patrick.net

https://www.reddit.com/r/realestateinvesting/comments/x36qi5/is_rent_dropping_in_your_city_what_to_do_with/

What to do with cash flow negative rental

https://www.bloomberg.com/news/articles/2022-09-02/toronto-home-prices-drop-16-in-historic-five-month-correction

Toronto Home Prices Drop 16% in Historic Five-Month Correction

zzyzzx says

https://www.bloomberg.com/news/articles/2022-09-02/toronto-home-prices-drop-16-in-historic-five-month-correction

Toronto Home Prices Drop 16% in Historic Five-Month Correction

Not enough

https://www.reddit.com/r/REBubble/comments/x3jimp/the_seemingly_normalization_of_formerly_average/

In desirable metros/coasts like California it seems to have become the norm that what would have been considered an average home (3 bed/2 bath) 10-20 years ago under $1 million has creeped to this $1.5-2+ million price point, with salary growth way behind. That comes around to about a $10k+/mo payment for a 30 year mortgage, or an annual salary around $350-400k+ (assuming monthly payment 30% gross), for 30 years. Makes you wonder how in the world are there that many people not just with with that salary range, but also with that job security in that salary range for 30 years? Or rather than salary do people have really enough stock options to safely afford that mortgage? Or are a lot of these mortgages actually risky if there is a round of layoffs or their stock options plummet? How many people are paying more than 30% gross income as their mortgage payment?

I just don't get is how this elevated price point is sustainable even in the next 5-10 years, or at the very least how this price point can keep creeping up from here. Most physicians barely make that (choosing them as an example because they would have that type of 30 year job security), except for the higher paying specialties. And there's no way a whole city is only physicians living there. You could consider dual income couples in tech or tech executives, but do they really have the job security over 30 years or the amount of stock to sell off to pay off their mortgage if they get laid off and job market slows?

Has anyone done the math and calculated if there's even enough potential salary in the area to buy up all of these homes in that price range? Regardless of the stock market, looming energy crisis, and Russia/China situation, even with all things being stable, the home values can't keep spiraling away from salary growth forever.

https://www.reuters.com/markets/us/feds-williams-mbs-sales-could-be-an-option-down-road-2022-05-16/

Sales of Fed's mortgage-backed securities may be future option

May 16 (Reuters) - New York Federal Reserve President John Williams said on Monday that selling mortgage-backed securities could be an option for the U.S. central bank to consider down the road in its goal to orient its balance sheet largely around holdings of Treasuries.

Realtor trolls other realtors:
https://m.youtube.com/watch?v=mPmhmvjU3uU

zzyzzx says

How many people are paying more than 30% gross income as their mortgage payment?

4.8% for me. Anything higher, personally than 15% is not doable. As we're witnessing with massive inflation on goods, fuels, etc.

You also mention 30% GROSS income. That's more like 20% after taxes. 3x's income has generally been accurate. $100k, you get a $300k home as the max. Interest rates matter, but if you stick to that, you should be fine owning. 4-5X's income is maxed out even in low interest rate environments.

So my max would be $3,750/mo PITI at 15%. I could go to probably $5-6k/mo but I'd be house poor. Not doing that shit. I like travel. And I don't like being home.

WookieMan says

zzyzzx says

How many people are paying more than 30% gross income as their mortgage payment?

4.8% for me. Anything higher, personally than 15% is not doable. As we're witnessing with massive inflation on goods, fuels, etc.

You also mention 30% GROSS income. That's more like 20% after taxes. 3x's income has generally been accurate. $100k, you get a $300k home as the max. Interest rates matter, but if you stick to that, you should be fine owning. 4-5X's income is maxed out even in low interest rate environments.

So my max would be $3,750/mo PITI at 15%. I could go to probably $5-6k/mo but I'd be house poor. Not doing that shit. I like travel. And I don't like being home.

I don't see what difference it makes though if you're paying the same amount in rent. Sure you can't downsize easily an owner, but unless you're single it's not that easy as a renter either. More important than the ration of income to house/rent payment is the amount of assets you have in case you find yourself without work in a cash crunch. As long as you can pay off your house taking all other assets into account (stocks, 401k) you can use hardship rules and keep paying the mortgage. I think 30%-40% of income is a good limit though, 50% can be done for a while if it's not permanent.

mell says

I think 30%-40% of income is a good limit though

House poor. I get that's probably what most owners here are paying. You sleep in a house, shower, go to work, cook a meal or two and then sleep. Not worth 40% of my income. I can go places and have others cook the meal, give me booze, clean my room, etc with the difference between 4.8% and 30-40%. That's my take.

I admittedly did get lucky on my purchase and the income increase was earned (still too low). At 40% though I'm looking at a $1M house in IL. Where I want to live that would be insane market wise. Large land 15+ acres, maybe a pond or creek, pool, 6k square feet, etc. I don't need that. With kids we're not home. And when we retire and are empty nesters we won't need that much space.

I want to invest in a vacation rental in the Caribbean. Preferably PR or USVI for passport and land ownership with it being a territory. I just can't imagine putting 40% of income towards a single home. I've done it. It was an awful existence.

WookieMan says

House poor. I get that's probably what most owners here are paying. You sleep in a house, shower, go to work, cook a meal or two and then sleep. Not worth 40% of my income.

I agree with your remark.

But here in the Cool And Hip Bay Area, I am mocked and belittled by self-identified "locals" (mostly folks who moved to here from elsewhere) because "I Don't Get It". "It's Different Here".

WookieMan says

mell says

I think 30%-40% of income is a good limit though

House poor. I get that's probably what most owners here are paying. You sleep in a house, shower, go to work, cook a meal or two and then sleep. Not worth 40% of my income. I can go places and have others cook the meal, give me booze, clean my room, etc with the difference between 4.8% and 30-40%. That's my take.

I admittedly did get lucky on my purchase and the income increase was earned (still too low). At 40% though I'm looking at a $1M house in IL. Where I want to live that would be insane market wise. Large land 15+ acres, maybe a pond or creek, pool, 6k square feet, etc. I don't need that. With kids we're not home. And when we retire and are empty nesters we won't need that much space.

I want to invest in a vacation rental in the Caribbean. Preferably PR or USVI for passport and land ownership wit...

Depends on what your income is, if you make $10k-$20k net per month 40% leaves you with 6k-12k,plenty to party/travel with 4-5+ times a year, even after groceries and bills. I consider the primary home important.

mell says

I consider the primary home important.

And that's fine. I believe you've said you have kids though. How often are you actually home? Entertaining? Even just relaxing with the family?

For me with 3 kids it's a trivially stupid little amount of time for the cost when I'm home. As mentioned in the past I like travel. Usually gone 45 days a year. So I piss away almost 2 months of mortgage not using the house. Non-holiday/weekend I'm at the house 2-3 hours, rest is sleeping and showering after ours and the kids activities. Wife is gone 3 months a year. We're just not at our house much. Which I think is good.

And I don't begrudge anyone for wanting a nicer/expensive home in a better climate. I live in IL, so November to March it's a shit show with winter. But I've got Montana, Mexico, Dominican and potentially Germany on the books through March. Might do Miami in October. So you CA guys have an extremely different perspective. Not a bad one, but I'm turning 40 in '23 over the summer. IL born and raised. You have to travel if you're from here or you'll hang yourself.

My sister just checked off HI. So she's done all 50 states. Mexico and Spain international only though. Hawaii and Alaska are my missing states. I'll do Alaska, no interest in HI. But I want to dominate the Caribbean unless what's his nuts here give me a good rate on his condo ("justpassingthrough"?). Mexico, Aruba, Saint Martin, St Thomas, St, John, Curacao, Grand Cayman, Jamaica and Puerto Rico. Pacific side of Mexico I need to explore. Costa Rica was cool and we can get free lodging now, but I'm indifferent. In this hemisphere it's all the Eastern Caribbean islands, Antigua, Barbados, etc. Bermuda out in the Atlantic seems intriguing as well. Relatively easy flights from Chicago. 3-5 hours and you're in a kick ass spot.

B.A.C.A.H. says

WookieMan says

House poor. I get that's probably what most owners here are paying. You sleep in a house, shower, go to work, cook a meal or two and then sleep. Not worth 40% of my income.

I agree with your remark.

But here in the Cool And Hip Bay Area, I am mocked and belittled by self-identified "locals" (mostly folks who moved to here from elsewhere) because "I Don't Get It". "It's Different Here".

Many people now work from home (or from travel/the road), I've been for many years. Makes home much more important and makes you spend the majority of time at home, even though we travel 2-3 months per year easily. We also host quite a bit. If you're young and going to an office and partying eslewhere mostly, it's not that important. Once you hit your 30s or 40s, it becomes center to your life.

WookieMan says

mell says

I consider the primary home important.

And that's fine. I believe you've said you have kids though. How often are you actually home? Entertaining? Even just relaxing with the family?

For me with 3 kids it's a trivially stupid little amount of time for the cost when I'm home. As mentioned in the past I like travel. Usually gone 45 days a year. So I piss away almost 2 months of mortgage not using the house. Non-holiday/weekend I'm at the house 2-3 hours, rest is sleeping and showering after ours and the kids activities. Wife is gone 3 months a year. We're just not at our house much. Which I think is good.

And I don't begrudge anyone for wanting a nicer/expensive home in a better climate. I live in IL, so November to March it's a shit show with winter. But I've got Montana, Mexico, Dominican and potentially Germany on the books through March. Might do Mi...

It's true that if you travel a lot you may want to rethink a big luxury mansion that's mostly empty. Also if kids are older it's not that important as they will be gone more and more. Also it should never be a status symbol. Young single tech hipsters buying million dollar homes in SF never made sense. No reason to own until you start a family or are getting ready to.

ZipperTits says

Eman says

Can you share the link(s) where the bank called the loan due on Blackrock and Zillow?

Can you learn to read first?

Nah…, you keep speculating. Zillow started to liquidate their “flip” real estate portfolio late last year when 30-year fixed mortgage was sub 3%. Real estate prices didn’t collapse late last year for any bank/lender to call the loans due. That’s fine. Keep believing what you want to believe.

Booger says

Saw this a few days ago. If this is not racist, what is? Why only blacks and Hispanics and not other races?

Not sure who is behind this idea and is pushing this through…..again, but underwriting will likely be much more stringent now compared to the last housing crash. Not many will qualify IMO.

Buy back the minority votes with more free shit bullshit. Again, it demonstrates the AI of the Globalists projects (there are so few of them they have to use AI to program their decisions) their utter, toxic contempt and hatred for the population. The old political fishing lures and lies have to be dragged out. Doesn't seem it's quite working like it used to.

Eman says

ZipperTits says

Eman says

Can you share the link(s) where the bank called the loan due on Blackrock and Zillow?

Can you learn to read first?

Nah…, you keep speculating. Zillow started to liquidate their “flip” real estate portfolio late last year when 30-year fixed mortgage was sub 3%. Real estate prices didn’t collapse late last year for any bank/lender to call the loans due. That’s fine. Keep believing what you want to believe.

Maybe it's because they forecast higher rates were on the way?

Eman says

If this is not racist, what is? Why only blacks and Hispanics and not other races?

No DNA required. If you have a pulse and are interested in buying at the top Bank of America wants you!

Based on calling races, BOA is part of the direct political campaign for left. Statistically zero applicants qualify with empty pockets unless crazy Biden and state throwing cash at them under so many programs like housekeys.org etc. The more I look, this country is turning into the h* I left.

https://www.financialexpress.com/investing-abroad/featured-stories/sell-my-house-hits-its-highest-point-in-u-s-internet-history-is-a-housing-market-crash-looming/2653857/

‘Sell my house’ hits its highest point in U.S. Internet history

zzyzzx says

What’s the source?

https://thepricklypear.org/the-most-splendid-housing-bubbles-in-america-august-update-first-price-drops-appear-all-in-the-west/

The Case-Shiller index, which lags reality on the ground by 4-6 months, is starting to pick up the price drops in Seattle, San Francisco, San Diego, Los Angeles, Denver, and Portland.

BayArea says

What’s the source?

Source matters, but it's more about home ownership percentage for this stat. If people that can afford to buy are buying and can afford the mortgage, it's really not a big deal. If you cannot afford a price, you won't get a loan. I don't see 2006 happening. We're not back into the "if you have a pulse here's a loan" mode.

Something is happening, but not with housing in my opinion. It will influence housing, but not as dramatic. I personally cannot speculate what IT is though. No one is working or wants to work and employment numbers are still relatively decent and inflation doesn't happen without lots of money flowing around. It's strange.

https://www.bankingstrategist.com/housing-pricetoincome-ratios

GNL says

Eman says

ZipperTits says

Eman says

Can you share the link(s) where the bank called the loan due on Blackrock and Zillow?

Can you learn to read first?

Nah…, you keep speculating. Zillow started to liquidate their “flip” real estate portfolio late last year when 30-year fixed mortgage was sub 3%. Real estate prices didn’t collapse late last year for any bank/lender to call the loans due. That’s fine. Keep believing what you want to believe.

Maybe it's because they forecast higher rates were on the way?

Not according to my knowledge. J Powell was still pitching “inflation is transitory” late last year. Interest rates didn’t tick up until April of this year. I was in the midst of refinance a couple buildings in January. We locked 3.15% in January, but didn’t close until April. By then, rates were in the 4%ish….

We were also in the midst of flipping this property. Due to the higher interest rate, we feel the offers came in a little lighter than expected. Paid $1.075M. Sold for $1.75M. It should have hit the market in March if it wasn’t due to permit delay.

https://redf.in/H28A6Z

https://www.cnbc.com/2022/09/07/homeowners-lose-wealth-as-rising-interest-rates-weigh-on-home-values.html

Homeowners lose wealth as rising interest rates weigh on home values

Mise fiat equities are gefuckt!

https://www.cnbc.com/2022/09/06/us-bonds-treasury-yields-in-focus-amid-economic-data-auctions.html

The yield on the benchmark 10-year Treasury note hit a daily high of 3.353%, adding roughly 16 basis points before settling around 3.347% for its highest close since mid-June. The yield on the 30-year Treasury bond gained more than 14 basis points to 3.493%, hitting its highest close since 2014.

Check out these price cuts: