All Forum Posts by: Jonathan Twombly

yes!  I mixed up Ed Glaeser and Richard Florida. 

 It's not easy to get at this information, but you might piggy back on some research done by people like Richard Glaeser, who has been arguing for years that it is zoning that makes the biggest difference in housing affordability - basically how easy it is to build.  You could look at the places he identifies as toughest to build in as targets and then figure out which areas are growing.

However, there is a fundamental contradiction here, because it's tough to grow when it's tough to build.  Housing is much more expensive in these markets, and they are likely slower-growth places.  The places that are tougher to build are also likely the  coastal cities with limited land and high land-use restrictions, which make real estate very expensive.

I'd be curious to see the results of your research, though.

Since my first comment in the chain, additional people have chimed in to say that the market will never go down again

Because foreign investors

Because California 

Because some people don’t need to make money 

Yadda

Yadda 

Yadda

None of these factors existed before this current cycle?

Did any of these factors prevent the last cycle from ending?

A few weeks ago some serious people were saying that Bitcoin could only go up. 

I’d like someone to give me an example from history of an asset class - ANY asset class, anywhere - that is not subject to cycles and fluctuation.  

Anyone who thinks California or New York real estate never goes down has obviously not been around long enough to remember 2008.  Or 2001. Or the 1990s.  Or the 1980s.  There are people who bought at the top and were under water for years.  

I can think of only two things that rise inexorably and never fall - college tuition and health insurance costs.  If we could figure out a way to invest in those, we’d all be super rich.  

Hey John!  Well, Albany remains the state capital and the MSA is the second wealthiest in the state.  The city recorded modest population growth from 2010-16, though it slowed from the previous ten year census.  

Newburgh remains one of the poorest and most dangerous places in New York and the country as a whole.  And, what’s new, is that the city population, which had seen positive growth for a couple of decades, turned negative from 2010-16.  So people are actually voting with their feet and leaving.  

So, I’d say, if anything, the stats actually show that Newburgh is getting worse.  

I will say this, though, and I have not researched the answer. Population decline could actually result from gentrification IF you were seeing brownstones being reconverted back from triplexes into single family homes by more affluent people.  I have not checked to see if per capita incomes have grown or not.  

So it COULD be that.  But I honestly don’t know.

Thank you for this information.  It’s a ludicrous situation and reinforces my view, in addition to the precariousness of the market, that most people mis-use 1031.  It’s not for selling at the top of the market and then wasting all your profits buying a bad deal at the top of the market.   It’s for capturing long-term appreciation strategically at a lower point in the cycle, when it can be deployed to obtain bargains on great assets.  You give up some short term gain for long term gain.  Instead so many people grab short term gain and turn it into long term loss.  

Have patience.  Keep your powder dry and you will be buying some great deals out of foreclosure in a couple of years.  Those out of state buyers are creating the value add deals of the next cycle without even knowing it.  

I’d say it’s pretty unlikely. The whole point of a down payment is that you have serious skin in the game and won’t walk away if things don’t go smoothly.  If the down payment is coming from a lender then this whole rationale is undermined.  

The major exception would be part performance, basically if you let them move in and they started paying you the agreed rent.  But even then they’d be deemed to have a month to month tenancy.  

@Jerry Poon Unfortunately this information is tough to come by for free, though you might want to ask brokers you work with if they have data, including old REIS reports, which usually track about 5 years back.  

You may want to see if REIS or CoStar has this data as well.  You will have to pay for it, but their reports are less expensive than losing a lot of money. 

There is a categorical response to this question.  You cannot by law convey an interest in real property, and the right to occupy an apartment is an interest in real property, without a signed writing - I.e., a lease.  

This is property law 101.  Just ignore the cop.  If he’s dumb enough to sue you, let him try.  The very first lawyer he talks to will tell him he has no case.  

I love this thread, because some of the comments are only one step away from announcing a "new paradigm" or a "phase shift" in real estate, where - because of liquidity in the market, new discoveries of uranium in Russia, and theta divided by beta over alpha - it is impossible for real estate ever to down again, so we all must pile in before it's too late and we're priced out forever!!!!

That's usually the last psychological state the bulls enter just before the correction.  Happens in every market, in every asset.