Another Housing Crash

[Doug Wegener]

Considering that housing values are at or exceeding 2006 levels in many areas, do you see another housing crash on the horizon?

 

[Meandering]

It's time to

sell
sell
sell

Dust off that sales license, get those new subprime lenders on the phone and start talking to property owners.

 

[TJSum]

Much of the price recovery was fueled by very low interest rates. As interest rates rise, pricing will have to adjust to allow people to qualify for loans, unless they go back to the pre-crash type loan programs. Good luck with that...

 

[Meandering]

We're seeing an increase in short sales.

Apparently the low interest rates weren't a big help in getting people into housing they could afford.

.

 

[Randolph Kinney]

Three states are showing negative GDP growth. I expect 2019 in the fall will be the turning point.

 

[Restrain]

Our rate of increase is easily manageable. Excess inventory has worked out, a lot of new construction, the great bulk being after the contract was signed, not spec building. I see issues in CT, NY, CA due to rising costs, increasing taxes, and an outflow of the buying public. Talking to people down here who have moved down from NJ, etc, not unusual to take money to closing to sell their homes.

 

[Randolph Kinney]

A new study released Thursday points to why the California housing crisis is so acute, particularly in the Bay Area — where a home destroyed by fire sold for more than $900,000 and it would take four minimum wage jobs to afford an apartment: More people are moving in from other states than moving out. No other region in California has experienced such explosive growth of high-paying jobs. Statewide, between 2011 and 2016, California added just 171 homes for every 1,000 people.

How do you preserve housing for the majority of residents who don’t command high salaries? Or find a way to pay them more?

https://www.mercurynews.com/2018/05...-the-epicenter-of-californias-housing-crisis/

The crash in housing will start in the Bay area.

 

[Terrel L. Shields]

Most recessions, busts, etc. have a "trigger". I see no trigger yet. The S & L Crisis was preceded by Lincoln S & L, Whitewater, etc. In the dotcom bubble, the trigger was fraud perpetrated by some of the big players....WorldCom, Enron, Tyco, and how about the impact of the Freddy Mac scandal when it misstated earnings and then snowballed into Bear-Sterns, AIG, Lehman Bro. exposing the risks posed by bad mortgage backed securities in the Great Recession.

Even in the 1980s oil boom, the collapse of the Penn Square Bank snowballed into the oil biz and led to the downfall of FNB of Midland, and the crisis and crash of Continental Illinois National Bank who had bet big on buying loans from Penn...

If a few such defalcations were to occur you can bet on a crash.

 

[Noreen]

IN MY MARKET AREA, I am seeing marketing days overall increasing between 15 to 30 days, move in ready sells within 2 weeks, anything needing repairs/updating is the inventory that lingers. I see a "plateau" starting here, however we are starting to see more & more household sustainable jobs so I think this is helping our market out.

 

[Tom Woolford]

The thing concerning me is an unprecedented use of FHA loans, both in purchases and refi's. For me, FHA used to be about 10% of the orders crossing my desk. Now its closer to 50. People are eating up their equity (again), and pretty soon won't have anywhere to turn. Inventory will go up, prices will come down, and no one left to buy them because they screwed their credit. I think its close enough that I'm putting off buying my retirement house. I'll wait for the fire sale prices.