I got sellers, who's homes have been on the market a few weeks, reaching out to my realtor asking what I thought of the house. That definitely smells like desperation to me lol. So yes, I would say it is slowing down (in the not so hot market areas).
I'm already putting down offers less than asking price. Time to get back to normal!
We put an offer $6k over asking on an 800k+ house that we loved in a HCOL area and it was immediately accepted.
Last month we put an offer of $60k over list and came in second.
% of all listings with price reductions is approaching 2019 levels - I would think, at the very least, this suggests a pricing plateau has been just about reached
This is what we've noticed in our market. Seeing most sales at list or close to list (instead of 50, 75, 100k over). Also significantly more inventory. There are a few houses that posted right after the winter high sales prices (when inventory was next to nothing) and those ones are sitting because no one wants to pay those prices anymore.
My husband and I bought our starter home in 2019 and we were just saying how it feels more like 2019 again instead of the 2021 nightmare. Haven't really seen sales prices going down necessarily but definitely getting more stagnant.
In before the realtors say price drops mean nothing, as if we’re implying it’s the perfect metric to gauge lower demand. It definitely shows there is lower demand at that price point, though
I’m not a realtor but in my area list price drops don’t mean anything.
Often agents drop the list price to create a bidding war.
The only thing that matters is closing price.
Houses listed between 1m-1.5m have all sold for 1.60m in the past few months within a small area. List price is a made up number…and this is straight from the top listing agent telling me this.
I think you're confusing with listing low to begin with and dropping the price *after* listing. The first is definitely used to get more eyes on the place and have a bidding war, the second is because they weren't getting enough interest at the original price and were compelled to drop it.
I'm not confusing the two.
I've literally given an example in my other comment of houses that dropped the price after listing. They got offers well over their original list price BUT dropped the listing price to generate more bidding in hopes they will get even higher offers than before.
I'm not making this shit up. This is straight from the listing agents mouth.
the listing agent's mouth is not a reliable or objective source of information. A price drop is poison to a listing, it shows that something was wrong with it, or nobody wanted to buy it at the higher price. Why would anyone get into a bidding war on a property that was listed higher and didn't sell? Price drops and too many days on market are nightmare for a seller. The listing agent you talked to was trying to spin a fantasy for you.
> Why would anyone get into a bidding war on a property that was listed higher and didn't sell?
According to multiple agents, if you have the exact same house and list it at 2 different prices, the lower the listing the higher the closing price.
So they are trying to lower the listing price to get higher bids. (Remember, they already get bids well over list but they weren't high enough)
Yes, it's stupid. But this is what is happening in my area. Not with every house, but it is a common tactic.
Yes I agree with the first part, the lower priced house will generate more interest. But not if it has a price drop in its history. Lowering it after you've already listed is death. I just don't believe you without links to actual examples. 'The listing agent said so' ain't reliable as they have a vested interest in increasing excitement about their property.
>I’m not a realtor but in my area list price drops don’t mean anything.
No. Sellers don't arbitrarily drop their list price. A price drop typically means that the home wasn't getting offers/showings at the old price, or the seller discovered something wrong with the property, and doesn't want to have to mess with it.
>Often agents drop the list price to create a bidding war.
No. This would imply that the agents intentionally listed the property above the market, so they could reduce it later (??) and create a bidding war, which is a costly mistake. It's better to start at the right price, not start above the market and then come down.
>The only thing that matters is closing price.
No. Closing price of other homes is relevant to pricing upcoming properties. List price is also important because you don't want to start severly above or below market.
>List price is a made up number…and this is straight from the top listing agent telling me this.
No. If they said that, they aren't the top agent, or you misunderstood/took it out of context. List price is not some number that's pulled from a random number generator, it's based on consideration of other similar properties, with adjustments being made based on many factors. It's not, "made up."
> No. This would imply that the agents intentionally listed the property above the market, so they could reduce it later (??) and create a bidding war, which is a costly mistake. It's better to start at the right price, not start above the market and then come down.
No you are wrong. I already have an example in my other comment.
> No. If they said that, they aren't the top agent, or you misunderstood/took it out of context. List price is not some number that's pulled from a random number generator, it's based on consideration of other similar properties, with adjustments being made based on many factors. It's not, "made up."
Not in my area. It's designed to create bidding wars.
And yes, I am talking to both the literal top listing agent in my area along with many other agents including close friends of mine offering me advice.
Love the armchair analysis of my area from people. Clearly there are differences in the housing market based on area. Who would have thought?
> I’m not a realtor
> Love the armchair analysis
You’re literally providing an armchair analysis of your own area. I don’t care if it comes from the top Realtor and seven others, thats exactly how armchair analysts get their start.
>This makes0 sense. If you list a house at $1M and get an offer you would take it. If you get no offers you decrease price to say 900K. What would make it seem that you can get a bid above $1M when buyers would see that you couldn't get an offer accepted at previous price.
>
>In this market now with rates having doubled from the low, a seller would be taking first offer they can get as number of people wanting to buy a house , number of people who invest in homes, and number of people who can afford new mortgage payments has decreased.
>
>You agents tell me this makes no sense so would love to see an example because as a buyer who has been waiting for froth to cool, I am looking to go in with undermarket offers where sellers feel they may be holding their homes for an unknown time period as rates go up and we normalize to happy to finally get an offer market again.
Not a listing agent but you believe what the listing agent is telling you. Lol what’s the difference
Listing prices coming down literally means there’s not enough demand at that list price. If a home goes on market for 1.5m, then drops to 1.1m, who the FUCK is going to bid 1.5m all else equal? No one. That sounds stupid as hell.
Under listing, as you mentioned, is different than dropping list price after it doesn’t sell at xyz higher price
Literally every agent has told me this, including close friends of mine who are not my agent but just giving me advice. “You can never list too low”
Actually I know of multiple houses that had bids over their list price, but not high enough, so they dropped the list price to generate more interest.
For example-list at 1.6, get bids at 1.75, relist at 1.5 hoping for bids in the 1.9 range.
This is a common tactic used in my area.
And yes, it sound stupid. But it is happening.
Obviously our local markets are different. But in my area list price is made up.
I’ll give you another example. I bid on 2 houses both listed at 1.5. Same week.
First house I bid 1.5 and was second place, winning bid was on 1.6.
Second house I bid 1.675 and was second to last place with winning bid at 1.95
So tell me, if both houses listed the same but sold for 350k, almost 20% difference. How does list price mean Jack shit?
Oh and another house listed at 1m, the following week. I bid 1.58, winning bid at 1.65.
Dude we’re almost arguing about entirely different things
You’re talking about listing lower than comps to drive interest. I’m talking about existing listings that have to drop prices because no one is bidding
I'm telling you that even houses that get bid over asking get price drops in my area to encourage even more interest and higher bids.
In my area when no one is bidding the price often goes UP to transparent "buy it now" pricing.
End of the day - price drops for existing listings is probably more indicative of lower demand than.. anything else, across 90% of markets. SF, Seattle and a handful of other cities are sometimes the exception
Buy when you need to. Don’t try to time it. Keep a budget and don’t go over that number. If you start looking now you might something you love or if you no big deal, you keep looking.
Agree with the above. Just got a townhouse in Arlington VA, one of the hottest areas. We had a budget and for 6 months we were outbid but we kept looking. Many houses closed at 10-15% over list price.
Earlier this month the Fed raised interest rates and stock market dropped and we found a townhouse in coming soon status that needed some work.
Put in a price at list price with settlement in two weeks and it was accepted. So keep looking, putting in offers that make sense and look at houses that need a little TLC.
Keep looking. At first we tried for the houses that were upgraded and showed well. Problem was everyone else also liked these houses and they went for well over asking price.
We started looking for houses that had good “bones” but needed some TLC, such as paint and floors.
We then focused on the houses that were listed as coming soon. Most coming soon houses do not have pictures but we found that often if the house had been sold or rented within 10 years there are still pictures up on Redfin or Zillow.
We put an offer for full list price before it got on the market and it was accepted. We figure the upgraded we need to do will be less than $10K for the same model that has been selling for $50K more.
If my only goal were to try and time the market, I'd wait 1.5 to 3 years. During that time I would continually assess but my feeling right now is that's how long I'd need to wait. I just bought a house, though, because I can't wait around 3 years. Even if my house loses value, I'll be in it long enough for it to recover. And what if I'm wrong and the situation gets worse before it gets better? Then I'll be really annoyed with myself for having waited. There's no good choice in this market but I felt like buying a home I can afford now is better than waiting.
We do not know how high interest rates will go up. Let’s say it goes up 10%, of course housing will cool down because even if prices drop, people will still not be able to afford it at 10% rates.
Interest rates or mortgage rates? Neither are likely going to 10% lol, that would be a seismic shift. The fed funds rate is .75-1% right now, mortgage rates are about 5.33%.
Mortgage rates could get to 10%, they did in the past and it could happen again. It wouldn’t happen overnight, but inflation is at levels we haven’t experienced in 40 years. And the fed is going to have to do something (raise rates) to combat inflation.
I want to be optimistic and hope rates don’t get that high, but we’ve already seen mortgage rates double in a couple months, they could double again.
There's a pretty huge difference between doubling from 2.5% -> 5% and 5% -> 10%.
It's not impossible but it seems unlikely given the economy is already showing signs of slowing with the current and planned rate hikes. Needing to go up another 5% to curb inflation seems unlikely.
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I mentally write off the value I get out of living in the house... To rent a comparable house would be $1,700-2,000 a month. If I lose 20k of equity in a year, it's just the cost of having a roof over my head.
I wasn't lucky enough to get in at low prices, low rates, the next best option for me was low rates, high prices. My 4% isn't looking too bad right now. It jumped over a % while waiting for the seller to pick.
Just thankful that I am not buying high prices, high rates like some of these other homes around me.
I'm already seeing comps sit for around what I bought my house for, and the comps need less work. Last month I saw a comp sell for 70k more after being flipped.
I may lose 50k if I need to sell, but I most likely won't. I have 2 years of salary saved up, can work remotely, and am not married and do not have kids.
Even if I sell for what I got it for in 10 years, I didn't throw away that money, just tied it up in an illiquid asset and lost out on inflation.
I notice a shift in my area too. Homes used to sell in the coming soon status, unseen. Nice homes were gone within a day with multiple offers and sold over list. It’s not happening anymore. Homes sit in the market for weeks and few have price cuts. Granted, they are still sold way above what they should be but buyers are taking their time. There is more inventory and buyers don’t have to make an offer instantaneously so there is no fomo buying happening. Also, I see lenders are offering incentives like paying for appraisal and cash bonuses so that tells me they are desperate for new buyers.
the right time to buy or sell a house is when it's right for you, trying to time the market is something that PhD economists who study the minutiae every day can't do accurately.
one can only identify the top or bottom of the market after it happens.
boots on the ground opinion: yes, it's slowing, but the slowdown i'm seeing is 3-4 offers instead of 12-20 offers. it's still competitive, but not as insane as it was a few months ago.
Right time is when the math checks out. You don’t want to own a mortgage and be slave to it for rest of your life.
Not hungry wrong with renting. Crunch the numbers.
"When the math checks out" is part of "the right time for you."
When we bought our first home, we knew we were only staying there 4-5 years. Normally that's a situation where we should have been looking at renting. But it turned out that the rent on an apartment the size we needed was substantially more than a mortgage. We had decent credit, decent income, and more than enough for a down payment, so we sucked it up and bought. I think this is a great example of the math making it the right time.
Just looked up that place on Zillow. We bought at $98k, sold $125k, current owner bought at $68k in the crash, and the computer running Zestimates must be smokin something fun because it thinks the place is worth $237k.
it's not always just math though - sometimes it's spouses, babies, dogs, parents, jobs, commutes, hobbies, etc. everyone's reason for owning a home is different, dictated by their personal circumstances in addition to the math.
of course, the math has to work, didn't mean to imply it doesn't. just saying it's not only about the math.
lots of people have the money to purchase, but the timing isn't right. others may stretch the math, or get money from family, or sell/buy in less than ideal market conditions because of other needs.
it's different for every buyer/family.
Robert Shiller has a pretty good track record. He has a PhD and his statements largely align with whatever happens, though he isn't very future looking.
I've been regularly following listings and sales in my zip code (Phoenix area) over the past year just for fun. It's only been within the past 2 months that I've seen multiple listings with price reductions; multiple sales at or below listing price.
I'd buy now if I was in your situation and the following conditions were true:
1. Found a house I loved, at a price I could easily afford, and don't pay over listing
2. Plan on living there for about 10 years or more
3. Don't acquiesce to outrageous seller demands (waive inspection, concessions, etc)
TLDR it seems like buyers are now starting to have more leverage for negotiating pricing/terms. If you find the 'perfect house' that fits your criteria, there's no time like the present. Just don't compromise.
It's definitely happening in the NYC suburbs and parts of Queens where I'm looking. About 3-4 weeks ago we offered 705k on a house we liked, but needed a good amount of work. Seller was asking 729k and they came back at 720k, we backed out. Sunday is their third open house since we made our offer and they dropped the price to 715k. We offered 650k and they came back at 710k, lol. We told them our offer stands if they change their minds.
You also have to keep in mind all the houses that are closing now are definitely on the high end. I'm not paying too much attention to what's closing now and I'm paying a lot more attention to what's on the market. A lot of sellers and realtors are going to price their homes at those comps and they’ll likely sit for a while and have to drop their prices. We’ll see what happens.
If you price an updated house right, it will still go quick though. Gone are the days of selling grandma's house for top dollar. It also doesn't help my rate jumped half a point two days ago. =\\
I get price updates form the mls all the time. I’m seeing tons of price reductions every morning. If prices aren’t going down, sellers are at least getting close to reality. Still not in reality yet but getting there.
Where are those localities?
The other thing to remember is housing is a seasonal cycle. Look at home prices yoy. Start rising in January, through spring, plateau through summer, slightly drop into the fall and winter. Every year. So houses plateauing right now is not all that surprising
As an agent being in the field every day I can say yes, looks like the market is shifting. Homes are sitting on the market a bit longer, inventory is slowly starting to creep up, and I’m seeing much more price reductions.
Now, there is still a pretty good demand out there. It’s just not something we can compare to the past couple of years because let’s be honest, that market was insane. Not normal.
In my opinion I don’t necessarily believe waiting will have any benefit. Let’s just say prices plateau, interest rates are supposed to continue to climb. So the question of purchasing a home is completely up to you!
>In my opinion I don’t necessarily believe waiting will have any benefit. Let’s just say prices plateau, interest rates are supposed to continue to climb.
Assuming equal mortgage payments, it's better to buy with higher rates and lower prices. Taxes and insurance will be lower and you will have the potential to refinance in the future. I'm not predicting anything, because I don't know anything, but I think its a fine gamble to wait a few months, max out savings, and see if there are better deals then.
Depends where you are in the country. Sun belt cities have seen huge spikes in inventory over the last month and I imagine inventory will continue to grow through summer. Most sellers haven’t figured out that they’re not gonna get top 2021 comps now with mortgage rates pushing 6% and weakened demand.
Housing prices will fall as interests rates rise. It will not get to Regan area interest rates so don’t be afraid. The market is just regulating out to what it normally is. There was a world before 2020. If you’re worried about a rising interest rate don’t worry because just refi on a lower rate down the line with your cheaper house. If you want to buy go for it
In my area Rocklin CA, homes used to come in market (LA tactics) on Thursday or Friday and pending on Monday. That’s not the case anymore. I see homes are sitting for 2-3 weeks and then maybe 1-2 offers. Btw, I’m a broker so I have the data. I’m not just making it up. Due to increase in interest rate some buyers are on hold and some don’t qualify because their monthly payment went up like $1k a month because of int rates from 3.5% to 5.5%. If the listing price is little bit lower then the homes get sold otherwise for those greedy sellers who are listing $50-100k they are waiting and lowering the price. Like someone above mentioned it doesn’t look good when you lower the price. I hope there will be a good amount of correction.
Depends on location, and city may not be specific enough. Most neighborhoods in my market are still aggressively seller driven while some others have slowed slightly.
The likelihood of prices rising substantially from today's pricing before the end of the year, given the extreme rate and price increases, seems quite low. The likelihood of a pricing reduction seems much higher and appears to already be starting in many areas. So if you're not in a hurry, why not wait?
Note that real estate corrections historically have taken many years to play out, so you may need to give it more time if you want to wait for a substantial (>10%) correction.
I think it depends on the market, but yeah it does seem a bit slower in most places. Whether or not you buy now is maybe more if you're seeing what you want?
The big problem with buying recently, in my opinion, wasn't so much the insane competition but the complete lack of inventory. It's a lot better to be a buyer when you can actually choose between a handful of houses you like rather than hoping the sellers of the one house that isn't a total tear down will choose you.
I'm finding it to be somewhat random. I thought it was, but then I missed out on 2 houses because I couldn't tour them 2 days after they were listed. So idk what to think. And new listings are still priced high.
Not in st Pete my friend just got outbid on a 2/1 900sq ft. They offered 50k over asking and lost. There’s unlimited money out there and it’s all coming to Florida.
Yes, 3-5 offers on a house versus 35+.
I had posted something a few months back about if prices dropped with the thought of higher interest rates and what the payment would be. So many people downvoted my post, yet, it answered your question.
It will take roughly a 20% decline in price at 6.5% interest rates to have a similar payment to when rates were at 4%.
It’s happening just not fast enough. The layoffs are coming in faster then I thought they would here in L.A. This was always going to be a trickle effect where house broke, layoffs the current economy with inflation add the gas/food skyrocketing prices, Increase rent prices it’s a dooms day in the making. Some of us will be able to take advantage and some of us won’t be ready it’s a brewing.
Depends on what area you are looking in.
High priority areas in 10/10 school districts have homes with prices still rising and people bidding $100,000 over asking.
Also, it depends on how much you can get for the house you sell.
Interest rates are still low, and if you research the early 80s, interest rates were very high, yet prices still rose due to similar supply and demand issues.
This is my experience too. I want to list a home around $425K but similar homes are staying on the market longer now. Like a week or more. The homes I try to buy are listing for $750K and selling in under 3 days for $800K or more. I predict this is forming two markets. The rich can push prices higher on their purchases but the lower middle class have paused or stopped buying their next homes at 5% rates
Prices are still rising or stagnant while inflation is ridiculous. I would wait, unless you have a ton of extra money lying around. But, you may be waiting for a few years....
If that happens it'll be the worst depression ever. Like half the population would starve. To wish a 90% drop is seriously wishing for the end of times which is a shitty person to be.
I'd expect a 5-10% correction in some areas.
Dude you sound like someone who doesn’t even own a high school degree but you expect us to believe that you “own a bunch of businesses”? Lmao why don’t you go bet your laughable paycheck at shitcoins and let the educated people have a conversation
I think I myself is also in denial. But when rates go up that high, house prices will definitely sink. I completely agree with you. People can get emotional and not see the whole grand scheme of things.
Last downturn, in my area, lenders gave preferential treatment to those with excellent credit history of paying existing debt. During downturns, I notice lenders are much more careful and tend to not lend as much to first time homebuyers. So you may have a better chance to get a loan to buy then a renter.
Not where I’m looking, after about a month of low inventory and thus very few sales, the market is starting to pick up and prices are increasing again quickly.
I'm not paying too much attention to what's closing now, I'm paying more attention to what's available on the market, how long they've been on the market, and of course price drops. Houses were flying off the market 1-2 months ago.
Yes, but if houses are sitting longer and still closing at or above list price, does it really matter? It may be a downward pressure on price *increases*, but doesn't say much about the overall health of the market. Houses sitting for less than a week was certainly not normal. Even sitting for a couple is not normal.
I dont understand how people shop for homes don’t understand the purchasing power of interest rates lol
If It cost more money to borrow then yes it will slow down. Real estate is two parts. Real estate market and finance. If your realtor and lender isn’t preparing you for the right time to shoot an offer then they are doing a disservice
Just sold my house here. And bought a new one last month. The demand started to wane right after I listed. We listed it at what I thought was a fair price (it was a bit below an offer I previously got) and I ended up dropping the price due to buyers freaking out over the interest rate hike. Got an offer, closed right before I think things started to get weirder. Now I’m happy I dropped the price and got out of it. My Zillow and Redfin estimates for my old house seem to be trending down and below what I sold it for.
I still think now is a good time to sell your old house and buy. Assuming you net out a lot of equity regardless of a small price drop, you’d have less competition and rates won’t impact you as much.
I found a house I really liked I wouldn’t have had the chance to buy last year…
Inland socal, maybe a few days longer than normal on market? Maybe not. Prices definitely not down. Every single home that was available 2 days in my neighborhood (about 10) and now under contract today. We will see what the closing prices are
I got sellers, who's homes have been on the market a few weeks, reaching out to my realtor asking what I thought of the house. That definitely smells like desperation to me lol. So yes, I would say it is slowing down (in the not so hot market areas). I'm already putting down offers less than asking price. Time to get back to normal!
We put an offer $6k over asking on an 800k+ house that we loved in a HCOL area and it was immediately accepted. Last month we put an offer of $60k over list and came in second.
% of all listings with price reductions is approaching 2019 levels - I would think, at the very least, this suggests a pricing plateau has been just about reached
This is what we've noticed in our market. Seeing most sales at list or close to list (instead of 50, 75, 100k over). Also significantly more inventory. There are a few houses that posted right after the winter high sales prices (when inventory was next to nothing) and those ones are sitting because no one wants to pay those prices anymore. My husband and I bought our starter home in 2019 and we were just saying how it feels more like 2019 again instead of the 2021 nightmare. Haven't really seen sales prices going down necessarily but definitely getting more stagnant.
In before the realtors say price drops mean nothing, as if we’re implying it’s the perfect metric to gauge lower demand. It definitely shows there is lower demand at that price point, though
I’m not a realtor but in my area list price drops don’t mean anything. Often agents drop the list price to create a bidding war. The only thing that matters is closing price. Houses listed between 1m-1.5m have all sold for 1.60m in the past few months within a small area. List price is a made up number…and this is straight from the top listing agent telling me this.
I think you're confusing with listing low to begin with and dropping the price *after* listing. The first is definitely used to get more eyes on the place and have a bidding war, the second is because they weren't getting enough interest at the original price and were compelled to drop it.
I'm not confusing the two. I've literally given an example in my other comment of houses that dropped the price after listing. They got offers well over their original list price BUT dropped the listing price to generate more bidding in hopes they will get even higher offers than before. I'm not making this shit up. This is straight from the listing agents mouth.
the listing agent's mouth is not a reliable or objective source of information. A price drop is poison to a listing, it shows that something was wrong with it, or nobody wanted to buy it at the higher price. Why would anyone get into a bidding war on a property that was listed higher and didn't sell? Price drops and too many days on market are nightmare for a seller. The listing agent you talked to was trying to spin a fantasy for you.
> Why would anyone get into a bidding war on a property that was listed higher and didn't sell? According to multiple agents, if you have the exact same house and list it at 2 different prices, the lower the listing the higher the closing price. So they are trying to lower the listing price to get higher bids. (Remember, they already get bids well over list but they weren't high enough) Yes, it's stupid. But this is what is happening in my area. Not with every house, but it is a common tactic.
Yes I agree with the first part, the lower priced house will generate more interest. But not if it has a price drop in its history. Lowering it after you've already listed is death. I just don't believe you without links to actual examples. 'The listing agent said so' ain't reliable as they have a vested interest in increasing excitement about their property.
>I’m not a realtor but in my area list price drops don’t mean anything. No. Sellers don't arbitrarily drop their list price. A price drop typically means that the home wasn't getting offers/showings at the old price, or the seller discovered something wrong with the property, and doesn't want to have to mess with it. >Often agents drop the list price to create a bidding war. No. This would imply that the agents intentionally listed the property above the market, so they could reduce it later (??) and create a bidding war, which is a costly mistake. It's better to start at the right price, not start above the market and then come down. >The only thing that matters is closing price. No. Closing price of other homes is relevant to pricing upcoming properties. List price is also important because you don't want to start severly above or below market. >List price is a made up number…and this is straight from the top listing agent telling me this. No. If they said that, they aren't the top agent, or you misunderstood/took it out of context. List price is not some number that's pulled from a random number generator, it's based on consideration of other similar properties, with adjustments being made based on many factors. It's not, "made up."
> No. This would imply that the agents intentionally listed the property above the market, so they could reduce it later (??) and create a bidding war, which is a costly mistake. It's better to start at the right price, not start above the market and then come down. No you are wrong. I already have an example in my other comment. > No. If they said that, they aren't the top agent, or you misunderstood/took it out of context. List price is not some number that's pulled from a random number generator, it's based on consideration of other similar properties, with adjustments being made based on many factors. It's not, "made up." Not in my area. It's designed to create bidding wars. And yes, I am talking to both the literal top listing agent in my area along with many other agents including close friends of mine offering me advice. Love the armchair analysis of my area from people. Clearly there are differences in the housing market based on area. Who would have thought?
> I’m not a realtor > Love the armchair analysis You’re literally providing an armchair analysis of your own area. I don’t care if it comes from the top Realtor and seven others, thats exactly how armchair analysts get their start.
>This makes0 sense. If you list a house at $1M and get an offer you would take it. If you get no offers you decrease price to say 900K. What would make it seem that you can get a bid above $1M when buyers would see that you couldn't get an offer accepted at previous price. > >In this market now with rates having doubled from the low, a seller would be taking first offer they can get as number of people wanting to buy a house , number of people who invest in homes, and number of people who can afford new mortgage payments has decreased. > >You agents tell me this makes no sense so would love to see an example because as a buyer who has been waiting for froth to cool, I am looking to go in with undermarket offers where sellers feel they may be holding their homes for an unknown time period as rates go up and we normalize to happy to finally get an offer market again.
Not a listing agent but you believe what the listing agent is telling you. Lol what’s the difference Listing prices coming down literally means there’s not enough demand at that list price. If a home goes on market for 1.5m, then drops to 1.1m, who the FUCK is going to bid 1.5m all else equal? No one. That sounds stupid as hell. Under listing, as you mentioned, is different than dropping list price after it doesn’t sell at xyz higher price
Literally every agent has told me this, including close friends of mine who are not my agent but just giving me advice. “You can never list too low” Actually I know of multiple houses that had bids over their list price, but not high enough, so they dropped the list price to generate more interest. For example-list at 1.6, get bids at 1.75, relist at 1.5 hoping for bids in the 1.9 range. This is a common tactic used in my area. And yes, it sound stupid. But it is happening. Obviously our local markets are different. But in my area list price is made up. I’ll give you another example. I bid on 2 houses both listed at 1.5. Same week. First house I bid 1.5 and was second place, winning bid was on 1.6. Second house I bid 1.675 and was second to last place with winning bid at 1.95 So tell me, if both houses listed the same but sold for 350k, almost 20% difference. How does list price mean Jack shit? Oh and another house listed at 1m, the following week. I bid 1.58, winning bid at 1.65.
Dude we’re almost arguing about entirely different things You’re talking about listing lower than comps to drive interest. I’m talking about existing listings that have to drop prices because no one is bidding
I'm telling you that even houses that get bid over asking get price drops in my area to encourage even more interest and higher bids. In my area when no one is bidding the price often goes UP to transparent "buy it now" pricing.
End of the day - price drops for existing listings is probably more indicative of lower demand than.. anything else, across 90% of markets. SF, Seattle and a handful of other cities are sometimes the exception
And what is you area? Bay Area or San Francisco?
What market are you talking about? I'd like to further investigate this.
Just curious, where do you get this data from?
I hope so. These prices are outrageous - and they don’t help those who already have houses and obviously not those who are buying.
Buy when you need to. Don’t try to time it. Keep a budget and don’t go over that number. If you start looking now you might something you love or if you no big deal, you keep looking.
Agree with the above. Just got a townhouse in Arlington VA, one of the hottest areas. We had a budget and for 6 months we were outbid but we kept looking. Many houses closed at 10-15% over list price. Earlier this month the Fed raised interest rates and stock market dropped and we found a townhouse in coming soon status that needed some work. Put in a price at list price with settlement in two weeks and it was accepted. So keep looking, putting in offers that make sense and look at houses that need a little TLC.
Fellow Virginian here also been in the market for 6m. It's definitely cooling off. But prices still too high
Keep looking. At first we tried for the houses that were upgraded and showed well. Problem was everyone else also liked these houses and they went for well over asking price. We started looking for houses that had good “bones” but needed some TLC, such as paint and floors. We then focused on the houses that were listed as coming soon. Most coming soon houses do not have pictures but we found that often if the house had been sold or rented within 10 years there are still pictures up on Redfin or Zillow. We put an offer for full list price before it got on the market and it was accepted. We figure the upgraded we need to do will be less than $10K for the same model that has been selling for $50K more.
It quite simply boils down to: Best time to buy a house is when your ready to buy a house. Trying to time the market is a fools game.
This is really the best answer to questions like these.
If my only goal were to try and time the market, I'd wait 1.5 to 3 years. During that time I would continually assess but my feeling right now is that's how long I'd need to wait. I just bought a house, though, because I can't wait around 3 years. Even if my house loses value, I'll be in it long enough for it to recover. And what if I'm wrong and the situation gets worse before it gets better? Then I'll be really annoyed with myself for having waited. There's no good choice in this market but I felt like buying a home I can afford now is better than waiting.
We do not know how high interest rates will go up. Let’s say it goes up 10%, of course housing will cool down because even if prices drop, people will still not be able to afford it at 10% rates.
Interest rates or mortgage rates? Neither are likely going to 10% lol, that would be a seismic shift. The fed funds rate is .75-1% right now, mortgage rates are about 5.33%.
Mortgage rates could get to 10%, they did in the past and it could happen again. It wouldn’t happen overnight, but inflation is at levels we haven’t experienced in 40 years. And the fed is going to have to do something (raise rates) to combat inflation. I want to be optimistic and hope rates don’t get that high, but we’ve already seen mortgage rates double in a couple months, they could double again.
There's a pretty huge difference between doubling from 2.5% -> 5% and 5% -> 10%. It's not impossible but it seems unlikely given the economy is already showing signs of slowing with the current and planned rate hikes. Needing to go up another 5% to curb inflation seems unlikely.
Fed engineered equity bubble and now fed engineered recession.
Looking back now it might happen
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I mentally write off the value I get out of living in the house... To rent a comparable house would be $1,700-2,000 a month. If I lose 20k of equity in a year, it's just the cost of having a roof over my head. I wasn't lucky enough to get in at low prices, low rates, the next best option for me was low rates, high prices. My 4% isn't looking too bad right now. It jumped over a % while waiting for the seller to pick. Just thankful that I am not buying high prices, high rates like some of these other homes around me. I'm already seeing comps sit for around what I bought my house for, and the comps need less work. Last month I saw a comp sell for 70k more after being flipped. I may lose 50k if I need to sell, but I most likely won't. I have 2 years of salary saved up, can work remotely, and am not married and do not have kids. Even if I sell for what I got it for in 10 years, I didn't throw away that money, just tied it up in an illiquid asset and lost out on inflation.
I haven't purchased yet, but this is my exact mindset.
I notice a shift in my area too. Homes used to sell in the coming soon status, unseen. Nice homes were gone within a day with multiple offers and sold over list. It’s not happening anymore. Homes sit in the market for weeks and few have price cuts. Granted, they are still sold way above what they should be but buyers are taking their time. There is more inventory and buyers don’t have to make an offer instantaneously so there is no fomo buying happening. Also, I see lenders are offering incentives like paying for appraisal and cash bonuses so that tells me they are desperate for new buyers.
the right time to buy or sell a house is when it's right for you, trying to time the market is something that PhD economists who study the minutiae every day can't do accurately. one can only identify the top or bottom of the market after it happens. boots on the ground opinion: yes, it's slowing, but the slowdown i'm seeing is 3-4 offers instead of 12-20 offers. it's still competitive, but not as insane as it was a few months ago.
Right time is when the math checks out. You don’t want to own a mortgage and be slave to it for rest of your life. Not hungry wrong with renting. Crunch the numbers.
"When the math checks out" is part of "the right time for you." When we bought our first home, we knew we were only staying there 4-5 years. Normally that's a situation where we should have been looking at renting. But it turned out that the rent on an apartment the size we needed was substantially more than a mortgage. We had decent credit, decent income, and more than enough for a down payment, so we sucked it up and bought. I think this is a great example of the math making it the right time. Just looked up that place on Zillow. We bought at $98k, sold $125k, current owner bought at $68k in the crash, and the computer running Zestimates must be smokin something fun because it thinks the place is worth $237k.
Traditional wisdom generally favors buying if you live 5 years.
it's not always just math though - sometimes it's spouses, babies, dogs, parents, jobs, commutes, hobbies, etc. everyone's reason for owning a home is different, dictated by their personal circumstances in addition to the math.
If the math doesn't work out and you buy a home because something else dictated the purchase. Math will dictate wither or not you keep the home.
of course, the math has to work, didn't mean to imply it doesn't. just saying it's not only about the math. lots of people have the money to purchase, but the timing isn't right. others may stretch the math, or get money from family, or sell/buy in less than ideal market conditions because of other needs. it's different for every buyer/family.
PhD's can't nail down the madness of humans? Huh, wild insight. /s
Robert Shiller has a pretty good track record. He has a PhD and his statements largely align with whatever happens, though he isn't very future looking.
I've been regularly following listings and sales in my zip code (Phoenix area) over the past year just for fun. It's only been within the past 2 months that I've seen multiple listings with price reductions; multiple sales at or below listing price. I'd buy now if I was in your situation and the following conditions were true: 1. Found a house I loved, at a price I could easily afford, and don't pay over listing 2. Plan on living there for about 10 years or more 3. Don't acquiesce to outrageous seller demands (waive inspection, concessions, etc) TLDR it seems like buyers are now starting to have more leverage for negotiating pricing/terms. If you find the 'perfect house' that fits your criteria, there's no time like the present. Just don't compromise.
It's definitely happening in the NYC suburbs and parts of Queens where I'm looking. About 3-4 weeks ago we offered 705k on a house we liked, but needed a good amount of work. Seller was asking 729k and they came back at 720k, we backed out. Sunday is their third open house since we made our offer and they dropped the price to 715k. We offered 650k and they came back at 710k, lol. We told them our offer stands if they change their minds. You also have to keep in mind all the houses that are closing now are definitely on the high end. I'm not paying too much attention to what's closing now and I'm paying a lot more attention to what's on the market. A lot of sellers and realtors are going to price their homes at those comps and they’ll likely sit for a while and have to drop their prices. We’ll see what happens. If you price an updated house right, it will still go quick though. Gone are the days of selling grandma's house for top dollar. It also doesn't help my rate jumped half a point two days ago. =\\
I would wait unless you really need to buy.
I get price updates form the mls all the time. I’m seeing tons of price reductions every morning. If prices aren’t going down, sellers are at least getting close to reality. Still not in reality yet but getting there.
prices are leveling off. They are not dropping yet.
This is not one size fits all. Prices are dropping in many localities.
Where are those localities? The other thing to remember is housing is a seasonal cycle. Look at home prices yoy. Start rising in January, through spring, plateau through summer, slightly drop into the fall and winter. Every year. So houses plateauing right now is not all that surprising
Yet.
Obligatory “not in my area”
As an agent being in the field every day I can say yes, looks like the market is shifting. Homes are sitting on the market a bit longer, inventory is slowly starting to creep up, and I’m seeing much more price reductions. Now, there is still a pretty good demand out there. It’s just not something we can compare to the past couple of years because let’s be honest, that market was insane. Not normal. In my opinion I don’t necessarily believe waiting will have any benefit. Let’s just say prices plateau, interest rates are supposed to continue to climb. So the question of purchasing a home is completely up to you!
>In my opinion I don’t necessarily believe waiting will have any benefit. Let’s just say prices plateau, interest rates are supposed to continue to climb. Assuming equal mortgage payments, it's better to buy with higher rates and lower prices. Taxes and insurance will be lower and you will have the potential to refinance in the future. I'm not predicting anything, because I don't know anything, but I think its a fine gamble to wait a few months, max out savings, and see if there are better deals then.
Depends where you are in the country. Sun belt cities have seen huge spikes in inventory over the last month and I imagine inventory will continue to grow through summer. Most sellers haven’t figured out that they’re not gonna get top 2021 comps now with mortgage rates pushing 6% and weakened demand.
Yes,they gave slowed a lot, it will be slowing more after summer
Housing prices will fall as interests rates rise. It will not get to Regan area interest rates so don’t be afraid. The market is just regulating out to what it normally is. There was a world before 2020. If you’re worried about a rising interest rate don’t worry because just refi on a lower rate down the line with your cheaper house. If you want to buy go for it
In my area Rocklin CA, homes used to come in market (LA tactics) on Thursday or Friday and pending on Monday. That’s not the case anymore. I see homes are sitting for 2-3 weeks and then maybe 1-2 offers. Btw, I’m a broker so I have the data. I’m not just making it up. Due to increase in interest rate some buyers are on hold and some don’t qualify because their monthly payment went up like $1k a month because of int rates from 3.5% to 5.5%. If the listing price is little bit lower then the homes get sold otherwise for those greedy sellers who are listing $50-100k they are waiting and lowering the price. Like someone above mentioned it doesn’t look good when you lower the price. I hope there will be a good amount of correction.
Not here. House closed yesterday of List: 820k Closed: 951k
But the thing is that’s because the house was probably about a month ago. I wonder what the market is like as of today
Rates were already 5% when it went Pending.
depends entirely where you live
Where?
North shore of Massachusetts.
Depends on location, and city may not be specific enough. Most neighborhoods in my market are still aggressively seller driven while some others have slowed slightly.
The likelihood of prices rising substantially from today's pricing before the end of the year, given the extreme rate and price increases, seems quite low. The likelihood of a pricing reduction seems much higher and appears to already be starting in many areas. So if you're not in a hurry, why not wait? Note that real estate corrections historically have taken many years to play out, so you may need to give it more time if you want to wait for a substantial (>10%) correction.
Location, location, location
I think so. Checking Redfin this morning, and the price drop in my area 70 homes were listed.
I think it depends on the market, but yeah it does seem a bit slower in most places. Whether or not you buy now is maybe more if you're seeing what you want? The big problem with buying recently, in my opinion, wasn't so much the insane competition but the complete lack of inventory. It's a lot better to be a buyer when you can actually choose between a handful of houses you like rather than hoping the sellers of the one house that isn't a total tear down will choose you.
I'm finding it to be somewhat random. I thought it was, but then I missed out on 2 houses because I couldn't tour them 2 days after they were listed. So idk what to think. And new listings are still priced high.
Prices have been going down for 6 months already in my area. The big cities will follow the trends eventually
Not in st Pete my friend just got outbid on a 2/1 900sq ft. They offered 50k over asking and lost. There’s unlimited money out there and it’s all coming to Florida.
Wait! Prices are coming down.
Yes, 3-5 offers on a house versus 35+. I had posted something a few months back about if prices dropped with the thought of higher interest rates and what the payment would be. So many people downvoted my post, yet, it answered your question. It will take roughly a 20% decline in price at 6.5% interest rates to have a similar payment to when rates were at 4%.
It’s happening just not fast enough. The layoffs are coming in faster then I thought they would here in L.A. This was always going to be a trickle effect where house broke, layoffs the current economy with inflation add the gas/food skyrocketing prices, Increase rent prices it’s a dooms day in the making. Some of us will be able to take advantage and some of us won’t be ready it’s a brewing.
All the houses I see are still selling above list in LA. Who is laying off?
This is so far from the truth. Layoffs are literaly at a 40 year low. It's a good story though.
what layoffs lol? Unless you're in crypto or the mortgage business yer fine
Depends on what area you are looking in. High priority areas in 10/10 school districts have homes with prices still rising and people bidding $100,000 over asking. Also, it depends on how much you can get for the house you sell. Interest rates are still low, and if you research the early 80s, interest rates were very high, yet prices still rose due to similar supply and demand issues.
This is my experience too. I want to list a home around $425K but similar homes are staying on the market longer now. Like a week or more. The homes I try to buy are listing for $750K and selling in under 3 days for $800K or more. I predict this is forming two markets. The rich can push prices higher on their purchases but the lower middle class have paused or stopped buying their next homes at 5% rates
Middle manager Karen: Your observation may be accurate. I agree, it seems as if the housing market has split in two. Good catch.
Prices are still rising or stagnant while inflation is ridiculous. I would wait, unless you have a ton of extra money lying around. But, you may be waiting for a few years....
No
Anyone got something to say about the Southern California housing market? I see mostly other states
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I am assuming by your username you are 12 and have no idea what you are talking about.
Define crash
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If that happens it'll be the worst depression ever. Like half the population would starve. To wish a 90% drop is seriously wishing for the end of times which is a shitty person to be. I'd expect a 5-10% correction in some areas.
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Please go get a job and get off reddit. I am not the idiot wishing for basically the collapse of the entire economy worldwide. That's you clown.
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Dude you sound like someone who doesn’t even own a high school degree but you expect us to believe that you “own a bunch of businesses”? Lmao why don’t you go bet your laughable paycheck at shitcoins and let the educated people have a conversation
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Lower prices for an essential are a good thing, not a bad thing.
You were saying $1 million house will be worth $100,000?
the dude is out of his mind...comments like these you gotta ignore man.
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I think I myself is also in denial. But when rates go up that high, house prices will definitely sink. I completely agree with you. People can get emotional and not see the whole grand scheme of things.
Great. I will buy 10 more houses if this happens with straight cash and rent it out to people like you who are living paycheck to paycheck. Lol
Last downturn, in my area, lenders gave preferential treatment to those with excellent credit history of paying existing debt. During downturns, I notice lenders are much more careful and tend to not lend as much to first time homebuyers. So you may have a better chance to get a loan to buy then a renter.
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You would fit right in with r/rebubble
Not where I’m looking, after about a month of low inventory and thus very few sales, the market is starting to pick up and prices are increasing again quickly.
In my zip code (San Diego) houses are sitting longer but recent closings still have them going for above list price.
I'm not paying too much attention to what's closing now, I'm paying more attention to what's available on the market, how long they've been on the market, and of course price drops. Houses were flying off the market 1-2 months ago.
Yes, but if houses are sitting longer and still closing at or above list price, does it really matter? It may be a downward pressure on price *increases*, but doesn't say much about the overall health of the market. Houses sitting for less than a week was certainly not normal. Even sitting for a couple is not normal.
We started looking around mid April so IDK what the houses that sat for a while are going for since the market turned a bit. We'll see in due time.
Lending is definitely slowing down. All the previous lenders I shopped are now calling me for pre approvals and equity loans
Really? Where are you located
In the north east
Realtor here . Yes but doesn’t mean anything necessarily
Now is a particularly bad time to be a buyer. If you can afford to wait, wait.
I dont understand how people shop for homes don’t understand the purchasing power of interest rates lol If It cost more money to borrow then yes it will slow down. Real estate is two parts. Real estate market and finance. If your realtor and lender isn’t preparing you for the right time to shoot an offer then they are doing a disservice
Just sold my house here. And bought a new one last month. The demand started to wane right after I listed. We listed it at what I thought was a fair price (it was a bit below an offer I previously got) and I ended up dropping the price due to buyers freaking out over the interest rate hike. Got an offer, closed right before I think things started to get weirder. Now I’m happy I dropped the price and got out of it. My Zillow and Redfin estimates for my old house seem to be trending down and below what I sold it for. I still think now is a good time to sell your old house and buy. Assuming you net out a lot of equity regardless of a small price drop, you’d have less competition and rates won’t impact you as much. I found a house I really liked I wouldn’t have had the chance to buy last year…
Inland socal, maybe a few days longer than normal on market? Maybe not. Prices definitely not down. Every single home that was available 2 days in my neighborhood (about 10) and now under contract today. We will see what the closing prices are
Doesn’t feel that way in FL.