I'm sorry, but saying we are at the most affordable mortgage payments in the past 2 years isn't saying anything, as prices have been unaffordable for most potential first-time homebuyers since the end of 2020. So, I'm not sure where you think all of these potential buyers will be coming from. On your chart, you are showing mortgage payment of about $2,200/mo for the median home. It appears you are excluding taxes and insurance from this amount, which on average are about $1,500/yr for insurance and $2,971 for property tax in the US per a simple google search. Including these amounts, it totals about $31k in annual payments to own a home. Using the 30% rule for affordability, this would mean that a family would need to be making about $103k in annual income to afford this median home, while the median household income is currently only $80k per the most recent federal reserve data. So again, I would be curious who you think is going to be coming out of the woodwork to create this additional demand?
You nailed it. I see the potential for home prices to drop but only the amount over which an 80k salary could afford. Housing can only crash so far and long before turning around.
As I watch real estate prices drop and unemployment rise, I'm getting anxious about my own financial stability and wondering when the market will bounce back
I'm focusing on building an emergency fund and diversifying my investments. Also, trying to reduce unnecessary expenses and create a budget that can weather any financial downturn
I've invested in bonds during the last downturn and it helped. But always research and consult a financial advisor for personalized guidance before making big moves.
SLC investor here. Your data is spot on for Utah metro areas. Under 500K is still selling very fast. I flipped 2 homes so far this year. Sold one last month just over 600K. Three offers and two more wanting to buy but not in a bidding war. It's not a crazy market but plenty of selling and buying going on. The Home next-door to mine sold for 850K in only three days this summer. If we get much lower rates (and no Civil War after this crazy election) home prices will only continue to rise in areas with low inventory.
Consider the source. The content is directed at folks in the real estate market, and they are concerned with _VOLUME_ and the factors that affect it, like mortgage rates and inventory. High inventory and low rates lead to high volume, and sale price, while important because it determines the dollar applied to their commission rates, is "stickier" when it comes to driving sales volume.
It may mean that someone would be losing money.when they sell. Not good for incenting new people to buy. ~65% of the population owns..the majority of people.
@@peterbedford2610 the historical average of home ownership since the 1950s up until now has always been around 65 percent. I’m not tracking the point you’re trying to make.
Hypothetically home price decreases -> sellers not gonna sell for losses unless they have to -> lower home supply + lower interest rate -> more buyers -> increase demand which can ended up in bidding wars -> drive home price back up.
When sellers are all waiting for the prophesized price increases that the sellers.. I mean… seers have said will come with lower interest rates, it’s possible that they’re making the age old little known market dynamics mistake of agreeing with too many market participants. In plain English: it might be that what’s actually happening is sellers all waiting to list their homes in the same year.
All I’m saying is that it’s not clear to me that listings won’t increase along with demand. Price movement will probably still depend on how much new construction is goin on, rather than prices being sure to surge with a spring season with lower interest rates
Inventory is back on the rise where I am. Don't be fooled. If shelter prices reverse higher, the fed will pivot back to hikes or another very long pause. These RE folks need to face facts. Lower prices is what will save your job.
Prices will come down in a meaningful way in a few outlier markets, but by and large national prices will move sideways at best and continue the upward climb at worst.
I'm sorry, but saying we are at the most affordable mortgage payments in the past 2 years isn't saying anything, as prices have been unaffordable for most potential first-time homebuyers since the end of 2020. So, I'm not sure where you think all of these potential buyers will be coming from.
On your chart, you are showing mortgage payment of about $2,200/mo for the median home. It appears you are excluding taxes and insurance from this amount, which on average are about $1,500/yr for insurance and $2,971 for property tax in the US per a simple google search. Including these amounts, it totals about $31k in annual payments to own a home. Using the 30% rule for affordability, this would mean that a family would need to be making about $103k in annual income to afford this median home, while the median household income is currently only $80k per the most recent federal reserve data. So again, I would be curious who you think is going to be coming out of the woodwork to create this additional demand?
You nailed it. I see the potential for home prices to drop but only the amount over which an 80k salary could afford. Housing can only crash so far and long before turning around.
Its the prices! Not the rates!
As I watch real estate prices drop and unemployment rise, I'm getting anxious about my own financial stability and wondering when the market will bounce back
Same here! I'm trying to stay calm but it's hard not to worry when everything seems so uncertain
I'm focusing on building an emergency fund and diversifying my investments. Also, trying to reduce unnecessary expenses and create a budget that can weather any financial downturn
I'm also considering investing in assets that historically perform well during recessions, like gold or bonds. Anyone have experience with this?
I've invested in bonds during the last downturn and it helped. But always research and consult a financial advisor for personalized guidance before making big moves.
Yeah, I've been considering hiring a financial advisor. My friend recommended Joseph Nick Cahill
Thanks for sharing your data and insights.
Thank you ❤
11:00 IMO, you're reading too much into a couple weeks of data. We won't really know the true balance of demand and supply until Spring of 2025.
SLC investor here.
Your data is spot on for Utah metro areas.
Under 500K is still selling very fast. I flipped 2 homes so far this year. Sold one last month just over 600K. Three offers and two more wanting to buy but not in a bidding war.
It's not a crazy market but plenty of selling and buying going on.
The Home next-door to mine sold for 850K in only three days this summer.
If we get much lower rates (and no Civil War after this crazy election) home prices will only continue to rise in areas with low inventory.
Seems totally sustainable considering stagnant wadges.
I wonder if the monthly drop in inventory is partly due to families moving before kids go back to school.
What's wrong with price decreases? Families need affordable homes
Consider the source. The content is directed at folks in the real estate market, and they are concerned with _VOLUME_ and the factors that affect it, like mortgage rates and inventory. High inventory and low rates lead to high volume, and sale price, while important because it determines the dollar applied to their commission rates, is "stickier" when it comes to driving sales volume.
It may mean that someone would be losing money.when they sell. Not good for incenting new people to buy.
~65% of the population owns..the majority of people.
@@peterbedford2610 the historical average of home ownership since the 1950s up until now has always been around 65 percent. I’m not tracking the point you’re trying to make.
@@peterbedford2610That same percentage has been the historical average for homeownership since the 1960’s.
Hypothetically home price decreases -> sellers not gonna sell for losses unless they have to -> lower home supply + lower interest rate -> more buyers -> increase demand which can ended up in bidding wars -> drive home price back up.
Median home is San Jose is $2.0M….?
23:20 This assumes mortgage rates stay the same. They will drop. Inventory will end on the year close to 2023.
mortgage rates have already dropped and inventory has only gone higher.
See lots of listings withdraw. No rush to sell from sellers.
Yup they’re hoping they can get more come spring. Unlikely to work out for a lot of them.
When sellers are all waiting for the prophesized price increases that the sellers.. I mean… seers have said will come with lower interest rates, it’s possible that they’re making the age old little known market dynamics mistake of agreeing with too many market participants.
In plain English: it might be that what’s actually happening is sellers all waiting to list their homes in the same year.
All I’m saying is that it’s not clear to me that listings won’t increase along with demand. Price movement will probably still depend on how much new construction is goin on, rather than prices being sure to surge with a spring season with lower interest rates
On point
Inventory is back on the rise where I am. Don't be fooled. If shelter prices reverse higher, the fed will pivot back to hikes or another very long pause. These RE folks need to face facts. Lower prices is what will save your job.
What a dumb comment
Prices will come down in a meaningful way in a few outlier markets, but by and large national prices will move sideways at best and continue the upward climb at worst.
@@soundsnags2001 nah, even altos is admitting prices have stopped rising already. and inventory continues to climb.
@@ronno1202 wish we could find the same in my market! Still fiercely competitive.
@@ronno1202yea that is how seasonality works.
Investing in high dividend yield stocks, ETFs, and equity, I managed to make a net profit of around $115k😇😇
Home prices need to equal out to the property tax
We just experiences price gains for the next 10 years or more, unless they just keep printing. So yeah….
If that’s true that’s good news for the economy. Any wage increases could actually be spent at local small businesses.
Finally! Prices needed to come down anyway. Hopefully, this won't be like 2008.