Must watch CNBC video interview of Zillow CEO Spencer Rascoff. I very much respect the fact that Zillow is reporting on all aspects of the housing ‘recovery’. Its critical that brokers, agents prepare for what will happen next for housing. At some point (very soon) the punch bowl will be pulled back and we will have to deal with the staggering challenges that still face housing.
“44 percent of Americans with a mortgage are effectively in a negative equity position…Meaning if they sold their home, they wouldn’t be able to clear their mortgage. They’re basically trapped in their home and can’t list.”
“So very little supply and significant demand. That’s driving price spikes,” he said. “You’ve seen six months of greater-than-5-percent appreciation rates. It’s the longest streak of greater-than-5-percent appreciation rates since the [housing] bubble.”
“We’re now seeing unsustainably high rates of appreciation,” Rascoff said. “In Phoenix, in San Francisco, in Orange County and San Jose, [Calif.], 20-plus percent year-over-year appreciation. Far too high. We’ve come back too fast. It’s concerning.”
“If you have any equity in your home and you’re thinking about selling in the next couple of years,” he continued, “[it’s] probably best to sell now, even though home values are continuing to rise.”
“Imagine yourself buying a $300,000 home today, and in four years you may want to trade up to a $500,000 home,” he said. “That home is not just that much more expensive—but because mortgage rates are going to be higher—it’s significantly more expensive. So the trade-up market is going to be very troubled in a couple of years.”
“This is not today’s problem,” Rascoff added, saying today’s real estate market problem is a “big supply-demand imbalance: huge demand driven by low mortgage rates and investor purchasing [of] distressed properties. But very limited supply.”
Urgent Help Wanted: New report exposes the cold hard fact that 44% of all homeowners are STILL underwater. New REO Surge expected soon. Exclusive FREE REO/ BPO TRAINING for agents who are ready to learn how to list bank owned homes. Watch FREE Training Video now and Download FREE Training Guide. NOTE: First 700 Agents only.