New Home prices down 20% from peak. Falling faster than 2008

[Destor]

I agree that things look like a soft landing at this point. But that just means instead of a quick crash and renewed growth, it's a prolonged period of below average growth.

This can be settled in 5 years or 10. At this point, it looks like it will be settled in 10.

Even when the Fed Funds rate does come down, I bet it'll settle at like 3%+ -- it was already 2.5% before COVID hit and all the money printing etc happened, without mentioning what's happening geopolitically that will likely drive inflation or stuff like government spending.

And the Fed Funds rate coming down also doesn't mean treasury yields will come down concurrently

[friesbruh]

> still $400k
> "collapse"

pick one.

[frankdtank20]

Ha! You drew it wrong. There's still a loooooooooong way left to go.

https://ibb.co/db59j0J

Right now, they're in a mess and they know it. Either housing values can tank and tons of people are under water. Or they can hold the markets down for another 10 years until the markets actually catch up to where they should be.

Right now, they're trying the "catch up" approach, but that isn't going to last.

The next 12-18 months are questionable, but obviously in the longer term prices will revert back towards normal. They always do. A housing bust hasn't happened already because mortgage rates were around 3-4% for over a decade. It wasn't just the Covid period. So a ton of us are happy to stick where we are.

[frankdtank20]

House prices actually crashing is something that would likely trigger the Fed to tap into the 5% of interest rate easing they have in their back pockets

These days I buy much more into the idea of a soft landing tbh, this isn't 2008

Yeah, absent a hard recession I don't see a crash in housing happening. In the longer term more than likely a slow crawl downward. Down 2% or so for years in a row. And unlikely to start in 2024. So many factors at play outside of supply and demand.

[OliverHeldens]

Yeah, absent a hard recession I don't see a crash in housing happening. In the longer term more than likely a slow crawl downward. Down 2% or so for years in a row. And unlikely to start in 2024. So many factors at play outside of supply and demand.

It will be more than 2% per year, but I agree with your general trend. It's really no different than 2006-2015, where people who bought in 2006 often had to wait about 9 years until their values came up to par. This is pretty much that same thing, but in the opposite direction.

[JT11RTR]

I hope it does go down. My property taxes have become outrageous over the last few years

[OliverHeldens]

I hope it does go down. My property taxes have become outrageous over the last few years

Yeah, taxes have become absurd during the last couple years. Along with high interest rates, it really has a significant impact on the valuation of properties(especially Income properties).

I've been valuing quite a few lately, and there are people who believe their properties are worth 4M, when in reality they're worth about $3M in the current environment.

[kusok]

I asked this in another thread by OP: why does he make this thread?

[OliverHeldens]

I asked this in another thread by OP: why does he make this thread?

The faster that people stop overpaying for houses, the sooner this mess ends.

[OffwhiteBrah]

I asked this in another thread by OP: why does he make this thread?

Cause he doesn't have a clue how economics works. He thinks an economic crash would benefit him.

[kusok]

The faster that people stop overpaying for houses, the sooner this mess ends.

??? What does this even mean? People buy a house if they need to live somewhere and if they decided that for them it’s better than rent. I’m still waiting for the punchline. What mess? What will happen? How will my life change with home price going up or down?

[OliverHeldens]

??? What does this even mean? People buy a house if they need to live somewhere and if they decided that for them it’s better than rent. I’m still waiting for the punchline. What mess? What will happen? How will my life change with home price going up or down?

Markets need to correct, and they clearly are in this process. There's a long way to go.

[chalup]

Look at the chart. It's happening in real time.

The housing market will never "Crash" again in foreseeable future.. There is too much demand.

[chalup]

The faster that people stop overpaying for houses, the sooner this mess ends.

How do people stop overpaying in markets with extremely thin supply?

[WoofieNugget]

The faster that people stop overpaying for houses, the sooner this mess ends.

Then there need to be consequences for overpaying for houses. Some people are starting to realize those, especially come mortgage renewal time in Canada or if they have unforeseen expenses. Investors should be taxed higher for every residence they have in a tiered way, so like 10% for the first, 20% for second, etc. Temporary rentals like Air BnB needs to be gone (this is already happening in a lot of places). Then you have cultural vultures that will give high interest mortgages to immigrant families who will pack fifteen people into a four bedroom house without any issue just to be able to get into the market.

Part of the main problem with real estate is that value is all subjective, and it comes down to if one idiot pays 200k more for a house in an area, then suddenly all the other houses are perceived to be worth that much even though two months ago they weren't. Things are worth what people are willing to pay, and all it takes is a couple of people to completely skew the system.

[OliverHeldens]

Then there need to be consequences for overpaying for houses. Some people are starting to realize those, especially come mortgage renewal time in Canada or if they have unforeseen expenses. Investors should be taxed higher for every residence they have in a tiered way, so like 10% for the first, 20% for second, etc. Temporary rentals like Air BnB needs to be gone (this is already happening in a lot of places). Then you have cultural vultures that will give high interest mortgages to immigrant families who will pack fifteen people into a four bedroom house without any issue just to be able to get into the market.

Part of the main problem with real estate is that value is all subjective, and it comes down to if one idiot pays 200k more for a house in an area, then suddenly all the other houses are perceived to be worth that much even though two months ago they weren't. Things are worth what people are willing to pay, and all it takes is a couple of people to completely skew the system.

At this point, the housing market is hanging on by a thread. It might not actually crash, but there are still people who bought in 2021 who will be underwater for a decade.

[kusok]

Markets need to correct, and they clearly are in this process. There's a long way to go.

So??