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Started By
Message
Everyone has been WishCasting the housing market for almost 4 years now...
Posted on 7/29/24 at 9:05 am
Posted on 7/29/24 at 9:05 am
(I'm NOT a real estate agent)
And while inventory has increased...and sellers are reducing prices (marginally) the frequent talking points of either waiting until interest rates or prices drop significantly have not materialized. In fact average home prices have only increased.
Meanwhile renters who have waited are in no better position than they were before.
Buyers need to understand now is the time they have the most leverage to negotiate concessions of all sorts from price reductions, to interest rate buy downs, closing cost assistance etc
And the latest wishcast of the boomer bubble popping isn't going to happen either...they are going to leave their property to their children and granchildren...they aren't going to panic sell and crash the market.
And while inventory has increased...and sellers are reducing prices (marginally) the frequent talking points of either waiting until interest rates or prices drop significantly have not materialized. In fact average home prices have only increased.
Meanwhile renters who have waited are in no better position than they were before.
Buyers need to understand now is the time they have the most leverage to negotiate concessions of all sorts from price reductions, to interest rate buy downs, closing cost assistance etc
And the latest wishcast of the boomer bubble popping isn't going to happen either...they are going to leave their property to their children and granchildren...they aren't going to panic sell and crash the market.
This post was edited on 7/29/24 at 9:11 am
27
Posted on 7/29/24 at 9:06 am to sidewalkside
Yep. A lot of people don’t realize that boomers voted for this so that millenials will never be able to own houses
Posted on 7/29/24 at 9:07 am to sidewalkside
quote:
In fact average home prices have only increased.
this was always going to be the case
the rate of increase has decreased, but prices are still increasing
Posted on 7/29/24 at 9:09 am to sidewalkside
quote:
And while inventory has increased...and sellers are reducing prices (marginally) the frequent talking points of either waiting until interest rates or prices drop significantly have not materialized. In fact average home prices have only increased.
Meanwhile renters who have waited are in no better position than they were before.
Buyers need to understand now is the time they have the most leverage to negotiate concessions of all sorts from price reductions, to interest rate buy downs, closing cost assistance etc
100% agreed on the time to make concessions.
My hope for the majority of folks is they have 10 plus years in solid equity and have not drawn against the equity.
Posted on 7/29/24 at 9:10 am to sidewalkside
More like 10yrs +
Posted on 7/29/24 at 9:12 am to sidewalkside
quote:I am a realtor, I’ve been getting that sort of thing in contracts for a long time, that ability has always been there, just most realtors are either too lazy or too scared of losing a deal to do it.
Buyers need to understand now is the time they have the most leverage to negotiate concessions of all sorts from price reductions, to interest rate buy downs, closing cost assistance etc
Right now if you’re listing the target isn’t the buyers, it’s the realtors. Offer an agent bonus, and they’ll beat down your door with all the clients they have sitting on the fence.
Last one I did that way I had 4 over list offers in 4 hours after opening showings.
Posted on 7/29/24 at 9:14 am to sidewalkside
Who wants to buy a home at 7% interest?
Especially one over $400k? That's $28k / year in interest alone.
A quick mortgage calculation with 20% down says $2600/mo for 30 years.
Yikes.
Same calculation with just dropping percentage from 7% to 2.5% based on recent historical rates, monthly mortgage is $1700/mo.
Sellers can keep those prices high and hold onto the homes, but until rates return to what they were, the home isn't worth at 7% what it was at 2.5%.
Especially one over $400k? That's $28k / year in interest alone.
A quick mortgage calculation with 20% down says $2600/mo for 30 years.
Yikes.
Same calculation with just dropping percentage from 7% to 2.5% based on recent historical rates, monthly mortgage is $1700/mo.
Sellers can keep those prices high and hold onto the homes, but until rates return to what they were, the home isn't worth at 7% what it was at 2.5%.
Posted on 7/29/24 at 9:18 am to Mahootney
quote:
dropping percentage from 7% to 2.5% based on recent historical rates,
This will not happen again in our lifetimes. Look at the headache super low interest rates has brought the overall economy.
But keep waiting for that and enjoy being a renter and have zero equity build up.
Posted on 7/29/24 at 9:22 am to Mahootney
Rates will drop or prices will drop eventually. I imagine rates will stay around 5-6 percent here soon but that's just an educated guess. If the rates just stay in this range, the prices of houses will drop. It's just not sustainable.
Posted on 7/29/24 at 9:22 am to sidewalkside
I am so happy I decided to refi during the covid reset. I will be riding this loan out for awhile.
Posted on 7/29/24 at 9:23 am to Mahootney
Checking in with a 7.35% rate on a $300k home here. I waited 10 years out of school to buy a home because I moved frequently for work. Wife and both have 6-figure jobs and credit scores right around 800.
It’s one big joke IMO. The solution we’ve decided on is to just aggressively pay the house off within the next ~5 years, lord willing.
It’s one big joke IMO. The solution we’ve decided on is to just aggressively pay the house off within the next ~5 years, lord willing.
Posted on 7/29/24 at 9:23 am to Mahootney
quote:
Same calculation with just dropping percentage from 7% to 2.5% based on recent historical rates, monthly mortgage is $1700/mo.
Sellers can keep those prices high and hold onto the homes, but until rates return to what they were, the home isn't worth at 7% what it was at 2.5%.
While all of that is true, we were just blessed in the last 20 years to have abnormally low interest rates.
First tow houses we built in 1992 and 2001 were financed at 6.75-7% interest.
Bought a business in 2003 and the rate was 6.5%
Built the house I am selling currently and my rate is 2.5%. ( moved in in 2021)
That luck of low rates won't be seen again anytime soon.
This post was edited on 7/29/24 at 8:20 pm
Posted on 7/29/24 at 9:24 am to sidewalkside
quote:
WishCasting
What about Dreamcasting?
Posted on 7/29/24 at 9:25 am to sidewalkside
Prices will increase as long as people are willing to pay it.
Women want that shiny new house and they will get it
Women want that shiny new house and they will get it
Posted on 7/29/24 at 9:27 am to SouthPlains
quote:pretty sure my mortgage rate in 1998 was 6 1/2%… At the time I didn't think anything of it… I just figured that rates would drop at some point and I would refinance.
Checking in with a 7.35% rate on a $300k home here. I waited 10 years out of school to buy a home because I moved frequently for work. Wife and both have 6-figure jobs and credit scores right around 800.
One of the keys for any first time buyer is just making sure you have enough saved for the down payment.
That takes discipline for years in advance
Posted on 7/29/24 at 9:28 am to el Gaucho
quote:
Yep. A lot of people don’t realize that boomers voted for this
What is this you speak of that boomers voted for?
Posted on 7/29/24 at 9:29 am to Chicken
quote:
pretty sure my mortgage rate in 1998 was 6 1/2%… At the time I didn't think anything of it… I just figured that rates would drop at some point and I would refinance
Our first house was 6.5-6.75% or something like that in 2005. When the 2008 meltdown happened we refinanced somewhere in the 4's IIRC.
Posted on 7/29/24 at 9:30 am to el Gaucho
quote:
Yep. A lot of people don’t realize that boomers voted for this so that millenials will never be able to own houses
Boomers will start dying off soon. There will be a surplus of houses and large RV's.
Posted on 7/29/24 at 9:33 am to Chicken
quote:
pretty sure my mortgage rate in 1998 was 6 1/2%… At the time I didn't think anything of it…
None of us did because that was considered a good rate. The problem is 2020-22 made everything think rates should be in the 2-4% range, and it has never been there ever before then.
My first house was just over 7%, and I managed to finance down to 6.25% 2 years later.
5-7% is not a bad rate, it's just not what we saw 3 years ago. 30 years ago, rates were around 10% and higher.
Posted on 7/29/24 at 9:33 am to sidewalkside
Which real estate agent do you work for?
While your post isn't wrong, most buyers still cant swing the monthly note due to the interest rate. My facebook is full of realtors trying to convince people that now is a perfect time to buy. While you can probably get the house for a lot less than asking, the note is still a lot more than what people are paying for their current mortgage/rent, and if the house is in a flood zone, forget about it.
I make over 6 figs, and have a modest house, about $250k. Been looking at homes in the $350 to $500k range, but won't pull the trigger because it will more than double my note due to the interest rate being 3-4% higher. There's just no good reason to purchase a new home. I could likely swing it, but the increase in the cost of food, and everything else would kick me in the balls.
While your post isn't wrong, most buyers still cant swing the monthly note due to the interest rate. My facebook is full of realtors trying to convince people that now is a perfect time to buy. While you can probably get the house for a lot less than asking, the note is still a lot more than what people are paying for their current mortgage/rent, and if the house is in a flood zone, forget about it.
I make over 6 figs, and have a modest house, about $250k. Been looking at homes in the $350 to $500k range, but won't pull the trigger because it will more than double my note due to the interest rate being 3-4% higher. There's just no good reason to purchase a new home. I could likely swing it, but the increase in the cost of food, and everything else would kick me in the balls.
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