Predict how when & how far Real Estate drops

Stagflation

 

All real estate markets are local. The only thing that would have a nationwide impact is a significant and quick rise in interest rates. For various reasons, I doubt we will see a large rise in the rate soon.

 

My guess - except for management-class+ neighborhoods, the northeast, mid-atlantic, and parts of midwest come to screeching halt. Metro areas in the Sunbelt, southwest, and Cali-transplant targets (ID, CO, UT) keep marching on across most/all pricepoints, but % of investor purchases increases even more. Rural areas hit pretty hard everywhere (unless they are in driving range of a big city).

 

Not in the short term. Too much money printing going on. Also, there are cash buyers unaffected by interest rates. And the current admin is talking CRA in some areas. The same areas that defaulted last time ! lol

A few years ago, you could have gotten a 500 sq' studio in a Trump Tower for 500k. Now they're 2 million. Bad time to be out of the market.

 

zero.

 

zip.

 

The crash this time will not be housing. It may pause. A few prices might soften. But crash, no.

Inventory today is at 1971 levels. There are a lot more heads today than in 1971.

If any sector is overbuilt, it is class A apartments.


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No doubt they’ve built a ton of apartments but rents are strong. All the folks that can’t qualify for home loans rent them. That’s a lot of people.

 

No doubt. Inventory is tight. This is not 2007.

No, the fire this time will be Silicon Valley.

 

I'm hoping the second home and investment rental market correct anyway. I'm getting ready to sell my company this year and need to put it all somewhere. I've been thinking rolling it over into beach condos in opportunity zones to defer/avoid cap gains. Sure as hell not putting it in the market. So I'm hoping that bubble bursts and inventories are up by late this year or into winter. But yeah, RE markets are all local. Here no Northern Virginia, they may flatten but will always trend up.

 

Goto Realtor.com and type in your area then select price drops, I'm looking at Beverly Hills 90210 and there are a lot of price cuts, not long ago most all were sold OVER asking price.

https://www.realtor.com/realestateandhomes-search/90210/sby-7

 

One of the target vacation rental areas I've been monitoring, the inventory has tripled lately and every update there are more price drops than new listings. It's happening. Was listening to one expert who was saying inventories should probably start rising even quicker from sellers who were on the fence prior now wanting to take advantage while they still can.

 

Sellers finally selling and new homes sitting without buyers are not the same thing. Sellers finally selling cannot produce enough inventory to satisfy demand.

Here in Miami Beach the only places with price cuts ($5k to get an email alert to send) are condos that really really suck.

I'm trying to build in Scottsdale, AZ. Massive delays and high prices on all fronts and no sign of demand slowing.

 

From one of the agents I have tracking in Myrtle Beach, " In the past 7 days, 76 Condo prices have been reduced 6 to 20 percent off of original asking prices. This leads me to believe the market is adjusting." That's barely a sniffle but an indicator for that market anyway. Whatever's going to happen, I want it to get it over with in the next 9-12 months.

 

https://wealthion.com/could-home-prices-crash-as-much-as-in-2008/

 

https://markets.businessinsider.com/news/bonds/housing-market-crash-biggest-contraction-since-2006-freddie-mac-economist-2022-6

 

Sold off my "spare" properties last year and am amazed to see so many price cuts in Virginia, Florida, and Texas occurring now. Didn't necessarily get the peak for each property (one was a bidding war), but thankful I wasn't on the other side of the transaction.

 

For certain , predicting 1 year out is absolutely uncertain. From 2010 it’s been a bull run of unprecedented optimism. An entire group of younger entrepreneurs will soon face decisions never contemplated. Location and values come into play as much as interest rates and inventory. After 35 years of real-estate investing, I’m paying the tax and taking no more risks .


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Bear market rally behind us, over the waterfall we go. My prediction is a 24,000 bottom for DOW, 2700 S&P.

 

No price cuts in E. TN. My realtor said she’s getting fewer bidders (bids over asking) but it’s still happening.

I don’t see housing going down. However, I’m in a “move into” area as opposed to a “move out of” area.

 

The S&P is currently trading at a 19PE. In 2009 it was trading at a 130pe before the crash. Can you explain why you think the S&P can trade for almost half what it’s trading for now? You think it’ll drop to a 10 multiple? That’s lower than I sold my company to private equity for.

 

you guys realize that home values are up something close to 20% year over year...right? You realize that the average home owner has nearly $200k in equity, right? If there are price reductions from the over inflated list prices this really means nothing more than the sellers are going to net slighly less, not lose money.