OKC Real Estate Market

[fortpatches]

This fed waits too long to do everything. They are too tentative.

Powell has been Chair for 6.5 years now. He should be replaced in about 1.5 years.

[OKCRealtor]

With the very poor recent jobs report, it appears the Fed has waited too long to start bringing interest rates back down.

https://www.cnbc.com/2024/08/21/nonf...ment-says.html

Very strong evidence the labor market is much worse than what they’ve led us to believe. No surprise if you’re following the data & not just listening to gov speak but this confirms it.

We are going to get multiple reductions this year after all beginning next month.

[runOKC]

We are going to get multiple reductions this year after all beginning next month.

As someone that’s had a house on the market for over a month, this is welcomed news.

[OKCRealtor]

As someone that’s had a house on the market for over a month, this is welcomed news.

Yea great news for sure. The demand hasn’t come back yet even though rates have already had a big drop in anticipation but it’s coming. Hopefully once they confirm it next month. We’re likely to get another bad unemployment report between now & then though which may cause some jitters.

There’s too much fear & uncertainty right now.

[fortpatches]

https://www.cnbc.com/2024/08/21/nonf...ment-says.html

Very strong evidence the labor market is much worse than what they’ve led us to believe. No surprise if you’re following the data & not just listening to gov speak but this confirms it.

We are going to get multiple reductions this year after all beginning next month.

What data would that be specifically?

[OKCRealtor]

What data would that be specifically?

The job reports have been a trend getting revised down for awhile now- GDP as well gonna take a big fall on the revision like Q1. The way certain things are quantified & measured, like how they weigh housing for example lead to some really misreported & not accurate numbers. They can't see the obvious it would seem (see 2021!) just highly sophisticated technical data & models which is far backward looking. As I've really began to study some of this intently the last few years as well as managing all of my equity investments I've gained a much greater insight.

I'm not quoting any article or source just speaking generally to closely following and analyzing a lot of economic data, sources, reports, etc. The economy has been pretty propped up by massive federal spending & to some degree federal job creation as well. The private sector has not been rosy for awhile now and unemployment rate has rather quickly gone from 3.5 to 4.3% and those numbers are understated in all likelihood & gonna go up from here. Those are still low historically but they are higher than what we had from 17-20 when the pandemic hit and an object in motion tends to stay in motion.

They just lost 818k jobs in the last year so they've been overstating them by nearly 70k a month lol. Biggest downward revision since 09.

This is all just my opinion but reports like today's are saying what I've been telling people. I sell real estate but I live in the equities markets & closely follow the economy. I've been investing since I was in my early 20's and while I don't day trade I would say i'm nearly up on the markets as what some of those guys do just watching all of my own stuff & of course using any knowledge and insights to help clients day to day selling real estate.

[warreng88]

https://www.cnbc.com/2024/08/21/nonf...ment-says.html

Very strong evidence the labor market is much worse than what they’ve led us to believe. No surprise if you’re following the data & not just listening to gov speak but this confirms it.

We are going to get multiple reductions this year after all beginning next month.

There is a massive expectation that we will see a decrease in September, for sure and then I heard after the election. Are you hearing otherwise?

[OKCRealtor]

There is a massive expectation that we will see a decrease in September, for sure and then I heard after the election. Are you hearing otherwise?

Future markets have a 100% probability of a cut next month the only question is quarter point or half point.

Labor market has deteriorated more than they thought & I think it’s highly likely now we see at least 2 cuts this year. If the Fed is as far behind the curve as they were in 2021 they may have to overcorrect.

The next jobs report on 9/6 will probably determine size of the cut in September.

[BoulderSooner]

Future markets have a 100% probability of a cut next month the only question is quarter point or half point.

Labor market has deteriorated more than they thought & I think it’s highly likely now we see at least 2 cuts this year. If the Fed is as far behind the curve as they were in 2021 they may have to overcorrect.

The next jobs report on 9/6 will probably determine size of the cut in September.

with inflation still almost 3% i would we shocked if they cut a half point

[OKCRealtor]

with inflation still almost 3% i would we shocked if they cut a half point

As of now it’s 75% chance we get a quarter point.

Depending on the data between now & then though, like unemployment ticking up unexpectedly again, a half point is on the table. Fed President Harker said so today. Powell speaks tomorrow so we’ll know more.

Overall though they’ve been favoring the inflation side of the mandate more as opposed to the unemployment side but that is no longer the case.

[OKCRealtor]

Powell just confirmed the pivot, 100% chance of rate cuts next month. The market will finally be right after 2 years lol. He seemed concerned about the risks to the labor market at this point vs inflation. Hopefully they aren't as far behind the curve as '21. It will be interesting to see how much & how quick they have to ease to keep unemployment rate from spiking.

[gjl]

How much will a 1/4 pt drop in mortgage rates change someones monthly payments for a new buyer on a 250K house with say a 700-750 credit score which is probably average. I don't know if that is. Do you know what the average first time home buyer's average credit score and what is the average % a first time home buyer has to put down on a $250K house? Figure a 30 year mortgage. I guess I'm wondering if that will really make much difference in someone who won't buy now vs someone who will buy after a 1/4 pt drop.

[OKCRealtor]

How much will a 1/4 pt drop in mortgage rates change someones monthly payments for a new buyer on a 250K house with say a 700-750 credit score which is probably average. I don't know if that is. Do you know what the average first time home buyer's average credit score and what is the average % a first time home buyer has to put down on a $250K house? Figure a 30 year mortgage. I guess I'm wondering if that will really make much difference in someone who won't buy now vs someone who will buy after a 1/4 pt drop.

So mortgage rates mostly follow the bond market and 10-year treasury yield. Those are already down over 1% - 1.25% overall last few weeks on the speculation. A quarter point cut probably won't actually drop the rates any at all from here- it's already baked in. A half point cut would be more than expected and we'd likely see mortgage rates fall further.

Right now you would save about $200/mo on a $250k house with a 5% downpayment based on where the rates were a few weeks ago vs today.

[gjl]

Does the average first time home buyer have 12.5K to put down on a house?

[Urbanized]

I was speaking with a mortgage broker literally yesterday who told me that the anticipated rate reductions are already generally baked into mortgage rates. due to the cuts in recent weeks mentioned above. He suggested that they are unlikely to move again significantly, at least for a while, probably until the NEXT rate cut is on the horizon. He said mortgage rates are generally not lockstep with the Fed.

[OKCRealtor]

Does the average first time home buyer have 12.5K to put down on a house?

Some certainly do, some certainly don't. It's not that much money though. If I could save $10k in a year from 08-09 making $45k/year on single income it's not that hard. They can also get down payment assistance or a gift from family member to help. If Kamala wins she's proposing $25k for first time buyers.

I was speaking with a mortgage broker literally yesterday who told me that the anticipated rate reductions are already generally baked into mortgage rates. due to the cuts in recent weeks mentioned above. He suggested that they are unlikely to move again significantly, at least for a while, probably until the NEXT rate cut is on the horizon. He said mortgage rates are generally not lockstep with the Fed.

Precisely. I am telling people to really consider the opportunity of the present moment. Waiting for rates to come down more when they've already had a significant drop in a short time & not likely to reduce a whole lot more in the short term could be another valuable lesson on opportunity cost.

Think about how much fear & uncertainty was in the market in 2020.. almost everyone would go back and buy real estate then if they could. When buyers flood the market again next year & beyond as these rates gradually drift to a more neutral level what do you think prices will do in the meantime?

While we don't know for certain what the future will bring I do know that in times of great uncertainty & fear both in the real estate market & stock market it's where the money is really made if you're smart.

[Teo9969]

Home Equity products tend to run in line with the Fed and that's not an insignificant part of real estate borrowing. Certainly not as important, but there are definitely people out there who would be more inclined to borrow equity at lower rates for things they want to do.

Even if Fed rates don't drop much further, it's hard to imagine seeing them go back up after September for a good while. That should at least keep 10-year Treasury and therefore Mortgage rates relatively where they are right now. So people who can afford it may drag their feet on refinancing hoping for a better rate, but they'll come around eventually.

The real question is how much further does it need to come down for the sub 4%ers to start selling the homes they've been wanting to get our of?

[OKCRealtor]

Home Equity products tend to run in line with the Fed and that's not an insignificant part of real estate borrowing. Certainly not as important, but there are definitely people out there who would be more inclined to borrow equity at lower rates for things they want to do.

Even if Fed rates don't drop much further, it's hard to imagine seeing them go back up after September for a good while. That should at least keep 10-year Treasury and therefore Mortgage rates relatively where they are right now. So people who can afford it may drag their feet on refinancing hoping for a better rate, but they'll come around eventually.

The real question is how much further does it need to come down for the sub 4%ers to start selling the homes they've been wanting to get our of?

Everything I've read from analysts is they predict the "lock-in" effect to remain in place for several more years but it should gradually dimish and the rates go down. Eventually people have to move for variety of reasons but although it will still constrict supply for the years to come I do think more of those folks may sell than anticipated especially if prices start to take off again. Most have such a large equity position that they can overlook the 2x payment in some cases.

[Teo9969]

Everything I've read from analysts is they predict the "lock-in" effect to remain in place for several more years but it should gradually dimish and the rates go down. Eventually people have to move for variety of reasons but although it will still constrict supply for the years to come I do think more of those folks may sell than anticipated especially if prices start to take off again. Most have such a large equity position that they can overlook the 2x payment in some cases.

I'd think a lot will also depend on how many Boomers still need to retire and downsize. So much of the future depends on how this transfer of wealth from boomers really takes place.

[bison34]

I refinanced in November 2020 to a 20 year note with the same payment I had on my 30 year note, and got a sub-2% rate. I will likely never sell it, because that is insane. Hopefully rates go down to where if I want to move in the future, I can do so reasonably. I am hoping in 2 years to move to the north side of OKC.

But any rate drops will help immensely!

[CaptDave]

We had the unfortunate timing of building and moving in 2022-23. We went from a 2.75% mortgage to 7.65 and was glad to get that rate at the time. Thank God VA loans are easy to refi and rates are already 2% under last year. I'll even gladly pay some points for 5.625% now.

[OKCRealtor]

Inventory has exploded the last couple months. We have more homes listed in our MLS right now than we've had since August 2013! There are some deals to be had right now for sure.

[Canoe]

Inventory has exploded the last couple months. We have more homes listed in our MLS right now than we've had since August 2013! There are some deals to be had right now for sure.

A deal compared to what? 2021?

[OKCRealtor]

A deal compared to what? 2021?

It's a buyers market all a sudden, have seen some serious concessions & price reductions. More favorable conditions than prior to Covid. When we look back at this point in the near future it's going to look like a great time.

[warreng88]

It's a buyers market all a sudden, have seen some serious concessions & price reductions. More favorable conditions than prior to Covid. When we look back at this point in the near future it's going to look like a great time.

It seems like the prices are still high on houses. Even basic houses in the central core of the city are listing for $180-$200/sf. Is that just the new normal or do you think the market will start to correct itself?