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Housing market theories

Noticing stuff sitting here, and see new price and price reduced signs in some yards. The neighborhood we sold in this time last year now has a bunch of houses sitting on the market.
 
New Construction slowing down a bit, still looking good for the summer here, but definitely not as good as summer of 22’. Perfect time to build my own shit
 
Jag said:
What are yall seeing first hand with housing at the moment?

With interest where it is im not seeing anything moving and over the last 6 or 7 months only minor price drops from the highs so it seems to all just be sitting.

I hate to be that asshole looking for someone thats hurting and just needs out but Im wondering if its time to start making insulting lowball offers yet.
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Best of luck offering a low ball offer anywhere. Everyone thinks we are going to see another 2010 and dreams of picking up cheap rentals. They all forget the banks just sat on homes and leaked them out slowly to keep prices high. You’re going to get your offers denied so go ahead and make as many as you want. If you do, please report back with your realtor’s words about offers. I’m sure they’ll love you dragging them along.
 
RunningProblem said:
Best of luck offering a low ball offer anywhere. Everyone thinks we are going to see another 2010 and dreams of picking up cheap rentals. They all forget the banks just sat on homes and leaked them out slowly to keep prices high. You’re going to get your offers denied so go ahead and make as many as you want. If you do, please report back with your realtor’s words about offers. I’m sure they’ll love you dragging them along.
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Yes….. remember all the foreclosed houses that sat…. For years!!!!! My business partner bought a gutted foreclosure…. Took 2 years to negotiate and close!!!!! Banks are in it for the long-term!!!!
I don’t see lots of foreclosures in the future…. Different game now!!!!
 
RunningProblem said:
Best of luck offering a low ball offer anywhere. Everyone thinks we are going to see another 2010 and dreams of picking up cheap rentals. They all forget the banks just sat on homes and leaked them out slowly to keep prices high. You’re going to get your offers denied so go ahead and make as many as you want. If you do, please report back with your realtor’s words about offers. I’m sure they’ll love you dragging them along.
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Making offers dont cost me anything but you may be right they get turned down. thats what im wondering about. Are people hurting to sell before the banks get them or just rich enough to keep churning out those those payments on cheap interest?

The banks your talking about didnt hide the fact they were foreclosing back then but you dont hear much about that these days.

I sold 3 in the last year at redulous prices and still have 3 left so i guess im in a pretty good spot, 2 im willing to sell if the price goes gonzo again and money to spend if it all collapses. Ive got no reason to drag a realtor along with everything being online anymore.
 
What kind of property are you looking for? Wholesales are the best around here unless you know the person selling or luck into something. Anything on the MLS will be overpriced or get you into a bidding war imo.
 
Pocahontas said:
What kind of property are you looking for? Wholesales are the best around here unless you know the person selling or luck into something. Anything on the MLS will be overpriced or get you into a bidding war imo.
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Im not really looking for anything particular, investment for the future mostly. The whole buy low and sell high thing.

3x2 close by, 40’ X 1??’ Commercial building, 100 acres in the middle of no where, 10'x10’ with a pole and cheap strippers, whatever.
 
Gregj50!!!!! said:
Yes….. remember all the foreclosed houses that sat…. For years!!!!! My business partner bought a gutted foreclosure…. Took 2 years to negotiate and close!!!!! Banks are in it for the long-term!!!!
I don’t see lots of foreclosures in the future…. Different game now!!!!
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Very much this. At the height of what happened last time we were in the closure phase of two properties in Vegas that our minds changed and we just gave them up. I am pretty sure the bank sat on them after that until the market recovered somewhat and probably increased their take at least 5 times over what we would have paid.
 
In my opinion we are not seeing significant price decreases because we are in the equivalent of 2007, with a stagnating economy that hasn't been hit with a hard blow yet. When that blow comes, people will start selling in a hurry because they can't afford the houses they are in, or speculators will bail when they see a steep downward trend.

But yes, I remember banks sitting on forclosed properties last time to try to keep the market from being depressed further (with the free money they got from the feds). I'm sure it will be no different this time.
 
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Jag said:
Making offers dont cost me anything but you may be right they get turned down. thats what im wondering about. Are people hurting to sell before the banks get them or just rich enough to keep churning out those those payments on cheap interest?

The banks your talking about didnt hide the fact they were foreclosing back then but you dont hear much about that these days.

I sold 3 in the last year at redulous prices and still have 3 left so i guess im in a pretty good spot, 2 im willing to sell if the price goes gonzo again and money to spend if it all collapses. Ive got no reason to drag a realtor along with everything being online anymore.
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You missed your chance to sell. It’s the only time you make money on rentals. I hope it doesn’t collapse so people with multiple homes don’t flood the market when they can float 2-4 mortgages for six months.
 
Mikel said:
In my opinion we are not seeing significant price decreases because we are in the equivalent of 2007, with a stagnating economy that hasn't been hit with a hard blow yet. When that blow comes, people will start selling in a hurry because they can't afford the houses they are in, or speculators will bail when they see a steep downward trend.

But yes, I remember banks sitting on forclosed properties last time to try to keep the market from being depressed further (with the free money they got from the feds). I'm sure it will be no different this time.
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I didn’t buy in 2007, so I don’t know this answer.
We’re people being offered mortgages at 3% interest in 2007?

I thought it was more ‘get three mortgages and pay 0% out of pocket’ type practices where people got hurt.
 
RunningProblem said:
You missed your chance to sell. It’s the only time you make money on rentals. I hope it doesn’t collapse so people with multiple homes don’t flood the market when they can float 2-4 mortgages for six months.
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Not entirely true. If your willing to do your own work and park money for a few years you can make good money on rentals. Usually I target to double or triple rent from before/after a project. I only buy absolute shit holes though so if you are trying to buy a turn key rental then you are correct. But the whole key with rentals is you are getting someone else to pay for your asset.


Quadrupled my money on this four unit in two years but it was an absolute wreck that went to the studs and got new everything. Could have held for 15-20 years and probably got x10 but take the money and run because the area is still not 'nice'. Nice areas kill you on tax's though.

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Jag said:
Im not really looking for anything particular, investment for the future mostly. The whole buy low and sell high thing.

3x2 close by, 40’ X 1??’ Commercial building, 100 acres in the middle of no where, 10'x10’ with a pole and cheap strippers, whatever.
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You need to find a niche and become a semi expert in it to make sure you don't get screwed on it. I personally wouldn't be buying anything right now unless it was a screaming deal or i was holding it for the long haul in a developing/gentrifying area.
 
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Yes but if you hold them they also make you money, single family homes will never make you a large cash flow until it's payed off or the rent market drives rates higher. That property would have payed for it self in 7 years it was positive cash flow over loan amount of 5k a month. I was planning on keeping it long term because it was right next to a hospital and units were 1800-2000 sqft. Dude came in and offer me four times what I had in it so took the money, he will still probably 1.5 his money over next 10 years and they will get split into condos i would guess.

Rentals aren't quick money like a normal flip though its a long term investment. Passive income is extremely nice to have though.
 
Rentals depend a lot on how much regulatory interfering to have in your jurisdiction. Renters have more rights than landlords here so a prickly/righteous tenant can be a major setback. I'm into DIY repairs, but my own place takes up my time plenty. I don't have 2x the time to blow.

Also, there's a significant chunk of folks that missed their shot before interest rates took off and market cooled. They already decided they were moving. They're bitter and still hungry for anything that looks like a deal they could swing. Bargains will be a scarce and brief.
 
Also, my father inherited a house in North Austin, TX... the place where "insert tech company here" has moved to. The whole area is gentrified by California hipsters with beto signs.

12 months ago it was 600k. 6 months ago it was 475k. Now its $350k. This is based solely upon the non-stop solicitors who want to buy the house sight-unseen.

I only know because they call me and the house has become my problem.
 
Southernfriedcj8 said:
New construction canary in the coal mine:

My porta jon guy had 140 toilets out a few months ago. Now he has 87 out.

We also have subs calling looking for work. That hasn't happened in years.
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From the horse's mouth right there







Also, I make it a point to drive by new subdivisions to see if they're working Saturdays. Last year they were even working Sundays. Two months ago I saw a skeleton concrete crew on a Saturday, but that's more concrete availability, those guys probably took half the week off.
Last couple Saturdays have been dead.


I'd really like to buy some foreclosures, but yall are probably right, the banks will just sit on them.


Land leverages hard both up and down, there's an area I'd like to buy in.


My next door neighbor is a realtor and buys a lot of mobiles on land. We were talking a few days ago, he says instead of trying to buy a 300k house for 200k buy 10 trashed mobiles on an acre each for 20k each. When the market turns up, fix them up, the ones that fha qualify you sell fha and cash out at 180k each, the ones you have to carry you carry, he does not want to foreclose, he wants solid employed guys with bad credit, he doesn't want to own it again. Then you sell some for cash to the out of staters/ retirees.

Seems to work for him. This is probably what I'll be looking for.

He also said you don't need to cherry pick the absolute bottom. Just sit and wait, when it starts going back up, you buy, it's better to buy a little after the turn, than well before it.
 
RunningProblem said:
I didn’t buy in 2007, so I don’t know this answer.
We’re people being offered mortgages at 3% interest in 2007?

I thought it was more ‘get three mortgages and pay 0% out of pocket’ type practices where people got hurt.
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I bought in 2008 at a 6% interest mortgage, whisky convinced rates would start going back up very soon to counter the impening inflation :lmao:

Early is the same as wrong :rasta:
 
TRINDU said:
Also, my father inherited a house in North Austin, TX... the place where "insert tech company here" has moved to. The whole area is gentrified by California hipsters with beto signs.

12 months ago it was 600k. 6 months ago it was 475k. Now its $350k. This is based solely upon the non-stop solicitors who want to buy the house sight-unseen.

I only know because they call me and the house has become my problem.
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We are up to 4 trash houses being or have been gutted and rebuilt on my block.

None have sold in the past few months, should be plenty of downside still there. I'm curious what they will bottom at
 
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This is an interesting chart. Mortgage rates have trended downward since the early 90s.

Bill Clinton became the President in 1993. The downward trend begins before him. Someone in their 40s now collecting social security probably thought the dip below 8% was a crash and those 2 years resetting to what things were probably hurt the same as 4% to 8%.
 

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Yeah, all this talk about high interest rates kinda baffles me. High compared to recent years? Sure. But they're historically normal interest rates. We've created massive bubbles with practically free money for a decade. The prices aren't sustainable with historically normal interest rates. They rely on practically free money.
 
RunningProblem said:
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This is an interesting chart. Mortgage rates have trended downward since the early 90s.

Bill Clinton became the President in 1993. The downward trend begins before him. Someone in their 40s now collecting social security probably thought the dip below 8% was a crash and those 2 years resetting to what things were probably hurt the same as 4% to 8%.
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my house before clinton was 9% second house was high 6's after clinton.
 
Im sitting here thinking I can never seen
east_beast said:
Yeah, all this talk about high interest rates kinda baffles me. High compared to recent years? Sure. But they're historically normal interest rates. We've created massive bubbles with practically free money for a decade. The prices aren't sustainable with historically normal interest rates. They rely on practically free money.
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Sure, but the prices all went up because of that. The bubble needs to pop.

I'm in a growing area, my place is on a 2.7% note, I likely can rent it for 2k over it's monthly payment. I'm not sure I'll sell it anytime soon even though I might be moving in 2 years. Everyone owning multiple homes screws up the market too.
 
Ransil said:
my house before clinton was 9% second house was high 6's after clinton.
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What was everyone saying right about the time those big jumps happened?


Looks like another 30 year long problem everyone kicked down the road, and now millennials get to deal with it while hearing how we’re complaining while grandpa is retired in his house from 30 years ago. Yay adulting.
 
Clemson13 said:
Im sitting here thinking I can never seen

Sure, but the prices all went up because of that. The bubble needs to pop.

I'm in a growing area, my place is on a 2.7% note, I likely can rent it for 2k over it's monthly payment. I'm not sure I'll sell it anytime soon even though I might be moving in 2 years. Everyone owning multiple homes screws up the market too.
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The bubble needing to be popped is peoples expected norms. NOT the pricing and interest rates. If it costs $300k to buy a house people think should cost $150 there is a bubble. It just isn’t the doom and gloom housing market collapse causing instability one. It’s the one people are living in so they’re safe from a different reality.
 
RunningProblem said:
The bubble needing to be popped is peoples expected norms. NOT the pricing and interest rates. If it costs $300k to buy a house people think should cost $150 there is a bubble. It just isn’t the doom and gloom housing market collapse causing instability one. It’s the one people are living in so they’re safe from a different reality.
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The housing market by and large isn't about "price". It's about monthly mortgage payment since the vast majority of home purchases are with mortgages. That payment on say a $400k house at 4% was doable. But at 8% the mortgage payment has jumped 50%. It now has the effective monthly cost of a $600k house back in the 4% market. The Fed created these bubbles by keeping historically low interest rates for a decade. We should've been creeping rates back up long ago but no one wanted to turn off the printers and it just became the new norm.

It's the same thing that happened to vehicle prices.
 
east_beast said:
The housing market by and large isn't about "price". It's about monthly mortgage payment since the vast majority of home purchases are with mortgages. That payment on say a $400k house at 4% was doable. But at 8% the mortgage payment has jumped 50%. It now has the effective monthly cost of a $600k house back in the 4% market. The Fed created these bubbles by keeping historically low interest rates for a decade. We should've been creeping rates back up long ago but no one wanted to turn off the printers and it just became the new norm.

It's the same thing that happened to vehicle prices.
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That's the problem. Artificially low interest rates are incredibly addictive and withdrawals are extremely painful.
 
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