patrick.net

https://www.reddit.com/r/RealEstate/comments/ybj6me/stressed_seller_looking_for_advice/

Stressed seller looking for advice

zzyzzx says

Stressed seller looking for advice

Isn't that called 'lowering your asking price' to obtain instant relief?

It's interesting in California watching the die hards, clinging to their fiat equities, try to command imaginary prices while stubbornly holding on to their swanning delusions of brilliance and wealth. The wailing and gnashing of teeth this winter will be legendary.

Real estate hoarders will be putting their stuff on the market, trying to capture an equity chair when the music stop. Recent buyers will be going into default and handing the keys back as they pay inflated taxes on negative valued properties that swallowed up their down payments. Happened before, will happen again.

zzyzzx says

I live in a really rural area about 1.5 hours outside Chicago. Not a nice neighborhood but not bad. Typical smaller town vibes. Nothing to do. Kinda hickish.

Nope. No way that person bought a house for $330k 90 minutes outside of Chicago. Yes there are big houses and acreage, but no, not a 1,600sf ranch for $340k. That's 250-280k all day. Even new construction. Once you're past 50 miles of Chicago prices plummet. North of Chicago into Wisconsin and South to Indiana are the only exceptions.

Where I'm at $350k gets you a 4/3.1 with a 3 car garage. Probably 3,200sf. Sure taxes are a cunt, but price wise it's not what this guy is talking about. He bought a hill billy McMansion if he paid $330k. That's on him.

We were close 6 years ago to buying 14 acres with a 4k sq ft. home with walkout basement on a pond. Gated. Tennis court. $650k list. I regret not doing it. That reddit dude is full of shit unless it's a legit ghetto rural area and overpaid. And that's 48 miles from Chicago, or 50-60 minutes.

I just got back from photographing a 5,000 square foot home in a very nice subdivision. The Realtor told me the seller is going to get $250,000 less for the home than the same home in the same neighborhood sold for 6 months ago. About a 20% loss. This is in Northern Virginia. The Realtor said she told them to hurry and sell before the spring because in the spring prices will be even lower.

GNL says

The Realtor said she told them to hurry and sell before the spring because in the spring prices will be even lower.

This could be a seller's agent trick in order to try to make a quick sale now. Or the seller's agent sees the 30 year mortgage rate increasing from around 6.5% to 8.5%. The 30 year rate historically has been about 2.25% above the Fed Funds rate.

But the mortgage rates are being set based on anticipation of higher rates, so even if the Fed Funds rate is at 5% at end of this year, the 30 year mortgage rate may reach 8%.

This is what happens when there is a lot of flux or lack of steadiness with the Fed Funds rate such as with these 0.75% increases every few months.
.

Married With Children TV show reference:

ad says

This is what happens when there is a lot of flux or lack of steadiness with the Fed Funds rate such as with these 0.75% increases every few months.

“We are holding to our view that this is a spike right now, driven by financial-market dislocation, heightened level of volatility in the market and this global slowdown we’re about to experience, the likelihood of recession in the U.S. will begin to pull this number,” Fratantoni (of the Mortgage Bankers Association) said.

The Mortgage Bankers Association predicts a 5.3% rate for 30 yr mortgage at the end of 2023.

zzyzzx says

Detroit and the US are more overvalued than SF, SD, NY and LA? 😂😂😂

I'm loving the PANIC.

According to the Case-Schiller, prices are higher now than before financial crisis, by a LOT


YEEHAH! Cash on the sidelines looking for cheap, cheap, cheap. Buy when there is blood on the streets!

I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.

If they get serious about inflation, I think rates could bob back up to 6 to 8 percent. That's not so bad. All my mortgages were around that before I paid them off and I thought those were good rates at the time.

Even NAR can't put lipstick on the pig.


"B-b-but, prices aren't coming down"

Well yeah, because sellers need to borrow at 7%+ to buy the next property and they need that $300k sale to make the math work.

They'll either sit on it and take $200k in two years, or be smart and drop it 10% right now.

Ceffer says

I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.

If they get serious about inflation, I think rates could bob back up to 6 to 8 percent. That's not so bad. All my mortgages were around that before I paid them off and I thought those were good rates at the time.

It depends on the principal lol. Back then houses were cheaper, glad we locked in 3%.

Nothing that 6 million more illegals can't cure.

Misc says

Nothing that 6 million more illegals can't cure.

Yeah, I've seen in the Florida panhandle a couple with 2 daughters who seem recent arrivals from Central America renting a townhome in my HOA. I think both work and easily make $17 an hour each for a combined $34 an hour for household. Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

They probably earn at least $58,000 a year. Their rent is about $1600 a month for a 2 bedroom, 2.5 bath townhome.

.

mell says

I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.

That is what I am thinking as far as liquidity and not seeing a drop off in sales volume.

The seller's agents could convince enough (reasonable) owners to drop the prices 17% (from 2021 peak levels) over 4 to 6 months with steady price drops.

I think the Fed is eyeing at least a 17 to 20% drop in house prices. Prices should fall 10% for every 1% increase in the 30 year mortgage rate.

I just don't see the Nat'l Assoc of Realtors (NAR) (and the Federal Reserve) siting idly during a 25% drop cause then buyers will just remain on sidelines patiently for a 35% to 45% drop as housing may go into a deflation death spiral.

.

.

The household and small business sectors of the economy are in surprisingly good shape. They have learned to deal with government fuckery. They are sitting on about $17 trillion in cash (not stocks or bonds or bitcoin...cash!). There is a record low number of houses being listed for sale. The prices may be more sticky than usual because everyone thinks the Fed will lower rates again when some other sector blows up.

There are trillions of dollars in ponzi schemes outside of housing. The Fed will panic when they start to collapse. At least that's what a lot of homeowners think.

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50. Generally no one wants those jobs and if in a booming area and booming tourist area those people are getting paid more than you'd think. Basically Americans don't like those jobs and therefore a shortage of labor and wages go up for tasks that need to be done.

Outside of STEM and trade/union schools, college as we know it is dead. And until American born citizens realize this they're going to be living with mom and dad for a long time. That also is another factor in housing. If the kids ain't buying and not having kids, there just simply is lower demand for builders to build. Now factor in interest rates.

Prices will drop/stall, but we're not going to see a housing crash like we did 15 years ago. There's significantly less movement and kids, hell adults are staying with mom and dad more. As long as mom and dad aren't paying for everything besides the house, I don't see that as being awful. We stayed with my parents a bit after college. Paid a small rent. Split the utilities. We had our own cell phones. Car payments. Paid our own insurance. Student loans.

My MIL on the other hand still pays car insurance, cell phone, health insurance for 3 of my sister in laws. All are over 30. The 4th is on government insurance because she's a single mom, not really we raise my nephew, and food stamps. Until parents cut the cord so to speak, I don't think younger people say 25-32 are buying houses any time soon. Therefore less building, parents staying in their homes with low mortgage rate (until now) so there's a high floor to RE prices if that makes sense, or at least how I analyze it.

Can't remember if is was ad or someone else above, but when interest rate rise, people are going to stay put. Factor in the young people staying home, I just don't see housing prices dropping all that much except for people that absolutely HAVE to buy and sell. And I'd venture to guess a lot of that is corporate relocations anyway. It would take a big job loss situation for people to not make payments and foreclose.

WookieMan says

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50.

Maybe I should quite my job and clean houses...

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/ycgrjg/my_homebuying_adventure_has_sadly_come_to_an_end/

My homebuying adventure has sadly come to an end.

Unfortunately, it is with great sadness I am forced to end my homebuying adventure. I started back in April 2021, putting 5%/$40,000 down as a deposit on a to be constructed new home, supposed to be finished in June 2022. I had been saving for years for this moment - and here it was, at long last. I thought I was smart - didn't have to deal with a realtor, didn't have to worry about being outbid, didn't have to worry about a home inspection or buying a fixer-upper.

I rate locked for 240 days back in January 2022 at 2.85%. A steal. . . my current rent for a 2 bed 2 bath was $2,750. Here was my chance to own a 3 bed 3 bath brand new townhome - own, not rent for a monthly mortgage payment of $3,060.

Here's where things went sideways. I thought 240 days would enough for a rate lock. Construction was to be done by June 2022 - I even accounted for delays in construction, so 240 days would put me into September, 3 months past the expected completion. As the date crept closer, the progress on the house slowed down. June completion wasn't happening. Neither was July. Or August. . . . and so on and so forth. Simultaneously, rates kept rising. 3%. . . 4%. . . 5% . . .

Around July, I received notice from the builder that they had encountered substantial delays and the close date would now be November. Panicked, I called my lender and asked about a rate lock extension. By now, rates were around 6.5%. We were able to negotiate a rate lock extension starting at the expiry of the original rate lock - 60 days past, which would take me into November. The rate lock cost me an additional $10,000 but to save 3.65% on my mortgage was worth it.

And then, tragedy. Again, delays from the builder. Estimated completion is now February 2023 - 9 months past when it was supposed to be complete. I asked my lender is there any option to do an additional extension - to which they declined. I am now stuck at shopping around for rates. No one is willing to extend a rate to February, let alone any longer. Rates are currently at 7.5%, who knows what whenever this thing is finished. At 7.5%, my monthly payment would be $5,200 - $2,200 more than it would have been if the builder had finished on time. Something that would demolish my monthly budget.

And so, without a lender, without any recourse, and most importantly, without a home, I am forced to end my homebuying adventure and back out of the contract. The builder is claiming "pandemic delays", which allows them to unilaterally extend the closing date without recourse. They will pocket my hard-earned deposit money, and I will return to my apartment, defeated, and begin saving once more, minus the $40,000 I wasted on a gamble.

If you start your own service you can make good money and expense a lot of bull shit that you'd have to pay for a normal W-2 job. Gas, 50% of meals, supplies for cleaning you can use on your own home. Besides the labor it's probably not a bad gig if you really think about it.

My friends wife started a cleaning service in IL and then they moved down to FL. White American female. I think she's pulling $80k/yr in FL cleaning houses. Generally the homeowner leaves or you're doing vacation rentals, so you only have to deal with the initial sale and it's on repeat. She could scale and hire more cleaners and make even more.

Only thing that would creep me out, or gross me out is vacation rentals with cum filled towels, body hair, etc. I don't think I could do that everyday. Most homeowner cleanings they keep that shit clean by themselves as you eventually get to know your cleaner and they you. So you tend to keep the gross stuff out of site.

ad says

Prices should fall 10% for every 1% increase in the 30 year mortgage rate.

At this point that means a 30% decline then.

WookieMan says

you tend to keep the gross stuff out of site.

Ha!

A clever double-entendre by you WookieMan, "out of site / out of sight".

I wish I had your wit!

GNL says

At this point that means a 30% decline then.

Don't you mean 40%?

1337irr says

WookieMan says

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50.

Maybe I should quite my job and clean houses...

My cleaner in Maui makes about $140/hour off my rental. Cleans it in about an hour and does a damn good job too. That's if you exclude the fact that he washes the sheets and towels offsite at his place. He shows up with cleans and swaps them out.

zzyzzx says

GNL says

At this point that means a 30% decline then.

Don't you mean 40%?

But @ad keeps telling me we will only see 5.5% rates and a drop of only 17%.

GNL says

But @ad keeps telling me we will only see 5.5% rates and a drop of only 17%.

GNL, I see about a 20% drop in the Florida panhandle from current levels, and prices have dropped here in my townhome HOA (~2 miles from beach) about 7%. I see rates stabilizing around 5.5% to 6% once inflation starts to steady between 3% and 5% and the Fed Funds rate reaches 4.75%. I think this is plausible around early summer of next year.

Very Respectfully, AD

https://www.dailymail.co.uk/news/article-11350803/Americas-housing-prices-facing-stunning-downfall-West-Coast-facing-fastest-drops.html

America's housing prices are facing a stunning downfall - with the West Coast facing the fastest drops of up to 10% in cities like San Jose and San Francisco: Experts say the trend will soon spread to the Northeast
A new study from the American Enterprise Institute shows that stunning price drops in the housing market are impacting the West Coast
Cities such as San Francisco and San Jose have seen housing price drops over more than eight percent
The study concludes that the same price drops are likely to impact the east coast as higher unemployment and recession loom
Earlier this month, experts concluded in a Bloomberg study that recession was 100 percent likely in the next 12 months

Homeless don't surf!

https://finance.yahoo.com/news/mortgage-rates-top-7-percent-140004228.html

Mortgage rates top 7% for first time since April 2002

Mortgage rates surpassed 7% for the first time since April 2002, adding more reason for price-struck homebuyers to stay on the sidelines.

The rate on the average 30-year fixed mortgage hit 7.08%, up from 6.94% the week prior, according to Freddie Mac.

https://www.cbsnews.com/news/house-price-fall-drop-2023-mortgages/

U.S. home prices could fall as much as 20% next year

When you see it....

A northern Virginia broker just told me his prediction is 14% rates. He's already seen a 9% close.

GNL says

A northern Virginia broker just told me his prediction is 14% rates.

14% was the going rate in 1982.

GNL says

A northern Virginia broker just told me his prediction is 14% rates. He's already seen a 9% close

The 30 year mortgage rates are at 7% , and the highest they've been in at least 15 years.

https://www.freddiemac.com/pmms

Mortgage rates should go down or flat-line when inflation drops notice they peaked in 1981 and steadily dropped as inflation steadily declined.

The 30 year mortgage rates all time high was at 16% in 1981.

....

ad says

The 30 year mortgage rates all time high was at 16% in 1981.

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

GNL says

Well then, I'm convinced. It happened before so that means it can't happen again, correct? Is that what you're saying?

I don't think we'll get hyperinflation like back then. Look at how inflation peaked recently around 9.2% this June. It has trended downward to 8.2% this September.

Banks will charge more interest for loans ranging from mortgages to car loans to home equity loans when inflation increases.

They have to in order to make enough money from the loans as far as the spread or difference between inflation and the interest rate, or more so between the Fed Funds rate and the interest rate of the loan.

Its just that since 1981 to present day, inflation has trended down. We are in a new environment not seen since the early 1980's.

.

https://www.reddit.com/r/REBubble/comments/yfcyt0/realtorcom_app_removed_historical_housing_prices/

Realtor.com App Removed Historical Housing Prices

It seems Zillow is hiding information as well.

It's just like when one of them started hiding crime stats.