Viewing a single comment thread. View all comments

fishythepete t1_je3iib2 wrote

Reply to comment by UltravioletClearance in Would you buy a house in RI right now? Why or why not? by TransitionSea9480

Please tell me more about how rising interest rates and a looming recession is going to drive sales prices further upwards, oh wise one. My only frame of reference is the housing market following 2008 financial crisis, and the accidental rental properties I picked up back then. Clearly since you’re calling me a “sweet summer child” you have some vast and valuable experience you’d like to share?

−9

BingBong022 t1_je3s6vy wrote

Simple supply versus demand

9

fishythepete t1_je3u1b9 wrote

So sales are down 20% from this time last year, so mark that down on the demand side.

Consider that the jump in interest rates over the last 9 months means that your mortgage and interest expense (ie the bulk of your mortgage payment) has almost doubled for homes priced the same. I.e. buying a $400,000 home today costs you about 80% more than it did a year ago. And home prices haven’t stayed flat either. The cost to own a given home is > 2.5-3X today what it was 3 years ago. But hey maybe demand is unlimited no matter the cost.

Simple though right 🙄

−7

AttackonRetail t1_je4j8s8 wrote

But how does inventory look?

2

fishythepete t1_je4piln wrote

Based on slowing sales, it looks better than it did this time last year relative to demand.

−5

BingBong022 t1_je5svtf wrote

False inventory is down because nobody is selling lol, the prices of all my properties have increased from last year

1

fishythepete t1_je61rtp wrote

>False inventory is down because nobody is selling

it looks better than it did this time last year relative to demand.

Bolded it for you to help you figure out what you missed. Inventory changes don’t happen in a vacuum. They happen against a backdrop of changes like rising interest rates and economic concerns.

>the prices of all my properties have increased from last year

Congrats, you had the good luck to live close to a few major markets and not bumfuck Indiana. The median existing-home sales price was down 0.2% to $363,000 in February compared to a year ago. This is the first drop that has happened in 11 years. If you think it is an isolated event, you might want to chart some NAR data, because you clearly can’t see which way the wind is blowing.

−1

BingBong022 t1_je655xo wrote

Lol

1

[deleted] t1_je65cys wrote

[removed]

1

AttackonRetail t1_je6ephg wrote

Aren't we only talking about RI relevant data? Are you using national averages?

0

fishythepete t1_je6wkum wrote

Are you under the impression that RI is some unique real estate microcosm that would insulate it from the national average?

National average data is absolutely relevant to RI.

−1

UltravioletClearance t1_je550yc wrote

> rising interest rates

Doesn't matter. There are always buyers who aren't sensitive to interest rates - all-cash buyers, buyers with massive equity who can stomach a high interest rate on a small mortgage, and of course corporations and house flippers.

> looming recession

No one has ever successfully predicted a recession. Every historical recession came out of the blue with no warning. This is no different. The media and corporations are certainly trying to convince us we're in a recession, but we have the lowest unemployment rate in 20 years and a strong economy so no one's buying their FUD.

>drive sales prices further upwards

Three words - supply and demand. No supply, sky-high demand regardless of economic conditions or interest rates.

2