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housing prices peak 2


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2022 Apr 29, 9:29pm   598,718 views  5,566 comments

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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net

Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.

Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.

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1152   AD   2022 Oct 22, 8:03pm  

Austin, Texas was ranked as the number one city experiencing declines in home prices. The median home price in the city is $558,275, which is 10.3% lower than where it was in June. Since September 2021, home prices in Austin have increased 2.2%.

Phoenix, Arizona ranked second on the list.

Stockton, located in San Joaquin County in Northern California, was ranked as the 8th city to experience notable home price reductions. According to the website, the median home price in Stockton is $581,725, a 7.7% decrease from home prices in June.

https://ktla.com/news/california/california-home-prices-have-fallen-most-in-this-city-since-june-study/
1153   mell   2022 Oct 23, 9:08pm  

In our area prices started rising again, we're maybe 5% off the peak now. Inventory is tightening again but that's normal for fall. It's a pretty normal market here right now, neither buyers nor sellers market.
1154   stereotomy   2022 Oct 23, 9:19pm  

I was in Austin in the early naughties. Housing prices were increasing at ridiculous rates. Finally I said "Fuck it!" and just continued to rent. Because I was in TX at the time, I didn't get to enjoy the full extent of the "cash-out" refi housing bust - TX does not allow cash-out refis.

If I'm lucky, 30-year fixed rate MTG will top 8% and persist for at least 2-3 years. That might be enough to bring prices down to where I can hold my nose and pony up cash.
1155   mell   2022 Oct 23, 9:22pm  

stereotomy says

I was in Austin in the early naughties. Housing prices were increasing at ridiculous rates. Finally I said "Fuck it!" and just continued to rent. Because I was in TX at the time, I didn't get to enjoy the full extent of the "cash-out" refi housing bust - TX does not allow cash-out refis.

If I'm lucky, 30-year fixed rate MTG will top 8% and persist for at least 2-3 years. That might be enough to bring prices down to where I can hold my nose and pony up cash.

I know a few who sold into the craziness in Austin and relocated. Austin was definitely more overheated than any city in CA.
1156   WookieMan   2022 Oct 23, 9:42pm  

mell says

I know a few who sold into the craziness in Austin and relocated. Austin was definitely more overheated than any city in CA.

I used to go to Austin 3-4 times a year since Keller Williams RE was based out of there for their national training. Sat at 10 top wedding style tables with Gary Keller,
Jay Papasan, and Dave Jenks. It was interesting to say the least. They were businessmen and not real estate brokers. They have the game down of fleecing their brokers of their commissions. It was kind of funny that all these morons didn't realize what they were doing.

Tangent aside, Austin sucks. I don't like any major metro in Texas. San Antonio I haven't been to, but I've heard good things. I imagine I'd like rural TX, but fuck Austin. Houston is a shit pit. Haven't been to Dallas since I was a kid, but I'm pretty sure it sucks. I think I'd like some of the border towns. I know enough Spanish to get by and between BBQ and Mexican/Central American food I'd be in heaven.

Not that I'm moving out of state, but I'm down on popular states. Places like TN, TX, ID, MT, etc. Basically if a great job opportunity came up to move to them I'd probably decline. My state is fucked, but it's just not worth moving. My buddy has been in MT for 5-6 years now. He really has no friends. He's a super social dude too. You'll shoot the shit with people on the trail, fly fishing, etc. but it has a lonely vibe to it. Bozeman and Missoula specifically.
1158   zzyzzx   2022 Oct 24, 7:02am  

https://finance.yahoo.com/news/not-time-greedy-home-flippers-110000999.html

'Not the time to get greedy': Home flippers are now getting burned by the US housing downturn, slashing prices to cut losses — here are two big reasons why
1159   Patrick   2022 Oct 24, 9:47am  

https://thepricklypear.org/housing-bubble-woes-plunge-in-buyer-traffic-homebuilder-confidence-a-lot-faster-than-during-housing-bust-1/


Holy-moly mortgage rates of 7% slash demand for new houses due to super-inflated prices, but prices are now coming down.

Traffic of prospective buyers of new single-family houses plunged to the lowest since 2012, excluding the two lockdown months April and May, and is now approaching even the levels of those two lockdown months, according to data today from the National Association of Home Builders.
1160   mell   2022 Oct 24, 10:09am  

WookieMan says

Tangent aside, Austin sucks. I don't like any major metro in Texas. San Antonio I haven't been to, but I've heard good things. I imagine I'd like rural TX, but fuck Austin. Houston is a shit pit. Haven't been to Dallas since I was a kid, but I'm pretty sure it sucks. I think I'd like some of the border towns. I know enough Spanish to get by and between BBQ and Mexican/Central American food I'd be in heaven.

It has some nice hoods and summer party ropftop bar lanes, like the Domain, and some nice mansion on the hills, and a good yuppie scene, though too gay for me. I wouldn't say it sucks but it's def overpriced. Downtown is filthy like SF, and the rest is just urban sprawl, not that pretty.
1162   zzyzzx   2022 Oct 24, 10:13am  

Property tax increases basically turn any conventional loan into an ARM-like situation where homeowners are seeing a huge increase in their monthly payments.
1164   zzyzzx   2022 Oct 24, 10:54am  

https://www.reddit.com/r/RealEstate/comments/yb91se/bought_in_april_2022_hate_it_want_to_sell_how/

Bought in April 2022. Hate it. Want to sell. How fucked am I?

I live in a really rural area about 1.5 hours outside Chicago. Not a nice neighborhood but not bad. Typical smaller town vibes. Nothing to do. Kinda hickish.

I bought in April for 330k which was actually fair at that time. Comps at the time in the same neighborhood were selling at 335-340k. It’s a 1600 sqft ranch on about 1/4 acre in a typical suburb like cul de sac. My property taxes are killing me and already went up from $700ish/month to 800/month.

I also fucking hate this house. It just sucks. Problem is, comps for my house right now are selling for 300-305k. I owe 305k. A neighbor 2 houses down has basically the exact same copy of my house just styled a little different but size, yard, layout, all the same and listed for 295k this week.

So basically my home has lost over 10% of its value from when I bought but I want out. How fucked am I?
1165   AmericanKulak   2022 Oct 24, 11:03am  

zzyzzx says


My property taxes are killing me and already went up from $700ish/month to 800/month.

Da Fuq? In a rural area?

I pay less than $1000/YEAR on a beachside apartment. And no income taxes at all.
1166   AmericanKulak   2022 Oct 24, 11:05am  

WookieMan says


San Antonio I haven't been to, but I've heard good things

Nice but on the way to becoming Austin II. Will take a decade or so to be Austinized. Increasingly woke policies and dictatorship of the Homeless Drug Addicts.
1169   Ceffer   2022 Oct 24, 11:53am  

zzyzzx says


Stressed seller looking for advice

Isn't that called 'lowering your asking price' to obtain instant relief?

It's interesting in California watching the die hards, clinging to their fiat equities, try to command imaginary prices while stubbornly holding on to their swanning delusions of brilliance and wealth. The wailing and gnashing of teeth this winter will be legendary.

Real estate hoarders will be putting their stuff on the market, trying to capture an equity chair when the music stop. Recent buyers will be going into default and handing the keys back as they pay inflated taxes on negative valued properties that swallowed up their down payments. Happened before, will happen again.
1170   WookieMan   2022 Oct 24, 11:54am  

zzyzzx says

I live in a really rural area about 1.5 hours outside Chicago. Not a nice neighborhood but not bad. Typical smaller town vibes. Nothing to do. Kinda hickish.

Nope. No way that person bought a house for $330k 90 minutes outside of Chicago. Yes there are big houses and acreage, but no, not a 1,600sf ranch for $340k. That's 250-280k all day. Even new construction. Once you're past 50 miles of Chicago prices plummet. North of Chicago into Wisconsin and South to Indiana are the only exceptions.

Where I'm at $350k gets you a 4/3.1 with a 3 car garage. Probably 3,200sf. Sure taxes are a cunt, but price wise it's not what this guy is talking about. He bought a hill billy McMansion if he paid $330k. That's on him.

We were close 6 years ago to buying 14 acres with a 4k sq ft. home with walkout basement on a pond. Gated. Tennis court. $650k list. I regret not doing it. That reddit dude is full of shit unless it's a legit ghetto rural area and overpaid. And that's 48 miles from Chicago, or 50-60 minutes.
1171   GNL   2022 Oct 24, 2:09pm  

I just got back from photographing a 5,000 square foot home in a very nice subdivision. The Realtor told me the seller is going to get $250,000 less for the home than the same home in the same neighborhood sold for 6 months ago. About a 20% loss. This is in Northern Virginia. The Realtor said she told them to hurry and sell before the spring because in the spring prices will be even lower.
1172   AD   2022 Oct 24, 2:14pm  

GNL says

The Realtor said she told them to hurry and sell before the spring because in the spring prices will be even lower.


This could be a seller's agent trick in order to try to make a quick sale now. Or the seller's agent sees the 30 year mortgage rate increasing from around 6.5% to 8.5%. The 30 year rate historically has been about 2.25% above the Fed Funds rate.

But the mortgage rates are being set based on anticipation of higher rates, so even if the Fed Funds rate is at 5% at end of this year, the 30 year mortgage rate may reach 8%.

This is what happens when there is a lot of flux or lack of steadiness with the Fed Funds rate such as with these 0.75% increases every few months.
.
1173   Booger   2022 Oct 24, 2:35pm  

Married With Children TV show reference:

1174   AD   2022 Oct 24, 10:04pm  

ad says

This is what happens when there is a lot of flux or lack of steadiness with the Fed Funds rate such as with these 0.75% increases every few months.


“We are holding to our view that this is a spike right now, driven by financial-market dislocation, heightened level of volatility in the market and this global slowdown we’re about to experience, the likelihood of recession in the U.S. will begin to pull this number,” Fratantoni (of the Mortgage Bankers Association) said.

The Mortgage Bankers Association predicts a 5.3% rate for 30 yr mortgage at the end of 2023.
1175   Eman   2022 Oct 24, 10:28pm  

zzyzzx says




Detroit and the US are more overvalued than SF, SD, NY and LA? 😂😂😂
1176   AmericanKulak   2022 Oct 24, 10:35pm  

I'm loving the PANIC.

According to the Case-Schiller, prices are higher now than before financial crisis, by a LOT


YEEHAH! Cash on the sidelines looking for cheap, cheap, cheap. Buy when there is blood on the streets!
1177   Ceffer   2022 Oct 24, 10:38pm  

I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.

If they get serious about inflation, I think rates could bob back up to 6 to 8 percent. That's not so bad. All my mortgages were around that before I paid them off and I thought those were good rates at the time.
1178   AmericanKulak   2022 Oct 24, 10:38pm  

Even NAR can't put lipstick on the pig.


"B-b-but, prices aren't coming down"

Well yeah, because sellers need to borrow at 7%+ to buy the next property and they need that $300k sale to make the math work.

They'll either sit on it and take $200k in two years, or be smart and drop it 10% right now.
1179   mell   2022 Oct 24, 10:43pm  

Ceffer says

I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.

If they get serious about inflation, I think rates could bob back up to 6 to 8 percent. That's not so bad. All my mortgages were around that before I paid them off and I thought those were good rates at the time.

It depends on the principal lol. Back then houses were cheaper, glad we locked in 3%.
1180   Misc   2022 Oct 24, 10:53pm  

Nothing that 6 million more illegals can't cure.
1181   AD   2022 Oct 25, 12:10am  

Misc says


Nothing that 6 million more illegals can't cure.

Yeah, I've seen in the Florida panhandle a couple with 2 daughters who seem recent arrivals from Central America renting a townhome in my HOA. I think both work and easily make $17 an hour each for a combined $34 an hour for household. Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

They probably earn at least $58,000 a year. Their rent is about $1600 a month for a 2 bedroom, 2.5 bath townhome.

.
1182   AD   2022 Oct 25, 12:17am  

mell says


I think 5.3 percent holding into 2023 on 30 years mortgage would qualify as 'Realtor's optimism' i.e. designed to keep turnover going and people buying.


That is what I am thinking as far as liquidity and not seeing a drop off in sales volume.

The seller's agents could convince enough (reasonable) owners to drop the prices 17% (from 2021 peak levels) over 4 to 6 months with steady price drops.

I think the Fed is eyeing at least a 17 to 20% drop in house prices. Prices should fall 10% for every 1% increase in the 30 year mortgage rate.

I just don't see the Nat'l Assoc of Realtors (NAR) (and the Federal Reserve) siting idly during a 25% drop cause then buyers will just remain on sidelines patiently for a 35% to 45% drop as housing may go into a deflation death spiral.

.

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1183   Misc   2022 Oct 25, 1:00am  

The household and small business sectors of the economy are in surprisingly good shape. They have learned to deal with government fuckery. They are sitting on about $17 trillion in cash (not stocks or bonds or bitcoin...cash!). There is a record low number of houses being listed for sale. The prices may be more sticky than usual because everyone thinks the Fed will lower rates again when some other sector blows up.

There are trillions of dollars in ponzi schemes outside of housing. The Fed will panic when they start to collapse. At least that's what a lot of homeowners think.
1184   WookieMan   2022 Oct 25, 4:14am  

ad says

Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50. Generally no one wants those jobs and if in a booming area and booming tourist area those people are getting paid more than you'd think. Basically Americans don't like those jobs and therefore a shortage of labor and wages go up for tasks that need to be done.

Outside of STEM and trade/union schools, college as we know it is dead. And until American born citizens realize this they're going to be living with mom and dad for a long time. That also is another factor in housing. If the kids ain't buying and not having kids, there just simply is lower demand for builders to build. Now factor in interest rates.

Prices will drop/stall, but we're not going to see a housing crash like we did 15 years ago. There's significantly less movement and kids, hell adults are staying with mom and dad more. As long as mom and dad aren't paying for everything besides the house, I don't see that as being awful. We stayed with my parents a bit after college. Paid a small rent. Split the utilities. We had our own cell phones. Car payments. Paid our own insurance. Student loans.

My MIL on the other hand still pays car insurance, cell phone, health insurance for 3 of my sister in laws. All are over 30. The 4th is on government insurance because she's a single mom, not really we raise my nephew, and food stamps. Until parents cut the cord so to speak, I don't think younger people say 25-32 are buying houses any time soon. Therefore less building, parents staying in their homes with low mortgage rate (until now) so there's a high floor to RE prices if that makes sense, or at least how I analyze it.

Can't remember if is was ad or someone else above, but when interest rate rise, people are going to stay put. Factor in the young people staying home, I just don't see housing prices dropping all that much except for people that absolutely HAVE to buy and sell. And I'd venture to guess a lot of that is corporate relocations anyway. It would take a big job loss situation for people to not make payments and foreclose.
1185   1337irr   2022 Oct 25, 5:18am  

WookieMan says

ad says


Husband works as a helper in construction, and the wife cleans vacation rentals and hotel rooms. Both construction and tourism are booming in the Florida panhandle.

I'd venture to guess it's more than $34/hr combined with those jobs. I'd guess closer to $50.

Maybe I should quite my job and clean houses...
1186   zzyzzx   2022 Oct 25, 5:56am  

https://www.reddit.com/r/FirstTimeHomeBuyer/comments/ycgrjg/my_homebuying_adventure_has_sadly_come_to_an_end/

My homebuying adventure has sadly come to an end.

Unfortunately, it is with great sadness I am forced to end my homebuying adventure. I started back in April 2021, putting 5%/$40,000 down as a deposit on a to be constructed new home, supposed to be finished in June 2022. I had been saving for years for this moment - and here it was, at long last. I thought I was smart - didn't have to deal with a realtor, didn't have to worry about being outbid, didn't have to worry about a home inspection or buying a fixer-upper.

I rate locked for 240 days back in January 2022 at 2.85%. A steal. . . my current rent for a 2 bed 2 bath was $2,750. Here was my chance to own a 3 bed 3 bath brand new townhome - own, not rent for a monthly mortgage payment of $3,060.

Here's where things went sideways. I thought 240 days would enough for a rate lock. Construction was to be done by June 2022 - I even accounted for delays in construction, so 240 days would put me into September, 3 months past the expected completion. As the date crept closer, the progress on the house slowed down. June completion wasn't happening. Neither was July. Or August. . . . and so on and so forth. Simultaneously, rates kept rising. 3%. . . 4%. . . 5% . . .

Around July, I received notice from the builder that they had encountered substantial delays and the close date would now be November. Panicked, I called my lender and asked about a rate lock extension. By now, rates were around 6.5%. We were able to negotiate a rate lock extension starting at the expiry of the original rate lock - 60 days past, which would take me into November. The rate lock cost me an additional $10,000 but to save 3.65% on my mortgage was worth it.

And then, tragedy. Again, delays from the builder. Estimated completion is now February 2023 - 9 months past when it was supposed to be complete. I asked my lender is there any option to do an additional extension - to which they declined. I am now stuck at shopping around for rates. No one is willing to extend a rate to February, let alone any longer. Rates are currently at 7.5%, who knows what whenever this thing is finished. At 7.5%, my monthly payment would be $5,200 - $2,200 more than it would have been if the builder had finished on time. Something that would demolish my monthly budget.

And so, without a lender, without any recourse, and most importantly, without a home, I am forced to end my homebuying adventure and back out of the contract. The builder is claiming "pandemic delays", which allows them to unilaterally extend the closing date without recourse. They will pocket my hard-earned deposit money, and I will return to my apartment, defeated, and begin saving once more, minus the $40,000 I wasted on a gamble.
1187   WookieMan   2022 Oct 25, 6:00am  

If you start your own service you can make good money and expense a lot of bull shit that you'd have to pay for a normal W-2 job. Gas, 50% of meals, supplies for cleaning you can use on your own home. Besides the labor it's probably not a bad gig if you really think about it.

My friends wife started a cleaning service in IL and then they moved down to FL. White American female. I think she's pulling $80k/yr in FL cleaning houses. Generally the homeowner leaves or you're doing vacation rentals, so you only have to deal with the initial sale and it's on repeat. She could scale and hire more cleaners and make even more.

Only thing that would creep me out, or gross me out is vacation rentals with cum filled towels, body hair, etc. I don't think I could do that everyday. Most homeowner cleanings they keep that shit clean by themselves as you eventually get to know your cleaner and they you. So you tend to keep the gross stuff out of site.
1188   GNL   2022 Oct 25, 6:17am  

ad says

Prices should fall 10% for every 1% increase in the 30 year mortgage rate.

At this point that means a 30% decline then.
1190   B.A.C.A.H.   2022 Oct 25, 6:58am  

WookieMan says

you tend to keep the gross stuff out of site.

Ha!

A clever double-entendre by you WookieMan, "out of site / out of sight".

I wish I had your wit!
1191   zzyzzx   2022 Oct 25, 7:03am  

GNL says

At this point that means a 30% decline then.


Don't you mean 40%?

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