All Encompassing Mortgage and Real Estate Thread

[Wulaw Horn 18921]

2 minutes ago, Neonmoon said:

Yep. As expected, jobless claims came in WAY under forecast. They will be revised. I don't think there is any fuckery, but I do think the "forecasts" need some tweaking. 

 

10 year up 2 basis points so far. Hopefully doesn't go too much further. 

Thankfully all my people are locked except 1 new construction, which I hope to lock after the "hopefully" PCE knocks us back down. Fingers crossed. 

When’s the new construction close?  I mean- when do they say it closed so you can count on 3 weeks later?  

[Neonmoon 38127]

8 minutes ago, Wulaw Horn said:

When’s the new construction close?  I mean- when do they say it closed so you can count on 3 weeks later?  

21 days after they install HVAC, Utilities, pour driveaway, etc. 

So 3 weeks from who the fuck knows. lol

[UTPhil2006 3785]

2 hours ago, Wulaw Horn said:

When’s the new construction close?  I mean- when do they say it closed so you can count on 3 weeks later?  

Ain’t that the damn truth. 

[Wulaw Horn 18921]

Red again. Down 7 at start of the market. After down 6 yesterday.  No big deal in and of themselves but what’s it been like 5 or 6 days since we had a positive market day?  Let’s finish in the green before the weekend today boys. 

[Neonmoon 38127]

Down 56 basis points this week. Was up 46 last week. Was down 47 the before. Up Down Up Down

[Wulaw Horn 18921]

19 minutes ago, Neonmoon said:

Down 56 basis points this week. Was up 46 last week. Was down 47 the before. Up Down Up Down

Think we are at a high for the year right now in interest rates, as well as being highest since what- December 1st or so?  Maybe a little earlier?  Not bad in overall trajectory, but the momentum we had all on our side seems to have stopped and market really seems to be looking for news of  rate cut before it gets going in a real and positive direction in our favor.  Need 100 bips to get to the 5.5 coupon at par, which would be nice to see.  I think on the way up when everything went to shit we were on the 5.5 coupon for about a day or 2 as it was just carnage.  

[Neonmoon 38127]

I think the market is an emotional overreacting bitch 

[Wulaw Horn 18921]

19 minutes ago, Neonmoon said:

I think the market is an emotional overreacting bitch 

Yep.  And jobs report kicked of all this sort of pessimistic cycle a couple weeks ago. Which is going to seem stupid if they are revised downward by 20 or 30k.  Also- everytime the governors open their mouths it freaks out like a little bitch as you say.  Which is funny because the governors know this and are clearly making the market dance like a puppet.  They don't want to tighten anymore, but they want the tightening effects that come from the market being in a foul mood- so everytime it looks like the market is ready to get going one of them takes a turn shitting in the punch bowl.  They want the market to tighten through pricing so they don't have to through policy. TIs working for them right now. 

[Neonmoon 38127]

Yup.

We’ve talked about this before offline but not only was the below true, it felt like it 

 

 

[Wulaw Horn 18921]

5 minutes ago, Neonmoon said:

Yup.

We’ve talked about this before offline but not only was the below true, it felt like it 

 

 

It was a buttfucking out there last year- no doubt. 

[jimmyjazz 45358]

I'm no economist, but I find this whole thing fascinating.  Demand has plummeted because interest rates more than doubled, but supply has also dropped, because most homeowners have cheap mortgages and they see no reason to sell.  So, prices have largely remained stable.  This puts further pressure on first-time buyers . . . they just can't afford the price+rate combo.

At some point this constipated market will blow out, but I have no idea in which direction.

[ChickenSandwich 9781]

Has this threat seen 5 home buyers or sellers in the last 24 months total?  

Edited January 19 by ChickenSandwich

[Wulaw Horn 18921]

12 minutes ago, jimmyjazz said:

I'm no economist, but I find this whole thing fascinating.  Demand has plummeted because interest rates more than doubled, but supply has also dropped, because most homeowners have cheap mortgages and they see no reason to sell.  So, prices have largely remained stable.  This puts further pressure on first-time buyers . . . they just can't afford the price+rate combo.

At some point this constipated market will blow out, but I have no idea in which direction.

Yep. Rates drop to 5’s this year if there are 3 price cuts and it will unclog the market a lot. My guess is though more buyers will come out than added inventory (some will keep their 2.75 rate and become landlords) price up 5-8% nationally in that scenario imo. 

[gmr548 16380]

On 1/19/2024 at 2:43 PM, jimmyjazz said:

I'm no economist, but I find this whole thing fascinating.  Demand has plummeted because interest rates more than doubled, but supply has also dropped, because most homeowners have cheap mortgages and they see no reason to sell.  So, prices have largely remained stable.  This puts further pressure on first-time buyers . . . they just can't afford the price+rate combo.

At some point this constipated market will blow out, but I have no idea in which direction.

I am with @Wulaw Horn. My bet is the direction is upward prices. The demand suppression from rates is transitory (and people tend to adjust to the new normal if it stays in place long enough anyway). There is a structural supply/demand imbalance.

[Wulaw Horn 18921]

8 minutes ago, gmr548 said:

I am with @Wulaw Horn. My bet is the direction is upward prices. The demand suppression from rates is transitory (and people tend to adjust to the new normal if it stays in place long enough anyway). There is a structural supply/demand imbalance.

Already anecdotally seeing this point on rates. Rates are higher today than they were a year ago (not by much but maybe 1/4 or 1/2 a point.  last year was tumbleweeds at this time, I think I closed 3 people total in January/february. 
this year I’ve got 17 on my board for January and February combined- 10 more making offers regularly and like 20 people getting ready to shop and tire kicking a bit. Nobody likes the rates but they’ve become resigned to them and figure they will refinance on down the road. And, they almost certainly are not wrong. 
I’ve got another group of 10-20 people I’ve talked to in the last 6 months that would have bought a house but for the fact that they are looking for something specific house and neighborhood wise and it’s not out there due to low inventory.  
we closed 52 units last year. That was 11th in my company of 1200 originators. So incredibly bleak. Night and day difference right now from my perspective. 
I think I saw apps were up 10 or 12% from last year at this time. It’s not because conditions are markedly different- they aren’t. It’s because you can only hold back demand for so long. People want to own houses, they want to upgrade, they want to move and eventually they will do so, interest rates be damned. 

Edited January 21 by Wulaw Horn

[Pato del Muerto 52215]

I’d love rates to drop and prices to go up, as it would possibly allow me to refinance out of the ARM I’ll be in asap instead of restarting the 30 year clock several years into this loan.  4 weeks to close for me.

as an aside, my realtor cost for the house I sold was 0.5%, all to my agent.  If I had to pay 5 or 6%, I probably wouldn’t be able to afford to buy in my new area. 
 

I think there’s a case to be made that in some instances, lower realtor fees lead to more home sales which is good for the industry  as a whole. At least have varying fee structures depending on what the people need or think they need. 

[Neonmoon 38127]

24 minutes ago, Pato del Muerto said:

I’d love rates to drop and prices to go up, as it would possibly allow me to refinance out of the ARM I’ll be in asap instead of restarting the 30 year clock several years into this loan.  4 weeks to close for me.

as an aside, my realtor cost for the house I sold was 0.5%, all to my agent.  If I had to pay 5 or 6%, I probably wouldn’t be able to afford to buy in my new area. 
 

I think there’s a case to be made that in some instances, lower realtor fees lead to more home sales which is good for the industry  as a whole. At least have varying fee structures depending on what the people need or think they need. 

Americans need to learn how to negotiate realtor fees (and everything else)

[Pato del Muerto 52215]

3 minutes ago, Neonmoon said:

Americans need to learn how to negotiate realtor fees (and everything else)

Is that the position of the NAR?  

[Dbeasy 14917]

26 minutes ago, Neonmoon said:

Americans need to learn how to negotiate realtor fees (and everything else)

What amazes me is that negotiation at the luxury/high end isn’t even done often.

If you are selling a modest home, that 3%, of which the broker often takes 30%, doesn’t leave a ton of money for the agent, given the long hours and expertise required. But for a higher priced house? The fees are ridiculous. 

[Gil Bang 25827]

10 minutes ago, Dbeasy said:

What amazes me is that negotiation at the luxury/high end isn’t even done often.

If you are selling a modest home, that 3%, of which the broker often takes 30%, doesn’t leave a ton of money for the agent, given the long hours and expertise required. But for a higher priced house? The fees are ridiculous. 

Anybody working on a 70-30 split is a sucker, or is brand new. 

[Pato del Muerto 52215]

16 minutes ago, Dbeasy said:

What amazes me is that negotiation at the luxury/high end isn’t even done often.

If you are selling a modest home, that 3%, of which the broker often takes 30%, doesn’t leave a ton of money for the agent, given the long hours and expertise required. But for a higher priced house? The fees are ridiculous. 

Our 0.5% was 2k. For that, he sent us a cardboard and wire yard sign and a lock box. He put our property on MLS (and Zillow etc if those don’t pull from mls), and he set up the account on the app that manages showings.  All unrepresented buyers went straight to us, represented buyers he dealt with their realtor in limited fashion. 
 

he did not negotiate on our behalf. 
 

when the time came, he generated and provided via docusign the required disclosures, contract, amendments that followed. 
 

we were on market for around 3 weeks before accepting an offer and closed 4 weeks after that. 
 

I feel like we got good value for what was provided. If he made 1400 for that amount of effort and prior knowledge, do you think he was paid fairly?  
 

That is one of his advertised services, btw, we didn’t have to negotiate him down to that level. He also does more standard representation, and we went into this thinking we would pivot to that if it didn’t work out otherwise. 
 

since his office is based in Austin proper, I wonder if his model expects higher value properties in general than he got with us. But he accepted, so he must have had some time for another client.  We did give him a stellar review on the platform of his choice so maybe that will help him going forward as well. 

Edited January 21 by Pato del Muerto

[South Austin 51951]

2 hours ago, gmr548 said:

I am with @Wulaw Horn. My bet is the direction is upward prices. The demand suppression from rates is transitory (and people tend to adjust to the new normal if it stays in place long enough anyway). There is a structural supply/demand imbalance.

Since my house is going on the market in a couple months, even if there hasn’t been a significant drop in rates, I’m thinking/hoping that buyers market will be betting the rates will drop over the next 12 months, so the mentality will be to suck it up and buy now, and refinance a year later.

[Neonmoon 38127]

1 hour ago, Dbeasy said:

What amazes me is that negotiation at the luxury/high end isn’t even done often.

If you are selling a modest home, that 3%, of which the broker often takes 30%, doesn’t leave a ton of money for the agent, given the long hours and expertise required. But for a higher priced house? The fees are ridiculous. 

Median home price is $430,000. 3% is $12,900, and 70% take home is $9,030

Median personal income is $41,000. You must sell 4.5 homes to reach this

According to Housing Wire, the majority of agents sell 5 homes or less. 

[Incredulity 11383]

19 hours ago, Pato del Muerto said:

Our 0.5% was 2k. For that, he sent us a cardboard and wire yard sign and a lock box. He put our property on MLS (and Zillow etc if those don’t pull from mls), and he set up the account on the app that manages showings.  All unrepresented buyers went straight to us, represented buyers he dealt with their realtor in limited fashion. 
 

he did not negotiate on our behalf. 
 

when the time came, he generated and provided via docusign the required disclosures, contract, amendments that followed. 
 

we were on market for around 3 weeks before accepting an offer and closed 4 weeks after that. 
 

I feel like we got good value for what was provided. If he made 1400 for that amount of effort and prior knowledge, do you think he was paid fairly?  
 

That is one of his advertised services, btw, we didn’t have to negotiate him down to that level. He also does more standard representation, and we went into this thinking we would pivot to that if it didn’t work out otherwise. 
 

since his office is based in Austin proper, I wonder if his model expects higher value properties in general than he got with us. But he accepted, so he must have had some time for another client.  We did give him a stellar review on the platform of his choice so maybe that will help him going forward as well. 

I think its a very cool option for a seller who doesn't need a bunch of hand holding.  

As we all know home buying and selling is most often the largest transaction an individual will ever do.  That leads to a fuckload of emotion/irrationality, like going nuclear over a $2500 re-carpet of a living room on a $500,000 transaction.  

Real estate brokers who can develop a upper-end clientele with good volume can make a killing.  Most of the rest of the broker market is a dog fight. You can make a living, but no one is cutting a fat hog in the ass.

 

[Pato del Muerto 52215]

39 minutes ago, BeardIP said:

Did I read this right that you sold a house for $200k? In Austin? Didn't know that existed.

Was it a shed abutting a homeless camp off 35?

You did not.  

[jimmyjazz 45358]

1 hour ago, BeardIP said:

Did I read this right that you sold a house for $200k? In Austin?

0.5% was $2K and you calculated $200K?

[LebongJames 1777]

1 hour ago, BeardIP said:

Sorry, I flipped it with the mental math. I blame my dyscalculia.

So, to fix it:

Did I read this right that you sold a house for $400k? In Austin? Didn't know that existed.

Was it REALLY in Austin or was it 30 miles away? shed abutting a homeless camp off 35?

Not that his house is in these areas but there are plenty of houses in that range in South Austin, SE Austin, NE Austin and North Austin between 35 and Braker.

[Neonmoon 38127]

I am nonplussed 

[UTPhil2006 3785]

31 minutes ago, Neonmoon said:

I am nonplussed 

Down for up 4 down 3 up 10. We’re going the wrong way. Damn you Habib. 

[Neonmoon 38127]

We are down 60 basis points in the past 7 days. Probably slide even further until Friday, then regain *hopefully* just what we already lost after PCE drops

(cries inside)

[UTPhil2006 3785]

15 minutes ago, Neonmoon said:

We are down 60 basis points in the past 7 days. Probably slide even further until Friday, then regain *hopefully* just what we already lost after PCE drops

(cries inside)

[Pato del Muerto 52215]

On 1/22/2024 at 11:45 AM, BeardIP said:

Sorry, I flipped it with the mental math. I blame my dyscalculia.

So, to fix it:

Did I read this right that you sold a house for $400k? In Austin? Didn't know that existed.

Was it REALLY in Austin or was it 30 miles away? shed abutting a homeless camp off 35?

I never said it was in Austin. I said I’d guess his preferred or typical client is in Austin. This property was in Georgetown.  

[Wulaw Horn 18921]

1 hour ago, Neonmoon said:

We are down 60 basis points in the past 7 days. Probably slide even further until Friday, then regain *hopefully* just what we already lost after PCE drops

(cries inside)

We were up 20 points and now flat on the day.  That's 2 of the last 3 days we did that starting out with strong starts that deteriorated before lenders even got their pricing out for the day.  Not sure what the boat anchor is that keeps taking good days and reeling them back in.  CPI needs to hit at 3 or less and at least meet expectations.  Habib's update was interesting this morning saying essentially that if Shelter were fixed it would be 6/10ths lower (time will fix it- it lags) and that 10M spot checks had inflation at 1.87 vs the 80k used in the report.  That tells me again that it's likely that what we think is going to happen this year is going to actually happen- that we get to cut rates multiple times and things start to get better. 

Interestingly enough- rates 0.5% higher than this time last year, but apps up 11%  People are starting to get used to it and demand is starting to pick up even without (relative) tailwinds from the mortgage side.  I really think if you can find a house you like and you don't buy it today b/c you are waiting for rates you aren't going to like what you have to pay for it 9 months from now- to go back to @jimmyjazzquestion from earlier in the week about where the see saw ends.  I think demand is going to win (at least around Texas). 

[Neonmoon 38127]

56 minutes ago, Wulaw Horn said:

We were up 20 points and now flat on the day.  That's 2 of the last 3 days we did that starting out with strong starts that deteriorated before lenders even got their pricing out for the day.  Not sure what the boat anchor is that keeps taking good days and reeling them back in.  CPI needs to hit at 3 or less and at least meet expectations.  Habib's update was interesting this morning saying essentially that if Shelter were fixed it would be 6/10ths lower (time will fix it- it lags) and that 10M spot checks had inflation at 1.87 vs the 80k used in the report.  That tells me again that it's likely that what we think is going to happen this year is going to actually happen- that we get to cut rates multiple times and things start to get better. 

Interestingly enough- rates 0.5% higher than this time last year, but apps up 11%  People are starting to get used to it and demand is starting to pick up even without (relative) tailwinds from the mortgage side.  I really think if you can find a house you like and you don't buy it today b/c you are waiting for rates you aren't going to like what you have to pay for it 9 months from now- to go back to @jimmyjazzquestion from earlier in the week about where the see saw ends.  I think demand is going to win (at least around Texas). 

I really do want to know what that up 20 points in the morning shit is, and then a kneecap 30 minutes later. Cock teases. 

Apps are up because of the big drop from 8%. People just know that 6.75% is a hell of a lot better than 8%. The market is reactionary. March rate cut just got pushed back to May, and it doesn't even look like a strong bet it happens in May. Of course if there is good news on Friday, then it could swing the other way. Jobless claims and GDP on Thursday probably ain't going to do us any favors. 

[Wulaw Horn 18921]

27 minutes ago, Neonmoon said:

I really do want to know what that up 20 points in the morning shit is, and then a kneecap 30 minutes later. Cock teases. 

Apps are up because of the big drop from 8%. People just know that 6.75% is a hell of a lot better than 8%. The market is reactionary. March rate cut just got pushed back to May, and it doesn't even look like a strong bet it happens in May. Of course if there is good news on Friday, then it could swing the other way. Jobless claims and GDP on Thursday probably ain't going to do us any favors. 

Yeah- that's my point on rates being up- people are now looking in a relative way to more recent times and saying "this sucks but it's ok" instead of 3 years ago and saying this is untenable.  

My read is the same as yours I think- cut in May instead of March unless the inflation numbers are great (narrators voice- they won't be).  Down 8 on the day- down 30 from the highs this morning.  Twas fun while it lasted (30 minutes). 

[LCHorn 2570]

27 minutes ago, Wulaw Horn said:

Yeah- that's my point on rates being up- people are now looking in a relative way to more recent times and saying "this sucks but it's ok" instead of 3 years ago and saying this is untenable.  

My read is the same as yours I think- cut in May instead of March unless the inflation numbers are great (narrators voice- they won't be).  Down 8 on the day- down 30 from the highs this morning.  Twas fun while it lasted (30 minutes). 

Let me give you a different bit of analysis--buyers (and maybe some sellers) now know that the Fed pivot is here.  The Fed isn't raising further short of something extraordinary and that's making it easier for them to drink the Koolaid that there's a refinance to come before the end of the year.  

[Wulaw Horn 18921]

7 minutes ago, LCHorn said:

Let me give you a different bit of analysis--buyers (and maybe some sellers) now know that the Fed pivot is here.  The Fed isn't raising further short of something extraordinary and that's making it easier for them to drink the Koolaid that there's a refinance to come before the end of the year.  

That's fair too, we were telling people that rates will likely be lower some time in the future throughout 2023, but it seems more plausibly right now sooner rather than later I suppose.  

[jimmyjazz 45358]

All that, and 6.x% is historically pretty decent.

[Neonmoon 38127]

I was wrong. Well jobless claims surprised and went way higher 

 

 

[Wulaw Horn 18921]

54 minutes ago, Neonmoon said:

I was wrong. Well jobless claims surprised and went way higher 

 

 

Huh- interesting. We haven’t gotten much of a bump in mbs just up 9 right now. GDP also overperformed at 3.3 v expectations of 2.0. Maybe cancelling each other out?  

[Storm the Field 5266]

59 minutes ago, Neonmoon said:

I was wrong. Well jobless claims surprised and went way higher 

 

 

Catch-up data from last week's freeze-related undershoot.

Edited January 25 by Storm the Field

[Neonmoon 38127]

10 minutes ago, Wulaw Horn said:

Huh- interesting. We haven’t gotten much of a bump in mbs just up 9 right now. GDP also overperformed at 3.3 v expectations of 2.0. Maybe cancelling each other out?  

Looks like it. We're back up to this week's floor, but I'll take whatever I can get. 

[Wulaw Horn 18921]

21 minutes ago, Neonmoon said:

Looks like it. We're back up to this week's floor, but I'll take whatever I can get. 

Tomorrow tells the story. A solid inflation number and we are off to the races. Miss expectations and we trade sideways for another month. 

[jimmyjazz 45358]

1 hour ago, Wulaw Horn said:

Tomorrow tells the story. A solid inflation number and we are off to the races. Miss expectations and we trade sideways for another month. 

Core PCE was right on target today at 2.0%.  (Last 4 quarters were 5.0%, 3.7%, 2.0% and 2.0%.)

[Neonmoon 38127]

3 minutes ago, jimmyjazz said:

Core PCE was right on target today at 2.0%.  (Last 4 quarters were 5.0%, 3.7%, 2.0% and 2.0%.)

Today was Core PCE prices for (Q4)

The past releases were

@Wulaw Horn is talking about Core PCE Index (YoY), which will be released tomorrow morning at 8:30am EST and the forecast is 3.0%. 

[jimmyjazz 45358]

I understand.  Just pointing out the early information.

[Boss Hogg 808]

 

[Dbeasy 14917]

On 1/24/2024 at 11:22 AM, Pato del Muerto said:

I never said it was in Austin. I said I’d guess his preferred or typical client is in Austin. This property was in Georgetown.  

Just out of curiosity, would you still feel as good about the transaction if you found out you left $14k of price on the table?

[Pato del Muerto 52215]

44 minutes ago, Dbeasy said:

Just out of curiosity, would you still feel as good about the transaction if you found out you left $14k of price on the table?

Well no, obviously.  But where are you coming up with that figure?

Does it cost me 4.5% in realtor fees to get that additional 3.5 in sales price?

Edited January 26 by Pato del Muerto

[Dbeasy 14917]

14 minutes ago, Pato del Muerto said:

Well no, obviously.  But where are you coming up with that figure?

Does it cost me 4.5% in realtor fees to get that additional 3.5 in sales price?

Obviously I don’t know your specific situation. But I work in the real estate business and see all the time things that cost sellers and buyers tens of thousands of dollars and they don’t even realize it.

For example, sellers being shown pricing comps and recommendations that are poorly done. Or selling agents who aren’t responsive, causing buyers to move on. There are another dozen examples I could give.

It’s great you got a very low price to sell your house. And maybe financially it was a great deal. But it might be difficult for many folks to really know whether they netted the maximum funds or not.

I guess the last thing I would say is if someone is willing to do that work for such a small fee, it does raise some questions about the quality of representation you are getting, and what risks you are being exposed to without realizing it.  

.