Um, itās just a total swag with some graphs to pretend thereās analysis.
Anyone who actually can predict the future wouldāve made their bets quietly quickly and not brag about it. The Future is in Powells hands. God help us if he is Volker II
May be that is what Fed wants. Fed wants house prices and rents to be affordable for the average Joes. Currently, rent is going up because hardly any units for rents (my PM have no available units for rent). Current situation is silly. Average Joes canāt afford to buy because mortgage rate is too high and are struggling to pay rising rent. They have to ask for higher wage rise to pay for the higher rents. So how do Fed get out of this catch 22ā¦ Fed hikes rates to kill wage spirals yet rents are shooting up because of rate hikes which lead to demand for higher wages.
Just for info, in SG, house prices and rents continue to rocket despite numerous cooling measures implemented. Fed policy has implications for many nations.
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I am waiting for sellers to go desperate.
Home Flippers Get Burned by US Housing Marketās Sudden Slump
Falling demand and rising interest rates mean some investors are likely to take losses on quick deals.
Me too but Bay Area sellers are not at all giving in so far. Hard cookie to crack.
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After a few decades of high tech migration, owners are mostly financially savvy holders with high FICO score and high salary multi-millionaires that have bought houses at extremely low property tax. Selling are due to DD (death, divorce), no debt reasons. Unless Fed manages to destroy the tech sector and detroit-ed SV, near impossible to buy great deals.
Prices need to come down by another 30% for same monthly payment. It is hilarious to see folks still buying RE in Bay Area, when every day prices are going down (painfully slowly) and more options becoming available. The real impact of 8% mortgage is yet to be felt, the game has just started,
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In Austin, sold price is 15-20% of initial ask. OpenDoor dropped more. Still many sellers refuse to budge, merely drop asking by a few %. There are optimists that think Fed will pivot soonā¦ Fed is extremely clear is not going to stop till 1:1 job2applicant and inflation under control. Wage has continued to spiral, no reason to believe a pivot. Earliest possible for pause is Q1, has been said for monthsā¦ yet got people predict earlier.
Yeah there are many deniers in Bay Area. Some of them even want higher prices than May peak which is hilarious at best. The problem with most people is they cannot think independently and their ideas of future get influenced by their holdings. So if a person holds RE he/she thinks RE will rise forever. If someone doesnāt own RE they will tirelessly predict a big crash. I wish people could think independently without bias. But well we need them to prosper.
RE in California has risen in price consistently since 1849ā¦ there have been very few dips even in the Great Depression ā¦ and most often only locally. Like in the aerospace industry collapse in the early 90s in LA. Or the dotcom collapse in Silicon Valley in the early 2000s. The only global price collapse was caused by Greenspans easy money 2005-8 debacle. The current easy money Powell nightmare has yet to play out. But people are not highly leveraged and donāt have to sell. The DDDs will get hurt. The rest can hold on or even rent out. Government policies have insured a housing shortage in California and elsewhere. People still need a place to live. Whether they buy or rent. I bought a house in Discovery Bay in 2007 and still made outā¦ just had to wait 12 years. Meanwhile the rent carried the mortgageā¦ not negative cash flow.
The leverage depends on the value of home. If value drops by 30-40% most people will suddenly become highly leveraged. So this argument is another funny one that people dish out.
This is another hilarious argument. Population is declining, layoffs are increasing, people are moving out. Why do you need any more homes to be built. People are living somewhere right now, no. In fact Bay Area has glut of homes as there are hundreds of thousands of units that are vacant (for whatever reason), and net, people are still moving out.
Yes exactly. And couple this with tech melt down which did not happen in GFC.