03-19-2023, 08:02 PM | #7789 | |
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I now am thinking about buying and the developer has offered a buy down on the int rate and $100k price down from a year ago... so yea major shifts are happening sales have tanked since november... so i think this will be far more a used house rather than new house problem... as long as inventory stays constrained
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03-20-2023, 01:43 AM | #7790 |
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Don’t expect a 2008-style crash. Housing was overbuilt (too much supply) at that time.
Housing supply today is tight; supply-limited. The US has underbuilt housing since post-GFC and has not caught up. FRED has all the data for your perusal. Residential construction will remain solid for the forseeable future. Sales will fluctuate as always but will trend higher. |
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03-20-2023, 06:39 AM | #7791 |
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03-20-2023, 07:39 AM | #7793 |
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maybe he meant it makes it unaffordable for someone to move as what they could afford at 2-3% would never happen at 6%... that's very true... remember a lot of people got into houses at low rates and low down payments that could not afford houses under many under scenarios
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03-20-2023, 08:16 AM | #7794 |
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It doesn't; we have a small 2-3% mortgage and we're not house poor.
However, if you've bought a home you were barely able to afford and your rate was 2-3%, you're much more likely to be "stuck" as you've already assumed all the housing cost burden you can handle. I don't know if the term has gone out of common use, but in CA back in the day that was called being 'house poor' - and there were a LOT of people in that situation.
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03-20-2023, 03:21 PM | #7797 | |
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03-20-2023, 04:43 PM | #7798 |
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I always understood “house poor” to mean you had a big house and a big mortgage payment and nothing left over to enjoy life - like dining out. The house consumed all disposable income. And for a time, you could just “outgrow” the payment because wage inflation would drive your income up and the fixed rate mortgage payment would remain constant.
Ah, the 1970s! |
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03-20-2023, 07:02 PM | #7799 | |
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I've said it before in this thread. Home prices, and prices in general, will not fall substantially as long as unemployment is so low. Why? People with jobs spend money (even if it's money they don't have) because they believe that they'll be able to make it work somehow, even if it's not clear how. When people start losing jobs, or maybe when their best bruh or next door neighbor loses theirs, that's when they'll stop spending. And not just on houses, on lots of stuff; essentially anything discretionary. We're starting to see the effects of this in the Bay Area, I think. Homes are sitting on the market and you're seeing asking prices come down 5-10%. If interest rates stay high (likely) then over the next 12-24 months prices will keep going down as people will be forced to sell because 1) they lost their job and can't afford it any longer, so they figure they'll cash out and use the funds to rent (at least it's not '08 and they have equity), 2) they have to move for a new job and need the cash, and/or 3) they're just tired of the overtaxed sh*thole that CA has become and figure they'll take their money and run to somewhere cheaper. This will ripple down the economic spectrum to all of the people who provide goods/services to those now-vamoosed tech workers. Home prices and apartment rents will likely fall even further in the lower strata, since everything hurts those folks more. It's all about the jobs and like it or not, we need 1-2 million more people unemployed in this country to get inflation down, even to 3%. It's not going to be pretty. Especially going into an election year. A lot of people are going to call Powell a lot of nasty names. Hell, Warren already has. |
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03-20-2023, 08:01 PM | #7800 | |||
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What I saw during that period is well-located properties fell little during the down periods. The exception was '80-'82, when sellers often had to offer a 2nd to the buyer to get the numbers to work. With 18% mortgage rates, it was insane for everyone, but sellers who didn't have to sell simply sat tight and waited it out. It's worth noting that Northern California (generally, the Bay Area) and Southern California have frequently been two very different real estate markets. Many regions in SoCal have seen home price swings significantly greater than those in NorCal. That's partly because it's been easier to build in the Southland since the 1970s; despite demand, building in NorCal since that time has been on a smaller scale, and that's placed a high floor under prices. It was simply easier for Southland developers to get too far ahead of the market - the same then holding true for their recent buyers. Not that the average buyer is generally focused on what's going to happen in the market during the 2-5 years after they purchase - especially first-time home buyers, I think. Having bought our first home in California with 5% down at the tippy-top of one of the state's major price updrafts, and with a 1st at 10%, a 2nd at 10.5%, and a 3rd and a 4th each at 12%, we had a just-under-$5K monthly PITI nut to cover in 1989. I developed an ulcer during that period.
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03-20-2023, 09:16 PM | #7802 |
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I don’t really agree with housing market not crashing. People always say “this time it’s different vs whenever and therefore won’t crash.” Sure, things aren’t exactly the same, but these things happen in cycles. People didn’t worry about banks failing and then bam, they are failing! Doesn’t it seem eerily familiar with Bear Stearns and Goldman Sachs of 2008?
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03-21-2023, 06:34 AM | #7803 | |
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Good luck, homes are investiments too |
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03-21-2023, 06:36 AM | #7804 |
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I am wicked impressed with Acorns after downloading the app and starting a small investment. It automatically allocates you into a few ETFs and bonds, great lessons for new or even seasoned investors.
I will keep it going I encourage others to try this Acorns app too, novice or veteran Best. |
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03-21-2023, 06:42 AM | #7805 | |
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Stuff: it's technical banking terminology. I made some money playing in FRC as it gyrated around last week, maybe I'll try again today. But as a long-term investment: No. This is something that you want to hold for minutes, maybe an hour or two, no longer.
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03-21-2023, 09:01 AM | #7806 |
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When did Bay Area real estate last crash, do you think?
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03-21-2023, 09:46 AM | #7807 | |
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03-21-2023, 10:36 AM | #7809 |
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Re: FRC
Yeah, no, I decided not to risk it. Sure, I would have made money (hindsight) but it's still just too much of a gamble. Long or short...
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03-21-2023, 01:23 PM | #7810 | |
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It has been for a long time true that you can't lose money in the long run buying California real estate. In the short term, though.... |
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