Home Prices Drop Year-over-Year for First Time since Housing Bust 1. Sales Bounce from Deep-Dismal to just Dismal

The spring selling season is here, folks.

By Wolf Richter for WOLF STREET.

The median price of all types of homes sold in February, at $363,000, was down 0.2% from February 2022, according to the National Association of Realtors today. This was the first year-over-year decline since February 2012, when the market emerged from Housing Bust 1 (going into Housing Bust 1, the first year-over-year decline occurred in August 2006).

The year-over-year decline came despite a small uptick in the median price from January. But that uptick was far smaller than the increase a year ago, and so year-over-year, the price dropped (historic data via YCharts):

The median price of single-family houses fell 0.7% year-over-year; but condo prices were still up 2.5% year-over-year.

Lower prices will help unfreeze the market, and that’s starting to happen, if barely: “We’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs,” the report by the National Association of Realtors noted.

The median price has fallen by 12.3% from the seasonal peak in June 2022, (historic data via YCharts).

Sales of previously owned homes rose by 14.5% from deep-dismal in January, which had been the lowest sales since 2010 during Housing Bust 1, to a seasonally adjusted annual rate of sales of a still dismal 4.58 million homes. The increase came after 12 months in a row of month-to-month declines.

Year-over-year, sales were down by 22.6%. Compared to February two years ago, sales were down 25.8%.

Priced right, just about any property will sell. But not enough sellers are wanting to price their properties right just yet.

Actual sales in January – not seasonally adjusted, and not as annual rate – rose to 271,000 properties, down 23% from a year ago:

Sales of single-family houses, based on the seasonally adjusted annual rate, rose 15.3% from January, to 4.14 million houses, which was still down 21.4% year-over-year.

Sales of condos and co-ops, based on the seasonally adjusted annual rate, rose 7.3% from January, to 440,000 units, which was down 32.3% year-over-year.

By region, year-over-year sales plunged in all regions (percent change from year ago, map via NAR):

All-cash buyers – often investors and second home buyers – rose to about 76,000 properties (28% share of 271,000 actual sales), from January’s roughly 67,000 properties (29% share of 231,000 actual sales).

Median days on the market before the property is sold or the seller pulls the property off the market, at 67 days, was up by 50% from a year ago (data via realtor.com):

Months supply, at 2.6 months, while still low by historical standards, was up by 50% from a year ago.

Active listings (= total listed inventory minus properties with pending sales), at 578,000 properties, were up by 68% from a year ago. In absolute numbers, active listings remained low by historical standards, as potential sellers are still trying to outwait the increase in mortgage rates, and as many potential buyers have pulled back (data via realtor.com):


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  334 comments for “Home Prices Drop Year-over-Year for First Time since Housing Bust 1. Sales Bounce from Deep-Dismal to just Dismal

  1. Bubbajohnson says:

    Anyone out there have a good feel on the residential real estate foreclosure situation currently?

    • Wolf Richter says:

      Creeping up from historic lows during the pandemic, but still very low.

      Home prices will have to fall a lot further for a lot longer before foreclosures become a big national issue.

      NAR: “Distressed sales” (foreclosures and short sales) accounted for 2% of total sales, same as in Jan.

      The number of consumers with foreclosures:

      Here are delinquencies which come ahead of foreclosures:


      • Yort 2.0 says:

        I think a lot of us who are looking to sell our houses in the next 1-3 years are very fearful of short sales like happened during the housing bust. It is one thing to drop the price, another to compete with “jingle mail” neighbors in which the banks simply want the house sold instantly to cover the loan principle.

        It is kind of zero sum when you think about housing and stock market. If the Fed caves to the “Break or Brake” mantra, then housing prices could rise with inflation, as ultimately stocks get sucker punched if/when inflation comes back with a vengeance in short order.

        Honestly I’m considering panic selling my stocks if the Fed pauses this week with no increase in FFR. I’ll probably cost average out if markets go euphoric and place it all in short term treasuries, going from 60% to 100% of liquid assets. I’ve been playing this market game forever, time for a break and focus on moving a house that somehow tripled in value in 11 short years. I’ve made good money walking away from Vegas tables on luck streaks, how is this any different as it all seems too good to be true with free money policies working forever out as planned by our oligarchy system elites.

        Time to downsize and simplify all of life’s aspects due to exponentially increasing uncertainties…anyone else feeling the same way???

        • John says:

          Looks to me like everyone will reduce their life style. What’s the difference if one can’t afford a product or service like in the Great depression or has plenty of money but the product or service is not available? No difference. You will start to see your neighbors cut there own lawn etc. One big factor I consider when looking to buy something is, can I service it myself. If not I pass for now.

        • Prairie Rider says:

          Yort 2.0,

          An old rule of thumb is never be afraid to take a profit.

          Good luck to you.

        • sufferinsucatash says:

          I’m curious how the failed banks deal with their mortgage portfolio?

          Could a failed bank force a homeowner to seek a new mortgage at a new higher rate?

        • Shiloh1 says:


          During late 80s early 90s via the Resolution Trust Corporation (RTC), notes were sold and serving companies put in place to send statements and collect payments. No changes in terms and conditions.

          I did not have insurance or property tax escrows. I’d say the value of my property (a 5 unit apt building) versus the purchase price, mortgage and equity was never in question.

          In those days one had hard copy originals of all docs; nothing on line.

          Refinanced with another bank several years later, no prob.

        • Seen it all before, Bob says:

          “Could a failed bank force a homeowner to seek a new mortgage at a new higher rate?”

          That has never happened before. Neither has mortgage forbearance ever happened before but it did.
          A mortgage is a contract and if a new bank acquires a contract, I don’t think they can just tear it up.

          We had a mortgage with Countrywide in 2008. Our loan was just sold off.

          Most home loans today are owned by the US Government via Freddie, Fannie, FHA, VA. I suppose if the US Government decided to rip up the contract and re-write it, we’d have no recourse. Things would have to be very bad for that to happen.

        • Wolf Richter says:

          “Neither has mortgage forbearance ever happened before but it did.”

          Nnnnnnyes. Forbearance is a classic way of trying to give the borrower some time to get their ducks in a row.

          What was new was “mass forbearance” pushed by the government. That has never been done before.

      • John says:

        Just looked at the NOD list for this week in Reno and it went from years of 1-3 a week to 30! One week does not make a trend but it was a shocker to behold.

        • Alku says:

          Out of curiosity I created a search query on auction.com in 2020 or so and then forgot about it. This month I started getting multiple emails per week with the results.

        • QueenHissiphus says:

          Interesting, given the exuberant confidence people have had in that area the past few years…

      • Erik Levy says:

        Wolf, while prices dropped for the first time, it is minuscule compared to the 10 year gains. This was the Fed’s grand plan, of course, to inflate away other inflation with real estate and stocks. This will/is backfiring, as asset concentrations at the top 1/10% increase exponentially relative to the Fed’s lack of basic math skills. Thus, more homeless, more people with jobs living out of urban trailers and vans, but less people stuck with overpriced homes with adjustable rates. The latter is key, and I don’t think we will see a foreclosure ramp even close to that of 2010. Perhaps, it is just me reaching for a different angle on this, and I am completely wrong. In any case, I do think the big builders are/will be in trouble as they will have to sell these massive developments that are under bank commitments. Of course, the Fed could secretly or not-so-secretly fund/support/bail out that too.

        • Wolf Richter says:

          This is just the beginning. Housing Bust 1 took five years from top to bottom. Be patient.

        • VintageVNvet says:

          according to the charts above,,,
          from ”start” of the vast increase in the 2nd derivative of all the charts, the ”anomaly” happened from 2005 to 2014
          so more like 9 years than smaller…
          just saying, but especially just saying for those with money burning a hole in their pocket(s)

        • georgist says:

          > last one took 5 years
          Surely with the higher leverage, faster hike and general interconnectedness we are looking at a faster peak to through. 3 years tops?

        • SilentC says:

          Hoping Georgist is right. One thing we didn’t have last cycle as well was a bunch of folks from HCOL states moving where they pleased and bidding up prices with their HCOL salaries, only to be called back to the home office or forced to find significantly lower paying local jobs when they refuse the call. I think our dear government must be asking/threatening our biggest quasi-monopolies to bring people back as it solves half of the housing affordability issue.

      • electroneuter says:

        Agree, with further firmament:
        RE prices will unconditionally fall because they can (as you point) and the risk sentiment is ripe. Some say: Going down the risk totem pole of asset classes, after the fall of NFTs, SPACs, Luna, FTX, and a round of bad bankers bank spanking, it is good time for RE (as an investment) to take the 1st trashing.

        Family friends are building an apartment in their new house’s basement for the AirBNB purposes… Now… In 2023. They talk to me about the expected monthly return on investment [$$$$], and are already indebted up to their ears. I’m like “Cool”.

        RE must take the first leg down, or we are lost forever.

        • sufferinsucatash says:

          I see this too. A lot of GenXers are like deer in headlights that the boom times either 1. have ended or 2. will ever end. They purchase services like its going out of style. Upgrade their cars constantly. They are making high salaries but I do not think they understand fiscal prudence.

          A bankruptcy attorney might have to explain their options.

        • Harrold says:

          I doubt GenX’ers are like deer in the headlights. They are in their 50’s now and they are a very cynical bunch. They have been thru multiple recessions, layoffs, housing crisis, and stock market busts.

      • BENW says:

        That’s first graph will not turn into anything like 2009 & 10. And don’t worry Elizabeth Warren & the UNIparty RINOs will ensure mortgage & rent relief are trotted out WAY before foreclosures get rolling.

    • Pea Sea says:

      Very easy to get a feel for it when it’s essentially zero.

      • Leo says:

        More layoffs in April may change this. New round starting with Meta and Amazon. We still have to see if it’s more lip service and less action.

        Don’t know how long the big tech can fool fund managers and investors. Big Tech is too top heavy with executives that are drawing multi million dollar cheques, and there is No one laying off these executives.

    • dang says:

      The drop in price seems like a squibble when compared to the monumental changes in the other graphic, metrics that have you have meticulously documented.

      If I were a betting man, which I’m not any more, I would bet that the FOMC decision tomorrow at 2 PM Eastern will be a 25 bp increase in the interest rate paid for cash. The experiment with QE seems to have run it’s course.

      What, I believe is a more important message from Powell, is how the regulatory Fed will remedy their systemic failures. AI would zero in on the obvious that the private banking interests are the puppet masters behind the screen making the Fed to fuck up.

      • Leo says:

        Markets are dictating the rate hike expectations to Fed and J Pow is following.

        No wonder real rates remain negative, inflation remains high and Fed balance sheet chart looks questionable!

      • old school says:

        There are three big asset classes for the typical person. Stocks, bonds and residential real estate. First two are liquid and respond pretty quickly to Fed policy. Everything that had a price at zirp has a different price at Fed funds rate of 5% with housing taking the longest to reflect reality.

        Fed was about 1 year too late getting started plus one year lag on policy means they let bubble go on for 2 years too long.

        Remember what stock and housing prices were in 2009. We haven’t fixed anything, just added more leveraged and transferred some risk to shadow banking system where its not marked to market.

        Bread and gas are going to be $10 or we are going back close to 2009 asset prices. That is the choice.

        • sufferinsucatash says:

          Why not 2019 asset prices? Seems more reasonable. Interest is bringing the bottom up really fast. It is an invisible bottom, no one knows where it is. One could guess.

        • Old school says:

          You might be right. but we were still under sway of zirp then. Fiscal deficit is running 7% of GDP. If Powell is serious about 2% he is going to have to turn the screws really hard to offset drunken sailor spending.

  2. Minutes says:

    It’s gonna take some time to get things back to some sort of equilibrium. What a true mess that 0 interest rate policy plus buying MBS got us into. Could be a solid decade from start to finish to get things more normal imo.

    • Leo says:

      We don’t have a decade to fix this high inflation and broken free markets.

      People are getting screwed. The system of reward that capitalism thrives on is now broken in US.

      Productive work no longer yields desired rewards and this lack of incentive is hurting real economy, production and supply of goods and services.

      This facade created by QEs, causes US to look good on paper, while getting weak, poor and backward in real terms.

      Couple in the rise of China, and it’s easy to see, this weakness will doom the empire, that will destroy both the dollar and our way of life.

      • sufferinsucatash says:

        This is definitely a Defining Moment for us. We need to re tool and have a big 5th inning.

      • El Katz says:

        Productive work doesn’t yield desired results? Priced a trade lately?

        A lot of this is malarky. A tradesman can about write his own ticket as most fools can’t change a light bulb without a youboob video.

        Case in point: A quote for a neighbor to remove and cap off a propane tank. $145. Took the dude about 5-10 minutes and maybe $5 in parts, including loading the tank onto his truck. That extrapolates to $910 per hour. Another case: Replacing a contacter on our heat pump. $494 – which also took about 10 minutes. The part cost $20. He quoted $385 for a capacitor I paid $15 for and did myself. Plumber? $75 to replace a $4 wax ring (local guy who feeds off the community and not trying to get rich).

        Where the breakdown is: Those guys come back and fix their mistakes for free. The pols and bankers expect you to pay again and again.

        Fire the gerontocracy! 89 year old people (Feinstein) belong in a rest home, not making government policy. The Geezer in Chief is another example.

        • Digger Dave says:

          Tradesman here. Time on site is no proxy for work time. Materials markup covers cost of doing business. A normal workday in many trades will consist of 3-4 billable hours. The other time gets eaten by travel, organizing tools, paperwork, “free” evaluations, phone calls, texts, emails, payroll, taxes, every busy-body in the parking lot tying you up for 15 minutes with questions, trips to supply houses, restocking the van, training on the latest and greatest technology and techniques, licensing requirements and keeping up with changes, poop breaks (got a 5 gallon bucket? No time to stop before I get to the next job, back of the van is as good a place as any to go), fetishizing over new tools, pestering from the wife (smartphones suck), trading pictures, questions, questionable material and complaints with other tradesmen (smartphones are awesome), and far too many other things. Sure I showed up and fixed whatever problem you had in five minutes, but no one pays me a salary to sit at a desk for 8 hours. I can’t make a living charging you $25 for something you could do yourself with a $5 part!

        • Oliver says:

          dont forget the time it took the tradie to answer the call, travel to and from your neighbour’s and then dispose of the tank probably 1.5 – 2 hours, no way did he earn $950 an hour

        • 91B20 1stCav (AUS) says:

          …that’s one of the banes/attractions of DIY – you eat your own overheads…

          may we all find a better day.

    • dang says:

      Firstly, I have no problem with your sentiments which seem to be strangely familiar.

      I wanted to take the opportunity to expand on a concept that you cited, equilibrium. An elegant concept, that has been shown to be mathematically correct about chemical reactions, the Gibb’s free energy of formation.

      Hardly a description of the financial markets. A collection of good hearted hucksters, I suspect.

      • dang says:

        As far as the introduction of AI into the hive as being a threat to humanity, I’m currently withholding my judgement which is that this is not going to end well.

        Every person will have an alter ego that is more nasty, more dogmatically insistent. If one were ingenious by nature, they might discern a potential conflict between programmed machines and human beings.

        • LK says:

          All anyone sees with AI is dollar signs or the toy that keeps on giving. Alarm bells over technological shifts have been raised in the past to little effect.

        • dang says:

          It seems to me that art is the designated victim in the next iteration of the world rotating on it’s axis.

          I’m concerned that artists, notorious truth tellers, will be accosted by a machine demanding that we perform some kind of procedure that conforms with a protocol thing that has been ordained as the way we do things.

        • dang says:

          A grey, dreary dystopion future without hope is what AI offers.

          Why ? Because the people promoting this technology have only monetary profit in mind when they really should be considering the damage they are doing.

          Let’s pool our collective intelligence and imagine the benefit that the current release of a digital predator into the soft environments of our communities. I don’t think it’s a good idea either.

          The ability of monetary stimulus to incite irrational buying of worthless company stock, which has been amply exhibited on this site is an example of consensual hallucination.

        • sufferinsucatash says:

          It is not AI, it is fake AI. It is code on how to write a sentence correctly. Basically it googles the info and then spits it back out to you in a fancy sentence. Not AI.

  3. Depth Charge says:

    Speculators are still loading up on land, while at slightly lower prices and volumes. People have zero confidence in the FED and the dollar, preferring to spend the money instead of hold it. What good is a 5% return on a CD or treasury when you’re still losing a few percent a year to inflation?

    This situation is far from over, and now everybody is screaming FED pause or pivot. There’s one thing that I think is guaranteed – the value of the dollars in your bank account will continue to erode in rapid fashion. They’re stealing everything.

    • Carlos says:

      This mentality is partially what has caused the housing super-bubble. This latest housing bubble began in 2014 with massive QE that was in response to taper tantrum, but otherwise no Main Street crisis in sight.

      The response to QE and ZIRP was to dump all the liquidity into housing, driven by a reasonable fear of hyperinflation, turning the existing bubble into a super-bubble.

      If this hyperinflation does not come to pass, interest rates remain high, and QT continues, there are absolutely zero fundamentals that support the current housing prices. Not demand. Not “lack of supply.” Not lack of building, supply shortages, land shortages, or any of the other unfounded excuses pushed by real estate propagandists.

      Housing is one of the most irrational asset classes, driven by delusional, magical thinking such as “real estate always maintains its value or goes up.” Much of this is due to confirmation bias from people who already own real estate and have much of their own net worth tied up in a highly leveraged illiquid asset. They *can’t* bear a housing market crash, or they will be ruined.

      The housing market right now is like Wily E Coyote in the Road Runner cartoons. He runs off a cliff and briefly defies gravity, floating in the air, until the moment he looks down, thereafter plunging into the abyss.

      • Phoenix_Ikki says:

        “”there are absolutely zero fundamentals that support the current housing prices”

        LOL, as you will see as “fundamentals” in many of the comments below to counter this point. So and so just sold their house for X over or close to asking and there are 18 buyers waiting, it was sold in less than a week. Listing is still too low and everyone is jumping at buying ASAP…

        In this age of insanity we live in..maybe anecdote is about the same as fundamentals

        • sufferinsucatash says:

          I do think Joe blow is still “awash in money” in his head. It is a fantasy every middle class $156k+er is living in”

          Taylor Swift’s Eras tour is not worth $800-2000 people.

          It’s just not, it’s a stadium. She’s using you.

        • El Katz says:

          I’ve often wondered who pays that kind of money to see any performer or ball sport. I still remember sitting in a bar in San Diego with two Stupid Bowl tickets in my pocket. Some scalper came through and offered me $2K for each (this is in the 90’s) and I took it. My wife wondered why. I told her we could buy the best TV on the market, watch the game (if I gave a wet crap about it) and still have the TV when the game was over.

          These people are trained monkeys. I’ll toss a quarter in their hat, but not make them bazillionaires so they can infuse me with their virtue signalling. As the Dixie Chicks were told back in the GWB days: Shut up and sing or your life will be over.

        • LiliVonSchtupp says:

          The best bands with a handful of exceptions are best seen in a small to medium club/theater. Stand as close as you like, meet the band at the stage door after, maybe the singer will hit you up after his set, or so I’ve heard.

          What boggles my mind is how people can afford these tickets without pulling out the plastic and paying for it for months thereafter. A fun night out every so often is nice, but it seems paying these excessive prices for a few hours entertainment from mega pop stars is chasing the dragon and feels like a sign as a population we’ve approached max saturation of the consumerism high.

          I ended up having to rent a house again after renting several tiny condos while waiting for some semblance of sanity or at least stability to befall the housing market. Expensive as hell and yet I got lucky in that its a real nice place for the price and area. But gotta admit, rent or own, being in a house is not a huge lifestyle improvement, just different. More space, yard for the kids/dogs, but more upkeep and money. The experience does not justify locking in a 6%+ mortgage for 30 years on a house worth at least 40% less than you paid for it. In my opinion, anyway.

          Still holding a tiny sliver of hope all the city evacuators will flock back to their old defaults in Brooklyn and realize AirBnB is going downhill, free up the housing around here again. AirBnB is one of the worst thinks to happen to affordable housing shoppers next to black mold and foundation issues.

      • gametv says:

        There is a simple reason that the delusion of perpetually rising home prices is so firmly ingrained…because it has worked for many decades, with only brief pullbacks.

        But we have hit an inflection point. Interest rates cant/wont drop down like before and incomes are stretched to the breaking point to purchase a new home. There is simply no more room for people to buy into the market at higher prices.

        It will take a good long while for the mindset to change. Housing is now a poor investment over the long term.

        • Gomp says:

          And…..You have to live somewhere.

        • El Katz says:

          Or they have to change their expectations of what a house should be….. It might not be that 3,000 square foot custom home with an ocean view. Might be 1,100 square foot 3/1 on a 5K lot with formica countertops.

          For those who are old geezers, what was your college dorm like? Mine was concrete block walls, gang showers, and a bed and desk bolted to the wall. Vinyl flooring. A 4 drawer dresser (also bolted to the wall) and a closet the size of a gym locker. No pool. No lounge. No sushi bar. No nail salon. No nuthin’. Compare that to today’s university housing.

        • Steve says:

          with lenders now full of systemic risk, you would think a loan could be very hard to come by soon. All the risk of the bubble is concentrated in the lenders. They allowed these valuations to stand and loaned up the valuations. The buyers just rode the FOMO bus. But the buyers can just salvage their money and walk away leaving the banks the bagholders. Alot of guilty parties here but the Fed is guilty. Imho when the systemic banking crisis hits from repricing, the Fed cant save as before because of inflation going to hyperinflation. My view is hyperinflation is worse than depression because depression is just an extreme cleansing of a cycle whereas hyperinflation is the end of the fiat currency and the end of the Fed itself. So without intervening equilibrium will settle to the mean: incomes..just like it used to be. A true fundamental. According to this fundamental after the massive layoffs upcoming do the math to see what houses will be valued at. What is the average household income of your city and how much house can that buy at 7%?(remember average household income AFTER massive layoffs)).

        • Lili Von Schtupp says:

          El Katz, there are plenty of us buyers who would be perfectly content with a 2-3br/1ba with formica countertops, in fact, its all we’re trying to buy.

          Unfortunately, every idiot with HGTV and cash to burn has bought them all up to be AirBnBs or otherwise overpriced rental units. The ones those people won’t touch are completely unmortgagable partial or total teardowns which most can’t take on, and wisely so.

          Many low to moderate income home shoppers are just seeking stable housing and to get out from under a landlord, not investment property or an IG yuppie palace. Like said above, you have to live somewhere, even us peons.

    • Mr. House says:

      I love how everyone here talks about finance and stuff, but can’t you see how all of lies and so forth are spilling over into every other aspect of society? Bad money pushes out good and so forth, but i think you can apply that to everything in society. Bad actors push out the good and then everything collapses

      • Ralph Meissner says:

        Take another Xanax and relax. Everyone living in this country is very lucky to be here. America is the land of opportunity for those who are willing to work hard. The lazy people in this country will always have an excuse for their failures…and they will always blame someone else.

        • bulfinch says:

          Read up on toxic positivity, sometime. You’re lousy with it.

        • Dave says:

          Myopic comment. There are a lot of people who work hard and scrimp to save. I worked hard to attain my BSN( putting myself through school in my 40’s) and worked all through the pandemic in the Covid ICU. My wife also fell ill and has been unable to work since 2015.

          I am no slouch and always try to do the best I can at work, but I am falling behind. My paycheck has been gang raped by inflation and I am losing financial ground daily.

          So am I lazy? Or has irresponsible monetary policy and an unfortunate illness caused my struggles.

          Be careful when you make broad and ignorant generalizations like that

        • Scott says:

          America used to be the land of opportunity for those willing to work hard. Now it’s more like the land of opportunity for those already born into wealth, and the land of just getting by for those willing to work hard. Case in point, the median rent in the US has risen by more in the last three years than the median income has since 2000. In those 23 years, median rent has doubled and median home price has tripled, while median income hasn’t even breached a 15% increase. Couple that with sharply rising costs for other basic necessities, like food, healthcare, utilities, transportation, and healthcare, and we’ve got a disaster in the making.

          Sure, some people are just unmotivated and there’s little you can do about that, but when 2/3 of the country is living paycheck to paycheck, that’s far more indicative of systemic problems than laziness.

      • NBay says:

        It has often struck our notice that the course our city runs
        Is the same towards men and money. She has true and worthy sons:
        She has good and ancient silver, she has good and recent gold.
        These are coins untouched with alloys; everywhere their fame is told;
        Not all Hellas holds their equal, not all Barbary far and near.
        Gold or silver, each well minted, tested each and ringing clear.
        Yet, we never use them! Others always pass from hand to hand.
        Sorry brass just struck last week and branded with a wretched brand.
        So with men we know for upright, blameless lives and noble names.
        Trained in music and palaestra, freemen’s choirs and freemen’s games,
        These we spurn for men of brass…

        -Aristophanes “The Frogs” 405 BC

      • sufferinsucatash says:

        It seems like the Tech crowd really has lost their mind. Buy a Tesla at ridiculous rates. Worship anything Tech, follow musk’s every bowel movement with vigor and awe. Put 1/4 of your salary in crypto. Ask Chat bot what you should wear today? These people are nuts.

        me thinks, SVB lived and breathed this culture too much.

    • RH says:

      Real estate prices are falling faster than they appear, because our level of underreported inflation means the prices are declining more in real dollar terms. That said, the lower size of Gen X (so they will demand higher wages and get them) means, in popular areas, the prices will not fall as much but only until they decline to levels affordable to them, as more and more millennials must sell their real estate due to their limited retirement savings. Luxury real estate will fall more. Whatever you do, unless you are a tech-savy drug lord (LOL) who needs crypto mining to launder drug profits, avoid cryptocrap!

      My tablet’s crazy auto correct must have been produced in Germany because it keeps auto-capitalizing words as in German. LOL

    • dang says:

      Well, speculators have been able to work their way to the bottom of the totem of admiration let alone the jealous inclination every one of us feels about the super rich.

      ‘It hasn’t reached the level of the Russian revolution where they killed the royal family. There doesn’t currently be a need for such draconian measures as insurrection. Like every American that ever lived, I lived through the propaganda that defined acceptable or not.

  4. Augustus Frost says:

    Prices are far too high for most prospective buyers, unless they already have substantial equity.

    I’m a current renter due to personal reasons but have done the math. I can buy lower housing costs through a higher down payment but most people without substantial home equity can’t, making them debt slaves whether they realize or admit it or not.

    I’m not referring just to P&I either, but “all-in” costs.

    • JimBob says:

      I too am a renter by choice, sold my house 2 years ago for way too much. (poor couple). Real Estate taxes have to be killing them vs. what I was paying.

      Waiting for prices in AZ to get closer to pre-pandemic. Tracking homes and have seen markdowns 4-6 times totaling $ 40K or more just since October.

      Questions, seeing a lot of UCB (under contract) then boom back on the market. Wondering if lenders are starting to get skittish of the overvalued asking prices and appraisals not coming in where expected?

      • Fed up says:

        I sold my Phx house October 2021. Made me an offer I couldn’t refuse. I too am renting by choice and waiting. Yes, prices are going down but have a lot farther to fall before I’m buying. Still way too expensive.

      • Bobber says:

        I also looked at some listings this morning and saw several
        go pending, then get relisted within a month. I assume the buyers got nervous and walked from the deposit, or the dwelling couldn’t pass inspection, or the buyer couldn’t get a loan.

        There is reason for nervousness in an overpriced declining market with thin volume. Big price moves can happen, and the trend is down.

      • Fed up says:

        I’m noticing that as well, many back on market. I’m thinking you are correct on lenders,

      • Prash says:

        I am in AZ and see that too. Some joker took their house off and came back with a higher price and then is currently walking it back down. Not sure if this summer will be a good time to buy a small condo, I need a place to stay and am tired of my apartment raising rent on me each year.

    • Carlos says:

      The home owner’s insurance, HOA fees, and property tax shock is coming in right now. Seen tax bills go up in certain areas in my locality (small city) experience as much as 60% increase, particularly in lower income areas. More “reasonable” increases in higher income areas around 40% increase.

      Credit card debt is piling up, variable rate student loan payments are soaring, food prices high, gas prices high…and as Wolf has shown, people are outspending inflation with revenge spending. My car insurance bill jumped by 20% from six months ago. Budgets planned in 2021 are getting smashed.

      PBS just put out a great documentary showcasing the Fed’s poor decision-making since 2008, where they interviewed the leader of a Food Bank in LA – there are more people collecting food now than during the height of the pandemic.

      Because of all the programs available, foreclosures are taking nearly a year from first delinquency to eviction. The last of the rental assistance ended in Summer 2022. Since then, local rental units I’ve been tracking (small urban area) are already down 20% and still falling. In other words, rents are already falling, though no one is reporting on it.

      This is a slow train wreck in progress. A very slow train wreck.

      • Phoenix_Ikki says:

        That PBS documentary is pretty well done, it released at perfect timing too after the whole debacle at SVB.

        To hear them interview Neel “the devil” Kashkari and the tone-deaf comments he made about jobs and their policy…the FED should just hide him in the basement to not further embarrass the little credibility they have left.

        • Mr. House says:

          “That PBS documentary is pretty well done, it released at perfect timing too after the whole debacle at SVB.”

          Was it? I watched the first 15 mins and turned off in disgust. You guys didn’t notice how they were rewriting history with regards to 2008 and onwards?

          Yeah that timing was super convenient wasn’t it……….

          Anybody notice lately how its always the government and the corporations who start all the panics the last two decades?

        • HowNow says:

          Phoenix, I agree. Good documentary. And it showed how both Bernanke and Powell bent under the pressure of a stock market tantrum. Added to it was Trump slamming Powell for raising the Fed rate and threatening to fire him. I’m confident that Powell never “needed” the job but just didn’t want to be thrown out and humiliated.
          You must have noticed that Kashkari had an answer before the interviewer even finished his sentence. Pure rationalization. And an ego bigger than the great outdoors.

        • Prairie Rider says:


          I live in Minneapolis where Mr. Kashkari presides over the Federal Reserve Regional Bank. He was in the local paper yesterday with an interesting take on Governor Walz’s proposed rebate checks for the state’s budget surplus to be dished out to Minnesota citizens.

          From ‘Could Minnesota’s proposed rebate checks fuel even higher inflation?’ 20 March 2023:

          “Federal Reserve Bank of Minneapolis President Neel Kashkari has said it has given him pause as states in the region, including Minnesota, consider using a portion of their significant budget surpluses (over $17 B in MN) to distribute rebate checks to residents.

          “As a taxpayer, that sounds pretty good to me. But as a monetary policy maker, that sounds like more stimulus. And that’s putting more money in people’s pockets to go out and spend on airplane tickets and food and buying things.”

          He added, “On the margin, it’s probably a little bit inflationary and makes our jobs a little bit harder.”

          Kashkari has no say on what the DFL (Minnesota Democratic-Farmer-Labor Party) House, Senate and Governor do in Minnesota. But he does have a vote on the FOMC this year. Tomorrow will be the day we find out what’s up with the Fed’s rate policy. Neel will have his say.


          Neel is one of the engineers who designed the guidance system for for the James Webb Space Telescope. He has a B S & M S in mechanical engineering. Yeah, the dude really is a Rocket Scientist.

        • 91B20 1stCav (AUS) says:

          DanRo – rocket scientists where (to shamelessly borrow from other commenters) mebbe rocket surgeons or brain scientists might be better employed…

          may we all find a better day.

      • Lynn says:

        “there are more people collecting food now than during the height of the pandemic.”

        Same in far northern Ca. In addition there are tons of empty storefronts. 2 towns in particular look like a deep depression and other towns are creeping down there. I think there are more empty storefronts than in the worst part of the GFR, but then, the wholesale pot industry has been sinking like a rock for the last 3 years or so up here. It’s been taken over by large companies that think they can afford to sell wholesale below cost sometimes because of money coming in from their stocks. They were aiming to “control the market” rather than make much of a profit.

        • Lynn says:

          clarification; more empty storefronts in those 2 towns than during the worst of the GFR.

        • El Katz says:

          Are there more store fronts? Or are the failed enterprises something worthy of survival or just a hobby that could never generate a profit? Beanie Baby, record, and books stores were hot at one time too….

          Is the location suitable to the product? I watched a TV show last night that featured a “scent library” business. WTF is a scent library? I can’t imagine that store lasting more than 90 days (and it will only last that long if it was capitalized to last 90 days). It won’t last 5 minutes on it’s own merits.

      • jr says:

        Property taxes in general do not go up with assessed values. The taxing entity has to increase their budget for taxes to go up. My assessed value went up by $150k for 2023 but my property taxes are virtually unchanged.

        • Petunia says:

          In locals with property tax rate pegged to valuation, say 2-3%, the taxes go up automatically. When prospective buyers overpay, they raise the taxes for the entire neighborhood.

        • jr says:

          Petunia, No they don’t. As the assessed value increases the tax rate goes down. The taxing district votes on a budget then, the budget is divided by the assessed value of all property in the district to determine the rate.

        • El Katz says:

          It depends on the laws of municipality. Some can, and do, follow assessed values. Others don’t. Lived in both kinds of environments…. Prop 13 in CA didn’t give a rat’s patoot what the budget was. It was capped. OR? Not so much.

        • Harrold says:

          In low tax (sic) Texas, properties are taxed on the assessed market value. They are assessed every year.

          Your assessment goes up 5%, your taxes go up 5%.

      • grimp says:

        But people are still out spending like drunken sailors. Try booking a flight, or a cruise vacation, or a hotel stay, or even go out to dinner.

        • sufferinsucatash says:

          And the inflation on those things is ridunkUloss. Perhaps all the demand is what is making them inflate so much? There has to be a terminal velocity reached for these people to stop traveling.

      • sufferinsucatash says:

        Interesting, I just jumped ship on an old auto policy. I saved $800 a year.

        Perhaps, shop around.

      • MarkinSF says:

        Excellent is more appropriate. Gave a very clear analysis that is easily understood by people with little or no idea of what has transpired over these last 15 years.

  5. Old Ghost says:

    “The median price of all types of homes sold in February, at $363,000,”

    How many jobs does a Medium wage earner have to work to afford that price?

    • John says:

      Renters in apartments will do ANYTING to get into a home. Apartment living is getting unbearable.

      • Wolf Richter says:

        renting v. buying is one decision.

        Living in a crummy place v. living in a nicer place is another decision.

        They can move to a higher-end rental apartment or house. Or they can buy something, but that’s not a 100% cure either. Lots of homeowners don’t like where they live, and don’t like the house they live in, constantly complain about all kinds of stuff, and regret having bought… documented in lots of surveys.

        The different issues have to be separated.

        • Twinkytwonk says:

          This is a very good point that many dont understand.

          I live in a house that has had subsidence issues caused by trees in neighbours gardens. Both neighbours have refused to remove the trees. The insurance claim has been going on for eight years and the homeowner has had to pay for investigative work out of their own pocket.

          Last month another part of the house also underwent subsidence movement which will be a separate claim.

        • jr says:

          I bought a pretty nice Townhouse in Tucson to stay in while I build my Winter house. Rental apartments seemed overpriced and not very appealing, plus I’m 72 and have never rented a house or apartment. I bought my first house when I was a college student and rented out rooms…..

      • Carlos says:

        “Renters in apartments will do ANYTING to get into a home.”

        Until buyer’s remorse hits.

        72% of recent buyers have regrets about their purchase, and almost all the reasons circle around paying too much or having to rush the process, in other words, they regret “doing ANYTHING” to get into the home.

        • bulfinch says:

          I think if you can — you’re probably better building a place from scratch. You have considerably more latitude over the situation & materials used, and can possibly even collaborate on the design phase, depending on your aptitude for such things. Might be more of a headache & more expensive than buying an existing equivalent, I don’t know; but I can see how the connection one might develop with a unique space like that could prove profound; of course, the tradeoff is the inevitable heartache of getting too attached to something like a place over time. Places change; people change.

          If you’ve got the stomach for it, it’s better to be perpetually passing through. That’s all any of us are doing anyway. Too many landscapes to breathe in in one lifetime to lock into just one — especially some blah little cul de sac in suburbia. Comfort is the enemy of adventure! The older I get, the more I think Dr. Dorian Paskowitz had the right idea(s).

          A good life goal might be to ensure that the last thing you glimpse on this planet is not the sight of some ugly ceiling fan as you stare up at a popcorn firmament toward eternity.

        • El Katz says:


          If you’ve never built a house, you don’t realize the compromises that have to be made to meet budgets.

          My roofing dude started out building a house on land he owned. Then COVID hit. His lumber package escalated to stupid heights. So, trying to dodge a bullet, he went to ICF as a substitute. Took months to get the plans approved (not counting the redraw and engineering). Original budget was @ $1M. He’s currently busting $2M in Cave Creek, AZ. He’s 38. Sold everything he owned (rentals, cleaned out his bank accounts, and took a hard money loan). Watching the horizon for wisps of smoke.

          My formula is buy a view with a house on it. The house can be changed. The location not so much.

          And I find it hard to believe that 72% of people regret their home purchase. I guess their caviar dreams didn’t match up to their White Castle budget.

        • Mark says:

          72% of buyers have remorse?
          ROFL, I have NEVER met anyone who said I regret buying a house. Let’s say you don’t actually like the house or the location, just the fact that your equity doubled over the past few years makes buying versus renting a no-brainer. What have renters to show for besides ever increasing rents? I absolutely hated renting. Never ever will I go back to renting.

        • Randy says:

          Carlos, El Katz,

          Forget the Utuber (I watch quite a few) but he cited a survey: buyers remorse at 65% (67% ?). Pre pandemic was 35%.
          He then went into detail as to what were the factors for the remorse with associated percentages.

        • just-a-boy says:

          Yah, it’s over 70%, I was surprised, but here it is, reasons are mixed….


      • jon says:

        I’d love to live in an apartment but waiting for kiddos to be out. few more years.

        I am a home owner and I think SFR living is over rated.

        • sufferinsucatash says:

          Apartments blow. They kick down the door to come in anytime they want to “check on things”. Wake you up at all hours. If you are a people person its ok, but you have to go by their whims. If something big breaks, its a while to get it fixed. Overall it is OK, but owning a home is much better IMO. You are treated with much more respect.

      • Lauren says:

        Speak for yourself. I’ve been paying the same rent since 2019. I would be WAY poorer if I owned.

    • Gattopardo says:

      Why would you expect a median earner to afford a median home? That implies that everyone, from the lowest earner on up, can/should afford a home. I think (hope) we can agree that the lowest end of the earnings distribution, the young workers especially, can’t be expected to afford to buy a home.

      • Escierto says:

        A few inconvenient facts. Back in 1996 when the minimum wage was $4.75 an hour which is about $10k annually, I bought a house for $30,000. Making a little more than minimum wage, it would have been possible to actually afford a mortgage on that house. So the idea that you need to be some sort of high roller to afford a house is a relatively new concept. Less than 30 years ago almost anyone who had a job could afford to buy a house in Texas. Will we ever see those days again? I doubt it and it illustrates just how this country has been destroyed.

      • Randy says:

        According to Wikipedia 50 countries have higher homeownership rates than the US.
        Yes some of these countries don’t have the greatest homes, worse case many are what we’d call shacks. But Taiwan, Singapore and Norway all have high standard of living and are over 80% (Norway just over 80%).
        We are at 65%.

        China is at 90%. Oh but they overbuilt perhaps, other issues, etc.
        If the survey is accurate 90% is considerably higher than 65% (and probably falling… investors to contend with today who rent them out).
        Romania at 96%, about 15 to 20 countries over 80%.

        If apartments were all of stellar condition in the US it could make a lot of sense to rent.
        My apartment is from the late 70s, early 80s.
        Its fine for me except not sufficient sound insulation between floors, top and bottom.
        Only a problem with one tenant (I’ve lived here 23 years, had about 7 people below me over that timeframe).

        But with China at 90% I contend they have bragging rights. Some homes are quite small I understand but on the other hand they probably are newer than our homes (US) on average.

        If indeed 90% of your population owns a home … it makes it more likely the median wealth person can own a median priced home.

        To your point… suppose the US thirty years from now is such that only the wealthiest 30% can afford to buy a home. Then the median wealth person cannot buy ANY home let alone the median priced one.

        Aside: The Chinese ( I believe) don’t own the land. They do however pay off their property taxes upfront at time of purchase.
        So while the US person owns the land they will always pay property taxes on it… so the land ownership seems not a reality in practice.

        • james wordsworth says:

          You really don’t want to live in a typical Chinese “home”. Just saying.

          In many of the countries you mention a “home” is an apartment in a big block of flats. We are not talking a “house” like in North America.

          In general people are willing to put up with less privacy and less space than in NA. Lived in Asia for a while in a rented 4 bedroom 2 bath flat, that we rented out three bedrooms in, including to couples at times – so 6 people in the place (washing machine was on the balcony). We did this while married – and saved a lot, but gave up privacy. How many folks in NA would willingly do this?

        • sufferinsucatash says:

          You believe data out of china. bless your heart. ;)

        • rojogrande says:

          In addition to what James Woodsworth says, the culture of moving around the country for work is much stronger in the US than most countries, particularly the countries you cite. There’s probably no reason to ever move for work in Singapore or Taiwan, and even in Norway the population is small with only a few significant population centers. For a lot of people in the US, many of whom can afford to buy, renting just makes more sense because of the flexibility it provides and the high transaction costs of buying and selling a home.

          I’m a proponent of home ownership because I think it invest a person in their community, but understand it does make sense for a lot of people for personal and economic reasons. I don’t know the details, but also suspect that other countries have much more multi-generational living where a home stays in the family and keeps getting passed down. Except maybe in Hawaii, that’s not common in the US. It raises the question, if a young adult moves from a rental back to a house owned by their parents, does that effectively increase the home ownership rate by removing one renter?

          China is an oddity because I believe the government still owns the land, as you note, and controls migration between the countryside and cities. Is it “ownership” if you don’t own a key component of the property? These dynamics make it difficult to compare homeownership to the US.

    • Augustus Frost says:

      That’s one-half of the problem.

      The other half is that I’m never buying into an area of town or a neighborhood in this price range or noticeably higher, as it isn’t what it used to be.

      • bulfinch says:

        Why season the discussion in this murky think tank-y language? It frames the would-be US homeowner as a kind of presumptuous and/or — dreaded of all dreads — entitled a-hole.

        I’ll say it, and probably nobody’ll agree with me — every American should have a crack at owning their own little patch of blue, especially if home ownership is going to be relentlessly promoted & elevated in the manner in which it is in this country. Renting is a strategic move, and often a damn’d shrewd one. Why buy the cow?…

        However, when it’s the only game in town because every wannabe uncle pennybags and their second nephew buys up SFHs in what might otherwise be a homespun community in Anytown and then goes on to sublimate his or her lust for passive income as some kind of wholesome grassroots utility to the masses…well, screw that jazz.

        In the words of the other Lebowski: Get a job, sir. It’s actually freakishly easy these days.

        • El Katz says:

          Well, maybe Uncle Pennybags had a plan and the other guy didn’t. That might make the difference.

          I don’t know how many of you kept track of your neighborhood friends, but I did. Most are broke. A few did prison time. Some died (one drowned working on ship propellers in LGB, one didn’t last 30 seconds in Vietnam (got shot as he got off the transport), another died in the WTC. A few did extremely well (those with stable relationships). The rest? Probably eating cat food.

          It’s all choices. I learned long ago that, for me, the pursuit of “stuff” was far more rewarding than actually catching it. I have a few investment vehicles… which were sleds when I bought them, but things changed. The E30 M3 that no one wanted in the 90’s is now a 6 figure car. Original. Low miles. Right color. The E36 isn’t far behind and the goombahs destroyed eligible E46 M3’s and a pristine one with a third pedal is worth more than it sold for new. Would I buy any of them at today’s prices? Not on your life.

          Housing is the same thing. Look for the opportunity. I’ve never bought in the “A” location…. I always bought in the “A-” location. Same amenities, same schools, 5 minutes away. Different zip code? Fine. No non-correctable defects (like freeway wash or airport noise). Less cost of entry and higher upside potential.

        • bulfinch says:

          Oh, sure — plans are all fine & well, particularly whenever the goal posts aren’t on roller skates and the playing field isn’t on fire.

          Plan dinner; live your life.

  6. Bubbajohnson says:

    Thanks and agree with every comment above me. THEY sure did screw things up.

  7. Blobber says:

    Wolf, and others, my friend recently used a program from AnnieMac Mortgage called Cash2Keys to purchase a house. Have you heard of this? If so, can you explain if I am understanding correctly?

    As far as I can tell, a branch of the lender (AnnieMac Private Equity) submits an all-cash offer on behalf of the borrower (to me, an ultra short-term loan) for a fee of about 1.5% of total price/UPB, which is then “forgiven” if AnnieMac provides the actual mortgage. What are your thoughts on programs like this?

    • Wolf Richter says:

      I have no thoughts on this. And I’m fine with having no thoughts on it, LOL.

    • Lili Von Schtupp says:

      I was outbid on a vacant townhouse in NY (seller used it as a rental) last year by someone using a similar program, looks from Google that C2K is NJ only. Listing agent made sure to communicate my offer was higher (FHA), but the seller preferred the faster cash transaction because he wasn’t collecting rent on the place.

      Three months later I get a call that the seller was considering my offer again and would get back to me by day’s end. Apparently the seller had waited, waited, and waited, but after the buyer couldn’t secure the cash loan and ran out of excuses the seller finally backed out of their deal. Mind you, we would have closed inside of 45 days buuuut I’m not bitter. Anyway another all cash buyer swept in at the zero hour and Bob’s your uncle I’m still renting. I assume the seller kept the earnest deposit.

      Based on that I would deduce that kind of financing could potentially be more of a headache for the seller than straight cash but I’m not sure if the sellers know its not a straight cash deal from the jump. And seems pretty risky from the buyer’s end upon review of the C2K program.

  8. Depth Charge says:

    Musk is out screaming for a half point rate cut with CPI over 6%. Ackman is calling for a pause. The billionaire oligarchs are putting the screws to Powell from all angles, with the help of politicians like Elizabeth Warren. The little people have no chance in this system.

    If the FED does cut, all the speculators won, and they will poor into all risk assets, and assets period, which includes housing. This will set fire to the inflation inferno and accelerate the full scale destruction of the country. All bets are off at that point as to what the end game is, but it will not be pretty.

    • Wolf Richter says:

      Musk is funny. He borrowed a HUGE amount of money — something like $13 billion — to buy Twitter. And rate cuts would hugely benefit him and his baby, Twitter.

      These people are all the same, Ackman too: when they open their mouth, it’s for the exclusive purpose of manipulating things into their favor.

      If you want to know what’s good for them personally, just listen to what they say.

      • Depth Charge says:

        They’re really nauseating, and I can’t stand them. But you said it yourself, Wolf, something like “there is no greater power than 50 billionaires.” I have never been so disenchanted with the entire system in my life. The more wealthy these folks became, the more power they wielded over everything.

        • Wolf Richter says:

          “there is no greater power than 50 billionaires” is the first part of my statement. The second part is “with big megaphones.” The second part is crucial too. Both Ackman and Musk have huge megaphones, particularly Musk. When they say something, it’s instantly dished up via social media and MSM to just about everyone out there.

        • Xavier Caveat says:

          2, 4, 6, 8
          If not a billionaire
          You don’t rate

          Go team!

        • Mr. House says:

          “The more wealthy these folks became, the more power they wielded over everything.”

          Why do you think they want CBDCs so bad?

        • bulfinch says:

          Enchantment has its time & place, to be sure — but the shits being shitty sure does furnish some good grist for things like introspection, philosophy, art, comedy, and – more generally – new ways of thinking/modes of knowing. The front burners have never been as hot as they are now in my lifetime. ‘08 was just a bit of gas…I say, let the bastards & their stooges do their worst if it brings out your best.

        • 91B20 1stCav (AUS) says:

          bul – my man.

          may we all find a better day.

        • Prairie Rider says:


          You’re right about philosophy. When I watch and read the news, it is frustrating as hell, and easy to get pissed off thinking about it. But, we can’t change world events at an individual level.

          What we can do is enjoy life and take pleasure in each day. That’s my philosophy.

          El Katz has it figured out about finding a home with a view and location. My one and only home owned, which was bought 28 years ago, has that. Life is good.

    • Phoenix_Ikki says:

      Crybaby is going to cry, normally it would be a non issue if our government would just ignore this Ahole and the any billionaires like him. Unfortunately that’s often not the case though…

    • Phoenix_Ikki says:

      Btw, if Pow Pow does cut now, someone needs to “tattoo” Arthur Burns 2.0 on Pow Pow’s foreheard, Inglourious Basterds style and give him a collar and leash to wear so his billionaire friends could use it to take him for a walk..

      For a guy that claims to want to do the right thing to fight inflation and one that’s representing an organization with very little credibility, let’s hope Pow Pow doesn’t sink that low.

      • deepwater says:

        Powell capitulated to corporate interests twice already, I’ll be pleasantly surprised if he doesn’t this time.

    • Gen Z says:

      Same thing here in Canada with the real estate agents imploring the BOC to cut interest rates.

      They want the neverending housing bubble to continue while food prices increase every month due to inflation.

      Just remember that when there was outrage during the disability benefit freeze in 2018, a Minister replied that “the best social assistance is a JOB”.

      And in 2022, in response to the cost of living crisis, the deputy PM insinuated “Have you cancelled your Disney+ account?”

      But to cut interest rates to make loans cheaper for billionaires, that would anger the French people a lot.

      • Gomp says:

        Seems to me the real estate people should realize that the lower the prices, the more buyers can qualify for. More buyers means more commissions (in the future). Simply short term thinking.

        • Twinkytwonk says:

          Not sure about other countries but here in the UK you don’t need any qualifications to become an estate agent.

        • Petunia says:

          Many of the overpriced homes were purchased by real estate agents for speculation. They figure they are always ahead because they don’t pay full commissions to buy or sell. Now with high interest rates, they can’t sell at a profit, and cutting prices is not an option for them as well. They need the rate cut to get out of their investments.

        • El Katz says:

          The real estate people don’t thrive on churning numbers of “ups”. They thrive on the commission on high end properties. What’s more work? 6% on 4-$250K properties or 6% on one $1M property? Who’s more likely to not give a wet crap if the property needs updates/repairs? The poor guy selling his wife to afford a $250K house or the guy/gal buying the higher end property that knows they’re going to gut it anyway?

          I always buy good bones that’s ugly. Paint, moldings, door and cabinet hardware goes a long way. Watch trends. The porcelain “wood” flooring is the new Nehru jacket of housing. So’s the Home Dumpo backsplash tile that looks like a bucket of Lego’s threw up.

      • Fed up says:

        I’d be so happy if we could get rid of the current realtor business model. They have everyone convinced they need a realtor, and they don’t. Still trying to understand why I am paying a commission for someone to advertise my home on Zillow which anyone can do. In AZ, the RE forms are preprinted. It doesn’t take a genius to read the GD forms and complete the transaction. Hopefully, one of those NAR class action suits wins which many say could upend the current business model. One can hope.

        • Gen Z says:

          In Canada, the real estate industry is like an oligopoly.

          Even using the world r-x-a-l-t-o-r is a word that is a trademark by the Real estate agents in the industry.

          Bloggers who are critical of the real estate bubble get sued for using the Toronto Real Estate Board trademark believe it or not.

        • Lynn says:

          I believe a lawyer that specializes in estates is cheaper. There are also services where you can pay a minimal amount to have your home listed in the “listed by agent” part of the listings. Which get more views. They then refer calls to you.

        • Gattopardo says:

          I concur, Fed up.

          How about when you want to sell you show up at an advisory office. They help you put a price on it and point you to resources to list. When you have a buyer, both show up at the advisor to check all the boxes like whether you’ve had an inspection, and to cover a few basic things that the lawyers bury in those pages. And then fill out the paperwork. Should cost maybe $1000 for the service instead of 5%.

          Yeah, ok, I hear the claims of “value add” and how clients will overpay or sellers will sell too cheap. I’m sure there’d be some inefficiency, but the savings would so far outweigh that. What do Americans lose in commissions per year? I would guess $50 billion. WASTED.

        • PilotDoc says:

          You can easily get rid of it. It costs about $400 to sell a home by owner. I have sold 4 of my own and 3 of my close friend’s homes this way. Sign a contract and mortgage company does the rest. It is really quite simple.

        • Flea says:

          All u need is a title company ,really easyRealtors are biggest SCAM ever

        • El Katz says:

          A good realtor is worth the cost. They can get stuff done you can’t even imagine. The last one held a deal together that netted me just shy of the cap for married filing joint (aka $500K). The rest was “off book” in furniture and contents (that she got a chunk of).

          The purchase of a home is an emotional purchase, not entirely (or rarely) logical. Someone has to hold that illusion together to maximize the profit. Our last home was sold to a couple where she was preggers…. and their whole goal was to get into a house prior to her dropping the kid. We’d have never known that without her.. and the entire transaction was orchestrated around that reality. That little tidbit paid her commission as we garnered a higher price because we were flexible.

          However, a shi**y realtor isn’t worth the powder that it would take to blow them up.

          Your mileage may vary.

      • CCCB says:

        Real estate salesmen don’t care about prices. Prices can go up or down or stay flat. It makes no difference. They care about selling. Thats why theyre called real estate salesmen… duh!

        As a matter of fact, they hate markets like this, not because prices are falling, but because nothing is selling. Sellers want too much for their homes. Buyers think the market is going to zero. So theres a total stalemate and nothing sells.

        No sales = no commissions = no income. It has nothing to do with the direction of the market.

        • El Katz says:

          You really don’t know much about selling a house, do you? Realtor’s always stretch the price…. they make more money that way. Especially if you, as the seller, incentivize them to do that very thing.

          I love naive people. (Realtor’s don’t care about price…. Hahahahahahahahaa!)

        • Randy says:

          CCCB, I think you make sense, El Katz not quite as much.
          Although it depends on the market !

          2020-2021 re agents were apparently in the driver’s seat. Probably many got greedy because … well they could. And STILL made a relatively quick sale.
          So yes push the listing price hard… with so many buyers you might get it and get it in just a week or two or three.

          But me. 1995. Took me 5 to 6 months, mid February to early August to sell my home. Realtor for 4 months, FSBO last two (with buyers agent). Sold for 8% less than original purchase (new home, 1986, in very good condition). More of a buyers (maybe neutral) market.

          If its a slow market my guess it makes sense to get the seller to lower the price so you can sell it ….
          rather than not.

          400K house. Per appraisal say.
          Its a neutral or buyers market.

          Re agent would seemingly be better off selling the house in 3 months at 390k rather than 9 months to squeeze out say 405k. Lose $400 to 800 commission but if you can thereby triple your sales you’ll be way ahead (5% commission:
          3 sales in 9 months w/ each having a 19.5k commission versus one at 20.25k.).
          Thats a big maybe, tripling your sales, but the idea is clear. The extra (2) transactions can greatly outweigh the small loss on the per transaction commission (750).

          So as is often the case it is somewhat situation (context) dependent … something that is under appreciated in our society. Stated differently, people too often overgeneralize.

        • Fred says:

          There is a whole chapter in Freakonomics about whether realtors work to get the best price, or just push to make the sale, get paid, and move on. Spoiler alert, the are not your friend.

        • Seen it all before, Bob says:

          Both buyer and seller RE agents want the house sold to collect commissions.

          They have to be better psychologists than salespeople.

          I’ve had some friends back out of houses after inspection due to the trauma of finding 5K in repairs needed on a 300K house. The buyers want the 5K at closing and the sellers don’t want to give it. Both the buyer and seller RE agents wanted to close and collect their commissions. In this case, both the buyer and seller RE agents were not good therapists. and the deal fell through and nobody won. All over 5K. A good RE agent would calm all nerves and hysteria and take some of it out of their commissions to collect the real money.

        • Seen it all before, Bob says:

          Another point that benefited us (buyer) by using a RE agent about a decade ago.

          The seller had added up all of the improvements (they were nice) and added their memories to their asking price. This was about 50K over comparables in the neighborhood. We really liked the house and offered them 50K less. They were so insulted that they didn’t even counter offer. We continued looking at other houses and 3 weeks later the seller RE agent told the buyer RE agent that they’d be willing to accept an offer of 45K less.

          Thanks to the RE agents, I considered this a win for all of us. We bought a house that we liked at a comps price and the seller sold the house at a comps price. The RE agents had enough therapist in them to work out a deal between all of us.
          The inspection turned up about 1K in repairs. The RE agents split it and we all came out ahead.

          If you sold a house a decade ago, just don’t look at the comps price now. It is too depressing. Maybe we should have kept it…….

          House prices in most areas have always gone up over 10-15 years. This time, many have gone way up and are settling now to reality. Reality meaning that they still up from 10-15 years ago.

      • Fed up says:

        Twinkytwonk: No qualifications in the US either, and it shows. There may be a few good ones, although I haven’t met one worthy of my business yet.

        • VintageVNvet says:

          NOT a fan of the current RE mkt sales situation either fed, but must add:
          In the last sixty years or so I have had very pleasant dealings with agents and brokers in five states who have been honest and competent and sometimes very helpful in convincing sellers or buyers to meet my objectives in deals.
          As for every type of service, trades or white collar, there are good ‘uns and sorry ‘uns…

        • Fed up says:

          Vintage: the difference between realtors and many other white collar professions is that with realtors there is a low barrier to entry. It’s not hard to get a license, hence, more bad ones. The test is ridiculously easy, at least in AZ. I see no point to them. I was a FSBO 20 plus years ago and had no problem getting through the transaction. It’s not rocket science. I see no point to paying someone 5, 6% to sell my home.

        • josap says:

          Qualifications vary by State. A broker has more qualifications than an agent, at least in Az.

        • El Katz says:

          Look at the real estate stats…. find the agent/broker who has the highest level of success in your market and go with them. They likely “love” where you live and can sell the dream.

          With the “arms length” transactions, few sellers ever meet the buyers. When you sell a house, it cannot be an emotional sale… just because Ellie May’s height tabulations are on the door jamb doesn’t make the house worth more to a buyer…. only to you.

          I’ve told my wife on several occasions: I don’t care what the buyer does to the house after the check cashes. They can knock it down for all I care. It’s a pile of bricks and sticks. Take your photo albums and move on.

    • Dr J says:

      Elmo Muskrat:
      The TSLA Pump: “we’ll sell 50% more cars…”
      The TWIT Dump: “well, gee, I had to cover those losses at TWIT….
      According to Elmo Muskrat – this is a quote – TWIT is “a plane that is headed towards the ground at high speed with the engines on fire and the controls don’t work….”

    • Miller says:

      These billionaire idiots like Musk and Ackman are making themselves even more loathesome by foolishly and dangerously whining for a rate cut when the US desperately needs ongoing interest rate hikes and QT to stay financially and politically viable–they already have billions and never have to worry about money, still they’re so greedy, they’re basically screaming to endanger US national viability and social order by pushing inflation even higher and fueling social unrest. (Inflation is the main reason for the LAUSD teachers going on strike and shutting down our 2nd biggest school system and much of Los Angeles with it, and that’s tip of the iceberg). All for the sake of their narrow interests. Pure scum, because US national survival exactly what’s at stake right now in the inflation battle, and the upcoming Fed decision (and it’s discipline to keep tightening) may be its most important in decades.

      Like my old prof once said, poorly controlled inflation has brought down far more great powers and major empires than any war ever has, and the US is at a dangerous cross-roads now both at home and abroad. There was a report last month about the Saudis and other big oil producers growing more furious about USA inflation ruining the value of their dollar sales and holdings, and exporting enough inflation to threaten social unrest in their own countries. That’s what the “dollar is reserve currency” false assurances don’t get–like my old prof also said, there’s never just one one reserve currency, there’s several plus commodities and other holdings in portfolios, and they’re not going to continue maintain large USD stashes if that asset is guaranteed to lose value from inflation. The dollar is now a fast depreciating asset, and if the Federal Reserve displays timidity and unprofessionalism by a rate cut, or even failing to hike, the rest of the world would see that as a signal that the Fed has given the green light for inflation to soar out of control and make the dollar worthless, and they’ll dump their dollars and USD denominated assets like mad. The Saudis and other oil and commodity producers are already diversifying and setting up exchanges to sell goods in other currencies, and even though the RMB isn’t free-floating (they don’t want a Plaza Accords sharp rise there), it’s pegged to a currency basket and not just the dollar, they won’t let it fall if the dollar is allowed to inflate away.

      It’s even more dangerous back home, those teachers are striking in LAUSD because they can’t afford to live even in the far outskirts of the city, inflation just for rent and groceries is insane there. And that’s just the beginning–looting like they had with Argentina’s peso crisis back in the 90’s, higher crime and shoplifting and social unrest are all coming here if we don’t get inflation down, on top of worsening polarization in a country with 400 million firearms. It’s not enough just to reduce inflation because previous inflation has already shot up costs way beyond American incomes, prices have to come back down. That’s another thing the idiotic pivot mongers and squawkers forget, even just 1 percent inflation right now would be painful on top of the heavy inflation we’ve had since 2021 (the 2 percent “target” was always made up, just some random number pulled out by a New Zealand bank), so disinflation is a fool’s concept. We need not only minimal inflation (less than 1 percent), we even need a period of deflation to get prices back in line with American’s salaries. Fortunately the housing bubble is starting to deflate a bit but like Wolf’s been saying, it’s gonna be many years before it reaches a more reasonable level, and then then there’s all the other asset bubbles in the everything bubble mess.

      • Gen Z says:

        Good read.

        Let’s hope that the FED continue the rate hikes and not pander to asset owning billionaires so that they can get cheap loans and get their stonks to the moon.

        Americans, and Canadians are becoming more aware of economic policy and how the current system benefits the asset holders.

      • El Katz says:

        When the LAUSD teacher produce a student that can add, subtract, and multiply plus complete a coherent sentence, they’ll be worth something. Most students can’t achieve minimum competency in reading, writing and arithmetic. Yet people wonder why this country can’t produce anything.

        Let them strike… forever. Leave the classroom and don’t come back. Ever. Plenty of trash to pick up along the 5… and 110…. and 105… and 610….

      • Randy says:

        You have good comments.

        But too many Americans seem obsessed with the 1% (or 0.1%).

        Huge numbers of middle middle class and upper middle class Americans (50 to 85% percentiles) benefit from owning assets: stocks, bonds, housing or any combination thereof. Of course they don’t benefit as much as the 1% in absolute numbers but still benefit mightily as supporting their standard of living.

        I’ll say it again: as to lifestyle differences…
        The lifestyle difference and opportunities between someone at, say, the 70 to 90% wealth&income level and someone at the 15 to 30% level is greater than between the
        1% (99% to 100%) and 70 to 90% crowd. Not in absolute numbers of course, but in stability, opportunity, and general contentedness.
        The 70% to 90% crowd sits pretty well with stability, opportunity, and general contentedness.

        I know deflation is a dreaded word but I wish we’d get it for 5 to 10 years.
        Deflation, not mere disinflation.
        Especially the necessities: housing. food, utilities.

        • Flea says:

          Housing will drop ,only really appreciated during Covid. Food not going down much ,too much demand . Energy has a 50 year supply,fossil fuels only going to appreciate,why do you think they’re pushing alternative fuel options . Money won’t save you rich or poor

      • MarkinSF says:

        You said a mouthful. Awesome comment.

  9. Jackson Y says:

    The past year of tightening has only brought home prices (and stock prices) back down to 2021 levels. Given we’re closer to the end of the tightening cycle than the beginning, the parabolic move since 2020 (which is already on top of a decade of price appreciation) are unlikely to be reversed.

    Buy-the-dip mentality is still widespread: every time mortgage rates retreat even a little, buyers flood into the market. Same with stocks.

    Policymakers have an enormous incentive to unleash the money printers every time there’s a hiccup in the economy. Not only do they enrich themselves spectacularly, the asset valuation gains are hard to reverse, and they don’t suffer political consequences either.

    • Depth Charge says:

      Lost in your assessment is how local wages would be able to support inflated house prices long term. Because they can’t. Brief speculative bubbles where house prices divorce from fundamentals because of money-printing are possible, but they ultimately pop and crash into oblivion.

      The long term trend of house prices reflecting local incomes has been the case for the entire history of real estate, save for the money-printing era. How do you propose they are going to levitate house prices above what local incomes afford. If they are able to levitate house prices, why are they crashing now, and why did they crash in 2008? Why wouldn’t they have just kept them levitated or increasing?

      • Jackson Y says:

        The “this time is different” reason is the rise of work-from-home (which is down substantially from 2020 but still far more common than 2019.)

        A lot of wealthy buyers from San Francisco, Manhattan, et al. drove up prices across the country.

        • Augustus Frost says:

          There is no actual “this time is different”. Just wait until rates “blow out” years from now, regardless of what the FRB does or does not do. Either that or the USD is going to crash.

          There will be no voluntary “printing to infinity” at the expense of global reserve currency status. The public, markets, and economy will all be “thrown under the bus” to preserve the Empire, with no reservation.

      • 91B20 1stCav (AUS) says:

        Depth – could be that many involved only know the money-printing era and wouldn’t study and integrate longterm history if you offered to pay them…

        may we all find a better day.

      • ru82 says:

        It is regional. The West region did take a pretty good price cut. 10% or more from the peak.

        My flyover region maybe is down 5%

        Black Knight came out with a report of affordability per 150 top MSA based on data from people who have mortgages. Worst city was Los Angeles. 63% of monthly income goes to the house payment. San Diego, San Jose, and San Fran were all above 50%. Other hot areas like Seattle, Miami, New york were all above 40%.

        Now in the midwest, many are still below 30%. The City I live in was 24%….up form 19% pre covid. 19% was very affordable. 24% is still affordable. The bottoms 10 were all from rust belt cities…and even Chicago and ranged from 20% to 24% Those areas are not in a affordability bubble.

        Zillow has a tracking report that indicates where most of your out of town home searches come from. The most searches were for my midwest city was from Los Angeles and Denver. LOL My realtor friend said the past two years 50% of her clients are from those two cities. There is affordable housing in the U.S. I saw another map and 40% of all counties in the U.S. median home price is below $150k. The the next 40% is below $350k. So 90% of the counties in the U.S. have median priced homes below $350k. It is just the top 20% counties are expensive. If you do not mind living far from Ocean, or in a desert city running out of water, or near a mountain range…there still is affordable housing. But investors are snatching them up.

        • ru82 says:

          posted before grammer check. LOL 90% of all counties have median home prices below $350k. Top 10% are expensive.

        • Lisa says:

          Affordability in Chicago includes neighborhoods that are not liveable; gangs, high crime, poor schools, a war zone. Decent neighborhoods with good schools and less crime are very expensive and unaffordable.

      • Junior Mint says:

        Local wages definitely don’t support house prices here in a small CA town, but it sadly doesn’t seem to matter. There’s no shortage of Silicon Valley folk moving in, and Baby Boomers buying second homes. A lot of houses sit vacant. A local realtor said a tech worker can get laid off, sell their house in Mountain View for 3 million, and then buy a house here all cash, and not even have to worry about finding a job. Is home ownership just for the wealthy now (and corporations), and everyone else is destined to be a serf? I hope not.

      • Flea says:

        No matter ,what haters say . I think your comments are great . As a realist people better wake up whole world is arming up militarily,never ends well. Enjoy life before 1 of these idiots = world leaders makes a mistake,unleashes a bomb ,computers take over ,lights out for humanity.

    • MM says:

      “Given we’re closer to the end of the tightening cycle than the beginning…”

      Is this a given?

      • Jackson Y says:

        Unless you see rates going to 9.5% or higher when CPI & PCE are currently below 6%, we’re closer to the end.

        • MM says:

          I don’t think that’s a far-out possibility… inflation normalizes around 5-6% and the FFR stays a couple % above that for some time…

        • rojogrande says:

          The nominal increase in rates is only one way to measure the length of a tightening cycle. I usually think of cycles as being measured in time. The first rate increase was one year ago this month. How long will rates stay at the current level or higher? I don’t pretend to know what Powell will do, but higher for longer is certainly a possibility. Particularly if the Fed pauses and inflation starts to head higher again. This tightening cycle doesn’t end until the Fed starts cutting.

        • ru82 says:

          I think 4.5% to 6% is a good long term range. This would probably prevent bubbles. Also not to high to cause recessions.

          It gives lenders a decent return on lending risk on cars, houses, etc.

      • Mark says:

        “Is this a given?”

        Close to the end ? With Powell’s Fed Funds Rate at 4.75 , when in 1982 Volcker took it to 16% ? With pretty much the same inflation today ( over 15%). Volcker just told the truth about the inflation, as did his CPI calculations. Something our new USA Chinese style statistics are terrified of.

        • HowNow says:

          Incidentally, when Volcker was raising rates, not only were members of CONgress attacking him and his policy loudly, but the real estate agents and brokers were apoplectic. He was literally hated by almost everyone. No one was coming to his defense except for maybe Reagan, who appointed him – probably remained quiet but didn’t criticize him.

        • rojogrande says:

          Jimmy Carter appointed Volcker in 1979. His appointment was probably something many people didn’t like heading into the 1980 election. Reagan did renominate him for a second term in 1983.

        • HowNow says:

          Thanks for the correction. I do remember watching Volcker on TV, stoically smoking his cigar, steadfast in his resolve, finally, to shut down the economy.

          It took some serious gumption to hold to his policy; people were ready to castrate him.

          I read comments about how he just jacked the rates up. No problem. But consider, lots of businesses, especially builders, were losing everything while this ran its course.

          When rates were lowered, the public was still shell-shocked. There was no “buy on the dips” or FOMO. People weren’t expecting another round of asset inflation by any stretch of the imagination. Everyone had gotten their clocks cleaned and were on good financial behavior.

          For a while, at least.

        • rojogrande says:

          From interviews I’ve seen, Volcker had the support of both presidents to get the job done. I’m not sure that political will exists today.

        • eg says:

          Volcker’s goal was to crush construction labor wages, and he succeeded (along with triggering a deep recession).

          How he has become anyone’s hero is something of a mystery.

      • MM says:

        “This tightening cycle doesn’t end until the Fed starts cutting.”

        Agree – inflation will get a LOT worse if Jpow cuts rates, and I think he knows it this time.

      • Augustus Frost says:

        The 39 year interest rate cycle turned in 2020 and will last for decades.

        The last upswing in the cycle lasted from the 1940’s to 1981. This one is going to last decades and interest rates will ultimately blow past the 1981 high, due to both psychology and fundamentals.

        It’s not linear though and yes, there will be counter movements within the larger trend.

        The long-term fundamentals of the US absolutely “suck” and living standards are going down with it.

        • MM says:


          Some seem to think doule digit FFR/mortgage rates are about as likely as an alien invasion, but that just seems like a reversion to the mean to me…

        • old school says:

          I am not sure the trend is over. Pandemic and MMT was a special event that blew up prices. Let us see where we are when we complete the recession. We might be at new lows. Rates have to reflect what your society can service.

          I think it depends on if Fed is determined to get inflation to 2%. If so, I see lower rates ahead.

          I am not a gambler either way though. My current treasury duration is about 1.8 years.

  10. Appletrader says:

    All you wanna be homeowners make me laugh when you call for a housing collapse! Bought in 2016 and sitting on a low interest rate, yet you think sellers will capitulate? When 99% of mortgages are sub 6%? Lol. There’s one metric I love keeping up with and it’s not my home price – that’s irrelevant – rather, I enjoy watching the average rent in my city increase month after month, knowing it affects me zip! Perhaps a simple study of supply and demand will illuminate the future of things

    • Phoenix_Ikki says:

      Man, time must be desperate for a RE shill, possible a RE agent to post something like this here, I give you a A for effort…pretty funny though, thanks for the laugh.

      • Appletrader says:

        The fact there is an echo chamber around similar topics in the comments section and any dissenting point is called shilling, is sad. I didn’t realize you guys spent so much time on Reddit

        • LK says:

          It’s almost like anonymous posting eventually creates a toxic environment for discourse. Who knew!

    • Minutes says:

      Kunal’s sister has entered the chat! People are less hoping for collapse than actual realism. Also hate to tell you but collapse did indeed happen in 2008. This doesn’t need to look like that but surely reversion to the mean is likely.

      • Appletrader says:

        Pullback is normal, those waiting for 50% haircut though will die renting

        • Gomp says:

          Me thinks 60% when the employment picture collapses.

        • Fed up says:

          Where did you get your crystal ball? Must be a pretty good since you are so sure of yourself.

        • LongtimeListener says:

          Its hilarious you think its impossible, and are even smug about it!

          It takes no effort to find current listings that have gone up over 200% in 4 years, which is equally as absurd as thinking a place could drop by 50 percent.

          Yet here we are. We are to accept ludicrous gains, but not ludicrous losses?

          The only remaining fundamental supporting housing prices is lack of inventory.

          The liquidity and rates that fueled housing are gone. The People, investors, and banks in untenable positions are in the process of being exposed; it will take a little more time, and while I would not bet on a 50 percent drop, don’t think it an unreasonable possibility.

    • Kurtismayfield says:

      People die, people divorce, people move.

      GL stopping all that.

    • SDKen says:

      68% increase in the rate that they are capitulating according to Wolf’s last chart in the article. It looks like about the same rate of increase the previous year. You were wrong the second you started typing.

    • qt says:

      SoCalJim, is that you?

    • Depth Charge says:

      When house prices collapse by 75%, nobody wants to keep paying the mortgage on a pressboard box that’s only worth 25% of what it was. The rate means nothing at that point. Sit down, fool.

      • Appletrader says:

        Lol if prices cut back by 75% black rock would swoop every house in existence and happily own a monopoly on landlording.

        Check out what happened to prices last time we had years of inflation. As Wolf points out these are cumulative (they never reverse!) and in a few years we’ll break all time highs

        • Ethan in NoVA says:

          If one person doesn’t pay rent then they get evicted. But if everyone joins together and refuses to pay rent (rent strike) then the corporate landlord has a problem!

        • Depth Charge says:

          I think we smoked out a speculator who bought at the peak. You won’t even be a memory around here in 6 months.

        • Augustus Frost says:

          Prices weren’t in a bubble in the 70’s.

          You do know that, don’t you?

        • Gattopardp says:


          “if prices cut back by 75% black rock would swoop every house in existence…”

          No, they wouldn’t. Dumbest thing I’ve read in awhile. You apparently don’t know anything about BlackRock, their clients, and the difference between them and BlackSTONE.

        • Wolf Richter says:


          LOL, that trips people up ALL the time.

        • grimp says:

          Blackrock would be insolvent if RE drops by 75%.

      • Just another 15x millionaire says:

        I have an 830 credit rating. Damn right I would keep making payments if my investment fell 75% in value. Some people are motivated by more than the bottom line. When I bought a bunch of rentals 2008-2012, I was acutely aware that I was qualifying for loans when others couldn’t, due to my credit score. I tell young people who don’t have down payment money, “The best thing you can do right now is to pay all of your debts on time and get the highest credit score you can, in preparation…”

        • grimp says:


        • Phoenix_Ikki says:

          Didn’t know Dave Ramsey like to post on this forum too…I would be starstruck if I don’t loathe that SOB as much as Musk..lol

        • NBay says:

          A true American hero!

          What are you doing here?….just slumming it for kicks?

          Obviously don’t know about Pearls and Swine?

    • Fed up says:

      In my area, property taxes and insurance are going through the roof. That will keep getting worse. Have fun with that. Repairs cost a fortune since 2020, so there’s that as well.

      • Appletrader says:

        My property taxes are capped from gaining more than 5-6% a year, I pay around 2k annually

        Are they? I had to replace water heater ($1700) and outside AC unit ($5800) last year. Those were indeed expensive, though given how long the replacements last I think I’ll be fine. Have dodged almost all the inflation bullets by cutting back or shopping around.

        I can’t reply to the comments right above this but once again, lol @ anyone who’s ever gotten a good deal in real estate automatically being an industry shill, or one who bought at the peak! Unemployment is at 3.6% and we’re talking about the impending housing crash, LOL. Look at wolf’s charts on the labor force and the trendline we’ve yet to reach. We are years away from mass job losses so put away your crystal balls because without 8% unemployment housing is going nowhere!

        • Fed up says:

          Most don’t have the luxury of capped RE taxes. Insurance is high, and as you pointed out repairs are also high. I’m just saying home ownership is not necessarily a panacea anymore. It used to be a better bet, and I was always pro homeownership but on the fence now.

        • Gattopardo says:

          “My property taxes are capped from gaining more than 5-6%”

          Is that good? Sounds like a lot to me.

        • Appletrader says:

          Maybe other states are different, but here in Nevada there’s a form you fill out at the same place you do a homestead that exempts you from large tax increases as property values rise. Only applies to primary residence. I just looked it up and it’s actually 3% (did it a long time ago) and yes that is good, as it’s a 3% cap on the actual tax bill. Otherwise I should be paying twice as much

          Buying a home is a long term play and you shouldn’t bank on immediate accretive value. However I’d be hard pressed to find someone who regrets it after 7-10 years

        • Randy says:

          I dont think you’re a re shill.

          But as to:

          “However I’d be hard pressed to find someone who regrets it after 7-10 years”.

          Meet me. Lost 8% on the new home purchased in 1986. Ten years later.
          Would have been much better off renting (cheaper than mortgage + prop. taxes + higher utilities + maintenance) and investing my savings in the stock and bond markets. Have never bought a home since. Strictly stocks, bonds, MMs and CDs.

          If homeownership rates fall in US not sure if that could lead to class warfare.
          No precedence for it here in US.
          I do wonder about it but most poor people tend to associate with gender, race, ethnic or political groups as opposed to “class” (wealth) groups.
          Not sure they even give it a thought.

        • Lisa says:

          It seems you only see your situation and are speaking for yourself.

      • Wolfbay says:

        In our nw Florida town our in-laws property insurance went from 2000 a year to 8000 a year because they have a mortgage and the house has been deemed “historic”. That kind of increase hurts.

    • Escierto says:

      In my neighborhood of elderly homeowners, there is a terminal capitulation every week! The homeowner dies. Low interest mortgage or not, it’s another house that needs to be sold pronto. When my father died, my siblings and I weren’t about to hold into his house for years waiting for the market to go back up. We unloaded it at a price to sell.

    • Petunia says:


      You are sitting pretty until something bad happens, job loss, illness, divorce, etc. When any of this happens to you or your neighbors, your entire neighborhood will be affected buy forced selling. And rents will drop too.

    • grimp says:

      The National Association of Gaslighters is out in full force with their seasonal bump.
      cherry pick MoM when seasonal helps, but poo poo it when it doesn’t.

      • Appletrader says:

        I’m reminded of buffet’s quote about the farmer neighbor yelling out stock prices every morning when he wakes up. Boring! Who cares. Market could value my home at one dollar and I’d laugh, as it still provides me value and a place to live.

    • old school says:

      If you have lived long enough, you probably have seen many neighbors be forced sellers due to unhappy wife, divorce or job loss/transfer. I even had a neighbor hang himself. Life happens.

    • Steve says:

      in 2008 a renters collapse wiped out many r.e empires because owners ran out of money paying their own mortgages. This same scenario has just started and will repeat. So many delusional investors always thinking there will be a renter around to pay a sky high rent. Massive layoffs upcoming. Dreams of wealth and retirement dashed again. So many blindsided by greed that they don’t even believe the GFC even happened or will repeat.

  11. Phoenix_Ikki says:

    Decline? Never!! Getting ready for some good laughs as we will likely see something like below being echo louder and louder in the comments Spring season will save us all right?…FOMO is coming back now after Daylight saving time is officially over..lol

    “This time is different and definitely not in my area in SoCal….”
    “There’s still so many people that are waiting to buy…”
    “It’s just a gully, it will spike back up in Spring, if not level out under worst case…”
    “Everyone bought at 2% mortgage, no one will be selling…”
    “Yeah home price is high but adjusted for inflation, it’s not that bad…”
    “What goes up will only go up. Real Estate is a no loss proposition…”
    “Millenials will create crazy demand to drive the market up again…”
    “FHA is now doing 40yrs mortgage..it will create demand and prevent market from crashing…”

    • John says:

      Over the weekend I showed a home priced perfectly @ $350,000. It was the only active listing in the subdivision and the past solds were in the $375,000 range. It was listed on Friday 3-17-23. I showed it on Sunday and from the amount of business cards on the kitchen counter the home had been showed by many Realtors. The Seller was going to look over any offers on Sunday night. When I submitted my Buyers offer the Sellers agent informed me they had 18 offers! This area still have too few listings and if it is in the lower price range and listed at the right price it will be the only game in town. BTW my Buyers are financing with minimum down and are more than qualified even with ordinary blue coller jobs.

      • San Diego RE says:

        Yep! Multiple offers is what they report from San Diego as well. Surprised wolf didn’t delete your comment.

        • Wolf Richter says:

          Same data-less stuff about “bidding wars” “over asking” (after asking was cut by 30%, LOL), “price jumps in my town,” and the like.

          Sure, you might get three offers, then two fall through, one sticks, then gets renegotiated down by $100K because the mortgage rates went up and the old deal didn’t work anymore. Happened to a friend of mine in Portland. This deal was “multiple offers” too, LOL.

          In San Diego:
          median price; -1.5% yoy; -10% from peak
          sales: -33% yoy

          Declining prices amid plunging sales is a dead-giveaway that this is NOT a booming market. Get real. Data via California Association of Realtors.

          RE Trolls need to go to RE hype and hoopla sites. They’re happier there. You want to promote RE on my site, you need to buy an ad and pay for it. You don’t get free promos.

        • Pea Sea says:

          Wolf, there’s simply no sense in denying that animal spirits returned to many regional RRE markets in late January and February, when stocks were rallying and pivot delusion was driving mortgage rates down.

          As you yourself like to point out, nothing goes to heck in a straight line. And the initial drop in any bubble market is often followed by a “return to normal” (that then reverses again). Why pretend it isn’t happening?

        • Wolf Richter says:

          What we have is a weak spring selling season, up from deep-dismal level in Nov, Dec, and Jan, with sales down a WHOLE BUNCH from a year ago, prices down a tad yoy (down lots in some parts and up in others). This is the shittiest spring selling season so far I’ve seen in over a decade.

          It just doesn’t seem that way because Nov, Dec, and Jan were so horrible.

        • The Bob who cried Wolf says:

          A realtor I know is buying a house in a really nice location near downtown in San Diego and keeping his old house a little further east but still in the city. I asked him what his plans are for the old place and he said he had no intention of ever selling it…you guessed it, he’s got a 2.6 fixed rate. He confirmed that many folks are not selling their locked in low fixed rate places as they move and are becoming accidental landlords. Other clients are retired folks from all over the country who are coming in with disregard for rates as they’re dumping cash into a place. We’re talking serious dough coming into this town buying places. The cash offer guys who want to flip and/or ADU a place are on fire, too.
          Sales are down here in large part, if not almost wholly, because of the lack of SFR’s available; and barely any are being built. Facts and figures are always good for reading the market and see what it’s done, but anecdotal observations and discussions with those actively involved in the particular locale can be very revealing as well as predictive. I think there’s gonna be a few shocked folks on this site as San Diego numbers come out in the next few months, and I’m talking price, inventory, DOM etc, not sales volume (inventory here is next to none).

        • Wolf Richter says:

          If you put a vacant home on the rental market, like you realtor might want to do, you’re putting it on the market! Competing with everyone else out there, pushing down rents, etc. Then there’s an arbitrate going on in the market, whether to buy a house or rent a house, if the rent is right, and so people switch to renting… several commenters here have said just that, put their home on the market and rented. This is not an instant process. But it does work.

      • Depth Charge says:

        Pinocchio, I mean John, this is the exact OPPOSITE of what the data shows. Lie much?

        • John says:

          I am the biggest bear in my real estate investment group. I only am reporting what I experienced. This most certainly is not the norm for my area and I am not a cheerleader. This is one of the most important blogs on the web and is so informative! Please don’t get me wrong I feel by mid may listings will be still historically low but will greatly out number buyers and put more pressure on pricing. OMG I am Not seeing a turnaround! This particular entry level price range is still super tight. Sorry Wolf, I will just hang on the sidelines. Your work is exceptional!

        • Pea Sea says:

          The data shows that more and more people are wearing blue shirts, therefore I cannot possibly be wearing a green shirt.

      • Fed up says:

        I don’t believe you. Prices being reduced in AZ. “Better buy now or be priced out forever,” lol. Shades of 2008. Typical realtor.

      • Lune says:

        So the house sold ~8% off its peak price (not sure if the asking price was met), and you call that a healthy market?

        Any person who bought at the peak you cite, $375k, assuming that the house is now worth $350k, has lost half of his down payment — probably the biggest chunk of his net worth — in about 6 months time. In your world, this qualifies as a good buy?

        Whichever knife catcher manages to snag this winner will be facing the same devastation of a big chunk of his or her lifetime’s savings if/when the house falls a further 10-20% over the next year.

        • John says:

          Let me respond to to what has just been said.

          A) Looks like the people commenting on this site have preconceived negative opinions about all Realtors! Some for very good reasons.

          B) My post did NOT state the recent closings were Peak Pricing.

          C) I did not indicate this was a good buy. “In your world, this qualifies as a good buy?” It just is-what-it-is. What is my world?

          D) “I don’t believe you. Prices being reduced in AZ. “Better buy now or be priced out forever,” lol. Shades of 2008. Typical realtor.” How do you read that out of my post unless you have a negative bias towards realtors. Prices in my area have moved down around 15-20% I look for a bit of a flatlining now till June-July then the crash is back on. No one is disputing housing is in big trouble.

          FYI I am the last Realtor to defend the overly optimistic NAR!

          Some real time correct reporting from ” Boots On The Ground” has to be helpful to anyone studying the housing market. most Data is 30-45 days old as deals take time to close and get recorded. Most reports Wolf refers to like Case-Shiller is almost 2 months old. If you alienate Realtors like me from sharing information the “bottom” will be months past before you can see it and you will have lost an opportunity.

          Gosh I could say many things about people who post here but choose to be courteous.

          This country has been purposely pushed into such a divided mess that people are not able to look at anything with an open mind. Sad

        • Fed up says:


          “This country has been purposely pushed into such a divided mess that people are not able to look at anything with an open mind. Sad”

          No, sorry, that’s not the problem. I have personally experienced one too many unscrupulous realtors in my life as have many others. I stand by my original comment. I am not interested in any data or analysis presented by a realtor, but I’ll refrain from commenting on your posts in the future.

      • Me too says:

        Supply is the problem and will be for the foreseeable future. Prices will “ settle” but not collapse as some here have predicted or wish for ( which makes no sense).

        • Fed up says:

          But inventory will increase. Sellers won’t hold on forever. Job losses and other things will force them to sell. Right now, I bet many are holding on by a thread hoping for a rebound. If that doesn’t happen, they will have no other choice but to sell.

        • Flea says:

          Layoffs just getting started ,20% of companies are zombie’s,wait a year and comment again

        • Bobber says:

          I see indications of seller anxiety setting in.

          Look at the makeup of recent sales. The sales mix is now heavily comprised of sellers who owned their homes for 20 years or more (downsizing retirees without a mortgage, and late-life transitions) and sellers who bought their homes in the last three years (investors/AirBnb trying to recent secure gains or avoid losses, 2021/2022 FOMO buyers panicking to avoid losses and foreclosure situation, WFH being called back to work, layoffs, etc.), and builders trying to reduce inventory and keep business going.

          These are highly motivated sellers.

          Buyers, on the other hand, aren’t so motivated. There may be a few dim FOMO buyers, but their numbers are dwindling quickly as the downward trend continues, and many of them won’t qualify for mortgages with smaller banks facing liquidity issues. There are always young people who want to buy houses, but they have their whole life ahead of them. They can wait for prices to drop, enjoy the wage increases, and accrue savings at 5% a year.

          Frankly, predicting the future course of RE is very easy today, relative to the past. There are only a two or three things that matter, and they all point to downward pricing (i.e., interest rate trend, price trend, loan standards). The rest is noise.

          How can you look at the charts and NOT see the future!

      • Randy says:

        I’ve been renting for 26 years. Experience with realtors, mixed at best.

        That said too many comments here seem out of line. Your rebuttals below had more substance than the mostly, to me, unjustified attacks.
        Statistics are great but can hide a lot of important information.
        How many people here understand Simpson’s Paradox ? No… I encourage you to read up on it.

        A simpler example. Stock P/E ratios.
        Someone says “oh boy they are low, must be a good time to buy”.
        But if they are low because earnings have been historically extremely high then that suggests the corresponding stock(s) may not be such a good buy after all. It could be, but caution would be warranted as those earnings will probably mean revert (the p/e adjusting down as a result).

        Heck right now everyone here knows that the Western US has been hit with price declines (peak to trough) much greater than seen in the Midwest and Northeast. The nationwide statistics mask these large (to date) differences.
        Its great that Wolf shows stats and graphs for individual regions and cities.

        You could have me fooled, but I don’t assume you are fabricating info. As someone wrote below you are the person wearing the green shirt even though most are wearing blue (or vice versa).

        Peace y’all (yinz, Pittsburghers).

        • Randy says:

          Fed Up,

          Correct. Not forever. But…
          My brother and his wife have lived in the same house for about 50 years. Bought it in 72 or 73.

          I realize this is an outlier but its not as if all these 2.75 to 4% folks are going to need to sell in the next 5 years either.

        • Fed up says:

          No one is saying ALL will, but many will.

      • Seen it all before, Bob says:


        “I showed a home priced perfectly @ $350,000. It was the only active listing in the subdivision and the past solds were in the $375,000 range.”

        Can you tell us what it sold for? Also, when were the comps sold for 375K?

        If it sold for asking, it is 7% lower than the comps. This would show a 7% decline in prices. It is close to what Wolf is reporting.

    • El Katz says:

      Daylight savings time is officially over? Ummm…. no. It just started.

      The “spring selling season” doesn’t seem as important as it once was. Why? Not as many rug rats being spawned. The “spring selling season” was necessitated in order to buy, close, move, and get the munchkins situated before school began in the fall…. Now, the school schedules seem to have moved around to provide more frequent short breaks and shorter summers to accommodate dual working parental units which results in a more fluid schedule.

      Selling seasons are often dictated by what area of the country you live in and the type of property you’re wanting to sell. Here, in our little slice of heaven, most buyers are in the market from September until May… and disappear during the summer, because they are here looking for a seasonal or retirement home. They begin the hunt while renting for the winter as they escape the frozen wasteland they call home.

      Nothing Appletrader said reeks of real estate agent. What he said is perfectly logical based on his experience and situation. He bought in 2016 before things went totally nuts. He has a low mortgage. His costs are reasonably static but for property taxes and other variables – some controllable, others not. (We carved $300 per month out of our budget by reconfiguring things like…. cable TV vs. streaming and switching broadband providers). As he said, there’s likely millions similarly situated.

      We went through the same math problem with my daughter during the last downturn…. her apartment rents were skyrocketing every renewal, so we encouraged her to buy a house…. and, all in, she had housing for under $2K per month (including mortgage, taxes, insurance, utilities, and repairs) vs. the $2,500 for rent alone. Her maintenance costs were low due to my being her “handyman”. This was in the East Bay of San Francisco. Her apartment rent of $2,500 was for a 2 bedroom/1 bath located along the BART tracks in Lafayette, CA. Her house was a 3/2 with a garage. Funny thing was, when she did decide to sell, she got her down money back, her carrying costs back, her improvement money back, and walked away with an additional $200K in her pocket…. in her early 30’s. The government paid her to buy the house (first time buyer credit of $10K), which pretty much covered her PITI for the first year (okay, 9.5 months). She sold to fund her education necessary to change careers while still young enough to do so.

      People, who aren’t total nincompoops, know how and when to buy and sell things. I read, with amusement, the comments on here from people just discovering brokered CD’s and how they act like they are some kind of fiscal genius in their attempt to beat the .1% bank savings rates. I’ve been doing that for years (since 1992)… and, with proper discipline and expense control, I show steady increases that provide me with an income that I can’t reasonably spend without purely wasting money. That’s the purpose of all of this…. generating income to support your lifestyle and that of those you care about, not “stacking” for the sake of it.

      If you play the long game, you’ll always do better than those who only swing for the fences. Lots of Wall Street Bets people went from caviar to being a busboy following that strategy.

      A business acquaintance of mine, back in the late 1980’s, bought his first Ferrari and had a license plate frame on it that read “the one who dies with the most toys wins”. I looked at him and said… “Yeah, but you’re still dead”. For that, I received an excellent “BDL” (Big Dumb Look) that I treasure to this day.

  12. John says:

    If the chart of Existing Home Sales NOT seasonally adjusted is for Closed Transactions then the buying season winds down in May, which seems more accurate from what I have seen in the last couple of years here in Reno Nevada. A listing goes Pending but takes 30-60 days to close. A couple of things that happen this time of year is most buyers get out early thinking they will beat the crowd and get a better deal but more importantly, Sellers have great intentions of getting on the market in February or early March but that rarely happens with my clients. The Seller just underestimates the time needed to clean, move stuff to storage, fix issues, or last but not least get the tenant out! The result is a big portion on new listings come on in late April and the pool of Buyers is already shrinking. This is all real time stuff.

  13. Swamp Creature says:

    Looks like the only area that is holding up here is in high crime neighborhoods. The only affordable housing is in these areas and people are willing to take the risks. People here are desperate to get into the housing market. The housing is all recently renovated properties that have just been put on the market. If priced right, they sell fast. They all have neighborhood watch patrols.

    • Kurtismayfield says:

      Crime rates are still lower than they were in the 90’s. Did you gear for your life back then? I didn’t.

      • Lynn says:

        The risk is higher. I lived in a war zone in the 90s and now live in a low population area with mixed income. I still say the risk is higher, at least in California. They let them go right away. We have had several cases locally where potentially violent unstable people have been let out of jail just after arrest and murdered some random individual. That wouldn’t have happened in the 90s. So the overall crime may have gone down but the potential of violence certainly hasn’t.

    • Swamp Creature says:

      The crime in the 90s was drug dealer killing drug dealer. The crime now is more of a random nature. There are reported to be 70,000 convicted felons walking the streets of Washington D.C. They were let out early because of overcrowded prisons and many are repeat offenders. Only 8% of serious crimes are closed. I say this may be worse than the 90s. But all of this doesn’t seem to be affecting property values in these areas. They are still appreciating, though at a less rate than a year ago. The VA is offering Mortgages at 5.7%. What a deal!

      • Anthony A. says:

        I never had a mortgage with that low of an interest rate and since 1976, I have bought 7 houses. Geez…

      • NYguy says:

        How many of those 70k are politicians and lobbyists? ;)

  14. Bubbajohnson says:

    A bubble is a bubble. Successful well managed RE Companies bit the dust last time. I expect this bubble to be worse. Still lots of opportunity is the long and short of it.

    • old school says:

      Yep. All the leverage that makes you rich in the 10 year long expansion can bankrupt you in a 2 year recession. You can go from genius to fool pretty quick.

  15. The Big Guy says:

    I have been watching new listings in our area almost daily because my daughter is hoping to buy a house in the near future. I’m really only working on my “gut feeling”, but it feels like prices haven’t changed much recently, either up or down. It’s hard to get a good read, however, because there just aren’t that many new listings lately. The listings that show up with a “not ludicrous” price are only lasting a few days before being snapped up. Apparently there is still pent up demand in my area. I hope for my daughter’s sake that a decrease in prices becomes evident soon because most everything has been out of her price range.

    • Roger Ht says:

      Yep. There aren’t enough listings! Key phrase. So many perma bears don’t get that concept of low inventory.

      Can’t have a crash with historic low inventory

      • Wolf Richter says:

        There are NOT ENOUGH BUYERS AT THESE PRICES and RATES. So many RE trolls don’t get this simple fact.

        And don’t worry, the sellers always come out eventually. They did last time too, always happens.

        • Krumheuer says:

          There is not enough INVENTORY because sellers don’t want to give up their 3% mortgage.

          Of course demand is down but if there is no inventory you can’t make a deal buddy

        • Wolf Richter says:

          This is irrelevant in terms of inventory. It only matters to Realtors because they get paid commissions on each sale.


          When a homeowner sells the house they live in, they then have to move into something else, and end up buying something else. So: 1 house comes on the market and 1 house is taken off the market and the net effect on inventory is zero (+1-1=0).

          The events that increase inventory are these:

          1. vacant homes that are now held off the market are put on the market (this can be hundreds of thousands of homes that show up suddenly).

          2. Homeowner dies or moves to nursing home or moves to a rental or moves to another country to retire more cheaply, or moves in with kids/parents, etc. and the home is put on the market, and no home is taken off the market.

          3. New homes are being built.

        • Moi says:

          In my rental (mixed with owner occupied) area prices have dropped 15% in 6 months but sellers still popping up at discounted prices. Sign of the bottom is when the investor class shows up with a scoop. Could be a year before it hits a low at 50% down. People who bought cheaper than that don’t care.

        • Juliab says:

          Ahaha, wolf that sounds ominous for sellers.

          By the way, 1 year ago when I first found your site I wrote a comment. At the time, the Fed had not yet started raising interest rates. My comment was “Do you really think the Fed is going to bail out property owners and builders and billionaires at the expense of inflation and ordinary people, that’s unlikely to happen” And here we are now with 4.75 and more. 25 on Thursday. People need to understand that if the Fed backs down, this time the White House will most likely be taken over and destroyed by a hungry mob

      • Phoenix_Ikki says:

        RE shill is a funny bunch. See what that active inventory chart is looking like? Does it look to you like inventory will continue to remain low? But it doesn’t matter I guess, that’s the only handful of counterpoints you guys have left along with the other dozen that I listed out above.

        Here’s a free one for you and one that I would be more inclined to be entertained by instead of the same old Lawrence Yun talking points

        “These data showing the reversal of price is all fake news, rigged data! My cousin’s first husband’s neighbor just saw a house sold in less than 2 days so this trend data is total non-sense”

      • jon says:

        Despite low in inventor, real estate in san diego has gone down 1o% plus from the peak.

        Remember, real estate like stocks are priced at the margins.

    • Bubbajohnson says:

      If you can find a licensed agent you trust, run the recent sales comps. MLS listings may not always show the baked in numbers compared to the sold price. Agents are supposed to list the numbers separate but do not. Should give you an idea on current sales.

      • Fed up says:

        That’s a big if lol.

      • josap says:

        Price sold is recorded from an Affidavit of Value, signed by both the buyer and seller. This is also overseen by the Escrow Co and recorded with the County. No way to miss-state the numbers here in Az.

        • Bubbajohnson says:

          Sure and could be the way AZ does it. Some MLS s allow the agent to omit sellers prepaids or other $ s paid on behalf of the buyer. The total sale amount includes Buyer prepaids that show up in the total sale amount.

    • Lynn says:

      New homes on the market compared to sold homes in the same time frames have definitely gone up in my area. I keep tabs on that. There is a small surge right now that started just after the 2 banks went down. Each time the stock market goes down there is also a small surge in homes put on the market.

    • Bobber says:

      I think the distorted Fed policy the last couple decades is actually breaking up families now. If you are on the West Coast, many younger family members will not be able to buy a house in the area. It’s hard to keep a family together if housing isn’t reasonably priced.

  16. John says:

    “The median price has fallen by 12.3% from the seasonal peak in June 2022” Wait till this June yoy numbers come out comparing to last June (The All Time Peak) That will be Most Splendid!

    • Alec says:

      I was going to say the same thing. Things are gonna get weird in June when YOY price declines are in the double digits.

  17. Spencer says:

    George Baily’s: “Its’ a Wonder Life”) ended in 1965. The upshot was that the commercial banks sought to get a bigger “piece of the action”. To wit:
    The “Go-for-Broke Banker” Ron Chernow:

    “A sworn fore of bureaucrats, Mr. Wriston often joked: “Regulators sit by while snails go by like rockets.” He devoted much of his career to diving through loopholes in bank holding-company legislation or wriggling free of interest-rate restrictions.”

    The DIDMCA destroyed the thrifts, turning them into banks. Hence, the S&L crisis (as predicted in May 1980).

    Then we had interest rate suppression, which stoked existing assets. Now we have permanent stagflation.

  18. Spencer says:

    Lawrence K. Roos, former President, Federal Reserve Bank of St. Louis and part-time member of the FOMC (the Fed’s policy arm), was cited in the Wall Street Journal’s “Notable and Quotable” column, April 10, 1985, as follows:

    “…I do not believe that the control of money growth ever became the primary priority of the Fed. I think that there was always and still is a preoccupation with stabilization of interest rates”.

  19. William Leake says:

    The second graph “Median price of sold homes” is the most interesting. From it one can see the drop in price from a peak of around $410,000 to around $360,000. Homeowners who want to sell thinking their house is worth more than the peak have to realize they just lost $50,000 by waiting to sell. This translates into a loss of over $6,000 a month, not chump change.

    Sellers have to understand that their home which may have doubled or tripled in value on Zillow means nothing until they sell it and the money is in the bank. Of course they will try to wait it out, but some people have to sell now (job relocation, retirement, etc.). They might end up being the smart ones.

    The average 30-year fixed rate mortgage since 1971 is 7.75% (source is Federal Reserve Economic Data). Let that sink in.

  20. FastEddie says:

    I pulled the five newest listings from one of my favorite Northern MT cities; the table below lists the last purchase date/price, current listing price, and $/% increase. The only restriction for the five newest was that it had to have the last purchase price shown (so excludes houses bought, say, 20 years ago).

    Purchased Now Listed
    05/21 – $715k 3/23 – $1,150k (up $435 / 60%)
    10/20 – $839k 3/23 – $1,495k (up $656 / 78%)
    01/21 – $759k 3/23 – $1,300k (up $541 / 71%)
    11/20 – $350k 3/23 – $ 759k (up $409 / 116%)
    10/20 – $239k 3/23 – $ 350k (up $111 / 46%)

    All owned less than three years; the percentage increases speak for themselves.

    Realistically, will the market support a 60+% increase in price in 2 years coupled with a doubling of interest rates? Despite what the media cheerleaders say, it can’t.

    Consider the first house in the list – if sold at the asking price and at current interest rates the monthly payment would be roughly $7,600 (no DP, excluding taxes and insurance). The current owner is paying roughly $3,000 per month based on the purchase price and interest rates in May 2021.

    Continuing with House 1, at current purchase price the monthly PITI would be around $8k or $96k per year. At a 35% tax rate, a buyer would need roughly $150k of their income just for the PITI. And if the payment of $8k is kept to a “reasonable” 40% of income, the purchaser would need an income of $375k per year. Not many people in Northern MT making that income (Median income in the area is $55k). For house 1, at current interest rates, a $3k mortgage payment would support a selling price of about $420k – 60+% below asking and 40% below the purchase price).

    Owners can ask any price that they want; if they want to sell they need to meet the buyer where the buyer is

    Math really isn’t that hard.

    • jon says:

      Good depiction of numbers.
      Real Estate pumpers are bad at math and it paid them so far for the last decade or so.

    • Randy says:

      MT as in Montana ?

      Glasgow and Kalispell (and Butte) get extremely cold. My DNA isn’t right for them but great for those who like it. As the saying goes ” you couldn’t get me to live there for free”. Unfortunately I can’t afford to live in the moderate climate parts of the US. So I make due where it’s 4 seasons but only 75 to 80% as harsh as the aforementioned cities (Missoula isn’t too bad). Montana is a pretty state though, western half anyhow and tough people. Have to be !

  21. SnotFroth says:

    Just in time for the California state government to get in on real estate speculation with SB 197 “California Dream For All Shared Appreciation Loan Program”

    My limited upstanding is that .gov pays your 20% down though a “silent second” mortgage with low or no interest, and, in return, they get a ~20% stake in the sweet price gainz when you sell.

    This program is purely about juicing demand, once again in the face of supply shortages. I wonder how prices will react… hmmmmnn…

    And now that the government has another vested interest in RE price appreciation, I wonder how motived they’ll be to actually build more affordable houses. Maybe the state government will become the NIMBYs in areas where they have a lot of “shared appreciation” investments.

    • Wolf Richter says:

      California has a big budget deficit right now, though it still is sitting on a lot of pandemic cash. But that is going to run out eventually, and then they’re going to be thinking about what programs to cut out. Maybe I should send them a reminder about this, LOL

  22. SOL says:

    I have a sign that says, “The bubble is popping tomorrow…”

    It keeps me motivated everyday.

    • Phoenix_Ikki says:

      You should make another sign that says “Inflation is transitory…” that way you have one sign for motivation and one sign for a good laugh. Heck add another one that says “It’s always a good time to buy real estate…” for double dose of laugh.

    • Wolf Richter says:

      You can put that sign away. The bubble already popped.

      • rojogrande says:

        Have you considered demotivational speaking? ;-)

      • Randy says:

        Jeremy Grantham (he’s in his 70s or 80s ?) of GMO had been warning about the Everything Bubble for a few years.
        Still does. He typically is bullish on Emerging Markets.

        He had an interesting article a few years ago about things society should be concerned about. He included climate change.
        But one I hadn’t heard before was top soil running low in the plain states (farmland).
        Had been 9 inches (?) on average now down to 3 u believe.

        Smithsonian magazine and the Guardian both have articles concerning serious topsoil erosion/depletion around the world.

        • Randy says:

          My Jeremy Grantham reply didn’t seem to go where I wanted. Its in response to:

          No Way Out’s comment below.

        • Phil says:

          My family has acreage in OK, since the 50’s. We lease to someone we know well, for many years, even though far apart. He’s conscientious. Rotates crops. Puts cattle on it at times, of course. Let’s it go fallow some years, with the right crop on it. (I wish I had been an Ag major. My brother was.) At the end of the day, the honest guy who farms it (part lease/part share) takes care of it, because we’re going to sell it to him in a few years. It’s understood between us. I don’t buy the 3 inch thing.

        • 91B20 1stCav (AUS) says:

          …wholesale destruction of the topsoil/regolith is nothing new. Re: our domestic struggles with this I highly recommend ‘The Worst Hard Time’ depicting the Dust Bowl and its effects on the Plains states back in the ’30’s and our nation’s efforts to offset the damage (successful and not), and improve soils conservation.

          Like it or not, fact remains that we’re all just riding and relying on a spacecraft, albeit a large, and super complex,one. Defer systems maintenance and, to reprise Garcia/Hunter, “…trouble ahead, trouble behind…”.

          may we all find a better day.

          may we all find a better day.

        • Randy says:


          I was off a bit.

          White paper “The Race of our Lives Revisited”. August 2018.

          Iowa county. 1850 14 inches topsoil.
          Down to 4.8 by 2017. Grantham is not an expert but they did some research and claims 4 inches is good, 3 will get you by. Only 1 and half inches margin now.
          They (farmers) have halved the rate of erosion.

          Grantham focuses more on climate change, which believe me, i am well aware, is heavily debated.
          See skepticalscience.com website for CONSIDERABLE debate on all things climate change related.
          No, the site is NOT hosted by skeptics.
          They actually are mainstream but skeptics argue their positions there.
          Very technical discussions mostly.

          Topsoil discussion: Pages 19, 20 of his white paper which I only briefly scanned.

  23. Orangecats! says:

    Here’s my RE agent’s latest monthly report on my house in the boonies of northern California:

    We estimate your home to be worth
    That is a 14% increase since your purchase (January 2020)

    The laugh is a year ago the report had us at $450K. I was annoyed at the 450k estimate, not the current one. This is all such bullshit. What a country.

  24. Michael Engel says:

    The median price will be higher in June, a lower high, but y/y it will be
    negative, even more negative.
    There is a Lazer coming from 2013 to 2019 highs.
    The median price will reach it, bounce back up, test the 2022/2023 highs, perhaps make a new all time high. June high and the next high might be an opportunity to sell, if u wish, if u want to reduce risk, and have some fun
    while parking in CD, or 1Y/2Y treasuries.

  25. No Way Out says:

    The Everything Crisis



    Even the most cursory glance at economic and financial history will reveal a litany of bubbles and booms, crashes and crises. We’ve seen numerous instances of speculative manias, real estate bubbles, market collapses and banking crises. Even the dot-com bubble of 1995-2000 wasn’t really ‘a first’, since there’s at least one previous instance – the Railway Mania of the 1840s – of the public being blinded to reality by the glittering allure of the latest vogue in technology.

    You’d be wrong, though, if you concluded that “there’s nothing new under the Sun” about what we’re experiencing now. The coming crunch – for which the best shorthand term might be ‘the everything crisis’ – sets new precedents in at least two ways.

    First, it’s unusual for all of the various forms of financial crises to happen at the same time. Even the global financial crisis (GFC) of 2008-09 wasn’t an ‘everything crisis’. Now, though, it’s quite possible that we’re experiencing the start of a combined stock, property, banking, financial, economic and technological crisis, with ‘everything happening at once’.

    Second, all previous crises have occurred at times when secular (non-cyclical) economic growth remained feasible. This enabled us to ‘grow out of’ these crises, much as youngsters ‘grow out of’ childhood ailments.

    No such possibility now exists.

    The true story of modern economic and financial history involves, on the one hand, the ending and reversal of centuries of economic expansion and, on the other, an absolute refusal to come to terms with this reality.

    What follows is an attempt to tell that story as briefly as possible.

  26. Garage Full of Shit Bob says:

    Now now boys and girls let’s play nice in Wolf’s sandbox. It’s really amazing that some think there will be mass sell off in housing market after even the not so sharp refinanced at 2.65% when the times were good. I’m gonna take a poll from the neighbors on my block to find out who is willing to cut their throat to blow their nose at 7.0%. Denver metro sellers are still able to pocket $300k to $500k in some cases but the new trend seems to be list your home and take it off the market after a few weeks if the fish are not biting. There mor demand in the new / used pick up truck market than RE.

    • Wolf Richter says:

      This is irrelevant in terms of inventory. It only matters to Realtors because they get paid commissions on each sale.


      When a homeowner sells the house they live in, they then have to move into something else, and end up buying something else. So: 1 house comes on the market and 1 house is taken off the market and the net effect on inventory is zero (+1-1=0).

      The only events that increase inventory are these:

      1. vacant homes that are now held off the market are put on the market (this can be hundreds of thousands of homes that show up suddenly).

      2. Homeowner dies or moves to nursing home or moves to a rental or moves to another country to retire more cheaply, or moves in with kids/parents, etc. and the home is put on the market, and no home is taken off the market.

      3. New homes are being built.

      • MarkinSF says:

        Does vacant homes include AirBnB (or similar)? The air could come come out fast if economic conditions deteriorate.

  27. THEWILLMAN says:

    “Buyers pour into housing market as prices drop for first time since 2012.”

    A different interpretation of the data over at WaPo.

    • MM says:

      I stopped taking WaPo seriously years ago.

    • Wolf Richter says:


      I’ll just show you the chart from the article above in case you missed it in the article. I saw headline today (CNBC?) that said that sales “spiked.” Lots of BS written by young clueless reporters. That’s what this sales spike looks like, LOL

      BTW, that chart isn’t an “interpretation.”

  28. Jackson Y says:

    Reuters is now reporting the US government might intervene to save First Republic. This is the bank that counts Mark Zuckerberg as a client (gave him a 1% mortgage.)

    I don’t understand how is this lawless administration allowed to backstop anything & everything in the economy without going through Congress? The rent moratorium. Then the student loan moratorium. And now bailing out private banks whose clients coincidentally happen to strongly overlap with their donor class.

    • Wolf Richter says:

      I’m pretty sure Zuck isn’t defaulting on his mortgage though.

      But if he yanked $1 billion of his cash out of the bank, he might have contributed to sinking it.

    • Gattopardo says:

      Jackson Y,

      “I don’t understand how is this lawless administration…”

      Where do you get this garbage? Were you not paying attention when the previous administration, “backstopped anything & everything” and put in moratoriums galore? You can point to the clients of those banks as recipients of political favor, but did you also note the political favoring of the previous admin towards certain of its voters?

  29. Cocci7 says:

    Wolf, I’d be interested in reading your thoughts on the rental, ADU and AirBnB markets in the SF Bay area. When it was booming, laws were relaxed to encourage new unit building to address the housing shortage. Any new or out-of-date unit, cabin crammed in a backyard or in-law space would rent. With the flexibility of WFH, who will want to keep paying so much for these places? Is that market looking at some kind of deep restructuring, akin that waiting for commercial real estate?

    • josap says:

      AirBandB rentals over Super Bowl weekend in Metro Phx were about 40% vacant. People who thought they were going to clean up, just didn’t happen.

      Just my personal opinion, I think the AirBandB market is over saturated. It looked like easy money, and everyone got on that bandwagon.

      • Fed up says:

        I laughed so hard when I saw a headline from the NYT that said, “Ahead of the Super Bowl, Short-Term Rentals Fumble in Phoenix”.

    • old school says:

      There is definitely a need for tiny home zoning improvements in my state. A lot of retired people want the homes, but the options are too few. We have an ample supply of rural land that developments can be put on, but state law treats them as rv parks not for permanent living. A few people fight the battle and get them zoned in.

      Poor people in their 60’s and 70’s don’t need a home built to last 75 years, 25 years is enough and many live on roughly $1000 per month. A tiny home is better than living with a family member that doesn’t want you or in a leaky old mobile home.

  30. Expat says:

    The world is insane…and not in a good way. Housing is a basic necessity and should be a right, not a privilege.

    I certainly hope house prices drop by 50% to bring them back into line with long term price-income ratios. But I know that if it happens, the media will be filled once again with rants about how the liberals, Move-On and Hillary all conspired to destroy American’s “greatest asset”, their home.

    Personally, I am trying to plan thirty to forty years in the future when I will be dying. Will my house be worth anything at all by then because of where I live? Or should I sell in ten years and move to a less threatened clime?

    • Tommy B says:

      “Housing is a basic necessity and should be a right, not a privilege.”

      Sounds like communism. And nobody said The capitalistic American way will work for everyone. In the US, housing isn’t a right, it’s survival of the fittest.

  31. eg says:

    It’s curious to me how much emotional heat and light this topic generates. I have to assume that either people’s financial well-being or identity (both?) are somehow deeply entwined with being “right” (whatever that means) about real estate.

    I bought a house in 1997 because my wife’s “nesting instinct” made it a prudent decision for our mental health — “happy wife; happy life.” Now I’m waiting around for her to decide when she wants to sell it, or when physical decrepitude forces us out, whichever comes first. Regardless, the financial results of the “trade” will only be material to our estate, which is a problem for my children, not me.

    I can’t get too excited about it one way or another, so the sound and the fury it generates here is kind of bewildering.

    • Sean Shasta says:

      “I have to assume that either people’s financial well-being or identity (both?) are somehow deeply entwined with being “right” (whatever that means) about real estate.”

      @eg…I would go with financial well-being…and emotional well-being as well. Big money, big commitment, big risk (buying at the top of the market), etc.

      Housing, as an essential, should not be a crazy market. There are way too many misdirected policies and incentives which encourage speculation.

    • Fed up says:

      Real estate prices have been blown out of proportion due to easy money and are not realistic. Prices are out of reach for many people. These are serious problems and justify the “sound and fury” you see in the comments. You sound like you are at a different stage in your life than others on this site, so it’s simply not important to you at this stage of your life and that’s fine. For others who are not at your particular stage, it’s a serious problem.

  32. Fed up says:


    I know a realtor……lol. Realtors tell stories. Inventory is low everywhere, not just San Diego. And, no, anecdotal observations are just that…anecdotal. I would not rely on anecdotal evidence, especially stories coming from realtors. I find it hard to believe there is a frenzy in housing anywhere, a few outliers, sure, but that’s it. It probably seems like a lot from your anecdotal observations but that’s it. I doubt anyone is going to be shocked in a few months at the one or two anecdotal happenings in San Diego.

    • The Bob who Cried Wolf says:

      I’ve worked for him on his house and have seen the second house as it needs minor work. This isn’t a story for amusement purposes or to make some false point. I work with several realtors and I can assure you they exist and their places are real. The only places sitting still are overpriced stuff and absolute crap. As Wolf has said, anything sells if priced right. What’s happening in San Diego is that prices have come down, but not by what people thought. Very little is coming on the market as folks are holding what they have and so few are being built. Most certainly were being affected by macro influences along with the rest of the country, but something about our housing market hasn’t gotten the full memo yet. Keep an eye on things here is all I’m saying.

      • jon says:

        WR posted data about SD price: Down ~11% from the peak.

        san Diego pricing are one of the most bubblicious and has way more to go down.

        Are you associated with real estate in any way ? Just curious.

      • jon says:

        I feel the same:

        “but something about our housing market hasn’t gotten the full memo yet. Keep an eye on things here is all I’m saying.”

        Basically you are saying: we are special and this time is different :-). Everyone in San Diego is saying the same thing.

    • Gattopardo says:

      Since everyone loves anecdotes…. Cardiff, San Diego. Previous high sale was $6.75m (on $5.25m ask) mid last year. The highest before that was $5.3m, several months before. Well, there’s a new ATH…. $8.1m. And I’d argue the $6.75m was a better property.

      For those who don’t know Cardiff, it is not a super ritzy area. Sure, there are some obviously $$$$ homes now, but the town has historically been nothing special along the north SD coast.

      Every fkn realtor in the county is going to be pointing to that one, saying “see!!!!!”

      • The Bob who cried Wolf says:

        I think all the stuff selling over a million south of the 8 is what actually should be looked at. Things have dropped here, that’s a fact and not something I’m denying. The rate of decrease is changing and there are still way more buyers than sellers. I’m not saying it’s boom times, just not the bust times folks outside of the county seem to think it is.

    • jon says:

      From San Diego, these are the facts:
      Inventory is low.
      Prices are going down. Don’t believe , look at what WR posted about ~11% down from peak.
      Good priced homes are selling.

      I still get a call/text from strangers with offers to buy my home in SD.

      Looks like it’d take years for real price discovery.

      In San Diego, we are very religious about real estate. Last week, a lady I know was looking for a home as a rental :-(. You can’t really fix stupid . She already has 2 homes.

      • Real Estate Investor says:

        Why stupid? Nobody who bought in the past in great locations like San Diego has ever regretted that move. Most doubled or tripled their equity. Buy and hold long term is a sure bet. Facts don’t lie.

        Renters have nothin to show for other than complaining about: the rent is too damn high!

        • jon says:

          My friend bought last year and he complains the about the lost equity. Their home lost almost 180K in last one year. They have 3 homes, so looking at approximately $500K lost equity.

          Their renters are happy though, seeing home prices going down every month and renters saving to buy home of their choice next year or so :-).

          I used to have 3 homes in San Diego, sold 2 last year, kept my primary. So, I still own a house. I told all of my friends to sell last year but not only they didn’t listen to me, they went out and bought big homes.

          I am downsizing and don’t intend to buy homes. My t-bills are paying my ~5% with no state taxes.

  33. Sledge says:

    Does the rise in home sales correlate to a dip in interest rates from December 2022 through February 2023?

  34. Randy says:

    Some posters are not listening to each other.

    I’m talking about this… 2 posters:

    Poster 1. Sellers have very low interest mortgages.
    We are not going to sell ! Ever !
    Buyers, sorry but you can’t buy what we won’t sell.

    Poster 2. Buyers can not qualify for these expensive homes especially now that rates are so high !
    Sellers. sorry but you can’t sell what we can’t afford to buy.

    You’re both right to a degree. You should just acknowledge it.

    Some computer scientists (database and other areas) study and implement software to avoid deadlocks. Presently deadlocks are occurring with greater frequency than usual in the SFH market.

    Buyers need sellers to release a home (but they won’t). Sellers need buyers to qualify to buy their home (but they can’t). Deadlock.

    But this of course is only true to a degree.

    • jon says:

      Sellers wont sell until and unless they are forced to.
      These forced sells define the pricing of next homes in the neighborhood.

      Forced sells happen due to many reason: reloc, divorce, death, old people moving out etc etc.

    • Bojan cech says:

      We don’t have forced selling in this market. Forced selling is mainly what you mean by foreclosures. If someone sells voluntarily to downsize or move into a home that not necessarily “forced” because you still have other options. Reverse mortgage or converting to a rental.
      Forced selling usually means you can’t pay your bills anymore and MUST sell the house.

      That was a storyline for 2008, 09, 10 etc.

      It was due to NINJA loans and other crap that has long exited the system.

  35. Natedogg says:

    So many realtors/sunshine pumpers on this page who are obviously insecure and freaking out about the market. I suggest googling an LA Times article from December 1, 2006 entitled “Optimism is rising on housing market.” This is when we were basically at the current stage of prices just starting to go down, but before the big collapse due to high prices.

    A choice quote from that article – “The transition from sizzling markets to normal or weak markets has been orderly so far, and recent drops in interest rates lessen the likelihood that precipitous changes will occur,” said Patrick Lawler, chief economist of the Office of Federal Housing Enterprise Oversight.

    Of course we will hear the “this time is different because of mortgages etc” crowd, but they miss the point entirely. The big crash mostly occurred because prices were out of whack with income levels, not mortgages. At some point price/income ratio does matter.

    Also, most sane people can agree that the current absurd prices are doing tremendous damage to communities, with the only beneficiaries as real estate agents and owners looking to profit. These sunshine pumpers are rallying for more damage to communities, less homeownership, less disposable income, etc.

    • jon says:

      Most of the people miss this: ” The big crash mostly occurred because prices were out of whack with income levels, not mortgages. At some point price/income ratio does matter.”

  36. grimp says:

    Breaking news:
    “rate cuts are not in out base case” – Jerome Powell 3/22/2023

  37. Randy says:

    “Sellers wont sell until and unless they are forced to.”

    By now its a cliche.

    Is there data to back this up ?

    1.4M Americans are worth $10M or more. Per quora website, Credit Suisse wealth report 2021.

    Suppose one of them is worth $20M.
    She can sell her home and buy another one with cash costing $1M. She still has a cool $19M left over. She didn’t have to worry about giving up her 3% loan.

    Now you might object that if she had that much money she probably didn’t have a 3% mortgage to begin with… she bought her current home with cash as well.
    Perhaps. But not necessarily.
    We can’t assume that all of these high worth people only bought homes with cash.
    They may have only chosen to do so now because rates have increased a lot.

    There are likely some very wealthy people who have sold homes in the SF Bay and Puget Sound areas the last 10 months.
    Some will choose to rent for a period anticipating lower RE prices while others may buy in another part of the country with cash most likely. But with such wealth they can afford to give up a 3% loan if they choose to. And just over 1.4M Americans now has a net worth of $10M.

    • Randy says:

      Minor update: And just over 1.4M Americans now has a net worth of $10M OR GREATER.

    • jon says:

      I get you point. I am not talking about wealthy people.
      I am talking about common joe on the street.

      I do see people selling ( some forced, some out of other reason ).

      Unless unemployment rises up a lot, I don’t see big foreclosures or short sales. This can obviously happen.

      Irrespective of this happening or not, I see home prices going down slowly for many years to come in the best case scenario.

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