I wish more people shared the sentiment of just wanting a home and not an investment. I donāt care how much my house goes up or down in speculative value.
Then, rent? Itās actually cheaper to rent a home than buy it these days in most cases. You also donāt need to spend money on upgrades and repairs.
Edit: the downvotes and general backlash against this comment likely all come from folks who donāt own a home and donāt really know the stakes because they havenāt been in a position to consider them. Itās mob mentality. Around me a house is a $10k/monthly payment, renting is $5k. Renting is a no brainer, especially considering that you donāt need to make repairs. The $10k/month is the minimum youāll pay. Need a new HVAC? 20k. Need a new roof? 40k. Need to remodel an outdated part of the house? 10-60k. Garage door spring broke? $350. Plumber fixed a leak? $500. Need an exterminator to kill some rodents? $150. Tree removal to take down a dangerous tree? $3k. These are all costs that youāll eventually need to pay as an owner. Given this and the fact that being a landlord involves taking a financial risk on a tenant, buying should be cheaper than renting. If you think of being a landlord like running a business, youāll quickly realize that no business would operate at a loss willingly for long. Well, when renting is cheaper than buying, thatās essentially what is happening. The market is such that buyers are paying a premium for an asset they canāt get much of a return on, so youāre better off renting. This was actually one of the indicators that predictors of the 2008 housing crash looked at. But, go ahead, tell me Iām an idiot. Follow the mob. Recite platitudes. Donāt think critically or evaluate the nuance in things, itās your money, not mine.
This is moronic advice.
Iād rather own my home and not worry about some asswipe jacking up rent.
If you rent every cent that goes towards rent is paying someone elseās mortgage and youāll never see that money again.
If my home value goes down I still have equity. I can sell and regain at least some of that money instead of flushing all of it down the toilet.
Rent is skyrocketing right now. My mortgage is still the same. If I were renting Iād be much worse off.
Tenants care a lot about the housing market going up and down, because it affects how much their rent will increase.
It's usually cheaper if you don't plan to stay in the same place for >2 years.
Otherwise no.
"Just pay someone's mortgage for them, so they can own it when you can no longer afford to live there. Generational wealth should only belong to rich people."
The problem with a collapse in house prices is that it normally comes with a collapse in everyone's personal finances.
If you can't afford before a crash, there's a very good chance you won't be able to afford after a crash either.
The only thing that will bring house prices down is building a fuckload more houses, and building them in places that people actually want to live.
You could also introduce regulations to prevent houses being used as investments.
The reason houses are expensive is because investment firms are buying them up with cash.
There are entire neighborhoods owned by investment firms. A lot of these homes are empty and are just used to prop up housing costs.
The issue isnāt supply, itās policy. The issue is reckless monetary policy combined with banks/investment firms controlling the market.
If you want cheaper housing building more isnāt the answer. The real answer is banning corporations from owning homes.
I've seen the idea thrown about to tax houses higher the more a single entity owns. IDK about the feasibility of that plan, but we need to do something. I feel like it would never happen, though, because rich people and, by extension, lawmakers own multiple homes and they wouldn't want to lose money.
Just to add to this, it's not just investment firms. I do title searches for a living and a lot of them are also bought by trusts and IRAs by people living in more well-off areas. It's basically a retirement plan for them. That should be included in the ban. There basically should be a ban on buying homes you don't plan on living in or doing significant rehabilitation work to (and with that second stipulation, we should actually inspect and ensure that the house flippers are actually doing much needed work to make the house liveable, not just slapping new paint on the bricks and installing faux shutters to the outside for a quick flip).
There was a great video years ago that detailed what would happen if house prices were to rise, fall, or stay stagnant.
You're right, if they were to crash, we'd all be a lot poorer, but there would also be a lot of (still) cash-rich people that would happily buy up all the cheap stock, and we'd be in an even worse position than before. We'd build more houses, but we'd ultimately create new billionaires, and given the low quality of some new builds, probably a two-timer system of ownership where the poors get the new houses on flood lands/with dodgy cladding, and the rich live in good builds.
The best thing to happen overall is a price cap per-area, dropping by a percent every year or two, with subsidies on sustainable renting (low rent fees, buildings being up to code, etc). The landlords that use their property as investments will bail right away, renters will see the market switch to their favour, and through legislation you could probably push rent-to-sell options for those that maintain homes and want to release over several years.
More homes need to be built, but that also means more infrastructure, and building all of this without selling those houses to the highest bidder. That all takes time, at a time where there are a lot of cash-rich people that would love more investment.
And doing away with Airbnb
We got a master class in that lesson in 2008.
You'd end up with unhoused boomers.
That's already going to happen. The ones that can afford to retire are nearly all there, the rest are going to be indigent and need our support lest they become homeless when they are physically too old to work.
America has become a nightmare for most.
I don't have finances, checkmate
Unfortunately, "investors" are buying up properties as fast as they hit the market. The collapse isn't for a while.
Yet another piece of evidence that āxennialā is a real thing. I was born in 1978 and Iām hoping for a collapse in real estate values. I just want a place where I can spend time making it comfortable without the constant awareness that Iāll have to move eventually.
I was born in 86 and I've resigned myself to never owning a house because it's basically impossible unless I want to live in the middle of nowhere or I completely change careers. Four jobs isn't enough for a house anymore.
'87 here. I flew away from North America to SEA, and seriously considering buying a house in Malasia. The land and housing out there is actually affordable.
Hey fellow xennial! Itās very much a real designation and Iām so glad itās been defined. Iāve never fit genx or millennial exactly, definitely a combo of both
Iām hoping for a collapse in real estate
It's not going to happen. The last crash was 2008. Prices went down 30% which didn't come close to offsetting the increases from the previous run up.
https://dqydj.com/historical-home-prices/
At best there might be a long term oversupply from boomers dying. That would put long term pressure to lower prices. So if you wait 25 years you could have a house priced at what a house was 5 years ago.
Millennial here, bought a house in late 2022, process were not low, but interest was (this was right before all the inflation nonsense that's plagued the market in the past year or so). Locked in for 3 years.
I don't care if my overpriced home drops in value. The value we get from owning it is the only thing we care about, and we have no intention of leaving or selling it. So I'm in support of a big crash; unfortunately unless something serious happens I'm not sure that we'll get a crash.
Every time something inexpensive hits the market it's snatched up by some investor or something; so the only homes left for normal buyers are overpriced. The businesses that are buying these properties are creating an artificial scarcity and leaving homes empty until they can either rent them for more than they're worth, or sell it at an incredible markup.
I can see this in action in the neighborhood I live in now. Two new homes were built and they're up for sale. Naturally I was curious. They both have less floor space, fewer bedrooms, and overall they're not nearly as valuable, but the market price that's listed for them is more than double the price we paid for our home less than a block away.
The stupid thing is that they'll eventually sell probably at that price or something close to it. My home's value will probably go up by proxy, but honestly, I could not possibly care less. The whole thing is stupid, and unreasonable for normal buyers. They're modest homes; new, sure, but not special. There's nothing notably better or variable about the houses. They just cost more.
I'm angry about it. I want families to be able to buy a home. The amount we paid was more than we would normally have been able to afford. We pooled our finances to afford the mortgage, and we're still struggling to find a balance so that we don't financially sink trying to afford it. Our situation aside, it should be easier. Others should be able to do it without having to pool resources with others to make it work.
I am also a millennial but fortunately I was able to buy at a decent interest and a decent price. 3 months after I bought my house interest rates skyrocket and so did the value of the house. It's not the best house but it's perfect for me. It's kind of run down and my mom hates it but it's home. My mom says I should sell it now that it's worth more but then I asked her where am I going to be able to find a house this cheap anymore? I absolutely hated renting and I'm not a fan of landlords. It does upset me that these large companies are buying up all these properties. Businesses should not own residential homes. PERIOD. I also think the government needs to far more strict on landlords. I was fortunate to have a decent landlord for the 13 years I rented but I've heard all the horror stories.
I donāt care if my overpriced home drops in value.
If you have a mortgage, the bank cares. And if the bank cares, it can make you care.
As long as I'm paying my mortgage on time, I can't possibly imagine that it would be relevant to them to do anything about it.
The only reason the bank cares is because they have a lien on the property for the mortgage which would only be a problem if we defaulted on our payments.
Trying to help my mother in law. Low income, no savings, some debt we've tried to help to pay off. Starter homes are over $200k now. 6-7 years ago these are the same houses that were $110-140k. She can't afford the down payment, hell the bank won't pre-approve her to even put a bid in. Crazy. And yeah, as others have said, the price won't go down because any discount will be immediately snatched up, more often by a large investment firm, thus locking the price and not allowing the market to cool.
To provide some context, she wants a very basic home. A small yard primarily to start a garden, maybe 800-1000 sq ft on the high end, and not much more. The only places she and we can find that are in her range are in rough neighborhoods we wouldn't want her living. And also her work, which is 100% remote, constantly threatens return to office requirements which forces her in a 40 mile vicinity.
As melinneals, we got lucky. Purchased at literally the very beginning of covid (3.20) and have seen our home value skyrocket (+50% from purchase price). Rental homes in the neighborhood regularly charge 90% over our mortgage + property tax + home insurance rate. A house down the street (we got to know them as we both had young puppies) was abandoned because they raised the price +20% in the time the family lived there. It was a mother, both adult children and their spouses, and grandchild, 7 in total, in a 4 bedroom. They left one day and last I saw was an $8k bill taped to the door for 3 months of unpaid rent, they had moved out 4 months prior.
she wants a very basic home. A small yard primarily to start a garden, maybe 800-1000 sq ft on the high end, and not much more.
...and...
And also her work, which is 100% remote,
This one is one hour outside Pittsburgh and 1.5 hours outside of Cleveland. So you're still close two a couple sizable international airports, theaters, museums with great food scenes. Both cities host large Universities so you're close to a fairly highly educated population.
Yeah, I managed to buy at the bottom of the interest rates, but before prices truly skyrocketed.
Because of some other life circumstances, I ended up having to move a few months back and finances just weren't there to hold onto it.
Having to rent again has been the most mental health destroying financial back step I think I could have ever taken. I pocketed a nice chunk of change, but it'd only be enough for a ~5% down payment in the current town.
Hoping to get back to owning some day, but not hopeful that that day will be soon.
What do you mean by "hanging young puppies"? I'm very concerned
Lol. All the puppies are healthy! Fixed the typo.
Glad I'm not the only one who caught that, that's a strange hobby for sure.
Your house didnāt increase 50% in four years, thatās the kind of unrealistic investment expectation that makes the housing market unaffordable. Thatās not going to get fixed no matter how many houses are built. People ask unreasonable amounts of money for their shitbox (not saying your house is a shitbox) even if itās on a bad piece of land. I am not sure whatās the solution for this other than teaching people critical thinking skills for objectively evaluating things.
But an āeasyā one for a separate but related problem: corporate investors need to be legislated out of owning single family houses.
Except many housing markets have been doing exactly that for the past decades. Also with the period of hyper inflation we went through easily means the house has gained about 30% value purely through being a durable good that holds it's value with inflation. Another 20% due to the crazy '21-'22 housing market plus general "most houses gain value" housing market is not hard to believe
Yep and all the banks are waiting as well, so they can buy even more properties to rent out.
There is a strong correlation between unaffordable homes and people voting strong men and far right. It's a policy choice to stop the "homes as an investment", a policy that advantages the rich the most. But that policy choice determines where society will go.
Where I live, they're now taxing people that own properties where nobody lives. It won't be enough, but we'll see.
Okay well we've had three years without a strong man president and all we've gotten are higher interest rates and a letter telling us the economy is doing great. Not even an acknowledgement of the problem, let alone expressed interest in solving it, or a plan, or action.
This is on the blues right now. They need to do something fast if you don't want a strong man president.
How's unemployment right now? The debt is solely on the shoulders of someone downplaying issues from a crazy sickness. Telling them to just drink bleach. And then needing to try and save everything Since we couldn't take it seriously early enough that we then had to bail ourselves out. And not even trickle down like reds like. But they actually had to feed everyone or the housing and well literally every commodities market was going to collapse. We gained 8 trillion dollars in debt last time a Republican was in office and the worst unemployment numbers since the great depression. Good thing someone came in behind and cleaned up the hot mess Republicans left us in.
We're still recovering from the impact of a previous President who openly and regularly promoted a complete disregard for public safety during a literal pandemic.
dork
Itās never going to collapse.
That's the joke
Supply and demand. House prices are high because lots of buyers are financially competing for the same properties. The prices won't collapse unless something disastrous happens to the world that results in an oversupply of housing or massively harms people's spending power, and the odds are you would be affected by that too.
There are currently 10 million vacant homes across the US, (15 million if you count the ones for rent,) which represents about 7.5% of the total housing. Not refuting your argument, just adding to the conversation.
I guess a lot of these are in less than desirable locations, among other factors, but 4.5 million of them are listed as seasonal, occasional, or recreational use. That's a lot of vacant housing, considering only 1.2 million of them are for sale.
Edit, I guess these are 2020 numbers so these may have changed since then.
Just need boomers to die off. That'll get some houses on the market.
We never should have talked them out of eating horse de-wormer
A large supply of affordable housing, say like the kind provided by a government dedicated to alleviating the housing crisis, would surely help.
It's not like there's nothing we can do.
Later are the Heavenly gates....genZ-er 4242114...how do you plea? Innocent? Any complaints? No housing? Dude, did you know COVID was supposed to remove the large majority of the population so that you guys got housing for cheap? But nah! You guys had to find a vaccine!
Good luck .. genx have been waiting as well
For our whole lives. Of course we saw a massive crash in 2008, but we also lost our jobs and all of our money, and most of us couldn't capitalize on it.
If you want to make the market crash, you gotta make renting look like a poor investment. Like what if rental units had a high chance of catching fire or something? That would be a shame wouldn't it.
Yes letās burn all the houses down. That surely will fix everything. /s
Me too
