Posted on 07/07/2022 5:31:18 PM PDT by vespa300
The giant sucking sound in the home loan industry grew louder Wednesday when Sprout Mortgage told employees it’s going out of business.
The company broke the news to its more than 300 staffers during a conference call Wednesday, according to HousingWire. A former employee of the Long Island-based mortgage lender told the publication that Sprout had already slashed its workforce several times.
(Excerpt) Read more at therealdeal.com ...
Skyrocketing prices and rising interest rates…
Pool of buyers shrinking… every percentage point increase shrinks the pool of potential buyers for any given property exponentially.
We’re headed for a buyer’s market.
And to think I know a couple who just built an expensive house with 5 acres of lawn, put all their money into it thinking they would sell it and retire.
They built when materials were at their very highest, even have a separate garage for a bus. I mean one the size of a Greyhound Bus.
I don’t know what they will do for retirement, tried to tell them not to put all their eggs in one basket.
That was me in 2008. I was financially ruined.
For the rich? Cuz nowadays, they are the only ones who can afford to buy one.
People are going to be shocked when they realize that real estate valuations don’t always inflate, like they have during our latest inflationary “run up” since the !930’s deflation.
Painful lessons will be learned as economic pain accelerates.
Should be 1930’s not !930’s.
Appears to be many smaller startups that entered the market during a boon. They were over leveraged and lacked the leadership and experience to survive a downturn. What’s shocking how quickly they have folded operations.
Hopefully the tax assessors will follow suit. They have been having a hay day jacking up valuations and thusly taxes.
Good point.
I’m a proponent of low taxation.(It keeps bureaucracies thin and government services at a minimum, not today, but historically)
The problem is real estate is the best investment in world history, so capital maintains its high inflationary position the longest. So government will collect the high taxation on property for quite some time.
In other words, if we get hit with a deflationary cycle like the great depression, real estate pricing capitulates after other sectors are decimated.
We’ve been here before. About 15 or so years ago. I had people knocking on my door begging us to sell for astronomical cash prices. Nope. We’re dug in
ha ha ha ha ha. Uh, valuations don't work that way. County governments aren't going to reign in spending or - god forbid - lay off employees just because the value of your property tanked and you are in financial hardship. They'll see your ass on the street first.
Local governments commit to excess spending far down the road when there is a real estate bubble. They assume the bubble related revenue stream will go on forever. If it doesn't, that's your problem.
Yeah, a fellow teacher quit to become a mortgage agent last year. I told him to enjoy his year of employment and he looked at me like I was insane.
>They’ll see your ass on the street first.
Remember all those tax depreciated properties in 2008?
No?
Commercial, however, is ripe for a gigantic implosion. The big players are going to do whatever they can to turn it into a long, slow grind down rather than a crash, but it cannot be avoided.
We’ll see. My property taxes didn’t go down.
Timing is everything.
As long as they aren’t in a hurry they are likely going to be fine, but if they need to sell and sell quickly and get stuck trying to do it in a downturn they can get hurt.
Short of something making the location of the house suddenly undesirable which is beyond there control… odds are good they will be fine if they don’t wind up in a position where they must sell quickly.
A major market downturn may mean they have to sit for years to get what they feel they need out of it.
Real estate is a fairly safe long term play, but timing always matters.
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