Current situation and housing market

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uberdoc
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Current situation and housing market

Post by uberdoc » Sat Mar 14, 2020 9:50 am

Hi,
I am about to put offer on a house. What do you all think about the impact of coronavirus on the housing market? Should I wait a little bit before putting an offer? Should I ask for a price cut?
Thanks.

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Sandtrap
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Re: Current situation and housing market

Post by Sandtrap » Sat Mar 14, 2020 9:53 am

uberdoc wrote:
Sat Mar 14, 2020 9:50 am
Hi,
I am about to put offer on a house. What do you all think about the impact of coronavirus on the housing market? Should I wait a little bit before putting an offer? Should I ask for a price cut?
Thanks.
Unrelated factors. Housing Market vs Corona Virus = "Apples" vs "Metric Screwdrivers"

Put your offer in.
Do not ask for a price cut based on the corona virus.
Enjoy your new home.

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

Topic Author
uberdoc
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Re: Current situation and housing market

Post by uberdoc » Sat Mar 14, 2020 10:02 am

Thanks. What about delays in closing due to impending slowdown? Also, lenders have artificially increases mortgage rates to discourage new applications. How do I plan for that?

delamer
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Re: Current situation and housing market

Post by delamer » Sat Mar 14, 2020 10:09 am

uberdoc wrote:
Sat Mar 14, 2020 10:02 am
Also, lenders have artificially increases mortgage rates to discourage new applications.
What evidence do you have of that?

Topic Author
uberdoc
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Re: Current situation and housing market

Post by uberdoc » Sat Mar 14, 2020 10:12 am

Bankrate has put a banner on its website:
You may find that advertised mortgage rates are higher than expected right now. Market factors have caused a surge in applications, which has exceeded lenders’ capacity levels and therefore impacted displayed rates.

Submit your email and we'll let you know when displayed rates are back to market levels.

Freetime76
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Re: Current situation and housing market

Post by Freetime76 » Sat Mar 14, 2020 12:26 pm

Just talk to your bank. Are you not preapproved with a locked in rate??
As a seller, if I received an offer asking for a virus discount, I’d ask my agent if it’s a joke. :shock:

Freetime76
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Re: Current situation and housing market

Post by Freetime76 » Sat Mar 14, 2020 12:29 pm

uberdoc wrote:
Sat Mar 14, 2020 10:02 am
Thanks. What about delays in closing due to impending slowdown? Also, lenders have artificially increases mortgage rates to discourage new applications. How do I plan for that?
P.S. Didn’t the Fed drop rates ?
If your offer has a financing contingency with specific terms, you’ll be protected in case of bank drama (delays, 10% interest rate, etc.).

ETA “Submit your email and we'll let you know when displayed rates are back to market levels.” I think that means give bankrate your email, and they’ll email you incessantly until you use one of their lenders...and then they’ll keep emailing you.

boogiehead
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Re: Current situation and housing market

Post by boogiehead » Sat Mar 14, 2020 12:51 pm

uberdoc wrote:
Sat Mar 14, 2020 9:50 am
Hi,
I am about to put offer on a house. What do you all think about the impact of coronavirus on the housing market? Should I wait a little bit before putting an offer? Should I ask for a price cut?
Thanks.
I am in the same boat... I was pre-qualified for a new build in my area and they just released a new phase this week and to my surprise they increased the price from the last phase by 5% (I'm thinking they banking that with lower interest rates people would have "more money" although I just saw rates actually went up the past couple weeks).... I told the sales consultant thanks, but no thanks I'll wait for later phase to see how things play out and she gave me another follow-up call to confirm my decision. I'm guessing there were no takers on the pre-qualified list :D

To me the biggest risk is that there is so much uncertainty right now and almost no economic activities (besides people hoarding basic necessities) which I believe will most likely lead to a recession so I'm holding off for now unless there is an unbelievable deal.

Topic Author
uberdoc
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Re: Current situation and housing market

Post by uberdoc » Sat Mar 14, 2020 3:54 pm

There is a spectacular house above my price range. I offered a price for that house within my limits. I did not ask for a specific coronavirus discount. Let's see what happens. I can wait a few more weeks for sure.

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physixfan
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Re: Current situation and housing market

Post by physixfan » Sat Mar 14, 2020 4:06 pm

I my opinion, house price is going to go down in a few months. I would wait for the unemployment rate to rise to a significant level and then buy a new house.

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Sandtrap
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Re: Current situation and housing market

Post by Sandtrap » Sat Mar 14, 2020 4:40 pm

uberdoc wrote:
Sat Mar 14, 2020 3:54 pm
There is a spectacular house above my price range. I offered a price for that house within my limits. I did not ask for a specific coronavirus discount. Let's see what happens. I can wait a few more weeks for sure.
The counter offer will show you how much the seller is motivated.
j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

Topic Author
uberdoc
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Re: Current situation and housing market

Post by uberdoc » Sat Mar 14, 2020 4:45 pm

Slim chances unless I go the news media and declare myself corona positive after visiting that house. :)

LittleMaggieMae
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Re: Current situation and housing market

Post by LittleMaggieMae » Sat Mar 14, 2020 5:01 pm

uberdoc wrote:
Sat Mar 14, 2020 9:50 am
Hi,
I am about to put offer on a house. What do you all think about the impact of coronavirus on the housing market? Should I wait a little bit before putting an offer? Should I ask for a price cut?
Thanks.
If the house ticked off all the things you want in a house - put in your offer otherwise keep looking. If the house is overpriced Ask for a price cut because of some deficiency with the house YOU will have to deal with after purchase -- a 20 year old roof or a gravel driveway needs to be paved or the entire house has been painted grey and you HATE grey and will have to paint before moving in... Asking for a price cut for the impact of the coronavirus is like asking them to drop the price because the stock markets down or because you only got a 2% raise... basically a joke.

Topic Author
uberdoc
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Re: Current situation and housing market

Post by uberdoc » Mon Mar 16, 2020 4:17 pm

Update: Seller accepted our offer. Uncertain what to do next? Although my job is kind of secure, who knows what holds in future?

The Broz
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Re: Current situation and housing market

Post by The Broz » Mon Mar 16, 2020 4:35 pm

uberdoc wrote:
Mon Mar 16, 2020 4:17 pm
Update: Seller accepted our offer. Uncertain what to do next? Although my job is kind of secure, who knows what holds in future?
YAY! Well done! If it is an offer you can afford and you feel like the job is ok, proceed as planned!

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Go Blue 99
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Re: Current situation and housing market

Post by Go Blue 99 » Mon Mar 16, 2020 4:53 pm

We are house hunting right now. We're looking in a pretty hot area and we're fairly picky buyers. So if something pops up that we love, we won't hesitate. But with a potential recession coming, I'd be fine living in an apartment and waiting for a better deal (though my wife strongly prefers to be in a house). Also, the recent spike in mortgage rates isn't helping my buying mood.

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fredflinstone
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Re: Current situation and housing market

Post by fredflinstone » Mon Mar 16, 2020 6:09 pm

uberdoc wrote:
Sat Mar 14, 2020 9:50 am
Hi,
I am about to put offer on a house. What do you all think about the impact of coronavirus on the housing market? Should I wait a little bit before putting an offer? Should I ask for a price cut?
Thanks.
Everyone agrees we are in the midst of an economic contraction, probably quite severe. Given that, it is likely that housing prices will fall substantially. If you don't believe me, look at what happened to housing prices in the last recession (2008-09). If I were you I would wait. Your dollar will likely go a lot further 6-12 months from now.
Stocks 28 / Gold 23 / Long-term US treasuries 19 / Cash 22 / TIPS 8

squirrelboy
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Re: Current situation and housing market

Post by squirrelboy » Tue Mar 17, 2020 9:09 am

fredflinstone wrote:
Mon Mar 16, 2020 6:09 pm
Everyone agrees we are in the midst of an economic contraction, probably quite severe. Given that, it is likely that housing prices will fall substantially. If you don't believe me, look at what happened to housing prices in the last recession (2008-09). If I were you I would wait. Your dollar will likely go a lot further 6-12 months from now.
Now take a look back at other recessions and see how they affected house prices. You'll see the Great Recession is an outlier, or at least on one end of the curve of possibilities. I'm in no way predicting what will happen these next years, but statistically (with a small sample) housing won't be dropping 20%+ like the Great Recession. Take a look at the Shiller Index during the two recessions previous to 2008 below.

Realize it's also market dependent as noted in the blurb with the FED link. https://fredblog.stlouisfed.org/2020/02 ... not-stand/

toomuchRE
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Re: Current situation and housing market

Post by toomuchRE » Tue Mar 17, 2020 12:23 pm

With mortgage lenders getting calls from homeowners to delay payment, market down 30% and falling, and massive layoffs coming, its too naive to assume house prices isn't going to go down..

The ONLY question is, how much and how fast..

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