Real Estate Crash thread

[Benny Profane]

.......yes.

[jfost]

^ I dunno, maybe wages will increase???

HAHAHHAHAHHAHHAHAHHHHHHHHHHHHAAAAAAAAAAAAAAHHHHHHH HHHHAAAAAHAHHAHHHAHAHA

ack.

[cramer]

I have been loosely keeping an eye on real estate for about 2 years, so you people in the business will know a lot more than I do, but hasn't the monthly payment always been one of the biggest factors in the pricing of most single family homes?

Most people live paycheck to paycheck regardless of their income level. They happen to be able to afford $X/month. What will happen if rates continue to go up? Wont RE prices have to come down to match?

No, i bought my house originally on a 5.5% back in 2008. That historically, is unheard of. People be getting raped on taxes period. The older peeps in your life were buying at 9%+ interest rates. Not to beat a dead horse, but if you're looking to buy, i'd be happy getting in now and up to the 6.5% range. Its alot better than the 80's and 90's.

You have to consider what you're paying in rent as well. When i bought, my payment was cheaper than rent for a 3/2 bath house. It was kind of a no brainer. That and are you looking long term? if you're not going to be in the area longer than a few years, you have to look at can you rent your place out for your monthly, etc.

[4matic]

No, i bought my house originally on a 5.5% back in 2008. That historically, is unheard of. People be getting raped on taxes period. The older peeps in your life were buying at 9%+ interest rates. Not to beat a dead horse, but if you're looking to buy, i'd be happy getting in now and up to the 6.5% range. Its alot better than the 80's and 90's.

You have to consider what you're paying in rent as well. When i bought, my payment was cheaper than rent for a 3/2 bath house. It was kind of a no brainer. That and are you looking long term? if you're not going to be in the area longer than a few years, you have to look at can you rent your place out for your monthly, etc.

The problem is, prices reflect lower rates. It may have been a no-brainer in 2008-2012 but in some areas prices have climbed 30% in a year (because of the low rates). The current rate rise has added almost $100 for every $100k borrowed. On a median house in the Bay Area that is $500 a month. Where does that money come from? A rate driven 10% pullback in price means new buyers have all their equity wiped out. If rates stay above 5% for very long I anticipate a significant slowdown this fall. My personal experience with the people bidding on my flip house is that they are not very strong financially. All their money was in cash or checking. No investments at all. The risk these people take with their life savings to buy a house is extraordinary. I just hope my sale deal gets done. Closes 7/15:

Among The Worst Days in Mortgage Rate History

"If there was any doubt over the future direction of rates, today's MBS reaction to June's jobs report obliterated it. We've lost the most ground in one day EVER, and best execution rates may be in the 5's soon. It's impossible to overstate the magnitude of MBS losses in the past 2 months, and anyone who was floating a loan is in for a rude awakening when they look at current pricing."

http://www.mortgagenewsdaily.com/con...es/315494.aspx

[Benny Profane]

And let's not forget student loan rates doubling at the same time.

[4matic]

And let's not forget student loan rates doubling at the same time.

That doesn't affect existing loans. Less people borrowing money for University is probably a good thing.

[Hugh Conway]

That doesn't affect existing loans. Less people borrowing money for University is probably a good thing.

less education for the workforce isn't a good thing at all. if California hadn't gutted their once glorious higher ed system, I'd be more in agreement, but the squeeze on loans comes at the same time as a sharp rise in tuition and rates, so a less educated workforce = bad. more people playing the housing lotto with their life savings because they've fewer other choices (not trying to pimp higher education, just pointing out the downside).

[4matic]

less education for the workforce isn't a good thing at all. if California hadn't gutted their once glorious higher ed system, I'd be more in agreement, but the squeeze on loans comes at the same time as a sharp rise in tuition and rates, so a less educated workforce = bad. more people playing the housing lotto with their life savings because they've fewer other choices (not trying to pimp higher education, just pointing out the downside).

I said University. Trade school, voc-ed, technical training, language education, etc. yes. Not 4 year University.

[Hugh Conway]

I said University. Trade school, voc-ed, technical training, language education, etc. yes. Not 4 year University.

how much do you think those things run and how do you think people pay for them? One of the big scams in the for-profit education racket is the medical technician gigs. It's not 1960 where you can attend free vocational welding courses at night school.

[Pow4Brains]

It's not 1960 where you can attend free vocational welding courses at night school.

The need for SKILLED tradesman is extremely high and has been for the better part of two decades.


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[4matic]

how much do you think those things run and how do you think people pay for them? One of the big scams in the for-profit education racket is the medical technician gigs. It's not 1960 where you can attend free vocational welding courses at night school.

A lot less than a 4 year University Humanities degree.

[Hugh Conway]

A lot less than a 4 year University Humanities degree.

so that's why the University of Phoenix tops defaults

[mud]

Maybe if Benny learns how to dig ditches he can can afford to buy a house.

[4matic]

so that's why the University of Phoenix tops defaults

No, it's because it's a crappy University. Full training welding school is only about $12k.

I agree with The Economist:

http://www.economist.com/news/united...ts-not-what-it

[Hugh Conway]

oh, 4matic cut'n pasting another opinion from some teenager at the economist.

where are all of these places that need welders in the bay area 4matic? All of the shipyards and fabricators that have relocated because it's really fucking expensive to actually make something?

welders don't buy shitty homes in the east bay for 6-figures unless they've a union job (going) or win the housing lottery. neither is sustainable.

[4matic]

oh, 4matic cut'n pasting another opinion from some teenager at the economist.

where are all of these places that need welders in the bay area 4matic? All of the shipyards and fabricators that have relocated because it's really fucking expensive to actually make something?

welders don't buy shitty homes in the east bay for 6-figures unless they've a union job (going) or win the housing lottery. neither is sustainable.

Just one example. It's obvious traditional 4 year college has surpassed its value. Manufacturing is rising in the US and will be much stronger in years ahead as China labor costs increase. Oil and gas exploration will need a lot of welders.

[Benny Profane]

A lot less than a 4 year University Humanities degree.

You'd be surprised. There's a lot of kids going to school to learn what I do, and indebting themselves in the tens of thousands. Sad, because they're just being scammed.
Culinary school is an example, too. 30-40,000 debt to fuel dreams of being top chef, and your first job, if lucky, is scumbag in the kitchen at minimum wage.

Average student debt right now is 23,000. That is your first time buyer, starting life with that sort of debt, and the interest rate just doubled, while the mortgages just went to 5. Good luck on a new, organic bubble.

[iceman]

Jesus H. Fucking Christ, cut it out.
You people and your blowing-with-the-wind fuck-I'm-old-now these-kids-today the-world-is-going-to-hell-laments are fucking pathetic. Shit is what it is. Live in the now.

As to this thread, dumbasses drove the last bubble, then they never got over the idea that they'd get rich in real estate, and now 5% is shaking them out. Who the fuck cares? They should be out. If you were looking to turn things quick on the upside of the minibubble i get it, but you were slow and behind the curve, you lost, you're bummed, shut up. Cost of doing business. Otherwise, wtf are you morons even talking about?

[Benny Profane]

Just one example. It's obvious traditional 4 year college has surpassed its value. Manufacturing is rising in the US and will be much stronger in years ahead as China labor costs increase. Oil and gas exploration will need a lot of welders.

You fell for that "manufacturing is coming back" thing. This isn't going to be your grandfather's factory union gig sprouting up everywhere. These factories are filled with robots and computers and a few low paid workers manning them. Furgetabout high school grads buying brand new Camaros with their first year of substantial paychecks. Don't worry, it's the same world wide. The Chinese are just as concerned about labor costs, and filling their factories with robots. When they finally start making cheap robots, and filling the world's factories with them, goodbye a zillion more jobs in the next few decades.

[Hugh Conway]

Manufacturing is rising in the US and will be much stronger in years ahead as China labor costs increase.

the great trade school fueled employment boom ain't. gonna. happen.

it ain't cuz I'm old icey, i could well be your bastard son. just shit - like east bay homes - are way to expensive for the jobs out there (and trade schools aren't going to train for the jobs that are). The great hyped "sharing" economy - cars, tools, homes, whatever - should reduce the demand for expensive fixed assets like homes esp. in non-premium areas (which is much of the bay area, despite it being nicer than 90% of the country). Unless you believe in the 4matic juju that somehow there'll be massive employment booms in ...... the things that aren't being developed. At some point the things gotta break, and yeah, i'll be saying the skys falling for a bit longer.

[Benny Profane]

Jesus H. Fucking Christ, cut it out.
You people and your blowing-with-the-wind fuck-I'm-old-now these-kids-today the-world-is-going-to-hell-laments are fucking pathetic. Shit is what it is. Live in the now.

As to this thread, dumbasses drove the last bubble, then they never got over the idea that they'd get rich in real estate, and now 5% is shaking them out. Who the fuck cares? They should be out. If you were looking to turn things quick on the upside of the minibubble i get it, but you were slow and behind the curve, you lost, you're bummed, shut up. Cost of doing business. Otherwise, wtf are you morons even talking about?

Because I want to buy a cheap fucking condo close to a ski hill, and this low rate shit is preventing that. Shit, I just want a cheap place to live in my old age, but, a lot of people still think a crappy cape cod in Jersey should be worth a half million. Six years plus into this crash, and it still hasn't crashed. I'm tired of waiting for the inevitable.

[liv2ski]

Because I want to buy a cheap fucking condo close to a ski hill, and this low rate shit is preventing that. Shit, I just want a cheap place to live in my old age, but, a lot of people still think a crappy cape cod in Jersey should be worth a half million. Six years plus into this crash, and it still hasn't crashed. I'm tired of waiting for the inevitable.

Benny, I would not hold your breath for a CRASH!!!!!! I think Amerika will go the way of Japan and the Fed will end up just hitting Ctrl P into infinity to support the buying of previously issued bonds, to keep rates low, to support an anemic US economy. With a QE to infinity as the new normal in place, I believe values will normalize, maybe slide a bit in 2014. Beyond that, look at Japan as the Magic 8 Ball to answer your "what will happen in Amerika" questions, as I believe we will follow their M.O. down the road and the economies will have similar results. Real Estate has not been that hot in Japan over the last 20 years, so your guess is as good as mine in the years to come.

[iceman]

the great trade school fueled employment boom ain't. gonna. happen.

it ain't cuz I'm old icey, i could well be your bastard son.

Enrique, is that you????

I'll admit that I have assumed that we are of similar vintage.

[skiballs]

Holy fuck the end is nigh. l2s is has a reasonable attitude. Hugh admits he's iceman's bastard child. Iceman is turning into a crotchety old fuck. I guess benny wanting people to suffer so that he can gain is nothing new. Supply and demand, more people and the same amount of land combined with dwindling natural resources, prices should plummet any day now.

[Hugh Conway]

Supply and demand, more people and the same amount of land combined with dwindling natural resources, prices should plummet any day now.

don't you live in Baltimore? Aka "Detroit of the East" (and Oakland's "Detroit of the West") people have to actually want the land for it to go up in value.

And, r.e. California, the good lands taken but there's plenty of "other" land that with some changes in zoning could allow for a massive increase in population in the same footprint.