Real Estate Crash thread

[Ted Striker]

Hey, it could be just straight up money laundering.

Vancouver has entered the chat

[neckdeep]

Product of not enough supply for the demand but also maybe a product of the type of people who are attracted to living in Jackson… willing to live in the “best” ski town to ski the “best” ski area at a wildly inflated cost.

It’s really weird to me to rationalize a $4000 a month rent for a tiny non-conforming bedroom with a shared bathroom just to have the privilege of skiing at Jackson Hole. I can think of a lot of places that aren’t as rad as Jackson but are pretty good skiing and you could rent or even buy a damn nice house for $4000 a month.

Must be people who really hate driving the Pass or maybe it's just the prestige factor of Wilson. There's 3 bedroom condos at $2300-3000 on the other side.

Probably TGR interns.

[snowaddict91]

If *I* was in this situation, I'd probably head for Taos and then PRAY to the almighty FSM that it snowed.

Fair enough. I've spent enough of my life in the San Juans and CB that I'd go somewhere that it was actually likely to snow [emoji23]

But here I am, working remote and living in the desert, so what do I know?

[skaredshtles]

<snip> I'd go somewhere that it was actually likely to snow [emoji23]

Yeah - but those places are already way too crowded.

[goldenboy]

It’s not like there are any vacancies anywhere for much less, even in Teton Valley or Hoback. Possibly in Alpine?
(Especially if you haven’t lived here forever, that changes opportunities a little, but not by much).

My buddy that works for Poma had to find housing for himself and his crew and it sounded like it was the biggest crux of the entire Snow King project. Even last summer building the new lift in Aspen was nothing in comparison.

[muted reborn]

All I’m saying is I was a remote worker wanting to spend $4k a month on bedroom - and it’s all about the skiing I’d be eyeballing somewhere in Europe or maybe somewhere interior BC, not Jackson.

We all get understand what you and I would do. I'm trying to tell you it's presumptuous to think all remote workers even want to ski. A stereotypical one works 60 hours for Facebook and then enjoy their weekends in a beautiful location. Rent is affordable for them at $4k. You say you are in a remote workplace, you gotta understand how it works in big tech, right? Fucking never ending zoom calls back to back for some of these guys, then at 5pm they finally get their work done. Sounds like some never saw the place before signing the fake lease and got screwed though.

I'd hope these workers all would like to ski, snowshoe or something outside though as that's one fucking cold town to live in. Summer seems more doable. Or maybe they are clueless dirtbags but it's doubtful.

[evdog]

How long do you suppose these houses need to sit empty? What is the downside to renting them out in the interim while they are appreciating offmarket?

What is keeping me from buying 2 mins down the road in the next neighborhood where supply and prices are normal and the standard of living is nearly exactly the same?


If you have a safeway and albertsons right next to each other, it would be real stupid for the safeway to intentionally reduce inventory and jack up prices because people will just go next door to albertsons. It only makes sense if both safeway and albertsons do it, or if albertsons is 20 miles away so people are forced to putup with high prices and shit inventory (AKA a monopoly). So, what you are saying only works if there is a monopoly in place.

I've never heard of institutional investors buying up inventory and purposefully keeping it vacant. Doesn't make sense to me either. What I so see happening is institutional investors buying up inventory, maybe do some "renovations", call them "luxury rentals" and then jack up rents as high as possible. They don't seem to need to withhold inventory to accomplish that. We are already short on inventory here. What they are doing is taking away from homes available for sale which also drives up prices in the for-sale market.

I have seen private investors hold vacant properties. Mid 2000s I worked for a company in Vancouver that built high rise condos. We would have buyers from China come in and buy entire floors of condos in new buildings. Other developers saw this as well. These buyers wouldn't live in them, and wouldn't rent them out. They just wanted to get money out of China and the property values were appreciating so fast they DGAF about rental income. That is not a typical issue for most cities however and BC has tried to deal with it by implementing taxes on vacant units and foreign ownership.

[AdironRider]

There are a couple of myths about Jackson. One, that everyone is rich, and two, that everyone skis. It’s not true, far more people don’t ski here than do, in my observations.
As far as a guide ‘expecting’ a luxury rental, well, it’s more a matter of ANY rental, TBH.
It’s not like there are any vacancies anywhere for much less, even in Teton Valley or Hoback. Possibly in Alpine?
(Especially if you haven’t lived here forever, that changes opportunities a little, but not by much).

I agree with the above, but I will say the door slammed shut for anyone without a significantly large bankroll to get in a while ago, so the poors are rotating out pretty quickly.

The lack of skiing though is pervasive. Even the "skiers" maybe hit the Vill only when it really dumps, but hardly more than 10-15 days a year. I averaged 60-75 days the last ten years I was living there as a working stiff and I was by far the most prolific skier compared to any of my co-workers (even the business owners) during that stretch. Not sure if they still post the 100 day list, but I was always surprised by how short it was even back when I was hitting that milestone as a young buck 24 year old server.

That all said, I am a bit surprised the News and Guide just glosses right the fuck over the actual property owners asked for and got 12.5k a month for a run of the mill (relatively speaking) family house in Wilson. Even in Jackson not that long ago that would have elicited at least some snark in the reporting.

[XXX-er]

Vancouver has entered the chat

My sister was into banking compliance at one of the big 5 canuck banks in Vangroovy, she said billions came out of China and it was easy to figure out by just running a report to see who violated the laws

so the people who stole that money bought RE with it, they didnt care what they paid or if was rented or whatever cause it wasn't their money but the idea was to get it out of china to somewhere safe

she said Compliance was the only bank dept with any growth, she had started as a teller got in compliance on the bottom and was telling lawyers what to do by the end

she said to also google Hawala banking

[Conundrum]

That all said, I am a bit surprised the News and Guide just glosses right the fuck over the actual property owners asked for and got 12.5k a month for a run of the mill (relatively speaking) family house in Wilson. Even in Jackson not that long ago that would have elicited at least some snark in the reporting.

Just a run of the mill five bedroom house with multiple bonus rooms. All relative for sure.

[dan_pdx]

so the people who stole that money bought RE with it, they didnt care what they paid or if was rented or whatever cause it wasn't their money but the idea was to get it out of china to somewhere safe

Years ago I came up with a business plan with a Chinese co-worker: property management for those kinds of offshore owners with Chinese speaking support staff for the owners. Even if they bought the real estate with shady funds, why turn down a few thousand dollars a month deposited in a Canadian or US account that you can draw on when you're in those countries? Our theory was that it was just too much of a PITA for someone in China who doesn't speak english to deal with finding property management services. We then got too busy with our day jobs to ever do anything about it, but I still think it was a worthwhile idea.

[Kevo]

The skiing in Jackson is good, but it isn't "pay $4000 per month the live in squalor and share a bathroom with 5 other people" good.

I understand the demand from the wealthy and high income to use Jackson as a tax haven. I understand the demand of ski bums of the 70s, 80s, 90s and early 2000s to live the dream in Jackson before it blew up.

I do not understand the demand from youngish people today trying to move to Jackson to work shitty jobs and live in shitholes, especially from those that are beyond their early 20s.

Being 31 and living in a house with 9 other people in order to live in Wilson is a fucking nightmare. Like, what are you even thinking at that point?

[CarlMega]

I do not understand the demand from youngish people today trying to move to Jackson to work shitty jobs and live in shitholes, especially from those that are beyond their early 20s.

Being 31 and living in a house with 9 other people in order to live in Wilson is a fucking nightmare. Like, what are you even thinking at that point?

Different strokes I guess but I'm with ya. To me, if you want to capture the spirit of what the 70s hippy bums did, find a shithole town or plant a shack A frame someplace adjacent to backcountry terrain and get after it. Turn-key resort skiing is for people with resources not people with energy, youth and time to build the culture/vibe. But, for sure, finding affordable side-country land ain't what it used to be so gotta concede the pickins are slim. I still think there's some juice to squeeze and I'm sure someone is doing it right now.

[liv2ski]

Being 31 and living in a house with 9 other people in order to live in Wilson is a fucking nightmare. Like, what are you even thinking at that point?

If that is where a person is at, regardless of location, they either made horrible choices in life, are fuckin stoopid or both.

[dan_pdx]

It's also a pretty pathetic grift for someone with a Wharton MBA. With a little more moxie she could have scammed her way to the White House. I'm sure her classmates are looting pension funds of tens or hundreds of millions of dollars, and she's subleasing rooms to cover her rent?

[muted reborn]

why turn down a few thousand dollars a month

Because for really rich people that's an insanely small amount of money to care about?

[dan_pdx]

Because for really rich people that's an insanely small amount of money to care about?

I'm just speculating about the kind of people who can buy multi-million dollar houses and condos and let them sit vacant and what those people are like, but I imagine you don't get filthy rich by turning your nose up at money, even if it's chump change relative to your total assets.

[muted reborn]

.

Being 31 and living in a house with 9 other people in order to live in Wilson is a fucking nightmare. Like, what are you even thinking at that point?

The article says Tramm didn't tell them there was going to be 9 people in the house. They all found out after signing the lease.

[ötzi]

It's also a pretty pathetic grift for someone with a Wharton MBA. With a little more moxie she could have scammed her way to the White House. I'm sure her classmates are looting pension funds of tens or hundreds of millions of dollars, and she's subleasing rooms to cover her rent?

But Jackson.

[ötzi]

The article says Tramm didn't tell them there was going to be 9 people in the house. They all found out after signing the lease.

You kinda wonder how she described the mudroom with a curtain to make a bedroom.

[muted reborn]

I'm just speculating about the kind of people who can buy multi-million dollar houses and condos and let them sit vacant and what those people are like, but I imagine you don't get filthy rich by turning your nose up at money, even if it's chump change relative to your total assets.

I don't know what to tell you then. They are spending their time getting millions, not thousands.

[californiagrown]

I'm just speculating about the kind of people who can buy multi-million dollar houses and condos and let them sit vacant and what those people are like, but I imagine you don't get filthy rich by turning your nose up at money, even if it's chump change relative to your total assets.

Personally, they absolutely would turn their noses up at a little extra income if it inconveniences them. The convenience of being able to visit on a moments notice is worth the opportunity cost of no rental income. Think the type of person who flys netjets instead of first class commercial.


As a business though, fuck yeah they are renting it out. They are squeezing every dime out of those properties and reinvesting that income. Leveraging the assests they (or their family) owns is how they built so much of their wealth.

[dan_pdx]

Personally, they absolutely would turn their noses up at a little extra income if it inconveniences them. The convenience of being able to visit on a moments notice is worth the opportunity cost of no rental income. Think the type of person who flys netjets instead of first class commercial.


As a business though, fuck yeah they are renting it out. They are squeezing every dime out of those properties and reinvesting that income. Leveraging the assests they (or their family) owns is how they built so much of their wealth.

Yeah, I'm not talking about the family vacation property in Vail, I agree people will leave those vacant. I'm talking about the "I bought this condo in Vancouver to launder money/get it offshore" crowd. I understand a lot of properties in Vancouver where the owners are offshore are vacant, but I hypothesize they'd like to rent them out if it was less hassle.

[californiagrown]

Yeah, I'm not talking about the family vacation property in Vail, I agree people will leave those vacant. I'm talking about the "I bought this condo in Vancouver to launder money/get it offshore" crowd. I understand a lot of properties in Vancouver where the owners are offshore are vacant, but I hypothesize they'd like to rent them out if it was less hassle.

When you are just stashing money from the chinese/russian govt so they dont find out about it, its probably not a great idea to have traceable income from that stash. And in Canada and the USA you kind of have to do things above board, which means traceable. So its a risk vs income calculation, not a convinience vs income calculation.

[dan_pdx]

When you are just stashing money from the chinese/russian govt so they dont find out about it, its probably not a great idea to have traceable income from that stash. And in Canada and the USA you kind of have to do things above board, which means traceable. So its a risk vs income calculation, not a convinience vs income calculation.

I'll accept that as a theory, but is that income any easier to trace than the ownership of the real estate? It's just some Cayman shell corp either way, right?