Housing market

demoncore1031

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May 18, 2008
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Funny story.... My brother was performing at a casino here in Albuquerque, along with Steven Michael Quezada (agent Gomez from Breaking Bad). After the show, they went out to the parking lot and there was a dead body. Everyone looked at Bryan Cranston and made Heisenberg jokes... Nobody ever found out who the deceased was or how he died. Was a strange coincidence.
 
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besserheimerphat

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I think you could argue that there was no bubble leading up to the financial crisis. We are back on the same trend house price that we've been on since the 80s. Had 2008 not happened, we'd probably be exactly where we are right now.


Screenshot_20220123-200749_Chrome.jpg

I will certainly agree that there were structural banking issues that lead to the financial crisis, but it wasn't due to homes being overvalued aka a housing bubble.

And yes I know mean =/= median =/= mode, but assuming the distribution is fairly consistent any of those values are fine to use for trend analysis.
 
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Spam

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The rising mortgage rates seem to be slowing home sales just a bit in many markets
 

mynameisjonas

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The rising mortgage rates seem to be slowing home sales just a bit in many markets
The difference in payments between a rate in The 2’s and a rate in the 5’s can be pretty massive. Will be interesting to see what happens to home prices. I suspect we will start leveling off and plateauing in the near term.
 

BCClone

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The difference in payments between a rate in The 2’s and a rate in the 5’s can be pretty massive. Will be interesting to see what happens to home prices. I suspect we will start leveling off and plateauing in the near term.
Son graduates and has a job. I ran numbers and he will be much better off renting with these prices.
 
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twojman

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There may be a few small peaks and valleys in rates for the next few months but eventually I think rates settle under 5 again. The current rates went up too far too fast.

There's still a shortage of housing across the country.
 

SCNCY

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We just sold our home after only owning it for less than a year. Sold it for 98k more than what we bought it for. Glad we sold it when we did as I’m not sure if we would have broken even with less entrants in the market. We also added some features to the house causing concern for breaking even.

For those curious, my wife got a promotion at work that requires her to be in office.
 

BCClone

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For now yes, but what about in five years after appreciation etc? Depending on where he lives there will be appreciation. House payment won't go up but rent will.
Will there be appreciation is the question. If rates go up, there are too many people bidding to what their max payment is and if that continues then prices will soften from that. Also, if he would decide to move in a 2-5 years when most people change jobs from their first, he would need to have 6-7% appreciation just to handle the sales commission.

I told him to take the rent difference and what a payment, insurance, and other stuff and invest it in some conservative mutual funds. I think he will be in better shape than buying at this point doing that.
 

Spam

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Hard to see a decline in home prices. The rising mortgage prices might result in a slowdown in sales, which might stabilize prices. But a fall is unlikely. Too much of an inventory shortage. And there are plenty who want a home but are hoping for prices to fall. They are not going to wait forever.
 
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isucy86

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Will there be appreciation is the question. If rates go up, there are too many people bidding to what their max payment is and if that continues then prices will soften from that. Also, if he would decide to move in a 2-5 years when most people change jobs from their first, he would need to have 6-7% appreciation just to handle the sales commission.

I told him to take the rent difference and what a payment, insurance, and other stuff and invest it in some conservative mutual funds. I think he will be in better shape than buying at this point doing that.

Yep. No guarantee that current home prices won't decline. Inflation can be a tricky deal. I would love to be selling a house right now/not so much buying. Seems to me we might have a 20-25% correction in home prices in some areas.
 

BCClone

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Yep. No guarantee that current home prices won't decline. Inflation can be a tricky deal. I would love to be selling a house right now/not so much buying. Seems to me we might have a 20-25% correction in home prices in some areas.
One issue could be people who have routinely bought a house, lived there for 5 years and sold it when they got a new job. Had 5% annual appreciation so they covered the realtor commission and the interest rate went down 0.5% each refi or purchase so it didn’t matter. If this thing even flatlines, they may be unable to move since the commission will eat any pay down and then the rate tripling will make the next place unaffordable.
 

alarson

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Yep. No guarantee that current home prices won't decline. Inflation can be a tricky deal. I would love to be selling a house right now/not so much buying. Seems to me we might have a 20-25% correction in home prices in some areas.

Which itself is trouble if people get underwater just because the market shifted.

A lot more safeguards in place against this than 20 years ago, but could still happen.

Definitely not a great time for this interest rate shift for many, right after a dramatic increase in prices the last year or two. Not only were people paying way more per month for the same houses just because of the price increases, now add a significant increase from the interest.
 

KnappShack

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Which itself is trouble if people get underwater just because the market shifted.

A lot more safeguards in place against this than 20 years ago, but could still happen.

Definitely not a great time for this interest rate shift for many, right after a dramatic increase in prices the last year or two. Not only were people paying way more per month for the same houses just because of the price increases, now add a significant increase from the interest.

Heard my first hard money loan question the other day.

Had to wonder if it was 2006 again
 

isucy86

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Which itself is trouble if people get underwater just because the market shifted.

A lot more safeguards in place against this than 20 years ago, but could still happen.

Definitely not a great time for this interest rate shift for many, right after a dramatic increase in prices the last year or two. Not only were people paying way more per month for the same houses just because of the price increases, now add a significant increase from the interest.
It's tough because other than the short financial crisis a dozen or so years back, most people have only experienced a strong or steady overall economy for the last 30+ years. A lot of people didn't experience the crazy decade+ from 1973-1988.

Hopefully the Fed can manage the current times, but history tends to find ways to repeat itself.
 

BCClone

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It's tough because other than the short financial crisis a dozen or so years back, most people have only experienced a strong or steady overall economy for the last 30+ years. A lot of people didn't experience the crazy decade+ from 1973-1988.

Hopefully the Fed can manage the current times, but history tends to find ways to repeat itself.
The longer you prop something up, the worse the downside is.
 

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