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re: Real estate is insane. Is this sustainable?
Posted on 3/11/21 at 2:24 pm to baldona
Posted on 3/11/21 at 2:24 pm to baldona
quote:
If you go from owning for 30 years to renting for a year, I just think it can be a bigger transition then people give it credit for.
In addition, and I know every market is different, in mid-Missouri (a college town) the only homes for rent are either hot garbage (and still what I pay for my mortgage) or really, really expensive. The vast majority are duplexes that are student housing, and most of that is "luxury" apartments/duplexes where you rent rooms. There are virtually no homes to rent in this area for middle-upper middle class folks; they're either heaps that are falling apart that still command way too high of rent or houses that are so much more expensive than the mortgage for said house that you're losing all the money you gain by selling your house now. My house is perfect for a first time homebuyer, middle class family of four and when I purchased 10 years ago put me in a mortgage of $750/month (housing is still quite a bit cheaper here than lots of places)... but if I wanted to rent something comparable to that now it'd run me at least $1500/month and probably closer to $2k. We're in the process of building right now, and the thought has occurred to me to sell now while the market is hot, but unless I'm willing to rent a camper for a year and throw it on the land there's just not anywhere I could rent for even close to what I'm paying now in a mortgage. If it's even close to a wash in the end I"m staying in my house as long as I can.
1
Posted on 3/11/21 at 3:03 pm to Upperdecker
quote:
But the point is, people are also leaving a number of places. California, New York, New England, Seattle, Portland, Detroit, Chicago, and a number of other places are seeing net loss of residents. We’re seeing a rebalancing
Probably seeing a great white flight after BLM rallies in cities.
Posted on 3/11/21 at 4:47 pm to zatetic
A new house just posted on my street for 47% above what they paid for it in 2018. This is a 7 figure home.
Posted on 3/11/21 at 8:29 pm to ghost2most
I am a Broker down here, and was a part of the last run up and collapse, thank you Alan Greenspan and Barney Franks, and guys I am starting to see the same bubble forming...everything is selling with maybe 15-20% upside over 2019-2020..great time to sell..at some point this will tip over and crash. This will cause the stock market to follow in step.
Posted on 3/11/21 at 8:45 pm to SalE
quote:
I am a Broker down here, and was a part of the last run up and collapse, thank you Alan Greenspan and Barney Franks, and guys I am starting to see the same bubble forming...everything is selling with maybe 15-20% upside over 2019-2020..great time to sell..at some point this will tip over and crash. This will cause the stock market to follow in step.
If you were a gambling man how long??
Posted on 3/11/21 at 8:51 pm to ghost2most
Might have already been said, but there is an imbalance in the market because of the lack of evictions to go along with the desire to have more space. I think things level at some point when we get a combination of evictions and a slightly higher interest rate environment. What scares me though eventually is what inflation might do to the market when everything starts to “settle” post covid, post euphoria of the money printer going brrrrrr.
Posted on 3/11/21 at 8:53 pm to SalE
quote:
sell..at some point this will tip over and crash. This will cause the stock market to follow in step.
lol
Posted on 3/11/21 at 9:25 pm to SalE
quote:
I am a Broker down here, and was a part of the last run up and collapse, thank you Alan Greenspan and Barney Franks
I was thinking about the similarities recently as well.
Subprime and ARMs caused the bubble to pop last time.
I just can't find the cause of a bubble bursting this time except for people deciding WFH isn't as permanent as people believed.
Posted on 3/11/21 at 10:14 pm to KwoodTiger
What happens when all these people are upside down by 10-20% in 2 years without having had to put anything substantial down?
More "strategic foreclosures"?
More "strategic foreclosures"?
Posted on 3/12/21 at 5:35 am to ghost2most
Follow the debt load figures. If they get out of whack then you know something is about the crater
Posted on 3/12/21 at 5:37 am to AUjim
Government Bailout?
Posted on 3/12/21 at 8:28 am to SalE
Posted on 3/12/21 at 8:41 am to TMFBB21
I don’t think that scales up very well. It appears they used $330k home and a $78k household income as the model for all other variables.
Posted on 3/12/21 at 8:57 am to SlidellCajun
Here's the other very real possibility/factor.....inspired from Stout's thread on the OT.
Are builders going to be left holding the bag when the still-booming new construction floods the market with houses that are overpriced at least partially because of lumber costs? Does that drive buyers to pursue existing homes that in theory have a little more room for negotiation?
Are builders going to be left holding the bag when the still-booming new construction floods the market with houses that are overpriced at least partially because of lumber costs? Does that drive buyers to pursue existing homes that in theory have a little more room for negotiation?
Posted on 3/12/21 at 9:08 am to AUjim
Just made the move to SC from DC and renting for now with the intention to buy in Q1 next year but these threads are depressing. 
The market is insane down here and I can’t wait to deal with this headache next year.
The market is insane down here and I can’t wait to deal with this headache next year.
Posted on 3/12/21 at 9:25 am to UnluckyTiger
quote:
House Price Inflation in CPI is of Course Complete Baloney, but it Accounts for 1/4 of Total CPI
by Wolf Richter • Mar 11, 2021
With actual house price inflation based on market data, overall CPI would have jumped by 3.7%. Lifting the cover on the deception to keep CPI low. By Wolf Richter for WOLF STREET. For most Americans, housing costs are the largest item in their budget, ranging from 30% to 60% of their total monthly spending.
In its Consumer Price Index (CPI) for February, released yesterday, the Bureau of Labor Statistics reported that the costs of homeownership (which the BLS calls “Owner’s equivalent rent of residence”) have increased by just 2.0% from a year ago, and that rents (“rent of primary residence”) have increased by 2.0%. They’re the biggest items among the 211 items in the CPI basket and together account for about one-third of overall CPI. They play a huge role in CPI. So…
https://wolfstreet.com/2021/03/11/house-price-inflation-in-cpi-is-of-course-baloney-but-it-accounts-for-1-4-of-total-cpi/
Posted on 3/12/21 at 10:44 am to AUjim
quote:
Are builders going to be left holding the bag when the still-booming new construction floods the market with houses that are overpriced at least partially because of lumber costs? Does that drive buyers to pursue existing homes that in theory have a little more room for negotiation?
Of course not. Any decent builder has tons of LLC's and will just let any property go into foreclosure and allow the bank to handle it. That's the way it always is.
That's definitely a possibility in the future, but most builders likely have enough profit built in to handle the decrease in lumber costs. Especially right now as they can't build fast enough for demand, so their profit margins are likely incredible.
Posted on 3/12/21 at 10:51 am to Paul Allen
Meanwhile, NYC is like a ghost town these days.
Posted on 3/12/21 at 12:12 pm to Auburn1968
What's crazy is even overpriced, lousy properties are quickly going contingent. Unfinished construction, old houses that are barely a step above mobile homes and houses with interiors so rough there are no pics in the listings. Makes me wonder who is buying this crap at these prices.
Posted on 3/12/21 at 12:22 pm to Diseasefreeforall
quote:
Makes me wonder who is buying crap at these prices
People that want something real and tangible. Lots of people think the dollar is going down in flames. It’s no longer conspiracy talk.
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