Property market crash?
 

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.

Duh
 

Ain’t be got nuttin do do with declining inventories from all the ny/cali escapees?

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.

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.

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

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

All property markets are local. Period

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.

Always best during the first half of the calendar year.

As the market 🌎 turns
 

good move

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

:mornincoffee:

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

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……

Fyi
 

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

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 Population USA

Household Estimates (TTLHHM156N) | FRED | St. Louis Fed Households Created

New Privately-Owned Housing Units Completed: Total Units (COMPUTSA) | FRED | St. Louis Fed Housing Units Completed

Predictions Versus Fact
 

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.

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.

everything is eventual..

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.

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%.

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

Well, they're failing miserably!

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.

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 !

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".

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

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

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

That's deep and HEAVY.

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.

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.

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.

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

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...

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...

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

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

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.