patrick.net

GNL says

I'm just going out on a limb and predicting that house prices will stay elevated for a long time. Loooong time.

How? Who's going to pay those prices?

How can they?

I can't believe that after all the data about income-to house prices ratios and undeniable demographic trends ppl here still refuse to accept reality.

But then again, there's Coastal Wookie, so...

In the past I bought a condo on Sand Key, Fl on the beach. I purchased it from an engineer that had places around the world. Upon closing he shook my hand and said “congratulations, you bought a million dollar view, and you're gonna pay for it!” 6 mos later the assessments started rolling in. 20k, then 5k, then 5k. Fixed income seniors were bailing left and right. 7 years later I doubled my money at got out.

SharkyP says

In the past I bought a condo on Sand Key, Fl on the beach. I purchased it from an engineer that had places around the world. Upon closing he shook my hand and said “congratulations, you bought a million dollar view, and you're gonna pay for it!” 6 mos later the assessments started rolling in. 20k, then 5k, then 5k. Fixed income seniors were bailing left and right. 7 years later I doubled my money at got out.

So he was wrong, correct?

MolotovCocktail says

But then again, there's Coastal Wookie, so...

You saw Patrick's recent map post that proves my point on values. You guys live in a different world. It's 2025 and you can make the same amount in most parts of the country. Coastal it gets to 10X income. I agree that's happening. The center of the country you can get 3-5x income to price no problem unless you're working at McDonalds. Even then you might pull it off.

Fact is I could move from LA or SF and buy the same house for hundreds of thousands less, maybe a million. LA to Austin. Yes that means LA prices will eventually drop. Austin will rise, but from a lower baseline value. Same thing for NYC retirees. Sold their expensive places and bought cheaper in the south. It drags down the average and median and everyone freaks because I think we all lived through the housing crash.

It's high priced markets correcting, not crashing and actually lower priced markets are booming. So the median and average sales price goes down nationally. It's movements from cities to suburbs and rural. It's not a crash. With higher (normal) interest rates people are moving to lower cost of living place and work from home. This is basic stuff.

I get why city and coastal people would be upset. Values there are dropping. I'd make the move now. It's only going to get worse as millennials have school aged children and get their kids into better schools away from city centers and coastal areas.

My crew of buddies all 90% work from home. Maybe 10% are blue collar, but they do well for 30-40ish. They can live in cheap homes in the midwest. Hell two of my best buds live in Gallatin county, MT with average price of $700k. They both bought house for $280k roughly. This excuse that housing is unaffordable generally comes from people that don't make money.

WookieMan says

I get why city and coastal people would be upset. Values there are dropping. I'd make the move now. It's only going to get worse as millennials have school aged children and get their kids into better schools away from city centers and coastal areas.

Only about 3% of homes in the Bay Area are bought/sold each year. (Look it up if you don't believe me). It means the dropping values are a Big Yawn non-event for those who've owned, which is the huge majority of us, for more than a few years.

What we're upset about is that in spite of the recent declines our kids and renter friends are still priced out. For all but a few of us, we desire a much more huge drop.

By your logic, It's only going to get worse   better with a more massive drop as millennials will be able to afford to have school aged children and get their kids into better schools away from city centers and coastal areas.

B.A.C.A.H. says

By your logic, It's only going to get worse   better with a more massive drop as millennials will be able to afford to have school aged children and get their kids into better schools away from city centers and coastal areas.

Overall I think we're in agreement. Problem is price drops result in less tax revenue. That equates to worse schools. You've mentioned before the foreigners will fill the void, but that's a CA thing.

My point on all this is cities and coastal areas are dying. Even boomers are buying in my town and getting out of the suburbs at least. Millennials are buying leaving high end suburban and Chicago. They will never go back. A few might have a studio crash pad I suppose, but you gotta be making $200k plus for two properties and do it as a part time vacation rental.

I've had my fun in cities and mid sized cities, but they're going to get smashed as rural and small suburbs boom.

SharkyP says

In the past I bought a condo on Sand Key, Fl on the beach. I purchased it from an engineer that had places around the world. Upon closing he shook my hand and said “congratulations, you bought a million dollar view, and you're gonna pay for it!” 6 mos later the assessments started rolling in. 20k, then 5k, then 5k. Fixed income seniors were bailing left and right. 7 years later I doubled my money at got out.

One of the better DeSantis reforms is buyers must be provided Condo Assoc minutes and budgets going back quite a while.

Guy probably knew the Assoc was about to approve a buncha assessments.

90% of the Condo stuff in Florida is because Seniors kept delaying maintenance for many decades, and think that Concrete, Brick, and Steel buildings last forever without repairs. Salty Sea Air is a bitch and Limestone is worn down by slightly acidic rain, especially if there's a massive weight on it.

PanicanDemoralizer says

Guy probably knew the Assoc was about to approve a buncha assessments.

Yep you ask as a buyer all the information as well as if there is an upcoming vote (in that year) of a special assessment

and you also try to see if they are siphoning from the reserves

and get a feel for the total or big picture as far as not just the regular assessments but also how well they fund reserves, how well they maintain the property, etc

WookieMan says

You guys live in a different world

Yes. The Real World.

...and this ain't it:

WookieMan says

My crew of buddies all 90% work from home. Maybe 10% are blue collar, but they do well for 30-40ish. They can live in cheap homes in the midwest. Hell two of my best buds live in Gallatin county, MT with average price of $700k. They both bought house for $280k roughly. This excuse that housing is unaffordable generally comes from people that don't make money.

WookieMan says

I've had my fun in cities and mid sized cities, but they're going to get smashed as rural and small suburbs boom.

Yes, no. Exurbs have been the fastest growing areas for 25 years now. But when demographic/immigration reductions happen, towns get abandoned and the large cities become sponges. That's because it doesn't take much depopulation for the local services to shut down, thus forcing the rest of the locals to leave. Bars, medical clinics, restaurants, police, grocery stores.

We'll see if the exurbs can absorb this 'collapse flight' instead of just the cities. I am guessing many will.

MolotovCocktail says

Yes. The Real World.

...and this ain't it:

WookieMan says
My crew of buddies all 90% work from home. Maybe 10% are blue collar, but they do well for 30-40ish. They can live in cheap homes in the midwest. Hell two of my best buds live in Gallatin county, MT with average price of $700k. They both bought house for $280k roughly. This excuse that housing is unaffordable generally comes from people that don't make money.

I guess I don't hang with losers?? A male or female in IL can have a blue collar job flipping a stop/slow paddle and make prevailing wage. $40/hr. Overtime is up to $90 per hour which there's a lot of here because of weather conditions. Any John/Jane Doe could move to IL and make $90-100k AND collect unemployment when they're laid off in the cold months.

Dual income household at say $180k X 3 is a $540k home within reason. If you have more down payment could be $600-800k. Times have changed. $600k in IL is a beautiful home 9 out of 10 times. The taxes will suck though.

My reality is not yours. Yours is not mine. 31% live on the coast so 69% live inland. My life is the majority. So yes, you don't live in the real world. You live in an inflated pile of trash. Shit on the streets. Below average coast. I'll give AD one on this though in PCB, the beaches are top notch and emerald water on a calm day. All other coasts are trash.

WookieMan says

I'll give AD one on this though in PCB, the beaches are top notch and emerald water on a calm day. All other coasts are trash.

I noticed rent is now $2000 a month for 3 bedrooms, 2 car garage within 2 miles of the beach in Bay County, Florida. That was what was being charged in mid 2021. Same 3 bedroom townhome could sell for $250,000.

And starting wage for hospitality and service workers is now $16, so its gone up about $3 over last 3 years. So a dual income couple earning $16 each could afford renting as well as afford buying that townhome.

.

I'm thinking 2015. $180-200k and $1400-1500 rents.

Buyers needed.

(These are state thoughts, not specific area thoughts)

WookieMan says

I guess I don't hang with losers??

In Dumfuq, IL?

And is that what you tell yourself to rationalize for being so wrong?

WookieMan says

31% live on the coast so 69% live inland

Wrong. Majority of US population live in coastal states, as you have stated yourself

MolotovCocktail says

WookieMan says
31% live on the coast so 69% live inland

Wrong. Majority of US population live in coastal states, as you have stated yourself

I'm talking price declines when I say coastal. Jesus christ it's like talking to a wall. National metrics go down because of coastal areas that are higher priced. Someone in Iowa gives no shits if Phoenix or Denver prices drop 10-20%. You haven't gotten the point because you're renting in a high priced area and are jealous of owners because you're not one.

When prices go down in LA, Seattle, NYC, SF, San Diego, Tampa, etc it makes everything look worse than it actually is.

How many years did you work 40-60 hours per week in real estate? How many properties have you owned or invested in? How many have you bought and sold? How many of those areas have you visited, especially dumb fuck IL or say WI? I'd bet you haven't been to IL, not even for a layover at the airport. I've been up and down all the coasts in this country and all lower 48 states. I know nothing though.

When did 31% become a majority as well? https://www.middlebury.edu/institute/academics/centers-initiatives/center-blue-economy/about-center-blue-economy/cbe-news/coastal#:~:text=In%202022%20over%20131%20million,34%25%20of%20total%20U.S.%20GDP

WookieMan says

I'm talking price declines when I say coastal. Jesus christ it's like talking to a wall.

Prices don't live on the coasts. Living things do. People, pets...Housing Experts with Cognitive Dissonance issues they try to resolve by posting comments like this ^^^^.

You are talking to a wall. The Wall of Reality That Won't Take Wookie's Bullshit.

WookieMan says

How many years did you work 40-60 hours per week in real estate?..I know nothing though

Yep. You might want to talk to a shrink about that.

WookieMan says

you're renting in a high priced area and are jealous of owners because you're not one.

Who said I rent? That IS ALL made up bullshit in YOUR HEAD that you needed to construct to maintain the psychological projection you need to engage in.

MolotovCocktail says

Who said I rent? That IS ALL made up bullshit in YOUR HEAD that you needed to construct to maintain the psychological projection you need to engage in.

Complaining about housing prices is a tell. You rent. Doesn't take a detective.

WookieMan says

Complaining about housing prices is a tell. You rent. Doesn't take a detective.

So again: 1) You make shit up in your head. 2) You claim that is proof you are right.

So EVERYTHING you claim to be truth is now suspect. Everything. Because you imagine shit up in absense of facts...and then expect the rest of us to play along in Imagination Land.

Also, did it ever occur in your imaginary world that one can own AND fucking rent, eh?

Noooo? Gee! Didn't take a detective to figure that one out.

MolotovCocktail says

I have seen that trick before. Very soon they will drop the price to $1.225 million and claim a "$225,000 price drop" in the listing.

HeadSet says

I have seen that trick before. Very soon they will drop the price to $1.225 million and claim a "$225,000 price drop" in the listing.

Not you specifically, but people don't know the realtor racket. We would do $1 prices cuts to get the listing bumped in buyers MLS feeds from their agent. We put it in the listing agreement and would do it once a week. So that buyer with a search would keep seeing the property weekly. $225k price drop is a bad look for a realtor. $20 over two months is a nothing burger. You just keep seeing the property with tiny cuts. Eventually you catch someone new. No different than fishing.

Other brokers hated us for it, but it got us a showing 1 out of 10 times. Get someone in the door and sell it. Seller signed off on it and we'd have to back it up and always had documentation. Hated my boss/owner, but it was a damn good strategy. Just annoying because I had to do it every week with 80 listings.

WookieMan says

Complaining about housing prices is a tell. You rent. Doesn't take a detective.

Not a detective. Just someone who (arrogantly) thinks they know what is inside the mind of all others.

I am not a renter, but me and many other non-renters like me complain all the time about the high house prices. Because it's making life miserable here for almost everyone.

B.A.C.A.H. says

I am not a renter, but me and many other non-renters like me complain all the time about the high house prices. Because it's making life miserable here for almost everyone.

That too. But his imaginary world is the real one.

Even in that world, his logic is flawed. As an owner, wouldn't one want as large a buying pool as possible when you want to sell in the future? And that isn't happening in the real world and is only going to get worse as things stand.

B.A.C.A.H. says

WookieMan says
Complaining about housing prices is a tell. You rent. Doesn't take a detective.

Not a detective. Just someone who (arrogantly) thinks they know what is inside the mind of all others.

I am not a renter, but me and many other non-renters like me complain all the time about the high house prices. Because it's making life miserable here for almost everyone.

Hey WookieMan, my remark got three "likes" within a couple hours of posting. How many did yours accusing MolotovCocktail of being a (jealous) renter get?

WookieMan says

We would do $1 prices cuts to get the listing bumped in buyers MLS feeds

How about a phony price reduction so a listing can claim a new $39,000 cut?



Notice that on Aug 20, they raised and lowered the price by $39k and now the listing flags and advertises a "$39,000 price reduction."

B.A.C.A.H. says

Hey WookieMan, my remark got three "likes" within a couple hours of posting. How many did yours accusing MolotovCocktail of being a (jealous) renter get?

It's good to get back up! Thanks.

Notice how he shut the fuck up now?

Also see: https://patrick.net/comment?comment_id=2200738

https://www.redfin.com/news/home-price-index-july-2025/

Home Prices Tick Down 0.1% in July, Fall in 39 of the Top 50 U.S. Metros

MolotovCocktail says

It's good to get back up! Thanks.

Notice how he shut the fuck up now?

Have a life. Sorry you guys don't.

Back when this site first started (2002 ?) there was a bubble forming. It started on the coast but became a national phenomna. Most if not all of us lived it.

Now there is another more massive bubble (see Case Shiller Index chart below) but as I stated earlier those expecting a crash a la 2008 will, in most metro areas, be disappointed.

I'm not going to say "this time it's different" more like "history doesn't repeat itself... But it rhymes".

Now if the economy tanks and distressed listings start to tick up, that's a game changer. But even then, in most liberal costal states, eviction takes years, not months, so it would be some time before we see the impact... Which is why I'm expecting a slow deflation in prices and not a sharp decline.

I don't have a feel for the middle of America or the south, so your millage may varry, but it seems prices everywhere are "elevated" to out it politely.

And should the fed start to ease rates, that will help keep prices inflated a bit longer. (Extend and pretend). The one thing the index doesn't track is the volume of sales. That should continue to decline until the market softens to the point that wages catch up and first time buyers can get back into the game.

It was hard enough buying a house in 2008. I can't imagine having to do it in this market.

Case Shiller Index

GreaterNYCDude says

(see Case Shiller Index chart below)

Great chart. Curious to see this in real terms vs. nominal.

Most areas barely built anything the last 20 years. While it's not the desired 2.1 birthrate, Millennials are forming families late and can no longer stay in mom and dads house, yet have had 15 years to save up with no rent, kids, probably any bills. Your 30-35 year old just starting a family has money saved. Boomer parents died so some might have inheritance.

Fact is there's going to be a transfer of wealth to younger people. There's loads of cash that has been sitting on the sidelines from what was once the largest generation. It will level out, but in most places off the coasts it will go up and is going up. I live in a small town, people don't want to be in cities or even large suburbs and most can WFH. There are 25 $400k homes being built as I type this in a small town that only has 800 homes total. Literally 100 trade guys here daily. I mean someone has the money to pay the workers and someone has the money to buy the homes.

Fact is most media sites reporting on real estate are creating click bait fear porn and people are eating it. Also time of the year. A lot of people in most the country get seasonal wages so people start freaking out as winter comes. It's why October is usually the worst stock market month historically. People start getting laid off of seasonal work and those that invest stop. So jobs might look bad at some point, but it's all normal and happens every year. UI numbers will go up as they always do.

If Trump can get 2-3% of companies to shift at least some overseas jobs back here it will all be fine. Housing will be fine. We'll see more building. I go by what I actually see. Not news stories that by default have to be negative for them to generate revenue and stay afloat. Reality is they don't have to be right at all, no one holds them accountable. Get interviewed by Chicago's top real estate reporter.... he didn't know shit about real estate, he just gathered information, some of it from others that also didn't know shit.

Data is king, but even that lies. My house never hit the MLS. Rarely if ever does a person reporting on real estate go and do the work to get the county sales records. They get the MLS data. And back to the Boomers, there's going to be transfers that won't be the easy public info you can get. Is it public records yes, but you won't be notified if a home sells if you don't live around it. NAR or whoever probably doesn't know about 10% of sales that didn't hit the MLS is the point.

Loan applications are another thing. They will go down over the next 5-10 years, but the houses will miraculously still sell. It's called cash. This is the first time in modern history this has happened. 2008 was 100% piss poor lending to people that couldn't afford homes and the prices went up. Literally could just raise your hand and get a loan. That's not remotely the way it is now. And builders have always offered rate buy downs, they just raise the price so as houses sell they can raise prices higher for the next sale. Could cost them $10k on one house but they get $10k more on the next sale.

We're on the path for a sideways trajectory. So to the OP from a while ago, we are at a peak. No one has presented one indicator that there will be a crash though. Case Shiller is a national data gatherer. Cities will lose, but suburban and rural will thrive. So that specific graph in comment 6919 will go down from NYC dude. If I sell my $500k 2/2 condo in Chicago and move to a suburb or rural and get a place for $400k, as a whole it will look like prices went down. BUT the price outside the city are rising. This is why national data is trash or even statewide. I wouldn't want to be owning in a city at this time is the overall point. Rents I don't track or really care about. Someone else can comment on that.

WookieMan says

Have a life. Sorry you guys don't.

More imaginary thinking ^^^

What’s a stay at home drunk?

Why Buy when you can Rent at a massive discount?


With less worries about sudden double digit jumps in tax and homeowners insurance?

DemoralizerOfPanicans says

Why Buy when you can Rent at a massive discount?

That's the crux of the matter. Would nice to see this graph with the x and y axis so we can see what time frame it covers, but your point is taken.

It will be interesting to see what happens to rents on the go forward. If they continue to go up 3% to 5% per year, while the housing market stalls, at some point, probably 5 years out, you reach equilibrium again.

DemoralizerOfPanicans says

Why Buy when you can Rent at a massive discount?


With less worries about sudden double digit jumps in tax and homeowners insurance?

You can't be kicked out as long as you pay the mortgage. Total uncertainty which is especially F'd up if you have kids in school. Likely constant moving. Your landlord has health issues and stops paying the mortgage. They stop paying taxes if owned outright. Can't do anything to the place, you're stuck with what was there 9 out of 10 times.

The beauty of ownership is answering to no one besides taxes (all the time) and insurance when you have a loan. Your landlord has the full PITI baggage and can pull the rug out under you if they hit hard times. Or you do and they evict you.

You're in FL I believe so I don't know that insurance market. But doubling seems extreme. Taxes doubling are capped, I don't think that can happen in most states legally. There'd have to be a referendum for whatever the reason is on property taxes. Doubling on property taxes though, mind you I live in IL number 1 or 2 on the highest property tax states, I don't think I've ever seen that.

At the end of the day you can make extra payments owning. Eventually the principle and interest go away. Renting you're paying it all for someone else. Sure it might be less up front. But at some point that $2,500 rent vs $3,000 owning will change to $3,500 renting and $1,000 owning. And tax free gains up to the limit. And no one said you still can't invest owning so that argument is kind of weak.

Fact is I'm at the age where owning a home outright at retirement age is mega beneficial. Start getting retirement money penalty free and some of it tax free for roths taxed on the 401. Our cost of housing could be covered by SS alone. Groceries as empty nesters would a big nothing burger with about $5-7M in retirement funds. $150k per year at 3% safe rate and not drawing down the principle/amount in the retirement account. Then layer on the SS money. Lower gas prices and wear and tear on cars. I have a soccer game that is an hour away Monday one way. That shit stops in 6-7 years. Then the extra payments start.

The rent vs own question really only makes sense in high COLA's. Most the country it's pretty trivial the difference in the monthly nut. I'll pay a little more to own either way. The big factor is income to price. If you're going 5X or higher, you're an idiot. That's what most do. Then there's the fact very few renters save the difference. Buy a house you can afford or move to an area you can afford. Then people don't even have to get into this debate.

WookieMan says

3% safe rate and not drawing down the principle/amount in the retirement account.

If inflation exceeds 3%, no bueno. But the reality is, if you are 65 and have $5-$7 million in retirement funds, you’d be hard-pressed to spend it all before you pass on to the great assisted living community in the sky.

What % of 65 and older people have 5-7 million in retirement funds?

Glock-n-Load says

What % of 65 and older people have 5-7 million in retirement funds?

Not most. I will. Get to working. Should be 10-20% between retirement funds and inheritances. I could be way off, but if you started early it's pretty easy if you lived frugally. If you waited, you're likely screwed.