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. 

[Michael B.]

Quote from @David Song:

@Greg R.

Housing prices will always go up. Buy anytime. - bigger pockets.com

Reality: numerous REI lost their life savings in 2009 and maybe 2022. Over leveraging, insufficient reserve, short term loan with balloon payment, etc.

Flippers bought in Q1 2022 will learn the lesson now. Many of them are losing their shirt. None will tell you publicly.

The price decline started in April 2022, and has been declining for the last 4 months. The bottom has not been reached yet. This is nationwide, from CA to Texas, everywhere. 

What do you guys think about miami Market? 

[Chris Clothier]

Quote from @Nicholas L.:

@Chris Clothier

one possible way of reconciling the data / perspectives here is the difference at price points and inventory type, which @Carlos Ptriawan has tried to get it.  some big drops at high price points which I expect you are not seeing.  like i said many pages ago, if you're David Greene looking for houses in the $1M-$3M dollar range to do creative things with, it's a great time to buy.  for us at or below the median, it's still tough!

and I'm one guy in one market looking for a couple deals a year, so all I can offer is my own anecdotal experience - but well priced inventory below $500K still gets snapped up...

 well put.  We all can be experiencing different results in the same cities at the same time.  This can lead each of us to have differing conclusions and at times can lead us to look at the same data from different perspectives and come to different conclusions.  I appreciate the feedback.

[Chris Clothier]

Quote from @Nicholas L.:

@Chris Clothier

great post.  you and @James Hamling agree strongly on the prospect of institutional investors continuing to push into single family.

do you think that will continue to be concentrated in the sunbelt states?

i suppose if building picks up, you could even see a scenario where institutional investors buy up more properties, but their share holds steady or decreases.

based on my research there are still many states where they effectively have 0 SFH inventory.

A lot of markets are still well behind normal inventory levels for SFH. I think the CEO of Redfin stated it perfectly recently.

“My take is that because builders and iBuyers account for more inventory, that leads to a faster correction. We’re one of them, we’re an iBuyer,” Kelman says. “We notice immediately when fewer people are on our website and fewer are signing up for tours…We’re sitting on $350 million worth of homes for sale that we bought with our own money, or worse bought with borrowed money. And what we always told investors is that we would protect our balance sheet by acting quickly. We don’t have hope as a strategy. We immediately started marking down things.”

Now, the one thing we know from being inside the industry is that much of their inventory is bought up by institutional money.  That money is not as affected by the borrowing rates because at this point they have securitized and re-securitized their portfolios so many times that they have driven their borrowing costs to levels we could only dream of.  Plus, they are buying these properties at discounts.  They discounts show up in some cases as lowering the "value" of surrounding homes and could certainly be a factor in lowering median pricing for an area.  If you do the math Redfin is only sitting on 1,000-1,500 properties.  I read recently that OpenDoor still has north of 13,000 homes.  These are not producing revenue.  They are sitting and waiting.  If they subscribe to Redfin's strategy like Kelman thinks they will, then these too will be sold at discount but probably heavily to institutional investors.  

On the builder side, we recently had a builder sell the remaining 300 homes of his subdivision at 20% below list price to an institutional investor.  He was kind enough to renegotiate with us realizing the predicament it would cause for us but we were only a fraction of the neighborhood.  

This is nothing more than one more piece of a puzzle that only matters locally wherever they institutions are buying.  They will begin to move to secondary and tertiary markets and smaller over time as they begin to diversify their yields across more markets and prepare to have multiple channels of dispensation.  Of course, they all say they are in for the longhair and if that is the case, it could significantly inflate the housing market even more, regardless of other historical drivers.  

For now, like I posted earlier, this is just one puzzle piece and it is not affecting my buying decisions only informing them.

[Carlos Ptriawan]

Quote from @Chris Clothier:

Quote from @Nicholas L.:

@Chris Clothier

great post.  you and @James Hamling agree strongly on the prospect of institutional investors continuing to push into single family.

do you think that will continue to be concentrated in the sunbelt states?

i suppose if building picks up, you could even see a scenario where institutional investors buy up more properties, but their share holds steady or decreases.

based on my research there are still many states where they effectively have 0 SFH inventory.

A lot of markets are still well behind normal inventory levels for SFH. I think the CEO of Redfin stated it perfectly recently.

“My take is that because builders and iBuyers account for more inventory, that leads to a faster correction. We’re one of them, we’re an iBuyer,” Kelman says. “We notice immediately when fewer people are on our website and fewer are signing up for tours…We’re sitting on $350 million worth of homes for sale that we bought with our own money, or worse bought with borrowed money. And what we always told investors is that we would protect our balance sheet by acting quickly. We don’t have hope as a strategy. We immediately started marking down things.”

Now, the one thing we know from being inside the industry is that much of their inventory is bought up by institutional money.  That money is not as affected by the borrowing rates because at this point they have securitized and re-securitized their portfolios so many times that they have driven their borrowing costs to levels we could only dream of.  Plus, they are buying these properties at discounts.  They discounts show up in some cases as lowering the "value" of surrounding homes and could certainly be a factor in lowering median pricing for an area.  If you do the math Redfin is only sitting on 1,000-1,500 properties.  I read recently that OpenDoor still has north of 13,000 homes.  These are not producing revenue.  They are sitting and waiting.  If they subscribe to Redfin's strategy like Kelman thinks they will, then these too will be sold at discount but probably heavily to institutional investors.  

On the builder side, we recently had a builder sell the remaining 300 homes of his subdivision at 20% below list price to an institutional investor.  He was kind enough to renegotiate with us realizing the predicament it would cause for us but we were only a fraction of the neighborhood.  

This is nothing more than one more piece of a puzzle that only matters locally wherever they institutions are buying.  They will begin to move to secondary and tertiary markets and smaller over time as they begin to diversify their yields across more markets and prepare to have multiple channels of dispensation.  Of course, they all say they are in for the longhair and if that is the case, it could significantly inflate the housing market even more, regardless of other historical drivers.  

For now, like I posted earlier, this is just one puzzle piece and it is not affecting my buying decisions only informing them.

 Some of my generic comments :
- the volatility in-home price especially in markets like AZ, NV is driven by too much Ibuyer activity, that activity seems to cause unnecessary market volatility and bidding wars.

- While company like Opendoor can raise the money thru diluting previous shares and having no-recourse long-term debt, at this current rate, they may not be able to do business in a reckless way anymore. They have to be disciplined in their spending. It's good that they're laying off massively this couple of week. It's a good sign. 

- Currently, 25% of the flipped home from Opendoor is purchased by institution too, this is just a generic number, so when institution is stop buying but would be willing to acquire from the bottom if any, that would trigger a new wave of rebound . At current level they're still in waiting mode.

- The biggest question everybody waiting is what happens when FFR is 5%, how big is the yield of 10Y notes, and how much is 30YFRM at that time ? what is the impact to open door inventory? at what discount level the institution would buy from the bottom? 

- some of the same institutions that purchase a home is also experiencing huge loss this year as their investment in the crypto world is wiped out, or from this fintech that's not going anywhere.

[Chris Clothier]

Quote from @Carlos Ptriawan:

Quote from @Nicholas L.:

@Chris Clothier

one possible way of reconciling the data / perspectives here is the difference at price points and inventory type, which @Carlos Ptriawan has tried to get it.  some big drops at high price points which I expect you are not seeing.  like i said many pages ago, if you're David Greene looking for houses in the $1M-$3M dollar range to do creative things with, it's a great time to buy.  for us at or below the median, it's still tough!

and I'm one guy in one market looking for a couple deals a year, so all I can offer is my own anecdotal experience - but well priced inventory below $500K still gets snapped up...

 This is the data set from our market. Becaue our market is the most that experience price reduction so it's quite valuable I think.

I can't display it in more nicer view :

**Alum Rock (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $847,200 $910,000 $1,051,751 $1,230,000 $935,250
Q3 2022 - $874,500 $870,000 $1,036,500 $1,000,000 $920,000
% Price Change - 3% -4% -1% -19%

***
Central San Jose (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 $545,000 $1,000,000 $1,185,000 $1,592,500 $1,670,000 $1,169,000
Q3 2022 $687,500 $950,000 $1,170,000 $1,245,000 $1,145,000 $1,100,000
% Price Change 26% -5% -1% -22% -31% -6%

***

Evergreen (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,125,000 $1,165,000 $1,675,009 $2,700,000 $1,630,000
Q3 2022 - $1,169,750 $1,250,000 $1,625,000 $1,852,500 $1,472,500
% Price Change - 4% 7% -3% -31% -10%

****
Cambrian (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,404,875 $1,451,000 $1,650,000 $2,410,000 $1,535,000
Q3 2022 - $1,255,000 $1,495,000 $1,775,000 $1,950,000 $1,617,500
% Price Change - -11% 3% 8% -19% 5

****
Willow Glen (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,300,000 $1,650,000 $1,989,944 $2,650,000 $1,770,000
Q3 2022 - $1,498,000 $1,600,000 $2,100,000 $2,500,000 $1,800,000
% Price Change - 15% -3% 6% -6% 2%

***
Milpitas
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,102,500 $1,299,444 $1,582,375 $1,787,500 $1,406,000
Q3 2022 - $1,054,500 $1,281,000 $1,655,000 $1,500,888 $1,425,000
% Price Change - -4% -1% 5% -16% 1

*****
Palo Alto
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 $1,615,350 $2,600,000 $3,130,000 $3,720,000 $4,862,325 $3,500,000
Q3 2022 - $2,690,000 $2,860,000 $3,650,000 $4,200,000 $3,380,000
% Price Change - 3% -9% -2% -14% -3% 

Summary: 80% of sub-market here is showing almost the same pattern. The greatest reduction of negative 12%-30% happened in SINGLE FAMILY MARKET WITH FOUR/FIVE BEDROOM ONLY.  

For regular joe 2/3 BR SF, townhome/condo is also okay where it's pretty much flat market from last year (regressed to Q4 2021 pricing). 

This is how the data should be displayed appropriately to avoid confusion. THere're just too many statistical data error there including even that's coming from Fed. 

Now the problem with those high price luxury homes price reductions, they impacted the statistics so much that when someone said your market dropped 10%, it's actually saying your luxury market is dropping 20%, but your middle income family home is actually only declining 5%.

 Great share and explanation - spot on.

[Jay Hinrichs]

Quote from @Chris Clothier:

Quote from @Carlos Ptriawan:

Quote from @Nicholas L.:

@Chris Clothier

one possible way of reconciling the data / perspectives here is the difference at price points and inventory type, which @Carlos Ptriawan has tried to get it.  some big drops at high price points which I expect you are not seeing.  like i said many pages ago, if you're David Greene looking for houses in the $1M-$3M dollar range to do creative things with, it's a great time to buy.  for us at or below the median, it's still tough!

and I'm one guy in one market looking for a couple deals a year, so all I can offer is my own anecdotal experience - but well priced inventory below $500K still gets snapped up...

 This is the data set from our market. Becaue our market is the most that experience price reduction so it's quite valuable I think.

I can't display it in more nicer view :

**Alum Rock (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $847,200 $910,000 $1,051,751 $1,230,000 $935,250
Q3 2022 - $874,500 $870,000 $1,036,500 $1,000,000 $920,000
% Price Change - 3% -4% -1% -19%

***
Central San Jose (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 $545,000 $1,000,000 $1,185,000 $1,592,500 $1,670,000 $1,169,000
Q3 2022 $687,500 $950,000 $1,170,000 $1,245,000 $1,145,000 $1,100,000
% Price Change 26% -5% -1% -22% -31% -6%

***

Evergreen (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,125,000 $1,165,000 $1,675,009 $2,700,000 $1,630,000
Q3 2022 - $1,169,750 $1,250,000 $1,625,000 $1,852,500 $1,472,500
% Price Change - 4% 7% -3% -31% -10%

****
Cambrian (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,404,875 $1,451,000 $1,650,000 $2,410,000 $1,535,000
Q3 2022 - $1,255,000 $1,495,000 $1,775,000 $1,950,000 $1,617,500
% Price Change - -11% 3% 8% -19% 5

****
Willow Glen (San Jose)
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,300,000 $1,650,000 $1,989,944 $2,650,000 $1,770,000
Q3 2022 - $1,498,000 $1,600,000 $2,100,000 $2,500,000 $1,800,000
% Price Change - 15% -3% 6% -6% 2%

***
Milpitas
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 - $1,102,500 $1,299,444 $1,582,375 $1,787,500 $1,406,000
Q3 2022 - $1,054,500 $1,281,000 $1,655,000 $1,500,888 $1,425,000
% Price Change - -4% -1% 5% -16% 1

*****
Palo Alto
0-1BD 2BD 3BD 4BD 5BD+ ALL
Single Family Median Sales Price Q3 2021 $1,615,350 $2,600,000 $3,130,000 $3,720,000 $4,862,325 $3,500,000
Q3 2022 - $2,690,000 $2,860,000 $3,650,000 $4,200,000 $3,380,000
% Price Change - 3% -9% -2% -14% -3% 

Summary: 80% of sub-market here is showing almost the same pattern. The greatest reduction of negative 12%-30% happened in SINGLE FAMILY MARKET WITH FOUR/FIVE BEDROOM ONLY.  

For regular joe 2/3 BR SF, townhome/condo is also okay where it's pretty much flat market from last year (regressed to Q4 2021 pricing). 

This is how the data should be displayed appropriately to avoid confusion. THere're just too many statistical data error there including even that's coming from Fed. 

Now the problem with those high price luxury homes price reductions, they impacted the statistics so much that when someone said your market dropped 10%, it's actually saying your luxury market is dropping 20%, but your middle income family home is actually only declining 5%.

 Great share and explanation - spot on.

All i can say is I wish I still had my first house I bought in MIlpitas for 79k  3 and 2 brand new Shapel home.. or my  3 and 1 in Palo Alto I paid 185k for LOL. I be rich now if I just never sold  either of those  plus i had another home in Palo alto I was in 700k in 89 I should have kept.. oh well.

[Michael Key]

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

[Carlos Ptriawan]

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

We have not seen the worst that we know.

The real test would be in Feb-Jun 2023 time frame when seasonality to sell increases and FFR is expected to be 5%. 
If 30YFRM is still within 6-7%  with 5%FFR and active inventory increases just a little bit then we may not see much price reduction.

But if inventory is going to 7 months supply and the rate is 8-9% with 10% unemployment, then that could be the worst.

[Greg R.]

Quote from @Chris Clothier:

Quote from @Greg R.:

Quote from @Chris Clothier:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

  Chris, I wish you would have searched a bit more thoroughly. I've posted screenshots (many times) of the price decreases in Austin and Dallas. 

Dallas: peak of the bubble in May 2022 median SOLD price was 490k, as of September 2022 it is 390k. 

 Austin: peak of the bubble in May 2022 median SOLD price was 670k, as of September 2022 it is 563k.

Also, Zillow released a preview of October numbers and Austin (only second to LV) saw the sharpest home value decline. 

YOY at this time is irrelevant. Let's do some YOY comparisons after May 2023, that's when your annualized data is going to start showing the declines. 

Also, not sure what TX markets you're in. I'm in Dallas on the ground and I've been ingesting data like a fiend. There is no question that the DFW and Austin markets are dropping. Look at the amount of houses hanging on the market, price decreases, properties being unlisted because they can't sell, etc. 

People who think the housing market is not experiencing declines despite rates in the 7's and hyperinflation (not to mention the data) are quite comical to me. 

Thanks for re-sharing so I didn't have to search the 80 some odd pages for the numerous times you had posted this.  You didn't answer my question about where you got your data or if there was any other supporting data you could share, but I zoomed in and saw it was from Redfin.   I'm assuming they don't make their data set readily available.  Which means, at best it is just a piece of data without context.  And, on the same day you posted it (yesterday) another source, the Dallas Morning News, posted a set of data sourced form Texas Realtors that paints the opposite picture of what you posted.  Of course, it appears that their data is single-family homes in DFW and your data is single-family homes, townhouses, condos and co-ops. and is for Dallas, TX. only.

Reading the article, this is second qtr. (including May) to third Quarter (including September).  Again, they use Median pricing, which without context is meaningless (in my opinion), but they show $406,000 as Dallas area median home pricing and 14.4% higher from previous qtr.  That data shows pricing going up!  The same data set shows the number of listings up significantly in the 3rd qtr.  Now, I guess if someone was looking to confirm their belief that the market is declining, they would point to the fact that the number of closed sales is declining, the number of days on market is increasing by 4 days and the number of months of inventory is up to 2.3.  That is still 3.5 months below what is considered an optimal functioning market, but I guess when the confirmation bias kicks in hard, those are pieces of data that a true doomsday believer could point to.

Of course, I am just one more commentator on here and by no means an expert, but I have more experience than most, especially in Texas.  To help clarify what Texas markets I am in, I have purchased approx.:
1,778 single-family homes in DFW and surrounding metroplex since 2012
421 single-family homes in the Houston Metro since 2016
84 in the San Antonio Metro since 2020

We actively manage just under 2,000 single-family homes in those three markets today and will add roughly 400-500 more in the next 12 months.  That is just the Texas market.  
We actually manage over 7,500 single-family homes across the southeast with a value north of $2 billion and that is without managing or working with institutional investors.  Which, I can confirm what @James Hamling  posted recently, the institutional investor is the major X factor in all of this and they will play an outsized role in many markets preventing a crash in values.  Each market will differ, but I firmly believe a market the size and importance of DFW is going to see a larger volume of institutional buying in some price points than what we have seen the past few years.  

We purchase for value-add and do walkthrough evaluations on roughly 4-5 properties for every one that we purchase. Our own internal data shows that prices we are able to buy properties at today, per sq. ft., which in our opinion levels the evaluation to an objective piece of data, are roughly the exact same as 6 months ago to 4-5% lower. The driving factors are motivation of the seller. This week we've reviewed 109 opportunities in the DFW metroplex, walked through just over 30 and purchased 1 property for 3.8% lower (per sq. ft. on similar sized property) than a property in the same neighborhood earlier this year. Our sales data from MLS show no drop in value on closed sales from what we sold the first property for in the Spring.

I sincerely hope you have success and that whatever strategy or plan you have works to perfection.  The beauty is, we all get to decide what our expectations are and we are all in control of the which direction we go.  There are a lot of commentators on here that are polar opposite of me when it comes to strategy and business, but I respect them and have learned a lot from their posts on here.  I don't have the energy or the time to put into some of the arguments on here, but I am definitely open to other opinions and reading including yours.

I have to fight off confirmation bias all the time.  You say you ingest data like a fiend and I applaud that.  I do too.  Most of it doesn't mean anything by itself.  In my opinion, data has to be cobbled together and I find it helpful to listen to others and their interpretations.  I like hearing the data that others are looking at and why.  However, in the end, I am going to take the actions I need to take and I change my mind or direction along the way because of the data, then I consider that a success.

Lastly, it looks like from your profile you've been at this for about a decade.  Congratulations!  You should feel like you hit the lottery getting started when pricing was in the trough.  I look back today and If I have a regret, it is that I did not buy twice the number of homes.  The value, not median price of a home sold, but the actual value of individual pieces of real estate has more than doubled in that time period in most areas of the metroplex.  I guess my point is, I hope you've done well.  Rather than poking at or even boasting that a ton of investors have lost money and are staying quiet, be glad that you're not one of them.  You could have made plenty of mistakes this past decade and the market itself covered them up.  I can admit that I have.  I know I've made mistakes and am thankful that they were made in a market where I didn't get punished.  Right now, I am helping a number of investors out of their mistakes and the last thing any of us should be doing is commenting on here asking why they are not publicizing it.  But hey, again, you conduct business how you want to conduct business.  I have enjoyed reading this and look forward to maybe reading more about data and what it means for each of us and our strategies.  Best to you -

Redfin data is readily available and free for all. Just google it. Your analysis is coming from a quarterly basis, which is obviously going to present a different data set than a month-over-month analysis. You're looking at three months of data grouped together at a time: Apr/May/Jun, Jul/Aug/Sep, etc. 

So Chris, assuming what you said is true, which I have no reason to believe it isn't. You've purchased thousands of properties in TX, almost 2k in Dallas/ DFW. Are you saying that you are paying the same for homes right now than you were early in the year? There's been no, or a negligible decrease in prices? 

Just want to make sure I understand where you're coming from. 

[Greg R.]

Quote from @Carlos Ptriawan:

 True.  
I also appreciate folk that does not agree with me.... as long as their calculation is correct when they do not bash the authority like IMF,Zillow,Fed,freddie mac when they conducted market research.

Because if we keep saying all that do not agree with our 'confirmation bias' as moron including organizations that spend billion of dollar for research, then we are showing we have no value to even have a serious discussion

So Redfin is a publicly traded company with a market cap over $1b. Are they less credible than Zillow? 

[Greg R.]

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

[James Hamling]

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

 In short term that there will NOT be a "08" type "crash", or any other "crash" for that fact. 

In long term, that median prices will go UP. 

In medium term, Stagflation and price compression with localized market corrections. Best standard to weigh things against is replacement cost's. Those assets running well in excess are most susceptible to step downs, those in parity will have most pricing endurance or upward pressure. 

In a unit shortage environment, replacement costs is the "gravity" point for pricing levels. 

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

 True.  
I also appreciate folk that does not agree with me.... as long as their calculation is correct when they do not bash the authority like IMF,Zillow,Fed,freddie mac when they conducted market research.

Because if we keep saying all that do not agree with our 'confirmation bias' as moron including organizations that spend billion of dollar for research, then we are showing we have no value to even have a serious discussion

So Redfin is a publicly traded company with a market cap over $1b. Are they less credible than Zillow? 

 their calculation is a bit different than zillow hence you see discrepancy.

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

there's no need to have faith on whether it shall crash or melt up, if it happens it happens, it seems known now it's going to be much better than predicted.

inflation is now 7.7% down 0.5%. You may not know the easiest way to reduce inflation is by burning money, the fed has burned dollar lately hence the inflation is down.

expected mortgage is between 6.25-6.9% if 10-year yield is below 4% for quite some time. 

this inflation business BS may be gone soon than expected and we may see price stabilization.

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

 In short term that there will NOT be a "08" type "crash", or any other "crash" for that fact. 

In long term, that median prices will go UP. 

In medium term, Stagflation and price compression with localized market corrections. Best standard to weigh things against is replacement cost's. Those assets running well in excess are most susceptible to step downs, those in parity will have most pricing endurance or upward pressure. 

In a unit shortage environment, replacement costs is the "gravity" point for pricing levels. 

On the Alternative Investments Private Investment for Accredited-Investor only, only REIT asset class has a positive 10% return YTD.
While all other class like Credit Fund, Hedge Fund and Specialized Fund is all losing money this year.

This is crazy and out of the norm. I'm wondering how could real-estate backed investment is performing so well in 2022.  

[Greg R.]

@Chris Clothier @John Carbone @Carlos Ptriawan @Bruce Woodruff @Jay Hinrichs

Yesterday Meta (Facebook) laid off +/- 11k employees. In a letter to the company, Zuck stated:

"At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that."

This perfectly aligns with what we've seen in the housing market. Many of the folks who have over committed and over leveraged are standing firm that the growth and acceleration seen since Covid would be permanent. However, it's not. It's simply not sustainable. We're barreling toward a recession, and I fear that a lot of people are going to lose their jobs. Housing prices will come down - you're guess is as good as mine as to how much, but they will come down. I believe significantly. 

You can say that this is a tech company and not analogous to the housing market, but Meta has behaved very much like aggressive housing consumers (including some RE investors) in the last two years, and look where they are now. 

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

 put it this way, we're confident because we understand how the economy works.

[Carlos Ptriawan]

Quote from @Greg R.:

@Chris Clothier @John Carbone @Carlos Ptriawan @Bruce Woodruff @Jay Hinrichs

Yesterday Meta (Facebook) laid off +/- 11k employees. In a letter to the company, Zuck stated:

the problem with Meta is company specific, they entered new unproven sector in last two years THAT HAVE NOT GENERATED MONEY/CASH FLOWS while increasing their headcount massively in the last two years.

THere're two type of tech, new tech and old tech, I come from old tech that produces tangible good and high amount of cash flow, our company produced unexpected record backlog this year, this is the highest made in USA tech components, so how come there's such a discrepancy right ? because each company managing their asset and tech investment very differently. 

Facebook is making huge mistake when they enter VR/Metaverse area. That sector in my opinion is BS LOL. Who wants to buy house in metaverse LOL

[Greg R.]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

 put it this way, we're confident because we understand how the economy works.

Any many people who understand how the economy works believe the exact opposite. Your train of thought is not the majority or the consensus. 

[Michael Wooldridge]

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

 Please quote the post from any that have said that. We have all said there will be no massive correction, no mass crash. That's not the same as saying no adjustment. Your prediction is close to 30-40%, and thats higher than 08. So we are pointing out that flaw. Nobody is saying no adjustment/correction. 

[Carlos Ptriawan]

New tech area like Metaverse, crypto token, NFT .. is also what I said as a Scam business. Too many new tech is putting money into this BS area.
I am so happy all these companies goes bankrupt, the latest going bankrupt is FTX exchange. If their employee is losing money / house because of crypto, that's good news and time to wake up. This crypto crash impacted a lot of companies in the Investment business. From Sequoia that's losing 150m to Blackrock.  Another area within new tech that's collapsing is Fintech and advertisement.

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

 put it this way, we're confident because we understand how the economy works.

I love how this guy just get's to say whatever and throw around "denial" for anyone who refutes what he says. Flat-Earth "deniers", Big Foot "deniers"....... Ugh, just ugh.......

[Greg R.]

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

 Please quote the post from any that have said that. We have all said there will be no massive correction, no mass crash. That's not the same as saying no adjustment. Your prediction is close to 30-40%, and thats higher than 08. So we are pointing out that flaw. Nobody is saying no adjustment/correction. 

Really? lol. Your buddy James has been leading the "no crash/ no correction" train since this thread started. He was recently beaten into submission on certain points since his outlandish stances could sustain themselves. There have probably been close to 100 (if not more) posts from people claiming there will be no crash and no correction. 

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

New tech area like Metaverse, crypto token, NFT .. is also what I said as a Scam business. Too many new tech is putting money into this BS area.
I am so happy all these companies goes bankrupt, the latest going bankrupt is FTX exchange. If their employee is losing money / house because of crypto, that's good news and time to wake up. This crypto crash impacted a lot of companies in the Investment business. From Sequoia that's losing 150m to Blackrock.  Another area within new tech that's collapsing is Fintech and advertisement.

 But even crypto is a better example of change then Meta. Zuckerberg literally said FU to the market, investors and everybody and essentially was telling the world he was going to Will this to happen and everybody else was wrong. Which is why he is now taking responsibility. The whole market was stupid. He was investing cloud level funding and personnel into what was essentially a start-up tech to your point. people saw this coming with no economic crash. 

That said greg should probably look at how much Meta has grown though and how this is basically just a bit more than a minor adjustment. 

[Michael Wooldridge]

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Key:

Did people actually say that prices would keep going up, or did they simply say there wouldn't be a 2008-style crash and that we might see prices level out to normalcy? 

Personally think we just stripped all the emotional equity out of the market.

Many on this thread are in denial that there will be any kind of crash or correction. They think that the last two years were normal and the prices are here to stay. 

 Please quote the post from any that have said that. We have all said there will be no massive correction, no mass crash. That's not the same as saying no adjustment. Your prediction is close to 30-40%, and thats higher than 08. So we are pointing out that flaw. Nobody is saying no adjustment/correction. 

Really? lol. Your buddy James has been leading the "no crash/ no correction" train since this thread started. He was recently beaten into submission on certain points since his outlandish stances could sustain themselves. There have probably been close to 100 (if not more) posts from people claiming there will be no crash and no correction. 

 Like I said quote the post. I've never seen somebody say no adjustment. On the more positive side folks have been saying 10%. Which nationally we are still in line with. I've also seen people post certain markets won't hit Jame's market as an example. And the midwest is unlikely to hurt or lose the growth they gained the last few years. 

So since it's been said again and again. Should be easy to quote the post. 

Also some of us have accounted for inflation. We knew we'd inflate are way out of lot of the issues. The numbers some of the crash folks are posting are sizably higher than 08 - when you account for inflation. Suggesting some folks haven't factored inflation at all........