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This is not 2008 and there are numerous articles stating the reasons why not. Keep dreaming.
True each real estate cycle has its own characteristics. I have bought and sold houses for a couple decades. Few people saw 2008 coming. When the next correction comes few will see it coming either. Yes the liar loans, popped the bubble. But without that bubble the damage would have been much more minimal. My guess is if it happens again soon it will be a spike in interest rates that will do that. Interest rates spike and new buyers have to pay a lot more monthly for a home at the same price. So prices drop and people get underwater and walk away. And then people turn from being overly optimistic about housing to overly pessimistic.
We have a bubble like before 2008. Will it pop, why and when is the question.
Here in Metro Denver, Colorado, not really. I'm not in the market, but I keep an eye on it. I live in a neighborhood that isn't fancy, but it's on the west side of town (closer to the foothills) and inventory is low. The last couple of houses to sell in my neighborhood have sold for $100K+ over asking, which is crazy. I've seen a few minor price reductions for homes that have sat on the market for awhile, but nothing that indicates a slowdown here.
True each real estate cycle has its own characteristics. I have bought and sold houses for a couple decades. Few people saw 2008 coming. When the next correction comes few will see it coming either. Yes the liar loans, popped the bubble. But without that bubble the damage would have been much more minimal. My guess is if it happens again soon it will be a spike in interest rates that will do that. Interest rates spike and new buyers have to pay a lot more monthly for a home at the same price. So prices drop and people get underwater and walk away. .
Why would people walk away if they're locked in before rates rise (which I also think they will)? Being underwater only matters if you're selling or tapping the house equity to live, no?
Overview: you are preapproved/qualified for a loan and have a loan officer. Contact Ribbon. Ribbon makes all cash offer for the house on your behalf. House closes, you have up to 180 days to get the financing and buy the house from Ribbon at the original contract price. Meanwhile, you rent the house from Ribbon. Much more involved, but what the heckle?
Why would people walk away if they're locked in before rates rise (which I also think they will)? Being underwater only matters if you're selling or tapping the house equity to live, no?
It depends. It would have to be a prolonged down turn.
Like I said people overreact. Right now there is panic buying. I have talked to people in person and seen interviews where they are buying no matter what. Prices end up getting pushed above really what they are worth. That is one issue. Then interest rates rise.
True. If you have a fixed rate loan at a good rate and you are not selling or need an equity loan it does not matter. Or should not matter. We have people buying no matter what assuming prices will keep going up forever and they need to buy ASAP. Opposite happens if prices really start dropping. People just want to get out of paying for this over priced home that they should have never bought. In their mind prices will take forever to go up to the point where they break even. Economy is weak, inflation is roaring except housing is not going up because interest rates keep going up. New cars stop selling. They are barely able to make the monthly mortgage payment and just give up and walk away. Their home is essentially worthless because if they sold it they wold owe the bank money.
I see some slow down here. Auburn area, WA. As in - before, For Sale will appear and sold in day or 2. And I am in high end area, houses price at 600K and up into millions.
Now, for sale signs appear - and stay. I drive past same signs for few weeks now.
And we are in very sought for area, it's nice farmland with large properties, right next to civilization.
My gut tells me, pricing momentum still holds sellers hostage but, buyers stream is exhausted.
Why would people walk away if they're locked in before rates rise (which I also think they will)? Being underwater only matters if you're selling or tapping the house equity to live, no?
After the last crash, there were private lenders offering 15 year fixed at 10 5/8, with 30% down, and 30 points... yes, 30. Seems crazy, but consider people were paying 20k for houses, where the previous owner/borrower had a mortgage for 150k...at about 6%, but even if it was 0% the shark bait is much better off. Anyone with a mortgage has the potential to default, often strategically. Down-payment is still the best indicator of potential for default. That is why the FHA system is so vulnerable. 20% down would have kept the six hundred pound gorilla in his cage decades ago.
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