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Pending home sales sink in February

Phys251

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BirdinHand

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Good.

Perhaps they’ll go back to selling for what they’re actually worth instead of the inflated prices of the past several years.

Feel bad for those that will be caught upside down in their home value vs. what their mortgage is…but I guess they didn’t learn from the last housing bubble.
 

tacomancer

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Good.

Perhaps they’ll go back to selling for what they’re actually worth instead of the inflated prices of the past several years.

Feel bad for those that will be caught upside down in their home value vs. what their mortgage is…but I guess they didn’t learn from the last housing bubble.
A lot of analyst still expect housing prices to increase this year, but track more closely with inflation.

There are still issues like supply chain problems for new construction (and worker shortages), millennials entering the market in force, and working from home (even though this trend is starting to somewhat abate for certain sectors, but continues to be true for highly paid IT people).
 

JMB802

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This is probably a reaction to the expected rise of interest rates. A lot of people were buying or refinancing to lock in low rates. Now that the rates are going to rise, the housing market is likely going to cool off.
I was just reading on another board about how institutional and international investors have been driving up prices. The single-family housing stock is historically low and investors are hoping to flip or rent them out.
 

Jkca1

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Things will slow down but I doubt they cool off much. The Phoenix market is insane and it's not about to take a break.
 

aociswundumho

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This is probably a reaction to the expected rise of interest rates.

I'd say it's more because of the extremely low inventory. I've been following the real estate market since my early 20s, and I've never seen anything like this regarding inventory. For example, the absolute crappiest town in my state is Waterbury CT. There are typically hundreds of multi family houses for sale in this godforsaken shithole. As of right now there are only 23 multi family properties on the market that are not pending/contingent. That is insane.

A lot of people were buying or refinancing to lock in low rates. Now that the rates are going to rise, the housing market is likely going to cool off.

In theory, but markets are very much subject to the foibles of human psychology. When rates start creeping up, potential buyers fear they are going to miss out as rates keep rising, which can increase demand.
 

Jkca1

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My wonderful realtor just forwarded the following. Timing is everything and this applies to the Phoenix area. Be sure to be sitting down before reading ti;

"The monthly average sale price of closed listings across the ARMLS database has shown absolutely no sign of deceleration in 2022 so far. The latest reading for February 26 is $558,942. This is not shocking, given the absurdly lop-sided market balance, but impressive for several reasons:


  • It is an increase of $11,246 IN A SINGLE WEEK - a rise of more than 2% in 7 days


  • We burst through the $550,000 barrier just 18 weeks after bursting through the $500,000 barrier


  • The $450,000 barrier was exceeded exactly 1 year ago


  • The $400,000 barrier was exceeded in August 2020
 

Gateman_Wen

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Good.

Perhaps they’ll go back to selling for what they’re actually worth instead of the inflated prices of the past several years.

Feel bad for those that will be caught upside down in their home value vs. what their mortgage is…but I guess they didn’t learn from the last housing bubble.
Real estate almost never goes down.
 

BirdinHand

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Did you miss the word "almost"?
And people have been paying 25% and more above listing prices for years in areas.

Do you think those houses are actually worth that much?

Nope. It’s a bubble. The question is whether it pops or slowly deflates.

Either way, there will be countless people upside down in mortgages.
 

Gateman_Wen

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And people have been paying 25% and more above listing prices for years in areas.

Do you think those houses are actually worth that much?

Nope. It’s a bubble. The question is whether it pops or slowly deflates.

Either way, there will be countless people upside down in mortgages.
If they're paying more than the listing price that doesn't mean the home was worth that much.
 
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