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All Forum Posts by: James Hamling

James Hamling has started 14 posts and replied 4378 times.

Post: Renting to illegal immigrants , rent control

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Dan H.:
Quote from @James Hamling:
Quote from @Becca F.:
Quote from @Dan H.:
Quote from @Bill B.:

Ps. California has a “2+1 rule” meaning 2 adults per bedroom plus 1 extra adult. I don’t know if they’re breaking the law or you are. But I’m sure you’d be held responsible if something happened because of illegal overcrowding in a property you owned. 

 You are interpreting the rule incorrectly.  That is the lowest max occupancy that seems commonly enforceable in the state even though finding a law that specifies this is a challenge.

However, if your lease does not state a max occupancy (which cannot be lower than (2 * BR + 1) the tenant can place 5 in a single BR.

@Frederick William does you lease have a maximum allowed occupancy?  It could provide means for a lease termination. It may sound mean, but 2 years ago I let a good tenant go because of a growing family.  They were about to go 2 over what my lease allows (and I gave them a warning when they went 1 over that I would not be allowing 2 over).   7 in a 2 BR was too many people.  5 in a 1 br is also 2 over my max occupancy.  You may have an issue enforcing this even if you have a limit in your lease because they have had 5 for quite a while.

I am assuming your unit is a MF because single family home is exempt from rent control (costa Hawkins).

Other options to break AB1482 (not sure if you have stricter local ordinance) are 1) move in a close family member.  Ab1482 is not clear on duration but locally (San Diego) is interpreting it to be for a year.  2) renovation extensive enough that tenant cannot reside in unit through the effort.  Abatement works.   Take down textured ceiling may suffice if it has asbestos.  City of San Diego explicitly states flooring replacement without abatement and painting does not suffice.  Find out what your jurisdiction dictates as requiring tenant vacating but I am fairly certain pulling down asbestos texture is will suffice.

If you do not desire these, then abide by the rent control increase.  In San Diego it is 8.6% for the current period.  Seeing it is based on local inflation rate, your max increase will likely be slightly different.  

Good luck


 This is good to know about the maximum allowed occupancy stated in the leases. 

On the rental increase, you mentioned for San Diego is 8.6%. Is that for multi-family? 

What I'm understanding is that there are two definitions of rent control:

- Strict "local" rent control: can't raise rent more than 1 to 3% (whatever the local number) is on multi-family if local law is stricter than California law

- "California rent control": can't raise rent more than 5% + CPI (maximum of 10%) including on single family. This is what local investors told me about SFH rental. I could raise the rent 8.8% (see chart in link below). I can't raise the rent 20% (not that I would do that) on existing tenants.

I found this chart which calculates maximum rental increase in different counties (I don't know anything about this site and their services but I thought the calculator was useful). 

https://www.fastevictionservice.com/cpi-rent-increase-calcul...

In the chart it says 8.9% for LA county from August 1, 2024 to July 31, 2025. I don't know if LA has a stricter local rental law so OP should ask an attorney or the LAHD. 


I'd be curious to know, does CA or San Diego or really anyone have a chart telling McDonalds the maximum they can increase the price of a quarter pounder and fries? 

Or maybe instructing Valvoline on the maximum they can increase price of an oil change? 

Or how about a mandate imposing a cap on what Costco can increase price of groceries..... 

Why is it an accepted notion in USA that government get's to instruct Landlords for what there pricing is to be yet virtually everything else in life, the food you eat, the things you drink, the fuel you need to get to and from work, that can just run buck-wild because "it's the market"....... 

Why is rental real estate considered a special carve-out from all other commerce and economics? 

Why do so many people buy into the BS and allow such economic lies to persist. 

Free market economics applies 1,000% to rental housing exactly as it does to hot dogs. If the vendor over-prices for market price acceptance they won't sell, and will be pressured by the market to reduce pricing or increase offering. 

Manipulating the market will ALWAYS create problems. Service and product declines, supply constricts, it's a manufactured problem. It's solving a "problem" by generating a bigger more pervasive systemic problem. 

People need to stop choking down the BS and lies like good little quiet sheep and SPEAK UP and OUT on the lies of it all. 


 I think Most LL agree with your sentiment and as a LL I definitely agree but I will attempt to answer you question. 

There are many more tenants than LL.  In addition many cities have severe housing shortages.  San Diego has had property appreciation of near 6% annually since the year 2000.  Remember this period includes the GFC.  If you eliminated the GFC, the appreciation would be much greater.  Wages have not increased anywhere near that rate.  If rents increased at similar rate the already large homeless problem would be larger.  So politicians 1) pander to the masses 2) can state that rent control reduces homeless.  

As a LL here are some of my issues: 1) rent control only works if tenants have lifetime rights to the unit.  That is crazy. 2) when rent control first goes into effect, it is applied to existing leases.  This is in effect having government universally changing contracts between 2 parties that was entered prior to any rent control with a lease end date?   What if I planned to have a friend move in at the end of the lease 3) mostly it hurt “soft” LL that had let their rents get far below market rent.  These generous LL must continue to accept reduced rent, but in addition when they go to sell they will not get market offers due to the lower income/rent that is enforced by the rent control. 

Note, I think it is rare for market rent to increase more than STR state wide maximum rent increase. However, if your rent is below market rent, this max increase may not catch up at all with market rent. In addition, there are jurisdictions with far stricter rent control regulations than the state wide regulations.

Rent control benefits only a few good tenants.  It greatly benefits poor tenants as it is difficult to get rid of poor tenants.  Rent control can lead to blight.  Our policy is we only do upgrades with tenant in place necessary to not cause excess damage.  I have a tile floor in a unit that the tiles are popping up through no fault of the tenant.   I would replace the floor if I could increase the rent to recoup the expense.  This unit has been getting max allowed rent increase yearly.  Our policy is no new floors, interior painting, vanity replacement, etc if the rents cannot be raised to recoup the expense.  

The tenant tolerates the flooring issue because they recognize their rent is below market rent.

I personally believe rent control is mostly passed by politicians to appease their tenant constituents and not because it is good or fair. 

Good luck


I come at this not from a LL point of view but from the "Nerdy Nerderson of Finance-Econ with minor in Sociology". 

The first lie, that rent control is a NEED item. 

Stop and think it through, how is it a need? This ties right in with explaining the desire for allow illegal immigrants, because they both come from the exact same motive. 

Rent control is a mechanism of POVERTY. To continue, encourage and entrench poverty. 

A certain political club telegraphs there desire in this, it just seems nobody listens. 

They say these impoverished and dependant persons are NEEDED, so that then "they" have dishwashers, janitors, the lowest crappiest rung of labor employment filled at the absolute lowest prices imaginable. 

Notice they never explain why a person would choose to be a dishwasher for life, or stay impoverished forever, nor speak about those peoples quality of living at the lowest rung of life possible. 

The entire system is literally designed, by intent, as a conveyor belt of modern age indentured servitude. 

To keep a person impoverished where they can't afford to exist in the prevailing market system, so they get via other peoples money (tax payors) off-set's. Supplements.

Notice how all of every program never has any design to elevate and improve a person, to grow one self beyond the need for such. No, it is constructed to keep ones existence at that lowest tier of the pyramid. 

And it's done via middle Americas money. 

It is a modern slavery system, it is.  

And the moment anyone threatens this system they cry out "but who will wash our clothes, mow our lawns, cook our food...." sound familiar. 

They never speak 1 word about what about the people, there kids, there family, the community living in persistent poverty. No, because they LIKE poverty, poverty is great for them, it keeps a healthy pipeline of cheap labor. 

Cheap via taxing middle America to pay the difference to keep them close by and in geographic region for those seeking to use, extort, and profit off them. 

It's not like climate change where there was some debate to be had between the sides, there is 100% consensus of the economic and sociological FACTS of what these actions do, as well as countless years, decades and generations of case studies to look to. These systems are factually known to create generational poverty, dependency and with that crime, disparity and so on. 

Am I surprised that the ones at the forefront arguing for such poverty-mechanisms are the same ones who fought to retain a Monarchy in America in league with plutocrats..... Lol, that's like saying am I surprised when a cat try's to eat a mouse. 

There weapon is GUILT. 

Because this entire system requires Other Peoples Money, it requires middle America to flip the bill for it all and to keep deaf, dumb and blind to it's reality. 

They achieve this via GUILT. Selling a false narrative of GUILT. 

Every school of economics on earth shines a spotlight on how every law and principle of economics is clear that these actions do NOT produce anything good and they are interrupters to the very working of free market economics. 

The very design of this economic machine is one in which government is to get involved ONLY and if there is an event that occurs that breaks how free market economics works. All of these instances are finite in there duration. 

For example the CA wild fires. 

This would be an instance for stepping in a creating a short-term "bridge", not to replace but to BRIDGE the gaps that were created from the sudden loss of parts and pieces from the economic engine. 

Special financial assistance and loans to rebuild, survive rebuilding phase, short-term housing supplements and units, things like this. 

Instead what we have is the BS lies that eternal supplements to KEEP people impoverished is somehow "good" for anyone except the highest tier exploiting such persons and situations for their gain at expense of literally everyone else at every other level of the pyramid...... 

All of these things are not needed, there desired by an elite class to protect and retain their elite status. It is. Because remove of such the existing middle class would get far stronger and would grow in size significantly, and thus in it's power and influence. And the #1 threat to elite is a strong middle class. Because reality is middle does not need the elite. 

As they said back when the notion of "We The People" was presented and the masses voting.... They said the people are not capable of thinking for themselves and require the elite to do the thinking for all of them. 

It has taken some generations but the "Loyalists" have usurped the "rebels"...... 

It's time for all of us to be a lot more Samuel Adams....... 

Post: Where to invest $1.4m to maximize rent? (Paying cash)

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Shane Finnegan:

@Michael Fraulo Well homes always appreciate in the long-term. I would be holding these properties for 10-20 years.


Bad idea Shane. 

When investing in class-A new-built we NEVER hold longer then 7yrs. 

Our sweet-spot is 5-7yrs. 

When deploy correctly, we are in path-of-progress and with that we get significantly outsized appreciation rate in those early years as inventory rapidly declines AND the area is still red-hot demand. 

Also, the first 5-7yrs we get to enjoy that amazing dream land known as 0 or near 0 cap-x and maintenance. Yr7 is when cap-x reaping starts hitting and stealing our returns. 

So we work highly strategic to liquidate at retail between yr5-7, passing the cap-x hot potato, getting the monetization of nearly new, and tapping the tail of the red-hot demand before it wains because progress moved on. 

Via 1031 we turn 1 into 2, rinse and repeat. 

This is how the "average" investor can start with say just 4, and in just a few cycles compound 4 into 32..... 

Do that math for returns, yeah, it seems mythical but I assure you it IS real-world and I have a number of clients actively doing now today and for past several years. it's the answer to how we turn $1m into $7m with least risk exposure and highest certainty. 

What is often way WAY understated in the investment real estate industry is IT'S ONE BIG MATH GAME. 

Math trumps ALL. And those with greatest supremacy of the math, win biggest and most consistently. 

And I didn't even touch on the joy of depreciation on 7yr vs 27.5yr schedule and so on.... 

Post: Where to invest $1.4m to maximize rent? (Paying cash)

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Shane Finnegan:

In a couple months, I’ll be investing $1.3m - $1.4m into real estate, and I’ll be looking to pay cash and not have any loans. My goal is to be profiting $6,000/mo or more (if possible) after expenses, including property management. I’m single and I want to be able to quit my job and earn enough from my rental income to focus on starting a business. I don’t want to take out any loans because I don’t want the risk or reduction in rental income.

Where can I earn $6,000/mo in profit by investing $1.3m - $1.4m in real estate? I’m just starting my search, and I’m currently looking at $300k - $350k new construction single family homes in Chattanooga and the suburbs around Nashville. The rents there seem to be high relative to those purchase prices. Where else should I be looking?


I’m not particularly interested in buying old, run-down properties. New and recent construction appeals to me because I won’t have to replace the roof or HVAC for 10+ years.


Yeah Shane, your expectation is so realistic I think your biggest problem is going to be sorting through all the real viable potentials. 

In my primary A-class market, you hit the nail on the head. 

We have new built properties, $325k-$375k, A class area, properties, tenants.   Getting rents in the $2,500 - $3k range. 

Yeah..... at least for myself this is a super easy one. Tack on exceptional market appreciation, uber strong economics etc.. 

Chattanooga is an interesting market too only thing that rubs me wrong is the median incomes, there really lagging. And as I have toured the market and asked questions of who's buying/renting things I was told out-state persons way too much for comfort. I like to see a market standing strong on it's own 2 leg's not propped up by out-state $ because eventually it has to stand on it's own. 

I love TN and there is a lot of great stuff going on there but I would say it's priced UP on future growth vs current market fundamentals. 

Same thing happened in TX and now we are seeing the inevitable pull back correction.  

Post: Renting to illegal immigrants , rent control

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Becca F.:
Quote from @Dan H.:
Quote from @Bill B.:

Ps. California has a “2+1 rule” meaning 2 adults per bedroom plus 1 extra adult. I don’t know if they’re breaking the law or you are. But I’m sure you’d be held responsible if something happened because of illegal overcrowding in a property you owned. 

 You are interpreting the rule incorrectly.  That is the lowest max occupancy that seems commonly enforceable in the state even though finding a law that specifies this is a challenge.

However, if your lease does not state a max occupancy (which cannot be lower than (2 * BR + 1) the tenant can place 5 in a single BR.

@Frederick William does you lease have a maximum allowed occupancy?  It could provide means for a lease termination. It may sound mean, but 2 years ago I let a good tenant go because of a growing family.  They were about to go 2 over what my lease allows (and I gave them a warning when they went 1 over that I would not be allowing 2 over).   7 in a 2 BR was too many people.  5 in a 1 br is also 2 over my max occupancy.  You may have an issue enforcing this even if you have a limit in your lease because they have had 5 for quite a while.

I am assuming your unit is a MF because single family home is exempt from rent control (costa Hawkins).

Other options to break AB1482 (not sure if you have stricter local ordinance) are 1) move in a close family member.  Ab1482 is not clear on duration but locally (San Diego) is interpreting it to be for a year.  2) renovation extensive enough that tenant cannot reside in unit through the effort.  Abatement works.   Take down textured ceiling may suffice if it has asbestos.  City of San Diego explicitly states flooring replacement without abatement and painting does not suffice.  Find out what your jurisdiction dictates as requiring tenant vacating but I am fairly certain pulling down asbestos texture is will suffice.

If you do not desire these, then abide by the rent control increase.  In San Diego it is 8.6% for the current period.  Seeing it is based on local inflation rate, your max increase will likely be slightly different.  

Good luck


 This is good to know about the maximum allowed occupancy stated in the leases. 

On the rental increase, you mentioned for San Diego is 8.6%. Is that for multi-family? 

What I'm understanding is that there are two definitions of rent control:

- Strict "local" rent control: can't raise rent more than 1 to 3% (whatever the local number) is on multi-family if local law is stricter than California law

- "California rent control": can't raise rent more than 5% + CPI (maximum of 10%) including on single family. This is what local investors told me about SFH rental. I could raise the rent 8.8% (see chart in link below). I can't raise the rent 20% (not that I would do that) on existing tenants.

I found this chart which calculates maximum rental increase in different counties (I don't know anything about this site and their services but I thought the calculator was useful). 

https://www.fastevictionservice.com/cpi-rent-increase-calcul...

In the chart it says 8.9% for LA county from August 1, 2024 to July 31, 2025. I don't know if LA has a stricter local rental law so OP should ask an attorney or the LAHD. 


I'd be curious to know, does CA or San Diego or really anyone have a chart telling McDonalds the maximum they can increase the price of a quarter pounder and fries? 

Or maybe instructing Valvoline on the maximum they can increase price of an oil change? 

Or how about a mandate imposing a cap on what Costco can increase price of groceries..... 

Why is it an accepted notion in USA that government get's to instruct Landlords for what there pricing is to be yet virtually everything else in life, the food you eat, the things you drink, the fuel you need to get to and from work, that can just run buck-wild because "it's the market"....... 

Why is rental real estate considered a special carve-out from all other commerce and economics? 

Why do so many people buy into the BS and allow such economic lies to persist. 

Free market economics applies 1,000% to rental housing exactly as it does to hot dogs. If the vendor over-prices for market price acceptance they won't sell, and will be pressured by the market to reduce pricing or increase offering. 

Manipulating the market will ALWAYS create problems. Service and product declines, supply constricts, it's a manufactured problem. It's solving a "problem" by generating a bigger more pervasive systemic problem. 

People need to stop choking down the BS and lies like good little quiet sheep and SPEAK UP and OUT on the lies of it all. 

Post: NAR reports huge drop in pending home sales - Does It Matter?

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Ken M.:
Quote from @Henry Lazerow:

I do wonder what would happen to housing if Gavin Newsom won presidency 2028, could he implement similar laws California housing has for rest of US or do state laws override federal for things like rent control, etc.? I know IL state has laws against rent control which has prevented Chicago from implementing it. 

State overrides federal on states rights issues like housing. Congress would have to approve and that's not at all likely.

Not exactly.... It's kind of a bit grey. 

In some ways States trump Federal, in others Federal trumps State. 

For example take discrimination in housing, Federal trumps states. A state could reenact segregation and it would not be legal. 

A lunatic commy at white house with a gaggle of lunatic commys on capitol hill could, in theory, see a whole assortment of interesting interpretations of constitutional law and do things like decide housing is a human RIGHT, and then enforce codes to such. 

Or decide various rents are "price gouging" and issue out mandates for what acceptable rents are per markets. 

Things could get crazy if crazy people have the power and will to do crazy stuff. 

Keep in mind we have now seen drag-queen story time for grammar school...... Not even Twilight Zone got as weird as reality has gotten in recent years. 

Post: This Market Is Full Of Motivated Sellers

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Doug Pretorius:

Personally I'm neither for nor against but if it happens and Canadians get full citizenship I'm moving to one of the Carolinas the next day. 47 Canadian winters is enough for me!


Yeah I don't know how you all do it. 

On those horrific January days where it's a bone chilling -25 with windchills too -40 or worse, our only solace in MN remembering there's a whole country north of use getting it even worse, lol. 

I honestly think Canada dissolving and joining the USA union would be the most brilliant move for the provinces and people, it would usher in a decade of ungodly growth, power, success and wealth for all of us. 

Together we would become the energy super power. OPEC would loose there death-grip. 

Canada as a singular state makes no sense. I think that's to placate to the Canadian politicians who'd fear loosing there jobs. 

Each province gaining statehood, that makes perfect sense. 

The cost of all the trade, which is what about 70% of Canadian commerce, would significantly get cheaper.

Tons of things would get simpler, cheaper. 

The whole divide in Canada between French and non-French would be resolved..... I mean the French Canadians will still complain because, ya know, there French, but as a state they could make it all there own no problem. 

The USA would be such a behemoth fully united across the North American Continent.... Forget Russia, forget China, we wouldn't be the 1,200lb gorilla we'd be KING KONG on steroids. 

I bet that's a picture the younger Canadians see, what could be. 

And let's be real, Canada is so reliant on USA already. If USA declines so does Canada, we are already tied at the hip. Our national defense is reliant on each other, our people are intertwined in so many ways and places. 

The only ones with anything to loose are the politicians. 

Post: Friends in the Twin Cities

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995

@Daniel Windingstad do you have a boat? It's BYOB; boat or booze, you choose the B. Lol. 

Post: This Market Is Full Of Motivated Sellers

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Doug Pretorius:

The latest poll is 90% of Canadians are against joining the US. Of course if those 10% include the politicians that won't matter LOL!


While majority of Canadians are saying "Aah guy, no thanks friend" there is still some really significant things in the numbers to not dismiss: 

A 2025 Ipsos poll found 43% of 18-35 year olds would vote for union if offered full citizenship and financial conversion.

Post: NAR reports huge drop in pending home sales - Does It Matter?

James Hamling
#3 Buying & Selling Real Estate Contributor
Posted
  • Real Estate Broker
  • Minneapolis, MN
  • Posts 4,544
  • Votes 5,995
Quote from @Ken M.:
Quote from @James Hamling:

@Ken M. I have a very different optics/perception of all this. 

Notice how these heat maps of all the decline markets, overlay in almost perfect lock-step with previous years heat maps of the hottest, strongest, fastest appreciating markets? 

That is a very important stand-out data point. 

Yes, without a doubt there is these assorted other little factors at play which honestly have been at play for years; interest rates, rate-locked, incomes lagging inflation etc etc.. But these are all nothing new, these have been in effect for some time now. 

Now keep in mind I am an active trader on NYSE. 

What I see is what we see in stocks literally all the time, it's fundamental to stock and options trading. 

What I am seeing is called Price Consolidation. 

Things are trading within a range, not breaking up, not breaking down, and following a strong trend that ran. 

We had an EPIC strong trend that ran for a heck of a time. A 10% step back after an 80% run-up is not an "oh-no" anything, it's just Price Consolidation. 

One indicator that we are in Price Consolidation is volume. We have not seen volume with a surge nor fall off a cliff, volume is holding steady in it's channel. 

Question is what comes next? 

In NYSE trading terms we'd be looking for indicators of a roll-over where things break down, trading down, which is generally from the run-up over shooting fundamentals on momentum OR something of significance changed in the fundamentals and market prices down to the level of fundamentals. 

In trading down, sure, momentum events can happen. For example TSLA recently shot from 350 too sub 290 due to the Musk/Trump tweet wars. But stocks trade FAST. Real Estate does not, and is less susceptible to such. 

In real estate momentum events require much bigger, deeper, substantive drivers. We don't have any of those factors right now. 

Next action which I see as most applicable for real estate now is Trading Sideways. 

Trend Fatigue is for sure at play, as is New Entrants and Sentiment including Consumer Sentiment and Investor Sentiment. As is Pent Up Demand. 

All this witches brew spells sideways market. 

Lastly, and I believe 2nd most likely, is Price Breakout. 

This is like what happened when NVDA rebounded from low around 90 too 120's and sat there for a time in Price Consolidation, and than Broke out to it's now trading channel around 145. 

Price Break-outs require buyer demand and justifying catalyst. 

In Real Estate we have buyer demand in spades, Pent Up Demand is a massive loaded spring. We don't have a justifying catalyst. That could be a significant drop in mortgage rates, something significant to increase median incomes, or as we saw in covid days a FOMO event. 

Keeping in using a NYSE simile: 

I see a sideways market of Price Consolidation for general market with specific micro individual markets doing there own micro-market things both up and down. 

With a Breakout hungrily waiting for it's catalyst to explode. 

A "Crash" which would be 30% or more drop to median prices, I lend a <5% potential on a macro level. Only via a Blackswan is this feasible. And the very nature of a Blackswan is it's completely unseen, unknown and unpredictable. So that 5% is generally the omnipresent 5% blackswan potential meaning, nothing pointing to any 30%+ drop potential. 

I lend a <20% potential to a macro decline into next lower Price channel, which would be median home prices declining by 11%-17%.      

I lend an 80% probability of macro real estate trending within a 10% channel of median home prices, with historical seasonal adjustment, for foreseeable future. 

Sunbelt I peg with a 12-18% downward deviation for price correction, which is actually just rubber-band effect from the over-shoot of the upward momentum it had. 

All in all, much of this was long seen and predicted as very normal "next cycle" actions from what went through prior. 

I also lend a 100% certainty prediction of posts and videos calling for an imminent crash, collapse, GFC type "reset". I don't understand the doom obsession but they lap-up every little sneeze of things. 

Lastly, the most likely Spector hanging out there is of a currency crisis. And when that comes to pass, there will be huge volatility but in general real estate will skyrocket. Asset's in general will jump but real estate is a unique asset also being 1 of the fundamental human needs. 

After such jump is time to sell, because what comes next if the jump is big enough is the real risk of socialized housing. Picture a USA where median rents are 65% of median incomes..... Yeah, that's a lot of pressure to radically shift things. 

That's when James will be Bitcoin rich, property poor, and watching it all go haywire on tv from a veranda in Cape Town.....    Always have your exit strategies, right. 

I know very little about the stock market but my casual observations are

1. Selling stocks happens pretty much the same day you issue the "sell" but selling real estate can take months, correct me if I’m wrong (no hidden agenda, just a fact)

2. I believe both non owner occupied properties and stock are treated as investments for tax purposes (excluding a personal home)
3. It's easier to price a stock than to price a property since a stock is transacted daily
4. Esoteric things like a pipeline rupture by an unknown reason in the Baltic Sea
can affect oil prices & oil stocks and so on
5. Ordinary people try to buy houses, mostly to live in, but investors treat property much differently and are looking for growth or cash flow or inflation protection or tax write offs
6. Unbeknownst to most people with retirement plans, they are in the stock market whether they realize it or not
7. You don't have to put a new roof on your stock shares (virtually no maintenance)
8. It isn't always a better deal for a homeowner to own a house than to rent
9. There are some places you can't expect appreciation, it may happen but it may not in your lifetime
10. The only way stocks get bedbugs is if they are your renter's stocks and they have bedbugs

I agree with the thought that we are in a bifurcated housing market, good some places, bad other places.

And since interest rates on housing are generally the same across the country, I don't believe interest rates are the issue. Rates were always 8% from the time I was a kid through most of my adult investing.

But prices for houses have gone ballistic compare to people's incomes. I for one think that a $37,000,000,000,000 debt plays a role. It's from giving everything to everybody. That makes us generous . . . with our kids money.

Lot's to unpack here Ken. 

Yes, as I had mentioned the speed at which change moves in the stock market is fast, very fast. For example with various trading platforms we measure speed to order executions in fractions of seconds, and it matters. 

Real Estate market moves changes through at speed of a sloth on vallum in comparison. 

My main point is that trading NYSE is very centric on pattern recognition. To the common person on the street those of us chart-nerds would probably sound like autistic savants as we discuss chart analysis. 

All this data for the Real Estate market, I am see patterns. Very clear patterns jumping out. 

And next one looks for confirmations. I am seeing confirming indicators as well. 

Both of these investing markets have a component of sociology. 

For example, NVDA is a rock solid company and has been as steady as they come. Yet, share price walked off a cliff from ~$150 tumbling all the way to ~$90. There was zero issues within the company, all but nothing changed. What did happen was people in mass freaking out over tariff announcement and the ensuing political poo-storm. 

This is a unique attribute to "good" investors/traders on NYSE vs Real Estate. When trading stocks & bonds we actively think a lot about how people in mass will act, however logical or illogical, when and why. 

In Real Estate it seems the general expectation is it always transacts in perfect logic. I assure, it does not. 

In trading on Wall Street volatility is where $ is made. And BIG volatility, those BIG illogical moves is where BIG $ is made. 

Real Estate is exactly the same. 

For those who want to run down the rabbit hole of market analysis I think there is a lot to be gained and learned from study of how active traders perform market analysis. And how traders predict market moves. 

Appreciation is actually not half as elusive a thing to predict as many make it out to be. The general thought that appreciation is a property getting worth MORE is generally incorrect. Appreciation in large part is the money becoming worth LESS. 

With that understanding it should be easier to see the things that make money (USD) worth LESS are known, factual actions and factors. With that, readily predictable. 

Go back years in my posts to early covid when they were cranking up the money machine and many were banging the doom-gong. I was shouting from the hilltops BUY - BUY - BUY because it was mathematical massive inflation was being created. 

There is additional nuances to appreciation but point is when we are talking adjustment to USD measured in billions and trillions, yeah, the result is not hard to predict. 

So in truth, homes have NOT gotten any more expensive, they havn't, take a historical review of home prices vs say gold. But WAGES, holly-hell have those DROPPED.     

Yeah, I can feel many scratching there heads thinking what the heck am I taking about, there income hasn't gone down..... You must think in terms of purchasing power and inflation adjusted. If your wages number stays the same but the $ is worth LESS, that is a decline in wages. 

And that divide has gotten to be of epic size. The disparity gap is a disparity grand canyon. 

Same time as were up against a currency crisis. We as in planet earth. The world runs not only on debt but on debt CREATION. That economic basis has a finite runway and were now into the stripped yellow zone of that runway warning were about to run off the end into the graves and there after off the cliff beyond. 

This is where bond market comes into things. 

There is only 3 options for this: (A) attempt to inflate it away. That is a can-kicking action that won't work for long as inflation begets inflation which hastens the speed off the end of the runway. (B) AUSTERITY. This simply will not happen because the scale of such that would be needed would literally collapse governments world wide.     (C) Currency reset. This is most likely to a point that it's almost certain, and BTC seems to be the social conditioning mechanism to pave the way for it. No it won't be BTC, because no chance would the powers that be allow an uncontrolled currency. The AMERO or DGC, something of that nature. And by the play book it would be a deploy the crisis to deliver the "cure" type thing. 

Regardless the path A,B or C, the outcome for assets is the same: up UP and away! Especially real estate. 

Don't believe me, look to post soviet Russia.

Real Estate has survived and weathered many different currencies over the ages and stood the test of time as THE store of wealth and value, regardless of the token of the day that we trade value in. 

End of day that's all the USD is, a token of value. 

Post: NAR reports huge drop in pending home sales - Does It Matter?

James Hamling
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@Ken M. I have a very different optics/perception of all this. 

Notice how these heat maps of all the decline markets, overlay in almost perfect lock-step with previous years heat maps of the hottest, strongest, fastest appreciating markets? 

That is a very important stand-out data point. 

Yes, without a doubt there is these assorted other little factors at play which honestly have been at play for years; interest rates, rate-locked, incomes lagging inflation etc etc.. But these are all nothing new, these have been in effect for some time now. 

Now keep in mind I am an active trader on NYSE. 

What I see is what we see in stocks literally all the time, it's fundamental to stock and options trading. 

What I am seeing is called Price Consolidation. 

Things are trading within a range, not breaking up, not breaking down, and following a strong trend that ran. 

We had an EPIC strong trend that ran for a heck of a time. A 10% step back after an 80% run-up is not an "oh-no" anything, it's just Price Consolidation. 

One indicator that we are in Price Consolidation is volume. We have not seen volume with a surge nor fall off a cliff, volume is holding steady in it's channel. 

Question is what comes next? 

In NYSE trading terms we'd be looking for indicators of a roll-over where things break down, trading down, which is generally from the run-up over shooting fundamentals on momentum OR something of significance changed in the fundamentals and market prices down to the level of fundamentals. 

In trading down, sure, momentum events can happen. For example TSLA recently shot from 350 too sub 290 due to the Musk/Trump tweet wars. But stocks trade FAST. Real Estate does not, and is less susceptible to such. 

In real estate momentum events require much bigger, deeper, substantive drivers. We don't have any of those factors right now. 

Next action which I see as most applicable for real estate now is Trading Sideways. 

Trend Fatigue is for sure at play, as is New Entrants and Sentiment including Consumer Sentiment and Investor Sentiment. As is Pent Up Demand. 

All this witches brew spells sideways market. 

Lastly, and I believe 2nd most likely, is Price Breakout. 

This is like what happened when NVDA rebounded from low around 90 too 120's and sat there for a time in Price Consolidation, and than Broke out to it's now trading channel around 145. 

Price Break-outs require buyer demand and justifying catalyst. 

In Real Estate we have buyer demand in spades, Pent Up Demand is a massive loaded spring. We don't have a justifying catalyst. That could be a significant drop in mortgage rates, something significant to increase median incomes, or as we saw in covid days a FOMO event. 

Keeping in using a NYSE simile: 

I see a sideways market of Price Consolidation for general market with specific micro individual markets doing there own micro-market things both up and down. 

With a Breakout hungrily waiting for it's catalyst to explode. 

A "Crash" which would be 30% or more drop to median prices, I lend a <5% potential on a macro level. Only via a Blackswan is this feasible. And the very nature of a Blackswan is it's completely unseen, unknown and unpredictable. So that 5% is generally the omnipresent 5% blackswan potential meaning, nothing pointing to any 30%+ drop potential. 

I lend a <20% potential to a macro decline into next lower Price channel, which would be median home prices declining by 11%-17%.      

I lend an 80% probability of macro real estate trending within a 10% channel of median home prices, with historical seasonal adjustment, for foreseeable future. 

Sunbelt I peg with a 12-18% downward deviation for price correction, which is actually just rubber-band effect from the over-shoot of the upward momentum it had. 

All in all, much of this was long seen and predicted as very normal "next cycle" actions from what went through prior. 

I also lend a 100% certainty prediction of posts and videos calling for an imminent crash, collapse, GFC type "reset". I don't understand the doom obsession but they lap-up every little sneeze of things. 

Lastly, the most likely Spector hanging out there is of a currency crisis. And when that comes to pass, there will be huge volatility but in general real estate will skyrocket. Asset's in general will jump but real estate is a unique asset also being 1 of the fundamental human needs. 

After such jump is time to sell, because what comes next if the jump is big enough is the real risk of socialized housing. Picture a USA where median rents are 65% of median incomes..... Yeah, that's a lot of pressure to radically shift things. 

That's when James will be Bitcoin rich, property poor, and watching it all go haywire on tv from a veranda in Cape Town.....    Always have your exit strategies, right.