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Sniper

Current Housing Market - Post Pandemic

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Had a conversation last night with my daughter-in-law, who's in the real estate business regarding the upcoming eviction and foreclosure moratorium coming up at the end of the month.

Cliff notes version: These current high prices will be ending soon. If you're looking to sell, we're close to the top on prices. If you're looking to buy, try to hold out, as more inventory will be coming on the market, pushing prices down.

She gets access to the "heat maps" of people in pre-foreclosure. She says the list is off the chart, tons of houses are in this status. Now, some with do a mortgage modification, and roll past due balances back into their loans. But, she said many people have passed that window of opportunity to do that with their mortgage company. They will just "squat" and let the clock run out, just like back in 2008, but the numbers are WAY HIGHER this cycle. IN NJ, the process to foreclose can take years, specially with these high numbers.

If any of you remember looking around to buy in the last downturn, these pre-foreclosure houses ended up being in really bad shape, since people stopped doing maintenance on them. That pushed prices down too.

Regarding the rental evictions, all those tenants will never make up the overdue rent. They had a big party with all their stimulus dollars and UE kicker money. Even with evictions, it takes months to kick the freeloaders out. Then, where will they go and what landlord will re-rent to them, if they know they stiffed the last landlord?

Also, many ma and pa landlords stopped paying their mortgages without rent coming in. They are in the same boat as the homeowners above.

And, to add, these non payers of rent and mortgages in many cases, also stopped paying utilities and taxes. The utility moratorium is also coming to and end.

Bottom line, the current housing market will make 2008 look like a preschool party.

giphy.webp

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My two best friends are realtors and are predicting this will last for another year or two just off the supply and demand issue here with those moving out of the city. 

My parents house (which needs about 70 k in work) still sold 60 thousand over listing price. 

Im hoping the market does crash sooner though as im in the market for a house so im hopefully you're right. 

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1 hour ago, Cheflife15 said:

My two best friends are realtors and are predicting this will last for another year or two just off the supply and demand issue here with those moving out of the city. 

hoping the market does crash sooner though as im in the market for a house 

Add in Blackrock and other private equity vultures snatching up homes (often above asking price) then renting them back out.  

In fact, Blackrock bought a self storage chain so the people they toss out of their homes have somewhere to put their stuff.

https://www.rt.com/op-ed/528842-private-equity-pension-vultures-reset/ 

"In order to further shore up profits, the firms have bought big into vertically integrated predation. Blackstone bought up an entire chain of self-storage units to complement its continuing acquisition of houses. The continued inflation of the already precariously bloated real estate bubble (and the mathematical certainty of time running out for the Covid-19 eviction moratorium) means people are going to have to throw their stuff somewhere when the financial feces hit the fan".

 

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I hope the market holds together until my house goes on market (52 days from now) and sells. 
 

There is a house across the street from me that went on market July 2, and was under contract by July5. It was priced high (and my house has more yard and amenities). Anxious to see what the sale price was. 

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1 hour ago, Cheflife15 said:

My two best friends are realtors and are predicting this will last for another year or two just off the supply and demand issue here with those moving out of the city. 

Part of the high pricing will depend if Biden kicks the moratoriums further down the road. The longer he does that, the longer it will take to stabilize. I wouldn't be surprised if the ending of them at the end of this month gets extended.

I believe there's still 15 million people receiving some sort of pandemic unemployment, 15 months later. Before the pandemic shutdowns occurred, it was around 1.7 million. Big difference!

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26 minutes ago, Sniper said:

Part of the high pricing will depend if Biden kicks the moratoriums further down the road. The longer he does that, the longer it will take to stabilize. I wouldn't be surprised if the ending of them at the end of this month gets extended.

I have hard time believing Murphy will allow moratoriums to expire in N.J. four months before he's up for re-election.

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2 hours ago, Bomber said:

I have hard time believing Murphy will allow moratoriums to expire in N.J. four months before he's up for re-election.

Actually, last month, he extended the NJ moratorium to January.

Can you say "buying votes"?  I knew you could!

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Went searching for some data, here's the status in NJ, which was just posted the beginning of the month:

- Households that report falling behind on mortgage payment: 25.5% (#26 highest, 14.3% less than in 2020)

- Households with lost income that fell behind on mortgage: 24.4% (#36 highest, 17.7% less than in 2020)

- Unemployed respondents who fell behind on mortgage: 30.9% (#13 highest, 15.1% greater than in 2020)

https://madison.com/business/investment/personal-finance/how-covid-19-has-impacted-mortgage-payments-in-every-state/collection_7ca1035e-1e88-57cc-b6ef-182d85313c4c.html#32

What should help people this go around compared to the last housing crisis is that many houses have equity, due to the recent jump in prices, versus last time, when prices were dropping. People in trouble will probably opt to sell the house, and keep the equity, versus letting the bank have it.

But, if the 25% in this report all decide to sell at the same time, it would add to the available inventory, which might affect prices.

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7 minutes ago, 1LtCAP said:

big question is.....of those falling behind, how many really couldn't afford to pay as opposed to those who simply took advantage of the new excuse to not pay??

Funny, I overheard a couple of guys talking in Lowe’s the other day, one said he ‘took advantage’ of the covid payment deferral program his bank offered him, and used the money to do projects, and to buy toys…..

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1 hour ago, 1LtCAP said:

big question is.....of those falling behind, how many really couldn't afford to pay as opposed to those who simply took advantage of the new excuse to not pay??

Exactly what I was thinking. I believe part of the moratorium was that the mortgage companies couldn't report you to the credit agencies as a late pay, so I wonder how many are just taking advantage of the free ride?

Also, what legal authority does Murphy have that he can overrule contract law between a mortgage company and owner?

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6 hours ago, Displaced Texan said:

I hope the market holds together until my house goes on market (52 days from now) and sells. 
 

There is a house across the street from me that went on market July 2, and was under contract by July5. It was priced high (and my house has more yard and amenities). Anxious to see what the sale price was. 

May be worth it to list it now, people like to be in time for the new school year, possibly paying a premium for that, could be worth it to rent for a month or two?

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2 hours ago, Sniper said:

 I believe part of the moratorium was that the mortgage companies couldn't report you to the credit agencies as a late pay, so I wonder how many are just taking advantage of the free ride?

Speaking of taking advantage, I believe the banks don't have to classify those delinquent loans as non-performing assets on their balance sheets.  

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3 hours ago, Displaced Texan said:

Funny, I overheard a couple of guys talking in Lowe’s the other day, one said he ‘took advantage’ of the covid payment deferral program his bank offered him, and used the money to do projects, and to buy toys…..

shocking. not really. i bet they're among the first to cry the blues when they get the boot, or when their mortgage companies demand all back rent.......

2 hours ago, Sniper said:

Exactly what I was thinking. I believe part of the moratorium was that the mortgage companies couldn't report you to the credit agencies as a late pay, so I wonder how many are just taking advantage of the free ride?

Also, what legal authority does Murphy have that he can overrule contract law between a mortgage company and owner?

pretty sure he has none. but who's gonna question it?

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Also, what about property taxes? Many people pay their property taxes as part of the mortgage payment. If they haven't paid their mortgage in a year, is the bank paying the taxes, to prevent a tax sale?

Or, is there a tax collection moratorium too? I haven't seen anything regarding that.

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Some additional data points. For those selling, it looks like we could be at the top. For those buying, prices should start coming back down.

Housing boom is over as new home sales fall to pandemic low

  • Sales of new single family homes fell to an annualized rate of 676,000, 6.6% below May’s rate of 724,000 and 19.4% below the June 2020 level of 839,000.
  • The median price of a newly built home in June rose just 6% from June 2020
  • The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. Last fall, it sat at a low of just 3.5 months.

https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html

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59 minutes ago, CMJeepster said:

My neighborhood just had an additional house listed last week.  WAY over what it's worth by about $100K.  It will be interesting to watch it.

I think low inventory will continue to keep the prices up for a while. When the buying season slows down in the Fall and the foreclosure and eviction moratoriums end, it will be interesting what happens to inventory and prices.

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Some additional data points that prices are leveling and inventory might rise:

Pending home sales drop in June — more evidence of a housing turnaround

Pending sales of existing homes in June as measured by signed contracts fell 1.9% from May, according to the National Association of Realtors.

Sales were also down 1.9% compared with June 2020. Pending sales are a forward-looking indicator of closed sales in one to two months.

“Pending sales have seesawed since January, indicating a turning point for the market,” said Lawrence Yun, Realtors’ chief economist. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.”

Prices are high because inventory has been so low. But that is starting to change. The number of newly listed homes in June rose 5.5% compared with June 2020, according to Realtor.com.

https://www.cnbc.com/2021/07/29/pending-home-sales-drop-in-june-.html

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I am a realtor in North Jersey and there is no slow down in this area what so ever.  We still have homes coming on the market ND selling over asking price with multiple offers in less than a weeks time.  The closer you are to NYC and train access the less affected you are by these little trends.  Not to mention inventory is still extremely low, and sales normally slow down this time of years its cyclical.  

 

Those pre foreclosure reports are also inflated because of someone forgets to send in their payment on time they get put on the list it's not entirely accurate.  

 

 

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1 hour ago, gtedesco said:

I am a realtor in North Jersey and there is no slow down in this area what so ever. 

Yep, thats what I see. Morris cty. lots of under contract, pending and sold yard signs. 

Even less desirable properties on busy roads that were on the market and didn't sell pre-covid.

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13 minutes ago, silverado427 said:

My town has decided to reevaluate property taxes, #$%^&

I just got my new bill last week, and guess what, another jump, what a surprise... even without a reassessment. I expect that next.

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3 hours ago, Sniper said:

I just got my new bill last week, and guess what, another jump, what a surprise... even without a reassessment. I expect that next.

Ouch.  I will be reluctantly ready for the next tax increase.  The last one added $1800 for the year.

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Just got our quote for moving to Texas. Not as bad as I had planned on. 
 

Prices drop a little in November, maybe we will be able to hold out closing a little.
 

Pics getting taken Monday. 

25 days until the house goes live. 
 

Getting excited. 

 

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