Real Estate Crash thread

[powder11]

Benny needs to get a life and stop delivering pizzas.

I hear there may be a management position opening up at a car wash in NJ!

[Benny Profane]

Accidentally clicked on page 1 instead of the current page...this thread has been going on for six fucking years! Not quite sure what to make of that.

I have a good feeling about the Mastering the Margarita thread.

[powder11]

Vancouver market is insane. Up 80% in 5 years. I'm on track to be mortgage free in 3 years - I want that financial security. Planning on dumping other RE holdings and taking my profits. Maybe go buy some Dynafit Comforts or something.

Its just too nuts.

Kind of funny to re-read the front page after all that we've been through in the last 6 years. Whats insane is that since Lee posted this 6 yrs ago, the Vancouver market never took a hit after everywhere else in the world has shit the bed... I blame the Chinese!

[LeeLau]

Kind of funny to re-read the front page after all that we've been through in the last 6 years. Whats insane is that since Lee posted this 6 yrs ago, the Vancouver market never took a hit after everywhere else in the world has shit the bed... I blame the Chinese!

Sometimes i think about how much $ I would have got instead of buying a place in Whistler and SunPeaks and instead plowing it into shitboxes in Lower Lonsdale. But then I think of all the Icebreaker my wife would have bought with all the profits and feel better.

There's a lot of eating crow potential in the first 10 or so pages though. And at least all the Whistler RE bullshitters have stfu about comparing Whistlers potential to Aspen and Jackson Hole etc

[skier666]

Rents are hitting 'tech bubble prices' again in SF where my mortgage doesn't seem outrageous any longer. I'm still raising rents at the properties we manage near Apple HQ and are currently at around $2 sq/ft for a mid-range style of complex.

Now that FB is going public, people are betting that the home prices from the Peninsula up to the Southern sections of SF may skyrocket with all this new funny money. I'm debating doing a pocket listing on our condo but the last thing I want to do is move into a rental with two kids.

[powder11]

Sometimes i think about how much $ I would have got instead of buying a place in Whistler and SunPeaks and instead plowing it into shitboxes in Lower Lonsdale. But then I think of all the Icebreaker my wife would have bought with all the profits and feel better.

There's a lot of eating crow potential in the first 10 or so pages though. And at least all the Whistler RE bullshitters have stfu about comparing Whistlers potential to Aspen and Jackson Hole etc

you don't have the patience to be a landlord. I'm still getting more than I paid on both Whistler properties. More so on the one I bought in 2004. The 2008 one I'm either up $50 or down $50. Don't really care. By the time I get around to selling, it will all be up.

[liv2ski]

Don't really care. By the time I get around to selling, it will all be up.

Uuuuugh. I hope so P11. Those famous last words have been uttered before.

[AdironRider]

Uuuuugh. I hope so P11. Those famous last words have been uttered before.

What 5 years ago? I think P11 is talking a realistic time frame and not the sky is falling timeframe you're referencing.

[skiballs]

Damn it slurpee boy , L2s hasn't been posting up any doom and gloom lately .
And you have to go poken him with a stick .
If he posts up some zerohedge shit , it's all your fault .

[iceman]

Good point. Fixed it.

[powder11]

Uuuuugh. I hope so P11. Those famous last words have been uttered before.

I've got about 15-20 yrs before I go in for full time retirement to someplace warm by the ocean, so if my properties haven't appreciated by then, I will burn them to the ground and collect the insurance money. Either way, I win.

[Benny Profane]

What 5 years ago? I think P11 is talking a realistic time frame and not the sky is falling timeframe you're referencing.

Not necessarily sky is falling. It fell, and will just stay there. Re: Japan. Or Florida from the mid 20s to the 60s.

[Benny Profane]

http://www.zillow.com/blog/2012-05-0...-a-demolition/

[powder11]

Florida from the mid 20s to the 60s.

The silver lining there is that the folks who owned land during that time became filthy fucking rich over night when Miami boomed in the 60's. You're right, the next hay days could be a bit off in our future, but no risk, no reward. I'll hold on to the bitter end, even if its my kids who eventually reap the rewards.

[Shredhead]

http://www.zillow.com/blog/2012-05-0...-a-demolition/

Yes, you should get it! That house just says, Benny Bon Vivant!

[Benny Profane]

Yes, you should get it! That house just says, Benny Bon Vivant!

From the look of it, I'll bet there's still a few stains that someone can do a DNA ID on both Harry and Linda.

[LeeLau]

you don't have the patience to be a landlord. I'm still getting more than I paid on both Whistler properties.

yup. Buy and hold i'm not.

[liv2ski]

I've got about 15-20 yrs before I go in for full time retirement to someplace warm by the ocean, so if my properties haven't appreciated by then, I will burn them to the ground and collect the insurance money. Either way, I win.

Quote worthy for sure. Maybe buy that nice spot by the sea in Greece. By years end they should be givin that place away.

[liv2ski]

Over the weekend it was announced that California’s large $9 billion budget deficit was no longer $9 billion but $16 billion. Whoops. California’s unemployment rate is officially back to 11 percent but the underemployment rate is above 20 percent. If we look at “not seasonally adjusted” numbers the unemployment rate is 11.5 percent. A report this weekend discussed how over 95,000+ people on unemployment insurance will lose their coverage this week in CA. I know the siren call of low rates is tough to ignore, but with the way shit is going in CA, I find it very hard to believe we have the economic strength to support home sales and higher prices. Nothing ever goes straight up or down. This little bit of buying we have seen over the last 6 months is likely just a blip up on the chart before it goes down another 20%. Good news is, my kids should be able to afford a house in the next 3-5 years.

[Benny Profane]

Yeah, but will they be able to afford the property taxes that will never stop going up to pay for such deficits?

[liv2ski]

Gary Schiller and I see different reasons for a 20% decline. That said, there is a lot of bad news out there for the housing markets to overcome.

GARY SHILLING: Home Prices Will Plummet 20% From Here

"Despite growing consensus that it is now cheaper to buy a home than rent one, Gary Shilling, president of A. Gary Shilling & Co. says by previous standards home prices are still high relative to rents.

In his latest editorial in The Wall Street Journal, Shilling writes that while home prices have fallen 34 percent since their peak in early 2006, they are not cheap if prices continue to fall:

"But even if homeownership was cheaper than renting, as some claim, buying a house now would be a disastrous investment if prices fall another 20% or more."

Shilling says homes are going to lose market value in coming years because of excess inventories. He says there are an excess of 2 million inventories and that it will take at least four years to work off this excess and quite some time for those surplus homes to bring down prices:

"Additionally, our inventory estimate doesn't even include future foreclosures, some five million of which are waiting in the wings.

...Now that mortgage servicers have reached a $25 billion settlement with Washington and state attorneys general, foreclosures are likely to roar back. That likely will trigger the additional price decline, since the National Association of Realtors says foreclosed houses sell at a 19% discount to other listings, and sizable sales of real estate owned by lenders drag down the entire market. The total peak-to-trough decline in single-family house prices then would be more than 50%.

If those foreclosed out of their abodes move to rentals, they're occupying other housing units, so there is no change in overall inventories. But if they double up or move in with their parents—as statistics show they have been doing—even more excess inventory results."
http://www.businessinsider.com/gary-...t%202012-05-15

[liv2ski]

Damn, today is the day for this topic to get blown up. Want lots of fancy charts with why the housing market is so fucked? Here you go: http://www.zerohedge.com/news/will-a...te-infographic

[meatdrink9]

Interesting read. Good advice for the general consumer towards the end. I do think renting does make more sense for a lot of people. Let's face it, no one works for one company and retires with a pension anymore. I think the workforce needs to be more mobile than it was in the past. Owning a home can be tough in that scenario. The costs to acquire and sell aren't cheap and if it's not appreciating the odds of coming out whole aren't good unless you hold it for a long while.

On the other hand. As an investor I look at all of that info and see opportunity. Lots of inventory means cheap acquisitions. That many homes vacant and out of supply (shadow inventory) means less competition when trying to lease my properties. I like RE more now than ever, but not for everyone. There are 900,000 houses out there with an owner that has never seen them in person, see's them as a liability, has no emotional attachment, and just wants to get out. That works for me. Gives me a few more years to build the portfolio. However, things are moving fast in my neck of the woods. We're under a 6-month inventory right now. Not sure how long this will last, but we're in another bidding war. The house will cash flow in the double digits. Hoping to win this one.

I do want to sell/flip a substantial commercial building later this year so these numbers don't bode well for playing seller, but they're great for building a rental empire.

[cramer]

being a bay area dweller, this cracked me up.
http://blog.sfgate.com/ontheblock/20...-bidding-wars/
this comment pretty much sums up the bay area, CA

1987 "Who would pay 200K for a house? Hahahahaha!"
1995 "Who would pay 350K for a house? Hahahahaha!"
2000 "Who would pay 450K for a house? Hahahahaha!"
2005 "Who would pay 600K for a house? Hahahahaha!"
2008 "I TOLD you SO!!! Hahahahahaha!"
2012 "Argh... I missed the boat in 2008."

And no, bennie, it wasnt my post, i caught it a few days afte the fact. i'm going to guess he bought a house when i did. hehe. Either way, Hahahahaha!

[GiBo]

Well, they finally did it. Wells Fargo has a HARP 2.0 program for poor SOB's like me that got fucked by the housing market through being a normal, responsible American. Before, my value to loan was so high (224%), I didn't qualify for any of the programs.

I'm getting refied to a 3.8% 30 year. It almost sounds too good to be true. No cost, easy, fast. We'll see. I'm hopeful, but until I see a mortgage statement, I not going to get my hopes up.

If it happens, this sure is a smart move for WF (not that they did it on their own). I was thinking that when my ARM adjusted in a year, if the payment went too high, I would have to start thinking about walking. If I get into this loan, I will be set up for the long term with a fairly low payment. I may even be able to keep it and rent it should I decide to move. Win/win.

Why didn't they just do this earlier?

And before anyone says, "Really? A responsible American takes out a 7 year interest only ARM!?" Yes. As I think I've explained here before, the WF loan guy was a co-worker/friend and he implored me to get this loan. He spent about an hour going over the numbers showing how much money I would save. I still said I wanted a 30yr fixed, but I finally gave in. "Besides," he says. "When interest rates go down, come see me and I'll get you into a fixed. Don't worry, values won't go down! I've been doing this for 20 years!"

Anyway, I'll be one less foreclosure. If they can get a lot of people into these, I think it can help stabilize the market.