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Updated almost 2 years ago, 01/14/2023
Housing crash deniers ???
Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions.
However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.
Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct.
Positive GDP growth…. Hmm
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
Makes one proud doesn't it? Our entire "growth in the economy" is based on WEAPONS sales to foreign countries and & OIL to those being boycotted by Russia. What's wrong with this picture? Beware the law of "cause & effect".
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https://www.zerohedge.com/mark...
"Today data, according to some such as the FT, "ends a debate that raged over the summer as to whether the US economy was already in a recession" although we disagree since the only reason the GDP print was strong is because Europe is collapsing into a recession and is now overly reliant on US energy and weapons exports; the GDP print also did little to dispel fears that the US will eventually (again) tip into an even bigger recession given the aggressive steps the US central bank is taking to stamp out elevated inflation."
#1 Market Trends & Data Contributor
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
with positive gdp growth there's never an occurence of home price going down
#1 Market Trends & Data Contributor
Quote from @Account Closed:
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
Makes one proud doesn't it? Our entire "growth in the economy" is based on WEAPONS sales to foreign countries and & OIL to those being boycotted by Russia. What's wrong with this picture? Beware the law of "cause & effect".
_____________________________________________________________
https://www.zerohedge.com/mark...
"Today data, according to some such as the FT, "ends a debate that raged over the summer as to whether the US economy was already in a recession" although we disagree since the only reason the GDP print was strong is because Europe is collapsing into a recession and is now overly reliant on US energy and weapons exports; the GDP print also did little to dispel fears that the US will eventually (again) tip into an even bigger recession given the aggressive steps the US central bank is taking to stamp out elevated inflation."
Europe is guaranteed entering into dark age recessions from 12 years ago because those highly-socialist country with very little productive economy is having negative rate for more than a decade. USA is in better position because we have more advanced product to sell to the world and dollar is currency of the world.
Btw the 10 year Yield is moving below 4 percent today for the first time and making 30YRFRM move back under 7% LOL I guess during midterm election they want to short the dollar to make the economy looks great. It would be nice to see home prices bottoming this month.
Quote from @Greg R.:
Quote from @Account Closed:
Quote from @Michael Wooldridge:
Quote from @Account Closed:
Quote from @Michael Wooldridge:
Quote from @Greg R.:
Quote from @Carlos Ptriawan:
Quote from @Greg R.:
Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
And again, I know you and @Michael Wooldridge have your crystal balls and are predicting rates and inflation coming down in a year or so, but I'm not confident that's the way it's going to go down.
People have been predicting doomsday. I have not. And yes quote me on it :)
I can respect a man who sticks to his guns. ;-)
Time will tell.
I went through the gas lines and inflation of the 70's, I made it through the Jimmy Carter years, I was there for the Mt St Helens explosion in 1980, I went through Black Monday in '87, I went through the Dot Com bubble in 2000, I made it through 9/11, I lived through the bear market and crash of 2008, the S&P crash in 2020, and so on and so on.
And this time, as always we are told, "this time is different". Yep, different decade but same old crisis after crisis. They do mix it up once in a while to crash the economy in a new way, but the other side seems to always come out ahead. I think they call it "shorting the market"
You just have to know, in advance, which part of the market they mean this time. Will it be real estate, stocks, oil, commodities, diesel, currency, office space, shipping, travel, FInTech, tax increases, debt overload, interest rates, rare earth minerals, nuclear "accident", trade embargoes, solar flare, power grid failure, drought, flooding, earthquakes, volcanoes, a disastrous cauliflower shortage? Who knows?
Regardless, I just keep on buying houses. ;-)
Regarding real estate, I'm buying properties assuming a decline in value of 10% over the next year and a rise in interest rates of at least 1% and probably 2%.
I just bought a property in N. Phoenix for $640,000 that was valued in April 2022 for $790,000 by Redfin and in Oct 2022 valued at $750,000 by appraisal. So, at $640,000 I can weather a drop of 10% over the next year and still be happy with the outcome. If things turn around (which I am not anticipating anytime soon) then I'm fine there too.
I'm buying because others aren't and I can get some pretty good deals.
So here's a real fun one. OpenDoor purchased a home in Denver on 4/27/22 for 779k, and on 6/22/22 listed it for 870k... I think you know where this is going. Price drop after price drop after price drop, they finally found a buyer and closed on 10/11/22 for... 625k - an astounding 154k loss. Probably more, I'm sure they put a little into it and also ate some closing costs. This was likely closer to a 170k loss.
Maybe the market is "normalizing"... this kind of thing is going to be the new norm.
https://www.zillow.com/homedetails/3612-Newton-St-Denver-CO-80211/13312413_zpid/?
Quote from @Greg R.:
So here's a real fun one. OpenDoor purchased a home in Denver on 4/27/22 for 779k, and on 6/22/22 listed it for 870k... I think you know where this is going. Price drop after price drop after price drop, they finally found a buyer and closed on 10/11/22 for... 625k - an astounding 154k loss. Probably more, I'm sure they put a little into it and also ate some closing costs. This was likely closer to a 170k loss.
Maybe the market is "normalizing"... this kind of thing is going to be the new norm.
https://www.zillow.com/homedet... of last week, Opendoor had 1,700 properties on the MLS in the Phoenix area and almost all of them have the same nose dive pricing. They are racing the market to the bottom.
I believe that it was iBuyers like Opendoor, Zillow, Offerpad, Redfin, and a couple of Hedge Funds like Cerberus paying any price to get properties in Phoenix, that caused the market to go up so high. Now, they are trying to get out of the properties, even at a loss.
Their reasoning might be different than what meets the eye. If you have a billion dollars to invest, you don't put that money in T-Bills, since that doesn't even keep up with inflation. Since the Stock Market is down 20% for the year, you don't want your money in the market. With real estate, at that time, going up it was worth the hassle of getting into a non-liquid investment.
I don't have any inside information but I believe they under estimated the costs and hassles of owning real estate and decided that being liquid has it's advantages. You can pull out of the stock market one and be back in the next. It's certainly not so with real estate. Real estate has property taxes, it's expensive to sell, on average takes months to sell and requires maintenance. Hedge funds are not usually into investments that require maintenance and that are a hassle to hold.
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Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
with positive gdp growth there's never an occurence of home price going down
Just for Funsie's; imagine a red-wave unlike anything anyone imagined Nov 8th. And with that commanding position, Congress rapidly jumps into bill after bill turning back on domestic oil and gas production BUT not just to meet domestic demand, no no no, were talking produce Produce PRODUCE, jumping in to send a tsunami of gas to Europe, one hungry hungry hippo for gas at this moment.
Whadya think the GDP will look like then?
Because kicking US production back on, and at full steam, also means a whole lot of ancillary industry's kicking into high gear.
I think it would be veto-ping-pong myself and not good potential of happening but if, holy cow if.
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I've certainly been bullish in the past about the Colorado real estate market. And while i think a slowing of the growth is due, I am suspicious of any claims there will be a crash. The numbers just don't support it. At least not here in Denver and Colorado Springs.
Median home values in Denver were up nearly 10% over September last year. They were up 5% in Colorado Springs. The active listings in Denver are at 7500 or so, which is double last year, but it's well below the 25,000 or so listings during the 07/08 crash. We still have less than 3 months of inventory, which indicates a seller's market remains. (Now we are close to 3 months of inventory which would put us closer to a balanced market. That's good news, in my opinion.)
I think it all relative. Relative to the 20% growth in home values we saw last year in multiple Colorado markets, sure, it looks like the sky is falling, but until I see months of inventory putting us into a buyer's market and until I see year-over-year price drops, I think we are likely just to see a more balanced market. That's my take at least on our local markets.
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
with positive gdp growth there's never an occurence of home price going down
Just for Funsie's; imagine a red-wave unlike anything anyone imagined Nov 8th. And with that commanding position, Congress rapidly jumps into bill after bill turning back on domestic oil and gas production BUT not just to meet domestic demand, no no no, were talking produce Produce PRODUCE, jumping in to send a tsunami of gas to Europe, one hungry hungry hippo for gas at this moment.
Whadya think the GDP will look like then?
Because kicking US production back on, and at full steam, also means a whole lot of ancillary industry's kicking into high gear.
I think it would be veto-ping-pong myself and not good potential of happening but if, holy cow if.
Quote from @James Carlson:
I've certainly been bullish in the past about the Colorado real estate market. And while i think a slowing of the growth is due, I am suspicious of any claims there will be a crash. The numbers just don't support it. At least not here in Denver and Colorado Springs.
Median home values in Denver were up nearly 10% over September last year. They were up 5% in Colorado Springs. The active listings in Denver are at 7500 or so, which is double last year, but it's well below the 25,000 or so listings during the 07/08 crash. We still have less than 3 months of inventory, which indicates a seller's market remains. (Now we are close to 3 months of inventory which would put us closer to a balanced market. That's good news, in my opinion.)
I think it all relative. Relative to the 20% growth in home values we saw last year in multiple Colorado markets, sure, it looks like the sky is falling, but until I see months of inventory putting us into a buyer's market and until I see year-over-year price drops, I think we are likely just to see a more balanced market. That's my take at least on our local markets.
#1 Market Trends & Data Contributor
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
with positive gdp growth there's never an occurence of home price going down
Just for Funsie's; imagine a red-wave unlike anything anyone imagined Nov 8th. And with that commanding position, Congress rapidly jumps into bill after bill turning back on domestic oil and gas production BUT not just to meet domestic demand, no no no, were talking produce Produce PRODUCE, jumping in to send a tsunami of gas to Europe, one hungry hungry hippo for gas at this moment.
Whadya think the GDP will look like then?
Because kicking US production back on, and at full steam, also means a whole lot of ancillary industry's kicking into high gear.
I think it would be veto-ping-pong myself and not good potential of happening but if, holy cow if.
Exxon released their record earning today ; dude the economy is actually expanding in the 'recession' times.
The job market is strong. Sign a new wave of melting up in home price lol or at least neutral :)
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Quote from @Greg R.:
I don't think it's a pipe dream. There are predictions now of the Repubs taking a 30-40+ seat majority in the House and 7 seats in the Senate (based on new polls). This kind of majority will make Biden impotent (but I repeat myself :-) and we could get bill after bill slammed through to ramp up domestic oil production.
Bear in mind that not only will this provide gas for Europe and make us $$, it also means that Europe will not need Russia oil any longer and the bear will collapse (which means the war in Ukraine can no longer be funded). Lots of changes possible in the next year.
Although yes, Greg, I agree this is more likely in 2024-2025....but I think certainly possible in the next year or so....
#1 Market Trends & Data Contributor
Quote from @Greg R.:
Quote from @James Carlson:
I've certainly been bullish in the past about the Colorado real estate market. And while i think a slowing of the growth is due, I am suspicious of any claims there will be a crash. The numbers just don't support it. At least not here in Denver and Colorado Springs.
Median home values in Denver were up nearly 10% over September last year. They were up 5% in Colorado Springs. The active listings in Denver are at 7500 or so, which is double last year, but it's well below the 25,000 or so listings during the 07/08 crash. We still have less than 3 months of inventory, which indicates a seller's market remains. (Now we are close to 3 months of inventory which would put us closer to a balanced market. That's good news, in my opinion.)
I think it all relative. Relative to the 20% growth in home values we saw last year in multiple Colorado markets, sure, it looks like the sky is falling, but until I see months of inventory putting us into a buyer's market and until I see year-over-year price drops, I think we are likely just to see a more balanced market. That's my take at least on our local markets.
.Denver market is stabilizing too. Funny right.
#1 Market Trends & Data Contributor
Quote from @James Carlson:
I've certainly been bullish in the past about the Colorado real estate market. And while i think a slowing of the growth is due, I am suspicious of any claims there will be a crash. The numbers just don't support it. At least not here in Denver and Colorado Springs.
Median home values in Denver were up nearly 10% over September last year. They were up 5% in Colorado Springs. The active listings in Denver are at 7500 or so, which is double last year, but it's well below the 25,000 or so listings during the 07/08 crash. We still have less than 3 months of inventory, which indicates a seller's market remains. (Now we are close to 3 months of inventory which would put us closer to a balanced market. That's good news, in my opinion.)
I think it all relative. Relative to the 20% growth in home values we saw last year in multiple Colorado markets, sure, it looks like the sky is falling, but until I see months of inventory putting us into a buyer's market and until I see year-over-year price drops, I think we are likely just to see a more balanced market. That's my take at least on our local markets.
I'm surprised when reading Denver long-term appreciation market. The way the market moves in Denver is 100% the same as in San Jose/San Francisco,CA. It follows the exact long-term appreciation during QE policy from 2009 until 2018, and then both markets is having a flat line until March 2020 during the QT phase. And then rise again in 2020 when massive QE starts. What's the difference is it seems Denver doesn't have as much as bubble irrational activity during 2020-2021. Denver is having more long stable growth appreciation. I think this market would never crash.
What makes this more interesting is that in the month of September, unadjusted single family is actually rising again, defying gravity.
Honestly, I'm surprised to see some markets started to react quite positively with an interest rate higher than 5%.
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Now, as some of us have said, a lot depends on Nov 8th. If the average consumer 'feels' more secure and prosperous, they will spend accordingly. I still think a big adjustment is going to happen first, but we have seen elections in the past have great impact.....so we will see.
Quote from @Bruce Woodruff:
Now, as some of us have said, a lot depends on Nov 8th. If the average consumer 'feels' more secure and prosperous, they will spend accordingly. I still think a big adjustment is going to happen first, but we have seen elections in the past have great impact.....so we will see.
I don’t get this. Regardless of who ends up in power it’s not going to change the realities for the next 6 months - people who live their lives by politics I’ll never get.
all that aside case Schiller index was up 13% year over year in August still. Which is the same month many of the larger markets trended down. The next 6-9 months wil be slow, stagnation. But by spring to summer we should see some discussion on rate adjustments which will unfreeze things.
Meanwhile consumer spending will remain down because it was abnormally high during covid.
Quote from @Carlos Ptriawan:
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm
with positive gdp growth there's never an occurence of home price going down
Just for Funsie's; imagine a red-wave unlike anything anyone imagined Nov 8th. And with that commanding position, Congress rapidly jumps into bill after bill turning back on domestic oil and gas production BUT not just to meet domestic demand, no no no, were talking produce Produce PRODUCE, jumping in to send a tsunami of gas to Europe, one hungry hungry hippo for gas at this moment.
Whadya think the GDP will look like then?
Because kicking US production back on, and at full steam, also means a whole lot of ancillary industry's kicking into high gear.
I think it would be veto-ping-pong myself and not good potential of happening but if, holy cow if.
Exxon released their record earning today ; dude the economy is actually expanding in the 'recession' times.
The job market is strong. Sign a new wave of melting up in home price lol or at least neutral :)
Really not surprised that Exxon is making record revenues, seems pretty obvious that they would be. Look at Meta stock.
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Quote from @Michael Wooldridge:
Quote from @Bruce Woodruff:
Now, as some of us have said, a lot depends on Nov 8th. If the average consumer 'feels' more secure and prosperous, they will spend accordingly. I still think a big adjustment is going to happen first, but we have seen elections in the past have great impact.....so we will see.
I don’t get this. Regardless of who ends up in power it’s not going to change the realities for the next 6 months - people who live their lives by politics I’ll never get.
You don't have to get it. A great number of people are waiting for Nov 8th to make decisions on how to invest and what to do with their assets....
#1 Market Trends & Data Contributor
Quote from @Greg R.:
Quote from @Carlos Ptriawan:
Quote from @Greg R.:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
Quote from @Michael Wooldridge:
Positive GDP growth…. Hmm)
Really not surprised that Exxon is making record revenues, seems pretty obvious that they would be. Look at Meta stock.
This may explain why Texas economy is growing and home market there is still doing pretty okay
Quote from @Bruce Woodruff:
Quote from @Michael Wooldridge:
Quote from @Bruce Woodruff:
Now, as some of us have said, a lot depends on Nov 8th. If the average consumer 'feels' more secure and prosperous, they will spend accordingly. I still think a big adjustment is going to happen first, but we have seen elections in the past have great impact.....so we will see.
I don’t get this. Regardless of who ends up in power it’s not going to change the realities for the next 6 months - people who live their lives by politics I’ll never get.
You don't have to get it. A great number of people are waiting for Nov 8th to make decisions on how to invest and what to do with their assets....
I know the general populace is. No surprise there, doesn’t mean I follow this stupidity. Trusting the govt on your business decisions is a poor way to get results. Either side is fickle and will surprise you. It’s why you ignore it and make decisions based off of the govt you are asking for pain.
It’s even funnier because election results in November will change clothing for some time.
So out of curiosity if it is the red wave you want BRuce - will you suddenly state that’s why’s the housing market didn’t go to hell in 2023?
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:
Positive GDP growth…. Hmm)
Really not surprised that Exxon is making record revenues, seems pretty obvious that they would be. Look at Meta stock.
This may explain why Texas economy is growing and home market there is still doing pretty okay
Texas home market, at least in Austin and DFW is seeing MAJOR declines, which I've documented thoroughly in this thread. Home market is far from OK in TX (Austin & DFW). DFW median sold prices down almost 100k since the peak in May, and Austin median sold prices down over 100k since May.
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Quote from @Michael Wooldridge:
Trusting the govt on your business decisions is a poor way to get results.
will you suddenly state that’s why’s the housing market didn’t go to hell in 2023?
This statement and question clearly show why you don't get it.
Quote from @Bruce Woodruff:
Quote from @Michael Wooldridge:
Trusting the govt on your business decisions is a poor way to get results.
will you suddenly state that’s why’s the housing market didn’t go to hell in 2023?
This statement and question clearly show why you don't get it.
I get it just fine. I just don’t agree with it. One of the tricks to business is consistency if things don’t change you can plan and work around it. IT’s when things change that you get problems and that is as true for changes that make things easier as the ones that make it harder.
Not to mention things that make it easier tend to result in unintended consequences - look at 08 for that.
Again I’ve made statements, that I stand by, around the markets and the direction. My question is simple if in 2023 we end up where 20%+ median national home price adjustment doesn’t happen, will it be because of the NOvember elections or because some of us more accurately predicted the trends ?