Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You like to keep spewing this without presenting any hard facts. Looking at a 15 year approach, the houses (at least in the Denver Metro) have increased on average of 3%. So while on a micro level it looks like huge increased due to the crash in 2008 and the huge uptick in the last 3-4 years, for the long term, it's remained pretty consistent with inflation.
On top of it, real estate is completely local. In areas like Denver or SFO or Seattle or Portland where there is limited land available (or limited desirable land) and a limited number of houses, prices are being driven completely be demand-side economics.
This, combined with it still being cheaper to have a mortgage than it is to rent makes it worth-while in the long run to buy, even at high prices. You need a place to live. If that's a $330,000 house with mortgage payment of $1650 or a rental house with a rent payment of $2000, that money is going somewhere.
It's always you. You're like 10 years old telling me about the market, but you have no idea what indicators to look at. You're not looking at everything, which is why for you, this will be a black swan.
What hard facts are you referring to? You can easily verify everything I just pointed out. Again, why this event will be a black swan for some.
The US is expected to grow at 2.3% in 2017, 2.3% in 2018 and so on, until GDP plateaus at 3.0% in 2020 and remains there until the end of calendar 2027.
What this means is that the White House is assuming there will be no deficit for the entire duration of the projected 10 year period!
But that's not all, because it also means that the White House budget is based on the assumption that the expansion that started in June 2009 will last at least until December 2027, or an absolutely unprecedented 222 consecutive months of expansion.
There is a problem with that: an expansion of that duration - nearly 19 years in a row - would not only be the single longest expansion in American history, but it would also last double the next longest duration ever recorded in the US, the expansion which began in March 1991 and ended with the dot com crash, in March 2001.
It's always you. You're like 10 years old telling me about the market, but you have no idea what indicators to look at. You're not looking at everything, which is why for you, this will be a black swan.
What hard facts are you referring to? You can easily verify everything I just pointed out. Again, why this event will be a black swan for some.
I got it
Lower interest rates = growth. Higher interest rates = less growth. Affects everybody, not just housing. Businesses might stop expanding as rapidly, less start-ups, etc. This could affect job growth and investment leading to less jobs available.
Yes, that can be related to housing pricing, but it's not a 100% correlation. Demand is what drives housing prices.
Even if house prices drop a little due to higher interest rates, your monthly payment could remain the same.
If I'm paying $1268/month at 4.00% on a $330k house (P&I only) or $1268/month at 5.00% on a $299k house or $1268/month at 5.50% at $285k house. The fact is that my monthly payment is still the same. Yes, the value of my house might drop, but my payment stays the same.
This, of course assumes that home values will drop much in the first place. As I said, long term inflation on the houses I've seen is an average of 3% over 17 years (2000-2017) which removes the drop in 08 and the high increase the last year. 3% per year growth on the long term isn't unreasonable.
Plus, again, you're not including the areas that have only a faction of housing on the market vs what the market demands. If you're in a market that has houses having 10+ bids on them, raising interest rates might take it down to 5 bids. That doesn't mean that pricing will drop.
Where it will hurt the most? Slow markets. Rural areas. Areas being revitalized (where profit for flippers/investors is higher). McMansions.
If you're in the market for 7+ years, a downtick in the market won't be a show-stopper
You like to keep spewing this without presenting any hard facts. Looking at a 15 year approach, the houses (at least in the Denver Metro) have increased on average of 3%. So while on a micro level it looks like huge increased due to the crash in 2008 and the huge uptick in the last 3-4 years, for the long term, it's remained pretty consistent with inflation.
On top of it, real estate is completely local. In areas like Denver or SFO or Seattle or Portland where there is limited land available (or limited desirable land) and a limited number of houses, prices are being driven completely be demand-side economics.
This, combined with it still being cheaper to have a mortgage than it is to rent makes it worth-while in the long run to buy, even at high prices. You need a place to live. If that's a $330,000 house with mortgage payment of $1650 or a rental house with a rent payment of $2000, that money is going somewhere.
One thing about looking back over fifteen or twenty years is that the 2008 crash fundamentally changed a lot of things with regard to job market structuring. A lot of the reasoning that was valid in 2000 no longer applies. While places like Denver may have appreciated for 3% annually averaged out over a long enough period, that 3% over thirty years or so means nothing to someone today who is trying to enter a real estate market zooming up 10% annually or more.
Like I mentioned either in this thread or some other real estate thread, a generation ago, many small towns and metro areas were somewhat economically viable. Not only did you have manufacturing in many of these areas, but there were also a lot of white collar offices associated with the blue collar work that either closed down or were sent to major metro areas.
These days, there isn't much professional work, certainly white collar work, left in small or even medium sized metro areas, much less rural America. These people are having to go to places like Denver, Seattle, etc., because quality jobs are usually only found in one or two major metros areas per state (large states like CA/TX being exceptions). You have the demand pull from there being no other place to work, then throw any sort of natural barriers and NIMBYism and you have a problem.
There is so much confirmation bias here at play you can make a case for either side. The fact is our whole economy is debt, and that's not a good thing. As an escrow officer who see's people's personal balance sheets included in lender closing packages I am amazed how many people even with good incomes are saddled in debt and need PMI with their mortgage. We are an instant gratification society and most people live way too above their means.
It's not if but when the next BIG down turn in the economy and real estate happens.
What rising interest rates?? Mortgage interest rates have basically remained unchanged for years. There was a 0.5% bump in mortgage rates after the election (along with a run-up of the DOW). The 3 Fed hikes have done nothing to mortgage rates. Mortgage rates improved after each of the last two FED rate hikes.
Sure, we all expect that rates HAVE to go up soon/sometime, but..........
The bank I work at has been sure that interest rates are/were going to increase for the last 11 years (the whole time I have worked here) when all they have done is come down during that time.
You have record high house prices, multiple assets under extreme pressure, volatility at record lows for a long duration, and rising interest rates after a period where interest rates were so low to create an artificial economy. You even have injections of liquidity by central banks.
What are wages doing? Exactly. What do you think is going to happen? I mean, let's honestly think about this. Do people really think that economies are completely disconnected?
Rising interest rates affect the cost of doing business across the board. This charade is going to end at some point and it's not going to be pretty, but consumers did this.
This is the fault of speculation and self gratification. Nobody ever thinks about the future. For example, low oil prices are priced in. Really? What a ****fest that will be when oil prices sky rocket, putting even more stress on our economy. It really irritates me that we go through this time and time again. People just never learn.
It's actually all starting to fall apart at the seams. Not sure how much longer this will last.
I agree with much of this. I'm *just* old enough to remember all the talk in 2007, when everyone, his brother, his mother, and his cousin's neighbor's barber was telling us to BUY BUY BUY our first home and get into the market NOW or be shut out FOREVER. (I'm glad we didn't listen and didn't buy until we were ready.) Circumstances for the upswing might be different in many ways now vs. then but what seems the same is the delusional mindset that things will continue to go up, up, up. (Cue the "but *this* time, it's *different* talk.) This just has never happened and it won't this time either. Mass delusions and speculations will not actually change reality of swings in the marketplace.
I agree with the fact that everyone has to live somewhere, and trying to time the market is silly, but I do think people who can marginally afford a home and who also might need to sell their house in the next 5 years should not be taking big risks to buy right now.
I'm on the Los Angeles forum pretty often and it's interesting that I notice many people looking to move to the area that say they can work from anywhere .
It'll be interesting to see how the internet and technology changes the importance of location for work in the future .
There are many places in America that are nice to live in but just don't have great jobs near them . If you can do your work from anywhere via the internet that becomes irrelevant.
Last night I searched through a lot of the older real estate threads. Boy is that an interesting thing to do. Some things have really changed over the past few years and some things never change.
One thing that really caught my eye was how many people in 2011, 2012, 2013, 2014, 2015, 2016 and now 2017 posted with great confidence that we were "now in a housing bubble that is about to burst at any minute!"
So, maybe markets are topping out or maybe they aren't, but one thing's for sure: reading on city-data that a housing bubble is surely about to burst doesn't make it so. Just saying.
Even if I had a good telecommuting job here (I'm with a local employer), what happens if I lose that job and become "marooned" in an area with virtually no professional work? With so few employers offering telecommuting positions, the odds are not in your favor of being able to find another in short order.
I just don't see this changing at all. Once an area gets rolling, more people come in, creating more businesses and jobs, which attracts still more in a virtuous cycle. Once a place starts declining, it's hard to pull it out of the rut.
It's sad to see this happen to the mid sized towns. I think their salvation will end up being retirees who need a less expensive place to live. There's a huge wave of boomer retirees on the west coast and in other price places like Colorado who will end up selling their McMansions and needing a new place to live. Sure, many of us had a dream of retiring in the west, but is that really feasible anymore? For more and more people the answer will be no. Sure, people talk about retiring in place. But eventually a lot of people will reach a point that the big house is too much to handle, and they'll start entertaining the idea of moving to a much less expensive smaller town and cashing in on the money they can get from the California house.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
