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The Psychology Of The Market Could Result In A Correction

A report from the Dallas Morning News in Texas. “North Texas home sales fell by 8 percent in November. It was the biggest year-over-year sales decline in more than seven years. Ted Wilson, principal with Dallas housing analyst Residential Strategies Inc. blames the shift in the Dallas-Fort Worth home market on rising interest rates.”

“The increase in finance costs since last year has added almost 15 percent to the month payments on a home. ‘We’ve seen interest rates climb quite a bit in the second half of the year, he said. ‘And that’s has put a lot of question in people’s minds about where the market is.'”

“Wilson doesn’t spot the makings of a home price crash in North Texas. ‘A lot of people are incorrectly assuming that the prices in this market are going to drop,’ he said. ‘We don’t see any big bubble bursting.'”

“Along with the slowdown in sales, the number of houses listed with real estate agents in the area has risen by almost a quarter this year from November 2017.”

“‘I am more concerned about the psychological impact of not-so-rosy housing news than I am about the actual underlying fundamentals of the housing market in the Dallas-Fort Worth market,’ said Daren Blomquist, top economist with Attom Data Solutions. ‘Certainly the data shows that the market has gotten somewhat overheated and is due for a slowdown, but that slowdown should just be a chance for the market to catch its breath rather than a trigger for a panic attack.'”

“‘Jobs and people are still moving to the Dallas-Fort Worth area in large numbers, which ultimately should keep demand for housing solid,’ Blomquist said. ‘But the psychology of the market is more of a wildcard and could result in a bigger slowdown or correction.'”

From KLUV on Texas. “When it comes to the North Texas housing market, my late father who used to dabble in real estate used to say, ‘what comes up, must come down.’ Three years ago, he predicted such would happen here, and it’s begun. “

“The Dallas Morning News reports a new report by Realtor.com reveals Dallas as one of the Top 10 cities hit hardest by the housing slowdown. Taking into consideration most North Texans do not receive a 10% pay raise each year, the 10% house price increases over the past 4 years, have come to an end. “

“Recently I looked at a 3 bed, 2 bath, 1800sq.ft. house in comfortable neighborhood and it’s price had been reduced from $275,000 to $250,000, in a period of 60 days. Just one sign of what could be ahead. North Texas house worth reality is beginning to show.”

This Post Has 23 Comments
  1. ‘A lot of people are incorrectly assuming that the prices in this market are going to drop’

    Prices in Dallas are sinking like a turd in a well Ted.

      1. So, prices are only plateauing in San Diego, that’s a good thing, it’s cheaper to buy than rent there, there are huge new tax breaks for property investors (I did not know this) and we should buy rental properties to build wealth? Where do I sign up?

      2. Whats this 10 loans for 10 investment properties? Easier to get a loan for investment property than primary residency?? WTH? How is this possible? Loose lending was only possible in the last housing bubble???

      3. The whole use of the word “slump” is so disingenuous. As if the only thing that is good for people and/or the economy is for prices to go to the moon and for the share of homes owned by investors and flippers to grow unchecked.

      4. “It’s not going down, it’s just a leveling out. You can’t get that 200k over asking price anymore. If you wanted to do that you should have sold 6 months ago”. Yeah ok Kathy, it’s not going down, those extended days in market and down arrows mean absolutely nothing right… keep selling your books and “investment” advice, tons of free money and Fannie May loans for everyone!

    1. sometimes you just cant believe the news (or your eyes).

      With Toyota (14K alone), LIberty Mutual, Chase moving thousands of workers into Plano/Frisco etc, you would think that there would be demand. Now i find out that the spec suburban division builders built even more (my unstantiated guess at 2x demand).

      Oh well – never trust my lying eyes

  2. Wondering if we are going to see more and more of this kind of “accident” as the housing market tanks…

    +++++

    Devastating fire rips through one of New York’s last Gilded Age mansions overlooking Central Park that’s on the market for $50MILLION and once was home to the storied Vanderbilt dynasty

    A fire broke out on the third floor of 854 Fifth Avenue on New York’s Upper East Side on Sunday evening

    More than 100 firefighters tackled the two-alarm fire until it was declared under control at around 10pm

    Three firefighters were injured in the fire at the Beaux Arts mansion, which is listed for sale for $50million

    https://www.dailymail.co.uk/news/article-6478851/Fire-rips-one-New-Yorks-Gilded-Age-mansions.html

  3. Dec 10, 2018, 12:49pm
    Why Bitcoin Crashed And Why It Will Crash Again
    David Petersson
    Contributor
    Crypto & Blockchain
    The bitcoin cash war split the currency into two and crashed the market.
    Photocredit: GettyGetty

    Bitcoin is the dominating crypto currency. The recent crash only managed to get its price back to where it was last December, which means it is still profitable compared to a few years ago. Yet the digital currency that started it all suffers from some serious flaws, from volatility to its core algorithms.

    https://www.forbes.com/sites/davidpetersson/2018/12/10/why-bitcoin-crashed-and-why-it-will-crash-again/#c2294ee48cad

  4. Quite possibly… It seems the incentives are there.

    That said, I always discount events like these when they involve true outliers. That former Vanderbilt mansion is a statistical anomaly and owned by the five successor states to Yugoslavia – there just aren’t any good “comps” for that.

    When when this starts happening to unsold homes in a new Toll Brother’s subdivision development outside of Plano, TX, keep an eye out for ‘copycat’ events, and as they say “follow the money”

  5. “The increase in finance costs since last year has added almost 15 percent to the month payments on a home.”

    This sounds like a buyer psychology problem for sure. Nothing to do with affordability and “how much a month?” buyers already just barely scraping by. Nope. Narratives.

    1. has added almost 15 percent

      The bright side of this is that thousands of people did not take the plunge into three decades of debt slavery at 9 x income prices.

      1. Wait, you were being serious?

        But people have been buying homes for the last decade at 9x income in many markets.

        Maybe this is really high quality anti-comedy, or you’re retarded.

    2. Nothing to do with affordability and “how much a month?”

      People with mortgages are so broke all the time.

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