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It's good for the people (especially older folks soon to be retirees) who are selling in high price markets then buying in full cash or close to it, normally in the South. Looks to be a common scenario.
It's NOT good for the younger people, first time homebuyers without a lump sum from selling previous house, FHA buyers, or the less affluent.
I feel for the really young ones who want to buy a home in the near future. Not looking good for them.
To answer the question, people are still buying now because people will always want to become a homeowner, even when the cost is high. Rent has really soared too. It used to be you do much better with a mortgage than paying rent, cheaper. Now it equals out or the mortgage could be higher. Then again, when you don't own, you are continuously at the mercy of rent increases.
Edit: Want to add that the affluent cash buyers make it so FHA and average joes struggle to get offers accepted. That's what I'm going through right now.
Have to agree that being oceanfront is the main compensation for being in a condo. And being older and done with yard work. We have an enclosed garage attached to other garages and that's fine. HOA fees have not gone up at all in 6 years. No one wants that.
Re prices going up and down, I was shocked when I sold my Corpus Christi, TX condo and discovered it had sold in 2006 for $20,000 MORE than current pricing (2016). That was even oceanfront too, so hard to believe.
And that's the danger of buying in an "affordable" area. Although I think CC is picking up steam now.
Amazing how many people think housing prices will just keep going up at 15% year over year. This is such a sign that the bubble will burst sooner rather than later. "It's nothing like 2008" it doesn't have to be. "there's such a supply shortage" there has been for a while and that doesn't mean demand can't dry up.
This is the same ignorance and head in the sand mentality we've seen before, right before bubbles burst.
There's 1 reason prices would continue up, short supply.
It's good for the people (especially older folks soon to be retirees) who are selling in high price markets then buying in full cash or close to it, normally in the South. Looks to be a common scenario.
It's NOT good for the younger people, first time homebuyers without a lump sum from selling previous house, FHA buyers, or the less affluent.
I feel for the really young ones who want to buy a home in the near future. Not looking good for them.
To answer the question, people are still buying now because people will always want to become a homeowner, even when the cost is high. Rent has really soared too. It used to be you do much better with a mortgage than paying rent, cheaper. Now it equals out or the mortgage could be higher. Then again, when you don't own, you are continuously at the mercy of rent increases.
Edit: Want to add that the affluent cash buyers make it so FHA and average joes struggle to get offers accepted. That's what I'm going through right now.
I’d love to see data on the impact of retirees on the market - not sure if anyone tracks it to this level of granularity though. We’ve always had retirees who retired and moved south or west. I assume that with boomers retiring now, those numbers have increased but that’s close to a 1:1 ratio of buying:selling. The only difference now is that they’re getting more when they sell. I’ll bet most retirees are naturally limiting themselves when they buy, not wanting to take on any significant debt as they move to a different phase of life. Like you said, beats renting!
I agree with you I would not want to buy a house now. The homes are way overpriced. Yet people are buying them in my 4000 home subdivision here in Florida. A house rarely stays on the market a week and an offer has been made on it. I've noticed many of these homes are having the roof replaced shortly after the people move in. People buy these homes over the internet without seeing the home in person. I don't know if its like this all over the country, but that's how it is here in Florida. Definitely a sellers market down here.
A big reason people are having roofs replaced in Florida is because many with roofs that are 10 years old and up are no longer able to get homeowners insurance. There have been so many claims for new roofs statewide that the insurance companies aren't making enough money off of insuring Florida homes. Many insurers who issue homeowners policies are leaving or drastically raising premiums. If someone can't get insurance, their only option is Citizens, the government insurer of last resort.
We're not looking to move but purchase our snowbird home in SWFL.
We have no idea if we should stay in this holding pattern (3 years from retirement so we have time) or pull the trigger and buy something.
I think most people have a REASON for buying a house; they aren't just moving for the heck of it. And those reasons exist regardless of the market.
In our case we had to move to get away from the wildfire smoke in the west due to my wife's asthma and lung condition, and find somewhere with much cleaner air. Fortunately, we managed to make the move just before prices started increasing rapidly, but we would have had to move one way or another, regardless of pricing. There was simply no way we could have stayed through one, two, three, or who knows how many more wildfire seasons, whatever prices were like.
Amazing how many people think housing prices will just keep going up at 15% year over year. This is such a sign that the bubble will burst sooner rather than later. "It's nothing like 2008" it doesn't have to be. "there's such a supply shortage" there has been for a while and that doesn't mean demand can't dry up.
This is the same ignorance and head in the sand mentality we've seen before, right before bubbles burst.
There's 1 reason prices would continue up, short supply.
There's like 15 reasons why the bubble could pop.
I haven’t seen anyone here suggest they expect values to increase 15% year over year.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by HudsonCoNJ
I haven’t seen anyone here suggest they expect values to increase 15% year over year.
It's all local.
YLMV
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