When will prices start dropping?

When will prices start dropping? That has to be the number one questions on every bodies mind.
I’m watching reports on You Tube that say real estate is 9-10 months behind the economy.
Ad then I’ve watched reports that say SFH may not lose much value because of housing shortages and the population is breeding faster than rabbits and the const never gained the momentum like it had back in 2007
I remember back in 07 working on a track of homes here in central Ca, on a break I looked out the large LR window at hundreds of new homes going up in these nice areas on the outskirts of town, and also everywhere else in town.
I told my buddy, how long can this go on? The houses we wer working on had increased in price 200K in 2 years from 319 to 515K

This bubble is about to pop.
In the last 2 yrs prices going up so fast. and then the virus from hell, then 50 million taxpayers not working, then riots and the economy imploding & along with some mayhem and insanity, mix it all up and throw it all out on the table and holy meltdown.

You would think it would be when the forebearance measures by the banks stop. It isn’t that straight forward though because there are opposing forces to the ones you described. The Fed has printed so much money and the government has done lots of stimulus and may do more. Interest rates arw all time lows. Right now in my market (New Orleans) the property market is super hot. I don’t think anyone knows exactly how things will play out. I am getting ready for a crash as a very likely outcome, but also prepare for other scenarios. You need to have strategies to deal with different markets and be ready to switch between them.

I’ve seen the first reports that rent prices and property prices declining in New York and California.
It seems that even though there is a shortage of housing keeping prices up, with 50 million Americans unemployed who the heck can afford it.
My prediction was that prices wud start dropping mid to late summer, can you imagine all the unemployment checks running out and the moratorium on evictions and the mortgage forbearance’s ending and, holy market crash.
Americans want out of the cities, in Los Angeles and San Fran the homeless are thicker than than I don’t know what. These people are pooping on the sidewalks next to their tents and in business doorways. I asked my buddy Jimbo what can we do to help these homeless people? He says nothing, they are unmotivated, abusing substances and beyond help. I had to agree.
But now with this virus shutting down the economy will there be a new class of homeless? People that were working, want to work and you know the story.
Meanwhile we got this out of control huge military raging constant wars for reasons not understood by me, out of control government with huge salaries and pensions, and these outrageous CIA and FBI and Homeland security etc. doing absolutely no good funding illegal operations to overthrow countries and bring down their president.
I’m going insane here.

I watched a video on YouTube of a drive thru food giveaway in Riverside California yesterday. That in itself was nothing out of the ordinary, except this line was 2 frikin miles long. The youtuber that posted the vid drove the entire line with his GoPro , block after block w hundreds of people sitting in their cars and waiting and needing food. And the wait was hours.
And I just watched a news report where San Francisco renters are bailing. This one young guy said he was paying $4,000 dollars a month for a 1 bedroom apartment, I think he was moving back to parents. The news report also mentioned rents were going down by 10% already.
Also the news report mentioned an outrageous number of commercial leases have been broken.
I got a bad feeling here, & oh yea, there’s more. The CV virus is on the comeback trail, The violence and hatred spewing in those big cities w a high black population is ridiculous.
Oh yea, and yet there’s still more, 50 frikin million are unemployed and not paying rent and mortgages and power bills and car payments. The landlords not getting their rents and incomes, Can anybody else see the sh-t storm coming?
I’m trying to find a positive note here, but can’t.

I think the real estate SHTF is coming. Watching these doomsayers on YouTube is showing some convincing facts and warnings. Probably a first wave of defaults this late summer and fall. Cud be catastrophic or just severe. Let’s say about 100 million homeowners and renters out on the frikin street. And outrageous amounts of commercial bankruptcies.
I’m thinking there will be lots of houses apartments available but the working class people are out in a tent poopin on the sidewalk. These potential renters and buyers can not afford to live in a house or Apt cuz they got no frikin jobs. The landlords are losing income and equity, and can’t pay their mortgages. Who you going to blame? Trump? The Virus? China?
There is going to be some price adjustments.
Meanwhile, things seem to be half-ass normal in my city, Walmart has plenty of TP and also every other product I luv, cept Monster drinks, it’s hit and miss, us addicts buy them by the 10 pak.
Ribs and hamburger & chicken is up maybe 10-20%
Back in the real.
Only investors crazy enuf to weather this storm will profit on this coming cluster fruk.

Who knows.

My approach is always to be prepared for the downside (have capital reserves and a game plan if the economy tanks), but to still participate in the upside because who knows how long that will last either. If you think a downturn is very close, try to stay out of projects with longer durations (flips, new builds) so you don’t get stuck in a really bad spot if the market tanks.

Philly hasnt seen any dips and similar to many markets is still going up. We’ve seen a few trends … many owner occupants are jumping into to buy their first home to lock in the super low interest rates. That’s leading to bidding wars for properties on the MLS. In regards to the off-market deals we’re sourcing through our own marketing, we’re getting lots of people saying they are retiring now. The pandemic is probably forcing some folks into retirement. The eviction courts also just re-opened in Philly so that’s going to be interesting.

Real estate has seemed ‘too perfect’ so far. Commercial is probably going to take a major shit soon. And like stated before, other property owners won’t be able to keep this up either and will be forced to sell.

Yea, somehow the whole dam thing hasn’t came crashing down yet. But wait Kemosabe, till SHTF. How long can this forbearance and eviction holds go on? How long can 50 frikin million unemployed sit around waiting for a 1200 dollar biscuit. How can we fathom the trauma experienced by renters and mortgage holders and Landlords? How many will become homeless? Will armed neighborhood groups battle with the BLM thugs.
Well, put on some clean underwear wild investors, cuz this insane show is about to go live…

I watched a report tonight that 1.3 million residents of New Jersey were delinquent on their utilities. So now I’m thinking, let’s add up the other 49 states and holy mother of economic shi-t storms.
Ok and then what about the millions of delinquent renters and mortgages, oh yea, how many car payments are not being made and credit cards? Over half of all jobs will never come back. Hundreds of thousands of restaurants closed with waitresses and cooks and janitors not working, didnt delivery trucks keep them stocked? Is anybody traveling? Are hotels going belly up? Is anybody buying cars?
Is anybody buying clothes and shoes and appliances and furniture?

I’m a bit worried,

Is anybody doing deals? I been all doom and gloom lately. I got this weird feeling that we are seeing the beginning of the end of our civilization.
Maybe some kind of civil war?
These humans are an interesting primitive species.
They drool over power, what kind of insanity is this? And the military and police have all these cool bad ass weapons that we are not allowed to own.

Back on the farm

I had one buddy do a wholesaling deal a few months ago, his description of the process and all he went thru was impressive. The visits he made to the seller and befriending the ol guy, the seller was a foreigner and the negotiations went on for months. He was finally able to squeeze a 3K profit.
So now I’m thinking, with some new brain cells that have been re-generating, I ask myself, Do I spend a few hundred buks for the start of a direct mail campaign or use that money to stock up on beans and rice and prepare for the collapse of our way of life???

We should wait a little bit

There is too much government stimulus, payment deferral and money printing to see the true state of the economy and have realistic price discovery of assets including real estate.

Probably still to early to predict any sort of timeline for price decreases.

Thank you for your comments, I was interested to read them.

This economy seems to be hanging by a thread. Many New Yorkers and San Franciscans are moving out of the city. I’m reading reports that there are more vacant apartments in NY and SF than ever. The city dwellers seem to be desperate, store owners are reporting a 100% increase in shop lifting for food. The police are not arresting but writing tickets.
Black thugs are shooting each other in Chicago and Detroit. Soon evictions and foreclosures will hit massive levels all across the country with over 50 million workers not paying their rent and car payments and electric bills.
I worry about the fragile food supply chain breaking and then holy mass mayhem.
I always knew this civilization wud fall someday, but I was hoping I wud out live it.

When will the prices of houses go down? If you take a look at San Francisco there has been a slight decrease. That said the market I’m in, Denver, Colorado, just set a record high for the month of July as average sales price goes. I believe the main cause is still low inventory and until that supply versus demand equation shifts prices will either plateau or keep rising.
So when will they go down? My crystal ball tells me that once people with mortgages that are in excess of what stimulus is paying loose their jobs in larger numbers we will see more homes having to be sold. This increase in supply as it grows will cause a price drop. This drop will be amplified by foreclosures that will surely occur too. The short is what goes up must go down. The neat thing in real estate is that along as you don’t have to sell and can hold out it will go up again. If you are trying to time the market my advice there is don’t. There is always a reason to stay on the sidelines. There are always good deal to be had. You just have to work for them. Our website makes us sound a lot bigger than we are - my point is that any day of the week and in any part of the cycle we will buy a house. On that given day we run the numbers. Currently we are running numbers with an expectation that the market will drop. We put that in the calculations. You can do that too. Simply add a negative appreciation number into your spreadsheet. Good luck - i hope this helps a little. Happy investing.

Yes, the prices will drop soon. Be prepared!!!

Several of my former buyers have txted and emailed me asking if I have any wholesale deals available. They tell me there is low inventory. I tell them I’ve been waiting for the SHTF, with evictions and foreclosures. Then they remind me that our Ca Governor nukem has extended the moratorium on evictions till nex Feb.
My ol buddy and wholesaling partner Bob sent me photo’s of an old farm house that looks like it was once a mansion.
He tells me it was built in 1925 and sits on 1 1/4 acres in the middle of some almond orchards in a one horse town called Exeter. The place is def rural and secluded. It’s a gorgeous old home that has been upgraded and repaired along the way. It def needs 60-80K in new repairs and upgrades. After drooling over the photos I tell Bob to go get it on contract, but he claims none of our local investors want it at the 275K price, especially cuz it needs extensive repairs, but hell, after repair value is 450K, Bob says the price is too high and sev investors that seen it ran for the hills. He dont want to piss off the realtor investor if we cant sell it. I tell him to give it to me and I’ll show you how it’s done. Now he wants it. But says we cant market it on CL, I tell Bob, no Dude, we need an out of town buyer, from San Fan or Portland or LA. And that these people are fed up with the city crime and lock downs ext.
I tell Bob to get this property locked down for 270 and we will sell it for 320K
Bob is scared of this one, cuz the realtor/investor might get pissed off if we cant sell it. He’s called a few times, I had to hold his hand and bottle feed him some soothing words.
I don’t know if we can sell it, a lot of the houses we previously had I never thought they wud sell. But they did.
And it sure be fun trying.

I just watched the most fascinating webinar. I admit I’m skeptical as all get out, even though I’ve made tons of money from a late night TV commercial selling a 20 dollar book on real estate that got me started.
Well, this is a method of doing real estate deals that I never heard of and it is frikin outrageous.
Imagine this… We find properties that have mechanics liens on them that are up for sale.
Why the hell wud we want that?
Here is the concept in simple terms and even I cud almost understand it.
We contact the lien holders by mail or phone, and negotiate a pennies on the dollar payment.
This is an old debt he had given up on and cud be ready to grab some fast cash and run on a debt that he gave up on…
We somehow know that the house is being sold or is in pre-foreclosure.
Then we get the documents signed and submit to the Title company. I speculate u hav to record the contract but that’s a $25 fee in my city.
It sounds so insanely easy and doable. The course costs $1,497 buks. It includes full instructions with all contracts needed.
I need some partners on this one to share the cost and rewards.
The webmaster kept saying how you will be helping people get their money.
But I’m seeing the dark side. How ethical is it to convince a lien holder to accept 10-15 cents on the dollar to go in your pocket when the property sells?
It sounds even sleezier than the bottom feeding wholesaling deals I’ve been doing.
And I admit, it’s just my kind of business.
It’s all done virtually, contracts sent and signed with emails, even notaries online now with video verification. We can buy lists of properties w liens and use virtual assistants to do much of the grunt work.
We dont have to meet homeowners or sellers or anybody, I can rotate on my thumb doing this business.
The price tag of the course is high, and I question, do I buy this course and risk my food and mortgage money?
But then…
Cud this be the baddest ass business that I never heard of? And get me to where I want to be?

My wholesaling buddy Bob just slam dunked a mountain house, I thought it was an outrageously insane price for an old fixer but he sold it in 2 days and is making 10 frikin Grand. His realtor buddy that had it listed is making 50 frikin grand.
What is my excuse?
I’m thinking city dwellers want out and buying everything in sight. Price don’t matter.

Rando, there are actually a couple other options to deal with these liens. One is to just buy the house subject to the lien, in which the lien will expire at some point. Usually 10 years from the date it was filed (in most states). The other is to send the lien holder a lien release with a demand letter, telling them they are holding up clear title. I’ve used the lien release option a few times, and each time the lien holder signed, notarized, and returned it so it could be filed. They were all medical liens, each in excess of $5K.