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. 

[James Hamling]

Quote from @J. Mitchell Bernier:

Quote from @James Hamling:

Quote from @J. Mitchell Bernier:

@James Hamling

Since you are still actively buying in this market, what are you buying right now? I am curious on what strategy you are sticking too with all the economic uncertainty. Is there a certain price point you are staying in? Is it buy and hold? Residential or Commercial? What are you doing in your market? 

Really liking this discussion! 

 For the most part staying away from commercial right now. Caps have been driven down to levels too tight for anyone sub $100m in holdings, with too much risk exposure in cap-x expenses being realized. Still open to value-add if/when opportunity pop's up but, sellers have better buyers and I don't blame them for taking those insane offers. 

Staying away from flips unless there with a hold component of C4D component for exit strategy. Similar situation, costs are at level where time costs too much usually. 

AAA strategy is still a rock solid one. This is one focused more on portfolio growth, vs NOI.

On cusp of jumping back into some Sec8 positions. Things are looking really good in that segment again, one step better and I would be going heavy on it. The operational side is a pain in the azz though, that's all that's holding me back really. 

I have a few big things in works, significant strategic alliances to launch a C4D program, at scale. 

I am not really the best read for the "average Joe", I have some large things in works where if I didn't have those I would be engaging more actively in other routes. I would be way more into Sec8 and ancillary market investing for sure. Especially those where price ascension has not hit at level like are primary market, and one can get into properties below replacement value. It's a time play. 

There is really more opportunities then I have time or $. More so time because $ can always be found. 

Primary focus is on single family and townhomes. Love love love em. Townhomes is one so many over-look, and please feel free to keep overlooking, lol. 

As for price point, I am staying "in the squeeze", which will vary market to market. No real interest in anything $700k+ unless it's got solid STR analysis. On those I work out things on terms anyways so to mitigate risk exposure. Can have all the data in the world on a STR but you really don't know until your at it, results may vary is the rule of the day.

 C4D? AAA? You got help me out with these haha

I am also a big fan of Section 8 homes. We are continuing to evaluate our specific holdings and see how we can move our properties into those as well. 

 C4D - Contract For Deed. 

AAA - It's a strategy I developed and coined "AAA" as it's deployment is for A class tenant, in A class property, of an A class market. With Cavet of "path-of-progress". Several other specific details to it but that's the jest. Most often new built properties, with liquidation at yr7. It avoids realizing a cap-x factor, and facilitates depreciation to maximal effect. Not a strategy for all but for some, it's amazing returns. Best for those who need that depreciation. 

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

[Daniel Martinez]

No one can predict that houses will go up or down. Just be prepared for whatever happens.

[Carlos Ptriawan]

Looking at the chart, that would seem the case *BUT* not nationwide I guess. 

Every market has a different sensitivity to rate adjustment.

Indianapolis can survive with a mortgage rate to 10%, but not with San Diego or Bay Area. That's why it's mathematically expected that even Zillow is already showing Bay Area already experienced -10% drop/correction/price reduction/crash/whatever. 

An area with 2 mils average house will react differently with $300k avg price home when interest rate changes occured. This is something that reator must know too. We have the house, that's correct, but we can only pay the mortgage if we have the job and that's with dual income u make in high 100k.

No job no mortgage no house. California owner is the most vulnerable here.

[Carlos Ptriawan]

Quote from @Daniel Martinez:

No one can predict that houses will go up or down. Just be prepared for whatever happens.

 Come on ...... we can land in mars now, of course we will know if the house market will go up or not.

market will go up when: there're more buyer willing to buy from the supply side
market will go down when there're more seller available.

Currently it's in the position where seller > buyer ; but the size is still small.

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

 So Nationwide 20% is a bit on my heavy side right now but I'd call it in the realm of feasibility. I'm personally planning for 10-15% adjustments. So lets meeting the middle and call it 15%. 

So we agree housing slows and adjustments down happen. Why do you think that adjustment down in values, on equity mind you,  for most buyers is going to matter? With rates high, inventory low, and rent sky high (rent is also still going up) why is it you think people are suddenly going to be dropping homes on the market? 

We have none of the factors that led to it. People will be pissed just like they are in the markets but it won't change much massively on a macro level. Sure Cali and some of those west coast markets are in for a hit but a lot of east coast is still up a few % points last few months in values. 

BTW unemployment can go up 50% and we still will be at historic lows. Things will get worse and I'm buying expecting 10% adjustments on the short term. But why is that going to cause the housing market to crash?

[Bruce Woodruff]

Quote from @James Hamling:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Yep, that's exactly what may happen...

 How? What mechanism is going to create a forced sale environment? 

 No mechanism in the textbook sense that you mean. Just as I said in a post above, these things often do not need a textbook reason. Wars do not follow those rules either....they start because they start sometimes, no reasons. Same with the economy IMHO. Your views will probably differ and that's fine.

[John Carbone]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

 So Nationwide 20% is a bit on my heavy side right now but I'd call it in the realm of feasibility. I'm personally planning for 10-15% adjustments. So lets meeting the middle and call it 15%. 

So we agree housing slows and adjustments down happen. Why do you think that adjustment down in values, on equity mind you,  for most buyers is going to matter? With rates high, inventory low, and rent sky high (rent is also still going up) why is it you think people are suddenly going to be dropping homes on the market? 

We have none of the factors that led to it. People will be pissed just like they are in the markets but it won't change much massively on a macro level. Sure Cali and some of those west coast markets are in for a hit but a lot of east coast is still up a few % points last few months in values. 

BTW unemployment can go up 50% and we still will be at historic lows. Things will get worse and I'm buying expecting 10% adjustments on the short term. But why is that going to cause the housing market to crash?

I’m saying 20 percent, but there are several people on here saying they won’t drop hardly at all due to no supply and people having so much equity. I’m not predicting the end of the world or housing Armageddon. Stocks are down 30-50 percent and there hasn’t been a bankruptcy. My whole point was that the covid equity gains are fake equity, and it will disappear faster than they gained. The people who will be bag holders are the ones who bought from July onward, as they will have an overpriced asset and a high interest rate. They will be fine in the long run sure, but better off waiting it out. There’s no reason to buy a house right now if you haven’t already, momentum has shifted. The economy is just unwinding the Covid gains, and housing is next on the chopping block. 

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

 So Nationwide 20% is a bit on my heavy side right now but I'd call it in the realm of feasibility. I'm personally planning for 10-15% adjustments. So lets meeting the middle and call it 15%. 

So we agree housing slows and adjustments down happen. Why do you think that adjustment down in values, on equity mind you,  for most buyers is going to matter? With rates high, inventory low, and rent sky high (rent is also still going up) why is it you think people are suddenly going to be dropping homes on the market? 

We have none of the factors that led to it. People will be pissed just like they are in the markets but it won't change much massively on a macro level. Sure Cali and some of those west coast markets are in for a hit but a lot of east coast is still up a few % points last few months in values. 

BTW unemployment can go up 50% and we still will be at historic lows. Things will get worse and I'm buying expecting 10% adjustments on the short term. But why is that going to cause the housing market to crash?

I’m saying 20 percent, but there are several people on here saying they won’t drop hardly at all due to no supply and people having so much equity. I’m not predicting the end of the world or housing Armageddon. Stocks are down 30-50 percent and there hasn’t been a bankruptcy. My whole point was that the covid equity gains are fake equity, and it will disappear faster than they gained. The people who will be bag holders are the ones who bought from July onward, as they will haven’t  an overpriced asset and a high interest rate. They will be fine in the long run sure, but better off waiting it out. There’s no reason to buy a house right now if you haven’t already, momentum has shifted. The economy is just unwinding the Covid gains, and housing is next on the chopping block. 

So I said I planned for 10% minimum - and expecting up to 15% short term - but the market I last bought in was still growing, although slowly. 

So that leaves us in agreement valuation will drop and no Armageddon. As to the rest of it I’ll say a couple things:

1) Covid valuation increase is also tied to a change in labor. Wages have grown even pre-covid and with covid we entered a labor crunch (which we had pre-covid btw also just not as bad). A lot of boomers were retiring and not enough people to replace - and Covid accelerated it with people leaving early. Labor participation is down and not likely to return. I agree some of covid was accelerated but not all.

2) Inflation has raised prices on everything. Even as we go back down inflation will also natural push prices up. Lets say 5% minimum. That makes that 20% reduction even more unlikely.

3) lets not forget regional differences. Have you look at the data from 08? My own state only loss 13%. It was but a blip in many ways. You pull FL, NV, Cali, AZ out and you would see drastic differences in the national housing adjustment. Two decent summaries: by state breakdown https://www.corelogic.com/wp-c... and map view of the heavy hit states: https://www.washingtonpost.com...

4) To buy or not to buy is 100% personal. I’ll say this if we agree rates will keep going up you’ll end up paying the same now or in 12 months it’s just where the money is going. So values may drop but interest goes up. Also money sitting in bank is losing value. One year of rents on the property offsets 10% loss for me. If you figure delaying  buying 24-36 months out not really worried may as well buy now and I’ll want to buy in another 24 anyway. And more importantly it’s not like I’m planning on selling so the equity will grow back. 

Now if you want to argue it’s not the best time to flip homes and there is more risk, I’d agree 100%. Doesn’t mean it can’t be done but more risk.

Anyway even in 2008 the big pain was in key parts of country. Pain else where yes, but we had far different lending practices that made it even worse. I’m expecting 10-15% just not worried about it. I’m not flipping and that being the case not planning on selling anytime in the near term. 

[Carlos Ptriawan]

So I said I planned for 10% minimum - and expecting up to 15% short term - but the market I last bought in was still growing, although slowly. 

Whether it's 10% or 20% really depends WHEN Fed will pivot.

According to them, they will pivot if unemployment is more than 5 percent. In case this statement is true then we may see two scenarios:

If the labor market is very strong and no layoffs, the Fed can do this pattern "/--------\" for quite some time and it's possible
that housing will experience more turmoil rather than the job market because fewer buyers will be available in the market.

The original scenario is the job market has 2% further unemployment that causes immediate Forced Sales and this will increase active inventory. When unemployment hit 5% hopefully Fed will pivot. 

[John Carbone]

Quote from @Sebastian Marroquin:

(For starters let me say… that the more I learn about the real estate market and study or read about the trends, the more I know that I don't really know anything… ). 

With that said, I think we all know that both the question initially posted on here and the responses to the question either believing or not believing a crash or that a huge correction is happening, is merely our opinion, right…?  Or can anyone on here really bet their life on a crash? :) you would have to commit to a definite year for you to be right… bc simply saying that "sooner or later there will be a crash" would be correct, but I can also tell you that "sooner or later we will have a big earthquake in CA…. (at least in 1 to 300 years) and I would be right! 

Therefore, I know we are all just having fun expressing our opinions and guessing on here at this point! Period 

I'm always curious to know - of the people that think a crash is coming 100%: why not sell your home or homes now and - stash the money under your mattress and then buy for .30 to .50 cents on the dollar? Why not (maybe because we ALL don't really know what's going to happen). 

I have seen many more buyers being cautious when buying out here. And I have seen other competing buyers beating us by $200k on a 1,000 sq ft home, so I know there were many- many buyers over paying. Will that affect them though… If that home goes from $1 million to $800k next year, but they are comfortable with their payment, have a stable job, and have emergency funds? Will they be affected? 

Supply is a factor, Equity is a factor and inflation is a factor. 

Many people have over $200k in equity: and Many in LA have $300k to $500k or more in equity. Is some of that inflated bc of the last 2 and 3 years. yes. So why are we seeing so many price reductions? 

Over zealous sellers that over priced their home. So if a home in 2018 was valued at $1 million and by 2020 the home went up to $1.5 and by 2021 to $1.7 and in 2022 a new seller prices the home at $1.8 and ends up reducing finally to $1.4 (has the market crashed or was that a correction?) 

and in the next year that home goes to $1.2 (has the market crashed when on average over the years that home has seen 5% to 7% over all value increase). 

and from there - it starts appreciating between 3% to 5% for the next 8-10 years 

People that do not have good counsel, or do not want to present their home in the best light (renovations etc ) will sell for much less. 

Homes that are well priced, look good, are marketed well are still selling fast and for profit. 

Why do we always go back to 2008 when talking about a coming crash? I get that we would love to learn from history, but whose to say that another different pandemic won't come… or an earthquake, or a war…. (ammunition for the pessimists out there). 

I choose to be conservative, optimistic and think that at this time, we can still pull through. Supply is extremely low and you have to be proactive in your saving. Can the market crash.. of course. Will it? please tell me if you know! 

(No conclusions were reached here…  :) ) 

While I am 100 percent confident prices will drop 20 percent (assuming rates stay high through 2023), I’m not selling my holdings now. I also never counted my “equity” gained because I knew eventually rates would rise and it would eliminate it.  The reason I won’t sell is because my rentals are making a substantial profit a year, and if I sold I’d have less cash flow, pay capital gains taxes, and high real estate fees to sell. When rates go back down, values will recover. The whole point is, like I’ve said before, if someone doesn’t own a house already they shouldn’t be buying now. I plan on adding to my portfolio next year when the prices drop. In the meantime I’m just accumulating dollars until that happens. If someone offered me a binary wager 18 months out, with fed funds rate between 4-5 (or higher), that median housing values would be down 20 percent I’d take them up on that offer for a substantial amount of money. 

@Michael Wooldridge  yes housing is definitely local. I’m not going to predict every market. @Carlos Ptriawan seems to have really good data points on specific markets. What I’m saying is nationwide usa median home values will fall. I think 20 percent, but what usually happens when values fall is people start to panic and the market gets “oversold” that’s why I think upwards of 30 percent drops is definitely in play. We don’t know how the labor market is going to play out. We are being told jobs will be lost by the Fed, I believe them. What I don’t know is how much will that impact be, it could be immaterial or it could be substantial. If it’s the latter then it could be a crash over 30 percent (I’m not predicting this though). You want to buy an asset, including housing, at the lowest price possible even if rates are 7-9 percent. You are stuck with that purchase price. Rates will go back down eventually and you can always refinance when that happens. If someone buys now at 7 percent rates and values drop 20 percent, you will never be able to refinance when rates drop because you will have no equity (negative actually.) Everything is based on personal preferences, but buying now is very dangerous. If someone has been renting for years already and considering entering now as first time home buyer, wait until things settle down here, I’m personally going to be buying when the fed gives guidance that they will be cutting rates. Home values will be in the decline at this point and sellers will be in a panic, I’ll buy at a lower price, and a year or two later when rates go back down I’ll refinance.

[Michael Wooldridge]

@Carlos Ptriawan - so the fed wants to slow down inflation, lets be clear about that. They believe it will only really stop as unemployment goes up, yes. I also happen to agree since we just need people with less money. THat said you’ll see more layoffs in next 3 month and also early next year. Companies are already planning them. The real question is how much can the market absorb. Even if it hits 5% though it’s still historically low unemployment.  

As to housing there’s still going to be people with money out there so we’ll see how that goes - lot of cash deals still in my local areas. 

@John Carbone Considering how much Cali, NV, AZ and FL drove last recession not super worried about personally running into 20% percent. but then I’m also not going in with no money down (or low money down either) if it actually reaches 2008 levels of 20-30% (which is what you are suggesting) it won’t impact my ability to refinance. All that aside I don’t know where you see the panic selling. What is going to cause people to panic sell and where do you expect them to go? What’s the play in it for them? This isn’t stocks where fear can allow for quick panic sales. I just don’t get what makes you think it will happen and most smart investors will ride it out and if it’s people living in homes where do you expect them to go?

Finally I also have to be honest. My approach to this gig is different than others. My original long term rentals more than pay for my primary mortgage today (new home we built). Those LTR rentals wouldn’t even hit somebody’s radar but with my extra cash I’ve essentially built alternative 401k on principal and the rent makes me have no debt when buying new homes. These days When I buy now I’m mostly worried about long term play 10+ years and almost all the income gets reinvested into new properties. Essentially my w2 is funding my retirement (or early retirement). So my risks are lower with the money down and I don’t need big cash flow in short term, although I obviously seek it. If I was stacking debt on top of each other and needed everything to run perfectly smoothly it would be different.

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

@Carlos Ptriawan - so the fed wants to slow down inflation, lets be clear about that. They believe it will only really stop as unemployment goes up, yes. I also happen to agree since we just need people with less money. THat said you’ll see more layoffs in next 3 month and also early next year. Companies are already planning them. The real question is how much can the market absorb. Even if it hits 5% though it’s still historically low unemployment.  

As to housing there’s still going to be people with money out there so we’ll see how that goes - lot of cash deals still in my local areas. 

@John Carbone Considering how much Cali, NV, AZ and FL drove last recession not super worried about personally running into 20% percent. but then I’m also not going in with no money down (or low money down either) if it actually reaches 2008 levels of 20-30% (which is what you are suggesting) it won’t impact my ability to refinance. All that aside I don’t know where you see the panic selling. What is going to cause people to panic sell and where do you expect them to go? What’s the play in it for them? This isn’t stocks where fear can allow for quick panic sales. I just don’t get what makes you think it will happen and most smart investors will ride it out and if it’s people living in homes where do you expect them to go?

People not seeing it because it's still in a very early trend, but if you see indicator like Corelogic Case-Shiller indices, Zillow Home Estimate,etc...nationwide price reduction already happening since July. The active inventory between Jan-Mar (before QT) and after Jun-Aug(after QT) is drastically increased. This can easily be deciphered after reading the early trend indicator.

....it's just matter of how deep the price reduction would be.

Case-Shiller month-to-month index is already showing August 2022 is equal to Jan 2007 (the peak of GFC 2008 crash) where the index is negative. It took 3 years for market to recover.

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

@Carlos Ptriawan - so the fed wants to slow down inflation, lets be clear about that. They believe it will only really stop as unemployment goes up, yes. I also happen to agree since we just need people with less money. THat said you’ll see more layoffs in next 3 month and also early next year. Companies are already planning them. The real question is how much can the market absorb. Even if it hits 5% though it’s still historically low unemployment.  

As to housing there’s still going to be people with money out there so we’ll see how that goes - lot of cash deals still in my local areas. 

@John Carbone Considering how much Cali, NV, AZ and FL drove last recession not super worried about personally running into 20% percent. but then I’m also not going in with no money down (or low money down either) if it actually reaches 2008 levels of 20-30% (which is what you are suggesting) it won’t impact my ability to refinance. All that aside I don’t know where you see the panic selling. What is going to cause people to panic sell and where do you expect them to go? What’s the play in it for them? This isn’t stocks where fear can allow for quick panic sales. I just don’t get what makes you think it will happen and most smart investors will ride it out and if it’s people living in homes where do you expect them to go?

People not seeing it because it's still in a very early trend, but if you see indicator like Corelogic Case-Shiller indices, Zillow Home Estimate,etc...nationwide price reduction already happening since July. The active inventory between Jan-Mar (before QT) and after Jun-Aug(after QT) is drastically increased. This can easily be deciphered after reading the early trend indicator.

....it's just matter of how deep the price reduction would be.

Case-Shiller month-to-month index is already showing August 2022 is equal to Jan 2007 (the peak of GFC 2008 crash) where the index is negative. It took 3 years for market to recover.

So I think we more or less agree here. You’ve been able to see a pivot in the market since June (slow but could you see it in some areas). As to August I just don’t see that as unexpected - combination of the huge run-up and then a shock in rates/economic activity that was going to pause things. You also see it primarily in the bigger markets out west that saw far larger gains than many other parts of country. 

I’m expecting September to actually be more down because people really paused. But that combination of rates increases while values had been going up extreme, would correspondingly result in a big change when it did slow down.

Market did take 3 years to recover but we had a glut of inventory from the builders originally (builders began pulling back awhile ago and slowing down big time) and we had a lot of foreclosures. None of that really tracks this time around unless we have massive job losses.

So we don’t disagree on direction and/or even that we hit a peak this summer. Really we are just arguing how deep it goes and I don’t see anything to cause it to spiral like subprime did. 


 

[Michael Wooldridge]

Funny just came across this tonight.  Now the Fed reserve is talking about the 30% still working remote will keep housing demand higher than it was before Covid. 

https://www.marketplace.org/20...

[Matt Kalish]

just saw this article tonight, the housing bubble folks in here may be on to something big.

https://www.zerohedge.com/mark...

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

 Aside from all the other stuff, exactly what is going to put a person into "distress"? 

Still not answer to say what is going to FORCE persons to sell, at descending prices. 

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

 Aside from all the other stuff, exactly what is going to put a person into "distress"? 

Still not answer to say what is going to FORCE persons to sell, at descending prices. 

People always sell. Also, once people see the news that the case Schiller index fell for the first time in a decade, and at the fastest rate in history along with their 401Ks going down….all it takes is a few percent of people to decide it’s “sell time” and you will have home prices fall on low volume. You also have a lot of new construction in your market in the suburbs. Developers are already slashing prices out there, and we all know that the home builders always offer upgrades and closing costs first before they do a price cut to keep up the “mirage”. Look in your own backyard. It’s coming. The pool of buyers has dried up, nobody wants the overpriced real estate at these prices with rates so high. 

A job loss, people will lose jobs. The fed told us that. Elizabeth warren already making the rounds about it. When you have these people needing to sell to realize their equity they are met with a buyer pool that doesn’t qualify anymore based on payment. Even if job loses aren’t massive, the impact will be large. Real estate values will drop to reflect these sales prices. 

[James Hamling]

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Yep, that's exactly what may happen...

 How? What mechanism is going to create a forced sale environment? 

 No mechanism in the textbook sense that you mean. Just as I said in a post above, these things often do not need a textbook reason. Wars do not follow those rules either....they start because they start sometimes, no reasons. Same with the economy IMHO. Your views will probably differ and that's fine.

 I'm not talking text book, just asking for some real world something. Many keep talking about how people will be selling and selling as price keeps dropping and dropping. Yet, nobody say WHY any of these people will be selling at lower and lower descending prices. 

I don't know anyone, personally, clients, associates, nobody who would engage in selling at descending prices in a descending market. Everyone would just shrug and, wait. Adjust plans for simply waiting. 

I think waiting is a very justified response given the conditioning all received via '08' event. Most lived through this or have some familiarity with it, and fact that all one had to do is, wait a few years. On average 7. 

So an environment that poses descending prices, yes, I see people waiting. 

You won't get descending prices if people are not selling at descending prices. So, text book, note book, no book what ever book, I'd just like someone to answer to this. The lack of answer from all tells me, there is no answer to it, nothing, nobody has any reasoning just doesn't want to admit it. 

Not sure on the wars reference. Are you saying if a war pop's off, or that wars just happen, like a few thousand solider happen to just be hanging out with a few tank battalions and randomly go "hey, check that out, wouldn't it be really funny if we just, invaded" and one thing turns to another and "whoopsie" a war starts?    

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

 We call that a Tenant! 

A tenant with a soon to be 20 percent discount! 

I did say not to cherry pick markets, yet you cite your local market. That’s great, your market may not go down a full 20 percent, but the us median home value June 2022 will drop at least 20 percent. After the data today, it’s already declining.

Your theory on sellers won’t sell so prices will stay high, assumes you are in a utopia where everyone gets together and says nobody will sell. Reality says otherwise, and just because John doe puts his foot down and decides not to give a price cut, his neighbor will and that will drag down John does home value to an appraiser and the market and poof there went the phantom equity 

 Lol, ok, so you have just decided everything is going to be 20% less, just cause. 

People are going to sell at loss's, just cause. 

Rents will go down, just cause. 

Lol, ok, great basis. 

Your contradicting yourself. People pushed out of homes but rents go down, yeah, that makes sense. 

So let me get this straight, in your version of reality the Fed raises interest rates, so everyone get's together and decides to sell their homes to each other at 80% or less of it's market value today, just cause. So everyone starts trading homes like baseball cards at lower and lower prices. And rents start dropping because, IDK, I guess tenants saw homeowners at that meeting and held there own and collectively agreed to stop renting places? 

To clarify, is there anything in your world that inflation will not LOWER the price of? Are autos getting cheaper too? Food? Because i think I want to come vacation in your world, it sounds nice, contradictory to pretty much everything but, nice and cheap, lol. 

I stand by my guarantee that with the fed at a 4-5 percent fed funds rate, which we will be at by end of year (and is already being priced into mortgage rates), and assuming it’s held there for 2023( with they are committing to). Then it’s a guarantee median home values will be down 20 percent (overall usa housing not specific markets). By end of 2023 relative to June 2022 (18 month horizon)

if fed pivots and lowers rate before they plan, then that changes things, but they are saying they won’t now. Get back to me next year when you have buyers in distress, I’ll buy them from you. 

 Aside from all the other stuff, exactly what is going to put a person into "distress"? 

Still not answer to say what is going to FORCE persons to sell, at descending prices. 

People always sell. Also, once people see the news that the case Schiller index fell for the first time in a decade, and at the fastest rate in history along with their 401Ks going down….all it takes is a few percent of people to decide it’s “sell time” and you will have home prices fall on low volume. You also have a lot of new construction in your market in the suburbs. Developers are already slashing prices out there, and we all know that the home builders always offer upgrades and closing costs first before they do a price cut to keep up the “mirage”. Look in your own backyard. It’s coming. The pool of buyers has dried up, nobody wants the overpriced real estate at these prices with rates so high. 

 Ok, by which data from my own back yard would you like me to humiliate you with? How much evidence does it take for you to stop this ridiculousness? 

How about median sale price in % of list. Oh, look at that, "oh no" it's "crashed" to just a touch over 100%, "what will we do......." If it gets 4X worse it will be as bad as, 2017, and oh how everything was a nightmare in 2017 right.......

How about days on market? Yes, it's getting ugly, we could see as many as 20 days on market soon.......

Maybe months of supply, I am sure we will see this crash starting to rage there, homes sitting forev..... nope, sorry, 1.3mnths. 

But like you said, the sale price, YES the sale price, that's clearly falling like a stone off a..... no, can it be, IT'S GOING UP, BALDERDASH!

Ok, ok, I'll be a nice guy, I did find one data point that is falling. Homes for sale.......

I am curious, did you really think after all i have said on here, that I didn't actually have the data readily at hand? I do mention to the data, like a lot. I reference things, from what the data is saying. My arguments are data based. I say I have no opinions only observations of what the data is telling me. And your direction is to say the sky is falling and I better look at the data in my own back yard.... well, there ya go buckaroo. 

Is the next reply going to be my market, my 1 market alone is the singular anomaly in the U.S. housing market? Because if so, your ALL running up to invest here, right? I mean, clearly we win the blue-ribbon for R.E. market hands down then right? BEST in the U.S., because as said everywhere else is falling like a stone....... 

Check and mate. 

[John Carbone]

Quote from @James Hamling:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Quote from @Bruce Woodruff:

Quote from @James Hamling:

Yep, that's exactly what may happen...

 How? What mechanism is going to create a forced sale environment? 

 No mechanism in the textbook sense that you mean. Just as I said in a post above, these things often do not need a textbook reason. Wars do not follow those rules either....they start because they start sometimes, no reasons. Same with the economy IMHO. Your views will probably differ and that's fine.

 I'm not talking text book, just asking for some real world something. Many keep talking about how people will be selling and selling as price keeps dropping and dropping. Yet, nobody say WHY any of these people will be selling at lower and lower descending prices. 

I don't know anyone, personally, clients, associates, nobody who would engage in selling at descending prices in a descending market. Everyone would just shrug and, wait. Adjust plans for simply waiting. 

I think waiting is a very justified response given the conditioning all received via '08' event. Most lived through this or have some familiarity with it, and fact that all one had to do is, wait a few years. On average 7. 

So an environment that poses descending prices, yes, I see people waiting. 

You won't get descending prices if people are not selling at descending prices. So, text book, note book, no book what ever book, I'd just like someone to answer to this. The lack of answer from all tells me, there is no answer to it, nothing, nobody has any reasoning just doesn't want to admit it. 

Not sure on the wars reference. Are you saying if a war pop's off, or that wars just happen, like a few thousand solider happen to just be hanging out with a few tank battalions and randomly go "hey, check that out, wouldn't it be really funny if we just, invaded" and one thing turns to another and "whoopsie" a war starts?    

@James Hamling  you make a lot of good points in what you have been saying the last few days, definitely some good valuable history lessons. Regarding home prices though, your either brainwashed, tunnel vision, or more likely just in over your head and not even realizing it. The people you talk to are not the people that will be selling. You said it yourself, you are the top realtor in your office, you are dealing with similar top performers and acute investors on a daily basis. What you say makes perfect sense in a textbook, but it is not reality. People will always sell. The housing shortage is an illusion, there is no true shortage nationwide, when I have more time I’ll make a post on that (similar to my phantom equity post). Suffice to say though, what you are claiming now about nobody will sell for less, that’s just plainly false. the data is out today showing you are wrong, and you will continue to be wrong until the fed cuts rates. Stop trying to fight the fed. I agree it’s a horrible system, but it’s one that we are forced to live with. 

2017 levels?  You said we will never come close to 2019. I’m not predicting Armageddon. I’m just saying 20 percent drop. Seems like you are leaving the door open for a decline to 2017 levels by saying “ How about median sale price in % of list. Oh, look at that, "oh no" it's "crashed" to just a touch over 100%, "what will we do......." If it gets 4X worse it will be as bad as, 2017, and oh how everything was a nightmare in 2017 right...” already starting to hedge yourself a little, that’s smart.

Keep showing me charts of the biggest housing bubble in history. Rates just spiked dude, the data to reflect this isn’t in the charts yet. This is what we are talking about. Please guarantee me that you will give me quarterly updates on these charts until the fed cuts rates, please do that. I can’t wait to hear the excuses then month after month “but, but, but,”

I hope you are prepared for this, I’m sure you are, so it won’t matter but for a lot of the hard working folks that you claim to be a steward for….you will be letting them down. 

 I saw charts like the ones you just posted similar in 2000 with .com stocks right as the bubble burst, from mortgage brokers in 2006, from realtors like yourself in 2008, and from hedge funds when the s&p was at almost 5,000. Doesn’t take a genius to throw together some charts. The only thing your charts along with the others I saw, are used for is comedy. 

I give you credit for having conviction though. This thread is shaping to be HOF material in the history of BP. I hope your ego will allow you to come back and give us the updates I asked for until the fed cuts rates. 

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

@Carlos Ptriawan - so the fed wants to slow down inflation, lets be clear about that. They believe it will only really stop as unemployment goes up, yes. I also happen to agree since we just need people with less money. THat said you’ll see more layoffs in next 3 month and also early next year. Companies are already planning them. The real question is how much can the market absorb. Even if it hits 5% though it’s still historically low unemployment.  

As to housing there’s still going to be people with money out there so we’ll see how that goes - lot of cash deals still in my local areas. 

@John Carbone Considering how much Cali, NV, AZ and FL drove last recession not super worried about personally running into 20% percent. but then I’m also not going in with no money down (or low money down either) if it actually reaches 2008 levels of 20-30% (which is what you are suggesting) it won’t impact my ability to refinance. All that aside I don’t know where you see the panic selling. What is going to cause people to panic sell and where do you expect them to go? What’s the play in it for them? This isn’t stocks where fear can allow for quick panic sales. I just don’t get what makes you think it will happen and most smart investors will ride it out and if it’s people living in homes where do you expect them to go?

People not seeing it because it's still in a very early trend, but if you see indicator like Corelogic Case-Shiller indices, Zillow Home Estimate,etc...nationwide price reduction already happening since July. The active inventory between Jan-Mar (before QT) and after Jun-Aug(after QT) is drastically increased. This can easily be deciphered after reading the early trend indicator.

....it's just matter of how deep the price reduction would be.

Case-Shiller month-to-month index is already showing August 2022 is equal to Jan 2007 (the peak of GFC 2008 crash) where the index is negative. It took 3 years for market to recover.

 If all it takes to get a person to sell there home for a significant reduction is flashing some graph, from some names that the average person doesn't know from a hole in the ground, why isn't every wholesaler using graphs to get price reductions? 

Home owners don't care about any of that. Home owners sell, based on what makes sense for them, full stop. 

People only sell when the price makes sense to them. All the graphs in the world mean nothing. Anyone who has spent some considerable time in the trenches dealing with potential sellers knows this. They know what they bought it for, what they owe, what they could have got last year and if it's a bunch less your saying today they say F-that, there just gonna wait because it will come back in and they will sell then. That's reality. 

Only buyers do this wining on what homes prices are "supposed" to be. It's true, I never hear a seller ever say that, ever. Sellers say what a home is worth to them, why they have pegged ___ as a fair sale amount. Buyers get righteous and wag there finger demanding sellers understand them and change prices to what they say. 

Divorce, Death, bankruptcy, those things will happen, always have, always will. Some sale will always happen. But in large part, most have options. Relocating, they can just rent if not good time to sell. I know of a little brokerage who happens to manage these exact properties for tens of thousands of those owners today. People-don't-have-to-sell. 

'08', people had to sell, resetting mortgages forced it. Nobody can answer, what-will-force-people-to-sell. No force, people will just not sell, it's that simple. They will stay put, rent it out, maybe STR. They got options, lots of em.

High rates impact buying, that's it. Not 1 home owner in America today said "well, honey, rates are over 7, get packing, we have to sell the home now cause rates are over 7" but guess what, a whole bunch said "hell no were not selling now". 

[John Carbone]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

@Carlos Ptriawan - so the fed wants to slow down inflation, lets be clear about that. They believe it will only really stop as unemployment goes up, yes. I also happen to agree since we just need people with less money. THat said you’ll see more layoffs in next 3 month and also early next year. Companies are already planning them. The real question is how much can the market absorb. Even if it hits 5% though it’s still historically low unemployment.  

As to housing there’s still going to be people with money out there so we’ll see how that goes - lot of cash deals still in my local areas. 

@John Carbone Considering how much Cali, NV, AZ and FL drove last recession not super worried about personally running into 20% percent. but then I’m also not going in with no money down (or low money down either) if it actually reaches 2008 levels of 20-30% (which is what you are suggesting) it won’t impact my ability to refinance. All that aside I don’t know where you see the panic selling. What is going to cause people to panic sell and where do you expect them to go? What’s the play in it for them? This isn’t stocks where fear can allow for quick panic sales. I just don’t get what makes you think it will happen and most smart investors will ride it out and if it’s people living in homes where do you expect them to go?

People not seeing it because it's still in a very early trend, but if you see indicator like Corelogic Case-Shiller indices, Zillow Home Estimate,etc...nationwide price reduction already happening since July. The active inventory between Jan-Mar (before QT) and after Jun-Aug(after QT) is drastically increased. This can easily be deciphered after reading the early trend indicator.

....it's just matter of how deep the price reduction would be.

Case-Shiller month-to-month index is already showing August 2022 is equal to Jan 2007 (the peak of GFC 2008 crash) where the index is negative. It took 3 years for market to recover.

 If all it takes to get a person to sell there home for a significant reduction is flashing some graph, from some names that the average person doesn't know from a hole in the ground, why isn't every wholesaler using graphs to get price reductions? 

Home owners don't care about any of that. Home owners sell, based on what makes sense for them, full stop. 

People only sell when the price makes sense to them. All the graphs in the world mean nothing. Anyone who has spent some considerable time in the trenches dealing with potential sellers knows this. They know what they bought it for, what they owe, what they could have got last year and if it's a bunch less your saying today they say F-that, there just gonna wait because it will come back in and they will sell then. That's reality. 

Only buyers do this wining on what homes prices are "supposed" to be. It's true, I never hear a seller ever say that, ever. Sellers say what a home is worth to them, why they have pegged ___ as a fair sale amount. Buyers get righteous and wag there finger demanding sellers understand them and change prices to what they say. 

Divorce, Death, bankruptcy, those things will happen, always have, always will. Some sale will always happen. But in large part, most have options. Relocating, they can just rent if not good time to sell. I know of a little brokerage who happens to manage these exact properties for tens of thousands of those owners today. People-don't-have-to-sell. 

'08', people had to sell, resetting mortgages forced it. Nobody can answer, what-will-force-people-to-sell. No force, people will just not sell, it's that simple. They will stay put, rent it out, maybe STR. They got options, lots of em.

High rates impact buying, that's it. Not 1 home owner in America today said "well, honey, rates are over 7, get packing, we have to sell the home now cause rates are over 7" but guess what, a whole bunch said "hell no were not selling now". 

Are you guaranteeing you will be around here to give updates until the fed pivots and you won’t make excuses when you are wrong? We will just let the numbers do the talking over the next 6-18 months. 

[Bruce Woodruff]

Quote from @John Carbone:

+1

[Bruce Woodruff]

Quote from @James Hamling:

People only sell when the price makes sense to them.

Or when they are forced to. Or when they are running scared. Or when they just have a lapse in judgement. Or their wife makes them. Or.........

I must be a lot older than you because I've seen this movie before.....Several times....