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Experts don't think real estate market will tank in 2019
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 207
Location: Cambridge, MA

PostPosted: Fri Dec 21, 2018 5:27 pm GMT    Post subject: Experts don't think real estate market will tank in 2019 Reply with quote

An MIT professor, mortgage startup, and listing agents step into a bar...

http://bit.ly/PredictRE_BosCom19

Macro-perspective, spin + self-interest do not equal a crystal ball. Anyone want to discuss over beer, use #REonTap to write a rebuttal!
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 207
Location: Cambridge, MA

PostPosted: Fri Dec 21, 2018 5:45 pm GMT    Post subject: Reply with quote

If you'd prefer to reply / debate by Twitter, use this link:

https://twitter.com/RealEstateCafe/status/1076168805678751745
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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bsg61
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PostPosted: Fri Dec 21, 2018 11:26 pm GMT    Post subject: Re: Experts don't think real estate market will tank in 2019 Reply with quote

RealEstateCafe wrote:
An MIT professor, mortgage startup, and listing agents step into a bar...

http://bit.ly/PredictRE_BosCom19

Macro-perspective, spin + self-interest do not equal a crystal ball. Anyone want to discuss over beer, use #REonTap to write a rebuttal!


“Buyer frustration is the highest I’ve ever seen it,” he said. “Demand is going to be high again in the spring. We will see the return of bidding wars.”

Well, that's just great. Uplifting news. If there is a #REonTap crying over beer gathering planned, please post it.

Happy Holidays!
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 207
Location: Cambridge, MA

PostPosted: Sat Dec 22, 2018 12:00 am GMT    Post subject: Reply with quote

@bsg61 — Absolutely, but it’s not clear who should be crying or why. What’s your take on this excerpt from our Bidding War Scorecard for Somerville 4Q2018 (MLS download, 5:30pm, 10/01-12/21/1Cool:

174 closings across all property types -- SF, CC, MF & LD. Roll my eyes when I see that 20 of those have sold 10% or more OVER asking price, because 21 have sold for 10% or more OFF the original asking price, and another 36 properties have reduced their prices 10% or more.

That's a 3 to 1 ratio.

If it's three times more likely that a property will sell for 10% or more off, why are one in three buyers still paying more than 10% over asking price? Could it be that they have been manipulated in BLIND bidding wars?
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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bsg61
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PostPosted: Sat Dec 22, 2018 12:47 am GMT    Post subject: Reply with quote

Haven't a clue. Perhaps they were manipulated but perhaps the properties that sold for over asking were more "desirable". Back to tears in my beer....
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Guest






PostPosted: Sun Dec 23, 2018 12:51 am GMT    Post subject: Reply with quote

RealEstateCafe wrote:
@bsg61 — Absolutely, but it’s not clear who should be crying or why. What’s your take on this excerpt from our Bidding War Scorecard for Somerville 4Q2018 (MLS download, 5:30pm, 10/01-12/21/1Cool:

174 closings across all property types -- SF, CC, MF & LD. Roll my eyes when I see that 20 of those have sold 10% or more OVER asking price, because 21 have sold for 10% or more OFF the original asking price, and another 36 properties have reduced their prices 10% or more.

That's a 3 to 1 ratio.

If it's three times more likely that a property will sell for 10% or more off, why are one in three buyers still paying more than 10% over asking price? Could it be that they have been manipulated in BLIND bidding wars?


Asking price really means very little. Some sellers get suckered by their realtors into listing too low, triggering a bidding war that still might not even reach market price. Some sellers are delusional and list too high above market price against the advice of their realtors. The only price that matters is the final sales price and sales prices are still going up yoy. They will go up yoy in 2019 because we are at record low unemployment. Prices only tank when people lose their jobs. Prices have never tanked when interest went up. Prices actually went up when interest rates rose to 18% in 1980s in between the double dip recession.
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Sun Dec 23, 2018 3:23 am GMT    Post subject: Reply with quote

Anonymous wrote:
Prices have never tanked when interest went up. Prices actually went up when interest rates rose to 18% in 1980s in between the double dip recession.


Which years was that? Inflation was high then too, so real prices may have been falling.

- admin
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Guest






PostPosted: Sun Dec 23, 2018 9:34 am GMT    Post subject: Reply with quote

admin wrote:
Anonymous wrote:
Prices have never tanked when interest went up. Prices actually went up when interest rates rose to 18% in 1980s in between the double dip recession.


Which years was that? Inflation was high then too, so real prices may have been falling.

- admin


https://2.bp.blogspot.com/-RufjTmfZBAI/UctWiFs1beI/AAAAAAAAa2o/3jtKJ5PuN3A/s1600/HousePricesMortgageRates.jpg

https://static.seekingalpha.com/uploads/2011/7/6/saupload_housing_vs_interest_rates.png

If anyone believes that high interest rates cause housing prices to tank, please show historical evidence. Please don't say everyone knows it because some people believe everyone knows the earth is flat. Wink

Randomly ask 100 people about real prices and 99 will give you a blank look and 1 person will give you the wrong answer. People only understand and act on nominal prices. People buy and sell houses only based on nominal prices.

While we are debunking myths, cold weather doesn't cause colds and vaccines don't cause autism. Wink
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Sun Dec 23, 2018 2:50 pm GMT    Post subject: Reply with quote

Anonymous wrote:
People only understand and act on nominal prices. People buy and sell houses only based on nominal prices.


I understand and act on real prices. As a buyer, that's a pretty big opportunity cost if house prices are creeping up nominally while treasury yields are in the double digits.

- admin
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Elrond



Joined: 27 Feb 2013
Posts: 48
Location: Boston, MA

PostPosted: Thu Dec 27, 2018 8:49 pm GMT    Post subject: Reply with quote

Somerville is so over-hyped! I’m closing on a MFR next week there at just under 30% off the original ask. The market is definitely changing!

RealEstateCafe wrote:
@bsg61 — Absolutely, but it’s not clear who should be crying or why. What’s your take on this excerpt from our Bidding War Scorecard for Somerville 4Q2018 (MLS download, 5:30pm, 10/01-12/21/1Cool:

174 closings across all property types -- SF, CC, MF & LD. Roll my eyes when I see that 20 of those have sold 10% or more OVER asking price, because 21 have sold for 10% or more OFF the original asking price, and another 36 properties have reduced their prices 10% or more.

That's a 3 to 1 ratio.

If it's three times more likely that a property will sell for 10% or more off, why are one in three buyers still paying more than 10% over asking price? Could it be that they have been manipulated in BLIND bidding wars?
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 207
Location: Cambridge, MA

PostPosted: Thu Dec 27, 2018 9:19 pm GMT    Post subject: Reply with quote

@Elrond, Thanks for your perspective and congrats on saving 30% off the original asking price. Certainly doesn’t fit the script that the Mass. Assoc. of Realtors is offering with their report on the November 2018 market:

https://www.marealtor.com/news/2018/12/27/massachusetts-home-sales-down-in-november

They do admit, “November condo sales were also down 11.7% (1,994 to 1,760) and median prices were up 1.4% ($369,900 to $375,000)” but blame the problem on low inventory.

Are price reductions in the luxury real estate market the leading edge of the “Great Senior Sell-Off? Real Estate Cafe’s snapshot of single-family homes priced $2.5M or more revealed the following across Massachusetts during 4Q2018:

4 in 10 homes sold for more than 10% off;

55% sold $250K or more off the original asking price; and

15 homes, or about 1 in 5, sold for $1M — yes, $1 MILLION — or more below original asking price.

Think housing prices have reached a “tipping point” in other price ranges where you’re house hunting? Regardless, if you’d like to work with a buyer agent with a track record of helping homebuyer clients SAVE MILLIONS over the past three decades, glad to buy you a beer or coffee.
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 207
Location: Cambridge, MA

PostPosted: Thu Jan 10, 2019 2:28 pm GMT    Post subject: Reply with quote

Tweet, reply below or online:

#RETippingPoint: Volume may be up but real story is that prices are not just softening, they’re falling. Time for DIY buyers, particularly 1st-time buyers using parental gifts to exercise prudence. Meet offline to discuss #DefensiveHomebuying & proactive househunting? #ProactHH

http://bit.ly/MAFalling_Dec18
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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Guest






PostPosted: Sat Jan 19, 2019 2:00 pm GMT    Post subject: Reply with quote

RealEstateCafe wrote:
Tweet, reply below or online:

#RETippingPoint: Volume may be up but real story is that prices are not just softening, they’re falling. Time for DIY buyers, particularly 1st-time buyers using parental gifts to exercise prudence. Meet offline to discuss #DefensiveHomebuying & proactive househunting? #ProactHH

http://bit.ly/MAFalling_Dec18


If this is the beginning of the next downturn, it is time to sell, not buy. Historically, you have another year to sell before prices begin the downward yoy cycle. The bottom will arrive in another 3 years and will last 3 years before it starts the upward yoy for another 8-10 years. You want to buy at the bottom.
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bsg61
Guest





PostPosted: Sat Jan 19, 2019 5:43 pm GMT    Post subject: Reply with quote

It seems that sellers and/or realtors are getting a grip, there are many examples of dramatic price decreases in the last 6-12 months. Note these two condos with significant price decreases, still sitting:

In Brookline, initially listed at a most reasonable price of Laughing $799,500 in June 2018, several decreases to $649,000 in December 2018, still no sale.

https://www.zillow.com/homedetails/13-Linden-St-APT-3-Brookline-MA-02445/56565464_zpid/

The below Cambridge condo in a structure built in 1863 first listed at $679,987 in February 2018 with a cool decrease of 130K to it's current price of $549,977:

https://www.zillow.com/homes/for_sale/Cambridge-MA/house,condo,apartment_duplex,townhouse_type/2105609057_zpid/3934_rid/0-625000_price/0-2517_mp/0-500_hoa/globalrelevanceex_sort/42.435113,-70.996914,42.321239,-71.227627_rect/11_zm/0_mmm/
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 207
Location: Cambridge, MA

PostPosted: Sun Jan 20, 2019 3:32 am GMT    Post subject: Reply with quote

@Guest & @BSG61 — Thanks for tracking slumping market, and insight into market timing. If one is an investor, waiting for the bottom of a cycle makes sense, but like to the book title, homebuyers can be “Predictably Irrational,” and some may have compelling reasons to buy.

If 2018 taught us anything, it’s that housing demand is sensitive to interest rates. That explains both the slump and surge in mortgage applications during the past few weeks. Think one housing economist I recommend following on twitter, @JohnWake, says the spike was the highest since 2010 or 2011 (will fact check and post his tweet).

Regardless, the question some readers maybe asking is should we jump in now while rates are low, or will the first half of 2019 be a “greater fool’s housing market?”

What are your thoughts?

https://www.instagram.com/p/Bs1kdS6HrY2/?utm_source=ig_share_sheet&igshid=11g561c0evej7
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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