In my area, I would say the inventory is definitely still on the lower side, but it has also increased within the last several months.
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As a whole, number of listings is significantly lower than normal, but number of buyers is also significantly lower than normal. That said, we’re still in a sellers market nationally.
My observations in multiple different states/metro areas (no data to back this up yet until houses actually close) is that built out areas are pretty hot. Not uncommon for houses priced right and in good cosmetic and mechanical condition are moving quick with multiple offers. Still some leftover inventory from 1 month to 6 months ago that are sitting, but can usually find a reason why it’s sitting (bad marketing, bad condition, not priced right, etc)
For areas where there are active new builds - The resale market is really really struggling because of the interest rate buy downs from the builders. In my area, houses are sitting for 60+ days but the houses that are $150k more 1 mile down the road are doing 3/2/1 rate buy downs (first year is 1.99% rate, year 4 to 30 fixed at 4.99%). Basically very few people considering resales of newer homes when they are actively building nearby. That being said, there are some gems out there in those neighborhoods…
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It’s all regional like anything else. The hot markets are still hot, Florida is def cooling but that was boiling so it’s inevitable for it to cool off.
Middle America is prob hurting like it always was. Sure it got some price appreciation but nothing like the exodus out of cities to local suburbs caused during Covid. Exodus from the northeast to the south resulted in hot markets down the east coast. Exodus from Cali to Texas, Colorado, Idaho etc did the same
Cali is still hot, but def cooling. There’s always people that want to move there and population growth so hard to really see that market dropping a ton.
As I’ve said multiple times I don’t think we will have a crash, minus an event, still too much demand. But I also don’t think prices rise from here. I could see a 10 year period of stagnation in the market as a whole.
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I am in agreement here. But you never know.
Thought Covid was going to be that black swan event and instead prices rose because everyone went remote and went out and bought homes with more space for their :"office’ (or in a cheaper/better area not close to their office)… and the low rates.
In hindsight it make total sense what happened. Being locked at home would make you want more house.
I thought the same, crash. I was wrong but I also liquidated all my real estate at that time and prices haven’t gone up in that area since, so it was the right move for me.
Having people that are capable of working taking advantage of Covid protection laws will leave a sour taste in anyones mouth. Even though the govt eventually paid out my rental losses I had to front the mortgage for multiple houses for a year. I could have added the principle to the backend but that would have costed even more.
25yr old children making 1k a week federal and state unemployment, driving a bmw, sitting on their ass all day when they could have gotten a job doing many things was absurd. There was no oversight and tons of fraud. And nothing I could do but pay their rent for them…
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Still too much demand out there imo if/when rates go down. When feds raised rates, housing came to a halt and went down starting around July 2022. Generally bottomed out around December 2022 - February 2023 and has moved more or less sideways since. Most people who dropped out of the housing market between July 2022 to now just put off their need to move, or rented in the meantime.
Also, US house price to income ratio is still very cheap globally. Canada, much of Europe, Asia, etc have significantly higher home prices compared to income, but the top 5-10% in those countries truly have a hold on all of the wealth in those countries. US might be going down that same path, particularly after COVID.
It’s another discussion but you don’t think the top 10% here own absolutely everything?
66.6% is the official stat owned by the top 10%. Top 1% owns over half the stock market as well. They also own 66% of the private land in the us as well
This is absurd. It was 23% in 1990
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This graph would suggest we’ve got pretty steady inventory around here (albeit low overall).
But it gets rough when you start drilling down to what most desire. San Diego County has ~3500 listings.
- Under $1M drops that down to 2000
- Under $1M + SFH is only 545
- Under $1M + SFH + at least 2bd/2ba is 460
Then its slim pickings if you actually care about square footage. I don’t forsee too much of a “crash” around here for perspective buyers. Folks are holding on to their houses here and the only reasonable listings come from moving military families.
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In Cali you keep your low taxes as long as you don’t sell right? They can only raise so much each year. New people buying get hammered. So most just rent instead of putting their home on the market as they have such lower costs to own vs rental pricing.
Do you have that chart over a longer period of time?
Someone says I’m incorrect in thinking we are closer to historical lows than highs and it just does not make sense to me.
Even without charts… just using For Sale signs as an indicator, I know there is much less out there than there has been during previous highs.
Yeah, they can only raise the assessed value by 2% per year for tax eval. So you’re in good shape once you get in.
Upfront is brutal here. The “barely mentioned” special assessment tax is a one time ~1% tax on the difference in tax assessed value from seller to buyer. So if you buy a 80s house from the original owner for +$800k, get ready for a nice $8k tax bill in November (outside of normal property tax).
Realtors really need to be informing buyers and sellers about this. It’s pro-rated to the end of the tax year, so the ideal time to close is May, where you’d only pay 1/12th of that amount.
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Someone on this thread sent me a SD housing trend site a while back.
If you scroll back far enough on that site, he goes back pretty far. Kind of eyeballing this graph with the one I posted above would suggest the inventory here is much lower than before
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you’d think so given what we see on a daily basis but apparently the sales are happening so quickly with investors that the number don’t back up the sentiment:
look at the data for Miami and Tampa. both up YoY to record highs.
Is this everywhere? I’ve only owned a new construction home in California, but didn’t experience that and haven’t heard of it. I did pay supplemental tax, but that was tax on the difference between the land value and completed value rather than on top of the full tax amount.
Some (maybe most) mortgage companies base impound/escrow payments on the prior year tax and don’t adjust upon sale, so that probably catches people off guard when they learn they owe 1% on $2 million (prorated for the portion of the year they own the home) because they were only paying 1% on $200K as part of their mortgage. In the end it’s the same amount they would have paid over the months in the year they owned the home, but most of it all at once.
Maybe we’re saying the same thing though. I initially read yours as it being an additional tax on top of the full tax on the new value, but I think you were also referring to the true-up amount.
Was Typing too quickly— I meant on residential real estate, not wealth… they already have all of that
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I appreciate the mature and intelligent discussion. I am also hopeful that I can swoop in and scoop up someone’s failed American dream/in debt to their eyeballs our forever home in the next couple of years. Or a good builder’s fire sale. As the home prices here in CO certainly have shown no noticeable change with the interest rate hikes.
That being said I’m in no rush, and it’s a want and not a need. Property taxes and insurance costs have gone bonkers in the last 2-3 years here too.
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I think higher end stuff skews that data. Waterfront stuff is still going for crazy amounts I know that. Tale of two cities as the wealthy pay cash and buy what they want with out rationalizing the price. It also says up 4-7% hard to even see that in these already outrageously inflated prices!
I look regularly in the 800-2mill range and see a lot of inventory and price cuts. Both in southeast and southwest Florida. Rentals are def coming down and sitting for awhile, lots of airbnbs converting to full time rentals as well from the looks of the furnished units I see.
I see investors still buying places for 1.5-2mill then putting them up for rent for 5-7k. Doesn’t come close to covering expenses so they’re banking on pure appreciation. That’s a recipe for disaster as average home prices can only rise so much before no one can afford to mortgage them. Tax bill alone on that house is 3-4k a month. Could also be investors from South America getting their money out of their country and putting it somewhere safer. They can lose 5% here and still make money as inflation is well over 10-15% in some of those countries. Plus the tax advantages as they prob own other properties that are heavily cash flowing right now.
We need an absolutely crazy building boom in this country. I have two young coworkers with good jobs who can’t find decent places to live. Every half mile radius near a mass transit station needs to allow high rises.
I’ve read in many articles in the past that a lot of south Florida’s real estate market was dependent on wealthy people from Mexico and South America. Apparently the number of wealthy people from China buying in Florida has absolutely exploded recently too.
I agree that we need more housing to have half decent prices. I think one of the biggest issues will be availability and cost of land. In most areas, if there’s public transit, the immediately surrounding area is built up already. To demo and rebuild high rises, it costs a ton of money, and building and maintaining high rises cost a ton compared to a SFH or multifamily, not to mention high labor & material costs, and more and more code requirements on buildings that make it more expensive to build (e.g., arc fault breakers in pretty much for every breaker, whole house surge protector, insulation requirements, etc. I believe California was even trying to pass a requirement for solar panels on all new builds not that long ago (not sure if it actually went into effect or not).
Here in PA there are lots of regional rail stations in single family home neighborhoods, with like 150 households total that can walk to the station and a 20 spot lot. There’s a ton of underused capacity, and building those areas up would reduce demand to replace farmland with subdivisions.