Housing Bubble?

[Fernando]

Some parts of our country increased a lot several years back. It was too much and makes sense that they would drop.
Over here prices didn't increase as much for SFRs (except condos which seemed to decrease) and market has been rather stable with pressure in decreasing past few years.

 

[Joe Flacco]

In some neighborhoods, I have been watching the months of supply go higher and higher since 2022. When it started increasing, prices dipped and stabilized just below 2022 prices. I have been wondering what the level is that cracks the market, and now there is evidence that it is around 8 months of supply. The prices hold up initially hitting that level but after about a year at those levels, prices make a decisive move lower.

 

[Terrel L. Shields]

people can't afford them.

How many repo's were there in 2008-2011...duh. And what does it take to bobble? One of you to get sick or get laid off or fired. That's all.

 

[Fernando]

How many repo's were there in 2008-2011...duh. And what does it take to bobble? One of you to get sick or get laid off or fired. That's all.

Back in 2008-2011, people were afraid to buy because prices were dropping. Prices went down allowing more to afford to buy.
Those who needed to buy a home, bought and it was best time to buy.
When prices started going back up, the mass return to market and prices went up. Psychological.

 

[Terrel L. Shields]

Trump's tariffs didn't help. With more certainty for business planning, hopefully next year will be better for economy.

The economy is going great guns in places. And industrial demand has very little to do with the cost of building a house. Lumber prices are very low. The Russian Ukrainian war has impacted prices for wheat that feeds the Middle East and has shut Russia down for export of oil. And Ukraine was a major source of plywood sandwich panels, insulation, and cinder block. So, some costs are impacted by war that would otherwise not exist and has nothing to do with Tariffs. Progress is being made with China on tariffs and Canada's tariff issues have backfired on them.

 

[RCA]

2027

 

[Terrel L. Shields]

people were afraid to buy because prices were dropping.

No. Lenders refused to lend. People will buy anything on credit. Lenders had to ditch tens of thousands of REOs and did so at bargain prices. And who bought? Not young couples that could afford it, no they were fenced out. Hedge funds and LLCs gobbled up these bargains.

 

[Fernando]

No. Lenders refused to lend. People will buy anything on credit. Lenders had to ditch tens of thousands of REOs and did so at bargain prices. And who bought? Not young couples that could afford it, no they were fenced out. Hedge funds and LLCs gobbled up these bargains.

Speculators help keep the market from falling further.
Many banks during the Great Recession held on to their REOs. They didn't want to flood market with more supply pressuring prices to fall even further.

 

[Terrel L. Shields]

Speculators help keep the market from falling further

Call me a conspiracy theorist if you want, but banks were forced by the FDIC to "clean up" their balance sheets. They called in many loans where the borrower was making payments on time, were not behind, but the value of the collateral had fell below amount of the loan. Forcing these sales put people under and the buyers were vultures swooping in to buy property far below its intrinsic value. They often doubled their money in less than 24 months. And here a lot of these LLCs were upper management at Walmart Hdq.

Had the banks been allowed to show forbearance on loans that were not behind, many would have eventually got back within the LTV. Prices would not have fell as much, and profiteers would not have made a killing like they did.

The best way to become a billionaire in 2009 was to have a million dollars and leverage it to the max. Here lots and land was selling for $10,000 a lot and $800 an acre. Sometime less. In smaller towns a lot was a $3000-6000 purchase and those same lots today would sell for $50,000 plus. Land? Went from the best land in 2009 selling for $2,000 an acre to $20,000 an acre today.