Tuesday, January 22, 2019

Pretty ugly.

I have been seeing houses sit on the market for six months now. Which is consistent with real estate slowing this past summer. Everything seems to be "right priced" currently. But houses sitting that long really starts a negative feedback loop.

When prices were going up like crazy you would sell because you are getting a premium. Now that prices have stabilized, it's going to be very hard to wedge people out from those low interest rates. And when you can sell in 6 days like April of last year, you feel pretty secure. When it is routinely taking months to sell houses - you pull back. I would expect to have your house be on the market for at least three months right now.

I am completely shocked at how much new housing inventory is still on the market in my city. Home builders are going to be butthurt. They have had to lower prices and those places are still siting on the market for six months as well. Then there is this.

California sees its first home sales drop in four years.

Southern California usually leads the way. But what does it matter? We are in a global housing reset. Australia said - screw the prices from the 2008 recession. We are taking these prices back 30 years. It's been going on for months. And I keep wondering if Australia had the internet when we went through our crisis. But that tells you how bad China is and has been before the tariffs.

Canada looks under real stress now. So yeah. I want to say we have a good foundation here in the US because most people are locked into very low interest rates. But people never know when they have it good, and they always overextend themselves. Plus, people are very adverse to pain. They will do anything to avoid it and they do irrational things. So I don't know how this is going to play out honestly.

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