{"id":3719,"date":"2022-12-16T04:59:28","date_gmt":"2022-12-16T04:59:28","guid":{"rendered":"https:\/\/frankbuysphilly.com\/the-sellers-strike-has-begun-why-the-housing-market-is-going-dark\/"},"modified":"2022-12-16T04:59:28","modified_gmt":"2022-12-16T04:59:28","slug":"the-sellers-strike-has-begun-why-the-housing-market-is-going-dark","status":"publish","type":"post","link":"https:\/\/frankbuysphilly.com\/the-sellers-strike-has-begun-why-the-housing-market-is-going-dark\/","title":{"rendered":"The &#8220;Sellers Strike&#8221; Has Begun\u2014Why The Housing Market Is Going Dark"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<h2 class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/h2>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">Back\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.youtube.com\/watch?v=U3mmU0mRlL0&amp;t=\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in March<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0and again\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/this-housing-market-isnt-like-2008-but-you-should-still-be-concerned\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">in August<\/span><\/a><span data-preserver-spaces=\"true\">, I noted that \u201cWe are undoubtedly reaching the limits of affordability for Americans,\u201d which should \u201ccool the real estate market\u201d and likely \u201ccause a correction\u201d but without the unpleasantness of a crash.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">This, in my humble judgment, is still the case as the real estate market is\u2014unlike in 2008\u2014buoyed by\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/news.cuna.org\/articles\/116675-subprime-mortgages-and-the-financial-crisis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">much more qualified buyers<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0with\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.realtor.com\/research\/june-2022-data\/#:~:text=The%20June%20national%20median%20listing,to%20last%20year%2C%20on%20average.\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">substantially more equity<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0in their homes and long-term, low-interest, fixed debt versus the teaser rates of the early to mid-aughts. A chart of mortgage originations by credit score should drive that point home.<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146005 sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM.webp 902w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM-300x216.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM-768x552.webp 768w\" sizes=\"(max-width: 902px) 100vw, 902px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM.png 902w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM-300x216.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM-768x552.png 768w\" sizes=\"(max-width: 902px) 100vw, 902px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146005 sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\" alt=\"mortgage originations by credit score\" height=\"648\" width=\"902\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM.png 902w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM-300x216.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.01.38-PM-768x552.png 768w\" sizes=\"(max-width: 902px) 100vw, 902px\"\/><\/source><\/source><\/picture><figcaption class=\"wp-element-caption\"><em>Mortgage Originations By Credit Score (2003-2022) \u2013 <a href=\"https:\/\/finance.yahoo.com\/news\/3-charts-to-ease-fears-that-were-repeating-the-housing-bubble-morning-brief-100021048.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly9sLmZhY2Vib29rLmNvbS8&amp;guce_referrer_sig=AQAAACFu1DeX1KqSRaZ_8O9v9OuRxvMUDiy_Ak65O7N7xHCeN-56Q3GcyIV59EGct3WrI5SXBO4HvF3OF4MfItOoM-de9NMYiyb4JEGIWI0oC7sigxUit8pCXX_l_w6Y_5Y_FmOmSAeh9JoTsPOaAlrcWPL1UxybIIA8LqHQ3wpx_YNa\" target=\"_blank\" rel=\"noreferrer noopener\">Yahoo Finance<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">However, I was clearly wrong about one thing. I didn\u2019t believe there\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/inflation-is-not-going-away\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">was sufficient \u201cpolitical will\u201d<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0to really tackle inflation. That still may be true as the Fed could quickly abandon its current course. But given the litany of rate increases and the signals of more to come, it would appear that high-interest rates will be with us for quite some time.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Indeed, the 3% mortgage I got on my personal residence last year would be more than twice that now. As Dave Meyer put it, the Fed has made it clear that\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/the-fed-wants-a-housing-correction\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">they\u00a0<\/span><em><span data-preserver-spaces=\"true\">want<\/span><\/em><span data-preserver-spaces=\"true\">\u00a0a housing correction<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0to take place to reduce inflation and address near-historic levels of unaffordability.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">So, where does that leave us now?\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">A Housing Correction and the \u201cSellers Strike\u201d<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">This is what the number of new listings looks like in the Kansas City Metro Area, where I live:<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146006 sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM.webp 932w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM-300x210.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM-768x537.webp 768w\" sizes=\"(max-width: 932px) 100vw, 932px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM.png 932w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM-300x210.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM-768x537.png 768w\" sizes=\"(max-width: 932px) 100vw, 932px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146006 sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\" alt=\"Screen Shot 2022 12 15 at 2.20.26 PM\" height=\"652\" width=\"932\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM.png 932w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM-300x210.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.20.26-PM-768x537.png 768w\" sizes=\"(max-width: 932px) 100vw, 932px\"\/><\/source><\/source><\/picture><figcaption class=\"wp-element-caption\"><em>Number of New Listings in Kansas City (2020-2022) \u2013 <a class=\"editor-rtfLink\" href=\"https:\/\/kcrar.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Heartland MLS<\/span><\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">New listings in September 2022 were down almost 600 from 2021, a 12.9% decrease. They were down a full 15.5% from 2020.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Thus, despite the rate increases, inventory only crept up\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/kcrar.stats.showingtime.com\/docs\/lmu\/x\/JacksonMO?src=map\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">from 1.5 to 1.7 months<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0in September 2022. A balanced market is six months, so this is still considered a \u201cseller\u2019s market.\u201d (Although I would argue with this, given how odd the current market is.)<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It\u2019s important to look at year-over-year (YoY) comparisons here as new listings follow a cyclical pattern and always fall off during the winter. For instance, the year-over-year trend for new listings nationally fell 23.6% YoY in October.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, homes for sale are still up 5% from last October. This increase in inventory came in large part due to fewer sales and nearly 20% of buyers backing out of signed contracts. There are also some rather amusing headlines, such as \u201caverage sale-to-list-price ratio fell to 99% in September.\u201d It had been a shade over 103%, which is, well, not exactly typical.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Overall, this is what Bill McBride calls\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/calculatedrisk.substack.com\/p\/the-sellers-strike-and-housing-inventory\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">\u201cthe sellers strike.\u201d<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0There simply aren\u2019t very many good reasons for homeowners to try and sell their house right now. So, they don\u2019t. Therefore, we should expect this trend to accelerate and be with us for quite some time.\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Americans Are Staying Put<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Of late, Americans have been substantially less likely to move than they had in years past. As\u00a0<\/span><em><span data-preserver-spaces=\"true\">The Hill<\/span><\/em><span data-preserver-spaces=\"true\">\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/thehill.com\/homenews\/state-watch\/582904-americans-moving-less-than-ever-before\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">noted in 2021<\/span><\/a><span data-preserver-spaces=\"true\">:<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cNew data from the U.S. Census Bureau shows just 8.4 percent of Americans live in a different house than they lived in a year ago. That is the lowest rate of movement that the bureau has recorded at any time since 1948.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cThat share means that about 27.1 million people moved homes in the last year, also the lowest ever recorded.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Even before the pandemic,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2019\/11\/20\/us\/american-workers-moving-states-.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">record lows were being set<\/span><\/a><span data-preserver-spaces=\"true\">. The reasons for this are many, including an aging population, fewer children, and, of course, housing being so expensive.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In that same vein, the number of\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2021\/02\/26\/upshot\/where-have-all-the-houses-gone.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">new home listings was also falling<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0even before prices went through the roof and the recent interest rate hikes.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The average duration of homeownership went up to eight years, an increase of \u201cabout three years over the last decade,\u201d according to\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.thezebra.com\/resources\/home\/average-length-of-homeownership\/#average-length-of-homeownership-in-the-us\" target=\"_blank\" rel=\"noopener\"><em><span data-preserver-spaces=\"true\">The Zebra<\/span><\/em><\/a><span data-preserver-spaces=\"true\">. The change in the median length of stay is even more dramatic. It has almost tripled from about five years in 1985 to 13.2 years in 2021<\/span>.<\/p>\n<p><span data-preserver-spaces=\"true\">If you think about it, it makes sense. Why move, particularly now?<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Most homeowners (approximately 95%) have 30-year, fixed-rate mortgages. Anyone who took out a loan in the last five years has a rate below at least 4%. Why would you ever voluntarily pay off such a loan?<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">And as we have seen, fewer and fewer people are.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Interestingly enough, the same thing is happening in the rental market.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Tenants are renewing their leases at a record level. In April of 2022, over 65% of tenants renewed their lease versus just over 56% in 2019,\u00a0according to RealPage.\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture decoding=\"async\" class=\"wp-image-146007 sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM.webp 1230w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-300x157.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-1024x536.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-768x402.webp 768w\" sizes=\"(max-width: 1230px) 100vw, 1230px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM.png 1230w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-300x157.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-1024x536.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-768x402.png 768w\" sizes=\"(max-width: 1230px) 100vw, 1230px\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM.png\" decoding=\"async\" loading=\"lazy\" class=\"wp-image-146007 sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\" alt=\"rental renewals\" height=\"644\" width=\"1230\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM.png 1230w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-300x157.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-1024x536.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/Screen-Shot-2022-12-15-at-2.33.20-PM-768x402.png 768w\" sizes=\"(max-width: 1230px) 100vw, 1230px\"\/><\/source><\/source><\/picture><figcaption class=\"wp-element-caption\"><em>U.S. Rental Renewal Conversion and Renewal Trade Out (2019-2022) \u2013 <a href=\"https:\/\/www.realpage.com\/asset-optimization\/market-analytics\/\" target=\"_blank\" rel=\"noreferrer noopener\">RealPage Market Analytics<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">This also makes sense if you understand that the giant rent increases you hear about are just for new listings. For example, back in April, when the year-over-year rent increase for new listings was 16.9%,\u00a0<\/span><em><span data-preserver-spaces=\"true\">NPR<\/span><\/em><span data-preserver-spaces=\"true\">\u00a0found that the average tenant\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.npr.org\/2022\/06\/09\/1103919413\/rents-across-u-s-rise-above-2-000-a-month-for-the-first-time-ever\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">was only paying 4.8% more<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0than the year before.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The reason is that very few landlords are willing to raise rent all the way to market on current tenants. Increasing the rent much more than 5% often inspires a tenant to leave just out of spite. So, if rent is (or at least was) going up 16.9% elsewhere but only 4.8% where you are, you\u2019re likely to stay put.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">So, is the United States\u2014birthed in a fight against monarchy and entrenched aristocracy\u2014regressing to a realm of feudal serfs bound to the land they currently inhabit?<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Well, for the time being, sort of.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Opportunities In This Very Odd Market<\/span><\/h2>\n<h3>The Homeowner That Rents<\/h3>\n<p><span data-preserver-spaces=\"true\">The \u201csellers strike\u201d has and will continue to buoy the housing market as long as interest rates are high (at least by post-2008 crash standards). At the same time, it is likely cooling the rental market, and I suspect many homeowners who need to relocate are choosing to rent out their homes instead of selling them, and thus the volume of rentals is increasing.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Asking rents are starting to moderate. From a high year-over-year increase of 18% in April, they are now down to just\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-november-2022\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">7.4% in November<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0and only 1.2% higher than in October.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Even still, rents are quite a bit higher than they were even a few years ago, so continuing to hold rentals as a landlord should do fine in the near term.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Furthermore, for any homeowner out there who needs to move for a job relocation or whatnot, the best play is likely to rent your current home and then find a rental where you are moving to. After all, the softening rental market will help you in finding a rental equally as much as it hurts you in renting out your current residence.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">And again, why pay off your 2.65% loan on your current home to get a 6.95% loan on a new one? That is not a particularly lucrative form of arbitrage right there.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">I suspect the \u201chomeowner who rents\u201d will become much more common in the next year or so. And while such ideas may come naturally to the readership of BiggerPockets, they likely won\u2019t naturally occur to the \u201cnormal\u201d homeowner despite it being in their best financial interest. So please make sure to enlighten others about their options in this high (by recent standards) interest rate environment.<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Subject To<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">The next major opportunity is a bit more rife with uncertainty, and this is the infamous\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/2016-07-03-subject-to-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">\u201csubject to\u201d<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0strategy.\u00a0\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">\u201cSubject to\u201d just means that the purchase is \u201csubject to the existing financing.\u201d Effectively, the buyer assumes an unassumable loan.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Or in other words, the buyer takes the deed to the property and makes the loan payments, but the loan stays in the seller\u2019s name.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The advantages to the buyer, in this case, are obvious. If you can \u201cassume\u201d a loan at 2.85% on a property, how much does the purchase price even matter?\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">There are several problems, though. First of all, you need to seriously build rapport with the seller in order for them to trust you to pay their mortgage on a house they no longer own. After all, if you don\u2019t make the payments, it\u2019s the seller\u2019s credit that will take the hit.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Secondly, virtually every mortgage and deed of trust has a\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.investopedia.com\/terms\/d\/due_on_sale_clause.asp\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">\u201cdue on sales\u201d<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0clause. This allows a bank to call the loan due the moment the property transfers ownership. In the past, banks have very rarely done so. It might be different this time around, though. Would a bank keep a 3% mortgage on its books when the going rate is over 6%?\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">All we can really say is that we don\u2019t know for sure. If you do employ this strategy, you should have a plan B to refinance or sell the property if the bank does elect to call the loan due.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Lastly, holding a mortgage without the corresponding property will seriously affect a seller\u2019s debt-to-income ratio and make it very difficult to buy a new property. At the same time, as a subject to buyer, I would never want to pay off any mortgage made between 2018 and the middle of 2022. Thus, there could be a long-term conflict and even an ethical issue that wasn\u2019t present so much when subject to\u2019s first became popular in the early 2010s.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Even though you may not have a fiduciary duty to the seller, you should be very clear about what the ramifications could be with the seller upfront. I would recommend even coming to an agreement or something to that effect about how long you will keep that mortgage in place before refinancing or selling.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Conclusion<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">As long as rates stay high, the \u201csellers strike\u201d should continue. Expect very low rates of new listings for the foreseeable future. The real estate market will soften and decline a bit, but without a strong incentive to sell, the sellers strike, amongst other factors, should keep it afloat.\u00a0<\/span><\/p>\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block    has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find an Agent in Minutes<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\"><strong>Match with an investor-friendly real estate agent who can help you find, analyze, and close your next deal.<\/strong><\/p>\n<ul class=\"has-slate-800-color has-text-color\" style=\"font-size:16px\">\n<li>Streamline your search.<\/li>\n<li>Tap into a trusted network.<\/li>\n<li>Leverage market and strategy expertise. <\/li>\n<\/ul>\n<p><\/main>\n<\/div>\n<div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n<picture decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.webp\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\" decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md sp-no-webp\" title=\"The \" sellers=\"\" strike=\"\" has=\"\" begun=\"\" the=\"\" housing=\"\" market=\"\" is=\"\" going=\"\" dark=\"\" alt=\"find an investment-friendly real estate agent\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\"\/><\/source><\/source><\/picture>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/the-sellers-strike-has-begun-why-the-housing-market-is-going-dark\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article Back\u00a0in March\u00a0and again\u00a0in August, I noted that \u201cWe are undoubtedly reaching the limits of affordability for Americans,\u201d which should \u201ccool the real estate market\u201d and likely \u201ccause a correction\u201d but without the unpleasantness of a crash.\u00a0 This, in my humble judgment, is still the case as the real estate market is\u2014unlike in [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3720,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,1],"tags":[],"_links":{"self":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/3719"}],"collection":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/comments?post=3719"}],"version-history":[{"count":0,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/3719\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media\/3720"}],"wp:attachment":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media?parent=3719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/categories?post=3719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/tags?post=3719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}