Can we talk about that Reddit thread calling the housing crash in 2022?

I was scrolling through old saved posts last night and found this one from r/RealEstate back in February 2022. Some user called it perfectly, said the market was going to crash by end of year because adjustable rate mortgages were getting handed out like candy in Phoenix. Everyone laughed at them, got like 200 downvotes. Fast forward to December 2022, Phoenix prices dropped 12% in three months. I went back to that thread and the same guy was getting awards. Anyone else have a forgotten prediction they stumbled on that turned out dead right?

3 comments

3 Comments

emery1014d ago

Gotta push back a bit here, not because I think you're wrong about California but because that Phoenix call was actually way more specific than people give it credit for. The guy wasn't just yelling crash, he pointed to the exact ARM reset timeline and the fact that Valley lenders were doing 5/1 ARMs with no seasoning requirements, which is batshit insane when you look at the volume they were underwriting. I watched that same Phoenix market from afar and the price drops weren't a slow bleed, they were a straight line down from August to November because all those adjustable loans started hitting their first adjustment window with rates going up. As for California staying flat, sure parts of LA are creeping up but the Inland Empire and parts of the East Bay are still sitting below 2022 peaks, so that Twitter prediction was half right at best.

ramirez.vera14d ago

Wait, were people actually handing out adjustable rate mortgages in Phoenix that bad in 2022? I mean yeah prices dropped but that sounds more like a lucky guess than some big prediction, there's always people yelling crash in every housing thread. Last year I saw someone on Twitter say California prices would stay flat through 2024 and guess what, they've been creeping up again in parts of LA.

fionam1114d ago

lol yeah that's fair. Feels like every housing thread has some dude screaming crash for 5 years straight before they're finally right once.