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Old 07-09-2021, 11:27 AM
 
240 posts, read 208,633 times
Reputation: 286

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Quote:
Originally Posted by beach43ofus View Post
This topic thread is almost 2 years old now. For the record, prices have increased during this time.

We have not even clarified what the meaning of a bubble is. What percent do values have to fall in the future, to prove we are in a bubble today? 5%, 10%, 20%, or more?

If the OP bought when they wrote the original post, they would have enjoyed some nice appreciation.
As a career, seasoned bond trader, let me suggest the following summation:


A housing bubble, is a run-up in housing prices fueled by demand, speculation, and exuberant spending to the point of collapse. Housing bubbles usually start with an increase in demand, in the face of limited supply, which takes a relatively extended period to replenish and increase. Some times speculators pour money into the market, (e.g.hedge funds, foreign govts, etc) further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices—and the bubble bursts.



Bubbles can last for years, as we've seen before, and can not be quantified by "percentage run-ups". Equity markets can be more quantifiable viz charting techniques.


Never confuse price with value.....i.e. intrinsic value. Smart buyers know when and how to sell or step aside.


There are those that brag that their house it "worth more" now than last year. No, it's only "worth more" if you act on a "price", i.e. sell the damn thing/step aside. Equity or phantom income means nothing unless you put the equity in your pocket and thereby achieve liquidity. Houses aren't liquid, never have been, never will be. It's shelter. Never fall in "love" with a physical structure.


All in all, are houses technically "over-priced" (e.g. psf)? yes, no doubt... Unless you're a dumbbunny. If you don't think so, but you have at the same time a very large "gain" in the price of your house (over a very short period) but you don't want to sell it, then you're a bigger dumbbunny, but people are free to do as they wish.


No matter.
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Old 07-11-2021, 11:47 AM
 
240 posts, read 208,633 times
Reputation: 286
Food for further thought. Median price rise in Manatee ALONE:




JUNE 2020 325k


July 2020 359k


AUGUST 20 360k


Sept 2020 350k


October 20 360k


Nov 2020 351k


Dec 2020 359k


Jan 2021 380k


Fed 2021 380k


MAR 2021 395k


APR 2021 405k


May 2021 407k


By any measure, this is meteoric rise and is evidence.
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Old 07-11-2021, 05:03 PM
 
Location: Free State of Florida
25,242 posts, read 12,375,937 times
Reputation: 18868
[quote=KMerendino;61416700]As a career, seasoned bond trader

Never confuse price with value.....i.e. intrinsic value. Smart buyers know when and how to sell or step aside.


There are those that brag that their house it "worth more" now than last year. No, it's only "worth more" if you act on a "price", i.e. sell the damn thing/step aside. Equity or phantom income means nothing unless you put the equity in your pocket and thereby achieve liquidity.

Then why do Realtors use comps?

Market history contains key information and trends that can drive future transactions.

As a bond trader do you ignore past trends? When a client calls you for advice, do you say "sell first, & then I'll advise you?"

I think not.
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Old 07-11-2021, 06:17 PM
 
6,681 posts, read 4,379,439 times
Reputation: 1645
So how will the end of the pandemic protections for foreclosures effect the local market? I wouldn't be surprised if Biden extends the eviction moratorium yet again. But sooner or later it's going to have to end. Landlords are suffering with eviction protections also. Perhaps it won't be felt so much here because demand is so strong with many cash buyers. If there's a lot of foreclosures I expect that vulture Blackstone to jump in and keep prices high.

Thousands in South Florida could face foreclosure with federal protection coming to an end

https://news.google.com/articles/CAI...S&ceid=US%3Aen

Time is running out for thousands of South Florida families who are facing foreclosure on their homes as a result of the COVID-19 pandemic.

For some, the nightmare started more than a year ago but was stalled by willingness of government officials to prevent banks from forcing people out during an unprecedented public health crisis. The Trump administration and most states stopped foreclosure and eviction proceedings on federally backed loans back in April 2020, setting expiration dates for their protection that have repeatedly been extended as the COVID crisis continued.

For others, the pandemic kept the foreclosure process from legally beginning — the moratorium on foreclosures kept banks from initiating the lawsuits in the first place, giving homeowners time to catch up or work things out with their lenders.

Now the moratorium, which applies to federally backed, single family homes, is set to expire at the end of this month. It was scheduled to expire June 30 before the Biden administration stepped in and extended it one last time.

Three federal agencies back mortgages: the Departments of Housing and Urban Development, Veterans Affairs and Agriculture. In addition, the Federal Housing Finance Agency oversees the Fannie Mae and Freddie Mac lending programs. All have implemented the final moratorium that expires July 31.

Some experts are warning about a deluge of pent-up foreclosure cases they believe will flood the courts and possibly depress the local real estate market.

Last edited by wondermint2; 07-11-2021 at 06:30 PM..
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Old 07-11-2021, 06:54 PM
 
Location: Sarasota/ Bradenton - University Pkwy area
4,568 posts, read 7,435,392 times
Reputation: 5958
Some experts are warning about a deluge of pent-up foreclosure cases they believe will flood the courts and possibly depress the local real estate market.

There are lots of articles and no two seem to agree on this topic. I was reading one just the other day that said this: On the flipside, a smaller amount of homeowners with a mortgage are underwater now compared to the "Great Recession." Nationally, just 2.6 million – one in 21 or 4.7% of all mortgage properties – were considered seriously underwater in the first quarter of 2021, meaning the amount they still owe on the home is at least 25% more than its estimated market value.

And from another recent article regarding the Miami area: In Florida, year-over-year equity gains per borrower averaged $19,000, eclipsing the $14,000 average gains CoreLogic reported for the third quarter of 2020. In the Miami-Miami Beach-Kendall, FL metropolitan area, 6.3% of homes with mortgages were in negative equity, meaning they owe more than their homes are worth on the market. That number is down from 6.8% in the third quarter of 2020.

So south FL at 6.3% properties with negative equity is higher than the national average of 4.7%, it is still quite different statistics from 2008 - 2011 when the bottom dropped out of the real estate market.


Time will tell, but foreclosures in FL are judicial, meaning the lender has to file a lawsuit in state court in order to foreclose. That process can take a year or more even if the homeowners are cooperative, longer if there is a "glut" of Lis Pendens filed. So it will take awhile before any of those hit the real estate market.

We may see another round of underwater homeowners doing short sales, if their lenders permit. However, don't expect to see bargain prices because this is an entirely different market now than back in 2010. Plus you have to factor in the huge number of properties getting bought up by national investors in our area. Banks are well aware of those multi-million even billion dollar groups.

It would not surprise me if a lot of those foreclosure properties never even make it to the real estate market this time around, but rather end up being sold by the banks directly to those REITs in private transactions.
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Old 07-12-2021, 09:58 AM
 
240 posts, read 208,633 times
Reputation: 286
[quote=beach43ofus;61431756]
Quote:
Originally Posted by KMerendino View Post
As a career, seasoned bond trader

Never confuse price with value.....i.e. intrinsic value. Smart buyers know when and how to sell or step aside.


There are those that brag that their house it "worth more" now than last year. No, it's only "worth more" if you act on a "price", i.e. sell the damn thing/step aside. Equity or phantom income means nothing unless you put the equity in your pocket and thereby achieve liquidity.

Then why do Realtors use comps?

Market history contains key information and trends that can drive future transactions.

As a bond trader do you ignore past trends? When a client calls you for advice, do you say "sell first, & then I'll advise you?"

I think not.


Why do Realtors use comps? they don't know any better mechanism - comps are "comparatives" of "relative value" - otherwise they can provide a "false indicator" which can ADD to an inflated market. Right now, many appraisers are in fact backing away from providing overly exuberant analysis based on "comparatives". Comparatives can be piling on a lie. It's just another "tool", it ain't gospel, and banks know that very well, and they are becoming quite defensive right now.


Second, trends in a bust-out/break out market doesn't necessarily dictate a "new trend". That's a lie.


Third, I'm an institutional bond trader whose clients aren't "moms and pops" in the retail sector....meaning my clients are sophisticated investors such as pension funds, foundations, endowments, states/govt, hedge funds, BANKS, sovereigns/foreign govts, school boards, counties, cities etc etc.
Most understand that they never lose money taking a huge profit. They aren't stupid and need a lot
of "advising". By comparison, retail investors are always behind the curve....and chumps. Institutional investors make and swing markets, not an individual with 1mm in the market.


And yes, in a frothy market I do tend to ignore "past trends". I look at internal and external market forces far more.


As a side note, fixed-income and equity markets are not the housing market. They need not move in tandem. I've seen aberrations in all markets


You are free to think what you will. Markets are about making money, not losing money. No sane person whether institutional or retail places money in the equity or bond market in order to LOSE money. It's THAT simple. No sane person buys a house today for 450k in hopes that in 18 months he can sell it for 300k. That's another argument against buying a house with your cash. If you bought a house today for 450k and in 18 months you had a "bid" for it at 600k, I would "advise my client" to hit the bid in a heartbeat, and not look back.
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Old 07-12-2021, 10:07 AM
 
Location: Lakewood Ranch, FL
551 posts, read 528,335 times
Reputation: 964
just ignore him, by this logic everyone's 401k is worthless, because we have not cashed them out.

Common Sense > FUD.
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Old 07-12-2021, 10:12 AM
 
Location: Free State of Florida
25,242 posts, read 12,375,937 times
Reputation: 18868
Quote:
Originally Posted by joshan View Post
just ignore him, by this logic everyone's 401k is worthless, because we have not cashed them out.

Common Sense > FUD.
That's good advice

I think prices have leveled off, but not demand. I'm seeing some price reductions again.
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Old 07-12-2021, 10:48 AM
 
240 posts, read 208,633 times
Reputation: 286
There are so many bank-known defaults on first mortgage contracts (and seconds) throughout the nation and Florida that it's mind-boggling.


It's not being publicly revealed at this point because being in technical default is not the same legal position as filing a lis pendens which is an intention to legally "foreclose" filed in a US county.


To be exact, there is a huge backlog of technical defaults that probably will not get "remedied". That's hard to predict.


Many money center banks might be reticent to immediately "take back/sell" houses because of balance sheet issues to the bottom line, thus their stock price, dividend, etc....even their ratings.


If this happens MBS prices are going to hit the skids, and drag the fixed-income rates higher and similar bonds prices much lower. Everyone knows that the fed is fullofcrap and must raise rates to fight impending inflation. That's when a snowball might happen.


Yes, REIT's might be buyers, they always are...but they aren't going to pay what the banks want - no where close - hedge funds are going to pay the price either. They aren't dumb.


The GSE's are quite nervous, as well they should be. They can see the clock ticking. They are the ones that are truly holding the bag.


When these "defaults" become foreclosures, the housing market is going to correct so fast it will make your head swim.


The borrowers DO NOT have the money in hand to "cure" their defaults in toto.


Wave of modifications?? probably, maybe....results will be the same,,, a back up in house prices - easily 25-30%.
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Old 07-12-2021, 11:01 AM
 
240 posts, read 208,633 times
Reputation: 286
BTW, most 401k's are garbage-I know, I did business with them....still do



Read about how 401k's came into existence in the first place - most buy total crap - companies get suckered into buying packaged crap for their "employees" and "executives".


Most idiots I've known don't even know the massive FEES associated with their 401k LOL


Chumps do 401k's, but it's a free country to be a chump


Get an education:


https://www.forbes.com/sites/greatsp...h=baefaa47a6a5


https://www.washingtonpost.com/busin...532_story.html


https://www.bankonyourself.com/six-r...401k-scam.html




And yes, I'm a Wall Streeter, but if you like getting hosed, then that's none of my business. I deal with the truth, not fantasy.
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