Another Housing Crash

[Deleted member 128537]

Sales of newly-constructed homes dipped in April, the Commerce Department said Wednesday.

The big picture: Housing-market professionals have wanted a stronger pace of new-home construction for years to fill the gaps in the existing-home market, where inventory remains at multiyear lows. But most builders aren’t “slow-walking” projects, as some analysts have suggested. They’re struggling with higher input costs.

The drum-tight labor market isn’t helping.

The regional breakdown didn’t show any clear sign that adverse weather impacted April’s figures. Instead we could be seeing some early signs that rising interest rates are taking some momentum out of the market.

https://www.marketwatch.com/story/n...in-april-commerce-says-2018-05-23?siteid=bnbh

Right now in our area it’s a labor shortage issue. Builders don’t have enough workers for the demand. This causes rising prices. Construction costs are just too high.

 

[Randolph Kinney]

Right now in our area it’s a labor shortage issue. Builders don’t have enough workers for the demand. This causes rising prices. Construction costs are just too high.

Couple that with rising mortgage interest rates and it has a negative impact on demand for housing.

 

[huntercharlie]

View attachment 35440

Out in the sticks Virginia. Price below peak. Closed sales increasing. Active listings declining. Typical picture outside of big cities.

I only quickly glanced at the graphs for your two counties but it appears you have stable to slightly declining values with a declining supply.

 

[Joe Flacco]

I only quickly glanced at the graphs for your two counties but it appears you have stable to slightly declining values with a declining supply.

I see this one as stable over the last year but overall price trend increasing. Since Q3 - 2013 there is only one quarter that shows a decline year over year and that is Q2-2016. All other quarters show increase year over year including the most recent quarters. So 19 out of the last 20 quarters show increase year over year.

 

[Joe Flacco]

I don't cover those counties. I only pulled those up because it seemed like some people are saying away from urban areas are not experiencing shortage.

 

[Addie]

To Marion:

You said absolutely nothing. OK I’ll answer your question that requires me to look up useless info. 7 years. 7 years. 7. But here’s the awesome part. It could be 1-30. Hey, 7 years though. Now back to realty.

What causes the next recession if your such a fortune telller female?

Here’s the 2nd awesome part. If me 7 years isn’t right to you. Cool. Because there isn’t a right answer to your question that was worded incorrectly.

 

[Meandering]

It must bother you that I'm not a man. Get over it son. More than half of the world's population is female, so, you are out numbered.



In any case.

If the typical property retention in your market is 7 years, look at your data, see how long it has been since the last time a large volume of properties were purchased, then you can apply "typical retention" to determine when inventory should start showing up in your market.

If I tell you what will cause the next recession, it'll spoil the secret with you, and how could we ensure you hang around to see the finish of the show, if you already know what the ending will be?

But if you are in training to be an appraiser, a market "expert", at least now you can now confidentially say, typical home ownership retention is 7 years.

Want to play again?

.

 

[George Hatch]

All RE is local. I live/work in the SoCal region, and even within this region it took nearly 5 years before ALL of the different market segments finally entered into decline. There is no such thing as a synced up national market. Some markets will enter decline long after others. If you live in a leading market you're going to see problems way before the people who live in lagging markets. That's not going to alter the fact that these markets operate in a repeating cycle.

There's a difference between:

simple demand (I want it), and
effective demand (I want it and I have the means to buy it).

On the one hand, effective demand is a subset of overall demand, but on the other hand its the only type of demand that matters because those buyers are the only ones who can buy.

Job creation is great, but the overall numbers don't directly translate into an increase in effective demand - only that portion of the jobs that generate enough income to enable a mortgage payment count toward increasing the number of buyers. Not everyone is going to be able to bridge the gap between how much they earn vs how much they can afford to pay by operating their home as an SRO vacation rental.

 

[Meandering]

All RE is local. Job creation is great, but the overall numbers don't directly translate into an increase in effective demand - only that portion of the jobs that generate enough income to enable a mortgage payment count toward increasing the number of buyers. Not everyone is going to be able to bridge the gap between how much they earn vs how much they can afford to pay by operating their home as an SRO vacation rental.

Pent-up demand for real estate,

it's constraint and release
does/will happen differently,
and usually, at different times,
in different market areas.

However,
with greater centralization of control,
The time differences between market area reactions begin to diminish.

Centralization picks winners and losers.

Even if they won't tell you that.

.

 

[Meandering]

http://www.afr.com/