What's your prediction for the housing market?

SeniorBen said:
What's your prediction for the housing market?
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It'll be a typical cycle of supply and demand, for the near future prices will climb, the 'bubble' will burst and prices will come down.

I do pretty well at Blackjack and Poker, but like real estate they've not been top earners in my portfolio.
 

This is from our local paper today:

Is now the hardest time to buy a Bay Area home?
Real estate analysts recently saw the fastest rise in U.S. home prices over any 12-month period in 45 years
Bay Area News Group: March 20, 2022 (edited for length)

Rising home prices. Growing demand from first-time buyers. A near-record-low number of homes for sale. Bidding wars flying $1 million over asking prices. Is this the toughest time to buy a [San Francisco] Bay Area home?

Affordability has neared all-time lows, with home prices climbing far faster than incomes. Bay Area buyers without healthy cash reserves, big down payments and quick decision-making are getting left at the starting gate. In January, real estate analysts saw the fastest rise in U.S. home prices over any 12-month period in 45 years.

In the Bay Area, agents and economists say the decade-long rising market has grown increasingly frustrating for buyers. Data from the California Association of Realtors (CAR) paints a stark picture: The number of Bay Area single-family homes for sale in January dropped by 40% from the same month in 2020.

At the same time, the typical home in the nine-county region sold for nearly 6% over asking price – a higher premium than any January since CAR started tracking the data in 1995. Bay Area houses have typically sold for at or below list prices. The median price of a single-family home was $1.25 million at the end of last year.

And the premiums for single-family homes in the core counties have escalated to recent, record highs, according to the data. San Francisco homes sold, on average, more than 21% over list price in February, while Alameda County prices went 17% higher than list price, followed by Santa Clara (nearly 17%) and San Mateo (13%) and Contra Costa (6%) counties.

The typical home in Santa Clara and San Mateo counties in February sold in 7 days, the fastest time since CAR began tracking days on the market in 1995. Alameda and Contra Costa county homes sold in a near-record 8 days. “It definitely is the most competitive era we have seen,” said CAR economist Oscar Wei.

The stories from real estate agents around the region point to hard times for buyers. The influx of millennials looking for their first home, the fear of faster-rising mortgage rates and a push to convert volatile stock portfolios into property have super-charged demand. Many sellers have been reluctant to move and face their own daunting home search, pinching supply.
 
60 Minutes did a report on the housing situation, this evening. According to them, the U.S. needs at least 4 million housing units to stabilize the demand. New housing construction faded rapidly after the 2008 housing bubble, but the population has continued to increase in the past decade, so it's understandable why prices have gone so high.

The worst part of the nation appears to be in the Southern States....every State from Arizona to the Gulf coast and even the Eastern seaboard. Further North, the Chicago area has remained fairly stable, and Kansas City has even seen a slight decline in rental costs.

The high prices in California may start driving companies and people into more affordable areas. Tesla has already announced that it is moving its headquarters from CA to Texas....this may be the start of a growing trend.
 

I had to chuckle when I saw this in Fortune Magazine:
"Why does the Mortgage Bankers Association expect home price growth to slow down? It boils down to soaring mortgage rates. This year, the group forecasts that the 30-year fixed mortgage rate will average 4.5%—up from 3.1% in 2021. As of Thursday, we're already up to an average 30-year fixed mortgage rate of 4.42%, according to Freddie Mac."

Soaring mortgage rates??? If today's home buyers didn't live through the '80s, they ain't seen nothin' yet!

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Lee said:
Home prices in our area have increased a whopping 37% over this time last year and that was on top of an increase of 43% the year before.

Since we are on average lower than some of the bigger surrounding cities, we are becoming the go to choice for those looking to relocate from places such as the Toronto area.

Been thinking about selling but the question is "where do I go?" Apartments in decent buildings have a long wait list, on average $1600 an up. I am on a wait list for an apartment, signed just in case, but do not expect to be called anytime soon. But if it happens I will buy a summer trailer again and cozy it up for winter in an apartment.

https://blackburnnews.com/chatham/c...8/average-price-home-ck-tops-500k-first-time/
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Did you notice the announcement yesterday that the Liberals intend to introduce a two year ban on foreign buyers of residential housing in Canada ? That may have some effect, but it isn't the whole answer, in my opinion. JimB.
 
caroln said:
Sounds like a good start though. The U.S. could take a lesson.
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The current Liberal Federal Government is about to introduce new legislation in Parliament, to create a national mental health program, and a national dental health program. If this passes in the House, the programs would be rolled out in this coming September. The costs to fund these programs would be shared 50/50 by the Federal Government and the Provinces and Territories, equally. Canada tends to have national programs that effect all people, such as the national employment insurance plan, or the maternity leave program, both of which apply in all parts of our country. I think this proposed legislation will pass, with support from the ruling minority Liberal party, in conjunction with the New Democratic Party ( one of the three opposition parties in the House ). In Canada it is not unusual for the Governing party to forge an alliance with an opposition party to get enough votes to pass a specific bill. Our Federal Parliament has 340 seats. JimB.
 
IMO the government should stay out of it.

I don't see how we can consider this a free country if the government has the right to tell us how much we can sell our homes for or who is allowed to buy them.

The same with how much a landlord can charge for rent.

As far as I know, the landlord or the homeowner doesn't get to tell the government how much they can charge in property taxes. :unsure:
 
I see a bubble and that bubble is going to go BANG. Perhaps Bob Wills and his Texas Playboys had it right. I can just see all those high rollers who invested in the housing market at the wrong time, singing right along with Boy.

 
bingo said:
i think the whole economy is set for a crash
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Me too. There just isn't Any positive news in recent months. Prices are soaring on nearly everything...sporadic shortages continue...governments thinking they can solve every problem by "throwing money" at it, creating a huge National Debt....a stock market looking more like a roller coaster, etc., etc.
I'm starting to think, more and more, about buying Gold. When, not If, reality sets in....probably not too far into the future....we are headed for a scenario much like 1929.
 
caroln said:
I had to chuckle when I saw this in Fortune Magazine:
"Why does the Mortgage Bankers Association expect home price growth to slow down? It boils down to soaring mortgage rates. This year, the group forecasts that the 30-year fixed mortgage rate will average 4.5%—up from 3.1% in 2021. As of Thursday, we're already up to an average 30-year fixed mortgage rate of 4.42%, according to Freddie Mac."

Soaring mortgage rates??? If today's home buyers didn't live through the '80s, they ain't seen nothin' yet!

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You aren't kidding. The house I bought in San Diego in 1986 had a mortgage rate of only 12.8. :eek: and my neighbors wanted to know how I got such a low rate. :D Most of them were stuck with A.R.M. rates that eventually ended with them under water after the rate hikes. :(
 
squatting dog said:
You aren't kidding. The house I bought in San Diego in 1986 had a mortgage rate of only 12.8. :eek: and my neighbors wanted to know how I got such a low rate. :D Most of them were stuck with A.R.M. rates that eventually ended with them under water after the rate hikes. :(
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Our original loan was a punishing fixed rate of 13-7/8. Iand that was with a 20% down payment. I wouldn't wish high mortgage rates on anyone.
 
Once when I was getting a new house, I was shopping around for a mortgage and I was offered a fairly decent rate on an adjustable rate mortgage. I asked what the highest rate it could go to and was told 19.5%. I choked on that one for awhile. 😱 Then said, no thanks, I don't think so. Maybe a lot of people that took that deal just didn't believe it could ever get that high...until it almost did!
 
Don't think it will "bust", just really lose steam. The difference is like 20% of the housing builds are by big construction companies tied into venture cap REIT money and the build outs are for "rental" not sale. All around this area, there are subdivisions filled with brand new "rental" houses. Our ex biz partner and wife sold their big starter castle and are now living in one. They pay $2 grand a month on a two year lease.

Think when the rents get capped out and the repairs start needing to get furnished, they will be offered up for sale to take advantage of the equities payouts. Also the rising interest rates will naturally put a halt on home purchases, both new and used so its a different landscape than 2008. Much less individual speculation going on right now and a different set of circumstances, like now its minus "credit default swaps".

Like John Bogle said "nobody knows nothing" about the stock market...lol.
 
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