# Housing Market about to Crash Again?



## Melensdad

The lovely Mrs_Bob and I have been house flipping for years.  I stopped during Covid/2019 because the prices were becoming crazy.  I actually bid $10,000 over asking for a cheap house, the seller rejected the offer, pulled it off the market and re-listed for $12,000 over my offer.  That was when I walked away from flipping.  Figured it would get even more crazy.  It has, over the past 24 months, gotten even crazier.  And now it looks like the bubble is bursting in 2022.  Serious recession seems to be on the horizon.  

I'll be ready to buy when the market crashes again.  But not at the overvalued prices of today.

Below is an article from ZeroHedge, but there are others, indicating similar news. 







						There Goes The Housing Market | ZeroHedge
					

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero




					www.zerohedge.com
				




​There Goes The Housing Market​Since the Fed is rushing to hike the US into a deep recession just so inflation will (supposedly) slide ahead of the November midterms, in line with Biden's demands, the housing market is eager to comply with Powell's and Biden's handlers' wishes, and is leading the charge into the economic abyss, as we discussed most recently here, and as the latest nationwide survey of new home builders confirms.​​Last week, Zillow's dismal outlook stoked fears that rising mortgage rates would result in the next downturn. On Monday night, Airbnb co-founder and CEO Brian Chesky warned: "this moment feels similar to late 2008 when we started" the online marketplace for lodging.​​​​It should: the surge in mortgage rates means that *housing affordability has crashed to the lowest on record.*​​

​​And nos there's this: John Burns Real Estate Consulting provides a monthly snapshot of more than 300 builders across the nation. Here are a some comments from the builders, according to tweets from the firm's director of research:​​
Demand is slowing, namely entry-level due to payment shock.
Investors are pulling back.
Ripple effect of rising rates starting to hit move-up market. Market commentary to follow
​​The regional breakdown is shockingly uniform in just how quickly it got ugly across the entire nation:​​


> *Dallas builder*: “Interest lists are shrinking or buyers are truly pausing.”
> *Houston builder*: “Many first-time buyers simply no longer qualify with the increase in interest rates, as their debt-to-income ratio gets out of whack.”
> *San Antonio builder*: “Traffic has been cut in half since the hike in rates.”
> *Raleigh builder*: “Investor activity has slowed dramatically.”
> *Provo builder*: “Investors are evaluating the investment more critically than in the past.”
> *Washington DC builder*: “Traffic half what it was in March. Worried about first time buyers. Many fewer REAL buyers than number of people collected on interest list last 6 months. Certainly more attempts [from buyers] to negotiate.”
> *Seattle builder*: “Pause by a large population of buyers. To achieve our desired [sales] pace, we had to make price adjustments. Rates starting to knock people out of qualification.”
> *Riverside San Bernardino builder*: “Cancellations are starting to creep up due to loan declines and job losses. Waiting lists are certainly smaller. Saw an immediate change in buyer behavior when rates climbed over 5%.”
> *Los Angeles builder*: “Buyers who are stretching to purchase have become more cautious.”
> *San Diego builder*: “Buyers are definitely a bit more edgy.”
> *Denver builder*: “Sales are slowing due to higher prices and rates. Backlog of buyers have remained but we are seeing new prospects priced out with interest rates and anticipated payments. Conforming loans quoting over 6%.”
> *Boise builder: *“Rising interest rates may have pulled some buyers forward, and we expect to see a slowing of sales in the coming months as a result.”
> *Salt Lake City builder*: “In our lower priced segments, buyers are compromising and reducing options.”
> *Bend builder*: “Our market has slowed and prices are starting to drop.”
> *Atlanta builder*: “Seen a decrease in the number of potential buyers who are participating in best and final offers on homes/homesites.”
> *Knoxville builder*: “Detached 2,000-3,000 square foot product still selling, just not with 3 buyers for every home like a few months ago.”
> *Allentown builder*: “Double hit of higher home prices and higher mortgage interest rates clearly has reduced the number of qualified buyers. Our waiting list is almost zero as of April 30th.”
> *Philadelphia builder*: “Between higher interest rates and higher sales prices, along with high gas prices and a volatile stock market, we’re seeing a pullback in our sales.”
> *Tampa builder: *“We’ve seen a significant shift in buyer behavior in the last 30 days. Florida was on fire and pricing has really come to a high point, and people are not willing to pay the prices anymore.”
> *Indianapolis builder: *“Traffic has significantly declined and people have paused on moving forward with purchases.”
> *Kansas City builder*: “Our lower end product has paused or slowed dramatically.”
> *Columbus builder*: “Higher rates are definitely tempering buyer enthusiasm and traffic.”
> *Baltimore builder*: “Buyers aren't putting in as many options as they did last year.”
> *Reno builder*: “Cancellation rate last month more than doubled from 6% to 16%. We attribute this to buyers that did not lock interest rates early in purchase process. Also seeing many buyers put buying decision on hold.”
> *Fresno builder*: “Finding an increase in cancellations due to the rate increase. The majority of cancellations are resulting from fear vs non-qualification.”
> *Cleveland builder*: “Once we reach home closings, about 5% of our current customers on the books will be forced to bust out as they originally qualified at a 3.25% rate and won't be able to stretch beyond this.”
> *Sacramento builder*: “Seeing trouble qualifying for entry-level buyers as they are priced out by rates.”
> *San Jose builder*: “Quality traffic has significantly decreased.”


This means that still buoyant home_*builder*_ confidence is about to catch down to abysmal home_*buyer*_ sentiment...​​

​​... which will immediately mutate into a recession, at which point the Fed will slam the breaks on the hiking cycle and quickly go into reverse. The only question is how long before the market grasps what is now patently obvious.​​


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## mla2ofus

2- Investors are pulling back. 
Because as I understand it they're the ones that drove prices up.


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## Melensdad

mla2ofus said:


> 2- Investors are pulling back.
> Because as I understand it they're the ones that drove prices up.


I disagree.

Low interest rates, combined with people moving out of inner cities, helped to created a housing boom in suburban and near rural areas.

We now have a somewhat weaker jobs market, high inflation making it harder to pay for daily essentials, 2/3rds of Americans are living paycheck-to-paycheck and interest rates have climbed from the LOW 2's to an average of over 5%.  Wait until it hit's 7% and the real COLLAPSE will begin.  And that will be the entire economy.


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## XeVfTEUtaAqJHTqq

When people can no longer rely on re-financing their homes to pay for their over-extended lifestyles then we will see lots of foreclosures and good buying opportunities.  Shouldn't be too much longer at the current rate of decline of our economy.


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## XeVfTEUtaAqJHTqq

I'm most curious as to whether or not companies like Blackrock are going to continue their purchasing or if the higher interest rates will slow that down.


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## m1west

XeVfTEUtaAqJHTqq said:


> I'm most curious as to whether or not companies like Blackrock are going to continue their purchasing or if the higher interest rates will slow that down.


Thats exactly whats going to happen, interest rates don't effect cash purchases. I don't expect prices to fall, quite the opposite, building materials costs and home shortages are going to keep the prices up. The inventory of homes for sale is actually quite low. Real property and metals are becoming the only semi safe place to put your money other than the mattress. It will make home ownership for some impossible. Blackrock and other investment groups are going to buy up everything they can. Just remember, you will own nothing and be happy.


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## XeVfTEUtaAqJHTqq

m1west said:


> Thats exactly whats going to happen, interest rates don't effect cash purchases. I don't expect prices to fall, quite the opposite, building materials costs and home shortages are going to keep the prices up. The inventory of homes for sale is actually quite low. Real property and metals are becoming the only semi safe place to put your money other than the mattress. It will make home ownership for some impossible. Blackrock and other investment groups are going to buy up everything they can. Just remember, you will own nothing and be happy.


That's pretty much what I fear.  Maybe something will change this but the future doesn't look good for private home ownership anywhere in the world.


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## mla2ofus

mla2ofus said:


> 2- Investors are pulling back.
> Because as I understand it they're the ones that drove prices up.





m1west said:


> Thats exactly whats going to happen, interest rates don't effect cash purchases. I don't expect prices to fall, quite the opposite, building materials costs and home shortages are going to keep the prices up. The inventory of homes for sale is actually quite low. Real property and metals are becoming the only semi safe place to put your money other than the mattress. It will make home ownership for some impossible. Blackrock and other investment groups are going to buy up everything they can. Just remember, you will own nothing and be happy.


   That's what I was tryng to say I guess, but I'm not a finance wizard!!


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## Aircal

Dear , I'm not a finance wizard either!


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## FrancSevin

I have stayed out of this thread because of my one word answer.

Housing market crashes, Big speculative investors lose.

*GOOD!*

It will take some time, but eventually young people will go back to working for a living and be able to buy a house.


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## m1west

Im not seeing a housing market crash, real property is about the only place to put your money. In Ca. where I live there is a housing shortage. Home sales only slows because of low inventory. What I am seeing is the average person is being priced out, especially first time buyers that have no equity in and existing home to build on. Another thing getting ready to happen is millions of folks in the south west dependent on the Colorado river, lake Powell and lake Meade are going to be looking for a place to move to soon.


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## 300 H and H

Lake Mead Marina Update.. Hoover Dam Closed​


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## m1west

Yep, they are losing more than 8" a day with no plan from the gubment. My sifering says they got less than a year without some real draconian water cuts that are on the table. The power goes out before the water. The LA times finally ran a story on it. My sister lives in SoCal her and everyone else down there had no clue how bad it is. The cat is out of the bag now. Look for lots of for sale signs and a mass exodus from the southwest.


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## m1west




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## m1west

Zillow says my home price increased $9,813.00 in 30 days.


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## chowderman

Zillow and many other similar sites use algorithms that use the the % of the last documented sale to predict the sale price of some random property in the same zip code.

it's totally bogus.


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## bczoom

chowderman said:


> Zillow and many other similar sites use algorithms that use the the % of the last documented sale to predict the sale price of some random property in the same zip code.
> 
> it's totally bogus.


Agreed.  My house is seriously undervalued on that site.  I took out a HELOC a few years ago and my listed value is based on the HELOC which is nowhere near to its appraised value.
I have 2 other properties. Zillow's value on one is low, the other is high.


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## m1west

Point is property values are not dropping around where I live, sales only slow when inventory is low.


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## Melensdad

m1west said:


> Point is property values are not dropping around where I live, sales only slow when inventory is low.


That is not the normal situation for much of the United States.  Obviously there are pockets where prices hold.  But what you personally see is not the same as what is happening across much of the US.

And the news for many is getting worse.  15% of houses "sold" ended up with cancelled sales, which is a near record number of cancellations.

FULL STORY at Just The News:  https://justthenews.com/nation/economy/buyers-cancelling-home-sales-highest-rate-beginning-pandemic

Buyers cancelling home sales at highest rate since beginning of pandemic​A skyrocketing number of home sales are faltering throughout the U.S. housing economy, with experts pointing to slower housing markets and higher mortgage rates as the main drivers of the turnaround. ​​Nationwide, "roughly 60,000 home-purchase agreements fell through in June, equal to 14.9% of homes that went under contract that month," real estate company Redfin said in a home sale analysis this week.​​Redfin said that that number represents "highest percentage on record with the exception of March and April 2020, when the housing market all but ground to a halt due to the onset of the coronavirus pandemic." . . .​​"Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process," she said. ​​She added that "rising mortgage rates are also forcing some buyers to cancel home purchases. If rates were at 5% when you made an offer, but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home . . .​


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## m1west

Melensdad said:


> That is not the normal situation for much of the United States.  Obviously there are pockets where prices hold.  But what you personally see is not the same as what is happening across much of the US.
> 
> And the news for many is getting worse.  15% of houses "sold" ended up with cancelled sales, which is a near record number of cancellations.
> 
> FULL STORY at Just The News:  https://justthenews.com/nation/economy/buyers-cancelling-home-sales-highest-rate-beginning-pandemic
> 
> Buyers cancelling home sales at highest rate since beginning of pandemic​A skyrocketing number of home sales are faltering throughout the U.S. housing economy, with experts pointing to slower housing markets and higher mortgage rates as the main drivers of the turnaround. ​​Nationwide, "roughly 60,000 home-purchase agreements fell through in June, equal to 14.9% of homes that went under contract that month," real estate company Redfin said in a home sale analysis this week.​​Redfin said that that number represents "highest percentage on record with the exception of March and April 2020, when the housing market all but ground to a halt due to the onset of the coronavirus pandemic." . . .​​"Buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the homebuying process," she said. ​​She added that "rising mortgage rates are also forcing some buyers to cancel home purchases. If rates were at 5% when you made an offer, but reached 5.8% by the time the deal was set to close, you may no longer be able to afford that home . . .​


I just checked, gained $2500.00 in the last 30 days. Like you said it can be regional. The interest rates are rising and effecting things.


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## echo

People are scared of the dollar, gold is already high enough. Buy a house will do the same thing that inflation is doing to the dollar.
You can buy paper but watch it. No bonds as they are someones else's debt. Good Luck amerika. I'm just sitting and watching the dollar shrink. I think I lost five grand this month. My wife lost twenty five grand. The only gain is coal/lp operated power plants.


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## tommu56

one of the youtubers i follow


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## tommu56

and this one


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## UberBastid

I am a California Real Estate Broker (retired).  My wife is an agent. 
She worked under my license.

We contracted with three major banks with significant loan portfolios in N. California (Shasta and Tehama Counties).   We processed their foreclosed properties (REO) in those two counties from 2004 to 2010.   At the peak we closed three to five properties a week.  
Take possession.
Rehab.
Market
Escrow manage
Close.

I see a lot of similarities now to what was happening JUST before the big crash.  There are a lot of differences ... but, lots of similarities.

What I wanted to tell you all is that about two months ago I got an email from a major bank, who's name you'd recognize inviting me and wifey to a three day, all expense paid seminar in San Francisco to 'introduce you to our new platform for processing REO properties'.  
They want me to 'be prepared for a significant uptick in REO work.'

The banks know what's coming.

And, no, I declined their offer.  I felt like I sold a little tiny piece of my soul with each closing.  It's the hardest, most heartbreaking job I ever did - and I won't do it any more.
I don't have that much soul left.

But, the banks know what's coming.

Stagflation is cruel.


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## mla2ofus

Apparently some folks didn't read their recent history so they'll repeat it!!


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## UberBastid

echo said:


> People are scared of the dollar, gold is already high enough. Buy a house will do the same thing that inflation is doing to the dollar.
> You can buy paper but watch it. No bonds as they are someones else's debt. Good Luck amerika. I'm just sitting and watching the dollar shrink. I think I lost five grand this month. My wife lost twenty five grand. The only gain is coal/lp operated power plants.


Ya know what I don't understand ... maybe somebody can explain it to me.
One of my undergrad degrees is in Economics, and it was drilled into us from Econ 101 forward that buying metals (gold, silver) is NOT an investment.  It is an inflation hedge.
So ... why is it that silver hasn't moved AT ALL in the last few months?   We are having almost 10% inflation ... why, if I sell my silver, I will get paid in the same amount of inflated dollars as the number of uninflated dollars I bought it with?

Why isn't inflation causing an uptick in the 'value' of metals?

.


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## Melensdad

UberBastid said:


> Ya know what I don't understand ... maybe somebody can explain it to me.
> One of my undergrad degrees is in Economics, and it was drilled into us from Econ 101 forward that buying metals (gold, silver) is NOT an investment.  It is an inflation hedge.
> So ... why is it that silver hasn't moved AT ALL in the last few months?   We are having almost 10% inflation ... why, if I sell my silver, I will get paid in the same amount of inflated dollars as the number of uninflated dollars I bought it with?
> 
> Why isn't inflation causing an uptick in the 'value' of metals?
> 
> .


Silver is both an industrial metal and a precious medal.

But FWIW, I think the play today is commodities.


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## UberBastid

Melensdad said:


> I think the play today is commodities.


I agree with that.
Tangible and useful and desirable physical assets.

But, my metals holding is not intended as an investment.
When the SHTF one little Mercury silver dime will buy a loaf of bread and feed me and wifey for a day.
And I got sacks, and sacks, and sacks of them.

They not for selling.
Not an investment.

.


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## echo

UberBastid said:


> Ya know what I don't understand ... maybe somebody can explain it to me.
> One of my undergrad degrees is in Economics, and it was drilled into us from Econ 101 forward that buying metals (gold, silver) is NOT an investment.  It is an inflation hedge.
> So ... why is it that silver hasn't moved AT ALL in the last few months?   We are having almost 10% inflation ... why, if I sell my silver, I will get paid in the same amount of inflated dollars as the number of uninflated dollars I bought it with?
> 
> Why isn't inflation causing an uptick in the 'value' of metals?
> 
> .


Silver is at it's inflated value and so is gold.
I told my family years ago to buy real copper pennies as they will be worth a dollar someday. They laughed at me like my Swissies.
I also did real good when a quarter could be bought for fifteen cents. Yea I'm Milton Friedman trained.


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## chowderman

the 'Obama housing crash' was caused by the admin demanding banks write mortgages to anyone who could sign their name.
those buyers could not afford the houses the bought, they defaulted, houses went into foreclosure, got sold off  dirt cheap because the banks wanted them off their books.

the couple across the street, for example.  he was a not high level state employee, she did not work/earn.  they sold their high $$ house in MD, bought here.  he did _three_ re-fi's using the cashed out 'equity' to pay the first and second and third mortgages . . . until the money ran out.  the house foreclosed, the bank(s) sold it off some $150k under value, just to get rid of it.

not sure we currently have a 'crash' - it more like prices are inflating, interest rates are going up, people can't afford the payments and banks are no longer writing mortgages to people who have no means to pay it back.


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## mla2ofus

That first paragraph is well said, chowderman! That crash was caused by people wanting "equity" in our society and they f***ed it up with no apology!


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## m1west

chowderman said:


> the 'Obama housing crash' was caused by the admin demanding banks write mortgages to anyone who could sign their name.
> those buyers could not afford the houses the bought, they defaulted, houses went into foreclosure, got sold off  dirt cheap because the banks wanted them off their books.
> 
> the couple across the street, for example.  he was a not high level state employee, she did not work/earn.  they sold their high $$ house in MD, bought here.  he did _three_ re-fi's using the cashed out 'equity' to pay the first and second and third mortgages . . . until the money ran out.  the house foreclosed, the bank(s) sold it off some $150k under value, just to get rid of it.
> 
> not sure we currently have a 'crash' - it more like prices are inflating, interest rates are going up, people can't afford the payments and banks are no longer writing mortgages to people who have no means to pay it back.


Pretty good analogy of the situation


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## FrancSevin

chowderman said:


> the 'Obama housing crash' was caused by the admin demanding banks write mortgages to anyone who could sign their name.
> those buyers could not afford the houses the bought, they defaulted, houses went into foreclosure, got sold off  dirt cheap because the banks wanted them off their books.
> 
> the couple across the street, for example.  he was a not high level state employee, she did not work/earn.  they sold their high $$ house in MD, bought here.  he did _three_ re-fi's using the cashed out 'equity' to pay the first and second and third mortgages . . . until the money ran out.  the house foreclosed, the bank(s) sold it off some $150k under value, just to get rid of it.
> 
> not sure we currently have a 'crash' - it more like prices are inflating, interest rates are going up, people can't afford the payments and banks are no longer writing mortgages to people who have no means to pay it back.


I don't recall a housing crash during Obama.  I may have been too focused watching him ruin our Healthcare system and the Justice department. 

I believe the great crash to which you are referring happed during the Bush 43 administration. Not because of his policies but that of the Fannie Mae.


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## m1west

FrancSevin said:


> I don't recall a housing crash during Obama.  I may have been too focused watching him ruin our Healthcare system and the Justice department.
> 
> I believe the great crash to which you are referring happed during the Bush 43 administration. Not because of his policies but that of the Fannie Mae.


There was a big housing crash in 2008, I bought my home that year. it wasn't until 2018 that it was worth what I paid in 2007


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## Melensdad

And here is the crash, as predicted by many.
Full stories are at the links. 
But clearly the market is in the tank.
There may still be some local hotspots in some regions but the market is clearly dropping fast.

From ZERO HEDGE:





						US New Home Sales Crashed In July, Lowest SAAR Since Jan 2016 | ZeroHedge
					

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero




					www.zerohedge.com
				



US New Home Sales Crashed In July, Lowest SAAR Since Jan 2016​US new home sales were expected to slide once again July but the 12.6% MoM crash was shocking (vs -2.5% exp). This pushed new home sales down 29.6% YoY​​

​​_Source: Bloomberg_​​This is the 6th monthly drop in new home sales in the last 7 months (with come notable downward revisions too).​​*This is the lowest SAAR for new home sales since Jan 2016*​​

​​_Source: Bloomberg_​​*Supply of new homes is soaring*, now at 10.9 months vs 9.2 in the prior month... That is the highest supply since March 2009...​​

​​_Source: Bloomberg_​​​And from MARKET WATCH:








						U.S. house values fell for the first time since 2012, Zillow says. Sellers and buyers are facing a very different housing market to 2020.
					

Industry experts say housing is in a recession. But this is very different from 2008.




					www.marketwatch.com
				




U.S. house values fell for the first time since 2012, Zillow says. Sellers and buyers are facing a very different housing market to 2020.​Industry experts say housing is in a recession. But this is very different from 2008​



​Zillow revised its forecast for the growth in home values to 2.4% through the end of July 2023. The current rate of growth is 16%.​
​The housing market isn’t crashing, but it’s definitely feeling the burn.​​After two frenzied years, home buying is cooling off as mortgage rates rise. Some experts in the field are calling it a “housing recession.” ​​U.S. home values fell in July by 0.1%, compared to the month before, a new Zillow report said.​While deceleration in home-price growth is typical for this time of the year, Zillow noted, the small decline is the first monthly dip since 2012. ​​The typical U.S. home value fell by $366 in July, and is now $357,107, as measured by the Zillow Home Value Index.​

CNBC reports:








						72% of recent homebuyers have regrets about their purchases. As the market cools, these steps can help you avoid disappointment
					

The hot seller's market in recent years prompted buyers to go above and beyond to seal the deals on their prospective homes, a recent survey finds.




					www.cnbc.com
				




72% of recent homebuyers have regrets about their purchases. As the market cools​





As the U.S. housing market cools, feverish competition for homes in the past couple of years has left 72% having regrets about their home purchases, according to a recent survey from Clever Real Estate.

The number-one reason for the buyer’s remorse: 30% of respondents said they spent too much money.

The second most common regret was rushing the home-buying process, with 30% saying their purchase decision was rushed and 26% indicating they bought too quickly.


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## m1west

And thats the way it will go, until inflation is reduced. When material and labor costs keep rising its hard for anything to lose value, there is still a housing shortage, but the prices and new interest rates have priced many from the market. But I am sure Blackrock and Vanguard are still buying them up at a feverish pace.


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## power1

If you buy a house and plan on using it as your home you will not be losing money.
If you buy a house as an investment you can lose as quickly as you can gain.


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## Melensdad

power1 said:


> If you buy a house and plan on using it as your home you will not be losing money.
> If you buy a house as an investment you can lose as quickly as you can gain.


If you buy a house and plan on using it as your home AND you lose your job, OR get transferred, OR divorced OR your plans are forced to change, OR the neighbors are jerks, OR the entire neighborhood goes into decline OR . . .


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## FrancSevin

m1west said:


> There was a big housing crash in 2008, I bought my home that year. it wasn't until 2018 that it was worth what I paid in 2007



Both Fannie may failures and the crash of 2008 were under Bush 43. 
Obama wasn't President until 2009.  Jus' sayin'


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## m1west

FrancSevin said:


> Both Fannie may failures and the crash of 2008 were under Bush 43.
> Obama wasn't President until 2009.  Jus' sayin'


I didn't mention Obama, but as long as we are talking about democrats. the bubble and crash was caused by forcing the banks to loan to folks that couldn't pay it back. " Every American should own a home " I believe that was a Bush gift to the American people. Another progressive. Any progressive be it D or R are the same.


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## power1

Melensdad said:


> If you buy a house and plan on using it as your home AND you lose your job, OR get transferred, OR divorced OR your plans are forced to change, OR the neighbors are jerks, OR the entire neighborhood goes into decline OR . . .


Before buying a house you should look at your own future and decide if you are going to have a job, or get transferred or divorced.  Before buying a house you should take a look at the neighborhood.  Sometimes people do not look past the end of their nose before jumping into something.


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## m1west

power1 said:


> If you buy a house and plan on using it as your home you will not be losing money.
> If you buy a house as an investment you can lose as quickly as you can gain.


Historically that is how generational wealth is built. Not only is it your home, its the largest purchase/investment most folks make in there lifetime.


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## chowderman

power1 said:


> Before buying a house you should look at your own future and decide if you are going to have a job, or get transferred or divorced.  Before buying a house you should take a look at the neighborhood.  Sometimes people do not look past the end of their nose before jumping into something.



a lot of companies now consider employees to be disposable assets.
they hire people when things pick up, when the quarterly profits go down they fire people.
the old rules of work hard, collect your gold watch and 20 year pension simply no longer apply.


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## power1

m1west said:


> Historically that is how generational wealth is built. Not only is it your home, its the largest purchase/investment most folks make in there lifetime.


But if you are buying it for an investment there are many ways to make the money faster.  The money you are paying for a home is money saved since you are not paying rent.  If you would deduct the money you would have paid in rent from what your house is worth it wouldn't seem like a good investment.


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## power1

chowderman said:


> a lot of companies now consider employees to be disposable assets.
> they hire people when things pick up, when the quarterly profits go down they fire people.
> the old rules of work hard, collect your gold watch and 20 year pension simply no longer apply.


Depends on what you do for a living.  There are many companies that hire people for long term.  Quite a few places I have worked there are people there who have fifty plus years working at the same place.  Some places the people working there have not ever had any other job in their life and they are retiring.


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## FrancSevin

chowderman said:


> a lot of companies now consider employees to be disposable assets.
> they hire people when things pick up, when the quarterly profits go down they fire people.
> the old rules of work hard, collect your gold watch and 20 year pension simply no longer apply.


Not quite true.  Right now, it is very difficult to find applicants, much less qualified applicants.  many companies are holding on to people that have skills and training because, when business picks up, new ones are scarce.  Sometimes keeping marginal employees. I know this on a personal basis.

Whether a company has invested in machinery, technologies or people, the investment is the same.  A trucking company would not scrap off old members of its fleet when new trucks are not available.  Same with drivers.  And that is a true situation today.

As forthe gold watch, old people are all I put on the payroll anymore.  Young ones have no intention of staying for any long term, much less the gold watch.  Don't blame the company for that.  


Right now, I have five old men who show up every day.  The youngsters, males and females, come and go.


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## power1

I went to work in a hydro electric plant many years ago.  Four people who were working there went to work there when they were seventeen years old.  That was their first job.  All four worked there until they were seventy years old.


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## m1west

power1 said:


> But if you are buying it for an investment there are many ways to make the money faster.  The money you are paying for a home is money saved since you are not paying rent.  If you would deduct the money you would have paid in rent from what your house is worth it wouldn't seem like a good investment.


historically property increases around 3% year over on average , 1,000,000.00 home = 300,000.00 increase in ten years, when the property is paid for, its still increasing in value and you are not paying rent anymore, so your kids then grandkids would be setting pretty. Notice I said generational wealth.   Imagine if you were on the receiving end of a oceanfront property bought by your grandfather in  San Diego. Also there are tax incentives. A second property could be rented for additional income. I sold a home in 2018 for $385,000.00 that I paid $134,000.00 in 1997. I lived there for a while then rented it out and bought the home I am in. The renter Paid the payment on the home, I got the $385,000.00


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## m1west

power1 said:


> I went to work in a hydro electric plant many years ago.  Four people who were working there went to work there when they were seventeen years old.  That was their first job.  All four worked there until they were seventy years old.


That is not the normal, most change gobs even industries several times in there working career. if you were operating a Hydro at Hoover Dam or Lake Powell you would likely be one of those.


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## m1west

FrancSevin said:


> Not quite true.  Right now, it is very difficult to find applicants, much less qualified applicants.  many companies are holding on to people that have skills and training because, when business picks up, new ones are scarce.  Sometimes keeping marginal employees. I know this on a personal basis.
> 
> Whether a company has invested in machinery, technologies or people, the investment is the same.  A trucking company would not scrap off old members of its fleet when new trucks are not available.  Same with drivers.  And that is a true situation today.
> 
> As forthe gold watch, old people are all I put on the payroll anymore.  Young ones have no intention of staying for any long term, much less the gold watch.  Don't blame the company for that.
> 
> 
> Right now, I have five old men who show up every day.  The youngsters, males and females, come and go.


Im the old man that shows up everyday at my shop.


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## UberBastid

m1west said:


> Im the old man that shows up everyday at my shop.


Same here.
Just had my 69th BD last week.

I bet you show up ON TIME.
Hair combed, teeth brushed.
Sober and awake and ready to work.

Damned scarce these days.


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## Melensdad

And now the institutional buyers are halting their home purchases.  Just another sign that the housing bubble is going to, or perhaps already has, burst.  It might be time for me to again resume buying and flipping house in a few months.  I got out when the bidding wars started and people were bidding above asking prices in marginal areas.  Looks like sanity is coming back.  And coming back quickly.






						The Other Shoe Drops: Blackstone Landlord Halts Home Purchases In 38 Cities As Market Crashes | ZeroHedge
					

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero




					www.zerohedge.com
				





Bloomberg reported that *Home Partners of America, the single-family landlord owned by Blackstone, the largest residential and commercial landlord in the US, will stop buying homes in 38 US cities, becoming the latest institutional investor to back away from an overheated housing market.*​​The company, which was acquired by Blackstone in June 2021 for $6 billion, told customers that as of Sept. 1, it is pausing applications and property submissions in Boise, Idaho; Fresno, California; Memphis, Tennessee, and 25 other areas. The company will go on hiatus in 10 additional cities on Oct. 1 (incidentally, Boise, ID is the city which saw explosive price increases during the covid pandemic, and has since then seen an unprecedented plunge with Redfin reporting that a record 70% of home sellers had dropped their asking price in July). . . ​
. . . Home Partners isn’t the first Wall Street institutional investor to back away from the US housing market, which reached a frenzied bubble during the first half of the year, a bubble which has since popped with both new and existing home sales collapsing at near record rates. . .​​

​


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## m1west

I guess the party can't last forever. Like you said if it slides far enough buy one rent it and flip on the next run


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## UberBastid

Melensdad said:


> And now the institutional buyers are halting their home purchases. Just another sign that the housing bubble is going to, or perhaps already has, burst.


Just a personal, anecdotal observation ... with an associated theory.

I am currently consulting with a large, residential property investor.   He currently holds four units and above ... up to 58 units for large residential properties in California and Oregon.   I won't say how many, or his name as you would recognize it, but his holdings are substantial.
These are definitely 'up scale' apartments with many amenities.  Groomed garden grounds, pool, spa.

We consider raising rents every January and send out notices in February.  California law won't allow us to raise rents more than 10% per annum, no matter what. 
So, we're looking at raising rents on a 2/1 by $140 a month - after a $130 raise just last year.

There is a meeting.  About six of us.  Accountants.  Brokers.  Bankers.  Economists.  
El Heffe says, "What is our vacancy rate now?   What was it this time last year?"
That was my department so I answered, "92% ... and 99%."
"So, our vacancy has gone up sharply.   Why?"
Since I am in charge of overseeing the filling of vacancies, and the local apartment managers report to me, I answer "Most of the people moving out are leaving the state.  They are young, upwardly mobile - and will chase the economy in a heartbeat."
Boss man says, "Will raising the rent on this demographic make them move out?"
"Not in my opinion.  A hundred bux doesn't mean that much to them.  The quality of life has declined noticeable in California, business is leaving -- young people don't want to live like that."

He nodded thoughtfully and said:  "I suspected that myself.   Raise the rent to the limit."

I believe that California is phucked ... in triplicate
If I wasn't as old as I am, I would bail.
But, I think that I'll be ok for the rest of MY run (which won't be long).


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## m1west

UberBastid said:


> Just a personal, anecdotal observation ... with an associated theory.
> 
> I am currently consulting with a large, residential property investor.   He currently holds four units and above ... up to 58 units for large residential properties in California and Oregon.   I won't say how many, or his name as you would recognize it, but his holdings are substantial.
> These are definitely 'up scale' apartments with many amenities.  Groomed garden grounds, pool, spa.
> 
> We consider raising rents every January and send out notices in February.  California law won't allow us to raise rents more than 10% per annum, no matter what.
> So, we're looking at raising rents on a 2/1 by $140 a month - after a $130 raise just last year.
> 
> There is a meeting.  About six of us.  Accountants.  Brokers.  Bankers.  Economists.
> El Heffe says, "What is our vacancy rate now?   What was it this time last year?"
> That was my department so I answered, "92% ... and 99%."
> "So, our vacancy has gone up sharply.   Why?"
> Since I am in charge of overseeing the filling of vacancies, and the local apartment managers report to me, I answer "Most of the people moving out are leaving the state.  They are young, upwardly mobile - and will chase the economy in a heartbeat."
> Boss man says, "Will raising the rent on this demographic make them move out?"
> "Not in my opinion.  A hundred bux doesn't mean that much to them.  The quality of life has declined noticeable in California, business is leaving -- young people don't want to live like that."
> 
> He nodded thoughtfully and said:  "I suspected that myself.   Raise the rent to the limit."
> 
> I believe that California is phucked ... in triplicate
> If I wasn't as old as I am, I would bail.
> But, I think that I'll be ok for the rest of MY run (which won't be long).


I feel the same way, when my son takes over the business, I may just do that. Some very nice properties right over the mountain in Minden, Gardenerville area of Nevada. Is also 1/2 way to the cabin. Prices are about the same as where I am now, It snows there a little in the winter, but I'm ok with that and its also cooler in the summer. As productive folks are replaced here in Ca. with useless eaters, the taxes will continue to rise along with fuel, food and everything else here.


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