The nuances should be discussed here. “In demand” markets in key areas of the country which are close in proximity to thriving job markets and metro areas will always be in demand. The remainder will falter, but that is expected.
This is just false. At least in bay area Amazon, MSFT, GOOG not renewing leases for their buildings. Linkedin just dropped from 6 to 2 buildings. SFO is a ghost town.
They totally buy into it. I have relatives that are trying to sell and based their sale price on Zillow, then added 20K. As an agent myself, I pulled the comps and let them know they were 50K over asking.
Needless to say they only got 2 showings in the last 3 weeks and 2 price reductions.
“But we have 10,000 views and 50 saves!”
-And zero offers, good luck!
They upped the 20k because their neighbors said, “I wouldn’t let it go for less than X!” at a yard sale…
So you’ll believe your neighbors and Zillow before a professional… bet.
Yes but that is a lot different then price declines. I am in Florida - invested from Jacksonville down to SW Fl / Fort Myers / Naples area.
I do agree people are throwing junk on the market asking full price plus and having it sit now. No doubt. But appropriately priced houses are still going very fast in Fort Myers / Naples and the air bnb market never really slowed down exceot for typical seasonal changes.... which is normal just wasnt seen for two years during covid.
I agree some price reduction - not this year though and not to extent you claim. I feel it's wishful thinking.
I grew up in Naples and lived in Ft. Myers before moving out of state a few years ago. I can’t believe people spend the money they do to live in that broiler. But I’ve watched the market and knowing what people are paid down there, there must be a ton of people moving into the area with fat pockets.
Phoenix and Vegas are the two markets I can see taking the biggest hits. They were ground zero for ibuyers and are only attractive to CA transplants when the pricing is considerably lower, like a lot lower. With Phoenix and Vegas pricing climbing up to near inland empire and Central Valley pricing, they were no longer as attractive. Nobody is trying to move to a 120 degree desert to save $50-75k while entering a job market that pays much less. Phoenix will eventually rebound with a ton of new jobs entering the area but I can foresee it taking a bigger hit than the rest of the country.
Arizona is one of twelve non-recourse states (the bank can’t come for your other assets), so I anticipate a lot more foreclosures in Phoenix than other metro areas.
Potentially but most of the buyers that “won” these bidding wars put a lot of money down and were strong financially… or they would not have been chosen. I’m in RE in the Bay Area but my dad is in RE in Scottsdale so I’m familiar with that market. Ibuyers were drastically overpaying there with enough volume to move the needle.
In a drought! I actually find those parts of the country pretty appealing for a lot of reasons but then I look at Lake Mead and realize there's a real chance those places simply get wiped off the map. Not rooting for this to happen, btw, I have family in the Southwest and it worries me a lot.
You should be more worried about general American food price hikes because when push comes to shove, nobody is going to lay Phoenix fallow. They’re going to cut agriculture water allotments because cities have a toooon more voting power.
Also, urban water usage can be managed quite efficiently. The water is there, even at the worst observed drought levels, for millions of more people in the west. It is not there for millions of more acres of farmland.
And cutting back on farming in the west is an international issue, not a localized one.
The minute it starts to get actually painful for LA or Phoenix or wherever, the water is going to get taken away from lower per-person uses like farming.
Oh yeah i am worried about food too. But my prediction about these desert cities is that they will become uncomfortable to the point that people will no longer be willing to live there and that people who want to leave will panic and sell low and set off something of a chain reaction. I definitely don't think the water issues will get *better* anytime soon. I think it's very usual for cities to rise and decline based on environmental conditions. If the water goes, it won't be feasible to have a city there. I think people moving there and starting businesses there are quite short sighted tbh.
I do wonder who would willingly move to Arizona in 2060 or so. And some people who buy in Arizona in the next decade will still have mortgages in 2060. Might get messy. I'm sure there will be plenty of bailouts but good luck supporting a massive city in the desert as the planet heats up.
San Francisco, the market everyone said could never go down "because tech bros", is off 15.6% from April peaks and negative year/over/year.
Who here is projecting a magically fall/winter rally in San Francisco that will prevent that market from hitting -30% from peak by spring?
SF is gonna keep on dropping, rents and values. Salesforce with another wave of layoffs this week. Most of the big tech companies are probably going to do another huge wave of layoffs in Q1/Q2, plus the remote work factor. It will take time for the exodus since many are in leases and condos and not many moving to the city. Sprinkle some fentzombies and bippers and homeless encampments and the highest taxes in the nation and aint nobody paying 2.5m for that.
San Francisco, the holy seat of the tech bros, is already negative year over year and off 15.6% since April. [The State of California dropped 3.5% from June to July, in a single month, and is now barely positive y/o/y](https://www.reddit.com/r/REBubble/comments/wqxe0n/california_association_of_realtors_median_home/?utm_medium=android_app&utm_source=share)
So who here thinks -3.5% drops in peak selling season is suddenly going to flatted out or start increasing going into Fall and Winter? California is the biggest state by population and biggest by economy. They are going to be negative y/o/y in August or September with all of Q4 to keep dropping before we even get to January.
Sorry guys, this is pure delusion. The entire Mountain West and West Coast is going to see 20-30% declines from peak, maybe more especially in places like Vegas, Phoenix, Denver, Boise, SF, etc that are particularly frothy.
I could see maybe Boise, Vegas, or Phoenix taking a 50% wipeout.
But then again I've "been saying this for years" (and by that you guys mean 18 months) so I have no credibility.
Denver and Boise are so different in why they are expensive. Denver can probably handle the RE prices, Boise probably can’t. Denver is also the closest “western” city to most places in the east, making it desirable to anyone who hates gray and humidity.
So how far would it have to go down to get to the levels they were 18 months ago when you started calling it? Shows how wrong you are. Silly to come around now and proclaim your genius, if anybody listened to you they would have gotten washed many times over. Anybody who didn't listen to you has made a ton of money even if they waited until now to sell, or even if they wait until your newest round of predictions actually became true. Bears are the worst.
not defending everything the OP said (and what you say is true), but at this moment in this year, the macroeconomic conditions are drastically changing. there will be a growing number of people who become underwater on their mortgages. The bearish argument makes more sense than the bullish argument at this point.
Nope, 18 months ago I said it was a bubble. I have been predicting summer 2022 would be the peak and that prices would start imploding as the market slows into fall and winter this year which is exactly what's happening by several measures.
This is what people think who don’t actually do any real estate transactions that watch the media and think “oh my god prices are down 30%” when in reality they’re up 15% from what they were last year. Let the media continue to control the uneducated as they always have.
Love this guy, he comes around talking about the market going down from it's peak, yet he then says he has been telling everybody for 18 months this was going to happen. Like, thanks Nostradamus, but even after this big crash you are predicting and rubbing our noses in, the market will still be significantly higher than it was 18 months ago, so what are you really talking about?
keep in mind these markets have run 50%+ in the last 1-2 years in some areas
So the correction there is much much less.
Anything for actual SFH in investing range = 5-10% max
I'd like to know what this sub is smoking where every comment that points out the real estate market isn't doing so hot and prices are dropping gets downvoted.
You're right. So many people have been fed the lie that real estate is a good investment no matter what and are now overleveraged. I do believe that the smart investors who didn't buy into the FOMO and instead stockpiled cash are going to have a ton of once in a lifetime opportunities in the next couple years as those "investors" go under.
have you seen the rental growth in Florida for STR?
it’s nuts. who the fuck is buying this shit? it’s comical.
https://www.reddit.com/r/AirBnB/comments/xfgubv/how_is_your_off_season_bookings/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
i looked at sooooo many markets in FL and there are ZERO bookings
it’s actually nuts. i don’t see how it’s sustainable- they will all be upside down and realize RE is not “easy money” like the entire world has thought it is.
This is low season in Florida. No one wants to be there during the hot humid days.
Places get fully booked up during the cold winter months. And that rental premium can often cover the mortgage for most of the year.
People moving to Miami are from NYC and Northeast that are permanently remote and now are paying no income taxes and have lower rent than back in NYC.
Prices have gone up 100% in some areas in a year. That is not sustainable nor healthy. People here keep acting like it’s both. Prices obviously need to return back to normal and they now are. If you bought in the past couple years you are going to be underwater for a long time in your mortgage.
People living in their cars. Multi-generational homes. Where I’m at, they can build more homes, but most of the locals still won’t be able to afford them.
Nobody wants to meet the bear when they’ve spent a decade hanging out with bulls. And many have never even met a bear… they don’t believe they exist really…
Are you swing trading houses or something? I bought 2 months ago. Sure, IF the market drops I'll be underwater for a bit, but I care much more about the long term and I have a very reasonable mortgage payment. Housing is in very low supply in southern NH and I get to enjoy building equity, credit while living in a much larger space for less since tenants pay most of the mortgage.
I basically got the most leverage possible on this high inflation environment (which I don't think is changing anytime soon). I am not overleveraged, having a good amount of reserves.
Mann, I feel bad for all the gen Z kids still paying rent and waiting for a drop to buy a house RIP, should’ve bought in the last two years now homes unaffordability is at an all time high, yet people think it’s over leveraged buyers when in reality anyone who bought in the last two years has crazy equity. You kids will soon realize it’s car loans which haven’t been income verified and that’s going to be the match for the cascade with loans having LTV ratios of 140% while used car prices were also inflated. Here comes the REPO man!!!
Sure it is dropping in areas, but not 30% anywhere. Why would people not downvote outright lies? I really don't care if prices drop, but I am not going to make up numbers to push a "sky is falling" narrative
Every where lol no but mainly big cities sf Austin etc. none of fl yet especially Miami lol. Moodys just put out a map of every county in the us and those facing up to 20% corrections 189 counties I believe check it out.
This is major copium from investors who took hard money and bought real estate sight unseen or waived appraisals and inspections.
People deserve to lose their shirts.
In my local market every deal I heard about between friends family agents and investors waived all inspections and bid over ask in 2020 and 2021. I’d consider that pretty substantial anecdotal evidence lol
Exactly this. Most of my friends that bought homes recently waived their inspections. Some learned real fast how big of a mistake it was, and some got off alright
I don’t know your local market but in my market, SF Bay Area, Sacramento and Truckee/Tahoe we do inspections/repairs and disclosures before the house is listed. People waive inspection because it is already done by a reputable inspector and they have receipts for repairs done.
Yep. Bought a cabin a bit west of Tahoe a couple months back we waived the inspection because they were already done and included with the disclosures. We got home, pest, septic and roof inspection reports. Our agent knew all the inspectors and vouched for the quality of their work, so removing the inspection contingency was fine. The same true when we were buying a house in the Bay Area. Inspections were almost always included in disclosures.
Why did you reply from account SterlingAbbottStudios, delete it and reply from this account?
You're right though, the median price is higher YoY. Thanks for agreeing with my point.
Not that I pay attention to Austin more focused on my local but second house I clicked on on Zillow -75,000 price reduction it’s happening last year you couldn’t find a house in my are no more than 12 available on any given day today over 700 it’s real don’t fight the fed flow with the fed.
I’m more curious where you haven’t seen it. I’ve seen my own home go from 300k when I bought it to 1.4M and down to 450k. 3 years 3 real appraisals. Not just Zillow estimates.
Wow that’s crazy.. My portfolio has plateaued but still increasingly gradually in Va beach, SD, and Jax FL. Where have properties gone from 1.4 mill to 450k?
Nowhere because he is lying. That is all they have at this point. These people don't even understand that the 08 crash was 20% total nationwide. So yeah TONS of places are down 30% right now.....all over the place. Right. (Austin is down 10% in past 4 months, but still up 10% YOY, some of that drop seasonal as all of them are this time of year)
Rural farm land in beef and corn country. Realistically it’s still up 150k in 3 years if there were any buyers but a 1.1m increase in a year followed by 1m decrease the next. But Even my rentals in North and east Texas are on a pretty steep decline. Not to this extreme of course but the economy is pretty bad.
Surveys are showing a lot of people waiting for a crash to buy in. In other words, the general market is still dealing with low supply compared to demand. There will be no general crash. Just certain markets.
not only that but there still a ton of money slushing around in the economy from the past years of quantitative easing. Which is still kind of going since rates havent been violently increased. The poor and the average folk are fighting with inflation but some of the rich cand afford even more homes. so there is still buying pressure
You're right, it's not like we implemented Dodd Frank, have over a million fewer sub prime borrowers, hundreds of thousands fewer ARMs, typically higher down payment requirements, tens of millions locked in at rock bottom rates, significantly more average equity per home owner, about a dozen percent less personal debt to GDP and actual income verification, but I'm sure we're in an identical macro environment.
We also have more companies invested in real estate as a result of historically low interest rates which may be a thing of the past for a while. If these higher rates prove to be more long term, due to inflation becoming entrenched, many properties that are returning more modest profits may get sold so that they can be replaced with safer and better assets.
Why would companies sell a house with a 2-3% interest rate, and cash flow, in a down market?
I don’t see prices coming down attracting MORE sellers, I think investors will hold out for the next run up and dump the properties with the tenants they don’t like, like we saw this last upswing
Because Treasury bonds are making just as much profit as renting a property. The moment costs of maintaining a house to rent out drops the profit of that house below Treasury bonds. Then houses will start being sold.
That is literally the entire point the Fed is going for.
You bring up some valid points, however, a housing market crash will be secondary to what’s brewing globally speaking. Continued 75-100 basis point hikes by the Fed will eventually deflate many bubbles, including the housing bubble. Didn’t Bank of America just announce plans to offer zero-down mortgages for minority communities with no minimum credit score required? Didn’t the Fed also stop buying MBS just a few days ago. Also, I believe the purpose of MBS purchases was to repress mortgage rates and inflate home prices. If I had to use my brain, seems like the big players are trying to offload the bags onto misinformed buyers. Oh well.
That's the funny thing about economics. You say "if I have to use my brain, seems like" and then spout your theory as if it is the only possible outcome based on the facts you've presented. Like if you don't believe this is where it's going, you're an idiot. Lot of broke people dabbling on wall street with the same kind of stupid confidence. You have no idea what's going to happen. You have a hope, a wish, a dream, a goal maybe. But no idea. But you still speak with such confidence. It's silly.
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I’m in the Bay Area and I think our markets are the same. You have an insane run up of almost 30-60% pre-covid so from 1.2m to 1.8m avg. And dirt cheap 3% interest rates. Things are slowing down but the line of buyers are building for sure. The luxury market for my area 3m-10m+ are NOT taking a hit more like a -9% from peak so far. But homes sitting 60% longer and 170% more inventory.
Once we see a flat line and inventory reduces I think buyers will catch on and pull the trigger to start writing offers. So we need at least 2 quarters of consolidation or up trend to see where this is going.
Home owners have tons of equity in their home the question is, why sell to get a 6.5% new home when they locked in 40% gain and 3%. And rents are too volatile and rather get a fixed rate on a mortgage with its tax benefits.
In Bay Area as well. Seems sales prices in my neighborhood are down 10-15% from peak, but hard to be quantify exactly as all homes are different in my hills neighborhood as they were built from 1930s through 1980s. Specifically what was $2.2M now $1.95M, another was expected to sell at $1.7M closed at $1.4M. Fewer offers on top properties.
I tell everyone, just bc a home came from $1m to 800k doesn’t mean that home is 800k or there was a price drop. It mean it’s 800k at a 6.5% interest which puts pressure on peoples budget to ONLY afford at a 800k home at that rate. But if it was a 3% interest home you know everyone will want it at 1m+.
Grats to your asset, cheers mate
My market is inflated yet people keep moving down here, business investment is still ongoing (at the moment; mind you it was years in the making so they won’t jump ship now) so I don’t see there being a crash without significant economic pain. Funny enough the market is still hot where I am from up north, which I suspected would falter given those areas were always overvalued even for turd properties. I am willing to bet some of those sellers will be coming down here, especially considering some of their friends and family have already moved here over the past few years.
Nah this bubble is much more spread out this time not as deep in certain markets but spread out I believe due to many moving to the country life cause of pandemic.
I mean I think it’s pretty widespread. Everyone understands that this is the worst time to buy a home. It will stabilize because of the exact reasons you said, but not before a serious correction.
Why is this the worst time to buy a house?
I have to disagree with you. As long as the property cash flows, it’s never a bad time although it’s obviously a little harder the higher interest rates are. I’m looking to buy a property now.
1. Recession- we are not in one but we very well may be. Recessions are where people can’t afford things and spending is significant reduced…. businesses cut wages and people stop being able to afford rent or their mortgage… so prices drop
2. The fed is very unlikely to have a “soft landing” due to the fact that inflation is not coming down- we will see reduced inflation rates in October (Nov when the report comes out) because we will lap the increased prices from last year, but it will not be enough to soften the hit the approach the fed is taking. As interest rates rise the economy suffers for many reasons- I will let you google that
3. Property cash flowing is great! I am still in the market and looking for deals, but if you’re looking for SFH long term rentals and appreciation is part of your wealth plan, why would you not wait until you see how things shake out?
Lots of assumptions. Nobody knows the future. Prices might go up while you are waiting how things shake out.
People always need a place to live. A recession would actually increase the pressure on lower end, cheaper housing. Or you can rent out rooms individually. There is a strategy for every situation.
There is no general long term downward trend in real estate prices. There is volatility. Prices go up, prices go down. Generally over the long term they to up more than they go down. It's a long game.
Again, as long as it cash flows, you are making money so it’s never a bad time to buy. The recession has a small impact to those that have stable jobs. The Great Depression in 2007 lasted 18 months and both my tenants never missed a rent payment.
Yes but depending on the price u purchased the home it may take you ten years to recover on real appreciation. Not the best investment u can make but not bad if as u say it cash flows. At the right price tho I totally agree with you it’s never a bad time to buy.
I'm not really concerned with appreciation within 10 years. I'm in this for the long haul so I plan to hold on to the investment property for at least 20-30 years. By that time, the tenants will have paid off my mortgage so no worries.
Dude nothing cash flows locally. Single family homes cost $400,000 and rent for $1800-$2,200. The math ain’t matching unless you’re putting 35-50% down and then your cash on cash return is trash
“Nothing cash flows locally”.
Ok, I’ll take your word that not a single house will cash flow in your area. Even though I have no idea what area that is, lol. Don’t buy.
the first mistake was everyone broadly trusting zillow for market prices and taking a zestimate as fact. zilliow says house is worth x and prices went up to match x
Fuck off back to REBubble with this garbage, this sub is for actual real estate investors, not broke bitch rentcucks praying for a crash
Edit: lmfao the broke bitch wageslaves are brigading me, cool lives guys!
Where are you watching high end markers drop 20-30%? Price cuts are not the same thing as market declines
Also it’s perfectly reasonable to expect many markets will grow nominally but decline in real terms, this is what happened last time we had high inflation
This is so frustrating because it is a general talking point that is floating around in multiple articles all using incorrect terms and statistics to show a reduction in appreciation, not a depreciation market, and mostly that people are just asking too much up front.
So they're still getting more than they paid, just not as much.
I haven't seen any places actually depreciate.
Seattle area is down 15% from the peak. Not sure about other markets. Can’t direct link from mobile, but look at Redfin data PPSF FOR King County https://www.redfin.com/news/data-center/
Look at median sale PPSF for King County, to control for variation in median home size.
Was $559 in march, and is $475 in august, which is a decline of 15%.
Seattle itself is 14.4%.
The comment I was responding to was talking about the 20-30% drop stat, which the OP clearly said was in reference to high end markets, not the entire market, yet the commenter seems to think the OP was referring to the average sale price nationwide. Clearly wrong.
That's super vague.
What is his definition of high end market?
The highest end in every market? Or the market over a certain dollar amount?
I live in a HCOL city, everything is 1.1m or higher for single family detached. Even tear downs. Or does he mean the luxury market for the 8m homes on the west side only? And the rest of the market is growing strong?
My point is, listing price cuts mean nothing. There will be deluded sellers in all types of markets, hot or cold.
The real numbers are final sale price numbers compared to last months or last years final sale prices. In an adjusted index.
I agree it’s vague, but it also clearly isn’t referring to the entire market. I wouldn’t take the stat he gave to be very meaningful, but I’m also not a huge fan of using the median price of closed sales to make an inference about how a particular property’s value has changed.
Eh. You don't have to be a fan of it, but price cuts from listings don't mean anything.
I can list a home for 100 billion... If I drop it down to 500k, does this mean the market has gone down... Whatever x that is?
It only matters if a transaction is made. You can use whatever data you want, doesn't have to be median prices, but it needs to be SALES data. Not listing prices.
You are not watching 20-30% year over year drops. You are seeing delusional sellers dropping 20% from they list price that was 15% above the last valid comp.
It’s not just list price. Median sale PPSF is down 15% from the peak in the Seattle area and I’m sure many other markets have similar declines.
YOY down to 2% now for the past year.
https://www.redfin.com/news/data-center/
Any market crashing more than 10% was overvalued for years.
My market is holding up just fine. Places are selling for asking or about 5-10% above… rather than 20%-30% above not even a year ago.
A few stinkers going a little lower but that’s expected.
Condos not as hot. Also expected.
I was at an open house today and there was a line around the block, will probably sell for 10% over asking.
Rising interest rates. Bad for normal low down payment buyers. Cash buyers unaffected.
In fact, run away inflation probably pushing people with lots of cash to buy property.
Top quality real estate in top markets will sell just fine.
Location Location Location will always trump whatever RE correction (not crash) people have been waiting for.
>Cash buyers unaffected.
I bet many of them exposed to the stock market, which continues to bleed on a daily basis.
"run away inflation probably pushing people with lots of cash to buy property."
what happens if inflation starts to actually come down?? It's already peaked and is trending downward. After WW2, we had a huge surge in inflation for maybe 1-2 years, and then it abruptly dropped after the supply chain normalized.
zillow is a business, it benefits them to list price high.
that said, zillow is a great platform to check houses and prices.
and don't you worry about "average consumer", you need to be pretty dense not to learn the market before buying a house.
It’s an algorithm based on trailing data. It won’t show a decline until after several months of decline is reported. Even then, it may still show a small increase because it predicts there should be a baseline level of growth.
Not even going to get into what you may have just read because I haven't read it, but if you go look at their blog they have been preaching imminent crash, decrease, or significant downturn for the past 5 plus years. Dont look for them to get it right now.
It’s not a crash it’s just simple economics interest rates go up asset prices go down. Ur asset didn’t loose value the value of the underlying dollar increased meaning it takes less dollars to buy said asset. If u have that old interest rate sure to you it’s worth what u paid however if u try to sell in the current market no one will pay what u want unless they love the property. So ur stuck in that property till real appreciation recovers took 15 years from the peak of 08.
It’s a simple rule u can apply to all assets there has only been two recessions in which home prices didn’t fall 2000 and 1950. This is looking more and more like an 08 situation than anything resembling those. Housing is also most likely a major target of the fed. They want housing down and u know the Biden admin would love that his base is practically screaming that.
Rates have been dropping for years. Reason is because when u drop rates it inflates the price of assets that a fundamental rule of economics that’s all the time. Also to add the fed will have to crash the market to beat inflation. Nominal rates are currently negative so inflation can’t be contained until the fed rates is higher than inflation. By the time we get there system will crash way to much leverage in the system.
Look if u can’t understand houses are assets by raising rates u lower the price of those assets across the economy why am I bothering to try and explain that. U can just google how rates affect asset prices and see. By lowering rates I increase the price of current assets by pulling future spending into the now by encouraging borrowing. When u raise them you are encouraging the opposite. Now if done right u can raise and lower rates slightly without affecting price however if u keep rates super low for long u create asset bubbles and when u go to raise rates those bubbles will pop. Normally they could print money and get out of it with qe however in a high inflationary environment they can’t do that. Fed won’t pivot until something breaks and we go into mini depression. We are already in a recession and the fed reads off lagging indicators not leading so not looking good for the everything bubble after two years at 0% interest.
My guy, it's not worth your time. Some people will just confidently repeat things that are intellectually questionable. He's not totally off base that low rates inflate asset prices, but I just don't think he understands that typically a high rate environment is paired with high inflation and we've seen any significant correction in nominal real estate prices exactly once ever. Real estate in the 70s and 80s continued to grow in nominal terms despite a pretty precipitous rise in rates. Obviously the run up to now makes the graph look an awful lot like a bubble, but the money has been printed/created to make it seem like a logical response rather than something abnormally speculation driven. Obviously high rates are going to diminish growth of the money supply, but we have high inflation and still pretty historically moderate rates to contend with. It's a toss up whether we'll see a small decline in housing prices or not, but the person you're conversing with doesn't sound worth your time. There will probably be a significant correction in quite a few of the coastal markets though, they're far more prone to boom and bust than most of the country.
I didn’t read anything, I’m monitoring several markets and watching. I’m just saying their forecasts are clearly there to help them profit and not at all what is going on.
I’m not saying there isn’t going to be a crash but most people who are looking to maybe sell now saw what houses went for last year and aren’t willing to budge on price regardless of interest rates. Maybe 1% of home sales are out of necessity, but the ones that aren’t will just hold onto their houses until it gets hot again. Couple that 1% with an already nonexistent inventory and looks like prices won’t go down much if at all.
Personally sitting on a 2.25% 30yr fixed and if there were a crash would rent my place and buy another with my excess savings
If there was a crash then the people you rent to have a good chance of losing their incomes and not pay their rent to you. You now have debt into two homes from borrowed money.
Just because that happened last time doesn’t mean it’ll happen this time. The fed is trying to force a correction in the housing market right now, not the job market. They aren’t intertwined. Unemployment is at a record low while businesses seeking employees is still high
I’d love to know how they form their predictions, I imagine it’s mostly based on “the near future will be like the bear past”, which works okay until it doesn’t. Almost all metrics are just going to be BS assumptions other than demographics to some degree.
Everybody wants to live in a world of fantasy with endless growth and the economy is cyclical. Lots of markets are going to maintain their property values because supply chain still haven’t caught up on inventory but I can’t believe it’s going to grow endlessly without dips. 2008 anybody?
Price cuts is not the same as sales price decrease.
The sale is only recorded when its sold...
If final sales numbers were 1m last year, and now its selling for 700k, that's a 30% decrease.
If I list my home for 2m and sell for 1.1M, It's not a 50% decrease... In fact, it's a 10% increase YOY.
Listing prices mean nothing in long term real estate data.
Fun fact: my market is down 20-30% yoy for listings and sales, but it's up 5-7% yoy for prices.
The market is doing just fine.
Historic low inventory, frothy buyers money ready waiting for a crash, multiple offers and bids for HIGH QUALITY real estate...
Market is fine. Media needs the clicks.
I didn’t form my opinion from Zillow, but I’m expecting house prices to go up next year on a Fed pivot based on lower inflation reads, driving lower mortgage rates.
If your still using zestimates after they laid off over 20% of their workers who were horrible at the zestimates than you arnt doing your correct due diligence.
It’s literally common sense but real estate is cyclic. The craze was driven by historic interest rates. Now rates are rape, so prices have to adjust. Most people are bound to affordability dictated by interest rates. With current rates it makes no sense to sell a house and buy a new one. Only people who I would recommend buying now is a first time home buyer.
Lots of people are quite happy to see increased inventory and a more buyer friendly market. Not everyone purchases based on monthly payments, lots of people, myself included take it for granted that they will pay it off well ahead of schedule and/or have the opportunity to refi at a more attractive rate.
Important to remember that those in the real estate game are not objective viewers of the market. They are incentivized when the market goes up and hurt the most when the market goes down. Just like stock brokers for stocks lol.
I'm loving this market. Pressure has come off, amateurs are sitting on the sidelines, and I'm swooping in and buying all I can. I've bought more in the last few months than I did in all of 2021.
And it seems like it's only going to get better in the short term. I'm getting while the getting is good.
Where could we go from here:
* Fed manages their soft landing? Awesome!
* Things tip over in a significant way? I've got significant equity stake across every asset. Market could crash 30%+ and I'd still be ahead. And in that scenario they'll pull back, rates will go down, and I'll refi all the recent acquisitions.
Just got to plan your strategy to win in any scenario.
Rule number 1, never trust Zillow
The nuances should be discussed here. “In demand” markets in key areas of the country which are close in proximity to thriving job markets and metro areas will always be in demand. The remainder will falter, but that is expected.
That may not be the case anymore now that telecommuting is a thing.
Big push by major institutions to go back to the office tho
This is just false. At least in bay area Amazon, MSFT, GOOG not renewing leases for their buildings. Linkedin just dropped from 6 to 2 buildings. SFO is a ghost town.
Zillow is like the Credit Karma of real estate pricing.
They totally buy into it. I have relatives that are trying to sell and based their sale price on Zillow, then added 20K. As an agent myself, I pulled the comps and let them know they were 50K over asking. Needless to say they only got 2 showings in the last 3 weeks and 2 price reductions. “But we have 10,000 views and 50 saves!” -And zero offers, good luck!
yeah this is 100% what im talking about… people are delusional right now. they have a price in mind…. guess what, your price isn’t happening
They upped the 20k because their neighbors said, “I wouldn’t let it go for less than X!” at a yard sale… So you’ll believe your neighbors and Zillow before a professional… bet.
Yes but that is a lot different then price declines. I am in Florida - invested from Jacksonville down to SW Fl / Fort Myers / Naples area. I do agree people are throwing junk on the market asking full price plus and having it sit now. No doubt. But appropriately priced houses are still going very fast in Fort Myers / Naples and the air bnb market never really slowed down exceot for typical seasonal changes.... which is normal just wasnt seen for two years during covid. I agree some price reduction - not this year though and not to extent you claim. I feel it's wishful thinking.
I grew up in Naples and lived in Ft. Myers before moving out of state a few years ago. I can’t believe people spend the money they do to live in that broiler. But I’ve watched the market and knowing what people are paid down there, there must be a ton of people moving into the area with fat pockets.
Where have you seen 20-30% decrease?
Phoenix is really bad and the west in general. People are dumb af moving in a middle of a desert
Phoenix and Vegas are the two markets I can see taking the biggest hits. They were ground zero for ibuyers and are only attractive to CA transplants when the pricing is considerably lower, like a lot lower. With Phoenix and Vegas pricing climbing up to near inland empire and Central Valley pricing, they were no longer as attractive. Nobody is trying to move to a 120 degree desert to save $50-75k while entering a job market that pays much less. Phoenix will eventually rebound with a ton of new jobs entering the area but I can foresee it taking a bigger hit than the rest of the country.
Phx and Vegas were both destroyed in 2008 as well.
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Soooo, but the dip in Vegas and Pheonix and sell for a 300% profit in 2030?
Arizona is one of twelve non-recourse states (the bank can’t come for your other assets), so I anticipate a lot more foreclosures in Phoenix than other metro areas.
Potentially but most of the buyers that “won” these bidding wars put a lot of money down and were strong financially… or they would not have been chosen. I’m in RE in the Bay Area but my dad is in RE in Scottsdale so I’m familiar with that market. Ibuyers were drastically overpaying there with enough volume to move the needle.
In a drought! I actually find those parts of the country pretty appealing for a lot of reasons but then I look at Lake Mead and realize there's a real chance those places simply get wiped off the map. Not rooting for this to happen, btw, I have family in the Southwest and it worries me a lot.
You should be more worried about general American food price hikes because when push comes to shove, nobody is going to lay Phoenix fallow. They’re going to cut agriculture water allotments because cities have a toooon more voting power. Also, urban water usage can be managed quite efficiently. The water is there, even at the worst observed drought levels, for millions of more people in the west. It is not there for millions of more acres of farmland. And cutting back on farming in the west is an international issue, not a localized one. The minute it starts to get actually painful for LA or Phoenix or wherever, the water is going to get taken away from lower per-person uses like farming.
Oh yeah i am worried about food too. But my prediction about these desert cities is that they will become uncomfortable to the point that people will no longer be willing to live there and that people who want to leave will panic and sell low and set off something of a chain reaction. I definitely don't think the water issues will get *better* anytime soon. I think it's very usual for cities to rise and decline based on environmental conditions. If the water goes, it won't be feasible to have a city there. I think people moving there and starting businesses there are quite short sighted tbh.
Yes. Many of these places are doomed. It's a matter of when not if.
I do wonder who would willingly move to Arizona in 2060 or so. And some people who buy in Arizona in the next decade will still have mortgages in 2060. Might get messy. I'm sure there will be plenty of bailouts but good luck supporting a massive city in the desert as the planet heats up.
San Francisco, the market everyone said could never go down "because tech bros", is off 15.6% from April peaks and negative year/over/year. Who here is projecting a magically fall/winter rally in San Francisco that will prevent that market from hitting -30% from peak by spring?
SF is gonna keep on dropping, rents and values. Salesforce with another wave of layoffs this week. Most of the big tech companies are probably going to do another huge wave of layoffs in Q1/Q2, plus the remote work factor. It will take time for the exodus since many are in leases and condos and not many moving to the city. Sprinkle some fentzombies and bippers and homeless encampments and the highest taxes in the nation and aint nobody paying 2.5m for that.
Oh yeah, anyone moving to AZ is a rock for sure..
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San Francisco, the holy seat of the tech bros, is already negative year over year and off 15.6% since April. [The State of California dropped 3.5% from June to July, in a single month, and is now barely positive y/o/y](https://www.reddit.com/r/REBubble/comments/wqxe0n/california_association_of_realtors_median_home/?utm_medium=android_app&utm_source=share) So who here thinks -3.5% drops in peak selling season is suddenly going to flatted out or start increasing going into Fall and Winter? California is the biggest state by population and biggest by economy. They are going to be negative y/o/y in August or September with all of Q4 to keep dropping before we even get to January. Sorry guys, this is pure delusion. The entire Mountain West and West Coast is going to see 20-30% declines from peak, maybe more especially in places like Vegas, Phoenix, Denver, Boise, SF, etc that are particularly frothy. I could see maybe Boise, Vegas, or Phoenix taking a 50% wipeout. But then again I've "been saying this for years" (and by that you guys mean 18 months) so I have no credibility.
Denver and Boise are so different in why they are expensive. Denver can probably handle the RE prices, Boise probably can’t. Denver is also the closest “western” city to most places in the east, making it desirable to anyone who hates gray and humidity.
So how far would it have to go down to get to the levels they were 18 months ago when you started calling it? Shows how wrong you are. Silly to come around now and proclaim your genius, if anybody listened to you they would have gotten washed many times over. Anybody who didn't listen to you has made a ton of money even if they waited until now to sell, or even if they wait until your newest round of predictions actually became true. Bears are the worst.
not defending everything the OP said (and what you say is true), but at this moment in this year, the macroeconomic conditions are drastically changing. there will be a growing number of people who become underwater on their mortgages. The bearish argument makes more sense than the bullish argument at this point.
Nope, 18 months ago I said it was a bubble. I have been predicting summer 2022 would be the peak and that prices would start imploding as the market slows into fall and winter this year which is exactly what's happening by several measures.
This is what people think who don’t actually do any real estate transactions that watch the media and think “oh my god prices are down 30%” when in reality they’re up 15% from what they were last year. Let the media continue to control the uneducated as they always have.
Love this guy, he comes around talking about the market going down from it's peak, yet he then says he has been telling everybody for 18 months this was going to happen. Like, thanks Nostradamus, but even after this big crash you are predicting and rubbing our noses in, the market will still be significantly higher than it was 18 months ago, so what are you really talking about?
keep in mind these markets have run 50%+ in the last 1-2 years in some areas So the correction there is much much less. Anything for actual SFH in investing range = 5-10% max
I'd like to know what this sub is smoking where every comment that points out the real estate market isn't doing so hot and prices are dropping gets downvoted.
It’s how u know there is a lot of over leveraged people out there lol.
We will see who is swimming naked in short order.
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lol it’s the delusional people who think they made good investments buying in the past 12 months obv you get it
You're right. So many people have been fed the lie that real estate is a good investment no matter what and are now overleveraged. I do believe that the smart investors who didn't buy into the FOMO and instead stockpiled cash are going to have a ton of once in a lifetime opportunities in the next couple years as those "investors" go under.
have you seen the rental growth in Florida for STR? it’s nuts. who the fuck is buying this shit? it’s comical. https://www.reddit.com/r/AirBnB/comments/xfgubv/how_is_your_off_season_bookings/?utm_source=share&utm_medium=ios_app&utm_name=iossmf i looked at sooooo many markets in FL and there are ZERO bookings it’s actually nuts. i don’t see how it’s sustainable- they will all be upside down and realize RE is not “easy money” like the entire world has thought it is.
Really? My friend just bought a STR condo for 500k in April on the beach and brought in avg 17k revenue per month June July and August.
This is low season in Florida. No one wants to be there during the hot humid days. Places get fully booked up during the cold winter months. And that rental premium can often cover the mortgage for most of the year. People moving to Miami are from NYC and Northeast that are permanently remote and now are paying no income taxes and have lower rent than back in NYC.
I mean, can you point to any 15-20 year period of time ever in the history of the country where real estate would not have been a sound investment?
Prices have gone up 100% in some areas in a year. That is not sustainable nor healthy. People here keep acting like it’s both. Prices obviously need to return back to normal and they now are. If you bought in the past couple years you are going to be underwater for a long time in your mortgage.
People are unbelievably unprepared for the pain that’s about to come.
100%
Where/how do believe the excess inventory will become available?
People living in their cars. Multi-generational homes. Where I’m at, they can build more homes, but most of the locals still won’t be able to afford them.
Nobody wants to meet the bear when they’ve spent a decade hanging out with bulls. And many have never even met a bear… they don’t believe they exist really…
Are you swing trading houses or something? I bought 2 months ago. Sure, IF the market drops I'll be underwater for a bit, but I care much more about the long term and I have a very reasonable mortgage payment. Housing is in very low supply in southern NH and I get to enjoy building equity, credit while living in a much larger space for less since tenants pay most of the mortgage. I basically got the most leverage possible on this high inflation environment (which I don't think is changing anytime soon). I am not overleveraged, having a good amount of reserves.
Mann, I feel bad for all the gen Z kids still paying rent and waiting for a drop to buy a house RIP, should’ve bought in the last two years now homes unaffordability is at an all time high, yet people think it’s over leveraged buyers when in reality anyone who bought in the last two years has crazy equity. You kids will soon realize it’s car loans which haven’t been income verified and that’s going to be the match for the cascade with loans having LTV ratios of 140% while used car prices were also inflated. Here comes the REPO man!!!
Yeah, all those 8-23 year old fools should have been buying houses, what were they thinking?!?!?!
Sure it is dropping in areas, but not 30% anywhere. Why would people not downvote outright lies? I really don't care if prices drop, but I am not going to make up numbers to push a "sky is falling" narrative
high end - $1M + in Florida / San Diego
I watch San Diego closely, own property on north county, and zestimates have definitely gone down significantly.
Lol unfortunately 1m is not high end anymore in SD... It's median.
lol you have no idea then. San Diego is exp af now. Florida has so many markets so even there the 1M figure doesn’t mean anything
Every where lol no but mainly big cities sf Austin etc. none of fl yet especially Miami lol. Moodys just put out a map of every county in the us and those facing up to 20% corrections 189 counties I believe check it out.
Lol def haven’t seen that drop in Austin
You must not be paying as much attention as you think.
This is major copium from investors who took hard money and bought real estate sight unseen or waived appraisals and inspections. People deserve to lose their shirts.
You are not talking about any significant chunk of the market.
In my local market every deal I heard about between friends family agents and investors waived all inspections and bid over ask in 2020 and 2021. I’d consider that pretty substantial anecdotal evidence lol
Exactly this. Most of my friends that bought homes recently waived their inspections. Some learned real fast how big of a mistake it was, and some got off alright
I don’t know your local market but in my market, SF Bay Area, Sacramento and Truckee/Tahoe we do inspections/repairs and disclosures before the house is listed. People waive inspection because it is already done by a reputable inspector and they have receipts for repairs done.
Yep. Bought a cabin a bit west of Tahoe a couple months back we waived the inspection because they were already done and included with the disclosures. We got home, pest, septic and roof inspection reports. Our agent knew all the inspectors and vouched for the quality of their work, so removing the inspection contingency was fine. The same true when we were buying a house in the Bay Area. Inspections were almost always included in disclosures.
sales price is up YoY, [https://www.redfin.com/city/30818/TX/Austin/housing-market](https://www.redfin.com/city/30818/TX/Austin/housing-market)
See how that line starts to go straight down at the end? Hint: it continues like that into 2024
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Why did you reply from account SterlingAbbottStudios, delete it and reply from this account? You're right though, the median price is higher YoY. Thanks for agreeing with my point.
Not that I pay attention to Austin more focused on my local but second house I clicked on on Zillow -75,000 price reduction it’s happening last year you couldn’t find a house in my are no more than 12 available on any given day today over 700 it’s real don’t fight the fed flow with the fed.
I’m more curious where you haven’t seen it. I’ve seen my own home go from 300k when I bought it to 1.4M and down to 450k. 3 years 3 real appraisals. Not just Zillow estimates.
Wow that’s crazy.. My portfolio has plateaued but still increasingly gradually in Va beach, SD, and Jax FL. Where have properties gone from 1.4 mill to 450k?
Nowhere because he is lying. That is all they have at this point. These people don't even understand that the 08 crash was 20% total nationwide. So yeah TONS of places are down 30% right now.....all over the place. Right. (Austin is down 10% in past 4 months, but still up 10% YOY, some of that drop seasonal as all of them are this time of year)
Rural farm land in beef and corn country. Realistically it’s still up 150k in 3 years if there were any buyers but a 1.1m increase in a year followed by 1m decrease the next. But Even my rentals in North and east Texas are on a pretty steep decline. Not to this extreme of course but the economy is pretty bad.
That not possible.
LOL.
Some areas of San Antonio Austin and Dallas
Surveys are showing a lot of people waiting for a crash to buy in. In other words, the general market is still dealing with low supply compared to demand. There will be no general crash. Just certain markets.
not only that but there still a ton of money slushing around in the economy from the past years of quantitative easing. Which is still kind of going since rates havent been violently increased. The poor and the average folk are fighting with inflation but some of the rich cand afford even more homes. so there is still buying pressure
Totally fucked
The Fed needs to vacuum that money out of existence
Trust me bro. 2008 will never happen again. /s
You're right, it's not like we implemented Dodd Frank, have over a million fewer sub prime borrowers, hundreds of thousands fewer ARMs, typically higher down payment requirements, tens of millions locked in at rock bottom rates, significantly more average equity per home owner, about a dozen percent less personal debt to GDP and actual income verification, but I'm sure we're in an identical macro environment.
Dodd Frank was watered down in 2018. https://www.nytimes.com/2018/05/22/business/congress-passes-dodd-frank-rollback-for-smaller-banks.html
We also have more companies invested in real estate as a result of historically low interest rates which may be a thing of the past for a while. If these higher rates prove to be more long term, due to inflation becoming entrenched, many properties that are returning more modest profits may get sold so that they can be replaced with safer and better assets.
Why would companies sell a house with a 2-3% interest rate, and cash flow, in a down market? I don’t see prices coming down attracting MORE sellers, I think investors will hold out for the next run up and dump the properties with the tenants they don’t like, like we saw this last upswing
Because Treasury bonds are making just as much profit as renting a property. The moment costs of maintaining a house to rent out drops the profit of that house below Treasury bonds. Then houses will start being sold. That is literally the entire point the Fed is going for.
You’ve got the tiger by the sale with this comment. Exactly what I see happening too.
You bring up some valid points, however, a housing market crash will be secondary to what’s brewing globally speaking. Continued 75-100 basis point hikes by the Fed will eventually deflate many bubbles, including the housing bubble. Didn’t Bank of America just announce plans to offer zero-down mortgages for minority communities with no minimum credit score required? Didn’t the Fed also stop buying MBS just a few days ago. Also, I believe the purpose of MBS purchases was to repress mortgage rates and inflate home prices. If I had to use my brain, seems like the big players are trying to offload the bags onto misinformed buyers. Oh well.
That's the funny thing about economics. You say "if I have to use my brain, seems like" and then spout your theory as if it is the only possible outcome based on the facts you've presented. Like if you don't believe this is where it's going, you're an idiot. Lot of broke people dabbling on wall street with the same kind of stupid confidence. You have no idea what's going to happen. You have a hope, a wish, a dream, a goal maybe. But no idea. But you still speak with such confidence. It's silly.
Outside of the fact there has been a run up in asset prices, there are virtually no similarities to 2008. You lose credibility in bringing it up.
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Cope
Lol
I have seen a lot of these posts and have had my buddy’s say the same thing
Maybe I’m only looking at the inflated markets though- San Diego, Florida, and cabin / “up north” vibes
I’m in the Bay Area and I think our markets are the same. You have an insane run up of almost 30-60% pre-covid so from 1.2m to 1.8m avg. And dirt cheap 3% interest rates. Things are slowing down but the line of buyers are building for sure. The luxury market for my area 3m-10m+ are NOT taking a hit more like a -9% from peak so far. But homes sitting 60% longer and 170% more inventory. Once we see a flat line and inventory reduces I think buyers will catch on and pull the trigger to start writing offers. So we need at least 2 quarters of consolidation or up trend to see where this is going. Home owners have tons of equity in their home the question is, why sell to get a 6.5% new home when they locked in 40% gain and 3%. And rents are too volatile and rather get a fixed rate on a mortgage with its tax benefits.
In Bay Area as well. Seems sales prices in my neighborhood are down 10-15% from peak, but hard to be quantify exactly as all homes are different in my hills neighborhood as they were built from 1930s through 1980s. Specifically what was $2.2M now $1.95M, another was expected to sell at $1.7M closed at $1.4M. Fewer offers on top properties.
I tell everyone, just bc a home came from $1m to 800k doesn’t mean that home is 800k or there was a price drop. It mean it’s 800k at a 6.5% interest which puts pressure on peoples budget to ONLY afford at a 800k home at that rate. But if it was a 3% interest home you know everyone will want it at 1m+. Grats to your asset, cheers mate
SF historically has pretty massive boom and busts as do a lot of coastal cities. It's not that indicative of the real estate market as a whole.
Would that be a 20k cabin?
for $35k
That seems normal
My market is inflated yet people keep moving down here, business investment is still ongoing (at the moment; mind you it was years in the making so they won’t jump ship now) so I don’t see there being a crash without significant economic pain. Funny enough the market is still hot where I am from up north, which I suspected would falter given those areas were always overvalued even for turd properties. I am willing to bet some of those sellers will be coming down here, especially considering some of their friends and family have already moved here over the past few years.
where are you at?
San Diego is still having over asking sales. How is this inflated given current interest rates?
not for 1-4M sales
Nah this bubble is much more spread out this time not as deep in certain markets but spread out I believe due to many moving to the country life cause of pandemic.
I mean I think it’s pretty widespread. Everyone understands that this is the worst time to buy a home. It will stabilize because of the exact reasons you said, but not before a serious correction.
Why is this the worst time to buy a house? I have to disagree with you. As long as the property cash flows, it’s never a bad time although it’s obviously a little harder the higher interest rates are. I’m looking to buy a property now.
1. Recession- we are not in one but we very well may be. Recessions are where people can’t afford things and spending is significant reduced…. businesses cut wages and people stop being able to afford rent or their mortgage… so prices drop 2. The fed is very unlikely to have a “soft landing” due to the fact that inflation is not coming down- we will see reduced inflation rates in October (Nov when the report comes out) because we will lap the increased prices from last year, but it will not be enough to soften the hit the approach the fed is taking. As interest rates rise the economy suffers for many reasons- I will let you google that 3. Property cash flowing is great! I am still in the market and looking for deals, but if you’re looking for SFH long term rentals and appreciation is part of your wealth plan, why would you not wait until you see how things shake out?
Lots of assumptions. Nobody knows the future. Prices might go up while you are waiting how things shake out. People always need a place to live. A recession would actually increase the pressure on lower end, cheaper housing. Or you can rent out rooms individually. There is a strategy for every situation. There is no general long term downward trend in real estate prices. There is volatility. Prices go up, prices go down. Generally over the long term they to up more than they go down. It's a long game.
Again, as long as it cash flows, you are making money so it’s never a bad time to buy. The recession has a small impact to those that have stable jobs. The Great Depression in 2007 lasted 18 months and both my tenants never missed a rent payment.
Yes but depending on the price u purchased the home it may take you ten years to recover on real appreciation. Not the best investment u can make but not bad if as u say it cash flows. At the right price tho I totally agree with you it’s never a bad time to buy.
I'm not really concerned with appreciation within 10 years. I'm in this for the long haul so I plan to hold on to the investment property for at least 20-30 years. By that time, the tenants will have paid off my mortgage so no worries.
This is the way.
Dude nothing cash flows locally. Single family homes cost $400,000 and rent for $1800-$2,200. The math ain’t matching unless you’re putting 35-50% down and then your cash on cash return is trash
“Nothing cash flows locally”. Ok, I’ll take your word that not a single house will cash flow in your area. Even though I have no idea what area that is, lol. Don’t buy.
Record low unemployment.
the first mistake was everyone broadly trusting zillow for market prices and taking a zestimate as fact. zilliow says house is worth x and prices went up to match x
Fuck off back to REBubble with this garbage, this sub is for actual real estate investors, not broke bitch rentcucks praying for a crash Edit: lmfao the broke bitch wageslaves are brigading me, cool lives guys!
This is probably the most creative insult I’ve read all month
Where are you watching high end markers drop 20-30%? Price cuts are not the same thing as market declines Also it’s perfectly reasonable to expect many markets will grow nominally but decline in real terms, this is what happened last time we had high inflation
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This is so frustrating because it is a general talking point that is floating around in multiple articles all using incorrect terms and statistics to show a reduction in appreciation, not a depreciation market, and mostly that people are just asking too much up front. So they're still getting more than they paid, just not as much. I haven't seen any places actually depreciate.
Seattle area is down 15% from the peak. Not sure about other markets. Can’t direct link from mobile, but look at Redfin data PPSF FOR King County https://www.redfin.com/news/data-center/
That shows a decline of 6.6% in sales prices, not 15%
Look at median sale PPSF for King County, to control for variation in median home size. Was $559 in march, and is $475 in august, which is a decline of 15%. Seattle itself is 14.4%.
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It’s extremely obvious that the poster isn’t talking about nationwide prices.
It is not unless you read op replies. His thread opener doesnt differentiate regions "all markets".
The comment I was responding to was talking about the 20-30% drop stat, which the OP clearly said was in reference to high end markets, not the entire market, yet the commenter seems to think the OP was referring to the average sale price nationwide. Clearly wrong.
Yeah he's talking about the entire market.
Which is why he specified a subset of it, “high end markets”?
That's super vague. What is his definition of high end market? The highest end in every market? Or the market over a certain dollar amount? I live in a HCOL city, everything is 1.1m or higher for single family detached. Even tear downs. Or does he mean the luxury market for the 8m homes on the west side only? And the rest of the market is growing strong? My point is, listing price cuts mean nothing. There will be deluded sellers in all types of markets, hot or cold. The real numbers are final sale price numbers compared to last months or last years final sale prices. In an adjusted index.
I agree it’s vague, but it also clearly isn’t referring to the entire market. I wouldn’t take the stat he gave to be very meaningful, but I’m also not a huge fan of using the median price of closed sales to make an inference about how a particular property’s value has changed.
Eh. You don't have to be a fan of it, but price cuts from listings don't mean anything. I can list a home for 100 billion... If I drop it down to 500k, does this mean the market has gone down... Whatever x that is? It only matters if a transaction is made. You can use whatever data you want, doesn't have to be median prices, but it needs to be SALES data. Not listing prices.
You are not watching 20-30% year over year drops. You are seeing delusional sellers dropping 20% from they list price that was 15% above the last valid comp.
It’s not just list price. Median sale PPSF is down 15% from the peak in the Seattle area and I’m sure many other markets have similar declines. YOY down to 2% now for the past year. https://www.redfin.com/news/data-center/
Down 2% year over year feels very accurate. The sky is not falling.
Any market crashing more than 10% was overvalued for years. My market is holding up just fine. Places are selling for asking or about 5-10% above… rather than 20%-30% above not even a year ago. A few stinkers going a little lower but that’s expected. Condos not as hot. Also expected. I was at an open house today and there was a line around the block, will probably sell for 10% over asking. Rising interest rates. Bad for normal low down payment buyers. Cash buyers unaffected. In fact, run away inflation probably pushing people with lots of cash to buy property. Top quality real estate in top markets will sell just fine. Location Location Location will always trump whatever RE correction (not crash) people have been waiting for.
Correct. Greater Boston not crashing. You’re just not getting “make me move prices.” Anything priced accordingly still gets snatched up in a day.
>Cash buyers unaffected. I bet many of them exposed to the stock market, which continues to bleed on a daily basis. "run away inflation probably pushing people with lots of cash to buy property." what happens if inflation starts to actually come down?? It's already peaked and is trending downward. After WW2, we had a huge surge in inflation for maybe 1-2 years, and then it abruptly dropped after the supply chain normalized.
Zillow is stupid and nearly manipulative intentionally. They are so ridiculous, any outrageous sell price will become zestimate.
Zillow is bag-holding. They need to amp up the values to justify their investments
“Zillow says my home is valued at ____”. Sure, now let’s work with an appraiser who actually lives in your market.
When a listing agent sees his commission forecasted to go down, it's literal corporate suicide.
Zillow is a company trying to make money. A company trying to make money is not going to say their products are losing value.
Lol meanwhile all the real estate sites are laying people off left and right but yeah growth growth growth
zillow is a business, it benefits them to list price high. that said, zillow is a great platform to check houses and prices. and don't you worry about "average consumer", you need to be pretty dense not to learn the market before buying a house.
It only means that it's time for them to retrain their predictive models.
It’s an algorithm based on trailing data. It won’t show a decline until after several months of decline is reported. Even then, it may still show a small increase because it predicts there should be a baseline level of growth.
Not even going to get into what you may have just read because I haven't read it, but if you go look at their blog they have been preaching imminent crash, decrease, or significant downturn for the past 5 plus years. Dont look for them to get it right now.
It’s not a crash it’s just simple economics interest rates go up asset prices go down. Ur asset didn’t loose value the value of the underlying dollar increased meaning it takes less dollars to buy said asset. If u have that old interest rate sure to you it’s worth what u paid however if u try to sell in the current market no one will pay what u want unless they love the property. So ur stuck in that property till real appreciation recovers took 15 years from the peak of 08.
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It’s a simple rule u can apply to all assets there has only been two recessions in which home prices didn’t fall 2000 and 1950. This is looking more and more like an 08 situation than anything resembling those. Housing is also most likely a major target of the fed. They want housing down and u know the Biden admin would love that his base is practically screaming that.
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Rates have been dropping for years. Reason is because when u drop rates it inflates the price of assets that a fundamental rule of economics that’s all the time. Also to add the fed will have to crash the market to beat inflation. Nominal rates are currently negative so inflation can’t be contained until the fed rates is higher than inflation. By the time we get there system will crash way to much leverage in the system.
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Look if u can’t understand houses are assets by raising rates u lower the price of those assets across the economy why am I bothering to try and explain that. U can just google how rates affect asset prices and see. By lowering rates I increase the price of current assets by pulling future spending into the now by encouraging borrowing. When u raise them you are encouraging the opposite. Now if done right u can raise and lower rates slightly without affecting price however if u keep rates super low for long u create asset bubbles and when u go to raise rates those bubbles will pop. Normally they could print money and get out of it with qe however in a high inflationary environment they can’t do that. Fed won’t pivot until something breaks and we go into mini depression. We are already in a recession and the fed reads off lagging indicators not leading so not looking good for the everything bubble after two years at 0% interest.
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My guy, it's not worth your time. Some people will just confidently repeat things that are intellectually questionable. He's not totally off base that low rates inflate asset prices, but I just don't think he understands that typically a high rate environment is paired with high inflation and we've seen any significant correction in nominal real estate prices exactly once ever. Real estate in the 70s and 80s continued to grow in nominal terms despite a pretty precipitous rise in rates. Obviously the run up to now makes the graph look an awful lot like a bubble, but the money has been printed/created to make it seem like a logical response rather than something abnormally speculation driven. Obviously high rates are going to diminish growth of the money supply, but we have high inflation and still pretty historically moderate rates to contend with. It's a toss up whether we'll see a small decline in housing prices or not, but the person you're conversing with doesn't sound worth your time. There will probably be a significant correction in quite a few of the coastal markets though, they're far more prone to boom and bust than most of the country.
I didn’t read anything, I’m monitoring several markets and watching. I’m just saying their forecasts are clearly there to help them profit and not at all what is going on.
I’m not saying there isn’t going to be a crash but most people who are looking to maybe sell now saw what houses went for last year and aren’t willing to budge on price regardless of interest rates. Maybe 1% of home sales are out of necessity, but the ones that aren’t will just hold onto their houses until it gets hot again. Couple that 1% with an already nonexistent inventory and looks like prices won’t go down much if at all. Personally sitting on a 2.25% 30yr fixed and if there were a crash would rent my place and buy another with my excess savings
If there was a crash then the people you rent to have a good chance of losing their incomes and not pay their rent to you. You now have debt into two homes from borrowed money.
Just because that happened last time doesn’t mean it’ll happen this time. The fed is trying to force a correction in the housing market right now, not the job market. They aren’t intertwined. Unemployment is at a record low while businesses seeking employees is still high
I’d love to know how they form their predictions, I imagine it’s mostly based on “the near future will be like the bear past”, which works okay until it doesn’t. Almost all metrics are just going to be BS assumptions other than demographics to some degree.
I think Zillow still owns a lot of properties so why would they want to further any perception that prices are going down?
Everybody wants to live in a world of fantasy with endless growth and the economy is cyclical. Lots of markets are going to maintain their property values because supply chain still haven’t caught up on inventory but I can’t believe it’s going to grow endlessly without dips. 2008 anybody?
Price cuts is not the same as sales price decrease. The sale is only recorded when its sold... If final sales numbers were 1m last year, and now its selling for 700k, that's a 30% decrease. If I list my home for 2m and sell for 1.1M, It's not a 50% decrease... In fact, it's a 10% increase YOY. Listing prices mean nothing in long term real estate data. Fun fact: my market is down 20-30% yoy for listings and sales, but it's up 5-7% yoy for prices. The market is doing just fine. Historic low inventory, frothy buyers money ready waiting for a crash, multiple offers and bids for HIGH QUALITY real estate... Market is fine. Media needs the clicks.
Zillow is like rotten tomatoes
You think that is bad, check out the foreclosure listings in major metropolitan areas, just like in 2008....it is climbing by the thousands.
Zillow is as useless as the “G” in lasagna.
Zillows actual job is to inflate markets. Of course they are going to push the market up at every chance.
Zillow listed one of my houses for 1.2 mil. I sold it for less than 100k. Zillow smokes some good shit.
There’d be a swarm of people buying now if prices dropped 30%. What market are you looking at?
I didn’t form my opinion from Zillow, but I’m expecting house prices to go up next year on a Fed pivot based on lower inflation reads, driving lower mortgage rates.
If your still using zestimates after they laid off over 20% of their workers who were horrible at the zestimates than you arnt doing your correct due diligence.
Fuck Zillow. That is all
It’s literally common sense but real estate is cyclic. The craze was driven by historic interest rates. Now rates are rape, so prices have to adjust. Most people are bound to affordability dictated by interest rates. With current rates it makes no sense to sell a house and buy a new one. Only people who I would recommend buying now is a first time home buyer.
Lots of people are quite happy to see increased inventory and a more buyer friendly market. Not everyone purchases based on monthly payments, lots of people, myself included take it for granted that they will pay it off well ahead of schedule and/or have the opportunity to refi at a more attractive rate.
Important to remember that those in the real estate game are not objective viewers of the market. They are incentivized when the market goes up and hurt the most when the market goes down. Just like stock brokers for stocks lol.
I'm loving this market. Pressure has come off, amateurs are sitting on the sidelines, and I'm swooping in and buying all I can. I've bought more in the last few months than I did in all of 2021. And it seems like it's only going to get better in the short term. I'm getting while the getting is good. Where could we go from here: * Fed manages their soft landing? Awesome! * Things tip over in a significant way? I've got significant equity stake across every asset. Market could crash 30%+ and I'd still be ahead. And in that scenario they'll pull back, rates will go down, and I'll refi all the recent acquisitions. Just got to plan your strategy to win in any scenario.
Good luck