Real Estate Discussion Forum

#8
Thoughts on housing prices Nassaa/Suffolk going forward—

With some signs of interest rates plateauing and demand still strong I suspect the only direction prices will go are up…? the economy seems to be holding its own and equity markets remain on sold ground—
Thoughts?
 
#9
Thoughts on housing prices Nassaa/Suffolk going forward—

With some signs of interest rates plateauing and demand still strong I suspect the only direction prices will go are up…? the economy seems to be holding its own and equity markets remain on sold ground—
Thoughts?
Nope. IMHO the price increases are solely due to lack of supply. And lack of supply isn't because people either do not want to move out of their starter homes or move to a smaller home when the kids move out — but that the cost to move out has two components:

the exchange of a 4% mortgage for a 7% mortgage

the higher price for the house that the higher % mortgage has to finance.

What I see happening is instead of moving they are upgrading their existing homes.
 
#10
Nope. IMHO the price increases are solely due to lack of supply. And lack of supply isn't because people either do not want to move out of their starter homes or move to a smaller home when the kids move out — but that the cost to move out has two components:

the exchange of a 4% mortgage for a 7% mortgage

the higher price for the house that the higher % mortgage has to finance.

What I see happening is instead of moving they are upgrading their existing homes.
Ok-but what happens in a year or so from now—-
Let’s assume rates drop and mortgage can be had for a few points less—Demand for new homes would naturally increase, no?

I
 
#11
Ok-but what happens in a year or so from now—-
Let’s assume rates drop and mortgage can be had for a few points less—Demand for new homes would naturally increase, no?......
By definition Supply/Demand curves have 2 components, i.e., a supply curve and a demand curve where the price is at the intersection.

If you believe my theory as to a major reason why supply is so low "the exchange of a 4% mortgage for a 7% mortgage" and if mortgage rates drop a lot, then the slope of the supply curve changes and the price intersection changes.

right out of economics 101
 
#12
By definition Supply/Demand curves have 2 components, i.e., a supply curve and a demand curve where the price is at the intersection.

If you believe my theory as to a major reason why supply is so low "the exchange of a 4% mortgage for a 7% mortgage" and if mortgage rates drop a lot, then the slope of the supply curve changes and the price intersection changes.

right out of economics 101
Generally speaking, the RE market is cyclical. I have more experience in commercial office space which is more volatile than residential. However, with employers allowing employees to work remotely, I'm not sure what the long term effect will be.

The economy has levers to re-adjust high prices. Developers will address the high demand with new projects and prices will eventually stabilize.
 
#13
Generally speaking, the RE market is cyclical. I have more experience in commercial office space which is more volatile than residential. However, with employers allowing employees to work remotely, I'm not sure what the long term effect will be.

The economy has levers to re-adjust high prices. Developers will address the high demand with new projects and prices will eventually stabilize.
The new projects are either further out east, or next to the train station basically, no place else to build a substantial amount of houses in Nassau county
 
#14
Generally speaking, the RE market is cyclical. I have more experience in commercial office space which is more volatile than residential. However, with employers allowing employees to work remotely, I'm not sure what the long term effect will be.

The economy has levers to re-adjust high prices. Developers will address the high demand with new projects and prices will eventually stabilize.
And how will they address the high demand. I don't think old houses can be torn down an a high rise built.
The problem is finding vacant land to build on.
In Farmingdale apartments being built bordering the train tracks. Even so 1 bedroom apts start at 3.2K. A group (8?) of houses just built siting adjacent to RR crossing and tracks. A mile away and can hear train horn at 3 am and the windows vibrate a bit. I wonder what itis like right next to the crossing and tracks.
 
#15
And how will they address the high demand. I don't think old houses can be torn down an a high rise built.
The problem is finding vacant land to build on.
In Farmingdale apartments being built bordering the train tracks. Even so 1 bedroom apts start at 3.2K. A group (8?) of houses just built siting adjacent to RR crossing and tracks. A mile away and can hear train horn at 3 am and the windows vibrate a bit. I wonder what itis like right next to the crossing and tracks.
From my observations there is little vacant land available in “ desirable” areas

Back to earlier posts—
Given people are not in such a rush to move out of their existing homes to upgrade —
The “starter” somewhat turnkey home in a desirable neighborhood imo starts at 700 ish—inventory is not high and many homes selling quickly

Rates peak and start falling, so wouldn’t these 700 K homes adjust prices upwards?

What’s next - I d k
 

Slinky Bender

The All Powerful Moderator
#17
Generally speaking, the RE market is cyclical. I have more experience in commercial office space which is more volatile than residential. However, with employers allowing employees to work remotely, I'm not sure what the long term effect will be.

The economy has levers to re-adjust high prices. Developers will address the high demand with new projects and prices will eventually stabilize.
The Commercial Real Estate market is not only in the crapper, but I think It's going to get worse before it gets better.
 
#18
From my observations there is little vacant land available in “ desirable” areas

Back to earlier posts—
Given people are not in such a rush to move out of their existing homes to upgrade —
The “starter” somewhat turnkey home in a desirable neighborhood imo starts at 700 ish—inventory is not high and many homes selling quickly

Rates peak and start falling, so wouldn’t these 700 K homes adjust prices upwards?

What’s next - I d k
The reason "are not in such a rush to move out of their existing homes " is that many have low interest rate mortgages that they would have to trade for higher interest rate mortgages on a new house"
My premise is that is a major reason why starter homes have risen so much

So if rates drop there will be more inventory of starter homes, i.e., more supply to feed the demand
 
#20
From my observations there is little vacant land available in “ desirable” areas

Back to earlier posts—
Given people are not in such a rush to move out of their existing homes to upgrade —
The “starter” somewhat turnkey home in a desirable neighborhood imo starts at 700 ish—inventory is not high and many homes selling quickly

Rates peak and start falling, so wouldn’t these 700 K homes adjust prices upwards?

What’s next - I d k
Don’t worry, Nassau County knows how to keep the inventory turning over it’s called taxes very few people in Nassau are staying in their retirement because of it for new blood
 
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