WOW!!! My Home Value Declined 12% in 75 days. Is this is SIGN? Let's Review!

I refinanced by home in November 2022 using a HELOC. The value at the time was $416,000. I checked Zillow today and the value has declined to $365,000 (a 12% decline in 75 days). Recent sales are also substantiating this decline. What is happening with Arizona real estate (typical of many cities in USA):

1. Builder inventories are going up as houses are finished.

2. Mortgage applications are down some 40%.

3. Listings of homes are up.

4. General prices being offered are down some 12 to 15%.

5. Building permits are down.

6. Delinquencies are up.

7. General mortgage rates have increased (doubled) in one year.

CONCLUSION: the CRASH in our real estate markets has STARTED. The trend is now down and we could witness a major crash by mid year 2023. It takes time for sellers to change their listing prices and it takes time for values to decline. Buyers are now sensing that it's time to WAIT rather than buy.

Affordability is difficult for many as our mortgage rates have doubled in the past year. The average mortgage rate in my area is 6.25%. My personal mortgage rate is 2.25% which I negotiated some 2 years prior. My HELOC loan which I negotiated in November paid off all my debts and left me with cash for survival these next few years. I now have zero debt (accept for my home).

My sense is that the real estate CRASH has started for homes, office buildings, and multi-family buildings. Cap Rates are going up and VALUES are going DOWN. A trend is now in motion to the downside. It may take until mid summer (June/July) before most recognize these changes. Most citizens are still denying that a CRASH has started.

The real estate crash will affect the entire economy by mid year 2023. Look to June/July 2023 as a marker for our official media to recognize this event. So far most are in denial. I have been observing these markets for over 50 years. I find that what happens with real estate affects the entire economy. 

As of today, the stock markets are still trending upward. This may continue for a few weeks. Our FED can use their computer trading desks to manipulate stock prices to the upward (for now). This is happening as I write but it may not last long. The general economy is heading down and it is evident within the REAL ESTATE industry.

Think for yourself and watch the markets change in the coming weeks/months. I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com. 

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