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Point is it’s cooling. Lots of negative economic factors on the horizon that could quickly lead to a big bubble burst.
Again. Cooling to normal levels does not equal "bursting bubble" no matter how bad you want to say it is. Even the articles you and others post contradict claims of a bubble bursting.
Seeing a lot more price drops as time goes by where we are looking. I hope the list on Friday, take offers until Monday, highest and best routine disappears too.
This is a ridiculous statement. Before COVID-19, the average time on market was between 60 and 90 days. If something is priced at current market rate and doesn’t have something wrong with it, there’s no point in pressing the panic button if it isn’t under contract in 14 days. Anything less than 60 days is still a very hot market.
Perhaps it’s ridiculous, but it’s the facts. It used to be a house would go on the market, within 2 to 3 days it was under contract, and the next time the next house went on the market it was $10K more, under contract in 2-3 days, etc. Even my little house went under contract in two days for $40,000 over asking. It was ridiculous.
Now houses are sitting a little bit longer, and the price increases have stopped. I am not saying anyone should panic or any bubble is bursting. I’m just saying that things are starting to slow down and perhaps get back to a more normal situation. What was happening before was an anomaly.
By the way, those houses I mentioned, they’re all still on the market. One had a price decrease of $15K. It was overpriced though in my opinion. Of course, who am I to judge. I also thought my house sold for way too much. I wasn’t going to turn down the buyer’s offer, but I’m amazed they offered me as much as they did. The other two houses are listed at prices houses went under contract just a month ago. So I think they’re probably reasonably priced since people were willing to pay that price just a few weeks ago. But now they’re sitting on the market for a reasonable amount of time as well.
Last edited by WalkingLiberty1919D; 06-05-2022 at 07:26 AM..
Reason: Typos due to speech to text and my accent. Haha
I rented for 5 years before buying. The trend with rental rates was upwards, every renewal, and every new property I moved into.
I bought a house because the repayments equaled a little less than I was paying in rent. Regardless of what I paid, or how inflated the price was (Zillow makes it easy to see what the sale price was only 3 or 4 years ago…) I think it was a reasonable decision.
I’m not going to go too deep into number crunching, but at a glance:
Assume rental rate was $1500 plus utilities, no maintenance cost or property taxes owed as that’s covered by landlord
Assume mortgage including property taxes and insurance is also $1500, plus utilities and maintenance
The $1500 mortgage figure includes about $850 of which is me paying “myself”, as it’s simply paying down principal, which increases my ownership of the home. In terms of net worth, it’s break even. So my $1500 mortgage can in some way be thought of as only $750 outgoing (for interest and property taxes)…
So in a simplified way, $1500 rent has been replaced with a much lower $750 in living expenses…just now when I have a leaky roof or busted AC I have to pay to fix it myself.
Assume rental rate was $1500 plus utilities, no maintenance cost or property taxes owed as that’s covered by landlord
Assume mortgage including property taxes and insurance is also $1500, plus utilities and maintenance
If those are the assumptions, then it would take a catastrophic bear-market or a true misfortune of flaws with the house, to give the long-term nod to renting. If the PITI on the house truly equals the rent, it behooves us to buy - even in an unstable or frothy market.
Now let's make an alternative set of assumptions. Rent is still $1500/month, but the cost of the house is $6500/month, plus utilities and maintenance. How how does the comparison look?
And let's sweeten the deal. In the rental, you have a room mate, how shares expenses 50/50. So the individual out-of-pocket is $750/month. But in the house, there are no room mates. Why? Because if renting, the two are partners, of equal weight. But if buying, it would be awkward for the tenant-room mate to rent from the owner room-mate. Consequently, the former moves out.
If you punch in that sort of mortgage payment, which I won’t do out of laziness, you’re comparing a rental property worth something in the vicinity of $200,000 or less to purchasing a property in the vicinity of $1m+ so I really don’t know what the argument is… maybe I overlooked
If your budget is $6,500 - you’d compare what that gets you in the rental market vs what house price that gets you in the buyers market
I bought a 3 2 1750 built in the 80s for 295 at 5% down and 2.99 3 years ago.
16 months ago my wife and I signed a contract to build a new 3 2 2250 for 333.
They delayed 11 months, citing supply chain issues, labor shortages, etc.
They 're-negotiated' the contract at 383, and started building 4 months ago.
They continue to cite supply chain issues, labor shortages, etc.
We're scheduled to close in late August.
In the meantime, our home has gone from being valued at ~ 300 to being on the market for 450.
We had one buyer put in an offer for 500, then pull out 3 days later after an inspection report revealed 'minor foundation issues', despite our structural engineering report saying the foundation has no issues.
Since then, we've had 3 total showings in 4 days, with no offer.
If we sold at 450, which at this point seems to be a 0% possibility, a 20% down payment at 4.875% (locked in 15 days ago with a 90 day lock and still might not be enough), we walk away with enough money to get a minivan, boost savings 10k, and get some furniture for the house, all at the exchange of going to a 307 loan with a monthly payment $700 higher than currently, before factoring in property taxes at a ~ 30% higher value.
Truly amazing how our home has gone up 50% in 3 years and if we sold our new mortgage for a home valued at 80% of our current one goes up $700 with a 40k higher balance, in exchange for 40k worth of other stuff.
I saw a condo that interested me on the MSL yesterday afternoon. By the time I got (some of) my questions about it answered, they amended the listing to state that they had multiple offers, would accept "best and highest" through the night, and would choose one by noon today. I didn't have time to get there to see it, much less make one of biggest financial decisions of my life in less than 24 hours. I'm just not impulsive enough for this market!
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