI is now down to 3% and PCE has remained below 3% since October 2023, yet short term rates like 1 year Treasury are not budging much.

All of this points to less inflation and I've noticed in my county that rents seem to be holding steady for last 2 years while household income has risen some.

Younger generation like 21 to 30 year old need to do side hustle like work gigs (i.e., online surveys) to earn an extra $250 a month which can go into their Roth IRAs and into a stable/reliable asset like Total Stock Market Fund.

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RWSGFY says

mell says

WookieMan says

Most boomers are on fixed income.

That means nothing, everybody is when they stop working. There is no reason for a boomer to be broke, just look at the house price appreciation. It's the same for the east coast. Pension and 401k plans just started getting slashed in the past 2 decades til now, and some may still be too high to be sustainable.

I understand the "pensions getting slashed", but what does "401k getting slashed" mean?

They don’t have them. Go to Home Depot and look at the demographic. Same with restaurants. Boomers are broke for the bottom 90%. They have to work menial jobs to pay bills. I’m 41 and generally don’t work.

If someone can tell me how boomers are doing it right send me the notice. Ain’t seeing it.

WookieMan says

They don’t have them. Go to Home Depot and look at the demographic. Same with restaurants. Boomers are broke for the bottom 90%. They have to work menial jobs to pay bills. I’m 41 and generally don’t work.

If someone can tell me how boomers are doing it right send me the notice. Ain’t seeing it.

I see boomers working in Colorado and Florida panhandle at the Ace Hardware stores, Walmarts, etc.

I think maybe at most 30% of boomers are financially thriving, and those include my family member who has a $900,000 home (and now a reverse mortgage with a 1.25% margin rate and 0.5% FHA insurance rate), a $1300 monthly payment from Social Security, and has a net income or profit of about $500 a month from renting a garage apartment (for $1300 a month).

The rent for the garage apartment goes to property tax and insurance, utilities, and maintenance and repair for the entire real property on 5 acres.

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WookieMan says

I like you guys here, but you need to realize that CA is NOT the rest of the country. Not by a long shot.

This is one of the best comments on Patnet. Where are all the California fluffers here to respond to this ?

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Many boomers are desperately waiting to sell their "Haddonfield, IL" house for $500k to buy a townhouse somewhere cheaper.

The problem is: The buyers aren't there.

And Chinese or Colombian uber wealthy foreign buyers and wannabe AirBNB moguls aren't interested in Haddonfield, IL (or Woonsocket, RI or Erie, PA or Des Moines, IA)



This used to be owned by a corrections officer married to a P/T cashier wife. Or a divorced cop. Or a mechanic with a SAHM wife. Now it's 6-8x median household income ($300k+)

AD says

WookieMan says

I like you guys here, but you need to realize that CA is NOT the rest of the country. Not by a long shot.

This is one of the best comments on Patnet. Where are all the California fluffers here to respond to this ?

.

Interesting, I was going around DC area last month. While talking things different around in a group, one guy cut short and said, CA is not exactly US, like WookiMan said, discussions ended abruptly!

This house sold in 2018 for ~$260k, a few years before that in 2014 for $120k (probably a fixer upper that flipped). Then again a few years ago for ~$425k. Now they want $440k for it. This house doubled in price in less than a decade. Did salaries?

And you've got the infamous NJ Property Tax, which must be murder on a $400k+ house.

Edit: Almost $10k year in property tax, double from a decade ago.

If you made $70k/year, your property taxes alone before maintenance, insurance, mortgage payments, etc. would be around 15% of your gross income.

https://www.zillow.com/homedetails/1111-River-Rd-Piscataway-NJ-08854/39151376_zpid/

Here's a "Haddonfield" equivalent house: $550k

This one doesn't look like a sale/transfer was done in the past 15-20 years, for a long while the assessment was about $110k. I'm guessing maybe early-mid 90s was the last purchase before this sale. Have wages/salaries gone up 450%-500% since the 90s?

https://www.zillow.com/homedetails/248-Westfield-Ave-Piscataway-NJ-08854/39150949_zpid/

WookieMan says

I understand the "pensions getting slashed", but what does "401k getting slashed" mean?

They don’t have them. Go to Home Depot and look at the demographic. Same with restaurants. Boomers are broke for the bottom 90%

But it means they never had them in the first place, not that "they are getting slashed".

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https://www.zillow.com/rental-manager/market-trends/32407/?propertyTypes=townhouse&bedrooms=3

https://www.zillow.com/home-values/71975/panama-city-beach-fl-32407/

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