I am filtering realtor for open houses in my zip code and no joke every single listing has a price reduction.
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The housing market near me has completely shut down. Lol realtors of course all think the party will never end, it’s that scene from Big Short all over again.
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I don’t understand how it could not. The payment on the house I bought in September would cost like 25-30% more per month at today’s interest rates. So I could not sell it and buy a comparable house.
We have to be getting to a point where buyers will not or cannot pay to maintain prices under rising interest rates and at the same time most sellers will have little reason to put houses on the market and take a loss or switch into a worse mortgage payment. The job market is still OK and inflationary pressure should help those with fixed rate mortgages, so it is unlikely many homeowners will be forced out of their home for economic reasons. People can delay moves or downsizing if it saves them from taking a loss or switching from a low rate mortgage to a much higher rate mortgage.
So my guess is there will just be an overall reduction in housing supply and transactions as people are sort of locked into place by mortgage rates that cannot be repeated going forward.
The dynamics you describe are really similar to the late 90s. It doesn’t lead me to believe there is going to be some fundamental change to market inflows. The bubble will pop. Riskier assets will decline a lot more than safer ones. With the current inflation the real values will decline more than the nominal values. Many people will ignore the whole thing and keep doing their normal 401k contributions and rebalance as needed (inflows). Some people might panic sell at the worst times. Eventually there will be a bottom.
I’m not a fan of any analysis based on the idea that hedge funds are smart money and retail is dumb money when both are proven to underperform index investing. If anything the wallstreetbets crowd is dumber money than the hedge funds but them all going busto isn’t going to make this time different than previous boom bust cycles.
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Every. Single. Time there are people saying this one is different. It isn’t. In fact, so far, this cycle is pretty mild relative to the savings and loan, GFC and dot com bubbles.
Basically this:
Must be fucking nice. I’ve lost out on two houses in the last two weeks which went for $200k and $225k over list. Some houses are getting price reductions but the overwhelming majority are still snatched up in the first week.
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There’s a vacant half acre waterfront lot in my area that is listed for $C 1.5 million. So not really any bargains to be had yet.
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It’s going to be weird. My guess is values will level off but not crash because there isn’t going to be much supply. Builders can’t build into 6% mortgages and sellers can’t leave sub-4% mortgages.
I am in the industry and see about 200 residential transactions a month. My region things haven’t started to cool off in anyway yet. That being said I saw 5 cancellations last week that were blamed on interest rates. Usually rates are locked in pretty quick and have like 30-45 day expirations so anything that gets delayed with a loan on it is in danger of cancelling.
Still so much cash flowing into real estate. Large corporate and foreign investors are gobbling up houses in my area and they are making up a bigger % of transactions now than they have in the last few years.
What the Market nationwide or regionally does, who knows. I am trying to plan as if things wont cool down or only cool a little. I also have a contingency plan in place to try and tailor services for a huge slowdown or complete crash if that comes.
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Back in the day when honesty in investing was what mattered
https://twitter.com/WallStreetSilv/status/1522798778725675009
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Never seen a housing crash in my lifetime so that’s what I’m rooting for because I love new experiences.
2008? Or you weren’t an adult then?
Hope Matt Levine writes about this
https://twitter.com/quantian1/status/1523354044118540295?s=21&t=RBdSHv-9OrSHXd79kvGPYQ
18k is an amazing outcome at this point imo
What does that mean?
Well I would imagine F and RIVN will be gapping down tomorrow…