But they most likely won't, just like they didn't in the 80s. What will collapse will be home sales, but not prices (as so stated in TFA). Houses will just sit on the market for months. I see that happening now in the Seattle suburb of Redmond. I go for a lengthy run six days a week, so I see the real estate signs. And I see the same signs (in some cases) going on months now. Whereas not that long ago I'd see a sign, and in a couple of weekends it would be gone.
WA licensed realtor here, working outside the I-5 corridor... what you say is an accurate reflection of what I see in my rural market - sales are slower, but prices aren't dropping. When I talk to my colleagues who are in the Puget Sound market, they all indicate that inventory is almost tighter than it was previously - people are in a 3% rate and unwilling to move unless life forces them to do so.
I'm not an economist, but I see it as a basic function of supply and demand. So long as demand is high and supply is stable, prices must remain high. Sales may be slower (IE: you see properties sitting on market longer...) but that is a reflection of constrained borrowing / access to capital, not decreased demand.
This seems like a strange way to decide homes aren't being sold. Couldn't this just as easily be an indicator of people buying with loans rather than cash? In the former case, it can take a long time to close the transaction (on the order of months -- especially if there's any back and forth on fixups or appraisals), and realtors aren't allowed to make it a 'SOLD' sign until that happens.
This seems like a strange way to decide homes aren't being sold.
This comment is so HN. If you were expecting me to publish a full report with links to MLS data, you'll be sorely disappointed. It's just one dude running around the neighborhoods in his fancy underwear, making a mental note of the short little "home for sale->this way" signs at the corners over the course of a year. All I can tell you is, a year ago those signs disappeared in a few weeks. Now they take over a month or more to disappear. Full analysis will not be forthcoming.
Make of it what you will, or make nothing of it at all and enjoy the rest of your day.
I see, that makes a bit more sense. I thought you were talking about the big signs on posts that are placed on the lots for sale, but if you were talking about those open house markers then it might be a better indicator of difficult sales.
> This comment is so HN.
I'm new to HN, so I don't know what you mean by this. Can you elaborate? I wasn't expecting you to post some kind of research, rather I was looking to figure out what I misunderstood, and it seems like that part was a success?
Oh, it's just that folks here can expect a lot when one posts an anecdote. Like how I didn't think all the way through the implications of what I saw, and did I consider...? "Dude, it's just a story."
Not intended as an insult, and not quite a compliment, either. But it is one of the things I appreciate about HN most of the time. Take your typical "studies have shown..." post. I appreciate that folks with more experience in statistics and how studies work will post that "it might not be that bad, considering variable Y...", or "with that sample size?".
It was just an off-hand comment, perhaps too much of an inside joke.
One can spend US$100 on some fancy Nike running shorts, but they're still just one step away from boxer underwear. And that shirt with the name of the last race you ran? Yeah, fancy t-shirt, i. e., underwear.
IOW, I was being facetious. And a little self-denigrating, to make sure I don't take myself too seriously as an athlete.
Possibly, but it still be an indication of a change. My understanding is a lot of markets at a high amount of cash offers. Cash offers were more attractive since they didn’t tie the deal to financing the switch to financing based sales with indicate that deals are less competitive intern, that would likely indicate that less people are buying.
As it is, at least in unaffordable California real estate areas, the cost of construction is far higher than the price of a comparable house.
We need permitting and zoning reforms and also need to train more construction workers.
That would lower the price of new construction to below the price of existing houses, which would make it economically rational to build houses.
I’m not speaking hypothetically. The temporary house price collapse in 2008 caused a lot of tradespeople to move to other fields. That is directly responsible for the current construction labor shortage.
Construction work isn't worth doing for the wage. It isn't a problem of training. I would rather do construction myself but programming and IT pays significantly better without the travel and the bodily destruction.
Either prices collapse or nominal incomes rise to make housing affordable.
In the 80s the latter occurred... however wage inflation is not running hot enough for this to repeat on a reasonable timeline, unless wages reaccelerate. Which is entirely possible if e.g. Fed backs off before labor market loosens and we have a second wave of inflation (just as happened in the 70s and 80s)
too many stories out there where folks are buying as primary and they putting it on rent 4-6months in, and then picking another primary. There are some states that restrict such activity, others do not flag and allow for it.
a massive collapse may just never happen. states where prices have gone up that locals cannot afford, yet outside folks are moving in because it is very much in affordable range for outsiders. So demand will always be high.
Depends. Can you transfer the loan? If not, you may not be able to get the loan, because you may need to borrow more money than the bank is willing to lend with the current prices.
I wasn’t aware there even are non-transferable loans. Transfer and second charge is the common way to sell and buy while you still have a mortgage, around here.
Out of curiosity, where is "here" in this case. I've never heard of someone transferring a mortgage here (in the US). I'd _love_ to transfer my low-interest loan considering the current rates.
The loan is backed by the property, regardless of fluctuations in its price. The bank takes the risk that the property may be worth less (or more) than when they gave out the loan.
But you purchased a property at value X and likely have a mortgage to cover the majority of that purchase. The lender takes a risk, sure, but if you want to sell the property, you still owe the lender whatever the principal balance on the mortgage happens to be, regardless of the sell price of the property. If you sell the property for 50% of what you paid, you still owe the full amount. If you default, the lender takes a loss, but you also take a loss in your credit and won't be able to get a new loan. (And they will continue to try to collect.)
Sure, I continue to pay the mortgage based on my purchase price. But I’m in the same situation if I simply stay in the property I bought, as its price drops.
My point was that a drop in all property prices doesn’t stop you from selling and buying in order to move. Just like an increase in all property prices.
The issue is that you are unlikely to own your property outright. In that scenario it doesn't matter if the property you want to purchase is also depressed in price, you are very likely stuck with an upside-down mortgage.
the purpose of language is to convey a shared concept, saying “own” when you’re actually under stress from over leveraged debt speculation does not convey that concept
