Real Estate Crash thread

[Bunion 2020]

I sure hope so, the past 3 years has been nuts. Time to shake out the shitty builders and get back to sanity.

[Shredhead]

Of course building is slowing down.

We just finished a project, that cost 3x projected and took 3 times as long.

[fastfred]

Yeah yeah.
Still booming waiting for the stock market to tank then it's game over

Raised my rates again at the beginning of the year

As far as a down turn getting rid of shitty builders it only opens the door to more shitty builders the good guys just throw in the towel cause customers are looking for a bargain

Ride it hard till there is nothing left to milk

Selling out high (priced right is the answer) holding cash buy in the dip somewhere less desirable

Scummit is always the last place to get kicked in the nuts you see it coming this will be my 3rd and final downturn can't wait till then cash in

[Harry]

It will be wild if I can buy back my Big Sky place for half of what I sold it for. Lulz.

[liv2ski]

It will be wild if I can buy back my Big Sky place for half of what I sold it for. Lulz.

While I agree that would be fantastic, if that happens this country is in for a world of hurt. So really, not sure how I feel about it. It would be great though if my youngest could finally afford to buy in San Diego. But she might not have a job anymore as happened to her during covid.

Sent from my moto g stylus 5G (2022) using Tapatalk

[Whiteroom_Guardian]

Yeah if that happens we are all fucked. Harry's old place would need to lose about 75% of it's current value for that to happen.

[Shredhead]

Everyone thinks they would buy the dip. Few actually do.

[BCMtnHound]

Everyone thinks they would buy the dip. Few actually do.

This is only true for your primary residence, right? Investment property shouldn’t follow that trend, unless I am missing something.

[Name Redacted]

Someday, when our generation just sells all of our homes off to our corporate/government overlords and we become a nation of renters, with no equity, no tax advantages, no ownership rights, etc. We will then be relegated to our penultimate destination in the proletariat class. Sounds pretty comfortable right? Just pay your monthly rent to the government and they leave you alone for the month. Maybe you'll get a skuzzy hot tub and gym in the deal... "They may take our money, but they will never take our Freedumbs!!!" Oh fuck, there's a knock at the door. They are coming to take me away!! Haha. Hoho!

[J. Barron DeJong]

This is only true for your primary residence, right? Investment property shouldn’t follow that trend, unless I am missing something.

We managed to buy a primary residence at the very bottom of the housing crash. Much easier when it's your first home.

[XXX-er]

I bought the dip and missed a stock market crash bystaying in cash it was easy cuz i wasnt paying attention

[dan_pdx]

Everyone thinks they would buy the dip. Few actually do.

When the stock market tanked in 2008, I went all in with every bit of cash I could lay hands on...which came out to about $6k. If I'd had $100k, I'd be retired right now.

[summit]

Talked to an agent about a motivated seller with a studio that I could lever my place to buy. Fuck... did math, hoa, taxes, insurance... cashflowing it requires it gross well over 3k/mo... on a studio.

Is it crazy math to rationalize trying to gross amortized interest + x% of principal + all other costs? That might be achievable, even LTR.

[SKIP IN7RO]

I heard RE in Vail area is wonky atm. $3000 for a studio is crazy money unless it's in Aspen/Jackson.

[summit]

Nah this is in Summit. Near a base area (walkable) but not in it. It has amenities but jeez.

[Foggy_Goggles]

Walk to lifts? That's the definition of High Cost of Living. I would expect that to seem really expensive.

I'm not sure what that last sentence means. In the first years of a mortgage the am is almost all interest. And real cash flow is usually more like monthly expenses + 15% to account for vacancy and maintenance/unexpected costs.

Doubling down on mountain real estate with objectively high prices, political/economic uncertainty and somewhat high interest rates seems crazy talk. Your downside risk is extreme. If the rental stops cashflowing, you are a little fucked. Your home equity is already committed. Most likely, you are either underwater or negative equity on the rental so selling would be painful. And you gotta keep it all rolling so you have a roof over your head.

Generally speaking, that is How Not to Be a Landlord 101. Primary Residence as Collateral, No Geographic Diversification, Minimal Sweat Equity Opportunity due to HOA/Condo and so on. And the financing mechanism is questionable from an underwriting perspective.

In order to get the foot of your neck you either need prices to go up further or cashflow relief from a refi. And over there in the Peoples Republic of Summit County, just expect that your competition is the government. The price to build and carrying cost of all this subsidized housing is insane. If rents or prices trend down, the taxpayers and rental/sales market will get crushed. Go look back at transactions of deed restricted units in 08 and extrapolate that out to now.

If you have money burning a hole in your pocket (which it sounds like you don't) and you want to be a landlord, look at low cost of living areas with strong rental demand. Think College and Company Towns.

[Name Redacted]

Yeah, what Foggy said. HOAs are crazy high due to insurance costs skyrocketing. Interest rates are high. RE prices are still inflated. Just not a good time to buy and be a landlord. Unless you can pay cash for a unit w/ a reasonable HOA, like Dillon Valley and be a slumlord. That might slightly be more viable. I expect sales to jump this spring, more inventory, more opportunities, maybe prices will go down a little, maybe interest rates will go down a little. But the economy is also looking unstable, which can affect things up here to a degree, usually less than other places though. I'm planning on waiting this out and stockpiling savings for a better time to buy.

[fastfred]

I looked into long term renting my house and taking out heloc for 400k to buy a sxs party my brains out and maybe have some money left over to buy a house in a LCOL area

I'd actually break even with like 200 bucks a month extra but that 400k would be 2,500 a month payment nope just going to sell out instead


as foggy said the peoples republic of summit breckenridge is busy price fixing rentals


now the town wants to spend 50 million on a new housing development for what I don't get it anymore affordable housing was understandable but now they can't help themselves

[fastfred]

summit I wouldn't do it unless you are paying pre 2015 pricesmotivated seller means all kinds of bullshit in realtor speakyour aim is pre 2015

[summit]

Thanks for confirming my apprehension and aversion folks. Even in 2022 before interest rates went up up I looked at "how do I lever the house to buy a 2br/1ba, move out of my house, and rent my house?" And the numbers never added up to where it looked worth it in terms of the profit vs tradeoff. The pseudo-curse (in terms of a default move is no action) of a <3% mortgage with a lot of equity in the current price/cost/interest/political environment, as was pointed out.

[californiagrown]

Thanks for confirming my apprehension and aversion folks. Even in 2022 before interest rates went up up I looked at &quot;how do I lever the house to buy a 2br/1ba, move out of my house, and rent my house?&quot; And the numbers never added up to where it looked worth it in terms of the profit vs tradeoff. The pseudo-curse (in terms of a default move is no action) of a <3% mortgage with a lot of equity in the current price/cost/interest/political environment, as was pointed out.

Have you thought about renting your place out, and then renting that 2bd/1ba? Its one less house to worry about shit going wrong, and your cost of living is fixed each year no matter what appliance or part of the house breaks. Youd still be gaining equity from your tenant paying your mortgage, and you would have the freedumb to move to a different town as you see fit instead of being locked into an area you can afford but dont love.

[summit]

A good point... Well I didn't make the move for the 2/1 when rates were 4%. I just have 1 property, m house. I'd have to see what I could lever into now, a ski country studio or 1/1 yes. 2/1 maybe. And I still do love it here as much as I fantasize about year round biking and fewer crowds.

[californiagrown]

^^^ again, the nice thing about renting is you can always move back into your house, or move towns/states/countrys if you dont like your living situation after a year. There is a ton of flexibility to being a renter, vs buying somewhere and being locked in. It would allow you to continue to save money/build equity in your current home, while you wait for more favorable conditions to buy that second home too. The only real downside is moving is a PITA, and the possible opportunity cost of not buying... which you don&#39;t seem to think will be profitable at this time anyways.

[summit]

Ah I understand your point much better now. Thank you for explaining. It is a good argument.

Moving is hard. Finding a rental is hard around here. I could probably do it. Having a pet makes it harder. Maybe if the lady wants to move in somewhere, otherwise I have little free time.

[fastfred]

leveraging your home to buy another place even if the numbers look good on paper

just sounds like a bad idea my head in the sand advice is to have little to no debt in the coming year or two

1 mortgage thats it as easy as it seems to want to take all that equity sitting there and do something big with it


I just remember 2001 and 2008 too well