For the Real Estate Drop in sales and price Naysayers HOLD ONTO YOUR HATS

[LargeOrangeFont]

US Existing Home Sales Suffer Second Weakest Summer Ever​

...and mortgage rates are only going to make it worse from here.

THU SEP 21, AT 7:10 AM


Famine time in the Real Estate industry.

At current rates, I'd expect that. And prices are about as high as ever.. this market is driven by supply and demand. What is going to happen to create supply?

If some realtors starve, that isn't going to change housing prices.

 

[LargeOrangeFont]

I’m actually hearing refinancing are up.

It is in the toilet. My team and I cover many of the larger banks. Its not at 0... but business is way way down. Like over 75% down.

 

[mesquito_creek]

23% of homes in America are owned free and clear.

If yore home is paid off, you don't have a mortgage rate. If your home is paid off you are unlikely to move into a situation where you will have an 8% mortgage rate.

23% is one of the lower numbers out there based on the OECD study, which is an international group not an American survey. There are plenty of other US based groups that publish higher numbers in the 33-42% range. I tend to believe the higher numbers due to the long run of low rates where more money went to principle payments. Also gentrification of the population and boomers with much higher mortgage free percentages.

I know quite a few people without mortgages or less than 5 years to go before making their last payment…. Lots of people took out ~ 3% 15 year mortgages over ten years ago. It’s creating a lot of headwind for the doom and gloomers.

 

[LargeOrangeFont]

Rents are dropping in the IE and especially Phoenix, the amount of rentals that have been sitting for multiple months with price drops is crazy. Homes in Phoenix are sitting at pre pandemic pricing and still vacant.

Because of interest rates.. Its not pre pandemic pricing at 8% interest.

 

[attitude]

Because of interest rates.. Its not pre pandemic pricing at 8% interest.

I was not aware interest rates directly affected rental prices?

 

[Englewood]

Rents are dropping in the IE and especially Phoenix, the amount of rentals that have been sitting for multiple months with price drops is crazy. Homes in Phoenix are sitting at pre pandemic pricing and still vacant.

We manage about 200 units and have seen a slight slowdown, but nothing more than the seasonal slowdown that we encounter every year.

 

[attitude]

We manage about 200 units and have seen a slight slowdown, but nothing more than the seasonal slowdown that we encounter every year.

CA or AZ?

 

[Englewood]

US Existing Home Sales Suffer Second Weakest Summer Ever​

...and mortgage rates are only going to make it worse from here.

THU SEP 21, AT 7:10 AM


Famine time in the Real Estate industry.

Keep in mind that this is sales, not prices. High rates are causing this. Nobody is upgrading. Volume is way down and many agents are starving. Many have gone from 5/month to 5/year.

CA or AZ?

SoCal

 

[LargeOrangeFont]

I was not aware interest rates directly affected rental prices?

I took your last sentence to mean housing prices in Phoenix not rental prices in Phoenix.

Maybe there is not a housing shortage after all? I think most people are in a wait and see mode right now. There is always lots of churn. At this time rents resetting is not translating into RE price drops.

 

[attitude]

I took your last sentence to mean housing prices in Phoenix not rental prices in Phoenix.

Maybe there is not a housing shortage after all? I think most people are in a wait and see mode right now. There is always lots of churn. At this time rents resetting is not translating into RE price drops.

If house prices in Phoenix were at 2019 levels you would be talking to a home owner right now!

According to my “future” brother in law whose whole family is in real estate, most buyers are using rate by downs which is what I suspected. I can still go buy a sub 400k house in Phoenix on a 3-2-1 buy down with a starting payment around $2k, that is within 10% of rent.

Rents in CA are still far from pre pandemic pricing.

 

[regor]

At current rates, I'd expect that. And prices are about as high as ever.. this market is driven by supply and demand. What is going to happen to create supply?

If some realtors starve, that isn't going to change housing prices.

Keep in mind that this is sales, not prices. High rates are causing this. Nobody is upgrading. Volume is way down and many agents are starving. Many have gone from 5/month to 5/year.


SoCal

I wasn't addressing housing prices at all, just the tough industry for the real estate peeps going forward.

It's a feast or famine industry and the ones that didn't prepare, will be hurting.

 

[attitude]

Keep in mind that this is sales, not prices. High rates are causing this. Nobody is upgrading. Volume is way down and many agents are starving. Many have gone from 5/month to 5/year.


SoCal

Rents seem to down 5-10% in my CA neighborhood, they peaked at $3200-3300 and now there are multiple houses all for $3000. Still a lot smaller percentage than AZ.

 

[Done-it-again]

Rents are dropping in the IE and especially Phoenix, the amount of rentals that have been sitting for multiple months with price drops is crazy. Homes in Phoenix are sitting at pre pandemic pricing and still vacant.

I'm sure they are dropping because they are vacant, but they do not drop once its rented...

 

[hallett21]

Rents are still nuts in our area.

2000-2500 for a 500 sq ft ADU.

Clapped out 2/1 50s house for 3400 a month.

Sales have significantly slowed but asking prices have stayed the same (roughly).

 

[attitude]

I'm sure they are dropping because they are vacant, but they do not drop once its rented...

That is true lots of short term rentals though. I’m not sure if it’s a seasonal thing or if people will use a 6 month rental as a way to move to the state and then by a house. Either way, ever time it goes vacant it’s a chance the rent will need to drop.

As a disclaimer, all of my info is coming from Zillow and the “price history” section.

 

[billt]

This housing market is horrible for a young couple looking for their first home. For anyone else already in a home with a good rate first mortgage, their only choice is to stay there.

The worst thing anyone could possibly do in this market, is to refinance a home mortgage to take out money to buy a depreciating asset. Yet people do it all the time. Before I retired, I saw several people I worked with get caught up in the housing debacle of 2008.

Most were sitting pretty, with a lot of equity in a nice home. But they sold, borrowed a ton to build a big home they didn't need, thinking they were going to make a killing on it. Only to lose everything when it all crashed.

As they say, run with the sheep, and get slaughtered.

 

[riverroyal]

Doom and gloom huh? Our sold Sunday. 3 over asking prices on day 2 of listing
Rates on new are mid 6s. (Which is fine, refinance over and over to get down. Just like we did before)
Our 1st house was 11%.

The market is fine. I'm living it right now. If your not, well maybe don't watch social media for a bit.
We will survive.

 

[ChumpChange]

Doom and gloom huh? Our sold Sunday. 3 over asking prices on day 2 of listing
Rates on new are mid 6s. (Which is fine, refinance over and over to get down. Just like we did before)
Our 1st house was 11%.

The market is fine. I'm living it right now. If your not, well maybe don't watch social media for a bit.
We will survive.

I’m sure the house you had your 11% mirtgage on was substantially cheaper than what you sold. And the affordability index was higher at the time.

 

[Englewood]

I’m sure the house you had your 11% mirtgage on was substantially cheaper than what you sold. And the affordability index was higher at the time.

Affordability isn’t changing. Rather, it’s never going back to where it was. Sucks for someone starting out.

 

[DrunkenSailor]

 

[ChumpChange]

Affordability isn’t changing. Rather, it’s never going back to where it was. Sucks for someone starting out. View attachment 1280845

Exactly. I love it when people talk about how they bought a house with a super high interest rate. They forget to tell the rest of the story.

 

[LargeOrangeFont]

Affordability isn’t changing. Rather, it’s never going back to where it was. Sucks for someone starting out. View attachment 1280845

So should I hold onto or cry into my hat now?

 

[Cdog]

Exactly. I love it when people talk about how they bought a house with a super high interest rate. They forget to tell the rest of the story.

Intellectual dishonesty has become the norm to grandstand and attempt to prove an invalid point

 

[JLG614]

I think the big problem is pricing. Yes of course the market has slowed because of interest rates but the prices of homes are not dropping. I think this pattern is going to stick and once they start to lower the interest rates the price of homes are going to skyrocket well above where they are now. Unless we see a big change in the economy I really believe this is how it will play out

 

[c_land]

I think the big problem is pricing. Yes of course the market has slowed because of interest rates but the prices of homes are not dropping. I think this pattern is going to stick and once they start to lower the interest rates the price of homes are going to skyrocket well above where they are now. Unless we see a big change in the economy I really believe this is how it will play out

This has been mentioned a few times in this thread.

I’m not convinced interest rates will be arbitrarily lowered with a hot economy, rebounding inflation, low unemployment, QT still unwinding the fed balance sheet, falling tax receipts, and record treasury issuance.

The cases for lower interest rates are not what many would consider a tailwind for RE prices: eg. rising/higher unemployment.

 

[LargeOrangeFont]

This has been mentioned a few times in this thread.

I’m not convinced interest rates will be arbitrarily lowered with a hot economy, rebounding inflation, low unemployment, QT still unwinding the fed balance sheet, falling tax receipts, and record treasury issuance.

The cases for lower interest rates are not what many would consider a tailwind for RE prices: eg. rising/higher unemployment.

This. The past 12 years was not normal.

 

[Boozer]

Exactly. I love it when people talk about how they bought a house with a super high interest rate. They forget to tell the rest of the story.

In 1990 you could buy a house for under $100K with a 9% interest rate, the median income was $50K a year. Today, that same house will cost you $600K+ with a 7% interest rate, the median income today is $70K.

Let’s also not forget that in 1990 you could buy a new car for under $10K. The modern version of that same car will cost you $30K+ today.

This stuff doesn’t add up and this is not sustainable with current interest rates.

 

[77charger]

In 1990 you could buy a house for under $100K with a 9% interest rate, the median income was $50K a year. Today, that same house will cost you $600K+ with a 7% interest rate, the median income today is $70K.

Let’s also not forget that in 1990 you could buy a new car for under $10K. The modern version of that same car will cost you $30K+ today.

This stuff doesn’t add up and this is not sustainable with current interest rates.

Still gets me today how it doesnt add up but theres are ones buying, others 3-4k rents, 800 a month auto payments, recreation money and so on.sure money is being made some are making crazy money others no so much and the in betweens are fading away.

But was watching news here in phx and they were talking how evictions are way up.

 

[Raffit78]

So since this thread started I've bought and sold 3 to 4 properties. Here is another as of Wednesday.

Bought this in Rialto for 360k a couple of months ago, dumped some money into it, listed it Thursday,

534 N Lamarr St, Rialto, CA 92376 | Zillow

534 N Lamarr St, Rialto CA, is a Single Family home that contains 1435 sq ft and was built in 1977.It contains 4 bedrooms and 2 bathrooms.This home last sold for $570,000 in October 2023. The Rent Zestimate for this Single Family is $2,816/mo, which has decreased by $10/mo in the last 30 days.

www.zillow.com

We have had showings every hour, appointments are still coming in and we have received 2 full price offers and 1 above ask.

 

[mesquito_creek]

“Time in the market beats market timing every time.”…. W.B.

 

[Boatymcboatface]

So since this thread started I've bought and sold 3 to 4 properties. Here is another as of Wednesday.

Bought this in Rialto for 360k a couple of months ago, dumped some money into it, listed it Thursday,

534 N Lamarr St, Rialto, CA 92376 | Zillow

534 N Lamarr St, Rialto CA, is a Single Family home that contains 1435 sq ft and was built in 1977.It contains 4 bedrooms and 2 bathrooms.This home last sold for $570,000 in October 2023. The Rent Zestimate for this Single Family is $2,816/mo, which has decreased by $10/mo in the last 30 days.

www.zillow.com

We have had showings every hour, appointments are still coming in and we have received 2 full price offers and 1 above ask.
View attachment 1281058

When friends come to stay from out of town they have a great place to stay down the street!

 

[ChumpChange]

Intellectual dishonesty has become the norm to grandstand and attempt to prove an invalid point

I’m going to be using this comment a lot.

 

[zhandfull]

So since this thread started I've bought and sold 3 to 4 properties. Here is another as of Wednesday.

Bought this in Rialto for 360k a couple of months ago, dumped some money into it, listed it Thursday,

534 N Lamarr St, Rialto, CA 92376 | Zillow

534 N Lamarr St, Rialto CA, is a Single Family home that contains 1435 sq ft and was built in 1977.It contains 4 bedrooms and 2 bathrooms.This home last sold for $570,000 in October 2023. The Rent Zestimate for this Single Family is $2,816/mo, which has decreased by $10/mo in the last 30 days.

www.zillow.com

We have had showings every hour, appointments are still coming in and we have received 2 full price offers and 1 above ask.
View attachment 1281058

Nice job!

 

[angiebaby]

Doom and gloom huh? Our sold Sunday. 3 over asking prices on day 2 of listing
Rates on new are mid 6s. (Which is fine, refinance over and over to get down. Just like we did before)
Our 1st house was 11%.

The market is fine. I'm living it right now. If your not, well maybe don't watch social media for a bit.
We will survive.

That's awesome! Congratulations!

 

[regor]

"The Outlook Is Dismal" - Dallas Fed Surveys Signal Stagflation Threat In September​

"We do not believe the Fed has navigated a soft landing..."

TUE SEP 26, AT 7:55 AM

 

[HNL2LHC]

"The Outlook Is Dismal" - Dallas Fed Surveys Signal Stagflation Threat In September​

"We do not believe the Fed has navigated a soft landing..."

TUE SEP 26, AT 7:55 AM

So a tighter grip is now being recommended?

 

[Brokeboatin221]

Everything is fine…. -Joe Biden

 

[Beerme]

I'm not in the business, but I do walk the neighborhoods frequently so that I don't have a heart attack . Over the past few years the wife and I would rarely see any for sale signs. Over the last 6 months i've seen many signs go up and stay much longer than they use to. In addition, we've been noticing several houses go unkept to point where I would suspect maybe they are losing them?

 

[Englewood]

So a tighter grip is now being recommended?

Should've been a tighter grip a year ago when it was out of control. This 1/2 point BS was never gonna get ahead of inflation.

 

[RiverDave]

So since this thread started I've bought and sold 3 to 4 properties. Here is another as of Wednesday.

Bought this in Rialto for 360k a couple of months ago, dumped some money into it, listed it Thursday,

534 N Lamarr St, Rialto, CA 92376 | Zillow

534 N Lamarr St, Rialto CA, is a Single Family home that contains 1435 sq ft and was built in 1977.It contains 4 bedrooms and 2 bathrooms.This home last sold for $570,000 in October 2023. The Rent Zestimate for this Single Family is $2,816/mo, which has decreased by $10/mo in the last 30 days.

www.zillow.com

We have had showings every hour, appointments are still coming in and we have received 2 full price offers and 1 above ask.
View attachment 1281058

I shoulda deleted this thread when it started.. all it did was cost pretty much everyone a bunch of money.

I suspect things are turning a bit now. And they will all say “see I told ya so”!

Only problem is according to the market index in Havasu list prices of Havasu have actually increased since last month.

 

[Wedgy]

Supply and Demand

 

[mesquito_creek]

I shoulda deleted this thread when it started.. all it did was cost pretty much everyone a bunch of money.

Based on this statement, all I heard was you have declared a winner! Rock on and lock, but don’t delete!!! Haha….

 

[RiverDave]

Supply and Demand

Problem is there is actually more houses on the market in Havasu month to month.. but the prices are increasing as well?

I think a lot of these guys are just shooting for the moon and hoping to get it. Days on market is increasing month after month as well... as well as median rent in LHC.

RD

 

[cofooter]

I shoulda deleted this thread when it started.. all it did was cost pretty much everyone a bunch of money.

I suspect things are turning a bit now. And they will all say “see I told ya so”!

Only problem is according to the market index in Havasu list prices of Havasu have actually increased since last month.

You are assuming people go to RDP for investing advice. It's just cheap entertainment!

 

[regor]

Problem is there is actually more houses on the market in Havasu month to month.. but the prices are increasing as well?

I think a lot of these guys are just shooting for the moon and hoping to get it. Days on market is increasing month after month as well... as well as median rent in LHC.

RD

Inflation is a bitch, it cuts both ways.

 

[LargeOrangeFont]

You are assuming people go to RDP for investing advice. It's just cheap entertainment!

Some people do come here for investing advice and believed some of this crap.

 

[hallett21]

Some people do come here for investing advice and believed some of this crap.

Not to mention I’d bet there’s been a 3:2 or 2:1 ratio of people calling for a crash outside of RDP.

 

[RiverDave]

You are assuming people go to RDP for investing advice. It's just cheap entertainment!

You would be very surprised at the number of people watching this thread and making decisions based off of it.

RD

 

[kurtis500]

I shoulda deleted this thread when it started.. all it did was cost pretty much everyone a bunch of money.

I suspect things are turning a bit now. And they will all say “see I told ya so”!

Only problem is according to the market index in Havasu list prices of Havasu have actually increased since last month.

If i remember right you do real estate? When you say turning do you mean inventory is sitting longer? Or....

I looked at a house in north scottsdale 2 weeks ago and the agent said it was the first short sale she has seen in 10 years. Not sure if that indicates anything but its interesting.

 

[EmpirE231]

If people are making 500k-1M dollar decisions based on this thread, they probably shouldn’t be making those decisions lol.