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https://www.nationalmortgagenews.com/news/housing-bubble-or-not-the-real-estate-market-is-in-troubleHome prices are still going to decline, and mortgage defaults are likely to rise.
It's simply the nature of a cyclical market.
"It's interesting to watch the dynamics of the market. What we see is prices rise, sales activity slows down, prices weaken and then sales pick back up," said Carrington Mortgage Holdings Executive Vice President Rick Sharga. "It's the way a housing market is supposed to behave in a normal environment. But it's been so long since we've seen a normal environment that we forget how it's supposed to work."
I would say the availability of cheap mortgages is even more important than the supply of houses for sale.
And I'd also say that mortgages are going to get progressively more expensive over the next few years.
I wouidn't short housing for the next couple years. There is always the possibility of a black swan event of course. .
If anything that will increase as all the tax cut money flows out to people looking for a place to invest it.Another by-product of artificially low interest rates.
Housing is grossly underpriced
Everyone knows that
Some people can still afford to live indoors
Plenty of value being left on the table
No, still looking passively, but can't find anything that's a better deal than renting the equivalent in the Bay Area. Also I'm getting a bit nervous/hopeful that prices are actually going to be falling around here.
I'm not in a rush and have no timeline. Certainly glad I held on to all my stocks and got that 34% gain in 2017
Patrick saysNo, still looking passively, but can't find anything that's a better deal than renting the equivalent in the Bay Area. Also I'm getting a bit nervous/hopeful that prices are actually going to be falling around here.
I'm not in a rush and have no timeline. Certainly glad I held on to all my stocks and got that 34% gain in 2017
Same boat here Patrick.
As has been covered many many times on this forum, rent:buy price ratios are smaller in affluent areas. It’s much cheaper for me to rent in affluent (Belmont/San Carlos) than to buy here.
br>I'm not in a rush and have no timeline. Certainly glad I held on to all my stocks and got that 34% gain in 2017.
most homeowners got 34% gain in stocks and home appreciations of several hundred K in 2017. The idea that renters kill it in stocks is pure fantasy. Homeowners own all the stocks too. You are an exception.
Guys, the rent vs buy analysis will always show higher appreciating areas to be more worthy of renting, and non or low appreciating areas to be more worthy of buying. You don't even need a calculator to figure that out. The secret lies in factoring appreciation rates. Go back 20 30 40 50 years, and you will see the the highest returns are in areas where your rent calculator said it's not worth buying
Appreciation is a myth unless you know you will be selling the house to move to a cheap area that didn't appreciate and never ever going to move back anywhere high demand again.
If the renter had lower monthly payments, that has to be factored into a comparison of course, but to say that appreciation is a myth isn't correct. If you do own, at the end of your life, you can reverse mortgage if you absolutely need to, and if not, your kids get to inherit a house. Appreciation matters in those events as well.
I did say most people are better off buying because they won't put the rental saving into investments. For the people that can save the roi of investment of down payment and ongoing savings can outpace appreciation, key word can. Houses appreciate in a straight line. Investments compound. It all comes down to the person's situation and a big dose of luck. Most people aren't going to sit down and pencil it out for their situation, they will just buy into the propaganda du jour.
Big assumptions like 40% appreciation in 10 years.
bob2356 saysBig assumptions like 40% appreciation in 10 years.
That's 3.5% appreciation, which is large, but not crazy for a hypothetical. If I used 2.5%, and said 30%, the same argument applies. Obviously, there are expenses to be accounted for, but the appreciation is real and directly benefits the owner whenever they choose to take advantage of it.
bob2356 saysBig assumptions like 40% appreciation in 10 years.
That's 3.5% appreciation, which is large, but not crazy for a hypothetical. If I used 2.5%, and said 30%, the same argument applies. Obviously, there are expenses to be accounted for, but the appreciation is real and directly benefits the owner whenever they choose to take advantage of it.
I think the factor that most miss in that calculation is mortgage payments are (save for property tax) fixed, while rent rises. Over longer time periods, that makes a large impact and is a big reason why buying tends to be better if one plans to be in the same house for a decent amount of time.
Investment income is real and comes in every month to be further reinvested therefore compounding. Appreciation can only be used when the house is sold. Unless you want to heloc and pay interest. Expenses are real and come directly off of the appreciation.
Taxes, insurance, water, sewer, maintenance, hoa fees, closing costs all rise. What is a decent amount of time? Is it the same in LA as fargo nd or detroit?.
It's like a frigging cult. Buy house, buy house, buy house. Whether buying or renting is better depends on a lot of variables. and luck. People who bought in vegas in 2007 are still under water.
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