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Old 05-26-2022, 01:00 AM
 
Location: Las Vegas & San Diego
6,913 posts, read 3,401,782 times
Reputation: 8630

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Quote:
Originally Posted by redguard57 View Post
Yeah the problem now is not loans given to people who can't afford them. With unemployment at 3.6% we are in labor shortage so anyone who wants a job can have one.

The problem now is everyone is stretched to the limit of the % of income toward housing they are paying.

The issue this time will be if there's a recession & people lose their jobs. Suddenly they won't be able to make their mortgages that were half their former income.
Your post is kind of nonsense - affording a loan means not stretched to the limit or mortgage that is half of their income - normally loans are based on 28% of income.

Why do you think "everyone" is stretched to the limit - that sounds more like just a few that are currently buying rather than everyone. More than a few own their houses outright or have relatively affordable payments after years of salary increases with a fixed rate mortgage.
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Old 05-26-2022, 05:17 AM
 
Location: Prepperland
19,029 posts, read 14,254,962 times
Reputation: 16767
When I bought plywood (4x8) a few years back it was $20-$25 a sheet. I just check Home Despot and they sell for $60 and up.
THREE TIMES THE PRICE.
That may explain why "old wood" is selling at a premium.
Until new production drives the price down, new houses will be veddy veddy 'spensive.

And if prices never fall - oi.
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Old 05-26-2022, 06:47 AM
 
Location: Oregon, formerly Texas
10,075 posts, read 7,270,764 times
Reputation: 17151
Quote:
Originally Posted by ddeemo View Post
Your post is kind of nonsense - affording a loan means not stretched to the limit or mortgage that is half of their income - normally loans are based on 28% of income.

Why do you think "everyone" is stretched to the limit - that sounds more like just a few that are currently buying rather than everyone. More than a few own their houses outright or have relatively affordable payments after years of salary increases with a fixed rate mortgage.
Basically everyone who has bought during the run-up. The wages jobs pay do not justify these prices.
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Old 05-26-2022, 07:43 AM
 
11,178 posts, read 16,051,859 times
Reputation: 29946
Quote:
Originally Posted by Wolverine607 View Post
My grand parents who passed away long ago had a house built in 1967 and had only a 15 year mortgage they paid off in 10 years or maybe less. And they stated that was more the norm back then.
They were wrong.


Quote:
Originally Posted by Wolverine607 View Post
And HELOCs loans being around forever. I doubt that.
We were discussing home equity loans, not HELOCs. You do know the difference, don't you? A HELOC is a line of credit, similar to a credit card. As I told you before, home equity loans have been around forever. Feel free to look it up yourself.


Quote:
Originally Posted by Wolverine607 View Post
It was in the 90s they came about with repeal of Glass Steagal. My grandma said no such things were around back in the 50s and 60s. SO at least they were rare or not widespread back then
Your grandma, and you, are wrong. BTW, the exploding popularity of HELOCs had absolutely nothing to do with the repeal of Glass-Steagall, and actually predated that repeal by more than a decade. It had to do with tax reform in the 1980s which eliminated general interest charges as deductible. Only home mortgage interest or loans tied to home improvement were still going to be deductible. HELOCs and home equity loans were ways to qualify under the Act, even if the money wasn't actually used for home improvement.
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Old 05-26-2022, 12:37 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,364 posts, read 8,611,109 times
Reputation: 16716
Quote:
Originally Posted by frankrj View Post
Since some don't trust real estate vets of 20 yrs

Let's try these searchable key indicators below online.

"New Homes Sales Tumble in April, Down Nearly 27% From a Year Ago"

"U.S. existing home sales fall for third straight month; house prices at record high"


What happens when sales fall or there's little to no interest? The seller has to _______ their price to sell the home.
You seem easily influenced by media click bait words that exaggerate to get your attention. Delve deeper and you will see part of the reasons is less inventory.
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Old 05-26-2022, 12:41 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,364 posts, read 8,611,109 times
Reputation: 16716
Quote:
Originally Posted by frankrj View Post
I am not who you replied to but I am not hoping for a crash either just a correction in marginal to bad areas that should not have appreciated 20-40% in 1-2 years. Those areas are pure speculation because those areas are still the same as years ago. They don't have have anything desirable; low rated schools, low paying jobs, nothing to do nearby, lack of public transportation. The affluent areas may see a small decline of 10-20% but nothing major over 2-3 years. The way it's usually works.

The first step for a housing decline is occurring now. Major companies are freezing hiring or starting layoffs.
Unemployment rate goes up. People move in with others instead of their own place, and rent concessions start by next year. This lowers rents. There's less remote jobs offered than the previous year as virus fears are less concerning.

And why get all worked up if it does decline (as it should). If it's a home you really like you aren't moving. I certainly wouldn't and most people aren't selling anyway. This supports the non-crash argument very well. It's a great debate.

Also, we should not ridicule during debate with tiwtteresque comments "life with blinders". Just saying man. Don't take it the wrong way. We (me too) can all get caught up in this in an emotional topic that deals with money.
Speaking of money if he/she's bills are fixed at $2-4k a month, that $70k can last 1.5 to 2.5 years.
Most Americans have less than six months liquid savings which is sad. Otoh, the Chinese are great savers.
I agree about most Americans don’t have a good reserve. But asking for a harmful correction because they think they are immune is just selfish. He made strong statements so I stand by with my life with blinders comment. He has a narrow view of what what actually happen.
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Old 05-26-2022, 12:55 PM
 
Location: Las Vegas & San Diego
6,913 posts, read 3,401,782 times
Reputation: 8630
Quote:
Originally Posted by redguard57 View Post
Basically everyone who has bought during the run-up. The wages jobs pay do not justify these prices.
Not "everyone" or even most who bought during the run-up is close to "maxed out" - most that bought recently conformed to the standards for mortgages with 28% or less in payments that is the standard for ensuring that the mortgage is affordable and within budget. The "run up" is just supply/demand economic forces - that is what is justifying these prices.
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Old 05-26-2022, 01:42 PM
 
Location: Oregon, formerly Texas
10,075 posts, read 7,270,764 times
Reputation: 17151
Quote:
Originally Posted by ddeemo View Post
Not "everyone" or even most who bought during the run-up is close to "maxed out" - most that bought recently conformed to the standards for mortgages with 28% or less in payments that is the standard for ensuring that the mortgage is affordable and within budget. The "run up" is just supply/demand economic forces - that is what is justifying these prices.
Did people suddenly start making 100% more salary than 3 years ago? Because I sure didn't.
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Old 05-26-2022, 03:17 PM
 
Location: Las Vegas & San Diego
6,913 posts, read 3,401,782 times
Reputation: 8630
Quote:
Originally Posted by redguard57 View Post
Did people suddenly start making 100% more salary than 3 years ago? Because I sure didn't.
Where do you get 100% more - the data from the FRED shows the US average housing prices increased about 37% ($313K 19Q1 to $428.7K 22Q1) and price index increased about 21% (129.8 19Q1 to 157.5 22Q1). In high cost areas, housing prices went up less, the FRED tracks CA separately and it went from $646.6 19Q1 to $838.8 22Q1 - a little less than 30% increase.

Much of the activity was upsizing where buyers applied prior gains to the purchase, reducing the portion that was financed - no added income may have been needed to get a more expensive house. The data from the FRED shows a significant decrease in % of income used for mortgage debt service to the lowest level since the data was first collected in 1980 (under 4%) - so shows even with the price increases, housing was more affordable.

I am retired - my "fixed" income increased significantly though, with significant increases in COLA adding to pension and SS and about 70% in market gains adding to withdrawal rate even with the recent downturn. I could easily buy a house in almost every area of the country at current rates but already have several, not really looking currently.
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Old 05-26-2022, 07:13 PM
 
Location: Free State of Florida
25,956 posts, read 12,968,255 times
Reputation: 19456
Op...define bubble...specifically. What % of increase then decrease over what period of time constitutes a bubble?
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