Author Topic: U.S. housing market about to get SLAMMED  (Read 13391 times)

fareastwarriors

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Re: U.S. housing market about to get SLAMMED
« Reply #10 on: March 30, 2020, 09:48:00 AM »
I'm not sure what the banks are doing in my area yet, but I wouldn't be surprised if they're stopping everything except for top quality borrowers with lots of cash. I haven't tried to get a loan since all this corona virus stuff started.

That being said, I have three cheap fixer-up houses that were listed just before this began. They're all a little bit below what I think they're actually worth, but still basically no interest. My realtor told me there has been a "drastic slow down" in everything real estate. We shall see, but I don't anticipate selling those anytime soon.

I've been looking at some other deals and people haven't really started to drop their prices yet. Some have just been too high to begin with, but others don't seem to realize what kind of recession we're going into. The US is due for a slow down or recession. 10 years of growth quite a bit longer than average. My memory says five to seven years is the average.

Anyways, I have a few hundred apartments and only five or six tenants have said anything about not paying. We'll see what happens in the next two or three days.

Where are your apartments located primarily?


montizzle

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Re: U.S. housing market about to get SLAMMED
« Reply #11 on: March 30, 2020, 10:58:22 AM »
"...they're all opting for a lump sum payment of the deferral at the end of their term."

haven't read the bill yet.  does it require forbearance amounts to be paid as lump sum at end of mortgage term (ie added to final payment)?

I believe that is how it is structured yeah

Morgan

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Re: U.S. housing market about to get SLAMMED
« Reply #12 on: March 30, 2020, 11:05:42 AM »
I'm not sure what the banks are doing in my area yet, but I wouldn't be surprised if they're stopping everything except for top quality borrowers with lots of cash. I haven't tried to get a loan since all this corona virus stuff started.

That being said, I have three cheap fixer-up houses that were listed just before this began. They're all a little bit below what I think they're actually worth, but still basically no interest. My realtor told me there has been a "drastic slow down" in everything real estate. We shall see, but I don't anticipate selling those anytime soon.

I've been looking at some other deals and people haven't really started to drop their prices yet. Some have just been too high to begin with, but others don't seem to realize what kind of recession we're going into. The US is due for a slow down or recession. 10 years of growth quite a bit longer than average. My memory says five to seven years is the average.

Anyways, I have a few hundred apartments and only five or six tenants have said anything about not paying. We'll see what happens in the next two or three days.

Where are your apartments located primarily?

They're in the northern panhandle of West Virginia - about an hour west of Pittsburgh.

Gregmal

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Re: U.S. housing market about to get SLAMMED
« Reply #13 on: March 30, 2020, 12:01:28 PM »
I think the current situation can create short term disturbances. But my feel was that things had already begun softening and one of the most under appreciated aspects of that was the SALT deduction ban.

TwoCitiesCapital

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Re: U.S. housing market about to get SLAMMED
« Reply #14 on: March 30, 2020, 12:02:55 PM »
"...they're all opting for a lump sum payment of the deferral at the end of their term."

haven't read the bill yet.  does it require forbearance amounts to be paid as lump sum at end of mortgage term (ie added to final payment)?

I believe that is how it is structured yeah

It was my understanding from reading an article regarding BofA's mortgages that there are two types;

1) Bank owned
2) Investor owned/packaged into MBS

For bank owned mortgages, they can restructure the mortgage to extend the maturity by 2-3 months and basically tack those payments on at the end of the mortgage.

For packed mortgages/MBS where banks are just acting as mortgage servicer, they can defer payment up to 3 months, but then a lump sum is due to cover the principal/interest missed during those 3 months. Obviously this is less flexible and less helpful than the first.

The vast bulk of conforming mortgages are packaged and resold as MBS w/ banks acting as mortgage servicer.

Spekulatius

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Re: U.S. housing market about to get SLAMMED
« Reply #15 on: March 30, 2020, 12:09:31 PM »
I think the current situation can create short term disturbances. But my feel was that things had already begun softening and one of the most under appreciated aspects of that was the SALT deduction ban.

Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst.
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Jurgis

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Re: U.S. housing market about to get SLAMMED
« Reply #16 on: March 30, 2020, 12:38:06 PM »
I think the current situation can create short term disturbances. But my feel was that things had already begun softening and one of the most under appreciated aspects of that was the SALT deduction ban.

Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst.

LOL. That's likely a reason a friend lost a bid on a house against 5 cash offers two weeks ago.

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fareastwarriors

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Re: U.S. housing market about to get SLAMMED
« Reply #17 on: March 30, 2020, 12:41:23 PM »
I think the current situation can create short term disturbances. But my feel was that things had already begun softening and one of the most under appreciated aspects of that was the SALT deduction ban.

Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst.

Speaking for CA, we needed a price correction in 15-30% for a while now.  It has gotten crazy last 3-5 years.

So maybe a 1.5m home will only be ~1+m in the fall/winter or next year. Wow, such a discount.   

fareastwarriors

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Re: U.S. housing market about to get SLAMMED
« Reply #18 on: March 30, 2020, 12:47:42 PM »
I think the current situation can create short term disturbances. But my feel was that things had already begun softening and one of the most under appreciated aspects of that was the SALT deduction ban.

Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst.

LOL. That's likely a reason a friend lost a bid on a house against 5 cash offers two weeks ago.

Not.

My cousin is not backing away from 900k house in SF Bay Area suburbs. It will be her primary residence. She is not worry about a downturn and said she will buy more as investments if she see "deals."




Jurgis

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Re: U.S. housing market about to get SLAMMED
« Reply #19 on: March 30, 2020, 12:59:17 PM »
I think the current situation can create short term disturbances. But my feel was that things had already begun softening and one of the most under appreciated aspects of that was the SALT deduction ban.

Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst.

LOL. That's likely a reason a friend lost a bid on a house against 5 cash offers two weeks ago.

Not.

My cousin is not backing away from 900k house in SF Bay Area suburbs. It will be her primary residence. She is not worry about a downturn and said she will buy more as investments if she see "deals."

I feel Bay Area housing pain.

Last year I was going from SFO to Bay Area and I'm like "there's so much empty space everywhere, why nobody's building". But, yeah, I know, reasons.

I did not go to work in Silly Valley for RE price reasons close to 20 years ago. Yeah, I know looks stupid now. Coulda bought a house below 500K in Palo Alto haha.

A friend has $2-3M house in Los Altos. I'm telling him just sell and retire to some nice place and sip margaritas. Nah.

It's OK, everyone makes their choices.  8)
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
"Money is an illusion" - Not Karl Marx
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"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"