I got an email yesterday telling me times have never been better to refinance my home. They swore that they could get me a number that was more than double my current rate.
I chuckle evily whenever I get a call from my mortgage company asking me if I'm happy with my mortgage. At 2.25% darn right I'm happy being below the current risk free rate of return.
I mean they are literally just taking your money and telling everyone it’s a good thing. Fucking wild man. My buddy has a second property that went up from $1700 a month to $2700. Insane. That some private entity can one day decide people have too much money and just literally take it.
Back in the 50s to 70 we teeated hoises more like food. No one bought up all tge bread at a grocery store in hopes of selling letter at a high profit. During this time houses inflated mostly along side wages.
The the dark times came. The risr of the secondary real estate market ment people couldcquickly trade mortgages* like stock. This decoupled house prices from wages and turn te whole 2nd market into a new stock market
*technically they are not mortgages but mortgage back securities
I'm not sure I quite understand what that means how would they even know if I've broken even or not?
I own my house but the only way I would know if I'd "broken even" was to constantly get it evaluated. Also is their analysis assuming that I'm going to do improvements or not?
Because you can buy a house, own it for 6 months and sell it again for a profit, and you can do that if you do renovations. Equally you can buy a house own it for 5 years and sell it and make a loss because you've not done any maintenance or renovations in that time.
I know for a fact the person I bought the house of hardly made any money on the sale because the roof has a giant hole in it. Obviously that brings the price down.
Based on the actual Zillow report, it's just based on home values across the board in different regions. So, these are averages. Of course, if you make more improvements and stuff, your result would vary.
My house is an investment in the sense that I'm putting money into a giant hole as opposed to an infinite hole like renting. But no, I don't view it like I would a stock.
It isn’t the amount of time it takes to pay off the house. It is the time it takes not to loose money on selling a house. The number was about 5 years when I purchased my home. You take the selling price of your home subtract the mortgage, taxes, and realtor fees. It now takes 13 years before you can sell your house and break even. This just makes investing in homes worse. It also makes buying a home more risky and inflexible.
Too many companies with deep pockets buying everything up to rent and then never selling. Once a company buys it, it's pretty much off the market forever unless that company goes bankrupt but then they either get a bailout or another company buys that one for cheap.
Along with what the other comment said, all the people that are buying that aren't corporations can actually afford the house they're buying largely due to the WFH change so they all moved out of cities with their large salaries and moved to low cost of living places, took all the affordable housing and since there's no economic collapse they will continue to be ok (thankfully I guess?) so there won't be a housing crisis other than the unaffordability crisis which isn't a crisis to capitalists it's just a feature of their market based system.
The solution "the market" chose was neofeudalism... Can't buy, only rent. "I take your income forever and continuously raise the rent until you can't afford it and then the next schmuck moves in. Where you go, who cares? Not my problem." Lovely society we have...
There's near limitless demand and deliberately limited supply. Any dips will come from lack of affordability on lending as interest rates rise, but you're talking hyperinflation for an actual crash.
So the house prices might drop by 20%, but you'll be able to borrow 20% less. So if you're fucked before any price drops, you're still fucked afterwards.
I don't think it will burst. It'll just slowly deflate as new houses come onto the market and demand eases. The main problem (at least where I live) is that there just aren't enough houses being built. I don't think we'll see a sharp price drop anytime soon because there are so many people waiting to buy.
The problem tends to be that houses are being built but they're not the right houses. They're all really expensive houses, there's nothing for first time buyers.
You may be right. I saw an article about a year ago that said the only way they saw out of the housing crisis was to build like crazy. And that makes sense but if the economy takes a nosedive then the buying may stop which could cause a crash. No one can predict the future, but markets do fall apart sometimes.
I wonder this too, but I'm coming to believe that as long as investors are throwing money at housing and people need it, it might not burst. With enough wealth concentration, maybe it just all gets progressively bought up and rented out at insane prices, with growth coming from speculation among massive institutional investors.
But I haven't really thought of this deeply or looked into whether it's sound.
This is what you're seeing now where mega corps are buying up trailer parks and all the low end housing. Theyre cranking up the prices on these to justify cranking the prices on the mid range stuff and so on up the $ ladder.
There are no more low end housing being built anywhere. It's all 350k and up being built.
Thats the main problem really. The shitty stuff got priced where mid stuff used to be and there's no supply for first time buyers to use to build equity.