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Message
re: Housing: WTF?
Posted on 3/16/23 at 1:18 pm to I Love Bama
Posted on 3/16/23 at 1:18 pm to I Love Bama
quote:The MAJOR difference you are failing to highlight is the financing. In the run up to the 2008 crash, people were taking out 105% LTV loans with very little underwriting being done. Anyone who has bought property in since then can tell you that just is not how it is now. Lots of equity and LOTS of minute underwriting.
If you guys ever get bored, pull up real estate news articles before the crash of 2007/2008. They basically made the same arguments as people are making now while ignoring the red flags.
Before I got into government contracting. I was a commercial real estate appraiser for 10 years. Had my MAI certification for 2 years before I got sick of the industry.
I feel as though I have at least a TINY advantage over people who own some single family rentals and they are worried their investment will collapse so they cope. OR they bought a house in this WILD arse market, paid too much and are worried their "investment" is going to tank.
During the last housing crash, all that demand disappeared over night. People moved in with friends, family and small apartments.
I was buying houses off the MLS for $10,000.
You guys really need to dig in deeper to past housing crashes.
I can see prices sagging a bit (I mean, they clearly went too high with the funny money in covid). But it simply is true that there is a shortage of homes and apartments. People should not be surprised if there is relative strength in housing.
1
Posted on 3/16/23 at 1:27 pm to Big Scrub TX
quote:
I can see prices sagging a bit (I mean, they clearly went too high with the funny money in covid). But it simply is true that there is a shortage of homes and apartments. People should not be surprised if there is relative strength in housing.
what i would like to see are the numbers of houses going on the market this summer vs 2019
People who bought or refinanced after 2020 are going to be more likely to not move even if they are outgrowing the house
my guess is that there is going to be less inventory on the market than in typical summers when parents are looking to move.
Posted on 3/16/23 at 1:28 pm to LemmyLives
quote:
Chicago to Austin.
I could say it was the freezing cold weather. Or I could say the literal double murder outside of my daughter's $490 per week daycare while my wife was inside picking her up. Frick Chicago
Posted on 3/16/23 at 1:30 pm to I Love Bama
quote:
Not the same
Ah yes, it's always "different this time"
It could be other factors but it's fact that we aren't and haven't built enough since the crash. It's also fact there's been heavy regulation on lending practices.
So, there can be a change but it really isn't the same, at least for the same reasons.
This post was edited on 3/16/23 at 2:45 pm
Posted on 3/16/23 at 1:34 pm to Bard
I believe multi-family is included in that number and each unit is counted as a housing start. I know a lot of contractors that build these HUD apartment complexes so to me that number could be heavily skewed. I don't know hardly anyone building a new custom home right now.
Posted on 3/16/23 at 1:36 pm to Dire Wolf
quote:
my guess is that there is going to be less inventory on the market than in typical summers when parents are looking to move.
There's going to be hardly any inventory for a while.
99% of mortgages are below the prevailing 30 year rate today.
90% are below the prevailing rate minus 1.5%.
67% are below the prevailing rate minus 2.5%
Posted on 3/16/23 at 1:51 pm to I Love Bama
quote:
It is absolutely baffling the hammer hasn't dropped yet on real estate.
yeah I am just laying back like a leopard waiting to pounce.
RTV's are ridiculous as are interest rates.
Posted on 3/16/23 at 2:06 pm to AllDayEveryDay
quote:
. The homes are averaging 600k at a 6% interest rate. I feel bad for them but it could be worse. Likely will down the road.
Blows my mind that there are enough high paying jobs to afford these homes. The wife and I are around $200k combined and we couldn’t swing a note like that plus insurance, car notes and the expenses of three children
Posted on 3/16/23 at 2:23 pm to bayoudude
quote:
Blows my mind that there are enough high paying jobs to afford these homes
i'd bet a healthy chunk of those are partially funded via boomer parents with some spare change.
Posted on 3/16/23 at 2:32 pm to CDUBTX
quote:
I don't know hardly anyone building a new custom home right now.
We have a local builder who has half a dozen $750,000 spec homes sitting on Zillow for over 200+ days. Yikes.
Posted on 3/16/23 at 2:35 pm to ronricks
quote:
There simply isn't enough housing supply in this Country.
Only partially true.
This would be fixed by saying "there simply isn't enough housing supply in livable middle class areas in this country".
There's plenty of housing available. Most of it is shite and would be scoffed at by the average poster on this sub-forum.
It's damn near impossible to be a first time home buyer in a middle class neighborhood with no equity to roll over in this market.
This post was edited on 3/16/23 at 2:36 pm
Posted on 3/16/23 at 2:38 pm to bayoudude
quote:
Blows my mind that there are enough high paying jobs to afford these homes. The wife and I are around $200k combined and we couldn’t swing a note like that plus insurance, car notes and the expenses of three children
This is a big issue. Half a million dollar "starter homes" don't work in areas where an average professional salary is $100k or less. I know we're all OT rich here of course, but if you take an average family with a teacher and an engineer, or a nurse and a cop, or something similar, with combined salaries ~$200k, add a kid or two, and these people are going to struggle to buy a home at these prices. If they already owned a home prior to 2019, they probably have enough equity to sell because of the huge run up in values... but unless they move to a lower priced area, what can they buy?
Obviously not everyone needs to buy a new construction home, they can start with an older home, maybe smaller or needing some updating. But in hot areas, those older starter homes have been bought up as investments. I am seeing older homes linger on the market longer in my area (DFW) with price drops, but they're still selling for double what they were 5 years ago, with a higher interest rate.
Posted on 3/16/23 at 2:46 pm to Lightning
quote:
OT rich here of course,
money board rich is better.
Posted on 3/16/23 at 2:48 pm to bayoudude
i hope the whole mfer crashes again. scoop up a bunch of properties dirt cheap.
Posted on 3/16/23 at 2:53 pm to bayoudude
quote:
Blows my mind that there are enough high paying jobs to afford these homes. The wife and I are around $200k combined and we couldn’t swing a note like that plus insurance, car notes and the expenses of three children
PITI on a 6% 480k mortgage (80% of 600k) is gonna be like 3800/month or so. About 23% of monthly gross income for 200k. That’s plenty affordable unless you are retarded with money elsewhere.
This post was edited on 3/16/23 at 3:18 pm
Posted on 3/16/23 at 2:53 pm to Bard
Saw this posted on social media re: the MS Gulf Coast market. No so rosy.
Posted on 3/16/23 at 3:01 pm to Dire Wolf
quote:
Blows my mind that there are enough high paying jobs to afford these homes
i'd bet a healthy chunk of those are partially funded via boomer parents with some spare change.
You'd be correct. I bet 30-45% of millienials buyers have some help from the parents. The heliocopter parents are still alive and well.
Posted on 3/16/23 at 3:11 pm to Billy Blanks
quote:
I bet 30-45% of millienials buyers have some help from the parents. The heliocopter parents are still alive and well.
To be fair, its probably more financially beneficial to get assistance with paying for a home vs. an inheritance.
Posted on 3/16/23 at 3:18 pm to TimeOutdoors
There's been a lot of housing recessions outside of 2007/2008. The other ones were more localized. We are going into a softening market (which has already started for sure), but impacts will vary significantly based on region.
Posted on 3/16/23 at 3:29 pm to Bard
I work for a large regional custom home builder. Financed deals are way down. However, cash customers are coming out of the woodwork. 4 times the amount we usually get.
A lot of people cashed out in the boom and have been renting apartments or houses while sitting on a wad of cash. Couple that with people from California, Michigan, NY, Ohio moving south and remote working we expect demand to stay high in the SE.
We are at a saturation point on what the buyer can afford and very few times have I seen where there is such a gap between what people can afford and what they want.
It’s still going but you can feel it’s on thin ice.
A lot of people cashed out in the boom and have been renting apartments or houses while sitting on a wad of cash. Couple that with people from California, Michigan, NY, Ohio moving south and remote working we expect demand to stay high in the SE.
We are at a saturation point on what the buyer can afford and very few times have I seen where there is such a gap between what people can afford and what they want.
It’s still going but you can feel it’s on thin ice.
This post was edited on 3/16/23 at 3:38 pm
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