Real Estate Crash thread

working for IBM in the 80's was like being made by the Mafia

except that instead of Guido telling me he was gona make an offer I couldn't refuse

this greasy little christian businessman made me the lifetime job offer

and i had no idea wtf until 30 yr later and it is still paying every month

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Originally Posted by Ted Striker

Define correction.

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10% drop in the median price of a home.

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Originally Posted by Ted Striker

We won our first house even though the competing offer was higher. Without getting into the details, they just liked us better.

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That's awesome, and I have often thought that when we sell I will happily take less $$ from a local family with kids rather than the largest cash offer from some out of state speculator trying to profit off Montana.

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Originally Posted by Art Shirk

Have a mortgage broker buddy who is clearly trying to close out a non abysmal Q4 by spamming his Facebook page with temporary buy down posts. Thought being, rate ratchets up each year and ultimately lands on the current rate in year 4 but you hope for a refi before then I guess. And I assume the seller basically “pays” for the buy down somehow, maybe dropping purchase price by a fraction that is rolled into this program for the buyers benefit but it gets the house sold in a tough market?

Curious what you dirt pimps know about this and if it is actually being used? Not in the market but was curious.

I’m getting timeshare math vibes from the guy.


Sent from my iPhone using TGR Forums

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Yes, buy downs are being used a lot right now. You got the gist of it. They are different than just buying points. It’s not what I do so I’m not going to go into it in a lot of detail, but as I understand it, buying points the money is spent and ultimately the longer you hold the note no refi the better the value for you. With these buy downs the money is held and credited so the quicker the rate change the better. You can roll the funds from the buy down into a refinance assuming the right rate environment.

Probably not just an abysmal Q4, a lot of mortgage brokers and real estate agents already are or will be pursuing new careers in the near future.

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Originally Posted by lowsparkco

With these buy downs the money is held and credited so the quicker the rate change the better. You can roll the funds from the buy down into a refinance assuming the right rate environment

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Nope, I have never seen a refinanced buy down early payoff result in a partial credit.

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Originally Posted by fastfred

It's a slow fade to stagnation

By Feb the market will start to feel it

The reality of higher taxes and higher ins costs are just starting to catch up

People have been riding the pig with helocs spent on consumer goods and over leveraging to buy multiple properties at inflated costs.

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Yep. Smells like 2009
Only with higher rates.

The one difference is higher labor and material costs.
I see a decent correction. But not all the way back. PSF costs are baked into the new cake.

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

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Originally Posted by AdironRider

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

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Yep, I feel similar. Price regression in slow steps unless there's meaningful rate changes. I know in NH a lot of mountain properties are cutting prices back to semi sane levels. I want to say we still have 50-100k to go in the current rate environment, but that's entirely seat of the pants.

Interest rates need to come down, not just for first time buyers, but to get boomers out of their empty nests.

Magnifying the problem in California are boomers living in homes with artificially low property taxes due to prop 13.

Unless there's a way to get them out of their 4/3's, it's just a waiting game until they die off.

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Originally Posted by I Skied Bandini Mountain

Interest rates need to come down, not just for first time buyers, but to get boomers out of their empty nests.

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I'm not sure how lower interest rates would be an incentive for Boomers to sell?

The great 08 correction got up here eventualy so the last local down turn was 2010 , even tho we did not experiance anywhere near the problems becuz Canadian banks were not allowed to deregulate,
it was the sleeping next to the elephant when it shit the bed and i want to thank y'all cuz i could get back in the RE on the low cycle

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Originally Posted by skaredshtles

I'm not sure how lower interest rates would be an incentive for Boomers to sell?

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They're sitting in homes with low interest rate mortgages, shopping for a new place with 7.5% rates on top of inflated prices isn't appetizing. Even with huge amounts of equity, empty nesters are holding back.

We're a good case of reference. We bought this place in 2012 at the absolute bottom, with a ridiculously low rate. We're now sitting on a mostly empty house with a shit ton of equity and low monthly mortgage payments, but why the hell would we want to sell, and where are we going to go that isn't overpriced to hell and with a 7+% note?

But we're not going to hold out for long, I'm ready to blow this popsicle stand. I'm tired of working on old houses and we're just looking for a place to land once we get my elderly folks situated.

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Originally Posted by AdironRider

people actually have to qualify for their loans these days.

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And, AFAIK, today's financial markets aren't flooded with synthetic CDOs.

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Originally Posted by I Skied Bandini Mountain

They're sitting in homes with low interest rate mortgages, shopping for a new place with 7.5% rates on top of inflated prices isn't appetizing. Even with huge amounts of equity, empty nesters are holding back.

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I just assumed they would be mortgage-free, like me (though I'm *not* a Boomer), and purchasing something smaller with cash.

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Originally Posted by AdironRider

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

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are there many meh ski areas left whos appeal isn’t based on proximity? There’s a dozen or so premium resorts in the us, and a bunch of other places that exist because a 2-5hr drive is nicer for people than a flight, and those places depend on the strength of their source basins economy.

Cough .... Grand Targhee and Teton Valley .... Cough

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Originally Posted by AdironRider

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

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Driggs isn't even a 2nd rate town with a meh school district. It's a 4th rate town with a momo controlled school district and a resort that's less than meh on the 75-100 days when there's no fresh powder.

Yet the insanity continues....probably 50x more STRs available than LTRs

Driggs is overrated affluenza has entered the chat, for whatever it is, and how expensive it is, there’s a shot ton more shit below it.

I’d add Bend and Bachelor to that list.

A bright spot in a desert of lift access skiing.

Probably at this point, most would say unfortunately way too close to PDX.

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Originally Posted by Dantheman

And, AFAIK, today's financial markets aren't flooded with synthetic CDOs.

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All the big banks are performing "synthetic risk transfers" these days

No one in the wider world seemed to know shit about CDO's and other '08 bank shenanigans until after the fact.

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Originally Posted by oldnew_guy

No one in the wider world seemed to know shit about CDO's and other '08 bank shenanigans until after the fact.

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The economist/the ft/the wsj had semi regular articles pre crash, this is from 2004 https://www.economist.com/finance-an...3/russian-doll

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Originally Posted by AdironRider

Cough .... Grand Targhee and Teton Valley .... Cough

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COVID?

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Originally Posted by neckdeep

It's a 4th rate town with a momo controlled school district and a resort that's less than meh on the 75-100 days when there's no fresh powder.

Yet the insanity continues....probably 50x more STRs available than LTRs

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Agreed about STR insanity. Some people are going to go cash flow negative and sell at a loss if we have a bad snow year or when the economy slows.

The school district is no longer controlled by the LDS after the election yesterday and LDS families are actively being pushed out of the area. 1950s family structure with a single income earner and 6 kids doesn't work, especially not in a HCOL mountain town. I don't believe a single LDS candidate won in any of the local elections yesterday except for the mayor of Tetonia. The mormon families who lived on my street 3 years ago have now left the area. Will more leave now that the school district isn't a lock?

Most importantly, the US has added 34 million people since 2008. There are zero additional ski towns and there will probably never be another major ski resort developed in the US.

I have a very different opinion of the skiing here, but uh...yeah....it's meh. Nothing to see...

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Originally Posted by I Skied Bandini Mountain

They're sitting in homes with low interest rate mortgages, shopping for a new place with 7.5% rates on top of inflated prices isn't appetizing. Even with huge amounts of equity, empty nesters are holding back.

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Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

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Originally Posted by Mani_UT

Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

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In talking with my octogenarian father and his cohorts, most are just too old accept the reality of today’s prices despite their relative property wealth Even sitting on million dollar properties (debt free), they see the cost of a new apartment of townhouse and say the market is crazy high and they won’t pay it. Not that their real estate is in the range of most new families anyhow, but their responses makes me smile and think of the ‘back in my day a gallon of milk cost a nickel’ kind of statements.

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Originally Posted by Mani_UT

Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

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Often people resist leaving the home where all their memories reside even if it's way too much house for them now. Also, in CA even if they can pay cash for a new, smaller place they are likely looking at a hefty increase in their property tax bill.

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Originally Posted by Dantheman

Often people resist leaving the home where all their memories reside even if it's way too much house for them now. Also, in CA even if they can pay cash for a new, smaller place they are likely looking at a hefty increase in their property tax bill.

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Yeah - that CA tax thing they did has really created all kinds of unintended consequences...

FAFO, they say.

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Originally Posted by I Skied Bandini Mountain

We're a good case of reference. We bought this place in 2012 at the absolute bottom, with a ridiculously low rate. We're now sitting on a mostly empty house with a shit ton of equity and low monthly mortgage payments, but why the hell would we want to sell, and where are we going to go that isn't overpriced to hell and with a 7+% note?

But we're not going to hold out for long, I'm ready to blow this popsicle stand. I'm tired of working on old houses and we're just looking for a place to land once we get my elderly folks situated.

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I am in somewhat the same boat.

House basically paid off, thinking of moving to a little land. However, everything below us in price is a complete shit hole and everything above is 7.5%.

Can't really stomach either.

So I will sit and feel lucky and smug in my foresight to be born at the right time. (Well that and smart enough to have ignored everyone that told me the market was overpriced in 2003- and there were a lot of them).

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Originally Posted by LHutz Esq

I am in somewhat the same boat.

House basically paid off, thinking of moving to a little land. However, everything below us in price is a complete shit hole and everything above is 7.5%.

Can't really stomach either.

So I will sit and feel lucky and smug in my foresight to be born at the right time. (Well that and smart enough to have ignored everyone that told me the market was overpriced in 2003- and there were a lot of them).

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Same same. Still waiting for that medium sized home on a hectare to come on the market, that doesn’t also need $100k in repairs or upgrades.

As soon as I had the down payment and could commit to 5yrs in one location, I bought. Peak market in 2008 (just before the crash), at 5+% in the first term (fixed). No tears then, or now.

Another day of visiting job sites.

Ran into the owners of a project that just launched. Wife was telling me how "crucial" sustainability is to her.

This is a 12K sq ft home with an 8K sq ft gear barn and a couple of guest homes plopped onto 1/2 a section of what was once prime elk habitat and probably the random Grizz.

I should be in the world series of Poker. I nodded sagely and said, "that's good".:rolleyes2

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Originally Posted by Bunion 2020

Another day of visiting job sites.

Ran into the owners of a project that just launched. Wife was telling me how "crucial" sustainability is to her.

This is a 12K sq ft home with an 8K sq ft gear barn and a couple of guest homes plopped onto 1/2 a section of what was once prime elk habitat and probably the random Grizz.

I should be in the world series of Poker. I nodded sagely and said, "that's good".:rolleyes2

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Jfhc. This town is such a clown show. We just got back from vacation a few weeks ago. In the two weeks there I didn't honk at all, five minutes back in this shit hole before I had to honk at some clown. My partner and I remarked on how nice it was to be in a town that seemed like an actual place and not some faux mountain chic simulacra. If we could afford to move we'd be gone.

Well this was 40 miles south of Bozeman, but yeah I hear ya and feel the pain. Still looking for the next chapter as well, I see the light at the end of the tunnel around 18 months away.

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Originally Posted by Mani_UT

Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

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Paying all cash on a home might not be a financially good decision for some people.

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Originally Posted by Bunion 2020

Another day of visiting job sites.

Ran into the owners of a project that just launched. Wife was telling me how "crucial" sustainability is to her.

This is a 12K sq ft home with an 8K sq ft gear barn and a couple of guest homes plopped onto 1/2 a section of what was once prime elk habitat and probably the random Grizz.

I should be in the world series of Poker. I nodded sagely and said, "that's good".:rolleyes2

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Wow. Just wow.

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Originally Posted by BCMtnHound

Same same. Still waiting for that medium sized home on a hectare to come on the market, that doesn’t also need $100k in repairs or upgrades.

As soon as I had the down payment and could commit to 5yrs in one location, I bought. Peak market in 2008 (just before the crash), at 5+% in the first term (fixed). No tears then, or now.

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yeah I don't get to spend money but I get to spend vicariously thru my sons who both bought in the last year a rural and a downtown town house, which couldn't be more different but the money spends the same. So I get to hear about them spending a lot of money on upgrades ( furnaces/ plumbing ) to an older property which is the only way they could get in but they both counted on spending the money

also I been throing a little inheritance their way without actualy dying

conversations start " so hows the money pit ? "

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Originally Posted by Bunion 2020

Another day of visiting job sites.

Ran into the owners of a project that just launched. Wife was telling me how "crucial" sustainability is to her.

This is a 12K sq ft home with an 8K sq ft gear barn and a couple of guest homes plopped onto 1/2 a section of what was once prime elk habitat and probably the random Grizz.

I should be in the world series of Poker. I nodded sagely and said, "that's good".:rolleyes2

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Idk how you do it. Maybe my former years spent in the heavy civil industry has made me a bit cutthroat. I want to punch most of our clients in the face.

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Originally Posted by AdironRider

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

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I agree.

I’ve heard several economists make the same statement, that everyone who was alive during the Great Recession will be scared of the “big one” but it’s highly unlikely that we’ll see such an event in our lifetimes.

Today’s market news from the Fed included the results of a survey they send out quarterly to the managers of lending institutions. Evidently credit is tightening. Similarly qualified applicants will receive smaller credit limits and some applicants will lose they ability to borrow.

Well, that is DEFINITELY an indicator that we are sliding down into a ‘2cnd world’ type of economy. Here in Perú, almost all house purchases are done with cash. More due to the fact that the economy and political situation is very unstable, the fear is that a bank could simply cease one fine day, and more than likely, any economic activity such as a mortgage would be in jeopardy. It has happened before.