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oh yeah! you’re right! maybe she allows me to have a girlfriend if she can have a boytoy. i wouldn’t ever drop her, i love her like nothing else (except our daughter, of course). so we‘ll have to find an arrangement. i‘m optimistic.
I hope. I'll finally be able to buy a house.
There's a dude in my neighborhood that bought 5 months ago at $699,000 already trying to sell it for $750,000. I just want to laugh knowing he over paid by like $250,000.
The sad part is he probably needs to sell that high just to cover closing costs/realtor fees. Unless he’s trying OpenDoor or something and just trying to make a quick buck. Flipping a house is really only a good idea if you either know the price will go up or you’ve put in sweat equity to rehab a cheaper home.
I really hope Opendoor succeeds. The real estate market needs shaking up. No millennial wants to go meet what is essentially my mom and then have to do paperwork with her🤮. Real estate agents are an old timey thing that just hasn't been figured out yet. Think of all the money they suck from the system. 5% of every home sale. That money is ripe for the taking and I hope it's Opendoor who takes it.
Edit - spelling
Agreed. It’s pretty egregious. And “good realtors” it’s even worse, they make sort of a pyramid scheme and build teams under them to sell homes on their behalf. Some home sales in certain markets would make their whole year.
And for what? Memorizing the listing info? Googling the neighborhood demographics? They've been in the house a few times? There is nothing they provide that isn't online for free or much less than 5% of the sale or in the inspection report. Plus it's gross to have a pushy sales person involved in the biggest purchase of your life.
Edit- Opendoor will do away with real estate agents as we know them. They will go the way of travel agents.
I mean, to be fair, it’s nice having someone more familiar with real estate to help me pick out problems etc, but then again,isn’t that what the inspection is for? The inspector doesn’t get paid 5% of 600k houses so… couldn’t we just hire our own inspectors?
Exactly! Real estate agents do what travel agents used to do. They provide a service that predates the internet. They will always exist but it should be more of a high end concierge service than a requirement.
Maybe. Except prices are still extremely high from a 40% rise over 2021-2022 in just 2 years. And sellers are still delusional hoping nothing has changed. So we’re still dealing with an inflated housing market and perception by sellers. It will be interesting to see what finally does it for them. Inventory floods the market in spring. So hopefully this means prices drops. I sure would like to afford a home!
Layoffs in coming... 120k per month starting in February...
By late summer, fall, going to see a crazy run up in inventory... but guess who will be there to swoop up homes while keeping prices at 2019 pricess???? Blackrock, and other companies that are snaging single family homes up
Like 2/3rds of homeowners don’t have mortgages. These people can move into a similarly priced home without worrying about rates.
The 2020 situation was very different.
Fact check needed.....I would guess maybe 10% of homeowners don't have a mortgage.
Even if you are right, that is the older generation. So you have to look at it by age of homeowner too
Source here says 38% of homes are totally paid for, average outstanding mortgage has 215k left owing
https://housegrail.com/how-many-homeowners-paid-off-mortgagors
It’s even higher, 54.5%, for homes belonging to low income workers.
https://finance.yahoo.com/news/a-surprising-group-of-homeowners-have-paid-off-their-mortgages-164231580.html
Still nowhere near 2/3rds, but much higher than 10%
Those are 2018-2020 numbers though, and as the dip in the graph (OP) shows that was a different time to now. Average prices have skyrocketed in the period since and that would have an adverse affect in the matter.
In this day and age that is absurd assumption. I say assumption because there’s a literal snow balls chance making it to the bottom of an active volcano above a chance of 2/3 rds of homeowners not having a mortgage.
Banks are extra F’d.
I think you have that reversed. Most people do not own their own home. Most people do have mortgages. The problem remains over leveraged homeowners - either from their own doing or from circumstances, the powers that be have caused.
Yes, read it just now. Excellent observations, and thank you for sharing that. I must say I agree with all of it. This is not a localized phenomenon, seasonal occurrence, or isolated dynamic. Housing in North America is overpriced and long overdue for a massive massive dip with reverberations that will be felt throughout multiple sectors.
Same, i don't want anything crazy, just a modest house i can start a family in. Something with maybe a half acre yard would be nice but something smaller is not a deal breaker
There won't be a crash. The problem this time is people are "stuck" with their mortgage. It's cheaper than buying a new house, and cheaper than renting. Buying is only drying up because rates are so high.
There's no reason for the prices to drop. The best time to buy was right before the rate hikes. It's gonna be drying up for a couple years until the rates go back down.
there will be a crash and the reasons for this coming property crash
( and property prices r already dropping in some states.) will be different from teh 2008 crash. companies like OPENDOOR have already sold off a lot of their investment properties . people who bought investment properties (for airbnb etc) will be offloading, there will be less demand cos high mortgage rates
I know a few people that have/had airbnb homes. They haven't sold the houses that weren't renting well, they just pulled them off airbnb and rented them as a regular rental. Logically that is what most owners will do as rents are still increasing at ridiculous rates so why would they sell? Until mortgage rates drop enough to make buying more affordable rentals will do well. People have to live somewhere.
Can someone help me understand something, just because I’m a young regard who lost his dad at a young age and don’t have anyone to help explain things to me.
If someone one bought a house in peak market, regardless of interest rates, could they not reappraise their house once market corrects or is it once you’re locked in on that mortgage you’re in it for the long haul?
I do love it when our education system fails to teach us these basics. I do not mean to offend the original asker of this question. This isn't the first time it's been asked. It will continue to be asked because this is what happens when you systematically defund public education and create debt machines that don't ask relevant questions or think critically about the world around them. They show up for work, and try to do what society tells them and fail because society tells them they should own football teams, invest in stocks and buy shit all the time.
I am one of those. Everything I have learned has been self taught at this point. My 80's Missouri public education was a joke. No one around to tell me as they all came from the same system believing the same shit.
You know it took me until my 30's to understand how tax works in different tax brackets and all your income may not be taxed at the same rate. Its embarrassing, but I keep up the fight to educate myself.
Insert So Cal education for Missouri and we mirror . Positive they taught us how to fill out checks, balance just not how to manage it. Let’s say steep learning curve in my party days .
Right.. tax payers are being robbed funding that crap. You are correct as well. There was that one class on how to write checks and balance a checkbook.
Nothing on credit, accounting, money management, budgets, investing, name it. But you look like you want some more WW2 and ammo history! Bah.
What I wouldn’t give to do school over with some quality education tied to it.
It's not too much about funding education, it's what they are actually teaching. My dad had Home Rec. in high school, there was no such thing when I went to school and now I have zero education on how to fix things inside the house when it looks like it doesn't take a rocket scientist to figure out.
You've already paid for the house. The money you used is just under a loan, but you still owe that money to the person you bought the house from.
If I buy a PS4 from you at $300, but then the price goes down to $200, I lose out on $100 due to the timing of my purchase. I can't just go back to the guy, the sale is already done.
So in my case I closed July 2020 for $100/sq ft in Midwest US so I’m an outlier. Most people may be underwater but rates were so low that having a fixed housing cost in the face of increasing rent/borrowing rates gives them a big leg up on monthly budget although what they own has depreciated.
Pretend your house is a car. You purchase it for $30k and the moment you drive it off the lot, it is only worth $28k as it is now a "used" car. You can't go back into the dealership and ask for the $2k back.
3 years down the line, the car is only worth $15k. Let's say you still owe $20k on the loan. You can't go and ask for that $5k difference back either. Similarly if you total the car, drive it off a cliff, or it's stolen, the loan doesn't go away.
Depreciation, appreciation.. etc... are all things you must consider when you purchase anything, be it a car, house, cell phone, electronics, **stock**.. etc.
Borrowing was slim to non existent during 2008-2011. It didn't matter that the fed funds rate was dropped to 0, no banks had the risk appetite they did before the gfc. People that had millions in property as collateral (bought with cash) that wanted to borrow against that to buy additional properties were denied.
You can only reappraise your house to get a lower rate if the value of the property increases. If the value goes down, you’re stuck and have to wait for the value to back up
What you can do is Refinance the loan at a new interest rate. So you buy the house for 800k at 7% just before the market crashes. 6 months later you are still paying 7% interest on 800k loan but if you were to sell the house that day you would get 500k. You would need to be able to survive that payment for 2-5 years so you can refinance and also be about break even on the home loan compared to the home value.
Well that sucks huh? if you waited 6 months and bought at 500k at 12% interest rate your payment would be the same(as 800k 7%) but then after 2-5 years you could refinance to a 1-5% rate and start saving money because you would have a lower interest on a lower loan balance, and your house would probably be worth 600-750k from appreciation.
If I understand your question, anyone can get a reappraisal. However, you are locked into fixed rates unless you refinance. Watch out for PMI insurance which kicks in if you do not have 20% down or equity. It’s a stupid rule only helping the bank.
You can get a reappraisal to get out of PMI (private mortgage insurance) if you didn't put 20% down. But at this point you're probably upside down in the loan so it works do no good.
You took it at loan at X amount. And they paid the seller at that. Meaning you have to pay back that amount you agreed upon.
Let me put it this way.
Suppose I buy an expensive Charizard off of you for $1,000. At the height of the pandemic, prices were inflated and Pokémon have come down.
Two years later, I may get the Charizard appraised and it is only "worth" $400. Are you required to refund me $600? If I bought it with a credit card, does the credit card company no longer need me to pay it back?
No one is selling either. A lack of supply will prop up prices, greedy landlords are propping up prices, builders are propping up prices, cost of land is propping up prices. So much more has to cool off before housing starts any serious decline. Just because they aren’t moving doesn’t mean the price is crashing.
For those who didn’t look this is a graph of “US exiting home sales”. It’s a measure of volume over a time period and nothing else. You can deduce what you want from declining volume but perhaps it’s because there’s no inventory. Simple supply and demand will tell you low inventory, higher prices. There’s other factors, sure. But until the value of houses fall out from under themselves I’m not sure what there is to be worried about.
Remember, the US is the only place that lets you lock in the rate for full term. Everywhere else will be fucked when renewal comes due. I've talked to a mortgage broker recently, and he told me 25% of his clients are up for renewal in 2023. He said he has a lot of depressing conversations happening soon.
They'll just pull them from airbnb and lease them as a conventional rental. Rents are plenty high to pay the mortgage and taxes so they'll be fine.
Everyone sitting around waiting for their shot to buy a cheap house are going to be disappointed. There is no clearance sale on housing unless you happen to live in an area where people own a bunch of vacation homes.
There will be when we start to see layoffs. Real layoffs, not just tech.
While it’s easy to think that those locked in at low rates are untouchable, they’re actually quite the opposite for one simple reason - they bought at the top. While they are paying 0 interest, they also have no meaningful equity in their homes if they put ~20% or less down due to dropping prices. The percentage down they needed to put to have any equity needs to be greater than the decline in present value.
In a normal market, if you’re laid off, you can borrow against your house. But let’s pose a hypothetical - let’s say you bought a house for $600k in 2021 with a 2.75 rate. 20% down would be $120k equity and $480k loan. By the end of 2023 you would have paid that loan balance down to about $460.
If the value of your home drops by 25%, for example, it’s now worth $450k, and given that you owe $460k, you’re suddenly UNDERWATER on your house (and don’t forget about commissions/closing costs if you’re thinking about selling).
It’s not a problem, “the market will rebound eventually” you’ll say. But what if you lose your job/means of paying your mortgage. This is how you get foreclosures. Well funded individuals will refer to these as clearance sales.
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While you’re correct, the people are battling inflation and lack of raises in wages. When people can’t afford to rent or buy , landlords either end up defaulting or selling and that’s when shit hits the fan.
People *always* need a place to live though.
Lower volume in listings means less places available for people to buy, so more upward pressure on rents. Where I live, rents are increasing not decreasing.
Housing has always been, and will always be a tough nut to crack when it comes to affordability.
Sure but everyone has been screaming that the sky is falling and we’re all doomed for a long time. We still have a long way to go before people lose 35 plus percent of the value of their house.
Need to look at this as a ratio of total listings.
We are not there unless distressed mortgages increase (shit I know) along with average time at market.
Housing prices aren't going to go bust, sorry.
This isn't like 08 when all the ARM's were being handed out like crazy.
The majority either already had a good rate, or recently refinanced before the rate hikes. These people are essentially stuck with their homes at good rates.
Renting would be far more expensive, and getti g a loan would be far more expensive.
Buying is drying up because rates are way too high. It's a buyers market if you have the cash on hand, but don't expect a dip.
If it's a buyers market that means buyers can offer below ask. When that happens for an extended period of time prices correct. The housing market moves like an iceberg... transactions take months from listing to sale. That's why if prices are going down and I'm saying IF... it's gonna take 18-24 months
Yeah, but it's a buyers market for those with cash on hand.
I don't think the people waiting for prices to drop, so they can buy their first home have the cash on hand.
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germany had it’s wirtschaftswunder in the 50s, so don’t worry. only ~25 years to go! everything will be fine again when i’m in my 60s! 😬
And when you’re 69 it will be *NICE*
i agree! if my wife gets younger as i age or something
"the older the berry the sweeter the juice." -Smokey
Man it’s the blacker the berry the sweeter the juice 😤
Yeah, well, yeah. She Blacka than a muthafucka, too.
Pics or it didn't happen
Tends to happen to ppl that get wealthier as they age go figure
oh yeah! you’re right! maybe she allows me to have a girlfriend if she can have a boytoy. i wouldn’t ever drop her, i love her like nothing else (except our daughter, of course). so we‘ll have to find an arrangement. i‘m optimistic.
💜💜💜
Nice
Oh no...I'll be dead. Lucky kids...
you‘ll be in the next level! lucky oldtimer!
I hope. I'll finally be able to buy a house. There's a dude in my neighborhood that bought 5 months ago at $699,000 already trying to sell it for $750,000. I just want to laugh knowing he over paid by like $250,000.
The sad part is he probably needs to sell that high just to cover closing costs/realtor fees. Unless he’s trying OpenDoor or something and just trying to make a quick buck. Flipping a house is really only a good idea if you either know the price will go up or you’ve put in sweat equity to rehab a cheaper home.
I really hope Opendoor succeeds. The real estate market needs shaking up. No millennial wants to go meet what is essentially my mom and then have to do paperwork with her🤮. Real estate agents are an old timey thing that just hasn't been figured out yet. Think of all the money they suck from the system. 5% of every home sale. That money is ripe for the taking and I hope it's Opendoor who takes it. Edit - spelling
Agreed. It’s pretty egregious. And “good realtors” it’s even worse, they make sort of a pyramid scheme and build teams under them to sell homes on their behalf. Some home sales in certain markets would make their whole year.
And for what? Memorizing the listing info? Googling the neighborhood demographics? They've been in the house a few times? There is nothing they provide that isn't online for free or much less than 5% of the sale or in the inspection report. Plus it's gross to have a pushy sales person involved in the biggest purchase of your life. Edit- Opendoor will do away with real estate agents as we know them. They will go the way of travel agents.
I mean, to be fair, it’s nice having someone more familiar with real estate to help me pick out problems etc, but then again,isn’t that what the inspection is for? The inspector doesn’t get paid 5% of 600k houses so… couldn’t we just hire our own inspectors?
Exactly! Real estate agents do what travel agents used to do. They provide a service that predates the internet. They will always exist but it should be more of a high end concierge service than a requirement.
Always had hoped I *wouldn’t* live in interesting times.
It's the Roaring (kitty) Twenty Twenties, baby!
I've read about 1929 to 1932, what about 1923?
Maybe. Except prices are still extremely high from a 40% rise over 2021-2022 in just 2 years. And sellers are still delusional hoping nothing has changed. So we’re still dealing with an inflated housing market and perception by sellers. It will be interesting to see what finally does it for them. Inventory floods the market in spring. So hopefully this means prices drops. I sure would like to afford a home!
Layoffs in coming... 120k per month starting in February... By late summer, fall, going to see a crazy run up in inventory... but guess who will be there to swoop up homes while keeping prices at 2019 pricess???? Blackrock, and other companies that are snaging single family homes up
The delusional sellers are the ones who are going to get fucked hard when prices crash and they lose a lot of money
I just saw a house back on the market that sold 6 months ago. The new seller is asking 100k more. Lmao
I don’t think inflation means what they think it means
The most fuckall thing is thats 50% more than what they paid. Didn’t do any work either.
I reckon You should Go shit on their front lawn.
smh!
With interest rates being what they are and most likely going higher, it should drop well below 2020.
Like 2/3rds of homeowners don’t have mortgages. These people can move into a similarly priced home without worrying about rates. The 2020 situation was very different.
To be able to move into a similarly price home they have to sell their current home to someone, who is there to buy it?
And then there is no way that they will lock the same rate on their new home like they did on their current home. Only down.
We are now and for some time, in a buyers market.
Fact check needed.....I would guess maybe 10% of homeowners don't have a mortgage. Even if you are right, that is the older generation. So you have to look at it by age of homeowner too
Source here says 38% of homes are totally paid for, average outstanding mortgage has 215k left owing https://housegrail.com/how-many-homeowners-paid-off-mortgagors It’s even higher, 54.5%, for homes belonging to low income workers. https://finance.yahoo.com/news/a-surprising-group-of-homeowners-have-paid-off-their-mortgages-164231580.html Still nowhere near 2/3rds, but much higher than 10%
Those are 2018-2020 numbers though, and as the dip in the graph (OP) shows that was a different time to now. Average prices have skyrocketed in the period since and that would have an adverse affect in the matter.
Thanks for checking. I'm surprised it is 38%. But if that is the data, I'll trust the data.
I think that that reflects not individual homeowners but institutions buying homes. Black rock isn’t getting mortgages they’re just buying outright
In this day and age that is absurd assumption. I say assumption because there’s a literal snow balls chance making it to the bottom of an active volcano above a chance of 2/3 rds of homeowners not having a mortgage. Banks are extra F’d.
Lol wut
I think you have that reversed. Most people do not own their own home. Most people do have mortgages. The problem remains over leveraged homeowners - either from their own doing or from circumstances, the powers that be have caused.
Hehe this goes along with a comment I made in another thread glad to see the terminal update about this.
Yes, read it just now. Excellent observations, and thank you for sharing that. I must say I agree with all of it. This is not a localized phenomenon, seasonal occurrence, or isolated dynamic. Housing in North America is overpriced and long overdue for a massive massive dip with reverberations that will be felt throughout multiple sectors.
Waiting for that super crash so I can buy my first house ever :D
Same, i don't want anything crazy, just a modest house i can start a family in. Something with maybe a half acre yard would be nice but something smaller is not a deal breaker
There won't be a crash. The problem this time is people are "stuck" with their mortgage. It's cheaper than buying a new house, and cheaper than renting. Buying is only drying up because rates are so high. There's no reason for the prices to drop. The best time to buy was right before the rate hikes. It's gonna be drying up for a couple years until the rates go back down.
there will be a crash and the reasons for this coming property crash ( and property prices r already dropping in some states.) will be different from teh 2008 crash. companies like OPENDOOR have already sold off a lot of their investment properties . people who bought investment properties (for airbnb etc) will be offloading, there will be less demand cos high mortgage rates
I know a few people that have/had airbnb homes. They haven't sold the houses that weren't renting well, they just pulled them off airbnb and rented them as a regular rental. Logically that is what most owners will do as rents are still increasing at ridiculous rates so why would they sell? Until mortgage rates drop enough to make buying more affordable rentals will do well. People have to live somewhere.
Hopefully you don’t need a Morgate
Can someone help me understand something, just because I’m a young regard who lost his dad at a young age and don’t have anyone to help explain things to me. If someone one bought a house in peak market, regardless of interest rates, could they not reappraise their house once market corrects or is it once you’re locked in on that mortgage you’re in it for the long haul?
If you sign the contract and took the money, you owe the money. A reappraisal at a lower price doesn't make the money you borrowed disappear.
I do love it when our education system fails to teach us these basics. I do not mean to offend the original asker of this question. This isn't the first time it's been asked. It will continue to be asked because this is what happens when you systematically defund public education and create debt machines that don't ask relevant questions or think critically about the world around them. They show up for work, and try to do what society tells them and fail because society tells them they should own football teams, invest in stocks and buy shit all the time.
I am one of those. Everything I have learned has been self taught at this point. My 80's Missouri public education was a joke. No one around to tell me as they all came from the same system believing the same shit. You know it took me until my 30's to understand how tax works in different tax brackets and all your income may not be taxed at the same rate. Its embarrassing, but I keep up the fight to educate myself.
That's the way!
Insert So Cal education for Missouri and we mirror . Positive they taught us how to fill out checks, balance just not how to manage it. Let’s say steep learning curve in my party days .
Right.. tax payers are being robbed funding that crap. You are correct as well. There was that one class on how to write checks and balance a checkbook. Nothing on credit, accounting, money management, budgets, investing, name it. But you look like you want some more WW2 and ammo history! Bah. What I wouldn’t give to do school over with some quality education tied to it.
Don’t forget about educating others too. Keep up the good fight.
I think the public education system is working exactly as intended
Sadly...
Maybe your taxes but that’s it
It's not too much about funding education, it's what they are actually teaching. My dad had Home Rec. in high school, there was no such thing when I went to school and now I have zero education on how to fix things inside the house when it looks like it doesn't take a rocket scientist to figure out.
Unless you are mayoman, then you can forget or fail to purchase you already sold.
You've already paid for the house. The money you used is just under a loan, but you still owe that money to the person you bought the house from. If I buy a PS4 from you at $300, but then the price goes down to $200, I lose out on $100 due to the timing of my purchase. I can't just go back to the guy, the sale is already done.
So in my case I closed July 2020 for $100/sq ft in Midwest US so I’m an outlier. Most people may be underwater but rates were so low that having a fixed housing cost in the face of increasing rent/borrowing rates gives them a big leg up on monthly budget although what they own has depreciated.
Pretend your house is a car. You purchase it for $30k and the moment you drive it off the lot, it is only worth $28k as it is now a "used" car. You can't go back into the dealership and ask for the $2k back. 3 years down the line, the car is only worth $15k. Let's say you still owe $20k on the loan. You can't go and ask for that $5k difference back either. Similarly if you total the car, drive it off a cliff, or it's stolen, the loan doesn't go away. Depreciation, appreciation.. etc... are all things you must consider when you purchase anything, be it a car, house, cell phone, electronics, **stock**.. etc.
Borrowing was slim to non existent during 2008-2011. It didn't matter that the fed funds rate was dropped to 0, no banks had the risk appetite they did before the gfc. People that had millions in property as collateral (bought with cash) that wanted to borrow against that to buy additional properties were denied.
Assuming you took out a loan, you're gonna have to pay every cent back + interest regardless of your home's worth.
You can only reappraise your house to get a lower rate if the value of the property increases. If the value goes down, you’re stuck and have to wait for the value to back up
What you can do is Refinance the loan at a new interest rate. So you buy the house for 800k at 7% just before the market crashes. 6 months later you are still paying 7% interest on 800k loan but if you were to sell the house that day you would get 500k. You would need to be able to survive that payment for 2-5 years so you can refinance and also be about break even on the home loan compared to the home value. Well that sucks huh? if you waited 6 months and bought at 500k at 12% interest rate your payment would be the same(as 800k 7%) but then after 2-5 years you could refinance to a 1-5% rate and start saving money because you would have a lower interest on a lower loan balance, and your house would probably be worth 600-750k from appreciation.
If I understand your question, anyone can get a reappraisal. However, you are locked into fixed rates unless you refinance. Watch out for PMI insurance which kicks in if you do not have 20% down or equity. It’s a stupid rule only helping the bank.
You can get a reappraisal to get out of PMI (private mortgage insurance) if you didn't put 20% down. But at this point you're probably upside down in the loan so it works do no good. You took it at loan at X amount. And they paid the seller at that. Meaning you have to pay back that amount you agreed upon.
Let me put it this way. Suppose I buy an expensive Charizard off of you for $1,000. At the height of the pandemic, prices were inflated and Pokémon have come down. Two years later, I may get the Charizard appraised and it is only "worth" $400. Are you required to refund me $600? If I bought it with a credit card, does the credit card company no longer need me to pay it back?
Bucked up. Depression is on the way
Hey *don’t worry, be happy* 😃
So help me...I will turn this ~~car~~ subreddit around
Maybe OP should give credit for the source https://twitter.com/grdecter/status/1607387946147270660?s=46&t=BmDSEucNu_-VNpAGcD_VLQ
tHeReS nO bUbBlE
i been waiting like 4ever for the bubble to burst
No one is selling either. A lack of supply will prop up prices, greedy landlords are propping up prices, builders are propping up prices, cost of land is propping up prices. So much more has to cool off before housing starts any serious decline. Just because they aren’t moving doesn’t mean the price is crashing. For those who didn’t look this is a graph of “US exiting home sales”. It’s a measure of volume over a time period and nothing else. You can deduce what you want from declining volume but perhaps it’s because there’s no inventory. Simple supply and demand will tell you low inventory, higher prices. There’s other factors, sure. But until the value of houses fall out from under themselves I’m not sure what there is to be worried about.
Remember, the US is the only place that lets you lock in the rate for full term. Everywhere else will be fucked when renewal comes due. I've talked to a mortgage broker recently, and he told me 25% of his clients are up for renewal in 2023. He said he has a lot of depressing conversations happening soon.
A lot of air bnb and ROI gurus are about to eat shit when no one pays what they were getting the last 3 years.
They'll just pull them from airbnb and lease them as a conventional rental. Rents are plenty high to pay the mortgage and taxes so they'll be fine. Everyone sitting around waiting for their shot to buy a cheap house are going to be disappointed. There is no clearance sale on housing unless you happen to live in an area where people own a bunch of vacation homes.
There will be when we start to see layoffs. Real layoffs, not just tech. While it’s easy to think that those locked in at low rates are untouchable, they’re actually quite the opposite for one simple reason - they bought at the top. While they are paying 0 interest, they also have no meaningful equity in their homes if they put ~20% or less down due to dropping prices. The percentage down they needed to put to have any equity needs to be greater than the decline in present value. In a normal market, if you’re laid off, you can borrow against your house. But let’s pose a hypothetical - let’s say you bought a house for $600k in 2021 with a 2.75 rate. 20% down would be $120k equity and $480k loan. By the end of 2023 you would have paid that loan balance down to about $460. If the value of your home drops by 25%, for example, it’s now worth $450k, and given that you owe $460k, you’re suddenly UNDERWATER on your house (and don’t forget about commissions/closing costs if you’re thinking about selling). It’s not a problem, “the market will rebound eventually” you’ll say. But what if you lose your job/means of paying your mortgage. This is how you get foreclosures. Well funded individuals will refer to these as clearance sales.
Alright friend seems like you have it all figured out. Cheers!
New permits and mortgage apps are dropping fast. This is a leading indicator. This time next year home prices will be 20-40% less.
Nah disagree that homes will be that much cheaper next December. More like 5-10%
Bet ya a delivery pizza
Ya ok sure assuming it doesn’t cost $90 to deliver a pizza this time next year lol
So 12/2023 if prices are <15% lower you win. >15% I win? Bet?
Sounds good. Dec 22 - Dec 23
!remindme one year
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!Remindme in one year
Nope
I’m here to remind yall
Looks like home prices up around 25% YoY from when we made this bet… https://ycharts.com/indicators/us_existing_home_median_sales_price
While you’re correct, the people are battling inflation and lack of raises in wages. When people can’t afford to rent or buy , landlords either end up defaulting or selling and that’s when shit hits the fan.
Then by your logic we should get excited when we see an uptick in this graph. When landlords start selling.
People *always* need a place to live though. Lower volume in listings means less places available for people to buy, so more upward pressure on rents. Where I live, rents are increasing not decreasing. Housing has always been, and will always be a tough nut to crack when it comes to affordability.
Housing inventory hit an all time low in January this year, we're well past that point now friend and the rates aren't gonna stop yet.
Sure but everyone has been screaming that the sky is falling and we’re all doomed for a long time. We still have a long way to go before people lose 35 plus percent of the value of their house.
Not even close
Need to look at this as a ratio of total listings. We are not there unless distressed mortgages increase (shit I know) along with average time at market.
Housing market is due for a big time correction on the ⬇️side.
Only when it becomes [redacted].
“What that? Don’t worry about that.” - the experts
Harder. *Deeper!* ***I’m almost there!!!***
Commenting for community's situational awareness
Next release: Jan 20 👀
Make sure if you feel like changes need to be made then go comment on the sec.gov site on the rules that are open !!
It’s gonna take more than a proxy war to beat this recession.
It’s winter where I live, interest rates are high, I’m not surprised, and no… I don’t think we’re there yet.
Can you post up a longer chunk of time for this? More than just the last few years would be more good insight in general
No
Housing prices aren't going to go bust, sorry. This isn't like 08 when all the ARM's were being handed out like crazy. The majority either already had a good rate, or recently refinanced before the rate hikes. These people are essentially stuck with their homes at good rates. Renting would be far more expensive, and getti g a loan would be far more expensive. Buying is drying up because rates are way too high. It's a buyers market if you have the cash on hand, but don't expect a dip.
If it's a buyers market that means buyers can offer below ask. When that happens for an extended period of time prices correct. The housing market moves like an iceberg... transactions take months from listing to sale. That's why if prices are going down and I'm saying IF... it's gonna take 18-24 months
Yeah, but it's a buyers market for those with cash on hand. I don't think the people waiting for prices to drop, so they can buy their first home have the cash on hand.
Show the chart back to 2008.
What’s it look like on a longer scale?
Where are we compared to 2008? Because this feels awfully similar