Home Prices Remain Strong- currently 21 percent of all homes are sold ABOVE listing price

[SC Maintenance]

Every quarter I get a post card from the realtor that sold us this place on the 6 major "areas" for home sales. Most run about 1% below listing +/-, but the coastal properties have always sold above list a long as I can remember.

Listing price is for some reason important to realty people, but meaningless to me. The only price that matters is the one which a buyer and seller agree to.

 

[GON]

Every quarter I get a post card from the realtor that sold us this place on the 6 major "areas" for home sales. Most run about 1% below listing +/-, but the coastal properties have always sold above list a long as I can remember.

Listing price is for some reason important to realty people, but meaningless to me. The only price that matters is the one which a buyer and seller agree to.

For many Americans' it is the appraised price the lender accepts is what counts.

 

[Rmay635703]

Home sales are slow around here .

Home sale volumes are at record lows not seen in 30 years.

In this area 12 houses sold last month. Peaks have been in the hundreds many years ago.

The last time sales stopped but values kept going higher…

 

[GON]

Home sale volumes are at record lows not seen in 30 years.

In this area 12 houses sold last month. Peaks have been in the hundreds many years ago.

The last time sales stopped but values kept going higher…

Why are sales at record lows, yet prices and demand at record highs? Connect the dots.....

 

[Rmay635703]

Why are sales at record lows, yet prices and demand at record highs? Connect the dots.....

Others have shown what the pattern matches.





One of the rental houses nearby has been for sale over a year.

 

[JHZR2]

but I dont think that it is just a louisville thing....I think that it is going on all over the usa....

We just got reassessed her in high property tax NJ.

They explained it at the start. They reassessed based upon home upgrades, comps, features, etc. but in the end, around 1/3 would increase, 1/3 would stay the same, and 1/3 would decrease. Values went up, percentage (rate) went down.

We are hitting smoother issue locally because they instituted a 2% cap on tax increases due to normal business. Yet insurance, energy, etc. increases more than that annually. So schools can’t keep up.

Apparently in other places they’ve finally come to realize that even with regionalized schools and fewer unions and whatever else, it still costs money to do stuff, and they’ve been increasing taxes commensurate with that.

 

[SC Maintenance]

Why are sales at record lows, yet prices and demand at record highs? Connect the dots.....

That is actually a very easy answer.

Like I have said before, for prices to fall in any market, you need distressed sellers. The vast majority of people are sitting on a 3% mortgage and have a job - so there is no forced sale. They can't get a 3% mortgage anymore, so no urgency to move.

No sale, no price discovery, no falling prices.

Builders are selling new, but they do buy downs and upgrades, which there supposed to properly program into MLS, but Fannie did a study and said it hardly ever happens. One more reason to get rid of NAR - but I digress.

Normally, the distressed would come from FHA and other "programs". But all those programs prop up non payers with "partial claims" where they just take the amount the borrower is behind, and put it at the end of the loan. Buyers can do this for years. John Comiskey has been posting real examples of this on X for years. Chris Whalen figures there are up to 200K FHA loans that will be foreclosed on this year once those partial claims rules are done away with. Its not a huge number but it might start the market moving again.

So the current market is frozen. Making any claims on what the current market is telling you about long term trends price trends is likely inaccurate.

I am not predicting a collapse. For all I know housing could start going up again, although I doubt it. However the market is frozen, and first time buyers are locked out. Its us old farts selling to each other. A market without new buyers is dead market.

 

[GON]

That is actually a very easy answer.

Like I have said before, for prices to fall in any market, you need distressed sellers. The vast majority of people are sitting on a 3% mortgage and have a job - so there is no forced sale. They can't get a 3% mortgage anymore, so no urgency to move.

No sale, no price discovery, no falling prices.

Builders are selling new, but they do buy downs and upgrades, which there supposed to properly program into MLS, but Fannie did a study and said it hardly ever happens. One more reason to get rid of NAR - but I digress.

Normally, the distressed would come from FHA and other "programs". But all those programs prop up non payers with "partial claims" where they just take the amount the borrower is behind, and put it at the end of the loan. Buyers can do this for years. John Comiskey has been posting real examples of this on X for years. Chris Whalen figures there are up to 200K FHA loans that will be foreclosed on this year once those partial claims rules are done away with. Its not a huge number but it might start the market moving again.

So the current market is frozen. Making any claims on what the current market is telling you about long term trends price trends is likely inaccurate.

I am not predicting a collapse. For all I know housing could start going up again, although I doubt it. However the market is frozen, and first time buyers are locked out. Its us old farts selling to each other. A market without new buyers is dead market.

Informative post. Only question, what is your definition of dead market?

My youngest son is 31 years old. He is currently in Korea until DEC 2025. He makes little money. He will likely buy a home when he returns to conus. His home may reflect the home I grew up in, 700 square feet, two bedrooms, one bath.

 

[SC Maintenance]

Informative post. Only question, what is your definition of dead market?

My youngest son is 31 years old. He is currently in Korea until DEC 2025. He makes little money. He will likely buy a home when he returns to conus. His home may reflect the home I grew up in, 700 square feet, two bedrooms, one bath.

Nothing wrong with 2 bed / 1 bath. Location is everything!

I have heard multiple analysts call the market "frozen". If your transaction volume is the lowest in 30 years, when the population at that point was 30% less, and that period even includes several recessions including the great recession. I think its reasonable to call the current market dead - or frozen, take your pick. Local markets can always vary.

More data points.

-- We keep hearing about this huge demand, yet builders continue to build fewer homes? New home starts has been declining for several years. Even in 2022 it wasn't even close to the number of units built in the 2000-2009 period per year. Were back to 2018 start levels.

-- First time home buyers are the smallest part of the market ever - like 25%. The average age of first time home buyers is now 38 - the highest ever.

Don't know much about real estate, but I know a fair bit about markets. That market looks pretty anemic to me.

 

[GON]

Others have shown what the pattern matches.





One of the rental houses nearby has been for sale over a year.

Can you post the address of the rental house for sale? I would enjoy doing a competitive market analysis.

From my pov, to buy a single family home that was last a rental property there has to be a unique reason. Scarce housing in the area, I live next door and want my aging parents to live next door, very special lot (waterfront, etc), two percent financing.

At six percent mortgage for owner occupied, and ten plus percent mortgage for investment property, selling a single family rental home is more likely than not a hard to move property. That is why so many rental property sell with owner financing. If the owner is unwilling to provide seller financing, that property may sit a long time.

Another note, what insurance claims have there been on the property? All that is tracked and must be disclosed during the discovery process. A home with a recent or pattern of insurance claims also becomes very hard to sell.

Fully concur, undesirable Florida homes that became very hot properties during the panic markets of just a few years ago, are no longer hit properties. If the property is a winner, good value, it will more likely than not go under contract in Florida in under 48 hours after being listed.

 

[Dave Hess]

Nothing wrong with 2 bed / 1 bath. Location is everything!

I have heard multiple analysts call the market "frozen". If your transaction volume is the lowest in 30 years, when the population at that point was 30% less, and that period even includes several recessions including the great recession. I think its reasonable to call the current market dead - or frozen, take your pick. Local markets can always vary.

More data points.

-- We keep hearing about this huge demand, yet builders continue to build fewer homes? New home starts has been declining for several years. Even in 2022 it wasn't even close to the number of units built in the 2000-2009 period per year. Were back to 2018 start levels.

-- First time home buyers are the smallest part of the market ever - like 25%. The average age of first time home buyers is now 38 - the highest ever.

Don't know much about real estate, but I know a fair bit about markets. That market looks pretty anemic to me.

38 years old first time home buyers does not surprise me.

Younger folks simply don’t have the money to buy a home.
And if they do….. they are barely making it month to month especially if they have school loans and mortgage at the same time.

Without parents help they can not purchase even a starter home.

50 years ago a home was only 3X a person’s yearly salary.

 

[PandaBear]

Real estate market is very location specific and to be honest should not be compared from places too far from each other.

A home near a tech hub with very high paying job is not the same as a retirement dream home next to the national park. The first is determined by the job market, local pay, demand and supply, whereas the other is how many people are retiring and whether the stock market is doing well or not.

About the market being frozen: I knew a real estate agent with 20 years of experience decided to switch career and try to get a new grad job in tech companies, a significant pay cut, because there are no sales, and she was commission based.

One thing I have seen a lot recently is due to Starlink, a lot of formerly undesirable locations have started becoming desirable because people can work from home there.

 

[JeffKeryk]

No, what he's saying is that listing practices are very nuanced and are heavily dependent upon local market norms. In some markets, listing low and bidding up is the expected norm. This may be less true in other markets.

My recent purchase went somewhat better than I thought. We came in a little under and settled at just under listing price. Call it list... The studio condo was in average, lived in, needs refresh condition. Just what I was looking for!

My guess is I did OK. I bought in December. By summer prices prices will be up.

My agent just emailed me the local market conditions. Here's his quick take:

• San Mateo and Santa Clara continue to see incredibly strong growth in median sale price, while Santa Cruz remains mostly flat when compared to this time last year.
• Inventories are beginning to build in Silicon Valley, with the number of active listings increasing by more than 16% when compared to last year!
• New listings continue to be scooped up at an incredibly rapid pace, with the average listing in Santa Clara sitting on the market for just 8 days.

 

[AZjeff]

Sales have slowed in the Prescott Az market. Sellers aren’t dropping prices to sell.

Daughter listed her property mid September, accepted an offer $15k under list and closed mid December. One property in our neighborhood has been for sale 6 months and they just dropped it $5k. These are $400-500k properties.

 

[tbm5690]

Sales have slowed in the Prescott Az market. Sellers aren’t dropping prices to sell.

Daughter listed her property mid September, accepted an offer $15k under list and closed mid December. One property in our neighborhood has been for sale 6 months and they just dropped it $5k. These are $400-500k properties.

My only thought in cases like that where a house sits for half a year and only price drops by 1% or so (what's the point of reducing only $5K on a $500K house I have no idea) is thinking that these sellers obviously are not bound to contingencies on whatever purchase they are making (or have made) next. Relocating/down-sizing and paying cash for the new place so therefore can afford to let the old one sit empty for a while? I would think in the majority of cases, let's say job relocation for a young family, that you would have to sell in order to not be stuck renting in your new city. Even then, I don't see most people paying rent plus the mortgage on the house waiting for it to sell.

 

[gfh77665]

Hyundai just announced a $20 Billion investment in the USA, including a $6 Billion steel mill in Donaldson, Louisiana. Thats just one example of an onshoring trend that will likely continue for at least the next 4 years. Increased industrial investments in the USA will spur on the economic growth that will power new home construction and more home sales, especially in the states with friendly environments for industry and commerce.