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My personal prediction is that the higher interest rates will make companies and institutional investors withdraw from the housing market, especially office bui
by fxtentacle 3y ago
My personal prediction is that the higher interest rates will make companies and institutional investors withdraw from the housing market, especially office buildings. That would ease competition for land, thereby reducing housing prices for average citizens.
- bhawks 3y agoReducing prices requires increasing supply - but what is going to incentivize folks sitting on a 30year mortgage at 3% to sell? The Fed's low rate policy during pandemic and then the rapid rate rise has broken the housing market. There is no reason to sell and no reason to buy. That's why you see a severe transaction drop but roughly no change in prices. It'll be this way for awhile.
- sofixa 3y ago> Reducing prices requires increasing supply Or reducing demand, as GP said, from companies withdrawing from the market.
- bhawks 3y ago2/3rds of single family housing is owner occupied. Half of the remaining are owned by 'mom and pop' landlords. So being very generous, maybe 10% of the supply is really counting on price appreciation versus income. If demand withdrawals, supply will as well.