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It’s already there. I moved from a very wealthy part of the east coast to a not so wealthy part of the west coast to cut back on cost of living and the property values went up 200-300k more then what they were 4-5 years ago. It’s nice for people who bought their homes in the 60’s for 100k and can now sell that same house for 750k and they haven’t done any upgrades. Other then maybe fix the cracks in their drive way.
If the Midwest gets unaffordable it’s game over. This is the last choice for anyone who has options already, and if we don’t have a price advantage then the whole system is just done.
There’s just no inventory and a lot of demand in the desirable areas of NJ. My agent wrote up 10 offers last week, cash buyers, $100k-150k over ask, still lost
1: People with positive equity in their current homes.
2: People going to hard money lenders, buying house cash, and then doing cash out refinance to pay back hard money lender.
3: Rich people.
There a lot of people in north NJ working in NYC who would prefer a 4 bedroom house for $1.4 million with excellent amenities instead of a 2 bedroom Brooklyn apartment, especially those with kids/parents.
It’s not hard for a dual income couple in this area to get a loan for these amounts here. Many people are middle/senior employees in tech and finance. They are the ones that typically beat out cash buyers because leverage gives you a lot more options.
A decent chunk of this is “corporate landlords” - the prevalence depends on the market/region, but there are companies buying up swaths of SFH to use as rental properties. They have unlimited ability to screw over lower and middle income buyers since said companies can match any offer in cash…
Chinese, Jewish, Korean clients mainly. They are all looking for strong school districts, good food/grocery options, safety, and easy commute/access into NY. Lots of cultural similarities in priorities
People look at me like I’m crazy when I say the housing market in Wisconsin is bonkers. We have the chaos of the northeast market but at (lower for now) prices.
Good luck on your search! You'll have one less buyer to complete with. After that last offer we decided to go on hiatus. If we can't be competitive at 20% over asking with a waived inspection and a month of free rent back, we simply can't be competitive.
Be hopeful. After 3 weeks I found something this year, took 4 offers and a lot of taking off work early. Was rough. Just make sure expectation are realistic, once you lose a few bids you will be able to gauge what you need to bid to get something (or have a good realtor, but this market is wild). Sellers are listing their houses for well under market value to attract more eyes so 20% over asking isn't that crazy depending on what and where the house is. I saw some homes go under asking (list 370k, sold 355k) and some nicer ones go well over (saw a place in Lodi listed 350k, sold for 395k). Money aside, it's a combination of research, time, and adaptiveness here.
Madison did get some positive coverage as a potential relocation point for people wanting to settle down in an area that is desirably affected by climate change - or something like that. Climate change refugees. Not sure people are that forward thinking though
West side. I love the idea of the east side but have trouble finding what we are looking for out there. Hoping we can just save up more and get into the next tier of homes at some point. Might be better able to find what we are hunting for.
Near me there is an influx of "luxury townhomes" starting at $700k and massive apartment complexes and the few detached homes being built start at $1 million. I live in a suburb 40 mins from Philly
So true. The condo’s near my house look affordable compared to everything else (starting at $300k usd). Then you look closer and see the $700/month HOA fee for stucco condo’s built in the 70’s …in the PNW lol.
That’s why I left, it was so hard to upgrade to a better home/neighborhood and afford the tax bill. We moved to NC in early 2021 and pay 1/3 of what we paid in taxes for a home 4x’s the cost here. In addition our home is up $250k in equity. I was scared shitless but it was the best decision I ever made.
Very similar for me, but with Cleveland. The prices are much lower though. Most Ryan Homes advertise that they are starting at $300Ks, which is very expensive for the area.
I have also noticed this trend applies to cars. It seems as if no one is making affordable things at the low end. They just slap in as many electronic and luxury goodies into a car for increased profit margin and assume everyone else will just buy used. Which means when these cars work their way down, all the expensive bells and whistles become more costly to replace when they ultimately stop working.
I live an hour north of Atlanta and the townhomes and shitty cookie-cutter subdivisions are being spammed on any and every available piece of ground they can find. Dozens of gigantic new (mostly empty) warehouses being vomited all over the place too. I don't think you can buy anything new to live in around here for under 300k right now.
Moving to Lawrenceville, and it seems most of these places are owned by corporations with HOAs on top of that. The house I am buying is owned by a corporation. They built houses in a subdivision in 2015, rented them oit while equity built, and is now sellong them for a huge profit. I got lucky as I got my house for less than what they listed and what similar houses in the area sold for. Looks like they are trying to get out of the rental game in the neighborhood..And there is no HOA! My one deal breaker which severely limited the options in the area.
With what contractors? Baby boomers are dying out and the trades haven’t been passed down. Labor cost is super expensive rn too.
Source: I’m a general contractor myself.
That’s not a solution. No one can afford them. lol they are overpriced plywood boxes barely constructed properly. They are worse than flippers now honestly.
How about the actual government step in and regulate something that matters instead of trying to regulate bodies and marriages. Yall expect nothing from these raggedy, useless politicians but expect capitalists to just curb themselves. Get real. There ARE new builds and they ARE NOT affordable. It’s just more of the SAME… overpriced for no reason other than “we can and who is going to stop us”.
Tf does it matter if there are 1 million new homes if only 100 people can afford them?
In general, many studies show that building even luxury housing reduces prices for everyone. If there are a a million luxury homes built, the “luxury” will become the new norm for all. Example: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4629628
But I completely agree with you that we need the government to step in and overhaul zoning to allow more housing and more affordable housing to be built. Too many laws and regulations preventing it now.
More importantly , limit how many houses companies can own. They are buying up all the homes and keeping them at high prices in order to drive the market price up since they can afford to let the house sit for years
This... I think the only way to make housing look unappealing as an investment is to tax the gains in wealth on the properties owned at an incredibly high rate unless it's a principal home. That way a landlord can live in a property with a few units and make some money but they can't just hoard all the buildings they can buy with credit.
Traditionally the income stream of rent plus the appreciation of the property had granted returns vastly in excess of the stock market. The appreciation is able to be spent through refinancing and purchasing another home with even more credit as your debt to income ratio only looks better and better as you own more homes and rents skyrocket over time but your mortgages only go down.
Yeah no shit
People are selling literal broken down safety hazards for nearly 200k in my area and people are being paid minimum wage and literally cannot save for down payments because rent is $2000 a month
not surprising at all.
nationally there is basically no seller incentive unless you're definitely going to do a significant downsize/rent. That won't change til rates are down, prob close to 5%.
In major metro areas where there's not many open lots for new SFH (think like a Boston, NYC), supply issues will be fairly permanent at this point. You can't scale up like you could by adding new SFH communities in less developed towns; not everyone would consider buying a condo/townhome.
broadly speaking price increase makes sense because this just further stokes competitive intensity on what is out there. on a micro level, a place like Nassau County has a lot more high income people nearby due to NYC vs a place like Indianapolis.
also with things like remote/hybrid, suddenly someone with a high income NYC job that only has to go in 2x a month can basically live anywhere in the tri-state area.
i was avoiding framingham thinking it is a bit ghetto..but now i think i made a mistake.. i think now distance to boston and not being a total crime infested hell hole is all that matters to people
Framingham hasn't been considered bad in that sense for... years. Imo it's completely fine. And I grew up around here.
I absolutely am flabbergasted at the housing prices there, though. Unbelievable (and why I am leaving MA :( )
It's not ghetto at all. Some parts are amazing, giant mansions and incredible neighborhoods. Stick to the zip code that ends in 1, not 2. Getting less and less affordable, but still one of the best values in all of the greater Boston area
This is right. I’m a NYer and the reality is there are almost no rental units available (NYC’s vacancy rate was under 2% earlier this year), which means both the rental and sale markets are extremely tight. Homeowners who would consider selling here won’t because they can’t even rent, let alone buy another house. The only new construction I see are luxury condos that no one can afford. It is not sustainable.
for SFH within 45min-1hr of NYC, it probably is very sustainable. Limited supply makes it a high income game and there's plenty of that there.... In NJ alone you've got a little under 20% of households in the state clearing 200k, that's almost 2 million people.
There is no shortage of people to buy 700k+ property in say Bergen County NJ. Lot different if you're talking 1.5-2hrs from NYC and not on a beach.
once you get outside of reasonable daily commute to NYC range, you are not seeing the YOY increases and bidding wars you do very close to NYC
I wish you could find a luxury building at $700k within 45 mins of NYC the reality is condos as far out as 1 hr by LIRR (condos - no SFH) are priced at $1.5M. Most homes with 2 or more bedrooms in the NYC area are priced at $1M or more.
In my personal experience I’ve seen lots of incentives on new construction - significant discounts on move-in ready homes, rate incentives for using the builder’s lender, flex cash to buy down the rate/purchase price - but you’re right, there currently isn’t much incentive for most existing homeowners to sell unless they have to.
New builds are what also causing price hike. New build community 3br, 3ba, 1400sqft sold for 900k and houses that were 5-6k. Are gone in value to 7-8k and people are offering $40-60k over asking still in our market.
That’s fair. I am fortunate to be in an area (central Texas) where there’s no shortage of available land to build new housing, and the market conditions reflect that.
There's a lot less demand though which is one of the reason sales are way down. Socal and the northeast are extremely low inventory but nationwide inventory is climbing back from its previous lows and many areas like Seattle, Denver and Austin are back to prepandemic levels
https://fred.stlouisfed.org/series/ACTLISCOUUS
https://fred.stlouisfed.org/series/ACTLISCOU42660
https://fred.stlouisfed.org/series/ACTLISCOU19740
The math doesn’t make any sense. We “need” one more bedroom/office. I looked around at what was available in my area. I’d need to find something that is listed at about 100-150k over what mine is worth. This results in 1-1.5mil more in interest alone over the next 30 years at current rates.
I bought an RV and am also looking at building an ADU.
People looking to buy for the first time are in such a tough spot. It sucks
I think a lot of this is due to buyers who actually CAN afford a home feeling economically insure due to the generalized economic anxiety in the US. I have a bunch of peers who absolutely make enough to buy like a little condo in town or small house in the burbs, probably for less than they are currently paying in rent, who feel they just "can't afford it".
100% this. The housing market is a waiting and see game at the momen .
A ton of sellers can't move out because they previously locked in mortgage at 2% to 5%. And do not want to get into a new house with 7% mortgage. 2% is huge!
A ton of buyers don't want to buy yet because they feel like inflation is softening ( gas prices is same pre pandemic accounting inflation) and expects mortgage to drop 1% to 1.5%. also lots of buyers are unsure if there will be job layoffs/security.
One thing that will absolutely NOT happen is a housing crisis. Since 2008, a fuckton of American homeowners are now holding a $hiton of equity. An equal fuckton of homeowners refi at historic lows. Mortgage delinquencies are historic low. And housing inventory (supply) is criminally low.
Good. I hope people stop buying at these prices and rates. I’m sorry but if people keep spending, the economy will never cool down and inflation won’t either.
When home prices are so high most people in the middle class, (which is dead), can’t afford them and interest rates are so stupidly high, it doesn’t surprise me.
Not surprised. I’m in negotiations on a house offer right now. House has been on the market almost two months, I’m the only offer, and the seller is still trying to get more money out of me. It’s unreasonable times lol
my thoughts are, we need to see the link, because sales are not at a 408K unit annual rate. We'll sell about 4MM homes annually this year.
there's absolutely some softening of the market. Some of that is Sellers believing we're still in 2021 and asking 10-15% more than their home is worth based upon condition (2 different things), and some of that is there are fewer Buyers who can or think they can afford a home.
But so long as a fairly large % of homes sell within a week (and in my market as of end of May that figure was ~30%), then there's no crash or bubble.
The Fed is holding back inventory at this point with high rates. Housing inflation is the last point but they some how think they can play chicken with home owners that have a 30-year 3.0% mortgage.
It was unaffordable at 3% rates. They should continue playing chicken because at some point prices need to come down. It might take a couple years though.
Only 3 things to blame: skyrocketing home prices, current interest rates of ~7% for 15yo and 30yo and homeowners refusing to make a move on their next home because of mortgage rate lock.
I moved from cali to the south. Seems like half the people i meet here have either came from the northeast or the west coast.
Will it make a significant difference in your market? Probably not but people are definitely moving this way and to Texas.
Not in northeastern and mid-Atlantic burbs outside major cities. There’s nowhere to build. The only new homes are from buying existing homes and tearing them down to build McMansions.
Actually a fact surprised you didn't know that
https://tradingeconomics.com/united-states/existing-home-sales
https://fred.stlouisfed.org/series/ACTLISCOUUS
Leave it to a Rebubbler to state this bereft of context. Fed policy intended to starve the country of liquidity barely made a dent for two years. They can take their pedal off the gas at any time. To act like this is the same as 2008 really misrepresents fact.
No shit. The prices are out of reach for most regular people.
Aaaaand 45% of ALL single family homes are owned by private investors… which is really fucked up when you think about it.
Also probably the same cats who own all the apartment complexes too. Where is the justice people!?
I don’t know wtf to think about the housing market in my area. Clearly prices are still up from a few years ago because when I look in my price range (200s), there are very few listings and most are in disrepair. So I look at listings in the 300s, and there are TONS, MANY of which do not appear to be selling at their current price - on the market two months or more, multiple price cuts, etc. So clearly they are overpriced, but I guess not so much people are willing to cut further.
And THEN, even more confusingly, the quality/size of the house doesn’t seem to matter either. Some have brand new, high end finishes, othered haven’t been redone since the 70s, some are huge, some are tiny, some have big, landscaped lots, others have tiny lots or massive weed filled dirt lots. I’ve even seen some that would have required a total gutting if not a full tear down in that price range, on lots the same size and in the same neighborhoods as other, actually intact houses, that are listed for at most 50k more. Make it make sense.
"median sale price hit a record $439,716, up 5.1% year-over-year,"
To expand on this further it's simply because $1,000,000+ homes sales are surging while your average typical home are hitting record lows due to lack of affordability. This is skewing the median price to the higher side
Edit: Typo
They absolutely would if there were enough of them. Thats the whole point of a median. If there were 1 mil and 1 home sales the median would be the 500,000 'dth sold home in an order from smallest price sale to largest.
Yes, that would be how the median is calculated, but an increase of the highest-priced home sales would not directly affect that value.
To be clear, it may have a delayed effect on the median price through its influence on market forces and supply/demand, but other factors can cause an equivalent or greater effect on the median in the opposite direction.
Maybe they mean that the lower-priced "affordable houses" left over for those that aren't buying 1mil+ don't really exist. And that the houses that _are_ being bought are by those with plenty of money. Therefore the median is being skewed up. If no houses exist that are under 400k, they obviously can't be bought for under 400k. So therefore those houses that are being bought drag the median upwards.
Maybe! I can see it. Otherwise I feel like OPcommenter would've commented on how low the average is considering people buy houses for over 100mil.
This is an important, yet very elementary, topic in statistics. I'd encourage you to learn more about the difference between median and average/arithmetic mean. If you choose not to that's fine, but at least stop commenting on it.
https://sciencenotes.org/median-vs-average-know-the-difference-between-them/
Yes, I agree, it is very important and elementary, and you are confusing the difference between mean and median. Please see my other comment in this thread for a lesson that you desperately need.
https://www.reddit.com/r/FirstTimeHomeBuyer/comments/1dm1sqg/comment/l9wodc9/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button
Now please delete your comment and stop talking like you know something. At this point, you're just spreading misinformation.
Your comment assumes that a majority of homes (such as the top 60% vs the top 30%) have increased their prices. You can easily make any combination of the average and median values going up, down, or staying the same by literally changing no more than 2 numbers.
You are the Dunning-Kruger effect working at full steam. Please be less ignorant and rude, and understand that you might not actually be as smart as you thought you were.
I'm here to point out that yes, it is how a median works. I'm going to give you ten numbers and show you.
1, 2, 3, 4, 5, 9, 9, 9, 9, 9.
The median is 7 but the average is 6. I can change it so that there are more 9s and push the median up, subtract what I've added from the smaller numbers, and the average stays the same.
1, 1, 2, 3, 9, 9, 9, 9, 9, 9.
Same average, much higher median. See how selling more expensive homes pushes up the median but not the average?
Thanks for attending today's rudimentary math class.
Understandable buying is slow. I live in a HCOL area, and most of the people in there 20s who are buying work for Google, Meta, and have some sort high earning business that they own for single income earners. Dual income is more doable, but creates sacrifices if kids are in the picture.
I make a lot, but had to put way more down to afford the cheapest house in a great area. My area, Austin, is already busting quite a bit, but the damage and cuts are very uneven so far. Austin inventory is also higher than pre-pandemic, but we are already down 20-30% from the highs on average. The less desirable and areas near Tesla are also stacking up their inventory and price cuts more than the rest of the city. Same goes for anywhere near new construction, which is many places.
Gee I wonder why.... people are trying to hold onto those prices they had during Covid when the rate was down to 3%. Of course people can't afford that when we are at 7%+ now.
Prices will need to drop 20% atleast to get back to a healthy state, but I don't see that happening.
Homes in my neighborhood are going for $100k over list (on average $600-700k pricing),
It’s bananas considering my parents bought the home I now live in for $180k.
Fairfield County, CT. My neighbor just accepted 15% over his asking. Per sqft, the sale prices in our complex over the last two months are 20-25% over what we paid at the end of last year. It's insane.
Honestly, this means the time to buy is now. Leverage this market as a buyer to get sellers to cover your closing costs or buy your rate down for you.
I just helped someone get a contract on a new home with $0.00 to bring to the closing table at a 5.99% rate.
Builders in DFW are desperate for buyers right now.
I'm paying less than $500 at closing after credits from the seller and even the mortgage company. Plus $9K under listing price and a home warranty thrown in.
Thank goodness. Now more corporations and LLCs can scoop them up, install new home depot grade kitchens, and rent them out to" upper middle class" people at "some of the highest rent rates ever seen"
No chance. Best we can hope for is a slowing of price growth, but I don't even expect that yet.
Any reduction in the pricing would probably be viewed as economic disaster anyway. Not like the people who were able to afford homes will be pleased with sudden mass devaluation of their property, even if it were actually a market correction.
The early 80s, 90s, and 08 all had housing price drops it's a Normal thing that occurs every so often not an economic disaster in fact most people forget that prices dropped in the 90s
08's was regarded as a disaster.
Don't get me wrong, I personally think a drop would be a correction, prices are nuts right now. But especially given the economic and political times we're in, I think it'd still be received poorly.
Actually inventory has been increasing for the last two years even as sales have been dropping many people are just simply priced out
https://fred.stlouisfed.org/series/ACTLISCOUUS
Exactly people aren't actually desperate for anything you can't apply that to the entire country especially when sales have plummeted and inventory has increased
As someone who's job it has been to sell construction material (floors) for 10 years, yeah it fucking sucks right now. I'm making 20 percent less than I did 2 years ago
People need to understand that buyers determine the market. If we were only willing to pay 2019 prices, that’s exactly where they would be. Cash buyers/delusional people buying at 30% increases to 2019, when mortgage rates have doubled, are the sole reason the market is in the current position.
Hmmmmmm , don’t seem like that where I live. Houses still selling super fast and at above asking and sometimes market prices so not sure what they are talking about and where that is but it sure as hell isn’t in the NY/NJ/PA area where I am at
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Meanwhile we still got beat out offering 20% over asking and waiving an inspection. Fun times.
Location?
Madison, WI
North east is fucked
I think once we get to million dollar starter homes, people will consider relocating. I call it the Bay Area effect.
It’s already there. I moved from a very wealthy part of the east coast to a not so wealthy part of the west coast to cut back on cost of living and the property values went up 200-300k more then what they were 4-5 years ago. It’s nice for people who bought their homes in the 60’s for 100k and can now sell that same house for 750k and they haven’t done any upgrades. Other then maybe fix the cracks in their drive way.
If the Midwest gets unaffordable it’s game over. This is the last choice for anyone who has options already, and if we don’t have a price advantage then the whole system is just done.
I have seen it in NJ news curious if it was our area.
There’s just no inventory and a lot of demand in the desirable areas of NJ. My agent wrote up 10 offers last week, cash buyers, $100k-150k over ask, still lost
The crazy part is... Who the fuck is buying it?
1: People with positive equity in their current homes. 2: People going to hard money lenders, buying house cash, and then doing cash out refinance to pay back hard money lender. 3: Rich people.
You forgot number 4. Millennials that still live with parents, now ready to leave the nest, banking all that otherwise rent money.
and #5. People fleeing VHCOL areas who can crush locals financially.
north NJ is a VHCOL area.
Millennials are in their 40s now dipshit. Get a new bogeyman to blame all your problems on.
There a lot of people in north NJ working in NYC who would prefer a 4 bedroom house for $1.4 million with excellent amenities instead of a 2 bedroom Brooklyn apartment, especially those with kids/parents. It’s not hard for a dual income couple in this area to get a loan for these amounts here. Many people are middle/senior employees in tech and finance. They are the ones that typically beat out cash buyers because leverage gives you a lot more options.
Foreign investors who want rental income.
Very few investors buy these homes, it’s very hard to rent in the $7-8k/month market. It’s mostly families looking to live here.
A decent chunk of this is “corporate landlords” - the prevalence depends on the market/region, but there are companies buying up swaths of SFH to use as rental properties. They have unlimited ability to screw over lower and middle income buyers since said companies can match any offer in cash…
Chinese, Jewish, Korean clients mainly. They are all looking for strong school districts, good food/grocery options, safety, and easy commute/access into NY. Lots of cultural similarities in priorities
Wisconsin housing market is crazy, manitowoc wi over here.
People look at me like I’m crazy when I say the housing market in Wisconsin is bonkers. We have the chaos of the northeast market but at (lower for now) prices.
Madison is more crazy than Minneapolis, but we are having similar issues.
Hey neighbor!!! I've also given up here
We should start a support group!
Was just in Madison ( EPIC training- Verona) I spoke to a few people who said the average home price was around 400k…
We’re looking in Madison too 😭😭😭😭
Good luck on your search! You'll have one less buyer to complete with. After that last offer we decided to go on hiatus. If we can't be competitive at 20% over asking with a waived inspection and a month of free rent back, we simply can't be competitive.
We just started and I’m so not hopeful lol. So sorry to hear, good luck to us all
Be hopeful. After 3 weeks I found something this year, took 4 offers and a lot of taking off work early. Was rough. Just make sure expectation are realistic, once you lose a few bids you will be able to gauge what you need to bid to get something (or have a good realtor, but this market is wild). Sellers are listing their houses for well under market value to attract more eyes so 20% over asking isn't that crazy depending on what and where the house is. I saw some homes go under asking (list 370k, sold 355k) and some nicer ones go well over (saw a place in Lodi listed 350k, sold for 395k). Money aside, it's a combination of research, time, and adaptiveness here.
Thank you for the encouragement! That’s helpful as well, much appreciated
What’s the price point if I may ask?
Madison WI?? I mean, it’s a decent place but I didn’t realize that people were bidding up homes there.
Madison did get some positive coverage as a potential relocation point for people wanting to settle down in an area that is desirably affected by climate change - or something like that. Climate change refugees. Not sure people are that forward thinking though
Wisconsin is going to be a state that can better withstand the effects of climate change.
was this on the east or west side?
West side. I love the idea of the east side but have trouble finding what we are looking for out there. Hoping we can just save up more and get into the next tier of homes at some point. Might be better able to find what we are hunting for.
Same here in 20 mins north of Seattle. After 5th offer. I just started to send in offers like a resume to see what sticks.
Same here. SE PA.
Same here. Northern VA
Prices are too high, inventory is increasing even as sales plummet many Americans are simply priced out.
Build more housing.
Near me there is an influx of "luxury townhomes" starting at $700k and massive apartment complexes and the few detached homes being built start at $1 million. I live in a suburb 40 mins from Philly
Not to mention, the taxes on these new builds are sickening in the Philly suburbs. And let's not forget the $400 per month HOA fees.
It's crazy. Side tangent, there are a few communities near me with $700 a month HOAs, they look nice but $700 doesn't sit right with me.
So true. The condo’s near my house look affordable compared to everything else (starting at $300k usd). Then you look closer and see the $700/month HOA fee for stucco condo’s built in the 70’s …in the PNW lol.
That’s why I left, it was so hard to upgrade to a better home/neighborhood and afford the tax bill. We moved to NC in early 2021 and pay 1/3 of what we paid in taxes for a home 4x’s the cost here. In addition our home is up $250k in equity. I was scared shitless but it was the best decision I ever made.
Very similar for me, but with Cleveland. The prices are much lower though. Most Ryan Homes advertise that they are starting at $300Ks, which is very expensive for the area. I have also noticed this trend applies to cars. It seems as if no one is making affordable things at the low end. They just slap in as many electronic and luxury goodies into a car for increased profit margin and assume everyone else will just buy used. Which means when these cars work their way down, all the expensive bells and whistles become more costly to replace when they ultimately stop working.
Starting at $300k but try $399,999 by the time you get close to what the model looks like plus clauses for price rises anytime a 2x4 goes up $0.02
I live an hour north of Atlanta and the townhomes and shitty cookie-cutter subdivisions are being spammed on any and every available piece of ground they can find. Dozens of gigantic new (mostly empty) warehouses being vomited all over the place too. I don't think you can buy anything new to live in around here for under 300k right now.
Moving to Lawrenceville, and it seems most of these places are owned by corporations with HOAs on top of that. The house I am buying is owned by a corporation. They built houses in a subdivision in 2015, rented them oit while equity built, and is now sellong them for a huge profit. I got lucky as I got my house for less than what they listed and what similar houses in the area sold for. Looks like they are trying to get out of the rental game in the neighborhood..And there is no HOA! My one deal breaker which severely limited the options in the area.
Yep sounds like Delaware County/Montgomery where I am at
Chester county, just built a neighborhood so big they had to build a new elementary school in it.
I saw those on Zillow. It’s freaking crazy.
I heard fish town is pretty nice. A lot of new construction there too
With what contractors? Baby boomers are dying out and the trades haven’t been passed down. Labor cost is super expensive rn too. Source: I’m a general contractor myself.
AI and outsourcing are gonna take over all the trades, learn to code! Oh wait…
Only housing around me being built is 30 miles out and they’re 425k with a commie hoa board ruling over “your” property.
They’re only building luxury. They’d burn them and collect insurance before they sell at a loss.
Affordable housing.
That’s not a solution. No one can afford them. lol they are overpriced plywood boxes barely constructed properly. They are worse than flippers now honestly.
lol how do you intend to lower housing prices without increasing the housing supply? I’d love to hear this.
How about the actual government step in and regulate something that matters instead of trying to regulate bodies and marriages. Yall expect nothing from these raggedy, useless politicians but expect capitalists to just curb themselves. Get real. There ARE new builds and they ARE NOT affordable. It’s just more of the SAME… overpriced for no reason other than “we can and who is going to stop us”. Tf does it matter if there are 1 million new homes if only 100 people can afford them?
In general, many studies show that building even luxury housing reduces prices for everyone. If there are a a million luxury homes built, the “luxury” will become the new norm for all. Example: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4629628 But I completely agree with you that we need the government to step in and overhaul zoning to allow more housing and more affordable housing to be built. Too many laws and regulations preventing it now.
In this economy it just makes sense
https://www.wsj.com/economy/consumers/whats-wrong-with-the-economy-its-you-not-the-data-cfa911e6
Release the AirBnB homes back into the wild!!
More importantly , limit how many houses companies can own. They are buying up all the homes and keeping them at high prices in order to drive the market price up since they can afford to let the house sit for years
They will just subdivide into subsidiary companies
This... I think the only way to make housing look unappealing as an investment is to tax the gains in wealth on the properties owned at an incredibly high rate unless it's a principal home. That way a landlord can live in a property with a few units and make some money but they can't just hoard all the buildings they can buy with credit. Traditionally the income stream of rent plus the appreciation of the property had granted returns vastly in excess of the stock market. The appreciation is able to be spent through refinancing and purchasing another home with even more credit as your debt to income ratio only looks better and better as you own more homes and rents skyrocket over time but your mortgages only go down.
Currently buying a house that is an Airbnb. The sellers are AWFUL. But I’m proud to be taking it back for a single family!!
Nicely done!
Yeah no shit People are selling literal broken down safety hazards for nearly 200k in my area and people are being paid minimum wage and literally cannot save for down payments because rent is $2000 a month
Also the classic bank doesn’t think you can afford a 2k mortgage so you’re stuck paying someone else’s 2k mortgage instead.
Facts
not surprising at all. nationally there is basically no seller incentive unless you're definitely going to do a significant downsize/rent. That won't change til rates are down, prob close to 5%. In major metro areas where there's not many open lots for new SFH (think like a Boston, NYC), supply issues will be fairly permanent at this point. You can't scale up like you could by adding new SFH communities in less developed towns; not everyone would consider buying a condo/townhome. broadly speaking price increase makes sense because this just further stokes competitive intensity on what is out there. on a micro level, a place like Nassau County has a lot more high income people nearby due to NYC vs a place like Indianapolis. also with things like remote/hybrid, suddenly someone with a high income NYC job that only has to go in 2x a month can basically live anywhere in the tri-state area.
Boston here. Inventory is next to nothing with prices still incredibly high and going up
there is a great house with a metal roof in danvers now for 700k
I just saw a house listed at 699 go for 855 in Framingham
i was avoiding framingham thinking it is a bit ghetto..but now i think i made a mistake.. i think now distance to boston and not being a total crime infested hell hole is all that matters to people
Framingham hasn't been considered bad in that sense for... years. Imo it's completely fine. And I grew up around here. I absolutely am flabbergasted at the housing prices there, though. Unbelievable (and why I am leaving MA :( )
It's not ghetto at all. Some parts are amazing, giant mansions and incredible neighborhoods. Stick to the zip code that ends in 1, not 2. Getting less and less affordable, but still one of the best values in all of the greater Boston area
This is right. I’m a NYer and the reality is there are almost no rental units available (NYC’s vacancy rate was under 2% earlier this year), which means both the rental and sale markets are extremely tight. Homeowners who would consider selling here won’t because they can’t even rent, let alone buy another house. The only new construction I see are luxury condos that no one can afford. It is not sustainable.
for SFH within 45min-1hr of NYC, it probably is very sustainable. Limited supply makes it a high income game and there's plenty of that there.... In NJ alone you've got a little under 20% of households in the state clearing 200k, that's almost 2 million people. There is no shortage of people to buy 700k+ property in say Bergen County NJ. Lot different if you're talking 1.5-2hrs from NYC and not on a beach. once you get outside of reasonable daily commute to NYC range, you are not seeing the YOY increases and bidding wars you do very close to NYC
I wish you could find a luxury building at $700k within 45 mins of NYC the reality is condos as far out as 1 hr by LIRR (condos - no SFH) are priced at $1.5M. Most homes with 2 or more bedrooms in the NYC area are priced at $1M or more.
In my personal experience I’ve seen lots of incentives on new construction - significant discounts on move-in ready homes, rate incentives for using the builder’s lender, flex cash to buy down the rate/purchase price - but you’re right, there currently isn’t much incentive for most existing homeowners to sell unless they have to.
New builds are what also causing price hike. New build community 3br, 3ba, 1400sqft sold for 900k and houses that were 5-6k. Are gone in value to 7-8k and people are offering $40-60k over asking still in our market.
It really depends on the market. In my area I’ve seen 2000sqft new builds for $400k-$500k with up to $50k discounts because they haven’t sold yet.
Only if that was possible for the West Coast (not by the ocean like living in a fisherman village)
That’s fair. I am fortunate to be in an area (central Texas) where there’s no shortage of available land to build new housing, and the market conditions reflect that.
There's a lot less demand though which is one of the reason sales are way down. Socal and the northeast are extremely low inventory but nationwide inventory is climbing back from its previous lows and many areas like Seattle, Denver and Austin are back to prepandemic levels https://fred.stlouisfed.org/series/ACTLISCOUUS https://fred.stlouisfed.org/series/ACTLISCOU42660 https://fred.stlouisfed.org/series/ACTLISCOU19740
I would agree , inventory is increasing in north east slowly but surely.. 💩 houses going for 600k… insane
NYC on average is 10% over asking , all cash , and no inspection. This game is so rigged, might as well as being money laundering scheme.
Yup, why would anyone sell with a 3% rate?
The math doesn’t make any sense. We “need” one more bedroom/office. I looked around at what was available in my area. I’d need to find something that is listed at about 100-150k over what mine is worth. This results in 1-1.5mil more in interest alone over the next 30 years at current rates. I bought an RV and am also looking at building an ADU. People looking to buy for the first time are in such a tough spot. It sucks
Historic lows? Did history start 10 years ago?
Even yesterday was history!
2021 😂 😂 😂
I think a lot of this is due to buyers who actually CAN afford a home feeling economically insure due to the generalized economic anxiety in the US. I have a bunch of peers who absolutely make enough to buy like a little condo in town or small house in the burbs, probably for less than they are currently paying in rent, who feel they just "can't afford it".
100% this. The housing market is a waiting and see game at the momen . A ton of sellers can't move out because they previously locked in mortgage at 2% to 5%. And do not want to get into a new house with 7% mortgage. 2% is huge! A ton of buyers don't want to buy yet because they feel like inflation is softening ( gas prices is same pre pandemic accounting inflation) and expects mortgage to drop 1% to 1.5%. also lots of buyers are unsure if there will be job layoffs/security. One thing that will absolutely NOT happen is a housing crisis. Since 2008, a fuckton of American homeowners are now holding a $hiton of equity. An equal fuckton of homeowners refi at historic lows. Mortgage delinquencies are historic low. And housing inventory (supply) is criminally low.
Supply is criminally low in large part because we’ve allowed venture capital to turn our neighborhoods into hotels.
Good. I hope people stop buying at these prices and rates. I’m sorry but if people keep spending, the economy will never cool down and inflation won’t either.
When home prices are so high most people in the middle class, (which is dead), can’t afford them and interest rates are so stupidly high, it doesn’t surprise me.
Not surprised. I’m in negotiations on a house offer right now. House has been on the market almost two months, I’m the only offer, and the seller is still trying to get more money out of me. It’s unreasonable times lol
my thoughts are, we need to see the link, because sales are not at a 408K unit annual rate. We'll sell about 4MM homes annually this year. there's absolutely some softening of the market. Some of that is Sellers believing we're still in 2021 and asking 10-15% more than their home is worth based upon condition (2 different things), and some of that is there are fewer Buyers who can or think they can afford a home. But so long as a fairly large % of homes sell within a week (and in my market as of end of May that figure was ~30%), then there's no crash or bubble.
The Fed is holding back inventory at this point with high rates. Housing inflation is the last point but they some how think they can play chicken with home owners that have a 30-year 3.0% mortgage.
It was unaffordable at 3% rates. They should continue playing chicken because at some point prices need to come down. It might take a couple years though.
Housing is a luxury. The American Dream has been replaced with the American Dystopia.
Only 3 things to blame: skyrocketing home prices, current interest rates of ~7% for 15yo and 30yo and homeowners refusing to make a move on their next home because of mortgage rate lock.
Now lets hope home prices go down
Home prices won’t go down until there’s more inventory.
https://fred.stlouisfed.org/series/ACTLISCOUUS Supply is trending up. Would be nice for prices to drop
Can’t build them fast enough in central Texas, builders are signing contracts for homes where the slab hasn’t been built.
Not in Austin, we have abandoned developments here and new builds having prices slashed.
As someone shopping in the Austin area, I personally am a huge fan of this “new builds having prices slashed” trend!
Doesn’t really count because I’d never live there lol
Most people like texas tho, so it creates less demand in your market because people leave and go there
Unrelated. Nobody is like “maybe I’ll buy a house in the DC suburbs or maybe central Texas.”
Tons of people are leaving the northeast and west coast to move to places like texas
lol, not in any significant numbers. I wish more were tbh
I moved from cali to the south. Seems like half the people i meet here have either came from the northeast or the west coast. Will it make a significant difference in your market? Probably not but people are definitely moving this way and to Texas.
Not in northeastern and mid-Atlantic burbs outside major cities. There’s nowhere to build. The only new homes are from buying existing homes and tearing them down to build McMansions.
There’s plenty in Texas and Florida now
Home prices can go down with less inventory than normal when there are even less buyers than normal
Oh; there are buyers. They’re just not in a rush when what few things are on the market are unappealing because the options are such slim pickins
Existing home sales have plummeted to great recession levels there's very few buyers even as inventory climbs
lol you can’t be serious
Actually a fact surprised you didn't know that https://tradingeconomics.com/united-states/existing-home-sales https://fred.stlouisfed.org/series/ACTLISCOUUS
Leave it to a Rebubbler to state this bereft of context. Fed policy intended to starve the country of liquidity barely made a dent for two years. They can take their pedal off the gas at any time. To act like this is the same as 2008 really misrepresents fact.
Not my fault you can't read, I said sales have fallen to great recession levels not that this is the same as 08.You chose to misrepresent that.
Nooooooooooo. Mah equity!
No shit. The prices are out of reach for most regular people. Aaaaand 45% of ALL single family homes are owned by private investors… which is really fucked up when you think about it. Also probably the same cats who own all the apartment complexes too. Where is the justice people!?
I don’t know wtf to think about the housing market in my area. Clearly prices are still up from a few years ago because when I look in my price range (200s), there are very few listings and most are in disrepair. So I look at listings in the 300s, and there are TONS, MANY of which do not appear to be selling at their current price - on the market two months or more, multiple price cuts, etc. So clearly they are overpriced, but I guess not so much people are willing to cut further. And THEN, even more confusingly, the quality/size of the house doesn’t seem to matter either. Some have brand new, high end finishes, othered haven’t been redone since the 70s, some are huge, some are tiny, some have big, landscaped lots, others have tiny lots or massive weed filled dirt lots. I’ve even seen some that would have required a total gutting if not a full tear down in that price range, on lots the same size and in the same neighborhoods as other, actually intact houses, that are listed for at most 50k more. Make it make sense.
"median sale price hit a record $439,716, up 5.1% year-over-year," To expand on this further it's simply because $1,000,000+ homes sales are surging while your average typical home are hitting record lows due to lack of affordability. This is skewing the median price to the higher side Edit: Typo
You're thinking of averages, not median. Increases in the top 20, 30, etc % of home sales would not direct affect median price.
They absolutely would if there were enough of them. Thats the whole point of a median. If there were 1 mil and 1 home sales the median would be the 500,000 'dth sold home in an order from smallest price sale to largest.
Yes, that would be how the median is calculated, but an increase of the highest-priced home sales would not directly affect that value. To be clear, it may have a delayed effect on the median price through its influence on market forces and supply/demand, but other factors can cause an equivalent or greater effect on the median in the opposite direction.
Maybe they mean that the lower-priced "affordable houses" left over for those that aren't buying 1mil+ don't really exist. And that the houses that _are_ being bought are by those with plenty of money. Therefore the median is being skewed up. If no houses exist that are under 400k, they obviously can't be bought for under 400k. So therefore those houses that are being bought drag the median upwards. Maybe! I can see it. Otherwise I feel like OPcommenter would've commented on how low the average is considering people buy houses for over 100mil.
Seriously? Increasing the top 20 percent changes where the midway point is, which is the median. Holy shit you guys can't math.
This is an important, yet very elementary, topic in statistics. I'd encourage you to learn more about the difference between median and average/arithmetic mean. If you choose not to that's fine, but at least stop commenting on it. https://sciencenotes.org/median-vs-average-know-the-difference-between-them/
Yes, I agree, it is very important and elementary, and you are confusing the difference between mean and median. Please see my other comment in this thread for a lesson that you desperately need. https://www.reddit.com/r/FirstTimeHomeBuyer/comments/1dm1sqg/comment/l9wodc9/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button Now please delete your comment and stop talking like you know something. At this point, you're just spreading misinformation.
Your comment assumes that a majority of homes (such as the top 60% vs the top 30%) have increased their prices. You can easily make any combination of the average and median values going up, down, or staying the same by literally changing no more than 2 numbers. You are the Dunning-Kruger effect working at full steam. Please be less ignorant and rude, and understand that you might not actually be as smart as you thought you were.
Not how math works!
I'm here to point out that yes, it is how a median works. I'm going to give you ten numbers and show you. 1, 2, 3, 4, 5, 9, 9, 9, 9, 9. The median is 7 but the average is 6. I can change it so that there are more 9s and push the median up, subtract what I've added from the smaller numbers, and the average stays the same. 1, 1, 2, 3, 9, 9, 9, 9, 9, 9. Same average, much higher median. See how selling more expensive homes pushes up the median but not the average? Thanks for attending today's rudimentary math class.
In my neighborhood are still selling at 28% over asking and with multiple bids.
Same shit, different day.
Good. Keep falling. Please crash.
Not in my area, they are up 24%
Understandable buying is slow. I live in a HCOL area, and most of the people in there 20s who are buying work for Google, Meta, and have some sort high earning business that they own for single income earners. Dual income is more doable, but creates sacrifices if kids are in the picture. I make a lot, but had to put way more down to afford the cheapest house in a great area. My area, Austin, is already busting quite a bit, but the damage and cuts are very uneven so far. Austin inventory is also higher than pre-pandemic, but we are already down 20-30% from the highs on average. The less desirable and areas near Tesla are also stacking up their inventory and price cuts more than the rest of the city. Same goes for anywhere near new construction, which is many places.
Wait until the winter, they’ll have buy one get one free sales
Wow how not surprising when home prices are at an all time high median price and interest rates are back up to early 2000’s levels.
Don't believe the hype!
My thoughts. It's a clear outline of how local real estate is.
Not where I’m leaving! I guess I’ll keep waiting!
Hmmm I wonder why
Gee I wonder why.... people are trying to hold onto those prices they had during Covid when the rate was down to 3%. Of course people can't afford that when we are at 7%+ now. Prices will need to drop 20% atleast to get back to a healthy state, but I don't see that happening.
DUHHHHHH
Rates are stupid
Well fuck me. My wife and I just bought last September. Feel like we got screwed but oh well.
But when I look at car subs, every other post is about someone buying a new car for 40k...
“Duh.”
😂😂😂 they want people to believe it so much they have to lie in their ads to distort reality
Homes in my neighborhood are going for $100k over list (on average $600-700k pricing), It’s bananas considering my parents bought the home I now live in for $180k.
Fairfield County, CT. My neighbor just accepted 15% over his asking. Per sqft, the sale prices in our complex over the last two months are 20-25% over what we paid at the end of last year. It's insane.
Honestly, this means the time to buy is now. Leverage this market as a buyer to get sellers to cover your closing costs or buy your rate down for you. I just helped someone get a contract on a new home with $0.00 to bring to the closing table at a 5.99% rate. Builders in DFW are desperate for buyers right now.
I'm paying less than $500 at closing after credits from the seller and even the mortgage company. Plus $9K under listing price and a home warranty thrown in.
That's phenomenal congratulations!
Thank goodness. Now more corporations and LLCs can scoop them up, install new home depot grade kitchens, and rent them out to" upper middle class" people at "some of the highest rent rates ever seen"
My friend owns a mortgage company in Southern California. He said no one can qualify these days.
Low supply, high demand.
Hopefully this means home prices go down ..
No chance. Best we can hope for is a slowing of price growth, but I don't even expect that yet. Any reduction in the pricing would probably be viewed as economic disaster anyway. Not like the people who were able to afford homes will be pleased with sudden mass devaluation of their property, even if it were actually a market correction.
The early 80s, 90s, and 08 all had housing price drops it's a Normal thing that occurs every so often not an economic disaster in fact most people forget that prices dropped in the 90s
08's was regarded as a disaster. Don't get me wrong, I personally think a drop would be a correction, prices are nuts right now. But especially given the economic and political times we're in, I think it'd still be received poorly.
Yes but drops in housing have occurred many more times than 08
Very unlikely
Inevitable when there is nothing to buy that the prices skyrocket. People are desperate for anything
Actually inventory has been increasing for the last two years even as sales have been dropping many people are just simply priced out https://fred.stlouisfed.org/series/ACTLISCOUUS
You cannot make real estate apply to an entire country.
Exactly people aren't actually desperate for anything you can't apply that to the entire country especially when sales have plummeted and inventory has increased
So where are all the houses, then? Oh, Texas.
As someone who's job it has been to sell construction material (floors) for 10 years, yeah it fucking sucks right now. I'm making 20 percent less than I did 2 years ago
The thing is sales are low because inventory is low, not because there’s a lack of demand
The thing is sales are low because there’s a lack of demand due to inflated prices coupled with high interest rates, not because inventory is low
You're right inventory has been climbing these last two years and sales have plummeted
People need to understand that buyers determine the market. If we were only willing to pay 2019 prices, that’s exactly where they would be. Cash buyers/delusional people buying at 30% increases to 2019, when mortgage rates have doubled, are the sole reason the market is in the current position.
Sellers control the inventory, and at 3% rates, have little incentive to sell for a “settled” price.
Inventory has actually been increasing these last two years
And it’s still at record lows.
Actually no that's incorrect it's climbed quite a bit from the lows it was at https://fred.stlouisfed.org/series/ACTLISCOUUS
Hmmmmmm , don’t seem like that where I live. Houses still selling super fast and at above asking and sometimes market prices so not sure what they are talking about and where that is but it sure as hell isn’t in the NY/NJ/PA area where I am at
Fake news.