Anyone else waiting to buy once things settle?
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Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
3yYou have 6+ million reasons to trust your own judgment...nice work.
69 Replies
- Member since 2020 · 671 posts · 937 votes3y
Just echoing @Dan H.. I guess I don't like fishing, but I do like shooting fish in a barrel:
-Central Valley of California - 2009-2012
-Jacksonville, Fl - 2020-2021
Zero effort. Rents vs. leveraged mortgage payments made sense. I'll just dollar cost average into mutual funds/stocks until someone brings me another barrel.
You're a real estate professional, have connections, invest more time, effort, etc. It's tough for a guy like me to compete against that as I'm not interested in trying to match your level of hustle.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Dan H.:
Quote from @James Hamling:
Quote from @Chris John:
Simple math states that if the rates have more than doubled, the P&I monthly cost doubles. This implies for similar P&I payment, the property has to be priced at about 50% of what it was before the rate increase. It is a rare market (Are they any that have fallen close to 50%?) that has fallen 50% from the recent market high. This makes it challenging to purchase properties that produce the same COC when financed that could have been achieved at the beginning of 2022.
I occasionally still analyze deals but have not purchased since December 2021 (I purchased $4m that month). I have only made one offer since that time, and it was not close to the accepted price. The person who purchased was willing to have a return far lower than I require (I talked to him about his numbers).
this market , especially in CA, is not for rental market ; but for flips and/or owner-occupant. Best time to upgrade primary house.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Luka Milicevic:
Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
The question is WHEN will things settle down? What is settle down?
There will always be "something" to contend with.
From price chart technical analysis, price is already "settled down".
Seasonality is major factor, first quarter in 2023 the activity is reverse of last qurter of 2022.This is race to 2022 high again already started.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Chris John:
Just echoing @Dan H.. I guess I don't like fishing, but I do like shooting fish in a barrel:
-Central Valley of California - 2009-2012
-Jacksonville, Fl - 2020-2021
Zero effort. Rents vs. leveraged mortgage payments made sense. I'll just dollar cost average into mutual funds/stocks until someone brings me another barrel.
You're a real estate professional, have connections, invest more time, effort, etc. It's tough for a guy like me to compete against that as I'm not interested in trying to match your level of hustle.
I give you Gold Star Chris! You highlight a very important facet that no book or "Guru" program ever touches on, they just pump how everyone should always be exerting maximum efforts. But as you say, that's not a fit for everyone, it means competing against others like myself, who are in this FT, leveraging massive resources, networks etc.. Yes, it "can" be done, 100%, but that's not to say everyone would be happy to do such.
I applaud your knowing they-self and acceptance without excuses. Your going to do well, virtual high-5.
- Investor · Astoria, NY · Member since 2016 · 46 posts · 21 votes3y
Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Similar strategy here, but waiting for things to get a little more crazy let’s say then actually “” settle
- Investor · Astoria, NY · Member since 2016 · 46 posts · 21 votes3y
Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Similar strategy here, but waiting for things to get a little more crazy let’s say then actually ““ settle
- Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes3yThe best time to buy is when sellers are nervous- which is now.
Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Also, starting to see quite an increase in buyer activity, and inventory is decreasing. I expect some hefty appreciation (I am confident this will take place in my area- also likely nation-wide) by the end of 2023. - 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
I'm still buying but I'm not encountering many nervous sellers =)
They all want peak 2021-2022 prices!
- 3yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Chad McMahan:
The best time to buy is when sellers are nervous- which is now.Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Also, starting to see quite an increase in buyer activity, and inventory is decreasing. I expect some hefty appreciation (I am confident this will take place in my area- also likely nation-wide) by the end of 2023.Why would sellers be nervous? Most have rates so low that they could not buy a property for 50% of their current property at the same P&I payment with existing LTV. In addition it they purchased more than a year ago they still have positive appreciation in most (virtually all) markets.
Certainly the market is not showing sellers to be that nervous. Many markets still have positive appreciation YOY. Very few markets have significant depreciation YOY. Most of the markets that do have depreciation YOY are those that had the biggest appreciation going into 2022. I know of no large market that is down from the beginning of 2021.
Does not seem that many sellers are nervous or desperate.
- 3yJack KrusinskiBusiness MemberRealtor · Cleveland/Akron OH · Member since 2019 · 141 posts · 91 votes
I am a believer in time in the market, not timing the marketing. If you find good deals no sense in waiting till market conditions are perfect. Because, most likely, they will never be perfect. If you find the right property, date the rate and marry the property. At least, that is how I invest.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes3y
I have always been on the buy side, but our market in Milwaukee is stalling in a way I would have never thought possible: accepted offers are down 65% in Fab (same as Jan), at the same time prices up 15% YoY.
We have a major disconnect between what buyers are used to and where market values go based on supply (lack of), causing the market to stall. Inventory remains a major problem. It will take time for this to sort out. And lower rates.
I think this year 2023 will see markets equalize across the country. Some markets the have seen exuberance in the last 3 years will soften back towards the national averages, while markets that are still undervalued will creep up towards the national average.
- 3ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
You may be interested in Cincinnati, OH. Landlord friendly, cash flow/appreciation friendly in certain areas, etc! And if you cross the river to KY, you will get almost the exact same and lower property taxes!
Sam McCormack Realtor - Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes3yWow. Here prices are pretty realistic. But buyer activity is significantly picking up.
Quote from @Nicholas L.:
I'm still buying but I'm not encountering many nervous sellers =)
They all want peak 2021-2022 prices!
- Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes3yHi Dan.
Quote from @Dan H.:
Quote from @Chad McMahan:
The best time to buy is when sellers are nervous- which is now.Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Also, starting to see quite an increase in buyer activity, and inventory is decreasing. I expect some hefty appreciation (I am confident this will take place in my area- also likely nation-wide) by the end of 2023.Why would sellers be nervous? Most have rates so low that they could not buy a property for 50% of their current property at the same P&I payment with existing LTV. In addition it they purchased more than a year ago they still have positive appreciation in most (virtually all) markets.
Certainly the market is not showing sellers to be that nervous. Many markets still have positive appreciation YOY. Very few markets have significant depreciation YOY. Most of the markets that do have depreciation YOY are those that had the biggest appreciation going into 2022. I know of no large market that is down from the beginning of 2021.
Does not seem that many sellers are nervous or desperate.
Infinite reasons why sellers might be nervous, considering as how nervousness is emotional, not logical. I hear endless speculation about why the market is guaranteed to drop, etc. My point is not whether these sellers are correct. In fact, I disagree with them. My point is, buy while more sellers are nervous, which gives buyers a better deal.
However, it's worth mentioning- I think the softened market will be over soon. Out here in the Sedona area I'm seeing a significant increase in buyer activity. Soon, we will have a reduced inventory and prices will start climbing. - 3yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Chad McMahan:
Hi Dan.Quote from @Dan H.:
Quote from @Chad McMahan:
The best time to buy is when sellers are nervous- which is now.Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Also, starting to see quite an increase in buyer activity, and inventory is decreasing. I expect some hefty appreciation (I am confident this will take place in my area- also likely nation-wide) by the end of 2023.Why would sellers be nervous? Most have rates so low that they could not buy a property for 50% of their current property at the same P&I payment with existing LTV. In addition it they purchased more than a year ago they still have positive appreciation in most (virtually all) markets.
Certainly the market is not showing sellers to be that nervous. Many markets still have positive appreciation YOY. Very few markets have significant depreciation YOY. Most of the markets that do have depreciation YOY are those that had the biggest appreciation going into 2022. I know of no large market that is down from the beginning of 2021.
Does not seem that many sellers are nervous or desperate.
Infinite reasons why sellers might be nervous, considering as how nervousness is emotional, not logical. I hear endless speculation about why the market is guaranteed to drop, etc. My point is not whether these sellers are correct. In fact, I disagree with them. My point is, buy while more sellers are nervous, which gives buyers a better deal.
However, it's worth mentioning- I think the softened market will be over soon. Out here in the Sedona area I'm seeing a significant increase in buyer activity. Soon, we will have a reduced inventory and prices will start climbing.The stats show that the sellers are not nervous enough to have lowered prices close to enough to compensate for the rate increase. In every market I am aware of the P&I on high LTV financed property is much higher than a year ago even with the modest price declines in some/many markets.
In summary, every market would have on average significantly lower P&I on the property if purchased in beginning of 2022 versus today. In my view this shows the sellers are not nervous enough.
- Member since 2021 · 2 posts · 1 vote3yI don't think moneys getting any cheaper. I'd like to see things settle down, but we have never seen government spending as insane as the last 4 years. I'm afraid the damage is done.
- Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes3yI'm not really interested in arguing. I'm just telling you what I'm seeing in my market area. As a real estate agent, my transaction volume was in the top 1% of the country in 2022, and 98% of my transactions are STR investors. I only mention this so you understand I'm not "green". I study the market and the opportunities within, harder than anyone.
Quote from @Dan H.:
Quote from @Chad McMahan:
Hi Dan.Quote from @Dan H.:
Quote from @Chad McMahan:
The best time to buy is when sellers are nervous- which is now.Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Also, starting to see quite an increase in buyer activity, and inventory is decreasing. I expect some hefty appreciation (I am confident this will take place in my area- also likely nation-wide) by the end of 2023.Why would sellers be nervous? Most have rates so low that they could not buy a property for 50% of their current property at the same P&I payment with existing LTV. In addition it they purchased more than a year ago they still have positive appreciation in most (virtually all) markets.
Certainly the market is not showing sellers to be that nervous. Many markets still have positive appreciation YOY. Very few markets have significant depreciation YOY. Most of the markets that do have depreciation YOY are those that had the biggest appreciation going into 2022. I know of no large market that is down from the beginning of 2021.
Does not seem that many sellers are nervous or desperate.
Infinite reasons why sellers might be nervous, considering as how nervousness is emotional, not logical. I hear endless speculation about why the market is guaranteed to drop, etc. My point is not whether these sellers are correct. In fact, I disagree with them. My point is, buy while more sellers are nervous, which gives buyers a better deal.
However, it's worth mentioning- I think the softened market will be over soon. Out here in the Sedona area I'm seeing a significant increase in buyer activity. Soon, we will have a reduced inventory and prices will start climbing.The stats show that the sellers are not nervous enough to have lowered prices close to enough to compensate for the rate increase. In every market I am aware of the P&I on high LTV financed property is much higher than a year ago even with the modest price declines in some/many markets.
In summary, every market would have on average significantly lower P&I on the property if purchased in beginning of 2022 versus today. In my view this shows the sellers are not nervous enough.
Good luck. - 3yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Chad McMahan:
I'm not really interested in arguing. I'm just telling you what I'm seeing in my market area. As a real estate agent, my transaction volume was in the top 1% of the country in 2022, and 98% of my transactions are STR investors. I only mention this so you understand I'm not "green". I study the market and the opportunities within, harder than anyone.Quote from @Dan H.:
Quote from @Chad McMahan:
Hi Dan.Quote from @Dan H.:
Quote from @Chad McMahan:
The best time to buy is when sellers are nervous- which is now.Quote from @Jack B.:
Own a 6+ million dollar portfolio currently. Was more until recent price declines. Waiting to buy more once things settle, rates go back down, etc.
Also, starting to see quite an increase in buyer activity, and inventory is decreasing. I expect some hefty appreciation (I am confident this will take place in my area- also likely nation-wide) by the end of 2023.Why would sellers be nervous? Most have rates so low that they could not buy a property for 50% of their current property at the same P&I payment with existing LTV. In addition it they purchased more than a year ago they still have positive appreciation in most (virtually all) markets.
Certainly the market is not showing sellers to be that nervous. Many markets still have positive appreciation YOY. Very few markets have significant depreciation YOY. Most of the markets that do have depreciation YOY are those that had the biggest appreciation going into 2022. I know of no large market that is down from the beginning of 2021.
Does not seem that many sellers are nervous or desperate.
Infinite reasons why sellers might be nervous, considering as how nervousness is emotional, not logical. I hear endless speculation about why the market is guaranteed to drop, etc. My point is not whether these sellers are correct. In fact, I disagree with them. My point is, buy while more sellers are nervous, which gives buyers a better deal.
However, it's worth mentioning- I think the softened market will be over soon. Out here in the Sedona area I'm seeing a significant increase in buyer activity. Soon, we will have a reduced inventory and prices will start climbing.The stats show that the sellers are not nervous enough to have lowered prices close to enough to compensate for the rate increase. In every market I am aware of the P&I on high LTV financed property is much higher than a year ago even with the modest price declines in some/many markets.
In summary, every market would have on average significantly lower P&I on the property if purchased in beginning of 2022 versus today. In my view this shows the sellers are not nervous enough.
Good luck.To agents it is always a good time to sell and buy.
If rates more than double, prices need to almost half to have same P&I for high LTV purchase. This is math and requires no market knowledge.
Now to the markets that you track. Has any had average price decline near 50%? if so, what are the markets that have declined 50%. if the property has not declined close to 50%, the P&I for high LTV purchase is greater than it was when the rates were less than half of today's rates.
Again it is in the math. There is nothing to argue in math. It is precise and not based on opinion.
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