House prices are at their highest in 30 years, reports the Wall Street Journal, NY Times, and the Real Estate Markets News. Interest rates are also high, although falling somewhat. The Housing market is too blame, and they have choices.
Real Estate agents are being asked to reduce their commissions from 5.5% to an al e carte aggregate where buyers are paying for individual services. That will help buyers with total costs, but not the total cost of the home when taken together with the mortgage total. The agents could ask for lower prices overall but instead opt for this changing of the payments, from the mortgage to the buyer. The buyer still pays the total price, just now it was removed from the mortgage.
Construction costs are at an all-time high, because raw material manufacturers are squeezing builders, claiming inflation, when the margins are enormous, around 18% increases over a high of around $300 per square foot of home. So instead of lowering prices, which can be done, builders are squeezing buyers, for smaller homes taking up less space. Narrower buildings, and smaller overall homes, for a premium price, when all that needs to happen is the outrageous profit is reduced to a reasonable profit.
The truth of housing is depressing, as the consumer is squeezed out while being told that low pending sales and higher overall prices must remain when the market regulates itself. It’s akin to the salesman charging you the highest price possible and telling you must pay it, because it just is, what it is.
Most renters know the impossibility of buying a home and most homeowners know the impossibility of moving up to larger, more modern homes.
The pricing is pricing the market right out of itself, and no one is calling out the market itself. The tendency is to find a way to keep the house prices high, while offering small alternative ways for consumers to keep paying, but not receive the home value they could have if the prices came down. We do this to ourselves because we don’t speak out.
https://www.bankrate.com/real-estate/is-the-housing-market-about-to-crash/
https://www.washingtonpost.com/business/2024/03/10/smaller-new-houses-afforable/
