U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-07-2019, 10:44 PM
 
9,073 posts, read 8,297,069 times
Reputation: 19706

Advertisements

It may be the a lower number of expensive homes being sold, or more lower priced homes being sold. In either situation is happening, this alone will cause average sale price to decline. If both happened at once, prices could have actually increased, and still the average price would decline.
Reply With Quote Quick reply to this message

 
Old 09-08-2019, 08:11 AM
 
57 posts, read 21,083 times
Reputation: 110
Quote:
Originally Posted by oldtrader View Post
It may be the a lower number of expensive homes being sold, or more lower priced homes being sold. In either situation is happening, this alone will cause average sale price to decline. If both happened at once, prices could have actually increased, and still the average price would decline.
Or price gains are simply slowing as we near the end of the economic cycle. I'm not sure why real estate folks are so terribly afraid of things slowing or pulling back a little, in the long run it's better for growth to be sustainable, especially if we all aren't trying to cash out at the peak. As a property owner, I'd prefer we don't blow up another bubble and have a repeat of 2008. I also want to see people I know younger than me who missed the boat I got on at least have a chance of getting into property ownership, that's more important to me than my paper equity rising some more.

Housing is near the end of the cycle. It won't be a 2008 repeat, it's likely to be a very mild correction, if any nominal drop, followed by a period of stagnant growth. 10% YoY is unsustainable and was fueled by cheap debt. It is not, and cannot be a long-term trend without incomes growing proportionally, which they haven't.
Reply With Quote Quick reply to this message
 
Old 09-08-2019, 08:51 AM
 
Location: Union County
5,810 posts, read 8,509,673 times
Reputation: 4903
Quote:
Originally Posted by smc733 View Post
Look at your own post. There's a very clear slowing of growth in the past year or so, if the same level of deceleration continues into next year, it could get into the negative territory. Heck, if rates didn't get a lucky drop of 100 to 125 bp YoY, we'd probably be in a lot worse shape this year. Believe it or not, it's not "to the moon Alice" forever.

Bob Shiller himself, the person behind the very graph you linked, just said he "Wouldn't be at all surprised" if US home values begin to decline.
That's as far as he will go prediction wise... so a "wouldn't be at all surprised" is him saying "it's going down". Take it for what it is since we don't have much choice with impartial predictors in this space - like do we really believe NAR considering their entire existence is based on the need for homes being sold and going up? I don't think so.

There's really not much we can do. Even using Shiller's index, which is the de facto indicator, lags the market by months. So by the time we see anything there, it's already been missed.

I'd be more worried about the impact of privatizing Fannie and Freddie again... even forgetting about where we think the economy is going, access to mortgages is critical to driving home values. Where would be without government subsidizing housing?
Reply With Quote Quick reply to this message
 
Old 09-08-2019, 09:24 AM
 
Location: Worcester MA
1,975 posts, read 375,112 times
Reputation: 2323
In my area, homes are selling very quickly still. Duplex across the street went pending in one week, supposed to close next week, so we'll see if they get to close.

And the house next to mine just went pending after being on the market for four days.
Reply With Quote Quick reply to this message
 
Old 09-08-2019, 10:02 AM
 
Location: Stuck on the East Coast, hoping to head West
3,837 posts, read 9,379,100 times
Reputation: 7489
Here's what I've noticed: I'm mid-atlantic area. Average price is $365,000 in my town.

Houses/condos/townhouses listed under $300,000 sell very fast and in any condition. They have some crime issues, lack amenities, and can be anything from 1-3 bedroom. Lots of 2 bedrooms. If a house in this area goes over $300,000, it just doesn't sell.

Houses that are $500,000 + sell extremely fast, they are always beautifully updated. Safe neighborhoods, usually gated. Larger lots. If you live in a $500,000 + neighborhood and lower your price slightly, to like $499,900, there are bidding wars.

Then you have the $350,000- $395,000 market. This is like no man's land. Tough to sell. Longer days on market. You get the buyers who only qualify for the under $300,000 market shopping and whining about the price. Then you get the buyers who really want the $500,000 market, but only qualify for the $350,000 market and they whine about condition.

I think there is some downward pressure on the mid market. Homeowners there are over-improving to sell. Some try to drop the price, but not too much b/c then they're competing with the under $300,000 crowd.

Typically, the owners in that mid-market will just hold onto their houses and it's starting to happen now.

That's what is happening in my market anyway. The only slow down I'm seeing is in the mid-market. But last time there was a slow down, the owners just held onto the houses.
Reply With Quote Quick reply to this message
 
Old 09-08-2019, 03:24 PM
 
57 posts, read 21,083 times
Reputation: 110
Quote:
Originally Posted by MikeyKid View Post
That's as far as he will go prediction wise... so a "wouldn't be at all surprised" is him saying "it's going down". Take it for what it is since we don't have much choice with impartial predictors in this space - like do we really believe NAR considering their entire existence is based on the need for homes being sold and going up? I don't think so.

There's really not much we can do. Even using Shiller's index, which is the de facto indicator, lags the market by months. So by the time we see anything there, it's already been missed.

I'd be more worried about the impact of privatizing Fannie and Freddie again... even forgetting about where we think the economy is going, access to mortgages is critical to driving home values. Where would be without government subsidizing housing?
I agree about the impact of Fannie and Freddie going private. If access to mortgages gets tougher, or if FHA disappeared overnight, as an example, home values would plunge. They're held up right now by cheap financing from the feds.

It's not a given things will go down, but the trend/direction, in the face of low unemployment and lowering rates is very ominous. Things should be a whole lot better than they are now, and the fact that they aren't shows how vulnerable this market would really be to a downturn. I keep hearing the same lines, almost word-for-word, that I heard from the NAR, etc... in 2006.

Quote:
Originally Posted by Taffee72 View Post
In my area, homes are selling very quickly still. Duplex across the street went pending in one week, supposed to close next week, so we'll see if they get to close.

And the house next to mine just went pending after being on the market for four days.
Anecodes are fun, everyone always has them when it relates to housing. What's changing is that house going pending in a week no longer has it's contingencies waived, nor is it going for $25-$50k above asking like it did last year. If it weren't for lower rates, it probably wouldn't be going quickly at all this year.
Reply With Quote Quick reply to this message
 
Old 09-08-2019, 03:32 PM
 
Location: southern california
56,145 posts, read 75,284,664 times
Reputation: 48898
Monster repo inventories being held off the market by the banks mr trump predicted a bubble pop in 2016
Reply With Quote Quick reply to this message
 
Old 09-08-2019, 04:48 PM
 
Location: The Berk in Denver, CO USA
14,250 posts, read 20,794,890 times
Reputation: 23442
Quote:
Originally Posted by smc733 View Post
Look at your own post. There's a very clear slowing of growth in the past year or so, if the same level of deceleration continues into next year,
Why is sarcasm always lost on the young?
Reply With Quote Quick reply to this message
 
Old 09-09-2019, 09:22 AM
 
2,352 posts, read 1,629,777 times
Reputation: 3048
Quote:
Originally Posted by oldtrader View Post
It may be the a lower number of expensive homes being sold, or more lower priced homes being sold. In either situation is happening, this alone will cause average sale price to decline. If both happened at once, prices could have actually increased, and still the average price would decline.
I see this happening in my neighborhood, people who were looking for 1600-2000 sqft home realize the price is too high & they are not wiling to pay for it have lowered their expectation to 1000sqft home. Much cheaper. Lot more of lower price home being sold
Reply With Quote Quick reply to this message
 
Old 09-09-2019, 09:49 AM
 
141 posts, read 31,512 times
Reputation: 290
Case in point and why I am selling some investment property. Purchased 1400 sq ft single family home with cash for $172K in 2015, continuously rented at 6% net cap. Under contract for Sep 30 close at $290K, sold as-is no repairs to a couple as their first income property. They are financing it with 90% LTV investor loan 30yr conventional at 4.25%. Including property taxes and insurance BUT no reserves for maintenance or other expenses, they are negative cash flow of $375 per month. When I see mom&pop investors (who really is an investor when they finance 90%?) doing these types of deals, I think it is time to start reducing exposure and prepare for a slow down. Seems like the last gasps of a go for broke market is stupid deals like this one. Although I am happy to take my $118K gross gain on the sale plus years of positive rental cash flow and run for the hills.

Last edited by Spokaneinvestor; 09-09-2019 at 10:54 AM..
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top