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[quote=Anonymous][quote=Anonymous][quote=Anonymous][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]

And at the other end of the market, we needed a mortgage under $2000 and bought a very small older place to get that. With interest rates that literally isn't possible right now. [/quote]

PS to be clear I think two trends we are seeing will go further. 
1) Prices will decline somewhat. It's happening already. It's going to make it hard for people to move up from their current homes or sell.

2) More properties will be bought as investments and rented out - my neighborhood is seeing this already, most 2021 sales are now AirBnBs. This makes it even harder for low and middle income people to buy by decreasing supply and keeping prices higher than they would be in a purely residential market. [/quote]

Ok, I’m all for a healthy debate but these are two flat out dumb takes.

1) Yes, prices are declining but this will make it easier for people to move up, unless you bought in 2021-2022 in which case you will be under water. The rest of homeowners will still be swimming in equity AND will be buying houses at more affordable prices. Right now, even people who own homes can’t afford the move-up home with prices and interest rates where they are. That’s why they’re so few listings - no one can sell because they can’t buy what they want. Prices coming down will make the market much more fluid.

2) Everyone knows investor purchases absolutely tanked after interest rates increased. Most investors (including large institutional investors) borrow money for leverage, which is why there were even more investor purchases during this bubble than the last bubble. https://therealdeal.com/2022/11/22/investor-home-purchases-plummet-30/amp/

[b]As for AirBnB, there is a huge supply glut and occupancy rates are falling off a cliff because too many investors purchased properties. https://time.com/6223185/airbnbs-empty-short-term-rentals/[/b][/quote]

As someone with a diversified portfolio of long term and short term rentals, this last statement is 100% fact.  Anyone buying a STR right now is a complete moron. We first need to flush all the morons out who bought STRs in 2021. Those idiots thought the travel market had made a permanent switch.

I’ve had my STRs for over a decade and saw these fools come if in 2020 and 2021 snatching up property that was priced way way way too high. Now many of them are stuck with expenses that the current demand now won’t cover. And I’m over here laughing my ass off because I can afford to drop my rent and wait them out and drive the price down. I’m at full occupancy due to my price point and I have people asking me to put them in a cancellation list and every single time I tell them to hit up 5 listing and ask them to half their nightly rate-one of these dummies is gonna have to fold. [/quote]

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