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Eh, your schadenfreude might be a bit premature. At least in my Seattle proper neighborhood, home prices are going back up, and bidding wars are back again. Anyone who bought in 2021 hasn't seen any depreciation. And those who bought in early 2022 are probably still doing pretty well from a monthly payment standpoint given jumbo interests were much lower in early 2022.
Inventory is tight and tech companies including Amazon are calling workers back into the office. I agree that the exurbs might see some pain.
There's no "schadenfreude" on my part, I promise. A lot of this could have been avoided.
The fact of the matter is housing and real estate have been "commodified" to an extreme in this country and all-too-often used as a vehicle to further enrich the already rich, leading to severe imbalances in affordability. Most of it is fueled by a hyper-capitalized tech industry. That's not good for any city, and a "correction" is desperately needed in many cities.
There's no "schadenfreude" on my part, I promise. A lot of this could have been avoided.
The fact of the matter is housing and real estate have been "commodified" to an extreme in this country and all-too-often used as a vehicle to further enrich the already rich, leading to severe imbalances in affordability. Most of it is fueled by a hyper-capitalized tech industry. That's not good for any city, and a "correction" is desperately needed in many cities.
Absolutely. Seattle, the Bay Area, Boston, NYC and Austin are some of the metro areas that need a big correction.
Absolutely. Seattle, the Bay Area, Boston, NYC and Austin are some of the metro areas that need a big correction.
Whether they have a big correction and whether they need a big correction are totally different things. And how do you define a "big correction"? Some places are already 20% off from the top of the peak in spring 2022, although that was a very inflated and short-lived peak, and prices for the most part are still higher than 2021 levels.
Whether they have a big correction and whether they need a big correction are totally different things. And how do you define a "big correction"? Some places are already 20% off from the top of the peak in spring 2022, although that was a very inflated and short-lived peak, and prices for the most part are still higher than 2021 levels.
Returning to attainable home value prices that people outside of tech and medicine can afford.
ie., a Ranch in a dumpy suburb of Boston going for $500k instead of $1mil.
ie., a Ranch in a dumpy suburb of Boston going for $500k instead of $1mil.
Now you’re just exaggerating. Plenty of ranches and splits across very livable suburbs <$700k. No my favorite collection of suburbs, but dumpy certainly wouldn’t be used to describe most of these.
Now you’re just exaggerating. Plenty of ranches and splits across very livable suburbs <$700k. No my favorite collection of suburbs, but dumpy certainly wouldn’t be used to describe most of these.
Absolutely. Seattle, the Bay Area, Boston, NYC and Austin are some of the metro areas that need a big correction.
It's already happening in Austin on the rental side
Quote:
Austin is slowly normalizing after a pandemic-era influx of new residents helped drive rent prices to stratospheric heights. One-bedroom median rent has dipped for the last three months; this month, it dropped 4.2 percent to $1,600.
Austin slows:
Austin became one of the country’s hottest Zoomtowns during the Grand Reshuffling. The area saw steady rent hikes in tandem with a stream of new residents—many from tech hubs like San Francisco, who considered Austin a relative bargain. Austin’s one-bedroom median price peaked at $1,720 in September last year. Since then, the realities of an undersupplied market and return-to-office policies have set in. One-bedroom median rent is down for the third month in a row; this month, it dropped 4.2 percent to $1,600. At $1,990, Austin’s two-bedroom median is down 3.9 percent over last month.
Demand from new transplants is ebbing as many tech workers are called back to the office, either full-time or on a hybrid schedule. This trend is reflected in Austin’s for-sale housing market, too: According to the Austin Board of Realtors, houses for sale in the city spent an average of 84 days on the market this February, compared to 28 days the same time last year. Austin remains Texas’s most expensive rental market and will likely retain that spot due to low supply and ongoing interest in its quality of life. Still, we can expect a continued deceleration of the city’s once-stratospheric rent hikes.
Boise is already seeing median price increases again so far this year after dropping through the winter. This city is always growing and there is a severe shortage of housing in the Metro area. Boise won't go bust, it will always boom and grow, but the increases will be more sustainable. It is one of the fastest growing cities/regions in the nation and will probably continue to be so well into the future.
The market in Boise has been dropping for a while since we entered the post-COVID phase
Quote:
The ‘feeding frenzy’ is over: Boise home prices drop, options expand as market cools
When it comes to "Zoomtowns" Boise was groundzero. A huge chunk of people coming in and driving up the costs were almost exclusively all people from out of state and other high CoL areas, nothing against Boise but it was pretty obvious that wasn't going to last for long once companies started requiring hybrid or even employees to come in once a quarter sort of thing.
When it comes to "Zoomtowns" Boise was groundzero. A huge chunk of people coming in and driving up the costs were almost exclusively all people from out of state and other high CoL areas, nothing against Boise but it was pretty obvious that wasn't going to last for long once companies started requiring hybrid or even employees to come in once a quarter sort of thing.
Austin’s median home price is down somewhere in the 7% range. There was a separate set of data that I came across that pointed to Austin as ground zero of the ongoing correction, though it looks like the Bay Area has taken over at 10%. Every other city east of Colorado has seen appreciation. Austin is the only outlier.
What’s interesting is that Austin’s suburbs are still relatively affordable, especially given income levels of the metro. It still seems like a good place to buy.
San Francisco’s correction is interesting, if only because a 10% hit on a $2M SFH is steep in raw dollars. I do wonder if it’s a result of lay offs and company devaluation, or if it’s really just buyer confidence.
On the other end of the spectrum, you have Miami at a >12% appreciation YoY. Maybe Miami has more staying power than most of us believed. It doesn’t look like it’s going to repeat what happened in 2008, that’s for sure, though I’d assume the growth will slow down at some point soon.
In the end - As someone alluded to upthread - Cheaper markets that have seen only modest appreciation are the ones in hyper growth mode now. Buffalo, Indianapolis, Grand Rapids, Hartford, Kansas City, Worcester. These cities help absorb the interest rate hike, and give folks the option to choose the neighborhood and house.
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