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I wonder what percentage of people currently could actually afford to purchase their home at current value compared to their purchase price. Mines tripled since I bought in 2011, my friend I asked recently said nope, my brother said nope.
I bought mine in 2021. Between the increase in both real estate prices and interest rates, I definitely couldn’t afford to buy today.
I don't know the answer for ALL your questions, but this one I know... COVID and riots in the city. That's why people were buying in my area. Our demand was driven by the laptop class. People getting out of the city because of germs and lawlessness and the ability to work almost any office job from home.
I don't know who bought their homes in the city. Someone else will have to answer that one.
All the riots did for me was drive me to buy my first gun.
Out here it was owner-occupants and not investors. There were few flips. As home prices were rising, rents were skyrocketing even worse. Back then, even as home prices escalated your mortgage was cheaper or comparable to rent and you got to live in a better neighborhood.
I understand and agree with the thesis that Californians sold their million dollar homes and moved to places such as Austin, TX, bidding a typical suburban home from $400k to $700k because they could, but who bought all those million dollar California homes? And why did it happen during the 2021-2022 period? For the national (not just some trendy area) median home price to surge by 50% in two years, there’s some massive capital that needs to be mobilized. Where did it come from? Foreigners? Americans with savings? Central bank printing?
That is the real question in all this. My bet would be on foreign investors looking to stash capital out of the reach of their governments.
From before the pandemic to now the Case-Shiller US National Home Price index has gone up about 50%, which is absurd. .......
For a start, your dollar has lost 50% of it's purchasing power. Many things have doubled in price, so why would housing also not be affected? Thank your government and all the free giveaway programs that have undermined the value of your money. Inflation is basically too much money chasing too few goods, and if you run the printing presses non-stop and give lots of people lots of money for no reason at all, you get too much money chasing too few goods.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by igorcarajo
I understand and agree with the thesis that Californians sold their million dollar homes and moved to places such as Austin, TX, bidding a typical suburban home from $400k to $700k because they could, but who bought all those million dollar California homes? And why did it happen during the 2021-2022 period? For the national (not just some trendy area) median home price to surge by 50% in two years, there’s some massive capital that needs to be mobilized. Where did it come from? Foreigners? Americans with savings? Central bank printing?
A lot of reasons.
Millennials were looking to purchase.
Mortgage rates were attractive.
Housing shortage, especially SFH.
WFH, where a couple in a apartment, is too small.
Certain industries paid good retention salary-bonuses.
Stock market was on a tear. -- Debt markets were unproductive.
Stock holdings in employee options and appreciation made it attractive to acquire RE as alternative investments.
DS had a bachelor home (2/2) in Seattle that he is able to rent above his mortgage payment. With the excess, he and spouse was able to get a much larger SFH, together at still very attractive mortgage rates (fall 2021) although at peak housing price.
We are just a middle-class family and we were in the market. But we just missed that window in 2020-2021. By the time our finances were in order, it was already 2022 and even though rates were still low, prices had already shot up drastically and we held off.
Most of our competition for homes were a mix of out-of-state and local investors who had plans to rent out the homes.
For a start, your dollar has lost 50% of it's purchasing power. Many things have doubled in price, so why would housing also not be affected? Thank your government and all the free giveaway programs that have undermined the value of your money. Inflation is basically too much money chasing too few goods, and if you run the printing presses non-stop and give lots of people lots of money for no reason at all, you get too much money chasing too few goods.
Sucks that I didn’t get any of that freshly printed money. My wages have been the same for years.
I understand and agree with the thesis that Californians sold their million dollar homes and moved to places such as Austin, TX, bidding a typical suburban home from $400k to $700k because they could, but who bought all those million dollar California homes? And why did it happen during the 2021-2022 period? For the national (not just some trendy area) median home price to surge by 50% in two years, there’s some massive capital that needs to be mobilized. Where did it come from? Foreigners? Americans with savings? Central bank printing?
Lots of Foreigners are LOADED with cash. And I'm not talking just "millions" either...
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