slowing down

[SD Realtor]

Things are slowing down. I will present some data tonight that shows a slowdown in a few submarkets for certain types of properties.

[earlyretirement]

I imagine they will get even slower as the stock market bubble deflates as well. Things don’t move in straight lines as I always say. I know LOTS of people that saw the stock market keep going up so they entered probably at the wrong time.

As the stock market deflates, there should be some pain with the “wealth effect”. Over the past 2 years many people got more confident and their consumer spending and appetite for purchasing including real estate went up.

It will be interesting to see how slow things get as the stock market deflates.

[The-Shoveler]

I would expect the Fed to have a panic moment fairly soon if things continue on this trajectory.

There is too much, Gov/wallstreet/local-Gov finance at stake,
They are not ready for another recession just yet IMO, (really for most there was no recovery).
Interesting times.

[spdrun]

What’s the worry? No recovery is linear, and things are expected to bounce up and down before finding a new normal (if that word can ever be applied to the CA r.e. market 🙂 ). We’re also getting out of the Spring buying season, so some price correction is normal. Not the end of the world.

And if I can pick up a condo or two more in the next year, it will be a good job. I’ve actually seen a few deals that will cash flow in the last week or so.

[The-Shoveler]

A pause or a slight slow down would probably not be that problematic, another recession/housing-crash would start to get very expensive from this level IMO.

[spdrun]

Since I bought everything I own at crash-level prices, I’d see another crash as another buying opportunity. Since most of the buyers buying in the last 2.5 years have been investors, if some that bought foolishly get burned, them’s the breaks.

[The-Shoveler]

Investors would be last I would worry about, (as long as they are cash flowing over 5% or better), and in lower end range (high end could get burned a lot easier I think).
It would be very expensive for the average Joe six pack is what I am referring to,

Also to local Gov’s

[kev374]

[quote=The-Shoveler]
It would be very expensive for the average Joe six pack is what I am referring to,

Also to local Gov’s[/quote]

But, the government would not let that happen now..would they? Both the markets and average Joe six pack have been led to believe that our government will print as much money is necessary to keep all markets from falling. As we saw, just the mere suggestion of the Fed slowing down the printing caused an uproar. The markets will MAKE the Fed keep printing, the Fed has no other alternative – keep printing or suffer a huge crash in which everyone will lose their shirts, the economy will completely tank, houses will be lost left and right, jobs will be lost etc. etc.

[The-Shoveler]

Yes, that’s it.

The only way out is to admit that really you need wages to go up 20-50% in the next few years then you can taper,

More so at the lower end of the wage scale than the higher end of wage scale.

[no_such_reality]

Or…

the clock keeps ticking and strikes midnight.

Latest bird flu strain kills more than 1 in 3.

[spdrun]

Joe 6p will get mods as needed. Landlords will be fine. Specuvestors counting on another bubble will be reamed. This will be a good thing.

As far as printing money, the markets are actually a lot more volatile during times of easy money. Printing money doesn’t (fortunately!) guarantee anything, at least not short term.

Here’s hoping for a correction!

[SD Realtor]

ummm yes…

Perhaps I need to clarify… Over the past several months we have had extraordinary activity. The results included double digit annualized price increases, substantially reduced days on market, and a frenzied atmosphere in many (but not all) local submarkets. The activity was fueled by a severe shortage of inventory coupled with very low interest rates.

For many months the pace of purchase exceeded the inventory of new homes coming on the market. We started to see a trend reversal, albeit small in late April. JTR posted weekly stats for inventory in the NC community. Similarly new sellers felt entitled to unrealistic list prices that were not backed by comps but placed on the market based on the frenzied atmosphere. Predictably a few homes sold but some did not. Thus inventory continued to grow and did exceed the number of homes sold.

Even before the interest rate spike of the past week we already had experienced some fairly solid gains in the inventory for many communities I track. Make no mistake, these gains in no way, shape, or form, signalled an unhealthy market or a buyers market. They simply signalled a return to a more normalized market.

The interest rate been a wake up call but more for those on the bubble (being able to afford a given submarket) then anything else. More telling has been the move of 100 basis points in less then 6 weeks.

I don’t anticipate this to be a major trend reversal at all but a perfectly predictable reaction to what was an unsustainable period over the past 6 months/1 year. I anticipate more inventory growth and some price corrections that are more built on improper initial list pricing then anything else.

Understand this discussion is for SFH owner occupied homes in the more desired submarkets. School districts such as PUSD, TP and north county areas. Other areas may see some of the same. It is not for investor condos. Similarly other areas with a more modest price point, for instance Mira Mesa are still pretty scorching.

[The-Shoveler]

Yea OK but slowing market right at the usually hottest period I think is a sign,
I guess we need to see what the effect the recent rise in rates will have and where rates go from here.
Bond market is not happy.

Would not be surprised to see the Fed hit the panic button.

[spdrun]

The Fed is already on the panic button. Problem is that the longer they’re on it, the more speculation about them getting off. Should make for a nice little buying opportunity either way. They made the perfect storm — hope they and their cronies get to reap the whirlwind.

[The-Shoveler]

They definitely could be pushing it harder,

In absents of some other stimulus I don’t see an exit that is not real ugly IMO.

But who know’s maybe they will just step aside.

Wow, I really can’t imagine that.

I mean can you imagine mortgage rates at 6%, how about 8%.

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