Housing market is the wild wild west. Any real-estate fellas on here?

[Klif]

A short story that might or might not be relative to the discussion here. Around 1975 I was living in England, stationed at RAF Chicksands. I had a friend who was married to an English lady and they had bought a house there about 5 years before. It was paid for in cash and when they sold it, for around 150,000 pounds they were paid in cash. That was all well and good. But, at the beginning of the year English Pounds were valued at $2.40 each. There was rapid drops in the value of the currency and in the next couple of months after the sale the pound had dropped to below $1.60 (him losing 80 cents on every pound). He was rushing around trying to sell pounds to all of us who lived off base and had to do most of our transactions in the local currency. The base bank offered him $1.40 per pound exchange rate. So, even though he off loaded a lot of his pounds his cash value went from roughly $360,000 to $240,000 in just a few months.

Just goes to show you that the value of the dollar here can crash really fast. While it is not so apparent since we aren't living and working in 2 different currencies, you can see how much more expensive goods are getting and while they aren't worth more they cost more dollars to buy.

 

[blackbird47]

As a lender for 20+ years - This is my third "appreciating" cycle where every sale is a new record.

A strategy some buyers use is to simply outbid everyone else - Then renegotiate after the appraisal.

If the seller won't budge - Cancel the deal and move on.

I literally have a $30M pipeline of underwriting approved buyers who are also frustrated...

About to sell our home in East Cobb. Know any good Residential Real Estate Attorney's who could help us draw up a contract to sell it our self? My sister-in-law is a broker in Florida who is guiding us through the process. Title company can handle the closing. Thanks

 

[Chatsworth]

I hear and read people say all the time,
“that the crash is coming”… “It Has to come”. “Things can’t go on like this”..and “ this is the same as 2007“..

my opinion after watching the events of the last few years?

it’s not guaranteed a big crash is coming.
It’s not guaranteed that there’s a bubble is going to burst.
It’s not guaranteed, that our country will see 2007 collapse and recession ever occur again...

if everyone is sitting and waiting on past events, do you happen again. They might be waiting a long time.

seems our country‘s leader ship. Has decided to never let that occur again, the markets will never go up and down in a natural flow ever again.
The economy, will never go up and down in a natural flow. Ever again
Our countries leaders have decided they will flood the market with money every president in the future from now on will just demand a stimulus and tax cut and stimulus and tax cut and tax payer money invested into private business and markets from now until we are all long gone...

It’s not going to end, anytime soon,. So I wonder why people keep assuming there will be a big adjustment coming?… It may not ever happen again.

 

[Grady263]

You might want to rethink that logic.

You're telling him to buy something that's already inflated by something like 50 to 100% in just the last year...to avoid inflation.

So many are upside down in homes right now. We just sold our house back in December and it never should've sold for what it did! EVER!! When the new wears off and folks understand that they are $50K - $100K upside down, you will see folks pack up and walk away from that bad investment.

We are going to build at some point, but not while lumber is still marked up 100+%.

 

[GFB]

I hear and read people say all the time,
“that the crash is coming”… “It Has to come”. “Things can’t go on like this”..and “ this is the same as 2007“..

my opinion after watching the events of the last few years?

it’s not guaranteed a big crash is coming.
It’s not guaranteed that there’s a bubble is going to burst.
It’s not guaranteed, that our country will see 2007 collapse and recession ever occur again...

if everyone is sitting and waiting on past events, do you happen again. They might be waiting a long time.

seems our country‘s leader ship. Has decided to never let that occur again, the markets will never go up and down in a natural flow ever again.
The economy, will never go up and down in a natural flow. Ever again
Our countries leaders have decided they will flood the market with money every president in the future from now on will just demand a stimulus and tax cut and stimulus and tax cut and tax payer money invested into private business and markets from now until we are all long gone...

It’s not going to end, anytime soon,. So I wonder why people keep assuming there will be a big adjustment coming?… It may not ever happen again.

If you ever read Security Analysis by Benjamin Graham, you'll see that the idea of a "new normal" comes and goes every so often. Valuations don't matter, debt doesn't matter, no more recessions, bla bla . . . it's the same thing people were saying in the 1920s and many times since. Without fail, reality swings it's ugly stick before too long and we figure out Ecclesiastes had it right all along.

 

[Chatsworth]

If you ever read Security Analysis by Benjamin Graham, you'll see that the idea of a "new normal" comes and goes every so often. Valuations don't matter, debt doesn't matter, no more recessions, bla bla . . . it's the same thing people were saying in the 1920s and many times since. Without fail, reality swings it's ugly stick before too long and we figure out Ecclesiastes had it right all along.

Quite possibly you are correct or he is,
It just seems to occur to me that normal will no longer be normally occurring.

You see, for a long time the US politicians mistakenly thought that the average US citizen cared about the debt, and cared about how far they went down a road of socialism or taxpayer investment into private industry.

they thought the average taxpayer was watching them.
But now they realize the average taxpayer citizen doesn’t care any longer about debt or bail outs or government tax payer investment into the market or be allowed stimulus or tax cuts even though we are in the face of looming overwhelming debts…

what they discovered was no one cared as long as they got a taste of the sugar.… So now they feed us a small stimulus on a regular basis. And everyone’s happy.

I just don’t see it ending, there was a time in the 1990s when the Dow hit 10,000 they had a big party.
Then it approached 20,000 and people said it was crazy?
It blew right past 20,000 and went to 30,000..

no one seems to care that it’s the government and taxpayer money being dipped into the markets to continue to drive it up up up..

They don’t care anymore, I don’t care anymore, no one cares anymore.

So I’m really not certain that things are going to adjust or a bubble one will pop..

it’s quite possible it will just continue to go up up up..
of course until it stalls and falls flat to the earth and crashes..

But I’ll be honest, I don’t see that happening for a long time.
Because they won’t let it.
Just which political party and president do you think is going to look the taxpayer in the eye and tell them they are going to have to eat some hard tough beef to chew on?

Neither party is willing to do that.

 

[rbstern]

I hear and read people say all the time,
“that the crash is coming”… “It Has to come”. “Things can’t go on like this”..and “ this is the same as 2007“..

my opinion after watching the events of the last few years?

it’s not guaranteed a big crash is coming.
It’s not guaranteed that there’s a bubble is going to burst.
It’s not guaranteed, that our country will see 2007 collapse and recession ever occur again...

if everyone is sitting and waiting on past events, do you happen again. They might be waiting a long time.

seems our country‘s leader ship. Has decided to never let that occur again, the markets will never go up and down in a natural flow ever again.
The economy, will never go up and down in a natural flow. Ever again
Our countries leaders have decided they will flood the market with money every president in the future from now on will just demand a stimulus and tax cut and stimulus and tax cut and tax payer money invested into private business and markets from now until we are all long gone...

It’s not going to end, anytime soon,. So I wonder why people keep assuming there will be a big adjustment coming?… It may not ever happen again.

Generally speaking, economic laws are more durable and forceful than government laws.

See Argentina (and Brazil), circa 1980s. Germany, 1920s. Hungary, post WW2. Greece...any number of times. Venezuela, right now. And on and on.

The feds can't lower interest rates any more. Getting trillions in funds back from the public is going to take a massive tax increase. The alternative is a monetary policy that depends on printing more currency. The amount of credit outstanding right now isn't based on an increase in bank deposits. It's based on lowered lending standards which, in turn, means the fed is underwriting all of this with paper money backed by nothing but a promise. Promises from Washington these days are worth less than a wooden nickel.

I wouldn't quite say we're sitting on a powder keg. More like we're pumping gas with a lit cigarette dangling from our collective mouth.

 

[Chatsworth]

Generally speaking, economic laws are more durable and forceful than government laws.

See Argentina (and Brazil), circa 1980s. Germany, 1920s. Hungary, post WW2. Greece...any number of times. Venezuela, right now. And on and on.

The feds can't lower interest rates any more. Getting trillions in funds back from the public is going to take a massive tax increase. The alternative is a monetary policy that depends on printing more currency. The amount of credit outstanding right now isn't based on an increase in bank deposits. It's based on lowered lending standards which, in turn, means the fed is underwriting all of this with paper money backed by nothing but a promise. Promises from Washington these days are worth less than a wooden nickel.

I wouldn't quite say we're sitting on a powder keg. More like we're pumping gas with a lit cigarette dangling from our collective mouth.

I don’t disagree at all, I’ve been saying since the 1980s that our debt was way too high, and it was only 500 billion under Ronald Reagan. And I was running around yelling like chicken Little. And no one cared.

no one cared during the next four or five presidencies, no one cared
What are we at now? Something like 20+ trillion?

and still, no one cares.
As long as they get a little bit of sugar in their mailbox every now and then. Everyone’s a winner.
Buy a house, you are a winner. It’s going up
Buy a stock?… You are a winner, it’s going up
Everything is going up, and everyone’s a winner.


And you say interest-rate can’t go any lower? I agree, but have you considered negative interest rates?

no, it’s not impossible.
Several countries have had to go there to try and keep an economy moving.

put money into savings in the bank, you pay them. They don’t pay you interest
Borrow money? You don’t pay them interest they pay you.LoL

You seem to know a lot about money, I assume you are aware that countries have gone there with negative interest rates. I know it sounds preposterous, but we aren’t far from it the next time they are trying to save our failing economy don’t be surprised if you hear it get discussed.

 

[Chatsworth]

I’m actually kind of rooting for them kind of like a cheerleader. I don’t think they need to stop at 20+ Trillion dollars, I’d like to see just how high we can get it why stop at 20 trillion when you can go to 30 trillion
Do you know what comes after trillion? A quadrillion.
Do you know what’s after a quadrillion?,… A quintillion..


Oh yeah, there’s no reason to stop. I say we stop playing around with the small numbers and go big. Make it big big big

 

[GC Josh]

I’d be happy to help
There are a few things I can recommend in this market.. I don’t mind giving out free advice if it will help you get a house..

I just went under contract on a house in ball ground today using these strategies..

if your realtor is not already implementing this, then you may need to question who your using...

1- use a lender that can compete with cash offers on closing times.. my preferred lender can close in 15 days from binding date... big competing factor .. most lenders are 30-60 days out

2- use escalation clauses , if you don’t know what this is, call me... we can discuss ... example; appraisal gap coverage, bona fied offer beating by x dollars , etc

3- be first on the scene and use quick expiration offers ( some instances ) ... do not let the agent tell you “ we are waiting until Monday to view all offers”

4- letter helps , short due diligence helps, little to no contingencies help...

Call me if you need help!

Joe

thank you for the kind words folks, OttoMan @Molon Labe

Joe, thanks so much for the thoughts and advice. We are currently doing most of what you advise, so I guess we'll keep our head down and keep moving forwards.
We moved away from our first lender, who was sticking to a 25-30 day close. Our current lender can get it done in 15 days. We also have been including an appraisal gap coverage clause ranging from $5K-$10K (it has been different for each offer). We are both working from home, so we've been able to put our offer in within the first 24-36 hours that houses list.. but the one thing we have not yet done is a quick expiration on our offer(s). We'll give that a try and see if it helps. Thanks, again.