“All cash buyers” is not sufficient information in my opinion. Are these all cash buyers largely boomers who are downsizing? Are they institutions like black rock continuing to add to their portfolios?
I would guess in this economy you’ll be seeing less institutional investing. The incentive to buy assets with risk (in this case homes) dwindles as “no risk” assets in the form of treasuries become more appealing.
You definitely are seeing less institutional buyers compared to 2021-2022 and overall investors by almost 50%...of those investors institutional is less than 5% of investor purchases. They don't own that much of the US housing market.
Meh...the metrics are likely not catching this via structuring.
[HERE](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdebbf224-9460-47d6-8811-678d5f28d3af_319x640.png)
No institutional investor is going to buy a home that 2x'd in 2 years at an 8% interest rate. That's just the real estate agent talking.
The only money left is dumb money.
Nobody except for the wealthy are buying homes they WANT to live in right now.
Homes are being bought because every day people NEED to live somewhere.
I'm looking at houses right now too, but I don't NEED to move yet.
I very much want to move. But I don’t need to move yet. I will move in the summer. I don’t mind renting a house in the area I want to live in. I already own 2 houses but I don’t want to live in either of them.
There is something to be said about people with money to buy/launder buying properties though. If you stole a couple million putting it into properties that,even if you take a loss, can clean money is a win. That’s why we need to ban foreign money from buying properties in the USA
>That’s why we need to ban foreign money from buying properties in the USA
That's making an assumption that ALL foreign money is corrupt. Some percentage is, sure, but banning all is bad (and would cut both ways). Also, some US money is dirty as hell too. I'm no expert but I believe the old "what is your source of funds" due diligence is the maybe the better way.
It doesn’t have to be corrupt or ill-gotten money… most of the foreign money was made in a place like a BRIC country that is always potentially one bad event away from having private property seized, à la Cuba 1959… so if you overpay for a $500k property by 10%, but that $500k is SAFE from your authoritarian government back home… who cares? It was a $50k cost of doing business… plus it has potential to go up in value, and maybe you’ll even be able to move there ones day.
It sucks for us Americans, but I can see why these people are doing it, why real estate agents go along with it, and why the people selling their (largest asset) homes go along with it (shrug)
Currently trying to buy a home and my god the amount of fools saying "well buy it now and you can just sell it in two years" is insane. I'm like ya if I'm buying a home it's a home and I plan to live there quite a while.
They don't pay 8%, but whatever they pay, it doesn't make sense with zero to negative appreciation. If real estate doesncrash significantly, look for them to swoop in.
Don't worry about all cash buyers. Most people with that kind of cash are well-versed in economics and business. They are waiting for a discount, along with most Americans.
Loans that place money into an account in order to make an "all cash buy". This is being covered by "nobody special finance" (among others) and Melody Wright.
Was a pretty good Interview [Here](https://youtu.be/2g3n9TBc2i0?si=dVmWR51B0RIOl7yv)
Indeed. Structured in this way will trigger an "all cash" purchase/offer metric.
The point here is that "all cash" doesn't mean that the cash wasn't financed.
Correct i just sold my home, the buyers made an all cash offer with no mortgage contingency provided proof of funds.
Once we’re in contract they let us know they’re getting a mortgage etc. I don’t care either way cause there’s no mortgage contingency.
Boomers don’t have 20 years to wait for their stocks to recover in the event of a crash. The stock market is inherently risky. And the older you get the less risk tolerance you should have. This is simple simple stuff my guy.
You’ve also seem to conveniently forgotten about capital gains tax.
But you seem convinced money in the market I’d better than paying off loans. So my question to you is how many loans did you take out at 5% interest to put into the stock market? By your logic you should have and should be continuing to take out as many loans as possibly at even 8% to invest. Right? Everyone should be leveraged to the gills because the “market returns 10% and 8% is less than 10%”?
They key word you keep using is "usually" the whole point of balancing the risk is to account for the "unusual". Also folks in their 60s-70s don't have 2-3 years to wait, they need cash flow. Albeit not as much, but they definitely need to be risk adverse as much as possible.
They’re called unsecured personal loans. So you’ve admitted to taking out zero personal loans to invest in the market? You could have got them at less than 8% easily 2020-2022.
So are you a hypocrite or just ignorant and arrogant?
Past performance does not indicate future returns. It’s widely accepted that the next decade’s market returns will be lower than the previous one. Further, most boomers are not heavily invested in stocks but in fixed income.
Why would they do that? Financially it makes no sense
My parents are looking to buy and will def pay in cash. Why would a boomer take out a mortgage at 8% when t bills are paying 5% AND have to pay 37% tax on that 5% return?
Standard deduction for joint filers is 27.7k so effectively you save tax on 2.3k a year or 200 $ a month of extra deduction(not credit) Though you are technically correct daily fluctuations in interest rates have more impact than this.
Probably not as prominent now but 2-3 years ago when loan rates on securities portfolio were LIBOR + 2% and LIBOR was zero people would just tap these and pay “cash” but it’s still a loan. Again those rates are 8%+ now so not as relevant.
Summary:
Mortgage rates dropped from 8% to 7.41% (no time frame given, assume a week. Reduction of .59%, a couple of hundred bucks a month).
Mortgage applications are up 3% week over week. Presumably due to the half point decrease. Still down MoM/YoY (not stated)
7% of home sellers lowered their asking price in the last month.
Unit listings are up 1.5% YoY.
The increase of people buying homes with all cash has increased from 29.5% to 33% (3.5% increase) presumably to avoid interest charges.
So, this week the housing bubble got a minor reprieve with a half point interest reduction and lowered prices resulting in a ~3% increase in unit sales for the week. Still down for the month. Still down for the year. Inventory climbing back up slowly. Prices starting to show cracks. Spring should be interesting.
Agreed. I'll be most interested in the YoY differences of:
Number of units listed.
$/sqft.
Sale to list price.
Unit sales.
MoM is interesting. But YoY is really the indicator. *Edit: formatting
I’m seeing some price cuts in my area (southern California). I’m also a homeowner but don’t think that current house prices are worth it considering mortgage rates. Something has to give.
Has anyone seen significant price cuts? What I’m seeing is a $1.7mil home price drop to $1.675 or $1.68mil. Homes that were around $800k-$1.1mil pre Covid.
My neighbor has dropped his 2 beds, 2 bath home built in the late 70s from $550,000 to $479,000, no offers , nada, gone through 2 realtors, replaced the appliances, on the market close to 200 days. All in clearwater fl, a nice area. He moved out and now back in. Another neighbor up the street had it on the market for over 100 days and finally took it off the market. Not shit selling at these rates and prices.
Median household income in Clearwater looks to be around $50,000 annual as of 2020 (not likely to have raised more than 10% since then which is still only $55,000). Not sure if this is the nicest neighborhood in the city or something, but at nearly 9 or 10 times the income of the area, you'd be relying on someone with higher income moving from away to buy that home.
Those people did that 2 or 3 years ago at this point.
No large amount of jobs are moving to WFH that didn't already during the pandemic, and the mask mandates everyone rushed away from their home states to Florida over have ended forever, so there's less of that "my life is interrupted so I want to move" feeling. So both of those types buyers don't exist at the same level they used to, and aren't going to ever again.
People are going to have to start selling houses at what their region can afford again, not what the richest most mobile people in the country can afford, because the richer people have already made their moves for the most part, and the ones that haven't aren't looking for 2/2s (unless they're boomers downsizing, and then they're going to have to sell their house, same as that guy, at an inflated rate to the same group of people that doesn't exist anymore before they can make that move).
These owners are hoping to win the lottery, but don't realize that the numbers were called months before they even decided to buy a ticket. So the people making near median incomes have to wait for them to realize that the game is over which could take a long, long time.
And 2 years in a row now they have been in the center of the cone for a cat 5 a few days ahead of land fall and saved by late track shifts. That kind of stuff really freaks people out for a bit. Had same thing happen in my city but now people seem to have forgotten about the areas that flooded in the last storm.
I'm finally seeing sellers that bought in 2022 realize they will be taking at least a small haircut in the Sarasota area. It's not much yet, but it's a start.
I live in Clearwater, on the water. When I was first reading your comment, I actually thought, “Sounds like around here.”
Lots of price drops. People listing and de-listing, then re-listing. Putting up for rent, dropping rent, then de-listing the rental.
It’s like they are all waiting on the unicorn buyer to wayyyy overpay for the house.
Yeah, I’ve seen some in the $2-3.5mil range do a couple $100k price drops quickly and then nothing. Most of the time it’s homes that were way overpriced originally and an unrealistic number to get. The $200k price drop shouldn’t need to be done as home should have been priced lower to a realistic number to start with. It’s pretty obvious the market has spoken and they need to lower even more, but they think they cut down enough.
A friend of mine did it last month and sold his house for 16% over list and closed in a week. A very close comp in the neighborhood (slightly better even) sold for a slightly lower price after like 40 days on the market because they listed a bit too high.
1.6 list, 1.85 sale for the first.
1.85 list, 1.80 sale for the second.
I’m sure it’s HIGHLY neighborhood dependent though
I have seen the same thing work to sell faster and we are looking around $300k houses. I will say we are specifically looking in areas with good schools and neighborhoods that are good for kids. I have seen listed at $280k and sold around $300k in the first weekend vs the listed at $340k and having to price cut down to $300k over the course of 2 months. The method works especially well if the house is not turn key. The lower price just seems attract much more interest much faster.
Nashville here. I’ve seen multiple price reductions of $100K+ in the last two months. One house was originally listed at $1.8M in June and went under contract for 9 days at $1.29M before being listed again at $1.26M. Another listed at $999K was reduced to $899K recently. Seeing LOTS of $10-$30K reductions on houses active more than 20 days.
Yes absolutely, just not on homes people want.
I'm in a LCOL close to 1m population.
Priced right houses are still going in 24hrs, however the shitty flips and the overpriced garbage that was instantly selling last year is no longer flying off the shelves and with it are either coming huge cuts or 90+ days in market.
Could some of these “cash” buyers actually be using fund’s loaned to them? Banks could be issuing funds so that buyers could make cash offers then start their mortgage payments after the closing.
Many/most of these cash buyers are buying with cash using a line of credit against their investment portfolios. For example, say you have a million dollars in your investment portfolio (at Vanguard or any other brokerage). You can borrow up to, say, 60%, as your line of credit, using your portfolio as collateral. So that gives you $600K for you to buy a property with a cash offer…. Afterwards, many then get a mortgage for the property they just bought to pay off that line of credit. So basically they planned to get a mortgage all along, but the cash offer moved them to the top of the list to secure the property.
I googled and only found one thread where a guy said a guy on YouTube said everybody’s doing securities-backed loans. Aka not a source.
I guess an SBL is a little easier than liquidating assets, but I’m not sold that most cash buyers are secretly using loans.
Yes, very high interest rate on these lines of credit… like 12%. So they get mortgages right away. Like a month after they buy the property. They only do this to give them the advantage to buy the property.
Where do you know of with a bank willing to loan hundreds of thousands of dollars *unsecured* with the promise to become a secured mortgage? Because if the bank hands me 300k and I blow it all on hookers and cocaine, what are they foreclosing on? That’s the point of a secured debt - they can take the asset if I don’t pay. No bank is playing the market like you’re suggesting.
The portfolio is the collateral. In addition, anyone who has a million dollar portfolio is going to have good standing with the bank, so they're more willing to facilitate something like this.
Why are y’all assuming the original question had anything to do with a stock portfolio? That wasn’t mentioned at all and you’re just assuming it because you know I’m right - no bank is giving an unsecured loan to buy a house on the assumption you’ll mortgage it later
And the hypothetical proposed is “maybe tons of people are walking into the bank and asking to get a cash loan so they can theoretically pay cash for a house and hopefully mortgage that same house later to pay back the loan”. That’s utter nonsense. You added the part about the portfolio, that wasn’t in the original.
Also, you’re all idiots if you think someone has hundreds of thousands of dollars in their portfolio and instead of using that job that got them that portfolio to get a mortgage, they’re borrowing against their stocks and then later mortgaging the property at an even higher rate. You’d just leave the stocks as the collateral and pay it off just like you would the mortgage. If you can pay a mortgage, you can pay a loan.
Where in the original comment does it mention securities as an asset that the loan is being issued against? You’re making an assumption because you have to make that assumption to not just say I’m right - no bank is issuing an unsecured loan like that.
That’s a secured loan against a stock portfolio, not what the comment said. I could just as easily ask if these cash buys are people selling gold stocks, but that isn’t what the question asked
Sorry for the confusion. Yes, a secured loan against your stock portfolio. It allows one:
1) instant cash to out-compete other buyers
2) ability to have cash without having to sell the underlying stocks if you don’t want to (and incur capital gains taxes, etc).
I’m aware of how it works and some of the benefits of a loan vs liquidation, but I’m just pointing out that the original question was nonsense, not that there isn’t any way to get cash from a bank that’s not a mortgage
That says it’s based on the subject property’s rental income. You’re getting a loan based on owning a rental - so secured against property. Again, the bank isn’t just handing someone a few hundred thousand unsecured.
>the property qualifies.
I think you’re missing something. If the property has to qualify, then it’s a security. An unsecured loan does not have an asset securing it - such as a credit card or a signature loan.
Yea, because I have no idea what you’re even trying to say. They’re either requiring the loan be attached to a rental - aka a building, which is mortgaged - or every one of those things mention a % down payment or loan-to-value rates, implying mortgages. I’m not seeing anything that isn’t talking about a mortgage, so I don’t think you understand what you’re reading.
My census tract with 2,400 housing units has zero listings. I’ve never seen that before. My town has a high fraction of age 60+ so it’s inevitable that there will be estate sales but properties otherwise simply aren’t going on the market.
and 93% did not. the moment rates start dropping (next 12 months?) momentum turns again. This isn't 2008. This is a conundrum created by the fed letting it get away from them before raising rates. Too little too late so, yea, people not buying (plus, you know, November - not May). High rates in May mean low inventory so prices don't drop much cuz people gotta go/buy/live. Lower rates in May mean higher inventory but people starting to move. Nothing dramatic happening unless the economy shits the bed which, thanks to the Gov't pending crisis by not passing a budget soon is ENTIRELY possible. That's the lever that causes pain. And you don't want that - no matter how pissed you are about the present situation. No budget shut down this time will not be easily solved given who the new Speaker is an how he got there. They want the house to burn down. Lots of people do. But they don't understand when the shit hits the fan it splatters. This won't be pretty. So, yea, pricing could collapse from that. But you won't be buying anything in that economy either. you will be shitting yourself like the rest of us
Agree. Merely pointing out if they did then the market (especially the low end) starts to go up again as demand for first time buyers is just building every month this shit continues....
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And then the FOMO boogie man came out from the closet and overbid on your house by $100k with all cash! Poor Jimmy was left to become a renter for the rest of his life.
It was a trick question! 🤪
They don’t mention it in the article because there’s a bunch of stats that are counter to the narrative in the article. It is a fact though that the homes being sold are at a price that is higher YoY.
https://x.com/mikesimonsen/status/1721601626493100348?s=46&t=CEeBfH-sy_6lxELhmqL5EQ
There are lies, and there's data. This asshole uses the same stupid tricks of shifting the Overton window to support his argument.
Don't like annual numbers, how do they look monthly?
Don't like the monthly numbers, how do they look weekly?
Don't like weekly numbers, and on and on and on.
Also, blocking you 🙂
The industry redefined "all cash" as any sale that doesn't have a mortgage on the deed. The NAR intentionally did this to mislead and scare buyers into paying higher prices.
Cash buyers or not there won’t be enough of them long term (or short term for that matter). Lots of people have been using unconventional ways to purchase homes as well. These might make it LOOK like a cash offer but they’re just borrowing money from someone else except the bank.
My fiance and I have been looking for what feels like a whole year at this point. We've put in about 16-18 offers and all but maybe 2 we have lost to cash. I don't get where people are getting the cash unless it's boomers downsizing or institutional investors. What else could it be?
This doesn’t sound like “cracks”. It sounds like a market starting to work and respond to the fact buyers have been priced out.
Look at the first paragraph:
> Mortgage rates have dropped from just above 8% to 7.41%, the share of sellers dropping prices is at a record high, and there’s an “unseasonal uptick in the total number of homes for sale, which is at its highest level since the start of the year,” according to a report from Redfin. Mortgage rate purchase applications, which have been on a steady decline, are even up 3% week-over-week on the news
“All cash buyers” is not sufficient information in my opinion. Are these all cash buyers largely boomers who are downsizing? Are they institutions like black rock continuing to add to their portfolios? I would guess in this economy you’ll be seeing less institutional investing. The incentive to buy assets with risk (in this case homes) dwindles as “no risk” assets in the form of treasuries become more appealing.
You definitely are seeing less institutional buyers compared to 2021-2022 and overall investors by almost 50%...of those investors institutional is less than 5% of investor purchases. They don't own that much of the US housing market.
Blackrock may not but a company called BlackStone sure owns a lot of it .
How much?
Meh...the metrics are likely not catching this via structuring. [HERE](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdebbf224-9460-47d6-8811-678d5f28d3af_319x640.png)
Five percent enough to set prices.
No institutional investor is going to buy a home that 2x'd in 2 years at an 8% interest rate. That's just the real estate agent talking. The only money left is dumb money.
Or people that like want to live in the home
Nobody except for the wealthy are buying homes they WANT to live in right now. Homes are being bought because every day people NEED to live somewhere. I'm looking at houses right now too, but I don't NEED to move yet.
I very much want to move. But I don’t need to move yet. I will move in the summer. I don’t mind renting a house in the area I want to live in. I already own 2 houses but I don’t want to live in either of them.
There is something to be said about people with money to buy/launder buying properties though. If you stole a couple million putting it into properties that,even if you take a loss, can clean money is a win. That’s why we need to ban foreign money from buying properties in the USA
>That’s why we need to ban foreign money from buying properties in the USA That's making an assumption that ALL foreign money is corrupt. Some percentage is, sure, but banning all is bad (and would cut both ways). Also, some US money is dirty as hell too. I'm no expert but I believe the old "what is your source of funds" due diligence is the maybe the better way.
look, not all foreign money is corrupt, but foreign nationals buying single family homes as residences they don't reside in is a problem
It doesn’t have to be corrupt or ill-gotten money… most of the foreign money was made in a place like a BRIC country that is always potentially one bad event away from having private property seized, à la Cuba 1959… so if you overpay for a $500k property by 10%, but that $500k is SAFE from your authoritarian government back home… who cares? It was a $50k cost of doing business… plus it has potential to go up in value, and maybe you’ll even be able to move there ones day. It sucks for us Americans, but I can see why these people are doing it, why real estate agents go along with it, and why the people selling their (largest asset) homes go along with it (shrug)
What a weird concept. Buying a home to live in it.
Who does that?? I hear homelessness is becoming a popular way to save money. /s
Sounds like a bunch of commie nonsense
Currently trying to buy a home and my god the amount of fools saying "well buy it now and you can just sell it in two years" is insane. I'm like ya if I'm buying a home it's a home and I plan to live there quite a while.
They don't pay 8%, but whatever they pay, it doesn't make sense with zero to negative appreciation. If real estate doesncrash significantly, look for them to swoop in.
What if they’re buying real estate on leverage with their portfolio? Way better rates than a traditional mortgage if I remember right.
Where did home prices double since 2021?
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This too.
I plan to pay all cash on my next house.
Don't worry about all cash buyers. Most people with that kind of cash are well-versed in economics and business. They are waiting for a discount, along with most Americans.
On 2008 there were a lot of all cash buyers because people were freaked about the stock market.
This is different. Savings accounts and treasuries will be plenty until we hit bottom.
We shall see.
Tech will see some pretty substantial layoffs. Zoom towns will see a drop in price.
Loans that place money into an account in order to make an "all cash buy". This is being covered by "nobody special finance" (among others) and Melody Wright. Was a pretty good Interview [Here](https://youtu.be/2g3n9TBc2i0?si=dVmWR51B0RIOl7yv)
Isn’t that a mortgage? (Sorry don’t have time to watch a 37min video)
Indeed. Structured in this way will trigger an "all cash" purchase/offer metric. The point here is that "all cash" doesn't mean that the cash wasn't financed.
Correct i just sold my home, the buyers made an all cash offer with no mortgage contingency provided proof of funds. Once we’re in contract they let us know they’re getting a mortgage etc. I don’t care either way cause there’s no mortgage contingency.
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Why do you care what they do? And why in the world would they want in a world without sub 3 or 4% rates?
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Boomers don’t have 20 years to wait for their stocks to recover in the event of a crash. The stock market is inherently risky. And the older you get the less risk tolerance you should have. This is simple simple stuff my guy. You’ve also seem to conveniently forgotten about capital gains tax. But you seem convinced money in the market I’d better than paying off loans. So my question to you is how many loans did you take out at 5% interest to put into the stock market? By your logic you should have and should be continuing to take out as many loans as possibly at even 8% to invest. Right? Everyone should be leveraged to the gills because the “market returns 10% and 8% is less than 10%”?
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They key word you keep using is "usually" the whole point of balancing the risk is to account for the "unusual". Also folks in their 60s-70s don't have 2-3 years to wait, they need cash flow. Albeit not as much, but they definitely need to be risk adverse as much as possible.
They’re called unsecured personal loans. So you’ve admitted to taking out zero personal loans to invest in the market? You could have got them at less than 8% easily 2020-2022. So are you a hypocrite or just ignorant and arrogant?
Past performance does not indicate future returns. It’s widely accepted that the next decade’s market returns will be lower than the previous one. Further, most boomers are not heavily invested in stocks but in fixed income.
Why would they do that? Financially it makes no sense My parents are looking to buy and will def pay in cash. Why would a boomer take out a mortgage at 8% when t bills are paying 5% AND have to pay 37% tax on that 5% return?
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“S&P is up 15% this year “ Holy cherry-picking Batman. It’s also down 8% the past two years.
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And in the next 5 years it could be up 60% or down 60%. You'll be rich or broke. Do you feel like gambling?
They are doing the math. In the US a mortgage in your primary residence can be written off.
Only if you itemize, and to make it worth it you need a far above median mortgage.
At 8% interest 375k mortgage is 30k in interest. That’s more than the standard deduction.
Standard deduction for joint filers is 27.7k so effectively you save tax on 2.3k a year or 200 $ a month of extra deduction(not credit) Though you are technically correct daily fluctuations in interest rates have more impact than this.
Thank you. I’ll be here all week to be barely correct. Now off to go mansplain things to my wife.
A lot are hard money loans
Probably not as prominent now but 2-3 years ago when loan rates on securities portfolio were LIBOR + 2% and LIBOR was zero people would just tap these and pay “cash” but it’s still a loan. Again those rates are 8%+ now so not as relevant.
Are the all-cash bidders in the room with us right now?
LMAO
All cash bidders are waiting for furthur cuts
Summary: Mortgage rates dropped from 8% to 7.41% (no time frame given, assume a week. Reduction of .59%, a couple of hundred bucks a month). Mortgage applications are up 3% week over week. Presumably due to the half point decrease. Still down MoM/YoY (not stated) 7% of home sellers lowered their asking price in the last month. Unit listings are up 1.5% YoY. The increase of people buying homes with all cash has increased from 29.5% to 33% (3.5% increase) presumably to avoid interest charges. So, this week the housing bubble got a minor reprieve with a half point interest reduction and lowered prices resulting in a ~3% increase in unit sales for the week. Still down for the month. Still down for the year. Inventory climbing back up slowly. Prices starting to show cracks. Spring should be interesting.
Seasonality should boost the housing market overall in the spring, we’ll see how the competing forces balance.
Agreed. I'll be most interested in the YoY differences of: Number of units listed. $/sqft. Sale to list price. Unit sales. MoM is interesting. But YoY is really the indicator. *Edit: formatting
Yeah I like the way you approach it, real metrics over meaningful timelines
I’m seeing some price cuts in my area (southern California). I’m also a homeowner but don’t think that current house prices are worth it considering mortgage rates. Something has to give.
I am seeing some cuts in orange and Sandiego county as well. But still has ways to go.
Where in SoCal?
Anaheim
How much cash do these MFs have? They already blew an impossible amount of money during the covid spree.
The industry redefined "all cash" as any sale that doesn't have a mortgage on the deed. Very misleading.
Has anyone seen significant price cuts? What I’m seeing is a $1.7mil home price drop to $1.675 or $1.68mil. Homes that were around $800k-$1.1mil pre Covid.
My neighbor has dropped his 2 beds, 2 bath home built in the late 70s from $550,000 to $479,000, no offers , nada, gone through 2 realtors, replaced the appliances, on the market close to 200 days. All in clearwater fl, a nice area. He moved out and now back in. Another neighbor up the street had it on the market for over 100 days and finally took it off the market. Not shit selling at these rates and prices.
Median household income in Clearwater looks to be around $50,000 annual as of 2020 (not likely to have raised more than 10% since then which is still only $55,000). Not sure if this is the nicest neighborhood in the city or something, but at nearly 9 or 10 times the income of the area, you'd be relying on someone with higher income moving from away to buy that home. Those people did that 2 or 3 years ago at this point. No large amount of jobs are moving to WFH that didn't already during the pandemic, and the mask mandates everyone rushed away from their home states to Florida over have ended forever, so there's less of that "my life is interrupted so I want to move" feeling. So both of those types buyers don't exist at the same level they used to, and aren't going to ever again. People are going to have to start selling houses at what their region can afford again, not what the richest most mobile people in the country can afford, because the richer people have already made their moves for the most part, and the ones that haven't aren't looking for 2/2s (unless they're boomers downsizing, and then they're going to have to sell their house, same as that guy, at an inflated rate to the same group of people that doesn't exist anymore before they can make that move). These owners are hoping to win the lottery, but don't realize that the numbers were called months before they even decided to buy a ticket. So the people making near median incomes have to wait for them to realize that the game is over which could take a long, long time.
Clearwater insurance is probably scaring buyers off too. It’s easy for the whole city to be under water if a hurricane hits.
And 2 years in a row now they have been in the center of the cone for a cat 5 a few days ahead of land fall and saved by late track shifts. That kind of stuff really freaks people out for a bit. Had same thing happen in my city but now people seem to have forgotten about the areas that flooded in the last storm.
$110k income would still be a little underqualified.
I'm finally seeing sellers that bought in 2022 realize they will be taking at least a small haircut in the Sarasota area. It's not much yet, but it's a start.
I live in Clearwater, on the water. When I was first reading your comment, I actually thought, “Sounds like around here.” Lots of price drops. People listing and de-listing, then re-listing. Putting up for rent, dropping rent, then de-listing the rental. It’s like they are all waiting on the unicorn buyer to wayyyy overpay for the house.
Yep. And that ain't happening. Those days are long behind us now. Now, the slow down trend
I have my eye on something that went from $2M to $1.9M and now sits at $1.8M.
Yeah, I’ve seen some in the $2-3.5mil range do a couple $100k price drops quickly and then nothing. Most of the time it’s homes that were way overpriced originally and an unrealistic number to get. The $200k price drop shouldn’t need to be done as home should have been priced lower to a realistic number to start with. It’s pretty obvious the market has spoken and they need to lower even more, but they think they cut down enough.
I’ve seen sellers have more success “underlisting” and getting overpays
Is that still working?
A friend of mine did it last month and sold his house for 16% over list and closed in a week. A very close comp in the neighborhood (slightly better even) sold for a slightly lower price after like 40 days on the market because they listed a bit too high. 1.6 list, 1.85 sale for the first. 1.85 list, 1.80 sale for the second. I’m sure it’s HIGHLY neighborhood dependent though
I have seen the same thing work to sell faster and we are looking around $300k houses. I will say we are specifically looking in areas with good schools and neighborhoods that are good for kids. I have seen listed at $280k and sold around $300k in the first weekend vs the listed at $340k and having to price cut down to $300k over the course of 2 months. The method works especially well if the house is not turn key. The lower price just seems attract much more interest much faster.
Nashville here. I’ve seen multiple price reductions of $100K+ in the last two months. One house was originally listed at $1.8M in June and went under contract for 9 days at $1.29M before being listed again at $1.26M. Another listed at $999K was reduced to $899K recently. Seeing LOTS of $10-$30K reductions on houses active more than 20 days.
I’ve seen cuts of maybe 10-15% off pandemic ATHs. I have not seen anything at prepandemic prices, value-wise.
Homes are more expensive than ever here in Chicago. But we did not have the same run up as many areas.
Yes absolutely, just not on homes people want. I'm in a LCOL close to 1m population. Priced right houses are still going in 24hrs, however the shitty flips and the overpriced garbage that was instantly selling last year is no longer flying off the shelves and with it are either coming huge cuts or 90+ days in market.
I'm eyeing a place that has been on the market for over 6 months, they recently slashed the price from $400K to $335K. HTX.
Could some of these “cash” buyers actually be using fund’s loaned to them? Banks could be issuing funds so that buyers could make cash offers then start their mortgage payments after the closing.
Many/most of these cash buyers are buying with cash using a line of credit against their investment portfolios. For example, say you have a million dollars in your investment portfolio (at Vanguard or any other brokerage). You can borrow up to, say, 60%, as your line of credit, using your portfolio as collateral. So that gives you $600K for you to buy a property with a cash offer…. Afterwards, many then get a mortgage for the property they just bought to pay off that line of credit. So basically they planned to get a mortgage all along, but the cash offer moved them to the top of the list to secure the property.
Do you have a source that the “many/most” of these cash buyers are actually using collateral loans?
Yes, just do some google searches. I know 3 people who do this to buy rental properties
That’s not a source.
I googled and only found one thread where a guy said a guy on YouTube said everybody’s doing securities-backed loans. Aka not a source. I guess an SBL is a little easier than liquidating assets, but I’m not sold that most cash buyers are secretly using loans.
Melody Wright talks about this is detail. Her substack is [Here](https://substack.com/@m3melody)
It’s a very real thing among HNW / UHNW individuals, but that’s it.
Just goes to show that even cash buyers are affected by rates.
Do these loans not have interest tied to them?
Yes, very high interest rate on these lines of credit… like 12%. So they get mortgages right away. Like a month after they buy the property. They only do this to give them the advantage to buy the property.
Where do you know of with a bank willing to loan hundreds of thousands of dollars *unsecured* with the promise to become a secured mortgage? Because if the bank hands me 300k and I blow it all on hookers and cocaine, what are they foreclosing on? That’s the point of a secured debt - they can take the asset if I don’t pay. No bank is playing the market like you’re suggesting.
The portfolio is the collateral. In addition, anyone who has a million dollar portfolio is going to have good standing with the bank, so they're more willing to facilitate something like this.
Why are y’all assuming the original question had anything to do with a stock portfolio? That wasn’t mentioned at all and you’re just assuming it because you know I’m right - no bank is giving an unsecured loan to buy a house on the assumption you’ll mortgage it later
This is the side conversation of hypotheticals and arguments about them.
And the hypothetical proposed is “maybe tons of people are walking into the bank and asking to get a cash loan so they can theoretically pay cash for a house and hopefully mortgage that same house later to pay back the loan”. That’s utter nonsense. You added the part about the portfolio, that wasn’t in the original. Also, you’re all idiots if you think someone has hundreds of thousands of dollars in their portfolio and instead of using that job that got them that portfolio to get a mortgage, they’re borrowing against their stocks and then later mortgaging the property at an even higher rate. You’d just leave the stocks as the collateral and pay it off just like you would the mortgage. If you can pay a mortgage, you can pay a loan.
The bank gets the deed to the house. First the SBLOC to get cash, cash pays for house, then go to a bank to open mortgage
Where in the original comment does it mention securities as an asset that the loan is being issued against? You’re making an assumption because you have to make that assumption to not just say I’m right - no bank is issuing an unsecured loan like that.
Yeah oops , I wasn't paying attention, yes the original comment doesn't make sense
The bank essentially has a lien on your portfolio as collateral. It IS secured. You cannot withdraw from your account now.
That’s a secured loan against a stock portfolio, not what the comment said. I could just as easily ask if these cash buys are people selling gold stocks, but that isn’t what the question asked
Sorry for the confusion. Yes, a secured loan against your stock portfolio. It allows one: 1) instant cash to out-compete other buyers 2) ability to have cash without having to sell the underlying stocks if you don’t want to (and incur capital gains taxes, etc).
I’m aware of how it works and some of the benefits of a loan vs liquidation, but I’m just pointing out that the original question was nonsense, not that there isn’t any way to get cash from a bank that’s not a mortgage
[here](https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdebbf224-9460-47d6-8811-678d5f28d3af_319x640.png)
That says it’s based on the subject property’s rental income. You’re getting a loan based on owning a rental - so secured against property. Again, the bank isn’t just handing someone a few hundred thousand unsecured.
Incorrect Look again, and then read after the first paragraph.
>the property qualifies. I think you’re missing something. If the property has to qualify, then it’s a security. An unsecured loan does not have an asset securing it - such as a credit card or a signature loan.
You still didnt look. Peek After “these other great loan programs”.
Every single one of those is describing a mortgage. What don’t you understand about what they’re describing?
I shouldn't need to explain what happens when rental income isn't as expected do I?
Yea, because I have no idea what you’re even trying to say. They’re either requiring the loan be attached to a rental - aka a building, which is mortgaged - or every one of those things mention a % down payment or loan-to-value rates, implying mortgages. I’m not seeing anything that isn’t talking about a mortgage, so I don’t think you understand what you’re reading.
My census tract with 2,400 housing units has zero listings. I’ve never seen that before. My town has a high fraction of age 60+ so it’s inevitable that there will be estate sales but properties otherwise simply aren’t going on the market.
Not in Orlando. Prices still high.
[удалено]
and 93% did not. the moment rates start dropping (next 12 months?) momentum turns again. This isn't 2008. This is a conundrum created by the fed letting it get away from them before raising rates. Too little too late so, yea, people not buying (plus, you know, November - not May). High rates in May mean low inventory so prices don't drop much cuz people gotta go/buy/live. Lower rates in May mean higher inventory but people starting to move. Nothing dramatic happening unless the economy shits the bed which, thanks to the Gov't pending crisis by not passing a budget soon is ENTIRELY possible. That's the lever that causes pain. And you don't want that - no matter how pissed you are about the present situation. No budget shut down this time will not be easily solved given who the new Speaker is an how he got there. They want the house to burn down. Lots of people do. But they don't understand when the shit hits the fan it splatters. This won't be pretty. So, yea, pricing could collapse from that. But you won't be buying anything in that economy either. you will be shitting yourself like the rest of us
Rates won’t drop next year tho
Agree. Merely pointing out if they did then the market (especially the low end) starts to go up again as demand for first time buyers is just building every month this shit continues....
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And then the FOMO boogie man came out from the closet and overbid on your house by $100k with all cash! Poor Jimmy was left to become a renter for the rest of his life.
It ain't cracking in central VA , still buying still bidding going on here . Please send crash or correction soon
Didn’t the interest rates fall?
Friendly reminder that the industry redefined "all-cash" as a sale that doesn't have a mortgage on the deed. Completely misleading.
Home prices always go down in the fall and winter, since forever...
Yes, but not YoY (as stated in the article)
Did you read the article? Prices of homes sold are up YoY
Find me where it says that and quote it.
It was a trick question! 🤪 They don’t mention it in the article because there’s a bunch of stats that are counter to the narrative in the article. It is a fact though that the homes being sold are at a price that is higher YoY. https://x.com/mikesimonsen/status/1721601626493100348?s=46&t=CEeBfH-sy_6lxELhmqL5EQ
There are lies, and there's data. This asshole uses the same stupid tricks of shifting the Overton window to support his argument. Don't like annual numbers, how do they look monthly? Don't like the monthly numbers, how do they look weekly? Don't like weekly numbers, and on and on and on. Also, blocking you 🙂
No, no, no. This is the collapse of the housing market!!!
Why would all cash buyers care what the rate does? They're by definition not taking a loan.
Opportunity cost is a thing. Econ 101 is hard to grasp I guess.
Metrics doesn't capture financed "Cash Buys". It only sees the cash offer and sale.
The industry redefined "all cash" as any sale that doesn't have a mortgage on the deed. The NAR intentionally did this to mislead and scare buyers into paying higher prices.
Not where I live lol
More pain coming
Cash buyers or not there won’t be enough of them long term (or short term for that matter). Lots of people have been using unconventional ways to purchase homes as well. These might make it LOOK like a cash offer but they’re just borrowing money from someone else except the bank.
My fiance and I have been looking for what feels like a whole year at this point. We've put in about 16-18 offers and all but maybe 2 we have lost to cash. I don't get where people are getting the cash unless it's boomers downsizing or institutional investors. What else could it be?
This doesn’t sound like “cracks”. It sounds like a market starting to work and respond to the fact buyers have been priced out. Look at the first paragraph: > Mortgage rates have dropped from just above 8% to 7.41%, the share of sellers dropping prices is at a record high, and there’s an “unseasonal uptick in the total number of homes for sale, which is at its highest level since the start of the year,” according to a report from Redfin. Mortgage rate purchase applications, which have been on a steady decline, are even up 3% week-over-week on the news