Do You Think Housing Cost Will Go Up or Down??? (mortgage, loans)

[tysonsengineer]

Why are we arguing about pricing going down in the context of a bad thing. Sometimes prices should go down if its healthier as a whole. How many times have you heard, my god housing is expensive in this area, etc.

Its not necessarily a good thing for housing prices to constantly keep going up endlessly. It prices out young innovators and professionals, which eventually leads to a brain drain from the region, and ultimately blight in a much more serious way. Another way to think about this is, escalating housing prices are good for you, but your kids will be indentured renters if you keep wanting it to escalate forever.

[Quaker15]

Originally Posted by tysonsengineer

Why are we arguing about pricing going down in the context of a bad thing. Sometimes prices should go down if its healthier as a whole. How many times have you heard, my god housing is expensive in this area, etc.

Its not necessarily a good thing for housing prices to constantly keep going up endlessly. It prices out young innovators and professionals, which eventually leads to a brain drain from the region, and ultimately blight in a much more serious way. Another way to think about this is, escalating housing prices are good for you, but your kids will be indentured renters if you keep wanting it to escalate forever.

How much money do you make a year?

[tgbwc]

Originally Posted by tysonsengineer

Why are we arguing about pricing going down in the context of a bad thing. Sometimes prices should go down if its healthier as a whole. How many times have you heard, my god housing is expensive in this area, etc.

Its not necessarily a good thing for housing prices to constantly keep going up endlessly. It prices out young innovators and professionals, which eventually leads to a brain drain from the region, and ultimately blight in a much more serious way. Another way to think about this is, escalating housing prices are good for you, but your kids will be indentured renters if you keep wanting it to escalate forever.

A drop in housing prices finally allowed us to move close to our workplaces in 2009.

[FCNova]

Originally Posted by epe105

"If demand decreases and supply stays the same what happens to prices" - Price growth could be more balanced and not necessarily decrease. Prices could just grow at a slower rate(econ 102).

Please elaborate how supply could "easily" increase without new housing? One way I see supply increasing without new homes is if existing home owners move sell their house and do not buy a house within the area. I don't see a mass exodus leaving Northern Virginia anytime soon. Northern Virginia's population is only growing, so that could feed into higher demand.

Well actually no, econ 102 would still say if demand decreases and supply stays the same prices would go down. Supply/demand charts work like that. BTW even if your home price creeps up slowly the next couple years, if it's not keeping up with inflation it's not appreciating. I agree with you supply and demand will balance out, but that balancing act is going to be an increase in supply and either demand staying the same or decreasing.

Inventory levels have been much lower than normal without builders knocking down homes and leaving a pile of rubble, why are we dependent on builders throwing home up for the inventory levels to increase? I could be wrong but I don't think this is the new norm, this is the product of the recession. How many times have you heard of people who moved to buy a new home but rented their old one because it was underwater?

TE, I don't think it's a bad thing for prices to go down. The housing market is cyclical after all. I always find it an interesting discussion though.

[tysonsengineer]

Originally Posted by Quaker15

How much money do you make a year?

My household is at/slightly above the county median. Not sure what relevance that has on the discussion. Houses shouldn't be damn credit cards people. Learned nothing from the housing bubble? It is a cost of life to have shelter, owning vs renting vs mobility. But it is not an "investment" that is foolish to rely on something so intangible as a perceived cost considering the sticks and bricks of a home only make up 10 to 15% of its actual value.

[epe105]

Originally Posted by FCNova

Well actually no, econ 102 would still say if demand decreases and supply stays the same prices would go down. Supply/demand charts work like that. BTW even if your home price creeps up slowly the next couple years, if it's not keeping up with inflation it's not appreciating. I agree with you supply and demand will balance out, but that balancing act is going to be an increase in supply and either demand staying the same or decreasing.

Inventory levels have been much lower than normal without builders knocking down homes and leaving a pile of rubble, why are we dependent on builders throwing home up for the inventory levels to increase? I could be wrong but I don't think this is the new norm, this is the product of the recession. How many times have you heard of people who moved to buy a new home but rented their old one because it was underwater?

TE, I don't think it's a bad thing for prices to go down. The housing market is cyclical after all. I always find it an interesting discussion though.

You are correct on that point.

[jillybean720]

Originally Posted by FCNova

How many times have you heard of people who moved to buy a new home but rented their old one because it was underwater?

Yup. I now own two NOVA homes (rent one out because we're too upside down to sell) and have never sold a home. I'm eating up all the inventory!

[FCNova]

Originally Posted by epe105

You are correct on that point.

Nice. If you're desperate for the last word at least post something supporting your point of view. We're stating opinions, anyone can be wrong. You still haven't supported any of your points of why NOVA prices will continue to increase with anything except, "it's Northern Virginia lots of people are moving here" and "the only way supply will increase is if there's a mass exodus of people". What about lower demand from higher interest rates? Lower demand because institutional buying has stopped? Higher supply from people who are renting their places deciding to finally sell thus causing inventory to go up, which means less bidding wars driving prices up? These are all headwinds the housing market is going to face in the next few years. I don't see another crash but I think the housing market is going to have some issues when rates really start rising.

BTW did you see the housing data that was released this morning. Headline : sales of new homes plunge 15% in March.

Anyways, good talk

[airjay75]

Another interesting housing statistic I hear recently - I think it was on CNBC - was that house payments as a percentage household income are actually higher today than they were at the peak of the housing boom. The implication was that housing is actually more expensive today than it was during the peak of the housing boom and will have a moderating effect on housing prices continuing to increase the next few years.

The statistic sounds perplexing at first since a lot of home values are still lower than they were at their peak, but the reason for it is all the creative mortgages that were done during the housing boom - ARMs, interest only, pick-a-payment, piggyback, etc. Today, almost everyone goes with a 30 year fixed mortgage. Apparently, those creative mortgages of the housing boom often produced lower monthly payments than the 30-year fixed mortgages of today even with the record low interest rates. Since incomes haven't really increased that much, it makes housing more expensive today than during the housing boom.

I don't know whether these statistics are true with regard to the local real estate market, but I thought it was an interesting discussion.

[epe105]

Originally Posted by FCNova

Nice. If you're desperate for the last word at least post something supporting your point of view. We're stating opinions, anyone can be wrong. You still haven't supported any of your points of why NOVA prices will continue to increase with anything except, "it's Northern Virginia lots of people are moving here" and "the only way supply will increase is if there's a mass exodus of people". What about lower demand from higher interest rates? Lower demand because institutional buying has stopped? Higher supply from people who are renting their places deciding to finally sell thus causing inventory to go up, which means less bidding wars driving prices up? These are all headwinds the housing market is going to face in the next few years. I don't see another crash but I think the housing market is going to have some issues when rates really start rising.

BTW did you see the housing data that was released this morning. Headline : sales of new homes plunge 15% in March.

Anyways, good talk

Again, I agree with you. Except that your headline you are referring to was for all US homes and not Northern Virginia. Maybe you should post that headline in another forum.

Anyways, it was nice talking to you. Maybe next time you should learn to not insult someone if you want a discussion.