People are not selling to buy because replacement homes are too expensive. What happened during the last bubble? (Realtors, listings)
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If you were in business during the last bubble, did homeowners have the same thoughts about not selling because replacement homes were not a good value?
That's the argument now.
But your home is higher in value, other homes are higher in value.
You're not really getting less for your money if you buy shortly after you sell.
Mr. seller doesn't expect to sell high and buy low right now, does he?
In greater Denver, inventory has plummeted.
The only explanation is that no one wants to sell.
And, no expert knows the reason why.
1. People are content to live where they live now?
2. People like their current low interest rate?
3. People have finally understood the true cost of selling/buying?
4. The Great Recession scarred them for life?
20+K people are moving into greater Denver every year and for sale inventory has declined. This is very abnormal.
"Normal" inventory would be 20-25K. It was during the 90s and and all the way up to 2007.
My thoughts are that I would not say there is a housing bubble but if the overall economy fails then housing prices could stagnate. Now the only thought that houses are at a higher value could be attributed to the extremely low interest rates but we all know this will not last forever so when rates rise house values may have to come down some to accommodate higher payments for buyers.
Location: Stuck on the East Coast, hoping to head West
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I plan to sell, but not buy. Here are my reasons:
1) I'm in a really good place. I have equity---quite a bit. Do I want to put that back into another house? Heck, no.
2) I'm paying a $1200 mortgage (this is after a cash out refi) on a house that would rent for at least $2500. Pretty good deal for me. Crazy high cost of living here, but my family is doing great.
3) My neighborhood has greatly improved since I moved here. It's one of the most desirable in the area. We have a 5 year old elementary school, redistricting to an A middle school, and we're getting a new high school in 5 years. Add new shopping center that just opened and one of the lowest costing HOAs in the region. We also have 2 pools, walking trails, and tennis courts.
4) Selling & buying costs
5) If I were to move up to the next neighborhood, I'd have to put all my cash down, and double my monthly payment for the new mortgage. That's no counting higher taxes, utilities, and general upkeep. No thanks.
My overall feeling is that I like my lifestyle. I like saving money. This is about as good as its gonna get in my area. I'm not willing to take on more debt for a slightly nicer house with less amenities. I plan to take my equity and go somewhere cheaper out of state.
I plan to take my equity and go somewhere cheaper out of state.
that's legit.
I just keep getting survey reports from California assoc of realtors suggesting that people are not selling to buy because everything else is expensive.
Even those who want to downsize don't think there's good value.
I think that's a flawed way to think about it.
Oh, and the last email I got states that millenials are buying in podunk.
Rising home values have pushed them to the most undesirable places.
From my perspective, the buyers I have worked with in the last few years have looked at their purchase as a forever home or a long term home. I think the days where people buy with the intent to upgrade in a few years are gone, at least for now. Life changes and people have to relocate, downsize, bring in a family member so upsize, so there are listings...just not as many.
Capital gains tax is what will kill me. Because I have owned my acreage home a long time and I own as a single person, I will end up losing about 30% of the sale price to taxes. Selling would not make sense just to find a new place.
Prior to the last bubble as homes were moving quickly, people THOUGHT they could afford to upgrade. Interest rates were dropping as the values were going up, and loan programs with interest only or variable rates existed large bonus's thru employers were more common, and some folks were getting raises that they hoped would continue to coincide with rate increases.
People were also locking in quotes on new homes and by the time they were built they often were getting 5-10% more on their existing home when it sold than originally planned..
I believe all of these real estate anomalies are due to the continued artificially low interest rates. We will never have normalized housing, or allow wages to catch up with rent and home prices, as long we continue ZIRP. It will not end well.
"People are not selling to buy because replacement homes are too expensive. What happened during the last bubble?"
Does it make any sense? Let's try a few estra words.
People are not selling their Million Dollar homes to buy because 100k replacement homes are too expensive. What happened during the last bubble?
This is called "Logic and Reasoning."
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Denver is where I live
