Housing crash deniers ???

Dallas, Texas
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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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  • Justine Veal
    Investor · Atl, GA · Member since 2021 · 63 posts · 39 votes
    4y

    @Greg R.

    Crash and correction are not the same.

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Bruce Woodruff:

    2 stats I just saw released....not that they mean anything, just throwing more fuel on the fire...

    The number of homes sold in September plunged 25% year-over-year to 478,593

    The number of new home listings fell 22% compared to last year to 503,156.




    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Bruce Woodruff:

    2 stats I just saw released....not that they mean anything, just throwing more fuel on the fire...

    The number of homes sold in September plunged 25% year-over-year to 478,593

    The number of new home listings fell 22% compared to last year to 503,156.




     This is good news. This is like water to fire. LOL

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @John Carbone:

    I think someone said black rock could never be forced to sell anything. Not saying this is a monster amount to them, but if more and more funds do this, they certainly could be.

    And this doesn’t help either 



    https://www.dailysignal.com/20...


     And then 4 conservative states pull out over 1-1/4 billion.

    https://watcher.guru/news/blac...



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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Michael Wooldridge:

    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     quite impressive real estate is really the best hedging tool against inflation

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Michael Wooldridge:
    Quote from @Bruce Woodruff:

    2 stats I just saw released....not that they mean anything, just throwing more fuel on the fire...

    The number of homes sold in September plunged 25% year-over-year to 478,593

    The number of new home listings fell 22% compared to last year to 503,156.




    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     Yep. The two are not mutually exclusive...

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     quite impressive real estate is really the best hedging tool against inflation


    Well and that’s the funny thing. Some people here like BRuce are suggesting inflation could go on far longer like the 70s. If that actually happened buying real estate right now would be genius…. 

    I don’t think it will happen fortunately but it’s an interesting argument to be making if you are predicting crash…..
     

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Michael Wooldridge:
    Quote from @Bruce Woodruff:

    2 stats I just saw released....not that they mean anything, just throwing more fuel on the fire...

    The number of homes sold in September plunged 25% year-over-year to 478,593

    The number of new home listings fell 22% compared to last year to 503,156.




    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     Yep. The two are not mutually exclusive...

    Cool so wake me when nationally we start dropping big time. Not just corrections in cali/west coast and Austin/DFW…..  

    While we are on the topic of cali. Did anybody notice Bay Area lost median income thanks to fleeing? There could be more at work in that market in particular if income keeps fleeing. 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Michael Wooldridge:
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     quite impressive real estate is really the best hedging tool against inflation


    Well and that’s the funny thing. Some people here like BRuce are suggesting inflation could go on far longer like the 70s. If that actually happened buying real estate right now would be genius…. 

    I don’t think it will happen fortunately but it’s an interesting argument to be making if you are predicting crash…..
     


     In the 70s, real estate appreciates a lot compare to real estate during the cheap money era. The multiplier was like 3.0x during inflation and 1.8x during the normal era. 

    Btw last year in the equity market invested a lot at IVOL ETF to hedge againts inflation but this thing is falling too -15%, only Vanguard VTIP is working well, only dropped 3%.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Michael Wooldridge:

    Cool so wake me when nationally we start dropping big time. Not just corrections in cali/west coast and Austin/DFW…..  

    While we are on the topic of cali. Did anybody notice Bay Area lost median income thanks to fleeing? There could be more at work in that market in particular if income keeps fleeing. 

    Sure I'll give you the wake-up call amigo, just wait a few more months I'd say.

    And I've been saying for years that all the folks leaving Cali will have to have an affect....sooner or later.....it's doesn't take a crystal ball, it's just math.
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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Michael Wooldridge:

    Cool so wake me when nationally we start dropping big time. Not just corrections in cali/west coast and Austin/DFW…..  

    While we are on the topic of cali. Did anybody notice Bay Area lost median income thanks to fleeing? There could be more at work in that market in particular if income keeps fleeing. 

    Sure I'll give you the wake-up call amigo, just wait a few more months I'd say.

    And I've been saying for years that all the folks leaving Cali will have to have an affect....sooner or later.....it's doesn't take a crystal ball, it's just math.

     Well I wouldn’t argue with you on the latter because 1) it’s just obvious from built up equity and equity in homes has made a fortune for most of the wealthy in America. And two you got a birds eye view of it in Arizona over the years. To an extent SLC is another good example of it.

    It’s too hard for them to impact the full nation that way though. Which is why I mentioned FL would need to drop big to drive the valuation shift nationally. 

    As to the first, unless the fed really does something nuts and like 100 basis point increase next two months. I don’t see it. But time will tell.

    Still only expecting 15% adjustment nationally in a worse case scenario. 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Michael Wooldridge:
    Quote from @Bruce Woodruff:
    Quote from @Michael Wooldridge:
    Quote from @Bruce Woodruff:

    2 stats I just saw released....not that they mean anything, just throwing more fuel on the fire...

    The number of homes sold in September plunged 25% year-over-year to 478,593

    The number of new home listings fell 22% compared to last year to 503,156.




    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     Yep. The two are not mutually exclusive...

    Cool so wake me when nationally we start dropping big time. Not just corrections in cali/west coast and Austin/DFW…..  

    While we are on the topic of cali. Did anybody notice Bay Area lost median income thanks to fleeing? There could be more at work in that market in particular if income keeps fleeing. 


     nope, never decrease.

    Our wage is going up 4% this year but still below US growth standard.

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:
    Quote from @Bruce Woodruff:
    Quote from @Michael Wooldridge:
    Quote from @Bruce Woodruff:

    2 stats I just saw released....not that they mean anything, just throwing more fuel on the fire...

    The number of homes sold in September plunged 25% year-over-year to 478,593

    The number of new home listings fell 22% compared to last year to 503,156.




    So inventory is dropping like predicted? And people are sitting tight also like predicted. Sounds about right.  


     Yep. The two are not mutually exclusive...

    Cool so wake me when nationally we start dropping big time. Not just corrections in cali/west coast and Austin/DFW…..  

    While we are on the topic of cali. Did anybody notice Bay Area lost median income thanks to fleeing? There could be more at work in that market in particular if income keeps fleeing. 


     nope, never decrease.

    Our wage is going up 4% this year but still below US growth standard.


    ? 

    https://napavalleyregister.com... 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Michael Wooldridge:

    ? 

    https://napavalleyregister.com... 


     Read carefully, the data that they are advertising doesn't include the Santa Clara county/San Jose area. This is the area that's producing the most jobs.

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    ? 

    https://napavalleyregister.com... 


     Read carefully, the data that they are advertising doesn't include the Santa Clara county/San Jose area. This is the area that's producing the most jobs.


     Well LA and other parts of Cali are also going up. Some are obivously moving to new areas like where your discussing. But it’s still an impact to median income to the city. 

    I also wonder how much some of it has to do with all the homeless locally. It’s an experience for folks downtown. 

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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    ? 

    https://napavalleyregister.com... 


     Read carefully, the data that they are advertising doesn't include the Santa Clara county/San Jose area. This is the area that's producing the most jobs.


    Also, anyone that's still  "thinking normally" would choose to leave San Francisco.
    That city is in a deep terrible mess more than Bostwana now LOL 
    But they may move within the state or leave out of state. 

    Even Bostwana maybe more cleaner than SF.

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Carlos Ptriawan:
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    ? 

    https://napavalleyregister.com... 


     Read carefully, the data that they are advertising doesn't include the Santa Clara county/San Jose area. This is the area that's producing the most jobs.


    Also, anyone that's still  "thinking normally" would choose to leave San Francisco.
    That city is in a deep terrible mess more than Bostwana now LOL 
    But they may move within the state or leave out of state. 

    Even Bostwana maybe more cleaner than SF.


     Yeah looks like we both had the same thought on that front. 

    Honestly short of making over 1.5 million annually in income. I’d have no interest in living in the Bay Area and for Cali it would have to be over 1million in income annually - too expensive not worth it.  

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Michael Wooldridge:

    Still only expecting 15% adjustment nationally in a worse case scenario. 

    I moved along with dozens of friends and neighbors so yeah I've been in the middle of it for sure....livin' the dream....:-)

    We're not to far off, I see the 15% being an easy get, not worse case...
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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Michael Wooldridge:

    I don’t think it will happen fortunately but it’s an interesting argument to be making if you are predicting crash…..
     

    I'm not suggesting a crash, no way IMHO. But long term inflation is easy to get into and hard to get out of. Been there done that....

    But what the heck do I know? I was wrong before....once.
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  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y
    Quote from @Michael Wooldridge:
    Quote from @Carlos Ptriawan:
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    ? 

    https://napavalleyregister.com... 


     Read carefully, the data that they are advertising doesn't include the Santa Clara county/San Jose area. This is the area that's producing the most jobs.


    Also, anyone that's still  "thinking normally" would choose to leave San Francisco.
    That city is in a deep terrible mess more than Bostwana now LOL 
    But they may move within the state or leave out of state. 

    Even Bostwana maybe more cleaner than SF.


     Yeah looks like we both had the same thought on that front. 

    Honestly short of making over 1.5 million annually in income. I’d have no interest in living in the Bay Area and for Cali it would have to be over 1million in income annually - too expensive not worth it.  


     yeah, not worth it to move now, even If I'm totally new I would choose seattle over bay area ; actually the fact that people don't move to bay area is good thing as job keep expanding and unemployment is as low as 1.9%, lower immigration as well. 

    There are only three groups of people that's moving to bay area/CA primarily :
    1. homeless
    2. highly paid legal immigrant in tech
    3. illegal immigrant

    that's always the case.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Carlos Ptriawan:

    1. homeless
    2. highly paid legal immigrant in tech
    3. illegal immigrant

    that's always the case.


    Yep. But it keeps the population from looking even worse since they count the homeless and illegals (as much as they can) From Cal Matters:

    Since 2010, Johnson continued, “about 7.5 million people moved from California to other states, while only 5.8 million people moved to California from other parts of the country. According to Department of Finance estimates, the state has lost residents to other states every year since 2001.”

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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Bruce Woodruff:
    Quote from @Michael Wooldridge:

    Still only expecting 15% adjustment nationally in a worse case scenario. 

    I moved along with dozens of friends and neighbors so yeah I've been in the middle of it for sure....livin' the dream....:-)

    We're not to far off, I see the 15% being an easy get, not worse case...

     Except we’ve gone from $430 median to $403 or right about 6.5%. And thats with the big swings in the Bay Area and Austin/DFW,  So not so easy ot get and not that close.

    Also if inflation happens like you are saying then it would be hilarious because housing prices would probably go up not down. And certainly not a 20% drop…. 

    So which is it you are advocating for? 


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  • Michael Wooldridge
    Member since 2022 · 485 posts · 216 votes
    4y
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:
    Quote from @Carlos Ptriawan:
    Quote from @Carlos Ptriawan:
    Quote from @Michael Wooldridge:

    ? 

    https://napavalleyregister.com... 


     Read carefully, the data that they are advertising doesn't include the Santa Clara county/San Jose area. This is the area that's producing the most jobs.


    Also, anyone that's still  "thinking normally" would choose to leave San Francisco.
    That city is in a deep terrible mess more than Bostwana now LOL 
    But they may move within the state or leave out of state. 

    Even Bostwana maybe more cleaner than SF.


     Yeah looks like we both had the same thought on that front. 

    Honestly short of making over 1.5 million annually in income. I’d have no interest in living in the Bay Area and for Cali it would have to be over 1million in income annually - too expensive not worth it.  


     yeah, not worth it to move now, even If I'm totally new I would choose seattle over bay area ; actually the fact that people don't move to bay area is good thing as job keep expanding and unemployment is as low as 1.9%, lower immigration as well. 

    There are only three groups of people that's moving to bay area/CA primarily :
    1. homeless
    2. highly paid legal immigrant in tech
    3. illegal immigrant

    that's always the case.


    I’m just not meant for the city - if I was I likely would have picked Dallas. It’s got a nice feel for a “city”.  Nashville would be up there too.

    otherwise anywhere I move to would be just a second home, mountain focus. Bozeman, SLC, maybe Colorado. 
     

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Michael Wooldridge:

    So which is it you are advocating for? 


    Not advocating anything in particular. I expect inflation to continue, and couple with a recession, maybe even a bad one. This creates the worst of worlds for everything...except the well-positioned who see it coming.


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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Michael Wooldridge:
    Good taste in 2nd home locations....! How about Northern Arizona...? :-)
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