Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Carlos Ptriawan]

Quote from @Bruce Woodruff:

'We' have not paid enough for getting too greedy again (like in 2008)

 I am surprised there's still the same number of buyers that can match the seller number; and 45% of them are investors.

Incredible.

[Nicholas L.]

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

[John Carbone]

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

[John Carbone]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

[Alex Hochberger]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

 So your scenario is- all these people when faced with a correction (10-19 percent in real turns, likely 5% in nominal terms) see their house fall And panic sell causing a crash.

Meanwhile, the Fed targeting a soft landing or anmild recession including a housing correction watches a crash occur and does nothing?

People avoid taking losses, even when they should - that’s the real psychology. The panic sellers on dips are NOT people that are losing, they generally have capital gains.

Panic sales In the stock market are people whose rode the bull up part way, lose 20%, eat a big tax bill, and buy in after the recovery.

people do just about anything to avoid realizing losses.

[Alex Hochberger]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

 So your scenario is- all these people when faced with a correction (10-19 percent in real turns, likely 5% in nominal terms) see their house fall And panic sell causing a crash.

Meanwhile, the Fed targeting a soft landing or anmild recession including a housing correction watches a crash occur and does nothing?

People avoid taking losses, even when they should - that’s the real psychology. The panic sellers on dips are NOT people that are losing, they generally have capital gains.

Panic sales In the stock market are people whose rode the bull up part way, lose 20%, eat a big tax bill, and buy in after the recovery.

People do just about anything to avoid realizing losses.

[Carlos Ptriawan]

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the

Where do you get this idea that HELOC is a big contributor to inflation ? are you saying when HELOC is used the money would be use to trigger inflation ? It's impossible for single person/entity is causing inflation except commodity/food hoarding. HELOC on the other hand, is creating additional economic activity and adding additional growth to the economy. It's primary engine for economic expansion.

The sole inflation that we have today is only because the Fed is adding 45% Dollar more into circullation.

Even their money printing since 2009 didn't cause inflation.

[Michael Wooldridge]

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

 I’m shocked…. :) 

You know where I stand on this. 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

 I’m shocked…. :) 

You know where I stand on this. 

 I'm also checking it like three times if I read it incorrectly. Mr. Zillow never disappointed me. 

Man so much people saying the forest burning from afar, from inside the forest we found Joe and James is making BBQ lol

[Greg R.]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

That's a single data point. I haven't seen the data yet post on Redfin or other sites that provide analytics. 

You're starting to sound like a day trader who claims the market is making monumental moves based on real-time shifts that you're watching. 

As I've been saying, this isn't going to happen over night. This market is going to take a while to show the impacts of rates in the 7s. 

[Michael Wooldridge]

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

That's a single data point. I haven't seen the data yet post on Redfin or other sites that provide analytics. 

You're starting to sound like a day trader who claims the market is making monumental moves based on real-time shifts that you're watching. 

As I've been saying, this isn't going to happen over night. This market is going to take a while to show the impacts of rates in the 7s. 

So I agree. However the initial data point is showing less people selling. Which is the first behavior you would expect. As far as time, how much time? By Junish I expect the fed to start announcing changes to rates and once it’s directionally happening good luck pushing down prices. 

I don’t think you have a very big window if you all want/expect 25-30% drops down, which I’m going to keep calling out is really more like 35-40%….. 

 

[Greg R.]

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

That's a single data point. I haven't seen the data yet post on Redfin or other sites that provide analytics. 

You're starting to sound like a day trader who claims the market is making monumental moves based on real-time shifts that you're watching. 

As I've been saying, this isn't going to happen over night. This market is going to take a while to show the impacts of rates in the 7s.  

Here are some other data points from Zillow that you must have forgot to include in your post ;)

• - Las Vegas (-2.3%) and Austin (-2.2%) saw the sharpest home value declines.
• - Active inventory’s rebound stalled out at a mere 1.8% year-over-year increase in October.
• - The number of newly pending listings in October dropped a whopping 35.1% compared to last October.
• - Asking rents fell 0.1% month-over-month, the first monthly decline in two years, and comparable to October in each of the three autumns before the pandemic. Rents are still 9.6% above year-ago levels.

This can also be interpreted as the continuation of the housing collapse. However, not all of the data has been released, just a preview from what I can tell. 

[Carlos Ptriawan]

That's a single data point. I haven't seen the data yet post on Redfin or other sites that provide analytics. 

You're starting to sound like a day trader who claims the market is making monumental moves based on real-time shifts that you're watching. 

As I've been saying, this isn't going to happen over night. This market is going to take a while to show the impacts of rates in the 7s. 

 You can call me day trader whatever but I use real time data and not opinio. There's no magic on how an asset pricing. If there're more buyer, price will not drop. It's economy class 101 if you ever take it out so people just don't scream without understanding the whole process.

If you want  markt to crash, wait til february when people usually start selling due to seasonality, so far market reacted nicely with 7% rate.
Bring it on , say mr. market :) LOL

[Greg R.]

Quote from @Michael Wooldridge:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Michael Wooldridge:

Quote from @John Carbone:

Quote from @Nicholas L.:

@John Carbone

@John Carbone

I still don't think I understand the big deal around phantom equity.  I probably had some myself.  I bought a new primary in 2019.  Refinanced into a low, fixed rate.  So if my primary jumped up from what I paid for it in 2019 to something silly in 2021 or 2022 and is now back down... so what?  I didn't tap it, don't need it, and am not a seller.

Is this just a sign of the reduction in prices?  Or a cause for concern?  Or both?  Won't the biggest 'losses' be in primary residences that are above or significantly above the national median?  Will it hurt investors?  

It's just pointing out the facts. Over the summer it was assumed everyone had the equity they thought they had, but once rates increased sharply, it instantly vanished. We are now slowly seeing that realized in the market with declining home values. HELOC's have been a big contributor to inflation, so having values drop and rates rise virtually nobody will be doing them anymore which is good for the fed. The biggest concern is for peak buyers who panic from the drops or are forced to sell. There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it's worth 350-400k for an average primary owner. Logically they are better off staying put, but to those people You can see some irrational decisions up to and including handing back the keys. I just read recently up to 70 percent of homebuyers regretted their purchase during Covid already…. We won't see the end of this until likely next year, but I do know values won't be higher a year from now.

Agree with the psychological aspect. But where are you seeing properties that fit this: 

"There is a lot of psychology of someone paying 500K for a house last summer and being told by banks it’s worth 350-400k for an average primary owner."

That's 20-25% on essentially median values. I don't think there is a market in the country that has hit that, not even close. The big hits have been on the higher end as called out and certainly not to that degree. 

Or is this just back to what you are predicting because the above example hasn't' come into play.... at least yet. 

Yeah, next year. The stage is already set with the buyers remorse already. Once they realize they can’t pull equity from it, and next year when they see the value is negative 20 percent, it could trigger additional sell offs from the fear which is why I don’t rule out upwards of 30 percent drops due to the final wave of irrational people pushing values too low. 

So I’ll just say 30% on essentially median ($500k is only slightly above median) would mean essentially 40% drop if you factor in inflation. You don’t think that’s a bit out there in left field? Almost 50% drop on the most stable asset in history? 
 

 dude october data is out. 

active inventory: -5% YOY
active new listing: -25% YOY

There're more buyer than seller, most likely price is either flat or slow growth, Mr. market has been tested with 7% rate, surprisingly it's doing well. 

That's a single data point. I haven't seen the data yet post on Redfin or other sites that provide analytics. 

You're starting to sound like a day trader who claims the market is making monumental moves based on real-time shifts that you're watching. 

As I've been saying, this isn't going to happen over night. This market is going to take a while to show the impacts of rates in the 7s. 

So I agree. However the initial data point is showing less people selling. Which is the first behavior you would expect. As far as time, how much time? By Junish I expect the fed to start announcing changes to rates and once it’s directionally happening good luck pushing down prices. 

I don’t think you have a very big window if you all want/expect 25-30% drops down, which I’m going to keep calling out is really more like 35-40%….. 

So your prediction is built on the cornerstone of the fed making certain moves in 8 months. These guys don't know what the market is going to do or look like in a a few weeks. But we're supposed to believe that we can predict, with precision, what they're going to do in almost a year. 

[Carlos Ptriawan]

The Fed quite open on their plan this time. My job as investor is just to ride the wave, it's a beautiful game if you understand how they make the game LOL.

Nothing random. It's well planned, well-organized by them.

For example, Mr Powell already announced they will sell 350 billion assets starting tomorrow, so expect stock market to go lower til 1/1/2023

[Greg R.]

Quote from @Carlos Ptriawan:

The Fed quite open on their plan this time. My job as investor is just to ride the wave, it's a beautiful game if you understand how they make the game LOL.

Nothing random. It's well planned, well-organized by them.

For example, Mr Powell already announced they will sell 350 billion assets starting tomorrow, so expect stock market to go lower til 1/1/2023

Yes, ride the wave. Action is different than talk. The fed or anyone else can say whatever they want, but words without action are worthless.

[Chris Clothier]

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Positive GDP growth…. Hmm)

Really not surprised that Exxon is making record revenues, seems pretty obvious that they would be. Look at Meta stock. 

 This may explain why Texas economy is growing and home market there is still doing pretty okay

Texas home market, at least in Austin and DFW is seeing MAJOR declines, which I've documented thoroughly in this thread. Home market is far from OK in TX (Austin & DFW). DFW median sold prices down almost 100k since the peak in May, and Austin median sold prices down over 100k since May. 

 Greg,

I was searching back for one of my comments (somewhere in these 88 pages!) and I came across this post from you.  I'd be super interested to know where you come up with these stats and what other info. you can share on them.     

I'm not seeing any major declines in any of the three Texas markets that I invest heavily in and certainly not seeing $100k drops in valuation from peek.  What I found interesting is you noted 100k drop in median price of home sold.  But, if that is what you meant, isn't that a meaningless stat?  You are saying that the median price of all the homes sold in a month is $100k lower than peak.  Who cares?  That says that half were higher and half were lower and doesn't take into account how many and where.  It doesn't factor for size, price per sq ft. location, condition...nothing.  Doesn't that just say that the middle price of a list of all houses sold was $100k lower?  That might be useful and it certainly could point to a large drop in value, but it may not and by itself I'm not sure it points to anything at all. 

In the post I made, I commented specifically on Austin.  I noted that a news article said Austin prices are plummeting because home values were reportedly 7.9% lower in September than 90 days previous in June.  Of course, the next sentence says pricing is still over 30% higher year over year.  So, are prices crashing in Austin?  I don't invest there, I just find it interesting that facts and arguments can be heavily manipulated to confirm anyone's point of view.  Again, would love to see some places or sites that you follow to get data that you find helpful.  Best -

[John Carbone]

Quote from @Carlos Ptriawan:

The Fed quite open on their plan this time. My job as investor is just to ride the wave, it's a beautiful game if you understand how they make the game LOL.

Nothing random. It's well planned, well-organized by them.

For example, Mr Powell already announced they will sell 350 billion assets starting tomorrow, so expect stock market to go lower til 1/1/2023

Helocs add dollars to the system, velocity of money. Phantom equity sitting in no man’s land doing nothing isn’t intlationary.

jobs are just now starting to be lost. Have you seen all the layoffs being implemented? It’s not just a few companies.

a “x” percent drop in jobs lost does not equate to a linear drop in real estate values. 

[Jorge Vazquez]

After nearly ten years of price increases, the real estate market in Florida is starting to show signs of softening. Google says the search term “When is the housing market going to crash?” has spiked 2,500% in the past month. Some analysts anticipate history repeating itself, with another housing market crash similar to 2008/9.

[Greg R.]

Quote from @Chris Clothier:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @James Hamling:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Positive GDP growth…. Hmm)

Really not surprised that Exxon is making record revenues, seems pretty obvious that they would be. Look at Meta stock. 

 This may explain why Texas economy is growing and home market there is still doing pretty okay

Texas home market, at least in Austin and DFW is seeing MAJOR declines, which I've documented thoroughly in this thread. Home market is far from OK in TX (Austin & DFW). DFW median sold prices down almost 100k since the peak in May, and Austin median sold prices down over 100k since May. 

 Greg,

I was searching back for one of my comments (somewhere in these 88 pages!) and I came across this post from you.  I'd be super interested to know where you come up with these stats and what other info. you can share on them.     

I'm not seeing any major declines in any of the three Texas markets that I invest heavily in and certainly not seeing $100k drops in valuation from peek.  What I found interesting is you noted 100k drop in median price of home sold.  But, if that is what you meant, isn't that a meaningless stat?  You are saying that the median price of all the homes sold in a month is $100k lower than peak.  Who cares?  That says that half were higher and half were lower and doesn't take into account how many and where.  It doesn't factor for size, price per sq ft. location, condition...nothing.  Doesn't that just say that the middle price of a list of all houses sold was $100k lower?  That might be useful and it certainly could point to a large drop in value, but it may not and by itself I'm not sure it points to anything at all. 

In the post I made, I commented specifically on Austin.  I noted that a news article said Austin prices are plummeting because home values were reportedly 7.9% lower in September than 90 days previous in June.  Of course, the next sentence says pricing is still over 30% higher year over year.  So, are prices crashing in Austin?  I don't invest there, I just find it interesting that facts and arguments can be heavily manipulated to confirm anyone's point of view.  Again, would love to see some places or sites that you follow to get data that you find helpful.  Best -

Chris, I wish you would have searched a bit more thoroughly. I've posted screenshots (many times) of the price decreases in Austin and Dallas. 

Dallas: peak of the bubble in May 2022 median SOLD price was 490k, as of September 2022 it is 390k. 

 Austin: peak of the bubble in May 2022 median SOLD price was 670k, as of September 2022 it is 563k.

Also, Zillow released a preview of October numbers and Austin (only second to LV) saw the sharpest home value decline. 

YOY at this time is irrelevant. Let's do some YOY comparisons after May 2023, that's when your annualized data is going to start showing the declines. 

Also, not sure what TX markets you're in. I'm in Dallas on the ground and I've been ingesting data like a fiend. There is no question that the DFW and Austin markets are dropping. Look at the amount of houses hanging on the market, price decreases, properties being unlisted because they can't sell, etc. 

People who think the housing market is not experiencing declines despite rates in the 7's and hyperinflation (not to mention the data) are quite comical to me. 

[Carlos Ptriawan]

Quote from @Greg R.:

Quote from @Chris Clothier:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

Quote from @Carlos Ptriawan:

Quote from @Greg R.:

People who think the housing market is not experiencing declines despite rates in the 7's and hyperinflation (not to mention the data) are quite comical to me. 

 Do you mean Zillow and Freddie Mac is comical :) LOL LOL

[Carlos Ptriawan]

Helocs add dollars to the system, velocity of money. Phantom equity sitting in no man’s land doing nothing isn’t intlationary.

jobs are just now starting to be lost. Have you seen all the layoffs being implemented? It’s not just a few companies.

a “x” percent drop in jobs lost does not equate to a linear drop in real estate values. 

HELOC adding to Velocity Money is correct but how it's triggered inflationary is confusing for me. If the money is well spent to productive economy like construction homes it is actually a way to generate jobs. 

About the job, from the statistical point we're still adding job. The narrative of layoffs is coming from the narrative where these small scale tech company that did cost restructuring due to less demand in advertising. When the employee losing job yes they will feel the recession. 

To be honest there's something really wrong in the market technically. You have bond in 4th standard deviation crash territory but VIX is at all time low, as nobody afraid of the economy. 

From Fed perspective, there's still no recession yet. Everyone is waiting when the day is coming ;-) We will be like this for a while waiting if crash is ever happen