Is the realestate bubble bursting?

[aja8888]

The above are percentage increases in inventory.

I would think it better to compare actual numbers of homes on the market compared to historical numbers. I would also like to how permits for new units are doing?

I suspect there is still a substantial shortage of affordable units In many areas.

For new housing:

https://wolfstreet.com/2022/08/23/s...gh-heaven-worst-since-peak-of-housing-bust-1/

The plunge in home sales is just stunning. Sales of new single-family houses collapsed by 12.6% in July from the already beaten-down levels in June, and by nearly 30% from July last year, to a seasonally adjusted annual rate of 511,000 houses, the lowest since January 2016, and well below the lockdown lows, according to data from the Census Bureau today.

New house sales plunged in every region compared to July last year. Note the West, oh dear:

Northeast: -37%
West: -50%
Midwest: -23%
South: -21%.

 

[stepford]

In my area a lot of sellers unable to get the sky high offers of a few months past are pulling their listings. The question is whether buyers will now happily gobble up whatever inventory is left (in which case prices won't drop much at all) or we enter into a standoff between patient buyers and sellers, both waiting to see who blinks first. If the latter happens we could see much more substantial declines. I suspect we won't really know which until next spring's selling season.

 

[aja8888]

In my area a lot of sellers unable to get the sky high offers of a few months past are pulling their listings. The question is whether buyers will now happily gobble up whatever inventory is left (in which case prices won't drop much at all) or we enter into a standoff between patient buyers and sellers, both waiting to see who blinks first. If the latter happens we could see much more substantial declines. I suspect we won't really know which until next spring's selling season.

I used to live in Ventura County (T.O.)....great place!

Once the FED continues with their fed funds rate increases over the next few months, you can expect mortgage rates to rise putting a further damper on prices and sales.

 

[Montecfo]

Sorry that this was your son's first home experience -- but as you said at least it's in a good area and while the 10k stings - it could have been worse.



I'm going into rehabbing very eyes open - I realize I'm a total rookie. I realize therefore I'll be ceding some profit margin because I probably won't fish out the best deals, and odds are I'll pay a bit more for the rehab work due to lack of knowledge. But gotta start somewhere. Bring very conservative - and luckily the broker/property manager I have a good relationship with is equally conservative and I suspect that's why i'v e probably missed on a few -- but yeah, I'll keep the diligence clauses on my offers.



Some days I feel like getting impatient because I want to feel like I'm "in business" again - - but first run is don't shoot yourself - hence - I'm still waiting.

In my experience flipping you made your money at the purchase. Stick to your guns and expect much sifting to find those unique properties.

 

[livingalmostlarge]

Stick to that. My son bought his first home last year and after losing 4 bids became desperate and waived all diligence. Even though the home was only 3 years old, it still required about $10k of work, including a relatively minor foundation repair. He also paid 12% over asking price in an already very expensive market (desirable Seattle suburb). I’m glad they found a home in a great area, but I’m not thrilled with the amount of debt he took on.

So what happened to the value? Is it up or down?

 

[TripleLindy]

So what happened to the value? Is it up or down?

It’s up significantly, but they have no plans to sell, so the increased value results in higher property taxes.

 

[SunnyOne]

I've been thinking about this topic a lot in the past few days. I may be fast approaching the point where I just want my home to be shelter - no speculation in either direction. I am looking at a small town which defines sleepy - likely way way off the radar of speculators, investors, corporations or youthful nomads - a place nobody else cares for except those who grew up there.

 

[ncbill]

Stick to that. My son bought his first home last year and after losing 4 bids became desperate and waived all diligence. Even though the home was only 3 years old, it still required about $10k of work, including a relatively minor foundation repair. He also paid 12% over asking price in an already very expensive market (desirable Seattle suburb). I’m glad they found a home in a great area, but I’m not thrilled with the amount of debt he took on.

The seller didn't spring for one of those as-part-of-the-sale home maintenance plans?

They're as low as $500 to the seller.

 

[TripleLindy]

The seller didn't spring for one of those as-part-of-the-sale home maintenance plans?

They're as low as $500 to the seller.

Not in that market. Seller had no incentive to include anything. At that time, there was a bidding war on every home. My son paid $200k over asking price and felt fortunate to get it, as new construction for the same floor plan was $300k over what he paid.

 

[Winemaker]

A 5 bedroom 4 bath brick house the next street over has been on the market for 50 days, has dropped in price 3 times from $480k to $450k. Boom market or not, I thought it was overpriced when it listed.

 

[MarieIG]

Not in that market. Seller had no incentive to include anything. At that time, there was a bidding war on every home. My son paid $200k over asking price and felt fortunate to get it, as new construction for the same floor plan was $300k over what he paid.

We sold our house last year "as is."

 

[ExFlyBoy5]

We sold our house last year "as is."

Yeah, things are *slightly* different than they were a year ago.

DW has some investors breathing down her neck because they are now having rental properties that are sitting for 3+ weeks...which is becoming the norm in most of the markets she oversees. Much of it can be attributed to school being back in, but the days on market are quite a bit higher than this time last year.

The investors (large institutional types) have slowed down on acquisitions as well and DWs company has laid a number of folks in that department. I am thinking it might be a wild ride before all is said and done.

 

[JoeWras]

We've got inventory in the neighborhood, first time in 3 years!

House 1 had a deal fall thru and now is listed again. The contingency failed. I suspect we're going to see more of those dominos hit each other.

House 2 listed a few days ago and still no contract. For the last 3 years, contracts were out by the next day. I personally think it is way overpriced and the Realtor is still working on the rising prices assumption. We'll see, I'm watching it closely because it is a direct neighbor of mine.

 

[Starsky]

Given the pent-up demand for new homes, it's not surprising that builders are active in the markets on the chart. They are prime areas for real estate development in this economy. What most of them have in common is the need for skilled workers, and the availability of lots of relatively cheap and available acreage to develop. These are all places that are growing because of people who want to escape the affordability crisis in other more expensive markets. Corporations are moving there too because of the new skilled labor force, lower costs and local government incentives.
I think it's unlikely a residential real estate crash is in the cards and markets will simply revert to an equilibrium that resembles something more typical of the pre-COVID years. If people have to wait three weeks instead of three days to sell their homes, it is technically a market slowdown; but it's still a very healthy rate - perhaps even more healthy than it otherwise should be.

 

[captain3d]

Mortgage rates going up by 3% mean house prices down 30% to balance those monthly payments.

Hard to work around that

 

[JoeWras]

Poking around this morning, and noticing definite downward pressure in our market which had been the hottest of hot in the nation.

Opendoor is about to take a bath on a property. Bad timing:
- Closed 6/12 at $393k
- Offered 6/23 at $450k
- a few price cuts and failed transactions since
- Offered 9/5 at $383k

 

[Vincenzo Corleone]

In my postal code, I see this happening more frequently now. In reverse-chronological order:

Date	Price	Status
9/2/2022	$1,000,000	Price change
6/1/2022	$1,099,900	Listed
6/1/2022	$1,099,900	Off-market
4/29/2022	$1,099,900	Off-market
1/10/2022	$1,099,900	Price change
11/16/2021	$1,175,000	Listed
9/30/2018	$1,595,000	Sold

Edit to add: the tax assessed value of this property in 2022 is $1,209,700.

 

[daylatedollarshort]

Our house is down $150K now in just a few months, according to Redfin. The real estate bubble is bursting in our neighborhood.

 

[audreyh1]

How is that possible?

I guess there was a heckuva spike!

 

[Ian S]

How is that possible?

I guess there was a heckuva spike!

Yup, according to Zillow estimates, our home is off nearly $100K from the peak earlier this year. Still, it's up hugely since we bought in 2019.

 

[2HOTinPHX]

I haven't been keeping track of things on Redfin for a couple of weeks now. Last night I decided to check on area we were looking at perhaps relocating to and was kind of shocked to see about 50% of the listings little icon pictures showing price drop. Even some new homes under construction were showing price drop. The little Ahwatukee condo I mentioned earlier has had another large price drop. Market has definitely cooled off here from what I am seeing.

 

[jgman]

Neighbor sold his house two months ago. Sold in one week 50k over asking price. Just put my house up for sale this coming weekend. Have 7 visits scheduled for tomorrow. Market is just as strong as last year.

 

[copyright1997reloaded]

Neighbor sold his house two months ago. Sold in one week 50k over asking price. Just put my house up for sale this coming weekend. Have 7 visits scheduled for tomorrow. Market is just as strong as last year.

Real estate is local. The market near D.C. might be as strong as last year. After all, the IRS has a lot of people to hire.

So while your local market might just be as strong as last year, that doesn't mean that most real estate markets are.

 

[travelover]

My elderly neighbor died early this year and his kids have been slowly getting the house ready and recently had an auction of his old stuff. It occurs to me that their foot dragging has cost them dearly as the decrease in prices for the housing market far outweighs what ever they got for his old junk.

 

[Winemaker]

A 5 bedroom 4 bath brick house the next street over has been on the market for 50 days, has dropped in price 3 times from $480k to $450k. Boom market or not, I thought it was overpriced when it listed.

Another $5,000 drop today.