Housing crash deniers ???
Most Popular Reply
Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votesThe 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.
2904 Replies
- Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes4y
https://thehill.com/policy/fin...
already seeing some “official” price drops in some markets. I thought there was no inventory? I thought nobody will sell?Also, here is an interesting quote from the article
“Hale noted that home prices “cool off as we move from the heat of the summer into the fall. But this reflects more than seasonal cooling in prices.”
Next month, there will be more places on the list and the amounts larger.
- Member since 2022 · 25 posts · 5 votes4y
Quote from @John Carbone:
https://thehill.com/policy/fin...
already seeing some “official” price drops in some markets. I thought there was no inventory? I thought nobody will sell?Also, here is an interesting quote from the article
“Hale noted that home prices “cool off as we move from the heat of the summer into the fall. But this reflects more than seasonal cooling in prices.”
Next month, there will be more places on the list and the amounts larger.
Anyone else hoping there’s a crash? Buying opportunity?
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesNot hoping for anyone to suffer, but a moderate correction will most certainly provide investors with opportunities....simple math/supply and demand....
Quote from @Edward Kanive:
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
Quote from @Bruce Woodruff:
Not hoping for anyone to suffer, but a moderate correction will most certainly provide investors with opportunities....simple math/supply and demand....Quote from @Edward Kanive:
Every day is a GREAT day to buy! Every-single-day! The only thing that changes is what your buying, where and how.
If your a 1 trick pony, well, better get used to a lot more cloudy days then sunny ones cowboy.
- Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes4y
Quote from @James Hamling:
Quote from @Bruce Woodruff:
Not hoping for anyone to suffer, but a moderate correction will most certainly provide investors with opportunities....simple math/supply and demand....Quote from @Edward Kanive:
Every day is a GREAT day to buy! Every-single-day! The only thing that changes is what your buying, where and how.
If your a 1 trick pony, well, better get used to a lot more cloudy days then sunny ones cowboy.
This is where @James Hamling is at right now. I’ll be updating as we move into next year.
- Member since 2019 · 7k+ posts · 4k+ votes4yIf there's one thing that I could learn from 2008 : there's ample time to buy in real estate. Real Estate is not like a stock, there's no need to hurry, no need to become a FOMO buyer. For 4 years 2009-2013, the market bottomed. If this is to happen again, the price in 2028 would not be much different than in 2024 anyhow.
I am a buyer for credit investment now, but not for equity investment as the market can whipsaw anyone. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
Quote from @Bruce Woodruff:
Get rid of the Fed and let the 'Free Market' do it's thing. Will bad things happen? Of course....but it will make the Goobermint much more careful when they no longer have the ability to bail themselves out over and over.
But that's the rub isn't it, we don't really have a "free market" do we.
We have a global market. And in this global market, we have competing currencies, competing governments, competing theories of societies, how to govern, to what ends, how to view citizens. We are at an inflection point. We intermingled economies before our systems of societies were compatible in any way shape or form, and we have now forged inter-dependencies of economies that can not easily be unwoven.
Think on that, we talk about free market but also that it's a global market. how "free" can a global market be when there is what, 147 different "leaders" of it? With another 100 or so oligarchs behind each of the 147. This, today, is the reality of globalization.
How can Communist China ever be compatible with U.S.A.? They are fundamentally opposed, yet our economies are supposed to be able to balance in a "free" and fair manner?
- Member since 2022 · 485 posts · 216 votes4y
Quote from @Carlos Ptriawan:
I am a buyer for credit investment now, but not for equity investment as the market can whipsaw anyone.Absolutely no rush. But in 08 there wa no reason to not buy, if the deal was solid. All that mattters is do the numbers make sense. If so then buy because your money is losing value to inflation and lost rental revenue anyway.
- Member since 2019 · 7k+ posts · 4k+ votes4y
How can Communist China ever be compatible with U.S.A.? They are fundamentally opposed, yet our economies are supposed to be able to balance in a "free" and fair manner?
US and China's relationship is like brothers that hate each other. In front of everyone, they talk badly about each other, but in the back, there's glowing love between them hahaha the US needs China and China can't survive without US.
What makes really a difference between the two? US is a self-sustainable country because it's a net positive oil producer. China on the other hand, the biggest oil consumer. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Mike DeKuiper:
@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.
Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.
Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.
Should. Probably. Maybe. All of the above.
As a Lender, question:
What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?
Have you seen anywhere stating that fannie and freddie would do that?
I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.
And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.
Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
- Member since 2019 · 7k+ posts · 4k+ votes4y
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Don't you think to support 50 year mortgage, the country must have 50 years Treasury product as well ???? we only up to 30Y Treasury.
Btw this ultra long term debt is actually not a new thing. One reason why China economy can really expand globally is because they offer
Multi-century loan project to Asia/Africa country. - Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes4y
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Mike DeKuiper:
@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.
Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.
Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.
Should. Probably. Maybe. All of the above.
As a Lender, question:
What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?
Have you seen anywhere stating that fannie and freddie would do that?
I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.
And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.
Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Do you just hate math? I already showed you the difference in payments, it is not significant. Please understand math and interest rates.
And yeah, when will we have the 50 year treasury anyway 😂 you going to buy those 50 year notes James? I think the people you are hearing this from are the same clowns from early 2000s that came up with the teaser rates, only atleast then it actually temporarily lowered payments significantly.
Also, how are those stock purchases you made after the obvious bear market rally last week? I recall you touting what great buys you made when SPX was near 3800. Last I checked it’s barely holding 3600. Please continue to telegraph your investment decisions so I can easily continue to fade them.
- Member since 2022 · 485 posts · 216 votes4y
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Mike DeKuiper:
@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.
Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.
Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.
Should. Probably. Maybe. All of the above.
As a Lender, question:
What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?
Have you seen anywhere stating that fannie and freddie would do that?
I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.
And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.
Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Do you just hate math? I already showed you the difference in payments, it is not significant. Please understand math and interest rates.
And yeah, when will we have the 50 year treasury anyway 😂 you going to buy those 50 year notes James? I think the people you are hearing this from are the same clowns from 2008 that came up with the teaser rates, only atleast then it actually temporarily lowered payments significantly.
This. It’s why I made the comment - there’s not a single person in finance I’ve heard this comment from in any level of seriousness I’ve heard this from at lender level to execs at he big banks.
Even the existing products are not to the type of people it would have any value too on Long term loans.
Now all that said. If Fannie and Freddie back it we will see things change but tat would be from a political angle not financial level that makes sense.Not to mention the only people it will benefit is investors. Well second thought if not political might make sense for the rich to make more money - so might happen because of that 😂
- Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes4y
Quote from @Carlos Ptriawan:
If there's one thing that I could learn from 2008 : there's ample time to buy in real estate. Real Estate is not like a stock, there's no need to hurry, no need to become a FOMO buyer. For 4 years 2009-2013, the market bottomed. If this is to happen again, the price in 2028 would not be much different than in 2024 anyhow.
I am a buyer for credit investment now, but not for equity investment as the market can whipsaw anyone.Yeah, there really will not be a rush, and it will take time to find a bottom. It actually will take several years. I bought my first real estate transactions in 2012, my first primary and my first rental. People thought I was crazy because there was so much pain for so long. Fed trying to get everyone used to no ZIRP, will take some time for the masses to accept it.
When I predicted the housing bubble in 2008, it was also fairly obvious. I had a good friend who worked for countrywide and he was telling me how he was making so much money doing mortgages. I dig into the obvious math and realized once rates went up it was game over. My grandparents had some 1000 square foot house that was worth 200k, it went up to 400k, and I remember my friend saying, “that thing is going to 600k easily” that’s when I knew for sure.
Fast forward to now, and I see the same things in my friend then, as I see in James. Pretty much a clone.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
Quote from @Carlos Ptriawan:
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Don't you think to support 50 year mortgage, the country must have 50 years Treasury product as well ???? we only up to 30Y Treasury.
Btw this ultra long term debt is actually not a new thing. One reason why China economy can really expand globally is because they offer
Multi-century loan project to Asia/Africa country.No, not at all. The pre '08' MBS market showed us just how fast that entire market is to adopt varying unique and new iterations of MBS's. For a time it was nearly a new product every few months if not weeks. I believe the market is hungry for such as it's been a bit starved for such since the post '08' regulatory actions.
The only thing that matters is if the MBS will sell, and how well it will sell, that's it. And as of recent there has been issues with getting buyers for MBS. How you get more buyers is simple, make it more profitable. How do you make it more profitable and cheaper for home buyer simultaneously. Change the math in a way that most consumers won't comprehend, won't care of because consumers are so instant gratification.
As Buffet says, the system is designed to reward the patient with the wealth of the impatient.
- Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes4yThe market is hungry for home values to drop to reasonable levels so people who make median incomes can actually afford a home without sleight of hand crap from the realtor community that will only make things worse.
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Don't you think to support 50 year mortgage, the country must have 50 years Treasury product as well ???? we only up to 30Y Treasury.
Btw this ultra long term debt is actually not a new thing. One reason why China economy can really expand globally is because they offer
Multi-century loan project to Asia/Africa country.No, not at all. The pre '08' MBS market showed us just how fast that entire market is to adopt varying unique and new iterations of MBS's. For a time it was nearly a new product every few months if not weeks. I believe the market is hungry for such as it's been a bit starved for such since the post '08' regulatory actions.
The only thing that matters is if the MBS will sell, and how well it will sell, that's it. And as of recent there has been issues with getting buyers for MBS. How you get more buyers is simple, make it more profitable. How do you make it more profitable and cheaper for home buyer simultaneously. Change the math in a way that most consumers won't comprehend, won't care of because consumers are so instant gratification.
As Buffet says, the system is designed to reward the patient with the wealth of the impatient.
- Member since 2022 · 485 posts · 216 votes4y
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Don't you think to support 50 year mortgage, the country must have 50 years Treasury product as well ???? we only up to 30Y Treasury.
Btw this ultra long term debt is actually not a new thing. One reason why China economy can really expand globally is because they offer
Multi-century loan project to Asia/Africa country.No, not at all. The pre '08' MBS market showed us just how fast that entire market is to adopt varying unique and new iterations of MBS's. For a time it was nearly a new product every few months if not weeks. I believe the market is hungry for such as it's been a bit starved for such since the post '08' regulatory actions.
The only thing that matters is if the MBS will sell, and how well it will sell, that's it. And as of recent there has been issues with getting buyers for MBS. How you get more buyers is simple, make it more profitable. How do you make it more profitable and cheaper for home buyer simultaneously. Change the math in a way that most consumers won't comprehend, won't care of because consumers are so instant gratification.
As Buffet says, the system is designed to reward the patient with the wealth of the impatient.
Given how they have treated minimum payments and other things in cc. Good luck getting this through regulation. Unless Fannie and Freddie back it it’s a non starter.
- Member since 2022 · 25 posts · 5 votes4y
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Mike DeKuiper:
@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.
Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.
Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.
Should. Probably. Maybe. All of the above.
As a Lender, question:
What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?
Have you seen anywhere stating that fannie and freddie would do that?
I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.
And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.
Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Do you just hate math? I already showed you the difference in payments, it is not significant. Please understand math and interest rates.
And yeah, when will we have the 50 year treasury anyway 😂 you going to buy those 50 year notes James? I think the people you are hearing this from are the same clowns from early 2000s that came up with the teaser rates, only atleast then it actually temporarily lowered payments significantly.
Also, how are those stock purchases you made after the obvious bear market rally last week? I recall you touting what great buys you made when SPX was near 3800. Last I checked it’s barely holding 3600. Please continue to telegraph your investment decisions so I can easily continue to fade them.
I think buying any stock right now is a wonderful investment. The best time to buy is when it’s coming down!
- Rental Property Investor · Knoxville, TN · Member since 2018 · 24 posts · 28 votes4y
@Jay Hinrichs
My thoughts exactly. The deals are still out there if you make the right deal. In any environment, you can do well if you do it right. There will always be a Chicken Little running around squaking that the sky is falling(market crash).
While they panic, it leaves the real deals to the ones with the patience, knowledge and persistence to take advantage of them.
- Member since 2019 · 7k+ posts · 4k+ votes4y
Quote from @Edward Kanive:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Quote from @James Hamling:
I think buying any stock right now is a wonderful investment. The best time to buy is when it’s coming down!
Totally, if the target investment is for 2025 when Fed back to the 2.5% FFR regime, the cheapest asset right now is stock in tech/finance/bio/EV that's producing cash flow. Even REIT public investment is more attractive now than a direct rental, not just because of the cash flow but because they're mispriced.
There's quite a difference in valuation between public and private REITs right now. - Member since 2019 · 7k+ posts · 4k+ votes4y
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Carlos Ptriawan:
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Don't you think to support 50 year mortgage, the country must have 50 years Treasury product as well ???? we only up to 30Y Treasury.
Btw this ultra long term debt is actually not a new thing. One reason why China economy can really expand globally is because they offer
Multi-century loan project to Asia/Africa country.No, not at all. The pre '08' MBS market showed us just how fast that entire market is to adopt varying unique and new iterations of MBS's. For a time it was nearly a new product every few months if not weeks. I believe the market is hungry for such as it's been a bit starved for such since the post '08' regulatory actions.
The only thing that matters is if the MBS will sell, and how well it will sell, that's it. And as of recent there has been issues with getting buyers for MBS. How you get more buyers is simple, make it more profitable. How do you make it more profitable and cheaper for home buyer simultaneously. Change the math in a way that most consumers won't comprehend, won't care of because consumers are so instant gratification.
As Buffet says, the system is designed to reward the patient with the wealth of the impatient.
Given how they have treated minimum payments and other things in cc. Good luck getting this through regulation. Unless Fannie and Freddie back it it’s a non starter.
I may agree with James, that usually --after a manic depression-- the easiest way to expand the economy IS to further lengthen the debt maturity. But for this to make sense, there needs to be a serious crash that any investor will be scared of when talking about that subject, so I don't see the possibility of that happening right now, but if we enter sigma three deep in the hell recession then 50 Year mortgage product is making sense.
Sigma three depression is like when your home is lower than the inflation-adjusted valuation. We are not there yet. Over here 3 million houses still receive a bid of 2.95m LOL
For something that happened in Ukraine, post-war, 50 or 100 years mortgage loan maybe needed. - Member since 2019 · 7k+ posts · 4k+ votes4y
I like to study market crashes but I found a hard time finding the year-over-year data on a mortgage to income ratio back in 2005-2008 era. Zillow home index only goes back to 2013.
I'm particularly interested to find out if price adjustment happened more because of liquidity issues or mortgage/income ratio or mortgage/rent ratio or the valuation differential.
Using the latest pricing it seems the following might happen
San Diego / San Jose/ Las Vegas > Los Angeles > San Francisco
Meaning San Francisco wouldn't crash that much this year but the first three cities were having huge abnormalities in valuation, the early 2021 price in that city is entering sigma three deviations, hence they should adjust faster, what may save Las Vegas is just its 'cheaper' market. - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes4y
Quote from @Edward Kanive:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Mike DeKuiper:
@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.
Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.
Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.
Should. Probably. Maybe. All of the above.
As a Lender, question:
What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?
Have you seen anywhere stating that fannie and freddie would do that?
I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.
And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.
Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Do you just hate math? I already showed you the difference in payments, it is not significant. Please understand math and interest rates.
And yeah, when will we have the 50 year treasury anyway 😂 you going to buy those 50 year notes James? I think the people you are hearing this from are the same clowns from early 2000s that came up with the teaser rates, only atleast then it actually temporarily lowered payments significantly.
Also, how are those stock purchases you made after the obvious bear market rally last week? I recall you touting what great buys you made when SPX was near 3800. Last I checked it’s barely holding 3600. Please continue to telegraph your investment decisions so I can easily continue to fade them.
I think buying any stock right now is a wonderful investment. The best time to buy is when it’s coming down!
John C. is a clueless little Troll sitting in mommies basement desperate for attention so he follows me like some annoying groupie 16yr old constantly saying whatever moronic anything he can in a feeble attempt to just hear me say his name so he can wank it a bit more.
As for stock positions, yeah, doing rather well as of recent I am only struggling now with question of division of capital, do I nab some more stock positions or another property? The insane discounts in market make it a real struggle, everything is on discount. Which is not abnormal for this time of year but thats not taught in high school so basement trolls wouldn't know that, basement trolls think everything is always the apocalypse.
- Investor · Fremont, CA · Member since 2015 · 211 posts · 125 votes4y
Quote from @Carlos Ptriawan:
If there's one thing that I could learn from 2008 : there's ample time to buy in real estate. Real Estate is not like a stock, there's no need to hurry, no need to become a FOMO buyer. For 4 years 2009-2013, the market bottomed. If this is to happen again, the price in 2028 would not be much different than in 2024 anyhow.
I am a buyer for credit investment now, but not for equity investment as the market can whipsaw anyone.
The only thing you can do is be strong in financials to be able to buy cash/without loans. From 2008 to 2012 no bank will give a loan even to buyers strong enough. 2013 banks changed all of sudden, and so did market.Lets see how long it takes this time.
- Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes4y
Quote from @James Hamling:
Quote from @Edward Kanive:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Quote from @James Hamling:
Quote from @Mike DeKuiper:
@Greg R. There’s a lot of people commenting for/against, and as a lender, I have to say I’m seeing both sides. There is going to be a market “correction.” That’s pretty well inevitable. People want to spend money right now. There are more millennials right now capable of buying a house. The govt is trying to slow inflation and put us in a recession to stop it by increasing rates. Rising rates ar pushing people out of the market, and having houses stay on the market longer. Many people are getting offers accepted below asking price. But they all have equity and almost all are looking to buy another home.
Now picture this. Rates are currently averaging around 7% or higher most of the time right now (insert disclosures about creditworthiness, etc. here). The most renown bankers are expecting to see 8% at the highest by the end of the year. It should slow the market down enough as people cannot afford what they could last year. Rates should then start to come down, and most people are expecting to see high 4’s to low 5’s by 2024-ish. All of the sudden, the people that got pushed out of the market due to rates are back in. I won’t say a bidding war will happen, but people will start buying houses again, and we will continue to see home prices rise as the competition gets a little tougher.
Housing market correction? Yes. Crash? No. Rebound? Most likely. Still worth it to stick with it. Look at historical rate and home prices, take into consideration all of the lending laws and practices that make it harder to write a bad loan, and we can assume that everything should be okay.
Should. Probably. Maybe. All of the above.
As a Lender, question:
What would you see happening if Fannie/Freddie "normalized" 40/50yr mortgages?
Have you seen anywhere stating that fannie and freddie would do that?
I know people have speculated but I've not seen anything official anywhere even hinting at it. It would be a god damn nightmare in terms of rebuilding everything out again from debt ratios to risk factors. Literally it would push prices up further which is scary given how it happened with cars.
And actually as I think about it. You could in theory help push markets to further heights because an investor could leverage more cash flow faster, in theory anyway depending on if rates changes. But as they generate more cash flow to generate more properties they could end up with a scenario that allows them to appear to leverage higher ( but then pay off in 10-15 years with that extra cash flow. Just the benefit to investors alone could drive markets insane.
Yes, I have, it's currently "the" thing being talked about in the finance realm at high levels. Some say it's just chatter, others say planning in motion. High level chatter and I gotta say, it was rather detailed, almost too detailed. including the how's as to it all going down, via executive powers, as a kind of "rescue" item, etc etc. And, it makes a lot of sense. Politically speaking that is, which really when does politics ever make sense with the real world fundamentals right. And yes, I see it facilitating a bull-run of all bull-runs, pressing leverage to astronomical heights.
But remember DAVOS "you will own nothing, and be happy". Well, how better can one define a 50yr mortgage then exactly that, right.
Do you just hate math? I already showed you the difference in payments, it is not significant. Please understand math and interest rates.
And yeah, when will we have the 50 year treasury anyway 😂 you going to buy those 50 year notes James? I think the people you are hearing this from are the same clowns from early 2000s that came up with the teaser rates, only atleast then it actually temporarily lowered payments significantly.
Also, how are those stock purchases you made after the obvious bear market rally last week? I recall you touting what great buys you made when SPX was near 3800. Last I checked it’s barely holding 3600. Please continue to telegraph your investment decisions so I can easily continue to fade them.
I think buying any stock right now is a wonderful investment. The best time to buy is when it’s coming down!
John C. is a clueless little Troll sitting in mommies basement desperate for attention so he follows me like some annoying groupie 16yr old constantly saying whatever moronic anything he can in a feeble attempt to just hear me say his name so he can wank it a bit more.
As for stock positions, yeah, doing rather well as of recent I am only struggling now with question of division of capital, do I nab some more stock positions or another property? The insane discounts in market make it a real struggle, everything is on discount. Which is not abnormal for this time of year but thats not taught in high school so basement trolls wouldn't know that, basement trolls think everything is always the apocalypse.
The math (facts), just don’t support going to a 50 year mortgage when rates are high. The only thing that matters is the interest rate, which is what I’ve said from day one on this topic.
500k mortgage at 7 percent is only a $300 savings (barely 10 percent). And that’s assuming rates were the same, which you even correctly state, it would need to be a higher rate, so what is the benefit of this? Prop up home values by 2-3 percent? On the flip side, just lowering the interest rate by 1 percent on a 30 year has a better impact in terms of affordability.
However, when rates are really low, now you are talking about something viable. A 500k 3 percent 30 year compared to a 500k 3 percent 50 year is over $500 savings (almost 25 percent)
you can’t solve high interest rates with longer duration and expect that to be a meaningful impact. The “savings” to do so right now in this environment would never get passed. Anyone making decisions would see this math and come to the same conclusion that it’s a huge waste of time. This didn’t work in Japan either.The RATE is all that matters. Stop trying to fight the market forces.
