Infopost | 2022.05.24

San Franscisco cliff house burning on fire onlookers retouched

A few weeks ago I talked about real estate, margin loans, and Elon Musk. I wasn't entirely convinced by a WSBer's assertion that we were headed for another real estate meltdown, though I think a market and real estate pullback is long overdue. Nothing has kerploded, but there's another chapter in this saga. (Fair warning: this post has plenty of other people's crude language and usernames.)

It started with a link from this daily discussion comment:

WeedToken WeedToken Panic setting in to the housing market.

People are panicking because they expect multiple offers and instead are getting ZERO.

OP: Looking to sell my Austin house

House Zillow Texas Reddit post
Someone looked up the Zillow posting but it wasn't verified by OP.

Valuable-Question935 Valuable-Question935 This is my first time selling a home and we are going on the market next week. We took out a HELOC on our home a month ago and it appraised for $800K per the bank. Our realtor is recommending we list at $800K, but our next door neighbor who sells new homes for Brookfield said that's way too low...

Our home is a 2016 build and has a lot of upgrades and we obviously want to make sure we are not leaving money on the table, but I also know that if we overprice it our home could sit on the market which I'm worried could make it look like there's something wrong with it.

I checked Zillow for our zip code 78738 and there really are not many comps because most homes in our zip are $1M or more.

How do we know whose advice to take about list price to make sure we don't leave money on the table but also don't over list and scare away potential buyers?

Whew, okay the 800k HELOC on a bubble-priced home sounds a bit 2008ey, though how much can you spend in a month. One of the comments:

Bluedevil2k13 Bluedevil2k13 Bee caves area? That house will sit forever if you price too high, imo. Too far out of the inner city. The California transplants prefer Travisso if they're going to live outside city limits

Okay so some of this is "blah blah Austin" talk, but it's funny to see that the hated California transplants are the cornerstone of the Austin/Portland/Seattle/Boulder real estate markets.

Ockronic
/u/Ockronic
Rates have been skyrocketing the last 3 months. You're not going to get as high of a price now as you would have earlier this year. People simply can't afford to spend that much anymore.
mailman_bites_dog
/u/mailman_bites_dog
Lol how do you people still say this shit when all data says otherwise
The Austin market is continuing to rise along with rates. There's still way more buyers than homes listed for sale and most homes are still being sold waiving most contingencies and with appraisal gaps. Especially at the 800-1M range.
Valuable-Question935
/u/Valuable-Question935
I know people keep saying that but my realtor and neighbor who sells homes both say that they have not seen any softening in Austin. I do want to sell quickly though because I do think what happens in the future is still an unknown so I'd rather get it sold quickly.

I'm not so sure about /u/mailman_bites_dog or OP's realtor. But we can always check the stats:

FRED monthly supply houses rates May 24 2022
From FRED: The months' supply indicates how long the current for-sale inventory would last given the current sales rate if no additional new houses were built.

Anyway, nbd, OP is looking to sell a home at a precarious time for the market. Fast forward a week...

OP: No offers yet, what do?

Valuable-Question935 Valuable-Question935 We listed our house on the market last week on Wednesday night. It's priced well (confirmed from buyers agents too) and is a 2017 build with lots of upgrades and my agent thought we would easily have 3-8 offers in hand by today...

Well, we don't even have 1... and our realtor said she never would have predicted that and hasn't had any listing not have a single offer after the first weekend since early 2019. Obviously that's not what we want to hear and we are pretty concerned. No other comps in our zip code 78738 they were listed last week have any offers either though and everything is still showing as active so we didn't lose out to any other houses in our area.

I'm not sure if this coming weekend will be any better or not. I think there's a chance anyone moving to Austin may use the holiday weekend to shop but I think a lot of people will be out of town so I'm concerned we may be in the same boat come next Monday.

We are closing on our new house in Denver on June 1 so we really hope to sell our house in Austin soon but I'm concerned if it sits we may just get low offers.

To the comments...

Bluedevil2k13
/u/Bluedevil2k13
Dude I literally told you this would happen lol smh.. no one is rushing to pay that price for bee caves
Ps - nice house though. Some Californian will swoop in eventually
BidenMolestsKids
/u/BidenMolestsKids
head up ass, now reality has run him and his former barista "agent" over like a peterbilt.
Valuable-Question935
/u/Valuable-Question935
The other comps in our sub that just closed last week went pending in 5 days, and both closed at $900K so it's not like there never were buyers here.
DocWhiskyMed
/u/DocWhiskyMed
The stock market got wrecked the last 2 weeks, they were under contract prob a month ago. Times are changing...
BidenMolestsKids
/u/BidenMolestsKids
it was changing 6 months ago, I knew rates were going to take off and there would be a spring flood of properties because everyone thinks that is the busiest home buying season so they want to list in spring...I decided to beat them to the punch and sold in January for a 123% gain, now that house wouldn't be looked at if you took 50k off.
FA1294
/u/FA1294
The houses selling now went into contract 45-50 days ago. They also probably had a locked rate. Your house will probably initiate the downward price decline in your area.

While calling OP's realtor a "former barista" is snark, laypeople getting into real estate is yet another 2008ism. And it's not so much about whether a barista is qualified to buy and sell real estate but rather the inevitable post-gold rush cliff.

Regardless, lots of fingers pointed at the market though there's no mention of margin loans. Maybe margin calls on property won't be the mechanism of our undoing. Then again, this is just one story and one group of commenters.

ExoticHalibut
/u/ExoticHalibut
The interest rate and overall macro environment has changed too quickly and drastically for comps that went under contract a month plus ago to be useful. Those buyers can't afford a $900k house at today's rates.
rifaplax21
/u/rifaplax21
This is literally me. My price target for a home dropped from $900k to the mid $700's seemingly overnight.
fir_meit
/u/fir_meit
I agree. I think there was a tipping point some time in the last week or two that dramatically shifted buyers' ability to afford these prices and their willingness to take on big debt, big payments, and risk. Demand seems to be dropping all over and that makes sense considering the rates and general economic environment.
We listed this weekend, at a price that factored in the changing environment and got one offer, which we were damn lucky to get.

It's Reddit and it's a sub for amateurs, but since I went down the rabbit hole I'm going to consider these datapoints.

DocWhiskyMed DocWhiskyMed My thinking is Austin's home appreciation was mostly due to tech taking over the town, it was accelerated by the pandemic which the entire US also felt. Like you said, stock market especially tech sector got hit very heavy the past month. Layoffs, hiring freezes , and ceos talking about being lean and cutting the fat . Austin's high home prices were for these tech employees who are now like you said are reassessing with their wallets.

Certainly Austin is a special market that may not be reflective of the situation at the national level. Then again:

New home sales MarketWatch 16 percent

Icy_Mouse3201 Icy_Mouse3201 Yes prices are stumbling in my neighborhood in San Diego. A property has been on the market for 3 weeks and has lowered it's price by $40k. People aren't interested in high prices. You missed the window. Lower your price.
I studied economics in college. The entire point of rates rising is to cool the market and lower the prices. Monthly costs literally increase by $1k after a 1-2 point increase and people are approved based on whayntjeh can afford per month, therefore costs have to decrease to meet the demand... No need to get offended or convince yourself rates don't affect costs?

Of course, interest rates could be a compounding issue that may thrust us closer to that death spiral discussed in my early-May post.

rickygervaistwin
/u/rickygervaistwin
Just hang tight- your realtor knows far more than actual buyers! As you stated "our realtor said she never would have predicted" not getting a single offer.
Valuable-Question935
/u/Valuable-Question935
I can't tell if you're being sarcastic or not.
rickygervaistwin
/u/rickygervaistwin
Let me clear up any confusion for you- enjoy your price drops.
regallll
/u/regallll
lol
Elon/Twitter

TSLA Tesla share price May 24 2022

I was originally skeptical about Elon's bid for Twitter. Then it got kind of real. Then the wheels fell off. I won't try to recap all of the twists and turns, but TSLA has been drilling and that might impact Musk's margin loan. He might just qualify to be a WSB mod.

VPNApe VPNApe I honestly can't believe Elon was retarded enough to make an unsolicited bid for Twitter at such a high price when it all depended on his insanely overvalued company staying overvalued in a bear market.

This is more than WSB level retarded.

I have nothing against Elon, but I would really love him to go broke on this deal just to drive home the point that you should never go full retard on margin.
Stonks, Star Wars, and zoomerisms

Bye bye shares Anonymous
Anonymous
Me
Me
Going 100% into options? Better get Anonymous tested for monke pox.
Nah I just sold some of my grants lol
I want to sell a naked call on zm.
Lol
Isn't that what chaturbate is for
Hahaha.
I didn't say I want to do a naked zoom call.
Why not? Cattle
Cattle
Me
Me
Haha side hustle adult chat.
Simba grindset.
Exactly, some zoomer thing I heard.
https://knowyourmeme.com/memes/sigma-males
TIL
Ohhh sigma male.
people these days. fucking nerds Cattle
Cattle
translation: 1/3 of developers are idiots
Me
Me
1/3 of developers jump on the next buzzword as quickly as possible. Also 1/3 of developers are web developers. Curious.
1/3 of developers sigma grinding assembly
Last third Mufasa grinding C++ and JaBa.
doing the hut's dirty work
Poor guy lost both his rancor and sarlaac pit in the space of a week.
And his favorite trophy.
and his slave leia Cattle
Cattle
and pleasure barge
shit luck
Me
Me
For tax purposes it is a work barge.
I think it's more than 1/3 are web Anonymous
Anonymous
Anyways they're the first to go in the Web 3.0 culling
throw em in a sack and chuck it in the river Cattle
Cattle
same way i get rid of the kittens in my neighborhood
The current/next project

Home depot redwood fence planks

We got the ball rolling on astroturf for the veranda. I just need to patch the stucco wall and probably throw some linseed oil on the wood. Next up will be other railings so I'm looking at redwood planks.

Interest has not waned for walks in Connie's backpack.



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