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re: Should I Sell My House Now and Bet on Economy and Housing Market Crash?
Posted on 5/16/22 at 8:25 am to Lsudx256
Posted on 5/16/22 at 8:25 am to Lsudx256
quote:
try to wait for some foreclosures
Where all these foreclosures going to come from? If anyone bought 6 months to anytime in history before, they are sitting on a sizeable amount of $.
quote:
Where do we see the housing marketing in 1 or 2 years?
Higher
quote:
I am thinking I will be able to put some money in the bank and also eventually upgrade my living conditions.
I don't think it's a terrible idea if you need to move.
Posted on 5/16/22 at 8:32 am to Lsudx256
You live in DFW don't be a freaking idiot there will be no crash in real estate prices here
Posted on 5/16/22 at 8:34 am to ronricks
quote:
I'm not even sure Biden can screw up this housing market.
He already has.
I've seen large numbers of would be buyers unable to qualify for loans as the cost of financing is tacked on to the appreciation that's happened over the last 3-5 years.
I don't think we've seen the full impact yet as many buyers had rates locked in at 3.5-5% whereas anyone getting started is going to be at a much higher rate even with outstanding credit.
Run the numbers on a $500k house. At 20% down a year ago the note would've been $1796/month @3.5%. That same deal today would cost $2661. That's $900/month on a house that probably was only $350k a few years ago. Unless wages go up, blackrock ups its purchasing or people continue to flood out of CA and NY with huge windfalls where do the qualified buyers come from?
I wonder if you start to see 35-40 year mortgages like you do abroad? I mean the only way the auto industry has survived is by doubling the term of the loan to keep the monthly payment the same.
This post was edited on 5/16/22 at 8:35 am
Posted on 5/16/22 at 9:25 am to tide06
So you are blaming Biden for a strong housing market and saying that is a bad thing? 
People have more equity in their homes now than ever. It's how people are selling and buying other properties with either strong down payments or all cash. A home isn't a right. It's why apartments exist.
People have more equity in their homes now than ever. It's how people are selling and buying other properties with either strong down payments or all cash. A home isn't a right. It's why apartments exist.
Posted on 5/16/22 at 9:37 am to ronricks
The interest rate hikes are going to spike the housing market eventually.
The interest rate hikes are in response to inflation.
The inflation is a result of Biden’s historic spending.
So yes, Biden is in part responsible for the ultimate demise of the housing market, but I grant fully that the spending that was signed under Trump during Covid is also part of the problem.
The interest rate hikes are in response to inflation.
The inflation is a result of Biden’s historic spending.
So yes, Biden is in part responsible for the ultimate demise of the housing market, but I grant fully that the spending that was signed under Trump during Covid is also part of the problem.
Posted on 5/16/22 at 9:40 am to tide06
Rates have skyrocketed and prices are starting to come down in many areas. I feel like you missed it.
Posted on 5/16/22 at 9:49 am to Lsudx256
Yes please sell all of your possessions so you can take advantage of the future market crash.
Posted on 5/16/22 at 9:50 am to iAmBatman
quote:
Don’t forget the taxes on the capital appreciation.
This is one area where selling is advantageous, esp if he's married.
Posted on 5/16/22 at 9:51 am to Lsudx256
quote:
I live in an extremely affluent area and built my house 8 years ago
Awesome. Did it near the bottom.
quote:
I paid $500K
quote:
now most estimates have it for close to $1M because of the way the area has blown up.
It's likely more than that. People who bought 2-4 years ago in spots are up 200-350k
Posted on 5/16/22 at 9:57 am to Billy Blanks
I built in 2016. Today my mortgage would be double. My next move will be to assisted living or the funeral home.
Posted on 5/16/22 at 9:58 am to tide06
quote:
The inflation is a result of Biden’s historic spending
Actually we are probably just now feeling the last of Trump's spending.
We haven't even felt Biden's yet
Posted on 5/16/22 at 10:34 am to tide06
quote:
The interest rate hikes are going to spike the housing market eventually.
Not if inventory stays like it is. Nothing can be sorted out until the inventory problem is addressed.
quote:
So yes, Biden is in part responsible for the ultimate demise of the housing market, but I grant fully that the spending that was signed under Trump during Covid is also part of the problem.
You already demonstrated you don't understand how the housing market works when you asked me who will be buying these homes even though interest rates are rising. People will be using their large amounts of equity to roll over into the new homes even if rates are higher. You can't pin this on Biden.
Posted on 5/16/22 at 10:47 am to ronricks
quote:
Not if inventory stays like it is. Nothing can be sorted out until the inventory problem is addressed
Cutting the population of people who can get financing and afford a mortgage with increased rates will mean less inventory is needed.
quote:
People will be using their large amounts of equity to roll over into the new homes
You need buyers to do this. Also that equity will decrease once rates affect the market.
Also the population who has this equity isn't likely that huge after the dramatic exits in 2020-2021. I don't see whomever is left finding the same EV calculation with higher rates and decreasing prices.
Posted on 5/16/22 at 10:48 am to Lsudx256
You’re better off holding considering your capital gains, realtor costs, closing costs, rent, personal time and effort required, moving costs x2, etc. Factor in the risk involved - you could be completely wrong about the market crash, or it could take 5 years to happen. What happens if it goes 3 years and you’re still renting? You decide to buy a new house and the market crashes the next year? Then you did all that for a huge personal loss
IMO a primary residence is too illiquid and there’s too many variables to treat it like a buy low/sell high stock. I’ve been looking at this possibility for my personal vehicle and I still think it’s too much effort and risk for the potential reward. I bought my current truck for $18k less than the KBB fair trade in value. Would be a nice chunk of change. But I’d lose a significant amount of that on all the other issues I’d have to deal with to get the profit, find a temporary beater to drive, keep the beater running, hope the vehicle market crashes and get a new truck for a normal price again
IMO a primary residence is too illiquid and there’s too many variables to treat it like a buy low/sell high stock. I’ve been looking at this possibility for my personal vehicle and I still think it’s too much effort and risk for the potential reward. I bought my current truck for $18k less than the KBB fair trade in value. Would be a nice chunk of change. But I’d lose a significant amount of that on all the other issues I’d have to deal with to get the profit, find a temporary beater to drive, keep the beater running, hope the vehicle market crashes and get a new truck for a normal price again
Posted on 5/16/22 at 10:51 am to SlowFlowPro
With interest rates rising it is likely to make a lot of people stay put in their current homes further exacerbating the inventory crisis even more. Those wishcasting for a 'crash' are going to be waiting a while. People who have large amounts of equity can buy regardless of interest rates if they so choose. Inventory is the problem not interest rates or prices. Nothing will change unless there are massive job losses.
Posted on 5/16/22 at 11:11 am to ronricks
quote:
With interest rates rising it is likely to make a lot of people stay put in their current homes further exacerbating the inventory crisis even more
This decreases the population of buyers too, though. Fewer buyers will suppress prices. Fewer buyers means less inventory is needed.
This post was edited on 5/16/22 at 11:15 am
Posted on 5/16/22 at 11:48 am to SlowFlowPro
quote:
This decreases the population of buyers too, though. Fewer buyers will suppress prices. Fewer buyers means less inventory is needed.
Not taking into account all the renters out there or people living in mommy and daddy's basement (Millennials & Gen Z) who will be entering the housing market soon and will also be using funds from mommy and daddy's retirement accounts for down payments. There are too many potential buyers and not enough inventory. Short of massive job layoffs this isn't going to change anytime soon.
Posted on 5/16/22 at 12:06 pm to ronricks
quote:
Inventory is the problem not interest rates or prices. Nothing will change unless there are massive job losses.
This. In most markets there are 2-3 weeks worth of supply. A balanced market is like 4-6 months of supply.
Posted on 5/16/22 at 12:28 pm to thunderbird1100
Great take. Also, the loans are clean. This isn’t 2007 when stated income loans with no documentation is needed to get a 500k loan. Appraisals are true as well.
As long as the job market stays up so that people can pay their mortgages then loans won’t go into default.
I’m seeing bankers on the local level pull back on construction financing. So the backlog of homes will continue. There might be a “correction” in what people buy because of inflation and rates. But demand will still be there.
As long as the job market stays up so that people can pay their mortgages then loans won’t go into default.
I’m seeing bankers on the local level pull back on construction financing. So the backlog of homes will continue. There might be a “correction” in what people buy because of inflation and rates. But demand will still be there.
Posted on 5/16/22 at 12:28 pm to ronricks
(no message)
This post was edited on 10/26/24 at 5:24 pm
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