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Ideally yes, but I'd argue that most realtors are greedy af and for what naturally should occur to happen will take a lot longer than the inverse, or a crash would have to happen. I'd love to see people collectively not buy forcing a correction, but I have a feeling that'd be a doosey on the economy.
So its the agent's greed that drives the market??
Last edited by TimtheGuy; 09-10-2018 at 01:25 PM..
Never claimed to be an expert but simple logic requires willing and able buyers and sellers for a sale to occur...
Real Estate has always been cyclical... I have gone through several ups and downs.
Agents don't get paid unless the property sells...
I've heard many times that agent and broker often sell short and don't hold out for the last dollar/highest price because the objective is getting the property sold... not how much it sells for.
As long as demand outstrips supply prices will continue to rise. Slowing home sales are reflective of lack of supply, not lack of demand. Prices continue to rise if there are fewer homes available to buy and nobody is willing to sell.
The only thing capping housing prices currently is rising mortgage rates. This is a significant factor. They are planning 2 more interest rate hikes in 2018 that could propel mortgage rates above 5%. The prospects of higher rates may actually put upward pressure on prices given that if people anticipate higher future rates they will buy sooner. However, affordability will be affected thus reducing the number of qualified buyers.
Due to the above factors, I think housing prices will continue to rise at a much slower pace going forward. Maybe 3-5% annual rises instead of double-digit increases that we saw in previous years. The supply/demand fundamentals are too strong for a crash. Historically, housing prices tend to rise about 5% annually. I think it would be healthy economically to return to these levels. The huge double-digit gains of the last 7-8 years are probably for the history books at this point.
"There is, however, in this otherwise disappointing news a silver lining of sorts. Because people have backed away in response to higher prices and deteriorating affordability, there is no sign of speculative froth. In the runup to the crisis of 2008-09, people bought despite high prices and low affordability on the, as it turned out false expectation that prices would rise and they could make a profit. Today’s responsiveness to price and affordability speaks to a more balanced and less dangerous attitude and also offers comfort that at least there is little risk of a speculative bubble."
"There is, however, in this otherwise disappointing news a silver lining of sorts. Because people have backed away in response to higher prices and deteriorating affordability, there is no sign of speculative froth. In the runup to the crisis of 2008-09, people bought despite high prices and low affordability on the, as it turned out false expectation that prices would rise and they could make a profit. Today’s responsiveness to price and affordability speaks to a more balanced and less dangerous attitude and also offers comfort that at least there is little risk of a speculative bubble."
HAVE WE FINALLY LEARNED???
Unless there's data that suggests debt to income ratios are lower today than in 2008 I would say no, we have not learned.
Lots of homes still selling for all cash... not sure how close to the 40+% it was of a few years ago... but, still lots going for cash.
I recently bought and put down 50%... with no plans of defaulting...
This area had tons of defaults... one or more on every city block... most that walked had refied several times... my neibbor did 5 times in 8 years... then walked away.
I've heard many times that agent and broker often sell short and don't hold out for the last dollar/highest price because the objective is getting the property sold... not how much it sells for.
I'm in the process of selling a condo right now. We pushed for a pretty aggressive listing price, as there is nearly no inventory and properties in this market are flying off after just a few days listed. We got a kind of lowball offer, and we felt we had to kind of push our agent a little in counters... there's definitely a feeling that accepting an offer now is a bird in the hand, while trying for another $5-10K tomorrow is the two in the bush. We wound up about where we wanted to be, but because we just refused to play along.
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