Individual neighborhoods are anecdotal not to mention people confuse asking price declines with sold price declines and they are very much different beasts. There will probably be some parts of country that see significant declines. Not sure what you mean "No Reason" housing prices chase the cost to build. Do you believe the cost to build new is going to see a significant decline?
You don't see an entire decade of under building as being an opposing force to your assumed headwinds? Will this decline in the cost to build be from labor or materials? Which do you see declining significantly and why? There is no reason to expect forced selling as currently leverage levels are extremely low and most people are sitting on juicy low interest mortgages.
KInd of frustrating nobody will lay out the prognostication besides, "they went up a lot" as the reasoning for the coming crash. Also when does this occur? This next quarter?
As someone who just bought a house recently, nothing fancy I’m not rich I make a little over 100k a year. I own my previous home and currently renting it now that I’m moved into the new house. I bought a 1600 square foot 3 bedroom 2 bath house in a nice area, right down the road from the country club in a city with 20k people just outside the bigger city of Corpus Christi. I’ve been shopping for 2 years, I’m not going to get into any pissing match or argue national levels. My anecdotal experience is things are changing, prices are falling, contracts are constantly being canceled and people who qualified when they made an offer no longer qualified after they had an offer was accepted.
Price of the house I bought originally listed at $249,900 I’m just going to refer to it as 250k from here on out. The house sat in the market for 64 days according to Redfin before I put an offer. They lowered the asking price to 240k I made an offer of 200k, 5k earnest money much to the chagrin of my agent who refused to accept that the market was shifting to a buyers market. They countered with 220k, I waive the appraisal contingency and the inspection contingency and I told my agent they can pound sand.
My agent came back and said “they have another offer but they said they can do 215k but you have to waive the inspection contingency and the appraisal.” I told my agent they don’t have shit or they wouldn’t be talking to us tell them 210k I’ll never waive either of those contingencies and they have to give me 3k credit towards closing cost. They accepted, after inspections I got another 1500 for minor repairs (mostly for a new interior paint) and the house was appraised at 255k.
Every house in the area are being listed for the same amount, prices dropping after a couple of weeks and then go pending and I’d say nearly half end up back on the market and then pending again and eventually selling but I don’t know the price people are paying. In January I would have never gotten that deal, any credits or anything like that. I bought the house that has been appraised at 255k, originally listed for 250k for 210k and got 3k in credit towards closing and 1500 for minor repairs. That’s a little more than a 15% decrease, things are only going to get worse as more buyers drop out or are forced out due to no longer being able to qualify because of higher interest rates my rate was 4.25% in January when I was close to making a deal it would have been 2.35%.
Asking prices are declining in my area constantly, I can’t tell you what the actual selling prices are but I don’t think my experience is an outlier and probably the more common experience. People who have to sell are listing high and can’t find buyers, serious buyers with money aren’t just throwing shit away and want good prices due to increasing interest rates and the sellers are coming down on prices to be able to sell. How far they come down will vary from area to area but these prices appear to me like they are coming down. It seems highly more likely that this is the case over me being some super smart dude who fucked over the sellers of the house I just bought, I’m no one special and the house I bought isn’t anything grand but it’s a step up for me in a school district I want my child to go to school in.
As to actual numbers, I’d go with 15% as I’ve personally seen that. I see that as a safe bet, places like Boise and Austin are going to get hit much harder imo.
Edited to answer when, Let’s go with August 2023.
