Is another decline in the U.S. housing market imminent?

[Pedestrian]

No apparent wobbles yet in SF Bay Area single family homes although the media keeps feeding us stories about people leaving due to unaffordability. A lot of rich Chinese must be arriving or something:


http://www.socketsite.com/archives/2...ddle-tier.html

[Sun Belt]

Originally Posted by CIA

Yeah, the article I posted originally is about Austin's housing market. Given that they've had such rapid appreciation since the housing market peak in 2006, I wonder if they can be seen as the "canary in the coal mine."

Denver is the other city that looks kinda toppy. I'm told one of the things to watch for when the market softens, for rental apartments anyway, is the number of concessions being made to new renters. When first month free or no security deposit deals start to appear, it's indicative of oversupply and the last step before prices start to fall.

Some places appear bubbly, but who knows? If we all knew then the prices would have already corrected.

For Austin, it is the capital city of Texas which has been exploding in growth. I'm not too surprised at all in the success of Austin. Their lack of freeways and other modes of transportation put a huge strain on existing convenient locations, meaning the value increases greatly.

For Denver, it has represented an alternative to Californians looking to flee the state and still be able to live somewhat of a Californian lifestyle. As long as CA continues to become less affordable, Denver should be ok. It's a beautiful region with a strong economy.

[dave8721]

Originally Posted by Steely Dan

check out austin, 72.8!

Austin's change since peak is actually greater than its change since bottom, which means that its peak was below its bottom? Or it just never peaked or bottomed in 2006 or 2007.

[sopas ej]

Is another decline in the U.S. housing market imminent?

Looking at patterns over the last 4 decades of my life, yes.

I mean come ON: "It's a buyers' market!" "It's a sellers' market!" Buyers' market! Sellers' market!

[COtoOC]

Originally Posted by CIA

Yeah, the article I posted originally is about Austin's housing market. Given that they've had such rapid appreciation since the housing market peak in 2006, I wonder if they can be seen as the "canary in the coal mine."

Denver is the other city that looks kinda toppy. I'm told one of the things to watch for when the market softens, for rental apartments anyway, is the number of concessions being made to new renters. When first month free or no security deposit deals start to appear, it's indicative of oversupply and the last step before prices start to fall.

I live in the city of Denver and bought a new house in 2005, and its current value is about 60% higher than what I paid for it. I have to wonder if a crash is coming, but then my particular neighborhood has become much more desirable since the day we moved in (walkable to trendy restaurants and mass transit). So I don't know for sure, but I have enough equity that it could go down quite a bit and not affect my life. We plan on keeping it at least 10 more years, so a housing crash really isn't concerning to me. I've noticed that our PPSF is over $300, but other neighborhoods in Denver are higher than that.

[JManc]

Originally Posted by Pedestrian

No apparent wobbles yet in SF Bay Area single family homes although the media keeps feeding us stories about people leaving due to unaffordability. A lot of rich Chinese must be arriving or something:


http://www.socketsite.com/archives/2...ddle-tier.html

I have an uncle who lived in San Jose/ Sunnyvale since the 50's at least and probably paid next to nothing for his houses. The current value of his last home in Sunnyvale before retiring in UT is $2.1 million for 2,000 s/f.

[Obadno]

Originally Posted by CIA

I've been reading a few articles and watching prices. I feel like several cities that saw rapid price appreciated after the Great Recession may be due for a slight pullback.

One example of many: http://austin.culturemap.com/news/re...travis-county/

What's SSP thoughts and how is the housing market in your city?

Rising interest rates reduces a potential home buyer's ability to borrow, which should limit price appreciation.

There was also a lot of new condos built post recession, where the developer was subsidizing maintenance costs to keep the HOA/condo fees artificially low. As they sell the last of the units and turn complete control of the association over to the homeowners, prices have been rising as the true costs are revealed. (Let's be real, the manicured lawns, swimming pools, game rooms and exercise equipment look like cool features at first, but they're gonna be killer maintenance and replacement reserves in the long-run. That's why I prefer a condo with none of that extra crap.)

Generally speaking? Yes eventually. Like 2008? No.

The housing market isn't nearly overvalued with sub-prime buyers like it was, house prices have JUST made back to their 2006 highs in most cities.

The small bubbles in some neighborhoods are mostly local issues and an inability (from either market or governmental reasons) are unable to keep up with new housing stock.

All the stuff you can read on CNBC, WSJ and other economic focused publications don't predict a downturn anytime soon, not for the next few years. Hopefully several.

Even if there was a recession its not likely to be like what we just went through, such declines take decades of bad decisions.

[Sun Belt]

Originally Posted by Obadno

All the stuff you can read on CNBC, WSJ and other economic focused publications don't predict a downturn anytime soon, not for the next few years. Hopefully several.

I don't disagree with you, but neither CNBC or WSJ or anybody else predicted what was to happen in 2008 in 2008.

There is a lot of "fake news" on financial websites for a multitude of reasons. Some are intentional and some are not.

If things were abundantly clear, then people would flee in droves collapsing the price of whatever - tulips. So there is a lot of intentional disinformation out there to confuse people. This is how it always works.

In 2007, there were too many people saying everything is good, no need to worry about anything, now is the time to buy and so on. How wrong were they 5 years later?

[Pedestrian]

Originally Posted by JManc

I have an uncle who lived in San Jose/ Sunnyvale since the 50's at least and probably paid next to nothing for his houses. The current value of his last home in Sunnyvale before retiring in UT is $2.1 million for 2,000 s/f.

I don't know about single family houses or Sunnyvale, but $1000 per sq ft is pretty much the low limit of the market in SF for condos these days.

[Obadno]

Originally Posted by Sun Belt

I don't disagree with you, but neither CNBC or WSJ or anybody else predicted what was to happen in 2008 in 2008.

There is a lot of "fake news" on financial websites for a multitude of reasons. Some are intentional and some are not.

If things were abundantly clear, then people would flee in droves collapsing the price of whatever - tulips. So there is a lot of intentional disinformation out there to confuse people. This is how it always works.

In 2007, there were too many people saying everything is good, no need to worry about anything, now is the time to buy and so on. How wrong were they 5 years later?

I disagree, by 2007 housing prices were already deep in decline, by early 2008 several banks had gone bankrupt and everyone knew a recession was imminent, I was a college student and I remember people very clearly seeing the writing on the wall.

When the big market crashes came in September of 2008 it was more of a confirmation of what was already expected than a complete and total surprise.

[Sun Belt]

Originally Posted by Obadno

I disagree, by 2007 housing prices were already deep in decline, by early 2008 several banks had gone bankrupt and everyone knew a recession was imminent, I was a college student and I remember people very clearly seeing the writing on the wall.

When the big market crashes came in September of 2008 it was more of a confirmation of what was already expected than a complete and total surprise.

I don't disagree with your point of view and/but I'm a tad bit older [damn that sucks] than you.

My point of view is a bit different though. I remember being glued to CNBC and discussing the happenings with coworkers in 2007 that ultimately lead up to the collapse in 2008. In 2007 we were discussing gold and OIL [without considering anything else]. Fast forward to 2018 and what is of most concern, another fossil fuel called Natural Gas -- that's another discussion though.

Many stories during those times were trying to claim the slight pullback in real estate is a "rare opportunity to get in now!"

Nobody in 2007 could have ever predicted what was about to happen in 2008, especially in the Phoenix metro area. That was the worst depression in the history of PHX, much worse than the Great Depression, the only thing that rivals it is the savings and loan scandal of the 1980s.

[Pedestrian]

Originally Posted by Sun Belt

I don't disagree with you, but neither CNBC or WSJ or anybody else predicted what was to happen in 2008 in 2008.

There is a lot of "fake news" on financial websites for a multitude of reasons. Some are intentional and some are not . . . .

In 2007, there were too many people saying everything is good, no need to worry about anything, now is the time to buy and so on. How wrong were they 5 years later?

Originally Posted by Sun Belt

Nobody in 2007 could have ever predicted what was about to happen in 2008, especially in the Phoenix metro area. That was the worst depression in the history of PHX, much worse than the Great Depression, the only thing that rivals it is the savings and loan scandal of the 1980s.

In a way, I did.

Sometime in the summer of 2007 I read an article in the financial press questioning the safety of the paper held by many money market funds. As a result, I went to a local office of the company running the fund where I stashed most of my cash and asked for something that would show me their holdings. The guy behind the counter literally laughed at such a request. As a result, I moved everything out of their fund and into a Treasury Money Fund (holding only US Treasury bills) at another company. The rest is history. For a review, see: https://www.law.berkeley.edu/files/b...Literature.pdf

[Buckeye Native 001]

People in Phoenix new damn good and well what was about to happen, many just chose to ignore it.

[IrishIllini]

I think the canary in the coal mine is Vegas. When Vegas starts hitting 12% YoY appreciation, it's time for caution. Anything can happen, but I don't think any turbulence in the real estate market would be anything like 2007/08. The western US may be overheated...particularly Denver, Seattle, Portland, SF, and LA. Maybe also NYC, Dallas, and Austin, but it's hard to say without mass layoffs...

[Sun Belt]

Originally Posted by Buckeye Native 001

People in Phoenix new damn good and well what was about to happen, many just chose to ignore it.

That doesn’t make sense.

New home buyers knew a collapse of over 50% was imminent therefore they bought anyways?

Existing homeowners with an existing mortgage whether they knew or not were stuck.

What are you going to do? Sell and try to find a job elsewhere ASAP or hold on tight.

[Buckeye Native 001]

I should have clarified: Home buyers and home owners might not have known, but real estate developers, construction companies and political leaders in Arizona (as well as in Nevada and California) had to have known that what was going on wasn't sustainable.

[Pedestrian]

Originally Posted by Buckeye Native 001

I should have clarified: Home buyers and home owners might not have known, but real estate developers, construction companies and political leaders in Arizona (as well as in Nevada and California) had to have known that what was going on wasn't sustainable.

I had a clue when I started getting unsolicited letters from people I didn't know wanting to buy my house near Tucson. Should have sold it. If Zillow is believable (and I know many here don't think it is), the house is just now getting back to the level of the offers I was getting back then. The chart I posted above says Tucson is still 20% below the peak. Since I bought it in 2001, though, it was never worth less than I paid and I planned to continue to use it so I never considered selling, then or now.

[Obadno]

Originally Posted by Sun Belt

Nobody in 2007 could have ever predicted what was about to happen in 2008, especially in the Phoenix metro area. That was the worst depression in the history of PHX, much worse than the Great Depression, the only thing that rivals it is the savings and loan scandal of the 1980s.

The reason the great depression wasnt nearly as bad in Phoenix is because "phoenix" was a collection of farm towns separated by miles of cotton and citrus.

BUt I was at ASU and people were talking major recession early in 2008

[Obadno]

Originally Posted by IrishIllini

I think the canary in the coal mine is Vegas. When Vegas starts hitting 12% YoY appreciation, it's time for caution. Anything can happen, but I don't think any turbulence in the real estate market would be anything like 2007/08. The western US may be overheated...particularly Denver, Seattle, Portland, SF, and LA. Maybe also NYC, Dallas, and Austin, but it's hard to say without mass layoffs...

True overheating I only really see in Manhattan, Cali and Seattle but thats for local reasons not national over-pricing.

[BG918]

Originally Posted by COtoOC

I live in the city of Denver and bought a new house in 2005, and its current value is about 60% higher than what I paid for it. I have to wonder if a crash is coming, but then my particular neighborhood has become much more desirable since the day we moved in (walkable to trendy restaurants and mass transit). So I don't know for sure, but I have enough equity that it could go down quite a bit and not affect my life. We plan on keeping it at least 10 more years, so a housing crash really isn't concerning to me. I've noticed that our PPSF is over $300, but other neighborhoods in Denver are higher than that.

I just sold my townhouse in the City of Denver. We were thinking about moving to a new neighborhood but had put it off then our neighbors in the exact same townhome sold theirs in December for $140k more than they originally paid in 2015 when they were first built. So we put ours on the market and sold it in 4 days for $175k more than we paid only having lived there 3 years. Our other neighbors just listed their townhome for $200k more, it hasn’t sold yet but probably will by this weekend. All of these are exactly the same square footage, finishes, etc Feels like a bubble to me.