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They projected that significantly increases in rates will crash the market.
Interest rates can affect housing sale prices some, but will not adjust down the price below a cost to build and procure land.
Some people move out of state so they can afford to buy a house. It’s that important to own the American dream. To say anything else is deceiving themselves
Eman says
Some people move out of state so they can afford to buy a house. It’s that important to own the American dream. To say anything else is deceiving themselves
That is your opinion if you were to consider what Patrick wrote about in his book and what he stated on 20/20. That 20/20 episode brought me to this site.
But I understand renting makes you essentially more subservient than owning. The Rent vs Buy calculator on the NY Times website helps a lot with this,
The best time to have bought was between 2011 and 2013 in many zip codes after housing crashed due to the Great Recession.
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Based on my experience, it’s a matter of time before the kids of Patrick’s current property owner will sell, and Patrick will no longer be shielded from the rent inflation. It’s the cycle of life that I’ve witnessed over and over again in the last decade.
Based on my experience, it’s a matter of time before the kids of Patrick’s current property owner will sell, and Patrick will no longer be shielded from the rent inflation.
I gave up a long time ago to believe things for the avg joe will get better. They get worse every year instead.
This is survival of the fittest. Brutal reality. It’s still much better here compared to living in any other country though.
Rubicon says
This is survival of the fittest. Brutal reality. It’s still much better here compared to living in any other country though.
Said Marie Antoinette.
Keep in mind Buffett is part of the WEF Schwab crew, which means they want to push people to own nothing and you will be happy. I'm not say he's wrong, but there is broader motivation at play IMO.
Warren Buffett's $31,500 House Is Now Worth $1.44 Million But He Says He Would Have Made Far More Money By Renting Instead
https://www.benzinga.com/real-estate/23/08/33577953/warren-buffetts-31-500-house-is-now-worth-1-44-million-but-he-says-he-would-have-made-far-more-money
Buffett continues to live in the same modest home in Omaha that he purchased in 1958 for just $31,500.
Buffet was not a billionaire when he bought that home, he was instead living on the loan from his father-in-law. At the time, that home was in Omaha's most exclusive neighborhood.
Notice how it is fenced off as if it is a museum. Unlikely he really still "lives" there.
Warren Buffett's $31,500 House Is Now Worth $1.44 Million But He Says He Would Have Made Far More Money By Renting Instead
https://www.benzinga.com/real-estate/23/08/33577953/warren-buffetts-31-500-house-is-now-worth-1-44-million-but-he-says-he-would-have-made-far-more-money
Housing only goes up in the longterm.
Rubicon says
Housing only goes up in the longterm.
So does the stock market, and at a consistently faster rate.
So does the stock market, and at a consistently faster rate.
"I paid $426k for my house last year, now it's worth $370k"
https://www.youtube.com/watch?v=h6zdBKVzsIU
I agree. If rents and mortgages are roughly the same, why rent if you have the down payment?
I have nothing against stocks and invest in them myself but I don’t get how you can compare the two as if they were interchangeable. You have to live somewhere. I would never rent and invest in stocks because I think that’s a better investment.
I bought a brand new house and my PITI is lower than someone renting a 3B room
House. Imagine how the picture looks like in a decade from now. Rents keep going up while my PITI remains the same.
It's different than stock trading for sure, hard to compare.
Its interesting as housing over the last 20 years particularly has been viewed as an investment asset. I wonder if this, combined with zoning policies is what has caused housing to become unaffordable
Don't forget the AirBnB effect.
GNL says
Don't forget the AirBnB effect.
“The average number of occupants in each home fell, while the average size of a new single-family home ballooned - from just 909 square feet in 1949 to 2,480 square feet in 2021. In 1950, 15.7% of U.S. homes were overcrowded; by 2000 that number had fallen to 5.7%.” - Interesting statistics
Look at the housing starts and the typical as well as minimum size per square foot. Seems like I've not seen a detached home or a townhome less than 1500 square feet.
If not the developers deciding this, then the local government (i.e., zoning) is the reason for this.
There are many places where you cannot build a home, per regulations, smaller than X. I believe it's to keep home prices, and therefore property taxes, high.
Leverage helps.
1337irr says
Leverage helps.
That is there is very little chance to fail as a residential landlord.
ad says
That is there is very little chance to fail as a residential landlord.
It depends on whether the rent covers the cost of owning. If someone pays more than the rent can cover, they are likely to fail.
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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net
Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.
Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.