Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When have housing prices ever dropped 30-40%? Especially in the northeast/coastal areas for single family homes?

And whatever drops there were, how long did they remain?

When have housing prices ever increased 30-40% in two years?

When has the Fed ever directly injected trillions of dollars into the economy because a global pandemic ground virtually all economically productivity to a halt?

If you want to have any credibility in a discussion, you will answer questions instead of strawman arguments and ignorance of the premise.

I’ll show you how and answer yours:

How fast a market has risen has nothing to do with how fast, how far, or why it might fall. People have been saying the same thing about many other markets for years. one times they are right, like with beanie babies and baseball cards. Sometimes they are wrong, like with the stock market. There is no direct correlation so the insinuation of your question is proved fallacious.

As for your second question: maybe you’ve heard of other massive stimulus packages, like the New Deal and ARRA, for instance? Those did not precede a crash the real estate market or any other market.

So you fail.

Now answer the questions asked please?

When have housing prices ever dropped 30-40%? Especially in the northeast/coastal areas for single family homes?

And whatever drops there were, how long did they remain?

Lol, you were the one asking a question that insinuated an answer. I was pointing out that we are in uncharted territory. Except that, to answer your question, the only other time prices went up so quickly and to such high levels of unaffordability was 2004-2006 and we all know what happened then. Take at look at NJ. Prices peaked in 2006 and didn’t reach that level until 2021. That’ doesn’t even account for inflation.

https://fred.stlouisfed.org/series/NJSTHPI

As for stimulus, those examples you cited were instituted in times of great depressions/recessions and did NOT work to juice the economy. The markets were already crashed. Everyone, literally even the Fed, sees now that this stimulus was too much and went on for too long. Which is why they are now taking such a heavy handed approach.

Thanks, I believe in facts and data.

So according to the data you posted, when asked "When have housing prices ever dropped 30-40%?" the data would indicate "Never". (22% being much less than 30-40%)

The national data did surprise me, I admit, that the recovery time was 9 years, and 6 to the pre-bubble values. It was not that long where I live. So you get partial credit for that one.

If you plan to continue engaging in discussions on the internet, I’d suggest you rethink the pedantic shtick. It’s really off putting.

Sorry, sometimes pedantic shtick just works perfectly, and this was one of them. Don't make weak arguments and it won't work, right? So it's on you.

lol at some gs-13 pretending to be a phd in econ

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Fffggg123 wrote:Why is this area losing population? My impression was the opposite with Tysons city being built and Amazon HQ

Many reasons: https://www.npr.org/local/305/2021/12/23/1067215177/new-census-data-finds-d-c-had-nation-s-largest-percentage-drop-in-population

What are the demographics of people leaving?

It appears that the demographic consists of "people who want more space". https://www.washingtonpost.com/dc-md-va/2021/12/24/dc-population-drop-covid/

Using the 2020 Census for any population metrics should be banned. The data was taken during March 2020 - August 2020 when everyone was fleeing cities because NYC had 40,000 individuals die in their streets in 8 weeks.

2020 US Census began Jan. 21, cut-off was April 1, 2020.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why are people forgetting that there is a housing shortage, especially for single family homes. Construction of new hosing has not picked up. Rent prices in some places are almost as high as mortgages. People still have kids and need more space.

Home prices will not go down. But they will not grow at the same rate as they have the past few years. We’re likely to see a steady growth over a ten year period. By that time there will be more single family housing available. Things will balance out.

+1

1) the “surge” isn’t close to the peak of 2005.


2) and the supply is still trailing demand.
https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain

The market will soften. If you have an undesirable property it might sit longer or take a small price hit. But overall homes in desirable areas will stagnate at most.

Facts (again) for the obsessed poster.

DP. Maybe. But it isn’t clear what data chart #1 is even showing, and #2 assumes that demand is not influenced by interest rates, inflation, reduction in WFH (or one of many other factors that can influence those currently in the market). Supply doesn’t always catch up with demand. Demand destruction is a thing.

I’m not the “investment banker,” but as someone who is older and been through more of these cycles (anyone else here remember the S&L crises?), I think the warning signs are flashing and you ignore them at your peril. No one knows how bad it will be, and maybe(!) the Fed will figure out how to navigate out of this without a major crash. On the other hand, I saw one investment bank note today that flatly said the only question now was whether we’ll see a recession or stagflation.

I honestly don’t care whether you agree or not. I bought a house in DC in 1999, and saw it’s value rise and fall and rise again through 2007 & beyond. We bought our current house in 2017 in a place that has benefited from Covid migration and it has doubled in value on paper. I’d be happy for it to stay that way, but I have a very low mortgage and when the inevitable happens and the market cools, we’ll be fine. I’m not saying anyone who is buying now is wrong. However, you do need to be prepared for the worst case scenario. It is concerning when I see so many people on this board who are so wrapped up in current bidding wars & seem to be completely unaware or in denial about the impact of the larger economic picture. If you can wait out a dip, or have the cash to buy out an underwater mortgage, and understand the risk, good for you. But I had friends in 2007 (in the DC area!) who had to damage their credit with a short sale to get out of houses that were underwater, and it’s not a happy thing, especially when they thought they were doing a “smart” thing by buying in the “hot” DC real estate market. Maybe the current market is really strong. Or maybe we’re just seeing the last gasp of people trying to catch the last of the low interest rates.

Investment Banker here.

Am signing off for the night. While I love a good, lively debate/argument, between family and work, I usually do not have this much time to spend on..well..whatever this was.

I have no hidden agenda or anything like that, but we should strive to be pragmatic, not just about RE per se, but RE is probably one of the biggest financial decisions an average person makes. You guys are free to believe whatever you wanna believe, it aint my money that's on the table. (It's on a different table).

Anonymous wrote:

Anonymous wrote:Investment Banker here. (I'll keep saying that, just to piss off some of you )

Character assassination happens, when you run out of arguments. If you can't talk to the topic, shut up.

They occur when you blatantly disregard facts.

Care to respond to facts presented?

Like what? The chart a few posts above? I can show lots of charts as well. It's always about how you INTERPRET data, the charts by themselves are meaningless. The whole glass half full, half empty paradigm.



And the accompanying article (p.s. - two days ago), with the first sentence as "It has been nearly three decades since mortgage rates spiked this quickly. And there’s no indication they are going to slow down anytime soon."

https://www.washingtonpost.com/business/2022/04/07/mortgage-rates-keep-climbing-show-no-sign-slowing-down/

Anonymous wrote:Investment Banker here. (I'll keep saying that, just to piss off some of you )

Character assassination happens, when you run out of arguments. If you can't talk to the topic, shut up.

They occur when you blatantly disregard facts.

Care to respond to facts presented?

Investment Banker here. (I'll keep saying that, just to piss off some of you )

Character assassination happens, when you run out of arguments. If you can't talk to the topic, shut up.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Mortgage delinquencies remain low.

https://fred.stlouisfed.org/series/DRSFRMACBS

Rental vacancies are the lowest in 35+ years.

https://fred.stlouisfed.org/series/RRVRUSQ156N

No increase in monthly supply of housing.

No inventory and consumer affordability = no bubble

Investment Banker here.

So, riddle me this genius. If your interpretation of the data is THAT, why are interest rates rising at the fastest pace in 40 years? (They are). What tea leaves are the bond market traders reading, that you're not?

Investment banker? Not a “full, tenured professor”? Or maybe we have two nut jobs on here?

I think maybe they did one too many key bumps on their way to pretending to be a Congressperson.

Anonymous wrote:

Anonymous wrote:Mortgage delinquencies remain low.

https://fred.stlouisfed.org/series/DRSFRMACBS

Rental vacancies are the lowest in 35+ years.

https://fred.stlouisfed.org/series/RRVRUSQ156N

No increase in monthly supply of housing.

No inventory and consumer affordability = no bubble

Investment Banker here.

So, riddle me this genius. If your interpretation of the data is THAT, why are interest rates rising at the fastest pace in 40 years? (They are). What tea leaves are the bond market traders reading, that you're not?

Investment banker? Not a “full, tenured professor”? Or maybe we have two nut jobs on here?

Anonymous wrote:

Anonymous wrote:Why are people forgetting that there is a housing shortage, especially for single family homes. Construction of new hosing has not picked up. Rent prices in some places are almost as high as mortgages. People still have kids and need more space.

Home prices will not go down. But they will not grow at the same rate as they have the past few years. We’re likely to see a steady growth over a ten year period. By that time there will be more single family housing available. Things will balance out.

+1

1) the “surge” isn’t close to the peak of 2005.


2) and the supply is still trailing demand.
https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain

The market will soften. If you have an undesirable property it might sit longer or take a small price hit. But overall homes in desirable areas will stagnate at most.

Facts (again) for the obsessed poster.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When have housing prices ever dropped 30-40%? Especially in the northeast/coastal areas for single family homes?

And whatever drops there were, how long did they remain?

When have housing prices ever increased 30-40% in two years?

When has the Fed ever directly injected trillions of dollars into the economy because a global pandemic ground virtually all economically productivity to a halt?

If you want to have any credibility in a discussion, you will answer questions instead of strawman arguments and ignorance of the premise.

I’ll show you how and answer yours:

How fast a market has risen has nothing to do with how fast, how far, or why it might fall. People have been saying the same thing about many other markets for years. one times they are right, like with beanie babies and baseball cards. Sometimes they are wrong, like with the stock market. There is no direct correlation so the insinuation of your question is proved fallacious.

As for your second question: maybe you’ve heard of other massive stimulus packages, like the New Deal and ARRA, for instance? Those did not precede a crash the real estate market or any other market.

So you fail.

Now answer the questions asked please?

When have housing prices ever dropped 30-40%? Especially in the northeast/coastal areas for single family homes?

And whatever drops there were, how long did they remain?

Lol, you were the one asking a question that insinuated an answer. I was pointing out that we are in uncharted territory. Except that, to answer your question, the only other time prices went up so quickly and to such high levels of unaffordability was 2004-2006 and we all know what happened then. Take at look at NJ. Prices peaked in 2006 and didn’t reach that level until 2021. That’ doesn’t even account for inflation.

https://fred.stlouisfed.org/series/NJSTHPI

As for stimulus, those examples you cited were instituted in times of great depressions/recessions and did NOT work to juice the economy. The markets were already crashed. Everyone, literally even the Fed, sees now that this stimulus was too much and went on for too long. Which is why they are now taking such a heavy handed approach.

Thanks, I believe in facts and data.

So according to the data you posted, when asked "When have housing prices ever dropped 30-40%?" the data would indicate "Never". (22% being much less than 30-40%)

The national data did surprise me, I admit, that the recovery time was 9 years, and 6 to the pre-bubble values. It was not that long where I live. So you get partial credit for that one.

DP. FWIW, I believe the people who are presenting a 30-40% drop as a worst case scenario, are extrapolating from the drop we saw in 2007. The increase in prices we’ve seen is greater than the 2000-2006 run up, and if we lose an equivalent % of the increase, the drop would be 30-40%.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP. I thought the problem was supply not demand. In other words there is not an unusual amount of buyers but that there is historically low inventory and that’s what’s driving the frenzy. Is that not the case?

Low inventory does not mean number of houses that exist. Inventory is the number of houses for sale at a given time.

There were more home sales in 2021 than in 2019. Tons of houses were sold. The problem now is that there are a lot more buyers after summer 2020. The question is why do more people now want to buy a home vs rent, live with roommates or family, etc. It seems to me (and many other analysts) that the most likely reasons are low interest rates, stimulus from the government, and desire not to live with roommates/family after months of quarantine. As demand built, prices went up and the FOMO cycle began. Please remember that it is not only primary residences that are being purchased. Much more investment activity this time (mostly mom and pop investors, but also ibuyers and institutional investors). Inventory is low because there are all sorts of interests buying houses (people living there, investors, etc) and they are buying them quickly so the houses don’t stay on the market so long.

Just step back and think about it. If we don’t have enough houses for everyone, why did prices shoot up so quickly? Where were all those buyers before? Millennials were not homeless, and they are free to continue whatever living arrangements they had. Investors were investing elsewhere. What changed was Covid, and the Fed and Congress juicing the market to make real estate a very attractive investment. Once it is not longer attractive (for example, interest rates jacked up and/or perception that we are at the peak), investors will look for returns elsewhere and people needing a place to live will make other choices (stay in the house they own instead of upgrading, rent, live with family, etc).

So, you agree that this was an unusual circumstance that does not define typical market (RE in this case) performance, and will not persist, since:

"low interest rates" - No longer the case.
"stimulus from the government," - No longer the case.
"desire not to live with roommates/family after months of quarantine" - No longer the case, as case/Hospitalization/fatality numbers are way way down. Hell, mask mandates have been lifted almost across the country, kids are back unschool, bars are open...

(A refreshing comment, I must admit)

Yes, absolutely! These factors were transitory and as they fade, demand (and therefore housing prices) will revert to the mean (decline).

Oh, except that we have more new housing in the pipeline than we’ve seen since 2006, and those houses will be completed in a high interest rate environment. As a result, home builders are very worried. https://finance.yahoo.com/amphtml/news/housing-market-apos-staring-face-213057104.html

For those looking for new podcast material, this analyst lays it out pretty clearly (and he doesn’t even get into the whole issue with the Fed selling MBS). And he is a guest on a podcast that is generally bullish on housing and pro-NAR. The funniest part is that right after he talks about mom and pop investors using under the radar alternative financing to purchase investment properties there is an ad for non-QM loans! Can’t make this stuff up.
https://www.housingwire.com/podcast/unpacking-builders-market-sentiment-with-rick-palacios/

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When have housing prices ever dropped 30-40%? Especially in the northeast/coastal areas for single family homes?

And whatever drops there were, how long did they remain?

When have housing prices ever increased 30-40% in two years?

When has the Fed ever directly injected trillions of dollars into the economy because a global pandemic ground virtually all economically productivity to a halt?

If you want to have any credibility in a discussion, you will answer questions instead of strawman arguments and ignorance of the premise.

I’ll show you how and answer yours:

How fast a market has risen has nothing to do with how fast, how far, or why it might fall. People have been saying the same thing about many other markets for years. one times they are right, like with beanie babies and baseball cards. Sometimes they are wrong, like with the stock market. There is no direct correlation so the insinuation of your question is proved fallacious.

As for your second question: maybe you’ve heard of other massive stimulus packages, like the New Deal and ARRA, for instance? Those did not precede a crash the real estate market or any other market.

So you fail.

Now answer the questions asked please?

When have housing prices ever dropped 30-40%? Especially in the northeast/coastal areas for single family homes?

And whatever drops there were, how long did they remain?

Lol, you were the one asking a question that insinuated an answer. I was pointing out that we are in uncharted territory. Except that, to answer your question, the only other time prices went up so quickly and to such high levels of unaffordability was 2004-2006 and we all know what happened then. Take at look at NJ. Prices peaked in 2006 and didn’t reach that level until 2021. That’ doesn’t even account for inflation.

https://fred.stlouisfed.org/series/NJSTHPI

As for stimulus, those examples you cited were instituted in times of great depressions/recessions and did NOT work to juice the economy. The markets were already crashed. Everyone, literally even the Fed, sees now that this stimulus was too much and went on for too long. Which is why they are now taking such a heavy handed approach.

Thanks, I believe in facts and data.

So according to the data you posted, when asked "When have housing prices ever dropped 30-40%?" the data would indicate "Never". (22% being much less than 30-40%)

The national data did surprise me, I admit, that the recovery time was 9 years, and 6 to the pre-bubble values. It was not that long where I live. So you get partial credit for that one.

If you plan to continue engaging in discussions on the internet, I’d suggest you rethink the pedantic shtick. It’s really off putting.

Sorry, sometimes pedantic shtick just works perfectly, and this was one of them. Don't make weak arguments and it won't work, right? So it's on you.

Anonymous wrote:

Anonymous wrote:NP. I thought the problem was supply not demand. In other words there is not an unusual amount of buyers but that there is historically low inventory and that’s what’s driving the frenzy. Is that not the case?

Low inventory does not mean number of houses that exist. Inventory is the number of houses for sale at a given time.

There were more home sales in 2021 than in 2019. Tons of houses were sold. The problem now is that there are a lot more buyers after summer 2020. The question is why do more people now want to buy a home vs rent, live with roommates or family, etc. It seems to me (and many other analysts) that the most likely reasons are low interest rates, stimulus from the government, and desire not to live with roommates/family after months of quarantine. As demand built, prices went up and the FOMO cycle began. Please remember that it is not only primary residences that are being purchased. Much more investment activity this time (mostly mom and pop investors, but also ibuyers and institutional investors). Inventory is low because there are all sorts of interests buying houses (people living there, investors, etc) and they are buying them quickly so the houses don’t stay on the market so long.

Just step back and think about it. If we don’t have enough houses for everyone, why did prices shoot up so quickly? Where were all those buyers before? Millennials were not homeless, and they are free to continue whatever living arrangements they had. Investors were investing elsewhere. What changed was Covid, and the Fed and Congress juicing the market to make real estate a very attractive investment. Once it is not longer attractive (for example, interest rates jacked up and/or perception that we are at the peak), investors will look for returns elsewhere and people needing a place to live will make other choices (stay in the house they own instead of upgrading, rent, live with family, etc).

So, you agree that this was an unusual circumstance that does not define typical market (RE in this case) performance, and will not persist, since:

"low interest rates" - No longer the case.
"stimulus from the government," - No longer the case.
"desire not to live with roommates/family after months of quarantine" - No longer the case, as case/Hospitalization/fatality numbers are way way down. Hell, mask mandates have been lifted almost across the country, kids are back unschool, bars are open...

(A refreshing comment, I must admit)

Anonymous wrote:NP. I thought the problem was supply not demand. In other words there is not an unusual amount of buyers but that there is historically low inventory and that’s what’s driving the frenzy. Is that not the case?

Low inventory does not mean number of houses that exist. Inventory is the number of houses for sale at a given time.

There were more home sales in 2021 than in 2019. Tons of houses were sold. The problem now is that there are a lot more buyers after summer 2020. The question is why do more people now want to buy a home vs rent, live with roommates or family, etc. It seems to me (and many other analysts) that the most likely reasons are low interest rates, stimulus from the government, and desire not to live with roommates/family after months of quarantine. As demand built, prices went up and the FOMO cycle began. Please remember that it is not only primary residences that are being purchased. Much more investment activity this time (mostly mom and pop investors, but also ibuyers and institutional investors). Inventory is low because there are all sorts of interests buying houses (people living there, investors, etc) and they are buying them quickly so the houses don’t stay on the market so long.

Just step back and think about it. If we don’t have enough houses for everyone, why did prices shoot up so quickly? Where were all those buyers before? Millennials were not homeless, and they are free to continue whatever living arrangements they had. Investors were investing elsewhere. What changed was Covid, and the Fed and Congress juicing the market to make real estate a very attractive investment. Once it is not longer attractive (for example, interest rates jacked up and/or perception that we are at the peak), investors will look for returns elsewhere and people needing a place to live will make other choices (stay in the house they own instead of upgrading, rent, live with family, etc).