My kind friend and award-winning realtor Kira Mason has her pulse on the real estate market. She offers up her no bullshit, on-the-ground take on the industry for my readers.
The NYC market is equally slow. Haven't seen it like this since the GFC. I recently ran comps for a client, and with the change in interest rates between just August of last year and today, prices would have to come down 35% to achieve mortgage payment parity between then and now. If rates persist like this, or god forbid go up, then we seem to be headed in that direction.
I can only speak from a personal perspective, but there are still a fair amount of shuttered store fronts that aren't being filled up. However, the city seems busier lately, possibly due to the big banks calling back their employees to the office.
Awesome contribution. Yeah, this really seems like only the very beginning. Here in Philly, it was like they put something in the water about 14 days ago. Sellers were slow to get with the picture and then BAM, calls from every listing agent with a house I've shown in the last two months soliciting offers.
Definite value added post. The insights from Kira are illuminating. We are seeing a version of what she shared in coastal NC. Although we still have strong tailwinds in housing from the North to South migration….it’s clear that the winds have changed. We have less supply and prices have increased along with rates versus a year ago. Price or new construction and renovation are up as well. This is definitely an environment where I expect prices to stay elevated, but supply and value over time to to stay relatively low for the near term (12 months). Selling in this environment, as a zero sum game, means you can buy less home than what you sold….which is not good. We are fortunate that there is Federal Military Basing in the area creating sustained turnover and demand in home ownership / rentals, a business friendly environment, and mild climate near great beaches.
Always interesting to hear what's happening in other markets. I'm a real estate appraiser out west (about as beloved as your dentist during a root canal) and Kira's insights match up with the little rural towns I cover as well. Real estate hit a brick wall about two weeks ago here. Some prices have started coming down a little, but we're mostly just flat. It'll probably stay that way (in my local markets) until the economy rolls. That being said, I hadn't done a foreclosure appraisal in two years, but in the last two months I've had a handful of pre-foreclosure appraisals which seems to me that the banks are getting ready or that things are already rolling.
I sold my house in May as I saw interest rates rising and am officially very 'short housing'. I'll need a house by next summer (or my wife will divorce me and take the dog but she's being a good sport about this bet so far). I doubt will be the bottom by then but it will hopefully be slightly cheaper.
It feels like we'll see some real moves in about 6 months when unemployment starts to rise. Home prices won't come down with these low inventories until a handful of people are forced to sell/foreclose. Then it'll snowball downward like there's no tomorrow in my opinion.
Agreed, it's always another world, but I think most of us are experiencing differing degrees of the same trend right now. Stay the course re: that summer 2023 acquisition (good move I think) and good luck with the missus. Thanks for reading.
Leigh, it's SO good to meet a likeminded person. As I have found with most of my more fringe beliefs, there are probably more of us out there than it might seem. The best way to find them is to keep it real ourselves. Would love to see you over on my Substack offering your perspective on your local market!
Full disclosure, I was one of the VPs for the National Association of Realtors® last year and have taken the liberty of asking next year's president of the Pennsylvania Realtors® to reach out to you to see how we can get your voice amplified in the space!
Well, Leigh, you just made my night. I must say that despite my skeptical disposition I have a ton of respect for NAR and the way they have elevated our industry. Thank you for reaching out on my behalf. My email is contact@kiramasonrealtor.com. You can feel free to contact me directly any time. Have a wonderful evening.
The market lies in the active listings. Closed sales are irrelevant. It is all about the competition of the active listings. Where I live new home builders are selling new homes for the same price as a 15 year old home they want to sell their inventory ASAP
What about demand from institutional and private investors who seek to snap up prime single family homes in the most desirable areas? They still have access to cheap capital, previously secured. I see strong buyer competition still from those players. And sellers would rather deal with them than a nervous retail buyer.
that s what happens when the government makes money free. You aint seen anything yet. It will be interesting to see the effects of the evisceration of the flip market, rising interest rates, the cost of $ and if the REIT investor and pocket listing realtors who hold up to 15 properties in some cases have the cash flow to survive a dearth of investors. Oh and another, in the 60 years since 1945 post war era, EVERY major recession has occurred 9 months after the Fed has raised interest rates too far. And the depth of the recession is a function the percentage rise in rate from trough to peak. The first one was done in June, with a corresponding reduction in M2 money supply. My conclusion, - cash flow will kill, cash buyers will prevail but will not be enuf to hold this RE scheme up. In the mean time I will continue to short every major REIT ETF and INVH, the proxy corporation for BLK, HLT and MAR all players in this market who can, write them off as losses, unlike the SF homeowner
Kira rocks. But, but, but all housing is local, or so I’m told. Here in the Free State of Florida where we can choose to evacuate or not, the SALT changes, demographics, no state income taxes are drawing a lot of new people. Lots of homes selling to be rented, Krause is pleased. When bullwhip effect of rate hikes hits fully, moving back to Ypsilanti might not sound so bad, tho Ian will bring lots of scab labor (we remember the Roofers From Hell post Andrew), and that may support rentals for a while. Hard to say but foreclosure sales with overbids are a non-tracked index where any idiot with a U.S. IP address can bid on foreclosed properties. Still many Gomers paying $100k++ for foreclosures that have senior debt and they do -0- analysis....many overbids on real foreclosures.....
I've been tracking prices in my area (suburb of Houston that experienced a huge influx of new residents from the lockdown/WFH shift) since 2019 ish, missed the nice window of time to buy ~mid-late 2020 when mortgage rates at historic lows and before prices blew up. Just in the last month or two, I've started seeing listings have to lower prices, which is a first in the last 2 years.
The NYC market is equally slow. Haven't seen it like this since the GFC. I recently ran comps for a client, and with the change in interest rates between just August of last year and today, prices would have to come down 35% to achieve mortgage payment parity between then and now. If rates persist like this, or god forbid go up, then we seem to be headed in that direction.
From your perspective, is there a flow of private business leaving NYC, and if so, how substantial is it?
I can only speak from a personal perspective, but there are still a fair amount of shuttered store fronts that aren't being filled up. However, the city seems busier lately, possibly due to the big banks calling back their employees to the office.
Awesome contribution. Yeah, this really seems like only the very beginning. Here in Philly, it was like they put something in the water about 14 days ago. Sellers were slow to get with the picture and then BAM, calls from every listing agent with a house I've shown in the last two months soliciting offers.
FOMO
Thanks for that 35% quantification. Really brings home what could happen.
Definite value added post. The insights from Kira are illuminating. We are seeing a version of what she shared in coastal NC. Although we still have strong tailwinds in housing from the North to South migration….it’s clear that the winds have changed. We have less supply and prices have increased along with rates versus a year ago. Price or new construction and renovation are up as well. This is definitely an environment where I expect prices to stay elevated, but supply and value over time to to stay relatively low for the near term (12 months). Selling in this environment, as a zero sum game, means you can buy less home than what you sold….which is not good. We are fortunate that there is Federal Military Basing in the area creating sustained turnover and demand in home ownership / rentals, a business friendly environment, and mild climate near great beaches.
She's the bomb. Worth a follow on Twitter and her Substack is free.
Timely article. I own a condo in the Valley Forge area and have been thinking of selling it. Looks like I waited a bit too long.
We're seeing similar action in buyer traffic in the Hudson Valley.
We're not yet seeing an inventory build here yet, but when that happens I fully expect pricing to soften.
Always interesting to hear what's happening in other markets. I'm a real estate appraiser out west (about as beloved as your dentist during a root canal) and Kira's insights match up with the little rural towns I cover as well. Real estate hit a brick wall about two weeks ago here. Some prices have started coming down a little, but we're mostly just flat. It'll probably stay that way (in my local markets) until the economy rolls. That being said, I hadn't done a foreclosure appraisal in two years, but in the last two months I've had a handful of pre-foreclosure appraisals which seems to me that the banks are getting ready or that things are already rolling.
I sold my house in May as I saw interest rates rising and am officially very 'short housing'. I'll need a house by next summer (or my wife will divorce me and take the dog but she's being a good sport about this bet so far). I doubt will be the bottom by then but it will hopefully be slightly cheaper.
It feels like we'll see some real moves in about 6 months when unemployment starts to rise. Home prices won't come down with these low inventories until a handful of people are forced to sell/foreclose. Then it'll snowball downward like there's no tomorrow in my opinion.
Agreed, it's always another world, but I think most of us are experiencing differing degrees of the same trend right now. Stay the course re: that summer 2023 acquisition (good move I think) and good luck with the missus. Thanks for reading.
The FED pivot rapidly approaching.
As a very nerdy Realtor myself-dang this is refreshing and good. Glad to meet Kira through you.
It is so frustrating that while this is happening all over-her perspective is rare in being said out loud.
Leigh, it's SO good to meet a likeminded person. As I have found with most of my more fringe beliefs, there are probably more of us out there than it might seem. The best way to find them is to keep it real ourselves. Would love to see you over on my Substack offering your perspective on your local market!
Full disclosure, I was one of the VPs for the National Association of Realtors® last year and have taken the liberty of asking next year's president of the Pennsylvania Realtors® to reach out to you to see how we can get your voice amplified in the space!
Well, Leigh, you just made my night. I must say that despite my skeptical disposition I have a ton of respect for NAR and the way they have elevated our industry. Thank you for reaching out on my behalf. My email is contact@kiramasonrealtor.com. You can feel free to contact me directly any time. Have a wonderful evening.
TBQH we need more skeptics engaging in the conversation so the outputs are more multi-faceted and honest! =)
The market lies in the active listings. Closed sales are irrelevant. It is all about the competition of the active listings. Where I live new home builders are selling new homes for the same price as a 15 year old home they want to sell their inventory ASAP
What about demand from institutional and private investors who seek to snap up prime single family homes in the most desirable areas? They still have access to cheap capital, previously secured. I see strong buyer competition still from those players. And sellers would rather deal with them than a nervous retail buyer.
that s what happens when the government makes money free. You aint seen anything yet. It will be interesting to see the effects of the evisceration of the flip market, rising interest rates, the cost of $ and if the REIT investor and pocket listing realtors who hold up to 15 properties in some cases have the cash flow to survive a dearth of investors. Oh and another, in the 60 years since 1945 post war era, EVERY major recession has occurred 9 months after the Fed has raised interest rates too far. And the depth of the recession is a function the percentage rise in rate from trough to peak. The first one was done in June, with a corresponding reduction in M2 money supply. My conclusion, - cash flow will kill, cash buyers will prevail but will not be enuf to hold this RE scheme up. In the mean time I will continue to short every major REIT ETF and INVH, the proxy corporation for BLK, HLT and MAR all players in this market who can, write them off as losses, unlike the SF homeowner
Kira rocks. But, but, but all housing is local, or so I’m told. Here in the Free State of Florida where we can choose to evacuate or not, the SALT changes, demographics, no state income taxes are drawing a lot of new people. Lots of homes selling to be rented, Krause is pleased. When bullwhip effect of rate hikes hits fully, moving back to Ypsilanti might not sound so bad, tho Ian will bring lots of scab labor (we remember the Roofers From Hell post Andrew), and that may support rentals for a while. Hard to say but foreclosure sales with overbids are a non-tracked index where any idiot with a U.S. IP address can bid on foreclosed properties. Still many Gomers paying $100k++ for foreclosures that have senior debt and they do -0- analysis....many overbids on real foreclosures.....
I've been tracking prices in my area (suburb of Houston that experienced a huge influx of new residents from the lockdown/WFH shift) since 2019 ish, missed the nice window of time to buy ~mid-late 2020 when mortgage rates at historic lows and before prices blew up. Just in the last month or two, I've started seeing listings have to lower prices, which is a first in the last 2 years.
Ya...Arizona is taking it in the shorts too.