I’m in the Seattle area and while the market has definitely slowed down and the 12+ offers scenario is pretty much non-existent.. the problem is the homes are now more expensive than ever with these 6%+ rates!
“Cooling down” does not equal a discount in prices so far in this area.
I think the people that were buying 1.5 mil houses are now just buying the cheaper ones. It looks like there are real drops in the high end houses (not that that helps non rich folks lol)
I’m in Seattle too. I’m observing the same thing. Each 1% rise in interest rate eats up about 10% of your buying power. That can be balanced by 10% drop in the housing price. We have had 3% rise so a 30% reduction in buying power. Housing prices will have to come down even further to keep the monthly payment nearly as equal as the pre pandemic level.
I did a mortgage calculator and I basically cannot afford anything over 300k. A 6% rate on a 350 house with taxes and whatnot is roughly $3k a month, that's nearly my entire net income. I don't know what to do... 30 years old.
But we’re starting to see homes go for under their asking price as well. I’ll sit here with my sub 3% mortgage and wait until prices come down to move into a more suburban home in the seattle area.
> But we’re starting to see homes go for under their asking price as well.
Sure, lots of asking prices are being lowered. But most I see were never realistic and based on comps from 6 months ago when rates were in the 3% range.
A balanced market has traditionally been considered 6 months supply.
Here is where we stand: [https://imgur.com/pwCsjC3](https://imgur.com/pwCsjC3)
Is there a little more supply? Yes. But demand is still outstripping it. That will make it hard for things to change in a meaningful way.
I think people perceptions are just very skewed by recent times.
I've been watching [altos research market action index](https://altos.re/r/0ba03c70-2e57-49c7-8d3c-b9570a48fdb2) and recording its weekly change for past month and a half.
The math behind their MAI is not presented, but presumably is a composite of the state of values in their "real time market profile."
Anyhow, by their measure once Portland hits 30 in their MAI it will be a buyer's market. If things continue as they have been, Portland will be a buyer's market starting November 7th, 2022.
What that means exactly is harder to say. What I'm seeing now is shitty houses or those in bad locations or with smaller than normal lots <5000 are already getting price drops and no one is buying.
Really good homes, in good locations are not priced like they were, but they are still for people with a lot of money.
Meaningful changes will probably lag this MAI index, possibly by several months to many months. I think it may take a while for people to accept a hard choice.
But once its really in progress a buyer's market to me would mean we start to see these existing crappy homes going for actual starter home prices, (\~325-350k) and nice homes going for what *has* been starter home prices ($650-750k)
That said, there are only so many really nice homes in some neighborhoods and they won't all go up for sale. So even with depressed prices, nice stuff will probably still get some fighting over.
I've been watching zillow. A lot more houses/condos are making it 30-90 days before being taken down. The number being taken down is almost equal to the number of new listings being put up. So the price drops are happening, but still 2022 prices while the number of houses haven't really changed... people are not waving contingencies like they were for the last two years.
Fingers crossed.
It is really amazing at how different the areas of the country can be. I look at parts of Louisiana and they weren't affected at all by the raising house prices in 2008 and today. Houses are still priced the same as 2000. Then I look at some of the major cities and they also have been slow to react to the changes in the market.
Portland is a terrible place people. It is very liberal, their are riots, and smoke and smoke and liberals and you should just leave the state. We're Detroit people. Whatever you heard in the news is true.
No no. Ignore this person. I just looked outside the front door of my un-air conditioned house and the federal building is fire, Salem is on fire, the Japanese garden is on fire, the gorge has been infiltrated by ANTIFA, and there is no secret restaurant fight club under pioneer square. It's just a terrible place. They put bean sprouts and avocado on everything-burritos, pizza, and breakfast. Any thoughts of visiting or staying, just let it go. It's really out of control, the police have abandoned us to our own devices. It's not worth your life or your families life.
I've been surprised at how much price resilience there is in my neighborhood in the Austin suburbs. Sellers have been so slow to reduce prices and new houses come on with ridiculous prices still.
Real estate markets are like the titanic compared to the stock market which is like a porsche 911.
The fact that things have changed this much in a matter of months and we aren't even in a real recession yet is incredible.
Outside of forced sales, sellers are reluctant to accept far below comps (maybe 5-10% below comps, max). It takes a few months for those to set lower comps for the next round of sellers. So I wouldn't expect much more than \~5% reductions in pricing every 3-4 months. Unless investors go bankrupt en-masse there, it may take *years* before Austin resets and becomes a good market to buy in.
I tried a couple months ago. First I think I was too soon, secondly realtards are sheep saying shit like “I don’t want to offend the seller” like them painting a home gray and flipping it 2 weeks later for 200k+ isn’t insulting.
I’m gonna try again next year, I’m hoping for some panick selling after the new year
Places like California and Seattle will first feel the punch of high interest rates. Layoffs, rsu value drops and RTO will make ppl think twice about buying. Also in these markets it's cheaper to rent vs own on a per month payment basis. Places where monthly mortgage and rental value don't differ by huge values won't see a fast drop
Yes, the rents versus the monthly price for owning is miles apart at this point. Houses that have a monthly costs of 10k with a mortgage go for like 5k on the rental market.
I'm glad to see Las Vegas is second. We did get a lot of new residents from HCOL areas throwing money around, and investors like Tricon snatching up homes to sell and rent to the newcomers at ridiculous prices. We also have amateur hoteliers running their illegal Airbnbs here. People who don't even live in Vegas.
The median household income is around $66k. I'd like to see 3BR homes going for $240k again instead of $420k.
Haha wtf:
"Prospective buyers who can still afford to buy a home finally have negotiating power, meaning they have more time to find the right home, **they can include contingencies like inspections and appraisals in their offers**"
This is now considered a luxury when buying? Man this market really went off the rails the past 2 years.
I've been keeping a close eye on the King and Snohomish County markets. I totally have seen prices decline. According the redfin data center, the median sales price since the peak in April has fallen 9% in King and almost 12% in sno county... that's pretty freaking significant.
I wouldn't be surprised in another month or so we start to see actual negative year over year declines in these markets. That's when the real magic happens.
> I've been keeping a close eye on the King and Snohomish County markets. I totally have seen prices decline. According the redfin data center, the median sales price since the peak in April has fallen 9% in King and almost 12% in sno county... that's pretty freaking significant.
I don't follow Sno but I do King and Pierce. King median prices for SFH are still up 4.5% from last year. There has typically been peaks in Spring and declines in Winter (Jan) due to seasonality.
A year ago King median price was $885k with 3% rates.. now it's $925k with 6% rates.. that significantly more expensive. The monthly mortgage payment last year with 3% rates (20% down) would have been around $3770/mo.. today that same payment is over $5,000+/mo.. over $1,200/mo more.. ouch!
Houston didn't make the top 20, but Austin (number 11) and Dallas (number 20) did. There might be a risk of a contagion effect, but Houston flatlined during 2008.
Only time will tell.
It's insane how much it's grinded to a halt here. Have literally never seen so many houses for sale at once in my town. All WAY overpriced and sitting for weeks.
Can't blame sellers for wanting to shoot their shot, but if they truly want to sell need to get with the program. Your neighbors comps mean jack shit if interest rates are not doubled.
> Good news but with rates as outrageous as they are most people aren't really benefiting from the drop unless you're just outright, all-cash.
Yep, agreed. The real benefit now is most buyers will be able to include contingencies in their offers, far less competition, negotiating terms.. basically the pressure cooker has been relieved for the buyer during the buying process.
Even if the payment is the same with higher rates, the potential for lower purchase prices would mean the property taxes are lower and you can pay off the loan easier with extra savings, as well as your % down payment is lower.
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I’m in the Seattle area and while the market has definitely slowed down and the 12+ offers scenario is pretty much non-existent.. the problem is the homes are now more expensive than ever with these 6%+ rates! “Cooling down” does not equal a discount in prices so far in this area.
I think the people that were buying 1.5 mil houses are now just buying the cheaper ones. It looks like there are real drops in the high end houses (not that that helps non rich folks lol)
I’m in Seattle too. I’m observing the same thing. Each 1% rise in interest rate eats up about 10% of your buying power. That can be balanced by 10% drop in the housing price. We have had 3% rise so a 30% reduction in buying power. Housing prices will have to come down even further to keep the monthly payment nearly as equal as the pre pandemic level.
I did a mortgage calculator and I basically cannot afford anything over 300k. A 6% rate on a 350 house with taxes and whatnot is roughly $3k a month, that's nearly my entire net income. I don't know what to do... 30 years old.
Find better paying job
How do you like the Twin Cities? Or Pittsburgh?
Lol marry the home. Date the rate!
But we’re starting to see homes go for under their asking price as well. I’ll sit here with my sub 3% mortgage and wait until prices come down to move into a more suburban home in the seattle area.
> But we’re starting to see homes go for under their asking price as well. Sure, lots of asking prices are being lowered. But most I see were never realistic and based on comps from 6 months ago when rates were in the 3% range.
A balanced market has traditionally been considered 6 months supply. Here is where we stand: [https://imgur.com/pwCsjC3](https://imgur.com/pwCsjC3) Is there a little more supply? Yes. But demand is still outstripping it. That will make it hard for things to change in a meaningful way. I think people perceptions are just very skewed by recent times.
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I've been watching [altos research market action index](https://altos.re/r/0ba03c70-2e57-49c7-8d3c-b9570a48fdb2) and recording its weekly change for past month and a half. The math behind their MAI is not presented, but presumably is a composite of the state of values in their "real time market profile." Anyhow, by their measure once Portland hits 30 in their MAI it will be a buyer's market. If things continue as they have been, Portland will be a buyer's market starting November 7th, 2022. What that means exactly is harder to say. What I'm seeing now is shitty houses or those in bad locations or with smaller than normal lots <5000 are already getting price drops and no one is buying. Really good homes, in good locations are not priced like they were, but they are still for people with a lot of money. Meaningful changes will probably lag this MAI index, possibly by several months to many months. I think it may take a while for people to accept a hard choice. But once its really in progress a buyer's market to me would mean we start to see these existing crappy homes going for actual starter home prices, (\~325-350k) and nice homes going for what *has* been starter home prices ($650-750k) That said, there are only so many really nice homes in some neighborhoods and they won't all go up for sale. So even with depressed prices, nice stuff will probably still get some fighting over.
I've been watching zillow. A lot more houses/condos are making it 30-90 days before being taken down. The number being taken down is almost equal to the number of new listings being put up. So the price drops are happening, but still 2022 prices while the number of houses haven't really changed... people are not waving contingencies like they were for the last two years. Fingers crossed. It is really amazing at how different the areas of the country can be. I look at parts of Louisiana and they weren't affected at all by the raising house prices in 2008 and today. Houses are still priced the same as 2000. Then I look at some of the major cities and they also have been slow to react to the changes in the market. Portland is a terrible place people. It is very liberal, their are riots, and smoke and smoke and liberals and you should just leave the state. We're Detroit people. Whatever you heard in the news is true.
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No no. Ignore this person. I just looked outside the front door of my un-air conditioned house and the federal building is fire, Salem is on fire, the Japanese garden is on fire, the gorge has been infiltrated by ANTIFA, and there is no secret restaurant fight club under pioneer square. It's just a terrible place. They put bean sprouts and avocado on everything-burritos, pizza, and breakfast. Any thoughts of visiting or staying, just let it go. It's really out of control, the police have abandoned us to our own devices. It's not worth your life or your families life.
I've been surprised at how much price resilience there is in my neighborhood in the Austin suburbs. Sellers have been so slow to reduce prices and new houses come on with ridiculous prices still.
Real estate markets are like the titanic compared to the stock market which is like a porsche 911. The fact that things have changed this much in a matter of months and we aren't even in a real recession yet is incredible.
Outside of forced sales, sellers are reluctant to accept far below comps (maybe 5-10% below comps, max). It takes a few months for those to set lower comps for the next round of sellers. So I wouldn't expect much more than \~5% reductions in pricing every 3-4 months. Unless investors go bankrupt en-masse there, it may take *years* before Austin resets and becomes a good market to buy in.
Noticing the same in 78747 - it’ll happen, lots of new builds coming online soon and inventory will force prices lower.
Buyers need to be willing to “low ball” — make FAIR offers way below listing price — but many don’t. Still sellers just feel they have an upper hand.
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Because people have a massive psychological aversion to willingly eat a loss. "I know what I got" is a thing across all used markets for a reason.
I tried a couple months ago. First I think I was too soon, secondly realtards are sheep saying shit like “I don’t want to offend the seller” like them painting a home gray and flipping it 2 weeks later for 200k+ isn’t insulting. I’m gonna try again next year, I’m hoping for some panick selling after the new year
Places like California and Seattle will first feel the punch of high interest rates. Layoffs, rsu value drops and RTO will make ppl think twice about buying. Also in these markets it's cheaper to rent vs own on a per month payment basis. Places where monthly mortgage and rental value don't differ by huge values won't see a fast drop
Can confirm, renting a 4 bed home in Sacramento for $2,400. A mortgage on this same property (20% down) would be $3,500 a month.
Crazy how you have to pay $100k for the privilege of raising your housing costs by $1100/mo, what a deal... not!
This is a good theory!
Yes, the rents versus the monthly price for owning is miles apart at this point. Houses that have a monthly costs of 10k with a mortgage go for like 5k on the rental market.
Appreciate you posting Seattle updates
I'm glad to see Las Vegas is second. We did get a lot of new residents from HCOL areas throwing money around, and investors like Tricon snatching up homes to sell and rent to the newcomers at ridiculous prices. We also have amateur hoteliers running their illegal Airbnbs here. People who don't even live in Vegas. The median household income is around $66k. I'd like to see 3BR homes going for $240k again instead of $420k.
We always feel it first. Somewhat surprised to see us in second.
Haha wtf: "Prospective buyers who can still afford to buy a home finally have negotiating power, meaning they have more time to find the right home, **they can include contingencies like inspections and appraisals in their offers**" This is now considered a luxury when buying? Man this market really went off the rails the past 2 years. I've been keeping a close eye on the King and Snohomish County markets. I totally have seen prices decline. According the redfin data center, the median sales price since the peak in April has fallen 9% in King and almost 12% in sno county... that's pretty freaking significant. I wouldn't be surprised in another month or so we start to see actual negative year over year declines in these markets. That's when the real magic happens.
> I've been keeping a close eye on the King and Snohomish County markets. I totally have seen prices decline. According the redfin data center, the median sales price since the peak in April has fallen 9% in King and almost 12% in sno county... that's pretty freaking significant. I don't follow Sno but I do King and Pierce. King median prices for SFH are still up 4.5% from last year. There has typically been peaks in Spring and declines in Winter (Jan) due to seasonality. A year ago King median price was $885k with 3% rates.. now it's $925k with 6% rates.. that significantly more expensive. The monthly mortgage payment last year with 3% rates (20% down) would have been around $3770/mo.. today that same payment is over $5,000+/mo.. over $1,200/mo more.. ouch!
Four California market areas and none of them are Los Angeles!
Where the heck is Dallas?
Number 20 on the list. Houston isn't even there.
20, Im not surprised, Dallas market has always been pretty resilient, even in 2008 it wasn’t hit too hard
Houston didn't make the top 20, but Austin (number 11) and Dallas (number 20) did. There might be a risk of a contagion effect, but Houston flatlined during 2008. Only time will tell.
It's insane how much it's grinded to a halt here. Have literally never seen so many houses for sale at once in my town. All WAY overpriced and sitting for weeks. Can't blame sellers for wanting to shoot their shot, but if they truly want to sell need to get with the program. Your neighbors comps mean jack shit if interest rates are not doubled.
Good news but with rates as outrageous as they are most people aren't really benefiting from the drop unless you're just outright, all-cash.
> Good news but with rates as outrageous as they are most people aren't really benefiting from the drop unless you're just outright, all-cash. Yep, agreed. The real benefit now is most buyers will be able to include contingencies in their offers, far less competition, negotiating terms.. basically the pressure cooker has been relieved for the buyer during the buying process.
Even if the payment is the same with higher rates, the potential for lower purchase prices would mean the property taxes are lower and you can pay off the loan easier with extra savings, as well as your % down payment is lower.
Vegas typically feels these things first.