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. 

[Carlos Ptriawan]

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources: 

 Rents San Diego county wide have continued going up even as RE prices have fallen. YOY  in my market the rent appreciation has averaged over 10%.  $4k was always high rent for that unit.  Rentometer lists the average as $3450 based on six 4 BR comps.  It also shows that the highest rent ever for that unit is the current rent.

In Bay Area rents already going down, especially for rental above $4k. It's just making non-sense to rent a house for $4k since at this rate one can already purchase primary (even in a condo). they move back to the $3k range just like what Greg mentioned previously. For rental at this price range usually, they have a personal reason why they haven't purchased one yet (either lifestyle choice, immigrant status or may move to texas lol)

The cheapest condo in South bay is now $499,999 why do folks want to rent...

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

@John Carbone

@Michael Wooldridge

I get the points on wage increase. I'm just saying that I don't think the main driver of increased rents is people working minimum wage jobs.

My experience with people with these jobs are one of a few scenarios. It's their primary income, but they also drive for uber, lyft, or have some other "side hustle". They live at home with mom & dad or with a family member. They don't rent by themselves, they are married or live with their partner and have two incomes. They rent out a single room (many room rentals on Craigslist, etc.) Also can't rule out the fact that some of these folks might be on section 8 or get some other kinds of government assistance. 

 Nice ! I am about to say that.

Michael what makes the different of consumer behavior is ; for minimum wage worker/service industry worker:
- they live in multi generational family or living with room-mates, I never see a single McD or construction guy living alone, almost never
- they have multiple jobs
- they are usually immigrants so they have to send money back to their country,this is their biggest reason why they always saving
- their consumer behavior is extreme saving for everything
- even in the highest place in CA, their shelter cost per person sometimes is only $300-$700 max. 
- they hate to live alone
- there's always the cheapest rent available, I will show it to you where in Bay Area you could get 1 BR for only $650 :) LOL

THat's the reason why the shelter increase might not have direct consequences to service industry worker. 

Now you said they have more disposable income, but you remember we're in inflation you know, so if your salary increased to $1 but your taco increased by $2 it's all gone you know, they will even save more now. 

One thing that James and Michael are right is that ...... the rent growth is more affecting to professional class in the middle class and higher-medium class.  

So I think you are letting a very small subset of the population, immigrants flavor the way you look at low income workers. As a side point ~25% of population falls into low income or under $35k a year. Those brackets will shift quite a bit when we start breaking the data down after 2021/2022 data. Political site but the numbers are a decent ballpark: https://taxfoundation.org/how-... 
 

Second and more importantly did you look at the average wage index from SSA? https://www.ssa.gov/oact/cola/... - 2021 we saw a 9% wage increase and when 2022 comes in we’ll likely see similar 6-7%. That’s typical multiples years of wage increases packed into 1 year. When we talk about wages being up and driving spending we are looking at the full end to end economy. 

You have wages up dramatically. You have unemployment down. You have a huge majority of Americans saving a LOT of extra money by working from home and not taking vacations quite like they did (even 2021 didn’t see that travel industry recover). What does that equal? a lot more disposable income. There is a reason why prices on things jumped across the board because demand was up. It’s why containers got so expensive (10x from the norm) during covid. Americans spent that extra disposable income.

There are numerous examples of it. BUt it was not just low wage earners up (and going from 10-18 is a massive jump). BTW I mentioned food stamp in the original post do you know why they will never go away (charity aside) ? Because it’s a direct cash infusion into businesses. That 10-18 also drove spending up. 
 

People are forgetting we didn’t see inflation until q2 this year essentially. All that money extra money end of 2020 (wages didn’t go up but savings did working from home) and 2021 went right back into spending. Fast forward to today and you get a supply chain issue across the board. 

[Greg R.]

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources: 

OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.

I also want to point out, if 2019 data has  the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage. 

 Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.

As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:

1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.

2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.

I don't know if we're going to see a drop in rents. However, I wouldn't be surprised if they did correct some. I don't have a ton of data to support this, just one personal example. My cousin moved out of CA recently and put his house on the market for $4,500 in early August. Definitely on the high side, but he should have been able to get 4k all day. However, he's now down to $3,550 and dying a slow death. 

This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters. 

 Rents San Diego county wide have continued going up even as RE prices have fallen. YOY  in my market the rent appreciation has averaged over 10%.  $4k was always high rent for that unit.  Rentometer lists the average as $3450 based on six 4 BR comps.  It also shows that the highest rent ever for that unit is the current rent.

 This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550

https://sandiego.craigslist.or...

https://sandiego.craigslist.or...

[Carlos Ptriawan]

okay, the middle class is a different story, that one I agree with you. I thought you want to discuss low minimum wage only.

Back to basic: It's consumerism that triggers inflation.
Consumerism is always triggered by the middle class and upper middle class when they receive more income.

[ If everyone is living like the service industry worker, the CPI would be 1% forever; it's the uppre middle class guy that keep buying the latest Porsche that drives up inflation LOL ]

...

You are correct when saying the rent had increased, but it's not because of the minimum wage had increased (this is only that I want to pointed out), but it's because the middle class and upper higher class have more income now (from economic growth activity).

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

okay, the middle class is a different story, that one I agree with you. I thought you want to discuss low minimum wage only.

Back to basic: It's consumerism that triggers inflation.
Consumerism is always triggered by the middle class and upper middle class when they receive more income.

[ If everyone is living like the service industry worker, the CPI would be 1% forever; it's the uppre middle class guy that keep buying the latest Porsche that drives up inflation LOL ]

...

You are correct when saying the rent had increased, but it's not because of the minimum wage had increased (this is only that I want to pointed out), but it's because the middle class and upper higher class have more income now (from economic growth activity).

So yes I agree middle class spending helps drive up but what helps drive those middle class wages is the end to end. So low end spending on businesses helps rive middle class wages which help drive the rich. There's a reason why trickle down economics existed and it's because every class is connected through their actions on the economy.

Second while lower class has not traditionally driven massive jumps in consumerism it doesn't appear to be quite as true this time around. Simple example and you need to step out of Cali level economics for a second. $10 bucks an hour if you were to work a full 2080 hours you'd gross $20,800 in a year. in the Northeast it's very easy to find a job at $18 an hour now (Starbucks is $16-20 advertised) that same 2080 hours is now $37,440 at $18. BTW most of those companies from taco bell to Starbucks to Wawa also were offering signing bonuses of $750-$1500 at points over last 2 years. 

You can't almost double the effective wages (with signing bonuses it's pretty much double) and not expect an impact. For the first time fast food work can literally have you above the poverty line and not but an insubstantial amount. So while I was referencing end to end I do believe the doubling of low income had an impact also this time around - particularly on the amazon effect type **** that would be coming over in those container ships, containers that went up 10x. 

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @John Carbone:

ginning of the year. Trust me, several months ago they would have gotten 50K over list at these prices. 

I think those all FOMO overbid buyers are created by the hallucinations of the realtors ... LOL the irrational exuberance meets agent that keeps saying we have no more house to sell

Yup. This doesn't apply to them all, but many realtors are the ones responsible for a lot of the reckless buying that caused the bubble. Most of them were advising their clients that if they wanted "a chance to buy" a house they needed to do this... 1) Go in 100k over list, 2) no inspection, 3) waive appraisal contingency  4) degrade yourself by begging the sellers to be so gracious to let you buy their house for 100k over value with a pathetic letter, 5) donate a vital organ to the sellers. 

Hahaha we should have a different thread just for this joke, what ridiculous event that you see when a buyer wanna bid house in 2021-2022. 

In Bay Area, there're a few stories that Buyer A already had contingency buying property X for $200k above listing. Now coming buyer B really loves this house, the Feng Shui are so great he wants to live in this house ..... so he bribed buyer A for $200k to withdraw his offer. Then he submitted new cash offer for $700k more than listing.

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

You can't almost double the effective wages (with signing bonuses it's pretty much double) and not expect an impact. For the first time fast food work can literally have you above the poverty line and not but an insubstantial amount. So while I was referencing end to end I do believe the doubling of low income had an impact also this time around - particularly on the amazon effect type **** that would be coming over in those container ships, containers that went up 10x. 

Yea, but gas inflation and taco/burrito/enchilada food inflation are actually higher than their temporary wage increase.  So at the end inflation is more felt by them.

For us landlords in BP we live in deflation mode, and there's always an alternative, you don't want high gas price just purchase Nissan leaf, utility expensive ? install sunrun, Your meat expensive ? go vegan or purchase from Restaurant Depot LOL.

In the end, inflation is going to hurt service-class workers/minimum wage.

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

You can't almost double the effective wages (with signing bonuses it's pretty much double) and not expect an impact. For the first time fast food work can literally have you above the poverty line and not but an insubstantial amount. So while I was referencing end to end I do believe the doubling of low income had an impact also this time around - particularly on the amazon effect type **** that would be coming over in those container ships, containers that went up 10x. 

Yea, but gas inflation and taco/burrito/enchilada food inflation are actually higher than their temporary wage increase.  So at the end inflation is more felt by them.

For us landlords in BP we live in deflation mode, and there's always an alternative, you don't want high gas price just purchase Nissan leaf, utility expensive ? install sunrun, Your meat expensive ? go vegan or purchase from Restaurant Depot LOL.

In the end, inflation is going to hurt service-class workers/minimum wage.

Another area this is going to hurt them is the bracket creep on their taxes and government handouts. With higher base wages, entities aren’t adjusting fast enough, so these workers despite having lower disposable income from inflation, they are also losing out on govt benefits and paying actual taxes now, losing tax credits, etc. also it’s worse because the Covid relief act now forces tax reporting on the part time gig economy, and they need to pay self employment tax on that, plus tax filing assistance for “small business”. 

[Greg R.]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @John Carbone:

ginning of the year. Trust me, several months ago they would have gotten 50K over list at these prices. 

I think those all FOMO overbid buyers are created by the hallucinations of the realtors ... LOL the irrational exuberance meets agent that keeps saying we have no more house to sell

Yup. This doesn't apply to them all, but many realtors are the ones responsible for a lot of the reckless buying that caused the bubble. Most of them were advising their clients that if they wanted "a chance to buy" a house they needed to do this... 1) Go in 100k over list, 2) no inspection, 3) waive appraisal contingency  4) degrade yourself by begging the sellers to be so gracious to let you buy their house for 100k over value with a pathetic letter, 5) donate a vital organ to the sellers. 

Hahaha we should have a different thread just for this joke, what ridiculous event that you see when a buyer wanna bid house in 2021-2022. 

In Bay Area, there're a few stories that Buyer A already had contingency buying property X for $200k above listing. Now coming buyer B really loves this house, the Feng Shui are so great he wants to live in this house ..... so he bribed buyer A for $200k to withdraw his offer. Then he submitted new cash offer for $700k more than listing.

Wow... the desperation is real. It's really more a fusion of desperation and extreme stupidity. I guess the "less stupid" one in this situation came out great. He won the bid on the house, which made him the loser. But then, somehow, someone more stupid than him came along and bailed him out by paying him $200k cash to withdraw the offer? Amazing. 

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @John Carbone:

ginning of the year. Trust me, several months ago they would have gotten 50K over list at these prices. 

I think those all FOMO overbid buyers are created by the hallucinations of the realtors ... LOL the irrational exuberance meets agent that keeps saying we have no more house to sell

Yup. This doesn't apply to them all, but many realtors are the ones responsible for a lot of the reckless buying that caused the bubble. Most of them were advising their clients that if they wanted "a chance to buy" a house they needed to do this... 1) Go in 100k over list, 2) no inspection, 3) waive appraisal contingency  4) degrade yourself by begging the sellers to be so gracious to let you buy their house for 100k over value with a pathetic letter, 5) donate a vital organ to the sellers. 

Hahaha we should have a different thread just for this joke, what ridiculous event that you see when a buyer wanna bid house in 2021-2022. 

In Bay Area, there're a few stories that Buyer A already had contingency buying property X for $200k above listing. Now coming buyer B really loves this house, the Feng Shui are so great he wants to live in this house ..... so he bribed buyer A for $200k to withdraw his offer. Then he submitted new cash offer for $700k more than listing.
 

@James Hamling probably has some funny stories, but he would never tell them. He’s saving them for 10 years from now, when he will proclaim he “predicted” the 2022/2023 housing bust. 

I listened to the lennar 3q earnings (technology is amazing), and what I heard on there (reality) does not reflect at all at what James has been saying about “Kohl’s” strategy of mark downs. Actually they said Minneapolis  is 1 of 7 areas on their hardest hit areas (3rd tier). Ironically dfw was only in their 2nd tier and we are seeing 20 percent price cuts as evidenced yesterday. 

They plan to do whatever it takes to match housing affordability with dynamic house pricing for targeted regions. They “wanted” the original asking price but higher rates are forcing them to be aggressive on price cuts. Not sure which executives you are speaking to at lennar there, but everything you say is the total opposite of what they are actually doing as part of their strategy. 

The kohl’s discount strategy you utilize may work on low skilled workers, but anyone else it makes you look desperate. Pricing it right initially is always the best thing to do as a realtor. You want to get as many people interested to get a bidding war. Home builders have ALWAYS held firm on base price to protect the values in the communities. The fact they are now cutting actual prices means they have exhausted all other offers with no bids (lennar is admitting this). So at this point either you are lying or you are just not as good at your job as you claim to be. You can be both, but can’t be neither. 

[Greg R.]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @John Carbone:

ginning of the year. Trust me, several months ago they would have gotten 50K over list at these prices. 

I think those all FOMO overbid buyers are created by the hallucinations of the realtors ... LOL the irrational exuberance meets agent that keeps saying we have no more house to sell

Yup. This doesn't apply to them all, but many realtors are the ones responsible for a lot of the reckless buying that caused the bubble. Most of them were advising their clients that if they wanted "a chance to buy" a house they needed to do this... 1) Go in 100k over list, 2) no inspection, 3) waive appraisal contingency  4) degrade yourself by begging the sellers to be so gracious to let you buy their house for 100k over value with a pathetic letter, 5) donate a vital organ to the sellers. 

Hahaha we should have a different thread just for this joke, what ridiculous event that you see when a buyer wanna bid house in 2021-2022. 

In Bay Area, there're a few stories that Buyer A already had contingency buying property X for $200k above listing. Now coming buyer B really loves this house, the Feng Shui are so great he wants to live in this house ..... so he bribed buyer A for $200k to withdraw his offer. Then he submitted new cash offer for $700k more than listing.
 

@James Hamling probably has some funny stories, but he would never tell them. He’s saving them for 10 years from now, when he will proclaim he “predicted” the 2022/2023 housing bust. 

I listened to the lennar 3q earnings (technology is amazing), and what I heard on there (reality) does not reflect at all at what James has been saying about “Kohl’s” strategy of mark downs. Actually they said Minneapolis  is 1 of 7 areas on their hardest hit areas (3rd tier). Ironically dfw was only in their 2nd tier and we are seeing 20 percent price cuts as evidenced yesterday. 

They plan to do whatever it takes to match housing affordability with dynamic house pricing for targeted regions. They “wanted” the original asking price but higher rates are forcing them to be aggressive on price cuts. Not sure which executives you are speaking to at lennar there, but everything you say is the total opposite of what they are actually doing as part of their strategy. 

The kohl’s discount strategy you utilize may work on low skilled workers, but anyone else it makes you look desperate. Pricing it right initially is always the best thing to do as a realtor. You want to get as many people interested to get a bidding war. Home builders have ALWAYS held firm on base price to protect the values in the communities. The fact they are now cutting actual prices means they have exhausted all other offers with no bids. So at this point either you are lying or you are just not as good at your job as you claim to be. You can be both, but can’t be neither. 

I think @James Hamling blocked some of us... He hasn't replied to any of my tags over the last week or so. I guess that's his "go-to" when he can no longer defend his stance and doesn't want to engage any longer. 

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

 Rents San Diego county wide have continued going up even as RE prices have fallen. YOY  in my market the rent appreciation has averaged over 10%.  $4k was always high rent for that unit.  Rentometer lists the average as $3450 based on six 4 BR comps.  It also shows that the highest rent ever for that unit is the current rent.

 This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550

https://sandiego.craigslist.or...

https://sandiego.craigslist.or...

 This is from your market San Diego, these homes are owned by OpenDoor , someone posted it in SA:

San Diego,3BR,1000 sqft

05/26 - OPEN bought it for $945,500
06/07 - they Listed it for $985,000
06/17 - they dropped the price to $957,000
07/08 - they dropped the price to $927,000
07/22 - they dropped the price to $887,000
08/04 - they dropped the price to $859,000
08/25 - they dropped the price to $849,000
09/15 - they dropped the price to $839,000

also in san Diego, OPEN owned:

bought the property on May 6th for $767,500.
May 16th - Listed for $792,000. 10 day Rehabs
June 3rd - price drop to $782,000
June 24th - price drop to $778,000
July 8th - price drop to $742,000
July 22nd - price drop to $705,000
Sept 1st - price drop to $693,000

These 'crazy business model company' has long-term debt of approx. ~4B with inventory assets sitting at ~6B. 

But they also said they will have 20-30% revenue/gross margin increase in 2024.

I guess I would do similar to them, I will think to buy a house only in 2024.

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Another area this is going to hurt them is the bracket creep on their taxes and government handouts. With higher base wages, entities aren’t adjusting fast enough, so these workers despite having lower disposable income from inflation, they are also losing out on govt benefits and paying actual taxes now, losing tax credits, etc. also it’s worse because the Covid relief act now forces tax reporting on the part time gig economy, and they need to pay self employment tax on that, plus tax filing assistance for “small business”. 

Btw Do you read the news a few days ago that for the first time, Fed is making a loss this month ?

Also today's news there's an indication Fed may want to repurchase Treasury again.

https://www.reuters.com/articl...

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

You can't almost double the effective wages (with signing bonuses it's pretty much double) and not expect an impact. For the first time fast food work can literally have you above the poverty line and not but an insubstantial amount. So while I was referencing end to end I do believe the doubling of low income had an impact also this time around - particularly on the amazon effect type **** that would be coming over in those container ships, containers that went up 10x. 

Yea, but gas inflation and taco/burrito/enchilada food inflation are actually higher than their temporary wage increase.  So at the end inflation is more felt by them.

For us landlords in BP we live in deflation mode, and there's always an alternative, you don't want high gas price just purchase Nissan leaf, utility expensive ? install sunrun, Your meat expensive ? go vegan or purchase from Restaurant Depot LOL.

In the end, inflation is going to hurt service-class workers/minimum wage.

I acknowledged all that. The inflation doesn't account for all of the gap of $20k to $35k. That's a massive swing. 

Regardless though I don't believe the wages are temporary not really. It's one of the reasons why I don't see housing/rents dropping really. Between inflation thats happened and the raises we will stagnate and just end up with a new norm. You don't really typically see reductions. Instead with a combination of price hikes and inflation you end up with the "new baseline". hence my predictions on stagnation across board next 18-24 months. 

[Greg R.]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Dan H.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

 Rents San Diego county wide have continued going up even as RE prices have fallen. YOY  in my market the rent appreciation has averaged over 10%.  $4k was always high rent for that unit.  Rentometer lists the average as $3450 based on six 4 BR comps.  It also shows that the highest rent ever for that unit is the current rent.

 This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550

https://sandiego.craigslist.or...

https://sandiego.craigslist.or...

 This is from your market San Diego, these homes are owned by OpenDoor , someone posted it in SA:

San Diego,3BR,1000 sqft

05/26 - OPEN bought it for $945,500
06/07 - they Listed it for $985,000
06/17 - they dropped the price to $957,000
07/08 - they dropped the price to $927,000
07/22 - they dropped the price to $887,000
08/04 - they dropped the price to $859,000
08/25 - they dropped the price to $849,000
09/15 - they dropped the price to $839,000

also in san Diego, OPEN owned:

bought the property on May 6th for $767,500.
May 16th - Listed for $792,000. 10 day Rehabs
June 3rd - price drop to $782,000
June 24th - price drop to $778,000
July 8th - price drop to $742,000
July 22nd - price drop to $705,000
Sept 1st - price drop to $693,000

These 'crazy business model company' has long-term debt of approx. ~4B with inventory assets sitting at ~6B. 

But they also said they will have 20-30% revenue/gross margin increase in 2024.

I guess I would do similar to them, I will think to buy a house only in 2024.

Lol wow. Sucks for them.

I'm personally not feeling too bad for these flippers. Many of them have been making an absolute killing over the last couple years. They have no one to blame but themselves for drinking the kool aid and thinking that we'd continue like that forever. 

Some of them are just downright greedy too. I see some properties that flippers bought, literally did nothing to them, and list a month later for 100k-200k price increase. 

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Another area this is going to hurt them is the bracket creep on their taxes and government handouts. With higher base wages, entities aren’t adjusting fast enough, so these workers despite having lower disposable income from inflation, they are also losing out on govt benefits and paying actual taxes now, losing tax credits, etc. also it’s worse because the Covid relief act now forces tax reporting on the part time gig economy, and they need to pay self employment tax on that, plus tax filing assistance for “small business”. 

Btw Do you read the news a few days ago that for the first time, Fed is making a loss this month ?

Also today's news there's an indication Fed may want to repurchase Treasury again.

https://www.reuters.com/articl...

Interesting, the bond market definitely is moving the equities market. I’m watching the 10 year yield, once we got back to 4 percent today stocks tanked. If we breach 4 percent significantly, look out below. 

[Carlos Ptriawan]

this will make everyone happy.

[Luka Milicevic]

Most popular post of all time? 

[James Hamling]

Quote from @Greg R.:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @John Carbone:

ginning of the year. Trust me, several months ago they would have gotten 50K over list at these prices. 

I think those all FOMO overbid buyers are created by the hallucinations of the realtors ... LOL the irrational exuberance meets agent that keeps saying we have no more house to sell

Yup. This doesn't apply to them all, but many realtors are the ones responsible for a lot of the reckless buying that caused the bubble. Most of them were advising their clients that if they wanted "a chance to buy" a house they needed to do this... 1) Go in 100k over list, 2) no inspection, 3) waive appraisal contingency  4) degrade yourself by begging the sellers to be so gracious to let you buy their house for 100k over value with a pathetic letter, 5) donate a vital organ to the sellers. 

Hahaha we should have a different thread just for this joke, what ridiculous event that you see when a buyer wanna bid house in 2021-2022. 

In Bay Area, there're a few stories that Buyer A already had contingency buying property X for $200k above listing. Now coming buyer B really loves this house, the Feng Shui are so great he wants to live in this house ..... so he bribed buyer A for $200k to withdraw his offer. Then he submitted new cash offer for $700k more than listing.
 

@James Hamling probably has some funny stories, but he would never tell them. He’s saving them for 10 years from now, when he will proclaim he “predicted” the 2022/2023 housing bust. 

I listened to the lennar 3q earnings (technology is amazing), and what I heard on there (reality) does not reflect at all at what James has been saying about “Kohl’s” strategy of mark downs. Actually they said Minneapolis  is 1 of 7 areas on their hardest hit areas (3rd tier). Ironically dfw was only in their 2nd tier and we are seeing 20 percent price cuts as evidenced yesterday. 

They plan to do whatever it takes to match housing affordability with dynamic house pricing for targeted regions. They “wanted” the original asking price but higher rates are forcing them to be aggressive on price cuts. Not sure which executives you are speaking to at lennar there, but everything you say is the total opposite of what they are actually doing as part of their strategy. 

The kohl’s discount strategy you utilize may work on low skilled workers, but anyone else it makes you look desperate. Pricing it right initially is always the best thing to do as a realtor. You want to get as many people interested to get a bidding war. Home builders have ALWAYS held firm on base price to protect the values in the communities. The fact they are now cutting actual prices means they have exhausted all other offers with no bids. So at this point either you are lying or you are just not as good at your job as you claim to be. You can be both, but can’t be neither. 

I think @James Hamling blocked some of us... He hasn't replied to any of my tags over the last week or so. I guess that's his "go-to" when he can no longer defend his stance and doesn't want to engage any longer. 

 There is no point in responding to your inventions and day dreams of things. Every time I hit with FACTS you all hit back with fantasy, feelings and assorted other garbage. 

You know nothing about how Real Estate Agency works because your not one, nor have ever been one, yet you speak and pretend your an authority on the item of which you have 0 knowledge or experience in, because why, because you meet a realtor before, you spoke to a realtor, so now your an expert on it? 

Among my designations I am a CERTIFIED PSA. Yes, I know everything about pricing strategies in Real Estate, literally, that's what my certification with NAR means, literally, expert in pricing strategies.

I am also a licensed building contractor, with decades experience. 

Also, I am ACTIVLY in the residential development world, right now today. I do not speak from theory or feelings like yourself, I speak from FACTS, actual live time information directly from the person DOING IT.     

So all the readers here on BP have a choice. They can choose to listen to yourself and the various arm-chair quarterbacks on directions of things and whats what because your feeling are so-and-so or you found an article by whomever saying whatever. Which by the way, i can find articles saying congress is reptilian overlords trying to harvest humans for food, welcome to the internet age, there is articles for any and every opinion, echo-chambers gallore. 

OR, the good people of BP can choose to read what I have to share as a real-life FT Investor, as a Nationally Ranked Senior REI agent actively doing millions in deals, who is on-the-ground involved IN development, who is advising and representing the i-Buyers, who is inside the board rooms, who is part of the decision making teams, who knows the pulse of the market because I am part of the market makers.

It's a choice of listening to either those who watch with opinion, or those DOING and sharing insight. 

Who knows better on the football game, a NFL coach, or the hot dog vendor in the stands? 

[John Carbone]

Quote from @James Hamling:

Quote from @Greg R.:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @John Carbone:

ginning of the year. Trust me, several months ago they would have gotten 50K over list at these prices. 

I think those all FOMO overbid buyers are created by the hallucinations of the realtors ... LOL the irrational exuberance meets agent that keeps saying we have no more house to sell

Yup. This doesn't apply to them all, but many realtors are the ones responsible for a lot of the reckless buying that caused the bubble. Most of them were advising their clients that if they wanted "a chance to buy" a house they needed to do this... 1) Go in 100k over list, 2) no inspection, 3) waive appraisal contingency  4) degrade yourself by begging the sellers to be so gracious to let you buy their house for 100k over value with a pathetic letter, 5) donate a vital organ to the sellers. 

Hahaha we should have a different thread just for this joke, what ridiculous event that you see when a buyer wanna bid house in 2021-2022. 

In Bay Area, there're a few stories that Buyer A already had contingency buying property X for $200k above listing. Now coming buyer B really loves this house, the Feng Shui are so great he wants to live in this house ..... so he bribed buyer A for $200k to withdraw his offer. Then he submitted new cash offer for $700k more than listing.
 

@James Hamling probably has some funny stories, but he would never tell them. He’s saving them for 10 years from now, when he will proclaim he “predicted” the 2022/2023 housing bust. 

I listened to the lennar 3q earnings (technology is amazing), and what I heard on there (reality) does not reflect at all at what James has been saying about “Kohl’s” strategy of mark downs. Actually they said Minneapolis  is 1 of 7 areas on their hardest hit areas (3rd tier). Ironically dfw was only in their 2nd tier and we are seeing 20 percent price cuts as evidenced yesterday. 

They plan to do whatever it takes to match housing affordability with dynamic house pricing for targeted regions. They “wanted” the original asking price but higher rates are forcing them to be aggressive on price cuts. Not sure which executives you are speaking to at lennar there, but everything you say is the total opposite of what they are actually doing as part of their strategy. 

The kohl’s discount strategy you utilize may work on low skilled workers, but anyone else it makes you look desperate. Pricing it right initially is always the best thing to do as a realtor. You want to get as many people interested to get a bidding war. Home builders have ALWAYS held firm on base price to protect the values in the communities. The fact they are now cutting actual prices means they have exhausted all other offers with no bids. So at this point either you are lying or you are just not as good at your job as you claim to be. You can be both, but can’t be neither. 

I think @James Hamling blocked some of us... He hasn't replied to any of my tags over the last week or so. I guess that's his "go-to" when he can no longer defend his stance and doesn't want to engage any longer. 

 There is no point in responding to your inventions and day dreams of things. Every time I hit with FACTS you all hit back with fantasy, feelings and assorted other garbage. 

You know nothing about how Real Estate Agency works because your not one, nor have ever been one, yet you speak and pretend your an authority on the item of which you have 0 knowledge or experience in, because why, because you meet a realtor before, you spoke to a realtor, so now your an expert on it? 

Among my designations I am a CERTIFIED PSA. Yes, I know everything about pricing strategies in Real Estate, literally, that's what my certification with NAR means, literally, expert in pricing strategies.

I am also a licensed building contractor, with decades experience. 

Also, I am ACTIVLY in the residential development world, right now today. I do not speak from theory or feelings like yourself, I speak from FACTS, actual live time information directly from the person DOING IT.     

So all the readers here on BP have a choice. They can choose to listen to yourself and the various arm-chair quarterbacks on directions of things and whats what because your feeling are so-and-so or you found an article by whomever saying whatever. Which by the way, i can find articles saying congress is reptilian overlords trying to harvest humans for food, welcome to the internet age, there is articles for any and every opinion, echo-chambers gallore. 

OR, the good people of BP can choose to read what I have to share as a real-life FT Investor, as a Nationally Ranked Senior REI agent actively doing millions in deals, who is on-the-ground involved IN development, who is advising and representing the i-Buyers, who is inside the board rooms, who is part of the decision making teams, who knows the pulse of the market because I am part of the market makers.

It's a choice of listening to either those who watch with opinion, or those DOING and sharing insight. 

Who knows better on the football game, a NFL coach, or the hot dog vendor in the stands? 

Why should people listen to someone who claims be “x” when publicly traded builders are disputing what you say? Are they not credible? Are the price cuts they are doing not real?

Why do your facts not match with the facts of “known and legitimate “  industry experts at the top of publicly traded corporations?

who knows better, lennar CFO and CEO or James hamling selling rural minessota real estate?

 Depending on the coach, it could be the hot dog vendor btw….in this case you may be the real estate hot dog guy. 

[James Hamling]

Quote from @Carlos Ptriawan:

okay, the middle class is a different story, that one I agree with you. I thought you want to discuss low minimum wage only.

Back to basic: It's consumerism that triggers inflation.
Consumerism is always triggered by the middle class and upper middle class when they receive more income.

[ If everyone is living like the service industry worker, the CPI would be 1% forever; it's the uppre middle class guy that keep buying the latest Porsche that drives up inflation LOL ]

...

You are correct when saying the rent had increased, but it's not because of the minimum wage had increased (this is only that I want to pointed out), but it's because the middle class and upper higher class have more income now (from economic growth activity).

 Was there some huge Porsche shortage the last couple years I was not aware of? 

Inflation is by far driven by the consumer class which is the low and middle income NOT the upper income. This is well known, it's the central reason they keep discussing why trickle down does not work, because upper class INVESTS there disposable income, not frivolous spending, nothing like the lower brackets.     Go into any Sec8 housing, what will you see, maybe $400 in savings BUT they got 23 pairs of air jordans per person, a flat panel tv in ever room, x-box, PlayStation of 3. Clothes galore. 

Poor people are poor because they spend there money on "stuff", where as wealthy people are wealthy because they invest. This is simplistic facts.     I know, the bleeding hearts will pour out saying how dare I. How dare I what, say the obvious truth?!     It is the central mindset that literally sets a person in which tier.   

I came from epic immigrant poverty myself. My family elevated ourselves from it, like so many other do and have. It's not complicated. Poverty is a reflection of your position in life which can come from circumstance or self actions. Most, and I do mean MOST are self-inflicted poverty, which comes from there consumerism. NOT Porsche purchases, wtf! 

If a person spends frivolously guess what, they won't be wealthy, because there burning it. 

Inflation via over-heated commerce IS a poverty/lower class driven action. And what did we have the last 2 years? A epic handout to all those people, a weekly/ monthly stipend SO THEY WOULD SPEND. That was literally the design, give people $ to spend.     The Gov policy was to create inflation, literally. And if they say they had no idea it would result in such they should immediately fire themselves because there not fit for the job! A 3rd grade classroom would do better. 

[John Carbone]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

okay, the middle class is a different story, that one I agree with you. I thought you want to discuss low minimum wage only.

Back to basic: It's consumerism that triggers inflation.
Consumerism is always triggered by the middle class and upper middle class when they receive more income.

[ If everyone is living like the service industry worker, the CPI would be 1% forever; it's the uppre middle class guy that keep buying the latest Porsche that drives up inflation LOL ]

...

You are correct when saying the rent had increased, but it's not because of the minimum wage had increased (this is only that I want to pointed out), but it's because the middle class and upper higher class have more income now (from economic growth activity).

 Was there some huge Porsche shortage the last couple years I was not aware of? 

Inflation is by far driven by the consumer class which is the low and middle income NOT the upper income. This is well known, it's the central reason they keep discussing why trickle down does not work, because upper class INVESTS there disposable income, not frivolous spending, nothing like the lower brackets.     Go into any Sec8 housing, what will you see, maybe $400 in savings BUT they got 23 pairs of air jordans per person, a flat panel tv in ever room, x-box, PlayStation of 3. Clothes galore. 

Poor people are poor because they spend there money on "stuff", where as wealthy people are wealthy because they invest. This is simplistic facts.     I know, the bleeding hearts will pour out saying how dare I. How dare I what, say the obvious truth?!     It is the central mindset that literally sets a person in which tier.   

I came from epic immigrant poverty myself. My family elevated ourselves from it, like so many other do and have. It's not complicated. Poverty is a reflection of your position in life which can come from circumstance or self actions. Most, and I do mean MOST are self-inflicted poverty, which comes from there consumerism. NOT Porsche purchases, wtf! 

If a person spends frivolously guess what, they won't be wealthy, because there burning it. 

Inflation via over-heated commerce IS a poverty/lower class driven action. And what did we have the last 2 years? A epic handout to all those people, a weekly/ monthly stipend SO THEY WOULD SPEND. That was literally the design, give people $ to spend.     The Gov policy was to create inflation, literally. And if they say they had no idea it would result in such they should immediately fire themselves because there not fit for the job! A 3rd grade classroom would do better. 

^^^Finally something I can agree with James on for the first time in a while - and more domestic oil production. 

Nobody questions your knowledge or work ethic. I just think you are in your REI bubble and can't see out of it. Eventually you will though.

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Another area this is going to hurt them is the bracket creep on their taxes and government handouts. With higher base wages, entities aren’t adjusting fast enough, so these workers despite having lower disposable income from inflation, they are also losing out on govt benefits and paying actual taxes now, losing tax credits, etc. also it’s worse because the Covid relief act now forces tax reporting on the part time gig economy, and they need to pay self employment tax on that, plus tax filing assistance for “small business”. 

Btw Do you read the news a few days ago that for the first time, Fed is making a loss this month ?

Also today's news there's an indication Fed may want to repurchase Treasury again.

https://www.reuters.com/articl...

 Yeah, what did I say, were gonna get into a Twilight Zone here soon where there's going to be inflation creation actions simultaneous with inflation reduction actions.     Welcome to the "New Normal".     

I think the #1 best investment at this time will be various pot-stocks because everyone is going to need some gummies on the regular soon. Bread and Games my friend, Bread-and-Games.......

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

okay, the middle class is a different story, that one I agree with you. I thought you want to discuss low minimum wage only.

Back to basic: It's consumerism that triggers inflation.
Consumerism is always triggered by the middle class and upper middle class when they receive more income.

[ If everyone is living like the service industry worker, the CPI would be 1% forever; it's the uppre middle class guy that keep buying the latest Porsche that drives up inflation LOL ]

...

You are correct when saying the rent had increased, but it's not because of the minimum wage had increased (this is only that I want to pointed out), but it's because the middle class and upper higher class have more income now (from economic growth activity).

 Was there some huge Porsche shortage the last couple years I was not aware of? 

Inflation is by far driven by the consumer class which is the low and middle income NOT the upper income. This is well known, it's the central reason they keep discussing why trickle down does not work, because upper class INVESTS there disposable income, not frivolous spending, nothing like the lower brackets.     Go into any Sec8 housing, what will you see, maybe $400 in savings BUT they got 23 pairs of air jordans per person, a flat panel tv in ever room, x-box, PlayStation of 3. Clothes galore. 

Poor people are poor because they spend there money on "stuff", where as wealthy people are wealthy because they invest. This is simplistic facts.     I know, the bleeding hearts will pour out saying how dare I. How dare I what, say the obvious truth?!     It is the central mindset that literally sets a person in which tier.   

I came from epic immigrant poverty myself. My family elevated ourselves from it, like so many other do and have. It's not complicated. Poverty is a reflection of your position in life which can come from circumstance or self actions. Most, and I do mean MOST are self-inflicted poverty, which comes from there consumerism. NOT Porsche purchases, wtf! 

If a person spends frivolously guess what, they won't be wealthy, because there burning it. 

Inflation via over-heated commerce IS a poverty/lower class driven action. And what did we have the last 2 years? A epic handout to all those people, a weekly/ monthly stipend SO THEY WOULD SPEND. That was literally the design, give people $ to spend.     The Gov policy was to create inflation, literally. And if they say they had no idea it would result in such they should immediately fire themselves because there not fit for the job! A 3rd grade classroom would do better. 

^^^Finally something I can agree with James on for the first time in a while - and more domestic oil production. 

Nobody questions your knowledge or work ethic. I just think you are in your REI bubble and can't see out of it. Eventually you will though.

 You see a future where inflation deflates the economy and all prices.     I see a future of epic political fuc#ery, where inflation raises the prices of everything, even more so assets, by allowance if not design, making a disparity gap between the have and have-not's so wide that it would take generations to breach the divide.     I have every faith in an elitist ran governance that has no care for the capacity of "average" persons beyond there ability to best perform there duties of good little consumers. 

Real Estate has, for eons, stood as the #1 hedge against inflation. It is and will stand true again through this test, yet again. Wait and see. 

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

okay, the middle class is a different story, that one I agree with you. I thought you want to discuss low minimum wage only.

Back to basic: It's consumerism that triggers inflation.
Consumerism is always triggered by the middle class and upper middle class when they receive more income.

[ If everyone is living like the service industry worker, the CPI would be 1% forever; it's the uppre middle class guy that keep buying the latest Porsche that drives up inflation LOL ]

...

You are correct when saying the rent had increased, but it's not because of the minimum wage had increased (this is only that I want to pointed out), but it's because the middle class and upper higher class have more income now (from economic growth activity).

 Was there some huge Porsche shortage the last couple years I was not aware of? 

Inflation is by far driven by the consumer class which is the low and middle income NOT the upper income. This is well known, it's the central reason they keep discussing why trickle down does not work, because upper class INVESTS there disposable income, not frivolous spending, nothing like the lower brackets.     Go into any Sec8 housing, what will you see, maybe $400 in savings BUT they got 23 pairs of air jordans per person, a flat panel tv in ever room, x-box, PlayStation of 3. Clothes galore. 

Poor people are poor because they spend there money on "stuff", where as wealthy people are wealthy because they invest. This is simplistic facts.     I know, the bleeding hearts will pour out saying how dare I. How dare I what, say the obvious truth?!     It is the central mindset that literally sets a person in which tier.   

I came from epic immigrant poverty myself. My family elevated ourselves from it, like so many other do and have. It's not complicated. Poverty is a reflection of your position in life which can come from circumstance or self actions. Most, and I do mean MOST are self-inflicted poverty, which comes from there consumerism. NOT Porsche purchases, wtf! 

If a person spends frivolously guess what, they won't be wealthy, because there burning it. 

Inflation via over-heated commerce IS a poverty/lower class driven action. And what did we have the last 2 years? A epic handout to all those people, a weekly/ monthly stipend SO THEY WOULD SPEND. That was literally the design, give people $ to spend.     The Gov policy was to create inflation, literally. And if they say they had no idea it would result in such they should immediately fire themselves because there not fit for the job! A 3rd grade classroom would do better. 

^^^Finally something I can agree with James on for the first time in a while - and more domestic oil production. 

Nobody questions your knowledge or work ethic. I just think you are in your REI bubble and can't see out of it. Eventually you will though.

 You see a future where inflation deflates the economy and all prices.     I see a future of epic political fuc#ery, where inflation raises the prices of everything, even more so assets, by allowance if not design, making a disparity gap between the have and have-not's so wide that it would take generations to breach the divide.     I have every faith in an elitist ran governance that has no care for the capacity of "average" persons beyond there ability to best perform there duties of good little consumers. 

Real Estate has, for eons, stood as the #1 hedge against inflation. It is and will stand true again through this test, yet again. Wait and see. 

 Only temporary deflation, eventually fed will realize the only thing to do is reinflate. I don’t think anybody on BP thinks RE is a bad inflation hedge long term. Fed is giving everyone a massive gift now to just wait for 12-18 months.