Economy The great housing market crash of 2022

[cottagecheesefan]

Also I don't see how people will suddenly not be able to pay their mortgages after buying or refinancing with the lowest interest rates ever last year.... unless they lose their jobs (which could happen down the line). But right now unemployment is at historic lows because of the labor shortage going on as well. If anything the people buying now are the ones in danger of getting foreclosed on down the line.

People will stop being able to pay because American's are already going into record high debt and/or burning through savings just to get by, coping with inflation. As inflation increases, that will only increase, along with interest rates now making debt harder to come bu

That is pretty easy reasoning to follow. Simple, as.

 

[CantCucktheTuck]

I feel this...

I just made a bid $65000 over asking and was still outbid.

don't fall victim to the bubble.

 

[deadon]

No, in 2008 everyone was defaulting on their sub-prime mortgages and the housing market got flooded with inventory. Currently about 95% of people in the US have fixed rate mortgages

Meanwhile
https://www.mashvisor.com/blog/adjustable-rate-mortgage/

 

[Hatorade]

Housing prices are actually going to continue to climb in some markets when you incorporate the interest rates.

The crash will hit places like TX, AZ, ID, FL etc.

States like Oregon or Washington will just continue to be stupid because there's no profit to be made as a builder and they are being flooded by transplants from a state with over 40 million people in California. It's a supply and demand thing that's going to get worse. The more white folks in CA that sell their million dollar homes to get away from the mess CA is, the more they destroy the markets wherever they go. They're like locusts on the Oregon coasts, Bend or Spokane.

 

[MeatheadMike]

Sure people got great rates but if they bought in the last few years they paid too much.

With these rate increases it will bring down the prices. This will put people underwater that bought within the last few years. Sure they can stay in the home they have but there will be no equity loans. People won't be able to pull cash out.

If you add in inflation and fuel prices people are struggling. We're starting to see the layoffs and soon it will be a domino affect. Then wages will adjust and the distance from wages and inflation will increase. Again, more of a domino affect.

Lack of housing won't matter. You can't force people to pay when they can't. I see prices dropping 30 to 40%. I also see families having to pool together and live under one roof.

But hey this is just my opinion based on what I've seen in the past and present.

Best part is we have a running topic on this so we can look back and see what guess was the closest lol.

Overpaying $50K on a house with a 2.8% mortgage is an amazing deal compared to not overpaying with a 6% mortgage, if you calculate the monthly payments.
Housing prices in 2008 fell on average around 14%... and that was the biggest housing crash ever due to lending practices which no longer exist. I just don't see how they can fall 30%+ when people have far more favorable loans.

Meanwhile
https://www.mashvisor.com/blog/adjustable-rate-mortgage/

Yep, like I said in my other post, the people buying right now are the ones at high risk of defaulting down the line.... but that will likely be years from now.

 

[drstrangelov]

Meanwhile
https://www.mashvisor.com/blog/adjustable-rate-mortgage/

If that trend actually manifests it will likely be in parallel to declines in total transactions, making it pretty much meaningless.

Serious question, half way through 2022 with mortgage rates doubled in the past year, have housing prices declined at all? The market is still very hot where I live owing to high demand low inventory, but I’m thinking the impact of higher rates will take time to show up. When do we expect to see year over year declines in home prices in 2022?

 

[deadon]

Overpaying $50K on a house with a 2.8% mortgage is an amazing deal compared to not overpaying with a 6% mortgage, if you calculate the monthly payments.
Housing prices in 2008 fell on average around 14%... and that was the biggest housing crash ever due to lending practices which no longer exist. I just don't see how they can fall 30%+ when people have far more favorable loans.


Yep, like I said in my other post, the people buying right now are the ones at high risk of defaulting down the line.... but that will likely be years from now.

50k? Is that what you think people overpaid? I dunno man. We paid 350k 7 years ago. 4 months ago I got a real estate lady knock on my door and said she has a cash buyer for 950k.
My same model but not on a acre like I am just sold for 900k.

There's no way my 2800 sq ft home is worth 950k.

 

[deadon]

If that trend actually manifests it will likely be in parallel to declines in total transactions, making it pretty much meaningless.

Serious question, half way through 2022 with mortgage rates doubled in the past year, have housing prices declined at all? The market is still very hot where I live owing to high demand low inventory, but I’m thinking the impact of higher rates will take time to show up. When do we expect to see year over year declines in home prices in 2022?

If I knew I'd own 20 homes haha. We do know the applications are slowing and rates are increasing.
Let's see what next month's numbers show.

 

[SammyPops]

Saw on the news last night that the same mortgage amount at June 2021 required a $1700 biweekly payment and now requires a $2400 biweekly payment due to interest rates hikes.

Glad my house will be damn near paid off when my current term is up in a few years.

 

[drstrangelov]

If I knew I'd own 20 homes haha. We do know the applications are slowing and rates are increasing.
Let's see what next month's numbers show.

Where I live transactions are way down, but time on market is also down and average sales price is up. It’s not so much a crash in home values as it is a marked decline in gross real estate sales. That doesn’t impact homeowners, it impacts people who profit from the sale of homes.

Im not claiming to know what’s coming either, just defaulting back to supply and demand, it seems like the rapid increase in interest rates might impact both sides of the equation rather than simply sinking demand.

 

[TardStrong]

Adjustable rate or fixed when you lose your job you wont be able to pay and you wont be able to sell because interest rates are going to make it a buyer's market when the economy is crushed. Prices will come down.

We are in the bubble guys the bubble in some areas is still expanding....grow bubble grow

 

[Dalarna3]

This wasnt the case in 2008?

The issue in 2008 was oversupply to people that should not have qualified for mortgages. There is now a massive undersupply of housing. While real estate will go down, it has intrinsic value as people have to live somewhere.

 

[deadon]

More to chew on.
https://www.cnn.com/2022/06/15/homes/compass-redfin-layoffs/index.html

 

[MeatheadMike]

50k? Is that what you think people overpaid? I dunno man. We paid 350k 7 years ago. 4 months ago I got a real estate lady knock on my door and said she has a cash buyer for 950k.
My same model but not on a acre like I am just sold for 900k.

There's no way my 2800 sq ft home is worth 950k.

7 years ago is a long time... things are never going back down to those prices. On average last year people were bidding around 5% over asking, so I just used $50K as an example. Your example also brings up another point.... lots of people have been buying cash, and are still doing so which is another indicator that the housing market isn't crashing anytime soon.

 

[drstrangelov]

Adjustable rate or fixed when you lose your job you wont be able to pay and you wont be able to sell because interest rates are going to make it a buyer's market when the economy is crushed. Prices will come down.

We are in the bubble guys the bubble in some areas is still expanding....grow bubble grow

What future struggles do you see coming for the economy that go beyond what’s happened the last two years?

 

[TardStrong]

The issue in 2008 was oversupply to people that should not have qualified for mortgages. There is now a massive undersupply of housing. While real estate will go down, it has intrinsic value as people have to live somewhere.

Do you have any stats on people that couldn't afford their mortage because they lost their job vs their payment ballooned?

 

[panamaican]

People need to stop treating any decline in prices as a "crash". Prices will decline somewhat, prices won't crash. Higher interest rates will affect demand from individuals who need to finance but there's still an undersupply so it's going to be offset to some degree. But institutions and cash buyers are still going to be gobbling up inventory because as people move out of the buying space, rents are going up. And for institutions and cash buyers, the change in mortgage rates doesn't matter.

There are plenty of investors sitting on cash waiting for individual demand to cool off.

 

[deadon]

7 years ago is a long time... things are never going back down to those prices. On average last year people were bidding around 5% over asking, so I just used $50K as an example. Your example also brings up another point.... lots of people have been buying cash, and are still doing so which is another indicator that the housing market isn't crashing anytime soon.

Yes, lots of people in crypto had a lot of cash. What's the losses? Trillions in the last week? Tech has also taken a hit and we saw a ton of bay area buyers with cash. That has slowed.

Again, I'm not saying we will see a total crash. But it's just my opinion we'll see 30 to 40% drops over all time highs.

We'll see what happens.

 

[MeatheadMike]

People will stop being able to pay because American's are already going into record high debt and/or burning through savings just to get by, coping with inflation. As inflation increases, that will only increase, along with interest rates now making debt harder to come bu

That is pretty easy reasoning to follow. Simple, as.

Inflation is hurting people but its not going to make them default on their homes, unless they lose their jobs. The first logical thing they will do is stop spending money on gas which is the thing that's increased the most.... but demand destruction for gas hasn't even happened yet.

 

[deadon]

7 years ago is a long time... things are never going back down to those prices. On average last year people were bidding around 5% over asking, so I just used $50K as an example. Your example also brings up another point.... lots of people have been buying cash, and are still doing so which is another indicator that the housing market isn't crashing anytime soon.

Can I ask when the last time you bought a home was?