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Old 05-26-2018, 09:43 AM
 
340 posts, read 163,729 times
Reputation: 550

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Quote:
Originally Posted by photogal9 View Post
People will keep buying, even as prices go up and up, beyond their actual value. FOMO....

People have short term memory issue's. There's a run-up in play and most are all in the game.

I was actively looking to buy, now I'm observing and will continue to do so. Something doesn't smell right, and it goes beyond the real estate market. When people show you who they are, believe them. When the markets shown you it's instability and greed, believe it. It's unsustainable, buy in and regret it, wait for the correction and debt reset, enter the game more aware.

Just my .02....
Sounds like we’re on the same page Out of curiosity, which market are you in that has caused you to decide it’s overheated?

Too bad houses are now treated like stocks instead of places to live.
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Old 05-26-2018, 10:40 AM
Status: "In an Involuntary Time Warp" (set 26 days ago)
 
7,860 posts, read 10,158,141 times
Reputation: 11427
Quote:
Originally Posted by Greeniejeans View Post
But, as you say, they are already unaffordable for many, so if they keep going UP, who is going to buy them?
They take on more debt. But, you wonder when things are this "stretched," (and it does seem to be a real issue in many places now, not just an opinion) it only seems common sense to wonder if something will stretch the rubber band more than it's ability to withstand it. Homeostasis is a principle in all of life. Things have to be in balance. It seems unbalanced right now.
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Old 05-26-2018, 11:34 AM
 
595 posts, read 377,315 times
Reputation: 1021
Quote:
Originally Posted by Cubicle Dweller View Post
Sounds like we’re on the same page Out of curiosity, which market are you in that has caused you to decide it’s overheated?

Too bad houses are now treated like stocks instead of places to live.
I'm in the Midwest, high tax state on all levels, corrupt politicians, pension issue's, etc...

I'm an entry level buyer, lump me with first time buyer's & add in experience with the market on both sides.

I believe Bo mentioned in a post (not sure if in this thread or another), that quite a few of his clients are not buying at the amount their LO has approved them, but lower than, and that's were I'm at right now. If a property in a location that I like comes on the market around 60%-70% of my approved amount, I'll look in to it. Otherwise, I'll reserve the right to wait it out and be grateful I can.

Btw, I have family in Vegas, been there too many times and never again, I'm not a desert person. A younger family member with their spouse ( and 1 year old), purchased a new home last year there. At a cost of $290K. I'm dumbfounded, they're under 30, they do not have "careers" yet and they jumped in as opposed to glide in. I guess people have to learn the hard way, which is unfortunate.
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Old 05-26-2018, 12:05 PM
 
340 posts, read 163,729 times
Reputation: 550
Quote:
Originally Posted by photogal9 View Post
I'm in the Midwest, high tax state on all levels, corrupt politicians, pension issue's, etc.

Btw, I have family in Vegas, been there too many times and never again, I'm not a desert person. A younger family member with their spouse ( and 1 year old), purchased a new home last year there. At a cost of $290K. I'm dumbfounded, they're under 30, they do not have "careers" yet and they jumped in as opposed to glide in. I guess people have to learn the hard way, which is unfortunate.
Vegas is not an educated city - half the houses we look at have a brand new huge raised pickup in the driveway with a huge side-by-side ATV sitting in the garage. Even our realtor pointed out how recklessly people spend in this city.

We love the desert, but itís definitely not for everyone. First time I went to Vegas years ago my rental car was broken into and the cops didnít care. I was appalled and hated Vegas for years, but I eventually gave it a second chance. At this point in life LV works well for us for several reasons but I expect very little from the services here. The state we came from (and still do own some property) has the same issues as your location - especially on the underfunded pension and corrupt politician front. Throw in some crumbling 110 year-old infrastructure that is on borrowed time and thereís no political will to fix it. The infrastructure problems were a huge reason why I wanted to leave. If a major artery into NYC collapses then property values will plummet.
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Old 05-28-2018, 01:21 PM
 
722 posts, read 1,668,007 times
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In the RALEIGH market. Seen several now subdivisions offering 0% down incentives. I personally know of 3 couples at work that bought their 1st home with 5% down. They also skipped the 1st time home all together and bought a $400,000 house because they say it’s an investment (because that’s what they’ve Seen in the last 4 yrs). Starter home here is around $200,000. I know a couple that’s moving up to their second home priced $650,000. They make $150,000 and have 20% down. A friend locally bought a house $490,000 on a $120,000 income and have a newer Suburban and Acadia. From what I’m seeing, people are stretching their budgets and looking at housing as an investment...especially the younger generation. We are very conservative with our money and would feel nervous stretching like that. I would be nervous about a downturn just because of the stretching mentality.
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Old 05-28-2018, 01:57 PM
 
126 posts, read 41,386 times
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^^^ This is what worries me! Our friends were concerned when last October their 27 year old neighbors bought a brand new home for $399,000 on combined income of $80,000. These kids were on top of the moon and couldn’t believe they qualified. It’s now for sale 7 months later. Not good.
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Old 05-28-2018, 02:12 PM
 
Location: Los Angeles (Native)
24,191 posts, read 13,703,254 times
Reputation: 11386
Quote:
Originally Posted by mjohnson185 View Post
In the RALEIGH market. Seen several now subdivisions offering 0% down incentives. I personally know of 3 couples at work that bought their 1st home with 5% down. They also skipped the 1st time home all together and bought a $400,000 house because they say itís an investment (because thatís what theyíve Seen in the last 4 yrs). Starter home here is around $200,000. I know a couple thatís moving up to their second home priced $650,000. They make $150,000 and have 20% down. A friend locally bought a house $490,000 on a $120,000 income and have a newer Suburban and Acadia. From what Iím seeing, people are stretching their budgets and looking at housing as an investment...especially the younger generation. We are very conservative with our money and would feel nervous stretching like that. I would be nervous about a downturn just because of the stretching mentality.
Yeah from what Iíve seen it seems that DTI can go up to 45% of income .

Income and jobs are safe and secure until they arenít . Last recession a lot of people were making good money with the strong economy in certain jobs but then had to take much lower paying jobs .

If combined with low or no savings in the bank thatís risky .

Everything is a risk to some degree though .

The further time goes on though the less risky if one has a fixed mortgage . Think of people that bought say 20 years ago on a 30 year mortgage . Their mortgage payments are a lot less than what they would spend renting the same place Iím sure . Over years many people are making significantly more too as they advance in careers

I donít know the Raleigh market well but I know itís a growing market .

The Suburban and Acadia arenít good investments though .
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Old 05-28-2018, 02:13 PM
 
Location: Los Angeles (Native)
24,191 posts, read 13,703,254 times
Reputation: 11386
Quote:
Originally Posted by Greeniejeans View Post
^^^ This is what worries me! Our friends were concerned when last October their 27 year old neighbors bought a brand new home for $399,000 on combined income of $80,000. These kids were on top of the moon and couldnít believe they qualified. Itís now for sale 7 months later. Not good.
Are they selling it because they canít afford it or moving out of area ? How much are they selling it for ?
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Old 05-29-2018, 09:03 AM
 
Location: Raleigh NC
7,773 posts, read 6,128,244 times
Reputation: 6905
Quote:
Originally Posted by mjohnson185 View Post
In the RALEIGH market. Seen several now subdivisions offering 0% down incentives. I personally know of 3 couples at work that bought their 1st home with 5% down. They also skipped the 1st time home all together and bought a $400,000 house because they say itís an investment (because thatís what theyíve Seen in the last 4 yrs). Starter home here is around $200,000. I know a couple thatís moving up to their second home priced $650,000. They make $150,000 and have 20% down. A friend locally bought a house $490,000 on a $120,000 income and have a newer Suburban and Acadia. From what Iím seeing, people are stretching their budgets and looking at housing as an investment...especially the younger generation. We are very conservative with our money and would feel nervous stretching like that. I would be nervous about a downturn just because of the stretching mentality.
this is about 30% of their income - a bit high, but not insane. If the house were their only debt, then going over on the 28% but staying well below 36% isn't really an issue.
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Old 05-29-2018, 07:59 PM
 
27,530 posts, read 44,987,445 times
Reputation: 14064
Quote:
Originally Posted by mjohnson185 View Post
In the RALEIGH market. Seen several now subdivisions offering 0% down incentives. I personally know of 3 couples at work that bought their 1st home with 5% down. They also skipped the 1st time home all together and bought a $400,000 house because they say itís an investment (because thatís what theyíve Seen in the last 4 yrs). Starter home here is around $200,000. I know a couple thatís moving up to their second home priced $650,000. They make $150,000 and have 20% down. A friend locally bought a house $490,000 on a $120,000 income and have a newer Suburban and Acadia. From what Iím seeing, people are stretching their budgets and looking at housing as an investment...especially the younger generation. We are very conservative with our money and would feel nervous stretching like that. I would be nervous about a downturn just because of the stretching mentality.
Some responses to your points

1--people spending more to buy bigger/newer/decked-out house--
Too much HGTV and FOMO on the "good life"

2-credit reports says that more people are delinquent on their car loans and credit card bills than they were a year ago...
Higher gas prices creeping into the budget and inflation...

I wonder if anyone has looked at their change and what types of coins are showing up in their change...
I know so many people pay for almost everything w/credit on their phone--but I still use money for things like fast food, stamps, and small purchases...

Right now I am seeing more dimes and pennies than quarters--
To me that says prices are going up--and change is coming back w/fewer quarters...
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