How are people affording these crazy home prices?

[scattergun]

@bozeman
History world suggest an angry armed mob.

 

[hoothooters]

With rates staying around that 5-5½% and inventory increasing now is a great time to buy!

We are seeing less and less bidding wars and homes finally selling with contingencies and single offers.

If your a home buyer still waiting for prices to drop I would not wait on it! Our past history shows during recessions that price drops are not always the case. Exempting the 2008 housing market crash.

 

[scattergun]

And don’t worry, folks — there’s absolutely no chance that it’s just a gargantuan Ponzi scheme!

 

[Dos Perros]

Some interesting tidbits in this article:

There's a massive housing shortage across the U.S. Here's how bad it is where you live

Hundreds of cities and towns are seriously short of housing, both homes to buy and rentals, according to a new study. It's the main reason that home prices and rents are so high.

www.npr.org

And funny to hear NPR say it, they're calling for zoning and building code changes.

 

[Newtosavage]

And don’t worry, folks — there’s absolutely no chance that it’s just a gargantuan Ponzi scheme!

I've thought of that too, after hearing the rumor that all these homes are being bought up by corporations. Still doesn't explain the people living in them, but maybe the truth is somewhere in between. I know the price of housing has stopped me from relocating twice now. So here I still sit in the 6th circle of hell until the bubble bursts, again. You'd think this country would learn right?

 

[Newtosavage]

With rates staying around that 5-5½% and inventory increasing now is a great time to buy!

We are seeing less and less bidding wars and homes finally selling with contingencies and single offers.

If your a home buyer still waiting for prices to drop I would not wait on it! Our past history shows during recessions that price drops are not always the case. Exempting the 2008 housing market crash.

I have to believe another, smaller crash is about to happen or is happening. I'm seeing listing prices being slashed on lots of homes. Folks that bought in the past year hopefully got a really good rate or they are gonna hate what's about to happen.

I think part of the explanation of the outrageous prices is just the rate though. $600k at 2.5% is the same monthly as $400k at 6%

We got in just in time (2 yrs ago) with a sub 3% rate. Our home value has gone up 100k in those two years but I don't expect it to stay there as the rates go back up.

 

[Dos Perros]

It's just cheap money, people/corporations with access to it acquiring capital/cash flow.

 

[Trial153]

Exactly.

A few generations back, it was normal to pay something like 40K for a first house. Now there’s a generation being forced out of home ownership by prices that have vastly outpaced income levels, and they’re being told that the solution is to simply spend less on avocado toast or whatever.

This smug scolding completely ignores the continuous massive accumulation of wealth at the top during the last four decades, which is causing the market to be increasingly dominated by gigantic capital firms, whose resources are impossible for a normal working person to compete with.

Meanwhile, money that would have previously gone into equity for new homeowners is instead diverted into rent that further enriches the wealthiest, allowing them to buy up even more properties. It’s a feedback loop that will only further squeeze out new buyers if left unchecked, regardless of how frugally they live.

This self-reinforcing regression to property-distribution inequality not seen since feudalism is a structural problem, not an individual one.

Amen.

And after all the juice is squeezed and there is nothing left to leverage they will light a match and burn it down ….all to be put out by the same people they originally squeezed …re the government/ US citizens will be bailing them out…again

History of U.S. Gov't Bailouts

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.

www.propublica.org

 

[11boo]

With rates staying around that 5-5½% and inventory increasing now is a great time to buy!

We are seeing less and less bidding wars and homes finally selling with contingencies and single offers.

If your a home buyer still waiting for prices to drop I would not wait on it! Our past history shows during recessions that price drops are not always the case. Exempting the 2008 housing market crash.

Spoken like a true realtor lol.

 

[CorbLand]

Spoken like a true realtor lol.

He is also not wrong. Recessions do not always result in major price drops. The 70s/80s are a perfect example. It also happened in the late 1990s.

We are also setting up for a perfect storm with real estate. Supply is low, rates are increasing, inflation is hurting people and builders are slowing down. As things restrict, more and more people will choose to stay put. Thus, existing homes sales will level, and new home builds are not increasing. One theory of many out there.

 

[11boo]

Another theory is forclosures are ramping up. More of a truth actually.

https://www.marketwatch.com/picks/d...ousing-market-01659181360?mod=search_headline

 

[svivian]

Another theory is forclosures are ramping up.

I don't think that is a theory at all. Check out our counties foreclosures listings, they have been kicking the can down the road and the list is growing. Eventually they are going to have to have auctions on these homes that have been in foreclosure since spring of 2020.

 

[Newtosavage]

Amen.

And after all the juice is squeezed and there is nothing left to leverage they will light a match and burn it down ….all to be put out by the same people they originally squeezed …re the government/ US citizens will be bailing them out…again

History of U.S. Gov't Bailouts

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.

www.propublica.org

But corporations aren't the problem. Didn't you learn that? LOL

 

[amassi]

Another theory is forclosures are ramping up.

We looked at that earlier or on another thread.
They're up over 200% ytd, but many had some sort of foreclosure protection that kept rates artificially low during 20,21.

Sent from my SM-G991U using Tapatalk

 

[11boo]

I don't think that is a theory at all. Check out our counties foreclosures listings, they have been kicking the can down the road and the list is growing. Eventually they are going to have to have auctions on these homes that have been in foreclosure since spring of 2020.

The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 U.S. foreclosure market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.

 

[CorbLand]

The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 U.S. foreclosure market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.

The question here though is are they up 219% because we have kicked the can down the road on them for two years? 0 to 2 foreclosures is a 200% increase. According to the article you cited, the number of foreclosures is still below 2019, which is the last year that we didn't have moratoriums in place.

Demand is also sky high and supply is very low. In 2008 the amount of foreclosed homes was drastically increased along with a massive amount of spec homes on the market. This created a substantial amount of over supply in a short period. One key difference is that we do not have the number of spec homes on the market as we did in 2008.

Time will tell and nobody has a crystal ball. The thing optimists and pessimists have in common is that eventually each of them is right.

 

[svivian]

The question here though is are they up 219% because we have kicked the can down the road on them for two years? 0 to 2 foreclosures is a 200% increase. According to the article you sited, the number of foreclosures is still below 2019, which is the last year that we didn't have moratoriums in place.

Demand is also sky high and supply is very low. In 2008 the amount of foreclosed homes was drastically increased along with a massive amount of spec homes on the market. This created a substantial amount of over supply in a short period. One key difference is that we do not have the number of spec homes on the market as we did in 2008.

Time will tell and nobody has a crystal ball. The thing optimists and pessimists have in common is that eventually each of them is right.

My guess would be those who knew they were going to foreclose in the future decided to sell while prices were high and at least get their equity out of the deal.

We are not going to see the same foreclosure numbers that we did in 2008 by a long shot but we will see an increase no doubt.

 

[hoothooters]

As for interest rates changing all the lenders and market specialist ive talk to in the last few weeks are not seeing a interest change anytime soon. At the begging of most recessions the interest hikes up then it slowly come down a bit then it pauses there for a while, it's been a pretty common pattern from our past. Also the interest rates aren't affected truly by a fed hike, they are always adjusting interest well ahead of fed hikes. We expect it to stay around the 5-5.5%. New building is coming to a absolute stand still, and inventory is increasing. If anything we will see a little price increase in homes.

 

[*zap*]

Time will tell and nobody has a crystal ball. The thing optimists and pessimists have in common is that eventually each of them is right.

Yup, well said.

 

[TheGrayRider]

Just bail everyone out. Problems solved. Remember Chrysler and General Motors a few years back. “Too big to fail.”