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I’ve been in the real estate game for over 30 years, mostly building and selling homes etc. About half of our personal portfolio has been in RE.

Over the past 4 months we’ve put 3 properties up for sale in VA and NC. All 3 went under contract between 2 and 30 days. Our highest property went under contract for 80K over asking and we closed on that one 2 weeks ago. Of the other 2 one will close by the end of the month as their due diligence period has expired and they were happy with the inspections. The final one (a vacant lot) the buyer decided today to back out as the higher interest rates due to the feds actions today made him uncomfortable.

We are going to keep the cash and are actively looking into buying a home in the SC low country but we’re waiting for prices to lower. There are already signs of this happening so we’ll see.


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Eddie

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Posts: 5556 | Location: In transit | Registered: February 19, 2013Reply With QuoteReport This Post
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Doubling of mortgage rates or even more, especially in such a short period of time, is going to have a big negative impact on the housing market. At some point rates may go down again but I seriously doubt anywhere near the recent years lows.

The cracks are starting to show, just like in 2008, and at some point the dam will break. I remember leading up to the 2008 crisis there was a lot of panic buying of real estate driving up prices by those who did not want to get left behind and priced out of the market which they were positive was a sure thing.

These sure are scary times as far as the economy and there does not seem to be much confidence in those that are supposed to "fix it" and more than a few questioning if they really even want to "fix it".


“When the people find that they can vote themselves money that will herald the end of the republic.”
― Benjamin Franklin
"The problem with socialism is that eventually you run out of other people's money."
― Margaret Thatcher
 
Posts: 9439 | Location: Northern Illinois | Registered: March 20, 2009Reply With QuoteReport This Post
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Nope, I got one house and a reasonable mortgage. You guys have been clamoring for a housing market collapse for awhile. It gets old. In this inflationary market the housing sector isn’t going to get cheap just because you think it has to. As for PA, the northeast as a region is losing people and PA is too. Like I said it gets tiring to hear the same nonsensical crap over and over. People here were telling people to wait out the market as late as a month or so ago. Rates have now doubled. Tell how that was good advice?

This board is awash in bad “wisdom” at times. If you think the market is going to collapse enough to make up for double the mortgage rate you are nuts. And if you somehow are right? Then most of America would be fucked. It’s like rooting for the lifeboat to sink.

If I’m misreading then I apologize.
 
Posts: 5111 | Registered: June 18, 2005Reply With QuoteReport This Post
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Over time, interest rates can be a good thing for a buyer. You can change your interest rate through a refi, but you cannot change what you paid for the house. In other words, higher interest rates can lower the asking prices as more potential buyers are unable to afford the increased payment. Eventually, this will moderate housing prices. Even though the payment will still be the same due to the current higher rate, in a few years the purchaser can lower their payment through a refi after rates fall.

I did this in the early 2000s. I purchased a couple of rentals that had a very small negative cash flow. I lost money every month for about five years. Then the 2008 crisis hit, and rates were lowered in 2009. I refinanced those properties, and immediately had a $700 positive cash flow.



Demand not that events should happen as you wish; but wish them to happen as they do happen, and you will go on well. -Epictetus
 
Posts: 7615 | Location: Utah | Registered: December 18, 2008Reply With QuoteReport This Post
Green grass and
high tides
Picture of old rugged cross
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quote:
Nope, I got one house and a reasonable mortgage. You guys have been clamoring for a housing market collapse for awhile. It gets old. In this inflationary market the housing sector isn’t going to get cheap just because you think it has to. As for PA, the northeast as a region is losing people and PA is too. Like I said it gets tiring to hear the same nonsensical crap over and over. People here were telling people to wait out the market as late as a month or so ago. Rates have now doubled. Tell how that was good advice?

This board is awash in bad “wisdom” at times. If you think the market is going to collapse enough to make up for double the mortgage rate you are nuts. And if you somehow are right? Then most of America would be fucked. It’s like rooting for the lifeboat to sink.

If I’m misreading then I apologize.



Are you the guy working from home processing refi and mortgage applications? I might have you confused with another member?



"Practice like you want to play in the game"
 
Posts: 17274 | Registered: September 21, 2005Reply With QuoteReport This Post
I Am The Walrus
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People fucked themselves. Politicians fucked them. Draconian rule in places like NY, NJ and CA forced the ruled to flee to free parts of America such as FL and TX. No problem with that except when they get to FL and say shit like "the way we did it in NY was..."

Take that shit back to where you belonged.

I was talking to a lady who was born and raised in FL and always talks shit about FL yet won't leave. I don't see anyone fleeing FL to go to NY or NJ. People want to talk shit and be a gangster but everyone's a gangster until it's time to do gangster shit.

Those people who sold their overpriced homes in NY/NJ/CA and outbid the locals in lower cost of living areas fucked those areas hard and raw. Imagine growing up in a place that's lower cost of living and being told your entire life that you work hard, save your money and you can buy a house just to have some fucker from NY come in and pay $50k over asking in cash because he sold his 800 square foot dump for $500k.

Then you have those who don't think about anyone else besides themselves:

-it's good they're coming here and paying more because my property value goes up while not thinking that property value goes up, so does property tax.
-gentrification. Was talking to a young lady and she was saying how it's getting harder to find authentic tacos in El Paso because of the Californians moving here. Say adios to the culture you've had for so many years.

Then you have large investment firms buying dozens of lots of homes in communities and immediately turning them into rental properties.

And that's not even factoring the Chinese doing that. But are the Chinese really doing it to us or are we doing it to ourselves by buying shit made in China, they turn around to buy OUR homes to rent them out to us.

We are literally paying the enemy to kill us.


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Posts: 12055 | Registered: March 12, 2005Reply With QuoteReport This Post
Unflappable Enginerd
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About 6 months ago:
Here a small group of local well above average net worth investors got together and bought almost every large trailer park. Whatev, trailer parks, eh?...

They immediately raised (read doubled) lot fees, which drove out a fair amount of people, but not all. Now they are scrapping all the original trailers as they come off lease which were older(ish) and replacing them with new ones and charging a pretty good chunk to rent them out. They have several 10's of millions in investment between buying the parks and replacing trailers, but the rental market around here is pretty high for an area like this already. In many cases, townhouses and apartments are cheaper to rent than these new trailers, which are actually pretty nice as trailers go...

Capitalism at work, but these these guys are probably already well into a positive cash flow situation, unfortunately that comes at the expense of all but eliminating what was arguably the bottom end priced housing units in the area.

As for the local housing market in general, believe it or not, South AL is a pretty hot market for folks that can't pony up quite enough to play in the FL market. In my small town of 4K people, they recently announced the construction of 400 new houses spread across 3 new subdivisions, that's a LOT of new people for a town my size... The new subdivisions are medium+/high- priced for this area ($250k and up) which drove everything else in my sleepy little town up at least 25% over last year. I'm not sure any of this helped me, pretty sure not... Now, what the increased interest rates will do to the sales of those 400 new units, guess we'll see.


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Posts: 5166 | Location: Headland, AL | Registered: April 19, 2006Reply With QuoteReport This Post
Fire begets Fire
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Clouus Schwab: “You will own nothing and be happy. “





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Posts: 25044 | Location: dughouse | Registered: February 04, 2003Reply With QuoteReport This Post
I Am The Walrus
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quote:
Originally posted by stoic-one:
As for the local housing market in general, believe it or not, South AL is a pretty hot market for folks that can't pony up quite enough to play in the FL market. In my small town of 4K people, they recently announced the construction of 400 new houses spread across 3 new subdivisions, that's a LOT of new people for a town my size... The new subdivisions are medium+/high- priced for this area ($250k and up) which drove everything else in my sleepy little town up at least 25% over last year.


I imagine that's a major shock to the small local market.

What have the locals been saying about it?


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Posts: 12055 | Registered: March 12, 2005Reply With QuoteReport This Post
Unflappable Enginerd
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quote:
Originally posted by Edmond:
quote:
Originally posted by stoic-one:
As for the local housing market in general, believe it or not, South AL is a pretty hot market for folks that can't pony up quite enough to play in the FL market. In my small town of 4K people, they recently announced the construction of 400 new houses spread across 3 new subdivisions, that's a LOT of new people for a town my size... The new subdivisions are medium+/high- priced for this area ($250k and up) which drove everything else in my sleepy little town up at least 25% over last year.


I imagine that's a major shock to the small local market.

What have the locals been saying about it?
Honestly, don't think its quite sunk in yet. Right now a lot of the people are bitching about the increased property assessments (sticker shock), but the rates are so low here that it doesn't have THAT much impact. Also the increase hasn't truly had an impact yet since the taxes aren't due until the end of the year.

Now the population increase, and subsequent infrastructure stresses, that's something that won't be fully realized until people start moving into houses.


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Posts: 5166 | Location: Headland, AL | Registered: April 19, 2006Reply With QuoteReport This Post
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Another very recent article from this morning on slowing housing market.

https://wallstreetinvests.com/...-that-morning-brief/

Friday, June 17, 2022

Today’s newsletter is by Myles Udland, senior markets editor at Yahoo Finance. Follow him on Twitter @MylesUdland and on LinkedIn.

The Federal Reserve is trying to slow the economy, and the housing sector is bearing the full force of these actions right now.

Costs are rising for buyers. Confidence from builders is falling. List prices are getting cut. And if the idea that the housing cycle is the business cycle holds any sway, the road ahead does not look pretty.

The Census Bureau published its latest report on housing starts and building permits, which offers a monthly look at home construction activity nationwide, on Thursday morning. It showed that in May, the pace of new home construction fell by 14% from April to its lowest level in a year.

In the mortgage market, things are even more challenging.

Data out Thursday from Freddie Mac showed the average rate on a 30-year fixed mortgage rose to 5.78% last week, the highest since November 2008 and marking the largest one-week increase since 1987.

In a press conference on Wednesday, Fed Chair Jerome Powell said the housing market is experiencing a “reset.” The data published Thursday suggests to at least one economist that “reset” might not be a strong enough word to describe the dynamics taking place in the housing market right now.


“The next few months will bring further, steep, declines in housing construction, given the collapse in mortgage demand,” Ian Shepherdson, chief economist at Pantheon Macro, wrote in a note following Thursday’s housing starts data. “Chair Powell yesterday said the housing market is undergoing a ‘reset’; it’s much more than that.”

Earlier this week, the latest reading on homebuilder sentiment from the National Association of Home Builders showed builder confidence in June fell to its lowest level in two years. And a new report from Redfin (RDFN) showed that amid rising interest rates, the share of homes for sale with recent price drops rose to the highest level since at least 2015.

The percentage of homes on the market with price drops is at its highest level since at least 2015, according to data from Redfin.

Taylor Marr, deputy chief economist at Redfin, stated that the housing market “isn’t crashing, but it is experiencing a hangover as it comes down from an unsustainable high. Housing demand has already cooled significantly to the point that the industry has begun facing layoffs.”

Redfin laid off 8% of its staff earlier this week, the latest in a string of layoffs we’ve seen announced across the tech world that appears to be broadening out.

“I would say if you’re a home buyer… or a young person looking to buy a home, you need a bit of a reset,” Powell said Wednesday. “We need to get back to a place where supply and demand are back together, where inflation is down low again, and mortgage rates are low again. So this will be a process whereby we ideally… do our work in a way that the housing market settles in a new place and housing availability and credit availability are at appropriate levels.”

Translation: The current state of housing is not healthy.

And the Fed’s suggested cure? Sweat it out.


“When the people find that they can vote themselves money that will herald the end of the republic.”
― Benjamin Franklin
"The problem with socialism is that eventually you run out of other people's money."
― Margaret Thatcher
 
Posts: 9439 | Location: Northern Illinois | Registered: March 20, 2009Reply With QuoteReport This Post
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ORC I have no idea where you got that idea.
 
Posts: 5111 | Registered: June 18, 2005Reply With QuoteReport This Post
Just because you can,
doesn't mean you should
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When rates are artificially low, really low by historical standards, and prices keep going up at a crazy rate, what's a speculator to do?
Buy as much as they can, as quick as they can and sell it relatively quickly to lock in their profit. Rinse, repeat.

Even the folks sitting on a bunch of cash had to do something with the real inflation rate way higher than the government version. Nobody wants to see their money shrink before their eyes in traditional saving and investing and then be taxed on the supposed gain that is really a loss, relative to inflation.

The real question(s) is, what happens next? Who can ride it out?
What's been happening wasn't that hard to predict before it happened. Using the same prediction skills, such as they are, the near term future sounds a bit scary to me.


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Posts: 7926 | Location: NE GA | Registered: August 22, 2002Reply With QuoteReport This Post
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My wife is was a mortgage processor. She was laid off June 1st, with about 20% of the total staff of that company. I expect another round of layoffs coming soon.

She said as soon as it was reported that the Fed would raise rates, applications plummeted. Once rates were adjusted, many that previously pre-qualified suddenly no longer did, and they pulled their applications as well.

As previously mentioned, prices will decrease but the payments won't. I don't see a "bubble burst" like in 2008, but it'll definitely change the market for a while. I do wonder what will become of the new construction that was booming, I've already seen two proposed developments near me announce a pause/delay.




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Posts: 3168 | Location: Southern Maine | Registered: February 10, 2008Reply With QuoteReport This Post
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I walk my neighborhood 5 days a week.
It is an HOA gated community with decent amount of homes.
Most houses have a decent size property with a nice sized back yard compared to what they are building now.
Most are well maintained with a few exceptions.

I have noticed over the last few months the same houses for sale. At one time houses were being sold without even being listed. Real estate agent had buyers lined up waiting for a house to become available.
It is a good location near major highways and lots of shopping.
I am just wondering if the market is starting to slow down because interest rates have gone up or prices have just gotten to high.




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Posts: 1955 | Location: Central Florida, south of the mouse | Registered: March 08, 2010Reply With QuoteReport This Post
His Royal Hiney
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quote:
Originally posted by grumpy1:

The cracks are starting to show, just like in 2008, and at some point the dam will break. I remember leading up to the 2008 crisis there was a lot of panic buying of real estate driving up prices by those who did not want to get left behind and priced out of the market which they were positive was a sure thing.



I'm not sure there's a dam to break like in 2008 with a lot of subprime mortgages holding mortgages that defaulted. The recent uptake was driven by people wanting to move because they can work from home and a good portion have moved to different states along with the exodus to red states.

I wish you're right because then I'll be on the right side of the housing market this time but I don't see any dam breaking. I have seen a lot of "price lowered" in Zillow and I think these are people who want to lock gains made in the last couple of years.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 17674 | Location: The Free State of Arizona - Ditat Deus | Registered: March 24, 2011Reply With QuoteReport This Post
His Royal Hiney
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quote:
Originally posted by Gibb:
My wife is was a mortgage processor. She was laid off June 1st, with about 20% of the total staff of that company. I expect another round of layoffs coming soon.

She said as soon as it was reported that the Fed would raise rates, applications plummeted. Once rates were adjusted, many that previously pre-qualified suddenly no longer did, and they pulled their applications as well.



Wow, that's certainly a canary in the coal mine story. Sorry about your wife; hopefully she'll bounce back quick and fine.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 17674 | Location: The Free State of Arizona - Ditat Deus | Registered: March 24, 2011Reply With QuoteReport This Post
I Deal In Lead
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Was just reading the local fish wrapper.

Average time on the market for houses for sale is now 30 days in my Town, which is one of the more desirable Towns in the greater Phoenix area.

It's coming down all right.
 
Posts: 9000 | Location: Gilbert Arizona | Registered: March 21, 2013Reply With QuoteReport This Post
paradox in a box
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There is a difference between now and 2008. That being the inventory is still severely low. In 2008 there was high inventory in addition to everything else that caused the crash. My wife just listed her first new construction homes that are over $1 million. We will see how quickly they sell. They are in a great location and I’m guessing that someone spending 1.2 million is less concerned about mortgage rates than the average buyer. But my wife is very lucky to work for a builder as that helps with the inventory issue.




These go to eleven.
 
Posts: 11537 | Location: Westminster, MA | Registered: November 14, 2006Reply With QuoteReport This Post
Green grass and
high tides
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[QUOTE]Originally posted by frayedends:
There is a difference between now and 2008. That being the inventory is still severely low.

That is changing daily. With homes on the market longer. That is an obvious outcome



"Practice like you want to play in the game"
 
Posts: 17274 | Registered: September 21, 2005Reply With QuoteReport This Post
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