Is there a housing bubble?

[beejus]

Good fukking luck finding something in this market

I have a potential off the market house in my neighborhood. Guy is lazy, but wants to sell his house in a few months. If we can come to an agreement on the amount won't even have to deal with agents and bidding wars.

 

[lib123]

A sudden, major stock market correction could easily correct the housing market. A lot of buyers are willing to spend more because they feel wealthier (401Ks), but the wealth is on paper. Also, a major stock market correction could lead to homeowners that want to sell rushing to the door fearing an imminent housing price correction (especially near-future retirees) while suddenly potential buyers don't feel like taking that risk. Job security is also highly correlated with stock prices.

Spooky times

 

[Steel]

A bidding war broke out this winter at a new subdivision north of Houston. But the prize this time was the entire subdivision, not just a single suburban house, illustrating the rise of big investors as a potent new force in the U.S. housing market.

D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.

The country’s most prolific home builder booked roughly twice what it typically makes selling houses to the middle class—an encouraging debut in the business of selling entire neighborhoods to investors.

“We certainly wouldn’t expect every single-family community we sell to sell at a 50% gross margin,” the builder’s finance chief, Bill Wheat, said at a recent investor conference.

From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. They are competing for houses with ordinary Americans, who are armed with the cheapest mortgage financing ever, and driving up home prices.

“You now have permanent capital competing with a young couple trying to buy a house,” said John Burns, whose eponymous real estate consulting firm estimates that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in. “That’s going to make U.S. housing permanently more expensive,” he said.

The consulting firm found Houston to be a favorite haunt of investors who have lately accounted for 24% of home purchases there. Investors’ slice of the housing market grows—as it does in other boomtowns, such as Miami, Phoenix and Las Vegas—among properties priced below $300,000 and in decent school districts.

“Limited housing supply, low rates, a global reach for yield, and what we’re calling the institutionalization of real-estate investors has set the stage for another speculative investor-driven home price bubble,” the firm concluded.

The bubble has room to grow before it bursts, according to John Burns Real Estate Consulting. But it is inflating fast. The firm expects home prices to climb 12% this year—on top of last year’s 11% rise—and increase at least 6% in 2022, a period of appreciation reminiscent of 2004 and 2005.

That boom was different, fueled by loose lending that enabled individuals to speculate on home prices by racking up mortgages they could repay only if home prices kept climbing. The money party ended a few years later when home prices stopped rising. The ensuing crash wiped out $11 trillion in U.S. household wealth and brought the global financial system to the brink of collapse.


Financiers stepped in starting in 2011 and gobbled up foreclosed homes at steep discounts. They dispatched buyers to courthouse auctions with duffel bags of cash. Smartphones and tablet computers—new then—enabled them to orchestrate the land grab and manage tens of thousands of far-flung properties thereafter.

2008 all over again

 

[OfTheCross]

2008 all over again

Nah. These companies got money long enough to keep their homes

 

[Geek Nasty]

I think there's shady shyt going on, they're pricing houses high and lying about offers to keep prices inflated.

 

[Scustin Bieburr]

We really might be out here again 3 peat. crisis in 08, crisis in 20 and now 21 or 22 about to restore that 08 feeling

 

[lib123]

We really might be out here again 3 peat. crisis in 08, crisis in 20 and now 21 or 22 about to restore that 08 feeling

 

[Captain Crunch]

If this shyt crashes

 

[FaTaL]

Anybody else notice the prices of houses going down? On Zillow I keep seeing house has reduced its price etc

 

[Geek Nasty]

Anybody else notice the prices of houses going down? On Zillow I keep seeing house has reduced its price etc

Yup. Ive seen lots of weirdness. Prices coming down, houses staying pending forever like 6 months, sold houses that keep reappearing.

 

[CrimsonTider]

Anybody else notice the prices of houses going down? On Zillow I keep seeing house has reduced its price etc

This was always going to be the case. You just needed patience

the surge in house prices was because people were selling their houses and had a lot cash to offer over the sales price

 

[GnauzBookOfRhymes]

Anybody else notice the prices of houses going down? On Zillow I keep seeing house has reduced its price etc

A lot of people who recently put their homes on the market set unrealistic prices (even for a hot sellers market) bc of what's been happening the last year or so. Demand also slowed down a little bit bc of material prices/shortages and bc of potential buyers thinking they should wait things out until prices cool.

That being said, this is absolutely nothing like 2008. Not even close. We are in a completely different economy. Real estate will be one of the few places you can park money with assurances that values will always increase, mainly bc at the end of the day we are never building enough housing.

 

[Software]

Anybody else notice the prices of houses going down? On Zillow I keep seeing house has reduced its price etc

There has been a sharp decline of people buying because they are tired of the bidding wars. And a lot of the people who were saving for a house and decided to finally buy due to pandemic keeping them inside have bought already.

 

[lib123]

A lot of people who recently put their homes on the market set unrealistic prices (even for a hot sellers market) bc of what's been happening the last year or so. Demand also slowed down a little bit bc of material prices/shortages and bc of potential buyers thinking they should wait things out until prices cool.

That being said, this is absolutely nothing like 2008. Not even close. We are in a completely different economy. Real estate will be one of the few places you can park money with assurances that values will always increase, mainly bc at the end of the day we are never building enough housing.

Prices can decrease when they've been artificially inflated. Just like mid-2000s risky mortgages created excess demand, pandemic restrictions created limited supply.

 

[Jekyll]

Prices can decrease when they've been artificially inflated. Just like mid-2000s created excess demand, pandemic created limited supply.

Keep telling people this aint 2008. Blackrock aint playing out here. Its going to be more companies like them popping up to.


It’s one thing when a desperate person is trying to sell a house and move. Its a whole nother thing when billion dollar companies hold these properties and don’t have to sell until they get their desired offer.