Real Estate Agent · Bentonville, AR · Member since 2021 · 17 posts · 23 votes
As all of us know the rates dropping for 2024 have had your average realtor and lender running to facebook to post about how great 2024 is going to be.
I happen to be in the other boat... if you take the same amount of inventory then drop the rates its a recipe for another real estate frenzy.
If you pair the dropping of the rates and same amount of inventory with letting the population get used to 6-7% rates then drop them back in the 5's the market will be flooded with buyers again.
The time to get your deals as investors is now not in the spring or summer of 2024. Thats why me and my investors have been buying the last year. If you can make something work now with current rates you can for sure make it work down the road.
I say all of this knowing that you can find deals in ANY market... But I would love to know what you all are thinking. I would love opposing outlooks that yall may have. What do we think?
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
If rates are dropped into the mid to low 5s, we're in a recession. That completely destroys your demand thought process.
If rates drop even lower than that, then locked-in rate holders are going to become amenable to selling. So we just hit demand hard and now are increasing supply. We already knew supply was limited, but now it's increasing. What does that do to prices?
All of this is local & regional, but for sure we know the RTP and affordability crisis are probably at their worst points. This will tighten, undoubtedly.
There are always going to be people buying real estate for different reasons regardless of interest rates. We don't know what the rates will do (other than they won't be the record low rates we've had for the last ~10 years). If you find a place where the numbers make sense, buy it.
People buying for their personal residence are going to have enough for a down payment and be approved for mortgages-there are always people who seem to find money to do that regardless of prices or rates. I'm in Canada and where I am, reasonably priced homes are still selling pretty quickly.
It's pretty certain in high degree accuracy 30YFRM would be between 5 to 6% until 2028, that one was given and no longer a surprise. Price nationwide just keep going higher at least following CPI number.
I have mortgage from my CU that was very unique where I can re-use the same mortgage and payment even if I move to different house/sell previous one, so the rate is following me.
great points. if you just read headlines you'd think everyone in the US rented. and yet... the homeownership rate is about what it was in 1980. up from 1989, down from the all time high in 2005, and up from a recent low in 2016. we decide what "affordability" is and then buyers defy it.
Rates going up 30bps yesterday after 10 year is spiking up hahaha all those because of the fake job numbers ! LOL rate going to 7 handle again. Market sucks and really very different than reality.
If you pair the dropping of the rates and same amount of inventory with letting the population get used to 6-7% rates then drop them back in the 5's the market will be flooded with buyers again.
100% agree here. To much cash on the sidelines to expect a huge drop in the near future IMHO
Cash on the sidelines isn't going to get invested in residential RE. The cash that is going to get invested in residential RE is already employed by buying properties with limited to no leverage. If cash on the sidelines comes into RE-- it's cause there is a crash or a massive correction.
Cash will be getting progressively tied up in debt funds, small cap growth opportunities, international investing, basic S&P and some held for a short-term debt basis to enter CRE.
You think everyone just stock piles cash for RE? Come on, the smart money is betting on a dip or if no dip you lock in high yield debt funds at the turn of the rates and investing in small cap areas that need to tighten to the large cap ratio wise. The American market isn't strictly RE driven, there is so much amiss when we think cash on the sidelines is coming into residential RE.
See bold. With a rate cut imminent in Sep24, despite my preference for there not to be the pivot has started in the equity market now. We expected once in Mar24 or May 24, so I was expecting it earlier but seems like the Fed is marinating this Sep24 cut. Which is so stupid it should be Nov24 or Dec 24 but they don't listen to little ole me.
Winter will be the trenches for the markets that need more correction, they'll see a true crash. Aforementioned, SW FL is one victim and likely Austin too. Despite that, Austin is still arguably the greatest city in America and I see this as opportunity.
I think the two last days has been a small effort into the small cap from large cap, debt fund allocation. The stronger presence will be post rate cut. And after that hard asset correction.