patrick.net

Eman says

I sense something really bad is going to happen. Just don’t know when or how, and which market is going to crack first.

There's no way it isn't.

For all the fantasies of endless waves of Chinese and South American and Russian cartel operators buying hundreds of thousands of suburban SFHs and middling townhomes, at the bottom is housing affordability, which has nearly doubled since COVID while wages clearly did not.

Miami Condos, LA pied-a-tierres, sure. But the Villages? The Suburbs of Boise and Pigeon Forge and Asheville full of Russian mafiosos, Venezuelan Cartel Members, and CCP businessmen? No.

Whatever causes the downward wave, I'm standing by my massive demographic shift theory.

AD says

I still think that the 30 year mortgage rate will steady around 5.5% in 2024, as inflation continues to subside. The 30 yr mortgage rate typically is 1.5% greater than the 10 Year Treasury and the 10 Year Treasury is 1.5% greater than annual inflation.

Notice annual inflation which is accepted as PCE is steadying around 2.5%. It just has to average 2.5% or less for at least 6 consecutive months to get the mortgage industry to adjust and lower the mortgage rate to 5.5%.

The 10 year Treasury rate is what the fucking bond market fucking sez it is, nothing more.

That 'rule' you cite is just a coincidence in a world were Boomers were in their mass peak earning and saving years instead of mass retirement drawdown years. And the government is increasing the federal debt by $1 trillion every 100 DAYS now.

Plus, the Inflation rate from the government is bullshiit.

Eman says

Well, I’ve been on this site just shy of 1.5 decades. This site started during the previous housing bubble. Those, who should have bought but didn’t, that’s 1.5 decades of loss opportunity. Hope they use the “saved money” and invest wisely.

At this point, it seems like it’s a 2.0 housing bubble, but who knows. Unless it’s an extremely compelling deal, I’m happy sitting on my hands and doing nothing.

I've been on this site since watching a video of Patrick on 20/20 about the housing bubble and learning of his book titled Housing Trap. It was around 2010 but I think Patrick was on 20/20 in 2007.

It has to do with housing affordability ultimately, whereas housing standards are maintained (no more than 1 family under 1 roof) and median housing costs are no more than 38% of household income.

And it still applies to San Fran Bay Area that's very nuanced since the median salary there is skewed toward the tech industry.

.

Eman says

AmericanKulak says

The recent Bubble blew up faster than the 2000s Bubble.

There's too much money chasing too few opportunities because modern growth is predictated on easy money and flattened wages.

Because savings and dividends are depreciated, and cheap money and stock growth celebrated, we're in the situation we're in.

I sense something really bad is going to happen. Just don’t know when or how, and which market is going to crack first.

Not going to happen until after the election. Mainstream media will lie or black out stories in order to protect Biden.

What sucks for Biden is there is a lot of time (about 6 months at least) for shit to get real bad no matter how much the mainstream media spins it such as blames Republicans or Putin, or just blacks it out (i.e., ignores it).

.

I just bought a house and now jobless
https://www.reddit.com/r/FirstTimeHomeBuyer/comments/1b6rely/i_just_bought_a_house_and_now_jobless/

Further discussion here (with deleted info from the embarrassed OP in the original post included:
https://old.reddit.com/r/FirstTimeHomeBuyer/comments/1b750nw/when_stretching_too_far_to_own_a_home_goes_bad/

To summarize and some of this doesn't make a whole lot of sense, but 50 year old guy buys a house 500k and some change, $4700 payment. Isn't a tech worker but works in tech ie marketing, on a 150k a year contract. Buys house, gets laid off, not eligible for unemployment as he's a contract worker, tech jobs are hard to come by and many of these overinflated salaries are a thing of the past. Apparently rents are low compared to home prices so renting out the home won't come close to covering the mortgage, apparently house is a 2/1 fixer upper. Even if he gets a roomate he's looking at getting $1500 tops, probably $1100 more likely. Trying to figure out what to do.

So let's look at the situation, stretches way too far to own this house but says its because he's in a HCOL area. Has only like a 2 month emergency fund, no 401k and a small IRA. Initially said selling would walk away with 15k, then break even, then acknowledged would probably have to pay money to walk away. When people tell him he can't afford the house find a way to get out of it he keeps talking about how he can afford it later this year when rates come down, sounds like even if everything went perfect he would have needed rates come down to afford this and that's if no repairs come up, no job loss, no property tax or insurance hike and I'd imagine so long as other living expenses i.e. - food, car insurance, etc .don't go up either. He's really stuck on the idea everyone is wrong he can afford the house, once rates come down, sounds like a realtor got that into his head.

https://www.reddit.com/r/debtfree/comments/1b6tmw6/80k_in_debt_and_drowning/

80k in Debt and drowning

My husband and I are in 80K of credit card debt. I am just not sure what to do at this point. The worst part is, we bought a house two years ago with no credit card debt and only a car payment.

zzyzzx says

https://www.reddit.com/r/debtfree/comments/1b6tmw6/80k_in_debt_and_drowning/

80k in Debt and drowning

My husband and I are in 80K of credit card debt. I am just not sure what to do at this point. The worst part is, we bought a house two years ago with no credit card debt and only a car payment.

CC debt is scary… 10-30% interest. I guess people did it out of desperation and hoped they could catch up, but the debt and interest spiraled out of control. So unfortunate.

zzyzzx says

https://www.reddit.com/r/debtfree/comments/1b6tmw6/80k_in_debt_and_drowning/

80k in Debt and drowning

My husband and I are in 80K of credit card debt. I am just not sure what to do at this point. The worst part is, we bought a house two years ago with no credit card debt and only a car payment.

Since you already have the loan for the house, stop paying the CC. If possible, make a year's worth of car payments on the CC and THEN stop paying the CC.

zzyzzx says

Has only like a 2 month emergency fund, no 401k and a small IRA. Initially said selling would walk away with 15k, then break even, then acknowledged would probably have to pay money to walk away. When people tell him he can't afford the house find a way to get out of it he keeps talking about how he can afford it later this year when rates come down, sounds like even if everything went perfect he would have needed rates come down to afford this and that's if no repairs come up, no job loss, no property tax or insurance hike and I'd imagine so long as other living expenses i.e. - food, car insurance, etc .don't go up either.

It's called insolvency. He literally can walk away and not pay a dime if there's a job loss in the year or two and live free. I have a decade of this from the housing crash. This is not legal advice, but you don't have to pay. Especially with a job loss. It will take a year plus to foreclose. If you short sell you could drag it out even longer.

I don't think some of you guys know what us brokers were doing. It's hard to explain and complicated. To make it simple. Sign a listing at $100k on a short sale. Mortgage is $200k. Part of the agreement is you are owner. All legal documents filed. Sell it for $180k and you get the $80k and the owner gets out of their debt.

Mind you this wasn't my office and this did get invested for some reason by the FBI. It was 100% legal at the time. I really don't think anyone gets what was actually going on. The managing broker made millions doing this. I was just using little numbers. And was still getting commissions on top of it. I've been out of the business and might not be explaining it the best, but it was pretty brilliant.

https://www.redfin.com/news/housing-market-update-new-listings-increase-pending-sales-decline/

Biggest Inventory Uptick In Nearly 3 Years, But Buyers Show Restraint as Rates Rise

New listings of U.S. homes for sale rose 13% year over year during the four weeks ending February 25, the biggest increase in nearly three years. Total inventory is also improving.

zzyzzx says

No Bay Area, San Jose or San Francisco? Why being racist like that? 😂

zzyzzx says

I think it was Richter saying that double tops have never before happened in the Case/Shiller Index.

Inventory climbing back to normal.



Who will buy all these properties at 7% interest, with homeowner's skyrocketing, property tax skyrocketing (Homestead exemption doesn't millage rates and only protects from increases when CPI less than 3%), and you can rent for much less?

The Russian Mob or CCP Businessmen or Venezuelan Gangsters? They're lining up to buy SFH in PSL? Townhomes outside Jax? 55+ Manufactured Homes in Springhill? Villages retirement ranches? I think not. Investors? Rents dropped almost 10% last year in Florida.

zzyzzx says

Oops, too late. Haha

zzyzzx says

Don't worry! The Housing Experrs of PatNet insist your rate will fall.

zzyzzx says

It will go down to ~5%! (Not me, someone else here believes that)

zzyzzx says

Reeeeeeeeeeeeeee-- ...version to the mean.

We're probably in the "things are back to normal" part of the double peak.

Heh.

It's different this time.

Permanent Plateau Realtors say
But inventory builds each way
Climbs the wall of worry every day

House Prices are up where they don't belong
Easy Money inflated, COVID demand related
Housing costs up where it don't belong
Reversion to mean is far below
30-year rates so high, where jetstreams blow

Time goes by
Rates still high
Record Price Demands
While Inventory Expands

Prices are up where they don't belong
As rental rates get smashed, cry "but Investors with cash!"
Costs up where it don't belong
Agents need so much cope,
Rates will drop is their dope.

https://www.youtube.com/watch?v=7cOaUTHQV7g

Eman says

No Bay Area, San Jose or San Francisco?

Return to normal before fear, capitulation, and despair?

Bring on the FUD!

All you cats are living in different realities. You're in FL, CA or any coastal areas. If you guys drop it drags down the national numbers. That's not the reality for much of the country. Or you're experiencing your first exodus of population. Been there done that in IL. We're extremely stable even though I hate the governor.

Cities are toast as millennials move out from party town and start moving right and forming families. The $500k 2/2 bachelor pads are going to plummet. The floor is high though as Boomers will die and/or give the house to the kids. I don't have a care in my location. I'm up $200k in a decade in a low cost of living area.

EBGuy says

Eman says

No Bay Area, San Jose or San Francisco?

Return to normal before fear, capitulation, and despair?

@EBGuy,

What do you think? Say the HPI for our market is currently at 340. Will it come down to 260-270, or will it come down to 200-220?

WookieMan says

The floor is high though as Boomers will die and/or give the house to the kids.

Who will rent it out and depress rents, or all be selling them about the same time.

Amber and Dylan living and working in SFBA or Asheville don't want to bothered maintaining a house outside of Phoenix or Tampa. And since it's one property, not really worth the management costs.

If they aren't stuck and don't have kids, what are they going to do with a 4/2 in The Villages or Goodyear?

Sherry reeee bay ay bee! C'mon Dylan, let's go! More 50s and 60s music at the La Boca Vista Community Center!



https://www.youtube.com/watch?v=hQhqsopzJf8

Florida housing inventory back up to pre COVID levels
https://www.floridarealtors.org/tools-research/reports/florida-market-reports

This tool provided by Florida Realtors® gives up to date data on the market. Both SFH and Townhouses/condos months of supply on inventory has now eclipsed the levels seen on Jan 2020.

SFH at 3.8 months currently, 3.4 months 4 years ago.

-Townhouse/condos at 5.8 months currently, 5.5 months Jan 2020.

Prices still high, foreclosures are low, but the inventory has been increasing rapidly.

Lots of supply currently getting built all over the state that has yet to come to the market.

Instead of "months of supply", it would be better if they just stated the number of properties for sale.

Today there are much fewer transactions than back 4 years ago, so months supply is misleading.

Misc says

Instead of "months of supply", it would be better if they just stated the number of properties for sale.

Today there are much fewer transactions than back 4 years ago, so months supply is misleading.

I think it's because months supply is a better measure of if it's a buyers market or a sellers market.

AmericanKulak says

More 50s and 60s music at the La Boca Vista Community Center!

Rocket to shut down origination channel for real estate and insurance agents.

Rocket Companies has announced its decision to discontinue Rocket Pro Originate, a key mortgage origination platform for real estate agents and financial professionals, aiming to pivot towards enhancing support for mortgage brokers. This move, scheduled for completion by June 2024, reflects a strategic adjustment in Rocket’s business model to prioritize growth and resource optimization in the housing market.

https://assetmarketnews.com/brokers/rocket-companies-phases-out-rocket-pro-originate-refocuses-on-mortgage-broker-support/

https://www.redfin.com/news/florida-condo-prices-dropping/

Florida’s Condo Prices Are Falling As Cost of Insurance and HOA Fees Skyrocket

zzyzzx says

Florida’s Condo Prices Are Falling As Cost of Insurance and HOA Fees Skyrocket

Nominal to profile. Every 10-15 years...


https://www.youtube.com/watch?v=gPgpYux8HJQ

AmericanKulak says

Florida’s Condo Prices Are Falling As Cost of Insurance and HOA Fees Skyrocket

Our Panama City Beach townhome HOA master insurance is holding steady from 2022 to 2024. It went up from $50,000 in 2018 to $230,000 in 2022.

It is now around $250,000 in 2024.

The insurance company told the HOA board of directors there are more competitors coming to the Florida insurance market and they expect no more +20% increases per year.

.

FL Condo Act now forces boards to inspect and repair or reserve for known future repairs.

The fallout:

American Kulak, as far as Florida boomer demographics, is that because the older boomers are dying off in Florida and you see that much of a cumulative drop by 2035 ?

Look at south Florida like Boca Raton with the elderly Jewish population originally from the northeast...they were spotlighted in the November 2000 as far as making mistakes with the butterfly ballots

one theory why Trump did well in 2016 and 2020 in Palm Beach County was that a lot of those Jewish people died off and were not replaced with liberal voters

.

Insurance AINT going down in Florida, and here's why:

Citizens Property Insurance Corp., Florida’s residual but still-largest property insurer, has posted new information about when and where flood insurance is required for policyholders.

The Florida Legislature last year approved Senate Bill 2A, making big changes to laws governing claims litigation and requiring most Citizens’ policyholders to also obtain flood insurance within three years. The idea, supporters of the bill said, was to help push homeowners back to the primary market and help protect Citizens from legal disputes over wind-versus-water damage.

This year, lawmakers revised the law slightly to exclude policyholders who own condominiums on upper floors.

The bulletin from Citizens, posted Aug. 22, explains the phase-in of the flood requirement:

Starting in January 2024, all structures with a replacement value of $600,000 must obtain flood insurance.
The value requirement of the structure drops until 2027, when all Citizens-covered structures, regardless of value, must maintain flood coverage.
The insurer said it will soon send more information to agents, including a list of their affected policies.

https://www.insurancejournal.com/news/southeast/2023/08/24/737718.htm

This will include structures NOT in a Flood Plain.

AmericanKulak says

FL Condo Act now forces boards to inspect and repair or reserve for known future repairs.

yeah well think about what happened when that Surfside (North Miami Beach) condo parking structure collapsed resulting in at least 80 deaths

one thing that surprises me is that the condo's master insurance company did not send out inspectors to check the condition of that building and threaten to cancel the policy based on their inspections

We lived in a 2 story condo building at Bay Point in Panama City Beach and the master insurance company would walk and inspect the buildings every year doing everything from checking the roofs from the inside attics to checking fire extinguisher inspection tags .... they forced the HOA to fix a sidewalk that was being lifted by tree roots

By the way, as a completely clean driver, my FL auto went up almost 20% last year, too. I shopped around and I have the best rate by almost $50/year.