[sdrealtor]

[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]

I know. Im the one who actually looks at it every day

[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

[sdrealtor]

The housing market is not getting killed. Inventory is still a small fraction of what it traditionally is. Lots of homes selling every week albeit less than a couple months ago but more choices is helping meet the unfilled demand. It’s a market coming back into balance. I pour over data many hours a week. I’m not seeing sign a ton of equity withdrawal this time around like 17 years ago. DZ has never owned a home, never participated in the housing market and knows very little about it. If you want a weekly blow by blow follow the two weekly housing monitor updates i post. That’s what is going on around here

BTW in SD overall we had 15% less homes listed in May 2022 than May 2021.

[sdrealtor]

[quote=scaredyclassic][quote=bewildering][quote=sdrealtor]Not close to as bad, not the same planet, not the same universe. In 08/09 we were dealing with loans from folks that couldnt payback what they borrowed at 0% interest. The existing loans out there are nearly all very high quality. Any future loans made will be also. There is still massive demand for homes from high quality credit folks. What is out of whack at the moment is affordability. This is simply a pricing issue for loans, MBS and homes that will work itself out over the next few years without a crash[/quote]

Thanks.

Yeah, I am guessing that existing loans are fine as people have priced in with very low-interest rates. although I guess the banks that held on to those loans are now losing money?

What I am curious about is how a bank would fund a mortgage at 6% when inflation is at 9%. I guess that the banks are thinking that inflation will drop eventually and the 6% loan will make money?

I am originally from Europe where people do not get fixed loans for 30 years. Precisely because the banks would lose real money if the inflation gets above the interest rate. My sister is concerned at her monthly mortgage going up by ~$500 when she next renews the mortgage (every few years it gets adjusted with her partilar typ eof laon).[/quote]

The bank sells the loan. Some entity buys it for some weird reason. It is bewildering.[/quote]

The banks have capital like our checking and savings accounts. They pay interest on that capital but lend it out at higher rates. Simplified version of how they make money

[sdrealtor]

Not close to as bad, not the same planet, not the same universe. In 08/09 we were dealing with loans from folks that couldnt payback what they borrowed at 0% interest. The existing loans out there are nearly all very high quality. Any future loans made will be also. There is still massive demand for homes from high quality credit folks. What is out of whack at the moment is affordability. This is simply a pricing issue for loans, MBS and homes that will work itself out over the next few years without a crash

[sdrealtor]

Here you go teaboy this one was easy.

92129
attached 26 sales 5 were cash

longtime local lives in ZIP and 1st investment property or for family member

Local investor owns 5 other rentals and primary in CV all paid off

Primary owner occ

Investor – high end property
Investor – high end property

The 3 that were most likely investors were wealthy Chinese folks living in CV

Not a big market for investors and some could be buying for extended family but for arguments sake lets call 4 out of 5 investors.

detached 65 sales and 4 were cash

First two were defintely purchased by fix and flip investors at low prices. They will be in and out quickly

Bought by large local church likely as place for clergy to reside

Bought by wealthy local family that had some well covered in the news issues with a family member. This is definitely not an investmemnt as owner is big time investor that would have bought through fund not personally

Bottom line this ZIP is not really one with lots of cash investors and most seems to be CV overflow buying for investment or family.

Nothing really notable here

[sdrealtor]

While working on 92129 I found a couple flyhomes transactions. They dont actually close as cash transactions and there is a loan with Flyhomes as the lender and the buyers agent. Debunked that one

[sdrealtor]

[quote=pinkflamingo]I appreciate both points of views. DZ thinks that there will be deflation. Others think that we’ll have inflation and or leveling.

Only time will tell. The Fed’s zero interest rate policy took two years for housing prices to get to this level. Here is an example of the insanity https://www.redfin.com/CA/Encinitas/656-Lomas-de-Oro-Ct-92024/home/4180685

I’m thinking it will take about the same amount of time for it to go down. With a big if. JPow is not PVolker no matter how much he mentions the name.

In the meantime, can we keep the debates cordial?

Lots of name calling on both sides. Can we refrain from typing the word “you”, “you are” or “username” in a response? I think that would help a lot. Keep the rebuttals on ideas instead of people.

@sdr thanks for putting out the data.
@dz thanks for being one of the few deflationist.[/quote]

What’s insane about that house? Have you ever tried to find a 3000 sq ft one story home that’s turnkey on a nice big view lot with a 3 car garage around here? I’ve been selling real estate for almost 25 years. I have been through hundreds of agent meeting and networking events. I can never remember attending a single one where somebody didn’t raise their hand and say I’m looking for a nice turnkey one story with a view on a nice size lot with a three car garage. Those are unicorns. Did you look at that thinking you might buy it? Good luck finding and buying a house like that in any market good or bad

And if your question is about the difference in price from prior sale? It was sold far below market in an off market probate/trust sale, was a complete disaster and had to be completely rebuilt and remodelled. The house next to it sold for $1.6M in 2015. The house sold this year is completely different than the one last year that was not a normal arms length transaction

[sdrealtor]

Uhhhh anything can be bought as an investment. That doesn’t make the item an investment. You buy gold jewelry as an investment because it’sa stable store of value you can buy at a discount. That’s not reality for 99.99%. Mr T did not buy it as an investment

[sdrealtor]

[quote=deadzone][quote=sdrealtor]
Not common and certainly not common here. Not even a chance[/quote]

Perhaps, but you have no way of knowing. Just looks like a cash deal to the outsider.[/quote]

Not true. Those are short term loans. They need to be refinanced into a regular loan. Those guys are just offering cash to close but want out quickly

Pledged asset loans are a different thing and for the wealthy

[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.

[sdrealtor]

Sure. I’m packing it in for the day getting ready for my weekly wine dinner with friends. I’ll try to look at one or two more zips tomorrow

[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

[sdrealtor]

Typo above. Out of state buyer not investor

And the second one. Forgot to add the time period is April/May closed sales for all

92009 Detached
61 sales of which 11 are all cash. These will be much easier

10 are primary residences. The last and most expensive is owned by someone that owns at 3 others locally. This is the nicest one and seems to be case of moving up but there’s a chance it could be used as high end rental. Person does not appear to be employed and my guess would be inherited wealth/property. Id consider this one investor possible

There are essentially no cash investor purchases up here in single family homes. The buyers are a pretty impressive group of law partners, executives, workers at high flying tech/health care companies and financial professionals. they all seem to have bought very nice homes for their families to live in.

[sdrealtor]

[quote=deadzone][quote=pinkflamingo]Nice! I’m curious as well. What I found so far.

Startups that let you do this. Flyhomes and ribbon. General idea is you pay a little more and they get you a “cash offer”. Not 100% sure how they work.

Not really using cash in a cash offer. From reddit, “They’re providing proof of funds via assets they don’t actually plan to liquidate to purchase the home. EX: I put in a cash offer, proof of funds via my 401k. I am getting a mortgage” I’ve heard OpenDoor has a “cash backed” offer.

Loan against assets.
I’ve heard of people getting loans against their 401k and/or stock portfolios. Is this a new thing? Is it via margin loan or is there a new financial vehicle. I would like to know more about this and what happens if the portfolio falls.[/quote]

I’ve heard about these techniques (tricks) too. If this is common, what’s going to happen if we have a 30-40% crash in stock market, to all of the folks who secured these real estate loans using their 401K, brokerage account or corporate stock options as collateral? When that margin call hits, will they be kicked out of their house like a bank Repo?[/quote]

Not common and certainly not common here. Not even a chance

[Author]

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