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

Casey Jones

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Although I agree that conditions will get worse, I don't think they're getting better elsewhere. If people want to leave Montana after cashing in on the real estate boom, they will be looking for better destinations, not worse. In the world of destination selection, the game is finding the lesser of evils. A few cashed out boomers might head for Arizona, but when they find out what it's like living around Mexicans, most will regret it. I suspect most will just stay here, maybe downsize.
Believe me, that's what kept me where I am as long as I have been.

But this is not the idyllic place it was nine years ago. Californians bring their own brand of trouble, and we are seeing it. This is deja vu for me - saw it in Denver 25 years ago, and here we are again.

The whole state is now unaffordable. I've priced out land up in the northern part of the state...no bargains; everywhere, it's a bubble.

So it's time to find another place. I may spend a few months in Vegas - not that I think it will be clean, or nice; but Vegas has defenses against the rotters that little Montana cities do not have. Plus, discretionary income is plummeting - and that means, Vegas won't have the growth other areas had. Real estate prices will be stable, perhaps. They can't be much worse than what's happening here...shopping a few webpages, rents are lower in areas around Vegas than they are in town.

Alternately, I could find someplace really unappealing to coop at - how about, Williston, ND? All those new units, and no one to occupy them. I don't want to make it a home, but as a temporary hangout, it'll probably do. I'm going to take a trip over there.
 

hoarder

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Believe me, that's what kept me where I am as long as I have been.

But this is not the idyllic place it was nine years ago. Californians bring their own brand of trouble, and we are seeing it. This is deja vu for me - saw it in Denver 25 years ago, and here we are again.

The whole state is now unaffordable. I've priced out land up in the northern part of the state...no bargains; everywhere, it's a bubble.

So it's time to find another place. I may spend a few months in Vegas - not that I think it will be clean, or nice; but Vegas has defenses against the rotters that little Montana cities do not have. Plus, discretionary income is plummeting - and that means, Vegas won't have the growth other areas had. Real estate prices will be stable, perhaps. They can't be much worse than what's happening here...shopping a few webpages, rents are lower in areas around Vegas than they are in town.

Alternately, I could find someplace really unappealing to coop at - how about, Williston, ND? All those new units, and no one to occupy them. I don't want to make it a home, but as a temporary hangout, it'll probably do. I'm going to take a trip over there.
Vegas was kinda OK 40 years ago. Multicultural degenerate cesspool now. You can have it. Enjoy!
 

EO 11110

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And soon to be no water........
nothing a simple pipeline couldnt fix. (they) are big in vegas, just like ukraine....so we'll pay for it
 

EO 11110

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demand destruction has started


US New-Home Sales Plunge to Lowest Since Start of Pandemic​


Purchases of new single-family homes decreased 16.6% to an annualized 591,000 pace, the weakest since April 2020, government data showed Tuesday. The figure fell well short of all estimates in a Bloomberg survey of economists, which called for a 749,000 rate.

Home ownership is becoming increasingly out of reach for many Americans, as a rapid run-up in mortgage rates collides with record prices. The average rate on a 30-year mortgage was 5.25% last week, up from around 3% at the end of 2021, Freddie Mac data show.
 

Fiat Metaler

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demand destruction has started


US New-Home Sales Plunge to Lowest Since Start of Pandemic​


Purchases of new single-family homes decreased 16.6% to an annualized 591,000 pace, the weakest since April 2020, government data showed Tuesday. The figure fell well short of all estimates in a Bloomberg survey of economists, which called for a 749,000 rate.

Home ownership is becoming increasingly out of reach for many Americans, as a rapid run-up in mortgage rates collides with record prices. The average rate on a 30-year mortgage was 5.25% last week, up from around 3% at the end of 2021, Freddie Mac data show.

I haven't seen prices go down yet but I have seen rents go up. All that's going down is the total dollar value of sales, not the price per sale.

That's like saying people are driving less now that gas has dobuled or tripled; it doesn't mean gas is getting any cheaper.
 

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I haven't seen prices go down yet but I have seen rents go up. All that's going down is the total dollar value of sales, not the price per sale.

That's like saying people are driving less now that gas has dobuled or tripled; it doesn't mean gas is getting any cheaper.

Again, Real Estate is a Slooow process. It takes at least a month to close a cash transaction. The stock market closes a sale in milliseconds- well then finalizes the deal in two days. Plus its local, there are many areas with price cuts already.
 

EO 11110

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I haven't seen prices go down yet but I have seen rents go up. All that's going down is the total dollar value of sales, not the price per sale.

That's like saying people are driving less now that gas has dobuled or tripled; it doesn't mean gas is getting any cheaper.
volume matters too. a lot of jobs, a big chunk of the economy, depend on housing turnover

frbny doesnt have much stomach for real estate falling. the slow down/recession in RE may allow them to stop their interest rate raising. and we all know they want to be as low as possible, to best serve the nyc shyster class
 

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A RE Agent recently moved into our area and hand-delivered letters in envelopes to all of the homesteads in the area. The letter basically said "I'm new to the neighborhood, and very happy to be in this wonderful and historic neighborhood. If you would like a free appraisal of your property, I can provide that service, and list/sell your house if you are looking to sell or upgrade."

Problem was that said envelopes looked like they were addressed by a 3rd grader...terrible penmanship. The letter wasn't much better, poorly written that showed sign of desperation. I haven't met the guy personally, so I give him credit for reaching out to his new "neighbors," but the envelope and letter reeked of desperation. Maybe he's a youngling that doesn't understand that penmanship, writing skills, and first impressions count. My wild ass guess is that the RE market is about to tank in the ensuing recession, and this joker and his employer are attempting to rack up commissions now before the RE and housing market nosedives. My opinion, and good luck out there folks.
 

Casey Jones

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A RE Agent recently moved into our area and hand-delivered letters in envelopes to all of the homesteads in the area. The letter basically said "I'm new to the neighborhood, and very happy to be in this wonderful and historic neighborhood. If you would like a free appraisal of your property, I can provide that service, and list/sell your house if you are looking to sell or upgrade."

Problem was that said envelopes looked like they were addressed by a 3rd grader...terrible penmanship. The letter wasn't much better, poorly written that showed sign of desperation. I haven't met the guy personally, so I give him credit for reaching out to his new "neighbors," but the envelope and letter reeked of desperation. Maybe he's a youngling that doesn't understand that penmanship, writing skills, and first impressions count. My wild ass guess is that the RE market is about to tank in the ensuing recession, and this joker and his employer are attempting to rack up commissions now before the RE and housing market nosedives. My opinion, and good luck out there folks.
I lump that in with the fat, tatted medical assistants in physicians' offices. And the illiterates working in government offices - such as Medicare/Social Security, Railroad Retirement, VA...and of course the MVD/DMV offices.

Competence is dead. Competence at work; competence behind the wheel of motor vehicles; competence in finances and competence in personal health choices. Competence in parsing information - witness all the Vaxx Hysterics, who blame their "vaccination" failure on those who didn't take it.

Some contrarian medical authorities (physicians not on the government take) blame a lot of this on "Brain Fog" - either from the Jab or from Long COVID...which again, may be tied to the vaxx, since the vaxx disables the immune system and seems to obliterate the body's ability to respond properly to the infection.

What I think we're looking at, is - and I've said it many times - it's positively Medieval in scope, both numbers and severity.
 

viking

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I lump that in with the fat, tatted medical assistants in physicians' offices. And the illiterates working in government offices - such as Medicare/Social Security, Railroad Retirement, VA...and of course the MVD/DMV offices.

Competence is dead. Competence at work; competence behind the wheel of motor vehicles; competence in finances and competence in personal health choices. Competence in parsing information - witness all the Vaxx Hysterics, who blame their "vaccination" failure on those who didn't take it.

Some contrarian medical authorities (physicians not on the government take) blame a lot of this on "Brain Fog" - either from the Jab or from Long COVID...which again, may be tied to the vaxx, since the vaxx disables the immune system and seems to obliterate the body's ability to respond properly to the infection.

What I think we're looking at, is - and I've said it many times - it's positively Medieval in scope, both numbers and severity.
 

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1653683575353.png
 

Voodoo

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I lump that in with the fat, tatted medical assistants in physicians' offices. And the illiterates working in government offices - such as Medicare/Social Security, Railroad Retirement, VA...and of course the MVD/DMV offices.

Competence is dead. Competence at work; competence behind the wheel of motor vehicles; competence in finances and competence in personal health choices. Competence in parsing information - witness all the Vaxx Hysterics, who blame their "vaccination" failure on those who didn't take it.

Some contrarian medical authorities (physicians not on the government take) blame a lot of this on "Brain Fog" - either from the Jab or from Long COVID...which again, may be tied to the vaxx, since the vaxx disables the immune system and seems to obliterate the body's ability to respond properly to the infection.

What I think we're looking at, is - and I've said it many times - it's positively Medieval in scope, both numbers and severity.

I don't remember where this came from but it was entirely expected.

In a free market or growing economy Truth is rewarded. When that devolves into corruption the only thing that matters is Who ya Know.
 

hoarder

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Most cities on that list are just screaming "demographics!" . So are they really overpriced? As things get crazier and most cities have turned into third world cities, it makes the few that haven't more valuable.
 

the_shootist

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....and so it begins! DYODD on facts vs an internet article

1653743884752.png


 
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hoarder

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buckle up ladies and gents..

The next six weeks tells the tale, early data stinks to high heaven... our market went from out of control to buyer indifference in just three weeks... My inbox is filling with price reductions.. closing a couple over the next few weeks, pray we get them through. Take note, once it turns these scorned buyers are going to tie the over zealous sellers down and whoop them repeatedly into submission.. it is going to be legendary..

Pray you all have 40 to 50% equity, you will be tested on this very soon. there is not enough lipstick to cover this up. The media is trying everything, simply put its the economy, not the other 51 flavors being presented as choices
 

Uglytruth

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buckle up ladies and gents..

The next six weeks tells the tale, early data stinks to high heaven... our market went from out of control to buyer indifference in just three weeks... My inbox is filling with price reductions.. closing a couple over the next few weeks, pray we get them through. Take note, once it turns these scorned buyers are going to tie the over zealous sellers down and whoop them repeatedly into submission.. it is going to be legendary..

Pray you all have 40 to 50% equity, you will be tested on this very soon. there is not enough lipstick to cover this up. The media is trying everything, simply put its the economy, not the other 51 flavors being presented as choices
Two friends with parents homes to sell. One is aware things are turning. The other is clueless and expects a bidding war cuz his house is special.
 

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I'm not seeing any falling prices. Things are slowing, sure, but prices are still going up.

A friend of mine had a house valued at about $775K 2 years ago. 20-30 year old house but he was updating it. He listed it for $1.1 million and it sold for $1.3 million. Made half a million dollars from inflation because he was holding assets levered with fiat.

In contrast to prices, mortgage rates actually are falling. After peaking at about 5.75%, they are down to almost 5.25%. I think the market is starting to understand that the Fed can't raise much more, and as that sinks in among more market participants the 30-year rate will be lower a few months from now.
 
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EO 11110

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I think the market is starting to understand that the Fed can't raise much more, and as that sinks in among more market participants the 30-year rate will be lower a few months from now.
this jives with my theory -- demand destruction causing rates to reverse lower. lower sales volume is the earliest indicator that fundamental changes are afoot. we are here now

same action will accelerate as recessionary forces take hold. volume falling will be joined by the other indicators
 

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Two friends with parents homes to sell. One is aware things are turning. The other is clueless and expects a bidding war cuz his house is special.

Lots of estates coming to market as well (gee what could have caused this?). Going to add supply. I will say that trying to price and market a home right now is going to be really, really difficult.
 

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Off topic... but I know somebody who recently returned from New England to Europe.
Said that everybody is in a real bad mood and peeved at Biden... even staunch democrats.
Long lines at Costco for gas 20 cents cheaper.
AirBnB's really expensive.
Everything costs double what it was 2 years ago, apparently...

"Remember in November"...
 

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So there is no place to "hide"........ He might have made 500K but it was a big risk.
 

Fiat Metaler

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So there is no place to "hide"........ He might have made 500K but it was a big risk.

No, not really. There is risk in everything to be sure, including doing nothing, so you really have to look at risk on a relative basis.

He lived in the house for 20 years I think. Raised 3 kids in it. They are grown now.

He probably put $150K in it to update it, but he made that back.

He's a banker, so I'm sure he refinanced when rates were 2.75%, if not lower.

With Washington handing money out to everyone, betting on inflation was the closest thing to a sure thing.

He only sold because he got promoted and had to move out of state.

Anyway, the reason I shared that story is not because of his profit, but because of the constant stories suggesting that prices are going down. They arent. There may be fewer homes being sold, but prices remain steady or up. Demand remains strong, and this guy sold for 20% more than his asking price on a million dollar plus home.
 

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buckle up ladies and gents..

The next six weeks tells the tale, early data stinks to high heaven... our market went from out of control to buyer indifference in just three weeks... My inbox is filling with price reductions.. closing a couple over the next few weeks, pray we get them through. Take note, once it turns these scorned buyers are going to tie the over zealous sellers down and whoop them repeatedly into submission.. it is going to be legendary..

Pray you all have 40 to 50% equity, you will be tested on this very soon. there is not enough lipstick to cover this up. The media is trying everything, simply put its the economy, not the other 51 flavors being presented as choices
I see this happening in areas where the market is severely impacted from out of Towners (californians, etc) that made significantly higher wages and its messed with the local economy so much with wages there. For example, my buddy moved from California to Idaho cashed out and bought 2 acres new construction for around 800. They've taken a 50-70% pay cut in wages to live out there. NY, California, etc. with crazy high wages and the lack of single family homes is interesting. I don't see how they could drop 40%-50% in value with what wages are like out here, everyone working and trying to hire people and everyone needs a place to live.

I am by no means an expert on economies/housing market though. Am I missing something huge? With that said, if unemployment goes up and there is food shortages thats a different story...Who knows though...
 

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Lots of estates coming to market as well (gee what could have caused this?). Going to add supply. I will say that trying to price and market a home right now is going to be really, really difficult.
I think mine will get listed in bout 30-45 days. Going to do a video or 2 and the listing will read something like. "30 day listing. Best offer over x takes it"
 

Fiat Metaler

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I see this happening in areas where the market is severely impacted from out of Towners (californians, etc) that made significantly higher wages and its messed with the local economy so much with wages there. For example, my buddy moved from California to Idaho cashed out and bought 2 acres new construction for around 800. They've taken a 50-70% pay cut in wages to live out there. NY, California, etc. with crazy high wages and the lack of single family homes is interesting. I don't see how they could drop 40%-50% in value with what wages are like out here, everyone working and trying to hire people and everyone needs a place to live.

I am by no means an expert on economies/housing market though. Am I missing something huge? With that said, if unemployment goes up and there is food shortages thats a different story...Who knows though...

You make 2 good points that I agree with.

First, every market is different. The softest are going to be the ones that had the biggest spikes in prices. I think the average across the U.S. has been 30-40% over the last 2 years, which spikes higher at the very lower end of the market and in niche markets to where Californians and New Yorkers fled - Boise, Austin, Miami. Prices are likely to remain stable or rise in the rest.

Second, people won't be buying houses if they cant buy food. I couldn't believe another food processing plant could catch fire but it seems like it happens every day now. I expect another freighter to jacknife in teh Suez, or maybe panama, just to switch things up. Will there be riots? At this point, why not? The main buying season for single family homes ends when school starts, which is the traditional season or riots.

Unemployment is a wild card. You are starting to see big retailers like Target and Walmart report soft earnings. Those price increases and higher gas have gotten to some people. That softness in the economy may spread and take out the bottom of the housing market. But the middle and top will continue higher. At the top of the market, riots are only going to push up the prices in gates communities, equestrian ranches, anthing with some distance from the riff raff.
 

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Had a cold call yesterday from a guy who said that he represented a group of investors who would pay cash for my house. First time that has ever happened.
 

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Had a cold call yesterday from a guy who said that he represented a group of investors who would pay cash for my house. First time that has ever happened.
smith,
we have several companies pulling that deal here in SC. The home closing today mid 700's, they had one of those guys come in and offered 630, as is cash no commissions, closing in 5 business days.. they almost did it called me and they will see an additional 60k in their check...

clearly if it was a property that could have fetched a mil with work, the flipfolks would have swooped in... now for a retiree who has the 630k you could do this once a quarter and have a good living. But like every market there are people who really understand what's going on and those just think they do, every person has become real estate royalty.. most of us are just shining shoes!
 

Uglytruth

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22 yo at work has been looking in to houses. Today he said Blackrock & Vanguard want to control 70% of all dwellings.

All I could think of is before the fauci flu 67% of the country could not scrape together $1000. Working serf anyone?
 
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Fiat Metaler

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Had a cold call yesterday from a guy who said that he represented a group of investors who would pay cash for my house. First time that has ever happened.

This is a new practice called wholesaling. You make your money in real estate when you buy, meaning you have to buy low enough to make a profit. But the key is finding "off market" deals without competition. Someone might sell their 750K home for 630 if they paid 500 for it, didn't realize it was worth 750, and didn't want the hassle of fixing it up, cleaning, waiting. I'm not saying its rational but people agree to those deals all the time.

The interesting thing is that with technology (databases, etc.) real estate folks are doing this on a mass scale. A couple of thousand letters at a time. Aside from some softwared subscriptions, letters, and time, its a low investment play. They don't even need the money to buy your house, they offer the opportunity to deep pocketed investors who buy the opportunity from them for $5-50K, depending on how good a deal it was (this is called wholesaling). So its something a young person with little money can do to get into real estate.
 

nickndfl

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smith,
we have several companies pulling that deal here in SC. The home closing today mid 700's, they had one of those guys come in and offered 630, as is cash no commissions, closing in 5 business days.. they almost did it called me and they will see an additional 60k in their check...

clearly if it was a property that could have fetched a mil with work, the flipfolks would have swooped in... now for a retiree who has the 630k you could do this once a quarter and have a good living. But like every market there are people who really understand what's going on and those just think they do, every person has become real estate royalty.. most of us are just shining shoes!


Flipping renovations can be very profitable if you know the construction market & have access to labor. If not, then you could get lucky and make some money, but when the market slows down you will be upside down overnight.
 

Cigarlover

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I wouldn't mind of one of them wholesalers called me and made a reasonable offer. I'd buy 1000 oz bars of silver with most of it and spend a year or 3 island hopping waiting for silver to explode and real estate to crash.