Why do expert say: Buckle in for a brutal free-fall in home prices - Housing Bubble

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Nope. No inventory.

Really? I am seeing lots of inventory in the inside-the-beltway surburbs in Moco, Arlington, and Fairfax. It's just that sellers still are pricing like it's the spring.

Barely anything in the neighborhoods I’m looking at in close-in Silver Spring. And in my first choice neighborhood not a single house for sale right now at any price or size. Prices elsewhere seem to holding firm. Yes, taking longer to sell, but sellers getting what they’re asking for.

Safe areas like Bethesda are going to be ok, silver springs will fall first because it has the more poor's and underperforming school

The poors always eff everything up!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m old enough to have learned that predicting markets is a fool’s errand, so all I have is scenarios in my head and the probabilities that I guesstimate for them. That being said, have caution about DCUM predictions as I’ve seen this site’s echo chamber tendencies. Back during bidding wars, the mantra on here was that prices are going up and folks will be priced out forever. Now the mantra is prices will crash in epic fashion. I think this site is an excellent barometer of current market psychology, but not necessarily a place that has a track record of predictive strength.

But we don't have to guess. Powell has been clear that he's raising the rates and even said that there's a housing bubble that he's trying to correct.

Will you provide a link? I can’t find anything with Powell calling it a “housing bubble.” I can find references to housing inflation, but not a bubble. My assumption is that people aren’t understanding the difference between a market slowing and calming down and a market crashing.

Bingo.

[Anonymous]

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

Without predatory lending, the impact of arm rates inching up isn’t as severe as it was in 2008.

[Anonymous]

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

I thought there weren't as many people with ARMS right now - because everyone refinanced to super low fixed rates over the last couple years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

Without predatory lending, the impact of arm rates inching up isn’t as severe as it was in 2008.

When you have 2% resetting to 8%, even with strict underwriting, it’s bad

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m old enough to have learned that predicting markets is a fool’s errand, so all I have is scenarios in my head and the probabilities that I guesstimate for them. That being said, have caution about DCUM predictions as I’ve seen this site’s echo chamber tendencies. Back during bidding wars, the mantra on here was that prices are going up and folks will be priced out forever. Now the mantra is prices will crash in epic fashion. I think this site is an excellent barometer of current market psychology, but not necessarily a place that has a track record of predictive strength.

But we don't have to guess. Powell has been clear that he's raising the rates and even said that there's a housing bubble that he's trying to correct.

Even if prices go down … the cost of housing has inflated exponentially with interest rates tripling, real estate taxes skyrocketing, utilities jacking up, cost of maintenance up a huge amount, insurance rates way up.

Values would have to fall over 50 percent for housing costs not to be highly inflationary.

You're making a case for why home prices will fall.

I've been saying they will too, but it hasn't really happened yet where I am looking. So when do you think this will happen? What I am seeing is lower inventory, with houses hanging out longer and getting some price reductions, but ultimately going for prices much higher than they would at the beginning of the pandemic. Even with the higher rates. I think people around here have enough cash that they can pay the prices and just wait for rates to drop a few years in the future. Anyway, there just isn't enough inventory to drive prices down and incomes and the job market remain really strong.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

Without predatory lending, the impact of arm rates inching up isn’t as severe as it was in 2008.

When you have 2% resetting to 8%, even with strict underwriting, it’s bad

Very few ARM mortgages around here.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

Without predatory lending, the impact of arm rates inching up isn’t as severe as it was in 2008.

Well, they just increased the threshold for jumbo loans for 2023 so get ready for a lot of people to take on a lot of debt they can’t afford.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

Without predatory lending, the impact of arm rates inching up isn’t as severe as it was in 2008.

Well, they just increased the threshold for jumbo loans for 2023 so get ready for a lot of people to take on a lot of debt they can’t afford.

Why do you say that? Confirming loans still have strict underwriting.

If anything, it means more people will get a better rate for a conforming loan.

[Anonymous]

Scare tactic news works which is why the evening news is never anything positive. Real Estate is LOCAL, not national. In Montgomery County & the entire DC metro area, we have a significant housing shortage. Less than 1.5 months of inventory currently available and with the builders slowing construction, it will only cause further issues. If you want advise, talk with your seasoned, professional Realtors who have seen this market before.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m old enough to have learned that predicting markets is a fool’s errand, so all I have is scenarios in my head and the probabilities that I guesstimate for them. That being said, have caution about DCUM predictions as I’ve seen this site’s echo chamber tendencies. Back during bidding wars, the mantra on here was that prices are going up and folks will be priced out forever. Now the mantra is prices will crash in epic fashion. I think this site is an excellent barometer of current market psychology, but not necessarily a place that has a track record of predictive strength.

But we don't have to guess. Powell has been clear that he's raising the rates and even said that there's a housing bubble that he's trying to correct.

Even if prices go down … the cost of housing has inflated exponentially with interest rates tripling, real estate taxes skyrocketing, utilities jacking up, cost of maintenance up a huge amount, insurance rates way up.

Values would have to fall over 50 percent for housing costs not to be highly inflationary.

You're making a case for why home prices will fall.

I've been saying they will too, but it hasn't really happened yet where I am looking. So when do you think this will happen? What I am seeing is lower inventory, with houses hanging out longer and getting some price reductions, but ultimately going for prices much higher than they would at the beginning of the pandemic. Even with the higher rates. I think people around here have enough cash that they can pay the prices and just wait for rates to drop a few years in the future. Anyway, there just isn't enough inventory to drive prices down and incomes and the job market remain really strong.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because interest rates are rising. What is going to happen when people with variable rate loans arm periods end???

Without predatory lending, the impact of arm rates inching up isn’t as severe as it was in 2008.

Perhaps not as bad, but it’s going to have an impact rest assured to say otherwise would imply zero understanding of economics.

[Anonymous]

Prices are going to continue to fall because of interest rates. It’s a mathematical certainty.

No one knows exactly how far they will fall, but the prices will fall.

You really want to look to economists regarding this, not realtors. A lot of people think realtors have strong, economic backgrounds, or that they are experts in predicting markets. They are not.

[Anonymous]

Instead of looking at it as a brutal freefall, look at it as a buying opportunity. Buy when interest rates are high and refinance when they are low.

[Anonymous]