The Fed seems hellbent on crushing all markets at this point. As soon as we see 7% mortgage rates shit's gonna get wild. I am definitely sitting on the sidelines for now but the wife and I are looking for the next place to spend 51% of our time. I have a knack for timing the exact peak of the market so I am deferring to her lol.

i spoke with my real estate agent last night, i was thinking about selling in spring, and he was like do it now and i can get a buyer signed in about a week, and dont even think about waiting until spring because its going to be a rough winter.

If you secured a 30-year fixed mortgage on a $600,000 home at a 2.6% interest rate in 2021, you have the same monthly mortgage payment as someone that just bought a $392,000 home at today’s 6.2% interest rate.

here we fucking go

https://www.newstatesman.com/quickfi...egative-equity

23% of housing contracts in vegas are getting abandoned. 26% in jacksonville florida.

sharpest value drop ever?

https://www.marketwatch.com/story/th...te-11664201599

the housing market is about to do another thing

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reading an interview with a hedge quant from sept 2007.

i dont remember this point being made in either lewis' book or the movie;

traditionally you would put money into securities because the underpinning asset was rated strongly and yeah we all know about the triple A tranche ratings.

but what this quant just spelled out to me is that the reason the banks were rubber stamping every single loan application wasnt just fee harvesting or the naive belief that everyone deserved 'the american dream' or some political pressure or even the expectation that the adjustable rates would be profitable or whatever.

the reason they rubber stamped the loans is because _they needed more mortgages to back fresh tranches_ so funds/investment banks can repackage the new tranches as cdo's. thats how hungry the market was for cdo's.

i mean its a subtle point but its insane that the market for mortgage backed securities basically created an artificial demand for more mortgages and of course the banks didnt give a shit if they were subprime because they sold them off in the tranches, they had no direct exposure to the default rates of the underpinning assets. and the tranches and cdos were so fucking profitable and so fucking sought after and had spreads so fucking small that THE BANKS THEN TURNED AROUND AND PAID TO GET EXPOSURE TO THEIR OWN TOXIC ASSETS because the investment bankers really didnt have any line of site with the mortgage underwriters across the hall who were just turning and burning every application they could punt to the secondary markets.

i swear to god its making my eyes water just thinking about it.

https://news.yahoo.com/homebuyers-un...203707947.html

About 270,000 homebuyers who bought during the red-hot housing market this year already owe more than their house is worth, a new analysis found.

oh you thought housing prices were dropping?

https://www.wsj.com/articles/some-ho...nt-11669898461

tl;dr people are going to be able to get $1m mortgages for 3% down starting next year without them being considered jumbo. so no 20%, no elevated income requirements, no higher credit rating to apply. jumbos used to be min 740 credit rating and a 36-43% debt to income ratio. that shits done if youre in an eligible area. no ones going to extend you that sort of federally backed loan if youre paying a milli for some red state shitpile that no one else will ever be able to afford much less want to buy. but if youre interested in getting a house in a city with good sushi, boom youre sorted.

note that 12.5% of all houses on the market right now are priced above a million dollars. so anyone with a 50% debt to income ratio and credit score 620 or better is literally going to be eligible for a 1m house.

the math there comes out to $7800 a month on a 5.9% interest rate mortgage, all in. and yeah, $7800 for someone even making tech money is a huge monthly nut. but for a couple? super doable.

so i decided to do a bit of research on this and see what a million dollars could get in NYC / yonkers, brooklyn, staten island, hoboken, queens that have 3 bedrooms or more..





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so yeah thats like a thousand fucking homes right there, many of which are multiple dwelling units, eg brownstones in brooklyn etc where you can rent out half the place as a stand-alone apartment.

so yeah i think we need to consider that although the ability to sustain current price levels is largely tied to tech sector or better salaries, even if the employment pool shrinks 20%, a fucking whole lot more than 20% new prospective buyers are about to hit market. and they will have enough liquidity to purchase and possibly bid up the prices on these homes.

fucking food for thought..

NYC just snap-changed up the AirBNB regs; you can no longer rent for less than 30 days.

like that law got changed today.

and they immediately flooded the streets of NYC / BK with fucking city inspectors to 'check' airbnbs.

its fucking crazy.

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https://koreajoongangdaily.joins.com...162841416.html

https://www.axios.com/2023/01/27/hou...-rates-economy

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so this thread is becoming a lot more interesting of late.

https://nypost.com/2024/01/24/real-e...k-expert-says/

$700 billion default is coming.

something i dont see discussed much is in 2008, people looked at defaulting on their mortgages as inconceivable. today? yeah no ones going to blink before they say fuck this and walk away from their $6000 a month mortgage on a house whose new worth is $400,000. 7 years with a bankruptcy red flag is nothing compared to the indignity of being told by the bank you cant sell at new market value if you dont cough up another quarter mil to close the loan out.

and who fucking cares anyway because we literally just saw the government bail out the banks less than 20 years ago. so fuck them.

and thats just the people who can afford to pay their monthly nut and choose not to, im not even going to get into the rapidly blooming subset of toxic housing debt owners who are getting laid off and are just plain assed out.

also i cant really say enough about how toxic airbnb was in all this. it basically offered a way to gamble on the housing market to retail, the same way CDOs did to institutions 20 years ago.

great article on how influential airbnb is on housing prices:

https://www.msn.com/en-us/travel/other/ar-BB1h7O0o

"Palm Springs capped Airbnb rentals. Now some home prices are in free-fall"

now factor in homeless drug addicts.

and now factor in waves of third world migrants being bussed from states receiving billions of dollars in funding to deal with them to states who receive zero dollars to deal with them.

im sorry but how long does it take to do the math and realize that the fix is to just tell the banks to fuck themselves and then rent a 2br apt in some shithole flyover state before the eviction hits your credit report?

related; a fund manager of note pulled all his money out of the market, allocated a small portion towards shorting banks, and is on vacation for the next half a year at least.