CA Housing Market?

Realbadlarry said:
but for some reason... there are a chit ton of people paying CASH..... mortgage rates don't matter to them... 
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It's not what you think. Most of those "cash" offers are still being financed in the background. The borrower's pay a fee for someone to front the cash to make their offers more attractive to sellers. The cash is really only exposed for about 2 weeks while the finance is closed out and property assumed. It's the new way of purchasing property. Crazy huh? 

 
I have a large sum of cash coming soon. Hoping house prices do come down because of the rising interest rates. I’m looking to purchase 2 additional homes in the next 10 months. But I don’t think I’m the only one sitting cash heavy and that will help prop up prices. 

 
raspadoo said:
We look in Prescott 2017-2019, started looking in Saint George 2018-2020, market was changing so fast we ended buying a tad north a year ago, I was super concerned about loosing value in our home in Ca in the meantime but we just sold it to a friend off market for 100k more than it would of sold a year ago and we are staying here rent free for 6 months... Anywhere within a days drive of Ca is skyrocketing. I can leave my Ut house at 6am and have lunch with my daughter in Pasadena, I think that's the draw.

Where we bought 500K would have gotten you a nice spread a year ago. Not now.
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Yup… was a large factor! 5.5 hours to Yorba Linda.  Good thing, had to rush down last month.

 
Fireballsocal said:
While I see the negative comments and agree they have merit, I want to add some counterpoints. We saw all this in 06, the buildup to the housing crash in 08-09. The realtors all said they weren't making any more land and prices would never come back down. The house I ended up buying was worth approximately $390K in 06. I paid $165K for it 4 years later in 2010. Sure, the subprime market isn't what it used to be but there are still liar loans and seconds out there. There are still people buying way to much house that they can't afford and will lose and there will be more inventory dropping on the market at some point. There is the potential for many people to lose their jobs and ability to pay for that nice shiny new home. Consumer debt has risen to a record 15.6T at the end of 2021. 

  Interest rates will be the biggest driver in the short time I feel.  I checked today and the 30 year fixed is at 4.7%, 2 full points up from where it was last year. That's a $600 change per month on a $500K mortgage. Significant. The FED is raising fed funds rates 7 times. While some of the raises may be priced in to the current rate, I don't think a 7% or 8% 30 year rate is out of the realm of possibility. At 8%, that same 500K loan jumped up $1600 a month from 2.7%. 

  As far as institutional buyers, they need to make a return on investment. I think we will see more follow Zillows lead after the return just isn't there. Home prices have already become stretched so tight I think we will see a breaking point. I think it's already happened. This is purely speculation on my part so don't follow me for advice. There are so many variables and unknowns that anything could happen. I've gambled my nice quiet and comfortable 3 bedroom on it though, and this apartment sucks. 
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same story here.  the house i bought was well over 1 million in 07-08  guy refinanced at the top of the market, home construction stopped, he sold wood for a living, he lost his job. market went down so bad that by 2011,  no one could get a loan, i just happened to buy at the absolute lowest point after the 08 crash --  aug of 2011.  since then my house has doubled in price.  but those selling and renting--it will take 3-5 years to bottom out when the bubble pops

 
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SLIM said:
You spelled biggest mistake wrong.  That theory hasn't worked in the last 20 years !  
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has it been 20 years since the 08 crash? It worked for a lot of people who sold high and bought for pennies on the dollar under O'Bummer

 
In other countries homes are generational, it may happen here. I feel like houses in California will always be a gold mine from here on out due to all the environmental crap. Builders just can't build homes, they just nixxed a big build in Santee. 

As long as rents are the way they are nothing drastic is going to change. And what does it take for a landlord to drop their rent 6,8,1k to make renting a viable option rather than owning? Renting right now is just crazy

 
Realbadlarry said:
Smart money is cash out now, and rent until it all collapses..
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Realbadlarry said:
but for some reason... there are a chit ton of people paying CASH..... mortgage rates don't matter to them... 
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Response for both of these: I read an article a couple of months ago (since buried with new "news") that said current rent streams support $1.4M home price averages for the country and still make returns better than most mutual funds and other long term investments.  

Jtmoney714 said:
I have a large sum of cash coming soon. Hoping house prices do come down because of the rising interest rates. I’m looking to purchase 2 additional homes in the next 10 months. But I don’t think I’m the only one sitting cash heavy and that will help prop up prices. 
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Ah, me too.  Any day now, Prince Okechukwu will get his royal funds out of probate.  Just send him another $2,000 for attorney fees. 

 
My Grandparents and Parents both did well with Rental Income property, but I feel times have changed and swayed towards the only people making good on rentals are the Government funded programs and the people who live in them assisted by the same Government.

I don't think in this market I can be Stanley Roper.

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I feel that if I just had to buy property in CA, my best bet would be a Vacation home that could be Air BnB rental on the times I'm not using it. The laws around this vs Long Term residency protect me better...

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The fact that Federal and State governments...including the CDC...could make laws that prevent landlords from evicting non-paying renters and STILL be liable for their property mortgage, told me everything I needed to know to never want to be a landlord.

 
Mac said:
The fact that Federal and State governments...including the CDC...could make laws that prevent landlords from evicting non-paying renters and STILL be liable for their property mortgage, told me everything I needed to know to never want to be a landlord.
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Pacific Heights told me everything I wanted to know about it.

Here is the thing, It doesn't make two shits how much your house is worth as long as you can comfortably make the payment.

That payment will be the same payment until it's paid off. Cash out and rent and before the market rights itself you could pay more for rent then you were paying for a mortgage, and still are on the hook for 15-30 years of payments once stop renting, meanwhile me the dumb money will be only paying taxes and insurance.

 
Mac said:
The fact that Federal and State governments...including the CDC...could make laws that prevent landlords from evicting non-paying renters and STILL be liable for their property mortgage, told me everything I needed to know to never want to be a landlord.
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I have been listing and selling quite a few homes with delinquent tenants. It's really sad to see small mom and pop investors in trouble because the system allows the tenants to get away with this.  It's definitely risky these days to be a CA residential landlord that's for sure. 

 
My choice has been to not buy rental property for many reasons but mostly because I don't want any more stress in my life...at least not while working.  

Now, after our company goes public and I retire, I will most definitely consider it.  As a matter of fact, I've been buying lakefront and riverfront lots all throughout Eastern TN the past 5 months.  I have over 125 acres now.  Heh, at one point, I almost made the stupid decision of buying a near new, mint SEMA truck build for $135k.  My wife was quick to put things in perspective.  $135k for a truck that will be worth half that in 5 years or buy another 10-15acre parcel for the same price and sit back and make money.

 
I own my CA home outright and want to buy a pimp house and do a VRBO/AIRBNB, but NEVER in California.

Money for it is in the stock market 😬as I didn’t want a pile of deflating USD in the bank until we research and buy in 3/4 years. 
 

I’m not sure where.. Montana, Idaho, Tahoe, … Tennessee… 

I have way to much in the market and I really like real estate better.

Headed to VRBO in Big Bear with about 14 family members this weekend for my 50th.

Probably never sell my CA place. I’d just rent it to one of my kids down the line.

 Abc 

 
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Most of my Friends that bought rental properties for Short term rentals (VRBO and such) have already sold and got out of the game.  They had houses in Big Bear, Havasu, Nashville, St George area, Vegas.  It is a lot of work and the houses get thrashed.  The money is great at times, but inconsistent for the most part.  They were all cash buyers, so positive income was the goal, not long term investment.

I was in the slumlord game, got out about 5-6 years ago, I made some money on it but was done with renters.  You have to treat it as a job.  Maybe some day again when I am retired and pay cash for the house.

 
Don’t think I’d ever buy a home to rent in ca. My parents had a rental years ago different times with good renters and a few moments they could be a pain but nothing major. 
 

today the state considers homeowners who rent as evil and renters have too many rights that it ain’t worth it. Can evict them but it takes too long and they can destroy the house to the framing with no responsibility. 

 
77charger said:
Don’t think I’d ever buy a home to rent in ca. My parents had a rental years ago different times with good renters and a few moments they could be a pain but nothing major. 
 

today the state considers homeowners who rent as evil and renters have too many rights that it ain’t worth it. Can evict them but it takes too long and they can destroy the house to the framing with no responsibility. 
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Key now is to rent to low income immigrants, they pay their rent on time and want to be left alone.  Don't rent to low income white people, they have a tendency to want to feed off a nipple for life.  HAHA

 
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