July 13, 2024

Media Housing Market Omission

It is said that the housing market goes in an 18 year cycle so we are now basically at the top of an 18 year bull run!

The huge increase of mortgage rates has reduced home buyers’ purchasing power and has forced sellers to adjust their price expectations by dropping their asking prices to its highest levels since October 2019.

Media Housing Market Omission

Media Housing Market Omission - California Housing Markets 2021

Personally I think the media he’s a meeting relevant real estate market news because they’re trying to bolster the Biden Administration by not adding a real estate bust to the list of  Biden’s disaster is track record. I mean, people are still grappling with the fact that we have baby formula shortages and have to import baby formula from Europe.  So, let’s push off the real news about the real estate market until after the November elections.  It just seems to make sense, we sure don’t want to add to are already high inflation and stratospheric gasoline prices!

The real estate market has shifted very quickly I am not surprised that Realtors have difficulty in talking with prospective sellers as sellers are in the denial stage. Soon they will probably get angry, depressed, and finally accept the facts. I am sure these stages happened to prospective buyers in the last two years.

Media Housing Market Omission - 2017 San Diego real estate

This is where things can get interesting. If we keep having price drops increase, then people who bought in the last 2 years will start to be underwater. That’s only considering the ones who didn’t go way above the appraised value of the home. Those who waived their appraisal values in the last 3 to 6 months are probably already underwater. The question is what will the homeowner do when they start to see their home equity disappear? Will they start having massive buyers regret? Panic sell? It’s hard to say. I just get worried that we might have a larger segment of consumers who bought too much house or were sucked into a house without understanding the local property taxes, energy costs, what needs to be repaired, and so on. The psychology of a bubble can be very scary because people just act so irrationally either due to fear or greed. I believe we are starting to see fear is taking over and that’s where a bloodbath can happen. 

There is a perfect storm forming in America. Inflation, severe drought in the farm belt, the pandemic, food shortages, diesel fuel, and heating fuel shortages, baby formula shortages, shortage of and price of available cars, and the price of housing. It’s all coming together and could lead to real disaster toward the end of this year. (or sooner)

Always keep in mind, that purchasing or selling a home is a major lifestyle decision, and as such, should not be rushed into. So, by all means, if you’re considering purchasing or selling real estate in today’s market, do your own homework and draw your own conclusions! But, also consult with your legal & financial advisors prior to making your moves.

My opinions here are just that, opinions!  The fact that I’ve been in the residential real estate market for over three decades, does not mean that my opinions are going to be any more accurate then your mother-in-law’s opinion, though I sure hope they are!

For those of you who may not be regular readers here is the link to the first warning blog post that I put out; my first post where I called the real estate market top was June 15, 2021 (https://brokerforyou.com/brokerforyou/real-estate-market-downturn/ ) . On June 17 I had a follow-up post ( https://brokerforyou.com/brokerforyou/real-estate-market-bust/ ) where I added additional indicators, that to me showed that the market was in a topping phase right now! I put the links to each one of those prior post above, and would suggest if you’re interested, to reread those posts!

Buckle up your seatbelt because the downward ride has just started!

Media Housing Market Omission

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