Housing crash deniers ???

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Housing crash deniers ???

Greg R.
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

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Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
4y

The market may correct, but I firmly believe there won't be a crash.  The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford.  We heard stories of cleaning ladies buying multiple million dollar homes.  When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity.  They couldn't sell and get out.  We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging.  Given the laws passed after the Great Recession, appraisals and lending is highly restricted.  Appraisals have not been keeping up with prices and lenders won't lend above appraised value.  We sold a house in 2021 and in one day had 20 offers.  Several of them had acceleration clauses stating they would pay more than anyone else up to $X.  Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering.  They had to make up the difference with cash.  Those people have a ton of equity in their homes.  If they had to sell, they might take a haircut, but they aren't going to get foreclosed. 

There is no  house of cards here to come tumbling down.

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y

    So... many of the deniers were saying that inventory would continue to fall, which would prevent prices from dropping. So far that's been false. Inventory isn't where it was years ago, but it is increasing - not decreasing. 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:
    Quote from @Greg R.:
    Quote from @Michael Wooldridge:
    Quote from @Greg R.:
    Quote from @Michael Wooldridge:
    Quote from @Greg R.:
    Quote from @Nicholas L.:

    @Greg R.

    just as a reminder, here's what you said in your 5th post to this thread:

    "I would say take the 10 years prior to the bubble and get the average rate of appreciation. Use the same rate of appreciation for 2021 & 2022, once you get to where values are at that point, that's the market correction. Crash is beyond that."

    i haven't done the math to see what that would be. and i think you'd agree that it's not the case that every single market corrects to that... right?


    Greg this is for you.
    Redfin agrees market bottom is at Q2 or Q3 2023 before a rebound:

    https://www.redfin.com/news/ho...

    I kind of wish Redfin said the opposite. They are really good at being wrong. However, a broken clock is still right twice a day. 

     but this time redfin is validating your point :) hahaha so you and redfin has same opinion LOL

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Greg R.:
    Quote from @James Hamling:

     So your saying, when we are at WAR with China, no-way no-how is manufacturing and trade relations going to shift to S. America? That is, yet again, one heck of a ignorant thought path. 

    why in the world the so-called strongest country in the world has to have a war with a country that is having a very productive economy?

    what kind of issue are people trying to solve?

    another colonial mindset? LOL

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Carlos Ptriawan:
    Quote from @Greg R.:
    Quote from @James Hamling:

     So your saying, when we are at WAR with China, no-way no-how is manufacturing and trade relations going to shift to S. America? That is, yet again, one heck of a ignorant thought path. 

    why in the world the so-called strongest country in the world has to have a war with a country that is having a very productive economy?

    what kind of issue are people trying to solve?

    another colonial mindset? LOL

    The idea that we're going to be at war with China anytime soon is asinine. To your point, who exactly benefits from a war between the US and China? China makes a ton of money off trade w/ the US. And the US gets incredibly cheap manufacturing from China which supports the US economy. In an armed conflict both sides lose way more than they gain, regardless of who wins militarily. James watching too much Netflix & war movies. 

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


     Nashville? 

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


     Nashville? 


    Boston, MA?
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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Greg R.:

     Nashville? 


     yeah, these are all your cities. In our zip code, inventory is "zero". Nada. Zero. 

    Openhouse here attracts 50-60 people in two weekends. 

    Just look at the number of Airbnb in that city, it's just crazy LOL. we are lucky because those STR inventor doesn't invest here.

    So what happen in Austin stays in Austin LOL

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  • Renee Harris
    Real Estate Agent · Los Angeles, CA · Member since 2015 · 218 posts · 111 votes
    3y
    Quote from @David Song:

    @Greg R.

    Housing prices will always go up. Buy anytime. - bigger pockets.com

    Reality: numerous REI lost their life savings in 2009 and maybe 2022. Over leveraging, insufficient reserve, short term loan with balloon payment, etc.

    Flippers bought in Q1 2022 will learn the lesson now. Many of them are losing their shirt. None will tell you publicly.

    The price decline started in April 2022, and has been declining for the last 4 months. The bottom has not been reached yet. This is nationwide, from CA to Texas, everywhere. 


     This is indeed happening. I'm seeing it with investors I closely work with

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


     Nashville? 


    Boston, MA?

    Bottom line, inventory is up almost across the board. Yes, some places more than others - of course. However, the deniers were saying that when rates rose and buyers became skeptical that sellers would simply pull out and inventory would tank. However, the opposite has happened - inventory has risen.

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


     Nashville? 


    Boston, MA?

     boston is flattening. triple digit inventory only increases in the city that I listed above.

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  • Renee Harris
    Real Estate Agent · Los Angeles, CA · Member since 2015 · 218 posts · 111 votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


    Do that for Los Angeles, please.
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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Carlos Ptriawan:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


     Nashville? 


    Boston, MA?

     boston is flattening. triple digit inventory only increases in the city that I listed above.

    Who said anything about tripling? Look at inventory at the beginning of the year and look at it now. It's up. Rates went up, buying conditions worsened and inventory has increased. 

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Renee Harris:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


    Do that for Los Angeles, please.

     Here you go. Los Angeles, CA. Inventory up from a year ago. 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y


    Bottom line, inventory is up almost across the board. Yes, some places more than others - of course. However, the deniers were saying that when rates rose and buyers became skeptical that sellers would simply pull out and inventory would tank. However, the opposite has happened - inventory has risen.

     we already know the inventory is rising to 2020 level. But with the current moving average of inventory, we are still within 3 months inventory--very far from crash territory--, it looks like we would not reach 2019 level inventory or even if we would , the buyer would just catch most of the inventory from the bottom price which is estimated to hit the bottom Q2-Q4 this year. 

    February number is the key.

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

     you are saying the very obvious.
    of course if interest rate is rising then inventory would increase.

    but that's not the point, the point being, originally people think there would be much worse situation, with inventory only moving to 2020 level, we thought before it would hit 6 months inventory, the fact it only reached 3-4 months inventory, it's still in the safe category.

    There're lot of knowledge in this aspect that we know even before 2021.

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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Carlos Ptriawan:


    Bottom line, inventory is up almost across the board. Yes, some places more than others - of course. However, the deniers were saying that when rates rose and buyers became skeptical that sellers would simply pull out and inventory would tank. However, the opposite has happened - inventory has risen.

     we already know the inventory is rising to 2020 level. But with the current moving average of inventory, we are still within 3 months inventory--very far from crash territory--, it looks like we would not reach 2019 level inventory or even if we would , the buyer would just catch most of the inventory from the bottom price which is estimated to hit the bottom Q2-Q4 this year. 

    February number is the key.

    That is irrelevant to the point I am making. My point is simple... the deniers insisted that inventory would completely bottom out, that sellers would exit the market and wait for selling conditions to improve. That is completely false - that didn't happen. All the folks who were beating that drum were wrong. 

    Inventory is up and prices are starting to come down - much more dramatically in some areas than others.
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  • Greg R.
    OP
    Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
    3y
    Quote from @Carlos Ptriawan:

     you are saying the very obvious.
    of course if interest rate is rising then inventory would increase.

    but that's not the point, the point being, originally people think there would be much worse situation, with inventory only moving to 2020 level, we thought before it would hit 6 months inventory, the fact it only reached 3-4 months inventory, it's still in the safe category.

    There're lot of knowledge in this aspect that we know even before 2021.


    Not sure which people you are talking about. I never made any arbitrary "x months of inventory" claims. It's completely possible for prices to significantly decrease even if "months of inventory" doesn't hit the magic number of 6 or whatever.   

    I've maintained that this is going to take time, and be a slow collapse of the housing market, which we're seeing in real-time. 

    We've still yet to see the full impacts of inflation, mass layoffs, and other negative economic factors. 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

     you are saying the very obvious.
    of course if interest rate is rising then inventory would increase.

    but that's not the point, the point being, originally people think there would be much worse situation, with inventory only moving to 2020 level, we thought before it would hit 6 months inventory, the fact it only reached 3-4 months inventory, it's still in the safe category.

    There're lot of knowledge in this aspect that we know even before 2021.


    Not sure which people you are talking about. I never made any arbitrary "x months of inventory" claims. It's completely possible for prices to significantly decrease even if "months of inventory" doesn't hit the magic number of 6 or whatever.   

    I've maintained that this is going to take time, and be a slow collapse of the housing market, which we're seeing in real-time. 

    We've still yet to see the full impacts of inflation, mass layoffs, and other negative economic factors. 


     it will recover when M2 back to normal which is mid or Q3 this year, by 2024 people would forget what happen in 2023.

    We are already visiting so many open houses lately and it's best time to buy SF ; to sell in 2028, at least in my market. Lot of traffic in Jan compare to December.

    I would not buy condo as condo price has stabilized a lot and doesn't give much discount.

    I tried to profit between today's bottom and the peak of june 2022 which should be in 2026-2027 timeframe. 200k-300k is guaranteed from Zillow chart LOL.

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

     like i said, no increase of inventory in major CA city lol,

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Greg R.

    I would agree that it's hard to describe what's going on right now, that's why I have liked @James Hamling's term 'stagflation.'  

    And I'll say this: I've benefited from this thread and both yours and his posts.  So there.  I'm here to learn and I'm learning.

    Here's what I'm seeing.  I'm one guy in one medium sized market.  Sales have gone down, but prices haven't - in my market sales are down 34% YoY and prices are down 5% YoY. Anything in decent shape that is reasonably priced still gets a strong offer almost immediately, while anything overpriced sits, but since the sellers still want last year's price, they'd rather let the listing expire than take a low offer.

    And I still think that the pullback in new inventory is going to help prop prices up.

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    3y
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Greg R.:
    Quote from @Carlos Ptriawan:

    If you see the insight data, only the following city has triple digit active inventory YoY

    Austin
    Vegas
    Nashville
    Phoenix
    Northwest
    Jacksonville

    Other city is pretty much regressed to 2020 inventory level.


     DFW?


     Albuquerque, NM?


     Oklahoma City?


     Nashville? 


    Boston, MA?

    Bottom line, inventory is up almost across the board. Yes, some places more than others - of course. However, the deniers were saying that when rates rose and buyers became skeptical that sellers would simply pull out and inventory would tank. However, the opposite has happened - inventory has risen.

    @Greg R.

     Who said inventory would tank (besides James and I don't believe he ever used those words)? I said inventory would remain tight. Historically it's still tight hence why all of the East Coast while volume is way down, inventory is up from COVID levels (we all knew it would go up so this tank is hilarious) yes but it's still historically low and at a healthy level. 

    Hence the stagnation on east coast. And if you go back to my predictions (where I said no crash outside of key markets like West, Austin etc..) that we would see lower sales volumes (100% seeing that everywhere), low inventory (it still is) and if you look at inventory after the initial increase from the April/May time frame. it's been flat inventory last few months in almost all markets you even showed. 

    So frankly seems like none of those predictions are really far off. Unless it goes up again by that amount in summer. Also I don't believe what you are using is seasonly adjusted. Is it? If not then that's something else to consider considering time of year. 

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