Home prices are going to start falling, and it's going to be a major shitshow for the country

[Hugh_Lebowski]

Here's my thinking about the conditions:

1) Interest rates rising quickly makes buying MUCH more expensive, as is, of course, the rise in home values
2) The stock market is in the tank
3) An awful lot of citizens only real security financially is the equity they've built in their homes as they watch their 401K's and IRA's plummet in value.

I believe we'll very soon see home values begin to drop due to interest rates/costs to the buyer, and homeowners will stress out and want to get their houses sold in droves to get the money they THOUGHT they basically had in the bank.

Multi-national investors and assorted billionaires will swoop in with cash offers, below value, and offers to let people stay in their homes as renters in many cases. They're looking for safe investments during these turbulent market conditions, and people will always need a place to live.

Not only do the very wealthy have the cash to do this, they also likely have access to loans at lower rates vs. the average home buyer. But the rental rates are NOT going to be cheap. They are already skyrocketing, and will continue to do so if home values are falling but interest rates are high. People won't want to buy homes as much if the general trend in value seems downward. They'll decide to rent.

In the short term this will put cash in the pockets of a lot of people and it may well goose the economy and markets, for awhile. But in the longer term, it's a terrible thing as we'll be turned into a nation of tenants to billionaires world-wide, and the primary wealth-building avenue for most Americans will be cut off.

I don't see this ending well for our country.

Esp. if government ignores what's going on here, as seems to be the case now.

[in2herbs]

1. According to news reports I've been following it's corporate investors who are

inflating the housing market, not individual purchasers. If that is true, I don't understand how a housing crash will hurt individual purchasers. The people who sold to the corporate investors already have their money and the individual purchasers won't be selling the house they just recently bought.

If any "crash" fleeces the corporate investors I'm all for it.

[former9thward]

19. If you bought a house for 300,000 and its now worth 200,000

you are deeply underwater. Individual purchaser or not. Most individuals have mortgages and the bank doesn't care if you are underwater or not. They still want their payments on the 300k mortgage.

[in2herbs]

40. You only feel the effects of being underwater only if you go to sell. Otherwise you won't

become homeless.

[2naSalit]

31. +1

That's who's buying everything in Montana. We already couldn't afford to buy anything, now it worse because those who do own places will be taxed into oblivion and they are now also surrounded by clusters of new structures... and it's going to kill the ecosystem.

[MineralMan]

2. That seems possible.

However, it won't be even everywhere, I think. What is is going to do, though, is kill the idea of buying a house right now for first-time homebuyers, assuming there are any of those out there.

It's also going to drastically cut back on people's refi plans. Many homeowners were considering a refi to cash out some of their increased equity in a property. But, with mortgage interest rates above 6% now and rising, that's not going to be so attractive.

Will home prices go down? Not right away, I'm sure. Homes currently on the market, though, are likely not to sell quickly, as people start recalculating what they can afford.

[Nictuku]

34. Recently Retired

My 'plan' after being forced into early retirement (I'll be 61 this year), my plan is to get a Reverse Mortgage when I turn 62 and cash out as much as I can, pay off the mortgage so my mortgage payments go away, then I should be OK with my measly pension and SS. I don't have kids so not worried about who gets the house when I die (Just as long as my mom can live here until she goes, should I go before she does). I can do that in 2023, but not until them. My I bought the house for 295K, Zillow is now showing it being worth over $700K (California prices for you, I live in rural Napa). So, providing the house doesn't get burned up in a fire, that is my basic plan to have some extra cash, pay off my mortgage so I can live comfortably on them pension/SS - and plan to live in this house until I die. I don't think high interest would effect me because you are not making mortgage payments on a Reverse Mortgage (unless I'm missing something)

I'm just wondering how the higher interest would effect me in this plan (other than the housing value going down, but I am really not seeing that. In fact, we get around 5 calls a day for people asking to purchase my mom's house in Memphis, and it is not even listed). Seems like the Corporations are buying out everything so they can make them Air B&B's or something.

I couldn't rent a one bedroom apartment for what I'm currently paying for the mortgage/insurance/hoa/property taxes.

[Tarheel_Dem]

36. I'm really interested in the Reverse Mortgage thing as well. Like you, I have no kids to leave....

my house to, and am not that concerned about what happens to the house when I'm gone. I, also, was forced to leave work early (62) due to some health challenges. Just turned 65 about a month ago, just as interest rates are on the rise. I was hoping to take out some equity, but my current mortgage is fixed at 4.875, and it sounds like I'd have to refi to a higher rate.

I've been hearing a lot about reverse mortgages, but I sure would like to speak with someone who has actual experience with the process, and if they're satisfied with their decision.

[Nictuku]

37. I have some friends who are very happy with their decision

One of them was in high finance when she was working, and did a lot in real estate as well. She told me that when they moved out of Florida back to California, they /bought/ a house with a Reverse Mortgage! (I didn't know you could do that, I thought you already had to have a mortgage)

Here is what I know about it (requirements)

1. You must be at least 62 years of age.
2. You must live in the property as your primary residence (and be there at least x months a year I think... not sure what that # is)
3. You must maintain the property
4. You must pay the property Taxes, Insurance, and HOA fees

I don't think you get the full amount of the house's equity value.

I think that the process of getting a Reverse Mortgage is similar to a Re-Fi (I did just get a re-fi before interest rates went back up, but this was just to bring my mortgage payments down by 300, in the process, pay off the old mortgage and had a new one).

So I am owing about 230K on it currently, if it is worth 700K (that is kind of a big if, need an inspection I'm sure, though I didn't have to get one for my re-fi since it was the same company that I had my old mortgage with). Anyway, after paying the old mortgage, that would leave some 400K, but somehow I doubt I will actually get that much. Need to find out what I would get. I'm going to guess maybe 300K (enough to get solar put on my roof to save on my outrageous electric bill!!! I can't wait)

Anyway, I need to find out (before 2023, so I've got some time)

I need to make sure that my mom can still live here if I die first (as long as she can make the tax payments, etc)

If you don't care who gets the house when you die, then this seems like the most logical thing to do. Live in your house for free until you die? Sounds good to me!

[Nictuku]

38. One more thing...

You /can/ opt to pay off a Reverse Mortgage, I guess that is when the percentage rate would come in to play. Say you want to just sell it, pay off the reverse mortgage and go live with family, or something like that. You can do that. I bet they have a pretty high interest rate for that though, just guessing at this point however.

[Tarheel_Dem]

45. The only way I plan to leave my home is if I can no longer climb stairs. After I read your post,

I did some googling, and this arrangement sounds tailor-made for someone in my predicament. In my search, I found a local RM counselor, and left my contact info with him. If this works out, it would be a very exciting financial boost for me. Best of luck to you.

[Nictuku]

47. That makes me happy to hear this!

I was going to suggest that there are counselors for this, and I intend on doing that myself, but I have a year before I can even apply.

I'd be curious to hear how things work out for you.

Best of Luck!

[Nictuku]

48. Things to look out for

I have read a lot of good and bad things about Reverse Mortgages. It is better now because there are laws, but in the beginning, there was some dirty stuff going on. Things like: They offer to pay your insurance, but don't pay it, then they claim the house because you don't have insurance.

Definitely find a reputable mortgage company.

I also wouldn't let a mortgage company pay my insurance or taxes if I did a Reverse Mortgage. Keep good records of every payment so they can't pull a fast one.

[Tarheel_Dem]

49. I'll definitely keep good records. And I'll also definitely insist on paying my own taxes & .....

insurance. Currently, my mortgage is with the bank that I've been with for most of my adult life, and my monthly payment includes those things. However, if I get a new mortgage company that I've never had dealings with, I'd insist on handling my own insurance & taxes. The very last thing I need is tricks & surprises from my mortgage co.

[BSdetect]

61. Please do really serious research before you get conned into a reverse mortgage.

[Totally Tunsie]

50. One important point for you to consider with a RM,

related to your comment " I don't have kids so not worried about who gets the house when I die (Just as long as my mom can live here until she goes, should I go before she does).": If your name is on the Deed and your mother's name is not, the RM will be in your name. If you were to pass on or if for any reason you were to vacate the premises, your mother absolutely would not be able to remain in the home. Once YOU are no longer connected to the property, the RM holder will exercise its ownership and any remaining occupants will be displaced.

Please consider your choice carefully.

[JustAnotherGen]

3. In the high property and income tax states

We've been seeing this for a few years now.

I'm thinking maybe it helps the rest of the country reset too?

[maxsolomon]

4. the only thing that will drop around here is the rate of escalation.

not prices.

the Seattle market, at least, needs to cool off. it's leaving everyone but tech bros and trust funders behind.

[Timewas]

5. Already

It has in fact been happening for a while now with corporate buying of homes and turning them into rentals. Zillow is a main source of this...Not new but probably accelerating..

[Polybius]

6. Is that a bad thing?

I mean, I want to buy a house in the next 10 years. The lower the better of course.

[Hugh_Lebowski]

9. I didn't mean to imply it's a bad thing for every person in every situation

But overall, US housing mostly being owned by the investor class, who can then set prices and rents ... is not a positive for the country, IMHO.

Even with prices and interest rates being what they are, I still get calls from corporations wanting to buy my house for cash nearly every single day, usually with an offer to let me stay and pay rent.

Something odd is going on and I think there's a plan to turn as many of us into tenants as possible. Soon the marketing message (if prices start falling) will be: sell your house to us cause look at interest rates and falling prices, homeowners! Get out while the getting is good! Hey you can even STAY!

I think once home prices start falling there's going to be massive sell-off to the investor class. Regular people won't want to buy with high interest rates and homes on a seemingly downward trend. They'll also want to rent. Leaving only the deep pockets to do the buying. And they'll work together to collectively offer as little as possible.

And then jack rents up.

[getagrip_already]

7. When I first started house-hunting, interest rates were over 17%...

Yup, seventeen percent. When I finally bought, it had come down to 13 1/4. Woo-hoo.

Guess what. People were still buying houses. The economy sucked in yuge swaths of the country.

So imagine how giddy I was when we bought our second house at 5.25%.

That's about where it is now.

[Hugh_Lebowski]

11. Okay, but were home prices/values on a generally downward trend?

(that one being my pre-supposition here)

Was it immediately after a nationwide housing price bubble?

Was the stock market on a downward trend?

Were there nearly as many uber-rich people hoarding huge sums back then (I imagine you're talking 1980's here).

Did you ever hear of people getting multiple cash offers to buy their homes, almost every day, with offers to let them stay and pay rent instead?

Had interest rates DOUBLED in the prior year?

I.E. conditions are probably not the same as when you're referring to.

[getagrip_already]

20. early 80's, you can look it up.....

Sure, some things were different; conditions varied with where you lived. Some markets were red hot and others were collapsing. It pretty closely followed local economic conditions, with the rust belt and southwest hit hard, but both coasts doing well.

Point is, 5.x% is not gloom and doom. Especially with prices falling in some markets, it won't lock people out. As long as they have jobs that is. Past downturns didn't see people who were underwater selling at fire sale prices just "to get out". Some went under, and lost houses to foreclosure, which is a risk but one we can mitigate somewhat.

What can the dems do though? Stimulus would work, but we don't have 60 votes, nor do we have 51 votes to change the 60.

Seriously. wtf do you expect the administration to do?

Yelling the building is on fire won't help.

[seaglass]

42. I agree, we bought in 1989 and the interest rates were HIGH - almost 11%.

Owners were getting multiple offers,and the only way we got a mortgage as first time home buyers was with a variable rate mortgage - not pretty.

[Retrograde]

18. Let me guess - 1980?

We had finally scraped up a downpayment but with interest at 17% couldn't swing the monthly payments. After a raise and a drop to 12% we were able to buy an ~900 sq ft place near a freeway later that year. And it was an adjustable rate (for you young whippersnappers who don't remember that far back, this meant the bank could change the interest rate periodically, like every month in some cases, so your payments could go up or down)

I know too many people (one is too many IMHO) who bought a house beyond their means and are depending on periodic refinancing to keep it affordable. How the refi fees and expenses don't cancel out any gains I don't know.

[CanonRay]

8. It's happened before

and we survived it. That's not to say it won't be difficult.

[Tickle]

54. We were much

younger then. ☎️

[andym]

10. Your prediction is borne out by what looks like a huge bubble in the homeowners equity chart

40% up in 2 years is unsustainable.

[FloridaBlues]

12. People kept buying houses even when rates were 10-12%.

[Hugh_Lebowski]

13. I have the same reply to you as I did in post #11 above (nt)

[lindysalsagal]

53. But that was back when you could deduct all of your interest.

The owning incentives were decimated by tfg on purpose.

[Tommy Carcetti]

14. My current house value is crazy inflated.

I never dreamed I would be living a million dollar lifestyle at this point in my life.

[Hugh_Lebowski]

15. Same here ... Zestimate is about 130% higher than what I paid 7 years ago

Gotta admit I am SORELY tempted to 'take the money and run'.

[Baked Potato]

32. Us too, just about same %.

[ReluctanceTango]

39. The Zestimate on my home is 3x what we paid in 2000

Since 2005, we've gotten offers for up to 8X what we paid for it, because where we live has a private preK and K-12 public schools within walking distance, great shopping within a mile, plus a major university, multiple world-class hospitals, and the lion's share of the city's best shopping centers within a 5-mile radius.

They can offer all they want, but we're not selling as long as our parents are alive. Rents outstripped our mortgage payments, long ago.

[Roisin Ni Fiachra]

59. Ours is too. nt

[mn9driver]

16. In the 2008 housing crash many homes did lose significant value.

The news was full of stories of houses where people walked away and left the keys in the mailbox for the bank.

These people were so far underwater that any financial reversal at all left them with no options. It won’t take much of a labor market dip to cause the same thing again. There are a LOT of houses out there that no one is going to buy at their current price.

[Hugh_Lebowski]

21. If it's a massive, practically overnight crash, those would be different conditions than what I'm

supposing. And that had a major stock market crash at the same time.

Something like happening now would play out differently than what I described, and more like 2008 (though different because the ARM's are a lot less popular and won't come 'due' in massive numbers during the same 2-3 year period).

And I suppose that's still totally possible.

[getagrip_already]

23. that had a lot to do with liars loans and the crooked lending industry.....

They gave a lot of people loans they knew could never be repaid. The results were predictable.

[pwb]

22. I hope to live everything but maybe my last hours of my life in my home.

When my home value falls from a blip high like we have now it really means nothing. Historically my home value rises yearly. Even the cost of construction material raises value. People are making big money these days. Couples together are making more.

I live in a Blue State where things just seem to keep moving forward. My family will end up with what is my little place on earth. They can sell it to the Billionaires...

I have been fortunate, but it wasn't easy for a time. Being young was hard for me but being old is nice. I hope that continues for our country.

[Johnny2X2X]

24. values won't fall

Last edited Thu Jun 16, 2022, 02:06 PM - Edit history (1)

Rising interest rates will affect prices, but prices are rising so fast, all this will do is slow the rise or potentially stop the rise.

The value of a home isn't its sale price, but the monthly payment someone can afford to live in it. Interest rates make that payment higher, so the principle will be lower. There will be no housing bubble, because it's still a supply and demand issue where there's still not enough supply and the cost of building new homes is still very elevated mostly due to supply issues.

But context matters for these rate hikes. The overnight lending rate is still only 1.5-1.75%, ideally economists want this to be between 2 and 5 %. We're going to raise it to right in the middle of that (3.4%). This is us getting back to normal for interest rates. The sacrifice is anticipated to be 0.5% rise in unemployment rate, which will keep us near full employment. We've had insanely low interest rates for so long now, we forget what is normal. It's not normal to finance a house at 3.0%. 6.0% is normal. To those who got financing around 3%, kudos, you've got an amazing investment that will build your wealth like few other investments can. Happy I got 3.25% when I could.

Rents are also a supply and demand issue right now, there's simply not enough housing in our country right now. Market forces still drive the price of rent, there aren't monopolies price fixing. But there are ruthless landlords and corporations who make decisions without a care for the human toll of it.

[Hugh_Lebowski]

30. Yes, well ... simply put, most people aren't as smart as you :) (nt)

[uponit7771]

35. AVG mortgage rates are at 5% where I'm at, values will NO DOUBT fall because the number of people

... who are bidding are down to 1 or 2 now vs bidding wars before.

It's not just because its summer, the demand has fallen off a cliff.

Also, America doesn't have an overpopulation problem our population is shrinking and space is expanding in the form of office real estate which is emptying because of WFH faster than people are expecting.

Overall throughout the country values will fall in non destination cities no doubt.

[andym]

25. Wealthy cash investors may be wary of the falling knife effect, when prices decrease

should supply increase due to people selling, at least until a bottom is reached. Corporate buying of homes is likely to decrease as well given unfavorable interest rates. So your scenario may not happen to the extent you think, but we will almost certainly see decreasing home values.

[crud]

26. We bought our current house the summer of 2012

I saw the market conditions and did everything I could with meager resources to get what ever I could qualify for. Having been through the previous real estate bubble in 1989, I knew it was time to act. Our 1952 1100 sq ft house in a working class neighborhood in Sacramento cost me 106 grand. Zillow says it's worth 425 now...yikes I think it's pretty crazy. I expect prices to come down, I hope they don't crash though.

Adding this to my post: I thought prices would be coming down during the pandemic, but the opposite happened.

[Johnny2X2X]

28. Very smart

We were already in a home back then, but man, have many friends who saw the conditions like you did and absolutely made a killing. Couple we know bought a 1750 square foo house after the bubble popped for $65K here in Grand Rapids, MI. The did some remodeling, nothing major, made double payments for 10 years and owed practically nothing on it last year when they sold for $320K. They are debt free, save for their new mortgage which they got at under 3% interest because they put $200K down on it.

At the very least, you're going to have a paid for house when you retire that maybe you can sell and move to a more affordable area debt free. Good job and good planning.

[Buckeyeblue]

27. The housing market is not driving the inflation

It's everything else. Most people are buying houses. You do that a few times in your life.

But gas, groceries, cars, services seem to be what is driving this inflation. And inflation on these items seems driven by high demand and low supply. Also, labor shortages have driven up the cost of labor (higher wages), so those costs get passed along as well.

I'm not sure how higher rates solve this particular problem. This is not our parents inflation of the 80's.

Have we ever considered that many of our prices have been artificially low? Maybe today's prices are what things should cost.

[Johnny2X2X]

29. It lowers demand

Cash is more expensive, so businesses invest less and this lowers demand. People buy less things they need financing for.

But this takes a long time to have an effect.

[Captain Zero]

58. Low supply of gas? No lines here. No stations closed like in the 70's.

If low supply of gas is driving that inflation its not because of a shortage. There are no lines at gas stations and no stations closed. So how can it be said there is low supply?

[JCMach1]

33. The only fly in this theory is that inventories are still at historic lows...

Look for a direct correlation between inventory and price.

[onenote]

41. If buyers are selling in droves, won't there be droves buying?

The folks who sell their homes aren't gong to live in their cars. They're going to buy a different home. And if droves are buying homes, won't demand keep prices from tanking?

[Demovictory9]

44. Exactly!!!

[Hugh_Lebowski]

46. My theory here is institutional investors would be buying and trying to get people to lease their

house back from its new owners.

And many will probably wait to buy again until home prices stabilize/try to time it to buy when prices seem like they're at 'bottom'.

[librechik]

51. Yes, of course. And once again it's location location location.

In my sad prediction of the next few years in the US, I foresee millions upon millions of people from all over, not just the US, fleeing the coasts and clamoring for homes where it isn't so hot, wet and floody.

(As a deterrent I offer Missoula, Rocky Mountain forest fires, Lauren Boebert, and plenty of crazy ass mass murders. The middle of the country is not risk-free to live in and some of the cop-teams are monstrous. White supremacists rule certain counties and want more. So crowded the crime rate is bound to spike. )

Right now the inventory is so tight in Denver I have people cold-calling me about my home near downtown Denver all the time. Crowds of people pass my windows on the way to newer nearby shopping and restaurants. Used to be--not tumbleweeds, but real quiet around here.

I fear for those who must escape their beautiful coastal areas when EVERYBODY around them is frantically trying to sell and leave. That will be hard. But I'm pretty sure it's gonna happen.

[DFW]

52. This is mostly a completely foreign language to me

Never having bought a house in the USA, I have little idea what most of this means. My two siblings bought the houses that they live in decades ago, one in Virginia, one in new Jersey. We bought ours here in Germany for cash--I had saved most of what I earned up to then--, as the wildly fluctuating exchange rate (I am paid in dollars in the USA) was a risk I wasn't willing to bear. That was in the bull market of 1990, so it cost me a fortune, and the high-flying dollar-DM rate was long dead after the high interest rates in the USA fall off their astronomical highs.

My only vague contact with the current real estate market in the USA was hearing about my nephew in northern California. He, his wife and their 10 year old son live in a tiny apartment in Palo Alto, where he was in school, and stayed on. They recently saw a half duplex in Oakland with bay views. It was listed at $1.7 million, which they can't afford, but my brother is retired with virtually no expenses at all, and he offered to help. In light of the current craziness, the owner was entertaining seal offers, based upon, but not limited to, the asking price. My nephew offered $2 million, which terrified him in case it was accepted. Instead of accepting my nephew's offer, the owner got an offer of $2.15 million and cash outright, instead of the financing my nephew would have needed. My nephew wasn't even second or third.

I guess his quality of life would have improved, except for the daily worry of how he was going to both pay for his house and put food on the table. It sounds like insanity to me, but his job is in that area, and he wants to keep it.

I don't even pretend to get the situation over there, which is probably more like 500 different local situations, anyway. My one daughter that lives in the USA bought, with her husband, a really nice, and very spacious apartment in New York City at the height of the Corona crisis. They paid a price which is maybe between half and two thirds of what it would have cost them now.

I am SOOOO glad to not to have to deal with all this!

[mnhtnbb]

55. Prices aren't falling here in the Triangle area of NC any time soon.

Last edited Sat Jun 18, 2022, 09:29 AM - Edit history (1)

This area is experiencing a lot of growth as major employers are moving to/opening offices here. Demand exceeds supply. Location, location, location.

I have two sons. The oldest elected not to go to college and has pursued a career in IT. Self taught. In 2007--when he was 21--we helped him buy his first townhouse--being built in a new development not far from the Raleigh/Durham airport--by giving him money to help with a down payment (so he could qualify for a mortgage at his level of income) equal to what we were putting toward college expenses for his brother, who did choose the college path after graduation. He was laid off from his job just as the townhouse was due to close. He scrambled and got lucky, securing a job with a local city government--doing IT--and was able to hold that job through the 2008 recession, and for five more years, so he could continue to afford the mortgage on his townhouse. He took in a roommate to help with the expenses and started putting extra money towards paying down the mortgage. He is now a senior software engineer with an international company that has offices here in the Triangle.

In 2019, he and his partner were looking for a larger townhouse and found one--being built--which will be less than 10 minutes away from where Apple will be building a huge campus as they come to NC. He had built up a nice amount of equity to help with the down payment on the slightly larger townhouse, that was purchased for more than double the cost of his first one. One of his neighbors--on the same street and with the same model townhouse--just sold for $100K MORE than list price (in less than a week), for a total of $233,000 more than what those people paid in 2019.

My other son chose the higher education path. He just was awarded his Doctorate in Fine Arts from Yale in May. He lives in Chapel Hill with his partner, a tenured associate professor at UNC Chapel Hill. Last summer, the owner of the house the professor had been renting for 10 years--who was still paying off student loans from years of his higher education--decided to sell the house. They scrambled and found a townhouse to rent. Chapel Hill is a tough rental market because it's a college town. In April, the owner of the townhouse decided he wanted to cash in on the price appreciation (having only bought it the year previously) and told my son and the professor he was going to sell. Did they want to buy (at a hugely inflated price)? I told my son I could help with the down payment, but in order to buy they would only be able to use the professor's income to qualify for a mortgage, because my son's stipend from Yale would end (when he was awarded his degree) and he would have no income going forward to use without a job. And there are no jobs in his field. (He's been developing a podcast and hopes that will grow into something, but it could take some time.) So, they scrambled again and found a house to rent in their old neighborhood. Housing--for them--has some specific requirements. Neither of them drives (my son is legally blind due to a genetic disease, but sees with his peripheral vision) and the professor prefers not to drive, so they live within walking distance of UNC and near the fare free bus lines of Chapel Hill. And my son is a drummer. Yesterday they moved into the "new" house, which is in a delightful location at the end of a dead end street, with lots of big trees and adjacent woods. But the house is a dump! It has to be at least 60 years old--maybe older--with the original kitchen cabinets and countertops. Low ceilings. Dark wood paneling. No energy efficient windows (or insulation, I'm guessing). Basically, a 1400 sq ft tear down, and the landlord bought it a year ago for $285,000. They are paying more than $2K/month in rent. For a dump. Last night my son texted me a photo of a kitchen cabinet door which split in two when he went to close it after unpacking some kitchen stuff to put it away. He feels like they will never be able to afford a house. They will have to keep throwing $25,000+/year away on rent for the forseeable future, so they can live in a dump.

Two sons. One didn't go to college, bought a townhouse (with parental help) when he was barely 21, and is building wealth. The other, only 3 1/2 years younger, went the higher education route and does not think he will ever be able to afford a house (until I die and he comes into his inheritance).

I never thought I'd own a house again. I'd been renting from the time I separated in 2017, my husband died in 2018, and our house sold. Then COVID. By 2020 I had predictable income from SS, a pension, and investments, and with interest rates so low--and equity from our house--I could qualify for a mortgage. So I bought a house in April 2020--to be built--and moved in Jan 6 2021. Zillow says my house is now worth over $200K more than I paid for it. That's crazy. Just crazy. I could see $100-150K more, but $200K in 2 years? Nobody has yet sold in this new development of 93 houses. The developer has just closed on an adjacent piece of land and has plans to put up 68 more houses. He won't divulge pricing. By the time he finishes building those houses, Apple should be well into construction of their new billion dollar campus, which is just 15 minutes from here, and has plans for 3000 employees. It's not just Apple that has found this area of North Carolina attractive, but Google and Microsoft are hiring here, too. https://www.newsobserver.com/news/business/article258173948.html

There are a lot of California license plates showing up around here--as well as from many other states in the country. I don't see prices going down any time soon. They might level off, but I would expect to see price escalation similar to what happened in California over the last few decades. Location, location, location. Demand and supply.

[Mr. Ected]

56. What goes up must come down

At least in my region of the country, property values appreciated rapidly due to inventory limitations: there were far fewer homes for sale than people in the market to buy them. Lower interest rates kept the demand high leading to bidding wars on the properties placed on the market. Investors were by and large left out as the values just weren't there.

Now that interest rates have risen sharply, the demand has shrunk and the inventory remains paltry. I don't see that values have been affected yet, though. They may well in the coming months, but I think we're quite a ways away from investors swooping in like vultures to scoop up homes at true value prices. Summertime is typically the hottest time in the local real estate market and my June numbers are way down. If July and August follow suit, yeah, we're in for another slide. Nothing like 2007 but not a walk in the park either.

[Captain Zero]

57. Around here house rentals had disappeared and homes flew off the market

until this past four months. Now homes going on the market are hanging around out there, some of them aren't the best or look way overpriced to me for what they are. There are some of these for rent now. Mostly in areas not everyone would want to live. But they do appear to be upgraded like they were fixed up for sale and now are not selling. Home Rentals had mostly disappeared in more desirable areas but now there are listings. Of course they sure seem over priced, not sure who can afford to rent them considering there are also utilities to maintain.

[NutmegYankee]

60. Am I the only person in America who bought a house because I wanted to live in a house?

The value goes up, the value goes down, but I just wanted my own freestanding structure with a yard so I could garden.

[Raftergirl]

62. No.

We’ve been in our starter home for 31 years. Paid $108k. Bought it when the interest rate was 12% iirc.

We have refinanced a few times and have a mortgage interest rate of 2.75%.

We made it into our dream home, slowly over the years. We did a cash out refinance at one point, but everything we have done in the last 10 years we paid cash for. We have put about $250k into it.

It’s only 1600 sq feet and on one floor so we can stay here forever.

My mortgage is $800/month.

I couldn’t even rent a studio apartment for that price.

We have a considerable amount of equity in it, but if it goes down in value, I do not care at all, because I have no intention of selling it.

The market in my town is still pretty strong, because people want to move here for the schools.That is the primary reason people want to live in my town. But since there is is very little inventory on the market, homes which come on the market are selling quickly and for more than a few years ago - but not ridiculously higher.

This is not an area which has ever had huge increases in home prices, but we don’t suffer big busts either. We also have a very stable and well paid workforce being the Capital District of NY.