patrick.net

RWSGFY says

I'm far from 56 but with couple of decades left on my 2.15% mortgage I sure as shit won't own my house outright by that age. Because paying down loan this cheap would be stoopid.

For that situation, yes. But I suspect you have enough assets to pay off that mortgage if the rate was higher.

AmericanKulak says

Without a price (not rate) collapse, the people who can afford to buy at current prices will be over 60.

Get ready for the demo-driven crunch. Even if Trump deports 10M

I am not sure about the housing supply impact as far as deporting the criminal category among illegal immigrants as they likely live 4 persons to one bedroom, and likely in low cost housing.

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AD says

illegal immigrants as they likely live 4 persons to one bedroom

Prince William County

HeadSet says

AD says

illegal immigrants as they likely live 4 persons to one bedroom

Prince William County

yes barrios like Manassas Park

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AD says

I am not sure about the housing supply impact as far as deporting the criminal category among illegal immigrants as they likely live 4 persons to one bedroom, and likely in low cost housing.

Minimum 20M illegals, not counting the massive influx of student visas, H1Bs, H2Bs, etc. exploding over the past 3 decades.

So at least 5M bedrooms occupied.

https://x.com/nickgerli1/status/1884991201281036711

AmericanKulak says

Median First Time buyer age climbs to 38, all time high

Average Homeloan Buyer age climbs to 56

Where are these stats coming from? I'm 41 and hang with 33-55 year olds. Everyone owns their home and will have it paid off by 60. No renters.

Fact is that stats account for losers in the mix. Which they generally live in cities or suburbs and just rent. Point is it drags down the stats. All the guys and gals I hang with owned a home before 30. Probably inner-city blacks and foreigners that will never own. A local gas station owned by Indians just live at the place. So they wouldn't be counted in the stats.

Also a lot of people inherited their parents home, boomers. They either died or downsized and paid cash. Housing stats are going to be misleading for a decade. Building is the biggie. Track that metric for your area and you'll understand.

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https://www.fastcompany.com/91267785/housing-market-americas-largest-builder-says-rising-housing-inventory-impact-sales-florida-texas

naturally the first oversold areas are the more attractive retirement areas like Florida and Texas

I wonder if work from home is one factor, albeit not the largest one, for them being oversold
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AD says

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https://www.fastcompany.com/91267785/housing-market-americas-largest-builder-says-rising-housing-inventory-impact-sales-florida-texas

naturally the first oversold areas are the more attractive retirement areas like Florida and Texas

I wonder if work from home is one factor, albeit not the largest one, for them being oversold
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That is why I price the market value for Florida panhandle as being 80% of the peak price set in early 2022 when the 30 yr mortgage rate was 3%

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WookieMan says

Where are these stats coming from? I'm 41 and hang with 33-55 year olds. Everyone owns their home and will have it paid off by 60. No renters.

https://www.cnbc.com/2024/11/04/homebuyer-average-age-rises-to-56-amid-rising-homeownership-costs.html

https://www.cnbc.com/2024/11/05/the-average-age-of-first-time-us-homebuyers-is-38-an-all-time-high.html

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Invitation Homes, a public traded SFH R/E company, is trading at a 30% discount to assets. American Homes 4 Rent, another stock, also trading at a discount.

Tells you something about what the smart money REALLY expects for for the next year.

House Price to Annual Rent is averaging at 18 years; the norm is 12.

Inventory is rising in most markets, while buyers are staying away in droves, with 1994 transaction levels in a country with at least 30% more population since then.

Everything points to the market being about 30% overpriced. Price, not rates themselves, is the bottleneck

AmericanKulak says

Everything points to the market being about 30% overpriced. Price, not rates themselves, is the bottleneck

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

Factor in a 25% increase in household income since peak home price (around March 2022 in the Florida panhandle when the 30 yr mortgage rate was 3%), and I figure home prices should be about 20 to 25% below peak home price.

That should increase sales volume or liquidity, unless potential buyers are that stingy waiting on the sidelines.

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Correct. There is also data that Blackrock and others through their various LLCs are putting houses on the market, including at a loss, at about 5% of holdings per quarter.

Slow so they don't tip their hand too much or flood the market, but it's clear where Big Money thinks the housing market is headed : Down.

AmericanKulak says

Correct. There is also data that Blackrock and others through their various LLCs are putting houses on the market, including at a loss, at about 5% of holdings per quarter.

Slow so they don't tip their hand too much or flood the market, but it's clear where Big Money thinks the housing market is headed : Down.

I don't care about Blackrock. No one wants to sell. Mortgage applications drop because there's nothing to buy. Why move from a 3-4% mortgage when you can mostly work from home and can't afford the higher prices. You stay put. Covid created a different real estate market.

Maybe Chicago, but there's literally no inventory where I live. Prices are not dropping here in IL is all I know.

Also for the other comment. "Smart" money also was massively wrong during the housing bust and people lost a ton of money. Somehow they're right this time?

WookieMan says

I don't care about Blackrock

Because reality pisses all over your little world that you keep insisting should be real for the rest of us, that's why.

Why is this comment voted #2 Best Comment, Wookie?

B.A.C.A.H. says

WookieMan says

H1B's likely didn't own.

You claim to have Extreme Knowledge about a place you've never lived, and never worked in the trenches, nor experienced first hand the facts on the ground.

The Bay Area, which has a GDP and population bigger than most states, is chocked full of H1 homeowners. I've known many of them.

WookieMan says

No one wants to sell. Mortgage applications drop because there's nothing to buy.

Which would have upward pricing pressure, but assuming the potential buyers are wrong, why discount a major SFH owner 30% if that's right?

WookieMan says

Maybe Chicago, but there's literally no inventory where I live. Prices are not dropping here in IL is all I know.

been through this before in Florida as its a roller coaster as far as housing supply and demand

but this time, because of the lack of subprime mortgage environment like in 2008, I don't think we'll have a +50% drop from peak price (set in early 2022 when the 30 yr mortgage rate was 3%)

I am just astonished how the 30 yr mortgage rate is stuck above 6.5% for such a long time

but its all coupled or connected together (the knee bone is connected to the ...) whereas the Fed Funds rate hovers around 4.5% (so does the 1 yr CD rates and 10 Year Treasury rate), and the 30 Yr mortgage rate is usually 1.5% higher than the 10 Yr Treasury .. mortgage note holders are demanding a 7% interest rate

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https://www.newsweek.com/american-homeowners-have-regrets-about-buying-their-house-2023988

DOGEWontAmountToShit says

WookieMan says

I don't care about Blackrock

Because reality pisses all over your little world that you keep insisting should be real for the rest of us, that's why.

Why is this comment voted #2 Best Comment, Wookie?

B.A.C.A.H. says

WookieMan says

H1B's likely didn't own.

You claim to have Extreme Knowledge about a place you've never lived, and never worked in the trenches, nor experienced first hand the facts on the ground.

The Bay Area, which has a GDP and population bigger than most states, is chocked full of H1 homeowners. I've known many of them.

At what point did I claim knowledge of CA markets? I've said they're in for a rough ride. SFBA is different than San Diego area. It's like two different planets in the same state, been to both. I'd bet 60% or more SFBA residents haven't even been to San Diego. I've been to the 3 major metro multiple times.

Those H1B guys/gals are going to other states for work at some point. There's no need to be in CA unless you want to be. At some point tech will move to places like Texas, Phoenix, Nashville, South Carolina, etc. Housing and land cost for business is significantly cheaper in those areas. You can buy in TX and if work needs to be done you have a team of 10 people or whatever and fly them out to SFBA. That would cost less than 0.001% in overall revenue even if you had to do it weekly.

WFH changes the market as well. My buddy lives in Montana, bought a house there but is employed in IL. Same housing prices but cheaper property taxes. I get Elon and Vivek think you should work in an office, but some people do just fine with WFH. Covid changed things.

While the weather is great in CA as long as it's not on fire or you're slipping on shit and falling on a needle, people will move elsewhere. That was hyperbolic to an extent. H1B's are fine with that lifestyle, but given where they're coming from it's normal. Systems bend and eventually break. I live in a state that was exited the most in the last 2 decades I believe or at least top 3.

These fires in LA could literally drop GDP 5 percent statewide. Hollywood is dead. These won't be people making $150-200k/yr. They make millions a year at 13% top tax bracket and a lot are older and can move to a low cost of living area and rent a place for 3 months if they need to film a movie. CA will have to raise taxes on people that make less than the stars. Then those people start moving. And yes, I know you're taxed in the state you worked, but there are other studios now.

Don't believe, I don't give a shit, but I've lived it and have said coastal areas have problems coming. H1B's are a small percentage. You could know them all, that means nothing. A shift is coming for certain states. But hey, that guy that worked, studied and ran a real estate business knows nothing after 15 years working it.... (eye roll).

Who on this forum has worked in real estate? I know what GNL does, but that's not analysis (not a knock - I know you talk to a lot of brokers). You don't have to be on the ground in the location to analyze what is happening in 2025. There's enough data. Everyone gets one metric and doesn't compare it to another. Inventory vs mortgage applications. If people can't afford housing inventory would jump as people sell for different reasons. Building metrics. There's dozens of other metrics. People get sucked into median price and that's it.

One thing is clear: Divest of Northern Virginia Real Estate NOW

AmericanKulak says

One thing is clear: Divest of Northern Virginia Real Estate NOW

is that because of illegal immigration raids in shitholes like Manassas Park (Prince William County) and also Trump cuts to the federal bureaucracy (and contractors such as for USAID and US Dept of Education) ?

Did the People's Republic of Northern Virginia go thru some (even remotely) similar such as in the 1990s with the defense companies realignment ?

I remember Cocoa Beach and Cape Canaveral area went thru hardship as far as layoffs after the first Space Shuttle disaster

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AD says

is that because of illegal immigration raids in shitholes like Manassas Park (Prince William County) and also Trump cuts to the federal bureaucracy (and contractors such as for USAID and US Dept of Education) ?

I was mostly jesting, but with USAID gone I'd definitely not buy any Commercial REITs up there.

Florida is on track to have it's usual 10-15 year boom-bust cycle as always, and as always, people will ignore current numbers. Florida has net out migration among 20-39 age group because of shit wages.

https://www.youtube.com/watch?v=mrN7cDJCTEQ

Yet people are still talking like it's 2022. Builders are still building; and thanks to post 2008 FL Laws (State, County, City), multifamily builders can't just flip the switch, they gotta finish what they started.

https://www.youtube.com/watch?v=DT9hRF-nL5w

Florida is facing the ol' problem of "I want somebody cheap to serve me coffee and wipe my ass, but I don't want them living near me and I want my rental income to be very high" in a state with very little non-service industry (tourism, urinal bag changing).

No state income tax is great for a Minnesota retired teacher or NJ Fireman, but not as important for $18/hr young workers. The latter are better off with an income tax, but 20% higher wages with the same or lower housing costs. And many people tire of 90F/90%H in June-August; Young working people can't just stop working at their office, retail, medical job , hop in an RV, or guest bedroom surf relatives back north in Summer.

AmericanKulak says

And many people tire of 90F/90%H in June-August

It's like that around here, except not as much in June.

https://www.newsweek.com/florida-home-sells-130000-loss-housing-market-changes-2023830

Florida Home Sells At $130,000 Loss as Housing Market Changes

Blackstone, the property's owner, purchased the home for $490,000 in April 2022 and sold it on Wednesday for just $360,000—a sharp decline of $130,000, or roughly 27 percent.

zzyzzx says

https://www.newsweek.com/florida-home-sells-130000-loss-housing-market-changes-2023830

Florida Home Sells At $130,000 Loss as Housing Market Changes

Blackstone, the property's owner, purchased the home for $490,000 in April 2022 and sold it on Wednesday for just $360,000—a sharp decline of $130,000, or roughly 27 percent.

Yup.

DOGEWontAmountToShit says

https://x.com/nickgerli1/status/1884991201281036711

https://www.reddit.com/r/RealEstate/comments/1ifmteo/my_home_has_been_on_the_market_for_100_days/

My home has been on the market for 100 days. Should I pull it and rent it at a loss?

The commentary is priceless!

zzyzzx says

https://www.reddit.com/r/RealEstate/comments/1ifmteo/my_home_has_been_on_the_market_for_100_days/

My home has been on the market for 100 days. Should I pull it and rent it at a loss?

The commentary is priceless!

But the experts on PatNet told me....

Okie-Arkie median Rent: ~$1100
Okie Arkie median wage: ~$50k/year

FL median Rent: ~$1800
FL median wage: ~$53k/year

zzyzzx says

The commentary is priceless!

Awesome.

The problem is that his rent needs to rise at least $800 to meet his mortgage payments, heh.

"You can't stop what's comin', that's vanity" - Old Sheriff in No Country For Old Men.

DOGEWontAmountToShit says

But the experts on PatNet told me....

You always say this. How is my market doing? Sorry you live in a shit area. That sucks. Wish you luck.

AmericanKulak says

Florida is facing the ol' problem of "I want somebody cheap to serve me coffee and wipe my ass, but I don't want them living near me and I want my rental income to be very high" in a state with very little non-service industry (tourism, urinal bag changing).

No state income tax is great for a Minnesota retired teacher or NJ Fireman, but not as important for $18/hr young workers. The latter are better off with an income tax, but 20% higher wages with the same or lower housing costs. And many people tire of 90F/90%H in June-August; Young working people can't just stop working at their office, retail, medical job , hop in an RV, or guest bedroom surf relatives back north in Summer.

I'm seeing home sales volume at lot in Florida (listed on Zillow) at 20% to 25% below all-time high market price levels set in early 2022 when the 30 yr mortgage rate was 3%.

Also I'm seeing rents for 3 bedroom/2.5 bath townhomes in Panama City Beach around $2100, say price back in 2022.

It looks like we are in the phase of the latest Florida boom-bust-repeat cycle of household income catching up with housing costs like rent.

Also property insurance (as well as auto insurance) premiums are at worse staying the same as 2022 price levels, see below.

.........................................................

MIAMI, Fla. (WJHG/WECP) - During a press conference on Wednesday, Governor Ron DeSantis provided an update on Florida’s insurance market.

“Today I announced that Citizens Property Insurance will be instituting homeowners’ insurance premium decreases for three-quarters of Miami Dade, and statewide decreases averaging 5.6%.

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I was doing a Cap Rate estimate for a friend of mine's Panama City Beach townhome (3 bedroom/2.5 bath/2 car garage/built in 2017)

I figured your Cap(italization) Rate for your unit on $2200 rent/month on a sales price of 75% of its historic market price (set in early 2022) is AT LEAST 4.78%.

I'm noticing a lot of liquidity or sales volume for all over Florida (within my search of Zillow) for prices at 75% of all time price levels.

I am putting a spreadsheet together (along with a local rent to household income graph) in regards to this, and a News Herald journalist invited me to submit a guest column, but I'm honestly too fearful I may step on toes (like very big toes at the Central Panhandle Association of Realtors).

I used 75% (to all-time high of $335K) to take into account the seller covering most of the closing costs, etc.

[ { ($2,200 gross - $1,200 costs) x 12 } / (75% x $335,000) ] x 100% = ? ? ?

($12,000 / $251250) x 100% = 4.78%

I figure 8.78% annual ROI after adding 4% historical annual increase in townhome value, which is TAX FREE (via straight line depreciation, 1033 swap and then move into unit for 2 years to realize capital gains tax break of at least $250K)

I have the Professor Robert Shiller data that shows historical annual appreciation of 4% since the 1950s.

estimated $1,200 month/expenses :
$450: HOA fee
$400: prop tax and insurance
$150: M&R ( maint+repair includes 20 yr floor replacement, appliance replacement, etc )
$200: Century 21 Commander Realty property manager (or an equivalent LLC prop mgr)

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A couple each earning $18/hour in the hospitality and service industry (or working for one of the major hospitals) could afford $2200/month rent for the townhome mentioned in my previous post #5872 and not pay more than around 35% of gross household income for rent.

The townhome community has some amenities like clubhouse, gym, pool, and its gated.

And its within 15 minutes of drive (with traffic congestion) of the beach's epicenter for hospitality and service jobs.

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AD says

A couple each earning $18/hour in the hospitality and service industry (or working for one of the major hospitals) could afford $2200/month rent for the townhome mentioned in my previous post #5872 and not pay more than around 35% of gross household income for rent.

So about a little less than half their income on rent after tax and payroll tax on housing. On the $2500 that remains, they have to pay for a car, gas, insurance, renter's insurance, at least $100-200/month health care for their employee portion assuming no illnesses and they have excellent health care field and not shitty hospitality employer coverage, price of eggs, milk, etc.

And somehow also save $40k for a downpayment on a house.

Or they can forget the American dream despite being DINKs and have to take a bus to go shopping and to work like a Europoor from the 60s.

Lowered Expectations

https://www.youtube.com/watch?v=rZi41b1zcIU

Once upon a single 20-year old HS grad with a job but without a car was considered a total loser.

And yet, productivity has skyrocketed.

AmericanKulak says

So about a little less than half their income on rent before tax and payroll tax on housing. On the $2500 that remains, they have to pay for a car, gas, insurance, renter's insurance, at least $100-200/month health care for their employee portion assuming no illnesses and they have excellent health care field and not shitty hospitality employer coverage, price of eggs, milk, etc.

$6,120 gross household income per month ($18/hr for each member of the couple)
$5,202 assumed net household income (worst case is 15% total effective tax rate since no Florida state income tax)
$3,002 assume net household income after rent

I think likely I'm low balling at $18 per hour wage rate based on what I've first hand observed such as in my townhome HOA.

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AD says

$6,120 gross household income per month ($18/hr for each member of the couple)

18*40=720
720*4=2880
2880*2=5760

5760*.85 (which is a Way Too Low estimate of tax/payroll for DINK being only 15%)=$4900

$4900-$2200= $2700
$2700 - supergenerous only $200/month/couple employee share health care cost = $2500

No Car, Grocery, FPL, phone, utillities factored in yet.

AmericanKulak says

$6,120 gross household income per month ($18/hr for each member of the couple)

18*40=720
720*4=2880
2880*2=5760

5760*.85 (which is a Way Too Low estimate of tax/payroll for DINK being only 15%)=$4900

$4900-$2200= $2700
$2700 - supergenerous only $200/month/couple employee share health care cost = $2500

No Car, Grocery, FPL, phone, utillities factored in yet.

$18 per hour per person x 2 people x 2040 hours per year = $73,440 per year (or $6,210 per month)

Walmart Front Beach Road gives at least 2 weeks vacation time from what I was told for its +30 hours per week employees from what I was told by neighbors

utilities (electric, water/sewer, internet) : $250 per month
2 cell phones: $50 a month
groceries: $500 a month
used car costs: $350 a month
Walmart covers healthcare costs or its heavily subsidized thru the Affordable Care Act
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AD says

utilities (electric, water/sewer, internet) : $250 per month
2 cell phones: $50 a month
groceries: $500 a month
used car costs: $350 a month
Walmart covers healthcare costs or its heavily subsidized thru the Affordable Care Act
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This is a helluva barebones budget for DINKs.

$500/month per person on groceries, right?

About $750 for a couple would be the lowest reasonalbe budget, including all cleaning and hygiene supplies from Windex to Right Guard to Dish Soap to Tampons, digital coupon cutting, never Publix ro Whole Foods, but not mostly Ramen and boxed Mac n' Cheese, with meat and fresh vegetables in most meals. With no alcohol, not even a six-pack, and few snacks. Assuming they only get food out once a week or less.

If they ate like ghetto trash and just subsisted on Great Value soy snacks and Ramen, they might pull $600/month if they were hardcore shoppers about it. They make too much for EBT for sure.

My elderly mom spends $120/week on herself, with the Early Bird specials out 3-4x / week with the girls after Scrabble and the Club House Movie. She also uses grinds twice, second time for decaf and other Depression era tricks, including using rags not paper towels.

My FPL bill is about $150 June-September and $80 the rest of the year for a less than 900 sq ft apt. that gets a breeze from both coast and intercoastal.

My car insurance, with a 2022 mini-SUV, and squeaky clean record is almost $100/month.

$50 for two phones works for people who don't use their phones much, don't mind older phones, and are fine with a few GB/data/month. Which isn't many people under 40.

My friend who has a cute condo in Bradenton FL near Sarasota is having difficulty selling it.

Just after she put it on the market a pesky hurricane came by but spared her neighborhood.

She's lowered the asking price thousands of bucks.