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It's pretty obvious we are headed for a massive housing and RE bust that will make 2007/2008 look easy.
7% rates are way too high on the average $350K home. Housing prices are coming down in some areas. In other desirable areas with low inventory it's not as relevant and many are paying cash. But I foresee prices dropping severely and trillions of dollars in value evaporating leaving owners and banks upside down in a way we've never seen before.
Give us the dates when this massive bust is happening so we can ridicule you when it doesn't happen. Which real estate funds are your short right now???
In Europe(Germany, Italy, the Netherlands), house prices are dropping already significantly because of the increased interest rates and credit tightening despite a housing shortage and a shortage of land to build on. Everybody was saying prices never could or would drop. This time would be different …
I’m surprised this is isn’t happening in the US yet. Maybe it is happening already but realtors, sellers and the media are still in denial. I also believe we will see a 2008 or worse level crash. Our friends house dropped 20% in asking price and still won’t sell while last year people were overbidding on similar homes with last years inflated asking prices. New listings are on the market for 33% under last years asking prices and these actually do sell.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by Hemlock140
Here where the median home price is already down 22.5% from last year, but that's still at $1.5 million. There have been very few homes on the market in the last few months but they have still sold within 2-3 weeks. There is a new development of 35 homes starting at $2 million, all but 10 are sold. I think the big difference now is that most people can hold off selling until interest rates go down, but if they do sell there are still people that can pay cash or afford the payment at 7%.
^confirming this
Bidding wars in Kirkland/Juanita/Woodinville WA. Our RE said the market is rebounding with low inventory.
We introduce a young lady to our RE. First time out and she was shown just, 4 condos in this area, mid May. She place a high cap, escalating bid and won . She avoided Redmond as too expensive???
yhmv
Here in Australia prices dropped last year and are now starting to increase again, despite interest rates continuing to increase. There is a big shortage of rental accommodation and now that immigration and foreign students are returning en masse, that will only increase the pressure on rentals.
Thank you. In 2008 we saw this, people hugely upside down walked away from their homes. And, rates and prices were not as high as they are now. Financing falls through on sale after sale...the bank losses coupled with far fewer mortgages being inked is going to add up. I'm not saying the market isn't silly, normalization of prices is needed, but 7% is just too high, gonna kill the housing market and the banks.
12% interest rates didn't kill the market much in the early 80s, why would 7% do so now?
Are banks the only source of mortgage funds, or are there other entities interested in making money off of current rates?
It's pretty obvious we are headed for a massive housing and RE bust that will make 2007/2008 look easy.
Wondering what factors you think will make this one worse than 07/08. There was a lot more involved then than just declining prices leading to massive defaults.
there sure was . banks had no money to loan as credit markets froze .
we sold two of our manhattan co-ops in 2008 .
both buyers took. 6 months to close because every time a closing date came the banks said sorry no money .
the only sold for 10% less then the all time high at that time so prices were not down much .
but a frozen credit market was killer
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