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Started By
Message
re: If/when there is a major correction and/or housing crash
Posted on 9/25/23 at 10:32 pm to HailToTheChiz
Posted on 9/25/23 at 10:32 pm to HailToTheChiz
quote:
Drop shouldn't be happening but who the hell knows at this point
Ive been off on all my predictions but the fundamentals are all there for them to be near 5% which is healthy and where they were before Rona
But the jobs numbers keep getting revised yuge 3 mnths later, Gas and the Reserve waiting to long to hike
Its going to happen they cant keep this up minus energy
quote:
In some markets sure...but I think some markets have overheated and people are going to get stuck holding the bag
New buyers or something? Cause everyone else has a 3% rates and wont be holding any bag
2
Posted on 9/26/23 at 1:44 pm to SDVTiger
quote:
New buyers or something? Cause everyone else has a 3% rates and wont be holding any bag
Yeah I'm referring to people who were buying in the last 6 months
I think they're going to regret it in a lot of markets. Interest rates aren't getting anywhere near 3% anytime soon to where they can refi and there is a solid chance their property valuations will tank.
Posted on 9/26/23 at 1:48 pm to Powerman
quote:
I wouldn't feel good for them but I think most people know an over inflated market when they see it. The correction is definitely coming.
Agreed sir. And sooner than later
Posted on 9/26/23 at 3:04 pm to Powerman
I paid almost 9% interest on my first house.
The sky is not falling just because builders can’t make 250k profit on every home they build.
The sky is not falling just because builders can’t make 250k profit on every home they build.
Posted on 9/26/23 at 3:07 pm to Powerman
quote:
I think they're going to regret it in a lot of markets
If they can afford the payment how can you regret it
Case Shiller just posted another .6% grow
Heading for another 6% this year after 5% last year
quote:
where they can refi
Everyone is using FHA and they can stream with no appraisal so values wont matter
This post was edited on 9/26/23 at 3:09 pm
Posted on 9/26/23 at 4:10 pm to Powerman
Maybe I’ll buy a beach house.
Posted on 9/26/23 at 4:31 pm to Powerman
Only way it happens is massive job losses. The idiots clamoring for a cheaper home won’t be able to get a loan because they will be out of work. Not everyone is entitled to be a homeowner.
Posted on 9/26/23 at 5:06 pm to Powerman
quote:
quote:The regulations were and are in place.
But they're not really up to date AirBNB was not nearly as prominent even when further regulation was passed. The type of absurd loans that are meant for commercial properties that speculative investors use are causing shocks to the system. DSCR loans should have never been able to be used as an avenue to buy single family homes or condos.
Many of the distressed properties after the Financial Meltdown of 2008/2009 were bought with cheap ZIRP money by house flippers and institutional investors. Some of those houses were flipped, some became vacation rentals, some became residential rentals, etc. What has really jacked up the price of residential real estate the past 10 years is 20% of all single family home sales were being purchased by huge real estate investment companies who were paying well over market price because they had the cash to do so.
Posted on 9/26/23 at 5:10 pm to SDVTiger
quote:
New buyers or something? Cause everyone else has a 3% rates and wont be holding any bag
The problem is that because rates were so low home values went up too high. Now the Feds are trying to squash inflation, so rates keep going up. These high rates are supposed to slow the economy. The Feds are hoping for a soft landing, and if that happens, then you are right, and the folks with the low interest rates will be snug as a bug because the housing prices will just reinflate.
But what if they don’t achieve a soft landing? What if it’s a hard landing with tens of millions losing their jobs? Those people will be unable to pay their mortgage, regardless of the rates. And their house value will be less than what the owe, because the mortgage companies lent them 95% of the previous inflated value.
Posted on 9/26/23 at 5:12 pm to Powerman
quote:
Will you consider this a good thing or a bad thing?
It's a terrible thing. But, we are in terrible times. Terrible things are going to happen. Corrections are a sign that the system is still functional.
Posted on 9/26/23 at 6:00 pm to Penrod
quote:
Those people will be unable to pay their mortgage, regardless of the rates. And their house value will be less than what the owe, because the mortgage companies lent them 95% of the previous inflated value
And if rates drop by 1% there is 4-5mill new buyers
So unfortunately some may lose their homes but others will buy them immediately maybe at a slight discount
Posted on 9/26/23 at 6:46 pm to moneyg
Wasn't like this three years ago.
Posted on 9/26/23 at 7:44 pm to SDVTiger
quote:
And if rates drop by 1% there is 4-5mill new buyers
So unfortunately some may lose their homes but others will buy them immediately maybe at a slight discount
What if those buyers don’t have jobs? What you are describing is the soft landing they are aiming for. What I countered with was the hard landing that might happen. I’ve been through two of them. They don’t happen as you are describing it.
Posted on 9/26/23 at 7:46 pm to craynagin
Florida is an interesting case study. There are multiple issues converging
1. Older population owning homes for many years heading toward downsizing and retirement
2. Covid causes a massive influx of people - a lot from the northeast willing to spend more money than traditional house values and for cash. Causing housing prices to rise
3. Current problem is that older people who have much lower property taxes and lower mortgage cannot afford to sell because increased property taxes and 20 percent down and higher interest rates on any new home they purchase does not make economic sense.
Personally, a serious correction would help me as I'm just waiting to buy on a beach town but the prices are beyond absurd.
1. Older population owning homes for many years heading toward downsizing and retirement
2. Covid causes a massive influx of people - a lot from the northeast willing to spend more money than traditional house values and for cash. Causing housing prices to rise
3. Current problem is that older people who have much lower property taxes and lower mortgage cannot afford to sell because increased property taxes and 20 percent down and higher interest rates on any new home they purchase does not make economic sense.
Personally, a serious correction would help me as I'm just waiting to buy on a beach town but the prices are beyond absurd.
Posted on 9/26/23 at 9:30 pm to Powerman
quote:
Will you consider this a good thing or a bad thing?
The problem is housing is only a symptom, the real problem is the credit bubble the US consumer has created.
Credit card debt is at an all-time high and still quickly increasing. Credit card delinquency rates are rising quickly and will likely rise further and faster as student loan repayments start on Sunday.
PPI has begun creeping back up...
Which means CPI will likely go up again at least for September, if not both September and October.
Which makes another .25 rate increase more and more likely.
All of this means that consumers will have less and less money going forward to afford things like homes or servicing credit cards as basic necessities continue to rise in price. As consumers are purchasing fewer items, GDP slows down. My fear is that if we see GDP go negative while Unemployment is increasing, that's going to cause businesses to panic and cut more jobs than they normally would, thus exacerbating the problems.
Once all this balances out (whenever that is), we would likely have come out the other side with some deflation and a frickton of room for re-growth. The issue is that it's going to also put millions through a frickton of pain to get us there.
Posted on 9/26/23 at 10:08 pm to Bard
quote:
we would likely have come out the other side with some deflation and a frickton of room for re-growth.
I think deflation will be the story and as long as it doesn’t swamp the economy, I don’t think it’ll be the boogeyman we were all taught it was.
Posted on 9/26/23 at 10:27 pm to stout
quote:
There is already an uptick in foreclosure activity over the past several months.
You have a site you like to use to follow local foreclosures for opportunities?
Posted on 9/26/23 at 10:56 pm to Powerman
Bubbles need to be busted from time to time. A bush needs to be pruned every now and then.
After the 2008 crash Obama had a chance to go after the weak banks and financial institutions with regulations. Instead he focused on Obamacare instead of delaying it. In the mean time the banks and financial institutions regained strength and hire lobbyist to protect their interest.
After the 2008 crash Obama had a chance to go after the weak banks and financial institutions with regulations. Instead he focused on Obamacare instead of delaying it. In the mean time the banks and financial institutions regained strength and hire lobbyist to protect their interest.
Posted on 9/26/23 at 11:40 pm to SDVTiger
quote:
If they can afford the payment how can you regret it
If you have a 3500 mortgage payment and your new neighbor with a similar house has a 2200 dollar mortgage payment you don't think they might have some buyer's remorse?
Posted on 9/27/23 at 6:06 am to Powerman
quote:
If you have a 3500 mortgage payment and your new neighbor with a similar house has a 2200 dollar mortgage payment you don't think they might have some buyer's remorse?
If it was bought as a ‘forever’ home this is irrelevant. Housing goes up and down. Statistics show if you are going to stay more than 5 years even in the shittiest of areas your home will be worth more. This only matters if you are planning to sell in 3 to 5 years. It depends on the situation.
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