All Forum Posts by: John Carbone

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

 That’s right, JP Morgan using Minneapolis based realtor to close their billion dollar purchases. 

I thought fed was communist for forcing rates so high so fast? Now you speak of it how great it is by tricking the public perception. Which one is it?

also, still predicting 15 percent drop by March? Or are you reverting back to the original no drop at all now?

what's funny (or hyprocrite) from the Fed is truly what they say and their action is very different than reality LOL.
Today  they said they want to increase the rate again albeit slowly, so the normal reaction would be the yield to be higher right, but instead
Yield is going to go another 1 month low with the dollar hitting 3 month low, the dollar position is almost similar to the May position.

What's astonishing too is the Fed keep injecting new liquidity to the market, so while they raise the terminal rate but effectively they do QE as new dollar increases. As result new home price is reaching new high this month, same happened to stock markt as well. I guess that would be an indirect result of the liquidity. Here's the snapshot of latest 15 days of Fed liquidity.

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

https://therealdeal.com/2022/1...

the institution started buying again, this time jp morgan

 I cannot comment on this.... (I bet Mr Carlos has an idea why)

Why :)

NDA's. Remember back to previous posts, more then enough light shed there. 
I can say any thought of big-$ having any struggle in SFR segment is SO not true. 1st hand knowledge. Just wait, few months there will be reporting's of things, there is BIG things happening, B-I-G. You ain't seen noting yet in the i-buyer space my friend. 

Quote from @Carlos Ptriawan:

I guess the most real-time important real estate metrics that we have right now is that the housing inventory in Nov 2022 is adjusted to Q2 2000 active inventory level. However nationwide price is barely moving from an all-time high and CA  state (as the leading 'crasher') is only regressed to Q1 2022/Q4 2021 price level.

That was very surprising actually. There's no 1-to-1 correlation between price adjustment and inventory level. 

 I did expect we would be around a 2-5% consolidation in national median pricing by now. I am a bit surprised how resilient the vast majority of country is holding, despite volume drop. The entrenchment seems to be a bit more then I had projected. 

How crazy would it be if we get into Feb, with a 50% drop in volume YOY, but remain flat on national median price, or near flat. That would be very interesting. I projected up to 15% consolidation on national median by end of Q1 '23'. 

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

 This is a common misconception, or misunderstanding, by those who don't understand economics and business/statistical structures. 

Increased costs of housing does NOT decrease demand. It decreases AFFORDABILITY. 

And when one DECREASES affordability, it INCREASES pent-up-demand. 

You should talk more about the pent-up demand, this one is very fascinating.

When US experiencing inflation in 70 and also in Asia during the hyperinflation of the late 90s, real estate skyrocketed. Was it due to pent-up demand, how to measure it?

If review back in data, I believe it's very fair, if not very conservative, to peg 5 million unit sales in US as the bar of measure. 

To say, at that level demand is for most part, being meet. It's probably a bit under as equilibrium is arguably closer to 5.35 million, but let's use 5.

Now as things dip below that benchmark, let's say by 200k units per month for lets say 5 months, it does NOT say that then immediately the next month there will be say, demand to purchase 1.2m home units, no. But it DOES give a "read" of that pressure level. So picture a full year, of a 30% drop from 5 million. Yes, that does give read that pressure is now at 130%. 

When that pressure "ruptures", because that is how such expresses itself, a rupture or eruption, the # of units available is a constricted #. So now you have 130% demand for what's available, and this directly results in pricing expression of said pressure. 

But..... nerding out here for a bit, 130% pressure does not erupt as 130%, it gets amplified in the event, coming out more so as 150% pressure due to the restrictions on expressing itself, the competition amplifies the pressure into desperation. 

In simplest terms, 2020. We just lived this equation. 

Now think of where we are at today. We OBVIOUSLY have pent-up-demand, here and now, everyone even doomsayers are saying we have it, although not cognizant of such, as they say people are not buying BECAUSE of the rate increases, that is by definition making pent-up-demand. 

So we have a net shortage market, with demand getting stopped from expressing itself, and getting all pent-up. The fact of sales continuing in many markets is proof of the strength of the pent-up-demand today being stronger then rate impact. So now raise rates a bit more, and hold. What happens when rate drop to say 5%. 

The Fed didn't fix anything, they kicked the can is what I am trying to say. 

The rate increases were so massive, so fast, it didn't allow an easing of demand, it just locked the door, the people are still waiting to get in, and every day more arrive and are all asking how long they gotta wait to get in. 

So when that door opens, yes, it will be a rush, again. How big, all depends how long they have to wait, and how wide open that door get's thrown open when it opens. 

If Fed actually wanted to "fix" things vs can kicking, they'd drop rate TODAY too a metered level, something like 200 basis point drop from today. And ride out the demand cycle in a regulated manner. We were with flood gates wide open, then they shut them almost completely closed, one extreme to the other. Nothing will be fixed, only delayed. 

The only way the Fed direction makes sense is if they planned to get mass unemployment, and suck dry savings to impoverish everyone, then start slowly letting off some all can just barely tread water. That is some epic evil sh#t if that's the case, and in no way shape or form for "we-the-people". 

IDK, maybe that is the attempt, but it's rather extreme and would require inducing a huge recession and I don't see any politically surviving such. 

IDK, what there doing doesn't make sense, what makes sense for what there doing doesn't make sense.... Most likely is they don't really know either, and are just reacting, and then justify reaction, never be wrong especially when wrong kinda thing. 

If later is the case, I could see a easing cycle start here in Dec and continue M2M into spring market where hopefully they stop and sit at a sane point and do as I started, let the market work itself out, let demand express itself and find equilibrium free of manipulation. 

@John Carbone

I'm not here to argue MN vs. HI... but people move into, and out of, every state every year, and domestic migration is only one facet of population change.  MN grew between 2010 and 2020...

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

 Pretty sure most Hawaiians living in despair there would rather live in a hut on a beach than move to Minnesota even if the land was free.

 Thought it was rather obvious what I was saying and easily understood, but I forgot some need things in Crayola. 

I was saying HI Natives coming to LEARN from MN Natives, NOT to MOVE to MN, come to LEARN, to take knowledge back to HI to do in HI what natives do in MN. 

And WTF is so bad with MN? "....even if land was free" is an idiotic statement about one of "THE" top places to live in U.S. for what, all history of the rankings. You are aware that MN has DOMINATED the top seats of the ranked best places to live, with more cities in top 10/20 then any other state, more times consecutively, or repetitively, etc etc etc then anywhere else in US, right?    But let me guess "winter". Yeah, 3 whole months of winter, oh-no....... Your aware that nearly half the country has winter and snow right? Half the NFL has homes in MN, for starters. Bezos has a place here. We have so many millionaires and billionaires with places in MN that private jet airports dot the landscape. (ok, I know there just airports but I am talking they have private jet facilities and large, regular, service of such. Like Eden Prairie, Brainerd/Baxter, Duluth....) 

Hey, how about a Fun-Fact Tuesday.    Were you aware that MN has more miles of shoreline than California, Florida and Hawaii, COMBINED! Yup, look it up, about 90,000 miles! So yeah, the beach argument lands in MN dominance by far buddy. 

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Mahdi Hemmat:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @David Song:

@Greg R.

For example in Hawai'i it actually is way cheaper to rent a 1 bedroom ($1200) or 2 bedroom apartment ($1800) vs buying a condo for 200-300k or 300-400k because the interest is just way too much for it to be feasible. Even leaseholds are not worth it. 

this is just simply a signature of very low cap rate market while median income is also too far off from median housing.

 Keyword "Hawai'i". Definition of "special" market. It's not just "a" paradise it is "THE" paradise. A low cap is only a statement of time, not endurance. Yes, I do think it's safe to say the HI market will perpetually appreciate. 

Hawaii is an extremely special market. The most problem with Hawaii is the inflated price issue for the local, both for real estate and daily food. Money is pouring into this island because rich mainland buyer is purchasing an acre of land and house in this market, while the local economy except for tourism is not really growing. So Hawaii's progress may be good for the local government, but not good for the locals. The locals and especially young folks then move to CA or Nevada. There's no economy except tourism. Not a good spot for the young generation's education.

Local Hawaiian is laughing when people from TX complain about expensive bread, as the bread is double-digit LOL.

But overall what's great about USA is the country is having Minnesota and Hawaii as well, in a similar way the country is having tech industry but having oil industry. When one sector is falling, the other sector could help subsidize the other sector that's under pressure.

 HI native's should come to MN, take a lesson from MN native community, build casino's on native land. Natives are buying back the place from "the white man" via "the white mans" $, lol. I think it's genius, and a bit poetic justice really. Every year they buy a bit more and annex it in. 

@James Hamling

"This may be a bit out there of a prediction, let's call it my "Thesis",
but I think we are seeing the birth of the MidWest dominance."

I've seen quite a few things in my lifetime that I NEVER thought I'd see, but this one would be up towards the top, for sure.  I mean, are you saying that people will flood out of California, Texas, and Florida and head to Cleveland or something?

Quote from @Carl Fischer:

@Greg R.

The economy is being reset. The minimum wage is now $15/hour. Almost everything has increased/inflated in price. Some inflation is caused by an excess of money(PPP, EIDL, build back better) and some from supply chain issues creating shortages.

The correction/crash cycle will be less severe as a result but will occur. As always some locations will be better and some worse

than others. Real estate is local not national.

 I'm not sure reset is the correct word to use as that intones a sense of a return to a previous state, and this is no return to any previous state, it is a redefining action, a rewriting of the state of things. 

At this time the Fed is "testing" a new currency means (digital dollar). There is whisperings coming out of potential "deal" in the works of a kind of merger between the US Treasury Dept and the Fed, forming a new kind of "Treasury Reserve", or what I would coin a "super" Fed. 

I think one has to throw out the old book and graphs on things because fact is, this is a very different world. Heck, when is the last time the Fed Gov. paid the populous on mass as it had, never. The New Norm is "New Norms".