All Encompassing Mortgage and Real Estate Thread

[UTPhil2006 3,828]

On 5/17/2022 at 9:04 AM, UTPhil2006 said:

Back on the rollercoaster the other way.  Up .09 first 30 min today.

Down .08 today.  

[closetohumping 17,548]

14 minutes ago, Wulaw Horn said:

Yep.  As the agent I'm probably taking it on the chin and in no way asking the buyer for the extra money. Unless, you know, I drive him all around town 3 weekends in a row and write 32 offers and and and.  Lot of buyers agents work their asses off to get a client into a home.  My point on the median and below isn't that those agents aren't earning their money, necessarily, it's that the borrowers literally won't be able to make it work Lots of times if you went to a set up where buyers paid their own agents and seller paid their own agents.

 

 

And I’ve heard of buyers switching agents last second to collect a rebate. No honor among  thieves. 

[Wulaw Horn 19,252]

1 hour ago, closetohumping said:

And I’ve heard of buyers switching agents last second to collect a rebate. No honor among  thieves. 

Absolutely positively happens. That’s kind of on the agent though for not having a rep agreement. 

[Gil Bang 26,100]

I take listings at 4.5% quite often.   House prices out here are high, and I don't need to fund my retirement from a single client. 

There was a time when Realtors controlled the MLS, and consumers didn't know what was for sale, unless they stumbled across a sign.  Back in those days, you could just skip homes with shitty commissions. Now, buyers know what's out there, and you cannot avoid showing them a house with low commission.  Now, you can point out as many negatives as you can imagine, and discourage them from buying a particular home...

Shit, when I do an open house, I offer a cash rebate to anybody that walks through the door.  "Buy this house from me today, and I'll give you $3500-5000 (whatever) in cash credits at close.  Why?  Because they came to me, and I didn't invest a lot of time into them. 

[T’Boo Ted Marshall 2,741]

I’ll always take issue with having to pay commissions to a buy side agent that is actively working against me and not in my best interest.

However, the point is strong that many buyers can’t pay an agent OOP.

[BillyMadison 7]

Very timely. I was driving around our target neighborhood and found a FSBO not on MLS or any of the apps-set up the tour with the homeowner directly, but looped our agent in and let owner he is repping us.

We are likely to offer, but hasn’t been mentioned yet if seller will pay buyers agent. Our agent has shown us 10 houses and written 4 offers, so I feel like we are obligated to pay him if seller won’t.

Worst case scenario is he would get our listing to sell, and frankly his hourly rate on our buy is something like $2-3k per hour spent on us (no humblebrag-he does little research since he know most of the houses and told me it takes him 20 minutes to write and offer) but I still want him to get paid on the buy for his efforts


Sent from my iPhone using Tapatalk

[Neonmoon 38,130]

To Wulaw point, have a borrower making an offer now, seller ain’t paying buyer commission (thanks Jonathan). Buyer can’t afford another 15K in fees. The best we can do is ask the seller to price the house higher, get a seller concession, and hope it appraises. 

If the house doesn't appraise for 3% more. Any suggestions on how to fix this situation?

Edited May 19, 2022 by Neonmoon

[Wulaw Horn 19,252]

9 hours ago, Neonmoon said:

To Wulaw point, have a borrower making an offer now, seller ain’t paying buyer commission (thanks Jonathan). Buyer can’t afford another 15K in fees. The best we can do is ask the seller to price the house higher, get a seller concession, and hope it appraises. 

If the house doesn't appraise for 3% more. Any suggestions on how to fix this situation?

Nope. Good luck and hope it appraises. 

[Wulaw Horn 19,252]

How big is the loan and what is he putting down?  

[UTPhil2006 3,828]

10 hours ago, Neonmoon said:

To Wulaw point, have a borrower making an offer now, seller ain’t paying buyer commission (thanks Jonathan). Buyer can’t afford another 15K in fees. The best we can do is ask the seller to price the house higher, get a seller concession, and hope it appraises. 

If the house doesn't appraise for 3% more. Any suggestions on how to fix this situation?

Hope it appraises but mentally prepare the borrower now. Kind of crappy situation the seller put everyone in. 

[Neonmoon 38,130]

1 hour ago, Wulaw Horn said:

Nope. Good luck and hope it appraises. 

 

1 hour ago, Wulaw Horn said:

How big is the loan and what is he putting down?  

530 and 5%. Asset bucket is weak. 

15 minutes ago, UTPhil2006 said:

Hope it appraises but mentally prepare the borrower now. Kind of crappy situation the seller put everyone in. 

Yep. 

[closetohumping 17,548]

11 hours ago, Neonmoon said:

To Wulaw point, have a borrower making an offer now, seller ain’t paying buyer commission (thanks Jonathan). Buyer can’t afford another 15K in fees. The best we can do is ask the seller to price the house higher, get a seller concession, and hope it appraises. 

If the house doesn't appraise for 3% more. Any suggestions on how to fix this situation?

Not paying buyer commission?  That's the most ass-in-nine thing ever.  Shit.

18 hours ago, Wulaw Horn said:

Yep.  As the agent I'm probably taking it on the chin and in no way asking the buyer for the extra money. Unless, you know, I drive him all around town 3 weekends in a row and write 32 offers and and and.  Lot of buyers agents work their asses off to get a client into a home.  My point on the median and below isn't that those agents aren't earning their money, necessarily, it's that the borrowers literally won't be able to make it work Lots of times if you went to a set up where buyers paid their own agents and seller paid their own agents.

 

 

Pass it off as good karma and maybe you'll get a referral out of it?  That money they pay you could go to movers or new furniture.  I think as we agree, a lot of these buyers are already close to their limit.  I know, buy a lesser house, but wouldn't that cut into your commission?  

[Wulaw Horn 19,252]

1 hour ago, Neonmoon said:

 

530 and 5%. Asset bucket is weak. 

Yep. 

Probably turbofucked. Good credit score?  Can you give him 2% for 1/2 a point in rate and tell the realtor he needs to get fucked on the other 1% and then refi him in a year after appreciation gets some of pmi gone/away for good? 

[Neonmoon 38,130]

4 hours ago, Wulaw Horn said:

Probably turbofucked. Good credit score?  Can you give him 2% for 1/2 a point in rate and tell the realtor he needs to get fucked on the other 1% and then refi him in a year after appreciation gets some of pmi gone/away for good? 

Always willing to try anything. Thanks

[closetohumping 17,548]

Right on cue, the slowdown begins right as I’m thinking about selling my house https://www.theatlantic.com/newsletters/archive/2022/05/housing-market-slowing-down-recession/629901/

[NotActuallyALonghorn 4,980]

On 5/12/2022 at 9:45 AM, closetohumping said:

You know my parents have done reasonably well in life but there was a period where they squandered a lot of their money.  Odd as they came from nothing, like two outfits for each of us kids nothing.  Free lunch nothing.  Anyways, there was a time where they hit financial trouble and I recommended they drive a Honda instead of a Mercedes and it was like I had insulted them personally. 

I think there is a physiological block for a lot of people that grew up poor that prevents them from making sound financial decisions. They think they have made it, and doing anything to show otherwise is like admitting defeat. Never-ending that it might put them right back in the place they came from...

[crash_davis 23,158]

very interesting map. aside for the dispersion of property prices, i never realize how much of the west is public land. public land is cool. 

 

the reddit thread is an interesting read. for example

https://www.reddit.com/r/MapPorn/comments/uthpss/average_land_value_by_zip_code_in_the_us/

Birdy_Cephon_Altera

See that snake of light green running across the middle of public lands through southern Wyoming, northern panhandle of Utah, and across the northern part of Nevada? That's a result of building the first transcontinental railroad.

In order to entice the railroad companies to build the rail line in the 1860's, the US government granted the railroads ten square miles of land for every mile of rail line they built.

And in Northern Nevada, those parcels were purchased by Newmont, the world’s largest gold miner, when they acquired Santa Fe Pacific. Now they’re owned by Nevada Gold Mines, a JV between Barrick and Newmont. It snakes through one of the largest gold-producing regions in the world. Really interesting stuff.

Here's another fact. The process of distributing that land was corrupt af. The railroads gouged the government, and the government still had to bail out the union pacific company due to it's bankruptcy threeish years after completion.

and in ww2 when the government needed some of the rails for the war effort, there was a ceremony to "undrive" the golden spike.

The rush to complete the Transcontinental Railroad resulted in track so poorly built it had to be replaced or upgraded extensively starting in the 1870s (i.e. within ten years after completion).

[jimmyjazz 46,479]

Is that in dollars per hectare?

[Incredulity 11,695]

4 hours ago, crash_davis said:

i never realize how much of the west is public land. public land is cool. 

until you realize that "public land" doesn't mean "open to the public" or "for public use".  Most of it is, "stay out of the King's Forest"

[UTPhil2006 3,828]

On 5/18/2022 at 3:08 PM, UTPhil2006 said:

Down .08 today.  

Down .06 today close to 1 month lows.

[mchookem 16,526]

17 hours ago, closetohumping said:

Right on cue, the slowdown begins right as I’m thinking about selling my house https://www.theatlantic.com/newsletters/archive/2022/05/housing-market-slowing-down-recession/629901/

hmmm that does seem to be the case 🤨 luckily we're not on any timeline with ours, but def slower than i expected. 

[Neonmoon 38,130]

I’ve seen a few houses go for not much over ask recently. It’s anecdotal, but it caught my attention. Might be a sign things are cooling. Still have a supply problem, but interests rates going up are trying to push down the pressure 

[Sam Lin 3,564]

10 hours ago, Incredulity said:

until you realize that "public land" doesn't mean "open to the public" or "for public use".  Most of it is, "stay out of the King's Forest"

Honestly, I'm still pretty ok with that.

[closetohumping 17,548]

11 hours ago, Neonmoon said:

I’ve seen a few houses go for not much over ask recently. It’s anecdotal, but it caught my attention. Might be a sign things are cooling. Still have a supply problem, but interests rates going up are trying to push down the pressure 

I know agents all over the country.  All agree it’s just not as crazy but still healthy. 

[Loch Ness Monster 3,533]

Mr cooper let go around 500 employees I heard. Also seen some Caliber/NewRez, Loan Depot, and PennyMac peeps posting some LinkedIn open to work things lately.

[Upgrayedd 5,825]

21 hours ago, Incredulity said:

until you realize that "public land" doesn't mean "open to the public" or "for public use".  Most of it is, "stay out of the King's Forest"

This is inaccurate.  It might not be “do whatever you want” but it’s not “stay out.”

[UTPhil2006 3,828]

14 minutes ago, Loch Ness Monster said:

Mr cooper let go around 500 employees I heard. Also seen some Caliber/NewRez, Loan Depot, and PennyMac peeps posting some LinkedIn open to work things lately.

Yeah we just got a new Caliber rep this week.  Much younger.

[Wulaw Horn 19,252]

5 minutes ago, UTPhil2006 said:

Yeah we just got a new Caliber rep this week.  Much younger.

How big were her boobs?

[UTPhil2006 3,828]

1 minute ago, Wulaw Horn said:

How big were her boobs?

Picture in bio cuts off.  Need to do some "research"

[Wulaw Horn 19,252]

Just now, UTPhil2006 said:

Picture in bio cuts off.  Need to do some "research"

So if you don’t know differently I’d mentally go with spectacular until proven otherwise. 

[closetohumping 17,548]

33 minutes ago, UTPhil2006 said:

Picture in bio cuts off.  Need to do some "research"

You send me pics or I call the cops 

[Neonmoon 38,130]

Any real estate lawyers here? In regards to a Joint Tenancy with Right of Survivorship 

I know conventional loans are not assumable

I also know family members can take over Mortage payment even on non-assumable loans per state law if they inherit them upon death of borrower 
 

My question: Can Joint Tenants with Right of Survivorship take over mortgage payments? Or do they have to be on the loan application?

 

 

 

[Wulaw Horn 19,252]

2 hours ago, Neonmoon said:

Any real estate lawyers here? In regards to a Joint Tenancy with Right of Survivorship 

I know conventional loans are not assumable

I also know family members can take over Mortage payment even on non-assumable loans per state law if they inherit them upon death of borrower 
 

My question: Can Joint Tenants with Right of Survivorship take over mortgage payments? Or do they have to be on the loan application?

 

 

 

Yes they can take over the payments. 

[Neonmoon 38,130]

12 minutes ago, Wulaw Horn said:

Yes they can take over the payments. 

Yes! 

[closetohumping 17,548]

This says it's re-listed.  Does this mean it was sold in April and something fell through?  Wonder if the seller knew he priced it too low and told the buyer too bad so sad?  He got 300k more in about a month:

 

https://www.realtor.com/realestateandhomes-detail/78-Keepsake_Irvine_CA_92618_M29164-91863

[ChickenSandwich 9,856]

1 hour ago, closetohumping said:

This says it's re-listed.  Does this mean it was sold in April and something fell through?  Wonder if the seller knew he priced it too low and told the buyer too bad so sad?  He got 300k more in about a month:

 

https://www.realtor.com/realestateandhomes-detail/78-Keepsake_Irvine_CA_92618_M29164-91863

The raise in interest had some deals fall through as the ratios no longer worked with the increase (pm Wulaw), but could be a number of reasons.
 

Deal fell through, took off market to make repairs etc.

 

Have your realtor call the seller’s realtor and ask. 

Edited May 23, 2022 by ChickenSandwich

[closetohumping 17,548]

2 minutes ago, ChickenSandwich said:

The raise in interest had some deals fall through as the ratios no longer worked with the increase, but could be a number of reasons.
 

Deal fell through, took off market to make repairs etc.

 

Have your realtor call the seller’s realtor and ask. 

Sure.  Not complaining, just the 300k bump is pretty nice.

[Gil Bang 26,100]

8 hours ago, closetohumping said:

This says it's re-listed.  Does this mean it was sold in April and something fell through?  Wonder if the seller knew he priced it too low and told the buyer too bad so sad?  He got 300k more in about a month:

 

https://www.realtor.com/realestateandhomes-detail/78-Keepsake_Irvine_CA_92618_M29164-91863

First listed 2/3.  Went Pending 2/11.  Went back active 4/6.  Went Pending 4/13. Closed 5/20.  

[closetohumping 17,548]

7 minutes ago, Gil Bang said:

First listed 2/3.  Went Pending 2/11.  Went back active 4/6.  Went Pending 4/13. Closed 5/20.  

Looks like someone went 250+ over ask which I think is insane even in this market

[Gil Bang 26,100]

Orange County’s April home sales were down 28% from last year’s spring sales rush as record-high prices and soaring mortgage rates in April pushed the cost of buying 42% higher.

Across Southern California, 21,486 residences — single-family, condominium, existing and newly constructed homes — sold in six counties, down 8% for the month, and down 19% over the past year. The region’s median price of $760,000 was up 3% for the month, and up 17% over 12 months.

Pricier home loans saw a typical SoCal buyer get a house payment of $3,010 a month for the latest median vs. $2,191 a year ago on a $651,000 median. So prices rose 17% vs. a house payment’s 37% jump.

Here’s what my trusty spreadsheet found in DQNews’ report on closed transactions in April in Orange County …

Top Article:

Sales

The tally: 3,021 homes sold. This was the No. 25 busiest April of the 35 since 1988.

One-month change: 5% decrease from March. Since 1988, sales have fallen in this period 47% of the time with an average 1.4% increase from March.

One-year change: 28% decrease — No. 27 biggest decline since 1988 (or it’s been worse only 7% of the time.)

Pre-pandemic: April sales were 0.3% above the 3,012 average buying pace of the month, 2010-2019

Prices

The median: $1.05 million for all homes, up 2.9% in a month while increasing 21% over 12 months. This breaks the record $1.02 million median set in March.

One-month trend: Since 1988, prices have risen 54% of the time in April, with an average 1% gain.

One-year trend: Latest gain tops 93% of all 12-month periods since 1988.

Pandemic era: 16 price records have been broken since February 2020. The median’s $301,500 increase equals a gain of $15.84 every hour over these 26 months.

Key slices

Existing single-family houses: 1,947 sold, down 28% in a year. Median of $1.21 million — a 23% increase over 12 months.

RELATED ARTICLES

• Biggest jump ever: Southern California house payments up 37%, topping $3,000 a month
• Bubble watch: Bitcoin, stocks crashed. Southern California home prices next?
• Southern California home prices hit more records as rate hikes fail to slow bidding wars
• Inland Empire homeownership soars to 18th in US; LA-Orange County at bottom
• Orange County housing bubble: what do you remember?

 

Existing condos: 867 sales, down 26% over 12 months. Median of $750,000 — a 23% increase in a year.

Newly built: Builders sold 207 new homes, down 31% in a year. Median of $1.39 million — a 41.3% increase over 12 months.

Builder share: 6.9% of sales vs. 7.2% a year earlier.

Bigger picture

Across the region: All six Southern California counties had a sales drops for the month and the year. Prices rose in all counties in the month and the year.

Rates: How pricey has money become? Rates on a 30-year, fixed-rate mortgage averaged 4.3% in the three months ending in April vs. 2.98% a year earlier. That translates to 15% less buying power for house hunters. (Larger drops occurred only 3% of the time since 1971.)

Payment pain: Changing rates meant a buyer paid $4,159 a month for the $1.05 million April median-priced residence vs. paying $2,931 monthly on $871,000 median 12 months earlier. So prices rose 21% but the house payment soared 42%.

Downpayment: Those payment estimates assume 20% down, or $210,000 last month — up $35,800 since February 2020.

What sellers are thinking: In Los Angeles and Orange counties, the number of homes on the market fell 21.8% in the year — No. 41 of 50 metros tracked by Realtor.com. Inland Empire listings rose 23.3% — No. 1. L.A.-O.C. Listing prices fell 3.9% in 12 months — No. 43 of metros tracked by Realtor.com; I.E. asking prices rose 18.4% — No. 10.

Affordability: 8.3% of Los Angeles County met the affordability yardstick of the National Association of Home Builders in the first quarter — the lowest share nationally — vs. 11.7% of Orange County homes, the third-lowest, and 23.7% of Inland Empire homes, 15th worst.

Wall Street: The S&P 500 stock index in April was flat for the month vs. 2.9% gain for O.C. homes. One year? Stocks rose 6% vs. 20.6% home gain. Pandemic era? S&P 500 rose 34% vs. 40.3% home gain.

[Chewbacca 7,793]

On 5/20/2022 at 10:25 AM, Incredulity said:

until you realize that "public land" doesn't mean "open to the public" or "for public use".  Most of it is, "stay out of the King's Forest"

Most BLM and National Forest land is accessible to anyone.  Not sure what you're referring to.

[We’reTexas 1,473]

26 minutes ago, Gil Bang said:

Orange County’s April home sales were down 28% from last year’s spring sales rush as record-high prices and soaring mortgage rates in April pushed the cost of buying 42% higher.

Across Southern California, 21,486 residences — single-family, condominium, existing and newly constructed homes — sold in six counties, down 8% for the month, and down 19% over the past year. The region’s median price of $760,000 was up 3% for the month, and up 17% over 12 months.

Pricier home loans saw a typical SoCal buyer get a house payment of $3,010 a month for the latest median vs. $2,191 a year ago on a $651,000 median. So prices rose 17% vs. a house payment’s 37% jump.

Here’s what my trusty spreadsheet found in DQNews’ report on closed transactions in April in Orange County …

Top Article:

Sales

The tally: 3,021 homes sold. This was the No. 25 busiest April of the 35 since 1988.

One-month change: 5% decrease from March. Since 1988, sales have fallen in this period 47% of the time with an average 1.4% increase from March.

One-year change: 28% decrease — No. 27 biggest decline since 1988 (or it’s been worse only 7% of the time.)

Pre-pandemic: April sales were 0.3% above the 3,012 average buying pace of the month, 2010-2019

Prices

The median: $1.05 million for all homes, up 2.9% in a month while increasing 21% over 12 months. This breaks the record $1.02 million median set in March.

One-month trend: Since 1988, prices have risen 54% of the time in April, with an average 1% gain.

One-year trend: Latest gain tops 93% of all 12-month periods since 1988.

Pandemic era: 16 price records have been broken since February 2020. The median’s $301,500 increase equals a gain of $15.84 every hour over these 26 months.

Key slices

Existing single-family houses: 1,947 sold, down 28% in a year. Median of $1.21 million — a 23% increase over 12 months.

RELATED ARTICLES

• Biggest jump ever: Southern California house payments up 37%, topping $3,000 a month
• Bubble watch: Bitcoin, stocks crashed. Southern California home prices next?
• Southern California home prices hit more records as rate hikes fail to slow bidding wars
• Inland Empire homeownership soars to 18th in US; LA-Orange County at bottom
• Orange County housing bubble: what do you remember?

 

Existing condos: 867 sales, down 26% over 12 months. Median of $750,000 — a 23% increase in a year.

Newly built: Builders sold 207 new homes, down 31% in a year. Median of $1.39 million — a 41.3% increase over 12 months.

Builder share: 6.9% of sales vs. 7.2% a year earlier.

Bigger picture

Across the region: All six Southern California counties had a sales drops for the month and the year. Prices rose in all counties in the month and the year.

Rates: How pricey has money become? Rates on a 30-year, fixed-rate mortgage averaged 4.3% in the three months ending in April vs. 2.98% a year earlier. That translates to 15% less buying power for house hunters. (Larger drops occurred only 3% of the time since 1971.)

Payment pain: Changing rates meant a buyer paid $4,159 a month for the $1.05 million April median-priced residence vs. paying $2,931 monthly on $871,000 median 12 months earlier. So prices rose 21% but the house payment soared 42%.

Downpayment: Those payment estimates assume 20% down, or $210,000 last month — up $35,800 since February 2020.

What sellers are thinking: In Los Angeles and Orange counties, the number of homes on the market fell 21.8% in the year — No. 41 of 50 metros tracked by Realtor.com. Inland Empire listings rose 23.3% — No. 1. L.A.-O.C. Listing prices fell 3.9% in 12 months — No. 43 of metros tracked by Realtor.com; I.E. asking prices rose 18.4% — No. 10.

Affordability: 8.3% of Los Angeles County met the affordability yardstick of the National Association of Home Builders in the first quarter — the lowest share nationally — vs. 11.7% of Orange County homes, the third-lowest, and 23.7% of Inland Empire homes, 15th worst.

Wall Street: The S&P 500 stock index in April was flat for the month vs. 2.9% gain for O.C. homes. One year? Stocks rose 6% vs. 20.6% home gain. Pandemic era? S&P 500 rose 34% vs. 40.3% home gain.

CA is such a disaster. It’s obviously early, but do you get a sense SB 9 will spur development? Also, are folks taking advantage of Prop 19? Anecdotally it seems like there’s not enough awareness of it. 

[closetohumping 17,548]

1 hour ago, We’reTexas said:

CA is such a disaster. It’s obviously early, but do you get a sense SB 9 will spur development? Also, are folks taking advantage of Prop 19? Anecdotally it seems like there’s not enough awareness of it. 

Expensive does not mean disaster

[We’reTexas 1,473]

10 minutes ago, closetohumping said:

Expensive does not mean disaster

No - the regulatory framework driving supply constraints is. Are you seriously going to argue we’re not in a housing crisis? “Disaster” is subjective, but it’s the only word I can think of when affordable housing projects are shot down to save parking lots and a NIMBY boomer single-handedly throws our best public university’s admissions into chaos. SB 9 was a positive step forward but from what I’m hearing the economics still don’t make sense to build housing where it is most needed. 

[closetohumping 17,548]

23 minutes ago, We’reTexas said:

No - the regulatory framework driving supply constraints is. Are you seriously going to argue we’re not in a housing crisis? “Disaster” is subjective, but it’s the only word I can think of when affordable housing projects are shot down to save parking lots and a NIMBY boomer single-handedly throws our best public university’s admissions into chaos. SB 9 was a positive step forward but from what I’m hearing the economics still don’t make sense to build housing where it is most needed. 

Plenty of affordable areas in California.  Just not on the coasts.  But I get it , you’re Texas and California is bad

[CooterBrown 18,093]

Most BLM and National Forest land is accessible to anyone.  Not sure what you're referring to.

We have some “public land” in Austin, the Balcones Canyonlands Preserve, that is pretty closed off to the public to protect the endangered, invasive golden cheeked warbler and black capped vireo.

[Gil Bang 26,100]

2 hours ago, We’reTexas said:

CA is such a disaster. It’s obviously early, but do you get a sense SB 9 will spur development? Also, are folks taking advantage of Prop 19? Anecdotally it seems like there’s not enough awareness of it. 

SB 9 is already working, and I include a Prop 19 flyer in every client package. 

[We’reTexas 1,473]

27 minutes ago, closetohumping said:

Plenty of affordable areas in California.  Just not on the coasts.  But I get it , you’re Texas and California is bad

Live in San Francisco and active in local politics here. Just my assessment, and it’s not a minority one.

[Muny_Tex 298]

Interesting episode of George Gammon’s “Rebel Capitalist” podcast today, guest was real estate guru Jason Hartman.

Dude obviously has a strong bias for owning properties over equities, but couple of POVs stood out to me (I don’t necessarily agree with all):

1.) Real estate doesn’t “crash” anything like stocks in terms of speed/velocity…Hartman claimed that the full drawdown/bottom out of the GFC took almost 6 years to occur; whereas we’ve now had 2 separate stock market events in past ~2 years where we’ve had >20% index losses in matter of weeks.

2.) Even if Blackrock’s of the world sour on real estate, they aren’t gonna dump all ~80K of their holdings in a single swoop to the degree that most stock liquidations (or margin calls) often function…it would typically be done targeted/gradual manner that wouldn’t create huge surplus housing inventories overnight.

3.) Lower/mid-level price homes are particularly strong assets in downturns/rate hikes, because even if entry level buyers with $300k budgets are priced out of market entirely, other groups that previously qualified for $400k often “shift down” to take their place…therefore protecting demand for those same properties. (NOTE: I agree with this viewpoint 1000%, which is why I’ve always been a cheapest/turnkey place in best location kind of investor).

4.) Rent increases tend to lag surging purchase prices by ~2 years…and we’ve only recently started to see the spikes in rental markets, so there’s still theoretically a lot more room to rise barring a full scale recession bloodbath.

5.) Effective way to gauge “affordability” of a home right now as an owner/occupant is through same lens that prospective investor will use: basic RV ratio. If the RV delivers the standard .7 or better, and you’re in a linear/non-cyclical market (ie CenTex)…you’re probably good to go even if the price has gone way up in past couple of years…your chances of getting huge rent relief are not likely.

[chainsaw 10,010]

On 5/19/2022 at 11:03 PM, closetohumping said:

Right on cue, the slowdown begins right as I’m thinking about selling my house https://www.theatlantic.com/newsletters/archive/2022/05/housing-market-slowing-down-recession/629901/

Every millennial ever