Subnostr

I know real estate isn’t a popular topic round here but I’ve been thinking about the Fed’s proposed rate cuts in 2024 and how it’ll affect US real estate.

Supply is extremely constrained right now bc most home “owners” bought or refied at historically low rates (2.65-3%) so it makes absolutely no sense for them to sell and have to re-enter the market at 7-8%.

There are still buyers at current rates however, substantially fewer than when rates were half their current cost.

If the Fed lowers rates even by 750 bps in 2024 I predict it will flush a lot of people out of their cash holdings in money market funds (≈6 trillion) and into real estate. Normies want houses and are just waiting for rates to drop a little to pile in. They’re antsy and think this is the move - boomer rational.

Rates falling by .75% will NOT be enough to make holders of cheap mortgages sell though. Not even close.

I predict there will be substantial additional buy pressure in real estate as rates fall slightly with no increase in sell pressure.

I predict a squeeze in real estate in 2024-2025. Prices in major markets are going to be bid up massively. Probably close to their ATH’s in short order.

That’s my thesis. Thank you for coming to my ted talk. I will remain humble and stack sats. But I’m building houses too 😂

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Discussion

nobody 2y ago

Yes. June July will get hot

BTC_P2P 2y ago

🔥🔥🔥

techfeudalist 2y ago

I used to be a big believer in accumulating rental properties but now I have a hard time justifying any investment into real estate.

Even if I could double my capital in a year or two, I suspect I’ll do better keeping that in bitcoin.

Also i wouldn’t be willing to take on government risk. Eg California, most blue states, etc. Rent controls, etc.

The only exception I would personally make is to invest into a perfect place for a growing family, if I couldn’t otherwise rent an equivalent. I would view that as an investment into the family which i would generally value more than BTC returns.

BTC_P2P 2y ago

How this all started for me was receiving an inheritance. I wanted to buy land but didn’t have enough to buy and build after running feasibility on the project. Instead me and my brother decided to form a GC LLP when I realized how much lower the cost of production of a new home was vs market cost.

A lot of the decision was based also on learning how to develop land and build a home so that I can build skills and do a better job for cheaper on my own place eventually.

I am curious to see if I will make more building a new home vs just buying and holding Bitcoin for that duration. Probably not on the first, but I think likely on the second. But it’s about more than just gains.

Definitely not interested in rental properties either. Just building and selling new homes for profit and making a nimble little LLP that will eventually produce without my involvement if I so choose is the goal.

I look at like any other business, using capital to create more capital and building SOPs for economies of scale through time. I don’t have a fiat job and this is more lucrative and scalable than cannabis cultivation. So it’s an upgrade in more than one regard for my ability to earn.

Cash flow is important be it achieved by building houses or doing anything else. But I do think the real estate market (where I am) has a better outlook than any other sector (minus Bitcoin) due to conditions mentioned above.

techfeudalist 2y ago

That makes sense. Everyone should know how to build something. It’s great if you can also turn it into a business and later build your own place.

Hopefully you’re building in a freedom-oriented place. That’s the hard part these days. A lot of shifting sands. The great thing about construction is that it could be a skill that you can take anywhere.

Marinatin 2y ago

Having serious analysis paralysis on this front. Been circling land deals like a vulture and waiting for an adjustment for years. Seems like we’re gonna see a melt up…new highs…rate cuts keep the fictitious realesate values pumping…then everything pukes 30-50%…print 20-50T …all asset prices go up in dollar terms. Boom goes the dynamite. Timing all of this is a real cluster.

BTC_P2P 2y ago

Yeah I think real estate goes up for quite awhile personally. All my savings is in Bitcoin but I feel building houses is a slam dunk rn and well worth the outlay of working capital. Strictly building and turning them around for sale. The market even at current rates is thirsty for nice little single family homes.

Even in 9/10 of past recessions real estate has appreciated. Almost everyone I know who has been waiting for a crash has been burned bad and priced out.