patrick.net

BayArea says

Never in my wildest dreams did I think that rates would go from under 3% to nearly 7% and prices would hold here in the Bay Area. But here we are.

This makes 2 of us. Simply mind boggling.

ad says

No desperate sellers... home builders are careful to not add a glut of housing ...

Examine home building starts to see if there is an uptick ...

Well see if the 30 year mortgage rate settles around 5.5% next year ... from what I have observed peak housing price was set early 2022 when the 30 year rate was around 4% ...

typically for every 1% increase in the 30 year mortgage rate, there is a 10% decrease in home price...

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Maybe 4% was nationwide mortgage rate? In the Bay Area, it was 3% or below in late 2021 to early 2022.

I’m still surprised housing prices hold up so well with a good 350 basis points increase. Amazing.

Granted, I'm not in CA but I refied in 2020. Have a sub 3% 30 yr fixed. Not planning on moving, but even if something came up that I had to move I wouldn't sell; With what I pay oer month, I can rent it out and have it be cash flow positive.

I think that the hidden story. As hosing went crazy, rental prices also shot up (at least in my area). The place I rented a decade ago now is more per month than the monthly carrying cost for my house.

GreaterNYCDude says

Granted, I'm not in CA but I refied in 2020. Have a sub 3% 30 yr fixed. Not planning on moving, but even if something came up that I had to move I wouldn't sell; With what I pay oer month, I can rent it out and have it be cash flow positive.

I think that the hidden story. As hosing went crazy, rental prices also shot up (at least in my area). The place I rented a decade ago now is more per month than the monthly carrying cost for my house.

Bingo. No one is really building because no one knows how after the crash. We have the largest generation in family making formation that are starting to buy so any inventory that's worth buying is gobbled up even with high interest rates. And millennials are still staying with mom and dad so they're not downsizing at a historical rate. Again, you're not building in that scenario.

I don't think housing prices will go to the moon. They should stall with interest rates. I don't see ANYTHING coming up that would cause a crash for the next decade outside of a war or something f'd up big time. Inflation can eat shit, but it helps home owners. I get letters daily for HELOCs and other debt offers because I have substantial equity. I won't, but I can pull out a years worth of income and not pay any taxes.

Also, leverage and debt scares people after the housing crash. Millennials grew up on seeing their parent eat shit on housing. Lenders and builders know this. So they're not spec building cardboard shit boxes which I think is good. The reality is there's a thing called bankruptcy. Don't feel bad. It was a business decision on the end of the lender. If you have to dump it, dump it.

GreaterNYCDude says

Granted, I'm not in CA but I refied in 2020. Have a sub 3% 30 yr fixed. Not planning on moving, but even if something came up that I had to move I wouldn't sell; With what I pay oer month, I can rent it out and have it be cash flow positive.

I think that the hidden story. As hosing went crazy, rental prices also shot up (at least in my area). The place I rented a decade ago now is more per month than the monthly carrying cost for my house.

As rental prices need to drop more, more people will sell instead of trying to be a landlord. In certain markets you would have to be a masochist to want to be a landlord, so at least some of those people will sell anyway.

zzyzzx says

In certain markets you would have to be a masochist to want to be a landlord, so at least some of those people will sell anyway.

I hear this so often..."I'll just rent/airbnb it if I have to. I don't think most people have the stomach for being a landlord. When they do try, they find out pretty quickly.

Rubicon says

Rents have room to go up.

Rent prices depend on incomes not carrying costs.

I don't even try to read these tea leaves anymore but I have read that the US has a housing unit shortage of 4 million. 'They' have also quoted a shortage of 2 million in CA alone. The number of illegal immigrants coming in just since Biden was 'elected' is said to be 7 MILLION (larger than the population of most states) and they have to live somewhere. How this excess demand at the bottom affects the market in Pleasanton I don't have a clue. (It also appears to me that this population has pushed poor whites out of shitty housing and into RV's and tents.)

Although COVID and low rates created strong demand, the underlying issue is the Great Reset. Institutions are set to own 40% of all single-family rentals by 2030, precisely on time for Agenda 2030. Regular buyers have been outbid by institutions coming in with cash payments. BlackRock is now the largest landowner in America. This is all by design. They do not want people to afford a home because then there would be no need for 15-minute cities, and forever renters living in ADUs. The inventory issue will not recover because no one can outbid the institutions who do not need to borrow money.

WookieMan says

I don't think housing prices will go to the moon.

Already have gone there in SF Bay Area. Now they're Rocketing to Mars.

GNL says

Rubicon says

Rents have room to go up.

Rent prices depend on incomes not carrying costs.

They say that about housing prices too...

zzyzzx says

GNL says

Rubicon says

Rents have room to go up.

Rent prices depend on incomes not carrying costs.

They say that about housing prices too...

You don't think there's a difference?

Rubicon says

Meaning demand for renting goes up. Meaning rent prices are likely to go up.

That is the demand side. Have to also look at the supply side.

Eman says

BayArea says

Never in my wildest dreams did I think that rates would go from under 3% to nearly 7% and prices would hold here in the Bay Area. But here we are.

This makes 2 of us. Simply mind boggling.

make that 3 of us. in Idaho people struggle to buy because if high rates. but influx of equity buyers from CA keeps prices triple what is normal for here. but also private equity companies here offer 5% rates to homebuyers, not sure how they do that, but it’s a thing here.

i can’t explain this insanity other than too much money floating around.

FortwayeAsFuckJoeBiden says

i can’t explain this insanity other than too much money floating around.

Its so much this.Stocks, housing, none of it makes sense.

My house in Idaho that I bought early in the pandemic is back to the peak according to zillow. But if I had bought at today's rates, the montly payment would jump $600

Inflation. If your dollar goes down by % in value hard assets go up %. Housing and stocks should have crashed multiple times the last ten years but at each point market was manipulated by rates and inflation.

RC2006 says

Housing and stocks should have crashed multiple times the last ten years

Or at least adjusted.

The past 20 years have been an anomaly. Low rates, low inflation, even with a few recessions along the way. Now the pendulum has swung back. Historically rates average well above 5% and housing prices are 4.5x ones average income.

https://fred.stlouisfed.org/series/MORTGAGE30US/

https://www.longtermtrends.net/home-price-median-annual-income-ratio/

Now that rates are 6% (or more) one would THINK prices should drop but there has been a combination of institutional investors entering the market AND a lack of sellers for reasons cited above.

Prices may not go up much more in the next 1 to 3 years, and may well stay flat, but the market won't return to "normal" (if it ever does) until wages rise, and I don't see that happening anytime soon, particularly with inflation "cooling off" relative to where it was six months or a year ago. It gives companies an excuse to limit wage growth.

If inflation. Is "only" 4% then you can't expect a 5% raise, unless you have a solid union behind you.

GreaterNYCDude says

If inflation. Is "only" 4% then you can't expect a 5% raise, unless you have a solid union behind you.

yeah, that is why you got to make your savings work for you such as put it in a total stock market index fund

also work a side gig such as 90 minutes of working online surveys while watching TV at night ...that can earn you about $10 for 90 minutes...

earn $200 a month and save that also in an index fund to increase your income which compensates for your wage increases not keeping up with housing cost increases..

.

RC2006 says

Inflation. If your dollar goes down by % in value hard assets go up %. Housing and stocks should have crashed multiple times the last ten years but at each point market was manipulated by rates and inflation.

Our entire economy is fake and manipulated. IMO

ad says

No desperate sellers... home builders are careful to not add a glut of housing ...

Yes they are desperate. They just can't afford to buy another house with a 7% mortgage.

Home builders have been adding. Just not much in Califirnia. And they are being forced to lower their prices or finance with rate downs (5% builders financed mortgages).

Trollhole says

And they are being forced to lower their prices or finance with rate downs

Anyone here remember the "3-2-1 buydowns" of the 1980s?

Rubicon says

Do you know a better economy or country than the US?

Ok, so as long as it's the best horse in the glue factory, all is good? That's aiming low. Manipulation = corruption. So, are you saying corruption is ok as long as it isn't as corrupt as the others? I assure you, this government is corrupt to the bone. If something doesn't change, you ain't seen nothing yet.

Is that why the country you came from is a shithole?

This country is sinking like a turd but who cares as long as its better than the rest. LMAO

Rubicon says

One key to success is to look at what’s possible. Aim high and work hard. Bitching and complaining is easier than getting your lazy ass up - i get that. Some
Get up in the morning blaming others. I get up in the morning seeing lots of opportunities to make it big in this awesome country. Let’s go 🇺🇸

Bitches and complainers usually do the blue collar jobs. Someone has to do it until we can replace them with robots.

Don't put words in people's mouths. That's gaslighting.

Rubicon says

One key to success is to look at what’s possible. Aim high and work hard. Bitching and complaining is easier than getting your lazy ass up - i get that. Some
Get up in the morning blaming others. I get up in the morning seeing lots of opportunities to make it big in this awesome country. Let’s go 🇺🇸

Bitches and complainers usually do the blue collar jobs. Someone has to do it until we can replace them with robots.

just so you understand, disdain for blue collar is how america went downhill. there were years when blue collar single income could provide for family

GNL says

This country is sinking like a turd but who cares as long as its better than the rest. LMAO

There are ways to notice if not measure this such as crime stats (assuming they are comprehensive and authentic) as well as standard of living metrics ike following Rent to Household Income Ratio.

Are things that we took for granted such as reliable electricity and a good doctor something of the past ?

Are there rolling blackouts ? Is it hard to get an appointment to a good family doctor ?

.

Rubicon says

Sry bud, wasn’t meant as gaslighting. Just some good advice / life lesson.

Patrick.net is probably 100% way above average on the income/wealth/IQ scale but, yeah, be sure to school us.

ad says

GNL says

This country is sinking like a turd but who cares as long as its better than the rest. LMAO

There are ways to notice if not measure this such as crime stats (assuming they are comprehensive and authentic) as well as standard of living metrics ike following Rent to Household Income Ratio.

Are things that we took for granted such as reliable electricity and a good doctor something of the past ?

Are there rolling blackouts ? Is it hard to get an appointment to a good family doctor ?

Hopefully I'm way off base. I guess if the private sector can avoid following the government's example of eliminating meritocracy and such we can trundle along until blue skies return. The leftists sure are putting in a good day's work on fucking everything up though. My goodness, look at all the damage they are purposely causing. Yes, it is mostly(?) not widespread? I have grandchildren and that it my focus when it comes to thinking about what is coming. Again, hopefully I am wrong. It's the commenters who sing about lollipops lasting forever who I look at as polyannas. No bueno. IMO

GNL says

It's the commenters who sing about lollipops lasting forever who I look at as polyannas. No bueno. IMO

It's the lesser of 256 evils or whatever number of countries it is. CA alone is the 5th largest country GDP wise on its own. Factor in NY, FL, OH, IL, etc. We have 5-7 states that beat the #2 on the list for GDP. We have 45 more with resources that are above anyone.

I wouldn't say everything is great, but there's a floor and a ceiling. Our ceiling is WAAAAAAAAY higher than any other country on this planet. And the floor is also high. Basically, we ain't going anywhere and you're not getting better elsewhere. There are problems for sure, don't get me wrong. Corruption and fraud are rampant. Guess what? It's exponentially worse in other countries to their detriment. We participate in it, but we're #1. We're top dog and that ain't changing for at least 2 decades outside of a legit world war which is another impossibility of attacking the US without nukes. Not happening.

Fact is our corruption and manipulation just has to be better than the rest. And it is with our resources, demographics and population. China is screwed bigly. India is a shit hole where the smart migrate out. That's 1/3rd of the world population roughly. Africa is dead. Europe is dying. Russia is a moron. Canada and Mexico rely on us. South America is stagnant. There's zero other areas with positivity. Maybe southeast Asia.

I'm generally negative, but when you look at the broad picture, our situation ain't bad.

WookieMan says

I'm generally negative, but when you look at the broad picture, our situation ain't bad.

We are, however, in a rapid political and economic decline, the rate of which is both amazing and terrifying at the same time. Probably just a few elections and a generation away from losing our most important constitutional rights, our freedoms, and our national identity. It's not me I'm scared for...its my kids.

And I'm still waiting for the car market bubble to implode.

RedStar says

And I'm still waiting for the car market bubble to implode.

As am I. In 2 weeks my car will be old enough to buy beer.

RedStar says

Probably just a few elections and a generation away from losing our most important constitutional rights, our freedoms, and our national identity. It's not me I'm scared for...its my kids.

I'm not disagreeing, but I think my kids are going to be smarter than me or my parents. Or grandparents. I've got 3 at the age of 10-13. They know exponentially more than I did by that age. We're talking by a lot. I don't know if that's good or bad. My kids piss me off, so not patting them on the back, but the younger generations coming up are smarter than anyone thinks.

That said, females I'm not certain of. I don't know how that plays out. Marriage and family formation which is critical to the future is important. I'm 40. At some point at 80+ I'm probably gonna need help unless I'm that unicorn. So far I'm not certain they have that capacity. My mom is taken care of. We have a plan and we'll take care of it. My MIL is another joke, but whatever. You deal with shit as it's served to you.

RedStar says

WookieMan says

I'm generally negative, but when you look at the broad picture, our situation ain't bad.

We are, however, in a rapid political and economic decline, the rate of which is both amazing and terrifying at the same time. Probably just a few elections and a generation away from losing our most important constitutional rights, our freedoms, and our national identity. It's not me I'm scared for...its my kids.

And I'm still waiting for the car market bubble to implode.

This is my concern more than money. Yes, America is still good. But why be content when it's actually getting worse and anyone can see what our politicians are doing?

If we were to go by what the founders of this country did, we would see that wealth is not as important as other things.

Not concerned right?

https://twitter.com/ppv_tahoe/status/1664475915886141440

To be followed up with vigilantism? Won't effect you, right?

https://twitter.com/RobberyFaiI/status/1682848614660587520

GNL says

Not concerned right?

https://twitter.com/ppv_tahoe/status/1664475915886141440

To be followed up with vigilantism? Won't effect you, right?

https://twitter.com/RobberyFaiI/status/1682848614660587520

The 2nd video clip is likely from Brazil?

GNL says

Not concerned right?

https://twitter.com/ppv_tahoe/status/1664475915886141440

To be followed up with vigilantism? Won't effect you, right?

https://twitter.com/RobberyFaiI/status/1682848614660587520

The 1st video, Democrats voted for it. Now, everyone is paying for it. More theft loss = higher prices for everyone else.

All true. Let's see what happens if Newsome becomes prez. It's the trajectory of the country that I am concerned about. How does anyone think countries become shitholes? It happens like what we are seeing. We have immigrents tell us exactly this. Anyway, good luck to all. Be good to one another and respect each other. Rich or poor. There are good and bad rich people same as there are good and bad poor people. If you for sure know who those bad people are, well, then do what you got to do. LOL