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June 13, 2022 at 1:09 PM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826096June 13, 2022 at 11:56 AM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826093
an
Participant[quote=deadzone]Well many folks who bought recently at these all time crazy prices are already stretched thin.
Also, many homeowners took out HELOC in last couple years for remodeling, etc. That was huge during Pandemic.
And if these are Tech workers, their portfolios have been dropping big time this year as the value of their stock options are going up in smoke.[/quote]
Data please. YOu can’t be stretch thin and still get a loan today. Do you have proof that underwriting has changed to allow people to be stretched thin?
HELOC for remodeling, proof/data?June 13, 2022 at 11:29 AM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826088Participant[quote=deadzone][quote=an]
What’s the % of home owners are over-extended and up to their eyeballs in debt? Last I check, it’s much harder to get a loan today than 15 years ago. No liar loans, no no-docs loan, have to have a good LTV and cash reserve. So, would love to see data on this statement.I sincerely hope you’re right and we’ll see another 2008 style crash. Although, it seems like you think it’ll be even worse. Fingers cross that you’re right.[/quote]
Revolving credit at all time high, jumped 20% in April. Meanwhile interest rates going to the moon. Not a good recipe for housing market or economy in general.
https://www.cnbc.com/2022/06/09/credit-card-balances-spike-after-stimulus-checks-helped-reduce-debt.html%5B/quote%5D
Who are the people with the most removing credit? How many of them are home owners? How long have they own their home? Interest going to the moon doesn’t mean much to anyone who have locked into their 30 years fixed at 3%.June 13, 2022 at 10:55 AM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826085Participant[quote=gzz]“ What I am curious about is how a bank would fund a mortgage at 6% when inflation is at 9%.”
They borrow at 0% in checking and 3% in savings accounts, loan at 6%.
There’s no human right to get a return on your savings above inflation. China has had inflation that is double savings account rates for about 30 years now.
All the recent drama is making people forget the long term worldwide trend is aging demographics and a glut of savings.[/quote]
Talking about demographics, millenials have started their house buying later the previous generations, so a huge chunk of them are getting to their mid 30s, so they’ll be looking to buy. It’s still extremely difficult and costly to build here in CA, so simple econ 101 (supply vs demand) tells me either they can’t buy here, or they’ll have to reduce their expenditure somewhere else to buy here. Or, they can choose to rent here, which will continue to drive up rent as their move out of their parents’ homes.There are more millenials than baby boomers. Also, another fact to consider is, people are living longer and they don’t downsize like the used to. So, the supply will continue to be constraint, unless those baby boomers sell. Something tells me, they are sitting on a paid off home with very low tax rate. So, economic crash wouldn’t matter to them.
June 13, 2022 at 10:32 AM in reply to: Yes, the Fed matters a lot; nobody disagrees with that. #826081Participant[quote=deadzone][quote=sdrealtor][quote=deadzone][quote=bewildering][quote=deadzone] But the wildcard is how much stress will occur due to other debt, job losses, huge losses in stock portfolios, etc.[/quote]
Yes. I do wonder about households. Hopefully, most people didn’t overextend to buy properties. My worry is that a serious recession will hurt families that needed two wage earners to afford even the low-interest mortgage.[/quote]
I think the reality is many people did over-extend and continue to be up to their eyeballs in dept. That is the American way. That’s why we are in a bubble and when bubbles pop there is no such think as a “soft landing”.[/quote]
No one cares what you “think” you have no data to support that[/quote]
There is plenty of data out there, not just my opinion.[/quote]
What’s the % of home owners are over-extended and up to their eyeballs in debt? Last I check, it’s much harder to get a loan today than 15 years ago. No liar loans, no no-docs loan, have to have a good LTV and cash reserve. So, would love to see data on this statement.I sincerely hope you’re right and we’ll see another 2008 style crash. Although, it seems like you think it’ll be even worse. Fingers cross that you’re right.
ParticipantWith massive growth of large companies expanding here, maybe forcing for return to office would be a boon for RE in this area.
Participant[quote=sdrealtor][quote=deadzone][quote=sdrealtor]
Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth[/quote]accoutrement of wealth <--> Investment
as
tomayto <--> tomahto[/quote]Again clueless. They are excessive expenditures and luxury items for those that can afford them.[/quote]
Maybe in DZ’s world, Rolex and Ferrari and yacht are also investments.Participant[quote=Coronita][quote=an][quote=Coronita]But where’s prevalent is it’s done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount…For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook’s IPO.
He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.Wishful thinking as this would be wide driver of people forced to sell.[/quote]
Exactly, this is the vehicle for the wealth. Not for your average joe. It allow them to get access to liquity of their stock investment without having to sell it. It’s a win win scenario. Low risk for the lender (easy money).[/quote]It’s goes well beyond the loan… Because of their large pledged assets, an investment bank is more than happy to given them a ridiculously low rate loan product that most normal people cannot get themselves…for the privilege of having a hand in those pledged assets, which the i-bank can do something with now…[/quote]This is why the rich can keep on getting richer… they can play by a different sets of rules.
Participant[quote=Coronita]But where’s prevalent is it’s done by really rich people where their pledged asset is several orders of magnitude larger than the loan amount…For example, a Mark Zuckerberg borrowed $5.95 million on a 1.75% ARM loan from Morgan Stanley, which as you know is an investment bank. So it was probably some pledge asset arrangement. Morgan Stanley was also the company that was the underwriter for Facebook’s IPO.
He later refinanced it to 1.05% 30 year
ARM loan from a standard bank.Wishful thinking as this would be wide driver of people forced to sell.[/quote]
Exactly, this is the vehicle for the wealth. Not for your average joe. It allow them to get access to liquity of their stock investment without having to sell it. It’s a win win scenario. Low risk for the lender (easy money).Participant[quote=sdrealtor][quote=deadzone][quote=sdrealtor]If the tax records indicate a mailing address different than the physical address it’s not a primary residence. There are a few other ways but i think i can answer whether it’s owner occupied with well over 90% confidence level
Second homes are not investment purchases. They are for enjoying
Do you have a zip code to add?[/quote]
Okay, just curious if that is possible to tell how many cash offers are primary. I don’t care about any particular zip, just in general. I understand that 2nd and 3rd home are not necessarily investment properties, but many times if not most times they are. And either way, those homes will be the quickest to be jettisoned in an economic downturn. Also I understand that there are cases where people pay cash for primary, definitely that is more common recently due to the fact that regular people are having to compete with investors and foreign money interests who are paying cash.
In a normal RE market, which we most definitely have not been in for recent years, I expect people paying cash for primary residence was pretty rare.[/quote]
And you would be wrong. In many parts of the country there are lots of cash purchases albeit lower prices in some of them. Its less common here due to high pries but becoming more common as we become more of a destination for the wealthy that can afford those high prices. Considering 2nd or 3rd homes investors is patently false. They are the accoutrements of wealth[/quote]Exactly! That’s similar to calling anyone with a savings or checking account an investor.
Participant[quote=sdrealtor]Those locked into low rates have been gone for a solid month. Don’t forget we still have the transition to 5/7/10-1 arms. Sales will go down the unknown is much inventory do we get and how motivated are sellers. We should see some price erosion through year end but nothing major. Then we hit Spring again. It’s at least a year until we could see bigger changes. Between them and now who knows what else can change?[/quote]
It’ll be interesting to see how this play out. How sticky will the price be…Participant[quote=deadzone]Once again you just typed like 500 characters and didn’t really say anything, just have to counter anything I say, I guess that is your hobby. Mine is Bingo.[/quote]
Must be stressful seeing everything do you do in life as a gamble. Inaction is action, and that’s a gamble too.Participant[quote=Coronita]Svelte, so I’m not sure why there’s a difference, but when I went to Indeed, this is what I got…. [img_assist|nid=27669|title=swsd|desc=|link=node|align=left|width=1259|height=794]
Less that 1 year : $122k
1-2 years: $125.7k
3-5 years: —
6-9 years: 143.8k
10+ years: 164.8Indeed also indicates a $600k cash bonus.
That’s puts the 1-2 years around $131.7k.[/quote]
[img_assist|nid=27670|title=Software Engineer salary -92121|desc=|link=node|align=left|width=1000|height=700]If you put in 92121 instead of just San Diego, you’ll get $132k for less than 1 year and $141k average with 1-2 years being $136k.
Participant[quote=Rich Toscano][quote=deadzone]That’s literally gambling.[/quote]
You are “literally” indistinguishable from a parody account.[/quote]
ouchParticipant[quote=flyer][quote=sdrealtor][quote=flyer]We here are all very fortunate that our kids have, or will have, great careers and help from their families wrt their desired (desired being the key word, as most would probably not want to live in the less expensive alternate options) housing, but this article highlights the affordability issue facing many in America. As expected, San Diego is on one of the charts.
Ehhh….there are lots of nice places. I have no idea if both my kids will want to stay here. It was my dream to live here not theirs. I know there are plenty of places they would be happy and maybe they will choose another one either while Im here or after Im gone. If they want to remain here that will always be an option though. I did my job[/quote]
Oh yeah agree. Just nice to know they have any choice they may desire.[/quote]This reminds me of this clip https://youtu.be/Odx8JvcyIcY
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