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There was a lot of pent-up demand and short supply. But the government is doing their best to distort the market again. My tenants who can't even pay the rent on time were just pre-approved for a $260,000 zero down loan. Get too many of those out there in the market and we are back to where we started.
Did you report them to the credit bureaus? If not, how would you expect the lender to know they had a problem paying their rent?
I am in Charleston, SC and what we are seeing is not just local but even down to certain areas of town and neighborhoods booming more so than others. As everyone without a 200k income or a million $ cash has been priced out of downtown, they are over taking the nicer outlying areas, and the folks priced out of those areas are looking at the nicer neighborhoods that were previously one wrung down. Factor in good schools, walkability or less traffic and you have some areas seeing 20% gains from last year.
We are also both a retirement and a relocation destination at the moment. So a lot of the $ are either from people moving in at higher salaries or having cash on hand from a home sale. My mother is in the process of buying a home here and she actually won out over a higher bidder because she (old & a lifetime saver) could close much faster than them with no financing worries. There were exactly 70 homes of all types in this zip code as of 2 weekends ago and she had 2 houses go under contract while she considered them so my mother moved quickly & used that as a bargaining chip. The sellers are banking the $ and buying a newly built home in the hot town on the other side of downtown. It's pretty common to see people using a local home sale to climb the property ladder since they can keep the same mortgage payment and through all their equity at a supersized down payment.
And while the area she will be has no inventory and the sellers new area if selling and pre-selling very quickly there are some local areas that just do not move quickly. That is the main difference between the current climate and 2006 when literally everything flew of the market.
Of course Florida real estate is a fraud. That's the whole point of the state.
Florida started being run as a real estate scam nearly 100 years ago and had the first of a continuing cycle of bubbles burst in 1925. I don't see what that has to say about the rest of the country being in a bubble or not.
Please raise interest rates this time so the bubble gets under control, and try to make it effective several years ago. We are in a bubble, it is not the same but it is a bubble.
One thing differing is last time engineers, scientists, manufacturing, industrial sectors were all ok though somebody might argue they were all ok. Now they are not, things keeping jobs in US are cyber security, databases, regulation, paperwork, management. These are not good news for RE since these are "light" careers/jobs.
A real estate increase that is real, and not a bubble, is driven by good jobs. The "good jobs" are not there.
Even in CA the jobs are about setting up a production line to move immediately overseas, then they fire you. Who wants to buy a house with jobs like that.
Employers all across USA hate American workers, yet RE is increasing. Just amazingingly wrong.
There was a lot of pent-up demand and short supply. But the government is doing their best to distort the market again. My tenants who can't even pay the rent on time were just pre-approved for a $260,000 zero down loan. Get too many of those out there in the market and we are back to where we started.
Pre-approved does not mean actually approved. Pre-approvals are easy to get.
I hope the bubble busts in Los Angeles. I have been trying to move back there, but with homes selling for crazy high prices in areas that use to be crappy, and rents skyrocketing I have my doubts that I will ever get back LA.
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