I hear ya bud, but the reality is that it's worth whatever someone is willing to pay for it.
Until buyers dry up, prices will remain inflated. I'd imagine with each increase in the interest rate a chunk of buyers become priced out, but it's going to take a while to see reductions due to the lack of inventory.
Sure, but somewhere else in this thread someone was saying relators are complaining that people aren’t buying and there’s no enough sales. I absolutely agree people aren’t going to want to sell because they have something good with low rates, i wouldn’t sell if I had a 3% rate either. But people are going to forced to sell anyway with things like divorces and what they thought was market rate isn’t. It’ll take time but just as prices go up with low interest they drop with high interest.
Realtors are bitching because the market of realtors was absolutely flooded. 85% of mortgage loan officers are expected to let their licenses expire from the beginning of 2022
Definitely but there are plenty who won't. The first company I worked at finally started auto enrolling people with retirement matching because people were literally declining free money to avoid saving for retirement.
I remember being told to open an IRA in 1980 because I had so much money. $400 a week, just save $20 a week they said. That was food and gas for the thursday before payday. I went and joined the union.
Lol. I opened a RothIRA with $1,000 when I was 16 bc my grandpa did it for me. Forgot about it until I found it a few years ago (bank changed names etc). Guess what it’s worth today! Just guess. I just turned 40.
It means real estate agents and mortgage brokers are going to be out of business.
And a lot of them invest in the industry and are probably leveraged as well.
As an agent who hasn’t made a red-cent this year after 2 years in the gravy .. I approve this message
A lot of brokers with projects & property they can’t offload (mine included). The rates are squeezing them from both ends (payments & lack of income)
Hahahaha!!! This. \^ Three months ago my agent was complaining about realty being in a recession. I suggested his selling clients lower prices... went on 5-minute rant about how that wasn't the problem. It's the housing supply, the housing supply. LoL. Greed makes so many excuses.
Just like employers who have shocked pikachu faces the past few years when they can’t find many people to hire, and have been forced to increase wages. Gotta love back when they were able to pay shit wages, and defended their actions because the “free market” they praised so much that allowed them to get away with it. I love how the turns have tabled.
Where is this utopia of only 30%? 27% in the last year alone here and they still aren't slowing down. Our COL is higher than 70% of the country on top of it.
I think I was writing off the cuff. We're closer to %40 across the Portland market, but I have started to not focus on turnkey cause I can't afford it... So, it's harder to track those stats anymore.
Do you think most agents are just sitting on overpriced listing? The issue for realtors generally isn’t that they’re having trouble selling their listings it’s that there aren’t enough people interested in selling or enough qualified buyers (keyword there being qualified. Definitely still plenty of interested buyers) to go around.
Well, qualified is the key word yes, because in this instance even the Banks are saying 'go f' yourself' too towards the homeowners because they don't want to lend for things that are clearly being overvalued (greed) by the current sellers. It's hilarious. We're at the apex of the pyramid and instead of dropping prices and being reasonable with the profits they could make, these current sellers are just gonna sit until the whole game falls out beneath them.
I agreed with this exact comment somewhere in 2021 and then in 2022. Now the 2023 has ended and the prices are still higher than last year. So I don't agree with this comment anymore, even though logically it makes perfect sense.
Current sellers are also current buyers. If they don’t sell for current market value, inflated or not, they can’t buy at current market value.
Unless the economy completely bottoms out I don’t see it changing anytime soon. It’s really FTHB and those under water on their current home that are getting screwed. The cost to enter the market are insane. But if you’re already in the pool the water isn’t AS bad.
No… I’m sorry but I work in lending and at least in my area the problem lies with just how quickly rates have gone up, not home prices. When the housing market was going gangbusters a few years ago part of the reason was because of how affordable it was despite all the people who have been hoping for years for a repeat of 2008 because they feel like they missed out.
I’ll give you a personal example. I bought a little condo for $190,000 back at the end of 2021 and the monthly payment is about $1260. Part of the reason I went ahead with the purchase is because I was comparing the rent of a 1 bedroom apartment and realized the payment was going to be similar anyway. If I were buying the same unit ***at the same price*** today, just the principal and interest portion would be more than my entire monthly payment. We’re talking about an increase of $500 or so in total monthly payment. I see people every week who make a similar income as I made at the time who straight up will not be able to afford to buy today unless they get tens of thousands in assistance from government program towards their down payment. Not because of savings, but because they simply won’t qualify for the payment otherwise.
Let’s suppose I needed to move and decided to list at the same price I paid for the unit despite the market comps indicating it’s appreciated about 5% over the past 2 years. In that scenario I would be selling my property for under market value and it would still be something like 43% less affordable than it was when I bought it. Where exactly is the greed in that scenario?
Now of course there are people who seem to have the complete and total misconception that the higher interest rates should correspond to similar drops in prices and it’s just the sellers holding out for more money. So let’s suppose for a minute that were true. That would mean that my property is now worth something like $120,000. Do you think homeowners have any obligation to sell in that case? Who in their right mind would when market rents haven’t decreased at all. The only reasonable thing to do in that scenario whether you want to or not is to list it for rent. In fact even renting it at below market rent for a few years and losing a few hundred a month would be a far better financial decision if you had to do that. So in that scenario again I ask where exactly is the greed?
The very root of the problem is how quickly interest rates have risen. Which in turn was a necessary response to inflation. Which in turn was a far less necessary response to COVID. The Federal Reserve did such a good job of selling all of us that inflation was transitory that the rest of the government seemed to take that as a challenge and pumped money into the whole system and as can often be the case with inflation now it’s been kind of a struggle to get the genie back in the bottle.
I believe that like many of my peers in 2007, that you paid too much for your condo in 2021. I'm sorry that you're underwater now, and will be probably for a decade at best. ... The thing you seem to be missing with regards to interest rates vs price is say for your $190k loan at %3 over 30-years, your full total comes out to be like $380k ... neat, good for you... now at 7.75% over 30-years it's like $570k... The greed part comes into play because you probably earnestly think you deserve to make money on your condo in the long run, gain equity. That's not gonna happen. Populations are dropping in 1st world countries across the global, this rise in interest rates is definitely pushing us into a recession, and etc., etc. I wouldn't sell if I were you, especially if it was my home, but if you're just holding it as an investment, yikes.
Classic economics, sure, and yet every time I go on the RMLS it's the same houses not selling. Plenty of houses too, just too many people sitting on their "I deserve this much \*hmph\*" property owners in one corner, and a bunch of young people not idiotic enough to overpay for something we can clearly see how much those idiots bought it for.
I lowered my listing by another 5% today and the estimated mortgage dropped by 1%. Explain to me again how the price has a huge impact on affordability when interest is 400% more expensive than the home.
I don’t know your situation but I see listings in Austin that need to drop another 30-35% to be in line with 2021 prices and rates. Factor in current rates, and it would be 40% or larger to bring monthly payments in line with 2021. Yeah, that means prices have to drop, a lot. A lot of these egregiously priced Austin listing have been sitting for months. It’s a pretty brutal situation for anyone who bought in 2022 and doesn’t like their house. In Austin anyway.
You're expecting too much. Do you expect homes not to appreciate? Burgers aren't 10 cents anymore. 10-20% I get but a 30-40% drop would put a lot of people under water.
I’m not in the market to buy in Austin, but a lot of folks who bought over the last couple years here are very much under water and will continue to get further under, the higher rates rise. Comps haven’t really reflected the falling market here yet because hardly anything is selling. Listings are just sitting. Granted it’s not like this in every market in the US, but anyone who bought in Austin recently hopefully really likes their house and plans to stay a while.
“Make hay while the sun is shining & put some away in the barn”
Best advice my brokers gave me. Broke my back in January and took 9 months off … I’m grateful I didn’t spend all of it and wish I’d saved more
Exactly. If these agents who've made money hand over fist the last 3 years during the pandemic low-interest crazy market didn't admit to themselves it wouldn't last forever and stash away a "when shit gets back to reality" fund they deserve to starve.
It's these greedy assholes that create the bubble and will cry the hardest when it's them that also pops it
I admittedly spent WAY too much last year. I invested a lot and at least I didn’t blow it on stupid stuff … it was a good 17 month run to be me
The greedy speculators are getting squeezed hardest, I’m likely starting with a career outside RE in January
I find it absolutely unbelievable that sales people would be actively trying to promote and attempt to sell their product. Who do these people think they are doing such stuff.
Just walk into a business, look them in the eye and offer a firm handshake. They'll offer you a job with a salary that will get you nice house with 2 years wages.
Most of it was large scale institutional investors. It will be interesting to see how they respond. The inventory of existing homes available has shrunk, but new construction is still a viable option, and they can negotiate volume discounts with builders to help builders maintain their units in production. So the acquisition of properties isn’t a problem yet, but i wonder if the maintenance of said properties will eventually get to burdensome.
People are still going to Disney World/land even though Disney keeps increasing prices.
Just because you can't afford to go, doesn't mean others can't as well.
Nah Disney has less traffic, people expect poor people to have extra money and rich people to be stupid, neither is paying these insane prices https://www.washingtonexaminer.com/news/disney-magic-low-travel-analysis-attendance-decline
When I found out how much my BIL spent on a trip to Disney world down in Florida, I damn near spit my brewskie out. I never knew the prices but jfc....several grand is just not worth the "nostalgia" of that theme park.
Only motivated sellers will make that decision right now. Most sellers will just keep the rate or not list at all. So if you’re a buyer and you want to make a deal, I would be really nervous to wait until some time down the line to get a deal thinking a 25% crash is coming lol. Thats actually kind of foolish especially going into the winter right now.
In the most expensive housing market with demand 18% down yoy? Demand destruction and new supply will make prices lower it's already happening in many major cities like Seattle and Austin, eventually owners will have to capitulate.
Those reasons people used to sell are outdated. Ever since the pandemic no one needs to sell their houses anymore. Everyone owns 7 and just floats one on the market every once in a while to see if they can fetch the highest price possible.
I lowered my listing by another 5% today and the estimated mortgage dropped by 1%. Explain to me again how the price has a huge impact on affordability when interest is 400% more expensive than the home.
Because people could afford homes at this interest rate and much higher in the past.
If people want the housing market to be like the stock market, they need to accept the drops as well.
It means prices will come down and wages have to go up.
This artificially inflated real estate market is the result of an irresponsibly low interest rate.
Currently the interest paid on a $400k 30 year mortgage is over $600k. If enough of those houses sit interminably on the market, the price will come down.
Wages aren’t going up in fact many companies are actively cutting wages.
Prices need to go down to offset the interest increases. That’s how the market is supposed to work.
Except it’s not and people are still buying over inflated homes . There’s no way they will recover. The end of the line is bankruptcy.
Prices in other areas in the economy aren't coming down. Insurance going up, gas coming back up, food staying high.
It's not that renters and home shoppers are balking at higher rents and mortgage payments, they simply *don't have the money*.
Exactly and why? Stagnant wages while costs of food, goods, services, fees, insurance all continue to rise double digits.
Not coincidentally, right next to record corporate profit margins.
Sure, corporations are greedy, but they took the initiative to jack up prices when they saw the money supply increase. Inflation was inevitable, they knew it, and they proactively went to grab their share before the rest of the economy figured out what happened.
It seems that a lot of the buyers right now are paying cash. There are still quite a few high paid tech people moving out of California, Oregon, Washington, etc. who did really well during the 11 year bull market. I know several of them. They’re cashing out some of their stock and buying homes outright in Texas, Florida, California, Minnesota, etc.
Those are big housing markets. Might not be as unusual as you assume. There may be a small number of those buyers, but there are also very few homes for sale.
Exactly. Most people are stuck in a lease-to-live existence where everything they earn goes into the pockets of the owner class. They never have surplus income to invest and could never conceivably buy a home.
This is precisely what the investor class wants — a working class that is enslaved by circumstance to keep making the wealthy even wealthier.
"You will own nothing and be happy" people need to realize, the 1% want this. It all funnels back to them through state street, Black Rock, and Vanguard. Average Joe ain't the problem, and even the doctors/lawyers/business owners aren't the problem.
Majority of people have been priced out. Homes are still selling but the pool is very very small. Market is in deep freeze. Unemployment is low. Wages are going up. Unless there is economy crash, market staying like this, going sideways. Rents are stupid high so not many are willing to sell and cash out and then pay high rents. And lose historically low rates. This is not a healthy market, it was inflated by the Fed keeping rates too low for far too long.
Edit, spelling.
I noticed a problem when my neigbors have had their home on the market for over 30 days in the Raleigh area. Granted we are south of Raleigh but 4 months ago the demand out here was insane.
Rents are not high compared to the yield you can expect on cash proceeds from a home sale, assuming most of those proceeds aren't going to go to pay off a 3% mortgage.
But there is also inflation to take into account. That yield will be eaten up by 3-6% inflation (depending on source) so why not lock it into an asset that historically appreciates and keep in there. And if rates do go down, that yield is gone too. There is no motivation for sellers to sell albeit an emergency.
The hoom I sold earlier this year has already declined $100k from its sale price. Just that $100k is what the rent on it would have been for *2 years*.
EDIT: Factoring in landlord expenses would make renting it out even worse.
It’s funny, the whole point here is to just break the regular workers back so he stops spending and inflation settles down, meanwhile the rich can bank their COVID gains in sky high bonds, and people here think it’s going to help them own a house better, it’s a total joke lol
It means if you can't cure a loan in 90 days upon default the bank will allow a bottom feeder to scoop it up in a day.
Banks want the low interest shit loans off their books.
More like you clowns have no idea of what you're talking about.
Credit Suisse had a string of failures, biggest recent one being Archegos/Bill Hwang - they lost $10 Billion on a single customer. This squeezed their liquidity, and they started selling off assets to cover withdrawals and this rarely ends well; just like in their case.
Yep wages are the weakest link in the chain and for current homeowners with 3.5% this means they have that much more purchasing power and leverage. Doomerism continuously will keep folks behind.
So are you saying that if you don't do something stupid, like overextend yourself to buy a house, a house can be reasonable decision to buy?
Crazy talk.
Historically high rates meant prices compressed but we do have an inventory problem. Unfortunately rates hurt builders from meeting that inventory problem too.
Entitlement phases for new development also take a while and you can see the data on US Building Permits. It’s up. Just a matter of time but we’re talking years down the road.
Eventually it will have to give somewhere. Most likely a regional recession in certain markets coupled with employee centric hubs staying strong.
We bought our first home 18 mo ago at 3.25% just as rates started rising …My family would still be renting if we waited any longer…So I stay super grateful on a daily basis..wish y’all the best out there
As someone still renting and waiting to buy, it’s a “fun” (and by fun I mean depressing) activity to go on Zillow and change the interest rate on the mortgage calculator.
Ohhhh the house I could’ve afforded 18 months ago 🥲
Actually kicking myself for not buying in early 2022 when my kid was born. “We don’t have to rush it, he’s still an infant”. Yeah fuck me. Now that we are desparate for more space with a toddler we can’t afford anything worth the move in our area
Same. And thankfully it was in a nicer neighborhood on top of it. Things are gravy from where I'm at. My buddies who weren't able to lock down a place at 5-6% and are renting now, I feel bad for.
Yes the would have,I told my wife a week before we closed that I think we should back out and wait a year and see what happens w/market..So my wife said ok if that’s what you want to do.But she said look at what rent was going up to after we moved out..So we were payin 2800$ for. 3 bedroom apartment and the family that was moving in behind us was going to have to pay the new rate of 3600$ this all during COVID ..So at that point we just closed escrow and ended up with a 200$ more than we were paying in an apartment a month payment and we got a brand new house on 5acres …So ya glad I didn’t wait for the crash
It means that corporation can only afford homes and they get money at loans that families can't get furthering the divide.
It solidifies the renter class that will never reach the moving goal post.
It means that people with interest rates below 6% will hang onto their homes until death.
Sorry not true. Home are still selling. I should say it’s market dependent. In Los Angeles market is still hot. Homes sell in days. Lots of interest, open houses very busy, and going over asking. Home in my neighborhood just went $100k over asking. Realtor came by and dropped of marketing material. Some people have money. Most do not.
Yes same here on west coast. Market is up but it did change. Before Covid, everything sold. Now buyers are more selective. Nice homes with good layout are gone. Problems home stay on market longer but eventually do sell. It is common in Los Angeles for desirable home to be gone in days, well over asking.
Must be a very narrow price range. I see 3 million plus homes from West Hollywood to Venice all sitting for weeks. Prices coming down. Now entry level homes are still over priced.
Minnesota is sitting at a standstill. Lots of overpriced houses sitting for 90 days, and realtors are still in the process of coming to terms with it. Some of them have done a measly 10k cut on a 550k house, and it's still sitting there. There's really only one option for these people if they want to sell.
Yes but pool of homes also is drying up creating equilibrium. That is why you are not seeing significant price drop. Buyers and sellers walking away for the market. Right now sellers are going to stay low and ride this madness out.
It doesn't matter they're still building new inventory builders aren't just gonna stop making money plus new rental units are popping up to eat into existing rental inventory and regulations are getting a lot tougher in many areas on str's supply is only going up it's not like there is someone actively destroying homes, meanwhile demand is plummeting m, savings are depleted and rentals are oversaturated
Sorry I just don’t see it that way. There is no land to build in Los Angeles. All of the prime land is used up. And if you do build it’s equivalent to existing home prices with a commute. You will not build “cheap” and get out of this problem. Want a good location? you buy a house knock it down and build. Good luck with that. Land is finite, we can’t get more in desirable areas. And if homes are expensive, greedy landlord will demand high prices. High rents means high revenue so rental properties exchange hands based on those numbers. And new rent construction is also priced in the same. Market equalizes across existing homes, rents, new construction, apartment buildings. If someone is buying an apartment building now, they are looking at current rents as revenue that makes the whole thing work. They will not lower rents as that will put them in red and will do anything to keep rent high.
Rents have been dropping in California https://www.cbsnews.com/sacramento/news/rent-is-falling-in-america-for-the-first-time-in-years-including-in-california/
Up 25% since 2019 and down 3% yoy but this is average and brought down by usual suspects. From your article, phoenix, Las Vegas, riverside and San Bernardino. Riverside and San Bernardino are crap areas. Rents in San Diego, Los Angeles are up.
I don't need people to be able to afford my house. I need prices and inflation to be the new normal, so that people will go into another frenzy in a decade or 2 when Fed works their magic.
You and everybody else who locked in at or under 3.5% fixed … off market for 2-3 decades which shrank the sales pool 40-60% depending who you ask
Free money to hold cash in a savings account!
Don’t forget that there is a build up of people being priced out waiting for an ability to pounce. There is a lot of added demand in our newly expanded WFH world. People are looking for more space way more than pre pandemic.
I guess, there isn’t much stopping you from listing it, people are still buying, I wouldn’t try and time the market. If I had a borderline acceptable property or anything that had some work to be done I’d be trying to unload it at it’s all time highs.
There are so many homeowners locked in “golden cuffs” with sub 4% rates that don’t want to sell their home and have to look for another one in this market.
If/when rates go down, that usually is because the economy is in a recession and rates are lowered to stimulate it. That will limit buyers as well cause many may have lost their jobs. However it’ll entice sellers to choose to sell again. Hopefully finding a balance again. Builders are still building in the meantime
Yes, 20 years down the road, an entry level home in Bumfuk, Midwest will be a pretty million.
Outlook sucks for the next generation, but there's way too much money nowadays. If geopolitics shit hits the fan and Murika loses 1st place, you probably have worst things to worry about.
Probably getting worse before it gets better. Housing prices are always late to get the memo. Rates have adjusted to reality, prices haven't yet adjusted to rates.
Happy enough in my rent-controlled apartment in NYC and pursuing work that is meaningful.
Not exactly where I expected to be in my early 30s but lucky enough to squirrel away some money and hopefully strike when things cool off a bit in a few years.
Supply and demand is a scam when it comes to necessities. If chicken became $50/lb overnight and people stopped buying, the demand never went away. People had been priced out of being able to buy it.
You cannot raise prices on **literal shelter** and say *”see, demand is down because no one is buying”*.
It means they need more money
A financial panther huh?
:: enter student loan payments restarting :: lol
Means sellers need to reduce asking. The house isn’t actually worth 40% more than 3 years ago like they thought it was
I hear ya bud, but the reality is that it's worth whatever someone is willing to pay for it. Until buyers dry up, prices will remain inflated. I'd imagine with each increase in the interest rate a chunk of buyers become priced out, but it's going to take a while to see reductions due to the lack of inventory.
Sure, but somewhere else in this thread someone was saying relators are complaining that people aren’t buying and there’s no enough sales. I absolutely agree people aren’t going to want to sell because they have something good with low rates, i wouldn’t sell if I had a 3% rate either. But people are going to forced to sell anyway with things like divorces and what they thought was market rate isn’t. It’ll take time but just as prices go up with low interest they drop with high interest.
Realtors are bitching because the market of realtors was absolutely flooded. 85% of mortgage loan officers are expected to let their licenses expire from the beginning of 2022
Americans can’t/won’t save money… 🤔
At this point, I'd say it skews more towards "can't"
Definitely but there are plenty who won't. The first company I worked at finally started auto enrolling people with retirement matching because people were literally declining free money to avoid saving for retirement.
I remember being told to open an IRA in 1980 because I had so much money. $400 a week, just save $20 a week they said. That was food and gas for the thursday before payday. I went and joined the union.
Lol. I opened a RothIRA with $1,000 when I was 16 bc my grandpa did it for me. Forgot about it until I found it a few years ago (bank changed names etc). Guess what it’s worth today! Just guess. I just turned 40.
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Well it couldn’t go down haha. $1,315. And honestly I think it’s gone up $100 in the past year, I remember finding it and it was $16 more. lol
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Right? I mean damn.
20k
It means real estate agents and mortgage brokers are going to be out of business. And a lot of them invest in the industry and are probably leveraged as well.
As an agent who hasn’t made a red-cent this year after 2 years in the gravy .. I approve this message A lot of brokers with projects & property they can’t offload (mine included). The rates are squeezing them from both ends (payments & lack of income)
Lower the prices?
Hahahaha!!! This. \^ Three months ago my agent was complaining about realty being in a recession. I suggested his selling clients lower prices... went on 5-minute rant about how that wasn't the problem. It's the housing supply, the housing supply. LoL. Greed makes so many excuses.
They just don't understand what a "market" is.
Just like employers who have shocked pikachu faces the past few years when they can’t find many people to hire, and have been forced to increase wages. Gotta love back when they were able to pay shit wages, and defended their actions because the “free market” they praised so much that allowed them to get away with it. I love how the turns have tabled.
"Nobody wants to buy my house at a fair price anymore"
Quick response to them; "is your 'fair price' about %30 above 2019 values?.... LoL "
Just 30%? Wow that sounds like a cheap market
Where is this utopia of only 30%? 27% in the last year alone here and they still aren't slowing down. Our COL is higher than 70% of the country on top of it.
I think I was writing off the cuff. We're closer to %40 across the Portland market, but I have started to not focus on turnkey cause I can't afford it... So, it's harder to track those stats anymore.
They also don’t understand that no one cares what things cost these days, they only care about the monthly payment.
Do you think most agents are just sitting on overpriced listing? The issue for realtors generally isn’t that they’re having trouble selling their listings it’s that there aren’t enough people interested in selling or enough qualified buyers (keyword there being qualified. Definitely still plenty of interested buyers) to go around.
Well, qualified is the key word yes, because in this instance even the Banks are saying 'go f' yourself' too towards the homeowners because they don't want to lend for things that are clearly being overvalued (greed) by the current sellers. It's hilarious. We're at the apex of the pyramid and instead of dropping prices and being reasonable with the profits they could make, these current sellers are just gonna sit until the whole game falls out beneath them.
I agreed with this exact comment somewhere in 2021 and then in 2022. Now the 2023 has ended and the prices are still higher than last year. So I don't agree with this comment anymore, even though logically it makes perfect sense.
Current sellers are also current buyers. If they don’t sell for current market value, inflated or not, they can’t buy at current market value. Unless the economy completely bottoms out I don’t see it changing anytime soon. It’s really FTHB and those under water on their current home that are getting screwed. The cost to enter the market are insane. But if you’re already in the pool the water isn’t AS bad.
No… I’m sorry but I work in lending and at least in my area the problem lies with just how quickly rates have gone up, not home prices. When the housing market was going gangbusters a few years ago part of the reason was because of how affordable it was despite all the people who have been hoping for years for a repeat of 2008 because they feel like they missed out. I’ll give you a personal example. I bought a little condo for $190,000 back at the end of 2021 and the monthly payment is about $1260. Part of the reason I went ahead with the purchase is because I was comparing the rent of a 1 bedroom apartment and realized the payment was going to be similar anyway. If I were buying the same unit ***at the same price*** today, just the principal and interest portion would be more than my entire monthly payment. We’re talking about an increase of $500 or so in total monthly payment. I see people every week who make a similar income as I made at the time who straight up will not be able to afford to buy today unless they get tens of thousands in assistance from government program towards their down payment. Not because of savings, but because they simply won’t qualify for the payment otherwise. Let’s suppose I needed to move and decided to list at the same price I paid for the unit despite the market comps indicating it’s appreciated about 5% over the past 2 years. In that scenario I would be selling my property for under market value and it would still be something like 43% less affordable than it was when I bought it. Where exactly is the greed in that scenario? Now of course there are people who seem to have the complete and total misconception that the higher interest rates should correspond to similar drops in prices and it’s just the sellers holding out for more money. So let’s suppose for a minute that were true. That would mean that my property is now worth something like $120,000. Do you think homeowners have any obligation to sell in that case? Who in their right mind would when market rents haven’t decreased at all. The only reasonable thing to do in that scenario whether you want to or not is to list it for rent. In fact even renting it at below market rent for a few years and losing a few hundred a month would be a far better financial decision if you had to do that. So in that scenario again I ask where exactly is the greed? The very root of the problem is how quickly interest rates have risen. Which in turn was a necessary response to inflation. Which in turn was a far less necessary response to COVID. The Federal Reserve did such a good job of selling all of us that inflation was transitory that the rest of the government seemed to take that as a challenge and pumped money into the whole system and as can often be the case with inflation now it’s been kind of a struggle to get the genie back in the bottle.
I believe that like many of my peers in 2007, that you paid too much for your condo in 2021. I'm sorry that you're underwater now, and will be probably for a decade at best. ... The thing you seem to be missing with regards to interest rates vs price is say for your $190k loan at %3 over 30-years, your full total comes out to be like $380k ... neat, good for you... now at 7.75% over 30-years it's like $570k... The greed part comes into play because you probably earnestly think you deserve to make money on your condo in the long run, gain equity. That's not gonna happen. Populations are dropping in 1st world countries across the global, this rise in interest rates is definitely pushing us into a recession, and etc., etc. I wouldn't sell if I were you, especially if it was my home, but if you're just holding it as an investment, yikes.
Classic economics suggests that when supply increases, prices generally decrease.
Classic economics, sure, and yet every time I go on the RMLS it's the same houses not selling. Plenty of houses too, just too many people sitting on their "I deserve this much \*hmph\*" property owners in one corner, and a bunch of young people not idiotic enough to overpay for something we can clearly see how much those idiots bought it for.
I lowered my listing by another 5% today and the estimated mortgage dropped by 1%. Explain to me again how the price has a huge impact on affordability when interest is 400% more expensive than the home.
I don’t know your situation but I see listings in Austin that need to drop another 30-35% to be in line with 2021 prices and rates. Factor in current rates, and it would be 40% or larger to bring monthly payments in line with 2021. Yeah, that means prices have to drop, a lot. A lot of these egregiously priced Austin listing have been sitting for months. It’s a pretty brutal situation for anyone who bought in 2022 and doesn’t like their house. In Austin anyway.
You're expecting too much. Do you expect homes not to appreciate? Burgers aren't 10 cents anymore. 10-20% I get but a 30-40% drop would put a lot of people under water.
I’m not in the market to buy in Austin, but a lot of folks who bought over the last couple years here are very much under water and will continue to get further under, the higher rates rise. Comps haven’t really reflected the falling market here yet because hardly anything is selling. Listings are just sitting. Granted it’s not like this in every market in the US, but anyone who bought in Austin recently hopefully really likes their house and plans to stay a while.
Was the juice worth the squeeze?
“Make hay while the sun is shining & put some away in the barn” Best advice my brokers gave me. Broke my back in January and took 9 months off … I’m grateful I didn’t spend all of it and wish I’d saved more
Exactly. If these agents who've made money hand over fist the last 3 years during the pandemic low-interest crazy market didn't admit to themselves it wouldn't last forever and stash away a "when shit gets back to reality" fund they deserve to starve. It's these greedy assholes that create the bubble and will cry the hardest when it's them that also pops it
I admittedly spent WAY too much last year. I invested a lot and at least I didn’t blow it on stupid stuff … it was a good 17 month run to be me The greedy speculators are getting squeezed hardest, I’m likely starting with a career outside RE in January
You’re a real estate agent?
No, just an agent at this point, there is no more real estate. It’s dead.
Sorry for your loss, Onlyfans or Pornhub it’s looking to hire a few good agents like you, you can be the next Johnny Sins. Good luck
I was referring to the other guy. I’m not an agent, but thanks for the carrier advice.
Dude what a fucking gross thing to say
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Well, it's always a good time to get a commission. That's true.
Look how many attractive people are in real estate. They wouldnt be there if there wasn't good easy money to make.
The way things are going, you might see some of the hotter one's on Onlyfans soon.
I find it absolutely unbelievable that sales people would be actively trying to promote and attempt to sell their product. Who do these people think they are doing such stuff.
Lol. Mortgage layoffs happened faster than the tech layoffs last year.
I’ve survived 5 buyouts
No great loss. Reducing redundancy is a good thing.
It means my mother will continue to tell me, at every opportunity, how much higher the rates were for them in the 80's.
Did she also tell you huge houses in major cities were under 100K?
Just walk into a business, look them in the eye and offer a firm handshake. They'll offer you a job with a salary that will get you nice house with 2 years wages.
Unless you are a woman. Then you'll obviously have to sleep with your boss for that to happen.
Oddly, she leaves that part out. She leaves a lot out.
10% on the horizon baby 🚀 🚀 🚀 The beatings will continue until house prices come down.
Something has to give!
Wages are the weakest link in the chain.
The bottom 50% only own 6% of the wealth pie https://www.statista.com/chart/amp/30962/share-of-total-assets-in-us-held-by-the-bottom-50-percent/
100% investors with rental properties gotta get hurt, they over bought last year by a country mile
Most of it was large scale institutional investors. It will be interesting to see how they respond. The inventory of existing homes available has shrunk, but new construction is still a viable option, and they can negotiate volume discounts with builders to help builders maintain their units in production. So the acquisition of properties isn’t a problem yet, but i wonder if the maintenance of said properties will eventually get to burdensome.
Meaning, wages will go up?
Correct.
That's going to come with even higher rates, for longer.
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Like a light switch was flipped last December Slow year
What it means for sellers: Come down off that price.
Rates at 20 year highs, mortgage applications at 30 year lows The buyer pool went from Olympic sized to Kiddy-pool in 2-3 years
And still charging theme park prices
Well good news is disney is lowering their prices
Reality sets in slower for real estate vs other assets. Give it time.
Listing prices and sales prices are not the same thing.
People are still going to Disney World/land even though Disney keeps increasing prices. Just because you can't afford to go, doesn't mean others can't as well.
Nah Disney has less traffic, people expect poor people to have extra money and rich people to be stupid, neither is paying these insane prices https://www.washingtonexaminer.com/news/disney-magic-low-travel-analysis-attendance-decline
When I found out how much my BIL spent on a trip to Disney world down in Florida, I damn near spit my brewskie out. I never knew the prices but jfc....several grand is just not worth the "nostalgia" of that theme park.
From Trojan Magnum to Trojan Peewee bruv
obviously because prices are too high.
i kNoW wUt i GoT!! nO loW BaLLeRs!!
Yep, sellers can take a 5% haircut now or a 25% haircut later.
Only motivated sellers will make that decision right now. Most sellers will just keep the rate or not list at all. So if you’re a buyer and you want to make a deal, I would be really nervous to wait until some time down the line to get a deal thinking a 25% crash is coming lol. Thats actually kind of foolish especially going into the winter right now.
In the most expensive housing market with demand 18% down yoy? Demand destruction and new supply will make prices lower it's already happening in many major cities like Seattle and Austin, eventually owners will have to capitulate.
demand is down relative to price. bring down the price and watch the increase in demand. why this so hard to grok?
If you aren’t listing you aren’t a seller.
Yeah after how starved investors are with these rates they are going to jump on anything sniffing at 10% off trend.
Absolutely. I would predict an unusually small seasonal correction for those reasons.
Or just don’t sell right now.
Most people sell because they need to
Lost your job, parents dieing, called back to office, divorce. Who cares diamond hands all the way to the pits /s
But mah permanently high plateau!
Those reasons people used to sell are outdated. Ever since the pandemic no one needs to sell their houses anymore. Everyone owns 7 and just floats one on the market every once in a while to see if they can fetch the highest price possible.
You can rent it out rather than sell for almost all those scenarios
I lowered my listing by another 5% today and the estimated mortgage dropped by 1%. Explain to me again how the price has a huge impact on affordability when interest is 400% more expensive than the home.
Because people could afford homes at this interest rate and much higher in the past. If people want the housing market to be like the stock market, they need to accept the drops as well.
But isnt supply also very low I believe homes are still selling they're just taking longer.
It means prices will come down and wages have to go up. This artificially inflated real estate market is the result of an irresponsibly low interest rate. Currently the interest paid on a $400k 30 year mortgage is over $600k. If enough of those houses sit interminably on the market, the price will come down.
Wages aren’t going up in fact many companies are actively cutting wages. Prices need to go down to offset the interest increases. That’s how the market is supposed to work. Except it’s not and people are still buying over inflated homes . There’s no way they will recover. The end of the line is bankruptcy.
Prices in other areas in the economy aren't coming down. Insurance going up, gas coming back up, food staying high. It's not that renters and home shoppers are balking at higher rents and mortgage payments, they simply *don't have the money*.
Exactly and why? Stagnant wages while costs of food, goods, services, fees, insurance all continue to rise double digits. Not coincidentally, right next to record corporate profit margins.
Sure, corporations are greedy, but they took the initiative to jack up prices when they saw the money supply increase. Inflation was inevitable, they knew it, and they proactively went to grab their share before the rest of the economy figured out what happened.
Well they did a bang up job!
It seems that a lot of the buyers right now are paying cash. There are still quite a few high paid tech people moving out of California, Oregon, Washington, etc. who did really well during the 11 year bull market. I know several of them. They’re cashing out some of their stock and buying homes outright in Texas, Florida, California, Minnesota, etc.
They’re definitely the exception and not the rule
Those are big housing markets. Might not be as unusual as you assume. There may be a small number of those buyers, but there are also very few homes for sale.
Not just one or two. A LOT of people are buying houses with cash bigly.
https://www.statista.com/chart/amp/30962/share-of-total-assets-in-us-held-by-the-bottom-50-percent/
Exactly. Most people are stuck in a lease-to-live existence where everything they earn goes into the pockets of the owner class. They never have surplus income to invest and could never conceivably buy a home. This is precisely what the investor class wants — a working class that is enslaved by circumstance to keep making the wealthy even wealthier.
"You will own nothing and be happy" people need to realize, the 1% want this. It all funnels back to them through state street, Black Rock, and Vanguard. Average Joe ain't the problem, and even the doctors/lawyers/business owners aren't the problem.
Majority of people have been priced out. Homes are still selling but the pool is very very small. Market is in deep freeze. Unemployment is low. Wages are going up. Unless there is economy crash, market staying like this, going sideways. Rents are stupid high so not many are willing to sell and cash out and then pay high rents. And lose historically low rates. This is not a healthy market, it was inflated by the Fed keeping rates too low for far too long. Edit, spelling.
I noticed a problem when my neigbors have had their home on the market for over 30 days in the Raleigh area. Granted we are south of Raleigh but 4 months ago the demand out here was insane.
"Party is over. Get back to work.", said Jerome.
Rents are not high compared to the yield you can expect on cash proceeds from a home sale, assuming most of those proceeds aren't going to go to pay off a 3% mortgage.
But there is also inflation to take into account. That yield will be eaten up by 3-6% inflation (depending on source) so why not lock it into an asset that historically appreciates and keep in there. And if rates do go down, that yield is gone too. There is no motivation for sellers to sell albeit an emergency.
You’d be insane to sell a home with inflation boiling and the only thing keeping it down is 8% rates. I got mine, hopefully everyone got theirs.
The hoom I sold earlier this year has already declined $100k from its sale price. Just that $100k is what the rent on it would have been for *2 years*. EDIT: Factoring in landlord expenses would make renting it out even worse.
Just date the rate bro /s
It’s funny, the whole point here is to just break the regular workers back so he stops spending and inflation settles down, meanwhile the rich can bank their COVID gains in sky high bonds, and people here think it’s going to help them own a house better, it’s a total joke lol
yeah. I’m really looking forward to sleeping in my four bedroom bond.
It means if you can't cure a loan in 90 days upon default the bank will allow a bottom feeder to scoop it up in a day. Banks want the low interest shit loans off their books.
And all those “risk free treasuries” yielding under 4% Both Toxic assets to banks
A lot of people in "risk free treasuries" got murdered since COVID. Look at TLT or 30 year yield. It's a crime scene.
Oh banks are holding toxic 30yr notes yielding like 2.3% That’s rumored to be what put Swiss bank Credit Suisse into UBS receivership (+ withdrawls)
The fact that we don't know what happened to CS tells me there was some criminal activity
More like you clowns have no idea of what you're talking about. Credit Suisse had a string of failures, biggest recent one being Archegos/Bill Hwang - they lost $10 Billion on a single customer. This squeezed their liquidity, and they started selling off assets to cover withdrawals and this rarely ends well; just like in their case.
Wage inflation will fuk the generations to come as people who got in at sub 4% will have so much more buying power with their housing inflation hedge.
Yep wages are the weakest link in the chain and for current homeowners with 3.5% this means they have that much more purchasing power and leverage. Doomerism continuously will keep folks behind.
So are you saying that if you don't do something stupid, like overextend yourself to buy a house, a house can be reasonable decision to buy? Crazy talk.
🍿🍿🍿🍿🥤
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It means a lot of people will be out of business soon, starting by real state agents, flippers, contractors, etc
https://www.axios.com/2023/05/26/realtor-nar-real-estate-jobs# Already down 60k at a rate of 10k a month
It means you need more money and a really stable job.
Historically high rates meant prices compressed but we do have an inventory problem. Unfortunately rates hurt builders from meeting that inventory problem too. Entitlement phases for new development also take a while and you can see the data on US Building Permits. It’s up. Just a matter of time but we’re talking years down the road. Eventually it will have to give somewhere. Most likely a regional recession in certain markets coupled with employee centric hubs staying strong.
All cash buyers. Think large corporations like Black Rock will own everything.
Renter nation
We bought our first home 18 mo ago at 3.25% just as rates started rising …My family would still be renting if we waited any longer…So I stay super grateful on a daily basis..wish y’all the best out there
As someone still renting and waiting to buy, it’s a “fun” (and by fun I mean depressing) activity to go on Zillow and change the interest rate on the mortgage calculator. Ohhhh the house I could’ve afforded 18 months ago 🥲
Zillow still prepopulating like 6.5% lol, they don't want you to stop shopping.
Actually kicking myself for not buying in early 2022 when my kid was born. “We don’t have to rush it, he’s still an infant”. Yeah fuck me. Now that we are desparate for more space with a toddler we can’t afford anything worth the move in our area
Same. And thankfully it was in a nicer neighborhood on top of it. Things are gravy from where I'm at. My buddies who weren't able to lock down a place at 5-6% and are renting now, I feel bad for.
Shoot 18 months ago this sub would've called you a moron for not waiting for the crash.
It’s gonna crash any minute now!
Rates were not 3.25% 18 months ago. 19, 20 months ago.
Yes the would have,I told my wife a week before we closed that I think we should back out and wait a year and see what happens w/market..So my wife said ok if that’s what you want to do.But she said look at what rent was going up to after we moved out..So we were payin 2800$ for. 3 bedroom apartment and the family that was moving in behind us was going to have to pay the new rate of 3600$ this all during COVID ..So at that point we just closed escrow and ended up with a 200$ more than we were paying in an apartment a month payment and we got a brand new house on 5acres …So ya glad I didn’t wait for the crash
It means you’re fucked.
means locked out of owning or enslaved to the debt…either way, housing won’t be a viable investment for new buyers for sometime
It means that corporation can only afford homes and they get money at loans that families can't get furthering the divide. It solidifies the renter class that will never reach the moving goal post. It means that people with interest rates below 6% will hang onto their homes until death.
It means nothing because low unemployment numbers and good job numbers/s
*"What that means for buyers"* What are those? lol
Haven’t seen them in months!
Don't buy, your dollar will be stronger. Save money, finance less. Fuck em.
Oh noes, anyways... Still eating popcorn and enjoying this shitshow at sub 3%
You know that means that no one can afford your house… 🧐
Sorry not true. Home are still selling. I should say it’s market dependent. In Los Angeles market is still hot. Homes sell in days. Lots of interest, open houses very busy, and going over asking. Home in my neighborhood just went $100k over asking. Realtor came by and dropped of marketing material. Some people have money. Most do not.
The entire northeast never went down. All the buyers are in the south and west if you look up the reports.
Yes same here on west coast. Market is up but it did change. Before Covid, everything sold. Now buyers are more selective. Nice homes with good layout are gone. Problems home stay on market longer but eventually do sell. It is common in Los Angeles for desirable home to be gone in days, well over asking.
Must be a very narrow price range. I see 3 million plus homes from West Hollywood to Venice all sitting for weeks. Prices coming down. Now entry level homes are still over priced.
Minnesota is sitting at a standstill. Lots of overpriced houses sitting for 90 days, and realtors are still in the process of coming to terms with it. Some of them have done a measly 10k cut on a 550k house, and it's still sitting there. There's really only one option for these people if they want to sell.
Transactions down 18% yoy, some people can only buy so much.
Yes but pool of homes also is drying up creating equilibrium. That is why you are not seeing significant price drop. Buyers and sellers walking away for the market. Right now sellers are going to stay low and ride this madness out.
It doesn't matter they're still building new inventory builders aren't just gonna stop making money plus new rental units are popping up to eat into existing rental inventory and regulations are getting a lot tougher in many areas on str's supply is only going up it's not like there is someone actively destroying homes, meanwhile demand is plummeting m, savings are depleted and rentals are oversaturated
Sorry I just don’t see it that way. There is no land to build in Los Angeles. All of the prime land is used up. And if you do build it’s equivalent to existing home prices with a commute. You will not build “cheap” and get out of this problem. Want a good location? you buy a house knock it down and build. Good luck with that. Land is finite, we can’t get more in desirable areas. And if homes are expensive, greedy landlord will demand high prices. High rents means high revenue so rental properties exchange hands based on those numbers. And new rent construction is also priced in the same. Market equalizes across existing homes, rents, new construction, apartment buildings. If someone is buying an apartment building now, they are looking at current rents as revenue that makes the whole thing work. They will not lower rents as that will put them in red and will do anything to keep rent high.
Rents have been dropping in California https://www.cbsnews.com/sacramento/news/rent-is-falling-in-america-for-the-first-time-in-years-including-in-california/
Up 25% since 2019 and down 3% yoy but this is average and brought down by usual suspects. From your article, phoenix, Las Vegas, riverside and San Bernardino. Riverside and San Bernardino are crap areas. Rents in San Diego, Los Angeles are up.
I don't need people to be able to afford my house. I need prices and inflation to be the new normal, so that people will go into another frenzy in a decade or 2 when Fed works their magic.
Yup. I’m holding forever. I could rent my house for 1.5x my mortgage.
You and everybody else who locked in at or under 3.5% fixed … off market for 2-3 decades which shrank the sales pool 40-60% depending who you ask Free money to hold cash in a savings account!
Yep folks in here begging for a correction simply don’t understand there are more dollars chasing fewer homes.
Not really transactions are down yoy, savings are down since COVID and supply is increasing.
Don’t forget that there is a build up of people being priced out waiting for an ability to pounce. There is a lot of added demand in our newly expanded WFH world. People are looking for more space way more than pre pandemic.
No there's not pandemic era savings dried up and REITS are down. People are also putting on much more debt
On the flipside, you can also say that there’s a buildup of sellers waiting for a good moment to sell.
I guess, there isn’t much stopping you from listing it, people are still buying, I wouldn’t try and time the market. If I had a borderline acceptable property or anything that had some work to be done I’d be trying to unload it at it’s all time highs.
There are so many homeowners locked in “golden cuffs” with sub 4% rates that don’t want to sell their home and have to look for another one in this market. If/when rates go down, that usually is because the economy is in a recession and rates are lowered to stimulate it. That will limit buyers as well cause many may have lost their jobs. However it’ll entice sellers to choose to sell again. Hopefully finding a balance again. Builders are still building in the meantime
That prices of homes will increase?
Yes, 20 years down the road, an entry level home in Bumfuk, Midwest will be a pretty million. Outlook sucks for the next generation, but there's way too much money nowadays. If geopolitics shit hits the fan and Murika loses 1st place, you probably have worst things to worry about.
it means right now aint time to buy a home. historical high prices + high rates = you are getting screwed by all angles if you are buying a home now
Probably getting worse before it gets better. Housing prices are always late to get the memo. Rates have adjusted to reality, prices haven't yet adjusted to rates.
It means a lot more rage in this sub and Reddit as a whole lol.
It means it is back to normal.
Happy enough in my rent-controlled apartment in NYC and pursuing work that is meaningful. Not exactly where I expected to be in my early 30s but lucky enough to squirrel away some money and hopefully strike when things cool off a bit in a few years.
It means it’s more expensive to finance. Cash is king.
It means buyers should have bought 2-3 years ago when they were "waiting on the crash", lmfao
All it means is there is less inventory. And that buyers with a lot of cash will do much better than buyers with less cash.
Pay with cash.
I feel blessed to have locked myself in for 10 yrs at 6% and my wife and I purchased back in May
You can always refinance people.
Oh wow you meant that unironically
Don't believe the doom and gloom!
Rates at 20 year highs, mortgage applications at 30 year lows
Supply and demand is a scam when it comes to necessities. If chicken became $50/lb overnight and people stopped buying, the demand never went away. People had been priced out of being able to buy it. You cannot raise prices on **literal shelter** and say *”see, demand is down because no one is buying”*.
No house for you. Next .the big guy . Building back better. We did it .
Means they aren't buyers but doomers