patrick.net

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Adam Taggart (Thoughtful Money channel) is one of the best finance and investing commentators, along with MishTalk and the Wolfman (WolfStreet).

Where is Logan at Housing Wire ? Read this, and I agree as housing needs to at least drop 20% below peak level set in early 2022.

For our townhome, if its value drops 20% from peak level in early 2022, then that means our home would appreciate 4% annually from 2016 (year of purchase) to mid-2025.

Meanwhile, household income locally in the Florida panhandle has increased at least 15% from early 2022 to present day.

https://www.zerohedge.com/news/2024-11-19/big-drop-home-prices-coming-next-year-melody-wright

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not looking good for Florida residential real estate :-/

https://www.wfla.com/news/hillsborough-county/home-sales-in-tampa-fall-amid-hurricane-recovery-insurance-rate-increases/

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https://www.zillow.com/homedetails/1702-Annabellas-Dr-Panama-City-Beach-FL-32407/87637913_zpid/

this place has been on the rental market for over 100 days and still vacant and is about 2 miles from the beach

its listed for rent nearly at the same asking price back in January 2020 :-/

for townhome communities like this, usually 30 to 45% of the townhome units are rented (i.e., owned by landlord investors)

if rents stay down, that means landlord investors will pay less for townhomes in order to achieve a minimum capitalization (or "cap") rate :-/

most of the landlord investors I talk with depend on the townhome value going up about 3 % annually and they want a minimum cap rate of 4.5 % ; they hire a management company which charges about 10% of lease cost as part of maintaining the minimum cap rate

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AD says

I was originally planning on 50,000 miles transmission fluid change, but need to research this more.

90k miles is dangerous but they want you to buy autos more frequently. Less than 50k should be preferred.

gabbar says

AD says

I was originally planning on 50,000 miles transmission fluid change, but need to research this more.

90k miles is dangerous but they want you to buy autos more frequently. Less than 50k should be preferred.

You could take samples of the transmission fluid every 3 oil changes and have them analyzed just to be sure? That way you catch any issues with the CVT bands or pulleys starting to degrade and could still get optimum life out of the fluid.

DOGEWontAmountToShit says

Does this mean I'll get a good deal on a Citroën?

Shit. Current ones don't even look like the ones from the 70s and 80s.

They need to start selling their lower priced European cars in the US. Or make a US version here for cheap. Not everyone wants power seats, moonroof, heated everything, power windows, etc.

https://wolfstreet.com/2024/11/21/demand-destruction-for-existing-homes-sales-in-2024-on-track-for-lowest-since-1995-amid-highest-supply-for-october-in-6-years/

Demand Destruction for Existing Houses: Sales in 2024 Track Lowest since 1995 amid Highest Supply for October in 6 Years

Too-high house prices cause demand destruction on an epic scale. Buyers’ strike continues in November and December.

US 30-year fixed-rate mortgage approaches 7%

WASHINGTON (Reuters) - U.S. mortgage rates increased to a four-month high this week, which together with higher home prices could sideline potential buyers from the housing market in the near term.

The average rate on the popular 30-year fixed-rate mortgage increased to 6.84%, the highest level since July, from 6.785% last week, mortgage finance agency Freddie Mac said on Thursday. It averaged 7.29% during the same period a year ago.

Though the Federal Reserve has cut interest rates twice since September, U.S. Treasury yields have risen on strong economic data and investor fears that President-elect Donald Trump's policies, including higher tariffs on imported goods and mass deportations, could reignite inflation.

Mortgage rates track the 10-year Treasury note.

https://finance.yahoo.com/news/us-30-fixed-rate-mortgage-172746908.html

Al_Sharpton_for_President says

US 30-year fixed-rate mortgage approaches 7%

WASHINGTON (Reuters) - U.S. mortgage rates increased to a four-month high this week, which together with higher home prices could sideline potential buyers from the housing market in the near term.

Too much government debt on the bond market competing with the 30 yr mortgage bonds for bond market buyers

The 30 yr mortgage rate is usually around 1.5% greater than the 10 Year Treasury rate which is usually at least 1% greater than annual inflation.
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AD says

Too much government debt on the bond market competing with the 30 yr mortgage bonds for bond market buyers

Buyers of USTs are not the same buyers of mortgage paper (which is still bring bundled
..yes) and vice versa.

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Wolfman at Wolf Street and Mister Mish at MishTalk have excellent blog posts today about housing inventory.

Until housing prices drop more to account for +6% rate for the 30 yr mortgage, then housing inventory will accumulate.

For every 1% increase in the 30 yr mortgage rate, there should be a 10% drop in home price based on affordability standards.

Granted, since the 30 yr mortgage rate bottomed around 3% in early 2022, household income has increased about 20%. So accounting for this, home prices should be +20% below early 2022 levels.

Also home price to income ratio needs to drop more.

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Al_Sharpton_for_President says

OHH. Half Dome and full domes in the same shot.

OHH. Half Dome and full domes in the same shot.

AD says

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Wolfman at Wolf Street and Mister Mish at MishTalk have excellent blog posts today about housing inventory.

Until housing prices drop more to account for +6% rate for the 30 yr mortgage, then housing inventory will accumulate.

For every 1% increase in the 30 yr mortgage rate, there should be a 10% drop in home price based on affordability standards.

Granted, since the 30 yr mortgage rate bottomed around 3% in early 2022, household income has increased about 20%. So accounting for this, home prices should be +20% below early 2022 levels.

Also home price to income ratio needs to drop more.

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Something neither of these Gurus note is that most States have down payment assistance now for new homebuyers. It averages out at about $10k (Florida is right there in the middle of the pack). Toss in some personal savings and a few bucks from Mom and Dad and it levitates the historical price/income ratio.

Also, about 25% of houses are bought pure cash, Fuck the high mortgage rates.

Misc says

Also, about 25% of houses are bought pure cash, Fuck the high mortgage rates.

But it is the mortgaged purchases that determine prices in most markets.

zzyzzx says

Math was that guys weak subject in school. Or his contractors fucked him over. He overpaid for the house likely and then overpaid for the rehab. Outside of coastal areas, $50-75k is a solid profit on a flip. Better off working a part time job waiting for the deal. Should have waited until it was $300k. Doesn't go there, don't buy it.

Flipping is generally stupid in this market. Unless you can bird dog some senior or something looking to get rid of their house moving in with family or a home. Estate sale so to speak. The profit is minimal on flips outside of coastal areas. Even then it's tough. Gotta get to 12 months inventory and get bottom of the barrel. Either way short term cap gains are going to kill you on profit. Better off getting a multi-unit that you can eventually convert to condos after renting for 5 years.

WookieMan says

He overpaid for the house likely and then overpaid for the rehab

How does a buyer figure out if he is overpaying or not for a home? Real estate agents use comparables and this is how they justify the asking price.

gabbar says

WookieMan says

He overpaid for the house likely and then overpaid for the rehab

How does a buyer figure out if he is overpaying or not for a home? Real estate agents use comparables and this is how they justify the asking price.

comps don’t account for many things, it’s just sqft

DOGEWontAmountToShit says

Misc says

Also, about 25% of houses are bought pure cash, Fuck the high mortgage rates.

But it is the mortgaged purchases that determine prices in most markets.

Another thing that has come into being is that 34% of new buyers are coming in with downpayment assistance from Mom and Dad. When you add this to the $10k new buyer assistance from the State, it lifts the price of the house compared to price/income levels of the past. This is in addition to the 25% all cash buyers. So, yes, prices are inflated even for those with mortgages because of the extra coin being used for down payment.

gabbar says

WookieMan says

He overpaid for the house likely and then overpaid for the rehab

How does a buyer figure out if he is overpaying or not for a home? Real estate agents use comparables and this is how they justify the asking price.

Asking price means nothing. Research the owner of a property. The agent wants more commission. They do the higher price. You find the property owner or family is distress and offer a low ball number. Do that 50 times and you’ll hit.

Then don’t have shitty contractors that screw you over. Or do the work yourself.

Flipping is easy, humans don’t have patience or need money. It could take 6 months to find a flip and you’re not making money. Ultimately I’d never advise anyone to flip though. Need to educate yourself and it’s a full time job. If you have no trade skills your margins will be tiny.

People who use leverage to buy bitcorn get their clocks cleaned out regularly by whales and other actors.

Maga_Chaos_Monkey says

People who use leverage to buy bitcorn get their clocks cleaned out regularly by whales and other actors.

And yet Trump is supposed to set up a Bc reserve.

DOGEWontAmountToShit says

Maga_Chaos_Monkey says

People who use leverage to buy bitcorn get their clocks cleaned out regularly by whales and other actors.

And yet Trump is supposed to set up a Bc reserve.

i’d riot if they did that. bullshit coin as i call it, nothing more than some video game currency invented scam. our government is involved in this scam, it’s obvious, they would have shit it long ago otherwise. creating pyramid schemes is illegal.

I've been one of the bigger BTC bashers. I'm still gonna have my kids toss in $100 soon. They each have about $10k roughly in cash and I want them investing it.

I won't at my age, but my oldest at 14, in 20 years before it's finished mining it will likely be worth more. How much is the question. Still worth nothing in my world, but it's a small bet and they've barely worked yet. Not gonna break the bank.

DOGEWontAmountToShit says

And yet Trump is supposed to set up a Bc reserve.

Which is fine if they can't be margin called like the others I was referring to.

That's why we need to end the Fed. Yes, it would be 10-20 years of pain, but the boon to our kids, grandkids, and great grandkids would be immense.

No person that is a non USofA citizen (no dual citizenship either) should be allowed to own property in any state in the United States of America. No foreign companies or corporations either.

ForcedTQ says

No person that is a non USofA citizen (no dual citizenship either) should be allowed to own property in any state in the United States of America. No foreign companies or corporations either.

Furthermore - commodities futures markets should go back to way it used to be before the 1980's - only the producers and consumers of said commodities could participate in the futures markets that affected the products with which they were concerned. No hedge funds or "investment banks."

ForcedTQ says

No person that is a non USofA citizen (no dual citizenship either) should be allowed to own property in any state in the United States of America. No foreign companies or corporations either.

Agree with everything except dual citizenship. Would have to be a primary residence, basically you live here full time. Did it legally. I don't see a problem with that. My Canadian BIL will get dual citizenship soon. Will buy a home. Work in the states and produce something for other Americans.

Illegals shouldn't be allowed or non-primary residents. Can't just buy a home and let it sit there from China or somewhere else. Live and spend here 6+ months of the year.

Highest is 11 years? I thought this was an apocalypse.

Appalachia tool shed in Santa Cruz is now an even better bargain. This is what it costs for a beach sugar shack to enjoy thong season.

What does this have to do with housing prices?

Congruence.

The car market with tons of unsold inventory -- some even 2023 models -- need to crash drop prices low enough to clear out is also the same problem many housing markets across the nation need to do or will soon.

Dunno why these sectors can't figure out the obvious. Because YES the same actions are needed to clear out non-selling inventory on a market whether they be clearing the shelves off at WalMart or a supermarket or a carpet emporiom even a flee market stall: Either drop the damn prices enough via an EVERYTHING HAS TO GO liquidation sale OR product destruction.

If the car manufacturers designed and built cars that could be far more easily recycled, they could then do the latter even if housing can't. But noo...they don't. So crash selling it is.

But it is amazing how they fight against the waves like King Canute instead. So much for these idiots with business degrees, unlike homeowners.



https://wolfstreet.com/2024/12/04/cut-the-price-and-they-will-come-new-vehicle-sales-jump-in-november-amid-big-discounts-and-incentives-as-inventory-balloons/

Dealers were hoping the Covid times was "the new normal". I witnessed my co-worker buying a KIA for his daughter and it had $3K markup on a fucking $25K econobox. Any attempt to negotiate it down was met with "go shop around if you don't like our prices". He tried and every other dealer who even had a comparable car on the lot was marking up $5K+. He went back with his tail between his legs and paid the ask. The dealers and manufacturers held out as long as they could (hence these unsold 2023 cars on the lots), but now the race to the bottom has finally began.

I bet the holders of overpriced RE are watching stock market and wishing their money weren't tied up in the shacks...

Now homeloaners with 50 year old houses need to follow the car dealerships lead. We need 30% more, but 10% will do for the new year.