Real Estate Crash thread

**liv2ski** · 07-17-2021, 08:35 AM

Originally Posted by Meadow Skipper

That’s a good question.

People just bought the house across the street for $3M. Retired Admiral, now Wallmart big wig. Between income flow and stock options the guy is doing well. On a $2.5M average price in the hood with 40% down, most people with a car payment and maybe some credit card debt still need to gross $24k a month to qualify for the loan, so ya, there are plenty of people making $$$$ out there.

**Kevo** · 07-17-2021, 09:20 AM

I can't imagine wanting to leverage to the tits and buy a $3MM house while grossing $24k per month. Seems insane.

**zion zig zag** · 07-17-2021, 09:24 AM

Originally Posted by Kevo

I can't imagine wanting to leverage to the tits and buy a $3MM house while grossing $24k per month. Seems insane.

Jesús, agreed. My dad, who is obviously old school, always told me to never spend more than 3x income on a house. ^^^That’s more than 10x.

**liv2ski** · 07-17-2021, 09:36 AM

Originally Posted by zion zig zag

Jesús, agreed. My dad, who is obviously old school, always told me to never spend more than 3x income on a house. ^^^That’s more than 10x.

That is what it is these days for people. Fuckin sucks for my/our kids.

**Buster Highmen** · 07-17-2021, 09:44 AM

Originally Posted by skiballs

Who is buying all these houses in Seattle and California?

Anecdotally, there's quite a few double tech income families in the area. With msft, amzn, fb, google and apple employers.
So when the couple is pulling down $300+k a year (+ stock options), that pushes affordability up to and past the $1M mark even at the old 3x rule.

New neighbors sold their house in the Central District last year and paid cash for a $1.5M place. Both work, he's a lead at google.

**Kevo** · 07-17-2021, 09:48 AM

Originally Posted by zion zig zag

Jesús, agreed. My dad, who is obviously old school, always told me to never spend more than 3x income on a house. ^^^That’s more than 10x.

I've also followed the "under the 3x income" rule.

Originally Posted by liv2ski

That is what it is these days for people. Fuckin sucks for my/our kids.

How many loans do you underwrite at those insane DTI levels?

**Benny Profane** · 07-17-2021, 09:59 AM

Boomer churn.

**mfcf13** · 07-17-2021, 11:16 AM

Originally Posted by Benny Profane

Boomer churn.

That feeling you get in your stomach when you just ate some psilocybin.

**liv2ski** · 07-17-2021, 12:35 PM

Originally Posted by Kevo

I've also followed the "under the 3x income" rule.

How many loans do you underwrite at those insane DTI levels?

Over 40% dti? The majority of purchases for sure and the refinances are about 50/50. I remember the days of a 33% front (housing) ratio and 38% total debt dti. Going up to 45% to 50% makes me go WTF?

**The AD** · 07-17-2021, 12:46 PM

Originally Posted by Kevo

I can't imagine wanting to leverage to the tits and buy a $3MM house while grossing $24k per month. Seems insane.

OTOH how many people are buying a house like this as their first home? Odds are they've got lots of equity in their current home.

Although I recently saw a home for sale outside Vancouver for around $1.5mm that actually said "good starter home" in the realtor writeup, so maybe that's where we are these days in some markets...

**liv2ski** · 07-17-2021, 12:49 PM

Originally Posted by The AD

OTOH how many people are buying a house like this as their first home? Odds are they've got lots of equity in their current home.

AD, my example was based on a $1.5M loan amount, so ya, they better have some equity to buy the $3M house.

**The AD** · 07-17-2021, 12:50 PM

Originally Posted by liv2ski

AD, my example was based on a $1.5M loan amount, so ya, they better have some equity to buy the $3M house.

Ah, missed the 40% down bit.

**Kevo** · 07-17-2021, 04:49 PM

Originally Posted by liv2ski

Over 40% dti? The majority of purchases for sure and the refinances are about 50/50. I remember the days of a 33% front (housing) ratio and 38% total debt dti. Going up to 45% to 50% makes me go WTF?

Seems insane, and the government keeps bailing people out who are taking crazy risks.

My housing payment is a single digit percentage of my gross income. I have no other debt.

..something something everyone going faster is crazy, everyone going slower is an idiot.

**Core Shot** · 07-17-2021, 04:58 PM

Originally Posted by Benny Profane

Boomer churn.

Originally Posted by mfcf13

That feeling you get in your stomach when you just ate some psilocybin.

This thread needed some humor

**Ted Striker** · 07-17-2021, 05:05 PM

The Admiral of Walmart borrowed 1.5M and has a take-home of 288k based on his employment (I'm assuming). But his actual net worth could be anything.

The guy who buys a 400k house with anything over 28/36 is the guy who's going to be in trouble.

**MontuckyFried** · 07-17-2021, 05:22 PM

Originally Posted by Name Redacted

People with even more money than the folks cashing out and moving to Boise. I've never really seen the appeal of Boise.

Well much of its appeal USED to be that it was a decent, affordable place to be. Not anymore!

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**Supermoon** · 07-17-2021, 05:30 PM

Originally Posted by MontuckyFried

Well much of its appeal USED to be that it was a decent, affordable place to be. Not anymore!

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Seriously. It has good weather, great access to the outdoors and a nice little downtown scene that’s bikeable. I bought a house there in 2017 for under 3 in one of the nicer neighborhoods in North Boise, and right now there is nothing under 6 or 7 for sale.

**liv2ski** · 07-17-2021, 06:08 PM

Originally Posted by Ted Striker

The Admiral of Walmart borrowed 1.5M and has a take-home of 288k based on his employment (I'm assuming). But his actual net worth could be anything.

Was not quoting what the Admiral/Wallmart dood makes or borrowed, but ya, I think he is fine regardless.

**Benny Profane** · 07-17-2021, 06:39 PM

A military/industrial executive double dipping as a big whoop for China Inc. brick and mortar retail? He's fine.

**Ted Striker** · 07-17-2021, 06:42 PM

Originally Posted by The AD

I recently saw a home for sale outside Vancouver for around $1.5mm that actually said "good starter home" in the realtor writeup, so maybe that's where we are these days in some markets...

They meant for "starting" to launder money.

**AdironRider** · 07-17-2021, 11:07 PM

Originally Posted by liv2ski

Over 40% dti? The majority of purchases for sure and the refinances are about 50/50. I remember the days of a 33% front (housing) ratio and 38% total debt dti. Going up to 45% to 50% makes me go WTF?

Whoa thats not good to look at long term market sustainability.

**Stu Gotz** · 07-18-2021, 08:11 PM

Checking in from glorious Fairfield County, home of the endless thunderstorm.

Nothing is going for above asking, but six houses on our street have sold since December, which is surprising as I figured things would go back to normal once NYC opened back up. I am guessing hybrid WFH has made CT suburbs more attractive? Long-time town residents who will be missed, but good for the town as younger families moving in is always a plus. Can't imagine this will continue much long, though.

**Benny Profane** · 07-19-2021, 05:26 AM

Maybe the fact that almost all student loan borrowers haven't been paying their loans for a long time has jacked the market.

https://finance.yahoo.com/news/almos...190151270.html

**Core Shot** · 07-19-2021, 06:06 AM

Originally Posted by Supermoon

Seriously. It has good weather, great access to the outdoors and a nice little downtown scene that’s bikeable. I bought a house there in 2017 for under 3 in one of the nicer neighborhoods in North Boise, and right now there is nothing under 6 or 7 for sale.

What could be wrong with house prices doubling in four years?