Price decreases in any residential markets?
With higher interest rates for seemingly a longer period of time, student loan payments recently coming back to effect, higher oil prices, and resi demand at 25 year lows, it seems like the resi market may have some stagnation or headwinds.
But has anyone seen any price decreases in any markets, and would any of those places be good areas to buy into over the upcoming year or two? Interested in SFR and MFR
Haven’t prices come down a bit in many markets?
Bump interested
I've only seen a slight decrease in SFH prices in the markets I've been considering buying a home in. I think there's just so little volume that homes are priced for the minority of people willing to overpay because they're either really rich / getting parental help or they need to buy (growing family, relocation). For people looking more casually that don't NEED to buy a home, prices still seem way too high when looking at the monthly mortgage payment vs current mortgage/rent payments.
If you're looking to buy a SFH as an investment I haven't seen anything that comes close to making sense. As an example, a $1mm SFH listing around me would have about a $7k mortgage right now (including tax/insurance) and would probably rent for about $4k month, maybe $5k max.
I've seen a bit more of a price decline in smaller 2-5 unit MFH around me, I assume because there aren't the same irrational/forced buyers who are overpaying for a SFH primary residence, but its still tough to find anything that makes sense, but sellers/brokers are definitely starting to get more realistic.
Price declines, from what I have seen, have been more at the bottom of the market, higher end stuff is still holding strong.
Yeah I have been looking into homes as well recently and its crazy to me how overpriced some of these homes are... Nothing really makes sense right now with the monthly payment being so high due to interest rates. Are there any markets out there that people think are due for a correction? Its hard to know obviously, but still would love to know where people are thinking could see large discounts...
If you want to make money buying houses, buy waterfront.
Was sitting in the lobby of my luxury apartment the other day and overheard a group of residents talking about how they're going to all start buying their homes in the next couple months. Their logic is that once rates come down, everyone will rush in and drive prices higher. Insane logic to me - the way rates come down significantly is if prices come down first. But I think there's still a lot of people out there thinking that way.
Agreed, I hate the false representation that realtors have been spreading ("marry the house, date the rate"). What realtors and most people don't understand is that fed rate hikes / cuts are countercyclical. What would cause the fed to lower rates would be higher unemployment and lower GDP growth. Therefore asset values actually normally come down when the Fed is cutting rates as seen during the GFC. On the flip side asset values go up at the same time the Fed is hiking rates as we've seen over the past year.
What I hate the most is how realtors seemingly get away with swearing up and down that prices will skyrocket once the Fed cuts rates again which is not only categorically false, but is also misrepresentation and securities fraud. I remember I even had a realtor last year tell me that interest rates were going to start coming down by spring of 2023. What a lie!
Chilling with my rent payment that is < 50% of what my desired home's mortgage will be.
Same. I saw a 2 bedroom condo listed at $285k. If I put 5% down my monthly payment would've been $3k. Why on earth would you buy right now?
Nationally, home prices have actually hit a 30+ year high based on Case-Shiller Index. In local markets, there have been some price declines but nothing that outstrips appreciation in recent years. A place like Austin has seen astronomic price appreciation of 141% since 2008 but recently, is down -12% from ‘22 peak. Affordability is challenged with wages lagging inflation and prices + mtg. rates at multi-decade highs. However, there is no existing home supply because no one is selling out of their low mortgage rate to enter a supply challenged market at (probably) peak mortgage rates in this cycle. While demand is softening, it still outpaces supply. That is driving prices higher. Absent of a large job-loss recession with high foreclosures (unlikely), I don’t expect prices to meaningfully come down at a national level. Local market conditions vary, but most will see the same.
I know Case Shiller is the gold standard measurement but why is it so different from what actual SFH transaction indices show?
Median Sales Price of Houses Sold for the United States
https://fred.stlouisfed.org/series/MSPUS
Case Shiller
https://fred.stlouisfed.org/series/CSUSHPINSA
The Case-Shiller Index and median sales prices differ due to their methodologies. Case-Shiller tracks repeat sales of the same properties to provide a more consistent view. Median sales prices reflect a mix of properties sold, which can skew data. For example, new construction typically sells for a premium to existing homes for obvious reasons. Both have their merits, but Case-Shiller's repeat sales approach is considered more robust for long-term trends because it removes some of the biases and focuses solely on same home price appreciation.
Still increasing due to supply demand
Redfin has a really helpful dashboard for this. Better viewed on a computer than phone fyi
https://www.redfin.com/news/data-center/
Hasn’t supply been restricted because tons of people refi and bought 2.8% mortgages back in 2020 and 2021?
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