All Forum Posts by: Michael Wooldridge

Which would actually suggest Tx/AZ aren’t the best to look at it for trending….

Semi-kidding. But time will tell on a lot of things. Fortunately I’m not looking to cash out any earlier than 27 years (and not even sure i will then). Cash flow approach works fine for now. I somehow figure I’ll have appreciation one way or another after 30 years… 

 

 The only other option I can think of and maybe somebody in the space has advice (commercial is not something I’m super familiar) is if the town is that small not growing and/or shrinking. It’s possible if you came at it with a truly strong agent that can point out the the possibility with rates rising, commercial slammed, retail not growing and consumer spending down, that you might be the only likely buyers. 

If he doesn’t want to be a landlord it might work. Not to mention if the town is as small as you say he might be hurt even to find a replacement tennant. 

 I hate to say this but it sounds like his logic has to do with the fact that he knows you don’t have another option in town. Have you researched hard to see if there are any other options to move to? 

Because if there really isn’t the alternative isn’t a great option. Which is to see if you can tempt him with some type of premium (i.e. 10% over appraisal) which means you need cash on hand. Not ideal. Or a true relocation of business. 

Sorry to hear this is happening to you. I’d look hard at the market to see if there are really no other options sounds like he is trying to force the issue. 

So I agree on all of that. I’m in tech they’ll be more facebooks for sure. I know of more coming just not super bad yet. I think CA will 100% be outsized impact. AZ also and likely Washington all related to tech/cost values etc..

Texas looks to be in the middle but too early to tell. 

I still come back to Florida. If you are talking about median national valuation changes (short of market destruction, and I mean US entire economy, which is possible although I don’t think likely nor will I plan on it) FL will need to play a role from a volume perspective. I’m not convinced that entire market will fall out same way as Cali. But if it does I’d get on board with 20% being possible quickly 


 

 Well what would be significant lay offs? Right now we have low unemployment 3.7%. Even if we go up to the target level of 5-5.5%. That's still relatively low unemployment and won't be catastrophic. BTW we will see more lay offs between now and end of year, I know a dozen or so F250 planning already. But they aren't massive like they have been in the past. Far more measured. 

Downside, I don't see how that works if the rates are that much higher. Downsizing won't really be an option which is one of points we've pointed to.

Rents will continue to go up so it's a far less appealing option to. Hell where rents are at lately in my neck of the woods I could put nominal money in on just a standard 2 bed condo and end up cash flow positive immediately. I'm sure we will see some movement here but it's a far less attractive option than in prior years. Unless we think rents are going down? 

I think this is the point though. Nobody disagrees at looking through a lens on all the markets nationally. But to have a nationwide 20%, or more because some have said 20% is the minimum, adjustment, we would have to start seeing all markets move in the same direction or markets like CA, AZ etc.. hitting 2008 levels where they saw 40%. The reason most of us are saying 15% on the national level is because of some of those markets that did not see the insane growth.

One thing to me that is going to have a big impact on the national level is FL. they are slowing but overall not what CA/AZ are doing. They have a high population, obviously higher jumps in valuations, but they are still low relative from the places people are migrating from in terms of values. Also still people moving from Northeast to FL. 

IF FL doesn't tank like CA and see's a more modest 10-15% downtrend. then I don't see median being the disaster. CA, AZ, SLC, Washington I expect. Dallas will be interesting to see where they fall because theres tech money there but not like Austin. But I really see FL as the big question on the median level trending nationally. 

I wouldn't look to rent a unit to a friend, frankly the only time I could ever see it come up is if one of them went through a divorce. In which case I wouldn't hesitate to with some of them. 

But either way it's just like any other situation you have to be smart in who you partner or rent with. 

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Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m. 
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak. 

 I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof. 

At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory. 

Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

 I think personally as it relates to Texas with sky high property tax's and now rates up not shocking to see high end homes with price reductions. 

 Maybe but NYC has literally not budgeted nor has much of the Northeast so far. And we've had both and higher. Granted that is to date. 

 NYC is a completely different market and isn't at all analogous to an area like DFW. Big difference between a condo in lower Manhattan and a 1.5 acre 5,500 sqft estate in Heath TX. For one, there is virtually no new properties available in NYC. By and far, the same amount of inventory continues to circulate amongst everyone in the city. In TX there's plenty of development and even more land. 

 I agree NYC is different from certain elements but they are like the Bay Area in terms of house prices. So it's definitely comparable to some aspects. 

Also the rest of the areas like NJ, PA are still moving along. Sitting a few days longer, lot more cash deals but still plenty of movement. For now anyway, I completely expect this to turn and drop 10% or so in the next year.

As to the development piece in TX, judging by starts/permits everywhere I expect that's not really happening now or far more selectively. And that's sort of the core point builders have just pulled back so hard and so fast. Inventory is low while I see the drop I just don't see that push. Hell we all know if people would adjust zoning and a few other items we could absolutely solve a lot of these issues - especially in the Northeast - but there isn't a desire to do that and sort of create a push on the price. 

Anyway we all just guessing. And I absolutely see this shift in the market 15% is sort of what I'm planning for. But crash, foreclosures, people upside down in mass - don't' see it. And hey if it does happen the properties I buy now will be sat on anyway since they are long term purchases and the new properties I buy will just be cheaper which helps in growing my portfolio in a different way. 

Quote from @Jay Hinrichs:

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Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m. 
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak. 

 I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof. 

At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory. 

Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

 I think personally as it relates to Texas with sky high property tax's and now rates up not shocking to see high end homes with price reductions. 

 Maybe but NYC has literally not budgeted nor has much of the Northeast so far. And we've had both and higher. Granted that is to date. 

Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m. 
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak. 

 I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof. 

At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory. 

Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

 So this is a good example. you mentioned they are worth a little over a million. They listed $1.4 million at the start of August. Even with the inflated prices was that price higher than the area i.e they were really trending at 1.15 or so? 

Without any real details to that home the comps etc it's impossible to tell. But that just looks like somebody that tried to continue with the inflated price routine as things shifted. It's sort of what happened with my house. They were far too high in July / August. And then by the time they changed people paused in September. I hit them with under 5% and with the rates shifting they took it. Had they had the list price in September there in july they would have sold. They got greedy.

I have no comps and no comparables just going off the little you said.