Another Housing Crash

[Meandering]

"Please tell us the "typical" ownership retention of residential properties, in years,

Thanks.".

It varies by market.

I would suspect DC has a shorter turn over than most places, due to national elections.

The far north turns over quicker because retires move to Florida, and Florida turns over on death rates and population stats of their age groups.

All real estate is local, although much is manipulated nationally.

So you tell us, what do the headlines say? When's the next projected time frame for people to sell their homes and move?

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[Meandering]

Let me make this easier.

Builders aren't building in the volume they were because of the crash.

Why?

Well,
if builders aren't building lots of new homes, where is the inventory supposed to come from that will move prices higher?

Current owners.

Currently higher prices have not brought those owners to the market to sell.

Why?

Prices aren't high enough to attract new inventory that could be used to bring in higher market prices,
if
there are all cash buyers willing to pay those prices
so
you can bracket a higher sale price
Getting a buyer a nifty mortgage for a property with a market high sale price.

See how that works?

Works the same for builders, and that's why they aren't building.


..

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[Randolph Kinney]

Lots of sales of beater homes here that are rehabbed and flipped. Some were vacant, others weren't. Some new houses are being built on a small scale. Population is growing here, lots of retirees.

 

[Deleted member 128537]

Let me make this easier.

Builders aren't building in the volume they were because of the crash.

Why?

Well,
if builders aren't building lots of new homes, where is the inventory supposed to come from that will move prices higher?

Current owners.

Currently higher prices have not brought those owners to the market to sell.

Why?

Prices aren't high enough to attract new inventory that could be used to bring in higher market prices,
if
there are all cash buyers willing to pay those prices
so
you can bracket a higher sale price
Getting a buyer a nifty mortgage for a property with a market high sale price.

See how that works?

Works the same for builders, and that's why they aren't building.


..

.

Marion, it doesn’t matter what causes the shortage. The fact is there if there is a shortage of available houses prices will go up to the point where poeple will be able to eventually sell if they are underwater. It is pure supply and demand. Period. Doesn’t matter what causes the shortage of the supply.

 

[Deleted member 128537]

Nope

Sales and list volume is down because list/sale prices have not exceeded the costs and expenses of owners to sell and walk away with some $&$.

Doesn’t matter what causes the shortage. It’s still a shortage. That causes prices to rise until those people that want to sell and can sell if they are underwater. IF THEY HAD TO SELL you would see all kinds of short sales. Not happening. Thus if they don’t have to sell they will sit on a house until they can afford to sell.

This isn’t any different than any other commodity. If people who have the commodity and aren’t willing to sell and can afford to sit on it then they will until they get their price. I do this with stocks all the time. I don’t have to sell a stock. But when it hits my target price I do.

 

[Meandering]

Thus if they don’t have to sell they will sit on a house until they can afford to sell.

Now that we agree, can we get back to the typical retention of residential properties, so that we know when that inventory will be available in the market to drive prices higher?

Stay woke.

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[Randolph Kinney]

Wages are increasing but the labor force participation rate has fallen to 62.8% or 95,745,000 people are out of the labor force. You would think with wages increasing that the number of people out of the workforce would decrease and the labor force rate would increase. GDP is increasing.

Sort of like home prices increasing yet sales volume is not increasing. That means sales volume of new homes and resale volume of existing homes are not increasing.

There is a huge supply of rental houses that could be sold if the price is high enough and rents stagnate.

As interest rates continue to rise, demand will be dampened.

 

[Deleted member 128537]

Now that we agree, can we get back to the typical retention of residential properties, so that we know when that inventory will be available in the market to drive prices higher?
Stay woke.

.

Prices are already being driven higher and in my area are higher than pre-crash levels.

 

[Randolph Kinney]

How the foreclosure crisis created the single-family rental industry

The industry is composed of a small number of key players. Invitation Homes and American Homes 4 Rent, the second-biggest single-family rental company, got their start in the early 2010s by taking advantage of bargain prices on foreclosed homes by buying huge numbers of properties in bulk. Since then, other companies, like Progress Residential, Main Street Renewal, and Tricon American Homes, have formed, and the industry as a whole has amassed a cache of about 200,000 single-family homes and turned them into rental properties.

Granted, 200,000 represents a rather small slice of the 14 million units that make up the single-family rentals market in the U.S.

The companies focus on markets where unemployment is low, higher-paying jobs are plentiful, and quality single-family homes are the primary form of housing — places like Los Angeles, Dallas, Atlanta, Florida, and Phoenix. These markets allow the companies to charge annual rent increases with the expectation that tenants can sustain them.

In aggregate, single-family rental companies charge rents comparable to market rates for any given city. In most markets, single-family rental companies charge a slightly higher average rent than estimates provided by RentRange, a third-party data-collection company that provides rental intelligence for real estate investors and landlords.

According to a monthly Morningstar report on the single-family rental securities market, companies across the industry have consistently raised the rent on tenants who renew their leases by 4 percent every year.

https://www.curbed.com/2018/5/18/17319570/wall-street-home-rentals-single-family-homes-invitation

4% rent increase every year is higher than wage growth and inflation. Sooner or later, as interest rates continue to increase, there will be a substantial supply of rental houses to hit the market.

 

[Randolph Kinney]

As far as housing is concerned, it seems that the California Local Rent Control Initiative (#17-0041) may appear on the November 5, 2018 ballot, since it has received 565,000 supporting signatures when only 365,880 are required.

“The measure would allow local governments to adopt amendments, ordinances, or regulations to govern how much landlords can charge tenants for renting apartments and houses.

https://www.edhat.com/news/rent-control-to-save-street

California is gearing for rent control. Big landlords are selling their apartment buildings, now. If the measure passes in November 2018, 2019 is going to see a supply of rental houses come onto the market. Just in time as mortgage rates hit 5.5%+ for 30 year mortgage. Prices will fall.