My MPLS suburb home listed today, say it ain't so!!RoadThunder wrote: ↑Wed May 11, 2022 4:01 pm My part of Minneapolis metro area is really slowing down. Seeing multiple price drops.
Tales from this insane real estate market [Home sales]
Re: Tales from this insane real estate market
Last edited by SubPar on Thu May 12, 2022 9:36 am, edited 1 time in total.
- Darth Xanadu
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Re: Tales from this insane real estate market
I'm one of them! But in my town, there have been 7 places listed just this week, but less than half of current listings are <$1m so I tend to agree that there is still a lack of affordable housing.
I haven't been tracking sales price vs list or time on the market too closely since I closed on my own house in August of last year.
Re: Tales from this insane real estate market
The value of our treasured vacation home tripled, so we thought it was better to sell. $1200/sq ft in the middle of nowhere makes no sense at all. In escrow now with an all cash As-as contract. We can use the proceeds to vacation there or anywhere we like the rest of our lives. No more trips to the hardware store on vacation!
BH Consumer FAQ: |
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House? 20% down and 3x salary. |
Vacation house? No. |
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Goods? Costco.
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Re: Tales from this insane real estate market
Where was it located?snackdog wrote: ↑Thu May 12, 2022 9:55 am The value of our treasured vacation home tripled, so we thought it was better to sell. $1200/sq ft in the middle of nowhere makes no sense at all. In escrow now with an all cash As-as contract. We can use the proceeds to vacation there or anywhere we like the rest of our lives. No more trips to the hardware store on vacation!
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Re: Tales from this insane real estate market
How long did it take to triple in value? We bought a vacation property three years ago and it’s apparently doubled in value (Zillow) but not inclined to sell. Congrats on getting such a good return on your investment, and relief from home repairs!snackdog wrote: ↑Thu May 12, 2022 9:55 am The value of our treasured vacation home tripled, so we thought it was better to sell. $1200/sq ft in the middle of nowhere makes no sense at all. In escrow now with an all cash As-as contract. We can use the proceeds to vacation there or anywhere we like the rest of our lives. No more trips to the hardware store on vacation!
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Re: Tales from this insane real estate market
I would totally sell and invest the profit of $800k to fund future ski vacations!FoundingFather wrote: ↑Tue May 10, 2022 11:17 am Ski Resort in Montana: My parents bought a condo for $650,000 the middle of last year - they just got offered $1.6M.
If you invest using 60/40, and spend $10k per one-week ski trip, and take maybe five trips per year, that’s a lot of ski trips!
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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Re: Tales from this insane real estate market
That idea is definitely up my alley. My parents, however, want to "own where they vacation", so they have resisted my attempts to encourage as you suggest (my parents are getting older, and the burden of keeping up two vacation properties seems to be becoming a bit much for them, hence my bringing up the idea).finite_difference wrote: ↑Fri May 13, 2022 10:47 amI would totally sell and invest the profit of $800k to fund future ski vacations!FoundingFather wrote: ↑Tue May 10, 2022 11:17 am Ski Resort in Montana: My parents bought a condo for $650,000 the middle of last year - they just got offered $1.6M.
If you invest using 60/40, and spend $10k per one-week ski trip, and take maybe five trips per year, that’s a lot of ski trips!
I do think that younger generations will be more interesting in not owning a vacation property and just paying for the trip.
Founding Father
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Re: Tales from this insane real estate market
Awesomesnackdog wrote: ↑Thu May 12, 2022 9:55 am The value of our treasured vacation home tripled, so we thought it was better to sell. $1200/sq ft in the middle of nowhere makes no sense at all. In escrow now with an all cash As-as contract. We can use the proceeds to vacation there or anywhere we like the rest of our lives. No more trips to the hardware store on vacation!
Re: Tales from this insane real estate market
Here in Central Oregon we get a lot of California refugees. The market has been pretty dang hot for several years now... in the time I've owned my current house, its market value has gone up about 65 percent. But things seem to be cooling down. A 4-bed, 2-bath house in my neighborhood was recently listed at $555,000, and just sold for that very same price. No feeding frenzy, apparently. I shared this data point with my real estate agent, and she said it's consistent with what she's been seeing -- prices seem to be leveling off here.
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All generalizations are false, including this one.
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Re: Tales from this insane real estate market
I've kept an eye on the market as well and definitely see it starting to slow. Whereas a month ago I'd get an email with one or two houses that fit our criteria, now its 6-7 and they are sitting. I think some of it is a function of sellers' FOMO. People who were on the fence about selling are now listing and trying to get in on the tail end of the hot market, but it may be a little too late.
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Re: Tales from this insane real estate market
This is unfortunately the norm from what I hear from my family who live on the front range. But I think it'll level off. There simply are not that many jobs in Denver that pay enough to support Bay Area home prices. Sure, you'll have transplants from California or Texas who are flush with cash, but most people are not making the kind of income it takes to afford a $1m+ house.
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Re: Tales from this insane real estate market
My friend sold his home in Medina on the 1st day it went to market. This was 10 days ago. It is not Minneapolis but a northwest suburb.SubPar wrote: ↑Thu May 12, 2022 9:29 amMy MPLS suburb home listed today, say it ain't so!!RoadThunder wrote: ↑Wed May 11, 2022 4:01 pm My part of Minneapolis metro area is really slowing down. Seeing multiple price drops.
Another friend of mine sold his home Plymouth in the first week. This was 3 weeks ago.
Many homes in my neighborhood in Maple Grove sold in the first week.
Re: Tales from this insane real estate market
Follow up: “only” two offers over three days on our SLP home which, admittedly, fell a bit below our expectations (or hopes?) given the amount of traffic and positive feedback it received. Accepted at $15k over ask, waived contingencies, strong earnest. Honestly, do feel like our listing was poorly managed, but we will have secured a strong offer $65k above our basis (originally purchased in early 2018) so I am not complaining.newkidontheblock wrote: ↑Sat May 14, 2022 6:30 pmMy friend sold his home in Medina on the 1st day it went to market. This was 10 days ago. It is not Minneapolis but a northwest suburb.SubPar wrote: ↑Thu May 12, 2022 9:29 amMy MPLS suburb home listed today, say it ain't so!!RoadThunder wrote: ↑Wed May 11, 2022 4:01 pm My part of Minneapolis metro area is really slowing down. Seeing multiple price drops.
Another friend of mine sold his home Plymouth in the first week. This was 3 weeks ago.
Many homes in my neighborhood in Maple Grove sold in the first week.
As (bad) luck would have it, just found out homeowner we’re buying from is wrongly trying to get out of our executed, non-contingent purchase agreement. Apparently their home purchase is in jeopardy and, as they say, crap flows downhill. So that’s not cool. Here’s to hoping we’re not homeless come August.
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Re: Tales from this insane real estate market
I haven’t followed the rates lately…..what are the current mortgage rates for 15 and 30 year fixed?
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Re: Tales from this insane real estate market
I don’t knowfishandgolf wrote: ↑Mon May 16, 2022 9:18 pm I haven’t followed the rates lately…..what are the current mortgage rates for 15 and 30 year fixed?
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Re: Tales from this insane real estate market
I'm seeing the same thing in FL. I know several people doing this in my neighborhood. A month or two ago there was nothing for sale and everything that came on the market was swarmed with 10+ offers. Now there's multiple homes available and sitting. Open houses are much less busy. Things are starting to turn. I expect inventory will keep rising and prices to stabilize or possibly start to drop soon.NYCaviator wrote: ↑Sat May 14, 2022 8:09 am I've kept an eye on the market as well and definitely see it starting to slow. Whereas a month ago I'd get an email with one or two houses that fit our criteria, now its 6-7 and they are sitting. I think some of it is a function of sellers' FOMO. People who were on the fence about selling are now listing and trying to get in on the tail end of the hot market, but it may be a little too late.
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Re: Tales from this insane real estate market
For the least risky borrowers, ~0.5% to ~1% less than what this website reports:fishandgolf wrote: ↑Mon May 16, 2022 9:18 pm I haven’t followed the rates lately…..what are the current mortgage rates for 15 and 30 year fixed?
https://www.mortgagenewsdaily.com/
Re: Tales from this insane real estate market
For the most part, I agree that this is the more sensible approach for what are essentially discretionary vacation expenses. That being said, it's important to remember that when it comes to owning vs. renting real estate, the former has mostly fixed, bounded costs in today's nominal dollars spread over the life of a very long loan, while the latter rises with inflation in perpetuity. That doesn't automatically make the former a better deal, but you would expect that if the prices of real estate double in an area, at some point, it would become the norm for the prices of vacations in the area to double. Indeed, one of the biggest drivers of inflation during this pandemic inflationary period has been housing, in part because of the access to insanely low mortgage rates, low supply, and already very strong owner equity nationwide. So when doing the calculations comparing the cost of owning a vacation property vs. just paying for hotel rooms or whatever, it's important to be honest and realistic with inflation projections, which is inherently hard to do right now given how chaotic things are around the world. For all we know, vacation property owners might make out like bandits over the next 30 years. I wouldn't bet on it, but only time will tell, which is kind of how holding real estate works.FoundingFather wrote: ↑Fri May 13, 2022 3:38 pm I do think that younger generations will be more interesting in not owning a vacation property and just paying for the trip.
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Re: Tales from this insane real estate market
Of course you also have to account for opportunity cost of capital, and you should also do that in real terms. And while on the one hand real rates of return going forward may look a little low given current valuations, particularly in US assets, on the other there is no particular reason to think US real estate is immune to that logic. Moreover, any given piece of real estate is by nature an undiversified investment, and likely carries with it some diversifiable and therefore uncompensated risk . . . .dboeger1 wrote: ↑Tue May 17, 2022 1:44 amFor the most part, I agree that this is the more sensible approach for what are essentially discretionary vacation expenses. That being said, it's important to remember that when it comes to owning vs. renting real estate, the former has mostly fixed, bounded costs in today's nominal dollars spread over the life of a very long loan, while the latter rises with inflation in perpetuity. That doesn't automatically make the former a better deal, but you would expect that if the prices of real estate double in an area, at some point, it would become the norm for the prices of vacations in the area to double. Indeed, one of the biggest drivers of inflation during this pandemic inflationary period has been housing, in part because of the access to insanely low mortgage rates, low supply, and already very strong owner equity nationwide. So when doing the calculations comparing the cost of owning a vacation property vs. just paying for hotel rooms or whatever, it's important to be honest and realistic with inflation projections, which is inherently hard to do right now given how chaotic things are around the world. For all we know, vacation property owners might make out like bandits over the next 30 years. I wouldn't bet on it, but only time will tell, which is kind of how holding real estate works.FoundingFather wrote: ↑Fri May 13, 2022 3:38 pm I do think that younger generations will be more interesting in not owning a vacation property and just paying for the trip.
Similarly, there are typically other costs of owning--maintenance, taxes, insurance, utilities, and so on--and those also might tend to go up real. Indeed, that is part of why rents have to go up real, just to cover those other costs the landlord is facing.
Anyway, the way the math typically works out, you need the vacation property to be occupied some particular fraction of the time in order to reach an estimated breakeven point with just renting comparable vacation properties. That can be by the owners themselves, or they can rent it out, but one way or another they have to be capturing enough benefit from the actual use of the property. That breakeven occupancy rate then depends on things like the market rates for buying versus renting (with renting going up in real terms), interest rates, other property costs (also going up in real terms), assumptions about returns on diversified assets versus the one property, and so on.
And some people use their vacation properties a lot. Some people are willing to take on the burden of renting them out. And so on. So, this is not automatically a bad idea.
Still, we personally like a lot of variety in our vacations, and do not particularly want jobs as landlords. So that is a rather insurmountable problem, at least for now.
But if you are the type of person who actually likes going back to the same spot over and over, or you would actually enjoy running a little rental business of your own . . . that math could work out OK. At least if your financial plan would not be ruined if your property did poorly in terms of appreciation net of costs.
Re: Tales from this insane real estate market
For today, Tuesday, May 17, 2022, the current average 30-year fixed-mortgage rate is 5.42%, down 15 basis points from a week ago. If you're looking to refinance, the current average rate for a 30-year fixed refinance is 5.35%, declining 18 basis points over the last week.fishandgolf wrote: ↑Mon May 16, 2022 9:18 pm I haven’t followed the rates lately…..what are the current mortgage rates for 15 and 30 year fixed?
Re: Tales from this insane real estate market
https://mobile.twitter.com/lenkiefer/st ... 6076169217
U.S. home purchase mortgage applications fall 15% from a year ago
U.S. home purchase mortgage applications fall 15% from a year ago
Re: Tales from this insane real estate market
Honestly this seems pretty decent. Yeah maybe you got to the party a little late but you still did fine. As a buyer (and not a seller as I rent) I feel time is on my side at this point. I don't expect a crash but I do expect to be able to make an offer soon enough without waiving all contingencies. I saw a great house this weekend and would have made an offer on but, nah I'll wait not going to play the games still necessary to buy a place. It sold in three days so they did just fine without my offer.SubPar wrote: ↑Mon May 16, 2022 9:12 pm
Follow up: “only” two offers over three days on our SLP home which, admittedly, fell a bit below our expectations (or hopes?) given the amount of traffic and positive feedback it received. Accepted at $15k over ask, waived contingencies, strong earnest. Honestly, do feel like our listing was poorly managed, but we will have secured a strong offer $65k above our basis (originally purchased in early 2018) so I am not complaining.
Last edited by THY4373 on Wed May 18, 2022 5:31 pm, edited 2 times in total.
Re: Tales from this insane real estate market
You can taste the desperation with mortgage companies right now. I was literally mid-way through filling out an online app and the lender was already calling and texting me. Got a pre-approval in less than a day. No hurry to buy but decided I wanted that in my back pocket just in case.exarkun wrote: ↑Wed May 18, 2022 3:22 pm https://mobile.twitter.com/lenkiefer/st ... 6076169217
U.S. home purchase mortgage applications fall 15% from a year ago
Re: Tales from this insane real estate market
Yep, we feel good about it overall. Does feel like the game of musical chairs is slowing...at least in our area. We had a strong listing at a price point attainable for many first-time homebuyers -- my bias aside, it's a quintessential starter home in an area younger folks want to live. Completely anecdotal, of course, but just my $.02.THY4373 wrote: ↑Wed May 18, 2022 5:24 pmHonestly this seems pretty decent. Yeah maybe you got to the party a little late but you still did fine. As a buyer (and not a seller as I rent) I feel time is on my side at this point. I don't expect a crash but I do expect to be able to make an offer soon enough without waiving all contingencies. I saw a great house this weekend and would have made an offer on but, nah I'll wait not going to play the games still necessary to buy a place. It sold in three days so they did just fine without my offer.SubPar wrote: ↑Mon May 16, 2022 9:12 pm
Follow up: “only” two offers over three days on our SLP home which, admittedly, fell a bit below our expectations (or hopes?) given the amount of traffic and positive feedback it received. Accepted at $15k over ask, waived contingencies, strong earnest. Honestly, do feel like our listing was poorly managed, but we will have secured a strong offer $65k above our basis (originally purchased in early 2018) so I am not complaining.
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Is the housing market cooling off? Any first or second hand experience?
[Thread merged into here --admin LadyGeek]
News sites seem to suggest market in slowing down. What are you observing in your area?
News sites seem to suggest market in slowing down. What are you observing in your area?
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Re: Is the housing market cooling off? Any first or second hand experience?
Seattle metro here. Eastside but I'm surveying a broad area. Definitely cooling. Seeing price reductions. Granted those listings were priced over their skis. But haven't seen that in years.
Re: Is the housing market cooling off? Any first or second hand experience?
SoCal- my wife’s disbelieving updates on nearby sales becoming less frequent. Is that third hand experience?
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Re: Is the housing market cooling off? Any first or second hand experience?
Florida: DOM definitely going up. No significant reduction in prices though. Listings that were higher than last comp sales are dropping the prices just enough to stay at par. Volume is definitely lower. But may pick up in June-july.
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Re: Is the housing market cooling off? Any first or second hand experience?
I've been watching a couple of cities around the country where we have some sort of interest for a year or two.
The prices had seemed totally ridiculous, but the homes were mostly selling, including at way over asking. Of course, "asking" is not particularly meaningful in these situations.
I'm also seeing more price reductions; I haven't been paying too much attention to days on market, and sometimes those get re-set when a deal falls through, and sometimes not (?).
However, I've also had the feeling that people kept pricing higher and higher because of the high prices they were seeing, and that's sort of a runaway train...
So perhaps the asking prices just got so stretched... and that's why the reductions?
Who knows!?
The Redfin and Zillow price estimates of our house keep going up, and it's absurd.
RM
The prices had seemed totally ridiculous, but the homes were mostly selling, including at way over asking. Of course, "asking" is not particularly meaningful in these situations.
I'm also seeing more price reductions; I haven't been paying too much attention to days on market, and sometimes those get re-set when a deal falls through, and sometimes not (?).
However, I've also had the feeling that people kept pricing higher and higher because of the high prices they were seeing, and that's sort of a runaway train...
So perhaps the asking prices just got so stretched... and that's why the reductions?
Who knows!?
The Redfin and Zillow price estimates of our house keep going up, and it's absurd.
RM
This signature is a placebo. You are in the control group.
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Re: Is the housing market cooling off? Any first or second hand experience?
Home prices haven’t come down but homes aren’t selling in the first week anymore. I guess we will see where it goes from here but I don’t see a crash coming in our local market, but maybe a plateau.
Re: Is the housing market cooling off? Any first or second hand experience?
I’ve been looking to buy a house for the past 6 months in the outskirts of seattle.
Houses previously would stay on Zillow/Redfin for a day or two. Now they’ve been up for weeks still(queue ridiculous asking price). I’ve seen many also that were taken off Zillow be put back on for whatever reason.
Definitely seems to be slowing, prices don’t seem to be going down too much though.
The increase in interest are really stretching peoples already stretched budget in my opinion. Hoping it cools off a lot more so I can buy a house since I will not buy a house and be house poor
Houses previously would stay on Zillow/Redfin for a day or two. Now they’ve been up for weeks still(queue ridiculous asking price). I’ve seen many also that were taken off Zillow be put back on for whatever reason.
Definitely seems to be slowing, prices don’t seem to be going down too much though.
The increase in interest are really stretching peoples already stretched budget in my opinion. Hoping it cools off a lot more so I can buy a house since I will not buy a house and be house poor
Re: Is the housing market cooling off? Any first or second hand experience?
I'm seeing the same thing here yet at the same time I'll still see houses in my neighborhood sell and scratch my head. There seems to be no rhyme or reason why one sells more than another.professor_americus wrote: ↑Tue May 24, 2022 11:12 pm Seattle metro here. Eastside but I'm surveying a broad area. Definitely cooling. Seeing price reductions. Granted those listings were priced over their skis. But haven't seen that in years.
Re: Is the housing market cooling off? Any first or second hand experience?
I do not have any first hand experience. I have been following Bill McBride for about 10 years at his Calculated Risk website. He has a newsletter that chas more details in the housing industry, if interested.
https://www.calculatedriskblog.com/
https://www.calculatedriskblog.com/
Re: Is the housing market cooling off? Any first or second hand experience?
Homes in our area continue to sell before being publicly listed.
Many listed homes are turning over in less than 15 days.
Live is a LCOL small midwestern city.
All the best.
Many listed homes are turning over in less than 15 days.
Live is a LCOL small midwestern city.
All the best.
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Re: Is the housing market cooling off? Any first or second hand experience?
I hope not… about to list our house
One anecdote from our street which is in a fairly high demand neighborhood with very low inventory…
A house went on market and received multiple offers slightly above asking and one non-local, all cash offer 12% over asking (buyer has not been in the house). We haven’t heard whether inspection contingencies were waived.
One anecdote from our street which is in a fairly high demand neighborhood with very low inventory…
A house went on market and received multiple offers slightly above asking and one non-local, all cash offer 12% over asking (buyer has not been in the house). We haven’t heard whether inspection contingencies were waived.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
Re: Is the housing market cooling off? Any first or second hand experience?
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Re: Is the housing market cooling off? Any first or second hand experience?
Inventory is still extremely low in my area. Things seemed to have peaked a month or two ago.
I haven't seen any price decreases.... or new homes come on the market.
When I sold in Nov of 2021 it was insane. $50k over list price with no contingencies. Was like a feeding frenzy.
I haven't seen any price decreases.... or new homes come on the market.
When I sold in Nov of 2021 it was insane. $50k over list price with no contingencies. Was like a feeding frenzy.
Stay the course!
Re: Is the housing market cooling off? Any first or second hand experience?
Very limited inventory where I'm trying to buy. Some price drops on the less-well-situated properties, but overall it's still hugely a seller's market.
I have started looking seriously at rentals.
I have started looking seriously at rentals.
merely an interested amateur
Re: Is the housing market cooling off? Any first or second hand experience?
My guess on the bolded part is that higher interest rates causing higher monthly payments so overly optimistic buyers stretching thin on DTI's are unable to meet loan criteria leading to houses getting back on market. It's a good thing that lenders are being conservative.N10sive wrote: ↑Wed May 25, 2022 1:21 am I’ve been looking to buy a house for the past 6 months in the outskirts of seattle.
Houses previously would stay on Zillow/Redfin for a day or two. Now they’ve been up for weeks still(queue ridiculous asking price). I’ve seen many also that were taken off Zillow be put back on for whatever reason.
Definitely seems to be slowing, prices don’t seem to be going down too much though.
The increase in interest are really stretching peoples already stretched budget in my opinion. Hoping it cools off a lot more so I can buy a house since I will not buy a house and be house poor
Taking care of tomorrow while enjoying today.
Re: Is the housing market cooling off? Any first or second hand experience?
For sure cooling off in my neck of the woods but still very much a sellers market. At this point desirable properties are still selling in days but less desirable properties can hang around for weeks and you are seeing price drops. What is interesting and maybe it is due to folks waiting until after memorial day, but the supply of houses is actually down the last two weeks by a fair margin compared to earlier. I am a buyer at some point but right now my rent is 2/3 what owning would cost (just renewed and up only 5% which is similar to last year, the first five years it was a 0% increase) so I continue to watch the market (my rent is clearly below market at this point and what I'd buy is more than what I'll rent). I am not expecting a major correction at this point but I'd like a return to some level of normalcy before I jump in. At this point owing is more a lifestyle decision than a financial one.
Much of what is currently on the market in my neck of the woods is new construction but it is priced at a premium and I am not terribly interested in buying a place at a premium that was built when supplies and labor were issues.
Edit: And I should add that I am looking at mid to high end townhomes (I am a committed solo person who likes to travel) and my other pause on entering the market is most of these townhomes were built around 2010 give or take. Some of the exact homes that sold in days were on the market multiple times between 2016 and 2020 (one that sold in less than a week this month was posted three times between 2018 and 2020 for 100k less than it sold for in 2022 and it never sold). So I am not convinced the current prices will hold. This may or may not be a permanent inflection point in the market for these but I'll watch a while longer since I am not in danger of being priced out for the moment.
Much of what is currently on the market in my neck of the woods is new construction but it is priced at a premium and I am not terribly interested in buying a place at a premium that was built when supplies and labor were issues.
Edit: And I should add that I am looking at mid to high end townhomes (I am a committed solo person who likes to travel) and my other pause on entering the market is most of these townhomes were built around 2010 give or take. Some of the exact homes that sold in days were on the market multiple times between 2016 and 2020 (one that sold in less than a week this month was posted three times between 2018 and 2020 for 100k less than it sold for in 2022 and it never sold). So I am not convinced the current prices will hold. This may or may not be a permanent inflection point in the market for these but I'll watch a while longer since I am not in danger of being priced out for the moment.
Last edited by THY4373 on Wed May 25, 2022 8:32 am, edited 1 time in total.
Re: Is the housing market cooling off? Any first or second hand experience?
Not cooling in Nashville, at least based on several sales with which we are personally familiar. In fact they appeared to be panic purchases of 20% or more above asking.
Tim
Tim
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Re: Is the housing market cooling off? Any first or second hand experience?
Minnesota is the market I am watching - clearly cooling. Many price reductions, and some houses sitting on the market unsold for weeks.
Obviously they're are many markets within the state, but the housing market is quite different from 6 months ago - dare I suggest returning to normal?
Founding Father
Obviously they're are many markets within the state, but the housing market is quite different from 6 months ago - dare I suggest returning to normal?
Founding Father
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Re: Is the housing market cooling off? Any first or second hand experience?
https://fortune.com/2022/05/20/these-re ... ices-drop/ [link fixed by admin LadyGeek]
"The U.S. macroeconomic situation has soured since April. To see if that downturn has shifted the outlook of the housing market too, Fortune once again asked CoreLogic to run an assessment of regional housing markets. The finding? Now 70 regional housing markets have a greater than 40% chance of home prices dropping over the coming 12 months." (17 markets the month before)
"When CoreLogic analyzed the housing market back in April, the company found that the average market had a 13% chance of experiencing a home price drop over the coming 12 months. Now, CoreLogic says the average regional housing market has a 28% chance of a price drop over the coming 12 months. That's a 15 percentage point spike in just a one month period."
I've found housing markets are pretty emotionally driven. As more and more reports and forecasts come out with negative outlooks, it is almost like a self fulfilling prophecy partly due to underlying data but also general fear. It's a lot of money for most people so the emotions are amplified. Sentiment is shifting in our neck of the woods(N IL/S WI).
"The U.S. macroeconomic situation has soured since April. To see if that downturn has shifted the outlook of the housing market too, Fortune once again asked CoreLogic to run an assessment of regional housing markets. The finding? Now 70 regional housing markets have a greater than 40% chance of home prices dropping over the coming 12 months." (17 markets the month before)
"When CoreLogic analyzed the housing market back in April, the company found that the average market had a 13% chance of experiencing a home price drop over the coming 12 months. Now, CoreLogic says the average regional housing market has a 28% chance of a price drop over the coming 12 months. That's a 15 percentage point spike in just a one month period."
I've found housing markets are pretty emotionally driven. As more and more reports and forecasts come out with negative outlooks, it is almost like a self fulfilling prophecy partly due to underlying data but also general fear. It's a lot of money for most people so the emotions are amplified. Sentiment is shifting in our neck of the woods(N IL/S WI).
Re: Tales from this insane real estate market
I merged lomiras285's thread into the ongoing discussion.
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Re: Is the housing market cooling off? Any first or second hand experience?
You have:runninginvestor wrote: ↑Wed May 25, 2022 8:18 am https://fortune.com/2022/05/20/these-re ... ices-drop/ [link fixed by admin LadyGeek]
"The U.S. macroeconomic situation has soured since April. To see if that downturn has shifted the outlook of the housing market too, Fortune once again asked CoreLogic to run an assessment of regional housing markets. The finding? Now 70 regional housing markets have a greater than 40% chance of home prices dropping over the coming 12 months." (17 markets the month before)
"When CoreLogic analyzed the housing market back in April, the company found that the average market had a 13% chance of experiencing a home price drop over the coming 12 months. Now, CoreLogic says the average regional housing market has a 28% chance of a price drop over the coming 12 months. That's a 15 percentage point spike in just a one month period."
I've found housing markets are pretty emotionally driven. As more and more reports and forecasts come out with negative outlooks, it is almost like a self fulfilling prophecy partly due to underlying data but also general fear. It's a lot of money for most people so the emotions are amplified. Sentiment is shifting in our neck of the woods(N IL/S WI).
- high transaction costs
- high potential for "regret" in overpaying or selling too cheap
- uncertainty as to the "correct" value for any given house at at any given moment
- leveraged finance so very sensitive to mortgage rates (especially at the first time buyer market)
- thin liquidity
- big wealth effect - it's the largest purchase most people make in their lives, and their largest single asset
All this speaks to markets which are very sensitive to "sentiment". And volatile.
So if the housing market is turning down, it will "turn on a dime" (turning upwards seems to take longer, for whatever reason).
FWIW the problems of shortages of supply in materials & labor which have constrained US housing production do not seem to have fully resolved. Although inventory levels are more towards pre Covid normal, they still are not high I don't believe (check Bill McBride at Calculated Risk, previously referenced on this thread). So this probably is not the first sign of the next big downturn, but it might be a sign of a "growth pause" and maybe 10-20% off the more "bubbly" markets.
The tech downturn* will have a much bigger impact on housing prices in the northern California area (and perhaps Seattle?). However supply has been short there for so long, that it's hard to see it making it evenly dimly "affordable" by the standards of other cities. But you could see a real pullback.
Conversely high energy prices would tend to make one more bullish about houses in Texas and Oklahoma in particular. I gather, though, that Austin housing prices went crazy over the last few years?
* downturns in the valuation of tech stocks feed directly into compensation as well as indirectly into the demand for other tech software and services.
Re: Tales from this insane real estate market
I live in a hot neighborhood in Austin. In the last year+, literally everything that came up for sale would sell for over asking (usually well over asking) the first weekend. That's if it ever made it to market. Many pocket listing sales. There are now 6 homes that have been listed for 2-3 weeks. They all leave something to be desired, but still, that has been unheard of for a while now. We want to upgrade to a bigger home in our neighborhood, so I welcome a slowdown, even if the value of my home decreases as well.
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Re: Tales from this insane real estate market
Phoenix market remains red hot. Houses sell within a few days still. There remains a high demand for housing coupled with low inventory. I have not noticed any slowing down. Seems the only houses that don't sell immediately are the few that are way over priced.
Re: Tales from this insane real estate market
There’s still a feeding frenzy in my area. Stuff still selling way over list with cash offers and quick closes.
Re: Tales from this insane real estate market
Things are still pretty hot in the Raleigh, NC area, although for the first time in months I'm seeing a steady trickle of price drops. These are mostly houses that were just priced too aggressively to begin with. Most of the good houses in good neighborhoods that I have my eye on are still going quickly above asking though.
One thing I'm noting is all of a sudden the various builders' "Interest Lists" that I've been on for months have suddenly started to flood my inbox with "available" homes (not yet finished, but construction started) at a flat listing price. I don't know if it was this crazy in other markets, but just a couple months ago almost all new construction required you to be on a "VIP List", and submit a bid just like a resale home, often at $50K or more over they're already high asking price. At least that insanity has seemed to calm down, although asking prices are still much higher than recent closed new construction (contracts that were probably signed 8-12 months ago).
One thing I'm noting is all of a sudden the various builders' "Interest Lists" that I've been on for months have suddenly started to flood my inbox with "available" homes (not yet finished, but construction started) at a flat listing price. I don't know if it was this crazy in other markets, but just a couple months ago almost all new construction required you to be on a "VIP List", and submit a bid just like a resale home, often at $50K or more over they're already high asking price. At least that insanity has seemed to calm down, although asking prices are still much higher than recent closed new construction (contracts that were probably signed 8-12 months ago).
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Re: Tales from this insane real estate market
I retire from the Military next year and my wife and I monitor the two areas we are considering to retire. They are Dallas, TX and Jacksonville, FL. I am seeing price drops and longer times on the market starting to become more normal. Similar to what everyone has been saying the last week or so.