Sarasota's Median Sales Price for Single Family Homes reaches $500,000 (renters, mortgages)

[MOforthewin]

Just saw Miami Herald showing price per sq foot prices just dropped a bit last month in Monroe County as well. They did in Dade county too last month.

[wondermint2]

Lumber prices fall to their lowest level in 2022 as the highest mortgage rates in 13 years dent housing demand

https://news.google.com/articles/CBM...S&ceid=US%3Aen

- Lumber prices fell below $800 on Monday to hit their lowest level of 2022.

- The 30% year-to-date decline in lumber prices comes as mortgage rates hit a 13-year high.

- A recent homebuilder survey revealed a slowdown in demand due to surging mortgage rates.

[BeirksDentley]

no kidding? prices might fall?

[MOforthewin]

Originally Posted by wondermint2

Lumber prices fall to their lowest level in 2022 as the highest mortgage rates in 13 years dent housing demand

https://news.google.com/articles/CBM...S&ceid=US%3Aen

- Lumber prices fell below $800 on Monday to hit their lowest level of 2022.

- The 30% year-to-date decline in lumber prices comes as mortgage rates hit a 13-year high.

- A recent homebuilder survey revealed a slowdown in demand due to surging mortgage rates.

But will builders really lower their prices that much? I doubt it. Usually when prices are raised on something due to inflation they rarely go down in price. Price of OJ is up I noticed. I doubt they lower the price even if fuel prices drop.

[BeirksDentley]

The countervailing force in housing pricing strategies is far more complicated than that of commodities and/or other consumer/retail goods. Namely, for instance, access to capital, and debt servicing for the builders themselves. They too, borrow then need to repay, thus the pressing need to turn over inventory, pay suppliers, pay employees, pay for marketing, insurance, taxes, fees, etc etc.


If the "cost of money" through inflation goes up (and it is right now), the need to take markdowns will likely accelerate, not always, but publicly-traded large builders need bigtime cashflow to boost earnings for their stockholders from quarter to quarter. These builders may decide that during the following quarter (or month, or year) to generate cash and start heavily or gradually reducing prices to incentivize buyers. These larger, publicly traded builders don't behave like local, privately-owned smaller builders, but they set the tone (not necessarily the trend). They have land acquisition costs, infrastructure costs etc etc. They can't or shouldn't tie up cash in any structure - they must turn the money to maximize velocity/cashflow.



Debt is not their friend, and higher rates of interest paid will certainly factor in price reductions in order to facilitate debt servicing.


Higher interest rates will dictate pricing decisions. It always happens that way, throughout most business sectors/models and industries (especially publicly-traded ones).


My take.

[BeirksDentley]

Also, keep in mind that large publicly-traded builders are capital-intensive entities and utilize many types of financing.


A large portion of these financings/borrowings are not fixed-rate longterm notes. Many are in fact floating-rate/adjustable debt, based on various base-rates+, thus they must remain nimble and smart. Interest Rates are UP, and will continue to increase, and certainly not decrease.


This is not a formula for steadily increasing, or stable housing price models. They know that. Many potential buyers don't. Many Sellers do.


Rate increases, Inflation, Deficit Spending are virulent, nasty viruses for the housing market and for the health of the economy, and of course, the quality of life and COL.


My take.

[MOforthewin]

Recently looking on Zillow and some of the higher priced homes like 600k on up I've been noticing a few price cuts the last few weeks, such as those on salt water Canals here in my area, Punta Gorda. Even the blank lots on the PGI canals are having some price cuts now. One house on a salt water canal in PGI was listed 750k, and down to 719k now, had a boat lift too and all. Didn't have a pool so maybe that's why it wasn't moving.


The Z estimate on my house went up to 445k now, high end is 472k which increased again the last 30 days which I'm shocked. It's in my mom's name but if something happened to her and I decided to sell the house and pay the remaining mortgage off I could move back to MO and pay for a house in cash even after the mortgage.


I wonder where my home will peak at if this is the peak.

[Trying941]

Originally Posted by MOforthewin

Recently looking on Zillow and some of the higher priced homes like 600k on up I've been noticing a few price cuts the last few weeks, such as those on salt water Canals here in my area, Punta Gorda. Even the blank lots on the PGI canals are having some price cuts now. One house on a salt water canal in PGI was listed 750k, and down to 719k now, had a boat lift too and all. Didn't have a pool so maybe that's why it wasn't moving.


The Z estimate on my house went up to 445k now, high end is 472k which increased again the last 30 days which I'm shocked. It's in my mom's name but if something happened to her and I decided to sell the house and pay the remaining mortgage off I could move back to MO and pay for a house in cash even after the mortgage.


I wonder where my home will peak at if this is the peak.

I know very little about the 33982 area, which might be yours. Nor do I know your home - whether it would appeal to a retiree or a working family, both or someone else. So, not going to guess.

I can say the under $500k homes will keep their value as long as the employment numbers stay up, even with some inflation. It would take way higher interest rates, a credit crisis or higher unemployment to affect your home as workers need a place to live and rents will keep rising as employment stays up.

[MOforthewin]

Originally Posted by Trying941

I know very little about the 33982 area, which might be yours. Nor do I know your home - whether it would appeal to a retiree or a working family, both or someone else. So, not going to guess.

I can say the under $500k homes will keep their value as long as the employment numbers stay up, even with some inflation. It would take way higher interest rates, a credit crisis or higher unemployment to affect your home as workers need a place to live and rents will keep rising as employment stays up.

my development is a mixture of all ages, but since it's now been completed I'd say it skews older simply because I live in an area that has one of the highest median ages in the entire state. I'm 33950.


The people working age, under 65 in my sub division seem to work for the school system, and have a few law enforcement officers too. They actually drive to Cape Coral, Lee County for work due to cheaper housing here. Pretty cushy jobs so unemployment doesn't affect them as much. Actually around here the better paying jobs, jobs with job security are with the county or government.


We do have a bunch of houses going up in the northern part of Charlotte County. If demand drops and lumber prices fall it could cause mine to fall a tad if the demand drops due to more competition since there will be more houses in the same price range that are newer.


these houses that are in your 600k on up range many were priced high.



Always better to price higher then lower the price if you have to.


The million dollar house simply are not moving fast as much. Even in Naples they take time to see from what I'm seeing. Then again that's a very different segment when getting up in the millions. I suspect a number of people with houses that are in the millions simply listed them due to the hot market hoping to cash in big and they have a second house somewhere so they can bank the big profit and then buy again when it cools off.

[loves2read]

Originally Posted by MOforthewin

But will builders really lower their prices that much? I doubt it. Usually when prices are raised on something due to inflation they rarely go down in price. Price of OJ is up I noticed. I doubt they lower the price even if fuel prices drop.

There was clip in the news about recording meeting between CEOs where they were saying they should ramp up pricing (even if there was no budget/supply need for increase) because the “inflation” talk would cover it—and lead to higher profit margin

There are some companies that are not hurt nearly as badly as the news might make you believe and just like the crash in 08 allowed them to cut employees close to retirment w/o being charged with age discrimination they are using the cover term inflation to pad their bottom line
Will it go to wages and improvements—not likely—stock buybacks, CEO perks, and other uses more likely