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US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

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Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#41

Post by astura »

jeffbax wrote: post #33
ProfessorLayton wrote: post #20

The upcoming changes in the tax code certainly did not help the housing market: - The new SALT cap is extremely low, particularly if you own a home in the Bay Area. 10K! Mitigative solution: Stay put and keep current tax base, hampering both supply and demand (for a nicer home) - The doubled standard deduction made owning with a mortgage less attractive (But a win overall once your loan is paid off enough). - Mortgag…

This is all true, but the mortgage interest deduction should be $0, particularly in the rich cities that refuse to let enough homes get built and fix things like zoning. It's an awful distortion that's a handout to the wealthy to the penalty of renters (generally less well off)

I'm a homeowner and I think it's an absolute crime my mortgage interest is tax deductible yet rent isn't. If we believe, at a philosophical level, that interest payments should be tax deductible, ok, then make ALL interest paid tax deductible - credit cards, personal loans, auto loans, payday loans, etc.

It's shameful.

That being said, with the new tax bill, 90+% of both owners and renters will be taking the standard deduction this year. It is my opinion that's a good thing, it's my opinion the standard deduction should truly be standard. However, moving all the middle and upper middle class into taking standard deduction makes the mortgage interest deduction basically exclusively for the very wealthy.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#42

Post by [deleted] »

EvilEndures wrote: post #29
r00fus wrote: post #21

Earlier quoted context omitted.

Cant rental (ie, passive) income be used to secure additional funding? I know that was the case when I considered buying property to rent back before the 2008 crash (I ended up not doing that, luckily).

Conventional financing isn't available to heavily leveraged flippers as the loans aren't profitable. They usually use non-conventional loans with higher interest rates. Now, they could re-finance the property into a conventional rental property but none of them can afford to do it for all of their properties. Flippers tend to do 4-5 at a time, not just one.

[deleted]

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#43

Post by raincom »

r00fus wrote: post #21
seanmcdirmid wrote: post #12

Earlier quoted context omitted.

Flippers are like canaries in the mine. They are usually leveraged like crazy on short term loans, not flipping the house quickly can be fatal to them. Rental won’t let them pay off there loans when they come due in a couple of months.

Cant rental (ie, passive) income be used to secure additional funding? I know that was the case when I considered buying property to rent back before the 2008 crash (I ended up not doing that, luckily).

Yes, 75% of rent can be used. It is called "market rent", according to Fannie Mae. Remaining 25% is used for Vacancies, etc.

In California markets, rental properties are not profitable, when you consider 20% downpayment, 75% rent, etc.

There are 4 kinds of buyers in this market:

1. First home buyers: renters becoming buyers. 2. Second home buyers: thanks to the appreciation of their primary residence, people have bought second homes for "retirement nest egg", "return on equity", etc. Borrow 80% at 4.5%, expect 15% return. 3. Moving Up: same like (2), but they sell primary residences. 4. Flippers

It is kind of hard of flippers to get conventional loans; they have to use portfolio banks, banks that keep loans on their books. A bank I know of, offers 6% fixed first year, variable rate for the next five years. Flippers get these deals, after putting 20 to 30% down.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#44

Post by [deleted] »

mjevans wrote: post #38

Housing is only an 'investment' because of how expensive it inherently is. However, my opinion has been that housing /has been/ in a bubble since at least the mid 2000s (pre recession); and it didn't actually deflate (at least in the area I live in) /during/ that recession. It would really be nice if some way of fixing this bubble chasing nonsense happened. Maybe if healthcare and retirement were fully socialized thi…

[deleted]

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#45

Post by debacle »

paulie_a wrote: post #31
tompetry wrote: post #26

Earlier quoted context omitted.

To be fair, Redfin is a technology focused MLS member and agency, not just a listings aggregation app. You're entitled to your opinion if you don't think that is interesting or unique, but their offering is far more than just a website and app. Interesting data on their agent stats and comp here: https://www.redfin.com/blog/2018/01/how-much-do-redfin-agent...

I worked in that industry. It really is a pretty "meh" company. Also there is no MLS, there are a lot of them.

Though the MLS is pretty distrubuted, these days you can consider it as a single entity for the most part, though the shenanigans from the early 2000s still happen every day.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#46

Post by gt_ »

mjevans wrote: post #38

Housing is only an 'investment' because of how expensive it inherently is. However, my opinion has been that housing /has been/ in a bubble since at least the mid 2000s (pre recession); and it didn't actually deflate (at least in the area I live in) /during/ that recession. It would really be nice if some way of fixing this bubble chasing nonsense happened. Maybe if healthcare and retirement were fully socialized thi…

http://dsausa.org

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#47

Post by nostromo »

jeffbax wrote: post #33
ProfessorLayton wrote: post #20

The upcoming changes in the tax code certainly did not help the housing market: - The new SALT cap is extremely low, particularly if you own a home in the Bay Area. 10K! Mitigative solution: Stay put and keep current tax base, hampering both supply and demand (for a nicer home) - The doubled standard deduction made owning with a mortgage less attractive (But a win overall once your loan is paid off enough). - Mortgag…

This is all true, but the mortgage interest deduction should be $0, particularly in the rich cities that refuse to let enough homes get built and fix things like zoning. It's an awful distortion that's a handout to the wealthy to the penalty of renters (generally less well off)

State and local taxes should also not reduce your federal taxable income at all.

High tax states can tax themselves all they want to, but that shouldn’t reduce their federal tax burden.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#48

Post by jakelarkin »

ProfessorLayton wrote: post #20

The upcoming changes in the tax code certainly did not help the housing market: - The new SALT cap is extremely low, particularly if you own a home in the Bay Area. 10K! Mitigative solution: Stay put and keep current tax base, hampering both supply and demand (for a nicer home) - The doubled standard deduction made owning with a mortgage less attractive (But a win overall once your loan is paid off enough). - Mortgag…

last years appreciation, the lost deductions, rising rates have really stretched the limits of demand. how many households are really out there who can afford a 10k/month mortgage or 300k down payment that you need for a house in upper middle class parts of Bay Area or Seattle.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#49

Post by kevin_thibedeau »

astura wrote: post #41
jeffbax wrote: post #33

Earlier quoted context omitted.

This is all true, but the mortgage interest deduction should be $0, particularly in the rich cities that refuse to let enough homes get built and fix things like zoning. It's an awful distortion that's a handout to the wealthy to the penalty of renters (generally less well off)

I'm a homeowner and I think it's an absolute crime my mortgage interest is tax deductible yet rent isn't. If we believe, at a philosophical level, that interest payments should be tax deductible, ok, then make ALL interest paid tax deductible - credit cards, personal loans, auto loans, payday loans, etc. It's shameful. That being said, with the new tax bill, 90+% of both owners and renters will be taking the standard…

Some states do permit tax deductions for rent. Indiana, New Jersey, and possibly others.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#50

Post by ericd »

paulie_a wrote: post #30
ericd wrote: post #28

Earlier quoted context omitted.

Actually, they're very different from most others, in that they're a vertically integrated brokerage rather than just connecting you to random brokers who advertise through them a la Zillow.

I worked in the technology side of real estate for a decade, they really are nothing special. It's marketing buzz and same old thing.

What did you work on, specifically? I was the founder/CEO of one of the real estate apps that you claim they're not too different from, and I disagree.

I know there's not much that's sexy from a technical perspective about running what is effectively a tech-heavy discount brokerage at scale, but it allows them to offer a fundamentally better UX than Zulia or any of the pure leadgen sites can. And there's a huge amount of code involved in running the ops on an organization like that, which a pure search app doesn't have to write/maintain.

It's really selling them short to say their only difference is marketing.

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