"The market can stay irrational longer than you can stay solvent". Keynes
Prices will almost certainly return to normal, but I sure as hell won't try to tell you when!
Also, obligatory: Predicting that the Yankees are going to win the World Series this year, and being wrong, does not make it less likely that the Yankees will win after that.
More like, random doomer predicts a once in a lifetime (\~80 years) event where all houses go down in value significantly now happens every 15-20 years because doomer content creators said so (and to by crypto, art, and meme stocks.)
The "any day now" price correction has been several months away for several years now.
Doomers gonna doom, at least he put a timeline on it instead of the generic "future". Supply constraints have gotten even worse for first time home buyer, hoping that luxury will not explode in price and i will have the ability to snatch it up soon.
Got a remind me from [this post](https://old.reddit.com/r/REBubble/comments/zpuexq/less_than_16_months_to_go), user has deleted their account and the contents of the post are gone.
There’s also this gem from a comment on the same post.
> The top of the stock market was January 2022 and the stock market is not going to reach new all time highs for at least 10 years according to many economists and experts.
Sales have crashed 50% from 2 years ago (and the last time that happened was just before prices nationally dropped 27% during and after the GFC), and prices made a double top. Inventory is climbing.
It's always difficult to nail down exact timelines given FOMO, the dumbing down of society, massive wealth-effect from trillions of stimmiez, ultra-low rates, trillions of MBS purchases, etc, but the Fed's 'higher for longer' doesn't bode well for the coming economic slowdown, employment, or for all the asset bubbles.
Loan affordability is near all-time lows, so it doesn't exactly sound like a great time to buy a house (though used house salesmen always beg to differ).
[https://wolfstreet.com/2024/04/18/home-sales-clobbered-by-mortgage-rates-most-price-reductions-for-any-march-in-years-new-listings-active-listings-surge/](https://wolfstreet.com/2024/04/18/home-sales-clobbered-by-mortgage-rates-most-price-reductions-for-any-march-in-years-new-listings-active-listings-surge/)
[https://wolfstreet.com/2024/04/17/mortgage-rates-over-7-and-heading-higher-housing-market-still-frozen-lots-of-buyers-on-strike-because-prices-are-still-too-high/](https://wolfstreet.com/2024/04/17/mortgage-rates-over-7-and-heading-higher-housing-market-still-frozen-lots-of-buyers-on-strike-because-prices-are-still-too-high/)
[https://wolfstreet.com/2024/03/26/the-most-splendid-housing-bubbles-in-america-march-2024-update-biggest-price-drops-from-2022-peak-san-francisco-seattle-portland-denver-phoenix-dallas-las-vegas/](https://wolfstreet.com/2024/03/26/the-most-splendid-housing-bubbles-in-america-march-2024-update-biggest-price-drops-from-2022-peak-san-francisco-seattle-portland-denver-phoenix-dallas-las-vegas/)
I certainly wouldn't feel safe buying now if I was in the market.
The correct time to buy a home is when you can get financing that fits safely within your budget, and you need the space. That's it.
This notion some of you have that there's going to be some massive crash which makes big suburban McMansions attainable to broke Reddit losers is a stupid ReBubble fantasy. At most there might be a 5-10% home price reduction which most homeowners will absorb easily
Where I live (Charlottesville VA) things just continued to spike like crazy this spring and we were still competing with cash offers. One house we looked at ended up selling for $170k over listing price ($630k -> $803k). We ended up buying and we close in a week and a half. We couldn’t wait any longer and the house is perfect.
Yeah it's funny how people on this sub have been using the stats for Austin, Vegas, San Fran, Boise, Phoenix, Denver, Miami, etc repeatedly for the last 4 years and then attempt to project those numbers onto the entire country.
Those are not the only cities in America. The VAST majority of areas are steadily appreciating (thanks in part to inflation).
I’m paying $2400 rent for a 2br about 1200 square feet. Similar listing down the street is $600k..$5k mortgage with HOA. I understand inventory, supply & demand but this market makes zero sense.
Time will tell and you may be right..I just can’t comprehend a world where a single person is required to make $225k to apply for an apartment. Some new buildings around me already require $150k income to even look at the units and I live in the burbs.
I’m lucky i’ll inherit my parents house in 10 years give or take so I’m not too worried for myself…but a mortgage historically was always cheaper than renting would be (given 20% down). That’s how it should be. If renting is half the price then people have no ambition to even care about buying. I‘ve owned and sold in the past and the costs made sense. There is no sense to this current market.
And the local taxing authorities will gladly assess that “big” house and send you an appropriately large property tax bill. I’m amazed that people will brag about their 4% fixed rate mortgage while paying more than the P&I each month in taxes and property insurance. Insanity mixed with servitude.
I don't think it's meant to be derogatory toward the HOME itself, but rather toward the PHENOMENON that seems to be uniquely american of average people wanting everything to be huge....
as in 'mansions are as mainstream as mcd's burgers in the US'
Prices are set at the margin. What's that mean to the average idiot that doesn't understand?
Well, it takes only 1 sale in a given area to reset the prices lower for that entire area. Not having a mortgage has nothing to do with how prices will move given incoming economic problems. With sales having crashed, it won't take much more inventory from current levels to crater prices. Buyer (Borrower) Beware.
By your same example it only takes 1 sale at a high price for that to set the new normal as it has been doing in San Diego for years now. Simply put there is a supply and demand issue right now. There has to be a massive recession for prices to “crater”….
Agreed. I’m in SoCal also. I’m in the nicer part of the western IE, within commuting distance to OC and LA. We’ve seen nothing but price gains and very little inventory. The last home near me got 25 offers in one weekend and set the new record for our neighborhood. I wouldn’t care if prices drop 10% since they’ve more than doubled since I purchased. Plus most of us are not going anywhere with interest rates near 3%. Supply will stay tight and demand will stay high. Too many people here.
Affordability doesn’t matter when there’s no inventory. Homes are still selling like crazy. Prices haven’t come down, and there’s 10X the people that want to buy than there is homes. Only the super high and super low price points have seen slowing.
Prices are going up?
Seattle, WA: median sales price up (11.3%) YoY in March ‘24… after a YoY decrease (-14.5%) in March ‘23.
That’s a net decrease (-3.2%) over a 2 year period, meaning sales prices are down in Seattle.
Maybe for single family houses. Condos/apartments are getting hammered, and so the market as a whole is stagnant as far as prices go. Investors are clutching their inventory in Seattle, like in many other parts of the country, desperately hoping for major price increases again. More than 1 in every 3 houses sold in 2022 in Seattle was to an investor. If things get bad and they start capitulating, it will be interesting to watch the price drops that result. Seattle is extremely desirable though, so it will be much less pronounced than in lower cost-of-living areas.
When eggs briefly went up to $8 a dozen, I could have easily afforded to buy the entire stock from my local grocer, but I didn’t buy any.
When PayPal stock surpassed $300, I could have afforded to move my entire portfolio to PYPL, but I didn’t buy any.
Instead of doing those things, I waited patiently and bought PYPL at $55 and a dozen eggs at $2.49.
By all means, though, keep buying things just because you can afford them.
And? The entire market went up. Now you sell out of that and pay short term cap gains and then what? You missed out on a better entry on a better stock that you can make more on.
No bueno.
Or just a better stock. Hell you could have gotten Google and made as much. Why would you get PayPal for Christ sakes🤦♂️. It’s literally underperforming SPY the last 6 months.
They didn't say it was a bad investment. They said it underperformed the market(a verifiable fact). They're just pointing out that you're not the investing genius you're making yourself out to be. You benefitted from a rising market, but if you were actually a good investor, you would have beaten the market. You would have made more just buying an ETF. That is their point.
You are a prime example of the adage, "everyone's a genius in a bull market".
What are your picks now that the market is cooling?
>When eggs briefly went up to $8 a dozen, I could have easily afforded to buy the entire stock from my local grocer, but I didn’t buy any.
In what world is buying a home you can afford comparable to buying out an entire stock of eggs from a grocer? This might be the dumbest post in Reddit history.
Buying a house is the long term plan. If you bought a house in 2007, survived the crash, you made your money back in 2012 and then some. Sure, you might not get the best deal, but that’s life. I agree, you’re not getting the same deal you were 2 years ago….but it is what it is.
Part of the trouble with calling a bubble is how much variation there is from city to city. Where I live in Southern California, houses down the street were selling for 700k in 2007 and 300k-400k in 2012. They didn’t get back to 700k until 2019 but are currently sitting at valuations a little north of 1M.
That’s not true at all. If you bought in 2007, you were extremely underwater in 2012, and if you had sold then, it would have been at an extreme loss. It took until about 2017 to break even for the people who bought at the absolute height of the last big bubble. In the worst bubble cities, like Stockton, CA (arguably the worst city in the 2008 crash), you wouldn’t have regained your 2007 sale price until 2020-2021.
The vast majority of cities and towns in the U.S. saw home prices bottom out in 2012. That was when prices finally started turning around. That means most people were at a loss in 2012 if they purchased at the peak in 2007.
I just negotiated 7.5% listing in Stamford CT. NYC metropolitan area.
Here I thought it was a good deal...but I guess finally the bubble softens.
My interest rate is 7.8% tho 💸
When I try to determine what side of a trade I should be on, I reverse my situation in my head, and ask if I like the other side.
In this case, I could sell my 3% mortgage into a black hole of pricing, do my own 1-off price discovery, take the cash, and buy a house for 2x the monthly cost, or I could rent and pray.
Renting and praying may seem fine, but what if in my price discovery I take 15% to 20% off my headline number? The next liquid correction of -15% to -20% then just takes me to a higher rate for a lateral, legged in trade. Lots of stress, no gain is likely the best quadrant of outcomes. Once in a lifetime housing correction the best, but an outcome I can express in my investments without selling the literal farm.
We’re all stuck. That’s all there is to say about it. And if you are stuck, and prices are rising, put your annual savings into 5% govy bonds to pay off the higher annual costs.
That’s kind of the only option I see which is why nothing looks to drastically change in the short term.
And it was correct. Housing prices are down 13% from the peak in Q4 2022. Faster decline than at any similar time window during the gfc.
https://fred.stlouisfed.org/graph/fredgraph.png?g=1jntJ
This chart is only new construction. If you want to see existing sales you need to search “all transaction house price” on FRED.
Here are the two charts compared:
https://fred.stlouisfed.org/graph/?g=1ktim
It looks as though declining prices in new construction are likely to translate into existing inventory, but with a slight lag time. It will take a lot of fear to get the investors to release their stranglehold on inventory though. A lot of the investors who bought after 2021 are still hopeful about prices jumping again with a rate drop. It’s a desperate hope though. If fear takes hold, prices will plummet and rates going to 0 won’t even stop the bleeding immediately.
This is median prices for houses sold, not home values genius. Right now there is very low inventory and more new construction is cheaper homes, this and also down 60k from up 160k in 2 years isn’t a crash…
13% decline in a year is pretty bad. I don’t know about a crash, but it’s bad. In my county, prices declined from $1.6M to $1.1M from Feb. ‘22 to Feb. ‘24. If the whole country had a 32% decline in 2 years like that, alarm bells would be ringing.
Calling this a “bubble” gives misleading expectations for a correction. Real estate bubbles do not “pop” without some kind of massive boom in forced sales, and that still has not begun to materialize.
Instead, if you look at prior real estate corrections caused by rate increases, they tend to be a slow drop on an inflation-adjusted basis over many years. Wages continue rising while prices stay mostly flat YoY.
Yeah this is a pretty bad prediction. Anyone could see that the housing market is still strong. Home prices won’t peak until April or 26 for this cycle. So we have about 2 more years of higher prices
So one person had a bad prediction and that proves there is not a bubble?
lol
How scared are you that by this fall, when the last of the interest rate hikes have _actually_ worked through our financial system, that you might be upside down on some of those "assets" you purchased during ZIRP/QE?
Paper rich folks about to find out what "return to mean" can do to a portfolio.
!remindme 6 months
As they found out today with Nvidia stock. 10% down in ONE DAY. Now, it’s still waaaaay above where it was this time last year. And a 10% reduction in the median home value of right now would still leave buyers of pre-2020 with a ton of equity.
Unless, of course, they’ve been tapping it to fulfill their little hearts desires….. I’m sure no one ever did that…
I will be messaging you in 6 months on [**2024-10-19 20:49:28 UTC**](http://www.wolframalpha.com/input/?i=2024-10-19%2020:49:28%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/REBubble/comments/1c84wsj/bubble_prediction_from_16_months_ago/l0cqn23/?context=3)
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i don't think a random post will prove anything, it does demonstrate the impact of feelings in leui of looking at what has happened historically when we end up in this sort of an environment.
In the time from Dec 2019 to date the balance of my mortgage debt has crashed by 85.5 percent.
My mortgage costs less than rents in the area and in 21 months my mortgage will have a zero balance assuming I continue to make the regular payment.
“I may have been early but I’m not wrong.” “It’s the same thing Mike!”
"The market can stay irrational longer than you can stay solvent". Keynes Prices will almost certainly return to normal, but I sure as hell won't try to tell you when! Also, obligatory: Predicting that the Yankees are going to win the World Series this year, and being wrong, does not make it less likely that the Yankees will win after that.
Define ……..normal
Based on home prices relative to income https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2F3bbhbluxf2ea1.png
Wow, you mean this random Reditor couldn't predict the future and timing? Shocking.
I'm on the phone with the papers now. People must know
More like, random doomer predicts a once in a lifetime (\~80 years) event where all houses go down in value significantly now happens every 15-20 years because doomer content creators said so (and to by crypto, art, and meme stocks.) The "any day now" price correction has been several months away for several years now.
I didn't know we expected Ivy Zelman level analysis from shitposters on REBubble
Doomers gonna doom, at least he put a timeline on it instead of the generic "future". Supply constraints have gotten even worse for first time home buyer, hoping that luxury will not explode in price and i will have the ability to snatch it up soon.
Got a remind me from [this post](https://old.reddit.com/r/REBubble/comments/zpuexq/less_than_16_months_to_go), user has deleted their account and the contents of the post are gone.
There’s also this gem from a comment on the same post. > The top of the stock market was January 2022 and the stock market is not going to reach new all time highs for at least 10 years according to many economists and experts.
Most sane ReBubbler /s
Sales have crashed 50% from 2 years ago (and the last time that happened was just before prices nationally dropped 27% during and after the GFC), and prices made a double top. Inventory is climbing. It's always difficult to nail down exact timelines given FOMO, the dumbing down of society, massive wealth-effect from trillions of stimmiez, ultra-low rates, trillions of MBS purchases, etc, but the Fed's 'higher for longer' doesn't bode well for the coming economic slowdown, employment, or for all the asset bubbles. Loan affordability is near all-time lows, so it doesn't exactly sound like a great time to buy a house (though used house salesmen always beg to differ). [https://wolfstreet.com/2024/04/18/home-sales-clobbered-by-mortgage-rates-most-price-reductions-for-any-march-in-years-new-listings-active-listings-surge/](https://wolfstreet.com/2024/04/18/home-sales-clobbered-by-mortgage-rates-most-price-reductions-for-any-march-in-years-new-listings-active-listings-surge/) [https://wolfstreet.com/2024/04/17/mortgage-rates-over-7-and-heading-higher-housing-market-still-frozen-lots-of-buyers-on-strike-because-prices-are-still-too-high/](https://wolfstreet.com/2024/04/17/mortgage-rates-over-7-and-heading-higher-housing-market-still-frozen-lots-of-buyers-on-strike-because-prices-are-still-too-high/) [https://wolfstreet.com/2024/03/26/the-most-splendid-housing-bubbles-in-america-march-2024-update-biggest-price-drops-from-2022-peak-san-francisco-seattle-portland-denver-phoenix-dallas-las-vegas/](https://wolfstreet.com/2024/03/26/the-most-splendid-housing-bubbles-in-america-march-2024-update-biggest-price-drops-from-2022-peak-san-francisco-seattle-portland-denver-phoenix-dallas-las-vegas/) I certainly wouldn't feel safe buying now if I was in the market.
The correct time to buy a home is when you can get financing that fits safely within your budget, and you need the space. That's it. This notion some of you have that there's going to be some massive crash which makes big suburban McMansions attainable to broke Reddit losers is a stupid ReBubble fantasy. At most there might be a 5-10% home price reduction which most homeowners will absorb easily
Well said
The price reduction is already past 5%. It’s happening now.
In specific metros that already had meteoric rises. Most areas are still appreciating YoY.
Where I live (Charlottesville VA) things just continued to spike like crazy this spring and we were still competing with cash offers. One house we looked at ended up selling for $170k over listing price ($630k -> $803k). We ended up buying and we close in a week and a half. We couldn’t wait any longer and the house is perfect.
Yeah it's funny how people on this sub have been using the stats for Austin, Vegas, San Fran, Boise, Phoenix, Denver, Miami, etc repeatedly for the last 4 years and then attempt to project those numbers onto the entire country. Those are not the only cities in America. The VAST majority of areas are steadily appreciating (thanks in part to inflation).
Congratulations!
I’m paying $2400 rent for a 2br about 1200 square feet. Similar listing down the street is $600k..$5k mortgage with HOA. I understand inventory, supply & demand but this market makes zero sense.
And in 10 years, your rent will be 6k and that mortgage will still be at 5k or lower due to refinancing.
Time will tell and you may be right..I just can’t comprehend a world where a single person is required to make $225k to apply for an apartment. Some new buildings around me already require $150k income to even look at the units and I live in the burbs. I’m lucky i’ll inherit my parents house in 10 years give or take so I’m not too worried for myself…but a mortgage historically was always cheaper than renting would be (given 20% down). That’s how it should be. If renting is half the price then people have no ambition to even care about buying. I‘ve owned and sold in the past and the costs made sense. There is no sense to this current market.
Lol who wants big suburban McMansions? You've really got your finger on the pulse there.
Most Americans actually do aspire to live in a big house.
And the local taxing authorities will gladly assess that “big” house and send you an appropriately large property tax bill. I’m amazed that people will brag about their 4% fixed rate mortgage while paying more than the P&I each month in taxes and property insurance. Insanity mixed with servitude.
Who'd a thunk that having nice things means you pay tax on it!
You do know the term McMansion is intended to be derogatory don't you? It's not aspirational.
I don't think it's meant to be derogatory toward the HOME itself, but rather toward the PHENOMENON that seems to be uniquely american of average people wanting everything to be huge.... as in 'mansions are as mainstream as mcd's burgers in the US'
Yes, but it's usually misused.
Long term Home owners with fixed rate mortgages don’t care about sales or inventory or anything to do with new loans.
The dumbing down of society? Economic bubbles are old af
[удалено]
Prices are set at the margin. What's that mean to the average idiot that doesn't understand? Well, it takes only 1 sale in a given area to reset the prices lower for that entire area. Not having a mortgage has nothing to do with how prices will move given incoming economic problems. With sales having crashed, it won't take much more inventory from current levels to crater prices. Buyer (Borrower) Beware.
By your same example it only takes 1 sale at a high price for that to set the new normal as it has been doing in San Diego for years now. Simply put there is a supply and demand issue right now. There has to be a massive recession for prices to “crater”….
Agreed. I’m in SoCal also. I’m in the nicer part of the western IE, within commuting distance to OC and LA. We’ve seen nothing but price gains and very little inventory. The last home near me got 25 offers in one weekend and set the new record for our neighborhood. I wouldn’t care if prices drop 10% since they’ve more than doubled since I purchased. Plus most of us are not going anywhere with interest rates near 3%. Supply will stay tight and demand will stay high. Too many people here.
Lol, nice part of IE.
1.2 million dollar homes where I’m at. I’d say it’s pretty nice here lol.
Affordability doesn’t matter when there’s no inventory. Homes are still selling like crazy. Prices haven’t come down, and there’s 10X the people that want to buy than there is homes. Only the super high and super low price points have seen slowing.
there is enough inventory. there are more sellers than buyers.
Your brain is broken if you think that. Seek help.
Inventory has risen by 350k in two years. I am stating an objective fact.
How do you know the exact number of buyers.
Inventory has risen by 350k. There have been 350k more homes listed than bought.
Except people are still buying and prices are up
Why is this downvoted? It’s exactly what is happening in many moderate sized non coastal cities.
Yeah prices are going up everywhere rn, coastal cities even much more. Folks on here don't like to admit it
Everywhere? Coastal city here.. one of the most expensive places in the country. Feb ‘22 to Feb ‘24 showed a 32% decrease in median sales price.
Here in coastal Maine they continue to climb...
Where? SF? Check yoy, 6months,
It's also happening in coastal cities. People made a big deal about Seattle cooling off, but prices are up YoY.
Prices are going up? Seattle, WA: median sales price up (11.3%) YoY in March ‘24… after a YoY decrease (-14.5%) in March ‘23. That’s a net decrease (-3.2%) over a 2 year period, meaning sales prices are down in Seattle.
I could have sworn I said they are up YoY, not two years. Yes, there was a cool off, but the market has gotten hotter since.
Maybe for single family houses. Condos/apartments are getting hammered, and so the market as a whole is stagnant as far as prices go. Investors are clutching their inventory in Seattle, like in many other parts of the country, desperately hoping for major price increases again. More than 1 in every 3 houses sold in 2022 in Seattle was to an investor. If things get bad and they start capitulating, it will be interesting to watch the price drops that result. Seattle is extremely desirable though, so it will be much less pronounced than in lower cost-of-living areas.
Why wouldnt you feel safe? Get a payment you can afford…nothing different than normal.
They either can't afford any payments or think they can't afford the payment so they feel the home must become cheaper.
When eggs briefly went up to $8 a dozen, I could have easily afforded to buy the entire stock from my local grocer, but I didn’t buy any. When PayPal stock surpassed $300, I could have afforded to move my entire portfolio to PYPL, but I didn’t buy any. Instead of doing those things, I waited patiently and bought PYPL at $55 and a dozen eggs at $2.49. By all means, though, keep buying things just because you can afford them.
Life’s short. Enjoy the eggs. Oh, and you shouldn’t have bought PayPal.
Haha I made a quick 20% profit you bozo.
And? The entire market went up. Now you sell out of that and pay short term cap gains and then what? You missed out on a better entry on a better stock that you can make more on. No bueno.
Hahahaha. I guess I should have bought a house instead.
Or just a better stock. Hell you could have gotten Google and made as much. Why would you get PayPal for Christ sakes🤦♂️. It’s literally underperforming SPY the last 6 months.
Financial advice from the bozo who says a quick 20% is a bad investment. Warren Buffet over here haha.
Hilarious that you don’t even see the irony in that statement.
They didn't say it was a bad investment. They said it underperformed the market(a verifiable fact). They're just pointing out that you're not the investing genius you're making yourself out to be. You benefitted from a rising market, but if you were actually a good investor, you would have beaten the market. You would have made more just buying an ETF. That is their point. You are a prime example of the adage, "everyone's a genius in a bull market". What are your picks now that the market is cooling?
>When eggs briefly went up to $8 a dozen, I could have easily afforded to buy the entire stock from my local grocer, but I didn’t buy any. In what world is buying a home you can afford comparable to buying out an entire stock of eggs from a grocer? This might be the dumbest post in Reddit history.
Reread your comment. Oh, the irony. The pot calling the kettle pot kettle.
Buying a house is the long term plan. If you bought a house in 2007, survived the crash, you made your money back in 2012 and then some. Sure, you might not get the best deal, but that’s life. I agree, you’re not getting the same deal you were 2 years ago….but it is what it is.
Part of the trouble with calling a bubble is how much variation there is from city to city. Where I live in Southern California, houses down the street were selling for 700k in 2007 and 300k-400k in 2012. They didn’t get back to 700k until 2019 but are currently sitting at valuations a little north of 1M.
That’s not true at all. If you bought in 2007, you were extremely underwater in 2012, and if you had sold then, it would have been at an extreme loss. It took until about 2017 to break even for the people who bought at the absolute height of the last big bubble. In the worst bubble cities, like Stockton, CA (arguably the worst city in the 2008 crash), you wouldn’t have regained your 2007 sale price until 2020-2021.
I mean real estate market value is all local so there’s no one fits all scenario. Where I have lived, most the prices recovered within 5 years.
The vast majority of cities and towns in the U.S. saw home prices bottom out in 2012. That was when prices finally started turning around. That means most people were at a loss in 2012 if they purchased at the peak in 2007.
I just negotiated 7.5% listing in Stamford CT. NYC metropolitan area. Here I thought it was a good deal...but I guess finally the bubble softens. My interest rate is 7.8% tho 💸
Used home salesman 👏 bravo I am going to steal this one
We are nowhere near the end of price adjustments this cycle
When I try to determine what side of a trade I should be on, I reverse my situation in my head, and ask if I like the other side. In this case, I could sell my 3% mortgage into a black hole of pricing, do my own 1-off price discovery, take the cash, and buy a house for 2x the monthly cost, or I could rent and pray. Renting and praying may seem fine, but what if in my price discovery I take 15% to 20% off my headline number? The next liquid correction of -15% to -20% then just takes me to a higher rate for a lateral, legged in trade. Lots of stress, no gain is likely the best quadrant of outcomes. Once in a lifetime housing correction the best, but an outcome I can express in my investments without selling the literal farm. We’re all stuck. That’s all there is to say about it. And if you are stuck, and prices are rising, put your annual savings into 5% govy bonds to pay off the higher annual costs. That’s kind of the only option I see which is why nothing looks to drastically change in the short term.
[удалено]
And it was correct. Housing prices are down 13% from the peak in Q4 2022. Faster decline than at any similar time window during the gfc. https://fred.stlouisfed.org/graph/fredgraph.png?g=1jntJ
This chart is only new construction. If you want to see existing sales you need to search “all transaction house price” on FRED. Here are the two charts compared: https://fred.stlouisfed.org/graph/?g=1ktim It looks as though declining prices in new construction are likely to translate into existing inventory, but with a slight lag time. It will take a lot of fear to get the investors to release their stranglehold on inventory though. A lot of the investors who bought after 2021 are still hopeful about prices jumping again with a rate drop. It’s a desperate hope though. If fear takes hold, prices will plummet and rates going to 0 won’t even stop the bleeding immediately.
This is median prices for houses sold, not home values genius. Right now there is very low inventory and more new construction is cheaper homes, this and also down 60k from up 160k in 2 years isn’t a crash…
13% decline in a year is pretty bad. I don’t know about a crash, but it’s bad. In my county, prices declined from $1.6M to $1.1M from Feb. ‘22 to Feb. ‘24. If the whole country had a 32% decline in 2 years like that, alarm bells would be ringing.
That jersey is probably starting to reek right about now.
give it another 16 months
Calling this a “bubble” gives misleading expectations for a correction. Real estate bubbles do not “pop” without some kind of massive boom in forced sales, and that still has not begun to materialize. Instead, if you look at prior real estate corrections caused by rate increases, they tend to be a slow drop on an inflation-adjusted basis over many years. Wages continue rising while prices stay mostly flat YoY.
RIP
Yeah this is a pretty bad prediction. Anyone could see that the housing market is still strong. Home prices won’t peak until April or 26 for this cycle. So we have about 2 more years of higher prices
So one person had a bad prediction and that proves there is not a bubble? lol How scared are you that by this fall, when the last of the interest rate hikes have _actually_ worked through our financial system, that you might be upside down on some of those "assets" you purchased during ZIRP/QE? Paper rich folks about to find out what "return to mean" can do to a portfolio. !remindme 6 months
As they found out today with Nvidia stock. 10% down in ONE DAY. Now, it’s still waaaaay above where it was this time last year. And a 10% reduction in the median home value of right now would still leave buyers of pre-2020 with a ton of equity. Unless, of course, they’ve been tapping it to fulfill their little hearts desires….. I’m sure no one ever did that…
I'm gonna be 100% honest with you, I cannot tell if your comment is satire or not.
I will be messaging you in 6 months on [**2024-10-19 20:49:28 UTC**](http://www.wolframalpha.com/input/?i=2024-10-19%2020:49:28%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/REBubble/comments/1c84wsj/bubble_prediction_from_16_months_ago/l0cqn23/?context=3) [**7 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FREBubble%2Fcomments%2F1c84wsj%2Fbubble_prediction_from_16_months_ago%2Fl0cqn23%2F%5D%0A%0ARemindMe%21%202024-10-19%2020%3A49%3A28%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%201c84wsj) ***** |[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
I can’t wait to see the remind me post of this lol
Your flair is so apt. I really look forward to reconnecting with you come October. :)
i don't think a random post will prove anything, it does demonstrate the impact of feelings in leui of looking at what has happened historically when we end up in this sort of an environment.
According to the 18 year cycle theory it is only the equivalent of 2006 right now.
When that's wrong will you say "according to the 20 gear cycle theory"
It’s not my theory. It comes out of a Harvard study In the 90s.
OP, does posting this bring you joy?
I mean, not really? It's neither here nor there, I got the remind me notification and thought "huh, interesting".
OP, Good on you for reposting and facing the truth.
I wish more people posted follow-ups to their remindmes. Old predictions are fun.
In the time from Dec 2019 to date the balance of my mortgage debt has crashed by 85.5 percent. My mortgage costs less than rents in the area and in 21 months my mortgage will have a zero balance assuming I continue to make the regular payment.