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Started By
Message
re: Housing prices are alarming
Posted on 6/10/19 at 8:47 am to Mud_Till_May
Posted on 6/10/19 at 8:47 am to Mud_Till_May
Welcome to the Banker’s Ant Farm.
0
Posted on 6/10/19 at 8:48 am to PrivatePublic
quote:
You should be able to earn more than 4% on your money annualized over 30 years by investing.
quote:
You should, but you won't.
quote:It's called diversification.
Think about it: if that line of thinking were universally true, wouldn't it make better sense for companies and banks that deal in mortgages to just invest that money in whatever asset beats mortgage rates than take on the risk of mortgages???
Posted on 6/10/19 at 8:48 am to stout
quote:
So why we may not have true subprime lending in housing like what cause the '08 crash you have a sort of indirect subprime lending because rates were kept so cheap
Fha has been the subprime lender
Posted on 6/10/19 at 8:48 am to stout
quote:a lot of people on here deny this. I really don’t get it.
So that on top of pricing outpacing wage growth is causing concern in the mortgage industry.
If you look at all the new developments in places like dfw, atl, etc., the prices of the homes just don’t match with the average incomes. Something’s gotta give.
Posted on 6/10/19 at 8:52 am to Mud_Till_May
quote:
Why cant I just save and buy?
Then save up 200k and buy. Cant afford that? Take out a mortgage. What's the problem here?
Posted on 6/10/19 at 8:54 am to Pettifogger
Oh my mistake. A quick search shows 144 new homes in west cobb over 650k.
Posted on 6/10/19 at 8:55 am to Mud_Till_May
Go buy a little piece of land out in BFE. Buy a trailer. Save money. Pay cash later to build a shitty house.
Done.
Done.
This post was edited on 6/10/19 at 8:56 am
Posted on 6/10/19 at 8:57 am to GreatLakesTiger24
quote:
a lot of people on here deny this. I really don’t get it.
If you look at all the new developments in places like dfw, atl, etc., the prices of the homes just don’t match with the average incomes. Something’s gotta give.
Just like pre 2008 people stretch to afford it and put themselves in an unstable position.
If people were truly smart they would buy a fixer upper and work some sweat equity into a house. Sure you might not get the big McMansion like your friends but at least you won't struggle to make the monthly mortgage, insurance, and tax payments.
Then in a few years cash in that sweat equity and move into something else, rinse and repeat until you have your final house, but too many people want it now because their friends have the big McMansion and they have to keep up.
I also blame a lot of the current debt picture on social media. Social media has made the "Keeping up with the Joneses" disease even worse. They see Suzy and Bob enjoying a vacation in the Bahamas so even if they can't afford it Barbara and Mark now feel like they have to keep up and finance a vacation to Hawaii.
You might not think it's true but it happens.
Posted on 6/10/19 at 8:59 am to stout
quote:
So why we may not have true subprime lending in housing like what cause the '08 crash you have a sort of indirect subprime lending because rates were kept so cheap for so long it allowed companies to offer cheap finance deals on a lot of products and consumers have put themselves in a horrible overall debt picture as a result.
That cheap money will go away one day as markets slow then consumers will feel it.
well if markets heat up the interest rates will rise and it will bring the reckoning that way, too
cheap credit creates bubbles. that's effectively a law of economics.
Posted on 6/10/19 at 9:00 am to Mud_Till_May
Yeah it’s unfortunate those degrees in literature, drama and art don’t pay well
Posted on 6/10/19 at 9:00 am to SDVTiger
quote:
Fha has been the subprime lender
I am in the foreclosure industry and deal with FHA homes. I have also been in real estate and construction for 19 years now. Yes they loan subprime but it's not nearly like it was pre 08' so not sure why you're
ing . There will always be subprime but my point is it's not crazy stuff like 110% LTV loans, no doc/stated income loans, etc.
This post was edited on 6/10/19 at 9:05 am
Posted on 6/10/19 at 9:01 am to stout
quote:
f people were truly smart they would buy a fixer upper and work some sweat equity into a house. Sure you might not get the big McMansion like your friends but at least you won't struggle to make the monthly mortgage, insurance, and tax payments.
man i started this experiment with my mom's house (still in it) but god it sucks. being an old house makes it literally 2-3x harder, though
like in a standard house with standard stuff, you can easily replace a lot of shite. in an old house with irregular shapes, things like fixing windows or door frames is beyond me
Posted on 6/10/19 at 9:04 am to MojoGuyPan
You couldn't be more wrong.
Or live within your means.
They CHOSE to go heavily in debt. Just because some entity will loan you a certain amount of money, doesn't mean that is the amount you should borrow.
To get ahead, buy a more affordable home with a 15 yr mortgage. Pay it off in 15 yrs, and move up in house.
Repeat again if necessary. Typically, homes appreciate in value.
pay cash for a used vehicle - vehicles depreciate in value.
quote:
"The only way to winning move is not to play."
Or live within your means.
quote:
People in heavy debt are not free men
They CHOSE to go heavily in debt. Just because some entity will loan you a certain amount of money, doesn't mean that is the amount you should borrow.
quote:
cost of housing increased...30 year loans became standard.
To get ahead, buy a more affordable home with a 15 yr mortgage. Pay it off in 15 yrs, and move up in house.
Repeat again if necessary. Typically, homes appreciate in value.
quote:
the price of cars and trucks when 72 and 84 month auto loans became the standard
pay cash for a used vehicle - vehicles depreciate in value.
Posted on 6/10/19 at 9:04 am to SlowFlowPro
Yea I can see that. I'm pretty handy and have flipped a lot if older houses so I guess I assume it's easy for everyone when in reality it probably isn't.
Posted on 6/10/19 at 9:04 am to SlowFlowPro
quote:
Simple Solutions to Complex Problems
quote:
in an old house with irregular shapes, things like fixing windows or door frames is beyond me
Posted on 6/10/19 at 9:04 am to Mud_Till_May
quote:
Why do I have to purchase a mortgage just to live in a house. Why cant I just save and buy?
The easier it is to finance something, the higher the base price will be (not even accounting for the cost of interest).
Look at cars. Few people pay cash anymore for a car, or even care how much the car cost. All they care about is the monthly payment.
Look at college. No one has to pay as they go anymore... you can get loans for all of it. Again, they only care about the monthly payment, and you don't even have to start paying it back until after you graduate.
If you want housing prices to come down, you need to make it a lot harder to get a mortgage.
Posted on 6/10/19 at 9:04 am to stout
quote:it may have made it worse, but the McMansion craze and the 2008 crash happened before the olds even had Facebook
I also blame a lot of the current debt picture on social media. Social media has made the "Keeping up with the Joneses" disease even worse. They see Suzy and Bob enjoying a vacation in the Bahamas so even if they can't afford it Barbara and Mark now feel like they have to keep up and finance a vacation to Hawaii.
Posted on 6/10/19 at 9:05 am to Boss
quote:
Oh my mistake. A quick search shows 144 new homes in west cobb over 650k.
I have no idea what you're looking at. I found 66 new construction homes in the entirety of Cobb over 700, most being in East Cobb or with Atlanta addresses.
There certainly are not 700+ neighborhoods flying up in West Cobb.
Posted on 6/10/19 at 9:06 am to stout
quote:
Yes they loan subprime it's not nearly like it was pre 08' so not sure why you're ing .
Ive been in the mortgage game since 03
Im laughing cause people dont realize its FHA who has been subprime some go down to 500 fico
quote:
no doc/stated income loans, etc.
These are all back for Self Employed borrowers and investment property owners
Not 110% crazy but they are back
This post was edited on 6/10/19 at 9:07 am
Posted on 6/10/19 at 9:08 am to stout
quote:
Yea I can see that. I'm pretty handy and have flipped a lot if older houses so I guess I assume it's easy for everyone when in reality it probably isn't.
shopping for new blinds was a pain in the arse yesterday. i have to either custom order everything (and pray it works while paying 3x retail) or accept sacrifices (like having cellular shades too long or not wide enough). i mean shite the fact that they use old double-paned windows limits what options are incredibly
i do agree with your premise but it needs to be the right house. i'd imagine 1 story built after WWII for starters. if you're putting in sweat equity to develop a house, a 2nd story is a potential nightmare (especially if your market is fixer uppers).
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