Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Supply is still far out stripped by demand. It doesn’t help that current owners bought or refinanced at the lowest interest rates in American history. That makes people hold on to properties instead of trading up or liquidating.

I refinanced $750K at 2.75% in 2021. We might leave DC, but I ain’t ever selling this property at that rate. It’s basically free money and I can find a tenant to pay off this mortgage. If we want to buy another home, we will just wait until we have another downpayment and use leverage.

I really don’t see things going, except in maybe 2nd home markets and Florida (where prices basically doubled).

Lol love replies like these when the reality is that prices HAVE ALREADY fallen and are projected to continue to fall all through next year at a minimum, because inventory is rising. Inventory is where supply meets demand. There are fewer houses being listed but WAY fewer buyers.

https://www.redfin.com/news/housing-market-update-homes-linger-on-market/

The linked article says that in Washington DC, prices fell 2% over last year, and that is the first time prices have fallen since 2016. That isn't even a dent in prices given how much they went up over the last 2+ years (and were going up steadily before that). I'm all for home prices coming down. I think it needs to happen. But what we've seen isn't all that much help. Even another 10% still has prices way higher than pre-pandemic. And part of it is people like PP who are not selling because they could never get a deal like they have.

Prices have fallen 2% year over year. That means the insane spike that happened this spring has been erased. We are now at prices lower than November 2021. I assume you do not understand how monetary policy works and have not been watching the financial news if you think that the Fed’s rate hikes have had their full effect on the market.

The fact that prices went up so quickly in such a short period of time is exactly why they can go down quickly, too. Even a 20% drop means everyone except those who bought in 2021-22 will be in great shape. It would be much more sticky if the incline was long and gradual.

So, yes, prices are down slightly y/y. That was my point exactly. You are talking about a crash, but there is no evidence that a crash is imminent. Frankly, I wish it were because prices need to come down, but there is no reason to believe it will happen absent a pretty severe recession, and all signs right now are pointing to a soft landing. For prices to get back even to pre-pandemic levels it would take much more aggressive fed actions than we've seen or are likely to see.

And for the people saying that they'd never pay X for a house because they got a great deal, I get it, I feel the same way, but that is a historical anomaly. Houses are still affordable in this area compared to savings and income, so people are willing to spend more on housing. If anything, we will see discretionary spending reduced -- people will buy the Volt instead of the Tesla or whatever -- but I don't think we'll see it for housing. But I guess we will see.

Anonymous wrote: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.

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.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Prices have stabilized. They will not drop in desirable areas and will remain competitive.

I don't see how anyone can claim this. Prices have started to fall due to the Fed raising interests rates, and the Fed made it clear they're going to continue to raise interest rates.

Not in the close-in areas or nice homes.

Keep believing this…

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Supply is still far out stripped by demand. It doesn’t help that current owners bought or refinanced at the lowest interest rates in American history. That makes people hold on to properties instead of trading up or liquidating.

I refinanced $750K at 2.75% in 2021. We might leave DC, but I ain’t ever selling this property at that rate. It’s basically free money and I can find a tenant to pay off this mortgage. If we want to buy another home, we will just wait until we have another downpayment and use leverage.

I really don’t see things going, except in maybe 2nd home markets and Florida (where prices basically doubled).

Lol love replies like these when the reality is that prices HAVE ALREADY fallen and are projected to continue to fall all through next year at a minimum, because inventory is rising. Inventory is where supply meets demand. There are fewer houses being listed but WAY fewer buyers.

https://www.redfin.com/news/housing-market-update-homes-linger-on-market/

The linked article says that in Washington DC, prices fell 2% over last year, and that is the first time prices have fallen since 2016. That isn't even a dent in prices given how much they went up over the last 2+ years (and were going up steadily before that). I'm all for home prices coming down. I think it needs to happen. But what we've seen isn't all that much help. Even another 10% still has prices way higher than pre-pandemic. And part of it is people like PP who are not selling because they could never get a deal like they have.

No it doesn't. The article says DC prices fell "2% or less".

It also says prices in DC haven't fallen since 2016. Do you remember the big crash of 2016? I don't. I do remember 2015 being a little frothy (we bought in 2015) and 2016 was more normal. I think we need to wait and see.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Supply is still far out stripped by demand. It doesn’t help that current owners bought or refinanced at the lowest interest rates in American history. That makes people hold on to properties instead of trading up or liquidating.

I refinanced $750K at 2.75% in 2021. We might leave DC, but I ain’t ever selling this property at that rate. It’s basically free money and I can find a tenant to pay off this mortgage. If we want to buy another home, we will just wait until we have another downpayment and use leverage.

I really don’t see things going, except in maybe 2nd home markets and Florida (where prices basically doubled).

Lol love replies like these when the reality is that prices HAVE ALREADY fallen and are projected to continue to fall all through next year at a minimum, because inventory is rising. Inventory is where supply meets demand. There are fewer houses being listed but WAY fewer buyers.

https://www.redfin.com/news/housing-market-update-homes-linger-on-market/

The linked article says that in Washington DC, prices fell 2% over last year, and that is the first time prices have fallen since 2016. That isn't even a dent in prices given how much they went up over the last 2+ years (and were going up steadily before that). I'm all for home prices coming down. I think it needs to happen. But what we've seen isn't all that much help. Even another 10% still has prices way higher than pre-pandemic. And part of it is people like PP who are not selling because they could never get a deal like they have.

Prices have fallen 2% year over year. That means the insane spike that happened this spring has been erased. We are now at prices lower than November 2021. I assume you do not understand how monetary policy works and have not been watching the financial news if you think that the Fed’s rate hikes have had their full effect on the market.

The fact that prices went up so quickly in such a short period of time is exactly why they can go down quickly, too. Even a 20% drop means everyone except those who bought in 2021-22 will be in great shape. It would be much more sticky if the incline was long and gradual.

Also wanted to add that redfin’s data only goes back to 2015. Prices obviously fell from 2006-2012.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Supply is still far out stripped by demand. It doesn’t help that current owners bought or refinanced at the lowest interest rates in American history. That makes people hold on to properties instead of trading up or liquidating.

I refinanced $750K at 2.75% in 2021. We might leave DC, but I ain’t ever selling this property at that rate. It’s basically free money and I can find a tenant to pay off this mortgage. If we want to buy another home, we will just wait until we have another downpayment and use leverage.

I really don’t see things going, except in maybe 2nd home markets and Florida (where prices basically doubled).

Lol love replies like these when the reality is that prices HAVE ALREADY fallen and are projected to continue to fall all through next year at a minimum, because inventory is rising. Inventory is where supply meets demand. There are fewer houses being listed but WAY fewer buyers.

https://www.redfin.com/news/housing-market-update-homes-linger-on-market/

The linked article says that in Washington DC, prices fell 2% over last year, and that is the first time prices have fallen since 2016. That isn't even a dent in prices given how much they went up over the last 2+ years (and were going up steadily before that). I'm all for home prices coming down. I think it needs to happen. But what we've seen isn't all that much help. Even another 10% still has prices way higher than pre-pandemic. And part of it is people like PP who are not selling because they could never get a deal like they have.

Prices have fallen 2% year over year. That means the insane spike that happened this spring has been erased. We are now at prices lower than November 2021. I assume you do not understand how monetary policy works and have not been watching the financial news if you think that the Fed’s rate hikes have had their full effect on the market.

The fact that prices went up so quickly in such a short period of time is exactly why they can go down quickly, too. Even a 20% drop means everyone except those who bought in 2021-22 will be in great shape. It would be much more sticky if the incline was long and gradual.

There have been several major disasters from FL to CA. Housing materials were scarce even before they hit. My guess is a two year backlog before things clear up?

Supply is so constrained. It is propping up what would otherwise be a correction. Will continue until interest rates fall.

Anonymous wrote:

Anonymous wrote:Supply is still far out stripped by demand. It doesn’t help that current owners bought or refinanced at the lowest interest rates in American history. That makes people hold on to properties instead of trading up or liquidating.

I refinanced $750K at 2.75% in 2021. We might leave DC, but I ain’t ever selling this property at that rate. It’s basically free money and I can find a tenant to pay off this mortgage. If we want to buy another home, we will just wait until we have another downpayment and use leverage.

I really don’t see things going, except in maybe 2nd home markets and Florida (where prices basically doubled).

Lol love replies like these when the reality is that prices HAVE ALREADY fallen and are projected to continue to fall all through next year at a minimum, because inventory is rising. Inventory is where supply meets demand. There are fewer houses being listed but WAY fewer buyers.

https://www.redfin.com/news/housing-market-update-homes-linger-on-market/

The linked article says that in Washington DC, prices fell 2% over last year, and that is the first time prices have fallen since 2016. That isn't even a dent in prices given how much they went up over the last 2+ years (and were going up steadily before that). I'm all for home prices coming down. I think it needs to happen. But what we've seen isn't all that much help. Even another 10% still has prices way higher than pre-pandemic. And part of it is people like PP who are not selling because they could never get a deal like they have.

Seems like housing prices are being set with a planned reduction in mind from the get go. At a glance you’d think prices were all falling right and left but there is a method to this madness and I don’t really think buyers are getting any deals out of it.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think they are already dropping and on a steady decline for the next 18-36 months.

Agree.

As in prices in 3 years may be lower than they are now..?

NP. I think they are likely to be lower in 18 months than they are now. If I were looking, I’d wait 12 months and see what things look like then. Definitely would not buy now.

Anonymous wrote:

Anonymous wrote:I think they are already dropping and on a steady decline for the next 18-36 months.

Agree.

As in prices in 3 years may be lower than they are now..?

Anonymous wrote:

Anonymous wrote:Prices have stabilized. They will not drop in desirable areas and will remain competitive.

I don't see how anyone can claim this. Prices have started to fall due to the Fed raising interests rates, and the Fed made it clear they're going to continue to raise interest rates.

Not in the close-in areas or nice homes.

Anonymous wrote:I think prices for “bad” houses in the DMV will go down. I.e., houses that people would not have considered but for the fact that they lost out in bidding wars to 10 houses in a row. So houses that have some flaws that were overlooked in the heat of 2020-2022. But the houses that were in high demand pre pandemic will not drop price. Because the inventory for the “good” houses will remain low and people will have to jump on them (along with 3-4 other bidders v the 8-12 there would have been in 2021) and they will pay for list or slightly over.

Guess it depends on what you mean by “good” and “bad” houses because high end houses have declined at the fastest pace and supply has risen at the fastest pace. https://www.forbes.com/sites/brendarichardson/2023/01/02/luxury-home-sales-plummet-38-the-biggest-decline-on-record-driven-by-inflation-recession-fears/amp/

Love you DCUMers and your hunches. Just look at the data.