Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Bill B.]

Sorry @Carlos Ptriawan you have to find a new source. 78% of the top 50 markets are seeing increased listing and Vegas isn’t leading the list. Only 8 have negative new listings. 

But you are right, who would be selling? Give up your 30 year low interest rate for a new higher one? Assuming it’s not people leaving the valley it can only be rentals otherwise the sellers would just be buying up another property  and the inventory wouldn’t be changing  this might be the time of year when the most leases expire, right before school  

https://www.realtor.com/resear...

Phoenix Raleigh Austin Nashville and Tampa are top 5 for those interested. 

[Matthew McKee]

Hey BP family, seems like this is a heated debate. There’s good points and opinions on both sides of this discussion.

Just here to remind everyone we’re on the same team and this is a family, let’s not make it a blood bath and ego centric “I told you so’s and callouts”.

You’re not ring if your buying and you’re not wrong if you’re waiting. You’re just acting on you’re due diligence. 

Listen loudly, speak softly and have a great labor day weekend!

[Jay Hinrichs]

Quote from @Matthew McKee:

Hey BP family, seems like this is a heated debate. There’s good points and opinions on both sides of this discussion.

Just here to remind everyone we’re on the same team and this is a family, let’s not make it a blood bath and ego centric “I told you so’s and callouts”.

You’re not ring if your buying and you’re not wrong if you’re waiting. You’re just acting on you’re due diligence. 

Listen loudly, speak softly and have a great labor day weekend!

 YUp  good looking dog !!!

[Carlos Ptriawan]

Quote from @Bill B.:

Sorry @Carlos Ptriawan you have to find a new source. 78% of the top 50 markets are seeing increased listing and Vegas isn’t leading the list. Only 8 have negative new listings. 

But you are right, who would be selling? Give up your 30 year low interest rate for a new higher one? Assuming it’s not people leaving the valley it can only be rentals otherwise the sellers would just be buying up another property  and the inventory wouldn’t be changing  this might be the time of year when the most leases expire, right before school  

https://www.realtor.com/resear...

Phoenix Raleigh Austin Nashville and Tampa are top 5 for those interested. 

 Based on this data, new listing count YoY with a double-digit increase is only in three metros: Charlotte,Vegas,Nashville with only Vegas feeling the heaviest price reduction.

Is people leaving Vegas or what ?

[Bill B.]

@Carlos Ptriawan

That’s my question. I know people are still planning on a 700k population increase. There are infinite jobs available. The cost of housing and living is tiny compared to our neighbors. Rents are still skyrocketing but vacancies are filled in a week. I know some people aren’t happy about the influx from blue states but it’s hard to see how that would have a negative population effect. We do have an older population. Maybe they’re dying, moving in with families or assisted living. We sure as heck aren’t building enough houses. The schools aren’t great. 

[Osazee Edebiri]

Quote from @Nicholas L.:

@David Song

I'm seeing that too... but only at those high price points.  And I think a lot of us aren't looking for investment properties in the $700K-$1.2M range!  I know David Greene is busy turning $2M houses in Oakland into $3M houses in Oakland, but I'm looking for bread and butter 3/1 rentals, and they're staying stubbornly high - sellers are holding out for 2021 situations even though there is slightly less demand at the moment.

@James Hamling

Agree with your post about new household formations.  It seems to me that even though US population growth is slowing slightly compared to previous decades, there is still strong demand in desirable areas, and a major shortage of affordable housing.

@Jay Hinrichs

To get back to one of your previous posts about housing starts - Bloomberg just reported this:

"The government’s report showed single-family housing starts decreased 10.1% to an annualized 916,000 rate, the slowest since June 2020. Permits for one-family dwellings dropped 4.3% to a two-year low. Meanwhile, construction of multifamily dwellings fell to 530,000 in July."

If this market "cooling" causes builders to slow, isn't that just going to exacerbate the shortage, especially at the price points some of us are after?!

David is doing the East Bay, but not Oakland, just wanted to clear it since those markets are highly different strategy.

[Account Closed]

@Carlos Ptriawan yes, based on 30 day move-out notices we have been receiving from Tenants there is a noticeable shift of people moving out of state. This is vastly different than years past when all our applicants were moving here from out of state. A slight shift in population is occurring. Property managers have real time info. It takes the media 6-12 months to catch up. @Bill B. I've been noticing rents decreasing slightly but still higher than pre-pandemic levels. Vacancies are not filling in a week like they use to. Houses are still renting fast but starting to noticeably slow which is a good thing. It was frantic here for awhile.

[Carlos Ptriawan]

Quote from @Account Closed:

@Carlos Ptriawan yes, based on 30 day move-out notices we have been receiving from Tenants there is a noticeable shift of people moving out of state. This is vastly different than years past when all our applicants were moving here from out of state. A slight shift in population is occurring. Property managers have real time info. It takes the media 6-12 months to catch up. @Bill B. I've been noticing rents decreasing slightly but still higher than pre-pandemic levels. Vacancies are not filling in a week like they use to. Houses are still renting fast but starting to noticeably slow which is a good thing. It was frantic here for awhile.

 I see. But I still think there could be Opendoor's effect on the Vegas market. Currently, there're 5700 homes for sale in Vegas, looks like 5-10% of them are Opendoor inventory. In 2021, 20% of their inventory was in Vegas.

They're losing money in Sacramento as well as the sold price is even lower than the acquisition value, it's analyzed comprehensively here :
https://sacramentoappraisalblo...

Regular flipper will just die with Opendoor business model, but they can continuously do the same by diluting investor's money.

[Account Closed]

@Carlos Ptriawan totally agree. iBuyers and institutional investors have had an impact on Vegas prices. There are so many factors that have impacted our local real estate market the last 24 months...it's not just 1 thing. Good stat on Open Door. I was unaware of their Vegas inventory numbers.

[James Hamling]

Quote from @Andrew Syrios:

Housing crash deniers, lol. 

I don't think I've seen a single person say that housing would only continue to increase. What most have said (including me) is that a 2008-style collapse is unlikely given a variety of factors. I've been expecting prices to at least level off and probably correct some from the ridiculous increase over the past two years, especially with rates going up. That would seem to be the most common sentiment amongst us "deniers"

 Isn't it so fantastic how a person can take any ridiculous narrative, and simply twist it to a stated standard of all who don't agree with it they must be "deniers"? 

"Big-Foot Deniers", "Flat Earth Deniers", "E. Warren is a Reptile Over-Lord Deniers"....... Ok, maybe 1 of those is actually accurate, lol. 

How about "Acknowledging the MATH and DATA of Real Estate Market, and what it is saying DENIERS".     Is R.E. pricing taking a step back? Well holly-heck I hope so because consolidation is a major GOOD sign, it means normalization and health. A 5-10% consolidation step back after 40%+ increase is anything but a "collapse". Gas shoots from $2gal too $5gal, then too $4gal do we all run around saying how gas prices have "collapsed"? 3 steps up and 1 back is still 2 steps up is it not? 

Any and all who say '08' repeat are simply without knowledge or flat out liars, it's just that simple. It's no different then saying were going to have a Great Depression run on the banks repeat. The ingredients for those things simply do not exist any longer, by intent and design. '08' was not a housing collapse, it was a financial system collapse that was expressed in the housing market, stock market, every market as it had a domino effect. 

The REAL big issue all should be talking about is the EDUCATION COLLAPSE! Or library collapse, how about that? Tag-lines run so many lives now, it's disturbing. 

"Housing crash deniers"....... Ugh, just ugh. 

[Andrew Syrios]

Quote from @James Hamling:

Quote from @Andrew Syrios:

Housing crash deniers, lol. 

I don't think I've seen a single person say that housing would only continue to increase. What most have said (including me) is that a 2008-style collapse is unlikely given a variety of factors. I've been expecting prices to at least level off and probably correct some from the ridiculous increase over the past two years, especially with rates going up. That would seem to be the most common sentiment amongst us "deniers"

 Isn't it so fantastic how a person can take any ridiculous narrative, and simply twist it to a stated standard of all who don't agree with it they must be "deniers"? 

"Big-Foot Deniers", "Flat Earth Deniers", "E. Warren is a Reptile Over-Lord Deniers"....... Ok, maybe 1 of those is actually accurate, lol. 

How about "Acknowledging the MATH and DATA of Real Estate Market, and what it is saying DENIERS".     Is R.E. pricing taking a step back? Well holly-heck I hope so because consolidation is a major GOOD sign, it means normalization and health. A 5-10% consolidation step back after 40%+ increase is anything but a "collapse". Gas shoots from $2gal too $5gal, then too $4gal do we all run around saying how gas prices have "collapsed"? 3 steps up and 1 back is still 2 steps up is it not? 

Any and all who say '08' repeat are simply without knowledge or flat out liars, it's just that simple. It's no different then saying were going to have a Great Depression run on the banks repeat. The ingredients for those things simply do not exist any longer, by intent and design. '08' was not a housing collapse, it was a financial system collapse that was expressed in the housing market, stock market, every market as it had a domino effect. 

The REAL big issue all should be talking about is the EDUCATION COLLAPSE! Or library collapse, how about that? Tag-lines run so many lives now, it's disturbing. 

"Housing crash deniers"....... Ugh, just ugh. 

It's funny, the stock market is down almost 20% from the beginning of the year yet no one is calling it a "collapse". Real estate could fall 20% and given that would wipe out only about 1 year of gains and since unlike 2008, most people are on low rate, fixed loans, put at least 5% down and have seen, in many cases, well over 20% increases in the value of their home; we would not see the spiral of foreclosures we saw in 2008. While I think a 20% reduction in price is unlikely (probably more like 5-10%) it still wouldn't qualify as a collapse given what's just happened. But I guess I'm just a denier so who cares what I think. 

[Chris Martin]

I must admit I didn't read all the posts. I did read @Will Barnard post on page 5(?) that seems to sum up current conditions. 

From a "crash' perspective, there can be a price crash, a sales crash, or combinations of those. I generally look at home builders or Fannie Mae to get a (hopefully) good picture. Page 28 of the Toll Brothers latest SEC quarterly report shows that the number of net contracts signed in the last quarter dropped year-over-year from 3154 to 1266, about a 60% drop. What saves them, and why many don't call a "crash", is the margins have improved (people still paying more) and backlog is still really high. I don't (haven't) see this changing in the next 18-24 months in leading markets. 

The Financial Crisis and GR set us up for where we are, aided by goofball supply issues, ongoing construction labor shortages, import tariffs on lumber, a pandemic, etc. It's not 2008, but our current state does hint at a systemic problem with permitting (so long a process), zoning, and planning. The about face on ADUs throughout the county is an indicator that law makers want to address the problem, but it seems to me that the "system" moves so slowly that the current housing supply problem, in growth areas at least, will persist for many years if not longer. 

My summary: certainly, a "crash" or major correction in number of units of new homes from mid-to-high $ builders. Not a price crash, just a (minor?) correction from the bizarre demand issues after the pandemic.  My 2 cents. 

[David Song]

Quote from @Jay Hinrichs:

Quote from @David Song:

Quote from @Bruce Woodruff:

Quote from @David Song:

I am tempted to offer at around 740k range. If there is no crash, the price stabilizes, that will be a good deal.

I see your point, but are you sure...?

Sure about what? If I know the future, I will not hesitate now.

 offer 700k quick close  have you gotten a trio on it to see whats owed ?? 

This morning, I checked this listing, the price dropped on sep 1st to $739k.

9 am: wrote an offer, $680k all cask, no buyer contingency, 10 day closing

Under contract at around 12 pm. Seller requests closing on 10/10, due to travel arrangements.

@Jay Hinrichs

Thanks for your suggestion and encouragement. This is a pretty good deal.

[Chris Clothier]

Quote from @David Song:

Quote from @Jay Hinrichs:

Quote from @David Song:

Quote from @Bruce Woodruff:

Quote from @David Song:

I am tempted to offer at around 740k range. If there is no crash, the price stabilizes, that will be a good deal.

I see your point, but are you sure...?

Sure about what? If I know the future, I will not hesitate now.

 offer 700k quick close  have you gotten a trio on it to see whats owed ?? 

This morning, I checked this listing, the price dropped on sep 1st to $739k.

9 am: wrote an offer, $680k all cask, no buyer contingency, 10 day closing

Under contract at around 12 pm. Seller requests closing on 10/10, due to travel arrangements.

@Jay Hinrichs

Thanks for your suggestion and encouragement. This is a pretty good deal.

 Nice job David!  Congratulations on getting this one under contract and especially at such a good price.  Good luck with this one.

[David Song]

Quote from @Chris Clothier:

Quote from @David Song:

Quote from @Jay Hinrichs:

Quote from @David Song:

Quote from @Bruce Woodruff:

Quote from @David Song:

I am tempted to offer at around 740k range. If there is no crash, the price stabilizes, that will be a good deal.

I see your point, but are you sure...?

Sure about what? If I know the future, I will not hesitate now.

 offer 700k quick close  have you gotten a trio on it to see whats owed ?? 

This morning, I checked this listing, the price dropped on sep 1st to $739k.

9 am: wrote an offer, $680k all cask, no buyer contingency, 10 day closing

Under contract at around 12 pm. Seller requests closing on 10/10, due to travel arrangements.

@Jay Hinrichs

Thanks for your suggestion and encouragement. This is a pretty good deal.

 Nice job David!  Congratulations on getting this one under contract and especially at such a good price.  Good luck with this one.

 Thanks. Chris. Enjoy the Labor Day long weekend.

[Paul Sofia]

Quote from @Greg R.:

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  

There is no  house of cards here to come tumbling down.

Ok, so I don't deny the amount of regs re: lending, but let's be honest. Good lenders are able to manipulate DTI and bend the numbers to get people into loans that they can barley afford. Let's not pretend that all the people who purchased in this over-inflated market are super stable and can't foreclose. I personally know people who are living check to check and who bit off more than they could chew thinking that they had to buy during the recent housing craze. 

So I respectfully disagree... there is a house of cards that will come tumbling down.

 No doubt in my mind.  The BlackRocks of the world artificially inflated the market.  Now they have stopped buying in 38 markets...hmm.  Let's not forget the commercial real estate.    Rates will go up again this month.  

Much danger ahead.

[Will Barnard]

Quote from @James Hamling:

Quote from @Andrew Syrios:

Housing crash deniers, lol. 

I don't think I've seen a single person say that housing would only continue to increase. What most have said (including me) is that a 2008-style collapse is unlikely given a variety of factors. I've been expecting prices to at least level off and probably correct some from the ridiculous increase over the past two years, especially with rates going up. That would seem to be the most common sentiment amongst us "deniers"

 Isn't it so fantastic how a person can take any ridiculous narrative, and simply twist it to a stated standard of all who don't agree with it they must be "deniers"? 

"Big-Foot Deniers", "Flat Earth Deniers", "E. Warren is a Reptile Over-Lord Deniers"....... Ok, maybe 1 of those is actually accurate, lol. 

How about "Acknowledging the MATH and DATA of Real Estate Market, and what it is saying DENIERS".     Is R.E. pricing taking a step back? Well holly-heck I hope so because consolidation is a major GOOD sign, it means normalization and health. A 5-10% consolidation step back after 40%+ increase is anything but a "collapse". Gas shoots from $2gal too $5gal, then too $4gal do we all run around saying how gas prices have "collapsed"? 3 steps up and 1 back is still 2 steps up is it not? 

Any and all who say '08' repeat are simply without knowledge or flat out liars, it's just that simple. It's no different then saying were going to have a Great Depression run on the banks repeat. The ingredients for those things simply do not exist any longer, by intent and design. '08' was not a housing collapse, it was a financial system collapse that was expressed in the housing market, stock market, every market as it had a domino effect. 

The REAL big issue all should be talking about is the EDUCATION COLLAPSE! Or library collapse, how about that? Tag-lines run so many lives now, it's disturbing. 

"Housing crash deniers"....... Ugh, just ugh. 

Thanks for saying what I was thinking. Often times I think these posts are ways and means for people to up their post count with silly banter and overzealous opinions that lack foundation or facts while others twist facts to meet their narrative. Opinion this, opinion that. Your wrong, I’m right, I’m right your wrong, etc. 

To argue this topic, one first needs to actually define what “re market crash” is and that has slipped through this entire thread, although some wise folks have touched on the fact that the definition was not put out there.
over the past 2 years, many areas of the CA RE market have gained in excess of 30%. Most buyers placed at least 3.5% down and all cash buyers were the highest % in history that I can find. So with that and the other facts I pointed to in page 5 of this thread, even a massive 25% correction downward leaves homebuyers from 2020 with equity and those in 2021 slightly under value but with record low mortgage rates that they will certainly retain and not scream the sky is falling I have to sell.

I pointed out several times in several threads this year that the markets that will correct and will get slammed harder than any other would be the entry level starter homes (often first time buyer homes). These markets which are in all states, but generally speaking, I’m referring to So Cal, Vegas, Phoenix, Austin, etc - just to name a tiny few, will all feel the effects of the correction under way the most. The $2M+ level homes here in So Cal will likely also correct but those buyers have many more ways and means than the first time home buyer so I suspect they will not correct as hard or as fast. This portion is just my opinion based on facts I see in front of me, I could certainly be wrong and all markets could drop 20%. Even if that happens, it’s not a 2008 or anything close to it.

As investors, I believe we should continue buying multi family properties and hoarding cash and as low of a cost debt as you can find in preparation to buy the dip, which may be 2023. If the dip in RE (correction, not crash) is fast, it will likely be a V dip. The geniuses running government will certainly start spewing to the media that they will have to start lowering interest rates to pick back up the economy and RE market. So buying at lower prices with higher interest rates (or cash) and then refi those loans after rates come back down from what will likely end up in the 7’s or 8’ depending on how far J Powell takes it could be a great recipe for wins in your portfolios. 

[Will Barnard]

Quote from @Chris Martin:

I must admit I didn't read all the posts. I did read @Will Barnard post on page 5(?) that seems to sum up current conditions. 

From a "crash' perspective, there can be a price crash, a sales crash, or combinations of those. I generally look at home builders or Fannie Mae to get a (hopefully) good picture. Page 28 of the Toll Brothers latest SEC quarterly report shows that the number of net contracts signed in the last quarter dropped year-over-year from 3154 to 1266, about a 60% drop. What saves them, and why many don't call a "crash", is the margins have improved (people still paying more) and backlog is still really high. I don't (haven't) see this changing in the next 18-24 months in leading markets. 

The Financial Crisis and GR set us up for where we are, aided by goofball supply issues, ongoing construction labor shortages, import tariffs on lumber, a pandemic, etc. It's not 2008, but our current state does hint at a systemic problem with permitting (so long a process), zoning, and planning. The about face on ADUs throughout the county is an indicator that law makers want to address the problem, but it seems to me that the "system" moves so slowly that the current housing supply problem, in growth areas at least, will persist for many years if not longer. 

My summary: certainly, a "crash" or major correction in number of units of new homes from mid-to-high $ builders. Not a price crash, just a (minor?) correction from the bizarre demand issues after the pandemic.  My 2 cents. 

Here is another well laid out set of facts. I would also point out that these numbers are national and each specific local real estate market will be affected differently depending on their past and present RE conditions. If your market is a lower priced “entry level” market where prices have appreciated higher and faster and new construction was booming, than any point in the last 30 plus years, you can expect that specific area to correct steeper than other areas.
As an example, CA market as a whole has a housing shortage and despite the media BS of the great CA exodus (which facts show is a complete falsehood), the fact that new builds are rapidly dropping will only increase that shortness of supply for future adding yet another reason to support a V shaped correction then right back up when you combine the likelihood of interest rates climbing higher, then reversing downward in the future. If all that holds true, CA could experience yet another super buying opp for the savvy investor.

[James Hamling]

Ok, let's take this bull by the horns and see if we can't get some vision going of angles other then tail-side thoughts. (see what I did there, Bull, stuff at tail side.... huh, funny stuff right...... Bull, what comes out by the.... ok, moving on). 

It seems to me countless are lost in tree focus vs forest focus. 

There are 3 fundamental human needs; Food, Water & Shelter. These are the items that are beyond question, they are NON-optional in the "have" category, the only question to the attainment of them is "HOW" and "WHAT". 

Every post and conversation I see on BP talking about housing "collapse" conveniently dismisses the 1 most simplistic basic factor to such, THE PEOPLE. Every collapse argument ignores the dislocation of persons from the properties that will "flood the market". Where do these people go? Tent cities? 

An argument for dislocated persons is an argument for added rental demand. AND in a unit shortage for renters, like today, an argument for added renters is an argument for rental unit demand. Following the bouncing ball here? So it all comes full circle that even the arguments for collapse negate themselves as being an actual argument of unit utilization SHIFT. Shift does not intone a pricing collapse. 

In '08' we had a significant EXCESS of housing supply, this significant excess provided a "landing pad" for renters, who rapidly gobbled up that supply. If not some pontificating "old-timer" like myself, just do some research on on '06'-'07' market conditions of ghost-town-developments.  

That "ingredient" does not exist today. We are sitting on a massive net unit shortage, meaning we don't have that buffer. No buffer means purchase pressure simply shifts. Every family who can't buy a home, is another family renting. 

Many markets are sitting in same position as my current core market of focus, with a solid sub 3% vacancy. Let's say someone has a magic "foreclosure" wand at hand and waives it, how fast does that vacancy rate drop to 0%? Tip, a lot less units then = 15% drop in median home price. So you wave that wand, vacancy drops too 0, what happens next? Yeah, right, rental rates sky rocket, because of all the demand from dislocated persons. And skyrocketing rental rates with epic demand = a frenzy of investor activity to provide housing and reap the gains. 

Again, to substantiate a claim of 30% drop in median housing price, one has to substantiate a claim of HOW, which most say mass foreclosure so OK, where do those people go? IKEA housing? 

Lastly, the Grand-Daddy of all X-factors, the politics of the day. We are heading into election cycle, a hotly debated one by all measure. Every politician knows it's there head on the chopping block if housing is still such an issue, or worse, at ballot time. And they have this epic tool in the back pocket called a 40/50yr mortgage.     In 1 simple action, even executive if want be, Fannie/Freddie can be directed to normalize the 40/50yr mortgage via securitization of such (remember "were from the government, and where here to enslav.... ehe help, yes HELP you").

With that 1 simple action, let's call it "The Home Affordability Action", like magic buying a home is "affordable". The price, yeah, ignore how housing price just jumped 28%, that doesn't matter, nor does the 50 years, peff, fifty-schmifty, LOOK AT THAT PAYMENT, oooohhh, aaahhhh, see, you now can get approved to buy that home. 

Mischief managed. 

The sheeple dance with glee as there all getting homes, bankers dance with glee as they just got generations of human ATM's, wallstreet loves it, lemmings love it, builders love it, all win. Well, almost, I mean, the sheeple are dancing down death-row financially speaking but look at how happy they are doing it! lol. 

So yeah, that's my bet, I am betting on politicians to do what they do best, sell rat poison labeled as candy-corn, that solves a problem today by making a much bigger one tomorrow. It's a simple prediction because it's literally how this entire country operates and has operated, kick-the-can. 

[Bruce Woodruff]

Quote from @Will Barnard:

Although in every recent year, Cal experiences a net population loss....you can tweak the number s any way you like, but they are the numbers.....

(From Cal Matters, a non-partisan news org. Bold is mine)

“California appears to be on the verge of a new demographic era, one in which population declines characterize the state,” PPIC demographer Hans Johnson writes in a new analysis. “Lower levels of international migration, declining birth rates, and increases in deaths all play a role. But the primary driver of the state’s population loss over the past couple years has been the result of California residents moving to other states.”

[Carlos Ptriawan]

Quote from @Bruce Woodruff:

Quote from @Will Barnard:

Although in every recent year, Cal experiences a net population loss....you can tweak the number s any way you like, but they are the numbers.....

(From Cal Matters, a non-partisan news org. Bold is mine)

“California appears to be on the verge of a new demographic era, one in which population declines characterize the state,” PPIC demographer Hans Johnson writes in a new analysis. “Lower levels of international migration, declining birth rates, and increases in deaths all play a role. But the primary driver of the state’s population loss over the past couple years has been the result of California residents moving to other states.”

 And now interest rate is 6%, this post is becoming even more important.

I remember someone in BP posted a month ago that NAHB predicts interest rate in 2022/2023 is 6%. Now it's the reality. We don't know what would happen with rate so crazy like this. 

Refinance is totally dead now. People doesn't want to sell their home. Home Depot started laying off people.

[Jonathan R McLaughlin]

@Carlos Ptriawan I remember people dancing in the streets at 6%. These rates are much closer to normal than crazy

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

Quote from @Will Barnard:

Although in every recent year, Cal experiences a net population loss....you can tweak the number s any way you like, but they are the numbers.....

(From Cal Matters, a non-partisan news org. Bold is mine)

“California appears to be on the verge of a new demographic era, one in which population declines characterize the state,” PPIC demographer Hans Johnson writes in a new analysis. “Lower levels of international migration, declining birth rates, and increases in deaths all play a role. But the primary driver of the state’s population loss over the past couple years has been the result of California residents moving to other states.”

 And now interest rate is 6%, this post is becoming even more important.

I remember someone in BP posted a month ago that NAHB predicts interest rate in 2022/2023 is 6%. Now it's the reality. We don't know what would happen with rate so crazy like this. 

Refinance is totally dead now. People doesn't want to sell their home. Home Depot started laying off people.

 Carlos, you totally missed this EPIC data point which 100% clarifies there is NO collapse threat going on! Refi's have dropped almost 90%! If there was any "collapse" risk going on refi's would be UP, not down, people would be converting equity too $$$$ to make payments, right. 

So what does a near 90% drop in refi's say? That people DON'T need the $$$$, right. 

So not only do people NOT need the $$$$, there also sitting on that nice "piggy-bank" of $$$$ called equity. 

What we are experiencing in the market is called STAGFLATION, not collapse, not recession, STAGFLATION.     And yeah, I have been forecasting this for some considerable time, as i predicted google it, there is a chorus of industry "captains" now declaring the same; STAGFLATION. It's here, it's a reality, and it's NOT collapse.

High prices, low volume. STAGFLATION. 

[Tony Kim]

Quote from @Bruce Woodruff:

Quote from @Will Barnard:

Although in every recent year, Cal experiences a net population loss....you can tweak the number s any way you like, but they are the numbers.....

(From Cal Matters, a non-partisan news org. Bold is mine)

“California appears to be on the verge of a new demographic era, one in which population declines characterize the state,” PPIC demographer Hans Johnson writes in a new analysis. “Lower levels of international migration, declining birth rates, and increases in deaths all play a role. But the primary driver of the state’s population loss over the past couple years has been the result of California residents moving to other states.”

Good article! The author also states that California has been losing residents for the past two decades. So why has real estate outperformed the rest of the country? I'm not trying to get into a pissing contest with you because I know you're very passionate in your anti-California views since you've sold everything here and relocated to Arizona (or maybe it's the other way around). Nothing wrong with that though! I hate California with a passion too! LoL. But seriously.....I'm just genuinely curious why California has done so well despite the population decline. I think the other parts of the article might help explain:

Quote from the article:
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People who move to California are different from those who move out. In general, those who move here are more likely to be working age, to be employed, and to earn high wages—and are less likely to be in poverty—than those who move away.

Those who move to California also tend to have higher education levels than those who move out—an especially important factor given the state’s strong need for college graduates. Notably, this gain in educated residents is concentrated among young college graduates (generally, adults in their 20s) looking for opportunities as they start their careers. In recent years, though, the net flow of college graduates has slowed considerably, and perhaps even reversed during the pandemic (but still remains positive for young college graduates).

Also of note: people who move to California have higher incomes than those who move away. Some have argued that the opposite is taking place—that California’s relatively progressive and high personal income tax rates drive out higher-income residents. But the fact is that California has been losing lower- and middle-income residents to other states for some time while continuing to gain higher-income adults. In the past five years the flow of middle-income residents out of the state has accelerated and net gains among higher income adults have ceased.

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So the above kinda confirms what my impression is of the folks that are leaving California. And I will most likely be part of that group that leaves eventually. We have real estate overseas in South Korea and will probably spend at least 50% of our time there in retirement. Meanwhile, my LA properties will continue collecting on its overinflated rent, lol!

And to speak from an anecdotal perspective, I have a few good friends that have left California due to the cost of living and struggled to buy and maintain a home. In contrast, my buddies who are doing well and earn a nice salary continue to live in the Bay Area, Orange County, West LA, etc. They hate the politics here and complain, but they also acknowledge that it's one of the best places to live if you have the means. I also have younger co-workers that are considering working remotely in Texas or somewhere in the east coast because they cannot afford to buy a home here in So Cal. 

Also, not sure if this anecdote is relevant, but I grew up in a city that was very white when I was young, but is now 98% hispanic. The city did a series of articles on the dynamics behind this change in demographics. Apparently, the small remaining 2% did not have the means or have the career success to partake in the 'white-flight' to neighboring Buena Park, Irvine, etc and are barely hanging on by a thread and just relying on the low cost of living from Prop 13. Can make your own conclusions on the above. 

Also, as someone who works in venture capital specializing in tech companies, I can say without hesitation that there is absolutely zero slow-down in the technology and innovation that originates in California. We as a country need to watch out though because there is a staggering amount that is also originating in places like Singapore, India, China and Australia. And finally, I used to work for BlackRock but left about six months ago. They have huge plans to build out their presence in California. 

[Carlos Ptriawan]

What we are experiencing in the market is called STAGFLATION, not collapse, not recession, STAGFLATION.     And yeah, I have been forecasting this for some considerable time, as i predicted google it, there is a chorus of industry "captains" now declaring the same; STAGFLATION. It's here, it's a reality, and it's NOT collapse.

High prices, low volume. STAGFLATION. 

 Yes it's,pretty much little to no real estate activity.  The gap between CD investment and risky real estate investment is shrinking compare to two years ago.