Sellers strike

Back in 2008 -2009 there was a buyers strike…Only 1% of homes sell every year…If buyers aren’t buying those few homes that do sell, go for low prices…Creating the impression that all houses are losing value…Now we have a sellers strike…It will keep driving prices up…Until sellers are forced to sell…In the next recession???


Good term “Sellers Strike!”.

I often tell here, Strategic owners, buy well within means fixed mortgage owners, will not be forced to sell home. After 2008-9 downturn, mortgage industry has uniformly applied pressure to have 20% or more down payment and got rid of all risky loans. This has made all owners to hold on to the homes and are not forced to sell.

Anyone purchased between 2008 and 2011 homes, the values are almost doubled. Most of them locked with fixed mortgages. The mortgages are way less than (almost 30% less) current rent. They are not selling forever.

For example: My mortgage equivalent rent, after tax deduction, is appx $2000/month which is lower than any 3 BD room rent in bay area appx $3000.

This creates low inventory.

Present environment, I see lot of listings by flippers who bought homes between 2014 and now. But still demand is high. Every redfin HOT homes have multiples bidding.

If Trump’s tax policy is dropped, we may see shocks! or FED completes six rate hikes, we may have some shock on economy.

But, real estate is hardened so far and unlikely to see 2008-9 in case of recession.