Go back to 2020. I don't think I'll be beating my 2.75 in the future. I'm glad I got it done.

Yea great call. One of Warren Buffet's most famous quotes is perfectly applied for a lot of things in 2020. Be greedy when others are fearful. This was especially true for financing real estate.

Yeah I ain't got the 2.75. I don't expect it to go down soon (or that low again maybe ever?) but if/when it does I'd like to pounce on it.

I don't think we will be seeing 3's or even 4's again for a very long time. That ship has sailed, perhaps they never do get that low again or will take another economic crisis, disaster, etc. A lot of people were betting prices would fall as a result of the higher rates, but so far that does not appear likely to happen.

Okc Realtor just wondering what you are seeing as far as Edmond and other suburban cities as far as the market. It maybe just me but it looks like new house starts are slowing down on the east side of Edmond. Maybe just a material/contractor thing. Or is it a slowing of the market for new homes?

Okc Realtor just wondering what you are seeing as far as Edmond and other suburban cities as far as the market. It maybe just me but it looks like new house starts are slowing down on the east side of Edmond. Maybe just a material/contractor thing. Or is it a slowing of the market for new homes?

The new home market has definitely slowed, lots of price decreases, expired listings, and lots of incentives. There's still a good amount of new construction happening but new home sales have fallen off a lot which is of course only exacerbating the already present supply issue.

Keep seeing these pop up. This seems way overpriced, especially with the current interest rates. 1,792 sqft for $525k on a 1,677 sqft lot. Oof.

https://www.zillow.com/homedetails/1705-NW-11th-St-Oklahoma-City-OK-73106/2060411727_zpid/

Location may play a part in that price.

Keep seeing these pop up. This seems way overpriced, especially with the current interest rates. 1,792 sqft for $525k on a 1,677 sqft lot. Oof.

https://www.zillow.com/homedetails/1705-NW-11th-St-Oklahoma-City-OK-73106/2060411727_zpid/
Federal Reserve bank has median home sale price in the US at 467,000 for 4th quarter 2022, so these aren't that far off.

Sure, it's in a great location in Plaza. Maybe someone will pay it, but it seems too high for OKC. Curious what it eventually goes for. They're offering incentives. Been on the market for 71 days and no price changes.

And yes, that's the median sale price in the US. Oklahoma City is not the average market. Redfin shows a median sales price for OKC at $250,000.

I'll say they zero wow factor for that price. Looks more like a flip than a new build. imo.

Keep seeing these pop up. This seems way overpriced, especially with the current interest rates. 1,792 sqft for $525k on a 1,677 sqft lot. Oof.

https://www.zillow.com/homedetails/1705-NW-11th-St-Oklahoma-City-OK-73106/2060411727_zpid/

Yea it's way over the other new builds in the area. Comps are anywhere from low-mid 200's/sq ft- this one is nearly $300/ft.

Of course we have Wheeler district now that stuff is all over $300/ft. Good luck trying to resell if you need to in the next couple years.

I don't think we will be seeing 3's or even 4's again for a very long time. That ship has sailed, perhaps they never do get that low again or will take another economic crisis, disaster, etc. A lot of people were betting prices would fall as a result of the higher rates, but so far that does not appear likely to happen.

I would bet it's sooner than you think. Our national debt isn't sustainable with Fed fund in the 4s. Plus Treasury won't be able to get anyone to buy T-bills with the Fed so tight.

They'll have to figure out how to cut, while making sure inflation doesn't cook. Likely takes some coordination with Congress on the tax structure and business environment.

2025 we should be back in the 4s on the 30 year.

I would bet it's sooner than you think. Our national debt isn't sustainable with Fed fund in the 4s. Plus Treasury won't be able to get anyone to buy T-bills with the Fed so tight.

They'll have to figure out how to cut, while making sure inflation doesn't cook. Likely takes some coordination with Congress on the tax structure and business environment.

2025 we should be back in the 4s on the 30 year.

2025 is actually right in line with what I'm thinking based on the current market and where things are, agree we could definitely see the return of 4's by then. Still though that's a relatively long time from now if you're "waiting" for prices/rates to fall. Most of the people who "waited" and put off buying in 20/21/22 though have been left with an unfortunate reality & lesson on opportunity cost.

It all comes down to how does the Fed want us to die; through inflation or national default? The Fed can't control national default but they can control inflation. We will see 10% Prime rate before we see 3%.

Many of us that sold in 2022 actually made enough money to pay cash for the next place so interest rates don't matter.

It all comes down to how does the Fed want us to die; through inflation or national default? The Fed can't control national default but they can control inflation. We will see 10% Prime rate before we see 3%.

Many of us that sold in 2022 actually made enough money to pay cash for the next place so interest rates don't matter.

I don't think we're gonna see 10% but we might touch 8's this year if we continue to experience a hot labor market. I'm not so sure that it's a war on inflation so much now as it is a war on the unemployment rate and unwinding the labor market. Inflation has come down sharply as a whole and expect it continue to trend that way but the 2% arbitrary target we adopted in 2012 may not be realistic now. Powell has been clear, unemployment rate must go up. They're going to force layoffs to a certain level. This as much as anything should make people question things.

To your second point, there are still a lot of cash buyers in the market, more than most realize. If you sold out of state things are cheap here in most cases. Granted there is a lot less liquidity right now with the FED firing torpedos into the financial market every chance they get now. Eventually though things will swing back the other way, now is a good time for cash buyers to get serious because prices will continue to go up here until you get to some of the more restrictive higher points. We are experiencing a resurgence of multiple offers in the entry level - middle tier price points again due to inventory trending back lower.

I've bought 2 houses in my life. First one in 1978 I was 22 years old, single so only 1 income household. My yearly income was approx 1/3 the cost of the house. 30 year mortgage at 9 1/2%. I remained single for the first 13 years living there so only 1 income that whole time. I was able to make the payments easily even at that interest rate. Second one was 1996, Again my yearly income was about 1/3 the cost of the house. I purchased it before selling house #1 so I didn't use any equity in that house purchasing the second one. I was married by then so 2 income household at that time. Wife's income was pretty close to mine also. Mortgage rate was 7 1/8 on a 15 year loan. Again the house was easily affordable. My point is until the last 20 years give or take a few, mortgage rates over 6% were the norm and people bought houses. People have gotten spoiled by the low rates of the last 20+ years but purchasing a house with rates between 6-10% used to be the norm. You just have to watch your discretionary spending and get your priorities in line and be fiscally disciplined.

I've bought 2 houses in my life. First one in 1978 I was 22 years old, single so only 1 income household. My yearly income was approx 1/3 the cost of the house. 30 year mortgage at 9 1/2%. I remained single for the first 13 years living there so only 1 income that whole time. I was able to make the payments easily even at that interest rate. Second one was 1996, Again my yearly income was about 1/3 the cost of the house. I purchased it before selling house #1 so I didn't use any equity in that house purchasing the second one. I was married by then so 2 income household at that time. Wife's income was pretty close to mine also. Mortgage rate was 7 1/8 on a 15 year loan. Again the house was easily affordable. My point is until the last 20 years give or take a few, mortgage rates over 6% were the norm and people bought houses. People have gotten spoiled by the low rates of the last 20+ years but purchasing a house with rates between 6-10% used to be the norm. You just have to watch your discretionary spending and get your priorities in line and be fiscally disciplined.

and it is not really even 20 years .. 6+ was very normal until 2008-2009 or so

I've bought 2 houses in my life. First one in 1978 I was 22 years old, single so only 1 income household. My yearly income was approx 1/3 the cost of the house. 30 year mortgage at 9 1/2%. I remained single for the first 13 years living there so only 1 income that whole time. I was able to make the payments easily even at that interest rate. Second one was 1996, Again my yearly income was about 1/3 the cost of the house. I purchased it before selling house #1 so I didn't use any equity in that house purchasing the second one. I was married by then so 2 income household at that time. Wife's income was pretty close to mine also. Mortgage rate was 7 1/8 on a 15 year loan. Again the house was easily affordable. My point is until the last 20 years give or take a few, mortgage rates over 6% were the norm and people bought houses. People have gotten spoiled by the low rates of the last 20+ years but purchasing a house with rates between 6-10% used to be the norm. You just have to watch your discretionary spending and get your priorities in line and be fiscally disciplined.

It’s not the interest rates really. We have been spoiled but with low interest rates come higher home prices. The house next to the one I’m buying actually sold for about 30 percent less than mine in 2019. That price I could easily pull off. This new price ? Not on my own. A lot of these homes have gained 40% in market value in just 3 years. In another 3? Some of these “OK” neighborhoods with 1700 sq ft could command nearly $500k.

[QUOTE=Ryan;1224366]It’s not the interest rates really. We have been spoiled but with low interest rates come higher home prices.

I don't think we're gonna see 10% but we might touch 8's this year if we continue to experience a hot labor market. I'm not so sure that it's a war on inflation so much now as it is a war on the unemployment rate and unwinding the labor market. Inflation has come down sharply as a whole and expect it continue to trend that way but the 2% arbitrary target we adopted in 2012 may not be realistic now. Powell has been clear, unemployment rate must go up. They're going to force layoffs to a certain level. This as much as anything should make people question things.

To your second point, there are still a lot of cash buyers in the market, more than most realize. If you sold out of state things are cheap here in most cases. Granted there is a lot less liquidity right now with the FED firing torpedos into the financial market every chance they get now. Eventually though things will swing back the other way, now is a good time for cash buyers to get serious because prices will continue to go up here until you get to some of the more restrictive higher points. We are experiencing a resurgence of multiple offers in the entry level - middle tier price points again due to inventory trending back lower.

I'm curious, what percentage are you seeing buy with cash? I've seen national figures around 30% but I would think OKC might be a slightly higher number.

I'm curious, what percentage are you seeing buy with cash? I've seen national figures around 30% but I would think OKC might be a slightly higher number.

I dislike investors absorbing all the available inventory but can’t say I wouldn’t do the exact same thing they are.

I'm curious, what percentage are you seeing buy with cash? I've seen national figures around 30% but I would think OKC might be a slightly higher number.

Last year about 25% of my deals were cash, 2021 was even higher more like 1/3. Less cash out there right now with the stock market being way down. Most of those deals weren't big corporate buyers, even the investment ones. More local mom & pop investors or folks who just have cash in general.

If the housing market wasn't cooling fast enough this should throw some more cold water on it.

https://www.cnbc.com/2023/03/07/fed-chair-powell-says-interest-rates-are-likely-to-be-higher-than-previously-anticipated.html

In my area, sales still tend to be quick and at full price which also translates to all-time highs per square foot, generally at $180/SF or slightly above for anything remodeled.

Spring is fast approaching and is always the time with the most listings and sales. I bet things stay solid here throughout the summer, then we'll see what happens as we head into the always slow winter months.

I think it really depends on where you are - I would bet areas like you are in Pete would stay very stable. But I do a lot of work with a bank and they are seeing significant new construction builder incentives, cost reductions etc in the suburban areas. I saw one Edmond builder yesterday who cut prices on about 20 new homes about 5% - homes in the $350-$475 range.

I think it really depends on where you are - I would bet areas like you are in Pete would stay very stable. But I do a lot of work with a bank and they are seeing significant new construction builder incentives, cost reductions etc. in the suburban areas. I saw one Edmond builder yesterday who cut prices on about 20 new homes about 5% - homes in the $350-$475 range.

It would be a scary time to be a spec home builder right now. So many of these builders ramped up the development side when demand was high and lot inventory was low over the last few years, but as demand has started to decline they're getting squeezed on both sides (interest rates rising / carrying cost increasing and cost of goods continuing to remain inflated). I would imagine you'll start to see more developments sold off to national builders and builders trying to layoff more homes at a discount to try and get out what they have in them.

In my area, sales still tend to be quick and at full price which also translates to all-time highs per square foot, generally at $180/SF or slightly above for anything remodeled.

Spring is fast approaching and is always the time with the most listings and sales. I bet things stay solid here throughout the summer, then we'll see what happens as we head into the always slow winter months.

And that is exactly why The Fed is going to raise rates higher and faster than they previously thought. If they don't get inflation under control soon (and might already be too late) they are going to lose control of it. Everyday they don't is going to be just that much more pain.

And that is exactly why The Fed is going to raise rates higher and faster than they previously thought. If they don't get inflation under control soon (and might already be too late) they are going to lose control of it. Everyday they don't is going to be just that much more pain.

Beautifully said. JPow may very well have to push prime well above 8% to counteract all of Robinette’s bigly spending.

While some areas might be steady in sales, nationally it is a different story.
Mortgage Applications for Purchases Dropped to 28-Year Low Last Week
https://www.investopedia.com/mortgage-applications-7153161

Beautifully said. JPow may very well have to push prime well above 8% to counteract all of Robinette’s bigly spending.

It isn't rocket science. To get inflation under control they have to get interest rates higher than the inflation rate and keep them there until they break the system.

Historically the current 6% mortgage rate is pretty good so we have a long ways to go. I'm expecting to top out about 17% Prime.

It isn't rocket science. To get inflation under control they have to get interest rates higher than the inflation rate and keep them there until they break the system.

Historically the current 6% mortgage rate is pretty good so we have a long ways to go. I'm expecting to top out about 17% Prime.

Larry Summers, who has been correct in most of his predictions regarding inflation (he sounded the alarm well before most others and was ridiculed by some for it), believes the Fed rate target could reach 6%, higher than today’s 4.5-4.75 range.

Larry Summers, who has been correct in most of his predictions regarding inflation (he sounded the alarm well before most others and was ridiculed by some for it), believes the Fed rate target could reach 6%, higher than today’s 4.5-4.75 range.

Well that would end the US dollar because that would outpace population growth. The Fed isn't going to do that.

Well that would end the US dollar because that would outpace population growth. The Fed isn't going to do that.

Huh?

How would going from 4.5-4.75 to 6.0 “end the US dollar”? As you have said, you expect a .50 increase at the next Fed meeting, which would take the target rate to 5.0-5.25. After that, if they gradually go up .25, they would only have to do that three times to reach 6.0 target rate.

Edit: to make sure we’re talking about the same thing because I may have not be clear in my writing, Summers is referring the Fed funds target rate, not the inflation target. The inflation target stays at 2%. He’s saying he believe it may take raising the Fed funds rate target to 6% to achieve 2% inflation.

Tanking the US economy over a global issue is bad policy from many different standpoints. It’s funny that workers getting raises and finally able to have the purchasing power to buy a home is a problem worth “breaking the system” as Kerry phrases. I am guessing the goal here is to return all of the power to businesses and banks and let the working class starve again for the next 25-40 years. This is the first cycle in decades where workers have had any sort of leverage and it has terrified the ruling class of investment firms and corporate shrills. Breaking the system is the answer?

All the things I purchase have stabilized in price for the most part. My house has come down in value a bit to a more reasonable amount. Nothing will get cheaper, but the rate of increase seems to be under control of most products and services I buy.

I think it really depends on where you are - I would bet areas like you are in Pete would stay very stable. But I do a lot of work with a bank and they are seeing significant new construction builder incentives, cost reductions etc in the suburban areas.

We are definitely starting to see the "OAK factor" come into play in my neighborhood, especially now the improvements are going vertical with 2 construction cranes; and all the news about Restoration Hardware and other tenants is well known.

Just had a house nearby listed at $182/SF (a new high) and it went under contract in a few days. It's been remodeled but nothing special.

I call my area "Belle Isle Light" because we are just south and have the same sort of mid-century home stock, although most of the homes are smaller. Belle Isle has gone nuts and is downright expensive these days. I've said for a long time that 1960s ranch homes that are well-located are really going to appreciate because many are easy to renovate into a modern floorplan with open kitchens connected to the main living area. Mine is one of them; only 1,800 SF but very spacious inside and the flows nicely into my big backyard.

The smaller homes along and just north of 50th are perfect for AirBnB conversions and there are already a bunch of them.

Huh?

How would going from 4.5-4.75 to 6.0 “end the US dollar”? As you have said, you expect a .50 increase at the next Fed meeting, which would take the target rate to 5.0-5.25. After that, if they gradually go up .25, they would only have to do that three times to reach 6.0 target rate.

Edit: to make sure we’re talking about the same thing because I may have not be clear in my writing, Summers is referring the Fed funds target rate, not the inflation target. The inflation target stays at 2%. He’s saying he believe it may take raising the Fed funds rate target to 6% to achieve 2% inflation.

Thanks for clearing that up. Yes, I thought you meant the Inflation target would be 6% up from 2%. As difficult as it is to believe some economist have actually suggested that a solution.

6% Fed Rate still isn't going to tame inflation. We need to get $8 trillion out of the economy to get back to 2% inflation. That is 1/3 of every dollar. Not going to do that with only a 6% rate. It will need to be closer to 20%.

I think it really depends on where you are - I would bet areas like you are in Pete would stay very stable. But I do a lot of work with a bank and they are seeing significant new construction builder incentives, cost reductions etc in the suburban areas. I saw one Edmond builder yesterday who cut prices on about 20 new homes about 5% - homes in the $350-$475 range.

You know times are changing when these same builders who wanted nothing to do with Realtors the past few years, are now suddenly calling brokerages and asking us to bring buyers and offering more commissions to us.

You know times are changing when these same builders who wanted nothing to do with Realtors the past few years, are now suddenly calling brokerages and asking us to bring buyers and offering more commissions to us.

Even Rausch Coleman is back to 3% :cheerlead:

Even Rausch Coleman is back to 3% :cheerlead:

My point exactly

Mortgage rates down sharply to wrap up the week, down about 40 basis points since 3/1 across the board. The SVB collapse may keep a lid on larger rate hikes for the time being. Will see what happens with any contagion & spillover effects in the market. There is so much volatility in the financial markets right now.

SVB deal is absolutely bizarre. They had more unrealized losses in their investment portfolio than tangible capital. Then selling the securities for a loss to deal with deposit loss and lack of liquidity did them in quickly.

SVB deal is absolutely bizarre. They had more unrealized losses in their investment portfolio than tangible capital. Then selling the securities for a loss to deal with deposit loss and lack of liquidity did them in quickly.

Is it an isolated incident, or is this about to expose a larger problem.. they can't be the only bank with massive bond & investment losses as a result of the FED tightening so hard. I've been of the opinion for awhile now that there would be some cracks exposed as a result.

Is it an isolated incident, or is this about to expose a larger problem.. they can't be the only bank with massive bond & investment losses as a result of the FED tightening so hard. I've been of the opinion for awhile now that there would be some cracks exposed as a result.

Not isolated.

Not isolated.
Appears to be a small and medium sized bank issue, but time will certainly tell.

Appears to be a small and medium sized bank issue, but time will certainly tell.

they are the 18th largest bank in the united states ... and have a massive role in tech

they are the 18th largest bank in the united states ... and have a massive role in tech

Heavily into cryptocurrency, which smarter people knew was a problem.

Just Google other banks having major troubles right now. First Republic is another large, large, large bank having major difficulties.

Any bank heavy in the tech industry is going to have a problem as the tech industry struggles with revenue drops. No different than Oklahoma banks heavily invested in oil and gas when the oil bust hit.

Mortgage rates continuing to drop with the market turmoil.. down about 70 basis points now since beginning of March to their lowest levels since early September. Market is strong already and this should give it another boost.

Mortgage rates continuing to drop with the market turmoil.. down about 70 basis points now since beginning of March to their lowest levels since early September. Market is strong already and this should give it another boost.

I’m a bit shocked the market is staying this strong in the face of J. Pow’s QT and rising rates.

Are there just a bunch of cash buyers or folks with huge down payments, so rates are less of a concern?

I’m a bit shocked the market is staying this strong in the face of J. Pow’s QT and rising rates.

Are there just a bunch of cash buyers or folks with huge down payments, so rates are less of a concern?

I think it's a number of factors. There's a lot of pent up demand still from last few years, a lot of people prefer current market conditions over the crazy aggressive bidding wars we had on everything for 2 years. The labor market is still strong, unemployment very low & most people are earning more than they ever have. We are still very cheap nationally compared to other major cities and people are still moving here as it's an attractive destination. OKC economy doing great as a whole, doesn't hurt oil & gas has had a little resurgence although certainly not a boom.

At the end of the day people always need to buy & sell for a variety of reasons and every market presents different situations for people. I am not seeing big out of state money recently with investors, not saying it's not happening but I certainly don't think to degree it was. I have local investors that I've worked with for years, mom & pop types, that are always doing things regardless of conditions. Plenty of people have cash here that buy rentals & investment properties here and there and are impervious to the rates. Should the market take a dip if things really do get bad there are plenty of people waiting/praying/wishing/believing that will happen and would jump & buy. Mortgage application & demand here staying very strong, I feel like we can handle 8-9% rates. It's still better to buy vs rent regardless of the rates if you don't already own.

Edit: One thing I didn't mention is the supply is still quite low, more homes selling than going active by a good bit every week right now. Higher rates hasn't only dampened demand it has also done the same to supply. That imbalance does not appear likely to correct anytime soon, so sellers are still getting premium prices and selling quick in most cases if they're priced right.

^

Great summary.

When it gets a bit more difficult to buy, you have rental property investors stepping up because of the increase in renters and rental rates in general.

Also, there are a ton of AirBnB investors in this market, as many have done well and now have more money to use for additional purchases.


Decent houses in my neighborhood continue to go under contract at full price in about a week. I'm sure the new home market has softened but I'm witnessing the opposite in established, well-located neighborhoods which bodes well for spring and summer.

I’m a bit shocked the market is staying this strong in the face of J. Pow’s QT and rising rates.

Are there just a bunch of cash buyers or folks with huge down payments, so rates are less of a concern?

This is proof the the Fed is not fighting inflation hard enough. The whole point of raising rates is to kill new home loans and weaken the labor market. These little .25 rate increases aren't going to do that and the Fed is just dragging out the evitable.

This is proof the the Fed is not fighting inflation hard enough. The whole point of raising rates is to kill new home loans and weaken the labor market. These little .25 rate increases aren't going to do that and the Fed is just dragging out the evitable.

Spoken like someone who already has a mortgage and isn't trying to buy a home. The elitism is reeking from you. Huge rate increases would kill the economy, and lead to large, large layoffs.

This is proof the the Fed is not fighting inflation hard enough. The whole point of raising rates is to kill new home loans and weaken the labor market. These little .25 rate increases aren't going to do that and the Fed is just dragging out the evitable.

that is not the reason at all ..

slowing inflation is why you raise rates period .. the by product of that MIGHT weaken the labor market .. but that is not the intent ..

and new home builds and loans have already been slowed ..

that is not the reason at all ..

slowing inflation is why you raise rates period .. the by product of that MIGHT weaken the labor market .. but that is not the intent ..

and new home builds and loans have already been slowed ..

https://www.barrons.com/articles/fed-labor-market-interest-rates-economy-recession-51671229886

I just realized you might have to pay to read that article, but there are a thousand more just like it using Google.

Anyhow, the Fed has explicitly said they want to weaken the labor market thru rate increases to help cool inflation. You can express your opinion all you want but I'm just telling you what The Fed has said.

This is proof the the Fed is not fighting inflation hard enough. The whole point of raising rates is to kill new home loans and weaken the labor market. These little .25 rate increases aren't going to do that and the Fed is just dragging out the evitable.

Unemployment numbers going up is an indicator that inflation may be coming down, not the main purpose. The simple desired result of raising the interest rates is to have inflation % lower than the interest rate %.

Explain how higher rates lowers inflation then. What is the mechanism that says a change in rates results in a change in inflation?

I'll just leave this here for anyone that wants to read it.

https://apnews.com/article/inflation-federal-reserve-system-business-4bbfab5f0c89ec0c1d870a3eef5e56c5

Inflation has already come down quite a bit from it's peak. Yes, it's still much too high but things are going to take time. We can't unravel 15 years of easy money overnight. The market & economy has also cooled quite a bit, we'll have a very low growth year and that's if things go well and we avoid a recession. I don't think intentionally jacking the rates to break the economy is the best solution, although it is a scenario. Keep in mind next year is a presidential election year as well... people may not be paying attention now but they will be.

I'll just leave this here for anyone that wants to read it.

https://apnews.com/article/inflation-federal-reserve-system-business-4bbfab5f0c89ec0c1d870a3eef5e56c5

Maybe this is why.

https://www.theguardian.com/us-news/2022/nov/05/multiple-jobs-census-data-inflation-us