Or fake, partisan media. We have people who would rather die than not be 100% partisan at all times and admit the other side isn't to blame for everything from inflation to athlete's foot.
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anon_0k9zlfz6lz9oy
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If they paid cash looks like there will be not forced credit selling. Stagnant supplyInvestors bought up more than half of all Fort Worth homes sold last year
They pay cash and buy ‘as is’ — a home seller’s dream
Investors bought up more than half of all Fort Worth homes sold last year
They pay cash and buy ‘as is’ — a home seller’s dream, but a competing buyer’s nightmaretherealdeal.com
The forecasted 2022 fed funds rate on 12-31-21 was 82 bps. It will be 4.5. Anyone who said they saw this coming is suffering from classic revisionism.
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anon_0k9zlfz6lz9oy
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Meaning that rates were going to rise like they have and therefore the impact on prices. If the rate rise happened even half as fast and double the forecast going into the year, we would not be talking about price declines in real estate because fundamentals and supply are in a good spot.
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anon_0k9zlfz6lz9oy
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No shit haha which is why that article is absurd. How they classify “investor” is also absurd.
if grandma owns her house she lives in under an llc they classify that as an investor
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anon_0k9zlfz6lz9oy
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Hes literally posting facts and data haha which goes back to my premise that most people hate objective and facts and data that they cannot dispute
"No one saw this coming" is not a fact. It's just one of your dumb talking points. A lot of people saw this coming.
No one should have been trying to predict or argue the future market with confidence based on historical trends….while failing to recognize that we essentially don’t have historical data for the past two + years (Global pandemic, forced shutdowns, relief packages, massive supply shortages, record low mortgages rates, job market like we’ve never seen it and red hot inflation).
That’s where this thread was always flawed and there tons of people early on who pointed all of this stuff out. If you told me 6 months ago rates would be above 7% why exactly should I be surprised? Lol.
I’m not an expert on the housing market but I do know there’s a lot more to it than just supply and demand of housing.
I ignore him now. I never disparage anyone's profession but its not like he's not picking colors for numbers each day. RE guys always made laugh
It’s cash to the seller but the buyer is using a credit facility.. happens all the time. That’s the advantage of the institutional investors
Raises hand. Go back here or investment thread. I told all u fools that cash was king, rates going up hard and more pain to come. Still coming
Exactly. Everyone with a brain knows the institutional buyers are using a lot of leverage.
Have you been watching opendoor? It's already down like 85% YTD but I think its going to zero.
Something to consider…..
its better to think in probabilistic terms than absolute terms. It’s naive to assume that something that’s not happened in the past wouldn’t happen in the future, because the history of markets shows conclusively that large market moves by definition happen when events occur that are not considered by the previous consensus opinion.
To say that it’s not possible to anticipate or predict sudden movements, particularly when we have lived through a decade of incredibly accommodative Fed policy, reflects absolute, and perhaps simplistic, thinking rather than a probabilistic assessment of potential outcomes. Proper risk assessment considers probability of events along with severity of outcome.
Aggressive Fed action in that context is hardly surprising and rates aren’t even at a high level right now by historical standards.
its better to think in probabilistic terms than absolute terms. It’s naive to assume that something that’s not happened in the past wouldn’t happen in the future, because the history of markets shows conclusively that large market moves by definition happen when events occur that are not considered by the previous consensus opinion.
To say that it’s not possible to anticipate or predict sudden movements, particularly when we have lived through a decade of incredibly accommodative Fed policy, reflects absolute, and perhaps simplistic, thinking rather than a probabilistic assessment of potential outcomes. Proper risk assessment considers probability of events along with severity of outcome.
Aggressive Fed action in that context is hardly surprising and rates aren’t even at a high level right now by historical standards.
There is nothing like living through the ups and downs of the various markets
I started paying my own way in 1980 and just in that short period you could claim at least 5 no one saw that coming events
Just adding the 70's would have been at least one and more likely 2 or 3 more
I started paying my own way in 1980 and just in that short period you could claim at least 5 no one saw that coming events
Just adding the 70's would have been at least one and more likely 2 or 3 more
It‘s fascinating. Every generation has to learn these lessons by experience rather than by reviewing the past. Probably has something to do with the emotional reinforcement of making money in an upmarket, where overvaluation continues longer leading to naysayers being shouted down. Well, here we are,
Here‘s another consideration. Very few investors today have participated in a Treasury bear market. It’s literally been a bull market since the 80s. Will be interesting to see how that plays out,
In most other fields, knowledge builds and compounds over time whereas in markets, we seem to step on the same rakes (can’t recall where I read that, but i like the comment).
Of course, it works the other way as well. Many say they can’t wait to buy when markets decline, implying that the only change is in prices and not in underlying fundamentals and conditions. Another quote I like - when it’s time to buy, you won’t want to.
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I have said rates 7-8% on mortgages since spring. You could see this coming if you were paying attention. Inflation has been like 20-30% across all products over the last 2 years, all while we were heading into a recession. If you know FED history you knew all they could and would do is keep raising rates. What I didn't see coming was our current President being that tone deaf that they continue with spending packages, forgiving student loan and the continued crapping on oil that is only pushing CPI in the wrong direction.
Now the FED also always overreacts so they will likely keep pushing past the point we need to go, which could push mortgage rates into the 9 or 10% range. That would be a disaster for all real estate assets classes IMO.
First post of mine in June ITT and I'm more active on Instagram and would post one of my stories about it. 7-8% rates should not surprise people if you know FED history.
Please please please guys stop paying attention to data from the street. It doesn't mean shit and can change like the wind blows.
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anon_0k9zlfz6lz9oy
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People always just thought the unexpected would happen theyd die broke and in fear. Thats no where to live. We bought all throughout 2020-present. Crushed our debt yield and dcr tests on our loans. Theres no bad time to buy when you buy right and follow the data
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anon_0k9zlfz6lz9oy
Guest
The thread aint flawed haha the fundamental back drop remains the same as when the thread began. Only difference is rates skyrocketed higher than everyone anticipated. We have a handful of people on here claiming to be smarter than billions and trillions worth of wall street action lol.
market is not a bubble and never was. Fundamentals of the market are super strong if you dive into the data. Hence why we remain near all time low inventory and consensus calls coming in between -3% to +3% YOY appreciation for residential real estate in 2023. I lean -3% if rates remain this high
I mean it’s pretty flawed if you were basing your prediction/confidence on historical data and simple supply/demand of housing. There is no historical data for the past 2 + years and you were ignoring the idea that the housing market (just like any market) is impacted by the broader economy.
You keep saying nobody predicted rates above 7%. So many of we’re saying this is unprecedented times and preparing for additional unprecedented time haha. Go back and read the beginning of this thread.
You seem to be one of the few who are surprised rates are 7%.
not true, they’d behave as you would in a poker game, betting more heavily when odds are in your favor and pulling back when holding a weak hand. When everyone rushes into real estate or any other asset class, it’s time to be cautious. Likewise, when fear prevails, bargains are likely at hand,
the most important variables for RE are incomes and affordability. You can track income growth to real estate price growth, and the correlation by market holds very well. That’s not to say other variables are meaningful, but if you miss the most important one, you’re thesis likely won’t hold as we are seeing here today.
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anon_0k9zlfz6lz9oy
Guest
Real estate literally is supply and demand like almost every functioning market on earth. Are you disputing that? Lol. Supply can grow as is it now when you have a large demand hit from rising rates. We have abour 25% less new listings yoy but inventory has grown (still below 40 year historical low set in 2019). Months supply grows 2 ways, less people buying and more people selling.
alottttt of people wont admit it but theyre shocked prices havent tanked and retraced to 2020 yet. These people simply havent looked into the data
Investing in real estate is all about leverage. Can’t hit 20% IRR on cash basis.
All these people that paid top dollar for existing homes will be shocked when they try and do renovations big and small. I’ve got a couple of small projects in the works (e.g., adding wood flooring to a few small areas, adding some recessed lighting) and prices are astronomical for labor and materials.
The spring is different. The market incorrectly believed that the fed moves and the 10 year going to 3.5 would do enough. That was clearly wrong given the info available at the time IMO. In 2q with 3.5 10 year and 5 mortgage rate I had no concerns for real estate values. In 3 q is when rates and and spreads gapped to levels that surprised nearly everyone. Going into the year the futures said 80 bps on fed funds. That was market consensus (not saying you follow that) including Ibanks like Goldman etc.
All that being said, the basic premise of real estate not being in a bubble is a correct one. A bubble connotes a lack of fundamentals and real estate fundamentals were strong going in but slowing now. NOI growth has been at historic highs for a number of sectors including industrials, multi, self storage etc. supply is also in a good place at the moment. However. Increases in interest rates above levels projected by even the most bearish prognosticators changed the game for all asset classes. That being said. I think RE does relatively well given cash low and stability. Increasing rates from here is bad for many things including no earnings tech growth.
I tried to post something from twitter but it wasn't working for some reason.
Some of the frothiest markets are starting to see significant price declines (austin down 10% from its peak) but the entire country was down 2% from the peak according to zillow data.
regional dislocations skew the data. We've been looking for a home on the water in a few locales and price drops are almost daily with inventory sitting. As unemployment ratchets up, those price drops become bigger
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anon_0k9zlfz6lz9oy
Guest
LOL. RE guys make more money than you but that's neither here nor there lets get back to facts before boss man makes you do another starbucks run
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anon_0k9zlfz6lz9oy
Guest
Remember the Logan Mohtashami guy that @RUTGERS95 said knows nothing? Well in a collision of worlds he is live debating a Rutgers professor on Monday regarding the premise of whether the real estate market is in a bubble or not.
Who is the Rutgers professor he's debating? Managing Director for Rutgers' Financial Statistics & Risk Management MS Program as well as the MS in Data Science Program.
www.housingwire.com
Who is the Rutgers professor he's debating? Managing Director for Rutgers' Financial Statistics & Risk Management MS Program as well as the MS in Data Science Program.
Are we in a housing bubble? A live debate
Mortgage rates have risen 5% in the span of a few months, giving consumers whiplash and stalling new listings. Even with record low inventory, housing prices have started to cool just as we head into the winter home-buying season. Does this mean housing is in a bubble that’s about to burst...
www.housingwire.com
ha, I wouldn't bet on that sport, I've forgotten more about RE and MBS than you will ever know and the bonuses and deferred comp to prove such. You need to come off your self made pedestal and head back to the little kids table so the adults can manage the room
if you're feeling insecure about money as your post suggests, I'd suggest a 2nd job bartending or such, see lots of RE guys doing that so it must be popular
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neither of them know anything and if you think debating any professor gives you some cred you're sorely mistaken, same for the Fed. Hell, I had half the open markets group at the Fed under my guise at some point in varied ways and can tell you from first hand experience with the profs in finance and grad depts at RU as well as the fed that I'd not let them take my trash from the backdoor to the street for fear of fking it up. The two groups of people in the world of economics that think they know but really know very little are academics and Fed persons. History is great equalizer and lest you not forget, 'the world is full of educated derelicts'Remember the Logan Mohtashami guy that @RUTGERS95 said knows nothing? Well in a collision of worlds he is live debating a Rutgers professor on Monday regarding the premise of whether the real estate market is in a bubble or not.
Who is the Rutgers professor he's debating? Managing Director for Rutgers' Financial Statistics & Risk Management MS Program as well as the MS in Data Science Program.
Are we in a housing bubble? A live debate
Mortgage rates have risen 5% in the span of a few months, giving consumers whiplash and stalling new listings. Even with record low inventory, housing prices have started to cool just as we head into the winter home-buying season. Does this mean housing is in a bubble that’s about to burst...
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