Moody's says Home prices will fall 20% soon

[Anonymous]

Anonymous wrote:

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Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

Right, breaking even with normal appreciation given transaction costs is what makes it a "worthwhile choice" - actually a more than worthwhile choice because of the money you would have saved renting. So... thanks for proving my point?

[Anonymous]

Between 1900 and 2000 real estate appreciated at about the rate of inflation, maybe add < 1%. Not true for 2000-2022. But I expect after some time goes by, we will look back and say "Hey, from 1900 to 2050, real estate appreciated by about the rate of inflation, maybe add < 1%""

[Anonymous]

Anonymous wrote:It has been said many times on multiple threads…these massive price drops all the Chicken Littles are crying for, the calculations of what a payment is now versus what it was at 3% for the same price and how sellers HAVE to adjust their price. That assumes sellers will willingly choose to sell their house during this time and accept that price level just because buyers want it. No. Sellers will only put their house on the market over the period if they absolutely have to. Otherwise they’ll sit and wait, renovate, etc. Sellers can’t afford to trade up, laterally move, or downsize either because of the interest rates, just like every other buyer. So they’ll wait. It’s already happening with greatly reduced inventory.

Sideliners are realizing they should have jumped on the deals sellers were giving them at 5%. Exactly when everyone else on this board was advising them to. Now I see repeated buyer comments of “if it can just get back to 5%, I’m going ahead and entering the market.” Because who knows when they’ll be down to 5% again now. Which is why experts repeatedly advise DON’T TRY TO TIME THE MARKET.

“Chicken Little” boomer is back! You’re wrong, inventory is up by 34% YoY. New listing have decreased but not nearly as much as demand has. https://www.realtor.com/research/tag/housing-inventory/

There are always people have to sell, and never people who have to buy. Just takes a handful of low comps to get the ball rolling.

I bought my house before the pandemic. If prices drop 20% I will still be in great shape. Still great appreciation so I won’t be under water, plus the move up house I’ll want to buy will also be priced lower. I’m selling my house once house prices decline, not when interest rates decline. You have it exactly backwards. I don’t care about some theoretical price I could have gotten in February 2022.

[Anonymous]

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

If you decide to sell. If you don’t sell—if you just stay in your house—it doesn’t matter if prices collapse or go up to the stratosphere. It has no impact on your life from a financial standpoint. It might affect what kind of neighbors you get, but that’s a different story.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

Right, breaking even with normal appreciation given transaction costs is what makes it a "worthwhile choice" - actually a more than worthwhile choice because of the money you would have saved renting. So... thanks for proving my point?

Right, in an environment of normal appreciation, buying and holding for 5 years will likely put you at break even. But we’re talking about a scenario of prices dropping. You will not break even, you will be down.

No one ever said anything about renting. We are move up buyers. But since you mentioned renting, most people rent a much cheaper place than they would want to buy. When we were renting, our rent was much less than the property taxes and maintenance expenses of our current house. Plus we put the money we were saving by living in a cheaper place into an index fund which beat home value appreciation. And we had the freedom to move wherever we wanted, whenever we wanted. We really came out ahead.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

If you decide to sell. If you don’t sell—if you just stay in your house—it doesn’t matter if prices collapse or go up to the stratosphere. It has no impact on your life from a financial standpoint. It might affect what kind of neighbors you get, but that’s a different story.

There sure are financial effects. What if you want to move for a higher paying job? What if you want to refinance and are under water? Want if you want to take out a HELOC? And if you had decided not to fight the Fed and waited to buy, you’d be in much better financial shape. I get that you can’t tell the future, but Powell is literally telling you what they are going to do to the market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

If you decide to sell. If you don’t sell—if you just stay in your house—it doesn’t matter if prices collapse or go up to the stratosphere. It has no impact on your life from a financial standpoint. It might affect what kind of neighbors you get, but that’s a different story.

There sure are financial effects. What if you want to move for a higher paying job? What if you want to refinance and are under water? Want if you want to take out a HELOC? And if you had decided not to fight the Fed and waited to buy, you’d be in much better financial shape. I get that you can’t tell the future, but Powell is literally telling you what they are going to do to the market.

Yes, and this is what he said:

“So there was a big imbalance between supply and demand. Housing prices were going up at an unsustainably fast level. So the deceleration in housing prices that we’re seeing should help bring sort of prices more closely in line with rents and other housing market fundamentals, and that’s a good thing.
For the longer term, what we need is supply and demand to get better aligned so that housing prices go up at a reasonable level—at a reasonable pace—and that people can afford houses again. And I think we—so we probably, in the housing market, have to go through a correction to get back to that place.”

He is talking about a correction between the supply and demand. Another PP is correct, a sharp decline in housing prices will just fuel demand, recreating the imbalance. He also said there are outside pressures on the market that impact supply and those are longer term issues (supply chain, lack of affordable housing). In his second response he noted that shelter inflation may remain high for quite some time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

Right, breaking even with normal appreciation given transaction costs is what makes it a "worthwhile choice" - actually a more than worthwhile choice because of the money you would have saved renting. So... thanks for proving my point?

Right, in an environment of normal appreciation, buying and holding for 5 years will likely put you at break even. But we’re talking about a scenario of prices dropping. You will not break even, you will be down.

No one ever said anything about renting. We are move up buyers. But since you mentioned renting, most people rent a much cheaper place than they would want to buy. When we were renting, our rent was much less than the property taxes and maintenance expenses of our current house. Plus we put the money we were saving by living in a cheaper place into an index fund which beat home value appreciation. And we had the freedom to move wherever we wanted, whenever we wanted. We really came out ahead.

Our mortgage and maintenance is much much cheaper than anything comparable to what i could rent. I don’t know what your angle is, but buying in DC is pretty much as safe a bet as you can get (when of course there are no safe bets by definition). I also have the freedom to move whenever i want ( could rent my place for 3x my expenses), but while also maintaining my investment… so who is “ahead”?

[Anonymous]

Owning a home that does not rise in value at all if a primary home is meaningless.

Homes used to be your bought a home, took a 30 year mortgage. After 30 years had a mortgage burning party.

You then retire in your home mortgage free no worries.

My 81 year old mother in law bought her first house 24. Her husband was 26 and they had a 2 and 4 year old. They bought a 1,300 sf house and had two “boarders” upstairs first 3-5 years and part of downpayment aunt loaned at full market rate. My father in Law worked a second job at 20 hours a week to pay back that loan with interest and got rid of boarders at year.

She is a widow and owns home 57 years. At 1,300 sf on a 40x100 plot perfect size to manage.

People even if we have 10 percent mortgages could do what she and husband did. Buy less of a home, get tenants, get a second job.

She is going out feet first.

[Anonymous]

Like these sellers HAVE to move apparently and risk taking a loss on the sale.

https://www.redfin.com/DC/Washington/3122-Newton-St-NE-20018/home/10105498#property-history

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

If you decide to sell. If you don’t sell—if you just stay in your house—it doesn’t matter if prices collapse or go up to the stratosphere. It has no impact on your life from a financial standpoint. It might affect what kind of neighbors you get, but that’s a different story.

There sure are financial effects. What if you want to move for a higher paying job? What if you want to refinance and are under water? Want if you want to take out a HELOC? And if you had decided not to fight the Fed and waited to buy, you’d be in much better financial shape. I get that you can’t tell the future, but Powell is literally telling you what they are going to do to the market.

+1 this time we actually know what the Fed is trying to do.

[Anonymous]

Anonymous wrote:Like these sellers HAVE to move apparently and risk taking a loss on the sale.

https://www.redfin.com/DC/Washington/3122-Newton-St-NE-20018/home/10105498#property-history

Slightly OT but I just don’t understand why flippers give so much attention to things like tile and backsplash and then throw up those godawful Home Depot grade hollow core doors.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

Right, breaking even with normal appreciation given transaction costs is what makes it a "worthwhile choice" - actually a more than worthwhile choice because of the money you would have saved renting. So... thanks for proving my point?

No. But clearly math is not your strong suit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:“ : “I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”

Jay Powell - June 2022

"Inflation is down low again" does not mean price decreases! It means that housing prices aren't increasing 5% every 3 months like we saw over the past 2 years. In other words, bringing down the rate of increase (not prices) to a more reasonable level.

Did you miss the next speech when he said housing needed to go through a “difficult correction” so that homes could be affordable again? And where, during the same speech, he made it clear that unemployment needed to rise and wages cannot go up anymore?

If incomes aren’t going up, and interest rates are going up, how exactly do you think JPow is expecting to see houses become affordable again?

Nobody decided to "correct" home prices and pull a lever. We are at record inflation levels, causing fed to raise rates, causing mortgage rates to increase, causing home prices to drop.

Read Powell’s speech. He explicitly says house prices are detached from fundamentals and need to go through a difficult correction so that people can afford houses again. https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20220921.pdf

And they might in some parts of the US. Some of the housing increases in some parts of the US were not justified, and just as with 2008, they will be impacted by the Fed’s actions more than others.

But you are on DCUM. The presumption is that most people here aren’t talking about real estate generally, they are talking about DC area real estate. So we are effectively talking past each other if you fail to understand the specific market that dominates discussion on this board. As with the money board, there seem to be a lot of posters recently who discovered DCUM and post without any comprehension that most of us actually live in DC.

Lol nothing local about interest rates.

I don’t remember Powell saying there needs to be a housing correction, EXCEPT in DCUM land, that place is right on point.

Uh. Interest rates aren’t the only factor in real estate pricing.

Where are you located? Let’s talk about that area.

Of course not, by why do you think anywhere in the DC area is so special that people will choose to pay 50% more today for the same house they could have bought 6 months ago? Not to mention the affordability component. DC’s “wealth” is highly tied to income vs assets (as in wealthy NYC, SF, etc). “Wealthy” people in the DMV are mostly workaday white collar professionals like lawyers, consultants etc who very much depend on their yearly income which is not going up and which limits their budgets. No big law lawyer is going to decide to much less be able to afford paying $3 million at 7% for the same house they could have gotten at 3.5% in March.

For upper tier, people are buying below their means. A % more or less isn’t a huge deal.

For middle tier, there is infinite number of buyers.

You don’t seem very familiar with DC.

So where are you?

I don’t agree with what you wrote, but assuming it’s true, how is DC different than anywhere else? Why will people in the DMV not care that interest rates doubled in six months and continue buying at historically high and already unaffordable prices?

People will care. But not as much as other areas. Market will soften. Prices will flatten / lower a bit. But nothing like 2008. Which wasn’t that bad here.

Where are you? Florida?

You still aren’t giving any reasons why. Why would interest rates affect the DMV less than other areas?

And 2008 was bad here, you’re delusional.

Okay but it really wasn’t. The suburbs struggled, possibly that’s what you mean? but DC? Nope

Ha, DC prices didn’t recover to their 2006 peak until December 2020. Fourteen years, baby. https://fred.stlouisfed.org/series/WDXRSA

Incorrect. https://fred.stlouisfed.org/series/DCSTHPI

My
It “only” took 6 years for prices to recover in DC. That is not “immune.”

Everyone knows that you have to hold real estate for 5-10 years to make it a worthwhile choice. So yeah, immune unless you’re an idiot.

No, that’s just for you to break even with normal appreciation given transaction costs. If prices go down, it’s going to take you a lot longer than 5 years just to get you back to where you started.

Right, breaking even with normal appreciation given transaction costs is what makes it a "worthwhile choice" - actually a more than worthwhile choice because of the money you would have saved renting. So... thanks for proving my point?

No. But clearly math is not your strong suit.

And history isn’t yours.

[Anonymous]

Anonymous wrote:Between 1900 and 2000 real estate appreciated at about the rate of inflation, maybe add < 1%. Not true for 2000-2022. But I expect after some time goes by, we will look back and say "Hey, from 1900 to 2050, real estate appreciated by about the rate of inflation, maybe add < 1%""

good. hopefully we will start building more too. things like the 'missing middle' movement and navy yard development are starting to make a difference