All Forum Posts by: Mike Anderson

I'd rather leave money on the table than invest in states with deep blue political ideologies. Just look at the over reaction to covid and other things, frankly they are way to unstable, and way to easy to over react to things. I'm a simple guy, I want less drama. You aren't even considering the taxes, and capital gains increases in these areas too. When does that stop.

I mean i think you answered your own question. Rent control has worked exactly no where. Desperate people will eat it up though thinking it will help. Candidly your whole unintended consequences that actually negatively impact the people it was supposed to help is just about every single idea or policy that has come out of this administrator for 3 and a half years. We've seen this show time and time again, we know the ending.

Quote from @Erica Calella:

What do you think is the reason for that? Is there more supply in the area? Or are vacationers trending elsewhere for the holiday weekend?

 It's all of the above. There is more supply that will push down ADR, vacationers are trending elsewhere now that air travel has opened up. The economy is tough right now with inflation for basic needs going higher. Layoffs have started for full time jobs and people want to save money instead of going on vacation, other people can't afford it because they have run up their credit cards because their salaries hasn't matched the rise of inflation for basic goods.

I also don't think this will improve next year. I see a slow slog downward until we hit the balance point mostly because the rates will remain elevated 6%+ for another year at least.

Quote from @Kyle Smith:

Do you guys think the lower occupancies and rates we are experiencing this year is due to economy or it’s the new normal?

I personally think its both. I don't think either of these is 0% the question is how much of the overall pie are both of these issues. Ultimately i think the next 12 to 18 months is going to be tough in a lot of ways and the economy will be shaping what the "new normal" is. Everything is cyclical.

Quote from @Matt Mertz:

I'm pessimistic on the economy.  I noticed a big downturn in the job market in my industry (software development) which is very unusual.  And of course we're all suffering with inflation.

I'm not in Software Development but more on the Information Security and Cloud Operations side of things... I'm seeing the same, and my recruiter friends are telling me the jobs that they are trying to fill companies are just interviewing and keeping a pipeline and not actually making an offer when they find the right person. The other piece is companies are trying to bring salaries down to pre covid levels and job searchers are getting upset about that. We are in interesting times for sure.

Quote from @V.G Jason:

My agent refutes all of our fear mongering. She states there's still multiple offers and its a sellers market. That my thinking is still wrong and when I am ready to change my mind, she is here. She also believes that it still hasn't peaked. 

Even though, I know that's very well not true at all. Can you imagine the average Joe peeking into the markets and hearing this? This just creates FOMO. 

 How does she refute the factual data that we can all look at and consider? Whenever i've pressed with actual data they look at me confused then spin the conversation to "inventory is low" which is actually rising too. It's just crazy. 

I grew up in Springfield so those areas are still nicer than I grew up with!!! Glad I got out!

Spent a considerable amount of time in Fitchburg when my girlfriend back in the day went to Fitchburg state... That area must have come a really really long way since i was there for it be considered a good investment now. 

Quote from @Jay Hinrichs:

that condo collapse disaster is affecting a lot of the older units no doubt.

Thats an interesting topic too especially for Florida. It's not even older units its a lot of the units for one reason or another. You have certain complexes where the HOA fee's monthly are 2k, 2500, some 1500. Huge jumps from just a few years ago. So then the question becomes if those stay and or go higher, condos will drop in price dramatically, but will anyone buy with those rates? Sure in key area like Miami and other areas but there are a lot of condos like this. So then what? If people start walking away from the condo and just stop paying HOA's could go insolvent.

Quote from @Steve K.:

Quote from @Mike Anderson:

Quote from @Steve K.:

Quote from @Jay Fradd:

Quote from @Steve K.:

These are a few examples that may indicate a trend, but what are the sales metrics looking like for the area? How many months of inventory? What is the list to sale price ratio? Average days on market? 

Below are graphs I put together from stats in our local MLS. The most disturbing is the absorption rate in my opinion. It has went from 5 months to 13 month absorption rate in one year. A lot of inventory stacking up here in the Smokies.

Looks like you have a buyer’s market then indeed. 

Not yet... Not even close. Needs much more a haircut first. Sellers are still nuts.

Just technically speaking... around 6 months inventory is considered a balanced market, less than 6 months is a sellers market and more than 6 is a buyers market. 

I understand the basic metric i just question its value. How can one have a conversation about inventory being wherever (supply side) but never mention the demand side? I was just in northern Florida looking at condos last week, went to a few open houses all the realtors gave me the stock answer about inventory being low... Then when pressed turns out they haven't sold a condo this year and the inventory is rapidly on the rise (which i already knew).. However I should buy soon because its a sellers market, regardless of all the price drops yea ok.. There are quite literally almost no buyers right now, so with that being say why does the months of inventory matter.