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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]"Moron" realtor here.

The high end of the market is always a [i]leading[/i] indicator. People who buy $5M houses don't buy it thinking...what's my HHI...can I afford it etc. They buy it from an asset perspective, whether it's appreciation or capital preservation in mind. If THEY are not buying, it means...they think cash is better, or there are other investments that are better. i.e. Housing is NOT a good way preserve capital.

That throws the entire inflation argument out of the water. i.e. bubblicious markets are staring down the reality hole.[/quote]

What are you seeing in that higher end of the market?[/quote]
What I'm seeing is a [b]significant[/b][i] slowdown, with properties sitting much much longer and significant price drops. We're talking 20-30% off list, if not more. This is generally the $2M+ market. (And if Jeff doesn't stop deleting my screenshots...I could show more data, but it looks like he doesn't like it. Oh well.)

I'm still seeing idiot sellers in the $1-$2M range, who:

- are too late to the market now, the bell curve has shifted.
- Should have listed last year if they wanted to make money from their house
- are thinking people will pay in July 2021, what they were paying in July 2020, which is not happening, is not going to happen.

I'm still seeing desperate sellers in the $750K-$1M market who: read above.

The under $750K market in the DC metro area is very sporadic. Some parts sell well (think Silver Spring, Burke etc) but they are very localized. Other parts (think tear downs in Arlington) just sit there until they drop the price to where it is economically feasible for a developer.
  
I'm seeing "well priced" properties still move quickly, but there is no [b]frenzy[/b] anymore.

What people don't realize is that a lot of the frenzy was NOT due to inflation, lumber prices rising (they are off 40% from their highs) and what not. That was a "transitory" (in JPOW's words) situation, which did turn out to be true. The frenzy was due to migration patterns, where a lot of people who can now WFH (and other reasons) changed their geographies and brought their incomes with them. This is why NY, NJ, IL, CT, MA, MD, DC are all stagnating, and prices rose in other parts of the country (FL, TX, NC, SC, VA and several other low COL states). But...that surge is over. Whoever needed to move, has moved. Now, we just have delusional/desperate sellers trying to make money.

Housing (residential real estate) CANNOT go up too much and will ALWAYS correct to the median, unless incomes rise proportionately. And that's not happening and may never happen. 
[/quote]

Then this board should be filled with deliriously happy buyers who've finally been able to snag their dream home at a reasonable price, with very little negotiation. Looking for that thread now. Looking... looking...[/quote]
Nope, not going to happen. You only see lots of chatter on the interwebs, when things are on the extreme ends of the bell curve. Either too high or too low.

In "normal" times, people go out, buy a house, and worry more about decor, furniture etc than coming to a forum to say "Hey, I just bought a house!".[/quote]
This is a great point. I do think there is a slowdown in the works but I think it is really about reigning in this positive feedback loop of pricing 5% above recent comps. I would however caution that there is a lot of seasonality to real estate and leading into the 4th of July is never typically a time when you see strong demand from buyers. I don't think it can be discounted that there is a large cohort (Millennials) that are looking to move from being renters to buyers while a lot of the existing stock is occupied by owners who are not interested in selling (Boomers). So we are starting what is likely a secular trend of strong SFH demand for the next decade, as well as a general shift from urban living to close in suburban living.[/quote]

"there is a large cohort (Millennials) that are looking to move from being renters to buyers" - There always is, always will be, and it's just not millennials.
"while a lot of the existing stock is occupied by owners who are not interested in selling (Boomers)" - There always is, always will be, and it's just not "Boomers".

There is ALWAYS a demand/supply ratio in ANY market, be it real estate, equities, bonds etc etc. It has nothing to do with age. It has to do with "is this asset priced well?". EVERYTHING is an asset, anybody who tells you otherwise, is lying/is clueless/has an agenda. Other than "consumables", people buy "assets", whether it be a classic car, vintage wine, houses, boats etc etc. Nobody is buying any of those things with "OMG, if I don't buy now, I'll never be able to buy one of these again!". That's just FOMO and while it may happen now and then (and we're seeing that in residential real estate right now, while commercial real estate is getting clobbered), it settles down. FOMO by it's very nature doesn't last too long, human psychology, the attention span cannot last a decade.

I can't predict/tell where residential real estate will be in 10/20/30 years. What I can do is make an educated assessment of the financial, political, taxation landscape, as it applies to real estate. Ask yourself this. If "low interest rates" are THAT enticing, why is commercial real estate cratering?? Aren't "small businesses" the bedrock of our country? If that's true, and money is so easy and cheap to borrow, why are these (or new) small businesses not gobbling up cheap commercial real estate (and it IS cheap)?? The answer is a lot more complicated and will take a dissertation to explain.

Take a look at Europe or Japan. If our "political" leanings are more socialist/liberal/call it whatever, well, that's what Europe is. They can't give away real estate to save their lives. Japanese real estate has stayed stagnant for over two decades. Why do you think "America" is any different? Once you ponder these things, you realize it IS bubblicious and unsustainable. Whether that will lead to _______ remains to be seen.[/quote]

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