Real estate in the aftermath

[outtamojo]

What I see in these fearful predictions of urban real estate prices and people’s desire to move away from urban centers is…
acceptance that our government and institutions are unable to protect us from future pandemics. Gee, I wonder why that would be.

[outtamojo]

… hell any decent mid manager would already be thinking about how to prevent the NEXT pandemic.

[utcsox]

[quote=outtamojo]What I see in these fearful predictions of urban real estate prices and people’s desire to move away from urban centers is…
acceptance that our government and institutions are unable to protect us from future pandemics. Gee, I wonder why that would be.[/quote]

Do you mean this globally or just the US?

[outtamojo]

[quote=utcsox][quote=outtamojo]What I see in these fearful predictions of urban real estate prices and people’s desire to move away from urban centers is…
acceptance that our government and institutions are unable to protect us from future pandemics. Gee, I wonder why that would be.[/quote]

Do you mean this globally or just the US?[/quote]

Ultimately US. America first and a 6 time bankrupt businessman prevent any hope for the time being.

[FlyerInHi]

[quote=outtamojo]… hell any decent mid manager would already be thinking about how to prevent the NEXT pandemic.[/quote]

The next pandemic is in the fall.

[FlyerInHi]

Wow. The lowlife renters are squatting in luxury in the hamptons.
Landlords are going to lose big. With the moratorium to expire aug 20, squatters will be able to stay until October.

https://nypost.com/2020/05/19/non-eviction-order-leads-to-squatting-in-style-in-the-hamptons/

I wonder if there are squatters in San Diego beach houses.

[gzz]

Stock market is higher than 5-6 months ago.

Money printer goes brrrrrrr, ride the wave!

Expected 30 year rate based on bond prices is 2.7% versus actual 3.3%. That means we have a likely additional half point decline in mortgage rates coming.

More work from home means more space needed. Family of four with two home offices needs a 5-bed not 3-bed house.

Also means tech employees can get double their value in San Diego and still commute to SV when needed.

[FlyerInHi]

Maybe Sacramento real estate will go higher because people can drive their Teslas to Silicon Valley for meetings.

According to Redfin, San Francisco is the only market to register a year on year decline.

[Coronita]

In CA, for many people who only made minimum wage, they are collecting UI benefits almost double of what they were making on top of their stimulus checks.

$450 from the state and $600 lump sum, or $1050/week in UI benefits is a lot more than working for $15/hr 40 hrs ($600) each week. And the $600 federal UI benefit virtually has no rules. If you can claim just 1 hr/$1 of loss of income from covid, you get the entire $600. So practically anyone who qualifies for state UI benefits (regardless of how much of that $450 state benefit they get) they automatically get the entire $600/week federal benefit. That’s $2400/month for doing virtually nothing.

And that’s just the UI benefits for 1 person. Two people in a household out of work is $2100/week in UI benefits, or $8400/month. They can afford to live in carmel valley with that, lol. And if there’s a 3-4 person roommate situation, their combined UI benefits is $3150-4300/week…

So don’t tell me that people can’t afford to pay their rent. Maybe a few people, but come on now. It’s not that bad. UI benefits alone is paying for people’s rent. The government cheese right now beats working for many people. Why do you think the state UI office is swamped with millions of calls each day. If anyone wanted to work less and get paid more, this is probably a once in a lifetime event for many people to do that. It literally is a $2400/month free cheese from the federal government, at least until end of July….unless folks like Harris is successful in getting it renewed.

Come on now. Look at these numbers…. $600 extra/week, $2400/month => $14,400 extra money per person for 6 months, or $28,800 extra per couple…. That’s a lot of money for many people in this country who only make min wage. How could people NOT afford their rents, unless they totally mismanage their money??

[FlyerInHi]

[quote=Coronita] How could people NOT afford their rents, unless they totally mismanage their money??[/quote]

Substance abuse and family dysfunction. That’s a big part of American culture.

[Coronita]

And someone making minimum wage who is now claiming they can’t afford the rent, they probably couldn’t afford the rent even before covid…And that’s not a problem with this Pandemic’s economic impact. It’s a problem with the shitty tenant pool a landlord’s properties are being rented too even before covid. Those landlords were bound to have problems for any reason that the economy contracted…. In fact, if anything, the coronavirus gave these landlords that operate in the shittiest tenant pool submarket a temporary lifeline for the next few months, something they would have long been screwed over if the economy had a natural recession with no bailout. Me thinks these landlords that rent to the shittiest submarket are the first to get screwed and should be thankful for all the government cheese that is temporarily holding them over. (with emphasis on temporarily)

In fact, this is probably one of the few times that it’s better to be an employee than a business owner…Government UI benefits and other cheese benefits seem to be a lot easier to get for individuals than businesses and people on these weird ass non-worker non-salaried employees. Like I said, welcome to United States of France. Interesting times.

[FlyerInHi]

I agree that landlords should screen their tenants. But then again, even rich tenants in the Hamptons aren’t paying.

But you still have a big percent of the population that are shit tenants. So, all else being equal, a big portion of real estate is overvalued if you discounts for the shit tenants. It’s irrelevant why people aren’t paying, but that should be reflected in valuation (as you said government prop up is temporary).

Residential real estate is mostly based on comps and momentum. But there are periods when momentum reverses, and periods when values are based more on discounted cash flow. If you hold long-term or “forever”, you never want to buy at a high, on momentum.

If you were a buyer would you not want to discount for the possibility that there could be another flareup in the fall and that the government will impose another moratorium?

[Coronita]

Cities on the verge of a covid driven housing crisis

SF, LA, Fresno, Bakersfield, Riverside, Sacramento on the list. Scottsdale, AZ too.

SD #24

Las Vegas at the top of the list.

Interesting read.
https://www.usatoday.com/story/money/2020/05/20/cities-on-the-verge-of-a-covid-driven-housing-crisis/111782790/

[The-Shoveler]

It seems no one knows LOL

IMO SWRC should do OK.

Weekly mortgage applications point to a remarkable recovery in homebuying

https://www.cnbc.com/2020/05/20/weekly-mortgage-applications-point-to-remarkable-bounce-in-homebuying.html

[FlyerInHi]

[quote=Coronita]Cities on the verge of a covid driven housing crisis

SF, LA, Fresno, Bakersfield, Riverside, Sacramento on the list. Scottsdale, AZ too.

SD #24

Las Vegas at the top of the list.

Interesting read.
https://www.usatoday.com/story/money/2020/05/20/cities-on-the-verge-of-a-covid-driven-housing-crisis/111782790/
[/quote]

I totally agree about Las Vegas probably half the casino employees will not return to work in the short to medium term.
I was lucky because I pretty much I bought at the bottom and all my properties are rented. My properties have a competitive advantage in that they are beautiful.

But I have friends who are not getting paid rent. The evection moratorium is currently indefinite with no date as to when it will end

If anyone wants to buy in Las Vegas, the next bottom is your window of opportunity

[Author]

Posts