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Signs of a cooling housing market
Posted on 5/19/22 at 4:53 am
Posted on 5/19/22 at 4:53 am
I’ve been seeing several articles out lately talking about the housing market slowing down. This would make sense with the increased costs of housing and rising interests rates. Will defaults on loans be next inline? With the costs of everything increasing how many homeowners will be able to afford their notes. How many will soon find themselves “underwater” if their house is no longer worth what they paid for it.
LINK to the Hedge
quote:
Data out on Wednesday showed April housing starts fell slightly, marking the third straight month of lower new construction activity. Similarly, building permits were also lower for the month, reflecting waning demand that we'd attribute primarily to rising mortgage costs. Mortgage applications fell 12% last week, as 30-year mortgage rates hover near 5.5%.
quote:
Needless to say, a housing crash would be a bad thing for the US economy for which the housing sector is of paramount importance: a house is usually the biggest asset in American’s savings, comprises a large chunk of the labor force, and is a large contributor to inflation indices. That's precisely why the Fed, hell bent on tipping the US economy into a recession as fast as possible to reverse inflation, would want nothing more than a housing recession.
LINK to the Hedge
Posted on 5/19/22 at 5:01 am to sawtooth
Anecdotal, it def is. Been slowly looking over the past three months, but haven’t jumped due to pricing/rate increases.
Over the last 2-3 weeks it’s noticeable how many fewer listings are popping and how much longer they are staying on the market.
My agent and I have spoken about it. Used to be 3-5 new daily with an avg of 1-2 days active before going under option and now it’s 1-2 daily and tons active over 7 days. This is inner-loop Houston.
I’m slow playing and hoping for the crash at this point.
Over the last 2-3 weeks it’s noticeable how many fewer listings are popping and how much longer they are staying on the market.
My agent and I have spoken about it. Used to be 3-5 new daily with an avg of 1-2 days active before going under option and now it’s 1-2 daily and tons active over 7 days. This is inner-loop Houston.
I’m slow playing and hoping for the crash at this point.
Posted on 5/19/22 at 6:49 am to Lsut81
quote:
I’m slow playing and hoping for the crash at this point.
ronricks is comin for ya
Posted on 5/19/22 at 6:50 am to Lsut81
quote:
Over the last 2-3 weeks it’s noticeable how many fewer listings are popping and how much longer they are staying on the market.
Around here it’s impossible to miss.
Two months ago places were getting 8 offers, all significantly above ask, most cash within 72 hours.
A month ago it switched to places moving at a pre Covid pace.
Now anything around seems to have paused, with a lot of places sitting without any offers at all, and many deals falling through due to financing issues.
This was one of the hottest markets in the country last year by ROR.
If you can’t see what’s coming it’s because you have your head in the sand.
This post was edited on 5/19/22 at 9:35 am
Posted on 5/19/22 at 7:38 am to tide06
There are 2 houses in my neighborhood that are basically "twins" of each other, right next to each other. One sold about a year ago for right under $200k. The other waited a few months and started its listing at $189k. I think the last I saw, it's $159k. I'm curious how far he lets that thing slide down. He's already moved into a new house so I don't think he has options other than renting it out (and it may not be legal for him to do that).
Posted on 5/19/22 at 8:56 am to sawtooth
quote:
With the costs of everything increasing how many homeowners will be able to afford their notes
This isn't like 2008. More people have more equity in their homes and fewer have adjustable mortgages, as they locked in the historically low rates.
Posted on 5/19/22 at 9:17 am to sawtooth
There could be signs of slowing, but I also think we could get a dead cat bounce over the next couple of months with kids out of school and the late spring/early summer be a driver of buyer interest/FOMO before fall school start.
I also think this administration is about to revitalize that $15k down payment free money at closing thing they've been slow walking sometime in the late summer/early fall to entice votes for midterms.
I also think this administration is about to revitalize that $15k down payment free money at closing thing they've been slow walking sometime in the late summer/early fall to entice votes for midterms.
Posted on 5/19/22 at 9:21 am to Tomatocantender
quote:
There could be signs of slowing, but I also think we could get a dead cat bounce over the next couple of months with kids out of school and the late spring/early summer be a driver of buyer interest/FOMO before fall school start.
Historically the spring is the busy season for buying/selling real estate. Of course many factors play into that and with the current abnormal housing market, this year could be different.
Posted on 5/19/22 at 9:26 am to bod312
quote:
Historically the spring is the busy season for buying/selling real estate.
Yes I know, and spring doesn't end till June 21st.
Posted on 5/19/22 at 9:28 am to sawtooth
Opendoor is always spamming me with offers for my house. The offer this week is down around 5% from two weeks ago.
Posted on 5/19/22 at 11:22 am to sawtooth
quote:
and is a large contributor to inflation indices
Is that correct? I thought housing cost were excluded from inflation index.
Posted on 5/19/22 at 11:42 am to Chucktown_Badger
quote:Uhh huh. ARM's as a % are on par with '08 at just over 10%. There is nothing new under the sun. Housing is going to get raped, the hotter the market during the run up, the worse the overcorrection will be.
This isn't like 2008. More people have more equity in their homes and fewer have adjustable mortgages, as they locked in the historically low rates.
Posted on 5/19/22 at 11:44 am to Lsut81
quote:
I’m slow playing and hoping for the crash at this point.
I am as well. Been casually looking for a while now, and there just isn't anything around worth trying to go for. A correction would be very nice for me.
Posted on 5/19/22 at 12:09 pm to sawtooth
Lower housing starts is going to make the market worse. We need more inventory to lower prices.
Posted on 5/19/22 at 1:56 pm to ronricks
quote:Inventories have increased roughly 4.0% each week for three consecutive weeks. FRED data is current only to March '22 but shows inventories increasing from 5.6 months in February to 6.4 months in March. Both of these metrics will continue to terminal velocity. Last, there has never been a price movement that comes close to as accelerated as this run-up that has not been accompanied by an overcorrection that exceeds mean reversion.
Lower housing starts is going to make the market worse. We need more inventory to lower prices.
Posted on 5/19/22 at 2:02 pm to sawtooth
quote:
Data out on Wednesday showed April housing starts fell slightly, marking the third straight month of lower new construction activity. Similarly, building permits were also lower for the month, reflecting waning demand that we'd attribute primarily to rising mortgage costs.
Lower inventory means prices will remain high or continue to climb. There is no crash coming.
Posted on 5/19/22 at 2:14 pm to seawolf06
quote:
marking the third straight month of lower new construction activity. Similarly, building permits were also lower for the month, reflecting waning demand that we'd attribute primarily to rising mortgage costs.
quote:
Lower inventory means prices will remain high or continue to climb.
quote:
Dutch Peasant in 1636: People are ordering fewer tulips. Are there issues with the tulip economy?
Dutch Trader in 1636: No, of course not. This just makes the tulips we already bought even more rare and, accordingly, valuable.
Posted on 5/19/22 at 2:20 pm to SlowFlowPro
(no message)
This post was edited on 8/26/22 at 2:42 pm
Posted on 5/19/22 at 2:25 pm to SlowFlowPro
Yep---the ppl that bought Tuipls recently at these ridiculous prices are in denial--but the crash is coming.
The current market is just/Was? unsustainable--we need a reset.
and just cause "it's not like 2008" doesn't mean a crash cant happen. There wasn't 2008 until 2008 happened.
This will be the "2024" crash we reference when the next crash happens in the 2050s or so. "Oh this is nothing like 2024".
The current market is just/Was? unsustainable--we need a reset.
and just cause "it's not like 2008" doesn't mean a crash cant happen. There wasn't 2008 until 2008 happened.
This will be the "2024" crash we reference when the next crash happens in the 2050s or so. "Oh this is nothing like 2024".
Posted on 5/19/22 at 2:26 pm to seawolf06
quote:Inventory isn't decreasing, it's increasing.
Lower inventory means prices will remain high or continue to climb. There is no crash coming.
This is 12/1/21-3/1/22
For reference this is 1/1/2005-1/1/2010 (Housing starts seized-up in mid-2007 between when Bear Sterns failed and when Lehman Brothers failed and inventories continued to rise. Add in the increase in mortgage rates you have a lot less buyers and increasing inventories.)
This post was edited on 5/19/22 at 2:30 pm
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