What’s up with LA, I swear just 6 months to a year ago everybody and they mama’s was moving to LA and now you don’t hear LA anymore
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Are you being for real…? 
I am, I legit haven’t heard LA anymore, unless I’m not paying attention
Out here in MA, it is an interesting market. Inventory is still low. Although I do not have numbers as far as whether home prices have dropped lately, a realtor (friend of a neighbor’s) who sells homes in wealthy Boston suburbs (Weston, Wellesley, Concord, etc) said a few months ago that there were quite a few cash buyers paying over asking.
I think a combination of good schools and the abundance of jobs in several industries such as Biotech, Healthcare, Tech, Finance, etc has sustained this crazy market in my state. Nice towns with good schools within 45 minutes of Boston were always out of reach for me. Average home prices were over $500k and most homes were older and needed some “upgrades”. After living north of Boston (about a 30 minute drive from the city) for nearly 8 years, my family and I decided to move to a town with a good school system, affordable homes and better quality of life.
When we moved out to Central MA, average home prices in my town were around $400k. We got lucky and were able to build a 2500sq ft home for less than $450k. Nearly 3 years later, 3+bed homes with 2000+ sq ft are selling in the $500k to $550k in my town. If I were to build my house today, it will cost me at least $600k. Zillow is saying it is worth between $550k to $585k. I am not looking to sell any time soon.
We will see what happens, but I am glad I am not in the market.
Same morons said that about Phoenix, Tampa, Sacramento, San Diego…the list is long.
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Mostly realtors, mortgage brokers and first time investors. Aka people with no experience or have financial gain to be made with a strong market…
Another difference in Miami is the wealthy south Americans don’t mind losing money on a condo. Any loss here is better then 100% loss through inflation or corrupt govt stealing it, basically the same thing. Think Argentina…
I’d rather lose potentially 50% of my money then keep it in Argentine pesos that’s for sure. Most other countries in South America aren’t much better. This is what happens when you elect socialists…
https://finance.yahoo.com/news/argentina-hike-interest-rates-75-200117136.html
There’s a lot of foreign money in US real estate. Some of it like you describe where it’s on the up and up, others via shady shell corporations. It’s a way to conceal capital or at least protect it and in some areas you have a lot of high end RE used for that.
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I was doing the same, but this year sold a big chunk, I was maybe 4-6 months late but still did well.
The residental cap rate in So Cal is like 3-4% so nothing great anyways.
I could be wrong, but this RE fluc maybe a golden opportunity for people with cash in hand.
Lots of Chinese and south east Asians are buying up real estate where I am at.
part of the reason why we have inventory issues. The other is cost to build only makes high end worth it really. Zoning laws will need to change to support populations here. In Philly for instance you’re not allowed more then 3 unrelated people on a lease. It’s an old brothel law from the 1800s. Also there’s so many huge homes that need to be chopped up into condos/apartments. That would easily ease supply issues but then there’s the NIMBY syndrome.
This is one of the myths of the 07/08 crash. While all the deadlines talked about sub prime, the real culprit was prime as well. Lots of A tranche debt was garbage as well. The other myth is that today is once again DIFFERENT and everyone has awesome credit and is putting down 20%. LOL. Nope. It’s the same as it always was.
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I don’t necessarily agree. OptionARMs were the rage back then and underwriting was very lax.
While I know there are probably suspect loans now… having financed new purchases and refinanced during both time periods, I can attest that qualification and underwriting was much more stringent than back then.
And as anecdotal as that may be… those I know that are in the loan industry also observed the same behavior.
Also. what it the financial black swan event that will cause a significant downturn? I’m not saying this time is different… I’m just saying I don’t think a crash (without proper definition of how much and when) is entirely accurate.
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This is something very recent and only in a few markets. I follow 3 markets- Seattle, Scottsdale and Naples. In my old neighborhood in Seattle there’s still no inventory- only 9 homes for sale currently. Sure houses don’t sell for 500K over ask and there are some cuts but I doubt that prices will fall more than 15%. Florida is interesting to me because no income tax. Two people with good income in a higher income tax state can basically live for free if they can work remotely and move to Florida. And one interesting anecdote from Scottsdale- someone in my zip code with two Airbnb houses just got 250K for super bowl week (15K day!)
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Hopefully the black swan is 15% interest rates. But the fed is getting pressure from every angle that it will be disastrous. Cheap money is a drug, and we’re full blown addicts at this point.
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People have zero incentive to sell. Everyone has refinanced into sub 3% fixed mortgage. The only houses for sale in my neighborhood are flips. Builders will stop building and make the longer term inventory shortage even worse. And don’t forget that the elections are coming soon and the fed will face a lot of pressure to ease in 2023.
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That still isn’t a ton of inventory at all. Zoom out
This is extremely uncommon and yes it is different this time. The amount of fixed rate mortgages is substantially higher than in the 2000s. Implying anything else is a plain lie.
More condos and apartments in Philly? Possibly one of the oldest big cities in the U.S. with no infrastructure (roads, parking spaces, traffic) to support this? This is the reason people leave the big cities.
If you look at the family formation and homes built over the last 10 years there’s a structural shortage of about 40 mil homes (+/- my numbers could be off a little)