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UTPhil2006

By UTPhil2006
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mchookem
mchookem

alrighty...i haven't wanted to jinx anything so i've been pretty quiet... but we just closed on our new home in Denver this morning so i can now officially say YEAH! 😃 in a nutshell - we sold

Esque
Esque

Thank you for this - gave me a good laugh.  But also a good reminder of how the general public does not understand what is going on in real estate and thus why so many get caught offsides when the tid

Neonmoon
Neonmoon

Realtor: You should list your house at 500K Client: But three houses down the street sold for 700K Realtor: Yeah, but those are overvalued due to pandemic Fed policy and institutional invest

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Chewbacca

Chewbacca 7829

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I don’t think it will be long term but there could a 5% drop over the next year. If there is a drop there would be 1-3% increase the following year. I don’t see 5% drop as major as I said earlier. Maybe a slight correction of 12 years of straight growth.
Is that a yes or a no?
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LebongJames

LebongJames 1920

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16 minutes ago, Chewbacca said:
20 minutes ago, LebongJames said:
I don’t think it will be long term but there could a 5% drop over the next year. If there is a drop there would be 1-3% increase the following year. I don’t see 5% drop as major as I said earlier. Maybe a slight correction of 12 years of straight growth.

Is that a yes or a no?

Not a chance can you take a 5% bet, things can swing but overall I am very confident in the Austin and Texas housing market. This was fun as I crushed multiple beers.

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Chewbacca

Chewbacca 7829

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Not a chance can you take a 5% bet, things can swing but overall I am very confident in the Austin and Texas housing market. This was fun as I crushed multiple beers.


So you are a20%or nothing kind of guy? You aren't as confident as you sound.

I'm confident in most RE long term. We are talking short term.
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Upgrayedd

Upgrayedd 5883

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It’s an interesting discussion and I think different regions and underlying economics obviously dictate what’s going on.

Chewy’s point is well taken about CO and renting.  That’s been my position for the past few weeks.  Get up there.  Rent.  Be nimble with opportunities.  

Mountain communities are different than flat suburban.  In my mind, valuations are supported by the rental income produced.  If that income isn’t happening:  that shit gets sold.  How many condo owners in Vail Valley, Summit, or WP can float 18 months of payments with no revenue to offset? 

IKON is already offering a deferral to 21/22 for people that purchase passes for 20/21.  That’s not a good sign for existing landlords.  
 

The other variable in the program is I have to have a fucking job up there.  My plan was to find work up there and I could have rotated to Denver and commuted twice a week, but medium-rare bat-eaters fucked that up (no CR intended-OK, maybe a little).  I’ve got a bunch of work in Phoenix, and maybe will ride that train to the station.  She’s in mortgage underwriting, and probably the best at that lender, so she’s set.   I’m trying to launch a chicks-only FaceTime porn subscription, so I’m having a tough time.  The unsolicited seems to be popular based on the feedback (complaints and cease/desist notwithstanding). Just trying to monetize.

My $0.02

 

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Gladeite

Gladeite 376

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The market overall is still frozen.  Using Austin as an example, many sellers have pulled their homes off the market due to the pandemic and not wanting DOM to accumulate during a dead period.  Selling agents are very keen and incentivized to have low DOM.  This artificially depresses the supply market.  The shutting down of the economy has resulted in mass layoffs, combined with an unprecedented upheaval in the oil business, has eliminated the buying pool.  The mortgage servicing industry is having record payment lapses which tightens up the lending part of the equation.   In the $1MM+ market, which for Austin is a large sector, there are a total of 10 homes under contract in the past 30 days. One is a new build that had a deal working for a long time and one is a foreclosure.  There are 316 homes currently listed for sale in Austin over $1MM.  What does this information tell us?  Nothing, the sample size is too small and the numerator/denominator have unknown variables at the present time.  I am going to go with frozen.  No-one knows what to do, what next month will look like and what the unintended consequences of this shutdown have caused.  I think it is dramatic and there will be a gap down in residential prices.  Especially above $1MM.  The $3-500 market may be less impacted?  A lot of those people are laid off but not in the marketplace yet.  We will know more in 60-90 days.

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troph

troph 25204

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It’s largely frozen in Austin at the moment but that’s artificial mostly due to government orders. The question is will that morph into an organic freeze when orders lift. Prior the supply and demand equation was predictably driving prices higher. The migration and lack of quality builds available, the sheer lack of any housing drive prices up. It was an extreme sellers market. The equation has balanced some with the shelter in place. The mortgage lending component is a wild card but when the shelter in place lifts, tell me how the Austin supply and demand balance changes? skip this summer I think there will be a slow down this summer as the shelter in place type orders won’t be fully lifter until June 1 or later, look after that. I’m willing to be convinced it’s bad but I just don’t see the clear path to it absent 12-18 months of viral terror like the last 3-4 weeks.

 

As for higher prices - at least in the core of central Austin - our construction company doesn’t sell anything below $1.5m and under $2m is still moving. We see pending reports weekly and homes are moving. Not a lot of price breaks yet. $2m+ is slow but that’s always slow. Buyers seem able but reluctant. We have one home that’s a parade of homes level build and north of $2m and it’s everyone’s #1 or #2 and yet they all want to wait. It’s also difficult because for everything but the really huge homes in our neighborhoods $2m is a new level up so it’s a vulnerable price point but shows value for those listings under $2m. We are bullish on selling it in June or July but after that we will likely yank it and lease it to cover costs. I guess my thinking is we won’t really know for a while.

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troph

troph 25204

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A lot of speculation in the last 30 comments or so. 

You are an expert of the obvious.

Trying to take known data and extrapolate what it means for the next 12 months in circumstances that we’ve never experienced. And unfortunately for some of us the 12-18 month “decisions” are right in front of us. Driving a business is a lot like flying a plane or submarine by instruments only. It’s not easy and speculation, inference, deduction and educated guessing is required.

But you keep being the expert.
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Gil Bang

Gil Bang 26230

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Effin Realtors man. Buyers agent didn’t get the amendment to the lender and rules require 3 days lead time on getting things squared away before closing. So pushed back to late next week... butttt buyer agent is now paying buyers the $500 early close credit so I’m coming out ahead a few hundo. I’d rather have it closed though

That’s a fuck up indeed. But, your agent could’ve been checking with the Lender as well.

In the final stretch, I’m talking to escrow and the Lender every day whether or not I represent the buyer.
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Gil Bang

Gil Bang 26230

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Effin Realtors man. Buyers agent didn’t get the amendment to the lender and rules require 3 days lead time on getting things squared away before closing. So pushed back to late next week... butttt buyer agent is now paying buyers the $500 early close credit so I’m coming out ahead a few hundo. I’d rather have it closed though

That’s a fuck up indeed. But, your agent could’ve been checking with the Lender as well.

In the final stretch, I’m talking to escrow and the Lender every day whether or not I represent the buyer.
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bluto

bluto 4995

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That’s a fuck up indeed. But, your agent could’ve been checking with the Lender as well.

In the final stretch, I’m talking to escrow and the Lender every day whether or not I represent the buyer.

Mainly pinning it on both title co and buyer agent, but agree it’s on my realtor too. Especially considering there’s no way either agent has a damn thing in their pipeline otherwise (I imagine)
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UTPhil2006

UTPhil2006 3930

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16 hours ago, bluto said:


Mainly pinning it on both title co and buyer agent, but agree it’s on my realtor too. Especially considering there’s no way either agent has a damn thing in their pipeline otherwise (I imagine)

Correct all 3 should have been on top of it.

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Your Mom

Your Mom 4965

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My Austin home is 8 days from closing.  Went and looked at a couple houses Friday for the first time.  Not planning on making any offers until mine closes.  The first offer on mine backed out right after the virus situation got serious.  Within 3 days we had more offers above list price.  So far so good on the second go-round.  Sometimes I get tempted to rent for 6 months to see what happens with home prices and see if I get a better deal after that but the pain-in-the-ass factor is a big deal to me and the potential savings would have to be massive for that to be worth it to me.  Probably just gonna press on with a purchase as soon as mine closes.  I have noticed the neighborhoods I have my eye on aren't moving as fast.  The two houses I checked out Friday have both been on the market several weeks, this in a neighborhood that usually has deal pending within the first couple of days. 

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UTPhil2006

UTPhil2006 3930

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37 minutes ago, Your Mom said:

My Austin home is 8 days from closing.  Went and looked at a couple houses Friday for the first time.  Not planning on making any offers until mine closes.  The first offer on mine backed out right after the virus situation got serious.  Within 3 days we had more offers above list price.  So far so good on the second go-round.  Sometimes I get tempted to rent for 6 months to see what happens with home prices and see if I get a better deal after that but the pain-in-the-ass factor is a big deal to me and the potential savings would have to be massive for that to be worth it to me.  Probably just gonna press on with a purchase as soon as mine closes.  I have noticed the neighborhoods I have my eye on aren't moving as fast.  The two houses I checked out Friday have both been on the market several weeks, this in a neighborhood that usually has deal pending within the first couple of days. 

Yeah it's definitely a case by case/neighborhood basis.  Still moving relatively quickly in Cedar Park from our experiences.

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vtaenz

vtaenz 603

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Yeah it's definitely a case by case/neighborhood basis.  Still moving relatively quickly in Cedar Park from our experiences.
Since school is cancelled now think the inventory will start to tick up at all now or not until after things start to open up again?
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UTPhil2006

UTPhil2006 3930

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18 minutes ago, vtaenz said:
55 minutes ago, UTPhil2006 said:
Yeah it's definitely a case by case/neighborhood basis.  Still moving relatively quickly in Cedar Park from our experiences.

Since school is cancelled now think the inventory will start to tick up at all now or not until after things start to open up again?

Good question.  COVID kind of changes the whole summer/school being done season, but I would think maybe as things start returning somewhat back to normal yeah it could start a few weeks earlier.

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UTPhil2006

UTPhil2006 3930

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On 4/19/2020 at 10:21 AM, Neonmoon said:

 

Some real estate analysts are predicting increased migration to Austin from the coasts because of pandemic 

Please tell me this isn’t true 

I wouldn't say any more than normal.  They've been coming for a while though.

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Cajun

Cajun 11772

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On 4/19/2020 at 10:21 AM, Neonmoon said:

 

Some real estate analysts are predicting increased migration to Austin from the coasts because of pandemic 

Please tell me this isn’t true 

It's not.  People will be looking rural and to distance from municipalities hell bent on mass transit "solutions".  They'll commute to the city in their car, alone.

Close by airports with international travelers funneling in and out hourly?

Yeah, that's no longer an asset when making a home buying decision.

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bluto

bluto 4995

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‘Tis done! Closed today, money wired to bank acct this afternoon. Never saw my realtor throughout the entire transaction. One shot one kill with them listing and selling on first wkend to first viewer. What an effing relief

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luke duke

luke duke 6449

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It's not.  People will be looking rural and to distance from municipalities hell bent on mass transit "solutions".  They'll commute to the city in their car, alone.

Close by airports with international travelers funneling in and out hourly?

Yeah, that's no longer an asset when making a home buying decision.

 

These thoughts will last about 2 months after the 2nd peak and then it’s business back as usual. People have a very short memory.

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horncyclist

horncyclist 1391

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Anyone have a good summary on points and why they might make sense?

We had our appraisal come in oddly low ($50k less than we did a HELOC two years ago even though home values are up 10-15%) so we're starting over on our refi. Broker said he could a 3.75 zero point cash out refinance. That sounds good but made me curious about points. 

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UTPhil2006

UTPhil2006 3930

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35 minutes ago, horncyclist said:

Anyone have a good summary on points and why they might make sense?

We had our appraisal come in oddly low ($50k less than we did a HELOC two years ago even though home values are up 10-15%) so we're starting over on our refi. Broker said he could a 3.75 zero point cash out refinance. That sounds good but made me curious about points. 

How long are you going to be in the property?  Ultimately just a matter of how long/cost/break even point.  If you're going to be in the home a good while they usually make sense if they are feasible

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Gil Bang

Gil Bang 26230

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I closed an escrow today myself.  May be the last one for a while.   Should have been a simple, clean deal, but the other agent's incompetence (which I imagine to be mostly due to senility at his advanced age) made it a complete nightmare and it closed 10 days later than it should have.

Oh well, it's done, and I get to pick up a check tomorrow.   

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Wulaw Horn

Wulaw Horn 19582

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So Phil might say differently on the cash out (and he might have a different money source than I do), but I just got told by my sharpest rep that they will be putting a 500 basis point hit on all cash outs in Texas starting Friday morning. That translates, typically to about a 1 percentage point hit to the borrower in interest rate. 

If you are on the fence about a cash out and can lock right now for anything in the 3’s I would highly recommend you do so. Tomorrow. Again, Phil might say different but this dovetails with another of my lenders saying cash outs will now require 3 months reserves, 720 credit scores and 36% DTI. 

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Dbeasy

Dbeasy 15582

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So Phil might say differently on the cash out (and he might have a different money source than I do), but I just got told by my sharpest rep that they will be putting a 500 basis point hit on all cash outs in Texas starting Friday morning. That translates, typically to about a 1 percentage point hit to the borrower in interest rate. 
If you are on the fence about a cash out and can lock right now for anything in the 3’s I would highly recommend you do so. Tomorrow. Again, Phil might say different but this dovetails with another of my lenders saying cash outs will now require 3 months reserves, 720 credit scores and 36% DTI. 


Why would cash outs be much higher than just a normal purchase mortgage
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Dbeasy

Dbeasy 15582

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So Phil might say differently on the cash out (and he might have a different money source than I do), but I just got told by my sharpest rep that they will be putting a 500 basis point hit on all cash outs in Texas starting Friday morning. That translates, typically to about a 1 percentage point hit to the borrower in interest rate. 
If you are on the fence about a cash out and can lock right now for anything in the 3’s I would highly recommend you do so. Tomorrow. Again, Phil might say different but this dovetails with another of my lenders saying cash outs will now require 3 months reserves, 720 credit scores and 36% DTI. 


Why would cash outs be much higher than just a normal purchase mortgage
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Wulaw Horn

Wulaw Horn 19582

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Posted (edited)
19 minutes ago, Dbeasy said:

 


Why would cash outs be much higher than just a normal purchase mortgage

 

Fannie/fhma just gave guidance to servicers that they will backstop the market on forebarances with most typical conforming loans. That was well fucking needed and will probably keep a bunch of wholesalers from going out of business. They specifically exempted all 50a6 Texas cash outs form what they are backstopping  (and maybe government cash outs like fha or va cash out- but you can’t do those in Texas so I don’t know/don’t care)

So, servicers are naked on those loans. I’m sure there’s also a fear of people doing cash outs due to fear of losing a job or economic crisis. There was always about a 1/4 hit in rate on these which would typically translate to 100 or so basis points. Now that they are exposed that 100 points became 500 points. 

In a normal market 1/8 of a point in rate works out to 50 basis points in yield. So 500 basis points is at least 1.25 from a normal loan, or 1 point above the standard price hike for a home equity. 

Again- no idea how this affects non Texas cash outs. That’s also not to say every lender will deal with it like this. But yeah- it’s really ugly. 

Near as I can tel market has stabilized price wise (more or less) and capacity issues are mostly worked out- but there’s been a huge shift as to the quality required to do a loan. 

Mid guess that if current homeowner ship rate is 63%, of these standards were permanent the homeownership rate would be less than 50%. Thats a huge hit to the economy. And crushing to the American Dream. I have no idea how long this flight to quality will exist. Shouldn’t affect the shaggy 1% but a lot of people going to get pinched. 

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