Shocking new data released Wednesday shows inflation in June rose 9.1% from a year ago — that’s the highest 12-month increase in 40 years.
Fears of a recession are increasing due to the news. It’s also affecting the housing market, and the sky-high real estate prices are now finally coming back down to earth.
A few months back, open houses attracted crowds down the street.
“It was insanity. It was offers happening before the open houses even happened,”Elizabeth KluftBadway is a realtor.
But with skyrocketing inflation and an interest rate approaching 6%, that’s no longer the case. Nationwide, 60,000 deals collapsed before closing last month, because buyers couldn’t afford the new mortgage payments.
Mike Closky, a Sherman Oaks Realtor, recently hosted an open house. Nobody showed up. This was after Closky had knocked $300,000.000 off the asking cost of $1.3million.
The double whammy is being created by rising interest rates. Buyers are realizing they can’t pay as much mortgage these days, so sellers are forced to reduce their asking prices.
In all parts of the country, home prices have fallen.
Lindsay Katz, real estate agent, listed a Los Angeles house for $849,000 in anticipation of a bidding war. The price was reduced by $10,000. It may go lower.
“The real estate boom that was induced by the pandemic — which was the biggest boom I’ve personally ever seen and I’ve been doing this for 20 years — that’s over right now,”Diana Olick, CNBC’s correspondent, stated.