It takes years for existing sellers to wake up to market shifts, unless they’re desperate is why.
If it’s a nicer area, many can ride it out through an entire bust cycle.
Most folks can get 30 yr fixed rates, so any area where most owners have stable employment and/or strong capital reserves, can cruise with zero movement for years if conditions aren’t favorable, barring estate sales, forced sales from divorces, etc.
Your second sentence is the position we're in. We were very fortunate to buy a house in a nice area a year ago. Right at the peak, but it was a fixer-upper from a friend, so we got a good deal and skipped a lot of fees/commissions. Even with what we've put in to fix it up, we should still be above water post-dip.
It's a good place to be in! Pretty much only secondary to the folks who did it a couple cycles ago and paid everything off, and managed to not explode things/screw it up.
Enjoy, and hopefully no one comes around to give you grief about it.
Thank you! We're incredibly fortunate, and did everything fully permitted and whatnot to try and avoid all those wrinkles. Fingers crossed it all goes well.
I think partially because housing is inelastic, the demand outweighs the supply. People already in homes would rather not move than sell at a loss, especially those who have a low mortgage rate from the past few years locked in. New homes being built were delayed due to COVID(and now maybe due to interest rates?).
So even with rising rates its moreso a matter of staying stagnant rather than rising more, at least up to a certain point.
Homeowners are just reluctant to lower, so they are happy to sit with fewer sales and higher prices. It will go down, it is just sticky because nobody wants to admit their home is worth less.
There hasn't been enough time. Mortgage rates have only been high (-ish, not really that high historically) for a matter of months. Home sales are down quite a bit, so people are now sitting on houses that are priced at old prices, but are slow to sell because buyers consider it "too much". The sellers will be forced to cut prices to make sales, but that takes a while because it's emotional.
Housing prices are very sticky in the downward direction. Sellers really hate taking a hit on their asking price, and they will just stay in the house rather than sell for a long time. It will take years of elevated interest rates before prices start to come down significantly.
If it’s a nicer area, many can ride it out through an entire bust cycle.
Most folks can get 30 yr fixed rates, so any area where most owners have stable employment and/or strong capital reserves, can cruise with zero movement for years if conditions aren’t favorable, barring estate sales, forced sales from divorces, etc.