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

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think I agree with PP—I think inventory will be very tight because no one is going to move until they really have to. Lots of people with shaky marriages will stay out rather than give up that sweet sweet interest rate!
I don’t wonder if we will see a sharp increase in renters in SFH areas and/or people converting houses to duplexes. Both of those were really common pre-Ww2 when it was much tougher to get mortgages. That’s what my grandparents did. That sort of system makes a lot of sense in this sort of market I think.

Boston area is full of houses like that chopped up into condos. It’s so yuck.

Yup. Affordable housing is so yuck.

[Anonymous]

Anonymous wrote:I mean, the experts cited in the article say prices will fall 10-20%. I think prices have definitely softened already from Spring highs, maybe close to 10% already. No one in that article said "brutal free-fall". 10-20% isn't even enough to make up for the higher interest rates, for most buyers

No, you're not listening. It's a BRUTAL FREE FALL (to the same prices as 2020 when people were saying prices were sky high)

[Anonymous]

Anonymous wrote:

Anonymous wrote:I mean, the experts cited in the article say prices will fall 10-20%. I think prices have definitely softened already from Spring highs, maybe close to 10% already. No one in that article said "brutal free-fall". 10-20% isn't even enough to make up for the higher interest rates, for most buyers

No, you're not listening. It's a BRUTAL FREE FALL (to the same prices as 2020 when people were saying prices were sky high)

If prices fell to 2020 prices would be a meaningless little blip. Who cares. Now if we free galled from 2019 prices that is a big deal

[Anonymous]

Let’s is my house as an example in Dec 2019 worth around $1,350,000 by Dec 2021 worth $1,650,000

If it fell back to $1,325,000 in Dec 2024 that is meaningless.

The few folks who bought at peak got record low interest rates and put down a big downpayment to win a bidding war. They ain’t moving. And only sale on my block in Pandemic was couple in early 40s with two little kids. By time they downsize in 2040 who cares about the 2021 price.

[Anonymous]

Anonymous wrote:Let’s is my house as an example in Dec 2019 worth around $1,350,000 by Dec 2021 worth $1,650,000

If it fell back to $1,325,000 in Dec 2024 that is meaningless.

The few folks who bought at peak got record low interest rates and put down a big downpayment to win a bidding war. They ain’t moving. And only sale on my block in Pandemic was couple in early 40s with two little kids. By time they downsize in 2040 who cares about the 2021 price.

Why do you think you know what your house was worth at these various times? Unless you listed and sold it for those prices you have no idea. Are you going by a Redfin estimate?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Prices aren’t going to free fall in any of the W clusters.

This is what my realtor said in 2007 when it was peak. It did fall down from 1.2 million to 700K in 2013

Ashburn?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Let’s is my house as an example in Dec 2019 worth around $1,350,000 by Dec 2021 worth $1,650,000

If it fell back to $1,325,000 in Dec 2024 that is meaningless.

The few folks who bought at peak got record low interest rates and put down a big downpayment to win a bidding war. They ain’t moving. And only sale on my block in Pandemic was couple in early 40s with two little kids. By time they downsize in 2040 who cares about the 2021 price.

Why do you think you know what your house was worth at these various times? Unless you listed and sold it for those prices you have no idea. Are you going by a Redfin estimate?

Come on. PP knows what her home was worth if she was paying any attention to the sales in her neighborhood.

I also believe that homes will decrease back to at least 2020 levels (if not 2019 levels) in most areas. That will still be a good profit for most sellers as home values substantially increased 2014-2019.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Let’s is my house as an example in Dec 2019 worth around $1,350,000 by Dec 2021 worth $1,650,000

If it fell back to $1,325,000 in Dec 2024 that is meaningless.

The few folks who bought at peak got record low interest rates and put down a big downpayment to win a bidding war. They ain’t moving. And only sale on my block in Pandemic was couple in early 40s with two little kids. By time they downsize in 2040 who cares about the 2021 price.

Why do you think you know what your house was worth at these various times? Unless you listed and sold it for those prices you have no idea. Are you going by a Redfin estimate?

Come on. PP knows what her home was worth if she was paying any attention to the sales in her neighborhood.

I also believe that homes will decrease back to at least 2020 levels (if not 2019 levels) in most areas. That will still be a good profit for most sellers as home values substantially increased 2014-2019.

Eh, I’ve been chuckling about the chicken littles as well but I just joined the club today. Sales are going down hard. My folks want to move and I’m inclined to tell them to be the first to aggressively price low in their neighborhood just to get the sale so they can rent a bit. They’re cash buyers at that point and can just chill for the next year renting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Let’s is my house as an example in Dec 2019 worth around $1,350,000 by Dec 2021 worth $1,650,000

If it fell back to $1,325,000 in Dec 2024 that is meaningless.

The few folks who bought at peak got record low interest rates and put down a big downpayment to win a bidding war. They ain’t moving. And only sale on my block in Pandemic was couple in early 40s with two little kids. By time they downsize in 2040 who cares about the 2021 price.

Why do you think you know what your house was worth at these various times? Unless you listed and sold it for those prices you have no idea. Are you going by a Redfin estimate?

I only bought it 2017 and watch prices closely

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Let’s is my house as an example in Dec 2019 worth around $1,350,000 by Dec 2021 worth $1,650,000

If it fell back to $1,325,000 in Dec 2024 that is meaningless.

The few folks who bought at peak got record low interest rates and put down a big downpayment to win a bidding war. They ain’t moving. And only sale on my block in Pandemic was couple in early 40s with two little kids. By time they downsize in 2040 who cares about the 2021 price.

Why do you think you know what your house was worth at these various times? Unless you listed and sold it for those prices you have no idea. Are you going by a Redfin estimate?

Come on. PP knows what her home was worth if she was paying any attention to the sales in her neighborhood.

I also believe that homes will decrease back to at least 2020 levels (if not 2019 levels) in most areas. That will still be a good profit for most sellers as home values substantially increased 2014-2019.

Eh, I’ve been chuckling about the chicken littles as well but I just joined the club today. Sales are going down hard. My folks want to move and I’m inclined to tell them to be the first to aggressively price low in their neighborhood just to get the sale so they can rent a bit. They’re cash buyers at that point and can just chill for the next year renting.

PP here. Good strategy. We're doing a similar thing. Sold our home and moved out of the DMV. Renting now. Prices here went up a lot during the pandemic. Prices have already started to fall and will likely fall a bit more. It won't be catastrophic if values go back down to 2019 levels. The people who bought 2021-early 2022 got really good interest rates, so they're still in good shape as long as they don't need to sell. Everyone who bought in 2019-2020 will break even and walk away with cash since they made a down payment and paid down some of the loan. Everyone else who bought 2018 or prior (just 3 years ago) will make a profit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The headline is more alarming than the content. Most of the people surveyed say a 10-20% drop in housing prices. I would say we’ve already seen about a 10% drop in prices in the DMV, uneven across areas but if you look at all the price cuts prices even in desirable areas seem to me to be about 10% lower than they were say six months ago.

This, and for people who bought before 2019, this will basically only wipe out the steep increase in prices over the last couple years but will not touch the equity they built before that. Meaning you can still sell a house for a profit after owning it for 5-7 years at a minimum. The housing market can never sustain steep price increases for long.

The only people who should be freaking out right now are people who bought within the last two years and want or have to sell in the immediate future -- they may take a bath. Also, people who have been waiting for prices to return to 2010-2011 levels are in for a rude awakening -- even with rate increases, that is unlikely to happen because of inventory. Unlike in 2008/2009, this housing "crash" is not fueled by overbuilding housing stock in hot markets (back then, it was places like Las Vegas and Florida, where developers built thousands of new houses knowing they could sell them to people for little to no money down). We also aren't seeing rippling economic effects leading to mass layoffs. A slowdown in hiring, yes, and some targeted layoffs in some industries, but not the domino effect of the last time.

I really tend to think this is a needed market adjustment that will benefit most homeowners in the long run by rewarding longterm home ownership.

+100

[Anonymous]

Anonymous wrote:

Anonymous wrote:I mean, the experts cited in the article say prices will fall 10-20%. I think prices have definitely softened already from Spring highs, maybe close to 10% already. No one in that article said "brutal free-fall". 10-20% isn't even enough to make up for the higher interest rates, for most buyers

No, you're not listening. It's a BRUTAL FREE FALL (to the same prices as 2020 when people were saying prices were sky high)

That is a brutal free fall for the dummies who bid up houses in 2021-2022. Everyone else will be fine. Which is exactly why prices will fall. Everyone who bought before 2020 will still be fine and will be happy to buy/sell once prices normalize again.

[Anonymous]

First time homebuyers are also screwed.

[Anonymous]

Anonymous wrote:First time homebuyers are also screwed.

Keep saving and you'll be in a better position once prices come down more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:First time homebuyers are also screwed.

Keep saving and you'll be in a better position once prices come down more.

Hey looks like interest only loans are back on the deck.. that means we are really started to see home prices collapse.