Hazard a guess on what the future holds for house prices?
 

It has been an amazing run! When will it stop? Then what?

Anyone care to opine?

US home price growth reaches new high for fourth consecutive month

They will continue to go up until they go down.

And think down in the next few months.

I'm afraid with this inflation we are going to see the price of NOTHING including housing retreat/stabilize and those of us old enough to remember might think the inflation of the Carter administration and16% home loan rates and rationed gasoline issues of old were a walk in the park. :(

house prices
 

It seems to me that house prices and the stock market are intertwined, and more recently supply line shortages of labor and materials. Any one of these can start a cascade in the others. Right now they are all strong. Which will be the first to break ? There are a lot of people involved in and promoting the stock market, so it will probably keep clicking along until some thing unforeseen happens. Then there are housing prices. Just when I think they can't go any higher, they do. Usually competition in the building market keep prices from escalating, but due to all builders competing to find labor and materials, supply line shortages have added to the cost of doing business, so this inflates the cost of a new home. So I think the prices will continue to increase slowly for at least another 11 to 12 Months.

Materials are currently sometimes difficult to find and mostly priced higher than they were a brief time ago. Builders must comply with tighter building codes and environmental impact issues both of which add to costs. The supply-demand situation means the market is tight. Higher interest rates are on the horizon which may add downward pressure as folks can only pay so much a month. It is a conundrum.

Continuing price increases until the mid term Congress and Senate are seated. The future will be known until 2024 then. Wall Street hates uncertainty, as already pointed out the stock market is intertwined to some degree with home prices.

It’s all about affordability. With home mortgage interest rates at record lows, more people can afford to buy (and bigger and more expensive).

IF interest rates take off to 6 or 8% there will be many priced out of the mortgage market because they can’t meet the monthly mortgage payment for the home they want to purchase.

I have mixed feelings on the future of interest rates. But a return to normal rates would have a negative impact on demand.

Those lucky snow birds.
When their ready to sell, they'll make thousands on the sale of their second house.

Buy a pup tent & ammo...

Car prices are starting to decline I'm thinking houses not far behind.

Again a lot of chatter about a pending housing crash be careful of those fully vested in keeping home prices high realtors Zillow and realtor.com I believe we are in for a moderate correction. When gas hits $5 we will really be in trouble

Good comment, many principles have an interest in keeping the prices high: Realtors, sellers, appraisers, loan companies, just to name a few it's a stacked deck long term.

Regarding future prognosis: less QE will move rates up. Supply will increase. The developer will adjust build rate down to keep the buyers in a demand mode.
Resales available will increase. Mid priced homes will continue to price increase. Panic buying of mid priced resale will moderate. High end stuff will have a slower price increase. Buyers who bought the high dollar homes to rent and are highly leveraged will need to liquidate as they will not be able to feed the negative cash flow and will not see appreciation off-setting the negative cash flow.

Another housing crash is ahead IMO

Everything is in line with people buying homes they can't afford because of low mortgage rates, Salaries have not increased, Home valuations are at silly levels - here in the villages we have regular homes selling for $700's $800's or more - Villas at crazy numbers. We could not buy our own house at this point........

I've been doing a lot of research and noticed housing prices are starting to drop in a handful of locations and most houses are on the market for longer than they have been the last year or so. I ran across this guy who has a pretty good series of videos. I found this one to be particularly interesting as I had read about Zillow entering the buying market, but had no idea to the extent. Its worth a watch- PROFIT from 2021 Housing Crash! (Here's How) - YouTube

It's not a matter of if but when.....

The house for sale on our street has had a $40k reduction recently.

It also was Carter not Reagan who battled for two years to pass legislation that gradually expanded competition in natural gas, oil, and electricity. U.S. inflation was fueled by rising energy prices between 1972 and 1979 linked to OPEC and instability in the Middle East.

Funny money is what has been created in 7 short months. Everything will continue to go up except retirement income. Good time to buy TIPS.

What goes up, must come down.... We've been through this before....

I couldn’t agree with you more !

Can’t wait for 10% CD’s

Interest rate is slated to rise 6 times over the next 2 years according to the Federal Reserve last Wednesday. That will slow things a little. As prices go up families will not be able to finance enough to buy the homes of older people who want to sell family homes and by retirement homes.

Bubble
 

Can you say bubble?

I’d say more of a boom than bubble. Supply supply supply, or should I say, lack thereof. Our country is like 5 million houses short, of the demand.

This housing market (Whoops, I just caught a typo back there --I had typed 'hosing' market. . .Is there such a thing as a Freudian typo?) -- anyway, this housing market has an emotional component like none we have ever seen before.

Last go-round was fraught with screwy lending practices -- banks and mortgage companies having been given license to run amok with drive-by appraisals and stated-assets loans, mortgage rates at a low never seen before -- and then came the derivatives.

This time, those lending practices allegedly have been tightened, supposedly making mortgage qualification harder. This national housing market has been fast and crazy. It is creating what I believe to be an artificial sense of wealth in home equity. Can banks, and homeowners, resist HELOCs based on what I call phantom equity?

I just did a search of my own past posts. Since 2018-ish, I have thrown in an occasional mini-rant about about how I think the fact that corporations were/are spending a big bunch of that corporate tax-break money on stock buybacks is going to bite us in the azz. Stock buybacks have been creating an artificiality in the stock market -- resulting again in the psychology of phantom wealth. The old bull is tired, had been running for more than a decade -- on its own -- until the corporate tax breaks gave it more momentum than it deserved -- looks to me like it has been an old bull on steroids for a while.

Economic history tells us that the stock market and the housing market ride in tandem. We can only hope that what is coming will just be a deep breath. I personally think we need that -- just that -- but we have been living in Crazytown for years -- so who knows where we are headed.

Boomer

PS: The teetering can be felt right now. We are going to see -- already are seeing -- a scapegoating of the present. I wish more people would look at the big picture. But (sigh) a lot of people will think what they allow themselves to be told to think.

Think 2008. The market corrects, and seeks fiscal homeostasis with a vengeance.

5 million need homes
 

I would like to know where these 5 million people are now?

And Robert J. Shiller weighs in.

Home prices 'will see big declines in coming years,' expert predicts

Thank you for sharing the link. I learned a lot from viewing the informative video. I like data driven discussions. Not only did he provide good insight regarding the market, but let us know how he came to the conclusion, so I can do likewise in the future.

Also, I learned how to filter Zillow for 'Zillow Owned' properties, that INVH is the largest real estate owner in the US, and how PUT options work.

Thinking of dismissing my current financial advisor, and start managing my equities on my own, starting with some PUT contracts for ZG and INVH. When they strike, I can use the profits to buy properties at reduced prices.

Can't wait for any appealing CD rate. I'd go 10 years for 6%.

Here and there.

Most likely renting

Speaking from my own experience buying in the Villages in the spring, rapidly increasing home prices were driven by a socio-political panic situation. I wish I had bought earlier as home prices would have been lower with more availability in my price range.

Vegas Baby...
 

Buying Puts.... No.

Take a nice trip to Vegas and have more fun doing the same thing. Gambling with your $.

Carl

Although I disagree with a lot of your post, I am only going to point out one thing- this statement is just patently false. In the 70s, the stock market went NOWHERE for 10 years and housing prices skyrocketed ( My Dad sure loved that, since all his money was in his house) due to inflation.
Then in the crash of 2008, they both went down together. They zig an zag a lot independently of each other.

The only way they are tied together at all is through interest rates, which affect both markets.

Interesting question and nobody knows. A few notes.
1. I have "skin in the game" as I have a house in Fernandina that is strickly a rental in addition to my retirement home. I get calls weekly from Realtors, and the numbers are quite attractive. The fact I am not selling is partially due to what I will state below, but partially because I don't need the money right now, and will in 5 years. Plan on living in it for 2 years before I sell it. I hate taxes.

2. This runup in prices was caused by low interest rates, high demand, and low supply. Basic econ 101. It is NOT a villages phenomenon but is going on everywhere.
3. The Villages issue is compounded by the fact 10,000 baby boomers a day are retiring, but offset by the fact the developer builds a LOT of houses.
4. Low interest rates will rise, slowing buying, but not so much in the villages, since over half the houses are cash transactions.
5. High Demand will not change - Millenials are forming families at a VERY high rate, and in TV, retirements will continue strong for the next 12-15 years or so.
6. Low Supply may change in TV if the developer ramps up, but with low availability of people this may not change much. In the rest of the country, builders are VERY wary of building. They are still at below 70% of pre 2008 levels. They also can't find workers. My opinion is the build rate won't go up much.

Throw in the fact that lenders are NOT making anywhere near the bad loans they made in the housing crisis.

So my prediction is as follows - prices will level off to more normal increases. I predict 5-7% a year in The Villages, 2-3% everywhere else. There will be no crash. Those prognosticating that are basing it on a once in a lifetime crash in 2008. We might see a one year lull in prices where there is no inflation in TV in maybe 2023. Thats the most that will happen. I am keeping that extra house because it rents really well(because many rental owners have sold), and if it goes up even 2-3%, it beats cash and bonds......
TV real estate is also a good diversifier from Stocks and Bonds.
You asked, there it is.

Bear fan to Packer fan
 

Nice post…:ho: A Bear Fan :bigbow:

Good post! I came here from California, where housing swings can be heart stopping. It is usually all about timing and not letting yourself get into a spot where you are forced to sell.
For work, I used to drive from Sacramento to Phoenix from time to time and on one drive, after the 2008 crash, drove through what looked like a wierd Nevada ghost town. Unpaved streets lined with brand new, 3-4,000 sq ft homes. All empty, many with the windows broken out. 5 years later I made the same detour and all those homes had been torn down and signs were up advertising a new housing development - crazy!
One thing I've noticed here in central Fl. The run-up seems to have been much faster and higher in TV than in the surrounding area. We now see designer homes pushing up past 1 million! TV may slow down a bit to let the other areas catch up, but I doubt it will stop or go down

Good question and I’m glad you used the word “guess” because that is all ANYONE has. I am a former realtor and have a chartered financial consultant degree with thirty five years of financial services experience and, having said that, I have no idea how to answer your question. What I do know is I cannot today buy a home in TV, or pretty much anywhere else, at 2012 prices or even 2020 prices. I also cannot knowingly, today, buy a home at 2022, (23, 24 and on and on) prices. House prices tend to rise over time, though sometimes with temporary fallbacks. When I first began pricing houses in TV in 2009, I could have bought a lot of homes for a third the price they might sell for today. Of course there are hundreds of securities I could have purchased then that would be worth three times as much and more with a lot lower cost of ownership. Another thing I know is I am a leading baby boomer at 75, meaning the median boomer is 65 and the youngest is 55. That means there are still many millions of current and future retirees that are in the target market for The Villages. As more and more people move to TV it means more and more people who call, write, or go home and tell their friends, family, and ex coworkers how wonderful The Villages is (it seems the majority of people I meet who are relatively new residents say they came because a friend or family member invited them down and they fell in love). All that means nothing except to say, all we can deal with is today - no one knows or is guaranteed tomorrow so house prices are exactly what they are right now!

It sounds like you are from my neck of the woods :coolsmiley: I sold my home located in a suburb of Sacramento in the fall of 2020. I made some profit on it but had I waited six months I really could have cleaned up.

As for predictions that things will flatten out or continue with modest growth, it all depends on what happens on a federal level. Will the Fed raise interest rates, will there be tax increases in 2022, which might include figuring in your assets and investments?

I heard the government now wants basically all income and banking transactions to be monitored and reported to the IRS. Not just the usual $10,000 plus transaction, the threshold will be lowered and might include savings, IRAs, etc. so that might scare a lot of people. They gotta pay for those multi-trillion dollar spending sprees somehow!

gas will be 6.50 a gallon, milk 7.00 a gal, inflation @ 20%, tax rates at never before seen rate, housing will tank.. 6 months maybe 8, stock market crash and will take housing with it.. Remember 2008?? It will seem like a great time compared to what will happen now.

I am very concerned about both the stock market and housing bubbles created by prolonged artificially low interest rates and other irresponsible actions taken by the Federal Reserve. I am also very concerned about both our country and it’s residents seemingly incurable addiction to unsustainable debt. Unfortunately, fiscal discipline seems to be a thing of the past and something the younger generations have never known. The unfortunate result of this will be high inflation, a substantially weaker dollar, and significant asset bubble corrections.

That being said, the predictions in the above quoted post are extremely pessimistic, especially in the stated time frame. Buckle up!