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Foreclosures are on the rise. Here’s what that says about the housing market

BackwardsEngineeer

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some arms in that chart are fixed for the first 15 years. that gives one 15 years to refi. a good bet, because frbny prefers to keep rates as close to zero as possible for (the banker) bonus pools.

that 4.x rate for 15 years is a GREAT deal -- and then have the option to refi when fixed rates fall again to 4 or 3 or 2
We lived in a really nice condo prior to our present place. Not an official 55 and over but with the exception of a couple everyone there was over 65. Virtually everyone had a mortgage, most 80% of value. When places went up on the recent rise and rates under 3%, they all refied to get out as much cash as possible. Some of these folks are 83+ with serious health conditions, a 30 year fixed loan that current 80% was several hundred thousand above purchase price. Now if market prices hold, guess all is well, but normal turnover has that place flipping 50% of the units in eight years. BTW, they are probably facing an assessment of 100k+ on top of the $800/month HOA and $3500 yearly in taxes.....
 

EO 11110

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The market is pricing in less Fed tightening and earlier Fed cuts than before Powell held aloft his sword.

this has been my view all along. (frbny) will go low sooner/faster than consensus. it benefits (nyc bankers) to go as low as possible. fck everybody else
 

EO 11110

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We lived in a really nice condo prior to our present place. Not an official 55 and over but with the exception of a couple everyone there was over 65. Virtually everyone had a mortgage, most 80% of value. When places went up on the recent rise and rates under 3%, they all refied to get out as much cash as possible. Some of these folks are 83+ with serious health conditions, a 30 year fixed loan that current 80% was several hundred thousand above purchase price. Now if market prices hold, guess all is well, but normal turnover has that place flipping 50% of the units in eight years. BTW, they are probably facing an assessment of 100k+ on top of the $800/month HOA and $3500 yearly in taxes.....
that's the smart money. equity stripping when prices are high and rates are low. i wish i was that smart. i just stood pat with a ton of buried equity sunk into my place

if i were smart i would have stripped and invested the proceeds into some high yielding stocks or mlp's

what's the special assessment for? how many owners have to split the 100k?
 

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I guess I'm the contrarian in the bunch. I dont see Powell easing up. He has said inflation is his main priority. If he doesn't get it under control and keep raising rates people won't be able to afford food. If he reverses course and lets inflation run it will happen sooner rather than later.
 

EO 11110

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I guess I'm the contrarian in the bunch. I dont see Powell easing up. He has said inflation is his main priority. If he doesn't get it under control and keep raising rates people won't be able to afford food. If he reverses course and lets inflation run it will happen sooner rather than later.
i think we agree. i'm an outlier on the time frame - i see things going to sh-t quickly. demand destruction, including labor, is on deck

as soon as that happens......frbny will have to 'save' us with artificially low rates/qe again. never mind that this will help (nyc bankers) the most
 

andial

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I guess I'm the contrarian in the bunch. I dont see Powell easing up. He has said inflation is his main priority. If he doesn't get it under control and keep raising rates people won't be able to afford food. If he reverses course and lets inflation run it will happen sooner rather than later.
The fed has not decreased it's balance sheet one dollar no bond selling. That means they want to keep long rates low and just want to raise short term rates creating a flat yield curve.

 

Fiat Metaler

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I guess I'm the contrarian in the bunch. I dont see Powell easing up. He has said inflation is his main priority. If he doesn't get it under control and keep raising rates people won't be able to afford food. If he reverses course and lets inflation run it will happen sooner rather than later.

That is what he should do, and the Fed should have started raising a long time ago.

The next best thing to do besides raising rates is to talk about raising rates, it can be even more effective than raising rates (because it affects inflation expectations).

The problem is that its an election year. He waited too long to start raising.
 

EO 11110

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andial

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did they ever talk about selling bonds? i thought they were just letting them mature and not buying replacements

they dont have the balls to sell
Yes the plan was to reduce the balance sheet/sell bonds along with raising rates, the reduce balance sheet part has not happened yet. Agree they lack the testicular fortitude to sell.
 

Fiat Metaler

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There is no one to buy. Maybe at the margins. But they can't sell a meaningful amount because there is no one to buy. There were several articles published about this a few months ago when the Fed said they would begin tapering.

Their purchases really distorted the markets. If you want to be negative on housing, it might be that if the Fed stops purchasing mortgage backed bonds it could cause rates to stay high. I just don't see the Fed leaving the market because their purchases are a function of government spending, so you'd have to believe that the govt is going to balance its budget.
 

dacrunch

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BackwardsEngineeer

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Hey crunch,
What are you seeing across the pond, property still moving? Please keep us posted as I'm hearing this is widespread. Friends in Costa rica saying lots of new homes on the market, I'll know more heading back in August and will report..
 

dacrunch

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Hey crunch,
What are you seeing across the pond, property still moving? Please keep us posted as I'm hearing this is widespread. Friends in Costa rica saying lots of new homes on the market, I'll know more heading back in August and will report..

France has been a cradle to grave tenants' country since as far as I can remember (1960's).

If your folks didn't have money (and an excellent financial planner to place the money where it would survive taxation and death tax), or connections, no way to "pull yourself up from your bootstraps", due to extreme taxation and immense costs against starting and running a small business.

Before you can hire your 1st worker, you have to pay into a bunch of regulatory agencies, and hire an accountant and an attorney...
 

dacrunch

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If you do buy a house in France, such as I did, the seller got 70k€, but when the transaction was closed, I was out over 93k€, between realtors fees an a 20% tax and closing fees.

It also takes a long time to find a buyer, probably a year between listing and closing, so you only purchase if you're planning on staying a long time.

If you move and decide to rent it out, and get a tenant who stops paying, it can take up to 3 years to get rid of him legally... and no expulsions between November and April as "they could get cold".

Often over a year to get rid of squatters WHO BREAK INTO YOUR OWN HOME when you are away, who can stay there if you haven't notified the authorities within 48 hours of the break in... so you count on your neighbors when you go on a trip or vacation.

The only rental properties worth investing in are parking garages and furniture storage, where you can quickly get rid of bad customers...

That's what the left wants in the US...
 

dacrunch

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BTW, while you're trying to get rid of the bad tenants, you can't cut off the utilities, and have to keep paying the mortgage, association and management and maintenance fees and the property taxes... as well as a lawyer and court costs...

If you go in with some buddies and strong arm them out, you get fines and jail time...
 

BackwardsEngineeer

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crunch,
Man i can't imagine that. Honestly, why bother to own, unless like you say it's your primary and you are going to be there a long time... what happens when a person dies, do the heirs have to race in and make sure they keep vagrants out?
 

dacrunch

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Yep. Plenty of deceased people's homes squatted.
 

dacrunch

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Try to get rid of them and you face protest marches by well practiced NGOs accusing you of racism or Islamophobia or putting little kids on the street...
 

dacrunch

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I know a mentally ill loser in his late 30s who hasn't paid his rent in over 3 years, after he took over his parents' rental lease when they moved out.

I'd hate to be his landlord...
 

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So really you don't own and maintain unless you possess? That is just crazy, the owner has all the liabilities, but doesn't have the bundle of rights like here in the US.... crunch your lady and area must be really special to warrant that hassle!
 

Juristic Person

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BTW, while you're trying to get rid of the bad tenants, you can't cut off the utilities, and have to keep paying the mortgage, association and management and maintenance fees and the property taxes... as well as a lawyer and court costs...

If you go in with some buddies and strong arm them out, you get fines and jail time...
What if there is a terrible accident and the squatter doesn't make it? Sometimes accidents happen....
 

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Yes the plan was to reduce the balance sheet/sell bonds along with raising rates, the reduce balance sheet part has not happened yet. Agree they lack the testicular fortitude to sell.

Are you sure? They were supposed to start selling here in June but I don't know the specific dates.
 

viking

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If you do buy a house in France, such as I did, the seller got 70k€, but when the transaction was closed, I was out over 93k€, between realtors fees an a 20% tax and closing fees.

It also takes a long time to find a buyer, probably a year between listing and closing, so you only purchase if you're planning on staying a long time.

If you move and decide to rent it out, and get a tenant who stops paying, it can take up to 3 years to get rid of him legally... and no expulsions between November and April as "they could get cold".

Often over a year to get rid of squatters WHO BREAK INTO YOUR OWN HOME when you are away, who can stay there if you haven't notified the authorities within 48 hours of the break in... so you count on your neighbors when you go on a trip or vacation.

The only rental properties worth investing in are parking garages and furniture storage, where you can quickly get rid of bad customers...

That's what the left wants in the US...

Saint Paul, MN just implemented the strictest rent control of the nation. Only 3% increase a year allowed now. With inflation being so high, I can see a halt in new construction and others stop renting out altogether or stop maintenance.
 

BackwardsEngineeer

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Vike,
Rent control and inability to evict are two of my biggest objections to investment property ownership. Plus here in SC we scalp non owners occupants as they pay 3x the owner occupied rates. But get this if you are a non resident of SC, at time of sale closing attorney will with hold 7% of the difference of cost origin to sale price, making sure you pay your Sc portion. Better yet, they withhold 15% if you are non resident to USA...
 

Juristic Person

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Try to get rid of them and you face protest marches by well practiced NGOs accusing you of racism or Islamophobia or putting little kids on the str

Vike,
Rent control and inability to evict are two of my biggest objections to investment property ownership. Plus here in SC we scalp non owners occupants as they pay 3x the owner occupied rates. But get this if you are a non resident of SC, at time of sale closing attorney will with hold 7% of the difference of cost origin to sale price, making sure you pay your Sc portion. Better yet, they withhold 15% if you are non resident to USA...
What about hotel room price control and airBnB control? What about home mortgage control and home sale price control?

If you want to take the communism route you might as well go full blown. Don't just stop at rent....
 

EO 11110

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Saint Paul, MN just implemented the strictest rent control of the nation. Only 3% increase a year allowed now. With inflation being so high, I can see a halt in new construction and others stop renting out altogether or stop maintenance.
that's nuts. already a shithole....they punch the accelerator
 

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crunch,
Man i can't imagine that. Honestly, why bother to own, unless like you say it's your primary and you are going to be there a long time... what happens when a person dies, do the heirs have to race in and make sure they keep vagrants out?

There are many places in the US that are already pretty similar to those situations. Although the prices are still ungodly high as compared to where they should be under such policies (cheap, like those in France).
 

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that's nuts. already a shithole....they punch the accelerator

And they will be complaining about absolute Shithole conditions that they have created soon. With more shitty ideas to complete the circle down the drain.
 

coopersmith

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The govt will send frn to fix the problem, and the politicos will skim off their fair share.
 

dacrunch

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I've got a property manager for my rental apartments in the US. Even though it's one of the furthest left cities in the country in one of the bluest states (feel the bern), he has ironclad leases and stringent qualification references policy, so no sticky moochers.

He handles everything and skims 10% of the rental income for his services.

But with the lefty state and city taxes and regulations, I only break even. City has 2 competing political parties, democrats and further left liberals!!!

I haven't thought about selling because I can't think of a better place to park well over a half million bucks... according to Zillow and the city...

Cost in early 90s was 180k. Had a couple decades of positive income, and was able to house my son a few times and pay for my daughter's rent elsewhere too.

I'll be over there a few days in September and do some thinking on site...

Since the city defunded the police after Floyd, they only reply to calls involving deaths...
 
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dacrunch

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There are many places in the US that are already pretty similar to those situations. Although the prices are still ungodly high as compared to where they should be under such policies (cheap, like those in France).
It took me 6 months and 6k miles of driving in the camper to find that fixer upper...

Followed by a year of sweat labor and 60k of repairs...

Otherwise home prices are quite high, especially compared to wages, but they're not wood frame...

Mine was built in the 1940s, updated in the 1980's, and now another 40 years later renovated by yours truly...
 
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EO 11110

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dacrunch

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Never remember the difference between average and median...
 

dacrunch

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But I can't fathom the cost of not only the mortgage, but also all the rest of required expenses...
 

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I haven't thought about selling because I can't think of a better place to park well over a half million bucks... according to Zillow and the city...
crunch,
Bet i've heard that 500 times... long time ago a counselor friend shared a pearl that has reaped a thousand fold return. When making a major decision, break it up into its parts, don't let cart drive the horse.

Example on job change, first step do you want to leave your present employer, yes or no? Once decided, then decide who or whom doing this or that do you want to do for a living.

So expanding this, you are not making much money, do you want to sell the place? Once decided, then you can do an in depth to where you might want to park those funds. Divide it up, loads of places to park $, its all risk vs. reward.

It works for me every time...
 

dacrunch

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crunch,
Bet i've heard that 500 times... long time ago a counselor friend shared a pearl that has reaped a thousand fold return. When making a major decision, break it up into its parts, don't let cart drive the horse.

Example on job change, first step do you want to leave your present employer, yes or no? Once decided, then decide who or whom doing this or that do you want to do for a living.

So expanding this, you are not making much money, do you want to sell the place? Once decided, then you can do an in depth to where you might want to park those funds. Divide it up, loads of places to park $, its all risk vs. reward.

It works for me every time...
Yeah, but buildings and their footprints and their regular income are pretty anchored in society and history and purchasing power.

If I'd sold less than 2 years ago and bought bitcoin at 65k, today it's 18k.

I've made enough mistakes in my life to make me wary and humble and hesitant...
 

BackwardsEngineeer

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crunch,
Understand completely, not suggesting you buy lotto tickets. There is an excellent dividend thread here, divide amongst several different sectors, which is what we did. Retooled in May 2020 and we are seeing almost 10% of the original amount invested and sitting at almost double the original value. Not suggesting the market is going to be that kind, just that there are places to invest beyond real estate.
 

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Yeah, but buildings and their footprints and their regular income are pretty anchored in society and history and purchasing power.

If I'd sold less than 2 years ago and bought bitcoin at 65k, today it's 18k.

I've made enough mistakes in my life to make me wary and humble and hesitant...

Are they actually producing any income? I thought you stated they were breaking even. My math says that is zero income.