intercst
From the article:
Almost one in five, or 17.8%, of homes that sold in the city during the three months ending Feb. 29, changed hands for less than the seller originally paid
Pretty sure that means 82% of homes are trading hands at higher prices, no?
Did anyone ever say no real estate transaction, no matter how absurdly priced, is guaranteed to have a positive payout?
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More it means 17.8% are being quickly flipped at a loss. The 82% were bought at lower prices long ago.
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When prices are rising rapidly there are people who buy spec homes from a builder. They anticipate the home will be worth more than they paid by the time its completed. So can be flipped for a quick profit.
Of course that only works when home prices continue to rise. They do tell us there is a major shortage of housing. And there is only so much land. Trend is upward over time. But it is possible to overpay for a property. Then you sell at a loss or wait longer for profits.
I bet those sellers wished they’d done a rent vs.buy calculation. {{ LOL }}
intercst
“The city’s median sale price peaked at $1.66 million in April 2022, and as of February had dropped 15%, or $250,000, to $1.41 million.”
And when inflation is included, the drop is 23%.
DB2
But stocks, Goofy! Stocks always go up. Much better than real estate.
Where’s that sarcasm emoji?
–Peter
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From the article -
“Home prices have fallen from their peak, especially when it comes to condos,”
I just discussed this with someone today. I expect condos in Miami, and in other areas in South Florida, to drop dramatically this year and next year due to the very high insurance rates and due to the very high special assessments that are rolling through them. No condo deals yet, but maybe in a year or two the prices will have dropped enough such they become a better deal.
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It is because they have over built. The same goes for places like Myrtle Beach.
How do you know that they bought the house to live in vs do a remodel and flip just at the time interest rates went up and they couldn’t sell at a higher price?
Mike