Housing Bubble?

[djd09]

Housing market flashes fresh red alert as key signal crashes to 30‑year low​

Home sales are set to plunge to a 30-year low — with experts warning the slump could deepen into a full‑blown collapse.

Just four million transactions are expected in the US this year, according to new data from Realtor.com.

That would mark lowest level since 1995, according to the National Association of Realtors.

Buyers have been scared off by a rocky economy, surging HOA fees, and punishing mortgage and insurance rates, leaving sellers slashing prices to lure offers.

'Even with more homes on the market, buyer response has remained muted compared to what we'd expect from similar supply shifts in the past,' Realtor.com chief economist Danielle Hale said of the shocking figures.

The South and West have seen the biggest jump in homes for sale, but prices remain unaffordable.

Meanwhile, the Northeast and Midwest are still tight markets with steadier activity.

Thirty‑year mortgage rates will average 6.7 percent across 2025 and end the year at around 6.4 percent. That is slightly higher than previous forecasts.

Median home prices have jumped 52 percent since May 2019, far outpacing wage growth of just 30 percent, NAR data shows.

'The doubling in the monthly payment for a new set of buyers is hindering the market condition,' said NAR chief economist Lawrence Yun.

Before the pandemic, a typical monthly payment on a home was roughly $1,000; now it's closer to $2,000.

Economists believe this is because areas in the South and West have seen inventory hit pre-pandemic levels but prices remaining flat or are even falling.

Despite the frozen market, economists do not predict a correction in home prices but conversely see them rising 2.5 percent through 2025.

This is largely driven by sellers who refuse to drop their asking price and are instead pulling their homes off the market in droves.

Others have been forced to slash their asking prices and accept a more reasonable offer in the current uncertain market.

More than 20 percent of listed homes had price reductions in June, the highest share for the month since 2016.

Phoenix, Arizona, is at the epicenter of the delistings trend, seeing more homes pulled from the market than any other area.

Last week Moody's Chief Economist Mark Zandi issued a 'red flare' warning for the housing market and cautioned that it could drag down the entire economy.

'I sent off a yellow flare on the housing market in a post a couple of weeks ago, but I now think a red flare is more appropriate,' Moody's Chief Economist Mark Zandi wrote on X.

A 'red flare' warning suggests the market is experiencing major instability and a fall is imminent.

'Home sales are already uber depressed,' Zandi wrote.

'Housing will thus soon be a full-blown headwind to broader economic growth, adding to the growing list of reasons to be worried about the economy's prospects later this year and early next.'


Blame appraisers for under valuing homes, so people can't find generational wealth.

 

[Fernando]

MSN

Billionaire Jeff Greene predicts house prices will soar once rates fall — and warns the US faces a 'downward spiral'​

"If rates come down, we'll have a huge boom in housing prices," Greene told BI.
A reduction in rates would likely result in more houses on the market, as homeowners who took out long-term mortgages at low rates would then be willing to refinance and move home, Greene said.

DOESN'T NEED A BILLIONAIRE TO PREDICT HOME PRICES GO UP WHEN RATES FALL

 

[Terrel L. Shields]

 

[gregb]

San Francisco still has life...

https://www.sfgate.com/travel/article/investors-set-buy-luxury-san-francisco-hotel-21219562.php

 

[Fernando]

I thought my home price has been increasing until I saw a marketing brochure showing prices actually dropped slightly in my neighborhood.
How could I be so wrong?
I thought with Trump in office this year, home prices would have be better than last year.

 

[Terrel L. Shields]

I thought with Trump in office this year, home prices would have be better than last year.

Why would the president matter? BTW mortgage rates are 4.8 or so... how low would it need to be? I mean face it. Homes are over-priced. Builders are building too many houses that are too large and too expensive. Affordability is in the cellar. The average person cannot swing a mortgage much over 30% of their income.

So, what is the break point? The AVERAGE house in America, not in Californicate, is now $400,000. Monthly payments? About $2,000 before taxes and insurance. That's $24,000 a year. That means $80,000 annual income while the average income in America for a household is $83,000. That means both husband and wife are working and single people just fogedaboutit. You can't make it.

To restore affordability, the average home needs to see a price reduction of 20-30%. For the long-term homeowner there is zero upside to a more expensive house. It is not more comfortable. It is not cheaper to maintain. It just drives up the cost, the insurance and the property taxes. Nothing more.

 

[Fernando]

Why would the president matter? BTW mortgage rates are 4.8 or so... how low would it need to be? I mean face it. Homes are over-priced. Builders are building too many houses that are too large and too expensive. Affordability is in the cellar. The average person cannot swing a mortgage much over 30% of their income.

So, what is the break point? The AVERAGE house in America, not in Californicate, is now $400,000. Monthly payments? About $2,000 before taxes and insurance. That's $24,000 a year. That means $80,000 annual income while the average income in America for a household is $83,000. That means both husband and wife are working and single people just fogedaboutit. You can't make it.

To restore affordability, the average home needs to see a price reduction of 20-30%. For the long-term homeowner there is zero upside to a more expensive house. It is not more comfortable. It is not cheaper to maintain. It just drives up the cost, the insurance and the property taxes. Nothing more.

Since I can remember, there always been rantings about homes too expensive and people can't afford them.
No one is entitled to buy a home though government believes its the case with lenient lending practices.
As long as the economy does well and people have good pays, the housing market is fine.

 

[Terrel L. Shields]

As long as the economy does well and people have good pays, the housing market is fine.

The housing market is slow. And it always cycles up and down. It will go down next time, not up.

 

[Fernando]

The housing market is slow. And it always cycles up and down. It will go down next time, not up.

Housing market hasn't gone up in past few years. Trump's tariffs didn't help. With more certainty for business planning, hopefully next year will be better for economy.
If not for tariffs, there would have been more presents under our Christmas trees.

 

[Joe Flacco]

Some property values have increased a lot in the last 2-3 years, and some property values have declined a lot in the last 2-3 years.

In a part of one neighborhood I cover, there has been a bit of a boom going on for high-end new construction. Based on what those are selling for, people are paying a lot more for tear-downs today than 2-3 years ago. It is the new construction market driving the pricing at the lower end. But this is only really happening for the large lots which are probably 20% of the neighborhood. The tear-down prices are not moving as much for the smaller, quarter-acre lots, which are predominant.

And in some neighborhoods in the city, condo and townhouse prices are declining. It is mostly concentrated in the townhouse areas zoned for two or more units. I'm seeing some properties selling for the same price as around 2016.

For the most part, prices are stable. But there are some properties that are selling for 40% more than 2022, and there are some properties selling for the lowest price in the last 10 years.