Who was it?

That means you're still living in an HOA also...

Yeah. It's changed. One thing we do now is wait at the stoplight when it's green to make sure no one is actually going to just send it through....

I’m finally seeing some downward movement in my area of interest.  FL, N of Orlando
Still not down to what I want, but it’s getting there.   As far as a “fair price” I’m waiting for 2020 prices, adjusted for inflation.

Soooo current pricing

We'll never get to 2020 prices again. Nearly 20 million homes have been sold since the start of 2020. All of those people, plus many that refinanced, would be upside down on their mortgage and staying out of the market.

Already below 2021 prices in some areas.

https://www.zillow.com/homes/714-Via-Tripoli-Punta-Gorda,-FL-33950_rb/43577970_zpid/

We interrupt your housing doom with this important announcement:



https://www.rismedia.com/2024/03/06/mortgage-applications-begin-thaw-spring/

I love how everybody talks about how houses aren't moving...... lol.

No shit. It's winter..... you know how fucking bad it sucks to move in winter?

Winter? I'll have to start mowing the lawn here in a week or too.

Great times lie ahead!

My concern is that prices and interest rates will not fall to anywhere near 2020 numbers. I don't see anything coming down enough to convince a significant number of people to give up their 2.5% rates. But with prices gradually trending down, it will keep a significant number of people upside down on their 3 year old mortgages.

I think this trend creates a perfect balance of people that can't afford to buy, and people that can't afford to sell.

I'm in this post and don't like it. I have a 3.25% that I owe $97k with 20 years remaining. I am getting divorced, the house is in my name alone but I don't want to look at any corner of the house that has a memory attached to it. My house comps at roughly twice what I owe but houses that I want start at $225k. The interest rates are double what I have now and getting a different and bigger house forces me to keep the job I don't really want, that I took to make sure an ungrateful family was taken care of.

Damned if I do, damned if I don't.

That’s the hard part to figure out.   I’m thinking 2019 +  about 30 or 35%

But, inflation could be more than that.   It depends how you measure it.

Rent it.

Don't make financial decisions based on emotion.  Keep the house, change up the decor to erase memories, or maybe get a roommate to help pay the mortgage which would give you more flexibility to find a job you like even if it pays less.

So, basically, prices and people buying are down from a year ago. Got it.

Down here, they've been mowing every week since January. Very mild winter which means bugs are gonna be obnoxious this summer.

They won’t have much of a choice if they are unemployed.   But I agree that unless the job market tanks, the housing market will stay elevated.

but.... it's winter.

Snow on the ground here.

Spring in West Virginia...

Maybe winter in I did ahoe, but it's been in the low 70s here and the grass needs mowing.

The snowbirds are slowing starting to migrate back up north and are stopping in to open houses to look.

I tell people from other places that when the temps go below 75 here, people start wearing jackets. If it goes below 60, the pull out parkas.

We've only had 3-4 days of temps where the lows got down to 40 or below this "winter". We've also had twice that many days were the highs were at or above 90.

Winter my a$$. This past weekend was wonderful with the high temps in the low 70s, sunny, light breeze, and low humidity. That may be the totality of "spring" down here this year as I suspect it's going to get hot and humid shortly and stay that way until Thanksgiving.

Government will fix it!
https://www.washingtonexaminer.com/policy/finance-and-economy/2911874/biden-5000-mortgage-credit-raising-home-price/

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And if it's down because of supply side?

Interesting discussion here:
https://www.reddit.com/r/RealEstate/comments/1bhqdhj/and_here_comes_the_doj/

•
1 day ago
And here comes the DOJ...
So by now everyone has heard of the massive NAR real estate lawsuit/settlement. What many people don't understand is that the current $418 million settlement offer is just that...an offer. A federal judge still needs to sign off on it, and right now it's the absolute best case scenario for real estate agents since it was proposed by their own agency. An agency that would otherwise be facing a $5+ billion settlement.

For anyone not in the know, the settlement offer comes down to this:

The MLS can no longer list buyer's agent commissions anywhere in a listing.
Buyers must enter into written agreements with their agents.
Now, savvy agents are obviously saying, "that's fine, we'll just work list the buyer's agent commission on our website or straight up tell them over email. Nothing will change." In fact, head on over to the realtors subreddit (r/realtors) and you can see how they're already colluding to keep the status quo.

And here comes the Department of Justice to ruin their day.

There is a separate lawsuit going on currently that the DOJ has weighed in on (Nosalek vs MLS PIN). Basically, the DOJ wants to have sellers pay for their own agents and buyers pay for theirs. Each side will independently negotiate for their own agent's commissions and it will be illegal to offer anything to the buyer's agent before the seller gets an offer. This is called decoupling. This case will affect commissions nationwide and will likely have an impact on how the judge ultimately rules in the NAR settlement/case.

The DOJ has been after agent commissions for decades, and it looks like this is going to be the one-two punch to finally change things. They have long believed that agents were wildly overcompensated for their work. In their statement of interest in the Nosalek case, the DOJ literally says:

“If buyers set the compensation for their own brokers directly, some buyer brokers might choose to offer flat fees or hourly rates in lieu of percentage commissions, since the amount of time and effort required by a buyer broker has a weak correlation, if any, to the ultimate sales price of the house. And most, if not all, buyers would likely prefer a fee structure that does not reward their broker for helping them to pay more for a home.”

What you will likely see is a mix of things. Some buyers will be able to pay a flat fee or percentage to their agents. Others, especially first time home buyers, won't have the cash. In those cases, they can make an offer that has the seller give them a credit for agent commissions. And the seller can compare that with any other offers they get.

So how does this change things from the settlement that's already been proposed? It's basically a game changer if the DOJ gets what it wants, which it probably will.

You're going to see a MASS exodus of agents because fees and commissions will be slashed. The ones left will be stuck negotiating with buyers who can't afford their services and sellers who won't budge. Sellers won't be paying 5-6% of their home price to both sides anymore, and people are delusional if they think buyers are coming up with 2-3% on top of everything else they need. There will be a lot of buyers who go it alone. And once it starts happening and people realize they never needed buyer's agents at all, it will become the norm.

Additionally (and this is the one that's going to ruin agents), SELLERS are going to realize that they also don't need to pay 2-3% to their listing agent. Why bother? Especially when sites like Redfin will pop up and offer everything for 1% and buyer's agents will be offering to do their jobs for a flat fee or lower percentage. So instead of paying the 6% they used to pay, they're looking at 1% unless their buyer uses an agent who needs a concession to pay their rates. And if that happens, their offer better be extremely strong or the only one a seller gets, because no one is losing a home sale over agent commissions.

So sellers are the short-term winners. Buyers, especially first time home buyers lose in the short-term, but win in the long-term when they eventually sell. And everyone wins because real estate agent commissions plummet.

And real estate agents lose

The more you do this the more they know it’s safe to run a red light.  You have to make it unappealing to run the light for them to stop.


LA Left Turn.  Sit in the intersection until you have a clearing.  Typically this is when the light changes red. Everyone is sick and tired of waiting for 1 car to get through the intersection each light, so 4 cars go since no one is going to enter the intersection.

When you drive prices down it means the folks with a 2.5% interest rate have less equity to move to the next house and free up something in the used house market.  


Build new ‘affordable housing’ and it’s going to cost what it costs in 2024, not 2019 which is what people who can’t afford to buy a home want.  Unfortunately they couldn’t afford a home in 2019 because they were too expensive.  They wanted 2008 pricing



The collapse in 2008-10 and banks keeping houses off the market fucked all of this up. It doesn’t matter what interest rates were.  If people had bought up the market you’d have plenty more.  Now they’ll just raise property and real estate taxes to punish people for not moving, or for owning property.

Subset of the world's oldest profession, they will figure it out.

I have a former co-worker that's looking to move to FL as well. Trying to remember where exactly thinking it was gulf coast pan handle area I think.

I meant to ask him was he concerned with insurance availability / rates just to get a response.

So I'll ask you?

It's strange to not be able to move because you are locked into a 2.5% APR despite having hundreds of thousands in equity

That's the part that gets me every time. Everyone focus on the rates alone.. Yet completely ignores the equity they are sitting on due to the run up in values. In many many cases it's six figures worth of equity.

If where your at is doing what you want then great. But it's a bit short sided I think to sit parked delaying life and goals on account of a rate change. It's enough money in equity in many cases to completely change your life.

We decided that most likely things weren't going to get cheaper around here. More likely it would just get more, way more expensive as time goes on. So we took the plunge. Best decision we've made yet.

How relevant, really, is the equity in your primary residence?  If you move, you are simply trading the equity from an overinflated sales price for equity in a different, similarly expensive home.  Of course your payment on the new place is probably higher because of higher rates, but your proportion of equity is probably similar.

Thank you for saving me the time to write out the response.

Equity doesn't mean shit if it is primary residence. That's why there is a big debate to count your residence as part of your net worth.

That is because rates leverage payments.  Same loan for 280K, assuming one buys a house at $350K vs $700K.  Monthly payment is nearly $1K higher and doesn't even consider higher property taxes or homeowners.

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Unless you're leaving your current market, and moving to a cheaper market, equity is almost irrelevant.

The issue isn't the 2.5% APR alone, it's the massive rate hike in conjunction with the massive spike in home prices.

How is it relevant? It can literally change everything. You can take that money and buy a better property. You can wipe debts clean. You can invest a pile of money with it too. You can do all the above or none of the above.

You say an over inflated sales price. That's a maybe right there. What if what you would consider an overinflated sales price, is the current and quite possibly the future reality?

It just really depends on what a person's goals are. To somehow act like that money doesn't exist isn't realistic. Of course it exists.

But you're also discounting the fact that the 700 K property is probably going to be $1 million property sooner than we think...

Inflation is here to stay for a good while. There has yet to be any monetary action that would indicate they are serious about contracting the money supply to pre-Covid levels. If they were slashing and burning and sucking the air out of the room, I would feel completely different.

I think it's going to be a long slow brake drag. Anything that has the ability to appreciate has and will continue to do so for the near future.

Fed decided to hold rates again and let everyone slowly bleed dry.  Awesome.  

Am I expected to be angry about this.

Money should cost money to borrow.

7% mortgage is a bit high; 5% mortgages are reasonable; 3% mortgages just encourage stupid behavior that wages will never keep up with.

They really need to have one or two raises and cut the inflation. Stupid that they are forecasting cuts because the job is not done.

On one hand I think they realize the .gov is going to keep spending like a tard anyway.  Completely gutting the consumer market is only going to do part of it.  However,  we just had a small valley in inflation.   It is just getting started.

Sure, it exists.  However the assumption is that you are rolling it from the house you just sold into the house that you are about to purchase.

Bring in a new decorator

You can only use the equity if you sell or borrow against it.  So, to sell and buy "a better" house with the equity you would either need to add $ to the down payment (in addition to the equity) or borrow more $ (at a much higher rate.)  Either way, you are out a shit ton more money, even if you bought a comparable house.

To come out ahead, you would have to sell and either downsize or move to a lower CoL area.  Not everyone wants to do that.  If I sold my house and bought a similar one, my payment would increase at least $1,200 from the higher interest rate alone.  Wouldn't consider buying a more expensive one.

How are you planning on investing a pile of $ with your equity in this interest rate enviornment?


And there is no debate, houses are a part of your net worth.  Whether you include them in your retirement plan is a different question.

Where did you come up with these numbers?

Assuming a 2-3 inflation, the real cost on cash for loaned money at 7% would have a real rate of 4-5%. Historically, we are around average interest rates.

Challenge accepted...

just wait until a lot people figure out you dont need an agent to sell a house at all, just a lawyer that charges a fixed rate.