Current Events > The market sucks for buying a house.

(+) Yeah! (+)

Will it get better?

Will we get legislation that bans firms, companies, corporations, non-human economic entities, ect. from owning a house?

It honestly won't get better. I have seen houses increase in pricing my entire life and I'm 48. They legitimately don't go down. They creep up year after year after year steadily.

The only thing that fluctuates is mortgage rates and people got used to them being INSANELY low compared to historical averages. They aren't even *bad* now they just aren't the stupidly low rates that were only a couple percent.

I knew a lot of people who were buying in the 80's where rates were up to like 18%. Like seriously I knew a handful of people who bought when rates were 14 to 16% then.

So don't expect houses to get cheaper. They will keep going up. I suppose it is possible mortgage rates could eventually fall to low levels again but I wouldn't count on it for a long while.

Not unless they outlaw big corporations buying up all the properties.

So no, its not going to get better. If prices and rates come down that seems like a win for the consumer, but that also means its even cheaper for the corporations buying everything in cash to gobble them up as permanent rentals.

Theres even an entire new neighborhood that was just built in my area. Great looking homes. Theyre only for rent, and its like $2500 a month. This is the foreseeable future of America: if you dont already own a house, youre very likely to never own one in many parts of the country. The other parts where theres a slight possibility are slowly disappearing.

I bought a house every older person refers to as a "starter home" and it was 180,000.

It's a falling apart former rental. The saving grace is it's in a decent area. The Zillow estimate is now over 200k.

Buy a fucking Ferrari and sleep at your girlfriend's apartment. Fuck this shit.

Hard to know when/if it will get better. It used to be that it was just the urban areas where prices were surging but now they're getting expensive in a lot of rural areas as houses in those places get bought up.

Part of it is we've been underbuilding for a long time and especially underbuilding smaller, more affordable housing. I was reading the other day it's started to become a problem even for Boomer empty nesters who want to downsize but can't because there aren't enough smaller homes on the market.

It is hard for me to feel sympathetic at the moment as I'm currently selling my rental property. Hopefully I can rejoin the CE community as a non-landlord next week. I have two offers but they're both pretty weak.

I feel you, TC. My wife and I literally put an offer on a house today and were outbid

Sucks man

What happened to the housing bubble bursting that everyone was saying to happen for years now?

archizzy posted...

The only thing that fluctuates is mortgage rates and people got used to them being INSANELY low compared to historical averages. They aren't even *bad* now they just aren't the stupidly low rates that were only a couple percent.

I knew a lot of people who were buying in the 80's where rates were up to like 18%. Like seriously I knew a handful of people who bought when rates were 14 to 16% then.

The difference being that 18% of 50k is a lot less than 7% of 400k, and that's before even talking about the ratio of the average income vs those prices at each time period.

archizzy posted...

It honestly won't get better. I have seen houses increase in pricing my entire life and I'm 48. They legitimately don't go down. They creep up year after year after year steadily.

They certainly did in 2008 & 2009. Sure, it was due to the financial system nearly collapsing due to corporate greed through monetizing bad mortgages, but it still happened.

Blbmbr666 posted...

The difference being that 18% of 50k is a lot less than 7% of 400k, and that's before even talking about the ratio of the average income vs those prices at each time period.

Sure, I'm just saying houses will never go down in price, they consistently rise over time. The only thing you can expect to fluctuate is mortgage rates. That is all I'm getting at. Houses are just going to keep going up and up and up and up. They won't be cheaper in 2030 or 2035, or 2040. Historically they have shown this.

archizzy posted...

Sure, I'm just saying houses will never go down in price, they consistently rise over time. The only thing you can expect to fluctuate is mortgage rates. That is all I'm getting at. Houses are just going to keep going up and up and up and up. They won't be cheaper in 2030 or 2035, or 2040. Historically they have shown this.

Houses increase in value relative to inflation makes sense.

Houses increasing in value by almost 100% over the last 5 years is insane, but nobody wants to mention that I guess. That is why a lot of people think there will be a crash, shit is overvalued as hell.

The_Popo posted...

They certainly did in 2008 & 2009. Sure, it was due to the financial system nearly collapsing due to corporate greed through monetizing bad mortgages, but it still happened.

Yeah, I'll give you that. One historic event caused a decline. But it isn't something I'm expecting to see again. I'm nearly 50 and I wouldn't count on one little blip like that to be something I could depend on in the future to buy a house if I was looking. You might find yourself waiting for quite awhile and I doubt the decline would offset the increase of value between now and then if it did happen sometime down the road.

I saw this posted recently. Seems relevent.

https://gamefaqs.gamespot.com/a/forum/5/5e266937.jpg

Fuck no lol

I hope it gets better. Some cities have figured out that building more homes in order to increase supply will help push down prices and limit increases. Many people push back against the policies that will allow for that increased supply though. We just gotta keep pushing for pro-housing policies such as upzoning, quicker permitting, removal of unnecessary regulations, etc.

https://gamefaqs.gamespot.com/a/forum/0/078012bb.jpg

https://gamefaqs.gamespot.com/a/forum/b/b2e87c84.png

Supposedly the problem now is that people who'd be selling don't want to give up their super low interest rates b/c they inevitably have to buy a new place and get stuck w/ the current rates.
The Fed really fucked us over in so many ways. I don't think we can ever sustain "high" interest rates long term again or at least not w/o decades of weening back to them. They're gonna have to drop the rates by 1% or more within the next few years, if only to "stimulate" the housing market. May not go back to the 2% range, though. But that's their best option right now, see-saw between lower and higher rates and every cycle ratchet the floor and ceiling slightly higher so eventually people see a 6% rate as normal again and the 2% and 3% rates age out of the market.
Of course it's the Fed, so fat chance they'll do the best option. More likely will just keep doing giant rate cuts and raises to inflate and pop bubbles b/c the chaos makes rich stock-holders more money.

SkittyOnWailord posted...

I saw this posted recently. Seems relevent.

https://gamefaqs.gamespot.com/a/forum/5/5e266937.jpg

Ok, for the house to increase over 4x in price in just 10 years is fucking insane, even in the hottest housing markets.
Must be the absolute most sought-after fast-growing area in the entire country (which couldn't have been high value before 2014 b/c it was only $185K back then). Like, even Sunbelt areas don't fit that bill (fast growing before then and didn't spike that much in a decade).
Something is missing or they're lying. Maybe the house was significantly renovated and such. Like the basement got finished, added a pool in the backyard, etc...

streamofthesky posted...

Ok, for the house to increase over 4x in price in just 10 years is fucking insane, even in the hottest housing markets.
Must be the absolute most sought-after fast-growing area in the entire country (which couldn't have been high value before 2014 b/c it was only $185K back then). Like, even Sunbelt areas don't fit that bill (fast growing before then and didn't spike that much in a decade).
Something is missing or they're lying. Maybe the house was significantly renovated and such. Like the basement got finished, added a pool in the backyard, etc...

I have no more details about that pic than you. Just saw someone post it and I saved it. No idea if it's even true, but I thought I'd post it and see what y'all think.

AlCalavicci posted...

My wife and I literally put an offer on a house today and were outbid

we're all outbid. should be the price is right.
that way they cant overbid.

SkittyOnWailord posted...

I have no more details about that pic than you. Just saw someone post it and I saved it. No idea if it's even true, but I thought I'd post it and see what y'all think.

I agree with the other user that it seems like there's something missing that would explain the price jump like that, or it's just BS

archizzy posted...

It honestly won't get better. I have seen houses increase in pricing my entire life and I'm 48. They legitimately don't go down. They creep up year after year after year steadily.

The only thing that fluctuates is mortgage rates and people got used to them being INSANELY low compared to historical averages. They aren't even *bad* now they just aren't the stupidly low rates that were only a couple percent.

I knew a lot of people who were buying in the 80's where rates were up to like 18%. Like seriously I knew a handful of people who bought when rates were 14 to 16% then.

So don't expect houses to get cheaper. They will keep going up. I suppose it is possible mortgage rates could eventually fall to low levels again but I wouldn't count on it for a long while.

Average house back then was like 3-4 years worth of your salary without a college degree though. It aint the same

I mean its more that EVERY thing keeps going up so...either there is a massive revolt where prices are forced to go down or...the Hunger games becomes reality.

My sister makes $285k as a pediatrician and her husband pulls in about $150k as a Federal Government employee, and they're seriously worried that they won't be able to afford a middle class life when they move to San Diego later this year. Affordability is bad in general, but it's asinine in some of the country's major cities. San Diego specifically has somehow become more expensive than LA.

The prices aren't gonna go down because housing is being used as an investment and it's also the only way for ordinary people to build wealth at this point. The price continuing to go up is a disaster and the price going down substantially would also be a disaster for the middle class because their home ownership and equity is a big part of what makes people middle class in the first place.

There's not really an easy solution unless there's some way to crater the price for new homes while not touching the value of existing homes. There's no way to do that because houses are compared to each other.

It was a mistake to make housing not just an asset, but THE asset.