16
3

housing prices peak 2


 invite response                
2022 Apr 29, 9:29pm   454,047 views  4,732 comments

by AD   ➕follow (1)   💰tip   ignore  

.

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.

« First        Comments 4,459 - 4,498 of 4,732       Last »     Search these comments

4459   Misc   2024 Feb 27, 1:56pm  

Nope these are Case/Shiller prices. They measure the difference in prices for the same houses over time.
4460   UkraineIsTotallyFucked   2024 Feb 27, 4:34pm  

Misc says

Nope these are Case/Shiller prices. They measure the difference in prices for the same houses over time.


Not new houses then.
4461   GNL   2024 Feb 27, 5:47pm  

I'll post my prediction again.

House prices will not see any kind of significant decrease. In fact, I believe we will see prices hold and go higher and higher. America is for sure creating a 2-tier economy...the haves and the have nots. The % of have nots will increase. But I do believe that property taxes will go to the moon OR the fed printer will continue to go brrrrrrrrrrrrrrrrrrrr.
4462   mell   2024 Feb 27, 5:53pm  

GNL says


I'll post my prediction again.

House prices will not see any kind of significant decrease. In fact, I believe we will see prices hold and go higher and higher. America is for sure creating a 2-tier economy...the haves and the have nots. The % of have nots will increase. But I do believe that property taxes will go to the moon OR the fed printer will continue to go brrrrrrrrrrrrrrrrrrrr.

I agree with this. For many years I believed the next crash must bring house prices down, but any industry which is a racket is mostly immune to severe downturns
There are too many subsidies at play for both healthcare and housing, plus the unfettered pressure of immigration, which is why these 2 sectors won't crash.
4463   AmericanKulak   2024 Feb 27, 6:22pm  

UkraineIsFucked says


https://wolfstreet.com/2024/02/26/prices-of-new-houses-v-prices-of-existing-houses-why-sales-of-new-houses-hang-in-there-while-sales-of-existing-houses-plunge/

There was a bit of a hold breath moment about 15 years ago when new was holding out while used started to dip. Then it was bombs away.

We could be in that phase now.

The rates dropped a bit but the buyers are staying away in droves. Remember, last year was the weakest year for RE transactions since 1993, when the population was 15-20% smaller and boomers right in the wheelhouse of homeowner/family ages.

Left shoulder and head done. Maybe this summer and fall the right shoulder. it's goin' down. Fundamentals and Demographics can be delayed, but not defeated.



EDIT: Interesting point noticed by Wolf Richter - there's never been a double top in the history of the Case-Shiller. My comments above are me looking at it like other (stock) charts.

"Buy now, before competition resumes!" - spoken to the last bagholder
4464   AmericanKulak   2024 Feb 27, 6:47pm  

Wolf Richter
Feb 26, 2024 at 3:40 pm
ChS,

“Home prices aren’t that out of step with CPI”

LOL. CPI Rose by 31.6% over the past 10 years, while the median price of existing homes rose by 97% — home prices rose three times faster than CPI and nearly doubled!!!
4465   UkraineIsTotallyFucked   2024 Feb 27, 6:53pm  

30% of office buildings are ‘worth nothing’ and have to be torn down, say experts

https://creditnews.com/economy/30-of-office-buildings-are-worth-nothing-and-have-to-be-torn-down/
4466   AmericanKulak   2024 Feb 27, 7:01pm  

I think a dirty little secret is that Insurers, which always invested in large office buildings in Metros and retail around them, are actually raising premiums because their investments are foooked.
4467   GNL   2024 Feb 27, 7:18pm  

mell says


which is a racket

100% IMO. Everything starts there. Debt cannot be allowed to break the economy or cause deflation or be written off (no, it just gets papered over) so, less affordable homes will be built and only homes will be built for the upper levels of society because that is where the $$ is. It costs too damn much to build so, nothing can be "affordable" (look at all the companies starting or talking about dynamic pricing. Why? Entities are looking for every last shred of profit. Nothing can be left for the next person. You cannot have a robust society society wide (or as wide as possible) if nothing is left on the table for the next guy.). So, we will either get social unrest (human nature simply will not sit by and watch a small % of people have everything) or higher property taxes to pay the poor not to rip the country apart or printer continue to go brrrrrrrrrrrrrrrrr. The cost structure of America is too damn high.

Wouldn't it be easier and better to simply ensure everyone has a living wage job? Or is that muh socialism speaking?
4468   Misc   2024 Feb 27, 7:22pm  

UkraineIsFucked says

30% of office buildings are ‘worth nothing’ and have to be torn down, say experts

https://creditnews.com/economy/30-of-office-buildings-are-worth-nothing-and-have-to-be-torn-down/


Yes, because of climate change the forecast for Jewish lightning strikes has never been higher.
4469   AmericanKulak   2024 Feb 27, 7:32pm  

GNL says


Wouldn't it be easier and better to simply ensure everyone has a living wage job? Or is that muh socialism speaking?

Inflation and Housing costs won't be a problem until matching wage pressure happens, then it will be a problem.

We can take the power back by telling the HR Ditz we're not driving an hour each way and getting suited up to go to the Third Interview, only to be asked if what color socks we like to wear and why, or what our totem animal is, or the other "Internet Quiz" BS that passes for Cutting Edge Human Resources Managerial Techniques.

If she (dumbass 23 year old or bitter 55 year old Cruise Ship taker who can't even entice the horny 20-something 5'5" Indonesian Bartender anymore) wants to ask, the job needs to pay 3X the annual rent of the two bed apt near the company HQ office building. Or you can work remote and the company can save everybody some time and money.

GNL says


You cannot have a robust society society wide (or as wide as possible) if nothing is left on the table for the next guy.).

Materialism and Female Liberation (80% of consumer spending is female, and 2/3 of credit card debt AND the majority of college loans) was very expensive.

The funny thing is that if we lived and married and raised families like the 1950s, with banking laws from the 1950s not after the disasterous "reforms" of the 90s that "Modernized the banking system", most people could probably retire by 55 or semi-retire by 50 without the traditional pensions.

https://www.youtube.com/watch?v=7CMConpppdc
4470   GNL   2024 Feb 27, 7:53pm  

AmericanKulak says

Materialism and Female Liberation (80% of consumer spending is female, and 2/3 of credit card debt AND the majority of college loans) was very expensive.

Those numbers are accurate?
4471   AD   2024 Feb 27, 8:08pm  

AmericanKulak says


Wolf Richter
Feb 26, 2024 at 3:40 pm
ChS,

“Home prices aren’t that out of step with CPI”

LOL. CPI Rose by 31.6% over the past 10 years, while the median price of existing homes rose by 97% — home prices rose three times faster than CPI and nearly doubled!!!


I thought the housing aggregate for CPI or PCE was around 6.5% annually and about twice the overall CPI or PCE rate. So I'm not sure why The Wolfman at Wolf Street would state that.

I saw that firsthand as the average 3 bedrm townhome in my hoa was $150,000 in 2014 and rented for around $1300 a month. Same townhome sold for $310,000 in February 2022 when townhome prices peaked in Bay County, Florida.

Right now the average 3 bedrm townhome is easily selling for around $275,000 and renting for $2200 a month, based on monthly costs of $400 for HOA, $150 for property insurance and $140 for property tax.

Fortunately household income in Bay County has been catching up with housing since February 2022.

.
4472   AmericanKulak   2024 Feb 27, 9:23pm  

GNL says


Those numbers are accurate?

Going by memory. The 80% of consumer spending is accurate, and is the college loans (women have been the majority of college attendees for decades now). I'm foggy on the CC spending, as I am going by memory from hearing a podcast. I will verify - I have a book ordered on the subject by an Economist who worked for financial institutions.
4473   AmericanKulak   2024 Feb 27, 9:26pm  

AD says


Right now the average 3 bedrm townhome is easily selling for around $275,000 and renting for $2200 a month, based on monthly costs of $400 for HOA, $150 for property insurance and $140 for property tax.

We'll see - I know we disagree on this, but I think the median home price is more fairly in the $200k neighborhood when all is said and done.

I'm focused mostly on Central and South Florida, but I think the whole state will shake out on a trip back to the historical mean.


According to rent.com:

Rents in Florida have decreased -4.15% year over year.
Tampa’s rent has decreased -.96% year over year and -3.38% month over month, with a median rent of $2,162.
Orlando’s rent has decreased -1.99% year over year and -.04% month over month with a median rent of $2,110.

https://thelistingrem.com/are-rents-going-down-in-florida/

As flipping shifted to Short Term Rentals, a lot of people and entities leveraged to buy properties, esp. in and around vacation areas (like Orlando Theme Parks/Disney). However, with rents dropping, insurance and taxes rising, can they hold on? Alot of those "Cash buyers" were actually using loaned money from stocks or other bank loans rather than mortgages. As an example, my mother took a 2% loan on a fraction of her stocks to upgrade her apartment, but that loan is now up to 7%, fortunately she's mostly paid it down by now. Those who took big loans to buy COVID priced Zero Lot SFHs or Condo are probably in worse shape than her.
4474   AD   2024 Feb 27, 10:24pm  

AmericanKulak says

We'll see - I know we disagree on this, but I think the median home price is more fairly in the $200k neighborhood when all is said and done.

I'm focused mostly on Central and South Florida, but I think the whole state will shake out on a trip back to the historical mean.

According to rent.com:

Rents in Florida have decreased -4.15% year over year.
Tampa’s rent has decreased -.96% year over year and -3.38% month over month, with a median rent of $2,162.
Orlando’s rent has decreased -1.99% year over year and -.04% month over month with a median rent of $2,110.


That is a "different Florida" compared to the Florida panhandle, also affectionately referred to as America's Riviera or The Emerald Coast.

Okay, you mention a "return to the mean" ... so you mean (no pun) that housing prices should have went up about 5% each year since 2014 (when an avg townhome was $150,000) ?

(1.05^10) x $150,000 = 1.63 x $150,000 = $244,500

I think Robert Shiller stated back in 2015 that historically housing prices have appreciated about 4% annually since 1950.

.
4475   AmericanKulak   2024 Feb 27, 10:26pm  

AD says


I think Robert Shiller stated back in 2015 that historically housing prices have appreciated about 4% annually since 1950.

The decline of family formation - we are a post-nuclear family, not just post-extended family society - and the record unaffordability, and the building of 4/5 beds on Zero Lots is going to break the long term trend. Not many lazy girl jobs can support a $350k SFH mortgage when there's only a cat or single child, when factoring in 6 figure college debt on top of it all.

Then we're going to have the Boomer expiration/mandatory downsize (meaning, it will not longer be an option to delay leaving the larger home due to health or death) starting in the next 5-10 years. While Millies will inherit Boomer properties, they as often as not be many states away, not able or willing to relocate due to job/other factors, and add to a rental or property dumping glut, which will impact house sale prices.

The market can remain irrational for very long periods of time, esp. when there's been easy money and lots of regulatory capture to keep it running.
4477   AD   2024 Feb 27, 10:38pm  

AD says

I'm focused mostly on Central and South Florida, but I think the whole state will shake out on a trip back to the historical mean.

According to rent.com:

Rents in Florida have decreased -4.15% year over year.


3 bedrm townhome rents went up 7% over last 12 months for Panama City Beach: https://www.zillow.com/rental-manager/market-trends/32407/?propertyTypes=townhouse&bedrooms=3

My guess is because the 3 bedrm townhomes come with a very valuable garage and people don't want to rent a 3 bedroom apartment on the 2nd floor.

.
4478   AD   2024 Feb 27, 10:48pm  

AmericanKulak says

The decline of family formation - we are a post-nuclear family, not just post-extended family society - and the record unaffordability, and the building of 4/5 beds on Zero Lots is going to break the long term trend. Not many lazy girl jobs can support a $350k SFH mortgage when there's only a cat or single child, when factoring in 6 figure college debt on top of it all.


I see your point as far as "demographics is destiny" (to quote Professor Larry Sabato)

You are saying there won't be enough demand for McMansion's (+4 bedroom, +3200 square feet, 3 car garage, etc.) such as in Eman's zip code as well as in mountain towns of Colorado and Idaho, etc

I guess then that is why we are not seeing a large increase in new home starts as even with immigration, the home builders are accounting for this ?

.



.
4479   WookieMan   2024 Feb 28, 7:25am  

AmericanKulak says

Then we're going to have the Boomer expiration/mandatory downsize (meaning, it will not longer be an option to delay leaving the larger home due to health or death) starting in the next 5-10 years.

Boomers are keeping their homes. Likely paid off. Kids living in them. I'm working on a deal to get my mom $200k or so for 65 acres on a river. They're staying put and she'll buy my house or give me money for the build. Best Man in my wedding parents pay $30k/yr in property taxes. No kids in the school. The one's with wealth ain't leaving. They don't care. If you have $2M+ in the bank/investments, You can sit on your ass with everything paid especially in this high interest environment.

I don't see the market changing for kind of a long time. I don't like predictions, but I think we're going to see the lowest SLOWEST housing boom. I'm talking 2 decades. This is slight upward/sideways movement for a long time. There's no crash coming. It just won't be gang busters with a few regions that might eat shit, but 20-30% losses ain't coming.

I don't think people realize what the housing bust was. It was financing and overbuilding. That's not happening and probably won't in most our lifetimes outside of some hipster areas.
4480   zzyzzx   2024 Feb 28, 8:48am  

AD says

My guess is because the 3 bedrm townhomes come with a very valuable garage and people don't want to rent a 3 bedroom apartment on the 2nd floor.


You would think that being on at least the 2nd floor in a place like Panama City beach would be the more desirable location.
4481   zzyzzx   2024 Feb 28, 8:51am  

https://finance.yahoo.com/news/us-home-buying-demand-nears-120000320.html

US Home-Buying Demand Nears Worst Since 1995 With Rates Above 7%
4482   UkraineIsTotallyFucked   2024 Feb 28, 9:48am  

zzyzzx says


https://finance.yahoo.com/news/us-home-buying-demand-nears-120000320.html

US Home-Buying Demand Nears Worst Since 1995 With Rates Above 7%


But...BUT RE 'experts' On PatNet Who Don't Know Shit About The Fed Nor Demographics TOLD US the 7% mortgage rate was DOA in 2024!

Reality: Not only is it still here, but...despite the occasional dips below the 7% threshold...is going to stay or even rise, over time.

That means housing prices are going to have to fall, in general. All markets are local so there will be some big variations.

Fall...or don't get sold. Homebuilders have already figured this out and now outcompete with existing home sellers with mortgage points buy downs. They have to move their houses, after all.
4483   AD   2024 Feb 28, 1:08pm  

zzyzzx says

AD says

My guess is because the 3 bedrm townhomes come with a very valuable garage and people don't want to rent a 3 bedroom apartment on the 2nd floor.

You would think that being on at least the 2nd floor in a place like Panama City beach would be the more desirable location.


Bedrooms are on the 2nd floor of townhomes in Panama City Beach. Are you implying because of flooding ? Or even worse such as a tsunami ?

.
4484   GNL   2024 Feb 28, 1:10pm  

In my opinion, we only get a crash if people can't pay their mortgages. If RE transactions stay low enough, that could happen.
4485   AD   2024 Feb 28, 1:11pm  

UkraineIsFucked says

That means housing prices are going to have to fall, in general. All markets are local so there will be some big variations.

Fall...or don't get sold. Homebuilders have already figured this out and now outcompete with existing home sellers with mortgage points buy downs. They have to move their houses, after all.


But adjustments are being made as the new home construction rate is still well below 2005 levels.

The home building industry is seeing the same demographic data as you, so I don't think they will overbuild and there will be an oversupply condition to cause a major drop in prices in the long term.

If anything home prices may return to the mean such as fall back to the trend line of 4.25% annual increase in home value.

I see the air slowly being let out of any housing bubble, as there are not as many subprime mortgages as in 2004-2007.

.
4486   UkraineIsTotallyFucked   2024 Feb 28, 2:01pm  

AD says

The home building industry is seeing the same demographic data as you, so I don't think they will overbuild and there will be an oversupply condition to cause a major drop in prices in the long term.


Did I say they were going to overbuild? No, I did not.

And you don't know what I was referring to by demographics. Had nothing to do with demand for housing. Had to do with cost of money. Since I was talking about mortgage rates I figured that was pretty clear.
4487   AD   2024 Feb 28, 2:28pm  

UkraineIsFucked says


AD says

The home building industry is seeing the same demographic data as you, so I don't think they will overbuild and there will be an oversupply condition to cause a major drop in prices in the long term.

Did I say they were going to overbuild? No, I did not.

And you don't know what I was referring to by demographics. Had nothing to do with demand for housing. Had to do with cost of money. Since I was talking about mortgage rates I figured that was pretty clear.


I never said you said they were going to overbuild. I stated they would adjust the new construction rate to match forecasted demand. Yes the cost of money impacts demand. The higher the future cost, then prices may drop even more if there is an over supply. That is why home builders are cautious.

Also combine this with housing prices essentially remaining flat from 2022 to 2025 so that income catches up with housing costs.

And also demographic trends may cause a drop in demand for +4 bedroom homes as AmericanKulak pointed out. That is another factor that is making home builders cautious.

.
4488   AD   2024 Feb 28, 2:34pm  

UkraineIsFucked says

Had to do with cost of money. Since I was talking about mortgage rates I figured that was pretty clear.


The 30 year mortgage rate is eventually going to steady around 5.5% this year, which puts it about 2% above the locked-in mortgage rate when housing prices peaked (circa February 2022).

Even motivated home sellers in 2024 and 2025 may offer to buy down 4 discount points to lower that rate from 5.5% to 4.5%. It only costs 4% of the mortgage to buy the 4 points, but is nearly comparable to a 10% drop in home price.

Sale prices in my townhome HOA have fallen about 15% from Februrary 2022 peak. So a rate of 4.5% is a great deal for a mortgagee especially since the median local household income has increased +5% annually since early 2022.

.
4489   AmericanKulak   2024 Feb 28, 2:42pm  

WookieMan says


Boomers are keeping their homes. Likely paid off. Kids living in them.

Until they MUST pay for assisted living that day, no delaying for market recovery. And many boomers haven't entirely paid off their homes.

And if the kids inherit, you're assuming the kids can move from Indiana to Arizona and ditch their jobs or businesses and their own kid's schools in a heartbeat to live in them.

And if they do so, that only means yet another house will go on the market in Indiana instead of Arizona. It will still be rented out or sold, and it will mostly happen in a decade time frame
4490   WookieMan   2024 Feb 28, 2:44pm  

AD says

I never said you said they were going to overbuild. I stated they would adjust the new construction rate to match forecasted demand. Yes the cost of money impacts demand. The higher the future cost, then prices may drop even more if there is an over supply. That is why home builders are cautious.

This is basic math guys and understand the past. There are no builders. There are no skilled trades for new construction. All this happened because of the housing crash. Throw covid on top of it. We're 10 years from have any substantial building at all nationally. Millennials will eventually get their shit in order OR they'll take mom and dads house. The latter is the most likely.

So no one learns the skills to build anything. No new houses are built. This is obvious as can be. Sales will stay low (which don't matter) because of interest rates. Prices will be on a slow upslope for another decade until building ramps up. Honestly unless any of us live to 100, I don't see how there could be a housing crash. It would be an economic collapse for whatever reason.

The 2000 tech crash was minor to the housing crash. These thing don't go boom that often. If you're gonna live somewhere for 5-10 years minimum I'd buy even at today's interest rates. Not saying it's a buyers market, but you won't lose.
4492   GNL   2024 Feb 28, 3:50pm  

AmericanKulak says





That graph looks sucky.
4493   AD   2024 Feb 28, 3:57pm  

WookieMan says

The 2000 tech crash was minor to the housing crash.


Yes as the 2000 tech crash led to the dissolution of tech firms that were vampires as far as equity blood.

So the stronger companies survived, as even Jeff Bezos said that Amazon would make it through the crash because it was wisely investing for the future.

Yes, the housing crash definitely had a bigger disastrous footprint.

Yes, I was just reading PCB Life (myPCBlife.com) about in-home assisted living by "Panhandle Assisted Care". The future trend is this as far as innovative ways to care for senior citizens in their homes.

Our local school district which includes Haney Tech is promoting blue collar trade certifications. They are offering scholarships such as for training to be carpenters, conditioning techs, electricians, etc.

Also Florida is working to ensure the state is not flooded with undocumented workers in the construction trade.

.
4494   AD   2024 Feb 28, 3:59pm  

AmericanKulak says






yeah, as the home construction industry is tapping the brakes as far as what they see ahead in the future such as with respect to demographics and also interest rates.

I think the new norm is not low interest rates or Zero Interest Rate Policy like from 2008 to 201, so the 30 yr mortgage rate will likely be around 5.75% instead of being below 4% for at least 12 months.
4495   GNL   2024 Feb 28, 5:51pm  

You're predicting sub 4% rates in 12 months?
4496   AD   2024 Feb 28, 6:27pm  

GNL says

You're predicting sub 4% rates in 12 months?


No. I am predicting the 30 year mortgage rate steadying around 5.5% within the next 12 months.

.
4497   GNL   2024 Feb 28, 9:06pm  

VA which has been providing no money down mortgages and 100% cash out refis calls for halt to foreclosures:

https://news.va.gov/press-room/va-calls-on-mortgage-servicers-to-pause-foreclosures-of-va-guaranteed-loans-through-may-31-2024/

FHA suspends foreclosures for 60 days: https://www.housingfinance.com/news/hud-halts-foreclosures-for-60-days_o

The entire US monetary and financial system depends on overpriced real estate and that system is going fight like a meth-crazed army of drooling red-eyed Orcs to defend its goblin infested empire,
4498   AD   2024 Feb 28, 9:29pm  

GNL says

VA which has been providing no money down mortgages and 100% cash out refis calls for halt to foreclosures:

https://news.va.gov/press-room/va-calls-on-mortgage-servicers-to-pause-foreclosures-of-va-guaranteed-loans-through-may-31-2024/

FHA suspends foreclosures for 60 days: https://www.housingfinance.com/news/hud-halts-foreclosures-for-60-days_o


Election year scheme ? I am expecting more announcements like in addition to the regular proclamations of student loan debt forgiveness.

.

« First        Comments 4,459 - 4,498 of 4,732       Last »     Search these comments

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions