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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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 Posted: Wed Feb 27, 2013 7:45 pm GMT Post subject: |
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The inventory numbers are a big deal. Down 27% YOY with just 4.7 months of supply right now.
Admin, what is your thinking these days? Have you bought? It seems like your primary concern (the inevitable rise of interest rates) is still valid.
I bought in December 2012, yet I still follow the numbers compulsively... |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Feb 27, 2013 8:11 pm GMT Post subject: |
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| Renting in Mass wrote: | The inventory numbers are a big deal. Down 27% YOY with just 4.7 months of supply right now.
Admin, what is your thinking these days? Have you bought? It seems like your primary concern (the inevitable rise of interest rates) is still valid.
I bought in December 2012, yet I still follow the numbers compulsively... |
Yes, that is my primary concern. I wouldn't call a rise in rates "inevitable" per se, because it is possible that it will never happen and it's also possible that it will happen but not for many, many years. That said, it's perfectly plausible that it could happen, and it is a massive, single point of failure for prices, so it is something worth planning for.
I have not bought yet but am hoping to within the next few months. I'll be doing so purely for personal reasons and not because I think now is a good time to buy (though I did call a bottom last July, conditional upon mortgage rates staying ultra low, the economy not worsening, and government welfare continuing to flow to the FIRE industries). I had hoped to wait out QE, but I am probably going to need to move soon, and I want to skip the intermediate rental and extra move that would be required to continue waiting for QE to end because I abhor moving. I fully expect to lose substantial real money in the long term if rates do rates, but I am considering it the cost of my sanity (to avoid the extra moving) and I will buy conservatively enough that it will be manageable.
In addition to the interest rate risk continuing to get worse, I actually think it's a bad time to buy right now because of what you pointed out about inventory. The inventory numbers are awful for buyers. I'm hoping that sellers get enticed back in for early spring with all the talk of rising prices and cheerleading from agents and newspapers. (Though when have they not been cheerleading?) I'm following the inventory using this page:
http://www.deptofnumbers.com/asking-prices/massachusetts/boston/
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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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| Posted: Wed Feb 27, 2013 8:28 pm GMT Post subject: |
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| Quote: | | I had hoped to wait out QE, but I am probably going to need to move soon, and I want to skip the intermediate rental and extra move that would be required to continue waiting for QE to end because I abhor moving. I fully expect to lose substantial real money in the long term if rates do rates, but I am considering it the cost of my sanity (to avoid the extra moving) and I will buy conservatively enough that it will be manageable. |
That pretty much mirrors how my thought process went. Good luck with your search! I didn't like most of the people I dealt with during the home buying process, but I could recommend the guy I worked with to get my mortgage. Let me know if you're looking. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Feb 27, 2013 8:51 pm GMT Post subject: |
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| Renting in Mass wrote: |
That pretty much mirrors how my thought process went. Good luck with your search! I didn't like most of the people I dealt with during the home buying process, but I could recommend the guy I worked with to get my mortgage. Let me know if you're looking. |
Thanks. I do have a pre-approval already, but I think my rate could be significantly better, so sure. Feel free to link to the mortgage agent here or email me - whichever you prefer.
And congrats on buying.
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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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| Posted: Thu Feb 28, 2013 1:26 am GMT Post subject: |
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I sent you an email.
I just realized I wrote that I bought in December 2012. It was actually December 2011. I always think of having bought in 2012 because I closed with only a week left in 2011. |
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Renter
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| Posted: Wed Mar 13, 2013 1:26 pm GMT Post subject: |
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Admin,
Are you at all in the camp of people that think this year could be a slower year for home sales? A real estate blog and real estate analyst MHanson.com put forth a pretty compelling case that the most recent R/E boom has been driven by ultra low interest rates. The rates moved a lot of people who were on the side lines to buy in the last year and as a result there may be a lack of buyers in 2013?
Good luck. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Thu Mar 14, 2013 12:12 pm GMT Post subject: |
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| Renter wrote: | Admin,
Are you at all in the camp of people that think this year could be a slower year for home sales? A real estate blog and real estate analyst MHanson.com put forth a pretty compelling case that the most recent R/E boom has been driven by ultra low interest rates. The rates moved a lot of people who were on the side lines to buy in the last year and as a result there may be a lack of buyers in 2013?
Good luck. |
That effect may happen at some point, but why would the end of 2012 be the cutoff? Rates are still ultra low and potential buyers could still be being pulled forward. Note the link at the top of this article, which says that sales were up 15.7% YOY in January.
What I wonder is if the low inventory is going to make the year slower.
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Renter
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| Posted: Thu Mar 21, 2013 3:31 pm GMT Post subject: Mhanson 2013 Housing Hangover |
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Admin,
Have you looked at any of the analysis by http://mhanson.com/archives/1147
Being a renter currently I have a natural bias to believe MHanson may be on to something with his belief in a 2013 Housing Hangover.
The good news baked into the Housing market borders on euphoria - there is wide spread belief that there is no longer any downside risk!
Best Regards. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Fri Mar 22, 2013 11:09 am GMT Post subject: |
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I hadn't until just now. He does make some good points. I've noted myself many times in the past that a major theme that has set the economic backdrop for last three decades and led to a lot of (precarious) conventional wisdom, not just with housing, is not just low interest rates, but continually falling interest rates and inflation. What happens when they merely stop falling?
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The good news baked into the Housing market borders on euphoria - there is wide spread belief that there is no longer any downside risk!
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Yeah, I think there is plenty of downside risk. I would probably keep renting myself if I were only considering the financial trade offs.
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admin
Site Admin
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Location: Greater Boston
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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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| Posted: Wed Mar 27, 2013 2:25 pm GMT Post subject: |
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| Quote: | | The trend of rising volume has been broken. |
Why is lower sales volume generally portrayed as a bad thing? If it's due to low inventory, that's a good thing for prices and the economy in general. |
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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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| Posted: Wed Mar 27, 2013 2:38 pm GMT Post subject: |
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| Quote: | | Being a renter currently I have a natural bias to believe MHanson may be on to something with his belief in a 2013 Housing Hangover. |
Renter, do you read Calculated Risk? He's not prone to euphoria, and his track record on the housing market is solid. He thinks that housing has bottomed. I would recommend reading him just to counterbalance your understandable bias towards the other side of the argument. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Wed Mar 27, 2013 3:09 pm GMT Post subject: |
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| Renting in Mass wrote: |
Why is lower sales volume generally portrayed as a bad thing? If it's due to low inventory, that's a good thing for prices and the economy in general. |
By newspapers? My guess is because they are a mouthpiece for the real estate industry. Fewer sales means fewer commissions. Also, at one time, lower inventory probably meant lower classified ad revenue (though that may be obsoleted by the Internet now).
I think it's also funny that higher prices are generally portrayed as a good thing (except, of course for now, when total commissions drop). Over the long term, rising prices are on average worse for everybody outside the industry, except to the extent that they rise to keep up with inflation and incomes. Increases beyond that mean that we are just forced to commit an ever increasing percentage of our lifetime income for the sole purpose of bidding against others doing the same thing. In the shorter term, rising prices are also great for those who can cash out now and who bought when housing was cheaper in terms of decades of your life spent on it, but the tab for that windfall gets passed on to their children (i.e., our generation).
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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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| Posted: Wed Mar 27, 2013 5:16 pm GMT Post subject: |
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| Yeah, I was referring to newspapers (and the media in general). |
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