6 ms·

I think the reality will set in soon on this once the CARES bonus UI is removed (and if it is not replaced) and the PPP loans run out. Right now everyone I know

by jcomis 6y ago

I think the reality will set in soon on this once the CARES bonus UI is removed (and if it is not replaced) and the PPP loans run out. Right now everyone I know in real estate is still convinced it was just a minor blip and love to cite cherry picked stats about how a recovery is already under way. Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs.

xur17 6y ago
> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs. I've been noticing this as well (I can still find some of them on Airbnb actually). I'm currently in the market for a house, but wondering if waiting a year might be a wise move..
- ar_lan 6y ago
  I'm waiting a year, in the hopes that some 700k-range homes start popping up that aren't 100% dumpster fires.
- jcomis 6y ago
  I'm in the same boat and have decided to wait. It's really impossible to know though. Luckily I'm ok with staying in my rental for the time being.
- onlyrealcuzzo 6y ago
  Well if you think this is going to be a downturn, you should look at how other downturns in housing unfolded. Usually, house prices take a while to fall once things get bad. Usually, you start to see a lot of deals and properties selling way under asking before average listing prices drop. If we are going to get to that point, it certainly doesn't appear to have happened yet.
  - nostrademons 6y ago
    I'm starting to see this - of the 8 or so houses sold in Los Altos over the last month, one was 5% under asking and the other was 18% under asking. It's still pretty rare though. More interesting is the huge hit to the volume of sales. Mountain View was turning over about 8 houses/month before COVID, but for each of the last 2 months, only 4 houses have sold, and 5 in March. I think it'll be a while, and depend upon how the reopening goes, whether we get layoffs at major tech companies, and whether remote work becomes common.
- sushisource 6y ago
  If you're staying in the same market and you already own, then it doesn't matter much. What matters more is that your other investments are relatively outperforming the house (likely already true because of the Fed's money printer). If you don't already own, waiting for a drop might be wise, but if you're going to sell stock to do it, you might wanna do it now. I'm looking at trading up to a new place right now and that's my plan.
  - LanceH 6y ago
    If you're moving up in home value, it may be worth taking the loss on a smaller home to get a good price on a bigger on.
  - xur17 6y ago
    > if you're going to sell stock to do it, you might wanna do it now Might be a wise move, but the current interest rates make it hard to pass up a mortgage..
    - sushisource 6y ago
      Oh I'm assuming a mortgage is still involved. Buying a house purely with cash is a stupid move when the fed is handing out free money. Debt is a great tool if you use it correctly.
  - jbay808 6y ago
    Doesn't "the Fed's money printer" inflate housing just as much as other assets?
    - sushisource 6y ago
      Not without some substantial delay. The stock market and the housing market are definitely correlated, but not perfectly so.
    - orwin 6y ago
      With a lag, and it really depends on the area and how many people benefit from money printing. If the scheme is QE like in europe, the housing prices will not gain as much as the market prices in low to middle-class area.
pokstad 6y ago
> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs. Wow. Does anyone have an estimate of the cost of living increase caused by Airbnb rentals?
- thorwasdfasdf 6y ago
  specifically, it's the tourists causing the cost increase. airBnb is just the facilitator. if they weren't going to airbinb they would've gone to hotels or people renting out their apartments.
  - cameronbrown 6y ago
    Conjecture. AirBnB's are generally below market rate for hotels which brings more people in than you'd have otherwise gotten.
    - gamblor956 6y ago
      This has not been true in any major market for years, once you factor in all the fees that AirBnB doesn't disclose until you book a listing. Once fees are included, AirBnB is usually more expensive in markets like SF, LA, or NY for individual/couple listings than a comparably furnished hotel room (inclusive of fees).
      - stbtrax 6y ago
        Have you seen SF hotel rates during convention season? The most basic rooms go for $3-400. Have you tried to book a Paris hotel in summer? In my experience your statement is not true
        gamblor956 6y ago
        Have you tried to book an AirBnb during a marathon? The most basic room goes for $200/night, before you add in the "cleaning" fees or the "service fees" or the other "fees" that hotels are required by law in their original quotes.
silentsea90 6y ago
Do you know when the mortgage payment forgiveness for publicly backed mortgages runs until? I heard it was 6 months or 1 year (not sure which). Do we expect a reckoning after this ie. if the economy is still suffering then
- treis 6y ago
  It's a year. If things are still bad then it's likely to be extended longer. Especially if the Dems win the election in the fall.
  - silentsea90 6y ago
    Not as if Republicans don't want the stock market to stay as high. Both parties will push for such a resolution.
  - newhotelowner 6y ago
    SBA backed mortgage payment forgiveness is only for 6 months. Which program offers 1 years of mortgage payment forgiveness?
    - treis 6y ago
      The CARES act.
ra1n85 6y ago
Two things: 1. The consequences of having millions of unemployed people with bills to pay and no income are too much for a nation, let alone politicians in an election year. My bet is that the payments will be extended or replaced with something as the alternative is not viable. 2. WFH has already started normalizing, and will shortly become a differentiating perk offered by companies. I don't suspect that may of the people living in tech hubs would choose to continue doing so if they had the opportunity to live anywhere they wanted (of course while considering COL adjustment).
- asdff 6y ago
  Cash strapped employers in high COL areas could end up lowering costs by just hiring remote workers from low COL areas who've just been laid off.
- nitwit005 6y ago
  I wouldn't take #1 for granted. The Trump administration is still pushing ahead with the idea of limiting the ability of states to waive the work requirements of SNAP (food stamps), which seems like a bizarre thing to attempt at the moment. If you're willing to halt people's food benefits during a historic recession, almost anything seem possible.
pmiller2 6y ago
My girlfriend and I have been observing the same thing in the rental market. I also believe we’re seeing some local softness in the prices of homes, but I don’t have specific data to show it.
gffrd 6y ago
A friend saw 9 move-outs in his building last month, up from a norm of 1. All were AirBNBs.
- evancox100 6y ago
  What does that mean? The non-resident owner moved out their stuff?
  - cyorir 6y ago
    My guess is the parent poster means residents are leaving. I know people who live in an apartment in Manhattan. The only way they can afford it is by renting out a room through AirBnB whenever they can. However, the pandemic+recession means much less demand for AirBnBs in Manhattan. On top of it, they have less work because their industry has effectively shut down from the pandemic. The result is that they can't afford Manhattan because the landlord refused to reduce rent, so they'll be moving out.
- deleted 6y ago
  [deleted]
twblalock 6y ago
Looking at the real estate data, prices haven't really dropped that much. 2020 started with a historically low inventory of houses for sale nationwide. During the virus lockdowns, both supply and demand dropped so prices remained relatively stable. I don't think we are going to know the real impact on the housing market until the lockdowns end and people resume normal activities like buying and selling homes. Then we will see if the relationship between supply and demand shifts. Personally, I think that if work from home continues for a large number of people, people who have families are going to want to get out of condos and apartments and into houses where they can have dedicated office space. I wouldn't be surprised if demand shifts away from places like San Francisco toward houses in the suburbs with 4 or more bedrooms.
- qqqwerty 6y ago
  There are a few reasons why home prices will take a while to shake out (if they do at all). The CARES act mortgage forbearance is likely preventing any panic selling at the moment. And home owners have a few other tools at their disposal to delay selling like taking in sub-tenants, refinancing, etc.. So I imagine most people selling right now are doing it because they want to, not because they have to. And the real estate agents all have an incentive to keep prices high, so buyers are probably getting the usual 'this is a great time to buy' spiel. It took about 2 years for house prices to bottom in the 2008 recession. I think the big reason was that it took a while for the record number of foreclosures to work their way through the system. If we do see the housing market impacted due to COVID, I wouldn't be surprised if it took a similar amount of time. But I also think that a quick recovery could prevent or mitigate a downturn.
cynusx 6y ago
Agree, currently there's a lot of stimulus in the market and also the courts are not open so foreclosures and bankrupcies can't happen. I am actually setting up a fund to buy distressed properties, if anybody is interested just hit me up (email in profile)
dehrmann 6y ago
> CARES bonus UI is removed California UI maxes out at $450 per week. This is the same amount as 2008. $1400 per month (take out taxes) won't really cover any rent situation in the Bay Area, and definitely not a $3500 nice-but-not-amazing apartment.

by jcomis 6y ago

xur17 6y ago

> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs. I've been noticing this as well (I can still find some of them on Airbnb actually). I'm currently in the market for a house, but wondering if waiting a year might be a wise move..

ar_lan 6y ago
I'm waiting a year, in the hopes that some 700k-range homes start popping up that aren't 100% dumpster fires.
jcomis 6y ago
I'm in the same boat and have decided to wait. It's really impossible to know though. Luckily I'm ok with staying in my rental for the time being.
onlyrealcuzzo 6y ago
Well if you think this is going to be a downturn, you should look at how other downturns in housing unfolded. Usually, house prices take a while to fall once things get bad. Usually, you start to see a lot of deals and properties selling way under asking before average listing prices drop. If we are going to get to that point, it certainly doesn't appear to have happened yet.
- nostrademons 6y ago
  I'm starting to see this - of the 8 or so houses sold in Los Altos over the last month, one was 5% under asking and the other was 18% under asking. It's still pretty rare though. More interesting is the huge hit to the volume of sales. Mountain View was turning over about 8 houses/month before COVID, but for each of the last 2 months, only 4 houses have sold, and 5 in March. I think it'll be a while, and depend upon how the reopening goes, whether we get layoffs at major tech companies, and whether remote work becomes common.
sushisource 6y ago
If you're staying in the same market and you already own, then it doesn't matter much. What matters more is that your other investments are relatively outperforming the house (likely already true because of the Fed's money printer). If you don't already own, waiting for a drop might be wise, but if you're going to sell stock to do it, you might wanna do it now. I'm looking at trading up to a new place right now and that's my plan.
- LanceH 6y ago
  If you're moving up in home value, it may be worth taking the loss on a smaller home to get a good price on a bigger on.
- xur17 6y ago
  > if you're going to sell stock to do it, you might wanna do it now Might be a wise move, but the current interest rates make it hard to pass up a mortgage..
  - sushisource 6y ago
    Oh I'm assuming a mortgage is still involved. Buying a house purely with cash is a stupid move when the fed is handing out free money. Debt is a great tool if you use it correctly.
- jbay808 6y ago
  Doesn't "the Fed's money printer" inflate housing just as much as other assets?
  - sushisource 6y ago
    Not without some substantial delay. The stock market and the housing market are definitely correlated, but not perfectly so.
  - orwin 6y ago
    With a lag, and it really depends on the area and how many people benefit from money printing. If the scheme is QE like in europe, the housing prices will not gain as much as the market prices in low to middle-class area.

pokstad 6y ago

> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs. Wow. Does anyone have an estimate of the cost of living increase caused by Airbnb rentals?

thorwasdfasdf 6y ago
specifically, it's the tourists causing the cost increase. airBnb is just the facilitator. if they weren't going to airbinb they would've gone to hotels or people renting out their apartments.
- cameronbrown 6y ago
  Conjecture. AirBnB's are generally below market rate for hotels which brings more people in than you'd have otherwise gotten.
  - gamblor956 6y ago
    This has not been true in any major market for years, once you factor in all the fees that AirBnB doesn't disclose until you book a listing. Once fees are included, AirBnB is usually more expensive in markets like SF, LA, or NY for individual/couple listings than a comparably furnished hotel room (inclusive of fees).
    - stbtrax 6y ago
      Have you seen SF hotel rates during convention season? The most basic rooms go for $3-400. Have you tried to book a Paris hotel in summer? In my experience your statement is not true
      - gamblor956 6y ago
        Have you tried to book an AirBnb during a marathon? The most basic room goes for $200/night, before you add in the "cleaning" fees or the "service fees" or the other "fees" that hotels are required by law in their original quotes.

silentsea90 6y ago

Do you know when the mortgage payment forgiveness for publicly backed mortgages runs until? I heard it was 6 months or 1 year (not sure which). Do we expect a reckoning after this ie. if the economy is still suffering then

treis 6y ago
It's a year. If things are still bad then it's likely to be extended longer. Especially if the Dems win the election in the fall.
- silentsea90 6y ago
  Not as if Republicans don't want the stock market to stay as high. Both parties will push for such a resolution.
- newhotelowner 6y ago
  SBA backed mortgage payment forgiveness is only for 6 months. Which program offers 1 years of mortgage payment forgiveness?
  - treis 6y ago
    The CARES act.

ra1n85 6y ago

Two things: 1. The consequences of having millions of unemployed people with bills to pay and no income are too much for a nation, let alone politicians in an election year. My bet is that the payments will be extended or replaced with something as the alternative is not viable. 2. WFH has already started normalizing, and will shortly become a differentiating perk offered by companies. I don't suspect that may of the people living in tech hubs would choose to continue doing so if they had the opportunity to live anywhere they wanted (of course while considering COL adjustment).

asdff 6y ago
Cash strapped employers in high COL areas could end up lowering costs by just hiring remote workers from low COL areas who've just been laid off.
nitwit005 6y ago
I wouldn't take #1 for granted. The Trump administration is still pushing ahead with the idea of limiting the ability of states to waive the work requirements of SNAP (food stamps), which seems like a bizarre thing to attempt at the moment. If you're willing to halt people's food benefits during a historic recession, almost anything seem possible.

pmiller2 6y ago

My girlfriend and I have been observing the same thing in the rental market. I also believe we’re seeing some local softness in the prices of homes, but I don’t have specific data to show it.

gffrd 6y ago

A friend saw 9 move-outs in his building last month, up from a norm of 1. All were AirBNBs.

evancox100 6y ago
What does that mean? The non-resident owner moved out their stuff?
- cyorir 6y ago
  My guess is the parent poster means residents are leaving. I know people who live in an apartment in Manhattan. The only way they can afford it is by renting out a room through AirBnB whenever they can. However, the pandemic+recession means much less demand for AirBnBs in Manhattan. On top of it, they have less work because their industry has effectively shut down from the pandemic. The result is that they can't afford Manhattan because the landlord refused to reduce rent, so they'll be moving out.
deleted 6y ago
[deleted]

twblalock 6y ago

Looking at the real estate data, prices haven't really dropped that much. 2020 started with a historically low inventory of houses for sale nationwide. During the virus lockdowns, both supply and demand dropped so prices remained relatively stable. I don't think we are going to know the real impact on the housing market until the lockdowns end and people resume normal activities like buying and selling homes. Then we will see if the relationship between supply and demand shifts. Personally, I think that if work from home continues for a large number of people, people who have families are going to want to get out of condos and apartments and into houses where they can have dedicated office space. I wouldn't be surprised if demand shifts away from places like San Francisco toward houses in the suburbs with 4 or more bedrooms.

qqqwerty 6y ago
There are a few reasons why home prices will take a while to shake out (if they do at all). The CARES act mortgage forbearance is likely preventing any panic selling at the moment. And home owners have a few other tools at their disposal to delay selling like taking in sub-tenants, refinancing, etc.. So I imagine most people selling right now are doing it because they want to, not because they have to. And the real estate agents all have an incentive to keep prices high, so buyers are probably getting the usual 'this is a great time to buy' spiel. It took about 2 years for house prices to bottom in the 2008 recession. I think the big reason was that it took a while for the record number of foreclosures to work their way through the system. If we do see the housing market impacted due to COVID, I wouldn't be surprised if it took a similar amount of time. But I also think that a quick recovery could prevent or mitigate a downturn.

cynusx 6y ago

Agree, currently there's a lot of stimulus in the market and also the courts are not open so foreclosures and bankrupcies can't happen. I am actually setting up a fund to buy distressed properties, if anybody is interested just hit me up (email in profile)

dehrmann 6y ago

> CARES bonus UI is removed California UI maxes out at $450 per week. This is the same amount as 2008. $1400 per month (take out taxes) won't really cover any rent situation in the Bay Area, and definitely not a $3500 nice-but-not-amazing apartment.