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Updated almost 2 years ago, 01/14/2023
Housing crash deniers ???
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.
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Quote from @Chris John:
"And I don't understand why BlackRock was singled out in those semi-recent articles."
I only used them as an example because I have a right wing conspiracy buddy that won't shut up about how only corporations will own houses from now on. I've actually defended BlackRock in my conversations with him.
"Why? Why would they "have to sell". Do you understand at all how funds
work? They are the most liquid holders of real estate bar-none. They
would be "the" ones to just hold. They have the least leverage of all."
Welp, James, it's a pretty self-explanatory question, no? I give money to a financial advisor, it doesn't make as much as I wanted, so I ask for it back and move on to the next investment?
Are you under the impression that they take my money and buy a house with it, but still have my money to pay me back if I decide to liquidate?
Also, please understand that this is apparently enough of a concern that BlackRock is currently limiting withdrawals as we speak in the UK:
https://www.bloomberg.com/news...
I literally had no idea that this was actually happening. It must have been God's gift to me to help counter an "armchair quarterback". LOL.
And finally, I think you think that teacher left you in charge of the class. Didn't happen and we're fine...
Ok, there seems to be a major lack of information on how all this works, and that seems to be leading some misconceptions.
When you come into an investment for something like a Private Fund with Blackrock, or similar, it's not Bob the plumber who can just plunk down some cash and take it back a week later.
The vast majority what people reference as institutional Funds, only accept accredited investors. Next, there is specifications as to when a person can request funds back out of an investment, and how that all operates. No, for most, you can't simply wake up on a Tuesday and say "hey, changed my mind, cash me out" and the fund manager scrambles going "oh my gosh, where do we get the $", that's just not how it works.
First, some respect is required. Seriously, too many are assuming these funds and fund managers are too dumb to think of such and are just flying by on a wing and a prayer. Any scenario you can think of, they did also, and have entire systems and process in place for it all. They are not dumb, how do you think they got to where they are?
Now, let's talk a exchange traded REIT. So Bob wakes up and starts selling his shares. Oh My Gosh, what will they do without the $, is what your thinking right. WRONG. How did this start? Bob starts SELLING his shares. Bob can't sell if someone does not buy.....
I have in past heard some people complain of why is getting into one of these funds blocked to the average person and only available to an accredited investor. Well, to be honest it's half for your own safety from doing something you can't afford to do or have the knowledge to do, and the other half is this false notion being placed now, because it's to defend the market as a whole from such actions presented unto a fund by panicked investors in desperation to take out invested capital that they need, because, back to first one, because they couldn't afford to invest it in first place.
Investment and investing has inherent risk up to and including the loss of the entirety of funds.
No, there does not exist an environment where there is an open door for a run on the bank. That is the scenario being presented, a run on the bank.
Hence why i asked if you understood how these funds work. because what's being presented as a scenario where they'd have to fire-sell, it does not exist. It is fund management 101.
As an Accredited Investor, every investment offer I have ever seen has always had this defined mechanism and procedure in the investment of when an investor can call on funds, and I have never seen anything of at-will, ever. Nor heard of such. I would be very concerned about anything that ever did have such.
As for the financial advisor reference, again I'd have to ask if your aware of what they do and how it functions? No condensation, a genuine question as many don't actually know.
Let's take a popularly known one Like E.J. (not sure if I can put there name here, but there all over the place). Those "Financial Advisors" are just salesman for a mutual fund. That's it. They schlep what there told to schlep. You sign up with them, your money goes into there M.F.. Which then that M.F. often buys other M.F.'s, who often are into index funds, who then are in the actual stocks. And while you may think you own some of xyz stocks, you don't. you own an interest in the Mutual Fund, they own the assets, not you. Don't believe me, check the fine print. This is a common practice. And proof is, how many times do you get a notice for a shareholder meeting, or a shareholder vote? Only actual shareholders get those. If you never got one, it's because you don't actually own any shares, you own an interest int he fund who owns the shares, not you.
So in this, the Financial Advisory could readily say ok, and give you the $ back, but those shares never are sold, the $ is not removed from the fund, because again you never owned any shares int he fund, just the M.F. who will just sell some shares to the next person who comes in the door. In the interm, the fund holds the assets.
Make sense?
- James Hamling
Blackrock in trouble? Everybody does realize how many assets they have under management right? They started at 10 trillion in assets under management at the start of the year. A lot of firms are down but BR is far from in trouble and in a must have liquidate scenario.
Disagreements over direction of housing is one thing but saying BR is in trouble is a whole other level.
Quote from @John Carbone:
Quote from @Chris John:
"And I don't understand why BlackRock was singled out in those semi-recent articles."
I only used them as an example because I have a right wing conspiracy buddy that won't shut up about how only corporations will own houses from now on. I've actually defended BlackRock in my conversations with him.
"Why? Why would they "have to sell". Do you understand at all how funds
work? They are the most liquid holders of real estate bar-none. They
would be "the" ones to just hold. They have the least leverage of all."
Welp, James, it's a pretty self-explanatory question, no? I give money to a financial advisor, it doesn't make as much as I wanted, so I ask for it back and move on to the next investment?
Are you under the impression that they take my money and buy a house with it, but still have my money to pay me back if I decide to liquidate?
Also, please understand that this is apparently enough of a concern that BlackRock is currently limiting withdrawals as we speak in the UK:
https://www.bloomberg.com/news...
I literally had no idea that this was actually happening. It must have been God's gift to me to help counter an "armchair quarterback". LOL.
And finally, I think you think that teacher left you in charge of the class. Didn't happen and we're fine...
BINGO!
It’s okay, James is probably not privy to these discussions on the institutional side of things. He just pushes the paperwork through, if he’s even involved with them as he claims to be.
@chris John explained it better than me. This is my 100th post back to James, so I no longer have the patience to spoon feed him the facts like a child. Thanks for that Chris.
Let's see how the Credit Suisse stuff plays out. I'm sure it isn't the armageddon that some folks are saying it is, but I do think there is something to the increase in CDS rates. As someone who works for an asset manager, I'm rooting for a very soft landing for the economy. But of course...what I want doesn't mean squat.
Situation with Evergrande debt isn't over yet either. Incidentally, BlackRock is one of the largest Evergrande debt-holders. But I agree with the previous post. They are far from being in trouble.
Thank you for the respectful reply. Very interesting. I definitely agree that "Joe the plumber" isn't going to break BlackRock or anyone else. However, if these depositors start demanding their money, it's going to force properties onto the market. I think we can both agree that the article I referenced wasn't a perfect example of what I was saying (Europe, institutional players, etc.) but I believe it helps make my larger point.
In the end, you're extremely bright, well educated, and have some interesting points. I'd be lying if I said I enjoyed being called out like I was though! haha.
I'm definitely NOT trying to say that BlackRock is in trouble. Just using it as an example of how a slide can possibly begin, for sure. It was just funny to me that the article came out right before I did a Google search looking for it. In the end though, nothing is too big to fail under the right circumstances.
This misinformation is crazy. Here are some facts for anyone interested:
1) BlackRock has not been buying single family homes. Apparently this is a common misconception, and from googling, apparently they have a whole page dispelling this misconception: https://www.blackrock.com/us/i... Maybe this is a common misconception because you are all mistaking it for Blackstone, which is the largest real estate PE firm in the country, and has indeed set up funds to acquire SFHs.
2) To point above, Blackstone is a real estate private equity firm (and the largest one). Typically how large private equity funds work is, they will raise funds (in the billions of dollars), from institutions (limited partners, like endowments, pensions, UHNW, etc) who write very large checks. These funds have agreements on the profit split between the LPs and the GP (Blackstone), management fees, acquisition fees, etc along with the duration of the fund (let's say on average 10 years for real estate private equity). The limited partners cannot call capital and just tell Blackstone they have to liquidate. Blackstone starts liquidating their fund around the 10 year mark, or whatever is agreed to in the fund docs.
So for a fund or multiple funds that Blackstone has set up and raised LP $'s for over the past couple years to acquire large swaths of single family homes, those investors (LPs) cannot just call capital and force Blackstone to sell. Blackstone sells in accordance with the expectations of the fund docs (usually around the 10 year mark, so likely toward the end of this decade).
Quote from @Nick H.:
This misinformation is crazy. Here are some facts for anyone interested:
1) BlackRock has not been buying single family homes. Apparently this is a common misconception, and from googling, apparently they have a whole page dispelling this misconception: https://www.blackrock.com/us/i... Maybe this is a common misconception because you are all mistaking it for Blackstone, which is the largest real estate PE firm in the country, and has indeed set up funds to acquire SFHs.
2) To point above, Blackstone is a real estate private equity firm (and the largest one). Typically how large private equity funds work is, they will raise funds (in the billions of dollars), from institutions (limited partners, like endowments, pensions, UHNW, etc) who write very large checks. These funds have agreements on the profit split between the LPs and the GP (Blackstone), management fees, acquisition fees, etc along with the duration of the fund (let's say on average 10 years for real estate private equity). The limited partners cannot call capital and just tell Blackstone they have to liquidate. Blackstone starts liquidating their fund around the 10 year mark, or whatever is agreed to in the fund docs.
So for a fund or multiple funds that Blackstone has set up and raised LP $'s for over the past couple years to acquire large swaths of single family homes, those investors (LPs) cannot just call capital and force Blackstone to sell. Blackstone sells in accordance with the expectations of the fund docs (usually around the 10 year mark, so likely toward the end of this decade).
And furthermore, no one is in trouble. I'm sure Blackstone and their investors are thrilled with the results of the fund so far. I'm sure they're locked into a very low debt structure from 2020 / 2021, I'm sure they are getting rents well above what they had projected, and I'm sure their CoC / IRR is fantastic. I'm sure they project and will likely be correct that rents will increase (much slower than 2020 / 2021 albeit) by around inflation (2 to 4% or whatever) in 2023, 2024, etc and their returns will continue to be great as the bulk of their cost structure won't change at all or will change marginally (debt, property taxes, utilities, etc).
Quote from @Nick H.:
This misinformation is crazy. Here are some facts for anyone interested:
1) BlackRock has not been buying single family homes. Apparently this is a common misconception, and from googling, apparently they have a whole page dispelling this misconception: https://www.blackrock.com/us/i... Maybe this is a common misconception because you are all mistaking it for Blackstone, which is the largest real estate PE firm in the country, and has indeed set up funds to acquire SFHs.
2) To point above, Blackstone is a real estate private equity firm (and the largest one). Typically how large private equity funds work is, they will raise funds (in the billions of dollars), from institutions (limited partners, like endowments, pensions, UHNW, etc) who write very large checks. These funds have agreements on the profit split between the LPs and the GP (Blackstone), management fees, acquisition fees, etc along with the duration of the fund (let's say on average 10 years for real estate private equity). The limited partners cannot call capital and just tell Blackstone they have to liquidate. Blackstone starts liquidating their fund around the 10 year mark, or whatever is agreed to in the fund docs.
So for a fund or multiple funds that Blackstone has set up and raised LP $'s for over the past couple years to acquire large swaths of single family homes, those investors (LPs) cannot just call capital and force Blackstone to sell. Blackstone sells in accordance with the expectations of the fund docs (usually around the 10 year mark, so likely toward the end of this decade).
You are 100% correct. Apparently, this misinformation originated from a tweet from someone named J.D. Vance which went viral. And of course, some of the news outlets ran with it.
https://www.foxnews.com/media/blackrock-investment-firms-killing-dream-home-ownership
Quote from @John Carbone:
Quote from @Nick H.:
This misinformation is crazy. Here are some facts for anyone interested:
1) BlackRock has not been buying single family homes. Apparently this is a common misconception, and from googling, apparently they have a whole page dispelling this misconception: https://www.blackrock.com/us/i... Maybe this is a common misconception because you are all mistaking it for Blackstone, which is the largest real estate PE firm in the country, and has indeed set up funds to acquire SFHs.
2) To point above, Blackstone is a real estate private equity firm (and the largest one). Typically how large private equity funds work is, they will raise funds (in the billions of dollars), from institutions (limited partners, like endowments, pensions, UHNW, etc) who write very large checks. These funds have agreements on the profit split between the LPs and the GP (Blackstone), management fees, acquisition fees, etc along with the duration of the fund (let's say on average 10 years for real estate private equity). The limited partners cannot call capital and just tell Blackstone they have to liquidate. Blackstone starts liquidating their fund around the 10 year mark, or whatever is agreed to in the fund docs.
So for a fund or multiple funds that Blackstone has set up and raised LP $'s for over the past couple years to acquire large swaths of single family homes, those investors (LPs) cannot just call capital and force Blackstone to sell. Blackstone sells in accordance with the expectations of the fund docs (usually around the 10 year mark, so likely toward the end of this decade).
So say they raised $1B of equity to acquire SFHs. In conjunction, they'd already have the debt side set up, so let's say that's $1.5B of debt at 4% interest or whatever, such that they have 60% LTV on the fund. That's usually all set up when they raise the fund, up front - before they acquire all the homes. They have a relationship with large banks who provide that debt financing.
That debt has whatever the negotiated term is. So whenever the negotiated term is up (probably 7 to 10 years, but not totally sure, would need to see fund docs or ask someone who works on investment team there) - they'd refinance. Let me know if that doesn't make sense and I can clarify.
Re your last question - can you be more specific about who the conglomerates are that are selling massive tranches of SFHs? And if you have an article to back up, please include. I'm not disputing it's true, just not sure the details of what you're referring to. All I have heard is that PE groups like Blackstone are slowing/stopping the acquisition of SFHs, so curious what you're referring to.
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
You're taking a lot of the fun out of this, Nick! haha.
In all seriousness, you've definitely hit the nail on the head of why I've been averse to investment funds where you lose control.
Finally, I'm happy to admit that I don't know the inner workings of BlackStone or even BlackRock. I was literally just using the name of a fund that I've heard of as an example. haha.
I do, however, think that there's some investors somewhere out there that will be very unhappy with low returns and might want to pull their money back in a stagnant economy. Enough of those people and there might be forced sales.
Maybe if funds can't deliver a return, new investments will dry up and they'll want to pivot out of some of their holdings? All I'm saying is that:
1. I could see institutional investors deciding to sell before they'd planned.
2. I've obviously used a VERY poor specific example! haha.
Best wishes
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#2 Multi-Family and Apartment Investing Contributor
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@Jay Hinrichs 1 in 5 houses bought in 2022 sold to investors. Investors don't own 1 out of 5 houses.
Quote from @Chris John:
You're taking a lot of the fun out of this, Nick! haha.
In all seriousness, you've definitely hit the nail on the head of why I've been averse to investment funds where you lose control.
Finally, I'm happy to admit that I don't know the inner workings of BlackStone or even BlackRock. I was literally just using the name of a fund that I've heard of as an example. haha.
I do, however, think that there's some investors somewhere out there that will be very unhappy with low returns and might want to pull their money back in a stagnant economy. Enough of those people and there might be forced sales.
Maybe if funds can't deliver a return, new investments will dry up and they'll want to pivot out of some of their holdings? All I'm saying is that:
1. I could see institutional investors deciding to sell before they'd planned.
2. I've obviously used a VERY poor specific example! haha.
Best wishes
Haha yeah all good. So a couple things to think about here as to why I don't think it's very likely they would be likely to sell.
I don't think most of the institutional buying has been over the past few months as rates have gone up. Agreed that if you bought a single family home (depending on the details of course), last month with 7% debt, the return probably wouldn't be great. Possible an institution did that and then shortly after decided they didn't like the return (but they would have likely calculated it prior to buying, so that would be a little weird?) - but to me that seems like a fringe case / very tiny portion of the market.
Most of the institutional buying was in 2020 and 2021. Their returns are great and it's not likely they are going to be selling as they are locked into very low debt (and most have requirements, if they are a dedicated GP/LP fund, like I mentioned, to hold for X years). Even if they weren't set up as a GP/LP fund, it's not likely any sophisticated (or even unsophisticated I'd imagine) institution would sell out of low debt / high rent and cash flow in this high rate/inflationary environment.
Quote from @Nick H.:
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
https://moneymarketadvisor.com...
Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding.
It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James .
https://www.realtor.com/news/t...
james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?
Quote from @John Carbone:
Quote from @Nick H.:
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
https://moneymarketadvisor.com...
Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding.
It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James .
https://www.realtor.com/news/t...
james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?
Did you read the article?
“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”
IT also said don’t expect foreclosures. Don’t expect more homes to go up for sale - essentially reduced prices which is what a lot of us have been saying.
But hey I’ve been saying 10-20% depending on a few factors :). So I’m not opposed to your article.
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Nick H.:
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
https://moneymarketadvisor.com...
Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding.
It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James .
https://www.realtor.com/news/t...
james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?
Did you read the article?
“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”
IT also said don’t expect foreclosures. Don’t expect homes to go up for sale. But hey I’ve been saying 10-20% depending on a few factors :)
Yes…..I read the article. I said 20 percent as my bottom range. Wall Street is handicapping a 70 percent chance of a recession (we actually are already in one) which Is why I’ve been saying for weeks now, 20 percent minimum. I was never calling for foreclosures in droves like 2008. A bunch of people on here said 20 percent drop would be like GFC…I never said that. All this time I said lower prices on lower transaction volume.
Quote from @John Carbone:
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Nick H.:
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
https://moneymarketadvisor.com...
Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding.
It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James .
https://www.realtor.com/news/t...
james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?
Did you read the article?
“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”
IT also said don’t expect foreclosures. Don’t expect homes to go up for sale. But hey I’ve been saying 10-20% depending on a few factors :)
So Cali and west coast will lead with a nice 25% decline. And east coast will stay at 10-15%. Sounds about right to me.
Recession wise we still have low unemployment so it seems to expect a lot of impact from a recession but time will tell on that one.
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Nick H.:
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
https://moneymarketadvisor.com...
Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding.
It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James .
https://www.realtor.com/news/t...
james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?
Did you read the article?
“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”
IT also said don’t expect foreclosures. Don’t expect homes to go up for sale. But hey I’ve been saying 10-20% depending on a few factors :)
So Cali and west coast will lead with a nice 25% decline. And east coast will stay at 10-15%. Sounds about right to me.
Recession wise we still have low unemployment so it seems to expect a lot of impact from a recession but time will tell on that one.
https://www.google.com/amp/s/w...
Quote from @John Carbone:
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Michael Wooldridge:
Quote from @John Carbone:
Quote from @Nick H.:
@John Carbone BTW one clarification - there's no concept of a "margin call" really. The equivalent here is really if they mess up on a loan covenant (or again, whatever the specific provisions of their agreement is w/ the bank on the loan) - then it could be called. The most common would be a DSCR covenant. The value of the home itself isn't directly relevant to that - it's just their ability to service the debt with the cashflow from the property.
In practice, given how much rents have gone up, they would likely need rents to drop, a lot, to have any DSCR issues.
https://moneymarketadvisor.com...
Private equity is very sensitive to short term rates. They are not getting long fixed term duration funding.
It’s getting mainstream now, here’s an article today from realtor.com, wait until John Doe sees this. This pretty much sums up what we have all been saying in here except the “never crashers” led by super realtor James .
https://www.realtor.com/news/t...
james should report this writer for spreading falsehoods. Everything discussed in the article has been discussed in this thread and “proven” by James to be false made up information. How does realtor.com allow such made up conspiracies on their website?
Did you read the article?
“Zandi believes home prices will fall about 10% nationally over the next 12 to 18 months if the country avoids a recession. If one happens, he anticipates price declines could approach 20% from peak to trough in 2024.”
IT also said don’t expect foreclosures. Don’t expect homes to go up for sale. But hey I’ve been saying 10-20% depending on a few factors :)
So Cali and west coast will lead with a nice 25% decline. And east coast will stay at 10-15%. Sounds about right to me.
Recession wise we still have low unemployment so it seems to expect a lot of impact from a recession but time will tell on that one.
https://www.google.com/amp/s/w...
You link doesn’t work. but I assume it’s the KPMG CEO report. Not really news. I’ve been saying in this very thread that Fortune 500 is planning lay offs q4.
or I guess it could be that we had 10% open job reduction - which I thought I posted earlier in this thread but could be on my other forum. Also not really news. BTW KPMG report would be better for your point
@John Carbone Also just to take it a step further do you know how high unemployment was in 2008? 7.4% and that was with far higher labor force participation rates in 08. There are far less people to fill the open jobs and with unemployment far far lower.
Add in the job market in 08 + subprime and we still only saw 28% nationally. But with far less unemployment, no subprime, higher wages - somehow we will surpass 20%?
Sorry but there is a reason why your article says 20% in a worse case scenario.
You want 20% minimum and more. That needs a nuke from Russia or something big like Credit Suisse collapsing.
Gotchya, thanks @John Carbone. So looks like at least one fund (Starwood) wants to sell some of their SFH portfolio (20% of it, it looks like - 3,000 homes of their 15,000 homes).
FWIW - looks like Morgan Stanley and Goldman Sachs, who are pretty smart, are projecting for 2023: 7% drop in home prices by Morgan Stanley, 5-10% drop by Goldman. MS has downside case of 10%+ drop and upside case of a 5% increase in home prices in 2023.
Quote from @Nick H.:
Gotchya, thanks @John Carbone. So looks like at least one fund (Starwood) wants to sell some of their SFH portfolio (20% of it, it looks like - 3,000 homes of their 15,000 homes).
FWIW - looks like Morgan Stanley and Goldman Sachs, who are pretty smart, are projecting for 2023: 7% drop in home prices by Morgan Stanley, 5-10% drop by Goldman. MS has downside case of 10%+ drop and upside case of a 5% increase in home prices in 2023.
These same analysts also had SPX end of year targets of close to 5,000 (they are about 30 percent off from that.) “analysts” have to be close to the ballpark of each other, otherwise they risk their jobs. As long as they are in line with consensus, and if they end up wrong, well…”everyone else was wrong” so we all keep our jobs. Those projections aren’t worth the paper written on.
You linked to an article of Moody's projections, so your stance here feels disingenuous. But ok. Just a data point - not saying Goldman and MS are going to necessarily be correct, time will tell.
Quote from @Nick H.:
You linked to an article of Moody's projections, so your stance here feels disingenuous. But ok. Just a data point - not saying Goldman and MS are going to necessarily be correct, time will tell.
I only linked moodys to give what you all deem to be “official” outlets.
All I know is, math is math, and that calculates 20 percent drops. The back and forth on semantics is irrelevant. Your neighbor won’t care what moodys , Goldman, Merrill, or whoever said when they lose their equity.
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Quote from @Michael Wooldridge:
Blackrock in trouble? Everybody does realize how many assets they have under management right? They started at 10 trillion in assets under management at the start of the year. A lot of firms are down but BR is far from in trouble and in a must have liquidate scenario.
Disagreements over direction of housing is one thing but saying BR is in trouble is a whole other level.
Yes, if they knew who is the owner/investor of Blackrock then they will understand.
It's sovereign wealth fund :) LOL