As a real estate agent, beginning a working relationship with a buyer in 2021 was akin to a hazing. They began their home searches with Pinterest-inspired visions of beautifully curated midcentury living rooms, tastefully wallpapered nurseries, and serene home offices. The home buying fever had descended upon them, and it was my job to cut through the glittering fantasy and disabuse them of any notions of ease before armoring them for the battle ahead.
Seeing massive price drops in Nashville and motivated seller behavior. Working an upgrade client right now…we go under contract w sale of home contingency to purchase a high end east Nashville rehab. List my client’s home…three weeks no showings. Seller’s agent on the high end rehab calls and says seller is financially strapped (poor cash flow mgmt will lose the rehab to foreclosure end of year…must have a hard money loan). They offer to lower the agreed contract price to what is needed so my client can lower their home listing price. We went under contract today on the listing side. Never would have happened without the motivated seller. Great time to buy if you can stomach the rates. Make low offers if you’re a buyer in this market!
I suspect you’re right about median price declines, Kira. Of course, that’s going to be different in every market but, for what it’s worth, the median sales price in the greater Chattanooga, TN area dropped 8% from June to October. The 20-year average, taking into consideration declining values throughout the fall, is 2.6%. That tells us something. Great article! I was looking forward to it.
Models that look at Rate of Change in Homes Under Construction vs. Rate of Change in New Homes Being Sold show the largest increase in that ratio since the 1970s
GFC: 75/80% increase in rate of change
Now: 185% - more than double anything seen in the last 50 years
Sellers can also feel trapped, if they sell their home where are they going to move and how expensive is it going to be for them to buy a new place? I think the market is going to be very stagnant for a while, then I see short sales coming. Learn about short sales. It’s going to be a while but it’s the only way the market is going to start moving again. The government needs to come up with a debt relief program like they did during the last real estate meltdown in 2006 2008.  The Fed got us into this mess, but we’re going to have to muddle through it to come out better on the other end. 
Seeing massive price drops in Nashville and motivated seller behavior. Working an upgrade client right now…we go under contract w sale of home contingency to purchase a high end east Nashville rehab. List my client’s home…three weeks no showings. Seller’s agent on the high end rehab calls and says seller is financially strapped (poor cash flow mgmt will lose the rehab to foreclosure end of year…must have a hard money loan). They offer to lower the agreed contract price to what is needed so my client can lower their home listing price. We went under contract today on the listing side. Never would have happened without the motivated seller. Great time to buy if you can stomach the rates. Make low offers if you’re a buyer in this market!
They say each percentage point and interest rate causes a 10% reduction in value in on average without mitigating factors
I suspect you’re right about median price declines, Kira. Of course, that’s going to be different in every market but, for what it’s worth, the median sales price in the greater Chattanooga, TN area dropped 8% from June to October. The 20-year average, taking into consideration declining values throughout the fall, is 2.6%. That tells us something. Great article! I was looking forward to it.
Great article. Thank you.
Models that look at Rate of Change in Homes Under Construction vs. Rate of Change in New Homes Being Sold show the largest increase in that ratio since the 1970s
GFC: 75/80% increase in rate of change
Now: 185% - more than double anything seen in the last 50 years
Suggests a BUST in housing construction.
Sellers can also feel trapped, if they sell their home where are they going to move and how expensive is it going to be for them to buy a new place? I think the market is going to be very stagnant for a while, then I see short sales coming. Learn about short sales. It’s going to be a while but it’s the only way the market is going to start moving again. The government needs to come up with a debt relief program like they did during the last real estate meltdown in 2006 2008.  The Fed got us into this mess, but we’re going to have to muddle through it to come out better on the other end.