Agency Investment and Second Home lending changes.

[Liar Loan]

Damn... I'm glad I sold my last IE rental last year, in the early days of COVID.  USC and IHO have repeatedly tried to heckle me for that, but this is going to be Armageddon for that market.  Sure, the all cash buyers will still be able to invest, but not at today's prices - the returns just aren't good enough without leverage (which wasn't the case when I bought in 2014-15, when prices were less than half of what they are today).

Meanwhile, the S&P 500 is up 66% YoY.  Where would you rather have put your money one year ago?

I think there's a strong argument to be made that the GSE's should be buying zero investor and second home loans.  What is the benefit to society of having them subsidize wealthy investors and buyers of second homes?  Shouldn't we be making home buying more affordable for those that are trying to purchase a residence, especially first-timers?  I applaud this move by the GSE's.

Just curious where LL put his sales proceeds when he sold his IE rental property in 2020, BEFORE the run-up?  Hopefully somewhere good, bc real estate might have been the best place to invest for the following 12 months. 

LL might be correct about a pending home price drop in the near/mid term, but even a broken clock is right twice a day.

Maybe it wasn't obvious from my second paragraph, but stocks.  If you have data showing that IE multi-families outperformed the massive gain in stocks, please post it.  I'd love to see it.

Currently, Riverside is #1 in the nation for rising inventory (according to Realtor.com) and tops in the nation for offers that did not face competition (according to Redfin).

 

[irvinehomeowner]

Damn... I'm glad I sold my last IE rental last year, in the early days of COVID.  USC and IHO have repeatedly tried to heckle me for that, but this is going to be Armageddon for that market. 

Really? Show me where I "heckled" you for selling your IE rental.

 

[paydawg]

Damn... I'm glad I sold my last IE rental last year, in the early days of COVID.  USC and IHO have repeatedly tried to heckle me for that, but this is going to be Armageddon for that market.  Sure, the all cash buyers will still be able to invest, but not at today's prices - the returns just aren't good enough without leverage (which wasn't the case when I bought in 2014-15, when prices were less than half of what they are today).

Meanwhile, the S&P 500 is up 66% YoY.  Where would you rather have put your money one year ago?

I think there's a strong argument to be made that the GSE's should be buying zero investor and second home loans.  What is the benefit to society of having them subsidize wealthy investors and buyers of second homes?  Shouldn't we be making home buying more affordable for those that are trying to purchase a residence, especially first-timers?  I applaud this move by the GSE's.

Just curious where LL put his sales proceeds when he sold his IE rental property in 2020, BEFORE the run-up?  Hopefully somewhere good, bc real estate might have been the best place to invest for the following 12 months. 

LL might be correct about a pending home price drop in the near/mid term, but even a broken clock is right twice a day.

Maybe it wasn't obvious from my second paragraph, but stocks.  If you have data showing that IE multi-families outperformed the massive gain in stocks, please post it.  I'd love to see it.

Currently, Riverside is #1 in the nation for rising inventory (according to Realtor.com) and tops in the nation for offers that did not face competition (according to Redfin).

Massive gain in stocks is overstated, don't you think?  I don't know details of your real estate sales or stock purchases, but at a high level, the S&P 500 is up roughly ~25% since mid-2020.  I'd venture to guess the IE is up roughly ~45% during that same span. 

I don't have access or time to provide data, so correct me if I'm wrong (maybe I am).  Maybe you're a great stock-picker or maybe you sold such a unique property way above fair market value that the situation worked best in your favor, but generally speaking, I'm not sure why you're "glad" that you sold when you did. 

 

[Liar Loan]

Damn... I'm glad I sold my last IE rental last year, in the early days of COVID.  USC and IHO have repeatedly tried to heckle me for that, but this is going to be Armageddon for that market.  Sure, the all cash buyers will still be able to invest, but not at today's prices - the returns just aren't good enough without leverage (which wasn't the case when I bought in 2014-15, when prices were less than half of what they are today).

Meanwhile, the S&P 500 is up 66% YoY.  Where would you rather have put your money one year ago?

I think there's a strong argument to be made that the GSE's should be buying zero investor and second home loans.  What is the benefit to society of having them subsidize wealthy investors and buyers of second homes?  Shouldn't we be making home buying more affordable for those that are trying to purchase a residence, especially first-timers?  I applaud this move by the GSE's.

Just curious where LL put his sales proceeds when he sold his IE rental property in 2020, BEFORE the run-up?  Hopefully somewhere good, bc real estate might have been the best place to invest for the following 12 months. 

LL might be correct about a pending home price drop in the near/mid term, but even a broken clock is right twice a day.

Maybe it wasn't obvious from my second paragraph, but stocks.  If you have data showing that IE multi-families outperformed the massive gain in stocks, please post it.  I'd love to see it.

Currently, Riverside is #1 in the nation for rising inventory (according to Realtor.com) and tops in the nation for offers that did not face competition (according to Redfin).

Massive gain in stocks is overstated, don't you think?  I don't know details of your real estate sales or stock purchases, but at a high level, the S&P 500 is up roughly ~25% since mid-2020.  I'd venture to guess the IE is up roughly ~45% during that same span. 

I don't have access or time to provide data, so correct me if I'm wrong (maybe I am).  Maybe you're a great stock-picker or maybe you sold such a unique property way above fair market value that the situation worked best in your favor, but generally speaking, I'm not sure why you're "glad" that you sold when you did.

Stocks crashed in March 2020 and using the proceeds to buy into that before they had fully recovered led to much higher gains than 25%.  SPY was up over 70% from my entry point before this recent pullback.

I sold my multi-family properties located in a relatively low-income, blue collar area just before the eviction moratorium went into place, which means the 45% gain would have been offset by monthly losses due to the inability to collect rents or evict for an extended period of time.  This is the difference between theory and real world application that maybe you are missing if you've never owned a rental.

Yes, I'm glad I avoided the headache of missed rent payments and instead made a better return in stocks with less risk.

 

[irvinehomeowner]

And that's because LL timed the coming of Covid perfectly... amirite?

 

[paydawg]

Damn... I'm glad I sold my last IE rental last year, in the early days of COVID.  USC and IHO have repeatedly tried to heckle me for that, but this is going to be Armageddon for that market.  Sure, the all cash buyers will still be able to invest, but not at today's prices - the returns just aren't good enough without leverage (which wasn't the case when I bought in 2014-15, when prices were less than half of what they are today).

Meanwhile, the S&P 500 is up 66% YoY.  Where would you rather have put your money one year ago?

I think there's a strong argument to be made that the GSE's should be buying zero investor and second home loans.  What is the benefit to society of having them subsidize wealthy investors and buyers of second homes?  Shouldn't we be making home buying more affordable for those that are trying to purchase a residence, especially first-timers?  I applaud this move by the GSE's.

Just curious where LL put his sales proceeds when he sold his IE rental property in 2020, BEFORE the run-up?  Hopefully somewhere good, bc real estate might have been the best place to invest for the following 12 months. 

LL might be correct about a pending home price drop in the near/mid term, but even a broken clock is right twice a day.

Maybe it wasn't obvious from my second paragraph, but stocks.  If you have data showing that IE multi-families outperformed the massive gain in stocks, please post it.  I'd love to see it.

Currently, Riverside is #1 in the nation for rising inventory (according to Realtor.com) and tops in the nation for offers that did not face competition (according to Redfin).

Massive gain in stocks is overstated, don't you think?  I don't know details of your real estate sales or stock purchases, but at a high level, the S&P 500 is up roughly ~25% since mid-2020.  I'd venture to guess the IE is up roughly ~45% during that same span. 

I don't have access or time to provide data, so correct me if I'm wrong (maybe I am).  Maybe you're a great stock-picker or maybe you sold such a unique property way above fair market value that the situation worked best in your favor, but generally speaking, I'm not sure why you're "glad" that you sold when you did.

Stocks crashed in March 2020 and using the proceeds to buy into that before they had fully recovered led to much higher gains than 25%.  SPY was up over 70% from my entry point before this recent pullback.

I sold my multi-family properties located in a relatively low-income, blue collar area just before the eviction moratorium went into place, which means the 45% gain would have been offset by monthly losses due to the inability to collect rents or evict for an extended period of time.  This is the difference between theory and real world application that maybe you are missing if you've never owned a rental.

Yes, I'm glad I avoided the headache of missed rent payments and instead made a better return in stocks with less risk.

I full appreciate real world application.  I just sold one rental property last month and still own another one out of state where eviction moratoriums are not so rigid. 

I'm glad that you were personally able to properly navigate the past ~24 turbulent months through luck, or savvy moves...or both.  But to give advice based on your view that real estate is overvalued back before the prices started to spike up is generally wrong.  Maybe not wrong for you and your nuanced situation, but for the run-of-the-mill TI'er....don't you agree?

 

[sleepy5136]

Damn... I'm glad I sold my last IE rental last year, in the early days of COVID.  USC and IHO have repeatedly tried to heckle me for that, but this is going to be Armageddon for that market.  Sure, the all cash buyers will still be able to invest, but not at today's prices - the returns just aren't good enough without leverage (which wasn't the case when I bought in 2014-15, when prices were less than half of what they are today).

Meanwhile, the S&P 500 is up 66% YoY.  Where would you rather have put your money one year ago?

I think there's a strong argument to be made that the GSE's should be buying zero investor and second home loans.  What is the benefit to society of having them subsidize wealthy investors and buyers of second homes?  Shouldn't we be making home buying more affordable for those that are trying to purchase a residence, especially first-timers?  I applaud this move by the GSE's.

Just curious where LL put his sales proceeds when he sold his IE rental property in 2020, BEFORE the run-up?  Hopefully somewhere good, bc real estate might have been the best place to invest for the following 12 months. 

LL might be correct about a pending home price drop in the near/mid term, but even a broken clock is right twice a day.

Maybe it wasn't obvious from my second paragraph, but stocks.  If you have data showing that IE multi-families outperformed the massive gain in stocks, please post it.  I'd love to see it.

Currently, Riverside is #1 in the nation for rising inventory (according to Realtor.com) and tops in the nation for offers that did not face competition (according to Redfin).

Massive gain in stocks is overstated, don't you think?  I don't know details of your real estate sales or stock purchases, but at a high level, the S&P 500 is up roughly ~25% since mid-2020.  I'd venture to guess the IE is up roughly ~45% during that same span. 

I don't have access or time to provide data, so correct me if I'm wrong (maybe I am).  Maybe you're a great stock-picker or maybe you sold such a unique property way above fair market value that the situation worked best in your favor, but generally speaking, I'm not sure why you're "glad" that you sold when you did.

Stocks crashed in March 2020 and using the proceeds to buy into that before they had fully recovered led to much higher gains than 25%.  SPY was up over 70% from my entry point before this recent pullback.

I sold my multi-family properties located in a relatively low-income, blue collar area just before the eviction moratorium went into place, which means the 45% gain would have been offset by monthly losses due to the inability to collect rents or evict for an extended period of time.  This is the difference between theory and real world application that maybe you are missing if you've never owned a rental.

Yes, I'm glad I avoided the headache of missed rent payments and instead made a better return in stocks with less risk.

that's assuming you went 100% in at the bottom. hindsight is always 20/20.

I remember crystal clear what happened in March 2020. Each day/week the S&P would go down 7%+. If you see those moves on a daily basis, you will be afraid to buy and question whether to buy now or later. I personally bought during that time, but it was hard to do so since it feels like you're catching a falling knife. In hindsight, it was the best thing to have happened and led me to buy my first property in OC.

That's why each time I see people freak out in the Dow thread, that is generally a good signal that fear is in the market and it's time to be greedy and not fearful.

 

[usctrojancpa]

The reality is that LL didn't perfectly time the sale of his investment properties nor did he perfectly time the bottom of the stock market.  Hopefully he sold off his stock portfolio in early Jan 2022 because most stocks are down for the year.

 

[Liar Loan]

The reality is that LL didn't perfectly time the sale of his investment properties nor did he perfectly time the bottom of the stock market.  Hopefully he sold off his stock portfolio in early Jan 2022 because most stocks are down for the year.

Nor did I ever claim to perfectly time either one... So this is a strawman on your part.

that's assuming you went 100% in at the bottom. hindsight is always 20/20.

It wasn't at the bottom.  Stocks were already in recovery and it took five months to regain the prior peak.

I'm glad that you were personally able to properly navigate the past ~24 turbulent months through luck, or savvy moves...or both.  But to give advice based on your view that real estate is overvalued back before the prices started to spike up is generally wrong.  Maybe not wrong for you and your nuanced situation, but for the run-of-the-mill TI'er....don't you agree?

Covid really did not change my investment decisions or convictions.  So you can call it luck, but all I did was stick with my existing plan.  Anybody could have made huge money in either stocks or real estate over the past two years if they didn't freeze up with panic.

I also closed on my primary residence in March 2020 and now my neighbor two doors down has an asking price 60% higher than I paid, for a smaller house, so I wasn't anti-real estate prior to "the big run up". 

It's was about managing risk.  I no longer believed IE rentals had a favorable risk:reward profile based on the high prices the properties were selling for.  I originally purchased for cashflow, but since they had more than doubled in value in five years, it seemed more prudent to book gains especially since this is a market that historically gets hammered during recessions.

The advice I gave on TI prior to "the big run up" was not to buy in Irvine starting in 2018 because sales and prices were stalling out.  My advice was buy somewhere else instead, which I did.  If the average TI'er had listened, they would have gotten more house for less money, and it would have appreciated in value as Irvine was tanking.

The Fed money printing regime has sent all assets skyrocketing since the start of covid, so yes, anybody could have bought in Irvine (or any other market in the country) and done well since 2020.  Now that the Fed has reversed course, I am against purchasing real estate because there will be pain no matter which market you buy into.

It's absolutely suicidal to be buying a home in 2022.

 

[irvinehomeowner]

I also closed on my primary residence in March 2020 and now my neighbor two doors down has an asking price 60% higher than I paid, for a smaller house, so I wasn't anti-real estate prior to "the big run up". 

I don't recall any of your posts saying "Buy now!". Just "Irvine is in for pain!".

The advice I gave on TI prior to "the big run up" was not to buy in Irvine starting in 2018 because sales and prices were stalling out.  My advice was buy somewhere else instead, which I did.  If the average TI'er had listened, they would have gotten more house for less money, and it would have appreciated in value as Irvine was tanking.

Show me this "oh so holy" post where you told people to buy somewhere else other than Irvine.

If I recall, my advice was buy what you can where you can as long as you can afford it and stay put.... didn't hear you support that.

The Fed money printing regime has sent all assets skyrocketing since the start of covid, so yes, anybody could have bought in Irvine (or any other market in the country) and done well since 2020.  Now that the Fed has reversed course, I am against purchasing real estate because there will be pain no matter which market you buy into.

It's absolutely suicidal to be buying a home in 2022.

So that is your stance now? Ok. Quoted for posterity.