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.
real estate was booming here in nyc back in 1987 when i bought my first investment property .
i was thrilled to get 8-1/4%
Here in LA the prices were creeping up in 1987. I've been home shopping for a year so I noticed the trend that's when I bought my starter home. I think my rate was ~8% ADJUSTABLE.
I recall the excitement around the office when the mortgage rate dipped below 10%.
Such momentous transformation is unlikely. In the US, the home ownership rate has been hovering in the mid-60-percent range for many decades, including during the 2008 crisis. .
Yes, but a lot of people who own houses now couldn't afford to buy their current house at current market value.
Maybe he should have said “average salary Joe” instead? I get that the houses being sold are affordable to the people who are buying them. But you seem to ignore the large segment of the population that have “decent” salaries who still can’t afford to buy in some areas.
Oh I agree; I think everyone should be able to afford a Bentley and a house in Beverly Hills.
The market for residential housing is very efficient - willing sellers and willing buyers have access to all the information that affects their decisions, and informational changes are rapidly diffused into the marketplace.
Everyone who actually buys a house/condo/townhouse is able to afford it. Here's what a real estate market with an affordability crisis looks like:
Houses sit on the market for sale month after month after month with no offers because buyers cannot afford them.
Clearly, the above is not happening. There is no affordability crisis.
Instead, there are many people who can afford a home at a price of $X who desire to purchase a home currently offered for sale at $2X. That isn't an affordability crisis; that is champagne tastes on a beer budget. They could buy a home for $X but it would require settling - the wrong school district, the wrong side of the railroad tracks, in need of repair, too small, too long a commute, on a noisy street, dumb floor plan, too much crime, relocation out of town or out of state, etc etc etc.
That's not a housing affordability crisis any more than observing that some people would love to buy a brand-new Porsche 911 GT3 for $30,000 even though the retail sticker price is in the $300,000+ range - and concluding we have a Porsche 911 GT3 Affordability Crisis.
When you say
... the large segment of the population that have “decent” salaries who still can’t afford to buy in some areas...
You need to refer to the standard supply & demand curves. At a low enough price, the quantity demanded greatly exceeds the quantity offered, and prices are rapidly bid up to an equilibrium market clearing price.
There is nothing wrong or undesirable about people being outbid in the marketplace. In fact, just the opposite is true: at any price point above $0.00, there are people who are outbid. And there always will be. And that is good.
I think we have to look at what happens when half or more of the US can't afford a home. Most taxes favor home buyers. Well, renters vote, too, and one day they're going to wake up and find out they're the majority, not home owners. Plus, what happens when we run out of people who can afford to spend a million on a house? Are the houses going to just sit there? And please, don't tell me the prices will go down. You know and I know and everyone knows it will take a major housing crash to lower prices. Without a crash, most people would prefer their house sit empty rather than lower the price and get a sale.
For the typical buyer dependent on wages earned in the local economy, and who doesn't have a lot of preexisting wealth, it is absolutely relevant.
The only thing that matters is the income of the marginal buyer and the price offered by the marginal
The old adage "it only takes one buyer" is repeated among sellers hoping to get top dollar for their house. Prices are determined at the margin by a willing buyer and willing seller.
And people will be outbid. And that is perfectly good and fine - at every price point above $0.00 there will be people who are outbid.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,551 posts, read 81,085,957 times
Reputation: 57744
Quote:
Originally Posted by moguldreamer
The above is only true in Barnes & Noble.
In the fiction aisle.
Exactly, in fact overall in the USA currently 66% of households own their home while 34% rent. Some places are higher than others. Here in Sammamish WA for example it's 85% owned homes.
what we are seeing is a supply shortage in these parts .
we have lots of buyers , even cash buyers , but because most people are not going to sell a home with a low rate mortgage and take on a high rate mortgage , there is not enough homes to keep up with demand .
my son has been looking to buy for a year ..every time he puts an offer in he loses the house to an all cash buyer .
because there is such a supply shortage homes are seeing bidding wars and the bids are higher then the bank appraisals .
so sellers are avoiding those who will be taking mortgages
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,345 posts, read 8,557,056 times
Reputation: 16679
Quote:
Originally Posted by HudsonCoNJ
Maybe he should have said “average salary Joe” instead? I get that the houses being sold are affordable to the people who are buying them. But you seem to ignore the large segment of the population that have “decent” salaries who still can’t afford to buy in some areas.
Define decent. In some areas that decent salary doesn’t qualify as decent.
Yes - houses were severely under-priced in 2020, and buyers have bid prices up to a market-clearing level.
Houses were severely under priced from the beginning of time until 2020, but now they're fairly priced since covid? Why did the forces of supply and demand not work in 2018, 2019, and 2020 or any time before that?
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.
