Property market crash?

[Arctic Fox]

There are plenty of signs of a severe downturn in US property, with home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade.

If the property market crashes, it will tip the economy into recession.

If there are losses on mortgages, it will threaten the stability of the financial markets and will determine what the Federal Reserve will do with interest rates.

In 2008, the collapse of the subprime mortgage market triggered a global financial crisis.

[larbud]

There are plenty of signs of a severe downturn in US property, with home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade.

If the property market crashes, it will tip the economy into recession.

If there are losses on mortgages, it will threaten the stability of the financial markets and will determine what the Federal Reserve will do with interest rates.

In 2008, the collapse of the subprime mortgage market triggered a global financial crisis.
Ain’t be got nuttin do do with declining inventories from all the ny/cali escapees?

[Stu from NYC]

In last three years real estate market went up up up and nothing goes up forever.

will be interesting to see what happens next. Rise in interest rates seems to be having a great effect on housing markets and the softening is just beginning.

[Garywt]

For most of the country the big selling season is around the corner. People sell and buy in the spring so they can settle in at the end of the school year. That has caused the prices up the last few years.

[manaboutown]

Pending home sales rise by most since June 2020 as housing market looks to rebound (https://finance.yahoo.com/news/pending-home-sales-jump-by-most-since-june-2020-as-housing-market-looks-to-rebound-150522141.html)

[CoachKandSportsguy]

Why the housing market isn't like 2008:
* Fixed rate mortgages interest rates have been very low and many purchased and refinanced with low rates
* Banks' capital structure is much less leveraged that 2008
* The US is still short homes vs the household formation growth
* There are lots of cash sales from boomers retiring and downsizing
* the energy market is declining and causing less stress on the marginal buyer
* working from home makes workers more immune to energy spikes
* retail product inflation is receding and some are deflating. .

so there will be a lot more pain required in the labor market to start the default spiral again.

Note: The 2008 summer olympics in Bejing caused a multi year increase in commodities and energy to build the massive structures for the opening ceremonies. Check the price of energy right before the olympics started and then several months afterwards. . .

However the spike in energy squeezed a lot of marginal home owners and the some of the defaults started. . . choice between driving to job and paying mortgage, and can't pay mortgage without driving to the job. . . defaults started with the over leveraged home owners.

So that squeeze caused some of the overleveraged home owner mortgage defaults, and the spiral started.. . . the payment equilibrium blew up. . .

finance guy who had transferred all mutual funds to cash in the summer of 2007 and gave a presentation of such at work. . . where people had no idea of what I was presenting. . .

good luck

[retiredguy123]

It's always a good time to buy a house. Ask any real estate agent.

[Babubhat]

All property markets are local. Period

[ithos]

There are plenty of signs of a severe downturn in US property, with home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade.

If the property market crashes, it will tip the economy into recession.

If there are losses on mortgages, it will threaten the stability of the financial markets and will determine what the Federal Reserve will do with interest rates.

In 2008, the collapse of the subprime mortgage market triggered a global financial crisis.

There will not be another 2008 like housing crash until there is another housing glut and renting makes more financial sense than owning a home.

Home prices can and probably will decline due to a broader economic downturn caused by the Federal Governments fiscal irresponsibility in running up tens of trillions in debt.

[CoachKandSportsguy]

It's always a good time to buy a house. Ask any real estate agent.

Always best during the first half of the calendar year.

[Worldseries27]

why the housing market isn't like 2008:
* fixed rate mortgages interest rates have been very low and many purchased and refinanced with low rates
* banks' capital structure is much less leveraged that 2008
* the us is still short homes vs the household formation growth
* there are lots of cash sales from boomers retiring and downsizing
* the energy market is declining and causing less stress on the marginal buyer
* working from home makes workers more immune to energy spikes
* retail product inflation is receding and some are deflating. .

So there will be a lot more pain required in the labor market to start the default spiral again.

Note: The 2008 summer olympics in bejing caused a multi year increase in commodities and energy to build the massive structures for the opening ceremonies. Check the price of energy right before the olympics started and then several months afterwards. . .

However the spike in energy squeezed a lot of marginal home owners and the some of the defaults started. . . Choice between driving to job and paying mortgage, and can't pay mortgage without driving to the job. . . Defaults started with the over leveraged home owners.

So that squeeze caused some of the overleveraged home owner mortgage defaults, and the spiral started.. . . The payment equilibrium blew up. . .

Finance guy who had transferred all mutual funds to cash in the summer of 2007 and gave a presentation of such at work. . . Where people had no idea of what i was presenting. . .

Good luck
good move

[dewilson58]

Make a prediction......................you will find "professionals" agreeing with it and disagreeing with it.

:mornincoffee:

[huge-pigeons]

1 of the big contributors to the 2007/2008 crash was the over leverage of loans. People who couldn’t afford a home loan was given a loan and investors packaged up these bad loans into packages that they sold all over the world. I know people that had 5 homes being built for them in 2007 because they were going to flip them when finished. When people couldn’t repay their loans because of layoffs or cutbacks from employers and homes started sitting and not selling, people lost all of their down payments and all those investments of junk loans were worthless, financial institutions lost money.
When they loosened up the requirements for home loans and financial institutions knew certain people would have a hard time repaying the loan even if something minor would happen, we were doomed. If you can’t afford a home, you shouldn’t be able to buy 1

[RICH1]

Us Business Insider says, The US housing market does not have enough homes to meet current demand — and is short by 3.8 million, according to a new report from mortgage giant Freddie Mac. The supply crunch increased 52% between 2018 and the end of 2020, helping to drive up the price of homes in the US, according to the report, which was released Thursday……

[Worldseries27]

All you need to know, or as the fonz says
" ayyyyyyyy"

[sowtime444]

* The US is still short homes vs the household formation growth



Almost half a million MORE housing units have been completed (all types) than household formations between 2003 and 2021.

Population, Total for United States (POPTOTUSA647NWDB) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/POPTOTUSA647NWDB) Population USA

Household Estimates (TTLHHM156N) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/TTLHHM156N) Households Created

New Privately-Owned Housing Units Completed: Total Units (COMPUTSA) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/COMPUTSA) Housing Units Completed

[Normal]

You can be academic and give me every reason under the sun for your analysis, but what is, is what is. Home prices have dipped 12% in The Villages and there are more on the market than at the beginning of the year, that isn’t a prediction. What will happen next? That would be a prediction. Pragmatism is accurate while everything else is just smoke and mirrors.

If the Fed raises rates, if more homes start to sell at a lower mean per square foot, then the slump may be here for a while.

[manaboutown]

Home prices drop for sixth-straight month in December to round out 2022 (https://finance.yahoo.com/news/home-prices-drop-for-sixth-straight-month-in-december-to-round-out-2022-144619172.html)

[mrf0151]

The housing market crash of 2008 hurt south florida by as high as 50%. Our area The Villages only went down 10-15%. Our market is very unique so stop the worry.

[Black Beauty]

everything is eventual..

[MandoMan]

There are plenty of signs of a severe downturn in US property, with home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade.

If the property market crashes, it will tip the economy into recession.

If there are losses on mortgages, it will threaten the stability of the financial markets and will determine what the Federal Reserve will do with interest rates.

In 2008, the collapse of the subprime mortgage market triggered a global financial crisis.

I would say that used home sale prices in The Villages are down at least 10% since last summer, but at that point they were UP about 20% over the previous two years. Many would say that the prices now are more where they should be, but people selling their houses are getting less than they’d hoped for. Most of this is due to the need to raise interest rates. Two years ago you could buy houses for 3.5% interest, which is amazing and unusual. Now it’s more like 6%, which is much closer to the historical norm. However, that increased rate has cut down what people can afford or lenders will lend.

Subprime mortgages happened from greed—by lenders and buyers. Lenders loaned buyers far more money than they could afford to repay, and with less money down. That isn’t happening now. Buyers thought they were going to make killings buying and selling houses and accepted stupid risks like balloon payments they couldn’t pay without selling their houses for whatever they could get. I don’t think that is happening now, either. So I think we will be okay.

[melpetezrinski]

You can be academic and give me every reason under the sun for your analysis, but what is, is what is. Home prices have dipped 12% in The Villages and there are more on the market than at the beginning of the year, that isn’t a prediction. What will happen next? That would be a prediction. Pragmatism is accurate while everything else is just smoke and mirrors.

If the Fed raises rates, if more homes start to sell at a lower mean per square foot, then the slump may be here for a while.

I'll give you the "more on the market" but how did you come up with the 12% decline in price? I believe it to be more like 5-6%.

[jimjamuser]

There will not be another 2008 like housing crash until there is another housing glut and renting makes more financial sense than owning a home.

Home prices can and probably will decline due to a broader economic downturn caused by the Federal Governments fiscal irresponsibility in running up tens of trillions in debt.
The Federal Gov. is trying to prevent a downturn - they are NOT causing one!

[JMintzer]

The Federal Gov. is trying to prevent a downturn - they are NOT causing one!

Well, they're failing miserably!

[Normal]

I'll give you the "more on the market" but how did you come up with the 12% decline in price? I believe it to be more like 5-6%.

I’m not an expert and Citrus Grove may be different than say a community north of 466, but I am going off what a few sellers initially asked for their homes and what they had to settle for when they sold.

[Pairadocs]

There are plenty of signs of a severe downturn in US property, with home sales down for 12 straight months in a row, the weakest set of numbers for more than a decade.

If the property market crashes, it will tip the economy into recession.

If there are losses on mortgages, it will threaten the stability of the financial markets and will determine what the Federal Reserve will do with interest rates.

In 2008, the collapse of the subprime mortgage market triggered a global financial crisis.

You're correct, everyday more financial analysts and economists are going over to the "dark side" (recession). Not looking good, many looking for financial "shelter"; however, noticed gold is NOT shooting up in an explosive manner ! ? In MHO, Yellen is certainly NOT helping the situation ! In a broader sense, I am more concerned about the loss of faith in so many established entities AT ONCE; loss of faith in CDC, lack of faith in our ability to protect our own borders, lack of faith in our medical community's medicines and treatments, lack of faith in law enforcement, in the goal of our military, in the FBI, and most recently now NTSA, in the governments ability to determine the safety of water, food, air ( meat inspections in packing plants, minors used as labor, etc.). Not that such things have come up in the past, what concerns me is the "collective" loss of faith AT ONCE in so many established institutions.. you can even add another to that, our system of public schools. Loss of faith is (probably) the most important factor in the deterioration of a society... (China, opium wars, North Korea, Rome, Viet Nam, Cuba, etc. all these seemingly unrelated collapses... take a DEEP dive and they can all be traced to a lack of faith in those institutions holding the society together !

[Pairadocs]

Well, they're failing miserably!

They sure are, and when the masses lose faith in their institutions (as I have comment before), it is NOT GOOD. PERCEPTION is everything in how secure a society "feels".

[JMintzer]

I’m not an expert and Citrus Grove may be different than say a community north of 466, but I am going off what a few sellers initially asked for their homes and what they had to settle for when they sold.

Comparing asking prices is meaningless. Comparing SELLING prices is what matters...

[Stu from NYC]

The Federal Gov. is trying to prevent a downturn - they are NOT causing one!

Given the way they have been mismanaging the economy would not expect anyone to think that, even you.

[jimjamuser]

The housing market crash of 2008 hurt south florida by as high as 50%. Our area The Villages only went down 10-15%. Our market is very unique so stop the worry.
By 2009 OUR area was down around 40%. And stock price drop was a catastrophe nationwide.

[jimjamuser]

everything is eventual..
That's deep and HEAVY.

[jimjamuser]

I would say that used home sale prices in The Villages are down at least 10% since last summer, but at that point they were UP about 20% over the previous two years. Many would say that the prices now are more where they should be, but people selling their houses are getting less than they’d hoped for. Most of this is due to the need to raise interest rates. Two years ago you could buy houses for 3.5% interest, which is amazing and unusual. Now it’s more like 6%, which is much closer to the historical norm. However, that increased rate has cut down what people can afford or lenders will lend.

Subprime mortgages happened from greed—by lenders and buyers. Lenders loaned buyers far more money than they could afford to repay, and with less money down. That isn’t happening now. Buyers thought they were going to make killings buying and selling houses and accepted stupid risks like balloon payments they couldn’t pay without selling their houses for whatever they could get. I don’t think that is happening now, either. So I think we will be okay.
Homes are just a PART of the total US economy. The US economy is just PART of the WORLD economy. So we and the world could still have a downturn to a recession or a deep recession. The war in the Ukraine is a BIG factor in the FUTURE world economy. All those factors are integrated together.
........The world price of oil and gasoline is a BIG factor in the world economy and people in TV Bubble Land could help things by buying E-vehicles and E-golf carts, which would bring the price of gas DOWN ! Which IS like a stimulus to the economy.

[jimjamuser]

You're correct, everyday more financial analysts and economists are going over to the "dark side" (recession). Not looking good, many looking for financial "shelter"; however, noticed gold is NOT shooting up in an explosive manner ! ? In MHO, Yellen is certainly NOT helping the situation ! In a broader sense, I am more concerned about the loss of faith in so many established entities AT ONCE; loss of faith in CDC, lack of faith in our ability to protect our own borders, lack of faith in our medical community's medicines and treatments, lack of faith in law enforcement, in the goal of our military, in the FBI, and most recently now NTSA, in the governments ability to determine the safety of water, food, air ( meat inspections in packing plants, minors used as labor, etc.). Not that such things have come up in the past, what concerns me is the "collective" loss of faith AT ONCE in so many established institutions.. you can even add another to that, our system of public schools. Loss of faith is (probably) the most important factor in the deterioration of a society... (China, opium wars, North Korea, Rome, Viet Nam, Cuba, etc. all these seemingly unrelated collapses... take a DEEP dive and they can all be traced to a lack of faith in those institutions holding the society together !
Public schools are being systematically torn apart. America had a good public school system in the 1950s and 60s. Notice that is WHEN America had a REAL middle class. You can't have a STRONG America without a STRONG middle class. And you can't have a STRONG middle class without a STRONG Public School System and a tax system to support Public School excellence !

[Stu from NYC]

Public schools are being systematically torn apart. America had a good public school system in the 1950s and 60s. Notice that is WHEN America had a REAL middle class. You can't have a STRONG America without a STRONG middle class. And you can't have a STRONG middle class without a STRONG Public School System and a tax system to support Public School excellence !

We are from NYC and back than had a pretty good school system.

As time went on they had more and more administrators and allowed the teachers union to become all powerful and eventually cared mostly about salaries of the teachers and would not let incompetent teachers be let go.

In NY they have a building where teachers who for various reasons are not trusted to go near students go and read newspapers all day while earning their normal salary. That money would be better utilized paying teachers.

[kkingston57]

There will not be another 2008 like housing crash until there is another housing glut and renting makes more financial sense than owning a home.

Home prices can and probably will decline due to a broader economic downturn caused by the Federal Governments fiscal irresponsibility in running up tens of trillions in debt.

Bet that most of the downturn is from rising interest rates and that nasty word inflation. At least now buyers can get a better price on a house and when mortgage rates go down they can re finance. At least they are not looking at 12% interest.

[JMintzer]

By 2009 OUR area was down around 40%. And stock price drop was a catastrophe nationwide.

Why didn't the government do anything to stop it?

[JMintzer]

Homes are just a PART of the total US economy. The US economy is just PART of the WORLD economy. So we and the world could still have a downturn to a recession or a deep recession. The war in the Ukraine is a BIG factor in the FUTURE world economy. All those factors are integrated together.
........The world price of oil and gasoline is a BIG factor in the world economy and people in TV Bubble Land could help things by buying E-vehicles and E-golf carts, which would bring the price of gas DOWN ! Which IS like a stimulus to the economy.

But would it save the coral reefs?

Quick question (which you have failed to answer, multiple times)...

Do YOU drive an EV, or have an E-Golf Cart? A simple yes/no will suffice...

[JMintzer]

We are from NYC and back than had a pretty good school system.

As time went on they had more and more administrators and allowed the teachers union to become all powerful and eventually cared mostly about salaries of the teachers and would not let incompetent teachers be let go.

In NY they have a building where teachers who for various reasons are not trusted to go near students go and read newspapers all day while earning their normal salary. That money would be better utilized paying teachers.

The "rubber room"?

Is the guy who took over a table, with multiple computers, to run his real estate business still there?

And to your point, there is plenty of tax money available for schools.The admins simply squander that money...

[JMintzer]

Public schools are being systematically torn apart. America had a good public school system in the 1950s and 60s. Notice that is WHEN America had a REAL middle class. You can't have a STRONG America without a STRONG middle class. And you can't have a STRONG middle class without a STRONG Public School System and a tax system to support Public School excellence !

We have students, with zero home supervision, beating other students and teachers...

But yeah, let's throw more money at the problem...

[Stu from NYC]

The "rubber room"?

Is the guy who took over a table, with multiple computers, to run his real estate business still there?

And to your point, there is plenty of tax money available for schools.The admins simply squander that money...

I seem to remember that it is called the rubber room.

Administrators do waste a huge portion of the school tax money. I seem to recall somewhere along the line they went to community school districts which managed to employ a huge number of administrators adding nothing to education.

Worked out very well for our kids that we were relocated to Va which had a much better school system.

[jimjamuser]

Given the way they have been mismanaging the economy would not expect anyone to think that, even you.
"Even me", like I am a ghoul with 2 heads. Ok be that way!

[Djean1981]

Nah.. It may be a down turn, but not a crash - especially, for the states on the receiving end of the migration from some states.

[mrf0151]

I have had a home here for 20 years and keep a close eye on the housing market. Your facts for The Villages are wrong. Doom and Gloomers are scaring you perhaps. To date according to Redfin, The TV home value same month 2022-2023 is only down .85%.

[ElDiabloJoe]

The fact of the matter is this, IMHO: Even if you bought a wildly inflated home in Southern California (or most anywhere - but they have fairly consistent longterm value increases) at the very peak of the 2007/8/9 market, that house would be a bargain if you bought it today at that price.

I suspect that is the case in the majority of localized areas throughout the nation.

[Bay Kid]

I have had a home here for 20 years and keep a close eye on the housing market. Your facts for The Villages are wrong. Doom and Gloomers are scaring you perhaps. To date according to Redfin, The TV home value same month 2022-2023 is only down .85%.

Location is still of great importance. Some places the values are coming down. Cities with high crime, high taxes, etc.

We are The Villages like nowhere else in the world!

[Normal]

Public schools are being systematically torn apart. America had a good public school system in the 1950s and 60s. Notice that is WHEN America had a REAL middle class. You can't have a STRONG America without a STRONG middle class. And you can't have a STRONG middle class without a STRONG Public School System and a tax system to support Public School excellence !

School systems differ from state to state and city to city. Some states don’t even use taxes to fund schools. Look at Nevada; it uses casino income for schools and is basically in no need of any federal dollars. However, your poor attempt at conflation for political bias is noted.

[CoachKandSportsguy]

Almost half a million MORE housing units have been completed (all types) than household formations between 2003 and 2021.

Population, Total for United States (POPTOTUSA647NWDB) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/POPTOTUSA647NWDB) Population USA

Household Estimates (TTLHHM156N) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/TTLHHM156N) Households Created

New Privately-Owned Housing Units Completed: Total Units (COMPUTSA) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/COMPUTSA) Housing Units Completed

Well, you can't argue with the data so I must say "well done and better than bloomberg analysis!"

[manaboutown]

U.S. home prices to fall 4.5% in 2023 despite higher rates: Reuters poll (https://finance.yahoo.com/news/u-home-prices-fall-4-120958524.html)

US home prices could plunge 20% amid risk of 'deep' housing slide, Fed economist warns (https://finance.yahoo.com/news/us-home-prices-could-plunge-162640038.html)