audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well if no new inventory is becoming available, wouldn’t that support prices?
Is the realestate bubble bursting?
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Winemaker
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The neighbor's house dropped another $6,000 and they changed realtors, removed a wooden playhouse and did some landscaping.
Gremlin
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I don’t know what “no new inventory” meant in the previous comment, but I assume they were referring to new construction. I can only speak to my area. My DH works at a bank in the construction loan department. Builders were cranking out homes as fast as the could and selling them even faster. Sales have slowed significantly and builders aren’t building like they were.
jfn111
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MLS data for last 7 days-
Coming Soon (215)
New Listing (1812)
Back On Market (171)
Price Decrease (1439)
Price Increase (62)
Pending (1432)
Closed (1589)
Cancelled (351)
Expired (163)
The Minneapolis and Saint Paul market is chugging along but look at the number of houses that have had a price decrease. (1439). We price houses using comps from the last 6 months but the markets changing fast.
Coming Soon (215)
New Listing (1812)
Back On Market (171)
Price Decrease (1439)
Price Increase (62)
Pending (1432)
Closed (1589)
Cancelled (351)
Expired (163)
The Minneapolis and Saint Paul market is chugging along but look at the number of houses that have had a price decrease. (1439). We price houses using comps from the last 6 months but the markets changing fast.
copyright1997reloaded
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Canada?
I just recently learned that "most" mortgages in Canada are 5-year variable rate, and that all mortgages are limited to 5 years (i.e. have to be renewed).
Also that in Canada, it has one of the highest real estate as a percentage of GDP figures.
As the Canadian central bank (BOC) raises rates, some of these mortgages (variable) no longer reflect any principal payment (due to increased interest cost) and thus have to have a higher payment amount.
The above, along with the huge run up in prices in Canada over the last n years, sounds like a big-time issue coming down the road (ala USA ARMs of 2008).
Are there any Canadian folks on here that can comment on this?
I just recently learned that "most" mortgages in Canada are 5-year variable rate, and that all mortgages are limited to 5 years (i.e. have to be renewed).
Also that in Canada, it has one of the highest real estate as a percentage of GDP figures.
As the Canadian central bank (BOC) raises rates, some of these mortgages (variable) no longer reflect any principal payment (due to increased interest cost) and thus have to have a higher payment amount.
The above, along with the huge run up in prices in Canada over the last n years, sounds like a big-time issue coming down the road (ala USA ARMs of 2008).
Are there any Canadian folks on here that can comment on this?
HawkeyeNFO
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My property in a suburb very close to DC is down about 10% from its peak a few months ago (Zestimate). Doesn't really matter though, as we have no plans to move in the next several years.
ShokWaveRider
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
No mortgage interest write offs in Canada either. From what I remember all mortgages I had when I was there were 5 years fixed, amortized over 30 years.
What this meant was when you take out a mortgage, you pay the 30 year rate at the time for a fixed period of 5 years. Then after 5 years it was readjusted to the 30 year rate for that time for the next 5 year period.
If it is still the same as when I lived there that is. It may be different now. Regular Adjustables may also be available, I do not know for sure now, so please correct me if I am incorrect.
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There is so much misinformation out there right now, the biggest one is that we have a long term supply shortage.
We are setting records for active permits. The foreclosure moratorium is over and these will start appearing on the market.
aja8888
Moderator Emeritus
Around here, very few houses are for sale. there are no tract home builders here as it's all built out. RE is local.
I've held a sizable amount in an inverse housing fund since March, while these funds are forward looking, it indicates a drop of ~15-20% in the general real estate market. No doubt, we will see a flood of inventory in the near future in certain markets, and ripple effects elsewhere.
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JoeWras
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Related to this are lumber prices. Although they haven't reached pre-pandemic prices, they are now just a "typical inflation factor" above.
2x4x8: 2019-$3, 2021-$8, today-$4
Engineered subfloor 4x8: 2019-$25, 2021-$90, today-$45
It was nice to go to Lowes and Home Depot and see plenty of materials for our upcoming disaster relief trip. At the height of the FOMO building/remodeling insanity, the lumber racks were decimated.
2x4x8: 2019-$3, 2021-$8, today-$4
Engineered subfloor 4x8: 2019-$25, 2021-$90, today-$45
It was nice to go to Lowes and Home Depot and see plenty of materials for our upcoming disaster relief trip. At the height of the FOMO building/remodeling insanity, the lumber racks were decimated.
Sounds similar to a 5/5 ARM. These are common in Europe too.
I’ve always assumed that 30 year fixed rate mortgages are specific to the US.
Finance Dave
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I just posted a thread with my answer to this one...
https://www.early-retirement.org/forums/f28/selling-rental-units-115519.html
https://www.early-retirement.org/forums/f28/selling-rental-units-115519.html
ShokWaveRider
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Same here, but that could be because of Hurricane Ian,
We saw a 10% spike between Jan-June, if people in our area just price it back to Jan and call the spike a fluke which it was, the houses are selling just fine.
Opendoor will bankrupt itself as even with a cooling market they again overpaid, priced up, sat on a property for over 3 months and then took a low ball offer which I think was $65k under what they bought it for. I have no idea how they get their market valuations but its so extremely flawed.
We have 8 existing homes for sale currently in our subdivision, 5 with offers, 2 overpriced by about $25k, and 1 that just reduced to the appropriate price and will hopefully get an offer this week.
They have 22 homes left to sell in our subdivision, they have all been spec homes, the big difference is that the ones at the height were upgraded to the hilt causing insane prices, the new ones are only modestly upgraded making it appear like the prices are dramatically reduced, but most of it is like not having the 3rd floor finished so reducing sq footage by 800-1000 sq ft, substituting out the quartz, hardwood floors, etc. Plus with vendor financing at 4.875% fixed 30 year rates being offered they have been able to keep people interested.
New construction, the builders that are mid project are building insanely fast to complete the homes they have. The builders that are starting projects have not built but switched to just doing all the infrastructure for the entire property first, clearing, grading, streets, etc. Most would start building the minute the first section is cleared but that isn't happening now. It makes sense as infrastructure will greatly increase the value of the property even without homes and if we ever hit a 2008, I've seen builders buy other properties like that and take over. Actually the home I bought in 2006 had 3 builders before that subdivision completed, the first 2 bankrupting.
Opendoor will bankrupt itself as even with a cooling market they again overpaid, priced up, sat on a property for over 3 months and then took a low ball offer which I think was $65k under what they bought it for. I have no idea how they get their market valuations but its so extremely flawed.
We have 8 existing homes for sale currently in our subdivision, 5 with offers, 2 overpriced by about $25k, and 1 that just reduced to the appropriate price and will hopefully get an offer this week.
They have 22 homes left to sell in our subdivision, they have all been spec homes, the big difference is that the ones at the height were upgraded to the hilt causing insane prices, the new ones are only modestly upgraded making it appear like the prices are dramatically reduced, but most of it is like not having the 3rd floor finished so reducing sq footage by 800-1000 sq ft, substituting out the quartz, hardwood floors, etc. Plus with vendor financing at 4.875% fixed 30 year rates being offered they have been able to keep people interested.
New construction, the builders that are mid project are building insanely fast to complete the homes they have. The builders that are starting projects have not built but switched to just doing all the infrastructure for the entire property first, clearing, grading, streets, etc. Most would start building the minute the first section is cleared but that isn't happening now. It makes sense as infrastructure will greatly increase the value of the property even without homes and if we ever hit a 2008, I've seen builders buy other properties like that and take over. Actually the home I bought in 2006 had 3 builders before that subdivision completed, the first 2 bankrupting.
retire202052
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The listing sale price and what Opendoor actually pays is a huge difference.
A number of "Bubble Bursting" headlines hit the news this morning.
Of course the articles were full of gloom, doom and disaster. Interestingly, the so-called experts quoted were predicting a 10% or at most, 20% price drop. Doesn't sound like much of a burst to me. If prices went back to where they were before the bubble started, it would be a 50% or more price drop. That wouldn't be a bad thing in my book.
So much emphasis is put on higher interest rates. Sure, they may thin the herd of buyers a bit. But everyone needs a home, and as the experts noted, a few extra points on the loan will only knock a few percent off the price. I think you'd have to look beyond interest rates, at macro-economic factors, to really understand what's going on.
Of course the articles were full of gloom, doom and disaster. Interestingly, the so-called experts quoted were predicting a 10% or at most, 20% price drop. Doesn't sound like much of a burst to me. If prices went back to where they were before the bubble started, it would be a 50% or more price drop. That wouldn't be a bad thing in my book.
So much emphasis is put on higher interest rates. Sure, they may thin the herd of buyers a bit. But everyone needs a home, and as the experts noted, a few extra points on the loan will only knock a few percent off the price. I think you'd have to look beyond interest rates, at macro-economic factors, to really understand what's going on.
aja8888
Moderator Emeritus
I no longer get Opendoor mail (it's been two months since the weekly flyers stopped).
We live in a mature HCOL area 20 miles north of Houston, TX. Several private golf courses, gated communities, oil company money.
A good friend is a successful RE agent. He is looking for listings and the ones he has a stagnant. He's worried.
A mortgage broker I know just got laid off. The whole office is gone.
Two houses in my neighborhood have been on the market for 90+ days. The owners are SLOWLY reducing the price, but are still in the stratosphere as far as listing prices.
Remember, housing prices are "sticky" until the dam breaks.
We live in a mature HCOL area 20 miles north of Houston, TX. Several private golf courses, gated communities, oil company money.
A good friend is a successful RE agent. He is looking for listings and the ones he has a stagnant. He's worried.
A mortgage broker I know just got laid off. The whole office is gone.
Two houses in my neighborhood have been on the market for 90+ days. The owners are SLOWLY reducing the price, but are still in the stratosphere as far as listing prices.
Remember, housing prices are "sticky" until the dam breaks.
GravitySucks
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Comparables in this village see the low end unit prices are falling a bit. These are probably rental units and care in a swampy area near a rail yard. The higher end is going up again as a new factory is being built 20 minutes away.
Very low cost housing here as the property taxes are high. Nothing ever goes up crazy so never goes down much either. I've been here 22 years and prices lagged inflation until 2020, now about equal to the last 22 years inflation rate.
25 SFH units on realtor.com , 22 Pending or Contingent.
Very low cost housing here as the property taxes are high. Nothing ever goes up crazy so never goes down much either. I've been here 22 years and prices lagged inflation until 2020, now about equal to the last 22 years inflation rate.
25 SFH units on realtor.com , 22 Pending or Contingent.
W2R
Moderator Emeritus
Is the real estate bubble bursting?
My guess is that in my suburban New Orleans neighborhood, maybe the bubble will be bursting later this year. But then, what do I know? Nothing.
I'm still getting snail mail from realtors who want to sell my house (it's NOT for sale!
). But it doesn't seem like houses are selling as fast as they were last year, there aren't many on the market, and asking prices are only a little higher or about the same.
My totally uninformed guess is that buyers are losing the desire to buy in the recent economic climate. I've heard interest rates are rising, and people are nervous about inflation.
Luckily we have no desire to buy or sell. I feel really bad for those who are looking for their first home right now.
My guess is that in my suburban New Orleans neighborhood, maybe the bubble will be bursting later this year. But then, what do I know? Nothing.
I'm still getting snail mail from realtors who want to sell my house (it's NOT for sale!
). But it doesn't seem like houses are selling as fast as they were last year, there aren't many on the market, and asking prices are only a little higher or about the same.My totally uninformed guess is that buyers are losing the desire to buy in the recent economic climate. I've heard interest rates are rising, and people are nervous about inflation.
Luckily we have no desire to buy or sell. I feel really bad for those who are looking for their first home right now.
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Ian S
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Our Sedona area home has dropped by $110,000 since May but the decline seems to be leveling out as shown below.
