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Keep calm and pretend house prices are based on underlying fundamentals. At least we aren't in dangerous territory like 2007. That was pure insanity. Today were are just in mild crazy.
About 10-12 years ago, the prediction was that the Baby Boomers' homes would hit the market around 2018-2020 and there would be a huge glut of homes.
Did not happen. People are staying in their homes, healthier today than before and even renovating them to meet their needs.
I think part of the issue is that baby boomers want to move but there is no where for them to go really. Our neighbors want to downsize but stay in the area. There’s nothing available. I also don’t think it makes sense to sell a home for like 900k just to move into a condo that is about 700 to 800k. In Boston that’s the reality and i don’t think it’s how people envisioned their retirement years.
Ive seen some people buy a cheaper 2nd home in FL and go back and forth between the two homes, snowbird style. Not everyone can afford that way of life
And yes I guess people being active and living longer has created some of this.
It’s interesting because people are having less kids. The birth rate is going down so i do have trouble understanding this housing crisis. I think people are just pickier about what they want today.
The situation is happening in Australia, I think in New Zealand and I am not sure about Europe.
It is puzzling that even in states like Victoria, which has lost people due to their Covid restrictions, there is still an almighty rush on real estate. Then Western Australia has cut itself off from the rest of the country and the world for the past two years and that hasn’t stopped the rush. Queensland has been the worst hit as the prices in Brisbane are half that of Sydney and many have been moving north, pushing out locals. Right now they are experiencing bad flooding so might alert potential buyers to do their searches more carefully.
We have had very few immigrants these past two years, so it is hard to see where the pressure on the market comes from. Sydney’s median house price has hit $1.6 million, $US1.15, everything is going in a few days.
The house actually seems like a pretty good deal at $260K. If I had lived in that area I would have checked it out, too. It went under contract in 2 days, probably because the owners wanted to have time to review all of their offers.
We'll have to see how much it actually sells for because I'm guessing that they got a fair amount above asking price.
The house was vacant and priced for a quick sale from the looks of it.
So the Realtors who pushed people who couldn't afford to buy a home back in I think it was 2008 didn't learn their lesson. Realtors never factored in all other expenses when they told their clients what the taxes would be and the loan amount would be. Not one considered people have to factor in all expenses when buying a home. The banks didn't either and everything came crashing down. Also I brought this up with a government treasurer that many of the people who never should have gotten a loan in the first place also took out a home equity line of credit and purchased RV's, new furniture, took vacations instead of for home emergencies. When they foreclosed they didn't have to pay that money back either. Every tax payer paid for that catastrophe when the banks bailed them out, at least I think they did.
We are going to watch the same mistake happen again. Realtors don't care because they get their commission upon the closing when the buyers get the loan they can't afford. Here we go again
Most broker/ agents will not spend time with a prospective buyer unless prequalified which is not the same thing as approved for a mortgage. No need to persuade anyone to buy anything.
The lender focuses on the monthly nut, principal, interest, property taxes, insurance and the borrower’s other debt vs down payment and income.
While many were impacted by COVID, most people were not despite receiving Stimulus Payments in 2020-2021.
Hard pressed to find a period of time like 2020- 2022, in terms of a 30 year fixed rate mortgage.
People are staying longer in the same home than they used to do. Most have refinanced at current rates. Demand exceeds supply ( inventory) in most areas.
It was really Wall Street, not realtors who drove the 2008 crash. Banks gave loans to people they knew couldn’t afford them, because Wall Street firms were willing to buy up all the bad debt to resell. Peoples mortgage companies got changed so often some couldn’t even find out who they were supposed to pay the mortgage to anymore. It’s not a realtors job to make sure a client can afford a house anymore than it’s a car salesman’s job to make sure you can afford the car you came in to buy. Thats the lenders domain.
The independent credit rating agencies assigned investment grade ratings to private label mortgage- backed securities. That opened the floodgates to conservative institutional investors. Public and private pension funds were essentially the source of funding for sub prime mortgages.
The three top rating agencies all claimed “ glitches” in terms of misunderstanding the paper behind private label MBS.
Had these private label securities not been rated investment grade, institutional investors would not have been able to buy them. Without ready, willing and able buyers, the sub prime loans would not have been funded, thus not created to the extent they were.
Then there were the home equity loans whereby the masses prematurely pulled the equity out of their home and many used it to live beyond their means.
Investors seem to be involved. There is more going on here than people simply out home shopping.
There are private investors who may own a small number of units they rent.
Then there are the corporate, often publicly traded, businesses that target certain areas with so- called affordable homes. They have cash and can close quickly. They tend to buy sight unseen and don’t cloud offers with contingencies.
Investors tend not to be interested in higher end properties or a lot of land. Higher end means different things in different places.
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