The Housing Crash Has Officially Started (see article)

[John Carbone]

https://www.cnbc.com/2022/09/2...

"Home prices cooled in July at the fastest rate in the history of S&P Case-Shiller Index"

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I’ve been posting for the past week once the bond market began to implode that housing was going to come down at least 20-30 percent, and how most of the home equity created during covid was a myth (https://www.biggerpockets.com/...) As early as yesterday, folks were on here saying that prices can’t drop because there’s no supply, people don’t need to sell, inflation will keep prices higher. The official data just released here shows otherwise. This is the first drop in the housing index since March 2012 (over 10 years.) All it took to prick the real estate bubble was mortgage rates getting into the mid 5's. This is from July data, and interest rates have gone over 7 percent now. Momentum has shifted fast and hard. Like I said a few days ago, it’s too late to realize the phantom equity now, folks are forced to wait it out and see what happens. The fed took it away with the high rates a few months ago, and they are just getting started. Unless the fed reverses course quickly, this data is just the beginning, wait until we see the numbers in the winter. It was all easily predicted by looking at the math. I won't go as far as to say we will see another 2008, but seeing that "cooled at the fastest rate in the history" with just 5.5 percent mortgages (and we are over 7 percent now), i don't know that anything is off the table here. 20% is a lock though. 

[Nathan Gesner]

Quote from @John Carbone:

Opinions are like . . . you know.

I agree we are preparing to get hit hard. Others say it won't happen because . . . fill in the blank. I'm a simple guy. I don't follow market trends. I don't read financial books. I don't understand even basic accounting. What I do know is that there are consequences to "free" money and that home prices can't double in 2-3 years without some negative repercussions. Time will tell.

P.S. Thanks for the opportunity to make my 18,000th post!