The market downturn is here, at least in my market. Anyone else?

182 Replies

@Shane H. A major 'crisis' and/ or a 'recession,' or worse??? Only five, recently. (1973, 1986, 1991, 2000 & 2008, in the US.) I find it amusing that people go off of charts and DC, etc. hedonic (ever more manipulated, since 1982) data and stats... vs. trying to determine what those in power will do next, why, when, as well as who and what they will blame it on, next? Or when their media will be "reading, that script?" (Crypto? Stocks? Bonds? A major War?) Particularly since 2008, in the US we're moreover now in "uncharted waters" under UN subsidiary, Maritime Admiralty 'legalese...' but one thing is obvious, those in power (you've likely never heard of) can order the "printing" of (seemingly) unlimited Xs and Os, plus the approx. 2% of fiat monopoly IOUs in physical circulation (IH$ dollar bills, for e.g.) and shuffle that 'fiat' currency around WORLDWIDE, so the ratcheted leverage just keeps increasing, while the markets for those currencies and everything else "fluctuates," according to individual currencies and nation states, controlling and competing, marketshare. (And WHEN that mountain of "toxic debt" might ultimately "spiral- out," and the entire edifice IMPLODE, is anyone's guess?) Meanwhile watch what the media says, and the 'herd' does next, and do the opposite... or better yet, endeavor to be "ahead of the learning curve," and ignore the siren's song of the moment. :-)

Originally posted by @Scott T. :

@Shane H.   A major 'crisis' and/ or a 'recession,' or worse??? Only five, recently. (1973, 1986, 1991, 2000 & 2008, in the US.)

 Home prices did not go down in all of these recessions. A decline in GDP does not necessarily coincide with a decline in home prices. 2008 (actually 2007) was a unique event in the housing market.

https://fred.stlouisfed.org/series/CSUSHPISA

Originally posted by @Michael Kay :

So what do buy and hold people do in the event of a RE crash?

I've been thinking about it for a while...and it could be a good thing. Rents don't seem like they crash along with prices...so if I find a place that is distressed and buy it with private money and refi then it could work out still.

Could someone check my logic?

 Your refinance value would suffer in the event of a "crash" .  I don't think a crash is coming.  But the market is changing.  People always need a place to live.  The people who got burnt on buy and holds over extended themselves, did not have enough in reserves, and likely overpayed so therefor they NEEDED to get TOP dollar rent just to cover the expenses each month.  Speaking of expenses they likely didnt account for cap ex, vacancy, repairs, and anything not a "utility".  So when others around them dropped their rents $100/m renters went there and they sat vacant.  Even if they did find someone, they were probably not screened well and were the only applicant so they destroy the place and stop paying rent.  Many ways to get burnt on buy and hold.  Non of them are related to the "Value" of the home.  I would advise you purchase with the expectation you cannot get your money back out when you refi.  So for example don't borrow it, because then if you cant get it out your burnt.  Be conservative on rent numbers and increase your expected expenses by 10-20%., and over estimate renovation costs.  Are you still going to be above water?  Then id go for it.   That's a quick and dirty formula we run on properties to decide in 5 minutes if its worth taking a closer look at or moving on.

Originally posted by @Tsilina Aybin :

@William C. We invest In Philadelphia and find it fairly difficult to find deals. We are looking all the time.

What area specifically?  South? Northern Liberties? 

Hyper local real estate. I'm looking within a 1 mile radius. You might be looking the same areas all the other investors think are hot? I don't doubt its hard to find deals. I have not seen one hit the MLS in 6 months...I have just noticed more hitting the market everyday and homes that are listed are sitting a bit longer. If the market "crashed" tomorrow. It could be 6 months before some local markets actually felt it.

Originally posted by @Alex Rodriguez :

There's always a niche in any market to invest in.... Just need a lil thinking outside the box. Besides when the feds announce no rate hikes for a year, then dont expect a real recession in the housing market, especially since we are still below 3% inflation rate. Its going to be more of a global issue at this point. When and "IF" a recession occurs, its only going to bring the prices down around 15%-20% (mild recession). Personally I dont think there will be one. Maybe a slow down (sideways market). I would just be picky on what areas I would invest in (small market areas). Lucky for me im in florida.. why do I say lucky? Lets figure this out.. we still are in a very low interest rate level. This year is when the tax rate on high tax areas like N.Y. will hit people hard for the first time. Baby boomers are in the retirement stages by now. Florida has no state tax. And spring time is the begin time of when northern areas start putting their homes on the market to sell after the winter. Like my favorite saying "Do the math!" Get ready to here how florida will be the only booming market and probably only state that doesn't get a recession affect.

Do you get called Arod a lot?

You are lucky. I have wanted to move to Florida for about 10 years. Family is the only thing keeping me here. I simply hate the cold, 

Great points....Id agree regarding the severity of this downturn. Id be more surprised to see prices fall than if they just remained flat for an extended period of time. Just not the same market conditions as 2007. And Id agree with that being a growing market with all of the baby boomers hitting retirement age. I'm lucky enough to get down there once a winter to thaw out though.

@Patrick Philip Pat, I have a "bad habit" of posting, then 'editing' multiple times. (Drives some people 'nuts...' along with my "creative punctuation," and sarcasm.) I thought Shane was unfamiliar with the literally HUNDREDS of (UN "nation state and territory") ups and downs, since many of us have been around (I'm now over fifty...) let alone that the US was reinc. in 1870, 1933 and 1982, for e.g. 2008 was MUCH more severe and overarching than anything prior... since the former US (of A) went into bankruptcy receivership in 1933, after the staged US Civil War that 'bankrupted' us, in 1870. The thing people need to 'get' is the "bigger picture..." and realize that everything is now "a business..." on up to the top of the food chain hierarchy, and these "markets" are now ALL RIGGED. The KEY is not getting "caught with your hand still in the cookie jar" when they slam the lid down again! And their drag nets were cast back out a decade ago, as par... so who knows when they'll be reeled back in... amidst the propagandic media 'pomp,' explaining how and why that supposedly occurred, this time?! (Afterall, next to NONE of this ever occured before 1913... Gee, I wonder WHY, this is!?)

The interesting thing is that it appears they got 'scared' after it nearly IMPLODED the last crime cycle, around. Afterall, the "US" is their BIGGEST game play and defacto 'fiat' currency, since 1973 when the Nixon Admin removed the last vestiges of the "Gold Standard" and they 'pegged' the U$D to big energy and OPEC was formed, etc. I now think of it as one big casino... since that's basically all it IS today. And that's WHY I'm doing (next to no liability or money down) "creative terms," vs. taking out bank loans, as one example, unless it's a fairly QUICK in and out, paper flip... nearing the TOP of the current, or any future "seller's market." ;-) Scott


Originally posted by @Brian Ploszay :

The residential market had a slow down during the autumn market.   For investment real estate, multi-family sales volume was down last year, suggesting over-pricing for some assets.   And the profit margins for flips have been compressing the last few years.  This crowd was complaining their finished inventory sat on the market too long late last year.   But I see no indication that there is a sudden increase in "flip worthy" properties.  Those still get snatched up.

A coming recession may be on the way, but there are still some positive indicators in the economy such as high employment levels and increases in wages in certain sectors.  More important, lending is still active, including well defined hard money.  Experienced, hard money lenders in my market are not taking back properties in a significant way - a metric that I find to be predictive.

 I would agree completely.  Might just be an anomaly in my tiny little market?  Since I wrote the OP, Iv had 2 more lots/new construction opportunities land on my desk.   We are well past running our of capital, I'm running out of investors to turn to.  Still anecdotal.  Still could just be my lucky day.   Just when I start to think it's my lucky day, is when I'm taking a step back to see the big picture, and why all these deals are still in front of me.   The hard money lenders is an interesting take, I would think by the time they are taking properties back it might be a bit too late, or at least 6-9 months removed from the correction.  @jay hinrichs would be able to shed some light on that for sure.  

Originally posted by @Jason Jolgren :

@William C.

Western slope of Colorado - Grand Junction - is polar opposite. Anything reasonably priced is gone within hours!

 Did you the  OP, or any of my responses? I understand there is still pent up demand for the buyers who have been losing out to 10 other offers for the past 12 months. I am referring to distressed stuff.  Renovated properties, priced right, are selling in hours here as well.  "Priced right" seems to be the key phrase here.  Some agents are pricing as if we are in a rising market.  So a model match that sold last month is now listed for $5k more....And sellers are reading the (old) headlines that the market it hot and they are trying to get as much as they can, or at least they think if they ask for more, then maybe they'll get more.  Gotta leave some room to negotiate, right?

@William C. our market is seeing more DOM compare to a year ago and of course inventory has also increase, we're also seein a decline in pending sales as well. What I'm seeing at our local level is that the market is making it's correction and prices hasn't drop by much and I think more seller are getting more realistic with what they are asking vs a year ago when homes were flying off the MLS with multiple offers.

Originally posted by @Account Closed :

@William C.

buffet he says something like buy while others are scared be scared when others are buying.

On buying philosophy I have stacks of questions.

Does anyone here make investment decisions based on information they think indicates what everyone else is doing?

So other investors actions would be a basis for making investment decisions?

I have two problems with this. What if this is an anomaly. Like in a smaller market bad weather delayed a lot of rehabs and many flippers are behind schedule. Not that this is what’s going on but it really could be anything.

Data doesn’t always reveal what’s really happening.

Second are you sure the data you are using can be used to predict the direction of the market?

How many times have you been right on this type of call?

Is this proprietary data bc I’ve learned that if you have a secret indicator and it’s going to make money well then petty soon it’s not so secret.

Buffet also says about market timing.......

"I never have an opinion about the market because it wouldn't be any good and it might interfere with the opinions we have that are good," Buffett said. "If we're right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do. … If you're right about the businesses, you'll end up doing fine."

 I think you are referring to J Paul Gettys quote "Buy when everyone is selling and sell when everyone is buying"   Thats exactly what I'm trying to do here

Does anyone here make investment decisions based on information they think indicates what everyone else is doing?  Dont know, dont care, but dont really understand either.

So other investors actions would be a basis for making investment decisions?  No.  We buy what fits our model.  

Second are you sure the data you are using can be used to predict the direction of the market?   I Its not a prediction if its already happened, is it?  

How many times have you been right on this type of call? I   Its not something I do on a monthly or yearly basis, but Iv been predicting this shift for about 12 months now.  I was not in the market in 2007.  So once I guess?

The market is different now, than it was 6 months ago, and than is was 12 months ago in my market.  I just wanted to hear whats happening in other markets. 

Buffets quote is "Be fearful when others are greedy, and greedy when others are fearful" That's also a quote Im trying to live by here.  I think sellers are getting greedy.  I think investors are getting greedy.  I think builders are getting greedy.  When my hairdresser wants to get in on the next flip we do because she heard the market it hot, and saw how easy it was on TV, its time to rethink things.  Iv called this a possible anomaly, maybe its my lucky day.... I'm simply giving the facts, as I see them, in my market. We will try to scoop every last one of these up. It's simply not reasonable, or feasible, and we've been sitting on the sidelines ready to jump in for about 6 months, and now all of the sudden 5,6,7 deals land in our lap, with more coming everyday?  I'm sure you'd be thinking twice if you were in my shoes.  Iv been doing this 10 years, expert, but Iv seen enough to know Iv never seen anything like this before. I am just trying to start a conversation, to see what other markets are experiencing. I am in no way trying to claim I am Nostradamus as previously implied by another poster, I'm just telling it like I see it. I'd be happy to wake up in 6-12 months with sold signs on every one of them and renters in the others, and I will be sure to dig up this old buried thread and tell everyone how wrong I was. It's not about being right, it's just ones mans opinion.   I appreciate the input.  Did you have any evidence to the contrary, if you read my OP I started this so people could disagree.  Saying I'm wrong because I'm wrong doesn't help anyone.  Are there articles, or facts, or anecdotes from your experiences in your market that are pointing in the opposite direction.  Or do you just take issue we me making some kind of bold prediction like I know it all?  Because I don't.  Part of me hopes I'm wrong , but mostly I hope I'm right,  but not to be right, because I like it better when I have 10 deals to chose from compared to zero.

Just bought a SFR in San Antonio. Can't tell right now, but prices were declining jut a bit, the usual, and not too excessive "for sale" availability thought. Will have to wait until just before summer when things go little crazy (school break etc). But I think markets like San Antonio or other big cities in Texas will remain strong.

I remember 2011-2013, the majority of the houses I looked back then needed a lot of care, repairs, or just outdated. The houses I looked after that, were well maintained, upgraded, or even with a lot of competition with the offer. Class A properties and neighborhood of course.

Are you experiencing anything like that now in your area?  I hope not.  

The Honolulu Hawaii market is still strong.  

Our luxury market Months on Hand (MOH) inventory is at 6.9 months vs 5.8 month for the same four week period last year.  That's up, but 7 is considered a neutral market, and that number has been trending down week over week since late last year.

Our Total Market MOH is also up from 2.6 last year (same four weeks) to 3.1 this year.  This number has also been trending down since late last year.  The 3.1 MOH metric indicates a firm seller's market still.

Inventory is 30% higher than last year.  That's a big jump, though there are lots of buyers currently still eager to purchase.

Originally posted by @Tsilina Aybin :

@William C. We invest In Philadelphia and find it fairly difficult to find deals. We are looking all the time.

 The Philly Market is Competitive, for the most part some people (including myself) still look to see what is out there, some of the guys in the group im apart of somehow find a way to find deals either getting referred one or having an owner respond to their ad/bandit sign/ flyer, ect...

Originally posted by @William C. :
Originally posted by @John Hickey:

@William C.

buffet he says something like buy while others are scared be scared when others are buying.

On buying philosophy I have stacks of questions.

Does anyone here make investment decisions based on information they think indicates what everyone else is doing?

So other investors actions would be a basis for making investment decisions?

I have two problems with this. What if this is an anomaly. Like in a smaller market bad weather delayed a lot of rehabs and many flippers are behind schedule. Not that this is what’s going on but it really could be anything.

Data doesn’t always reveal what’s really happening.

Second are you sure the data you are using can be used to predict the direction of the market?

How many times have you been right on this type of call?

Is this proprietary data bc I’ve learned that if you have a secret indicator and it’s going to make money well then petty soon it’s not so secret.

Buffet also says about market timing.......

"I never have an opinion about the market because it wouldn't be any good and it might interfere with the opinions we have that are good," Buffett said. "If we're right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do. … If you're right about the businesses, you'll end up doing fine."

 I think you are referring to J Paul Gettys quote "Buy when everyone is selling and sell when everyone is buying"   Thats exactly what I'm trying to do here

Does anyone here make investment decisions based on information they think indicates what everyone else is doing?  Dont know, dont care, but dont really understand either.

So other investors actions would be a basis for making investment decisions?  No.  We buy what fits our model.  

Second are you sure the data you are using can be used to predict the direction of the market?   I Its not a prediction if its already happened, is it?  

How many times have you been right on this type of call? I   Its not something I do on a monthly or yearly basis, but Iv been predicting this shift for about 12 months now.  I was not in the market in 2007.  So once I guess?

The market is different now, than it was 6 months ago, and than is was 12 months ago in my market.  I just wanted to hear whats happening in other markets. 

Buffets quote is "Be fearful when others are greedy, and greedy when others are fearful" That's also a quote Im trying to live by here.  I think sellers are getting greedy.  I think investors are getting greedy.  I think builders are getting greedy.  When my hairdresser wants to get in on the next flip we do because she heard the market it hot, and saw how easy it was on TV, its time to rethink things.  Iv called this a possible anomaly, maybe its my lucky day.... I'm simply giving the facts, as I see them, in my market. We will try to scoop every last one of these up. It's simply not reasonable, or feasible, and we've been sitting on the sidelines ready to jump in for about 6 months, and now all of the sudden 5,6,7 deals land in our lap, with more coming everyday?  I'm sure you'd be thinking twice if you were in my shoes.  Iv been doing this 10 years, expert, but Iv seen enough to know Iv never seen anything like this before. I am just trying to start a conversation, to see what other markets are experiencing. I am in no way trying to claim I am Nostradamus as previously implied by another poster, I'm just telling it like I see it. I'd be happy to wake up in 6-12 months with sold signs on every one of them and renters in the others, and I will be sure to dig up this old buried thread and tell everyone how wrong I was. It's not about being right, it's just ones mans opinion.   I appreciate the input.  Did you have any evidence to the contrary, if you read my OP I started this so people could disagree.  Saying I'm wrong because I'm wrong doesn't help anyone.  

I won’t  get into a lot of what you said.  No arguments.  

I never said you were wrong.  

anyone trying to time the market I would caution them....what makes you think you can do it that’s why I’m asking if you’ve done it before. You’ve been doing something making money.   

 In any successful business there is a formula. If others want to copy that model and be successful that’s an easier way to get successful   

So the Q. Who is timing markets successfully and how do they do it. People can and have done it   The problem is no one does it consistently.   If you time it once and make 300% the next time they usually lose. And the time they did it? Luck  

More then likely though they lost out on good deals sitting it out waiting for the correction.

Unless your planning to forge the way, which if you could do it would be amazing. 

Otherwise I would say to anyone attempting market timing that it’s a waste of time.

Are there articles, or facts, or anecdotes from your experiences in your market that are pointing in the opposite direction.

No I don’t make any calls on market direction.

  Or do you just take issue we me making some kind of bold prediction like I know it all?  

I don’t take issue with it  it’s an interesting conversation what the market is doing.  I like that.  trying to predict the market direction while talking about investing is the part I think is nuts.

If the market starts dropping right now I’ll finish what I’m doing and buy again   

If the market keeps going up.....I’ll finish what I’m doing and buy again.

Because I don't.  Part of me hopes I'm wrong , but mostly I hope I'm right,  but not to be right, because I like it better when I have 10 deals to chose from compared to zero.

 You could be right.  Have you thought about looking into a business that’s not so correction sensitive? Rentals maybe or storage?

Originally posted by @Jay Hinrichs :

@Tyler W.   see below these are the market reports we get every week pretty detailed and the graph stats folks love them.. my wife sets her clients up on these and of course we use them for our activies we are building in Lake Oswego for example 


Hi Lori - here’s this week’s market report!
Access your report(s) for
West Linn, OR →





Beaverton, OR →





Portland, OR →





Lake Oswego, OR →








A few questions these reports can help you answer:
    Is now a good time to buy or sell? Check the “Market Action Index” to see if the market is heating up or cooling down.
    How’s the market in my price range? Click into the “Market Segments” charts to see the how the market is behaving.
    What can I get in my price range, and where should I look? Use the “Median List Price” charts to see what buyers are getting for their money. To view market stats on other areas, simply enter the Search button at the top of the page. Feel free to share this report with clients or on social media, and please let me know if you have any questions or need additional resources. I’m happy to help in any way I can!

 That is a great report. Thank you for sharing it. I've subscribed. 

I guess it's all relative.  I would love this to be considered the down turn but at the moment, I just see a bit of leveling off.   Nothing like 2008 but then again this next cycle might be nothing like it.

Thoughts, in no particular order:

1. If you follow what other smart people are doing, you're probably too late to the game anyway.

2. All real estate markets are local. Broad 'national' trends don't necessarily have any effect on your town's ground game. I live in one market and work in another. During the GR the market I work in was a bust, with a lot of foreclosures. The one I live in didn't even notice there was a GR. 

3. A correction or pause in upward prices doesn't mean the end is nigh. I don't know why people think this is the case with real estate (still a consumer product, even if it's a big one) when they don't think this of any other product. 

4. There's always opportunity out there. You just have to make your strategy match your locale, or make your locale match your strategy. 

5. Question was what are we seeing in our areas. In my local area virtually everything "low-priced" on the MLS is already under contract. 7 figure stuff sits longer but I'm not in a high wealth area. Just about anything decent that hits the market under $300k is snatched up almost faster than you can go look at the property. Definitely a hotter market now than it was a year ago, and I thought it was really hot then. I (personally) am about to hit the sideline for a bit, not because I think there's going to be a crash but because the returns are narrower than they were and I have to consider whether I want skinnier returns or to deploy into other investments.

@William C.

We are in the northeast and overbrook area. It is a hot area but it's all we know. Haven't been able to get a deal from MLs is over 1.5 years. Everything is wholesale and your right, last few weeks more and more are hitting the market.

We bought our first property a few years back for 60k after renovations in appraised for 125. Now it’s assessed for 160K. My thoughts on a crash/correction is for prices to stabilize and go back to 3-4 years ago prices. As of now everything we are seeing is ~20% over prices and there are cash buyers paying. Don’t think this market is stabilizing yet....

Originally posted by @William C. :
Originally posted by @Scott T.:

@Jay Hinrichs Hey Jay, I was reading that a year ago approx. 40 of the primary 300 plus (or 200 or more they monitor) US markets were already showing major signs of a 'correction...' but of course nearly ALL of those main metros also have micro demographics therein with neighborhood market maturation stats that are not "the average" brush bristles the faux media tends to paint the "herd" into the corral with, about every decade to get them to 'stampede' for the exit doors, only to get 'slaughtered,' time, and again! (And some areas will mostly remain up, down, or 'correct' up to 50% plus either way, so knowing what to be in or not, where, when and why (so you realize when to EXIT) are all valid concerns! 

I believe I have a better 'approach' than this "buy -n- hold" mentality that remains almost entirely beholden to whims of a highly controlled and regulated "casino play..." just like the rest of their "what goes UP, must come down, roller coaster" games. And like ANY 'commodity,' homes that are bought and resold like clockwork ultimately can 10- 100X say a 15- 30 year play, with 3:1 interest, to principal... so it amazes me that ANYONE is still buying, holding and "renting" SFRs, in the 21st Century?! (Unless they EXIT prior to every correction. And good luck, with that!) 

I know noone wants to tie- up $500k. plus into the aforementioned in "investor unfriendly" California, however if they opted to "think outside the box..." they might even 'rethink' their perspective, in lieu of what I'm envisioning??? If you know of anyone that would consider acquiring properties in the North Bay, etc., I just rented a place in Calistoga, last month. (I couldn't stand the heat in the Valley of to much sun... so I came back to Cali, for now, and Sonoma and Marin counties were a total "rat race..." so I am for now, in a town with minus 6000 people?)

The pre- foreclosures here (Napa, Sonoma, Marin counties, the Bay Area, Sac, etc.) are definitely intriguing me, especially after the additional things I've leaned (and since thought of, that relate) recently regarding what to do with these "little to no equity" homes x10 - 15 million, just in the US. I need to find a few (then more) "private lenders" and utilize OPM while paying them well to do some 60- 120 day deals (i.e. Cash resales, vs. lease purchase deals) so if you see anything that looks 'intriguing' near me to check- out and/ or know of any investors (for either California north, south and/ or in NV, AZ, etc.) I suspect the ROI will exceed the alternatives the vast majority of these guys are making, elsewhere (i.e. Like 99% of them...) precisely because I'm not your average "cud chewer, grazing on conformity..." until they close my CQV 'trust' account. ;-) Let me know if you want to know more about what I'm eluding to here? ATB :-) Scott T.

 huh?  I'd like to know more about what you are smoking, stuff must be fire.  no pun intended.

Yea, why would anyone think of buying and holding SFR in the 21st century? No body makes money doing that anymore.

That's not true at all. My business is SFR and doing well. My cash flows are in the $500 a month range with long term tenants paying all of the bills outside of mortgage and tax. Appreciation is an added bonus. I'm right up the road from you in the Lehigh Valley.

Originally posted by @Lucas Carl:

Has any one considered the possibility that the popularity of Bigger Pockets has anything to do with real estate prices being high? I’m sure it would be impossible to prove that variable, but I do have constant newbs messaging me wanting to buy one house so they can quit their job. Food for thought! BP Rules

I think about this all the time. Think about how many (young) people are thinking about their first home purchase DIFFERENTLY now that House Hacking, BRRRR, etc. strategies are becoming more and more popular. Also, real estate is sexy right now, wait until it cools off again, rinse and repeat.

Originally posted by @Amy Leonard :
Originally posted by @William C.:
Originally posted by @Scott T.:

@Jay Hinrichs Hey Jay, I was reading that a year ago approx. 40 of the primary 300 plus (or 200 or more they monitor) US markets were already showing major signs of a 'correction...' but of course nearly ALL of those main metros also have micro demographics therein with neighborhood market maturation stats that are not "the average" brush bristles the faux media tends to paint the "herd" into the corral with, about every decade to get them to 'stampede' for the exit doors, only to get 'slaughtered,' time, and again! (And some areas will mostly remain up, down, or 'correct' up to 50% plus either way, so knowing what to be in or not, where, when and why (so you realize when to EXIT) are all valid concerns! 

I believe I have a better 'approach' than this "buy -n- hold" mentality that remains almost entirely beholden to whims of a highly controlled and regulated "casino play..." just like the rest of their "what goes UP, must come down, roller coaster" games. And like ANY 'commodity,' homes that are bought and resold like clockwork ultimately can 10- 100X say a 15- 30 year play, with 3:1 interest, to principal... so it amazes me that ANYONE is still buying, holding and "renting" SFRs, in the 21st Century?! (Unless they EXIT prior to every correction. And good luck, with that!) 

I know noone wants to tie- up $500k. plus into the aforementioned in "investor unfriendly" California, however if they opted to "think outside the box..." they might even 'rethink' their perspective, in lieu of what I'm envisioning??? If you know of anyone that would consider acquiring properties in the North Bay, etc., I just rented a place in Calistoga, last month. (I couldn't stand the heat in the Valley of to much sun... so I came back to Cali, for now, and Sonoma and Marin counties were a total "rat race..." so I am for now, in a town with minus 6000 people?)

The pre- foreclosures here (Napa, Sonoma, Marin counties, the Bay Area, Sac, etc.) are definitely intriguing me, especially after the additional things I've leaned (and since thought of, that relate) recently regarding what to do with these "little to no equity" homes x10 - 15 million, just in the US. I need to find a few (then more) "private lenders" and utilize OPM while paying them well to do some 60- 120 day deals (i.e. Cash resales, vs. lease purchase deals) so if you see anything that looks 'intriguing' near me to check- out and/ or know of any investors (for either California north, south and/ or in NV, AZ, etc.) I suspect the ROI will exceed the alternatives the vast majority of these guys are making, elsewhere (i.e. Like 99% of them...) precisely because I'm not your average "cud chewer, grazing on conformity..." until they close my CQV 'trust' account. ;-) Let me know if you want to know more about what I'm eluding to here? ATB :-) Scott T.

 huh?  I'd like to know more about what you are smoking, stuff must be fire.  no pun intended.

Yea, why would anyone think of buying and holding SFR in the 21st century? No body makes money doing that anymore.

That's not true at all. My business is SFR and doing well. My cash flows are in the $500 a month range with long term tenants paying all of the bills outside of mortgage and tax. Appreciation is an added bonus. I'm right up the road from you in the Lehigh Valley.

I think he was being sarcastic, Amy. :) 

Originally posted by @Lucas Carl:

Has any one considered the possibility that the popularity of Bigger Pockets has anything to do with real estate prices being high? I’m sure it would be impossible to prove that variable, but I do have constant newbs messaging me wanting to buy one house so they can quit their job. Food for thought! BP Rules

I have thought about this. The popularity of rental properties is increasing at an exponential rate and BP along with the FIRE community have glamorized it, much like flipping was glamorized by HGTV prior to the 2008 crash. 

The problem is many newbies are under capitalized, under experienced and in over their heads. I see stories of people getting OUT of real estate investing after the actual returns prove lower and headaches prove higher than expected. The smart ones are selling and getting out while prices are higher. The problem will be if too many try to get out at the same time, which will cause prices to drop.

You are right, it is hard to validate the effect of BP as a variable, but no doubt it is a variable.

Im the new guy, literally started my BP membership last week. I am Military who just transferred to San Diego, Ca. We were looking to purchase a SFH and I did get notice from multiple loan officers that rates have gone down. Would it be wise to rent for the next 3-6mos and wait to see if these drops lead to a recession or should I jump on a home we are ready to purchase for ourselves? Please advise any and all is welcome. I'd hate to go upside down on home value (there goes the idea of HELOC).

Originally posted by @Patrick Philip :
Originally posted by @Scott T.:

@Shane H.   A major 'crisis' and/ or a 'recession,' or worse??? Only five, recently. (1973, 1986, 1991, 2000 & 2008, in the US.)

 Home prices did not go down in all of these recessions. A decline in GDP does not necessarily coincide with a decline in home prices. 2008 (actually 2007) was a unique event in the housing market.

https://fred.stlouisfed.org/series/CSUSHPISA

I started in RE in 75  so don't recall 73 but in CA houses did go down in all those recessions or stagnated.. 91 in the bay area there was 50% price decline in the higher end.. I was loaning money then.. so had a front row seat to that one..  2000 was very short lived with minor adjustments.. 07 08 we all know about..   I think this was regional as well  just like it always is 

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