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Housing prices and Interest rates
Posted on 10/11/23 at 4:33 pm
Posted on 10/11/23 at 4:33 pm
When is this shite going down?
14
Posted on 10/11/23 at 4:36 pm to KRobinson
Aren’t we at least 5 or so years away from adequate inventory catching up with the demand?
Posted on 10/11/23 at 4:38 pm to KRobinson
You might be waiting awhile. Seems like everything spiked during Covid and we were told to wait 6 months and everything will come back down. Here we are 3 years later, and it's still 6 months out.
Posted on 10/11/23 at 4:45 pm to KRobinson
These are two different things. It may be a long time before you see interest rates back in the 3% range. If ever.
Posted on 10/11/23 at 6:25 pm to KRobinson
Unfortunately the two have a weird relationship.
They’re related but not always in a direct manner.
One thing that’s not debatable - median home affordability has been crushed, so something will give… eventually.
They’re related but not always in a direct manner.
One thing that’s not debatable - median home affordability has been crushed, so something will give… eventually.
Posted on 10/11/23 at 7:34 pm to WhiskeyThrottle
Prices are coming down as we speak.
What’s fuked about it is money ain’t what it was 3 years ago.
It will take min 2-3 years to figure out the true value of the dollar.
The next year will be a terrible time to sell IMO.
What’s fuked about it is money ain’t what it was 3 years ago.
It will take min 2-3 years to figure out the true value of the dollar.
The next year will be a terrible time to sell IMO.
This post was edited on 10/11/23 at 7:35 pm
Posted on 10/11/23 at 7:41 pm to KRobinson
Rates and housing prices are not correlated as much due to inventory shortage. We massively under built after 2008. We have a big housing shortage. People with homes are pretty much stuck because they won’t leave their homes to pay 7+% interest.
This post was edited on 10/11/23 at 7:43 pm
Posted on 10/11/23 at 7:51 pm to go ta hell ole miss
Going to vary by market. Undoubtedly, the interest rates have shrunk the buyer pools that can afford to consider a home purchase. But, the market was way too hot for way too long and there is still a shortage in most markets of supply. So, prices are unlikely to fall dramatically albeit start working lower.
Posted on 10/11/23 at 8:09 pm to go ta hell ole miss
quote:
We have a big housing shortage
While I don't dispute that entirely, I wonder how much of an effect AirBNB and VRBO are on that.
Not only have loads of former full time homes exited the market, but in quite a few cities, especially ones that have crazy high rents, have entire developments that almost seem built to be airbnbs.
We did a bachelor party in Nashville and I guarantee the place we stayed at was almost all STR (40-50 unit complex that couldn't have been more than 3 years old).
So now we have a percentage of new housing builds not even really entering the market where they were before.
Posted on 10/11/23 at 9:57 pm to KRobinson
Before Covid the lowest mortgage rates were 3.6%. The mortgage rates today are about the same as when I bought my first house in 2010. The low rates during Covid are the exception, not the rule.
Now housing prices won’t recede until inventory rises.
Now housing prices won’t recede until inventory rises.
Posted on 10/11/23 at 10:29 pm to Hamma1122
Does equity go up on during this time?
Posted on 10/11/23 at 10:51 pm to Suntiger
quote:
Before Covid the lowest mortgage rates were 3.6%. The mortgage rates today are about the same as when I bought my first house in 2010. The low rates during Covid are the exception, not the rule.
Rates today are 50% higher than they were at their peak in 2010.
Posted on 10/12/23 at 7:31 am to KRobinson
Don’t hold your breath, it probably won’t happen. Go ahead and buy what you can afford now and hope that you can refinance in a couple of years if rates come down.
Posted on 10/12/23 at 8:20 am to slackster
quote:
One thing that’s not debatable - median home affordability has been crushed, so something will give… eventually.
yes, something will give, no doubt.
prices are already in process of coming down due to softening demand. the inventory is going to increase as houses sit longer on the market; putting further downward pressure on prices.
Posted on 10/12/23 at 8:22 am to questionable
quote:
Go ahead and buy what you can afford now and hope that you can refinance in a couple of years if rates come down.
a lot of people have this thought and probably are stretching their budget with that hope.
they are going to be SOL when rates don't meaningfully come down and they're underwater on their mortgage. general population isn't prepared for interest rates to stay high for years to come.
Posted on 10/12/23 at 8:55 am to JohnnyKilroy
quote:
While I don't dispute that entirely, I wonder how much of an effect AirBNB and VRBO are on that.
The old saying about the 3 most important things in real estate comes to mind, but we also have to take economy into account (both macro and micro). If we really are heading into a Recession (regardless of how it's defined) by Q4/23-Q1/24, a lot of those owners will likely lose their asses (unless they swap over to making those home full-time rentals).
The current pic going around of the AirBNB spaces in Los Angeles is a good example. As more businesses and consumers flee California due to crime and rising costs, tourism will eventually take a hit (state tourism numbers can be very "iffy" so I really have to question that their 2023 numbers are up but that's a different topic). As that dries up, owners will have to make a decision on whether to make it into a long-term rental (whether Section 8 or not), risk staying with the AirBNB/VRBO model, sell the home or just walk away from it (if they bought late in the game at a price so over-valued that no one will/can touch it with interest rates as high as they are).
The longer the Recession continues, the less demand for AirBNB/VRBO places, the more pressure owners will be under to change.
For some place like Pensacola Beach, I can see those sorts of rentals having a better chance. For some place like Baton Rouge, Shreveport, Monroe, etc... even the relatively few available now will likely change to something else within the next year or two.
Posted on 10/12/23 at 9:26 am to Paul Allen
quote:
Aren’t we at least 5 or so years away from adequate inventory catching up with the demand?
That's optimistic. I believe I read we were millions of homes behind a decade ago and it was widening.
I think the problem is builders don't want to build because future interest rates, costs, and sales are so unpredictable. They also don't want to build low to middle tier houses because they get more bang for their buck from the massive high end ones (just like auto manufacturers and 80k SUVs).
Posted on 10/12/23 at 10:53 am to KRobinson
Builders can undercut resale in many areas now. sellers will be forced to come down on pricing.
This post was edited on 10/12/23 at 10:54 am
Posted on 10/12/23 at 10:53 am to Thundercles
The real issue will be everyone sitting in their homes with a 3% interest rate, and not willing to leave it unless absolutely necessary. Builders won't be able to keep up with demand when rates drop to 6% or so, 6% is enough to get people off the sidelines, but not enough to get the people out of their houses at 3%.
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