Bonfire1996 said:

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YouBet said:

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Bonfire1996 said:

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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Seven Costanza said:

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One of the fundamental long-term issues is the shortage of homes. We have basically lost a decade of new home construction, something that seems nearly impossible to catch up to.



The chart is for new homes completed.

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From 2007-2017 I was in homebuilding supply. Coming out of the crash, this chart was my lifeblood.

Did you know: it takes 1.5 million units of housing built annually just to make demand equilibrium. Tear downs, urban sprawl, immigration, education growth, age growth, wealth creation, printed money all factor into an equilibrium of 1.5 million units needing to be built annually.

So you nailed it with your question. How do we catch up to demand with that lost decade from 2010-2020? The answer is with supply. That's the only answer. It's why I answered on page 1 that the only areas who will experience a real estate correction are politically blue areas where people will flee.

In Texas, you won't have price corrections. You may have price stagnation, but when rates return to historical lows in 2023-2024, say hello to California housing prices and a metric shlt ton of Multifamily construction.

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Do you think blue areas within Texas (Austin, Dallas, Houston, San Antonio, El Paso) are outliers to this though? Honest question.

Austin is already falling from its peak based on other articles I've read but they were also an extreme outlier, nationally. Dallas seems to still be a hot market although we are seeing homes around us cutting prices. I would argue they put first prices out there that were simply stupid but they are still selling very highly. I'm talking about homes in the $750K+ though.

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Man I don't know. I haven't given it that much thought.

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I think Texas blues won't feel the pain like all others simply because all the jobs are moving here. Will see price drops but shouldn't drop as much as everywhere else.

Our house right now is sitting at almost $1M on realtor.com which is absolutely insane to me, but comp houses around us are still going for $850 to 1M.

Just so crazy I still don't believe we could remotely get that but who the hell knows.

I want my home valued at $1.

Had purchased a new construction home closing next month in Houston with a large builder

$5K to use their lender

Any experiences with going back to the builder and seeing what they'll do incentive wise if I go all cash?

South Platte said:

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Fightin2010 said:

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I am loading up on DRV (Inverse leveraged real estate ETF). I literally don't see any possible way real estate goes UP at this point. Best hope is flat but even that seems unlikely at 6.5% mortgage rates. Someone convince me I'm wrong. Once layoffs start to really happen I think the real estate market is doomed. Americans have left no room for anything but a perfect environment.... meaning they're maxed out on their $750k house payment at 3% interest much less the same house at 6.5% intetest (an extra $1000+ per month).

Edit: to clarify that last part

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Hey man, what are you thinking about DRV? I made a quick 9% on that day it went + $60 and sold. I wonder if the window for serious money to be made has already opened and closed. This thing has no momentum, but we are almost IDENTICAL to the price we were at 1 month ago before a huge runup starting the 2nd week of June.

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DRV would have been a nice call. You're looking at 100% return at this point.

Fightin2010 said:

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I am loading up on DRV (Inverse leveraged real estate ETF). I literally don't see any possible way real estate goes UP at this point. Best hope is flat but even that seems unlikely at 6.5% mortgage rates. Someone convince me I'm wrong. Once layoffs start to really happen I think the real estate market is doomed. Americans have left no room for anything but a perfect environment.... meaning they're maxed out on their $750k house payment at 3% interest much less the same house at 6.5% intetest (an extra $1000+ per month).

Edit: to clarify that last part

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Just more info to help you with your strategy.

The consumer is in the best cash flow shape in over 50yrs. Also, the consumer based on housing debt/costs vs income is the best shape it has been since they started tracking (mid 80s)

I haven't reviewed those stats since rates jumped from 5 to 7, so it may be we are as bad as 2007.

This could be why real estate doesn't drop as much as you anticipate or cause it to go up. If people have room to afford higher costs because they have less CC or car debt, then demand for homes doesn't drop as much as anticipated.

Harkrider 93 said:

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Fightin2010 said:

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I am loading up on DRV (Inverse leveraged real estate ETF). I literally don't see any possible way real estate goes UP at this point. Best hope is flat but even that seems unlikely at 6.5% mortgage rates. Someone convince me I'm wrong. Once layoffs start to really happen I think the real estate market is doomed. Americans have left no room for anything but a perfect environment.... meaning they're maxed out on their $750k house payment at 3% interest much less the same house at 6.5% intetest (an extra $1000+ per month).

Edit: to clarify that last part

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Just more info to help you with your strategy.

The consumer is in the best cash flow shape in over 50yrs. Also, the consumer based on housing debt/costs vs income is the best shape it has been since they started tracking (mid 80s)

I haven't reviewed those stats since rates jumped from 5 to 7, so it may be we are as bad as 2007.

This could be why real estate doesn't drop as much as you anticipate or cause it to go up. If people have room to afford higher costs because they have less CC or car debt, then demand for homes doesn't drop as much as anticipated.

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It's all but dead where I am and in the price range we sit ($700k-$1M). Prices continue to drop on the homes we are tracking in our band (~25 homes). Interestingly, the homes that we have seen go into pending contract status (all around the $700k price point) keep returning to the market about a week later.

We can only surmise that buyers haven't paid attention to the rates and when they go to secure the loan or really lock it down they discover they can't afford it and back out. I have no idea if that's true though. Pure speculation on my part.

The builders and mortgage companies are reporting high cancellations.

Harkrider 93 said:

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The builders and mortgage companies are reporting high cancellations.

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Makes sense. I really do think most people don't realize the change in math when they go to secure these mortgages.

I am comparing this to all recessions starting in the 70s if you read my post.

I also said why you might want to consider that a complete fall of real estate may not happen. May not being a month.