Whose market is tanking?

Buying & Selling Real Estate

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Whose market is tanking?

Hai Loc

Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes

I saw a post on facebook from a realtor that her market dropped 52%

Anyone seeing drastic decline?

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

to me that's bull Sheet no market has fallen 52% in 4 weeks

there might be some distressed buys out there but a whole market falling by 50% no way

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
to me that's bull Sheet no market has fallen 52% in 4 weeks
there might be some distressed buys out there but a whole market falling by 50% no way
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y
Originally posted by @Jay Hinrichs:
to me that's bull Sheet no market has fallen 52% in 4 weeks
there might be some distressed buys out there but a whole market falling by 50% no way

Yup total ******** whoever posted that they saw that kind of drop. The stats are easy enough to check with an mls subscription.
The DC market is still a strong sellers market with a huge inventory shortage. People are still writing offers without even being able to see the properties. I just listed a property and got it under contract at 6% above list. Every offer Im writing is still multiple offer situations.
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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
6y
My guess is that the Realtor meant that the number of transactions dropped 52%, not the price of houses.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
6y
Originally posted by @Don Konipol:
My guess is that the Realtor meant that the number of transactions dropped 52%, not the price of houses.

Yep, my guess as well. My one tenant that has texted about rent trouble is an agent. No activity at all (for her) over the last couple weeks.
3 Reply
Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
6y
Hi Hai,

I think we will have to wait until the smoke (Cohiba) clears from this Corona thing before an accurate assessment can be made of what is going on.

So much is in a holding pattern right now, and we really don't know the "Crash and Burn" rate (if any) that there will be from this right now. "Crash and Burn" as far is owner occupied SFH and rentals.

There is also the unknown effect of the Federal Government working to blunt the effects as much as possible, and that could in turn, open up new possibilities that shoot will things back up. We just don't know at this time.

And to me, any numbers in the mean time, seems like just too small of a sample to base any decisions on.

Just my 2 cents.

4 Reply
Fred K.
Member since 2019 · 18 posts · 21 votes
6y
@Hai Loc
I’m starting to see price cuts and a jump in inventory. How long this will last and how much of an impact it’ll have, who knows at this point. Too soon to tell.
2 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
6y
LA Feb 20 to March 20, prices went up 5%+ and DOM decreased by 50%+ and that's just 30 days. Still looking backwards so I expect some other changes moving forward. Too early to draw out any future conclusions yet. Although it can go up while the rest go down, this has happened before.
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Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Jay Hinrichs:
to me that's bull Sheet no market has fallen 52% in 4 weeks
there might be some distressed buys out there but a whole market falling by 50% no way

Hard to imagine in such a short time frame.. Its probably her $25k listing that she ended up selling for $12,400.. Lol
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Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Don Konipol:
My guess is that the Realtor meant that the number of transactions dropped 52%, not the price of houses.

That sounds more like it..
0 Reply
Hunter Vigneault
Real Estate Agent · Boca Raton, FL · Member since 2015 · 74 posts · 57 votes
6y
As others have said, it's really too early to say that any market has tanked. I am a little surprised when I see realtors/investors who say that the market is still going strong - not sure if they mean their existing deals are still moving for now or if they are still entering into contracts. A pullback in activity, at least temporarily, should be expected. My feeling is in those posts, there is still a lot of optimism trying to will itself into reality. A slowdown can lead to a "tanked" market, but let's not jump the gun just yet.
I think it is also worth pointing out that it is hard to say "the market" tanked. If you want to say STRs did already...I'll probably give you that. I spoke with a great operator the other day who said he went from 92% occupied to 8% over two weeks. He has reserves, but my feeling is many STR operators won't and will need to get out before a significant turnaround is possible.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Hunter Vigneault:
As others have said, it's really too early to say that any market has tanked. I am a little surprised when I see realtors/investors who say that the market is still going strong - not sure if they mean their existing deals are still moving for now or if they are still entering into contracts. A pullback in activity, at least temporarily, should be expected. My feeling is in those posts, there is still a lot of optimism trying to will itself into reality. A slowdown can lead to a "tanked" market, but let's not jump the gun just yet.
I think it is also worth pointing out that it is hard to say "the market" tanked. If you want to say STRs did already...I'll probably give you that. I spoke with a great operator the other day who said he went from 92% occupied to 8% over two weeks. He has reserves, but my feeling is many STR operators won't and will need to get out before a significant turnaround is possible.
agreed on the STR those folks are going to blow through their reserves or need to put their props into LTR ASAP for a year or so then come back into the game..

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3 Reply
Dustin Ruhl
Flipper/Rehabber · Indianapolis, IN · Member since 2015 · 204 posts · 89 votes
6y
@Jay Hinrichs she probably meant her business dropped 54% and she is blaming the market instead.
2 Reply
Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Jay Hinrichs:
Originally posted by @Hunter Vigneault:
As others have said, it's really too early to say that any market has tanked. I am a little surprised when I see realtors/investors who say that the market is still going strong - not sure if they mean their existing deals are still moving for now or if they are still entering into contracts. A pullback in activity, at least temporarily, should be expected. My feeling is in those posts, there is still a lot of optimism trying to will itself into reality. A slowdown can lead to a "tanked" market, but let's not jump the gun just yet.
I think it is also worth pointing out that it is hard to say "the market" tanked. If you want to say STRs did already...I'll probably give you that. I spoke with a great operator the other day who said he went from 92% occupied to 8% over two weeks. He has reserves, but my feeling is many STR operators won't and will need to get out before a significant turnaround is possible.
agreed on the STR those folks are going to blow through their reserves or need to put their props into LTR ASAP for a year or so then come back into the game..

They need to cancel or suspend all their services.. Cable, internet, home automation, security..

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Rich Bultema
Crown Point, IN · Member since 2018 · 56 posts · 23 votes
6y
I'll chime in, my realtor called me this morning actually about a property I have listed.
She said she has received NO CALLS on her other properties since our state's stay at home order and that the only call on mine was a guy with a terrible low ball offer from a couple weeks ago that wanted to remind me that he was still interested.
Said she was looking into unemployment?? I Didn't think a REALTOR could even qualify.
She also mentioned that her boss (owner of the agency) hasn't really worked all week either. He is the kind of guy that normally works 25 hours a day. Seriously, on average, he has a closing everyday, commonly two, not to mention all the showings and paperwork but is now just sitting at home.
This lack of activity does not appear to have affected prices yet. Time will tell.
Every market might respond differently.
0 Reply

Patrice Boenzi

Real Estate Agent · Geneva, IL · Member since 2015 · 403 posts · 172 votes

It is definitely challenging times. However, in the last one I have had 3 of my under contract properties close! We are seeing that the change in FHA criteria has impacted one of our buyers and even though the house was under contract when the changes in FHA loans came into play, the buyer could not get approved as a conventional buyer. I have had two sellers postpone on me, but just had a potential seller call me today about listing their property. In Illinois, we are considered "essential", but the Illinois Department of Commerce and Economic Opportunity just added to our rules for showings: See Below. The Grand Rapids market tends to continue to be hot. My partners and I just closed on a duplex yesterday.

April 1, 2020

Illinois DCEO Says Open Houses are Not Allowed

Today, the Illinois Dept of Commerce and Economic Opportunity (DCEO) has added language pertaining to real estate as an essential service to the official DCEO guidance on Essential Businesses and Operations FAQs.

Are real estate open houses and showings permitted? According to DCEO, it depends.

Open houses are not permitted.
Showings of occupied rental properties are not permitted.
Showings of vacant or owner-occupied units are permitted if necessary and scheduled in advance (virtual showings are preferred) but limited to no more than 4 people.
Please refer to the DCEO Essential Business & Operations FAQ (pdf).

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Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Dustin Ruhl:
@Jay Hinrichs she probably meant her business dropped 54% and she is blaming the market instead.

I think her business dropped 100%.. hehe
0 Reply
Nick Gann
Real Estate Agent · Murfreesboro, TN · Member since 2019 · 194 posts · 181 votes
6y
Middle TN still hot. But I think that is partial overestimate of what the cost of money will end up being as we move along. The virus is only part of the story. Money pumping is going to change many things.
0 Reply
Josh C.Pro Member
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
6y
If your market was 52% blackjack dealers or 52% bar tenders maybe, but that’s hyperbole in general. Indianapolis might have some down rent collection months, MIGHT, but buying and selling still happening here. The underlying factors of whatever this is called are dramatically different then the underlying factors of the GFC. That’s all anyone remembers so that’s what they think anything is. Home prices and rent levels don’t track with the stock market or Facebook posts.
0 Reply
Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y

I dont forsee any down movement in land and mobile home parks during this period..

1 Reply
Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Nick Gann:
Middle TN still hot. But I think that is partial overestimate of what the cost of money will end up being as we move along. The virus is only part of the story. Money pumping is going to change many things.

Isn't Nashville a large hub for short term rental? That market didn't get impacted at all?
0 Reply
Hai Loc
OP
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Rich Bultema:
I'll chime in, my realtor called me this morning actually about a property I have listed.
She said she has received NO CALLS on her other properties since our state's stay at home order and that the only call on mine was a guy with a terrible low ball offer from a couple weeks ago that wanted to remind me that he was still interested.
Said she was looking into unemployment?? I Didn't think a REALTOR could even qualify.
She also mentioned that her boss (owner of the agency) hasn't really worked all week either. He is the kind of guy that normally works 25 hours a day. Seriously, on average, he has a closing everyday, commonly two, not to mention all the showings and paperwork but is now just sitting at home.
This lack of activity does not appear to have affected prices yet. Time will tell.
Every market might respond differently.

You are way out there tho. At the edge of Chicago Metro.. it couldn't simply be a stale mate.. buyers and seller are just waiting it out
0 Reply
Eric M.
Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
6y
Originally posted by @Hai Loc:
I saw a post on facebook from a realtor that her market dropped 52%
Anyone seeing drastic decline?

I would bet this realtor is talking about number of homes sold down 52% not home prices. Realtors care about sales volume.
0 Reply
Rich Bultema
Crown Point, IN · Member since 2018 · 56 posts · 23 votes
6y
Originally posted by @Hai Loc:
Originally posted by @Rich Bultema:
I'll chime in, my realtor called me this morning actually about a property I have listed.
She said she has received NO CALLS on her other properties since our state's stay at home order and that the only call on mine was a guy with a terrible low ball offer from a couple weeks ago that wanted to remind me that he was still interested.
Said she was looking into unemployment?? I Didn't think a REALTOR could even qualify.
She also mentioned that her boss (owner of the agency) hasn't really worked all week either. He is the kind of guy that normally works 25 hours a day. Seriously, on average, he has a closing everyday, commonly two, not to mention all the showings and paperwork but is now just sitting at home.
This lack of activity does not appear to have affected prices yet. Time will tell.
Every market might respond differently.

You are way out there tho. At the edge of Chicago Metro.. it couldn't simply be a stale mate.. buyers and seller are just waiting it out

For now, it does appear to just be a waiting game. prices have not really been reduced and, im not a realtor, but as an investor, I get sent the listings and they dont seem to be increasing in volume...
but how long can a stalemate like that last before it affects values? Time will tell.
0 Reply

Rich Bultema

Crown Point, IN · Member since 2018 · 56 posts · 23 votes

Originally posted by @Patrice Boenzi:

April 1, 2020

Illinois DCEO Says Open Houses are Not Allowed

Are real estate open houses and showings permitted? According to DCEO, it depends.

Open houses are not permitted.
Showings of occupied rental properties are not permitted.
Showings of vacant or owner-occupied units are permitted if necessary and scheduled in advance (virtual showings are preferred) but limited to no more than 4 people.
Please refer to the DCEO Essential Business & Operations FAQ (pdf).

Could you elaborate on what is going on with FHA lending criteria? I just received an offer from someone looking to use FHA financing. Wanted to know what I'm up against.

0 Reply

Mikhail Abbott
Rental Property Investor · Gig Harbor, WA · Member since 2020 · 26 posts · 6 votes
6y
@Hunter Vigneault ya i agree
Forbes wrote an article on str causing the bubble to burst
https://www.forbes.com/sites/jessecolombo/2020/03/31/why-us-housing-bubble-20-is-about-to-burst/
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