This is all anecdotal, my partner and I have been trying to find a condo for a few months. The housing bubble has not burst, nor is it close to. There are still more buyers with money (especially funds like black rock, HENRYs, local landlords) than there are available (good) housing stock. That pushes prices up and into a looney realm (no inspection, all cash, escalation clauses, to name three of many things we've heard about in offers). Even though interest rates are raising now (they've gone up a point the last month), they are still historically low and no one we've spoken to in the real estate business expects them to ever get too high again (say 10%). They all expect them to get back to zero in the medium term. For us that means even if we were to buy with a very disadvantageous rate (say 7%), we could expect to refinance with a rate in the 2-3% range in the next few years.
Until housing stock increases or the long term outlook gets worse, we're kind of screwed.
So has this recent interest hike (1% over the past month) slowed anything down in your area? I guess a lot of people get their rate locked in during their preapproval so will we see a wave of price drops once those pre-approvals from before the rate hike expire?
It's not so easy as just raising the fed fund rate. If those landlords/airbnb folks/whoever are at a fixed rate they're going to be immune from interest rate fluctuations. You might shake a few out that have adjustable rate mortgages with rising rates, but most of that housing stock is probably gone. A higher fed funds rate will prevent more of it from falling into landlord hands, but it also makes it harder for individuals to buy.
The solutions are political - more house building, guillotines, rent caps and rent stabilization, tenant rights.
The difference is in the entity taking out the loan. Balloon loans and ARMs were very easy to give out to individuals before the crash, now I think we have more entities on fixed rate mortgages or buying in cash. The make up is different and the crash will look different. I suspect more like a consolidation of landlords then what we saw in 2008 unless the economy gets real rough
Not that I've seen nor heard from our agent. I doubt we get outright price drops as much as inventory lingering longer than it has before. The ability to refinance once the money printer is inevitably working again will do a lot to buttress them
How do you like the agent? I've heard the agents will also always play up how hot the market is to get you to bid more in an effort to get the deal closed thus giving them their commission.
Our agent is fine. Could definitely be a lot worse, she doesn't try very hard but gets us into to places when we see something online we like. The whole system is scummy and at no point do you feel like you completely understand why anything happens
This is all anecdotal, my partner and I have been trying to find a condo for a few months. The housing bubble has not burst, nor is it close to. There are still more buyers with money (especially funds like black rock, HENRYs, local landlords) than there are available (good) housing stock. That pushes prices up and into a looney realm (no inspection, all cash, escalation clauses, to name three of many things we've heard about in offers). Even though interest rates are raising now (they've gone up a point the last month), they are still historically low and no one we've spoken to in the real estate business expects them to ever get too high again (say 10%). They all expect them to get back to zero in the medium term. For us that means even if we were to buy with a very disadvantageous rate (say 7%), we could expect to refinance with a rate in the 2-3% range in the next few years.
Until housing stock increases or the long term outlook gets worse, we're kind of screwed.
Damn that sucks and I'm sorry to hear that!
I'm not looking for a house but i have noticed the for sales signs going up and down throughout my neighborhood constantly.
You'll know a bust is happening once those signs linger
So has this recent interest hike (1% over the past month) slowed anything down in your area? I guess a lot of people get their rate locked in during their preapproval so will we see a wave of price drops once those pre-approvals from before the rate hike expire?
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It's not so easy as just raising the fed fund rate. If those landlords/airbnb folks/whoever are at a fixed rate they're going to be immune from interest rate fluctuations. You might shake a few out that have adjustable rate mortgages with rising rates, but most of that housing stock is probably gone. A higher fed funds rate will prevent more of it from falling into landlord hands, but it also makes it harder for individuals to buy.
The solutions are political - more house building, guillotines, rent caps and rent stabilization, tenant rights.
deleted by creator
The difference is in the entity taking out the loan. Balloon loans and ARMs were very easy to give out to individuals before the crash, now I think we have more entities on fixed rate mortgages or buying in cash. The make up is different and the crash will look different. I suspect more like a consolidation of landlords then what we saw in 2008 unless the economy gets real rough
Not that I've seen nor heard from our agent. I doubt we get outright price drops as much as inventory lingering longer than it has before. The ability to refinance once the money printer is inevitably working again will do a lot to buttress them
How do you like the agent? I've heard the agents will also always play up how hot the market is to get you to bid more in an effort to get the deal closed thus giving them their commission.
Our agent is fine. Could definitely be a lot worse, she doesn't try very hard but gets us into to places when we see something online we like. The whole system is scummy and at no point do you feel like you completely understand why anything happens