***Official Real Estate Thread***

[LiamUnknown]

How many of those sales were by people cashing 401Ks that sky rocketed because of monetary policy?

How many of those sales were from people selling homes in California or Hawaii at record highs and moving to lower priced markets?

I know multiple people who did a cash sale and then cash out refi simply because rates were so low.

This, I've heard from numerous realtors, and mortgage brokers including my own that this is EXTREMELY common in todays market. Buyers (and their parents) are liquidating portfolios and retirement plans so they can make a competitive cash offer than subsequently refinancing the home with a conventional loan and putting the funds back into their portfolios. This can be done extremely quickly and when money was free the slight hit to the interest rate for it being a refi as opposed to a purchase was negligible.

Much toughter to do that if your portfolio drops significantly, whether it be your 401k or your parents retirement accounts.

It also seems to me the wfh trend may be coming to an end and may be modified to be a flex time arrangement which still requires people to live near their office for the 2-3 days a week they need to come in.

 

[silentbutdeadly]

Is there some sort of award for saving and buying a house on our own as well as paying all of our student loans?

Asking for a couple I know.

 

[Bob Dobbalina]

except it wasn’t just caused by lower rates . . . We also had a huge amount of institutional investment that was probably mostly cash. We also had remote work that allowed for someone to live in beach town where there’s no high paying local jobs and make a google salary.

I feel like there is a myth of tech salaries where everyone is banking half a mil in income and I don't think that is

Is there some sort of award for saving and buying a house on our own as well as paying all of our student loans?

Asking for a couple I know.

Nope

 

[LiamUnknown]

personally, I think #1 will happen fast or we’ll go for #2 around 2024 election cycle (someone else here said it first!)

that said - I just dont believe supply is going to suddenly increase. boomers with homes expected to sell aren’t bc they have new found appreciation for their empty nests post covid. new construction is well behind. even with dropping demand we are losing supply as millennials age into needing homes.

im no boomer but they seem to have ended up in two distinct directions - really well off or incredibly broke, still working and in mediocre health.

i think the same will be true with millennials and it sure feels like the reckoning is happening as we speak.

As a millenial, the difference is even those of us who are high earners, still can't afford a home unless we have family money let alone multiple homes like boomers were able to over the last 30 years which is the primary driver of

I don't understand why people cannot see this.

No one is saying there will be no contraction or economic turn and everyone in this thread keeps repeating that as if we have not heard it enough.

You are spot on.

Its just that demand is so high on a literal 3-5 square mile piece of real estate that the available homes for sale IN THOSE SPECIFIC AREAS will not be affected.

People are not magically going to stop buying homes. They need a place to live. They will find a way to make the payments on a place to live in an area they want.

Serious question for @Muscles and everyone else in this thread on the recesssion.

Would you purchase a house at 10 percent interest in an area you know you want to live and will be in for the next 10-12 years?

Most people would buy and pay what it costs cause the alternative is renting and making someone else wealthy.

I don't think anyone is disputing that coastal real estate will always go up over time. I think people are simply stating home prices, including those in the coastal areas, are insanely inflated right now and are due for a correction. If we look back at 2008, housing prices fell significantly including at the coast. My wife bought her condo a few years before the collapse and was underwater on it for 5-7 years post collapse but of course the market recovered and she made money on it.

I think looking at any kind of trend over time we see the housing market, even in highly desirable areas, is cyclical and has corrections and then continues on its upward trajectory. The dot com crash in the 90s also affected housing prices and that was not tied directly to the lending itself.

 

[ghost_of_lewis_samuels]

Is there some sort of award for saving and buying a house on our own as well as paying all of our student loans?

Asking for a couple I know.

def not

 

[Bob Dobbalina]

But there are prizes for those with the wealthy, those with rich parents, parents able to liquidate their retirement for cash offers (technically also a lucky break) and lucky breaks.

 

[PRCD]

I feel like there is a myth of tech salaries where everyone is banking half a mil in income and I don't think that is

A fair number are DINK with stock options. This is how they do it. But if they do, they're locked into that lifestyle which has its own stresses.

 

[Truth]

Is there some sort of award for saving and buying a house on our own as well as paying all of our student loans?

Asking for a couple I know.

Bravo - that is solid!

Just tell me you aren't wearing the same shoes and jeans from 10 years ago?

 

[silentbutdeadly]

Bravo - that is solid!

Just tell me you aren't wearing the same shoes and jeans from 10 years ago?

I've purchased 4 surfboards this year already

 

[sdsrfr]

A fair number are DINK with stock options. This is how they do it. But if they do, they're locked into that lifestyle which has its own stresses.

I know mostly of these. They’re only jsut now starting to have kids in their early/mid 30s. Bought their houses first.

some are very modest and some live extravagantly. i could not be like the latter.

 

[bluemarlin04]

Nothing going to change the fact that many view renting as burning a hole in your pocket. If you are going to live somewhere for 10 years and can afford the payment- you are not going to care what the interest rate is cause you will still come out ahead as long as you live in a desirable area.

And if there is a shift. Real estate has grown year over year. Are you going to get a deal if you wait? Maybe. But where did you live in the meantime? Are you accounting for how much rent you spend waiting?

People take all this into account and view the world differently now post COVID

 

[Bob Dobbalina]

A fair number are DINK with stock options. This is how they do it. But if they do, they're locked into that lifestyle which has its own stresses.

I didn't realize I posted that. I had a thought and didn't finish it. But you get it.

 

[LiamUnknown]

A fair number are DINK with stock options. This is how they do it. But if they do, they're locked into that lifestyle which has its own stresses.

And if tech stocks crash...

 

[Mr Doof]

Is there some sort of award for saving and buying a house on our own as well as paying all of our student loans?

Asking for a couple I know.

Yes, and when you go to pick it up, this album is playing:

If we look back at 2008, housing prices fell significantly including at the coast. My wife bought her condo a few years before the collapse and was underwater on it for 5-7 years post collapse but of course the market recovered and she made money on it.

I am sure I have already told these two stories, so why not again, but shorter this time:

1 Co-worker in the 90s was sure prices in SF were about to collapse. Sold his home. Move family into apartment. Prices kept rising, 'dot bomb' leveled things off, but he didn't buy back in, moved north instead. Prices then resumed upwards direction. Got divorced, unknown where he is now.

2 Two different friends buy in east Oakland, not too far from Hell's Angels' clubhouse. This was around 2005. 2008-2009 real estate crunch. Both now underwater on mortgage. one stays, the other sells back to bank and moves to New Mexico. Friend who stayed is now well above water. New Mexico friend thinks when her mother dies, she will be able to move back to Bay Area.

 

[Bob Dobbalina]

Nothing going to change the fact that many view renting as burning a hole in your pocket. If you are going to live somewhere for 10 years and can afford the payment- you are not going to care what the interest rate is cause you will still come out ahead as long as you live in a desirable area.

And if there is a shift. Real estate has grown year over year. Are you going to get a deal if you wait? Maybe. But where did you live in the meantime? Are you accounting for how much rent you spend waiting?

People take all this into account and view the world differently now post COVID

None of this matters if you don't have cash

 

[PRCD]

And if take stocks crash...

True, but this is only part of the pie. Huge conglomerates with $10 trillion in assets are also buying SFHs. We need reforms.

 

[Bob Dobbalina]

True, but this is only part of the pie. Huge conglomerates with $10 trillion in assets are also buying SFHs. We need reforms.

On this, we agree

 

[bluemarlin04]

None of this matters if you don't have cash

Thats another thing right now. Most people know a stock correction is coming and are looking to diversify into real estate or are pulling cash out to sit on.

 

[grapedrink]

I feel like there is a myth of tech salaries where everyone is banking half a mil in income and I don't think that is

Of course it's anecdotal to an extent, since I don't work in payroll for these companies and see their W2s. My point is that if these companies are trying to attract better talent, and they want those employees to be happy and be able to afford bay area rent, then that pay is probably relatively high. You won't get rich off it of if your rent is $4k/month, but if you can move just about anywhere else and keep the same pay then you are doing pretty darn good. Like I mentioned before, it doesn't take too many people with that kind of pay to disrupt a small community that already has a strained inventory.

Some anecdotes I've heard in passing:
-Friend of a friend's wife who lives nearly and makes $300k/year as a recruiter for Netflix. With that pay you could easily mortgage a $1-1.5M home
-Guy I heard at an SFO airport bar had a son who got a $400k signing bonus with Ali Baba

Outside of university admins and surgeons, very few people make that kind of money where I live (central coast) at a brick n' mortar employer.

But there are prizes for those with the wealthy, those with rich parents, parents able to liquidate their retirement for cash offers (technically also a lucky break) and lucky breaks.

The importance of picking the right parents cannot be stressed enough.

 

[casa_mugrienta]

Some anecdotes I've heard in passing:
-Friend of a friend's wife who lives nearly and makes $300k/year as a recruiter for Netflix. With that pay you could easily mortgage a $1-1.5M home
-Guy I heard at an SFO airport bar had a son who got a $400k signing bonus with Ali Baba

Outside of university admins and surgeons, very few people make that kind of money where I live (central coast) at a brick n' mortar employer.

That's because the people at Netflix and AliBaba are being overpaid. Sucks to be them because the house of cards they sit upon is falling.