I’m on track this year to beat my production volume of 2022! From TRD:
During the pandemic, home sales boomed on a foundation of low-lying interest rates. Now real estate professionals are seeing the slowest market in 35 years.
With mortgage rates higher than 7 percent, Southern California home sales have fallen by almost half over the past two years.
Even with home prices inching back up as sales plummet because of the few number of homes for sale, real estate agents, home inspectors, escrow officers and mortgage brokers starve for business.
The average real estate agent earned 19 to 29 percent less business in the latest year measured, according to Real Data Strategies. At least 5,100 agents who made money in the prior year ended the most recent 12-month period without a single sale.
Helen Jeong, a Lake Elsinore agent with Keller Williams whose best year was in 2020 when five sales generated more money than she’d seen in 17 years in the industry, closed just three more sales over the next 2 ½ years.
“2020 was my best year,” Jeong told the Register between pep talks and training at the California Association of Realtors conference in Anaheim, where surviving the slowdown was a key theme. “After that, I’ve only had one closing per year, and that’s terrible.
“Buyers were all priced out.”
Realtors aren’t the only ones suffering. At the CAR conference’s booths for everything from home inspectors to home warranty providers, companies said their business is down 20 percent to 40 percent. Even providers of for-sale signs, lock-boxes and refrigerator magnets feel the pinch.
Some 97,197 Southern California homes sold during the first seven months of this year, the lowest January-to-July total on record, CoreLogic figures show. This year’s sales were 41 percent lower than two years ago.
Gross revenue from sales fell by $114 billion in the 12 months ending in June in an area covered by the California Regional Multiple Listing Service, which includes most of Southern California.
The “CLAW MLS,” which covers west Los Angeles and westside cities, had a $33 billion decrease, while a separate MLS system serving the Coachella Valley had a $5.2 billion revenue drop.
“All the ancillary services around real estate transactions are severely, severely impacted,” Pat Veling, president of Real Data Strategies in Laguna Beach, told the newspaper. “And that’s driving a really significant economic slowdown within the real estate and related channels.
“It’s bubbling under in the overall economy, and nobody’s really talking about it.”
Finally! The truth is starting to trickle out. This needs to happen Real Estate has been kicking the can for 20 years.
Next phase will be banks unwilling to do HELOCs at a rate that make sense. Followed by way more strict lending standards.
After that people will stop making payments on their mortgages.
If banks start foreclosing again 7.5% interest rates are going to guarantee cash buyers at the courthouse steps will pay much less than crazy comps from 6+ months ago.
It will be interesting to see if/how government will respond + bailout real estate again.
Bailouts to come:
1. First-time buyer credit (does nothing to help market)
2. Ask Jerome nicely to lower the rate (he graciously declines)
3. Recession kicks in (sellers hold out)
4. Realtors and lenders flood the market with their personal homes (but they hold out too)
5. The Fed prints money like crazy (which at least stabilizes the pricing)
Market levitates for another two years. Then…..finally the IRS suspends the capital-gains tax for 2-3 years and it’s off to the races!!!
> “IRS suspends the capital-gains tax for 2-3 years”
I gotta gits me an agent license.
Even ratcheting the cap gains tax to inflation would be a huge stimulus.
Housing should come down by 50% to 70% to make sense for the young.
It’s the only way to regenerate society, the young can afford houses and start families. This speculation on residential housing should have never been allowed. Corporations should be banned from the housing market altogether. No one but the banks win from inflated house prices in the bailout mentality we have. There is ZERO reason or benefit in aggregate that the same house that cost $500k 2 years ago is $1.2million other than sheer lunacy and corruption of our governing elite.
As I recall, the housing boom of the early 2000s was fueled to a great extent by sub-prime mortgages and fraudulent appraisals on overvalued homes, and a lot of the people who experienced “job growth” that enabled them to obtain them were themselves working in home construction, financing and real estate (I remember this because I was not, and jobs in my field were nowhere near anything resembling “growth”). The bubble burst when those overextended homeowners lost their newly “created” jobs and could no longer afford their mortgages.
Was there a housing overdevelopment boom during the last 15 years or so that was fueled by buyers with unsustainable jobs? If there was, I missed it. If not, who will be the homeowners who can’t make their mortgage payments en masse when the next recession hits? And how many homeowners will be facing foreclosure, and not just saying, “I guess we won’t sell the house this year after all?”
Some on here never took economics 101. Like most politicians.
If housing came down 50-70% not only would there be a fundamental economic collapse, but the richest would become more rich as they scooped everything up. What I think he means is 50-70% drop while ensuring everyone keeps there jobs and makes same income somehow while the economic engine stalls.
Eventually you run out of everyone else’s money, socialists.
There’s no reason something should cost X . . . lol. Market forces are a bitch. We should just redistribute wealth more than we’re already doing in California. Then the hard workers will really be incentivized to work harder and the lazy will really be incentivized to get off the couch.
It’s thinking like this that is ruining our country. Ruining ingenuity, personal responsibility, consequences to actions, accountability . . .
“….There’s no reason something should cost X . . . lol. Market forces are a bitch….”
What market forces ?
They have been defeated in the last 30 years for good.
Is market forces working when the gov sends $1 trillion PPP to the richest and forgive it tax free?
Let’s not start with the non stop bailouts of the last decades.
Is market forces bailing out private interests with public money?
Why is the Fed balance sheet $8 trillions when it used to be below $1 trillion historically?
Because that is the amount of money they printed and gave it to their cronies who in turn put it into real estate and stock markets making it unaffordable for anybody else. It is also the reason the same crappy house cost twice more.
Ain’t no free markets, other than the labor markets.
Come on now – can’t you grumpy old guys take these tired gripes to Reddit or somewhere?
@JtR
it has been awfully quiet lately on the Dr Housing site. Maybe that explains the spill over to here?
I didn’t mention on anniversary day that more than half of the 63,000 comments left here over the last 18 years were back when I listened to these every day.
But we found out that they weren’t the market movers.
I’m much more interested in hearing from those who are trying to make the best housing decisions of their life.
To put in perspective
1200 sqft townhouse selling in 92130 zip today at $1.170.000 was bought 25 years ago for $170k or appreciated 7x .
If I purchase the same property today will it be 7x or $8mil in 25 years?
I am inclined to say why not, if the same question was asked 25 years ago about current prices, probably not.