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The housing market is starting to crack – Sellers are cutting prices

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Re: The housing market is starting to crack – Sellers are cutting prices

#141

Post by HDThoreaun »

Lucasoato wrote: post #19

I've thought a lot about this, without finding any comprehensive solution. The housing market suffers from inadequate regulation, allowing speculation and profit-making through the mass purchase of properties and subsequent rental hikes. We need safeguards against such practices; perhaps home ownership shouldn't just be a right but a condition actively safeguarded and championed.

The only reason investors buy homes is because they're a good investment. If you want to get them out of housing all you need to do is make housing a bad investment. That's done by increasing supply. Investors will always find loopholes to whatever regulation you come up with if it's profitable.

Re: The housing market is starting to crack – Sellers are cutting prices

#142

Post by HDThoreaun »

metamet wrote: post #66
ramesh31 wrote: post #20

Bring it on. I can't wait to buy a house in the next 6 months. People with money who want desperately out of the renting game don't care at all about 8% interest rates. But the investors and second home buyers sure do. This has been the biggest thing keeping me out of the market since 2020; the time pressure, not the prices. I just refuse to make a massive financial decision on the spot based on a 15 minute open hous…

> But the investors and second home buyers sure do. I'm curious about this, because from what I've heard, a lot of investors are incredibly happy with the higher interest rates as they're paying cash for a lot of homes, which has been squeezing real homeowners out of the market since they are able to shortcut by making offers on houses without requiring financing.

No investors are paying cash for homes. The entire real estate game is about maximizing leverage with the massive home loans you can get.

Re: The housing market is starting to crack – Sellers are cutting prices

#143

Post by vkou »

carlosjobim wrote: post #139
vkou wrote: post #135

Earlier quoted context omitted.

> Most of the planet has below-replacement birth rates currently in a rapidly declining trend. No, most of the planet has above-replacement birth rates . The developed world has below-replacement birth rates. People migrate from the former to the latter, resulting in net population growth in ~nearly country in the world. There are only a handful of countries experiencing population decline. Japan, Venezuela (Shocker)…

Have you actually looked at the data or are you just repeating things that were true in the last century? Here is the data: https://data.worldbank.org/indicator/SP.DYN.TFRT.IN

Yes, I have. [1]

Have you? Have you considered that the countries at the top of the chart you linked have a lot more people in them, than the countries at the bottom of the chart you linked? Which is why the average # of births per woman, world-wide, is 2.3?

There are exactly 19 countries that had a population decline between 2015 and 2020. 13 of them were former Soviet states. One is a failed state. [2] One isn't even a country, it's a territory of the US, and anyone in it can just buy a plane ticket, and move somewhere better[3]. Three are Western European, and one is Japan. All but two (Italy and Japan) have high numbers of people trying to leave them.

[1] https://en.wikipedia.org/wiki/Population_decline#Contemporar...

[2] Or so I hear on the news.

[3] For some definitions of better, that include 'Having electricity at some point within 11 months of a hurricane making landfall.'

Re: The housing market is starting to crack – Sellers are cutting prices

#144

Post by carlosjobim »

vkou wrote: post #143
carlosjobim wrote: post #139

Earlier quoted context omitted.

Have you actually looked at the data or are you just repeating things that were true in the last century? Here is the data: https://data.worldbank.org/indicator/SP.DYN.TFRT.IN

Yes, I have. [1] Have you? Have you considered that the countries at the top of the chart you linked have a lot more people in them, than the countries at the bottom of the chart you linked? Which is why the average # of births per woman, world-wide, is 2.3? There are exactly 19 countries that had a population decline between 2015 and 2020. 13 of them were former Soviet states. One is a failed state. [2] One isn't ev…

The discussion is about real estate. Look at the world map, most of the world is below replacement levels. Exactly what I said. Even countries like India are just at replacement levels and will soon be below as well.

Re: The housing market is starting to crack – Sellers are cutting prices

#145

Post by ramesh31 »

eweise wrote: post #56
hemloc_io wrote: post #30

Earlier quoted context omitted.

You're missing one more demographic that's a pretty big deal. California homeowners insulated from property tax due to prop 13.

California homeowners pay property tax and the rate goes up either with inflation or 2%. I'm guessing you think it should go up with the market value of the home. Thank god it doesn't or I would have had to sell instead of being able to give my kids a stable home for the past 18 years.

>Thank god it doesn't or I would have had to sell instead of being able to give my kids a stable home for the past 18 years.

No, you wouldn't. You could have taken out a HELOC for a tiny portion of your appreciation over those years to pay your fair share of taxes, the way people do in literally every other state.

Glad you got yours, though.

Re: The housing market is starting to crack – Sellers are cutting prices

#146

Post by harambae »

Der_Einzige wrote: post #47
glimshe wrote: post #26

Surprise, surprise. The historical housing bubble was caused by artificially low interest rates adopted worldwide. Ever-increasing housing prices is bad for people who own homes (higher property taxes, property tax distortions across cities, higher fees when changing houses) and those who don't own any. Low interest rates discourage saving and encourage unproductive speculation and house flipping. The people benefitt…

GenAI is going to keep the economy good while interest rates stay high probably forever, meaning that housing availability won't actually drop significantly. We should not expect house prices to go down more than a trickle.

Predicting the future is difficult.

Does anyone else remember when the top upvoted HN comment on the leaked FTX balance sheet article was “I work in the crypto industry and FTX is going to be fine…”? Because I remember that.

Re: The housing market is starting to crack – Sellers are cutting prices

#147

Post by quickthrowman »

HDThoreaun wrote: post #140
quickthrowman wrote: post #43

Earlier quoted context omitted.

Mortgage rates mostly track the 10y yield, not the federal funds rate. As I understand it, avg US mortgage duration is 9-10y which is why mortgage rates track the US10Y yield. The Fed doesn’t directly control the 10y yield like they do the federal funds rate

The fed absolutely has control over treasury yields. They're by far the biggest buyer of all the treasuries through their open market operations. By buying more or less they can change the price.

I’m aware that open market operations affect the 10y yield, my point was that the market has more influence over the 10y yield than the federal funds rate.

Re: The housing market is starting to crack – Sellers are cutting prices

#148

Post by vkou »

carlosjobim wrote: post #144
vkou wrote: post #143

Earlier quoted context omitted.

Yes, I have. [1] Have you? Have you considered that the countries at the top of the chart you linked have a lot more people in them, than the countries at the bottom of the chart you linked? Which is why the average # of births per woman, world-wide, is 2.3? There are exactly 19 countries that had a population decline between 2015 and 2020. 13 of them were former Soviet states. One is a failed state. [2] One isn't ev…

The discussion is about real estate. Look at the world map, most of the world is below replacement levels. Exactly what I said. Even countries like India are just at replacement levels and will soon be below as well.

For real estate, it doesn't matter if your birth rate is below replacement levels, when your population keeps growing.

Real estate doesn't care how people got into your country, it just cares that they did.

Re: The housing market is starting to crack – Sellers are cutting prices

#149

Post by metamet »

HDThoreaun wrote: post #142
metamet wrote: post #66

Earlier quoted context omitted.

> But the investors and second home buyers sure do. I'm curious about this, because from what I've heard, a lot of investors are incredibly happy with the higher interest rates as they're paying cash for a lot of homes, which has been squeezing real homeowners out of the market since they are able to shortcut by making offers on houses without requiring financing.

No investors are paying cash for homes. The entire real estate game is about maximizing leverage with the massive home loans you can get.

They absolutely are.

I have multiple friends who received cash offers from investment companies when selling their homes. It's fairly common and well known.

"We buy houses" companies are everywhere. It's their entire strategy.

Re: The housing market is starting to crack – Sellers are cutting prices

#150

Post by andrewjl »

metamet wrote: post #66
ramesh31 wrote: post #20

Bring it on. I can't wait to buy a house in the next 6 months. People with money who want desperately out of the renting game don't care at all about 8% interest rates. But the investors and second home buyers sure do. This has been the biggest thing keeping me out of the market since 2020; the time pressure, not the prices. I just refuse to make a massive financial decision on the spot based on a 15 minute open hous…

> But the investors and second home buyers sure do. I'm curious about this, because from what I've heard, a lot of investors are incredibly happy with the higher interest rates as they're paying cash for a lot of homes, which has been squeezing real homeowners out of the market since they are able to shortcut by making offers on houses without requiring financing.

Institutional investors would need to justify to their LPs why whatever they will end up earning beats buying and holding Treasuries instead. The higher rates Treasuries have the tougher it is to make that justification.
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