This crazy “seller’s market” could (and probably will) flip to a “buyer’s market” in the blink of an eye. I’ve had a couple younger family members ask me lately if this was a good time to buy a house and I said (emphatically) NO! The starter home prices in most metro areas have gotten to the point of total ridiculousness. Now, double the interest rates and what happens to first time buyers’ purchasing power? Not good news. Add in the world crisis and national inflation and housing is in for a rough ride IMO.
All this being said I don’t think the news is as bad as it was for us HIs 15 years ago. In fact, there will probably be a little cash buying frenzy as the market flips (“cash is king” as the saying goes). But a lot of us seem to forget how quickly things can change. Do people really think 20% year over year appreciation rates have no end? Come on people!! Granted your favorite “glass is half full” REA would never admit any day but today is the best day ever to buy a house (yep, saw it firsthand as the market crashed) but as HIs who count on sales to feed our families we’d be wise to do a bit of planning and belt tightening.
Agree with this advice! Prices have gotten way to stupid out there. Many (the majority ?) buying today either were not selling or buying during the last crash and paid no real attention to what happened. So many will be buying at such truly inflated prices that if/when the poopy hits the fan they will be instantly under water and with this economy also unable to pay their mortgages.
Don’t agree with that one. During the last crash Texas wasn’t hit as hard as other areas. This time I don’t believe they will be so lucky! IMO I think what we will see is a lot of investors coming in to buy out the many defaults that would happen. Few investors care about inspections and those that do either have their own contractors doing their inspections or are the ones that think they can make lots of money, don’t get an inspection, and wind up biting off more than they can choose. That last crash cleaned out a lot of little investors.
Agree completely! Many will also continue to push the “Don’t ask for an inspection contingency” until it becomes highly obvious it has turned to a buyer’s market.
Whether we’re in a bubble about to burst or not I don’t know.
As of last week in Metro Denver the supply of homes (house, townhome, condo) on the market was down 35% from last year. There is just not enough supply for the amount of buyers in our market.
When you look at the numbers that turn it into a buyers or sellers market, it’s going to take ALOT of homes entering the market to turn Denver back into a buyers market or the current amount of buyers will have to dry up.
Which if we’re in a bubble can happen in a short amount of time.
I’m not sure about Denver but in Portland inventory is listed as a rate of sales not an actual number of sales. So, if the number of buyers is cut in half, inventory doubles. I fear we’re in for a substantial reduction in possible buyers.
Yeah, I remember during the mortgage meltdown I was hanging out on Inspectionnews (message board) which was really Texas-heavy and I was always shocked at how much better off you guys were from a volume standpoint. My company lost over 50% of it’s volume in a few years and the Texas guys were complaining about 15-20%.
Edit: I just went and dug up my old spreadsheet - we peaked in 2005 at 470K sales, bottomed out in 2010 with 208K. Yikes, those were some dark days. Crazy timing too - I had one child born in 2008 and twins in 2010!
The numbers I’ve seen here, inventory is number of active listings, which I believe includes listings under contract but haven’t closed. I could be wrong on that but it’s what I understood.
Historically in Denver a balanced market will be a 6 month supply which is around 24,000 homes on the market, last week the number of homes on the market was around 3,300.
Could be, but historically at least since the early 1990’s Denver has been a good place to have real estate.
A dilemma in my area, and I’m sure others as well, is many people are in a catch-22 situation. They want to sell their home, and remain living in the area, but they don’t want to put their home on the market until they can find one to buy. This is helping create a low inventory of homes for sale.
This is also where the rising interest rates really hurt. Who wants to leave a 3% loan and take on one at 6%? The ridiculously low interest rates of the last +/- 10 years have so many negative impacts for our businesses.
Putting money in a safe or under the mattress is the worse thing to do right now. Safest storage right is in bonds or solid dividend stocks. Most of us are independent and should all have an investment strategy.
Well, I wasn’t talking about your retirement fund, lol. I was recommending having some cash on hand (as well as other disaster prep type items) as a prudent self reliant person should consider under normal circumstances much less global uncertainty of war, skyrocketing inflation, projected food shortages, cyber attack threats from a competent enemy and energy crisis.
I do not trust my “super mega bank” to protect me. In fact, they have been proven to be dirty dogs with fleas. And many assets are not protected by the FDIC.
I have been debating a strategy for mitigating the risk of a banking cyber attack. Just for normal cash on hand accounts such as business operating accounts and personal savings/checking accounts.
Sure, they may be insured but I am most certain that would take awhile to resolve. Meanwhile, I would need to continue to function.
