When will it reset or crash

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think anytime soon in this area. We put in an offer on a SFH in the VA suburbs and there's 10 other offers.

These sorts of data points really have no bearing on whether there's an imminent crash or reset. It just means that one particular house was underpriced, which is a strategy that is heavily used by agents in this area. Having many people interested in a house that is deliberately underpriced happens in any market.

It's not underpriced. It's actually on the higher end of comps.

Comps are always subjective. The fact remains that bidding wars don't mean much. I'm sure you could fine bidding wars that were happening in 2007 and 2008. Pricing a property isn't an exact science. I've never heard of any studies tracking the number of bids on sold properties in order to determine how the real estate market is doing.

You don't think the existence of a bidding war with 10 bids on a property priced at the higher end of comps is inconsistent with an imminent crash? Don't be daft.

[Anonymous]

All these folks with 2.5% 30 year mortgages are going to constrain supply for a long time.

Also, how does a crash play out here…tell me what the fed will do. I bet they cut rates, which even if the economy softens will support current pricing. So while a crash is possible it seems like flattening out is more likely in a downturn.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think anytime soon in this area. We put in an offer on a SFH in the VA suburbs and there's 10 other offers.

These sorts of data points really have no bearing on whether there's an imminent crash or reset. It just means that one particular house was underpriced, which is a strategy that is heavily used by agents in this area. Having many people interested in a house that is deliberately underpriced happens in any market.

It's not underpriced. It's actually on the higher end of comps.

Comps are always subjective. The fact remains that bidding wars don't mean much. I'm sure you could fine bidding wars that were happening in 2007 and 2008. Pricing a property isn't an exact science. I've never heard of any studies tracking the number of bids on sold properties in order to determine how the real estate market is doing.

You don't think the existence of a bidding war with 10 bids on a property priced at the higher end of comps is inconsistent with an imminent crash? Don't be daft.

[Anonymous]

Anonymous wrote:
All these folks with 2.5% 30 year mortgages are going to constrain supply for a long time.

Also, how does a crash play out here…tell me what the fed will do. I bet they cut rates, which even if the economy softens will support current pricing. So while a crash is possible it seems like flattening out is more likely in a downturn.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think anytime soon in this area. We put in an offer on a SFH in the VA suburbs and there's 10 other offers.

These sorts of data points really have no bearing on whether there's an imminent crash or reset. It just means that one particular house was underpriced, which is a strategy that is heavily used by agents in this area. Having many people interested in a house that is deliberately underpriced happens in any market.

It's not underpriced. It's actually on the higher end of comps.

Comps are always subjective. The fact remains that bidding wars don't mean much. I'm sure you could fine bidding wars that were happening in 2007 and 2008. Pricing a property isn't an exact science. I've never heard of any studies tracking the number of bids on sold properties in order to determine how the real estate market is doing.

You don't think the existence of a bidding war with 10 bids on a property priced at the higher end of comps is inconsistent with an imminent crash? Don't be daft.

We are in agreement. There is no crash imminent.

[Anonymous]

Anonymous wrote:Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.

Is it really that great an investment? $30,000 is only about a 3% return on one million, and it sounds like you’re not including some costs like maintenance and insurance. You’ll lose basis to depreciation and lose your current safe harbor exemption for capital gains after 3 years. If you refied in 2030, your mortgage payment is still mostly going to interest, so that’s probably around $12,000 a year toward principle. You can easily spend that much if/when the a/c compressor needs replacing or a tree dies (or whatever), or more if you get a bad tenant who trashes the place. Very best case, you’re making 4% off a very illiquid investment and losing tax benefits on capital gains in the process. You could sell now, shelter most of your capital gains and put the money into a savings account and get 4.5%, with no hassle.

Real estate is a great investment if you’re heavily leveraged and get lucky and buy into a rapidly appreciating market. DC real estate may not crash, but I wouldn’t count on a significant amount of appreciation in the near future.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.
[Report Post]

A $20-$30K profit on an investment of 1M is not a good return. It's 2-3%. You can do better in a money market account. That said, you might have some appreciation on the house, but it also could be flat for a long time.

Haha, you could do better in a money market only for the last year or two. High rates on MM and savings account won’t last.

Those of you who think interest rates are going back down appreciably are delusional. 2.5% - 3% interest is NOT normal, and led to the mess we’re in now.

[Anonymous]

Anonymous wrote:
All these folks with 2.5% 30 year mortgages are going to constrain supply for a long time.

Also, how does a crash play out here…tell me what the fed will do. I bet they cut rates, which even if the economy softens will support current pricing. So while a crash is possible it seems like flattening out is more likely in a downturn.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think anytime soon in this area. We put in an offer on a SFH in the VA suburbs and there's 10 other offers.

These sorts of data points really have no bearing on whether there's an imminent crash or reset. It just means that one particular house was underpriced, which is a strategy that is heavily used by agents in this area. Having many people interested in a house that is deliberately underpriced happens in any market.

It's not underpriced. It's actually on the higher end of comps.

Comps are always subjective. The fact remains that bidding wars don't mean much. I'm sure you could fine bidding wars that were happening in 2007 and 2008. Pricing a property isn't an exact science. I've never heard of any studies tracking the number of bids on sold properties in order to determine how the real estate market is doing.

You don't think the existence of a bidding war with 10 bids on a property priced at the higher end of comps is inconsistent with an imminent crash? Don't be daft.

I guess something could happen like the upcoming crash in commercial real estate could result in all that commercial space being turned into condos/residential flooding the market and bringing down prices. I mean, that’s what I would do if I had a useless commercial building on my hands in a historically tight residential housing market. Hard to believe others aren’t thinking the same.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm no sage but are you all aware that real estate is crashing already on the West Coast? Like down 20% in the SF Bay and Seattle areas. Look at how many homes are for sale in Florida and guess where this hits next?

Isn’t the issue with Seattle and San Francisco the fact that they are tech based economies? Where is the crash in DC /Massachusetts?

Job growth is pretty flat in DC and the area is losing population.

Compare 5.1% in NV & +4.6% job growth in FL & TX in 2022 vs. 0.7% in MD and 1.7% in DC.

https://www.bls.gov/web/laus/statewide_otm_oty_change.htm



https://www.nationalvanlines.com/national-van-lines-domestic-migration-report/

What about since 2020?

The states/areas with the most growth from 2020-2022:

Idaho
Montana
Utah
Florida
South Carolina

And the states/areas with the least growth from 2020-2022:

New York
District of Columbia
Puerto Rico
Illinois
Louisiana

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm no sage but are you all aware that real estate is crashing already on the West Coast? Like down 20% in the SF Bay and Seattle areas. Look at how many homes are for sale in Florida and guess where this hits next?

Isn’t the issue with Seattle and San Francisco the fact that they are tech based economies? Where is the crash in DC /Massachusetts?

Sf bay area is an insanely high priced market still. My family member trying to buy a first home there, can only afford a small TH. But they cost around a million, and this is not in SF city.

[Anonymous]

If there's such a housing shortage why aren't people buying up empty land and building?

[Anonymous]

For those predicting a FL crash, the numbers and the experts disagree. And that’s not good news for the Northeast.

https://www.wsj.com/articles/miami-housing-market-cools-but-is-still-the-hottest-around-3928727a

The gains of­fer fresh ev­i­dence that Mi­a­mi’s hous­ing mar­ket is poised to re­main the strong­est of any U.S. city. Mi­ami posted the coun­try’s fastest year-over-year home-price growth at 15.9% in 2022, ac­cord­ing to the S&P Core­L­ogic Case-Shiller In­dex. 

Res­i­dents and busi­nesses con­tinue to flock to the Sun­shine State—and South Flor­ida in par­tic­u­lar—drawn by year-round warm weather, more lib­eral busi­ness reg­u­la­tion and the lack of a state in­come tax. Flor­ida gained more res­i­dents than any other state in 2022, ac­cord­ing to the U.S. Cen­sus Bu­reau data, while Mi­ami hous­ing in­ven­tory is down by about half com­pared with the first quar­ter of 2020. 

New York­ers and other North-east­ern­ers are some of the area’s most ac­tive home buy­ers. Most of the do­mes­tic dri­ver-li­cense changes came from New York last year, ac­cord­ing to data from the Flor­ida de­part­ment of mo­tor ve­hi­cles. Many of the new ar­rivals, ac­cus­tomed to the steep real-es­tate prices of New York City and its sub­urbs, helped bid up home prices and rents in Mi­ami. 

[Anonymous]

Anonymous wrote:Hanging out with real estate agents yesterday and they were reminiscing about 2006/7 being the latest time they could recall market being like this. Then the crash happened.

Interest rates would go low, more buyers will come out, more homes listed, prices up and bidding begins.

[Anonymous]

As long as DC remains capitol, market wouldn't crash enough for prices to go significantly low. There is always going to be a sustainable demand of housing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I'm no sage but are you all aware that real estate is crashing already on the West Coast? Like down 20% in the SF Bay and Seattle areas. Look at how many homes are for sale in Florida and guess where this hits next?

Isn’t the issue with Seattle and San Francisco the fact that they are tech based economies? Where is the crash in DC /Massachusetts?

Job growth is pretty flat in DC and the area is losing population.

Compare 5.1% in NV & +4.6% job growth in FL & TX in 2022 vs. 0.7% in MD and 1.7% in DC.

https://www.bls.gov/web/laus/statewide_otm_oty_change.htm



https://www.nationalvanlines.com/national-van-lines-domestic-migration-report/

What about since 2020?

The states/areas with the most growth from 2020-2022:

Idaho
Montana
Utah
Florida
South Carolina

And the states/areas with the least growth from 2020-2022:

New York
District of Columbia
Puerto Rico
Illinois
Louisiana

Huh, what could have happened in 2020 to have a spike in migration away from the large, densely populated city centers of New York, Chicago Illinois, and Washington DC?

[Anonymous]

there is no crash coming. Interest rates are going to drop and prices will rise more.

[Anonymous]

Anonymous wrote:If there's such a housing shortage why aren't people buying up empty land and building?

Never been to Gainesville? Warrenton? Middleburg? Leesburg? Every available bit of empty land is being bought and built. It's still not enough because they're building ridiculously inefficient SFHs on huge lots because the only way to entice people to live so far out is to give them far more house and land than they could afford somewhere civilized.

The housing shortage is not a shortage of housing in general, it's a shortage of housing where people actually want to live.