Housing market

[pinzgauer]

friend in Naples FL just bought a house last year and they just sold it made $400k

This was common in the prior real estate booms in Florida. And a bunch of people made a lot of money.

But it never lasts, and you don't hear people talk about when they got stuck upside down on a property. Which also happened commonly in the prior booms.

My brother lives in the Florida keys and my parents did as well for a long time. During the time they've been there there has been at least three boom/bust cycles and it looks like another one is underway.

Property in Florida appreciates over time, as does most property. Due to inflation if nothing else.

But when people start building / buying homes just to flip them with no improvements made is usually a sign of overheated market. Too much money chasing limited inventory.

At the peak of the last bust I knew people getting interest only balloon loans on high end homes, lived in them for a year, then sold them for enough to pay off the interest plus make a profit. Worked great until the bottom fell out.

People in the keys who leveraged themselves to speculatively buy condos for $800k which 12 mths later were worth half that.

And that was not due to sub-prime loans, though those did contribute to the speed of the balloon.

[Arik]

At some point no one other than large investors buy homes. Then what? Blackrock is going to be in the business of renting houses? Or sitting on unsold inventory? Eventually normal people simply won’t be able or willing to afford the property that these outfits are scooping up.

In 2008 everyone thought the hull market on housing would last forever too.

Rent.

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[Averageman]

All this while we have people living out of tents and campers?
When did we collectively lose our minds?

[jmp45]

We live with a vacant corner lot to our north which we own half for 40 years. Old farm plot with an odd diagonal border. The other owner from the farm house behind us died and it went for auction. A local hack contractor purchased the .25 acres for $48k in the auction. Should have never gone more than $18k. He's going to start construction in a cramped frontage in a week or two to sell quickly. So building materials are up what 30-40%? Properties are going quick here, maybe a day or two they are sold. Someone is going to take huge soaking on this property.

[FromMyColdDeadHand]

I think the capital guys have figured out that even if housing ‘pops’, if they hold on for 5-10 years, that they’ll get good returns as inflation picks up. If inflation doesn’t pick up, they still come out ok. with or with out inflation we probably will see a recession in the next 24-36 months as things snap back to reality. With the fed at near zero rates, who knows what kind of funky ness they will try next when things slow down.

Also, I don’t know if they are reading the tea leaves and can tell that real estate or REITs will have better tax rates. Also, if the worst comes and assets are taken, it is harder to take real assets like land and property than straight financial instruments.

[Honu]

And you'll LIVE where THEY tell you to.

when they own most the homes will be easy !

sorry we won't rent to you cause you are ...........

[Diamondback]

And you'll LIVE where THEY tell you to.

"You will own NOTHING and you will LIKE it..."

[Business_Casual]

All part of the Great Reset. You’ll nothing and you’ll like it.


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I see what you did there.

[SteyrAUG]

But when people start building / buying homes just to flip them with no improvements made is usually a sign of overheated market. Too much money chasing limited inventory.

Does it every time. All that "flip this house" BS. You can't simply put in granite counter tops and a new coat of paint and expect to get what amounts to an average persons yearly income and have it last forever.

For years I had to listen to "Bought it for $125k, worked on it for 60 days with $30k worth of materials and sold it for $225k." But when the day came that it was "Shit...I own 5 houses that I paid $150 each for and I can't sell them for even half that" they really couldn't figure out what went wrong.

Only drug dealers make $100k for two months work and even that doesn't last forever. But people actually expected to make $600,000+ plus a year and the gravy train never stopped.

[Averageman]

This guy has some good observations concerning Retail business, Commercial Real Estate and crazy values.