Real Estate Crash thread

[Core Shot]

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.

Yep. Smells like 2009
Only with higher rates.

The one difference is higher labor and material costs.
I see a decent correction. But not all the way back. PSF costs are baked into the new cake.

[AdironRider]

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

[schuss]

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

Yep, I feel similar. Price regression in slow steps unless there's meaningful rate changes. I know in NH a lot of mountain properties are cutting prices back to semi sane levels. I want to say we still have 50-100k to go in the current rate environment, but that's entirely seat of the pants.

[I Skied Bandini Mountain]

Interest rates need to come down, not just for first time buyers, but to get boomers out of their empty nests.

Magnifying the problem in California are boomers living in homes with artificially low property taxes due to prop 13.

Unless there's a way to get them out of their 4/3's, it's just a waiting game until they die off.

[skaredshtles]

Interest rates need to come down, not just for first time buyers, but to get boomers out of their empty nests.

I'm not sure how lower interest rates would be an incentive for Boomers to sell?

[XXX-er]

The great 08 correction got up here eventualy so the last local down turn was 2010 , even tho we did not experiance anywhere near the problems becuz Canadian banks were not allowed to deregulate,
it was the sleeping next to the elephant when it shit the bed and i want to thank y'all cuz i could get back in the RE on the low cycle

[I Skied Bandini Mountain]

I'm not sure how lower interest rates would be an incentive for Boomers to sell?

They're sitting in homes with low interest rate mortgages, shopping for a new place with 7.5% rates on top of inflated prices isn't appetizing. Even with huge amounts of equity, empty nesters are holding back.

[I Skied Bandini Mountain]

We're a good case of reference. We bought this place in 2012 at the absolute bottom, with a ridiculously low rate. We're now sitting on a mostly empty house with a shit ton of equity and low monthly mortgage payments, but why the hell would we want to sell, and where are we going to go that isn't overpriced to hell and with a 7+% note?

But we're not going to hold out for long, I'm ready to blow this popsicle stand. I'm tired of working on old houses and we're just looking for a place to land once we get my elderly folks situated.

[Dantheman]

people actually have to qualify for their loans these days.

And, AFAIK, today's financial markets aren't flooded with synthetic CDOs.

[skaredshtles]

They're sitting in homes with low interest rate mortgages, shopping for a new place with 7.5% rates on top of inflated prices isn't appetizing. Even with huge amounts of equity, empty nesters are holding back.

I just assumed they would be mortgage-free, like me (though I'm *not* a Boomer), and purchasing something smaller with cash.

[dunfree]

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

are there many meh ski areas left whos appeal isn’t based on proximity? There’s a dozen or so premium resorts in the us, and a bunch of other places that exist because a 2-5hr drive is nicer for people than a flight, and those places depend on the strength of their source basins economy.

[AdironRider]

Cough .... Grand Targhee and Teton Valley .... Cough

[neckdeep]

No way you see a correction like 08-11 again, people actually have to qualify for their loans these days.

I envision a return to the mean so to speak. Location will matter again. The 2nd rate towns with meh school districts (or meh ski areas) will go back to meh prices, but the good stuff will continue to demand a premium just like it always has.

Driggs isn't even a 2nd rate town with a meh school district. It's a 4th rate town with a momo controlled school district and a resort that's less than meh on the 75-100 days when there's no fresh powder.

Yet the insanity continues....probably 50x more STRs available than LTRs

[dunfree]

Driggs is overrated affluenza has entered the chat, for whatever it is, and how expensive it is, there’s a shot ton more shit below it.

[lowsparkco]

I’d add Bend and Bachelor to that list.

A bright spot in a desert of lift access skiing.

Probably at this point, most would say unfortunately way too close to PDX.

[MCS5280]

And, AFAIK, today's financial markets aren't flooded with synthetic CDOs.

All the big banks are performing "synthetic risk transfers" these days

[oldnew_guy]

No one in the wider world seemed to know shit about CDO's and other '08 bank shenanigans until after the fact.

[dunfree]

No one in the wider world seemed to know shit about CDO's and other '08 bank shenanigans until after the fact.

The economist/the ft/the wsj had semi regular articles pre crash, this is from 2004 https://www.economist.com/finance-an...3/russian-doll

[Toadman]

Cough .... Grand Targhee and Teton Valley .... Cough

COVID?

[Kevo]

It's a 4th rate town with a momo controlled school district and a resort that's less than meh on the 75-100 days when there's no fresh powder.

Yet the insanity continues....probably 50x more STRs available than LTRs

Agreed about STR insanity. Some people are going to go cash flow negative and sell at a loss if we have a bad snow year or when the economy slows.

The school district is no longer controlled by the LDS after the election yesterday and LDS families are actively being pushed out of the area. 1950s family structure with a single income earner and 6 kids doesn't work, especially not in a HCOL mountain town. I don't believe a single LDS candidate won in any of the local elections yesterday except for the mayor of Tetonia. The mormon families who lived on my street 3 years ago have now left the area. Will more leave now that the school district isn't a lock?

Most importantly, the US has added 34 million people since 2008. There are zero additional ski towns and there will probably never be another major ski resort developed in the US.

I have a very different opinion of the skiing here, but uh...yeah....it's meh. Nothing to see...

[Mani_UT]

They're sitting in homes with low interest rate mortgages, shopping for a new place with 7.5% rates on top of inflated prices isn't appetizing. Even with huge amounts of equity, empty nesters are holding back.

Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

[BCMtnHound]

Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

In talking with my octogenarian father and his cohorts, most are just too old accept the reality of today’s prices despite their relative property wealth Even sitting on million dollar properties (debt free), they see the cost of a new apartment of townhouse and say the market is crazy high and they won’t pay it. Not that their real estate is in the range of most new families anyhow, but their responses makes me smile and think of the ‘back in my day a gallon of milk cost a nickel’ kind of statements.

[Dantheman]

Surely many boomers have loans paid off and can pay cash as they downsize ?
No?

Often people resist leaving the home where all their memories reside even if it's way too much house for them now. Also, in CA even if they can pay cash for a new, smaller place they are likely looking at a hefty increase in their property tax bill.

[skaredshtles]

Often people resist leaving the home where all their memories reside even if it's way too much house for them now. Also, in CA even if they can pay cash for a new, smaller place they are likely looking at a hefty increase in their property tax bill.

Yeah - that CA tax thing they did has really created all kinds of unintended consequences...

FAFO, they say.

[LHutz Esq]

We're a good case of reference. We bought this place in 2012 at the absolute bottom, with a ridiculously low rate. We're now sitting on a mostly empty house with a shit ton of equity and low monthly mortgage payments, but why the hell would we want to sell, and where are we going to go that isn't overpriced to hell and with a 7+% note?

But we're not going to hold out for long, I'm ready to blow this popsicle stand. I'm tired of working on old houses and we're just looking for a place to land once we get my elderly folks situated.

I am in somewhat the same boat.

House basically paid off, thinking of moving to a little land. However, everything below us in price is a complete shit hole and everything above is 7.5%.

Can't really stomach either.

So I will sit and feel lucky and smug in my foresight to be born at the right time. (Well that and smart enough to have ignored everyone that told me the market was overpriced in 2003- and there were a lot of them).