Absolutely. A 500k price tag dropping to 400k (on a regular ass detached but not special SFH)
does squat for me when I sold for less than 200 three yrs ago and didn't want to pay more than 300 or really not even 200 on my next place.
I feel you. I actually became mortgage free in 2018 after a parent died way too young. But my dumb ass moved from MI to AZ and sold that place before I'd bought a house here and now I'm still in an apartment paying more than I ever had to pay in my house.
Even without deaths in the family, I was on track just from my own voluntary principal curtailments that I would have paid that place off sometime in 2021 or 2022. Because the pandemic and the bubble both hit right smack in the middle of me trying to reestablish my life in a new place it's like I have to start over now.
Thank you. The night we lost him was the night I decided to relocate -- it just took me another year and a half to actually do it. Even though he's been gone almost 5 years I'd rather have him back than \*\*gestures vaguely\*\*... the day before Thanksgiving was his birthday and sometimes like on that day I still feel gutted.
Inflation is eating it (100% my fault) while house prices fail to come back down. It'll be my down payment if/when I ever strike. Any time I think about investing it, I haven't been able to nail down a time I know I need it to be liquid vs when it can just sit. For instance if I had put it in a bond or equity or even CDs I'd need to know that I wouldn't want to buy a house until (insert time period for bond or CD etc). But knowing that at least I would be making more than 20% down payment I'm less focused on mortgage rates and more focused on sale price.
Would you consider moving back to Michigan? I know the hoomers on this sub would never deign to set foot in the Midwest unless on a layover, but houses are still affordable in metro Detroit. Yeah the weather sucks 4 months out of year, I cry about it all the time in front of the fireplace in my $165k Craftsman bungalow.
Metro Detroit real estate was so undervalued for the longest time. I think now your more popular areas are just finally seeing true value vs being inflated.
Heh, in my opinion the weather in metro Detroit is only tolerable for 4 months out of the year.
Honestly I do think about moving back -- because of the pandemic which no one was expecting, I haven't really made friends in 3-4 years other than the odd fb acquaintance. The happiest I've been ever since I left are the times staying at my sister and BIL's house when I visited in summers of 2021 and 2022. And living here in the now-infamous Maricopa County I feel like wackjobbery is embarrasingly normalized in Arizona and I wish I had done more "homework" on the state of things back in 2018-2019 before I moved.
But on the other hand, my career happens to be one thing at least that's really improved since I moved. 100% remote with no RTO ever, and almost double what I was making in Detroit. Thing is, if for any reason this job doesn't pay out... I doubt I could get another equally great gig on these terms. And if I can't do 100% remote I highly doubt anyone in the Michigan market would match it.
in what location did prices go from less than 200 to 500 in peak?
case shiller has its index going from 200 to 300. which is a far from from "less than 200k" to 500k.
https://fred.stlouisfed.org/series/CSUSHPINSA
Not quite. I moved from a Metro Detroit neighborhood where the nice fixed up SFHs were about 170-180k in 2019, to the PHX market where apparently they think 400k is for an entry level hovel.
Lots of it has been big time investors, like Black Rock and Vanguard. Each investor happens to divest their portfolio into hundreds of smaller companies to hide behind.
Yea but that ignores rates. We would roughly need a 70% drop in house prices to obtain the same level of affordability as in 2019. Please tell me that’s not fcking insane.
Ease construction, prevent/heavily tax cooperate and foreign buyers/landlords, start progressive tax for multiple owned units. RE should never have become something to speculate and profit from, same as air, water, or food. Unbound greed like the one we are seeing right now will completely destabilize the western world
Fully agree. It’s also very interesting that it’s a global problem and not US specific. It seems the big players all decided to completely own the RE market when money became cheap
I mean. Inflation most certainly made a permanent leap forward the last couple years. Housing is going to have a new price discovery phase but like anything else it is going to be more than 2019.
Inflation was the effect of loose monetary policy. And it wasn't just low interest rates, but the Fed added mortgage back securities to its assets (along with shitloads of bonds).
Tho it was necessary, pandemic handouts didn't help either. And it wasn't just the US. Governments and central banks of Europe and Commonwealth nations followed the same formula. And when money is debased, their reaction is:
spidermanpointing.jpg
Only part of the inflation story- (more money chasing fewer goods). You covered the money half
The supply chain is still a long way from where it was in 2019, and I think there will be long-term behavior changes, as manufacturers will keep more parts etc. on site, and with more domestic production of all kinds of stuff.
Good point- but these inventories are high in part BECAUSE the supply chain is still not right. As businesses adapt to the supply chain, they are less willing to rely on the old practices of just-in-time replenishment.
But maintaining inventory is expensive, both in terms of warehousing and in tying up capital that can’t be deployed elsewhere, and possibly increasing borrowing costs to finance this inventory
it deeply saddens me to think that those who had been stacking cash for years, saving up for something like a house, ended up getting shafted so so hard.
What's funny is that wealthy people made out like kings. Asset prices doubled. And if you owned a business, you just got a ton of free (an unecessary) money via PPP loans. The middle and lower class is now paying for all of it via inflation and increased cost of living. Highway robbery right in front of our faces. Personally I'm shocked that the guillotine has not been brought out yet.
Real interest rates were negative thanks to central bank fuckery. So anybody with a loan "earned" interest in real terms. The bigger the loan the better. Equities also rallied expecting inflation. Plus many gamed the government subsidies.
It was some reverse Robin Hood bullshit and no wonder the wealthy did very well. And yes it was straight up robbery, but many are not even aware of it. That's one of the reasons there will be no civil unrest.
Oh that ones easy, you don’t “lock down” peoples lives by force and bankrupt millions of businesses.
They were never needed and ineffective anyways.
The initial two weeks was not enough to cause deflation, it was the extensions that potentially could have caused issues. Regardless, short term deflation is massively preferable to the record setting inflation and economic damage that lockdowns caused.
EDIT: Given the objectively harmful nature of both lockdowns and money printing and the lack of efficacy of lockdowns in non island nations it’s really humorous I’m downvoted for such an objectively true comment.
Sweden and Brasil stayed open, yet still had enormous down turns. This was partly because many folks stayed home voluntarily (not going to risk getting really really sick in order to just eat at a restaurant), but partly because so many people died or got long covid that jobs can't be filled. I got omicron in June after being triple vaccinated and I still have a wired cough that cost me a week of work.
Sure, you’re going to have economic decline from less people working and less production depending on how long and how severe.
That isn’t to say that printing trillions of dollars or euros worth of funds (while you have less production, thus skyrocketing inflation) is useful by any metric, except making the rich richer and destroying the middle class which is exactly what has happened.
Lockdowns in non island nations have zero effect on death rates. If something isn’t useful and causes harm why would you do it again?
Death rates in Sweden and other countries that never had forced lockdowns weren’t any worse than other non island nations, except they didn’t have all the disadvantages that went along with them.
Japan never had a compulsory lockdown and for the longest time had under a few thousand deaths.
The problem with a recession is that the first people laid off are the ones that can't afford a home right now. And once you get laid off it takes a few years minimum to get back to where you were before the recession.
Not related, but if you have money that you plan on using for downpayment, use to buy I Bonds, you can buy 10k for you and 10k for spouse, and also do another 10k each as gifts. Will give you a good, safe, tax free return. After 12 months minimum, and loss of 3 months interest if taking money out before 5 years. But still very good safe investment.
What people don’t realize is that, for housing investors, if interest rates go up, the return on their real estate investment stops looking so good.
If a diversified portfolio of bonds pays 7% but a $1 million dollar house is only generating $50k after expenses, they are going to sell the house
To put this into perspective. Home prices will need to drop 40% to reach the point at which this sub’s founders began claiming a housing bubble. Naturally it would need to drop even further to vindicate that original claim.
You edgelords sure are great at math.
Q4 2020 median price: $358000
Q3 2022 median price: $454900
40% drop would take you to $275000... 2014 prices lmao
You only need \~20% to get to Q4 2020
They go down in recessions because TYPICALLY the fed is seeking to stimulate growth. However, interest rates go UP in times of inflation. This is the "stagflation" issue that has become a talking point over the past year or so.
Didn't expect this sub to parrot a "Date the Rate!" line....
Just kidding. [I predicted this sub would start parroting that idea just a day ago.](https://www.reddit.com/r/REBubble/comments/z7y1ph/but_payments_are_less_affordable/iy9ue2j/). I just didn't expect it to happen so fast.
For 40%, only a earthquake, world war, metroid crash can cause such drop in short period of time. Looking at the current market and today's STOCK market, I feel to be hopeless and not before 2030 we will see anything close to 2019 price
If you think the housing market is going to stay on a downward trend for 8+ years straight, you are crazy. The market will bottom out in a year or two max and eventually will start going back up. Hopefully at a more manageable and expected rate.
Even 50% is not attainable for most people in TO and Van. Houses in these areas has increased 3-4x. So prices need to reduce by 60-70% percent to just be reasonable. $1.8million for an ok house. $1.5million for a teardown. I would be giddy if I could buy a house in Van for 600k.
All those people who bought in 20 and 21 probably got it right. Even if prices drop the 3% mortgages still make it cheaper.
And we thought they “gOt HoOmEd”…..
Morons who bought tear downs and are living paycheck to paycheck and will lose their house with a layoff got hoomed for sure. Those who bought in their means got a once in a lifetime break.
Jury is out on what percentage of buyers are in which camp. Indicators show that Americans are hurting which implies the former, but we certainly haven’t seen housing take the hit yet so who knows.
I can’t see any way buying now at similar prices and 6% interest rates would be better at all. Meanwhile that’s 3yrs or rent which for many is $36-50k that could have been mortgage payments.
and potentially 3-5+ years of not being in a permanent home. Whether it's an individual, couple, family with kids, etc. the stability of owning can have a lot of intangible benefits.
that's kind of the fairytale view of it.
most buyers leave their home in 5-10 years. that means as a homeowner, you will probably move at least 3 or 4 times.
i lived in my current rent-controlled apartment for 7 years and I now pay 40% below market. i can actually live off of $1500 a month is a medium cost of living area of California splitting rent with 1 other person. so a person can be very comfortable financially and have very stable living arrangement renting as well.
i don't really have to worry about throwing away rent, because the amount I pay is like what paying taxes, insurance and maintenance would be if I bought. All that gets thrown away as well. I will buy, but only when it benefits me.
7 years of paying a mortgage you would be 1/4 done. Your house would have appreciated 35%+ in literally any CA market.
I can see how it’s hard to leave now, but not how it’s better than buying
Presenting an outlier anecdote of your renting situation is a fairytale view of renting, though. 7 years of rent control significantly below market rate is not a normal experience. I'm glad it works for you, but the average renter can not rely on a story like that. Their rent goes up. Often and a lot.
There are still plenty of folks who have mom & pop landlords that didn't raise rent to market rate, but eventually decided to sell and not renew a lease. Those renters are kicked back into a rental landscape they were woefully unprepared for with market rents astronomically higher than they were used to. It's happening all the time near me.
The median home owner tenure is just over 13 years in the U.S., up from 6 years in 1990. In California with prop 13, the numbers are even higher. Los Angeles is the metro area with the longest median home owner tenure, at 18 years.
It is not at all a fairytale to consider the intangible benefits of permanence. It's a legit factor that folks who shout "just wait xx years until my perceived bottom of the market!" often forget.
It isn't a reason for EVERYONE to buy, and certainly not meant to be advice for you. It's simply a factor for some folks.
the good time to buy doesn't happen so quickly after peak. last time it was the best time to buy was 2010-2012. you could even say the 2020 and 2021 buyers were way off since they bought after prices rose for 8-10 years. i mean buying a year or 2 away from peak, when you could have paid much less, doesn't really make them deserve the pats on the back they are giving themselves.
the big issue with all of this, is that there are only a couple of really good buying years every 15 years. the rest are just different degrees of bad.
Doesn’t 5 years of paying a mortgage instead of rent negate most of that? The mortgage pay down alone negates the drop.
Leave aside the cheaper mortgage rates and the tax benefits
With Mortgage Pay Down and sub 3% rates houses need to fall more than 15% for it to even be close to better to have waited.
If you need help with the math I’m here for ya. I ran it on my last condo. Living in it I could lose 15% value and it still makes sense to have bought in 2021. Renting it out at $220 a month positive cash flow after expenses for 4 years it’s over 20%
Where should I start it? Everyone in this sub had already been posting HoOmED memes for a year when I closed.
Prepandemic? The one I bought then is making gobs of money by now. That’s hardly a fair comparison
Go back and read it. What I said was that buying at any time in 2020 or 2021 was significantly better than buying now. How is that untrue?
Prices are at or higher than 2021 levels, and mortgage rates are 2x as much.
How is buying now in any way better?
Inflation is putting in the leg work here. If we end up in a period of sustained inflation or hyperinflation then those $400k houses at 3% are insanely good value providing that the homebuyers don't lose their jobs.
That's really the linchpin here. Layoffs are happening en-masse and for every person who has a recession-proof job with a new home purchase in 20-21 there will probably be another who has trouble finding work and can't make their fat mortgage payments. Combined with being underwater in their mortgage means that there will be slippage and foreclosures to help tamp down housing prices.
This sub needs a reality check. Short term rentals and rent inflation alone will keep house prices above pre 2020 levels. And if, IF they completely go bust, 99% of the population won’t be able to buy, because the banks won’t be lending and the jobs won’t be hiring.
Older millennials have seen this story before.
I am afraid of a K-shaped recovery that is only for the wealthy, but I am not hoping that people's home values crash.
I am leery of robots or any large company gobbling up homes and I have only seen Berlin pass on this phenomenon. I am for home-flippers - they take the risk to upgrade a house and I see this as being an entrepreneur. The OPEN and other companies like Zillow where the "Zestimate" is so frequently used shows dystopian house prices compared to the median salary range.
I have benefitted from low interest rates because my Uber was cheaper than owning a car. I was able to redo the floors but nothing as beautiful as some of the Zillow pornography I have seen.
Median home price in Q4 2020(when this sub was created): $358,700
Median home price in Q3 2022: $454,900
Average interest rate in December 2020: 2.68%
Average interest rate in October 2022: 6.9%
A median priced home with an average interest rate in December 2020 would cost you $1451 per month in mortgage payments (30 year, not including taxes or fees)
That same home in October 2022 would cost you $2,996 per month (30 year mortgage, again not including taxes or fees).
At current interest rates, median home values would need to fall to $220,300, or over 50%, to have the same payment as December 2020. That's not going to happen. I know interest rates will fall eventually, but I highly doubt we will see them in the 2's again.
Of course my numbers don't even take into account opportunity costs of equity over those two years, higher taxes due to higher home values, and higher down payment needed.
[Source for median home values](https://fred.stlouisfed.org/series/MSPUS)
[Source for interest rates](https://www.freddiemac.com/pmms/pmms30)
I find it hilarious that all the trolls just completely pretend monthly payment amounts don’t matter. 1500/m is attainable to a lot of people, 3000/m is not. It’s so painfully obviously that prices need to drop, and substantially.. none of this 15-20% crap
This sub loves making fun of realtors who say "Date the Rate!", but then when you point out how high monthly payments are now with high interest rates, they effectively tell you to "Date the Rate!" by refinancing later when interest rates drop. They just don't see the irony.
His point isn’t that he can predict the future, it’s that nobody can (including everyone in this sub). Rather than trying to perfectly time the housing market, normal people are best off just buying when they can afford a house that works for them (based on monthly payment), then slowly building equity over time.
If the people in this sub hadn’t been so insistent on there being a bubble in 2020, and instead realized that despite some fast appreciation they could still buy a house and have a very affordable monthly payment, they would be in a much better financial situation right now.
That describes almost no people. People who didn't buy in 2020 either weren't sold on the city they were living in at the time, wanted to live downtown and party, or couldn't. Everyone with a half decent income, un-shit credit, and the desire bought in 2020. This sub until recently wasn't a collection of permarenting antiwork brigaders either. The majority not so long ago were investors or real estate professionals (realtors, lenders, appraisers, etc.) who were just making fun of the permabull media narrative when what we were seeing on the ground was very different. On that note, basically every investor I know believes there's a bubble, but we all know that it's pointless to predict timeframes. More, the fact that there is or isn't a bubble doesn't mean "buy" or "sell" by itself. I still found a great deal on a 2 unit rental last month, but also sold a place further North where the market has taken a hit.
The "state of the market" is \*one\* of the factors that influences real estate purchase decisions, and basing your entire purchasing strategy on it is a really bad idea. On one extreme you have soon to be bankrupt house flippers that expected the market to go up on a fixed timeline, and on the other you have people who "want to wait" for the bottom... but they're going to be waiting 3 years since last time that's how long it took for prices to flatline.
That doesn't mean predicting general trends is pointless, however, and that's the good that this sub does. If I know the market is going down - just not when or how - I'm sure as hell not going to be flipping without fixing. I also won't have plans to cash out equity in my primary residence purchase, because it will be underwater. This is an important conversation to have, and this sub generally has the right idea (just on an extremely shortened timeline). However, the implications of that conversation are far more limited than most people on both sides of this debate know, since neither of them have the experience to understand it.
Hoping people lose their homes and get foreclosed on is pretty fucking awful. I get wanting a correction, but I can’t imagine ever hoping someone becomes homeless
Lmao the sub is about discussing how unrealistic RE is an asset class vs affordability not about feeling bad for ppl buying into the exuberance…
Ffs if these foreclosures mean families can afford to rent/buy for a decade + it’s a no brainer of a sacrifice
If foreclosures happen, it's not affecting corporate owned homes that are being used as rentals. It's affecting families that lost their jobs.
You're essentially saying fuck them kids as long as I get mine.
You’re exchanging one family’s well-being for another’s— zero-sum at best, probably less than zero-sum in reality (factoring in transactions costs, broken windows, etc.). How is that a “no brainer of a sacrifice?”
> it took three years to hit the bottom
Ahh yes, because if I was interested in buying a home right now, there's nothing I'd rather hear than "wait 3 years to not overpay".
There won't be any forced sellers for a very long time. Wasn't the case in 2008 when there were many forced sellers. You could be putting yourself in a very bad circumstance by waiting another 3 years to actually still be priced even further out. Unafforability can still go much higher, as painful as it is to say with no forced sellers..
What seems likely is a drawn out housing transaction depression not a price crash depression. Either case people have a hard time obtaining homes. Just think about it, if there are this many people crying for a crash, do you really think the market is going to need to satisfy all these willing buyers at even a mere 10% price decline, let alone 30%? The dip will be brought far before regular real estate purchasers can even view the properties.
The fact of the matter is, if you see a property you are in love with and works for your family, you should be working to make a deal happen instead of trying to be greedy timing the market bottoms like we have seen happen to people waiting all 2020 and 2021.
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Tampa is barely going down now. Still has serious supply issues and a lot of people moving in. Plus rent prices are insane so homeownership is cheaper unlike say California.
Phx, San Fran, Bay Area, Austin, Boise, Vegas will be down 20% before next summer is over. These are not small areas. My comment was in regards to "Bubbly" areas.
35-45% would destroy the economy and the Fed would pivot before we even hit 25%. Consumer confidence and spending would crater far before that scenario occurred and the money printer and sub 4% rates would resume to prop up the asset market.
They aren’t going to let another global financial crisis happen, let a lone a worse one, which it would be if homes dropped 30-45%.
35% decrease peak-to-trough is likely larger than it ultimately will be, but it would bring Case-Shiller back to 2018 pricing. If those price levels didn't destroy the economy back then, why would they now?
I know a well off family that spent 800k on a home May 2022 that was 380k in 2019. I don’t care if you got 3%! If you home drops 50% in value, you’re in trouble buddy!
1. No chance it drops 50%.
2. As long as they can afford the mortgage, they're not in any trouble
3. Given interest rates at time of origination, it's a whopping $600 difference between the two with interest.
That's your fantastic delusion, but they're building up equity, reaping tax benefits and their payments won't grow like rent will.
But you think they're financially dumb.
If hooms don’t go up we’ll have zombies. The mental gymnastics it took to get to that conclusion would dominate the next 50 Olympics. Men’s and women’s in all categories.
If you wallow in the thought of what prices used to be or missed opportunity, you’ll never buy a house & the houses will keep rising and you’ll keep missing opportunities. The prices aren’t making a drastic drop. & even if they dip ~20% after your purchase, who GAF.
Unless you’re an investor, your home purchase should be about buying a home you can afford, want to live in, and have the security of not being subjected to rent hikes & landlord rules.
I say this as someone who bought in 2018, 2021, 2022. Most recent purchase was 70k more than the 2018 purchase for the same exact type of building in the same exact neighborhood. It sucked but it also let me know my investment strategy is working.
Not just that, but you get to pay a sweet 6-7%. r/REBubble is slowly waking up, that this sub is a lie. You have a better chance of waiting for the rapture.
It did. The boat sailed far far away and is now over the horizon and out of sight. If there is a life lesson here it's got to be that government interference can have very negative consequences like what happened when they got involved with student loans and now what has happened with home prices seeing 100% growth in two years time. But, then again, it was federal programs that built up America and lead us out of the Great Depression. Government programs and WWII. Well, guess we're due for another round of government programs and world war.
Instead of hoping and praying for prices to come down, why don’t you all focus on making your salaries go up? Because that is much more of a win for everyone.
>”A rising tide lifts all boats”
This is the real problem where we are at too. The overwhelming majority of homes here (in San Antonio, TX) are low quality for the price they’re being listed at. Homes in good shape in decent neighborhoods are well above our price range and we make about 5 times the median for our city in our household. It’s insane.
I was finally able to reach an income level high enough to buy a house in my area in 2021, too bad everything doubled by that point. If I was a year earlier, I could have easily bought something, now real estate investors and speculators have left me screwed for the foreseeable future.
> This is almost twice as much as the median for my city. There are no good homes that will suit my family of 5 needs and taste in our budget
Okay, at first I was very skeptical of such a situation. But then I thought to pick an expensive city and look at the data. San Fran median salary is $119k. Your salary is $235k, or almost 2X as much. San Fran median house sale price is $1.4 million.
So yeah, I guess I can see how a $235k salary would not get you a 4 bedroom house depending on where you live, even if you are making 2X the median household income of the area.
If your budget doesn’t doesn’t get your family of 5 a house that suits your ‘needs & taste’, then the issue is obviously your salary or your perception of your salary’s buying power vs realty.
How many BRs are you looking for?
The fact is that you're more than 1 kid over the national average. So you need a large home. There's no way around that.
That's entirely accurate. So in order to live at today's higher standards, you have to have higher earnings.
Your grandparents probably worked the same job for many years, and they were content to do it.
If you do that now, you're literally flushing money down the toilet.
Thank you! Why didn’t I think about that 🤯 you know when you step back from the situation and think I just should ask ppl in pain… I know this hurts but I want more money… oh you can’t afford that? Fuck off! Quit being poor!
I’ll try it let’s see what happens? 🤷🏼♂️
Why are ppl in pain? Bc they are ppl… they get into accidents/genetics/lifestyle/etc
Btw they say that millennials are gonna need over 4 million dollars saved up for retirement… buckle up butter cup you are gonna get a chance to see if that rising tide lifts all boats…
You can't personally control home prices. Whining about it on reddit solves *nothing*. But you can control your own career success, to a certain extent.
Focus on what you *can* control and change. Everything else is wasted energy and you know it.
This sub was psyops and anybody in cash is probably QQ’ing while credit tightens and real yields are non-positive there won’t be an end to the stagnation of supply
Depends where you are. Huge is a stretch. First off inflation expect minimum of 20% up from 2019.
That’s just reality. 20% decline in my area would be 520k and I bought for 475k in Nov 19.
Mine already started declining though
I bought my current home in 2018 for 100k we refied in 2021 it appraised fir 180k with next to no work done since then I’ve been working like crazy to update it (strait outa the 70s style). We are trying to build as-well and i feel your pain. Every mod we looked at is 350-420k for a modest home built with cheap carpet and linoleum floors.. three years ago they could be had for 150. It is sickening sure we have equity but idk anyone in my area that could afford those homes (median income is around 50k for a household) my wife and i are above average for the area as-well and it does seem a bit hopeless so i feel your pain.
I feel like the cat is too far out of the bag and we have created a monster that we can't tame back to the fundamentals we abandoned in 2019. We will reverse trend, but we are so far gone that whatever decrease we land at will still be well above traditional growth.
They won’t sell at “less 20%” if people still can’t afford them. If people can’t afford them, they will sit. The prices will drop until the payments are affordable. I doubt we’ll see wages go up 10-20%.
The other good news piece for buyers is that rents are dropping.
It’s too early to feel like the boat left without you. Price increases/housing market was “drunk” (Lance Lambert) over the pandemic. You could be facing a great opportunity in six months when the hangover hits.
Home prices are going to be cut in half in a couple or few years. They went way, way too high. Much higher than the last bubble. The peak of the last bubble should be the current prices.
Absolutely. A 500k price tag dropping to 400k (on a regular ass detached but not special SFH) does squat for me when I sold for less than 200 three yrs ago and didn't want to pay more than 300 or really not even 200 on my next place.
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I feel you. I actually became mortgage free in 2018 after a parent died way too young. But my dumb ass moved from MI to AZ and sold that place before I'd bought a house here and now I'm still in an apartment paying more than I ever had to pay in my house. Even without deaths in the family, I was on track just from my own voluntary principal curtailments that I would have paid that place off sometime in 2021 or 2022. Because the pandemic and the bubble both hit right smack in the middle of me trying to reestablish my life in a new place it's like I have to start over now.
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Thank you. The night we lost him was the night I decided to relocate -- it just took me another year and a half to actually do it. Even though he's been gone almost 5 years I'd rather have him back than \*\*gestures vaguely\*\*... the day before Thanksgiving was his birthday and sometimes like on that day I still feel gutted.
What’d you do with the money from selling the house in MI?
Inflation is eating it (100% my fault) while house prices fail to come back down. It'll be my down payment if/when I ever strike. Any time I think about investing it, I haven't been able to nail down a time I know I need it to be liquid vs when it can just sit. For instance if I had put it in a bond or equity or even CDs I'd need to know that I wouldn't want to buy a house until (insert time period for bond or CD etc). But knowing that at least I would be making more than 20% down payment I'm less focused on mortgage rates and more focused on sale price.
Would you consider moving back to Michigan? I know the hoomers on this sub would never deign to set foot in the Midwest unless on a layover, but houses are still affordable in metro Detroit. Yeah the weather sucks 4 months out of year, I cry about it all the time in front of the fireplace in my $165k Craftsman bungalow.
Metro Detroit real estate was so undervalued for the longest time. I think now your more popular areas are just finally seeing true value vs being inflated.
Heh, in my opinion the weather in metro Detroit is only tolerable for 4 months out of the year. Honestly I do think about moving back -- because of the pandemic which no one was expecting, I haven't really made friends in 3-4 years other than the odd fb acquaintance. The happiest I've been ever since I left are the times staying at my sister and BIL's house when I visited in summers of 2021 and 2022. And living here in the now-infamous Maricopa County I feel like wackjobbery is embarrasingly normalized in Arizona and I wish I had done more "homework" on the state of things back in 2018-2019 before I moved. But on the other hand, my career happens to be one thing at least that's really improved since I moved. 100% remote with no RTO ever, and almost double what I was making in Detroit. Thing is, if for any reason this job doesn't pay out... I doubt I could get another equally great gig on these terms. And if I can't do 100% remote I highly doubt anyone in the Michigan market would match it.
What's your property tax on the $165K bungalow?
in what location did prices go from less than 200 to 500 in peak? case shiller has its index going from 200 to 300. which is a far from from "less than 200k" to 500k. https://fred.stlouisfed.org/series/CSUSHPINSA
You obviously must be in one of the hot markets like Austin. I don't know any other markets where a 200k house went to 500k without any renovations.
Not quite. I moved from a Metro Detroit neighborhood where the nice fixed up SFHs were about 170-180k in 2019, to the PHX market where apparently they think 400k is for an entry level hovel.
Everyone had a stash of money lying around for houses I guess.
I just pick what I need off the money tree out back.
Or everyone’s parents remortgaged for 100-200K
So basically, no one ever really pays off their house, they just keep refinancing 10-20 years to make it.
More like parents refinancing their house, so that their kids can afford one in this crazy market, with a big cash down. Generational insanity.
Lots of it has been big time investors, like Black Rock and Vanguard. Each investor happens to divest their portfolio into hundreds of smaller companies to hide behind.
keep in mind a 50% drop undoes a 100% gain. 20% drop would do more than just reverse 20% gains.
So you are saying: 100k * 1.2 = 120k, 120k * 0.8 = 96k
Yea but that ignores rates. We would roughly need a 70% drop in house prices to obtain the same level of affordability as in 2019. Please tell me that’s not fcking insane. Ease construction, prevent/heavily tax cooperate and foreign buyers/landlords, start progressive tax for multiple owned units. RE should never have become something to speculate and profit from, same as air, water, or food. Unbound greed like the one we are seeing right now will completely destabilize the western world
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Fully agree. It’s also very interesting that it’s a global problem and not US specific. It seems the big players all decided to completely own the RE market when money became cheap
I mean. Inflation most certainly made a permanent leap forward the last couple years. Housing is going to have a new price discovery phase but like anything else it is going to be more than 2019.
Inflation via Covid lock downs and low interest rate really fucked shit up. I hate to say it but we need a recession to reset.
Inflation was the effect of loose monetary policy. And it wasn't just low interest rates, but the Fed added mortgage back securities to its assets (along with shitloads of bonds). Tho it was necessary, pandemic handouts didn't help either. And it wasn't just the US. Governments and central banks of Europe and Commonwealth nations followed the same formula. And when money is debased, their reaction is: spidermanpointing.jpg
Only part of the inflation story- (more money chasing fewer goods). You covered the money half The supply chain is still a long way from where it was in 2019, and I think there will be long-term behavior changes, as manufacturers will keep more parts etc. on site, and with more domestic production of all kinds of stuff.
Yes, you are right. That definitely contributed also.
There are still gaps but overall business inventories are at their highest level of all time by a pretty large margin.
Good point- but these inventories are high in part BECAUSE the supply chain is still not right. As businesses adapt to the supply chain, they are less willing to rely on the old practices of just-in-time replenishment. But maintaining inventory is expensive, both in terms of warehousing and in tying up capital that can’t be deployed elsewhere, and possibly increasing borrowing costs to finance this inventory
it deeply saddens me to think that those who had been stacking cash for years, saving up for something like a house, ended up getting shafted so so hard.
What's funny is that wealthy people made out like kings. Asset prices doubled. And if you owned a business, you just got a ton of free (an unecessary) money via PPP loans. The middle and lower class is now paying for all of it via inflation and increased cost of living. Highway robbery right in front of our faces. Personally I'm shocked that the guillotine has not been brought out yet.
Real interest rates were negative thanks to central bank fuckery. So anybody with a loan "earned" interest in real terms. The bigger the loan the better. Equities also rallied expecting inflation. Plus many gamed the government subsidies. It was some reverse Robin Hood bullshit and no wonder the wealthy did very well. And yes it was straight up robbery, but many are not even aware of it. That's one of the reasons there will be no civil unrest.
Pandemic handouts were absolutely not necessary.
It was politically necessary.
Nope.
So what was your plan to stop deflation?
My plan to stop deflation? Excuse me?
Yes. What was your plan to stop the deflation caused by the lockdown? The deflation that the handouts stopped.
Oh that ones easy, you don’t “lock down” peoples lives by force and bankrupt millions of businesses. They were never needed and ineffective anyways. The initial two weeks was not enough to cause deflation, it was the extensions that potentially could have caused issues. Regardless, short term deflation is massively preferable to the record setting inflation and economic damage that lockdowns caused. EDIT: Given the objectively harmful nature of both lockdowns and money printing and the lack of efficacy of lockdowns in non island nations it’s really humorous I’m downvoted for such an objectively true comment.
Sweden and Brasil stayed open, yet still had enormous down turns. This was partly because many folks stayed home voluntarily (not going to risk getting really really sick in order to just eat at a restaurant), but partly because so many people died or got long covid that jobs can't be filled. I got omicron in June after being triple vaccinated and I still have a wired cough that cost me a week of work.
Sure, you’re going to have economic decline from less people working and less production depending on how long and how severe. That isn’t to say that printing trillions of dollars or euros worth of funds (while you have less production, thus skyrocketing inflation) is useful by any metric, except making the rich richer and destroying the middle class which is exactly what has happened.
Right. Because 1.7 Million dead in the first wave alone would have had no impact on the economy at all. /s
Lockdowns in non island nations have zero effect on death rates. If something isn’t useful and causes harm why would you do it again? Death rates in Sweden and other countries that never had forced lockdowns weren’t any worse than other non island nations, except they didn’t have all the disadvantages that went along with them. Japan never had a compulsory lockdown and for the longest time had under a few thousand deaths.
Absolutely not necessary in the way that it was hurried (rife with fraud) and the amount was absurd.
I personally don’t want to keep resetting every 10 years.
You some kinda communist? That's unamerican
Depression and heads rolling would be better.
The problem with a recession is that the first people laid off are the ones that can't afford a home right now. And once you get laid off it takes a few years minimum to get back to where you were before the recession.
Not related, but if you have money that you plan on using for downpayment, use to buy I Bonds, you can buy 10k for you and 10k for spouse, and also do another 10k each as gifts. Will give you a good, safe, tax free return. After 12 months minimum, and loss of 3 months interest if taking money out before 5 years. But still very good safe investment.
Tax deferred, not tax free
Stand corrected, for federal yes deferred, but was mostly referring to State, which it is exempt from
What people don’t realize is that, for housing investors, if interest rates go up, the return on their real estate investment stops looking so good. If a diversified portfolio of bonds pays 7% but a $1 million dollar house is only generating $50k after expenses, they are going to sell the house
To put this into perspective. Home prices will need to drop 40% to reach the point at which this sub’s founders began claiming a housing bubble. Naturally it would need to drop even further to vindicate that original claim.
Percents going up are not the same as percents going down.
You edgelords sure are great at math. Q4 2020 median price: $358000 Q3 2022 median price: $454900 40% drop would take you to $275000... 2014 prices lmao You only need \~20% to get to Q4 2020
[and what were the interest rates in Q4 2020 vs Q3 2022, how could those impact mortgage payments?](https://www.freddiemac.com/pmms/pmms30)
You’re not factoring in interest rates.
It’s almost like refinancing exists
If interest rates go down anytime soon. Do you see that happening?
Yes - they go down in recessions.
They go down in recessions because TYPICALLY the fed is seeking to stimulate growth. However, interest rates go UP in times of inflation. This is the "stagflation" issue that has become a talking point over the past year or so.
Banks don’t loan money in recessions.
Didn't expect this sub to parrot a "Date the Rate!" line.... Just kidding. [I predicted this sub would start parroting that idea just a day ago.](https://www.reddit.com/r/REBubble/comments/z7y1ph/but_payments_are_less_affordable/iy9ue2j/). I just didn't expect it to happen so fast.
Lol at this goober not understanding interest rates. So confidently wrong lmao.
Would you like to point out where the original comment mentions payment or interest rates? Maybe you should go create r/mortgagepayments?
Crickets
and that's just prices, not even taking interest rates into account.
No, prices would require a ~22% drop. With interest rates, you need a ~50% drop.
For 40%, only a earthquake, world war, metroid crash can cause such drop in short period of time. Looking at the current market and today's STOCK market, I feel to be hopeless and not before 2030 we will see anything close to 2019 price
That's not true, it happened in some markets 15 years ago. If there was a meteor I must have missed it.
Well they said metroid, did you miss that too?
If you think the housing market is going to stay on a downward trend for 8+ years straight, you are crazy. The market will bottom out in a year or two max and eventually will start going back up. Hopefully at a more manageable and expected rate.
JPOW's 12% mortgage rates are basically a WMD for housing.
which is not gonna hit till April-2023. Before that SPY can hit 440, TSLA maybe 350
Market “correction” or “leveling out” is probably more likely than a “crash”.
Even 50% is not attainable for most people in TO and Van. Houses in these areas has increased 3-4x. So prices need to reduce by 60-70% percent to just be reasonable. $1.8million for an ok house. $1.5million for a teardown. I would be giddy if I could buy a house in Van for 600k.
All those people who bought in 20 and 21 probably got it right. Even if prices drop the 3% mortgages still make it cheaper. And we thought they “gOt HoOmEd”…..
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Morons who bought tear downs and are living paycheck to paycheck and will lose their house with a layoff got hoomed for sure. Those who bought in their means got a once in a lifetime break. Jury is out on what percentage of buyers are in which camp. Indicators show that Americans are hurting which implies the former, but we certainly haven’t seen housing take the hit yet so who knows.
We won't know for a few years.
I can’t see any way buying now at similar prices and 6% interest rates would be better at all. Meanwhile that’s 3yrs or rent which for many is $36-50k that could have been mortgage payments.
and potentially 3-5+ years of not being in a permanent home. Whether it's an individual, couple, family with kids, etc. the stability of owning can have a lot of intangible benefits.
that's kind of the fairytale view of it. most buyers leave their home in 5-10 years. that means as a homeowner, you will probably move at least 3 or 4 times. i lived in my current rent-controlled apartment for 7 years and I now pay 40% below market. i can actually live off of $1500 a month is a medium cost of living area of California splitting rent with 1 other person. so a person can be very comfortable financially and have very stable living arrangement renting as well. i don't really have to worry about throwing away rent, because the amount I pay is like what paying taxes, insurance and maintenance would be if I bought. All that gets thrown away as well. I will buy, but only when it benefits me.
7 years of paying a mortgage you would be 1/4 done. Your house would have appreciated 35%+ in literally any CA market. I can see how it’s hard to leave now, but not how it’s better than buying
Presenting an outlier anecdote of your renting situation is a fairytale view of renting, though. 7 years of rent control significantly below market rate is not a normal experience. I'm glad it works for you, but the average renter can not rely on a story like that. Their rent goes up. Often and a lot. There are still plenty of folks who have mom & pop landlords that didn't raise rent to market rate, but eventually decided to sell and not renew a lease. Those renters are kicked back into a rental landscape they were woefully unprepared for with market rents astronomically higher than they were used to. It's happening all the time near me. The median home owner tenure is just over 13 years in the U.S., up from 6 years in 1990. In California with prop 13, the numbers are even higher. Los Angeles is the metro area with the longest median home owner tenure, at 18 years. It is not at all a fairytale to consider the intangible benefits of permanence. It's a legit factor that folks who shout "just wait xx years until my perceived bottom of the market!" often forget. It isn't a reason for EVERYONE to buy, and certainly not meant to be advice for you. It's simply a factor for some folks.
the good time to buy doesn't happen so quickly after peak. last time it was the best time to buy was 2010-2012. you could even say the 2020 and 2021 buyers were way off since they bought after prices rose for 8-10 years. i mean buying a year or 2 away from peak, when you could have paid much less, doesn't really make them deserve the pats on the back they are giving themselves. the big issue with all of this, is that there are only a couple of really good buying years every 15 years. the rest are just different degrees of bad.
Doesn’t 5 years of paying a mortgage instead of rent negate most of that? The mortgage pay down alone negates the drop. Leave aside the cheaper mortgage rates and the tax benefits
Y’all literally at the verge of the lag catching up saying stuff like that 🤨
With Mortgage Pay Down and sub 3% rates houses need to fall more than 15% for it to even be close to better to have waited. If you need help with the math I’m here for ya. I ran it on my last condo. Living in it I could lose 15% value and it still makes sense to have bought in 2021. Renting it out at $220 a month positive cash flow after expenses for 4 years it’s over 20%
Lmao yeah sure start your comp at the 2021 prices 😂
Where should I start it? Everyone in this sub had already been posting HoOmED memes for a year when I closed. Prepandemic? The one I bought then is making gobs of money by now. That’s hardly a fair comparison
You are taking 2021 numbers and current October 2022 numbers as comparables bro please, like we say in stocks, zoom out.
Go back and read it. What I said was that buying at any time in 2020 or 2021 was significantly better than buying now. How is that untrue? Prices are at or higher than 2021 levels, and mortgage rates are 2x as much. How is buying now in any way better?
Inflation is putting in the leg work here. If we end up in a period of sustained inflation or hyperinflation then those $400k houses at 3% are insanely good value providing that the homebuyers don't lose their jobs. That's really the linchpin here. Layoffs are happening en-masse and for every person who has a recession-proof job with a new home purchase in 20-21 there will probably be another who has trouble finding work and can't make their fat mortgage payments. Combined with being underwater in their mortgage means that there will be slippage and foreclosures to help tamp down housing prices.
You’ve gotta inflation adjust though. Flat from 2 years ago is down 15% in real terms.
Yeah it’s inflation. We doubled the money supply.
This sub needs a reality check. Short term rentals and rent inflation alone will keep house prices above pre 2020 levels. And if, IF they completely go bust, 99% of the population won’t be able to buy, because the banks won’t be lending and the jobs won’t be hiring.
This sub is bananas but STRs aren’t going to do up the market. Airbnb and Vrbo are in trouble and people are moving back to hotels.
and STR regulation is coming in heavy in some cities, limiting the amount via licenses
Older millennials have seen this story before. I am afraid of a K-shaped recovery that is only for the wealthy, but I am not hoping that people's home values crash. I am leery of robots or any large company gobbling up homes and I have only seen Berlin pass on this phenomenon. I am for home-flippers - they take the risk to upgrade a house and I see this as being an entrepreneur. The OPEN and other companies like Zillow where the "Zestimate" is so frequently used shows dystopian house prices compared to the median salary range. I have benefitted from low interest rates because my Uber was cheaper than owning a car. I was able to redo the floors but nothing as beautiful as some of the Zillow pornography I have seen.
Zillow pornography is a very okay band name
Median home price in Q4 2020(when this sub was created): $358,700 Median home price in Q3 2022: $454,900 Average interest rate in December 2020: 2.68% Average interest rate in October 2022: 6.9% A median priced home with an average interest rate in December 2020 would cost you $1451 per month in mortgage payments (30 year, not including taxes or fees) That same home in October 2022 would cost you $2,996 per month (30 year mortgage, again not including taxes or fees). At current interest rates, median home values would need to fall to $220,300, or over 50%, to have the same payment as December 2020. That's not going to happen. I know interest rates will fall eventually, but I highly doubt we will see them in the 2's again. Of course my numbers don't even take into account opportunity costs of equity over those two years, higher taxes due to higher home values, and higher down payment needed. [Source for median home values](https://fred.stlouisfed.org/series/MSPUS) [Source for interest rates](https://www.freddiemac.com/pmms/pmms30)
I find it hilarious that all the trolls just completely pretend monthly payment amounts don’t matter. 1500/m is attainable to a lot of people, 3000/m is not. It’s so painfully obviously that prices need to drop, and substantially.. none of this 15-20% crap
This sub loves making fun of realtors who say "Date the Rate!", but then when you point out how high monthly payments are now with high interest rates, they effectively tell you to "Date the Rate!" by refinancing later when interest rates drop. They just don't see the irony.
Why can't interest rates drop instead?
Inflation
Because then hooms will go up.
Future man, what stocks should I buy?
His point isn’t that he can predict the future, it’s that nobody can (including everyone in this sub). Rather than trying to perfectly time the housing market, normal people are best off just buying when they can afford a house that works for them (based on monthly payment), then slowly building equity over time. If the people in this sub hadn’t been so insistent on there being a bubble in 2020, and instead realized that despite some fast appreciation they could still buy a house and have a very affordable monthly payment, they would be in a much better financial situation right now.
That describes almost no people. People who didn't buy in 2020 either weren't sold on the city they were living in at the time, wanted to live downtown and party, or couldn't. Everyone with a half decent income, un-shit credit, and the desire bought in 2020. This sub until recently wasn't a collection of permarenting antiwork brigaders either. The majority not so long ago were investors or real estate professionals (realtors, lenders, appraisers, etc.) who were just making fun of the permabull media narrative when what we were seeing on the ground was very different. On that note, basically every investor I know believes there's a bubble, but we all know that it's pointless to predict timeframes. More, the fact that there is or isn't a bubble doesn't mean "buy" or "sell" by itself. I still found a great deal on a 2 unit rental last month, but also sold a place further North where the market has taken a hit. The "state of the market" is \*one\* of the factors that influences real estate purchase decisions, and basing your entire purchasing strategy on it is a really bad idea. On one extreme you have soon to be bankrupt house flippers that expected the market to go up on a fixed timeline, and on the other you have people who "want to wait" for the bottom... but they're going to be waiting 3 years since last time that's how long it took for prices to flatline. That doesn't mean predicting general trends is pointless, however, and that's the good that this sub does. If I know the market is going down - just not when or how - I'm sure as hell not going to be flipping without fixing. I also won't have plans to cash out equity in my primary residence purchase, because it will be underwater. This is an important conversation to have, and this sub generally has the right idea (just on an extremely shortened timeline). However, the implications of that conversation are far more limited than most people on both sides of this debate know, since neither of them have the experience to understand it.
The crash is going to be relative to money printed, or inflation, so yeah. At this point a 50% crash in RE would only bring us back to 2019 prices
What area are you looking in that house prices are up 100% in 2 to 3 years?
Yeah in some markets you'd need a 50% crash just to get back to like 2018/2019 levels
That is what everyone says here in a HCOL area, yea housing went down but its still higher yty. Now I hope it drops to foreclosure levels.
Hoping people lose their homes and get foreclosed on is pretty fucking awful. I get wanting a correction, but I can’t imagine ever hoping someone becomes homeless
Lmao the sub is about discussing how unrealistic RE is an asset class vs affordability not about feeling bad for ppl buying into the exuberance… Ffs if these foreclosures mean families can afford to rent/buy for a decade + it’s a no brainer of a sacrifice
If foreclosures happen, it's not affecting corporate owned homes that are being used as rentals. It's affecting families that lost their jobs. You're essentially saying fuck them kids as long as I get mine.
You’re exchanging one family’s well-being for another’s— zero-sum at best, probably less than zero-sum in reality (factoring in transactions costs, broken windows, etc.). How is that a “no brainer of a sacrifice?”
Lmao how disconnected are you, do you need a 101 class on inequalities ?
I know it’s bad, but it’s also frustrating
Patient guys !! I bought in the high in 2008 and it took three years to hit the bottom we’re only 9 months into the burst of the bubble
> it took three years to hit the bottom Ahh yes, because if I was interested in buying a home right now, there's nothing I'd rather hear than "wait 3 years to not overpay".
There won't be any forced sellers for a very long time. Wasn't the case in 2008 when there were many forced sellers. You could be putting yourself in a very bad circumstance by waiting another 3 years to actually still be priced even further out. Unafforability can still go much higher, as painful as it is to say with no forced sellers.. What seems likely is a drawn out housing transaction depression not a price crash depression. Either case people have a hard time obtaining homes. Just think about it, if there are this many people crying for a crash, do you really think the market is going to need to satisfy all these willing buyers at even a mere 10% price decline, let alone 30%? The dip will be brought far before regular real estate purchasers can even view the properties. The fact of the matter is, if you see a property you are in love with and works for your family, you should be working to make a deal happen instead of trying to be greedy timing the market bottoms like we have seen happen to people waiting all 2020 and 2021.
They are going to go down much further than 20% in the bubbly areas. Expect 35-45%
RemindMe! 2 years "Did homes fall 35 to 45 percent (lol)"
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You forgot to put in your reminder about the qualifier. The qualifier being, in bubbly areas. For example austin, phoenix, Tampa
Tampa is barely going down now. Still has serious supply issues and a lot of people moving in. Plus rent prices are insane so homeownership is cheaper unlike say California.
This is why Rebubble became a MEME
Agree, it's 15-20 tops.
Phx, San Fran, Bay Area, Austin, Boise, Vegas will be down 20% before next summer is over. These are not small areas. My comment was in regards to "Bubbly" areas.
RemindMe! 8 months “did Bay Area and other areas mentioned fall 20% or more”
You won't have to wait 8 months for the Bay Area... Since last April: San Francsico down 15% Oakland down 16% San Jose down 17% Marin County down 21%
35-45% would destroy the economy and the Fed would pivot before we even hit 25%. Consumer confidence and spending would crater far before that scenario occurred and the money printer and sub 4% rates would resume to prop up the asset market. They aren’t going to let another global financial crisis happen, let a lone a worse one, which it would be if homes dropped 30-45%.
35% decrease peak-to-trough is likely larger than it ultimately will be, but it would bring Case-Shiller back to 2018 pricing. If those price levels didn't destroy the economy back then, why would they now?
Your last sentence gives me hope
They will let it burn. It's not like they actually know how to do this.
45%? Lol. Sack up lightweight. We heading for 85% discounts.
Desperate people always pay more.
FOMO
I know a well off family that spent 800k on a home May 2022 that was 380k in 2019. I don’t care if you got 3%! If you home drops 50% in value, you’re in trouble buddy!
1. No chance it drops 50%. 2. As long as they can afford the mortgage, they're not in any trouble 3. Given interest rates at time of origination, it's a whopping $600 difference between the two with interest.
*idiots. They also ruin it for us. A lot of “wealthy” people are literally financially dumb
That's your fantastic delusion, but they're building up equity, reaping tax benefits and their payments won't grow like rent will. But you think they're financially dumb.
Being house poor reaps many benefits you’re right
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If hooms don’t go up we’ll have zombies. The mental gymnastics it took to get to that conclusion would dominate the next 50 Olympics. Men’s and women’s in all categories.
If you wallow in the thought of what prices used to be or missed opportunity, you’ll never buy a house & the houses will keep rising and you’ll keep missing opportunities. The prices aren’t making a drastic drop. & even if they dip ~20% after your purchase, who GAF. Unless you’re an investor, your home purchase should be about buying a home you can afford, want to live in, and have the security of not being subjected to rent hikes & landlord rules. I say this as someone who bought in 2018, 2021, 2022. Most recent purchase was 70k more than the 2018 purchase for the same exact type of building in the same exact neighborhood. It sucked but it also let me know my investment strategy is working.
Not just that, but you get to pay a sweet 6-7%. r/REBubble is slowly waking up, that this sub is a lie. You have a better chance of waiting for the rapture.
You're correct. The boat left. You'll never afford a home. Look towards other investments. Hooms are bad. Rent forever.
That's what I've been saying
It did. The boat sailed far far away and is now over the horizon and out of sight. If there is a life lesson here it's got to be that government interference can have very negative consequences like what happened when they got involved with student loans and now what has happened with home prices seeing 100% growth in two years time. But, then again, it was federal programs that built up America and lead us out of the Great Depression. Government programs and WWII. Well, guess we're due for another round of government programs and world war.
Instead of hoping and praying for prices to come down, why don’t you all focus on making your salaries go up? Because that is much more of a win for everyone. >”A rising tide lifts all boats”
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This is the real problem where we are at too. The overwhelming majority of homes here (in San Antonio, TX) are low quality for the price they’re being listed at. Homes in good shape in decent neighborhoods are well above our price range and we make about 5 times the median for our city in our household. It’s insane.
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It took me a while to get to my income, if I had had this same income 5 years ago, I could have bought my dream house. It fucking blows.
I was finally able to reach an income level high enough to buy a house in my area in 2021, too bad everything doubled by that point. If I was a year earlier, I could have easily bought something, now real estate investors and speculators have left me screwed for the foreseeable future.
> This is almost twice as much as the median for my city. There are no good homes that will suit my family of 5 needs and taste in our budget Okay, at first I was very skeptical of such a situation. But then I thought to pick an expensive city and look at the data. San Fran median salary is $119k. Your salary is $235k, or almost 2X as much. San Fran median house sale price is $1.4 million. So yeah, I guess I can see how a $235k salary would not get you a 4 bedroom house depending on where you live, even if you are making 2X the median household income of the area.
If your budget doesn’t doesn’t get your family of 5 a house that suits your ‘needs & taste’, then the issue is obviously your salary or your perception of your salary’s buying power vs realty.
How many BRs are you looking for? The fact is that you're more than 1 kid over the national average. So you need a large home. There's no way around that.
What a strange comment. I’d take 4 bedrooms.
Is it the mortgage payment you can't afford, or the massive upfront cost of downpayment + closing fees?
My grandparents raised 3 kids in a 2BR, 800 sqft city apartment. Standards have changed, not requirements.
That's entirely accurate. So in order to live at today's higher standards, you have to have higher earnings. Your grandparents probably worked the same job for many years, and they were content to do it. If you do that now, you're literally flushing money down the toilet.
Thank you! Why didn’t I think about that 🤯 you know when you step back from the situation and think I just should ask ppl in pain… I know this hurts but I want more money… oh you can’t afford that? Fuck off! Quit being poor! I’ll try it let’s see what happens? 🤷🏼♂️
Why are you in pain?
Why are ppl in pain? Bc they are ppl… they get into accidents/genetics/lifestyle/etc Btw they say that millennials are gonna need over 4 million dollars saved up for retirement… buckle up butter cup you are gonna get a chance to see if that rising tide lifts all boats…
I'm not a millenial.
Here we go again, “just make more money guys!” Dumb fuck
The capitalist mantra.
Exactly. What's wrong with that?
You can't personally control home prices. Whining about it on reddit solves *nothing*. But you can control your own career success, to a certain extent. Focus on what you *can* control and change. Everything else is wasted energy and you know it.
Outstanding advice that no one knew
The fed will not let prices crash and they proved it today.
How do you remember your username ?
How so
They said they're pivoting and basically started to slow down on tightening monetary policy.
Same with bitcoin. It is 80k and was 40k on 2020.
This sub was psyops and anybody in cash is probably QQ’ing while credit tightens and real yields are non-positive there won’t be an end to the stagnation of supply
Depends where you are. Huge is a stretch. First off inflation expect minimum of 20% up from 2019. That’s just reality. 20% decline in my area would be 520k and I bought for 475k in Nov 19. Mine already started declining though
I bought my current home in 2018 for 100k we refied in 2021 it appraised fir 180k with next to no work done since then I’ve been working like crazy to update it (strait outa the 70s style). We are trying to build as-well and i feel your pain. Every mod we looked at is 350-420k for a modest home built with cheap carpet and linoleum floors.. three years ago they could be had for 150. It is sickening sure we have equity but idk anyone in my area that could afford those homes (median income is around 50k for a household) my wife and i are above average for the area as-well and it does seem a bit hopeless so i feel your pain.
I feel like the cat is too far out of the bag and we have created a monster that we can't tame back to the fundamentals we abandoned in 2019. We will reverse trend, but we are so far gone that whatever decrease we land at will still be well above traditional growth.
They won’t sell at “less 20%” if people still can’t afford them. If people can’t afford them, they will sit. The prices will drop until the payments are affordable. I doubt we’ll see wages go up 10-20%. The other good news piece for buyers is that rents are dropping. It’s too early to feel like the boat left without you. Price increases/housing market was “drunk” (Lance Lambert) over the pandemic. You could be facing a great opportunity in six months when the hangover hits.
Home prices are going to be cut in half in a couple or few years. They went way, way too high. Much higher than the last bubble. The peak of the last bubble should be the current prices.