Is it just my imagination or is the residential housing market here getting a little soft? Looking at the stats everything still looks good. Only a couple of worrying signs. The percent of original price didn't get quite as high as it did the previous three years which could mean buyers aren't willing to chase sellers delusions of grandeur so much anymore. The amount of homes for sale (in Collin county) has spiked significantly higher this year. Could this be all that new construction coming on line to meet demand? I remember a decade ago investors wouldn't buy in Texas because "they breed houses like rabbits". I am basing my concerning more on a gut feeling. I don't see the feeding frenzy of multiple offers when buying retail as much and I'm seeing house prices being reduced more often. Am I crazy? How does it look from where you are sitting?

for certain areas of the country I can see that 10k cap having an impact. other areas not so.. much.. I mean if you tax's are 12k a year on your personal resi and you write off 10 k but cant write off 2k I don't see that as a major deterrent. I think the one that really hurts is the no writing off tax income tax against federal.. at least for high wage earners.. and they say the tax code benefits the higher income I see it completely the opposite frankly. and I think its one reason Vegas will remain pretty viable. the over flow from CA folks who can work from home or whatever.. still 5 hour drive to LA but in a tax haven.

As it relates to Texas I think property tax's have an influence as well.. those are fixed costs that are 1 to 3X higher than other markets for similar priced properties.. and interest rates have no effect there. so add rising interest and very high property tax. that can have an impact.. I always thought the property tax situation was one of the main reasons that HIGH end lux housing there was literally 1/2 price or less than other major metros.

Dallas didnt drop as much as the coasts in 2007 because it didnt run up like the rest of the country in the years prior. DFW as a whole has been one of if not the leading job creator in the country, and there are hundred plus thousand people being added annually. from 2015 to 2016 as an example DFW added 140K people. So while it may have cooled a bit, from a smoking hot market, I think the housing market is just strong. I dont see any indication that we are on the precipice of a huge downturn in Dallas, not unless something happens nationally. And even then I think a Dallas downturn will be less volatile than the coasts because people are still moving here.

Yup no doubt there was some / is slow down in sales Q3 Q4. I was talking with Lennars head of Northwest market on Monday. We have projects next to each other.. in a few cities around Portland. He said they are having to give some incentives to get people off the fence.. they do this with Rate buy downs and closing costs.. but they are keeping their prices stable ( which you need of course for appraisal comps).. In Portland I was talking with a Lux builder and he said it appears the floor on the lux moved off of highs by 10% to get sales this fall ( he has two in contract) so 1.5 sells for 1.350.. but in those markets that all pure profit he is losing.. but still making money.. at the moment I am between projects.. I have 3 coming out of the ground this week in Inner Portland. and confident those will sell and will sell for the numbers we project simply because of location and I am building on the low end of new build pricing.. ( which seems to always sell).. these are located with one of the best walk scores in the city.. And I just sold a new build in Charleston SC.. that closes next week.. and it was on the market for about 30 days. instead of selling day one.. I started at 519k settled at 510k.. were as in the past no discount. this is a cash buyer .. we have one closing on Jan at 2.2 in Charleston historic district same thing cash buyer.. so interest rates are not affecting them.. in these uber cool markets its all about location.. for instance the 2.2 one we are the ONLY new build South of Broad in the top end historic district.. and that one never even made it to market.. ( which might have been a mistake) but when I bought the lot I was going to be happy at anything between 1.9 and 2.0 so to get 2.2 we are very happy.. nice way to start Q 1.. so that's kind of real world in my world. Also I asked the Lennar guy if they thought they would keep pace at 300 homes a year in the PDX market and that is what they are gunning for.. I meet with him end of the month they may want to buy some of my lots.. So to the fact that he wants a sit down means we still have something that others want and need and that is buildable lots.

Is the housing market cooling?

Antoine Martel

Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes

9y

From where I am sitting in Los Angeles, the market doesn't seem to be cooling. It seems like things are starting to level out here in Los Angeles. The high priced markets aren't moving any higher but other markets that are low priced are starting to get better and better as investors go in and renovate these neighborhoods.

In San Francisco, where I grew up, everything has hit its highest point and things are starting to slow down, instead of 20% price increase YOY, now there is only 5%, so thats what I mean by slowing down, or cooling.

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Edward C.

Investor · Palisades Park, NJ · Member since 2017 · 46 posts · 14 votes

9y

The rental market in parts of Northern NJ (particularly Class A/B neighborhoods) is definitely cooling. I can confirm that units are on the market a bit longer than a year ago, with owners having to lower rental expectations.

My perspective is that the supply influx of new rental units in both Manhattan/NYC and the parts of Northern NJ that I typically invest in bringing rental rates.

I don't think its an issue of a declining population or economy, but rather lot's of new units coming to market.

Is the housing market cooling?

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