quote:

There is a difference between now and 2008. That being the inventory is still severely low.

Yes not only that but rent has skyrocketed in many areas.

Just sold a house in Seattle in 2 days on 5/20/22. It sold for $150K over asking price.

Some interesting statistics in the South Central Alaska markets I watch.

2% of active residential listings reduced their asking price yesterday.

Yesterday and today's closed sales 100% closed for less than asking price. 5-20% below. (Median being 8% below)

More new listings this week than closings last week.

These are trends I've been watching develop and increase over the last ~3 weeks.

Over 70% of the closed residential sales were recorded as cash sales.

quote:

Originally posted by old rugged cross:
[QUOTE]Originally posted by frayedends:
There is a difference between now and 2008. That being the inventory is still severely low.

That is changing daily. With homes on the market longer. That is an obvious outcome

True but we are still crazy low. For instance in the town my wife works at this time of year there is typically 100 listings. Currently there are 26. 2 months ago there were only 5.

Apart from that we don’t have a subprime bubble. I don’t see a major crash coming. A slow down for sure. But not a crash.

Yup. Frayed ends for the win.

I would try and be optimistic too if my livelihood was in real estate.

But all the indicators say otherwise.

I am not wishing for a crash. But with many aspects of the financial world looking bad. The RE market is not going to be spared.

I think it is going to depend a lot on location. Places with highly un-affordable housing (LA, San Fran, NJ, Boston, etc) are going to be hurt as unemployment rises. But other places will ride through ok. Many places have seen home values increase to be more equal with the rest of the country, so they feel expensive to locals who've been there years, but really the prices are affordable.

Additionally, my prediction is the Fed isn't going to raise rates much more. The national debt becomes exponentially more expensive as rates go up, which will pressure the Fed to stop raising rates. Thus we will not see 10%-15% mortgages.

And the hits keep on coming.

https://finance.yahoo.com/news...ncing-204300850.html

Mortgage rates: Few left who can benefit from refinancing

"The number of highly qualified homeowners who could benefit from refinancing plunged to the lowest level in more than two decades, following a rapid jump in mortgage rates last week.

Only 472,000 high-quality candidates could shave at least three-quarters of a point off their mortgage by refinancing at the average rate of 5.78% quoted last week by Freddie Mac, according to figures mortgage technology and data provider Black Knight gave Yahoo Money.

That’s down from 11 million at the beginning of 2022 and an estimated 20 million 2020. It’s also the smallest candidate pool since at least 2000 when Black Knight first began tracking the data.

“On the refi side, all of it really is rate driven,” Joel Kan, associate vice president of industry forecasting at the Mortgage Bankers Association, told Yahoo Money. “People refinance because they get a lower rate and can save on their monthly payments. With rates up, there really isn’t a whole lot left.”

quote:

Mortgage rates: Few left who can benefit from refinancing

This isn't a real surprise since rates have been at historic (and artificially manipulated) lows for a while and a lot of homes have been bought for cash recently as investments.

This still doesn't mean that some of the cash buyers may not try to get out at some point to lock in their gains if they see a long market downturn.
Also some of those "cash" buyers are investment groups that could have outside pressures if the overall markets go bad and have to cash out to cover other debts that don't show up as mortgages but are still a form of debt.

Glad to mostly be a spectator on this one.

quote:

Originally posted by old rugged cross:
I would try and be optimistic too if my livelihood was in real estate.

But all the indicators say otherwise.

I am not wishing for a crash. But with many aspects of the financial world looking bad. The RE market is not going to be spared.

I’m not concerned at all. My wife is a realtor but she is a top agent. Even a huge crash doesn’t mean everyone stops buying and selling. The first to go will be the realtors that treat it as a part time gig. Then the shitty realtors will lose market share. My wife can lose half her business and still be fine.

But I stand by my assertion that this will be a great slowdown but not a complete crash.

Just more anecdotal evidence that things may have slowed or even ground to a halt.

On my drive home from work through Montgomery County, PA which is a pretty well-off Philadelphia suburban county, I'm seeing "For Sale" signs everywhere and seeing them days and weeks later.

This time last year, you could see a "For Sale" sign go in the ground in the morning and see a "Pending" or "Sold" sign on it that afternoon or very next day.

Maybe it's still hot in Florida and Texas, I'm just stating what I'm seeing around here.

quote:

Originally posted by Flash-LB:
Was just reading the local fish wrapper.

Average time on the market for houses for sale is now 30 days in my Town, which is one of the more desirable Towns in the greater Phoenix area.

It's coming down all right.

I live in the Prescott region and a year to 2 up years ago ( based mostly on California refugees who came with big bucks from jumping the commie ship) houses here sold in hours often 50k or more above asking.
I bought a house last fall here and was happy to settle at 5k below asking.
When we were figuring out what to buy ( September 2021) the realtor pretty much said don’t wait even 24 hours to. Mull things over or the house will be gone. For the most part correct, fall 2021 most house sold in unde4 a week, now seeing thing last longer with weekly price reductions

We aren't seeing price reductions. But what we are seeing is offers closer to asking, and contingencies like home inpsection, mortgage, etc. In the long run this is better for the average consumer. To be honest, no idea who all the folks were that had tons of cash to buy with no contingencies were. I don't know people with that much money in the bank, except investors.

Concur with many posts here, it is slowing down. Five different independent realtors we’ve talked to in the last month, mostly with about twenty years of experience apiece have all said they see a slowdown coming where prices and days on market begins to normalize, not crash. What they predicted has now shown true. We’re now a week on the market with exactly one showing so far and no hint of offers. We listed a hundred grand under what Zillow and Redfin had our home at in mid-May, and we’re looking at doing probably a single reduction down another twenty five grand. After that, it’s just patience and hope.

When we bought our house in November 2015, we showed up to look at it as the guy was putting the sign in the front yard. We put an offer on it that morning, after losing out on four other houses that we tried to put offers on where the buyers had used the same strategy. That market, those days are over. Our realtor in Arizona said she’s easily shown us more houses in the last week than she’s shown anybody in two years solid, and we looked at I think 35-40 in five days. That was unheard of until about three weeks ago. It has turned rapidly from a seller’s market to a buyer’s market. Unfortunately, we need to sell before we can buy, or at least be under contract so we can try to offer a decent contingency.

There’s no real comps in the area, as we have a one story floor plan with AC and a hardwired natural gas generator and just about all those things are unheard of in our particular area, especially in combination, but our home was built in ‘87 and a fair number of things are dated and we didn’t do any updates. People are choosing newer homes with no projects involved, and honestly, I can’t blame them. Kitchen wall tiles have fruit on them, and there’s floral wallpaper in the master bedroom and bathroom that I’ve always hated and wanted to tear down and paint, but haven’t. This house needs things done, and I think that’s why people are skipping it. That’s what we’re doing in Arizona, rejecting places that have tens of thousands of dollars in updates and repairs needed.

Probably also need to consider this is a slow time of year. Summer going into July 4th isn’t a great indicator. But fall will likely be a better indication. My wife makes more money after fall market than spring, surprisingly. Then once holidays hit its dead again.

Thanks for the perspective. Yeah, the timing of this move is horrible. I’ll see what happens, but it may be that we end up trying to rent until we can get this place sold and see if the market there drops any further and maybe we can get a better deal on something.

We’re seeing multiple reductions on houses that have been on market a while, one we looked at was down fifty grand after forty five days on market. Part of it is the time of year, I’m sure. I’m just wondering how much of it may be things coming back into line with a more normal market. Either way, we’re committed for the long haul, and it’s looking like it will be exactly that.

Generally price drops happen from people that get greedy and overprice to begin with. It's a psychological thing. When the market was super hot this time last year my wife would tell people, you need to underprice by just a bit. That starts the bidding wars.

But there were always sellers that say, "But Joe across the street got 50K over asking. Let's list at what Joe got".

As soon as it's overpriced people lose interest. Not a good tactic.

We, as a whole are moving into a better time to buy vs sell. Not there yet. But prices are going to drop going forward. You can call it whatever you choose. Places are going to be harder to sell in the coming market. especially if trying to sell at the crazy prices we have seen in recent history.

I would not of wanted to overpay like many have done in the last 18 months. Even if you paid cash. As values drop or plummet you still will have taken a beating.

Having cash in hand in the next year or two will open up some great deals possibly.

Being on the hook for a place you way overpaid for is a whole nother can of worms.

My two cents worth anyways.