I'm calling it.

[RobBase]

Imagine living on Twitter.

 

[Kburjr]

Are you sure of that?

We don't want to underestimate the effect of you being a huge cunt.

He ain't all that huge

 

[Peter Gozintite]

It’s already rectifying itself. Home prices were high and sold like hot cakes because rates were low. The feds raised rates to slow down the economy. Now home prices are dropping 20k-50k everywhere. And there tons are homes available doing this. Everybody has equity. Eventually it will all balance itself out.

No reason to fear a crash because all the different loan types (no doc and stated income/option ARMs etc) no longer exist and the government (Dems) aren’t pushing banks to write subprime loans to under qualified borrowers under the threat of fines and penalties if they refuse.

It’s gonna be fine.

So im right, and wrong? Thanks

 

[Peter Gozintite]

All these years later most people apparently still have no idea why the housing market crashed before.

For another housing crash, you need a tidal wave of bankruptcies across America. Right now everyone has equity. And a lot of those people are sitting at 2 something on fixed loans.

Home prices increased due to high demand thanks to a great economy. Now the economy is slow, so rates are higher, with asking prices coming down. You won’t see bidding wars anymore or people paying way over price. Values will settle. Rates will come back down. Homes will begin selling again. It’s already happening.

Or you could look at history and simply see that we live in a boom and bust economy, that goes in cycles, for different reasons.

 

[Catlanta33]

All these years later most people apparently still have no idea why the housing market crashed before.

For another housing crash, you need a tidal wave of bankruptcies across America. Right now everyone has equity. And a lot of those people are sitting at 2 something on fixed loans.

Home prices increased due to high demand thanks to a great economy. Now the economy is slow, so rates are higher, with asking prices coming down. You won’t see bidding wars anymore or people paying way over price. Values will settle. Rates will come back down. Homes will begin selling again. It’s already happening.

I mean, I hope you're right but I think you're dismissing some of the critical factors in this scenario.

Equity drops if pricing drops. We're at the beginning of a cooling off period so who knows where we land.

If you combine less equity with higher rates, cash-out refi nets you less. That means borrowers will dip into that equity, burn through it, pay more for their new mortgage and hit a crunch.

If someone goes into foreclosure, they don't have an affordable option to live.

You can also be at a low rate today but get squeezed elsewhere and struggle to pay.

If we go into a recession, companies will lay people off and unemployment will go up.

This isn't even taking into account the supply chain/inflation issues that are affecting our day-to-day spending. We're paying a lot more to do the exact same thing we did last year. That will catch up to all of us.

We have a looming student loan bubble ready to burst.

I'd feel confident to say most people aren't as stingy as I am with my money. I don't think a lot of people learned their lesson from before and got carried away with the economy doing so well and have probably started to live above their means. All is well and good when the money is flowing but we haven't seen a situation where people have less money and far fewer options to live due to skyrocketing rents.

 

[Peter Gozintite]

A bit more than that, Mr. Bitcoin. (pun intended)

2022 is about pandemic caused supply chains disruptions, Biden and Dems dumping $trillions of new dollars chasing scarce goods, Biden and Dems shutting off oil production, the Fed printing new money and buying junk corporate debt, Russia invading Ukraine, and mssive crypto fraud.

Didnt trump start throwing out free money first?

 

[Deep Dish Pizza Goat]

From one of the best times to buy a house ever to one of the worst, in two years.

 

[Peter Gozintite]

View attachment 74949

Whats your point?

 

[Kburjr]

From one of the best times to buy a house ever to one of the worst, in two years.

Called a capitalistic economy. Trust the process but prepare for hard times.

 

[NU_WTF?]

Ouch that would have fucking sucked. Locked in at 2.25 here

 

[RobBase]

I mean, I hope you're right but I think you're dismissing some of the critical factors in this scenario.

Equity drops if pricing drops. We're at the beginning of a cooling off period so who knows where we land.

The actual available equity won’t change drastically if much at all w the price drops. The actual *value* of these homes didn’t sky rocket along w the prices. People were just over-paying with cash over value. That’s stopping now.

You had homes priced in the 700’s that appraised at 550k. Banks do not lend more than homes are worth. With people no longer over-paying, that 550k house won’t sell for 700k, but it won’t sink in value either.

As rates begin to go down again, these homes will begin selling again.

 

[Peter Gozintite]

The actual available equity won’t change drastically if much at all w the price drops. The actual *value* of these homes didn’t sky rocket along w the prices. People were just over-paying with cash over value. That’s stopping now.

You had homes priced in the 700’s that appraised at 550k. Banks do not lend more than homes are worth. With people no longer over-paying, that 550k house won’t sell for 700k, but it won’t sink in value either.

As rates begin to go down again, these homes will begin selling again.

I dont think youre seeing the whole picture. With your logic, i bought a house for 700, bank oy funded 550, so i have to put an additional 150k down, then prices drop more, but i dont lose money?

Also it seems like you think its like a 30 day correction or some shit. I dont understand what youre trying to say.

What i have seen, here anyway, is prices soaring way higher than they have EVER been. My house sold, in market peak, for 570. Absolute peak of market, end of 2005. Those people foreclosed. I bought at 197. My house appraised for over 650, a year ago, when i refi'd to a 20 year, at 2.3. My neighbor sold for 715, 2 months ago, and my house and yard are way nicer.

Similar house is priced at 699, no offers for over a month. 2 months ago, almost any house had multiple offers sight unseen.

Tells me, interest rates are scaring people, prices are too high and could only afforded at lower rates, by many. Smart buyers are waiting. Inventory starts rising, and prices will fall further. There is no guarantee that interest rates are going to flip with price drops.

I dont know anything for certain, and try not be chicken little, but some shit is coming.

 

[RobBase]

I dont think youre seeing the whole picture. With your logic, i bought a house for 700, bank oy funded 550, so i have to put an additional 150k down, then prices drop more, but i dont lose money?

Also it seems like you think its like a 30 day correction or some shit. I dont understand what youre trying to say.

A) Impossible scenario. Banks don’t fund 100% of value. Anybody who paid 150k cash over value got in that home at somewhere between 80%-90% equity (or lower) based off of 550k. As in they brought a hefty down payment PLUS 150k in cash. I’ll guess that person isn’t a shithead w their money.

B) I showed you a map of homes for sale today all over your area. Lots of available homes with prices drops from exorbitant asking prices. Nice, big homes w 3 & 4 bedrooms at 400-500k range. All w recent price drops.

 

[Peter Gozintite]

A) Impossible scenario. Banks don’t fund 100% of value. Anybody who paid 150k cash over value got in that home at somewhere between 80%-90% equity (or lower) based off of 550k. As in they brought a hefty down payment PLUS 150k in cash. I’ll guess that person isn’t a shithead w their money.

B) I showed you a map of homes for sale today all over your area. Lots of available homes with prices drops from exorbitant asking prices. Nice, big homes w 3 & 4 bedrooms at 400-500k range. All w recent price drops.

Im confused

 

[Kburjr]

A large % of buyers are buying the payment, not the house. As the payment amount goes up, # of buyers goes down. Easy Peasy.

Now, whether or not the secondary effect of rising interest rates hurt us as an economy, debate away. I guarantee you, nobody will be right.

Peter, you've been through this before. Hang on, man.

 

[RobBase]

Im confused

The main two reasons the housing market crashed was 1) Sub-Prime lending. Let’s not argue about who forced them or why, or if the banks are evil yadda yadda

Let’s just agree they happened. Imagine I ask you to lend me $100 and everything about my credit history says you’re an idiot. Zero proof Rob can or will pay you back that 100 (let alone w interest). But for whatever reason, you give me your money anyways.

Obviously I don’t hold up my end of the bargain, ditch my loan, and you’re shit out of luck.

Now magnify that by millions, except now no longer are you out of the money you lent me, you have to sell my house to make a little of it back.

2) All kinds of loan types no longer offered: No income proof needed loans and similar types. Interest only Option ARMS with mega increases in payments after X amount of years etc…

So you had 1) people with no business owning homes, ditching them, forcing banks to sell at bargain basement prices killing home values and 2) All these giant balloon payments coming due people couldn’t afford. Had to sell or foreclose,

WORST PART: Total shitheads completely unaffected, saying fuck it and walking away from their own loans and filing bankruptcy under one spouses name, then turning around and buying some kick ass foreclosure for nothing. I know many assholes like this.

In short, none of the above is happening right now.

 

[moxie]

I hope you waited to buy, or are still prepared to wait a little longer. I have said it before, that I am always the first one hit by the real estate fluctuations. some things that I have observed from the previous market crash, and how it relates to this one.

1st, in Vegas, when the market is strong, you only see "Open Houses" when a few rare seller's wont come down off ridiculous prices, and the listing agents will hold them. I am seeing them everywhere, and even on week days right now. clear sign to me that some prices are dropping, and no one wants to sell for less than their neighbor did a month or two ago.

2nd, me being the first affected, directly due to the fact that I work for property buyers specifically, and I have been up and down quite a bit, but now, the last 3 weeks, I have been SLOW. 2 to 3 inspections a few weeks ago, 2 inspections all last week, and one so far this week. I am going to be doing some contractor type work for the next year or so I think.

3rd, even though the last crash was not the same type, or for the same reasons, real estate has no chance but to be affected negatively by interest rates going up. they are climbing, and will continue to climb, in my estimation. its going to take some time for things to bottom out, but I see anywhere from a 20 to 40 percent drop in home values coming. I have a good friend that is one of my best agents. he went to school and got a degree in finance and economics. He is also terrified right now. we both haver similar situations, where our wives also do pretty well, so if we hit the skids, we don't lose everything. We have been talking about this coming for a while.

Everything I read that has a positive spin on it, seems to be completely out of touch with what is actually going on, and is based on frivolous speculation. I know a guy that owns a big mortgage company, and he always putting some positive bullshit out there about the market being strong. I think he has to believe the shit to sell it. I also think he is fully extended on his income, even though its massive compared to mine, and if he takes an income hit, he loses everything, again, like he did the last time.

Just biding my time and hoping I can buy when it bottoms out.

it was made to look like everything was fine, when it was not, for way longer than they should have been able to get away with. Have you guys heard of the big short?

i was in title & escrow from about 2000 to 20008 when it all finally cratered. But even my dumb ass saw it coming. All these asshole, fast talking mortgage brokers putting together fucking idiotic, liar, predatory lending bullshit deals. Selling the payment (what was the bank in texas that let you do two mortgage payments a month, splitting them equally, just to sell the payment? ) It was insane, and as escrow personnel, I had to be "a neutral third party" and couldn't tell Juan & Maria that their agent, Jose was fucking them over with this ARM (and the origination fees). I'd see the 1003 with Juan making $20k a month as a "landscape architect" and Maria making another $15k as the owner of a cleaning company, when in reality, they were living hand to mouth as a laborer and a house cleaner. The asians preyed on the asians and the iranians did the same. It was disgusting. There were a few people that caught on when I'd point specific things out in the loan documents (trying my hardest not to wink & nod), but most were lulled by the phony "i'm your buddy! I'm one of you!" tactics the brokers used. But sure as shit, they'd default in a few months! There was one escrow officer at one of the companies I worked at that ended up doing jail time for mail & wire fraud for colluding with the mortgage brokers on deals with straw buyers.

 

[moxie]

This is well said…and I feel like it still only skims the surface of what we are facing. Working in the supply chain I’m seeing this clearly. Supply is a root of many evils here.

I would add to it that while unemployment improved some there are still gaps in retail and foodservice that are impacting service, and I think sales too.

Mrs had to stop at Kohls the other day for some returns. Being a red blooded American woman she also wanted to grab some things. 6pm on a weeknight and one cashier. That’s it. Took forever to check out.

There is still major headcount challenges in these sectors. It’s a shit job to begin with, now do it with limited supply coming in and pissed customers. No one wants to do the job.

If we could wave a wand over supply issues companies will need to hire to get that back up. Will they have reasonable access to capital to do it at that point?

I was at target last friday. about 15 people in line for the self-checkout thingies because there was NOT.A.SINGLE.REGISTER.OPEN. I was so fucking pissed. I was thisclose to walking the fuck out with my full cart. What would they do to me? California doesn't prosecute theft under a thousand bucks or something. I'm getting ready to go full Falling Down pretty soon.

 

[moxie]

Oh, and when I got home after going through the self checkout, i see that the goddamn security sensors are still on a bunch of shit i got.

 

[ojb81]

I was at target last friday. about 15 people in line for the self-checkout thingies because there was NOT.A.SINGLE.REGISTER.OPEN. I was so fucking pissed. I was thisclose to walking the fuck out with my full cart. What would they do to me? California doesn't prosecute theft under a thousand bucks or something. I'm getting ready to go full Falling Down pretty soon.

mmmm that doesn't sound very politer than fucker, mox