Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[James Hamling]

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

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. 

Couldn't agree more. There seems to be a fantasy land that some folks are living in where prices never go down, and no matter the conditions - it's always the right time to buy. And you're right, the people who've lost everything from the flips they bought in Q1 are awfully quiet right now. Too much ego/ pride to come on BP forms and expose their foolishness. 

 Foolishness   little harsh dont you think ?   WE flip a lot of property and build new..  what i have seen is new builds sales are not nearly what they were a few years ago and more in line with 2016 pace.  So far for me at least prices have held ..  In the cash flow deals we do its nothing has slowed down at all so all those cash flow flippers are doing quite well as rents have risen to the point that higher rates the cash flows are just the same and those that have low interest debt are really looking good right now for buying in Jan Feb.. :)  

I think if/when we have a crash it will be the same suspects as 08  CA VEgas Phx  were values ran up real quick.. I sold one of my Vegas properties that went up over 30% in one year and then when i put it on market I sold it for 40k over ask and that was in May of this year.. 

The other thing people are not mentioning and most dont really know.. Is it really depends on the state your in.. For owner occ.. Purchase Money mortgages there is no deficiency judgement allowed by law. This is true in  CA OR WA NV AZ and a few others.. In other states does not matter the lender can and will go after deficiencies ( think Texas) .  This  is one reason the melt down was so severe in  CA NV and AZ in 08  the only thing owner occ's lost was equity and credit score they did not have anyone coming after them ( unless they had second mortgages those the lender can get a deficiency. 

I wanted to add some real stats for my Oregon new builds.. Price points 675k to 850k.. I started 14 specs in Q 1 I have sold 8 of them all for full price plus extras..  No bidding wars of course as I dont really like that  but Zero concessions and Extra's of course carry a nice mark up for all the time and effort we take to customize these homes for the buyers.

But lets talk about these buyers.. 6 of the 8 are empty nesters one paid cash two paid very large down's and decided to use their VA loans so their loans were less than 50% ARV. The others sold properties are put 20 to 40% down.. Again though we are going to have to work for it unlike the years past were it was taking orders. We also have substantial equity in this project with a great bank and banker so if we have to hold its only going to cost me about 10k a month to hold 40 million worth of retail sales and we can do that for a very long time if we needed to.

On our mid west east coast fundings for flippers for mainly investor purchases IE these are rental houses.. so our clients either sell to the cash flow investor or they are BRRR even with rates going up to 7 to 8% on BRRR my clients are in these good enough and rents have risen enough ( even section 8) that these still cash flow with very little or no money out of their pocket.

I just did two in N. Ohio for one of my clients I 100% funded it for them plus i fund 100% of rehab. So all they do is pay utls.. and they refinanced with local bank got 25k cash back and are positive over 600 a month on the two..  that was two weeks ago in just one of the 5 markets i do this in.  Of course I only work with very experienced locals I dont do this for the general public.

 I do have to agree that the housing market is in a downturn. Some areas are less immune than others but the fact remains that the feds are increasing interest rates which will in turn decrease demand for homes because of the purchasing power. 

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

Mahdi Hemmat

 This is a common misconception, or misunderstanding, by those who don't understand economics and business/statistical structures. 

Increased costs of housing does NOT decrease demand. It decreases AFFORDABILITY. 

And when one DECREASES affordability, it INCREASES pent-up-demand. 

Because nothing has changed in those consumer DESIRE for home ownership, only there ABILITY to OBTAIN that housing has been negatively impacts. AND we know from social science that when a desired items becomes more EXCLUSIVE, it actually RAISES it's social value, making it even more-so desired then originally desired. 

So in truth, it creates the "loading" of a "rubber-band effect". 

What this also creates is "Transient Renters". Hey, look at that, an ACCURATE use of the word "Transient", hey Uncle Sam, ya paying attention? Nope, crazy Uncle Sammy is still at the neighbors begging for a few cups of oil....... Doofy guy has got jugs of it in the shed but won't touch a drop of it. 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

[Jaron Walling]

@Carlos Ptriawan Tough situation and market to live in let alone buy property. 

Is the homeless population really as bad as they show on TV and YouTube? I've watched a few documentaries but they always put a spin on social issues like that. 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

 Like MoheganSun casino in CT :)

[John Carbone]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

 Pretty sure most Hawaiians living in despair there would rather live in a hut on a beach than move to Minnesota even if the land was free.

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

 Pretty sure most Hawaiians living in despair there would rather live in a hut on a beach than move to Minnesota even if the land was free.

 Thought it was rather obvious what I was saying and easily understood, but I forgot some need things in Crayola. 

I was saying HI Natives coming to LEARN from MN Natives, NOT to MOVE to MN, come to LEARN, to take knowledge back to HI to do in HI what natives do in MN. 

And WTF is so bad with MN? "....even if land was free" is an idiotic statement about one of "THE" top places to live in U.S. for what, all history of the rankings. You are aware that MN has DOMINATED the top seats of the ranked best places to live, with more cities in top 10/20 then any other state, more times consecutively, or repetitively, etc etc etc then anywhere else in US, right?    But let me guess "winter". Yeah, 3 whole months of winter, oh-no....... Your aware that nearly half the country has winter and snow right? Half the NFL has homes in MN, for starters. Bezos has a place here. We have so many millionaires and billionaires with places in MN that private jet airports dot the landscape. (ok, I know there just airports but I am talking they have private jet facilities and large, regular, service of such. Like Eden Prairie, Brainerd/Baxter, Duluth....) 

Hey, how about a Fun-Fact Tuesday.    Were you aware that MN has more miles of shoreline than California, Florida and Hawaii, COMBINED! Yup, look it up, about 90,000 miles! So yeah, the beach argument lands in MN dominance by far buddy. 

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

 Like MoheganSun casino in CT :)

 Wow, that place looks swank, a lot like Mystic Lake in MN. 

So yeah, exactly that. 

[Victor S.]

fresh drop (no pun intended) of news https://seekingalpha.com/news/...

[James Hamling]

Quote from @Victor S.:

fresh drop (no pun intended) of news https://seekingalpha.com/news/...

 Lol, oh how I LOVE todays media, nobody has ever come close to the mastery of spin we have today! 

There "in-depth" research is amazing (oh-so much sarcasm). "Some investors stepping back on...." LOL.    So, I could take this SAME article and swap the headline to "HOT DOG MARKET COOLING" and write "some investors stepping back from hot-dogs" or really just throw ANYTHING in there and it will be true. "SOME" is any number between 3 and 300 BILLION. 

"Some investors EAT GLUE....", "some investors GOING VEGAN....". 

Context people CONTEXT!

[Nicholas L.]

@Victor S.

a lot of loaded words in these articles.  'hordes' of investors.

it's also a clumsy metric because it's purchases by 'companies.'  i'm an investor... buying in my own name.  so i do not show up in this metric.

but what do you think this means?  

[James Hamling]

Quote from @Jaron Walling:

@Carlos Ptriawan Tough situation and market to live in let alone buy property. 

Is the homeless population really as bad as they show on TV and YouTube? I've watched a few documentaries but they always put a spin on social issues like that. 

 In CA, yeah, it is, if not WORSE. Yeah, I'd say worse. Ocean Side, yeah, wowzers. 

[John Carbone]

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

 Pretty sure most Hawaiians living in despair there would rather live in a hut on a beach than move to Minnesota even if the land was free.

 Thought it was rather obvious what I was saying and easily understood, but I forgot some need things in Crayola. 

I was saying HI Natives coming to LEARN from MN Natives, NOT to MOVE to MN, come to LEARN, to take knowledge back to HI to do in HI what natives do in MN. 

And WTF is so bad with MN? "....even if land was free" is an idiotic statement about one of "THE" top places to live in U.S. for what, all history of the rankings. You are aware that MN has DOMINATED the top seats of the ranked best places to live, with more cities in top 10/20 then any other state, more times consecutively, or repetitively, etc etc etc then anywhere else in US, right?    But let me guess "winter". Yeah, 3 whole months of winter, oh-no....... Your aware that nearly half the country has winter and snow right? Half the NFL has homes in MN, for starters. Bezos has a place here. We have so many millionaires and billionaires with places in MN that private jet airports dot the landscape. (ok, I know there just airports but I am talking they have private jet facilities and large, regular, service of such. Like Eden Prairie, Brainerd/Baxter, Duluth....) 

Hey, how about a Fun-Fact Tuesday.    Were you aware that MN has more miles of shoreline than California, Florida and Hawaii, COMBINED! Yup, look it up, about 90,000 miles! So yeah, the beach argument lands in MN dominance by far buddy. 

They don’t allow casinos in Hawaii. Also, let’s be real. The vast majority of native lands are in despair despite having casinos. All the money stays at the top. I see it first hand here in my area. Tennessee side of the smokies is flooded with tourism, on the Cherokee side it looks like 1950 despite them having the casinos there. There isn’t a desire to transform it because a few oligarchs from the reservation impoverish their own people. Sad, but it is the reality. 

Yes, the reason you have so many private airports is due to the healthcare industry being phenomenal, which vastly over-inflates those statistics in Minnesota being a great place to live, Of course people will fly there for medical reasons, I know many people who do that, but they don’t take up residency there for many reasons. Take away this component which people can still access by traveling there, and it puts it on par with Alabama in terms of best places. 

the data speaks for itself from the MN gov….you are losing people…..facts 

 
I don’t see any new Renaissance happening there anytime soon, quite the opposite actually. 

[James Hamling]

Quote from @Nicholas L.:

@Victor S.

a lot of loaded words in these articles.  'hordes' of investors.

it's also a clumsy metric because it's purchases by 'companies.'  i'm an investor... buying in my own name.  so i do not show up in this metric.

but what do you think this means?  

 Means they didn't have anything better to throw out there to sell advertising and it's ranking for views. 

[Nicholas L.]

@John Carbone

I'm not here to argue MN vs. HI... but people move into, and out of, every state every year, and domestic migration is only one facet of population change.  MN grew between 2010 and 2020...

[John Carbone]

Quote from @Nicholas L.:

@John Carbone

I'm not here to argue MN vs. HI... but people move into, and out of, every state every year, and domestic migration is only one facet of population change.  MN grew between 2010 and 2020...

Even fed official agrees. 

 https://tcbmag.com/kashkari-to...

also minessota should have lost one of their 8 congressional seats due to over counting census. Seems bearish for long term minnessota real estate. 

https://www.google.com/amp/s/w...

[Carlos Ptriawan]

Quote from @Nicholas L.:

@Victor S.

a lot of loaded words in these articles.  'hordes' of investors.

it's also a clumsy metric because it's purchases by 'companies.'  i'm an investor... buying in my own name.  so i do not show up in this metric.

but what do you think this means?  

Lot of these articles are either saying something that's too obvious or second, they are using secondary metrics that are too ambiguous that there's no conclusion from that article.

So they said Investor purchases reduce from 20-ish to 17-ish percentage. So who cares ? and how does it translate to the price stability that we have now? Who is actually buying? 20 to 17 is very minuscule. There are also other stats saying cash buyers increased from 22 to 25. But a three percent increase is so minuscule.

Nobody is saying that active inventory MoM between September to October is actually declining, which means price stability.  

[Carlos Ptriawan]

I guess the most real-time important real estate metrics that we have right now is that the housing inventory in Nov 2022 is adjusted to Q2 2000 active inventory level. However nationwide price is barely moving from an all-time high and CA  state (as the leading 'crasher') is only regressed to Q1 2022/Q4 2021 price level.

That was very surprising actually. There's no 1-to-1 correlation between price adjustment and inventory level. 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

 This is a common misconception, or misunderstanding, by those who don't understand economics and business/statistical structures. 

Increased costs of housing does NOT decrease demand. It decreases AFFORDABILITY. 

And when one DECREASES affordability, it INCREASES pent-up-demand. 

You should talk more about the pent-up demand, this one is very fascinating.

When US experiencing inflation in 70 and also in Asia during the hyperinflation of the late 90s, real estate skyrocketed. Was it due to pent-up demand, how to measure it?

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

You should talk more about the pent-up demand, this one is very fascinating.

 Ok; 2020. BOOM, mic drop.......

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

When US experiencing inflation in 70 and also in Asia during the hyperinflation of the late 90s, real estate skyrocketed. Was it due to pent-up demand, how to measure it?

 To understand the '90's one has to study the '80's. 

The bull-run of the '90's was absolutely, 100% "primed" by the previous decade of assorted recession. I once heard an economist give a talk where he said a measure he uses is new cars, not the sales volume or the sale prices but the styling. He pointed out the "economy" cars of the 80's and how it is a "read" of the economy as a whole, the more restricted the styling and features, it was a direct reflection of the greater "restriction" in the economy and thus an indicator of loading pent-up-demand.    And then in other years, he used a portion of the '90's, the more lavish features, the return of hot-rods and assorted vehicles for leisure at mass market level, as an indicator of the more "free-spending" economy and thus the "demand-itch" being readily scratched.  

It was an interesting way to see it because there is no data-set one can get to put an exact read to what people want but are not engaging in because, by the nature of it, they are not doing it, it's a thought, nothing can read thoughts. 

There is metrics out there where quants read into various algorithms to try and project if this, people would be doing ____, but it's a series of assumptions built upon assumptions.

And, it also shifts based on sociological shifts. For example, to "predict" what people would do under covid lockdown one could have looked back to history and said there would be a run on books, because back when people bought up books. BUT, that ignores the sociological shift via the internet age and the generations who were so engaged in tech now, thus Netflix went way up and books fell flat.     That's a loose example but I think you get the jest. Sociology matters. 

One big sociological shift I notice many not getting is how generations pre and post gen-x perceive "cost". Pre Gen-X strongly utilizes whole "cost" for conceptualization. If you say to someone in that group something is just $495 per month, the vast majority of time the response will be "ok, but what does it cost" searching for it's total sale $.     Take the exact same item and say to someone post gen-X that this thing is $42,500, they will most frequently also say "ok, but what does it cost" searching for a monthly payment $. 

It may seem a minor difference but I assure you, it's a massive shift. 

I believe this is one of the items that is a source for why so many don't understand the home sales they have been seeing, because it's a conflict of concepts of "cost". While a whole-$ person can look and say holly-cow look how expensive these homes are, the other one will simply look at the payment, and what it gets, which is a much more muted impact. $2,700 mnth vs $2,250 per month, think about that, it's a lot more IF a person does the % but, on surface, it's "only" a few hundred bucks...... think about the impact of that, saying a few "hundred" more, it's not so stinging is it, feels, for most part, not a big deal, rather attainable, right. BUT on whole dollar, it could be what, $100k difference. Now THAT sure as heck has impact, one-hundred-thousand, yeah, can't say that without thinking that's a lot of $, right. 

So this shift in conceptualization IS a major shift, with major implications. 

But again, how does one "predict" the exact results from such, IDK, I think it's more a question of vision. Many said the internet was a fad, nobody would use it to buy things, but few had "vision" and saw the future of it, without any data to put finger on as proof of such, and it wasn't a guess, they just had the ability to envision what all those factors would coalesce in. 

[Billy Smith]

Just had a house down the street sold cash little over  265k asking price was 265k it was foreclosure needing  major updating ,really cleaned could  get 350k .The house only got a little above asking price 6-8  months back it would have been a mad poker game on bidding on it .

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

 This is a common misconception, or misunderstanding, by those who don't understand economics and business/statistical structures. 

Increased costs of housing does NOT decrease demand. It decreases AFFORDABILITY. 

And when one DECREASES affordability, it INCREASES pent-up-demand. 

You should talk more about the pent-up demand, this one is very fascinating.

When US experiencing inflation in 70 and also in Asia during the hyperinflation of the late 90s, real estate skyrocketed. Was it due to pent-up demand, how to measure it?

If review back in data, I believe it's very fair, if not very conservative, to peg 5 million unit sales in US as the bar of measure. 

To say, at that level demand is for most part, being meet. It's probably a bit under as equilibrium is arguably closer to 5.35 million, but let's use 5.

Now as things dip below that benchmark, let's say by 200k units per month for lets say 5 months, it does NOT say that then immediately the next month there will be say, demand to purchase 1.2m home units, no. But it DOES give a "read" of that pressure level. So picture a full year, of a 30% drop from 5 million. Yes, that does give read that pressure is now at 130%. 

When that pressure "ruptures", because that is how such expresses itself, a rupture or eruption, the # of units available is a constricted #. So now you have 130% demand for what's available, and this directly results in pricing expression of said pressure. 

But..... nerding out here for a bit, 130% pressure does not erupt as 130%, it gets amplified in the event, coming out more so as 150% pressure due to the restrictions on expressing itself, the competition amplifies the pressure into desperation. 

In simplest terms, 2020. We just lived this equation. 

Now think of where we are at today. We OBVIOUSLY have pent-up-demand, here and now, everyone even doomsayers are saying we have it, although not cognizant of such, as they say people are not buying BECAUSE of the rate increases, that is by definition making pent-up-demand. 

So we have a net shortage market, with demand getting stopped from expressing itself, and getting all pent-up. The fact of sales continuing in many markets is proof of the strength of the pent-up-demand today being stronger then rate impact. So now raise rates a bit more, and hold. What happens when rate drop to say 5%. 

The Fed didn't fix anything, they kicked the can is what I am trying to say. 

The rate increases were so massive, so fast, it didn't allow an easing of demand, it just locked the door, the people are still waiting to get in, and every day more arrive and are all asking how long they gotta wait to get in. 

So when that door opens, yes, it will be a rush, again. How big, all depends how long they have to wait, and how wide open that door get's thrown open when it opens. 

If Fed actually wanted to "fix" things vs can kicking, they'd drop rate TODAY too a metered level, something like 200 basis point drop from today. And ride out the demand cycle in a regulated manner. We were with flood gates wide open, then they shut them almost completely closed, one extreme to the other. Nothing will be fixed, only delayed. 

The only way the Fed direction makes sense is if they planned to get mass unemployment, and suck dry savings to impoverish everyone, then start slowly letting off some all can just barely tread water. That is some epic evil sh#t if that's the case, and in no way shape or form for "we-the-people". 

IDK, maybe that is the attempt, but it's rather extreme and would require inducing a huge recession and I don't see any politically surviving such. 

IDK, what there doing doesn't make sense, what makes sense for what there doing doesn't make sense.... Most likely is they don't really know either, and are just reacting, and then justify reaction, never be wrong especially when wrong kinda thing. 

If later is the case, I could see a easing cycle start here in Dec and continue M2M into spring market where hopefully they stop and sit at a sane point and do as I started, let the market work itself out, let demand express itself and find equilibrium free of manipulation. 

[John Carbone]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

 This is a common misconception, or misunderstanding, by those who don't understand economics and business/statistical structures. 

Increased costs of housing does NOT decrease demand. It decreases AFFORDABILITY. 

And when one DECREASES affordability, it INCREASES pent-up-demand. 

You should talk more about the pent-up demand, this one is very fascinating.

When US experiencing inflation in 70 and also in Asia during the hyperinflation of the late 90s, real estate skyrocketed. Was it due to pent-up demand, how to measure it?

If review back in data, I believe it's very fair, if not very conservative, to peg 5 million unit sales in US as the bar of measure. 

To say, at that level demand is for most part, being meet. It's probably a bit under as equilibrium is arguably closer to 5.35 million, but let's use 5.

Now as things dip below that benchmark, let's say by 200k units per month for lets say 5 months, it does NOT say that then immediately the next month there will be say, demand to purchase 1.2m home units, no. But it DOES give a "read" of that pressure level. So picture a full year, of a 30% drop from 5 million. Yes, that does give read that pressure is now at 130%. 

When that pressure "ruptures", because that is how such expresses itself, a rupture or eruption, the # of units available is a constricted #. So now you have 130% demand for what's available, and this directly results in pricing expression of said pressure. 

But..... nerding out here for a bit, 130% pressure does not erupt as 130%, it gets amplified in the event, coming out more so as 150% pressure due to the restrictions on expressing itself, the competition amplifies the pressure into desperation. 

In simplest terms, 2020. We just lived this equation. 

Now think of where we are at today. We OBVIOUSLY have pent-up-demand, here and now, everyone even doomsayers are saying we have it, although not cognizant of such, as they say people are not buying BECAUSE of the rate increases, that is by definition making pent-up-demand. 

So we have a net shortage market, with demand getting stopped from expressing itself, and getting all pent-up. The fact of sales continuing in many markets is proof of the strength of the pent-up-demand today being stronger then rate impact. So now raise rates a bit more, and hold. What happens when rate drop to say 5%. 

The Fed didn't fix anything, they kicked the can is what I am trying to say. 

The rate increases were so massive, so fast, it didn't allow an easing of demand, it just locked the door, the people are still waiting to get in, and every day more arrive and are all asking how long they gotta wait to get in. 

So when that door opens, yes, it will be a rush, again. How big, all depends how long they have to wait, and how wide open that door get's thrown open when it opens. 

If Fed actually wanted to "fix" things vs can kicking, they'd drop rate TODAY too a metered level, something like 200 basis point drop from today. And ride out the demand cycle in a regulated manner. We were with flood gates wide open, then they shut them almost completely closed, one extreme to the other. Nothing will be fixed, only delayed. 

The only way the Fed direction makes sense is if they planned to get mass unemployment, and suck dry savings to impoverish everyone, then start slowly letting off some all can just barely tread water. That is some epic evil sh#t if that's the case, and in no way shape or form for "we-the-people". 

IDK, maybe that is the attempt, but it's rather extreme and would require inducing a huge recession and I don't see any politically surviving such. 

IDK, what there doing doesn't make sense, what makes sense for what there doing doesn't make sense.... Most likely is they don't really know either, and are just reacting, and then justify reaction, never be wrong especially when wrong kinda thing. 

If later is the case, I could see a easing cycle start here in Dec and continue M2M into spring market where hopefully they stop and sit at a sane point and do as I started, let the market work itself out, let demand express itself and find equilibrium free of manipulation. 

Let the market work itself out? We all had housing induced welfare from the fed and now complain that it’s gone? Why? To justify double digit gains in RE? We are probably the only country that gives 30 year fixed rate mortgages, and when rates hike back to more normal levels the market can’t handle it and realtor complains about it because sales go down. Fed does know what it’s doing, it’s trying to move people from realtor jobs to jobs that produce something and that is working. 

 Mistake was being too low for too long. Now they overcompensate because only way to stop the freight train is by derailing it. 

[James Hamling]

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

 This is a common misconception, or misunderstanding, by those who don't understand economics and business/statistical structures. 

Increased costs of housing does NOT decrease demand. It decreases AFFORDABILITY. 

And when one DECREASES affordability, it INCREASES pent-up-demand. 

You should talk more about the pent-up demand, this one is very fascinating.

When US experiencing inflation in 70 and also in Asia during the hyperinflation of the late 90s, real estate skyrocketed. Was it due to pent-up demand, how to measure it?

If review back in data, I believe it's very fair, if not very conservative, to peg 5 million unit sales in US as the bar of measure. 

To say, at that level demand is for most part, being meet. It's probably a bit under as equilibrium is arguably closer to 5.35 million, but let's use 5.

Now as things dip below that benchmark, let's say by 200k units per month for lets say 5 months, it does NOT say that then immediately the next month there will be say, demand to purchase 1.2m home units, no. But it DOES give a "read" of that pressure level. So picture a full year, of a 30% drop from 5 million. Yes, that does give read that pressure is now at 130%. 

When that pressure "ruptures", because that is how such expresses itself, a rupture or eruption, the # of units available is a constricted #. So now you have 130% demand for what's available, and this directly results in pricing expression of said pressure. 

But..... nerding out here for a bit, 130% pressure does not erupt as 130%, it gets amplified in the event, coming out more so as 150% pressure due to the restrictions on expressing itself, the competition amplifies the pressure into desperation. 

In simplest terms, 2020. We just lived this equation. 

Now think of where we are at today. We OBVIOUSLY have pent-up-demand, here and now, everyone even doomsayers are saying we have it, although not cognizant of such, as they say people are not buying BECAUSE of the rate increases, that is by definition making pent-up-demand. 

So we have a net shortage market, with demand getting stopped from expressing itself, and getting all pent-up. The fact of sales continuing in many markets is proof of the strength of the pent-up-demand today being stronger then rate impact. So now raise rates a bit more, and hold. What happens when rate drop to say 5%. 

The Fed didn't fix anything, they kicked the can is what I am trying to say. 

The rate increases were so massive, so fast, it didn't allow an easing of demand, it just locked the door, the people are still waiting to get in, and every day more arrive and are all asking how long they gotta wait to get in. 

So when that door opens, yes, it will be a rush, again. How big, all depends how long they have to wait, and how wide open that door get's thrown open when it opens. 

If Fed actually wanted to "fix" things vs can kicking, they'd drop rate TODAY too a metered level, something like 200 basis point drop from today. And ride out the demand cycle in a regulated manner. We were with flood gates wide open, then they shut them almost completely closed, one extreme to the other. Nothing will be fixed, only delayed. 

The only way the Fed direction makes sense is if they planned to get mass unemployment, and suck dry savings to impoverish everyone, then start slowly letting off some all can just barely tread water. That is some epic evil sh#t if that's the case, and in no way shape or form for "we-the-people". 

IDK, maybe that is the attempt, but it's rather extreme and would require inducing a huge recession and I don't see any politically surviving such. 

IDK, what there doing doesn't make sense, what makes sense for what there doing doesn't make sense.... Most likely is they don't really know either, and are just reacting, and then justify reaction, never be wrong especially when wrong kinda thing. 

If later is the case, I could see a easing cycle start here in Dec and continue M2M into spring market where hopefully they stop and sit at a sane point and do as I started, let the market work itself out, let demand express itself and find equilibrium free of manipulation. 

Let the market work itself out? We all had housing induced welfare from the fed and now complain that it’s gone? Why? To justify double digit gains in RE? We are probably the only country that gives 30 year fixed rate mortgages, and when rates hike back to more normal levels the market can’t handle it and realtor complains about it because sales go down. Fed does know what it’s doing, it’s trying to move people from realtor jobs to jobs that produce something and that is working. 

 Mistake was being too low for too long. Now they overcompensate because only way to stop the freight train is by derailing it. 

 Well Comrade John, not sure where you picked up that chip on your shoulder so heavy to pickup a hammer and sickle, but now I understand so much better why you consistently have no comprehension or clue of what's being discussed or mentioned, and just blast tag-line too tag-line. To be a good communist does require a whole lot of turning one's brain off. 

You have fun with that Comrade, I'm gonna leave your block back on, I find communists boring, among other things.