Housing market gonna take a dump in the next year?

[FelixstoweF.2]

only if you are looking for an exact repeat of the most recent one

Funny thing about housing bubbles they all pop due to a collapse of the market-- that means foreclosures and the more you get the bigger the problem. As for the Mortgage backed Securities they still exist. And so do CDO's they are regulated a bit now but in the end the markets haven't been totally regulated to reduce the speculation problems. And Private Equity Firms will want to get rid of AirBnB Properties that are becoming too costly to operate and generating low profits. And they will bundle up these properties into new things to sell off to other unsuspecting investors.

 

[FelixstoweF.2]

Im to lazy to search but I think its partially from “The Big Short”

It's not the big short but the market hasn't really changed substantially since the 2008 collapse. It has a little more regulation but since then it has allowed many of the same practices to continue. Especially the easy access to credit. We had a period of easy access to credit for many buyers especially private equity buyers in the Pandemic with low interest rates that drove them to purchase homes-- so, we've blown up the housing market-- now we have higher interest rates which is pushing out home owners who owned homes (primary residencies) and also bought up a ton of secondary homes to play in the Short-Term rental game. That game is coming to an end quicker than most thought in fact the slow down started in 2022 and has continued and is growing (NYT). This pressure will put extra pressure on market. Then you have the rental market having issues of nearly half of all renters in the country as of January 2024 CNN.com reported couldn't really afford their apartments many of which owned by private equity firms. That means private equity firms won't be able to show profits and that means they will start to shed the apartments that are struggling. And this will mean general collapse in prices for both Home Owners and Renters-- further more the bigger issue will be insurance in states like Florida and California where insurance companies are moving out due to extreme weather and fire liabilities.

So, it won't collapse exactly like 2008-- but it will have some of the same features. I would look for liar's-loans on properties increasing. No they aren't called lair's loans because the applicant lies on them its because the issuer lies. That's how these companies will pass off these bad investments to wannabe landlords.

https://www.nber.org/system/files/working_papers/w18027/w18027.pdf

 

[FelixstoweF.2]

This quote is false too. There are about 5or 6 variations about it. It seems to be actually based on a quote by John Maynard Keynes about Inflation and then altered to fit this scenario.

But that is just another interesting tie-bit I think. And Ironically Keynes was talking about Lenin's idea that greatest way to end capitalism is to attack the value of its currency.

 

[Projectjunkie]

I forgot to come back and answer this one. Not above it. I don’t have the % capital to plunk down on bare property. There’s plots I could pay cash for but then I don’t have the cash for the Utility installs.

What's your thoughts on that 130k double wide on 4.85 acres?
I know zero about the area or if it's a non starter, but taking a guess at your abilities and disposable income, you could probably take on that place with minimal down, then pay cash for a shop and remodeling over a year or so and have yourself a pretty sweet setup.

That's a pretty retarded way to look at that situation.

For one, they could have moved and rented it out more than likely. Recessions usually have high demand for rentals.

"upside down" only really matters if you are trying to sell. As long as you can make the payments, it's still yours and will eventually recover.

Nothing to show besides living in a house for 12 years? Did they literally break dead even on the sale? So not just selling for the same price they bought it for, but what they had payed it down to? What was the reason to sell?


Some people just panic when their house value drops, and I get it, but it will come back, and eventually gain equity. My inlaws bought at a peak in 1990, moved shorty after and sold it for over 3 times what they payed 15 or so years later. They knew lots of people who just panicked and sold when priced started dropping. Like the people who pull their investments out when they start dropping "so they don't loose it all"

I don't think it's retarded to address that some people get fucked by timing, or that some people's housing needs change prior to the "in 15 years you'll be glad you stayed" mark.
Some people live in a house for 40 years, work the same job for 30, but not everybody.

I don't know the details of their purchase and sale, but the look on the wife's face was that she'd just completed a 12yr prison term, no shit, that particular home buyer was miserable due to their decision.


As for being a reluctant landlord in 2009, I did it. There was a high demand for rentals, because people were getting laid off and losing their home to foreclosure and needing to find cheaper housing in an unstable labor market. Yeah, people needed a place to live, but they didn't have any fucking money

It fucking sucked, my tenant got laid off and found new work 6 times in 18 months and tried to stay current until he got divorced and fell apart. At that point I was wiped out financially and emotionally and walked away.

Now I try to time the market better. And intend to have land big enough for my kids to live on if they wish while starting out

 

[WaterH]

To some extent me, bought a fixer upper 8mo ago, sold my current house last month, going to park the proceeds in a CD instead of paying off new mortgage for 12mo to see what happens. I'll lose 1.5% on the spread

The problem with this is cash is not a good thing to hold right now. In the last bubble burst, I would have done so much better to have waited one year to buy, but cash wasn’t losing value like today.

I personally think the reason there will be a housing crash is not because of too much easy credit like 2008. It’s because people can’t make their payments because they are spending their money on other stuff. (Like food) I don’t think Housing prices are going to crash like in 2008, they are just becoming unaffordable. In your case, you are not in danger because you can just pay off your mortgage at anytime, but if you are trying to make a killing, I don’t see it happening holding cash.

I think that’s what I was trying to get at earlier somewhere. This place wasn’t established enough for cool 1910 shacks to be available. Farmington and the surrounding areas didn’t really boom until the 90’s.

Lots of plots with utilities and junk 30 year old mobile homes on them though. I’m sifting through them looking for city water, 200 amp service and maybe a useable septic system.

The electric service is not that expensive to upgrade. A good well and septic would be a nice find though.

 

[mobil1syn]

I don't think it's retarded to address that some people get fucked by timing, or that some people's housing needs change prior to the "in 15 years you'll be glad you stayed" mark.
Some people live in a house for 40 years, work the same job for 30, but not everybody.

people buy with the intent on upgrading because they have faith the market will increase failing to realize the margin to their next home increases. i would also be curious to know how much of their incomes on % base was the mortgage payment.

people make large assumptions regarding income and increase in value with no contingency planning. a large portion of the population has only seen sub 5% rates and prices steadily increasing with some large swings but overall an increase.

the only way housing cost comes down is with a drop in salaries and no one wants that so embrace it for what it is.

 

[Projectjunkie]

The problem with this is cash is not a good thing to hold right now. In the last bubble burst, I would have done so much better to have waited one year to buy, but cash wasn’t losing value like today.

I think the inflation tide has started to go out. Of course there's things that are still expensive, but a 2x4 is $3.68 now, a little Caesars pizza settled at $7, there's price cuts on leftover 2023 trucks, price drops on houses, people aren't quitting their jobs like they were, ie, the bosses money is worth enough for them to stay, the K5 blazers and vintage mustangs that were "never gonna sell it"last year are getting offered at pretty reasonable prices, because now they value the money more than the asset


Now in 5-10 years there's gonna be another inflation shit show, but a guy can make moves in the meantime if he's inclined


I've done OK for myself buying cars in the fall when money is scarce, and selling in the spring when tax return money is plentiful, the boom bust cycle is the same idea, just a bigger trend and you have to look for the signs, it's not on the calendar

 

[arse_sidewards]

I think the inflation tide has started to go out. Of course there's things that are still expensive, but a 2x4 is $3.68 now, a little Caesars pizza settled at $7, there's price cuts on leftover 2023 trucks, price drops on houses, people aren't quitting their jobs like they were, ie, the bosses money is worth enough for them to stay, the K5 blazers and vintage mustangs that were "never gonna sell it"last year are getting offered at pretty reasonable prices, because now they value the money more than the asset

You're mistaking the economy taking a shit and more or less freezing the price of highly elastic and fairly luxury goods (project cars, home renovation supplies, eating out, etc) for inflation cooling off.

 

[CarterKraft]

Hasn't happened yet...

 

[Projectjunkie]

You're mistaking the economy taking a shit and more or less freezing the price of highly elastic and fairly luxury goods (project cars, home renovation supplies, eating out, etc) for inflation cooling off.

At this point we're all speculating. I'm not all in on any front, I've got inflation hedges, and cash for the crash, just trying to make the most of it, and pointing out things to my kids to watch for so they can make informed decisions in the future

Inflation deflation biflation stagflation, time will tell

 

[JR4X]

What's your thoughts on that 130k double wide on 4.85 acres?
I know zero about the area or if it's a non starter, but taking a guess at your abilities and disposable income, you could probably take on that place with minimal down, then pay cash for a shop and remodeling over a year or so and have yourself a pretty sweet setup.

Hadn’t really considered that at this point. Thought I’d look at places more complete because what I don’t have disposable is time. I’m pretty well pre obligated all the time so taking on projects isn’t feasible.

To get a loan on a modular it has to have a real foundation. Otherwise to buy one you have to have more down and get an unconventional loan.

 

[Hydromaster]

A 30% downward correction.



But with high inflation, high price of building materials, lack of labor and housing prices will continue to climb.

 

[Projectjunkie]

Hadn’t really considered that at this point. Thought I’d look at places more complete because what I don’t have disposable is time. I’m pretty well pre obligated all the time so taking on projects isn’t feasible.

To get a loan on a modular it has to have a real foundation. Otherwise to buy one you have to have more down and get an unconventional loan.

Dunno, about all that, I just sold a 1978 single wide with an FHA loan, there's some special tie down system that cost me about 1700 installed, that was a requirement for the loan/ sale.

I used steel ag panels for the skirting

Might be worth looking into. I worked with an old guy who had some rentals. I was curious about the markets and asking a bunch of questions. He said, "go waste some people's time, pretend you want to rent their house and go see what the market is"

That stuck with me. Find a cute realtor and ask her about cheap mobiles and financing. Probably get a bj out of it too

 

[JR4X]

Dunno, about all that, I just sold a 1978 single wide with an FHA loan, there's some special tie down system that cost me about 1700 installed, that was a requirement for the loan/ sale.

I used steel ag panels for the skirting

Might be worth looking into. I worked with an old guy who had some rentals. I was curious about the markets and asking a bunch of questions. He said, "go waste some people's time, pretend you want to rent their house and go see what the market is"

That stuck with me. Find a cute realtor and ask her about cheap mobiles and financing. Probably get a bj out of it too

I think it’s state specific. Here’s the rules in New Mexico. I’ve verified in several places, you can’t get a loan for titled trailers sitting on property in NM. AZ might be different.

Manufactured Home Financing | Housing NM | Housing New Mexico | MFA

We are pleased to offer the same rates to buyers of manufactured homes as we do to purchasers of site-built homes.

housingnm.org

 

[Projectjunkie]

I think it’s state specific. Here’s the rules in New Mexico. I’ve verified in several places, you can’t get a loan for titled trailers sitting on property in NM. AZ might be different.

Manufactured Home Financing | Housing NM | Housing New Mexico | MFA

We are pleased to offer the same rates to buyers of manufactured homes as we do to purchasers of site-built homes.

housingnm.org

I think the guy that did my "tie-down system" was a licensed fha/Hud guy. I believe that is the "permanent foundation"

His complaints were the steps didn't have a sufficient handrail, were not painted, not sitting on a paver brick (pressure treated lumber would be OK on ground)
Needed "tie down system"
Needed x amount of cross flow ventilation per sqft of house
Vapor barrier under house Needed repaired/ replaced/ stapled up. This is black trash bag looking stuff

I fixed the steps, the rest was about $2500 cash and want all that fancy, just needed to check boxes. I think you're options for financing a mobile are a lot better than you might think, if you choose to go that route

I also bought a hud foreclosure mobile in 2008, it was 2 years old at the time, hud was certainly in the mobile business at that time



Here, here's a search for "realtors Farmington female" looks like there's some local talent the rest is up to you

Bottom left brunette is certainly my type

 

[WaterH]

A 30% downward correction.



But with high inflation, high price of building materials, lack of labor and housing prices will continue to climb.

Interesting comment. I agree, high or low inflation, it’s here to stay. But if you accept that fact, how will there be a 30% drop in prices? I think more likly prices will stall. They won’t go up because no one can afford them and they won’t go down because no one can afford to build new.

 

[posford]

Bought my house for $190k in 12/18, under contract right now to sell for $415k 1.5 acre 2bd1ba. Going to ride out the market living with my dad, with a plan to build something on family property in a year or so

 

[Clemson13]

This is true. I have lived in this house 11 years. Originally had a 30 year mortgage with a 3.375% rate never paid a dime extra. Refied in late 2020 for a 2.5% rate to a 20 year mortgage. Basically I shaved 3 years off my mortgage (23 years remaining to 20 years left) for the same principal and interest payment.

Now what has changed in the 11 years I have been here. Insurance was 1100 per year when I moved here and now costs $3500 per year. Taxes were $8k per year when I bought and now over $15,000 and climbing. Now my house went from $356k to about $900k with most of that run up since COVID. Values don’t matter to me as I am not selling for another 7-10years. I am just getting jacked with insurance and taxes.

Texas?

 

[gunracer1]

Texas?

i bought 10 acres in 18, sold it for triple last year. just west of dfw.

 

[clodhopper]

i bought 10 acres in 18, sold it for triple last year. just west of dfw.

These comments make me think this is in the coming in the near future....

 

[DRTDEVL]

Why did I see "Bailey Slobjob" at first glance?

 

[grumpy356]

I think the guy that did my "tie-down system" was a licensed fha/Hud guy. I believe that is the "permanent foundation"

His complaints were the steps didn't have a sufficient handrail, were not painted, not sitting on a paver brick (pressure treated lumber would be OK on ground)
Needed "tie down system"
Needed x amount of cross flow ventilation per sqft of house
Vapor barrier under house Needed repaired/ replaced/ stapled up. This is black trash bag looking stuff

I fixed the steps, the rest was about $2500 cash and want all that fancy, just needed to check boxes. I think you're options for financing a mobile are a lot better than you might think, if you choose to go that route

I also bought a hud foreclosure mobile in 2008, it was 2 years old at the time, hud was certainly in the mobile business at that time



Here, here's a search for "realtors Farmington female" looks like there's some local talent the rest is up to you

Bottom left brunette is certainly my type

I don't think of myself as sexist,

But seeing the industry is run by women explains so much that I never really put together until now.

I guess I am sexist, and a little disappointed in myself with the self reflection.

 

[YotaAtieToo]

What's your thoughts on that 130k double wide on 4.85 acres?
I know zero about the area or if it's a non starter, but taking a guess at your abilities and disposable income, you could probably take on that place with minimal down, then pay cash for a shop and remodeling over a year or so and have yourself a pretty sweet setup.





I don't think it's retarded to address that some people get fucked by timing, or that some people's housing needs change prior to the "in 15 years you'll be glad you stayed" mark.
Some people live in a house for 40 years, work the same job for 30, but not everybody.

I get it, I'm very anti-commitment. But the house only traps you if you let it.

I don't know the details of their purchase and sale, but the look on the wife's face was that she'd just completed a 12yr prison term, no shit, that particular home buyer was miserable due to their decision.

Again, that's on them. They didn't have to stay, they probably just got bit by the "were loosing money, we need to get out" illusion.

As for being a reluctant landlord in 2009, I did it. There was a high demand for rentals, because people were getting laid off and losing their home to foreclosure and needing to find cheaper housing in an unstable labor market. Yeah, people needed a place to live, but they didn't have any fucking money

It fucking sucked, my tenant got laid off and found new work 6 times in 18 months and tried to stay current until he got divorced and fell apart. At that point I was wiped out financially and emotionally and walked away.

Now I try to time the market better. And intend to have land big enough for my kids to live on if they wish while starting out

All I know is that I turned 18 in the end of 2005, so I walked into the crash without knowing it. I listened to people say "it's not a good time to buy, it's going to drop next year" for 10 years before buying in 2020 at "the peak" I could have probably bought a modest house in ~2011-12 for a little over $100k or ~2016 for $200k, but waiting for "it's going to drop" got me a house at $325k.

I still don't feel remotely trapped, but I guess I haven't "lost money" yet.

 

[JR4X]

I think the guy that did my "tie-down system" was a licensed fha/Hud guy. I believe that is the "permanent foundation"

His complaints were the steps didn't have a sufficient handrail, were not painted, not sitting on a paver brick (pressure treated lumber would be OK on ground)
Needed "tie down system"
Needed x amount of cross flow ventilation per sqft of house
Vapor barrier under house Needed repaired/ replaced/ stapled up. This is black trash bag looking stuff

I fixed the steps, the rest was about $2500 cash and want all that fancy, just needed to check boxes. I think you're options for financing a mobile are a lot better than you might think, if you choose to go that route

I also bought a hud foreclosure mobile in 2008, it was 2 years old at the time, hud was certainly in the mobile business at that time

Are you sure you’re thinking this through correctly as a buyer not a seller? If I am interested in a modular on land that isn’t already “tied down” or on a certified permanent foundation I can’t get financing for it. I’ve been on the phone with the proper people today and confirmed that to be true.

Modular carry a higher percent on the mortgage and insurance for them is slightly higher. I’m still looking at them but they have to be priced right to make it make sense.

 

[mobil1syn]

Are you sure you’re thinking this through correctly as a buyer not a seller? If I am interested in a modular on land that isn’t already “tied down” or on a certified permanent foundation I can’t get financing for it. I’ve been on the phone with the proper people today and confirmed that to be true.

it can be part of the deal, the seller can and often will meet the need of your financing if the deal is right.

not being permanent is discovered as part of the inspection, it gets called out, owner fixes it, gets signed off, you get funded.

 

[Projectjunkie]

Are you sure you’re thinking this through correctly as a buyer not a seller? If I am interested in a modular on land that isn’t already “tied down” or on a certified permanent foundation I can’t get financing for it. I’ve been on the phone with the proper people today and confirmed that to be true.

Modular carry a higher percent on the mortgage and insurance for them is slightly higher. I’m still looking at them but they have to be priced right to make it make sense.

Looking at all the mobiles I've seen in NM while traveling, I highly doubt that they were paid for in cash, or have a $20k foundation, I think while "permanent foundation" sounds really fancy and expensive, I think that you'll find it actually is a pretty hokey setup that came out of a bed frame factory that meets the requirements for financing.

I'd bet you $20 that if you called this listing agent, he'd refer you to his preferred lender who would be happy to get you a mortgage

I'm not trying to sell you on a mobile, only that it is a solution that you may find acceptable


Mobile financing may be a half a point higher than site built.
Insurance might be a little higher dollar for cash value, but the usually lower dollar value seems to be pretty cheap.
Not every company insures mobiles. My homeowners policy with some upgraded coverages is under a grand a year.

I'd just call and ask, if nothing else you get some info

 

[FelixstoweF.2]

A 30% downward correction.



But with high inflation, high price of building materials, lack of labor and housing prices will continue to climb.

How can you have both an increase in prices and a downward correction of 30%? Besides in markets like Boise, Idaho the market in 2021 was 86.4% over inflated according to Forbes , Bloomberg , or Fortune I cannot remember which periodical I read that in. I realize that if you downward correction in prices of 30% then building materials, labor and inflation will also drop.

 

[clodhopper]

Are you sure you’re thinking this through correctly as a buyer not a seller? If I am interested in a modular on land that isn’t already “tied down” or on a certified permanent foundation I can’t get financing for it. I’ve been on the phone with the proper people today and confirmed that to be true.

Modular carry a higher percent on the mortgage and insurance for them is slightly higher. I’m still looking at them but they have to be priced right to make it make sense.

Modular is the red headed step of the housing industry. Banks are terrified to touch em. Not only is the issue of "does it still have the wheels on it?" crap, but mods are built to the mobile home building code, so there are shortcuts, which you run into doing home improvements. I dont know about your state law stupidity. I have struggled to obtain financing on mods in Colorado. Wells Fargo was the only bank that would touch em in our area.

 

[WTF?]

To get a loan on a modular it has to have a real foundation. Otherwise to buy one you have to have more down and get an unconventional loan.

Dunno, about all that, I just sold a 1978 single wide with an FHA loan, there's some special tie down system that cost me about 1700 installed, that was a requirement for the loan/ sale.

I used steel ag panels for the skirting

I think it’s state specific. Here’s the rules in New Mexico. I’ve verified in several places, you can’t get a loan for titled trailers sitting on property in NM. AZ might be different.

Manufactured Home Financing | Housing NM | Housing New Mexico | MFA

We are pleased to offer the same rates to buyers of manufactured homes as we do to purchasers of site-built homes.

housingnm.org

that link defers to HUD's definition;

My understanding based on dialogue with mortgage guys is that meeting the HUD definition of 'permanent foundation' requires only that block pier supports need to have poured concrete footing and stacked blocks must be buttered with mortar and not dry-stacked. All that in addition to strap tie downs. (I do not recall is skirting is officially required, but it'd be pretty ghetto to have an unskirted mobile. But a full perimeter foundation wall is not necessarily required.

i've got one which meets almost none of the hud requirements and thus cost me a bunch more in interest rate but is otherwise ideal for me since i'm planning to have it towed away as soon as the loan is paid off and have a nice field with a way over speced RV hookup with designated septic and 100a service.

 

[JR4X]

Don’t want anyone to think I think I’m above living in a trailer house. Lived in them growing up. Lived in one from 2019 through 2022. I mean it when say I don’t prioritize my living situation over traveling and racing. A nice house with green grass is not even on my long list of desires, let alone the short one. A trailer would suit me just fine. I’m just in the very beginning stages of working my way through the process of purchasing my own place again. Haven’t signed exclusivity with a realtor yet but I’m talking to a couple different ones. Got pre approval for a mortgage for certain conditions.