Kevin Paffrath has sold 20 of his 26 properties and ready to buy in 2023.
They could afford to buy, but opted to rent a four-bedroom home for their family for $2,400 a month. “We’re just not sure if the housing prices will really stay where they are currently. So we didn’t want to buy at the peak and then have them go down in a couple of years,” said Stephanie Murphy, who is 29.
As a landlord, I love this type of sentiment.
“A shortage of single-family properties available for rent has plagued the market, pushing rents up at record-level rates,” said Molly Boesel, principal economist at CoreLogic.
Austin
Yoy market rent increase for…
Leander 78641, 50% 
78759, 30% 
Avery Ranch 78717, 25% 
Pflugerville 78660, 10% 
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Wow, I’m surprised home ownership ranks so far above having kids.
Population growth is crashing worldwide and now expected to go negative before 2050. More wealth = more materialism = less focus on family.
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Landlords Ready War Chests to Buy in Cooling US Housing Market
Rental companies see potential discounts ahead from homebuilders as higher mortgage rates sideline regular buyers.
Big and mom&pop land lords have prepared for this “cooling” market. Only first time buyers and renters are affected significantly.
I don’t predict a collapse in RE prices. 90% of current mortgages are below 5%. Today 30 year mortgage rates are over 6% and headed towards 8%. Sellers won’t sell unless desperate. And then they won’t be able to buy except in a much cheaper area. Seller’s reluctance will drive down inventory. Buyers are increasing due to demographics and rising rents. Building will slow down due to inflation and recession. Demand is going up. Supply is going down. Unemployment is historically low. Prices will remain high. Buyers will need more help from parents. Or buyers will double up and share a house.
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I think the risk is if unemployment spikes forcing people to sell. If unemployment stays under 5%, then RE is fine.
I have always said unemployment is the key to the prices of housing long term. But I think it would have to go to 10% to have a major effect. And even then I won’t worry. Unemployment in the BA was 10% in 1975. And house prices were going up at more than10% annually. This is not 2008 when people were getting no doc 125% loans and never made their payments.
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To me, the issue in the major coastal markets I follow is affordability. Yes, the supply of new listings will go down because trade-up buyers won’t want to give up their sub-3% rates, but there will always be a steady supply of houses coming onto the market due to deaths, divorces, job losses and relocations. The problem is if tech compensation goes down due to a combination of factors (layoffs/weaker job market, poor stock market performance, etc.), it becomes very difficult for buyers to afford a $15–20k monthly payment for a 3/2 or 4/2 starter home.
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U.S. Home Equity Hits Highest Level on Record—$27.8 Trillion
Soaring home prices have driven up home equity, but rising interest rates are making it more expensive to use
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Um, people shouldn’t be using home equity for consumption spending. It shouldn’t matter if it’s more expensive to use home equity.
Usually when prices are declining, sale volume would decline and hardly any good quality houses for sale. So don’t expect to buy your dream home in a down market.
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Powell made it obvious that Fed wants house prices to decline to a level that first-time home buyers can buy home at lower price but at lower? higher? mortgage rate (guess can re-fi to lower rate later). However, he would be disappointed because cash-rich investors would outbid these first-time home buyers for good quality houses.
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