Real estate thread

[cowboy]

As stated above, a good percentage of the people buying homes are people fleeing the urban centers. For example, the previous small/rural communities in the northeast are getting flooded with New Yorkers, Jersey, and Philly people. Quaint PA towns are now filled with NY vehicle plates and NY accents. Previously the far outlying suburbs and towns were not the place to be. However, with high crime and covid restrictions these areas are getting a major influx and property prices are soaring.

My question is do you think the exodus from urban centers will continue over the next few years? Do you think investing in a good property is smart given the changing dynamics of society today?

Tracking everything rises and falls. But I am thinking a future of urban crime, riots, and covid restrictions will be more of a factor than building costs, restrictions, etc. People may continue to escape impacting real estate close to the centers. Any thoughts?

 

[jordypip23]

As stated above, a good percentage of the people buying homes are people fleeing the urban centers. For example, the previous small/rural communities in the northeast are getting flooded with New Yorkers, Jersey, and Philly people. Quaint PA towns are now filled with NY vehicle plates and NY accents. Previously the far outlying suburbs and towns were not the place to be. However, with high crime and covid restrictions these areas are getting a major influx and property prices are soaring.

My question is do you think the exodus from urban centers will continue over the next few years? Do you think investing in a good property is smart given the changing dynamics of society today?

Tracking everything rises and falls. But I am thinking a future of urban crime, riots, and covid restrictions will be more of a factor than building costs, restrictions, etc. People may continue to escape impacting real estate close to the centers. Any thoughts?

I think the trend will continue for a bit. There will always be some demographic of folk (especially younger folk with no kids) that want to return to the big cities. However, now with remote work (among the white collar set) becoming more & more prevalent, I think we're going to see this trend continue for quite some time. The big city people moving to smaller exurban areas & to the sunbelt (FL, TX, Carolinas, etc.)

 

[budoslavic]

For millions of young Americans, the pandemic has been a time machine back to the early aughts.

By July 2020, 52 percent of 18- to 29-year-olds, or 26.6 million adults, were residing with a parent, according to a new Pew Research Center analysis — the highest number since the Great Depression.

In New York, some 300,000 left the city. Many of those people found themselves living in time capsules: lovingly preserved childhood bedrooms, plastered in posters and magazine cut-outs of boy bands and James Cameron blockbusters, and tricked out with décor from the Myspace era.

Many are still there.

 

[DanielH]

This wouldn't necessarily be a bad thing if both the parent and child were in harmony with each other, split chores, bills, etc. But speaking to a lot of older Gen X and boomer guys, their millennial children are moving in and doing absolutely no chores, isolating in their rooms yet still expecting food to be made for them. I think the fault is at least half the parent's as they should have raised more respectful children, and they should demand their kids do chores when moving in. Blackpilled (Devon Stack) did a great analysis yesterday of Gran Torino, where he makes similar points.

 

[KulturedKaveman]

I’m in a decent sized Midwestern city. My big debate is buying a house in the suburbs or buying in an “up and coming” neighborhood. I’m trying to figure out if the up and coming neighborhood will hold its value with the suburban craze. And of course - there’s the crash possibility that throws a wrench in all this thinking. You guys think there’s seriously going to be a crash? I’m starting to see homeownership as a guard against inflation.

 

[DanielH]

I’m in a decent sized Midwestern city. My big debate is buying a house in the suburbs or buying in an “up and coming” neighborhood. I’m trying to figure out if the up and coming neighborhood will hold its value with the suburban craze. And of course - there’s the crash possibility that throws a wrench in all this thinking. You guys think there’s seriously going to be a crash? I’m starting to see homeownership as a guard against inflation.

I would just caution against buying in those up and coming neighborhoods. Those are going to be full of rootless people who really don't care about their neighborhood, only what they can get out of it. That's why California was so quick to collapse. Around WWII, California was almost 90% white, but they had no roots in the state, mostly being 1st-3rd generation migrants there, not even really settlers, as they wer opportunistic migrants.

If there is a crash I don't think it would be primarily of the housing market, it would be a broader societal one.

 

[EndlessGravity]

You guys think there’s seriously going to be a crash?

When this debt bubble pops it's going to make the 2007 period seem fun. The government will try to soft land it but it's coming.

 

[budoslavic]

I’m in a decent sized Midwestern city. My big debate is buying a house in the suburbs or buying in an “up and coming” neighborhood. I’m trying to figure out if the up and coming neighborhood will hold its value with the suburban craze. And of course - there’s the crash possibility that throws a wrench in all this thinking. You guys think there’s seriously going to be a crash? I’m starting to see homeownership as a guard against inflation.

Don't buy a house in the suburbs because of Biden-Harris Administration's plans - Affirmatively Furthering Fair Housing (AFFH) - to destroy and abolish the (predominantly whites) suburbs. AFFH was Obama's idea so Biden is finishing it for him.

Joe Biden’s disastrous plans for America’s suburbs

If you live in the suburbs or you’re a city dweller eyeing a move to a quiet cul-de-sac where your kids can play outside, you need to know about Joe Biden’s plan for a federal takeover of local zon…

nypost.com

How Biden’s Housing Plans Would Destroy America’s Suburbs

If suburban voters begin to understand what Biden’s housing rule would mean for their communities, many would flock back to Trump.

thefederalist.com

Edit. Also, yes...there will be another market crash. Below is the ideal thread to check out.

Prices, Inflation/Deflation, Interest Rates & The Fed

Are your savings safe in your bank account? Waiting for prices to drop on certain items in the next while, or is now the time to get in? A separate Thread for trying to determine whether we are heading into a deflationary or inflationary environment. We can also use this thread to track price...

www.rooshvforum.com

 

[Blade Runner]

When this debt bubble pops it's going to make the 2007 period seem fun. The government will try to soft land it but it's coming.

Time frame? Best guess, if you please.

 

[Guy80]

Time frame? Best guess, if you please.

some are now saying Q4 2021, previously the crypto, real estate and economy pepl all stated 2-3 years

 

[EndlessGravity]

Time frame? Best guess, if you please.

2 to 3 years. Powell himself has basically come out and said they're trying to soften the mortgage crisis (and by extension they're trying to soft land the employment crisis). By my guess they can probably keep moratoriums another year at most along with things like suspended work requirements for unemployment. There are other factors at work too but the covid-19 excuse is only going to last for so long.

15% unemployment and double the amount of defaults on homes from 2008...the clock's ticking.

 

[NoMoreTO]

2 to 3 years. Powell himself has basically come out and said they're trying to soften the mortgage crisis (and by extension they're trying to soft land the employment crisis). By my guess they can probably keep moratoriums another year at most along with things like suspended work requirements for unemployment. There are other factors at work too but the covid-19 excuse is only going to last for so long.

15% unemployment and double the amount of defaults on homes from 2008...the clock's ticking.

I was talking to my nieces' fiance today. He is looking into a well finished trailer for about 100K. I told him it's a good call. Buy the trailer, pay it down over a short term, live lean with the amount of space you need. For these people taking on these 500K+ mortgages, you have to wonder. Everything rests on the low interest rates. In Canada you don't lock your interest rate for 25 years, but only 5- 7 years max.

I'm not sure if they plan to do Volcker did in the 80s with double high interest rates, but it seems like an interest rate above 5% would crash the prices of the entire market.

My current opinion is that they won't raise rates, but will increase requirements on down payments to 30% down, and bring in "government co-buy" programs which are already in Canada now for 5 years although not used too often. In these programs the government maintains an equity stake in your house.

 

[AntoniusofEfa]

I was talking to my nieces' fiance today. He is looking into a well finished trailer for about 100K. I told him it's a good call. Buy the trailer, pay it down over a short term, live lean with the amount of space you need. For these people taking on these 500K+ mortgages, you have to wonder. Everything rests on the low interest rates. In Canada you don't lock your interest rate for 25 years, but only 5- 7 years max.

I'm not sure if they plan to do Volcker did in the 80s with double high interest rates, but it seems like an interest rate above 5% would crash the prices of the entire market.

My current opinion is that they won't raise rates, but will increase requirements on down payments to 30% down, and bring in "government co-buy" programs which are already in Canada now for 5 years although not used too often. In these programs the government maintains an equity stake in your house.

Any increase if interest rate, even at 0.25 %, will send the market on a downward spiral.

The question is not if the crash comes, the question is when. Here in Germany the RE prices in the radius of 100 KM from places with employment are pretty much beyond reach for the bottom 90%. This is not sustainable long term, regardless of what the RE investors would like to believe.

 

[Dusty]

Meanwhile, lumber prices are going through the roof.

Soaring lumber prices reverberate through U.S. housing market

Skyrocketing lumber prices threaten to thwart the momentum of the U.S. housing market, which for months has been one of the brightest stars of the recovery from the pandemic recession. At the onset of the health crisis, "the mills stopped producing," said Dustin Jalbert, senior economist and...

finance.yahoo.com

“Meanwhile, lumber prices have jumped more than 300% year-on-year to record highs.”

 

[NoMoreTO]

Any increase if interest rate, even at 0.25 %, will send the market on a downward spiral.

The question is not if the crash comes, the question is when. Here in Germany the RE prices in the radius of 100 KM from places with employment are pretty much beyond reach for the bottom 90%. This is not sustainable long term, regardless of what the RE investors would like to believe.

You're right, it won't take much.

But I'd say it is sustainable, just means people don't own the homes they live in. That to me is the sad part. I'd love to see a crash and an interest rate hike even though I own. But I think they will just underwrite everyones homes and screw the next generation out of home ownership. Boomers will be happy at their capital gainzzz.

 

[budoslavic]

 

[aynrus]

I’m in a decent sized Midwestern city. My big debate is buying a house in the suburbs or buying in an “up and coming” neighborhood. I’m trying to figure out if the up and coming neighborhood will hold its value with the suburban craze. And of course - there’s the crash possibility that throws a wrench in all this thinking. You guys think there’s seriously going to be a crash? I’m starting to see homeownership as a guard against inflation.

Doubt there'd be any crash in prices, prices will not go down below current level. Current level reflects inflation. There should be more inventory, though, eventually, after the peak is reached. It can stay very heated for a while though, I guess up to a couple of years in the worst case scenario. But even to really slow down and to really get into downward cycle it will take a while, after the peak is passed - overall can take several years. Waiting for it might be a losing game, as inflation is there.

 

[EndlessGravity]

Inventory shortage seems to be bottoming out, gents. Major metro data is showing it and I was starting to feel it last month. Prices should slow but we'll have to watch the Fed to see if they can soft land the defaults. Forbearances have decreased but not much. 4.4% of outstanding mortgages last I checked.

 

[AntoniusofEfa]

Inventory is tight as many RE companies keep whatever they have off the market, to keep the prices high. They rent some out at insane prices, run to the bank to take out a loan against an ever appreciating asset, and pocket some of that cash as "management fee".

This cycle will continue until the national currencies crash.

 

[nordle]

I don't buy the crypto meme and I am 100% allocated in property. For the last 2-3 years I have known that something big was coming. I kept my properties unencumbered of any mortgages. Looks like with the inflation coming now, I should have 3x'd my entire portfolio and just had inflation eat away at my debts. That said, I am still happy I only invest in real estate. Who knows what is going to happen in global finance, but land and income-producing properties will always be tangibles.