Real Estate Crash thread

[dunfree]

Doesn't the suggestion to make loans at far below the market rate suggest a complete abandoning of underwriting standards? When I think of the government backing loans at below market rates it makes me thing of 1980's S&L crisis, 1980's Japan Bubble, 2000's Subprime, and the 1997 East Asian financial crisis. Are there examples of it actually working out you can think of or will US taxpayers just be on the hook (again.)

congrats on mingling a bunch of unrelated shit again. Figured out why Australia is nothing like the UK yet? Hint: it’s not interest rates, it’s the best paying sector of the economy being in bumfuckistan

[lowsparkco]

Credit Union rep just called me. We’ve been preapproved for an FHA first time home buyer loan for some time while shopping around. The credit union has immediately suspended the program until further notice. Bumps my rate from 6.5 to 7.5+. Pretty awesome.

Apply with a mortgage broker. CU’s often only underwrite “portfolio” products which means they keep the loan and won’t sell it to another mortgage company. Sounds like some kind of internal control was triggered, that’s pretty unusual. Sometimes CU’s are competitive (my home loan is with one of our local CU’s) - but not always. Don’t let one lender change your plan.

[liv2ski]

Huh? I never heard of a FTB program for FHA loans

[snapt]

Apply with a mortgage broker. CU’s often only underwrite “portfolio” products which means they keep the loan and won’t sell it to another mortgage company. Sounds like some kind of internal control was triggered, that’s pretty unusual. Sometimes CU’s are competitive (my home loan is with one of our local CU’s) - but not always. Don’t let one lender change your plan.

We applied with several brokers (MIL works in real estate) and even with the friends and family connection nobody could touch Idaho Central. Our mortgage person is awesome and has worked super close with our agent on all of our offers. The wife has some old dormant USAA and other federal accounts we’ll explore. I’m just more curious now what that mean economically for our lender to suddenly suspend a FTH program.

[Art Shirk]

Have a mortgage broker buddy who is clearly trying to close out a non abysmal Q4 by spamming his Facebook page with temporary buy down posts. Thought being, rate ratchets up each year and ultimately lands on the current rate in year 4 but you hope for a refi before then I guess. And I assume the seller basically “pays” for the buy down somehow, maybe dropping purchase price by a fraction that is rolled into this program for the buyers benefit but it gets the house sold in a tough market?

Curious what you dirt pimps know about this and if it is actually being used? Not in the market but was curious.

I’m getting timeshare math vibes from the guy.


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[Art Shirk]

By the way, anyone want to buy a timeshare? If you can’t afford to own all of something, why not buy 1/200th for 70% of the total cost?


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[liv2ski]

Timeshares, baàahaahaàa.

[The AD]

Can't remember the name but there was a reality show about Aussie RE auctions. Lots of anger and tears on the sidewalk.

I think an RE auction figured into an episode of Kath & Kim which is about my only point of reference for life in Australia.

[fastfred]

Have a mortgage broker buddy who is clearly trying to clos

I’m getting timeshare math vibes from the guy.


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The downward slide is starting

Advertising a 10k reduction in price is a joke when 5 years ago the house was worth/selling for 250k and today it's some how selling for 500k

Houses that need new roofs have dated leaky bathrooms and 40 year old kitchens aren't worth what people are asking.

Time for a correction

[liv2ski]

The downward slide is starting

Advertising a 10k reduction in price is a joke when 5 years ago the house was worth/selling for 250k and today it's some how selling for 500k

Houses that need new roofs have dated leaky bathrooms and 40 year old kitchens aren't worth what people are asking.

Time for a correction

Agreed, just look on Zillow at the estimated value in October 2020 and that is where stuff should be at the most or GTFO sellers.

[Ted Striker]

Have a mortgage broker buddy who is clearly trying to close out a non abysmal Q4 by spamming his Facebook page with temporary buy down posts. Thought being, rate ratchets up each year and ultimately lands on the current rate in year 4 but you hope for a refi before then I guess. And I assume the seller basically “pays” for the buy down somehow, maybe dropping purchase price by a fraction that is rolled into this program for the buyers benefit but it gets the house sold in a tough market?

Points only make sense if you plan on staying in the home until the break even point. Crystal balling where rates will be at x point in the future is a fool's errand, and broker buddy is fishing for fools.

Curious what you dirt pimps know about this and if it is actually being used? Not in the market but was curious.

"Elaine" is working for a buyer with a VA loan, and they've made two offers with points/credits at closing that were easily beaten by stronger conventional offers. Getting fancy never beats cash - of which there's still plenty out there.

[Toadman]

So, when does the correction happen? What month is the RE housing market going to correct?

I'm going to say January '25

Bragging rights for those that call it.

[Ted Striker]

Define correction.

[XXX-er]

Points only make sense if you plan on staying in the home until the break even point. Crystal balling where rates will be at x point in the future is a fool's errand, and broker buddy is fishing for fools.



"Elaine" is working for a buyer with a VA loan, and they've made two offers with points/credits at closing that were easily beaten by stronger conventional offers. Getting fancy never beats cash - of which there's still plenty out there.

As long as the buyer qualifys and the bank will lend them the money I have never understood what difference it makes if the funds come from a bank or from the buyer who has cash as long as the vendor gets paid at closing ?

[I Skied Bandini Mountain]

So, when does the correction happen? What month is the RE housing market going to correct?

It's going to take a lot of boomer empty nesters to finally move out of their 4 bd/3 bath homes, or die, to get prices moving in that direction. But it won't be a correction like 2008-12.

[Ted Striker]

As long as the buyer qualifys and the bank will lend them the money I have never understood what difference it makes if the funds come from a bank or from the buyer who has cash as long as the vendor gets paid at closing ?

For starters, people are weird. After that, the property needs to appraise at the selling price for the collateral side of the loan. When it comes up short someone needs to cough up some cash. Since everything is negotiable, the seller doesn't want to be in the position where the buyer needs a concession or the deal falls apart, and the property goes back on the market. Properties that return to market more than once raise people's suspicions and are harder to sell (kind of like blood in the water for sharks) and for some, time is money.

[fastfred]

It's a slow fade to stagnation

By Feb the market will start to feel it

The reality of higher taxes and higher ins costs are just starting to catch up

People have been riding the pig with helocs spent on consumer goods and over leveraging to buy multiple properties at inflated costs.

[liv2ski]

Define correction.

100% of the major metropolitan areas down 10%+ in the Chase Schiller index for the previous quarter and still headed down.

[XXX-er]

For starters, people are weird. After that, the property needs to appraise at the selling price for the collateral side of the loan. When it comes up short someone needs to cough up some cash. Since everything is negotiable, the seller doesn't want to be in the position where the buyer needs a concession or the deal falls apart, and the property goes back on the market. Properties that return to market more than once raise people's suspicions and are harder to sell (kind of like blood in the water for sharks) and for some, time is money.

well i won't argue people are wierd and of course the buyer may not qualify or sft especialy if its not a super clean deal but I am talking about a clean deal and every deal is different of course

Back when I was a coorporate animal I actualy did win a deal by a few thou where i wasn't the highest of I think 5 bids at once I didnt actualy have the money but it was a pretty clean deal

the agent said "he has a corporate transfer to Vangroovy, he is qualifyed SO you pick him ! "

[Ted Striker]

We won our first house even though the competing offer was higher. Without getting into the details, they just liked us better.

[XXX-er]

working for IBM in the 80's was like being made by the Mafia

except that instead of Guido telling me he was gona make an offer I couldn't refuse

this greasy little christian businessman made me the lifetime job offer

and i had no idea wtf until 30 yr later and it is still paying every month

[Toadman]

Define correction.

10% drop in the median price of a home.

[yeahman]

We won our first house even though the competing offer was higher. Without getting into the details, they just liked us better.

That's awesome, and I have often thought that when we sell I will happily take less $$ from a local family with kids rather than the largest cash offer from some out of state speculator trying to profit off Montana.

[lowsparkco]

Have a mortgage broker buddy who is clearly trying to close out a non abysmal Q4 by spamming his Facebook page with temporary buy down posts. Thought being, rate ratchets up each year and ultimately lands on the current rate in year 4 but you hope for a refi before then I guess. And I assume the seller basically “pays” for the buy down somehow, maybe dropping purchase price by a fraction that is rolled into this program for the buyers benefit but it gets the house sold in a tough market?

Curious what you dirt pimps know about this and if it is actually being used? Not in the market but was curious.

I’m getting timeshare math vibes from the guy.


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Yes, buy downs are being used a lot right now. You got the gist of it. They are different than just buying points. It’s not what I do so I’m not going to go into it in a lot of detail, but as I understand it, buying points the money is spent and ultimately the longer you hold the note no refi the better the value for you. With these buy downs the money is held and credited so the quicker the rate change the better. You can roll the funds from the buy down into a refinance assuming the right rate environment.

Probably not just an abysmal Q4, a lot of mortgage brokers and real estate agents already are or will be pursuing new careers in the near future.

[liv2ski]

With these buy downs the money is held and credited so the quicker the rate change the better. You can roll the funds from the buy down into a refinance assuming the right rate environment

Nope, I have never seen a refinanced buy down early payoff result in a partial credit.