Some context for the changing market

[Leo R.]

We're all aware of the changes the market has experienced in the last 6 or so months in terms of the numbers (higher rates, more days on market, etc.) ...but these numbers don't always convey the on-the-ground realities of how much the market has shifted--and, being the unrepentant real estate nerd that I am, I wanted to dig into this a bit...

Here's an interesting and useful exercise I just completed:  Imagine you're trying to buy your first home, and you have a particular monthly payment amount that you can afford. Take that monthly payment amount, and look at the type of property that payment would have bought you 6 months ago, versus what type of property it buys you today. You may be surprised at how radically different those two properties are (I was definitely surprised).

For instance, before the rate hikes, a mortgage payment of $3k per month put you in the lap of luxury in my city--A and B class properties in the best A and B class neighborhoods in the city were attainable (think: beautiful tree-lined streets, trendy bars and restaurants nearby, the best school districts in the city, residents with some of the highest income in the city, etc., etc.) . 

Today, a mortgage payment of $3k per month puts you in some of the WORST neighborhoods in my city! (think: a semi-industrial area right next to an interstate or 4 lane highway, unattractive urban sprawl, high crime, some of the worst school districts in the city, etc.) ....This is a pretty profound shift in a very short period of time!

We're all aware that our purchasing power has decreased recently, but looking at the actual properties people can afford now versus 6 months ago really puts it into perspective!  

I'm interested to hear if other folks have observed similarly radical shifts in their own markets?

I'd be particularly interested to hear what agents have observed in terms of what type of property a budget of X bought clients 6 months ago, versus what type of property that same budget buys today...