All Forum Posts by: Thor Sveinbjoernsson

@Trevor Imlay

Great point. Forbearance is a temporary fix that might cause more severe problems later on. Let the market reward those that were approprietaly prepared with reserves and lower debt to asset ratios.

@Joseph Cacciapaglia

A lot of the jobs lost are not coming back. Unemployment will most likely not go below 10% for the next 1-2 years. Mortgage forbearance is definitely not as readily available as you imply, and even if that was the case, that would simply shift the problem from housing to banking. Banks would enter extreme liquidation issues which would triggle back down to housing. Either way we will see a pullback in housing prices.

@Paul Shannon

I agree with you with the inflation that will most likely occur and could potentially push prices up in the short term, but that is not sustainable. With the fed’s balance sheet up to 27 trillion, there has to come a time where rationality will kick in to prevent us from ending up like Zimbabwe.

Also, unemployment rate was 9% in 2009 and is now at 18% so I don’t see where your 10x number is coming from.

@Aaron K.

Correlation does not equal causation, you are right. But I would honestly conclude that delinquencies are a direct consequence of unemployment, so that is in fact causation.

I’ve been doing a lot of research lately and I wanted to share with you guys what I have found about the correlation between unemployment, delinquencies and housing prices. During the 2008 housing crisis the housing market bottomed about 2 years after the peak in delinquencies. Note that delinquencies are very much so correlated with unemployment rates (see graph on link below). Unemployment is already about twice the peak in 2008 so it is very likely that delinquencies will follow, which will lead to increased supply of housing.

See data here, gathered by stanford researches: https://web.stanford.edu/~pavelkr/jmp_slides.pdf

Conclusion: You have about 6 months to sell off your assets until the market will be flooded with fire sales and forclosures.

Very impressive!

I am interested in turning a SFR to a duplex as well. I would want to take a FHA loan and live in one unit and rent out the other. If anyone has been able to do this in Atlanta please reach out to me!