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Yea, we repeat that every week. What prompted your post
People keep waiting and I fell like it’s to their own detriment
I’m not asking for a crash I’m asking for a correction due to rising interest rates
Exactly. Interest rates increased tremendously whereas housing prices went down just a bit. Im waiting for it to catch up. It just doesn’t make financial sense to buy a house now basically since housing prices have barely changed when peoples buying power is so much worse.
People who are waiting for prices to fall are missing out
One year ago rates were 3.5%. Even a month ago rates were in the 6% range
Wow… looks like everyone thinks housing will go up.
Which means it’ll probably go down.
Coach
I think some are saying the payments will go up (it will be more expensive to buy a home), but that doesn’t necessarily correlate to sale prices.
I’m not sure how we are defining crash versus correction.
In several markets we are quite a bit down from the highest of highs. I’m Austin where I am prices are down at least 20% in many areas from the highs. Is that a correction? Yes. Crash? Maybe not.
Granted those crazy prices didn’t last that long, some people still will feel some pain if they bought recently and for some reason are trying to sell.
Interest rates are the big unknown. We keep saying no crash but to me that is predicated on moderating the interest rate hikes. We assume that hikes will slow…. Most analyst agree. But “most analysts” have also been wrong many times. Our federal government seems absolutely determined to destroy any progress the Fed is making with more handouts and there’s still a ton of cash across individuals and corporations. If inflation doesn’t cool fairly soon …. Expect severe pain with increasing rates.
Bold assumption mr consultant.
Consumer debt is going up to a dangerous level with rising CC interest rates. It’s a fragile situation in my opinion. Not saying that it’ll be 2008 again, but probably smart to expect some headwinds.
Unemployment is still extremely low, hence why inflation is so sticky. If you look at JOLTS and non-farm payroll reports, you’ll see people are still finding jobs even if they leave their jobs which is pushing up inflation. There’s a multitude of reasons like there are less qualified workers today because Covid retired many seniors early, accelerated automation… etc One constellation, is that it seems that wage inflation is starting to come down a little.
But all in all, even if bills are piling up, people will sell their TVs, furniture, cars, boats etc… before they sell their house.
Imagine selling your house that you got a 215k mortgage for paying 3.0% interest for 175k, just to rent at an amount higher than your mortgage for less property while still paying off the mortgage of your former home.
Crazy right? That’s why there will be no crash, and any dip in prices will be absorbed quickly by all of the hungry buyers currently priced out of the market.