patrick.net

<<< YEP!

Homebuyers will return when Homeloaners adjust prices way down to account for the doubling of interest rates.

Stats, Schmats. It's the monthly payment, end of story. There are no endless trains of Foreign Buyers and DINKs looking for 3-4 beds in the suburbs that are an hour drive from the city where they want to sent their kid to the college as a foreign student or go to the downtown to watch homeless people shit from the window of the Yuppie Wine & Mani-Pedi Bar.

Houses that were a third to almost half off today's asking price just 5 years ago when rates were 3.5%

"But my all cash investors."

Those investors borrowed the cash at low rates from banks. In the rare instance they have unborrowed cash, they're waiting and seeing for interest rates to take their inevitable toll, along with the unavoidable (Death & Infirmity) aging out of the richest large age cohort.

"I'm 72 and I'm going to wait out the market and then finally move to my beach house full time!" LOL

Booger says

yep, it went up real fast from late 2020 to mid 2022...then crashed in a shorter time period (late 2022 to mid 2023) ...

that is how it usually is with assets like stocks going up over a longer period and crashing over a very short period... housing obviously is different as far as ease of creating a sale ...

when i say crash for housing I mean volume and liquidity... there was a mad rush to buy when the 30 yr mortgage rate dropped to 3% ... it was like a stampede effect as far as buyers rushing in a store to clear the shelves out ...

from what I've seen of charts and data, I think peak housing price was set around 4% locked-in rate for the 30 year mortgage

if rates go down to 5.5% for 30 year mortgage next year, you may see incentives like home builders offering 4 discount points payment and then an increase in real estate transactions ... and they may require 10% down for this ... that would equate to a 4.5% rate for the 30 year mortgage...

....

A long time client (very successful Husband/wife Realtor team) called and told me just yesterday...1. She is expecting lots of foreclosures...2. Lots of short sales and 3. her lender of 20 years told her he has ZERO loans he is working on and he has ZERO in his pipeline. I'm not making a prediction, just sharing what I was told. This is in the DMV.

GNL says

This is in the DMV.

By DMV he means the greater Washington DC area.

HeadSet says

By DMV he means the greater Washington DC area.

The V is also known as the People's Republic of Northern Virginia

.

(D)istrict of Columbia, (M)aryland and (V)irginia...where they all converge and the surrounding areas. Otherwise known as Mordor(?). The Imperial City?

GNL says

A long time client (very successful Husband/wife Realtor team) called and told me just yesterday...1. She is expecting lots of foreclosures...2. Lots of short sales and 3. her lender of 20 years told her he has ZERO loans he is working on and he has ZERO in his pipeline. I'm not making a prediction, just sharing what I was told. This is in the DMV.

I call BS. The DC MSA area is isolated from the real economy, unless this couple is 50 miles away from the DC area. Last recession, DC housing didn't feel a thing. This recession, government has only grown bigger.

1337irr says

GNL says

A long time client (very successful Husband/wife Realtor team) called and told me just yesterday...1. She is expecting lots of foreclosures...2. Lots of short sales and 3. her lender of 20 years told her he has ZERO loans he is working on and he has ZERO in his pipeline. I'm not making a prediction, just sharing what I was told. This is in the DMV.

I call BS. The DC MSA area is isolated from the real economy, unless this couple is 50 miles away from the DC area. Last recession, DC housing didn't feel a thing. This recession, government has only grown bigger.

Maybe she was just frustrated. I don't know.

1337irr says

Last recession, DC housing didn't feel a thing.

Not true. I know several people who lost jobs and houses during that time in this area. Prices did go down and there are several areas that took 10 years for prices to get back to where a seller could sell without losing $$. NO, it did not suffer like most of the rest of the country but, YES it did suffer some.

GNL says

1337irr says

Last recession, DC housing didn't feel a thing.

Not true. I know several people who lost jobs and houses during that time in this area. Prices did go down and there are several areas that took 10 years for prices to get back to where a seller could sell without losing $$. NO, it did not suffer like most of the rest of the country but, YES it did suffer some.

You are right...https://fred.stlouisfed.org/series/ATNHPIUS47894Q
Flame war averted...my apology GNL.

1337irr says

Flame war averted...my apology GNL.

I must have a bad reputation. I'll work to rectify that.

GNL says

1337irr says

Flame war averted...my apology GNL.

I must have a bad reputation. I'll work to rectify that.

Nah, it was all me. I apologize. Takes two to start a flame war. You are good GNL.

1337irr says

I call BS. The DC MSA area is isolated from the real economy, unless this couple is 50 miles away from the DC area. Last recession, DC housing didn't feel a thing. This recession, government has only grown bigger.

you are correct, the direct wages (civil servant or contractor) are mostly from federal government spending within 50 miles radius of downtown Washington DC

there are a few pockets of major employers within that radius such as Capitol One and Microstrategy , and at one time AOL that were the exception

.

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

Shitty economics, pretty good politics.

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

HeadSet says

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

It encourages debt and discourages saving.

GNL says

It encourages debt and discourages saving.

looks like more people are putting down more money and generating more equity

https://finance.yahoo.com/news/homebuyers-are-putting-more-money-down-than-ever-before-despite-difficult-housing-conditions-114905401.html

.

Mortgage rates spike to new 23 yr high at 7.92% today

https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed

ad says

looks like more people are putting down more money and generating more equity

Putting money down does not "generate equity." One just moved "equity" from the bank account to the house.

HeadSet says

ad says

looks like more people are putting down more money and generating more equity

Putting money down does not "generate equity." One just moved "equity" from the bank account to the house.

Equity is the paid off portion of the home, or asset price (or market value) minus liability (balance on mortgage + closing costs + etc.)

But yes, you could still have negative equity after putting a downpayment when not only accounting for costs like sellers transaction or closing costs but also a drop in the home's value due to a depressed market.

...

GNL says

HeadSet says

GasTheYoungTurks says

Bobby Kennedy announced a plan for 3% mortgages for all Americans.

That is a gift to realtors. All low interest rates do is run up the price of cars and real estate.

It encourages debt and discourages saving.

Yes, it pulls forward spending that would have otherwise had to be saved for. As a consequence of taking purchase loans, the interest paid destroys capital that could have been spent on other desired objects/services. This has to be calculated against the expected dollar value loss or cost increase of the item that one is saving for over the duration that it will take to save for it. (Traditionally in dollar value loss environment.)

ForcedTQ says

This has to be calculated against the expected dollar value loss or cost increase of the item that one is saving for over the duration that it will take to save for it. (Traditionally in dollar value loss environment.)

yep, need to account for many factors like time value of money and opportunity cost

.

https://www.kxan.com/news/austin-round-rock-metro-area-housing-has-most-inventory-on-hand-in-more-than-8-years-abor-says/

Austin housing inventory reaches 8-year high, ABoR says

Very tight inventory here in the DMV.

We hit 8%!!!

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

.

When mesquite-filled pasture with no house in counties between Houston, Austin, and San Antonio will not be going for 20-50K per acre, then I will believe that bubble has popped.

ad says

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

Who's fault is that? Debt forever huh and savers punished? Sounds like stupidity.

30 yr treasuries at 5.25%, 10 yr at 4.95%

But that is impossible! :)

GasTheYoungTurks says

30 yr treasuries at 5.25%, 10 yr at 4.95%

But that is impossible! :)

What are the buyer options if you buy 10 year but you need money before 10 years?

gabbar says

What are the buyer options if you buy 10 year but you need money before 10 years?

Local credit unions are offering 12–18 month certificates at 5%.

Tight inventory from homeloan sellers refusing to budge unless they get Maximum Price.

Light interest from homeloan buyers, refusing to budget until mortgage payments don't seem like a headful of Lice.

Those who have and are renting, can hold out a lot longer than those who want/need to downsize, relocate, or divorce.

Realtors and Homeloaners can shreik until they're hoarse, but why pay $320 for what 4 years ago was $220k, of course!

https://www.redfin.com/county/441/FL/Brevard-County/housing-market

Nobody is going to pay $320k at 8% for a 3/2 boring box on an Eigth that went for $220 @ 3.5% four years ago

gabbar says

you need money before 10 years?

You sell them.

AmericanKulak says

Light interest from homeloan buyers

Heavy interest (8%) has created light interest.

GNL says

ad says

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

Who's fault is that? Debt forever huh and savers punished? Sounds like stupidity.

residential real estate prices need to drop to mid 2021 levels over the next couple of years while income increases by at least 3% annually

.

ad says

GNL says

ad says

ood zzyzzx says

We hit 8%!!!

Why ? I mean banks are virtually at zero customers with the 30 year mortgage rate above 7.5%

Unless they still are making money regardless of this such as from variable rate HELOCs, revenue from credit card interest payments, etc

Obviously National Association of Realtors and all the industry partners from appraisers to home inspectors to mortgage brokers are essentially out of work now.

Who's fault is that? Debt forever huh and savers punished? Sounds like stupidity.

residential real estate prices need to drop to mid 2021 levels over the next couple of years while income increases by at least 3% annually

.

Still bullish on 5 - 5.5 % by next summer?

GasTheYoungTurks says

30 yr treasuries at 5.25%, 10 yr at 4.95%

at least the yield curve is starting to undo its inversion .... Schwab offers 1 month CD's thru various US banks at least at a 5% rate

https://www.ustreasuryyieldcurve.com/

.

GNL says

Still bullish on 5 - 5.5 % by next summer?

mortgage rates are based on many factors such as inflation

so by then I think the conditions will exist for a lot lower 30 year mortgage rate

,

ad says

GNL says

Still bullish on 5 - 5.5 % by next summer?

mortgage rates are based on many factors such as inflation

so by then I think the conditions will exist for a lot lower 30 year mortgage rate

,

Or maybe we’ll get lucky and there will be a reversion to a cash or Fuck You mean…. Higher borrowing costs than recent history are making people rethink their decisions.

ForcedTQ says

eversion to a cash or Fuck You mean

as far as "return or regression to the mean", maybe certain housing stats like price to income ratio will steadily adjust

go back to when housing started to recover from the last major housing crash... housing should go up about 4 to 5% a year since then as far as showing a trend line ... Robert Shiller said historically housing has appreciated about 4% annually

.