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With the cost of building materials and labor way up, I just do not see how prices are going to crash. I could see a slight correction, maybe 10% in certain markets. But if you are waiting for that $1,000,000 + house in a blue chip area to go on the market for 500K, I really do not see that happening.
It seems like purchasing a house has become a sort of status symbol. Where were these people when many of us were underwater on our properties years ago?
"Stonks" are not the exotic plaything of a few exalted fortunates at the tippy-top. Their growth is not some untoward or phony increases, that then merit a righteous decrease, but the normal and proper consequence of human productivity, channeled into material betterment.
My personal attitude, is that once money is invested in the stock market, it remains ensconced there forever. It can not be withdrawn, say to buy a house. Others, perhaps in vast numbers, think differently. If they make ample money in the market, they withdraw some of it, to fund purchases such as houses.
This is probably true, though I'd also include the generation prior to the Boomers.
Private home-ownership really arose in mass numbers in the 20th century. Prior to that, most people were too poor to own real estate. The idea of every family owning the house in which it lives is only perhaps 5-6 generations old. We may very well find, that as the 21st century advances, it will come to resemble the 19th.
The population in my St. Paul suburban county is 450,000. The homeownership rate is almost 75%. The median household income is $98k. The median home price is $375k. The current foreclosure rate is nil. The economy is well diversified. I don’t foresee a whole lot of deteriorating homeownership rates on the horizon in my area.
Last edited by TimtheGuy; 11-27-2023 at 11:07 AM..
I haven't read all the posts - houses are selling because people are willing to buy them.
It's too much to read but the question we've been tossing around is more about what's causing people to buy them at such high prices. What's supporting it? Are people that much richer? Prices and rates shot up, and people kept buying.
I personally with zero research or expertise think it's related to our insatiable need to spend more even when prices are sky high.
Could it be that, with so much more crime and indoctrinating schools today, that people are more motivated than ever to get to a good part of town? Could it be something in the vxccine or one of the seven boosters making us money-dumb and policy blind? Honestly and sadly, not sure that theory is far off smh..
In direct response to your answer above though.. Where we're these rich buyers pre-Covid? What triggered them to all go out and buy and keep buying?
WARNING to some on here and to everyone! Don't get Stockholm syndrome with these new prices for everything. The government wants you to change your standard and make this the new normal.
We shouldn't bring up California, Washington, Florida, or Texas in this conversation for comparison. There are obvious factors helping to support elevated prices in these markets. It's the "normal america" markets that's baffling.
Yes Texas should be higher priced, but Alabama should not be - but it is.
It seems like purchasing a house has become a sort of status symbol. Where were these people when many of us were underwater on our properties years ago?
I was underwater on my mortgage for a number of years after the 2008 housing crash. Then, as soon as I broke even again, I started looking for a new house to relocate to.
All the while, I was saving and investing my money in the stock market through a brokerage account. So, I had a hefty down payment by the time I was ready to buy a new house.
I've been looking to move from east TN to western NC.
The big thing that I've noticed is that, right now, for 1-2 bedrooms apartments/condos, it's often cheaper to rent than to buy. Elevated prices with the high rates and making it cost prohibitive to buy. People still are, it's a desirable market, but definitely hard for working class people on locally earned incomes.
Q: "Why are housing prices so high? No one can afford them."
A: Every home that sells is afforded by the buyer who purchases it. Perhaps you can't afford a house you are looking at, but the people with whom you compete with can.
We get a lot of inquiries on my state foum for "affordable". Just the fact that they ask that way without providing a budget; i.e., telling us what affordable is to them, makes me think they are not yet ready to buy something.
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