Didn't we have zero $$$ down payments at one recent time?
Interesting article from CNBC on residential home prices
- Thread starter GON
- Start date
If I could do it over again I never would have moved out of my parents home. I had room mates for many years when I bought my first house. I had great room mates.
GON
$100 Site Donor 2024
ZzyZzx,
Very rarely over the past 50 years in the USA single family home market, can a homeowner buy a home, and sell it a year later and make a profit. That is what is happening right now. There is no housing price collapse as the media is implying, if one looks at 2022 prices compared to 2021 prices. And if one looks at FEB 2020 prices as a measuring point- housing RIGHT NOW is at a monster profit, the highest in USA housing price history.
My daily reviews of the real estate market across the USA have yet to find a single-family home market currently under any duress whatsoever- when compared to the very bloated 2021 prices.
In markets that have been distressed for over a decade like Illinois, new selling price records are being set in September 2022. And these new price records are being set with thirty-year mortgage rates at six+ percent. In places like Phoenix, Denver, Seattle- the homes selling today are selling for more than they would have sold for in 2021 with mortgage rates in the twos.
What is happening is today's single-family buyers have more homes to choose from, and have bargaining power. The days of getting a flood of offers above asking price are over (for now), but the Sellers that are selling homes, even if they purchased the home in 2021, are making a profit. This doom and gloom on single family homes is crazy- the numbers don't support that. If one bought a home in 2021, they could sell the same home today for a profit.
And for full disclosure- I want real estate to come down and come down hard. I don't have a home and have cash ready to deploy. I have yet to see a single meaningful decline in home prices when compared to prices pre–MAR 2020. Not one. Heck, I have yet to find a single trend of people losing money selling their home in today's market. Paul Harvey..... the rest of the story.
Very rarely over the past 50 years in the USA single family home market, can a homeowner buy a home, and sell it a year later and make a profit. That is what is happening right now. There is no housing price collapse as the media is implying, if one looks at 2022 prices compared to 2021 prices. And if one looks at FEB 2020 prices as a measuring point- housing RIGHT NOW is at a monster profit, the highest in USA housing price history.
My daily reviews of the real estate market across the USA have yet to find a single-family home market currently under any duress whatsoever- when compared to the very bloated 2021 prices.
In markets that have been distressed for over a decade like Illinois, new selling price records are being set in September 2022. And these new price records are being set with thirty-year mortgage rates at six+ percent. In places like Phoenix, Denver, Seattle- the homes selling today are selling for more than they would have sold for in 2021 with mortgage rates in the twos.
What is happening is today's single-family buyers have more homes to choose from, and have bargaining power. The days of getting a flood of offers above asking price are over (for now), but the Sellers that are selling homes, even if they purchased the home in 2021, are making a profit. This doom and gloom on single family homes is crazy- the numbers don't support that. If one bought a home in 2021, they could sell the same home today for a profit.
And for full disclosure- I want real estate to come down and come down hard. I don't have a home and have cash ready to deploy. I have yet to see a single meaningful decline in home prices when compared to prices pre–MAR 2020. Not one. Heck, I have yet to find a single trend of people losing money selling their home in today's market. Paul Harvey..... the rest of the story.
That 11% interest is what led to my dad paying his home off in one and 1/2 year in 1981. His first and last loan in life.
GON
$100 Site Donor 2024
Quad Zs,
What's the so what if a four percent increase interest rates???
All I can see is that an increase of interest rates to seven percent on a 30 year mortgage is many homeowners won't be selling their homes. Rents will be going up as there is a shortage of single family homes in a macro basis. Buyers have some leverage in their purchase transaction. I am.not seeing any catastrophic consequences to the macro single family home prices with mortgages at seven percent.
We still do.
The major county in America where home prices just dropped the most is …
"Home price appreciation has slowed dramatically in most markets," says Rick Sharga, executive vice president of market intelligence at ATTOM.
www.marketwatch.com
The major county in America where home prices just dropped the most is...
- Alameda County (Oakland, Calif.), which is down 11%;
- Travis County (Austin, Texas), which is down 9%;
- Santa Clara County (San Jose, Calif., which is down 8%;
- Contra Costa County (outside Oakland), which is down 7%; and
- Fairfax County, Virginia (outside Washington, D.C.), which is down 7%.
GON
$100 Site Donor 2024
Let's look at the highest percentage home price drop you posted, Alameda County, CA which your post shows down 11%.The major county in America where home prices just dropped the most is …
"Home price appreciation has slowed dramatically in most markets," says Rick Sharga, executive vice president of market intelligence at ATTOM.
The major county in America where home prices just dropped the most is...
- Alameda County (Oakland, Calif.), which is down 11%;
- Travis County (Austin, Texas), which is down 9%;
- Santa Clara County (San Jose, Calif., which is down 8%;
- Contra Costa County (outside Oakland), which is down 7%; and
- Fairfax County, Virginia (outside Washington, D.C.), which is down 7%.
Average selling price of a home in Alameda County, CA SEP 2022 was 1. 25 million USA,
Average selling price of a home in Alameda County, CA FEB 2021 was 918,000 million USA
Using the median prices of homes in Alameda California, a home purchased in FEB 2021 and sold in SEP 2022, netted the seller gross proceeds of $332,000. What a great profit some makes today selling a home right now in Alameda County, CA.
$332,000 gross profit selling a home Alameda County, CA- in September 2022, after owning the home for 18 months.
Like the article, you are cherry picking data. Just give it a few more months and even you will see the downward trajectory in housing prices as it will be obvious to everyone by them. Rate increases have a delayed effect on the housing market and people can't afford them at todays prices.
GON
$100 Site Donor 2024
ZzyZzx,
As I have posted, I am in hope of housing prices retuning below 2018 levels. I am a cash buyer waiting on the sidelines. Daily I read all the information I can on housing prices. I have not seen one piece of data that shows prices have fallen to 2021 prices. I have seen, to my huge surprise, places like Chicago hitting all-time highs in September 2022. And that is a city with a flight of businesses and a state with ten consecutive years of population decline. By some estimates, Illinois has lost over 1 million residents in the past 12 years.
Data does not show the housing market in decline when compared to 2021 levels. And 2021 levels were at all-time highs.
Did the article you read state why Chicago is hitting an all-time high? As far as I experienced, all the home buyers in IL are folks who lived in the city or the inner-city suburbs where there are loads of apartments and are moving further out in the distant suburbs where it's less congested, safer, and the schools are better. I'd be interested to see if IL actually saw a gain in population.
GON
$100 Site Donor 2024
Pew,
I stand corrected. I was referring to the greater Chicago area, not the City of Chicago. My error.
Every stat I look at shows Illinois continues to have a loss in population.
A unique tool to look at for population loss if one does not think the stats are accurate, is Penske Truck Rental. Penske use to have a heat map of where rental trucks are in high demand, and where they are in low demand. I used to use the Penske heat map as part of a college course I taught. Bottom line, price a Penske 26 foot rental from Chicago to Phoenix, then Phoenix to Chicago. Typically, you can get the truck for next to nothing Phoenix to Chicago. Chicago to Phoenix, big bucks. One can do the same map to most metropolitan areas to/ from Chicago. It almost always prices Penske rental truck next to nothing to Chicago, and big bucks from Chicago.
Real estate is a local thing. It changes from town to town. A desirable area with great schools with hold steady in the long run.
Agree - Rate increases will drive prices down as the payment will still be the same or close to it.
Rate reductions drive prices up and the payment will still be about the same.
Both the above are what the public can afford in a monthly payment.
All this takes times to work through down to the buyer but I do believe we are "there" now. Just hearing comments, buyers already think they are priced out because the "news" is telling them so.
Ok, now, how about this one, the wild card is, young buyers and some old, think 7% is high. So we will have a decline in market prices but I am not so sure how severe yet.
Lets not lose these few thoughts (of mine, right or wrong I dont know)
1. Employment is at an all time low, WAY lower than the 2008 correction (so far)
2. Inventory is still much lower than 2008 (so far)
3. As rates climb, the people who thought 7% was high might get a lesson and see 7% as historically very reasonable. They may for lack of better word, panic and find a way to buy.
But this is the one factor I am counting on right now as I am in the mist of starting to HOPEFULLY *LOL* sell our home and moving to a new home which will be completed next year.
Because of artificially low rates that seemed like they were going to last forever, since almost 2008 we have a wild card.
I am counting on adjustable rate mortgages saving the day, meaning buyers will see they can still afford the payment by getting an adjustable rate mortgage which I predict will once again become commonplace. There is quite a spread now between fixed and adjustable offerings that will settle some nerves of buyers.
With all the above said, without question, prices are falling. There are some really sweet deals that if one moves quick on from some builders in Florida you can knock 15% off the purchase price in a new home, select homes that the builder wants to move before years end. This was UNHEARD of in the communities we looked in at the start of summer, buyers at times bid up the asking price of builders back then and forget about a reduction, they were raising prices every few weeks in some areas. Well, we knew that was going to end.
We are entering what would be called a normal market and prices do have to come down. I do think it will take time and pain for some, because the Fed is on an assault of everything in the economy to cool it down, brought about by their own failed policies of interfering in the markets to begin with, they never time it right.
But than again, what do I know ??
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Home prices will fall in half of the US next year, and places like California will be hit hardest, a top economist warns
National Association of Realtors' Lawrence Yun said home prices will remain flat in 2023, with increases in half of all markets and decreases in the other half.
www.businessinsider.com
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