How are people affording these crazy home prices?

[BeaverHunter]

Homes that ballooned into the 800k and up range almost all have dropped over 100k already. Most still are not selling. The stuff over 1.5 that were selling just 3 months ago I'm seeing 2-400k drops in prices. No one's even looking at them let alone putting in offers. Stuff below 500 is actually selling at it's appraised value again.

Its adjusting down even in areas that have been super hot markets. Here in Idaho Falls there is 567 active agent listings on Zillow with 223 of those that have had prices lowered. A year ago there wasn’t 200 listings. Anyone that doesn’t think prices will come down doesn’t pay attention to history very much. Im not saying a 2008 level crash is imminent but a 10-20 percent correction seems likely with more on the high end expensive stuff. Just my opinion.

 

[z987k]

Its adjusting down even in areas that have been super hot markets. Here in Idaho Falls there is 567 active agent listings on Zillow with 223 of those that have had prices lowered. A year ago there wasn’t 200 listings. Anyone that doesn’t think prices will come down doesn’t pay attention to history very much. Im not saying a 2008 level crash is imminent but a 10-20 percent correction seems likely with more on the high end expensive stuff. Just my opinion.

That's what I'd expect to. Basically whatever the higher interest rate made the payment go up, the price must come down so the monthly payment is the same, since that's generally all people look at, the monthly payment.

 

[Crghss]

gobbling up those 3/1 and 5/1 arms in the last 2 years with the far less than 2% interest rates so they could wildly overpay for a house they couldn't actually afford.

why would anyone get a 2% ARM when you can get a 2% fixed?

Those low interest rates definitely helped drive up price.

 

[z987k]

why would anyone get a 2% ARM when you can get a 2% fixed?

Those low interest rates definitely helped drive up price.

They were less than 2%. I think ARMs got down to 1% at one point.

 

[fmyth]

why would anyone get a 2% ARM when you can get a 2% fixed?

Those low interest rates definitely helped drive up price.

No one got 2% fixed on a 30 year purchase mortgage unless they bought the rate down by paying points up front. Dec 2020 rates for 30 year purchase mortgages were the lowest on record at 2.68% and that was for a very short time. In 2021 rates for a 30 year purchase mortgage were between 2.70% and 3.10%.

 

[Marble]

I think the 2% fixed was for well qualified buyers with 20% down on 15 year loans. Just a guess but that's typically who can get rates like that.

A lot of people don't even understand how an interest rate works. They don't realize how much it costs overall to finance and only concentrate on what the monthly payment is.

I do not see this market being like the 2008 market. The main reason for the change in price over the last two years is a lower supply of homes. If the suppliers are able to get product created for home building and interested rates continue to go up, it will slow and possibly lower prices, but it won't crash like 2008. Some might call it a crash but it wont be like 2008.

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[aftriathlete]

My house in Vegas has been on the market for 8 weeks now. Have dropped the asking price 10% already just to try to generate interest, but given that Vegas is the most volatile housing market in the US the market has gone ICE cold since it hit peak craziness in Feb/March 2022. Got a cash offer this past week for $20K below our current asking price (after dropping 10% already) from a Chinese real estate investor, it had a Chinese name for the LLC and the signature was a Chinese last name. We countered at halfway between their offer and our ask, and they walked away. Considering we got another cash offer 6 weeks ago for $80K under our asking price this is just another investment firm throwing low-ball offers around everywhere to try to catch people desperate, then it’s a high-dollar rental. I couldn’t bring myself to take it in the shorts for a Chinese investment company to make a buck. The bitch about it is, the next offer we get might be $20K less than that. The market seems to be imploding, at least in Las Vegas.

 

[amassi]

I think the 2% fixed was for well qualified buyers with 20% down on 15 year loans. Just a guess but that's typically who can get rates like that.

A lot of people don't even understand how an interest rate works. They don't realize how much it costs overall to finance and only concentrate on what the monthly payment is.

I do not see this market being like the 2008 market. The main reason for the change in price over the last two years is a lower supply of homes. If the suppliers are able to get product created for home building and interested rates continue to go up, it will slow and possibly lower prices, but it won't crash like 2008. Some might call it a crash but it wont be like 2008.

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We got 1.99 refi and knocked 3 years off our original note 23-20. They offered us 30 for the same rate but I'd didn't make sense to add time for us.

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[txjustin]

Guys, 08 is not going to repeat. We aren’t going to see a real estate crash. The fundamentals are much different than 08. What we are likely to see is a slow down in appreciation. Interest rates have already dropped substantially in the last month. I expect them to drop further.


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[fmyth]

Guys, 08 is not going to repeat. We aren’t going to see a real estate crash. The fundamentals are much different than 08. What we are likely to see is a slow down in appreciation. Interest rates have already dropped substantially in the last month. I expect them to drop further.


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The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 US Foreclosure Market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.

MSN

 

[svivian]

The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 US Foreclosure Market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.

MSN

You have to look at the big picture. Compare those foreclosure rates to say three years ago or more and you’ll see drastically smaller percentages.

There were very few foreclosures in the last two years due to the fed allowing borrowers to kick the can down the road for so long

 

[txjustin]

The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 US Foreclosure Market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.

MSN

Look at the actual numbers, not percentages.


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[bozeman]

#BoomerAdvice

You checked the prices on 1200 square foot houses lately? I looked at a 900 square foot house a couple of months ago that ended up selling for 700k cash.

Boomer? Ha, try again. You choose where you live, you choose what activities you take part in. Move, quit drinking alcohol, give up the $800 smart phone, etc…..there is a way, people no longer have the will……..no one wants to do that……so deal with the high prices.

 

[bozeman]

Maybe 10-15 years ago. That ship has sailed…. Tell that to a high school or college graduate today.

The ship has only sailed if you let it……nephew is 21, makes a decent living as a Maint Tech……he seems to be well on his way to financial freedom. It’s just easier to complain than it is to sacrifice…….

 

[trevvamos]

I do feel bad for first time home buyers right now.

I have gotten lucky on both my homes. I bought my first house when the real estate market was trashed. 2010. Paid $160k for a log home on 4 acres. Full basement, 2 car garage and one car detached garage. Sold that house 6 months ago for $375k.

Turned around and bought my in laws house. They sold it to me for $100k less than what they could have gotten out of it in this current market. But they didn’t care. They built it 25 yrs ago for $150k. They were just happy to keep it in the family.

Where do you live? Log cabin on 4 acres would be 1.25-1.5 million around here

 

[fmyth]

You have to look at the big picture. Compare those foreclosure rates to say three years ago or more and you’ll see drastically smaller percentages.

There were very few foreclosures in the last two years due to the fed allowing borrowers to kick the can down the road for so l

Look at the actual numbers, not percentages.


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Look at the actual numbers, not percentages.


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I've looked at the numbers every day for the last 22 years. It's what I do for a living.

 

[amassi]

The ship has only sailed if you let it……nephew is 21, makes a decent living as a Maint Tech……he seems to be well on his way to financial freedom. It’s just easier to complain than it is to sacrifice…….

Yea guys move to Bozeman and live with this guys nephew financially free and homeowner on a maint tech salary.

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[amassi]

I've looked at the numbers every day for the last 22 years. It's what I do for a living.

Any particular reason why foreclosure may have been kept low in 2020-2021? Historically low interest rates, tax rebates, stimulus checks, frozen student loan payments, loan payment forgiveness and extensions et el.
How do today's numbers compare to 2015? Or 1994? Or the historical average?

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[CorbLand]

I'm looking forward to buying a few of them for .25 on the dollar.

This is a pretty sad thing to be looking forward to. For that to happen, it means that millions of good, hard working people will lose everything.

 

[z987k]

This is a pretty sad thing to be looking forward to. For that to happen, it means that millions of good, hard working people will lose everything.

It means millions of people made really bad decisions. In order for our whole system to work, there has to be negative consequences for bad decisions. When you touch the hot stove, after being told not to, it's supposed to burn.

If I went out and got a loan I can only afford because it's an ARM or even if it's fixed and I could just barely make the monthly payment, and then something happened like the rate adjusted, or I lost 5% of my income, and that caused me to not be able to make the payment, then I'm a complete idiot. And I should lose a substantial amount of money on that.