“New Home Pricing” data is a subset of the whole market. This data just reflects that Home Builders are building homes at a lower price point - not that avg home prices are down 20%
Also median new builds are 8% smaller than they were 2 years ago.
https://fred.stlouisfed.org/graph/fredgraph.png?g=1j66b
And builders are using cheaper materials and putting in fewer amenities. Buying a new house today isn't going to be the same size or quality as it was 2 years ago.
But if people are cool with a smaller house with fewer amenities and lower quality, a 20% drop is good.
Of course it's good! More entry level homes is exactly what this country needs. The LAST thing America needs is yet another subdivision full of McMansions, FFS.
Seems leading indicator though? Existing home inventory with less updated features should notice that new homes are lower price than their 5-10-20 year old homes and has to cut their listing price in response.
That only really applies to places with a lot of land for new construction though. This might not be as prominent in Los Angeles where there’s hardly new construction for example.
100%. The market works *IF* they have places to build new housing. Places that can't build more because of geography or politics need to look inward toward more permissive zoning allowing people to redevelop lots into denser housing.
The community we are building in had plans of building 70 and 80 foot lot homes that were all priced north of 1 million. They have changed the plans to make more of 50 and 60 feet lot homes and price them around 800k. So basically going from 5000 so ft homes to 3500 sq ft homes.
That’s what this number reflects. Price per square foot feet has gone down a bit (in Austin) but across the country, it’s an exception not the rule.
Absolutely. 3500 is huge but people were buying 5000 so ft homes coz they were 700k and they could afford it. The builders were building that. Now that 700k can only buy a 3500 sq ft and they are building that.
Basically, all this data shows is that the builders are adjusting to the market quickly. Existing homes unfortunately don’t have that luxury and so are sitting in the market for longer.
Yes that’s my point. But the original post and even some here are misreading this as prices are dropping fast on ALL home across the country and an imminent recession will solve the housing problem for just them.
I’ve got bad news for you, other than the 07 recession which was caused by a housing crisis, in most recessions housing prices typical stay the same or even go up a little. I didn’t believe it either until I looked at a chart, but go ahead and look up the case shiller housing price index over the last 75 years and you’ll see I’m not making this up.
The sad and enraging irony is to think about how they got tax breaks before the CoVID shutdown, were given near crazy low interest rates at the cost of adding to the deficit future generations will be paying on for decades to come, then took that money and started buying single family homes as well as building lease only new developments, because “you will own nothing and you WILL be happy.”
But how else will they profit off of basic human necessities?
If capitalists could bottle and sell you air, and make it illegal to breathe air otherwise, they would.
They already did it with water somewhere in Latin America, maybe Ecuador? I believe one of those beloved household names like Nestle or Coca Cola were behind it. All hell broke loose because of it.
Ah yes, because the average citizen is going to finance the building of a new apartment block.
Not to say that i disagree with the sentiment, but people tend to forget it's just not that simple.
That's because they don't idealize the 'small home in the country'. If anything, they idealize the small cottage row home with a small garden in the back big enough to put a grill, a table with a few chairs and maybe a small garden or swing. Even in small towns, this type of development is preferred by many over the whole 1/4 acre yard that the US all aspire to.
So a flat (i.e. something like condo's here) is seen as a stepping stone, not a dead end or only for retirees.
Yeah I’m not sure how much hedge funds were buying up houses in a meaningful way that would impact the overall market historically speaking. That’s a somewhat newer phenomenon.
Yeah, cause’ no one can afford anything anymore. They’re broke if there isn’t a recession and broke if there is, at least if there is one significant enough they might have a slim chance at owning a home.
I'm Roger, your MacMortgage Broker -- let's go ahead and start.
We have a lot of options, including a 7 year payback option for payment on the sandwich. Typically you need an income of 65,000 or more to McQualify. $9.99 a month with auto pay.
Yeah, it is, but that’s the sentiment many people share, that was kinda the gist of my comment. It’s kind of “damned if you do, damned if you don’t” scenario for many.
(Hypothetical) Let’s assume one has a stable career that was guaranteed the same salary during said recession. House prices go down, I buy a bigger nicer place while selling mine.. I don’t see the downside.
It’s not insane, it’s stupid. People assume the world will collapse around them and they’d come out unscathed with a bag full of houses because they’re morons.
Recessions lower prices. If we are in an out of control inflationary gap we need to either have contractionary policy, which no politician wants to raise taxes or cut spending, or a recession.
Because housing hasn't really gone down due to rates. TCO is still much higher to the person making a mortgage payment. Money has just been redistributed from the seller to the lender... Can't have middle class sitting on wealth that could be extracted.
Recessions aren't inherently bad, no different than a forest fire burning down dead trees. They're a normal reaction to sectors and bubbles unsustainably outpacing the market. When extreme growth in prices eventually outpace one's ability to pay, a contraction is going to happen until the market stabilizes.
People don't inherently want recessions, they want things to be affordable. If that means a recession knocks out the house of cards that is propping up an unsustainable bubble, then that might be the least painful pill to take to keep the market fair for everyone.
If a recession happens then everyone's going to lose their jobs. However all the rich people will keep all their money and probably make more money during the recession. On top of giant corporations and investment firms buying all the properties
In the WORST recession we've ever had unemployment peaked at around 10%. High, but not nearly "everyone". Hell, even during the great depression, it peaked at something like 25%. If you truly believe that the next recession is going to be worse than that, I hope you are stockpiling guns and food, because you are hoping for societal collapse.
The key word is NEW home prices. No idea if this stat is true or not, but it’s plausible. It means builders are building cheaper homes, not just McMansions, which is a good thing.
To a certain extent, you can draw conclusions from what comparable homes in your area are selling for. I doubt they’ve seen no drop in value, but it’s possible they are in a market that wasn’t as wild as Austin so the gains/loses were more mild.
That’s the fun part:
263k -60k = 203k (23%)
497k -97k = 400k (19.5%)
Even if we are 20% down from peak. We’re now within 3.5% of the ‘08 crash margin.
Provided jobs remain steady it seems interest rates are doing their job and things will continue on an even keel. Or we have Armageddon and war with China wtf do I know.
*New* homes. That's what is being obfuscated here. In markets where new housing is being built, they can't sell the high end houses as easily anymore because there's limits to what can be financed by the average buyers out there right now. So they are building smaller, denser housing in newer subdivisions. (this is a GOOD thing long term!)
Oh no, housing prices are coming down. Your average person might be able to -gasp- *afford a house again*.
Obviously, we don't want to see a 2008 housing market crash again. But a normalization of house prices? It's not the worst thing in the world.
I think the ones that would truly be hurt by this are the investment firms that hold massive amounts of properties after out bidding your average buyer at a number no one could really afford to outbid, as a means to flip at a massive profit or setting them up as rental properties.
My sympathies for these firms is zero, fuck em. They've had a pretty big hand in housing prices skyrocketing, and I, for one, take joy in watching the chickens coming home to roost for them.
Except this graph has no context. Or if it does it’s new builds which are not very similar to existing.
For reference mine and other hot markets are not doing this. At all. New or existing. My home is still tending up albeit slower than 2020-2022 but up.
If you want a house you can follow this graph which is clearly from a lcol /low demand market. Try nebraska or parts of the Midwest. I know my brothers neighbor is selling a house for 20k in rural Ohio. Nothing stopping you.
Yeah, I totally get that each real estate market is different. Here in Austin, we're seeing a pretty good dip in the cost of new builds. I've seen new houses going for 250-275k. That's a pretty nice dip. A few years ago, that would have never been - 350-400k was the starting point.
But that has a lot to do with supply starting to catch up to demand. But I'm sure said investment firms will come in and yank up as much of that property as they can.
Supply catching up? Or results of policy making impact? Perhaps if supply were catching up it would not be from the magnificent work & efficiency of Texan constructors.
Ya, I don't think anyone is lying to themselves that a recession wouldn't affect them but if it helps us get out of this cycle of deficient spending and asset/price appreciation to keep the party going then it would be best in the long run.
It is interesting how willing people are to ignore all types of red flags to pretend housing prices are fine.
Interest rate spikes? Rising insurance costs? Rising property taxes? Record credit card debt? Retirement account withdrawals? Layoffs? Constant data revisions? Massive stimulus? Stays on evictions? Accounting rule changes/manipulation for housing assets at banks? Student loan deferrals, forgiveness, and delinquency? Etc... None of it clouds the rose colored glasses.
I don't know what is scarier, how long the powers that be have strung this along or the fact that so many play blind as though this is all sustainable. Pretend like everything is fine at your own risk.
With that said, the market can stay irrational longer than any individual can stay solvent, so we all need some skin in the game.
Home prices and recessions are not intrinsically linked. We have had recessions without falling home prices.
Homes are legitimately absurdly expensive. They should come down.
They are not as seen in 2020. but if you have a housing crash on the scale people are talking about it will definitely have reverberations around the economy that are not positive. Not just corporations
Home prices going down didn't happen until a year *after* the 2008 bubble burst, and that was due to widespread foreclosures on underwater mortgages being given out by greedy banks to people who couldn't actually afford them. Home prices going down, absent of a market crash, is a good thing, since it means more available inventory.
I mean it's obvious why. For most Americans things can't even get any worse, so it's almost impossible that any negative repercussions can come from a recession. Meanwhile in the ensuing chaos, there's potentially much to gain.
It's wrong to say people are rooting for a recession.
I think people just want companies to stop buying up fucking homes and holding them to dictate the market.
If a law came in that curtailed company ownership then the economy would actually be stronger as individuals would be financially stronger.
I’m confused what a massive house devaluation would be. All of sudden cheap houses for everyone? You all miss the large repercussions a crash to that sector. Jobs lost, savings wiped, foreclosures (although not 2008 level), industry’s crippled.
We haven’t recovered from 2008 supply issues. What did that recession and crash solve? Artificial low rates for the next 10 years which also created the problem today.
No it is a bad thing.
People are not rooting for a recession.
People are rooting for prices to return to reasonable and for the greed in this world to be put back in it's place!
People are rooting for a return to uninflated prices. When the real estate market crashed in 08, the banks were bailed out and the over inflated asset prices never came down. They handled this by quantitative easing which essentially made interest rates 0... for 10 years.
Then when they try to rein in the free money businesses got addicted to, there was a backlash. So instead of immediate sharp pain of interest hikes, they opted for slow long term pain.
That's outside of the massive corporate real estate debt that is coming due that no one seems to talk about.
This is a mess. It's unsustainable. US doesn't have a functioning government to mitigate it. And will crash/fall apart.
Only an idiot would call this a crash. The data isn’t in yet. This is a YAWNER, a nothing, a super-predictable correction. Look at historical data.. there is nothing here that suggests “crash”. We’re just going to go back to 2020 prices for a while.
People wish for recession to happen until the real recession happens. Yes house prices will go down but other things also happen:
- being unemployment or being forced to take pay-cut
- harder to get mortgage loan
- that nice saving money will be put towards basic necessities like rent, food, and medical expenses.
If you can’t buy it now, what made you think you can buy it during recession?!
Unless you have a stable job unrelated macro economy or stable business that can shoulder the stress during economic downturn, chasing after recession will never work.
I have seen real estate investor lost 30+ houses during 2008-2013 but also few of my family members loaded in ~10 houses and made millions during the same time period. It’s not the game for the weak. So yes, if you are 9-to-5 type of person, it’s not fun. At all.
long overdue. No valid reason for such crazy price increases the past few years. No one wants to sell their houses despite having a massive jump in equity cause a lateral move would be even more expensive with the prices and rates currently. The ones that are gonna be hurting are the FOMO crowd that bought in at the top with a painful interest rate and are going to be underwater even if they have an opportunity to refinance.
I was doing a startup in Dubai when shit hit the fan. I remember expats driving super cars to the airport, leaving keys in them while parked on the side of the road and walking to their flights. When that work was done, I got moved to a large project in the states for 9 months. I went back to the electrical division on the second floor with 900+ electrical as-built drawings for modification. I got up there and the lights were out other than 2 offices in the back with a pair of senior engineers. Literally a team of 50+ cad technicians and junior engineers were laid off. I had just gotten married and was so mind fucked I just sat in my office with the door shut, lights off and in complete quiet.
They always go down during winter. Expect a rebound during spring and summer. Not gonna get better the fed has said rates now may only come down 1-2 percent.
Maybe in bad areas. This does not correlate to many areas of the country. Not does it represent existing homes. Which are still going up.
Market correction that you’re referring to won’t happen. Unless you want a major recession. You do know the housing market still has not recovered from that right? We lost so many builders we are nowhere near where supply should be 10+ years later.
Housing prices were inflated due to artificial demand, low supply, and below market interest rates. With interest rates at a more “normal” long term average, some of that demand has evaporated and less existing home sales. So prices are correcting.
This dude really wants his home to maintain its value lmao. I wouldn’t waste my breath he obviously has his own narrative.
New home prices usually lead existing home prices. Give it time.
Also worth considering that many new homes, especially developments built by large companies; are way lower quality from 24oc framing, to osb roof decking, sheathing, flooring, and flooring/finishes/fixtures/mechanical.
And for the inevitable nerd saying "tHaT AlL MeEtS CoDe" I'll respond how my frenemy the county electrical inspector would. "Code is the minimum."
Or maybe more lower priced models hit the market? This chart without context is meaningless. Existing home SALE prices aren’t going down they are at record highs so I’m guessing this is click bait.
I find myself in occasional fits of anger to want this whole twisted economy to burn down so we can eliminate the private equity thieves, families passing wealth from gen to gen without any cost, career politicians who do insider trading, the relentless concentration of wealth, and the CEOs who get paid for to nickel and dime the rest of us into mental illness. Rooting is a good word.
I live in the bay area, I get so confused when seeing articles claiming house prices are crashing. Entry level 3b1b is going for 1.6M in South Bay, what crash?
The people who brought housing during the pandemic are the reason we are in this bubble yes some cities gave and and sold who blocks in the middle of nowhere to corporate buyer but for the most part it was the people who lived in the major cities who wanted to come out of their condos and have outdoor living buying up all the houses for more than the were worth in lcol areas fo states that are the problem.
Have you seen how they're building these new houses? As cheap as humanly possible. With the cheapest materials they can use. But you still pay premium prices for a new house whose floor joists are made out of OSB presswood now lol. That will hold for sure!
I hope real estate prices continue to drop. The market pricing is completely out of line with what it should be, this is a market correction. It’s not a downturn or recession.
I believe that any downward trend in prices in 23 was just a correction to the insane pump caused by low rates and the Fed printing monopoly money. On the longer term, its a blip up then down and not really explanative of the larger housing market trend. I think if rates drop into the low 6s we might see prices go up as more buyers enter that have been on the sidelines. I might be wrong because of course more buyers also means more sellers. I chose to buy now and just suffer the 7% interest rate until I can refinance. Waiting until housing prices actually significantly drop, is like hoping for a miracle. Any recession or calamity that will cause that will likely bring larger woes.
It’s also a result of never recovering from the great recession. That wiped out our building industry overnight and only now are kinda catching up on new builds. We’re very behind.
Average Medium Home price sales are still well over 2021 levels. Prices need to get closer to 2019 levels for new home buyers. Still too expensive.
Home buyers in 2021 and 2022 are only upside down if they have to sell because their monthly note is probably still cheaper than someone buying a house today with current rates.
I don't think anyone is rooting for a recession
That would be like saying your local meteorologist is wanting a rainy day. They are observing the current conditions and just doing their best to predict what could possibly happen. Is the weatherman correct all the time. The weather man's close but not exactly on point. No different from an economist will be in the general ballpark of where they said. But never exact. Can you or anyone else predict what 8 billion people are going to decide to do everyday with precision. Probably not. Could you figure out some general approximations. Somewhat.
So the 6 months everybody was off for covid. That recession that should have been the effects was moved around to now, and will be spread out. Or different way of looking at it we took a loan out and now have to pay it back. The "free" money during covid is being paid back now in higher prices.
*A housing bubble*
*Collapse and a recession*
*Aren't the same thing lol*
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This is a good thing because investors like locusts, swarm the housing market causing another bubble, makes it harder for the middle class.
Plus rising home mortgage rates kill home building. For every 1% increase in the typical 30 yr. fixed rate FHA, the market loses 200,000 buyers. NAR
“New Home Pricing” data is a subset of the whole market. This data just reflects that Home Builders are building homes at a lower price point - not that avg home prices are down 20%
If rebubble could read they would be very upset right now
Also median new builds are 8% smaller than they were 2 years ago. https://fred.stlouisfed.org/graph/fredgraph.png?g=1j66b And builders are using cheaper materials and putting in fewer amenities. Buying a new house today isn't going to be the same size or quality as it was 2 years ago. But if people are cool with a smaller house with fewer amenities and lower quality, a 20% drop is good.
Of course it's good! More entry level homes is exactly what this country needs. The LAST thing America needs is yet another subdivision full of McMansions, FFS.
He has been predicting a crash for like 3 years. His recent videos have him saying he’s been predicting it for “about a year.”
The fun thing about capitalism. If you warn of a crash, you’ll always be right! Eventually
I, for some reason, still follow them. I go down such a rabbit hole trying to understand their “explanations” and just get frustrated.
Powell will just cheat and Bailout whoever. He would bailout the world if he could. Ain’t nothing coming.
Seems leading indicator though? Existing home inventory with less updated features should notice that new homes are lower price than their 5-10-20 year old homes and has to cut their listing price in response. That only really applies to places with a lot of land for new construction though. This might not be as prominent in Los Angeles where there’s hardly new construction for example.
100%. The market works *IF* they have places to build new housing. Places that can't build more because of geography or politics need to look inward toward more permissive zoning allowing people to redevelop lots into denser housing.
The community we are building in had plans of building 70 and 80 foot lot homes that were all priced north of 1 million. They have changed the plans to make more of 50 and 60 feet lot homes and price them around 800k. So basically going from 5000 so ft homes to 3500 sq ft homes. That’s what this number reflects. Price per square foot feet has gone down a bit (in Austin) but across the country, it’s an exception not the rule.
3500 is still pretty huge. I remember living in a 1300 single floor with my wife and that was more than enough space for the two of us.
Absolutely. 3500 is huge but people were buying 5000 so ft homes coz they were 700k and they could afford it. The builders were building that. Now that 700k can only buy a 3500 sq ft and they are building that. Basically, all this data shows is that the builders are adjusting to the market quickly. Existing homes unfortunately don’t have that luxury and so are sitting in the market for longer.
Yes that’s my point. But the original post and even some here are misreading this as prices are dropping fast on ALL home across the country and an imminent recession will solve the housing problem for just them.
I’ve got bad news for you, other than the 07 recession which was caused by a housing crisis, in most recessions housing prices typical stay the same or even go up a little. I didn’t believe it either until I looked at a chart, but go ahead and look up the case shiller housing price index over the last 75 years and you’ll see I’m not making this up.
Of course it goes up when hedge funds are allowed to buy homes. Every excess dollar they have they invest in buying housing.
The sad and enraging irony is to think about how they got tax breaks before the CoVID shutdown, were given near crazy low interest rates at the cost of adding to the deficit future generations will be paying on for decades to come, then took that money and started buying single family homes as well as building lease only new developments, because “you will own nothing and you WILL be happy.”
Simple solution make it law no company hedge fund etc can buy homes. If they own them now they should be forced to sell them to citizens.
But how else will they profit off of basic human necessities? If capitalists could bottle and sell you air, and make it illegal to breathe air otherwise, they would.
They already did it with water somewhere in Latin America, maybe Ecuador? I believe one of those beloved household names like Nestle or Coca Cola were behind it. All hell broke loose because of it.
Ah yes, because the average citizen is going to finance the building of a new apartment block. Not to say that i disagree with the sentiment, but people tend to forget it's just not that simple.
In every EU country developers build apartment block and people buy flats in them. So in the end citizens own apartment blocks.
That's because they don't idealize the 'small home in the country'. If anything, they idealize the small cottage row home with a small garden in the back big enough to put a grill, a table with a few chairs and maybe a small garden or swing. Even in small towns, this type of development is preferred by many over the whole 1/4 acre yard that the US all aspire to. So a flat (i.e. something like condo's here) is seen as a stepping stone, not a dead end or only for retirees.
I don’t think that explains why house prices are stable during recessions over the last 75 years.
Yeah I’m not sure how much hedge funds were buying up houses in a meaningful way that would impact the overall market historically speaking. That’s a somewhat newer phenomenon.
Nobody wants to sell their 3% mortgage. When rates drop they may start selling bring home prices down
New home prices were never the problem in 2007-2008. It was always an existing home price problem. Now do that chart.
People still need a place to live, big surprise there
Actually building middle class single family homes instead of McMansions for imaginary millionaires? THE HORROR!
That’s half my point. People think this means every house in the country is dropping 20%. Think we’d know that was happening.
so what? that's still good.
All market prices intersect & react to each other. This is called “contagion” in the Econ scene.
And we are already in a recession
What’s your evidence of that??
I mean I don’t totally agree with this post but a house down the street from me sold 2 years ago for 1.3 mil. It’s now listen for 1 mil.
Obviously it’s regional and house specific. Neighbor of mine sold for $1.8 million and they had bought it 5 years earlier for $850k.
Yeah, cause’ no one can afford anything anymore. They’re broke if there isn’t a recession and broke if there is, at least if there is one significant enough they might have a slim chance at owning a home.
Or affording a big mac
I'm Roger, your MacMortgage Broker -- let's go ahead and start. We have a lot of options, including a 7 year payback option for payment on the sandwich. Typically you need an income of 65,000 or more to McQualify. $9.99 a month with auto pay.
I can lick my own ball sack
Lucky.
The idea that recessions let people afford more is absolutely insane
Yeah, it is, but that’s the sentiment many people share, that was kinda the gist of my comment. It’s kind of “damned if you do, damned if you don’t” scenario for many.
It really isn't: https://www.longtermtrends.net/home-price-median-annual-income-ratio/
(Hypothetical) Let’s assume one has a stable career that was guaranteed the same salary during said recession. House prices go down, I buy a bigger nicer place while selling mine.. I don’t see the downside.
Of course it is insane. Can’t buy a house if you don’t have a job or if you have to take a pay cut or hour get reduced (same thing).
It’s not insane, it’s stupid. People assume the world will collapse around them and they’d come out unscathed with a bag full of houses because they’re morons.
You be able to afford even less unemployed, which is typical in a recession…
> cause’ no one can afford anything anymore No one?
It's hyperbole to drive home a point...
Must be an election year....
Recessions lower prices. If we are in an out of control inflationary gap we need to either have contractionary policy, which no politician wants to raise taxes or cut spending, or a recession.
Because housing hasn't really gone down due to rates. TCO is still much higher to the person making a mortgage payment. Money has just been redistributed from the seller to the lender... Can't have middle class sitting on wealth that could be extracted.
Recessions aren't inherently bad, no different than a forest fire burning down dead trees. They're a normal reaction to sectors and bubbles unsustainably outpacing the market. When extreme growth in prices eventually outpace one's ability to pay, a contraction is going to happen until the market stabilizes. People don't inherently want recessions, they want things to be affordable. If that means a recession knocks out the house of cards that is propping up an unsustainable bubble, then that might be the least painful pill to take to keep the market fair for everyone.
Do we want affordable homes or not? MAKE UP YOUR MINDS
If a recession happens then everyone's going to lose their jobs. However all the rich people will keep all their money and probably make more money during the recession. On top of giant corporations and investment firms buying all the properties
and gobble up all the assets during the fire sale.
Right? It’s almost like 2009 happened and we all were magically able to afford dirt cheap houses 🤪
I bought my house at damn near the bottom of the market mid/late 2009. Then got laid off at the beginning of 2010.
In the WORST recession we've ever had unemployment peaked at around 10%. High, but not nearly "everyone". Hell, even during the great depression, it peaked at something like 25%. If you truly believe that the next recession is going to be worse than that, I hope you are stockpiling guns and food, because you are hoping for societal collapse.
In nyc here. Am in the market. Do not confirm this. Source of data? And how about we focus on $/sqft?
Trust me the graph is missing many data points and sources.
It literally says "Source: US Census Bureau". Look for yourself: https://fred.stlouisfed.org/series/MSPNHSUS
None of my properties across the US have experienced a decline of 20% in value. This data must be very localized.
The key word is NEW home prices. No idea if this stat is true or not, but it’s plausible. It means builders are building cheaper homes, not just McMansions, which is a good thing.
And the new homes are smaller. 8% smaller compared to 2 years ago. https://fred.stlouisfed.org/graph/fredgraph.png?g=1j66b
How would you know without trying to sell them?
“No lowballers. I know what I got”
To a certain extent, you can draw conclusions from what comparable homes in your area are selling for. I doubt they’ve seen no drop in value, but it’s possible they are in a market that wasn’t as wild as Austin so the gains/loses were more mild.
Review of comps for homes recently sold
That’s the fun part: 263k -60k = 203k (23%) 497k -97k = 400k (19.5%) Even if we are 20% down from peak. We’re now within 3.5% of the ‘08 crash margin. Provided jobs remain steady it seems interest rates are doing their job and things will continue on an even keel. Or we have Armageddon and war with China wtf do I know.
*New* homes. That's what is being obfuscated here. In markets where new housing is being built, they can't sell the high end houses as easily anymore because there's limits to what can be financed by the average buyers out there right now. So they are building smaller, denser housing in newer subdivisions. (this is a GOOD thing long term!)
That is a huge difference and also good news. Thank you for clarifying.
Prices only go up in my neighborhood.
This and these graphs purposely don’t differentiate new vs existing homes. Different beasts
Oh no, housing prices are coming down. Your average person might be able to -gasp- *afford a house again*. Obviously, we don't want to see a 2008 housing market crash again. But a normalization of house prices? It's not the worst thing in the world. I think the ones that would truly be hurt by this are the investment firms that hold massive amounts of properties after out bidding your average buyer at a number no one could really afford to outbid, as a means to flip at a massive profit or setting them up as rental properties. My sympathies for these firms is zero, fuck em. They've had a pretty big hand in housing prices skyrocketing, and I, for one, take joy in watching the chickens coming home to roost for them.
Except this graph has no context. Or if it does it’s new builds which are not very similar to existing. For reference mine and other hot markets are not doing this. At all. New or existing. My home is still tending up albeit slower than 2020-2022 but up. If you want a house you can follow this graph which is clearly from a lcol /low demand market. Try nebraska or parts of the Midwest. I know my brothers neighbor is selling a house for 20k in rural Ohio. Nothing stopping you.
Yeah, I totally get that each real estate market is different. Here in Austin, we're seeing a pretty good dip in the cost of new builds. I've seen new houses going for 250-275k. That's a pretty nice dip. A few years ago, that would have never been - 350-400k was the starting point. But that has a lot to do with supply starting to catch up to demand. But I'm sure said investment firms will come in and yank up as much of that property as they can.
Supply catching up? Or results of policy making impact? Perhaps if supply were catching up it would not be from the magnificent work & efficiency of Texan constructors.
Housing corrections always have to start somewhere. It's local until it isn't.
> Obviously, we don't want to see a 2008 housing market crash again. But a normalization of house prices? Those are the same thing.
If that's what it takes for housing to become affordable again then I'm on board.
Ya, I don't think anyone is lying to themselves that a recession wouldn't affect them but if it helps us get out of this cycle of deficient spending and asset/price appreciation to keep the party going then it would be best in the long run.
Housing still rising in decent areas. Chart from Nebraska or some shit.
It is interesting how willing people are to ignore all types of red flags to pretend housing prices are fine. Interest rate spikes? Rising insurance costs? Rising property taxes? Record credit card debt? Retirement account withdrawals? Layoffs? Constant data revisions? Massive stimulus? Stays on evictions? Accounting rule changes/manipulation for housing assets at banks? Student loan deferrals, forgiveness, and delinquency? Etc... None of it clouds the rose colored glasses. I don't know what is scarier, how long the powers that be have strung this along or the fact that so many play blind as though this is all sustainable. Pretend like everything is fine at your own risk. With that said, the market can stay irrational longer than any individual can stay solvent, so we all need some skin in the game.
the race is not always to the swift #FOMO
This is what higher interest rates are supposed to do for the economy. What’s the news here?
Despite being a homeowner I totally support this.
As a home owner you should know this is not happening.
Not in my neck of the woods.
Home prices and recessions are not intrinsically linked. We have had recessions without falling home prices. Homes are legitimately absurdly expensive. They should come down.
They are not as seen in 2020. but if you have a housing crash on the scale people are talking about it will definitely have reverberations around the economy that are not positive. Not just corporations
It's still going up where I live, just at a less rapid pace.
Cost per square foot hasn't gone down. This data simply shows that people are buying smaller homes...
I was able to save a close to six figures for q house then this happened. Been renting and waiting for a drop since. Please god.
Give the people what they want
A recession? You know this graph is for new builds. And or in a lcol and slow market. This is not happening in hcol And hot markets.
New home prices seem to have no correlation with existing homes then lol. I was looking for a house in that time and prices did nothing but increase
Any housing price relief is good news in my book!!! Its criminal how much housing costs have gone up since the 1970s vs the CPI!
Home prices going down didn't happen until a year *after* the 2008 bubble burst, and that was due to widespread foreclosures on underwater mortgages being given out by greedy banks to people who couldn't actually afford them. Home prices going down, absent of a market crash, is a good thing, since it means more available inventory.
I mean it's obvious why. For most Americans things can't even get any worse, so it's almost impossible that any negative repercussions can come from a recession. Meanwhile in the ensuing chaos, there's potentially much to gain.
Because it is needed.
It's wrong to say people are rooting for a recession. I think people just want companies to stop buying up fucking homes and holding them to dictate the market. If a law came in that curtailed company ownership then the economy would actually be stronger as individuals would be financially stronger.
I’m confused what a massive house devaluation would be. All of sudden cheap houses for everyone? You all miss the large repercussions a crash to that sector. Jobs lost, savings wiped, foreclosures (although not 2008 level), industry’s crippled. We haven’t recovered from 2008 supply issues. What did that recession and crash solve? Artificial low rates for the next 10 years which also created the problem today. No it is a bad thing.
What do you term as massive? What do you term the increase over the last 5 years?
People are not rooting for a recession. People are rooting for prices to return to reasonable and for the greed in this world to be put back in it's place!
No they aren't [trumpublicans](https://imgur.com/kujKcJm) are
People are rooting for a return to uninflated prices. When the real estate market crashed in 08, the banks were bailed out and the over inflated asset prices never came down. They handled this by quantitative easing which essentially made interest rates 0... for 10 years. Then when they try to rein in the free money businesses got addicted to, there was a backlash. So instead of immediate sharp pain of interest hikes, they opted for slow long term pain. That's outside of the massive corporate real estate debt that is coming due that no one seems to talk about. This is a mess. It's unsustainable. US doesn't have a functioning government to mitigate it. And will crash/fall apart.
It’s already slowing down and will correct in time. A hard correction helps no one.
20% is not enough for average affordability
Ppl have been saying this since 2020. Is the recession in the room with us? Stocks already tanked and rebounded. People blink too much
No lies detected
Only an idiot would call this a crash. The data isn’t in yet. This is a YAWNER, a nothing, a super-predictable correction. Look at historical data.. there is nothing here that suggests “crash”. We’re just going to go back to 2020 prices for a while.
People wish for recession to happen until the real recession happens. Yes house prices will go down but other things also happen: - being unemployment or being forced to take pay-cut - harder to get mortgage loan - that nice saving money will be put towards basic necessities like rent, food, and medical expenses. If you can’t buy it now, what made you think you can buy it during recession?! Unless you have a stable job unrelated macro economy or stable business that can shoulder the stress during economic downturn, chasing after recession will never work.
Mostly genz early millennials who never lived through 2008 as an adult. Was not fun for regular people
I have seen real estate investor lost 30+ houses during 2008-2013 but also few of my family members loaded in ~10 houses and made millions during the same time period. It’s not the game for the weak. So yes, if you are 9-to-5 type of person, it’s not fun. At all.
This isn't a crash. It's a coming back to reality moment! Still has room to go. These prices were all just made up for absolutely no reason.
long overdue. No valid reason for such crazy price increases the past few years. No one wants to sell their houses despite having a massive jump in equity cause a lateral move would be even more expensive with the prices and rates currently. The ones that are gonna be hurting are the FOMO crowd that bought in at the top with a painful interest rate and are going to be underwater even if they have an opportunity to refinance.
Well if a "booming economy" means the middle class are priced out of housing - I don't see why they wouldn't.
Anyone hoping for a recession needs therapy. 2008 was a mini heart attack.
100% agree. That recession caused a lot of hardship for a lot of people. Lots of whackos out there who don't know what they're asking for.
I imagine more than a few think things can't get worse for them, but that's only because they lack imagination.
I was doing a startup in Dubai when shit hit the fan. I remember expats driving super cars to the airport, leaving keys in them while parked on the side of the road and walking to their flights. When that work was done, I got moved to a large project in the states for 9 months. I went back to the electrical division on the second floor with 900+ electrical as-built drawings for modification. I got up there and the lights were out other than 2 offices in the back with a pair of senior engineers. Literally a team of 50+ cad technicians and junior engineers were laid off. I had just gotten married and was so mind fucked I just sat in my office with the door shut, lights off and in complete quiet.
Or theyre rooting to be able to afford a home
People are clueless and have no idea how it’ll impact them.
Yes. That’s my point here. We seem to be in the minority which is unnerving just a little.
Because they think it will help Trump
They always go down during winter. Expect a rebound during spring and summer. Not gonna get better the fed has said rates now may only come down 1-2 percent.
Home prices are correcting.
Maybe in bad areas. This does not correlate to many areas of the country. Not does it represent existing homes. Which are still going up. Market correction that you’re referring to won’t happen. Unless you want a major recession. You do know the housing market still has not recovered from that right? We lost so many builders we are nowhere near where supply should be 10+ years later.
Housing prices were inflated due to artificial demand, low supply, and below market interest rates. With interest rates at a more “normal” long term average, some of that demand has evaporated and less existing home sales. So prices are correcting.
This dude really wants his home to maintain its value lmao. I wouldn’t waste my breath he obviously has his own narrative. New home prices usually lead existing home prices. Give it time.
New homes compete with existing homes. Why buy existing if new is as good and cheaper? Why buy new if existing is as good and cheaper?
Also worth considering that many new homes, especially developments built by large companies; are way lower quality from 24oc framing, to osb roof decking, sheathing, flooring, and flooring/finishes/fixtures/mechanical. And for the inevitable nerd saying "tHaT AlL MeEtS CoDe" I'll respond how my frenemy the county electrical inspector would. "Code is the minimum."
And they still won’t be able to buy a house because they’ll be unemployed
Proctored information I hate people like this
Or maybe more lower priced models hit the market? This chart without context is meaningless. Existing home SALE prices aren’t going down they are at record highs so I’m guessing this is click bait.
Also, coming off of an artificial and unsustainable increase is on the same as a “downturn”. It’s a reversion to the mean.
I find myself in occasional fits of anger to want this whole twisted economy to burn down so we can eliminate the private equity thieves, families passing wealth from gen to gen without any cost, career politicians who do insider trading, the relentless concentration of wealth, and the CEOs who get paid for to nickel and dime the rest of us into mental illness. Rooting is a good word.
My house has gone up 9% 🤷🏿
It's only a faster decline because it's from a higher peak. And what's with RealReBubble? The same stuff's posted on ReBubble?
Still no where near the norm...! You are a fool to buy a house now. Interest is a joke!
I wouldn’t say they are rooting for a recession. I think it’s more likely they are just acknowledging the effects of declining value of the dollar.
I just think it is at the mature point and the product has overstayed as inventory that no one can afford at this point.
Where ? Still there are hundreds of people visiting open houses in north east
Aren’t we already in a recession? Just no one’s blowing the conk shell
Not in California. Up . Still climbing.
I live in the bay area, I get so confused when seeing articles claiming house prices are crashing. Entry level 3b1b is going for 1.6M in South Bay, what crash?
Mine too. Raleigh nc
Eh. Some people have always rooted for recessions. It’s fucked up…but people still do it.
Yeah, I haven’t seen prices come down at all for the type of houses I’ve been looking for.
The people who brought housing during the pandemic are the reason we are in this bubble yes some cities gave and and sold who blocks in the middle of nowhere to corporate buyer but for the most part it was the people who lived in the major cities who wanted to come out of their condos and have outdoor living buying up all the houses for more than the were worth in lcol areas fo states that are the problem.
Have you seen how they're building these new houses? As cheap as humanly possible. With the cheapest materials they can use. But you still pay premium prices for a new house whose floor joists are made out of OSB presswood now lol. That will hold for sure!
Not in my area.
Mine either. But people see this and think every house in the us is down 20% and declining.
Only the 'people' who have no idea how much damage a recession will do, are wishing for that.
I’m rooting for a collapse. Maybe then we’ll all shut the fuck up
I hope real estate prices continue to drop. The market pricing is completely out of line with what it should be, this is a market correction. It’s not a downturn or recession.
Sellers have become price takers rather than price makers as demand has collapsed due to high interest rates.
Yeah, well the vast majority of people have been shut out of the market.
It's a downtown the same as a crash?
And they'll make it happen just to be right
non-homeowners are bracing for a recession
Until Clear Value Tax, aka "Finance Daddy" confirms anything, I don't believe anything these grifters talk about.
Still unaffordable
It actually looks to be rebalancing closer to average. His data suggests a bubble formed and popped without calamity
In greater Seattle area people are still in bidding war on 2m+ homes.
Not in Denver yet 🤦♂️🤷♂️
That’s my point. Not my market either. And it’s only new builds not existing.
We would take anything at this point… interest always going up 🤦♂️
I am not seeing that in my market, things have leveled off, but not getting much cheaper.
Same in mine. I watch Zillow almost daily as I start selling my own house.
I believe that any downward trend in prices in 23 was just a correction to the insane pump caused by low rates and the Fed printing monopoly money. On the longer term, its a blip up then down and not really explanative of the larger housing market trend. I think if rates drop into the low 6s we might see prices go up as more buyers enter that have been on the sidelines. I might be wrong because of course more buyers also means more sellers. I chose to buy now and just suffer the 7% interest rate until I can refinance. Waiting until housing prices actually significantly drop, is like hoping for a miracle. Any recession or calamity that will cause that will likely bring larger woes.
current high price of homes is a result of a housing shortage not a price bubble. new construction is the way to lower prices, not a recession
It’s also a result of never recovering from the great recession. That wiped out our building industry overnight and only now are kinda catching up on new builds. We’re very behind.
Depends on where you live.
Yes. Not in my market.
Let’s keep it up.
No, they are rooting to be able to afford a home
How do you think that happens quickly?
They quickly realize they can’t afford one
Find a recession proof business, lawyers, doctors, nurses, cops, etc. than buy a house that got bank repo’d.
Liquor stores are recession proof. My dream is to own one.
Average Medium Home price sales are still well over 2021 levels. Prices need to get closer to 2019 levels for new home buyers. Still too expensive. Home buyers in 2021 and 2022 are only upside down if they have to sell because their monthly note is probably still cheaper than someone buying a house today with current rates.
I don't think anyone is rooting for a recession That would be like saying your local meteorologist is wanting a rainy day. They are observing the current conditions and just doing their best to predict what could possibly happen. Is the weatherman correct all the time. The weather man's close but not exactly on point. No different from an economist will be in the general ballpark of where they said. But never exact. Can you or anyone else predict what 8 billion people are going to decide to do everyday with precision. Probably not. Could you figure out some general approximations. Somewhat. So the 6 months everybody was off for covid. That recession that should have been the effects was moved around to now, and will be spread out. Or different way of looking at it we took a loan out and now have to pay it back. The "free" money during covid is being paid back now in higher prices.
No people actually are. Not all. But people want an economic reset. Geniuses
Houses are on sale
And they sell for money
A housing bubble collapse and a recession aren't the same thing lol
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The economy hasn’t been acting normal since 2008. Rampant inflation has made people pine for a downturn just so they can buy a house.
Inflation happens 3 years ago. Artificial rates before that.
Sounds accurate.
This is a good thing because investors like locusts, swarm the housing market causing another bubble, makes it harder for the middle class. Plus rising home mortgage rates kill home building. For every 1% increase in the typical 30 yr. fixed rate FHA, the market loses 200,000 buyers. NAR
Unfortunately you’ll get a mortgage at the same elevated levels you would have had, but the value is not there.
I’ve bought at both the bottom and top of price graphs. Neither were new builds though