MA Spring RE will start early & be flooded with inventory (real estate market, renting)

[traffic_lover]

I see a flood of inventory finally meeting demand and stabilizing, even reducing prices this spring. It's a combo of factors:
1. Ultra peak home prices. Ppl feel like they can make a small fortune on their home & some have waited since 2004 for prices to rebound. 10 yrs of backlog inventory waiting to hit market as Ppl finish renovations/prep to hit market
2. Rising interest rates (finally)
3. Retiring/downsizing baby boom
4. Reduced foreign buyer upward pressure as global markets moderate
-listing will ramp up fast as early January especially if mild winter (El nino)
This is a slightly contrarian view as I feel like EVERYBODY has adopted the mantra that low inventory + unsustainable price increases are the norm. Just when you think you have it figured out the market flips.

[NS-GR]

I like your optimistic view, but:
-Do you really think that the Feds will mess with the interest rates before the election of Nov 2016?
-I do not understand the " Retiring/downsizing baby boom" argument. Why this spring will be any different than any other year? Are more people going to retire for some reason? I think it is highly unlikely.
-if "global markets moderate", I would assume that people will be more willing to buy real estate (instead of investing in the stock market, for example).
In addition, the fact of the matter is that there are only few States and few areas that the real estate market is so unbelievably expensive. Unfortunately or fortunately (if you are a seller) Mass is one of them...
Finally, if the Feds increase the rates but the house prices drop, what difference would it make anyway? Instead of giving $$ to the sellers, we would be giving $$ to the bank...

[Parsec]

Are you still looking (pt. 2) or are you just renting right now and playing the waiting game? I hope your predictions come true if you're still looking, but people have been predicting exactly what you stated for years. It just hasn't happened...

[Whatsnext75]

Where is this flood of inventory?

[gf2020]

Care to make a wager on those assumptions?

[chicagoliz]

As someone starting to search for houses in the area, I'd love it if this were true.

[MikePRU]

I just don't see this happening. I've been waiting about 3 years now for sky rocketing prices to inspire more people to sell and it just hasn't happened. It seems every year about this time there's a lot of talk about the Fed raising rates and that has happened yet either.

My only thought is the level of demand for homes that we've been seeing cannot be sustained over the long term. Spring next year will likely be quieter than last year (i.e. fewer "bidding wars" as people like to call them). However, prices will likely continue to rise albeit at a slower pace.

I'm no economist but I do have my feet on the ground in the real estate world and this is how I'm seeing things trend.

[vtecluder617]

Originally Posted by traffic_lover

I see a flood of inventory finally meeting demand and stabilizing, even reducing prices this spring.

As someone who is planning on placing their house on the market in March, I hope you're wrong!

[traffic_lover]

Originally Posted by gf2020

Care to make a wager on those assumptions?

I'D bet a 30 pack of bud light the interest rate starts to hike in Dec. @ 0.25 pt each quarter from there.

Prices are at a whole different level vs. 3 yrs ago and wages & inflation haven't kept pace. With prices going up so fast, sellers keep waiting for next spring b/c prices will be even higher. Agreed, This wait it out has been for years now. At some point, likely when interest rates hike, the price momentum will stop & level off and sellers will feel like they're at a peak. Many sellers won't be buying into same peak market, but will be downsizing, retiring, moving out of MA etc. The flood of inventory into the market will be met with demand tempered by higher interest rates. Higher supply, lower demand, lower prices, and the cycle shifts. This is cyclical like every other economic phenom

[Whatsnext75]

what are interest rates like now?