All Forum Posts by: John Matthew Johnston

@John Matthew Johnston You lost me at Grant Cardone! :) In all seriousness... I see you're a BRRRR guy...how have your initial lendors when securing properties in your area been recently? What total ARV are you finding when refinacing?

Quote from @John Matthew Johnston:

I recently watched a video of Grant Cardone predicting that when all the baby boomers die off there will be a large surplus of houses which will drive down prices across the board. You hear a lot about shortage of houses but don’t really see much predicting excess housing. What do you guys think?

https://fb.watch/gOI2Ev7At9/

 There are already many markets with declining populations.  In general these markets have long term RE appreciation below the inflation rate (so price has declined in inflation adjusted dollars). The Midwest has many such cities (some of which have done ok over the last 5 years). Look at neighborhoodScout at various cities and you can see that cities like Detroit and Cleveland are cheaper today than the were in the year 2000 in inflation adjusted dollars.

At BPCon the closing speaker indicated only 2 states had natural (not including immigrants) population growth (Utah and North Dakota).  I have not attempted to fact check her statement but I am assuming it is factual.  This implies that 48 states do not have natural population growth.  This implies before immigration, there should be no need for more housing. 

The US does not have a housing shortage.  Certain areas in the US have a housing shortage.  

The extent that boomers dying off will dictate a shortage of housing is largely dependent on the number of immigrants admitted to the US.  If no immigrants are admitted to the US (not going to happen) we would have an over abundance of housing as the boomers die off (based on 48 states not having natural increasing population.  If an abundance of immigrants are admitted to the US, there will continue to be many cities with housing shortage.

My market has a long history of long term appreciation far in excess of inflation.  I expect for my market, this will continue as the baby boomers die off (regardless of the number of immigrants admitted to the US).

Quote from @Dan H.:

Quote from @John Matthew Johnston:

I recently watched a video of Grant Cardone predicting that when all the baby boomers die off there will be a large surplus of houses which will drive down prices across the board. You hear a lot about shortage of houses but don’t really see much predicting excess housing. What do you guys think?

https://fb.watch/gOI2Ev7At9/

 There are already many markets with declining populations.  In general these markets have long term RE appreciation below the inflation rate (so price has declined in inflation adjusted dollars). The Midwest has many such cities (some of which have done ok over the last 5 years). Look at neighborhoodScout at various cities and you can see that cities like Detroit and Cleveland are cheaper today than the were in the year 2000 in inflation adjusted dollars.

At BPCon the closing speaker indicated only 2 states had natural (not including immigrants) population growth (Utah and North Dakota).  I have not attempted to fact check her statement but I am assuming it is factual.  This implies that 48 states do not have natural population growth.  This implies before immigration, there should be no need for more housing. 

The US does not have a housing shortage.  Certain areas in the US have a housing shortage.  

The extent that boomers dying off will dictate a shortage of housing is largely dependent on the number of immigrants admitted to the US.  If no immigrants are admitted to the US (not going to happen) we would have an over abundance of housing as the boomers die off (based on 48 states not having natural increasing population.  If an abundance of immigrants are admitted to the US, there will continue to be many cities with housing shortage.

My market has a long history of long term appreciation far in excess of inflation.  I expect for my market, this will continue as the baby boomers die off (regardless of the number of immigrants admitted to the US).

This is absolutely the best answer. Immigration policy will likely loosen up as the population plateaus. If it doesn’t, you’ll see a slowly declining national population. Already declining areas like mine will experience a steeper yearly decline and growing areas like California will slow or possibly plateau.  Though I do believe this all would be reflected in real estate values.

But values won’t crater and I think we are looking at 4% inflation for years to come, meaning even in areas like mine that generally don’t keep up with inflation, even if they appreciate at half the inflation rate, leveraging with 25% down means your 2% appreciation will leverage to 8% appreciation on your invested cash.

This is a VERY slow moving fender bender, not train wreck. Nothing to get too anxious about. 

@John Matthew Johnston a lot of factors will come into play. The largest being immigration. If you take it as literally ever last Brady boomer that will be another 50 + years. barring a large change in birth rates, immigration policy, etc then yeah there will come a time but even then most housing will hold some value and houses in nice areas will be very valuable. There are countries like japan with declining population and real estate is still a solid investment.

Boomers are a large generation....who had a lot of kids...who had a lot of grandkids....my guess is that some of that supply will be taken up by those following generation. 

Seriously though, on an annualized basis the number of homes coming to market will be of little consequence. Many will move into apts or retirement homes, further spreading the impact out. So I doubt the 'Silver Tsunami' will be a large market impact in most markets.

Can you qualify for your exit plan the "commercial portfolio loan"?

Your payment is principle AND interest amortized over ten years. HELOCS are normally 15 year loans, some have an interest only low starter payment. Your rate is tied to the prime rate plus a margin, sounds like 2.75 or 3 depending on when you last adjusted. Worst case your rate can soar to 18 or 20 percent whatever the note says or $1904- 2100 a month. If you have the note you can email it to me and I can tell you in English not Lawyeri-sh what it  says.

Your payment is based on a ten year amortization at that rate. HELOC s often have a cap of 18-20% get that note out and read it as is probably tied to prime rate which is climbing