Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A crash would be good for renters if interest rates didn't rise. Rising rates offset a crash, so it won't make housing more affordable. In fact, depending on how high rates get, it could make housing less affordable for someone taking out a loan.
real estate crashes are because the local economy sucks ….
Something like 2008 would see rates fall unless the fed wanted to make the mistake Japan did
I don't understand why anybody wants to buy a house now! Prices are way , way high for houses. People are even in bidding wars where I live and bid on the same house to try to buy it. Ridiculous, live in an apartment, a nice apartment, until the housing goes down or crashes like in 2008. I feel sorry for anybody buying a home right now, they should wait!
We are under contract for a new build with estimated completion of August 2022. We currently live in an apartment since we sold our last house in September 2021. We already had sticker shock but the rep told us to go under contract before the end of the year because after 1 Jan, the prices will sky rocket even more. If the market continues the way it is, our new construction will appraise more than $100k over purchase price.
BTW, when we put our last house on the market, we had 3 people in a bidding war within the first 12 hours, for a very significant amount over asking price. Those 3 were actual realtors who got a "sneak peak" a few days before it hit the market. Our realtor was responsible for that.
If history is an indication of the future then rate hikes will have little to no affect on housing prices. Also, several of my friends who rent are in real trouble right now because their last lease renewal saw massive rent increases (one +$800mo). Had they had the credit or cash to buy their rent would have afforded them a nice home in a nice neighborhood that has seen the values rise over $100k in the same timeframe (12mo). The right time to buy is when you have the means to do it.
At this time we do not have this issue with property taxes as council rates do not vary much and land tax is only levied on investment properties, according to unimproved land value. But what we have to pay is a one-off tax on property purchase, called stamp duty. {.....}
That sounds as though it's still very much along the lines of the old British system, before they replaced local rates with Council Tax in the 1990's. As far as I'm aware the U.K. still has stamp duty too, but I know before I left the threshold at which it came into effect had already been raised to well above average prices.
... If the market goes down and the owner has to relocate, and they are upside down, renting the home out is a fine option.
That's only viable if in the local market, rents are comparable to the carrying costs of a house. If rent is $3000/month on a house that's $5000/month for interest-taxes-insurance-maintenance, then becoming a forced landlord, doesn't sound too delectable.
Quote:
Originally Posted by Brandon Hoffman
A crash would be good for renters if interest rates didn't rise. Rising rates offset a crash, so it won't make housing more affordable. ...
A crash is good for wealthy renters, who are sitting on a considerable pile of cash, waiting to be deployed. Or who are sitting on oil-company stock that they're waiting to sell... not that I'd know anything about that....
Quote:
Originally Posted by Remington Steel
...when we put our last house on the market, we had 3 people in a bidding war within the first 12 hours, for a very significant amount over asking price. Those 3 were actual realtors who got a "sneak peak" a few days before it hit the market. Our realtor was responsible for that.
When I put my former house on the market, just over a year ago, the realtor cautioned me that my asking price was too high. Said price was less than what I'd paid for the house, 20 years prior. Offers came in... most about 10% below asking. One was just a few thousand dollars below asking. That's the one that I took.
My mom sold her house in the West University area of Houston in the 1970's.
It was originally purchased for around $37K. She sold it when no one could figure out why anyone would want to buy it for $85K, and decided to rent. The lots alone today go for around $750K-$1 mil.
Who should you feel sorry for?
As a Texas resident, I do feel sorry for the people who can no longer afford the taxes on their home. I know someone being forced to sell their family home for that very reason. It's a family home, been paid off for decades, but they are older and retired and on a fixed income. Their taxes are now about $13K a year. This is a 1600 square foot house built in the 1960s that hasn't reaelly been updated. But it's now worth ~$800K.
For those who don't know, Texas reassesses property values every year and taxes them accordingly. We bought our house 17 years ago. In that time, our property taxes have more than tripled and are now more than our mortgage. Sure, we could sell. But where would we go? Everything else here has increased just as much. Also not really practical to quit and find new jobs and pull our kids out of the only schools they're ever known while they are in high school. I also think it's borderline criminal to be taxed on a gain that we haven't realized. What if values plummet and we sell before they go back up again? We were taxed on a dollar amount that we never saw.
For those who don't know, Texas reassesses property values every year and taxes them accordingly.
When my wife and I started looking for potential places to move about 3 years ago we considered a few places in Texas. I know Texas doesn't have a state income tax, but it was what appeared to be quite high property taxes coupled with no apparent limit on increases I could find which put us off, and partly why we ended up in Arkansas instead.
Years ago when I was in my 20s...we bought a house ... for $84,900... Looking back, it would have been a horrible financial decision to pay off that house completely...25 yrs later, its value is nowhere close to $252K.
I will counter your anecdote with:
* bought our house in 2011 for $482K.
* current market value (I have relevant recent sales in the immediate neighborhood) is a bit over $1M
And, in our statistical neighborhood of 10,000 people, there are 7 buildings for sale.
One is a small apartment building.
One is a scraper for $600K.
It's easy to see how this type of housing market could severely limit those starting from zero. - However, in what is almost a nationally inflated, supply-limited housing market, it can (as usual) be assumed that those changing homes or moving-up ... also own inflated housing that will help them keep pace.
In such times, it's easy for one (whose home has perhaps doubled in value over the past several years) to think, "wow, my house-wealth looks great; .... without considering the equal, boat-rising inflation impact on replacement housing.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
