The water is about to get a whole lot more crowded

PRCD

Tom Curren status
Feb 25, 2020
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Thankfully I have one of the best deals going right now on rent. I rent from a friend with no utilities, no deposit, month to month, fully furnished, full garage or snap on tools to use, and storage for my sh!t.

I agree with you but that’s not what most people will do or necessarily have the ability to do. Doesn’t mean you shouldn’t try though.

the big thing is that now amount of frugalism in this market gets you a house. You need huge income increases along with being frugal for many years and to have 2 income streams.

I’m not saying it can’t be done or don’t try but to not accept that’s that reality is naive.

with an attitude you will never buy or never succeed though you will fail 100% of the time. Positive attitude leaves the door open for infinite possibilities
Seems like you might have a chance soon*:
 

Duffy LaCoronilla

Duke status
Apr 27, 2016
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Thankfully I have one of the best deals going right now on rent. I rent from a friend with no utilities, no deposit, month to month, fully furnished, full garage or snap on tools to use, and storage for my sh!t.
Yew!
I agree with you but that’s not what most people will do or necessarily have the ability to do. Doesn’t mean you shouldn’t try though.
don’t be most people.
the big thing is that now amount of frugalism in this market gets you a house. You need huge income increases along with being frugal for many years and to have 2 income streams.
Multiple sources of income is an underutilized tactic. I’m not referring to husband/wife combined income. I’m talking about multiple sources. Investment, gigs, side jobs, etc.
I’m not saying it can’t be done or don’t try but to not accept that’s that reality is naive.

with an attitude you will never buy or never succeed though you will fail 100% of the time. Positive attitude leaves the door open for infinite possibilities
Ya don’t say…
 

ULUSURFER

Gerry Lopez status
Jan 2, 2007
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Seems like you might have a chance soon*:
ive Fortunately or unfortunately bought and am building in Puerto Rico! Super stoked…the unfortunate is not being able to take advantage of the California bubble pop now if it happens.

I can’t complain about owning in the tropics 5 mins from the beach hahah. Instead of complaining about the cost of California I made something else happen
 

bluemarlin04

Michael Peterson status
Aug 13, 2015
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The housing market is crazy in honolulu right now. Just spoke to a realtor about the market cause I may sell one of my rental properties to buy a spot in the mainland.

She said the market is just pure insanity and for everyday 20 plus shoppers there is 1-2 homes for all of them. She said even at 5 percent interest rates the desire is still there to own.

Simply isn’t enough inventory which basically means those with the best means win only further widening the gap between haves and have nots
 

bird.LA

Rabbitt Bartholomew status
Jul 14, 2002
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LA
The housing market is crazy in honolulu right now. Just spoke to a realtor about the market cause I may sell one of my rental properties to buy a spot in the mainland.

She said the market is just pure insanity and for everyday 20 plus shoppers there is 1-2 homes for all of them. She said even at 5 percent interest rates the desire is still there to own.

Simply isn’t enough inventory which basically means those with the best means win only further widening the gap between haves and have nots
Yep, there's a supply issue pretty much everywhere, but especially in desirable locations.

A lot of homes being flipped in my neighborhood, but not a lot of construction of new units, and policy most everywhere is slanted keeping things that way.

Whenever the next dip in the market occurs, it does not seem likely that it will hit coastal CA or HI very hard.

ive Fortunately or unfortunately bought and am building in Puerto Rico! Super stoked…the unfortunate is not being able to take advantage of the California bubble pop now if it happens.

I can’t complain about owning in the tropics 5 mins from the beach hahah. Instead of complaining about the cost of California I made something else happen
That was a good call IMO.

Long-term, PR's going to be a good place to own, at least as long as living there lets people skirt fed taxes.
 

Sharkbiscuit

Duke status
Aug 6, 2003
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Whenever the next dip in the market occurs, it does not seem likely that it will hit coastal CA or HI very hard.
That depends if it's a real estate dip or a debt bubble gets sharted about the shorts. Is it unreasonable to ask if housing is, even more so than in 2008, just another asset class that behaves like other investments?
 

bird.LA

Rabbitt Bartholomew status
Jul 14, 2002
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That depends if it's a real estate dip or a debt bubble gets sharted about the shorts. Is it unreasonable to ask if housing is, even more so than in 2008, just another asset class that behaves like other investments?
I think that's a valid point; however, the scarcity of homes (people with political capital generally work to limit new development) and the unequal distribution of desirable land plays a role here.

I would expect an REIT investment offering broad exposure to the US residential real estate market to dip in a downturn along with other investment assets. I am not sure that the same will be true for a single home in coastal CA.

I was watching in 2008 (was fresh out of college and had no chance of playing that dip, but was on zillow daily nonetheless) and while areas out in east jabip lost a lot of value, westside of LA just kind of plateaued a bit.

Theoretically the mortgages written since 2008 had a lot more due diligence going into them than what was rampant in the early 00s too.

Edit: I also know a lot of people who have been skipping their avocado toast waiting on the sidelines. They will be ready to pounce at any correction.
 
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grapedrink

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May 21, 2011
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That depends if it's a real estate dip or a debt bubble gets sharted about the shorts. Is it unreasonable to ask if housing is, even more so than in 2008, just another asset class that behaves like other investments?
I think there are some unique aspects that make it different, mainly:

-We all need a place to live. We don’t need a stonk account or gold coins to survive
-Certain zip codes have highly constrained supply and many are already built out. While not the norm, there are more than enough smart savers on the sidelines waiting to pounce
-Simultaneously operates as a long term store of appreciating wealth, present day continuous cash flow, inflation hedge, and tax write off/shelter
-Is not easily traded and liquidated like Crypto or Stonks, especially if you or someone else lives in your investment

That said are certain markets oversold? For sure. I could see vacation destinations and luxury properties taking a big hit, but your 2-3 bed SFHs in bread and butter desirable towns and cities with diversified economies will probably do just fine. IMO
 

ULUSURFER

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Yep, there's a supply issue pretty much everywhere, but especially in desirable locations.

A lot of homes being flipped in my neighborhood, but not a lot of construction of new units, and policy most everywhere is slanted keeping things that way.

Whenever the next dip in the market occurs, it does not seem likely that it will hit coastal CA or HI very hard.



That was a good call IMO.

Long-term, PR's going to be a good place to own, at least as long as living there lets people skirt fed taxes.
I skip fed taxes but I have to pay a top rate of 33% income tax to PR gov and 11% sales tax. No property taxes thought FTW.
 

casa_mugrienta

Duke status
Apr 13, 2008
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Unemployment will be high
Household debt is massive
Interest rates up up up
Low rates have meant this country is leveraged out the wazoo in all aspects.
Boomers dying
Inflation
How many people can pay their mortgage(s) if their spouse is unemployed?
How many people can pay their mortgage and the taxes or mortgage on their dead parents property?
 

grapedrink

Duke status
May 21, 2011
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Unemployment will be high
Household debt is massive
Interest rates up up up
Low rates have meant this country is leveraged out the wazoo in all aspects.
Boomers dying
Inflation
How many people can pay their mortgage(s) if their spouse is unemployed?
How many people can pay their mortgage and the taxes or mortgage on their dead parents property?
FUD FUD FUD, FUD FUD FUD!!!!!

I've heard this song from the same people for the last 2+ decades.

These are all real macro issues but there is a huge amount of individual variability. There are also a lot of well paid professionals who have no problem zeroing out their credit cards and socking away cash.

As for your last point, a lot of those homes are/will be paid off by the time they are inherited, and the majority will have a minimal outstanding balance owed if anything. Those that are underwater can stay in the estate, and at least in California they can be grandfathered in with artificially low taxes (Thanks Prop 19!).

The passing of boomer assets will do far more good for those who inherit them than harm.
 

casa_mugrienta

Duke status
Apr 13, 2008
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FUD FUD FUD, FUD FUD FUD!!!!!

I've heard this song from the same people for the last 2+ decades.

These are all real macro issues but there is a huge amount of individual variability. There are also a lot of well paid professionals who have no problem zeroing out their credit cards and socking away cash.

As for your last point, a lot of those homes are/will be paid off by the time they are inherited, and the majority will have a minimal outstanding balance owed if anything. Those that are underwater can stay in the estate, and at least in California they can be grandfathered in with artificially low taxes (Thanks Prop 19!).

The passing of boomer assets will do far more good for those who inherit them than harm.
You keep saying FUD.

I’m just stating the situation.

None of this should make you scared, I’m sorry if it does.

It’s normal for economies to be mismanaged and for bad things to happen as a result.

American exceptionalism is a myth.

If you can explain our way out of debt monetization, inflation, and a dope fiend low interest rate economy floating in the biggest asset bubble in history I’m interested to hear it.
 

grapedrink

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May 21, 2011
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You keep saying FUD.

I’m just stating the situation.
Its still FUD, even if it’s based on truth. I’ve heard the exact same trope from all of the doomsayers for the last 20 years. A lot of those same factors existed then and some were far worse. 2010 friggin sucked too, but we got through it.

You can cherry pick any handful of factors you want and paint a pretty scary picture, or you can look at everything more holistically. For example, I actually see boomers passing in their assets as a good thing and you can bet your bottom dollar that black rock et al are licking their lips at the prospect of getting their piece of it. I simply don’t see inheriting a home as being a downer for most people and will undoubtedly help more people than it hurts, even if they end up selling it into a buyers market. Worst case scenario for an underwater property is they keep it in an estate and walk away from it if it’s no longer profitable. Our housing inventory problem is also many years from being fixed.

None of this should make you scared, I’m sorry if it does.
You seem to be the one who is scared? I realize that these are real issues but not to the point of going all cash and no investments any time soon.

It’s normal for economies to be mismanaged and for bad things to happen as a result.

American exceptionalism is a myth.
Sure. And most other countries also engage in similar tomfoolery, so the tide is falling more or less equally. Where we should be concerned is if a major economic power stops printing money and tightens ship.

If you can explain our way out of debt monetization, inflation, and a dope fiend low interest rate economy floating in the biggest asset bubble in history I’m interested to hear it.
I don’t have an explanation and I do agree that things are overheating. I just know that people have been saying the same stuff for decades through periods of good economic growth. Many of them kept their cash in the bank and missed out on real investment growth because they thought the crash was coming.

If you really want to put your money where your mouth is, invest your money in an SP500 inverse account.
 
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Duffy LaCoronilla

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Edit: I also know a lot of people who have been skipping their avocado toast waiting on the sidelines. They will be ready to pounce at any correction.
nobody was asking for your very unique, never been said before suggestion to cut out the avocado toast to get ahead?
Your contributions to this thread are not nearly as interesting as you think they are.
 

doc_flavonoid

Billy Hamilton status
Dec 27, 2019
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Those that are underwater can stay in the estate, and at least in California they can be grandfathered in with artificially low taxes (Thanks Prop 19!).
explain.

my understanding is that prop 19 tossed the prop 13 property tax break on inherited property. meaning that post 19 properties are reassessed to current fair market value upon transfer between family members.

why else would 19 have been supported by the california association of realtors if they didn't expect that long held family properties would be forced to market due to increased taxation
 
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grapedrink

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May 21, 2011
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explain.

my understanding is that prop 19 tossed the prop 13 property tax break on inherited property. meaning that post 19 properties are reassessed to current fair market value upon transfer between family members.

why else would 19 have been supported by the california association of realtors if they didn't expect that long held family properties would be forced to market due to increased taxation
My mistake, I meant to say 13 :beer: Guess the grandfathered low taxes are no longer relevant.