House Party like its 2006: Cash-out refinance volume has grown astronomically bringing back the home ATM.
So much for learning from history. Once again Americans are tapping into their inflated home equity as if it were an ATM. Of course we heard from housing cheerleaders that everything is different this time and that people were being very cautious with buying crap shacks. That lasted only a few short years! Now people are leveraging record low rates courtesy of the Fed and are using their homes like ATMs. This massive growth has caused the FHA to pause and try to incorporate some breaks on this behavior. Here in California, people are remodeling and tapping out equity to create that “new†$100,000 bathroom to add the final touch on the crap shack. Without a doubt, what people are doing is setting up a limited economic buffer so when the next correction hits, they will once again face difficult choices. As a reminder, most of the foreclosures that happened in the last housing crisis came at the hands of traditional mortgages, not the No-Doc No-Income market boogie man.Â
Start extracting that juicy inflated money
People are deep in debt. Student loan debt is out of control. Credit card debt is solidly over $1 trillion. Auto debt is over $1 trillion. And taking on a HELOC or a home equity loan is basically like getting a cheaper credit card attached to your property. You still have to pay it back but all you are doing is extracting that inflated home equity and reducing any buffer you have should an economic change of climate take place.
Even the FHA Commissioner has called the rise in cash-out refinances “astronomical†– this chart should highlight why:
“(Housing Wire} Subsequent years saw cash-out volume fall, hitting a low in 2013, HUD said. But now, volume is climbing again, rising 250% from 2013 to 2018.
In its annual Report to Congress issued last fall, the FHA said cash-out refinances represented 64% of all FHA-insured refinance transactions – up nearly 39% from the year before. It attributed the trend to gains in home prices and the decline of other forms of refinance activity.
On a call with reporters upon the report’s release, FHA Commissioner Brian Montgomery noted that cash-out refinance volume was growing “astronomically.† Â
And with lower rates hitting this year, more people are tapping into their home equity. You also have people buying crap shacks with maximum leverage. The market has started turning and this summer was largely a slow one with inventory rising and price reductions becoming more common place.
The fact that the FHA is trying to limit cash-out refinances at least reflects that they are trying to curtail this behavior because they too remember what happened last time. However, people are now in a massively tight position and so many products in our economy are juiced to the gills on debt:
-College costs (student debt)
-Cars (auto debt)
-Consumption (credit cards)
-Housing (mortgages and home equity loans/HELOCs)
Our economy is so leveraged it is beyond belief. The fact that cash-out refinancing is so high should give pause to many. But of course, the housing cheerleaders continue to believe that everyone is buying with massive down payments and have mega reserves to weather an economic contraction. When have we heard this story before?
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432 Responses to “House Party like its 2006: Cash-out refinance volume has grown astronomically bringing back the home ATM.”
Yes, this year is similar to the years 2006 and 2000. Those were not the years in which crashes and recessions started. Next year appears to be a good one for both real estate and stocks. This year’s, super low interest rates are delaying a recession and real estate crash for at least a year. At the moment, there is nothing to fear but fear itself.
This time is different Gary
Gary,
You’ve predicted that stocks would bottom out next year and now you are saying it’s going to be a good year. Lol
No one can predict what’s going to happen.
I predict stocks will go up, down, or sideways…or we will be hit by a giant comet.
Or there’s fearing the following year, when the gains from the next “good” year get wiped out and then some.
The home ATM can be a great thing if used correctly. If you are cashing out equity to buy Escalades or go on vacations, that’s just stupid. Doing a cash out refi to free money up to buy another house is a good thing, especially here in expensive parts of CA.
I know several people who have done this. They accumulated boat loads of equity in a starter home. They do a cash out refi to free up a hefty down payment (200K plus) on a move up home. And still rent out the starter home to cover the new mortgage. Welcome to CA, this is your competition! Or you can live in a cheap apartment in a shady part of town in hopes of a crash.
That is buying houses on leverage. Very bad on a down market. Also the rented starter home will be a millstone when the renters lose their jobs and become deadbeats. If you try to get them out and anger them, they will put holes in your walls.
The boogie man is back!!!!
The problem is not with cash out refinancing. The problem is in the use of the cash.
For example, let’s assume someone has 5 million dollar worth of real estate, some of it income producing. Let’s assume that the total debt is $300,000 and the income is 300,000 per year. The owner does a cash out refinance to lower the interest and invest the additional $200,000 in other RE investments producing 12% return, by paying 3.5% in interest. I don’t see any problem with that – lots of equity and cash flow and very small leverage.
Of course, the author is right if you have someone with 100,000 income refinancing his house worth $800,000 where he already owes 500,000. The additional $100,000 is to be used for traveling or expensive cars (depreciation instead of investment). Not much equity, one source of cash flow which can disappear in a recession and the cash out used for spending not investment.
Most of the cash out falls in the second category and that is the sad part.
Damn it, I was hoping the market reverses course and goes up due to lower rates!! Isn’t that the trick? You just keep lowering rates to inflate the housing market? Why isn’t it working anymore?!?! I need house prices to go up so I can use my house as an ATM.
https://www.cnbc.com/amp/2019/08/29/july-pending-home-sales-reverse-course-falling-2point5percent-despite-low-rates.html
I wonder how many people are out there like me who are waiting for the housing market to crash so they can buy a house. Living in SoCal there is just no way we can afford to own, even making twice the average income in our city. Maybe all the people like me moved to Vegas and Austin.
Don’t forget Idaho???
Don’t forget Winona.
Kingsman, Barstow, San Bernadino.
Don’t forget Idaho??? Almost any place beside CA
???
We are like you, Becca. Been here four years, make a very healthy income and rent. It’s so frustrating. We are saving money but can’t and won’t pay these prices for a home with the risk of significant downside if/when the market corrects. I am hoping we move somewhere realistic in the next couple of years because I am sick and tired of California. You guys can have it. I’d rather live in a midwest city with cold winters and a nice house to call my own than live here and make my landlord richer by the year. Our last kid has three years before graduating high school though so for now we trudge along.
Same. Not paying for these ridiculous prices. I’d pay 30-40% less compared to today’s prices. Why make someone else rich by buying his/her house? They cash out with a 200k profit and move to another state while you are holding the bags for the next 30years? I’d rather shoot myself.
Same here. I made $400k last year but by the standards of the current CA real estate market I’m lower middle class and stretching to afford a fixer (unless I move to the middle of nowhere), which is absurd. So we rent and lately watch places around us not move and get pulled from the market, price cuts, get lots of spam and flyers from agents, etc. We are watching and waiting to see if we’ll be able to make a move here or finally just give up and exit the state in another year or two.
The large number of renters who are “waiting” for prices to drop 5% or 10% or 20% or X% before they buy, almost ensures that prices won’t end up dropping very much. There’s a built-in level of would-be-buyers essentially creating a price floor.
JiAtLaw,
Dude that is pure BS. With a $400K income you could afford a $1M house without thinking twice. Median home prices in SoCal is $600K. Come on, enough of this nonsense. If you don’t want to buy, don’t buy. But calling yourself some sort of victim is insane makes you sound insane.
I was going to call the same BS on Jim. A 400K income means your take home gross is 33K per month. You mean to tell me you won’t feel comfortable spending 4 or 5K per month on housing? First world problems amigo…
A cat once burned will never jump on a hot stove again… nor will it jump on a cold one!
My advice, don’t refinance unless one is reducing their rate or their term.
But of course as the good “Doc” eloquently details it’s a rat race, on D.E.P. ( debt enhancing products) over the cliff edge. Maybe the reasons we see the posts waning is because it’s a cyclical and history does in fact rhyme.
Good blue print increase debt by printing money, trigger asset deflation, assume ownership of assets at pennies on the dollar. Er EH rinse repeat.
I know we have it good comparatively and I don’t want to sound like some of the well documented trolls here. Why can’t we figure out how to preserve our wealth and our ecosystem.
Good to hear from ya “Doc” thank you for your insights.
Prices really haven’t started to drop yet in the south Bay Area or Santa Cruz County. Any idea when this will happen? Will the dropping interest rates make prices start rising again?
I purchased the cheapest house in south orange county 2 years ago JUST IN CASE the prices never go down. If they keep going up fine. If they stagnate for 10 years, fine. If they go down also fine. I got some left over room in my budget and I’ll get another one if they really ever go significantly down.
I purchased because I calculated how much I spent in the last 5 years on rent and wow. I spent like 50k on rent during that time and only because I rented a room at some point and a very cheap 1 bedroom. If I continued renting I would spend another 50 in just 2 years. And its not even a house. If I waited Id be down 100k by now and the prices are still the same or worse so I’d have to wait another 2 and be down 200k to save 200k on the purchase price? LOL
Id say people who are not sure at least get like the cheapest condo you can afford to hedge the bet. and calculate how much you spent on rent while waiting for a good price
A lot of people do the math wrong. They just see rent vs mortgage and appreciation but there’s more to it. Numbers vary but the costs of owning that you don’t recapture are:
– Purchase costs (closing, title, etc)
– Repairs & Maintenance
– HOA if applicable
– Insurance
– Interest on the mortgage
– Sale costs (realtor fees, title, etc)
– Time spent dealing with the transaction, repairs/maintenance, insurance, and HOA
– Lost income from the downpayment that could have been invested elsewhere
Hopefully the appreciation minus all of the above is still higher than total rent paid and it all works out in the end!
Youre right. They shouldnt look at it in terms of rent vs mortgage payment. They should look at it as rent vs monthly interest only. Interest is the part of payment you will never get back just like rent. The rest of the mortgage payment are basically your savings so it would be unfair to include.
Math Nerd,
You are right on all of the above, however you forgot the MeloRoos which can be substantial in some parts in SoCal (sometimes more than $1,000/mo). Not all properties have those, but many do.
Buyers should be aware of those. They are kind of capital improvement taxes which in most of the country are captured in the price of the house. Buyers should always compare apples with apples and oranges with oranges. I built a house 20 years ago in King County, WA. Capital improvement taxes were required at the time of permit issue and they were $30,000 in dollars from 20 yrs ago. Some municipalities in SoCal allow these taxes to be passed on to the buyers via MelloRoos and they pay them for a long time; they are not capitalized at the time of construction. This way they help the developers with a better cash flow and a more attractive price on their homes. The buyers step into a trap.
Here is the best buy VS rent calculator I have seen.
https://michaelbluejay.com/house/rentvsbuy.html#mdt
Of course, I do not think this is a good time to buy a home unless there are some extenuating personal reasons to do so. But I guess you could say that 2011-2015 were good for anyone to purchase.
QE Abyss,
That is an an excellent rent vs buy calculator. I would recommend using that one or create your own in a spreadsheet.
Always buy at or below rental parity. Many areas in CA are already at rental parity or below. I would forget the premium coastal areas, completely unrealistic… but the very nice areas 5-12 miles from the ocean in Orange County are either right at rental parity or about 10-15% above.
Don’t make the mistake Millennial is going to make.. waiting it out and letting it pass him by. Once you get rental parity… jump on it and never look back.
I was laughing so hard at this! Thank you polish guy.
One of those morons who has never seen a rental parity calc and doesn’t know what opportunity costs are.
He probably thinks that his mortgage is paying himself. Wait until he sees how much interest he pays to the banks….the interest alone is much higher than the rent.
It’s because of silly people like this that we have boom and bust times. Dummies always buy at the top because they think “if I don’t buy now I will be priced out foreverâ€.
Some folks never learn. Will make those of us rich who wait on the sidelines until we get a nice crash.
The first 4-5 years of a mortgage is almost entirely interest, so your logic doesn’t add up. And if prices go down (which they will), now you’re upside down. Not a good place to be.
I just refinanced into a 15 year so it doesnt really apply to me anymore but even if the payment was mostly interest what does it change exactly? I was paying more in rent than the interest portion of my mortgage day 1. I was throwing away my money regardless. If prices go down by 50% tomorrow ill be very happy. Ill get a place in laguna beach and rent my existing crapshack.
Somebody failed basic math here. With today’s super low rates, the amount of principal paid up front is significant.
On a 30 yr loan, the first payment is about 1/3 principal.
On a 15 yr loan, the first payment is about 2/3 principal.
When rates were double digit, what you are saying was true. Most Americans can’t save a dime, paying off big chunks of principal is nothing more than forced savings. As long as rates are low, everybody here can forget about the big tank. I’m sure Jim “Tank Hard” Taylor is currently enjoying his recent purchase.
The only way I call it. I am not a facebook guy but i hear things. Some of these people crying about the cost of living are at some of the best steakhouses every week. And i do realize there is other expenses but I hate the freakout of people why the can’t afford. Now that interest rates have dropped why not put a little bucks in to the principal and make your payment a little lower?
My heart goes out to people who had a downpayment sitting in the bank for years, but decided to wait for a housing price crash by renting.
Couldn’t agree more! Saving, waiting and not buying has been the best thing for me. My net worth increased over the last few years tremendously thanks to not buying high and smart investments. I could not imagine how it must feel to tie your hard earned money to an overinflated house just to see it crash again? I would feel sry for these buyers who bought at the top but that wouldn’t be honest. Without losers in the market you can’t win. I am waiting for foreclosures to ramp up and buy in when the market is down again. Some experts (like me) believe the market will see a 50-70% discount in house prices. That seems very conservative and realistic. Wait and see 🙂 whatever you do, don’t catch the falling knife. Buying RE at the top is the biggest financial mistake one can make. It’s similar to gambling and putting it all on red every turn. It’s just a matter of time until you lose it all.
I mostly agree with you Millennial. Just one thing, the BIGGEST financial mistake you’ll EVER make is marrying the wrong person, compounded only by having children with said spousal error. In the later the mistake will cost you the rest of your life, weddings, birthdays of grandchildren and the constant sniping smearing you’ll receive. ALL with your poor offspring caught in the middle. ALL of this during and after handing over half your assets and likely a continuing stream of income in the form of child support, education and in the very worst case scenario, “spousal support” after the fact. THAT is way worse than buying high in the housing market which will seem like a cake walk after the fact you marry the wrong person. I’m a woman and I’ve always made very good money, in my business I’ve seen this repeatedly and it always makes me shutter!
Homes are selling quickly again. You lost.
Lisa, Millennial has often posted about the importance of choosing a spouse wisely.
Are you sure YOU aren’t Millennial? Because you sound just like him.
Lisa, you are correct 100%. I can’t imagine if I had a wife who would want me to buy an overpriced crapshack at the worst time in history.
Thank god! I married a wife who understands that buying real estate in California is all about timing! That’s key….. if you married a shitty partner you will regret that for the rest of your life. Take your time and dont rush into marriage. I would do exactly what I did in the past. I drove a beater car and dated her. She obviously wasn’t looking for a guy who brags with an expensive car. I could have easily bought or leased a BMW or Mercedes but didn’t. I like to save money, invest and wait patiently for buying opportunities. I needed to make sure my wife is on the same page before getting serious. No idea how I got so smart. 🙂
Lisa sounds just like some guy crying at the bar.
Almost sounds like a replay. Same old song and dance…
Oh wait thats just the 70s echoing through Aerosmith. This time it different.
The game has changed and there is no sky and there is no limit to where home prices will rise.
Watching in Amazement for over a decade Doc. Keep up the good work.
Homes over one million will correct 18% lower, except coastal areas which will stay flat for many years. Homes under a million will drop 25% then stay flat for 5 years.
There will be no crash. Just an 18-35% drop across the board.
Jed, you may be correct. At least in Orange Co., it is hard to imagine a crash greater than 25%. That sounds like a lot, but since it costs more to rent than to own here, there is little to gain by waiting. Also, part of that decline has already occurred. Price are probably already down 5% from the 2017 top. There is probably only another 20% to go.
If the Chinese decide that they no longer want California real estate or suddenly need to liquidate their holdings because of the political climate in China and/or the US, OC real estate is going to drop a lot more than 25%.
California insurance companies are increasingly wary of insuring home against fire, making it harder to obtain mortgages:
https://www.cbsnews.com/news/wildfires-california-homeowners-insurance-hard-to-find-due-to-magnitude-of-massive-wildfires/
An estimated 350,000 California home and business owners are unable to get property and casualty insurance after last year’s devastating wildfires.
As the threat of mega-fires grows across the state, California’s insurance commissioner predicts the situation will get worse.
Consumers say insurers are “holding us hostage,” noting that people can’t get a mortgage without home insurance.
Seems like people never learn! It doesn’t matter if there aren’t enough housing units in California! If you can’t afford to buy or rent, you can’t afford it! The real question for those hanging their dreams on sky-high real estate is, when the music strops, who’s going to buy your home for those ridiculous prices?
Haven’t you heard? There are millions of Chinese millionaires touring your neighborhoods ready to buy the million dollar crap shack! Oh wait, that was another RE cheerleader lie that failed miserably. Nevermind.
https://www.delreyurban.com/property-blog/foreign-investments-in-u-s-housing-market-plummets/
So who else wants to buy the top of the bubble? Millennials!!!!!
THIS is the year when millennials will go out and buy in droves!! For real this time!
Nope, we heard that lie for the last 5 years and it looks like student debt and low wages are still a thing? Or maybe millennials are smarter than previous generations and don’t believe the RE cheerleader lie that if you don’t buy now you will be priced out forever?
Who else is left that wants to buy the 2007 (eh 2019) house at overinflated values just to see it crash during the next downturn?
Well said, one more thing to add to that list is the fact that Millennials do not blindly trust our government, banksters, etc. like the majority of the baby boomer generation does. Baby Boomers blindly trust with the thought process of, they woulddnt do that, why not? cause they arent supposed to…….ahh ok gotya! lol. I think there will be some change across the world once the baby boomer generation dies off and all the people left living are smart enough to realize that uncle sam is fucking us all up the ass with a red white and blue dildo that shoots stars! High student loan debt, shitty low wage jobs, insanely high rent and home prices. The whole thing is a crap shoot. Remember to obey and blindly trust the government like a good little sheep.
The economy is only going to go up up and up, so the cycle that you all are expecting to happen won’t happen any time soon under natural causes. HOWEVER, the china shoe about to drop will make a huge dent in the market. When THAT will happen who knows
I am hoping for a black swan or some dramatic event. I want nothing more than this f-ing economy to be destroyed. I am going to throw a big party when we get an economic collapse. Can’t wait to buy my first house. Until then I will live with my parents. Hahahah not paying some f-ing landlord. Crash baby crash!!!!
Hoping, let me guess, you’re a democrat. What do you think happens to people when an economy is “destroyed”? And when this does happen, you’re not going to be caught up in it?
This is the official Democrat Party line. SAD
H –
A Black Swan is something generally thought to be impossible that suddenly becomes reality. Unless you are plugged in to the Divine will, you’ll never know when a Black Swan event will happen. Depending on a Black Swan is an oxymoron. Earthquakes and hurricanes aren’t Black Swans because we all know they will happen eventually.
If you can’t find success in the best economic climate in a half century (now), then your chances are pretty slim if the economy goes to hell. I doubt anyone you know will feel much like partying then, and you’ll have bigger things to worry about than getting some discounted real estate. You sound like the Joker from Dark Knight: some men just want to watch the world burn.
These cash out refinances will probably end in foreclosure, which means they could end up in the hands of private equity firms meaning one less owned by private individuals and drives up the price of housing.
Hoping all I have to say for your comment is stupid beyond belief .As far as low interest rates bailing out housing don~t see it N SLO county I have watched that market for over a year 90% of the houses sold have been under list anywhere from 2-5% not a major move but an initial corrective move the stock market anyones guess but the volatility is so high that any move higher will likely be short lived and corrected.
Reading a lot of fantasy land here it will be different this time, no afraid not ,the correction will come and likely more severe than 2009-2011 not doom and gloom just reality we have spent too many years developing financial weapons of mass destruction and a fed that is working in conjunction with other central banks to keep interest rates low and negative throughout Europe not a good scenario .While this manipulation of paper assets go on, infrastructure improvements are ignored and the main street economy is not good for the majority. 50% min. drop leveraging at this time is insane!
I cashed out my primary home last year and used the money to buy a rental with the cash. The interest on a rental property is about 1.5% higher than on a primary home. And I was also in a better position to buy, since with my cash offers, I was able to buy at a discount, with sellers willing to take less with the guaranteed closing vs going with a mortgage buyer. I know someone who did a cash refi as well and used the money to pay off some business loans on which he was paying a really high interest rate.
Right now every bank in the universe if offering you money at 3.5% on a mortgage. If you have any debts with interest higher than 4% (to take into account closing costs on the refi) , you’d have to be an idiot not to take that offer.
Sry to hear you bought investment property last year. Bad timing….. and timing is everything in the real estate market – as they say.
During the upcoming downturn and when we have real buying opportunity, buying a rental isn’t a bad idea. I am planning on doing that. I got zero debt but lots of cash.
Millie my good friend,
I’ve been buying rentals for close to a decade. And I will continue to buy for the next decade. Think of it like dollar cost averaging for stocks. Over the long run, you buy high, you buy low, but in the end they all end up being profitable. It’s impossible to time tops or bottoms, only fools try.
Also remember Millie, with rentals you don’t buy for appreciation, you buy for cash flow. Appreciation is a nice bonus if it happens, but should never be part of the calculation.
I assume that’s in Spokane-istan? You want to show us a rental parity calc for your rental you purchased in 2017? You know why RE cheerleaders in California NEVER show a rental parity calc for rentals in Cali? Cause it would be a good laugh for all those that have a brain and understand basic math.
I love dollar cost avg. in stocks and crypto! never heard that for rentals 🙂
Maybe because buying REAL ESTATE at the top is never a good idea. No matter how hard you RE shills try. If buying RE at the top would make sense we wouldn’t need an army of RE shills to convince us to buy now 🙂
Have you ever heard of a stock bubble blog where stock shills try to tell you dollar cost avg is a good idea? Nope, cause it’s not needed. We all know it makes sense to dollar cost avg into stocks. For REAL estate, those that bought high are trying hard to convince others to share the pain. And of course the realtards, lenders and those who want to cash out at the top.
Mr. Landlord,
If you bought RE in WA state, what are you doing about the new law where you are forced to accept Section 8 from people with an income less than the rent?
It looks like the socialists in WA, OR and CA are worse than the communists. They act like they own your place in order to buy votes from the millions coming illegally from Central and S. America. This is worse than nationalization. At least under nationalization they have to maintain the property, pay property taxes and insurance.
Flyover,
All my properties are in Idaho. I live in Washington (no state income tax) but all my investments are in Idaho where (for the time being anyway) the laws are very much in favor of landlords over renters. But sadly, progressivism is a cancer that spreads and eventually even Idaho will impose idiotic laws like that. When that happens, I’m out of the landlording business.
Flyover, landlords are now sadly not permitted to categorically discriminate against Section 8 voucher tenants in ANY state- it’s an HUD rule written into law. Your best defense against Section 8 is to screen, screen, screen, so if you do get stuck with a Section 8 tenant, it will be some nice, quiet elderly person or disabled person.
With regards to Section 8 I would be careful to make sure the primary tenant does not have a chain of family trash kids or others that try to stay as permanent residents as they are usually the downfall for renting to Section 8 recipients.
Homerun, that is why the landlord must screen rigorously. Screen, and set conditions. For one thing, you must limit the number of people who can occupy the place, and prohibit short term occupancy or subletting in any way, such as Airbnb.
Of course, it goes without saying that it’s much easier to enforce conditions when you have nice places in nice areas, where you have many prospective tenants who are waiting to take over when you have to evict someone. But nothing beats screening out trouble to beginning with, and it’s a lot easier to be selective about your tenants when you are offering a pristine place for a bargain rent relative to the area, than it is when your place is substandard and overpriced. I remember looking at places in super-prime neighborhoods here in Chicago where the landlord clearly thought that just because the place was in Lincoln Park, that he was justified in charging nosebleed rent for a place that was borderline unfit for human habitation. That is asking for a bad tenant. If the only people looking to rent your place are people with vouchers, you need to ask yourself what you’re doing wrong.
Laura, New York City rent control laws give tenants the right to sublet. A landlord cannot prohibit subletting.
As we become a nation of renters, expect ever more onerous rent control laws.
I believe that RE prices are going to go down in Communists states due to mismanagement and increase in value in conservative states where the property owner rights are still respected.
The communists in power in socialist states like CA, OR, IL, NY and WA will act like they own all the real estate – for landlords forcing them what to charge and do with their private property and for homeowners to use them as sitting ducks for confiscatory property taxes which will be raised a lot to cover their own pensions and those of union bosses who give them the votes and money for political campaigns.
Because of this, in the coming years you will witness massive reallocation of capital from blue states to red states. It is already happening in the case of NY, Chicago, SF, etc. and it is just going to go from bad to worse. The red states where you see more respect for property will stand as beneficiaries of this capital flight. I know lots of people with serious money flying away from the insanity in communist states (blue) and relocating their capital and investment in red states.
In the last 3 years ID had the fastest increase in RE prices in the nation, faster than any communist state. This is not just my opinion. Numbers don’t lie.
I want it too crash so I can buy for good price.
Beautiful news. Music to my ears
https://www.ocregister.com/2019/08/31/more-proof-that-southern-california-home-price-gains-are-evaporating/
Evaporating price gains. Love it
EPIC !!!
Absolutely EPIC Millennial !! No price declines… but slower increases !!!
BRUTAL !!
“Los Angeles County saw the smallest increase since 2012’s fourth quarter, a 3.8% year-over-year gain vs. a 5.8% increase the previous quarter and an 8.4% rise a year earlier. Gains ran an average of 7.4% in the past five years.
In Orange County, it was the smallest increase since 2012’s third quarter, a 2.6% year-over-year gain vs. a 4% increase the previous quarter and a 6.5% rise a year earlier. Gains have averaged 5.7% in the past five years.
For the Inland Empire, it was the smallest increase since 2012’s fourth quarter, a 4.2% year-over-year gain vs. a 5.6% increase the previous quarter and an 8.1% rise a year earlier. Gains have averaged 7.5% in the past five years.”
Exactly! Epic! My words!
During the “strong economyâ€, the real estate market shows signs of weakness like a cancer patient.
Higher inventory
Price reductions left and right
Open house after open house
No more bidding wars
Longer market time
Historic low pending sales
Asian money stopped flowing into the RE market
Remind you, this is while we have historic low unemployment 🙂
This will be an epic crash 🙂 I feel sorry for those who bought recently. Smart people will buy when it crashed. You will be able to buy RE 50-70% below today’s prices.
Millennial,
How much you want to bet there are year over year price increases again from 2019 to 2020?
So EPIC, absolutely EPIC crash man !!!
Tank in sight, why in such a hurry.
Sometimes I think you perma bulls stress too much.
Right now is the time to save and invest – make money in good times and buy real estate during crashes. This has been working for decades. Every ten years on average we get a massive real estate crash. It’s called business cycle, or boom and bust cycle.
I don’t understand why you fight reality so much? The only explanation I have is that you are overleveraged in real estate or an agent who needs commission checks.
Millennial,
Sweet deflection, at least you admit I’m right.
Bottom line we have year over year increases and it looks like another year over year increase for 2020. Glad we got that settled, since you have fantasy land all over this blog.
Permabull? Far from it, I have timed the market several times before, I am the one giving you the dose of reality.
There will be a 15-25% drop in the prime areas you want to live in at some point. Give the current state maybe that is 2024 or 2025. How much will the market have gone up since you started posting about a 60-70% drop three years ago? What a great question.
The problem is you are going to miss the boat. You are going to be here clamoring every day about your 50-70% drop when we are far below rental parity in 2024 or 2025.
Welcome to your reality. I have seen it all before here. You will not be the first and you will certainly not be the only one who misses the boat hanging on to fantasy.
Bawahahahahahahahahahahah
Tank in sight, you are the new clown here. Tells us timing the market doesn’t work, so buy now. But tells us now that he timed the market perfectly. Lol. Sure buddy! We all believe you!
If you would be familiar with California RE boom And bust cycles you would know 50% haircuts in prices are common. Not even a conservative estimate. Just look at the sales history of some houses… anyone with a half brain can do it.
The truth is, you were telling everyone how there is no inventory. Prices can only go higher. How come you never mention we already see price cuts left and right? That was just 1-1.5 years ago when you told us the no-inventory-lie! What happened? I haven’t heard you say this in a looooong time now.
Now your pitch is, the next drop will only 15-25% in 5 years. As if you would know!
As always I will do the opposite of what RE cheerleaders tell me. That has proven to be the best strategy:
Save in good times, let the RE shills tell us their BS and get the deals once we see the crash. Couldn’t be simpler. Until then, I enjoy renting for 1400 freakin bucks ROFL.
Btw, my wife and I work and make good money, (I have a six figure tech job) debt free and over 800 credit score. I could easily buy now in a desirable area. But why waste your money if you can wait and buy half off? None of the RE shills has ever answered that question 🙂
Tankinsifht,
15-25% drop in 2025? How are you projecting what happens in 2025?
That would mean 15ish year bull market. I don’t think you have gotten the memo yet.
Why not make this 2040?
People have bad memory. Remember when people were saying it’s a great time to buy in 2007?
Great data from a great, well known website
https://www.zerohedge.com/personal-finance/fitch-confirms-lower-interest-rates-have-yet-spark-home-buyer-demand
Home buying has slowed down significantly- not even lower rates could help to sucker in the last buyers before the massive crash.
My thoughts go out to the RE cheerleaders who have over leveraged themselves by buying overpriced crapshacks at the top. Only a miracle can save them now.
That is the same website that predicted recession every year since 2012. They will get it right eventually but you missed out on alot of big gain
What???? Lost on gains?! I made an absolut killing the last few years. To start, by renting a cheap apartment I have several thousand per month to save and invest. The stock market made me a ton of money. Not to mention the crypto bubble in 2017.
Talk to anyone who has experience in the real estate market and they will tell you timing is everything. The RE moves like a cruise ship, once it sets course it follows that direction for years. You gotta love those people who think it’s always a good time to buy RE. Some people learn the hard way….
“Dr Doom” Nouriel Roubini is predicting that the next economic crisis will be a supply side one, unlike the demand side crash of 2008. China trade wars or a Persian Gulf oil cutoff will change the supply of goods, not the demand fo goods that the 2008 massive crash caused. This might cause stagflation as in the 70s instead of deflation. So stagflation causes what in the housing market?
http://marketwatch.com/story/the-fed-cant-rescue-us-from-the-coming-supply-shock-recession-2019-08-22?mod=hp_minor_pos21
https://www.quora.com/What-are-the-best-asset-classes-to-be-invested-in-during-stagflation
Mr landlord I would have to agree ” you`d have to be an idiot” short term thinking and leveraging at the top of the market your choice too much of group think, things are different this time, which is probably true it will be much worse than ever over the next 2-5yrs
R E C E S S I O N
Historic data shows that purchasing real estate right before a recession destroys wealth.
Well prices are not dropping in Sacramento, California. I want a place close to downtown for easy commute and more room. But no way am I paying 800k for a crapshack in Land Park, downtown, midtown or East Sacramento. I also am not commuting 3 hours each way to afford a real home. It is a bubble.
Sacguy, if don’t want to pay $800K for a crap shack in East Sac but you want to be close to downtown, you can always buy a house in South Sac where housing prices start at $150k. Of course you’ll need to have bars on the windows, security doors, a guard dog, and carry a concealed weapon. You’ll experience all the joys of living in a diverse neighborhood!
The big interest rate fall sure brought the anger out here. Dead ahead is more housing appreciation. I understand you find that distressing.
Just keep repeating the Recession word if that makes you feel better. Or, if you want, if it makes you feel better, go ahead and post that prices will fall 50% or 70%. If the freefall in interest rates are too stressful, you can always predict prices will fall 100% on this blog. Just imagine if someone gives you money to take their house for free. Now, that should make renters feel better. Whatever you need to do.
Exactly right jt. The panic is palpable amongst the permabears.
Poor JT, the market is changing fast and all he can do is deny and make up stories. Hint: just because you live in a fantasy world and tell yourself the RE market will keep going up doesn’t mean it will. Denial usually ends in tears. The sooner you accept reality the sooner you can allow yourself to adjust and prepare for the crash.
The lower interest rates haven’t helped at all. We see longer market times and price reductions left and right. As we know, this wasn’t supposed to happen during a strong economy. Experts call it market cycles. It’s normal.
Older millennials are driving home prices higher again
https://www.cnbc.com/2019/09/03/older-millennials-are-driving-home-prices-higher-again.html
““A growing number of millennials are expressing an interest in buying homes, reinforcing the theory that this cohort is continuing to engage within the housing market,†said Frank Martell, president and CEO of CoreLogic. “But, with so few homes available for sale, the imbalance has created an affordability crisis that is getting worse every day. Demand exceeds supply and we’re unsure of when the two will balance out.â€â€
Rofl!! In other words…. millennials ain’t buying!! Nice try
The last few years we heard the Asians are buying. That myth has been debunked and now RE shills are trying again with millennials! Keep trying 🙂 when do people realize there aren’t enough suckers out there to buy your overpriced crapshack?
““A growing number of millennials are expressing an interest in buying homes, reinforcing the theory that this cohort is continuing to engage within the housing market,†said Frank Martell, president and CEO of CoreLogic. “But, with so few homes available for sale, the imbalance has created an affordability crisis that is getting worse every day. Demand exceeds supply and we’re unsure of when the two will balance out.â€â€
Rofl!! In other words…. BROKE millennials ain’t buying!! That is right. Millennials who don’t have any money because they screwed up in life aren’t buying. The ones that screwed up need a 70% price crash because that is the only way they can afford to buy.
Milli: millennials ain’t buying!! Nice try
Most of the people I see at Open Houses are millennial couples with young children or babies or a pregnant wife. And the houses are sold, eventually. Someone’s buying.
Do you bring your wife to Open Houses? Wonder how she feels, seeing her peers buying nice homes and starting families. While she lives in a sketchy area, sneaking into the neighbor’s pool, listening to her husband talk about an elusive crash for years on end.
It’s hilarious…..now our poor RE shills are back to “this will be the year when millennials buy in drovesâ€. Haven’t made a sale in a while and hope a buyer will show up eventually at your open house?
It used to be: “Asian millionaires are touring your neighborhoods ready to buyâ€
That changed rather quickly. Now RE cheerleaders are putting their hope in millennials.
The reality is that buyers sentiment has shifted. Millennials are not that silly as their previous generations. They learned from their mistakes. Last time we had 7 Mio foreclosures because silly people believed the lie “Buy now or be priced out foreverâ€
Millennials don’t buy at the top no matter how hard RE shills want them to.
Obviously, there are exceptions. You need a few dummies who buy the top and foreclose later. One of the biggest mistakes one can make is marrying the wrong partner. Son of landlord knows this. He was out of luck and is single now.
Luckily, my wife understands that buying at the top is financial suicide. Therefore, we make a killing and save tons of money by not buying high. Once the market corrects (usually 50-70% in California) you will have rental parity. Then it will makes sense to buy a house. By that time i can buy in all cash or simple buy investment properties and a nice house.
That’s how winning looks like 🙂
Losing looks like this: you buy at the top, have buyers remorse and try to convince people on a housing bubble blog that buying at the top is somehow not that bad. Rofl
Looks like JT and “Mr Landlord” didn’t save their commission checks during the bubble years…LOL
Don’t worry, housing Bubble 3.0 will come in 2034….just hold OK
What happens if some experts are right and we are in a stagnation period for many years. Nothing goes up or down more than 10%? I always see some homes priced way out of range and they get some massive drops and people start screaming “crash”. Here in the inland empire, many homes have not reached 2006 levels yet but some have, given the area.
I think rates are going to determine if and when a crash occurs. What happens if the fed lower rates to let’s say 2.75% on a 30 and 2.0% on a 15? This would be historic lows and would prevent a crash for the time being.
For those that are wait- what happens if a crash doesn’t happen for another 5 years and then it’s about 25-30% (realistic) drop? I also do not think many here have actually owned a home and can factor in the benefit that does add up on paper?
-the home is yours to fix or change
-you have your own garage of 3-4 car garage (vs apartment)
-not having to worry about being kicked out cause rent is going up or landlord is selling
*I am not saying by at these prices I am just throwing some thoughts out there as your purchase price matters with how much it will go up or down in a recession. A 200k home is not going to lose 50% of its value but a 1.5 million dollar home can (maybe)
Experts are expecting a recession and housing bust. It makes sense after artificial low interest rates. Every bubble ends at some point. We are overdue for a nice recession.
Poor millie believes “experts”. LOL No wonder he lives with his mom.
Could not agree more. I believe in experts and data. I def don’t believe in cheap sales pitches by RE shills. They have proven to be wrong for a decade now.
I myself am a RE expert.
Unfortunately, I don’t live with my mom. That’d be great! I can only encourage any adult living in California to live with their parents, save big and buy when we get a nice crash in real estate prices.
Jordan, I believe the Fed can delay a crash for years by dropping interest rates lower and lower. However, I don’t know what the Fed will do.
In any case, if home prices start falling both low and high priced homes will drop equally in value. The reason: Once homes become cheaper, people will stop buying the small, junky ones and start buying the nicer ones which they will then be able to afford. There will then be no buyers $200,000 ones and,therefore, their prices will also decline rapidly.
Many people have misconceptions about the interest rate the Fed sets. The Fed only sets the FFR (Federal Funds Rate) which is basically the overnight rate for banks. Bills (<52w in duration), notes, and bonds are all set by the open market either at auction time on issue or cash and futures markets for existing issues. The exception to this was QE where the Fed basically printed money to purchase bonds directly in the open markets (driving down yields).
I could see us buying when the market dumps 30%. Until then, we are going to live rent-free @hotel mommy for a few more years. We are not going to rent and for sure stay the hell away from buying. Don’t waste your money people – prices are still way too high!
We are looking forward to a recession. We want our kids to move out and buy real estate but at the moment prices are just ridiculously overinflated. A decent house at 700k today should be 350k in reality. Until we see realistic prices again I am happy to have my adult kids at home. It seemed much easier to buy a house 30 years ago. We have to make the best out of this crisis and hopefully it ends soon with a meaningful recession.
Hello Auntie
Dont hold your breath for a 50% haircut – unless the following.
prices begin to retrograde in 2020 then it will take 3 – 5 years for the bottom to hit. And for a 50% haircut your children need to be looking at dumpy regions like Fontucky or other places in the Inland Empire. And don’t forget, ‘inland empire’ is not a location, it is a miserable state of mind.
I see a common theme here, all the bears want a bad recession so they can buy after the big crash. News to bears, the vast majority of people are too scared to buy a home during a really nasty recession. They may not have a job or are holding on for dear life. Just like last time: the people with cash, connections and large down payments get the houses. And you need all cash to get the really sweet deals.
Lord B. I agree with you on that one. I takes nerves of steel to buy when is “blood on the streets”. Usually, under those conditions, buying a house is the last thing on people’s minds. Every day you hear that the dow dropped another 1,000 points, more millions lost jobs, foreclosures grow exponentially, and all people are afraid of catching the falling knife.
In 2010, I had lots of cash in the bank and I still had to go through a good tug of war between my emotions and logical part of the brain deciding if I should buy RE or not (as investment). I was twisting in bed at night. I am glad that my analytical part of the brain won, but from experience I can tell it is not easy.
This, coming from me – all my family, friends and relatives think I have nerves of steel. The reality is that most people, statistically speaking, can not do what I did financially or emotionally.
Blankmind, you must be new to the real estate cycles. I know dozens of people who bought sweet deals during 2009-2013. You are either clueless or full of bs.
Noooooo Aunt Sara! SocalJim and Mr Landlord Benz payments aint gonna pay for themselves!!!! The REIC will die if no one buy or rent!!!! Please show them some compassion
About Nouriel Roubini from Wikipedia:
In September 2006, he foresaw the end of the real estate bubble: “When supply increases, prices fall: that’s been the trend for 110 years, since 1890. But since 1997, real home prices have increased by about 90 percent. There is no economic fundamental—real income, migration, interest rates, demographics—that can explain this. It means there was a speculative bubble. And now that bubble is bursting.”
Now this economist who worked closely with the Clinton and Obama administrations is predicting a repeat of the economic downturn of the ’70s with rising inflation and economic stagnation. No one has yet commented on my previous post about Dr Roubini’s recent article. This type of recession will lead to rising prices of real assets like precious metals and real estate just like in the Carter years (I bought my first house in the last months of the Carter administration).
I’m not convinced about a return of stagflation, and a Japan-like permanent regime of deflation and low interest rates seems possible to me. But people should think about this and not assume
About Nouriel Roubini from Wikipedia:
In September 2006, he foresaw the end of the real estate bubble: “When supply increases, prices fall: that’s been the trend for 110 years, since 1890. But since 1997, real home prices have increased by about 90 percent. There is no economic fundamental—real income, migration, interest rates, demographics—that can explain this. It means there was a speculative bubble. And now that bubble is bursting.”
Now this economist who worked closely with the Clinton and Obama administrations is predicting a repeat of the economic downturn of the ’70s with rising inflation and economic stagnation. No one has yet commented on my previous post about Dr Roubini’s recent article. This type of recession will lead to rising prices of real assets like precious metals and real estate just like in the Carter years (I bought my first house in the last months of the Carter administration).
I’m not convinced about a return of stagflation, and a Japan-like permanent regime of deflation and low interest rates seems possible to me. But people should think about this and not assume like in 2006 that Roubini has gone off the deep end.
A period of stagflation is certainly in the cards at some point in the 100 year interest rate cycle.
The hard part is predicting when, it could start in 3, 5, 10 or even 20 years. It’s easy to right about it, but hard to predict exactly when it will happen.
You definitely want to own real estate in that period.
NOW is the BEST time to buy!!!!
-REIC Shill
qt (Troll Boy),
Not sure how you get that out of my comment, but whatever floats your boat !
It’s funny when you bring the realities of prices here…and the history of SoCal median prices…. and talk about a normal correction during a recession… you are called a REIC bull here, hilarious.
Core Logic posts YoY increases for August of 3.6%
https://www.calculatedriskblog.com/
Home prices continue to increase on an annual basis with the CoreLogic HPI Forecast indicating annual price growth will increase by 5.4% by July 2020. On a month-over-month basis, the forecast calls for home prices to increase by 0.4% from July 2019 to August 2019. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
“Sales of new and existing homes this July were up from a year ago, supported by low mortgage rates and rising family income,†said Dr. Frank Nothaft, chief economist at CoreLogic.
“With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up. If low interest rates and rising income continue, then we expect home-price growth will strengthen over the coming year.â€
Read more at https://www.calculatedriskblog.com/#O0Jl4rD3tHyBemAd.99
I think many people are forgetting about people out there with money. I believe if prices fall a little bit more over the next year or two that those people will start buying up the homes for rentals.
Exactly! Like me! When prices fall 50-70% I will go out and buy.
People forget how leveraged some investors are. They are up to their ears in RE debt. Once the music stop they have to unload fast or are being trapped underwater for at least a decade. Liquidity will dry up fast and cash will be king.
Smart people unload in time and sit on cash until the crash. ….happens every ten years
Milli, you will be buying when prices rise 50% – 70% … cause it will take you a long time before you make enough money to scrape together a down payment. How did you get in such a bad spot?
JT, I couldn’t agree more. I will buy when the housing market corrects. Experts like me expect 50-70% discounts. Until then, renting makes more financial sense. It’s just simple math. Some people (like me) are what they call smart buyers. We buy based on numbers and what makes sense financially.
I could easily buy now if I wanted to:
Six figure income & working wife
Massive cash balance
No debt, over 800 credit score
If I would have bought at the Top like JT and landlord I would be throwing away my money. Someone would have to explain why this is a good idea? I haven’t seen an answer yet. Why not wait and buy half off?
Cash out refinancing is a dumb thing to do but it’s not going to cause a crash in the housing market. In this housing cycle, households and their income have largely been sidelined. “Investors†have dominated the market and set the prices. And investors have aggressively push rents to generate yield. The higher rents supported by a false narrative that there is a housing shortage have attracted new rental construction. In a well-functioning market this should cause rents and house prices to fall but, unlike 20 years ago, ownership of new and existing larger apartment complexes is more concentrated so these owners have market power. Even as “to Lease†signs go up all over the San Fernando Valley, where I live, rents continue to increase. That’s not market failure but a reflection of market power. My assumption is that many smaller investors who have been rental price followers, especially those who go into the market over the last 3 or so years, will not be able to withstand the financial burden of prolonged vacancies and loss of rental income. Some have already started to unwind their housing positions, many others will need to do so over the next few years. Sadly, the price adjustment will be slow. Banks don’t want prices to collapse again but house price appreciation will be negligible for 10 years while the banks and the wealthy investors protect their position society.
so big bank takes little bank until the majority of the population work at walmart for slave wages only to be able to rent a shitty apartment. Home ownership in the US could potentially be a thing of the past and left only for the banksters, the elite, and high income people such as doctors and lawyers or what not, Your average blue collar joe millennial, will slave his life away. Chasing pennies to the grave rather than the dollar to the grave.
Garfunkel (nice name btw)
You sound like the people in 2005-2007 saying: buy now or be priced out forever!
If you go back in time and read the blogs from 2005-2007 RE shills back then and today haven’t learned much.
Its just greed to think what goes up must go up forever. It’s a clear sign that we are at the peak right now.
All the people here waiting and hoping for a depression didn’t learn any lessons from 2009-10. During that time, on paper it looked like home prices plummeted. But they didn’t really. In the aggregate prices fell, 25 or 30%. Which sounds like a lot. But in reality homes that you wanted to live in barely budged. Maybe 10 or 15%.
The 25-30 was an average that included 60%+ drops for houses in far flung ghost town suburbs or in the ghetto. But the reason they were that cheap was because nobody wanted to live there. People only bought there out of pure desperation. And for every 60% off home that nobody wanted, there was a 10% drop in the ultra desirable ares.
All you people are putting your lives on hold for years, living in run down apartments or living with your parents to save maybe $100K. It’s sad and pathetic. Renting long term is financial suicide. Don’t do it kidz.
And as someone else mentioned above, with all of you waiting on the sideline, at the slightest drop in prices, you are all going to be competing against each other. All this pent up demand will drive up prices right back up quickly.
Only way Millie’s fantasy 70% off happens is an extraordinary event like a war (real war not the BS trade war) with China or whatever. And in that case, buying a house will be the least of your worries. Absent something like that, home prices will do what they have done for the past 100 years….keep increasing.
I’ve been tracking the price of our old house in Santa Barbara out of morbid curiosity.
It was a 1960’s tract house along with about 700 other houses in the neighborhood ranging from 1K to 1.5K square feet. Great schools and extremely low crime neighborhood with a 10 minute walk to the beach.
1987- 200K – sold
1994- 260K – sold
2006 – 800K – neighborhood houses
2011 – 420K – Our Millennial was right! sold!
2018 – 950K – neighborhood houses
2019 – 900K – Currently offered neighborhood houses. Our Millennial might be right but there’s a long way to go.
In retrospect we should have held in 1994 and nearly tripled our money in 2006 or 2018.
Our Crystal Ball broke in the 1994 Northridge quake.
I forgot to add some data on this neighborhood that I remember
1966 – 28K – House built
1972-1978 – Rental
1979 – 130K – Sold!
1987 – 200K – Sold!
This shows the increase in housing during the 1970’s and 80’s. and the growth of CA housing prices during this time. 1970’s were boom years. 1980s/90’s were mostly flat.
Landlord, I disagree slightly with you statements.
It really depends on the circumstances.
You live in Spokane. House prices aren’t as overinflated in Spokane-istan as they are in California.
Take me for instance, I am a smart guy, make well over six figures, no debt, over 800 credit score, massive cash war-chest. I can easily see that there is no rental parity in California. So why heavily overpay for a house that’s likely to lose value during the next downturn.
And please don’t tell us you believe there won’t be one. I know some RE shills make it sound like you are a doom and gloomer when you mention the R word. The reality is though that recessions are part of the business cycles. It’s normal and healthy. Most people with a college education know this. And People in California know this because it happens (on avg) every ten years. In California we call it the boom and bust cycles.
Nobody has ever said renting your whole life is the goal……even if you do…..later on in your life you inherit the houses your parents bought for cheap.
A massive, painful housing correction is coming. Don’t deny it, keep your powder dry and buy when prices are lower. Or don’t, and tell yourself, prices will only go up. The choice is really up to you. Just don’t cry later that nobody has warned you.
I hope it helps and I do agree with your financial suicide description. Buying at the top of the bubble in California is something you will deeply regret. You can never catch up with someone who bought low. Buying high is almost like financial suicide in a way.
I have given many strategies to come out ahead during California bubble times:
Rent cheap and save/invest
Live with your parents
Live with your in-laws
If you are single, maybe live in a van. Some smart six figure tech employees do that
Or rent a tiny house or live in a trailer park
Once the correction is here, buy 50-70% off, a nice beautiful house. These strategies are genius and I don’t even charge money for it. Make the best of it and good luck!
Mr. Landlord, you have won me offer. You are correct about the prices in the most desirable areas dropping only half as much as the less desirable ones. However, if the crash does occur, the greatest investment profits will be made by those who buy homes in the least desirable areas.
Millie can’t win either way since he can’t afford to buy in a desirable area and will lose a lot of money buying in a undesirable area. It appears to me that the small, undesirable home are still rising in price so Millie can’t buy now even if you are correct about the longterm trend.
“However, if the crash does occur, the greatest investment profits will be made by those who buy homes in the least desirable areas.”
Yep. People made out like bandits buying homes in Riverside for under $100K in 2009-2010. Same homes are now $250-300K today, plus 10 years worth of rental income. You’re talking 1000% cash on cash return. That’s how you do real estate investing right.
Home prices in the most desirable areas drop only half as much as those less desirable ones. However, if the crash does occur, the greatest investment profits will be made by those who buy homes in the least desirable areas.
Millie can’t win by buying now since he can’t afford to buy in a desirable area and will lose a lot of money if he buys in the currently, very overpriced undesirable areas. Even now, those small, undesirable homes are still rising in price. Millie has to wait and hope for a crash, but it may never occur. If the Fed keeps dropping interest rates, the crash may be delayed many, many years in the future when home prices may be much higher.
Gary, exactly. You don’t win buy buying high. Anyone who has a Puls can buy high.
The trick is to wait, be patient and disciplined. Then buy when the market crashes.
One thing you got wrong though is: interest rates won’t go up in the next years. Have you seen what happened in Japan or Europe? They have negative yielding ten year bonds. Mortgage rates are close to zero there. Still, you can’t push asset prices into sky. Prices will decline. Here in the US we will see a massive crash and you will be able to buy RE 50-70% lower.
Millies in Seattle were high fiving each other at the “crash” that happened in the city. A crash of….wait for it….3% !!! LOL. Meanwhile, rents continue to increase, with August being the 8th straight month of rents going up in the city. Which is weird because all the perma bears were sure prices were going to crash 50% after all the new apartments came online. Weird how they were wrong yet again, huh?
https://mynorthwest.com/1497628/seattle-renters-report-august-2019/
I keep telling you people renting long term is financial suicide.
Agree with you Mr. Landlord, long-term renting is bad for finances. But so is overpaying for assets that are grossly inflated due to policies (ever-growing fiscal deficits plus near zero interest rates because the markets “need” it) aimed at maintaining baby boomer wealth by stealing from future generations. That’s why a lot of us frustrated renters are here on this forum, hoping for a crash that would bring prices back to where they make sense.
SD,
The fallacy by renters is thinking houses are over inflated. Perma bears always think the great crash is coming. Which is why they never buy and continually miss out. Had someone bought at the absolute peak of the the 2000s bubble, say in 2006 or 2007 (depending where you were), today you’d have 12-13 years of principal paydown and a house worth more than what you paid. That’s the absolute worst case scenario and still, you’d be exponentially better off than having rented all this time.
As for blaming Boomers, come on dude not this nonsense again. Take some responsibility for your lives and stop blaming others for your failings. You could have bought cheap real estate 5 years ago. You chose not to. Cuz hey man, millenals are like too cool for owning real estate bruh, we are mobile and we need to be within 1/4 mile of 27 Asian-Somali fusion restaurants. We love your 500 sq ft apartments!! We don’t need those environmentally unfriendly single family homes or a car needed to drive to them. Sound familiar?
You chose to be special snowflakes. Now you get to live with your choices. Not my fault. Not a boomer’s fault. Not Trump’s fault. Not the Fed’s fault. Nobody’s fault but YOUR own. So stop whining, man up, act like an adult and maybe you can right that ship.
I am not a millennial and I am not blaming anyone for my situation. Just stating that IMHO current monetary and fiscal policies are aimed at inflating assets as long as possible, which hurts working people and robs future generations. I did not have the savings in 2010 to buy responsibly. Now I am in good position to buy but not seeing the value – paying $1.1M for house I can rent for $3.5K is financial illiteracy and is indicative of inflated valuation. If that same house was $850K, it would be a barely Ok deal. I can’t speak for the whole country , but in SoCal the home valuations DON”T MAKE ECONOMIC SENSE. And now over-$1M market is dead and prices are slowly coming down (fact!). Once the stock market blows up (which the increased volatility and Walstreet crackheads begging for rate cuts is indicative of), the whole house of cards is coming down. I hope you can cash out by then.
Negative mortgage interest rates, here we come.
https://finance.yahoo.com/news/americans-are-trying-to-get-denmarks-negative-mortgages-143832101.html
Negative mortgage interest rates, here we come:
https://finance.yahoo.com/news/americans-are-trying-to-get-denmarks-negative-mortgages-143832101.html
I’d buy if we get a crash and negative mortgage rates! Until then, hotel mommy is your friend! Gotta have some advantage over boomers. Lol
I kinda feel bad for the perma bears. So wrong for so long. It has to start getting to you guys.
The recession has been cancelled. Mortgage rates are at 3%. Home prices are accelerating.
You guys lost out again.
Who do you believe?
Landlord: there won’t be a recession again ever again. It’s been cancelled
Smart buyer: what they said last time. I am keeping the powder dry. You go ahead and buy your rental “investment†at the top of the bubble.
Landlord: you will rent forever
Smart buyer: sure, what they (realtards) keep saying. Patience and discipline usually win though. Let’s wait and see 🙂
Where’s the crash?
Consider this Santa Monica townhouse: https://www.redfin.com/CA/Santa-Monica/1252-Euclid-St-90404/unit-105/home/8114604
Listed 5 days ago and already an accepted offer.
* 2011 … sold for $990,000.
* 2019 … listed for $1,529,000.
If it got its asking price, that’s a $539,000 markup since 2011.
Renting long term is financial suicide.
Landlord,
Replace “renting†with buying at the top and I would agree that: buying overinflated assets will collapse soon and is financial suicide.
I met a realtard lately….he quickly understood I am a smart guy and get the market. So he didn’t bother trying to give me the cheap sales pitch “interest rates are still lowâ€
Instead, he told me that he sold his house recently and rents now. Smart realtard one should say. He is now waiting for the crash. He looks pretty very old. Probably in his 50’s. He told me he has seen this multiple times. For those who don’t know or are new to the RE game. It’s called cycles. Nothing goes up forever. A downturn after a steep run up is just normal.
A friend of mine just sold her Oregon home for a $36,000 loss after holding it for 13 years. Yet when I looked at what it would have cost her to rent vs. what it did cost her to own during that time period, she still came out ahead owning–even after selling the home for a loss. The main reason was that rents in her city increased at least 60% during those 13 years while her house payment remained the same. Eventually, the monthly cost of owning her home became much less than the cost of renting a similar home.
I agree with Mr Landlord.
“Long Term Renting is Financial Suicide”
I’d also like to add:
Short term home ownership is even worse financial suicide.
8 Million people walked away from their homes in 2008-2011 with foreclosures. (Quote from The Good Dr.) Finally, now after 60% increase in rent from 2008-today, they can buy a house again during this bubble. Hopefully not to walk away again.
These people panicked and sold. The sad part is if they would have held for 3-4 years(easier said than done but don’t commit to buy a house if you don’t have the cash to ride out a downturn. Just like Our Millennial), they would now be showing at least a 10% capital gain on that house,
AND if they bought in 2006 at the peak, they would have ALMOST paid off a 15 year loan (2021) and been able to live rent free for the rest of their lives. Can you imagine NEVER having a rent or house payment for the rest of your life??? And never having to endure a rent increase ever again?
These are the people who bought in 2006 at the last peak and will not have to worry about paying Mr Landlord ever again.
Buy and hold no matter what time and you will do well.
Buy low and sell high is also great advice, but like with many things in life, don’t wait too long. Some early Millennials had a historic great opportunity in 2008-2011 but based on history, housing prices had never crashed 50% in over 70 years before that. It could end up like the 80’s and 90’s where housing prices were flat for decades and inflation ate away at the value.
IMHO, Our Millennial will likely have to wait at least another year for the crash and it may be a flattening and not a crash. How long have you been waiting? 7 years? That’s almost half the life on the journey to a rent-free freedom. If you would have been old enough to buy at the last peak in 2006, you would have had no rent for the rest of your life in 2021. (How old are you?). Do the math.
Yes, waiting a few more years or decades is no issue at all. As long as you don’t buy the top you will be fine. In California especially, you want to buy when the market is down 50-70%
Right now I feel like I am cheating the market. I call it house hacking. Don’t mind to continue doing this. The market will tell you the buy signal. Once we have panic and increased foreclosures.
So lame to base a market projection on 1 sale, lmao ZERO CREDABILITY, Keep trying Realturd cheerleaders, you remind me of Kevin Bacon in Animal House
https://www.youtube.com/watch?v=zDAmPIq29ro
Can’t wait for a recession!!!!!!! Lower prices!!!!! Am gonna buy when the housing market collapses!!!!
The US is headed the same direction as Japan. Zero to negative interest rates and crashing asset markets.
Looks like the bear market has ended and we are entering a downturn. We’ll wait with buying. We saw what happened last time!
Bear market has ended and we’re entering a downturn? That’s a new spin on things.
Haha bidding wars are something from the past. Sry realtards.
Slowdown then crash? I sure hope so!
https://on.mktw.net/32qyVdV
It’s been hot! Luckily I rent cheap not too far from the beach. We still get an ocean breeze and don’t need an AC. The best part is that I don’t pay for HOA’s but have friends in the neighboring community who have a nice community pool. we have the key code. Some people over there have seen me very often and think I live there. Lol. I call this house hacking. Save and invest your money and wait until the foreclosures ramp up again. Then come in and buy at the bottom. Meanwhile enjoy the pool but without paying any HOA.
Aside from being super ghetto, I call that trespassing. You may buy a house one day but unfortunately you’ll never have any class.
That just motivates me to share more strategies. This is called street smart! I should write a blog. Wait, I am already kinda doing this here 🙂
Millie is stealing and bragging about it. Tells you all you need to know about his character. He is typical of millenials, no morality, thinks only of himself, would walk over his dying mother to get something for free.
SAD!
Oh please SoCalguy,
The RE market is the most manipulated market. You can bait and switch (fake asking prices) and get away with it. You can lie about other offers without having to prove it. You can lie about everything and get away without consequences. Real estate agents and lenders/banksters are the most dishonest people. And you tell me taking advantage of a community pool next door is somehow bad? Give me a break.
Sry I had to laugh hard at this 🙂 landlord 😀
Rofl, I am stealing by using a pool without paying for HOA’s? Dude, this is called house hacking. You are just upset you don’t have a pool nearby in your Spokane-istan! Always welcome to join me at the pool next door and have a beer. It’s on me!
Milli, perhaps a homeless bum will break into your apartment someday. Use the shower, eat in your kitchen, sleep in your bed. Homeless breaking into apartments and houses to use amenities are not uncommon in Santa Monica’s sketchier areas. I’ve read of several incidents over the past year.
Should you ever walk in on a homeless bum using your shower, I’m sure you’ll understand that he was only “house hacking” your apartment. Perhaps you’ll even hand him a towel?
Milli, I googled “house hacking.” The term does NOT mean what you say it does.
All the search results described “house hacking” as thus: https://www.coachcarson.com/house-hacking-guide/
A house hack basically means that you buy a small multi-unit real estate property, live in one unit, and rent out the others. The property for house hacking could be a duplex, a triplex, a fourplex, or even other creative property uses like garage apartments or mobile homes, which I’ll cover later. The income from the rental units can pay for some or all or expenses while you live there. Then once you move out, the property could also become a great long-term rental investment.
“House hacking” means you BUY rental property and use the rent to pay for your expenses. It does not mean trespassing.
BTW, you are trespassing. It doesn’t matter if a resident gave you to code key. If only the HOA has authority to allow you to use the pool, and you don’t have their authority, you are trespassing.
You are also breaking and entering. A non-authorized use of a key qualifies as breaking and entering.
What I define as House hacking is a sum of strategies to come out ahead and live a qualty life by not overpaying. There are many strategies I have outlined.
I should probably write a book.
The most important:
Save during good times and don’t spend money on rent or an overpriced mortgage.
If you have parents or in-laws in the area, live with them and cut some kind of deal:
Mom and dad don’t charge rent and help with child care. Adult millennials will help with financial advice, installing apps on phones, retirement planning and help with house remodeling advice.
It must feel really shitty if you massively overpaid for real estate and see it crash soon?
Robert shiller:“It would suggest declining home prices in the near future,†Shiller, who teaches at Yale University, told Bloomberg Television on Thursday. “I wouldn’t be at all surprised if house prices started falling.â€
Well, no shiat Sherlock. Of course prices will crash. Have you ever seen a bubble that doesn’t pop eventually?
https://www.ccn.com/us-housing-market-crash/amp/
Not just Amazon, but all tech companies…..poor Millie!!
“As if highly paid Amazon employees needed another helping hand, some lenders are making it easier for the company’s new tech hires to qualify for home loans. Some mortgage originators now agree to consider Amazon employees’ potential future earnings from restricted stock units — which can make up the majority of their compensation package — as income for the purposes of qualifying for home loans.
That’s a big change from former practice. Historically, lenders haven’t counted the sale of restricted stock units as income when they’re determining whether buyers qualify for home loans, because a dip in stock values could take a big bite out of the units’ value and thus limit future income.”
Renting is financial suicide. Don’t do it kidz.
Landlord, was that article supposed to be supportive of your case?
The article says that future potential income might help get some techies qualified for a loan lol.So what? I can qualify just by showing my cash balance, credit score and w2. I wouldn’t need to make up additional numbers.
As always, you are completely missing the boat. people stopped buying at the top of the market. People got smarter. They just wait until the recession.
Housing Bubble 2.0 Already Popped, now the experts are admitting it, DUH-
Bob Shiller Drops Bombshell: “Wouldn’t Be At All Surprised” If US Home Prices Started Fallinghttps://www.zerohedge.com/news/2019-09-06/robert-shiller-drops-bombshell-wouldnt-be-all-surprised-if-us-home-prices-started
Bob Schiller has been calling a stock bubble and housing bubble for a decade. He hasn’t been right yet. https://seekingalpha.com/article/4108907-robert-shiller-make-richer
Ha! Zero hedge=fake news.
But go on believing if it makes you feel good.
The bubble totally popped…..I am in the RE industry and waiting for the time to buy. 40-50% isn’t unrealistic. I am ready.
Why shouldn’t home owners walk away from bad RE investments? Tishman Speyer did, and was still able to access financing for subsequent deals, and continues to be lauded as an upstanding NYC firm.
Big difference between a homeowner walking away from mortgage and a large corporation walking away from mortgages. Dont you get it – steal small, go to jail, steal big go to Wall Street.
Went on my open house tour yesterday. This flipper remodeled but did a half ass job. He put it on the market but No leads (no sucker left to overpay massively?). Just a month later he dropped the price by 50k lol. From 690 to
Some flippers are in full on panic mode.
Housing crash is coming
https://dsnews.com/daily-dose/09-05-2019/nobel-laureate-housing-market-crash-on-the-way
I don’t think it will be a 50-70% crash but 30-40% for sure. The recession is well overdue and is coming fast. Our business has slowed tremendously and our warehouse is running out of space. We are well overstocked and demand is slowing. The guidance is to kick down the can until everyone sees what’s happening. Buying a house now would be equivalent to buying in 2006/2007.
It’s funny how you have the perma bears here saying house prices are crashing. And yet every other story about housing in the MSM is about the shortage of affordable housing. Both of these can’t be accurate.
I tend to believe the MSM (and I can’t believe I’m saying this).
“In a reprieve for Southern California’s sluggish housing market, home sales rose in July from a year earlier. It was the first sales increase in 12 months. The six-county median price — the point at which half the homes sold for more and half for less — climbed 1.9% in July from a year earlier to reach $540,000.”
– LA Times 8/28
It’s called FAKE NEWS, maybe you heard of it ?
Michaelbluejay.com’s “â€handy rule of thumb†is to multiply your monthly rent by 240. If you can buy a house for less than that, then buying is usually better in the long run.†My family of four lives in SoCal, steps to the beach, in a 1,000 sq. ft, two bedroom apartment. Rent $2000 X 240 = $480,000.
I am about 15min from the beach. Rent is 1400. 1400*240=360k
Or dirt cheap rent as I call it. Let’s me save and invest tons of money each paycheck. Why tie up 150-200k in a downpayment that doesn’t make you money and STILL pay more to the bank than my current rent is?! It’s called rental parity. Plus I don’t pay for water, trash, HOA AND MaIntenance! Buying makes zero financial sense. This all changes when you have a nice beautiful crash!
Poor souls who bought the top of the market. They properly hate people like me who house hack and pay next to nothing for great location. Renting a cheap apartment with two incomes, no debt and 800+ credit score and massive cash balance feels like cheating.
The icing on the cake is that I can still take advantage of the economy until it crashes. My investments have been good to me.
15 minutes from the beach? is that by car or plane?
If you are 15min by car, I assume you live in Gardena.
It’s by ebike. JK, I wish…..it’s by car. 15min from the beach by car depending on traffic. When I go surfing early in the morning I can get there in like 12/13min. I have taken my ebike to work before btw. But i don’t really trust other car drivers. I do have my mountain bike (non ebike) as well for Lake Tahoe vacations etc. i don’t own an airplane yet. But with a rent of just 1400 bucks i get wealthier each month. I might buy an airplane during the next recession when airplane prices are down 50%.
All these “rules” are from the 70 or 80s or 90s when mortgages were 6 to 9%, even double digits. It was in that era that the rule of 3X median income was born. But at 3% mortgages, the rule is meaningless.
240X rent sounds reasonable, but again, in a vacuum it’s kinda meaningless. What tax bracket are you in? Do you itemize? What is property tax like? What do you expect rent increases to be? Just a slight movement up or down for any of those variables and 240 can be too high or too low.
The best rule of thumb is, if you have the money, buy real estate. Even If you move around a lot, rent out the old and buy new. Military families do this and over a 20 year career end up with 4 or 5 homes, paid for by someone else. No better better way to build wealth for the middle class than via real estate.
Market’s dead. Had my listing on the market for 8 weeks. No offers except one super low ball. Seller’s very slow to accept it’s no longer just a slowdown. If we don’t get to 2.5% mortgage rates soon than it’s game over.
Maybe you overpriced it.
This house in my neighborhood just sold after 2 weeks on the market.
It was priced properly and sold for $30K over asking.
search on 5648 Bowesfield Street, LA 90016
this house also just sold $50K over asking, multiple offers.
10861 Whitburn Street, Culver City.
However, these homes are in the area where Netflix, Amazon, Google, etc are all opening offices and studios.
good luck
Housing Bubble 2.0 Already Popped, but the cheerleaders think otherwise lmao- The Press Democrat on California. “According to a new study by Smart Asset, Santa Rosa ranks among the top ten cities in the nation where it pays to negotiate on home price. Between July 2018 and June 2019, an average of 20.39% of Santa Rosa home listings had price reductions, and the median price reduction for those listings month-over-month was 3.01%. Santa Rosa was only outranked by Baltimore.â€
The Napa Valley Register in California. “Data newly released by CoreLogic showed median home prices in Napa County dipped 4.6 percent -– from $669,500 one year ago to $638,500 this July. The Napa County median also dipped month-over-month: from $677,000 this June to $638,500 in July. The median home price also dipped in Sonoma County, according to Sotheby’s. That county’s median was $635,000 in June, compared with $665,000 one year before.â€
“‘Sellers throughout Sonoma and Napa counties are a little more likely to negotiate on price, giving buyers the upper hand in scoring a deal and possibly a wonderful real estate investment,’ said the real estate company.â€
“Total home sales in the San Francisco Bay Area in July 2019 were the lowest for that month since July 2011 when 7,014 homes sold. Sales have fallen on a year-over-year basis for the past 12 consecutive months. The median price paid for all homes sold in the San Francisco Bay Area in July 2019 was $815,500, down 4.7 percent from $856,000 in June 2019 and down 4.1 percent from $850,000 in July 2018.â€
“This is the third consecutive month in which the regional median sale price has fallen on a year-over-year basis, beginning with a 1.9 percent year-over-year decline this May, followed by a 2.2 percent dip this June. This July’s 4.1 percent annual decline in the median was the largest since December 2011, when the median fell 10.5 percent year over year. Before this March, the median sale price had risen on a year-over-year basis for 83 consecutive months – since April 2012. The $875,000 median in June 2018 was the highest ever.â€
So now you can by a crapshack for 635K instead of 665K?
It is not a crash yet and it may never be a crash.
The entire power of Trump and the Fed are rigging the system so it won’t be a crash.
That is the purpose of the Fed. Even if it goes to European negative rates.
Unless Trump starts a real war. Then there will be a crash.
Anyone else notice a change in Millie lately? Used to be he was jovial and fun. Now every other post it’s realtard this, realtrad that, ad hominem attacks on people. He has realized that the crash is never coming and he missed out yet again. And he’s lashing out.
The final straw I think was last week when the stock market recouped all its August losses and is now only a few points shy of yet another all time high. That’s when the lashing out went into overdrive.
3% mortgages, 3.7% unemployment, record high stock market and a re-ignited real estate market. It’s a perma bear’s nightmare.
Renting long term is financial suicide kids. Don’t do it.
I used to be fun? 🙂 thank you landlord. I will try to be funnier going forward!
Here are a few jokes I can think of:
Joke1: this is the best time to buy
Joke2: interest rates are “still†low
Joke3: THIS is the year when millennials go out and buy IN DROVES
Joke4: we have already an offer but please submit your best offer as well. This won’t last long
Joke5: if you don’t buy soon you will be priced out forever
Joke6: renting is throwing your money away. (Example Renter pays 1400 per month, 15min from the beach, buyer pays 150k down and pays 1900 per month to the bank)
Landlord, btw, I do have stocks….a lot actually. 95% of my 401k, discounted employee stock program, Roth IRA, index funds plus dividend stocks. If stocks go up: great. If stocks go down: even better, I buy more. I could care less if the market is up or down…I have a 30year horizon 🙂
Real estate is different. Real estate is very simple. It only makes sense to buy if you have rental parity. Right now we are light years away from it.
He hasn’t been fun since ’17. Having a ‘hot take’ on the impending financial implosion isn’t interesting after 3 years of failed predictions. Reading his comments is like reading zerohedge. I.e., you already know what the content is before getting through a single sentence.
I guess I’d be a bit ornery too if I had to jump fences to use a stranger’s pool. I wonder if he gives his wife a boost up?
Joe sxhmoe
Strangers pool???? I know that pool very well, have been there a lot of times. It’s keyless entry. My buddy texts me the key when they update it. I know most people there.
This is called house hacking.
Millie claims he has all the time in the world. Something tells me that isn’t true. Trying to convince your wife that living in a crappy apartment in a shady part of town for the forseeable future is reaching its limits. To expect a 50 to 70% crash any decent area in socal is ludicrous. Today’s beach close 1M home would be discounted to 300K-500K. Not going to happen!
That’s absolutely correct. It really doesn’t matter if you buy now or in ten years. The only important thing is to not overpay in real estate. That’s real estate investing 101. Buy at the top (now) is the worst financial mistake one can make.
Successful investors preach the same thing over and over: if you don’t have rental parity, buying is just throwing money away.
Who in their right mind ties up 150-200k and still pays more in mortgage, maintenance, hoa, taxes than a renter who invests the 150-200k and pays less in rent? Plus you have zero liabilities in case something breaks. You are just a phone call away from it getting fixed. Landlords are competing for the best renters. A great renter like me gets benefits like ZERO rent increase. Be good to your landlord and your landlord will be good to you.
My dad owns multi family complexes and he treats his good renters like Kings. I will inherit all that at some point 🙂
In this market Rents are sooo cheap that it’s a no brainer to wait until the crash happens. As we all know the market crashes every ten years on average.
I’d add cash out your down payment stocks now at a stock market high and by a house or go into cash.
If you wait and we have a repeat like 2008, both the stock market and housing market crashed 50%. It’s hard to buy a house when your down payment and life savings both evaporate if they are in stocks.
For both the stock market and housing market you don’t take a real loss until you sell.
If we do repeat the 2008 crash, don’t sell anything. However, do buy a house if you have cash.
If you own a house, don’t look at Zillow during a crash. Just enjoy your house and the fact that with a mortgage, it will eventually be paid off and will never increase.
What crash?
Went to an Open House for this Santa Monica home yesterday: https://www.redfin.com/CA/Santa-Monica/839-Harvard-St-90403/home/6762634
It was crammed full of buyers. And it already has an offer.
Prime areas are not crashing.
Too funny!! I wanna meet this buyer! Congrats, you paid almost 2.2Mio for 1700 sqft. And You almost have two bathrooms! The description reads “cuteâ€, “starter homeâ€. This home was built in 1938. Rofl, you must have a mental disability to consider buying this overpriced little crapshack for more than 1mio. I am not sure I would even pay 500k for this. Maybe to demolish it and to build something valuable.
I went to many open houses last weekend. Didn’t see anybody besides bored listing agents. Def seems like buyers have disappeared. The listing agents call it muted demand.
Too bad Chinese millionaires have left as well. That would have given the RE shills hope but now the only hope is that millennials will somehow pick up the slack and buy at the worst time (now). Keep dreaming 😉
That’s Santa Monica’s Northeast neighborhood. The land value alone is easily worth 2.2 million.
Milli: I am not sure I would even pay 500k for this. Maybe to demolish it and to build something valuable.
The buyer might do that. But you can’t demolish and build unless you own the land. And you’ll never get that land for 500k.
Son of labdlord,
I would be careful with phrases that include “forever†or “this will never happenâ€. This is the same rethoric we have seen the last time . People were silly back then, they believed the lies “Buy now or be priced out foreverâ€.
During the last crash we have seen 50% drops in prices. RE Shills like to say, “this time is different. This will Never happen again.â€
But people who understand economic cycles and the RE market believe we will see a 50-70% crash soon.
Milli, just because you can’t afford a decent house does not mean we are in a housing bubble. Not at all. What it means is you make less money than the people who are buying houses. That is the problem. Many people are making pleanty of money to buy a house. It is just that you don’t.
you are right, I’m starting to think that Milli is just a poor fool and has nothing better to do than to pretend like he is hoarding hundreds of thousands while paying cheap rent.
Maybe he is that dude from a few years ago, the guy from San Jose living in his bosses office working in IT? I forgot his name, “Oxnardthenewport Beach” or “carlosinsanjose”, nothing but poor trolls.
I think your mean AlexfromSanJose!!! That dude is still posting on wolfstreet.com. Most people on wolf street get it so there isn’t much reason to post there but it’s insightful.
No, I don’t live in San Jose. I doubt i would be able to rent close to my tech job for 1400 lol
I know people wish I would be poor hehe. That would categorize me well in their sales strategy. I am the lookie loo “buyer†who has the cash, credit score and salary to easily buy now but refuses to sign 😀 I am the worst kind for relatives as they waste time with me.
Jt, exactly!! I refuse to buy at these prices even though I could easily buy.
What I am doing feels like cheating: I pay only 1400 bucks for rent while making well over six figures…lol
Instead of tying up my massive cash/war chest in overpriced real estate I am investing and saving. My net worth increases while house prices decrease.
My strategy is to do this as long as it takes to get to rental parity. Once we have a nice beautiful crash I am happy to buy 1-2 houses. Isn’t it genius? I think so!
It’s the milenial entitled mentality. That’s what this is all about more or less. Millies feels it’s soooooo unfair that some people can buy a house while they can’t. So instead of figuring out a way to make more money, they whine like little babies. In a way I don’t blame the, they were raised to never take responsibility for their actions by their overbearing helicopter parents.
Typical, arrogant, selfish, self-centered response from baby boomers. Worst generation in American history. Only generation to not leave things better for the next. Pathetic. You all need to die so we can get back to a normal, more balanced economic climate.
Landlord, I disagree respectfully. It think this is more likely: millennials are much smarter than previous generations when it comes to home buying. You can easily research what happened with the 7mio foreclosures last time. People bought more house than they could afford on conventional 30year loans and then, when the market did its natural thing (downturns are normal) these people realized, “oh shiat, I massively overpaid for this houseâ€. So they walked away from an enormous 30year debt burden because they couldnt take it to be underwater for the next few decades.
It’s a simple story. Fear was implement successfully: buy now or be priced out forever. Asked any millennial, they don’t believe in this sales pitch. We all know a recession is coming and prices will collapse.
So why buy at the top and waste your money?
I’m not a boomer. But like boomers, I understand how messed up the millie generation is. You guys are a mess.
Milli = JamesJim = SoCal RE agent = Mr. Big = Dude
This is just a joke.
Yep… among others.
When All Else Fails, Turn To Conspiracy Theories, RUSSIA RUSSIA RUSSIA = FAKE NEWS
Housing Bubble 2.0 Already Collapsed, and you know this. – A report from Politico. “The U.S. housing finance system is worse off today than it was on the cusp of the 2008 financial crisis, Republican lawmakers and Trump administration officials warned on Tuesday. Fannie Mae and Freddie Mac, the two government-controlled enterprises that stand behind half the country’s mortgages, are way too undercapitalized, and lending standards have actually deteriorated since the housing crash, the officials said.â€
“‘This whole thing is a car wreck. It’s a dumpster fire, Sen. John Kennedy (R-La.) said at a Senate Banking Committee hearing on the White House’s proposal to overhaul the way the nation finances mortgages. ‘We spent $190 billion of taxpayer money, and we’re in worse shape,’ he said, referring to the bailout of Fannie Mae and Freddie Mac, which were seized by Treasury a decade ago to stave off catastrophic losses in the crisis.â€
http://housingbubble.blog/?p=2338
Well how much you wanna bet I am not Jim James? How does 5 bitcoin sound? I know, I know, you don’t have cash as you tied it all up in overpriced crapshacks.
Here is the problem RE shills and agents face these days. They like to categorize their buyers into 4 categories but there is actually a fifth one that they can’t prepare for:
Buyer A (empowered buyer): has the financial power to buy. RE shill needs to spend time on him and find a pain point to push the buyer to sign.
Buyer B (lookie loo’s): those buyers act and just want to see open houses or gather intel. Some RE agents think there is a chance they will buy eventually. Some RE agents think these people are a waste of time.
“Buyer†c (hopeless, can’t afford): these are not buyers. They are a waste of time for RE professionals.
Buyer D (on the fence, can’t make a decision)
Sales people like to have scripted conversations and a tool box of sticky, cheap sales pitches.
The big problem RE shills and sales guys have these days is a change in buyers sentiment. You will see more and more people (like me) that are a hybrid guy between A and B. They have the financial means to buy but don’t pull the trigger because they expect an economic downturn. RE agents are very slow to adj. especially those that haven’t experienced the last downturn. They don’t know how to deal with that type of buyer because no cheap sales pitch (“interest rates are still low, this is a great time to buy, buy now or be priced out forever, there-is-no-inventory lieâ€) works. Yet they know that these guys COULD buy. The exit strategy for the RE shills/agents is to pretend these buyers dont exist. What you will see as a response is: “nah, you can’t afford†or “nah, you are just pretending†or the funniest of all “nah, these ten posters must be all the sameâ€.
You see the issue? They are not prepared for a shift in the market. Because you can’t. If the majority of potential buyers don’t buy because they think there is a looming recession its game over for the RE shills/agents.
Milli, it is much more simple. There are people who are doing well and just buy a house in a decent area. Then, there are those who don’t have much of a career, so to them, the entire housing market looks like a bubble when it is really not a bubble. The “bubble” people should take a deep look at their career because something has gone wrong.
Exactly JT! That’s what I am talking about. The simple minded RE shill can’t comprehend that there are people with money waiting on the sidelines for buying opportunities!
In a simple mind, there are only two options. Either you buy the top or you don’t buy which means you must be poor. Lol! They don’t have an answer for the lookie loo who is loaded with cash.
I really, really hope you stick around For the crash or are you a good weather poster like landlord who disappears as soon as the dow goes down?
Milli, you have been saying that for five years. You missed out big time because you yelled bubble all the way. Massive mistake. Homes ran up so much that you are priced out and ranting seems to help you.
Years ago, Milli did not buy. He said it was because it was a bubble … prices were too high he said and they were going to crash. Instead, they went straight up and up and up again. Now, we see the tears.
JT, Exactly!!! I have been investing and saving the last few years. I made a killing. I wouldn’t Be in the same situation if I would tied up all my money in overpriced real estate.
I see the daily proof:
Since rents are so dirt cheap compared to buying it really doesn’t make any sense (financially) to throw your money away buy buying overpriced real estate.
Milli, how dumb do you thing people are?
In better parts of SoCal, prices have doubled in the last 5 years. That is doubled. So, if you would have put 10% down, you would have made 10 times your down payment.
If you are an expert, how the heck did you miss that one? What a miss. If you were a professional real estate expert, you would have been fired for missing that.
How dumb do I think people are?
Answer: extremely dumb!!!!!!
Some are so dumb that they don’t even know the basics of real estate 101:
You never buy at the top.
You only buy if you have rental parity.
On those two principles, you lose the avg Jose already. They don’t even know what rental parity is.
I do agree that 2009-2013 was a buying opportunity.
Obviously prices have done well but some people are still not back to what they paid for in 2005 (not even inflation adj!!!).
It shows that buying is all about timing! You never ever buy at the top. RE experts believe we will see a massive crash soon. I would be fine buying at 2009-2013 prices.
Milli, you are blowing smoke. As I pointed out, over that last 5 to 6 years, many areas doubled in value. With a 10% down payment, that means you make 10 times your money. Better than that, you get a lot of that tax free, up to 500K. There is no way you made better than 10 times your money in other investments. No way. Why do you post this garbage?
Jt, paying less than 20% down is totally stupid. Why throw your money away to banks and for PMI? Most houses have not doubled…..they are barely where they were before when people bought at the top in 2005.
Even if you bought at the right time (again- housing is all about timing) you still have one issue: if you sell high you most likely buy again high. The smartest thing is what I am doing: you save in good times and get lucky when we have a nice beautiful crash. You buy 1-2 Houses and sell one during the next bubble. As we all know the market crashes every ten years. You can only win by not buying high. It’s common sense and simple math.
Milli, So, you passed on making 10x your money because of PMI? Paying PMI for one year is such a no-no that you passed up on a 10x gain? And, homes in many LA metro areas doubled over the last 5 to 6 years. They sure did. Since you are the so called real estate you should know that.
RE cheerleaders always make up stories and numbers. The truth is most people overpay for real estate and need it to keep going up. But that’s not how the world works. People who went to college know that economies move in cycles. Your made up book value vaporizes during the downturn. Most houses that were bought during the last peak in 2005 crashed in 2009-2013 and haven’t even recovered yet. It’s pathetic to think that people are that dumb and believe that it is always a good time to buy. Smart investors like me get rich buy waiting for the crash and buying low. If you don’t Listen, then you have to learn the hard way. Keep buying at the peak and see what happens during the next crash. Just don’t complain when I buy next door for 50% off. That’s how you play the real estate game. Simple rule: don’t ever overpay. Buy low, sell high. It’s all about timing. You are welcome 🙂
Lending update:
Seems GSEs and gov are cutting back on their cash out Lending.
Fannie/Freddie: cutting from 85% loan to value to 80%
FHA: cutting from 85% to 80%
VA cutting from 100% to 90%
No more ATM.
It is about time. Anyone who doesn’t have at least 20% equity(skin in the game), should not own a house.
Instead, to prevent a crash, and to keep that 20% equity stable, the US government will lower rates to unbelievable lows to keep the party going. It’s midnight! Don’t leave! Free beer!
Housing Bubble 2.0 Already Popped, Cheerleaders Say it ain’t so -San Diego Home Construction Plunges. Biggest Drop In SoCal
https://www.zerohedge.com/news/2019-09-09/san-diego-home-construction-plunges-biggest-drop-socal
Multi-generational living is making a comeback. We are expected our first child and live with my parents. They are both retired and love having a grandchild soon. And for us it’s a big help living together with our future childcare. Needless to say we don’t have the rent or mortgage expense. At some point we will inherit the house. We don see a need to buy something and deal with financial struggles. Life’s complicated enough!
I had co-workers of mine tell me how benefitial multi-gen living is. We tried it since this year and I have to say WoW oh Wow!!! Grammy and Grammy stock the fridge and take care of the kids. We live rent free and enjoy the nest! This is it folks!!!! Buying a Mio dollar crapshack isnt for us. If you wanna go far you better watch your spending!
Millie got his 30%+ off Cheerleaders 🙂 From Variety on California. “Last year, amid a deluge of publicity, an ultra-contemporary mansion in the posh seaside town of La Jolla, Calif. was listed for sale at $30 million. After a significant pricechop and a change of realtors, the architecturally significant property sold last week for $20.8 million.â€
The Orange County Register in California. “From those humble beginnings, the business grew into a real estate empire spanning Orange, Riverside, San Bernardino and Los Angeles counties. In June, the Tarbell line came to an end when four Berkshire Hathaway franchises acquired the chain’s remaining 20 offices, 1,000 agents and an escrow company. The brokerage is one of at least three Southern California real estate chains to close or sell in the past year, and more shifts are likely as residential brokerages ‘go through a fundamental restructuring at its core,’ one industry analyst said.â€
Millie scores again, 55% off on Fifth Avenue pad, once city’s priciest, sells for 55% percent off, Cheerleaders :0 DOOOOOOOOWWWWWWWW
https://nypost.com/2019/09/10/fifth-avenue-pad-once-citys-priciest-sells-for-55-percent-off/
Two problems with your claim:
1. That Manhattan co-op listed at $120 million, and sold for $53 million. Properties in that price range are meaningless indicators for properties in the $1 to 2 million range.
2. Even if that sale was a meaningful indicator (it’s not), it’s NOT a 55% crash. It’s 55% off asking price. Discounts off asking are meaningless. If that property sold for 55% less that its previous sales price, now THAT’S a crash. But this isn’t that.
re: #2
This can’t be said enough. Asking prices are meaningless. I could ask $100K for a 20 year old civic. Then I sell it for $5K (its actually value) and Millie would think prices of cars fell 95%, LOL.. You’re always going to have people who ask too much, even in a bull market, then have to come down to reality.
What matters is final selling price.
These examples are just the beginning. In California the market is so overheated that it’s widely expected that prices will drop by 50-70% during this crash.
Dang, so we already have 55% crash at the east cost. And mega recession isn’t even here yet. So 70% crash is in the cards then?!?!?
Live with my nana and pay no rent. Good ol Millie is right. you ain’t cheatin you ain’t trying
No, prices will rise. Sorry to say, Millie.
Notice when I post FACTS, the cheerleaders come back with opinions?? Nothing goes up forw=ever, This baby is gonna go down, and HARD!
Here is a 1 car garage in Toronto for sale at the bargain price of only $600,000. I wonder if we could be in a real estate bubble?
https://torontostoreys.com/2019/09/toronto-garage/
Poor Millie….hey at least you have your friend’s pool, LOL
All stock indexes are at or just below all time highs once again. The great crash of August (like the great crash of December) was a blip. As I said over and over, a great buying opportunity.
Also this…
“Mortgage applications to purchase a home increased 5% for the week and were 9% higher than the same week one year ago.”
The bull is back in Wall St, unemployment is at 3.7% and mortgages are at 3%. People Look for at least a 10% increase in house prices over the next year.
Renting is financial suicide, don’t do it kids.
Landlord, Record low unemployment is a very bearish sign. Look back in history. Unemployment spikes during recessions like a rocket. It’s a lagging indicator. only uneducated noobs think that this means everything is awesome.
Renting is the best thing since sliced bread during a manipulated boom.
You stash your cash and wait for a nice beautiful crash and simply buy when house prices are corrected downwards. A conservative estimate is a price drop of 50-70% in prices. We already see it in certain areas.
Many experts are off loading their multi family complexes now. That’s very smart.
The absolute dumbest thing one could do is buy a house during this peak. That would totally ruin you financially. And probably socially. By losing all your equity you might fall into a depression. Who wants to hang out with depressed people? Besides your cash you might lose your friends too. Don’t do it. Be smart and consult with experts who can help you prevent the biggest mistake of your life.
REAL HOMES OF GENIUS (in da hood)
For all you mid-city barrio lovers, you too can buy a 100+ year old home for a mere $900K
https://www.trulia.com/p/ca/los-angeles/2252-w-30th-st-los-angeles-ca-90018–2115510443
Sold 2012 for $350K and with a guess of $100K in remodels and 7 years later, bingo $400K profit.
dont forget to put bars on the windows.
REAL ESTATE PRICES ARE GOING UP 4-5% NEXT YEAR! Nothing can stop this event from occurring although there may be a few cities which do not participate. This is not an opinion or wishful thinking. This is a fact which cannot be changed by an election or trade war or anything else. This coming increase in home prices, on a natonal basis, is a certainty. In fact, I have never been more certain about anything in my entire 74 years of existence!
Gary, even if the increase is not real in terms of purchasing power, the nominal price increase can happen because the unit of measurement (the dollar) gets smaller and smaller. The FED can print as much as they want – it doesn’t take too much effort.
One of the things I always said, is that keeping money in the bank is financial suicide. By necessity I keep 6 mos-year reserves to cover unexpected expenses. My preference is to invest in tangible – RE or gold, but I favor RE.
There is the other side of the coin to leverage to much and go into debt to your eye balls – that is also financial suicide. Like eating, always practice moderation. Even when RE is at the top, I don’t sell unless I found a better deal. If I don’t sell, it still brings me rent. If I sell, the money will be eaten away by inflation.
74 years old! No wonder you flip flop every week. Take your pills old man. Housing bubble popped! Stop buying overpriced crapshacks and give your money to your millennial kids. They’ll know what to do. Save and invest when we get a nice crash.
This is why people think Milli is a troll. The gratuitous attacks on people’s age. The wishing for Boomers to die so “his generation” can inherit. The bragging about his acts of criminal trespass. The gleeful calls for an economic crash. His crazy claims of being an expert. His claims of attending open houses every weekend just to torment realtors.
Milli doesn’t sound like a mature man in his 30s, with a wife and professional career.
He sounds like a frustrated, college age incel, trolling the internet for endless hours alone in his dorm room, because he hasn’t any friends.
Millie, I have really only flipped or change my mind once in the past year. It looked like there was going to be real estate crash and then the Fed cut rates and everything changed. The fundaments changed and so did the outlook for real estate and for the stock market. Both look like they are much higher now.
As the facts change, one has to change his strategy. It is called maximum flexibility in the face of a rapidly changing world.
Oh come on now, you make me look bad. I am a funny, nice guy. It kinda sounds like you have trust issues? I agree with what you said but I would frame it in a nicer way.
I am planning my open house tour for tomorrow! I don’t torment anyone but I do put on a good act. They bite every time.
60% of americans expect a recession and are in deep debt. What could go wrong?
https://www.zerohedge.com/personal-finance/60-americans-believe-recession-coming-continue-pile-debt-frightening-pace
Cash out refi’s are astronomical. We haven’t seen this before. This is gonna hurt as people who have little equity in their house run for the hills when the crash is here.
Reading some of these posts make me laugh. A bunch of lifelong renters who have never owned an RE and have lived thru one crash in their lives as adults claiming to be RE and economic experts.
S&P500 crossed 3000 yesterday. Unemployment is 3.7%. Mortgages are at 3%. Best economy in generations. And all I see here is talk of MuhRecession!!!
LOL
https://www.latimes.com/california/story/2019-09-11/california-renters-relief-legislation-gavin-newsom-rent-cap
Will this affect housing?
Rent control – communists stealing from producers – all the time, everywhere.
I did not see anything in the Constitution giving government the right to dictate prices – that is something only Maduro, Fidel Castro and Kim do – oh, I forgot that there are communists on the the west coast, NY and Chicago doing the same thing. Pretty soon, US will look like a giant prison (like in Former USSR).
So, people work hard all their lives hoping that one day they can retire and now the thieves in Sacramento decided to steal their retirement. They could not save their money in the bank because they pay zero interest and inflation will leave them destitutes. Unless they are government thieves, they don’t have a pension. They paid taxes (federal, state, SS and medicare) all their lives to buy an income producing property to have for retirement and now the thieves tell them that they are not free to do with their property what they want. They are regulated how much to charge, but they have to pay market prices for all the materials and labor they need for maintenance. At the same time they have to pay higher prices for everything due to inflation. Therefore, their retirement was stolen by communists.
So, what is next? Regulate the price of food? Why not?
Pretty soon, the rent prices will go through the roof for anything left for rent. I lived under communists. They create a major shortage on everything and only the black market can provide something at prices ten times higher than mandated prices by the government.
Venezuela, here we come!…Communists in CA buying votes using the savings and private retirement income from retirees – the most despicable people. The majority in CA are brainwashed and indoctrinated to accept this as something desirable. You can not fix stupid. Politicians stealing from native citizens who worked and paid taxes all their lives to help their millions of illegals with rent (price) control, free education, free medical, free food, etc.
Our Millennial says buy low sell high. Very sound advice.
What he doesn’t realize is that the entire US Government is creating policies to defeat his plan. If the US Government has to add another few Trillion to the deficit and lower rates to unimaginable lows to prevent Our Millennial from buying a house at 50% off, they will do it.
Mr Landlord is betting on the competency of the US Government to keep this House Of Cards going.
Who is the bigger fool?
Meanwhile, I am on the sidelines, eating my popcorn and drinking my Pina Colada with an umbrella in my paid off house and waiting.
Good post except for one thing. I don’t think Mr L is betting on the competency, rather the incompetency of the US Govt. Demand for housing > supply of housing due to incompetent Govt. My bet is on Mr L in this one since either Trump or the Democrats will go for Euro style 0 to negative interest.
Good comment, Joe.
If the US Government continues to drive up the US deficit and lowers rates to negative values, Mr Landlord is betting on the success of incompetency of Trump and the US Government.
Trump or whatever clown the Dems nominate.
I’m betting on capitalism. The perma bears here are an odd mix of socialists and anarchists who want the same end goal; the end of capitalism. You may get your wish as the country’s demographics slowly turn us into a 3rd World banana republic. But you’re still at least one, maybe 2 generations before the system collapses completely. Then you’ll get your wish.
I think Mr Landlord is trying to be funny.
The government artificially lowers interest rates which drive up housing prices, the government then backs all mortgages for the lenders and even allows 3% down for government FHA loans, and then if the economy crashes, the government bails out the lenders. That is today. How is this not Socialist? Mr Landlord is a true socialist.
I think Our Millennial is a true capitalist (which is the same as an anarchist). The market should decide what the housing prices should be without any government intervention, insurance, or bailouts. Sort of like back in the 1800’s when banks charged 5-6% for loans. If that darn government wouldn’t have stepped in in 2008, housing prices would have likely dropped 70-80% just like they did during the Great Depression.
Mr Landlord and I are true socialists.
“The us government ..sure if the government is behind it nothing can go wrong 😉
I am a Baby Boomer than that lives in California. Proposition 13 will make me very rich because of the rental homes that we have owned at a very low tax rate. The system is rigged for the Baby Boomers and against Millenials.
In California we need to vote out Prop 13 or you Millie’s will continue to fund our political profit.
Many buyers and sellers are holding out for a major shift in the market favoring their point of view, but housing is not changing anytime soon. Personally, I think it will eventually become a sellers market–but not before next year.
Buyers and sellers need to be careful with their wild expectations. For the rest of the year, the housing market is not going to change much at all. There is an old saying, “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” No matter how hard you wish it was something else, it is still a duck at the end of the day.
Today’s housing market is a slight Seller’s Market. That is when homes are not appreciating much at all, but sellers get to call more of the shots during the negotiating process. For buyers and sellers, wishing that the market was different is a complete waste of time.
Many buyers and sellers are holding out and hoping for a change in the market. Buyers want to see housing slow to a crawl like it did in the last four months of 2018 where, for a moment, they were in the driver’s seat. They would love to see prices come down, after all, aren’t values too high?
Sellers expect the housing market to behave like it did from 2012 through 2017. Boy those were HOT years!! They should once again be able to stretch their housing price and get $15,000 or $20,000 more than the last sale with multiple offers within the first couple of weeks, right?
This kind of thinking is stinking thinking. Neither are correct. What you see in the market today is ultimately what you are going to see for the rest of the year. More simply, it is what it is; what you see is what you get. Values are not going to grow much. The overall pace of housing is not going to change. Housing is going to move along at the same clip. Buyers think that the end of the year is the BEST time of the year to buy. Nope! What you see is what you get. Sellers think that the market is going to suddenly heat up. Nope! What you see is what you get.
Gary, you copied and pasted this one for one from Steven Thomas’ OC housing report…..
Were you trying to pretend you came up with this by yourself?
Btw, at these cheap rents, potential buyers can easily win the waiting game. My rent (15min from the beach and 25ish from my tech job) is only 1400. My wealth is sitting in the bank or investments accounts making me money while sellers struggle to find the last sucker. Often, seller have to move out into a retirement facility or move out of state because they can’t afford the high cost of California ownership anymore. You often see how they try to rent it out but nobody bites because they ask for higher rents to cover their enormous mortgage + taxes + hoa + insurance + maintenance. So they are stuck paying for two places. That’s usually when your realtard tells you: They are very motivated!!! Lol
true what Gary says and jumping online each day to see what interest rates are or what listings have been marked down 5% or seeing the latest fake news on ZeroHedge is a waste of time.
Lol, I start to feel sorry for our RE cheerleaders. This is the second year in a row that they were hoping for a red hot spring selling season. Isn’t that funny? We keep hearing this is the best economy in the history of this earth….It was cold at best. Now, fall and winter will be suuuper slow as well…..and as we see since a year, price declines left and right.
Anyone left wanting to buy the falling knife?
Our favorite, cheap sales pitches have completely disappeared:
“This is the year when millennials go out and buyâ€
“There are Millionens of Chinese millionaires ready to buy your houseâ€
“Buy now or you will be priced out foreverâ€
“There is no inventory!!†(Still can’t help but laugh at that one)
“This spring selling season will be epicâ€
Rofl
Let’s see if they come up with something new. Oh shiat, almost forgot!!
“Interest rates are still lowâ€!!!!!! Folks, we don’t have 14% interest rates anymore! It’s historic low at 3.65%!!!! Go out and buy that overpriced million dollar crapshack now before rates go up! Hurry it won’t last long!!
Pssh, we don’t say this out loud…..obviously rates will go down further. Even a .25% rate hike would crash the entire system at this point but the avg joe doesn’t know that….soo psssh keep quiet! Make them think they are getting a deal by buying now Rofl!
It sounds kinda fun to be a REaltard and to BS people all day long? Actually, no it doesn’t, plus there is like a trillion of them out there. None of them can get a real career going so they are hoping to get paid for telling you fairytales.
More cheap sales pitches
Everyone wants to live here.
The entire states of Michigan and Ohio are preparing a mass migration.
The weather is great.
There may be a bubble in ______, but not here.
Population is growing.
Economy (based on RE market and equity-fueled consumer spending) is strong. – 1,000 maids are being hired in hotels each day.
They aren’t making any more land.
Buy now or be priced out forever
Real estate always goes up
Intrest Rates will never be lower
The Baby boomers / Millennials / your unborn Grandchildren will come
There is no housing bubble because it’s impossible to have housing bubbles.
Real estate never goes down
There’s never ever been a housing bubble so why should there be one now.
Everyone needs to live somewhere.
Look at all the immigrants coming in.
They’re not making any more land
The baby boomers are all buying second homes
We have entered an entirely new valuation model
This is the ownership society and there are all kinds of innovative financing methods that help people buy houses.
Renting is throwing money away.
Real estate has always been the best investment ever so therefore there is no housing bubble.
And even if there is a housing bubble which is a stupid thing to think in the first place it will pop in other places but not where my house is because where my house is is the absolutely perfect place to live and my house will keep going up just not as fast.
We are only in a soft spot.
People aren’t house hunting because of Spring allergies.
Everyone wants to live in _____________(this area).
I’ll just refinance to a fixed rate before my ARM resets.
Iâ€m okay because I have 15% equity.
Homes around here always go up in the long run.
I don’t have to sell because I’ll always want to live around here, so falling prices won’t matter to me.
Our town of __________ has high growth prospects.
It is said that residential real estate in __________ will be in high demand for years to come due to the rapid influx of new high-paying jobs. What’s more, a lot of monied baby boomers are expected to be drawn to __________ as they begin retiring in two years.
The strong industry and opportunities in tourism, health care, infrastructure, liesure activities, as well as a talented and diverse workforce will continue to make __________ a desirable destination for both companies and families alike for years to come.
The city managers and industry leaders have even unveiled a plan to make __________ the next Silicon Valley, revolutionizing the way technology is developed and marketed to the world.
Unlike other cities in the US, __________ maintains a healthy real estate market with a world-class nation-leading real estate workforce ready to work for you whether you decide to buy or sell your home.
Even the real estate investor in __________ has a lot to be excited about.
Home prices in __________ are expected to moderate to a plateau and then increase substantially for the next 10 years or more.
When you get right down to it, no other town has as much to offer as __________ for professionals in real estate or any other industry.
Housing had reach a new permanent plateau.
Prices were reflecting of buyer’s demand.
You had to buy now or be priced out forever.
Prices will rise 20% for ever.
Foreign buyers would keep buying.
Low interest rates will stay low forever.
Renting is for losers.
Real estate NEVER goes down in value.
David Learah said…
Lawrence Yun said….
Suzanne said we can do this.
Boatloads of Chinese are bringing in boatloads of cash.
You got priced out; I’ll be living with the rich people.
People look down on you when you rent. You won’t be invited to parties.
Buying a house means that you are not throwing money away on rent.
Investing in real estate means that you are one of the big boys now, Like The Donald.
after all, 107% of all billionaires made their money in real estate.
Don’t try to catch a falling knife
Turn out the lights when you leave CA
The housing market is returning to normal
There is no stinkin’ bubble
There is no bubble about to burst
The housing market will not crash
Prices will bottom out in…(insert year here)
The trend is your friend
Everyone wants to live in (insert city name here).
Houses in good school districts always go up.
Materials costs keep going up
Illegal immigration will cause prices to keep going up (without toxic loans or using someone else’s SSN)
You have overthought this.
You can never know the right time to buy
If you buy now and the market dips, you can ride out the cycle.
No matter what the market does, if you start buying real estate now and renting it out, you will be a millionaire in thirty years.
It’s different this time.
It’s different here.
I have vast experience and you are wrong.
Everyone wants to live here.
Other areas will be affected but not here.
The underlying fundamentals do not matter here.
This “giddiness†stems from the firm’s consensus that these trends will not be short-lived
Everyone wants to live here.
The entire states of Michigan and Ohio are preparing a mass migration.
Weather here is always great.
There may be a bubble in ______, but not here.
California population is growing.
Prices are reflection of buyer’s demand.
pent up demand
buyers with suitcases of cash
high rents rationalize high prices
Pot is legal now!!!
This is the year when millennial’s go out and buy in droves
Every tech employee in California gets stock options
Every one makes 200k here except 18 year old fry cooks
Principal is paying yourself
This spring Season housing will skyrocket
Buy now before the Chinese buy all the houses
Interest rates are low, it’s a great time to buy
This might be your last chance, if you don’t buy soon, you will never buy
“This next spring selling season will be epic
There is no inventory
Incomes don’t matter
Pot is legal now!!!
Awesome job Octal77! Thanks
How bad is the housing crash? So bad that two of the biggest home builders in the country, DR Horton, and Pulte are up 41% and 35% respectively in 2019.
LOL
Mr L, are you applying the same strategy with the KB home stock you used on amazon stocks? You bought amazon at 2000 and since the stock went down you never mention it again. KB homes all time high was at 36.38 and it’s now at 28dollars. Hint: by buying at 36 dollars you are by making money if it goes from 24 to 28 dollars. You are still at a loss. Don’t worry, on about ten years the stock will have recovered. In between there will be a crash since the recession is coming quickly. Next time, wait until the stock is down and buy low.
DR Horton is up big but luxury homebuilder Toll Bros. is up only 15 % and was up only 5% in August. Toll Bros is concentrated on the CA luxury market, unlike DR Horton. As ‘the man’ says, housing is local.
Up **ONLY** 15%? LOL. Ok yeah you’re right it’s a crash like we’ve never seen before.
Toll brothers is turning away from high end homes in ca and making more affordable or multi family one and making homes more space conservative I was told.
Mr L… I am not predicting a crash nor have I ever predicted a crash. I wish I had predicted the last crash. I am especially not predicting a crash in high end real estate. The softness in high end new developments doesn’t mean the existing stock will crash. A lot of the existing stock is in areas where development is saturated, areas that are also particularly desirable.
Jordan…. The lower income housing from Toll Bros. may be why it has gone up some recently. I was pointing out that there appears to be saturation at the high end of new development but not in the middle. Low income people aren’t in the market for houses.
Housing Bubble 2.0 Already Popped- cheerleaders love catching a falling knife- From The Tribune in California. “For many San Luis Obispo County residents, the prospect of buying a home can seem like an unaffordable and out-of-reach fantasy. Even so, homebuyers find a way to own a slice of Central Coast paradise. Some save up, others get help from family and still others use loan programs to make the numbers add up.â€
“When Wendy Greene bought her Los Osos home in 2017, she was tired of renting and wanted a place to call her own. Greene used funds from her 401(k) account and money from her mother to purchase a $458,000, 1,368-square-foot house with a mortgage that was close to what she was already paying for a San Luis Obispo rental. ‘I didn’t want to keep throwing money away on rent,’ she said.â€
“But then she found out about the supplemental property taxes she would have to pay to help fund the community’s recently constructed Los Osos Wastewater Project. Greene quickly refinanced her mortgage, but still ended up owing hundreds more per month than she anticipated. She now spends a large portion of her take-home pay on her housing. ‘I think I just rushed into the house a little sooner,’ she said.â€
“Greene, who works as an environmental compliance director for an energy company, is considering taking a supplemental job or renting out a room to help with her housing costs. ‘I love owning here, but I’m not sure it’s going to be sustainable,’ she said.â€
This says nothing about nothing.
Your posts are inane. Cut and paste nothingness.
Wendy isn’t “house-smartâ€. She needs a RE expert like me to mentor her.
I could have shown her how to get killer rental deals where you save big b avoiding to buy during the peak.
Rule #1: don’t buy RE at the top of the bubble
Rule #2: make sure you follow rule #1
Rule #3: California RE always crashes after a bubble. On avg every ten years.
Rule #4: don’t leave your cheap apartment until you can buy at rental parity. Leaving your cheap apartment in order to buy an overpriced crapshack is like slaughtering your cash cow.
Rule #5: consult with smart RE experts (eg millennial, that’s me)
Millie. Here are 6 open houses you can go to this weekend!
You might actually appreciate the unique architecture. Heck,
you might even go crazy and make an offer one one! Have fun.
https://la.curbed.com/2019/9/13/20863037/open-houses-homes-for-sale-los-angeles
Thank you!!!i appreciate it but No need to send me listings though. I am bombarded with price reductions and open houses by Redfin, Zillow and other realtard MLS searches.
Btw, i wouldn’t want to buy/live in LA. La traffic sucks and the city itself is nothing special.
Per the OC Register, rent increases in LA and OC grow at nearly twice the rate of inflation.
https://www.ocregister.com/2019/09/14/rents-in-los-angeles-orange-counties-grow-at-nearly-twice-the-inflation-rate/
Anybody who claims rents are crashing needs to quit lying to themselves. Other than Millie, the VAST majority of renters are getting squeezed in a big way. That is a fact!
Correct! Since rents are so dirt cheap compared to buying it really doesn’t make any sense (financially) to throw your money away buy buying overpriced real estate.
Millie, I am currently negotiating to buy a condo in Santa Monica as an investment. It is such a bargain that I just couldn’t resist trying to buy it. It will be interesting to see how it all turns out.
Rofl…..as an investment!!! I think I would pay Money to see those financials…..any chance you could send us what you are offering, downpayment and what rent you expect on this?
I’ve noticed rents increasing in LA County too. At the same time the vacancy rates have increased as has the time needed to fill a vacancy. At the end of 2018 the vacancy rate in LA County was 7.2%. That’s the highest it’s been this century. And a massive number of new apartments are about to come on the market across the county while at the same time the data shows the population of LA is declining. My guess is the professionals know we have a problem and have decided to try to extract as much revenue from the existing tenants rather than compete for new tenants to fill their vacant properties. We’ll see how long they can defy economic forces
Not sure if you guys have heard but the market got hit with a mega jump in mortgage rates.
https://www.cnbc.com/amp/2019/09/13/mortgage-rates-had-worst-week-in-3-years.html
Expect the buyers demand to drop drastically. Rates haven’t been that high in a very long time!
SLO is staring to see some correction especially in N SLO county I keep track with a realtors daily update 80% of all sales are at under list generally nothing earth shattering about 2-5% another 15% at list and 5 % over list for the last 6mos.
Sellers are getting anxious and there are a few listings every week where the drop is between 10-15%.
The time is coming for some serious corrections considering interest rates are at a recent low and it still has not encouraged the market.
I also look at certain markets in Texas where all sales are 100% under listing but that is another market .
My belief she should have waited but each to their own the market will and is correcting, patience is the key and the drop will be significant ,discipline and patience!
No way I am paying current home prices. And rates just skyrocketed to over 4%. I would consider buying if the market drops 20% and we have 1.5% mortgage rates.
Our rent is very affordable. We rent from my in laws and pay them half of the current market rent. It should be free since we are family but whatever.
Interest are at 4? If you have a 550 fico maybe. Top tier is still in the mid 3s. And it’s funny that the milenial perma bears think even 4 is some sort of super high rate. That’s because milenials think history started yesterday.
Mortgages were 15% in the 80s, 6-9% in the 90s and 6% in the mid 2000s. 4% is still near all time lows. Learn some perspective kids.
15% interest rates would be a dream come true! That would crush prices.
Boomers got way too many freebies in their life. Good thing all their wealth will be handed down to us 🙂 they can’t take it with them when they leave this earth.
The drone attack on Saudi oil fields show how quickly a black swan event can happen.
Let’s get a few more of those and we have our global chaos. Dow down, oil up is a good first step.
Is it a black swan? I thought a black swan was an event that everyone thought impossible. But only an idiot would have thought that yet another Mideast war was impossible.
Love all the turmOIL. You gotta love Technologie! With a few drone attacks on Saudi oil fields you can move the market!
This can start the crash. More please!
NWO globalists and Marxists do everything they can to promote global chaos. They think global chaos will help implement their agenda and give them more power. They truly are evil people.
I love Technologie! With just ten drones you can move the oil market? Dude get 100 drones and end several oil fields!! We want a nice global collapse so prices drop!
Quick reality check: we are not marxists, we want a crash so we can buy equities/houses at a low price. Who is so dump and wants to highly overpay for overinflated prices. Overpaying for real estate for instance only benefits the seller, lender and realtard. Why waste your money? I rather enjoy my savings/gains and wait for a collapse and buy at 50-70% discounts. Those who follow are smart….not marxists. Global chaos may assist in the crash. everything is okay in order to get or excellerate the crash.
You can’t see Black Swans coming but you sure can hear Trump and the Republicans beating the War Drums on a war with Iran (or North Korea). Well, there goes all of the Republican deficit reduction efforts.
We are now oil independent so why should the Middle East even exist?
If a war starts, some may call it a Black Swan and others may nitpick like in 2007, and call it highly predictable.
Cash out now!!! The end it nigh! I saw that sign on a street corner last week.
Any war real war with bombs will send the housing and stock market plummeting.
Our Millennial might be right and be able to buy a house at half off if Trump’s tom-tom signals are correct. But if he is still in the stock market, he will lose his down payment and continue renting. (But rents will also plummet until he is 50 and then he will be stuck with $1M.month rents and $1B house prices). Meanwhile, people who bought now will be drinking Pina Colada’s on their paid-off underground lanais (If they survive)
My crystal ball broke during the 1994 Northrdge Quake, but I may be correct. The future is murky (too many clouds of radioactive sand).
Bob: you sure can hear Trump and the Republicans beating the War Drums on a war with Iran (or North Korea).
The Democrats’ War Drums match the Republicans, beat for beat.
The only time the Democrats, or the media, stopped bashing Trump was whenever he bombed Syria or gave another gift to Israel.
Didn’t you notice how Rachel Maddow, how all the “progressive” pundits, suddenly refrained from criticizing Trump while he was bombing Syria?
Tulsi Gabbard is the only Democratic presidential candidate who’s challenging our bipartisan war policies.
“Coincidentally,” Gabbard was shut out of the most recent Democratic presidential debate. She didn’t have to be. She scored high enough in some polls to meet the requirements. But the DNC didn’t consider them “qualifying” polls. The DNC cherry picked the polls that counted toward debate participation, in such a way that Gabbard was shut out.
Only Democrats that are “safe on Iran” were allowed to participate.
One of my rentals is up for renewal in November, so today I am sending the lease extension letter to my tenant. Rent is going up 7%. Still a bargain though and well below market. He’s been a good tenant for 2 years. If he decides to leave, rent will go up 10% and I’ll have 10 people lined up within a day.
Renting long term is financial suicide. Don’t do it kids. Then again, if everyone bought, I’d have no renters. So I take that back…most of you don’t do it. But a few of you keep doing it 🙂
Exactly! If I wouldn’t have a nice old landlord lady who doesn’t increase my rent I would have never accumulated the wealth I have now. I am saving big every paycheck! Thank you landlords out there! If I would have to buy I would have to tie up a big junk of cash and pay more per month! Renting cheap and hoping for a nice beautiful economic crash is the best thing since sliced bread! Can do this forever!
Ok, great land”LORD,” thanks for telling us how lucky you are to collect rent from your peasants. You are in such a position of power with people lining up to live in your property. Everyone looks up to you. You won. You did things right and now you are successful.
What exactly is your objective here? To teach that renting is bad and buying is good no matter the time? Or are you a sort of narcissist that likes showing off about your “rental properties” among those that are probably just trying to buy their first house? Too late in the cycle to continue spewing this non-sense. California real estate is starting to take a trim already. Your advise is sound for 2012-2016, but if you are living rent free at the moment (eg. with parents), you have to be ill to go out and buy a house at the current time! Things are pretty fudged up and no one can say what will happen next but something tells me it won’t be another boom on top of the boom we’ve had since 2012 in California.
Do you always raise the rent? I thought when someone had good renters, you want to entice them to stay?
I am learning this rental game and it seems like a huge hassle to get new renters and the timing of one going out and one coming in would be hard not to lose some rental days etc
Jordan,
My expenses increase every year, so I pass on those expenses to tenants. You know how progressives always want to tax evil corporations? Guess who pays those taxes? You guessed it….consumers. No different with rentals. If my property tax goes up $500 for example, I increase rent by $500. You’re right getting new tenants is somewhat of a pain. But at the same time I’m also not running a charity. And besides that $500 applies to everyone else. So since everyone else is raising their rent by $500, my tenants aren’t really any worse off with me, relatively speaking.
Jon B,
Here’s a tip: stop whining about your miserable life and do something to change it. Nobody handed me anything. I worked my ass off to get where I am.
Living rent free in your mom’s basement is buying into a defeatist loser mentality. I don’t care how much money you save every month. Nobody ever got rich by mooching off their parents well into their 30s or 40s. I know it’s easier to sit there and blame me, blame Trump, blame boomers, blame the Fed, blame banks, blame whomever. But again, that’s a loser mentality. Winners go and do things. Losers sit around and complain.
“MR” Land”LORD,” I agree with you about doing something instead of whining and it’s great that you had this opportunity to accumulate but I see lots of hard working+intelligent people that don’t get so lucky to be a MR landLORD like yourself for one reason or another. You took what I said as an inference that mooching off your parents into your 30s and 40s is going to make you rich or benefit you. Mooching off your parents can definitely benefit you if your parents aren’t even worst off/dumber than yourself, as long as you don’t become dependent on them for the rest of your life! Look at Trump, a “measly” $1 million loan in the 70s from his father (more like $60 mil per new findings) and that got him ahead! It helps to get help and this is just one example. See it around me all the time. Not so many self-made millionaires out there like yourself. They exists but the moochers as you call them are way more in numbers.
In times like this in California, you have to change your strategy and that may mean living in your parents’ basement for a longer time or until you’re married/saved up enough to buy and waiting out outrageous prices (as they exist now in California BUT not in many other states). This is for sure a wiser idea than to rent and make a LORD like yourself rich at your own expense. All bets are off now. Glass Steagall was repealed long ago along other protectionist safety laws. Real estate is now part of the legal gambling system we have (eg stocks) and it “seems” that it will be following the same ups and downs. In hindsight, 2012-2016 were great years to buy real estate in California. Not so great right now! So, if you can hold off a purchase (eg. live with parents, cheap rent, friends) at the current time, yeah it definitely sounds more reasonable than buying an expensive house. We are seeing price drops mostly at the upper/middle end right now in California, we have yield curves going haywire, tariffs shaking up business, recession talks on news, potentially looming war with Iran and their allies, and an upcoming presidential election. Why would you advise people to go about business as usual? Because you feel like they are losers if they live with parents? Staying with parents until you get married is pretty standard in many cultures, maybe not so much here but this definitely doesn’t benefit anyone except landlords. buying rentals is a different game. These pay for themselves and create cash flow even in short term as long as you can get rental parity. Buying shelter at high market prices is not gonna get you anywhere IMO just so you can have a house too. Buy your shelter low and sell your shelter high. Not buy at anytime because you won’t be a loser and a complainer and that property prices will always be higher in 20 years so it doesn’t matter…
Jon B: Staying with parents until you get married is pretty standard in many cultures,
So is marrying young.
In many cultures where people live with parents until marriage, the woman marry in their teens. And nearly rveryone marries by their early 20s.
Here in the U.S., many people don’t marry until they approach 30, or even well into their 30s.
These drone rebels are my heros!!! Let’s get some big action going and have markets dump! Trump said we are locked and loaded! Love that shit
Make the sand glow! We are ready to drop em. Plus we hopefully get a stock market crash!
Housing Bubble 2.0 Already Popped, CA is showing signs daily- From Socket Site on California. “With listing activity having hit a 13-year high earlier this month, the number of homes currently listed for sale in San Francisco now totals 910, which is 2 percent higher than at the same time last year and an 8-year seasonal high.â€
“At the same time, the percentage of active listings which have undergone at least one price reduction has ticked up to 12 percent – which is 2 percent lower than at the same time last year, driven in part by a growing number of unsold properties having been relisted anew with a reduced asking price, but no official reductions according to MLS-based stats.â€
Poor Millie!! LOL
“Homebuilder confidence came in at 68 points in September, rising from August’s upwardly revised reading of 67, according to the National Association of Home Builders/Wells Fargo Housing Market Index. According to the index, September’s level now marks the highest reading since October of last year. In September, the index measuring current sales conditions rose from 73 to 75 points, while buyer traffic remained unchanged at 50. However, expectations over the next six months fell a single point to 70.”
WOMP WOMP for the perma bears.
You’re right, the best month for housing starts since August 2007. There were many great years for housing after that. Oh, wait…
The system is rigged.
https://www.calculatedriskblog.com/2019/09/car-on-california-low-interest-rates.html?m=1
F this. Was hoping the Middle East conflict escalates and oil prices go through the roof. Looks like the saudis will get the field up and running by end of the month. Bad news. Next time, do the job right. I am also waiting/hoping for a big recession.
The U.S. has become the largest oil producer in the world and an exporter of oil. Any escalation of the Middle East conflict will not affect the U.S. like it might other countries such as China which has little oil production.
https://money.cnn.com/2018/09/12/investing/us-oil-production-russia-saudi-arabia/index.html
Anyone getting a mailer stating “Fight for Prop 13: Stop High Property Taxes”?
Landlord. It must be nice to be able to give good long term tenants a break.
In Cali land the pols just eliminated that option with their new statewide rent control law headed for Newsom’s pen. Now only a clueless landlord would allow that since the option to play rent catch up in the future will be eliminated. Also, no landlord is going to put up with nuisance tenants because it’ll be impossible to get rid of them after a year of tenancy. Even a hint of problematic behavior will get them bounced out. New construction will wane, rental inventory will decrease, and vacant unit rents will increase faster in this now distorted market.
More trouble for permabears: Low interest rates boost California housing market as median home price sets another record.
https://www.prnewswire.com/news-releases/low-interest-rates-boost-california-housing-market-as-median-home-price-sets-another-record-car-reports-300919961.html
Must be a pretty sad position when it takes significant drops in financing rates just to slightly squeeze prices higher.
Haha, buy now or be priced out forever fools… have seen this before. Made up stuff to sucker in the last buyer before the crash!
WOMP WOMP for the perma bears
Mortgage application to buy a new home increased by 33% in August vs Aug 2018. 33%!! Talk about a housing crash, huh?
LOL
New home statistics are extremely volatile, as new home sales are only a very small percentage of total home sales. Much of this can be attributed to the fact that new home sale prices are significantly lower YoY. Overall purchase applications (including existing homes, which make up the vast majority of volume) were only up a small percentage, not good considering rates are 125+ bp lower YoY.
But then again, you knew all this, you just wanted to cherry-pick stats to support your permabull narrative.
Total fake news. When you see declining mortgage rates people who currently have a higher rate refinance. With New buyers its a different story. Nobody in their right mind buys right now at these ridiculous price levels. You will see that the FED keeps reducing the feral funds rates and the 10 year treasury yield will also decline. This will be like in Europe where you will see near zero rates. That’s perfect for potential buyers that want crashing prices and near zero rates. Currently, you see that Buyer sentiment has shifted. you have trouble finding suckers who are willing to overpay 50-70%. During the upcoming recessions smart buyers like me will get deals at 1-2% mortgage rates. You gotta be drugged to sign the contract now at the worst time in history.
Btw, why are we reducing the fed funds rate? Easy: because we have the strongest economy ever! Rofl. If you don’t get this clown show….i can’t help you.
Patience is key. Every bubble pops eventually. Why waste your money now and miss out on a buying opportunity of a lifetime during the next crash?
Application = 12% Approval = 2.25% closing
lmao, you think anyone was gonna fall for your BS statement, you gotta be a realturd libtard.
Mortgage applications for home purchases increased by 33%. That must be nationwide. So Cal sales aren’t that strong.
Rofl at our cheerleaders (RE shills).
They still hope that lower interest rates will “boost†overpriced houses to higher levels.
Cheerleaders, you are in for a tough ride. I know it’s been disappointing these last months / years.
First you told us there is no inventory ….but inventory skyrocketed lately
Then you told us the Chinese are coming… But they didn’t
Then you told us the millennials will buy…but they refuse to buy at the peak
Now you tell us lower interest rates will somehow keep the market alive…keep dreaming.
I got the popcorn ready for the 50-70% crash…coming soon to a neighborhood near you 🙂
FYI, no wonder you are in fantasyland right now if you read articles coming from the CAR and NAR. You might as well write your own made-up stories.
Dang!! Almost forgot….one of the biggest lies ever: rents are skyrocketing, rents are skyrocketing!!!!! Buy now!!!
Dude, my old landlord lady must have not gotten the memo. I have been living 15 min from the beach for years and never gotten an increase. I pay 1400 bucks for my cheap apartment but make six figures, plus bonus, debt free and passive income. That’s how winning oooks like. Losing looks like this: buying real estate at the top of the market…if you do that you might as well give away all your money to charities or burn it. Same outcome.
I don’t see a 50% or 70% crash…at least not in my area. If we drop 30% I would backup the truck. People waiting for a 50% or 70% drop will be out of luck. Wall Street is ov
Just trying to be realistic and actually discuss what a 50% to 70% drop equates to:
The current Median price in the U.S. is about 300k. The bottom was around 190k in 2012. 30% drop will be like stepping back in time 7 years. Better yet, a 50% drop will mean my $300k 4bd 3200 sq ft house would be $150k. It was built in 1995 for $155k.
If my house drops 70%, that means the house would be worth $90k. My daughter who is a waitress making $30k a year would be able to buy my house.
Total housing market cap in the U.S. is a little over $30 trillion. A 50% drop would mean a $15 trillion loss. A 70% drop is $20 Trillion loss. You would have to have 30% unemployment for such a thing to happen.
US housing is cheap compared to other developed countries. US is cheaper that Japan, German, UK, Belgium, France, China, Korea.
If housing drop over 30%, people thought the Chinese were buying a lot of houses, wait to when a fire sale happens.
Wall Street firms that now are landlords and own millions of homes would be begging the government for housing stimulus….etc.
Also, the banks will just hold foreclosed inventory to keep housing from dropping too much and wait for prices to go back up. I have seen this happen before in towns hard hit during the oil bust in the 1980s. Banks would not put foreclosed homes on the market at their paying neighbors would walk away too. In a town I lived in I say 2 and 3 year old homes sit empty for a year or two while the bank waited for housing to backup. Why….they do not have to mark to market and take a loss bit loss on the balance sheet. Even better, the FED has backed almost every mortgage by now. So why not just sit on the empty house until it goes back up. Maybe even tear it down. Those are all possible scenarios that i have scene happen.
Please don’t try to talk sense to Millie. He’s too far gone.
70% off is so stupid to admit. Only a moron would cling to this notion.
Oil is down below the pre-Saudi attack. Another perma bear wet dream dashed. And nobody wants war with Iran, other than the MSM since war is always great for ratings. Trump is the most isolationist president we’ve had post WW2. To say he wants war with Iran is beyond delusional and shows how much TDS there is among some people. 3 years into his presidency and you guys still don’t understand what he’s about. Which shows me you still have no idea how to beat him next year.
Friends of ours bought their first house recently. They look miserable and they pay a significant junk of money more per month compared to their previous rent. They said they barely qualified….if buying ends in a desperate financial situation it’s no wonder recent buyers have buyers remorse. We currently live with my parents….I know I know……but it definitely let’s us save money and let’s us go on vacations and drive nice cars. In case of an economic downturn we might consider buying our own place. But this works for us pretty well and we aren’t miserable like our friends who recently bought.
LOL so you drive a d-BagMW instead of putting that money towards building equity in a home. And you’re bragging about it too. Yikes.
Your friends may struggle a little now. But 30-40 years from now they’ll be sipping drinks on a beach somewhere while you figure out a way to make the rent payment. I can’t think of a worse situation than being old and needing to come up with rent every month.
In 30-40 years from now, we’ll all be under water, thanks to Orange Man.
I don’t think your friends are miserable. They are doing what normal adults do.
Being married and living with mommy and daddy while spending your money on vacations and luxury cars is nothing to brag about. If you plan on living with mommy and daddy, there better be good plan in place regarding saving, investing and eventually buying a place.
Team gen z,
Congrats! You are very smart! Smart people know that overpaying for real estate isn’t a good idea. It’s great for people who hate their cash but people who are financially stable and savvy invest when buying opportunities arise. They def don’t buy when asset prices are overvalued by 50-70%. You are def in the winners camp. Save money and live with parents or in-laws if you can! I am jealous!
WOMP WOMP for the permabears.
US existing home sales rise to 17-month high in August.
To recap:
New homes sales up 33% in August
Existing home sales up 17% in august
Stocks at all time highs
Unemployment at all time lows
And yet people here think we’re in a depression.
LOL!
Get out of your mom’s basement kidz and start participating in this onece in a lifetime economic miracle you’re experiencing.
Landlord, again, you are just fooling yourself. You bought a rental in 2017 at the top of the market so you are unable to see what’s really happening. You tell yourself this is a strong economy so you can sleep at night.
Can you answer this question? What kind of strong economy is not able to handle a .25 rate increase of fed funds rate? If this would be a strong economy a .25 rate increase would not even be a topic.
If you actually follow the economy you would know that our economy can’t handle a rate increase.
Worse, we can’t even handle keeping rates at current levels.
We have to lower rates to keep the economy from crashing! And you call this a miracle economy?! Are you one of the dumbest people ever?
The truth is that This is the most pathetic economy. Just laughable. It’s barely hanging on. Only the biggest fool would believe that a lagging indicator like unemployment data is a buy signal.
“We are entering new territory when it comes to home sales by the Bay East Association of Realtors. According to data from 34 East Bay cities, many of them had more homes on the market in August when compared to last August. But 21 of them saw prices drop, some by double digits. Year-to-year median sales prices are down 9 percent in Oakland, 15 percent in San Ramon and 18 percent in El Sobrante.â€
“‘Homebuyers and home sellers are so used to prices going up year over year it is me that when prices drop a little bit or stabilize, people are freaking out,’ said David Stark with the Bay East Association of Realtors.â€
Yes, sellers and realtards are in full panic mode. Their mistake was that they believed the lie that this is somehow a strong economy and eveythingjust keeps going higher lol….how come we have to lower rates? How come we had an inflection point the minute we saw mortgage rates go up? How come we see more inventory, lower prices and lower pending home sales? Not supposed to happen during a good economy?! Looks like sellers got the memo and if they want to sell they better offer a great deal. Buyers are smart and factor in the next crash. You should send lowball offers unless you want to risk to overpay and be underwater during the upcoming crash.
Portland, OR Housing Prices Crater 23% YOY As Rental Rates Nose Dive
https://www.zillow.com/portland-or-97201/home-values/
23% drop YOY– where does it say that?
Ahahhahahahahaah
https://www.zerohedge.com/personal-finance/end-near-us-house-flipping-returns-plunge-8-year-low
Strongest economy ever! Buy now!!! It’s a great time to buy!!!!
The End Is Near: US House Flipping Returns Plunge To 8 Year Low
https://www.zerohedge.com/personal-finance/end-near-us-house-flipping-returns-plunge-8-year-low
Flipping went out long ago.
Even Tarek only buys income/investment property’s.
Milelniials: It’s stupid to spend money on a home
Also Millenials: Hey check out my brand new luxury car (parked in mom’s driveway). LOL
This generation is so screwed up in so many ways. Looks like the $30K millionaire is back, complete with the dBagMW 3-series lease, LOL.
Fall colors are in full bloom, so me and the mrs are going to go for a drive in my (fully paid for) sports car today. Meanwhile Millie will take a tour of his open houses I guess. And his fellow millenials will be asking mom if they can help with the vacuuming.
Everyone have a fun Saturday!
those waiting to buy what happens if we do not get a crash for 5 years or so and prices just float around?
It seems just as likely that the crash is being extended out and the feds can do this for half a decade I think.
I’ve been saying this for years. There are other directions beside up and down. Sideways is also a direction. And prices will stay flat forever! Yes, forever!!
Irvine, CA Housing Prices Crater 12% YOY As One Orange County Broker Laughs “There Never Were Bidding Wars. We Lied.â€
https://www.zillow.com/irvine-ca-92618/home-values/
*Select sale price from dropdown menu on first chart
Manhattan Housing Prices Crater 13% YOY As Falling Prices Emerge In Every Major City
https://www.zillow.com/new-york-ny-10013/home-values/
*Select price from dropdown menu on first chart
Santa Cruz Housing Prices Crater 9% August As Realtors bathe in public restrooms and reside in roadside homeless camps.
http://schneider.rereport.com/market_reports
Homeowners are richer than ever, and only 3% of properties have negative equity. Homeowners are weathier than renters. End of story.
https://www.cnbc.com/2019/09/23/more-americans-are-house-rich.html
Most millennial buyers deeply regret overpaying massively for crapshacks. I currently rent at my moms house. Well, not really, as I don’t pay rent. My goal is what most financial advisors recommend……Live/rent for free and save money for the crash. If the crash happens I will buy my first house. If not, I will continue renting at my moms. At zero rental rates. Who doesn’t like zero rates?
OMG HOUSING CRASH!!!! LOL
Poor perma bears, so wrong so often. How wrong? Well…..
“According to RE/MAX, August posted a 2.8-month supply of inventory, falling from 2.9-month supply in August 2018. Homes spent 44 days on the market, which is one day longer than they did last year.The median price for a home was $263,00 in August, rising 5.7% from last year. Going back to February 2012, prices have now climbed on an annual basis in 89 of the past 91 months. The August Days on Market total of 44 represented the second-fastest pace of August home sales in the report’s history. The previous record was set last August, when homes sold in an average of 43 days.”
Case-Shiller out today for July shows a 3.2% gain in prices for July. WOMP WOMP for the perma bears, once again.
“Home price gains remained positive in low single digits in most cities, and other fundamentals indicate renewed housing demand, said Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices. According to the National Association of Realtors, the YOY change in existing home sales was positive in July for the first time in a number of months, and housing supply tightened since peaking in June”
Renting long term is financial suicide kidz. Don’t do it.
Thank god we have cheap rental apartments available in California. If that wouldn’t be the case, how would I only pay 1400 a month close to my tech job and the beach? It would be terrible if I were forced to buy during this bubble peak. I think most people with common sense agree that buying overpriced real estate at the peak makes little sense. You can just wait a little bit and buy at 50% discounts. As we all know the real estate market crashes every ten years. Overpaying for real estate makes no sense financially. Only RE cheerleaders and realtards tell you it’s a good time to buy. Lol. But if you ask them “was there ever a time when it wasn’t a good time to buy†they quickly change the subject. They only have one goal: To sucker in the last buyer before it all crashes again. Gotta make that last commission check.
Denver, CO Housing Prices Crater 13% YOY As Inventory Balloons On Rising Unemployment And Spiking Foreclosure Rate
https://www.zillow.com/denver-co-80218/home-values/
*Select price from dropdown menu on first chart
Dunedin, FL Housing Prices Crater 10% YOY As One Broker Advises “Tampa Bay Housing Market Is Sinking Like A Turd In A Wellâ€
https://www.movoto.com/dunedin-fl/market-trends
The market is doomed. My buyers all tell me the same thing: recession is coming and therefore money is waiting on the sidelines for the crash. You can’t force people to buy. I actually sold my house and rent a cheap room now. When it dips I am buying back in. I don’t think the market will drop 70% but I can see a 50-60% drop in California and other overheated markets. I wish it would be like 20 years ago. Buyers were less informed and believed you. Nowadays, they find blogs like this in 2 clicks and figure out the cycle has ended. Stats are easily available for everyone. It’s getting harder and harder to lure people in.
Well, it looks like most RE experts agree that a housing downturn is coming very soon. The question is: do we see it in Q1, Q2 or the second half of next year. It’s all about timing folks. It always has and it always will be about timing.
A common reason why it’s a horrible time to buy a house right now is rental parity calculations. For people who don’t know what it means: rental parity means your cost of financing a house through mortgage debt equals the cost of renting a similar house. The avg person should be able to figure out quickly how much cheaper renting is compared to buying. Even with a 20% downpayment. Now, if you are intelligent you have heard about opportunity costs. That means that if you invest that downpayment you will have an ROI that you don’t have when you buy overpriced houses. So, by factoring in opportunity costs, it becomes even clearer that buying makes very little sense (financially).Your downpayment is tied up with an asset that is likely to lose value during the next recession. Most experts (like me) expect housing to correct. This happens roughly every ten years in California. Experts call it the boom and bust cycle. We, the RE experts, believe the correction will be modest. You are likely to buy at 50% discounts. Really savvy investors may buy at 70% discounts. It’s recommended not to throw your money away by overpaying now. Rather wait a little bit and pay half the cost. Your kids and wallet will thank you.
I’m all about buying at or below rental parity.
This is a great rental parity calculator or make your own:
https://michaelbluejay.com/house/rentvsbuy.html#mdt
But millennial you must have never been in a recession.
Practically every investment you can possibly make goes down in a recession. Hell the S&P500 lost a lot more than your average SoCal house in the last recession.
Your reasoning is fine as long as you account for:
1. Investments in general go down during a recession
2. Assuming 0% appreciation on a house is foolish to say the least and ignoring all reality and history. Opportunity cost should be compared to the historical appreciation of housing.
The biggest factor is to make sure you keep your job in the next recession.
What is great about hosing appreciation is that it is leveraged appreciation. With a 20% down payment a 3% increase is really a 15% increase. Sure you need to take into account selling fees but you also need to take into account paying down the principal at rental parity. Selling fees are covered in 3 years of principal. After that principal adds to the leveraged appreciation.
You are on the right track Millenial!!! Just buy at rental parity. Not your fantasy 50-70% drop.
Good luck, and remember… don’t lose your job in the next recession.
That last point is critical to remember.
Don’t lose your job !!!
Recessions only affect you if you choose to participate in them. Don’t choose to participate and you’ll be fine. I’m 100% serious. I was laid off in early 2002 as were millions of others. Post 9/11 the economy took a big hit. There two options for me. Sit in my apartment wallowing in my misery, or get another job. Guess which option I chose? I had a new job lined up within a couple of weeks. But I didn’t start for another 3 weeks so I could collect a little UI. Mr. L needed a little tax payer funded vacay time, LOL.
As to rental parity, it’s imperative people do what you said…account for principal paydown. Every month principal paydown increases.
And also, there are the intangible benefits and risks that should be priced in. Things like being able to decorate as you choose. I know there’s the old trope about painting walls as a renter….paint whatever you want, as long as you paint it back to white when you move. But it’s more than that. It’s flooring, blinds, landscaping, etc. No renter is going to pay for that stuff. So you’re stuck living with someone else’s design as a renter. And the quality lof stuff in a rental is always average at best. When I replace carpet in my rentals, it’s whatever’s on sale at the carpet store that week. Not awful stuff, but not good either. Maybe it’s not a big deal to some, but it’s a cost nonetheless to live with meh decor all your life. Millie lives in a decrepit apartment so decor isn’t #1 on his list. But I bet his wife would like some nice hard wood floors and appliances from the 21st century some day.
What that’s worth is debatable. Is living with nice things worth $100/mo? $200? $500? I don’t know, it’s different for everyone. But NOT living with nice things most definitely has a negative cost to just about everyone (including Millie even though he would never admit it).
All good points NoTankinSight. Buying at or near rental parity in socal is the absolute best measure of when to buy. Other things that need to be considered: property value increases, rent increases and principal pay down. Not to mention other factors such as a huge housing shortage and increasing population.
Instead of bellyaching on this blog, Millie could have bought 3 years ago and be sitting pretty now. Put 20% down, likely 15-20% appreciation and 3 years of principal pay down. Millie would be swimming in equity instead of sitting in a cheap rental, hoping and praying for the 50-70% haircut.
Yes, I agree. Buying at rental parity makes sense. Since we are in a housing bubble and math cannot be manipulated by RE shills everyone with a half brain can see how much cheaper rents are compared to overpriced crapshacks. Unfortunately there is no reason to buy from a financial standpoint. The equity statement is laughable. This isn’t equity what you are describing….this is book value that vaporizes during the crash. are some people really so dumb and actually believe that if the housing market goes up 5% and Zillow shows you how much your house is worth – supposedly – that this is real? Well, sry to pop your bubble, but this isn’t real unless you sell and find a sucker who overpays..and what are you going to do then? Sell high buy high?
Experts know that it is much smarter to just buy low. Real estate is all about timing.RE shills are trying so hard to convince you that buying now is a good idea but obviously buyers sentiment has shifted. It’s the right thing to do to just wait for the crash. Unless you really hate your money. Sure, for some it’s not easy to score a 50-70% discount during the crash but wouldn’t you be fine with 40-45%? I wouldn’t, but again, I am not the avg joe.
Bad news for our RE shills. There wasn’t a red hot spring selling season and the slump continues…..this is how the bust starts at the end of boom cycles. The next months and years should be fun!
“Home-price growth slowed to a crawl in July, but prices actually fell in one U.S. cityâ€
https://finance.yahoo.com/m/2b2d38e3-42ee-3929-ba0d-48134d8c1e00/home-price-growth-slowed-to-a.html?.tsrc=applewf
Data Released Daily: Housing is booming once again
Perma Bears here: We’re in a crash.
LOL
I just read online that housing is booming right now in most of the country:
Homebuilding analyst at Raymond James upgraded Toll Brothers, Lennar and KB Home to “outperform.”
“We had been on the road with some builders, and they were displaying levels of confidence in current conditions we probably hadn’t seen in a couple of years,” said analyst Buck Horne.
Not only were builders confident, but buyers were buoyed by a sharp drop in mortgage rates. The average on the popular 30-year fixed hit a recent high of 4.35% in late April, according to Mortgage News Daily, and then began falling. By the end of August it was right around 3.5%, giving buyers significantly more purchasing power than they had in the spring.
“There was a question of whether buyers would respond to lower mortgage rates and they’ve decisively answered that question, and answered by quicker sales paces,” said Horne.
It appears that the crash is getting delayed again. I know that if I didn’t live in CA, I would be buying homes as an investment right now Rents are so high in most parts of the country that it is cheaper to buy–even with only a 3% down payment.
My rents actually pretty cheap hehe. I live with my parents, don’t pay but help with groceries and make good money at my job. As soon the the market goes back to 2010-2013 price levels I feel comfortable buying. If not, I swear, nothing will get me out of hotel mommy, haha.
August New Home Sales increased 7.1%…..more awful horrible no good news for the perma bears.
WOMP WOMP
For what reason do you, as a real estate perma-bull, come to a housing bubble blog and incessantly post in opposition to the evidence presented that we’re in a bubble?
Reality is hard to swallow, I know. Keep sticking your head in the sand and wait for 70% off sales if you want.
Correct. A recession and real estate crash is coming very fast. 50-70% discounts are common during the bust cycle.
Same camp here. Stopped spending money for stuff I don’t need. I am praying every day for big economic collapse! Want to buy a house but refuse to make some other fuck** rich. I want to buy when some idiot is in desparity and has to foreclose. One day my prayers will be heard. Fuc* this economy, let’s have a big 2008 again!
To all my fellow San Diegans, here we go.
https://www.sandiegouniontribune.com/business/real-estate/story/2019-09-25/san-diego-home-price-down-annually-for-first-time-in-7-years
And the RE cheerleaders here said that the interest rate reduction meant prices would continue to rise. What happened??
Nice reverse psychology post. Get the bears all pumped up to read the article and then….womp womp…..1/10% price drop AND inventory shrinking…lol. Multiple experts claiming no drops coming. Can’t believe they didn’t interview Millennial for his “expert” perspective. Time to sack up and make some offers all you perma-renters!!!
0.1% decline, huge tank, great deals to be had now. LOL, you realize that’s within the realm of statistical error right? Like does anyone care that they can buy a million dollar home for 900 dollars less?! Ladies and gentlemen, the perma-bears’ argument at it’s finest. Grasping at straws while those who bought at literally any time in the past decade continue to build equity, paydown principle, refi at all-time lows, and make MONEY.
Robbie, those self proclaimed “experts†in the article are regular RE shills. You can interview them at any time and they will repeat the same sales pitches. No tank here, buy now!
You are absolutely right. They should interview real experts (like me). I could easily explain to the avg joe why now is a horrible time to buy. I could also break down how to play the RE game successfully.
Joe shmoe, that’s great advice! Buy now! And “make moneyâ€. Don’t worry about rental parity or opportunity costs. That’s for nerds! Real men know that buying overpriced houses at the bubble peak “makes you moneyâ€. You ask how? Leverage! You pay 3% down and your 800k house increases 5% YoY. Get rich quick! We all know housing never goes down and there is no such thing as being house poor. Buying is the path to riches. Always! This time is different and interest rates are still low. Plus, guess what? They are not building more land! Also, millennials will go and buy in droves next year and the million Asian billionaires will return at some point. What are you waiting for?
It’s a great time to buy!
Millie,
You’ve never played the real estate game. An “expert†has experience and a track record. You have neither.
Up 100% then down 0.1%.
LOL. You guys are right, investing in real estate is a horrible idea.
I am a realtor and just sold my SFH for premium dollars. Now it’s time to wait for the recession and buy in at the bottom. Rinse and repeat.
No one is saying it’s bad to invest in real estate. We’re only saying it’s bad to invest when prices have peaked.. No one can dispute that housing prices cycle, and all indications are that prices are declining. Year over year decreases in the summer on the heels of rate reductions? Come on guys wake up.
Anything short of negative interest rates at this point and it’s over. As it should be anyway. What kind of government intentionally tries to make shelter as expensive as possible for its citizens? And what kind of people cheer for that? What a freaking joke.
Lots of open houses and price reductions left and right! That’s what I want to see on weekends! Love it! Crash is coming 🙂
Impeachment? I would love it even though I am a registered republican. Impeachment would surely support a path towards a recession. I am a first time buyer and it’s more important to get a housing crash than it is to have the right party in the White House. I’d actually vote for the democrats just because I hope this will get us the wanted outcome. I want to buy stocks and a house, but not at these prices. I live in California and the market is crazy overpriced. A recession is needed, whatever it takes to get there is alright with me!
We might get a recession, but not because of an impeachment. And, I don’t know when.
The impeachment is not a legal process but a political statement – “we don’t like you” – big whoop. We already knew that the democrats don’t like Trump for almost 4 years now; nothing new. Conviction in the Senate (to remove him), that is a totally different situation – it needs 67 votes which the Democrats will never get. Most likely, this impeachment process will help Trump by energizing his base and the independents.
Now, we might still get a recession but nobody knows when and how strong. Democrats winning the Senate or WH, will do bring a recession. That is for sure. Still, the number one cause for a recession is the FED. They play too much with the economy and act as the Central Committee of the Politburo. The only “free market” left is for low wage workers in a race to the bottom.
It seems that realtors are GAMING the MLS.
Consider this Santa Monica townhouse: https://www.redfin.com/CA/Santa-Monica/1027-21st-St-90403/unit-3/home/21926015
This MLS listing says it just went on the market, for $1,895,000, and that it hasn’t been on the market since its last sale in 2013.
But here is another — inactive — listing for the SAME townhouse: https://www.redfin.com/CA/Santa-Monica/1027-21st-St-90403/unit-103/home/26849311
This listing indicates they tried to sell it this past summer, but failed.
In the first listing, the townhouse is listed as #3. In the second, it’s listed as #103. By playing with the unit number, the agent creates a new listing for the townhouse, with a new history.
Now look at this THIRD listing for the same townhouse: https://www.zillow.com/homedetails/1027-21st-St-103-Santa-Monica-CA-90403/135382698_zpid/
This one indicates that this townhouse sold for $2 million last year. A sale that is ABSENT from the first two listings.
So it SOLD for $2 million last year, and now they’re having trouble selling it for $1,895,000.
Buy why hide that? A $105k drop in sales price (not list price) seems like a bargain to me. A loss for the seller, but an incentive for the buyer.
Hi guys! I have a question. We live in California and consider buying our first home! We got pre-approved and are currently house shopping. Our realtor is saying housing will go up but the news suggest a recession might be on the horizon. We really want to buy though and own a home! We used several rental parity calculators and basically our mortgage shouldn’t be more than 2300 a month. Our rent is less but we factor in our principal and so it comes down to mortgage – principal + all other homeowner costs = current rent.
We are ready to go but the only issue has been that in that price range we couldn’t find a house. I mean they do exist but you don’t want to step in. The houses we do like are much higher priced and if you want a nice house in a nice school district it’s about double of what we want to pay in order to be at rental parity. Our current landlord seems to be getting us a great deal. So our question is: how likely is it that the market will crash 40-50% in the next few years? Since our rent seems to be a great deal we are not really in a rush but again we like the idea of homeownership if it makes sense. Thank you all in advance!
Prices will go down possibly 25% in nicer areas. That’s over the period of the next few years. You might get 40% discount in crap areas. You’re better off renting or leaving the state if you want to own.
@New Buyer/Geoff,
A 50% decline in housing is conservative and pretty much a given according to RE experts. I am familiar with the topic and can provide insight. Every 7-10 years the housing market corrects in California. We (the RE experts) call it boom and bust cycles. It’s normal for RE shills to believe that what goes up must go up forever. Most RE shills think every time we have a new cycle that this time must be different.
Savvy investors and experts wait and buy during buying opportunities. The avg joe usually buys high and forecloses during the recession. RE investing is all about timing. Don’t ever buy at the peak. Buy when you see rental parity. There is a reason why RE cheerleaders never show a rental parity calculation. It shows how ridiculous overpriced Real Estate is. It’s much smarter to rent right now and buy when prices correct (50-70%).
The Home Buying Institute on California. “There are plenty of U.S. cities where values are actually dropping right now. And in some cities, they are falling fast. Today, we’ll be taking a look at some of the California cities where home prices are dropping in 2019 (and could continue to drop into 2020). Draw a big, imaginary circle just to the south of San Francisco. Make sure it includes most of the South Bay and East Bay regions, along with all of Santa Clara County. That’s where prices are dropping.â€
“As of fall 2019, home values were falling in places like Cupertino, Mountain View, Palo Alto, San Jose and Sunnyvale. All of these real estate markets have something in common. They’ve all experienced rapid (and unsustainable) home-price gains over the past few years. In most of these markets, severe inventory shortages have created a kind of frenzy among buyers that causes them to make offers above the asking price. This in turn has caused home values to skyrocket.â€
“But those days seem to be in the past, for the most part. Now the trend has reversed. Instead of skyrocketing, home prices are now plummeting in some of these California cities. The biggest price drops seem to be occurring in the South Bay / Santa Clara Valley region of the state. In some of those cities — like Cupertino and Milpitas — median home values have dropped by more than 10% over the past year.â€
From LA Curbed this week
Hey folks, slow down in prices? YES. Reversal in prices, NO!
https://la.curbed.com/2019/9/26/20883661/los-angeles-home-prices-august
Homebuyers hoping for prices to come down amid a recession might need to keep on waiting (or give up hope).
While median home prices in Los Angeles County dipped in August after a record-setting July, they’re up year-over-year. A new report from CoreLogic pegs the median price of a home at $619,000 in August, a 0.7 percent increase from August 2018.
Homes sold for $500,000 or more accounted for 70 percent of all sales last month, up from 68.2 percent in August of last year. Overall, however, sales are sluggish year-over-year; 443 fewer homes sold last month compared to the year prior, according to CoreLogic.
“Some buyers no doubt remain parked on the sidelines, concerned about the possibility of buying near a price peak, and affordability remains a challenge for many,†says CoreLogic analyst Andrew Page.
But that’s not translating to lower prices, and some price points, especially the $800,000 to $1.7 million range, remain competitive, says Mica Campbell, a Sotheby’s agent who works primarily in Northeast Los Angeles neighborhoods.
Buyers, she says, “better be including a dear-seller letter, and they better be prepared for multiple offers.â€
Still, the Los Angeles housing market has slowed considerably since last year—when home prices were climbing as much as 8 percent annually.
So may posters here are wishing for a depression. It’s so pathetic. The milenial generation is so messed up in so many ways.
And along with pathetic you guys are not very astute. If that magical depression does show up, what do you think happens to your job? Sure there will be cheap houses. Good luck getting a mortgage when you’re unemployed.
We are in a housing crisis and desperately need prices to collapse. I am keeping all my cash together and currently stay at my parents house until the crisis is resolved (crash). I would love to buy a house in SoCal but are unwilling to settle for an overpriced condo. If there is no crash I stay put.
I think Millie is just posting the same nonsense under different handles. If not, some of these Millenials have no idea what they are wishing for. If plan A for buying RE in socal is waiting for the giant recession, but better be one hell of a Plan B. Living in with mommy and daddy permanently may be an option.
Yep, sure. On this blog are only RE cheerleaders and one millennial. There is no one else that waits for a recession/lower prices but one person on the Internet! Is that why they call you “blankmind�
Landlord,
Rofl! So you are saying it’s better to buy at the peak instead of waiting for lower prices because lower prices mean you lose your job??????? Muhahahhaa
That has to be the dumbest comment ever on this blog and I have seen a few dumb ones. So according to the slumlord from Spokane-istan it’s better to buy high and lose your job and the overpriced house during a recession. Don’t wait to buy low!!! Buy high and lose job&house! That’s much better!
I visited the sales office of one of the many new communities they are building. I told the sales lady I am just here to look and I said that the new homes are very overpriced. She asked me how much my rent was but she quickly regretted asking that question. After I told her how affordable my rent is she didn’t try to pitch the overpriced houses anymore. The only way they can keep this bubble alive a bit longer is by reducing the interest rates to 1%.
The August CoreLogic data for Southern California reveals the surprising extent to which the market has declined over the last 12 months. According to a report in the LA Times, https://www.latimes.com/business/story/2019-09-25/southern-california-home-prices-were-flat-and-sales-fell-in-august the data shows no change in Southern California’s medium house price from August 2018 and sales volume down 1.2%. In LA County, prices were up only 0.7% and sales volume crashed 5.9%. Despite the extraordinary efforts of the real estate industry to maintain an aura of confidence, very low interest rates, and massive fiscal and monetary stimulus from DC, low unemployment and continued modest economic growth the housing market has barely moved. Take out any one of the supporting factors and this fragile housing market will fall heavy. Adding to the risk from economic and policy changes, we know that vacancy rates for residential properties in Los Angeles are at unprecedented high levels. Leasing signs are appearing in places that I haven’t seen for years. It’s getting harder to maintain the false narrative that we have a housing shortage and when that narrative falls apart, things will be grim
Crashed 5%? LOL
An increase in price of 0.7% is a crash? Double LOL
Oh and dude, if you’re going to post from a source, try to find one that knows the difference between the words median and medium, they’re not the same thing.
You perma bears are hilariously flailing around jumping up for joy that prices are essentially flat after more than doubling in the past 5-7 years. Triple LOL.
That’s really remarkable. The exact opposite of what RE cheerleaders told us would happen is actually happening. Quick recap:
They told us millennials will buy in droves for the last few years. Lol is the only thing that I say to that.
They told us the Asians millionaires will come and buy up all inventory. Triple LOL.
They told us there is no inventory. Dumbest thing I have ever heard.
They told us prices will increase. Huh? Despite lower interest rate and despite a strong economy prices are flat and slightly down?!!!
You see, it’s always the exact opposite what they tell us.
So, sit back, enjoy the show, save your cash and buy when the crash is here.
Millie,
Do you ever read any of the links posted? Prices have – get this – APPRECIATED 0.7%. Your great crash is really the increase in the rate of appreciation has slowed. But prices are still increasing.
I know math is hard, and I realize some of you younguns went through school with Common Core, so I understand how it may be confusing. But still, come on man, this isn’t THAT hard to comprehend.
KGD,
Thanks for posting! Love it! Crash crash crash!!
This website has very good articles and a great reputation due to the excellent research.
https://www.zerohedge.com/personal-finance/home-flipper-lending-hits-13-year-high-what-can-possibly-go-wrong
Flip lending hits 13year high. What can go wrong? “Nothing†if you ask the RE shills/flippers/cheerleaders lol
“Great reputation…†Zerohedge???
Hahahahahaaaa. Lol! Wrong, wrong, wrong!!
Still reading Zerohedge huh Millie? You’re going to miss out only reading articles that cherry pick data and twist it to paint doom and gloom. Good luck…LOL
It’s a day that end in “y” so there must be a ZH article claiming doom and gloom in financial markets.
LOL
Millenial,
Zero Hedge is fantastic if you plan on renting forever and losing tons of money.
If I had a dime for every person who followed Zero Hedge religious in 2012-2016 and missed their opportunity to buy at rental parity.
You can still find some houses today at rental parity in SoCal but they are few and far between. Use that rental parity calculator Millennial and be a true winner!
You know you are at a top when the most bearish bear turns into a bull.
Conversely you know you are at a bottom when the most bullish bull turns into a bear.
I will know we are at the top of housing when you Millennial turn bullish.
Tank in sight!
Rental parity in SoCal??? Show me 🙂
Send us the address and comps, rent analysis etc. I will be all over it. Seriously, please share!
I 100% agree though, you I’ll know when the top is in. The biggest fools buy during the peak.
So, you are waiting for me to buy to know when the top is in. Alright. That might not work out for you so well. But I promise I will share the minute I buy!
Several commentators on this blog have implied that because there has been significant house price inflation over the last 5 years, that prices will continue to increase. But Los Angeles house price data https://fred.stlouisfed.org/series/LXXRSA/ shows that prices rise and then fall significantly over several years. People are correct to worry about buying into the Los Angeles market right at the peak because history shows that their house will take about 10 years to recover its purchase value. Most people know about the housing collapse in 2006 to 2008. But the house price collapse in the 1990s is at least as informative. In October 1989, house prices had increased in Los Angeles by almost 19% year over year. A year later in October 1990 the annual increase was just 0.12%, similar to where we are with the data in October 2019. By October 1991 the annual price fell by 4.2%, then down another 7% the next year and over 10% down in the 1993 October year. House prices kept falling for 6 years and didn’t recover their losses until December 1999. In the last cycle, house prices in LA peaked in mid-2006 and didn’t recover that value for 12 years. We are now at or near the peak of the current cycle. Be warned
Thanks for your awesome post KGD! I am also waiting for a recession and lower prices. #keepthepowderdry #loveRecessions
Tell your story to all the house equity millionares all over the Los Angeles. Go ahead and tell them to rent.
Selling now is the right thing to do from a financial perspective. If history is any guide, prices will fall by over 20% over the next few years. Anyone with a $million house is likely to lose over $200,000 in value. They can avoid the loss by selling now, and renting Even if they spent $100,000 on rent over the next few years, they can buy a like house at the bottom of the cycle for $800,000 and be better off by $100,000 versus holding. So if its a financial decision, sell. But if you have an emotional attachment to the house that’s worth more than $100,000, then stay
I would be fine buying if prices correct. A 50% price reduction would get me to sign the papers. Looks like we need a recession first.
That sounds like a solid plan. If that 50% drop happens, I’ll be picking up a few more beach close rentals. Something tells me I won’t be the only one with that plan.
Same. People need to wake up from their dream that there won’t be another recession. Isn’t it like common sense? Anyways, I am waiting for a good entry into the RE market. Bring on the 50% haircut in prices, I am ready!
lmao – Manhattan Home Prices Down 8% In Q3 – Largest Slump Since 2011
https://www.zerohedge.com/markets/manhattan-home-prices-down-8-q3-largest-slump-2011
Do any of you Millies here realize how stereotypical millie you are? It’s all whining about how unfair the world is and throwing tantrums when someone challenges your ridiculous ideas. It’s like if I Googled “stereotypical whining self entitled millenial” the first result would be a link to this comment section.
What a pathetic generation. Thank Allah Gen Z is now entering adulthood to balance you guys out.
Landlord, you are probably misinterpreting statements by millennials. Waiting for an entry into the market isn’t whining and it’s not stereotypical. It’s sound investment advice. You won’t dispute the fact that buying a house is an investment in this speculative RE market, right? 20 years ago, the RE buyers weren’t as informed about the speculative nature of real estate. Millennials grew up with the knowledge and saw live what happens if you buy at the wrong time. You can’t fault people for not making the same mistakes previous generations did (“Buy now or be priced out foreverâ€.)
Are you just mad that you haven’t found buyers that are willing to jump in on your overpriced listings?
Soon the slumlord from Spokane-istan is going to tell us that this will be the year when gen-z is going to buy in droves lol. He told us that joke for the last 3 years now! “THIS is the year when millennials go out and buy in drovesâ€.
Looks like millennials are playing it smart and wait until the crash is here. A wise man once said “buy low sell highâ€. That’s how you play the RE game successfully! Only RE shills are trying hard to convince you to do the opposite. Buy sky high and foreclose later is their motto.
But they have never answered the question: why waste your money now, you can just wait and buy 50-70% off during the next bust. And it’s just a matter of time…or are the RE cheerleaders trying to tell us that there won’t ever be a recession again? They will quickly respond and say, sure there will be another recession but only a minor one. Prices will go up 500% until then and during the recession prices will only go down 5%. So buy now!!
Weird, huh? If they are so sure, why aren’t they buying right now? They always tell YOU it’s a great time to buy! Maybe because they bought a loooong time ago and need millennials to keep the bubble going by buying highly overpriced crapshacks?
LMAO, This sucker is going DOWN! A report from CNBC on New York. “Prices for Manhattan real estate took their biggest plunge since the 2008 financial crisis, according to a new report. Brokers and real estate analysts say there is little sign of a bottom after nearly two years of declines. ‘There is a lot of uncertainty in the air,’ said Jonathan Miller, CEO of Miller Samuel. ‘It’s going to be a slow grind over the next year or two.’â€
From Fox Business on New York. “More than 25 percent of new condos that have been built in New York City since 2013 remain unsold. In terms of units – of the 16,242 condos built since 2013, about 12,133 have sold. That means more than 4,100 have not. ‘The third quarter of 2019 was undoubtedly the most challenging quarter in recent memory, especially for condo sales,’ said Garrett Derderian, managing director of market analysis at CORE. ‘Market prices have gone from what was once described as the kindest, gentlest correction to a near free fall. The last time conditions were described in such a way was in the height of the recession.’â€
The New York Times. “‘This market is a bloodbath for some,’ said Frances Katzen, an agent with Douglas Elliman, who said that buyers who bought at peak prices a few years ago are unwilling to lower their prices further, because they would lose money on the deal. But with a glut of new inventory clogging the market, she said more clients are coming around.â€
“‘It’s a horrible market to be a seller,’ she said. ‘It’s absolutely fantastic to be a buyer.’â€
The San Mateo Daily Journal in California. A San Mateo County Association of Realtors report showed the median sales price hitting $1.54 million. The local market’s annual peak was reached in May, when median home sales prices rose to $1.76 million — nearly equaling the $1.8 median sales prices struck in April 2018, which is the most expensive ever recorded in the county.â€
The Epoch Times on California. “While there has been much talk among investors about the recent cooling trend—especially in high-end markets such as the San Francisco Bay Area—fears of a housing market collapse akin to a decade ago are unwarranted, said C.A.R. Senior Economist and Director of Research Oscar Wei.â€
“The economy remains strong, with some softening in the housing market, but there is no reason for investors or home buyers to panic, he said. So, is the real estate boom really over? ‘I think from an investor’s perspective, it’s true,’ Wei said. ‘The housing market is not growing as fast as it has in the previous two years … It is a fallback in terms of price. It’s an adjustment. That is definitely happening.’â€
“Meanwhile, Orange County and San Diego might see a softening in home prices, but not as much as the San Francisco Bay Area, Wei said. ‘In the first half of 2019, we continued to see some lackluster performance of the housing market, particularly sales demand,’ Wei said. ‘In every single month since the beginning of the year, we had seen a decline compared to the previous year.’â€
From Chicago Now on Illinois. “A couple of weeks ago ATTOM Data Solutions updated their foreclosure data. Unfortunately, one really important metric has not seen an improvement since November of last year. That’s the total number of homes that are in some stage of foreclosure or shadow inventory. You would think that declining activity would also be reflected in a decline in that number and, for most of the time that I’ve been tracking this, that has been true. But since November there has actually been an increase in shadow inventory to the tune of 391 units. This appears to be the longest stretch without some material decline in inventory. Hell if I know why.â€
The Tampa Bay Times in Florida. “Despite a new-home building boom, the percentage of homeowner-occupied dwellings in Pasco County is smaller now than it was 10 years ago. In 2008, nearly 54 percent of the county’s 246,000 residences were owner-occupied, according to the Pasco County Property Appraiser’s Office. Eleven years later, that percentage stands at less than 47 percent, even though the number of homes has grown by nearly 45,000 units.â€
“The result — part of the lingering effects of the real estate crash and Great Recession of the past decade — is an influx of former homesteads turning into investor-owned rental homes or simply vacant properties that can attract illegal activity.â€
“Now, to aid law- and code-enforcement officers, the county is poised to require those property owners to register their sites with the Pasco County Sheriff’s Office under a proposed ‘at-risk property registry’ ordinance. The targeted properties include: those in foreclosure or re-foreclosure; those that have absentee owners; undeveloped or unoccupied land; or hotels or rooming houses renting to people who have no other permanent residence.â€
“Allen Crumbley of Berkshire Hathaway HomeServices Florida Properties Group, endorsed the idea. ‘It has to be done,’ said Crumbley whose company manages 2,000 rental units in the Tampa Bay area, including 400 in Pasco County. ‘Most people are responsible, but it doesn’t take too many (irresponsible owners) in a clustered area to deteriorate a neighborhood.’â€
The Press of Atlantic City in New Jersey. “Candidate for Atlantic County Executive Susan M. Korngut, a Northfield lawyer and Democrat council member, has proposed a foreclosure action plan to combat what she called the ongoing housing problem in Atlantic County. Korngut called for a county program to coordinate how foreclosed properties are maintained, counseling for homeowners, a committee to assess the housing situation quarterly, and actions to list foreclosed properties for sale more promptly.â€
“‘The housing market in Atlantic County is on shaky ground as it has been for years,’ Korngut said. ‘Under the current administration, we have led the nation in foreclosures, and we continue to be among the leaders in the state.’â€
“With 1 in 794 properties in some stage of foreclosure, Atlantic County is now sixth in the nation behind the New Jersey counties of Mercer (1 in 543) and Gloucester (1 in 654); Orange in New York (1 in 684); Clay in Florida (1 in 739); and Cuyahoga in Ohio (1 in 745), according to ATTOM.â€
The Washington Post. “Years after it appeared authorities had shut down a notorious party house near Dupont Circle known for its loud concerts, D.C. police have again put the expansive carriage house with heated pool and indoor 25-foot waterfall in their sights. Now, authorities say, the 5,220-square-foot home has been transformed from a rap music venue into a marijuana pop-up.â€
“The raid came four years after the last owner, Douglas Jefferies, 52, settled a lawsuit filed by D.C. Attorney General Karl A. Racine over the Airbnb-marketed ‘Celebrity House Hunter Mansion’ and agreed to stop all business activity. The house was listed on Airbnb even after the settlement with Racine, though with a warning it was ‘not for events.’ The price dropped from $1,200 to $900 a night. Property records show the home with five bedrooms and five bathrooms went into foreclosure in July 2019.â€
JamesJim: Thank you for this very comprehensive survey
Me hubbi and me are flipers and make big money. Last flip sold this year now waiting for crash. Crash evey ten 7-10 years in California. Rinse and repeet!
Saakshi Gaswani: Thank you explaining your flipping experience. Any good strategy for taking advantage of the cycles in real estate requires buying low and selling high, which is what a good flipper does. Of course that strategy depend on there being a fool out there who will buy high from you and later be forced to sell back low. Fortunately for you, real estate is full of fools
You’re very smart KPD. Buyer often very dump only look for quartz counter and wirlpool appliance. Now margin getting bad and risky. Lost money in 2008. This time we get out right time. 2015/16 were best years bidding war all the time.
Millennial,
It’s a damn shame you weren’t around in 2008.
There were about 5 different housing bubble blogs just for Southern California and each had hundreds of comments per day.
Tank in sight,
Hundreds of comments per day seems a bit much.
Well, I am here now. Back in 2008 I was still attending university.
I can’t wait for the next bust and start buying good deals in real estate!
I bet, back then, the RE shills l had similar comments. “There won’t be a recession, prices won’t fall, buy now or be priced out forever, bla blaâ€
It’s no secret that LA’s real estate market is very overheated. I wouldn’t be able to afford a house until we see a nice collapse in the market. Until then, I live with my girlfriends family. They bought a house decades ago for cheap. If prices go back to 2010, I told my girlfriend we will buy something and start a family. She’s praying daily for a crash now 🙂 🙂 haha lol
Living with your parents as grown adults? You kidding me???? What else are you supposed to do during a housing crisis? Why rent a room for over 1k if you can live at your parents home for free? After all, it’s your house eventually anyways. Someone explain that to me please why we should rent at ridiculous rates! If the crisis is over, I will go and fill out a purchase application. Until then…..I am livin’ the Dream!
Amazing, according to some you guys… there is even a crisis in rent? All these epic crisis you guys are dealing with.
Sorry but rents are always 100% based on incomes and supply and demand.
Millennial doesn’t complain about rent at least…. but contrary to his incessant post… rent has been going UP UP UP… not a crisis but reality.
https://www.ocregister.com/2019/04/13/rents-in-los-angeles-and-orange-counties-up-5-6-thats-fastest-pace-since-2007-says-consumer-price-index/
“The U.S. Bureau of Labor Statistics reports the slice of the CPI tracking the cost of renting show this expense in Los Angeles and Orange counties rose at a 5.6% annual rate in March vs. 4.8% a year earlier.
So far this year, this L.A.-O.C. rent index rose 5.4% compared to 4.9% in 2018 and 4.6% in 2015-2017. Between 2009 and 2014, local rents rose on average 1.7% a year.”
“Sorry but rents are always 100% based on incomes and supply and demand.â€
Exactly the reason why renting is sooo much cheaper than buying during a bubble. No wonder RE cheerleaders never provide rental parity calculation during the bubble peak 🙂
All it would do is make us laugh.
Absolutely a crisis. Rents are a rip off. I am keeping my cash and stay with my mom until we get a collapse! I do warren buffet style….but low sell high
Dude, this is California, only dumb people buy overpriced real estate. Smart people live for free …..parents! Thanks mom and dad 🙂
Bubble Already Popped, This Isn’t Helping-This widening crack in the mortgage market could sink US home prices
https://www.msn.com/en-us/money/realestate/opinion-this-widening-crack-in-the-mortgage-market-could-sink-us-home-prices/ar-AAId0Jq
All this living with mom and dad…snort. Maybe for a few months after college. Sure, that’s fine, everyone does that. I did. But living at home for years and years…nobody is happy with that situation, no matter how many times you may post about it here. It’s not natural for a 30-something to sleep in their childhood bedroom. It’s also very unfair to your parents.
I’m starting to understand why so many 32 year olds in the country acts like a 15 year old. When you live with mom and dad, you act like a child. Makes sense. You are all severely psychologically damaged.
We went from the Greatest Generation to the Pathetic Generation. LOL
SAD
Why would it be sad to live with your parents as an adult? If they have the space for it why waste that space and leave it empty? Your parents might really enjoy having grandkids at the house. Or, your boomer parents might get older and need someone to help them. The adult millennials will like it too to live there for free. Also, if you buy food in bulk you save there as well. It just makes a lot of sense to live in a house that your parents bought for cheap decades ago. It’s not sad, it makes sense for all participants. The grandkids will love it too. Who doesn’t want Grammy there to spoil you?
It’s what you do during a housing crisis. Millennials didnt cause this, we are just at the short end of it and god help me I am not going to buy at these ridiculous prices. I’d pay half! Fight back 🙂
It almost seems like some of these people living for extended periods at Hotel Mommy and Daddy are proud of it, it simply is not natural for grown adults (especially 30+) to do this. Can you imagine meeting somebody of the opposite sex and explaining that you still live with parents well into your 30’s. Good luck with that!
What’s really creepy is the married kids living with parents. That has to be one of the strangest dynamics known to man. You are technically an adult but still viewed as a child since you must abide by Mommy and Daddy’s house rules and they are paying for/providing shelter for you. You couldn’t pay enough to live with parents for any extended period of time.
Blankmind, your parents must suck and live in a tiny crapshack? In that case I would probably not rent from them for free. My parents own nice, big houses. Plenty of space for me and my wife. I’d be very proud of it too. Unfortunately, they don’t live that close to my six figure tech job and my rent is so dirt cheap that I can easily stay another decade here. Living with your parents as adults is called house hacking. it’s California’s best kept secret
Multi-generational living is normal in other countries and also normal in overpriced areas like the east coast or California. Why should I send my kids to rent next door to pay a fortune if they could just stay with me and my wife and save a lot of money. That money saved stays in the family and they can use it to offer my grandkids a better life. Living with your parents as adults is just the new normal. A recession will negatively impact my stock holdings but it will allow my kids to buy affordable real estate. Why wouldn’t you want that for your kids?
The greatest generation was truly great but their children, the baby boomers were not. Baby boomers and to a lesser degree Gen X have left the world in a mess. Governments have massive financial deficits, because pampered baby boomers didn’t want to pay their share of taxes but still wanted all the goodies that government provided including their cheap education at some of the greatest schools in the world. Good paying jobs are far few now than they were when baby boomers started out and baby boomers have left their kids and grand kids a dangerously changed physical environment. Among the many things that your comments Mr Landlard don’t acknowledge is that millennials are not living at home or renting because they want to. They’re not sitting on a pile of cash waiting for a recession. They have school debt. They have relatively low paying jobs. They don’t have benefits. There are no company pension schemes anymore. Their health plans have large deductibles. They have to pay child care because both parents have to work. Unlike the average baby boomer, home ownership for the average millennial is not even a consideration. For them its as remote a prospect as buying an island in the Caribbean is for almost everyone else. They cant afford anything else because the economic and environmental system they have inherited from baby boomers has failed them.
‘This year’s hot housing flavor is something every house hunter can agree upon: a price discount. It’s no blip. The frequency of price-cutting in Southern California, statewide and across the nation is running at or near post-recession highs. Five of the 11 big metros with the steepest jumps in price reductions were in the Golden State. So, who’s lowering asking prices the most? Silicon Valley. In Southern California, more sellers are cutting prices, too’
‘Las Vegas had the second-biggest surge in reductions, running to 22.5% this year from 12.3% a year — an 82% jump. No. 4 was Seattle, 14.6% from 9.3% — a 56% increase. Then there was No. 6 Denver: 18.1% from 13.8% — up 31%; No. 8 Atlanta: 15.1% from 12.3% — up 23%; No. 9 Salt Lake City: 19.6% from 16.1% — up 22%; and No. 10 Kansas City: 13.2% from 10.9% — up 21%’
‘The frequency of price-cutting in Southern California, statewide and across the nation is running at or near post-recession highs’
The REIC media will be happy to sell their grandmothers for one more months commission.
The Future of Housing – – Housing sales slow
– Inventory builds
– “Not giving it awayâ€
– Developers undercut recent buyers to get finish their projects
– Prices slowly start to come down (they are “sticky!â€)
– “Not giving it away!â€
– Housing sales freeze
– Inventory gets to levels that it seems every street has a dozen “for sale†signs in it
– Flippers get crushed (The “alligator†needs to feed every month)
– “Still not giving it away – you f*ckers!!!!!â€
– Prices start to accelerate downward
– Chase that market down!
– “Scum sucking vultures low ball offers – I am not giving it away!!!!â€
– Foreclosures skyrocket
– Mortgage bond funds crash
– “We need a bailout! No one could have seen this coming!!!â€
– Contractors actually show up and are happy for the work
– Fly by night contractors go out of business by the dozen. Illegals mass at Home Depot
– Underwater is a thing. And traps people.
– “I got to bring HOW much to the table to SELL my house?â€
– Bankruptcy
– Misery
– Walk away. Jungle mail.
– I didn’t know it was a recourse loan. Where is my paycheck?
– Help me save my house!
– We are victims! Banks took advantage of us!
– Concrete in the toilets
.
.
.
…. articles on how buying a house is much cheaper than renting
Looks like a recession is coming soon. We won’t buy until prices have reverted to normal (30-40% lower).
My uncle is a RE investor. He said the next crash will be Very bad for house prices. If I buy now I get myself in unnecessary trouble. His advice was to wait until valuations come back down to earth. I will listen and wait! He said, 25-30% price reductions are expected amongst the investors.
You guys are a bit extreme. People need to figure their shit out. Obviously multi gen is a trend. If you ask me, it’s cool. Have been living with my parents since 42 years now. How else are you supposed to save and live a good life? I rather kill myself before I pour all my money into someone’s crapshack just so this seller wins the lottery. No thanks! If I can buy a nice house for 400k in LA I will buy. If not, I stay where I am and won’t leave.
Living with parents for 42 years is cool?
Yep, keep it up.
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