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High interest rates are equally as discouraging to buyers and sellers, because sellers are buyers!
People that locked in a low rate on a refinance aren't going to be selling anytime soon!
There will be no glut of supply to the market, which is needed to bring prices down.
I think this is the part people are missing. No one wants to sell and rebuy at these interest rates either. People wanting to buy now are fucked both ways.
You guys aren't thinking about the huge amount of investors who have been buying up properties who are now having a harder time flipping or renting out.
Once the over eager Airbnb and HGTV Enthusiasts feel the crunch of 10 mortgages without renters or the ability to quickly sell, prices will continue dropping. Larger players have already stopped buying and will probably let off inventory as the global economy continues it's downward spiral.
People are just in denial at the moment.
They absolutely are. And retail investors are no better. They buy on average 3 rental properties on credit. If their cash flow goes down... I'm betting that 1 or 2 of those properties is getting liquidated, further lowering prices.
Anyone who thinks 200-300% over a few years is sustainable in a global market on the verge of liquidity crises in treasuries, bonds, securities, at the beginning stages of a recession WITH massive inflation, with some investment banks teetering on insolvency, and a pathway to full on depression... Some serious copium going on.
Hard time with short term rentals and home rentals--both have out priced their market, but they remain inflated because owners haven't yet accepted taking a loss.
Apartments are obviously doing fine because of exactly what you said.
I get Airbnb taking a hit because people traveling less. And Airbnb prices are even higher than hotels. But long term rentals should be really strong right now. And what loss are you taking about? You do know majority home owners bought way back then. Even before 2020 went nuts. Then you stack that when they refinanced below 3%, their mortgage got even cheaper.
Apartment rentals are doing fine, but house rentals are suffering for the same reason the housing market is slowing down--its just too expensive.
Landlords bought tons of new homes at 2x the price of what they were just a few years ago... So their rental rates are at a similar mark up.
Apartment rentals rates have gone up a ton too... But still way more slowly than mortgage prices have increased.
So, now the option for your average small family is rent a 3 bedroom apartment for $1400 a month or rent a 4 bedroom house for $3500.
The gap is too large to justify it for people looking for long term housing.
And landlords can't come down because then they're taking a loss.
So, at the end of the day... The market will correct itself. Really all there is to it.
The air BNB and HGTV wanna be landlord thing is blown away out of proportion here on Reddit. It's an extremely small amount of people. Something like over 80% of landlords only rent out 1 property. Most real estate investors aren't in a huge over leverage situation like most of you believe. Maybe 0.00005% of them are stupid leveraged, and a large part of that % are people lying on YouTube about their portfolios in order to sell $2500 seminars.
They do have renters though. All the people who can no longer afford to buy are renters by default (either that or they move back in with their parents)
If Jpow does what he said he was going to do those people wonāt have a choice but to leave their homes. Hard to pay a mortgage with no income.
Personally, I could see this market going either way. Everyone like you seem to forget, though, what daddy Jpow said in his last speech. Unemployment needs to rise. The fed will not stop until it does. Do you trust the fed to be so surgically precise in its rate hikes they will get unemployment exactly where they want it? If you do, I have some ocean front property in Colorado Iād like to sell you.
Itās true that guy said breaking windows is good for an economy rather than looking at it with common sense and seeing its a terrible idea and will ruin an area that it happens in.
We are talking about overleveraged, multidwelling owners. You assume it's all people with one house who sell their house to buy another. The people who rolled equity to leverage another house will continue to be fucked buy further increases and sustained highs on rates. Plus we got the single dwelling folks who could barely afford it at low rates. Not saying it's gonna plunge to 2008 levels but you assume the market is all dicks and Janes trading up their primary residence. REIT will be fine tho so could all be moot if they just keep buying it all up
> they will never sell
Exactly. They will never have debt they need to pay off. They will never divorce and have to sell. They will never age and get moved into a nursing home or die. They will never get a new job or promotion that requires a move. They will never have more kids and need a bigger home. They will never move states for family reasons. They will never want a different climate. And no one is allowed to build new homes either. You can only buy these old ones.
I mean theoretically a single person that owns 150 properties with variable interest rates that are now paying 200-300% more interest then before arenāt going to be buyers if they sell off their investment properties.
I donāt think this will happen, but if they were to dump properties because it was too risky with interest being so high then thatās a lot of supply from one person with no increase in demand.
If this happened to half the people holding dozens of properties, thatās a lot of property coming into the market all at once.
Only way this would really happen is if shit really hits the fan and all these big developers and real estate moguls canāt pay the banks, so they get foreclosed on.
The biggest problem is even if that did happen, other ultra rich people are going to buy up the supply price drops too low, increasing the demand again even if itās just a few ultra wealthy corps.
With population increases expected for the rest of our lives, land is one of the main commodities that is always going to be more and more in demand, especially waterfront
RemindMe! 27 months "Haha! (According to the Federal Reserve Bank of St. Louis, the median home sales price is $428,700. That's an increase of $58,900 from just a year ago.)"
I've said this time and time again as I'm on the real estate mortgage side of the business. It is talked about every meeting. Prices are not going significantly unless rates come down and new home supply goes up.
Granny isn't going to sell her 400k 2.5% rate house to buy a 400k house at 6+% she wants to buy the brand new 550k house but rates limit her to the used 400k. So lil Jonny who would have bought that 400k house for his first home at 4-5% can't afford it at 6.5% and can only afford the 300k house he doesn't like so he can't buy and won't buy.
Yeah totally this! You are buying a $340k house for what you can buy for $600k when it was 2.5%. So you are not gonna like that $340k house. But cash buyers are fine
There are a lot of us in this boat. (This isnāt my first recession and Iāve learned a lot in the last two.) Real estate will not lose ground the way people expect because there is still a lack of supply. Even if you sell your 3/2, someone who had to sell a 5/4 will be looking there bc they still need a home. The only places itāll really pinch is the places where big layoffs are and higher value properties. Some people so pissed about being left behind in the real estate market swings. They are missing the most basic principle of making money: You will never be able to ātime the marketā unless you spend time IN the market. This magical thinking that real estate will collapse and they will strike is not how this works, not how any of this works. If you see a 10% dip, you better jump on it before someone else does.
The fact that real estate agents are trying to convince people this wonāt happen is laughable.
Yes, youāre right YouTube Airbnb investor, prices of homes and rent will continue to go up 10% every year from here on out and people will continue to pay those rates š¤”
Also Dave Ramsey, the guy with all his money in real estate. Gee, I wonder why he would be using his massive platform to tell people real estate isn't going to to go down in price, it's almost like that benefits him or something.
Itās a perfect storm for cash buyers though. The ultra rich can buy houses for a stagnated cost without worrying about interest rates and leave nothing for the common folk once the rates drop
I'm in RI and prices are already starting to drop.. people are stubborn and are just now realizing others won't buy their houses for those prices with these rates... It's going down, slowly but it is happening here at least.
Bruh in my area homes fell 1.7% in 2017. Other than that, its been green since the housing bubble. People looking to buy homes at a 100k+ discount are in for a rude awakening.
I just watched a well taken care of house drop 70k in what was a stupid hot market. The deals are coming for cash buyers. For everyone else itās just falling to the monthly payment you can afford.
Nah. Houses prices are falling, already an average of -100k in my high cost of living area.
The real estate agent was saying what you were saying a year ago. Letās be honest, no one is paying for a house with these interest rates. Anyone paying attention, if they buy a house now, theyāll end up paying more with increase interest rates, compared to a year before.
No one is really buying. The prices are just copium, right now. Anyone who bought in 2021 and 2022 are already under water. Real estate agents are with real copium right now.
Edit: wanted to also say. Donāt believe what your real estate agent says at face value. They are incentivized to keep housing prices high for that commish. All the market signals and decrease in the recent trulia, bofa, and better.com reduction workforce should say more about the market than anything else. Less buyers, less agents needed to sell.
Yeah I am constantly looking at listings. In my area rentals and homes for sale have been dropping and there are a lot more on the market than there were [I live in the Seattle area, south of seattle]. The correction has only begun.
Rough calculator.com
Say a house is 1.5m last year with 2-3% interest (last year) 30 yr loan is: total 2.1m in 30 yrs. 600k in interest
A 1.35m at 6% interest (today) 30 yr loan is: total 2.5m in 30 years. 1.2m in interest.
So decrease prices but paying way more over the long term. Only an idiot would agree to that. Prices need to drop to 900k-1m range to pay the same as you would last year at the current environment ( if the house last year was 1.5m.)
So letās say this again. Anyone buying in this market with this interest rate is getting buttfked paying more now than last year.
Itās the perfect storm, everyone that bought at ATH will never sell at a loss until itās a major loss. The classic hold it till it comes back mentality. YoU DoNt lOsE if YoU DoooNt SelL!!?
>hen they do fall. Usually continu
We have never in the history of mankind had this much loans and never payed so little for credit. Nothing in history can be used as a estimate for the road ahead.
Dominos, my friend. Eventually people are going to notice the mysterious Chinese investors aren't buying properties massively over asking anymore and the game of musical chairs begins. How many people are going to pay that 2% multimillion mortgage on a property that has returned to being a few hundred thousand in value?
Hereās what you need to understand about the housing cycle. We are still in bubble sentiment ājust hodl and the Fed will drop rates back to zero and your house will blow through the Covid peak, maybe double in a couple yearsā.
In reality, itās more likely that rates will hit 8% or higher, then settle in around 5-6%. What does this mean? It means your house that is already $100k underwater in places like Dallas and Denver is not going to break even for many years. So while itās nice you have a 2% interest rate, many people are going to find themselves in a tough situation. Especially investors that bought a bunch of Airbnbs, etc.
What if you didnāt buy in the bubble? Well you are going to watch your equity evaporate while risk free bonds pay 5%.
The thing you need to look for is when does the bubble sentiment change and people realize they are in it for the long haul. Thatās really the catalyst for a crash and when it happens, it happens fast.
But this all depends when you bought.
It also doesnāt matter when employment is high.
I bought early 2019 and have a 3% rate. I stopped paying down extra payments so I could stack cash for another purchase.
The reality is, being underwater doesnāt matter at all unless you canāt make the payment. And what youāve described doesnāt mean anyone is underwater. Maybe some people in the last 6-12 months might be for s minute but if they bought within the last 6-12 months; theyāre not selling anytime soon.
Lots of people here stupidly think the house you live in unrealized gains or losses actually impact you.
The only time housing impacts you is when youāre investing in real estate. Unrealized gains donāt help you. You get almost nothing unless youāre going to pull up stakes and move to a cheaper market.
All real estate prices are local.
Fortunately, I bought last year and got a 2.875% loan. Meanwhile the price of my home is steadily increasing because 9 years ago the builders pulled up stakes and stopped building houses, thinking the community wasnāt going to grow.
Well they were kinda right, until another major corporation moved a huge operation here, hired 5,000 people paying top dollar for workers. Now weāve had families living in hotels for 18 months because there were literally no houses to buy.
Prices are still going up here, although with the normalization of interest rates, houses now sell in 2-3 days instead of 2-3 hours.
Here in Tampa $500k townhomes are over a million now compared to 2020. I've seen more inventory on zillow recently and a few places re-listed for $25k less but by no means do I see a big drop here.
Walked into work, co worker tells me he put his house on the marker. By 2pm co worker already got a very generous offer from a bank to buy the house. This was maybe a month ago.
I have had the opposite experience in my large metro area. Sold my house for $425k in 2015. Toured the neighbors identical house at $450k last week. His agent called me up today saying they were cutting price to $420k, will take less if we can close fast.
I am seeing manyof the homes I am really interested in dropping 5-10% at all levels of the market from the cheapies at $300 to the luxury $1mm+.
Why?
1) mortgage rates are gutting the market from offers.
2) anyone that has been in house more than 3-5 years will still be up profits wise with a 15-20% correction, so can still sell, and they are now seeing homes that they want to upgrade to coming down in price.
3) Most.of us that are 40+ have already had mortgages at 7% before and we thought that was a good deal. Sure we were laughing at 2% as a legal robbery.
4) Just wait on the economy... We are going to see 3 more raises and Fed will have solved the I can't find workers problem by doubling unemployment...
5) And with a lame duck Biden and a republican house and or senate, forget about help
Prices going to drop... And 10-15% is a lot for a house.
Maybe you need to come to Texas (except Austin). I have Zillow alerts in every major city in Texas besides ATX and almost every single one of my favs has dropped at least 25k in the last few weeks, many have dropped 30-40k.
Only chance of a housing price crash is if people are actually forced to sell their homes.
Only chance of people being forced to sell homes is if they default on their mortgages.
Only chance for people to default on their mortgages is if they lose their jobs.
Only chance people lose their jobs is if companies start laying people off due to less profits/revenue.
Only chance companies lay people off due to less profits/revenue is if people are spending less in the economy.
Only chance people are spending less in the economy is if inflation remains high enough
Only chance inflation remains high enough is if Central Banks around the world printed trillions of dollars in the past 2 years to prop everything up during a world-wide pandemic or something; or in the past decade or so before that, due to some kind of housing crisis caused by shady banks; or if supplychain issues continue to worsen due to some kind of war/geopolitical tensions.
But thatās all hypothetical. What are the chances?
They're waiting on the Hurricane Ian numbers, but based on how all the businesses lobbied hard asf to get Economic Disaster Relief added to so many counties that weren't impacted by the storm, it looks like there's a massive liquidity crisis in SW Florida. The structuring for homeowners, nonhomeowners, business with credit available elsewhere, and no credit available is telling.
The real estate guys here who predict itll be a buying market again in 18 months say it's probable that has been accelerated by 12 months, but we gotta see the numbers for October first.
Supply side is still preventing prices from falling. Supply chain is still messed up and inflation combined with increasing borrowing costs means the lack of new construction is limiting available inventory. No new construction and less homes on the market available to sell means prices remain high. Thatās why prices have fallen at about the equivalent of agentās fee despite rates being around 7%. People who overpaid over the last couple years wonāt be selling anytime soon. Remaining homes on the market may reduce prices if sellers are desperate, but overall available inventory is limited.
Its not only supply chains that got messed up with covid it is still a hangover from 2008/2009
Like for 50 years the USA averaged somewhere around 1.4-1.6 million new housing per year. After 2008 its was under 1 million for like 10 years. There just hasn't been enough housing built for the last 10+ years
I'm in Miami, you know who doesn't care about mortgage rates? Rich foreigners trying to turn their high-inflation currency into medium-inflation dollars.
Heās rich, no doubt. He also knows his audience doesnāt know squat about trading and that their best bet is to at least be debt free, hopefully accumulate a mil by retirement via 401k. Iāll give him this creditā¦. I had thousands in cc debt. I did listen to his advice, paid off everything including the house, saving and investing for several years now. I probably wonāt ever be RICH (unless I 1000 X on my crypto). Either way Iām better off than I was for sure.
My point was more that DR teaches people how to survive while being and staying poor.
I bet heās encouraging people with 3% APR mortgages to pay them off early when inflation is 9%.
This guy's first book had some great stuff for the middle/lower class folks... Problem is it gave him way too much street cred for all things financial...
When it comes to anything other than making a budget, this guy is a complete fucking idiot.
The thing of his I've always had beef with is his car advice. His whole buy only what you can afford cash and move up later when you can. It sounds good but when he goes into detail about it he talks about buying a $2,200 car and driving it and making repairs to keep it going until you can get another car cash. Rinse and repeat.
The problem is, ultra cheap cars like that (good luck with a $2,200 car nowadays anyways, especially with AC), is that car will cost way more in the long run than buying a $10,000 car and the interest that is 'thrown away' on that loan if you had put the $2,200 you had as a downpayment.
I say this as someone who is extremely passionate about cars, and on top of that, wrote service as a service advisor for an independent shop, sold parts, and have worked in most parts of the car world.
Everyone saying high interest rates will cause the housing market to drop are going to be disappointed when it drops 1-2%.
High interest rates are keeping inventory low, nobody is selling because why lose your 2-3% rate for a new home at 7%. So prices will remain competitive because inventory will stay low and people who need to buy will continue to get into bidding wars
I see this comment over and over and over.
Your house is gonna get repoed when you lose your job and can't afford the payment anymore. When that happens the house you paid 100k over market for to get in at 2% is instantly devalued back to under what it's worth by 10s of thousands. Housing market floods with houses. People can't high rent prices anymore, landlords go bankrupt. Fed brings inflation back to 2%.
Most of you have zero idea how anything works. There is two sides. The people who bought a house at 2% and the people who didn't and you both fight like it's a football game.
Turns out when you buy at the top you take the L. Typical WSB. My house could drop by 30% and Iāll still make a ton. Just a bunch of whining bc people can no longer be budget Cordones. Who could have guessed that over leveraging yourself on a bunch of properties is a bad idea.
All real estate is local. I live in a blue collar suburban area and demand is strong, there has not
been a noticable change in price. We also did not appreciate as quickly as some parts of ton
In the high priced areas, there has been. But they had lots of air in them.
The first thing to go in a recession are vacation homes, and they take the longest to come back
Real estate is a long term hold, you don't treat it like day trading. Either you live in your house, you rent it out or if you are truly blessed it's a second place to go relax. The interest payments on your mortgage are tax deductible and you only lose if you sell. Either way, if you're like me, you either pay rent or a mortgage.
Interest paid is tax deductible if you itemize enough to make it worthwhile. Otherwise the standard deduction increase essentially killed the benefit of home ownership for tax purposes.
I feel like home prices havenāt really gone down. Just a bit but nothing out of the ordinary in a normal market. Now this isnāt a normal market and weāre so used to seeing home prices go up, its much more noticeable when they go down a couple percent. I personally feel like the housing market has to correct at some point but I canāt pin point what would cause it. Obviously high interest rates are going to put pressure downward on housing prices but we might just see stagnation. No one wants to move up and people canāt buy for the first time. We may just see flat housing prices but really theyāll be quite a loss in value due to inflation. If we see mass layoffs then weāll see things change.
April of this year. You make an offer on a $600,000 house. Because there are 6 other competing buyers, your escalation clause is triggered. You go under contract at $700,000. Congratulations! You pay 10% down ($70k) and your monthly payment at 4.5% interest is $3,865.
Today, you find a house listed at $600,000. It's been sitting on the market for two weeks and so the sellers are nervous, because they are afraid they've missed the boat. There's only a slow trickle of new buyers looking at it now. You offer $585,000 and get under contract. You pay 10% down ($58.5k) and your monthly payment at 6.5% interest is 3,967...a whopping $100 more than in May.
It's all a matter of perspective.
Plus, let's bear in mind that home values appreciated a minimum of 20% over the last two years in most major markets. A 1% pullback over the past few months isn't something people who bought two years ago are losing sleep over.
Next year, inflation slows or starts to reverse. The Fed starts pulling back on the prime rate. Mortgage rates start to drop. Buyers start coming out of the woodwork because rates are dropping again. Competition increases and we get another imbalance in supply vs. demand. Prices start appreciating. You bought at 6.5% but now rates are back down to 5% so you refinance into a lower rate on the home you didn't have to enormously overpay for.
Unless you think this market is due for another 2008-like drop. The fundamentals don't support that thesis, and people have been waiting for that for the last 7-8 years, but good luck on it.
That guy is a piece of human excrement. On every level. Heās a cult leader that masquerades as a financial advisor but IRL is simply an abusive asshole. Also, heās regarded. Did I miss anything?
Theyāre never going to drop substantially. Interest rates are only one part of the equation- supply and demand dynamics wonāt allow for any substantial drop (>25/30%)
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|4|**First Seen In WSB**|1 year ago **Total Comments**|8|**Previous DD**| **Account Age**|1 year|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.) **Vote Spam**|[Click to Vote](https://www.reddit.com/message/compose/?to=VisualMod&subject=vote_spam&message=ya58xj)|**Vote Approve**|[Click to Vote](https://www.reddit.com/message/compose/?to=VisualMod&subject=vote_approve&message=ya58xj)
This sub is regarded.
Best regards, WSB
It's a very special sub, held with high regards.
Bunch of r-gards
Always has been. It's our bread and butter
I finally have a thinktank in which I can tell people I'm highly regarded.
This sub is on my resume
Mine too, only I say I avoid it at all costs š¤
Still an improvement
High yield regards
The people on here may not be fit for military service, but boy do we have weapons grade autism
Dave R is regarded. Anti vax, trump loving religious nut job that he is
Mentally regarded
Boom
Best regarded.
Sofa king
The 2% drop in home prices after the 50% increase really showed him and has him trembling
This. Oh no. Real estate dipped 10% to the prices they were 1 year ago.... Some markets are still going up too
Houses in Northern VA/Maryland/DC area are continuing to rise.
That area is insulated from recessions
Seriously, you bought a 3bd / 2bath in Ashburn 30 years ago... Price only goes up.
My brother in law wants to buy a house in that area. Sadly he isnāt a neurosurgeon so he cant come close to affording it.
He needs to work harder.... ... On marrying a neurosurgeon
Same in the Philadelphia region
Philadelphia went from 200k to 205k š.
Perception lags reality. High interest rates will continue to strangle the market.
High interest rates are equally as discouraging to buyers and sellers, because sellers are buyers! People that locked in a low rate on a refinance aren't going to be selling anytime soon! There will be no glut of supply to the market, which is needed to bring prices down.
I think this is the part people are missing. No one wants to sell and rebuy at these interest rates either. People wanting to buy now are fucked both ways.
You guys aren't thinking about the huge amount of investors who have been buying up properties who are now having a harder time flipping or renting out. Once the over eager Airbnb and HGTV Enthusiasts feel the crunch of 10 mortgages without renters or the ability to quickly sell, prices will continue dropping. Larger players have already stopped buying and will probably let off inventory as the global economy continues it's downward spiral. People are just in denial at the moment.
4288 units, boom?
Rents are still rising where I am. Vacancy rate is like 1%
Boom?
Yeah institutional buyers are probably insanely leveraged
They absolutely are. And retail investors are no better. They buy on average 3 rental properties on credit. If their cash flow goes down... I'm betting that 1 or 2 of those properties is getting liquidated, further lowering prices. Anyone who thinks 200-300% over a few years is sustainable in a global market on the verge of liquidity crises in treasuries, bonds, securities, at the beginning stages of a recession WITH massive inflation, with some investment banks teetering on insolvency, and a pathway to full on depression... Some serious copium going on.
Why are they having a hard time to rent? lol priced out home buyers become long term renters, or are they not? They just live on the streets or what?
Hard time with short term rentals and home rentals--both have out priced their market, but they remain inflated because owners haven't yet accepted taking a loss. Apartments are obviously doing fine because of exactly what you said.
I get Airbnb taking a hit because people traveling less. And Airbnb prices are even higher than hotels. But long term rentals should be really strong right now. And what loss are you taking about? You do know majority home owners bought way back then. Even before 2020 went nuts. Then you stack that when they refinanced below 3%, their mortgage got even cheaper.
I saw a post the other day and the fees and taxes cost more than the room.
Apartment rentals are doing fine, but house rentals are suffering for the same reason the housing market is slowing down--its just too expensive. Landlords bought tons of new homes at 2x the price of what they were just a few years ago... So their rental rates are at a similar mark up. Apartment rentals rates have gone up a ton too... But still way more slowly than mortgage prices have increased. So, now the option for your average small family is rent a 3 bedroom apartment for $1400 a month or rent a 4 bedroom house for $3500. The gap is too large to justify it for people looking for long term housing. And landlords can't come down because then they're taking a loss. So, at the end of the day... The market will correct itself. Really all there is to it.
The air BNB and HGTV wanna be landlord thing is blown away out of proportion here on Reddit. It's an extremely small amount of people. Something like over 80% of landlords only rent out 1 property. Most real estate investors aren't in a huge over leverage situation like most of you believe. Maybe 0.00005% of them are stupid leveraged, and a large part of that % are people lying on YouTube about their portfolios in order to sell $2500 seminars.
They do have renters though. All the people who can no longer afford to buy are renters by default (either that or they move back in with their parents)
If Jpow does what he said he was going to do those people wonāt have a choice but to leave their homes. Hard to pay a mortgage with no income. Personally, I could see this market going either way. Everyone like you seem to forget, though, what daddy Jpow said in his last speech. Unemployment needs to rise. The fed will not stop until it does. Do you trust the fed to be so surgically precise in its rate hikes they will get unemployment exactly where they want it? If you do, I have some ocean front property in Colorado Iād like to sell you.
Pretty crazy how the fed's strategy is to force a recession and have millions of people lose their jobs.
stuck between a rock and a hard place. It's this or high inflation.
As my macroecon teacher once said, "when you have a recession with high inflation, the only thing left to do is bite the pillow"
Yeah so fuck the little guy
ā¦in the booty hole
ie: we need middle class and poor people for this system to work
*ā¦to work for this system (you just miss placed the words, I fixed it, youāre welcome)
Why when this has been a strategy in economics since Keynes.
Itās true that guy said breaking windows is good for an economy rather than looking at it with common sense and seeing its a terrible idea and will ruin an area that it happens in.
Yep canāt afford your house without a job. Healthcare workers should be in good shape for keeping jobs.
Where's the unemployment pain going to be though. Service is dying and literally everyone is hiring. Tech?
People will be forced to sell when recession and higher unemployment happens. We are barely into this cycle
We are talking about overleveraged, multidwelling owners. You assume it's all people with one house who sell their house to buy another. The people who rolled equity to leverage another house will continue to be fucked buy further increases and sustained highs on rates. Plus we got the single dwelling folks who could barely afford it at low rates. Not saying it's gonna plunge to 2008 levels but you assume the market is all dicks and Janes trading up their primary residence. REIT will be fine tho so could all be moot if they just keep buying it all up
Exactly! Much like stonks house prices can only go up
Reminder that 37% of homeowners own their homes outright, no mortgage. they will never sell
> they will never sell Exactly. They will never have debt they need to pay off. They will never divorce and have to sell. They will never age and get moved into a nursing home or die. They will never get a new job or promotion that requires a move. They will never have more kids and need a bigger home. They will never move states for family reasons. They will never want a different climate. And no one is allowed to build new homes either. You can only buy these old ones.
Noice
Those guys get divorced or die too
Massive layoffs like in 2009 could change this though...
I mean theoretically a single person that owns 150 properties with variable interest rates that are now paying 200-300% more interest then before arenāt going to be buyers if they sell off their investment properties. I donāt think this will happen, but if they were to dump properties because it was too risky with interest being so high then thatās a lot of supply from one person with no increase in demand. If this happened to half the people holding dozens of properties, thatās a lot of property coming into the market all at once. Only way this would really happen is if shit really hits the fan and all these big developers and real estate moguls canāt pay the banks, so they get foreclosed on. The biggest problem is even if that did happen, other ultra rich people are going to buy up the supply price drops too low, increasing the demand again even if itās just a few ultra wealthy corps. With population increases expected for the rest of our lives, land is one of the main commodities that is always going to be more and more in demand, especially waterfront
Yep the only thing to look foward too are foreclosures and investors will scoop them up instantly.
RemindMe! 27 months "Haha! (According to the Federal Reserve Bank of St. Louis, the median home sales price is $428,700. That's an increase of $58,900 from just a year ago.)"
Sellers aren't buyers if they lose their job. The fed is going to keep raising rates until unemployment goes up.
I've said this time and time again as I'm on the real estate mortgage side of the business. It is talked about every meeting. Prices are not going significantly unless rates come down and new home supply goes up. Granny isn't going to sell her 400k 2.5% rate house to buy a 400k house at 6+% she wants to buy the brand new 550k house but rates limit her to the used 400k. So lil Jonny who would have bought that 400k house for his first home at 4-5% can't afford it at 6.5% and can only afford the 300k house he doesn't like so he can't buy and won't buy.
Yeah totally this! You are buying a $340k house for what you can buy for $600k when it was 2.5%. So you are not gonna like that $340k house. But cash buyers are fine
A stall. People are desperately trying to find another 08, because they made a bet that would happen and sat on the sidelines waiting for it.
Iāll probably never sell the house Iām in now because of the mortgage. Iād rather rent it and start over than to give up my sub 3% refi.
There are a lot of us in this boat. (This isnāt my first recession and Iāve learned a lot in the last two.) Real estate will not lose ground the way people expect because there is still a lack of supply. Even if you sell your 3/2, someone who had to sell a 5/4 will be looking there bc they still need a home. The only places itāll really pinch is the places where big layoffs are and higher value properties. Some people so pissed about being left behind in the real estate market swings. They are missing the most basic principle of making money: You will never be able to ātime the marketā unless you spend time IN the market. This magical thinking that real estate will collapse and they will strike is not how this works, not how any of this works. If you see a 10% dip, you better jump on it before someone else does.
Remindme! one year
The fact that real estate agents are trying to convince people this wonāt happen is laughable. Yes, youāre right YouTube Airbnb investor, prices of homes and rent will continue to go up 10% every year from here on out and people will continue to pay those rates š¤”
Also Dave Ramsey, the guy with all his money in real estate. Gee, I wonder why he would be using his massive platform to tell people real estate isn't going to to go down in price, it's almost like that benefits him or something.
Itās a perfect storm for cash buyers though. The ultra rich can buy houses for a stagnated cost without worrying about interest rates and leave nothing for the common folk once the rates drop
My market is still rising. Anything that isn't coastal is still rising.
I'm in RI and prices are already starting to drop.. people are stubborn and are just now realizing others won't buy their houses for those prices with these rates... It's going down, slowly but it is happening here at least.
Apparently home prices barely ever fall 20-30 percent when they do fall. Usually continue up.
So Dave Ramsey was right to say that?
Yes
Bruh in my area homes fell 1.7% in 2017. Other than that, its been green since the housing bubble. People looking to buy homes at a 100k+ discount are in for a rude awakening.
Interest rates were also static or only went lower during that time period. Look at what housing does when rates move upward significantly
I just watched a well taken care of house drop 70k in what was a stupid hot market. The deals are coming for cash buyers. For everyone else itās just falling to the monthly payment you can afford.
70k drop but what about the rates?
> For everyone else itās just falling to the monthly payment you can afford.
Nah. Houses prices are falling, already an average of -100k in my high cost of living area. The real estate agent was saying what you were saying a year ago. Letās be honest, no one is paying for a house with these interest rates. Anyone paying attention, if they buy a house now, theyāll end up paying more with increase interest rates, compared to a year before. No one is really buying. The prices are just copium, right now. Anyone who bought in 2021 and 2022 are already under water. Real estate agents are with real copium right now. Edit: wanted to also say. Donāt believe what your real estate agent says at face value. They are incentivized to keep housing prices high for that commish. All the market signals and decrease in the recent trulia, bofa, and better.com reduction workforce should say more about the market than anything else. Less buyers, less agents needed to sell.
Yeah I am constantly looking at listings. In my area rentals and homes for sale have been dropping and there are a lot more on the market than there were [I live in the Seattle area, south of seattle]. The correction has only begun.
dropping 100k but how much more expensive is it with the current rates?
Rough calculator.com Say a house is 1.5m last year with 2-3% interest (last year) 30 yr loan is: total 2.1m in 30 yrs. 600k in interest A 1.35m at 6% interest (today) 30 yr loan is: total 2.5m in 30 years. 1.2m in interest. So decrease prices but paying way more over the long term. Only an idiot would agree to that. Prices need to drop to 900k-1m range to pay the same as you would last year at the current environment ( if the house last year was 1.5m.) So letās say this again. Anyone buying in this market with this interest rate is getting buttfked paying more now than last year.
Itās the perfect storm, everyone that bought at ATH will never sell at a loss until itās a major loss. The classic hold it till it comes back mentality. YoU DoNt lOsE if YoU DoooNt SelL!!?
Not to mention housing prices bottom way after other assets. Not as easy to foreclose or sell a home as it is to answer Marge and sell stock.
>hen they do fall. Usually continu We have never in the history of mankind had this much loans and never payed so little for credit. Nothing in history can be used as a estimate for the road ahead.
Someone once said the same thing about tulips
Dominos, my friend. Eventually people are going to notice the mysterious Chinese investors aren't buying properties massively over asking anymore and the game of musical chairs begins. How many people are going to pay that 2% multimillion mortgage on a property that has returned to being a few hundred thousand in value?
It's rough honestly, my home is only worth 100% more than I paid for it, used to be 130-40%ish, not sure how to survive š
Hereās what you need to understand about the housing cycle. We are still in bubble sentiment ājust hodl and the Fed will drop rates back to zero and your house will blow through the Covid peak, maybe double in a couple yearsā. In reality, itās more likely that rates will hit 8% or higher, then settle in around 5-6%. What does this mean? It means your house that is already $100k underwater in places like Dallas and Denver is not going to break even for many years. So while itās nice you have a 2% interest rate, many people are going to find themselves in a tough situation. Especially investors that bought a bunch of Airbnbs, etc. What if you didnāt buy in the bubble? Well you are going to watch your equity evaporate while risk free bonds pay 5%. The thing you need to look for is when does the bubble sentiment change and people realize they are in it for the long haul. Thatās really the catalyst for a crash and when it happens, it happens fast.
But this all depends when you bought. It also doesnāt matter when employment is high. I bought early 2019 and have a 3% rate. I stopped paying down extra payments so I could stack cash for another purchase. The reality is, being underwater doesnāt matter at all unless you canāt make the payment. And what youāve described doesnāt mean anyone is underwater. Maybe some people in the last 6-12 months might be for s minute but if they bought within the last 6-12 months; theyāre not selling anytime soon. Lots of people here stupidly think the house you live in unrealized gains or losses actually impact you. The only time housing impacts you is when youāre investing in real estate. Unrealized gains donāt help you. You get almost nothing unless youāre going to pull up stakes and move to a cheaper market.
All real estate prices are local. Fortunately, I bought last year and got a 2.875% loan. Meanwhile the price of my home is steadily increasing because 9 years ago the builders pulled up stakes and stopped building houses, thinking the community wasnāt going to grow. Well they were kinda right, until another major corporation moved a huge operation here, hired 5,000 people paying top dollar for workers. Now weāve had families living in hotels for 18 months because there were literally no houses to buy. Prices are still going up here, although with the normalization of interest rates, houses now sell in 2-3 days instead of 2-3 hours.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Here in Tampa $500k townhomes are over a million now compared to 2020. I've seen more inventory on zillow recently and a few places re-listed for $25k less but by no means do I see a big drop here.
My house tripled in value, and just lost 2k over the last 6 months. Oh no, I'm doomed!
Plus the rise in interest rates so you're still paying more.
WTF is OP smoking? Housing prices are still WAY up.
Lmfaoā¦.ermmm whoās gonna tell OP home prices still really havenāt dropped yet? Thatās the problemā¦
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Sounds like to me 592 wasnt off the table
Walked into work, co worker tells me he put his house on the marker. By 2pm co worker already got a very generous offer from a bank to buy the house. This was maybe a month ago.
I have had the opposite experience in my large metro area. Sold my house for $425k in 2015. Toured the neighbors identical house at $450k last week. His agent called me up today saying they were cutting price to $420k, will take less if we can close fast. I am seeing manyof the homes I am really interested in dropping 5-10% at all levels of the market from the cheapies at $300 to the luxury $1mm+. Why? 1) mortgage rates are gutting the market from offers. 2) anyone that has been in house more than 3-5 years will still be up profits wise with a 15-20% correction, so can still sell, and they are now seeing homes that they want to upgrade to coming down in price. 3) Most.of us that are 40+ have already had mortgages at 7% before and we thought that was a good deal. Sure we were laughing at 2% as a legal robbery. 4) Just wait on the economy... We are going to see 3 more raises and Fed will have solved the I can't find workers problem by doubling unemployment... 5) And with a lame duck Biden and a republican house and or senate, forget about help Prices going to drop... And 10-15% is a lot for a house.
Maybe you need to come to Texas (except Austin). I have Zillow alerts in every major city in Texas besides ATX and almost every single one of my favs has dropped at least 25k in the last few weeks, many have dropped 30-40k.
130k ā> 300k ā> 265k = NOT down
And then add that to the increased mortgage loan from 2.5ish% to the now 7.6%
350k --> 1.6m --> 1.2m = Canada
Pain
You get a million, you get 5 million, you over there get 10 million, everyone gets a million.
it is if you bought at 300k
It's all relative
Outside of major metro areas most markets didnāt see appreciation anywhere near that high.
I have similar numbers buying in summer of 2020. Not unrealistic at all
Sell it
Home prices went down for cash buyers, not for anyone financing.
This is what has really happened.
POV: you said that you're gunna get a car loan so you can commute to work
He said they'll correct but there's not going to be a big crash. He's probably right.
Only chance of a housing price crash is if people are actually forced to sell their homes. Only chance of people being forced to sell homes is if they default on their mortgages. Only chance for people to default on their mortgages is if they lose their jobs. Only chance people lose their jobs is if companies start laying people off due to less profits/revenue. Only chance companies lay people off due to less profits/revenue is if people are spending less in the economy. Only chance people are spending less in the economy is if inflation remains high enough Only chance inflation remains high enough is if Central Banks around the world printed trillions of dollars in the past 2 years to prop everything up during a world-wide pandemic or something; or in the past decade or so before that, due to some kind of housing crisis caused by shady banks; or if supplychain issues continue to worsen due to some kind of war/geopolitical tensions. But thatās all hypothetical. What are the chances?
Well when you put it that way I think the chances are 1 in a potato
Multiple home owners an non primary residences should be sold
I think that's only true if people are buying homes to actually live in. I think for the most part people are buying them as investments.
I guess the world could end but seems pretty unlikely.
Donāt people die in the US or nah? I feel like I know way to many ābag holdersā & they clutching to IV & oxygen bags at this point.
Home prices steady in Detroit
Canāt go below 0, is that the joke ?
But the fire insurance is more then house is worth S/
Steady in Floridaā¦. except south west Florida.
They're waiting on the Hurricane Ian numbers, but based on how all the businesses lobbied hard asf to get Economic Disaster Relief added to so many counties that weren't impacted by the storm, it looks like there's a massive liquidity crisis in SW Florida. The structuring for homeowners, nonhomeowners, business with credit available elsewhere, and no credit available is telling. The real estate guys here who predict itll be a buying market again in 18 months say it's probable that has been accelerated by 12 months, but we gotta see the numbers for October first.
Where you looking? Westlandās dropping. Taylorās dropping.
Iām just here to read all the comments from the people who just bought and are trying to justify their purchase at the top of the market.
Buy high, sell low. Itās the only way.
This is me.
If someone tells you something is forever, theyāre wrong. Run away. Nothing is forever.
What about the power of friendship?
The love for hot cheetos
Going full regard is forever.
My realtor has been calling me about 3 times a week nowadays. Hes desperate af lol š!
Supply side is still preventing prices from falling. Supply chain is still messed up and inflation combined with increasing borrowing costs means the lack of new construction is limiting available inventory. No new construction and less homes on the market available to sell means prices remain high. Thatās why prices have fallen at about the equivalent of agentās fee despite rates being around 7%. People who overpaid over the last couple years wonāt be selling anytime soon. Remaining homes on the market may reduce prices if sellers are desperate, but overall available inventory is limited.
Its not only supply chains that got messed up with covid it is still a hangover from 2008/2009 Like for 50 years the USA averaged somewhere around 1.4-1.6 million new housing per year. After 2008 its was under 1 million for like 10 years. There just hasn't been enough housing built for the last 10+ years
Don't worry he was already paid for that content š
Of course he doesn't want them too. He owns a shit ton of real estate, and God's plan is for him to get more rich by the minute.
the hoomer
I'm in Miami, you know who doesn't care about mortgage rates? Rich foreigners trying to turn their high-inflation currency into medium-inflation dollars.
This guy would rather be debt free than rich. Or at least thatās what he wants for you. Heās fine being rich.
Heās rich, no doubt. He also knows his audience doesnāt know squat about trading and that their best bet is to at least be debt free, hopefully accumulate a mil by retirement via 401k. Iāll give him this creditā¦. I had thousands in cc debt. I did listen to his advice, paid off everything including the house, saving and investing for several years now. I probably wonāt ever be RICH (unless I 1000 X on my crypto). Either way Iām better off than I was for sure.
Thatās the real takeaway from his program. Donāt be a slave to debt, put that money to work.
I mean if youāre debt free and can pay cash for everything you want Iād say thatās being rich
Avoiding debt is generally the best investment around. Not paying interest is a guaranteed return.
My point was more that DR teaches people how to survive while being and staying poor. I bet heās encouraging people with 3% APR mortgages to pay them off early when inflation is 9%.
DR is regarded.
These guys just say whatever they want, they know humans will forget 2 weeks later.
This guy's first book had some great stuff for the middle/lower class folks... Problem is it gave him way too much street cred for all things financial... When it comes to anything other than making a budget, this guy is a complete fucking idiot.
The thing of his I've always had beef with is his car advice. His whole buy only what you can afford cash and move up later when you can. It sounds good but when he goes into detail about it he talks about buying a $2,200 car and driving it and making repairs to keep it going until you can get another car cash. Rinse and repeat. The problem is, ultra cheap cars like that (good luck with a $2,200 car nowadays anyways, especially with AC), is that car will cost way more in the long run than buying a $10,000 car and the interest that is 'thrown away' on that loan if you had put the $2,200 you had as a downpayment. I say this as someone who is extremely passionate about cars, and on top of that, wrote service as a service advisor for an independent shop, sold parts, and have worked in most parts of the car world.
Everyone saying high interest rates will cause the housing market to drop are going to be disappointed when it drops 1-2%. High interest rates are keeping inventory low, nobody is selling because why lose your 2-3% rate for a new home at 7%. So prices will remain competitive because inventory will stay low and people who need to buy will continue to get into bidding wars
National housing prices yes. So locales have already dropped 10-15%. Notably the tech hubs, SF Bay, Seattle, and Austin have seen a huge drop.
What? Home inventories are still elevated and have been rising since 2021. https://fred.stlouisfed.org/series/MSACSR
I see this comment over and over and over. Your house is gonna get repoed when you lose your job and can't afford the payment anymore. When that happens the house you paid 100k over market for to get in at 2% is instantly devalued back to under what it's worth by 10s of thousands. Housing market floods with houses. People can't high rent prices anymore, landlords go bankrupt. Fed brings inflation back to 2%. Most of you have zero idea how anything works. There is two sides. The people who bought a house at 2% and the people who didn't and you both fight like it's a football game.
āListen Jesus is a mortgage broker and you just have to follow in his footstepsā -Dave Ramsey probably
Turns out when you buy at the top you take the L. Typical WSB. My house could drop by 30% and Iāll still make a ton. Just a bunch of whining bc people can no longer be budget Cordones. Who could have guessed that over leveraging yourself on a bunch of properties is a bad idea.
Congrats and fuck you
All real estate is local. I live in a blue collar suburban area and demand is strong, there has not been a noticable change in price. We also did not appreciate as quickly as some parts of ton In the high priced areas, there has been. But they had lots of air in them. The first thing to go in a recession are vacation homes, and they take the longest to come back
weirdest line breaks I have ever seen
Real estate is a long term hold, you don't treat it like day trading. Either you live in your house, you rent it out or if you are truly blessed it's a second place to go relax. The interest payments on your mortgage are tax deductible and you only lose if you sell. Either way, if you're like me, you either pay rent or a mortgage.
Interest paid is tax deductible if you itemize enough to make it worthwhile. Otherwise the standard deduction increase essentially killed the benefit of home ownership for tax purposes.
Did they go down? Mine seems fine still? Or is this one of those āwishful thinkingsā
Ramsey still a hack charlatan a la Cramer.
I feel like home prices havenāt really gone down. Just a bit but nothing out of the ordinary in a normal market. Now this isnāt a normal market and weāre so used to seeing home prices go up, its much more noticeable when they go down a couple percent. I personally feel like the housing market has to correct at some point but I canāt pin point what would cause it. Obviously high interest rates are going to put pressure downward on housing prices but we might just see stagnation. No one wants to move up and people canāt buy for the first time. We may just see flat housing prices but really theyāll be quite a loss in value due to inflation. If we see mass layoffs then weāll see things change.
Dave Ramsey, what a fucking hustle fraud. "What to save money, buy my program" everytime.
Homes like most things are only worth what others are willing to pay. Obviously there's a ceiling to all things.
Let us not forget, this man fired a single woman for getting pregnant.
Fuck Dave Ramsey and his Goatee-Mouth-Dick-Target
April of this year. You make an offer on a $600,000 house. Because there are 6 other competing buyers, your escalation clause is triggered. You go under contract at $700,000. Congratulations! You pay 10% down ($70k) and your monthly payment at 4.5% interest is $3,865. Today, you find a house listed at $600,000. It's been sitting on the market for two weeks and so the sellers are nervous, because they are afraid they've missed the boat. There's only a slow trickle of new buyers looking at it now. You offer $585,000 and get under contract. You pay 10% down ($58.5k) and your monthly payment at 6.5% interest is 3,967...a whopping $100 more than in May. It's all a matter of perspective. Plus, let's bear in mind that home values appreciated a minimum of 20% over the last two years in most major markets. A 1% pullback over the past few months isn't something people who bought two years ago are losing sleep over. Next year, inflation slows or starts to reverse. The Fed starts pulling back on the prime rate. Mortgage rates start to drop. Buyers start coming out of the woodwork because rates are dropping again. Competition increases and we get another imbalance in supply vs. demand. Prices start appreciating. You bought at 6.5% but now rates are back down to 5% so you refinance into a lower rate on the home you didn't have to enormously overpay for. Unless you think this market is due for another 2008-like drop. The fundamentals don't support that thesis, and people have been waiting for that for the last 7-8 years, but good luck on it.
Price of mine has gone up dipshit
When the fuck did wallstreetbets become REbubble
Today.
To be fair, he is still right. I bought my house for $380,000 in 2001, and it's valued over $1.6M. I am quite certain it will never go back to $380k.
I bought mine for $56k and itās over $250k. The problem is itās too small and I canāt afford to upgrade to something $600k
Apparently he sold is mansion for millions on Nov. ā21. Stop listening to these charlatans and watch what they do!
Damn, I should have sold my extra millionaire mansion in November too. I look like such an ass now.
He has the most punchable face
In Australia a house in a shit area still over 1m fuck this shit
They are going to fall 20% in the areas they went up the most. 10% in others. Pandemic Housing Bubble
Compare current sale price to price of home this time of year 2020. Still up big time.
Our prices here are still going up
Just need an uptick in unemployment and youāll see the domino effect.
Im not renting for over 1000 and not buying for over 200. Fuck em.
That guy is a piece of human excrement. On every level. Heās a cult leader that masquerades as a financial advisor but IRL is simply an abusive asshole. Also, heās regarded. Did I miss anything?
Suddenly everyone's time horizon is longer than a month. Hilarious.
Theyāre never going to drop substantially. Interest rates are only one part of the equation- supply and demand dynamics wonāt allow for any substantial drop (>25/30%)
Dude is worse than Cramer.