Whats your opinion on recent media indicating a big crash
I know youtube is not the most reliable source for real estate news, but more than one real estate youtuber is mentioning that a big crash is coming as interest rates go up people will hold up on buying homes, there is a current stall on homes being sold and prices are slowly dropping, I live in Phx,Az and know this is one of the cities that gets hit the worst when there is a crash.
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I don't know the difference between a crash and a "big crash" but for the property I just bought "off market" in N. Phoenix, Redfin had a value of $775K a month ago and yesterday they had it at $750k - a drop of $25k - Since I bought it at $640k I'm fine, but I expect it to drop another 10% in the next 12 months.
Opendoor has about 700 properties on the MLS in the Phoenix area and I've analyzed a few, each of which they are selling for $50k to $80k less than they bought for a few months ago.
Is that indicating a "crash" or just a "correction"? I say it's a correction based on the fact that DOM is still below average and inventory hasn't reached normal levels yet. When DOM is more than 6 months, inventory is 110% or more of average and interest rates are 7% or above, things are moving to a "crash".
That is actually odd to me because I started when interest rates were 8% and climbed from there to 14% to 18%. But people kept buying houses. Today everybody is hooked on very low rates, and that is a good thing! Interest rates are just transferring your wealth to someone else, the lower the rate, the more you save. And we are years away from appreciation being a reason to invest in real estate.
But, other parts of the economy Will crash and if that bleeds over to real estate, properties will go down in price even more.
I'd keep an eye on banks, the stock market, the bond market, pension funds, energy, transportation and high tech.