Chinese buyers pullback dramatically in buying U.S. real estate: foreign purchases drop by 36% and the results will be magnified in prime areas of California.
Apparently there is a limit to how many houses Chinese investors can purchase in the U.S. Foreign real estate purchases largely driven by Chinese investors plunged by 36% as internal controls in China made it harder to move money out of the country and trade war talks are having an impact in this sector. While some might say this is small relative to the overall U.S. real estate market you need to realize that money from China was hyper focused on certain areas. At one point there were new developments in Irvine that were seeing 80% purchases from Chinese investors. This has a lot of potential to hit markets where volume and inventory is low and prices are valued at ridiculous levels inflated by outlier buyers. There are many areas in California like that. This also applies to areas like New York, Boston, San Francisco, and Seattle to name a few. So what does this mean for these inflated markets?
Looking at the numbers
This is a clear pullback in foreign purchases in the U.S. real estate market. The value of homes bought by foreign investors is at multi-year lows but more telling is the actual number of buyers is at a decade low:
This is significant and we’ve seen a drop across all areas. No surprise that the largest buyer in dollar amount is China. This is the group that has pulled back the most significantly and when it comes to prime California areas will likely have an impact. This issue has many layers but many of these prime areas have top schools within their area and this is valued by many investors who utilize homes as investment properties after their kids go to school in these areas (e.g., NY, Boston, San Francisco, SoCal, etc.).
The CEO of Juwai even points to this:
“(CNBC) The Chinese were the leading buyers for the seventh consecutive year, purchasing an estimated $13.4 billion worth of residential property. Yet that was a 56% decline from the previous 12 months and comparatively the biggest percentage drop of all foreign buyers. Chinese economic growth slowed to 6.3% in 2019 compared with 6.9% in 2017, when the previous buyer survey began. The Chinese government also tightened its grip on the outflow of cash to purchase foreign property.
The Chinese may also be souring on U.S. real estate due to the current political climate. Anecdotally, real estate agents in California have seen a pullback in Chinese buyer demand. Southern California had been particularly popular with Chinese parents hoping to send their children to American colleges.â€
And word is only starting to spread faster. Tougher visa policies and tighter internal controls will likely make this an ongoing issue unless policies turn in another direction. And this makes total sense in inflated markets where there is scant inventory and a few buyers can set the price. Even a few years ago the thought of Chinese money pulling back even a little in California was unimaginable for a few cheerleaders of the housing industry. All they could see was how their glorious little crap shack was “worth†$1 million even though it was built a few years after World War II and the only updating they have done is slapping granite countertops in the kitchen, added a few stainless steel appliances, made the home Alexa “friendlyâ€, and made the bathroom look like a toilet in Caesars Palace.
No surprise here that tougher policies on foreigners is making things tougher on foreigners. But it isn’t all the doing from one side since internal controls are also getting more stringent within China.
So to bring this back to an example, the number of homes for sale in Irvine is now at a decade plus high:
Not a surprise and expect this trend to continue unless we reverse course on policies.  Â
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439 Responses to “Chinese buyers pullback dramatically in buying U.S. real estate: foreign purchases drop by 36% and the results will be magnified in prime areas of California.”
This is off topic but connected to the theme of the website:
My friend works in London in the financial sector. I was talking to him a couple of weeks about my concerns over the UK debt and deficit. He told me that it didn’t matter how much debt we had as long as we can make the monthly payments(He didn’t use the word monthly payments). I found that very interesting.
RE shills don’t do rent vs buy calc. and if they do they don’t including repairs/maintenance, PMI, transaction costs, HOA’s and opportunity costs. The math on a RE shills spreadsheet will always point to BUY NOW OR BE PRICED OUT FOREVER. And if you don’t buy now you will rent forever. They never learned to buy low and sell high. They only learned “buy now†which leads to financial destruction. They never consider any macro economic trends. As soon as you qualify you buy. This old thinking worked 60 years ago but with the recurring ten year boom and bust cycles we have nowadays it’s just financial stupidity to buy at the peak. Which is good for people that save during good times and buy RE during the downturn.
You posted this same thing, word for word, on the previous thread.
And now you post it again, out of context of anything said here.
Knowing your fondness for repetition, I suppose you’ll repost this several more times on this thread alone.
Did you run a rent vs buy calc on your wife?
Knowing how stubborn RE shills are, you need to re-post good stuff like my post above a few times.
Milli is posting the same negative garbage under different handles on zerohedge as well as marketwatch and other sites. I think he is trying to spread misinformation for political reasons.
I tend to hit the nail on the head. RE shills and cheerleaders can’t take it so they respond with anger. I am not political at all. I report the RE developments. Everything is pointing towards a crash. RE shills are in full denial. Probably because they are heavily invested in RE. Denial won’t help, the market is going downhill fast and this trend cannot be stopped. Don’t fight the cycle. Get out before you lose your shirt.
Makes perfect sense that Millie is a troll on Zero(brians)Hedge.
RE Shills and RE permabears will both suffer the same fate – not taking cyclic markets into account.
No one here says ‘buy now or be priced out forever’ except in Millie Vanillie’s lip-synced mind.
I often quote good articles from zero hedge. Why not? It’s accurate data and not manipulated like the stuff from the NAR. If you want to read manipulated data you just fool yourself. I haven’t posted on zerohedge, simply because there are no RE shills and RE cheerleaders. Where is the fun in posting on a website that has already people who know and accept the crash is coming? Here, you still have a few perma bulls that are in full denial and keep saying if you don’t buy now you will rent forever. They never understood that you can rent during a bubble and wait until the crash to buy at the bottom. It’s so simple but for some reason they can’t grasp that concept. It’s sad and it’s going to hurt a lot of these RE shills.
Milli: Here, you still have a few perma bulls that are in full denial and keep saying if you don’t buy now you will rent forever.
No one has said you must “buy now or rent forever.”
What some have said is that if you wait for a 50-70% crash on coastal California, then you will rent forever.
Son of a landlord,
Not only did they say “if you don’t buy now you will rent forever†they also said:
“This will be the year when millennials buy in drovesâ€
“Buy now before the Chinese buy all the housesâ€
“Interest rates are low, it’s a great time to buyâ€
“This might be your last chance, if you don’t buy soon, you will never buyâ€
“This next spring selling season will be epicâ€
“There is no inventoryâ€
“Incomes don’t matterâ€
The list goes on and on. There is no end to the lies of RE cheerleader/RE shill.
Zerohedge has a habit of spinning anything into a gloom and doom article. They cut and paste what makes the prognosis sound bad. LOL There are several time I read one of ZH articles and then went to the original source which actually was a very bullish. I think 95% of ZH articles are manipulated because Doom and Gloom sells.
Using ZH as a source for any investing will resort in a failure. IMHO
Seen It All Before, And It Ends Badly.
It reminds me of the mid to late 80s when the Japanese were buying everything in sight and were going to take over the world. And then it all fell apart.
History repeats.
Just a thought.
VicB
A Chinese buyer just purchased a newly constructed Bel Air mansion for $75 million: https://www.dailymail.co.uk/news/article-7267933/Los-Angeles-megamansion-sold-Chinese-buyer-75-MILLION.html
A megamansion in Los Angeles has been sold to a Chinese national for $75 million, marking one of the biggest residential real estate deals in the city’s history.
The 25,000 square foot home was originally listed last November for $88 million, before the seller slashed the asking price.
Located in the swanky neighborhood of Bel-Air, the property had only just been completed by Ardie Tavangarian, a high-powered owner of construction firm Arya Group. …
The seller did lower the asking price from $88 million to $75 million.
Still, it’s hard to extrapolate meaningful data from megamansion sales. Does this sale have any relevancy for homes in the $500k to $2 million range?
Exactly.
This is a good development for the average worker in CA.
In another social democrat paradise (Chicago), the communists (liberals) decided to nationalize the houses faster and faster at the same time collapsing the value of all real estate:
https://www.illinoispolicy.org/illinois-home-values-down-21-property-taxes-up-9-since-2007/
When you elect communists (liberals) in power every election cycle, there are consequences – they run out of other people’s money. There are limits in how much they can steal. Any way, the voters did not learn anything because their IQ is too low – they repeat the same voting expecting different results – definition of insanity. Well, that is what our public indoctrination centers are able to produce with the money (taxes) they steal from producers.
this would make perfect sense if…….you actually believe in voting, as if we have a choice, we dont. Voting is just an illusion to let people think they have a voice. They dont. If we take a look at history, we can see that basically the same thing is happening, we have rulers/owners. Control tactics of the population are religion (dont beleive me, check your histroy books about the romans its well documented), but that was the romans, they wouldnt do that to us! why not? cause they arent supposed to….ahh ok gotchya. The other control tactic of the people, is to keep us busy fighting with each other rather than joining forces to fight them, white vs black, dem vs rep, left vs right, us vs mexico which sturs up racial tension with the whole wall bullshit that aint happening. We have no vote, no voice, nothing. Entire world is corrupt………..also worth mentioning and I would like to see if others have heard of this……..apparently they are trying to make home purchasing online, just as easy as buying stocks…….so homes will basically be stocks, therefore all the rich will buy up all the properties, and barely anyone in the US will be a homeowner anymore, US will be a renting majority nation, all owned by the rich, for future generations, home ownership will be a thing of the past…….this could just be their way to get out of debt!
“I don’t care who does the electing, so long as I get to do the nominating.”
-William M. Tweed
Great post!
During the campaign runup to the last presidential election, two polls asked voters about which candidate they wanted. Both Pew and Gallup came up with the same results. Less than 30% of voters wanted either Trump or Clinton. That means over 70% didn’t want either. However, they way democracy works means the country gets a president that very people originally wanted.
Your comment regarding the stupidity of voters is so incredible true!
Bob, I responded to late to you on the previous thread. Any way, here are the indisputable facts which you disingenuously ignore and pretend you are not aware of:
1. CA has a supermajority of Democrats where they have 100% control and are responsible 100% of what is happening there
2. CA has the biggest wealth inequality in the nation
3. CA has the largest percent poverty in the nation (worse than Kansas, Alabama or Mississipi)
4. CA has the largest amount of unfunded liabilities at the same time with the highest level of taxation
5. CA has more ocean opening than any state while Kansas is a landlocked state where it is hard to do business
6. CA along the coast has the best weather (attracting people with money) while Kansas has a miserable weather year round which does not attract or keep people with money.
Sure, in your mind you blame a political party for things beyond their control while comparing apples with oranges in order to get to a stupid conclusion which you know very well that it doesn’t hold any water. The conclusions you reach are an insult to level of intelligence of the other bloggers who read it. You know it very well but prefer to embarrass yourself with the level of comparison you make.
Flyover, Thanks for carrying this forward.
Here are my unbiased responses.
1. CA has a supermajority of Democrats where they have 100% control and are responsible 100% of what is happening there.
Yes! I agree. CA is extremely successful(more than any other state) with the Democrats in charge. Unlike the Great Republican experiment disaster in Kansas.
2. CA has the biggest wealth inequality in the nation
You are saying CA under Democrat leadership has created more wealthy people than ANY other state in the US? Please explain why that is bad? The Republican Kansas experiment created more wealth equality because everyone ended up poor. After that, who would ever vote Republican?
3. CA has the largest percent poverty in the nation (worse than Kansas, Alabama or Mississippi)
Yes, it also imports many illegals and poor people for low wage Ag jobs. CA is the biggest agricultural state in the US under Democrat leadership. It supplies the food for much of the US. I agree with you, paying the Ag workers low wages is not fair. We need a higher minimum wage.
4. CA has the largest amount of unfunded liabilities at the same time with the highest level of taxation.
As far as taxation, you get what you pay for. In CA, there is cleaner air, cleaner beaches, more bike paths, parks than any other state. Most people prefer not to live in a Republican slum state while being poisoned daily.
.
5. CA has more ocean opening than any state while Kansas is a landlocked state where it is hard to do business
That is true. People in CA like their ocean and appreciate the government not to pave over the beaches or have massive oil spills (They don’t like the Republican oil states along the Gulf due to the Republican oil spill pollution). That is why TX, AL, GA, MS don’t have nice beaches. I wouldn’t move there. My friend worked in the Coast Guard on the Gulf Coast after working in CA. He said that in TX, they don’t clean up oil spills, they just bury them. That is why I will never live there. Cancer rates are MUCH higher along the oil coast of TX. I want to live a healthy life.
6. CA along the coast has the best weather (attracting people with money) while Kansas has a miserable weather year round which does not attract or keep people with money.
CA does have the best weather. I can’t credit either party for that. People who appreciate quality of life, tend to move to the Democrat CA, rather than the Republican slum states.
So, when Bob is confronted about CA, he deflects to TX. Ok; that means you admitted that what I said are facts.
You can’t hide the largest poor population behind billionaires. In feudalism you also had lots of equivalent billionaires today, but that was not progress – it was a sick society. CA looks more and more like a feudalist society of few super rich and all equally poor. If you praise the CA politicians for that, then you admit how sick are the liberals who campaign on redistribution.
You also praise the liberal politicians for environment and the air is full of smog (yellowish greyish color) the streets of the big cities full of homeless and feces (thousand and hundred of thousands) with all the health consequences of such a “clean” environment.
You blame poverty on illegals but the CA social democrats support and invite them in their sanctuary state and cities. Trump offered them help via ICE and walls but democrats refuse that. They like to see that mass poverty because it reminds them of the good old days of feudalism where they are noble and the rest are servants.
As far as taxation, you get what you pay for. In CA, there is cleaner air, cleaner beaches, more bike paths …
I’d happily pay more taxers for fewer bike paths.
40 Million People for 6th largest economy in the WORLD. You can cut and dice and divide that number any way you want and every old poor neglected Californian looks 10x better than any other citizen of any other “red†state.
And remember the solidarity payments California makes to support the other (red) states. If we can have those back, thank you and we could all drive Bentleys to work.
Sammy: Can you concisely define “solidarity payments” and state exactly how much (in dollars) California pays to “red states”? Thank you.
Sammy: And remember the solidarity payments California makes to support the other (red) states.
No such thing as “solidarity payments.”
But if there were, I’d rather make “solidarity payments” to my fellow Americans (in whatever state), than to illegal alien criminals (in whatever state).
As far as taxation, you get what you pay for. In CA, there is cleaner air, cleaner beaches, more bike paths, parks than any other state. Most people prefer not to live in a Republican slum state while being poisoned daily.
the above only applies to the rich, for the poor, our parks are filled with homeless drug addicts, gangs, drugs, not safe to take children, crime, shootings, etc. public parks are essentially homeless/drug society living quarters.
I think Sammy means that the great Democrat state of CA sends far more in to the US government in Federal taxes than it gets back.
CA is not a leech state like most Red States that leech off of CA’s Federal tax payments.
Just look it up on Google.
In other words, Democrats generate far more income than any Republican states so they pay more in Federal taxes.
Just like I said about the Great Republican Kansas experiment. Democrat States grow the economy and generate Federal Income far more than Republican States
I think Sammy means that the great Democrat state of CA sends far more in to the US government in Federal taxes than it gets back.
EVERY state sends more to the federal government than it gets back.
This is because much of the taxes are spent on federal employees in Washington, or sent to foreign nations or NGOs, or to overseas military bases, or overseas intelligence operations, etc.
What, you thought 100% of tax money sent to Washington comes back to the states?
And the other states are not “leeching” off of California taxpayers. Many (most?) Californians don’t pay ANY federal taxes. And the super rich in California would not be super rich without access to the other 49 states’ consumers.
Bob,
This is the nice CA environment you tout so much:
http://theeconomiccollapseblog.com/archives/california-is-being-overrun-by-rodents-and-in-this-case-we-arent-talking-about-the-politicians
Bob love your replies to Flyover it would be great if he kept on flying to Texas and stays , flyover you must be among the super intelligent ( a legend in your own mind) as you insult everyone else and their capability and obviously not smart enough to know the difference between both parties is subtle at best their basically clones and I can clearly remember Ronald Reagen giving amnesty to 3 million illegals in 1986 a Republican president ,right ! I keep track of 2 markets where I have lived in the past and may return .
Texas gulf coast and N. SLO county In Ca at this point I see both markets in decline though the Texas market is showing larger markdowns ,the SLO is showing almost 80% consistent markdowns and the RE market at least in Texas and Ca. is in decline and I believe will fall much further but this is from someone who is lived outside the US for 10yrs.,2011 -2012 was the temporary bottom the next bottom will be in the next 3-5 yrs.
and similar to 2008-2012 drop likely 50-70%.
Two of the worst presidents in history Bush and Obama one created a bubble in RE with no effort to stop the ongoing corruption in the RE industry and the other bailed out all the banks , wall steet etc. and created one huge financial bubble with real rates near O% and now we have the worst president in all history the orange idiot ,who if has his way would bring about negative interest rates.
His history is one of piling on debt and defaulting (bankrupt 6x) and not paying taxes ,he claimed 1 billion$ in tax losses for a 10 yr period 20 + yrs. ago .
So flyover Republican or democrat there is little difference big government is always a problem and yes Ca. has its problems but is more accountable than any other state about the environment and liberal or conservatives wake up their equally good qualities in both but again I am not super intelligent like flyover just likely hell of lot more experience in and with life !!
Richard S., it does not have anything to do with my intelligence, but observations. Texas is almost blue and Austin and the other big cities in Texas are completely blue. I don’t like Texas because of the high property taxes and most of it humid weather.
I did not vote for Bush and I did not vote for Trump. I agree with you that Bush and Obama were the same – globalists. I agree than more than half of GOP politicians are republicans in name only (RINOs). While I don’t like any on the left (all globalists/communists) I like some on the right (i.e. Ron Paul). Over all, I don’t like most of the politicians. I like that Hillary lost and I like that Trump brought the issue of illegal immigration to the top of media conversation.
I hope that clarifies my views.
Richard S has inspired me to continue.
So, when Bob is confronted about CA, he deflects to TX. Ok; that means you admitted that what I said are facts.
Really??? You sound like Fox News. I only mentioned that on item 5 with regard to beaches. Never trust a Republican to offer an honest rebuttal.
You can’t hide the largest poor population behind billionaires. In feudalism you also had lots of equivalent billionaires today, but that was not progress – it was a sick society. CA looks more and more like a feudalist society of few super rich and all equally poor. If you praise the CA politicians for that, then you admit how sick are the liberals who campaign on redistribution.
So CA has created the most wealth in the US and you are against this? It also supports the most Ag in the US which has the most low paid workers in the country. Do you want food wherever you are holed up? CA provides it under its great Democrat leadership.
CA is the only state I know that is working to raise minimum wage and solve the extreme wealth disparity seen in Republican states. The Great Republican Kansas disaster experiment made the Koch Brothers wealthy. Everyone else fled.
You also praise the liberal politicians for environment and the air is full of smog (yellowish greyish color) the streets of the big cities full of homeless and feces (thousand and hundred of thousands) with all the health consequences of such a “clean†environment.
And the Republicans have a solution for the Homeless? What is it???? All I hear is crickets.
CA is the only state I know of trying to deal with this. The Republicans are just loading buses of homeless out of town. This looks like how FDR got elected in 1930. Given enough voters who are homeless or soon to be homeless due to Republican policies in the US, Bernie or some socialist will be elected in 2020. Republicans have no solutions to this. Democrats have solutions.
You blame poverty on illegals but the CA social democrats support and invite them in their sanctuary state and cities. Trump offered them help via ICE and walls but democrats refuse that. They like to see that mass poverty because it reminds them of the good old days of feudalism where they are noble and the rest are servants.
Extreme Capitalism is what the US is becoming. Just like the final rounds of Monopoly. A few .1%ers own most of the wealth in the US. The rest are homeless and out of the game. Fortunately, a bit of socialism will solve this problem just like it did when FDR was elected. Vote Democrat to Make America Great Again.
BTW,
You really should read Steinbeck’s “Grapes of Wrath”. That describes America today.
Socialist FDR was elected shortly after.
Third World Country
https://www.nationalreview.com/2019/06/california-third-world-state-corruption-crime-infrastructure/
and yet Newscum still blames Trump for everything. Check out his twitter feeds-the comments/responses from people though are very hilarious!
Speaking of foreigners and real estate…
Minneapolis (home of Ilhan Omar) has done what SB50 would have done in CA. No more single family neighborhoods anywhere in the city will be allowed. Any property can have an apartment built on it. And the kicker on top of it is the city has set aside $50M to build “low income” housing. Which essentially means that every single property owner in the city could potentially have a Section 8 building next to them.
I’d pay good money to see the reaction of upper middle class white women who vote Democrat (cuz Trump said a bad word once) find out who the new neighbors will be. These women talk about diversity all day long, but live in high end exclusively white neighborhoods. Not for long…..LOL!
That is so true. It’s great how some of these well to do libs preach diversity until they are forced to deal with it on a personal basis. Their leafy suburban neighborhoods and top notch schools are anything but diverse. Upsetting the status quo sure as hell would scare a lot of them to death. How about setting up a homeless shelter or undocumented immigrant shelter in their neighborhood…not gonna happen!
Don’t say anything against these CA democrats because you might trigger Bob and his sensitivities. He thinks that the way the democrats lead CA is best thing ever.
There’s a word for that now: https://www.urbandictionary.com/define.php?term=NIMBYcrat
The Democrats are the anti white party. They will do anything they can to destroy whites. Not only they prohibit them (especially males) from all government jobs, but also from the universities in the highest demand (you may have 4.0 GPA, max test scores, hundreds of volunteer hours and the best of references – no interview). Now they want to “diversify” all white neighborhoods to crash the values of their homes for which they worked their whole lives. They think we don’t have enough diversity. They will continue to “diversify” the US till all cities look very homogenous like those in Africa and Mexico and all whites will live under the same conditions (only with public transportation, of course). Then they will fly to New Zealand or other private islands and leave us to solve the mess they have created. Of course, if we state the truth, we are “racists” or “deplorables”.
I can’t wait for Bob to have a housing section 8 next to his house so he can enjoy the blessings of his democrat politicians. People should be able to eat the fruit of what they sow.
You mean the Pedo Marxist Jews that use their third world pets as shock troops to destroy civilized society. They sit on the school boards mandating trans perverts have free rein, they sit on planning commissions that mandate third world squalor and limited use of private cars. Don’t believe me? Check your local area, guaranteed the cancer has taken hold.
Now you started it, Flyover.
This blog is becoming ZeroHedge.
I thought you were a Libertarian? Do you really want Section 8 housing on one side of your house and massive strip mining on the other? That is a Libertarian dream! Unlimited property rights.
That is not a local Democrat government stance. Democrats believe in zoning. Republicans and Libertarians believe in unlimited property rights.
Oregon and Minneaplois, both run by Democrats almost exclusively have banned SFH zoning. CA is about to with SB50. Republicans are non-existent in CA govt.
Bob’s conclusion: It’s Republicans who want to get rid of zoning laws.
LOL. Never change Bob.
Bob, I am not a true libertarian. There are lots of things libertarians support and I don’t. I am a constitutional conservative with libertarian leanings. The closest politician to my views would be Ron Paul.
I believe in zonings. I believe in property rights, but not to the detriment of the neighbors. I am not a philosopher; I am a very practical person and I like to see common sense. I believe that the big government (especially when they have an evil agenda), can be more destructive than the libertarians, even if the libertarians have some good points in what they say.
The policy of importation in millions from third world countries, the policy of allowing tens of millions of illegals in this country (via sanctuary cities and states) is very destructive to US and especially the middle class. Trump speaks against it (common sense) and the democrats supports this illegal immigration (verbally and in practice). The fact that white males (except those well connected at the top) are discriminated in all prestigious universities and all government jobs is a FACT. It does not have anything to do with ZeroHedge; I felt it countless of times in day to day living and my son, too. The conservatives believe that admission in jobs and universities must be merit based (no discrimination based on percent melanin in your skin) – you work hard, you deserve it. The Chinese are not whites, but they work hard and have a higher percentage than whites in universities with no added points and no help. That means that there is no discrimination in universities (like the democrats claim) against blacks or hispanics – just against whites (I am talking about those places in high demand like medicine or dentistry or Ivy League).
Flyover, this is not entirely true.
“That means that there is no discrimination in universities (like the democrats claim) against blacks or hispanics – just against whites (I am talking about those places in high demand like medicine or dentistry or Ivy League).”
According to you, the Democrats are discriminating against just whites. That is not true. If you believe your argument, there is discrimination against, Whites, Asians, Indians, Muslims, Pakistani’s Israeli’s……… None of these have any special scholarships into universities.
My point is that the scholarships and aid are going to the poor. It may be that African Americans and Hispanics have a higher poor population trying to attend college. Why is that? It was only 40 years ago when a white person could not date or marry a Hispanic or African American in some states without being jailed. It was only 50 years ago when the same could not go the same restaurant or bathrooms. I was alive during these times. I may be old but it was not ancient history. It all happened during our current generation.
Yeah, affluent liberal shills love to inflict diversity on the general population, but panic if they have to deal with it first hand. For the ones that aren’t politicians, it’s rather perplexing why they would support the liberal agenda.
As a resident of a MInneapolis suburb, I can confirm that this is happening and was very contentious issue. Even worse, the city council is currently considering passing an ordinance that would prevent landlords from denying applicants with a any criminal history or evicitions more than a few years old, or those who have no/bad credit history. “everyone deserves a chance” mentality at its best. Now the SJW women you reference above will be able to live next to Section 8 filled with tenants who have stalking/assault convictions and there is nothing the landlords can do about it. FYI, this is why I live in a suburb. Could never live in MPLS proper. Absolutely nuts government.
I love you…..
I’m in favor of adopting something like Vancouver did with a tax on vacant properties. You want to park your criminal money in American real estate? Fine. But you need to pay us a vig. Even if it means real estate values drop a little, I’d rather have that than foreigners controlling such a yuuge chunk of housing. Hell, a foreigners can’t even buy property in Mexico within 50 kms of the coast. Yet any Mexican (or Chinese) can buy beachfront homes up and down California. As usual we (Americans) are the doormat of the world.
A while ago RE shills and cheerleaders were telling us the Chinese are comingn. They are going to buy up all the houses. Better buy now before you are priced out. Now we are learning the Chinese are fleeing the market in droves. I said it many times before, RE shills were saying the exact same things about California in the 80’s about the Japanese.
Now, that inventory is increasing sharply and foreigners are fleeing the market it’s time to eject. Sell now or be stuck with an overpriced house for another decade.
The surge in Chinese investors in Canada and the US coincided exactly with the crackdown on corruption in China. Now that all the big players have been arrested or identified, the exodus is over.
The Chinese are not fleeing. They are buying less. LOL That is what ZH does. They manipulate the facts. The Chinese still spent $13 Billion. I would love to be in the an industry that has a $13 billion potential sales.
I bet there are at least 100 million Chinese that would buy a home in America if all they had to do was jump over a fence. The Chinese government is cracking down…it is not because they want to flee the U.S. market.
Exactly. Wait until the Chinese Pooh Bear Xi announced bring back that stolen money or your families get executed. That’s when the fun starts!
If this article is true, what about this?
Even cool, Bay Area housing market is still hot
The typical buyer in Santa Clara County needs $614,000 down to keep mortgage within budget
https://tinyurl.com/BayAreaHousingBubble
Good news and hopefully this continues. Americans are sick and tired of their communities being bought up by Chinese investors. I have lived in So Cal my whole life and cannot believe what they have done to cities like Chino Hills, Ca. Which of course is reflected in many other communities in our state. Keep up the good work President Trump!
I know someone who lives in a nice place in Eastvale, and the house behind them is owned by Chinese investors, and sometimes is empty and sometimes temporarily occupied.
Used to live in Walnut. Sold house for $1M to Chinese 3 years ago and got the heck out of there. Hated living there. Was chinatown.
the places that Chinese buy are few and far inbetween. The Chinese obviously LOVE San Gabriel Valley. It started decades ago in LA when the wealthy Chinese who built their fortunes in ChinaTown started moving out of DownTown LA to Monterey Park, San Gabriel, Rosemead, Covina, Arcadia, South Pasadena. Then they started buying in Hacienda Heights, Diamond Bar, etc. Here where I live on The Westside… hardly any Chinese. I bet there arent many Chinese in SouthBay or the Valley. But of course, LOTS in Irvine also.
Then why are new home prices in Irvine continuing to go up?? Who are they selling to? I walked into a new home community in Irvine and it was obvious they weren’t interested in talking to me because I wasn’t Chinese.
Going up?
Are you kidding?
I follow zip 92603,92604,92612,92625 closely.
With very few exceptions, for at least the past year, every MLS posted with a price change has been in the downward direction.
If you want to get some peace and quiet these days, go to an open house, cause nobody’s there.
Last year I posted the percent of foreign buyers in CA (~ 40000 out of ~250000) and less than half of those were Chinese (maybe ~40% as I recall). Chinese were the single largest group though. Data is just as the Dr says, with foreign purchases dropping since 2013. Little wonder. This isn’t Trump (2017 first year) but the lack of good buys and increased regulations on currency transfers (e.g. bitcoin). 2013 was the last year with good deals (my Daughter moved up to a bigger house that year).
Thank you for your interesting post. This issue has been getting a lot of coverage, but I really liked your graph showing the real drop off in foreign buyers. I assume that the 2019 was an estimate based on the first six months? I wonder if the Chinese anti-corruption crusade has also made the Chinese a little concerned about standing out by buying US property.
“Chinese anti-corruption crusade”
In a Communist country that has traded the Communist economic system for one more typically Fascist, corruption is what the government defines it to be. If the concentration of power and wealth in private hand starts to threaten the establishment’s control, all of a sudden there is corruption. Having a place to run to in an emergency makes it harder to control someone. Look at what is going on in Hong Kong with the Quisling government trying to institute extradition to the Mainland.
I went to a loooot of open houses this weekend. Saw a biker who was riding his bike through the neighborhood. He was the only visitor and he lives in the area, he’s not looking to sell or buy. Besides that I didn’t see anybody. Obviously, there were the realtors. Lol. All of these houses had multiple price drops already. Crash baby crash 🙂
The music has stopped as some posters said already.
What?!!?!??? Americans can’t afford to buy here anymore. Now foreigners stopped buying too????!????? Are there still crazies out there who don’t think this is going to be 2008 all over again?!?!???!!
In the news … San Fernando Home Prices hit record high, and inventory is dropping. So much for the Chinese story.
https://losangeles.cbslocal.com/2019/07/20/san-fernando-valley-home-prices-hit-all-time-high/
Don’t confuse perma bears with facts. They have a story to tell.
That must be fake news. Millie has went on record many times saying home prices are crashing and inventory is skyrocketing.
There will be no tanking in 2019, you can take that to the bank!
LOL desperation is setting in now among the REIC shills
If anything the desperation is on the perma bear side. Every week you guys come up with some new doomsday scenario. It’s a lot like the MSM and Trump. How many times has the MSM pronounced the end of Trump? LOL
OC Register columnist Lansner is continuing his series on the “housing shortage”. Headline: ” Housing shortage ranges from 2.5M … to zero ”
He says ” These shortfall guesstimates are very much ‘it depends on who you ask.’ ”
He references the McKinsey Global Institute report of 2016 based on 2014 data that is tied to Gov. N’s push for new housing.This report estimates that 3.5 million houses need to be built by 2025 to meet needs. And the report estimates that 1 million houses will be built in that time span. Yet a report from Freddie Mac stated that there is a nationwide housing shortage of 2.5 million for ALL 50 STATES! The McKinsey estimates were based on statistics for older population states NY & NJ, both older shrinking states. The Embarcadero Institute has used other state comparisons to come up with much lower figures.
In my opinion, population growth estimates can vary all over the place from shrinking to growing at the poor end of the economic spectrum due to a potential flood of
Mojados.
Lansner cites the CA Dept. of Housing & Community Development estimates a shortfall of 1.1M not 2.5M! Lansner also scoffs at a building industry estimate of one new home for every 1.5 jobs created. Embarcadero asks “if that standard is true, what happens when California has its projected 19.4 million jobs in 2025? This ‘standard’ translates to a statewide need for 12.9 million homes. Well, the state already has 14 million residential units. So zero shortage.”
The ridiculous housing prices here (including rentals, so not just a speculative bubble) show there’s a huge shortage of housing. Basic supply and demand, dude.
Fair Economist: housing prices are clearly not contingent solely on overall supply and demand. In approximately 2009-2012, housing prices crashed, despite demand for housing being very similar to 2008. It’s not like there was some mass exodus of the general populace of the U.S. Therefore, it’s entirely feasible to have a housing crash independent of overall housing demand, especially considering that there are is a limited pool of buyers in an economic downturn.
The most annoying thing is when you have a listing but the sellers refuse to accept the market has shifted. Some are so delusional that they won’t even acknowledge comps. Fine, watch your neighbors sell and ride the market down…….everyone is an expert nowadays. I have 20+ years experience selling and buying real estate but people think they know it all because of some website article or commentary they read. This all reminds me a lot of the previous downturns. History doesnt necessarily repeat but it rhymes.
Negative YOY prices 🙂 bye bye bubble
https://wolfstreet.com/2019/07/18/housing-bubble-2-lost-its-mojo-in-the-san-francisco-bay-area-house-prices-drop-8/
But but but San Fernando Home Prices hit record high!!! Chinese love the San Fernando!!!
San Fernando data >>>> all other data. Lol
Most on Wall Street expect the Federal Reserve to cut the federal funds rate by 25 or 50 basis points on July 31. I say this is a dumb move as the FOMC continues “quantitative tightening.†(QT – draining liquidity from the market).
I say wait until the fourth quarter after QT ends. The Fed will drain $105 billion from the banking system in the third quarter.
Last week the Federal Reserve drained another $7 billion from the banking system. The balance sheet totaled $3.81 trillion on July 17, down $692 billion since the end of September 2017.
Fed Balance Sheet
Fed Balance Sheet FEDERAL RESERVE
Fed Chairman Jerome Powell has a goal to shrink the balance sheet to $3.5 trillion. When quantitative tightening ends at the end of September, he will likely be $200 billion shy of his goal.
The Federal Reserve should not be executing monetary policy with an eye on the stock market. Let the fundamentals and the technicals drive stocks higher or lower. Fed-Speak simply causes unnecessary market volatility.
The Federal Reserve is trying to increase inflation, which is a stupid mandate given the rising cost of living on Main Street, U.S.A.
Flyover,
You and I both agree on this. Trump does not agree.
The Federal Reserve should not be executing monetary policy with an eye on the stock market. Let the fundamentals and the technicals drive stocks higher or lower. Fed-Speak simply causes unnecessary market volatility.
It is like a good movie drama in slow motion. We’ll see if politics and Wall Street drive the Fed.
Next up…”California property values crater, residents blame Chinese investor’s exodus. We didn’t see it coming”.
Weak RE market in California points to recession
https://www.sacbee.com/news/business/article232996597.html
No it doesn’t. Don’t you even read the text?
Read it again, but read the text, not the misleading headline!
All data points you obtain on any RE related article show a recession is coming – fast. The real estate crash cannot be avoided. We see it every ten years after a highly inflated market run up.
I love these stats! “Inventory ‘skyrockets'” was the last one. Little known fact that the little increase in inventory still doesn’t do anything to the supply side of the market. Houses are still being bought and sold in little time. Now it’s “Chinese investors pulling back” never mind their impact on the housing market is so great that a 36% pullback (if true, I highly doubt it) does nothing for the sell side. They’re still buying in droves! And there’s no end in sight to it quite honestly. Look at Hong Kongs property bubble and tell me when that’s popping…not anytime soon! Our prices are a steal compared to theirs! The fact is that Chinese investors are DYING to dump their money into our market but limitations on investments are coming from their government not because they’ve lost faith in our market.
And since we’re talking about stats, consider this: foreclosures and delinquency are at an ALL TIME LOW! You can’t have a crash of everyone is paying their bills right? Now let’s see when this mystical crash will roll around that seems to magically happen every 10 years…
This guy new age seems to be in full denial. Now they tell you that skyrocketing inventory and fleeing foreign buyers have no impact to the market. Next they will tell you that negative YoY prices are only temporary. And the red hot selling season was delayed and will start in fall this year. There is no end to the bullshit they will tell you. It’s highly entertaining….this crash is going to hurt a ton of people.dont cry later and tell us we didn’t warn you…
Exactly right. You can’t have a true “crash” without an underlying problem such as delinquency uptick, credit crunch, mass layoffs, etc. The market may correct in an amount that reflects a realization of 2-3 years of irrational exuberance but so long as employment is humming and credit is damn near free, this won’t be more than 5-10 percent. Housing is a necessity, there will always be a demand at a given price point. People cannot substitute for a roof over their heads.
And? Corporate debt is at an all time high, especially in China. One shock to the system and you will see that delinquency rate shoot up like a rocket. Any wonder that the past 10 years have been aligned with central banks keeping interest rates artificially low? Look at the Japanese real estate market and you will understand the potential for 30 years of deflation.
give it 10 more years when all the “millenials” baby boomer parents die in the house they are renting and they are forced to actually support themselves, with their low wages, high rents, and student loan debt, a lot of people will not be paying their bills, most likely it will be the student loan as housing and cost of living come before a “bill” thus their credit will be ruined, with no purchasing power……..its really hard to tell whats going to happen in the future, but we all know that “something” definitely is going to happen and it doesnt look good, I dont see housing prices crashing and your average person buying a home…I see things getting worse, the people owning less, and the bankgsters owning more. God Bless America!
In 10 years millenuals’ parents will all be dead? Millenials are in their 20s and 30s, which means their parents are in their 40s, 50s and 60s. In 10 years these people will be in their 50s, 60s, 70s and very much alive.
LOL But nice try, I like the outside the box thinking by perma bears.
Mr Landlord I may have been off on the “10 years” but the rest of the stuff still will come into play, and millennials will be paying their rents and living expenses before their student loan debt. Oldest age Millennials were born in 82, meaning their parents are in their late 60’s, 10 years would put them in their late 70’s….so perhaps 15 years would be more of a correct statement as that would put them in their mid 80’s and average age lifespan in the US is 84 years. 10 years vs 15 years is not a big difference, so I really wasnt that far off. Nice try at trying to down play it though Mr Landlord, lol. Man I know see what Mili is talking about regarding whatever nonsense RE shills or whatever yap about.
Better sell now and get out before you have to sell at a loss. Mark my words.
And I will quietly go about my buying the worst house on the block, repairing the holes that Millie’s companions have punched in the walls, new paint-flooring-and all the rest to make that house a desirable rental unit for Millie and his friends. I learned long ago that ” Positive Cash Flow ” is a wonderful thing. Think long term . I will buy the older home, not the home’s of today that are built with spit and bubble gum. My homes are the one’s that are used to exert peer pressure on the neighbor’s to maintain their properties. And Yes, I do treat the management of these properties as a JOB ! Life is Good .
Great job picapoi! Accept my post as a confirmation that you are doing great. Please keep buying overpriced crapshacks in the neighborhood (worst house) and renovate them. More rental units means more supply means rents are stable. Unfortunately I can only rent one cheap apartment at a time and my landlord already gives me a gift (never increased my rent). What you are doing is a win win. Somebody got to do it and you think you are smart by doing it….it couldnt be better!
….Cash flow positive (rofl). Sure! Whatever numbers you put on your little spreadsheet will make it cash flow positive! Maybe one day you look up the hill and see me jumping in my pool while you clean out the crapshack down on the low-income street. Difference will be…..I understood opportunity costs and bought houses at the bottom of the cycle while you bought crapshacks at the peak….I will smile and you will say but but but but long term I will be cash flow positive!
Picapoi,
Amen! Positive cash flow is what it’s all about. Appreciation is a nice bonus, but it’s never a consideration for me. The perma bears never seem to understand that.
We bought in the poor part of the South Bay in 2012. Our house payment was $800/month less than renting. Even if prices go down 80%, we still come out ahead over renting.
Looking at our small town of 30000 people, there are 30 houses for sale, most in escrow. I walk in our neighborhood a lot and for sale signs last about a month or so. Only house I know that lasted longer was $50k over priced.
The space race has made the north part of the South Bay a hiring Mecca.
Well, well well. If the WSJ is saying it…things might be toast sooner than we think. Better get on board with those “Zuck bucks”….
https://www.wsj.com/articles/u-s-existing-home-sales-decreased-1-7-in-june-11563890555
There are so many new names on this blog with their comments!
Compared to other blogs out there, I think this is in general, a kinder and gentler blog.
I think that is great!
Well, as long as they are not all aliases for Mr Landlord and Our Millennial.
I can’t speak for Millie, but I have never posted here under any other name.
HEARTACHE for the perma bears. June new home sales up 7%.
Womp Womp
Housing Bubble 2.0 All Ready Started, But You Know This As You’ve Seen It All Before.
“Largest Correction Since The Great Recession”: U.S. Home-Buying By Foreigners Sees Record Plunge
https://www.zerohedge.com/news/2019-07-22/largest-correction-great-recession-us-home-buying-foreigners-sees-record-plunge
Our perma bulls never read data or articles. Just headlines and then they immediately deny the facts.
This is a beautiful article describing the crash
“Purchases of U.S. homes by foreigners has dropped by 50% over the last two years, according to the Wall Street Journal. The figures come as a blow to top end real estate markets in places like Miami and New York.
Less than $78 billion in U.S. residential real estate was purchased in the year ended March 2019, which marks a 36% decline from the $121 billion in the previous 12 month period.
The pullback is resulting in price cuts in many coastal cities and causing new condos to sit empty. â€
JamesJim,
We have seen this all before from 1990-2000 when housing prices remained flat for a decade while inflation ate away at the real value of the housing prices.
Over a decade, the real value of housing prices were flat, while the inflationary adjusted value of housing prices dropped 50%.
I’m old. I’ve seen a lot before.
Bob,
You are correct, house prices in the 1990s were largely flat for a decade.
The interesting thing was that mortgage rates were in the 10% to 15% range in the 1980s.
And dropped to 7% in the 1990s.
been a while since i posted here. great site of course. San Diego, Houston, Denver, Orlando and I’m sure more than few others are not in free fall. We’ll see how aggressive the US Fed will be shortly…obviously the more aggressive the better.
California shows price reductions left and right. All you need to do is set up a Zillow or Redfin search. You will get bombarded with daily price reductions. Experts see a bottom of 50-70% below peak prices. This is in line with what we expect to see during the normal ten year boom and bust cycles. Right now we see skyrocketing inventory, declining prices, declining sales. They are building everywhere. We already see stable to declining rents which is another indication. Interest rates continue to go down and hasn’t brought back buyers interest. We will probably see 1-2% interest rates for a 30year mortgage along with a sharp crash in prices. That will be the time to buy. Now is the time to get the fuck out of housing – fast. Rent in the meantime. Renting is such a bargain compared to highly overpriced house prices. You don’t want to be caught during the bust and lose all your equity. Dont repeat the mistakes previous generations have made.
Housing bubble just got bigger! On a national basis, medium home prices in the 2nd quarter increased 6.4% Y/Y and 10.0% over the 1st quarter medium prices. The crash certainly hasn’t started on a national basis, and bargain home prices are getting further and further away in the future. All of those on this board may die of old age before home prices drop significantly.
Insane how pending sales keep crashing despite lower interest rates.
The crash is coming fast
https://www.marketwatch.com/amp/story/guid/CA54B182-AD4B-11E9-9DE8-AFC97186E038
Only in your wet dreams.
It really is like a dream come true. I am bombarded with price drops daily by Zillow and Redfin. Everything the RE cheerleaders have been telling us was wrong. The exact opposite is happening. The 50-70% crash is coming in a hurry.
In the same Marketwatch article: : The median selling price in June rose 4.3% to $285,700 from a year earlier. Prices have risen in every month for more than seven years, keeping lots of people from jumping in.
Read: lack of inventory plus healthy demand equals higher prices. Good try though Milli.
“Lack of inventoryâ€
Rofl….i know, the RE cheerleaders wish for it. In reality though….inventory has been skyrocketing…is there a neighborhood near you where you don’t see houses for sale? Exactly….now, if we would have a shortage in housing why do these houses sit for 6-12month? Why do they have multiple open houses and price reductions? You can post your lies all day long it doesn’t change the facts. Market is turning quickly. Denial won’t help just makes it more fun for the rest of us.
If the Fed is poised to drop rates at the end of this month, and FAANG tech cos. are buying up So. Cal. commercial RE for office space, then RE here probably has the wind to its back.
Just open up the sails and enjoy the ride! UP,UP,UP.
Bull crap, rates have been going down and buyers demand is going down as well. We will never ever see higher rates again. Look at Japan/Europe.
I encourage everyone to follow Calculated Risk Blog, who nailed it with market timing last time.
https://www.calculatedriskblog.com/2019/07/new-home-sales-and-recessions.html
“Although new home sales were down towards the end of 2018, the decline wasn’t that large historically. As I noted last Fall, I wasn’t even on recession watch. Now new home sales are up slightly year-over-year, and 2019 will probably have the most sales since 2007. No worries.”
Millennial will be wasting time for years here.
He has already wasted 3 years and countless hours saying the same thing over and over again.
Lol
My net worth has been going straight up. RE shills who bought recently will be screwed as the market is turning fast. Soon we can buy 50-70% off!
calculatedrisk is the man. He has been following housing even before the 2008 crash. He knows his stuff.
In my neck of the woods, inventory is still very low and I know many people looking.
Also, the Chinese bought a lot of property but so did Wall Street. They then collateralize these loans into MBS with the Governments blessing. They have no risk in the game and are one of the reasons there is very little inventory for the 3 bd room starter houses. Wall Street bought as much of that market as they could.
I was in Portland recently. I was told that above $500k, there is a lot of inventory but it is impossible to find something under $500k and it gets snapped up in a heartbeat.
Three years of being wrong and counting is starting to get at Millennial. He hopes the mindlessly repeating the same mantra will make it come true. Maybe a pair of ruby slippers to click together would help as well. For someone who is making a killing in digital assets and living very comfortably in his “gift” of an apartment, it is curious why he spends such an inordinate amount of time on a blog that is, by definition, geared toward real estate owners. How long did it take Jim Taylor to give it up? Millennial might be trying that record.
That’s right, the last 3 years I have proven the RE shills wrong. They told us there is no inventory. Instead inventory is rising sharply. They told us prices won’t come down, instead we see price reduction left and right. I made a killing by investing and not buying RE at the peak. Now I just sit back and wait for a nice crash. You can’t lose by winning.
100% agree! Even if I buy during the next crash that doesn’t mean I am going away. Love the blog and enjoy making fun of the RE cheerleaders that have been wrong for so long now. During the crash they will all disappear until the market picks up again.
Milli, there are NO “sharp price reductions left and right” in any meaningful sense.
There are reductions in ASKING price. But houses are still selling for more than they did several years ago.
A reduction in asking price is not a crash.
If X buys a house for $1 million in 2015. Asks for $2 million in 2019. And sells for $1.5 million. That is a $500k reduction in asking — but it is not a crash.
Yes there are price reductions. Left and right. In California. Something we haven’t seen the last few years. Something, the RE shills told us won’t happen. A year ago they told us house prices will skyrocket. Nope. Price are down YoY in the Bay Area. Yep, the crash is on its way. Just be patient. You were one of those who denied that we have increasing inventory-a couple years ago. Now you don’t deny it anymore. It’s a slow adjustment to reality for some.
Hubby and I are living with my parents. There is enough space. We have been thinking of moving out but don’t see a reason. If market crashes and we can buy 40% off I think we would be fine with it.
You must be married to Millie. God help you.
That’s so pathetic. Seriously, living with your parents when married??? I get you do that for a month or two getting on your feet or if you move to a new city or whatever. But as a long term housing solution? That’s just sad plain and simple.
Living with your parents is bad enough. Living with your INLAWS? Christ almighty! I like my inlaws, they’re cool and we get along great. But I’d rather be homeless I think than live with them full time.
Your “hubby” is hating life, but being a milenial doesn’t have the balls to tell you.
When I married my wife, I made her a promise: we would never live with either of our parents. We’d sooner live in our RV. Pathetic is an understatement.
Reading all the post of married millenials living with their parents is pathetic. Old enough to do adult things such as get married and make babies but not quite adult enough to live by themselves. I would be embarrassed if I had adult kids do this, actually I would never allow it in the first place.
Guys, I think the disconnect is that the Married adults here live in California! Or in any other area with a high cost of living. In California it’s well respected and desired to live with your parents. It’s a fantastic way of saving during a housing bubble. Now, if you live in flyover country this is no longer true. House prices and rents are cheap in flyover country. No reason to live at home.
In flyover country I would not applaud any married adults for live with their parents. But for Californians it’s the best thing since sliced bread. Keep living at home. RE shills are actually jealous they can’t live for free at their parents.
Awesome Ashley! Please keep posting here! You are doing the exact right things to save money! Living with your parents is the single best thing you can do during an extreme housing bubble! Once the economy collapses you move out to a nice house at a decent price (50-70% off). I would move back with my parents or Inlaws in a heartbeat but then my commute to my tech job would be too long.
Smart gal! Doin da same. My chick and me livin with my folks is awesome. We live in a share and don’t care society. Why wouldn’t I share with them their big house? Back in the olden days homes were cheap. Supposed to pay over 2k for a mortgage, thanx-but-NO-thanx! I can share it for free, so why gonna change?? Asked my dad who just retired if I can share his car as well. We are working through this. I am half way to 40, don’t see any f’n reason to move out. Btw, chick works and I do too. 40h a week…. Gonna inherit all that good stuff!
My wife and I live with my parents. We are not planning on having kids so it won’t get too crowded. Living with my parents allows us to save money to retire early and take nice vacations in the meantime. Why go through all that extra stress just so you pay it all to the banks and seller? You got to make it a bit easier on yourself and get ahead by saving on rent and mortgage.
Living with my wife’s parents is amazing. We save $2000 in a month in rent, the fridge is ALWAYS full, and sometimes I take my father in laws car and don’t fill it with gas. In exchange for that I have to deal with some very minor discomforts. Occasionally there is a fight and we have to skip a few free family dinners. Also sometimes my father in law walks around the house in his underwear. I should also mention when I blast my music in my bedroom it sometimes feels like I’m a teenager all over again. But you know what?, we are going to inherit all of this in a very short 30 years !!! We have no ambition to accomplish anything for ourselves, and why should we? All we do is show off our travels and an occasional fancy meal on social media and live high off the hog of my in laws…. admittedly with those very minor discomforts. The other day my mother in law even tucked us in before bed. My wife sometimes asks for gas money and we really save.. but nothing beats the full pantry of food.
LOL at millenials. You guys are living with your parents to save money in order to buy $1200 phones and $20 avocado sandwiches and $9 coffee. Or you could have a $200 phone and make sandwiches and coffee at home – your own home.
This generation is so screwed up. Seriously messed up.
The good news is Gen Z seems to have corrected course and the millenial insanity was a weird one time fluke.
Actually, we never ask for gas money. Both of us work full time and make decent money. We consider ourselfs independent but chose to play this smart during the housing crisis. I have to admit, the in-laws in underwear is totally true. To be completely honest we all have seen each other in underwear. Oh well, its family and it’s not much different from seeing each other in bathing suits. Living with your in-laws is more like having roommates but you don’t pay for the cost of living. I think more people should give it a shot before being so opposed to it. It really has advantages that peers don’t have.
Lived with my parents for 4 years after graduating. Paid off student loans and invested the rest. Had enough of a downpayment to buy in 2015 for 800k despite the naysayers. House is now sitting at 1.2 mil according to Redfin and a similar house down the street just sold for 1.32 mil. If I had to rent during those 4 years, I probably would be in the same boat as my fellow millenials.
Pro Tip for the yuutes reading this: Major in something useful like business or engineering. That way when you graduate you don’t have to live with your parents. On the other hand majoring in SJW Studies, leads to living with your parents.
Toni Not A Buyer,
“the housing crisis”, what??? What housing crisis? It’s called renting. If you can’t afford rent you can’t afford to live here. It’s that simple.
Living with your in laws is like living with roomates? Living with roomates sucks, but your in laws?
Hey I totally get living with parents to save money when you just graduated from college. Even if that is painful when you really want your own freedom that can work out very well.
Living with your parents when you are married? Good lord man.
It certainly depends on the relationship with your parents or in-laws. After living with them for x number of years you may save up to 100k in cash. That’s totally worth it to us during these Bubble years. If this severe bubble ends, we will move out and buy our first home in California.
Don’t you hate those awkward moments when two headboards are thumping at the same time? So weird, right?!
It’s sometimes hard enough to live with your wife when you are married.
But to live with your wife and her parents? Good luck with that one.
Very smart to live with your parents or in-laws. Crash=you buy, no crash=save money while living for free with parents or in-laws. Wish I could do it but they live a bit too far from my tech job.
These comments are ridiculous. One day the people of the United States (yes it’s only you) will realize multi generational living is the rule in human civilization and your need to break your families apart is the exception. There is nothing wrong with children and parents living together their entire lives.
For obvious reasons there is nothing more that RE shills hate than millennials living with their parents.
RE shills top sales pitches are:
Prices can only go up – buy now or be priced out forever.
Rents are going up
We have no inventory and they are not building more land
Obviously, these are all blatant lies. However, some poor souls believe these lies and end up buying at the worst time (at the peak/now). The sales pitches don’t work on people who live for free with their parents. That’s why RE shills hate it so much.
The only way to combat people living with their parents is to make it look like it’s a bad thing. To me, that is very encouraging. I might move in with my in-laws just because it pisses RE shills off. 🙂 unfortunately, my commute would be longer AND my cheap apartment is a gift compared to buying. When the market crashes you will have rental parity again and buying makes more sense.
When my wife and I got married just after college in the mid-80’s we had a combined income of about $50K and our rental 2 bedroom apartment was $700/month or $8400/year. The apartment was “high priced” because it was only a 5 minute walk to the beach. It was about 17% of our combined income.
The same apartment is now renting for $3.5K/month or $42K/year. I guarantee you that a Millennial couple that just graduated from college is not making $350K/year.
If I was a Millennial today, I would be living at home also until this craziness goes away.
LOL at Millies living with their parents. Pathetic doesn’t even begin to describe it.
My first apartment out of college was $1600/mo, which at the time and place was not even that much relatively speaking. That same apartment – literally the same place in the same building – is $2600 today. The building got a nice renovation too, and the pool area was totally redone, looks a lot nicer than when I was there. In 20ish years the rent increased by 3% annually on average. Boo hoo!! Poor millenials, you’re so much worse off that previous generations!!!! LOL Give me a break.
Adjusted for inflation I’d be in the exact situation today were I just starting out as I was 20 years. Only difference is I wouldn’t be whining the way today’s 23 year olds whine.
It’s also why 20 years later I’m a millionaire and today’s 23 year olds will be broke and living with mom and dad when they’re 43.
“Living with your parents is bad enough.”
I can’t get my commission or rent checks if you do that….whos gonna pay for my leased BMW or Benz????
This $3 million Santa Monica townhouse has been sitting for 8 months: https://www.redfin.com/CA/Santa-Monica/1032-3rd-St-90403/unit-104/home/17229898
No price drops.
Why is it still listed for $3 million? Doesn’t the seller knows that it’s way overpriced?
Does the seller seriously expect to get this amount, or is there an ulterior motive in keeping this townhouse on the MLS at $3 million?
Some people are just dumb when it comes to this. I’m a car aficionado and always look around for interesting things to buy. There’s a car on Craigslist that has been for sale for at least a year. It’s a nice ride, but it’s listed at $15K above its true value. Nonetheless, the thing’s up time after time. Old listing expires, a new one is made. Not a 1 cent price drop. And I’m sure in that time a lot of people must have made offers at the true market value. But the seller has the “I KNOW WHAT I HAVE” mentality and won’t budge.
One example >>>> All data
https://www.mercurynews.com/2019/07/26/bay-area-home-prices-sales-tumble/
Looks like “Mr. landlord” brought high and now have negative cash flows….pity LOL
What a million dollars buys in Brentwood: https://www.redfin.com/CA/Los-Angeles/1120-S-Barrington-Ave-90049/home/6760840
A 1924 shotgun shack, 828 sq feet.
I love the listing: Adorable storybook home with tons of Charm and white picket fence to top it off. … a cute backyard for those warm summer nights. … Can this house get any more adorable?
A “storybook home.” I guess that’s realtor talk for tiny house.
The “shotgun shack” doesn’t look that awful to be honest. I could see that working if you were a bachelor (and did some repainting). I’m from OC, so I have no idea how nice that area is, though. I will agree that the price is ridiculous.
I know that part of Brentwood. Horrible location, because Barrington Ave from Sunset to Wilshire has horrible traffic. At night the sound of cars speeding by. at rush hour, a parking lot outside your front door. But after all is said and done, it will sell to some trust fund baby who wants to live in SpentWood.
That’s a house? I thought it was a She Shed.
Here is a NOLA shotgun house at the northern edge of the French Quarter. Smaller lot, same approx size house on market over a year at $565K.
https://www.realtor.com/realestateandhomes-detail/1312-Dauphine-St_New-Orleans_LA_70116_M87758-74286?view=qv
Here’s a double barrel shotgun 3 blocks from the St Louis Cathedral 40 days on the mkt for 749K. Almost 1800 sq ft (2 units) on 2800 sq ft lot.
https://www.realtor.com/realestateandhomes-detail/809-Dauphine-St_New-Orleans_LA_70116_M79817-06787?view=qv
Would you say shotguns give you more BANG for the buck in NOLA?
Now, this I do NOT understand and never will. These New Orleans shotgun double houses were built for poorer factory workers, dock workers, and other working-class types, and New Orleans has a murder rate comparable to Baltimore, St Louis or Detroit, all cities that make Chicago- and Los Angeles- seems like low-crime paradises compared. The surrounding neighborhood is not particularly desirable, and neither are the local schools. The weather is the worst- unbelievably hot and humid from March through November.
I mean, I can see why a tiny house in Brentwood, California, cost $800,000. Brentwood is one of the most desirable places in the Los Angeles area, a wealthy west-side area with low crime and beautiful scenery, in a place with the best climate in the country. And it doesn’t cost anymore than a small, 145- year-old “fire cottage” in Chicago’s hyper-expensive Near North Side.
But New Orleans? I just do not get it.
Laura L:
These examples are in the French Quarter. That is the part of NOLA that doesn’t flood. It has the old buildings, the clubs and fancy restaurants and the country’s most interesting street party (if you’re into that sort of thing). More like West Hollywood than Brentwood, but pricey by NOLA standards.
Subprime 2.0 is back. No credit, no problem! Buy a house!
https://www.zerohedge.com/news/2019-07-24/subprime-20-mortgages-now-available-borrowers-without-credit-scores
No credit score is not the same as a low credit score. No credit score means you do not use credit. Is this really a bad thing? If you have no use for loans or credit cards does that make you less likely to pay your mortgage or more likely?
The RE shills last hope is rate cuts. That’s confirmarion that the market gets weaker and weaker and the only way to keep it alive is to drastically reduce rates. I could see the market gaining steem if they cut out 2%. I would consider buying if the market tanks and mortgage rates are in the 1% range. 🙂
Remember buy low and let the dummies buy high. History always rhymes.
Millie, the housing bubble just got bigger in June! On a national basis, medium home prices in the 2nd quarter increased 6.4% Y/Y and 10.0% over the 1st quarter medium prices. The crash certainly hasn’t started on a nationwide basis, and those bargain home prices are getting further and further away in the future. All of those on this board may die of old age before home prices drop 20-40%.
How can home prices be rising the fastest rate in 4 years if there is a crash going on? Apparently, lower 30-year loan rates and a loosening of lending standards are working.
Gary, that’s fake news for California. In the Bay Area for instance YoY prices are negative. To think that we die of old age before we see a 20% correction is one of the dumbest things I have ever read on this blog. It totally makes the list next to buy now or be priced out forever.
Don’t confuse Milie with facts. He has a narrative to push.
Using a national stat does not prove that millenial is wrong about rising inventory and falling prices.
RE is local, and the coastal CA market does not move in sync to flyover country
I think both of you are right because the new tax deduction limits were designed to hurt markets where million dollar houses are concentrated. Combine that with the drop in chinese buyers in CA, and RE refugees fleeing to other states raising prices there. You both are right about your particular markets
SBSparky is spot on
Hi Millie ; sorry to leave you hanging…I refinanced one of my ” CRAP SHACKS ” yesterday after providing a copy of a 2 year lease to the mortgage company. Yes , I painted the exterior a color of the tenant’s choice ( within reason ) and even after moving into a 10 year loan at a lower interest rate , I got a YUUUUGE increase in the
” Positive Cash Flow ” and the tenant will pay off the loan for me in a decade instead
of 28 years. A free and clear title on one of my homes is more valuable than a price reduction that you are expecting. Remember Millie , Rinse-Lather-repeat. Life is good.
Cute! He painted one of his crapshacks! Keep up the great work, somebody got to deal with the crapshacks! We have a lot of them! You are mistaken with one thing though….buying low is ALWAYS better than buying high. During the bubble you want to invest in a smart way and don’t tie your cash to overpriced crapshacks that you can’t sell during the bust. The next crash will be epic. Don’t lose your shirt while I get the beautiful house for half off.
There is nothing more RE cheerleaders hate more than a declining market. It’s obvious their only response during that desperation is anger. There is nothing else they can do. Myself and others were right, nothing goes up forever: Every bubble pops at some point. The music always stops when the last sucker bought high. The RE shills keep reading the same data but instead of having an open mind, they tell themselves THIS TIME IS DIFFERENT.
It’s going to end in tears for many who purchased at the peak of the market….. just like every time
Immigration of legal or illegal labor is a given for all of us as our agriculture system requires it regardless of cost. However, reading on how this is really a one generation job for most of these people I can only expect automation to fill that gap. Ag work is hard on the body especially if you were to do this all summer long and bending over to pick/move the crops.
Ag is the pillar that allows for us to do other things such as tech, real estate, racing, etc… You take that away I can guarantee that society will look a bit different or perhaps we would switch to an automated system faster than we could imagine.
That day is coming.
“Immigration of legal or illegal labor is a given for all of us as our agriculture system requires”
Yeah if we don’t have illegals working the fields the price of tomatoes may increase 0.2%. LOL. That’s the argument the open borders crowd falsely uses. I know in California no white people work in agriculture anymore. But go to the hinterlands and you’ll find plenty. Same with working as maids, busboys, car wash, fast food, etc. Plenty of Americans will do the jobs liberals tell you “Americans won’t do” if given a chance.
And the weekend again! The sun is shining, the AC running, the gym is packed and it’s time to go on an open house tour later. Love looking and NOT buying….lol! Crash=purchase, no crash=investing and saving by not buying high! Brilliant 🙂 I can keep doing this for years! Many many years.
Milli: The sun is shining, the AC running, the gym is packed and it’s time to go on an open house tour later. Love looking and NOT buying
I don’t believe you. Nobody goes so many open houses not intending to buy.
This is SoCal and traffic is bad, even on weekends. To fight all that traffic, just to see houses that you have no intention of buying … who does that?
You’re either lying, or your life is truly empty.
Millie’s life is full. He lives for this.
His wife, however, that’s quite a different story.
I often learn something when I go to open houses. I ask lots of questions and I like to share my knowledge. It’s sometimes even a debate with the realtor. I don’t see it as a waste of time. I get to see lots of neighborhoods and houses. It’s not a lie, i look forward going to open houses. You can still go surf, go to breakfast with friends and hit the gym. Or have a date night. Open houses are from 1-5pm or 11-2. It Depends.last weekend i actually hung out with a realtor, chatted and we watched the baseball game at his open house. For over an hour, nobody else came. Foot traffic is absolutely dead. The best time to see open houses and don’t show any serious interest is now!
Another productive weekend Millennial !!!
Take a selfie for us at the gym, and make sure to post incessantly later about the 50-70% drop that happens every 10 years even though you can’t back it up with any chart or data EVER !!!! Just keep saying the same thing over and over again.
I will venmo 15 bucks for some avocado toast for you to fuel you for yet another productive weekend !
Keep on, keeping on… you got this !!
I’m 95% sure Millie is really 63 year old and owns 9 houses. This is performance art,
63 🙂 how do you come up with that? Deduct over 30years and you know how old I am.
You might be surprised how many places that Chinese money went. There’s a very rich suburb out west of Boston called “Southborough” that had a lot of Chinese buyers in the last 15 years. There are some other Boston suburbs that also did.
Jonathan Lansner’s Bubble Watch series in the Orange Co Register is on foreign buying. His numbers are from March 2018 to March 2019. 22000 foreigners bought in CA down 41% from 2017 to 2018. Nationwide, 183000 foreigners bought, down 36% from the previous year. California is not too far off the national trend in my opinion.
The CA total statistics for the year to March was 372000 sales, down from 442000 the previous year. So 30% of the drop in purchases was due to lack of foreign buyers. CA was 34% of all Chinese purchases nationwide, including Hong Kong and Taiwan. Nationwide those purchases fell 51% to 19900. This put China tie with Canada for top US foreign buyers. CA had only 3% of Canadian purchases, making CA #5 in Canadian deals. Here are other countries’ nationwide deals:
UK 5200 (down 42%)
India 15900(up 21%)
Mexico 9700 (down 52%)
Lansner’s conclusion is that foreigners no longer see bargains in US RE. And he doesn’t see them returning anytime soon.
I’m wondering if anyone has an idea about the Indian anomaly in the US RE market?
That’s just the best news!! No one left to buy! Millennials won’t buy. They are either too broke or too smart to buy at the peak.
Milli-Milli-Milli ; you still don’t get it. Those Millennials that are either “too broke or too smart to buy at the peak” still have to live some place. AND I will happily provide a freshly painted ” Crap-Shack” to them at a fair rental price. Learn to play the long game and not instant gratification. After all, I am a Proud Provider of over-Priced, Sub-Standard Housing for the Poor-Downtrodden People of No Consequence. I will happily let those individuals pay off my ” Crap-Shacks” for me and to finance my future retirement. And if you are too dense to understand the sarcasm of this post, then maybe you should stay in Mommies basement with your Teddy-Bear and Pablum.
It’s true, millennials don’t repeat the mistakes previous generations made: Buy high and foreclose later. Why buy crapshacks at the peak if you can buy a nice house when the market crashes? There is not a single reason for buying at the top. Sure, somebody got to clean up the crappiest shack on the block but we have that guy already: picapoi.
Gotta thank you for these clear stats showing that foreign buying has dropped dramatically. I’m just wondering: What purchase of total California RE purchases are made by foreigners?
What I wrote was this:
“from March 2018 to March 2019… 22000 foreigners bought in CA down 41% from 2017 to 2018”
“The CA total statistics for the year to March was 372000 sales, down from 442000 the previous year.”
So 22000 foreigners bought in CA out of 372000 sales. That’s about 6%. The percentage was higher a couple of years ago.
Housing Bubble 2.0 Already Popped- Exodus: Foreigners Stop Buying South Florida Homes, Sales Crash 50%
https://www.zerohedge.com/news/2019-07-25/exodus-foreigners-stop-buying-south-florida-homes-sales-crash-50
Housing Bubble 2.0 Already Popped, STOP BS Yourself! Homebuying in Lake Forest, Mission Viejo, Rancho Santa Margarita, San Juan Capistrano drop 7% as countywide sales tumble to 5-year low
https://www.ocregister.com/2019/07/09/homebuying-in-lake-forest-mission-viejo-rancho-santa-margarita-san-juan-capistrano-drop-7-as-countywide-sales-tumble-to-5-year-low/
LA home prices – still increasing but slowly.
I saw give it 1 more year, then the unwinding begins.
https://la.curbed.com/2019/7/26/8931996/los-angeles-median-home-price-record-high
The median price of a Los Angeles home rose just half a percentage point between June 2018 and last month. But was still enough to break an all-time record.
According to a new report from real estate tracker Corelogic, the county’s median sale price was $618,000 in June, $3,000 above the old record—set 12 months earlier. Across all of Southern California, the median sale price for homes and condos was $541,250, also an all-time record.
A year ago, LA home prices were climbing as much as 8 percent annually. The market has slowed considerably since then, but so far home values have plateaued, rather than fallen.
The 1 percent bump in home prices across the region was the lowest annual increase in June since 2011, when the Southern California housing market was still mired in a recession-era slump.
Housing Bubble 2.0 Already Popped- Before You Cheerleaders breakout your pompoms, this is ALL based on “pending home sales were expected to increase” and a batting average of 1 for 17 ” Pending home sales broke a 17 month losing streak” and throw in a 21 year home ownership low, don’t get to excited.
Pending Home Sales Jump In June, Break 17-Month Losing Streak
https://www.zerohedge.com/news/2019-07-30/pending-home-sales-jump-june-break-17-month-losing-streak
I say this over and over….renting long term is financial suicide.
Seattle Times
July 29, 2019
“Starting around last summer, much of the Seattle-King County market seemed to hit a pause in rent increases. So many new apartment buildings had come on line that supplies were finally catching up to demand. In dozens of neighborhoods, rents leveled off or actually began falling.
But that pause is now history. Aside from a few pockets of oversupply — found mostly in high-end neighborhoods such as Belltown and downtown Seattle — the regional rental market is swinging back in favor of landlords.
In Seattle as a whole, the median rental price across all properties in June was up 3.3% year over year, to $2,569, according to Zillow. In Bellevue, median rent climbed 3.9%, to $2,835, in the same period, while in King County, the median rent jumped 3.6% over last June, to $2,469.”
Renting is a path to riches during a bubble. You save tons of money by not buying high. when the bubble pops you can buy RE 50-70% off. It couldn’t be easier. Being a RE cheerleader is almost like a mental disease. Simple math is already way over their head.
If that is your strategy you missed the boat. That already happened in 2010-3.
If that is your strategy you missed the boat. That already happened in 2010-2013. We’ll see if history repeats itself this soon after one of the worst recessions in recent history.
Here is the thing, if there is a crash and in hindsight we reach the bottom, you won’t know it. You will be bearish until the market recovers. This is why you missed 2010-2013. And then you will lament how unsustainable this entire economy is and cite permabear media sources like Wolf Street. Meanwhile life passes you buy.
I am okay with your life choices, but what benefit do you gain by being a permabear and celebrating a crash? This means you, your wife and a lot of your friends will also be experiencing some sort of financial pain due to a job loss. I don’t get your pessimistic mentality.
If we have a chance to meet up, I want to get you a beer.
Why are you talking about Seattle? This is a SoCal blog.
That constant 3% annual increase in rent is nothing short of murder when you look at the long term (10 or 20 years). A long term renting plan should be avoided at all costs, especially in places like socal. Do so at your own peril…
That constant 3% annual increase in rent is nothing short of murder when you look at the long term (10 or 20 years).
My monthly HOA fee jumped about 20% last year. It’s an older building (built in the mid 1960s), and it needs upgrading.
Also, California property taxes jump 2% every year.
Not saying renting is better. But one way or another, you’re going to pay for housing.
Rofl- another joker who can’t do basic math.
Rents are dirt cheap compared to buying. Ever heard of rent-vs-buy? Btw, my rent has never been increased.
Millie, I was on this blog many years ago pounding the table regarding buying at or near rental parity. Some people listened and others didn’t.
Rents (especially in the desirable areas) have literally skyrocketed over the last ten years. Here in the South Bay, 3/2 shitboxes that trade hands for 1M are fetching around $4000/month rent. If you have a decent downpayment (20-30%), you aren’t far off from rental parity. This is not a first time buyer area, people have equity from previous sales or have two 6 figure incomes. With that being said, anything priced within reason sells.
I too wish there was a 50% off sale soon, that will only happen with a trigger that devastates this area (massive job loss recession, huge natural disaster, terrorist attack of epic proportions, etc). Keep on saving that money and keep convincing the wife that we’re “almost there.”
Blankmind,
You have never shown a rental parity calc because we would pull it apart. You are a known RE cheerleader who doesn’t provide data but always tells us it’s a good time to buy now.
Millie, you got a 42% off sale, just getting started, 50-70% coming, lmao
The Los Angeles Times in California. “Grammy-nominated singer Michael Feinstein is bringing his historic home out for an encore in Los Feliz. The Tudor Revival-style mansion is back on the market for $14.95 million — down 42.5% from the original asking price of $26 million.â€
😀
Just imagine if the original asking price were 100M, then it would be a 85% off sale. Millie, time to call your agent. 🙂
Don’t confuse a drop in asking price with a drop in sales price relative to recent comps.
Less people own…..why would they….it’s way too overvalued during this mega bubble.
https://www.ocregister.com/2019/07/30/homeownership-in-los-angeles-orange-counties-2nd-worst-in-the-u-s-falling-to-near-a-3-year-low/
Less people buying means prices will come down….less foreigners buying means prices will come down…..more inventory and less demand means prices will come down, tax changes in blue states makes ownership less attractive which means prices will come down….
Still thinking the fed will save the day?
Seven cities see home prices heating up again, but Seattle sinks, according to S&P Case-Shiller
https://www.cnbc.com/2019/07/30/sp-case-shiller-may-2019.html
The crash you boys are waiting for is not going to happen.The reason for this is very simple, salaries and extra income for couples has reached parity with mortgages .Rents are above what a typical mortgage would cost.
I have friends (live in couples,DINKs,single kid etc.) who work for banks,school districts,city governments, IT, hospitals etc. who purchased along with us in the last two years.
All of them have purchased homes in SoCal between 500-900k where the mortgage is 25-30% of thier combined income. Even if one person loses their job from a recession or otherwise they will still not be forced into foreclosure. There are a few others who are in the market ready to buy and currently renting who are enticed by the low interest rates on 30yr loans.
After being on this blog for a while, we got tired of the increasing rents and in 2016 purchased a 2200 sq ft, 1/4 acre lot home in Woodland Hills for 680k. Plenty of friends followed us and have been buying around SoCal now around the same price range. Point is the current housing prices are not driven by easy credit or investor money. They are a fundamentally a new generation (millenial here,born 1984) consuming housing space as and when it comes on the market
Yawn….another RE cheerleader who bought high and hangs out on a housing bubble blog telling us that the boat was missed or buy now or be priced out forever.
Buddy, I am sorry you bought high. But that’s on you. I will share once I buy at the bottom 🙂
My brother in law, born in 1986, bought recently as well. His reason was “I’m tired of paying rent”. He’s single and I don’t see him ever having kids. Still he bought a 3 bedroom home in the ‘burbs with a big yard for his dog. That was another reason, owning a dog in an apartment is a huge PIA. He also wanted a second dog. Hard enough to find an apartment that allows 1 dog, but multiple dogs is impossible.
Despite what the media would have you believe millenials are buying homes in the same pattern everyone else before them did.
I have always liked Woodland Hills. I think it is underpriced … that is my guess. That is one of the best locations in the valley … in my opinion.
Woodland Hills is clearly overpriced by 40-50%. You can easily buy half off in that area – soon.
I just moved from Woodland Hills. It used to be a nice city (like many places) but the homeless are taking over. Property crime is way up. There are RV’s parking all over the streets and drug addicted pan handlers at every corner / freeway exit. Ventura blvd looks like a dump full of Vac/Sew repair shops, chandelier stores, and other odd stores that must be money-laundering fronts for the Persians and Armenians.
The straw that broke the camel’s back was when the news did a story on the drug addicts living in the bathroom at the park only a few yards away from the playground where my son plays.
The 101 is a nightmare. Everyone has moved up to Agoura or Calabasas (if you can afford it). Why the hell would spend $1M+ to live in WH when there’s nothing to do and it’s not even a nice suburbia anymore.
I live in Woodland Hills. Hottest part of the valley. And I don’t mean ‘hot’ in a good way.
Whatever, Woodland Hills still seems pretty nice south of Ventura Blvd.
I agree, WH seems real quiet, boring, and hot in the summer.
VictorFromTheValley, you say salary/income for couples has reached parity with mortgages. Which city/state are we talking about here? I think this statement is just too general and not necessarily true…at least for West Los Angeles and neither is your statement that rents are above mortgages….in Los Angeles. Woodland Hills is probably a different story….Its a bit further away from the epicenter of jobs / population density and prices have been relatively lower as long as I can remember.
Further, if someone missed the boat and didn’t buy in 2016 or before, does it mean that they should buy now in 2019 now that price increase has already slowed significantly?
@SDMan I was talking about SoCal in general excluding the outlier areas.
If you are a couple not doing McJobs but in one of the professions i mentioned the average pay is conservatively between 85-120k per year (banks,school districts,city governments, IT, hospitals,police etc)
Double that for married couples and the biweekly household takehome pay after tax averages between 6000-9000.
If you dont have a student loan or even if you do a 600k mortgage on a 650-800k house provided you saved enough for downpayment between ages 24-32 is 3200-4500 a month! (assuming interest on 30yr to be 3.5-4.5%) Thats half of one individuals biweekly pay after taxes.
The apartment we were living on Ventura blvd was a 2+2 and we paid 2800 as rent. Does not make sense to rent anymore if you plan to setup roots in the city you like.
It’s the same story everywhere…Portland,Salt Lake city,Utah,Austin is the few cities where I am seeing this pattern through friends and relatives.
The other cities like Seattle and South Bay Area are highly inflated because local patterns in dissproportionate income are causing real estate to get blown up.
West Los Angeles is purely a niche area to be considered for income parity to real estate prices. It is nestled near the hippest expensive areas of Beverly Hills and Santa Monica that gets lot of movie studio crowds where income is above average.So it is again an outlier like Seattle and South Bay Area to be considered for income parity.
I would consider Burbank or Glendale to be more in line with the rental parity argument.Check out the rents vs property prices there.
This time is just awesome. I am getting bombarded with price reductions in my email inbox – daily – and there is sooo much for sale that you can’t keep up. New construction is building up lots of inventory as well and they keep upgrading and reducing prices as well. Once the panic comes to the market this ship will sink like a rock…..50-70% discounts are on the horizon.
18-23% correction across the board in SoCal. That’s about it for this current bust. Come back in 10 more years for the next correction, and keep the faith, Millie. Make sure the wife remains under your hypnosis. She’ll need it.
New construction…uhh where ? In SoCal the NIMBY crowd has made sure no new construction takes place…apartment and condo construction is at an all time low.
We went to check out new homes in Porter Ranch and West hills with a friend who is in the market. That gas leak town has prices in the high 800s-900s for a 3+3 home. Same for Pulte homes in West Hills which are in the high 900s-1300s..these are super close to the Santa Susana field labs where radiation occurred not so long ago. Inventory is super low in these areas so there was a no negotiation policy at the builders office.
Come outside your dream zone Millie…you might be on fixed low rent, high income comfort zone but much of the people are not. I only see people buying at the current prices just to get the high rents off their back and create some equity.
They are building everywhere in SoCal…..on my short commute to my tech job I drive by at least 5 new communities….they keep reducing price and add upgrades. Have been visiting and following for several month now.
VictorFromTheValley, apartment and condo construction is at an all time low? Um, what are you talking about? There are tons of apartments coming online…at least all over Los Angeles. They are profitable due to increasing rents and lack of housing affordability. It’s single family starter homes construction that are low! Again, I’m speaking about Los Angeles. I don’t know where you speak of.
People on this blog claimed that the home prices in Porter Ranch would be devastated by the gas leaks. Others have spouted that an earthquake will devastate home prices in LA. Its simply not true, look at home prices in LA (or for example Porter Ranch) after a disaster. Prices dip then buyers come marching in at full pace and prices are quickly restored to a normal price increase.
“NYMBI crowd” LOL. Once you own a home and care about how your neighborhood looks, you’ll understand. I’m not opposed to apartments nearby per se. I’m opposed to the people who live in apartments being nearby. Renters don’t care about their surroundings, and have no respect for their neighbors. Over time apartments, get run down and the people in them gets worse and worse. Without exception. Ever see a 50 year old apartment complex that is NOT decrepit? Today’s “luxury” apartments are tomorrow’s Section 8 ghettoes.
That’s why nobody wants it in their BY (back yard).
Sya it aint so, what happened to all that equity they built up over the years ???
“‘Real Housewives of Orange County’ star Gretchen Rossi’s home that she shares with fiancé Slade Smiley, may be auctioned off for allegedly being behind $26,000 in payments. According to court documents obtained by The Blast, a lien on the reality star’s home will be auctioned off to the highest bidder on August 26. The documents note the unpaid balance owed on the mortgage by Rossi totals $431,529.79.â€
Writing is on the Wall- http://housingbubble.blog/?p=2159
Housing Bubble 2.0 Already Popped, that sound you hear is the equity leaking out as prices DROP!
Yeah let’s make our long term financial decisions based on what reality TV star idiots do with their money. Because as we all know, TV stars always are smart, intelligent people who make excellent life decisions. LOL
Donald Trump?
The fed is cutting rates and the futures market is predicting up to 2 more rate cuts this year. Many are talking about a total of .75% for the entire year.
Not sure how housing prices can fall when you need less of a monthly payment to buy the same house.
Better yet, what nobody is factoring, is a race to the bottom. Even Millennial mentioned a rate of 1%. Right now in Germany a fixed 30 is 1.85%. As of last week I could get a 300k loan at 4% for $1512. If interest rates drop to 1.85%. I would be able to buy almost a $400k house for $1532.
So we should not rule out lower interest rates like in Europe. It could happen if the next step for the FED is NIRP.
Remember…Central banks would rather have 8% or 10% inflation over any type of deflation. With all the debt in the world, just a small amount of deflation could crash governments.
ru:
Unfortunately, big Tech gives a deflationary twist to the economy by lowering the cost of manufacturing, and increasing processing speed into smaller & smaller packages. Imagine buying a mobile phone for $50 that is much superior to one costing ten to twenty times as much only a generation ago. Well it isn’t imaginary. That and another round of debt defaults if we have any kind of recession. Next time around may be mostly consumer debt and student debt rather than RE debt.
I agree with you JoeR.
Ad in the fact that money is getting so cheap to borrow. We are printing to prosperity.
MMT is somewhat pushing that Government can borrow to infinity.
Bloomberg said the market is pricing in 4 more rate cuts.
Germany 10year bond just went negative. Swiss was already negative. Japan is zero or negative. Thus you have to pay the bank to store your money. I am thinking cash under your mattress may make sense soon or buy some gold.
Germany 30 Mortgage rates are at 1.85%. A German 10 year mortgage rate is .74%. Who can say if the U.S. could see those rates in the future?
Most of the U.S. consumer are in decent shape. Mortgage debt is not out of this world like Bubble 1.0 Neither are consumer finances.
Sure, Auto Loans are high but they can walk from them.
Student loans are high…but that debt will somehow be forgiven…or a mass majority will be. It will be one of the next stimulus.
Remember…the FED does not want deflation.
In the So Cal So. Bay area I’m not seeing any inventory buildup. The homes are being sold at about the same rate new ones come on the market. The lower priced ones in more desirable areas are going faster, and the luxury tiers are not increasing prices as much but are still moving. No evidence of increased distressed sales. Some pockets have small price reductions, but nothing earth shattering. New tech jobs in the area and beach close desirability seem to keep demand stable. Pretty balanced market, albeit expensive. No cracks, crashes or any other calamities going on. Smooth sailing, so far.
Of course you don’t. Your commission checks depend on you not seeing it.
https://www.mercurynews.com/2019/07/26/bay-area-home-prices-sales-tumble/
I visited three Open Houses today — all townhouses in Santa Monica.
One Open House was dead. I was the only buyer. The realtor greeted me, then ignored me. To my question, she replied, “I don’t know,” not even looking at me. She was instead focused on her cell phone.
But another Open House had tons of people. Many families. It was also the NICEST and CHEAPEST townhouse.
It once again proves that a NICE property, reasonably priced, will attract many buyers. And when I say reasonably priced, I don’t mean a 50-70% price drop. I mean $1,695,000 for a two bedroom, plus loft.
The third townhouse had one couple leaving.
The DEAD Open House: https://www.redfin.com/CA/Santa-Monica/811-19th-St-90403/unit-2/home/58300600
The CROWDED Open House: https://www.redfin.com/CA/Santa-Monica/1106-21st-St-90403/home/8121426
The one other buyer Open House: https://www.redfin.com/CA/Santa-Monica/853-21st-St-90403/unit-101/home/40200058
Rumblings in other parts of the webz say the downturn is imminent. There is an asset bubble, and it’s popping soon.
I’m glad I didn’t buy this year. I’m hoping for 2015-2016 prices (no hope for 2012 prices).
Housing Bubble 2.0 Already Popped, Repeating a Lie Over and Over Again Will Not Make It True.
A report from the Home Buying Institute on California. “Last month, we reported on the situation in San Jose. House values in that California city are dropping steadily. But the ‘damage’ is not limited to that one housing market alone. Similar trends are occurring throughout the region. There’s no other way to say it, and no reason to sugarcoat it. The Silicon Valley real estate market is crashing — at least from a price perspective.â€
The Mountain Democrat in California. “Our real estate market has been so good for so long that the recent slowdown in home sales and price dip has caught many sellers and a few agents by surprise. Buyers are always the first to sense when the market is changing. That’s likely because they are constantly on the internet searching for homes and keeping track of sales activity. Sellers are the last to admit the market has changed. They continue to base their pricing on where the market has been. Buyers make decisions based on where the market and prices are headed.â€
“Looking back, the market has favored sellers. Looking forward, maybe not so much. The median listed price for a new home in El Dorado County is $735,000. We have more listings above $1 million than below $300,000. In 2001 48 percent of all young adults, 25 to 34, were homeowners. Last year only 40 percent. This market isn’t going to bounce back anytime soon. It’s the new normal.â€
http://housingbubble.blog/?p=2162
Millies Winz again, 48% Off
From Chicago Business in Illinois. “A palatial mansion in Winnetka that former Democratic candidate for U.S. Senate Al Hofeld first listed for sale in 2012 at $9.4 million came back on the market on July 29 after almost three years off. The asking price now is $4.9 million, about 51 percent of what Hofeld wanted for the home seven years ago.â€
This sale is not indicative of a nation-wide trend, but a local fashion.
Strange though it is, Chicago’s beautiful North Shore suburbs, which have been for 100 years considered to be the choicest locations in the area, are now out of style among young, affluent, trendoid- type people, even though the North Shore suburbs are absolutely gorgeous, with beautiful homes in heavily wooded areas on the north lake front, with top-tier public schools and very high levels of public safety- there is NO crime whatsoever in Winnetka, or Lake Forest, or Kenilworth. However, these areas are now regarded as square, dull, and fuddy-duddy.
It’s the neighborhoods on Chicago’s Near West and Near North sides that people will pay the huge premiums for now. You will easily pay over $1 for any small single family home in Lincoln Park or Lakeview, or Wicker Park or Logan Square, if you can find one that hasn’t been torn down to be replaced by a narrow house on a squeazy lot that costs $3M to $5M, in an area where you have to send your kids to private schools that often cost $30,000 a year. Every expensive new home in the area is being built in these neighborhoods, with a number costing $10M or more.
All I know is that in San Bernardino County, my home is still increasing in value and homes are still selling around my neighborhood.
Don’t believe your own lying eyes. Instead believe Millie’s experiences at the 26 open houses he visits very weekend.
LOL
I just read the latest Mortgage interest rate drop to 3.7% for the 30 year on Friday will allow 8.2 million homeowners refinance mortgage by .75%. Adding a lot of descrisionary spending. That will also allow home buyers to buy a house for $45k more while not increasing their mortgage payment.
Housing Bubble 2.0 Already POPPED – LMAO San Francisco, CA Housing Prices Crater 28% YOY On Plunging Rental Rates As Inventory Floods Market
https://www.zillow.com/san-francisco-ca-94109/home-values/
“Super rich” moving money from stocks to real estate: https://www.marketwatch.com/story/the-superrich-are-selling-stocks-buying-properties-and-keeping-cash-ready-2019-08-05
I’ve said it once and I’ll say it again. We’re entering a new age of fuedalism. Get in now or be serfed out forever.
New age,
Yawn! you are basically saying “Buy now or be priced out foreverâ€
That cheap sales pitch is over a decade old and we know how it ended last time. Why even be here and try to convince us that we need to buy now? I tell you why: it would be very boring if there are no RE cheerleaders left! So please stay and tell us your buy-RE-and-get-rich-quick stories.
We all have to remember that each area is not the same. The demand for homes in silicone valley will always be higher than that on San Bernardino. This means you will have bigger booms prime locations after all its location location lcoation.
If someone is waiting for a 50% off sale for on a beachfront property, then grab some popcorn as you are going to be waiting a lifetime.
This Sherman Oaks house indicates there is NO CRASH coming: https://www.redfin.com/CA/Sherman-Oaks/3538-Alana-Dr-91403/home/4902118
* Listed … $1,497,000
* Sold … $1,652,500
I live near Culver City and have watched my neighborhood transform the last few years. Many of the homes purchased have been purchased and remodeled and flipped with a $100K-$300K profit for the flipper or simply the new owner has remodeled prior to move in. Further, most of the junky warehouses along the eastern edge of Culver City: (where Jefferson, La Cienega, National, Obama Blvd all converge) being transformed into high end creative space.
Here is an article on the next wave of development in CxC
https://www.bisnow.com/los-angeles/news/state-of-market/la-state-of-the-market-99192
let alone the megadevelopments
https://www.ivystationculvercity.com/
https://urbanize.la/post/cumulus-begins-rise-la-cienegajefferson-station
and smaller developments that replace warehouses with GenXrs
http://5830obamaboulevard.com/
My investors and I bought a piece of absolute garbage in CC earlier in the year in an off market deal for close to $800K and put about $150K into it and it just closed early July for $1.7M. I don’t know what it is about that area but it’s a gold mine. Is it overpriced? Absolutely. But I don’t make the rules I just invest in them. That’s what I’m trying to get into people like Millie’s heads…you can sit out the market and just let money pass you buy while you yell at the top of your lungs “50%-70% off any minute now!” or you can jump in and swim in the gold. Yes, I get it, these prices are disgustingly overpriced but there’s no indication that it’ll crash any time soon so why stop? I could’ve got stuck with it before I had a chance to sell it (boo hoo) but do you know how much money I raked in, in the last 3 years as I chuckle at Millie’s posts? Enough to offset at least 10 bad investments, I’ll guarantee you that.
Rofl – anyone can make up numbers here. If you were so successful in flipping crapshacks you would not try so hard to convince avg people in buying high. I call BS….it’s more likely you are one of those flippers who are panicking about the rapidly changing RE market. We are seeing higher inventory and tremendous price reductions across the board. This is the second year in a row where RE shills were dead wrong abou the spring selling season…they promised a “red hot spring selling season†which did not happen….everyone with a brain sees the market is changing quickly. You will always have these RE cheelreaders who have over leveraged themselves by buying highly overpriced crapshacks. They are in heavy denial right now. No data chart, article or commentary can change their mind. They have to tell themselves the market will never crash….otherwise they lose their shirt. Denying reality is the only way for them. Sad, but it happens every ten years.
If you can’t provide a link, it’s complete BULLSHIT
“Every ten years” I always get a kick outta that one. It’s OK Millie you can invent whatever scenario in your head to make yourself feel better about constantly losing out on prime RE opportunities. It’s probably eating away at you year after year of missing great money and you won’t come to terms that you’ll probably not get your “50%-70%” off until prices peak at double today’s in ten years. I just don’t understand your investment strategy but hey to each their own.
Correct, in this boom and bust environment we see the ten year cycles. The expansion is nearing its end and we are overdue for a recession. A typical price decline in California is about 50-70% drop in RE values. If you buy now you are screwed (financially) for almost forever. Maybe in 30-40 years you will break even.
Post the link to this home so we can verify the sale amounts or STFU. So sick of these RE cheerleaders coming in here acting like they’re making all this money in real estate. Such BS. No one with any sense would join and post in a real estate bubble blog if they truly believed in real estate right now.
Speaking of CxC (Culver City)
news out today
Whole Foods will open in the new Cumulus project at intersection of Culver City / West Adams / Baldwin Hills.
And we all know what that does to home prices
https://www.forbes.com/sites/zillow/2017/06/19/living-near-whole-foods-can-boost-your-homes-value/#72cb241b2a64
RU82: “Remember…the FED does not want deflation.”
Did they want deflation in 2008 ????!!!….
@Flyover
Your right. They did not want deflation in 2008. So congress and FED quickly got together and injected $900 Billion into the economy. I recall about that time too… people like Mish Shedlock and others were saying we were going to get several years of deflation and it was going to be rough. It would feel like the 1970s. All we got was 2 Quarters or 3 quarters of deflation….not even one year and they were calling it the Great Recession.
Thus, since the time when FED went off the gold standard in 1930s. We have only had around 8 to 10 quarters of deflation in 90 years or 280 quarters. So the odds any type of deflation with Fiat money is less than 4% and the if we have deflation, it should last less than 1 year.
Why do I think this…..I think we follow Japan and Europe. We will see NIRP, Helicopter drops, and possibly the FED moving in to buy stocks in addition to bonds like they did during QE. The Japan Central bank owns 77% of all the ETFs in Japan. 10 years ago they had almost zero ETF exposure. Thats crazy stuff.
This is just my 2 Cents worth….I could be wrong.
Flip or flop?
This Santa Monica townhouse: https://www.redfin.com/CA/Santa-Monica/1133-24th-St-90403/unit-1/home/6767808
Sold in May for $1,078,000.
Less than 3 months later, offered for $1,635,000.
I could see this being worth 500k ish. I would offer that.
Bob, why do you bring in your discussion all the time that scarecrow- FDR? For you it is something good because all your life you embraced socialists. It doesn’t make any sense what you say – elect a socialist today so we don’t end up with a socialist like FDR tomorrow. Based on your opinion, was FDR a good thing for US, or not? You are not clear at all.
30 year fixed mortgage rates just hit 3.6% which means no tanking in sight whatsoever. Additionally, yhere will be millions of refis freeing up more money to keep the economy going.
What did I ever say about fighting the Fed and PTB? They will outlast everybody here!
Rates and prices are way too high. We should see 1% mortgage rates within the next couple of years and a price decline of 50-70%.
Right now, the dumb money buys. Smart money buys when you have rental parity.
Lord Blankfein, mortgage rates were 4.94% in Nov 2018 and 3.75% as of July 2019. There hasn’t been a boom or a tank and this was more than the measly 0.25% of recent weeks If anything, I think most would agree that the market is a bit shaky right now even though the fed is trying so hard to manipulate and stimulate price increase. It is kind of clear that this isn’t 2013-2017 any longer.
We have historically low interest rates and historically high prices. What in the hell is so great about this? It is clear that high interest rates and lower house prices are a healthier combination. Less property tax collection to be misused by government, less cheap money inflation, and more opportunity and motivation for the home buyer to pay off the loan early and be debt free since the price of the house will likely be much lower with higher rates.
Don’t you think if interest rates are historically low and we end up going into a recession that the fed will have less tools to throw at it?
SDman, I am replying to all the hard tankers who predicted high rates and lower home prices. That didn’t quite work out.
In a perfect world, I would love high rates and low home prices. That hasn’t been possible for almost two decades so forget about it. And we’ve been hearing the same nonsense, the Fed is out of bullets. Not even close. Anybody who bet against the Fed in the last decade was obliterated. Do so at your own peril.
Lord Blankfein, yeah you’re right, QE has kept interest rates low for some time now. I assume the only weapons the FED have left is: to reduce interest rates a bit more as they recently did, print more money to create inflation (I’m thinking this cause an even greater crisis during a downturn), and create false propaganda as Bernanke and Lawrence Yun did during the great recession ensuring the public that all is fine as housing prices collapsed. It’ll be interesting to see how things play out.
Almost the weekend! Can’t wait to go surfing in the morning and on a open house tour later. I love looking and pretending to be a serious buyer 🙂 obviously, I have no intentions to buy at the top but to toy with the realtards. Buying at the top is for losers. Smart people (RE experts like me) buy at the end of the ten year cycle when prices are down – usually – 50-70%.
Fantastic business model!
https://www.fastcompany.com/90386799/this-startup-wants-to-put-a-free-tiny-house-in-your-backyard
“this-startup-wants-to-put-a-free-tiny-house-in-your-backyardâ€
I want to support this start up and invest in them. Every backyard should have an ADU.
More supply means less rent costs. Less rent means renting becomes even more attractive to owning. House prices will fall further. Also, by putting in millions of ADU’s some neighborhoods are less attractive because of high volume of renters, cars on the street, noise etc. less attractive neighborhoods puts pressure on selling prices.
This has been the best idea ever. I would even donate to this startup!
“New Age” there’s one thing you forgot. Bears will rarely gain because they can not stomach ANY risk, at all. They’re scared to death of that word. Nothing wrong with that,
a good 9-5 job will keep ’em going. But unless you’re making big $, you’re probably not going to be moving the wealth needle unless you take some calculated risks in your lifetime.
Correct. Nobody ever got rich doing the 9-5 in a cube thing. And it’s the 9-5 cube dwellers that think the world is out to get them or believe that the system is stacked against them. Talk of the POWERS THAT BE and all that nonsense.
Successful people take risks. Sometimes the risks pay off, sometimes they don’t. As the great Wayne Gretzky said, “you miss 100% of the shots you don’t take”. Millie and his fellow bears, like to skate around the rink watching everyone else play. They will never jump in and play however, and that’s sad.
During a bubble, everyone who buys (no matter the price) is a genius. The music always stops at some point
“Rates are still low†is the dumbest sales pitch.
Higher rates would be good for buyers as it would crash prices.
But rates are not going up, they will fall further. Soon the FEd has no choice but to cut rates even more. During the upcoming recession you will be able to buy RE 50-70% below today’s prices with 2% or less mortgage rates (30y conventional). Great buying opportunity ahead of us. Until then, enjoy the increasing inventory and check out lots of open houses!
That’s great stuff Millennial.
Can’t wait to repost this in 5 years.
Keep on posting incessantly here… you got this !
Totally agree. You can repost this during the end of the next cycle. It always repeats every ten years and you need uneducated people who believe lies like rates are still low- now is a great time to buy. If you don’t have silly people buying at the top you can’t have a crash.
Took me less than 5 mins to (probably) locate the profitable Culver City flip New Age mentioned. Sorry Millie.
https://www.redfin.com/CA/Culver-City/11566-McDonald-St-90230/home/6729543
Santa Monica crapshack: https://www.redfin.com/CA/Santa-Monica/1044-Chelsea-Ave-90403/home/6769322
A 1946 house, 2 bed, 1 bath, 1,217 sq ft.
Listed … $1,995,000
Sold … $2,100,000
Where’s the crash?
The crash is coming – fast. Signs everywhere. Nobody is trying to convince you though. You can pick certain examples and based on that you think the market is fine. We absolutely need people that get caught by surprise. You can’t have a crash without losers.
Son of a landlord
Have you forgotten to take the pills this morning?
May 21, 2018
Sold (MLS) (Closed)
TheMLS #18-336972 $2,225,000
The guy bought for 2.2M and sold a year later for 2.1M
Great way of burning 100k….
We have been saving the last few years to buy a house. Since countless pundits expect a real estate crash we are scared to catch the falling knife. My hubby and I decided to stay a bit longer at my parents house until prices crash. Our generation is really overly burdened with high cost of living here in California. It doesn’t seem fair. My friend from yoga is paying a high rent in SoCal and can’t save for a house. I told her she needs to do what we are doing. Live with your parents as adults until the economy gets better for us millennials. I think we are starting a trend amongst our friends.
I hope you really like living with your parents because you may be there for several more years. The economy right now is almost as good as it gets, be careful what you wish for. Most Millenials have never seen a recession or scary economic times…they will come and buying a home will be the last thing most people will think about.
Jacky, that’s incredible! Very smart to live with your parents or in-laws. This is the best thing since sliced bread to pay nothing on rent. Once the market crashes by 50-70% you just buy a very nice house in a great location. Until then, live with your parents for free!
Housing Bubble 2.0 Already Popped, Prices have been falling all over California for more than a year. The REIC has struggled to maintain their lies, but it really falls apart when the shack people just give up. Wa happened to my shortage bay aryans? Where’s Thornberg to tell us we need millions upon millions of shacks and it still wouldn’t be enough?
People have been pouring out of California for years. This shortage nonsense was a made up thing all along.
San Francisco, CA Housing Prices Crater 28% YOY As Bay Area Floods With Excess, Empty And Defaulted Housing Inventory
https://www.zillow.com/san-francisco-ca-94109/home-values/
*Select price from dropdown menu on first chart
The Mountain View Voice in California. “Santa Clara County issued permits for 2,781 housing units from January through June this year, a precipitous drop from the 3,808 permits issued over the same period in 2018, according to the U.S. Department of Housing and Urban Development. Alameda, Contra Costa and San Mateo counties also saw permits fall over the same period, contributing to the sudden reversal of otherwise consistent growth across California extending back to the 2008 recession.â€
“Part of the problem is that the price to build is through the roof, and residential projects that used to pencil out are no longer feasible, said Leslye Corsiglia, executive director of the nonprofit SV@Home. Despite the regional housing crisis and the need to build more homes, she said market forces are working against residential projects. High costs are causing some developers to revoke proposals, while projects that have already been approved are sitting inactive because of rising costs.â€
“‘What we’ve seen in San Jose in particular is they have about 7,000 units right now in the pipeline, but most are stalled,’ Corsiglia said, adding that a grand total of 1,400 units have been completely withdrawn from the city’s planning process.â€
The Real Deal on California. “Los Angeles homes linked to two Oscar-winning actresses and an Oscar-winning director made the news this week. Brie Larson — Laurel Canyon — and Reese Witherspoon — Zuma Beach — both sold their houses. In Encino, the former home of director Ron Howard hit the market. The Beverly Hills home that once belonged to tycoon and Hollywood producer and director Howard Hughes was set to be auctioned off.â€
“In Beverly Hills, a home tied to the late — and eccentric — tycoon Howard Hughes is set to be auctioned off after some price cuts. It was most recently listed at $10.9 million, but after lingering for two years on the market, the 4,600-square-foot home is headed for auction. It’s the latest example of the slowdown in Los Angeles’ luxury market.â€
“Oscar-winning actress Brie Larson took a slight loss after selling her place in Laurel Canyon. Variety reported that the actress sold the recently upgraded 2,900-square-foot residence for $2.17 million, after she purchased it in 2016 for $2.25 million.â€
Brie Larson won an Oscar? I didn’t know that.
Also who the eff cares what Brie Larson does? Are you seriosuly going to make your financial decisions based on what some dimwit Hollywood “star” does? If so you’re beyond help.
Here another outstanding idea in order to avoid high housing related costs. “Glampervansâ€
https://abc7news.com/society/glamping-gaining-popularity-amid-bay-area-housing-crisis/5458787/
Why pay too much for an apartment if you can live basically free in a van? There is plenty of parking everywhere.
Confirmed: Millie is just trolling now.
Live in a van, eat at the soup kitchen, shower at the Y, and shit in a bucket. What a life! Sign me up!
I think you are making this sound way to negative.
Think about it, if you are single and live close to the beach, work at a tech job- I would totally live in a van. My tech company has a great gym with 24h access. If you save a bunch of money and live for free I would totally do it.
If you have a family and maybe kids I think it’s much better to live with your parents or in-laws to save rent. Me personally, I prefer to live in a cheap apartment close to work and the beach. There are ways for almost everyone to live at a very low cost and avoid high rents and especially highly over inflated mortgages that nobody needs/wants.
Or stay at an RV park for $500/mo where you have access to bathrooms, showers, cable tv and wifi. Lots of people doing it, many more to follow. I dont live in my van year around, but I do a month here and there as I travel (and dislike most hotels and the cost of rental cars) and this is what I see.
That might work for a single person for awhile to save money.
However, try to pack a spouse and 2 kids into the Glamper van, and the family may resort to cannibalism after a few months. Same is true for tiny houses.
This isn’t a new idea. A co-worker who lived in MN back in the 1990’s considered taking a high paying job in Silicon Valley back then. Housing prices were still extremely high (ie a 2K sq ft house was almost $250K). His plan was to park his camper in the parking lot of his employer in exchange for being on-call 24 hours (paid, of course). He was going to bank his pay and buy a $100K house with cash back in MN after a couple of years.
It would have worked.
It might have been better if he stretched and bought a $250K house and sold it now for $2.5M
Economist Larry Kotlikoff in his report titled “The Big Con” argues that subprime mortgages, the housing bubble, derivatives, financial leverage etc didn’t cause the Great Recession. What did it was quote: ” If, as argued above, the evidence rules out the usual suspects, what actually caused the GR, whose size, itself, seems to have been hyped? My answer is multiple equilibrium, broadly defined. Sheer panic, facilitated by opacity, false rumors, misinformation, exaggeration and a strong assist from interested parties, flipped the economy to a very bad equilibrium. This diagnosis implies a deep structural problem in the financial system — one that seemingly can’t be addressed by Dodd-Frank or similar reforms proposed or enacted in Europe.”
Here is a link to the article:
https://kotlikoff.net/wp-content/uploads/2019/03/The-Big-Con-NBER-Version.pdf
In other words, the US witnessed a massive bank run on financial institutions when their investors lost confidence. Kind of like “it’s a Wonderful Life”. Here is a quote from the report:
“In completely ignoring the theory of bank runs (There is not a single reference to any theoretical model.), the FCIC pretended that what happened wasn’t intrinsic to how the financial market is structured. Instead, the commission, for whatever reasons, appears to have rounded up the usual suspects and held a sham trial. Yet, the commissioners couldn’t simply ignore the panic. In fact, in the process of fingering multiple apparently innocent culprits, the report used the word panic 100 times. That’s roughly one usage every six pages. Here is the first.
The crisis reached seismic proportions in September with the failure of Lehman Brothers and the impending collapse of the insurance giant American International Group (AIG). Panic fanned by a lack of transparency of the balance sheets of major financial institutions, coupled with a tangle of interconnections among institutions perceived to be “too big to fail,†caused the credit markets to seize up. Trading ground to a halt. The stock market plummeted. The economy plunged into a deep recession.
This statement certainly emphasizes irrational fear and links panic to opacity. But if falls far short of saying that the banking system and economy, as currently constituted, are built to fail with panic being the catalyst. Lehman’s CEO, Richard Fuld, got closer to this conclusion in this part of his October 8, 2008 testimony to the House Oversight and Reform Committee.
‘At Lehman Brothers, the crisis in confidence that permeated the markets led to an extraordinary run on the bank. In the end, despite all of our efforts, we were overwhelmed. However, what happened to Lehman Brothers could have happened to any financial institution.'”
My take on this is that he makes a strong argument that the true cause of the crash has been ignored. And focusing on housing rather than on investment banking practices does not get the whole picture of the crash. The next crash might be less about real estate and more about something else. We really don’t know any more about how leverage is being used across the whole spectrum of the economy than we did before the first crash do we?
Loss of income and unemployment will cause a lot of different investments to crash. But in every crash there are well-placed vultures who profit off it, to be sure. Our fellow posters who wish for luxury real estate to come within their reach maybe should focus on buying up cheap assets that produce income during the next crash just like the big boys did. Then they won’t have to worry about how much those beach properties cost.
That’s an excellent point. Originally, I planned on buying a dream home at a bargain during the next crash but I am also looking at buying rentals instead of tying my investment money to just one very nice home. I think a mix will do. I want to buy at least two objects. I feel bad for people who didn’t wait and bought at the top, but unfortunately those poor souls are part of the equation. Can’t win if nobody else loses.
@JR
Good stuff. The subprime was one of the main causes/symtoms and the massive bank run was they result. I was working on my MBA at that time and was really digging into the housing. The total market value of all the U.S. houses went from $6 trillion in 2000 to $12 Trillion in 2007. In a real world with normal inflation that is almost impossible. I had calculated that we overbuilt the housing stock by close to 4 million houses or about 4 to 5 years worth of too much stock. Add in the fact that almost all of the subprime borrowers would not be able to make payments on their homes once rates reset and housing stopped appreciating. So we had about $4 trillion in bad loans.
But your are correct about the fear. A friend of mine was a VP at a stable utility company that had a captive audience per say. When the SHTF, he said 4 or the 5 banks they had credit lines with pulled their credit lines. At that time many companies used short term commercial paper for week to week paychecks. That all dried up instantly. He told me if that one last bank had also pulled their credit line, he would not have been able to make the weekly payroll as they just did not have short term cash available. This is from a Utility company that had a good bond rating and paying customers.
About subprime… Kotlikoff’s paper says the following:
“the FCIC report features the word “subprime†on 41.5 percent of its 662 pages. It mentions the word “mortgage†on 69.9 percent of its pages. Hence subprime-mortgage references represent almost 60 percent of all FCIC references to mortgages.
This dramatically overstates the importance of subprimes. In the run up to Lehman’s bankruptcy, subprimes never exceeded 14 percent of total outstanding mortgages and their share was below 12 percent on September 15, 2008 when Lehman shut its doors.3 Furthermore, not all subprimes were subprime when measured by foreclosure rates. At its peak, the subprime foreclosure rate was only 15 percent.
Foreclosure rates on prime mortgages peaked at about 3.5 percent. Since at most, 14 percent of outstanding mortgages in 2009 were subprime, at most, 2.1 (.15 x .14) percent of all mortgages at the height of the Great Recession represented foreclosed subprime mortgages. This seems like a very small number given the tremendous attention paid to subprimes.
At the recession’s peak, roughly 4.8 percent of all mortgages were in foreclosure. Subprimes constituted almost half of these foreclosures. This oversized share of subprimes in total foreclosures suggests they ignited the recession or at least made helped make it “great.†But subprimes constituted over 60 of all foreclosures in 2004 when the economy was doing just fine.
Subprimes were and are built to be risky. No one was shocked about their high foreclosure rate in 2004 and it certainly didn’t spark a recession.
Furthermore, one can’t claim subprime defaults caused the GR by considering defaults during the GR. When the Great Recession began, the default (mortgage delinquencies plus foreclosures) rate on all mortgages was only 3.7 percent. It rose to 11.5 percent over the next two years as close to 9 million workers lost their jobs.7 I.e., the GR caused defaults, not the other way around.”
My take is that the cause of the massive subprime defaults in the recession according to Kotlikoff’s data was really job loss, and the kind of people who got subprime loans were in the social class that is most subject to job loss in ANY recession! The loan packages if they had been in your portfolio instead of stocks, might not have done any worse since 85% of the loans in sub-prime packages continued to be OK.
Millennial- Did you label yourself a real estate expert? I am just curious how someone becomes a real estate expert without actually owning any real estate? I am not trying to be rude I am curious.
I went to an open house here in the inland empire as my wife and I are looking to upgrade just a little bit as we want a pool and a different elementary school for my son. This house was flooded with buyers. its been on the market for 2 days and there were at least 7 families looking at it.
its a 4/3 1800 sq ft, 3 car garage, with a pool for 569K. I can see why it was so crowded as most homes like this go for 600k but they are 2500+ sq ft
Jordan, sorry you live in the IE.
Jobs pay incredible bad in the IE and it’s freakin hot during summer. Some schools are really good though but you have a bunch of hobos and crime.
If you commute to the coast to tech jobs or other jobs that pay well you hate your life. The 15 traffic is a nightmare unless you wake up at 4-5 in the morning.
They are building everywhere in the IE….builders built into a recession-that’s not new. There is a shit ton of inventory in the IE. Sure, its overpriced and during the next crash you will see a tremendous price decline.
Yes, I am absolutely a RE expert. It’s easy to prove as well. E.g. Every realtard tells you he/she/it is a RE expert but once you start talking with them, challenging them or providing them with data you realize that 95% are full of BS, clueless and total scam bags. Or just look at the people here, they tell you they are RE experts because they try to flip houses at the peak? Rofl- every dumb ass can pay over value at the top. It doesn’t take much to overpay. If owning a house is a measurement of being an expert than the 7 Mio that forclosued last time were RE experts as well.
I don’t overpay for RE because I don’t have to-just like nobody has to. You just rent a cheap apartment during the bubble and buy when it’s down 50-70%. If you can’t find a cheap apartment you just live with your in-laws or parents for free.
“it’s freakin hot during summer.”
Millie sounds like Drama from Entourage, the episode where they drive through the Valley and he constantly needs to hydrate cuz it’s 100 degrees outside.
I appreciate the write-up. I like living in the Inland Empire vs the coast as I don’t like our nasty beaches. If i didnt grow up in socal I would have left a long time ago, but the weather keeps me here.
real estate expert- those 7 million people that bought a home are not claiming to be experts. I know hundreds of people that owe a home and do not claim to be an expert. I guess someone is an expert when they can throw around some facts or numbers. Is the market high right now? (yes it is) Is it crashing? (I do not think so at all but leveling off some)
If rates drop to all-time lows, you will see home prices going up again. So once again the Feds are in complete control and everyone else is guessing when the market will crash. It will drop at some point but that could not be for many years.
I do not hope for a recession or crash as everyone’s jobs are in trouble, even if they are to naive to admit it.
@random guy
You seem to misunderstand. It’s freakin got during summer in the IE…..that means if you live in an older home your energy costs go through the roof. Newer homes are more energy efficient and have solar. I don’t mind the dry heat but dont i want to live in the IE-becaus winding have to. I live 12-15min from the beach (depending on traffic), don’t even need AC due to the ocean breeze and live 20-25min away from my tech job.
Where do you live random guy? Do you like laying in bed at night at a 100 degrees and reading “dramas†because you can’t sleep? Didn’t think so 🙂
Jordan,
“ I like living in the Inland Empire vs the coast as I don’t like our nasty beaches. If i didnt grow up in socal I would have left a long time ago, but the weather keeps me here.â€
>good! Someone has to live in the IE? Do you commute? I hope you have solar. Nasty beaches? Care to provide an example of a nasty beach?
“ I guess someone is an expert when they can throw around some facts or numbers. Is the market high right now? (yes it is) Is it crashing? (I do not think so at all but leveling off some)â€
> there are some basics here I covered quite often: first of all: do the opposite Rae shills and cheerleaders tell you to do. Second, it’s always better to buy a house with a lower price and higher interest rate than the other way around. Rates always move – you can refinance later. The market moves in boom and bust cycles, nothing keeps going up forever.
“If rates drop to all-time lows, you will see home prices going up again. So once again the Feds are in complete control and everyone else is guessing when the market will crash. It will drop at some point but that could not be for many years.â€
> now, I am losing respect for you. That comment made me laugh. I guess when people think the FED will save the day and that the FED knows how to prevent a downturn than there is no reason for you to be on a housing bubble blog? You are fine, go enjoy the life in the IE! Nothing to worry about here.
“I do not hope for a recession or crash as everyone’s jobs are in trouble, even if they are to naive to admit it.â€
>You make it sound like a recession are a bad thing. Recessions are healthy and incredible opportunities to make money. You save in good times and invest during bad times. You sound like a clueless teenager Jordan.
Millie has no worries. He will inherit his in-laws house in 35 years. Only problem is, they probably won’t be his in-laws, long before then…
Anecdotal, but I know a dozen or so people who either bought second homes for a rental or bought a new home for themselves and kept the first home as a rental back in the 1980’s and 1990’s.
Their 20 or 30 something kids now live in these second homes and manage the property in exchange for a low rent. It is cheaper and more dependable than hiring a property manager to do it.
Rental tax rules say you can’t rent it to yourself, but you can rent it to your Millennial kids and take full deductions (no cap on interest or property taxes) and depreciation,
You can’t call it “Milleninials living at home”. You could call it nepotism, crony capitalism, or feudalism.
When the parents pass away into the Golden CA sunset, the Republicans guarantee that you don’t pay any inheritance taxes up to $12M, the value of the properties are reset to the value at the date of death so the capital gains are low, and the kids can inherit the Prop 13 property taxes.
You could call that a nice Republican dynasty tax shelter.
I call that a wise business decision given the current Republican laws.
Spot on Jed! I will inherit from my in-laws and my parents. My dad owns several houses. All that wealth from boomers will go down to us millennials. We can only win here – except if we decide to buy at the top of the bubble. If you really hate your money – that’s what you would do. An example is the house Son of Landlord just posted which sold for 2.1M. The seller bought it for 2.2M and lost 100k in just a year.
He got off easy, most people who buy high, foreclose later – like the 7 M last time – they lose all their equity and more.
Remember two simple things nost RE shills have trouble understanding: 1) buy low and sell high & 2) patience and timing is key.
I went to many, many open houses this weekend. Foot traffic was dead. These poor listing agents didn’t sell the overpriced houses during the “hot season†– supposedly – in reality it wasn’t even a warm season….it was winter!
Now, the sellers realize – fu** – we missed the boat. No sucker left to pay premium dollars. Not even the reduction in interest rates helped. Some of these people already moved away…the rents obviously can’t cover the costs. And not everyone can rent it out even at a loss. If every sellers tries to rent it out you soon run out of renters. Or you keep reducing the rents.
What’s left? Well you have to sell at way less than what you wanted originally. The problem is that if prices start falling YoY some people who just bought start panicking. Others will stop paying their mortgage. They bought more house than they can afford.
Once the panic comes there is no bottom, the prices will fall like a rock.
Two realtors I met at the open houses are the owners. One wants to sell and move into a apartment (renting). The other one, bought at the peak, and after multiple price reductions is now selling at the price they bought it at. 10 month later!!!!!!!!! ROFL. Hahahahahahahahahahahaahahahaahahha
This show is better than anything on TV. And the best is, they actually think I am seriously interested in buying their overpriced junk. Muhahahahaahhhaha. They are so freakin desperate that they can’t even see how they are being played. And those realtors are your RE experts? This next crash will be epic!
No matter what you experience, the RE shills who are heavily invested in overpriced real estate will eventually capitulate – way too late – once the loss will ruin them financially.
Millie, your argument is logical, but markets are not logical. All I see is dropping interest rates. By next spring, the 30-year loan rate will likely be 3.3%. That has the same effect as if home prices had dropped about 20% in terms of morgage payments. Home costs are crashing without home prices dropping at all. My guess is that actual home prices will rise about 5% next year because of this major change in affordability due to dropping interest rates. I see no recession in 2019 or in 2020.
Thanks Gary!
Well, first of all, it’s good that you don’t see a recession coming. Think about it, if all market participants expect a recession at the same time, it probably won’t happen at that time.
I also agree that interest rates will fall. I don’t think it’s unrealistic that the US will see 1% mortgage rates during the next crash.
Where I don’t agree with you is that prices will go up.
Do you see a hype or fear around missing out when it comes to buying? Buyers sentiment has totally shifted. Remind you: We are in good times right now! But buyers expect lower prices or they are just not willing to pay that much for a house.
Buyers also see that the inventory-is-low-lie is just that: a cheap lie. They are building everywhere you look in California (multi-family and highly overpriced SFH’s).
I said it multiple times: nobody needs to overpay for a house. People can just wait. Boomers bought dirt cheap and have big houses that they are willing to share with their adult kids. And even if your boomer parents live far away, chances are you have other opportunities: move in to your in-laws house or live in a cheap apartment.
It’s so easy nowadays to do a rent versus buy calc. Even the dumbest buyer sees that buying makes no sense if you can rent the same house for half the cost.
Another thing RE shills completely don’t get is business cycles. If they would have gotten an education and passed an Economy 101 class they would have learned that the economy moves in cycles. Nothing goes up forever: except when you look at the numbers on a RE cheerleaders spreadsheet. Their simulated appreciation rate never goes down 🙂 and they fool themselves into thinking they are close to rental parity.
Get the popcorn ready for an epic crash!
All my money is tied to real estate. I just closed on my next property which I will remodel and flip. There are zero signs of a market slowdown. RE is the only market where you can get rick quick. The only thing you need to to is buy now.
Really good idea! Don’t diversify or keep emergency funds. Right now is the time to pour it all into RE! Also, forget about “bad deals are made during good timesâ€, rather think: what goes up, must go up forever! You are on the right track to be filthy rich and retire in the next two years. Good luck and please keep up posted so we can learn how to get rich quick with real estate.
Bay Area The median price for a single-family home in the area has nearly tripled to $940,000 from $327,000 since 2009, according to the California Association of Realtors.
Unsustainable!
Housing Bubble 2.0 Already Popped, some just won’t accept it. San Francisco, CA Housing Prices Crater 28% YOY On Surging Unemployment And Ballooning Vacancy Rate
https://www.zillow.com/san-francisco-ca-94109/home-values/
*Select price from dropdown menu on first chart
Campbell, CA Housing Prices Crater 12% YOY As One Bay Area Broker Concedes “All My Coworkers Fear Going To Jailâ€
https://www.zillow.com/campbell-ca-95008/home-values/
Seattle, WA Housing Prices Crater 22% YOY As Tech Layoffs Surge And Rental Rates Plunge
https://www.zillow.com/seattle-wa-98102/home-values/
We’ll finally see a recession coming! I refuse to buy RE now, I want to buy when prices go back to 2009/2010 levels 🙂 yeeeehaaaa
2 10 yield inversion is in play. Need a stronger recession sign?
https://www.foxbusiness.com/economy/is-a-us-recession-coming-yield-curve-flashes-dire-warning
I am a trump lover but recessions are part of capitalism….we all knew it would come at some point. My wife and I were thinking of buying a house. It’s crazy overpriced. I hope trump gets re-elected but my love for trump is not bigger than my wallet. Housing market has to crash hard. If we see a 30-40% reduction in pricing we will buy!!!
Millennials are just so freakin smart
https://www.zerohedge.com/news/2019-08-12/millennials-consider-living-glampervans-instead-overpriced-san-francisco-apartments
Why overpay if you can live for free?
Just read the article and got a good chuckle. This isn’t exactly “living free”, the glampervans range from 50 to 90K. That’s a solid down payment on a house in 95% of the country. I really like the line of taking the dumping the waste tank behind a tree or at your local starbucks. LOL, you can order your soy latte and then dump your tank of human waste at the same time.
Living in a van, parking in strange places every night probably surrounded by homeless people, dumping your waste tank at starbucks. Talk about living the American dream. How about just getting the eff out of dodge and move somewhere that you can live a normal life. This is all self imposed punishment!
There is a reason why they say blankmind….
This article is about millennials in the Bay Area. In other parts of the country you don’t have highly over inflated housing costs. If you work at a tech company and can save 3.5k on monthly housing costs by living in a van it’s a no brainer for singles.
You don’t need to dump your human waste anywhere. Most gyms are 24/7.
Btw, there are already human feces everywhere in SF – thanks to an army of homeless. So it doesn’t really make a difference. However, living in a van for a couple of years saves you an enormous amount of money. Brilliant!
An entire generation has been destroyed by the media pushing garbage like this. Today’s 30 year old thinks living in a van or with their in-laws is the way to success. That’s so sad and pathetic.
The good news is the next generation isn’t falling for any of it. I can see my kids and their friends will be just fine. Their world view is what mine was at that age. They want to be successful, earn a lot of money, live in a nice house, etc. My kids aren’t even in high school yet and they already talk about where they will live post college, all the cool things they want to do. They have big dreams. Compare that to Millie’s dream of living with his parents in an apartment or in a van. Like I said above…..just sad man. Sad, sad, sad.
The RV/van camp outside my work and in my neighborhood is made up exclusively of freshly divorced or single Gen’X’ers. Those vans are expensive even when leased. Only rich millenials can afford to do it. The people living in vans at the beach are bums and I believe it’s been like that since the 70s. I know a millenial IG influencer who does the van life thing but she secretly stays at a house that the parents bought her.
I guess to you they come across at smart, but to me, they come across as dead beats. Every younger generation or millennial I run into having a car payment and usually credit card debt and student loans. They are living with parents as they have no choice. I bet very few are actually saving their cash for when a downturn happens. NOPE, they are spending their money traveling and buying the next new iphone etc..
“Every younger (….) have car payments, credit card debt and student loansâ€
Yep, that’s the reason why they don’t go out and buy in droves! -even though the RE cheerleaders told us so- every year!
Precious generation bought over priced houses because they were dumb: they believed “buy now or be priced out foreverâ€. The result: 7 Mio foreclosed.
Millennials are much smarter and learned from their mistakes. They know: you only need to wait this out and buy when prices are down 50-70%.
Millennials have tons of options to avoid high housing costs: live in a cheap apartment close to work, live with your parents or in-laws or live in a nice van.
No reason to overpay for housing 🙂 buy when the crash happens or inherit the wealth of boomers.
individual investors keeping the market afloat
https://www.marketwatch.com/story/heres-the-real-reason-why-us-home-prices-havent-been-smashed-2019-08-14?mod=genPF_twitter_new&link=sfmw_tw
I saw that article too. I think it is a great perspective and makes total sense why we haven’t seen the price drop we have been expecting. Owners of SFRs as rentals are in a different situation than those who are owner-occupied.
I expect when properties are not longer cash flow positive or when there are better investment opportunities elsewhere, the floor will fall out.
The Housing Stock Index continues to be the best performing sector of the SP500. During yesterday’s mini stock market crash. The SP500 dropped 3% while the Housing Stock Index only dropped 2%. What do these stock investors know which the rest of us don’t know? Why are investors so sure that home builders and their suppliers are going to do well in the next 12 months? It defies all logic since the economy looks so weak statistically. However, past experience has taught me that the investor class is usually correct. They are putting their money where their mouth is.
Also, investors have been upping their purchases of single family homes. In the long run this is probably a negative for real estate since they tend to be the first class of homeowners to sell during a downturn; however, in the short run, they tend to be correct. They obiously see a good change of making a quick profit in the coming year.
“since the economy looks so weak statistically.”
LOL. Yesh so weak indeed. Record low unemployment combined with no inflation. This is why Gary will be a lifelong renter, he doesn’t understand the basics.
Mr landlord, I wish you would understand the basics of an economy.
Obviously, Low unemployment is a bearish sign. I know you don’t look at data or Charts but if you would, you would see that unemployment is a lagging indicator. During recessions unemployment spikes fast. Incredible fast. like a rocket. Once you see high unemployment you are already in a recession, the stock and housing market has already crashed by that time.
2 10 yield inversion. Crash baby crash!! Stock market sell off, housing to fall 40%
Not a chance in the nice areas. There was so much loose cash over the last ten years that an awful lot of these properties are owned outright, or still income positive with the high rents. It sucks to have missed 2009, but that was a once-in-a-lifetime moment.
That said, if you are just looking for a 10-20 percent cut off peak, that could happen. Remember 2009 was a credit-seizure. The problem now is that there is too much cash out there, and not much demand — totally different dynamic.
You wish. Yield curve has inverted 5 times since 1978. Only once did housing tank %40 or more (09-11). Average time from inversion to recession is 18 months so you’ll still be waiting a while longer anyways. Maybe by then, President Bernie will give you a free dwelling unit, comrade.
This confims that not everyone expects the crash at this point. When everyone expects a certain direction it’s unlikely that it actually happens. Here, we see clearly that RE cheerleaders are in denial and don’t see the forest for the trees. A crash usually ends in tears for those that over leverage themselves and deny until the end. Those that show patience and discipline win big during a crash.
Housing Bubble 2.0 Already Popped, But You Know That. $anta Ana home sale$ tumble$ 16% in Orange County’s wor$t first half since 2011
Jonathan Lansner| OC Register | 8/14/19
Here is how price$ and $ales moved in $anta Ana …
4. Santa Ana 92701: $380,000 median, up 12.6% over 12 months. Price rank? 82nd of 83 Orange County ZIPs. Sales of 101 vs. 126 a year earlier, a decline of 19.8% in a year.
5. Santa Ana 92703: $493,000 median, down 6.2% over 12 months. Price rank? 78th of 83 Orange County ZIPs. Sales of 101 vs. 161 a year earlier, a decline of 37.3% in a year.
6. Santa Ana 92704: $510,000 median, down 1.4% over 12 months. Price rank? 76th of 83 Orange County ZIPs. Sales of 168 vs. 210 a year earlier, a decline of 20.0% in a year.
7. Santa Ana 92705: $930,000 median, down 6.1% over 12 months. Price rank? 18th of 83 Orange County ZIPs. Sales of 232 vs. 194 a year earlier, up 19.6% in a year.
8. Santa Ana 92706: $650,000 median, down 0.5% over 12 months. Price rank? 56th of 83 Orange County ZIPs. Sales of 105 vs. 112 a year earlier, a decline of 6.3% in a year.
9. Santa Ana 92707: $500,000 median, up 9% over 12 months. Price rank? 77th of 83 Orange County ZIPs. Sales of 111 vs. 167 a year earlier, a
10. Single-family-home resales: 9,912 Orange County sales vs. 10,833 a year earlier, a decline of 8.5% in the period. Median: $780,000 — a dip of 2.4% in the period.
11. Condo resales: 4,308 sales vs. 4,813 a year earlier, a decline of 10.5% in 12 months. Median: $499,500 — a dip of 0.9% in 12 months.
12. New homes: Builders sold 1,572 residences vs. 2,396 a year earlier, a decline of 34.4% in 12 months. Median: $1,013,750 — a rise of 5.9% in a year.
So SA is crashing? You mean ghetto SA? only hipsters bought there
Nice! Pretty much what we see all over California. Party is over…..I am bombarded DAILY with price reductions by Zillow and Redfin!
FWIW, I got a form email from J.P. Morgan today:
Today, a popular measure of the U.S. yield curve inverted: the difference between the yields on 10-year and 2-year U.S. Treasury notes turned negative. The move was sparked by weaker-than-expected economic data out of China, but we believe it’s part of a broader trend.
A combination of slowing economic activity globally, muted inflation pressure, trade tensions, and rate cuts from central banks around the world have informed our view that we’re in the late stages of the economic cycle. Today’s yield curve inversion is consistent with this view.
While the economy appears to be later in the cycle, J.P. Morgan does not believe that a recession is imminent.
JPM is right, we are at the end of the bull
Cycle. Recession is coming 🙂 it’s going to be beautiful – for those who didn’t buy at the peak –
Let’s sing together: We want a crash! We want a crash! We need a crash! We need a crash! We love a crash, we love a crash! Real estate crash, real estate crash! Beautiful crash!
Beautiful crash/recession…..exactly! Can’t wait!
Prices and mortgage rates are over inflated.
Don’t believe when they say “rates are still low†it’s the dumbest thing ever.
Rates will further drop. We will probably see negative mortgage rates during the crash.
Recession is obviously coming fast.
https://www.zerohedge.com/news/2019-08-14/us-30y-yield-tumbles-below-200-first-time-ever
Mili: “We will probably see negative mortgage rates during the crash.”
Wouldn’t that create again a bidding war?!?…Every one likes to borrow money almost for free.
It depends…..if we get a nice uptick in unemployment during the next crash…
LOL at the inversion talk. This is where the men get separated from the toddlers. The bears are parroting MSM talking points. What the MSM forgets (or probably more like doesn’t know) is that the yield curve was inverted multiple times before without a recession following. It’s one of those myths in the media that has taken a life of its own.
The only way a recession is coming is if someone like Harris or Bernie wins next year. Then Millie may get his wish. Only problem is Millie will have no job, and neither will anyone reading this.
Meanwhile, 15 year mortgages can be had for 3%. Which compared to this time last year is the equivalent of a 15-20% drop in prices.
If that’s the case why haven’t prices gone up due to this increase in purchasing power?
3% for a 15year? You nuts landlord? I would do it once prices crash and rates are 1% for a 30year. 🙂
Mr. Landlord has been more correct than anyone else posting on this board. The sky is not falling anywhere accept perhaps in Santa Ana, CA.
I have gradually more and more positive about both the stock and real estate markets since early June. That is when the divergence between the Housing Stock Index and the SP500 should have become obvious–but it didn’t happen. It is clear that both markets will be higher next year.
Do not sell your mutual funds yet. The stock market is going to go 15-20% higher in a final mania phase. Home price gains will likely be much smaller–in the 4-5% range as 30-year mortgage rates drop to near 3% next year. Since real estate is local in nature, some parts of the country may see good gains while others may only remain flat. It may pay to wait until March/April to put your home on the market if you are planning on selling. Most Orange Co. homes will likely to appreciate about $2,000 per month for at least the next 10 months.
They always say, “Dont fight the Fed.” The Federal Reserve appears to be determined to delay any signs of a recession until after the November 2020 election. The thought of any of the Democratic candidates winning the Presidency scares me.
My husband and I are ready to buy in SoCal!!!!
The biggest challenge we have is finding realtors that write offers that are 20-30% below asking prices. We did find 1-2 who were sending them but offers didn’t get accepted. We feel like we are forward looking. It’s hard to make realtors understand that the market is going to crash hard. The 2 10 just inverted and a recession is basically here. I told my husband that he just needs to get a realtor license so we can send offers by ourselfs.
Must have been some pathetic RE to burn their reputation writing offers for you, at least wait for the actual crash before ruining their reputation.
As I reminded one realtor I worked with, the agent is required by law to present all offers, no matter how low and “insulting”, to the seller. This woman was almost in tears when I told her what I intended to offer for a condo here in Chicago in 2006, at the top of the Great Rampage. She wailed about what it would do to her relationship with other agents. I pointed out to her that all she needed to do was blame me, her client. She quit working with me and I found an agent who would do as told with no argument. I ended up not buying at all during that period, because my offers were all very low-ball, and I am so glad, because the prices of ALL these units dropped far under even my offer prices, in the subsequent bust.
When I bought my second place in 2017, I had my agent submit an offer 25% under the inflated listed price for a unit in this very building. Well, the seller’s agent was so upset by my offer that he failed to submit it to the seller over the weekend. That Monday, my agent called me with a unit exactly like it in the same building, priced $40,000 less. I had her withdraw the offer on the other unit, which I could do as it had not even been presented to the seller, in violation of the law, and submitted an offer a little OVER the ask price on the newly listed unit, which was in better condition, and which I had under contract within the week for the same price I had offered for the other unit. THAT unit recently sold for rather less than I offered, a couple of months ago.
Remember, agents are REQUIRED to submit all bona fide offers to the seller, If I were selling and found out that offers were made that I never saw because my agent or the buyer’s agent felt they were too low, and didn’t want to damage their reputations or their “relationships” with other realtors, I would be stone furious, and would certainly sue if I missed out on a better price than I eventually got, as a result.
Perfect!!! In this market you must be on drugs to send an offer close to asking price. If you really want to buy – which is a dumb idea, in a market that is in free fall- than you must send low ball offers. There are price reductions left and right already. My offers would def be 30% below asking at the moment….but I am smart enough to know the market will crash by 50-70%. So why waste your time and not watch the show for a while and buy at the bottom?
Millie, I was in a different situation here in Chicago in 2017, than you are in Los Angeles right now.
In 2017, I had been “de-converted” out of another beloved condominium I’d purchased for a bargain price, but whose units were mostly investor-owned. Don’t EVER buy in a building dominated by investors. So I had to sell with everyone else when 75% of the ownership voted to convert the building to rental and sell it to an investor.
Rents were inflating very rapidly while Chicago condos and SF houses were, and still are, selling well below rent-parity. The situation here for renters is even worse now. I had paid cash, and had no intention of burning my cash down paying ever-escalating rents. Moreover, I’m a picky buyer and badly wanted a place in the building I’m in now, which is rather special, with extraordinary architecture and a huge indoor pool, as well a very convenient location in an attractive though non-trendy neighborhood. The unit I ended up buying for a little over the ask, was in incomparably better condition, and is moreover the only one in this 20s vintage building with Space Pak A/C. The price I paid was $30,000 under the ask of the other, lesser unit, and is far under rent parity. If it were rented out (something we don’t approve of here)it would rent for $500 over the combined HOA and mortgage payment- if I had a mortgage, which I don’t. It has saved me at least that muchor more every month, as rents are continuing to rise in this renter-majority city, while condo prices are stagnant, and as it is mostly owner occupied and huge, I have reasonable assurance that I won’t have to deal with a forced sale, and scrambling for another place in a tight market like that of 2017.
Different people in different markets have to deal with their situations apart from others. If I had to live in L.A., I might do as you are and as I did in the wild 00s, which is hole up the cheapest rental I could find, and wait for either a break or a bargain.
It’s true, you can’t use just any agent to write offers that are significantly below asking price. But once you have found a handful of good realtors you may send “lowball offers†to multiple listings during a short time frame. We’ve sent about ten “lowball offers†lately and it looks like one is going to bite. All offers were 15% below the latest price reduction. In this “buyers market†most houses sit for a few month and have multiple price reductions. Sellers are desperate. A house is worth what someone is willing to pay for it. In a changing market, filled with smart buyers, you must lowball in order to get a deal.
I’ll bet before Wednesday you had never heard the term inverted yield. But now you’re an expert, LOL.
I know you’re a millenial who thinks history started yesterday. But believe me, inverted yields are the biggest nothing burger on the planet. They happen all the time. Sometimes it’s followed by a recession. Sometimes it isn’t. It has the same accuracy as saying yesterday I drank coffee and today the stock market went up 2%, therefore if I drink coffee stocks will go up 2%.
As for 30% offers, why would you even waste your time? I can tell you’ve never made an offer to purchase. It’s a lot of paperwork. And you also have to put down some earnest money, $5K minimum. Plus provide a qualifying letter from a lender, that needs info from you, ie time spent. All that for a 100% chance of rejection. Either you’re trolling or you haven’t a clue what you’re talking about. Which is it?
Mr Landlord,
You don’t have to put any earnest money down until you get an accepted offer.
If the offer is ridiculous, you may have a hard time finding a RE agent to help you. Nobody likes to spend all of their weekends for free helping stupid people who have no chance of closing a deal and earning them some money.
However, if the sellers keep getting lowball offers, they may wake up and get a clue on how much the house is worth.
We bought a house 7 years ago. We had a hard upper limit of 400K. The house was offered at 445K and we offered 390K. ~15% The seller didn’t take it and I think we insulted them since they never countered. 3 weeks later, the seller agent approached our agent and said to try and offer 400K. We did and they accepted. There was no earnest money until we had an accepted offer and a contract was signed.
I’ve sold a few places before and dealt with a couple of low ball offers. It generally turned into comedy hour when my agent called to present the offer. These offers went right into the trash can with no response. There was instance where I wanted to counter with a higher than initial list price, but my agent talked me out of it. It’s a giant waste of everybody’s time. Millie just needs to keep convincing his wife that living in the cheap apartment in the shady part of town is a good thing for the foreseeable future. Good luck with that.
Newsflash: You CAN right offers yourself. Nothings says you can’t represent yourself in real estate transactions. The offer form is a standard template that is easily found online. If you are concerned about the mechanics, then hire a good transnational attorney to help you. Realtors love to sing about how valuable and necessary they are (some are, some are incompetent dolts), but the fact is that people buy and sell things without help ALL THE TIME. Is housing an important transaction? Yes. Is it more complex than selling a car? Yes. Nothing that can’t be managed by doing some homework and basic research. Further, without going through a sub-agent, the listing broker keeps the whole commission which is only an incentive to take your offer.
without going through a sub-agent, the listing broker keeps the whole commission which is only an incentive to take your offer.
But it’s no incentive for the seller. The seller doesn’t care whether his agent keeps the whole commission or shares it. And it’s the seller who decides which offer to accept.
Yes, the listing agent has an incentive to sway the seller into accepting a self-written offer. But at least in theory, the listing agent is supposed to look out for the seller’s best interest, and advise accordingly.
Saw this duplex for sale in Santa Monica: https://www.redfin.com/CA/Santa-Monica/2443-California-Ave-90403/home/6769289
Both duplexes are rented out, but the listing agent told me that, as an owner-occupier, I could evict the tenant of my choice.
And after six months of living in it, I could raise the rent on the other unit to market rate. I could raise it really high if I wanted them to leave.
Or I could Ellis out the other unit and combine the duplex into one house.
I wonder how those tenants felt, having prospective new landlords looking over their homes, wondering which unit they’d evict first.
It’s fun being a renter, eh Milli?
I don’t know if “fun†is the right word but bring a renter during a real estate mega bubble is incredible smart. Think about it, why put your cash into a house that will lose half of its value? You can just rent a dirt cheap apartment and save / invest lots of money! That’s what smart people are doing. They learned from the 7mio who foreclosed last time. There are millions more who were stuck when the bubble popped. As a renter you are flexible, as a buyer at the top you are stuck and can’t profit from the crash.
Renting is winning. Buying at the top is dumbest thing one can do.you should only buy when the market is low (50-70% price crash). It happens every ten years.
You do NOT need a realtor’s license to write your own offers. You only need a license to write offers for someone else.
It’s like being an attorney. You can’t represent others in court without a license. But you can represent yourself without a license.
However, the seller’s agent might not take your offer as seriously. He might worry that you’re amateurs who don’t understand what a legally binding offer is, so that you might try to back out after acceptance. He might also wonder why you couldn’t find a realtor to represent you. Maybe you’re not legit?
A lot depends on your proof of finances. If you have all cash, in the bank, that’ll help prove that you’re serious, legit buyers.
Ditto on how desperate the seller is. A seller who’s inundated with offers might dismiss yours. A seller whose house has been sitting unsold for a couple of months might take a close look at your offer.
It seems like the bond yields are going back up along with the Dow. Sorry bears, try again…
I’m sure your offers were “submitted” to the old round file.
Is it just me or do people who don’t have a pot to piss in (i.e. no real estate, no stock, nada) are all praying for this big collapse so they can join in the the fun. When I ask them why they didn’t buy during the last crash they have all kinds of excuses.
If this massive crash comes you’ll probably be out of a job just like you were during the last recession (or too scared to invest). That’s the problem with bears.
A correction will come but who knows when and for how long and by how much. Buy when you can afford to buy. Remember, your primary home is not an investment unless you treat it like one (which you shouldn’t).
I just keep investing every month. Market goes up, market goes down. I’m probably buying some stocks at the peak and I definitely bought some at rock bottom- it all comes out in the wash. Meanwhile, my mortgage balance keeps going down. If the market crashes tomorrow, who cares? I’m not selling anyway.
And you have no idea if they actually sent those lowball offers or just told you they did to placate you….Look I would love a crash too, my job is fairly recession proof and I have a 6 figure nest egg in the bank to protect myself in case I am wrong. If it happened and I was still working I would go buy my dream house and rent out my current starter home. The reality is unless people are losing their jobs or some black swan event happens nobody is going to unload their house. 20-30% ain’t happening right now…
In this market you lowball THE CORRECTION IS ON ITS WAY. Seller are slow to adjust. So you lowball to get the deals.
Realtors have a new talking point in their sales arsenal.
It’s no longer a “price drop.” It’s a “price improvement.”
I guess “price drop” sounds bad. Like the house can’t sell. Like there’s something wrong with it. Whereas “price improvement” sounds like an added amenity.
Might as well send your offers to yourself. No one is going to accept low balls at this point. And the inverted yield has to last consistently for many months to be a predictor of any recession. Then there’s the question of whether a mild recession would even have any effect on the housing market given the fundamentals. I smell desperation all over that blogger. Or just trolling.
@RE cheerleaders
Hey JT and Mr Landlord,
https://wolfstreet.com/2019/08/15/housing-bubble-2-in-san-francisco-bay-area-silicon-valley-is-cooked/
You told us RE prices can and will never fall again. You said 2008 was different and a once in a lifetime.
If you believe this, than why aren’t you buying now, since prices have come down? Isn’t it a great time to buy (always) and now that prices are falling isn’t it an even greater time to buy?
“Housing Bubble 2 in San Francisco Bay Area & Silicon Valley Pops Despite Startup Millionaires & Low Mortgage Ratesâ€
So why waste your time here? You could be a proud owner of a 1mio Dollar crapshack in SanFrancisco or Silicon Valley?
Is WolfStreet another version of ZeroHedge? Here’s the real news: Bay Area prices are down 3% in 2019 after more than doubling since 2010.
“According to Redfin, the San Jose market has seen the second biggest drop in median sale price nationwide following Bridgeport, Connecticut. Prices in San Jose are 3.3% lower than last year.Oakland’s prices have dropped 2.6% in the same time, marking the fourth biggest price drop in the country.”
Yessir Millie, you’re a real estate genius for renting vs buying all this time. So you expect a 70% crash, but you’re jumping up and down with joy over a 3% “crash”. Maybe in 2030 after another 100% increase you’ll get lucky and prices will drop 4%.
LOL!!
They are so busying blogging that that they missed their own BS. What are you doing here
??? Go out and buy 10 investment properties….HURRY before the prices go up HIGHER!!!!!!! LOL
RE shills have one goal and one goal only. To get YOU to buy at the top in order to keep the bubble going. All their BS sales pitches are for the trash can. The hope I have is that some will remain here when we see the biggie 🙂
We know what landlord will do…he’s the first one who leaves when the stock market crashes….just like last time. You have good weather posters who just want to sucker in the last idiot befor it all crashes again.
Wolf Street, like our good Dr, is usually dead-on with their analyses.
What they don’t know is if the Fed with their good buddy President Trump will lower rates more (possibly negative rates!!!!) during what our President is calling “The Greatest Boom in US History!” When a fire is going well and under control, do you just enjoy it? or do you pour gallons of gasoline on it? Trump believes in gasoline to get re-elected. The Fed seems to be bowing to him.
When the piper needs to be paid, Trump is intending to be out of there.
I went to this Santa Monica townhouse’s Open House last week: https://www.redfin.com/CA/Santa-Monica/853-21st-St-90403/unit-101/home/40200058
The Open House was quiet. I only saw one other couple. And yet, the property sold — at over $600k (if sold for list).
A quiet Open House doesn’t mean a property won’t sell.
I’ve read that most houses do not sell due to Open Houses. Realtors hold Open Houses mostly to show sellers that they’re working hard, and to collect names of prospective buyers. Most sales are generated through personal showings, as those attract the serious buyers, filtering out the lookiloos.
I suppose Milli will be going to more Open Houses this weekend. If they’re quiet, he’ll assume that his %50-70 housing crash is just around the corner.
When I say it sold for over $600k, I don’t mean over list price. I mean since its last sale.
* 2012 … sold for $1,275,000
* 2019 … sold for $1,880,000 (if sold at list)
So I don’t see any %50-70 crash on the horizon.
I agree with Son of a Landlord,
Most houses that are sold, are sold before they even get to an Open House. If they are priced right when they are listed, the the private showings and offers start coming in. The RE agents are doing their jobs.
If they are overpriced, the RE agent will have an Open House. This may attract a wider range of buyers. I go to open houses but mainly to look at floorplans and neighborhoods. I’m not usually serious at that point. The only exception might be a For Sale By Owner open house. RE Agents won’t often take you to these houses because they are concerned with commissions.
Absolutely correct son of landlord,
We see a clear buyers fatigue. Muted demand. Change in buyers sentiment.
It appears there are no more buyers left that want to buy at the peak.
You can tell by looking at foot traffic at open houses.The people visiting are myself and the listing agent.
While I pretend I am a serious buyer, I am really not. I would rather shoot myself than buy at the peak.
Planning on buying when prices are down by 50-70%. This happens every ten years. It’s a boom and bust cycle.
I’ve read that most houses do not sell due to Open Houses. Realtors hold Open Houses mostly to show sellers that they’re working hard, and to collect names of prospective buyers. Most sales are generated through personal showings, as those attract the serious buyers, filtering out the lookiloos.
___
Correct.
Think of all the houses for sale in any given weekend. And then think of all the open houses that same weekend. The % of houses for sale with an open house is a fraction of a percent. They’re a waste of time for the most part and hardly anyone bothers.
People look at houses online, then narrow the search down and go look at them with their buying agent. That’s how 99% of home transactions are done. Open houses are a fringe. Open houses also aren’t conducive to buyers. You have all these other people walking around, how can you get a good feel of the house? You want to be thee on your own, to be able to get a good feel for the place. You can’t do that with 10 other people around and especially not with the listing agent breathing down your neck selling the house.
Real estate experts (like me) know that a sharp increase in open houses are a sign for a weaker market. It’s logical when you use your brain cells. In a strong market and if we would have low inventory, you wouldn’t need open houses to sell. Open houses are a great way for buyers to know there is not much demand for that house. If the buyer likes the house he can comfortably lowball (15-20%) the seller. You know there aren’t any other offers…why else would they do an open house?
I love visiting lots of open houses. It shows how much vacant supply there is and how little foot traffic is. A clear sign for the peak of the market. During hot seasons, there are multiple offers without even seeing a property. Those days are long gone – kind of like the Asian millionaires who bought here in the past or kind of like the dinosaurs- we won’t see that any time soon.
What we will see is an incredible amount of open houses and listings. Sharp increases in inventory and price corrections not seen since 2009. Anyone noticed how they are building new houses….like everywhere!
The future of cheap renting?
New York City man converts condo into 11 micro-apartments: https://nypost.com/2019/08/16/condo-owner-busted-for-building-being-john-malkovich-like-4th-1-2-floor/
A Lower East Side condo owner turned his small apartment into a mini-village — by converting it into an illegal duplex with 11 sub-units that had ceilings as low as 4 ¹/₂ feet high, officials said Friday.
The illegal micro apartments at 165 Henry Street are so cramped that condo owner Xue Ping Ni even put up bubble wrap as protection to keep residents from hitting their heads on the many low-hanging pipes.
The bizarre arrangement in Ni’s apartment No. 601 — which was raided and shut down Wednesday night by the city Buildings Department — was compared to something out of a movie. …
Yeah who want to do something stupid like buying a house? Live in a 4.5 ft tall apartment instead like all the cool kids. You’ll save a bazillion dollars.
Amirite Millie?
You are spot on landlord.
Real estate experts (like me) have been explaining that it is much smarter to buy real estate when it crashes – not at the peak.
Its straight forward math: when you buy 200-300k below the peak, your monthly payments are much lower compared to buying at the top of the bubble.
While waiting for the crash – which happens every ten years- you just live somewhere for free or close to “freeâ€.
Real estate experts (like me) recommend living with your parents or in-laws. Or a cheap apartment. For Some singles it might be a smart idea to live in a van or on a friends couch. Tiny houses can also be a smart alternative. Whatever you do, don’t overpay for highly inflated houses. The worst thing in life would be to buy real estate at the peak (now)
I hope it helps.
Thanks to super low interest rates, open houses are full of people and people are buying. So much for the housing crash. Question is how much will they go up this year cause prices will be going up.
JT, “full of people†muhahahahahhahahah
In your RE cheerleader dreams! Full of BS would describe it better. I go to open houses every weekend, and all I see is a desperate listing agent who has the follow problem:
Buyers fatigue/ change in sentiment: in other words there is no demand. On the other hand you have a seller who has reduced price multiple times. The houses sit for many month and nobody bites. It almost seemed like the last sucker bought and now there is nobody left. The big hope for RE cheerleaders was Asian buyers : however as we learned China buyers have disappeared. The next big hope was lower interest rates will re-ignite the buyers willingness to overpay by 50-70%. It seems interest rates are on the downward trend and buyers have no interest in buying at the peak.
Smart buyers! Why buy at the top when a recession is coming fast? Previous generations were much more uneducated. They actually believed the lies: Buy now or be priced out forever. Millennials (most of them have college education) know that the economy moves in cycles and nothing goes up forever. They know that asset prices have been highly inflated and are soon crashing.
People like JT, who have been buying overpriced crapshacks and hope to flip them to the younger generation at a big profit are getting desperate. The Times of multiple offers are long gone, enjoy the new normal: sharply increasing inventory, price reductions left and right, deflationary environment, a beautiful recession and at the bottom you can buy at 50-70% off!
Remember how JT told us that this will be an epic spring season? Muhahahha that is just the most hilarious thing. I really hope that our last remaining RE cheerleaders keep posting during the crash. I want to see more of their desperation.
Last spring was a great selling season. Prices hit an all time high. Guess what? With the low mortgage rates, next spring ( 2020 ) will even be better. More record high prices … as in never been higher … party on. Milli, repeat after me …. interest rates down, prices up … interest rates down, prices up … interest rates down, prices up. Hopefully, that will sink in.
So it’s pretty much a fact that housing is very rate sensitive these days, the numbers don’t lie in that regard. And I think that’s where the real bubble is: rates come down, prices go up. Rates go up, prices stay steady. So no where in that equation do prices come down at the same rate they went up. This is what’s inflating home prices. Because right now there’s two options: either rates go up or rates go down. Which means either prices go up or they stabilize. You can visualize a guy literally inflating a balloon except the balloon isn’t on the verge of popping as some people on this blog seem to believe but it’s definitely on its way. If rates shoot up too high, the bubble may burst. If rates go down too low, the bubble deflates and it becomes a buyer’s market. The moral of the story is don’t look at prices in nominal terms. Look at VALUE relative to interest rates. Unfortunately, RE reports are usually expressed in YOY % change in nominal pricing which means savvy investors will have to do that math themselves to determine a good deal vs a bad deal. There you have it, I spilled the beans on my money-making secret. Take it and run.
Rofl!!!! He told us our secret…..translation: go out and buy at the top!!! It’s a deal!
Dummy: buys at the top
Smart buyer: knows that real estate is ALL about TIMING. Smart buyer shows patience and discipline, waits until the recession and buys at a huge discount.
Dummy: why is it crashing?!?!?! I thought I bought a deal last year because i thought housing can only go up?!?!?!
Dear Millie,
I’m concerned about your financial well-being and I want you to succeed in life so I’ll repeat it again in case you missed it:
“savvy investors will have to do that math themselves to determine a good deal vs a bad deal”
Yours Truly,
A savvy investor
Finally! Could not agree more. You have to do the math. And clearly, there is no rental parity in California. We are light years away from it. My privat landlord bought a looong time ago. She can rent out for cheap and still makes a profit.
Point here is: You never base a purchase off your emotions. It’s a numbers game. during a bubble peak there is no financial justification to overpay. You wait and buy low. We finally agree!
Sure, RE cheerleaders who are in denial TELL themselves they got a deal….because they need to sleep as well and tell themselves whatever they need to, to bring the blood pressure down. But that doesn’t change the facts….you don’t buy at the top 🙂
Dang, bubble is popping fast! This is supposed to be a strong economy?!? Aaaaaand interest rates are low….bbuuuuuuut prices are falling in California!?!?? I am not going to buy into the crash. No thanks!!!
Realtors, real estate investors, and home owners are walking around with a very very big smile. Record low mortgage rates are right around the corner. You know the pattern … mortgage rates down, prices up.
That makes me happy! If all people would see what’s actually happening you can’t have a crash. You need people investing at the peak before it crashes. Hopefully, more people won’t see the evidence that recent reductions in rates had zero impact on prices. The opposite is actually happening: there is muted demand/buyers fatigue/change in sentiment. It looks like the last sucker bought at the top. Or maybe there are a few left that make the biggest financial mistake of their lifetime by buying at the worst time (now)?
https://www.google.com/amp/s/www.nytimes.com/2019/08/01/business/interest-rates-housing-market.amp.html
I do agree though, rates are getting lower. Waaay lower. No reason to buy now when we will see 1% mortgage rates in the next years along with a house price crash.
The Japanese and European Central Banks have gone to negative interest rates on mortgages — every real estate investor’s wet dream. What Milli is missing is that the Central Banks are coordinating to devalue currencies, which increases inflation and asset prices (stocks, housing). So you can forget about a housing crash any time soon. This is not 2008 all over again, it’s something the world has never seen before.
Central Banks are moving toward negative interest rates everywhere. Denmark already had negative interest rates on home mortgages, which is every real estate investor’s wet dream. The basic idea is to create endless asset inflation by devaluing the fiat currencies — basically screwing everyone holding cash or working for a living. But, this is gonna be great for people holding real estate and stock. So, sorry Milli, it’s going to be years and years of nothing for you, and for every wage-earning sucker out there. The Federal Reserve is here to protect Mr. Market (asset owners) — and not you.
I couldn’t agree more Braxton! Interest rates are WAAY too high.
Wake me up when we have 1% mortgage rates. Why buy now if future rates will be much lower?! We already see price reductions in the housing market left and right. Even a human with a half brain can set up a search in Zillow or Redfin. Both websites are bombarding me with price reductions. So, we see a clear trend, recession is coming fast, House prices are falling and rates are going down. You must be on drugs if you consider buying a house now. If you do, don’t complain later that nobody warned you.
The writing is not only on the wall…..it’s screaming through the loudspeakers.
Why buy now – at the peak – with highly inflated rates….? Just buy when we see the crash at 50-70% discounts in house prices AND 1% mortgage rates! Simple!
Housing Bubble 2.0 Popped, Bulls are lying to themselves. The Berkeley Daily Planet in California. “There are two crises facing the Bay Area. Supposedly. One is a crisis of homelessness, which is the economic production (through inflation and rent increases) of people who cannot afford housing, because they are priced out and are left to sleep on sidewalks and parks. The other is a crisis of affordable housing.â€
“There are entire apartment buildings in Berkeley that are empty – closed to occupancy and unused for years. And the government cannot open them. In addition, there are now large, brand-new apartment buildings, built over the last few years, that are still not fully rented. They have ‘Now Leasing’ and ‘For Rent’ signs on them, which means there is a glut of market rate housing.â€
San Diego, CA Housing Prices Crater 12% YOY As Banks Drown In Foreclosures
https://www.zillow.com/san-diego-ca-92037/home-values/
Stoneham, MA Housing Prices Crater 12% YOY As Boston Area Rental Rates Tank
https://www.zillow.com/stoneham-ma/home-values/
Vancouver, BC Housing Prices Crater 10% YOY As Market Floods With Excess Inventory On Plunging Demand
https://globalnews.ca/news/5719865/greater-vancouver-home-sales-jump-in-july-but-prices-continue-steady-slide/
Santa Clara, CA Housing Prices Crater 11% YOY As Bay Area Staggers Under Weight Of Foreclosure Inventory And Mortgage Fraud
https://www.movoto.com/santa-clara-ca/market-trends/
This is classic crony capitalism failure.
“There are entire apartment buildings in Berkeley that are empty – closed to occupancy and unused for years. And the government cannot open them. In addition, there are now large, brand-new apartment buildings, built over the last few years, that are still not fully rented. They have ‘Now Leasing’ and ‘For Rent’ signs on them, which means there is a glut of market rate housing.â€
If you are a true capitalist, why aren’t you lowering prices? When you have crony government subsidies, you don’t have to.
Milli was surprised that some condo HOA fees are over $1,000 a month.
Here’s a condo with HOA fees of $3,069 a month: https://www.redfin.com/CA/Los-Angeles/10727-Wilshire-Blvd-90024/unit-306/home/8115726
Holy smokes!
Who in their right mind pays 1k for hoa’s?
I am not surprised that exists, I am happy about how many idiots will let others rip them off. Think about it, without uneducated people who buy houses at the top or over pay for hoa’s You can’t have a crash. You need losers in order to win.
Winning means, you don’t overpay for housing (don’t buy at the top and don’t pay 1k for hoa’s). For smart people this is common sense and those smart people (for instance me) will win big during the next crash.
Milli, the building is over $3,000 a month HOA, not $1,000.
They’re paying for the amenities. 24/7 doormen, on-site manager, on-site maintenance workers (my building has 3 on-site maintenance workers, plus manager, plus doormen). Most of the HOA fee in high-end buildings go to employee salaries.
Plus many high-end condos have pool, gym, library, meeting rooms, media rooms, the staff to service them.
And (like my building) they also include earthquake insurance, internet wifi, cable TV, water, and electricity bundled into the HOA.
You’re gonna end up paying for much of this stuff (empolyee salaries excepted) either as a homeowner or renter.
Son of a a landlord, you misunderstand. Who in their right mind pays 1k hoa’s was my question. Obviously 3k hoa’s are just laughable. People who sign up for this must be mental. But we do have those people, there are even people who buy houses at the top of the bubble. You can’t fix stupid.
Again, who pays 1k in hoa? I question his/her/it’s intelligence.
$3069/month HOA?? Do you get a private masseuse for that?
I see the problem.
Building amenities include concierge service, 24-hour doorman, valet parking, SECURITY, salt-water swimming pool, grassy areas, fitness center, library, storage locker, temperature-controlled wine storage, banquet & conference rooms.
Security. President Trump spends about $30M/month for White House security.
$3069/month is a super deal!
Lol i was thinking the same thing. FOR 3k HOA’s it better includes a Tesla, privat driver, private hoe, a cleaning and washing Slave, food, electricity, water, and a bunch of other stuff that’s included .
Mr. Landlord will love this:
Millennial becomes unhinged after boss corrects her spelling of “hamsterâ€: http://www.enterstageright.com/archive/articles/0819/hamster.html
As Mr. Homer J. Simpson famously said, it’s funny cuz it’s true!
And this perfectly explains our very own Millie. Even though all the evidence shows renting for life is financial suicide, Millie insists it isn’t. It’s his version of spelling hamster with a P. If he really believes, then it must be true.
And I’m just barely over 40 and if I see someone use your instead of you’re I automatically dismiss anything else hey have to say. It’s not being a spelling nazi, it’s realizing the person who wrote that is not well educated. Period.
Landlord:
Yep, because – like always – the opposite of what you advise is true. Renting is the best thing during a bubble. You just wait it out and buy 50-70% below today’s prices when the crash happens. Buying at the top is the dumbest thing one can do in life.you can’t lose by renting-you save a ton of money and you remain flexible. Plus you have zero headaches: you are one phone call away from getting stuff fixed on someone else’s expense. And the icing on the cake: if you would buy what you rent: you would pay more!!!!! Smart people have a word for it: rental parity. Most people here have never even heard of that calculation. Again, when house prices crash, I see no reason not to buy. But why overpay now if you can just rent for dirt cheap and wait until the market crashes? None of the RE cheerleaders has ever answered this question 🙂 🙂 🙂
Mr landlord loves millennials. He keeps thinking they will save the housing market…every year he will tell us: millennials will start now with getting married, having kids and buying houses in droves. He told us the same story for the last two years lol
And as always, I am 100% correct. Millies are buying homes. And they will continue to do so because renting is financial suicide.
https://www.forbes.com/sites/samanthasharf/2019/07/08/yes-millennials-really-are-buying-homes-heres-how/#44404f1b4504
Laughable, if there would be demand in buying overpriced houses we wouldn’t have all those RE cheerleaders trying so hard to make us buy at the top.
Now, that even foreigners stopped buying there are not many suckers left who buy the peak before it all crashes again.
Man oh man, things sure are going to Hell in a hand basket… this is epic !!!
https://www.calculatedriskblog.com/2019/08/los-angeles-area-home-sales-unchanged.html
In July, total sales in Los Angeles County trended at the same level as July of last year, [5,417 in July 2019 compared to 5,424 in July 2018] with an increase in sales of homes priced between $1 million and $2 million, up 5 percent year-over-year, being offset by slower sales in other price segments.
…
[F]or-sale inventory is once again trending below last year’s levels with July’s year-over-year decline for the overall inventory down one percent, and inventory priced below $1 million down 5 percent.
And wait.. there is more:
https://www.calculatedriskblog.com/2019/08/phoenix-real-estate-in-july-sales-up-10.html
Phoenix Real Estate in July: Sales up 10% YoY, Active Inventory Down 14% YoY
EPIC !!!
Wahahaaaaaha
That is so laughable. This shows how some RE cheerleaders are still drinking the kool aid and are in denial.
The entire market is trending down but they tell you this years spring selling season will be red hot. Now, after the summer, not a word of how disappointing the spring season was. Instead they pick and chose one of the market data points and tell us: Everything is awesome! Go out and buy!!
These next months / years will be so fun. while the deniers will learn how painful this RE decline will be, people on the sidelines will laugh and Invest when others have to sell at a big loss.
Millennial,
I should have apologized to you in advance for the dose of reality. I know you absolutely hate reality and prefer just repeating the same nonsense over and over again… posting incessantly about your fantasy.
I sold a house in the Bay Area in 2017 for a large profit, very lucky. Prices just seemed absolutely crazy and I wanted out of the insanity. The thing is if I stilled owned that property today I would be up another $100,000 cash at today’s Bay Area prices. Oh well.
Tankinsight,
We are on the same page. If you like reality and real data, you agree with the following:
We don’t see anymore bidding wars
Inventory has increased
There was no red hot spring selling season
Market time is increasing (listings take much longer to sell and often get removed/expire)
Prices in certain areas are already negative YoY
Buyers sentiment must have shifted as recent rate cuts did not initiate more sales
Pending sales are much lower compared to recent years
Foreign purchases has reduced significantly
Do I need to go on?
The point isn’t who sold. Congrats btw. Why would you sell as a RE cheerleader? Isn’t your story line that prices can only go up? 🙂
Are you now changing as the the market is turning?
Time for me to go on my open house tour today. Lots out there and I want o see certain floor plans, neighborhoods:) love this time of muted demand, tons of opportunities to make up your mind what you wan to buy during the crash.
The cost of renting in Los Angeles and Orange counties rose at the fastest pace in 14 years, according to the Consumer Price Index (see OC Register article below).
But I keep being told that rents are going down? As I have said umpteen times, long term rental plans in places like socal are nothing short of financial suicide.
https://www.ocregister.com/2019/08/19/rent-costs-in-los-angeles-orange-counties-at-5-8-biggest-rise-since-2005/
Increasing inventory and falling rents are the RE cheerleaders biggest nightmare. They told us this can never happen again. Yet we are seeing daily how inventory increases and prices fall left and right. My rent has never increased once. Renting is a very smart choice for those who plan to buy low during this crash. Buying now would be a great way of destroying your cash as prices continue to fall. As a renter you can build equity and invest when prices correct. As a buyer, who bought at the top (now) you can only watch and cry while others (like me) set them selfs
Increasing inventory and falling rents are the RE cheerleaders biggest nightmare. They told us this can never happen again. Yet we are seeing daily how inventory increases and prices fall left and right. My rent has never increased once. Renting is a very smart choice for those who plan to buy low during this crash. Buying now would be a great way of destroying your cash as prices continue to fall. As a renter you can build equity and invest when prices correct. As a buyer, who bought at the top (now) you can only watch and cry while others (like me) set themselves up to be rich: buy low, sell high.
The other way around doesn’t work that well 🙂
I went to the site from a recent post:
https://www.zillow.com/san-diego-ca-92037/home-values/
and it said:
“92037 home values have declined -1.1% over the past year”
But the poster claimed that:
“San Diego, CA Housing Prices Crater 12% YOY As Banks Drown In Foreclosures”
What gives ? The poster’s conclusion is not even close to what the article he posted is saying. Fake News ?
Pretty clear at his point that the COLD spring season was very disappointing this year. This will set up for lower prices throughout the rest of this year.
Plus recession fears are real….who wants to tie up hard earned money to highly overinflated asset prices now?
Millie, I keep trying to tell you this, you don’t listen. When interest rates plummet, it’s the equivalent of house prices falling. Interest rates down, prices up. Rinse and repeat my friend. And interest rates are going nowhere but down for the foreseeable future. Look for 10% price increases YOY this time next year.
_____
Sam Khater, Freddie Mac’s chief economist, says, “The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up five percent from a year ago and has noticeably strengthened since the early summer months, while refinances surged to their highest share in three and a half years. Households that refinanced in the second quarter of 2019 will save an average of $1,700 a year, which is equivalent to about $140 each month.â€
Rofl! Why don’t you go out and buy? Interest rates are still low 🙂
Tell you what, when we get a nice big beautiful crash I will be the first to share my purchase. During that time I might buy in all cash or split the downpayment up and buy two houses and finance at 1-2% rates.
That’s when I explain what it means to buy low to you. If you get excited about 140 peanuts savings by buying at the top: have at it…put your money where your mouth is.
Housing Bubble 2.0 Already Popped, FACT! – A press release on California. “Luxury Realtor Laurie Johnson, of Chase International Real Estate, discusses why investors should purchase Lake Tahoe/Truckee vacation or second homes now. ‘It’s a buyers market at Lake Tahoe and Truckee, as leftover summer inventory is going to be high and sellers should be very motivated to get into an escrow before winter snowfall sets in,’ said Johnson, who has over 18 years of experience in real estate in the Lake Tahoe/Truckee markets and has sold homes in every neighborhood in the Tahoe Sierras. ‘Savvy investors do not want to miss out on the many dream vacation homes now available.’â€
From Patch Laguna Beach in California. “In Orange County, according to the report listed in the Orange County Register, single-family homes have dropped by 8.5-percent, with a drop of the median home selling price to $780,000 county-wide. In Lake Forest, Mission Viejo, Rancho Santa Margarita, and San Juan Capistrano areas, home sales have declined by almost 20-percent, CoreLogic says.â€
“During the first six months of the year, ‘falling mortgage rates could not override the slipping consumer confidence,’ OC Register reported. In Mission Viejo, there was a decline in sales by 13.3-percent, CoreLogic reported. In Lake Forest, there was a decline of 40-percent over the past year, and the median selling price of a 92630 home was down to $692,000.â€
“In Rancho Santa Margarita, the median selling price was down to just over $600,000. In Trabuco Canyon, the median selling price dropped to just over $930,000, down 8.5-percent over 12 months. San Juan Capistrano saw the median home price drop to $769,000, declining to only 9,912 homes sold compared to 10,833 sold in 2018. All factors contribute to Orange County’s lowest home sales since 2011.â€
From Business Insider on California. “A lottery winner is selling his massive California mountain estate at more than a $19 million price cut. Originally listed for $26 million in 2018, the Eagle Crest Estate is now up for auction with Concierge Auctions at a minimum price of $6.9 million, the auction house told Business Insider.â€
“Listing agent Craig Strong said the reason for the hefty price cut is that ‘the sellers are motivated to move the property.’â€
I had a conversation with one of my kids today. She is friends with a girl a few houses down. I noticed someone is parking in front of their house every day and I asked, do you know whose car that is. She said, yeah that’s Rob’s girlfriend. So I said who is Rob? Rob it turns out is the 24 year old, brother of her friend. So I said, he’s 24 and still lives at home and now his GF is living with them too? To which my kid replies, yeah they’re both losers.
Kids can always spot the BS and are not afraid to call out the truth. A 24 year old still living at home….L-O-S-E-R. What’s even a bigger loser is the woman who’s dating this guy.
Thank God my kid gets it. As I said before GenZ will be a great generation, rebelling against the millenial nonsense.
Living at your parents as married adults is extremely smart. If you do that your IQ must already be above standard. In California, there are a few ways to save big during a housing bubble:
Live with your in laws
Live with your parents
Rent a dirt cheap apartment
Live in a trailer home
Live in a tiny home
As singles- live in a van
Once the market corrects, usually by 50-70%, you just buy a nice dream home. Easy.
Now, in other states, you still have pockets that are at rental parity. I don’t see an issue buying if you have rental parity. In California however, every house is highly overpriced. Only dummies buy highly overpriced assets.
my wife and i went back to college by receiving full scholarships so we could live and eat for free in the dorms. We just had the minor inconvenience of living on separate floors.
Working and maintaining grades to not lose the scholarships became burdensome and strained the marriage. So I convinced my parents to leave their mcmansion and move to a studio apartment (that they pay for) and my wife and I moved in with them. By lowering my parents expenses, they can now save more for my inheritance. Now patiently waiting for Christmas when everyone will give away their beach front homes like a timeshare.
In a world where 30% of 18-30 year old US males didn’t have ANY sex for the last 12 months Rob is pounding prime fresh young chicks in million dollar houses on California coast without paying for anything. Yeah real loser.
Haha, that’s too funny. Banging head boards and moaning every night in the room right next to mommy and daddy. Talk about living the American dream. Why ever move out?
pounding prime flesh? LOL. Stay classy my friend.
When I was 24 I was doing my fair share of that as well, but living on my own in an apartment without mom and dad listening. See how that works?
I used to live with my in-laws. Those where the days. Zero rent costs 🙂
Now, I rent a dirt cheap apartment and wait until the crash to buy my first home.
I am sure my in-laws heard us at night a few times hehehe.
It gets kinda loud when we are at it….even though it was a pretty big house.
They never complained…..they probably liked that we have a healthy sex life 🙂
Lower rates don’t matter. And, more importantly they are still to high. Rates will come down further.
American got smarter. Don’t buy the top
https://on.mktw.net/2zfwQoG
Risky mortgages are making a comeback
https://www.wsj.com/articles/mortgage-market-reopens-to-risky-borrowers-11566379802?mod=rsswn
What? That’s nothing like the liar loans of the 2004-2007 era.
You are talking about 5-6% high rate mortgages.
Back in the day all you had to do was fog a mirror and you had an option arm where you started paying as low as 1-2% interest only. That’s how prices increased as much as they did from 2003/4 to 2007.
Milli, 60%+ off, Housing Bubble 2.0 Already Popped- From Business Insider on California. “A lottery winner is selling his massive California mountain estate at more than a $19 million price cut. Originally listed for $26 million in 2018, the Eagle Crest Estate is now up for auction with Concierge Auctions at a minimum price of $6.9 million, the auction house told Business Insider.â€
“Listing agent Craig Strong said the reason for the hefty price cut is that ‘the sellers are motivated to move the property.’â€
Housing Bubble 2.0 Already Popped, like a zit on a teenagers face.- “The Commerce Department said on Friday new home sales dropped 12.8% to a seasonally adjusted annual rate of 635,000 units last month. It was the biggest monthly decline since July 2013. The median new house price was $312,800, down 4.5% from a year earlier. There were 337,000 new homes on the market last month, up 1.2% from June. At July’s sales pace it would take 6.4 months to clear the supply of houses on the market.â€
“Foreign investors purchased $77.9 billion in residential property in the 12 months ending in March, down 36% from the previous 12-month period, the National Association of Realtors said. Meanwhile, more Chinese homeowners have been selling their American houses and condos because they can’t pay the maintenance costs with their money trapped in China, says Jeff Lu, vice president of Fidelity National Title Insurance Company. In Irvine, population 280,000, ‘There are 65,000 houses… and 21,000 of them are owned by Chinese.’ Lu says.â€
“The pullback is depressing prices. In the first half of the year, the median home sale price in Irvine fell to $820,000 from $834,000, according to Zillow. ‘It’s good news for local Americans who are looking to buy a home – larger supply and less competitors,’ Lu added.â€
Cheerleaders, Housing Bubble 2.0 Already Popped, save the BULLSHIT for the open house realturds. Newport Beach, Laguna Beach, Costa Mesa home sales drop 12% as O.C. suffer worst 1st half in 8 years.
Home sales for 2019’s first half totaled 1,315 vs. 1,492 a year earlier
https://www.ocregister.com/2019/08/19/newport-beach-laguna-beach-costa-mesa-home-sales-drop-12-as-o-c-suffer-worst-1st-half-in-8-years/
Recent reduction in mortgage rates did not help to keep the bubble inflated
https://wolfstreet.com/2019/08/23/plunging-mortgage-rates-no-relief-for-dropping-new-house-prices/
Shiller says recession likely to come soon and millennials will benefit from it.
Its probably a good idea to spread panic, not spend money and to wait for a recession
https://www.cnbc.com/2019/08/22/robert-shiller-says-recession-fears-may-make-it-a-reality.html?__source=facebook%7Cmain
Housing Bubble 2.0 Already Popped- Even HDTV Know This!
‘Fixer Upper’ houses can be tough to sell in Waco, real estate agents argue
https://www.foxnews.com/real-estate/fixer-upper-houses-waco-sell-real-estate-agents
But I was told repeatedly by Millie that rent prices are crashing. Weird huh?
“The national average rent reached $1,469 last month, a 3.4% increase from July 2018 and 0.2% increase from June 2019. Santa Monica and Marina del Rey are the state’s most expensive cities for renters, with average rents of $3,796 and $3,585. Doug Ressler is the manager of business intelligence at Yardi Matrix, a real estate intelligence company that produces this rental data. He says part of the problem is that more Americans are looking for apartments without a corresponding increase in apartment supply. ”
Renting long term is financial suicide. Don’t do it kids.
Absolutely right! Rents are the way to go. Rents in California are dirt cheap compared to buying highly overpriced real estate. During a bubble you rent or even smarter: live with parents or in-laws. And as soon as the bubble pops you buy a very nice house at 50% off.
Actually, historically, prices fell by 50-70% during the ten year cycles. It’s what the experts (like me) call boom and bust cycles.
We are trying to sell our house in SoCal since last year. We bought a mansion in the mid-west. The big issue is that the market in California is dead. We had several open houses and price reductions. Hoping for a miracle and hefty rate cuts.
It looks like there is a major recession coming in the US global growth is slowing down big time.
I’ll wait with my purchase until the crash is over
Housing Bubble 2.0 Already Popped, Cheerleaders are crying like Liberals on Election night.
Orange County Homebuying Plunges To 8-Year Low As Home Prices Stall
https://www.zerohedge.com/news/2019-08-22/orange-county-homebuying-plunges-8-year-low-housing-prices-stall
https://www.theatlantic.com/ideas/archive/2019/08/millennials-are-screwed-recession/596728/
Be careful what you wish for…
Love it! Let’s stop spending and wait for a great, deep recession!!!! I want housing and stocks to crash haaaard
I am not a Millenial. Does not affect me. I am fine. //ironie off
It’s coming, friends!!!!! Crash!!!!!!!
Housing recession coming next year
https://www.investopedia.com/investing/next-housing-recession-2020-predicts-zillow/
Excellent news, the housing market is slowing. Hahhaha didn’t our RE shills tell us hat can never happen?
They told us:
—-Foreigners will buy – wrong. That slowed tremendously
—They told us that millennials will go out and buy in droves – wrong. Millennials are much smarter and learned from the mistakes previous generations made. Remember last time? 7 Mio foreclosed
—-They told us, there is no inventory! – wrong, inventory has increased sharply
—-they told us, buy now!! Before interest rates go up!! – wrong, interest rates will continue to fall
https://on.mktw.net/2zqw7kK
See a pattern here? It’s not that hard to see….hint: the exact opposite is true of what RE shills tell you. Isn’t that simple? It has worked great for me. I am sitting on a large cash balance ready to invest when the crash is here. Thank you RE shills, without you it wouldn’t be a crystal clear in terms of what the right strategy is.
No wonder they hate when you say my rent is cheap and i park my cash. They want the opposite, they want you to buy at the top to keep the bubble going for a while longer. 🙂
I sent out ten lowball offers and one is going for it l!!!!!!!
Now I have to make up my mind if I even want to buy now before the big crash or wait for even lower prices…hahah….my girlfriend said those are first world problems….haha
If the low offer and low interest rates have you below rental parity definitely jump on it.
Don’t make the mistake Millie is going to make.
Totally agree with tank in sight: don’t buy a property that’s not below or at rental parity.
Rents are sooooooo cheap compared to buying during the peak of the bubble.
Buy when it crashes. You will never-ever regret buying low 🙂
Despite “Super-Low Mortgage Rates”, July Pending Home Sales Plunge Back Into Contraction
https://www.zerohedge.com/news/2019-08-29/despite-super-low-mortgage-rates-july-pending-home-sales-plunge-back-contraction
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