All Encompassing Mortgage and Real Estate Thread

[Neonmoon 38130]

17 minutes ago, Kwix said:

We are making an offer this weekend on a house in the north Dallas area

Be careful. I’ve heard there is a shit ton of foundation issues in that area 

[Wulaw Horn 19599]

34 minutes ago, Kwix said:

Ok, so time for me to join the thread.

We are making an offer this weekend on a house in the north Dallas area.  My realtor has a couple preferred lenders, but I would like something to compare their rates against. I'm also open to going with a lender that surly knows/recommends.

Looking at 710k purchase price with 20% down, with either a 30yr or 15yr fixed mortgage.  Probably not buying points unless there is a compelling reason.  Would also need the ability to do a 1 time paydown and re-amortization after we sell our existing house.

I know it's a weekend and Monday's rates wont be the same as our potential closing date, but what are we looking at right now for rates?

Check your PM’s. 
also- compare when you got quotes on Friday. Friday was a terrible day in the market and we lost something like 15/100’s. So a quote from Friday at 8:00 am likely isn’t still good. 
average on a 30 year fix (not accounting for people buying points) is 6.35% as of Friday- probably worse though as the day finished worse than it started. 

[Gil Bang 26250]

Kwix, you're crazy if you don't go with one of our resident lenders. 

Your agent has a preferred guy, because every time he sends that guy a deal, that guy pays for your realtor to get a massage at a local rub and tug. 

[Wulaw Horn 19599]

2 minutes ago, Gil Bang said:

Kwix, you're crazy if you don't go with one of our resident lenders. 

Your agent has a preferred guy, because every time he sends that guy a deal, that guy pays for your realtor to get a massage at a local rub and tug. 

He knows because that’s his price to refer his clients out!  

[Neonmoon 38130]

When realtors send me clients, I always buy them rub & tugs, especially the female realtors 

[UTPhil2006 3930]

15 hours ago, Neonmoon said:

When realtors send me clients, I always buy them rub & tugs, especially the female realtors 

How do y’all think I got the ZJ idea when times were tough 

[MAUFRAIS 6746]

When realtors send me clients, I always buy them rub & tugs, especially the female realtors 

Grope and pokes

[Wulaw Horn 19599]

Quote

 

Ok Originators here is a fun stat:

Total mortgage  market in 2021- 4.4T. 
total mortgage market in 2002 Q4- slightly over 250 Billion. 
1st Q 2023 is expected to come in lower than that. 
So, in 2023 it looks like the mortgage market is on pace to run around 1T (based upon the last 2quarters we’ve just been through) 

So yeah- our industry is on pace to be 22% of what it was 2 short years ago. 

Not down 22%. 22% of the total. 
 

[Wulaw Horn 19599]

My numbers from UWM don’t match the overall market. They had 25B at 11% market share (meaning 240B total market) but I’m seeing other sources at 300B in total 4th Q for annualized at something like 1.3T. So, we might be at closer to 25 or 30% of 2021 volume. 
My old coach was like- 2017 we did X it’s going to be like that. 2017 was almost 2T so we are still off 40+% from his shitty case he brought up. 

[Neonmoon 38130]

We’re all sucking dick for coke right now 

 

[Wulaw Horn 19599]

6.5% average 30 year mortgage today:

https://www.mortgagenewsdaily.com/mbs

[Wulaw Horn 19599]

On 4/8/2023 at 2:57 PM, Kwix said:

Ok, so time for me to join the thread.

We are making an offer this weekend on a house in the north Dallas area.  My realtor has a couple preferred lenders, but I would like something to compare their rates against. I'm also open to going with a lender that surly knows/recommends.

Looking at 710k purchase price with 20% down, with either a 30yr or 15yr fixed mortgage.  Probably not buying points unless there is a compelling reason.  Would also need the ability to do a 1 time paydown and re-amortization after we sell our existing house.

I know it's a weekend and Monday's rates wont be the same as our potential closing date, but what are we looking at right now for rates?

good luck.  Hope you got the house

 

Edited April 10, 2023 by Wulaw Horn

[Incredulity 11880]

3 hours ago, Wulaw Horn said:

Ok Originators here is a fun stat:

Total mortgage  market in 2021- 4.4T. 
total mortgage market in 2002 Q4- slightly over 250 Billion. 
1st Q 2023 is expected to come in lower than that. 
So, in 2023 it looks like the mortgage market is on pace to run around 1T (based upon the last 2quarters we’ve just been through) 

So yeah- our industry is on pace to be 22% of what it was 2 short years ago. 

Not down 22%. 22% of the total. 
 

Brutal 

[Gravy Train 976]

9 hours ago, Incredulity said:

Brutal 

We can fix that... with a very real (2018-2019-era) price correction, but sidelined inventory locked into too-sweet 3% rates, questionable appraisals, and the racket of the NAR driving price agenda for bigger commissions aren't helping.

Let it burn.

Edited April 11, 2023 by Gravy Train

[Neonmoon 38130]

7 hours ago, Gravy Train said:

We can fix that... with a very real (2018-2019-era) price correction, but sidelined inventory locked into too-sweet 3% rates, questionable appraisals, and the racket of the NAR driving price agenda for bigger commissions aren't helping.

Let it burn.

Questionable appraisals?

[Wulaw Horn 19599]

9 hours ago, Gravy Train said:

We can fix that... with a very real (2018-2019-era) price correction, but sidelined inventory locked into too-sweet 3% rates, questionable appraisals, and the racket of the NAR driving price agenda for bigger commissions aren't helping.

Let it burn.

Nobody really cares about bigger commissions at the cost of house moving man. 

[Gravy Train 976]

5 hours ago, Neonmoon said:

Questionable appraisals?

I knew I'd put my shit on blast with that reply last night but I'm sour grapes on the health of the current market and the sudden valuation hikes of $200K+ for the same SFH that should never have seen such price appreciation for nothing other than hotter buying demand fueled by too-cheap capital, landlording as a revenue stream, and an asset class to park liquidity.  I want to upgrade my home and/or buy a lake house, but feel sidelined for years until the health of the market is restored and right now, price isn't moving down as fast as it should to reflect affordability with lost transactional volume.

Like it's 2008 all over again, I can point to mortgage brokers for gaming the system and appraisers for sticking their thumb tacks on the new valuations, practically working for the realtor.  Here we are in April where FHFA increased Fannie and Freddie SFH loan limits up to $1,089,300 in HCOL locations and $726,200 in the rest of the country.  Fannie took it one step further in their decision to waive property appraisal for lending:

https://selling-guide.fanniemae.com/Selling-Guide/Doing-Business-with-Fannie-Mae/Subpart-A2-Lender-Contract/Chapter-A2-2-Contractual-Representations-and-Warranties/1645976621/A2-2-06-Representations-and-Warranties-on-Property-Value-03-01-2023.htm

Quote

Fannie Mae does not warrant that the estimated value provided by the lender is the actual value of the subject property. The lender may not make any statements to any third party (including the borrower) that Fannie Mae performed any kind of appraisal or valuation of the property (see Fannie Mae Selling Guide, A2-2-06, Representations and Warranties on Property Value (03/01/2023)

 

Appraisers are a meaningless barrier of entry to home ownership and certainly haven't stopped buyers from making poor financial decisions, nor of their realtors from discouraging zesty offers, to the detriment of eating their own lunches.  And being residents of Texas, we all pay significantly greater property tax on the purported valuations. 

[gmr548 16704]

Shouldn’t have seen price increases if not for hotter demand? What more fundamental indicator of value is there? Property is worth what someone will pay.

[Wulaw Horn 19599]

19 minutes ago, gmr548 said:

Shouldn’t have seen price increases if not for hotter demand? What more fundamental indicator of value is there? Property is worth what someone will pay.

I can't tell what his point is at all in the entire (either) post.  I

[jimmyjazz 47309]

Yeah, that's a weird angle.  Value isn't what YOU'LL pay, it's what SOMEONE will pay (who's in the market and offering).

Waiting for prices to correct might not be a good strategy.  Right now, it's possible they'll go down more, but we're kinda in the heat of the season, too.

[We’reTexas 1477]

On 4/7/2023 at 6:48 PM, Gil Bang said:

 

 

[gmr548 16704]

I can't tell what his point is at all in the entire (either) post.  I

That he wants a lake house and is sad, I think.

[Neonmoon 38130]

2 hours ago, Gravy Train said:

I knew I'd put my shit on blast with that reply last night but I'm sour grapes on the health of the current market and the sudden valuation hikes of $200K+ for the same SFH that should never have seen such price appreciation for nothing other than hotter buying demand fueled by too-cheap capital, landlording as a revenue stream, and an asset class to park liquidity.  I want to upgrade my home and/or buy a lake house, but feel sidelined for years until the health of the market is restored and right now, price isn't moving down as fast as it should to reflect affordability with lost transactional volume.

Like it's 2008 all over again, I can point to mortgage brokers for gaming the system and appraisers for sticking their thumb tacks on the new valuations, practically working for the realtor.  Here we are in April where FHFA increased Fannie and Freddie SFH loan limits up to $1,089,300 in HCOL locations and $726,200 in the rest of the country.  Fannie took it one step further in their decision to waive property appraisal for lending:

https://selling-guide.fanniemae.com/Selling-Guide/Doing-Business-with-Fannie-Mae/Subpart-A2-Lender-Contract/Chapter-A2-2-Contractual-Representations-and-Warranties/1645976621/A2-2-06-Representations-and-Warranties-on-Property-Value-03-01-2023.htm

 

Appraisers are a meaningless barrier of entry to home ownership and certainly haven't stopped buyers from making poor financial decisions, nor of their realtors from discouraging zesty offers, to the detriment of eating their own lunches.  And being residents of Texas, we all pay significantly greater property tax on the purported valuations. . 

Homes increased 200k due to increased buyer demand and decreased supply. Low supply is the same reason why home prices haven’t fallen that much with rates at 7%. They are less affordable for sure. 

How are Mortage brokers gaming the system? I’d honestly like to know because I could use the money. Paying bills with ZJs ain’t easy. 

If you read the lost transactional volume article, you would learn that lenders are making less money per loan because they haven’t fired enough people yet. They hired a ton of people and then volume crashed, and they still haven’t made enough cuts yet. Zero to do with the health of the market 

Appraisers at valuing the homes per guidelines. I know, I read their reports every day. Speaking of 2008, I can’t legally talk to appraisers these days. I have to email a third party management company. I once suggested an appraiser in a town near the property could do the job faster than the assigned appraiser and I got put in a timeout basically. But yeah, we’re totally rigging it somehow 
 

 

[Wulaw Horn 19599]

16 minutes ago, Neonmoon said:

Homes increased 200k due to increased buyer demand and decreased supply. Low supply is the same reason why home prices haven’t fallen that much with rates at 7%. They are less affordable for sure. 

How are Mortage brokers gaming the system? I’d honestly like to know because I could use the money. Paying bills with ZJs ain’t easy. 

If you read the lost transactional volume article, you would learn that lenders are making less money per loan because they haven’t fired enough people yet. They hired a ton of people and then volume crashed, and they still haven’t made enough cuts yet. Zero to do with the health of the market 

Appraisers at valuing the homes per guidelines. I know, I read their reports every day. Speaking of 2008, I can’t legally talk to appraisers these days. I have to email a third party management company. I once suggested an appraiser in a town near the property could do the job faster than the assigned appraiser and I got put in a timeout basically. But yeah, we’re totally rigging it somehow 
 

 

Yeah- all of this. I couldn't make enough sense of what he was saying or arguing to write an actual rebuttal- but I think this probably about covers it.  

[Gravy Train 976]

4 hours ago, gmr548 said:

That he wants a lake house and is sad, I think.

I'm sidelined like most of the market, either locked in by a sweet 2021-era mortgage or locked out of the price category that was budgeted in 2019, but escalated by some $200K in 2022, even in markets where the demand side shouldn't drive such appreciation, like that lake house in West Hillfuck, TX.

4 hours ago, Neonmoon said:

Homes increased 200k due to increased buyer demand and decreased supply. Low supply is the same reason why home prices haven’t fallen that much with rates at 7%. They are less affordable for sure. 

That "buyer demand" wasn't borne of new buyers (e.g. the tail end of the Millennial generation suddenly able to afford their first home), it was due to Fed policy and a massive opportunity for the institutional and mom-and-pop investor to scoop up anything and everything on the market for leverage.

With most buyers today constrained by 2019-era affordability measures, a price correction might fix that supply problem.  Right now, it's seller-buyer-stalemate.

I should study for those six weeks or whatever joke it takes to get with TREC just so I can write lowball offers all day every day.

[jimmyjazz 47309]

42 minutes ago, Gravy Train said:

I'm sidelined like most of the market, either locked in by a sweet 2021-era mortgage or locked out of the price category that was budgeted in 2019,

You wrote "I want to upgrade my home ".

So, the heater your upgrade went on should have similarly affected the value of your own house.  How are you suddenly locked out?  Sure, mortgage rates make it less compelling to move, but that's not related to value, that's cash flow and affordability.  I weep for you and your cheap mortgage.

[Neonmoon 38130]

31 minutes ago, Gravy Train said:

That "buyer demand" wasn't borne of new buyers

And? 

[Wulaw Horn 19599]

38 minutes ago, jimmyjazz said:

You wrote "I want to upgrade my home ".

So, the heater your upgrade went on should have similarly affected the value of your own house.  How are you suddenly locked out?  Sure, mortgage rates make it less compelling to move, but that's not related to value, that's cash flow and affordability.  I weep for you and your cheap mortgage.

This. Whatever interest rate you get today will be the worst rate you ever have while owning the house as well, so it’s not like that is set in cement either. 
odds are houses continue to appreciate because they always fucking do, if viewed over a long enough time period, so… 

it’s about as easy to time the real estate market as the stock market. Good luck bro. But yeah- your point about a current home owner being fine because that rising tide lifts all boats is pretty accurate- the guys I feel bad for are the one who didn’t own before and are getting priced out. 

[Gravy Train 976]

37 minutes ago, jimmyjazz said:

You wrote "I want to upgrade my home ".

So, the heater your upgrade went on should have similarly affected the value of your own house.  How are you suddenly locked out?  Sure, mortgage rates make it less compelling to move, but that's not related to value, that's cash flow and affordability.  I weep for you and your cheap mortgage.

How do property taxes work?  Affordability is eroded not only by mortgage rates, but by all basis costs.  "Cheap" mortgage is relative if we don't return to said benchmark rates and pre-Covid pricing.  Few are covering that spread in income, so perhaps we should just wait a while longer.

Eric Bramlett's Austin metro numbers:

[jimmyjazz 47309]

3 minutes ago, Wulaw Horn said:

the guys I feel bad for are the one who didn’t own before and are getting priced out. 

Yes.  We know home ownership is the prime driver of wealth in this country, and given the fact that rents (a) cover the landlord's property taxes and (b) generate equity for the landlord, it's not hard to see that one should strive to be in the home ownership game as soon as possible.  I'm not saying it's easy for everyone, but it's still possible.  My first house was 980 square feet and cost $76K.  It got me on the path to legitimate (and rapidly growing) equity over the years.

[jimmyjazz 47309]

2 minutes ago, Gravy Train said:

How do property taxes work?  

I just addressed this, but let me hammer it home:  you are paying property taxes whether you own or rent.  You cannot escape them.

[NotActuallyALonghorn 5005]

I think he's saying low rates that drive the price of real estate up quickly are a double edged sword. As property taxes increase on those properties, they become less and less affordable and the whole basis of the property value increasing gets turned on its head because property values are determined by what people can afford. It seems to me that price and value are getting falsely conflate far too often here. If somebody sells a house in my neighborhood for double the price of what other houses are going for, that makes the appraisal for any future houses jump, if only a bit. If that happens multiple times in a short period of time, the price of all the houses goes up. But price is not the same as value. In a world where all buyers acted rationally, it would be much closer, but we all know that real estate purchases are often not driven by rationality.

[jimmyjazz 47309]

6 minutes ago, NotActuallyALonghorn said:

I think he's saying low rates that drive the price of real estate up quickly are a double edged sword. As property taxes increase on those properties, they become less and less affordable and the whole basis of the property value increasing gets turned on its head because property values are determined by what people can afford. It seems to me that price and value are getting falsely conflate far too often here. If somebody sells a house in my neighborhood for double the price of what other houses are going for, that makes the appraisal for any future houses jump, if only a bit. If that happens multiple times in a short period of time, the price of all the houses goes up. But price is not the same as value. In a world where all buyers acted rationally, it would be much closer, but we all know that real estate purchases are often not driven by rationality.

So why assign "value" based on some ethereal behavior that doesn't occur in real life?  Value is, at best, an aggregate price metric that correlates to local sales over recent history.

[NotActuallyALonghorn 5005]

Just now, jimmyjazz said:

So why assign "value" based on some ethereal behavior that doesn't occur in real life?  Value is, at best, an aggregate price metric that correlates to local sales over recent history.

If you don't draw a distinction between value and price, then bubbles don't really happen. Did the price of a tulip bulb in Holland reflect it's value at the beginning of 1637? Obviously not, otherwise the price would have not collapsed when people began to realize that they weren't actually worth that much.

[jimmyjazz 47309]

3 minutes ago, NotActuallyALonghorn said:

If you don't draw a distinction between value and price, then bubbles don't really happen. Did the price of a tulip bulb in Holland reflect it's value at the beginning of 1637? Obviously not, otherwise the price would have not collapsed when people began to realize that they weren't actually worth that much.

So how do we define "value"?

[Neonmoon 38130]

I hate to burst everyones bubble but interest rates are currently normal. From 1970-2010, rates never went below 5%, only from 2010-2022 were rates below 5% due to financial crisis and then pandemic. We had a decade of cheap money. That window is gone. The issue of affordability is due to low inventory due to lack of building and wages not keeping up with inflation for 40 years. 

[Mother mopar 3388]

I just addressed this, but let me hammer it home:  you are paying property taxes whether you own or rent.  You cannot escape them.

I agree in principle but there are avenues for those folks with disabilities that do not pay any property taxes.

[Wulaw Horn 19599]

Inflation report is in and its a good one at a mere 5%. MBS is up 20 points in the first 5 minutes (MBS up is good means interest rates are getting lower) 

rent (which peaked 12-18 months ago) finally showing up as lower so, good times ahead?  Between inflation and the almost inevitable  recession I think I’m going to win my bet that I will put someone (the right customer) on a deal that starts with a 4 on a 30 year fixed this year. 

[Gravy Train 976]

2 hours ago, Neonmoon said:

I hate to burst everyones bubble but interest rates are currently normal. From 1970-2010, rates never went below 5%, only from 2010-2022 were rates below 5% due to financial crisis and then pandemic. We had a decade of cheap money. That window is gone. The issue of affordability is due to low inventory due to lack of building and wages not keeping up with inflation for 40 years. 

Agreed on the norm of the benchmark rate and perhaps that'll tamper further price escalation.  Stating the instant affordability issue was due to supply is a lazy take, however..

It wasn't a supply issue when AirBnB inventory shot off like a rocket and institutional investors scooped up 40% of sold inventory between 2020-2022, repurposing them into perpetual rentals, completely locking out the starter home category, and iBuyers became a norm with "cash" to secure the offer. 

Price was fueled by Fed policy and the demand side, which is difficult to justify for those who actually homestead their property:

https://www.bloomberg.com/news/articles/2022-07-07/new-fed-paper-finds-surging-home-prices-driven-by-demand-not-supply?srnd=premium#xj4y7vzkg&leadSource=reddit_wall

https://www.federalreserve.gov/econres/feds/files/2022041pap.pdf

Edited April 12, 2023 by Gravy Train

[Wulaw Horn 19599]

2 hours ago, Neonmoon said:

I hate to burst everyones bubble but interest rates are currently normal. From 1970-2010, rates never went below 5%, only from 2010-2022 were rates below 5% due to financial crisis and then pandemic. We had a decade of cheap money. That window is gone. The issue of affordability is due to low inventory due to lack of building and wages not keeping up with inflation for 40 years. 

I don’t know man- rates have been in serious decline since about 1983 until very recently, and we are also getting back to a time like where they were at in the 30’s- 60’s. 
I think it can be argued that the world was really weird between 1970-1985, and that period of time you were looking at is the abnormal one. Flattening of the world, offshoring, outsourcing, Tech breakthroughs and the like all depress the price of labor, goods and services, act in a deflationary means and should mean lower interest rates. A free world and integrated global economy should push us in that direction. 
we are just eating the shit brought about by governmental policy adverse to housing (hello loan level adjustments), awful policy related to ‘Rona (shitting down the world and massively fucking ip the supply chain) and releasing what- like 6T into the economy. And now more accommodative policy in backstopping the banks. 
Once that flushes through the system and the recession hits that everyone is forecasting you I’ll see rates down in the 4’s and testing the 3’s again I think. I don’t ever expect 2 again because that was driven by Covid. 
feel free to print this out, frame it, throw darts at it and curse my name if that doesn’t all happen over the next couple years or so. That’s how I’m lining up to make my bet. 

[UTPhil2006 3930]

1 hour ago, Wulaw Horn said:

Inflation report is in and its a good one at a mere 5%. MBS is up 20 points in the first 5 minutes (MBS up is good means interest rates are getting lower) 

rent (which peaked 12-18 months ago) finally showing up as lower so, good times ahead?  Between inflation and the almost inevitable  recession I think I’m going to win my bet that I will put someone (the right customer) on a deal that starts with a 4 on a 30 year fixed this year. 

It better or we riot. 

[We’reTexas 1477]

1 hour ago, Gravy Train said:

Agreed on the norm of the benchmark rate and perhaps that'll tamper further price escalation.  Stating the instant affordability issue was due to supply is a lazy take, however..

It wasn't a supply issue when AirBnB inventory shot off like a rocket and institutional investors scooped up 40% of sold inventory between 2020-2022, repurposing them into perpetual rentals, completely locking out the starter home category, and iBuyers became a norm with "cash" to secure the offer. 

Price was fueled by Fed policy and the demand side, which is difficult to justify for those who actually homestead their property:

https://www.bloomberg.com/news/articles/2022-07-07/new-fed-paper-finds-surging-home-prices-driven-by-demand-not-supply?srnd=premium#xj4y7vzkg&leadSource=reddit_wall

https://www.federalreserve.gov/econres/feds/files/2022041pap.pdf

I get the gist of what you are trying to convey, but why did institutional investors enter residential housing in the first place?

[Gravy Train 976]

11 minutes ago, We’reTexas said:

I get the gist of what you are trying to convey, but why did institutional investors enter residential housing in the first place?

An abundance of cheap capital and [forecasted] better returns than other equities and REITs.  It feels grimy to me, that wholsale investors shouldn't be able to leverage housing as an speculative asset, especially when their activity drives up standard living costs for all, playing tax haven shell games on inventory the next generation should be able to purchase to for their budding families and financial security. 

[Neonmoon 38130]

No one is going to disagree that cheap money from the pandemic Fed policy led to rapid demand and less supply, which especially fucked first time homebuyers that had to compete against wholesale investors.

But I mean, that's different from your original post of accusing lenders, realtors, and appraisers of fraud 

[LCHorn 2751]

5 hours ago, Wulaw Horn said:

I don’t know man- rates have been in serious decline since about 1983 until very recently, and we are also getting back to a time like where they were at in the 30’s- 60’s. 
I think it can be argued that the world was really weird between 1970-1985, and that period of time you were looking at is the abnormal one. Flattening of the world, offshoring, outsourcing, Tech breakthroughs and the like all depress the price of labor, goods and services, act in a deflationary means and should mean lower interest rates. A free world and integrated global economy should push us in that direction. 
we are just eating the shit brought about by governmental policy adverse to housing (hello loan level adjustments), awful policy related to ‘Rona (shitting down the world and massively fucking ip the supply chain) and releasing what- like 6T into the economy. And now more accommodative policy in backstopping the banks. 
Once that flushes through the system and the recession hits that everyone is forecasting you I’ll see rates down in the 4’s and testing the 3’s again I think. I don’t ever expect 2 again because that was driven by Covid. 
feel free to print this out, frame it, throw darts at it and curse my name if that doesn’t all happen over the next couple years or so. That’s how I’m lining up to make my bet. 

This is the kind of thing that I'd love to go back and retake macro (hat tip to Alfred Norman and ECO 302H, to whom I called my shot on a test, writing "I will ace the final" and then got a "C").  

My read on low interest rates and what's normal is that they are a) politically advantageous to incumbent elites (both on the public and private side) and b) somewhat a product of low growth world wide driven by demographic changes. 

I don't think you can divorce our monetary system from the collapsing birth rate in China, for example, and that wasn't a consideration in prior decades.  This is also why I think we'll return to slow GDP growth and more accommodative monetary policy as the Covid stimulus gets further drained out of the economy.  I also think this is one reason why the FAANG firms (all of this is connected is my thesis) were so quick to a reduction in force; there is just nothing coming on the horizon that appears to excite capital and Chat GPT/Bard appear poised to destroy old businesses, not build a new one (which isn't great for growth, either). 

As long as I'm making predictions, I am hopeful for a Ukraine peace bump if they can win or reach a peace agreement sometime in the next couple of years (good for growth if bad for mortgage rates).  I'm also somewhat hopeful that the Inflation Reduction Act incentives do SOMETHING, as that's the kind of thing I'd be urging policy makers to support if I was worried about creating growth without air dropping money again. 

[Wulaw Horn 19599]

17 minutes ago, LCHorn said:

This is the kind of thing that I'd love to go back and retake macro (hat tip to Alfred Norman and ECO 302H, to whom I called my shot on a test, writing "I will ace the final" and then got a "C").  

My read on low interest rates and what's normal is that they are a) politically advantageous to incumbent elites (both on the public and private side) and b) somewhat a product of low growth world wide driven by demographic changes. 

I don't think you can divorce our monetary system from the collapsing birth rate in China, for example, and that wasn't a consideration in prior decades.  This is also why I think we'll return to slow GDP growth and more accommodative monetary policy as the Covid stimulus gets further drained out of the economy.  I also think this is one reason why the FAANG firms (all of this is connected is my thesis) were so quick to a reduction in force; there is just nothing coming on the horizon that appears to excite capital and Chat GPT/Bard appear poised to destroy old businesses, not build a new one (which isn't great for growth, either). 

As long as I'm making predictions, I am hopeful for a Ukraine peace bump if they can win or reach a peace agreement sometime in the next couple of years (good for growth if bad for mortgage rates).  I'm also somewhat hopeful that the Inflation Reduction Act incentives do SOMETHING, as that's the kind of thing I'd be urging policy makers to support if I was worried about creating growth without air dropping money again. 

Yeah but is low birth rates worldwide going to be enough to offset and depress all the people of Asia, Africa. the Indian Subcontinent and the 2nd world countries coming in from the cold as we saw starting in about 1995 and continuing through today- or otherwise known as a period of low rates, low inflation and wage stagnation?

The other thing we didn't talk about his energy. You can pretty much plot a map of human happiness and good times onto a map of energy costs and when those are low people do awesome and amazing and are happy and things go boom and when they are high things stagnate and suck.  We've chosen high energy prices recently, which isn't particularly helpful to any of what we are talking about either growth wise or inflation wise. I don't need to politicize this as I'm sure we all know pretty much where the other person posting here comes down on that issue, but suffice it to say how that bet turns out on renewables and regulations turns out will probably dictate a shit ton of stuff in the economy going forward and that's going to have a big knock down affect on rates and growth and inflation.  

[Gravy Train 976]

2 hours ago, Neonmoon said:

No one is going to disagree that cheap money from the pandemic Fed policy led to rapid demand and less supply, which especially fucked first time homebuyers that had to compete against wholesale investors.

But I mean, that's different from your original post of accusing lenders, realtors, and appraisers of fraud 

Some made a healthy windfall along the way and are now impacted by the market fallout.  But you know what would fix that problem sooner?  Deeper corrections on listing/contract pricing, and the power to do so is in their hands.

We shouldn't be fighting listings priced like it's 2021 in an era of 6.xx% rates and further erosion of consumer confidence.  These shanties don't justify the 40% premiums appended in just a 30-month dwell.  I'd be writing offers like it's 2019.

[Wulaw Horn 19599]

1 minute ago, Gravy Train said:

Some made a healthy windfall along the way and are now impacted by the market fallout.  But you know what would fix that problem sooner?  Deeper corrections on listing/contract pricing, and the power to do so is in their hands.

We shouldn't be fighting listings priced like it's 2021 in an era of 6.xx% rates and further erosion of consumer confidence.  These shanties don't justify the 40% premiums appended in just a 30-month dwell.  I'd be writing offers like it's 2019.

The power to correct the market pricing is in the realtors hands?  

Dude. It's like maybe you understand a little bit how this works while completely not understanding how this works.  Agents have little to no power over how much a house sells for.  Mortgage guys have zero power.  Appraisers in the aggregate have a little but in reality not much at all. You are talking about trying to hold back the tide man.  That's not how this works. 

[Gravy Train 976]

Agents suggest price based on local comps and how quickly the owner needs to close.  Appraisers, well, who the fuck knows what they do, they're just telling buyers exactly how much they're overpaying for the address.  This shouldn't be a "new norm" because only 4% of the U.S. SFH inventory turned in 2020 and 4.6% of the market transacted in 2021.

It's as if the small portion of the market that needs a new car is getting caught at the dealer paying $15K, $20K on ADM (very much a Covid-era thing) and instead of telling the dealership to fuck off for MSRP, they just shrug their shoulders and assume a bigger loan because the 4-square box made their monthly payment palatable at a 72-month term.

[Chewbacca 7830]

22 hours ago, Gravy Train said:

I'm sidelined like most of the market, either locked in by a sweet 2021-era mortgage or locked out of the price category that was budgeted in 2019, but escalated by some $200K in 2022, even in markets where the demand side shouldn't drive such appreciation, like that lake house in West Hillfuck, TX.

That "buyer demand" wasn't borne of new buyers (e.g. the tail end of the Millennial generation suddenly able to afford their first home), it was due to Fed policy and a massive opportunity for the institutional and mom-and-pop investor to scoop up anything and everything on the market for leverage.

With most buyers today constrained by 2019-era affordability measures, a price correction might fix that supply problem.  Right now, it's seller-buyer-stalemate.

I should study for those six weeks or whatever joke it takes to get with TREC just so I can write lowball offers all day every day.

If you want the lake house bad enough, just pay what you need to pay.  Otherwise you don't seem to want it enough.