But all of those things contribute to inflation of home values. Not sure if I’m just agreeing with your point or not, but a reduction in buyers doesn’t mean nobody is trying to buy right now, but if conditions are such that sellers aren’t incentivized to make moves, those who are can charge a premium when they do.
It’s bullshit, not because it’s factually incorrect, but because it’s a completely made-up scarcity given how much vacant property exists in the US and worldwide. In the US, we’ve regulated property development to protect existing homeowners and limit high occupancy housing to “less desirable” neighborhoods. Until those areas become desirable - at which point we evict all the low income families, turn entire floors of apartments into single condos, and charge millions of dollars for them.
Further, evidence that the inflation rates are indeed slowing as the Fed makes borrowing more expensive signals real estate investors to just weather the storm, because the return of rock bottom rates is, in the scheme of things, just around the corner.
I don’t think we’ll ever see coastal real estate markets truly bottom out or even meaningfully correct without a complete economic collapse of the US, which would really be a complete global economic collapse.
But all of those things contribute to inflation of home values.
#1 is bullshit, because prices change near instantly upon expectations. Any information that’s publicly known immediately comes up to debate / discussion. That is, if any “agreement” has been made on higher prices, its already factored into the price.
#2: Higher Mortgages have always caused home values to fall in the past. In practice, the US consumer is monthly $$ bound: they buy what they can afford. US Buyers don’t think “$500,000 house”. Everyone converts that into $2700/month (current 7.3% rates), or $1700/month (3% rates).
A $1700/month house at 7.3% is a $250,000 house, literally half the cost of a $500k house at 3%. That means everyone who “can afford a $1700 house” has now been priced into $250k in today’s market, instead of $500k homes like 3 or 4 years ago.
But all of those things contribute to inflation of home values. Not sure if I’m just agreeing with your point or not, but a reduction in buyers doesn’t mean nobody is trying to buy right now, but if conditions are such that sellers aren’t incentivized to make moves, those who are can charge a premium when they do.
It’s bullshit, not because it’s factually incorrect, but because it’s a completely made-up scarcity given how much vacant property exists in the US and worldwide. In the US, we’ve regulated property development to protect existing homeowners and limit high occupancy housing to “less desirable” neighborhoods. Until those areas become desirable - at which point we evict all the low income families, turn entire floors of apartments into single condos, and charge millions of dollars for them.
Further, evidence that the inflation rates are indeed slowing as the Fed makes borrowing more expensive signals real estate investors to just weather the storm, because the return of rock bottom rates is, in the scheme of things, just around the corner.
I don’t think we’ll ever see coastal real estate markets truly bottom out or even meaningfully correct without a complete economic collapse of the US, which would really be a complete global economic collapse.
#1 is bullshit, because prices change near instantly upon expectations. Any information that’s publicly known immediately comes up to debate / discussion. That is, if any “agreement” has been made on higher prices, its already factored into the price.
#2: Higher Mortgages have always caused home values to fall in the past. In practice, the US consumer is monthly $$ bound: they buy what they can afford. US Buyers don’t think “$500,000 house”. Everyone converts that into $2700/month (current 7.3% rates), or $1700/month (3% rates).
A $1700/month house at 7.3% is a $250,000 house, literally half the cost of a $500k house at 3%. That means everyone who “can afford a $1700 house” has now been priced into $250k in today’s market, instead of $500k homes like 3 or 4 years ago.
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