It is not surprising that all the stock touts on a RE forum switched to crypto and high beta stocks that then crashed. I just keep plodding along with bread and butter RE income.
Same here.
Rising mortgage rates. Faltering home sales. Skyrocketing rents. Hereâs how to make sense of a baffling real estate market.
Need more details? Not obvious cause and effect?
Mr. Miller, who said he was âthrilledâ to see rates rise, pointed out that â5 percent mortgage rates are not a bad thing in terms of sustainable housing markets.â
I think should be 6-8%
With few good alternatives, renters who might have moved this year have decided to stay put: Almost 62 percent have renewed their leases, according to RentCafe. That means there is less available inventory in a market that has long suffered from a lack of new housing.
100% renewal for me.
The forecast does not look good for renters, in the short-term or the long-term. Rising mortgage rates will push some buyers out of the sales market, putting more pressure on the rental market. And as rents climb, even fewer people will move. With no relief in sight for the inventory shortage, renters have few options.
Good for landlords. Prefer increasing mortgage rates over rising housing prices (which mean rising property taxes).
No more Uptrend
I still havenât seen any market thatâs down yr/yr. We normally see a 5-10% drop after the peak spring season.
Zillow Estimate is showing the drop. Redfinâs algorithm is lagging.
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No y/y decline but Zillow shows 5-8% drop in price from Apr ATH.
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Yea, I am seeing that in all the markets for Zillow. I think it reflects reality well.
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Use readerview in browser to read article.
Is not clear at which stage the contract was cancelled and how much those buyers forfeited by cancelling.
There will be some interesting things to watch:
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How many new home buyers cancel their contract? New homes are usually under contract before or during construction. A deposit is paid. Many of those people planned to buy the home when rates were much lower. Some wonât qualify for a mortgage with higher rates. How much inventory will this add?
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PE firms went on a buying spree building positions in SFH rentals. They were fueled by near zero rates. The low rates allowed properties that wouldnât cash flow with a mortgage to cash flow with their near 0% borrowing rates. Now they canât do that, so how much will removing them from the buyer side impact the market?
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Related to #2 is how leveraged are the PE firms and how short/long-term is their debt? If their debt matures while rates are high, then they could be forced to eat negative cash flow or sell.
From what I can tell, they mostly operate in lower-tier markets where prices are below the national median, and rents are above the national median. They are focused on maximizing cash flow not appreciation. It could have an outsized impact on some markets though.
Iâm surprised Phoenix and Vegas arenât on the list. Theyâve had huge price appreciation and donât really have the high-paying jobs to justify the prices.
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I am tracking San Mateo, Santa Clara, and Mid-peninsula fortress # listings and # price reductions.
The number of price reductions on absolute scale and relative to # listings is at highest level over last few months. Small time frame though. # with price reductions up ~ 30% in SM and SC, up 20% in the fortress
Price cuts are often very tiny to bring the property to attention of buyers. Unless we are talking about 10+% price cuts it does not really matter. It will be fun to see stats on 10+# price cut or 5+%. I bet these are very small. So this blanket price cut stat is misleading at best.
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