Real Estate Market

[RLD4ISU]

Any thoughts with the real estate market in 2025 and 2026?

I've read anything from it'll be pretty much like it has been the last year to be ready for values/prices to decrease, etc. Some of those that I talk to in the real estate world are very uncertain and skeptical. A few think we're looking at something similar to 2008.

 

[twojman]

Anyone that says they know is crazy. Too much chaos right now and consumer confidence is sinking. No idea what to make of this at all.

 

[ClonesFTW]

A few think we're looking at something similar to 2008.

There are not many similarities to 2008.

- Underwriting has been significantly more difficult from 2014 and beyond, loan applications are much stronger.
- Property values in the Midwest remain high due to shortage in sales volume. Values being stable means homeowners can refinance and/or sell without major issues. *Different for specific regions like Florida*
- Interest rates are bouncing off of 2024 highs, positive movement for buyers now with rates getting below 6% again. Data shows groups of buyers wait for specific rate thresholds such as 6%, 5.5%, etc. for entering back into the market - application volume per CoreLogic data shows this is already picking up.

Here in the Midwest no one is really predicting valuation loss at this point, more stabilization which is desperately needed. Rates will likely stabilize between 5.5%-6.0% at some point which would reflect a healthy market for the most part.

 

[RonBurgundy]

I know in OP, KS everyone is pissed that our property tax valuations went up about 20% in one year. Doesn't seem logical in a high interest rate period.

 

[Sparkplug]

Recently sold a brick ranch that was built in 1959. Got the listed price and sold in a week. The price was hurt by an alley shared with an apartment building. Very well cared for and had a large lot An open house was visited by 12 groups.

 

[KnappShack]

Any thoughts with the real estate market in 2025 and 2026?

I've read anything from it'll be pretty much like it has been the last year to be ready for values/prices to decrease, etc. Some of those that I talk to in the real estate world are very uncertain and skeptical. A few think we're looking at something similar to 2008.

I'd love to know how those doomsday 2008 folks are getting there.

2008 was the product of 2004-2008. We aren't close to that lending environment.

Loans will perform as long as the job market doesn't completely fall apart. Supply should improve if the rate lock impact finally wears off.

But 2008? No ******* one should want to see that again

 

[trevn]

As others have said, there's a lot of uncertainty right now, but thinking we're heading back to the 2008 crisis is completely over dramatic.

 

[Cyclonepride]

I know in OP, KS everyone is pissed that our property tax valuations went up about 20% in one year. Doesn't seem logical in a high interest rate period.

My old house that I rent to my dad just had the land value go up by 50% (Indianola). Must be oil under that lot or something.

 

[Peter]

Values are inflated right now because of high demand and low inventory. If demand drops or inventory catches up it should level out. 2008 was a result of over-access to financing which is not the case today.

 

[Sigmapolis]

Anytime past crises come up and how it isn't going to go down exactly the same way as last time, this exchange from Jurassic Park: The Lost World always comes to mind...

Hammond: *confidently* "Don't worry. I'm not making the same mistakes again."

Malcolm: *rubs his eyes in frustration* "No, you're making all new ones."

 

[Gonzo]

My old house that I rent to my dad just had the land value go up by 50% (Indianola). Must be oil under that lot or something.

Yikes.

 

[isucy86]

Feel like we have an entirely different housing situation than 2008. The situation then was a financial issue, today it's a bricks & mortar issue.

The biggest risk to the housing market today is home valuations vs. household income. And secondary changes in market demand- do younger buyers still want 2500 sq ft plus, plus homes for a 4 person family?

IMO builders and developers have gotten spoiled by profit margins related to square footage escalation over the last couple decades.

 

[alarson]

I know in OP, KS everyone is pissed that our property tax valuations went up about 20% in one year. Doesn't seem logical in a high interest rate period.

Eh, given the market I can see it happening. Assessed valuations just reflect local sales, and prices have stayed up up up.

People pay way too much attention to property tax valuations though.

At the end of the day, the valuation just determines your share of the overall revenue your taxing district needs to raise to pay its bills. If your valuation went up 20% but so did everyone else's, your actual bill likely won't change much (even moreso if your district is growing to spread those expenses around a bit).

 

[JP4CY]

Feel like we have an entirely different housing situation than 2008. The situation then was a financial issue, today it's a bricks & mortar issue.

The biggest risk to the housing market today is home valuations vs. household income. And secondary changes in market demand- do younger buyers still want 2500 sq ft plus, plus homes for a 4 person family?

IMO builders and developers have gotten spoiled by profit margins related to square footage escalation over the last couple decades.

I really don't know what younger buyers want but if I had to guess its maybe finishes. We paid off our house about 2 years ago and every now and then we'll scope out a house or two and it seems like people now want good faucets, soft closing cabinets, nice doorknobs.

 

[Gunnerclone]

Values are inflated right now because of high demand and low inventory. If demand drops or inventory catches up it should level out. 2008 was a result of over-access to financing which is not the case today.

I don’t think anyone thinks the next potential housing crash will be for the same reasons as 2008. The question is if the results are the same.

 

[alarson]

I don’t think anyone thinks the next potential housing crash will be for the same reasons as 2008. The question is if the results are the same.

I have a hard time seeing a crash in values as long as there's such a shortfall of inventory. We're millions of units behind

 

[Gunnerclone]

I have a hard time seeing a crash in values as long as there's such a shortfall of inventory. We're millions of units behind

I guess that takes me to layoffs/job cuts in a recession. We just don’t know. There won’t be as many buyers and there will be more people that have to sell or get foreclosed on. Then we get the sinking prices again.

 

[Tailg8er]

I know in OP, KS everyone is pissed that our property tax valuations went up about 20% in one year. Doesn't seem logical in a high interest rate period.

My old house that I rent to my dad just had the land value go up by 50% (Indianola). Must be oil under that lot or something.

Could you sell today for equal to or higher than the new county valuations? In MANY of these large increases the past few years, the actual market value is oftentimes still higher. Kind of hard to have much of an argument against the increase if that's the case, as it likely means you've just been getting a discount for several years.

If they soared over market prices, you should absolutely appeal those!

 

[KnappShack]

Could you sell today for equal to or higher than the new county valuations? In MANY of these large increases the past few years, the actual market value is oftentimes still higher. Kind of hard to have much of an argument against the increase if that's the case, as it likely means you've just been getting a discount for several years.

If they soared over market prices, you should absolutely appeal those!

I know in my county they don't give a rip about interest rates.

Just their cut

Time to ban the property tax! We never truly own our homes

 

[2forISU]

Depends what market you are in.....


Across the Midwest is pretty strong and don't see much changing.

They are talking about possibly two rate cuts in 2025 which only helps the housing market.