Unprecedented Slowdown?

[Tumbuktu]

From Horse's Mouth
In the current market with volumes down, we are competing with other AMCs for volume ... [TSI Newsletter - November 2017]

TSI (Quicken Loans) have at least 10% of the market share of this business, and they are admitting it themselves. I am sure other lenders are in pretty much the same situation. Fellow appraisers (in the area as well as out of the area) that I have checked with, are complaining the same.


Analysis of 30 Year Fixed Rate Mortgage
November 29, 2012 ..... 3.32%
September 05, 2013 ..... 4.57%
July 07, 2016 .................3.41%
March 16, 2017 .............4.30%
November 30, 2017 .......3.90%
Now (Current) ............... 4.15%

Mortgage Interest Rates have been fluctuating below 5% since 2011. They rose more than 1% from November 2012 to September 2013, but business (Appraisal Work) didn't dry up. Similarly rates again rose up almost 1% from July 2016 to March 2017 but business was there.

What is going on now? Mortgage Interest Rates don't really answer the question. I would appreciate some guidance and feedback on the current situation and the future.

 

[J Grant]

This past month has been the slowest I've been in years. Dec was erratic, prior to that was busy for 2 years- imo the market is pausing to catch it's breath. Refinance volume will likely be down, since so many took advantage of low rates, but lenders are coming up with new creative programs to entice people to refinance ...inventory is lower on sales end and prices have risen, making home buying less attractive when coupled with an interest rate rise. The new tax rule caps mortgage interest deductions on property at 750k property worth- that may affect high end property to some degree. it's lean right now but Imo will pick up , though this year may be less busy than last year.- my personal prediction is 25% less volume at least for myself. But, Lenders are coming up with all kinds of programs to stimulate action, since they suffer in slow cycles even more.

 

[glenn walker]

In my area of California it's lack of affordability due high prices - We could have -0- interest rates and at some point wont matter . Nice home in Los Angeles or Orange County $750,000 plus - near the water $1,000,000 plus and folk's need some fairly large incomes . Rents $2,500 to $3,500 a month. If buyers go east then can get a home in the $400,000 plus range but add another 2 hours a day in commute time. Older people are not selling because their property taxes go up and whats the point of moving 1 mile up the road to pay an-additional $200,000 for a home with 300 Sq.Ft. more living area .

 

[Terrel L. Shields]

Nothing on the market here. I talked to a guy whose BIL is disposing of his father's estate. A duplex and house sold the first day they were listed. I checked the listings and they sold very well. Just nothing there to buy. Builders have been slowed by weather here. But we have a lot of new construction. Everything over $300,000 is selling slower than below.

 

[djd09]

‘It is 2005 all over again in terms of the valuation extreme, the psychological excess and the denial.’

https://www.marketwatch.com/amp/story/guid/BF483CC2-FF8D-11E7-BA3C-5F3970B4DD63

Denial is an understatement. The current AMC and approved panel system , combined with ROVs, is worse then the broker buddy days.

 

[Michigander]

In my area we have a huge inventory shortage problem. Houses are selling at crazy crack-induced prices, but the agents I have talked with have said they think it is largely related to fears of increasing interest rates coupled with very limited inventory. So buyers are over-bidding and trying to get a foot onto the property ladder, without thought the ladder may crack. It's an ugly market here, and reminds me of the mid to late 80's, the late 90's and 2004-2005 (we turned down earlier than other areas I think). We simply have cycles of activity. Affordability is based on rates now more than prices, but if you have to move, then it is prices that affect you, not your rate.

 

[Ahhhh Yeahhhh]

Two words... Bomb and Cyclone.

Its been cold. When its cold, people don't buy and they don't refi.

 

[Cascada]

It has been the slowest since the financial crisis. The economy is supposed to be better, unemployment lower, interest rates low, so I do not get the slow down.

 

[timindp]

Yea, very slow here in Southern Cali. Slowest Jan as far as I can remember. I had a 0 for the week last week. That hasn't ever happened in my 13 years. A little concerning if this trend continues. Luckily I hold a RE license so, that is always a back up for income. I'm optimistic, things will pick up soon because builders in my area are still building new homes and they are selling out.

 

[Meandering]

It has been the slowest since the financial crisis. The economy is supposed to be better, unemployment lower, interest rates low, so I do not get the slow down.

I don't know why,
Just re-read this thread.
People have been living too heavily on credit for a decade.
It's time to pay the bills.
Not just "the people, but "the governments" also
So if you got an extra $600-$2,500 in your tax return, would that be incentive to move, or to pay down that credit card/cell phone bill, or up the speed of your internet connection? Would you be sweating state tax changes? How about looming Pension fund and social security implosions knowing you're not as young as you used to be and that 401k might need to be beefed up a bit? Stock markets at record highs every month, crypt-currencies making millionaires overnight, is this the time to spend your money like your living in the garden of Eden? Or better to hunker, pay it down, and save for the future? That and multiple natural disasters impact national statistics.

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