Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

marketwatch.com

Post reply on HN
Print view View original

101–110 of 180 posts

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#101

Post by rspeer »

mjevans wrote: post #38

Housing is only an 'investment' because of how expensive it inherently is. However, my opinion has been that housing /has been/ in a bubble since at least the mid 2000s (pre recession); and it didn't actually deflate (at least in the area I live in) /during/ that recession. It would really be nice if some way of fixing this bubble chasing nonsense happened. Maybe if healthcare and retirement were fully socialized thi…

Cars are expensive but aren't investments; they're depreciating assets. In Tokyo, housing is a depreciating asset too.

In the US, housing is an appreciating investment because we've made that a political axiom, and because homeowners hold political power that let them fight any policy that would make housing cheaper.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#102

Post by rspeer »

refurb wrote: post #86
r00fus wrote: post #23

Earlier quoted context omitted.

> At some point you hit the cap of what people can possibly spend. Local population can be priced out if external buyers (ie, foreign cash) can pick up the slack / drive up demand. Foreign investment is likely why case-shiller is so high since mid-2000s.

Meh... even in super hot markets like Vancouver, foreign purchases were 10% of transactions. And a lot of it was in the very expensive houses. It’s locals who are driving most of the price appreciations (and flippers).

10% of the expensive houses sitting unoccupied also drives up prices. People are flipping moderately-priced houses because they have a chance of becoming the new expensive ones.

There aren't two different housing markets.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#104

Post by debacle »

pyoung wrote: post #71

Anecdote, but my wife and I dropped out of the market recently and rented instead. The rent was 30-40% cheaper than a mortgage would have been on a similar place (including taxes, insurance, etc...). So we figured we would just put the after-tax difference into a 401k (because 401k is pre-tax, for every dollar we 'saved' in housing cost, we are putting ~1.4 dollars into 401k). I figure that building equity in a house…

You'll only be able to take advantage of that downward pressure if you have a large downpayment (and finance as little as possible).

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#105

Post by debacle »

mjevans wrote: post #38

Housing is only an 'investment' because of how expensive it inherently is. However, my opinion has been that housing /has been/ in a bubble since at least the mid 2000s (pre recession); and it didn't actually deflate (at least in the area I live in) /during/ that recession. It would really be nice if some way of fixing this bubble chasing nonsense happened. Maybe if healthcare and retirement were fully socialized thi…

> It would really be nice if some way of fixing this bubble chasing nonsense happened.

Penalize corporations (banks) for holding inventory, rather than the other way around. Vacant residences should have a higher tax rate.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#106

Post by mmt »

rspeer wrote: post #101
mjevans wrote: post #38

Housing is only an 'investment' because of how expensive it inherently is. However, my opinion has been that housing /has been/ in a bubble since at least the mid 2000s (pre recession); and it didn't actually deflate (at least in the area I live in) /during/ that recession. It would really be nice if some way of fixing this bubble chasing nonsense happened. Maybe if healthcare and retirement were fully socialized thi…

Cars are expensive but aren't investments; they're depreciating assets. In Tokyo, housing is a depreciating asset too. In the US, housing is an appreciating investment because we've made that a political axiom, and because homeowners hold political power that let them fight any policy that would make housing cheaper.

> Cars are expensive but aren't investments; they're depreciating assets.

There's a case to be made that the two aren't mutually exclusive.

Sure, by the traditional definition of "investment", a profit or gain is required, but a broader understanding includes considerations such as risk and loss avoidance (i.e. hedging).

Even under the traditional/strict definition, a car could be considered an investment if the loss from depreciation is less than the loss from not having it available (e.g. having to pay more for rideshare services).

That said, with housing, it's important to remember there are two components, the depreciating part (the structure) and the land (location). The latter both doesn't depreciate and is usually the part people are investing in, at least in high-cost areas.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#107

Post by anonymous5133 »

danjoc wrote: post #7
ChuckMcM wrote: post #5

There 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…

In my area, the home prices dropped 50% from the peak in a matter of months.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#108

Post by anonymous5133 »

arenaninja wrote: post #61

I wonder if the trade hostilities are affecting foreign (particularly Chinese) real estate purchases in the US. I suspect this is the case, but it's probably not enough to significantly contribute to the slowdown (at least not more so than rising mortgage rates and overheated prices)

IMO, I think the foreign buyers will be a bigger factor than many think primarily because it was an external force not directly reliant on local wages to buy. In essence, the foreign buyers were able to prop up or increase prices much higher than the market equilibrium. If you take away those buyers then the whole thing quickly loses its foundation and falls in on itself. I think this will be the case. People think the foreign buyers are always going to be there but this is hardly the truth.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#109

Post by anonymous5133 »

debacle wrote: post #32
mortenjorck wrote: post #15

The Case-Shiller Index currently has home prices rising at 2-3x inflation: https://www.housingwire.com/articles/46307-case-shiller-home... That would certainly seem to be unsustainable.

We're still post-crash, and China is putting a lot of money into American real estate.

We aren't at post-crash anymore. House prices have fully recovered and now exceed the previous housing bubble peak.

Foreign buyers could be a catalyst that has inflated the home prices to new heights.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#110

Post by brandall10 »

shoo wrote: post #80
farnsworth wrote: post #67

I closed on a condo in Seattle literally this morning. Did I buy at the exact worst possible time?

It depends why you were buying it. Were you buying to flip it as a short term investment, or a place to live in for the next 5-10-20+ years? the market price only matters if you're forced to sell or forced to buy. if you dont need to sell or dont need to buy, you can ignore it

I bought my last place in 2006, intending to live there at least 5-10 years.

I ended up living there for 11 years, with the majority of the time being there with it some $120k underwater. It was terrible and I wished I had waited a year or two - not only did I pay more to service a more expensive mortgage, I walked away with considerably less equity than I would have if I just waited.

I don't know how anyone could possibly be thinking about purchasing a place right now. It's been 12 years since the last crash started and real estate is traditionally on a 10 year boom/bust cycle. Even if you think you want to live in your place for decades, things happen. As always, if you can help it, buy low, sell high, don't pander to emotion on what is one of the biggest purchases you can make.

Post reply on HN