Real Estate Crash thread

[4matic]

Good day to lock a rate.

[californiagrown]

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

My wife has BIG law school loans. in late 2019 she won a case that will allow us to pay off her loans and then some. We havent paid a dime recently because of covid (why would we make payments on a loan that we dont have to instead of investing that money?). And now because she is betting on some sort of student loan forgiveness program from Biden... which is stupid because it would only be like $10k which is a drop in her lawschool loan bucket.

But yeah, i know way too many people who havent paid rent or loan payments in 15 months whose employment/financial situation stayed the same or improved over that time period.

[sirbumpsalot]

My wife has BIG law school loans. in late 2019 she won a case that will allow us to pay off her loans and then some. We havent paid a dime recently because of covid (why would we make payments on a loan that we dont have to instead of investing that money?). And now because she is betting on some sort of student loan forgiveness program from Biden... which is stupid because it would only be like $10k which is a drop in her lawschool loan bucket.

But yeah, i know way too many people who havent paid rent or loan payments in 15 months whose employment/financial situation stayed the same or improved over that time period.

Guy I know around here put his house up for sale july 4th weekend for just under $1.4M and within days got and accepted an offer for $1.65M (20% over), no inspection, all cash, 2 week close, and 5 month free rentback. Open house was PACKED....used to be any open house on a home over $1M in beaverton saw minimal traffic and mostly looky loos and neighbors. Word is he is parleying that into a 35 acre horse farm for $3.5M down the road.

Market is still silly hot around Portland for sure.

[AdironRider]

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

Only 1% currently in repayment? No fucking way.

I'm not saying people aren't doing this, but no way the number of people still making payments is that low. The companies would be insolvent.

[old_newguy]

Only 1% currently in repayment? No fucking way.

I'm not saying people aren't doing this, but no way the number of people still making payments is that low. The companies would be insolvent.

FedLoan isn’t renewing their contract and is going to be transferring something like 9 million loans to another provider at the end of the year.

Your payment amount literally says “$0.00 due” when you go to pay. It’s not something you have to qualify for, it’s the default.

[old_newguy]

Think of it this way. Instead of bailing out various industries and then watching them lay off staff anyways and give themselves big bonuses, you could have forgiven student loan debt and had a permanent impact on the ability of low level consumers in the economy to have more expendable income and injected about the same amount of money into the economy.

(Something, something, something moral hazard, blah blah, not the same when it’s an airline or bank, yardda yardda yardda.)

[AdironRider]

This chart doesn't even add up to 100%

[californiagrown]

Only 1% currently in repayment? No fucking way.

I'm not saying people aren't doing this, but no way the number of people still making payments is that low. The companies would be insolvent.

If you had a loan, and it was common knowledge that you didnt need to make payments on it for a year or more, and no additional interest would accumulate, would you make payments on it? Or would you put that free money to use elsewhere and only start paying off that loan again once interest started accruing on it?

[old_newguy]

If you had a loan, and it was common knowledge that you didnt need to make payments on it for a year or more, and no additional interest would accumulate, would you make payments on it? Or would you put that free money to use elsewhere and only start paying off that loan again once interest started accruing on it?

Many, many people are on the 20, 25, or PSLF “I’m paying the minimum and taking forgiveness” plan, which is a huge incentive to paying nothing for a year+ since the entire goal is to pay as little as possible.

(Not always the best financial plan, but I think it’s a common strategy)

[old_newguy]

If you had a loan, and it was common knowledge that you didnt need to make payments on it for a year or more, and no additional interest would accumulate, would you make payments on it? Or would you put that free money to use elsewhere and only start paying off that loan again once interest started accruing on it?

FedLoan hasn’t sent out a bill since March 2020 as far as I can tell. Do you send money to people who don’t send you bills?

[AdironRider]

Like I said, I believe many people chose to do this, but surely more than .8% would be continuing to pay, for I can think of at least a few reasons:

1) They are gainfully employed the whole time and don't want to carry debt loads for longer. This affects DTI levels for say homebuyers as just one example.

2) Ethically they feel its the right thing to do.

3) Stupidity. People put shit on autopayment and just let that shit ride. Maybe 50% of the country cares about news at all, and they just plain don't know they could have done it.

4) That number is just unbelievably small. .8% and these places would not be in business any more. PPP loans aren't keeping the lights on with that low of a recovery rate.

[pepperdawg]

Like I said, I believe many people chose to do this, but surely more than .8% would be continuing to pay, for I can think of at least a few reasons:

1) They are gainfully employed the whole time and don't want to carry debt loads for longer. This affects DTI levels for say homebuyers as just one example.

2) Ethically they feel its the right thing to do.

3) Stupidity. People put shit on autopayment and just let that shit ride. Maybe 50% of the country cares about news at all, and they just plain don't know they could have done it.

4) That number is just unbelievably small. .8% and these places would not be in business any more. PPP loans aren't keeping the lights on with that low of a recovery rate.

Gotta agree....

[old_newguy]

I’m pretty sure federal loan servicers are paid a fixed rate to service each loan, which they are still getting. They just collect the principal and interest and pass it through.

So it’s the Treasury that is taking the hit on collecting interest.

I think it’s interesting that the same people who typically argue the borrowers are financially clueless morons are now arguing these same people are super smart, financially responsible individuals who would rather make a payment on a loan they don’t need to make than buy some consumer item they have been unable to deal with or pay off a credit card or some other consumer debt.

[Stu Gotz]

It makes me nervous once the “pulling equity out of x to buy y” stories start to crop up with regularity.

https://www.msn.com/en-us/money/real...cid=uxbndlbing

[Core Shot]

It makes me nervous once the “pulling equity out of x to buy y” stories start to crop up with regularity.

https://www.msn.com/en-us/money/real...cid=uxbndlbing

Holy fuck

Must read article.
I would pull quotes but there’s so much in there.

This shit is insane on many levels.

Boise is fucked. As are many places post covid
RIP

[Kevo]

On the subject of remote work- my GF's company has a model where non-junior employees can remain perma remote if they choose. She's staying perma remote.

One of the colleagues she works closest with lives in a major city and has recently started going back to his office. He's been pushing for more in person time with coworkers and clients. He wasn't feeling good last week. Turns out he has Covid and spread it to multiple other people in the office. No idea of his vaccination status.

Seems like there is a pretty damn good chance for similar things to play out for other employers with a hard line date for returning to the office this fall. I'd bet on a combination of more companies going to vaccine requirements as a condition of employment and/or companies to start walking back the *get back to the office or else" dates. This fall is going to be a shit show.

[TAFKALVS]

Holy fuck

Must read article.
I would pull quotes but there’s so much in there.

This shit is insane on many levels.

Boise is fucked. As are many places post covid
RIP

That article sums up the entire mountain west right now. North Idaho is no different. The cost of housing is so out of line with wages that its really starting to not make sense. There can't be that many remote workers. I'm beginning to wonder if its just a big game of "investors" like in this article selling to other "investors".

[old_newguy]

On the subject of remote work- my GF's company has a model where non-junior employees can remain perma remote if they choose. She's staying perma remote.

One of the colleagues she works closest with lives in a major city and has recently started going back to his office. He's been pushing for more in person time with coworkers and clients. He wasn't feeling good last week. Turns out he has Covid and spread it to multiple other people in the office. No idea of his vaccination status.

Seems like there is a pretty damn good chance for similar things to play out for other employers with a hard line date for returning to the office this fall. I'd bet on a combination of more companies going to vaccine requirements as a condition of employment and/or companies to start walking back the *get back to the office or else" dates. This fall is going to be a shit show.

Just happened in my federal office. No clue if it spread though.

That they aren’t requiring vaccinations in federal offices is fucking crazy.

[liv2ski]

But, but, what about our Freedomz?

[jono]

That article sums up the entire mountain west right now. North Idaho is no different. The cost of housing is so out of line with wages that its really starting to not make sense. There can't be that many remote workers. I'm beginning to wonder if its just a big game of "investors" like in this article selling to other "investors".

+1. I was hoping for something insightful but that article actually reads like old news. I guess if you're interested at all you probably already know the score. It's pretty messed up that it's this depressing even to homeowners.

[summit]

That's too generous.

The current labor market would suggest that there are a lot of business which aren’t all that interested in paying people enough to work...

Too generous the other way too....

Businesses don't seem to need or be able to afford labor at the rates that would draw sufficient unemployed labor back to work.

Labor seems to not need work enough to be enticed to return to work at prevailing wages... why is that?

[jono]

Labor seems to not need work enough to be enticed to return to work at prevailing wages... why is that?

I can't speak for anyone else, but personally I find that my need to see dollar balances go up has declined pretty dramatically as money has become meaningless. Once you realize that the more you get the more they've already given to the uber-rich a lot of long term goals lose some of their value.

[sirbumpsalot]

+1. I was hoping for something insightful but that article actually reads like old news. I guess if you're interested at all you probably already know the score. It's pretty messed up that it's this depressing even to homeowners.

I shrug...this is the 4th real estate cycle I've been thru and the same lines are being used as before on both sides.

[old_newguy]

Too generous the other way too....

Businesses don't seem to need or be able to afford labor at the rates that would draw sufficient unemployed labor back to work.

Labor seems to not need work enough to be enticed to return to work at prevailing wages... why is that?

There is some speculation that a lot of these people switched into other lines of work, especially in the restaurant and service industry.

[Kevo]

Does anyone here actually know someone who isn't working who was before?

The labor shortage here in Teton Valley is absolutely insane, but I don't actually know anyone who is sitting on the sidelines not working. Seems more like the housing shortage is driving the labor shortage.