Comments by "Jeffrey Deuitch" (@jeffreydeuitch2146) on "Real Estate Mindset" channel.

  1. Would employ the Gretsky approach and stop looking where the puck is now, but focus on where the puck going to be.
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  2. Do a historic search on MLS to see how long it took in the 2007-8 drop to see how long it took to drop the same%. That will give one guide. Alternatively, see what % reduction was realized when bottom hit, apply the same % drop to recent highs today, then let this guide you to an expected price per SF. However remember the property price is the combination of land value and structure value. They don't necessarily go down at same rate.
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  3. If you are early buyer in new development, make sure builder agrees to buy new tires. I am active in new home developments 5 to 7 per week. Nails and screws in tires is a way of life. Have had to have many tires fixed or replaced.
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  4. Will need some capitulation before seeing wider spread price drops. There has to be pain in holding cost combined with lost confidence and belief in the "seasonal" narrative. Then the run for the exits occurs.
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  5. Steve in Ft Myers still has not surfaced. Hopefully not a bad sign. Same for all down there.
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  6. Julian missed one thing about tax on lots and the levage. In new developments there are often bond debt payments which are special assessments and not ad valorum. In Florida these are called CDD fees (community development district). The bonds were issued to pay for the costs of development, infrastructure, etc to get the project ready to have finished lots ready for marketing and onstruction. Even if there are token value assessments for the lots, the CDDs can be several thousands of dollars for each lot regardless of whether vacant or improved. Multiply this by hundreds of lots, you will see that this can lever against the builder. In some cases, the builder will not pay the tax and allow tax certs to be issued which are satisfied upon sale. These accrue interest during the time the taxes are unpaid.
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  7. Trends change. Rentals have been big trend in last several years. Largely because of lost credit following short sales and foreclosures in last debacle then later short term Airbnb's. Although slow to change, increases in apartment complexes and SFR rentals will lead to excess inventories. Job losses in event of recession will put downward pressure. Prices per cap rate multiples will be felt in resale prices for previously rented properties. Stay tuned.
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  8. This will begin to effect resales in order to remain competitive. Builders can maintain margins for a time due to reductions in materials costs and by squeezing subs. Also most large builders have in house lending, in house insurance and title companies and can reduce site premiums and include options which are higher margin. They can offer better prices and not really affect profitability to a large extent if those services are selected. To their downside are bond debt payments which are frequently paid in property taxes. In our area they are referred to as CDD special assessments. Upon title to buyer, the buyer pays the CDDs by virtue of property tax. Yrs, the contracts can be 100 pages or more but most of it is disclosures, energy efficiency statements etc. The actual purchase agreement part is about 5 pages, but the buyer has to initial on many of the disclosures. Many of the pages are related to change orders which results when the buyers opt for additional features or options. I have reviewed around 2000 of these contracts from various builders and although each is unique, they tend to have similar structures and language. Not as complicated as you might guess, but as always, any potential buyer should go carefully over everything. And yes, they are not the standard contracts approved by realtor associations usually in combination with state bar associations.
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  9. I hope, with the timing considered, that you realize that renewing your lease was the right decision. Good work. Also, maybe delay your buying decision might best be put back a bit. Should be worth the wait. 15% downward may wind up being a falling knife. Best of luck with that.
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  10. Assessment changes are generally done by a computer model. The process is call mass appraisal. In some jurisdictions this is done on an exact day of the year. Usually only part of the total bill is advalorum. The rest are fixed fees due to special assessments or other arrangements. The actual rate can change if there is a shortfall of revenues for the local governmental budgets. Yes, that means that if assessments go down, the rate for the advalorum portion can be raised in order to generate sufficient revenue. In Florida, this is known as the roll back rate. If curious in your area, call your tax collectors office.
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  11. Also keep in mind that Federal NFIP flood insurance has relatively low coverage on structures. Haven't checked recently but limit used to be 250k and items covered is not a comprehensive as typical home owners policies.
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  12. Not sure why using MLS as an absolute measure of activity. MLS is an optional marketing vehicle. FSBO resales are also not included. One area of confusion is that the term"sold" with builders would equate to pending in MLS. There is no requirement for anyone to list in MLS. In most counties you can do a deed search on websites to see actual closed sales. This would be a much more accurate indication of market activity. Some builders do not list at all in MLS.
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  13. Just had to reference to new Case Schiller 12 month national index. Reports 11.9% or so increase. That's about 5 straight monthly declines. Of course some will confuse this with an appreciating market, but this index is widely referenced without understanding its lag time or true meaning in today's market.. Imagine the shock in a few months when it goes negative and then about next June or so when the YOY references against the May to June 2022 prices. This may really drive hysteria in the masses who don't know how to analyze it correctly. Complete reversal and will indicate very rapid depreciation rate even though the actual rate will not be as rapid. Mainstream media will definitely have some explaining to do.
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  14. Metrics can and do affect sales. However, sentiment is the most powerful market influence. Do not think it's really there yet. I remember around 2005 when every property had a halo and looked to the public like a pot of gold. Fast forward to 2010, and every property was viewed as a bloody dagger. Fast forward to 2021 and H1 2022 and it was back to pot of gold with 2005 sentiment again. What's next? No crystal ball, but other than new higher rental rates, looks pretty similar. Forget metrics, human nature and emotion is the over riding influence. Not necessarily rational.
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  15. They only had 13 branches and 175B in deposits? Must have been a whole bunch of accounts with balances well above FDIC limits. Will be educational to see how this plays out. Everyone should be watching closely.
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  16. Not quite right. Most modern developments have numerous lots available for construction contract. You contract first, then they build it. Reductions in building are due to reduced demand. I work extensively in new construction and in my area that the dominant system. They build a small proportion of spec homes so some can contract throughout the process. However, the later the stage, the less the buyer can customize options and features. The main stream media does not report correctly on this. Go out to any new home development and talk to the builders agents to see for yourself.
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  17. Are those fully built houses or are they honoring those prices for construction contracts? Would imagine that are negotiating revised service rates from their subs.
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  18. It is just amazing how the attitude toward real estate can change once capitulation occurs. Clearly remember the discussions in 09 through 12. Those who have not personally experienced this will be shocked when they see 300 DOMs, 6 figure price reductions, comments of "bring all offers" in listings etc. Doom porn? Some may suggest, but has happened in past. Feel sorry for those who have not experienced. Not there yet and no crystal ball, but human nature does have way of repeating.
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  19. I am sure CNBC next real estate feature will explain off low pending sales as result of builders not putting up enough houses! What Travis is seeing is just a small sample of what is occurring from coast to coast. Yep, not enough homes being built😀. I just cringe when I hear them say that.
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  20. The 10% figure is correct via the December Case shiller but YOY is highly misleading. That does NOT mean that property is currently on that track. If fact the same CS data shows negative for the 1 month and 3mo periods. That data is more pertinent to today. Wonder what they will say when we reach YOY for June 2023 to June 2022. That is going to shock people
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  21. I am seeing locally that some builders are selling lots to other builders who then call build different models at lower price. Obstenibly this is done to not offend buyers who purchased the original units at higher prices and therefore attempt the buffer from value drop shock.
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  22. Remember, the cost of construction in a,planned development also need to go to paying the debt involved with all the cost of developing the land, taxes infrastructure and all the things that must be done prior to building the 1st house. Often times this was paid for by a municipal bond and payments for such can be on property taxes. In Florida this is referred to as CDD fees. Once a house is sold then the new owner pays a small portion. Prior to that the builder is paying. This can a couple hundred lots in an early stage development. There is much more to the builders spread than just the spread on an individual house.
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  23. Someone leaning on Zillow? Stockholders and realtor customers?
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  24. True, but in my opinion this one has legs. Too many similarities to 2005. To ignore.
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  25. Good thought, but factor in an allowance as a contingency in the event that rents may drop precipitously in the event unemployment rises. Current and increased future rental rates are not guaranteed.
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  26. Hey Travis. How do you see dedollarization affecting finance?
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  27. Typos below. Correction: went from 10 to 15 per week to 2 to 3 currently. RFPs gone from about 20 per week to non existant presently. All this just over past few weeks. Seems to be changing RAPIDLY.
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  28. Hey Travis. Was that true about suggesting moving to Austin? Should have known better. I am well acquainted with the look! Yes, move on to next topic. Also yes, media, even major media i.e. CNBC ETC, will turn. In fact they were blamed by many in last go around for negative sentiment. They hinge on the CS YOY national index and imply that this indicates current condition. I think they know better, but that's the narrative business. Will be WTF moment when they start reporting negative CS reports. It's just soooo obvious. Grab popcorn.
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  29. Obviously the conversion from cash to treasuries create big demand and hence bid bonds up in price and hence yields dropped.
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  30. Seen this dance before. In the past it has not ended well.
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  31. One thing touched on but I really think tells the story is DOMs. This helps clarify the picture when you have sales and inventory reduced. Am seeing DOMs increased in current 3 month period for nearly every 1004MC report I prepare regardless of the neighborhood or price trend.
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  32. If prices fall ala 2007 to 10, that proportion could climb.
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  33. Where is the car storage in Minneapolis supposed to be if they don't necessitate parking spaces? Is this guest parking they refer to? Townhouse designs with garages? Maybe I heard this wrong.
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  34. Cant quite tell from the photos, but some of those look like artists mockups. When that is the case, the houses may be under construction. As such, part of the reduction can be due to down spec-ing. On an interesting note, just found out that one very large builder just sold their remaining lots to another large builder so they can exit this development. This is a large, private, walled development in premium location with high values. Not sure why, but perhaps they don't want to sell for substantially lower prices and deal with the buyers of same models over past 2 years
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  35. Takes awhile for sentiment to change. Starts with denial then starts dropping a notch at a time and media to start reporting in widespread manner. Not a rapid process. At some point the fulcrum slides and fear sets in. Just think how long it took last time from shift to bottom. Early shift seems to be more rapid this time but under the radar but evident to those who follow markets closely.
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  36. By foreclosure starts, are you referring to the filing of a Lis Pendens? That should probably be the right thing to start looking for to assess foreclosure potential changes.
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  37. Has received a bit since Monday. Typical that traders will pick up once big downturns level. Can be profitable doing this kind of trading.
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  38. Given that I am in the crosshairs of hurricane Ian, my thoughts turn to how a big strike in Tampa/St pete and surrounding areas may affect RE market in Florida moving forward. Could affect decisions of people contemplating moving to our state or those who moved here recently. Can definitely sour a previously sweet taste. Depends upon severity of damage I guess. Hope I can still write in come Thursday or so. Kind of tense right now here.
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  39. You bet. Even the ECB raised by .75 point recently.
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  40. Not sure if loans on real estate purchases have margin clauses as they do with securities, but good question. Perhaps Travis, being in the lending industry can comment. I would be interested to know as well.
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  41. Not sure but I think new Case Shiller will be out tomorrow. Yes, lags severly but is oft quoted in mainstream media. Be watching. Will be reflective of data from Nov-Dec. Yes, June 22 to Jun23 will be the big one for YOY but wont show in CS until this Sept.
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  42. Good having 3 jobs. I have 1 primary service related to new construction, but have a couple things on the drawing board intended for distressed properties. May take 6 months to a year before they become pertinent. Saw them work during the GFC. Learn from others.
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  43. You are a monster! Even working holidays. Dont burn yourself out brother. Easy to watch vids, much more difficult to create. I did RE promotional videos back in the day. Really time consuming with editing, some voice overs, cleanups in color temps etc. Was put out of that enterprise when $3 virtual tours showed up.
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  44. In re ent times in our area resales have commanded higher prices than a new build of the same model from a builder. This is presumably due to the 8 to 12 month delay for construction for the new Build. I have seen this repeatedly over the last 2 years in our area.
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  45. Be careful when walking around site and looking into camera. Lots of metal things that can get you including rebar, roofing nails, and other things. Best to be looking down or scout it before you record. You can learn the hard way about construction site hazards the hard way. Wear some thick sole boots to protect against nails. For you car nails and screws come to rest in gutters and can be in street. Have patched or replaced several tires from construction site incidents.
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  46. Yep, that's going to be one of the big catalyst but different in that you don't generally buy with borrowed money, although you can. But certainly when viewed against cap rates or cash on cash return, certainly applies.
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  47. snooker. Be interesting was the next few Case Schiller reports will be. A couple months behind but eventually will show what is happening.
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  48. I think it was a good decision to renew the lease. Just look at those historic MLS records from 2006 then 2007 then 2008 etc in any given neighborhood you like to roughly gauge the occurrences during that time. I occasionally do that in some of our island areas. If you believe that history rhymes that might help to forecast your strategy. Best of luck. Dont catch the falling knife.
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  49. Not to mention when the institutional buyers start unloading before profits disappear or in many cases to minimize losses.
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  50. Remember Travis: vacant lots in new home developments can also be considered as inventory since they are immediately available for contract for new construction.
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