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I was reading an article this morning that stated:
Nonetheless, continued job growth stimulating the creation of new households along with pent-up demand from years of historically low housing production, should keep both home values and rental rates on the upswing for the second half of the year.
Is this guy correct when he says there is strong job growth and I am assuming strong income growth as well (that's necessary right, I mean strong job growth can be more burger flippers which is pointless - I am assuming strong growth in highly compensated jobs)
Rents will also be on the upswing? Aren't rents exceptionally high in Southern California as it is? This guy states rents are also going to be on the upswing? Maybe that is also tied into his statement that there is very strong job and income growth?
Unfortunately, I can neither see job growth or income growth... all I see is people complaining about stagnant wages, difficulty finding stable employment etc. Where are all these people who are exhibiting strong job and income growth?
So, it comes down to this...either most people are getting huge raises and high paying job offers left and right and then lying about being poor OR this "economist", Mr. Marco Sessa, chairman of the Building Industry Association of San Diego County and senior vice president of Sudberry Properties, is full of crap...which is it?
Regardless what you think about job growth last I heard there is 1.1 million shortage of housing. Since the state intent of changes is to get back to 65% historical levels of homeownership ;it stands to reason ; more demand for rentals. Just has many will be getting a raise with ACA subsidy and others will be getting the bill directly and indirectly. In 2017 when states take over a portion of the increased Medicaid then anther bill. If it where not for unions and government employees objecting to eliminate ing their healthcare system private insurance might disappear. IRS objecting ;unions objecting exemptions and delays. As Baucus (D) called it a "Train wreck" in speaking of the ACA.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Depends on where you are. Here too, big companies are expanding and hiring, and we continue to get an influx of new immigrants from other states and countries. They all need places to live so home prices and rents go up. We are at about 85% of 2006 peak prices and rent is higher than back then. Homes are still selling in a day or two with multiple cash offers over asking.
Yes, in some places earlier than others. But in the longer term QE will have a delayed impact that will lead to interest-rate increases that will have an opposite effect on housing prices. But the timing and magnitude of the lagged impact of QE on interest rates is very uncertain. I think it will occur more rapidly than the the FED will be able to respond to check it.
Your dollar is worth less and less, and it is going to take more of them to buy anything, not just housing. You'll pay more for food, gasoline, electricity, clothing, and on an on.
By the way, if you want to limit how much your monthly hosing costs you, buy now with a fixed rate mortgage.
Your taxes and insurance will still go up, and your repairs will cost more and more, but still, that mortgage payment stays the same and isn't going up like your rent is going to do.
For a while, it may work like 'ice cream'. You pay the same, but, keep getting less and less. Pretty soon, instead of a half gallon, you will get a pie-shaped quart-wedge at the old half-gallon price. Houses and Apartments are similar. This is largely because fewer people are working and those that are, are making less money. Thus, the market place will strive to maintain the illusion of 'value' as long as possible.
The rental market is also being driven by the demands of people who can no longer qualify to buy and must now rent. The housing market is not actually being driven 'up', but, rather, recovering lost value because folks who can still qualify to buy, realize that they could quickly be driven out of the housing market by rising prices (self-perpetuating situation). In either case, both housing prices and rentals are going up, but, folks are getting less for their buck, than before.
Your dollar is worth less and less, and it is going to take more of them to buy anything, not just housing. You'll pay more for food, gasoline, electricity, clothing, and on an on.
So, if rents are constantly rising along with other items as well and incomes are not then what is the end result? Ultimately there will be a point where nobody can afford to rent, or even live really...
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