13 Comments
User's avatar
Invisible Sun's avatar

In recent years the RE market has been goosed by "cash offers". My spider sense tells me those offers will persist but at a much lower bid. Why would a cash buyer set the high bid when the borrower's purchase limit has just been cut by a third? The cash buyers will become vultures.

What amazes me most this financial collapse is how stunned people are that it is happening. What did they think would happen? In 2008 the issue was too much credit without the income to support it. In 2022 we have too much credit, not enough income and we have significant supply disruption due to Covid and Russia policies. The situation in 2022 is far worse than it was in 2008 and the experts are all surprised.

Expand full comment
Mike G's avatar

Berryessa sounds exactly like Toronto and its suburban areas

Expand full comment
The Rational Walk's avatar

Omg, $1.78 million for a house in Berryessa? That used to be a very middle class part of San Jose.

Expand full comment
Rudy Havenstein's avatar

I think RE is turning, and it's about time. Price-fixing rates for over a decade has massively distorted asset prices.

Expand full comment
The Rational Walk's avatar

Mortgage rates going from under 3% to near 6% are going to have an effect

Expand full comment
Occupy the Fed Movement's avatar

It's the age-old German saying: When it comes to selling real estate, better a year too early than a few days too late...

Expand full comment
Rudy Havenstein's avatar

A real estate agent actually said this to me last weekend.

Expand full comment
Bitcoin Fortress's avatar

Real estate market hit a wall in So Cal recently. Buyers disappeared.

Expand full comment
Steve's avatar

How much mortgage debt guaranteed by Fannie Mae and Freddie Mac?

Expand full comment
Rudy Havenstein's avatar

I think in 2020 it was over half of mortgages, probably more now. Haven't looked it up. Even worse, The Fed now owns MBS in the high 2 trillions, up from zero pre- Great Depression 2, and taxpayers ultimately backstop that.

Expand full comment
Invisible Sun's avatar

"taxpayers ultimately backstop that"

Yep, but on the bright side. There is only one S&L that has failed instead of thousands...

Expand full comment
David allard's avatar

Fucking wackos. Let's cheers to the Great American Empire.

Expand full comment