re: Should I Sell My House Now and Bet on Economy and Housing Market Crash?

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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.

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My argument isn't that people who moved with equity cant buy a house. But anyone who isn't paying cash is impacted when rates double. And that impact is decreasing demand for properties and valuations.

It definitely matters to first time home buyers who were waiting on prices to come down because any reduction in price is being balanced out by increases on the financing side.

I gave a scenario earlier where the same loan on a $500k purchase is now $800-900 more per month. That means someone who is a first time home buyer who barely qualified for that deal is now going to have to drop down to a $350k purchase to make the numbers work.

Real estate is the only thing that has consistently beaten inflation.

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Rates don't matter and neither does price

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Every economics professor in the country would dispute this statement.

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The rates being so egregious is exactly why I'm not selling and looking to buy. We need a bigger house, and the prices don't scare me off, but the rates causing an extra 400-500 a month is what I refuse to pay.

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First off Im not an professional so understand this is all just my opinion.

There are no great options right now, just went through a similar discussion with a family member who is trying to re-enter the market but struggling.

IMO rent is going to skyrocket due to the carrying costs for many of the rental properties available that you'd actually want to live in and you would lose the tax deduction so that's not ideal. If you are going to pay rent in excess of what your current mortgage note would be that doesn't seem like a great idea, especially given the tax deduction aspect.

The other question if you sell and rent is how you would shield the windfall from taxes and inflation? I hate the stock market until the administration changes or turns back on the QE spigot. What does that leave? Your $500k or whatever will actually be $450k in 12 months if just parked in savings.

Buying a new property despite what some in here have said is tough even with your equity, but if you buy now you are probably buying at or just post peak. You will also be locked in at the much higher rates unless you can afford to self-finance. If self financing is an option I would consider doing that since 7% is a better ROR than I think I could get anywhere else for the next year or two and would just take cash back out if rates drop or a better investment opportunity comes along.

I think it all comes down to whether you think the market crashes 20%+ or not in the next 2 or so years. If you strongly feel that it will that justifies risking the inflation while you baton down the hatches.

If it were me I would let this play out for 3-6 months and re-evaluate unless you are pretty confident we are on the edge of a cliff.

Man, I am happy we bought way more house when we did. We stretched our finances buying and renovating but we are finally leveling off again and don’t have the stress of this insane market.

I would probably stay out for a while with the hope that the market and rates cool off in the next few years.

Yeah that’s my plan.

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Rates don't matter and neither does price.

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There were more people than not before the last housing collapse providing justification for why the boom would continue. While the reasons are different, the reality then and the reality now is the same. The current housing market is unsustainable. Comments like yours reaffirm this. There will be a correction in most markets and a crash in many. My guess is some areas will start to see this happening by the end of the year, with the majority of the country seeing it next year.

These are just educated guesses watching from the sideline. I’m not a real estate guy.

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I’m convinced that prices are never going down,

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In many areas they've already started going down.

Charleston, SC

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In many areas they've already started going down.

Charleston, SC

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I think prices will come down some eventually but looking at Charleston and different cities it's impossible at this point to tell whether any recent dip is a trend or just random price movement over the short term. Plus New Orleans and Atlanta are both on an uptick.

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The current housing market is unsustainable

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People have been saying this since 2018

The wishcasting on here for a crash is simply bizarre. The market isn’t going to change until inventory changes. Btw inventory in Q3 and Q4 is forecasting to be lower than it is now.