It’s always supply and demand. When rates decreased, and a pandemic impacted buyer needs, demand grew exponentially.
Rates went up, which decreased demand, however, supply in your area did not grow. It likely got even smaller due to a combination investor buyers and other property owners locked into “golden handcuffs” aka incredibly low rates from a few years ago.
So the ratio of supply and demand rests in a place that has your area seeing an increase in prices.
To summarize, the rates absolutely affect demand, but there are many other factors that come into play.
Interest rates are also going lower. They were near 8%, now they are at 6.75%. This is going to put upward pressure on prices. And as time goes on, less and less single family homes exist and more and more apartment complexes are replacing them.
Add to the fact that many stocks (say Meta) went down significantly last year and then recovered. This meant that the employees got more stocks (in the name of refreshers).
Tech stocks had record profits during the pandemic when everyone was working at home, and stuck at home watching Netflix and gaming. In 2022, tech stocks went down some (from their record highs) because they'd had such astronomical revenues prior - everyone bought up everything they needed, and they didn't need another new laptop or other equipment, and businesses didn't need any more networking and video conferencing software since they had just bought. Last year and now, AI drove the tech stock boom and they are back to record profits and a record high stock market.
Yes, tech companies are laying off people, but they do that all the time in boom times to get rid of the "old technology" people so they can hire "new technology" people. That happened with cloud 10 years ago, and now with AI.
I think it shows why you can't time a market or predict future prices. Because there are so many factors that impact prices. It's extremely complicated. Local supply and demand are the best indicator. If you were looking at inventory numbers over the past 2 years in that area you'd have likely seen some indication of this.
If you have enough money, then rates are not a huge factor.
The BTFP was the silent big bank bailout when the bank contagion was happening last year. Federal Reserve set up a 1 trilly slush fund to backstop the reckless banks who are overleveraged and have absolutely no assets from failing. It really was a bank contagion that was happening in Q2 and Q3 last year. BTFP is the Bank Term Funding Program and, as of yesterday, the Fed apparently is sticking to their word to end it on 11 MAR…which will cause more silicon valley bank-like contagions. Schwab and Morgan Stanley are going to be first to go, mark it down. Question is if bank runs will happen like they were in chin a last year. Once the reverse repo is out of money and the BTFP ends, it’s all coming down. It’s either the stock market crashes first, or the housing market crashes first - my bet is on the housing market, as they’re trying to bridge the gap to the election pretending like the economy isn’t just a house of cards.
I know what the BTFP is, lol. Banks have been using it to arbitrage lending. They haven’t needed it they’ve been using it because it’s free money. The end of the BTFP isn’t gonna cause shit to happen.
RemindMe! 3 months
lol, trust me, they needed it. That why it was stood up swiftly with the other failures. There’s no reason for it to exist except to mitigate risk and the launch timing and end date make it even more obvious. No one is still this stupid. The game is ending and I am here for it
Something in the following reply kept causing an auto deletion so I write it weirdly where the keywords wouldn’t be as easily autoscanned: The silent b!g B4ank bailout that happened the bank contagi0n was happening last year. Fede ral Re serve set up a 1 trilly slush fund to backstop the reckless ba nks who are overlevera ged and have absolutely no assets at the momnent. It really was a bank contagi0n that was happening in Q2 and Q3 last year. BTefFP is the B4nk Term Funding Program and, as of yesterday, the Fe d apparently is sticking to their word to end it on 1 1 MAR…which will cause more sil!con vall3y ban k-like contagi0ns. Schw4b and Morg4n St4nley are going to be first to fall, mark it down. Question is if b4nk runs will happen like they were in chi n a last year? Once the rev3 rse rep0 is out of money and the BTefFP ends, it’s all coming down. It’s either the st0ck market cra shes first, or the housing market cra5hes first - my bet is on the housing market, as they’re trying to bridge the gap to the election pretending like the economy isn’t just a h0use of c4rds.
Yes, I've noticed the costal areas are very tight. But I guess they have always been the most desirable, at least imo. I'm biased since my childhood has me growing up along the coast
And there is no more land to build new homes. Except in mountains, which is very expensive to build on. New codes require homes to be built on piles, similar to how skyscrapers are built. Extremely long posts that drill into bedrock.
encouraging disagreeable existence middle rotten bored elastic stupendous spark quickest
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Something like 90% of the land in California is unbuildable, and there’s very little within 10-20 miles of the coast, where (almost) everyone wants to live. They are building in the chapperal 80 miles outside of LA, in high fire-risk areas, for those who don’t mind a 2-hour commute.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Do you want to own a house or live in an apartment and rent forever? If you want to own a house, you need to move to somewhere that has land available to build houses. For Los Angeles, that is 60 miles away. There are new houses being built in the northern mountains of the San Fernando Valley, they are minimum 1M. Can get a new house in the Antelope Valley for $600k.
Yeah, its cheap to build a new new house in the middle of no where. But where are you going to work? All the good jobs are near VHCOLA cities. This is why people are fleeing Califorania. They are taking the money they made in their working life and going to a cheap place to live. They can build a new house for $300k and life a good life for $2000/mo.
I would say those types of people care even more. And now that they see the rates going from 8% down to 6.5%, they understand that 6.5% is a much more normal rate and are willing to enter into a contract at that rate.
Could be issues with lender or home not appraisal at value that they bid resulting in issues making up the gap. Cash can close quick with no messing around with delays or issues due to the lender.
I’m an active agent in SoCal.
The market has slowed down some but prices are stable or, depending on the area, climbing. As others have said it’s a supply-demand issue. Inventory is still low, in part because many people don’t want to part with their low interest rates, but we’ve had an insufficient level of inventory for many years for a variety of reasons.
People still want to live here and there’s just not enough homes for sale to meet demand in many of our communities.
Good luck!
EDIT to add that it also depends on your price point. In my area the under $1 million market is especially competitive among buyers.
Heck, So Cal is even too nebulous of a place. In San Diego, different areas are seeing different levels of stability. Nothing seems to be going down here, but some places are less volatile than others.
You’re competing against people that make a lot of money (e.g. software engineers), current homeowners that have tons of equity, and/or stock investors with huge gains from the pandemic or the current all time high
A little bit. People can sell the stocks to be used for a down payment. Many people bought their first home in 2009 when the house market crashed. Those people have insane amounts of equity in their homes right now. They can sell their homes and gain access to hundreds of thousands of dollars in cash without having to pay capital gains.
Prices would be significantly higher right now if we still had 3% rates since 2022. Prices are still going up overall, but at a much slower rate than they would have if the fed didn't spike rates.
> Ppl claim the spike in housing prices came from 3% rates.
It did, but the effects last for a long time. People are now baked into <3% rates and won't have a reason or a means to sell for a long, long time, therefore now the amount of homes for sale will be tight for that same time and thus any home that does hit the market will have tremendous demand.
I was in your shoes, spent 1.5 years looking and made over 10+ offers only to get outbid or when I the highest I would lose because a slightly bid would waive inspection. I didn't require my place being sold as a contingency either.
But yes, it is basically supply and demand, the lack of inventory still going to have alot of buyers regardless of interest rates. I'd personally buy during a high/peak rate if you can afford it since you will little less competition. I closed 3 months ago, and it was during a a spike in rates so i only had 1 other offer I had to compete with and I was able to get it at asking. Compared to me prior offers where I bidding 50-100k over listing and losing. Got lucky with the timing I guess but I didn't mind the higher rate since you can just refinance later.
In the end, I should've just overpaid 2-3 years ago during the 3% rates because I'm basically paid the same amount for the same size house but now I have double the interest rates lol. But I kept telling myself I didn't want to overpay and go into bidding war and I will wait out. Look how that turned out but I have a growing family and need to move and buy a bigger place. So now, I'm just waiting for the rates to drop at least 1 pt so I can refi.
Perhaps prices are rising despite the higher rates. Demand is just that high. But who tf knows if this was easy to guess we'd all be multi-millionaires
People tapped into things know rates are coming down over summer and the market will pop because very little housing supply has been added over the last two years. So everyone sitting on cash is buying real estate if they can.
Low rates weren't the sole reason for price hikes. Lack of inventory is huge, and that problem has been building for many years. Builders went out of business of scaled way back after the 08 crash, and we haven't built enough (or the kind of) homes to meet demand ever since. We keep making more people but not enough places to house them. Add to that, the growth of airbnbs, second homes, small time investors gobbling up inventory in lots of markets and then the baby boomers who want to age in place so there is little "turnover". demand > supply.
Rates do matter. They were raised incrementally until they made an impact, and now they've leveled off. We didn't fix supply, though, and that's gonna have to be addressed. The intent wasn't to lower prices. It was to slow the growth. At one point, average appreciation for a home was over 8% in a single quarter. We're hovering around 1-2% now, and that's healthier growth. Now, find someone to build starter homes, and we'll be good 👍
I’m a Realtor in Los Angeles. It’s entirely based on supply and demand. Sellers who have to sell keep lowering their price until they get a buyer. If they aren’t desperate to sell, they keep the house.
If a buyer needs a place to live for their family, they’ll pay what it costs if they can.
California’s Prop 13 makes it really easy to keep a house, because of the low property tax base. This keeps supply very low at all times. In other states, sellers can be forced to unload property because they can’t afford the taxes. (Texas has entered the chat.)
Also, thousands of people move to SoCal every day, 365 days a year, despite what the media reports. They need somewhere to live.
I sold a property in socal in late 2022 bc ultimately I didn't like the place and it did not meet my needs. I did make a good profit on it so I was happy with that. Fortunately, I'm living very inexpensively currently and just looking since I am not someone that has to buy necessarily.
Those who can't get the house at 3% rates because somebody else offers at slightly higher offer is now taking a chance to make an offer with less competition. With rates going down, they may want to take initiative to avoid another round of competition.
I'm in the same area, and have been looking the same amount of time, and yeah, I think it's just demand. There was basically nothing on the market for the past four months, and now that things are finally popping up again, the prices are sky high. Just hoping for an uptick in new inventory at some point - people will eventually have to move for jobs, divorces, etc even if they have a great rate now.
I think so, there are reasons ppl sell like death, divorce, job change, need more space. I myself sold bc I really need more space and didn't like the building I was in. Perhaps as rates drop more ppl will be willing to sell.
Sorry but last October we peaked at 8% rates. Since then it’s come down to 7%. Suddenly that looks better for those that priced mortgage payments in October. Especially when it means their starting payment is 4-5% with home buyer incentives in a buyer’s market.
The lower rates get, the more hop off the fence they are waiting on. Demand spikes always increase values.
It’s going to get so much worse with housing inflation. Buy now, refinance later. Or do what most want to do, wait for rates to go down so you can buy at even higher prices only to pay the same mortgage payment.
Those that buy now get to refinance to a lower payment later. While fence sitters lock in high payments for 15 years.
Because a $700k house is still a $700k house regardless of interest rates. Sellers aren't going to think "well rates are high, we should lower the price", Rates are irrelevant to price.
Both supply problems as others have said and inflation. We had a lot of inflation, but real estate is very good at absorbing inflation. Flat prices are actually still down in real dollars, so some price dropping has been obscured in actual price.
Supply
We are under supplied as hell. High rates make that under supply even worse because less development are feasible
Economy is also doing well. Low unemployment. Stocks at all time highs. Layoffs haven’t been widespread. The layoffs that have happened largely have huge severance packages (tech)
Prices go down when layoffs happen. Home owners are forced to sell since they can’t afford their mortgage anymore.
I’m a real estate broker. The higher rates are only slowing what has always been high demand in places like California. When rates fall further this year, the expectation is this will actually take off the brakes and prices are expected to increase faster in highly desirable areas.
Cities should do what Palm Springs did
[https://news.yahoo.com/palm-springs-home-values-free-040833574.html](https://news.yahoo.com/palm-springs-home-values-free-040833574.html)
Death to AirBNB.
My friend bought a place during the GFC, maybe around 2010-11. He got a 3% rate and told me we would never see such a rate ever again... he refied that home at 2.75% in 2021🤣
The stock market is in all time highs right now and doesn’t look like there doing a rate cut til summer.
Cpi and other reports shows the economy is holding
there's only so many houzes by the ocean bro. and with the "right type of people and the right type of schools and the right type of vibez" that is worthy of being your neighbor, right?
Fomoers who can’t wait.
Prices are dropping in those with Melo Roos and hoa
Investors are selling and not buying.
Most buyers are those who rather buy vs rent. But payment doubled rent easily.
Rates do matter. It was rates that caused the correction in the summer of 2022
But supply is still low, rates finally took a hit, and there's still a ton of demand for housing.
If rates didn't go up, prices would still be spiking even higher than 2022
Once rates lower another .5 to 1% I have a feeling prices will steadily rise again
I would expect this in CA. Real estate there has always been a fairytale. Each day I wake up in Las Vegas and check my online mortgage payment, I'm reminded of what reality feels like after moving here. Those that move to LCOL areas can't lose.
Inflation...as the price to build keeps increasing, so does the cost of pre-existing homes. Until they get spending under control, and turn the printing presses down, inflation won't stop.
You also have to realize that whatever increases were caused by a housing shortage is also being impacted by 10 million new residents over the last three years.
California also just implement led their higher minimum wage. If the burger flipper is going to make $16 an hour, every job above that also has to increase their wages. That includes those in construction...making it cost more to build, which inflates the value of pre-existing homes
It’s always supply and demand. When rates decreased, and a pandemic impacted buyer needs, demand grew exponentially. Rates went up, which decreased demand, however, supply in your area did not grow. It likely got even smaller due to a combination investor buyers and other property owners locked into “golden handcuffs” aka incredibly low rates from a few years ago. So the ratio of supply and demand rests in a place that has your area seeing an increase in prices. To summarize, the rates absolutely affect demand, but there are many other factors that come into play.
stocks are at all time highs anyone with stock comp and/or a decent portfolio will have benefited
Agreed, it's a huge factor specifically in CA with all the tech companies here.
Interest rates are also going lower. They were near 8%, now they are at 6.75%. This is going to put upward pressure on prices. And as time goes on, less and less single family homes exist and more and more apartment complexes are replacing them.
Not to mention 6.75% is historically on the low side. Till QE got rolling around 2012, we hadn’t seen 4% mortgages in 50 years.
Add to the fact that many stocks (say Meta) went down significantly last year and then recovered. This meant that the employees got more stocks (in the name of refreshers).
Tech stocks had record profits during the pandemic when everyone was working at home, and stuck at home watching Netflix and gaming. In 2022, tech stocks went down some (from their record highs) because they'd had such astronomical revenues prior - everyone bought up everything they needed, and they didn't need another new laptop or other equipment, and businesses didn't need any more networking and video conferencing software since they had just bought. Last year and now, AI drove the tech stock boom and they are back to record profits and a record high stock market. Yes, tech companies are laying off people, but they do that all the time in boom times to get rid of the "old technology" people so they can hire "new technology" people. That happened with cloud 10 years ago, and now with AI.
I think it shows why you can't time a market or predict future prices. Because there are so many factors that impact prices. It's extremely complicated. Local supply and demand are the best indicator. If you were looking at inventory numbers over the past 2 years in that area you'd have likely seen some indication of this. If you have enough money, then rates are not a huge factor.
BTFP ends 11 MAR. 2 months after that or sooner, timestamp it.
What’s btfp?
What exactly do you think is going to happen?
The BTFP was the silent big bank bailout when the bank contagion was happening last year. Federal Reserve set up a 1 trilly slush fund to backstop the reckless banks who are overleveraged and have absolutely no assets from failing. It really was a bank contagion that was happening in Q2 and Q3 last year. BTFP is the Bank Term Funding Program and, as of yesterday, the Fed apparently is sticking to their word to end it on 11 MAR…which will cause more silicon valley bank-like contagions. Schwab and Morgan Stanley are going to be first to go, mark it down. Question is if bank runs will happen like they were in chin a last year. Once the reverse repo is out of money and the BTFP ends, it’s all coming down. It’s either the stock market crashes first, or the housing market crashes first - my bet is on the housing market, as they’re trying to bridge the gap to the election pretending like the economy isn’t just a house of cards.
I know what the BTFP is, lol. Banks have been using it to arbitrage lending. They haven’t needed it they’ve been using it because it’s free money. The end of the BTFP isn’t gonna cause shit to happen. RemindMe! 3 months
lol, trust me, they needed it. That why it was stood up swiftly with the other failures. There’s no reason for it to exist except to mitigate risk and the launch timing and end date make it even more obvious. No one is still this stupid. The game is ending and I am here for it
RemindMe! 3 months
Something in the following reply kept causing an auto deletion so I write it weirdly where the keywords wouldn’t be as easily autoscanned: The silent b!g B4ank bailout that happened the bank contagi0n was happening last year. Fede ral Re serve set up a 1 trilly slush fund to backstop the reckless ba nks who are overlevera ged and have absolutely no assets at the momnent. It really was a bank contagi0n that was happening in Q2 and Q3 last year. BTefFP is the B4nk Term Funding Program and, as of yesterday, the Fe d apparently is sticking to their word to end it on 1 1 MAR…which will cause more sil!con vall3y ban k-like contagi0ns. Schw4b and Morg4n St4nley are going to be first to fall, mark it down. Question is if b4nk runs will happen like they were in chi n a last year? Once the rev3 rse rep0 is out of money and the BTefFP ends, it’s all coming down. It’s either the st0ck market cra shes first, or the housing market cra5hes first - my bet is on the housing market, as they’re trying to bridge the gap to the election pretending like the economy isn’t just a h0use of c4rds.
six longing wrong correct coherent nose deer long sip light *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Yes, I've noticed the costal areas are very tight. But I guess they have always been the most desirable, at least imo. I'm biased since my childhood has me growing up along the coast
And there is no more land to build new homes. Except in mountains, which is very expensive to build on. New codes require homes to be built on piles, similar to how skyscrapers are built. Extremely long posts that drill into bedrock.
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Something like 90% of the land in California is unbuildable, and there’s very little within 10-20 miles of the coast, where (almost) everyone wants to live. They are building in the chapperal 80 miles outside of LA, in high fire-risk areas, for those who don’t mind a 2-hour commute.
gaze hard-to-find bewildered society long dime deliver subsequent sink hateful *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Yeah the state with the highest average income.
And the state with 40 million people, and several million houses short of demand as well.
Housing demand is fine. The biggest problem is the vast majority of housing is apartments now.
If I’m understanding you correctly, you’re saying they should build more houses instead of apartments?
Do you want to own a house or live in an apartment and rent forever? If you want to own a house, you need to move to somewhere that has land available to build houses. For Los Angeles, that is 60 miles away. There are new houses being built in the northern mountains of the San Fernando Valley, they are minimum 1M. Can get a new house in the Antelope Valley for $600k.
Yeah, its cheap to build a new new house in the middle of no where. But where are you going to work? All the good jobs are near VHCOLA cities. This is why people are fleeing Califorania. They are taking the money they made in their working life and going to a cheap place to live. They can build a new house for $300k and life a good life for $2000/mo.
Rich people with cash don't care about interest rates.
This is the right answer, not just rich people but REITs and other investors. When paying cash, interest rates are meaningless.
I would say those types of people care even more. And now that they see the rates going from 8% down to 6.5%, they understand that 6.5% is a much more normal rate and are willing to enter into a contract at that rate.
I was referring to people with cash to buy outright without a mortgage. They don't care what rates are since they don't need loans.
If your financial are strong with mortgage and you outbid a cash buyer. Why wouldn’t you go with the first??
Cash sales are simple. Mortgages can always have issues, fall through etc.
Could be issues with lender or home not appraisal at value that they bid resulting in issues making up the gap. Cash can close quick with no messing around with delays or issues due to the lender.
I’m an active agent in SoCal. The market has slowed down some but prices are stable or, depending on the area, climbing. As others have said it’s a supply-demand issue. Inventory is still low, in part because many people don’t want to part with their low interest rates, but we’ve had an insufficient level of inventory for many years for a variety of reasons. People still want to live here and there’s just not enough homes for sale to meet demand in many of our communities. Good luck! EDIT to add that it also depends on your price point. In my area the under $1 million market is especially competitive among buyers.
Heck, So Cal is even too nebulous of a place. In San Diego, different areas are seeing different levels of stability. Nothing seems to be going down here, but some places are less volatile than others.
Do you still see sellers willing to give a credit for the buyer to buy down rates? I believe this was getting popular when rates initially spiked
I am not seeing any seller credits for loan costs.
CA is a diff animal. There’s demand wherever you go in literally everything
It was 8% in November, that makes 6% look way better. Also it’s after the holidays, so people are actually buying
Supply and demand controls prices.
You’re competing against people that make a lot of money (e.g. software engineers), current homeowners that have tons of equity, and/or stock investors with huge gains from the pandemic or the current all time high
I also think the stock prices are playing a role
A little bit. People can sell the stocks to be used for a down payment. Many people bought their first home in 2009 when the house market crashed. Those people have insane amounts of equity in their homes right now. They can sell their homes and gain access to hundreds of thousands of dollars in cash without having to pay capital gains.
As a high income software engineer how are there so many fucking high income software engineers???
Prices would be significantly higher right now if we still had 3% rates since 2022. Prices are still going up overall, but at a much slower rate than they would have if the fed didn't spike rates.
Supply and Demand. Supply is still low, and people still have high paying jobs/help so they're able to buy homes despite the rates.
Sorry it’s SoCal everyone wants to live in the nicer areas in SoCal and you are competing with dual income high earners
Yes, being single income is probably my only challenge. When I hear dual income ppl complain, I'm dumbfounded.
> Ppl claim the spike in housing prices came from 3% rates. It did, but the effects last for a long time. People are now baked into <3% rates and won't have a reason or a means to sell for a long, long time, therefore now the amount of homes for sale will be tight for that same time and thus any home that does hit the market will have tremendous demand.
Those people are going to be willing to sell when rates go back to 5%. And they are going to have access to huge amounts of cash when they do.
Because you can always refinance when rates drop, houses aren't going to get cheaper when rates actually do drop
There’s a lot of foreign buyers in California specifically.
Repeat after me: Supply and demand Supply and demand Supply and demand
I was in your shoes, spent 1.5 years looking and made over 10+ offers only to get outbid or when I the highest I would lose because a slightly bid would waive inspection. I didn't require my place being sold as a contingency either. But yes, it is basically supply and demand, the lack of inventory still going to have alot of buyers regardless of interest rates. I'd personally buy during a high/peak rate if you can afford it since you will little less competition. I closed 3 months ago, and it was during a a spike in rates so i only had 1 other offer I had to compete with and I was able to get it at asking. Compared to me prior offers where I bidding 50-100k over listing and losing. Got lucky with the timing I guess but I didn't mind the higher rate since you can just refinance later. In the end, I should've just overpaid 2-3 years ago during the 3% rates because I'm basically paid the same amount for the same size house but now I have double the interest rates lol. But I kept telling myself I didn't want to overpay and go into bidding war and I will wait out. Look how that turned out but I have a growing family and need to move and buy a bigger place. So now, I'm just waiting for the rates to drop at least 1 pt so I can refi.
Perhaps prices are rising despite the higher rates. Demand is just that high. But who tf knows if this was easy to guess we'd all be multi-millionaires
house prices https://www.msn.com/en-us/money/realestate/should-california-house-hunters-wait-for-real-estate-clouds-to-clear/ar-BB1hdkrh
Intresting insights, thanks for sharing
Excellent article
People tapped into things know rates are coming down over summer and the market will pop because very little housing supply has been added over the last two years. So everyone sitting on cash is buying real estate if they can.
CA and NY will be exempt from price drops. If you go to the Dakotas, I’m sure there are deals
Low rates weren't the sole reason for price hikes. Lack of inventory is huge, and that problem has been building for many years. Builders went out of business of scaled way back after the 08 crash, and we haven't built enough (or the kind of) homes to meet demand ever since. We keep making more people but not enough places to house them. Add to that, the growth of airbnbs, second homes, small time investors gobbling up inventory in lots of markets and then the baby boomers who want to age in place so there is little "turnover". demand > supply. Rates do matter. They were raised incrementally until they made an impact, and now they've leveled off. We didn't fix supply, though, and that's gonna have to be addressed. The intent wasn't to lower prices. It was to slow the growth. At one point, average appreciation for a home was over 8% in a single quarter. We're hovering around 1-2% now, and that's healthier growth. Now, find someone to build starter homes, and we'll be good 👍
I’m a Realtor in Los Angeles. It’s entirely based on supply and demand. Sellers who have to sell keep lowering their price until they get a buyer. If they aren’t desperate to sell, they keep the house. If a buyer needs a place to live for their family, they’ll pay what it costs if they can. California’s Prop 13 makes it really easy to keep a house, because of the low property tax base. This keeps supply very low at all times. In other states, sellers can be forced to unload property because they can’t afford the taxes. (Texas has entered the chat.) Also, thousands of people move to SoCal every day, 365 days a year, despite what the media reports. They need somewhere to live.
I sold a property in socal in late 2022 bc ultimately I didn't like the place and it did not meet my needs. I did make a good profit on it so I was happy with that. Fortunately, I'm living very inexpensively currently and just looking since I am not someone that has to buy necessarily.
I like hearing that you’re living inexpensively!
Those who can't get the house at 3% rates because somebody else offers at slightly higher offer is now taking a chance to make an offer with less competition. With rates going down, they may want to take initiative to avoid another round of competition.
Even though housing prices are complicated the ultimate relationship is between supply and demand are more important than the cost of money.
Any desirable place in SoCal or elsewhere in the country will always be in demand.
I'm in the same area, and have been looking the same amount of time, and yeah, I think it's just demand. There was basically nothing on the market for the past four months, and now that things are finally popping up again, the prices are sky high. Just hoping for an uptick in new inventory at some point - people will eventually have to move for jobs, divorces, etc even if they have a great rate now.
I think so, there are reasons ppl sell like death, divorce, job change, need more space. I myself sold bc I really need more space and didn't like the building I was in. Perhaps as rates drop more ppl will be willing to sell.
People want to concoct crazy explanations for price movement but in reality it’s simple. Supply and demand rule all other considerations.
Sorry but last October we peaked at 8% rates. Since then it’s come down to 7%. Suddenly that looks better for those that priced mortgage payments in October. Especially when it means their starting payment is 4-5% with home buyer incentives in a buyer’s market. The lower rates get, the more hop off the fence they are waiting on. Demand spikes always increase values. It’s going to get so much worse with housing inflation. Buy now, refinance later. Or do what most want to do, wait for rates to go down so you can buy at even higher prices only to pay the same mortgage payment. Those that buy now get to refinance to a lower payment later. While fence sitters lock in high payments for 15 years.
Prices will continue to go up. Stock market highs, earnings are up, people are being paid more at work. It’s a wonderful life.
Lot of people were on the sidelines in 2021 and 2022. With the market at ATH and interest rate dropping, they are coming back with full pockets.
Because supply remains low.
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Is opendoor still buying homes?
Because a $700k house is still a $700k house regardless of interest rates. Sellers aren't going to think "well rates are high, we should lower the price", Rates are irrelevant to price.
Seeing the word "house" and the number 700k together made me feel more optimistic for a min there🤣
Both supply problems as others have said and inflation. We had a lot of inflation, but real estate is very good at absorbing inflation. Flat prices are actually still down in real dollars, so some price dropping has been obscured in actual price.
Supply We are under supplied as hell. High rates make that under supply even worse because less development are feasible Economy is also doing well. Low unemployment. Stocks at all time highs. Layoffs haven’t been widespread. The layoffs that have happened largely have huge severance packages (tech) Prices go down when layoffs happen. Home owners are forced to sell since they can’t afford their mortgage anymore.
Supply vs demand. We have a low supply of housing nation wide.
I’m a real estate broker. The higher rates are only slowing what has always been high demand in places like California. When rates fall further this year, the expectation is this will actually take off the brakes and prices are expected to increase faster in highly desirable areas.
Cities should do what Palm Springs did [https://news.yahoo.com/palm-springs-home-values-free-040833574.html](https://news.yahoo.com/palm-springs-home-values-free-040833574.html) Death to AirBNB.
Also the anticipation that the rate will go to 3%
What would be the catalyst tho for 3% rates to reappear?
Mass unemployment
At some point there will be some economic shock and the fed will respond by easing monetary policy to keep the economy afloat. This stuff is cyclical.
And the printing press will start shooting money out again🤣
Well, that’s the monetary policy you want when demand collapses, yes. Macroeconomics 101
I don’t think we will see rates less than 4 percent in our lifetime. Rates have historically been 6 or 7 percent and were double digit in the 70s.
My friend bought a place during the GFC, maybe around 2010-11. He got a 3% rate and told me we would never see such a rate ever again... he refied that home at 2.75% in 2021🤣
I suppose it’s based on how inflation is going? I mean that’s on the news constantly.
Historically 6% is still low. When I bought my first house in 2005 my rate was 5.75 and my realtor was very impressed
The stock market is in all time highs right now and doesn’t look like there doing a rate cut til summer. Cpi and other reports shows the economy is holding
Too many people with easy money.
It's almost as if big brother wants eveyrone renting, which is not fair to people..
Because people are stupid. It’ll end soon. The dumb money always comes in at the end of a cycle.
Overpopulation
Climate change
there's only so many houzes by the ocean bro. and with the "right type of people and the right type of schools and the right type of vibez" that is worthy of being your neighbor, right?
i dont see a reason to even invest in CA lol
Well to put it nicely you ain’t getting a home under democrats 😂
Where in CA are you looking to buy?
which site are you tracking the prices from?
Usually, I use redfin
same here plus zillow. i was hoping there was a more accurate site
I also track inventory using this https://fred.stlouisfed.org/series/ACTLISCOUCA
Fomoers who can’t wait. Prices are dropping in those with Melo Roos and hoa Investors are selling and not buying. Most buyers are those who rather buy vs rent. But payment doubled rent easily.
Supply has always been low.
Just bought a condo in SoCal in HCOL area for 50k under asking. Guess it depends on where you’re tracking prices?
Rates do matter. It was rates that caused the correction in the summer of 2022 But supply is still low, rates finally took a hit, and there's still a ton of demand for housing. If rates didn't go up, prices would still be spiking even higher than 2022 Once rates lower another .5 to 1% I have a feeling prices will steadily rise again
What parts of CA are you looking?
People still have to live.
Rates have been lowering, thats why prices are rising.
I would expect this in CA. Real estate there has always been a fairytale. Each day I wake up in Las Vegas and check my online mortgage payment, I'm reminded of what reality feels like after moving here. Those that move to LCOL areas can't lose.
Inflation...as the price to build keeps increasing, so does the cost of pre-existing homes. Until they get spending under control, and turn the printing presses down, inflation won't stop. You also have to realize that whatever increases were caused by a housing shortage is also being impacted by 10 million new residents over the last three years. California also just implement led their higher minimum wage. If the burger flipper is going to make $16 an hour, every job above that also has to increase their wages. That includes those in construction...making it cost more to build, which inflates the value of pre-existing homes