GON
$100 Site Donor 2024
This article from Fox Business dot com highlights REDFIN saying 60k real estate transactions have been called off in September 2022.
Headline was very eye catching but reading the article I couldn't help but come away that no significant housing decline will happen (unless the US dollar were to collapse).
What I came away with from the article:
- there is an overall housing shortage in the USA
- builders are fearful to build new homes- not that the new homes won't sell, but inflation and labor issues make the proposition to risky. A home a builder thinks will cost 500k to build, may end up at 650k. The market won't support the increase cost in labor and materials
- since builders aren't building new homes, the housing shortage will get worse
- majority of people in the USA have mortgages at 2%-3.5%. They are not selling unless they can get a dream deal- less inventory
End state- no housing price decline of any meaning in the USA IMHO. People may not buy new boats or new motor homes, but nobody is walking away from their house at 2.5% interest rate. I see fair value in single family homes at 2015 prices for 2022. The market just exploded. I will view a decline in housing if a single-family home declines lower than 2018 values. And I don't see any of the housing declines coming. People may want a new home, but they are not selling what they have because they have such a low interest rate.
Disclosure- I have cash ready and am ready to buy a home; I want a major correction in the market for personal reasons, but the information I read (past the headlines) shows no meaningful decline in single family home prices. There will need to be an oversupply in housing for prices to drop. No oversupply now or on the horizon.
Headline was very eye catching but reading the article I couldn't help but come away that no significant housing decline will happen (unless the US dollar were to collapse).
What I came away with from the article:
- there is an overall housing shortage in the USA
- builders are fearful to build new homes- not that the new homes won't sell, but inflation and labor issues make the proposition to risky. A home a builder thinks will cost 500k to build, may end up at 650k. The market won't support the increase cost in labor and materials
- since builders aren't building new homes, the housing shortage will get worse
- majority of people in the USA have mortgages at 2%-3.5%. They are not selling unless they can get a dream deal- less inventory
End state- no housing price decline of any meaning in the USA IMHO. People may not buy new boats or new motor homes, but nobody is walking away from their house at 2.5% interest rate. I see fair value in single family homes at 2015 prices for 2022. The market just exploded. I will view a decline in housing if a single-family home declines lower than 2018 values. And I don't see any of the housing declines coming. People may want a new home, but they are not selling what they have because they have such a low interest rate.
Disclosure- I have cash ready and am ready to buy a home; I want a major correction in the market for personal reasons, but the information I read (past the headlines) shows no meaningful decline in single family home prices. There will need to be an oversupply in housing for prices to drop. No oversupply now or on the horizon.
60K real estate deals called off in September
High mortgage rates are driving down home sales and dampening buyer competition as many potential buyers and sellers remain put in the real estate market, according to Redfin.
www.foxbusiness.com
Last edited: