Real Estate Market is set for a yooge bigly crash

[edjr 5,547]

I miss RLLD at times like these.

 

 

Have you seen prices for real estate?

 

 

 

YOOGE balloon pop coming.

 

 

[Filthy Fernadez 2,696]

Yeah even shitholes that should be condemned are getting scooped up

[edjr 5,547]

Yeah even shitholes that should be condemned are getting scooped up

 

 

Market is thin, prices are sky rocketing.

[wiffleball 4,631]

Not to go all RLLD, but I've been saying/thinking this for a while.

 

To me, it doesn't take much financial acumen, just a memory and eyeballs.

 

Home prices have soared - without any reason for doing so - and more importantly -

without any real substantive changes in what caused 2007/08 to happen.

 

I'm just looking around and if you do the rough math, even a 30 year mortgage on a $500K home leads

(back of napkin) to a huge monthly housing cost. 10 years ago, people were spending like 60% or more of their combined monthly income on housing payment. - That's not sustainable. - And then, interest rates rose.

 

We're in exactly the same situation now: Rental costs are so high as to push people into mortgages. Mortgages are barely affordable largely in part to iminimal interest rates. Net real income hasn't risen by any means.

- We're one long overdue increase in the prime before we head back down the same path.

[DankNuggs 305]

I don't see a crash. Well, id preface that by saying in strong markets you won't see a crash or major retraction, but increasing interest rates and changes to jumbo loan rules should level things off.

 

If you look in Miami, condos there are getting hit hard. But that is a second home market, so its a little different.

 

The 'me too' secondary and tertiary markets are more exposed to a downturn, but provided there isn't another liquidity crisis it should be more of a leveling off and soft landing than a crash

[DankNuggs 305]

 

- We're one long overdue increase in the prime before we head back down the same path.

There have been 3 rate hikes since december. 25 BPS each

[Filthy Fernadez 2,696]

My youngest is looking at buying a home. Some sellers are slapping band aids on problems to get it sold. Buyers are paying inflated prices (again) and won't have money to fix the problems. They'll end up walking away and leave the bank holding the bag.

[Cdub100 3,366]

Right now inventory is low. As soon as the builders catch up then it will pop.

 

Secondary effects are millinials are moving into the housing market. They are a larger market than gen x or y

[MTSkiBum 1,593]

Already 1 in 10 houses is underwater, a crash right now would be real bad.

 

http://zillow.mediaroom.com/2017-03-07-Negative-Equity-Recedes-But-Most-Underwater-Owners-Nowhere-Near-Resurfacing

 

 

When it comes to the value of individual homes, the U.S. housing market has yet to recover. In fact, just 34.2% of homes nationally have seen their value surpass their pre-recession peak.

 

This means as of a few months ago 2/3 of the housing market is yet to recover. Yes if you live in Denver, Houston, San Fran, Austin, etc you probably think there is a housing bubble, but it is very limited geographically.

 

https://www.trulia.com/blog/trends/home-value-recovery-2017/

[DankNuggs 305]

My youngest is looking at buying a home. Some sellers are slapping band aids on problems to get it sold. Buyers are paying inflated prices (again) and won't have money to fix the problems. They'll end up walking away and leave the bank holding the bag.

home inspections are a racket... the guy i used was a bum

 

Right now inventory is low. As soon as the builders catch up then it will pop.

 

Secondary effects are millinials are moving into the housing market. They are a larger market than gen x or y

Builders have been going full bore for years.. Not going to catch up anytime soon.

 

Millenials are renters. They are waiting longer to get married, to set down roots, and have more fluid job careers that influence them putting off purchasing

[vuduchile 1,940]

A crash isn't likely anytime soon.

[titans&bucs&bearsohmy! 2,745]

Like I've said, Dad is in real estate. Been renting and flipping for years. He and his partner own a couple hundred at any given time, although they've begun to sell off and semi retire.

 

They have started a little bank and now lend to others seeking to invest like he did. He says a lot of it is foreign investors now. For example, he has had a lot of business with some pension fund in Australia looking to buy real estate for investment purposes. Says it's getting harder to make a profit. He's glad he is in a position where he is already established with capital to work with, and not just starting out in this climate.

[Cdub100 3,366]

home inspections are a racket... the guy i used was a bum

 

Builders have been going full bore for years.. Not going to catch up anytime soon.

 

Millenials are renters. They are waiting longer to get married, to set down roots, and have more fluid job careers that influence them putting off purchasing

Totally agree with you. The bubble won't burst for another 5ish years. Maybe more due to millennials

 

The first millennials are just starting to hit that settling down period. They are moving from their rented loft to homes. The vast majority are still renters right now but more and more are moving into homes

[tanatastic 2,061]

I'm happy knowing I will never in my life make enough money to buy a house. Yay me.

[RaiderHaters Revenge 3,566]

so you are saying I should sell?

 

I bought my house for 230, its worth 400+ now, problem is I don't want to not own a home, however would be nice to have that cash in hand when it does burst

[Drizzay 644]

The housing bubble will hit the third ring suburbs.

 

Innercity and first ring suburbs will only get hotter.

 

Millenials are buying up all of the post war small houses and remodeling those. They don't want the 4000sq ft cookie cutter. They want the 2000sq ft house near action.

[bandrus1 413]

Millenials are buying up all of the post war small houses and remodeling those. They don't want the 4000sq ft cookie cutter. They want the 2000sq ft house near action.

Also the fact it is becoming harder and harder to afford a larger family so 4000sq ft is overkill

[hdaddy 17]

I'm amazed at how many communities are popping up in my area. Also of note, not a single one has a home under $300k. I'm in S Florida and would say a majority are not retirement communities. I don't know who are buying or going to buy these homes.

[iam90sbaby 2,120]

Duh. Been saying this over a year now. Used car bubble is even worse.

[supermike80 1,285]

I'm amazed at how many communities are popping up in my area. Also of note, not a single one has a home under $300k. I'm in S Florida and would say a majority are not retirement communities. I don't know who are buying or going to buy these homes.

Around Detroit too. Been that way forever.

The math never added up to me. The average household income is what.

50k? And the average home price is like 200k+?

I realize many rent etc but that number always seemed out of balance to me

[supermike80 1,285]

so you are saying I should sell?

 

I bought my house for 230, its worth 400+ now, problem is I don't want to not own a home, however would be nice to have that cash in hand when it does burst

Only 400? How did you get in here?

[giraldi02 470]

Used car bubble is even worse.

If there is a bubble to watch, it's this.

[Hardcore troubadour 12,588]

Duh. Been saying this over a year now. Used car bubble is even worse.

Not sure I get this. Are you saying people are going to default on their loans, or there is going to be too much inventory, or something else?

[giraldi02 470]

Not sure I get this. Are you saying people are going to default on their loans, or there is going to be too much inventory, or something else?

In short...

 

Subprime loans are high in both used and new car loans. The length of the loans is being extended to 70+ months in some cases while the average monthly payments are going down. New and used car inventory is high as well so its creating the same underwater effect that the housing market saw.

[Hardcore troubadour 12,588]

In short...

 

Subprime loans are high in both used and new car loans. The length of the loans is being extended to 70+ months in some cases while the average monthly payments are going down. New and used car inventory is high as well so its creating the same underwater effect that the housing market saw.

70 months? Wow. The car has no value at that point. Thanks

[Let Da Big Dog Eat 37]

Relax. There is no bubble. Pockets of overvaluation occur all the time. That's not a nationwide bubble, It's just stupidity. People worry about the last bubble, without knowing what caused it. It was Clinton making banks come up with "creative financing" alternatives to get people who could not afford houses to get into houses that they not only could not afford but, were way past anything they could ever expect to be able to pay for. In short, encouraging pure speculation with the expectation of unending appreciation . Hence the bubble and inevitable crash.

Banks don't do that anymore.

[RaiderHaters Revenge 3,566]

Only 400? How did you get in here?

By being smart and buying when prices were good. Honestly if I was 15 minutes closer to a city I would have a 750k house. Single story 3300 sqft 1 acre fully landscaped with 60 solar panels and a 4 car garage. Remodeling the entire inside now and then will start back on the outside building a deck. Love my house nobody bugs us or even knows the community exists. My friend 15 mins from me just sold his 1800 sqft 2 story on 6500 lot for 575k

 

In California btw

[PIK 95 2]

Prices in R.I. are up (no inventory) the 175-275 range, but things never really headed up in the higher ranges here. The people I talk to in those higher ranges seem nervous about doing anything right now. There seem to be alot of nervous people for some reason. Lots of uncertainty. The people under 225 are just trying to get out of renting for the most part.

[supermike80 1,285]

Relax. There is no bubble. Pockets of overvaluation occur all the time. That's not a nationwide bubble, It's just stupidity. People worry about the last bubble, without knowing what caused it. It was Clinton making banks come up with "creative financing" alternatives to get people who could not afford houses to get into houses that they not only could not afford but, were way past anything they could ever expect to be able to pay for. In short, encouraging pure speculation with the expectation of unending appreciation . Hence the bubble and inevitable crash.

Banks don't do that anymore.

You very rarely hear about this. A gigantic reason the market got upside down.

[DankNuggs 305]

You very rarely hear about this. A gigantic reason the market got upside down.

I tried to explain the impact of HUD in the midst of an RLLD rant but if fell on deaf ears

[bandrus1 413]

You very rarely hear about this. A gigantic reason the market got upside down.

You don't hear about it because it is false

 

http://fortune.com/2015/06/17/subprime-mortgage-recession/

[supermike80 1,285]

You don't hear about it because it is false

 

http://fortune.com/2015/06/17/subprime-mortgage-recession/

Interesting take

[Hardcore troubadour 12,588]

It's interesting, I am in the process of selling my house and also buying a new one. I find the prices as a buyer and a seller to be in a good spot.

[Brad GLuckman 518]

My local market is pretty crazy. My wife and I looked at upgrading. We looked at 3 houses and all 3 had multiple offers by the time we looked. I don't get it because the population in my city is decreasing.

[titans&bucs&bearsohmy! 2,745]

My local market is pretty crazy. My wife and I looked at upgrading. We looked at 3 houses and all 3 had multiple offers by the time we looked. I don't get it because the population in my city is decreasing.

In guarantee that international investors play a role. They are buying up properties in Memphis Tennessee for focks sake, so I would assume they are nationwide.

[Filthy Fernadez 2,696]

It's interesting, I am in the process of selling my house and also buying a new one. I find the prices as a buyer and a seller to be in a good spot.

 

My wife and I thought about downsizing but by the time we got everything we put into the home we already have, we'd end up paying $100k more so we'll stay where we're at with too much space which isn't a bad thing.

[TimmySmith 2,782]

The last crash was caused by a combination of price inflation and easily accessible money. Neither is in play. Think of right now as 2002. Rates are headed up, so I doubt we will ever get to 2008.

 

The truth is houses prices have been artificially low since around 2010 so an increase in house values is understandable.

[supermike80 1,285]

By being smart and buying when prices were good. Honestly if I was 15 minutes closer to a city I would have a 750k house. Single story 3300 sqft 1 acre fully landscaped with 60 solar panels and a 4 car garage. Remodeling the entire inside now and then will start back on the outside building a deck. Love my house nobody bugs us or even knows the community exists. My friend 15 mins from me just sold his 1800 sqft 2 story on 6500 lot for 575k

 

In California btw

You need at a MINIMUM a $1,000,000 dollar home, that you paid all cash for, to be a member of the geek club. How the hell is your model wife gonna be happy when you are pounding her for the 10th time in 5 days with your 9 in cack unless she has a million dollar home to be hammered in.

[Let Da Big Dog Eat 37]

You don't hear about it because it is false

 

http://fortune.com/2015/06/17/subprime-mortgage-recession/

The author of this aritcle stated a fact that was true but very misleading.

 

Sub prime lending led to foreclosures., Which led to....

A falling RE market. Which led to....

Non sub prime owners becoming upside down Which led to....

Non sub prime owners bailing. Which led to....

A RE market crash.

[supermike80 1,285]

And here we goooooooo

http://abcnews.go.com/US/wireStory/black-homeowners-struggle-us-housing-market-recovers-48532099