Anyone see this differently, or feel confident which way we’re headed?
Anyone see this differently, or feel confident which way we’re headed?
While the drive towards lower interest rates has made that money come out of savings accounts and drive up all asset prices
Just moved into a bigger place with a pool for $100/m more than my last rent (Marin county).
We want to buy, but our monthly cost would literally double to own the house we are in now.
In any discussion about housing prices in the Bay Area it's important to distinguish between condos and houses. The markets are very different because lots of new condos are being built while the supply of houses is (mostly) fixed.
Not sure about rental data but it was already crazy expensive to rent in Marin in 2014. I’ve seen no noticeable increase while prices have more than doubled.
I think it’s worth pointing that out because they are more susceptible to interest rates moving because their debt is short term. We may see institutional investors start to divest their real estate holdings if interest rates rise and their margins get squeezed.
no need to be unrealistic - there’s plenty of cheap land (at least in the US) - there’s people that live in Alaska or North Dakota or upstate NY (or whatever inhospitable climate you can choose)
We don’t need more rules
That is traditionally how houses were priced — pre-mini depression that is.
People wrote whole articles and books trying to explain how this isn’t the case anymore, how you can lose money every month by subsiding your tenants and still come out ahead because housing prices always go up. It wasn’t even a question anymore and you were guaranteed to come out ahead because the fundamentals of the market had changed. Seriously, no way you could possibly lose money by investing in real estate.
I think we all know how that new economic theory turned out…
Consumers started spending less. Target has already announced that they are reducing prices. Compared to last year, there are a lot more items on clearance in the clothing stores. There are only 20 or so ships are waiting at the LA port.
Whirlpool has started laying off assembly line employees as demand softens.
New mortgage applications are down by 21%.
It's a self defeating cycle that needs to be reigned in. No matter how many fences people build around their homes, and how much security they hire. If the majority is forced into desperate living situations, they eventually revolt and redistribute wealth.
It is really government's responsibility to reign this in by lowering income taxes, taxing the rich and corporations properly, by reinforcing fair wages, and in many other ways, but even people in those positions of responsibility are asleep at the wheel of accountability, and also lining their own pockets.
Eventually, we as consumers need to stop contributing to these cycles of hysteria by not buying those overpriced homes, and working to develop the communities we're currently in. Individuals need to avoid greed impulse as landlords and stop dramatically raising rent and for companies to prevent artificial price inflation too (gouging), understanding that it will create a better eco system over time for us all.
Globalism of information and companies has led to harmful results in many ways, it has also driven us to a point where price controlling monopolies have far too much power, and too much overhead to keep costs down, and to keep world-wide distribution and value up for goods reliably.
There are literally thousands of overconfident investors now (many faking success and many that inherited their wealth) sitting on vacant properties, failing companies, and losing money on business ideas, yet posting about their extravagant lives and fake symbols of their business skill along with terrible investor advice on social media.
Along with Crypto, NFT, and investment scams that are regularly promoted by big industry, this drives the greed and ignorance that in turn affects current investment and ultimately business failure. We need to call this practice out, or face experiencing the market chaos and even deeper crashes that will indeed come.
There's a ton of middle ground between your two scenarios. 2008 was the biggest housing price crash in history.
I think we see a recession, modest asset price decline, and then stagnant home prices and stock market returns for 10 years.
This is the mythical soft landing that central bankers always seek and never achieve.
i don't see any reason to expect that the status quo can't continue and simply get worse. inequality between the homeowner class and the renter class will continue to grow. the wealthy will get to participate in the ownership market, and it'll be irrelevant for everybody else. as long as homes are treated as an investment commodity and investors can expect significant returns without having to rely on rental income, the rent market and the ownership market can be detatched from each other.
Stimulus payments, $9 trillion fed balance sheet, historically low interest rates. All in the process of stopping / reversing.
https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
One of those Silicon Valley house buying companies, forgot which one, took a $500 billion haircut a few months ago for their algorithm driving up prices above actual demand.
Haven’t heard anything since but I can guarantee they didn’t dump those houses at market prices, they said they were going to bundle them up and sell in bulk but don’t know how that’s working out for them.
Any more than in the past?
https://www.statista.com/statistics/183648/average-size-of-h...
Average people per residence has gone down over the last decade from 2.58 to 2.51 - so I'm not sure where you draw this conclusion.
That graph is primarily why I believe there's speculation mania and other things going on.
We probably will see 40 Year loan Mods from FHA by EOY, they've been getting guidelines around those ready for some time. But that is a stopgap for borrowers that are falling behind, not for buyers hoping to get into a home.
If I had to guess any can-kicks will be more gradual. 'First time homebuyer' grants would be a good candidate for tweaks on things like maximum income. I spent much of my 30s in a weird spot where I was just out of the range of eligibility for such programs, and it would have made a huge difference.
> still 20%
PSA: You don't -need- 20% down. I will say, if it's anything other than a starter home, you probably -should- have 20% down. But the biggest mistake I made in my 30s was worrying more about getting that 20% than just getting into the game. If I would have gotten in back in 2016, I would have been able to refi into a conventional anytime between 2019-2021 and come out ahead.
I mean by that token you should have just bought eth and now you could have had many houses paid off. Hindsight is 20/20.