I watch markets by watching houses. I care more about ones around me. Eight months ago I saw houses being listed for $300k more than they were bought a year previously. Flippers in full freakout. This month I see houses being sold for $100k less than they were listed for a month previously. Flippers in full retreat. As of two months ago, the Seattle market was publicly and officially down 15% year over year. As of this week, the Seattle market is privately and unofficially down 10% since last month. Shit's gonna rip.
Houses are down here, but I don't follow closely enough if it's just late season or a larger trend. A nice house next to a coworker was on the market for months, left and came back listed 10% lower and got an offer. Stuff is selling, but not like it was six months ago.
Wuh oh. Any speculations why? Run of the mill late-cycle consumer indebtedness?
Prices are too fucking high. Let's say you're me. Let's say you're an engineer fresh outta college and your starting salary is $54k. You buy the house for $175k with $10k down and interest rates at 4%. You're paying 800 a month. Now let's say you're me if I were the age of the kids graduatig today. Let's say your starting salary is $69k, which is average. You buy the house for $425k with $40k down and interest rates at 5%. You're paying $2000 a month. Same house, same market, same education. Oops. Not same education. At some point shit costs too much for people to buy it. And if it still needs to be sold, it has to become cheaper.
You've described my situation exactly. Could I buy a house? I mean, yeah. Am I going to? Not at these prices, I don't want to be sidled with that.