Housing Analysis

[Liar Loan]

Wow... Almost 1 in 5 homeowners plans to sell this year.

Realtor.com: More Supply is On the Way

After more than two years on the sidelines, there are signs more homeowners might finally be ready to sell.

Eighteen percent of homeowners in the U. S. plan on selling their homes within the next twelve months, according to Realtor.com?s 2022 Home Sellers report. This is more than twice the 8% of homeowners that typically said they planned to sell at the start of the Spring buying season pre-pandemic and almost double the 10% of homeowners who said they planned to sell in 2021.

As to why a larger number of homeowners than usual may be motivated to list their homes this year, a lot may have to do with the disruptions and uncertainty caused by the first two years of the pandemic, says Ratiu.

Early lockdowns made selling a home difficult. Later on, the rise of the Delta and Omicron variants put a return to a more normal routine in question. Uncertainty over school policies on masking and in-person learning, and over businesses bringing people back to the office also made a move during last year?s spring buying season a challenge.

?In a sense, [this year] is a catch-up,? Ratiu says. ?It?s over two years of delayed activity about to come on the market this year.?

 

[usctrojancpa]

Wow... Almost 1 in 5 homeowners plans to sell this year.

Realtor.com: More Supply is On the Way

After more than two years on the sidelines, there are signs more homeowners might finally be ready to sell.

Eighteen percent of homeowners in the U. S. plan on selling their homes within the next twelve months, according to Realtor.com?s 2022 Home Sellers report. This is more than twice the 8% of homeowners that typically said they planned to sell at the start of the Spring buying season pre-pandemic and almost double the 10% of homeowners who said they planned to sell in 2021.

As to why a larger number of homeowners than usual may be motivated to list their homes this year, a lot may have to do with the disruptions and uncertainty caused by the first two years of the pandemic, says Ratiu.

Early lockdowns made selling a home difficult. Later on, the rise of the Delta and Omicron variants put a return to a more normal routine in question. Uncertainty over school policies on masking and in-person learning, and over businesses bringing people back to the office also made a move during last year?s spring buying season a challenge.

?In a sense, [this year] is a catch-up,? Ratiu says. ?It?s over two years of delayed activity about to come on the market this year.?

So you are telling me homeowners will sell their homes which they probably have a low interest and then what?  All of them go rent?  That'll cause rental properties to skyrocket.  All of them will buy another home?  That'll basically be a wash then.  These soon-to-be sellers need to live somewhere unless they are moving back in with parents/family.

 

[Liar Loan]

Wow... Almost 1 in 5 homeowners plans to sell this year.

Realtor.com: More Supply is On the Way

After more than two years on the sidelines, there are signs more homeowners might finally be ready to sell.

Eighteen percent of homeowners in the U. S. plan on selling their homes within the next twelve months, according to Realtor.com?s 2022 Home Sellers report. This is more than twice the 8% of homeowners that typically said they planned to sell at the start of the Spring buying season pre-pandemic and almost double the 10% of homeowners who said they planned to sell in 2021.

As to why a larger number of homeowners than usual may be motivated to list their homes this year, a lot may have to do with the disruptions and uncertainty caused by the first two years of the pandemic, says Ratiu.

Early lockdowns made selling a home difficult. Later on, the rise of the Delta and Omicron variants put a return to a more normal routine in question. Uncertainty over school policies on masking and in-person learning, and over businesses bringing people back to the office also made a move during last year?s spring buying season a challenge.

?In a sense, [this year] is a catch-up,? Ratiu says. ?It?s over two years of delayed activity about to come on the market this year.?

So you are telling me homeowners will sell their homes which they probably have a low interest and then what?  All of them go rent?  That'll cause rental properties to skyrocket.  All of them will buy another home?  That'll basically be a wash then.  These soon-to-be sellers need to live somewhere unless they are moving back in with parents/family.

Oh USC.. You've been lamenting the lack of supply, and now here it is, but you still won't accept it.  Who cares what they plan to do?  It's supply, right?

 

[usctrojancpa]

Wow... Almost 1 in 5 homeowners plans to sell this year.

Realtor.com: More Supply is On the Way

After more than two years on the sidelines, there are signs more homeowners might finally be ready to sell.

Eighteen percent of homeowners in the U. S. plan on selling their homes within the next twelve months, according to Realtor.com?s 2022 Home Sellers report. This is more than twice the 8% of homeowners that typically said they planned to sell at the start of the Spring buying season pre-pandemic and almost double the 10% of homeowners who said they planned to sell in 2021.

As to why a larger number of homeowners than usual may be motivated to list their homes this year, a lot may have to do with the disruptions and uncertainty caused by the first two years of the pandemic, says Ratiu.

Early lockdowns made selling a home difficult. Later on, the rise of the Delta and Omicron variants put a return to a more normal routine in question. Uncertainty over school policies on masking and in-person learning, and over businesses bringing people back to the office also made a move during last year?s spring buying season a challenge.

?In a sense, [this year] is a catch-up,? Ratiu says. ?It?s over two years of delayed activity about to come on the market this year.?

So you are telling me homeowners will sell their homes which they probably have a low interest and then what?  All of them go rent?  That'll cause rental properties to skyrocket.  All of them will buy another home?  That'll basically be a wash then.  These soon-to-be sellers need to live somewhere unless they are moving back in with parents/family.

Oh USC.. You've been lamenting the lack of supply, and now here it is, but you still won't accept it.  Who cares what they plan to do?  It's supply, right?

Yes, I still want more supply.  But yes you'll get more supply but what will those people do? Live under a bridge or in their cars?  These people have to live somewhere.  I think there will be a lot of stubborn homeowners who will not sell because they have huge equity and a rate in 2s or 3s.

 

[OCtoSV]

The bigger question is who would be buying at 7% mortgage rates, which we'll see by the end of the year due to the velocity of the Fed's open market MBS sales? Of course that is still a negative real rate using current inflation figures, but it will be devastating for buyer psychology and qualification. Of course if prices come down 20% then maybe that restores equilibrium. Remember 90-98, when no one in OC thought RE would ever recover and values and sales looked as stagnant as Japan while ARMs were adjusting upward?

Avoiding leverage will become the new mantra.

 

[lnc]

The bigger question is who would be buying at 7% mortgage rates, which we'll see by the end of the year due to the velocity of the Fed's open market MBS sales? Of course that is still a negative real rate using current inflation figures, but it will be devastating for buyer psychology and qualification. Of course if prices come down 20% then maybe that restores equilibrium. Remember 90-98, when no one in OC thought RE would ever recover and values and sales looked as stagnant as Japan while ARMs were adjusting upward?

Avoiding leverage will become the new mantra.

At 7%, not many. 

I remember the 90's.  When I bought my first home in 1995, I got a 9.5% 30 year fixed mortgage.  But the home price was way cheaper back them (it's in OC and under $130/sq. ft) and that made the housing relatively affordable. 

Now the affordability goes through the sky with both higher price and increasing rate.  If mortgage really hit 7%, inflation and fed rate must also be higher, all hell breaks loose. 

 

[sleepy5136]

The bigger question is who would be buying at 7% mortgage rates, which we'll see by the end of the year due to the velocity of the Fed's open market MBS sales? Of course that is still a negative real rate using current inflation figures, but it will be devastating for buyer psychology and qualification. Of course if prices come down 20% then maybe that restores equilibrium. Remember 90-98, when no one in OC thought RE would ever recover and values and sales looked as stagnant as Japan while ARMs were adjusting upward?

Avoiding leverage will become the new mantra.

20% down takes us to 2021 pricing. I don't think it makes much a difference.

 

[sleepy5136]

Wow... Almost 1 in 5 homeowners plans to sell this year.

Realtor.com: More Supply is On the Way

After more than two years on the sidelines, there are signs more homeowners might finally be ready to sell.

Eighteen percent of homeowners in the U. S. plan on selling their homes within the next twelve months, according to Realtor.com?s 2022 Home Sellers report. This is more than twice the 8% of homeowners that typically said they planned to sell at the start of the Spring buying season pre-pandemic and almost double the 10% of homeowners who said they planned to sell in 2021.

As to why a larger number of homeowners than usual may be motivated to list their homes this year, a lot may have to do with the disruptions and uncertainty caused by the first two years of the pandemic, says Ratiu.

Early lockdowns made selling a home difficult. Later on, the rise of the Delta and Omicron variants put a return to a more normal routine in question. Uncertainty over school policies on masking and in-person learning, and over businesses bringing people back to the office also made a move during last year?s spring buying season a challenge.

?In a sense, [this year] is a catch-up,? Ratiu says. ?It?s over two years of delayed activity about to come on the market this year.?

So you are telling me homeowners will sell their homes which they probably have a low interest and then what?  All of them go rent?  That'll cause rental properties to skyrocket.  All of them will buy another home?  That'll basically be a wash then.  These soon-to-be sellers need to live somewhere unless they are moving back in with parents/family.

Oh USC.. You've been lamenting the lack of supply, and now here it is, but you still won't accept it.  Who cares what they plan to do?  It's supply, right?

Yes, I still want more supply.  But yes you'll get more supply but what will those people do? Live under a bridge or in their cars?  These people have to live somewhere.  I think there will be a lot of stubborn homeowners who will not sell because they have huge equity and a rate in 2s or 3s.

In the event the bay area companies are all requiring folks to return back to office, you may see the housing market be impacted for homes 1.5m+. That is a very likely thing to happen. They may do that in the event of a recession since employees will lose leverage then.

 

[Bullsback]

Famous last words - but I think home prices and the rapid escalation we saw has peaked and we will start to see that shift. Not saying crash - just saying the rapid jump up in prices that was happening month after month is done.

Somehow kick me 6 months from now when stuff is up another 20%

 

[CalBears96]

Famous last words - but I think home prices and the rapid escalation we saw has peaked and we will start to see that shift. Not saying crash - just saying the rapid jump up in prices that was happening month after month is done.

Somehow kick me 6 months from now when stuff is up another 20%

Well, I think we've seen the slow down in price increase for EW Fresco and PS Bluffs/Highland. OH Ravelleo is something else, though.  ;D

 

[sleepy5136]

Famous last words - but I think home prices and the rapid escalation we saw has peaked and we will start to see that shift. Not saying crash - just saying the rapid jump up in prices that was happening month after month is done.

Somehow kick me 6 months from now when stuff is up another 20%

Well, I think we've seen the slow down in price increase for EW Fresco and PS Bluffs/Highland. OH Ravelleo is something else, though.  ;D

Are those price increases leading to homes being sold?

 

[CalBears96]

Famous last words - but I think home prices and the rapid escalation we saw has peaked and we will start to see that shift. Not saying crash - just saying the rapid jump up in prices that was happening month after month is done.

Somehow kick me 6 months from now when stuff is up another 20%

Well, I think we've seen the slow down in price increase for EW Fresco and PS Bluffs/Highland. OH Ravelleo is something else, though.  ;D

Are those price increases leading to homes being sold?

Well, according to the post in another thread, one is available and one is reserved.

Ravello contacted one of my colleagues:

Lot 10: Plan 2, 5742sqft view lot; 30ft setback; $4.73M, available
Lot 11: Plan 3, 6362sqft view lot; 40ft setback; $4.91M, reserved but taking back-ups

Truly WTF prices....

 

[usctrojancpa]

As I mentioned, the supply of new homes built after the Great Recession has been below average (see the attached chart) and has contributed to the housing shortage that we are seeing today.  Yes increasing rates will eliminate some demand out of the market but it will mostly be marginal buyers who never really had a chance in buying a home anyway. 

 

[CloudSurfer]

Yes increasing rates will eliminate some demand out of the market but it will mostly be marginal buyers who never really had a chance in buying a home anyway.

Do you think this mostly applies to certain price points? For example, is this equally true for a 1.1M attached condo vs a 1.8M detached condo?

 

[usctrojancpa]

Yes increasing rates will eliminate some demand out of the market but it will mostly be marginal buyers who never really had a chance in buying a home anyway.

Do you think this mostly applies to certain price points? For example, is this equally true for a 1.1M attached condo vs a 1.8M detached condo?

Good question.  I think a slightly higher percentage of lower end buyers are dropping out due to increasing rates and prices but there is a lot more buyers in the sub $1m range than there are up to $1.5m or $2m.  So even if a higher % drop out, there are still several strong buyers left and at the end of the day all you need is one motivated, qualified buyer.

 

[CalBears96]

Yes increasing rates will eliminate some demand out of the market but it will mostly be marginal buyers who never really had a chance in buying a home anyway.

Do you think this mostly applies to certain price points? For example, is this equally true for a 1.1M attached condo vs a 1.8M detached condo?

Good question.  I think a slightly higher percentage of lower end buyers are dropping out due to increasing rates and prices but there is a lot more buyers in the sub $1m range than there are up to $1.5m or $2m.  So even if a higher % drop out, there are still several strong buyers left and at the end of the day all you need is one motivated, qualified buyer.

Bluffs 2 (detached condo) released at $1.825M and already sold, so there's that.  ;D

 

[Liar Loan]

USC's wish is coming true!!  YoY housing inventory is up for the first time since June 2019.

 

[daedalus]

The big question is what will sales volume do?  Or is inventory up because sales have been anemic?

 

[Liar Loan]

The big question is what will sales volume do?  Or is inventory up because sales have been anemic?

There hasn't been an increase in listings from the data I'm looking at, but rather a slowdown in demand from rapidly increasing rates.

 

[Liar Loan]

So much for the supply shortage.

Calculated Risk: All-Time Record Housing Units Under Construction

Red is single family units. Currently there are 815 thousand single family units under construction (SA). This is the highest level since November 2006.

Combined, there are a record 1.641 million units under construction. This eclipses the previous record of 1.628 million units that were under construction (mostly apartments in 1973 for the baby boom generation).

https://calculatedrisk.substack.com/p/april-housing-starts-all-time-record