Not a surprise but it does address what is happening. I have no idea how some people think a mortgage of $3-5k is a good way to go. Espeically if you are currently at 20% equity or so. That is scary.

https://www.redfin.com/news/ho...25&inquirySource=365

Yeah but with inflation and potential depression-ish economy it will just all be relative.

Not to mention that when interest rates go up, the total cost to the buyer will increase as well. So it might seem like the property is selling for a lower "price," but it just means that the bank is taking more, and the seller geting less. The buyer is still on the hook for about the same amount (or more).

quote:

Originally posted by architect:
Not to mention that when interest rates go up, the total cost to the buyer will increase as well. So it might seem like the property is selling for a lower "price," but it just means that the bank is taking more, and the seller geting less. The buyer is still on the hook for about the same amount (or more).

Yep, this exactly. Prices are coming down as interest rates go up. The mortgage payments are going to stay high.

Starting to finally see some price reductions in South Florida

Location, location, location.

I am not seeing any downward movement in high-end to mid-priced stuff YET.

Inventory is so thin, at worst stuff may now take weeks to sell instead of days, but prices are still firm, and bidding wars still happen.

The lower end may weaken, but only because low- end buyers will start not to qualify at the higher rates.

Unless inventory increases, prices with not come down.

Meanwhile, listing prices are still increasing in my neighborhood.

3 houses listed this year, 1 about 2 months ago, 2 within the last couple weeks, for over $900k

That's way above the values when we moved in here. And, part of what motivated us to list & downsize.

Edit: Was posting from my phone earlier.

I'm only aware of 2 reductions, so far, in my immediate neighborhood section (there are something like 7 or 8 sections of the total neighborhood). The rest, sales prior to ours, were going for $30-70k over list.

We turned unlucky & listed the same week interest rates jumped, so it took us 3 weeks to get a deal going vs the 3-5 days the prior 6-8 sales had taken.

Also, we're about to have an influx of Exxon employees coming down from Dallas, so I expect the market here in N Houston to stay strong/seller biased for a while.

Neighbor's house went on the market Saturday - it sold in 3 days for nearly double what we paid for ours.

quote:

Originally posted by old rugged cross:
Not a surprise but it does address what is happening. I have no idea how some people think a mortgage of $3-5k is a good way to go. Espeically if you are currently at 20% equity or so. That is scary.

If I had a household income of $350k+ a year a $3-$5k mortgage is no big deal. Totally depends on income. It is shocking that the average mortgage is over $2k a month now. That's nuts.

I am shocked with the debt to income ratio some of my friends share with me. I wouldn't be able to sleep at night with how many people live.

Unless you sold your overpriced NY/NJ home and moved somewhere cheaper, I'm thinking a lot of people didn't put 20% and are paying PMI.

I'm wondering what's going to happen when people realize the house they paid $400k for is only worth $250k but their frenzied buying made them make a bad decision to overpay.

quote:

Originally posted by Edmond:
Unless you sold your overpriced NY/NJ home and moved somewhere cheaper, I'm thinking a lot of people didn't put 20% and are paying PMI.

I'm wondering what's going to happen when people realize the house they paid $400k for is only worth $250k but their frenzied buying made them make a bad decision to overpay.

I'm guessing they'll do the same thing that they did the last time this happened, and that's to default on their mortgage.

After all, it's not these poor peoples' fault that they made bad decisions, so they shouldn't have to pay for them.

Look at this example: The average Joe bought a $500k house when rates were 2.5%. He put 10% down and financed $450K for 30 years. His P&I payment was $1,778.04.

Rates today are 6.75%. Joe's payment would now be $2,918.69 for the same house.

Now if Joe could only afford the $1,778.04 (before taxes and insurance) he could only buy a $324,135.86 home if he puts down the same $50K.

So, what happens to the housing market? What happens to new construction with $10 2x6s? The answers are just around the corner.

mcrimm,

That's probably with Joe and Jane working. Either Joe or Jane gets laid off or injured and doesn't have long term disability insurance and they default. That happened in a place I lived. Lots of people buying those $500k homes stretching 2 incomes.

I just don't understand how people are buying homes now. The average person can't come close to affording a $500k home. How do they even come up with a down payment for that amount?
But somehow, someway, houses where I live are selling as fast as they're being built. Five years ago a neighborhood near me had a sign that said homes starting at 300k to 500k. Now its 500k to the 900ks. Nearly double, that's insane.

quote:

Originally posted by sigspecops:
I just don't understand how people are buying homes now. The average person can't come close to affording a $500k home. How do they even come up with a down payment for that amount?
But somehow, someway, houses where I live are selling as fast as they're being built. Five years ago a neighborhood near me had a sign that said homes starting at 300k to 500k. Now its 500k to the 900ks. Nearly double, that's insane.

Here is an interesting article that may explain some of it. I don't believe most people are aware of this growing trend.

"Investors and corporations are buying up houses and turning them into rental properties."

https://www.nytimes.com/2022/0...-housing-market.html

I think the housing market is due for a big correction, around where I live there's signs EVERYWHERE but few people snapping up properties like a year ago this time.

BREAKING: The Federal Reserve announces 0.75 % interest rate hike— the highest in 28 years

Hate to tell you but PA isn’t the growth market that you think it is. FL and TX among some other states are still selling strong. People aren’t flocking to Pennsylvania.

I will take that bet the prices won’t correct massively down here. Plateau? Yes, crater? No.

Mccrimm is absolutely right. At double the interest rate mortgages aren’t coming down anytime soon. Cash buyers will benefit, everybody else will wax rhapsodically about 3% interest rates.

IMHO Texas is waiting to see how long it takes to start running out of people who managed to sell their houses somewhere else - mostly on the Pacific Coast. In-state migration has been shunted off to apartments or outlying areas for many, many months now.

Anyone thinking they are going to borrow a few hundred thousand to buy a house better have a hellofa job and do the arithmetic.

It is going to bring the market down everywhere.

quote:

Originally posted by pedropcola:


Hate to tell you but PA isn’t the growth market that you think it is. FL and TX among some other states are still selling strong. People aren’t flocking to Pennsylvania.

Ummmm....where did I state that?

I was just making an observation about what I AM SEEING around me dude.

No need to put words in my mouth here. It's almost like you're heavily invested in RE and trying to tell yourself that it's gonna be alright, everything is fine, nothing to see here

See how that works?