patrick.net

Raise the interest rates. We need a Real Housing Recovery. Not a bubble re-inflation.

This is only going to get worse, but in reality it's better as the prices adjust to their intrinsic values and affordability. Look for another 20%-25% haircut in prices. Soon we will be down 40%-50% from peak prices. And that's a good thing.

mell says

This is only going to get worse, but in reality it's better as the prices adjust to their intrinsic values and affordability. Look for another 20%-25% haircut in prices. Soon we will be down 40%-50% from peak prices. And that's a good thing.

Bullshite

https://boingboing.net/2019/01/08/ipo-or-bust.html

Asking prices down 12%. But the offers accepted are often 10%-30% below asking. It's not unusual for a "motivated" seller to sell a house listed for 1.5MM for just above 1MM whereas at the peak they sold over asking price. That's here in the bay area, other parts of the country where prices have not bubbled as much will obviously hold more steadily, but this is already around a 25%-40% decline on average for the final sale price from the peak.

Sacramento Housing in February: Sales Down 10% YoY, Active Inventory up 16% YoY

From SacRealtor.org: February sees increase in sales volume, sales price

The month closed with 1,015 total sales, a 13.5% increase from the 894 sales of January. Compared to the same month last year (1,131), the current figure is down 10.3%.
...
The Active Listing Inventory decreased, falling 4.8% from 2,095 to 1,994 units. The Months of Inventory decreased 13% from 2.3 to 2 Months. [Note: Compared to February 2018, inventory is up 15.7%] .
...
The Average DOM (days on market) increased again, rising from 40 to 43. The Median DOM remained at 27. “Days on market” represents the days between the initial listing of the home as “active” and the day it goes “pending.” emphasis added

CR Note: Inventory is still low - months of inventory is at 2.0 months, probably closer to 4 months would be normal - and this is the smallest YoY increase since January 2018.

https://www.calculatedriskblog.com/2019/03/sacramento-housing-in-february-sales.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+CalculatedRisk+(Calculated+Risk)

House across the street from us sold in two days over the weekend. They did not overprice it, it may have even had bids. Lots of Chinese looky-loos. I think they must all take the same real estate courses in China because they all seem to have the same methods for checking out the houses. On the outside, they look at everything and touch the stucco and siding. They walk in increasingly wide circles, and up and down the street and around the house, and go over and check out the arroyo before going into the house to look for flaws.

Very sensible, they probably do a better site inspection than the average realtor. This particular house was extensively renovated five years ago.

People we know in Aptos, who decided Nirvana was in SoCal??? sold theirs also in a few days. It was also extensively renovated and priced more or less at market. I think given the amount they put in renovations, they didn't recover their renovation money, but the general real estate appreciation lifted all boats in the harbor and they did all right. I cannot understand why either of these people move except for the general disgruntled Cali thing where someplace new is going to automatically be better. I think some people move just for the fuck of moving.

My buddy at work is flipping homes on the side. He buys low end homes (about 30-40k) puts 20k into them, and prices them just under 100k. Gone in a matter of days.

Tenpoundbass says

Raise the interest rates. We need a Real Housing Recovery. Not a bubble re-inflation.

The 30 year rate is currently around 4.3%. It last peaked back in November 2018 about 5%.

https://finance.yahoo.com/news/mortgage-rates-tumbling-homebuying-more-173736226.html

I think housing will be affordable when the price to income ratio drops below 3.75 and the 30 year mortgage rate is no more than 5%.

https://www.longtermtrends.net/home-price-median-annual-income-ratio/

joshuatrio says

Gone in a matter of days.

So will your buddy's business when things get far enough along.

Kakistocracy says

joshuatrio says

Gone in a matter of days.

So will your buddy's business when things get far enough along.

Worst case scenario is that he breaks even on a couple homes - considering his investment risk is so low.

Kakistocracy says

joshuatrio says

Gone in a matter of days.

So will your buddy's business when things get far enough along.

Nope, wrong again.

Just the opposite, there will be BIGGER bargains available when everyone defaults.

Trulia says the market is in the early stages of a cyclical downturn - This is how spring's housing market will fare

Although several reports indicate the housing market is projected to heat up this spring, recent data from Trulia suggests the industry is currently experiencing the early stages of a cyclical downturn.

Cyclical housing market downturns occur roughly every 10 years, and they typically don’t happen overnight.

Instead, they play out steadily over a few years, first showing up in sales volumes and later—usually a year or two later—in prices,” Trulia writes.

“The housing market currently appears to be in the early stages of such a downturn: declining sale volumes and other market indicators indicate that it is cooling off, gradually pivoting away from the heated sellers’ market of recent years.”

And Trulia is right, home prices have been steadily depreciating since early 2018.

In fact, a recent report from CoreLogic indicates that since peaking at 6.6% growth in April 2018, home-price growth has continued to slow down.

However, despite these concerns, Trulia believes the housing market still has the ability to come out on top.

“The downturn we’re entering is inherently different from the previous one that saw home values plummet over 40%, and is likely to be mild,” Trulia writes. “Declining sale volumes will probably be followed by small declines in prices or possibly just a prolonged period of flat-to-modest housing price growth.”

As home prices continue to depreciate, Trulia predicts the housing market will shift in the favor of homebuyers.

“Sellers should expect price cuts to be more common, and properties will likely take longer to sell, causing inventory to build up,” Trulia writes. “More inventory, in particular, will slowly ease the competition between buyers, allowing them to negotiate with this spring’s sellers a shade more confidently.”

So, how will the housing market fare overall this spring? Well, Trulia says – just fine.

“There almost certainly won’t be a steep drop-off in home values like the one that occurred a decade ago, though the unfolding slowdown will be more palpable in some pricey markets,” Trulia writes. “Instead, any cooling in appreciation is likely to be moderate and happen gradually – likely showing up as either an extended period of flatter home price growth, or as a modest price decrease in the next couple of years.”

https://www.housingwire.com/articles/48711-trulia-this-is-how-springs-housing-market-will-fare