This is why New construction is not crashing anytime soon

[Jay Hinrichs]

Canby, OR (altos.re)   this is our little sandbox right now.

City of 20,000 in metro Portland MSA  .  Of course when you see that average list price is 675k and average rent is 1950.00 its not a cash flow play for new homes.. but this is where peeps want to live and raise families.. and that market is not showing signs of weakness going the other way right now.. of course who knows the future.

[Jay Hinrichs]

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Canby, OR (altos.re)   this is our little sandbox right now.

City of 20,000 in metro Portland MSA  .  Of course when you see that average list price is 675k and average rent is 1950.00 its not a cash flow play for new homes.. but this is where peeps want to live and raise families.. and that market is not showing signs of weakness going the other way right now.. of course who knows the future.

I heard Wells Fargo just laid off 450 mortgage originators. More companies to follow? I don't know. 
But, with rising interest rates and possible changes in lending . . .  thoughts?

 no question the mortgage industry is going to be hit hard.. reason ?  refi's are done .. or severely limited and those were a higher % of loans than new purchases.  So RMLO's who lived off of refis now have to go back to finding realtors who will bring them business and or peeps like us who have their preferred lender and co brand with us.  Thereby getting access my next 60 buyers.. They also have to have sharp pencils and provide great service and very good rates to get in our doors.  As to Wells Fargo I would reject a buyer who is using / or was using Wells on a new construction loan. Between them and Rocket those are two lenders that I just wont sell my product if the buyers are using them pain in the rear and not worth it.

But of course simple logic dictates a slow down in Real Estate purchases and most likely rampant appreciation. However at least for us we are not selling to first time buyers and out of the first 5 pre sales I have this quarter 3 are all cash so there is that. Historic norms for interest rates is in the 6% range for owner occ  we ALL knew that 2 and 3 % loans would never last and here we are they are gone for now.. 

I see this potentially affecting the cash flow investor though and the trickle down to the fix and flip sell to a landlord developer and or the wholesaler who is trying to cut a big slice out of cash flow rentals.. Especially in the CASH flow markets were wholesaling is far more prevalent than in other markets.