The 2023 Housing Bubble ***Apocalypse***

[edjr 5,552]

18 minutes ago, TimHauck said:

Is there anything particular from this video that sticks out to you?  It looks like more of the same data that we’ve been seeing for a few months now, really the main bad thing that stands out to me is the % increase in mortgage payment.   But there are other stats indicating it may not be as bad as some think, such as active listings still being about 20-30% lower than 2018-2019, or that 26% of listings are still selling for over the asking price.

Pending home sales down 51% YoY basis. 

 

[Raven Fan 362]

57 minutes ago, TimHauck said:

Is there anything particular from this video that sticks out to you?  It looks like more of the same data that we’ve been seeing for a few months now, really the main bad thing that stands out to me is the % increase in mortgage payment.   But there are other stats indicating it may not be as bad as some think, such as active listings still being about 20-30% lower than 2018-2019, or that 26% of listings are still selling for over the asking price.

Zero chance that 26% of listing are selling above asking price right now.  Maybe for all listings that closed like by July since those were already in the hopper.

Nothing is selling now.

[edjr 5,552]

34 minutes ago, Raven Fan said:

Zero chance that 26% of listing are selling above asking price right now.  Maybe for all listings that closed like by July since those were already in the hopper.

Nothing is selling now.

I saw a house the other day.. asking 599.  would have sold for over asking 6 months ago 100%. the agent put in the listing "all offers due by Tuesday at 5 pm" that was this tuesday. still for sale.  people are

[TimHauck 1,799]

53 minutes ago, Raven Fan said:

Zero chance that 26% of listing are selling above asking price right now.  Maybe for all listings that closed like by July since those were already in the hopper.

Nothing is selling now.

I believe it was October only.  CA only.  But I realize that includes if it sells over “ask” after a price drop.

[edjr 5,552]

 

AY CARAMBA! 

[edjr 5,552]

 

[RLLD 3,455]

The more government attempts to control, the worse this will all get. 

[edjr 5,552]

1 minute ago, RLLD said:

The more government attempts to control, the worse this will all get. 

Imagine... People bough real estate at the height of all time pricing, with 3.5% down payment and won't recover for 10+ years.

[Raven Fan 362]

13 minutes ago, edjr said:

Imagine... People bough real estate at the height of all time pricing, with 3.5% down payment and won't recover for 10+ years.

Anyone who thought a 40% increase in less than 3 years is an idiot.  Throw in rates double what they were during that run up and you've set yourself up for a nice 25% crash in price.  What I'm not sure of is that even if house get back to their 19 normalized levels, interest rates are still 1.5x higher than they were then.  That will continue to surpress demand and may push housing prices down even further.  This will take a long time to work itself through as housing prices are very elastic on the way up and very sticky on the way down. 

[edjr 5,552]

Just now, Raven Fan said:

Anyone who thought a 40% increase in less than 3 years is an idiot.  Throw in rates double what they were during that run up and you've set yourself up for a nice 25% crash in price.  What I'm not sure of is that even if house get back to their 19 normalized levels, interest rates are still 1.5x higher than they were then.  That will continue to surpress demand and may push housing prices down even further.  This will take a long time to work itself through as housing prices are very elastic on the way up and very sticky on the way down. 

Rates aren't expected to go below 5 till 2024  5 is still high

[Raven Fan 362]

4 minutes ago, edjr said:

Rates aren't expected to go below 5 till 2024  5 is still high

Yep, like $300 - $500 more a month simply due a 5% rate instead of a 3.25% rate.

[RLLD 3,455]

41 minutes ago, Raven Fan said:

Anyone who thought a 40% increase in less than 3 years is an idiot.  Throw in rates double what they were during that run up and you've set yourself up for a nice 25% crash in price.  What I'm not sure of is that even if house get back to their 19 normalized levels, interest rates are still 1.5x higher than they were then.  That will continue to surpress demand and may push housing prices down even further.  This will take a long time to work itself through as housing prices are very elastic on the way up and very sticky on the way down. 

I think you and I agree on this.  I brought this up in the past and it was not well-received, mainly because I refused to give the sellers a free pass entirely.....but that is another topic....

[TimHauck 1,799]

1 hour ago, edjr said:

 

That chart at 0:45 is super misleading.  It’s showing the % of homes with negative or less than 10% equity, based on current values.  It appears this is also based on the current balance on the loans.  The guy says “we have never seen anything like this even compared to the last housing bubble,” but although it is obviously not helped by declining values, by definition this number is going to be higher for recently purchased homes since they haven’t had a chance to pay anything off yet.  And many homes purchased 15 years ago (during the last bubble) would have had the balances paid down, even if the actual value might be less (and even pre-pandemic home values had exceeded that of the last bubble anyway).  Honestly it seems positive to me that there is a lower % of loans currently with negative equity originated in 2021 than those originated in 2005, 2006, 2007, or 2008.

The other thing is this chart is based on % of loans originated, not raw number.  I can’t seem to find the chart but I’m pretty sure the # of home purchases was way down in 2021 and even 2022 compared to pre-pandemic.    This really just contributes to the fact that as it relates to the total number of mortgages out there, it’s probably a small % that will really be in trouble based on when they bought.  The guy in the video seems to agree since he does bring up another point I believe I had brought up earlier - the fact that the increase happened so fast in 2021/early 2022 will limit the number of people that will be badly impacted.

[TimHauck 1,799]

He does bring up a good point about cash out refi’s though.  I’m not sure how common they are (or were really, I doubt there are much of them happening anymore with the higher rates), but that would also contribute to the number of people underwater.

[Strike 3,956]

2 hours ago, RLLD said:

I think you and I agree on this.  I brought this up in the past and it was not well-received, mainly because I refused to give the sellers a free pass entirely.....but that is another topic....

You didn't not give them a free pass; you accused them of committing fraud.  At least own up to what you said previously.  Don't try to minimize it.

[RLLD 3,455]

15 minutes ago, Strike said:

You didn't not give them a free pass; you accused them of committing fraud.  At least own up to what you said previously.  Don't try to minimize it.

Yes I did, and I stand by that. Just didn't se a need to bloat this thread with all that. 

[Strike 3,956]

1 minute ago, RLLD said:

Yes I did, and I stand by that. Just didn't se a need to bloat this thread with all that. 

Well, you were universally mocked on this bored for that stance so I can see why you'd try to make yourself look better bringing it up again.

[RLLD 3,455]

Just now, Strike said:

Well, you were universally mocked on this bored for that stance. 

Yep. Everyone thinks they can set the price and they are right, and if someone wants to overpay that is one them....until those chickens came home to roost of course. And hey its not like you can be held accountable for bullsh!t real estate pricing, right?

[Strike 3,956]

1 minute ago, RLLD said:

Yep. Everyone thinks they can set the price and they are right, and if someone wants to overpay that is one them....until those chickens came home to roost of course. And hey its not like you can be held accountable for bullsh!t real estate pricing, right?

You equating Trump to people selling their homes doesn't make you look any better.  Keep digging.......

[RLLD 3,455]

Just now, Strike said:

You equating Trump to people selling their homes doesn't make you look any better.  Keep digging.......

I am, you see technically they are not that far apart.  On the one hand you had speculators buying property that they then sold for absurd amounts in as little as 30 days, and of course other sellers also doing similar.  And no one questioned where that was right or not, so what happens, catastrophe.....and no one wants to hold sellers in any way accountable, because no one wants to admit their greed....I get it.  That does not mean all of us have to ignore it. 

[Strike 3,956]

Just now, RLLD said:

I am, you see technically they are not that far apart.  On the one hand you had speculators buying property that they then sold for absurd amounts in as little as 30 days, and of course other sellers also doing similar.  And no one questioned where that was right or not, so what happens, catastrophe.....and no one wants to hold sellers in any way accountable, because no one wants to admit their greed....I get it.  That does not mean all of us have to ignore it. 

The article you posted is about Trump overvaluing his own property.  I don't know all the ins and outs of what he did, but I know that in a real estate transaction between two people involving a house, valuations/appraisals are done by third parties.  You don't get to value your home.  And those valuations are typically done by using comparisons to other recent sales in the same area.  So, your analogy fails.

[RLLD 3,455]

Just now, Strike said:

The article you posted is about Trump overvaluing his own property.  I don't know all the ins and outs of what he did, but I know that in a real estate transaction between two people involving a house, valuations/appraisals are done by third parties.  You don't get to value your home.  And those valuations are typically done by using comparisons to other recent sales in the same area.  So, your analogy fails.

You can absolutely value your home, and then the market responds.  If you buy a home today for $600k and then sell in it January for $800k, good for you....but just know that its an ecosystem, and you may think you won, until it comes back to you......

I recall Gutter crying like a little b!tch as his investments tanked, after discussing it with me much as you did, so I missed no opportuity to poke him about it.....reminding him he lost his "money" or value or whatever, and that his own actions were party to that outcome, like it or not.

So the long and short of it is, go ahead, gouge away, but keep in mind that if you participate in the fraud, you are part of the fraud, its just that simple. 

You and I will likely never agree on this one, though we seem to align on many other things. I say we let it be.....

[Strike 3,956]

2 minutes ago, RLLD said:

You can absolutely value your home, and then the market responds.  If you buy a home today for $600k and then sell in it January for $800k, good for you....but just know that its an ecosystem, and you may think you won, until it comes back to you......

I recall Gutter crying like a little b!tch as his investments tanked, after discussing it with me much as you did, so I missed no opportuity to poke him about it.....reminding him he lost his "money" or value or whatever, and that his own actions were party to that outcome, like it or not.

So the long and short of it is, go ahead, gouge away, but keep in mind that if you participate in the fraud, you are part of the fraud, its just that simple. 

You and I will likely never agree on this one, though we seem to align on many other things. I say we let it be.....

When you say "you and I", you really mean YOU and the entire Geek Club, because I don't remember one other person here agreeing with your take on this.

[RLLD 3,455]

1 minute ago, Strike said:

When you say "you and I", you really mean YOU and the entire Geek Club, because I don't remember one other person here agreeing with your take on this.

And I am comfortable with that as well. 

The Bandwagon Fallacy, or  Argumentum ad Populum, being the act of arguing that because everyone, "the people," or "the forum" thinks or does something, it must therefore be true and right. Although I think it is identified in the online real as the Information Cascade.  Do not assume that just because people all think it is OK that makes it OK.  

[Hardcore troubadour 12,618]

Blackrock: “Prepare for a recession unlike any other,  and what worked before won't work this time”.  Warning or manipulation? 

[Raven Fan 362]

45 minutes ago, RLLD said:

You can absolutely value your home, and then the market responds.  If you buy a home today for $600k and then sell in it January for $800k, good for you....but just know that its an ecosystem, and you may think you won, until it comes back to you......

I recall Gutter crying like a little b!tch as his investments tanked, after discussing it with me much as you did, so I missed no opportuity to poke him about it.....reminding him he lost his "money" or value or whatever, and that his own actions were party to that outcome, like it or not.

So the long and short of it is, go ahead, gouge away, but keep in mind that if you participate in the fraud, you are part of the fraud, its just that simple. 

You and I will likely never agree on this one, though we seem to align on many other things. I say we let it be.....

Uh, maybe between an all-cash private sale.  But if there's a bank involved there will be a 3rd party home appraiser who gives phuk all to what the seller thinks they can sell for.  This appraisal is essentially the maximum that can be borrowed.  So this applies to like 90% of non-commercial real estate transactions. 

[edjr 5,552]

6 minutes ago, Raven Fan said:

Uh, maybe between an all-cash private sale.  But if there's a bank involved there will be a 3rd party home appraiser who gives phuk all to what the seller thinks they can sell for.  This appraisal is essentially the maximum that can be borrowed.  So this applies to like 90% of non-commercial real estate transactions. 

Mortgage giants Fannie Mae and Freddie Mac will raise the limits of government-backed loans to a record level for 2023, with the maximum loan limit hitting more than $1 million for high-cost areas, the Federal Housing Finance Agency announced Tuesday.Nov 29, 2022

https://www.cnn.com/2022/11/29/homes/fannie-and-freddie-loan-limits-announcement-2023/index.html#:~:text=Mortgage giants Fannie Mae and,Housing Finance Agency announced Tuesday.

[edjr 5,552]

33 minutes ago, Hardcore troubadour said:

Blackrock: “Prepare for a recession unlike any other,  and what worked before won't work this time”.  Warning or manipulation? 

Saw a good YT video. How to get rich in 2023. Live on $1500 a month and save every penny you can. 

[RLLD 3,455]

14 minutes ago, Raven Fan said:

Uh, maybe between an all-cash private sale.  But if there's a bank involved there will be a 3rd party home appraiser who gives phuk all to what the seller thinks they can sell for.  This appraisal is essentially the maximum that can be borrowed.  So this applies to like 90% of non-commercial real estate transactions. 

You seem to have missed the point.

[Raven Fan 362]

14 minutes ago, RLLD said:

You seem to have missed the point.

Ok, well help me out.  I believe you were saying that sellers could charge exorbitant/gouging prices if they could find buyers.  Is this not correct?

[RLLD 3,455]

1 minute ago, Raven Fan said:

Ok, well help me out.  I believe you were saying that sellers could charge exorbitant/gouging prices if they could find buyers.  Is this not correct?

I am suggesting that there is a moral dilemma at play.  People want to be able to gouge others for excessive profit and have no consequence. But that is a failed position to hold.

We have many checks in place to prevent this, and yet it happened. It happened because the government perverted the market instead of doing their duty.  It happened because the banks, in THEIR greed, sought to make extravagant profits.......and THEY were bailed out for it.

But the people who bought and sold? What about them? Should the buyer be accountable for taking on a loan they could not hope to afford? Should the seller hold any accountability for participating? Or is greed as a motivation a justification for any bad action?

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

[Raven Fan 362]

1 minute ago, RLLD said:

I am suggesting that there is a moral dilemma at play.  People want to be able to gouge others for excessive profit and have no consequence. But that is a failed position to hold.

We have many checks in place to prevent this, and yet it happened. It happened because the government perverted the market instead of doing their duty.  It happened because the banks, in THEIR greed, sought to make extravagant profits.......and THEY were bailed out for it.

But the people who bought and sold? What about them? Should the buyer be accountable for taking on a loan they could not hope to afford? Should the seller hold any accountability for participating? Or is greed as a motivation a justification for any bad action?

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

I appreciate the clarification.

[TimHauck 1,799]

1 hour ago, RLLD said:

I am suggesting that there is a moral dilemma at play.  People want to be able to gouge others for excessive profit and have no consequence. But that is a failed position to hold.

We have many checks in place to prevent this, and yet it happened. It happened because the government perverted the market instead of doing their duty.  It happened because the banks, in THEIR greed, sought to make extravagant profits.......and THEY were bailed out for it.

But the people who bought and sold? What about them? Should the buyer be accountable for taking on a loan they could not hope to afford? Should the seller hold any accountability for participating? Or is greed as a motivation a justification for any bad action?

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

Wtf are you talking about?  You’re saying people selling their house for a profit are committing fraud?  Huh?

Most of those people then bought a different house, so then they go from fraudsters to victims of fraud?

[Strike 3,956]

1 hour ago, RLLD said:

I am suggesting that there is a moral dilemma at play.  People want to be able to gouge others for excessive profit and have no consequence. But that is a failed position to hold.

We have many checks in place to prevent this, and yet it happened. It happened because the government perverted the market instead of doing their duty.  It happened because the banks, in THEIR greed, sought to make extravagant profits.......and THEY were bailed out for it.

But the people who bought and sold? What about them? Should the buyer be accountable for taking on a loan they could not hope to afford? Should the seller hold any accountability for participating? Or is greed as a motivation a justification for any bad action?

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

I made bank.  And I've checked over the years.  The same people who bought my house owned it for at least 10 years after I sold it to them.  Obviously, they could afford it.  Last time I checked Zillow estimated it's value in the 900k range.  It's probably over a million by now.   They've made upgrades to it as well.  I drive past it when I go home to visit.  They've added a motorized gate to the driveway and some other things, and those are just the things I could see.  From what I was told by my realtor the person who bought the home is in construction.  The inside definitely needed updating.  I'd be surprised if he didn't do that as well.  So how again did I commit fraud?  And quit minimizing it.  You didn't just suggest people had some culpability.  You accused them of committing a crime.  That's where you crossed the line.

[RLLD 3,455]

1 minute ago, TimHauck said:

Wtf are you talking about?  You’re saying people selling their house for a profit are committing fraud?  Huh?

Most of those people then bought a different house, so then they go from fraudsters to victims of fraud?

I will restate it, yet again.....

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

[Strike 3,956]

Just now, RLLD said:

I will restate it, yet again.....

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

No, you accused us of committing a crime.  Quit minimizing it.  This is why we could never agree back then.  You've never apologized to those you accused of committing a crime or walked back that accusation.

[RLLD 3,455]

1 minute ago, Strike said:

I made bank.  And I've checked over the years.  The same people who bought my house owned it for at least 10 years after I sold it to them.  Obviously, they could afford it.  They've made upgrades to it as well.  I drive past it when I go home to visit.  They've added a motorized gate to the driveway and some other things, and those are just the things I could see.  From what I was told by my realtor the person who bought the home is in construction.  That inside definitely needed updating.  I'd be surprised if he didn't do that as well.  So how again did I commit fraud?  And quit minimizing it.  You didn't just suggest people had some culpability.  You accused them of committing a crime.  That's where you crossed the line.

I am glad you can find comfort in your individual situation.  I minimized nothing, I placed their role much lower, the problem was i celebrated them being harmed instead of being understanding. And where people celebrated their role and participation, I happily wished bad outcomes for them, and still do. 

[RLLD 3,455]

Just now, Strike said:

No, you accused us of committing a crime.  Quit minimizing it.  This is why we could never agree back then.  You've never apologized to those you accused of committing a crime or walked back that accusation.

Link? I can go find the ones where I set the % at like 5, you are just mad because I would have been perfectly fine of YOU went to jail, but only because you are an internet tough guy ( pooosay) and should be raped in prison for celebrating what you did in participating. 

[Strike 3,956]

Just now, RLLD said:

I am glad you can find comfort in your individual situation.  I minimized nothing, I placed their role much lower, the problem was i celebrated them being harmed instead of being understanding. And where people celebrated their role and participation, I happily wished bad outcomes for them, and still do. 

No.  You literally used the word fraud.  You can't pretend you didn't now because it makes you look bad.  Hint:  It made you look bad then too. 

[TimHauck 1,799]

1 minute ago, RLLD said:

I will restate it, yet again.....

The main issue that arose, back in the day, was that I would dare to suggest that sellers held some culpability in it all, maybe a tiny %, but they were not excused from it....and that was not something people are willing to accept. 

What do you propose they should have done instead, intentionally sell for under market value?