Million Dollar Question - Buy or Wait? 2022 Edition (Dallas, Austin: home equity loan, to buy)

[hbdwihdh378y9]

Two or three months ago, my next-door neighbor, to my great surprise, told me her house had been appraised at $875,000.

A month ago, they put the house on the market on a Thursday, listed at $799,000. By Sunday, the sellers had accepted an offer of $915,000.

[TurtleCreek80]

Originally Posted by hbdwihdh378y9

Two or three months ago, my next-door neighbor, to my great surprise, told me her house had been appraised at $875,000.

A month ago, they put the house on the market on a Thursday, listed at $799,000. By Sunday, the sellers had accepted an offer of $915,000.

Yes, whomever said bidding wars are “so last year” a couple of posts up is totally wrong. We had 2 in the last 30 days on the next block down. One listed at $850k and sold for over a million. The other listed at $1.6M and went for $1.75M.

[Wile E. Coyote]

"All real estate is local."

[Rollingon]

Take a deep breath and read with an open mind.

In 2019 houses prices were coming down off the 2017 peak prices. Stock market was healthy and salaries were at the same level or say 15% lower than 2022. Most people who "wanted" to buy probably didn't have 20 % for down payment and paying pmi did not work out into an acceptable monthly EMI. Now compare what has really changed for this person to 2022!. He certainly did not save much during 2 years of Covid to build a 20% especially since the target price increased by nearly 75 to 100%. Because today the same person needs even more to accumulate a 20% down payment.

Now for the last four weeks stock market is sliding. So economy is definitely facing headwinds, inflation is the pungent flavor of the season and job cuts are 2 quarters away if stocks slide for another month. What options will this person have towards the end of 2022. Even if we assume this person is moving from a high cost area to Dallas, would he be willing to pay exorbitant prices?

Most people fail to see one obvious thing government did that added "hugely" to the current housing mess. They imposed a moratorium on foreclosure on one hand which meant though a person who lost a job to Covid the bank was banned from foreclosing. Both renters and homeowners who lost jobs were helped in retaining a roof over their head. On the other hand government paid monthly in their Bank account and essentially ran their household. More importantly this dried up the supply side of home availability. Essentially if you wanted to buy you pretty much had to pick from an artificial scarcity.

Today there is no longer ban of foreclosures, free monthly government bailouts have dried up. So when a person loses job in 2022 unless uncle Biden prints under tranche of cash you are SOL.

Now decide if you want to wait or buy

[osucowboy]

Originally Posted by Rollingon

Take a deep breath and read with an open mind.

In 2019 houses prices were coming down off the 2017 peak prices. Stock market was healthy and salaries were at the same level or say 15% lower than 2022. Most people who "wanted" to buy probably didn't have 20 % for down payment and paying pmi did not work out into an acceptable monthly EMI. Now compare what has really changed for this person to 2022!. He certainly did not save much during 2 years of Covid to build a 20% especially since the target price increased by nearly 75 to 100%. Because today the same person needs even more to accumulate a 20% down payment.

Now for the last four weeks stock market is sliding. So economy is definitely facing headwinds, inflation is the pungent flavor of the season and job cuts are 2 quarters away if stocks slide for another month. What options will this person have towards the end of 2022. Even if we assume this person is moving from a high cost area to Dallas, would he be willing to pay exorbitant prices?

Most people fail to see one obvious thing government did that added "hugely" to the current housing mess. They imposed a moratorium on foreclosure on one hand which meant though a person who lost a job to Covid the bank was banned from foreclosing. Both renters and homeowners who lost jobs were helped in retaining a roof over their head. On the other hand government paid monthly in their Bank account and essentially ran their household. More importantly this dried up the supply side of home availability. Essentially if you wanted to buy you pretty much had to pick from an artificial scarcity.

Today there is no longer ban of foreclosures, free monthly government bailouts have dried up. So when a person loses job in 2022 unless uncle Biden prints under tranche of cash you are SOL.

Now decide if you want to wait or buy

I agree.
Add to the fact that investors have gone to the sideline due to diminishing yields from higher interest rates. Post COVID investors bought 20% of the homes. Housing Market is at an inflection point and the effect of rate increases are usually seen after 4 to 6 months after this batch of buyers buy their homes. Will a new batch of buyers step up?. Im still seeing houses going under contract but not getting multiple offers like it used to and only time will tell.

[Wittgenstein's Ghost]

I think things have changed in the last couple months. When I initially responded on page one back in March, I hinted that I probably wouldn't buy right now. I mentioned higher rates and a possible recession. Now, I certainly wouldn't buy unless practical consideratinos were overwhelming. I think a recession is almost inevitable now, and I wouldn't be surprised to see 30 year fixed get to 7-8%. I think non-housing economic factors are conspiring to let a lot of air out of most asset classes, and while it's hard to predict prices, I really am expecting actual price drops in many markets.

The Fed appears to be serious about bringing inflation under control, and I think we'll see some real economy pain as a result. I don't think housing values can stand up through that.

[Kenro911]

Originally Posted by Wittgenstein's Ghost

I think things have changed in the last couple months. When I initially responded on page one back in March, I hinted that I probably wouldn't buy right now. I mentioned higher rates and a possible recession. Now, I certainly wouldn't buy unless practical consideratinos were overwhelming. I think a recession is almost inevitable now, and I wouldn't be surprised to see 30 year fixed get to 7-8%. I think non-housing economic factors are conspiring to let a lot of air out of most asset classes, and while it's hard to predict prices, I really am expecting actual price drops in many markets.

The Fed appears to be serious about bringing inflation under control, and I think we'll see some real economy pain as a result. I don't think housing values can stand up through that.

Unless, investors en masse sell the stock-market and dump money into real estate. Then we're totally screwed.

Real estate in North DFW over last 2 years has seen crypto level appreciation.

[Xalistiq]

Originally Posted by Kenro911

Unless, investors en masse sell the stock-market and dump money into real estate. Then we're totally screwed.

Real estate in North DFW over last 2 years has seen crypto level appreciation.

Crypto level appreciation? Have you not seen massive losses to the crypto market in the last week?

The real estate boom, and subsequent historically high home price appreciation, both in DFW and nationally, was driven by artificially low interest rates, the Fed adding $5T+ to the money supply, and PPP loans which disproportionately benefited the top 20% of households.

Those stimulative monetary policies are over.

The housing market is the next domino to fall as interest rates continue to surge the remainder of this year, just as I predicted they would back in February/March.

Several posters called me crazy for suggesting that in order to measurably tame inflation and reduce demand, 30-year mortgage rates should be 8%+, but that is where we’re headed. The major declines in housing prices (i.e., a correction) won’t occur until 2023-2024.

[stephwin]

I have an anecdotal story to share. A relative passed away last year and my mom has been getting the home ready to sell (cleaning out, but not updating). It is located in Stonebridge Ranch in McKinney and was listed on a Thursday. By Sunday morning, she had an offer 17% over asking, close in 3 weeks, 25% down, appraisal waived, and the seller was going to pay for the survey and title fees. There are definitely people out there that are still desperate to buy despite the rising interest rates.

[TheOverdog]

I love it when people call for 8% interest rates and a housing correction. Like they are basically begging for corporations to purchase the vast majority of the available housing, renting it out, and banking the appreciation. It shows such a basic lack of understanding of economics and who currently has money in the US it's almost funny.


Also unless the recession is depression-level bad, people who are at risk for job loss during a recession aren't currently able to purchase homes. They are not competition and they have nothing to do with current housing prices. So them losing their jobs during a recession will have no impact on the home-purchasing economy.