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It’s a long thread (600+ pages) starting in 2006 and I believe goes through 2010. So many posters didn’t see the bubble coming even in early 2007.
Which isn’t to say the market fundamentals then and now are the same. They clearly aren’t.
What that thread does demonstrate is that many people refuse to see a bubble even when all the signs clearly point to it, and that the arguments made then about prices continuing to rise in continuity were similar to the arguments made today.
It’s a long thread (600+ pages) starting in 2006 and I believe goes through 2010. So many posters didn’t see the bubble coming even in early 2007.
Which isn’t to say the market fundamentals then and now are the same. They clearly aren’t.
What that thread does demonstrate is that many people refuse to see a bubble even when all the signs clearly point to it, and that the arguments made then about prices continuing to rise in continuity were similar to the arguments made today.
I think you should state which posters specifically you are referring to. If it was someone ten pages back, maybe just let it go.
I don't see a bunch of posters saying prices are going to rise like they have been.
My DTI was and is zero. I have no recurring debt, and the small amount I carry on AMEX doesn’t impact credit utilization because it’s a charge card.
I personally would not feel comfortable with a loan 10% over my limit with rates increasing as fast as they are. Just feels to risky.
You are being obtuse. I obviously meant DTI including this hypothetical mortgage.
I ran a quick math scenario for PITI with a $150k HHI purchasing $500k and $550k homes (10% variance) with 20% down and 5% interest rate….the monthly payment goes up $300, front end DTI goes from 25% to 27%, still plenty of room to add a car note or student loan debt and stay comfortably under the 36% threshold underwriters want to see. Of course YMMV based on your income and purchase price but it’s not going to take DTI from 25% to 40% like you’re making it sound…
The problem is the lengths people are willing to go to buy a house, particularly an average or below average house. I have a hard time believing some of the hottest sellers are anyone's idea of a dream house. A lot of them are dumps. For people to be making offers significantly over list within hours and for people to even find out about those listings so quickly, they are going to some pretty drastic lengths for which there isn't much of a rational explanation.
It's shaping up to be a repeat of the Cabbage Patch Riots.
Not every house will go up or down in price similarly. In the case of a new build, you won't even have an earlier price for it to go up from. Comps become less meaningful the more houses they include.
All of your objections can be answered with a 'rational explanation' -
re: dream home - who says it's a dream home? I doubt many people are claiming a 1,350 sq ft 2/2 built 40 years ago in Coppell is a 'dream home'. Except my buddy who is 39 and single with no plans to marry and wants a smaller home with a large lot in an established neighborhood. My house is his dream AND forever home.
re: dumps - not only is this subject to interpretation, this is just another way of saying 'fixer upper' - nothing unusual here. This will still be correlated to better / more updated homes via cheaper prices, even if those cheaper prices are still heavily inflated.
re: significantly over list - supply and demand, economics 101. A house is worth what somebody is willing to pay, not what its listing price is. I think my 2011 Toyota Yaris is worth $5,000,000. She's been with me for 10 years through everything and I'll drive her until she explodes in a gas fire on the side of the road with me in at at 300k miles. If somebody wants to buy it from me, I'll sell for $5,000,000. KBB says it's only worth $3,200, though. I think they're wrong.
re: within hours of listing and to find out - agents know each other and share information. Within a day of telling our realtor we were thinking of listing within 2 months she called us and told us a couple she represents is in town and wanted to come look and would be willing to make an all cash offer at a premium if its what they want. We gave the # we would need (well over what we would list at) and they considered it, but ultimately went with another home. This is not uncommon at all. It's also not uncommon for a realtor to have instructions to 'tell us literally any time a house comes up in X that is listed' - and agents get this information quickly in real time. It's 2022.
Whenever I read one of your posts (or respond), it seems to always come back to this - you simply disagree / don't want to consider that other people act in a way different from the way you would act. That doesn't make it irrational. If we apply your same logic - any of these people would look to your reasoning and call it irrational. They act in accordance with X and you act in accordance with Y. X looks at Y as irrational and Y looks at X as irrational. Doesn't mean they're right and you're wrong, though.
All of your objections can be answered with a 'rational explanation' -
re: dream home - who says it's a dream home? I doubt many people are claiming a 1,350 sq ft 2/2 built 40 years ago in Coppell is a 'dream home'. Except my buddy who is 39 and single with no plans to marry and wants a smaller home with a large lot in an established neighborhood. My house is his dream AND forever home.
re: dumps - not only is this subject to interpretation, this is just another way of saying 'fixer upper' - nothing unusual here. This will still be correlated to better / more updated homes via cheaper prices, even if those cheaper prices are still heavily inflated.
re: significantly over list - supply and demand, economics 101. A house is worth what somebody is willing to pay, not what its listing price is. I think my 2011 Toyota Yaris is worth $5,000,000. She's been with me for 10 years through everything and I'll drive her until she explodes in a gas fire on the side of the road with me in at at 300k miles. If somebody wants to buy it from me, I'll sell for $5,000,000. KBB says it's only worth $3,200, though. I think they're wrong.
re: within hours of listing and to find out - agents know each other and share information. Within a day of telling our realtor we were thinking of listing within 2 months she called us and told us a couple she represents is in town and wanted to come look and would be willing to make an all cash offer at a premium if its what they want. We gave the # we would need (well over what we would list at) and they considered it, but ultimately went with another home. This is not uncommon at all. It's also not uncommon for a realtor to have instructions to 'tell us literally any time a house comes up in X that is listed' - and agents get this information quickly in real time. It's 2022.
Whenever I read one of your posts (or respond), it seems to always come back to this - you simply disagree / don't want to consider that other people act in a way different from the way you would act. That doesn't make it irrational. If we apply your same logic - any of these people would look to your reasoning and call it irrational. They act in accordance with X and you act in accordance with Y. X looks at Y as irrational and Y looks at X as irrational. Doesn't mean they're right and you're wrong, though.
Something is not right when everyone in the entire country is trying to buy a house at the exact same time. That does not happen as a result of people acting rationally. It's not what I would do or not do. It's based on historical precedent. There has never been a time in our history in which everyone tried to buy a house at the exact same time. They cannot all possibly have logical reasons even by their own standards.
Something is not right when everyone in the entire country is trying to buy a house at the exact same time. That does not happen as a result of people acting rationally. It's not what I would do or not do. It's based on historical precedent. There has never been a time in our history in which everyone tried to buy a house at the exact same time. They cannot all possibly have logical reasons even by their own standards.
Everyone is not trying to buy a house at the exact same time. Get your head out of your a** with this hyperbolic BS.
Not every lender is doing this, but I have absolutely heard reports of lenders recently approving loans at 50% DTI which is insane.
I have also heard of lenders not factoring in student loan debt into these DTI calculations, which the Biden administration has imposed a moratorium on until late August.
Again, it’s all anecdotal. I’m not suggesting this is rampant like 2007, but it’s clear many buyers are barely able to keep up with these rising rates and sky high prices, so some lenders are getting creative.
43%,45%, and 50% products are not new. And they aren’t that risky.
The 50% DTI conventional products conforming with Freddie and Fannie debuted back in 2017. They have reserve requirements. As does anything over 43%.
Freddie and Fannie require student loans to be counted as .5% of balance or 1% of balance if no payment is listed.
I purchased with 43% DTI, with 5% down and no reserves in 2017 at 4.25%. Refinanced in 2020 at 2.75% and removed PMI. Most people said it was a bad idea/dumb to buy at 5% down and 43% DTI. I said people are dumb for not trying to by in 2017. $272k to $465k in 4.5 years.
The listing agent told me that they had already received an offer close to $100k over listing price and it showed Pending about 2 days from the open house. Not sure what offer was "accepted" .. pains me to write this.. it's come to getting an offer "accepted"..like getting accepted to college of your choice .. I sound salty but I also see that this madness is still out there.
We are taking a breather and not FOMO'ing as much. Will keep an open mind and see how coming days and weeks shape up.
Like most who are out there looking, I don't understand anything anymore.
What are you seeing out there and how are you planning to handle this marker as a buyer, may I add first time home buyer?
Have been thinking of buying land (reasonable cost, close to $300,000 for 1 acre, in or around Plano), is that possible? I saw someone offering 5 acre of land in Rockwall for $500,000..I'm not looking to build in rockwall but sounded like a good long term investment opportunity.
Have been thinking of buying land (reasonable cost, close to $300,000 for 1 acre, in or around Plano), is that possible? I saw someone offering 5 acre of land in Rockwall for $500,000..I'm not looking to build in rockwall but sounded like a good long term investment opportunity.
There are only two lots in Plano for sale right now, one is zoned for office/commercial and it's 725k for 1.27 acres. The other is asking 1.3 million for a residential lot that is .73 acres.
There's a listing in Heath for 250k for 1 acre.
You have to go further out if you want a "reasonable" cost. We just got our appraisal from Grayson county the other day, the market value on a piece of land we own went up $375k in one year.
There's still some deals that pop up, but they're all north, northwest of Celina.
The listing agent told me that they had already received an offer close to $100k over listing price and it showed Pending about 2 days from the open house. Not sure what offer was "accepted" .. pains me to write this.. it's come to getting an offer "accepted"..like getting accepted to college of your choice .. I sound salty but I also see that this madness is still out there.
We are taking a breather and not FOMO'ing as much. Will keep an open mind and see how coming days and weeks shape up.
Like most who are out there looking, I don't understand anything anymore.
What are you seeing out there and how are you planning to handle this marker as a buyer, may I add first time home buyer?
Have been thinking of buying land (reasonable cost, close to $300,000 for 1 acre, in or around Plano), is that possible? I saw someone offering 5 acre of land in Rockwall for $500,000..I'm not looking to build in rockwall but sounded like a good long term investment opportunity.
I am not a first-time buyer but we were hoping to buy in Plano/Frisco/Allen.
Only made one offer and were beaten by 270K and our offer was 25th lowest offer.
We are looking in place around our initial city list. Looking in Lucas/Parker/Fairview/Murphy.
These cities have good schools as well. We are even looking in Prosper/Celina but the homes are expensive there as well.
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