Another Housing Crash

[Meandering]

This is one of the only PA counties that I have access to but @Marion Rhodes, does this look like a crash is about to happen in Franklin county? Price still below peak, closed sales increasing, active listings declining. To me it looks like Franklin County is just about to start getting going. You go most places outside of big cities you are seeing something like this.

Joe,
from your charts,
Do you see the historic relationship between rising prices and inventory, versus sales volume?

2008 prices up, listing volume up, sale volume down.
2018 prices up, listing volume down, sale volume down.

If high list prices can't entice new inventory into the market, there is an issue.

Want to bet the issue is that list prices have to exceed what people paid for those homes during the subprimes, in order to entice more inventory to the market?

And yet it appears that buyers are not willing to pay that much, as sales volume is down.

Yup, short of a massive subprime loan push,

Houston, there is a problem.

.

 

[Randolph Kinney]

The report also indicated that 4,139 loans were refinanced through the Home Affordable Refinance Program (HARP) bringing the total number of HARP refinances to more than 3.4 million since the program began in 2009.

During the first quarter, 34 percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages, which build equity faster than traditional 30-year mortgages. Although HARP is scheduled to expire at the end of 2018, the FHFA said that 73,868 borrowers could still benefit financially from this program. The report revealed that borrowers who had refinanced through HARP had a lower delinquency rate compared with borrowers eligible for HARP who did not refinance through the program

http://themreport.com/daily-dose/05-18-2018/refi-volumes-decline-at-the-gses

Still lots of underwater borrowers. That's means the home prices have not risen above the mortgage amount. It also means people who might sell have a problem finding a replacement home that they can afford.

 

[Joe Flacco]

Joe,
from your charts,
Do you see the historic relationship between rising prices and inventory, versus sales volume?

2008 prices up, listing volume up, sale volume down.
2018 prices up, listing volume down, sale volume down.

If high list prices can't entice new inventory into the market, there is an issue.

Want to bet the issue is that list prices have to exceed what people paid for those homes during the subprimes, in order to entice more inventory to the market?

And yet it appears that buyers are not willing to pay that much, as sales volume is down.

Yup, short of a massive subprime loan push,

Houston, there is a problem.

.

Where do you see prices went up in 2008? Prices went down across the board in 2008.

What do you you guys not understand about shortage? You guys need to go learn about supply and demand.

 

[Deleted member 128537]

Joe,
from your charts,
Do you see the historic relationship between rising prices and inventory, versus sales volume?

2008 prices up, listing volume up, sale volume down.
2018 prices up, listing volume down, sale volume down.

If high list prices can't entice new inventory into the market, there is an issue.

Want to bet the issue is that list prices have to exceed what people paid for those homes during the subprimes, in order to entice more inventory to the market?

And yet it appears that buyers are not willing to pay that much, as sales volume is down.

Yup, short of a massive subprime loan push,

Houston, there is a problem.

.

Marion, sales volume is down precisely because sales listings are down. See the relationship? There aren't enough listings for the demand. There isn't enough inventory that people can buy. Thus there is a supply problem; a shortage in the market. In a segment of my area we are down on absorption rate because of a lack of listings. We have a shortage. Homes are getting 3 or 4 offers in a few days. If we had more listings that wouldn't be the case. It's time for builders to step in an start putting up homes. The problem is construction costs are so high that builders don't want to take the risk.

 

[djd09]

I heard all the songs and dances before the last crash. Appraisers need to learn about propaganda.

 

[Meandering]

Marion, sales volume is down precisely because sales listings are down. See the relationship? There aren't enough listings for the demand. There isn't enough inventory that people can buy. Thus there is a supply problem; a shortage in the market. In a segment of my area we are down on absorption rate because of a lack of listings. We have a shortage. Homes are getting 3 or 4 offers in a few days. If we had more listings that wouldn't be the case. It's time for builders to step in an start putting up homes. The problem is construction costs are so high that builders don't want to take the risk.

Nope

Sales and list volume is down because list/sale prices have not exceeded the costs and expenses of owners to sell and walk away with some $&$.

 

[Meandering]

Look at the charts joe posted. If you bought your property then

Current Sale prices have not risen that high yet.

So you will lose money if you try to sell it now.

This is why there isn’t any inventory, coupled with a rise in interest rates, means you will have to move to a lower tax state to make a break even sale work.

Else you are stuck in place until a sale price can pay off your existing mortgage, closing costs and moving expenses.

That’s why inventories are low

 

[Joe Flacco]

So what you saying is that prices have to go up for supply and demand to reach equilibrium. Prices are going up, not crashing.

 

[Meandering]

And,

Look at the percentage of sales that are all cash sales. Too many screwed in lending last go round, are going to buy cheaper and with all cash this go round, making it harder for prices to zoom up like they did before the last crash

 

[Meandering]

So what you saying is that prices have to go up for supply and demand to reach equilibrium. Prices are going up, not crashing.

Prices have to go up in order to bring inventory to the market. You only sell for less than it cost you to buy, as a short sale or foreclosure. Burned through that inventory and nobody else can afford to sell at these prices.