From Fortune:
The housing market just slid into a full-blown correction, says top economist Mark Zandi
Moody’s Analytics chief economist Mark Zandi is ready to call it. He tells Fortune that we’ve officially moved from a housing boom into a “housing correction.”
The real estate data rolling in for April and May shows that the U.S. housing market is softening. New home sales fell 19% to their lowest level since April 2020. Redfin reports 19% of home listings cut their price over the past month. Inventory is rising fast, while mortgage applications and existing home sales are also falling.
This drop-off isn’t a result of seasonality, or a soft month or two. Zandi says it’s a trajectory flip: Demand is pulling back—fast—in the face of mortgage rates that have spiked dramatically.
“The housing market has peaked…everything points to a rolling over of the housing market,” Zandi says. “In terms of home sales, they’re falling sharply. Housing demand is coming down fast. Home price growth [will] go flat here pretty quickly; we will see [home] price declines in a significant number of markets.”
Unlike a stock market correction, which means a greater than 10% drop in equities, Zandi says a “housing correction” means the end of the housing boom and the beginning of a period where home prices will fall in some regional markets. Over the coming 12 months, he expects year-over-year home price growth to be 0%. If that comes to fruition, it’d mark the worst 12-month stretch since 2012. It would also be whiplash for real estate agents and brokers who’ve watched home prices soar 19.8% over the past year.
Hordes at the shore.
Looks like it’s going to be a beautiful day today, and a scorcher tomorrow.
Housing prices in our area never seem to be subject to drastic declines. It had no problem jumping on a 20% gain year over year but declines in the NJ/NY/CT area are forever stubborn. Not that I want to see a big slide but f.uck me, if this is the way it is, then I want haughty money for my house if/when I sell.
Absurd at 600K. It should be listed in the high 400s:
https://www.trulia.com/p/nj/hillsdale/36-highland-ave-hillsdale-nj-07642–2006681811?mid=0#lil-mediaTab
900K for this one… not sure what the idea here was and the pool needs to be fixed, whatever that means:
https://www.trulia.com/p/nj/hillsdale/25-rutgers-pl-hillsdale-nj-07642–2006681160
Wait, check that… that house above should be in the low 400s, not high 400s.
“Looks like it’s going to be a beautiful day today, and a scorcher tomorrow.”
Don’t crash your motorcycle. or car. Or slip on the diving board. I have to work and want a light day.
Stay safe and don’t drink too much.
Like everything else in life. Complex problems require complex explanation to find solutions. Here is Jordan Peterson at 37 minutes, but it gets to the heart of the matter regarding mass shooters.
https://youtu.be/GYua-3JmnT4
Fast: I saw big declines in Bergen co during the last bust, 100k and more. No are is immune. Some areas will be hit harder , but no area is immune.
If rates go up to 8-9 % a crash will occur, Fed had rates WAY TOO LOW. So many people will be caught off guard, and actually surprised, we have been here before and history repeats itself.
Violence everywhere.
“Baltimore Police Commissioner Michael Harrison blamed “young people carrying guns” and “a total disregard for human life” for the city’s rampant violence Saturday.
Multiple shootings in Baltimore on Saturday into Sunday left four dead including a teenager, according to The Baltimore Sun.”
Read Moody’s chart and understand this.
“Look at this chart(you have to scroll down from the fortune article shared by old realtor). Exactly what I have said on this blog. Nyc metro is the safest real estate in the country. It is undervalued by 6%, meanwhile florida is overvalued by 73%…same with all the other “hot” spots. Why you would buy in these locations is beyond me. Sell your undervalued northeast real estate to buy overpriced real estate in Florida and other “it” locations.
“The degree to which regional home prices are overvalued or undervalued, according to Moody’s Analytics””
3b says:
May 29, 2022 at 11:10 am
Fast: I saw big declines in Bergen co during the last bust, 100k and more. No are is immune. Some areas will be hit harder , but no area is immune.
They will never go this high…it will create a depression with the fed govt defaulting first. Pension systems would love this though.
Jim says:
May 29, 2022 at 12:38 pm
If rates go up to 8-9 % a crash will occur, Fed had rates WAY TOO LOW. So many people will be caught off guard, and actually surprised, we have been here before and history repeats itself.
What did I always say was going to happen. Blue states create high taxes…no, successful economies do. The more successful it is, the more it costs to get anything done. From rent to labor.
“Austin: a rise in property taxes are causing an increase in resale supply, and we expect it to continue. Bonuses for both buyers and agents are starting to come back in the new-build sector.”
This article lays out a simple way to answer “how much RE can I afford” question
https://www.financialsamurai.com/primary-residence-value-as-a-percentage-of-net-worth-guide/
tl;dr
Age 25 – 30: 80% – 200% of net worth – Shoot to buy a primary residence by age 30
Age 31 – 35: 60% – 150% – Work to grow your net worth through aggressive savings and investing
Age 36 – 40: 40% – 100% – Shoot to have your primary residence equal to a minority of your net worth by age 40
Age 41 – 45: 20% – 50% – Shoot to have your primary residence equal 30% of your net worth by age 45
46+: 20% of net worth or less if desired
What do you think?
“Sounds like after 40yrs of stripping employees of competitive wages relationally to their productivity, employers are getting anxious to punish 8months of strong labor markets. Threats to return to the office are already starting”
Been following his blog for a while. He’s pretty on point, just ignore the parts where he tries to sell you.
RentL0rd says:
May 30, 2022 at 6:54 pm
This article lays out a simple way to answer “how much RE can I afford” question
https://www.financialsamurai.com/primary-residence-value-as-a-percentage-of-net-worth-guide/
He is def more a bull than bear, but he gives solid opinions and advice for free.
He called this midwest real estate move years ago. Put his money where his mouth is too. Said that he believed the market buyers would chase the cheaper value and drive it up…exactly what happened past couple of years.
Agreed GP. At least he put more effort in making the case than a tiktok RE influencer.
One of the best real estate blogs, imo. 3b should read it and stop torturing himself with dreams of real estate becoming cheap again. Never going to happen, wish I could help him see the light.
LGR!!
Going to kill the economy
https://twitter.com/fxhedgers/status/1531437337816670208?s=21&t=OMlU9ZHfKL9BSh_6BPAOZg