Reply to When do you think housing prices will drop (or never)?

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[quote=Anonymous][quote=Anonymous]We bought a 1.3mil house in close in McLean in early 2019, we refinanced at 2.75 and our mortgage is $5400. Per Redfin our home is now worth 1.6mil, I am not convinced at the appreciation. I think it will go down at least 100k.

Today, If someone were to buy 1.3 mil house at 6.4% at 25% down the payment comes to around $7500.00 and at 1.6m monthly payment is around $9200. I am not convinced that there are lots of people out there with the capacity to pay between 7500 -9500 a month in mortgage payment. I think this pool is limited and will shrink further due to rising interest rates.

FWIW, our HHI is 750k and I would never pay mortgage above $6000/month. Maybe I am an outlier but numbers don’t support the argument that prices will hold, I think they will come down 10% at least even in close in areas and that’s okay because the increase was beyond crazy.[/quote]

The current data suggests otherwise. Case Schiller Index for the DC area shows prices have barely nudged down since the peak and seem to be stabilizing. That's consistent with what I'm seeing through more recent sale data in my neighborhood. Of course the Case Schiller data is lagged (last from October) but rates were already pretty high at that point. I think the problem is inventory. The houses right now are too expensive, yes, but there are so few of them. Only people who really want to buy are buying, and they have very few options. Maybe this will change at some point? I don't know. I'm not someone who thinks prices can't go down at all, or can't go down significantly...I just don't see an immediate path to a large drop in prices.[/quote]

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