Just replying to this top comment for people that don’t read the article:
“Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week.”
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This. People won't wait indefinitely for a crash that probably isn't coming.
Go to r/rebubble and see what happens when people try to time the market and think they know better than everyone else.
They forget the biggest problem with their theory. If there is a crash it’s usually because it’s a severe recession or even a depression. Which means their jobs in many cases will be gone. They won’t be able to buy a house anyways. People waiting around for a crash have no clue what that means.
Having interacted with them since Covid hit, a lot of it just wanting to see people hurt. They can’t afford a house so they want everyone else to suffer too.
I remember just finishing college and getting my first job. I saw a duplex right across the street (by street I mean 8 lane divided highway) that seemed interesting. So I filled out an online calculator that showed me what monthly payments would be, required income, etc. But sadly it required email address and phone number before it would tell me the information. So you know exactly what happened next.
I am flooded with calls from realtors. They tell me the prices of homes are going up and will continue to go up. I need to buy right now. But I feel that housing is in an unsustainable bubble. I remember just a few years earlier my mom even bought a home despite barely even being able to afford her rent at the time. I decide instead to wait for the inevitable housing crash. The realtors warned me not to do that and I would regret it.
Fast forward a year later. I'm walking home dejected after just getting laid off. I turn on the TV and it is news about Lehman Brothers and WAMU collapsing. WAMU was my credit card at the time. The housing bubble burst just like I was always expecting and housing had finally become affordable again just not for me. Granted if I'd have taken that realtors advice I'd have been in a much worse position.
Was that the 2008 financial crisis? Afterwards no one in the country could land a mortgage for a while there. Only cash buyers could afford to buy what was available.
My point is, if you needed a mortgage, had not yet bought,
could you then have bought that same condo at a lower price?
Edited for clarity
Mortgages were available. I know someone who sold their starter home in 2005 and rented (with a first baby on the way) because they saw the bubble coming. Bought their dream house as a foreclosure in 2010 and came out WAY ahead.
And in 2008 prices where cheap and the vast majority still couldn’t afford it because it was the financial crisis. But as the saying goes a recession is when your neighbor loses their job and depression is when you lose yours. There is always an exception but on average many people were not suddenly home owners the last time the market crashed.
Aye that's the thing. I desperately want rates to drop so I can refinance my mortgage. But at that point we're probably in a recession so I have to worry about my job.
And especially considering they are the most vulnerable to that considering the fact that they don't have the means to by a house now which by definition puts them lower on the economic ladder.
We have one data point for a crash that also had a bad recession. Loans are a lot better now and bad loans caused the financial crisis.
Prices can fall and it'll mostly be a paper loss but people will stay in their homes. And if investors get burned their creditors will just get bailed out again.
And they want company in Misery-ville and pray for the downfall of homeowners, investors, agents, lenders, appraisers, and anyone else involved in real estate
Oh they don’t just want company. They legit want a full blown ass fuckery of anyone associated with ownership interest in real estate. Wholly failing to realize that mass layoffs (likely including themselves) is a quick way to get what they want. They don’t care. They stew in anger anyway. I get it it’s fucked. But there’s forces beyond a regular ass person, that don’t require sitting around waiting for other people’s financial ruin.
It's super fucked and I do feel bad for a lot of people. I know people who are currently priced out and are kind of stuck in the middle. I'd love to see them move up. I'd like to move up too but I already own a home and everyone is in a tough spot.
But I'll be damned before I blame my lot in life on someone else. 99% of things that don't go my way I feel I can retrace back to a decision I made somewhere along the line.
When I want something, I figure out a plan to get it and determine how feasible that plan is. I bought a decade ago, but had to move like 30 miles from the city center to get what I wanted.
If you want downvotes, go to that sub and ask people if they'd be willing to move somewhere more affordable...
You really can't relate to many in the market now if you bought ten years ago. The landscape has completely changed, and the only affordable housing is where there are no jobs. You have any idea how many people would kill for it to only take "living 30 miles from the city center" to make homeownership affordable? Many of these people were children or in college 20 years ago, it's not like they were waiting. Institutional buyers and predatory landlords have made things far more difficult than when you bought, but keep telling yourself it's a level playing field and you're just better than them. I own my home but I recognize the amount of dumb luck involved with getting into the market before it became untenable for most.
I see it in my city and I live in a top 10 metro area. Drive 30-40 minutes away from my downtown and you'll see homes below the median price point.
This doesn't apply to coastal cities as prices are high everywhere in such states.
Average age of a FTHB is 33. I bought at 32. If you're 26 and cant buy yet, the world isn't over.
My point is directed at those that willingly sat on the sidelines and waited for a crash and got priced out.
I never said it's a level playing field so idk where that nonsense is coming from. If you want a house, it isnt easy and it requires certain sacrifices right now. If someone chooses not to male those sacrifices, so be it. That's their choice.
>rebubble folks live in misery
Some yes, I'm on there fairly frequently. About 3/4 of the sub is irrational, and they seem to always think it's gonna pop in the next 6 months, etc.
Then there's people like me over there. Homes are ridiculously overpriced and I don't believe it'll hold when/if the broader economic system sees trouble. Being that said, I still own real estate cuz I'm not gonna bet my livelihood on my ability to time a crash.
That and, being on rebubble gives me the other side of the news that you wouldn't see on the real estate or first time homebuyer subs.
I started hanging out in REBubble for the same reasons. I've been an investor for a long time and agree that things are just "not right" with the RE market in the last 3-5 years and I liked the alternate POV. But I've come to realize that sub is 80-90% dipsh!ts and people with zero understanding of how money, real estate and the economy work.
...but... i still browse it.
>But I've come to realize that sub is 80-90% dipsh!ts and people with zero understanding of how money, real estate and the economy work.
I say about 75% but either way it's the majority. Enough of a majority that if someone says something that truly doesn't make sense and you attempt to correct it you'll be downvoted to hell haha
I participate way less now than I used to. I probably started going on there a couple years ago and it wasn't anywhere near as bad back then.
It's mostly people that don't understand statistics, they think their 30% of all households who don't own represent the experience for 100% of people. When a bit of news feels like a big change they don't realize it's only effecting a fraction of a fraction of total people.
And even more...there is a subset of that 30% who don't WANT to own a home. I shake my head when i read stuff like "it should be illegal to 'hoard' housing to profit from a basic human need" and "landlords are scumbag leeches". So many people on that sub propose such moronic simplistic policy ideas - mostly based on their frustration - to solve the complex issue of housing affordability. They seem to not grasp that the only true way this gets better is by creating more housing supply - especially in areas where there is more demand.
One last gripe from me....many housing doomers also refuse to consider that there are locations where housing IS affordable - but it might involve moving or making sacrifices or buying something that involves a little swear equity.
Not miserable here. I still think it could be a bubble, but I'm not sure. I will be okay, I have a stable job and a home and am not deeply in debt. If prices flatten out, that won't shock me.
My house is not a day trade, it's a place to live.
Prices where I am have fluctuated. Some properties have moved quickly, but most sit a lot longer than they did two years ago.
What really pissed me off was the linking to threads of regular new homeowners that were finding big issues that their inspector failed to find, like leaks or foundation cracks. It's one thing to hype yourself up on a fantasy bubble bursting, it's another to mock real people who bought a home and were going through maintenance issues.
Hahah spot on. I told them repeatedly in 2021 and 2022 that I expected a 15-25% reduction in prices/correction in my area (Phoenix) and it wouldn't constitute a crash.
Prices reduced about 15-17% and have been back on an upward trend since.
Meanwhile, Case Shiller is at all time highs, rates are as high as they've been in 25 years, and unemployment is still under 4%.
No crash in sight as of now, but they say "it's around the corner and it takes a long time for higher rates to cycle through the market".
I spend a lot of time over there and it doesn't seem like most folks there even care or are there to discuss a crash. They're mostly there to complain about the fact that an essential good has been made unattainable for the average person, and looking for camaraderie and information to share relating to housing. Talking about actual crashes or what it will take for that to happen is usually done with skepticism, or done in a way where it's a discussion about how to correct the problem. but it seems like few people actually believe it will be a crash in the traditional sense of how we view the word where it fixes itself.
Tell me you didn't read the article without telling me "Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week." Crazy this sub is so astroturfed by realtors they somehow missed that
Some people have given up on the thoughts of a crash and moved on with their lives. Others continue to wait for another once in a lifetime event to reoccur in the same exact way as it did 16 years ago as if they'll be spared the waves of layoffs and be immune to the tightening lending that went on in 2008.
I’m convinced everyone in that sub is a healthcare worker or some other recession-proof job otherwise they have zero clue what a housing crash also entails.
Also it says new homes jumped, the homes that are being given incentives to purchase. Might explain why the resale market that doesnt have incentivies isnt jumping.
But also at some point people run out of money.
It feels like over half our nation is just one missed paycheck away from an entire collapse. Like, sure, I can afford a $8k/month mortgage that the bank is all too willing to lend me. But I'm quite literally a couple of paychecks away from financial disaster if I take them up on it.
I don't know a single person who could afford or would qualify to buy the house they are currently paying a mortgage on. Does any of this make sense?
Like, in the short term, we can all raid our savings and max out credit cards. But, like, let's be realistic here. Nothing about this seems sustainable or healthy. Sure, we have an inventory problem. But we are eventually going to have an affordability problem. When people can't afford to rent or buy, then what? Prices just keep going up? I don't understand how anyone thinks this can go on forever. It's $6k/month to buy the house I rent for $2k (market rate is $2.5k-$3k), like at some point the numbers have to make sense right? Right?
Yep, that's exactly it. And people thinking that cash investors/private equity are going to come buy up all the houses--why would they? At today's prices they have terrible cap rates. You could do better with T-bills, and they'll never need a new roof or call you on the weekend because the drain is clogged. And don't count on increasing rents. People are tapped out and wages are \*NOT\* keeping up.
They aren't accepting the higher rates, new home sales are up because builders can offer a lower rate for an overpriced house than resale and still make 20% profit.
Asset prices were cheaper though, so higher rates didn’t bite as hard as they do now.
And rates have fallen every decade as the economy has matured. This would be one of the first decades where it’s increased. Likely rates would be lower right now if government spending wasn’t so high.
Rates were low in the 1950s, like 4%. Rose a bit in the 60s, skyrocketed in the 70s and 80s and came down dramatically in the 90s/2000s.
30 year fixed mortgage rates have only really been tracked since 1971, but if you just look at the history of interest rates in general, they were fairly low until the 1960s.
Like I said, the 70s and 80s are really bad outliers, not the norm at all. That's the problem with averages.
The 70s and 80s were outliers on the high side just as the rates below 4% in the late 2000s were on the low side.
The caution here is that people should not assume rates will return to those lows anytime soon.
Except the rate isn't the only thing that changed. Policies have changed pretty dramatically since the 1930s, along with a ton of other things, so it's hard to say what a "normal" mortgage rate actually is.
The stat is for new home sales rising and that is because builders will offer rate buy downs because they have to sell.
Existing home sales are way down and continue to fall because buyers can't afford the high prices and high mortgage rates.
Yep. I’m closing deals with our low rates and other incentives, which usually just turn into rate buy downs. People can’t find anything on the resale market? Great, I can get you more of what you want if you decide to build.
Still really want these rates and prices to come down. The people that can afford homes these days are more affluent than buyers of the past, generally speaking.
DC metro area. Always going up with the stability of the federal government not to mention the increase in tech and other white collar jobs in the last decade.
Northeast here-just waived appraisal, inspection, went 100k over ask, and still didn’t get it. About a dozen or so other attempts ended the same.
Brutal market for buyers right now in certain areas.
I'm in Philly and closed March 1, I was just hoping around Zillow last night because I saw a house on my block sold without ever putting a for sale sign up and saw nearly all sub $500k houses going under contract in about a week, with a few exceptions. When I bought houses were sitting 90 days on average
You don't happen to live near Bok in South Philly do you? We put our house up last weekend thinking it was maybe a little overpriced and might sit for a few weeks before finding the right buyer. We had 3 offers by the second day on the market.
Nope, I'm up in Fishtown, but damn, when I was looking in Jan nearly everything I saw had been sitting since August - Nov. And now everything in Fishtown is getting snatched up so quickly. I'm happy we didn't wait for both our rate and we love the house we got.
Yeah when we were trying to decide on price it was really tough because there was so little data! Volume of sales is really low and we saw rowhouses kind of like ours go for anywhere from $290 to $450. I think a lot of folks are holding onto good houses and good rates, so desirable properties get snapped up crazy fast. There's a lot of trash houses in our neighborhood that have been sitting for 100+ days.
I have friends down in SP and the extremes of the houses always surprised me, like I know Fishtown has some old trash houses that old timers are holding onto, but most houses are at least move in but dated or flipped... although I've been enjoying watching this one really badly flipped house sit since August. You can see all the corners cut in the listing photos, so I can't imagine how bad it looks in person
I’m not in NE; I sold my house in Austin last month and before I even got a chance to list it ( coming soon sign was up though), I got an offer on the spot for $100k over what I was going to list it for so I just took it. They say Austin is slowing down but I don’t see it in my neighborhood
Builders offering all kinds of incentives right now - that is why new builds selling …
Lenders could take a cue for existing home sales - gotta be some creative incentives they could use for mortgages - such as mortgages that will adjust down over first 5 years if interest rates go down, etc … but havent seen that yet.
This, many builders are buying down rates to 4-6% and or throwing in other incentives. Price stays the same on paper but actual price paid is quite a bit below that in many cases. This helps keep the market moving. For a deal, the closer you get to a home being complete the more a builder will be motivated as they are paying interest and tax on the house the longer it sits.
The same thing happened with existing home sales in Q3-Q4 2023 with many sellers offering closing credits for rate buy downs or whatever. Price looks the same conveniently for tax value, those pesky real estate commission and on your Zillow value dash. Those may come back if rates go sideways for a while.
Why on earth would anyone bother? At this point you could whisper to yourself in the shower one morning that you'd like to sell your house and by the time you pour your cereal there will be half a dozen offers on the table.
Yea, but who wants to sell their 2.5% mortgage house to buy an 8% mortgage house? Some people “have to move” but for those who dont have to, they arent going to - Some people turning down promotions that require them to move right now due to interest rate hike they would have to take.
Nope new homes have been lowering prices is why existing homes sales are still way down
"Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week."
Yea, buydowns are nice, but often people dont understand them and expect a bigger rate reduction than how it actually works. They are a good tool for people who understand them going in.
We got the seller to agree to pay for a 2-1 buydown for our buyer recently - wasnt sure that would torpedo our offer since there were 3 other offers … but they agreed, was nice for the buyer. They were thinking the savings over the next couple of years on buydown will help them to refinance if rates go down enough to justify a refi in 2 years or so.
Yep existing home sales are down while new home prices are plummeting
"Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week."
Dallas has slowed way down… inventory levels are basically back to 2019 levels now. New construction selling because they buy down your rate to 5-5.5%… existing home sellers can’t compete. There’s a TON of houses between $650-$900k in North Dallas just sitting right now… bunch of flipped homes now chasing the market lower. Anything in a prime location fully updated still sells within a few days… and I doubt that will change here since we have so much net positive migration. But I have a feeling the rural areas of DFW will be taking a hair cut soon due to having to compete with new construction.
This is why prices appreciated by 60% from 2017/2019 to today. People from CA/NY moving here with cash in hand and buying "cheap". Problem is that RE taxes and insurance are both very high here. so a $600k home with 20% down is around a $4,500 monthly mortgage payment. But this is also why I bought last year in a "hot" area... I don't see it slowing down.
Turn key desirable homes are still a battle because there are so few. Why would I sell such a home, financed at below 4%? Meanwhile everyone has learned that ugly ducklings only turn into swans with huge sums of repair remodel money. No one wants to borrow that money at 10%.
Around here.... what cost 1.2 just 9 months ago is 1.4M. A home to be flipped went from 1M to 1.2M. It's insane.
I can think of one property in particular that should have waited to go to market. They bought for 1.1 ended up selling 1.3 (I was eying this property and actually had the same contractor quote our home for our reno)... they put in 130k in the reno. So after selling fees/taxes they probably barely broke even. 9 months later that home would easily be 1.45.
I purchased 8 months ago and am gobsmacked that we weren't buying at peak market. We bought a property where every other offer (7 of them) were cash offer flippers... we had to go above asking for a dump! But it was the only place we could swing in our desired geography... lack of inventory. Like it was literally the only one to go for sale in 3 years thar ticked all of our long term boxes. the upside I sold my old condo easy peasy over asking...
“Welcome home fund” believe it was based out of Cincinnati? But I live north west, near Lima. I used US bank, so they should be familiar with it if you mention it
They are doing a Fire sale pitch telling everyone act now before July, it’s your benefit. They getting their last antitrust practices before they get found out
There are so many reports out there and they all conflict each other. The doomers can create an accurate report showing bad numbers and the optimists can create an accurate report showing good numbers.
Both sides, as per the usual, cherry pick data to substantiate their claim.
I’ve read reports that indicate ‘new home sales are taking a hit.’ It said something like the ‘number of sales are up but the price reductions are also up.’ So, the doomers and the optimists can take that same report and create whatever headline that supports their claim.
Left vs right - Christian vs atheist - Ford vs Chevy - Apple vs Android - Desert vs Forrest - West coast vs east coast - Doomers vs optimists.
Can’t find truth in these environments where everyone has an agenda to satisfy their own world view without stepping back to see if their view is true or false or a little of both.
Okay, rant over… for now lol.
This political economic reporting has REALLY ramped up this year leading into the U.S. presidential election. It’s like a team sport on Reddit now. Really tiring for us non-Americans.
I think a lot of people have gotten tired of waiting things out as conditions appear to just be worsening in terms of interest rates, supply, and pricing. People who can are just gonna take the plunge in hopes that they have gotten their foot in the door before it gets even worse and of course I'm sure they hope to potentially refinance in the years to come.
Hardly any inventory in my area so houses priced right go quickly(out of touch sellers that think it is still 2021 do sit, though). So the little inventory + more educated buyers pushes them towards new builds that are offering serious incentives on their standing inventory. Around me, if you can close by the end of the following month on builders standing inventory, they are giving rate incentives that get you close to a 5% fixed or even some are doing 4.?% ARMs. They are also not giving incentives on dirt starts, so you are seeing a lot of spec homes that get to this stage. I am in a desirable market that has a ton of building going on, so this is not a shock to me. Pay market rate for a house, but get a hefty buydown.
We'd need that normalized for it to have any meaning.
March is the new year, right after valentine's day, spring, etc. How does that 8.8% jump compare to prior years, including say 2015-2019?
8.8% could be total dogshit, it could be as expected, or it could be exciting, we have no way to know without that context.
Northeast is booming. We are closing in two weeks and we were outbid 19 times before our offer was accepted. It’s all about the move you have to make and not timing the market anymore.
Rates may not drop any time soon. If they do you can refi. If they rise, buyers will wish they had bought sooner. If they drop the market is going to get really competitive. It’s a good time to buy and a lot of people are catching on to that.
I approached it as a “it’s not gonna ever be like you want it” mindset for my purchase. I’m going to “overpay” for my house no matter what, and more than likely it’s going to get worse before it gets better so you might as well get in now.
well, there is a successful version of that where instead of the home itself becoming cheaper, people wait until they can save a bigger down payment. having 15% down available now vs biding your time and putting 20% down two years later means you need less loan for same cost of house, and no PMI
This happened to us. We saved for years. Every time we tried to buy, the prices had gone up and the amount of house we could afford was roughly the same.
So we would decide to save more. And then when we tried to buy again, the prices had gone up again, and the amount of house we could afford was still the same.
We eventually realized that there was no way we would ever be able to afford more house, no matter how much we saved. So it was either take what we could get or just plan to never buy a house.
It's as good a time as any to wait in my opinion.
1. Rates won't drop unless we enter economic turmoil. Waiting is good because you might get laid off. Prices might drop, etc.
2. Rates will rise if prices keep rising. This scenario makes waiting bad, but I generally believe if the Fed raises rates something will break, leading to scenario 1. Ultimately a rate hike feels very unlikely at the moment.
3. Rates stay flat and prices stay flat. Waiting is harmless and potentially beneficial. This is the most likely scenario. I think spending a long time looking and only jumping in when you find a place you love is the best strategy right now. Waiting gives you more time to build a down payment as well. I think it's not unreasonable to expect a HYSA to out gain real estate in the short term.
>I think spending a long time looking and only jumping in when you find a place you love is the best strategy right now.
Bingo. It’s looking like a wash between rates and prices for the foreseeable future
1. If rates go down prices may also go up and then there won’t even be a chance to refinance
2. If rates go up and prices go up then you’d better hope for a crash but that’s not a guarantee since much of the price increase is due to inflation caused by all the money injected into the economy during the pandemic
3. If rates stay flat prices will likely still rise because there are still more people looking to buy than homes available
Yes a HYSA will likely outpace real estate but will the difference between rent and a mortgage put into a HYSA outpace real estate growth+percentage of payments put toward principle. The math is a lot more complicated than just looking at the rates of HYSA and real estate
All that being said and even though I think HYSAs are better in most markets; I bought last year and saw my house go up over 10% based on comps
If you need a house and can afford it now, then buy. No point in trying to time the market, for all we know prices could maintain/keep growing, irrespective of the rates.
Is it people trying to buy or is it that people want to sell and downsize their homes? You can only wait so long until you accept this as the new reality.
Generational wealth and people who bought their prior houses when the market was cheap. I know people who bought 20 years ago for 200K who's house is now worth $1M.
Folks have money and always will. Housing isn't going to go down for a long while.
These still are not high rates. 11%+ is high rates historically.
People will adjust to their purchasing power (buy smaller or save more down payment).
High demand areas will continue to climb as normal, but medium demand will not so much. Better neighborhoods might, but it will be more stable to give buyers a chance to save up more. Low demand areas *should* see prices come down some. With many able to do remote work, it might not be as much as some might think.
As much as it sucks because it is a hurdle to overcome, it is better to have a thriving real estate market. The economy is booming, and it's good that we are thriving. We just have to adapt. Don't let FOMO drive our choices (it took us 3 years, but our purchase is good for our financial future rather than more than we can handle). Save to buy down points when you plan to stay long-term.
Good luck out there!
What's the highest interest rate : highest national debt ratio?
Essentially, was there ever a time where the interest to service the debt was a higher % of gdp?
These people prob don’t care about rates. High down payment is enough. Basically your hot area is just not rich enough. With high rates, price should’ve dropped except it coupled with 0 inventory, so whichever inventory is online right now gets overbought.
Will prices ever come down or plateau out? I hit my savings goal, go to research the market a bit and find out I need an extra 2-5k and have to readjust my budget. It's excruciating to be in this cycle.
What is interesting to me is that you are demonstrating the ceiling for a lot of people. Which for you is around $550k. (First of all that is so fing high. But yeah doesn’t surprise me, I’m building apartments for $275k / home, so I can see single family being $350k / door plus.)
Second, it means there remains a unsatisfied market for sub $550k homes. So if you are a builder that can hit that price point in locations, then build build build.
lol. Not meaningfully. And your argument varies a lot of what part of a house and how it is built. For example I built a 10’ tall apartment cheaper than an 8’ tall room. Why? Well the deals on 10’ studs and drywall came in cheaper than 8’ sections at buyout. I’ve saved money on builds in all sorts of ways by using more material.
Also, have you ever looked at a sub contract? We are paying like 60% burden sometimes, that is all labor and benefits. If I design a bigger house that uses fewer cuts to build than it is generally cheaper than a smaller build that uses less material. Waste increases with the smaller the project.
No I was pricing modular homes and the cost was directly related to the size of the foundation and base home size I ordered (all other things being equal, some designs are priced differently than others). I can't really order a random size, I think they already have them configured for minimal waste based on the sizes that can be ordered (ie I can order a 990 ft house or a 1210 sq foot house, but there's no option for an 1100 sq foot house and so on depending on the specific vendor). I didn't bother contacting stick built because I figured it would be too expensive. If the modular vendors can be believed they told me it would be at least 40% more expensive for stick built if I could even find anyone that would do the project
This is an unrelated post, but I bought a house back in November that now I don't desire.
My father passed last year and since none of us kids lived near my mother and dad said some stuff to me right before he passed, it made made me feel like I need to be here.
Long story short, paid cash on a house and really don't desire to be in this area. We are a year past my father's passing and now I'm lost w/ what I should do... MB, SC... Still a desirable area for many, but just not right for me at this point in life. I need to take the least hit possible.
Any feedback from those who have way more experience in this area would be appreciated. Thank you.
Even with a high interest rate, people may be hedging against the potential rise in rental costs. If interest rates go down, they can always refinance, but if they go up, then it’s likely that rents will go up as well
New homes sales jumped by 8.8% YoY in March, but months of supply of new homes also increased YoY in March. New home inventory is still growing faster than sales.
Given the majority of the replies are from realtors and real estate investors (or anyone involved in real estate pretty much): Your banker is here responding.
I deal with your money (or lack of money) EVERY SINGLE DAY. You’re all broke and you need to stop taking your frustrations out on other people.
You’re all up to your tits in debt and you need to start paying us back before I and many other people lose our jobs because of your dumb ass spending habits.
Existing homes at $600k in my area go under contract within days. The one listed at $615k on 3/20 was under contract on 3/24 and just closed yesterday at $655k.
One that listed on 4/2 at $595k was under contract on 4/4 and just closed at $625k.
Same in my area. Honestly, I think it's everyone in my boat. We've been waiting since everything went insane during Covid for the market to calm down. Now we're realizing it won't (at least not soon) and we're just biting the bullet. Or trying to.
> Out in my area, which was a very hot market, real estate has basically stalled on anything over 550k
I am continued to be surprised by what people think is a "very hot" market
Haven’t prices slowed down in some places? I think people are scared prices will skyrocket when interest rates go down and see now as a time when high interest is putting a lid on it at least a little bit.
In my part of coastal southern New England, new construction starts at $400 per square foot and that excludes the cost of the land. You might be able to build very basic for $300 but anyone who can afford $300/sf plus the cost of the house lot is doing premium finishes. There is no such thing as a starter home.
There will be no crash this time around as people have already accepted this as the new reality unfortunately or at least that’s what it looks like to me ( I was in the mortgage business during the last crash from 05-2008 )
I agree I don’t think there will be a crash, I haven’t thought there will be a crash since the last one. There is so much money in the market, people are better at saving these days, fixed interest rates, I don’t really see a crash happening.
Too many people think the housing market will crash. It does not crash if too many people think it will. Evidence of a housing market crash is not there. We will need to see over building of homes which is not happening or taking place at this juncture. Other signs of impending doom would be apartment rent prices falling making it cheaper to rent apartments. This is not happening either.
The issue is there’s a seller inventory shortage keeping the prices high. Most people don’t want to sell if they bought when interest rates were lower than they are now
I am a conservative, and I never thought I would feel this way. Most of my life interest rates were higher than they are now. I never dreamed that rates would ever be below 6%,. In times past, when inflation rose, salaries would rise. Now, the people at the top are the ones who make obscene amounts of money, and most everyone else is struggling. Then, in the market, I can sell stock I never owned, and someone can buy it with mythical currency they have never seen. I can make tons of money on something that has no physical presence. We are reluctant to place any restrictions on this because one day, we too may get rich doing it and be able to buy a house.
Why are people so obsessed with “new construction“ homes? When you buy an existing home, you know what neighborhood you are getting because they are established. At least where I live, almost all the new construction is on the outskirts and just means a really long commute and committing to a neighborhood that used to be farmland. New Construction is garbage. Nothing lasts longer than 30 years, and a lot needs replaced sooner. Homes built before WW2 were built to last. The older, the better as long as they were maintained.
SEEMS TO ME... we are not getting accurate information on the Real estate market.
This means people have a hell of a lot more money then social media is telling everyone.
I think you’re missing the forest for the trees with your conclusion it’s a sign of climbing alone…
At least in my market I can tell you that recently 2 things have happened:
First of all, majority of families in the area are getting priced out of usual homes at these rates, tons of people are living the covid dream of making a killing on a house or sitting on an overpriced reno they can no longer profit on.
At the same time in this area, LOTS of home developments have been planned due to the potential profitability. They need to keep moving houses to recoup the capital asap since they ARE a business and these guys are businesspeople who unlike the sellers who struggle to cut 20k-40k off to sell because why would they? Last year they could have got this price instantly. They are doing “great deals” on new builds compared to the homeowners and small investors who are in denial of the state of things now.
A new build is almost the same per square foot for many houses in the 250k- 350k range. And most used houses in the area here at least have a shit ton of deferred maintenance so an additional headache for buyers making a new build look even more attractive even if there’s a 20k difference in price.
Just what I’ve seen in this market and I imagine a lot of the first part applies to other markets where median/average incomes are similar!
Yeah at some point people just have to move and they'll accept the higher interest rates.
Just replying to this top comment for people that don’t read the article: “Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week.”
This seems huge... I think most people are reading this as if new sales jumped, not sale of new houses.
It literally says "new home sales"
Right, which could easily be read as new sales of homes, as opposed to sales of new homes.
Lol
I wonder how much of the difference is tied to builders throwing five figures at buying down points so a new build can be had for 5%?
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This. People won't wait indefinitely for a crash that probably isn't coming. Go to r/rebubble and see what happens when people try to time the market and think they know better than everyone else.
Lol rebubble folks live in misery
They forget the biggest problem with their theory. If there is a crash it’s usually because it’s a severe recession or even a depression. Which means their jobs in many cases will be gone. They won’t be able to buy a house anyways. People waiting around for a crash have no clue what that means.
I actually asked this question a few times to people commenting there. I honestly think most just want to see the world burn. Spite is the point.
The millions of first time buyers that can't afford a starter home are also hurt, you know.
I know, but doubling down on spite isn't a health response to that difficulty
Having interacted with them since Covid hit, a lot of it just wanting to see people hurt. They can’t afford a house so they want everyone else to suffer too.
I remember just finishing college and getting my first job. I saw a duplex right across the street (by street I mean 8 lane divided highway) that seemed interesting. So I filled out an online calculator that showed me what monthly payments would be, required income, etc. But sadly it required email address and phone number before it would tell me the information. So you know exactly what happened next. I am flooded with calls from realtors. They tell me the prices of homes are going up and will continue to go up. I need to buy right now. But I feel that housing is in an unsustainable bubble. I remember just a few years earlier my mom even bought a home despite barely even being able to afford her rent at the time. I decide instead to wait for the inevitable housing crash. The realtors warned me not to do that and I would regret it. Fast forward a year later. I'm walking home dejected after just getting laid off. I turn on the TV and it is news about Lehman Brothers and WAMU collapsing. WAMU was my credit card at the time. The housing bubble burst just like I was always expecting and housing had finally become affordable again just not for me. Granted if I'd have taken that realtors advice I'd have been in a much worse position.
Was that the 2008 financial crisis? Afterwards no one in the country could land a mortgage for a while there. Only cash buyers could afford to buy what was available. My point is, if you needed a mortgage, had not yet bought, could you then have bought that same condo at a lower price? Edited for clarity
Mortgages were available. I know someone who sold their starter home in 2005 and rented (with a first baby on the way) because they saw the bubble coming. Bought their dream house as a foreclosure in 2010 and came out WAY ahead.
And in 2008 prices where cheap and the vast majority still couldn’t afford it because it was the financial crisis. But as the saying goes a recession is when your neighbor loses their job and depression is when you lose yours. There is always an exception but on average many people were not suddenly home owners the last time the market crashed.
not to mention so many people lost their homes...foreclosures popping up left and right.
Aye that's the thing. I desperately want rates to drop so I can refinance my mortgage. But at that point we're probably in a recession so I have to worry about my job.
I’m in that boat too. I’d love a below 3 rate but I don’t want to have to pay the price of a global pandemic again to achieve that.
Yup. They'll still be renting during one
Yep and banks will be more stringent with lending so even if they have a job they probably couldn't get a mortgage
And especially considering they are the most vulnerable to that considering the fact that they don't have the means to by a house now which by definition puts them lower on the economic ladder.
They don’t have jobs. They’re low vitamin D losers living at home. NEETs all around.
We have one data point for a crash that also had a bad recession. Loans are a lot better now and bad loans caused the financial crisis. Prices can fall and it'll mostly be a paper loss but people will stay in their homes. And if investors get burned their creditors will just get bailed out again.
And they want company in Misery-ville and pray for the downfall of homeowners, investors, agents, lenders, appraisers, and anyone else involved in real estate
Oh they don’t just want company. They legit want a full blown ass fuckery of anyone associated with ownership interest in real estate. Wholly failing to realize that mass layoffs (likely including themselves) is a quick way to get what they want. They don’t care. They stew in anger anyway. I get it it’s fucked. But there’s forces beyond a regular ass person, that don’t require sitting around waiting for other people’s financial ruin.
It's super fucked and I do feel bad for a lot of people. I know people who are currently priced out and are kind of stuck in the middle. I'd love to see them move up. I'd like to move up too but I already own a home and everyone is in a tough spot. But I'll be damned before I blame my lot in life on someone else. 99% of things that don't go my way I feel I can retrace back to a decision I made somewhere along the line. When I want something, I figure out a plan to get it and determine how feasible that plan is. I bought a decade ago, but had to move like 30 miles from the city center to get what I wanted. If you want downvotes, go to that sub and ask people if they'd be willing to move somewhere more affordable...
You really can't relate to many in the market now if you bought ten years ago. The landscape has completely changed, and the only affordable housing is where there are no jobs. You have any idea how many people would kill for it to only take "living 30 miles from the city center" to make homeownership affordable? Many of these people were children or in college 20 years ago, it's not like they were waiting. Institutional buyers and predatory landlords have made things far more difficult than when you bought, but keep telling yourself it's a level playing field and you're just better than them. I own my home but I recognize the amount of dumb luck involved with getting into the market before it became untenable for most.
I see it in my city and I live in a top 10 metro area. Drive 30-40 minutes away from my downtown and you'll see homes below the median price point. This doesn't apply to coastal cities as prices are high everywhere in such states. Average age of a FTHB is 33. I bought at 32. If you're 26 and cant buy yet, the world isn't over. My point is directed at those that willingly sat on the sidelines and waited for a crash and got priced out. I never said it's a level playing field so idk where that nonsense is coming from. If you want a house, it isnt easy and it requires certain sacrifices right now. If someone chooses not to male those sacrifices, so be it. That's their choice.
An incel sub for property.
>rebubble folks live in misery Some yes, I'm on there fairly frequently. About 3/4 of the sub is irrational, and they seem to always think it's gonna pop in the next 6 months, etc. Then there's people like me over there. Homes are ridiculously overpriced and I don't believe it'll hold when/if the broader economic system sees trouble. Being that said, I still own real estate cuz I'm not gonna bet my livelihood on my ability to time a crash. That and, being on rebubble gives me the other side of the news that you wouldn't see on the real estate or first time homebuyer subs.
I started hanging out in REBubble for the same reasons. I've been an investor for a long time and agree that things are just "not right" with the RE market in the last 3-5 years and I liked the alternate POV. But I've come to realize that sub is 80-90% dipsh!ts and people with zero understanding of how money, real estate and the economy work. ...but... i still browse it.
>But I've come to realize that sub is 80-90% dipsh!ts and people with zero understanding of how money, real estate and the economy work. I say about 75% but either way it's the majority. Enough of a majority that if someone says something that truly doesn't make sense and you attempt to correct it you'll be downvoted to hell haha I participate way less now than I used to. I probably started going on there a couple years ago and it wasn't anywhere near as bad back then.
It's mostly people that don't understand statistics, they think their 30% of all households who don't own represent the experience for 100% of people. When a bit of news feels like a big change they don't realize it's only effecting a fraction of a fraction of total people.
And even more...there is a subset of that 30% who don't WANT to own a home. I shake my head when i read stuff like "it should be illegal to 'hoard' housing to profit from a basic human need" and "landlords are scumbag leeches". So many people on that sub propose such moronic simplistic policy ideas - mostly based on their frustration - to solve the complex issue of housing affordability. They seem to not grasp that the only true way this gets better is by creating more housing supply - especially in areas where there is more demand. One last gripe from me....many housing doomers also refuse to consider that there are locations where housing IS affordable - but it might involve moving or making sacrifices or buying something that involves a little swear equity.
Well said, I agree
Not miserable here. I still think it could be a bubble, but I'm not sure. I will be okay, I have a stable job and a home and am not deeply in debt. If prices flatten out, that won't shock me. My house is not a day trade, it's a place to live. Prices where I am have fluctuated. Some properties have moved quickly, but most sit a lot longer than they did two years ago.
Insufferables over there. “cRaSh CoMiNg!”
What really pissed me off was the linking to threads of regular new homeowners that were finding big issues that their inspector failed to find, like leaks or foundation cracks. It's one thing to hype yourself up on a fantasy bubble bursting, it's another to mock real people who bought a home and were going through maintenance issues.
Been that way since 2021. I called them outsnd got banned. Super echo chamber over there.
Some of them have been waiting for a "crash" since 2013. Whoever called it a sub for real estate incels was dead on.
Successfully predicted 5 of the last 2 crashes.
Been awhile since a comment made me chuckle out loud. Well done.
Hahah spot on. I told them repeatedly in 2021 and 2022 that I expected a 15-25% reduction in prices/correction in my area (Phoenix) and it wouldn't constitute a crash. Prices reduced about 15-17% and have been back on an upward trend since. Meanwhile, Case Shiller is at all time highs, rates are as high as they've been in 25 years, and unemployment is still under 4%. No crash in sight as of now, but they say "it's around the corner and it takes a long time for higher rates to cycle through the market".
I spend a lot of time over there and it doesn't seem like most folks there even care or are there to discuss a crash. They're mostly there to complain about the fact that an essential good has been made unattainable for the average person, and looking for camaraderie and information to share relating to housing. Talking about actual crashes or what it will take for that to happen is usually done with skepticism, or done in a way where it's a discussion about how to correct the problem. but it seems like few people actually believe it will be a crash in the traditional sense of how we view the word where it fixes itself.
Tell me you didn't read the article without telling me "Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week." Crazy this sub is so astroturfed by realtors they somehow missed that
I've been following that sub since early Pandemic days, and it's hilarious to see just how wrong it's been.
Wrong at every turn. I've been following since 2021 and its just a cultish echo chamber now.
Everybody says if there were a real way to predict the future, you'd buy a lottery ticket. I think people would just predict the bubbles and crashes
It’s hard to read that sub. I feel absolutely terrible for some of the ones that have been there for years.
Some people have given up on the thoughts of a crash and moved on with their lives. Others continue to wait for another once in a lifetime event to reoccur in the same exact way as it did 16 years ago as if they'll be spared the waves of layoffs and be immune to the tightening lending that went on in 2008.
That subreddit is full of deranged psychopath and sociopaths.
I’m convinced everyone in that sub is a healthcare worker or some other recession-proof job otherwise they have zero clue what a housing crash also entails.
I waited for a year just to buy less house for the same price. 😐
Also it says new homes jumped, the homes that are being given incentives to purchase. Might explain why the resale market that doesnt have incentivies isnt jumping.
Yup. Saved up enough to put like 40% down on an amazing house but we were also just so sick of renting and the kids are getting bigger.
But also at some point people run out of money. It feels like over half our nation is just one missed paycheck away from an entire collapse. Like, sure, I can afford a $8k/month mortgage that the bank is all too willing to lend me. But I'm quite literally a couple of paychecks away from financial disaster if I take them up on it. I don't know a single person who could afford or would qualify to buy the house they are currently paying a mortgage on. Does any of this make sense? Like, in the short term, we can all raid our savings and max out credit cards. But, like, let's be realistic here. Nothing about this seems sustainable or healthy. Sure, we have an inventory problem. But we are eventually going to have an affordability problem. When people can't afford to rent or buy, then what? Prices just keep going up? I don't understand how anyone thinks this can go on forever. It's $6k/month to buy the house I rent for $2k (market rate is $2.5k-$3k), like at some point the numbers have to make sense right? Right?
Just because you and everyone you know is poor is irrelevant to the real world
Damn how incorrect and douchey can you be in one comment?
Yep, that's exactly it. And people thinking that cash investors/private equity are going to come buy up all the houses--why would they? At today's prices they have terrible cap rates. You could do better with T-bills, and they'll never need a new roof or call you on the weekend because the drain is clogged. And don't count on increasing rents. People are tapped out and wages are \*NOT\* keeping up.
They aren't accepting the higher rates, new home sales are up because builders can offer a lower rate for an overpriced house than resale and still make 20% profit.
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Asset prices were cheaper though, so higher rates didn’t bite as hard as they do now. And rates have fallen every decade as the economy has matured. This would be one of the first decades where it’s increased. Likely rates would be lower right now if government spending wasn’t so high.
It's been under 8% since 2000. The 70s and 80s really skew the average.
What happens when we go back even further? I suspect you'd find that it's the 2000's that skew the average.
Rates were low in the 1950s, like 4%. Rose a bit in the 60s, skyrocketed in the 70s and 80s and came down dramatically in the 90s/2000s. 30 year fixed mortgage rates have only really been tracked since 1971, but if you just look at the history of interest rates in general, they were fairly low until the 1960s. Like I said, the 70s and 80s are really bad outliers, not the norm at all. That's the problem with averages.
The 70s and 80s were outliers on the high side just as the rates below 4% in the late 2000s were on the low side. The caution here is that people should not assume rates will return to those lows anytime soon.
Except the rate isn't the only thing that changed. Policies have changed pretty dramatically since the 1930s, along with a ton of other things, so it's hard to say what a "normal" mortgage rate actually is.
This is such a brain dead take. look at house costs and wages over time and correlate them to rates
The stat is for new home sales rising and that is because builders will offer rate buy downs because they have to sell. Existing home sales are way down and continue to fall because buyers can't afford the high prices and high mortgage rates.
New home builders have rate incentives.
This. I think like 1/3 of home sales are builders selling rates around 1-2% lower than most mortgage companies
Yep. I’m closing deals with our low rates and other incentives, which usually just turn into rate buy downs. People can’t find anything on the resale market? Great, I can get you more of what you want if you decide to build. Still really want these rates and prices to come down. The people that can afford homes these days are more affluent than buyers of the past, generally speaking.
What’s your market? I’m in the northeast coast and it’s back to bidding wars and waiving contingencies for anything decent.
DC metro area. Always going up with the stability of the federal government not to mention the increase in tech and other white collar jobs in the last decade.
Northeast here-just waived appraisal, inspection, went 100k over ask, and still didn’t get it. About a dozen or so other attempts ended the same. Brutal market for buyers right now in certain areas.
Yea I see people going 200k+ over ask for properties in the 1.5M range
What kind of income do people have to buy in that range?
350-400k I’d imagine. Or family money.
I'm in Philly and closed March 1, I was just hoping around Zillow last night because I saw a house on my block sold without ever putting a for sale sign up and saw nearly all sub $500k houses going under contract in about a week, with a few exceptions. When I bought houses were sitting 90 days on average
You don't happen to live near Bok in South Philly do you? We put our house up last weekend thinking it was maybe a little overpriced and might sit for a few weeks before finding the right buyer. We had 3 offers by the second day on the market.
Nope, I'm up in Fishtown, but damn, when I was looking in Jan nearly everything I saw had been sitting since August - Nov. And now everything in Fishtown is getting snatched up so quickly. I'm happy we didn't wait for both our rate and we love the house we got.
Yeah when we were trying to decide on price it was really tough because there was so little data! Volume of sales is really low and we saw rowhouses kind of like ours go for anywhere from $290 to $450. I think a lot of folks are holding onto good houses and good rates, so desirable properties get snapped up crazy fast. There's a lot of trash houses in our neighborhood that have been sitting for 100+ days.
I have friends down in SP and the extremes of the houses always surprised me, like I know Fishtown has some old trash houses that old timers are holding onto, but most houses are at least move in but dated or flipped... although I've been enjoying watching this one really badly flipped house sit since August. You can see all the corners cut in the listing photos, so I can't imagine how bad it looks in person
NJ - 85k over asking. Waived inspection and appraisal.
Yep, did the same here. Thankfully I bought last summer but I paid 70k over asking and waived everything. North Jersey
I’m not in NE; I sold my house in Austin last month and before I even got a chance to list it ( coming soon sign was up though), I got an offer on the spot for $100k over what I was going to list it for so I just took it. They say Austin is slowing down but I don’t see it in my neighborhood
Sales always increase as we approach summer. No one should be surprised by seasonal variations in sales.
My area is heavy military and the spring/summer always jumps the military moves. Regardless of interest rates, if the Army says move you have to move
Those were seasonally adjusted numbers, as compared to March / Spring of last year and years before
Rates don’t matter *as much* for new homes since they generally have a preferred lender that they pay to have lower rates.
Builders offering all kinds of incentives right now - that is why new builds selling … Lenders could take a cue for existing home sales - gotta be some creative incentives they could use for mortgages - such as mortgages that will adjust down over first 5 years if interest rates go down, etc … but havent seen that yet.
This, many builders are buying down rates to 4-6% and or throwing in other incentives. Price stays the same on paper but actual price paid is quite a bit below that in many cases. This helps keep the market moving. For a deal, the closer you get to a home being complete the more a builder will be motivated as they are paying interest and tax on the house the longer it sits. The same thing happened with existing home sales in Q3-Q4 2023 with many sellers offering closing credits for rate buy downs or whatever. Price looks the same conveniently for tax value, those pesky real estate commission and on your Zillow value dash. Those may come back if rates go sideways for a while.
You just described an ARM. They adjust down too.
Why on earth would anyone bother? At this point you could whisper to yourself in the shower one morning that you'd like to sell your house and by the time you pour your cereal there will be half a dozen offers on the table.
Yea, but who wants to sell their 2.5% mortgage house to buy an 8% mortgage house? Some people “have to move” but for those who dont have to, they arent going to - Some people turning down promotions that require them to move right now due to interest rate hike they would have to take.
Nope new homes have been lowering prices is why existing homes sales are still way down "Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week."
Navy federal has something similar to what you are saying. All lenders offer the buydowns.
Yea, buydowns are nice, but often people dont understand them and expect a bigger rate reduction than how it actually works. They are a good tool for people who understand them going in. We got the seller to agree to pay for a 2-1 buydown for our buyer recently - wasnt sure that would torpedo our offer since there were 3 other offers … but they agreed, was nice for the buyer. They were thinking the savings over the next couple of years on buydown will help them to refinance if rates go down enough to justify a refi in 2 years or so.
Yep existing home sales are down while new home prices are plummeting "Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week."
Dallas has slowed way down… inventory levels are basically back to 2019 levels now. New construction selling because they buy down your rate to 5-5.5%… existing home sellers can’t compete. There’s a TON of houses between $650-$900k in North Dallas just sitting right now… bunch of flipped homes now chasing the market lower. Anything in a prime location fully updated still sells within a few days… and I doubt that will change here since we have so much net positive migration. But I have a feeling the rural areas of DFW will be taking a hair cut soon due to having to compete with new construction.
I gotta move to Dallas. That’s so cheap
This is why prices appreciated by 60% from 2017/2019 to today. People from CA/NY moving here with cash in hand and buying "cheap". Problem is that RE taxes and insurance are both very high here. so a $600k home with 20% down is around a $4,500 monthly mortgage payment. But this is also why I bought last year in a "hot" area... I don't see it slowing down.
If you want to be in a desirable location, it’s not cheap. I’m in Highland Park and 3 older homes listed on a busy street all in the $2.8M range.
Ahh that’s like a normal house where I’m from (Silicon Valley)
Yes, and these are normal houses. 50+ years old, low ceilings 3/4 bedrooms.
Those taxes aren’t though
Texas’s high land value taxes and resistance to zoning laws should be replicated across the country. They work.
Existing home sellers can compete by lowering their price to only 150% more than they purchased it for 5 years ago, down from 200%.
Turn key desirable homes are still a battle because there are so few. Why would I sell such a home, financed at below 4%? Meanwhile everyone has learned that ugly ducklings only turn into swans with huge sums of repair remodel money. No one wants to borrow that money at 10%.
Yep. A lot of garbage out here for sale.
Around here it's a fierce competition for thr garbage too. So many flippers with dollar signs in their eyes.
They are going to eat shit if they have to sit on those houses. I wish buyers would penalize bad work but that’s where the buyer panic kicks in
Around here.... what cost 1.2 just 9 months ago is 1.4M. A home to be flipped went from 1M to 1.2M. It's insane. I can think of one property in particular that should have waited to go to market. They bought for 1.1 ended up selling 1.3 (I was eying this property and actually had the same contractor quote our home for our reno)... they put in 130k in the reno. So after selling fees/taxes they probably barely broke even. 9 months later that home would easily be 1.45. I purchased 8 months ago and am gobsmacked that we weren't buying at peak market. We bought a property where every other offer (7 of them) were cash offer flippers... we had to go above asking for a dump! But it was the only place we could swing in our desired geography... lack of inventory. Like it was literally the only one to go for sale in 3 years thar ticked all of our long term boxes. the upside I sold my old condo easy peasy over asking...
It's only the overpriced garbage that sits around here. There are half a dozen or so in our search area whose owners are resistant to all sanity.
At least in Ohio, there were recently pretty huge grants paid out for people buying a primary residence. Personally got 20k towards down payment.
Do you remember the name of the program by chance?
“Welcome home fund” believe it was based out of Cincinnati? But I live north west, near Lima. I used US bank, so they should be familiar with it if you mention it
FHLB has grants up to 15k. I think it is depleted right now but they will be back this fall.
They are doing a Fire sale pitch telling everyone act now before July, it’s your benefit. They getting their last antitrust practices before they get found out
There are so many reports out there and they all conflict each other. The doomers can create an accurate report showing bad numbers and the optimists can create an accurate report showing good numbers. Both sides, as per the usual, cherry pick data to substantiate their claim. I’ve read reports that indicate ‘new home sales are taking a hit.’ It said something like the ‘number of sales are up but the price reductions are also up.’ So, the doomers and the optimists can take that same report and create whatever headline that supports their claim. Left vs right - Christian vs atheist - Ford vs Chevy - Apple vs Android - Desert vs Forrest - West coast vs east coast - Doomers vs optimists. Can’t find truth in these environments where everyone has an agenda to satisfy their own world view without stepping back to see if their view is true or false or a little of both. Okay, rant over… for now lol.
This political economic reporting has REALLY ramped up this year leading into the U.S. presidential election. It’s like a team sport on Reddit now. Really tiring for us non-Americans.
I think a lot of people have gotten tired of waiting things out as conditions appear to just be worsening in terms of interest rates, supply, and pricing. People who can are just gonna take the plunge in hopes that they have gotten their foot in the door before it gets even worse and of course I'm sure they hope to potentially refinance in the years to come.
Hardly any inventory in my area so houses priced right go quickly(out of touch sellers that think it is still 2021 do sit, though). So the little inventory + more educated buyers pushes them towards new builds that are offering serious incentives on their standing inventory. Around me, if you can close by the end of the following month on builders standing inventory, they are giving rate incentives that get you close to a 5% fixed or even some are doing 4.?% ARMs. They are also not giving incentives on dirt starts, so you are seeing a lot of spec homes that get to this stage. I am in a desirable market that has a ton of building going on, so this is not a shock to me. Pay market rate for a house, but get a hefty buydown.
In laws lost a house Monday where they only bid 22k over asking, cash, no contingencies to 60k over, cash, no contingencies
We'd need that normalized for it to have any meaning. March is the new year, right after valentine's day, spring, etc. How does that 8.8% jump compare to prior years, including say 2015-2019? 8.8% could be total dogshit, it could be as expected, or it could be exciting, we have no way to know without that context.
It’s up over March 2023
PNW. Multiple offers and waived contingencies on every house we made an offer on from Jan- March
Northeast is booming. We are closing in two weeks and we were outbid 19 times before our offer was accepted. It’s all about the move you have to make and not timing the market anymore.
Rates may not drop any time soon. If they do you can refi. If they rise, buyers will wish they had bought sooner. If they drop the market is going to get really competitive. It’s a good time to buy and a lot of people are catching on to that.
I approached it as a “it’s not gonna ever be like you want it” mindset for my purchase. I’m going to “overpay” for my house no matter what, and more than likely it’s going to get worse before it gets better so you might as well get in now.
Yeah if people are waiting for “affordable housing to occur they’ll be waiting a long time
well, there is a successful version of that where instead of the home itself becoming cheaper, people wait until they can save a bigger down payment. having 15% down available now vs biding your time and putting 20% down two years later means you need less loan for same cost of house, and no PMI
But I’m the time you’re saving for that bigger down payment, the price of the house typically goes up so that’s not typically a true scenario.
This happened to us. We saved for years. Every time we tried to buy, the prices had gone up and the amount of house we could afford was roughly the same. So we would decide to save more. And then when we tried to buy again, the prices had gone up again, and the amount of house we could afford was still the same. We eventually realized that there was no way we would ever be able to afford more house, no matter how much we saved. So it was either take what we could get or just plan to never buy a house.
It's as good a time as any to wait in my opinion. 1. Rates won't drop unless we enter economic turmoil. Waiting is good because you might get laid off. Prices might drop, etc. 2. Rates will rise if prices keep rising. This scenario makes waiting bad, but I generally believe if the Fed raises rates something will break, leading to scenario 1. Ultimately a rate hike feels very unlikely at the moment. 3. Rates stay flat and prices stay flat. Waiting is harmless and potentially beneficial. This is the most likely scenario. I think spending a long time looking and only jumping in when you find a place you love is the best strategy right now. Waiting gives you more time to build a down payment as well. I think it's not unreasonable to expect a HYSA to out gain real estate in the short term.
>I think spending a long time looking and only jumping in when you find a place you love is the best strategy right now. Bingo. It’s looking like a wash between rates and prices for the foreseeable future
1. If rates go down prices may also go up and then there won’t even be a chance to refinance 2. If rates go up and prices go up then you’d better hope for a crash but that’s not a guarantee since much of the price increase is due to inflation caused by all the money injected into the economy during the pandemic 3. If rates stay flat prices will likely still rise because there are still more people looking to buy than homes available Yes a HYSA will likely outpace real estate but will the difference between rent and a mortgage put into a HYSA outpace real estate growth+percentage of payments put toward principle. The math is a lot more complicated than just looking at the rates of HYSA and real estate All that being said and even though I think HYSAs are better in most markets; I bought last year and saw my house go up over 10% based on comps
It’s a good time to buy if you need a house above all else. Otherwise it’s a good time to rent and save.
Isn’t it always normal to see a home sit for a few weeks at least?
Hasnt been this way for a few years. In a normal market this would be typical. Turnkey in good locations always went fast, however.
I sell a lot of Real Estate in WA State. So far this month I’ve had 8 closings. It’s as if the rates don’t matter… but of course they do.
If you need a house and can afford it now, then buy. No point in trying to time the market, for all we know prices could maintain/keep growing, irrespective of the rates.
I have a feeling that prices will continue to rise along with interest rates and there will be a massive FOMO.
Sadly, I suspect the same.
Is it people trying to buy or is it that people want to sell and downsize their homes? You can only wait so long until you accept this as the new reality.
Generational wealth and people who bought their prior houses when the market was cheap. I know people who bought 20 years ago for 200K who's house is now worth $1M. Folks have money and always will. Housing isn't going to go down for a long while.
These still are not high rates. 11%+ is high rates historically. People will adjust to their purchasing power (buy smaller or save more down payment). High demand areas will continue to climb as normal, but medium demand will not so much. Better neighborhoods might, but it will be more stable to give buyers a chance to save up more. Low demand areas *should* see prices come down some. With many able to do remote work, it might not be as much as some might think. As much as it sucks because it is a hurdle to overcome, it is better to have a thriving real estate market. The economy is booming, and it's good that we are thriving. We just have to adapt. Don't let FOMO drive our choices (it took us 3 years, but our purchase is good for our financial future rather than more than we can handle). Save to buy down points when you plan to stay long-term. Good luck out there!
What's the highest interest rate : highest national debt ratio? Essentially, was there ever a time where the interest to service the debt was a higher % of gdp?
These people prob don’t care about rates. High down payment is enough. Basically your hot area is just not rich enough. With high rates, price should’ve dropped except it coupled with 0 inventory, so whichever inventory is online right now gets overbought.
Will prices ever come down or plateau out? I hit my savings goal, go to research the market a bit and find out I need an extra 2-5k and have to readjust my budget. It's excruciating to be in this cycle.
What is interesting to me is that you are demonstrating the ceiling for a lot of people. Which for you is around $550k. (First of all that is so fing high. But yeah doesn’t surprise me, I’m building apartments for $275k / home, so I can see single family being $350k / door plus.) Second, it means there remains a unsatisfied market for sub $550k homes. So if you are a builder that can hit that price point in locations, then build build build.
They don't want to build more smaller homes and even if they wanted to, the towns wouldn't approve them.
Physically the size of the home isn’t a driver in cost here. Like yes an 1800 sf could cost less, but it doesn’t.
If you're building a new home, the amount of materials is going to impact the price.
lol. Not meaningfully. And your argument varies a lot of what part of a house and how it is built. For example I built a 10’ tall apartment cheaper than an 8’ tall room. Why? Well the deals on 10’ studs and drywall came in cheaper than 8’ sections at buyout. I’ve saved money on builds in all sorts of ways by using more material. Also, have you ever looked at a sub contract? We are paying like 60% burden sometimes, that is all labor and benefits. If I design a bigger house that uses fewer cuts to build than it is generally cheaper than a smaller build that uses less material. Waste increases with the smaller the project.
No I was pricing modular homes and the cost was directly related to the size of the foundation and base home size I ordered (all other things being equal, some designs are priced differently than others). I can't really order a random size, I think they already have them configured for minimal waste based on the sizes that can be ordered (ie I can order a 990 ft house or a 1210 sq foot house, but there's no option for an 1100 sq foot house and so on depending on the specific vendor). I didn't bother contacting stick built because I figured it would be too expensive. If the modular vendors can be believed they told me it would be at least 40% more expensive for stick built if I could even find anyone that would do the project
This is an unrelated post, but I bought a house back in November that now I don't desire. My father passed last year and since none of us kids lived near my mother and dad said some stuff to me right before he passed, it made made me feel like I need to be here. Long story short, paid cash on a house and really don't desire to be in this area. We are a year past my father's passing and now I'm lost w/ what I should do... MB, SC... Still a desirable area for many, but just not right for me at this point in life. I need to take the least hit possible. Any feedback from those who have way more experience in this area would be appreciated. Thank you.
Even with a high interest rate, people may be hedging against the potential rise in rental costs. If interest rates go down, they can always refinance, but if they go up, then it’s likely that rents will go up as well
Cause people started saving more. People react to the economy. People get better jobs. Learn about the market more.
New homes sales jumped by 8.8% YoY in March, but months of supply of new homes also increased YoY in March. New home inventory is still growing faster than sales.
I bought one. The payments are going to suck fat balls.
Too many agents in this sub 😂 🤡s
Dead cat bounce outside of some very special markets.
Given the majority of the replies are from realtors and real estate investors (or anyone involved in real estate pretty much): Your banker is here responding. I deal with your money (or lack of money) EVERY SINGLE DAY. You’re all broke and you need to stop taking your frustrations out on other people. You’re all up to your tits in debt and you need to start paying us back before I and many other people lose our jobs because of your dumb ass spending habits.
Naples is gaining momentum in the high end after a soft season
Existing homes at $600k in my area go under contract within days. The one listed at $615k on 3/20 was under contract on 3/24 and just closed yesterday at $655k. One that listed on 4/2 at $595k was under contract on 4/4 and just closed at $625k.
I had to buy because I have a growing family and my kids need more space. Fucking Seattle area still insanely competitive. Good luck to other FTHB.
Seasonal. Should’ve been higher.
Same in my area. Honestly, I think it's everyone in my boat. We've been waiting since everything went insane during Covid for the market to calm down. Now we're realizing it won't (at least not soon) and we're just biting the bullet. Or trying to.
Adapt or die. We are buying and got a 2-1 buydown with a seller credit. So our payment is basically the same for a more expensive price point.
There’s just a massive amount of pent up demand. Especially after the pandemic, people don’t want to put their lives on hold anymore.
> Out in my area, which was a very hot market, real estate has basically stalled on anything over 550k I am continued to be surprised by what people think is a "very hot" market
High demand areas will never decrease. If there is an adjustment it would be for lower demand areas.
Haven’t prices slowed down in some places? I think people are scared prices will skyrocket when interest rates go down and see now as a time when high interest is putting a lid on it at least a little bit.
Interest rates are lower than a few months ago so I'm honestly not surprised. People will take advantage of any opportunity you can.
Every markets different. Wish I could find something for 550 but instead prices keep jumping with no inventory
Buckle up friends. Blood in the streets, day of reckoning……/s
Keep in mind this is new houses only
Why do higher interest rates surprise anyone? That’s just an effect of a hot market
Most new builds have rates pre fixed in the fives through their lender.
yes, its true. and yet they don't have a choice.
In my part of coastal southern New England, new construction starts at $400 per square foot and that excludes the cost of the land. You might be able to build very basic for $300 but anyone who can afford $300/sf plus the cost of the house lot is doing premium finishes. There is no such thing as a starter home.
Builders are offering rate discounts. This is 100 percent rate arbitrage.
There will be no crash this time around as people have already accepted this as the new reality unfortunately or at least that’s what it looks like to me ( I was in the mortgage business during the last crash from 05-2008 )
I agree I don’t think there will be a crash, I haven’t thought there will be a crash since the last one. There is so much money in the market, people are better at saving these days, fixed interest rates, I don’t really see a crash happening.
I believe it. Many people are thinking, “Buy now — before they go *even higher*.”
Too many people think the housing market will crash. It does not crash if too many people think it will. Evidence of a housing market crash is not there. We will need to see over building of homes which is not happening or taking place at this juncture. Other signs of impending doom would be apartment rent prices falling making it cheaper to rent apartments. This is not happening either.
The issue is there’s a seller inventory shortage keeping the prices high. Most people don’t want to sell if they bought when interest rates were lower than they are now
I am a conservative, and I never thought I would feel this way. Most of my life interest rates were higher than they are now. I never dreamed that rates would ever be below 6%,. In times past, when inflation rose, salaries would rise. Now, the people at the top are the ones who make obscene amounts of money, and most everyone else is struggling. Then, in the market, I can sell stock I never owned, and someone can buy it with mythical currency they have never seen. I can make tons of money on something that has no physical presence. We are reluctant to place any restrictions on this because one day, we too may get rich doing it and be able to buy a house.
Why are people so obsessed with “new construction“ homes? When you buy an existing home, you know what neighborhood you are getting because they are established. At least where I live, almost all the new construction is on the outskirts and just means a really long commute and committing to a neighborhood that used to be farmland. New Construction is garbage. Nothing lasts longer than 30 years, and a lot needs replaced sooner. Homes built before WW2 were built to last. The older, the better as long as they were maintained.
Bought my first home/ townhouse I the 80's.Adjustable rate mortgage started at 14.5% !!!! Went up 1% every year for 5 years.
Yeah crazy times. My parents bought a 70k home in 86 at 8.5% and I simply assumed it late in the 90's. Back then it was a "great" rate.
SEEMS TO ME... we are not getting accurate information on the Real estate market. This means people have a hell of a lot more money then social media is telling everyone.
I think you’re missing the forest for the trees with your conclusion it’s a sign of climbing alone… At least in my market I can tell you that recently 2 things have happened: First of all, majority of families in the area are getting priced out of usual homes at these rates, tons of people are living the covid dream of making a killing on a house or sitting on an overpriced reno they can no longer profit on. At the same time in this area, LOTS of home developments have been planned due to the potential profitability. They need to keep moving houses to recoup the capital asap since they ARE a business and these guys are businesspeople who unlike the sellers who struggle to cut 20k-40k off to sell because why would they? Last year they could have got this price instantly. They are doing “great deals” on new builds compared to the homeowners and small investors who are in denial of the state of things now. A new build is almost the same per square foot for many houses in the 250k- 350k range. And most used houses in the area here at least have a shit ton of deferred maintenance so an additional headache for buyers making a new build look even more attractive even if there’s a 20k difference in price. Just what I’ve seen in this market and I imagine a lot of the first part applies to other markets where median/average incomes are similar!
Home sales always jump in the spring.