General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhat's going on with the housing market, why does it never stop going up?
I really wish I could own a house, even a small tiny one but the cost of real estate is just absolutely insane. I can't even dream of moving to another state outside of CA either now since it isn't that much better anymore in other states. Will the insane housing market just keep going up and up ever end? It just doesn't seem like it'll stop anytime soon, if ever.
LonePirate
(13,426 posts)Thus housing prices will continue to increase.
unblock
(52,256 posts)just ask homeowners in detroit.
ansible
(1,718 posts)...are what screws you over there, apparently lots of property there owes crazy amounts of back taxes that will really screw you over.
WHITT
(2,868 posts)then homeowners lost $30 trillion of equity.
multigraincracker
(32,690 posts)A few years earlier it was listed for over $300K. Timed it right. We
SharonAnn
(13,776 posts)multigraincracker
(32,690 posts)you make big money on a sale is if you have to replace it. Those higher cost to replace cancel those gains.
LonePirate
(13,426 posts)WHITT
(2,868 posts)to make back $30 trillion, plus where it would have been otherwise. A whole lot of folks are STILL in the hole, a decade and a half later. If it happens again, even partially, the compounding will take decades to recover from.
FBaggins
(26,748 posts)The average home recovered over the next 5-6 years and is now worth about 1/3 more than at that 2006 peak.
Yes, there are still some markets recovering... but there are also some markets that never took a serious dive.
WHITT
(2,868 posts)If you and Bill Gates are in a room, the average net worth of everyone in the room is $65 billion, which obviously doesn't accurately reflect either one of you.
Furthermore, those stats are warped by the fact that the $850k and up segment of the market held-up better than the below $850k segment, and recovered better.
FBaggins
(26,748 posts)Which removes your spin about 850k homes.
The FHFA's home price index shows a full recovery in 99 of the largest 100 markets around the country (with Bakersfield, CA lagging very slightly). The top ten markets are roughly double their previous peak. Over half of those markets fit my earlier description of being 1/3 over their previous peak.
The recovery index that I look at most frequently is just for homes purchased with a conforming mortgage - so it wouldn't include much of anything in that $850k+ range.
1) Moody's states the 'FHFA's Home Price Index' is:
They also note that:
https://www.economy.com/united-states/house-price-index
2) The 'FHFA's home price index' is not presented in inflation-adjusted dollars.
FBaggins
(26,748 posts)The graph I was looking at was for median home values. The FHFA index shows complete recovery in 99/100 largest markets. And the HPI is based on conforming mortgage purchases.
It simply isn't true that huge numbers of people are "still in the hole". The ones who are - are mostly in limited markets and purchased their homes at the peak and either had interest-only mortgages or for some other reason haven't paid down their mortgage balance over 15 years. They are the exception - not the rule.
Three years ago, those who owed more on their mortgages than their home was worth had fallen to 4.5 million... and the last three years have seen strong growth.
Believe whatever you like.
fescuerescue
(4,448 posts)But all those losses have been made up.
I sold my house just a few months before the crash. It took about 12 before the lady who bought got back to even.
She still owns that house and now it's worth FAR more than it was in 2006.
MineralMan
(146,317 posts)It dropped in value. Now, we're selling it, and even without making major renovations, we'll get $220K for it, easy. Oddly, the townhome we just bought is larger and sold for $240K. Not much of a difference, but we won't have a mortgage any longer. We had to refi the other house a few years ago for about half its value.
WHITT
(2,868 posts)Plus, your example is not representative of the aggregate, not to mention doesn't factor in a decade and a half of inflation-adjusted valuation.
fescuerescue
(4,448 posts)Especially in depressed areas. Depressed areas remain depressed. But they weren't doing so hot in 2006 either!
But the market as a whole as recovered. Even accounting for inflation.
Right now real estate is hotter than it EVER has been.
I do fear there will be another bubble pop.
WhiteTara
(29,718 posts)for the land acreage we have. In the past, they have appraised only the house and something like a half acre. When we decide to sell for what ever reason, our little piece of paradise will be enough to pay for our lives until we die.
msongs
(67,420 posts)Strelnikov_
(7,772 posts)unblock
(52,256 posts)it's really mass migration within the country. the long flow of people out of the northeast and midwest into the south and west. it really started with the invention of air conditioning and never really stopped.
a few places, like florida, texas, california, and nevada are just bonkers.
personally, i bought my house in 2007 and am only just above water thanks to the recent covid-related boom as people are leaving nyc to avoid crowds and especially now that working from home is more acceptable.
there are some indications that silicon valley may be reaching a peak of sorts as now even crazy tech firm money doesn't get you good housing. that said, there's no shortage of other people who will drool over the big dollar signs without thinking of the cost of living....
Binkie The Clown
(7,911 posts)Towlie
(5,325 posts)Last edited Tue Jul 13, 2021, 10:47 AM - Edit history (1)
←
Obviously price will drop as value drops.
Binkie The Clown
(7,911 posts)Paper Roses
(7,473 posts)I live in a small Mass. town. There is no more land to build. Buyers of houses are wrecking the houses they buy and build bigger houses. I never will understand that.
I've lived in my house for over 50 years and would love to move to an apartment. No more ownership. Have no idea what my old house would bring on the market but rents on any apartments are over $3000.00 a month. Maybe including utilities or parking. I need first floor, of course, that means more money. Have a pet? No chance.
I have done the math and since I live alone and on SS, cannot afford to stay here but cannot find an affordable place to live that is fit to live in. Even the dirty, dated dumps cost a fortune.
Never would I believe this situation if I wasn't living within it. So discouraging.
There are many whose situation is worse than mine and I am very sympathetic toward them. I think it is hopeless for all of us who have limited funds.
Mosby
(16,319 posts)Your house is probably worth a lot more than you think.
jmbar2
(4,895 posts)In Oregon, the weather is rough on older houses. Modest houses built in the 1940s and 50s have limited lifespans. Old manufactured homes here are selling in the $200-300s, on rented lots.
At some point, there is a decreasing return on older houses due to decrepitude. The replacements are totally unaffordable, and probably less well-built. Not sure the solution, but it's a bad situation.
I wouldn't buy anything "affordable" here because of the continuous repair costs of trying to keep it from falling down.
alwaysinasnit
(5,066 posts)The share of investor purchases of U.S. homes have climbed to an all-time high, a sign that rising home prices have done little to dampen demand for flipping homes or turning them into single-family rentals.
Big private-equity firms, real-estate speculators and others that buy properties comprised more than 11% of U.S. home purchasers in 2018, according to data released on Thursday by CoreLogic Inc.
The investor purchases are the highest on record and nearly twice the levels before the 2008 housing crash. The investor interest poses a challenge for millennials and other first-time buyers who are increasingly looking to buy starter homes and are forced to compete with deep-pocketed cash buyers.
snip...
gypsy11
(341 posts)Paid cash for it. Turned it into a full time Airbnb hotel. Effectually removing it as any kind long term housing stock for a family to live in. Not to mention, they dont really upkeep the property. They dont live here, its a cash cow to them. So they do the bare minimum.
My city has a an affordable housing shortage and this kind of crap exasperates that in a HUGE way. The host next door to me has aims to make herself a little mini hotel empire out of buying up property in single family residential zoned areas and listing them on short term rental sites like Airbnb. I had no idea this type of thing was a real thing until this happened next door.
To make a long story short, I did some research and was shocked to find out that in a small section of the city I live in, there are 100 short term rentals listed on Airbnb. For perspective, that covers an area of about 5 square miles.
Ive filed zoning complaints (yes plural) with the city, contacted state legislature, the mayor, etc as this type of business isnt allowed in single family zoned residential areas, but it falls on def ears. They wont enforce the zoning laws because they want the tourist money.
alwaysinasnit
(5,066 posts)the short-term rental market. SF is rent-controlled so the Airbnb business model conflicted with SF's tenant ordinance. We have been inundated with investor, all-cash buyers which have driven the already hot real estate market in the SF Bay Area into astronomical territory.
https://www.mashvisor.com/blog/airbnb-san-francisco-laws-2018/
gypsy11
(341 posts)Good! They need to regulate the hell out of this type of investing. It makes people homeless. Its a shitty business model built on destroying neighborhoods and it drives up housing costs for everyone.
Im in Connecticut, pretty close to NYC. NYC also passed a law. So many of the people who were doing short term rentals in NYC got shut down, or they decided it was too risky. Either way, they came here to Connecticut to set up shop. The state collects taxes on STRs but otherwise have pretty much left it unregulated at a state level, and local cities and towns wont enforce existing zoning laws because they want the tourist money. The investors that bought next door to me are originally from Brooklyn. They had investment properties in both Brooklyn and Manhattan.
alwaysinasnit
(5,066 posts)Foreigners who buy homes in Toronto and its surrounding area now face an additional 15% tax echoing a recent measure adopted in Vancouver as part of a slew of measures aimed at tempering a heated housing market that ranks as one of Canadas most expensive.
The tax part of proposed legislation unveiled on Thursday by the Ontario provincial government will be levied on houses purchased in the Golden Horseshoe, an area that stretches from the Niagara region and the Greater Toronto Area to Peterborough.
It will apply to all residential purchases made by those who are not citizens or permanent residents of Canada, as well as foreign corporations. Once the legislation passes, the tax would be applied retroactively to purchases made as of 21 April.
When young people cant afford their own apartment or cant imagine ever owning their own home, we know we have a problem, said Kathleen Wynne, the Ontario premier. And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act.
snip...
Midnight Writer
(21,769 posts)I was looking to buy a new home, but concluded I would be better off to stay where I am and have my house updated and remodeled.
I called around and I can't even get anyone to show up to give me an estimate.
A roofing company did put me on their "waiting list", but they told me they are booked solid for at least six months.
meadowlander
(4,399 posts)and haven't been able to get anyone to call me back even for a quote for months.
marie999
(3,334 posts)They have to work 10 hours a day 6 days a week to keep up with the work. He subcontracts work like electrical and plumbing. He has always had a good business but starting about 2 years ago it just got crazy.
MineralMan
(146,317 posts)in California. Many. My wife and I just bought a 2-bedroom, 2-bath townhome with 1440 sq. ft. of living space in a western suburb of Minneapolis for $240,000. You can find places at lower prices, but they will need work.
Unless you are tied to California for other reasons, look outside of that state on real estate sites. You'll see that not everywhere is insane.
GoodRaisin
(8,924 posts)My home value has soared nearly $64K during this inflated market rise. I wasn't planning on moving. If I sell now I will just have to pay an inflated value for another house. I'm hoping our city will lower the tax rates to compensate for the inflated rise that has taken place.
I think this is a bubble that is going to have to burst soon. It's killing housing sales where I live. Who would want to buy in this market with the potential their investment will pop with the bubble?
Vinca
(50,279 posts)last bubble - right before the GWB economy blew up - people were paying top dollar and then some as they are today. Then the party ended and when they went to sell their homes they lost lots of money. Some wanted to refinance, but couldn't because there was minus equity in their homes. Then the foreclosures began. This bubble seems worse than the one in 2007-2008, but it will blow up, too.
CrackityJones75
(2,403 posts)FBaggins
(26,748 posts)And then was followed by 2007.
Things seem overheated and due for a correction... but that doesn't mean that they can't get even more overheated first (or that it might not take years).
We sold our home in 2003 for about twice what we paid for it just three years earlier... only to watch that family sell it two or three years after that for an additional multiple. Then came the crash. Now 13ish years later it's about 10% above that peak (according to Zillow anyway)
CrackityJones75
(2,403 posts)I worked in secondary mortgage market for 22 years (on the IT side) and I think we are ripe for another bubble burst.
helpisontheway
(5,008 posts)crash. It increased a bit over the years. Our home is now above what we paid for it in 2008. So we are happy to finally be paying a mortgage for a house that is more than our purchase price.
Tracer
(2,769 posts)I enjoy the TV show "Home Town" (based in Laurel Mississippi). They remodel old houses and do a fine job. I can hardly believe how inexpensive those homes are. Yes they need a lot of fixing up, but even after the remodeling, the money spent is sooo far below anything you could find elsewhere.
They bought on tiny house and fixed it up for a total of $80,000. And it had land and a view!
brooklynite
(94,602 posts)...but really only want to move to an area other people want to move to as well. Increased demand means higher prices.
brooklynite
(94,602 posts)brooklynite
(94,602 posts)I quick check of ZILLOW found sub $100K homes in a number of communities.
womanofthehills
(8,718 posts)Have built their own homes - straw bale, earth ships, rammed earth. I had a house in Albuquerque but always wanted to live in the country. Lucky for me, my longtime significant other was a contractor in his old life plus he worked in the solar industry. He told me he would only help if I did an off grid frame house - so I have one of the few frame houses out here. So - he helped me build a country wood frame solar home over 5 yrs. One yr, I had the cement poured, next year, he and I framed it - then someone gave him free trusses so we made an upstairs etc. Just working a few weekends a month over the yrs I now have a nice country house. When it was getting close to done, I sold my Albuquerque house to finish off my country house and paid some friends to add a room, custom stairs, tile floors, put pine on the walls and make 2 upstairs decks. There are quite a few communities in NM like this. Many of my neighbors temporarily lived in trailers on their land while building. Here is an old article about my friend & neighbor Kathys earth ship. https://www.abqjournal.com/homes/1894650homes01-18-09.htm.
Suddenly our land and houses in this area are also rising in value and new people are moving in after yrs of us being a small community. We are all on 40 acre lots that cannot be divided - conservation district.
Demovictory9
(32,457 posts)Sympthsical
(9,076 posts)Tech and remote workers are scattering out of the city. They keep saying there's no available land. I mean, has anyone been to North Bay? There's plenty. Although, where I live is doing a lot of building the past few years.
Covid is actually driving out of city prices up.
If you need a laugh about the situation:
meadowlander
(4,399 posts)I suspect half the national wealth of Russia and China is tied up in the real estate market of various Western countries.