Housing market ‘extremely volatile’ with private equity accounting for a third of the sales: Expert
Inflation and recession fears turned a once red hot housing market into a cool down.
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anon_0k9zlfz6lz9oy
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anon_0k9zlfz6lz9oy
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I’ve seen and heard the same. Tight inventory is the only thing keeping the housing recession from completely ramping up.
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anon_0k9zlfz6lz9oy
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Sellers also do not feel pressure to sell with so much equity and insanely low rates they locked in during the refi wave. Best evidence of this is purchase app data down 20% YOY while price appreciation up 11% YOY. There is no forced selling. The sooner people realize this has almost no similarities to 2008 the better
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anon_0k9zlfz6lz9oy
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This is “the sky is blue” statement lol. As inventory and prices are always directly correlated
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the only unknown is the institutional held homes. Any refi equals a meaningful paydown.
My point was mainly that the second inventory levels start a meaningful build-up it’s going to get ugly. I’ve seen more price reductions in the last 2 weeks than the last 2 years and it’s not just a seasonal issue. Now, with that said, these reductions don’t mean the houses are affordable because many of them were ridiculously overpriced (and still are even with reductions).
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anon_0k9zlfz6lz9oy
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anon_0k9zlfz6lz9oy
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You would be correct, some agents/sellers are slow to realize its not just dart board pricing anymore. However, for historical perspective 33% of homes having price reductions is normal. Mike’s estimate says we peak at 40% around labor day then come down from there.
also, we arent going to see a meaningful build up of inventory. If you believe otherwise, what do you define as meaningful build up as far as months of supply goes and why/what evidence/data do you see that shows that?
further the homes that are going under contract are doing so on average in 17 days which is near the all time low of 14 days set in June. So theyre moving when priced right.
Therein lies the key to current transactions. Less aggressive pricing plus reductions are helping to keep the parties going (for now).
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anon_0k9zlfz6lz9oy
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Nah. Merely a fact of people are staying in their homes longer, have locked in super low interest rates and arent forced to sell and then trade up to a higher rate and more expensive home paired with largest demographic patch ever entering peak household formation years. The spin will be everywhere when people try to comprehend why were not in a bubble and why real estate didnt crash. I will say this though, if mortgage rates get around 6.25% or above and have some duration, youll see prices decline yoy. My analysis of the data and following some bond traders (macroalf is the best one imo) indicates that 10 year treasury is gonna have a tough time breaking through 325-350 with duration which should keep mortgage rates below 5.75.
We were/are absolutely in a bubble = IMO the only question is where that ultimately leaves us in 1-3+ years from now.
It's basically a standoff, except sellers still want prices like rates are 3% when they're pushing 6%.
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anon_0k9zlfz6lz9oy
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in which case they won't sell. Mike Simonsen just put out his weekly video for Altos Research and touches on that today. He actually revised his end of year inventory forecast downward. Going to be in a low inventory environment for a long time.
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anon_0k9zlfz6lz9oy
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Disagree. Balance sheets are as healthy as they've been and we have the strongest borrower profiles of all time. I forget if it was you or someone else that said if borrowers are taking out ARM's that spells trouble. But that's likely because you think this is 2005 lending out here. It's not. If you take out an ARM today you can only get said ARM if and only if you qualify for the max recast payment. People just have $$$$
I have no data on this but anecdotally I can tell you there's a lot of mommy and daddy's money that are allowing people to buy with large downpayments. Will likely continue as boomers begin to die and their kids and grandkids get that $$$
This always shocked me. I was stunned how many people got assistance from their parents to buy a house. I got zero. Did it all myself.
are they buying the house together or are the parents getting a big surprise from IRS?
Agree…I was also surprised to hear that pooling money and sharing ownership between diff family members had become common because of affordability concerns.
$30-68 trillion being transferred from generation to generation.
Millennials Are Banking On The Great Wealth Transfer, 4 Words Why You Shouldn’t Cash That Check Yet
Millennials are banking on the Great Wealth Transfer when they will inherit trillions of dollars from the Silent and Baby Boomer generations – transforming today’s adult children into alpha consumers and next-gen clients of financial advisors, banks, and more. Here is why not to cash that check yet.
www.forbes.com
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anon_0k9zlfz6lz9oy
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Its not a surprise. You are allowed to gift tax free somewhere around I think $12 mill lifetime without tax. I gifted my mom $50K last year. Its something like 13K/yr? Tax free and once you go over that the overage is applied to your lifetime amount
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anon_0k9zlfz6lz9oy
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These are the things a lot of people miss and dont consider. Alot of people like to believe the real estate market is the stock market but its not. Shelter and the dow are apples and oranges$30-68 trillion being transferred from generation to generation.
Millennials Are Banking On The Great Wealth Transfer, 4 Words Why You Shouldn’t Cash That Check Yet
Millennials are banking on the Great Wealth Transfer when they will inherit trillions of dollars from the Silent and Baby Boomer generations – transforming today’s adult children into alpha consumers and next-gen clients of financial advisors, banks, and more. Here is why not to cash that check yet.
Don’t think that’s correct. The annual allowance is 15k for 2022 and 16k 2023. Not sure about the 12mm lifetime.
found this:
You won’t need to include on your tax return gift amounts that do not exceed the annual gift tax exclusion set by the IRS. However, if you do exceed the annual gift tax exclusion, you’ll have to pay taxes on the gift. Rates range anywhere from 18% to 40%. The amount by which you exceeded the annual gift tax exclusion will also be deducted from your lifetime gift tax exemption and your federal estate tax exemption.
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anon_0k9zlfz6lz9oy
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Gotcha so it’s $15K, not $13K.
Just looked it up, exemption up to $11.7 mill gifts
“The IRS allows a lifetime tax exemption on gifts and estates, up to a certain limit, which is adjusted yearly to keep pace with inflation. For 2021, an individual's combined lifetime exemption from federal gift or estate taxes is $11.7 million. If married, the joint exemption is $23.4 million.”
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anon_0k9zlfz6lz9oy
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Lol. So you think this is 2008 2.0? Foolish. But ignore the data at your own peril
We need to get through September/October at this point. The downturn in 2008 really started late 2007 and hit rock bottom September/October 2008. Those are the traditional months with market volatility. A month or so I thought for sure my company was going to have layoffs, then things changed back a few weeks ago. Since it's now planning time for next year, the finance teams have me thinking otherwise again. I am sure a lot of companies are in the same boat. It should be an interesting next 3-4 months.
We got $10K for a down payment on our first house, a condo, way back in 1992, which was promptly lost when we sold the place in 1995 at a $10K loss.
Thought you might find this article interesting on corporate/LLC ownership trends in certain towns/cities in NJ. IDK how accurate it is about "corporate." Years ago, our accountant advised us to place each rental property we own in a separate LLC to help shield them from liability, which we have done. So we are part of that statistic, but a two person LLC.
See 9 NJ towns where corporations are buying up homes at an astonishing rate
Towns like Trenton, Asbury Park and Willingboro saw some of the largest increases in corporate homeownership.
www.app.com
This second article is behind a paywall:
Asbury Park Press
www.app.com
It's official! Home prices are plummeting! Well, down by 0.77%.
www.cnbc.com
Home prices fell for the first time in 3 years last month – and it was the biggest decline since 2011
The sharp and fast rise in mortgage rates this year caused an already pricey housing market to become even less affordable.
Dig into the data…makes it clear the housing recession just getting started.It's official! Home prices are plummeting! Well, down by 0.77%.
Home prices fell for the first time in 3 years last month – and it was the biggest decline since 2011
The sharp and fast rise in mortgage rates this year caused an already pricey housing market to become even less affordable.
Way too bearish to think that. Kyk is right.....perhaps a modest dip in prices due to the recent rally, but that's it.
Sometimes I wonder if you purposely ignore data points just to push the ATH narrative and call us bears. And I quote:
“While the drop may seem small, it is the largest single-month decline in prices since January 2011. It is also the second-worst July performance dating back to 1991.”
Seems rather significant - no? Perhaps we should first check with Logan M’s Twitter account.
Found this tidbit interesting... "Home prices were still 14.3% higher in July compared with July 2021." Is it possible we both are in a housing recession but also not in a housing bubble?
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