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Zillow is fuarking HILARIOUS right now....
06-13-2023, 12:14 AM
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#121
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Originally Posted By Jaydawg08⏩
Actually it is, especially if you use a rental agency. Thing is, MOST homeowners who only own ONE property as their primary residence aren't going to rent out their only home (regardless of value as long as they can afford it). They don't view their property as an investment. They view it as a place to live because chances are, it's cheaper than rent. If you don't get that, then you don't get it.It only takes one bad tenant to fuk up your house and investment. "Just rent it out bro!" Isn't a simple solution as it sounds
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06-13-2023, 02:17 AM
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#122
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Originally Posted By badger6⏩
This is all great but you didn’t actually give any real indicators that we are about to crashWell, you're in the RE business, so any comments made by the internet persona "Big Deeps" will be taken with a grain of salt. It's your job and livelihood to talk up the RE market. I have no skin in the game and will break even or make money regardless of what the market does.
But to say these unsustainable prices are here to stay sounds like some used car salesman chit. And I should know since I was in the car business for 10 years. Anyhow, in my opinion, a crash is inevitable within the next few years. Time will tell
But to say these unsustainable prices are here to stay sounds like some used car salesman chit. And I should know since I was in the car business for 10 years. Anyhow, in my opinion, a crash is inevitable within the next few years. Time will tell
Again, I’ll be fine if we were to actually crash. I would probably actually do even better because investors will be frothing at the mouth at buying low priced deals
06-13-2023, 06:14 AM
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#123
Originally Posted By Jaydawg08⏩
What starter homes? Practically everything built in last 40 years is 2000+ sqr feet. Very few american houses are too small for a familyYou both are missing a key part which is that these people paying 80-100k over asking were doing so on starter homes, not always "forever homes".. which is why said it's essentially a prison.
You're locked into that house for far longer than you want, and when you want to sell are doing so at a loss. You don't honestly believe that all these people bought their homes they planned on living in for the next 25+ years do you?
The vast majority of 1st time home buyers are not buying a home they plan on staying in forever
You're locked into that house for far longer than you want, and when you want to sell are doing so at a loss. You don't honestly believe that all these people bought their homes they planned on living in for the next 25+ years do you?
The vast majority of 1st time home buyers are not buying a home they plan on staying in forever
For the house market to crash, you need a mass sell off. Why would people start selling their house at 2% interest and that they have 300k equity? What's the end game? To buy something even more expensive with 7% interest?
This artificially lowered supply will be around for a while. How is the market going to crash when there's always going to be more demand than supply? Every year you have first time home buyers trying to buy first home so it's not like demand goes down
06-13-2023, 08:32 AM
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#124
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Originally Posted By blissful88⏩
Not the misc, just N0stradamus. His 'prediction' was that the market was going to crash a year and a half ago in March. LOL.Misc said it was going to crash by 6 months ago
06-13-2023, 08:34 AM
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#125
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Originally Posted By Crazy_Desi⏩
Amortization is just front-loading the inverse of the benefits you’d get at the back end of investing the money and compounding it over time but it doesn’t change the overall equation or which is most beneficial.The problem is, while a mortgage may be quoted at 7% interest rate, that's not really 7% because of amortization.
For a $1 million home with $200k down and 7% interest rate:
The first year alone you're paying $55,500 in interest and $8,400 in principal. When you look at the yearly payment amount that's $64,000 in payments, which means you're effectively paying 87% of your payments towards interest. To me that's like an 87% interest rate that first year. So while you're gaining interest on a savings account, that's peanuts compared to the interest you're actually paying towards the mortgage.
Hence why I said put as much cash down as possible. You're not getting an actual 7% interest rate on a yearly basis until the end of your payment schedule.
If amortization was not a thing, and you really were paying a 7% interest rate, and that $64,000 in payments was comprised of $4500 in interest and $59,500 in principal, then yes, you're absolutely right that putting down as little cash as possible is the way to go.
For a $1 million home with $200k down and 7% interest rate:
The first year alone you're paying $55,500 in interest and $8,400 in principal. When you look at the yearly payment amount that's $64,000 in payments, which means you're effectively paying 87% of your payments towards interest. To me that's like an 87% interest rate that first year. So while you're gaining interest on a savings account, that's peanuts compared to the interest you're actually paying towards the mortgage.
Hence why I said put as much cash down as possible. You're not getting an actual 7% interest rate on a yearly basis until the end of your payment schedule.
If amortization was not a thing, and you really were paying a 7% interest rate, and that $64,000 in payments was comprised of $4500 in interest and $59,500 in principal, then yes, you're absolutely right that putting down as little cash as possible is the way to go.
IE if you invested $200k in something today @ 5% and it compounded over 20-30 years, most of your compounding gains would come at the back end of that timeframe. Amortization takes that and shifts it to the front end, you pay more interest at first but then less and less over time.
Mortgage debt is the cheapest debt out there, I’d much rather have the cash in something else and deal with amortization + interest rather than tie up all the money in an asset that you either need to sell or leverage to pull the money out of.
06-13-2023, 08:50 AM
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#126
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Originally Posted By Crazy_Desi⏩
Yep. Builders are slightly panicked about not being able to sell incentives so are being offered on new builds. Both supply and demand are very low and average people with a 3-4% mortgage aren't interested in one that's 7%. Both potential buyers and sellers are stuck in a predicament. I bought a little before the pandemic and if I make a lateral move to an equivalent house my monthly payments will be higher. If I had like 15 years of equity, different story.Mine is 800+ but I heard only new homes can fetch an interest rate of 4.5%.
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06-13-2023, 08:55 AM
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#127
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Originally Posted By BigDeeps01⏩
A year ago I thought there could be a crash but instead it will be a slow downward trajectory in most places for a few years. In some places (Phoenix, San Francisco, Los Angeles, Austin) a crash already has happened while prices are rising where they hadn't much during the pandemic. It's surprising a recession hasn't happened by now as most everyone expected. My bet was on recession Q2 of 2023 but it looks like we have a slowdown instead of recession for now.This is all great but you didn’t actually give any real indicators that we are about to crash
Again, I’ll be fine if we were to actually crash. I would probably actually do even better because investors will be frothing at the mouth at buying low priced deals
Again, I’ll be fine if we were to actually crash. I would probably actually do even better because investors will be frothing at the mouth at buying low priced deals
It's all tough to say much since right now is the highest point of every year for house prices.
Yeah Buddyyy! Light weight! Light weight baby!!!!
06-13-2023, 09:04 AM
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#128
Originally Posted By Destor⏩
Mortgage debt is not cheap anymore. 6-7% interest is not cheapAmortization is just front-loading the inverse of the benefits you’d get at the back end of investing the money and compounding it over time but it doesn’t change the overall equation or which is most beneficial.
IE if you invested $200k in something today @ 5% and it compounded over 20-30 years, most of your compounding gains would come at the back end of that timeframe. Amortization takes that and shifts it to the front end, you pay more interest at first but then less and less over time.
Mortgage debt is the cheapest debt out there, I’d much rather have the cash in something else and deal with amortization + interest rather than tie up all the money in an asset that you either need to sell or leverage to pull the money out of.
IE if you invested $200k in something today @ 5% and it compounded over 20-30 years, most of your compounding gains would come at the back end of that timeframe. Amortization takes that and shifts it to the front end, you pay more interest at first but then less and less over time.
Mortgage debt is the cheapest debt out there, I’d much rather have the cash in something else and deal with amortization + interest rather than tie up all the money in an asset that you either need to sell or leverage to pull the money out of.
Keep in mind when you have 10% growth in stock market, you have to pay taxes. 10% growth is really 8% growth. I'd rather take guaranteed 7% payoff on mortgage while massively paying off the amortization than 8% possible growth in stock market
It's very little benefit while having a whole lot more risk and tax implications
06-13-2023, 09:37 AM
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#129
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The poorcels ITT amuse me.
06-13-2023, 09:43 AM
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#130
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Originally Posted By niospecv⏩
Wrong. I bought ~9 months ago with like a 780 credit score and the lowest I could get was 5.6%. And that's WITH buying 0.5 in points. The difference between a good and bad credit score is like .5%.The average interest rate for a 30 years mortgage is 7.06% right now. If you have excellent credit I'm sure you can secure a mortgage loan 4% and lower.
06-13-2023, 09:47 AM
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#131
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Originally Posted By LiveLaughLoath⏩
Ugh.. don't buy points. You can always refinance later if the rate ever drops, and it'll still be cheaper.Wrong. I bought ~9 months ago with like a 780 credit score and the lowest I could get was 5.6%. And that's WITH buying 0.5 in points. The difference between a good and bad credit score is like .5%.
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06-13-2023, 09:59 AM
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#132
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Originally Posted By DDCT1135⏩
Mortgage debt is more expensive but fixed investments are also far more lucrative as things like bond yields are also driven by the Fed Funds rate along with mortgage interest costs: back when mortgage rates were lower, 1-year treasuries were paying basically nothing and now you can buy 1yr treasuries north of 5% with zero risk.Mortgage debt is not cheap anymore. 6-7% interest is not cheap
Keep in mind when you have 10% growth in stock market, you have to pay taxes. 10% growth is really 8% growth. I'd rather take guaranteed 7% payoff on mortgage while massively paying off the amortization than 8% possible growth in stock market
It's very little benefit while having a whole lot more risk and tax implications
Keep in mind when you have 10% growth in stock market, you have to pay taxes. 10% growth is really 8% growth. I'd rather take guaranteed 7% payoff on mortgage while massively paying off the amortization than 8% possible growth in stock market
It's very little benefit while having a whole lot more risk and tax implications
It’s all interconnected, I would much rather have the cash in something else rather than plugging excessive additional amounts into a mortgage. You can always do both to mitigate risk on either side, but I’ll lean more towards carrying the mortgage.
06-13-2023, 10:04 AM
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#133
Originally Posted By Destor⏩
you didn't address the points I made. Even if you're a great investor, you're not going to avg much above 10% in growth. Assume 20% taxes - that's 8% growth rateMortgage debt is more expensive but fixed investments are also far more lucrative as things like bond yields are also driven by the Fed Funds rate along with mortgage interest costs: back when mortgage rates were lower, 1-year treasuries were paying basically nothing and now you can buy 1yr treasuries north of 5% with zero risk.
It’s all interconnected, I would much rather have the cash in something else rather than plugging excessive additional amounts into a mortgage. You can always do both to mitigate risk on either side, but I’ll lean more towards carrying the mortgage.
It’s all interconnected, I would much rather have the cash in something else rather than plugging excessive additional amounts into a mortgage. You can always do both to mitigate risk on either side, but I’ll lean more towards carrying the mortgage.
how is POTENTIAL 8% growth with a hell of a lot more risk a better deal than guaranteed 7% while also big time reducing the amortization chart on a house?
Paying off a house is not sexy, stocks are sexy. Lots of psuedo intellectual so called financial experts wants to recommend something sexy but it's not a better deal
maybe you have a point when mortgage rates are 2% for 30% years. When it's 7%, it's absolutely terrible to have a big mortgage balance
06-13-2023, 10:16 AM
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#134
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Originally Posted By Tuksonrider⏩
Buying points is absolutely worth it when the break even point isn't far and interest rates are skyrocketing. I don't see interest rates dipping below 5% for a loooooong time. If ever.Ugh.. don't buy points. You can always refinance later if the rate ever drops, and it'll still be cheaper.
06-13-2023, 10:36 AM
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#135
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Home prices are only half the issue right now
I don’t hear many people talk about general contractor/specialist labor costs
If you’ve gotten quotes recently you’d know it’s absolutely insane, we need to start running campaigns for women to get into trades like we did for getting women to code
BRB 40k for a new roof, 50k to replace a deck, 100k for foundation repair, 40k to repipe the house, 20k for new electrical panel, 20k to replace AC unit. The quotes for stuff like this will make your jaw fall to the floor
Most of these homes on the market are fixer uppers that need work like this based on when I looked at some homes around recently
You aren’t going to be happy when you spend 800k on a 400k house that needs 200k in work
I don’t hear many people talk about general contractor/specialist labor costs
If you’ve gotten quotes recently you’d know it’s absolutely insane, we need to start running campaigns for women to get into trades like we did for getting women to code
BRB 40k for a new roof, 50k to replace a deck, 100k for foundation repair, 40k to repipe the house, 20k for new electrical panel, 20k to replace AC unit. The quotes for stuff like this will make your jaw fall to the floor
Most of these homes on the market are fixer uppers that need work like this based on when I looked at some homes around recently
You aren’t going to be happy when you spend 800k on a 400k house that needs 200k in work
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06-13-2023, 10:38 AM
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#136
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Originally Posted By DDCT1135⏩
we will return to generational homes.The housing market will never go down
With rates being so stupid, nobody will move out so you will have artificially lowered supply for a very long time. Demand is not gonna catch up to supply.
With rates being so stupid, nobody will move out so you will have artificially lowered supply for a very long time. Demand is not gonna catch up to supply.
06-13-2023, 11:02 AM
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#137
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Originally Posted By NitrogenWidget⏩
How we gonna do that with the nuclear family being less and less prevalent tho?we will return to generational homes.
06-13-2023, 11:29 AM
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#138
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Originally Posted By DDCT1135⏩
I’m comparing the payoff specifically to treasury yields that provide guaranteed returns and move with the Fed Funds rate along with mortgage interest rates because all these things are interconnected. Stocks are a different thing and of course can provide enormous gains relative to paying off a mortgage in advance, but those are accompanied by risks.you didn't address the points I made. Even if you're a great investor, you're not going to avg much above 10% in growth. Assume 20% taxes - that's 8% growth rate
how is POTENTIAL 8% growth with a hell of a lot more risk a better deal than guaranteed 7% while also big time reducing the amortization chart on a house?
Paying off a house is not sexy, stocks are sexy. Lots of psuedo intellectual so called financial experts wants to recommend something sexy but it's not a better deal
maybe you have a point when mortgage rates are 2% for 30% years. When it's 7%, it's absolutely terrible to have a big mortgage balance
how is POTENTIAL 8% growth with a hell of a lot more risk a better deal than guaranteed 7% while also big time reducing the amortization chart on a house?
Paying off a house is not sexy, stocks are sexy. Lots of psuedo intellectual so called financial experts wants to recommend something sexy but it's not a better deal
maybe you have a point when mortgage rates are 2% for 30% years. When it's 7%, it's absolutely terrible to have a big mortgage balance
Treasury bills are taxed federally but not subject to state/local taxes.
This calculation does not change when interest rates go down again because these things are all interconnected and lower mortgage interest rates will be accompanied by lower treasury yields.
I would personally take the longest amortization lowest down payment with the lowest rate + early repayment provisions, then put the spare money to work doing any number of other things and keep it more liquid in case you need it to cover expenses.
06-13-2023, 11:37 AM
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#139
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don't forget
[buyer must assume $200,000 in back property tax]
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06-13-2023, 11:44 AM
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#140
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Originally Posted By BigDeeps01⏩
Ultimately, we won't. It's tough to keep an infinite-growth economy going in a shrinking world.How we gonna do that with the nuclear family being less and less prevalent tho?
The govt will pull out all the stops to fake growth, though. Continued monetary inflation will push home prices upward, and we will continue importing migrants to fake a population increase.
Both of those have a hard stop in the future. The world is de-dollarizing now, now that COVID showed the world that Uncle Sam will never decrease his deficits and intends to take all his creditors down with the fiat ship. And even the places we import migrants from are having drastically decreasing birthrates. Did you know that Mexico is at 1.9 births per woman, and Honduras is at 2.39?
But I think both changes will take a generation to process. We are mortally wounded as an economy and nation right now, but we can can-kick at least until the boomers die off circa 2040.
Hell, Japan is living that future right now. They are a dying nation, with 270% debt to GDP, a demographic nuke, and zero immigration. Mortally wounded, but their property market still hasn't capitulated.
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06-13-2023, 03:40 PM
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#141
Originally Posted By Destor⏩
And you think treasury yields will give u better than 7% growth rate? And you act like federal taxes are cheap. It's still about 20%I’m comparing the payoff specifically to treasury yields that provide guaranteed returns and move with the Fed Funds rate along with mortgage interest rates because all these things are interconnected. Stocks are a different thing and of course can provide enormous gains relative to paying off a mortgage in advance, but those are accompanied by risks.
Treasury bills are taxed federally but not subject to state/local taxes.
This calculation does not change when interest rates go down again because these things are all interconnected and lower mortgage interest rates will be accompanied by lower treasury yields.
I would personally take the longest amortization lowest down payment with the lowest rate + early repayment provisions, then put the spare money to work doing any number of other things and keep it more liquid in case you need it to cover expenses.
Treasury bills are taxed federally but not subject to state/local taxes.
This calculation does not change when interest rates go down again because these things are all interconnected and lower mortgage interest rates will be accompanied by lower treasury yields.
I would personally take the longest amortization lowest down payment with the lowest rate + early repayment provisions, then put the spare money to work doing any number of other things and keep it more liquid in case you need it to cover expenses.
You're glossing over the amortization point. Paying off a house early saved you massive amount of interest long term. If you can pay off a house in 10 years instead of 30, you likely save 100s and 100s of thousands of interest. This is not some small point to gloss over
Don't forget once the house is paid off, u have huge cash flow advantages
06-13-2023, 03:52 PM
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#142
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Originally Posted By Jaydawg08⏩
Spoken like a true rentcel that has no idea how to build wealthIt only takes one bad tenant to fuk up your house and investment. "Just rent it out bro!" Isn't a simple solution as it sounds
Anyway as long as our currency has no meaning assets like houses, land, gold etc will continue to sky rocket
End the fed
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06-13-2023, 04:06 PM
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#143
06-13-2023, 04:07 PM
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#144
06-13-2023, 04:42 PM
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#145
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Originally Posted By ~Hades~⏩
How many houses do you own again?so many absolute potato takes in here
06-13-2023, 05:03 PM
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#146
A lot of people in here not understanding supply and demand
Cliffs:
-The supply for affordable housing is low
-Therefore the demand is high
-The demand will not go down until the supply goes up
-It will take a long time for the supply to go up because they're not even building much right now
Supercliffs:
-It's not gonna crash anytime soon
Cliffs:
-The supply for affordable housing is low
-Therefore the demand is high
-The demand will not go down until the supply goes up
-It will take a long time for the supply to go up because they're not even building much right now
Supercliffs:
-It's not gonna crash anytime soon
06-13-2023, 05:10 PM
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#147
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Originally Posted By Omnivium⏩
Additionally, nobody wants to sell their house because interest rates are high. Therefore, it doesn't make sense to pull out a new mortgage right now. If people aren't pulling out new mortgages due to high rates, they aren't moving, which means fewer vacancies.A lot of people in here not understanding supply and demand
Cliffs:
-The supply for affordable housing is low
-Therefore the demand is high
-The demand will not go down until the supply goes up
-It will take a long time for the supply to go up because they're not even building much right now
Supercliffs:
-It's not gonna crash anytime soon
Cliffs:
-The supply for affordable housing is low
-Therefore the demand is high
-The demand will not go down until the supply goes up
-It will take a long time for the supply to go up because they're not even building much right now
Supercliffs:
-It's not gonna crash anytime soon
Right?
06-13-2023, 05:11 PM
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#148
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if you think it's bad now wait till the fed pivots in 9 months, median price is bumping up another 25%, not to mention the coasts will become de-facto untouchable as entry level homes will start at 1.5 mil
06-13-2023, 05:26 PM
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#149
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Originally Posted By 3fifty⏩
YeahAdditionally, nobody wants to sell their house because interest rates are high. Therefore, it doesn't make sense to pull out a new mortgage right now. If people aren't pulling out new mortgages due to high rates, they aren't moving, which means fewer vacancies.
Right?
Right?
06-13-2023, 05:28 PM
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#150
Originally Posted By Omnivium⏩
A lot of people in here not understanding supply and demand
Cliffs:
-The supply for affordable housing is low
-Therefore the demand is high
-The demand will not go down until the supply goes up
-It will take a long time for the supply to go up because they're not even building much right now
Supercliffs:
-It's not gonna crash anytime soon
Cliffs:
-The supply for affordable housing is low
-Therefore the demand is high
-The demand will not go down until the supply goes up
-It will take a long time for the supply to go up because they're not even building much right now
Supercliffs:
-It's not gonna crash anytime soon
Originally Posted By 3fifty⏩
I've repeated this 100 times in this threadAdditionally, nobody wants to sell their house because interest rates are high. Therefore, it doesn't make sense to pull out a new mortgage right now. If people aren't pulling out new mortgages due to high rates, they aren't moving, which means fewer vacancies.
Right?
Right?
Real estate market will not crash for a very very long time. One important point you guys didn't mention is most people are in very cheap mortgages with massive equity and very low interest rate. They have zero urgency to sell. Why would I dump a mortgage with 200k equity and 2% interest at an Era of super high prices and super high rates?
For the real estate market to crash, you need lots of people with urgency to sell/unable to make payment. Most people in mortgages have very cheap payments. Why wouldn't they be able to make a 1500 payment when they know rent would be 3K a month? They'll starve before they default on a mortgage. It's the first thing everyone pays. They're not gonna sell unless they get top dollar because whats the urgency? They're in a great position. You have very very stubborn buyers.
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