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I just got an update from my realtor that, compared to 2021, houses are now getting 5-10 offers instead of 10-20. Every open house I go to is packed and has an

by vbtemp 4y ago

I just got an update from my realtor that, compared to 2021, houses are now getting 5-10 offers instead of 10-20. Every open house I go to is packed and has an offer deadline at noon the day after (they aren't bluffing - it goes straight to under contract the next day). It's impossible to have any contingencies - even home inspection. Most are going for $50-$100K over asking. This is even with 7% interest rates, the stock market down 20% and tens of thousands of layoffs in my relatively tech (and Amazon) heavy area. The rental market is so tight - there's basically nothing on the market and the few dilapidated homes that go for rent are between $5-7k/mo. And this is late-March 2023.

sciencesama 4y ago
Hmm, wait for a couple of months and see how the value of the homes fall !!
- afavour 4y ago
  I'm not saying it won't happen but people have been saying exactly this for a decade.
  - cloverich 4y ago
    That doesnt make sense... interest rates have been low for a decade. Why would falling prices be predicted?
    - afavour 4y ago
      I just mean in a very general sense "just wait until the housing market collapses!" is a very common refrain, absent any evidence to prompt it.
    - tomrod 4y ago
      Supply remains constrained, now with people not wanting to take on higher interest rates. Move rates are roughly 9-10% a year. I bet we see that a lot lower for this quarter and next few quarters.
      - vbtemp 4y ago
        I think this is generally correct. This is the situation in my area: Prices can never fall, because if the situation was such that prices would fall, no one sells. So there's basically little to nothing available, so buyers are stuck competing no matter the macroeconomic situation.
        lazide 4y ago
        Even in ‘08 this was the case. That’s why short sales, foreclosures, ‘mailing the keys in’, etc. were a thing. With housing, it’s NEVER a thing that someone just sells at a loss just because. They sell at a loss because they don’t have a choice, and the bigger the loss, usually because the less choice they have. If labor market is still doing well, then there is little pressure. Usually that happens a bit later anyway - construction workers out of work because housing isn’t being built, or folks employed by tech workers get laid off because tech isn’t so sure about those bonuses, etc. We’ll see though - maybe the fed will pull off a soft landing this time.
    - cool_dude85 4y ago
      There's a general sense that housing is not affordable for the middle class who does not already own a home. You predict falling prices with the thought that it's not sustainable and some changes in public policy will occur, as we will not allow for middle class people to be unable to afford a home.
      - dragonwriter 4y ago
        It is sustainable, though, if you don’t assume homeownership rates have to be constant-or-rising.
- jorblumesea 4y ago
  > 2017 home prices are unsustainable! > 2019 it has to crash sometime > 2022 ok now is the time for home prices to call > 2027 it must crash! The reality is that home prices are buoyed by a number of systemic factors that cause supply to be constrained. Prices will go down in total value due to interest rate rises. Homes will not be more affordable.
  - harambae 4y ago
    > Prices will go down in total value due to interest rate rises. As somebody with the cash, I'd settle for even seeing this much. So far it's been high interest rates with the same high prices (in much if the Northeast).
- tomrod 4y ago
  Pressure is on supply, demand relatively strong as ever. Supply: low and expensive new builds, heavy rate lockin. Demand: muted due to higher rates, but sometimes people gotta move. So a slight haircut, but in many areas most likely less haircut than supply constraint. We are seeing some sifting in the market but I personally believe sales volume is driven by supply lockin, meaning its still a seller's market.
- vbtemp 4y ago
  The funny thing is, people were saying that in 2021... and then... interest rates doubled/tripled crippling affordability, people's net worth plummeted due to decrease in stock prices, and more people got laid off... And everything keeps on trucking straight through it. I visited my realtor when she was showing a house for sale, and it was astounding the traffic and people coming up whispering to her how they wanted to make an offer that moment. And then on top of that the offers that came in with escalation clauses, waiving of all contingencies, etc. And this is March 2023.
  - nradov 4y ago
    In hot markets with thin inventory there are still enough affluent buyers who can afford to pay cash using gains from other investments or family wealth. Prices are set at the margins so it only takes a few such buyers in each neighborhood to keep market prices high. Ultimately people need somewhere to live, and if they have to be in a particular area due to work or family obligations then they'll pay whatever it costs regardless of the underlying value.
    - vbtemp 4y ago
      Solving for the equilibrium though, if the prices fall, more buyers will be available to compete, so it ends up right where it was before.
      - lazide 4y ago
        With interest rates rising, the volume of buyers is dropping. In high demand areas, the folks who got lucky with a windfall or whatever, can still buy. But the normal buyers will get more and more priced out, and the affluent area will end up with less and less volume as sellers start waiting it out because the volume of available buyers gets thinner and selling gets riskier.
  - VirusNewbie 4y ago
    I’m in a suburb of LA and while prices are still up quite a bit from mid 2020, houses in my immediate neighborhood are selling for hundreds of thousands less than they did at peak.
- dilyevsky 4y ago
  People will not sell at a loss bc they locked in to 2% mortgages for 30 years so no
  - andrewmutz 4y ago
    The same phenomenon happened in 2008. I think it boils down to the question of whether or not sellers are motivated at scale. In 08, the poor labor market meant that many people had to sell. That caused prices to drop. We aren't at that point yet this time, and I don't think anyone knows whether or not we are headed for a seriously rocky job market.
    - dilyevsky 4y ago
      Yeah but a lot of those 08 mortgages had much higher rates and even variable rates in the subprime division. Labor market is holding strong rn so even if it happens it’s gonna take much longer than a few months
    - HDThoreaun 4y ago
      They were giving mortgages to people they knew couldn't afford them in 08. I have not seen any evidence of that here.
      - dilyevsky 4y ago
        I think the implication here is if you lose your job and can’t find it for a while you suddenly can’t afford your mortgage either
        purpleblue 4y ago
        The job market is still historically EXTREMELY strong. We would need unemployment to hit over 5-6% before mortgages became an issue.
      - yardie 4y ago
        If you mean dentists, lawyers, and doctors. Yeah, they were giving too many prime borrowers with great credit scores way more debt than they could sufficiently manage.
- pascalxus 4y ago
  We hear this ALLLLL the time. I've heard it for nearly half a decade as I waited and waited and waited forever to buy a house, and yet through all of the disasters, house prices just kept going up and up and up. The assumption is, since almost no one can afford a house, prices MUST fall. Here's the thing no one gets: the "almost" part is very important. If, in a city of 100,000 people, only the richest 100 can afford (less than 1% of the population) a house but there's only 10 houses on the market, then prices can still continue to skyrocket. Overall demand does not need to be super high for prices to go up. It's Demand relative to supply that matters. And in markets where supply is really really tiny then demand doesn't need to be very high in order to outstrip supply.
  - whitemary 4y ago
    How dare you think critically about economics!
  - rch 4y ago
    Banks push this to the limit by making it comparatively expensive for individual buyers to build, preferring to offer loans for already overpriced homes. Edit: At least this has been my experience. Have people found otherwise themselves?
  - lazide 4y ago
    It is VERY typical for volume to drop, while prices peak in high demand areas before volume drops to zero.
  - tenacious_tuna 4y ago
    I've felt kind of similarly. My wife and I are young--graduated college in 2018--and I feel like I've been a bit lied to about what constitutes "good financial decisions" over the past couple years. We've been squirreling away cash to have an emergency fund, long enough to support us being out of work for 6months, paying down her student loans, trying to wait on buying a car, etc--but our friends have been buying houses, cars, etc etc, and it seems like that's been the more prudent decision time and time again. We delayed buying a house to have a bit more in savings? House prices skyrocket, our friends who leveraged the crap out of themselves look genius. We wait to buy a car to have a bit more in savings / wait for the used market to come down? The used market goes up, our friends who bought new cars look like geniuses. There's part of me that keeps waiting for a correction, esp. in the housing market, both so that houses come back into our budget range, but also maybe because there's part of me that feels vindictive about the fact that everyone who, to my sensibilities, seems to be acting recklessly are making out better than we are. Some of that is reasonable, I suspect: we're very financially conservative relative to our peer group, which means we're going to miss out on some opportunities, and I don't want to be "proven right" in saving for a rainy day by everyone else having economic hardship, but I do feel rather confused about how we're "supposed" to behave in this market. We're also remarkably well off, as is our peer group, which will obviously skew the data radically, but it also scares the crap out of me: if these are the thoughts we're having with a household income just barely under $200k this young, what is everyone else thinking?
- waynesonfire 4y ago
  what are they going to wait for? the rate of increase to decline 5 percent?
hcurtiss 4y ago
Anectdotal, but the same is happening in the mid-Willamette Valley, Oregon. We've recently seen houses listed and sell next day for over asking. How those prices line up to historic averages, I can't say, but after a maybe 5 month cooling period, I can say things have definitely picked up in our neighborhood. We have two close realtor friends and they confirm the same.
jeffbee 4y ago
In the 90s it was typical for a house to be on the market for 3-6 months before selling. Sellers generally received 1 offer. Currently the nationwide days-on-market is still way below long-term historical norms and even below recent history. https://fred.stlouisfed.org/series/MEDDAYONMARUS https://fred.stlouisfed.org/series/MEDDAYONMARUS
- jldugger 4y ago
  > In the 90s it was typical for a house to be on the market for 3-6 months before selling. Sellers generally received 1 offer. I wonder if there's been a material shift in who is making offers that won't revert to 90s behavior. Specifically, investment firms specializing in single family housing, who might have more incentives to make a lot of lowball offers and not worry too much whether they win or lose a specific bid. Obviously you have imitators like Zillow trying to edge in as well, and step back after taking heavy losses, so its hard to say for sure where the new equilibrim will end up at.
  - zer00eyz 4y ago
    > Specifically, investment firms specializing in single family housing I dont think I have seen good data that includes or calls out "investors" rather than "investment firms" I suspect that a lot of property ends up in the hands of individuals be it a vacation home, rental, air BB or flip.
  - VirusNewbie 4y ago
    I worry about exactly this. For every house an investment company buys, how many did they bid on which drove the price up?
    - gizmo686 4y ago
      Prices are set on the margin. Loosing bids have relatively little effect.
      - jldugger 4y ago
deleted 4y ago
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onlyrealcuzzo 4y ago
What market? Anecdotally, I follow many smaller markets in the Midwest and the South (plus Chicago). I wouldn't call it a buyer's market anywhere. But I'm not seeing anything like this. I also have a few friends shopping on the East coast - and they're in a similar situation. It's not a buyer's market. But also not crazy. My understanding was that The Bay, SoCal, and Seattle had massively slowed down. So I'm just wondering where this could be - or if things have recently turned around a lot. Maybe my info is just bad...
- itake 4y ago
  I heard a similar story about Bellevue and Sammamish, WA. North Seattle-area (Edmonds, Lynnwood, Mill Creek, etc) have seen a price decline.
- vbtemp 4y ago
  Many of the Northern VA counties and certain others in the DC metro area.
  - tssva 4y ago
    Things cooled somewhat in the fall but have definitely rebounded. On Friday the 10th I placed my townhouse in Loudoun on the market. Choose from 17 offers on Sunday evening. Accepted an all-cash offer with a quick closing for well above asking. Moving on Saturday.
- sharkmerry 4y ago
  entirely anecdota but a house me in the peninsula bay area, got bought for 1million (3/2) 8 months ago. got reno'ed- listed for 1.698 a month ago- went for 1.755
  - deleted 4y ago
    [deleted]
- purpleblue 4y ago
  San Francisco condos are down a lot, many going for less than $1000/sqft now. But that's also the political climate and the increase in crime that is contributing to all that. I might come in when condo prices fall to about $600/sqft.
subsubzero 4y ago
I assume you are in the Seattle metro area?
- vbtemp 4y ago
  No, which goes to say the price-escalations and white-hot housing markets are still a thing across North America, straight through the tech crash, bond crash, layoffs, and now banking crisis.
- coolbreezetft22 4y ago
  I follow the market for Seattle East side pretty closely and prices have definitely dropped compared to a year ago. A ton of houses that were listed with ridiculous early 2022 prices have been re-listed multiple times to lower prices, in many cases dropping the price by well over 6 figures. One example a house in my neighborhood initially listed for 1.8m ended up selling for 1.45m
TheMagicHorsey 4y ago
I left the Bay Area in 2020 and started working remotely because I didn't want to enter the real estate market at the top, right before a crash. I've never believed in doing something just because everyone else thinks its the default thing to do. Putting 1.5M to 2M into a small average house didn't make sense to me when that is enough money to retire in many different beautiful places in the world. So I left. Switched jobs and started working remotely. I now live in a MCOL area and things are about 30% cheaper than the Bay Area. Better schools. Nicer environment. More diversity (including economic diversity). More access to activities (like gymnastics) for my kids at a reasonable price. More free time. I make a little less money in cash. And a lot less money in equity. But all in all its a better life. I hope more people open their eyes and realize these tech hotspots are actually hell.
- rajup 4y ago
  > I hope more people open their eyes and realize these tech hotspots are actually hell. Wouldn’t that make the other currently nice places hell again :^)
  - lazide 4y ago
    You bet!
  - ianceicys 4y ago
    It's a good thing that there SO many MORE nice places... See Montana\Idaho plenty of room, plenty of broadband (even FIBER).
- zeroonetwothree 4y ago
  I think that critiques of the Bay Area are overstated (probably because of cognitive dissonance). Yes, it's extremely expensive, but it's also very nice. If you can afford it I don't think there's any inherent reason to expect to like anywhere else more. Of course if you can't afford it then, yes, you should probably leave, but that's not some crazy revelation.
  - 4y ago
pc86 4y ago
What is the average selling price? Median for my county is ~$325k and our experience matched yours exactly up through and including the $800s. You really had to be looking at stuff 3-3.5x the median price to have a reasonable experience where you could do an inspection or expect them to replace the 19 year old furnace (or at least credit most of a new unit).
Mizoguchi 4y ago
I have noticed the same trend where I live and among my close group of acquaintances and friends. Some couples are buying houses way north of 600K even while still having a mortgage on a perfectly nice home a few blocks away. My wife and I look at each other completely puzzled. Like what is going on? Are people making this much money? Or are they getting into terrible deals due to FOMO? We could certainly afford a new home now but no way in hell we are jumping on this market, our money goes to buy discounted stock or sits on CDs.
- tonymet 4y ago
  With savings & investments so volatile people are taking riskier bets in order to diversify
  - lazide 4y ago
    Also FOMO. Stress makes people have a harder time filtering and looking at the long term.
- bufferoverflow 4y ago
  It could be an inflation hedge. You buy a house at a fixed rate, you pay your $5K/mo mortgage for 30 years. Meanwhile inflation makes this $5K less and less in real value. But you can rent it out for more and more.
  - pascalxus 4y ago
    in other words, shorting the dollar. it's the same reason you buy just about any asset that's not bonds or cash AKA real assets. People know, it's only a matter of time before the feds default on the value of the dollar.
    - bufferoverflow 4y ago
      No, they just slowly devalue it. Though not so slowly in the last couple of years. Default is different, it's an inability to pay debts. They have no problem printing more dollars and paying debts.
tonymet 4y ago
There are obviously huge distortions in the housing market. - how many buyers are investors from private equity or foreign investors vs residents (who intend to live in the property)? - What is the true population including undocumented people? this will be off by 30-50% in some areas - What is the true vacancy rate? In my area there are many houses sitting vacant. I’m assuming they are investments or tax dodges It baffles me at how critical the housing market is and that no one takes responsibility to understand what is affecting prices. We just accept prices as a force of nature.
xirdstl 4y ago
That must be specific to your market. That's not what I'm seeing in the Denver area, speaking as someone who has been casually looking for a house for over a year. As soon as interest rates started rising, conditions went from what you describe, to, in a lot of cases, houses sitting weeks or months on the market. They go through, sometimes, multiple prices drops before going under contract. I'm speaking specifically of homes that are in the range of those I'm considering purchasing, so maybe it doesn't apply to the overall market. For me, though, it is now much more of a buyer's market than it was a year ago.
- vbtemp 4y ago
  I observed that happening for about a 6-8 week period in Oct-Nov-Dec 2022, then the party returned like it was 2021 all over again.
  - xirdstl 4y ago
    That's good to know. I'm hoping those conditions don't come back here for awhile. Getting into spring, I could see more people start looking again, with some pent-up demand not met from last year.
  - rednerrus 4y ago
    January 15th the slowdown was over in my market and now it's back to red hot.
- subsubzero 4y ago
  I'm near you in Boulder area and I am seeing the same thing, huge drop in interest on houses in the market, last year places would get under contract within a week, now its houses sitting on the market for weeks and even months. I talked to our realtor(we are planning on moving again for a work related job) and she said average days on the market has doubled from last year in the Boulder metro area.
  - abakker 4y ago
    I'm in Boulder, too, and you can't ignore the "housing stock" problem here. There are a lot of crap houses in boulder that really need to be demolished. A late 90s house on my street sold in 1 day over asking, while an '87 house with a mid aughts renovation has been sitting fort 6 months. They were priced very differently relative to quality. I think what's happening here is not that the market has cooled overall, but is reflecting the vast annoyance that is boulder's building department, mixed with bad housing stock.
hartator 4y ago
> I just got an update from my realtor that, compared to 2021, houses are now getting 5-10 offers instead of 10-20. Well, Realtors are incentivized to portray the market hotter than it actually is.
- rednerrus 4y ago
  I've been to the open houses and I've been watching Redfin and seen the houses come open on Thursday and pending on Monday.
  - hartator 4y ago
    Which areas? Austin this is not the case anymore and I thought this was one of the “hotter” areas in the US.
    - rednerrus 4y ago
      Pacific Northwest
- vbtemp 4y ago
  They are portraying the market exactly as it is. Reality is speaking for itself, not the realtors.
  - hartator 4y ago
    OP was talking about realtors. Realtors commission is based on final price, why not portraying the market hotter?
    - AnimalMuppet 4y ago
      Because if you make the seller think the market is hotter than it is, then they price the house too high, and the house doesn't sell. That results in $0 commission. I could see them telling buyers that the market is hotter than it is. But even that might backfire, if they make qualified buyers think that they can't afford to buy in the current market.
stephenitis 4y ago
What state, region, market are you in?
agloe_dreams 4y ago
I would say, even further, here in the rust belt there is a whole other problem: Inventory is gone. Not low. Gone. In the 45 mile radius we are looking in for an area with a pop of ~100,000, at houses under $350k (90% of listings)...there are weeks with ZERO listings. This has lead to an insane situation where offers end up way over asking but there are so few comps that virtually all FHA is back out, not because of issues with the offer but because the appraisal issue: no house actually apprises near the price it goes for. If you take a look at Zillow, most houses that sold last in 2019 after a renovation, with zero changes since, are listing at $330k. This has crunched the rental market as one would expect. Rental prices, in absolutely a low cost of living area have multiplied overnight from ~$700 to $1500+. I know most in this area are absolutely not paid like us so I'm pretty sure the area is about to hit a wall. One might expect a market to limit itself as homes that cost too much wont sell..but the other side of it is that I think we are getting to a flexible point of 'well everyone needs a home', I mean...is this a housing bubble coming? When that bubble pops, what happens to all the people with $350K loans on houses that are back down $200K?
- gautamdivgi 4y ago
  I think that’s the downside of raising interest rates. Obviously I’m no economist, but if rates are high and I’ve already got a home I will not move. If people don’t move inventory is low and needs to be built. High interest rates probably put a crimp on new buildout. Just my thoughts.
  - deleted 4y ago
    [deleted]
  - sangnoir 4y ago
    Homeowners sometimes die, get divorced or have to move to a different area. Number of sales will go down, but not to zero. The prices of those sold due to exigencies will drop because of inflation.
lazide 4y ago
That’s because it’s worse, but not really bad yet.
bdcravens 4y ago
I bought into a new community northwest of Houston, closed last summer. It's about 75% built out, and the new houses are sitting available for some time.
62951413 4y ago
All of that to buy something like a 2 bed, 1 bath SFH of 735 sqft built 76 years ago for $1M (https://www.realtor.com/realestateandhomes-detail/1761-Geary-Rd_Walnut-Creek_CA_94597_M29309-94430 https://www.realtor.com/realestateandhomes-detail/1761-Geary...).
Fatnino 4y ago
Theres a house on my street in palo alto thats been sitting on the market for some 3-4 months. Previous owner died, someone bought it and cleaned it up to flip it. It actually looks very nice. No one is buying it though.
debacle 4y ago
Higher interest rates lower demand, but they also lower supply. In our area, age on the market is increasing and I think the average for some areas is over 60 days, which is an indicator for a buyers' market.
AviationAtom 4y ago
Inventory is still below demand in most places. People are just freaking out because the mania has subsided. I'd call this current market about normal.
alpineidyll3 4y ago
A) Tune out anything realtors tell you if you want to be an intelligent consumer. B) Volume has collapsed because people in homes with low rate morts can't move. These prices are "less solid" because liquidity is poor. In Austin prices are def. down ~ 8%, after this hike and sustained layoffs I am betting it will shed another 8 by the end of summer...

by vbtemp 4y ago

sciencesama 4y ago

Hmm, wait for a couple of months and see how the value of the homes fall !!

afavour 4y ago
I'm not saying it won't happen but people have been saying exactly this for a decade.
- cloverich 4y ago
  That doesnt make sense... interest rates have been low for a decade. Why would falling prices be predicted?
  - afavour 4y ago
    I just mean in a very general sense "just wait until the housing market collapses!" is a very common refrain, absent any evidence to prompt it.
  - tomrod 4y ago
    Supply remains constrained, now with people not wanting to take on higher interest rates. Move rates are roughly 9-10% a year. I bet we see that a lot lower for this quarter and next few quarters.
    - vbtemp 4y ago
      I think this is generally correct. This is the situation in my area: Prices can never fall, because if the situation was such that prices would fall, no one sells. So there's basically little to nothing available, so buyers are stuck competing no matter the macroeconomic situation.
      - lazide 4y ago
        Even in ‘08 this was the case. That’s why short sales, foreclosures, ‘mailing the keys in’, etc. were a thing. With housing, it’s NEVER a thing that someone just sells at a loss just because. They sell at a loss because they don’t have a choice, and the bigger the loss, usually because the less choice they have. If labor market is still doing well, then there is little pressure. Usually that happens a bit later anyway - construction workers out of work because housing isn’t being built, or folks employed by tech workers get laid off because tech isn’t so sure about those bonuses, etc. We’ll see though - maybe the fed will pull off a soft landing this time.
  - cool_dude85 4y ago
    There's a general sense that housing is not affordable for the middle class who does not already own a home. You predict falling prices with the thought that it's not sustainable and some changes in public policy will occur, as we will not allow for middle class people to be unable to afford a home.
    - dragonwriter 4y ago
      It is sustainable, though, if you don’t assume homeownership rates have to be constant-or-rising.
jorblumesea 4y ago
> 2017 home prices are unsustainable! > 2019 it has to crash sometime > 2022 ok now is the time for home prices to call > 2027 it must crash! The reality is that home prices are buoyed by a number of systemic factors that cause supply to be constrained. Prices will go down in total value due to interest rate rises. Homes will not be more affordable.
- harambae 4y ago
  > Prices will go down in total value due to interest rate rises. As somebody with the cash, I'd settle for even seeing this much. So far it's been high interest rates with the same high prices (in much if the Northeast).
tomrod 4y ago
Pressure is on supply, demand relatively strong as ever. Supply: low and expensive new builds, heavy rate lockin. Demand: muted due to higher rates, but sometimes people gotta move. So a slight haircut, but in many areas most likely less haircut than supply constraint. We are seeing some sifting in the market but I personally believe sales volume is driven by supply lockin, meaning its still a seller's market.
vbtemp 4y ago
The funny thing is, people were saying that in 2021... and then... interest rates doubled/tripled crippling affordability, people's net worth plummeted due to decrease in stock prices, and more people got laid off... And everything keeps on trucking straight through it. I visited my realtor when she was showing a house for sale, and it was astounding the traffic and people coming up whispering to her how they wanted to make an offer that moment. And then on top of that the offers that came in with escalation clauses, waiving of all contingencies, etc. And this is March 2023.
- nradov 4y ago
  In hot markets with thin inventory there are still enough affluent buyers who can afford to pay cash using gains from other investments or family wealth. Prices are set at the margins so it only takes a few such buyers in each neighborhood to keep market prices high. Ultimately people need somewhere to live, and if they have to be in a particular area due to work or family obligations then they'll pay whatever it costs regardless of the underlying value.
  - vbtemp 4y ago
    Solving for the equilibrium though, if the prices fall, more buyers will be available to compete, so it ends up right where it was before.
    - lazide 4y ago
      With interest rates rising, the volume of buyers is dropping. In high demand areas, the folks who got lucky with a windfall or whatever, can still buy. But the normal buyers will get more and more priced out, and the affluent area will end up with less and less volume as sellers start waiting it out because the volume of available buyers gets thinner and selling gets riskier.
- VirusNewbie 4y ago
  I’m in a suburb of LA and while prices are still up quite a bit from mid 2020, houses in my immediate neighborhood are selling for hundreds of thousands less than they did at peak.
dilyevsky 4y ago
People will not sell at a loss bc they locked in to 2% mortgages for 30 years so no
- andrewmutz 4y ago
  The same phenomenon happened in 2008. I think it boils down to the question of whether or not sellers are motivated at scale. In 08, the poor labor market meant that many people had to sell. That caused prices to drop. We aren't at that point yet this time, and I don't think anyone knows whether or not we are headed for a seriously rocky job market.
  - dilyevsky 4y ago
    Yeah but a lot of those 08 mortgages had much higher rates and even variable rates in the subprime division. Labor market is holding strong rn so even if it happens it’s gonna take much longer than a few months
  - HDThoreaun 4y ago
    They were giving mortgages to people they knew couldn't afford them in 08. I have not seen any evidence of that here.
    - dilyevsky 4y ago
      I think the implication here is if you lose your job and can’t find it for a while you suddenly can’t afford your mortgage either
      - purpleblue 4y ago
        The job market is still historically EXTREMELY strong. We would need unemployment to hit over 5-6% before mortgages became an issue.
    - yardie 4y ago
      If you mean dentists, lawyers, and doctors. Yeah, they were giving too many prime borrowers with great credit scores way more debt than they could sufficiently manage.
pascalxus 4y ago
We hear this ALLLLL the time. I've heard it for nearly half a decade as I waited and waited and waited forever to buy a house, and yet through all of the disasters, house prices just kept going up and up and up. The assumption is, since almost no one can afford a house, prices MUST fall. Here's the thing no one gets: the "almost" part is very important. If, in a city of 100,000 people, only the richest 100 can afford (less than 1% of the population) a house but there's only 10 houses on the market, then prices can still continue to skyrocket. Overall demand does not need to be super high for prices to go up. It's Demand relative to supply that matters. And in markets where supply is really really tiny then demand doesn't need to be very high in order to outstrip supply.
- whitemary 4y ago
  How dare you think critically about economics!
- rch 4y ago
  Banks push this to the limit by making it comparatively expensive for individual buyers to build, preferring to offer loans for already overpriced homes. Edit: At least this has been my experience. Have people found otherwise themselves?
- lazide 4y ago
  It is VERY typical for volume to drop, while prices peak in high demand areas before volume drops to zero.
- tenacious_tuna 4y ago
  I've felt kind of similarly. My wife and I are young--graduated college in 2018--and I feel like I've been a bit lied to about what constitutes "good financial decisions" over the past couple years. We've been squirreling away cash to have an emergency fund, long enough to support us being out of work for 6months, paying down her student loans, trying to wait on buying a car, etc--but our friends have been buying houses, cars, etc etc, and it seems like that's been the more prudent decision time and time again. We delayed buying a house to have a bit more in savings? House prices skyrocket, our friends who leveraged the crap out of themselves look genius. We wait to buy a car to have a bit more in savings / wait for the used market to come down? The used market goes up, our friends who bought new cars look like geniuses. There's part of me that keeps waiting for a correction, esp. in the housing market, both so that houses come back into our budget range, but also maybe because there's part of me that feels vindictive about the fact that everyone who, to my sensibilities, seems to be acting recklessly are making out better than we are. Some of that is reasonable, I suspect: we're very financially conservative relative to our peer group, which means we're going to miss out on some opportunities, and I don't want to be "proven right" in saving for a rainy day by everyone else having economic hardship, but I do feel rather confused about how we're "supposed" to behave in this market. We're also remarkably well off, as is our peer group, which will obviously skew the data radically, but it also scares the crap out of me: if these are the thoughts we're having with a household income just barely under $200k this young, what is everyone else thinking?
waynesonfire 4y ago
what are they going to wait for? the rate of increase to decline 5 percent?

hcurtiss 4y ago

Anectdotal, but the same is happening in the mid-Willamette Valley, Oregon. We've recently seen houses listed and sell next day for over asking. How those prices line up to historic averages, I can't say, but after a maybe 5 month cooling period, I can say things have definitely picked up in our neighborhood. We have two close realtor friends and they confirm the same.

jeffbee 4y ago

In the 90s it was typical for a house to be on the market for 3-6 months before selling. Sellers generally received 1 offer. Currently the nationwide days-on-market is still way below long-term historical norms and even below recent history. https://fred.stlouisfed.org/series/MEDDAYONMARUS https://fred.stlouisfed.org/series/MEDDAYONMARUS

jldugger 4y ago
> In the 90s it was typical for a house to be on the market for 3-6 months before selling. Sellers generally received 1 offer. I wonder if there's been a material shift in who is making offers that won't revert to 90s behavior. Specifically, investment firms specializing in single family housing, who might have more incentives to make a lot of lowball offers and not worry too much whether they win or lose a specific bid. Obviously you have imitators like Zillow trying to edge in as well, and step back after taking heavy losses, so its hard to say for sure where the new equilibrim will end up at.
- zer00eyz 4y ago
  > Specifically, investment firms specializing in single family housing I dont think I have seen good data that includes or calls out "investors" rather than "investment firms" I suspect that a lot of property ends up in the hands of individuals be it a vacation home, rental, air BB or flip.
- VirusNewbie 4y ago
  I worry about exactly this. For every house an investment company buys, how many did they bid on which drove the price up?
  - gizmo686 4y ago
    Prices are set on the margin. Loosing bids have relatively little effect.
    - jldugger 4y ago

deleted 4y ago

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onlyrealcuzzo 4y ago

What market? Anecdotally, I follow many smaller markets in the Midwest and the South (plus Chicago). I wouldn't call it a buyer's market anywhere. But I'm not seeing anything like this. I also have a few friends shopping on the East coast - and they're in a similar situation. It's not a buyer's market. But also not crazy. My understanding was that The Bay, SoCal, and Seattle had massively slowed down. So I'm just wondering where this could be - or if things have recently turned around a lot. Maybe my info is just bad...

itake 4y ago
I heard a similar story about Bellevue and Sammamish, WA. North Seattle-area (Edmonds, Lynnwood, Mill Creek, etc) have seen a price decline.
vbtemp 4y ago
Many of the Northern VA counties and certain others in the DC metro area.
- tssva 4y ago
  Things cooled somewhat in the fall but have definitely rebounded. On Friday the 10th I placed my townhouse in Loudoun on the market. Choose from 17 offers on Sunday evening. Accepted an all-cash offer with a quick closing for well above asking. Moving on Saturday.
sharkmerry 4y ago
entirely anecdota but a house me in the peninsula bay area, got bought for 1million (3/2) 8 months ago. got reno'ed- listed for 1.698 a month ago- went for 1.755
- deleted 4y ago
  [deleted]
purpleblue 4y ago
San Francisco condos are down a lot, many going for less than $1000/sqft now. But that's also the political climate and the increase in crime that is contributing to all that. I might come in when condo prices fall to about $600/sqft.

subsubzero 4y ago

I assume you are in the Seattle metro area?

vbtemp 4y ago
No, which goes to say the price-escalations and white-hot housing markets are still a thing across North America, straight through the tech crash, bond crash, layoffs, and now banking crisis.
coolbreezetft22 4y ago
I follow the market for Seattle East side pretty closely and prices have definitely dropped compared to a year ago. A ton of houses that were listed with ridiculous early 2022 prices have been re-listed multiple times to lower prices, in many cases dropping the price by well over 6 figures. One example a house in my neighborhood initially listed for 1.8m ended up selling for 1.45m

TheMagicHorsey 4y ago

I left the Bay Area in 2020 and started working remotely because I didn't want to enter the real estate market at the top, right before a crash. I've never believed in doing something just because everyone else thinks its the default thing to do. Putting 1.5M to 2M into a small average house didn't make sense to me when that is enough money to retire in many different beautiful places in the world. So I left. Switched jobs and started working remotely. I now live in a MCOL area and things are about 30% cheaper than the Bay Area. Better schools. Nicer environment. More diversity (including economic diversity). More access to activities (like gymnastics) for my kids at a reasonable price. More free time. I make a little less money in cash. And a lot less money in equity. But all in all its a better life. I hope more people open their eyes and realize these tech hotspots are actually hell.

rajup 4y ago
> I hope more people open their eyes and realize these tech hotspots are actually hell. Wouldn’t that make the other currently nice places hell again :^)
- lazide 4y ago
  You bet!
- ianceicys 4y ago
  It's a good thing that there SO many MORE nice places... See Montana\Idaho plenty of room, plenty of broadband (even FIBER).
zeroonetwothree 4y ago
I think that critiques of the Bay Area are overstated (probably because of cognitive dissonance). Yes, it's extremely expensive, but it's also very nice. If you can afford it I don't think there's any inherent reason to expect to like anywhere else more. Of course if you can't afford it then, yes, you should probably leave, but that's not some crazy revelation.
- 4y ago

pc86 4y ago

What is the average selling price? Median for my county is ~$325k and our experience matched yours exactly up through and including the $800s. You really had to be looking at stuff 3-3.5x the median price to have a reasonable experience where you could do an inspection or expect them to replace the 19 year old furnace (or at least credit most of a new unit).

Mizoguchi 4y ago

I have noticed the same trend where I live and among my close group of acquaintances and friends. Some couples are buying houses way north of 600K even while still having a mortgage on a perfectly nice home a few blocks away. My wife and I look at each other completely puzzled. Like what is going on? Are people making this much money? Or are they getting into terrible deals due to FOMO? We could certainly afford a new home now but no way in hell we are jumping on this market, our money goes to buy discounted stock or sits on CDs.

tonymet 4y ago
With savings & investments so volatile people are taking riskier bets in order to diversify
- lazide 4y ago
  Also FOMO. Stress makes people have a harder time filtering and looking at the long term.
bufferoverflow 4y ago
It could be an inflation hedge. You buy a house at a fixed rate, you pay your $5K/mo mortgage for 30 years. Meanwhile inflation makes this $5K less and less in real value. But you can rent it out for more and more.
- pascalxus 4y ago
  in other words, shorting the dollar. it's the same reason you buy just about any asset that's not bonds or cash AKA real assets. People know, it's only a matter of time before the feds default on the value of the dollar.
  - bufferoverflow 4y ago
    No, they just slowly devalue it. Though not so slowly in the last couple of years. Default is different, it's an inability to pay debts. They have no problem printing more dollars and paying debts.

tonymet 4y ago

There are obviously huge distortions in the housing market. - how many buyers are investors from private equity or foreign investors vs residents (who intend to live in the property)? - What is the true population including undocumented people? this will be off by 30-50% in some areas - What is the true vacancy rate? In my area there are many houses sitting vacant. I’m assuming they are investments or tax dodges It baffles me at how critical the housing market is and that no one takes responsibility to understand what is affecting prices. We just accept prices as a force of nature.

xirdstl 4y ago

That must be specific to your market. That's not what I'm seeing in the Denver area, speaking as someone who has been casually looking for a house for over a year. As soon as interest rates started rising, conditions went from what you describe, to, in a lot of cases, houses sitting weeks or months on the market. They go through, sometimes, multiple prices drops before going under contract. I'm speaking specifically of homes that are in the range of those I'm considering purchasing, so maybe it doesn't apply to the overall market. For me, though, it is now much more of a buyer's market than it was a year ago.

vbtemp 4y ago
I observed that happening for about a 6-8 week period in Oct-Nov-Dec 2022, then the party returned like it was 2021 all over again.
- xirdstl 4y ago
  That's good to know. I'm hoping those conditions don't come back here for awhile. Getting into spring, I could see more people start looking again, with some pent-up demand not met from last year.
- rednerrus 4y ago
  January 15th the slowdown was over in my market and now it's back to red hot.
subsubzero 4y ago
I'm near you in Boulder area and I am seeing the same thing, huge drop in interest on houses in the market, last year places would get under contract within a week, now its houses sitting on the market for weeks and even months. I talked to our realtor(we are planning on moving again for a work related job) and she said average days on the market has doubled from last year in the Boulder metro area.
- abakker 4y ago
  I'm in Boulder, too, and you can't ignore the "housing stock" problem here. There are a lot of crap houses in boulder that really need to be demolished. A late 90s house on my street sold in 1 day over asking, while an '87 house with a mid aughts renovation has been sitting fort 6 months. They were priced very differently relative to quality. I think what's happening here is not that the market has cooled overall, but is reflecting the vast annoyance that is boulder's building department, mixed with bad housing stock.

hartator 4y ago

> I just got an update from my realtor that, compared to 2021, houses are now getting 5-10 offers instead of 10-20. Well, Realtors are incentivized to portray the market hotter than it actually is.

rednerrus 4y ago
I've been to the open houses and I've been watching Redfin and seen the houses come open on Thursday and pending on Monday.
- hartator 4y ago
  Which areas? Austin this is not the case anymore and I thought this was one of the “hotter” areas in the US.
  - rednerrus 4y ago
    Pacific Northwest
vbtemp 4y ago
They are portraying the market exactly as it is. Reality is speaking for itself, not the realtors.
- hartator 4y ago
  OP was talking about realtors. Realtors commission is based on final price, why not portraying the market hotter?
  - AnimalMuppet 4y ago
    Because if you make the seller think the market is hotter than it is, then they price the house too high, and the house doesn't sell. That results in $0 commission. I could see them telling buyers that the market is hotter than it is. But even that might backfire, if they make qualified buyers think that they can't afford to buy in the current market.

stephenitis 4y ago

What state, region, market are you in?

agloe_dreams 4y ago

I would say, even further, here in the rust belt there is a whole other problem: Inventory is gone. Not low. Gone. In the 45 mile radius we are looking in for an area with a pop of ~100,000, at houses under $350k (90% of listings)...there are weeks with ZERO listings. This has lead to an insane situation where offers end up way over asking but there are so few comps that virtually all FHA is back out, not because of issues with the offer but because the appraisal issue: no house actually apprises near the price it goes for. If you take a look at Zillow, most houses that sold last in 2019 after a renovation, with zero changes since, are listing at $330k. This has crunched the rental market as one would expect. Rental prices, in absolutely a low cost of living area have multiplied overnight from ~$700 to $1500+. I know most in this area are absolutely not paid like us so I'm pretty sure the area is about to hit a wall. One might expect a market to limit itself as homes that cost too much wont sell..but the other side of it is that I think we are getting to a flexible point of 'well everyone needs a home', I mean...is this a housing bubble coming? When that bubble pops, what happens to all the people with $350K loans on houses that are back down $200K?

gautamdivgi 4y ago
I think that’s the downside of raising interest rates. Obviously I’m no economist, but if rates are high and I’ve already got a home I will not move. If people don’t move inventory is low and needs to be built. High interest rates probably put a crimp on new buildout. Just my thoughts.
- deleted 4y ago
  [deleted]
- sangnoir 4y ago
  Homeowners sometimes die, get divorced or have to move to a different area. Number of sales will go down, but not to zero. The prices of those sold due to exigencies will drop because of inflation.

lazide 4y ago

That’s because it’s worse, but not really bad yet.

bdcravens 4y ago

I bought into a new community northwest of Houston, closed last summer. It's about 75% built out, and the new houses are sitting available for some time.

62951413 4y ago

All of that to buy something like a 2 bed, 1 bath SFH of 735 sqft built 76 years ago for $1M (https://www.realtor.com/realestateandhomes-detail/1761-Geary-Rd_Walnut-Creek_CA_94597_M29309-94430 https://www.realtor.com/realestateandhomes-detail/1761-Geary...).

Fatnino 4y ago

Theres a house on my street in palo alto thats been sitting on the market for some 3-4 months. Previous owner died, someone bought it and cleaned it up to flip it. It actually looks very nice. No one is buying it though.

debacle 4y ago

Higher interest rates lower demand, but they also lower supply. In our area, age on the market is increasing and I think the average for some areas is over 60 days, which is an indicator for a buyers' market.

AviationAtom 4y ago

Inventory is still below demand in most places. People are just freaking out because the mania has subsided. I'd call this current market about normal.

alpineidyll3 4y ago

A) Tune out anything realtors tell you if you want to be an intelligent consumer. B) Volume has collapsed because people in homes with low rate morts can't move. These prices are "less solid" because liquidity is poor. In Austin prices are def. down ~ 8%, after this hike and sustained layoffs I am betting it will shed another 8 by the end of summer...