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anon_0k9zlfz6lz9oy
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who? link? I'd be curious to see if it's data based of throwing shit against the wall based. Most people make calls without data to back it up and then take a victory lap if they're right
I know nothing about this guy but have seen similar articles:
Housing market should brace for mortgage rates hitting 10% in 2023, investment banker says
Even if Federal Reserve Chair Jerome Powell stops hiking policy rates soon, the 30-year fixed rate mortgage still would climb to 10%, says Christopher...
www.marketwatch.com
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anon_0k9zlfz6lz9oy
Guest
interesting. We're already in unprecedented territory so I guess nothing is off the table at this point.I know nothing about this guy but have seen similar articles:
Housing market should brace for mortgage rates hitting 10% in 2023, investment banker says
Even if Federal Reserve Chair Jerome Powell stops hiking policy rates soon, the 30-year fixed rate mortgage still would climb to 10%, says Christopher...
A big reason for mortgage spreads being way above what they historically are is the market baking in a fed pivot in late 2023 as lenders need to have the loan paid for 6-8 months to simply breakeven. On average when the fed pauses 8.7 months later they begin cutting and they cut far more than the market believes they will. Pensford put out a great article on this. https://www.pensford.com/industry-n...bIw&utm_content=229000324&utm_source=hs_email
Americans like to live above their means yet they must not be doing it unsustainably. I've been hearing this for 30 years and yet it keeps going and never hits a ceiling. A lot of people must be doing better than they say. And we are now at a point where older generations have a lot of money to leave for inheritance, so each year many people come into significant amounts of money from that.
+1
Think about how dumb the Fed is. They are using housing data from BEFORE they started raising rates and are now concerned that CPI isn't going down. LOL!
Housing is 40% of Core CPI. If real time data was used for housing, Core CPI would be negative right now. I guess math is hard for the Fed.
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anon_0k9zlfz6lz9oy
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anon_0k9zlfz6lz9oy
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Considering the 150 year geometric mean of equities is 4.64% (5.54% post 1950) why arent more people plowing into treasuries and munis right now?
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anon_0k9zlfz6lz9oy
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What data/historicals do you base this off? Or is it throwing shit against the wall? Not saying this to be confrontational moreso wondering if you have reasons/precedent or its just a guess
You completely whiffed on one of the most important factors in evaluating "why we aren't in a bubble" and then said nobody could have seen this coming. That's total BS. A lot of people could see this coming, that's why they were saying we were in a bubble.
Did you ever think that maybe the correction in housing prices is also lagging? Because that is what appears to be happening. First the number of transactions drop and if new buyers don't step in then the prices will drop.
Prices needs to adjust to these higher rates which substantially increases peoples monthly payments.
with so much pent up demand on the sideline, how does the RE market not go off like a powder keg again once rates eventually go down? Won’t speculation go through the roof again leading to another round of rate hikes?
If there is one thing that’s clear = a lot of people don’t care what they pay for a house anymore. Although I’ve seen a bunch of price reductions, two houses just went on the market for $1M in my neighborhood last week and already under contract. Another house sold for $1.2M a month ago. Prior to that, most expensive house that EVER sold in my neighborhood was $925K and that includes the post-COVID madness. My neighborhood is nice but no way these houses should still be selling at those prices. But, again, if people want a house they are willing to move money around, take on a bigger mortgage, borrow from family, etc. - show little to no restraint.
Agree with this. We bought up here in Maine in June, knowing we were buying near a high, because we did very well on what we sold in PA.
I noticed that prices have been very slow to drop up here based on what the rate hikes have been, even though the time on the market has increased dramatically.
People don’t want to concede that they aren’t going to get the prices they were hearing about for the last several years.
I am. Most people think or wish that it’ll be a V shape recovery and think the 5% tax free is peanuts.
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anon_0k9zlfz6lz9oy
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False. People were saying we are in a bubble at 5% rates haha, we are still not in a bubble. If/when prices go negative because rates hit 7-8% that is not a bubble bursting. Again, rates hit about 5.25% late july/early august and sales data was .1% off august 2021. What does that tell you?
Im data driven, youve never posted any data your time here. Not being a dick just calling balls and strikes
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anon_0k9zlfz6lz9oy
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anon_0k9zlfz6lz9oy
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Bingo. Look at my most recent facebook posts for the charts associated with the copy and pasted below.
Pregnancy tests and the real estate market? Yup, we’re doing it.
This is going to sound weird but I think it’s worthwhile data that tells a story of where the real estate market is right now.
As many of you who follow my posts are probably aware, I constantly harp on why demographics and the breakdown of population by age is a very important factor for predicting the housing market. Lets go through a quick few facts then I’ll post the intriguing part
- we have more 29-34 year olds right now than at any time in US history
- 29-34 is historically peak household formation age
- The average first time homebuyer this year according to NAR was 33 years old
- On average couples have their first child 3.5 years after marriage
- The average age of a male getting married is just about 30 years old, 28 years old for females
As you’ll see in the charts below, in 2008 not only did we have a huge wave of inventory hit the market paired with a big demand hit but we also had one the smallest demographic patches of 29-34 year olds in many decades which further suppressed demand. The crazy part? Right now, in 2022, the data is showing that despite having significantly more people at peak household formation age, we are already below 2008 mortgage purchase application data. How much lower can demand go? I don’t exactly know, I don’t have a crystal ball but what I’m about to show you next indicates we are close to bottoming out and hitting the trough on demand.
We discussed above how we have the most 29-34 year olds ever in the US and how on average people have their first kid 3.5 years after marriage which would be around 33.5 years old for males and 31.5 years old for females, we’ll meet in the middle and say 32.5 years old. The three ages in 2022 that have the most people? #1 is 32, #2 is 31 and #3 is 30.
Here is where the pregnancy stats come in. The country is going through a mini baby boom right now. Pregnancy test purchases are skyrocketing, birth rates are beginning to climb and as a result households will be formed.
Allllll of these people ages 29-34 are waiting on the sidelines to buy a house, they just dont like where interest rates are right now. We have the data that shows where theyre comfortable though. When rates hit the low 5’s in July/August new home sales were up 18.3% month over month and just .1% off of the year prior (August-2021) sales rate.
5%-5.5% 30-year fixed rate conventional mortgages are the magic number. At those rates ARM’s and jumbos will start with a 4 handle. Until then we will largely see a stalemate in the market and a very low inventory environment. There will be less sales. Realtors will sell less homes and unless you gain market share, you’ll make less money than you did the year prior. Until rates drop back down to 5-5.5%, work on your craft but when the rates fall, the market is likely to become the wild west again. Shelter is shelter. People dont buy homes because it’s a good time, they buy homes when life happens. You have kids and you raise a family in a home, not on the street.
Never thought I’d come across pregnancy test data and be intrigued by it but hope you found this insightful haha
LOL. You spit out a lot of data but have no idea what you are talking about.
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anon_0k9zlfz6lz9oy
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Inventory is still near all time lows and we have an all-time high age cohort at peak household formation age. If we had the 29-34 demo that we did back in 2008 with Gen X the market would be way different.
#crumbs
Sounds like you are selling all your equities. Good luck with that. LOL! 2020 should have been a lesson for you when only one variable is impacting the market.
Inventories are ticking up, houses are sitting longer, price reductions are happening. Now, I’m not saying the bubble popped or anything but one way or another the Fed will take care of the real estate market and make all of us investors miserable in the process = because if prices don’t come down they will just keep increasing rates.
Even though some people are claiming prices are dropping, $5-10k, doesn't count when the prices went up 150-200k the last couple of years. People are reluctant lower the price significantly and will take sellers 4-8 months to adjust to the environment.
Yeah, same nonsense when so many people tried to rationalize jumbo mortgages just because rates were low. I had buddies that were in the 3-4% range acting as if they weren’t paying any interest on a $750K loan. Never even bothered to look at the amortization schedule only cared about the monthly payment.
I think I even said in this thread rates 7-8% by year end. I have been saying it to all my realtors in my office since May.
The market has been a buyers market since May. My advice to people is don't be afraid to buy, but if your realtor is telling you to pay over asking (unless the house just came on the market and is priced low on purpose) fire them.
You'll be fine. It's honestly better to buy now than in 2021 when rates were 3%. People were paying forward prices for homes (like paying a price the home would be worth in 2026) because rates were so low. That was stupid.
You can buy now, under asking, less competition and then WHEN rates get cut (because they will) you can refinance or just sell to some person who thinks they should pay a stupid amount of money for a property because the mortgage is cheap.
Dude you are the only one who was steadfast and said housing prices would not outright decline. You should go back tot he B Ball forum. A blind old dog saw this coming and its just the tip of the iceberg.
Take a look at this article....
The housing market is in free fall with 'no floor in sight,' and prices could crash 20% in the next year, analyst says
"Eight straight declines in sales and no floor in sight," Pantheon chief economist Ian Shepherdson wrote in a note on Thursday.
www.yahoo.com
But how much have prices actually come down? From 6-12 months ago.
I'm hearing not a lot, if at all in desirable neighborhoods and towns
Right that’s what I am hearing and seeing too. Seems like the starter family is hurt here . Unless they get a nice cash infusion .
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I never committed to any hard takes in this thread but that was for a reason. It’s clear as day that we’ve been in unprecedented times since 2020, anyone who didn’t realize or acknowledge that and tried to base a hard prediction on how this would play out using historical data or simply supply/demand of housing was silly.
I stated this on page 1 of the thread (6/10) and feel pretty good looking back. You know way more about real estate than me but everything isn’t always black/white or as simple as you try arguing…
“Minimally we will shift to a buyers market. Prices are going to cool and probably come down a bit at some point and houses will start to sit on the market longer
As far a a bubble is concerned, I don’t think it happens with real estate but also think it’s too early to be certain.
The economy has been so out of whack the past couple of years (supply, demand, interest rates, inflation) that I don’t think anyone can say for sure how and when the dust will settle related to anything.”
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anon_0k9zlfz6lz9oy
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- Inventory is actually ticking down, peaked about a week ago and were still at about 60% of 2019 inventory which at the time was a 4 decade low
- average days on market is still only 17 days, now that is up from the prior 14 days but still wildly low
- price reductions are happening on 42% of homes nationwide, above the 33% historic average
most unique market of all time. No where was it ever close to a bubble tho imo, the fundamental backdrop is just the strongest its ever been due to balance sheets, locked in rates and demographics
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anon_0k9zlfz6lz9oy
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anon_0k9zlfz6lz9oy
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Lol, again, i didnt see rates hitting 7.5% because there was zero historical precedent for rates moving this high this fast. Again, when rates dropped to even 5.5% in July/August month over month sales were up 18.3% and just .1% off the frenzy pace of august-2021.Dude you are the only one who was steadfast and said housing prices would not outright decline. You should go back tot he B Ball forum. A blind old dog saw this coming and its just the tip of the iceberg.
Take a look at this article....
The housing market is in free fall with 'no floor in sight,' and prices could crash 20% in the next year, analyst says
"Eight straight declines in sales and no floor in sight," Pantheon chief economist Ian Shepherdson wrote in a note on Thursday.
once again, the only thing that can slow this market and cause nominal price declines is a historic rise in rates. The historic rise and rates happened. As of Sept yoy prices still up 8%+ but thats looking like we’ll hit 0% yoy price growth around the early half of 2023. Keep in mind my original call here was 0-3% price growth between june 2022-june 2023. That was under the assumption we had rates in the 5.5% range. My original call wont be that far off even despite rates going to 7.5% which is actually crazy to show that I actually underestimated the strength of the market
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anon_0k9zlfz6lz9oy
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It isnt a bubble and wont be a bubble. We sit at 3.2 months supply nationwide. Which is flat month over month. Total inventory actually down month over month. And yes, supply and demand reign supreme. It’s the #1 stat you can look at. Disregard the arrow thats from July
essex county burbs sitting at 1.22 months supply. Luxury home market is the one that has been least effected as well
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