9 Comments

Yes I agree, but as it seems now, if mortgage rates are below 6% it gets much more affordable to buy and trade Homes. I doubt you will see negative equity in houses across the board, maybe in some markets. I think homes will rise in price 2024.

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Will always be different stories in hot vs non-hot areas but like I mentioned in the post, I think rates dropping will certainly help demand in the ST and prop prices back up but could still easily see the downtrend continue. 2024 will be an interesting one

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I would argue it’s worth making the opposite trade and go long everything related to real estate transactions, as it will be up Acroos the board comp to 2023. I’m thinking $HD $RH $FND loan originators, brokers, lenders etc. I work in commercial Real Estate, trust me when I tell you 2023 was dead, volumes were down 50% - 70%! In the last couple of weeks things are heating up, volumes are up drastically across the board. You can close today with a 5 year 5.8% rate, a 6 cap covers, that’s not bad at all.

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Yea though I think CRE problems will continue into '24 especially as maturities come due

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I agree, but those problems are more specific to the ones who own the underlying assets or loans. Especially ones that were bought in 2020-2021, and will be marked down. However the ones who make money via transactions will have a good year.

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I think your analysis can be true for existing homes, but that doesn’t mean it won’t be good as well for the builders. I think lowers rates and still a large deficit in supply will be beneficiary for both frankly. At least in the short term, I think builders can continue to rise in 2024!

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I think there really needs to be a soft landing for it to work, otherwise deterioration of a leg of the stool could easily top the whole thing over

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Astute research.

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Thank you! We'll see if anything materializes

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