Quote:
Originally Posted by ASAP
I think people need to entirely reset their expectations at this point... meaning downward pricing pressure... we won't see what we saw the last 4 years again... at least not for a long time. I don't see int rates going even 5% within years at this point unless a major recession happens... and if that does happen, I am not sure anyone will be purchasing a home.
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I think downward vs. the rapid pace of escalations is correct. Some are still over-pricing and need to adjust, but will still be well above 2 years ago. This will bring stability vs. where we were a year to 18 mos. ago. People around me who price as though prices have now leveled off are still selling (and doing quite well vs. realistic expectations), while those asking absurd prices as if the runup further ratcheted up are either decreasing prices, renting or just sitting on the market.
However, interest rates are only part of the equation and I also think the fundamental issue of lack of inventory is still going to put a floor under prices. People will just stay put and not sell their houses and home builders will slow new construction. While demand will fall, unless there are massive job losses in another Great Recession that force people to sell, supply will remain limited to reach an equilibrium of sorts through reduced demand. Hard to imagine significant price drops in the absence of a flood of inventory and that is not the case right now or in the foreseeable future. There are some home builders and flippers caught with their pants down right now, but it is nothing like 2008 right now.