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. 

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

 That’s right, JP Morgan using Minneapolis based realtor to close their billion dollar purchases. 

I thought fed was communist for forcing rates so high so fast? Now you speak of it how great it is by tricking the public perception. Which one is it?

also, still predicting 15 percent drop by March? Or are you reverting back to the original no drop at all now?

what's funny (or hyprocrite) from the Fed is truly what they say and their action is very different than reality LOL.
Today  they said they want to increase the rate again albeit slowly, so the normal reaction would be the yield to be higher right, but instead
Yield is going to go another 1 month low with the dollar hitting 3 month low, the dollar position is almost similar to the May position.

What's astonishing too is the Fed keep injecting new liquidity to the market, so while they raise the terminal rate but effectively they do QE as new dollar increases. As result new home price is reaching new high this month, same happened to stock markt as well. I guess that would be an indirect result of the liquidity. Here's the snapshot of latest 15 days of Fed liquidity.

That is interesting. I think part of the reversal is market thinks fed slowing down means they are nearing a rate cut. 

something interesting with the jobs market is, if Elon musk can pull off laying 75 percent of staff off and having no impact to operations, it’s going to get a lot of ceos and executives to look at their staff and make some serious cuts. Not to 75 percent level, but there is a ton of waste out there in the labor markets. A LOT! And once the tide shifts the other way, it can get ugly fast. 

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

 That’s right, JP Morgan using Minneapolis based realtor to close their billion dollar purchases. 

I thought fed was communist for forcing rates so high so fast? Now you speak of it how great it is by tricking the public perception. Which one is it?

also, still predicting 15 percent drop by March? Or are you reverting back to the original no drop at all now?

what's funny (or hyprocrite) from the Fed is truly what they say and their action is very different than reality LOL.
Today  they said they want to increase the rate again albeit slowly, so the normal reaction would be the yield to be higher right, but instead
Yield is going to go another 1 month low with the dollar hitting 3 month low, the dollar position is almost similar to the May position.

What's astonishing too is the Fed keep injecting new liquidity to the market, so while they raise the terminal rate but effectively they do QE as new dollar increases. As result new home price is reaching new high this month, same happened to stock markt as well. I guess that would be an indirect result of the liquidity. Here's the snapshot of latest 15 days of Fed liquidity.

That is interesting. I think part of the reversal is market thinks fed slowing down means they are nearing a rate cut. 

something interesting with the jobs market is, if Elon musk can pull off laying 75 percent of staff off and having no impact to operations, it’s going to get a lot of ceos and executives to look at their staff and make some serious cuts. Not to 75 percent level, but there is a ton of waste out there in the labor markets. A LOT! And once the tide shifts the other way, it can get ugly fast. 

 yea, but elon the great is in hiring mode now ( i really like when he reinstated the former president )

The thing is when the good thing happened, it is not added to the news section, especially mainstream media lol

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

 That’s right, JP Morgan using Minneapolis based realtor to close their billion dollar purchases. 

I thought fed was communist for forcing rates so high so fast? Now you speak of it how great it is by tricking the public perception. Which one is it?

also, still predicting 15 percent drop by March? Or are you reverting back to the original no drop at all now?

what's funny (or hyprocrite) from the Fed is truly what they say and their action is very different than reality LOL.
Today  they said they want to increase the rate again albeit slowly, so the normal reaction would be the yield to be higher right, but instead
Yield is going to go another 1 month low with the dollar hitting 3 month low, the dollar position is almost similar to the May position.

What's astonishing too is the Fed keep injecting new liquidity to the market, so while they raise the terminal rate but effectively they do QE as new dollar increases. As result new home price is reaching new high this month, same happened to stock markt as well. I guess that would be an indirect result of the liquidity. Here's the snapshot of latest 15 days of Fed liquidity.

That is interesting. I think part of the reversal is market thinks fed slowing down means they are nearing a rate cut. 

something interesting with the jobs market is, if Elon musk can pull off laying 75 percent of staff off and having no impact to operations, it’s going to get a lot of ceos and executives to look at their staff and make some serious cuts. Not to 75 percent level, but there is a ton of waste out there in the labor markets. A LOT! And once the tide shifts the other way, it can get ugly fast. 

 yea, but elon the great is in hiring mode now ( i really like when he reinstated the former president )

The thing is when the good thing happened, it is not added to the news section, especially mainstream media lol

So he is not operating with 75 percent less staff now? I’ve only been following mainstream on this, and I thought Twitter was supposed to be not functional at this point. 

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

 That’s right, JP Morgan using Minneapolis based realtor to close their billion dollar purchases. 

I thought fed was communist for forcing rates so high so fast? Now you speak of it how great it is by tricking the public perception. Which one is it?

also, still predicting 15 percent drop by March? Or are you reverting back to the original no drop at all now?

what's funny (or hyprocrite) from the Fed is truly what they say and their action is very different than reality LOL.
Today  they said they want to increase the rate again albeit slowly, so the normal reaction would be the yield to be higher right, but instead
Yield is going to go another 1 month low with the dollar hitting 3 month low, the dollar position is almost similar to the May position.

What's astonishing too is the Fed keep injecting new liquidity to the market, so while they raise the terminal rate but effectively they do QE as new dollar increases. As result new home price is reaching new high this month, same happened to stock markt as well. I guess that would be an indirect result of the liquidity. Here's the snapshot of latest 15 days of Fed liquidity.

That is interesting. I think part of the reversal is market thinks fed slowing down means they are nearing a rate cut. 

something interesting with the jobs market is, if Elon musk can pull off laying 75 percent of staff off and having no impact to operations, it’s going to get a lot of ceos and executives to look at their staff and make some serious cuts. Not to 75 percent level, but there is a ton of waste out there in the labor markets. A LOT! And once the tide shifts the other way, it can get ugly fast. 

 yea, but elon the great is in hiring mode now ( i really like when he reinstated the former president )

The thing is when the good thing happened, it is not added to the news section, especially mainstream media lol

So he is not operating with 75 percent less staff now? I’ve only been following mainstream on this, and I thought Twitter was supposed to be not functional at this point. 

 hahaha he's in hiring mode after firing the old guys. 

here's the truth: it's true any tech company could still run with 50% less employee, however, the tech growth is extremely dependent on local talent, few projects are extremely proprietary once the project facing large turnover, the project is no longer feasible financially, tech employee doesn't like the company that likes to layoff people, instead of working for them they will work for a competitor. so there's this balance between CTO and CFO how many engineers they need vs the capital that they going to print from the future project. In Twitter case this company is losing so much money so Elon the great is restructuring the company from the bottom.

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

 That’s right, JP Morgan using Minneapolis based realtor to close their billion dollar purchases. 

I thought fed was communist for forcing rates so high so fast? Now you speak of it how great it is by tricking the public perception. Which one is it?

also, still predicting 15 percent drop by March? Or are you reverting back to the original no drop at all now?

what's funny (or hyprocrite) from the Fed is truly what they say and their action is very different than reality LOL.
Today  they said they want to increase the rate again albeit slowly, so the normal reaction would be the yield to be higher right, but instead
Yield is going to go another 1 month low with the dollar hitting 3 month low, the dollar position is almost similar to the May position.

What's astonishing too is the Fed keep injecting new liquidity to the market, so while they raise the terminal rate but effectively they do QE as new dollar increases. As result new home price is reaching new high this month, same happened to stock markt as well. I guess that would be an indirect result of the liquidity. Here's the snapshot of latest 15 days of Fed liquidity.

That is interesting. I think part of the reversal is market thinks fed slowing down means they are nearing a rate cut. 

something interesting with the jobs market is, if Elon musk can pull off laying 75 percent of staff off and having no impact to operations, it’s going to get a lot of ceos and executives to look at their staff and make some serious cuts. Not to 75 percent level, but there is a ton of waste out there in the labor markets. A LOT! And once the tide shifts the other way, it can get ugly fast. 

 yea, but elon the great is in hiring mode now ( i really like when he reinstated the former president )

The thing is when the good thing happened, it is not added to the news section, especially mainstream media lol

So he is not operating with 75 percent less staff now? I’ve only been following mainstream on this, and I thought Twitter was supposed to be not functional at this point. 

 hahaha he's in hiring mode after firing the old guys. 

here's the truth: it's true any tech company could still run with 50% less employee, however, the tech growth is extremely dependent on local talent, few projects are extremely proprietary once the project facing large turnover, the project is no longer feasible financially, tech employee doesn't like the company that likes to layoff people, instead of working for them they will work for a competitor. so there's this balance between CTO and CFO how many engineers they need vs the capital that they going to print from the future project. In Twitter case this company is losing so much money so Elon the great is restructuring the company from the bottom.

Playing devils advocate though, what happens if all of the ceos band together and decide they will follow the Elon musk model of fewer staff? Not saying it’s likely, but initially everyone is laughing at Elon thinking Twitter was supposed to be shut down by now, but he’s still pulling it off. It is pretty impressive he’s been able to keep things functional with 75 percent staff reduction. 

 In theory, technology is supposed to be deflationary and increased productivity. I do think corporations as they report bad earnings will think, do I really need this many people in our dept or do I even need this dept at all? 

[James NA]

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

 Equity…
Appraisals are highly restricted…. But BPOs aren’t… so “ appraising a house though BPOs” is the preferred loophole by lenders who don’t care about tomorrow.

Near the beginning of the end.. 2006- 2008… there were ads gaaaaalore… about refinancing and pulling out your equity.

We just had two years of that. Yes borrowers needed credit and income verification this time…
but now there is a pool of properties that DONT HAVE EQUITY or as much equity….

So…. AMAZON…TWITTER.. FACE TUBE…. they all start laying off… and the stampede will start as a trickle…

One black swan… ( another COVID type event) .. 

full tilt selling and competition.

Crash?… maybe not…. Better deals and Sub-To?…… all day

[James NA]

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

 Equity…
Appraisals are highly restricted…. But BPOs aren’t… so “ appraising a house though BPOs” is the preferred loophole by lenders who don’t care about tomorrow.

Near the beginning of the end.. 2006- 2008… there were ads gaaaaalore… about refinancing and pulling out your equity.

We just had two years of that. Yes borrowers needed credit and income verification this time…
but now there is a pool of properties that DONT HAVE EQUITY or as much equity….

So…. AMAZON…TWITTER.. FACE TUBE…. they all start laying off… and the stampede will start as a trickle…

One black swan… ( another COVID type event) .. 

full tilt selling and competition.

Crash?… maybe not…. Better deals and Sub-To?…… all day

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Playing devils advocate though, what happens if all of the ceos band together and decide they will follow the Elon musk model of fewer staff? Not saying it’s likely, but initially everyone is laughing at Elon thinking Twitter was supposed to be shut down by now, but he’s still pulling it off. It is pretty impressive he’s been able to keep things functional with 75 percent staff reduction. 

 In theory, technology is supposed to be deflationary and increased productivity. I do think corporations as they report bad earnings will think, do I really need this many people in our dept or do I even need this dept at all? 

I guess, the very fundamental factor that drives tech co. profitability is the interest rate and US dollar. I don't think many tech companies that is not producing money would be able to sustain a long recession.  But for the company that produces cash flow, it also depends on where the money is coming from, many web site company only rely upon revenue from advertisement income which typically declines during the recession.

So if the interest rate is high while revs. are declining then yes they have to reduce the workforce. Especially if the dollar remains too high. 

[Carlos Ptriawan]

Quote from @James NA:

Quote from @Greg Scott:

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

 Equity…
Appraisals are highly restricted…. But BPOs aren’t… so “ appraising a house though BPOs” is the preferred loophole by lenders who don’t care about tomorrow.

Near the beginning of the end.. 2006- 2008… there were ads gaaaaalore… about refinancing and pulling out your equity.

We just had two years of that. Yes borrowers needed credit and income verification this time…
but now there is a pool of properties that DONT HAVE EQUITY or as much equity….

So…. AMAZON…TWITTER.. FACE TUBE…. they all start laying off… and the stampede will start as a trickle…

One black swan… ( another COVID type event) .. 

full tilt selling and competition.

Crash?… maybe not…. Better deals and Sub-To?…… all day

it's very weird right that the fed was finally able to crack the labor market and manufacturing sector.
but at the same time, the yield went down 50bps so fast that immediately new home prices are reaching a new high.
and the fed literally mentioned they have started the U-turn.

I don't think there's a coincidence about that

5/1 ARM is 5.50 now. Back to normal "range".

[V.G Jason]

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

I think rates being high stay till top of 2024, start decelerating mid 2024 at this current point in time. Buying a house next year at 10% will likely take till 2026-2027 for me to make sense to refi. The economy's job market reports is kind of disengaging; almost 90% of jobs are non-white collar worker jobs including about 15-20% that are temp jobs. If holiday season doesn't go okay for all industries, but airlines, I presume Q1-Q2 will be suffocating.

[Carlos Ptriawan]

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

it all depends on CPI.

And CPI depends primarily on energy,food price, and rent that's being shaped by BP community LOL 

So the Fed ultimately relying on us to reduce inflation LOL

[V.G Jason]

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

it all depends on CPI.

And CPI depends primarily on energy,food price, and rent that's being shaped by BP community LOL 

So the Fed ultimately relying on us to reduce inflation LOL

 Well food is heavily controlled through trade & supply chains, that's a global issue. Ukraine/Russia war are having something to do with that. Some, but not all. CPI will come down, but 2% will take a lot of time or the wars resolve itself and the current administration changes stance on energy. Energy elevation of prices could be almost shot down significantly by April, May 2023 if policies were conducive to it. That aspect alone would get inflation down probably a year ahead of schedule, if not early.

Fed is having to work off the administration's policies, not necessarily us. And there own policies, consumer savings: debt ratio is at the absolute lowest in quite sometime. That's not us, that's fed policy creating that. We don't get into enormous debt, low savings when 16 months ago it was vice versa without there being a huge policy change. Manipulation by the fed causes these actions. 

Housing prices--go back to supply chains. There's not enough incentive to create a new build in higher rate environment and tighter supply. Shipping costs, transport costs, labor costs, build costs for a $400k house to sell will probably get you within a 2% margin. That's not going to make a builder build. Demand is there, but the fed's rate hikes are literally the definition of demand destruction. It's cheaper to board up with others or live at home than to pursue individual housing. When that time comes though, you bet these hard assets are going to take another long look up. You can't keep the debt levels this way without printing more money, unless there's a totality within Washington of defeating the debt issue in 15-25 years and that'd take 3-6 terms of presidency, senate, congress, and we can't even get 4 years of a non divisive term. So money will keep being issued to defeat debt, prices will continue to go up on hard assets. We just need to be mindful of regulation. I'm convinced the new norm, once we're in a normal rate environment is 50% or more(depending on location) is the new ratio of allocation for housing. No longer 25-40%. You'll chew up your budget paycheck with 75-80% for rent/mortgage, car payment, insurance, gas before being able to live for the general 70-75% of the US population. Some will back off on cars, it'll take 2-4 years for people to realize that. 

Until that time, yes prices are going to come down and harder in some areas. I don't think Miami and Austin do face plants, or even Nashville. But if you're down 15-25%, that's expected. I think generally down 20-30%. It's not going to dip the break even point of rates:price from 2 years back in most markets--I would wager. If you're capable of buying and loaning with this rate and holding for 3-5 years to refi and eating costs OTM for those few years(say 36-60 months of losing $100-200/mo), you're appreciating year 5+ may be astronomical. that's my bet.

[Carlos Ptriawan]

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Until that time, yes prices are going to come down and harder in some areas. I don't think Miami and Austin do face plants, or even Nashville. But if you're down 15-25%, that's expected. I think generally down 20-30%. It's not going to dip the break even point of rates:price from 2 years back in most markets--I would wager. If you're capable of buying and loaning with this rate and holding for 3-5 years to refi and eating costs OTM for those few years(say 36-60 months of losing $100-200/mo), you're appreciating year 5+ may be astronomical. that's my bet.

 the most significant factor is simply the bond buyer, it seems the appetite for US bond from foreign buyers is reaching new high this week  even with the bad economy that US experienced so far.

[Account Closed]

Can someone explain to me why so many people are calling it a "crash" when in fact it is a "correction".  The market is beginning to stabilize to pre-pandemic levels.  The pandemic caused a lot of panic, that can't be denied, on many fronts.  But as far as the housing market is concerned, AREAS not nationally, are seeing dips in home values.  People are starting to calm a little, the killer virus has been "contained", nerves are coming off the ledge they were so quickly pushed to, and information is becoming more rational rather than fear driven as it was a couple of years ago.  So, naturally as nerves and pressure go down, so do home values, gas prices, and rent prices.  For us to think that these highs would be here forever is NAIEVE.  "A rising tide raises all ships".  What goes up must come down.

[John Carbone]

Quote from @Account Closed:

Can someone explain to me why so many people are calling it a "crash" when in fact it is a "correction".  The market is beginning to stabilize to pre-pandemic levels.  The pandemic caused a lot of panic, that can't be denied, on many fronts.  But as far as the housing market is concerned, AREAS not nationally, are seeing dips in home values.  People are starting to calm a little, the killer virus has been "contained", nerves are coming off the ledge they were so quickly pushed to, and information is becoming more rational rather than fear driven as it was a couple of years ago.  So, naturally as nerves and pressure go down, so do home values, gas prices, and rent prices.  For us to think that these highs would be here forever is NAIEVE.  "A rising tide raises all ships".  What goes up must come down.

I haven’t been calling it a “crash” I’ve been calling for a 20-30 percent decline by end of 2023.

@James Hamling  initially called for a 5 percent seasonal adjustment and now he’s at a 15 percent correction.

Not sure if he is at the 20 percent level yet, maybe in a few months he will pivot again. He is on record though as saying “now is the best time to buy” even thinking prices will drop 5-15 percent. Doesn’t make any sense. If you call him out in it though, he will try to “cancel” you by blocking and calling you a communist for thinking prices will drop and jobs will be lost. 
 

[James Hamling]

Quote from @Account Closed:

Can someone explain to me why so many people are calling it a "crash" when in fact it is a "correction".  The market is beginning to stabilize to pre-pandemic levels.  The pandemic caused a lot of panic, that can't be denied, on many fronts.  But as far as the housing market is concerned, AREAS not nationally, are seeing dips in home values.  People are starting to calm a little, the killer virus has been "contained", nerves are coming off the ledge they were so quickly pushed to, and information is becoming more rational rather than fear driven as it was a couple of years ago.  So, naturally as nerves and pressure go down, so do home values, gas prices, and rent prices.  For us to think that these highs would be here forever is NAIEVE.  "A rising tide raises all ships".  What goes up must come down.

 Well, see, a headline or YT post with "CORRECTION" in title get's ten's of views....... 

              And a headline or YT vid with "CRASH" in title get's tens of THOUSANDS of views....... 

See, simple, all makes sense in the world, right, lol. 

Welcome to the living Idiocracy!

[James Hamling]

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

I think rates being high stay till top of 2024, start decelerating mid 2024 at this current point in time. Buying a house next year at 10% will likely take till 2026-2027 for me to make sense to refi. The economy's job market reports is kind of disengaging; almost 90% of jobs are non-white collar worker jobs including about 15-20% that are temp jobs. If holiday season doesn't go okay for all industries, but airlines, I presume Q1-Q2 will be suffocating.

 By economic and finance norms, 5.5T% - 6.5% is a "healthy norm", so keep that in mind. It does not matter how long or how low into SUB-normal realm things got, 5.5-6.5 IS "normal". 

Things look to be getting on track to land back at "normal" a lot faster then any anticipated, many indicating may land there and hover back in normal within coming 12 months. 

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

But, do I see years of stability coming, NO. Hell, at this point I'd jump for joy with just 1 quarter of boring stability. We have not had stability sustained for years now, pick your chaos factor, there is too many to list. The silver lining is things have come VERY resilient to chaos, far more then years past, because were all used to it now, we get over things in light speed now compared to historical norms. 

[Carlos Ptriawan]

Quote from @James Hamling:

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

Good to know your opinion on this. So 7 years of stability is making home price stable until 2029 then. Perhaps the home price would be just flat after the peak of 2022 then. Seems like it's good time to sell RE instead ;-)

[V.G Jason]

Quote from @James Hamling:

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

I think rates being high stay till top of 2024, start decelerating mid 2024 at this current point in time. Buying a house next year at 10% will likely take till 2026-2027 for me to make sense to refi. The economy's job market reports is kind of disengaging; almost 90% of jobs are non-white collar worker jobs including about 15-20% that are temp jobs. If holiday season doesn't go okay for all industries, but airlines, I presume Q1-Q2 will be suffocating.

 By economic and finance norms, 5.5T% - 6.5% is a "healthy norm", so keep that in mind. It does not matter how long or how low into SUB-normal realm things got, 5.5-6.5 IS "normal". 

Things look to be getting on track to land back at "normal" a lot faster then any anticipated, many indicating may land there and hover back in normal within coming 12 months. 

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

But, do I see years of stability coming, NO. Hell, at this point I'd jump for joy with just 1 quarter of boring stability. We have not had stability sustained for years now, pick your chaos factor, there is too many to list. The silver lining is things have come VERY resilient to chaos, far more then years past, because were all used to it now, we get over things in light speed now compared to historical norms. 

 By economic & financial norms-- you're absolutely correct. But by the average investor, look here for your case studies or look at the average joe in a different asset class, they'll tell you 5.5-6.5 is high. So it's normal, but it's not expectation. There's a difference and if it's not meeting expectations, that's when the market reacts harshly. 

As for stability, I think we take it 1 year at at time. Political uncertainty will be  more directional than any other input that comes across and we're going to remain on course or change in approximately two years.

[James Hamling]

Quote from @V.G Jason:

Quote from @James Hamling:

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

I think rates being high stay till top of 2024, start decelerating mid 2024 at this current point in time. Buying a house next year at 10% will likely take till 2026-2027 for me to make sense to refi. The economy's job market reports is kind of disengaging; almost 90% of jobs are non-white collar worker jobs including about 15-20% that are temp jobs. If holiday season doesn't go okay for all industries, but airlines, I presume Q1-Q2 will be suffocating.

 By economic and finance norms, 5.5T% - 6.5% is a "healthy norm", so keep that in mind. It does not matter how long or how low into SUB-normal realm things got, 5.5-6.5 IS "normal". 

Things look to be getting on track to land back at "normal" a lot faster then any anticipated, many indicating may land there and hover back in normal within coming 12 months. 

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

But, do I see years of stability coming, NO. Hell, at this point I'd jump for joy with just 1 quarter of boring stability. We have not had stability sustained for years now, pick your chaos factor, there is too many to list. The silver lining is things have come VERY resilient to chaos, far more then years past, because were all used to it now, we get over things in light speed now compared to historical norms. 

 By economic & financial norms-- you're absolutely correct. But by the average investor, look here for your case studies or look at the average joe in a different asset class, they'll tell you 5.5-6.5 is high. So it's normal, but it's not expectation. There's a difference and if it's not meeting expectations, that's when the market reacts harshly. 

As for stability, I think we take it 1 year at at time. Political uncertainty will be  more directional than any other input that comes across and we're going to remain on course or change in approximately two years.

 If a persons expectation is sub 5% mortgage financing, or especially sub 4%, they are NOT an investor nor a Real Estate Professional, there a speculator with extremely limited experience or knowledge. Name the industry, any/every industry has had GREAT years where everything was just perfect, and nobody of any professional stance then stomps there feet yelling something is wrong if "perfect" is not perpetual. 

All the Non-professionals exiting REI is a GOOD thing, it means STABILITY not instability. The non-professionals make-up a drip in the overall bucket that is REI Industry. For decades countless masses seek to get in, buy programs galore to find there in, and very VERY few ever actually get-in. The vast majority of REI activity is, has been, and will remain professionals.

So for the few who will be pressed out, and yes it is a very limited few who actually would have been in but can't vs those just using it as there new excuse for still not actually doing anything, oh well. It's a non-issue. 

For the many who want to get in and find a hurdle, and use there wit's, they will JV, join syndications, turn-key, or any of the various other entry options. There is a lot of very smart "noobs" out there, I have faith most will recognize when the climate has changed and level of complexity has moved above there capacity, and that it's fertile ground to ADJUST to JV-type actions.

There is no risk of sizable capital retraction from such. 

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

Good to know your opinion on this. So 7 years of stability is making home price stable until 2029 then. Perhaps the home price would be just flat after the peak of 2022 then. Seems like it's good time to sell RE instead ;-)

 One MAJOR catch is the phrase "inflation adjusted". 

7 year lens, I wouldn't be surprised to ideally see an average "INFLATION ADJUSTED" average annual appreciation around 2.5-4%. 

Just taking raw numbers, probably going to be closer to the 12% mark then flat. Because inflation still has a whole lot more coming. Wage inflation has not even fully cycled once yet. Given the size of M2 hit, no chances this inflation will cycle out in less then several years.

We have wage inflation to cycle, the COGs inflation to cycle in response to wage inflation, the tax inflation impact, 2nd wage inflation cycle, etc etc etc.  

As I have mentioned before, there is a direct relation to how many cycles inflation will take to level out, to the size of the initial M2. It's like saying the after-shocks are in direct relation to the initial earthquake. We just went through a 12.9 shake, it's not going to just end on a dime. 

Yes, the Fed is working to head off the cycles by tanking the blue-collar and working white-collar class, but front-loading via shortages is a granite wall to there attempts. They CANT deflate case-line industries enough to hold that effect up chain, it's a kind of trickle-up effect. 

So, years to comes real estate will press up mostly via inflationary mechanics, and will hold support via demand requirements facilitated via front-loaded net shortage environment. Alternative housing will also act as supporting apparatus as rent's equally elevate. In short saying there is no "easy" way out for a person, buying will be spendy but so will renting. 

Rent subsidies have equally jumped, that should be a HUGE sign to everyone which way the wind is blowing, is it realistic to expect market rents to sit significantly below subsidized rents? No, because we will just shift to those, there is a 5-7yr backlog+. 

There is not 1 realistic, fact based, non-hyperbolae path out there for significant declines in Real Estate other then a new unit production volume, which is a mitigating action that holds pricing levels up. All persons I have ever read in any of this promoting a "crash" in home prices or rents ALSO states a drop in new unit volume, which contradicts there first claim. 

If someone wanted to argue FOR a "crash", they'd do well to argue home production would INCREASE, not decline, and how it would increase, ideally by 4x+. It would be complete BS of course, but at least more economically correct then the current "crash" BS.  

Lastly, the whole ridiculousness that Black Rock will "have to" start liquidating properties in mass, flooding the market blah blah blah, it's just another GME bunch of BS, it holds as much validity and reality basis as GME having to go to $1,500 share "any day". Still waiting for the "apes" to grow a brain. 

[Carlos Ptriawan]

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

Good to know your opinion on this. So 7 years of stability is making home price stable until 2029 then. Perhaps the home price would be just flat after the peak of 2022 then. Seems like it's good time to sell RE instead ;-)

 One MAJOR catch is the phrase "inflation adjusted". 

7 year lens, I wouldn't be surprised to ideally see an average "INFLATION ADJUSTED" average annual appreciation around 2.5-4%. 

Just taking raw numbers, probably going to be closer to the 12% mark then flat. Because inflation still has a whole lot more coming. Wage inflation has not even fully cycled once yet. Given the size of M2 hit, no chances this inflation will cycle out in less then several years.

We have wage inflation to cycle, the COGs inflation to cycle in response to wage inflation, the tax inflation impact, 2nd wage inflation cycle, etc etc etc.  

As I have mentioned before, there is a direct relation to how many cycles inflation will take to level out, to the size of the initial M2. It's like saying the after-shocks are in direct relation to the initial earthquake. We just went through a 12.9 shake, it's not going to just end on a dime. 

Yes, the Fed is working to head off the cycles by tanking the blue-collar and working white-collar class, but front-loading via shortages is a granite wall to there attempts. They CANT deflate case-line industries enough to hold that effect up chain, it's a kind of trickle-up effect. 

So, years to comes real estate will press up mostly via inflationary mechanics, and will hold support via demand requirements facilitated via front-loaded net shortage environment. Alternative housing will also act as supporting apparatus as rent's equally elevate. In short saying there is no "easy" way out for a person, buying will be spendy but so will renting. 

Rent subsidies have equally jumped, that should be a HUGE sign to everyone which way the wind is blowing, is it realistic to expect market rents to sit significantly below subsidized rents? No, because we will just shift to those, there is a 5-7yr backlog+. 

There is not 1 realistic, fact based, non-hyperbolae path out there for significant declines in Real Estate other then a new unit production volume, which is a mitigating action that holds pricing levels up. All persons I have ever read in any of this promoting a "crash" in home prices or rents ALSO states a drop in new unit volume, which contradicts there first claim. 

If someone wanted to argue FOR a "crash", they'd do well to argue home production would INCREASE, not decline, and how it would increase, ideally by 4x+. It would be complete BS of course, but at least more economically correct then the current "crash" BS.  

Lastly, the whole ridiculousness that Black Rock will "have to" start liquidating properties in mass, flooding the market blah blah blah, it's just another GME bunch of BS, it holds as much validity and reality basis as GME having to go to $1,500 share "any day". Still waiting for the "apes" to grow a brain. 

 Here's a little bit of a secret.

- M2 growth since 2000 is about 6%-7%. It's not much a secret why real estate keep appreciating 6-7% as well, while Index is appreciating 8%.
2022 is the first year that M2 growth is slightly negative, but 2020-2022 M2 growth is 37% or M2 acceleration is too fast in the last two years. If we count it this way then the expectation would be we have slow growth in 2023 and 2024, and back to regular M2 growth in 2025.,home appreciation is very possible to restart normal appreciation in 2025. However that all depends if CPI going back to 2%, the Fed projected 2% inflation in 2024. So sub 3 and sub 4 mortgage rate is still possible if Fed use the same way of thinking.

- Now it's not just Blackrock wanna be the biggest landlord in SFR space but also jp morgan and JLL.

[Nicholas L.]

One thing that gets overlooked is that not every property purchased by an institutional buyer is held by them. According to NAR only 42% of SFH purchases by institutional investors are kept as rentals.

[Carlos Ptriawan]

Quote from @Nicholas L.:

One thing that gets overlooked is that not every property purchased by an institutional buyer is held by them. According to NAR only 42% of SFH purchases by institutional investors are kept as rentals.

I used to track their activity, they usually do a buy-fix-rental-sell model, most of their purchases were between 2014-2016, and sold the same houses in 2018-2019. Their activity is quite a good indication of when the market would make impactful changes. Now if JLL is entering the spaces I think they may have a future plan to have REIT specific to regional SFR only. This company in particular never loses investor money.

[V.G Jason]

Quote from @James Hamling:

Quote from @V.G Jason:

Quote from @James Hamling:

Quote from @V.G Jason:

Questions are how long do we stay at this high rate environment(relatively speaking to last 15 years)?

And how quickly, if at all, do we do decelerate it? Those things are going to make hard assets boom. 

I think rates being high stay till top of 2024, start decelerating mid 2024 at this current point in time. Buying a house next year at 10% will likely take till 2026-2027 for me to make sense to refi. The economy's job market reports is kind of disengaging; almost 90% of jobs are non-white collar worker jobs including about 15-20% that are temp jobs. If holiday season doesn't go okay for all industries, but airlines, I presume Q1-Q2 will be suffocating.

 By economic and finance norms, 5.5T% - 6.5% is a "healthy norm", so keep that in mind. It does not matter how long or how low into SUB-normal realm things got, 5.5-6.5 IS "normal". 

Things look to be getting on track to land back at "normal" a lot faster then any anticipated, many indicating may land there and hover back in normal within coming 12 months. 

How long do we sit at "normal", well I hope a very long time, at least 7 years, because the economy NEEDS stability and all the swings are NOT good for any kind of stability, which is needed to get things on track to get anywhere near to parity in housing demand. And fact is NEVER in history has the economy done well when housing was in any kind of struggle. A good economy requires a good housing economy, and significant shortage is NOT healthy. 

But, do I see years of stability coming, NO. Hell, at this point I'd jump for joy with just 1 quarter of boring stability. We have not had stability sustained for years now, pick your chaos factor, there is too many to list. The silver lining is things have come VERY resilient to chaos, far more then years past, because were all used to it now, we get over things in light speed now compared to historical norms. 

 By economic & financial norms-- you're absolutely correct. But by the average investor, look here for your case studies or look at the average joe in a different asset class, they'll tell you 5.5-6.5 is high. So it's normal, but it's not expectation. There's a difference and if it's not meeting expectations, that's when the market reacts harshly. 

As for stability, I think we take it 1 year at at time. Political uncertainty will be  more directional than any other input that comes across and we're going to remain on course or change in approximately two years.

 If a persons expectation is sub 5% mortgage financing, or especially sub 4%, they are NOT an investor nor a Real Estate Professional, there a speculator with extremely limited experience or knowledge. Name the industry, any/every industry has had GREAT years where everything was just perfect, and nobody of any professional stance then stomps there feet yelling something is wrong if "perfect" is not perpetual. 

All the Non-professionals exiting REI is a GOOD thing, it means STABILITY not instability. The non-professionals make-up a drip in the overall bucket that is REI Industry. For decades countless masses seek to get in, buy programs galore to find there in, and very VERY few ever actually get-in. The vast majority of REI activity is, has been, and will remain professionals.

So for the few who will be pressed out, and yes it is a very limited few who actually would have been in but can't vs those just using it as there new excuse for still not actually doing anything, oh well. It's a non-issue. 

For the many who want to get in and find a hurdle, and use there wit's, they will JV, join syndications, turn-key, or any of the various other entry options. There is a lot of very smart "noobs" out there, I have faith most will recognize when the climate has changed and level of complexity has moved above there capacity, and that it's fertile ground to ADJUST to JV-type actions.

There is no risk of sizable capital retraction from such. 

 In bold, you'd be surprised. Very surprised. Clearly, you're way ahead of the curve, but don't assume everyone else is. Infact, that's the reason there is a curve.