patrick.net

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.

WookieMan says

Just annoying because I had to do it every week with 80 listings.

Interesting, I hadn't heard the $1 cut strategy to manipulate the MLS.

Did you do it manually? A good tech guy could automate that so you wouldn't need to do anything.

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.

I am also a homeowner that does not like the rapid rise in house prices. I am concerned about how the younger folks will afford to buy. Another issue is the rising assessments and thus increased taxes.

Patrick says

BigSky says

The acid test would be to find any period in the last century where if anyone who held a home for 10 years actually lost money.

Detroit, MI (pop. ~630,000): From 2006 to 2016, median home prices fell from $73,479 to $45,000, a ~38% decline, driven by the housing crash and industrial decline.

Cleveland, OH (pop. ~370,000): From 2005 to 2015, prices dropped from $112,800 to $66,000, a ~41% decrease, impacted by foreclosure waves post-2008.

Flint, MI (pop. ~95,000, borderline midsize): From 2000 to 2010, prices declined from $67,900 to $50,200, a ~26% drop, due to economic stagnation.

Las Vegas, NV (pop. ~650,000): From 2006 to 2016, prices fell from $317,000 to $200,000, a ~37% decline, hit by the subprime crisis.

Good point. I can see Detroit, but I am surprised by Cleveland. How about just California? Has anyone who bought and held a house for 10 years in the Bay Area or even the rest of the state lost money?

Patrick says

A good tech guy could automate that so you wouldn't need to do anything.

You can automate input into a portal you do not control? I am not a programmer, but I thought something like an MLS would have a dedicated entry form and you would not have direct access to the database to run a private update routine.

BigSky says

Patrick says

A good tech guy could automate that so you wouldn't need to do anything.

You can automate input into a portal you do not control? I am not a programmer, but I thought something like an MLS would have a dedicated entry form and you would not have direct access to the database to run a private update routine.

They tracked our MLS by ISP and IP address. A 3rd party logging in even via program would at least need to be close or both use a VPN with the same location.

Knew multiple agents/brokers that got their access cut fooling around with MLS logins or sharing logins with clients/friends. As much as I hate Realtors they do take the data pretty seriously.

The $1 thing was my bosses idea. Agreements were signed on every listing, but getting a listing refreshed with nothing burger price cut got it in front of new people or existing people desperate to buy. Shady, but legal.

BigSky says

Has anyone who bought and held a house for 10 years in the Bay Area or even the rest of the state lost money?

Mostly, not yet. But ppl are fools to think that will continue. Yet many do despite the obvious signs.

Know what one of the hottest markets in the US was in 1955? It was the 'silicon valley' of its era. Highest per capita incomes, too.

Detroit, MI.

Downtown San Jose was awesome in the 1990s and 2000s. Now it is an even bigger shitshow than it was in the 70s. Like Oakland is now. Almost indistinguishable.

WookieMan says

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.

Condos and assessments or buyouts.
Unpaid water bills - some guy in St. Pete got $2000 in water bills he never knew over a year and was 30 days from a lien, despite him turning off the water completely to the inherited house. In many places, the water and sewer are linked, so you can be charged for sewer even if you're not using water.
Double digit % increases in Property Taxes, Water Bills, etc.

A town around Salt Lake jacked up theirs 11% overnight. DeKalb (I think) in Georgia announced 10% annual increases in water/sewer for the next decade. There are some other shenanigans going on in San Diego.

Is it deferred maintenance or contractors in bed with county/city commissions striking while they can pad generously under cover of recent inflation?

Not only is the Rent vs. Buy spread too wide, but the cost of insurance, utilities, taxes have gone up higher than the official inflation rate for years now in much of the country. If somebody gets schlonged on a pension default or the costs simply explode beyond what they ever thought it would be in their lifetime.

I know people in their 70s who never thought, and rightfully so looking back 20 years from 2010 about when they retired, that they would ever live long enough to pay anything like the costs for homeownership they are paying now, on top of gas and food.

There's a lot of Boomers retiring on 2/3 last salary from the city, county, and state, and that pension money has to come from somewhere, and often the investments were underfunded despite the amazing stock market of the past 30 years. Indeed, the fine print in many government pension plans allowed them to under contribute if the stock market did well that year.

As always, the trend is your friend, until it ends

GreaterNYCDude says

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.

If it helps, I tracked this chart down but it ends about mid-2023.

I still don’t think housing prices will go down in any significant way. The only thing that can change that is build baby build. But that won’t happen because house prices are leveraged and are very important to the economy.

We have a terrible spread between the haves and have nots. IMO, that is the biggest problem.

Glock-n-Load says

I still don’t think housing prices will go down in any significant way.

They will go down at least as realtive to the GFC. Worse, because in the GFC Boomers were still in their working years, now we are getting into the oldest boomers passing on or into assisted living.

Add to it the turn against mass extreme hyperimmigration, which will take a few years to perculate fully. Immigrants, legal or illegal, generally have a few years delay before their impact on housing (buy OR rent) is felt as they tend to live with family already here or bunk up densely.

The 2008 financial crisis, also known as the global financial crisis (GFC) or the Panic of 2008, was a major worldwide financial crisis centered in the United States.

DemoralizerOfPanicans says

A town around Salt Lake jacked up theirs 11% overnight. DeKalb (I think) in Georgia announced 10% annual increases in water/sewer for the next decade

Not saving for replacing sewer and water systems 50 years after they were first built and then jacking up taxes/fees now isn't a 'shenanigan'. It's typical dumbfuk government in action, that's all. And that is before the EPA gets involved, which they have.

Also, suburbs vs mixed use make for crappy revenues to fund any of that, too.

DemoralizerOfPanicans says

They will go down at least as much as the GFC. Worse, because in the GFC Boomers were still in their working years

Exactly. For some reason ppl here are resistant to such facts, tho.

Finally, unlike the GFC there was an Obama-pushed massive build of Multifamilies throughout the 2010s and onwards, with large apartment complexes now in subrurban areas that once strictly limited them. This was not anything like commonplace before 2010.

Not only were millions of MFUs built, they were built in suburban areas and larger in SF than previous eras.

"The investors will buy them all up"

No they won't. Property Tax, Insurance, etc. has all skyrocketed, non-mortgage ownership costs have gone way up in almost every state in the Union.

The Rent-vs-Own disparity works against renting out newly purchased houses.

The ROI isn't there.

The only thing that can bring investors in is ... the rent vs. own disparity narrowing greatly or preferably reversing like during the 2010s. Which will take a collapse of house prices or a sudden demographic surge in demand that won't happen.

DemoralizerOfPanicans says

Glock-n-Load says

I still don’t think housing prices will go down in any significant way.

They will go down at least as realtive to the GFC. Worse, because in the GFC Boomers were still in their working years, now we are getting into the oldest boomers passing on or into assisted living.

Add to it the turn against mass extreme hyperimmigration, which will take a few years to perculate fully. Immigrants, legal or illegal, generally have a few years delay before their impact on housing (buy OR rent) is felt as they tend to live with family already here or bunk up densely.

When you say relative to the GFC, are you saying the % prices dropped or the actual price homes dropped to?

Glock-n-Load says

When you say relative to the GFC, are you saying the % prices dropped or the actual price homes dropped to?

Yes, a relative drop in % or more.

DemoralizerOfPanicans says

Glock-n-Load says

When you say relative to the GFC, are you saying the % prices dropped or the actual price homes dropped to?

Yes, a relative drop in % or more.

Only time will tell. I’m betting against your prediction so, it will be interesting either way.

Glock-n-Load says

Only time will tell. I’m betting against your prediction so, it will be interesting either way.

Cool. Yeah, it's definitely an inflection point. I just don't see how the current prices are sustainable, and there are no "Starter Homes". Hardly anybody has built a modest ranch in 30+ years. A handful of indy builders here and there out in the country, nowhere near demand, in quantity or location. The ones built in prior ages are too close and too desirable now, as well as expanded by former owners.

"You only are looking at houses since 2000? Come on you don't need new"

Yeah, 25-year old houses built over a generation ago.

Imagine in 1994 calling a house built in 1969 "new"

"Why I parked my Gremster right here - before I made the one car garage into the 3rd bedroom. Just look at this fine wood paneling. The Wall Oven still works great! I won't take less than $300k for this 1200 sq ft beauty. Roof last replaced in 2001, practically yesterday! The $320k 1600 sq ft brand new house next door with two additional bedrooms, USB ports right in the wall, two car garage, and 5% teaser rate for the next 2 years? It just doesn't have Wakka Wakkka Wow Wow my place has."

DemoralizerOfPanicans says

there are no "Starter Homes"

the closest I've seen to that is now "townhomes" and you fortunate enough to have a garage with a "townhome"

in Washington DC metro, back around 2002 there was no way someone on GS-13 step 4 salary could afford a "starter home" as in single family detached house with garage (3 bedrooms, 2 baths, 2 car garage) within 12 miles of the National Mall and Washington Monument (which meant about a 1-hour commute by car)

that is why there was a proliferation of townhomes built in Northern Virginia

.

DemoralizerOfPanicans says

Glock-n-Load says

Only time will tell. I’m betting against your prediction so, it will be interesting either way.

Cool. Yeah, it's definitely an inflection point. I just don't see how the current prices are sustainable, and there are no "Starter Homes". Hardly anybody has built a modest ranch in 30+ years. A handful of indy builders here and there out in the country, nowhere near demand, in quantity or location. The ones built in prior ages are too close and too desirable now, as well as expanded by former owners.

Condos are the new starter homes now.

DemoralizerOfPanicans says

GreaterNYCDude says

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.

If it helps, I tracked this chart down but it ends about mid-2023.


That does help. Thanks for sharing.

More often than not buying has been more expensive than renting, but in my experience rental units are typically smaller than most houses built within the last 30 to 40 years or so. Builders just build bigger, unless it's a condo complex.

When I bought back in 2008, I went from a 1200 ft2 2 bdrm apartment to a 2400 ft2 3 bdrm house. Yes my cost went up, but on a $/ft2 basis it was a wash.

But I still can't fathom buying a house in this market. For as difficult as it was back in the original housing bubble, it's gotten substantially more so this time around.

Wow

This is eye opening, however let's not forget that people married and pooled their resources early, so this excludes people who own but aren't married. Also people didn't see their 20s and early 30s as working and partying hard, going on vacations regularly and ear out or get uber eats. They were already saving to provide for their family. Within a more solipsistic society it's natural people own less money and less shared resources.

Boom boom boomers, bankers and builders. They priced everyone out, shit loans and too many houses built so the builders got on banks to change the loans to sell them.

2000-2010 was war, housing bust, Obama and feminism rising at the tail end of that decade. From there it's all been downhill. Men my age and younger don't want to get married. High suicide rate among males. Not that I'm looking but young girls look like whores now and many of them are fat. Plus the whole swipe left or right fake photo culture for hooking up.

Also, to be blunt, a lot of that is blacks pumping and running and a single mom generally can't afford a house. Black ownership used to be way higher.

Lots of factors, but those are just some off the top of my head. Price increases and marriage just isn't a thing anymore.

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Misc says

Case/Shiller reported a drop in housing prices today, but don't get too excited. It was a drop of about a quarter of one percent over the course of a month.

Still near the top of prices, but kinda heading lower real slow like.

Sideways. All the summer closing are done as well. After Labor Day everyone will dump their listings. Most have equity anyway and don't have to sell. Spring 2026 is the biggie at this point. Sales will go down this fall but so will inventory. So prices will stay the same and/or rise in a lot of places. No one wants to move or have showings during the holidays.

I know it's realtor talk, but everyone wants to move in the summer months if they have kids. So you have to get under contract in spring. If it's a bad 2026 spring for contracts then there might be problems. I'm not seeing it being bad, especially if there is 1-2 fed cuts. I don't see unemployment going anywhere outside of seasonal jobs in the winter which don't matter.

The expensive areas is what I'll call them now so I don't get trolled will take a hit. With the tariffs and if it really moves businesses back to the states that's another positive. The lower priced areas will rise, but national numbers will look poor 5%, not bad like 10-15% down. The transition from city to suburb or rural will look bad, but it's actually good. Except for those that live rural already. Don't bring your politics.