Housing crash deniers ???

[Greg R.]

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

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

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

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 Maui and BI are fully booked til May-June. I hate it when it's fully booked like this lol

[John Carbone]

Quote from @Carlos Ptriawan:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 Maui and BI are fully booked til May-June. I hate it when it's fully booked like this lol

 Those places are smaller sample size of units and they appeal to only primarily affluent market. A place like Gatlinburg appeals to everyone and has been most visited park for decades. 

The only time Gatlinburg ever slowed down was GFC. This is something to keep an eye on. 

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

[John Carbone]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

I’m personally not seeing it yet either, but I’m seeing it in the competition by looking at calendars.  

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

I’m personally not seeing it yet either, but I’m seeing it in the competition by looking at calendars.  

real competition though? Or people who "heard" you could jump in and make easy money on STR? It's amazing how many times people cut corners like not having beach chairs when near a beach, not having a high chair / pack in-play for family oriented homes or even just adding snacks. Not saying it's as simple as that but to your point around you managing ahead of time, strategy does matter.

[John Carbone]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

I’m personally not seeing it yet either, but I’m seeing it in the competition by looking at calendars.  

real competition though? Or people who "heard" you could jump in and make easy money on STR? It's amazing how many times people cut corners like not having beach chairs when near a beach, not having a high chair / pack in-play for family oriented homes or even just adding snacks. Not saying it's as simple as that but to your point around you managing ahead of time, strategy does matter.

 Yeah, the listings with no bookings are not operated or set up properly. However, last year at this time those places were renting out at a good clip going into 2022. So there is clearly a strong shift in demand going into 2023 relative to 2022. This could be a short blip though, and I hope it is as I don’t have bookings beyond Memorial Day. 

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

I’m personally not seeing it yet either, but I’m seeing it in the competition by looking at calendars.  

real competition though? Or people who "heard" you could jump in and make easy money on STR? It's amazing how many times people cut corners like not having beach chairs when near a beach, not having a high chair / pack in-play for family oriented homes or even just adding snacks. Not saying it's as simple as that but to your point around you managing ahead of time, strategy does matter.

 Yeah, the listings with no bookings are not operated or set up properly. However, last year at this time those places were renting out at a good clip going into 2022. So there is clearly a strong shift in demand going into 2023 relative to 2022. This could be a short blip though, and I hope it is as I don’t have bookings beyond Memorial Day. 

 That makes sense to me. Markets ar definitely slower just not a lot out there so prices are not holding strong but not dropping much so to speak. Generally obviously a few big markets got hit nationally.

On the rental side - people seem more cautious - so those not setup right I’m not surprised are hurting. On the flip side on a brand new property, I’m still seeing last minute rentals and long ones - and as reviews have been coming in bookings are jumping quick. So I feel like the market is there just selective.

Will it hold? Right now my concern there is china/fed. CHina Covid impact no supply chain has not been felt yet. Will be interesting. 

[Jay Hinrichs]

Quote from @Greg R.:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

@Michael Wooldridge @Carlos Ptriawan @John Carbone @Jay Hinrichs 

Gents, been out a couple months globe trotting (work). Have been almost completely unplugged... What did I miss?

for us new builds were slow Q 4  But we sold 3 in the last week all for full ask no consessions  675k , 850k, 900k.  this is Canby Oregon.  Our out of state rentals are going well also record Q 3 and Q 4 and I did 4 payoffs this week so far.. And some of my guys/gals are starting to keep their deals instead of selling right now.. which makes sense since we are BRRR funders and they have lots of equity so they still cash flow very nicely at todays rates and if they want to put them back in thier inventory in a year or so they could go to cap gain instead of ordinary income and or 1031..   Our FLA new builds though have gone down 10% once i lowered them  I sold one this week and only have 2 left.. then will exit that market..  Sold a very nice flip in Augusta GA that closes on the 10th and it sold in less than 5 days full price.. so I guess it just all depends.

That's great news Jay. Very happy for you. 👍👍

while its good news its still a far cry from a year earlier were we were selling 3 to 4 per month LOL  However if we can get 10 to 15 in the can this year we will be just fine. my investment grade mid west stuff though is really doing good for my BRRR clients they are killing it .. I have one company I funded over 50 deals for them in the last 18 months and they are up to 200 rentals I did not fund them all but maybe half.. all refi and hold all cash flow very very well. But keep in mind they live there and work from before the sun comes up to after it goes down 6 days a week.. this is hard work.. they find them I fund them they fix them they refi them. pretty proud of this particular company..

[Olivia Grabka]

@Greg R. Which are you asserting, that the market will correct or crash? A correction is not the same as a crash. Any claim regarding a market crash, is objectively wrong there is no evidence pointing to a crash.

[John Carbone]

Quote from @Olivia Grabka:

@Greg R. Which are you asserting, that the market will correct or crash? A correction is not the same as a crash. Any claim regarding a market crash, is objectively wrong there is no evidence pointing to a crash.

Based on the true definition of a “crash” this didn’t even happen in real estate in financial crisis, it was a multi year bear market. People use crash and “correction” synonymously, not saying it’s accurate to do so, but it gets the point across. The people I bought my first house from in 2012 that had to pay 50k at closing on a 160k house didn’t care about the correct definition of the housing market decline, it’s really  just semantics. 

[Olivia Grabka]

Anyone that uses correction & crash synonymously is not worth listening to.  The market corrected when interest rates shifted, there is no impending crash.  The only way you get a crash is if financing seizes up, 08 through mid 09 was a crash because financing was difficult to get.  I hope what I write here s not offensive, I do not mean to be offensive I just want to be clear. 

[Casey Dimascio]

Quote from @Greg R.:

Quote from @Greg Scott:

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

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  

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

Ok, so I don't deny the amount of regs re: lending, but let's be honest. Good lenders are able to manipulate DTI and bend the numbers to get people into loans that they can barley afford. Let's not pretend that all the people who purchased in this over-inflated market are super stable and can't foreclose. I personally know people who are living check to check and who bit off more than they could chew thinking that they had to buy during the recent housing craze. 

So I respectfully disagree... there is a house of cards that will come tumbling down.

Who are your lenders?! I haven't had this experience, and I've been through dozens. Getting a loan (especially over the past 15 months) has not been easy. They check, check, and double check DTI, credit, income up until the final hour. It's my understanding this was the complete opposite in 2008. In fact fraud was encouraged by lenders. They even had expansion clauses (mortgage payment/ rate increases after X amount of time) which were specifically targeted at the poor, who were more likely to default. It seems like much different practices now

[James Hamling]

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Greg R.:

@Michael Wooldridge @Carlos Ptriawan @John Carbone @Jay Hinrichs 

Gents, been out a couple months globe trotting (work). Have been almost completely unplugged... What did I miss?

Well Greg, if this were a game of poker that we sat down at the table of some months ago, you'd be sitting there twirling your 1 last remaining chip and I'd be sitting here barely visible behind my towering mass of them, so I'd have to say you missed a lot, a whole heck of a lot. 

If I were to venture a guess, I'd have to say what you missed was everything that mattered, because you were using confirmation bias. 
Some love to post how nobody can predict the market, yet here we are and it's exactly as I forecasted weeks and months in advance. Sure, my ego will happily accept the "genius" moniker, but that's not accurate either. I was able to forecast and predict with such high accuracy because I removed myself from the equation and simply listened to what the math and fundamental factors were saying. 

What I don't comprehend is the entrenchment in such opinions of "crash" even after the premise is shown and proven to be without merit. I don't understand that. 

We are now into the "new" stagflation. The nation continues it's march into a Renter Nation, this will not change. Those grasping to some false narrative of "crash" and "timing the bottom" will soon adjust to frustration messages, posting how the market is "wrong", and "who keeps buying at these prices", quickly finding themselves struggling or incapable of entry into the market any longer at the new pricing levels. 
And after the fact there will be realization of my message of warning that it WAS the best time to buy. Keyword "was" because barrier to entry will keep increasing for many and where being a spectator was a choice, it become a terminal fate. 

As Corporate Investors continue to gobble market share, the new paradigm will be a 5 cap. The days of 8+ will be stories told by old cowboys around the camp-fire of "back when". 

In simplest terms, this, today, is a corporate take-over. And the way those work is, by the time the average "Schmoe" realizes it, it's too late. This is one very big reason I have been warning to NOT try and time a bottom, just get in while you can, when it makes sense, where it makes sense. Anything else is just greed. Pigs get fat while hogs get slaughtered. 

The market specific deviations where they DO have a "correction" event in play, it's a falling knife, do you really want to reach out and grab that? CA for example, these coming years will be the bursting of the CA bubble. Where prices are 90%+ based upon perceptual value, and that perception is what's bursting, pressing value points back to fundamentals. CA is no longer "the" place to be, it just isn't. TX and FL have smashed that perception, and others like TN are on the rise. This is a new "great migration", empowered via remote working. 

The next "Guru's" of REI are those who today get this, and are right now setting out in satellite markets, blazing a new path of being a part of those areas people want to live. Focusing on demographics of such, tech enabled properties etc.. 

Those focusing on metrics of investing forged in '09', well it's a dinosaurs plight. It is not '09', nothing is the same. The market does not work the same, consumers do not work and think the same, the world does not operate the same. 
This is evolution. 
It will not stop for anyone's opinions of it. 

[James Hamling]

Quote from @Casey Dimascio:

Quote from @Greg R.:

Quote from @Greg Scott:

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

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  

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

Ok, so I don't deny the amount of regs re: lending, but let's be honest. Good lenders are able to manipulate DTI and bend the numbers to get people into loans that they can barley afford. Let's not pretend that all the people who purchased in this over-inflated market are super stable and can't foreclose. I personally know people who are living check to check and who bit off more than they could chew thinking that they had to buy during the recent housing craze. 

So I respectfully disagree... there is a house of cards that will come tumbling down.

Who are your lenders?! I haven't had this experience, and I've been through dozens. Getting a loan (especially over the past 15 months) has not been easy. They check, check, and double check DTI, credit, income up until the final hour. It's my understanding this was the complete opposite in 2008. In fact fraud was encouraged by lenders. They even had expansion clauses (mortgage payment/ rate increases after X amount of time) which were specifically targeted at the poor, who were more likely to default. It seems like much different practices now

 Casey, no matter how much sense you speak some will just desperately grasp to there tin-foil hat and scream ever louder "NO, the SKY IS FALLING!" and run to there rock to hide under. 

Lending today is as you mentioned, very stringently reviewed and analyzed to an impressive degree. There is nothing similar to '08', nothing. 

A person could go out and get alternative lending of let's say Hard-$, and maybe press an idiotic buy that no sane lender would empower BUT it's done in a manner and direction of stringent collateralization due to the pressing probability of default. Is that a market problem? Or a buyer problem? This scenario has played out in every market for years upon decades upon decades. There is always some people making bad choices, pick your casino, it's full of em. 

[Nicholas L.]

@James Hamling

I know we discussed the buying vs. renting dynamics a while back.  And I think you've provided some information indicating that you expect that corporate / large institution purchases of basically all types of housing, especially SFH, are going to continue; can you remind me if that's accurate?

Here's my question.  The homeownership rate fell after the financial crisis, picked back up, and then has slowed again.  So are you saying it's going to stay static, or even fall?  It seems to me that the desire for homeownership is strong in the US... so I just have a hard time seeing it actually falling, even if housing stays expensive and we don't get back to the near 70% I believe we hit in the early 2000s.

Thoughts?

[James Hamling]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

I’m personally not seeing it yet either, but I’m seeing it in the competition by looking at calendars.  

real competition though? Or people who "heard" you could jump in and make easy money on STR? It's amazing how many times people cut corners like not having beach chairs when near a beach, not having a high chair / pack in-play for family oriented homes or even just adding snacks. Not saying it's as simple as that but to your point around you managing ahead of time, strategy does matter.

 Yeah, the listings with no bookings are not operated or set up properly. However, last year at this time those places were renting out at a good clip going into 2022. So there is clearly a strong shift in demand going into 2023 relative to 2022. This could be a short blip though, and I hope it is as I don’t have bookings beyond Memorial Day. 

 That makes sense to me. Markets ar definitely slower just not a lot out there so prices are not holding strong but not dropping much so to speak. Generally obviously a few big markets got hit nationally.

On the rental side - people seem more cautious - so those not setup right I’m not surprised are hurting. On the flip side on a brand new property, I’m still seeing last minute rentals and long ones - and as reviews have been coming in bookings are jumping quick. So I feel like the market is there just selective.

Will it hold? Right now my concern there is china/fed. CHina Covid impact no supply chain has not been felt yet. Will be interesting. 

 I see very good things coming in manner of supply chain via a pivot to S. America. 

The whole run to China was an abortion of an idea in the first place, the outcome was inevitable. But S. America, it's multiple solutions in 1. 

A N/S American trade pact is simply liquid gold. We have proven out the path on how to develop such via what was done in China, now it's just a pivot to apply all lessons learned in S. America. The geo-political risks of enriching S. American nations is next to nil. It's just a no-brainer. 

So I say go riddance China, thanks' for the Beta run on it all, now it's time for Alpha in S. America. 

Anyone have any idea how far $1m USD will go in Guatemala? Far, very very far. Want farmers to stop growing coca in Columbia, hello chip-plant. Economic stability in Nicaragua, "Yo quiero Apple manufacturing". 

South America is the future of manufacturing. Mexico become "the" logistical hub of the American continent. All win.... except China, they lose, big time. Good luck funding that military expansion when western commerce has gone to S. America. 

[James Hamling]

Quote from @Nicholas L.:

@James Hamling

I know we discussed the buying vs. renting dynamics a while back.  And I think you've provided some information indicating that you expect that corporate / large institution purchases of basically all types of housing, especially SFH, are going to continue; can you remind me if that's accurate?

Here's my question.  The homeownership rate fell after the financial crisis, picked back up, and then has slowed again.  So are you saying it's going to stay static, or even fall?  It seems to me that the desire for homeownership is strong in the US... so I just have a hard time seeing it actually falling, even if housing stays expensive and we don't get back to the near 70% I believe we hit in the early 2000s.

Thoughts?

 On the Corporate Investor side of things, keep in mind I say what I do as an active insider. 

I have seen 0 slowing of Corporate Investors in the SFR segment. I am witnessing the biggest expansion, ever. And the rate of expansion is continuing. There is entities jumping into SFR that is just mind boggling. Yes, large asset managers and firms expanding into the industry but also ancillary Titans pivoting to open expansion divisions into SFR. We are talking entities entering the industry with capital and assets in the billions. Just imagine what it would be like for yourself to start in REI if you had 3 billion to play with day 1. These entities can play at a 5 cap and be massively profitable because of the sheer volume of things, it's a kind of "Walmart" principle applied to rental real estate.

As for the rate of ownership vs rental. 

There is a few sides and key factors to keep in mind to this. At Davo's they said "you will own nothing, and be HAPPY". Yes, that is happening right before our eyes. When you buy a home, do you own the home? No, in 99% of cases no, the BANK does, and your a tenant to the bank are you not? So when they roll out the 40/50yr mortgage, what does that make? 

While Gen-X and older gen's still hold a strong appreciation and interest in property ownership, TRUE ownership as in paid-off, and getting to there, as we go younger in generations we see a a significant shift in this. 

The younger generations have a perceptual concept change in there definition of "ownership". For the younger generations, they in large part conceptualize CONTROL and USE of a property, or thing, as ownership. And they have a perception of TRUE ownership as a negative in fact that along comes maintenance and responsibilities of that asset. 

There is a paradigm shift at play where younger generations view actual true ownership of real estate as a negative, a kind of lead boot. That they are "stuck" to that property, area, community. They are "stuck" with the responsibility of it. The "tech nomad" is a very real thing, we are seeing it. 

These younger generations also have a very different concept of "cost". Take a Gen-X and present a property and when they say "how much is it" they are asking for the whole $ amount, not monthly expense. A younger generation says "how much is it" and you say the whole $ amount they say "ok, but HOW MUCH IS IT?" because they want the monthly payment amount. 

The concept of paying something off, of owning it free & clear, it is very different between the generations. The younger have accepted things will never be paid off, that it's a monthly cost of "ownership". And think, we have conditioned this in our consumerism. Take your cell phones, how many actually own, free 7 clear, there cell? Very very few. And the moment they are, they are turned in for the next newest model right. This mindset we see ingrained into all items as generations go younger. 

I take advantage of this in rental units. We renovate a unit to make it most updated like a Parade Of Homes, and raise rents to 120% of market rate, and we get multiple apps in a matter of days. It's the "upgrade" factor. 

Just look around, how many own there auto free & clear? There phone? How many have 3+ C.C.'s with balances in the thousands upon thousands? The concept of "ownership" is changing from true ownership to one of usership. And cost is shifting from whole cost too monthly service payments. 

Yes, things are strongly moving to a renter nation. And look to our public school for there financial education given, it's a joke, it's a consumer manufacturing plant. 

There is those with good financial education, but the division of haves vs have-nots is ever increasing. The 80/20 rule is becoming the 90/10, if not the 95/5 rule. 

[Carlos Ptriawan]

Quote from @James Hamling:

The market specific deviations where they DO have a "correction" event in play, it's a falling knife, do you really want to reach out and grab that? CA for example, these coming years will be the bursting of the CA bubble. Where prices are 90%+ based upon perceptual value, and that perception is what's bursting, pressing value points back to fundamentals. CA is no longer "the" place to be, it just isn't. TX and FL have smashed that perception, and others like TN are on the rise. This is a new "great migration", empowered via remote working. 

I wish there was data from Zillow or MLS that I can download and give an estimation, from my anecdotal evidence it seems
in CA market there are these bottom 10% of sold listing house that was sold beyond 25% of the listing price and the price is regressed into 2018/2019 territory. For the majority of the houses though, these houses are still sold within 0 sigma deviation or just +/- 5% of the listing price.

There's a crash in CA, but in a very specific location, in a very specific house. It's quite random.

It's very clear that the buyer would like to buy a house in showroom condition.

[Chris John]

@James Hamling

You've definitely made some compelling arguments throughout this thread.  However, I've gotta quibble a little with this statement:

"When you buy a home, do you own the home? No, in 99% of cases no, the BANK does, and your a tenant to the bank are you not?"

The real owner of all the houses is the government in the form of property taxes.  Even if you don't have a mortgage on your home, you still don't actually own it and never will.  Uncle Sam sees to that.

[John Carbone]

Quote from @Olivia Grabka:

Anyone that uses correction & crash synonymously is not worth listening to.  The market corrected when interest rates shifted, there is no impending crash.  The only way you get a crash is if financing seizes up, 08 through mid 09 was a crash because financing was difficult to get.  I hope what I write here s not offensive, I do not mean to be offensive I just want to be clear. 

Home prices dropping in a single year is not a crash. The stock market was down in 2022 by 20-30 percent but it happened over the year. How many times did cnbc do a “markets in turmoil” segment and who called the stock decline a “crash”? None and nobody.  By definition this did not happen during GFC either. The stock market did crash March 2020 during Covid as it dropped in the matter of weeks, far cry from home values in 2008.

a “crash” is a sudden decline in value, even @James Hamling  agrees with this. He even said so himself at one point in this thread. 

financing is going to be difficult to obtain in 2023 with fed keeping and holding rates so high. I mean just look at mortgage transactions now, it hasn’t been this bad since the time period you are talking about. It’s 8 percent for an investment property now. 

[Steve K.]

Quote from @James Hamling:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

 @Carlos Ptriawan what you are seeing is mostly what I’m seeing. The deals are slight adjustments but for the most part prices are flat or a few % points down locally for me (nationally is closer to 8% or so). Volume is way down as expected but inventory is flat.

@John Carbone it's funny but my STR are doing very well even brand new ones in FL. I would have been happy with less than what I'm achieving (expected a downturn) but just not seeing it yet. Which is a pleasant surprise. That said I wouldn't call it a blue chips market but more like upper middle class markets. Which has been fairly stable and still a lot of cash on hand.

That said the next 6 months will be telling. So many variables with Covid in china (ukraine/russia is silent in news these days funny enough) and other global levers that could hurt us. I’m expecting inflation to slow about March/April as housing will be at their peaks. I’m curious what happens when the markets see that in the inflation numbers. 

I’m personally not seeing it yet either, but I’m seeing it in the competition by looking at calendars.  

real competition though? Or people who "heard" you could jump in and make easy money on STR? It's amazing how many times people cut corners like not having beach chairs when near a beach, not having a high chair / pack in-play for family oriented homes or even just adding snacks. Not saying it's as simple as that but to your point around you managing ahead of time, strategy does matter.

 Yeah, the listings with no bookings are not operated or set up properly. However, last year at this time those places were renting out at a good clip going into 2022. So there is clearly a strong shift in demand going into 2023 relative to 2022. This could be a short blip though, and I hope it is as I don’t have bookings beyond Memorial Day. 

 That makes sense to me. Markets ar definitely slower just not a lot out there so prices are not holding strong but not dropping much so to speak. Generally obviously a few big markets got hit nationally.

On the rental side - people seem more cautious - so those not setup right I’m not surprised are hurting. On the flip side on a brand new property, I’m still seeing last minute rentals and long ones - and as reviews have been coming in bookings are jumping quick. So I feel like the market is there just selective.

Will it hold? Right now my concern there is china/fed. CHina Covid impact no supply chain has not been felt yet. Will be interesting. 

 I see very good things coming in manner of supply chain via a pivot to S. America. 

The whole run to China was an abortion of an idea in the first place, the outcome was inevitable. But S. America, it's multiple solutions in 1. 

A N/S American trade pact is simply liquid gold. We have proven out the path on how to develop such via what was done in China, now it's just a pivot to apply all lessons learned in S. America. The geo-political risks of enriching S. American nations is next to nil. It's just a no-brainer. 

So I say go riddance China, thanks' for the Beta run on it all, now it's time for Alpha in S. America. 

Anyone have any idea how far $1m USD will go in Guatemala? Far, very very far. Want farmers to stop growing coca in Columbia, hello chip-plant. Economic stability in Nicaragua, "Yo quiero Apple manufacturing". 

South America is the future of manufacturing. Mexico become "the" logistical hub of the American continent. All win.... except China, they lose, big time. Good luck funding that military expansion when western commerce has gone to S America

Not to be a stickler here, but 2 of the 3 countries that you mentioned when talking about how manufacturing will move to South America (Guatemala and Nicaragua) are in Central America, not South America. Columbia is indeed in South America but not the other two. I think it would be hard for either Central or South America to replace China as the worlds manufacturer. There are many factors working against this: currently there’s a tiny bit of tech in Costa Rica and some textile production in other Central and South American countries but these are mostly agricultural producers only currently. Political instability, geography, net out-migration to North America, lack of skilled workforce, lack of natural mineral resources, undeveloped ports, transportation, energy/electrical and factory infrastructure etc. all work against Central or South America replacing China as a manufacturing powerhouse. Vietnam, Mexico, India, Singapore, Malaysia etc. are all much better positioned to compete with China IMO. 

[Nicholas L.]

@Chris John

and don't forget HOA fees. One of my rentals is a condo that I 'own' and the biggest monthly payments are mortgage, HOA fees, then taxes, in that order. =)

[Trevor Naumann]

This is always one of the age old questions. As far as i can tell its market specific. For example where i am at in Upstate NY we continue to see prices increase. DOM is also increasing showing signs of slowing down but when you consider how rediculous the appreciation has been the past few years its hard to imagine a crash as opposed to a correction. 

[Jay Thomas]

For those looking to get into the housing market, it's important to remember that "impossible" is never a word you should accept as an answer. With the right amount of research and dedication, anything can be achieved! It may not be easy, but with a little bit of effort and determination, you can make your real estate dreams come true. So don't let anyone tell you otherwise - if you put in the work, you can make it happen. Don't be afraid to try something new and take risks – sometimes they're what will lead you to success! You never know unless you give it a shot.

[Greg R.]

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

so update from me, there's this desktop automation software.
So here's what this software telling me.

Peak is at June 2022
Market is reaching -3% from Dec 2022 to Dec 2023
Bottom is Q4 2023, and the price going to reach the range of June 2022 somewhere around 2026.
This is for our local market though, meaning in 2023 is a quite good time to buy at the bottom before we sell it in 2026/2027.

This is market specific, but STR occupancy in Gatlinburg is way down this January, February, and March compared to the previous years. I anticipated this and had my pricing well enough to lock in these bookings back in the fall. More than half of my competitors have virtually 0 bookings for the next 3 months. Gatlinburg is the blue chip STR market. I don’t think it’s saturation either, 2022 was a phenomenal year for almost everyone. I think we have a tapped out consumer after Christmas, and people are worried about losing their jobs. This may be the canary in the coal mine moment. 

I'm seeing this as well with my STRs, interest/ occupancy is way down.