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More real estate doom and gloom

Westy

the teste
Nov 22, 2002
54,232
20,013
Sleazattle
I wonder if the current state of the market is tied to the popularity of Zillow and Redfin?

Owners now have a price that for the most part they don't feel that they should ever sell below. Buyers are seeing the same numbers and know that they have to pretty much meet or exceed to purchase. As long as demand marginally exceeds supply this creates a positive feedback loop that will generally see prices steadily climb. Until they don't...

Neither service offered information when/where I sold my house in Virginia. I listed it for what I thought was a reasonable price, someone offered slightly less and I said sure.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
40,939
13,133
Portland, OR
The neighbor who bought the child molesters house has split from his lady and I think a realtor was there yesterday getting info for a listing. He bought it 2 years ago, it will be interesting what he lists it at.

Sold on 09/15/15 for $263,000
Homeboy bought it at auction for $178k, spent less than $10k to flip. Zillow says it's $298k. If he gets $300k, we might sell ours.
 

Westy

the teste
Nov 22, 2002
54,232
20,013
Sleazattle
The neighbor who bought the child molesters house has split from his lady and I think a realtor was there yesterday getting info for a listing. He bought it 2 years ago, it will be interesting what he lists it at.



Homeboy bought it at auction for $178k, spent less than $10k to flip. Zillow says it's $298k. If he gets $300k, we might sell ours.

You should get into flipping jimmydeaning houses.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
40,939
13,133
Portland, OR
You should get into flipping jimmydeaning houses.
I talked to him about it. He has made a lot of money in recent years, but lost his ass in the downturn. He has 5 different crews and has at least 3 houses in process at a time. He averages about $50k take home per house, so about $300k a year the last few. Good money, but it takes capital to start and effort.

I made out better with the car. :rofl:
 

ALEXIS_DH

Tirelessly Awesome
Jan 30, 2003
6,147
796
Lima, Peru, Peru
I talked to him about it. He has made a lot of money in recent years, but lost his ass in the downturn. He has 5 different crews and has at least 3 houses in process at a time. He averages about $50k take home per house, so about $300k a year the last few. Good money, but it takes capital to start and effort.

I made out better with the car. :rofl:
3 houses at under $200k each... its less then $600k in "stock"; with an inventory turnover of 2.
for a return of $300k per year?
thats an insanely good business. even if you loose half 50% of your capital in 3 flips in a row every few years; you are way ahead.

which reminds me, my famliy was looking at property in south florida a years ago, ended up buying property in another country because of tax reasons.... now I see prices have climbed over 50% in less than 4 years in so-florida.
you guys are down for a new crash anytime now. that kind of return is just insanity; and its not just the US

price-to-earning on property in Lima is about ~22.. thats a fricking 4.5% gross margin, befores taxes and renovations, when banks are paying 7.5% on insured CDs; and mortgage rates are over 9%.....

i have lost all faith in the finance industry. I firmly believe its just a worldwide scam.
so much worthless paper being pumped by central banks; housing bubbles are just "covert" inflation imho....
 
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Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
40,138
16,536
Riding the baggage carousel.
I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

 

SkaredShtles

Michael Bolton
Sep 21, 2003
65,376
12,531
In a van.... down by the river
I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

You're looking for rational in human behavior? Good luck, senor!! :D
 

ALEXIS_DH

Tirelessly Awesome
Jan 30, 2003
6,147
796
Lima, Peru, Peru
I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

we are too far down on the feeding chain to benefit from that. crumb snatching is the most we can aspire to.

alexis_dh´s current theory of real world macroeconomics:

1) central banks pump voracious amounts of cash under the pretense of dynamizing the economy.

2) financial gymnastics and a system of perverse (for those outside the cartel) incentives get the money allocated not to the productive economy; but to the financial "industry".

3) housing prices are not counted for inflation purposes; thus central banks keep pumping cash while nominal inflation is still in check. cash gets allocated to the housing market where pumped cash becomes newly created "wealth" instead of actual inflation.
carefully timed operators short the market and convert the newly created "wealth/cash" into less developed (and future valuable land) or other financial instruments/positions/leverages.

4) wage-earning idiots mortgage their souls for a piece of the newly acquired "wealth" in the form of overpriced housing; since "nominal" inflation appears to be lower than the housing prices increase (before market corrections). which actually is a perfectly rational decision, given the uncertainty and lack of complete information.

5) the market stays irrational long after most people can stay liquid. careful operators know how to time the market and collect their profits, clean and tidy and free from further scrutiny.
operators in the cartel who are not careful enough, get bailed by the goverment in the worst case scenario.

rinse and repeat.

moral of the story. should have gone to finance school in the states, and get a job at a central bank instead of engineering and working peddling cars for mercedes-benz for single digit bottom lines.
central banks and investment banks; thats where the magic of farsical wealth creation and comission extortion happens.
 
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jonKranked

Detective Dookie
Nov 10, 2005
85,562
24,182
media blackout
I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

i always thought the "houses for cash" were generally people looking for houses to rehab/flip
 

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
40,138
16,536
Riding the baggage carousel.
i always thought the "houses for cash" were generally people looking for houses to rehab/flip
Oh, they are shifty as fuck, for sure. I just remember we would get metric shit tons of these things in the mail last time the market got stupid. I suppose they are looking to prey on desperate people who are in over their heads.
The other metric I like is how many under 30 somethings I know with, or getting, real estate licenses. That number is also on the rise near as I can tell based on anecdotal evidence.
 

ALEXIS_DH

Tirelessly Awesome
Jan 30, 2003
6,147
796
Lima, Peru, Peru
I got two of those "We will pay cash for your house and close in less than 24 hours!" things in the mail today. This house, just a couple doors down, sold in 3 hours. A coworker bought this place just around the corner for $15000 over asking price. I'm dying for someone to explain to me how any of this is rational.

its not that bad actually

asking price for this run down house (lot is under 2000sq ft) in the slums in Lima is $385K, in a neighborhood where the average income is well under $5k per year.
http://urbania.pe/ficha-web/venta-de-casa-en-la-victoria-lima-5-a-mas-dormitorios-3824587

Salaries are 1/3 of those in the states. Adjusted for purchasing parity, that crackhouse would be over $1million in the states

Once the market crashed 10 years ago in the US/Europe; hordes of newly minted money came to shore in developing markets... once we crash and burn; the money will flow back to the states/europe.
 

DaveW

Space Monkey
Jul 2, 2001
11,160
2,685
The bunker at parliament
@ALEXIS_DH that's no worse than down here in NZ.
Auckland the average house price is now over the million dollar mark at (in august last year) $1,013,632
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11704671

The average income is $48,800.
https://www.careers.govt.nz/jobs-database/whats-happening-in-the-job-market/who-earns-what/

For 5 times the average income you now cannot even get a studio apartment unless you get very very lucky.
Of course if you don't already have a heap of cash for a deposit you are screwed for trying to save for a deposit, rents have gone through the roof as well, with people on average income or less now spending an average of 54% of the take home pay on rent.......
 

Toshi

Harbinger of Doom
Oct 23, 2001
38,029
7,549
Sounds like Boulder. Or Seattle. Or the Bay Area 10 years ago (worse now)...
 

ALEXIS_DH

Tirelessly Awesome
Jan 30, 2003
6,147
796
Lima, Peru, Peru
@ALEXIS_DH that's no worse than down here in NZ.
Auckland the average house price is now over the million dollar mark at (in august last year) $1,013,632
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11704671

The average income is $48,800.
https://www.careers.govt.nz/jobs-database/whats-happening-in-the-job-market/who-earns-what/

For 5 times the average income you now cannot even get a studio apartment unless you get very very lucky.
Of course if you don't already have a heap of cash for a deposit you are screwed for trying to save for a deposit, rents have gone through the roof as well, with people on average income or less now spending an average of 54% of the take home pay on rent.......
that´s inflation, not called inflation.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
40,939
13,133
Portland, OR
I have a feeling the housing market might crash before the used car market, but it is a close race at this point. With the neighbors house on the market, it will be interesting to see where it lands. He bought it barely a year ago for $268k, he has it listed for $310K hoping for a $300k+ sale. Not bad for only living in it a year and have done NOTHING to it.
 

kidwoo

Artisanal Tweet Curator
I don't know what you guys are so worried about. In 2007/2008 the lending climate was created by a chief executive who was a born rich frat boy who got credit for being a business man even though everything he touched turned to shit. He didn't understand that letting the markets run wild came with consequences.


It's a totally different oversight environment these days.
 

SkaredShtles

Michael Bolton
Sep 21, 2003
65,376
12,531
In a van.... down by the river
I know.
All you can do is trying to have no mortgages or investments when the crash happens and then try to ride the way up until the next crash.
That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE. :D
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
40,939
13,133
Portland, OR
That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE. :D
I failed at it twice. Bought high ('00), sold low ('03). Bought low ('09), sold lowerer ('10).
 

Adventurous

Starshine Bro
Mar 19, 2014
10,261
8,767
Crawlorado
That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE. :D
I failed at it twice. Bought high ('00), sold low ('03). Bought low ('09), sold lowerer ('10).
You don't need to time the market, you just need to time @jimmydean. Whatever he does, do the opposite.
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
40,939
13,133
Portland, OR
You don't need to time the market, you just need to time @jimmydean. Whatever he does, do the opposite.
The first one was impulse (never a good choice) and the second would have worked out in the long run, but I sold it when we split since she couldn't afford it when I left.

<edit> Bought @ $176k in '09, sold for $155k in '10, Zestimate®:$288,306

:shakefist:

<edit2> Sold on 03/27/15 for $220,000, was built in '06 and sold for $235k new. Interesting fluctuation in that townhouse.
 
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Mo(n)arch

Turbo Monkey
Dec 27, 2010
4,441
1,422
Italy/south Tyrol
That's exactly the definition of timing the market. And it's a fool's errand. If your timeline is not long term and you haven't got the guts for it, just get out of the market and DON'T LOOK AT IT ANY MORE. :D
Well, I didn't mean shorting anything, but maybe you can educate me a little.
My idea is the following:
I will not get into the share or real estate market in the next time as it seems like we are getting closer to the next bubble and I don't have enough money to get into, especially real estate.
But after the bubble bursts, the market should start to raise again. It could obviously fall even more, but in the long term it should rise again.
What is the definition of long term anyway? 10 years?

Or am I completely wrong?