Real Estate Crash thread

[Toadman]

Bond yield at 3.37% on the 10 year note. Fed eyeing a 75 basis points hike. Next cats and dogs will have to cohabitate because housing is so damn expensive. Mass hysteria!

https://www.cnbc.com/2022/06/13/fed-...this-week.html

[snapt]

Stat came from the county in a meeting the other day. Seems far fetched to me too but chatting with some outfitters who use the Cobblestone and TVR, they’ve dropped their prices due to decreased demand.

[mattig]

No bids in size in MBS land. By all accounts mortgage lending is freezing up in the short-term.

The money is there. The pricing and the demand are not. I would rather say the entire bond market went bid-wanted today than suggest there's some mortgage-specific credit availability issue.

(Sorry for the lack of multi quote here. Not trying to post pad, just didn't expect 3 things to reply to!)

[XXX-er]

https://www.cbc.ca/news/business/hom...rvey-1.6487137

one in four canadians will have to sell if rates go up any more, 18 % already can't afford their homes and the rates are expected to rise

[Mustonen]

https://www.cbc.ca/news/business/hom...rvey-1.6487137

one in four canadians will have to sell if rates go up any more, 18 % already can't afford their homes and the rates are expected to rise

Why?

Do Canadians all have variable rate mortgages? I don’t get it.

Or do they just not understand the question?

[J. Barron DeJong]

Why?

Do Canadians all have variable rate mortgages? I don’t get it.

Or do they just not understand the question?

In Canada, I believe, the mortgages aren’t fixed for the mortgage duration like in the US.

In the US if you get a 30 year mortgage @ 3.5%, then that’s your rate for the next 30 year, unless you pay it off/refinance early.

In Canada, a 30 year mortgage is on that is amortized over that time period, but the mortgage only lasts for 5 years typically and then gets renewed at current rates. There’s also a prepayment penalty. So mortgages are always coming up for renewal at market rates, even if the homeowner isn’t moving/selling.

[babybear]

Stat came from the county in a meeting the other day. Seems far fetched to me too but chatting with some outfitters who use the Cobblestone and TVR, they’ve dropped their prices due to decreased demand.

That may be because the airport is still closed. Town is quiet and I have to say I like it.
My husband’s wildlife tour schedule has been more quiet vs last year, but not down 75%

[Mustonen]

20 seconds of googling confirmed that. Thanks!

[yeahman]

In Canada, I believe, the mortgages aren’t fixed for the mortgage duration like in the US.

In the US if you get a 30 year mortgage @ 3.5%, then that’s your rate for the next 30 year, unless you pay it off/refinance early.

In Canada, a 30 year mortgage is on that is amortized over that time period, but the mortgage only lasts for 5 years typically and then gets renewed at current rates. There’s also a prepayment penalty. So mortgages are always coming up for renewal at market rates, even if the homeowner isn’t moving/selling.

Wow that's crazy. I knew there was a reason I'm glad I don't live in Canada.

[J. Barron DeJong]

Wow that's crazy. I knew there was a reason I'm glad I don't live in Canada.

The US style mortgages only exist because of government policy. Fannie/Freddie, FHA, etc. we’re created to enable these loans to exist, since the banks/markets wouldn’t take on that type of long term risk. For better or for worse, it’s a subsidy for homeowners from the government.

Pages 5-6 here have a bit of a historical summary:
https://repository.upenn.edu/cgi/vie...penniur_papers

[rideit]

That may be because the airport is still closed. Town is quiet and I have to say I like it.
My husband’s wildlife tour schedule has been more quiet vs last year, but not down 75%

Demand in GTNP is gonna go absolutely berserk.
https://www.cnn.com/travel/article/y...ing/index.html

[up an down]

Demand in GTNP is gonna go absolutely berserk.
https://www.cnn.com/travel/article/y...ing/index.html

Demand may take a hit when the Super volcano under the park explodes

[babybear]

Demand in GTNP is gonna go absolutely berserk.
https://www.cnn.com/travel/article/y...ing/index.html

He seems to think that most of the damage is not in the areas most of his guests want to go- ie Old Faithful, but certainly remains to be seen
But more GTNP tours is preferable to him anyhow. A nice 5-7 hour day rather than 12-14 hour Yellowstone days

[Woolly the Mammoth]

He seems to think that most of the damage is not in the areas most of his guests want to go- ie Old Faithful, but certainly remains to be seen
But more GTNP tours is preferable to him anyhow. A nice 5-7 hour day rather than 12-14 hour Yellowstone days

I figure they'll reopen the West, South and East Entrances within the next few days. The North Entrance (and possibly the Northeast Entrance) probably won't open again this year.

[fastfred]

Hotel bookings are down 75% so far this summer in the valley, guessing STR mirrors that.

that doesn't make sense
lucky for me breckenridge is over booked july and august can't keep the tourists away

collectively everyone is holding their breath right now waiting for the shoe to drop and the lights to turn off
kinda weird to be getting that panic fear from just about everyone in the construction trades right now
lead times from products are getting shorter every week now

[snapt]

That may be because the airport is still closed. Town is quiet and I have to say I like it.
My husband’s wildlife tour schedule has been more quiet vs last year, but not down 75%

TV is slammed right now and we’re attributing it to the air traffic coming in here and heading over the hill.

[ötzi]

It's kinda weird out. This place has a big seasonal influx of people usually, and none of them are here now. It's super quiet here, almost eerie.

[XXX-er]

In Canada, I believe, the mortgages aren’t fixed for the mortgage duration like in the US.

In the US if you get a 30 year mortgage @ 3.5%, then that’s your rate for the next 30 year, unless you pay it off/refinance early.

In Canada, a 30 year mortgage is on that is amortized over that time period, but the mortgage only lasts for 5 years typically and then gets renewed at current rates. There’s also a prepayment penalty. So mortgages are always coming up for renewal at market rates, even if the homeowner isn’t moving/selling.

It could even be longer than a 5 year rate but then for the longer term mortgages you pay a higher % to guarrantee you payments for longer, mostly people have been doing the variable rate cuz it is SO much lower but instead of spending less/paying the mortgage off fast people have been buying houses they won't be able to afford when the cheap rates end and la-la-la-ing because

rates stay low forever and RE goes up forever eh ?


in any case i don't know the words to the la-la-la so i am considering buying more RE at the bottom

edit: but probably not

but the point of the whole post is that a lot of people are fucked

[Cono Este]

I have a GF who is a realtor in the Palo Alto, Ca area. She’s been selling a few hundred mm a yr.

She said the “credit card” buyers are gone. Crypto and tech workers who were borrowing against stock to pay 6,7,8 mil for a 2000 sq foot house. . Same with the floating rate buyers. Now up the creek without a paddle.



Sent from my iPhone using TGR Forums

[mattig]

Rates up big again today. Now 6.28 (plenty of 6.375-6.500 quotes out there, but lower rates available with upfront costs).

[doebedoe]

Fucking hell...hurts. We're finally closing on our HELOC today and going to get fucked by these new rates. Effectively dropped our budget by 70K in the last week alone. That's one way to crush home appreciation and sales.

[XXX-er]

so on a heloc you pay the going % rate on the new money you want to borrow or does it float? I'm pretty sure the new rates are cuz of inflation, not god punishing you

[doebedoe]

so on a heloc you pay the going % rate on the new money you want to borrow or does it float? I'm pretty sure its cuz of inflation, not god punishing you

There are lots of variations on the HELOC loans. We close today with an initial disbursement at 4% (promo we got when we applied), no closing costs if we take out 5k (which we can pay back without penalty anytime). Future disbursements are fixed rate on the day we get the disbursement.

[Kevo]

This report is pretty crazy- https://www.blackknightinc.com/black...gage-monitor/?

As of April, the monthly principal and interest (P&I) payment on the average-priced home with 20% down is nearly $600 (+44%) more than it was at the start of the year and $865 (+79%) more than before the pandemic. The April number was based on a 5.25% APR 30Y.

At 6.28% APR 30Y with 20% down today means the average home payment has jumped a further $201 since April, $800 since the beginning of the year (a 59% increase in 5.5 months) and $1066 (a 97% increase)since before the pandemic.

Average monthly payment of homes sold in the US at beginning of pandemic was $1098

Average monthly payment of homes sold in US start of 2022 was $1364

Average monthly payment of homes sold in US in April 2022 was $1964

Average monthly payment of homes sold in the US today is $2165

Between high P+I payments, inflation, higher property taxes and higher insurance premiums something has to break, right?

[ötzi]