Housing market - local to you.

Jay Walk · Sep 30, 2023

Today I have ten different open houses (pre-owned homes) within a ten minute walk from my home.
Five of these homes have price reductions.
Three of these homes are under $450k which was unheard of in this area just last spring.

Alexx1401 · Sep 30, 2023

Anyone with a functioning brain could see this coming. History repeating itself over and over. With for some reason a hell of a lot of people standing around in shock that doing the same actions result in the same outcomes. No mater how many times they tell themselves that this time hitting their hand with the hammer will not hurt.

Print mass amounts of money, fire up inflation, raise the cost of money to try to undo the damage, mortgage rates start to climb. Shocker of shockers people slow down buying homes. What is the current rate? What was it 3 years ago? Then people are shocked when the market gets soft and finally crashes? Wife and all her sibling had to close out their parents life about a year ago. Couple of her siblings were wanting to hold out. I warned them if you want that plan on just paying the taxes for years and wait till the correction and another boom then. The hold outs decided they did not wish to do that and signed off. Same house they just sold has already dropped in price a LOT since they pulled the trigger. People never seem to learn :s0092:

Jay Walk · Sep 30, 2023

In the real estate biz, we called that "Chasing the market down"
or
"Holding out for less money"

Happens all of the time.

Heyjoe · Sep 30, 2023

The cost of buying a home has increased by something like three times the cost in 2021. This has had an impact of around 100,000 dollars of purchasing power in my case. People are reluctant to sell the home with a mortgage costing 2.5% because they'll be picking up a mortgage at around 7.125% at last check.

This is putting upward pressure on home prices because so few homes are for sale- there are more people buying than there are houses for sale.

I don't expect prices to fall much further due to the above. @Jay Walk I'll bet those homes are still about 150% higher value than a couple years ago.

Certaindeaf · Sep 30, 2023

ma96782 · Sep 30, 2023

Aloha, Mark

Pepe-lepew · Sep 30, 2023

Last big drop in house prices there was not 30% inflation and 6.5% mortgage rates. This market correction will be much different.

Friend is in the process of selling his house. They priced it what they thought would move it fast and waited a month for an offer. Two offers accepted fell through before a third offer finally stuck.

Grumpy 1 · Sep 30, 2023

The house next door to me went on the market about 1 month ago. It sold in 5 days for 30K above asking price. I had a hard time believing it reached $577,000. What a crazy world we are living in.

Alexx1401 · Sep 30, 2023

Grumpy 1 said:
The house next door to me went on the market about 1 month ago. It sold in 5 days for 30K above asking price. I had a hard time believing it reached $577,000. What a crazy world we are living in.

A LOT depends on where the house is. Some places its still booming. Seattle is (so far) still like this in large area's. Again history repeats. Last big bubble burst this same thing was happening. The housing market was going nuts for years. Sibling sold her home and buyers got into a bidding war. She sold for FAR over what she expected to ask. This always leads to the same thing. The warning signs are clear to see. Not all area's are still going up. LOT of what are "blue collar" area's homes are just sitting for a LONG time with no buyers. This will spread. Many will sit back in shock when the correction comes. After telling themselves that this time it will not happen. :s0092:

The big shoe to drop will be when jobs dry up and a LOT of people suddenly can not pay that bank loan.

Tinman357 · Sep 30, 2023

Alexx140

And do you think this coming correction wil result in falling prices? I ask because you seem to have a realistic grasp on what the most likely outcome might be.

Alexx1401 · Sep 30, 2023

Tinman357 said:
Alexx140

And do you think this coming correction wil result in falling prices? I ask because you seem to have a realistic grasp on what the most likely outcome might be.

Price will never be what it was decades ago of course but, there is no way it can just keep going up with no end. Last crash was pretty amazing where I lived. Couple homes near me had sold for over $250K just before during the heat of the buying. Couple years later they were finally empty after bank managed to pry to people out of them. One was priced at 100K and was getting a LOT of people looking. Even at that price took months till they found a couple to take it. One right across the street from me sold for 110K after it took the bank 4 years to pry the people out of it. In Laws place just sold for just under 500K about a year ago. Some around them were going for 100K and more above with people bidding on them against each other. Last month those same homes were looking for "offers" of 450 K and not getting any bites. How far the price will fall? Again has a LOT to do with location. My dentist is out in the far outlying area of this county. Was out there last week and a LONG stretch of road that used to be just empty land last time I was out there is now lined with new home construction. I was almost late for my appointment due to all the crap trying up the road. So there is still a LOT of new homes being put up. How bad will the next (crash) correction be? Who the hell knows. People who end up underwater are normally still "OK" as long as nothing else changes for them. Where it gets fun is when work dries up and one or both of them lose their job and they can't sell the place for what they owe? Once that starts it snowballs. All this printing of money always comes with a price to pay. No telling how much pain will have to be felt this time around.