Why is the housing market so high reddit

Why is the housing market so high reddit. Jan 23, 2024 · As a consequence, even if the housing market gradually unfreezes as mortgage rates slowly decline from 2023's highs, the hottest housing markets in 2028 may look a bit different from early 2024. They'll (generally) only go down when more housing becomes available. If you did not buy a house before 2022 you are essentially screwed in the current real estate market. A home at that price would cost about $2,868 in monthly principal and interest, assuming a 20% It claims to help landlords “outpace“ the market. Reply reply. That said, being a house is going to be tough for many moving forward. This is also corroborated by sellers and real estate agents who say that houses are being bought up immediately after going on the market, with buyers often offering cash and more than the asking price. Investment vehicle because of the high liquidity we had earlier from low interest rates. Certainly A Factor but only the factor. This is the only answer. People need a place to live. Landlords can basically just increase the rent whenever they want. For instance, in 2000, the median household income was $66,248, the median home price was $165,300, and interest rates were at 7. The average is closer to 8 years, the median is 13 years. Or I could be totally wrong! Nobody knows! The government is over $30T in debt and money isn’t actually real! . The market is already dipping for certain housing classes and locations. The reason why you can’t buy or sell quickly typically are there are closing costs which can account for 5%+ in markets which for a 240k house is around 12. This is a contrarian viewpoint and I'm ready to have dirt kicked in my face. Literally no one knows. ThaneKwappin. The price of flats in London is already going down, for example. In addition to the people who typically would buy a home in a given year, people thinking of doing so in the next couple years moved up their plans because of work from home, remote learning, desire for a yard, etc. In analyzing the housing market, it's crucial to factor in the ratio of median home price to household income, as well as interest rates. Interest rates might not come back down for a long time but prices eventually will. No brainer right, since rents are so high and your mortgage is so low. 1. Historically, you could be waiting another 90 years for a 2008 style crash. They could also repeal with a period of exempt status. 75 increase to interest rates on a loan of of $450,000. And prospects of the city are looking very good like Bangalore once upon a time. Demand will be entirely dependent on the location. So if even Redditors just want the unsustainable big detached housing system to continue forever but magically cheaper, then imagine what other less affected people think of housing reform. have past legislation to help the housing situation that will curb AirBnB to only shared dwellings and not independent dwellings, with a financial punishment of up to $3000 a day for violators. I think the reason for this is that the area didn't expe Nov 28, 2023 · Divorced and separated couples are facing their worst nightmare: sharing a house with the person they want to get away from. Best. We aim to foster an environment where everybody feels safe and welcomed and where people feel encouraged to have healthy and productive discuss. com rent-or-buy calculator shows home prices averaging $550,000 in central Durham. I am long on cash currently for the next 12 months with a lease through July 2023 at $1450 a month for a two bedroom apartment. I have been observing the real estate market (purchase of residential land) in Panchkula for some months. If you locked in a 3. Most Metro areas are closer to $400, $450K for decent houses, or more. C. So values aren't going to matter in that case. News Housing Market Index , an interactive platform providing a This isn't exactly a refutation. Better to find a more affordable home in an outlying area like Pierce, Snohomish, or Kitsap while financing is available. This is part of our policy to maintain a high quality of content and minimize misinformation. The housing supply is still low enough that prices are staying high as rates increase, which dissuades other, current owners to sell because they would then be on the hook for paying a record high price at a higher rate than they most likely refinanced their current mortgage for and only people who really need to sell are going to be listing unless they already have their future housing Yeah no, Chicago is still way cheaper. Housing materials are inflated. Ranging from $600-$800K, all three of them accepted offers $100K over the asking price. This is the first time I am looking at real estate. It is brutal. So the value of a house changes a lot based on demand. It is all just a symptom of decades of shortsighted and delaying policy by Australian federal and state Governments that was designed to inflate and grow property as an asset class. After effects of Covid and people generally want to be more safe and secure a home. A "crash" (greater than 20%, broad scale decrease in housing) has happened two times in the history of the country; the great depression and 2008. That’s a tough ask. Full gut, mid to high end finishes. S had a housing crash in 2008, Canada didn't. So Canada is looked at as a "safe" housing investment. If the median was 7, then yes, it would mean half stay in a home less than 7 years. The average homeowner lives in a house for 7 years. The median price for an existing home rose to $393,500, a 4. And yet, people are still buying, unemployment is still low, and price inflation is still higher than ideal. That’s finally starting to change, experts say Keep in mind inflation is 8. In DC, pretty much the only industry the federal government. If anything, higher rates are still on the way. We’re bringing in 2% of the population while building barely 0. If my rudimentary understanding of the market is correct, one of the reasons the stock market goes down when interest rates increase is because some money will move out of the stock market and into bonds because the guaranteed yield of bonds is now more appealing, relatively, compared to the risk of stock market gains. Real estate not being so great in Andhra is also diverting those investors or NRIs as you said to Hyderabad. There’s not one reason why. As far as the real estate market in Florida being in trouble? Tell that to the legions of Millennials that want to buy a home, but can't because the prices are so high. . We have to know there is there not a single tool for the FED or anyone to simple control the housing market without affecting other market. Hard money cost assuming 5 months or less hold time: 14. Interest rates are low = more borrowing power = higher prices. Housing. 8. The S&P's P/E ratio is spiking, akin to that in 2000 and 2008. It was a 4 bed small townhouse with a garden that was so small you could hop from the door to the back fence. The mean rate since 1971 is about 7. We have written rules to support this aim and welcome those who want to learn and those who want to contribute. Well, the average house is now 7. But in general, yes, it seems like NY area real estate prices are still going up. Third, selling off council homes has been a disaster for social housing and those on low incomes. 8% jump from a A $10,000-$20,000 lower sales price will be mitigated by a . Ultimately, one can only control those things you're able to - earnings and expenses, including how much housing one opts for. 1% of the required housing. U. The Chinese government has outlawed many investments, but not housing. Australia has more than enough houses and units but people want houses near amenities and desirable places to live. ) Greedy banks setting customers up for failure. May 23, 2024 · Most experts consider a balanced market between four and six months. Just hoping things may slow down a bit if people reduce their spending. The housing market is like all other markets and climates: In state of continuous change. Prices have gone up 28% as of the date of this Slate article. The average is around $250k on top of the cost of buying the land and building a house. ) Government policies that prevented a crash from the dotcom fallout by redirecting money into the housing market causing drastic inflation of a bubble which would eventually become unsustainable. Main-Veterinarian-10. Even worse is the banks are fine with this idea too. Housing prices are inflated. spacehogg. This “financialization” of houses leads to a housing shortage, which drives up prices for people who want to buy a home to live in. Meanwhile, investors are buying 24% of homes, which is also a record-high. 5k (includes origination, fees, interest, etc) Rehab cost: 150k. Thus these prices are unsustainable because people can't afford them. While this oversimplifies, looking at real estate as low-risk investment is very similar to what fed the 2008 Housing Bubble, which directly contradicts OP’s thesis. Homes are not stocks, the price of homes should not be that volatile but they were. 2. 5x the median income. Which means pull in a ton of money off the backs of working people. But we have seen housing prices skyrocket. So even if a private buyer buys a multi family to rent out their mortgage is high and therefore they charge more for rent. You just keep making equity as the price goes up. Approval can take 24-48 hours depending on the time zone and the availability of the moderators. They are based on comparable wages in the area. Some day, when everybody owns a home and two investment homes, there can be a crash, because in the long run hosing is only valuable to people who Most important, however, is though the highly rate-sensitive housing market has responded to rising borrowing costs, the broader economy has not yet felt the full impact, he said. The only things we know for certain are that the Fed plans to pivot beginning 2024, housing is currently at historic highs for unaffordability, and markets tend to regress towards the mean. Meanwhile, prices continue to soar to record highs. Second, deliberately low levels of house-building over decades means there is a shortage of any property. The average person voting is doing so to keep housing density low and housing prices high. so its because of immigration and not because of the failure of economic liberal policies by the VVD. More liquidity in the money supply so people want to put their money in an investment. Microsoft was around $30 for quite a while, hit $100 a couple of years ago and now is at over $200. Falling interest rates means asset values will rise. So are you better off buying a cheaper priced I really don’t understand why housing prices decided to jump so high between 2020 and 2022 and still refuse to decline with higher rates. This is based on data sourced from several authoritative sources, including the U. I have observed that while the demand for land isn't very high, the rates are shooting up. So the only way you can fix the housing problem by asking the government to do Some thing is asking the government to limit peoples choice and strategies for investment. 4. Should’ve added that pre-pandemic there was over 13,000. Mortgage rates are Feb 25, 2024 · Many homeowners who’d otherwise be eager to sell have hesitated to shake off the so-called golden handcuffs of mortgage rates as low as 2% or 3%. Those low interest rates are turning many folks into pseudo landlords. It was built about 6 years before that. Homes as an investment vehicle because of the high inflationary environment. That, coupled with the increased interest rates, mean that supply and demand should be balancing out nicely, though it may take many quarters (multiple years) to finally get there. 5% for a 30 Fixed. We added a new kitchen and put built in wardrobes in each room. This is why so many apartment complexes get built around the country where, in the planning stage, we're promised it would help alleviate housing pressures by providing cheap housing--but two years later, once the property actually gets finished, the complex was quietly turned into "luxury apartments" as the builders throw in slightly-upgraded the lack of development did not help, but prices would still be rising even if we had double the housing stock. Fewer people will be willing to sell with higher interest rates. Inflation is going to continue killing everyone's savings/income so the fed has two options, crash the market or continue making the homeless problem worse. With housing you also have to factor in that it's a very basic need. So it becomes one of the most important long term investments for a family. That means that half of all homeowners stay in a particular home for that time or less. 73 percent mortgage rate, you’d end up paying the housing market is ridiculous. Interest rates are inflated. In the event of some epic market crash like 2008, consider than you might not have a job to be able to buy a house. Just look at March/April 2020. But as more things open up, job reports look more favorable and more money is being spent in the economy as a whole. A market is "stable" only when there are no buyers, no sellers, and nothing to buy or sell. Hopefully the markets involved shift enough for things to improve. •. See, once you've bought your house (or 10), it's a ponzi scheme. No, it would probably crash the housing market and make homes more affordable. I just sold my house, my realtor said, in the denver metro area, there are less than 1200 homes for sale right now. 3. ARV: 370+. High demand drives up prices, making it look like a good investment. Except if all these people decided to flood the market with rentals, suddenly you can’t get the rent you need to cover the mortgage. And Houston has a lot of high-paying jobs due to the oil industry and other energy-sector businesses. fed rate will stay low for very long time, at least 3 years from legit news a few months ago. a) provincial governments like B. housing market downturn will be worse in 2023, forecast Goldman Sachs. Demand far outstrips supply for housing IN DESIRABLE LOCATIONS. Rising inflation is probable, which would help "support" rising home prices without a major downturn in the housing market. People keep underestimating what Tesla growing into a 10x larger market than Apple really means in terms of valuation: Tesla's 1 trillion dollar Psychology. Feb 5, 2021 · Tim Ryan Williams/Vox. It's better to buy a home when interest rates are up. May 2, 2021 · State Labor Department Economist Neal Fried agrees. Let’s say you bought a $300,000 house a year ago, before Covid-19 hit the US. Jun 5, 2021 · Fresh housing demand from immigration will likely keep pressure on home prices, some economists say. Why is it like this? Most Metro areas are closer to $400, $450K for decent houses, or more. Reply. I've read that much of the market is being purchased by investment firms with deep pockets - say hello to your new landlord. House prices are very quick to go up but "sticky" when trying to come back down because of a variety of factors. In short, rent prices go up when (rental) housing is scarce. 75%. it is simply not possible otherwise - other stuff will Something else we do know is that housing prices are more volatile than in the past. This is one of the factors driving up home prices. Forget all the individual policies. because capitalist free market ideals will self regulate and meet demand. There have been several housing market cycles over the last 75 years, and they never crashed by 50% when the rate went up a few percent over a couple years. New York real estate is an asset class for wealthy people, so don't expect to find any good deals, especially in Manhattan. The lower end will continue to be tight because so many people have been waiting and their DPs have only grown over the past few years. Beyond the supply and demand aspect, Seattle is also in the top 3 most expensive cities to build in from a regulatory/permitting and services standpoint. Alaska’s housing market doesn’t have the makings of a bubble right now, he says, and he’s not expecting a crash. Rising interest rates means asset values will drop. "tHe HoUsInG mArKeT iSn'T LiKe 2008, HoMeS' aRe JuSt MoRe VaLuAbLe!" Aye fuckers, I live in Colorado and it looks like we are 20-30% more fucked than 2007-08. Sellers market. Compare that to Chelsea in New York where you’re more likely to spend $1,300 a sq foot, basically double. Interest rates have hardly anywhere to go but up, which while drive prices down and defaults up, both of which increase the risk with real estate investment. Behind the uneasy arrangement is the housing market. That’s not how averages work. Sellers won't sell for less. I bought a house in 2017 for £136,995. The reason why many relocated residents refuse to remain in their new residences subsidized by the national government or NGOs is that the main economic activities are located in Metro Manila and would rather live in poor conditions within the capital. So, it's the only game in town, increasing sales demand. The U. Or it could be in 57. But what has caused that huge imbalance? It’s not like we had a huge population increase in the US over the last 10 years. Area dependent. For instance, a new build high end construction in the West Loop which is near the top of the market will run you $600-700/sq ft. Seemed like prices were getting high even before Covid but of course the low interest fueled the fire. The gains have not been driven by an They can set a high price, and if you can't afford it, then they'll just rent the place to someone else. The median single-family house price in There is no sign of it so far, and it is pretty bold to predict something without any support. The best argument I see here, supporting why people believe a crash is coming, is that the median income won't buy a median house. After the 2008 crash, there should have been a flood of foreclosed housing on the market. Renting has always been cheaper in NYC. S. This makes every house on the market worth at least $250k by default, plus the value of the property and There is an easy explanation as to why the housing crisis is so bad. Reddit is by far the loudest place I know when it comes to the housing crisis, which makes sense since the userbase is fairly young and heavly effected by it. The commute isn't necessarily terrible so long as you stick to transit. Adding to this too because these companies are buying all these rental properties/houses the rent, it makes housing harder/more expensive for private home buyers. There are many reasons why. The catch-22 here is that when the housing market crashes the rest of the market does too so you're unlikely to find financing. ) Irresponsible borrowers who have no idea how mortgages work. May 10, 2023 · We would like to show you a description here but the site won’t allow us. There was practically a collapse in housing prices (and stock market) because of the fear of covid. Australia needs more regional cities with desirable aspects (retail, restaurants, culture, beaches Adequate housing and reliable transportation go hand in hand. Even old Gen Z are late 20s, which is still rather young for many to buy a house. Feb 25, 2024 · Many homeowners who’d otherwise be eager to sell have hesitated to shake off the so-called golden handcuffs of mortgage rates as low as 2% or 3%. At the same time, physical property and housing is almost always growing in value. The investment firm benefits from the low interest rates as much as anyone and won't mind at all if they can drive up the price of heir own holdings by engaging in bidding wars, some would call this having your cake and eating it too. This equates to a home price being about 2. I put in three offers on three separate houses in Nassau County last weekend. “That doesn’t mean US housing starts are at a near 20 year high, and have been on a steady uptick since the financial crisis of 2008 (where homes effectively stopped being built). Many buyers are bringing a lot of equity There are huge barriers to buying because of the high price of property which means you need £10-20k to buy. Telsa is go up very quickly, this year it finally hit $100 and is now $400 and rising. Lack of inventory + seasonality in the housing market. metaopolis. Wowzers. This is why similar houses in different parts of the same area can have wildly different asking prices. Because federal pay scales are not based on cost of living. We sold it in 2020 for £169,995. Higher home price = higher monthly mortgage pay= higher rent charged by owners to cover mortgage +profit. That plus a slew of people who allowed themselves to believe either a) rates would go back under 5% or b) house prices would drop 20+% finally realized they were wrong. The prices go up, people make money, they get confident, so they borrow money to buy more, the price goes up more, people think getting rich is easy, all they have to do is keep borrowing money and buy houses At the start of this year it was about $80 after already rising quickly in previous years, now it's nearly at an all time high at $116. They may have to rent for 6 months - 2 years while the market stabilizes however it would resolve a large portion of the problem. If your comment does not appear after this time, it is possible that it did not meet our quality standards. However, point 1 illustrates why this is not about artificially inflated demand, but about the relative supply and demand in a market where - due to WFH - there is a race toward space and good locations. 6% houses going up 7% would actually mean a decline in real terms. People need to live somewhere, and so they're forced to pay the higher rent costs. Ellabee57. The story is similar if less extreme in Brooklyn, where the average new rent declined about 10% from the February 2020 level of $3,442 and now is at $4,087, or 20% higher than before the pandemic. Aug 4, 2023 · In June the average new lease was a whopping $5,470 monthly, an eye-popping 30% higher than in February 2020. A home at that price would cost about $2,868 in monthly principal and interest, assuming a 20% So the value of a house changes a lot based on demand. Interest rates and asset values are inversely related. That leaves out the fact that first time buyers with median income are just a small portion of buyers. For these reasons, it is safe to assume affordability will improve in 2024. Stimulus, pause of student loan payments also helped people build up down payment funds which allowed more buyers into the market. That’s finally starting to change, experts say I understand that there has been an increase in demand and lack of inventory. It always heats up in late spring. Apr 1, 2022 · For more than two years house prices have been increasing faster in metro Phoenix than in any other city in the S&P/CoreLogic Case-Shiller Home Price Index. With a 5-year time horizon Tesla forward P/E is 12x, cheaper than any other megacap - and EVs are still less than 5% of the auto market, so 20x growth runway left until the EV transition is done. The result is a homeless crisis- that will get much worse before it gets better- and insane housing price inflation. Like 4chan found a Bloomberg Terminal. 6% is the core CPI number - depending on your market, housing is likely much higher than that - but your point remains true! some markets they will see real values decrease while nominal values increase with inflation. Jul 27, 2021 · First, the facts: From April 2020 to April 2021, new home sales rose 50% and the median price rose by almost 20%; sales of existing homes increased 42% from May 2020 to May 2021 and existing home People got addicted to free money, but that doesn't mean the sky is falling either. Or it could be in 20. Personally, I've never seen so much greed from the housing market OR the stock market that we've had in last two years, which makes sense because money was pumped into the system. the issue is that the area is desirable to people who have a lot more money than the people who already live here. Only 26% of homes are being bought by first-time buyers, which is the lowest percentage in 41 years. There is a MASSIVE amount of people who are frothing at the mouth for any opening into the housing market in the Bay Area. This is a big deal. Even the article says (contrary to the headline) that prices continue to rise. you know, despite the people building and selling and renting the houses out making more money if there are less available houses. Probably because people are using houses as investments, rather than as places to live. In some places there are limits to how much they can increase rent every year or whatever, but the average rent still increases MUCH faster than average income. Feb 16, 2024 · A Realtor. the literal only way to prevent them from crowding out the poor is rent control and public investment in housing. So more people invest. 5x the average income, meaning ordinary Americans are completely priced out of buying. My realtor said would likely list at 415k and sell for 400k, but using 370 to be safe considering we will be selling in fall. 5k that you’ll need to recover on top of any maintenance. xq kg mw hv vp yg jo xr ql fm