Housing Market Goes Crazy, Everyone Sees It Can't Last, and then the First Dip Appears

[marmar]

Housing Market Goes Crazy, Everyone Sees It Can’t Last, and then the First Dip Appears
by Wolf Richter • Dec 22, 2020 •

There is already a sudden and historic housing glut in San Francisco.
By Wolf Richter for WOLF STREET.


That the housing market has gone crazy in many parts of the country – a phenomenon of the Pandemic stimulus extend-and-pretend forbearance free-money foreclosure-ban economy while households reported a loss of 9.0 million jobs in November, from February – and that this crazy housing market couldn’t last has become apparent to everyone months ago. In October, Redfin CEO Glenn Kelman said just that. It wasn’t “sustainable,” and “there’s no way it can last forever,” he said. So today we got another dose of crazy housing numbers, with the first dip since all this started in the spring.

The National Association of Realtors reported today that sales of existing homes – single-family houses, condos, and co-ops – dipped 2.5% in November from October to a seasonally adjusted annual rate (SAAR) of sales of 6.69 million. But given the explosion of sales in the prior months, sales were still up 25.8% from November last year (data via YCharts):



....(snip)....

“Amazing” is the word. Echoing Redfin’s Kelman words that it “can’t last forever,” the NAR report said it will carry “well into the new year.” So five months? And then what? Those are rhetorical questions.

At the same time, many homeowners are struggling with their mortgages: 2.7 million mortgages are currently in forbearance, according to the Mortgage Bankers Association, and the delinquency rates of FHA-insured mortgages, which support the lower end of the market spiked to a record of over 17%, including mortgages that were delinquent before they entered into forbearance.

A lot of unsold inventory always gets pulled off the market before the holidays, to be put back on the market in the spring, which makes the “days on the market” look a lot better. Sharp seasonal declines in inventory are the rule this time of the year, but this November was nevertheless special. ...........(more)

https://wolfstreet.com/2020/12/22/housing-market-goes-crazy-everyone-sees-it-can-last-and-then-the-first-dip-appears/

[empedocles]

1. Still more, 'Extraordinary Popular Delusions and the Madness of Crowds'

There was still another follow up book on the subject published in 2008 on the subject. Must be another one in the works somewhere.