US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
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Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#2At some point you hit the cap of what people can possibly spend.
Depressed earnings in all but a tiny sector, and incredibly inflated house prices.
Perpetual growth is unsustainable in this manner, but is expected by investors.
I hope the market corrects. Not for my sake (I live in Sweden and have no US desires) but for those who hope to have a life and family near their ancestral home.
I am not preaching to the choir of HN, people on this site generally have it a lot better than the people who also live in the places that are huge tech hubs.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#3Misleading label from HN - article is amp from Market Watch, not actually google.com.
Ideally, HN would point at the original.
Personally, my phone Adblock prevents google from spying on my traffic in general, but these cached amp links get tracked by google.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#4At some point you hit the cap of what people can possibly spend. Depressed earnings in all but a tiny sector, and incredibly inflated house prices. Perpetual growth is unsustainable in this manner, but is expected by investors. I hope the market corrects. Not for my sake (I live in Sweden and have no US desires) but for those who hope to have a life and family near their ancestral home. I am not preaching to the choi…
Not sure why you’re being downvoted. Nothing you said is controversial.
Agree that incomes put an upper limit on housing prices...they can’t go up forever at the same rate as the past 5 years.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#5There are all sorts of reasons that house sales slow down, not the least of which are reduced tax benefits, higher interest rates, and a general market forces.
The interesting thing to watch for is the flipper sales. Which is to say if a significant chunk of the market in your area is actually being held by people who bought the house just to flip it, then when you get two or three months of flat to downward pressure on house prices they will all yell "Peak!" and run for the exits. Then you'll see a nice flurry of downward movement as these folks try to unwind their position before the market falls into a hole that loses them money. Pro tip, there aren't enough chairs and the music is no longer playing :-).
That could bring some welcome relief for home buyers who have struggled in the 'no contingency cash only' markets like parts of the Bay Area.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#6At some point you hit the cap of what people can possibly spend. Depressed earnings in all but a tiny sector, and incredibly inflated house prices. Perpetual growth is unsustainable in this manner, but is expected by investors. I hope the market corrects. Not for my sake (I live in Sweden and have no US desires) but for those who hope to have a life and family near their ancestral home. I am not preaching to the choi…
Pretty sure my ancestral home is somewhere on Mayfair. I demand access to an affordable London flat thereabouts!
Also if you're talking about the Bay Area, much of the real estate pricing there is driven by the anti-development tendencies of the owners of ancestral homes, either lining their own pockets or pushing some misguided political wheelbarrow (especially in SF). In that sense it's largely self inflicted. In other places even uneven economic growth tends to create bigger cities as the wealth spreads through the economy via construction and services and the like. It's when you try to fight the market that you get unintended consequences.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#7There are all sorts of reasons that house sales slow down, not the least of which are reduced tax benefits, higher interest rates, and a general market forces. The interesting thing to watch for is the flipper sales. Which is to say if a significant chunk of the market in your area is actually being held by people who bought the house just to flip it, then when you get two or three months of flat to downward pressure…
That's not really what happened in the last crash though. The people who bought, held. The only people who got hurt were home owners who go underwater and then lose a job. They can't afford to wait it out, they can't afford to make the payment, so they end up in foreclosure. Then the bank holds and it ends up as a zombie home.[1] The zombie falls to pieces, so the bank gets a bail out, the home is written off, and the market is just as tight as it ever was. All the flippers are going to do is rent the places out while they hold on for the next run up. At least, that's what I witnessed in the last crash.
https://newyork.cbslocal.com/2014/07/25/zombie-homes-without...
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#8Just today (in Austin) I saw a banner by the road outside a bank offering "100% financing" for homebuyers. If banks breathlessly pitching to lend buyers the entirety of a home's price is not a sign of an overheated debt-led housing market, I don't know what is.
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#9Just today (in Austin) I saw a banner by the road outside a bank offering "100% financing" for homebuyers. If banks breathlessly pitching to lend buyers the entirety of a home's price is not a sign of an overheated debt-led housing market, I don't know what is.
It gets worse than that,
https://www.lendingtree.com/home/mortgage/interest-only-mort...
Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says
#10There are all sorts of reasons that house sales slow down, not the least of which are reduced tax benefits, higher interest rates, and a general market forces. The interesting thing to watch for is the flipper sales. Which is to say if a significant chunk of the market in your area is actually being held by people who bought the house just to flip it, then when you get two or three months of flat to downward pressure…
That's not really what happened in the last crash though. The people who bought, held. The only people who got hurt were home owners who go underwater and then lose a job. They can't afford to wait it out, they can't afford to make the payment, so they end up in foreclosure. Then the bank holds and it ends up as a zombie home.[1] The zombie falls to pieces, so the bank gets a bail out, the home is written off, and th…
All true, I was thinking about the 'home price recessions' that happen periodically as opposed to the mortgage crisis which was precipitated in part by synthetic CDOs masking poor lending processes.