Prices of Existing Homes Fall 11% from Peak. Sales Hit Lockdown Low. Cash Buyers and Investors Pull Back Hard

Priced right, any home will sell. But sellers are not wanting to price their homes right.

By Wolf Richter for WOLF STREET.

This is getting relentless: Sales of previously owned houses, condos, and co-ops fell by 1.5% in December from November, the 11th month in a row of month-to-month declines, and by 34% year-over-year, to a seasonally adjusted annual rate of sales of 4.02 million homes, roughly matching the lockdown-low in May 2020, and beyond that the lowest since the depth of Housing Bust 1 in 2010, according to the National Association of Realtors today.

Priced right, just about any home will sell, but sellers are not wanting to price their homes right. And potential sellers are sitting on their vacant homes, hoping for a quick end to this downturn, or they’re putting it on the rental market or try to make a go of it as a vacation rental, rather than dealing with the reality of a mind-blowing housing bubble that has loudly popped (historic data via YCharts):

Actual sales in December – not the “seasonally adjusted annual rate” of sales – fell 36.3% year-over-year, to 326,000 homes (from 513,000 homes a year ago), according to the NAR.

The median price of all types of homes whose sales closed in November fell for the sixth month in a row, to $366,900, down 11.3% from the peak in June. This drop whittled down the year-over-year gain to just 2.3%, from a year-over-year gain of 16% in the spring of 2022.

Only a portion of this June-December price drop is seasonal: The average June-December decline over the six years before the pandemic was 5.8%, with a maximum decline of 6.4% and a minimum decline of 3.8%. This shows that the current 11.3% decline goes well beyond even the maximum seasonal decline.

Additional confirmation that much of this decline was not seasonal is provided by the rapidly shrinking year-over-year price gain, down to just 2.3%, from 16% in December 2021 through the spring of 2022 (historic data via YCharts):

In some markets, the median price has plunged a lot further. For example, in the San Francisco Bay Area, the median price has plunged by 30% from the peak in April 2022, and by 10% year-over-year, according to the California Association of Realtors. But other markets are lagging behind, to produce the overall national average.

All-cash buyers, investors, and second home buyers pulled back massively. All-cash sales plunged by 22% year-over-year, to 92,000 homes (28% of the 328,000 homes sold), down from 118,000 in December 2021 (23% of 513,000 homes sold). In other words, buyers that pay cash didn’t want to buy these overpriced homes either, though they didn’t have to worry about getting a high-rate mortgage.

Sales to individual investors or second home buyers plunged by 27% to 52,500 homes (16% of 328,000 homes sold), from 71,800 in December 2021 (14% of 513,000 homes sold). They too pulled back from this market.

Sales of single-family houses fell by 1.1% in December from November, and by 33.5% year-over-year, to a seasonally adjusted annual rate of 3.64 million houses.

Sales of condos and co-ops fell by 4.5% in December from November, and by 38.2% year-over-year, to a seasonally adjusted annual rate of 420,000 units.

Sales plunged in all regions, but plunged the most in the West. Year-over-year percent change (NAR map of regions):

Active listings jumped by 55% from a year ago, to 690,000 in December (active listings = total inventory for sale minus properties with pending sales). Just before the holidays, lots of sellers pull their homes off the market, and then put them back on the market for the spring selling season. This happens every year; active listing start to drop before Thanksgiving and don’t rise again until the spring (data via

Active listings, though up hugely from a year ago, are still relatively low as potential sellers are determined to wait out what they expect to be a brief ripple in the market, and meanwhile they’re putting their vacant homes on the rental market and they’re trying to bring in some cash by putting their vacant home out there as a vacation rental. And many are just sitting on their vacant homes that they hadn’t sold because they’d wanted to ride up the market all the way to the top with huge gains of 20% or 30% a year. But that show is over. And now what?

Median days on the market, before the frustrated seller pulls the home off the market, or before the home is sold, rose to 67 days (data via

Price reductions: Active listings with price reductions hit a new high for any December in the data by going back to 2016: 25% of the active listings in December 2022 had price reductions, up from for example 17% in the pre-pandemic December 2019.

December or January is usually the seasonal low point for price reductions. Rather than cutting prices, many sellers pull their homes off the market and wait for the spring selling season, before they re-list it. That sellers are cutting prices over the holidays to this extent shows that they’re getting a little more aggressive.

Hoping for a quick reversal of this downturn: This combination of plunging sales, dropping prices, rising active listings, rising days on the market before the home gets pulled or sold, an increase of active listings with price cuts, but still tight supply, indicates that many potential sellers are still hoping for a quick reversal of this downturn. And they’re letting the vacant home sit to wait for better days, or they’re putting it on the rental market or try to make a go of it as a vacation rental, rather than dealing with the reality of a mind-blowing housing bubble that has loudly popped.

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  302 comments for “Prices of Existing Homes Fall 11% from Peak. Sales Hit Lockdown Low. Cash Buyers and Investors Pull Back Hard

  1. The Bob who cried Wolf says:

    We all see the carnage but does Powell? Does he care is the better question. I suspect things as a whole are going to get a lot worse in short order and QE will suddenly become a topic again.

    • American Dream says:

      I don’t think QE will be on the table for some time to steal Fed speak language lol.

      The really interesting thing is how housing seems to be picking back up just a tad bit. Applications and what not aren’t down quite as much lately with rates getting closer to 6%.

      I’m in no way saying this will last but the belief that a pivot and price appreciation will re start soon is pretty amazing. It’s become a stand off but I’ll take the Fed to win

      I’m sure Powell is taking note of this and the loosening of financial conditions.

      • Leo says:

        Bob, What’s wrong with house price falling? Why should QE be started to protect house prices?

        Housing is the suckered that’s destroying real economy and converting Americans to debt slaves.

        People are paying many years of their lives saving and interests, only to buy a decent house in the so called “land of the free”.

        Most of this price is speculation and not productive value. Do we want to be a country that keeps building houses for speculation, that remain empty and gather mold, while we face food shortages and hyperinflation?

        • CreditGB says:

          China is building speculative, empty, investment housing by the hundreds of thousands of units. Seems like they see some value to doing so. Some insist it is the only viable investment option for the Chinese who wish to obtain some level of wealth. Sort of the housing equivalent of bit coins.

        • roddy6667 says:

          Most people who want to own a house already own one. To lower house prices now hurts a lot more people than it helps.

        • Lune says:

          Nonsense. Lots of people currently renting are looking to buy. And every day, as people get older, have kids, etc. they move out of the city and into suburban houses. The churn is constant (Also, older empty nesters sell their houses, move into cities / Florida / nursing homes).

          The real issue is that the people who don’t own houses tend to be younger, just starting out in their life, while the people that already own houses tend to be later in their life. House prices is generational warfare by another name: lower prices benefit young folks who don’t have houses, and hurt retirees looking to sell their house. Higher prices do the opposite.

          Those in the middle don’t really care because if they sell a house, it’s to roll into another one so prices don’t really matter once you’ve entered the treadmill. It only matters to those looking to either enter or exit the treadmill.

        • BP says:

          roddy6667 coming in with the ultimate “I got mine” foolish comment. Yeah, I’m sure all those without homes don’t want one anyway.

        • Fed up says:

          I agree. I think house prices need to come down a lot more.

        • Bobber says:


          You do understand that housing prices went up 200% in many locations the last 10 years, don’t you?

          That was an inappropriate artificial gain created by Federal Reserve policy error. The removal of that windfall is the only fair thing to do. If housing drops 30%-50% from here, it would simply be bringing things back to normal.

          Homeowners don’t need protection after 200% gains. They need to earn their money, like everybody else.

        • Moi says:

          Bought a nice 3/2 in ’98 for 100k. Housing boom went to 600k. Housing bust went to 90k. Went back up to 300k Fed free money and sold it. RE is extremely volatile and has no correlation with the real economy. It’s like a car, it’s worth what you can get for it. Rented for years after that. Built my own place dirt cheap. It’s a home not an asset.

        • RH says:

          Dear CreditGb,
          They were building that many but now their sales are so down that the CCP is funding them to complete the homes they sold, got a large series of payments on to finish, and never finished. Evergrande just made restructuring proposals for its foreign lenders that are so funny that you should read them for a laugh — so long as you do not own their Ponzi bonds, of course.

          If you got caught in the CCP-Wall S T R E E T Ponzi schemes, be aware that many prominent companies and individuals in the US (even one media company) have so misrepresented the dire state of those CCP companies (because they are clearly linked to the CCP and compensated by it) that you have causes of action against them under some state’s laws, such as for acting as promoters of securities frauds. They were and are acting as CCP Ponzi shills in getting Americans to gift their money to the CCP for Ponzi scheme bonds/shares– “gift” because most foreign investors will not get it back.

          Just read recent news about Evergrande and its foreign creditors, AKA big time losers. It is not a good idea to give your money into a country with no law but the whims of a gang of kleptocrats.

        • The Bob who cried Wolf says:

          I’m good with a healthy market that actually is a market driven market. We haven’t had one of those for a long long time. Personally, if the market drops I don’t care as it’ll be a good time to buy. The national association of realtors may not agree because for them and the mortgage guys things always need to appreciate, otherwise what would be the point of the investment.
          So much meddling has happened in our economy, who knows what’s going to happen next?

      • Leo says:

        For San Francisco and Seattle, the housing tone is set by recent mass layoffs. These techies may only get hired at half the salary, if lucky, due to spreading hiring freezes.

        Then they will realize that this very expensive mortgage on a very premium house, at an extremely expensive city doesn’t make any sense.

        Many will move out to work remotely from a cheaper area, putting their houses up for sale. So the real storm is yet to come, I see a sad spring season!

        • blahblahbloo says:

          Presumably those workers should be able to continue to pay the mortgages for as long as their severance pay period lasts (for someone laid off from Google after working there 5 years, that’s 6 months). Should be interesting to see what happens to the market when that ends.

      • Flea says:

        We cany undo 20 years of interest manipulation in 1 year ,this will not be fixed until there’s a washout . Always is now they want to produce a 1 trillion dollar platinum coin ,don’t think countries holding our debt will appreciate this

    • Swamp Creature says:

      Powell doesn’t care. When he drove to work at the Fed on Constitution Ave he didn’t like the sight of homeless tents on his way in. He wanted them off the streets and parks and away from the Supreme Court. He got his wish.

      • Leo says:

        How will the next generation save to buy these overpriced houses as wages lag inflation!

        Our kids will be living in our basements or go homeless!

        • Bobber says:

          Wrong. There are plenty of jobs for hard-working young people out there. Now, thanks to a change in Fed policy, they’ll be earning a decent return on their savings. Let’s hope the Fed keeps interest rates high, for sake of the younger generations.

          If they keep rates high, housing prices will come down and home affordability will be much better going forward, and progress will be sustainable. Rent today, buy a few years from now when prices are much lower. Have patience. Let high interest rates bring prices down. It will take a few years.

        • Whatsmynameagain says:

          I’m 33. As a kid we learned to put money into savings, and invest based on reason. For years, everything has felt like chaos. I’m very cautious with money and, now that the casino is on fire, I feel comfortable with how to proceed for the first time in my adult life. HYSAs are just fine by me. Let the rates rise!!!

        • Scott says:

          I wouldn’t be so sure, Bobber. Things will have to substantially change. The median individual income has only risen by about 14% since 2000, while the median rent has doubled and median home price has tripled. Since 2000, the ratio of median income to median rent has gone from 4:1 to 2:1. Median rent has actually increased more in the last two years than the median income has in over two decades. There may be plenty of jobs out there, but there’s an objectively dismal lack of pay given how much wages have stagnated over the years.

      • The Real Tony says:

        Greenspan and Bernanke’s policies put those people onto the streets. There were very few people living on the streets when mortgage rates were 10+ percent and rents were affordable.

        • VintageVNvet says:

          Not so fast RT:
          In the distant past of my 75+ years, there were many folks walking and riding the rails into and through our small town in SW FL.
          Our local cops would help them on their way, as in ”get the hell out of here and never come back” , sometimes either paying for bus or train, sometimes just burying them out in the groves…
          Miami was the eventual destination for most of the hobos and other bums who did not want to work,,, as it was one large city with plenty of hobo villages hidden out of sight, as they all were in those days where one could sleep out all winter and not die from the freeze…
          Other destinations, especially for any wanting to work were the citrus groves, the tomato farms, etc.
          Trust me, homeless and ”migrant worker” situation been going on long long time, made worse by what is still the greatest depression in USA.

        • Cytotoxic says:

          Mass homelessness wasn’t a thing long ago. Then cities started banning SROs and prohibited motels from letting people stay in them as long as they’d like.

        • StatisticsJason says:

          More people choosing to take hard drugs is also a contributor to mass homelessness.

    • Porcelain Economist says:

      Of course, he sees it. It’s exactly what he wants. Listen to his exchange with Senator Shelby from last year and it will tell you everything you need to know about his resolve. He’s become a masochist and I love it!

    • BenW says:

      Personally, I hope he doesn’t start to pay attention until the median price approaches $250K. He literally created this mess, so he has to own it.

    • Lune says:

      Powell doesn’t care about house prices (or more accurately, it’s lower on his priority list). He cares about inflation and employment. As long as inflation is high (which it is), he’ll continue to raise rates, and continue QT. When inflation gets under control (unlikely to happen this year) what he does next is anybody’s guess and will likely depend on what the rest of the economy looks like.

    • Jon says:

      Home prices have much to fall.
      Lower home prices would be beneficiary to society in the long run.
      But people who are deeply invested in real estate may not like it and would pray for qe.

      I don’t see qe returning anytime soon

    • Pea Sea says:

      There is no carnage. There is nothing remotely resembling carnage. The recent downtick in housing prices has only erased the gains of last year’s blowoff top. Prices are still far, far, far too high–by at least 30% in many markets, and by much more in some local markets and on the lower end of most markets.

      • Bobber says:

        Correct. Interest rates must be high so housing prices can return to normal. If you are a homeowner who wants to preserve your gains, the best thing to do is sell now, before prices come down. Don’t expect a bailout from the Fed. Those who want to buy housing should have patience and wait for prices to come down. Powell told people this.

        • First and Long says:

          Hmmm….so we’re advising buyers not to buy, and sellers to sell. Seems like something’s off there…

        • Gomp says:

          So, Sellers should sell. And Buyers shouldn’t buy. Got it.

    • Cytotoxic says:

      There is no reason to think anything in this data or anything in Powell’s public remarks indicates a return to QE soon or even ever. Nor is this ‘carnage’.

      • James Connors says:

        Carnage will come soon enough. Booms beget Busts, and Busts beget Booms. Well at least for the last 71 years of my existence.
        I bought my first house in 1975 for $16,000.00. $1000.00 down and real estate contract at $90.00 per month. I charged $105.00 per month in rent and had to lower it to $100.00, as the renter threatened to find another house, cheaper. Sold the house 8 years later for $32,000.00. Then I did it again and again.

        America is full of millions of these same stories. Kept on buying and selling, building and selling. It sure was fun to be a young boomer. Now I am an old boomer and I sold my last house for a pot of retirement gold.

        Again, this is not some kind of magic witchcraft. Just work your butt off, save a little, then put it into a starter house and keep doing it. I love America, well the old America. Obey The Pug

        • StuckinSD says:

          I’m skeptical that Powell won’t return to QE sooner than people think, I have been patiently waiting for a real estate downturn here in San Diego for such a long time. I though it might be the start of some price adjustments during the taper tantrum, but no go, he reverted course and quickly. Then the pandemic QE spiraled real estate prices right out of the stratosphere here.

          And when the Fed should have clearly stopped their QE juicing of the economy during the pandemic. When it obvious and clear to any layman or person on the street that price inflation, home prices, car prices, stocks and just about everything else were rising way out of control, why did the Fed just sit idle and continue with their QE on steroids and keep rates at zero? The economy seems, well, addicted to QE to “function” and not go into a recession.

          My guess is that as soon as inflation reverts back down to some acceptable level like below 3-4% for a couple consecutive quarters the Fed will go back to some kind QE program.

          I don’t think the Fed will have the guts to keep interest rates as high as they need to be for as long as they would need to be for “sticky” real estate prices to come down to even 2019 levels. I *really* hope I am wrong. I’d like them to come down further than that.

        • Cytotoxic says:

          “My guess is that as soon as inflation reverts back down to some acceptable level like below 3-4% for a couple consecutive quarters the Fed will go back to some kind QE program.”

          But there is no reason to believe that.

    • Greg P says:

      One person’s “carnage” is another person’s “return to reality”. The fact that the Fed’s actions and Federal government deficit spending caused huge asset bubbles in real estate and equities is broadly accepted now. The popping of those bubbles is viewed by most people as a positive thing. Sure, if despite all warnings to the contrary, you stretched yourself to the utmost in order to buy a house in June, 2022, it is going to be a loooooong time before you see your home value return to the same level. But the same could be said if you bought in June, 2006. The last real estate bubble took six and a half years to bottom out. If you bought into a white hot real estate market after the Fed had started QT – you have only yourself to blame. And the Fed is not interested in the RATE of inflation as much as the CAUSES of that inflation. And as long as people continue to spend money like drunk pirates, the Fed is going to continue to tighten.

    • Fed up says:

      QE better not happen again, ever. It created this mess in the first place.

  2. BS ini says:

    So goes housing so goes the economy. As the higher interest rates begin to sink into folks that have to sell these vacant homes ad they become more burdensome. Also looks like housing will get some competition from the condo projects that are in progress. Thanks for the update the 2008 low did not hit bottom until 2011 so more to come !

    • BenW says:

      Easy, hoss! the 30YFRM is down from a high of 7.24% in mid Oct to 6.15% currently. The 3-month trend is down and will keep going down.

      Once it breaches 5.5%, housing will start to stabilize. At 5%, the decline in prices will cease and will begin a slow march north, al beit not at 15-25% a year.

      • Digger Dave says:

        The spread is shrinking as expected when desperate mortgagors have no customers, but the floor is rising. There’s a bottom, but with a moving target it’s not 5%. Lenders have to make a profit, don’t they?

        • Carpros says:

          iMHO we need 12%_15% street rates on a 30 year. Auserity age is going up in France and people are pissed. UK and US will follow suit. This are in crush mode world wide. Reit investors are in for more pain.

      • Cem says:

        No, it won’t.

  3. joedidee says:

    Cash buyers pulled back hard
    No we’re able to find other SAFE investments that keep our CASH SAFE for now
    no hurry – didn’t start buying in 2009 until obama landed

    • Swamp Creature says:

      As treasuries move above 4% to 5% all the cash buyers will be sitting on the sidelines. They will park the money there and enjoy the ride. I’m rolling all my CD’s over to 4%.

    • QQQBall says:

      @joedidee Zactly. Sitting on the sidelines getting almost 5% on 6-mo T-bill with the cash for the house gets even sweeter while prices decline.

      Nothing pays like patience, nothing!

  4. Jdog says:

    Looks like the ugliness is starting to set in. Just imagine how ugly this is going to look when the employment starts to falter…..

    But on the bright side, your government has only spent you into about $250K worth of debt for all the things they think are necessary, like wars and supporting millions of immigrants….

    • Einhal says:

      Not to mention paying people to go shopping during COVID, whether for flat screen TVs or boats/RVs.

    • Betty says:

      This is the most empty sentence I’ve read in years. Can you give the figures you’re comparing… like money the govenment (fed? states? which states?) is spending on war and the money on war?

      • Jon says:

        Betty, we’ve already given Ukraine 100 billion dollars. DoD gets hundreds of billions if not more.

        On the state and local level, a significantly high percentage goes into labor costs which are exacerbated by public union pressure on public officials in exchange for votes.

        • Tina W says:

          So we should just let Russia slowly take over all of Europe? Or just half of Europe? I’m sure Putin would never hurt us. He only has the best intentions. Better than our very own intelligence agencies, in fact. 😳🙄

        • Gooberville Smack says:

          Just like we couldn’t let the Taliban take over Afghanistan or North Vietnam take over South Vietnam. Goes to show what an intelligence agency is worth.

        • eg says:

          Tina W, do you have any idea how far away Ukraine is from the USA? Setting aside for a moment the ridiculous fantasy that Russia has any interest or intention of mounting a transoceanic invasion of the US (unless your fevered imagination pictures a trans Arctic one instead) there isn’t the remotest likelihood of its success.

          Where do such notions come from?

        • 91B20 1stCav (AUS) says:

          eg – might guess the book, and lingering lessons, of WWII are still fresh in Tina’s view (after all, Stalin was rendered almost catatonic when the Reich double-crossed the recently-old Polish border…), with the added bonus of modern military long-range strike capabilities.

          Goober – honest intelligence has the constant burden of being buried beneath governmental political policy, and national hubris based on prior successes (i.e.: ‘fighting the last war’, the Plame ‘yellowcake’ affair). If a nation is fortunate, it overcomes that burden, and does it’s best to rectify those failures, and especially, identifies and rectifies the failures found in its successes. If not, standing back from ‘eternal vigilance’ (in domestic, as well as foreign policy) guarantees, at best, a much higher casualty rate…

          may we all find a better day.

        • Jdog says:

          Tina, do you really think it makes sense to start WW3 over who rules Crimea? I am sure most of the wold does not want to leave that decision up to our Military Industrial Complex.

        • Wolf Richter says:


          With that logic, you just let Putin take the rest of Europe that was part of the Soviet Union, including former East Germany? Putin’s territorial ambitions MUST be stopped. They should have been stopped in 2014, but the West let him get away with it. He counted on the same this time around. And if he can pull it off, what country is next? Take a look at a map. US support of the Ukraine fighting off Putin is the best long-term investment the US made in my lifetime.

        • Swamp Creature says:

          I predicted this war in Ukraine would end up as a stalemate. I was correct so far. There will be no winners or losers, only big losers on both sides. It’s time to negotiate a settlement, like we did in NAM. Sending all of the arms will not change the outcome. Many of them are from different countries which will have separate supply chains and will require separate logistics and training. This will not work, and will not make the difference. Putin will throw a million Russians up to age 60 into that meat grinder if necessary. It will be another Stalingrad. Putin will eventually win. Putin wants a warm water port for his navy in the Black Sea. That’s what the war was all about in the first place.

    • JamesO says:

      another old dog howling at the moon. it’s a lot more fun to be a wolf.

      • Nissanfan says:

        Most people don’t care, because future generations will have that burden on their shoulders. To those children, Its like being born into indentured servitude, because current generations saw never ending credit as a way of life.

        • VintageVNvet says:

          NAH carfan:
          ”Future” generations will know better than to honor contracts entered into by obviously corrupt folks.
          Many such contracts will be voided or at least Avoided as they should be.
          Much if not all of this current ridiculous type of so called derivatives will eventually be abrogated.
          Only real challenge for WE the PEEDONs will be to go on with our lives, as ALWAYS, or at least ALWAYS in what our HIS AND HER stories tell us from for ever, SO FAR.
          BTW, someone recently posted we have now attained $250,000.00 DEBT per person, or $900,000.00 per family; that is so absurd that anyone with any common sense realizes that DEBT will never be paid back, eh???

        • Jdog says:

          There is an old saying that nothing matters… until it does…. then it matters a lot. People who shrug off the real danger of out of control government spending are simply denying the reality of the consequences. The bill is coming due, and it is going to impact each and every one of us to a much larger extent that it does today.

        • Jdog says:

          It is not just future generations. Your rapidly increasing cost of living is a result of it impacting your life now.

    • Escierto says:

      Supporting millions of immigrants? Keep on drinking the Kool-Ade. Immigrants work harder than any American does and they take jobs that Americans refuse to do at any wage.

      • TeacupDragon says:


        Does your comment apply to immigrants who are Americans, too? Or just to the knes who aren’t?

      • Jon says:

        I’ve heard this argument ad nauseum and it is not true. Pay someone enough to earn a living and they’ll do the job. That’s a fundamental rule of labor. Companies are too cheap to pay the labor costs so they cheat and steal and lobby to bring in more immigrants who live ten people in a house.

        America has the right to have secure borders, just like every other country. I don’t see those other countries who are sending their immigrants here allowing immigrants into their country.

        But for some reason, if America doesn’t do it, we’re racist.

        • 91B20 1stCav (AUS) says:

          Jon – …yet we continue to want to have it both ways…(enforceable card-check an energized fourth rail, voltage reduced or increased (depending on viewpoint) by the export/automation of ‘average’ ‘Murican jobs, but not much export of that surplus ‘average’ labor…).

          may we all find a better day.

      • Tina W says:

        Immigrants are also essential if we don’t want empty produce shelves across the country. I’m not sure about the middle aisles.

        • Jon says:

          Tina W,

          You are under the delusion that produce must be picked by low-waged people. Meanwhile, those of us in the lower 80% of this country will continue to thank you for your concern for your fellow citizen.

      • valerie in Australia says:


      • Jdog says:

        There is no such thing as a job people refuse to do at any wage. Ask any septic pumper if he enjoys his job, then ask him how much he makes, and you will understand why he does it. Labor like everything is a question of supply and demand, and when you artificially pump up supply by allowing massive migration you lower demand and therefore lower wages across the board. Every action has an equal and opposite reaction.

        • Mitry says:

          Jdog I agree that immigrant labor only temporarily reduces prices. When enough of those folks start shopping for condos and eventually single family homes (which they do, because they work hard) it reverses our downward price trend. A lot of those “crap jobs” are experiencing price discovery as we’re seeing now. Makes me wonder, will inflation be tamed by increased labor participation or by unproductive companies going out of business?

  5. Phoenix_Ikki says:

    Great trend, still a long way to go for SoCal, feels like we’re not even at the first inning given all the price listed in desirable SoCal areas…if this is the best market can do, then it’s disappointing at best. Hopefully this is just a function of time and market won’t pivot anytime soon.

    It will be really interesting to see what the Spring season will look like and if the demand that MSM like to tell people will come back in busy selling season

    • John Apostolatos says:

      That “Great trend” is called “reversion to the mean” and it will be hell to pay for all the asset bubbles. Bernanke still believes that those statistical laws do not apply to central banks with a printing press, and apparently someone gave him the Noble Prize for thinking that way.

      • Einhal says:

        I don’t think anyone, including the Nobel Committee, actually thought he was deserving of the Nobel prize. I think it was more a way of shoving their thumbs in our eyes. Much like giving Obama the Peace Prize in 2009.

        • Sams says:

          The Nobel Committee did not give Bernanke a Nobel Prize in economics because there is no Nobel Prize in economics!

          Svenska Riksbanken, that is the central bank of Sweeden on the other hand did give Bernankee


          And that is not a Nobel Prize. It is a hounorable price handed out by a central bank. In this case to the head of anothe central bank.😉

    • Jon says:

      In my hood in socal I am already seeing prices down 15 percent or so.

      I think so cal would fall hard in due time

      I am a home owner by the way and not looking to buy anything

    • Here it comes says:

      I’m in Mission Viejo. A home 3 houses down just sold for cash of 1.3M to a Chinese buyer. It’s a big house (2900sf), and from a $/sf perspective it’s a fairly big drop ($450/sf vs $650 last year). The buyer apparently just moved from china 6 months ago and does plan to live in it.

      That said, these bigger homes in the area tend to sell at a discount on a $/sf range. But that will be a comp that most people in the area won’t want to see. Two places on the same street sold last may for $900/sf and $650/sf.

      Most people would list my home around $1M, but at that $/sf it would be $815k (which is still higher than it’s worth).

      For the most part prices in this are are still ridiculous and on par with last year, but there does appear to be some downward movement. Very few people who actually live in this area could afford the payments for a home 60% of what they are priced at. Either these prices will come down hard over the next couple of years or the makeup of this community will be utterly changed from middle class to very wealthy.

  6. John Apostolatos says:

    “But sellers are not wanting to price their homes right.”

    What I am personally seeing on the ground is that sellers are trying to find a bag holder first and see what happens. If no one bites then they lower the price a bit, but after 90 days on the market buyers smell blood.

    Unfortunately that’s human nature, sorta like former beauty queens in their 40s and 50s who are looking for Prince Charming, simply because they listen to their social media friends that they deserve everything and “should not settle.”

    Home owners are acting the same way by listening to their agents, until both groups end up lonely or bankrupt.

    • crazytown says:

      Florida, every single house has a price reduced status, but most of the price reductions are like $2k. It’s not moving the needle yet. I see houses on the market 100+ days now though and my only thought is mold, water damage, strange smells, bad foundation, or something else very wrong. In reality it’s probably just morons hoping to get that bubble price after the bubble is long gone.

      Side note: Developers keep “developing” yet quality of life continues to go down. Maybe having just 1 more strip mall with a grocery store and chain quick-casual restaurant will make everyone happy. Never mind the 90% abandoned strip mall over there, that one doesnt have a fancy faux-stone facade. What we need is to mow down some more trees and flatten the land to pave over.

      • Heron says:

        Too many areas are a collection of strip malls masquerading as a city or town. We are so over retailed its absurd.

        • Cookdoggie says:

          True. Today we drove to our favorite Subway for lunch…which entails driving past another Subway along the way.

      • Lucca says:

        You’re spot on about the morons. In the area I’m looking at, everyone seems to think their home is worth at least $400k, when two years ago it was priced at $200k. Many homes are sitting on the market for over 100 days with little or no price reductions. I can wait it out, but it’s going to be interesting to see how long this seller denial lasts.

        • Einhal says:

          In Florida, people seem to be convinced that because of permanent “work remote,” that there will constantly be a steady supply of people with New York and D.C. salaries migrating to Florida such that prices can only go up.

          People said similar things back in 2007 by the way.

        • Phoenix_Ikki says:

          I challenge your Florida “this time is different” thinking and one up you on SoCal (LA/OC/SD) version of “this time is different + this area immune + it’s the weather” mentality. I have a feeling Florida version is much more tame by comparison

        • Gattopardo says:

          Phoenix_ikki, you must travel in my circles. I hear that rationalization nearly daily.

        • Jon says:

          Home prices are set ar the margins
          People who don’t have to sell won’t sell.
          But some people may he forced to sell and these sales would fix the price of other homes in the neighborhood

      • Base Camp says:

        Some are Ian causalities.

    • Nathan says:

      “Home owners are acting the same way by listening to their agents, until both groups end up lonely or bankrupt.”

      Or, lonely AND bankrupt…at least they have each other, even if its a pyrrhic “togetherness.”

    • INSdude says:

      Please point out on the doll where the female hurt you. Every comment you make always has some sort of demeaning slur towards women.

      You are right about one thing, women should not have to settle for you!

      The ex is probably glad that she’s finally rid of you and your attitude.

    • Nissanfan says:

      Spot on. I keep seeing those price reductions, “contingent”, “off market”, “back on market”, “new listing” for the same house over and over. Hoping some desperate buyer will go for it. Just shows how desperate listing agents are for that commission.

      Just price the house fairly and move on with your life.

      • MussSyke says:

        How do you fake a contingency? Because there is this turd of a McMansion in my area with a view of Costco and a road two feet from the front door whose owners were too absurdly greedy that they couldn’t even unload it during the times when anything sold at any price. Now I’m expected to believe they magically found a buyer in December that is going to pay above their most recent asking price!?!? Last time they did this – about six months ago – they came back with a higher price than their most recent listing. And what kind of lowlife realtors are they working with?

      • crazytown says:

        Realtors are going to have to work a little bit. The days of signing up a seller and the house being under contract in 1-3 days is over. Let’s see how many realtors are still realtors in a few years or even months.

        (Oops, I forgot the pretentious registered trademark sign that you are supposed to put after saying the world Realtor)

    • Z foxworth says:

      Lot of wisdom is this statement. Well said. Couldn’t agree more!

  7. Bobber says:

    The older homes are really a bad deal at today’s overpriced levels.

    Not only do you have renovations to update the home, you have problems from mold/mildew, window issues, roof and gutter work, cement/driveway issues, overgrown or unsightly landscaping, electrical plumbing, etc.

    The initial purchase price breaks your back, the other issues bleed, and the then the dropping home value and job change puts a nail in your financial coffin. In 5 years, there will be lots of people crying in their beer, wishing they never watched HDTV, surfed Redfin, or heard of AirBnB.

    Renting a home or apartment is a magnificent idea at this time.

    • El Katz says:

      New homes are a worse deal. They’re made of cardboard and plastic.

      • Halibut says:

        Let’s staple Tupperware to the outside of new homes and see if people are stupid enough to buy it.

        Yup. Barnum was right.

      • crazytown says:

        You ever see the fit and finish of some of these gigantic multi-family complexes going up? I hesitate to even call it fit and finish.

        Not to worry, prospective residents are dazzled by the granite counters and the vinyl flooring (Errrr, I mean wood)

        • 91B20 1stCav (AUS) says:

          crazyt – over 70+ years, I never fail to be impressed by the sheer marketing power of cheap, and soon-to-fail, flashing lights on sticks…

          may we all find a better day.

        • Lynn says:

          That’s *Luxury* vinyl tile. Hahahahaha…

    • Mark says:

      “The older homes are really a bad deal at today’s overpriced levels”

      I don’t know about that …… I wouldn’t go near one of these desperation new home builds – just imagine the corner- cutting the builders are doing on these stapled together gems as they try to unload .

      I’d take a well-built older home in a second.

    • Digger Dave says:

      Tradesmen here. Just yesterday I had a long time client question my billable rate. He owns several apartment buildings (where he has jacked rents up with the pandemic above what his working class tenants have seen in earnings increases…there’s no secrets here, these tenants tell me everything!). My rates are raised as needed, based on what my real costs are. I said, “that’s a 2011 work truck sitting outside that won’t pass inspection next time around. It used to be a less than $40k truck and now it’s replacement (which I’ll note does not have much technological advancement on the old model) is $60k”. He said, okay I understand.

      FYI work is not slowing down for me. On the residential side I largely stay out of new construction (which makes me an oddball since everyone and their brother was chasing big money). But their work is slowing down. And while they were ignoring existing clients I have been picking them up. And as things slow down I’m seeing many more subs available to handle the increased work load.

      This ain’t my first rodeo – third boom and bust of my working career. I’ll take slow and steady any day.

    • Old school says:

      I just read on politico that we are at a 50 year high on apartments under construction. Where I live about an hour from Raleigh residential single and multi-family is booming.

      Tech employment in Raleigh has been up 22 months in a row. If we crash land, there are too many projects underway. State has gotten very business friendly the last decade and went to a flat income tax and keeps chopping rate. It’s under 5% now and going lower I think to 4.75%.

    • sc7 says:

      My coworkers who have recently gotten into bidding wars for apartments less than 1/2 the size of my house, while paying 30% more than my mortgage, would disagree.

    • Swamp Creature says:

      A couple decades ago I visited a new retirement complex of single family homes in the Boynton Beach, Fla. The home of the relative had just moved in. Every single door wouldn’t close properly. The cabinets were all mounted on an angle and the doors wouldn’t close. The whole house looked like it was built with cardboard. I couldn’t believe that anyone from NY would move down to Florida and buy a piece of crap like that. Most of the houses in Florida are built just like that one.

      If you take Amtrac down to Fl and look out the window. All you see is one slum after another.

  8. Jeff B says:

    Builders in NW Montana are still fully booked for the entire summer. I called 10 concrete foundation contractors and only 3 returned my call. Their quotes are still high. Maybe by Fall 23′ things will slow down here.

    • jefrodd says:

      You have 10 foundation contractors in NW Montana? I was a custom home builder in the PNW for 30 years and I wasn’t aware of any “foundation contractors” in my area. We always did our own foundations.

      • Prince Gbanga says:

        Two words: frost depth.

        Coastal Washington frost depth is zero inches. Literally.

        — your local neighborhood Nigerian Prince

        • jhrodd says:

          It’s 18″ actually in my County -Western WA. Most of our foundations are on steep slopes so they’re a lot of work, but not exactly rocket surgery.

        • Prairie Rider says:

          In Minneapolis, the rule of thumb is 48 inches deep for support.

          Twenty years ago, my wife and I built a new front deck and stairway to our home. Rented a one-foot wide post digger, and set up a few cement holding tubes four feet into the ground at the deck’s perimeter. Poured the cement columns inside the tubes and built the deck on top of them. So far, so good.

          Older homes need maintenance, but if the foundation and framework is in good shape, it’s a good option. Most of the homes on my block are a century old, or close to it.

  9. OutWest says:

    Unless Powell caves to political pressure as he did under the previous admistration, I think this summer will be a blood bath for RE.

    From what I read at the time, he was directed to lower rates or be fired…leadership at the time wanted negative rates. Could happen again.

    • Einhal says:

      Yeah, well, that makes him a coward. He should have said “If you want to fire me, go right ahead, but my name will not be on what you want me to do.”

      • Pea Sea says:

        That’s right. And it doesn’t bode well for his alleged courage in the near future if anything at all shows signs of breaking–even things that should break.

    • Harrold says:

      Powell showed his strength when he tightened 75bp right into the election. The dems must have been screaming, but he remained on inflation watch.

      I don’t know what Trump had on him. Perhaps he was convinced the covid lockdowns were a severe enough deflation event that he needed to accomodate.

      • The Real Tony says:

        Interest rates fell one year before Covid-19 hit when Trump was president. I always thought it may have had something to do with Trump’s real estate holdings.

        • 91B20 1stCav (AUS) says:

          TRT – referring to the previous executive’s non-blind-trusted preexisting ‘core’ business, nay? (…when everyone’s interested, how could there possibly be a conflict?).

          may we all find a better day.

      • Harvey Mushman says:

        He caved into Trump before the whole Covid pandemic.

        • Swamp Creature says:

          Trump was and is an economic illiterate. This inflation started on his watch. Powell should have told Trump to go pound sand and kept increasing interest rates. We would not be in the mess we are in now if he had done the right thing back then.

          And what did he do to “Drain the Swamp??? absolutely nothing.

    • Phoenix_Ikki says:

      Your comments…just wow…sort of reminds me of comments from ZH or housingbubbleblog…just wow

      • John Apostolatos says:

        You seem to be rather short on historical knowledge and a basic awareness of how politics works.

        Apparently you forgot when Bernanke went to congress and decaled “we will not have an economy on Monday” unless TARP was approved and he stuck the taxpayers with the bill that the banks should have paid. Same story with Powell.

        When banks and businesses need to create panic and get bailed out this is how they do it.

  10. Josh says:

    There is a house in the Seattle area that was listed for just under $1,000,000 that the seller took off in the fall. It is now listed for rent for just under $4,000. Purchasing that house with a 20% down payment would have made the mortgage close to $6,000. Why would anyone tie up $200,000, pay an extra $2,000 a month, and have to perform the maintenance themselves? Waiting until the calculus makes more sense to buy seems to be the best move.

    • Phoenix_Ikki says:

      Because math is hard and greed is easy

    • Gattopardo says:

      You’re assuming they only put down 20%. With an all cash, that’s 4% gross. Mix in the tax benefits, and a pinch of hopium that someday it will be worth a lot more and/or generate a lot higher rents and POOF, you got someone thinking it makes sense.

      • Beardawg says:

        Gattopardo & Josh

        You are both pretty much right. Even with a cash purchase (as you (Gattopardo) state – the margins are dismal. For SFH rentals, this S*** needs to drop 60%+ and/or rents need to go up 60%+. I fear the era of the SFH rental is a goner.

      • Pea Sea says:

        Very few people who actually have a million dollars in cash will want to tie it up in a house that *may* throw off four percent, in a visibly sinking real estate market, when they can get four percent risk free in Treasuries or CDs. Neither of which will call them at 3AM with a plumbing emergency.

      • Lune says:

        It still doesn’t make sense. 4% gross is strictly on the purchase price. You haven’t factored property taxes or maintenance. Yes, they get a tax benefit, but if you’re renting it out, it’s not your primary home, and so the amount of depreciation you can take each year as a passive loss is limited. And that doesn’t include the hassle factor of being a landlord (something that first-time landlords severely underestimate).

        All this for a *possibility* of capital gains in a few years, with a strong *probability* of significant capital loss in the short term? You’d be better off buying some dividend yield stocks currently down on their luck; your dividend will be higher than 4%, your hassle factor will be a lot lower, and your chances for capital gains are probably the same (if Powell lowers interest rates and/or stops QT, the stock market is just as likely to go up as real estate).

    • Jdog says:

      There is a difference between investing using real numbers, and having the unshakable religious belief that RE is the holly grail to wealth.
      For one person to make money on a deal, another person has to lose. I can remember a time when everyone understood that and behaved accordingly.

      • VintageVNvet says:

        guessing you did not get the memo re: win win win JD…
        Better luck next time, or, more in tune with reality, better actually that pre-nup, ” pre contract due diligence,” etc., etc.
        Reality is NO ONE needs to ”lose” in any contract for RE sales or any other type of contract controlled transaction;;;
        IF<<< and only IF WE, do the due diligence and either sign a contract that is good for all parties, as some have done for ever,,, or just stand up and walk away, as some singer suggested in the last few decades.

        • Jdog says:

          What the memo actually said is there is really no such thing as win/win.
          If there were, we would not have worst wealth inequality of the developed nations. When 10% of the population own 70% of the wealth, you have a whole lot of win/lose, and very little win/win.
          The system is designed to keep the plebs making payments their entire lives while accumulating very little real wealth. What wealth the do amass, is usually eaten up in medical expenses and inflation in their final years.

    • Swamp Creature says:

      Josh or any Seattle residents

      I checked with to see if the house I lived in in Seattle in the early 70s was still standing. It was on Capitol Hill, on Summit Ave E. From the street scenes I couldn’t recognize anything. What the hell happened to that neighborhood. It looks like is all Apartments now.

  11. David Hall says:

    SW Florida homeowners have been putting hurricane damaged houses on the market. Probably some flood damaged cars at some auctions. There are waiting lists for roof, lanai, and other repairs. The local hotels are full. Active listings in my area are the highest in months. Vacant lots remain vacant. Plenty of land, not enough skilled workers.

    More tech layoffs in the news. Wayfair cut a thousand and Google cut ten thousand.

    • Harrold says:

      Don’t let these overhyped tech layoffs fool you. Tech companies do layoffs every year, while the left hand is hiring thousands as fast as they can. They are constantly trimmin off failed initiatives and trying new ones.

      Keep watching wolf’s consumer spending articles. That’s all you need to know the economy is running fast, for the time being at least.

      • SWE Josh says:

        Harrold, these layoffs are different (this time it is different?!?). As you said many tech companies (most famously Amazon) do fire employees every year based for performance reasons. However, the numbers this year are much higher and they are combined with hiring freezes. Many companies are giving out 4+ months of severance so I don’t see them starting the hiring cycle again at least during that time if not longer.

        But I do agree that until the layoffs spread to other industries, the spending number won’t suffer too much as tech is only a small part of the economy.

        • Cas127 says:

          The BLS has monthly net job changes for every metro and state.

          Not company-level granular, but helpful in determining if layoffs are mere churn or trends.

        • Lynn says:

          However, tech seems to be a huge percentage of second home online cash buyers, from what I can tell.

      • 728huey says:

        As Wolf mentioned in an earlier article, those announcements of layoffs represent reductions in the global workforce, yet maybe a fraction of those jobs are American workers. That would be the equivalent of GM announcing they were laying off 20,000 people in their global workforce, yet if all those jobs were in China and Mexico it would have no effect on the American workforce. Also, people forget many tech firms like Google, Facebook, and Twitter are media companies that rely on advertising to pay their bills. Yet with inflation going through the roof, it has sucked up all the ad budgets for a ton of companies, and as a result this income has dried up for these “tech” giants.

        • Jon says:

          I work for a tech giant like Google.
          Also I am an ex Google employee.

          I have seen it many times in many big companies..
          If company is laying off employees to cut cost they won’t cut much in cheaper location e.g. India
          Most of the cut happens in usa as labor is expensive.

          Also companies like Google lay off people even during good times for many reasons but they are smaller in number.

    • All Good Here Mate says:

      Shouldn’t have moved here if they couldn’t handle the weather. That storm was a joke. Two counties got a bath. Big deal.

      ‘Probably putting some flood damaged cars on auction’… really, you think? Nah. No way. Hmmmm. I have seen some of them! And you know, I looked and didn’t see anyone forcing me to buy a flood damaged car… so I didn’t.

      ‘Plenty of land, not enough skilled workers’… Seriously, you must be related to carpet-bagging Rick Scott. I take it you want a few more million to move here in the next couple of years. And don’t start this everyone is from somewhere crap, I’m multigenerational.

      That statement epitomizes everything that is 100% wrong in Florida. We sell a dream of beach living, seeing a cartoon character mouse in the afternoons and ‘freedom’ and free golf for the rest of one’s life because why not, but meanwhile a drive that took 20 minutes two years ago takes an hour now. But by all means, let’s get some ‘skilled’ workers for more houses for even more people to move here, to cry foul about storms ultimately to bilk FEMA cause their SW Florida crapshack is missing some Spanish tiles.

      • Dsail says:

        The bubble has popped in Florida. More northerners will become halfbacks because insurance is unaffordable. Not because of hurricanes (new and updated housing stock did well), but because of the roof replacement fraud which the Republican controlled legislator refused to fix. I feel like I was the only one in my neighborhood that actually paid for their replacement roof. A name stormed starts at 35 mph. Once one person in your neighborhood wins a lawsuit everybody wins. Insurance companies pay attorney fees for both sides. Major law firms were vertically integrated Adjuster to contractor. A huge business. Now homes are discounted for a roofs which easily cost $50k and take more than a year to get. The DeSantis leadership sold out to two election cycles. 2024 will be interesting for the climate change denier.

        • David Hall. says:

          Low lying areas of Fort Myers and near Estero Bay flooded. Older houses were not built on stilts, nor were they built on an additional six feet of sand. Many of these older homes have been abandoned. Some trailer parks are ghost towns. No car in the driveway, nobody home. This also happened in New Orleans after Hurricane Katrina flooded the lower neighborhoods. People moved to Houston.

          After Hurricane Andrew in 1992, Florida amended its mobile home building code. The newer mobile homes are sturdier. Thinking older homes are better might be a blueprint for disaster.

          All across America the number of new homes under construction is at high levels, especially areas of high population growth like Florida.

      • Cytotoxic says:

        Cry some more. You don’t have a right to freeze your state/locality in amber as you remember it through nostalgia goggles. Long commute times? Expand the highways, pay for it with tolls.

  12. George says:

    Preface, I believe it’s a bubble. But geez is the NE not believing it and still buying at these prices. Too many idiots in my opinion.

    Very tough to stay patient. But I guess it’s not really patience when our family can’t afford a house.

    • Clete says:

      @George: FWIW, the first two houses I bought were both foreclosures following runups, then crashes. Waiting a little longer might get you into a home you can be comfortable keeping.

    • El Katz says:


      Is it that you can’t afford a house or you can’t afford a HGTV house?

      Before you snap and start with the ok boomer stuff, I’ve read several articles regarding the refusal of young people to buy a home that isn’t TV show ready…. with all the amenities they desire – which greatly reduces the “affordability” as Formica is far less expensive than solid surface. As such, it’s not a “geezer” thing… it’s a legit question.

      Our first home was a POS. That’s how I learned how to fix stuff. I lived in a neighborhood of tradesman and we all helped each other fix up the houses. I didn’t know jack about most, if not all, construction trades, but I could be a helper and translate that learning into fixing my own. A HVAC tech let me use his discount to buy the furnace and A/C equipment… my brother in law (a body man) did the tin work. I set the units and pulled the wire. An electrician neighbor checked the wiring. The gas company did the final connection. The HVAC guy did the startup. Baby boy’s heat rash cured over a long weekend.

      • VintageVNvet says:

        Good One EK: (as usual for your very helpful comments on
        Had our tankless electric water heater go out recently, and the neighbor union electrician down the block came and did his magic. When I tried to pay him, he said nah, just bring me a 12 pack… Of course I found 2 cases, eh
        Been trying for years now to help folks understand it’s NOT going to be how much gold or anything, even bullets that will get you through what’s obviously coming to everywhere USA and GLOBAL,,,,
        it’s the LOCAL COMMUNITY…

        • andy says:

          Maybe wife does not let him buy beer. So that’s his workaround.

        • 91B20 1stCav (AUS) says:

          VVNV – this. Certainly not at Florida levels, but have been working to impart (with varying degrees of success) the wisdom of your last paragraph to the numbers of SilValley refugees moving into our rural NorCal area. Our recent ‘unprecedented’ (only if you are under 35 or have moved here in that period) three-week storm siege has given many ‘Community religion’.

          (‘Rugged Individualism’ only seems to flourish when founded on a society of general cooperation…).

          may we all find a better day.

        • Gooberville Smack says:

          My grandfather was a German prisoner of war in WWII. After the war they had to rebuild Germany and they all worked together. Nobody was sitting in a bunker with gold and ammo protecting their tomatoes. When he died back in ’91 there was a line as far as you can see to pay their respects. Does post WWII Germany qualify as a collapse?? Doomsday preppers need a serious reality check.

        • Jdog says:

          I agree with what you said, but with a reservation. Where you live is going to make a huge difference if there is ever social breakdown. The composition of your local community is going to make all the difference. If your community is basically comprised of moral and ethical people, you are going to be OK. If your community is comprised of people with questionable ethics, and already has crime issues, then you are going to have a much harder time. Desperation causes people to abandon civilized behavior, and places with lots of population, and little resources are where desperation is going to be very bad.

      • Pea Sea says:

        “Before you snap and start with the ok boomer stuff,”

        Sorry, but you’re asking for it with these out-of-touch fantasies. It’s not 1955 anymore. All houses are astronomically expensive, even the small ones that need to be fixed. Even the small ones that need to be fixed and are in neighborhoods where you’re likely to be shot on the way to Home Depot.

        • Flounder says:

          Yes, it’s not that I don’t WANT a fixer-upper, more so that I refuse to pay nosebleed prices for utter garbage in order to cash out some boomer’s retirement.

          Around here it is $600k for a dumpy 3 bedroom ranch last updated in 1980. Median household income is $120k. Nice 4 bedroom colonials are $800k. Doesn’t add up.

      • Lune says:

        Ok boomer…

        Sorry, just had to say it :-) The reason those amenities are now becoming commonplace is because the primary cost of a house these days is the land and the construction cost. The actual fixtures, be they flooring, appliances, cabinets, etc. is pretty small.

        The difference between all those “extravagant”, tv-worthy fixtures vs plain formica and Sears home appliances is maybe $50k. If you’re buying a $200k house, then yeah, that’s a significant discount. But if that house costs $1mil (due to location, land value, and construction costs), then tacking an extra $50k for nicer fixtures isn’t really breaking anyone’s bank, and you might as well if you’re going to be dropping a million on the place anyway.

        It’s the same reason why high end options are standard in expensive cars and are optional in cheaper cars: the cost of the option is the same, and in an expensive car, it’s a much smaller proportion of the overall cost, so most people would rather have it.

        That said, IMHO, my main beef with all those shows is that it makes rehabbing a house look easy, and so lots of young people think they’ll buy a rundown house and turn it into a TV-worthy place with no problem. I actually spend most of my time convincing my friends *not* to pursue a home renovation, and just buy a house with everything you need. Otherwise it’s like “Really? You have 2 young kids and you think you’ll be fine having half your house unusable for 6-12 months while you knock out walls and have contractors running power tools all day?”

        Back in the day, I used to watch This Old House on PBS. In that show, Bob Vila would take *one* house and do a gut renovation for a whole season, going through every part they did in detail. Nowadays, those execrable HGTV shows will take 3 or 4 houses and do full gut renovations in a single episode, conveniently skipping the phase where the owner of the house can’t relax or have any peace and quiet, or even has to temporarily move out because the house is basically unusable. Is it any wonder people who watch those shows thing a “gut reno” is something that they can just snap their fingers and be done with in a couple of weeks?

        • 91B20 1stCav (AUS) says:

          Lune – well said. Have found (from miserable personal experience) these shows responsible for unimaginable domestic strife thanks to their utterly unrealistic presentation, esp. from those near and dear who have never hefted a hammer or run a saw…

          may we all find a better day.

  13. Eastern Bunny says:

    In the area I follow here in SoCal
    There were 61 pendings through January 16th last year – when mortgage rates were in the low-3s and we were in full frenzy mode.

    Through the 18th, this year there are 62 new pendings !
    I havent done a detailed analysis yet but a quick glance shows that they seem to have sold at all time highs prices +/- 5%, this is the data.

    • Here it comes says:

      My area in socal is similar, but cracks are starting to appear. See how many of those pending homes fall through and come back in the market.

      Also, I think we are so early in the stage of the housing turn that we are just getting a lot of dip buyers. Prices down a bit, they have some money, rates coming down a bit, they’re jumping in thinking prices might drop a small amount over the next year, then off to the races again.

      I’m quite confident they will pay a big price for getting in right now.

  14. Alex says:

    Until job vacancies disappear (markedly drop) there will not be a bunch of unemployment….the demographics just don’t support it. 10K boomers per day age into social security and a lot of them dropped out of the workforce and aren’t interested in coming back! Obviously I’m talking the well off seniors but they are the ones whose positions aren’t getting backfilled by younger, less experienced, cheaper people.

    In 15-20 years there will be a glut of 2nd and 3rd homes for sale as boomers die out, before they die I think they retire. That many people leaving the workforce at one time then dying?! Welcome to the new normal.

    Earnings per share will drop in the recession to be sure at salaries bite , input prices spike, and consumers pull back…but I don’t think we necessarily see an employment bust ….at least not for full time middle to upper middle class workers.

    • Cas127 says:

      Really, the Boomers should have long since dumped a lot of homes on the mkt (earliest Boomers hit 65 in 2011 and 67 in 2013) but for some reason the Silver Tsunami never really occurred.

      Would like to hear theories why.

      • Wolf Richter says:

        Why would boomers “dump” their homes on the market? Boomers are now between 57 and 77. So let me give you a clue, per SSA actuarial tables:

        “Life expectancy at birth” is not the same as “life expectancy at 77.” You’re thinking about the prior generation. And yes, they are selling, or their survivors are selling.

        If you’re 77 today, one of the first and oldest boomers, your remaining life expectancy is 10 years for a man and 11.7 years for a woman.

        If you’re a mid-boomer, you’re now 67, with a remaining life expectancy of 16.7 years for men and 19.1 years for women.

        The late boomers, now 57: men have 24 years left, and women 27 years. They’ve got 10+ years of work ahead of them.

        Why would anyone with this much life left dump their home on the market? Where would they live??? On the streets? Well, lots of boomers already live on the streets.

        Boomers’ turn will come eventually, but not yet. Maybe in 15 to 20 years, you will see the large wave of boomers selling homes that you’re dreaming about.

        • VintageVNvet says:

          SO true, as usual Wolf:
          Reminded me of when I first looked at the actual actuarial tables ten years of so ago and was absolutely Schocked, Shocked I tell ya, to find out that even with all my challenges, I had to put up with this ”VALE OF TEARS” for SO many more moons…
          Tried to stay out of trouble after that, but, being a guy, I can only try knowing full well it won’t happen..
          Please Keep up the good work!!!

        • cas127 says:


          People used to retire and downsize.

          This is not a radical concept…it was the consensus prediction 20 years ago.

        • Wolf Richter says:


          But that’s fake math. If you downsize, you sell one and you buy one, and there is no impact on the overall market, other than churn and Realtor commissions coming and going. It’s only when you sell and don’t buy that you add a unit to the market. This happens when you sell a vacant home, vacation homes, second or third homes, etc., of if you move into a nursing home or die.

        • Trucker Guy says:

          “77 with 10-12 years left.”

          Good lord are people actually this healthy now? I’m still young by this metric, anecdotally; I’ve never had any family member live past 70 that I’ve known. Most make it to 65 and at that point they’re likely wishing they were dead with all the ailments and diseases they’re dying from. All the others die between 45-60. I’ll be hitting 30 very soon and I’m already feeling the collapse compared to just a few years ago. Genetics are really something else. My parents are in their 50s and they’re both living with multiple diseases and major health problems.

          I guess social security at 65-67 isn’t a scam after all. :Shrug:

        • Prairie Rider says:

          Hey, I’m that 60 year-old boomer. Body’s been rebuilt a few times, but still riding fast enough every day to stay ahead of Father Time. He will catch me sometime, but until then …

          “You got to keep on moving to keep on moving.”

        • Doesn't matter says:

          Thank you Wolf! I’m a 70 year old in California who occasionally thinks about ‘downsizing’ but when I look at what that means and I realize it make little sense. I have a 3 bedroom 1400 ft sq house in a quiet neighborhood and pay a little under 4k in property tax. I have no mortgage. The only reason I consider downsizing is I have a pool and at some point the maintenance will be too annoying. Other than that, where am I going to go and pay less in property tax? If I have 18 years left I might as well stay put.

        • Anthony A. says:

          Trucker Guy, I’m 79 and still playing good golf twice a week. And I also walk about 10,000 steps per day. And my foursome is full of guys over 70. Yeah, we as a group are doing pretty good.

        • Cytotoxic says:

          Wolf: both you and even more so the person you are responding to are not accounting for the leaps in radical life extension we are probably about to experience. Death will be forestalled for a long time for a lot of people.

        • Kevin says:

          I mostly agree. But people in their 80s often downsize from a larger home to a smaller one, or move into a nursing home or their children’s home where they are taken care of for the last few years of their life. So only slightly more houses come onto the market for the downsizing. But also, more larger houses become available and fewer one level ranches or condos become available as people downsize. So the larger (more overpriced) houses may be affected sooner.

      • Sams says:

        It may made more sense to load the asset, real estate, with debt than sell it.

        Take the money, spend the money, continue to live in the house and let the bank take the risk on future price.

        As long as cash flow is managed till the end, going down underwater in debt is no problem. Debt stay in this world…

        • Jdog says:

          “As long as cash flow is managed till the end, going down underwater in debt is no problem.”

          LOL That is a huge stipulation. In the case of home ownership it requires 30 yrs of no serious economic calamity either personal or otherwise. The past 50 yrs have not been normal, and I would not bet the farm on the next 50 being similar.

        • VintageVNvet says:

          IN very very clear FACT,,, there is NO ”normal” anymore than there is any ”average” ,,,
          Outside of statistics
          OK, also outside of the dismal science that is anything but a ”science.”
          Tea leafs are probably more accurate AND precise than either!!! LOL

      • Bobber says:

        There are lots of reasons people aren’t downsizing:

        -Assisted living and senior complexes are overly expensive. Staying in your home actually saves money. Plus, for many people, it’s like putting one foot in the grave.

        -Stress and exertion of moving.

        -Extra space encourages visits from family and friends.

        -Unused space doesn’t really cost anything, unless housing prices are in a long-term downtrend.

        -House cleaning and landscaping services are reasonably priced and readily available.

        -Snow-Birding is very popular with many people.

    • Alex says:

      Like I said…”in 15-20 years there will be a glut”. The heirs will NOT keep all their parents’ homes. The upkeep and property taxes I think would be prohibitive. They will sell at any cost to get the cash.

      The question becomes who will the buyers be? Who will the new cohort be that needs the same number of multiple homes and have the ability to pay for them? Do you expect the dollar to still be strong and for interest rates to still be low to facilitate new buyers’ mortgages??

      20 years is a long ways off. Maybe starting LAST year there was a another baby boom and we’ll have new buyers for our homes and our parents’ homes in 2045!!

      best of luck to us

  15. Slick Willy says:

    Accepting these data fully, there must be striking regional factors at play.

    Here in Philly, prices have moved down some but not a lot. I went to an open house the other day at what seemed to be a fairly priced 4 BR in the area’s best school district. Well, I attempted to go but the place looked like a Grateful Dead concert. People on the front lawn, the back lawn, leaning on the trees, a parade going in and out. It went from active to contingent in 24 hours.

    When I compare this to SF, it must have to do with the employment outlook. Our biggest industry is really healthcare – which will not be laying off anyone anytime soon. So here the market seems relatively strong, at least for now.

    • SocalJohn says:

      Good luck going forward.

    • McGruber says:

      Same here in Portland, Maine. There are some price drops, but those are the late 1800s houses that have never been rebuilt, seemingly hoping to attract a flipper. Anything turn-key is still a race to see, race to get an offer in, etc etc and can go for 15% over asking, even though the asking price is still up 25% from 2021. It’s like interest rates never rose from sub-3%. I’m not sure what’s going on, but continuing to rent makes more sense than ever to me right now… despite never being more ready to buy.

    • Randy says:

      Per a Google i just did, per Redfin:
      Philadelphia home prices, December 2022, down 3.9% year over year. Median price 245k.

      I’m surprised the median is that low.
      Its not cheap to me for sure.

      I rent in eastern Washington State.
      Spokane Valley median sold price December 2022 at 390k. Coincidentally also down 3.9% YoY.

      Philadelphia has more humidity than Spokane (i lived in Ohio and New Jersey) but otherwise I probably would give Philly the edge over Spokane weather wise. Philadelphia only gets about half the amount of snow, and definitely has nicer falls.
      Spokane doesn’t get many drenching rainfalls though which is a plus. Again less humidity in the summer but last 2 years we have had 19 days with highs at 100 or above and over 90 days with highs 90 or above. Per accuweather website. Last six years summers on average hotter and wildfires throughout the Northwest.

      • Clete says:

        @Randy: Is the smoke really bad during the fire season? We were in northern Idaho a few Augusts ago and could smell it even that far east.

        • andy says:

          Smoke in San Fransisco was pretty bad for few days with forest fires around the area. This also happened during covid lockdowns when city was totally empty, not even cars around.
          Wolf posted here few pics that looked like from Mars (red planet). But pics do not really capture it. With empty city, smoke, and red sky it was like from Twilight Zone.

        • 91B20 1stCav (AUS) says:

          Clete – always remember that fires in the wild have little respect for state lines (former Newman Lake resident, here, recalling the fires of ’90…).

          may we all find a better day.

        • Trucker Guy says:

          North Idaho gets the smoke from WA, OR, NorCal, ID, and some from BC. The only place worse for wildfire smoke is Montana. Especially West of the divide when the smoke gets trapped endlessly. This last year wasn’t too bad but normally it’s an endless blanket from July to September.

          Granted I live in the area so it’s more of a comment to my stupidity but I have no idea the allure of North Idaho.

          The people are mostly all smarmy yuppie far right militant Californians and the ones that aren’t are bitter natives who are mad at the world, the winters are rough, the roads are horrible, the utilities suck outside of the CDA area, housing is utterly detached from local wages and rents are like living in downtown Atlanta, local wages suck, taxes and expenses are high, CDA has outgrown the infrastructure, and there is a month or two out of the year where it isn’t cold or covered in smoke.

          I guess it’s scenic. That’s about it. You’re much better served by living in Washington. You’ll save a mountain of money. Unless you just have to have guns, there’s no reason to waste your time living in North Idaho, other than that, Idaho is pretty crappy. I guess it’s also a trendy place to move to.

        • Randy says:


          Depends on the year of course.

          As someone already responded we get it blowing in from all directions.
          California has had bad wildfires for many years. More recently western (southwest especially) Oregon and British Columbia been getting them (2 or 3 summers ago BC had 570 or so fires gone at one time… unfortunately winds here were out of the north … unusual). North Central Washington state consistently has bad fires. Last few years the north cascade fires have blown smoke into Seatgle… not just for a day or two. I’m sure this made real estate take a hit.
          Really, you’re joking ?

          Nope. I like the weather in Skagit and Whatcom counties (north of Seattle 50 to 100 miles) but now am reluctant to move there. Homes priced for perfection. But perfection (the rivers there didn’t just start flooding) has is no where to be found on this planet.
          Now they too have wildfire concerns though still less than I do here in Eastern Washington.

          No major fires here recently.

          There was one before I moved here (been here 22+ years) called (???)
          Fire storm. Through the Dishman Hills. Some houses lost. Definitely a big deal.
          Guessing maybe early 1990s ?

          Had Ice Storm in 1996 here, I was living near Seattle then. Really bad ice storm.
          Iced up tree branches whoch took out lots of utilities. People w/o power for week or so I guess.
          I’ve been lucky, knock on wood, Avista has been quick to get my apartment complex electricity up and running quickly when power outages occur (12 hours max outage in 22 years ?).

          Dishnan Hills had another fire numerous years ago (10 to 15 ?). Ibthink a few homes were damaged but not extensive. My memory is poor here.
          Lawsuit over possible negligence.

          Smoke varies. From 2000 to 2015 smoke not much of a big deal.
          But last 6 years its gotten worse. A couple years MUCH worse.

          2 years especially bad. Had I believe 4 days in a row with toxic readings… AQIs 300 or above. Orange air. Very limited visibility. Some other days AQIs 200 to 300 again those 2 years.

          Last year not good but not too bad either. Worst AQI was about 230. Just one day. Unhealthy reading.
          Most readings were 60 to 140. Lasted early mid August to mid October off and on. Irritates my sinuses some.
          Smokey, then clears up. Smokey, then clears up.
          Only minor fires near Spokane last year.

          A very small town south of here 50 miles or so, Malden, lost most of its homes due to a fire 2 or 3 years ago.
          That scares me.

          Back to last year…
          But Idaho had 60 fires at one time (was this way thru much of September October timeframe if memory is right) from some fire map I looked at. Central and Northern part of the state. Not sure if any of the fires were really major fires… possibly not. Again fires in the north Cascades just northeast of Seattle and to the east of them (north central Washington). SW Oregon pretty bad fires again last year and California.
          It blows in from all those places wind direction dependent.. who’s the “villain”.
          Maybe Idaho is allowing fires to burn… philosophy let nature do its thing… I dont know just speculation.

  16. JamesO says:

    wolves must have gotten word that Powell is going to power down his little machine that makes interest rates go up. ‘risk on’ trades powering the S&P up … bad news is good news again. lot’s of crap stocks catching a bid. just a few days ago bad news was bad news. somebody winked or did the special handshake. so i think it’s premature to celebrate the big bust of all bubbles. put that cake and champagne or whatever away. when billionaires lean into it the ship does turn.

    • Einhal says:

      Where’s your evidence that Powell is planning on pivoting?

    • Wolf Richter says:

      So the S&P went down for three days, and then it goes up one day and retraces part of the three-day decline, and sure enough, there is another one these comments. It gets really tiring after a while.

      • The Real Tony says:

        Friday is normally a day of profit taking if the market is down for the week.

      • Harvey Mushman says:

        What? No Flame Thrower? You must have been ready for bed when you replied to that comment. :-)

      • JamesO says:

        ok ok my bad! and yes you have said nothing goes to heck in a straight line. gee!

      • Nate says:

        It’s the business news ecosystem. Stocks did x today, let’s talk for 24 hours on what it MEANS.

        Folks would be best off reading some books with their time. I suggest random walk, manias, panics, and crashes, bogleheads guides, and, maybe some stuff looking at Japan, 2007-2008, dot com burst, etc., as that’s that’s the type of stuff you don’t want to be all in.

        Or simply just when you’re making some huge jumps in something and it’s feeling really good and you’re so smart and woo party, fucking diversity.

  17. David G. says:

    Let’s get prices down another -30% to where they were before the Fed started recklessly stimulating the economy and giving away money. There’s gonna be a lot of crying because the gravy train is over. Oh well, what goes up must come down. The party doesn’t last forever — that’s just common sense.

  18. Dr Duration says:

    Re: potential sellers are sitting on their vacant homes, hoping for a quick end to this downturn, or …

    Housing prices may not follow equity performance, but, if the economy is setting up for a recession, later in the year, that implies an extremely choppy and volatile first half of 2023, with Fed raising rates into a period of a political, biblical firestorm with deficit chaos, as earnings and layoffs pace the way for end of year apocalypse, followed, eventually by a bottom in housing.

    A quick end to the housing downturn isn’t in anybody’s bingo cards. We sorta experienced weird dynamics with the pandemic, but I think we’ll see a whole new level of weird in the next 18 months.

    • Jon says:

      Home prices are following equity performance with a lag though

      Home are not more a shelter but an asset and we all know what happened to all assets in last 3 years

  19. 8_mile_road says:

    // Priced right, any home will sell. But sellers are not wanting to price their homes right. //

    If sellers are not willing to price right, the law of economics will help them (or force them) to price right. Nobody will pay for an overpriced estate, unless he/she has lots of money to spend.

    I wish those sellers don’t end up with a negative equity. It happened in 2008 GFC, and I believe it will happen again.

    • SWE Josh says:

      In a previous post I shared that I put an offer on a house at a reasonable price (based on pre-covid prices) that was verbally accepted but then countered in writing the next day so I walked away. That was in July and the house is still on the market. The owners lived in the house 30+ years, just retired and moved somewhere warm. They’ve made a ton of money on the appreciation since they bought and due to prop 13 (which limits property tax in CA) they only pay $6.5k in property taxes a year. With those carrying costs, they can keep holding on to the house until they die and probably not even notice. I wonder how much situations like this are skewing the CA numbers.

      • El Katz says:

        They can keep it with the low carrying costs, but the deterioration in any unoccupied house will punish them. There’s no one home to detect the roof leak, the smell of natural gas, or the fact that the furnace quit, hot water heater burst, or any of a number of failure points.

        I’m guarding a house in FL for my sister while she’s recuperating. I spend hours every time I visit (one a month) doing minor repairs and maintenance… despite having a flock of minions that are *supposed* to do that.

        I can’t wait until she’s back in it or I can sell it. I have no clue as to why anyone would want to own multiple properties.

        • dsail says:

          People who can afford to own multiple properties do. They park some cash and hope for a better gains than the stock market. WS has managed to scoop up 100,000’s of single family properties to rent.

          . The tax code thanks to Mr Trump incentives people to do just that. Public housing policy used to be designed around promoting home ownership for the masses now tax policy is designed around promoting single and multifamily housing and the profits and wealth accumulation for the ruling class. By 2030 we will see such a marked drop in fertility rates due to a one child or no child policy by choice by those young adults trying to pay off their education which for some reason is the only factor of production that you can not capitalize and depreciate. I grew up with 26 first cousins on my fathers side. Now I am looking at my grand daughter maybe having 1 first cousin. Combine that with a stupid immigration policy and in 40 years we may look like Japan. Forty years of declining capital wealth follows lock step with their flat wages, declining population and massive debt.

  20. JoshWx says:

    The housing market is and always will be highly regional. A lot of markets became massively overpriced and completely detached from fundamentals (San Francisco, Boise, Austin, Tampa, Miami, etc) along with dozens of others. It would be nice to see a ratio of median sales price to median household income to gather a clearer picture of just how overextended certain markets are. Older neighborhoods with established infrastructure and stable job markets are likely to fare better than others.

    I’ve heard a few people in just the last week say they are looking to buy a home in the next year (Yup, anecdotal, I get it) and the surge in weekly mortgage applications indicates the market is likely to thaw somewhat as we head into the spring. Interest rates are down *slightly* and employment remains strong, so I’m not convinced ALL markets see housing prices continue to decline into spring and summer.

    • Gattopardo says:

      “It would be nice to see a ratio of median sales price to median household income to gather a clearer picture of just how overextended certain markets are.”

      That ratio is often cited as proof that housing is overpriced. No. Because the buyer of a median house can (and does) have income well above the median income. It’s a nearly worthless stat on its own, and might be useful to compare ratios across regions.

      • Cas127 says:

        Hmm…I don’t why the median to median stat is supposedly worthless.

        If 65% of US households already own (so 35% don’t) then the median income for *everybody* tells you a *lot* in relation to median SFH asking prices.

        If median income is historically far, far behind median asking, who exactly is supposed to be able to afford these homes? Tracking the ratio over time is the *exact* tool necessary to tell when things turned from merely overvalued, to abnormal, to absurd.

        • Gattopardo says:


          Because the median income for an area reflects the earnings of everyone. Everyone. Whether they bought a house or not.

          An example. My dad is retired, earns next to nothing. His house, bought in the ’70s, it worth 5x the national median. His town has lots of people like him, retired, modest income, valuable house. When a house there sells, it sure isn’t to someone like him or most of his neighbors. It’s to someone younger with serious income. So…the area has modest median income, maybe 2x the national median, but home prices 10x the median. This is an extreme example, but it is prevalent to a lesser degree nearly everywhere. This should nearly always be the case when homes have increased in value over time. Well, unless suddenly the majority of owners turn over their homes every year.

          Hopefully this makes sense now.

      • Wisdom Seeker says:

        The median-price to median-income metric doesn’t provide a precise metric of affordability at any one time, for reasons Gattopardo mentioned, but… a graph showing changes in that metric does provide a good perspective on how much affordability is shifting.

        It’s pretty clear recently that MedianPrice / MedianIncome is historically high. Housing IS less affordable.

        (A fancier metric taking into account monthly payments on a Median Mortgage at that Median Price would be even better.)

    • SocalJohn says:

      Ok, so less expensive areas suffer less than the wacko areas. Brilliant.

      • bulfinch says:

        Gatto — I suspect your father is the outlier. The average that most families don’t stay in a house is between 7-10 years. I’ve never lived any one place for 10 years.

      • Randy says:


        Minor quibble…

        But what of all these rich west coast folks that I have read moved to Boise, Austin, Idaho or Montana and chose not to buy a home there.
        I suppose the large majority did buy homes, but those that didn’t actually cause the price/earnings ratio to be understated if these individuals still have very large income due to investments.

        A very common comment is that the “local”
        population has been priced out by the influx of rich folks who mostly did buy homes and drove home prices up beyond their reach. In this case the P/E may be rather accurate but masks the reality of radically changed population segments in the town: if the new arrivals were not included in the calculation the ratio would be much higher.

      • VintageVNvet says:

        Not always true southboy:
        One of the very definitely ”fly over” counties I watch is already down over 50% from peak early 2022…
        Other counties near by not that far down, YET…
        Others we are watching down only abut 5% SO FAR…
        It sure looks like RE markets are not only local,,, but very local,,, eh

    • Wolf Richter says:

      If the price drops low enough, there will be buyers. Right now, the asking prices are still way too high, and sales have collapsed. This is not hard to figure out.

      Purchase mortgage applications “jumped” from multi-decade lows to the low during the lockdown, LOL

      • 8_mile_road says:

        If the price drops low enough, there will be buyers.

        Wolf, I know you live at San Francisco. Using your plot “Bay Area, Median price, SFH, $”, what price range would you say “the price drops low enough”?

        I recalled in 2011, my parents found a deal like this:
        Union City, 1200 sqft condo, 2 bedrooms, 2 bathrooms
        asking price $270K.

        Here is an example for reader’s reference

        This property was sold last sold for $260,000 on Jan 7, 2011. Now, this is the “low price” I was talking about.

        • Wolf Richter says:


          If you want to buy a $270K house today in a mid-size city, you need to move to Tulsa, OK. Nice city, hilly, a big river going through with a 15-mile park alongside it, nice and warm in the summer, biggest bang for the buck in terms of housing in a mid-sized city, imho. I lived there off and on between 1973 and 2000.

          I sold my 1,768-square-foot 23rd-floor condo there in 2000 for $210K (I lost that amount over the next three days during the dotcom bust going on at the time, I remember that feeling vividly, LOL). Beautiful big wide-open condo. When I bought it, I put in red granite slab floor and countertops in the kitchen and the master bathroom. It had panoramic river and hill views west and south.

          It has been on the market for 121 days now (I just checked again) for $309K. According to Zillow, someone bought it in 2016 for $190K. The current sellers posted photos on Zillow. You can still see the gorgeous red granite and the cherry cabinetry I put in. But for Tulsa, that $309K for this beautiful 1,768 sf condo seems to be a stretch today, or else it would have sold.

          Tulsa might still pay you $10k to move there if you bring your work-from-home job with you. That will help with moving expenses.

          That’s the kind of market you need to buy a house in if you want pay $270K and to live in a nice mid-size city (you can buy a lot cheaper stuff out in the country). Silicon Valley or San Francisco will never get this cheap.

        • cas127 says:

          Just to point it out to the peanut gallery (about how bad things can get in RE), Wolf sold a condo for $210k in 2000.

          *16 years later* the same condo sold for $190k.

          Keep that in mind every time somebody says “renting is throwing money away”.

          When you rent, you almost always get a significantly smaller amount of space…for a much, much lower cost.

          Now compare that to all SFH’s ancillary expenses (prop taxes, insurance, repairs) *and* taking a net loss.

          After sixteen years.

          That’s a helluva a holding period.

        • jhrodd says:

          Looked up Wolf’s Tulsa Condo. Pretty nice, but the HOA is $915/month. Yikes! I bought a 3 bedroom Townhouse (one story) in Tucson in Sept. for $250k it has about a mile of open space beyond the walled yard with great mountain views and the monthly nut, is $435 no mortgage just HOA, water, sewer, garbage, power. property tax and insurance.

        • Cytotoxic says:

          “Silicon Valley or San Francisco will never get this cheap.”

          Yes they will if we just get rid of zoning and other obstructions to building stuff like CEQA. Free markets are perfect.

          Also that 270K will do well in Calgary and other parts of Alberta.

      • Harry Houndstooth says:

        Please allow me to convert this to Houndstoothian:

        “All-cash buyers, investors, and second home buyers pulled back massively. All-cash sales plunged by 22% year-over-year, to 92,000 homes (28% of the 328,000 homes sold), down from 118,000 in December 2021 (23% of 513,000 homes sold). In other words, buyers that pay cash didn’t want to buy these overpriced homes either, though they didn’t have to worry about getting a high-rate mortgage.

        Sales to individual investors or second home buyers plunged by 27% to 52,500 homes (16% of 328,000 homes sold), from 71,800 in December 2021 (14% of 513,000 homes sold). They too pulled back from this market.”


        All cash buyers, investors and second home buyers supported the obviously declining market by trying to ‘catch a falling knife’. All cash sales increased from 22% to 28% of sales in a declining market as ample evidence that those humans who were at least intelligent enough to avoid blowing their cash wad on a new grossly overpriced vehicle were foolish enough to throw it into a rapidly declining real estate market. We are witnessing the suction of cash left from the Covid pandemic which is a necessary step before the big decline in the stock markets.
        Individual investors or second home buyers were also sucked into the abyss but only 16% vs. 14%.

        All of these humans:
        1) do not read Wolfstreet
        2) think real estate prices will not decline further
        3) are destroying their chance to buy into what is likely to be an investment opportunity of a lifetime as the bottom is clearly ahead of us.

        Harry Houndstooth

      • Swamp Creature says:

        Two monster homes were just completed about two weeks ago a few blocks from me. They are sitting with no buyers anywhere in sight. They had an open house and no one showed up. This could be an indication that we are moving to 2005/2006/2007 version 2.0. This time it will be the builders that go belly up vs the lenders.

    • Randy says:

      Reventure Consulting provided such ratios for a number of cities in one of his videos in the summer or fall. Some real estate website might have them.

    • Jon says:

      The cheap money was not available regional
      The price increase in last 3 years was not regional

  21. George W says:

    I will never understand how the majority of home buyers qualify for the home mortgages that they purchase.

    Of course, there are high paying jobs in Silicon Valley etc and one can always trade up as their current house appreciates.

    Somehow it would seem that everyone, everywhere can afford a million dollar home? The reflection that I see is not that of capitalism but something else.

    • bulfinch says:

      It is weird…I’m noticing this trend as well. An uptick in inheritances caused by things like the initial Covid surge? Who knows.

      • SWE Josh says:

        Bulfinch, that is an interesting observation. According to the CDC, “excess deaths since 2/1/2020 across the United States: 1,265,751”. On the one hand, if people inherited cash, that would explain how they could afford more house. On the other hand, if people inherited houses, you would expect that the number of houses for sale would have surged as the beneficiaries wanted to cash out. Unless they see the house as an easy way to generate cash by renting. I would love to see any analysis on this if anyone has come across it.

    • elbowwilham says:

      If you have two income earners making $70k a year, that is about 12k a month. A million dollar house will be about $5000 a month mortgage, depending on taxes and stuff. So that’s a DTI of 42%. Most mortgage companies will qualify you for anything less then 50% DTI.

      Yea, there isn’t much wiggle room if things change, but that’s what people do. I saw it all the time as a Mortgage Underwriter in early 2000s.

      • Cas127 says:

        Didn’t 50% DTI used to be 30% to 35% DTI?

        And people keep wondering why we have “asset” implosion after implosion.

        ZIRP (and underwriter “loosening”) created an utterly insane alternate reality for every form of financing (pseudo demand).

      • bulfinch says:

        Not a math surgeon or anything, but your numbers on monthly net income/mortgage payment don’t come out the same for me…maybe if you’re not saving a nickel or paying for any kind of health or life insurance. Even in state without any income tax, it doesn’t quite pencil as cleanly as that. If you’re pulling in buck 40 and you’re buying a million dollar house, it sounds like a serious case of cart-before-the-horse.

      • rojogrande says:

        What interest rate and down payment are you assuming? At 6%, an $800k mortgage is $4,800 and taxes and insurance are on top of that. A couple earning $140K is also doing well to put $200K down. I’ve got to agree with Bulfinch here.

      • Here it comes says:

        With todays rates that $1M house is at least $6000/mo when you add in taxes and insurance, but probably more.

        • elbowwilham says:

          I just went to zillow, looked up a million dollar house and looked at the estimated payment. At todays rates it was a little over 5k. Yea, there are a lot of “it depends”. Like new construction may buy down the rate even more, so the sales price is still 1 million, but the monthly payment is less.
          800k vs 1 million.. that wasn’t my point.

          My point was, that people will bring their DTI up to the point of living paycheck to paycheck in order to afford those million dollar houses, and the banks will approve the mortgage. Add in 8 year loans on cars to lower the DTI even more.
          Millions live on that edge, not saving a nickel (maybe a little in a matched 401k).

        • bulfinch says:

          Here in Austin, Texas you’d be looking at over 20K in annual property taxes a year on a million dollar house…in any event, you’d be on the ragged edge with a DTI as lopsided as that. Any lender that would underwrite such a loan needs to be horsewhipped…as in whipped with a horse.

      • IN says:

        A million dollar house on a 140k household income sounds like some insanely optimistic (or should I say … opportunistic?) math to me.

        Our household income is a little less, yet in the same ballpark, and even at 3%-ish rates I considered our 400k house with 2k mortgage a bit of a stretch. I wanted to ideally stay at 300-350k, but I was simply several years late to the housing party that ensued in Carolinas over the last 5 years.

        With my income I still drive a 10+ year old car daily, I try to save as aggressively as I can, I have to budget a lot of purchases, my kid goes to the public school and all-in-all I can’t say I have a lifestyle of a wealthy person (which I am absolutely not by all standards). I simply can’t imagine having a 3x mortgage payment.

        According to ADP Take Home Pay calculator, 140k a year roughly translates into $8200/month after taxes (in NC), but before any deductions like 401k, insurance and such, so you’ll be lucky to see $7500/month in hands once all deductions are factored in. Car insurance, maintenance, gas and financing will probably grab at least another $500-600/mo if you are lucky (or much more if you like new expensive financed cars).

        So you’d end up with $7k/month at best, even before hitting a grocery store. How one can sustain a 5-6k/month mortgage with these inputs, I honestly have no clue. Either these people have to have some major side or cash gigs, or sizeable savings / dividends, or very wealthy relatives to give them a hand every time they need it – I simply don’t get how they can make it through otherwise.

  22. AD says:

    Wolfman, the peak median home price was around $409k, and the current median price is about $367k. The median price was around $270k in early 2020.

    Housing at the peak median home price ($409,000) would need to drop about 33% to get to early 2020 price levels.

    Considering peak prices were set when the 30 year mortgage rate was 3%, then a 30% drop is warranted based on mortgage affordability when the rate is 6%.

    For every 1% increase in the 30 year mortgage rate, there is a 10% drop in price.

    From what I am hearing on financial news stations like WBBR (Bloomberg radio), many economists are forecasting that the 30 year mortgage rate will steady between 5 and 5.5% by this summer.

    • Lune says:

      Are these the same economists that predicted a pivot last month, and the month before then, and the month before then, and so on?

      Let me fix your statement for you:
      “many [paid shills] are [talking their book] that the 30 year mortgage rate will steady between 5 and 5.5% by this summer [hoping to unload their longterm bonds to the rubes before the real massacre comes]”

      The overnight Federal Funds Rate will likely be in the 5-5.5% range (maybe even higher) by this summer. This is not conjecture. The Fed has publicly stated this as their goals. Do you believe the 30 year mortgage will be below the overnight FFR? Especially as QT continues and another $500bil will be drained by this summer?

      IMHO, the reason the mortgage rate has declined despite the Fed’s moves is due to a massive risk-off movement in the market. Many people, including “conservative” players like pension funds and insurance companies, were forced into risky markets because treasuries basically paid zilch for the past 10 years. Now, treasuries are finally paying a decent nominal return (not enough to compensate for inflation but still better than what they got before), and so lots of money is moving out of risky assets (junk bond yields are going up; equity prices are going down) into treasuries.

      This is a temporary rebalancing phenomenon. Although it may continue, as the Fed continues to raise rates and drain cash via QT, the longterm trend will be for mortgage rates to rise.

      The old saying in investing is buy low, sell high, and don’t fight the Fed. The graveyards are filled with people who tried it and failed.

      • jm says:

        Something to watch out for: Over the next few months the GOP refusal to raise the debt limit will prevent the Treasury from selling any new bonds (unless they take the unprecedented measure of buying up at a discount the bonds sold with lower interest rate coupons in previous years and replacing them with new high-interest-rate bonds, keeping debt constant but increasing future interest cost). This will require that they issue IOUs to various creditors such as Federal pension plans, etc, to balance outgo with income. They can play such games until about May. At that point the debt limit will get raised, one way or another, and there will be a flood of new Treasury issuance to get cash to satisfy the IOUs.

        In the interim, absence of government borrowing will appear to the market, net, as a counterweight to Fed QT. And then in May the reversal of that will appear as an intensification of QT. Of course it is likely that the Fed will modify its QT activities so as to reduce the impacts, but it might not be able to eliminate them.

        • Wolf Richter says:

          “….will prevent the Treasury from selling any new bonds…”

          No, that’s not at all how it works. It’s just BS.


          Treasury auctions are scheduled well in advance and proceed as planned. New Treasury securities are sold every week as scheduled, and will continue to be sold. The Treasury department will continue to supply the market with new Treasury securities.

          See for yourself. Here are the upcoming Treasury auctions next week. I might be buying some Treasury bills, LOL.

          This is what actually happens EVERY TIME:

          The Treasury Dept. will use the payroll contributions to government pension funds and to Social Security as revenues WITHOUT issuing the special nonmarketable Treasury securities to those funds in return (as it normally would).

          So the publicly traded Treasury Securities will be issued as normal. And the market will not feel the difference.

          But the special nonmarketable securities will not be issued, and this prevents the debt ceiling from being breeched, and yet the Treasury gets the funds for them, which keeps the government afloat. These are the so-called “extraordinary measures” that Treasury uses to tide it over for as long as possible. But it cannot be done forever. At some point, this scheme is exhausted. This is the deadline for the debt ceiling to be lifted.

          Then, after the debt ceiling is lifted, the Treasury Dept. suddenly overnight issues all those nonmarketable Treasury securities to the government pension funds and Social Security that it already got paid for in prior months, and the national debt jumps by $500 billion or whatever overnight. I report on this just about every time it happens.

          But there is no change in publicly traded Treasury securities.

          Here is one of my infamous Debt-out-the-wazoo-charts (outdated) that shows exactly how that happens. Note the jump the day after the debt ceiling ends:

        • Cookdoggie says:

          Thanks for explaining that Wolf, I had no idea. But now that I read that, I wonder why it can’t continue forever. Just pretend it’s ok.

  23. James says:

    Yes…”less expensive areas do offer less than the wacko areas,”
    Case in point, check out my actual home buying experience in Southern CO which closed on Dec 30.
    Listing price as of Nov. 2022 $100,000.
    My cash purchase price? $ 72,900.
    Seller’s purchase price in April 2021 $115,000.
    After 384 days of serious renovation, new floors, new kitchen cabinets, all new appliances…..seller lists home for $250,000
    Seller rents out property + $1,000/mth in small town CO.
    Seller drops price $25K EVERY 3-4 WEEKS to get out from under?
    This is a REAL experience in the Dec 2022.
    Are there RE VALUES available NOW in Western States?
    You bet..but boy do need to check daily & be very focused on what you want & where you want & WHEN you want.

  24. James says:

    Yes…”less expensive areas SUFFER less than the wacko areas.”

  25. Michael Engel says:

    1) Existing homes sales speed is testing 2020 low. Speed might rise to 2019 low , before breaching the 2011 low.
    2) Sellers refuse to cut their losses hoping for better days. Hope isn’t good enough.
    3) If the boys in DC don’t get along the 10Y might rise to 8% first, before 18% and 25%. The 3M might breach the Fedrate and the speed of 10Y will be faster than the Fed ability to respond. Chaos and mayhem in the o/n market.
    4) Sellers hope, but there is no guarantees the market will spring, stop misbehaving, especially in the west.
    5) The zombie west will drag the rest. Short might not be short enough.
    6) When speed is dead the market will shut it’s doors. Sellers and buyers will barter.

    • Tina W says:

      The zombie West is right. If only I could share a screen shot of, too many price drop notifications to even review them all, just today. And it’s Saturday so I have some extra time.

  26. Franz Beckenbauer says:

    One Factor that is always left out when analyzing “the housing market” is demographics. It’s really simple: there are two reasons to buy a house: to live in it or to use it to generate income by speculating on rising prices or renting out. With a population that isn’t really growing any more, there simply is no demand for number one other than moving somewhere else – which is a zero sum game, because you are moving out of a house – which is made Impossible by number two, since the “somewhere else” is becoming unaffordable because sellers/landlords want to cash in on their location.

    That is why you have a market which is dead. Without bidders, there is no market and prices are completely meaningless.

    The more this Trend continues, the more people living in “desirable” places will just stay put and the rest will have no chance of moving. For the “industry” depending on an active housing market, it’s clear what that means.

    • Wolf Richter says:

      Demographics don’t happen from one month to the next. They happen over decades. So there was a total frenzy in 2021 and early 2022, with bidding wars and all kinds of shenanigans, and in June 2022, demographics suddenly kicked in? I mean, come on.

      • Sams says:

        Could monetary and other policies have masket demographics for a few years?

        Then, at some point monetary intervention did not work any more and detrimal side effects of said intervention got that bad that they was stopped.

        Now we have got the effect of both underlying fundamentals and from the backlash from the policies used to counter them.

      • Franz Beckenbauer says:

        Trillions of funny money help to delay the inevitable outcome.

    • Phoenix_Ikki says:

      What a wordy way to say ” This time is different and not in my area…” could’ve save yourself a lot of time typing.

  27. Michael Engel says:

    7) If the boys don’t get along, UST will become junk bonds. Everything
    else might deflate : SPX, Real Estate…in the mother of all deflation.

  28. Michael Engel says:

    Don’t worry, be happy, it’s all gibberish, it will not happen.

  29. BubbaJohnson says:

    With all the Govern ment , debt, printing, spending nonsense, there is little hope things will return to a normal Free market society. The Federal Govern ment is out of control and no one is held accountable anymore.

  30. Max Power says:

    Wolf’s analysis is spot-on.

    Here’s he latest from my hot southeast housing market…

    Inventory up more than 40% from last year (but still down 15% pre-pandemic). Months of supply back to prepandemic average and 2.5x longer than last year. Prices not really responding though; median price per square foot down about 5% from the July highs, up about 50% from 2020. So, given seasonality, prices are essentially flat YoY.

    The rate of annoying “I wanna buy your property” robo-dialed cold-calls on my rental properties down from about 3-4 per property per day in November to about one per property per week. These came to an abrupt screeching halt in December. For-rent inventory has probably doubled since the summer. Monthly rents down 10%-20%.

    So yes, the standoff between buyers and sellers continues. Rental market adapting more quickly.

    • Jon says:

      Just wait ..
      Last time it took 4 years for housing market to bottom up
      It may be faster this time
      This is just the beginning of the show

  31. Desert Dweller says:

    I live in the Coachella Valley (Palm Springs/Palm Desert area), which is a destination resort area. The price of middle class homes has almost doubled over the past 3 years. Nice homes that previously sold for around $350,000 are now in the mid 600s to low 700s. Between the price increase, higher property taxes, and high mortgage rates, most middle class buyers cannot afford to purchase the same home today as they took for granted 3 years ago. The number of listings finally are increasing with lots of price reductions, and for the first time in well over a year there are now several foreclosure listings.

    • grimp says:

      slowly at first, then suddenly.

      home equity atm is gone.
      higher borrowing costs.
      high inflation.
      record high prices and rapid appreciation at the peak.
      denial and “this time it’s different” and “not in my area” commentary

      this movie is a re-run.

      • Jdog says:

        The funny thing is that most people really believe that the past 50 years has been economically normal. The past 50 years have been an economic anomaly.
        The creation of money out of thin air to support and economy is not sustainable. Taking on ever larger amounts of debt above and beyond the real production of goods and assets is not sustainable.

    • Phoenix_Ikki says:

      Sad thing is that there are idiots FOMO buyers that will buy out there while have a commute to work in OC or LA and think that it’s doable..even working hybrid, 1 day a week in 5 hrs commute will suck any soul left out of you

  32. Brian Murphy says:

    Homeowner’s equity is at a all time high, and employment is still strong despite the headlines.

    With Wall Street (fed futures) predicting rates coming down in the second half of the year why would a seller drop their price if it isn’t necessary.
    And J Powell has already shown he will fold as soon as he can (temper tantrum from the wall street cry babies).

    • Wolf Richter says:

      “…Wall Street (fed futures) predicting rates coming down in the second half of the year…”

      Yes, Wall Street NEVER stops lying in order to make some people rich when the masses fall for these lies. This is the #1 rule.

      • 91B20 1stCav (AUS) says:

        Wolf – wish classes including simulation games based on your last sentence were part of high school core curriculum…(…had one of these in a u.s. ‘humanities’ class (combined history/u.s. lit course) based on the events of 1920-40. Some played ‘bankers’, ‘stockbrokers’, ‘businessfolk’, ‘workers’, ‘farmers’, various levels of ‘gov’t’, etc. (it was a very large class) We experienced a large economic crash, an attempted, but failed, coup, and a negotiated ‘recovery’ remarkably similar to the New Deal). Combined with my elders’ tales of that period, it equipped me a bit better in the steering of my future in a never-certain world.

        may we all find a better day.

    • Jon says:

      You made me chuckle when you said
      Wall Street 😀

    • Steve says:

      That equity is not real. Just a temporary aberration. Something that is only real for a short time often ends up as a misunderstanding/miscalculation. That is why we say paper wealth is real only when it is realized. Valuations are more based on wishful thinking than reality. Reality should include the full time curve for proper comprehension. But since the future is unknown, the greedy blindly fall into a trap.

  33. Dr Duration says:

    Re: But sellers are not wanting to price their homes right.

    Valuation fundamentals going forward will be the perfect inverse to the nothing matters pandemic prices era.

    Placing a valuation on a crypto laundry tokens like genesis or sq/ft average of any house, car, commodity, art work or NFT is going to be a far more thoughtful process, which will rely less on childlike attention deficit whims or media propaganda.

    Sellers of homes a year from now, will have lots of company, in the classic game of supply versus demand.

  34. MarkinSF says:

    Checking out at the local grocer’s the cashier was a young upbeat guy I would have mistaken for a techie if I saw him downtown.. After being informed that he was tired and debating going out later I asked what time he got off. His answer stunned me. This was his second job. He has a white collar job with Tesla. But he had just purchased a home here in SF. Further, everyone he knows who just brought house was in the same position. They worked grunt second gigs to make ends meet. Just felt so bad for the guy and the predicament he was put in.
    Is it his fault for buying in a crashing market? Is it the Feds fault for putting him in this position? Will he eventually be crushed under the weight of it all? Or will he make out like a bandit 10 years on?
    Who knows.

    • Jon says:

      At the end
      People need to take individual responsibility.

    • Wolf Richter says:


      Don’t feel sorry for him. He’ll be better off when he walks away from the mortgage. Feel sorry for the lenders and guaranteeing taxpayers.

      California is a non-recourse state. If he thinks the mortgage is too much, and he cannot sell the home for enough to pay off the mortgage, he can stop making mortgage payments, and live there for free and save the money.

      And when the mortgage servicer gets nervous, he can string them out for a while, and live there for free a while longer, and maybe get some forbearance, and when they finally come to throw him out, he lived there for free for quite a while, and he then walks away from the mortgage with a whole bunch of money in his savings account (save from not having made San Francisco-sized mortgage payments) and goes on with life.

      It’s the lender (MBS investors or guaranteeing taxpayers most likely) that will take the loss.

      He’ll rent for a few years to let the market settle, and then he’ll use his big-fat savings from the mortgage payments he didn’t have to make while living there for free for a bunch of months, and then from having rented a cheaper place, to buy another home, hopefully at the bottom.

      • Bobber says:

        Fannie Mae and Freddie Mac are begging him to bankrupt the system, with downside of only 3.5%, and no limit to his potential gains.

        Why does the government allow this? … is a good question.

      • Kracow says:

        aare refinancing, helocs and second mortgages not recourse in California?

        • El Katz says:

          Karcow: No. Refi’s are not. AFAIK, it’s only original purchase mortgages.

        • Wolf Richter says:

          I think California expanded the non-recourse protections to refi mortgages after the mortgage crisis. Don’t know how it is in the other 11 non-recourse states.

      • libdis says:

        Florida is not a nonrecourse state, and after the bust my wife’s cousin lived in their house for almost 10 years, free, not even paying insurance before the bank finally showed up, then they just walked. The bank was just happen the place wasn’t trash I believe

        Mind blowing.

        Its a good deal if you can land it.

      • 8_mile_road says:

        If this Tesla employee walked away without paying his mortgage, wouldn’t his credit be doomed?

        How would any lender do business with him in a few years, with a ruined credit report?

        I DO know California is a non-recourse state, but I don’t understand how he can buy a house a few years later

        • Wolf Richter says:

          People sure did last time.

        • Nunya says:

          I know people who didn’t pay their mortgage for 3-4 years in NJ during the first housing bust. The bank didn’t foreclose. The people then got a mortgage modification which erased all of the late fees and interest on the previous missed payments. After the mortgage modification, they still didn’t pay their mortgage and the houses were sold as short sale… family members.

          Hard to believe, but believe it. The real estate agents who are friends of the friends orchestrated the whole thing. Legal? Probably not since it was done knowingly. Loophole? Absolutely.

    • Dr Duration says:

      Socially and economically, there’s probably going to be a lot of pain, connecting a large swath of people that have made really bad, poorly thought out decisions related to pandemic era investments.

      The group thinking or hallucinations today are no different than prior periods when people literally act foolish.

      It doesn’t surprise me that a young Tesla engineer jumped into a lifestyle that isn’t sustainable. The same story will play out for cute young Costco employees who see their jobs as pathways to excess success, thinking, a double income retail grocery job will generate enough cash flow, to support a lifestyle well beyond their capabilities.

      It’s the same thinking of the GFC, where NINJA loans provided big new homes and trucks for people that barely had income to make ends meet. All the fools get over leveraged and ignore risk. It’s as if a huge group of people set up a complex domino game, then the music stops and all the dominoes fall over … duh!

      It’s always about instant gratification stupidity versus being a patient person that takes time to think about realities and risks. It’s about a person that puts together realistic information versus people that act on impulse, just like in a casino.

  35. Mendocino Coast says:

    As an Investment :Buying foreclosures changes all strategies , Throw out the Normal in a down market because that’s for Suckers Why ? because until you reach Bottom or near bottom you can rest assured you’re going to lose Money IE Become another sucker . ( Money not earned is Lost money same as Money saved is money made )To Rehab a Dumped Home with Appliances, Kitchens, Bathrooms or parts of Bathrooms removed is a good Move because once you’ve rehabbed the place when done right it will look like new > Better than one bought in ” Good Shape ” ? By how much ? a good Question answered a Lot better enough so that a buyer will say right away this is the one / Things Stripped and removed is Very Common in Foreclosures BTWand plays a Big part for  Foreclosures / Do you have to Replace all missing with brand new ? Yes and no / Air Conditioners brand new with a good warranty is a great selling point along with a Home warranty  / other things can be used as long as they look brand new often found at a Re Store Etc for example they have everything many times brand new If selling say 2 years later ( Capital Gains Tax )Know your Broker / Agent >  a Huge % of Brokers will try to get you to list your newly rehabbed home at far below actual Value because they Know it’s going to sell right away and all they care about is their commission end of story . 
    Are we at the Bottom LOL  No Way Jose

  36. Poor like you says:

    Hey, great new regional map.

  37. Dr Duration says:

    FYI from calculated risk

    “Currently there are 943 thousand multi-family units under construction. This is the highest level since December 1973!”

    While there’s a seller’s strike, ad people wait for the recession to gather momentum, this extra inventory supply will help fine tune prices ….

  38. Cookdoggie says:

    If a seller puts a vacant second home into the rental market, that’s often a point-of-no-return decision. Once you allow renters in, the house deteriorates more rapidly as it’s now being neglected. Ask any landlord about the costs to refurbish after a bad renter finally leaves. Once you rent, kiss your “value” goodbye and just keep on renting it.

  39. John Eubanks says:

    It’s is believed that over 48% of those 18-30 yrs of age are still living with parents in the US. Self induced multigenerational living is back. The astronomical COL does not add up anymore. Most of the so called middle and upper struggling to keep up debt payments monthly. The imaginary equity run up from the pandemic now on a downhill snow ball. I still remember my $330K home in Denver doubling to $660K back in April 2022. Fast forward today and termites continue to eat up equity. The Demand has left the building, maybe it’s the 7.0% interest rate ? cut your throat to blow your nose sacrifice. Builders here are having fire sales to unleash the last of inventory. 55 and over ranch community developments still having a field day. More demand to be outside the beltway and having instant access to restaurants and services.

  40. John Stotes says:

    I love how Real Estate Agents have gotten us all to call them “Previously Owned” Homes, when everything else is call Used. It is an “Used Home.” You can tell it is a bubble just by how people talk about Used Home like they are magic, irreplaceable, when in reality they can be replaced in a matter of weeks with the right crew.

    • Swamp Creature says:

      John Stotes

      Now the RE shills have got a new name for used homes. They call them “Teardowns”. They don’t tell you that upfront. Its’s secret. They lie. Realtors want you out of the neighborhood so they can get a commission, selling your home to some made up loving couple who have children who want to go to the great schools in the neighborhood. After they get you out then they sell the home to a builder who tears the home down and puts up a McMansion.

  41. El Katz says:

    Today’s “hot deal”: A Shea Home in a Trilogy development (~Resort living! The lifestyle you deserve!~) – never lived in – finished in September…. $1.125M…. get it while it’s hot! Would cost an extra $200K if bought today! Honest! Annnnnnd no waiting!!!!!


    The people who bought it are dolts…. it backs to the busiest road in the area which, soon, will be widened to 4 lanes. Sucker!

  42. CCCB says:

    As a true contrarian, after slogging through 280 comments here and another few thousand from other similar WS posts, its pretty clear that the overwhelming majority expect RE to crash and burn down below the permafrost.

    Since the vast majority of investors are always wrong (sorry guys), I’m starting to think we won’t see another 2008 crash after all, or aything like it.

    That said, I don’t see big upside to RE investments during the next couple of years either, just steady income and good tax benefits. Cash is looking better and better, even with 6% inflation.

    • rojogrande says:

      Why do you think the commenters here are a representative sample of the “vast majority of investors”?

      Personally, I think housing will correct based on the intersection of prices, interest rates, and earnings (i.e. affordability). The correction will differ in each market depending on those factors. I think the price corrections will differ from 2008 because that bubble was focused on housing with completely absurd lending standards. However, if interest rates continue to normalize at higher levels, affordability dictates that prices must come down unless earnings go up. We’ll see how it plays out.

Comments are closed.