FED Holds Steady

[Dublin ohio]

I'm surprised you're still seeing them. Lots of inventory on the market now. Sellers are holding, buyers want concessions. It's a standoff.

The neighborhood had 262 sales in the past year and only 18 active listings at the time I did the appraisal

 

[Mark K]

If that's the case, market values would have declined with the onset of higher mortgage rates.

Its happening, maybe not in your neighborhood, but here and a lot of other places. Florida is getting its azz kicked, here we're seeing new construction prices drop about 10% in the last 6-12 months, "free basements", etc. I think part of FL problems is that with high rates, not as many snowbirds can afford to buy at high interest rates and house prices are falling.

Just as lowering interest rates won't affect real estate overnight, higher rates takes a while to have an effect.

 

[timd354]

They are declining ( prices are declining and have declined since the hot high point in late 2022). They have not crashed yet, but they have gone down, the only reason the decline was not steeper was becfuase of low inventory with owners not selling to keep their 3% mortgage.

Prices have declined in some areas (SW FL and Austin being among the worst declining markets the past year or two), but prices have not fallen everywhere across the board and there are still some markets that continue to have very low levels of inventory. It is a very weird market right now and the market dynamics are not the same post-COVID as they were pre-Covid because pre-Covid there was not a huge number of homes owned by people with fixed rate mortgages with absurdly low interest rates that of less than 4 or even less than 3% who are very incentivized not to sell their homes and give up their mortgages. Many, if not most, of the softest markets have one thing in common,....they are all markets where lots of new homes were built over the past 5+ years and thus have more inventory. Also, in many of these markets, builder margins got so inflated during COVID that builders in many cases can cut prices 10-15% or even 20% in some of these markets and still make an acceptable profit, especially since builders learned their lesson from the 2008 debacle and are now much smarter in how they acquire land, using land banks and options instead of making outright acquisitions of large amount of land as often as they did in the past.

 

[Terrel L. Shields]

Again, Powell had no choice but not to decrease rate since Trump

Do you understand how stupid that makes both you and Powell look? Petty and stupid.

 

[Terrel L. Shields]

Our RE market is over-priced. Just did an appraisal where I had done for $250k 3 years to the month ago and it has increased in value by 60% largely because land prices have doubled. We have small rural lot sales in the $1/SF range. Lots that were bringing $10,000 an acre less than 10 years ago. 3 years ago, they were 50 cents a SF. And much of it is speculators and investors.

Truth is locals cannot even buy a rural lot to set a manf. home on. The land is 3x the cost of the unit.

One has to move west and north or south to find cheaper land. But the best jobs are here so people try to suck it up and many are living in RVs or living in MHs on relative's property. Rents are unnecessarily high as well.

 

[Fernando]

Our RE market is over-priced. Just did an appraisal where I had done for $250k 3 years to the month ago and it has increased in value by 60% largely because land prices have doubled. We have small rural lot sales in the $1/SF range. Lots that were bringing $10,000 an acre less than 10 years ago. 3 years ago, they were 50 cents a SF. And much of it is speculators and investors.

Truth is locals cannot even buy a rural lot to set a manf. home on. The land is 3x the cost of the unit.

One has to move west and north or south to find cheaper land. But the best jobs are here so people try to suck it up and many are living in RVs or living in MHs on relative's property. Rents are unnecessarily high as well.

Overpriced? That's the market.

 

[Non Sequitur]

IMO we won't see a rate drop until early next year, and possibly not until after Powel is out in May 26.

 

[Charles West]

Blazing action at the Fed this afternoon, one of the governors is resigning effective August 8th, and another is rumored to be right behind. Powell is toast.

 

[Terrel L. Shields]

Overpriced? That's the market.

Market activity is determined by the affordability index, not interest rates, and therefore, price is fundamental to the ability of someone on average salary buying a home, especially in markets like S. California. No one cares around the price anymore. It is all about what are the monthly payments. Since I don't see much chance that wages will dramatically increase, then the reason for slow sales is high prices and high costs of new construction as well as over-priced land and absurd fees charged to builders by cities.

 

[Surf Cat]

Market activity is determined by the affordability index, not interest rates, and therefore, price is fundamental to the ability of someone on average salary buying a home, especially in markets like S. California. No one cares around the price anymore.

That may have been true back in 2021 and 22. No one cared about prices nationwide with those low interest rates.

Now.... the market is acutely aware and affected by the home prices here in SoCal. They have more choices now. Stubborn sellers just don't want to face the fact that home prices are now trending downward and they have to do price reductions or give concessions if they want to sell. Especially properties that need remodeling or upgrading.

Couple that with economic uncertainty and you have properties sitting with extended days on market. Those to the Moon housing prices couldn't last forever. There's nowhere for those prices to go but down. Same with the stock market. Something's got to give...