Real Estate Crash thread

[oldnew_guy]

I'm not very educated on RE investing, how/who does higher interest help?

There are a few people on here who sold out anticipating a market drop within a few years, so if they are sitting on a pile of cash they might be positioned well to take advantage of high interest rates driving up monthly payments and driving down prices.

I tend to think that we will continue to have the issue of not enough housing stock for at least awhile. I was repeatedly told when we were looking that people were not selling because they couldn’t buy due to low inventory, which is a feedback loop. So in theory should see higher rates drive out some buyers, relaxing competition. How long does that take though?

Seems like it is going to take some other things to bring it down as well, probably job losses in sectors paying enough for people to afford houses.

[XXX-er]

Its a two way street though. I am a first time landlord and have some tenants that i would love to keep on for another year (or, frankly, indefinitely) at the exact same monthly rent. And ive told them my plan. I just want enough to cover my payment, and a little extra to fix/replace things as needed (which i think i have been great at). Im not trying to make money off it (other than the equity). the tenants, have told me that they arent sure if they will be renewing and are looking around but to not sign up new tenants yet. I remember doing this exact same thing to my landlords where i wouldnt provide THEM stability and control, and so they didnt feel obligated to reciprocate. I tried to break that cycle and make these folks long term renters, and they are waffling.

With the housing situ If my 9+ yr tennant moved out I would just jack the rent up and still have another tennant real quick,

I would kind of miss having a gardener, my gladiolas were 5' high

IME a welfare mom who has had some bad luck is not so bad cuz they get a check every month, rent is due on the 21st which is a wierddate but thats when the check comes so you wana get the $$$ real fast

[Timberridge]

lowers the price of houses

cheap money means higher priced houses
expensive money means lower cost houses

do the math on 3% interest vs 6% interest on a 500k house the difference in long term cost is crazy

and yeah raise the fucking interest rates raise them 1% stop protecting the economy these dumb fuck economists pretend to know what they are taking about but they don't have a fucking clue at the end of the day all the money people are plotting out their list of what they will need from the gov't when the shit hits the fan

single mom with some kids on government welfare is bad cause she made poor life decisions
big corporation gambling with money they don't really have and making risky financial decisions who then need a a bail out from the government is good

it's all about protecting the companies in over their ears with too much debt keep the housing bubble from bursting and making sure the boomers suck the country dry so they can live their best life

As demonstrated here, oddly enough on the alpine slide at Breckenridge, there's a few ways the housing market tends to cool off.

[Mazderati]

Yeah, in theory at least, home prices and interest rates should be inversely related but there are caveats. Not the least of which is somewhere between 29 and 40% of buyers paid cash the last few years depending on where you look.

[CarlMega]

Maybe I’m an asshole, but not once have I thought about my coworkers work load. That’s just a management trick to try to get you to feel bad.

Same as the whole “2 week” notice bullshit from employers who wouldn’t hesitate to lay you off without notice. Only reason from my side is to not burn future bridges.

Companies seem to want employees to be replaceable widgets (IE - commodities), but get weird when the widget chases higher pay?

^This is where I'm at. Without getting into a long backstory, the company who writes my checks has been getting increasingly shitty over the last X years. Devolved into a substandard work experience with zero Fs given to the employees. The head muckety mucks have been talking about how great the company is doing - revenue etc... really building it up. But yearly salary bumps across the board at not close to reasonable given cost of living increases. So, there's a demotivated workforce. For me, this is a bridge too far. Taking my time and going accelerating my early retirement plans (or just take a new gig after some time off)...with my zero Fs about them.

Maybe it was here but someone wrote that basically all that exists is a contract between employee and employer for the terms til the next pay cycle (eg; 2 weeks). And that expectations beyond that are antiquated and mostly a psychological ploy that creates a burden on the employee re: retention, etc. Most large corps do not hold themselves to the standards that the employees place upon themselves.

[summit]

Thanks folks!

29 and 40% of buyers paid cash the last few years

That is just wild to me and definitely speaks to who is able to buy and why potential buyers are so frustrated.

[TAFKALVS]

Thanks folks!



That is just wild to me and definitely speaks to who is able to buy and why potential buyers are so frustrated.

"Cash " isn't always cash though. Its only that the purchase was made with cash, not where the cash came from. Could be heloc, could be credit line on an (inflated) stock portfolio, could be from a PPP "loan", maybe even one of the alternative funding companies.

So I think if the rates go up, there will be less "cash" buying too.

[mcphee]

https://www.realtor.com/news/trends/...-s-homebuyers/
We’re number 1, we’re number 1, we’re number 1….! Peoria gets a ton of shit (for good and not so good reasons), but it’s in a beautiful area of the state, lots of outdoorsy shit to do (I have 20 miles of hiking trails out my front door, there’s 8 mountain bike trail systems, boating, kayaking, fishing, hunting, etc…), it’s cheap with a wide variety of home styles-historical brick/stone mansions to today’s McMansions and everything in between. You can make good money here with caterpillar, rivian, three hospitals, and a busy construction industry. I know this falls on deaf ears with this crowd, but I know ya’ll know a ton of people where you live who don’t utilize the area in which they live for various reasons and they probably bitch and complain about cost of living. My wife is a dirt pimp and has gotten clients from LA and Denver cold calling to make the move. Pass this along and send us your mediocre citizens! Lol

[Mazderati]

"Cash " isn't always cash though. Its only that the purchase was made with cash, not where the cash came from. Could be heloc, could be credit line on an (inflated) stock portfolio, could be from a PPP "loan", maybe even one of the alternative funding companies.

I think this could go the other way or at least moderate the credit-derived cash buyer departures. Interest rates have been so low even buyers who could pay cash might have taken loans and invested/hoarded/whatevered that money elsewhere.

[TAFKALVS]

Overall, just way too much cheap debt sloshing around. Increasing amounts of money chasing decreasing amounts goods and services.

[Brock Landers]

Mortgage rates could still go up another ~1% and we’re right where we were 4 years ago. Which was, generally, a “crazy” housing market.

The direction of rates has just as big an impact on the market and pricing, as the rate itself. Do I think rates coming up is ok for the housing market? Yeah it’s good long term. Do I think bumping them 1% in a week is healthy for everyone? No.

[Toadman]

I think this could go the other way or at least moderate the credit-derived cash buyer departures. Interest rates have been so low even buyers who could pay cash might have taken loans and invested/hoarded/whatevered that money elsewhere.

This is what most FP's advocate. Why tie up a big chunk of your cash in a house when a mortgage at 3% allows you to put that cash to work and make 16%+ in the markets. (Or at least that's the advice that was being doled out the past 5 years. Now? Who knows.

[fastfred]

Overall, just way too much cheap debt sloshing around. Increasing amounts of money chasing decreasing amounts goods and services.

This is the problem or what is causing the problem

[Timberridge]

Overall, just way too much cheap debt sloshing around. Increasing amounts of money chasing decreasing amounts goods and services.

Back in the old days they just called it inflation.

[Ted Striker]

A decreasing trend in mortgage rates generally correlates (and generally causes) a rise in housing prices, but the inverse isn't anywhere near as cut and dried.



Spec builders generally borrow the money. So even if the price line goes flat today, tomorrow's inventory shortage is already in the making. And during inflationary periods, the increased cost of materials will be baked into the price.

The market is currently supported by demographics



When half of the 25-34 group buys a house, things might settle.
And/or a return to the office takes the steam out of the market.

The ridiculous amount of cash in RE is at least partially due to short term rates being net negative. If/when a more attractive vehicle for that money to exit into exists, the RE market normalizes (maybe... somewhat...)

[The AD]

https://www.realtor.com/news/trends/...-s-homebuyers/
We’re number 1, we’re number 1, we’re number 1….!

Median list price under $100k right now is pretty amazing.

[muted reborn]

https://www.realtor.com/news/trends/...-s-homebuyers/
We’re number 1, we’re number 1, we’re number 1….!

Picture makes me want to move there and put my bike against this tree.

[4matic]

I could live in Midwest in a few years. Join a nice golf club. Live like king.

[dunfree]

I could live in Midwest in a few years. Join a nice golf club. Live like king.

lol

[Skistack]

Terre Haute - the armpit of the Midwest.


Sent from my iPhone using TGR Forums

[4matic]

lol

Old school golf. Which I love.

https://youtu.be/GnBm9U7eyD8

https://www.meridianhillscc.org

[mcphee]

Picture makes me want to move there and put my bike against this tree.

LUlz

[4matic]

Terre Haute - the armpit of the Midwest.


Sent from my iPhone using TGR Forums

Had a girlfriend at St Mary’s of the Woods. It was like that scene in animal house where you would wait in the reception area for your date.

https://youtu.be/asnzmpORTE8

[BobMc]

https://www.realtor.com/news/trends/...-s-homebuyers/
We’re number 1, we’re number 1, we’re number 1….! Peoria gets a ton of shit (for good and not so good reasons), but it’s in a beautiful area of the state, lots of outdoorsy shit to do (I have 20 miles of hiking trails out my front door, there’s 8 mountain bike trail systems, boating, kayaking, fishing, hunting, etc…), it’s cheap with a wide variety of home styles-historical brick/stone mansions to today’s McMansions and everything in between. You can make good money here with caterpillar, rivian, three hospitals, and a busy construction industry. I know this falls on deaf ears with this crowd, but I know ya’ll know a ton of people where you live who don’t utilize the area in which they live for various reasons and they probably bitch and complain about cost of living. My wife is a dirt pimp and has gotten clients from LA and Denver cold calling to make the move. Pass this along and send us your mediocre citizens! Lol

My wife grew up in Dunlap, pretty much her entire family worked at Caterpillar. Her Dad worked there from age 20 till he retired. My first visit to the area was my 30th birthday to ask her father for her hand in marriage. Still remember going to Avanti’s to celebrate.

Pretty nice area for those kind of prices.

[mcphee]

I could live in Midwest in a few years. Join a nice golf club. Live like king.

https://www.realtor.com/realestatean...il/M7129577081

I got you. Peoria Country Club’s got a nice course