On: Home Prices Fell in February for First Time in 11 ...

[JumpCrisscross]

> don’t account for home prices going down in there models so will likely get very underwater very fast

If their cash flows remain positive, that’s just an accounting curiosity. The core bet is on tourism cash flows to Airbnbs in that area exceeding the cost of financing the properties.

[frumper → JumpCrisscross]

Aren't HELOCs traditionally variable rates? If so, they'd also be betting on interest rates not hovering up that cash flow as rates increase.

[JumpCrisscross → frumper]

> they'd also be betting on interest rates not hovering up that cash flow as rates increase

Correct. Though that isn't exposure to home prices going down per se.

[kasey_junk → JumpCrisscross]

I suppose HELOCs can’t get margin called so that’s probably right.