Reply to Is there going to be panic selling?

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[quote=Anonymous]There may be "panic selling," but I think there are a couple conditions that suggest home prices wont radically change in the DC area market.

Yes, people who have lost federal jobs may sell and move to LCOL areas, or find jobs elsewhere. However, those who have low mortgage rates and can afford to stay, will stay put, as long as possible because of the pain of high interest rates and high home prices. More broadly, there's no sign that mortgage rates are going to fall anytime soon, given inflationary pressures, so that discourages buying and selling, and exacerbates the supply issue.

Tariffs and deportations will make building new housing very expensive, I predict a slow down on new builds, which will decrease availability and keep upward pressure on prices.

So in the short term I do not think we will see crater in DC area housing prices. However, a full blown recession will be interesting--the fed would presumable lower rates, freeing up people to both buy and sell. Should rates be lowered and tariffs dropped, that would juice up new homebuilding and buying and selling, which might eventually moderate prices but I do not see panic selling (even though I am someone prone to panic).

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