Made it.
Rough day but all the important stuff is done and no disasters that I’m aware of
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My understanding is builders are putting very little effort into new starts right now and focusing 100% of their resources on finishing current builds while prices are high.
Also could be from temporary lack of sales. Many builders will have x unsold houses under construction at any given time. House goes under contract, start another one. Slow sales = fewer houses get started.
My understanding is builders aren’t building anything on spec right now. Everything presold with real deposits.
Definitely not. Tons and tons of spec construction, especially in fast-growing sunbelt cities.
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https://www.reddit.com/r/Austin/comments/wq2e3i/austin_housing_inventory_skyrockets_to_highest/
Basically prices went up a fuck ton here when rates were low, and now that rates are high literally nobody is willing to buy these properties at these prices. And that’s totally fair and reasonable. I wouldn’t have bought this house at the price I got it (It’s up 150k on paper since I put the deposit down on the construction in feb '21) at 5% instead of 3%.
The builders have been making absolutely absurd profits here over the last 24 months, but it’s been super hard to get materials and a lot of the houses they started in that time period are 4-12 months behind schedule. In my neighborhood they also did a ton of starts at the beginning of the year, and it’s very clear that they lost some of those buyers to the higher interest rates (the deposit is only 5k).
I predict we’ll see some substantial level of price drop, although not probably to the point where I end up underwater.
I understand inventory is increasing and it may become an issue if it continues to do so, but it also seems unnecessary to use a word like skyrocket when inventory is just returning to 2018 levels. I don’t remember concern over housing inventory levels in 2018.
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Right the issue is that the inventory level’s rate of increase is nothing at all like 2018 and is continuing to rise. It’s gone from historic lows to the same level as 2018 in 4-5 months. That strongly suggests that the market is nowhere near done adding inventory.
Around me, new housing that was selling for around $400-$450k in 2018-2020 are still be listed at > $750-$800k but they are finally starting to sit on the market. Hopefully they plunge and I can finally buy the new house that we want.
I think there’s going to be a huge difference between places where new inventory can be readily built, and places where it isn’t or can’t.
Austin is an extreme outlier in that it is a fringe top 30 metro area but it’s a top 5 new housing market, ahead of the likes of LA, Miami, Atlanta, DC, and Chicago. So absorption of new inventory is just an absurdly huge deal there, whereas in a metro like San Francisco, with 2x the population but 20% of the amount of new housing construction, inventory is gonna be a whole lot less volatile.
Other metros kind of like Austin are Orlando, Charlotte, and Jacksonville, but none of those are to the level of Austin.
The townhouse next to mine was sold in February at 232k. It was renovated and listed for sale at $280k in March. It’s still on the market now at $215k. It’s kind of nice not having a neighbor, other than all the other neighbors parking their extra cars there.
Cliffs: Black couple tried to refi, gets house appraised for $475k which is below their loan amount. Takes down all their pictures and has a white coworker show the house to the appraiser, house appraises for $750k. House is in a wealthy, majority-white city but near a Black neighborhood. Comps on first appraisal were from the Black neighborhood, comps on second were from the white neighborhood.
Obviously an insane outcome but probably more or less typical.
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1 month free though how can you pass on that
$800/floor seems cheap.
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I just looked at comparable monthly payments between a $700k house at 3% and a $450k house st 6% and immediately closed the tab in pain.
How do these insane interest rates not lead to foreclosures all over the place because families making $70k can’t pay $3000 monthly payments?
Shouldn’t this drive down prices and lead to opportunities to buy if you have high credit / income to support the payment?
Not sure to sound like an unsympathetic asshole but I feel like buying a house right now is less ev than waiting 12+ months.
Only for people who chose an ARM instead of locking down the historically low rates for fixed instruments that had been available essentially for years.
Everyone just about has a fixed rate 30 year mortgage. But yes these interest rates mean that many if not most homeowners couldn’t afford the house they live in if they had to buy it for the market rate with the current interest rates.
The prices have to come down or the interest rates have to come down. I absolutely wouldn’t buy a house right now.
Anyone with any sense locked in 30 year loans around 3% and those with ARM’s are still fine until their initial rates expire.
Prices should at least be suppressed because like you noticed earlier the pool of buyers who could previously afford a $750k house is now much smaller. But so far it looks like there are still buyers in most markets.
Prices might come down slightly in 12 months but it’s more likely mortgage rates will be higher so it’s not necessarily a good idea to wait. I’m in that tough situation where I’d like to buy a house but my life situation will be much more stable in 12 months (changes at work coinciding with when it would make sense to move in with the somewhat new girlfriend if we’re still together). I’m taking a tenuous comfort in the idea that prices might come down a bit but if my life situation resolved today I wouldn’t wait to buy.