LMCane said:

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Funky Winkerbean said:

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If they raise the interest rates to cool inflation, I would think prices would begin to fall some. But they won't do that because it also increases the payment on our national debt. We have idiots in charge.

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my friend have you been under a rock the last year?

the Fed has raised interest rates more than 6 times so far

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And they should be higher.

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Foreclosures Are SpikingHow Bad of an Omen Is This for the 2023 Housing Market?

About 1 in every 4,000 homes had a foreclosure filing in May, according to a recent report from real estate data firm ATTOM. Foreclosure filings shot up 7% from April and were up 14% year over year.

Throughout the country, nearly 35,200 properties were under threat of foreclosure. ATTOM looked at data from more than 3,000 counties making up more than 99% of the country's population to come up with its findings. Foreclosure filings included default lis pendens (pending legal actions), auction, trustee sale, and foreclosure sale notices. Bank-owned properties were also included.

"A lot of people just can't afford the house they're in," says Paul Urich, a bankruptcy attorney who handles foreclosures in Orlando, FL. "Everything's become so expensive, and a lot of these folks are trapped in variable-rate mortgages so their payments keep going up and up. Then we have the issue with homeowners insurance where every time we get a storm, [the insurance companies] either cancel or raise the prices."

Adjustable (variable) rate mortgages can result in much higher monthly payments down the line if mortgage interest rates go up. Mortgage rates have more than doubled over the past two years, from below 3% just two years ago to nearly 7% today for 30-year fixed-rate loans, according to Freddie Mac data.

https://www.realtor.com/news/trends/foreclosures-are-spiking-how-bad-of-an-omen-is-this-for-the-2023-housing-market/

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[url=https://www.realtor.com/news/trends/foreclosures-are-spiking-how-bad-of-an-omen-is-this-for-the-2023-housing-market/][/url]

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Home foreclosures surged 7% in April with more than 35,000 Americans unable to make their payments: Homeowners in Florida, California and Texas were hit worst


Home foreclosures across the country were up 7 percent last month, and up 14 percent from a year ago as the cost of living continues to bite.

Foreclosure-related filings, including default notices scheduled auctions and bank repossessions, surged to 35,196 properties according to new data from ATTOM.
Florida had the most foreclosures in May with 2,901 home foreclosures started.

This was followed by California with 2,451 foreclosures started, and Texas, where 2,286 property confiscations were begun.




https://www.dailymail.co.uk/news/article-12179215/Home-foreclosures-surged-7-April-35-000-Americans-unable-make-payments.html

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look for a deal here OP. [url=https://www.foreclosure.com/][/url]

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https://www.foreclosure.com/
Site Listings

• Preforeclosures:
  208,603
• Short Sales:
  689
• Sheriff Sales:
  19,582
• Foreclosures:
  40,491
• Bankruptcies:
  506,985
• City Owned:
  33,571
• Rent to Own:
  791
• Tax Liens:
  671,398
• As-Is Deals:
  6,455
• Fixer Uppers:
  3,354
• Total Listings:
  1,483,984

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Funky Winkerbean said:

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LMCane said:

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Funky Winkerbean said:

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If they raise the interest rates to cool inflation, I would think prices would begin to fall some. But they won't do that because it also increases the payment on our national debt. We have idiots in charge.

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my friend have you been under a rock the last year?

the Fed has raised interest rates more than 6 times so far

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And they should be higher.

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Agree

But you know what Powell has done also? Started QE again.

So on the one hand he's taking money out, and on the other putting it back in.

It's outrageous given the fact that inflation is starting to rise again.

I think the housing market is locked into a period of stagnation for an extended period of time, 10 years?

So many people are locked into historically low mortgage rates that they will be very hesitant to sell. So supply will be constrained enough to prevent any wild gaps between supply and demand.

The biggest wildcard I see are all the homes now owned by corporations as rental properties. If a few of them get forced into a fire sale situation, that could crash markets in a few locations, but it would just be limited to where their individual portfolios are, and assuming a similar buyer wouldn't step in and buy them en masse and prevent the properties from hitting the open market.

I would also not be surprised to see a change in laws that limit this type of concentrated ownership of residential real estate, especially in more liberal areas. That could force some mass liquidation of the portfolios.

I don't even think a surge in foreclosures would cause a crash. I think there are enough of these large corporate buyers for rental portfolios to soak up any decent foreclosure properties.

Your statement here:

"So many people are locked into historically low mortgage rates that they will be very hesitant to sell. So supply will be constrained enough to prevent any wild gaps between supply and demand."


doesn't make sense. The people selling are also buying. The fact that they remain in their house means there is not a supply of older existing homes for new buyers. But there is a supply of new homes because of housing starts.

What will happen is that hew buyers will be forced to buy more expensive, newer homes at higher rates. That might mean a reduction in housing starts with a slow down because of resistant buyers. Those buyers will choose to rent multi family units for a longer period

AggieDruggist89 said:

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Bexar Ag said:

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Anybody else hoping the housing market crashes to jump in?

I thought I would've had a house by now, tired of apartment living but the market needs to fall first

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I don't see how housing market crash is possible. Majority of mortgage holders have super low interest rate and there's no inventory. Hope I'm wrong.

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This is where I am. 2.8%…I can't afford to move.

I'm seeing two camps in real estate. But it's pick your poison. At the rate we're going, we won't see a balanced market--we've been in a sellers market since before covid. The commodifcation of housing will only get worse. Lowering rates will not magically increase supply if demand is chasing a monthly payment, and inventory continues to be choked.

Whether a crash happens or not, affordability in the long run is just as bad of a consequence. Thinking housing is risk free creates a bigger mess.

One thing that folks are not considering is boomer deaths and transfers to nursing homes.

They own almost half the existing homes but their population rate is only about a fifth of the total.

During the housing boom pre 2008, there were about 1 million homes changing hands each year. They predict there will be 4 to 5 times that much when the boomer houses start flooding the market.

That's a good point. Another issue is what will happen to boomer houses?

Are boomers holding on to homes that millennials and gen z'ers don't want or cant afford?

Interest rates too high and also the tax rate in the areas these houses are is way too high.

Seems like there's a bunch of giant low-quality non-energy efficient homes built in the 90s and 00s that are now maintenance nightmares. What happens with those houses, or am I off base here?

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So many people are locked into historically low mortgage rates that they will be very hesitant to sell.

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Agree with you here.

The biggest issue I see is a situation where people are holding at a low rate they can afford but are forced to sell because one party files for divorce and neither party can afford the house.

You tend to see this happen a lot nowadays.

This is a really interesting point. Boomer children may be happy to sell and have a quick liquidity hit. I figure it will be a mix. Inherited houses without a mortgage are a different proposition from houses still subject to debt. If I inherit a house with no mortgage, my first instinct is to consider using it as a rental property. But everyone's situation is different.

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So many people are locked into historically low mortgage rates that they will be very hesitant to sell. So supply will be constrained enough to prevent any wild gaps between supply and demand.

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I have so much equity trapped in a property because it was my primary residence, took out a small amount of money in a home equity loan for a remodel, then refied the whole thing.

In Texas this makes the whole mortgage a cash out and I can't take out more cash even though I have >50% equity….

And I can't refi because the rate is so low.

Small state government for you.

If you had the foresight to buy or re-fi in early 2022 if feel like you ran the gauntlet.

That good decision is gonna carry you through for a long time.

Manhattan said:

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So many people are locked into historically low mortgage rates that they will be very hesitant to sell. So supply will be constrained enough to prevent any wild gaps between supply and demand.

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I have so much equity trapped in a property because it was my primary residence, took out a small amount of money in a home equity loan for a remodel, then refied the whole thing.

In Texas this makes the whole mortgage a cash out and I can't take out more cash even though I have >50% equity….

And I can't refi because the rate is so low.

Small state government for you.

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you could have gotten a stand alone home equity second

Not if I rolled in an equity loan to the current mortgage. And according to the cad I'm at 63% equity.

People made out like bandits buying, selling and getting settled where they want to be during covid.

Early 2022 interest rates were below 3%. We are unlikely to see that again in our lifetime, imo.

Stat Monitor Repairman said:

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Quote:

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So many people are locked into historically low mortgage rates that they will be very hesitant to sell.

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Agree with you here.

The biggest issue I see is a situation where people are holding at a low rate they can afford but are forced to sell because one party files for divorce and neither party can afford the house.

You tend to see this happen a lot nowadays.

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Over time death, divorce, and disease will force turnover in the market for sure.

At the end of the day all these factors up to the housing market crashing and stagnating for a long period of time, imo.

Its always better to own a home and earn equity than to throw it away paying rent.

Buyers are still buying homes in the Houston area. They have adjusted to the higher rates and will buy down their rate if they can. In Houston it is cheaper to buy a home and pay a mortgage than to pay rent.

The low interest rate folks are still selling when they need to because families are still outgrowing homes, people are still relocating for jobs and people are still getting old and needing to sell.

Now is a great time to sell a house because we are still dealing with low inventory in Houston.

The nice, well kept homes are still getting multiple offers and the ones that need updating are still selling, but maybe taking a bit longer.

Older homes are still in demand and home warranty programs are still being offered by sellers to help with worn out appliances or HVAC systems.

If you need to sell a house that needs some updating or work done, there are companies that will renovate prior to listing and wait to get paid after you close.

Buyers are still buying down rates. Sellers are still offering contributions that can help the buyer buy-down their rate. Lenders are offering buyers the ability to refinance in a year or two with a one time "no extra fees" charged.

The market is adjusting.

It may not be 2021-2022 frenzy, but it still a very good market in Houston.

I don't see it crashing at all.

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Its always better to own a home and earn equity than to throw it away paying rent.

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A $500,000 loan at 6% with 20% down, 2.2% property tax less homestead, and $2000/yr for insurance is $3,408 a month.

That's like $400 a month going to equity at the beginning of the loan, you can rent a pretty nice place right now for $3,000 and not have to put $100,000 down.

Manhattan said:

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Its always better to own a home and earn equity than to throw it away paying rent.

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A $500,000 loan at 6% with 20% down, 2.2% property tax less homestead, and $2000/yr for insurance is $3,408 a month.

That's like $400 a month going to equity at the beginning of the loan, you can rent a pretty nice place right now for $3,000 and not have to put $100,000 down.

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And what does the renter do next year when the landlord raises their rent every year? But, the homeowner is still paying the same monthly amount..year--after--year...

The average length of homeownership is 8 years. Closing costs on the purchase and sale are going to negate most if not all of those savings.

But with cash price listings now, owning a home is getting way cheaper.

Houston Lee said:

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Manhattan said:

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Its always better to own a home and earn equity than to throw it away paying rent.

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A $500,000 loan at 6% with 20% down, 2.2% property tax less homestead, and $2000/yr for insurance is $3,408 a month.

That's like $400 a month going to equity at the beginning of the loan, you can rent a pretty nice place right now for $3,000 and not have to put $100,000 down.

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And what does the renter do next year when the landlord raises their rent every year? But, the homeowner is still paying the same monthly amount..year--after--year...

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There's a lot variability to the rent vs buy equation, and it all depends on the individual. A home is something you use, not just an investment, so that has to figure in as well.

Much of it has to do with the time horizon you expect to be there. With a rental, you're at the mercy of the landlord and market every year. You may not see rent decreases unless you move, which means you have to go through the hassle and cost of moving to get a better rate. If you buy, you can be locked in at a housing payment for a long time and refinance if the market improves. If you intend to be somewhere awhile, buying makes sense. If you move a lot, renting is a better idea.

Renting also comes with less risk because you don't own the house and aren't responsible for much of the maintenance or anything breaking. If you're really handy though, the maintenance and fixing may not be a roadblock to you.

Renting limits what you can customize on the home or apartment. You can't just paint walls or change fixtures if you don't like them like on a house you own. Typically a landlord would require you to put everything back to the state it was in when you moved in, meaning you have to pay for that kind of stuff twice. Also, any improvements you make stay with the landlord, and may not be deductible from your rent (like rehabbing a backyard).

To say that one is always better than the other is a huge oversimplification either way.

We've been renting for 3 years. Looking back we maybe should have just bought a home in one of the higher end areas of SA but we're shocked at the sticker prices compared to Knoxville. Still the interest rate would have been around 2.5% I think and the right thing, we just weren't sure. But we found a 4k sq ft rental for 2700/month on .8 acres in a gated area. Were still here renting at $2,850/month. We have a 1.5 acre lot in a great area and have decided to build. Waiting to see if construction costs come down a little before we build and timing isn't right as I'm smothered with work. I plan to build the house myself which will save around $200k.

I think we've seen a lot of older people from semi-rural areas that want to downsize and move closer to grandkids and family support in Houston, Austin, Dallas but they are deterred by sticker shock on the cost of housing and didn't make the move and now they stuck. They could afford it but are unwilling to pay that much for a house on general principle.

I've heard of a number of people as of late with this issue.

I'll add that property taxes here in TX were a huge shock. Property taxes for a $700k house in Knoxville County were around $3,000 year.

Kvetch said:

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I'm hoping prices come down to where they should be. The growth in value over the last 5 years is not sustainable.

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The stupid growth in home prices since the 90s is the result of decades of increasingly cheap money. In the past year interest rates have basically doubled. While most current homeowners can wait the market out with their 3-4% loans, I was certainly expecting new homes sales to crash since those buyers would be paying around 7%. So far, though, I'm not seeing near the drop in new home demand that I thought I would.

Buck Turgidson said:

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Kvetch said:

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I'm hoping prices come down to where they should be. The growth in value over the last 5 years is not sustainable.

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The stupid growth in home prices since the 90s is the result of decades of increasingly cheap money. In the past year interest rates have basically doubled. While most current homeowners can wait the market out with their 3-4% loans, I was certainly expecting new homes sales to crash since those buyers would be paying around 7%. So far, though, I'm not seeing near the drop in new home demand that I thought I would.

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Builders are offering nice deals if you use their preferred lender. Low interest rates and 10K towards closing costs are common. Builders are also more willing to work with buyers that may have a contingency to sell their existing home to be able to purchase the new-build.

Plus, buyers don't have the head-to-head competition with other buyers/investors like they do with resale homes.

Buck Turgidson said:

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Kvetch said:

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I'm hoping prices come down to where they should be. The growth in value over the last 5 years is not sustainable.

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The stupid growth in home prices since the 90s is the result of decades of increasingly cheap money. In the past year interest rates have basically doubled. While most current homeowners can wait the market out with their 3-4% loans, I was certainly expecting new homes sales to crash since those buyers would be paying around 7%. So far, though, I'm not seeing near the drop in new home demand that I thought I would.

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Until Obama, average mortgage rates were never below 5 since the 70s. Bernanke unde Obama then kept the reserve rate at 0 which did not change until Powell at the beginning of Trumps tenure. Mortgage rates fell well below 5. That's the screw up.

It's back up where it needs to be. But we are now between a rock and hard place. Inflation is high and rising again. If we have another recession, we're screwed.

BusterAg said:

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I own two rental properties.

I get 2 to 3 calls EVERY DAY of foreign cash buyers looking to buy one of my houses.

As long as our fiscal policy remains completely insane, housing prices are going to stay flat at least, but more likely to follow inflation.

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The calls are trying to buy cheap. I told ine a few months ago that I'd sell at the appraised price. Ever returned.

Houston Lee said:

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Buck Turgidson said:

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Kvetch said:

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I'm hoping prices come down to where they should be. The growth in value over the last 5 years is not sustainable.

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The stupid growth in home prices since the 90s is the result of decades of increasingly cheap money. In the past year interest rates have basically doubled. While most current homeowners can wait the market out with their 3-4% loans, I was certainly expecting new homes sales to crash since those buyers would be paying around 7%. So far, though, I'm not seeing near the drop in new home demand that I thought I would.

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Builders are offering nice deals if you use their preferred lender. Low interest rates and 10K towards closing costs are common. Builders are also more willing to work with buyers that may have a contingency to sell their existing home to be able to purchase the new-build.

Plus, buyers don't have the head-to-head competition with other buyers/investors like they do with resale homes.

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To your point, A friend of mine who's a State Trooper just bought a home in a new development near Sequin and the builder threw in a new, upgraded washer/dryer/fridge, sprinkler system, money towards closing costs, fully sodded yard, silent garage door opener, accent lighting and upgraded tile, carpet or synthetic wood. I'd say they are one step above a starter home but for young family of 5 it works. Several other Troopers have bought homes in this little subdivision so you have your built in ADT for no charge. :-)

Science Denier said:

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BusterAg said:

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I own two rental properties.

I get 2 to 3 calls EVERY DAY of foreign cash buyers looking to buy one of my houses.

As long as our fiscal policy remains completely insane, housing prices are going to stay flat at least, but more likely to follow inflation.

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The calls are trying to buy cheap. I told ine a few months ago that I'd sell at the appraised price. Ever returned.

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This is correct, but the funding for the buy is coming from China or Saudi Arabia.

They are trying to convert their reserve dollars to U.S. based assets because they think the dollar is likely to crash.

Anecdotal from another city (Overland Park, KS).

Wife and I bought our 1st home in 1994 for $120k. 7% Interest. Sold it in 2004 for $205k, moved to Houston. Left Houston and returned to OP in 2013. We refinanced in 2020 at ~2.75%.

Just last month a house a few blocks away from our old home was listed for $320k. It sold to a cash buyer for $380k the weekend it opened.

My agent told me that there were 600+ homes listed for sale in Johnson County, KS (including brand new) in Feb of 2020. In Feb of 2022 there were 200 homes listed for sale and it's not gotten any better. Despite interest rates having gone up, housing prices around here continuing to rise.

We looked at a fixer upper in North Overland Park, ~2800 sq.ft. larger lot (like 20,000 sq.ft) that was listed this Saturday for $415k. When we left the showing the agent was telling everyone who came in they already had multiple offers for over listing, some for cash, bids were due by 5PM. And when I say fixer upper I mean gut an remodel b/c except for maybe carpet, everything is original from the 1970's build date.