Real Estate Crash thread

[rideit]

Prices are still stubborn here. People won’t let go of their ‘Cash Out Of This Played Town’ dreams.
Many people sort of ‘struck it rich’ the last few years (mostly longtime homeowners), and new sellers want the same.
Can’t blame them. There still seems to be more people wanting to move here than is currently possible. (Physically and economically).

[Core Shot]

How fucked depends on the equity amount. When foreclosures hit the fan last time, it was because lenders were doing 0 down loans that then depreciated another 25%-35%, so of course people walked away from those properties. That is no longer the case and frankly between most people putting 20%+ down at time of purchase and then the appreciation over the last 2 years, if they get squeezed financially, they will sell, but at the most, they will loose the last 2 years appreciation, so back to 2020 values. In Mammoth, that is a big hit from 6 months ago.

A home I have been watching that I would push hard to buy at $2M:
Attachment 439460

Z estimates have changed. They used to creep up towards a high sale. Now they jump to the sales price. Then creep down. It amuses me.

My guess is avoiding being sued by the new buyer.

[liv2ski]

Not sure they have any responsibility for an opinion that is freely given at no cost. It is up to the consumer to check many sources for estimated value, most importantly from the RE agent they hired to provide them comps to justify an offer if paying cash. If financing, then it is on the appraiser, not on-line platforms IMO.

[Kevo]

Thanks, Goldenboy

One of my theories is that if and when prices come down their will be new Front Range based second home buyers who have been on the sidelines due to stupid prices. Our economy, construction, realestate and otherwise has always been driven by Denver.

When I start hearing about layouts in the $200K+ household income bracket, I'll start being concerned. The decreasing wealth effect from stock market performance this year doesn't seem to have done much yet.

Good point a couple pages back about cash buyers. The house nextdoor to me is being built at a price per square foot probably 30% higher than recent comps. The out of state owners are (or were) planning to STR in the winter to make the ends meet. Now the market is flooded with STRs and there are hundreds of places open for Christmas break. Not sure it will pencil out, especially if they have to finance with a 30 year at rates more than 2x as high as when they started construction.

They could be cash buyers, but things could get interesting if they aren't.

[lowsparkco]

Jaded as in has never understood why realtors are self anointed real estate experts who simplify everything whilst not having a real good grasp on development, economics, construction, zoning, public policy or any of the other number of topics that they are more than willing to just straight make shit up about to get the check?

Yep, you got me figured out!

But seriously, every property is subject to the economic variables of the owner. You generally will not know what those are. The greater trend will effect the market but not necessarily the transaction.

Has the lending environment not changed substantially since 2008? Can you get a conforming loan on an income property using protected revenue from short term income to qualify?

Licensing as a RE broker / salesperson (state dependent) has a very low barrier of entry, a short class and an easy exam. Many brokers only have a high school diploma. The checks and balances are that their license is an extension of a principal broker who at least has a couple of years of experience, passed a little longer class, and took a little harder exam, and Oh Yeah, carries Errors and Omissions insurance.

I would be the first in line to complain about the behavior of many of my peers. There isn't a lot of difference between a RE Broker and a used car salesman of old. It has really taken a lot of value out of what we do.

I on the other hand grew up around the industry, am 3rd generation of broker/developers on both sides of my family, and try and humbly admit when I don't know something about any and all of the above. Understanding development and zoning are pretty non-negotiable. Economics, construction practices, and other elements of public policy are not necessarily in our job description although I hope I know enough about each to have an intelligent conversation and once again admit what I don't know. Most transactions are pretty "paint by the numbers" and inspectors, title research, lenders, and other professionals throw in their hat to help us out.

Fannie Mae and Freddie Mac don't underwrite business asset acquisitions so, no, a property that is being acquired specifically as an STR would not qualify for a conforming loan. For some reason you can in fact buy a 2nd home with a conforming product, so that's what you're mostly going to see with someone who is purchasing an STR. Seems that is what one of the other mortgage brokers was referring to, you can qualify past established income, same as perhaps if you were buying a duplex and living on one side. There are still portfolio products available for anything and everything imaginable, but very few clients seem to want to access them in any of the markets I've worked in the last decade. I'd guess they're a competitive part of bigger urban market lending.

Yes, absolutely the lending environment is very different i.e. there is a lot less money being leant.

[lowsparkco]

Prices are still stubborn here. People won’t let go of their ‘Cash Out Of This Played Town’ dreams.
Many people sort of ‘struck it rich’ the last few years (mostly longtime homeowners), and new sellers want the same.
Can’t blame them. There still seems to be more people wanting to move here than is currently possible. (Physically and economically).

Good point. Most second home owners have enough stability to ride out small economic down turns.

I actually agree with Fraser Valley. Until we see big Fortune 500 layoffs we'll be pretty stable. Ultimately the biggest single variable I've ever observed is lost jobs. I think it still holds true that most Americans are only a few paychecks away from bankruptcy. And really why wouldn't they be? As long as the interest on our primary home is our biggest write off, I think this will be the case. Maybe controversial but I think a lot of Americans feel they can either live in a home they can afford in a worst case scenario, or leave as little equity as possible in their home and walk if they lose one of the two jobs that keep the bills paid.

[Vt-Freeheel]

Sweet listing though taking possession could be a battle

https://www.facebook.com/marketplace...type=top_picks

[XXX-er]

https://www.cbc.ca/player/play/2156927555563

2 yr moratorium on being an amenity migrant in Canada

[Name Redacted]

https://www.cbc.ca/player/play/2156927555563

2 yr moratorium on being an amenity migrant in Canada

Really wish we had moved when my wife had a job offer. Stupid covid. Good for you guys. I totally support it but hope i can move there someday.

[XXX-er]

Really wish we had moved when my wife had a job offer. Stupid covid. Good for you guys. I totally support it but hope i can move there someday.

if you listen to the story its not really gona make a huge difference but the optics are good for the party in power

The real problems are much bigger

[BCMtnHound]

if you listen to the story its not really gona make a huge difference but the optics are good for the party in power

The real problems are much bigger

Yup. This only hurts the little (upper-middle caste) guy from abroad anyways. Institutional real-estate investors just use a Canadian registered business.

[ötzi]

Sweet listing though taking possession could be a battle

https://www.facebook.com/marketplace...type=top_picks

"DO NOT INTERACT WITH THE OCCUPANTS"

what's the story there?

[JimmyCarter]

"DO NOT INTERACT WITH THE OCCUPANTS"

what's the story there?

They are squatting and they have firearms.

[ötzi]

Seems like a reasonable guess.

[babybear]

Seems like a reasonable guess.

plus it says it right in the ad for the house

[4matic]

Rents are coming down:

Although the number of single-family units under construction is only 78% of the peak in 2006, the number of multi-family units under construction is DOUBLE the peak in 2008.

Total units under construction is 20% above the 2006 peak.
https://fred.stlouisfed.org/graph/?g=YlRj

[liv2ski]

My rents are well below market, so rents going down 10% is no big deal. Likely true for most properties. Besides, who wants to live in an apartment

[Toadman]

Nice starter home in Bend. New neighborhood that's being built out. Even with the current interest rates, stuff like this still is selling.

https://www.redfin.com/OR/Bend/2286-...mpaign=1038276

[Ted Striker]

$505/sf w/$140 month... wow.

Things are still stupid here too - at least in the 'we don't need a loan' category. Recent bidding war in my hood for a 100 year old house with 50-100k deferred maintenance on an irregularly shaped lot.

[fastfred]

nothing makes sense
shits weird
even the places no one wants to live are still high priced
osb is around 12 bucks a sheet right now
looking for a mid february corrrection don't see it though once the stock market drops 2500 pts in a few days things might get shaky should happen around valentines day

[Vt-Freeheel]

Nice starter home in Bend. New neighborhood that's being built out. Even with the current interest rates, stuff like this still is selling.

https://www.redfin.com/OR/Bend/2286-...mpaign=1038276

They worked really hard to make this house as bland as possible, golf clap.

[AdironRider]

They worked really hard to make this house as bland as possible, golf clap.

Seriously. I'm usually a different strokes for different folks kinda guy but that house sucks.

[The AD]

Seriously. I'm usually a different strokes for different folks kinda guy but that house sucks.

It's certainly nothing to get excited about, but I'd live in it.

[oldnew_guy]

That place is all about location, location, location.

West side Bend proximate to Shevlin Park, Skyliner and associated trail systems…

[Name Redacted]

Cheap living across the street from Keystone Ski Area:

https://www.zillow.com/homedetails/4...EGtLs6BkijM4o_