Real estate bubble coming again?

Acute Angle

Woodpecker
aphelion said:
Something seems fishy about the prices right now. I'd literally just refinanced my place and had it appraised at $150k, and 4 months later I've got someone beating down my door to throw $220k at me plus expenses. That's not rational.
I think it's known as the blow-off top.

No one knows when the bubble will burst, but it will. Better to miss the last 10% up to the peak than chase the market down once it comes off 20 or 30%.

Of course, if you're happy living in your home, continue to do so and watch the carnage around you.
 

aphelion

Ostrich
Gold Member
Periodically I'll go on Zillow and I'll look at the purchase history of these places. It's like the Wild West. No rhyme or reason.

I'm expecting some course correction in the near future. I don't know. This is just weird.
 

aphelion

Ostrich
Gold Member
Acute Angle said:
aphelion said:
Something seems fishy about the prices right now. I'd literally just refinanced my place and had it appraised at $150k, and 4 months later I've got someone beating down my door to throw $220k at me plus expenses. That's not rational.
I think it's known as the blow-off top.

No one knows when the bubble will burst, but it will. Better to miss the last 10% up to the peak than chase the market down once it comes off 20 or 30%.

Of course, if you're happy living in your home, continue to do so and watch the carnage around you.
On the other hand, better to turn fake money into real money...
 

Dusty

Peacock
Gold Member
There hasn't been a lot of house built in 5 years or so. In many cities people owe more than they own, so they'd have to write a check to their bank if hey sold, so they don't. So supply is low.

On the demand side, hedge funds are buying up houses and turning them into rentals.

Low supply high demand means rising prices.
 

el mechanico

Owl
Gold Member
The banks are not chasing deficiency.

If hedge funds are buying up the houses that will create the bubble?? I have friends that work at banks none of them are really doing mortgages even though they say they are.
 

j r

Ostrich
Trying to predict macroeconomic trends isn't really the best way to make this sort of decision. I would just do a cash flow analysis and figure out how long it's going to take you to get back your initial investment and start earning profit. If you're worried about the market, just run a few different scenarios.

Also, what are you going to do with the house? If you're planning to live in it, then resale value won't mean that much. If it's an investment, even if sale prices drop, the house still has rental value.
 

Dusty

Peacock
Gold Member
el mechanico said:
If hedge funds are buying up the houses that will create the bubble??
Not necessarily. These hedge funds are flush with cash, and with low interest rates they didn't have many options for good yield. So they started buying houses in Vegas and elsewhere, a lot of them foreclosed houses, fixing them up and renting them out and are making 20% yields.

I thought of doing the same a couple years ago, but could never pull the trigger. They bid the houses up and the opportunities are probably gone now.

http://therealdeal.com/issues_articles/hedge-funds-try-to-turn-a-profit-one-home-at-a-time/
 

_DC_

Kingfisher
I don't know when, but my spider sense says housing will go down again. I think the housing crash brought real estate back where it belongs. Its like my dad questioning why I "throw away" 2k in rent every month. Its not like the past few decades were houses almost always went up in value. The simple answer is Id rather save and buy a nice condo cash money when they come back to earth.

Id be interested in seeing a chart of historical average income to average house price. I think this chart would confirm my beliefs. Recent buying in my opinion was people trying to get in "low". But low is relative. Its only low compared to the ridic 2007 prices.
 

paninaro

Woodpecker
j r said:
Trying to predict macroeconomic trends isn't really the best way to make this sort of decision. I would just do a cash flow analysis and figure out how long it's going to take you to get back your initial investment and start earning profit. If you're worried about the market, just run a few different scenarios.

Also, what are you going to do with the house? If you're planning to live in it, then resale value won't mean that much. If it's an investment, even if sale prices drop, the house still has rental value.
This. If you want to worry about macro trends and/or make money off them, that's entirely separate from what you should do in relation to your own housing situation. You need a place to live, and as long as you have a way to pay the rent or mortgage, that's what determines your own personal "bubble".

I'm not worried about a crash because I have a fixed mortgage on my residence, and plan to live in it for many years to come. So I don't really care how its market value changes from year to year, as I'm deriving benefit every year from having a place to live. For me, my primary residence is primarily about lifestyle (location, amenities, etc) and not an investment.

I think people are mixing up micro and macro here a bit.
 

Guy80

Pigeon
Rates dropped looks like the fed is trying to keep it from crashing to me. Likely sell a secondary residence just to get out early
 

Arado

Pelican
Gold Member
Figured worth a separate discussion apart from the 2020 stock crash thread. What are people thinking in terms of the direction of the real estate market?

This guy has a ton of videos promoting income properties but recently took a very bearish turn and hints that there's going to be a big crash once the stimulus/unemployment/forbearance period wears off and defaults start once people start confronting the debt overhang, so the lows should come in 2021/2022 ish.

 

NoMoreTO

Pelican
Its a tough one to answer. This could also serve as a thread on how people are finding the real estate market.

It seems to me that the longer term trends will be :
- Downtown commercial will get slaughtered. Imagine all the businesses going out of business and not being able to sign up a new high priced lease. The cap rate goes to shit. If we look at restaurants and cafes' alone, their businesses are getting slaughtered and who would reopen into a society that shuts down on a moments dime. They have told us about repeated shutdowns so anyone operating in a downtown or high priced retail location will have to be wondering.
- Suberbs > Downtown. Downtown property I tend to think will suffer as the prospect of being shut down in a condo vs. a townhouse in the burbs makes all the difference.
- Rural and Small town will see a boost, with increased work from home options, more people will opt for the simple life.

I have a rental in a mid sized city, and recently put the 3 bedroom unit up for rent. Unusually quiet, I got 1 response online.
 

scotian

Crow
Gold Member
I don’t think there’ll be as much of a mass exodus to the burbs and beyond as predicted but it will certainly be noticeable especially among young families, a trend which has already been occurring in recent years due to insane urban real estate prices across North America. Childless, unwed fornicators like myself will still want to live downtown, with the rise in urbanites working from home and empty commercial buildings needing tenants, I think that many such units could be converted to residential. It’s been happening in Calgary since the 2015 oil crash.

This is one of those rare times in history that people on the left and right can come together, for different reasons, and agree that our consumer societies based on commuting by automobile to crowded city centres only to flee them after 5pm for the burbs is unsustainable.

I doubt it’ll happen though, I expect things things to basically go back to normal but think that certain over valued markets to soften up. I was in the market for a new home before the Wuhan flu but now plan on stacking cash and hopefully scooping up a house near Vancouver by 2022.
 

presidentcarter

Ostrich
Gold Member
Hopefully I'm the only one thinking it's wise to save for acreage, not a fancy house or condo in a dense urban market.

Land is where it's at.

But NPCs need to keep buying up overpriced condos and small lot family homes.:tard:
 
presidentcarter said:
Hopefully I'm the only one thinking it's wise to save for acreage, not a fancy house or condo in a dense urban market.

Land is where it's at.

But NPCs need to keep buying up overpriced condos and small lot family homes.:tard:
When do you think would be a good time to buy in, for a rural plot? I know now is good, but if there's a crash I'm just waiting with my funds in the wing to buy in when its at an all time low, only have to figure out when its coming.
 

username

Pelican
Gold Member
The worse conditions get in cities and increasing food shortages the more people will be looking for rural properties. Most people will probably looking for turn key properties... ones that have a house on it already, a well, and septic. Even more for ones that have crops or food already being produced. The few on the market will get snatched up and not too many more will be added because who would sell such a property right now.

For land only you should start looking now but there will probably be some better deals pop up. After poking around on numerous county web sites it is interesting to see how many parcels are owned by people in cities several hours away. So these far away land owners will probably start dumping them soon when they need money for other things.

If you are going to buy just a parcel really try to get one with a well on it already or has easy access to water. Wells can get really pricey sometimes into the 6 figures in areas with really deep water tables or hard to drill soil. At least with a well already done you can pull in an RV or trailer and get established.
 

911

Crow
Scotian it won't just be yong families, this is a demographic that's already at the forefront of the "donut" migration pattern from the city to the suburb. You're going to see scared shitless boomers who are living in upscale downtown and city condos want to move to the burbs and exurbs. The kind of people who wear masks out and yell "two meters!" at you if you walk past them. I had this happen twice to me this weekend alone, a woman in her 60s and a guy in his 70s.

These people are scarred by covid, and with the globalist scoundrels like Trudeau, Cuomo, Garcetti (nearly ALL big city mayors, blue state governors are on the UN globalist agenda wavelength) seeding into them the idea that this is the "new normal", they will want to flee the city. Those fancy restaurants don't matter any more if they're too scared to sit in one of them, and they'll be scared taking a cab anywhere, let alone, god forbid, get on public transit! Forget about theater and crowded museums...

Music4Piano, start looking now and expect the price to be lowest in 2021. Look into distress foreclosure sales by municipalities/counties at the end of the year as there will be a large number of owners who will not be able to pay property taxes. The sweet spot is in land in exurbs that are 60-90min from the city, still close enough to telecommute but feels completely rural.
 
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