Is the housing market starting to collapse?

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CULater
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Is the housing market starting to collapse?

Post by CULater » Thu May 23, 2019 12:20 pm

Image
Existing home sales were down again nationally (4.4%) in April (fourteenth month in a row of declining sales year on year). That is the longest stretch without a single positive month since the housing-market collapse that brought on the Great Recession.
http://thegreatrecession.info/blog/hous ... cted-here/

Any comments on this?
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Prahasaurus
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Re: Is the housing market starting to collapse?

Post by Prahasaurus » Thu May 23, 2019 12:26 pm

Not an expert, but isn't the housing market in the USA quite different across regions, states, even cities? Maybe some cities are in for a rough patch, with declining prices. But others seem to be growing, although perhaps just not as fast...

mptfan
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Re: Is the housing market starting to collapse?

Post by mptfan » Thu May 23, 2019 12:29 pm

How has the average sale price changed over the same time period? If there are fewer sales but the average sales price remains constant or increases I would not call that a collapse of the market.

ohai
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Re: Is the housing market starting to collapse?

Post by ohai » Thu May 23, 2019 12:29 pm

Wow, this blog sure is a piece of work. Has he pointed out all the times when he predicted recessions but nothing happened?

Regarding the current housing market, I do agree that it is disconnected from the reality of many buyers. The fact of the matter is that realtors and buyers dictate selling prices. If no one pays, they still won't drop prices, which is why volumes are always quoted in housing market statistics (unlike in a more efficient market, i.e. equities).

However, unless there is a severe credit crisis, I don't see why housing prices would collapse like in 2008. If no one actually defaults on their mortgages, there will be no foreclosures and people won't be forced to liquidate inventory. For the most part, jobs are strong, wages are strong or stable, GDP growth is still strong, and Fed has its finger on the "cut rates" button. Even if fewer buyers pay the pumped up prices, there's not going to be many low price prints either, for the reason stated above.

So in all, I think price action should be pretty boring unless something changes in the next few months. A "recession" in housing is not like a stock bear market. Prices will just not appreciate quickly for some time.
Last edited by ohai on Thu May 23, 2019 12:31 pm, edited 1 time in total.

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simplesimon
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Re: Is the housing market starting to collapse?

Post by simplesimon » Thu May 23, 2019 12:31 pm

We just bought our first house, so probably.

random_walker_77
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Re: Is the housing market starting to collapse?

Post by random_walker_77 » Thu May 23, 2019 12:32 pm

Presumably YoY is compared to the same (month) as the previous year to reflect seasonality?

I'd love to see data showing absolute numbers, and not just percentages. Also more history, say back through the 90s to help put this in context. Is -4.4% really that bad? What happened in '08 or '01?

Days on market would also be interesting to see.

Markets also tend to be very local. Around here, houses seem to be selling very very quickly. Seattle's market is down, but how bad is that after a huge run-up? And is the 2% price drop in Mountain View significant, or just noise? Possibly even reflecting a different mix of units being sold?

Finally, when the site is named "thegreatrecession.info", I'm going to take what they say with a grain of salt.

cableguy
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Re: Is the housing market starting to collapse?

Post by cableguy » Thu May 23, 2019 12:33 pm

On Long Island its a buyer's market in the $1M+ market. That cycle is coming to an end. I know of school districts on the north shore where you couldn't touch a 2 acre yard and house for under $2M. All day you see them at $1M now. And the taxes are $30K a year on those houses. That market is tanking. I think the under $1M market is still strong. I know things are relative, and outside of Cleveland OH you'd probably say $750K+ is like $1M+ on LI......

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Re: Is the housing market starting to collapse?

Post by ohai » Thu May 23, 2019 12:43 pm

cableguy wrote:
Thu May 23, 2019 12:33 pm
On Long Island its a buyer's market in the $1M+ market. That cycle is coming to an end. I know of school districts on the north shore where you couldn't touch a 2 acre yard and house for under $2M. All day you see them at $1M now. And the taxes are $30K a year on those houses. That market is tanking. I think the under $1M market is still strong. I know things are relative, and outside of Cleveland OH you'd probably say $750K+ is like $1M+ on LI......
Don't forget that SALT deduction changes have pummelled North East home prices. For these houses with $30k taxes, the loss of tax deduction on this amount for perpetuity, and assuming some modest growth, is worth hundreds of thousands of dollars.

In high end suburbs, what happens could be funny if it wasn't so unfortunate, and this is that houses of all sorts have compressed to very similar sticker prices. However, bigger houses have $40k tax, small house has $15k tax, and so on...

lukestuckenhymer
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Re: Is the housing market starting to collapse?

Post by lukestuckenhymer » Thu May 23, 2019 12:54 pm

Sold my house one year ago in May 2018 (suburban Chicago). Just this month, my same buyer sold it again for 4.8% above the price he bought it from me. I don't see a collapse.

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simplesimon
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Re: Is the housing market starting to collapse?

Post by simplesimon » Thu May 23, 2019 12:57 pm

lukestuckenhymer wrote:
Thu May 23, 2019 12:54 pm
Sold my house one year ago in May 2018. Just this month, my same buyer sold it again for 4.8% above the price he bought it from me. I don't see a collapse.
The only winners here are the agents, lawyers, and lenders.

lukestuckenhymer
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Re: Is the housing market starting to collapse?

Post by lukestuckenhymer » Thu May 23, 2019 12:59 pm

simplesimon wrote:
Thu May 23, 2019 12:57 pm
lukestuckenhymer wrote:
Thu May 23, 2019 12:54 pm
Sold my house one year ago in May 2018. Just this month, my same buyer sold it again for 4.8% above the price he bought it from me. I don't see a collapse.
The only winners here are the agents, lawyers, and lenders.
I wasn't saying the guy was smart... He was young and his engagement apparently broke off.

garlandwhizzer
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Re: Is the housing market starting to collapse?

Post by garlandwhizzer » Thu May 23, 2019 1:18 pm

simplesimon wrote in regard to the question is the housing market starting to collapse:

We just bought our first house, so probably.
The same thing happens in the stock market and on the Forum is known as the "nedsaid effect." It seems that when nedsaid buys a stock or fund, it often immediately drops in value. The same thing happens to me so I believe nedsaid may be on to something real. However I believe both of us have done pretty well investing over the long run. Looking long term and paying as little attention as possible to short term headlines and fluctuations is however almost always the best strategy. I have learned to expect that whatever I buy will tank short term, but I plan to hold onto it for a long time during which it has typically done just fine. Many investing mistakes come from reliance on short term focus and current headlines. My advice is to carefully scrutinize anything you buy--a house, a stock fund, etc-- and to choose only quality assets that have both upside promise and downside protection. Market index funds and well chosen factor index funds are in my opinion quality assets as is a house that you enjoy living in. If you do that, I believe in the end you'll win.

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quantAndHold
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Re: Is the housing market starting to collapse?

Post by quantAndHold » Thu May 23, 2019 1:34 pm

In 2007 I predicted the top when my tennis coach, a guy who worked part time teaching middle aged ladies how to hit forehands, bought a condo.

No completely unlikely person I know has bought a house recently. So I think we’re safe.

Seriously, though, credit standards are higher, and the mortgage market isn’t the ticking time bomb that it was 12 years ago. I assume we’ve gone back to the way things were before, where housing markets go up and down due to local conditions.

On the ground in San Diego, things are selling well and prices are still rising. No clue what’s happening in the rest of the country.

jpelder
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Re: Is the housing market starting to collapse?

Post by jpelder » Thu May 23, 2019 1:40 pm

I know that a lot of people who had been considering buying took the plunge last spring/summer after the Fed started raising interest rates (and mortgage rates started rising, too). I'm one of those people. I locked in my 4% on a 30-year fixed, knowing that I wasn't likely to see rates that low for a long time.
Here in the Charlotte, NC area, price growth has slowed a little compared with a few years ago, but inventories are still really small, especially in the "affordable family" range ($150k-$300k for a 3-4 BR). Most houses are listing, offered, and accepted within a day or 2. But we're a fast-growing area.

As always, real estate is hyperlocal. Growing areas are booming, while areas losing population or staying steady might see slowdowns or crashes. It does seem that lending standards are tighter now than in 2005-2008, so a slowdown won't lead to so many foreclosures.

thoughtware
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Re: Is the housing market starting to collapse?

Post by thoughtware » Thu May 23, 2019 2:03 pm

simplesimon wrote:
Thu May 23, 2019 12:31 pm
We just bought our first house, so probably.
I know, right? I was thinking the same thing. :sharebeer

Angst
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Re: Is the housing market starting to collapse?

Post by Angst » Thu May 23, 2019 2:08 pm

ohai wrote:
Thu May 23, 2019 12:43 pm
cableguy wrote:
Thu May 23, 2019 12:33 pm
On Long Island its a buyer's market in the $1M+ market. That cycle is coming to an end. I know of school districts on the north shore where you couldn't touch a 2 acre yard and house for under $2M. All day you see them at $1M now. And the taxes are $30K a year on those houses. That market is tanking. I think the under $1M market is still strong. I know things are relative, and outside of Cleveland OH you'd probably say $750K+ is like $1M+ on LI......
Don't forget that SALT deduction changes have pummeled North East home prices. For these houses with $30k taxes, the loss of tax deduction on this amount for perpetuity, and assuming some modest growth, is worth hundreds of thousands of dollars.

In high end suburbs, what happens could be funny if it wasn't so unfortunate, and this is that houses of all sorts have compressed to very similar sticker prices. However, bigger houses have $40k tax, small house has $15k tax, and so on...
I imagine that could be a big factor. Another thought is that the owners (and buyers) of $1M+ houses along the north shore of Long Island are of a common mind about the basics of the scientific method and climate science and the implications for the long term value of these properties?

[Edit] Ah, it looks like Bloomberg thinks we're both on to something here:
https://www.bloomberg.com/news/articles/2018-06-19/taxpayers-in-the-hamptons-among-the-most-exposed-to-rising-seas
Last edited by Angst on Thu May 23, 2019 2:19 pm, edited 1 time in total.

softwaregeek
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Re: Is the housing market starting to collapse?

Post by softwaregeek » Thu May 23, 2019 2:09 pm

It is here is Silicon Valley, for sure.

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Re: Is the housing market starting to collapse?

Post by Grt2bOutdoors » Thu May 23, 2019 2:12 pm

quantAndHold wrote:
Thu May 23, 2019 1:34 pm

Seriously, though, credit standards are higher, and the mortgage market isn’t the ticking time bomb that it was 12 years ago. I assume we’ve gone back to the way things were before, where housing markets go up and down due to local conditions.

No clue what’s happening in the rest of the country.
Yes, very high credit standards :oops: in my neck of the woods, the only mortgages people are getting are FHA 3% down. That program is the worse ever as all it does is dilute credit standards. If you are only putting down 3%, then you aren’t owning, you are renting. It’s amazing that people think the housing market is healthy, amazing!
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ohai
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Re: Is the housing market starting to collapse?

Post by ohai » Thu May 23, 2019 2:21 pm

The other obvious difference between today and 2007 is that the financial system is much, much more secure than it was before the first crisis. When Lehman, Bear Stearns, AIG, and other huge institutions are imminently failing, all asset prices will be in severe distress. We'd need a much bigger shock today to see the same sort of panic scenario, if it is even possible. Most likely, we will face years of stagnant prices, rather than a violent real estate price shock like before.

radeon962
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Re: Is the housing market starting to collapse?

Post by radeon962 » Thu May 23, 2019 4:09 pm

Seems strong in our area of SE Michigan. 3 homes sold within a few days of listing and all had multiple offers and sales ended up for more than they listed.

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Re: Is the housing market starting to collapse?

Post by willthrill81 » Thu May 23, 2019 4:24 pm

Housing is very strong in our area (Eastern Washington state). It's a strong seller's market, with homes being sold for above asking nearly all the time.
Builders in our area just can't keep up, and it's been several years since I've seen a home be built on speculation in our area.

Home sales slowing could be due to a simple lack of supply.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Is the housing market starting to collapse?

Post by 5th_Dimension » Thu May 23, 2019 4:34 pm

Housing prices in the Inland Empire area of SoCal have been dropping, and the houses are sitting on the market longer. This is especially true in the >$500,000 range. Houses around $400,000 or less seem to be moving faster.
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welsie
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Re: Is the housing market starting to collapse?

Post by welsie » Thu May 23, 2019 4:41 pm

The housing market can be cyclical without collapsing. That is like saying because the S&P 500 is down today it must mean the stock market is collapsing.

At least locally for me (in Los Angeles), I noticed housing prices shoot up over the last few years, people see this signal and list their houses, well they sit because there isn't enough consumer demand at those high prices. Over time prices drop, purchases increase, at lower prices fewer people list, this encourages an increase in prices for existing inventory...the cycle continues.

People often misinterpret highly visible prices for average market prices, they are not the same thing. This is why so many people move to Los Angeles trying to get into Hollywood, they see actors making millions of dollars, not $2,000 part time actor wages and full-time Starbucks employees wages.

Big Dog
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Re: Is the housing market starting to collapse?

Post by Big Dog » Thu May 23, 2019 4:45 pm

some SoCal prices seemed to have rebounded in April. Of course, a one-month data point is not a trend.
Single family home prices in Orange, Los Angeles and San Diego counties changed course, climbing up in April after falling year over year in March.
https://www.dailynews.com/2019/05/17/sl ... alifornia/

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unclescrooge
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Re: Is the housing market starting to collapse?

Post by unclescrooge » Thu May 23, 2019 9:28 pm

quantAndHold wrote:
Thu May 23, 2019 1:34 pm
In 2007 I predicted the top when my tennis coach, a guy who worked part time teaching middle aged ladies how to hit forehands, bought a condo.

No completely unlikely person I know has bought a house recently. So I think we’re safe.

Seriously, though, credit standards are higher, and the mortgage market isn’t the ticking time bomb that it was 12 years ago. I assume we’ve gone back to the way things were before, where housing markets go up and down due to local conditions.

On the ground in San Diego, things are selling well and prices are still rising. No clue what’s happening in the rest of the country.
Actually prices in the million dollar plus range in San Diego have softened over the past several months.

I'm not calling a receipt or a major decline, but sellers are dropping prices in that price range.

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unclescrooge
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Re: Is the housing market starting to collapse?

Post by unclescrooge » Thu May 23, 2019 9:29 pm

jpelder wrote:
Thu May 23, 2019 1:40 pm
I know that a lot of people who had been considering buying took the plunge last spring/summer after the Fed started raising interest rates (and mortgage rates started rising, too). I'm one of those people. I locked in my 4% on a 30-year fixed, knowing that I wasn't likely to see rates that low for a long time.
Here in the Charlotte, NC area, price growth has slowed a little compared with a few years ago, but inventories are still really small, especially in the "affordable family" range ($150k-$300k for a 3-4 BR). Most houses are listing, offered, and accepted within a day or 2. But we're a fast-growing area.

As always, real estate is hyperlocal. Growing areas are booming, while areas losing population or staying steady might see slowdowns or crashes. It does seem that lending standards are tighter now than in 2005-2008, so a slowdown won't lead to so many foreclosures.
I'm happy to take the other side of that bet.

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unclescrooge
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Re: Is the housing market starting to collapse?

Post by unclescrooge » Thu May 23, 2019 9:31 pm

Grt2bOutdoors wrote:
Thu May 23, 2019 2:12 pm
quantAndHold wrote:
Thu May 23, 2019 1:34 pm

Seriously, though, credit standards are higher, and the mortgage market isn’t the ticking time bomb that it was 12 years ago. I assume we’ve gone back to the way things were before, where housing markets go up and down due to local conditions.

No clue what’s happening in the rest of the country.
Yes, very high credit standards :oops: in my neck of the woods, the only mortgages people are getting are FHA 3% down. That program is the worse ever as all it does is dilute credit standards. If you are only putting down 3%, then you aren’t owning, you are renting. It’s amazing that people think the housing market is healthy, amazing!
In 2005 I bought an investment property for $170k where I walked away from closing with a check for $20k.

Compared to that, 3% down is a massive amount! :mrgreen:

Goal33
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Re: Is the housing market starting to collapse?

Post by Goal33 » Thu May 23, 2019 9:39 pm

softwaregeek wrote:
Thu May 23, 2019 2:09 pm
It is here is Silicon Valley, for sure.
Is it down half a percent?
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SovereignInvestor
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Re: Is the housing market starting to collapse?

Post by SovereignInvestor » Thu May 23, 2019 9:39 pm

No.

Existing home sales just hit a cycle high this month.

Bears cherry pick the data they choose.

How can the housing market be collapsing of new home sales just hit cycle high?

Quickfoot
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Re: Is the housing market starting to collapse?

Post by Quickfoot » Thu May 23, 2019 9:41 pm

It's more than likely not going to collapse, it will likely gradually slow until inflation makes prices more reasonable. Very unlikely we will see anything like the 2008 collapse again in our lifetimes. Sales are down but so is inventory and starts in most places, makes sense sales would be down when there's little to buy. Values have increased sharply but they've really just recovered from a decade of little to no growth and wound up where they would have been if 2008 hadn't happened.

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Re: Is the housing market starting to collapse?

Post by SovereignInvestor » Thu May 23, 2019 9:43 pm

Angst wrote:
Thu May 23, 2019 2:08 pm
ohai wrote:
Thu May 23, 2019 12:43 pm
cableguy wrote:
Thu May 23, 2019 12:33 pm
On Long Island its a buyer's market in the $1M+ market. That cycle is coming to an end. I know of school districts on the north shore where you couldn't touch a 2 acre yard and house for under $2M. All day you see them at $1M now. And the taxes are $30K a year on those houses. That market is tanking. I think the under $1M market is still strong. I know things are relative, and outside of Cleveland OH you'd probably say $750K+ is like $1M+ on LI......
Don't forget that SALT deduction changes have pummeled North East home prices. For these houses with $30k taxes, the loss of tax deduction on this amount for perpetuity, and assuming some modest growth, is worth hundreds of thousands of dollars.

In high end suburbs, what happens could be funny if it wasn't so unfortunate, and this is that houses of all sorts have compressed to very similar sticker prices. However, bigger houses have $40k tax, small house has $15k tax, and so on...
I imagine that could be a big factor. Another thought is that the owners (and buyers) of $1M+ houses along the north shore of Long Island are of a common mind about the basics of the scientific method and climate science and the implications for the long term value of these properties?

[Edit] Ah, it looks like Bloomberg thinks we're both on to something here:
https://www.bloomberg.com/news/articles/2018-06-19/taxpayers-in-the-hamptons-among-the-most-exposed-to-rising-seas
The north shore in Nassau county is generally at very high levels above sea level so thst wouldn't be a big factor. It's not the same as Hamptons which are on south short and further east and low sea level.

Not trying to talk politics just facts that if the other party gets full control it's likey SALT is fully restored so it may be great opportunity to buy these large houses on the cheap?

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willthrill81
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Re: Is the housing market starting to collapse?

Post by willthrill81 » Thu May 23, 2019 10:00 pm

Interestingly, the median sales price of houses has dropped from a high of $337,900 set in the fourth quarter of 2017 to $307,700, a level it was last at in the third quarter of 2016.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Is the housing market starting to collapse?

Post by anoop » Thu May 23, 2019 10:43 pm

There is only one blog you need to read for housing.
https://www.calculatedriskblog.com/

There is absolutely no sign of collapse. He's not a pollyanna -- he saw housing bubble. Prices are actually still a good bit below that peak in real terms.

Most bloggers writing bad things about housing are practicing yellow journalism.

Anytime I need a negative headline for housing, I visit CR to get the real story.

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Re: Is the housing market starting to collapse?

Post by WWJBDo » Thu May 23, 2019 10:50 pm

anoop wrote:
Thu May 23, 2019 10:43 pm
There is only one blog you need to read for housing.
https://www.calculatedriskblog.com/

There is absolutely no sign of collapse. He's not a pollyanna -- he saw housing bubble. Prices are actually still a good bit below that peak in real terms.

Most bloggers writing bad things about housing are practicing yellow journalism.

Anytime I need a negative headline for housing, I visit CR to get the real story.
+1
I've been following Calculated Risk for years, and Bill McBride is my reality check when I go to ZeroHedge and start getting arrhythmias. Read CR and then make your own decision.
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Re: Is the housing market starting to collapse?

Post by softwaregeek » Thu May 23, 2019 10:50 pm

Goal33 wrote:
Thu May 23, 2019 9:39 pm
softwaregeek wrote:
Thu May 23, 2019 2:09 pm
It is here is Silicon Valley, for sure.
Is it down half a percent?
10 percent off highs in six months and dropping like a stone. Supply coming out of the woodwork as investors and old timers are afraid again.

anoop
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Re: Is the housing market starting to collapse?

Post by anoop » Thu May 23, 2019 10:56 pm

softwaregeek wrote:
Thu May 23, 2019 10:50 pm
Goal33 wrote:
Thu May 23, 2019 9:39 pm
softwaregeek wrote:
Thu May 23, 2019 2:09 pm
It is here is Silicon Valley, for sure.
Is it down half a percent?
10 percent off highs in six months and dropping like a stone. Supply coming out of the woodwork as investors and old timers are afraid again.
A different view
https://www.calculatedriskblog.com/2019 ... ine_9.html

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Re: Is the housing market starting to collapse?

Post by HEDGEFUNDIE » Thu May 23, 2019 11:00 pm

softwaregeek wrote:
Thu May 23, 2019 10:50 pm
Goal33 wrote:
Thu May 23, 2019 9:39 pm
softwaregeek wrote:
Thu May 23, 2019 2:09 pm
It is here is Silicon Valley, for sure.
Is it down half a percent?
10 percent off highs in six months and dropping like a stone. Supply coming out of the woodwork as investors and old timers are afraid again.
My house value in San Mateo County has been flat from 12 months ago to today. Source: mortgage lender appraisals.

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Watty
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Re: Is the housing market starting to collapse?

Post by Watty » Thu May 23, 2019 11:14 pm

This web site has a lot of interesting data by metropolitan area.

https://www.nar.realtor/research-and-st ... ordability

Here is the PDF of the single family homes through the first quarter of 2019.

https://www.nar.realtor/sites/default/f ... -05-14.pdf

You can see how the fourth quarter of 2018 compares to the first quarter of 2019 if you look at the two next to the last columns.

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GKSD
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Re: Is the housing market starting to collapse?

Post by GKSD » Thu May 23, 2019 11:16 pm

Doesn't feel like it in my neck of the woods (southern California). Good homes are going within a weekend, at asking price or higher. Job market is tight and strong, mortgage rates are low. Seems like plenty of demand out there.

BanditKing
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Re: Is the housing market starting to collapse?

Post by BanditKing » Thu May 23, 2019 11:20 pm

Sold my condo earlier this year, closing in April (Madison, WI).

Paid $150k in 2015, sold for $210k in 2019. However, two other units in my complex sold in summer of 2018 for $220k and $225k.

Housing in Madison is really expensive (relative to past prices), to the point that more and more can't afford to buy. This in turn has lead to skyrocketing rental costs as well. There's a lot more factors in play (a large tech employer, for example), but I think prices are getting a little flat.

I chose to rent in my new locale.

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Re: Is the housing market starting to collapse?

Post by Bacchus01 » Fri May 24, 2019 6:30 am

quantAndHold wrote:
Thu May 23, 2019 1:34 pm
In 2007 I predicted the top when my tennis coach, a guy who worked part time teaching middle aged ladies how to hit forehands, bought a condo.

No completely unlikely person I know has bought a house recently. So I think we’re safe.

Seriously, though, credit standards are higher, and the mortgage market isn’t the ticking time bomb that it was 12 years ago. I assume we’ve gone back to the way things were before, where housing markets go up and down due to local conditions.

On the ground in San Diego, things are selling well and prices are still rising. No clue what’s happening in the rest of the country.
In 2007 you predicted the top, which was in 2005. Pretty insightful.

runner540
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Re: Is the housing market starting to collapse?

Post by runner540 » Fri May 24, 2019 6:55 am

WWJBDo wrote:
Thu May 23, 2019 10:50 pm
anoop wrote:
Thu May 23, 2019 10:43 pm
There is only one blog you need to read for housing.
https://www.calculatedriskblog.com/

There is absolutely no sign of collapse. He's not a pollyanna -- he saw housing bubble. Prices are actually still a good bit below that peak in real terms.

Most bloggers writing bad things about housing are practicing yellow journalism.

Anytime I need a negative headline for housing, I visit CR to get the real story.
+1
I've been following Calculated Risk for years, and Bill McBride is my reality check when I go to ZeroHedge and start getting arrhythmias. Read CR and then make your own decision.
In my area, the hype and prices peaked last summer. CR is good and he AND his blog partner Doris "Tanta" Dungey (who was a mortgage banker) made the call in the last bubble, but that doesn't mean he's infallible. I think most people have missed how much lending standards have been stretched to get more marginal buyers in the market (and the last buyer sets the prices). Not just FHA loans with low down payments: Fannie and Freddie allow 50% DTI, 0-3% down, low credit scores, etc. Housing cycles are years, not weeks or months.

I keep an eye on these sources as well:
Buy vs rent for 20 large cities: https://business.fau.edu/departments/fi ... ent-index/
Detailed monthly reports on housing finance: http://www.aei.org/publication/aei-hous ... 2018-data/

Other buyers who were more concerned about just buying something, than value) have probably been removed from the market due to policy changes, and are no longer pushing prices up on the margin:
Chinese buyers (capital controls in China making it harder to get money out)
Criminals trying to launder money (new regulations that expanded money laundering rules for cash house purchases by shell companies): Regulations started with requiring reporting of >$1MM in NYC and Miami. Last year it was expanded to $300k+ deals and many more cities (Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, Miami, New York, San Antonio, San Diego, San Francisco, and Seattle.)

TheOscarGuy
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Re: Is the housing market starting to collapse?

Post by TheOscarGuy » Fri May 24, 2019 7:05 am

CULater wrote:
Thu May 23, 2019 12:20 pm

Any comments on this?
That you were right predicting this :)
I think housing data is highly localized, and I would not use the word collapse. Certainly where we live it seems housing prices have been on a steady increase. I personally am not reading too much into this.

JBeck
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Re: Is the housing market starting to collapse?

Post by JBeck » Fri May 24, 2019 7:10 am

Housing on a tear in NE Ohio

Bacchus01
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Re: Is the housing market starting to collapse?

Post by Bacchus01 » Fri May 24, 2019 7:18 am

Near us (Milwaukee NW subs) it doesn’t seem like it ever recovered. My house appraised recently at almost exactly what I paid in 2010. Prices that I see on the market don’t seem to be rising much. There is very little speculative building going on. That said, builders are backed up at least a year or more. They state they are only doing build to order right now and have not re-staffed. Only taking high profit jobs even if it means less of them.

Re-sale is moving quickly, but pricing is not getting pushed up much. Rentals have not changed much at all.

jpelder
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Location: Charlotte, NC

Re: Is the housing market starting to collapse?

Post by jpelder » Fri May 24, 2019 7:41 am

unclescrooge wrote:
Thu May 23, 2019 9:29 pm
jpelder wrote:
Thu May 23, 2019 1:40 pm
I know that a lot of people who had been considering buying took the plunge last spring/summer after the Fed started raising interest rates (and mortgage rates started rising, too). I'm one of those people. I locked in my 4% on a 30-year fixed, knowing that I wasn't likely to see rates that low for a long time.
Here in the Charlotte, NC area, price growth has slowed a little compared with a few years ago, but inventories are still really small, especially in the "affordable family" range ($150k-$300k for a 3-4 BR). Most houses are listing, offered, and accepted within a day or 2. But we're a fast-growing area.

As always, real estate is hyperlocal. Growing areas are booming, while areas losing population or staying steady might see slowdowns or crashes. It does seem that lending standards are tighter now than in 2005-2008, so a slowdown won't lead to so many foreclosures.
I'm happy to take the other side of that bet.
The interest rate bet? I wager you 2 units of extraordinary approbation if mortgage interest rates drop in the next 5 years. And hey, if they drop a bunch, I can always refinance...

tea_pirate
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Re: Is the housing market starting to collapse?

Post by tea_pirate » Fri May 24, 2019 7:48 am

Hope so. Tired of hearing these new home "owners" (with like 5% equity, LOL) gather round at work and brag about their Zestimates(TM). Can't wait until I can flip the script on all these millennials who drank the Kool-Aid and bought a home way beyond their means, then have the audacity to tell me "renting is stupid and you're throwing money away."

(In hindsight) mid-2018 felt very toppy to me compared to now. I don't think the housing market will drop very far with the way the economy is going currently, but it seems fragile enough (prices at 5x median income in my area) that even a minor recession with some job losses would put a decent dent in housing prices.

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Nate79
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Re: Is the housing market starting to collapse?

Post by Nate79 » Fri May 24, 2019 8:20 am

Inventory seems very low here in our mid Atlantic neighborhood. There are zero houses for sale in our neighborhood of about 150 homes. When we moved here 6 months ago there were multiple homes for sale. They all sold and no new homes came on the market.

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CULater
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Re: Is the housing market starting to collapse?

Post by CULater » Fri May 24, 2019 9:40 am

Nate79 wrote:
Fri May 24, 2019 8:20 am
Inventory seems very low here in our mid Atlantic neighborhood. There are zero houses for sale in our neighborhood of about 150 homes. When we moved here 6 months ago there were multiple homes for sale. They all sold and no new homes came on the market.
I've noticed that too. Very few dwellings up for sale compared to the usual and the prices seem way too high now. But will that start to crack soon?
On the internet, nobody knows you're a dog.

LiterallyIronic
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Re: Is the housing market starting to collapse?

Post by LiterallyIronic » Fri May 24, 2019 9:51 am

Market still on a roll here in Utah. According to Zillow's estimate, our house is worth 23% more than it was when we bought it a year-and-a-half ago.

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