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Posted over 1 year ago

A Housing Recession has arrived- Article review

This author believes the slide in home prices has started.  We are WorcesterMulti agree.

They believe a 20% decline in prices will occur due to increases in interest rates.  Since a 1% increase in interest rates is supposed to drop prices by 10% this seems reasonable to expect.

What they do say is that there is rising supply which will reduce prices.

This appears to be the case for single family homes but prices are still high.

Sellers still think their houses are worth a ton, since their neighbors got high prices for them 6 months ago.  This is slowing down the market.  

We will need prices to start dropping quickly for sellers to give up on that idea.

On the MultiFamily side we are not seeing huge increase in supply as most people can continue to rent their places and make money.

We are also not seeing big reductions in price on things we prefer to own.

We are starting to see a decrease in price in the JUNK which was selling at crazy prices over the last few years.

But now with higher interest rates it doesn't make sense to buy these places as you cannot BRRR them.  

You are much better off buying things that are done, and hoping that rates will go down in a couple years then you can refi at a better rate and make more $$$$

What we do see is that rents are holding steady for those people in good rental area and even going up.

In other areas the chatter is that tenants are not paying and there are constant pleas for help getting rid of non paying tenants.

If this keeps up, owners who bought poor condition houses on sides of hills with no parking will be trying to get rid of these.

You can only last so long with a house that needs work and tenants that don't pay, and no hope of refinancing your way out of things.