patrick.net

WookieMan says

"Because no one is selling and no one is buying."

That goes against historical trends where higher interest rates meant lower housing prices.

Question: How come today's sellers are not lowering housing prices? Who are these
people?

Answer: Today's sellers are mostly Globalists with an endless supply of money and they
are in effect maintaining the housing bubble...

My take is that the endless supply of money is coming to an end and the price of housing
is going to collapse. Frankly, a person making $50,000 a year cannot afford a
$500,000 house.

MolotovCocktail says

GNL says

Doesn't seem correct.

True or false: Is it now 7.5%?

It moved that much in a little over a week? I don't follow rates but, that seems like a lot in such a short time, no?

The_Deplorable says

Frankly, a person making $50,000 a year cannot afford a
$500,000 house.

In my opinion, a dual 100K income shouldn't even be paying that much unless they are putting a significant downpayment.

The_Deplorable says

That goes against historical trends where higher interest rates meant lower housing prices.

Boomer sold when the rates were low. Anyone else is staying put at a low rate. Without inventory prices stay high as builders are going at a snails pace. This is not at all difficult to comprehend.

GNL says

In my opinion, a dual 100K income shouldn't even be paying that much unless they are putting a significant downpayment.

I agree with this. Until there's an income increase this will go sideways for 5-10 years in most markets. We'll see if Trump can do it. I still don't see a crash though. Rates would have to hit 10% plus and incomes and employment drops significantly. Not happening.

GNL says

The_Deplorable says

Frankly, a person making $50,000 a year cannot afford a
$500,000 house.

In my opinion, a dual 100K income shouldn't even be paying that much unless they are putting a significant downpayment.

many dual income 100 can’t. take cost of living, cost of having kids (assume they aren’t childless), they’ll be scraping by. that’s a 4k housing cost with insurance and taxes. maybe a 300k house is within such couple range, nice starter home.

WookieMan says

Because no one is selling and no one is buying. It's not because of interest rates. It's income.

Get that. But 7.5% rates isn't going to make a difference when ppl qualify on the margin? Ot can make all the difference.

MolotovCocktail says

WookieMan says
Because no one is selling and no one is buying. It's not because of interest rates. It's income.

Get that. But 7.5% rates isn't going to make a difference when ppl qualify on the margin? Ot can make all the difference.

Do the math on a 2.5% increase or decline on a nice round number $100k. Don't go out to eat once a month with the family if is goes up. You're talking $150/mo going from 5 to 7.5%.

I get houses don't cost $100k but wanted to keep the math simple. If you can't afford that on a $300-400k house, which is technically high across the country price wise, you're not buying. If you're not buying, no one is selling with rates locked in at 4%.

No point in buying and no point in selling. That's where we are and have been.

There was some stupid survey, maybe by NAR, about buyers waiting "Until 30-year rates go down in the next few months back to 5%"

Stupid from every angle.

Fortwaye says

GNL says

The_Deplorable says

Frankly, a person making $50,000 a year cannot afford a
$500,000 house.

In my opinion, a dual 100K income shouldn't even be paying that much unless they are putting a significant downpayment.

many dual income 100 can’t. take cost of living, cost of having kids (assume they aren’t childless), they’ll be scraping by. that’s a 4k housing cost with insurance and taxes. maybe a 300k house is within such couple range, nice starter home.

To truly “afford” a 500k house with a 30yr at 6.48, 20% down, you’d need to be taking home $12,824/month. That’s 25% of take home for PITI, otherwise you’re house poor and will wind up being unable to afford other things in life, not be able to have adequate emergency fund, difficult to fund adequate retirement, etc. Bump it to 30-35% at this high of income, probably be ok, but the 25% number is there to keep people from getting in trouble and making mistakes, a guideline. Yes, a Ramsey number, that should really be applied to a 15yr loan max, so you actually need an even higher income or bigger down to afford the $500k.

ForcedTQ says

To truly “afford” a 500k house with a 30yr at 6.48, 20% down, you’d need to be taking home $12,824/month. That’s 25% of take home for PITI, otherwise you’re house poor and will wind up being unable to afford other things in life, not be able to have adequate emergency fund, difficult to fund adequate retirement, etc. Bump it to 30-35% at this high of income, probably be ok, but the 25% number is there to keep people from getting in trouble and making mistakes, a guideline. Yes, a Ramsey number, that should really be applied to a 15yr loan max, so you actually need an even higher income or bigger down to afford the $500k.

If you don't have kids that's easily achievable. Doing it with 3 kids on a $700k build currently. As I've said in other comments, income. If no one is going to buy your house and you're locked in at 4% and buyers can't afford the price, there will be no inventory. You just stay put as no one can buy it.

The Boomers are done. Their sales already happened or they're staying and handing it down to the kids. If the kids decide to sell that's one thing, but someone will likely end up living there in the family.

The_Deplorable says

Question: How come today's sellers are not lowering housing prices? Who are these
people?

Sellers are infamous for seeing their house as the Taj Mahal, and recent gainz have conditioned them to feel entitled to the appreciation price increases over the past few years.

"They don't have to sell" is misleading. Many people want or HAVE to move back from remote work, have seen the cost of homeownership skyrocket so that with a low rate and a then-cheaper house, the 30% rises in prop tax and insurance have pummeled them on a house many could barely get into in the first place. They look and see how cheap it is to rent now ($1700 and dropping monthly from well over $2300 at peak COVID)

Retail sellers are always the last to know and usually hold the bag. Although in this case it's hard to feel sorry for them.

Home Builders have been biting the bullet early this time around and in many areas from TN to TX to FL, builders are underbidding their own previous phases to the great shock of recent buyers in them. Add to that Builders offer incentives and freebies that homeloaners can't.

Smartass Sam of Seacaucus who brought in Orlando 5 years ago thinks he's slick, but he can't match DR Horton's 5% incentives and the free Whirlpool appliance and tile upgrades.

In Palm Bay it's getting to the point where 90s era homeloaners are almost neck-and-neck with new builds with as much or more sq ft and far more modern conveniences. Why NOT pay 5% more to get a new build with warranty, 18-24 month 5% rate incentives, major upgrades over a 30-year old house at the full rate and the rose & green paint scheme and the 45 degree corner kitchen?

$180k Florida Homes were normal 6 years ago, and there's simply too many people who remember and are refusing to pay $280k for the same or worse old house. Certainly not in the current economic climate.

As always, homeloan sellers will cut their prices long after the investors and builders, and then have to compensate with big cuts.

Tampa, Naples, St. Pete are getting absolutely nuked, it's spreading to Orlando, Jax is often the least wild of all Florida regions, but Miami is showing signs of real decline now in prices.

Just FYI, Zillow and I believe Redfin have altered their 2025 forecasts downwards several times since just the end of last year.

WookieMan says

The Boomers are done. Their sales already happened or they're staying and handing it down to the kids. If the kids decide to sell that's one thing, but someone will likely end up living there in the family.

"I can't understand why somebody doesn't want to live in the Villages surrounded by grouchy old people who vote down all the school money and doesn't want to commute an hour to Orlando in heavy traffic!" - Boomer or their Millie children homesellers in 2030

AmericanKulak says

WookieMan says

The Boomers are done. Their sales already happened or they're staying and handing it down to the kids. If the kids decide to sell that's one thing, but someone will likely end up living there in the family.

"I can't understand why somebody doesn't want to live in the Villages surrounded by grouchy old people who vote down all the school money and doesn't want to commute an hour to Orlando in heavy traffic!" - Boomer or their Millie children homesellers in 2030

so you think The Villages will be a ghost town ? or not as worse but there will be a depreciation of home value there ?

that is why I like Panama City and Bay County area diversifying its economy among tourism (ecotourism of Beach, the two major military bases, Eastern Shipyard, Berg Pipe, Trane HVAC manufacturing plant, etc), the boat outboard engine manufacturing plant and testing site, etc

and they are trying to establish small scale of senior living homes by leveraging heavily on technology like Amazon Alexa and Visiting Angels

https://developer.amazon.com/en-US/alexa/seniorliving

and they are bringing in industrial manufacturers to the industrial area next to the airport

the biggest advantage is that Panama City is within about a 16 hour drive of Chicago , and about 5 hours within Atlanta

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https://www.zillow.com/homedetails/1841-Annabellas-Dr-Panama-City-Beach-FL-32407/87634148_zpid/

All the upgrades and renewals boosted unit 1841's value by about $40,000 ; so an unmodeled AND "original" MEP systems like HVAC, unit 1841 would sell for around $235,000

what is ironic is that it sold for around $272,000 this month which is the same maximum price it sold during the 2003 to 2006 housing bubble

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D.R. Horton’s first-quarter earnings fell short of estimates on Thursday with the company cutting its full-year forecasts.

Executives said sales in the start of the spring season have been slower than expected.

A number of homebuilders are set to report their own results in the next two weeks.

D.R. Horton (DHI) on Thursday became the latest homebuilder to raise concerns about the housing market as it fell short of estimates.

The company cut its full-year forecasts for both revenue and homes closed as its first-quarter results missed expectations, saying that the spring selling season has "started slower than expected" amid concerns over affordability and worsening consumer confidence. (The shares rose yesterday, likely aided by an expanded buyback plan and encouraging margins.)

That could increase the focus on the next round of results due from the industry. PulteGroup (PHM), Taylor Morrison Home (TMHC), Meritage Homes (MTH), Tri Pointe Homes (TPH), Century Communities (CCS), and M/I Homes (MHO) each report next week, with NVR (NVR), LGI Homes (LGIH), and Green Brick Partners (GRBK) are due the week after.

D.R. Horton's report echoed others that have already arrived. KB Home (KBH), Lennar (LEN) and Toll Brothers (TOL) have all said they have seen a slow housing market in the first quarter. D.R. Horton COO Michael Murray said in Thursday's earnings call that affordability remains a "pressure point" for homebuyers, per an AlphaSense transcript.
https://finance.yahoo.com/news/d-r-horton-lamented-slow-174324907.html

Again, the spread between new and old in FL is very small. If new can't sell with incentives so builders were forced to cut more... that is not a good sign.

AD says

so you think The Villages will be a ghost town ? or not as worse but there will be a depreciation of home value there ?

Not quite a ghost town, depending IF Orlando diversifies it's economy, finally.

AmericanKulak says

AD says

so you think The Villages will be a ghost town ? or not as worse but there will be a depreciation of home value there ?

Not quite a ghost town, depending IF Orlando diversifies it's economy, finally.

Good point as its about 58 miles from the center of The Villages to downtown Orlando.

There could be job centers like tech and manufacturing on the northwest side of Orlando and its outer suburbs like Clermont so the drive would only be about 42 miles.

Reminds me of Linden and Front Royal Virginia which have become bedroom communities for those that work 30 miles away in the outer suburbs of Washington DC like Haymarket and Manassas.

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interesting article about Florida and residential property insurance costs

https://www.dailymail.co.uk/real-estate/article-14619803/americans-no-longer-moving-southern-boomtown-hurting-housing-market.html

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AD says

There could be job centers like tech and manufacturing on the northwest side of Orlando and its outer suburbs like Clermont so the drive would only be about 42 miles.

Orlando has a looooong way to go until it is anything like SFBA, Boston, etc. Apopka is famous for... nurseries. It is still mostly wiping elderly ass, hotel housekeeping, and taking tickets for the Mouse.

Florida's main problem - UNLIKE Texas - is the lack of diversified industry. Florida is ass wiping, early bird special server, and shuttle bus driver. Most of the cruise ships get their maintenance in third world ports. A few get into a growing city selling insurance or real estate or mortgage origination; Florida is also very growth dependent. It's great for NJ and MN city workers or teachers with $70k/year in retirement.

This was fine when the min wage was $7+/hr and one could rent a non-ghetto 2 bedroom for $700/month and the Diner or Shoney's (defunct?) was $3.99 for a Burger or Bacon, Eggs, Toast

I sometimes wonder if Residential Real Estate Developers fight against Industry coming to FL.

Consider the source, but yeah, the $13/hr at McDs is mandatory state minimum, which states with far lower living costs implemented years ago. Ending credentialism from UNarmed Security Guard, Nurses Aid, etc. - jobs that traditionally didn't require weeks of coursework and exams - would be more helpful - but of course that's not wanted by politicians who take money to require these programs at employee expense (also not Traditional Americanism, those were borne by the employer historically for non-pro, non-skilled trade employees) to reduce insurance costs for businesses.
https://www.wusf.org/politics-issues/2025-03-26/florida-lawmakers-want-lower-minimum-wage-some-workers

Florida's nursing shortage might be because it's dead last in pay for Nurses, lower than Arkansas, Louisiana, and even West Virginia. But it sure ain't priced like Arkansas and West Virginia.
https://www.ziprecruiter.com/Salaries/What-Is-the-Average-RN-Salary-by-State

AmericanKulak says

This was fine when the min wage was $7+/hr and one could rent a non-ghetto 2 bedroom for $700/month and the Diner or Shoney's (defunct?) was $3.99 for a Burger or Bacon, Eggs, Toast

Good point on the standard of living (and cost of living) in Florida. I like to track the average starting wage for McDonalds (around $15 an hour in Panama City, Florida) to the price of a Big Mac meal, the rent cost for a 1 and 2 bedroom apartments, etc

I remember paying $300 a month for a 1 bedroom garage apartment in 1993 in Panama City Beach when the average starting wage was around $5 an hour for fast food and a redfish meal (with drink) at Rude Roys seafood was $7.

So Florida is more expensive then West Virginia especially in regards to housing but pays less. So who is getting rich or wealthy from that imbalance ? The residential contractors ? where is the money going ?
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AmericanKulak says

Not quite a ghost town, depending IF Orlando diversifies it's economy, finally.

Villages is what? 55 an older? Diversifying the economy won't change that.

MolotovCocktail says

AmericanKulak says

Not quite a ghost town, depending IF Orlando diversifies it's economy, finally.

Villages is what? 55 an older? Diversifying the economy won't change that.

True, as the +55 year old owner likely is retired and not looking for a white colored tech job or light-manufacturing job in the outer suburbs of Tampa or Orlando (within 35 minutes drive) such as Ridge Manor (off of Interstate 75 and near Tampa area).

Unless others living in these The Villages homes like spouses (age 40 to 55) are looking to work in those types of jobs.

But it may prop up The Villages real estate as it elevates real estate just south of The Villages which is home to these workers in the white colored jobs and light manufacturing sector.

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AD says

Front Royal Virginia which have become bedroom communities for those that work 30 miles away in the outer suburbs of Washington DC like Haymarket and Manassas.

Front Royal as a bedroom community for Manassas? Must be because of I-66.

HeadSet says

AD says

Front Royal Virginia which have become bedroom communities for those that work 30 miles away in the outer suburbs of Washington DC like Haymarket and Manassas.

Front Royal as a bedroom community for Manassas? Must be because of I-66.

Yes, Interstate 66 as I knew quite a few from Linden and Front Royal that commuted to Lockheed Martin's and BAE's (formerly IBM) manufacturing plants in Manassas
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MolotovCocktail says

Villages is what? 55 an older? Diversifying the economy won't change that.

I am thinking 10-20 years down the line when the current inhabitants pass on or enter nursing homes/assisted living.

There is NO similar number of retirees headed their way; GenX is much reduced in size to Boomers, and poorer

AD says

So Florida is more expensive then West Virginia especially in regards to housing but pays less. So who is getting rich or wealthy from that imbalance ? The residential contractors ? where is the money going ?

Florida RNs (not CNAs, not LPNs) make less than even West Virginia and Arkansas, 50th, lowest in the Union. Level 1-2 tech support in health care pays only $17-20/hr in Florida, far less than the national averages. Florida used to host Disney Tech Support until it was famously outsourced like Lou Dobbs covered over a decade ago. Construction I don't even need to mention.
https://www.ziprecruiter.com/Salaries/What-Is-the-Average-RN-Salary-by-State

But the cost of living in those other bottom wage states is much cheaper than Florida. For $250k outside Wheeling or Fayetteville you're getting a helluva property that includes acreage and almost certainly no work needed to find a house outside an HOA.

Florida's emmigration has collapsed from over 200k/year to 60k, and several cities like Tampa posted their first loss of population in history.

AD says

track the average starting wage for McDonalds (around $15 an hour in Panama City, Florida) to the price of a Big Mac meal

I prefer ground beef and gas. Or buying a 10-year old jalopy (Grandma's grocery-church car or Bob's former commuter car that his wife drove for a while, too) with 80k miles.... or splitting a 2 bed! Looking at the basic costs, not optional things. Mass Transit is for Europeans and major coastal metropolis dwellers, not real Americans.

I'd rather make $4.25/hr and get 5lb of ground beef or 5 gallons of gas and pay ~$400/month rent and $2000 for Grandma's Gunboat or Randy the Redneck's beat up truck than make $15 in 2025! That equivalent 12-year old Honda Civic with 110k miles is more like $12,000 today, not making that after a summer's worth of work! That was already given to a female college student to drive for years on top of it all with no oil changes unless dad noticed.

AmericanKulak says

I'd rather make

Have to do a like comparison based on quality of life and standard of living.

Such as $4.25 an hour and $400 rent versus $15 an hour and $1200 rent as well as what is offered for the rent like internet, water/sewer, etc, and the location (to job centers and how safe it is), etc

Problem is from my experience in FL is retirees are totally cheap skates. Hard to make a living if you're Gen X or younger. Outside of while collar jobs you're a pool boy, landscaper, maid, restaurant worker or hotel worker. Those are all generally crap jobs unless you own the business or property.

Almost all the jobs I list are low pay or rely on tips. Retirees are the worst tippers. Also when I can,I see low tips from southerns. I just think it's a southern thing. Also tourism in FL is generally cheap people from the South and some northern states. Might be their first vacation in 5 years and don't realize the overall cost of a trip.

Basically a rough go of it if you're not a lawyer, doctor, accountant, etc. type. Construction work you might do well.

WookieMan says

Construction work you might do well.

Tee hee, find out how much masons, carpenters, etc. make in FL vs. IL

AmericanKulak says

WookieMan says

Construction work you might do well.

Tee hee, find out how much masons, carpenters, etc. make in FL vs. IL

I said might. I don't know the wages down there. I know my guys are doing pretty well on our house, but it's custom. So stuff just costs more including labor.

WookieMan says

I don't know the wages down there.

Carpenters and Masons basically make in the high teens and low 20s. HVAC low $20s. The elite skilled perhaps mid-high $20s.

Basically the most elite tradesmen in Florida make what entry-level does in most other states, esp. ones with comparable home prices.

If you think I'm exaggerating:
The average entry/mid-level salary for an HVAC technician is around $22 per hour. This equals $45,760 per year.
The average salary for a senior HVAC technician is $27.65 per hour. This equals $57,512 per year.‍
https://faradaycareers.com/careers/hvac-salary-florida

AD says

But it may prop up The Villages real estate as it elevates real estate just south of The Villages which is home to these workers in the white colored jobs and light manufacturing sector.

Sure. But I would demand that the realtor omit the Villages from whatever CMA resort they generate.

MolotovCocktail says

AD says

But it may prop up The Villages real estate as it elevates real estate just south of The Villages which is home to these workers in the white colored jobs and light manufacturing sector.

Sure. But I would demand that the realtor omit the Villages from whatever CMA resort they generate.

The Villages may undergo reforms to increase demand for its housing and adapt to the demographic changes such as its no longer a +55 year old community.

It's within about 15 minutes of Ocala and 60 minutes to Gainesville (assume avg speed is 60 mph on Interstate 75) and 60 minutes to Walt Disney World.

Ocala is a growing jobs center: https://www.wcjb.com/2025/04/16/continuous-growth-ocala-causing-businesses-expand/

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The average wage in Florida is a whopping $24/hr (actually a little less but rounding up here).
https://www.ziprecruiter.com/Salaries/--in-Florida

These are what Florida jobs pay Florida employees, not what Harrisburg, PA School District or Lockheed Martin retiree gets in pension.

My guess that the $55k income was inflated by pensions was correct.

At 33% of income devoted to housing, it means a 2 bed should be about $1270/month for rent OR equivalent PITI payment.

At $1700/month, Florida average 2 bedroom rent would suck out 45% of a median wage earners salary. And I didn't take anything off for Soc Sec or Tax withholds or Health Care contributions, etc. I generously considered the entire gross pay. If I didn't, it would probably be 50%.

But, the $1700 has dropped and will continue to do so.

Florida goes up one point to the 49th least affordable state (Cost of Living vs. Average wages) in the Union:

“Grocery prices, rent, you know, all that is getting higher, and they’re not paying any more,” said Kwame Ratliff, who lives in West Palm Beach. “I am looking to move, because it is a little expensive here.”

According to personal finance website WalletHub, Florida ranked Florida number 49, nearly dead last as the least affordable state.

“What should we do to kind of get that ranking up?” asked WFLX reporter Joel Lopez.

“Well for starters, maybe make the state a little more affordable,” said Chip Lupo, a writer and analyst with WalletHub.

Lupo said that affordability is factored in housing costs, income, debt and more.

...

Affordability, while low, is one spot higher at 49 than last year when Florida ranked as the worst, landing the number 50 spot.

https://www.wflx.com/2025/01/14/this-is-where-florida-ranks-affordability/

Nothing that pounding down rents and asset prices can't fix.