OT Some interesting thoughts from Real Estate Investors Conference

[dailybuck777]

This was a real estate investors conference where nationally known people came to sell their wares. Many very experienced and knowledgeable people were there as well as newbies. However, 85% of the courses offered would probably not help most people because they wouldn't be able to execute what they were instructed.


1. One of the vendors had a girl friend who was a realtor. She is telling him that hedge funds are buying real estate willy nilly, not having any real idea of what they are buying. Also, they are only seeking returns in the 5% range which doesn't give them much room for error. Lots of room here for a big, negative explosion.

2. At a meeting for very experienced investors, many people thought that the reason there hasn't been greater rise in interest rates was that the velocity of money was low.

3. At the same investors meeting virtually all thought that substantial inflation was baked into the system and that it was foolish not to get loans at low rates and leverage your investments.

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

 

[Cosmos]

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

Good post. Thanks for sharing.

My only concern is what will your dollars be worth in 18 months. After all, it took a dollar to buy what 65 cents did in 2000 before the inflation spigot was recently opened up. So what are you waiting on? Interest rates are cheap and aren't going any lower. So go for it.

 

[dailybuck777]

Good post. Thanks for sharing.

My only concern is what will your dollars be worth in 18 months. After all, it took a dollar to buy what 65 cents did in 2000 before the inflation spigot was recently opened up. So what are you waiting on? Interest rates are cheap and aren't going any lower. So go for it.

I have multiple bought and paid for real estate properties. Also have a good amount of cash. If there is a crash, I am well positioned to buy discounted properties. I did very well after 2008. For the benefit of others, I hope there is not a crash but it may be unavoidable.

 

[Vic Vaselino]

This was a real estate investors conference where nationally known people came to sell their wares. Many very experienced and knowledgeable people were there as well as newbies. However, 85% of the courses offered would probably not help most people because they wouldn't be able to execute what they were instructed.


1. One of the vendors had a girl friend who was a realtor. She is telling him that hedge funds are buying real estate willy nilly, not having any real idea of what they are buying. Also, they are only seeking returns in the 5% range which doesn't give them much room for error. Lots of room here for a big, negative explosion.

2. At a meeting for very experienced investors, many people thought that the reason there hasn't been greater rise in interest rates was that the velocity of money was low.

3. At the same investors meeting virtually all thought that substantial inflation was baked into the system and that it was foolish not to get loans at low rates and leverage your investments.

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

The velocity of money from my wallet has been significant over the last year.

 

[84Lion]

Good post, Buck. I think real estate values have peaked. I also think that there is a LOT to be sorted out in the next year or so...specifically the supply chain issues, political issues, and the vaccine mandates. Much of this points to an "engineered crash." I think there will be inflation on the things people need (gasoline, food, etc.) and while you would think people "need" housing, I think much of the real estate available today is priced way outside the average person's budget. Back in the late 1970s, the only way that inflation got under control was via high interest rates (tough medicine from Paul Volcker but it worked). To your point, that will kill the real estate market. I agree, if you have money available, you could pick up properties on the cheap. Watch out for the taxes on those properties! (That's gonna kill the RE market too.)

 

[Nbergbuck]

This was a real estate investors conference where nationally known people came to sell their wares. Many very experienced and knowledgeable people were there as well as newbies. However, 85% of the courses offered would probably not help most people because they wouldn't be able to execute what they were instructed.


1. One of the vendors had a girl friend who was a realtor. She is telling him that hedge funds are buying real estate willy nilly, not having any real idea of what they are buying. Also, they are only seeking returns in the 5% range which doesn't give them much room for error. Lots of room here for a big, negative explosion.

2. At a meeting for very experienced investors, many people thought that the reason there hasn't been greater rise in interest rates was that the velocity of money was low.

3. At the same investors meeting virtually all thought that substantial inflation was baked into the system and that it was foolish not to get loans at low rates and leverage your investments.

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

I think the Fed will not let interest rates rise very much. The federal debt is a bigger and bigger factor.

 

[aloha20]

Well, I don't really agree with the first point. I also have a couple of friends who are realtors. And they tell me that hedge funds are buying real estate looking for a much bigger return than 5%. One of them was working in Los Angeles, and he told me that local hedge funds were looking for returns of no less than 15%! That is already a significant amount of money. However, someone said to me that some of these funds are buying any sort of real estate as soon as its return is above 5%. You can actually find an article related to this topic on http://propertypressonline.co.uk. I'm not saying your friend lied to you. Things are debatable, that's all.

 

[Obliviax]

I have multiple bought and paid for real estate properties. Also have a good amount of cash. If there is a crash, I am well positioned to buy discounted properties. I did very well after 2008. For the benefit of others, I hope there is not a crash but it may be unavoidable.

In my experience, high-interest rates will create fewer home buyers which equal more renters. More renters, more rental income. Owning a rental property is cyclical between high property value and high rental value. It is a zero-sum game. Like running a football offense, you take what is given.

 

[Media Fan]

This was a real estate investors conference where nationally known people came to sell their wares. Many very experienced and knowledgeable people were there as well as newbies. However, 85% of the courses offered would probably not help most people because they wouldn't be able to execute what they were instructed.


1. One of the vendors had a girl friend who was a realtor. She is telling him that hedge funds are buying real estate willy nilly, not having any real idea of what they are buying. Also, they are only seeking returns in the 5% range which doesn't give them much room for error. Lots of room here for a big, negative explosion.

2. At a meeting for very experienced investors, many people thought that the reason there hasn't been greater rise in interest rates was that the velocity of money was low.

3. At the same investors meeting virtually all thought that substantial inflation was baked into the system and that it was foolish not to get loans at low rates and leverage your investments.

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

Re pt.2. M2 velocity remains very low by historical standards ( you can find that and many other charts at the Fed St.Louis website). But a lot of that money is in the form of the monetary base ( I.e. bank holdings of reserves at the Fed)- and that is one reason why velocity is low.
The simple reason why nominal rates remain so very, very low relative to inflation is that the demand for money is outstripped by the massive supply of money. MV= PT. Thank you Irving Fisher ( sp).

 

[aloha20]

A few years ago, I seriously began the question of buying my own home. My friends recommended me to an experienced realtor, https://www.boutiquehomeplans.com/cost-to-build, who eventually found an apartment at a reasonable price. But at the same time, she said that if I had decided to buy property at least six months earlier, I would have been able to find cheaper options. The increase in housing prices depends on many factors, including the contribution of the pandemic: the increased cost of buying building materials and a shortage of labor due to restrictions on the entry of foreigners into the country. Because of the anti-coronavirus measures, many developers had to postpone the completion of their projects, which only raised prices. I was very satisfied with the option I was given, so I did not hesitate to sign a contract to buy a house.

 

[lowhandicapper]

I to study real estate daily. The price of existing real estate has to do with one thing and one thing only, supply and demand. Anyone who contends otherwise wants to sell you something. Currently, the United States is about 4 million homes short of the demand from buyers. Projections don't expect this to level out until 2024 at the earliest. There will be no discount home buying in the near future. However, there will be a glut of foreclosed homes hitting the market once moratoriums end and the distressed market is brought back into the fold.....but.....the distressed market does little for average homebuyer as it is mainly an investors market. Rising interest rates will only shackle buyers from being able to afford "more expensive" houses and not really affect their want or need for new housing.

 

[87 Penn St8]

This was a real estate investors conference where nationally known people came to sell their wares. Many very experienced and knowledgeable people were there as well as newbies. However, 85% of the courses offered would probably not help most people because they wouldn't be able to execute what they were instructed.


1. One of the vendors had a girl friend who was a realtor. She is telling him that hedge funds are buying real estate willy nilly, not having any real idea of what they are buying. Also, they are only seeking returns in the 5% range which doesn't give them much room for error. Lots of room here for a big, negative explosion.

2. At a meeting for very experienced investors, many people thought that the reason there hasn't been greater rise in interest rates was that the velocity of money was low.

3. At the same investors meeting virtually all thought that substantial inflation was baked into the system and that it was foolish not to get loans at low rates and leverage your investments.

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

Thank you for the scoop. My bride and I only owe $70k on a home which we have been looking to possibly downsize from. We declined a no inspections/as is $650k unsolicited offer a month ago.

While moving quickly from our home of 20 years and likely paying rent for a year isn't at all appealing, I share your outlook and think that 12-18 months for now there will be a dip that would've been perfect for us. However, sometimes a home is worth more than one, and my marriage matters more than what would've been a very smart real estate play.

Home Sweet Home!

 

[Obliviax]

There are two issues that will keep the price of homes high for at least another year. The first is the labor shortage and the second is the supply chain problems. I ordered a high end oven and was told ‘maybe you’ll see it in a year’ fridge? Same thing.

you can’t buy a home and remodel it and you can’t remodel and sell.

i am talking about nice homes here but fully prices are probably double when looking at lumber, tools, drywall, etc. and that includes labor. The inflation numbers people are talking about are way low to what they really are

 

[diontechristmas]

I’m not going to act like an expert. I bought a new build in the Lehigh Valley in 2014. One of my neighbors just sold their very similar home for 200k more than what I bought my house for. I refied about 18 months ago. I’m set abs not going anywhere. The market in my area continues to be red hot. I don’t see prices continuing to rise as affordability, even for people making good coin has to be challenging, but I don’t see this market falling off a cliff.

 

[Wesauking Lion]

I keep thinking there is a large group of people who are going to be in trouble as they have paid way too much for their houses. People are throwing money as houses paying way above offer price. The last time this happened a large number of people were in trouble... 2008 and 2009.

If that happens, there could be some opportunities for people sitting on cash

 

[Cletus11]

A recession is coming, in the works now as inflation and supply chain problems are only getting worse. crazy part about this recession is that pricing will remain high as the supply chain is more disrupted than anytime in history and is going to take to at least the end of 2023 for this to sort itself out. I was hoping that by end of this year things would start to get more normal but the Russian-Ukraine war combined with the recent Covid shutdowns in China are going to push this out at least another year. I think by the end of this year into next year could get pretty ugly as the supply chain is on the verge of collapse in some sectors.

 

[Obliviax]

I keep thinking there is a large group of people who are going to be in trouble as they have paid way too much for their houses. People are throwing money as houses paying way above offer price. The last time this happened a large number of people were in trouble... 2008 and 2009.

If that happens, there could be some opportunities for people sitting on cash

Agree and disagree. 2008 was based upon making credit available with no money down and to people that simply couldn't afford any kind of downturn. I think there is risk at the mid and low market level (meaning, home value/price) but in the upper markets, not so much.

In 2008, there was pressure to lower the barriers to home ownership. The industry a) way oversold to people that couldn't afford it and b) sold the loans on the secondary market to spread the risk. When an institutional collapse happened everyone was screwed. But five years later, totally rebounded. So if you could carry for five years, you didn't get hurt. In fact, today are rewarded.

The issues today are a) supply chain problems due to COVID b) inflation across the board due to too much money chasing too little supply and c) lack of labor to build and rehab homes. I don't see any of those changing in the next 12 months.

 

[Cletus11]

Agree and disagree. 2008 was based upon making credit available with no money down and to people that simply couldn't afford any kind of downturn. I think there is risk at the mid and low market level (meaning, home value/price) but in the upper markets, not so much.

In 2008, there was pressure to lower the barriers to home ownership. The industry a) way oversold to people that couldn't afford it and b) sold the loans on the secondary market to spread the risk. When an institutional collapse happened everyone was screwed. But five years later, totally rebounded. So if you could carry for five years, you didn't get hurt. In fact, today are rewarded.

The issues today are a) supply chain problems due to COVID b) inflation across the board due to too much money chasing too little supply and c) lack of labor to build and rehab homes. I don't see any of those changing in the next 12 months.

I would also note two other major issues in 2008 timeframe which not sure if still in play.

1. People who owned their house and had a some equity in their house re-appraised for a large high dollar value (ie...you bought a house for $250k and had $50k in equity and got house re-appraised for $400k and took about $150K more in a second mortgage) and then took out a home equity loan to that new elevated value. So they greatly increased their debt load and when the collapse occurred and those people lost their job or had to take a paycut, could not longer afford their higher mortgage payments. Not sure if that is occuring now.

2. The banks were selling crazy balloon payment loans. So basically they sold mortgages that in year 1 you paid a very small monthtly payment (maybe 25% of the actual normal monthly mortgage payment) and then in year 2 you paid like 50% and then in year 3 you started to pay the full loan off (which since you paid low payments for the first two years the remaining 28 years on the mortgage were at elevated monthly payments). So they basically gave loans to people that had zero way of actually paying off the mortgage payment once they actually had to pay the real amount.

 

[Plan Ahaed]

I’m not going to act like an expert. I bought a new build in the Lehigh Valley in 2014. One of my neighbors just sold their very similar home for 200k more than what I bought my house for. I refied about 18 months ago. I’m set abs not going anywhere. The market in my area continues to be red hot. I don’t see prices continuing to rise as affordability, even for people making good coin has to be challenging, but I don’t see this market falling off a cliff.

Fellow Lehigh resident checking in with a similar story. One recent one in particular was listed last week in January at $430k, off the market within a week and final purchase price was $485k. Then you have the new 55+ communities that are building 1600 sq/ft homes and selling them for $450k -at those prices I don't know who is "downsizing" to them. Problem is that I just don't see the prices ever coming back to reality - at least in our neck of the woods with being in the greater metro area of NYC and Philly. And lord help us if they ever actually establish train service again to those cities - going to have to move to Pennsyltucky when the cost of living skyrockets.

 

[Cletus11]

Fellow Lehigh resident checking in with a similar story. One recent one in particular was listed last week in January at $430k, off the market within a week and final purchase price was $485k. Then you have the new 55+ communities that are building 1600 sq/ft homes and selling them for $450k -at those prices I don't know who is "downsizing" to them. Problem is that I just don't see the prices ever coming back to reality - at least in our neck of the woods with being in the greater metro area of NYC and Philly. And lord help us if they ever actually establish train service again to those cities - going to have to move to Pennsyltucky when the cost of living skyrockets.

it is a lot like that 2008 timeframe where houses go on the market on Friday and are under contract by Sunday at above the asking price. a friend recently sold their house and they literally had a letter in the mailbox from one person bidding that was a personal hand written letter saying how much they loved the house and wanted to buy it to raise their family, etc.....they had 3 offers over the weekend above asking price. House closing scheduled for 2 weeks later, just crazy.

 

[Obliviax]

I would also note two other major issues in 2008 timeframe which not sure if still in play.

1. People who owned their house and had a some equity in their house re-appraised for a large high dollar value (ie...you bought a house for $250k and had $50k in equity and got house re-appraised for $400k and took about $150K more in a second mortgage) and then took out a home equity loan to that new elevated value. So they greatly increased their debt load and when the collapse occurred and those people lost their job or had to take a paycut, could not longer afford their higher mortgage payments. Not sure if that is occuring now.

2. The banks were selling crazy balloon payment loans. So basically they sold mortgages that in year 1 you paid a very small monthtly payment (maybe 25% of the actual normal monthly mortgage payment) and then in year 2 you paid like 50% and then in year 3 you started to pay the full loan off (which since you paid low payments for the first two years the remaining 28 years on the mortgage were at elevated monthly payments). So they basically gave loans to people that had zero way of actually paying off the mortgage payment once they actually had to pay the real amount.

good points. As a backdrop, there was a lot of pressure to allow everyone to participate. That led to far too lax processes. Even today, loan approvals are mostly done blindly in that the company doesn't know who is applying. It is all based on the math of the income/debt profile of the applicant. That, then, leads to redlining accusations. Which leads to increadingly lax controls.

 

[Cletus11]

good points. As a backdrop, there was a lot of pressure to allow everyone to participate. That led to far too lax processes. Even today, loan approvals are mostly done blindly in that the company doesn't know who is applying. It is all based on the math of the income/debt profile of the applicant. That, then, leads to redlining accusations. Which leads to increadingly lax controls.

In the end, it was about giving people loans that they had no legitimate way to ever pay back 12 months a year for 30 years. The amount of money banks were loaning out based on the percent of income was just off. And many times was based on some very peak salary's that people were making that was not sustainable based on significant overtime or high commissions which were more of a one time thing. There is a recession coming which will end up having some job losses and decreased incomes which are going to end up on foreclosures. But I think the difference is that there is not a housing construction boom right now because of lack of construction materials so I don't see the real estate collapse like the last time around.

 

[Obliviax]

In the end, it was about giving people loans that they had no legitimate way to ever pay back 12 months a year for 30 years. The amount of money banks were loaning out based on the percent of income was just off. And many times was based on some very peak salary's that people were making that was not sustainable based on significant overtime or high commissions which were more of a one time thing. There is a recession coming which will end up having some job losses and decreased incomes which are going to end up on foreclosures. But I think the difference is that there is not a housing construction boom right now because of lack of construction materials so I don't see the real estate collapse like the last time around.

Agree....I see the coming recession being in the league of earlier recessions from 2008...the real bogy being the supply chain issues are something we've never seen before (coupled with extraordinary energy issues)

 

[Cletus11]

Agree....I see the coming recession being in the league of earlier recessions from 2008...the real bogy being the supply chain issues are something we've never seen before (coupled with extraordinary energy issues)

I think the supply chain issues could start to get scary. I mean China is shutting things down now which are only going to make it worse. Whatever we are not getting out of Ukraine and Russia which we know is going to hurt food supply but also Ukraine supplies most of the worlds neon which is used in chip manufacturing where chips are already a massive problem. Russia supplies a lot of minerals (besides it's O&G) that are going to cause issues in almost every sector as base materials to build won't be available. I listened to an interview earlier this week where a CEO of a major grocery store said food has risen 10-15% over the past 6 months and expect it to increase another 10-15% again by Memorial day.

I work in the equipment and construction industry and there are now major electrical components which typically are 3-4 month delivery which are now at 12+ months delivery. I mean parts that we are now literally scouring the internet to find and when we find some random on-line location or physical store that has them buy them up at 3, 4, 5x the normal price. I know of some production facilities which are starting to hoard material and order parts they don't even need as they recognize that delivery times are 6-12 months now and that they have to order general random stuff such that when something breaks in the future they have something already on order to replace it with because the normal lead times to get parts and material just don't exist anymore.

 

[87 Penn St8]

Fellow Lehigh resident checking in with a similar story. One recent one in particular was listed last week in January at $430k, off the market within a week and final purchase price was $485k. Then you have the new 55+ communities that are building 1600 sq/ft homes and selling them for $450k -at those prices I don't know who is "downsizing" to them. Problem is that I just don't see the prices ever coming back to reality - at least in our neck of the woods with being in the greater metro area of NYC and Philly. And lord help us if they ever actually establish train service again to those cities - going to have to move to Pennsyltucky when the cost of living skyrockets.

That's the same dynamic where I live in Chester County 35 miles West of Philly, 9 miles North of Wilmington, DE and easily driveable to Main Line, King of Prussia and we even have some Baltimore/ NYC commuters now.

So the question was give up 2.6 acres of land and privacy in exchange for a smaller home or condo at the same price point? For me, the "as is" without realtors was the key as we are on septic...which every home in my hood has required a $20-30k upgrade, save $30k on realtors, our Master bed/bath need to be seriously upgraded...only rooms we haven't done since we bought in 2002 so assume another $30k plus we need a new layer of shingles. That math is $100,000 of savings that we would need to invest to sell the house that we would've saved so it would have been a kind of multiplier effect on the plus side.

Oddly the offer was from a 38 year old man whose divorced parents sold us the place. He knows the house and property history, can recognize what we've invested (geothermal system, whole house gne, interior renovations etc).

They had a flip in Hockessin, DE that would've worked well too...but the timing just didn't work for either wife. Maybe someday.

To be in our local market you've got to have cash in hand...which requires something to come first to enable a move. We now are likely to sit tight for 5 or so years and possibly retire then and cash out to a less pricey place out of state.

It is neat watching hotarkets right now...we've been tracking Lewes, DE for 10 years and Lancaster City for 2. But our whole exercise lead us to stay put....for now.

 

[PSUSignore]

Then you have the new 55+ communities that are building 1600 sq/ft homes and selling them for $450k -at those prices I don't know who is "downsizing" to them.

A 50 year old crappy 1600 sq ft home on a .25 acre lot in central Austin will cost you over $1M, so that seems cheap compared to what we're seeing here. Buyers here are dropping over $1M only to bulldoze the property and build new. The market here is absolutely bonkers right now.

 

[Rip_E_2_Joe_PA]

Just sold my house in Fl to Zillow.
I asked what they planned to do with it. "Hold it off the Market to push prices up on our other holdings".

At least this market manipulator was honest.

 

[Rip_E_2_Joe_PA]

CoreLogic property report: Watch these overvalued housing markets as home price growth begins to decelerate | Fortune

The real estate research firm says U.S. home price growth is about to decelerate—by a lot.

fortune.com

 

[87 Penn St8]

A 50 year old crappy 1600 sq ft home on a .25 acre lot in central Austin will cost you over $1M, so that seems cheap compared to what we're seeing here. Buyers here are dropping over $1M only to bulldoze the property and build new. The market here is absolutely bonkers right now.

We lived in the Rowayton section of Norwalk, CT in 2001. It is a funky beach community with more boat slips than houses. Traditionally there were hard-core lifers along with a yuppie Fairfield County crowd who would have kids, possibly send them to the local elementary school, but most likely head to New Canaan, Westport, Darien etc when kids were 5, 6, 7 years old.

There were a lot of neat 1920s cottage type homes, our was 1600 square feet on.22 acre property. The smell of salt water permeated everything.

After 9/11 the market went nuts, people fleeing NYC were paying way over asking price and the bulldozers would rip down the homes within hours of closing. The new wave stayed and sent their kids to the private schools. We drove by recently and barely recognized the place...I imagine Austin has the same attraction to a population of people who may want to live in Texas but if not in aajor city nor in the sticks. Location, location, location..

 

[diontechristmas]

Fellow Lehigh resident checking in with a similar story. One recent one in particular was listed last week in January at $430k, off the market within a week and final purchase price was $485k. Then you have the new 55+ communities that are building 1600 sq/ft homes and selling them for $450k -at those prices I don't know who is "downsizing" to them. Problem is that I just don't see the prices ever coming back to reality - at least in our neck of the woods with being in the greater metro area of NYC and Philly. And lord help us if they ever actually establish train service again to those cities - going to have to move to Pennsyltucky when the cost of living skyrockets.

Houses in Pennsyltucky too! I had to sell my mom’s house recently as it was time to get her to an assisted living place. She had a 45 year old ranch that really had never been updated and had a few delayed repairs needed. Sold that thing for 10% over asking in 3 days after having over a dozen offers. Inspections and all that waived by the buyer. In an old coal town with many houses in total disrepair!

5 years ago I wouldn’t expected to get 50k less and have it on the market for some time. It is truly astounding.

There is also a new development going up around the corner from me by my same builders. Full disclosures, my house was in the low 4’s. I was told the new development will start at 700k. I’m sure these houses will be larger, but we’re not talking about mansions here. 700k for 3,5OO square in the valley for new builds is a major and fast increase.

 

[lowhandicapper]

Just sold my house in Fl to Zillow.
I asked what they planned to do with it. "Hold it off the Market to push prices up on our other holdings".

At least this market manipulator was honest.

Corporate everything sucks.
We should treat those with no morals, like we treat those without morals.
Instead we get presidential candidates that say corporations are people......but they shouldn't be taxed like people. Ok then, thanks, makes sense.

 

[PSUSignore]

I imagine Austin has the same attraction to a population of people who may want to live in Texas but if not in aajor city nor in the sticks. Location, location, location..

Austin is well on it's way to "major city" status. Maybe it's already there but the area still lacks some big city perks like museums and effective public transit. The change here in the last 20 years has been astonishing, and unfortunately has come with massive increases in cost of living and home prices. This was the most affordable city in Texas when I moved here, now it's the most expensive. I'm very fortunate that I bought a home a decade ago because I'm not sure I'd be willing to buy at today's prices. The appreciation is nice on paper but means very little when selling only to buy another expensive home in the area. When I came here the area felt like a small town but it had a handful of amenities found in medium sized cities. That small town feel is long, long gone. Unfortunately the amenities and infrastructure hasn't grown at the same pace.

 

[LauderdaleLion]

I’ll add my datapoint. I had to sell my mom’s house in suburban Pittsburgh. Hit the market last weekend. 1950s, 3BR, 2000 sq foot ranch and it definitely had its fair share of updating and some repairs needed. 51 showings and 17 offers over the weekend. Waived all inspections and sold for 46K over ask. Absolutely bonkers.

 

[87 Penn St8]

Austin is well on it's way to "major city" status. Maybe it's already there but the area still lacks some big city perks like museums and effective public transit. The change here in the last 20 years has been astonishing, and unfortunately has come with massive increases in cost of living and home prices. This was the most affordable city in Texas when I moved here, now it's the most expensive. I'm very fortunate that I bought a home a decade ago because I'm not sure I'd be willing to buy at today's prices. The appreciation is nice on paper but means very little I'd sell to buy another expensive home in the area. When I came here the area felt like a small town but it had a handful of amenities found in medium sized cities. That small town feel is long, long gone. Unfortunately the amenities and infrastructure hasn't grown at the same pace.

My mom and sister will be there for a wedding next weekend. They are looking forward...first visit for both.

 

[PSUSignore]

My mom and sister will be there for a wedding next weekend. They are looking forward...first visit for both.

It's a good time of year to visit, the weather is great this time of year. Summer heat is fast approaching.

 

[Rip_E_2_Joe_PA]

Corporate everything sucks.
We should treat those with no morals, like we treat those without morals.
Instead we get presidential candidates that say corporations are people......but they shouldn't be taxed like people. Ok then, thanks, makes sense.

The concept that call people that owns shares or work for a corporation have one mind is absurd on its face without a moment of consideration. 'REDUCTIO AD ABSURDUM'

 

[SLion]

I to study real estate daily. The price of existing real estate has to do with one thing and one thing only, supply and demand. Anyone who contends otherwise wants to sell you something. Currently, the United States is about 4 million homes short of the demand from buyers. Projections don't expect this to level out until 2024 at the earliest. There will be no discount home buying in the near future. However, there will be a glut of foreclosed homes hitting the market once moratoriums end and the distressed market is brought back into the fold.....but.....the distressed market does little for average homebuyer as it is mainly an investors market. Rising interest rates will only shackle buyers from being able to afford "more expensive" houses and not really affect their want or need for new housing.

Except tell me why there was little demand in Jan 2020 and suddenly tons in July 2020? It was artificial rush based on 2% mortgages and trillions of stimulus for firms that did not need it. Zillows and Blackrocks of the world went on residential spending spree creating no slack in housing which drove up prices insanely over last 1.5 years. You think homes rising 30-40% in 18 months is sustainable? It was government manipulation, not free market fundamentals.

 

[GreggK]

Except tell me why there was little demand in Jan 2020 and suddenly tons in July 2020? It was artificial rush based on 2% mortgages and trillions of stimulus for firms that did not need it. Zillows and Blackrocks of the world went on residential spending spree creating no slack in housing which drove up prices insanely over last 1.5 years. You think homes rising 30-40% in 18 months is sustainable? It was government manipulation, not free market fundamentals.

Pretty sure Zillow’s experiment failed miserably and was stopped.

 

[diontechristmas]

Austin is well on it's way to "major city" status. Maybe it's already there but the area still lacks some big city perks like museums and effective public transit. The change here in the last 20 years has been astonishing, and unfortunately has come with massive increases in cost of living and home prices. This was the most affordable city in Texas when I moved here, now it's the most expensive. I'm very fortunate that I bought a home a decade ago because I'm not sure I'd be willing to buy at today's prices. The appreciation is nice on paper but means very little when selling only to buy another expensive home in the area. When I came here the area felt like a small town but it had a handful of amenities found in medium sized cities. That small town feel is long, long gone. Unfortunately the amenities and infrastructure hasn't grown at the same pace.

I’ve never lived in Texas, but traveled for work there quite a bit. Austin is by far the best city in Texas. The feel, the people it attracts and the layout of the city itself, and hope it’s able to grow and change, while still retaining its character.

San Antonio is solid. I consider Dallas “fine” but always comes off as sterile and bland. Houston is a great place to make money, and the food is pretty awesome, but otherwise it’s a “no thanks” for me!

 

[HartfordLlion]

This was a real estate investors conference where nationally known people came to sell their wares. Many very experienced and knowledgeable people were there as well as newbies. However, 85% of the courses offered would probably not help most people because they wouldn't be able to execute what they were instructed.


1. One of the vendors had a girl friend who was a realtor. She is telling him that hedge funds are buying real estate willy nilly, not having any real idea of what they are buying. Also, they are only seeking returns in the 5% range which doesn't give them much room for error. Lots of room here for a big, negative explosion.

2. At a meeting for very experienced investors, many people thought that the reason there hasn't been greater rise in interest rates was that the velocity of money was low.

3. At the same investors meeting virtually all thought that substantial inflation was baked into the system and that it was foolish not to get loans at low rates and leverage your investments.

Myself, I think there is a substantial chance of a harmful rise in interest rates in the next 18 months which could implode the real estate market. I have a decent amount of cash available if that were to happen.

I doubt it will implode. Supply is still very tight. Builders are still being cautious. We don't have the sub prime variable rate scenario we had in 2007/2008. I bought a house that I'm living in 2000. Paid well north of 6%, refinanced down to 5.35%. It's just a reversion to mean after a decaded of ultra low rates. Is it going to flush a bunch of first time buyer out of the market?? Yep. In the end there will be a better balance between buyers and sellers.