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“Bad Time to Buy a Home” & “Good Time to Sell a Home

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Americans See the Raging Mania: “Bad Time to Buy a Home” & “Good Time to Sell a Home” Sentiments Spike to WTF Record​

by Wolf Richter • Jul 8, 2021 • 167 Comments

If these sentiments become reality over time, it’s going to be a sea change for demand and supply at these crazy prices.

By Wolf Richter for WOLF STREET.​

So just briefly: This explains some of the dynamics we have seen in the housing market recently, with mortgage applications, sales of existing homes, and sales of new single-family houses dropping for months even as investors have piled into the market and as inventories have started to rise.
Fannie Mae has been conducting its National Housing Survey monthly since 2010, one of the data collection efforts to come out of the Housing Bust. The survey covers a range of housing-related topics. And in its survey for June – conducted between June 1 and June 24 and released on Wednesday – there are record trend changes in consumers attitudes about whether it’s “a good time to buy a home,” or “a bad time to buy a home,” or “good time to sell a home,” or “a bad time to sell a home.” And you know what’s coming.
The percentage who said that it was a “bad time to buy a home” spiked over the past three months from record to record and in June hit 64%. Consumers cited home prices as the predominant reason.
US-Fannie-Mae-Housing-Sentiment-2021-07-07-bad-time-to-buy-home-.png

A record low 32% of the respondents said that it was still a good time to buy a home, while the percentage of fence-sitters who didn’t know dropped to 4%.
“While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners,” according to Fannie Mae’s press release.
“It’s likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments who have already established homeownership,” the report said.

But it’s a great time to sell a home.​

The percentage of respondents who said that it was a “good time to sell a home” spiked to a record of 77%:
US-Fannie-Mae-Housing-Sentiment-2021-07-07-good-time-to-sell-home.png

Conversely, only 15% of the respondents said it was a “bad time to sell,” and 7% didn’t know.
During the Housing Bust in 2010 and 2011, when prices were low, fewer than 15% of the respondents said that it was a good time to sell. Folks know when homes are priced right to buy and when pricing is ridiculously out of whack for buyers but ideal for sellers, and when it’s time to sell.
But each of these insightful and motivated sellers eager to cash out at these ridiculous prices must find a buyer of the opposite persuasion who thinks they’re getting a deal, which is what makes a market. As the market moves forward, with nearly two-thirds of the people thinking that now is a bad time to buy a home, all these sellers have some explaining to do.
If these sentiments play out in reality, future demand by potential buyers at these crazy prices will be weak; and future supply of homes that sellers want to cash out of at these crazy prices will come out of the woodwork.
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Fiat Metaler

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I'm actually selling a house right now, or soon at least.

Zillow shows the value at 15% higher than any sale in my neighborhood. Seems sketchy but it isn't. Zillow looked at every sale in my area - a larger area than my immediate neighborhood - and on average homes are selling for 30% over last year's tax appraisal. This is not just one or two sales, but the average of every sale.

Interest rates are a lot lower than they were a year ago, so the monthly payments have barely budged.

Also, there is little supply of homes available for sale in most areas.
 

Rusty Shackelford

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We have talked about selling our home and possibly downsizing.....but two factors are stopping us....i wont rent and i wont buy a home any older than what we are leaving (which is 15 years old)...those downsized houses are priced way to high....we would just be moving laterally from a mortgage stand point.

Plus we like the area and our neighbors
 

the_shootist

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When the balloon bursts the numbers will change very quickly, the dollars will drain like water circling the drain of a kitchen sink
 

nickndfl

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^^^ True statement. I went thru the last bust in real estate. It began around 2006 and lasted until the end of 2015. Nobody was buying anything and there was not much selling going on either. Lots of foreclosures had to be liquidated causing a longer down period before recovery.

In the meantime, responsible owners were still paying property taxes and nobody could move anywhere because you were basically stuck since it was not possible to sell.

At the end of 2015 I started buying vacant lots again and scored some of the best locations available. In retrospect, today's home buyers are not as savvy as in the past. Many in the last few years were shopping for the lowest prices regardless if the house was located on a busy street. Bad neighborhoods were still avoided however.
 

the_shootist

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^^^ True statement. I went thru the last bust in real estate. It began around 2006 and lasted until the end of 2015. Nobody was buying anything and there was not much selling going on either. Lots of foreclosures had to be liquidated causing a longer down period before recovery.

In the meantime, responsible owners were still paying property taxes and nobody could move anywhere because you were basically stuck since it was not possible to sell.

At the end of 2015 I started buying vacant lots again and scored some of the best locations available. In retrospect, today's home buyers are not as savvy as in the past. Many in the last few years were shopping for the lowest prices regardless if the house was located on a busy street. Bad neighborhoods were still avoided however.
Remember how much the media has dummy'd down the people since then. They get stupider by the day. They don't know what gender they are or what bathroom to use. How can we expect people with that level of brain capacity to know anything about buying a home?
 

southfork

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Zillow/Realtor.com dont know their modality for pricing, zillow has my home at 410k and realtor.com around 360k, one hell of a difference

Takes time to level out your buy, add up the cost of selling yours and closing on another you lose a lot of money , especially if going thru a viper realtor
 

dacrunch

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Just checked on Zillow

House my son bought for 277k last August is "valued" @ 296k on Zillow. (Not planning on selling... Took a long time to find what he wanted - actually a full year after I gave him $100k for a down-payment... (which I did for his sister too... and she took a year too, but in Sweden...)

I don't know how "first time buyers" can come up with a down-payment today without either huge wages or family help....

--------------

Meanwhile I'm holding on to my duplex & 5-units rentals in a college town... Very basic, old buildings, small bedrooms, showers not baths... Lowest rents in town (but not slums), and hardly ever vacant... Good "bulldog" property manager, so I seldom have to be consulted. Not big "money-makers", but they "carry themselves"... and increase in value "with the market"... Property manager takes 10% "off the gross"... and addresses all the city "compliance"/taxes/maintenance/repairs/utilities/insurance/mortgage etc. bills...

I just "sit back"... My daughter is presently taking advantage of a (rare) vacancy while she's visiting friends in town for a week, bought an inflatable mattress to camp out... Saving $$$ over a motel room or AirBnB...

The whole point of my buying multi-units (early '90's) was to always be sure of having lodgings for my family with "no out-of-pocket" expenses... and it's more than served its purpose...
 

edsl48

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I sold my house and downsized into one of my rentals. Its a nice place right across from a city park so I can wake up and look directly at a fountain out my front windows. Now, by living there two years I can sell the place without getting involved with depreciation recapture as income. This situation is unique to me though.
One thing though is there are a lot of foreclosures hiding in the wings out there and that restricts supply...just sayin.
 

edsl48

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Just checked on Zillow

House my son bought for 277k last August is "valued" @ 296k on Zillow. (Not planning on selling... Took a long time to find what he wanted - actually a full year after I gave him $100k for a down-payment... (which I did for his sister too... and she took a year too, but in Sweden...)

I don't know how "first time buyers" can come up with a down-payment today without either huge wages or family help....

--------------

Meanwhile I'm holding on to my duplex & 5-units rentals in a college town... Very basic, old buildings, small bedrooms, showers not baths... Lowest rents in town (but not slums), and hardly ever vacant... Good "bulldog" property manager, so I seldom have to be consulted. Not big "money-makers", but they "carry themselves"... and increase in value "with the market"... Property manager takes 10% "off the gross"... and addresses all the city "compliance"/taxes/maintenance/repairs/utilities/insurance/mortgage etc. bills...

I just "sit back"... My daughter is presently taking advantage of a (rare) vacancy while she's visiting friends in town for a week, bought an inflatable mattress to camp out... Saving $$$ over a motel room or AirBnB...

The whole point of my buying multi-units (early '90's) was to always be sure of having lodgings for my family with "no out-of-pocket" expenses... and it's more than served its purpose...
There are assorted giveaway programs for first time buyers particularly programs geared to "diversity". Once again Government in action to dissolve the values of people that have worked and saved.
 

BigJim#1-8

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We could get $550-600K maybe more for our property. Problem, we can't find anything comparable for even more $$.
 

dacrunch

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We could get $550-600K maybe more for our property. Problem, we can't find anything comparable for even more $$.

Might want to check "multi-units"... and live "for free" in one .... (or even rent a stand-alone house with the "profits" - free of charge...)
 

davycoppitt

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Just waiting on carpet then we will be moving. Should have the house on the market within the month. Paid 317 little over two years ago and should get 500. Moving into our Triplex to weather the storm. Top tenant will pay most of our living costs. We are taking the bottom two levels, but if we can make by with just the middle I’ll get a renter in the bottom. This is just temporarily until another amazing deal comes along. Amazing deals are out there just have to look, wait, and then jump as soon as it comes up.
 

BigJim#1-8

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Might want to check "multi-units"... and live "for free" in one .... (or even rent a stand-alone house with the "profits" - free of charge...)
Nah, we live pretty much in the boondocks, closest neighbor 1/4 mile away, $995.00 a year property taxes & have been debt free since 2006. We live pretty free right now.
 

Ensoniq

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My prior house in San Diego that I bought in 1995 for 200k is going for 925k

Still glad I got out of Cali alive

~5x in 25 years
 
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hoarder

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We could get $550-600K maybe more for our property. Problem, we can't find anything comparable for even more $$.
This^^
Why sell if you cant upgrade? Cash out and wait for the bust, renting a cheap place and living among the riffraff? Pay huge premiums on gold and silver to dodge inflation, hoping the riffraff doesnt find where you hid it?
 

hoarder

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Also, there is little supply of homes available for sale in most areas.

Key word being "Most".

This is not driven by population growth, not Covid either. The media avoids mentioning that the real cause is White flight, triggered by antifa/BLM violence and crime.
I bet there are plenty of vacant homes in Baltimore, Memphis, Atlanta and all the other urban multicultural paradises.
 

Cigarlover

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y'all just made me look. LOL. My house and 20 acres I bought 11 years ago for 65k cash is now 309-329??? WTF? No way that can be right. a 5 bagger in 11 years. Same problem as everyone else though, even if I sold, nowhere to go except outside the US. Thats my plan anyway so maybe now is the time to go for it. If prices hold through next spring then I think it's go time.
 

Fiat Metaler

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There is a lot of cognitive dissonance on this thread.

Try this as a mental exercise. Change your perspective. Imagine that you are a home buyer. (Some of you have imagined that, saying if I sell then where would I live?)

There just is no supply. Zillow has my house ata $100K over the highest comp in my subdivision because there are no houses available in my subdivision. Supply is seriously constrained and with the lumber spike or unavailability of lumber, not to mention low wage workers, the supply is coming on line any time soon.
 

hoarder

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What causes home supply shortages? Population growth?
If not population growth it's people moving from one part of the country to another, which creates a void. So.....what the hell is taking place in the areas people are departing from?? If they depart, doesn't that usually mean the house is going to go on the market? If a lot of houses in an area where people are departing goes on the market, doesn't that mean that home values go way down?? The mass media seems to have cognitive dissonance on this.
Some real estate in this country is dropping in value in extreme proportion.
 

dacrunch

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What causes home supply shortages? Population growth?
If not population growth it's people moving from one part of the country to another, which creates a void. So.....what the hell is taking place in the areas people are departing from?? If they depart, doesn't that usually mean the house is going to go on the market? If a lot of houses in an area where people are departing goes on the market, doesn't that mean that home values go way down?? The mass media seems to have cognitive dissonance on this.
Some real estate in this country is dropping in value in extreme proportion.

I dunno, but I figure that there must be a "temporal disconnect" in the big blue cities seeing "white flight"... Rental vacancies (in NYC) appear to be at their highest levels, but that hasn't transferred to "lower rental prices" - and a big supply of "homes for sale" hasn't resulted in "lower pricing", just a glut of available apartments and a longer time to find a buyer.
Something tells me it's gonna have to "adapt" to conditions if they don't find tenants or new buyers...
Worse in business r/e...

Just my opinion, from the little bit of news I've read / seen.
 

hoarder

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I dunno, but I figure that there must be a "temporal disconnect" in the big blue cities seeing "white flight"... Rental vacancies (in NYC) appear to be at their highest levels, but that hasn't transferred to "lower rental prices" - and a big supply of "homes for sale" hasn't resulted in "lower pricing", just a glut of available apartments and a longer time to find a buyer.
Something tells me it's gonna have to "adapt" to conditions if they don't find tenants or new buyers...
Worse in business r/e...

Just my opinion, from the little bit of news I've read / seen.
There has to be a reason that TPTB mass media are covering this up. People moving from one part of the US to another should not add up to a net gain in US real estate values. These home values should only be going up in equal proportion to the amount they are going down elsewhere.

Cui bono??
;)
 

dacrunch

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They don't want to show the "white flight" from "blue cities"...
... or the loss of their "tax base"...
Just wait 'til they all become new Baltimores and Detroits and Chicagos...
 

EO 11110

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i keep reading about nyc shysters buying up low/mid class homes in bulk. billions of dollars in homes bought

around houston there are whole neighborhoods of newly-built single family rent houses owned by the boys in nyc

what's not being talked about is that this is basically a massive expansion of gov/communist owned/controlled housing

the gigantic new landlords are card carrying members of the communist coup
 

EO 11110

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See the Wall Street Investors Buying Single Family American Homes

 

hoarder

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Looks like a win-win for banksters. More interest for them to collect.
 

davycoppitt

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We are seeing flight in Minneapolis, but buyers are jumping right in where these guys are fleeing from. Home prices in Minneapolis still sky high and selling instantly. Allot of small businesses looking at moving out of Minneapolis. On our commercial space everyone who was interested was from Minneapolis looking to get out. Personal view its only a matter of time before there are more people fleeing from Minneapolis than looking to buy, then the houses will drop drastically. Crime is still out of hand there and people are really starting to talk about it.

I just cant comprehend what's going on. I don't know how your average joe can afford a 350-500k house and that is pretty much the average around here.
 

Ensoniq

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Some shortage is caused by the eviction moratorium

The market can’t clear and houses aren’t going on the market because deadbeats are gaming the system

Can’t even sell these rentals because who is going to buy a rental that is essentially barred from producing income

This is going to unwind painfully, the biggest bubbles always do
 

BigJim#1-8

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We have family in counties west of chicongo. The situation is the same there, very limited inventory, high prices that are being run up by thousands. Mostly white flight from chicongo.
Same counties were invaded by "relocated" section 8 freeloaders during zer0's term.
 

hoarder

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Some shortage is caused by the eviction moratorium

The market can’t clear and houses aren’t going on the market because deadbeats are gaming the system

Can’t even sell these rentals because who is going to buy a rental that is essentially barred from producing income

This is going to unwind painfully, the biggest bubbles always do
That brings up an interesting point. If one is going to invest in rentals, it may be advantageous to invest in ones that can be converted into owner-occupied units.
 

davycoppitt

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That brings up an interesting point. If one is going to invest in rentals, it may be advantageous to invest in ones that can be converted into owner-occupied units.
If you think single family houses have gone insane check out the prices of owner occupied houses in good areas. Bigger pockets has created a owner occupied fad with the younger generation. Makes sense if you can stand living next to a renter. If I were a single guy I would look for a nice 4 plex, live in one, and have the rest pay all my cost of living and still have a bit left over.

Those properties would also be valued for elderly parents in the future to live with there kids, but not in the exact same space, which I also see a shift with the younger generation.
 

DodgebyDave

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Ensoniq

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That brings up an interesting point. If one is going to invest in rentals, it may be advantageous to invest in ones that can be converted into owner-occupied units.

This is a good point. I think there’s also investment room in the non section 8 area. You don't get 2-3% a month, lucky to get .75% to 1% but don’t have to play the revolving door of evictions. I don’t participate but a good friend is always telling me about tenant leaving in the middle of the night, right before eviction, after pulling the wire out of the walls for scrap and leaving the water running and heat up for spite
 

Fiat Metaler

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There are number of things causing the imbalance:

Reduced supply
- eviction moratorium
- fewer homes in pipeline due to Covid
- higher costs for construction materials
- reduced labor supply due to government payments and travel restrictions Si Senor

Increased Demand
- lower interest rates means price per month is about 10% less per month at 2.75% versus 3.5% a year ago.
- people want to get out of blue states, high tax states (Trump cap on SALT), BLM neighborhoods
- people who work from home no longer feel compelled to live close to their employer or near urban cores.

If you look for larger homes with a basement or land in suburban or exurban areas, there is very little supply. Especially on the fringe of cities that are major employmenht centers. People who used to feel compelled to live within 30 minutes commute of "downtown" now are freed by work from home to live in the exurbs. Also, people working from home feel like they are entitled to a larger, nicer house. People are trading up by moving further out or leaving the black and blue states.
 

Ensoniq

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Great points,

particularly SALT. I don’t have a mortgage anymore but remember the tax deduction on interest played a big role in helping qualification.

I hadn’t though about construction cost and unavailability of labor. Both clear drivers of scarcity / inflated pricing
 

TAEZZAR

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Directly after the fire, we looked to buy in Coos Bay area. We learned so much in a short time.

Few decent homes for sale.
Prices were stupid high.
Property's were not to our liking, too barren, too steep, too rocky, too close to neighbors, etc...
Weather sucks, very high winds in Oct/Nov.
Way too much crime with homeless & druggies.
AND IT IS BIDET TERRITORY !!!

So back "home" it was and we are very glad.
We get to build what we want, built by a builder we have know for 20 years AND for no more than a very few that we saw that only came close to our desires.
Sure we must live in an RV for 2 years, but it could be worse. :2 thumbs up::finished:
 

Tbonz

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We are seeing flight in Minneapolis, but buyers are jumping right in where these guys are fleeing from. Home prices in Minneapolis still sky high and selling instantly. Allot of small businesses looking at moving out of Minneapolis. On our commercial space everyone who was interested was from Minneapolis looking to get out. Personal view its only a matter of time before there are more people fleeing from Minneapolis than looking to buy, then the houses will drop drastically. Crime is still out of hand there and people are really starting to talk about it.

I just cant comprehend what's going on. I don't know how your average joe can afford a 350-500k house and that is pretty much the average around here.

Take a look at northern Minnesota, you can't get on most lakes below 500k. Absolutely crazy how the prices jumped.
 

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Take a look at northern Minnesota, you can't get on most lakes below 500k. Absolutely crazy how the prices jumped.
Neighbor up at the lake is putting there place on the market. Nothing special and they are starting at 515k. I swear less than two years ago it would have been under 300k.