Housing crash deniers ???

Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions.

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct.

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Greg ScottPro Member

Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes

The market may correct, but I firmly believe there won't be a crash. The reason is simple, equity.

Before 2008 people with no income could get liars loans and buy much more real estate than they could afford. We heard stories of cleaning ladies buying multiple million dollar homes. When home prices starting falling, the whole thing collapses like a house of cards because nobody had any equity. They couldn't sell and get out. We had cascading foreclosures creating a downward spiral.

Recently, prices have been surging. Given the laws passed after the Great Recession, appraisals and lending is highly restricted. Appraisals have not been keeping up with prices and lenders won't lend above appraised value. We sold a house in 2021 and in one day had 20 offers. Several of them had acceleration clauses stating they would pay more than anyone else up to $X. Both of them waived any financing contingency because they KNEW the house wouldn't appraise for what they were offering. They had to make up the difference with cash. Those people have a ton of equity in their homes. If they had to sell, they might take a haircut, but they aren't going to get foreclosed.

There is no house of cards here to come tumbling down.

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Alex Hochberger
Member since 2022 · 49 posts · 46 votes
4y
Quote from @Christopher Warren:

Quote from @Alex Hochberger:

A correction is a 10% decline in a market.
A bear market is a 20% decline in a market.
A crash is sudden and abrupt.
Thank you Alex! We have to keep things in proper perspective. A correction is taking place in a lot of markets right now. Does not mean that the bottom is about to fall out.
A correction (or even a bear market) should be welcome news for investors who are looking to jump in.

There is a HUGE gap between "the market is crashing for the 3rd time ever" and "there is a housing correction going on, with some markets entering bear territory)"
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Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

3) 40% of homeowners own their houses free-and-clear and another 30% or so locked in 30-year fixed rates in the 3-4% rate and are unlikely to sell or let their houses go to foreclosure for the next 20 years. I don't see much room for a crash with those stats alone.
>>>
This has been discussed before. If #3 is true, then we would not see an increase in active inventory.
See housing market and equity market works in a similar fashion. The market needs liquidity. Liquidity comes from the buyer.

Currently, 100% of market in US has a negative YoY of new listing. Good, the theory is right. BUT. for those who has to sell, they don't see enough buyer so in about 75% of the market, there's positive increase in active inventory. Literally we have more seller than buyer.

Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

That's an interesting idea, problem is how do you know the actual # of buyers in a market? How do you know if it's growing, declining?
I think the only way to get any read on such is using listing times, % of listing to pending. That will show the velocity and velocity is a reflection of buyer volume.
Would be a great metric to have of "buyer vectoring". Very interesting. I wonder how MLS data could be utilized to build this.....

Here's more data so we have a complete picture :
January 2022
Active Inventory YoY -31%
New Listing YoY -8%

May 2022
Active Inventory YoY 10%
New Listing YoY 4%
(Most inventories increased in Austin, Phoenix and Florida)
August 2022
Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

Bottomline: there's a crack in the housing market STARTING from May 2022 as there are more sellers than buyers.
If we want to make a balanced market where # of buyers equal to #seller, the mortgage rate has to adjust to March-April 2022 timeframe.

This is from aggregated MLS data James. I found this is the easiest method to check the balance between # buyer and seller.
So the bold is interesting. I would have assumed, and maybe it happen in May, but that Califronia has the most inventory increase. PHX isn't surprising to me at all nor Texas.

That August data are you able to see Cali/AZ and maybe Washington? Those 3 states have particularly been hit and seeing valuation changes last 3 months. IF the inventory isn't coming from there (well PHX is one) but if CA isn't driving up inventory are people coming off market and/or still selling.

Found this for LA County: https://fred.stlouisfed.org/se...
LA county has the largest houses in the state. Inventory regressed to July 2020.

It seems the trends are the same, the leak in the housing market started in April-May 2022.
We really need to adjust mortgage rate to April's rate to bring back the liquidity.

If we remain 7% too long there's potential for GFC-like crisis.
This pretty much sums everything up right here. The longer rates stay high, the more damage is done.

For Cali sure. And some of the other states like AZ, Washington, parts of Oregon. I'm not sure if SLC has shifted yet but I'm sure it will also given that it's silicon sloped and had some pretty big run ups also. I expected to see that it's why I asked. Look at markets east coast. There are a lot of variations across country. Cali alone has the population and median values to shift the national median in a big way (08 FL, AZ, CA and just LAS Vegas caused a massive amount of shifts in the median values).
Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
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Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

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Michael Wooldridge
Member since 2022 · 485 posts · 216 votes
4y
Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

3) 40% of homeowners own their houses free-and-clear and another 30% or so locked in 30-year fixed rates in the 3-4% rate and are unlikely to sell or let their houses go to foreclosure for the next 20 years. I don't see much room for a crash with those stats alone.
>>>
This has been discussed before. If #3 is true, then we would not see an increase in active inventory.
See housing market and equity market works in a similar fashion. The market needs liquidity. Liquidity comes from the buyer.

Currently, 100% of market in US has a negative YoY of new listing. Good, the theory is right. BUT. for those who has to sell, they don't see enough buyer so in about 75% of the market, there's positive increase in active inventory. Literally we have more seller than buyer.

Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

That's an interesting idea, problem is how do you know the actual # of buyers in a market? How do you know if it's growing, declining?
I think the only way to get any read on such is using listing times, % of listing to pending. That will show the velocity and velocity is a reflection of buyer volume.
Would be a great metric to have of "buyer vectoring". Very interesting. I wonder how MLS data could be utilized to build this.....

Here's more data so we have a complete picture :
January 2022
Active Inventory YoY -31%
New Listing YoY -8%

May 2022
Active Inventory YoY 10%
New Listing YoY 4%
(Most inventories increased in Austin, Phoenix and Florida)
August 2022
Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

Bottomline: there's a crack in the housing market STARTING from May 2022 as there are more sellers than buyers.
If we want to make a balanced market where # of buyers equal to #seller, the mortgage rate has to adjust to March-April 2022 timeframe.

This is from aggregated MLS data James. I found this is the easiest method to check the balance between # buyer and seller.
So the bold is interesting. I would have assumed, and maybe it happen in May, but that Califronia has the most inventory increase. PHX isn't surprising to me at all nor Texas.

That August data are you able to see Cali/AZ and maybe Washington? Those 3 states have particularly been hit and seeing valuation changes last 3 months. IF the inventory isn't coming from there (well PHX is one) but if CA isn't driving up inventory are people coming off market and/or still selling.

Found this for LA County: https://fred.stlouisfed.org/se...
LA county has the largest houses in the state. Inventory regressed to July 2020.

It seems the trends are the same, the leak in the housing market started in April-May 2022.
We really need to adjust mortgage rate to April's rate to bring back the liquidity.

If we remain 7% too long there's potential for GFC-like crisis.
This pretty much sums everything up right here. The longer rates stay high, the more damage is done.

For Cali sure. And some of the other states like AZ, Washington, parts of Oregon. I'm not sure if SLC has shifted yet but I'm sure it will also given that it's silicon sloped and had some pretty big run ups also. I expected to see that it's why I asked. Look at markets east coast. There are a lot of variations across country. Cali alone has the population and median values to shift the national median in a big way (08 FL, AZ, CA and just LAS Vegas caused a massive amount of shifts in the median values).
Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.

So we obviously need more than a few. I will say this though. Now would be the time to potentially panic/sell. You can still get reasonably high.

Long term though I still don't see it. It will be people forced to move. Rates are too high, you are literally going to have people who have $500k homes with payments the same as $750k home - and that's if they can put down the same 20%. There just won't be a reason for people to move unless they have to.

Inventory is up but still low. I'd love to see how many homes are being pulled off the market in last 60 days without a contract. August/September should be very telling to the whole scheme.
Also Florida - if enough homes were damage might keep inventory/prices level on it's own with this past hurricane.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

I think personally as it relates to Texas with sky high property tax's and now rates up not shocking to see high end homes with price reductions.
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Michael Wooldridge
Member since 2022 · 485 posts · 216 votes
4y
Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

So this is a good example. you mentioned they are worth a little over a million. They listed $1.4 million at the start of August. Even with the inflated prices was that price higher than the area i.e they were really trending at 1.15 or so?

Without any real details to that home the comps etc it's impossible to tell. But that just looks like somebody that tried to continue with the inflated price routine as things shifted. It's sort of what happened with my house. They were far too high in July / August. And then by the time they changed people paused in September. I hit them with under 5% and with the rates shifting they took it. Had they had the list price in September there in july they would have sold. They got greedy.

I have no comps and no comparables just going off the little you said.
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Michael Wooldridge
Member since 2022 · 485 posts · 216 votes
4y
Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

I think personally as it relates to Texas with sky high property tax's and now rates up not shocking to see high end homes with price reductions.

Maybe but NYC has literally not budgeted nor has much of the Northeast so far. And we've had both and higher. Granted that is to date.
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Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

3) 40% of homeowners own their houses free-and-clear and another 30% or so locked in 30-year fixed rates in the 3-4% rate and are unlikely to sell or let their houses go to foreclosure for the next 20 years. I don't see much room for a crash with those stats alone.
>>>
This has been discussed before. If #3 is true, then we would not see an increase in active inventory.
See housing market and equity market works in a similar fashion. The market needs liquidity. Liquidity comes from the buyer.

Currently, 100% of market in US has a negative YoY of new listing. Good, the theory is right. BUT. for those who has to sell, they don't see enough buyer so in about 75% of the market, there's positive increase in active inventory. Literally we have more seller than buyer.

Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

That's an interesting idea, problem is how do you know the actual # of buyers in a market? How do you know if it's growing, declining?
I think the only way to get any read on such is using listing times, % of listing to pending. That will show the velocity and velocity is a reflection of buyer volume.
Would be a great metric to have of "buyer vectoring". Very interesting. I wonder how MLS data could be utilized to build this.....

Here's more data so we have a complete picture :
January 2022
Active Inventory YoY -31%
New Listing YoY -8%

May 2022
Active Inventory YoY 10%
New Listing YoY 4%
(Most inventories increased in Austin, Phoenix and Florida)
August 2022
Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

Bottomline: there's a crack in the housing market STARTING from May 2022 as there are more sellers than buyers.
If we want to make a balanced market where # of buyers equal to #seller, the mortgage rate has to adjust to March-April 2022 timeframe.

This is from aggregated MLS data James. I found this is the easiest method to check the balance between # buyer and seller.
So the bold is interesting. I would have assumed, and maybe it happen in May, but that Califronia has the most inventory increase. PHX isn't surprising to me at all nor Texas.

That August data are you able to see Cali/AZ and maybe Washington? Those 3 states have particularly been hit and seeing valuation changes last 3 months. IF the inventory isn't coming from there (well PHX is one) but if CA isn't driving up inventory are people coming off market and/or still selling.

Found this for LA County: https://fred.stlouisfed.org/se...
LA county has the largest houses in the state. Inventory regressed to July 2020.

It seems the trends are the same, the leak in the housing market started in April-May 2022.
We really need to adjust mortgage rate to April's rate to bring back the liquidity.

If we remain 7% too long there's potential for GFC-like crisis.
This pretty much sums everything up right here. The longer rates stay high, the more damage is done.

For Cali sure. And some of the other states like AZ, Washington, parts of Oregon. I'm not sure if SLC has shifted yet but I'm sure it will also given that it's silicon sloped and had some pretty big run ups also. I expected to see that it's why I asked. Look at markets east coast. There are a lot of variations across country. Cali alone has the population and median values to shift the national median in a big way (08 FL, AZ, CA and just LAS Vegas caused a massive amount of shifts in the median values).
Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.

So we obviously need more than a few. I will say this though. Now would be the time to potentially panic/sell. You can still get reasonably high.

Long term though I still don't see it. It will be people forced to move. Rates are too high, you are literally going to have people who have $500k homes with payments the same as $750k home - and that's if they can put down the same 20%. There just won't be a reason for people to move unless they have to.

Inventory is up but still low. I'd love to see how many homes are being pulled off the market in last 60 days without a contract. August/September should be very telling to the whole scheme.
Also Florida - if enough homes were damage might keep inventory/prices level on it's own with this past hurricane.
There are definitely more than a few. These are just a couple that I though I'd share. Price drops are happening almost across the board in this market.
I agree re: people not moving unless forced. But that's a big reason why a lot of people have always sold. Most people aren't RE investors and always aspiring to get a bigger/ better house. Many folks are content to live in a single home their whole life.
It's the life circumstances that cause a lot of people to sell... a death in the family, divorce, health, lost a job, etc., etc. Those circumstances don't care about the housing market, the rates, or the economy. They come when they come.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
For what it's worth......We get quarterly updates (from Redfin/Trulia/Etc) re home value on a house we sold (San Diego County) about 2-1/2 years ago.
At it's peak it was 'valued' at $1,050,000. This was approx a year ago.
Today's email had it at $935,163. That's over $100k less in about a year.
Now we don't know about their metrics, or even if they're accurate, but it shows a 10% drop in value in a major housing market.
Take this for what it's worth......
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
4y
Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

3) 40% of homeowners own their houses free-and-clear and another 30% or so locked in 30-year fixed rates in the 3-4% rate and are unlikely to sell or let their houses go to foreclosure for the next 20 years. I don't see much room for a crash with those stats alone.
>>>
This has been discussed before. If #3 is true, then we would not see an increase in active inventory.
See housing market and equity market works in a similar fashion. The market needs liquidity. Liquidity comes from the buyer.

Currently, 100% of market in US has a negative YoY of new listing. Good, the theory is right. BUT. for those who has to sell, they don't see enough buyer so in about 75% of the market, there's positive increase in active inventory. Literally we have more seller than buyer.

Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

That's an interesting idea, problem is how do you know the actual # of buyers in a market? How do you know if it's growing, declining?
I think the only way to get any read on such is using listing times, % of listing to pending. That will show the velocity and velocity is a reflection of buyer volume.
Would be a great metric to have of "buyer vectoring". Very interesting. I wonder how MLS data could be utilized to build this.....

Here's more data so we have a complete picture :
January 2022
Active Inventory YoY -31%
New Listing YoY -8%

May 2022
Active Inventory YoY 10%
New Listing YoY 4%
(Most inventories increased in Austin, Phoenix and Florida)
August 2022
Active Inventory increases by 25% YoY.
New Listing decreased by -10% YoY.

Bottomline: there's a crack in the housing market STARTING from May 2022 as there are more sellers than buyers.
If we want to make a balanced market where # of buyers equal to #seller, the mortgage rate has to adjust to March-April 2022 timeframe.

This is from aggregated MLS data James. I found this is the easiest method to check the balance between # buyer and seller.
So the bold is interesting. I would have assumed, and maybe it happen in May, but that Califronia has the most inventory increase. PHX isn't surprising to me at all nor Texas.

That August data are you able to see Cali/AZ and maybe Washington? Those 3 states have particularly been hit and seeing valuation changes last 3 months. IF the inventory isn't coming from there (well PHX is one) but if CA isn't driving up inventory are people coming off market and/or still selling.

Found this for LA County: https://fred.stlouisfed.org/se...
LA county has the largest houses in the state. Inventory regressed to July 2020.

It seems the trends are the same, the leak in the housing market started in April-May 2022.
We really need to adjust mortgage rate to April's rate to bring back the liquidity.

If we remain 7% too long there's potential for GFC-like crisis.
This pretty much sums everything up right here. The longer rates stay high, the more damage is done.

For Cali sure. And some of the other states like AZ, Washington, parts of Oregon. I'm not sure if SLC has shifted yet but I'm sure it will also given that it's silicon sloped and had some pretty big run ups also. I expected to see that it's why I asked. Look at markets east coast. There are a lot of variations across country. Cali alone has the population and median values to shift the national median in a big way (08 FL, AZ, CA and just LAS Vegas caused a massive amount of shifts in the median values).
Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.

So we obviously need more than a few. I will say this though. Now would be the time to potentially panic/sell. You can still get reasonably high.

Long term though I still don't see it. It will be people forced to move. Rates are too high, you are literally going to have people who have $500k homes with payments the same as $750k home - and that's if they can put down the same 20%. There just won't be a reason for people to move unless they have to.

Inventory is up but still low. I'd love to see how many homes are being pulled off the market in last 60 days without a contract. August/September should be very telling to the whole scheme.
Also Florida - if enough homes were damage might keep inventory/prices level on it's own with this past hurricane.
There are definitely more than a few. These are just a couple that I though I'd share. Price drops are happening almost across the board in this market.
I agree re: people not moving unless forced. But that's a big reason why a lot of people have always sold. Most people aren't RE investors and always aspiring to get a bigger/ better house. Many folks are content to live in a single home their whole life.
It's the life circumstances that cause a lot of people to sell... a death in the family, divorce, health, lost a job, etc., etc. Those circumstances don't care about the housing market, the rates, or the economy. They come when they come.

I think the average is 8 years or something like that for length of residency for SFR's but your right there are a myriad of reasons why people want/need to sell and those reasons in the SFR space rarely align with the reasons investors want or need to sell.
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Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Quote from @Michael Wooldridge:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

I think personally as it relates to Texas with sky high property tax's and now rates up not shocking to see high end homes with price reductions.

Maybe but NYC has literally not budgeted nor has much of the Northeast so far. And we've had both and higher. Granted that is to date.
NYC is a completely different market and isn't at all analogous to an area like DFW. Big difference between a condo in lower Manhattan and a 1.5 acre 5,500 sqft estate in Heath TX. For one, there is virtually no new properties available in NYC. By and far, the same amount of inventory continues to circulate amongst everyone in the city. In TX there's plenty of development and even more land.
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Zack Gill
Dallas, TX · Member since 2019 · 36 posts · 3 votes
4y
I believe it, even in my area of Plano (~400-500 price range) I've seen houses starting to sit for a while and have to reduce price. That didn't happen 6 mths ago.
0
Topic locked
Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

So this is a good example. you mentioned they are worth a little over a million. They listed $1.4 million at the start of August. Even with the inflated prices was that price higher than the area i.e they were really trending at 1.15 or so?

Without any real details to that home the comps etc it's impossible to tell. But that just looks like somebody that tried to continue with the inflated price routine as things shifted. It's sort of what happened with my house. They were far too high in July / August. And then by the time they changed people paused in September. I hit them with under 5% and with the rates shifting they took it. Had they had the list price in September there in july they would have sold. They got greedy.

I have no comps and no comparables just going off the little you said.

There's a ton of variables in home prices. On average homes in the area sell for about $1m, but there are definitely larger & nicer homes that go well beyond that. Some of these estates are 4,000-4,500 sqft, others are north of 6,000. Plus high end finishes and things like pools and other features can impact price significantly.

But I do agree, the home looks like it was priced for a sale about 6-10 months ago, which obviously isn't going to happen anymore, hence the big drop in price.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
4y
Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.
1
Topic locked
John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
4y
Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.
Was this happening in sept Oct of 2020/2021? Also case Schiller seasonally adjusts, so I don’t buy this argument.
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Topic locked
Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Here's another example of the stupidity of the bubble. House sold in 2016 for mid 400's. Listed March 2021 for $750k, listing removed a few days later. Listed in April 2021 for $1.1m. Greed, stupidity?
After several price drops they got someone in contract in June 2022 when listing was at $950k, but that deal fell apart. Now, they're back on the market listed for $899k.
Not sure if it was the seller or the realtor, but someone really dropped the ball. This home would have easily sold in April 2021 for mid-to-high 900's. At this point they're either going to have to take it off the market and hold/ rent, or accept something in the mid-high 700's if they really want to sell.

1
Topic locked
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
4y
Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.
Was this happening in sept Oct of 2020/2021? Also case Schiller seasonally adjusts, so I don’t buy this argument.

No, which was news at the time, because the markets were so bonkers crazy in 20/21 that it blew straight through seasonal market adjustments and just kept running wild. If you've decided to use 20/21 markets as baseline let me help you save time and say 99.8% of markets for rest of eternity will be a "down" market in comparison.
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Topic locked
Michael Wooldridge
Member since 2022 · 485 posts · 216 votes
4y
Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @Jay Hinrichs:

Quote from @Greg R.:

Quote from @Greg R.:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @James Hamling:

Seems that DFW values are starting to dip pretty fast. From what I'm seeing on the ground, this is mainly impacting mid-to-high level homes at this point, which is expected. Lower priced homes in the $300-400k range still have plenty of buyers.
One home I came across yesterday is in Rockwall, TX. This is a very nice neighborhood, and most houses go for +/- 1m.
The property I'm referring to just slashed the price by 76k, in what appears to be an act of desperation to sell the house. As these listings hang for longer and longer, sellers are getting anxious. How bad will rates get? Can they reach 8, 9, 10, more? Seems that this seller is thinking, "I'd be better off getting 750-800k now, than 600-650k in six months."

I know Zillow estimates are not scientific, but even their estimated value of this home is showing a huge drop down of about 200k from the peak.

I'm starting to see more and more of these kinds of listings out there. In my opinion we're going to see a lot more of this in high-migration areas such as TX, FL, AZ, TN, etc. People flooded to these locations when given the freedom to work remote. When mass amounts of people started flooding in w/ $ from their sold home or cheap $, the inventory quickly dried up and prices shot through the roof.
At least in the DFW area things are slowing incredibly fast. Prices are beginning to sink back down to reality and inventory is slowly increasing. Competition is not longer a concern for buyers. We still have a ways to go from my perspective, but we're definitely on that trajectory.
Here's another one I just found a couple blocks away. These higher prices homes are poised for a big drop.

I think personally as it relates to Texas with sky high property tax's and now rates up not shocking to see high end homes with price reductions.

Maybe but NYC has literally not budgeted nor has much of the Northeast so far. And we've had both and higher. Granted that is to date.
NYC is a completely different market and isn't at all analogous to an area like DFW. Big difference between a condo in lower Manhattan and a 1.5 acre 5,500 sqft estate in Heath TX. For one, there is virtually no new properties available in NYC. By and far, the same amount of inventory continues to circulate amongst everyone in the city. In TX there's plenty of development and even more land.

I agree NYC is different from certain elements but they are like the Bay Area in terms of house prices. So it's definitely comparable to some aspects.

Also the rest of the areas like NJ, PA are still moving along. Sitting a few days longer, lot more cash deals but still plenty of movement. For now anyway, I completely expect this to turn and drop 10% or so in the next year.
As to the development piece in TX, judging by starts/permits everywhere I expect that's not really happening now or far more selectively. And that's sort of the core point builders have just pulled back so hard and so fast. Inventory is low while I see the drop I just don't see that push. Hell we all know if people would adjust zoning and a few other items we could absolutely solve a lot of these issues - especially in the Northeast - but there isn't a desire to do that and sort of create a push on the price.

Anyway we all just guessing. And I absolutely see this shift in the market 15% is sort of what I'm planning for. But crash, foreclosures, people upside down in mass - don't' see it. And hey if it does happen the properties I buy now will be sat on anyway since they are long term purchases and the new properties I buy will just be cheaper which helps in growing my portfolio in a different way.
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Topic locked
John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
4y
Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.
Was this happening in sept Oct of 2020/2021? Also case Schiller seasonally adjusts, so I don’t buy this argument.

No, which was news at the time, because the markets were so bonkers crazy in 20/21 that it blew straight through seasonal market adjustments and just kept running wild. If you've decided to use 20/21 markets as baseline let me help you save time and say 99.8% of markets for rest of eternity will be a "down" market in comparison.
Ok so we finally agree that housing prices are going to drop, and probably up to 20 percent at a minimum.
1
Topic locked
Greg R.
OP
Investor · Dallas, TX · Member since 2016 · 887 posts · 1k+ votes
4y
Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.
Was this happening in sept Oct of 2020/2021? Also case Schiller seasonally adjusts, so I don’t buy this argument.

No, which was news at the time, because the markets were so bonkers crazy in 20/21 that it blew straight through seasonal market adjustments and just kept running wild. If you've decided to use 20/21 markets as baseline let me help you save time and say 99.8% of markets for rest of eternity will be a "down" market in comparison.
Ok so we finally agree that housing prices are going to drop, and probably up to 20 percent at a minimum.
That's awesome. 570 replies later, but here we are!!!

And this is obviously going to vary a lot by the location, but I truly believe those hyper-inflated markets that drew the most migration over the last couple years are poised for the biggest drop.
3
Topic locked
Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
4y
The only way we have a housing crash is if loans get called and there is mass foreclosures increasing supply. Won't happen when everyone is actually qualified for loans and the loans are on low rate fixed 30 year term.

We may see a reduction in prices another 10-20% or so. Many markets including ours are already seeing sales prices 10% below comps. Rates will be higher though and cashflow same. I wouldn't wait just buy if makes sense. I just offered on another 4 unit for myself.
1
Topic locked
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
4y
Quote from @John Carbone:

Quote from @James Hamling:

Quote from @John Carbone:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.
Was this happening in sept Oct of 2020/2021? Also case Schiller seasonally adjusts, so I don’t buy this argument.

No, which was news at the time, because the markets were so bonkers crazy in 20/21 that it blew straight through seasonal market adjustments and just kept running wild. If you've decided to use 20/21 markets as baseline let me help you save time and say 99.8% of markets for rest of eternity will be a "down" market in comparison.
Ok so we finally agree that housing prices are going to drop, and probably up to 20 percent at a minimum.

OMG NO!!!!! Without doubt you win the gold medal for the twisting words Olympics, no question, champion of champions I give you that.
You were shocked there is a NORMAL seasonal adjustment in the Real Estate market for winter. Asked about 20-21 market and i confirmed, those were MAJOR deviations from the norm, which made headlines for that fact. We didn't really have a "winter" in the R.E. market in those times. Hence, the data for such is "off". CONTEXT.
Expect a MORE NORMAL real estate market. Anyone expecting a continuation of 20/21 markets, is just plain delusional.
I am keeping you on ignore setting Joe, so, feel free to distort and mislead all you want.
0
Topic locked
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Matt Kalish:

Florida market could be strong with damaged homes from the hurricane.

Here's the statistic for Mid-Florida MLS
AUG22/JUN22 __JUL22/MAY22__AUG21 MOM% YOY%
MID-FLORIDA 47K/29K______34K/21K________20K 40%/38% 36%/36%

What's interesting about Mid-Florida is, although there's a huge increase of new listing/inventory in Q2 2022.
But the same doesn't occur in Miami market. All these markets have a very bizarre pattern.

Overall, every market between Jun 22 to July 22 has an active inventory increase of about 30%, so all markets moved at the same pattern.

I really guess it's a flipper that bought in Q4 21 or Q1 22 then sell in Q2 22, but that was my speculation.

So all theories in BP that said people would not sell during an interest rate hike, may not be that accurate after all.

June-July, inventory always jumps up, it's summer break from school, hence summer home sales market. Rental activity also follows that trend. August is a season wrap up, September is where adjustments start happening in activity, October is where fall/winter market really starts hitting, November is winter market "set-in", December-Feb is the low of winter market, March things start adjusting in prepatory actions/thought, April-may is upticks in such, June, were back at it.
School sessions have a big-big impact on home sale patterns in the U.S.

Yeah I was expecting that also, so the data in Nov/Dec would be crucial. We expect the inventory to go down MoM. If not that spells trouble.
0
Topic locked
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y

Expect a MORE NORMAL real estate market. Anyone expecting a continuation of 20/21 markets, is just plain delusional.
I am keeping you on ignore setting Joe, so, feel free to distort and mislead all you want.
James, two points. You said that because, first, your market MN is following seasonal adjustment properly.
Second also, not all market are behaving the same.

Lets take a look at this three markets:
Abnormal:

nevada https://fred.stlouisfed.org/se...

Starting to be abnormal:
https://fred.stlouisfed.org/se...

Normal market:
MN: https://fred.stlouisfed.org/se...

Nevada moved to 2017-level inventory. California regressed to late 2019 inventory, but your Minnesota market is doing good, only regressed
to mid-2021 level :) .....

this is why I keep saying everyone is looking at a different lens because everyone has a different experiences.

Greg and my market feel the price reduction and active inventory increasing a lot, your market is good so far.
0
Topic locked
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
Quote from @Greg R.:
And this is obviously going to vary a lot by the location, but I truly believe those hyper-inflated markets that drew the most migration over the last couple years are poised for the biggest drop.

I have been thinking about that even before 2020. The Californian moving out everywhere is the root cause of market volatility. As they bring much higher buying power to a high liquidity market like TX and overbidding houses.

Even in 2019, the mortgage/rent ratio and mortgage/income ratio are higher in Austin compared to San Jose,CA

So those Californians that moved out actually moved to relatively more 'expensive' places.

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