Market Activity Explodes

[AJ Wong]

Well a few weeks ago I wrote about a window of investment opportunity. 

The forecast appears fortuitous? Or somewhat accurate.. In the past 10 days I've had no less than six clients get pre qualified for a potential property purchases. 

I had several investors close on multi unit properties in January, and although reflectively they might have paid a slightly higher rate of interest compared with today, there was almost certainly less competition than would be expected today. 

A good proportion of properties with investment potential that were languishing on the market have recently gone pending and several recent listings have had multi offer conditions. 

As rates are expected to slide and stabilize and we enter peak housing season, I continue to anticipate a robust and perhaps surprisingly active Spring and Summer market along the OR & CA Coasts. 

Almost all of my local and extended industry colleagues and associates have reported a similar spike in sales activity and interest, with lesser intensity on retail commercial or office related properties. 

Both buyers and sellers of investment properties are encouraged to recalibrate to current market conditions in their localized area for consistent evaluation and analysis of investment returns and potential. For example since September/October '22 rates are down 1-1.5%+ on some alternative lending products such as bank statement verification loans. 

Also with a wave of buyers potentially competing for desirable properties, it could be a listing opportunity in what is trending towards a fresh seller's mini market. 

[James Hamling]

Quote from @Kyle Bergren:

Quote from @James Hamling:

If your one of the people reading things like this scratching your head asking "How? Why? Who's doing this? I wanted a "crash", where's my "crash"?" let me shed some light and answers on that point, as I am one of the "market makers" actively engaged in this here & now. 

I won't waste time touching on all the answers, just the ones I all but never hear anyone mention. 

First and foremost, institutional $ is engaging on a level I have not only never seen before, but also never heard of ever, and that everyone I know of also says the same, never seen or heard of such epic level activity. Now, keep in mind, I am talking 1st hand knowledge, this is not from some report I read, this is the "now" activity in our brokerage, the things I see and NDA's don't allow to speak of. It's gargantuan. 

Next, and this kind of touches on the first. I have a LOT of "new" Real Estate Investors starting, who have been long term Wall Street Investors. Yes, they are transferring and reallocating there investment capital. We have massive level inflation, that no it is still not done and WS Investors know exactly what I am talking about. R.E. is "the" hedge against inflation, so it's a simple risk-analysis of 1 vs the other. Next we simply have the obvious of returns, R.E. is out performing W.S., it's just that simple. 

So in all this doom & gloom forecasting so many media-4-profits have done, well they were using tunnel vision and forgetting ALL the factors. Short version, there is many more forces for acquiring real estate today, than not to. From there it's simple grammar school math; if Johnny has 4 apples, and 10 people want apples, what kind of discount will Johnny give them? 

As rents climb, it makes the "expensive" purchase option more affordable, because purchase affordability is PERCEPTUAL, weighted off income ADN the cost of alternative housing ie renting. When it's CHEAPER TO BUY/OWN vs renting, yeah duh, people strive to buy. 

Next, as W.S. volatility grows and faith in returns decline, R.E. investments simply look all the more safe, secured and assured. Not to mention as alternative options to W.S. increase, example BlackRock via acquisition of Home Partners and the similar, YES you will see MUCH MORE activity via institutional segment. 

Last but not lease, SUPPLY. Housing does not take months to create supply, it takes years, many years because production output takes years to ramp up production. These are SKILLED trades we are talking about, that again, require YEARS of training to achieve full per-head output. And right now today we have historic SHORTAGE of skilled labor in the trades. And it's not getting better, it's getting worse as avg. age of skilled trades person keep going UP. 

So welcome to the new norm. It's no surprise to me, it's actually an obvious outcome in my book because we "The People" have put sock-puppets in charge of all top level decision making, and they have literally 0 intelligent experience or credentials. What would happen if put a valet in charge of Hilton? Yeah, well that's what we have, complete morons in charge of government, is it so hard to assume bad things will come of it? 

Do you know why Tesla has done what Tesla does? Because a guy capable of building paypal ran it. Capable intelligent people retain capable intelligent people and down the line it goes. Circus clowns in charge tend to what, build a brain-trust team? No, they put a circus together, duh. 

Why any expect prices to fall like a stone, in reaction to MASSIVE inflation event, with a leadership cast like that of a Mtv reality show........ 

The real "crash" is in common sense. 

 Ditto on the crash coming! Nobody talks about all the near misses we have had in 2019 like the repo bond market bailout of 2019 or other instances the government or the FED does to not allow mini market crashes or corrections to correct risky behavior. Its insane the amount of the reserve is printing then purchase junk bonds or CLO's (a carbon copy of CDO from 2008 - instead of home owners being over leveraged this way its now corporations) to keep interest rates low at the expense of asset inflation.  Private equity and other hedge funds know this so they continue to make extremely risky bets because they know the reserve or the government steps in to stop the natural corrections of the market. Its utter lunacy from my perspective. 

 The level of institutional $ I see pouring into Real Estate today, and where it's coming from, it's hard to not think this is a financial life-boat action, it's simply too extreme in it's scale and breath.    

Somethings coming, something that will shake the dollar like never before, will hit sectors unlike anything before, and for which Real Estate is a bastion of safety and security. My bet is on a dollar reset, because it's the only item that ticks all the boxes. 

Not to mention, it would make sense for the spending party on the Hill that we see. Think of it this way, if you have a credit card with no limit, none, the only limit is capability to make those monthly service payments right. As your balance climbs you'll make efforts to keep things working, but if something happens, and that monthly service hit's a point that you know with absolute certainty you will not be able to make it, what do you do? Yeah, you go shopping right! Because it's done, D-O-N-E, but it just hasn't hit yet, so F-it, let's get everything one can get out of it right! Care-free because there is no point to care, it's just a matter of time until it hits. The fat-lady sung the album simply has yet to be released.     One could look at things and see a whole lot of simile to this, and those few insiders in the know, they know what's coming and get things set for it. 

Some will ignorantly assume such a collapse will drop Real Estate. No, very much the opposite. In a currency collapse, assets, especially fundamental NEED assets, they SKYROCKET. Simply look to post USSR Russia, a loaf of bread was worth a months wage at one point. Food was more valuable a currency then the currency itself. Housing was everything, food was cheap in contrast to how expensive housing got. When the currency in your pocket becomes worth the materials it's made of, the things of life become absolute solid gold. 

A debt collapse would see use assets skyrocket in value in a way the American mind can't conceive, and those from around the world have experienced. It's happened many times before, and will happen many more. 

Gold & silver, that's great, until confiscation orders. Don't believe it can happen, lol, you need to brush up on your history, MODERN history, U.S. did it before, and will 100% do it again in such a scenario, because they will need to and can. No thanks, I'd like to keep my assets and not exchange for whatever new pretty paper is trending. 

R.E. has stood the test of time. As I say to people who ask me if I worry on rentals if the dollar folds. Nope, because if the currency is chickens, I will simply collect rent in chickens. There is a reason it's called land-LORD. 

Food, water, shelter. Foundations of life, non-optional. Modes of payment, those can vary with fantastic ease. 

[Mike Dymski]

I don't know about OR and CA specifically but a "thawing" market seems a more appropriate description than an "exploding" market.  Real estate activity will be slow in 2023 in most markets.

The Fed is going to keep rates high and liquidate their huge balance sheet as long as they can.  They are sitting pretty right now and liquidating $95 billion per month and it has yet to crash the economy, the job market, or the real estate market (the last of which they don't specifically care about).  The job market already lost a whopping 5-10 million workers (3-6% of the workforce) to mass early retirement, aging boomers, no immigration for 1.5 years, long-covid disability claims, and excess deaths.  Driving another few million workers out of the workforce hasn't happened yet and is not going to be easy.  The government increased the money supply by $7 trillion (that's not a typo); so, they have a long way to go to vacuum up that mess and will stay tight as long as they can.

[Jay Thomas]

It is unfortunate that a lazy realtor combined with a tired senior seller often creates a discount market in Real Estate. While this may be beneficial to buyers, it can be detrimental to the sellers who are not getting a fair price for their home. It's important that sellers do their due diligence and find an experienced Realtor who will work hard to get them the best possible deal. Unfortunately, too many Real Estate deals these days are being negotiated based on convenience instead of actual value.

[Lisa L.]

We are seeing more multiple offers

[AJ Wong]

Quote from @Mike Dymski:

I don't know about OR and CA specifically but a "thawing" market seems a more appropriate description than an "exploding" market.  Real estate activity will be slow in 2023 in most markets.

The Fed is going to keep rates high and liquidate their huge balance sheet as long as they can.  They are sitting pretty right now and liquidating $95 billion per month and it has yet to crash the economy, the job market, or the real estate market (the last of which they don't specifically care about).  The job market already lost a whopping 5-10 million workers (3-6% of the workforce) to mass early retirement, aging boomers, no immigration for 1.5 years, long-covid disability claims, and excess deaths.  Driving another few million workers out of the workforce hasn't happened yet and is not going to be easy.  The government increased the money supply by $7 trillion (that's not a typo); so, they have a long way to go to vacuum up that mess and will stay tight as long as they can.

I’m your audience, very much bearish on USD however in our area it’s not a thaw and was never a freeze it’s a flood.  

[Mike Dymski]

Quote from @AJ Wong:

Quote from @Mike Dymski:

I don't know about OR and CA specifically but a "thawing" market seems a more appropriate description than an "exploding" market.  Real estate activity will be slow in 2023 in most markets.

The Fed is going to keep rates high and liquidate their huge balance sheet as long as they can.  They are sitting pretty right now and liquidating $95 billion per month and it has yet to crash the economy, the job market, or the real estate market (the last of which they don't specifically care about).  The job market already lost a whopping 5-10 million workers (3-6% of the workforce) to mass early retirement, aging boomers, no immigration for 1.5 years, long-covid disability claims, and excess deaths.  Driving another few million workers out of the workforce hasn't happened yet and is not going to be easy.  The government increased the money supply by $7 trillion (that's not a typo); so, they have a long way to go to vacuum up that mess and will stay tight as long as they can.

I’m your audience, very much bearish on USD however in our area it’s not a thaw and was never a freeze it’s a flood.  

Hey AJ, I am not following.  Portland, Seattle, San Fran, LA are all down 15-20% from the peak.  I have a big project in PHX in process; so, am bullish on opportunities but there has definitely been a freeze on the west coast with historically low transaction levels.

[AJ Wong]

Quote from @Mike Dymski:

Quote from @AJ Wong:

Quote from @Mike Dymski:

I don't know about OR and CA specifically but a "thawing" market seems a more appropriate description than an "exploding" market.  Real estate activity will be slow in 2023 in most markets.

The Fed is going to keep rates high and liquidate their huge balance sheet as long as they can.  They are sitting pretty right now and liquidating $95 billion per month and it has yet to crash the economy, the job market, or the real estate market (the last of which they don't specifically care about).  The job market already lost a whopping 5-10 million workers (3-6% of the workforce) to mass early retirement, aging boomers, no immigration for 1.5 years, long-covid disability claims, and excess deaths.  Driving another few million workers out of the workforce hasn't happened yet and is not going to be easy.  The government increased the money supply by $7 trillion (that's not a typo); so, they have a long way to go to vacuum up that mess and will stay tight as long as they can.

I’m your audience, very much bearish on USD however in our area it’s not a thaw and was never a freeze it’s a flood.  

Hey AJ, I am not following.  Portland, Seattle, San Fran, LA are all down 15-20% from the peak.  I have a big project in PHX in process; so, am bullish on opportunities but there has definitely been a freeze on the west coast with historically low transaction levels.

20% decline in activity or prices? We can agree that the pandemic boom was not normal so what is? Two clients lost to multiple all cash offers today. For several months there were buyers options and seller concessions. What are you not following? 

[Mike Dymski]

Quote from @AJ Wong:

Quote from @Mike Dymski:

Quote from @AJ Wong:

Quote from @Mike Dymski:

I don't know about OR and CA specifically but a "thawing" market seems a more appropriate description than an "exploding" market.  Real estate activity will be slow in 2023 in most markets.

The Fed is going to keep rates high and liquidate their huge balance sheet as long as they can.  They are sitting pretty right now and liquidating $95 billion per month and it has yet to crash the economy, the job market, or the real estate market (the last of which they don't specifically care about).  The job market already lost a whopping 5-10 million workers (3-6% of the workforce) to mass early retirement, aging boomers, no immigration for 1.5 years, long-covid disability claims, and excess deaths.  Driving another few million workers out of the workforce hasn't happened yet and is not going to be easy.  The government increased the money supply by $7 trillion (that's not a typo); so, they have a long way to go to vacuum up that mess and will stay tight as long as they can.

I’m your audience, very much bearish on USD however in our area it’s not a thaw and was never a freeze it’s a flood.  

Hey AJ, I am not following.  Portland, Seattle, San Fran, LA are all down 15-20% from the peak.  I have a big project in PHX in process; so, am bullish on opportunities but there has definitely been a freeze on the west coast with historically low transaction levels.

20% decline in activity or prices? We can agree that the pandemic boom was not normal so what is? Two clients lost to multiple all cash offers today. For several months there were buyers options and seller concessions. What are you not following? 

 15-20% decline in prices from the peak and lowest level of home sales since the great recession.

[AJ Wong]

Quote from @Mike Dymski:

Quote from @AJ Wong:

Quote from @Mike Dymski:

Quote from @AJ Wong:

Quote from @Mike Dymski:

I don't know about OR and CA specifically but a "thawing" market seems a more appropriate description than an "exploding" market.  Real estate activity will be slow in 2023 in most markets.

The Fed is going to keep rates high and liquidate their huge balance sheet as long as they can.  They are sitting pretty right now and liquidating $95 billion per month and it has yet to crash the economy, the job market, or the real estate market (the last of which they don't specifically care about).  The job market already lost a whopping 5-10 million workers (3-6% of the workforce) to mass early retirement, aging boomers, no immigration for 1.5 years, long-covid disability claims, and excess deaths.  Driving another few million workers out of the workforce hasn't happened yet and is not going to be easy.  The government increased the money supply by $7 trillion (that's not a typo); so, they have a long way to go to vacuum up that mess and will stay tight as long as they can.

I’m your audience, very much bearish on USD however in our area it’s not a thaw and was never a freeze it’s a flood.  

Hey AJ, I am not following.  Portland, Seattle, San Fran, LA are all down 15-20% from the peak.  I have a big project in PHX in process; so, am bullish on opportunities but there has definitely been a freeze on the west coast with historically low transaction levels.

20% decline in activity or prices? We can agree that the pandemic boom was not normal so what is? Two clients lost to multiple all cash offers today. For several months there were buyers options and seller concessions. What are you not following? 

 15-20% decline in prices from the peak and lowest level of home sales since the great recession.

Prices definitely have not fell 20% since ‘peak’ one year ago? That’s not accurate in our area or otherwise for that matter. The great recession in 2008? What does that have to do with anything? Point is sellers are selling and buyers are buying.