Is the realestate bubble bursting?

[sleddy]

Even considering that it's been 8 years since I bought my home, still these asking prices are crazy; the sellers must have a screw loose. Houses simply are not getting snapped up immediately like they once did and I'd imagine they're going to need to drop those prices considerably.

I don't think they (or their 'R' word) take into account the finance cost for the prospective buyer. There seems to be an almost entitlement to value going up automatically.

 

[REWahoo]

Here are four cities where Goldman Sachs says the housing market could ‘crash’

The bad news is that a market crash, like the one at the beginning of the financial crisis, is unlikely. But if you have your sights set on four particular markets [to pick up a RE bargain], you just might get your wish.

Goldman Sachs predicted four U.S. housing markets could experience a crash similar to the one that sent home values plunging in 2008.The investment bank singled out San Jose, Austin, Phoenix and San Diego as the markets where home values could drop more than 25%.

 

[finnski1]

When prices are going down, it's a great time to move upward. (And vice versa.) Particularly if you have cash and thus have no concern over interest rates.

So we're actively looking!

Unless your moving to a lower cost area I don't see how it makes any difference.

That $1mil house now sells for $800k but your $1mil house also sells for $800k?

 

[2HOTinPHX]

Open Door is not a remotely accurate way of judging the housing market.

Very true but it is still interesting to look at.
Here is another data point. A unit I mentioned some time ago. Purchased by Open Door and still on the market 230 days later and almost 100K less than they bought it for.
https://redf.in/UBIItO
There are other units in the same complex that have sold for around the same current asking price that looked to be in better condition.

 

[2HOTinPHX]

Unless your moving to a lower cost area I don't see how it makes any difference.

That $1mil house now sells for $800k but your $1mil house also sells for $800k?

It could help in an area where property taxes are based on selling price?

 

[Out-to-Lunch]

Unless your moving to a lower cost area I don't see how it makes any difference.

That $1mil house now sells for $800k but your $1mil house also sells for $800k?

But that is not "moving up."

I am in this situation. My once-$425k house is now ~$350k. But I am looking at once-$800k houses that are now $650k.

 

[finnski1]

But that is not "moving up."

I am in this situation. My once-$425k house is now ~$350k. But I am looking at once-$800k houses that are now $650k.

Fair enough. My point was that it is all relative. If you can now buy the previous 1.2 mil house for 1 mil but also give up a similar amount selling in a lower market , you could do the same in a hot market and sell yours for more but pay more as well. So unless you move to a LCOL area what have you really gained?
Maybe my assumptions of the discounts are off.
After all I've been in the same house for 25 years already with no plans of selling/moving.
So if you take the same % discount and not same dollar amount then moving up would save you some over what you would net otherwise.

 

[MichealKnight]

I have a few rental townhomes - just reporting on that tiny microcosm, not using t to make conclusions about the current state of market.

Suburb of Atlanta - 3bed/2.5 Bath townhome complex.

2 years ago I bought units at $247k.

At the apex 1 year ago - they would've sold for $338k-340k in about 10 days.

Today....

They are selling from $300k-315k and usually on market for 25 days. I have seen the latest listing at $299k. Dunno why - when one just went under contract at 305K last week.

Down the street..... there's newer complexes that are completed, or completing construction. These are more like Millenial Mayberry - replete with the stainless steel, granites, puppy trails, "gym" etc. 3bd/2.5 baths there - have dropped noticeable. What was going under contract at 425k a year ago - I'm seeing them go under contract around $365-$385k this week.

Schools of thought from local professional I deal with: It could be that buyers will just get used to higher rates, higher costs. After all - people have indeed accepted higher prices in just about everything else. I'm not ready to make this my theory to operate on - but I feel a SLIGHT chance of a 'shadow foreclosure' market coming up. There will be *some* more job losses. Also, there is a handful of people out there who got their Covid money, quit their job, decided to start an underwater basket-weaving business on Etsy - -- and sadly, they might realize it's not gonna work out. On one hand that hurts my property values - but maybe it creates buying opportunities as I have no doubt about population and demand.

I still haven't been able to buy a rehab-house. Perhaps made 12 offers in the last 6-8 months and keep getting outbid. Some of the ones I lost have been rehabbed......and are still on the market and I feel will be a loss. If things dip a bit more I'm really hoping to explore this part of real estate.

 

[SunGuy]

Not here in FL at least, homes in the place I rent are selling cash offers over $50k above listing.

 

[JoeWras]

Pfft! Pop! There it goes.

Neighbors were selling in minutes a year ago, days in the summer. Not anymore.

Latest neighbors both have their homes on the market for 60 days. Neighbor #1 dropped their price 6% on Feb 1. Still no sale. "Neighbor" #2 is a flipper and isn't budging. Good lucky, buddy, you will be taking a loss. Sorry for your pain.

 

[Freedom56]

Our condo in Florida sold in an all cash transaction at 6.8 times what we paid for it in 2011 and above our ask. We had two cash back-up offers. Our condo was rarely used and in mint condition. Newer properties that are priced well, sell fast in South Florida.

 

[Winemaker]

After showcased since July 22 for $479k, a neighbor's house closed recently at $392k. Another neighbor had their house up for sale for $324k, was under contract within a week.

 

[tulak]

Still relatively hot in my neighborhood. A 850k not great house went pending under a week.

I keep hoping that we’ll get a drop, but so far it hasn’t happened.

 

[kgtest]

Simmering down here in Minnesota. Many homes are selling for under the list price now, vs last year they were selling for over list.

 

[JoeWras]

Pfft! Pop! There it goes.

Neighbors were selling in minutes a year ago, days in the summer. Not anymore.

Latest neighbors both have their homes on the market for 60 days. Neighbor #1 dropped their price 6% on Feb 1. Still no sale. "Neighbor" #2 is a flipper and isn't budging. Good lucky, buddy, you will be taking a loss. Sorry for your pain.

Neighbor #1 just got an offer right at 58 days. The price dropped worked. We'll see if it goes through. The deal will be at about prices from 12 months ago, so call it flat for the year, but down from late Spring.

It is just starting to look like a return to sanity right now.

 

[ShokWaveRider]

Just an update, all seems pretty stable here in coastal St. Auggie. Small Stick homes with copper pipes (There have been a lot of slab leaks in copper piped home here) in the older (~1995 - 2000) section of our development now coming up for sale at around ~$700 - $800k. Out of 600 homes there were only 2 or 3 for sale, this is our high season for home sales. Larger Concrete homes post 2002 code updates and PVC pipes are few and far between, the last one 2,700sqft sold for $1.1m last month, closes this month and has no pool. We would like to downsize, but there is no where to move to that is even close to what we have from an accessibility standpoint to all services and healthcare.

 

[MarieIG]

The inventory is low in my neighborhood, there are a few price cuts; but buyers for the most part seem uninterested.

 

[cj1717]

Not here in FL at least, homes in the place I rent are selling cash offers over $50k above listing.

FL real estate is very quickly becoming similar to CA. Its insane!

 

[bmcgonig]

FL real estate is very quickly becoming similar to CA. Its insane!

Except that FL doesn’t have Prop 13 [emoji3]

 

[atmsmshr]

Except that FL doesn’t have Prop 13 [emoji3]

The Save Our Homes property tax cap is an amendment to the Florida constitution that limits the annual increase in the tax assessment of homestead property to a maximum of 3% of the prior year’s assessment; and its purpose is to encourage the preservation of homestead property and to ensure that Floridians will not lose their homes on the tax block because of rising values of property in Florida. The Florida Constitution was amended effective January 1, 1995, to limit annual increases in assessed value of property with Homestead Exemption to three percent (3%) or the change in the Consumer Price Index, whichever is lower. A change in property ownership will effectively “reset” the Capped Value to full market value.

 

[audreyh1]

Fortunately for DB, who recently relocated, the real estate bubble had not yet burst. Their greater ATL area home had three offers above asking price the first day on the market. They accepted one and closed in less than 2 weeks.

 

[JoeWras]

We're seeing it pick up around here too. Prices have stabilized after a modest drop of a few percent.

It is becoming obvious that rates are unlikely to crater any time soon. Might as well buy that house.

I remember my cousin (brand new CPA) complaining about buying their starter home at 10% (1970s). Turns out they made a wise move, it only went up from there. They kind of went through a capitulation process.

 

[Golden sunsets]

The number of sales in our area is down considerably year over year, but inventory is down even more. Prices continue to be up either high single digits, or low double digits year over year. There is an extreme housing shortage in our area. Overask sales continue, but only for properties in good condition and in the right locations. Small price deductions are more frequent. Days on market continue to be less than 30.

 

[pb4uski]

Interesting tidbit from recently spending a day looking at new homes. Agent mentioned that as interest rates have gone up that the builder has been reducing prices. It seems that they have a target cost per month for the customer and they have enough flexibility in the pricing to reduce prices as needed to keep that cost per month for the customer steady as interest rates increase.

 

[ShokWaveRider]

Interesting tidbit from recently spending a day looking at new homes. Agent mentioned that as interest rates have gone up that the builder has been reducing prices. It seems that they have a target cost per month for the customer and they have enough flexibility in the pricing to reduce prices as needed to keep that cost per month for the customer steady as interest rates increase.

Only the Pre-2000 homes (Hurricane and water pipe codes were significantly updated in 2001), and those not built using concrete block, are taking longer and only those desperate to sell are selling for a little lower than asking, not much though.

I notice more and more folks posting their homes for sale by owner on Zillow or Redfin and offering selling realtors 2%-2.5% if they bring a buyer. you can buy a MLS listing for 3 or 6 months for very little $ if you need too. But being as all local realtors get notified when you post for sale by owner, it is not really necessary.