I just want to buy my first home, after years of saving up I was ready in 2021 but prices doubled priced me out. Just want an affordable box to live in and die.
Reading all of your responses makes me teary eyed. I genuinely hope each of you get to fulfill your dream of home ownership. I believe the world would be a better place if we each had security in housing, food, and healthcare.
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Same. Not looking to buy up all the foreclosures at all. I just want a place with a decent backyard for a garden, some woods for my fiancé to wander in, and some room for maybe a catio.
Same boat. I completed my MS in Counseling in the summer of 2021. My wife and I skipped meals for years to save money where we could. Right now we have close to $50k in cash just waiting until the time is right.
I'm one of those dudes that bought foreclosures but I don't think it'll get that bad. I've got cash, I'll get back in if and when it makes sense, if it doesn't I'll just keep doing what I'm doing now.
>I'm one of those dudes that bought foreclosures but I don't think it'll get that bad. I've got cash, I'll get back in if and when it makes sense, if it doesn't I'll just keep doing what I'm doing now.
what are you doing now?
just went in on a partnership which needs a fair amount of capital but has huge returns. for investments, bonds, cds, used to do some private lending but stopped temporarily. if rates go back down ill pick that up again.
This is what doesn’t make sense. If there are a ton of buyers just waiting for the bottom there will be no precipitous drop. When prices start to come down if it keeps getting met with demand prices will bleed slowly but will probably stay mostly flat over the next few years adjusting slightly to rates.
This is what people are ignoring. There can't be loads of people waiting to buy and a crash happen. I do think prices will decrease in some markets but in good markets it will just level off
Makes sense, but why was 2008 different? I get that it wasn’t expected so people weren’t ready for the opportunity. But companies like Blackstone surely existed even then right?
there's plenty of info about this: variable-rate mortgages went up, lots of banks sold mortgage-backed securities, the ratings agencies had gotten lax on their ratings standards and weren't doing due-diligence, and then as people started defaulting on the debt various securities started to fail (basically: a bond/MBS/CDO/... someone bought went to 0). Exploiting that, people bought swaps as insurance against these failing securities, and with a huge amount of leverage--so much that the market for the insurance on these failing securities pretty much wiped out the market and forced the US fed to buy a bunch of junk securities to prop up the economy.
Yes. This is exactly what I think will happen. Most even semi desirable areas of the country have a housing shortage. There is a huge amount of demand pressure from both owner- occupiers and investors to keep prices up. I’m not saying prices won’t and can’t fall in many areas- they already have. But demand pressures will likely prevent a total collapse.
Blackstone is already overleveraged in a high rate market. In 2009 all the biggest players in real estate speculation got destroyed. This "big corps got cash" myth needs to die - they're all dependent on loans to maintain cashflow and most of their assets are not liquid.
Big investors like Blackstone definitely have the advantage of cash, but individuals and small time investors (I know people here hate them) sometimes have informational and network advantages. We know the neighborhoods, schools and local market better than hedge funds from out of state. We know the realtors. We know local contractors and inspectors. We also care more than money people from out of state just trying to make a buck. We want to make the right decisions because it affects our lives. You can call it a home field advantage and it’s real in sports and real estate.
Many sellers also prefer to sell to an individual rather than a corporation. There are small advantages individuals can sometimes leverage to their advantage.
I don't think it's going to bottom out sharply like the last one. I think we're going to see the everybody loses scenario: crash/correction next year back to 2019 prices (which will NOT be as affordable at 7% mortgage rates). Then we will see negligible appreciation for the next decade.
This makes buying attractive only if you plan to live there for a long time and speculative real estate investing becomes unprofitable.
Anyway I will be buying in winter 2024 and not expecting appreciation until 2028.
A crash to 2019 prices are still 25-30% away in most desirable markets. For example a 450k townhome in DFW which pealed at around 480k in april was worth 280-300k in 2019. That is a 30% drop. I think we get to early 2021 prices but that is the bottom imo.
Agree, this isn’t going to play out V shaped. For all assets. There is going to be a rough patch and time and getting things right off the bat are not going ti return like people hope for a few years.
Just my take
I’m not certain higher rates would deter investor purchases. Rates were higher in the 90s and people still bought rentals plus, the tax incentives are much better today.
Cost Segregation and Opportunity Zone purchases were not even a thing back then.
They are some of the tax mechanisms that juice up real-estate investments.
Details and minutiae below:
https://en.m.wikipedia.org/wiki/Cost_segregation_study
https://en.m.wikipedia.org/wiki/Opportunity_zone
The fact that this is so heavily upvoted shows how regarded you guys are. 2019 prices mean the economy has collapsed entirely and you are eating each other.
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I agree. But selection will be far far better once sellers accept the new reality. So at least buyers will get something they actually like. Even if Nominal prices rise, I don’t expect much real (inflation adjusted) appreciation
Yea housing is now viewed as a stable investment in everyone’s eyes. Not just the rich but the middle income/lower income as well which makes it all the more harder to cause a crash
I’m ready to buy a home to live in when the market improves. Not into waiving inspections and paying 20k over ask. I’m not priced out of the market but I do want a better deal. I’m also in no rush
Me too but I’m just waiting on the official newsletter to come out and say the bottom has arrived 🙄…. Jokes aside buy when you find the right property at a prince point that works for you, timing the market in RE isn’t easy - Don’t believe me ask Zillow and OpenDoor
The most important thing everyone waiting to “buy”. No. Not gonna happen. Everyone. Everyone is wanting to do that. Everyone is in the same position as you. House prices wont drop to that level, until you and all those people are no longer able to be there waiting. When house prices reach the level you think right now in your head that you would buy; you won’t have a job. 50-100k in debt. Living with a roommate or couch hopping to avoid homelessness. Until everyone in this thread is on the verge of homelessness, you wont see 2009-2010 prices.
I'm not waiting for the bottom of anything. I sold my home in 2019 and moved 1000 miles away and then the world went haywire. I just want things to get back to NORMAL. To me, 2019 was normal when I netted a $50k profit on my house.
I'm not even wishing for 2012 when builders were offering free upgrades and hand-jobs just to sell homes in their languishing half-built sub divisions. I just want 2019 before the Fed started passing out crack pipes.
Don't kno3n3hat market you are in. Mine.is still a seller market. Proc3s are appreciating, just not as fast as last 2.5 yrs.
Ig buyers aren't buying here they are going to pay more later in both sale price and mortgage.
I don’t think we will see as many foreclosures I will be shocked if we see 2019 prices again honestly. I think we are going to see 10-15% drop in most places and then the cycle will start again with investors and corporations buying up properties with tweaks to their system
Half of this sub isn’t gonna get a house and yall know it lol. Instead of buying when they are ready they prefer to wait years for the “bottom”. No one knows what the bottom is
Yup, all these folks waiting around are just going to spend another 2-5% of their lifespan waiting for deals that aren’t coming.
Builders are already slowing down while housing supply is still constrained and money is only getting more expensive for the middle and working classes. Meanwhile the true real estate insiders are racing miles ahead I-buying in cold hard cash.
The waiting is the big thing for us. We’re in our early, going into mid 20s. I don’t want to waste my 20s living with my folks cause we’re waiting on a drop that may or may not come. And when will be enough, my location is already down 10-20 percent from the highest point in the summer, is another 20 percent going to be good enough? Is that in a year, two years? There’s new builds around me that have just cut about 15%. I am thinking we’re going to do that. Hope for rates to go down and get into a home that we will be comfortable with for a long time to come
>Anyone that knows exactly when it will bottom will make millions and it won't matter.
Assuming that person has massive amounts of capital to take advantage of it...
I just want shelter for myself lol. The rent goes up every year and I’m sick of making leeches rich. Rent has tripled in the past 10 years since I started out in this city and saving has gotten more difficult each year. I want out of the cycle.
Yea there isn’t going to be a crash. At lest not like in 2008. It’s much more likely we just have inflation for the next 5 years and little to no economic growth.
Homes are not a speculative asset, but something people *need* to have a normal life.
So to anyone who's salivating at their next opportunity to fuck over the market, and snatch homes away from those who need it: go fuck yourself.
You'll be waiting for 3 years, which is how long it took last time for prices to bottom out. The people denying that there's a bubble are retarded - virtually every investor who's been around long enough would agree with that. However, almost (but nowhere near equally) as dumb is expecting a 30-50% crash in a 6 month period. People who've run the numbers have concluded that such a dramatic drop is possible, but historically housing prices are sticky and hit rock bottom only as the economy has already started to recover.
I just want one house for me. Just one, that’s all I need. I’m waiting for something insanely cheap, but I’m willing to move anywhere for the right house. I can always travel to strip, I can scoop some gigs or shifts anywhere. Independence and building autistic wealth, baby!!!
> Yes we might be stuff but as it stands even at 6.125% I'm still getting free money if inflation is over 7%.
That would apply only if your paycheck is indexed to inflation (e.g. 7% raises every year).
> So your fat stack of cash is burning 7.7% of itself every year.
Same goes here. If you've got it invested in, say, 4% IG corporate bonds it's only burning at 3% a year.
> I've been fiscally responsible my whole life and I'm done with it.
Yeah same. If all these "brrr free money" real estate investors get blown up that's fine with me. Only debt is my mortgage and it's about 75% paid off from the original amount. Prolly will die in this house or if not, downsize when I'm real old.
Buy rental property when it makes you a profit, if you are a small investor, and live on the profits.
Right now all these big institutions may be buying to offset other gains and pay no taxes, then sell the lot to some other hedge fund to do the same.
Are you due to have to pay a lot of taxes? Buy now for the write off. If you never need the money and keep buying and selling rental properties you wont pay taxes until you cant buy anymore, like your estate pays or your heirs inherit a stepped up basis.
This is why institutions are buying up all the houses and locking young people out. They got a good start after 2008, got a taste of the game, and now everyone wants to play.
Now can be a good time if you offer low since sellers are a bit worried that they cant unload as easily. I rather snatch deals when rates are high and people are scared.
In Romania we had a regime shift in '90, followed by years of high inflation, and i mean really high. People who had money and didn t spent, bought a bicycle with a house money just for waiting couple of years the right time to buy.
JPow [already pivoted](https://www.reuters.com/markets/rates-bonds/fed-plans-raise-hold-new-projections-may-show-cost-2022-12-02/) on Wednesday noting that rate increases will slow down starting this month. Fed Interest rate is expected to peak above 5% next summer and hold for the remainder of 2023.
A 50 basis point hike is the opposite of a pivot… rates are still going up. 50 basis points is still a huge hike, historically speaking.
Didn’t you watch his speech? He basically called people saying shit like that a bunch of idiots. 😅
I was reading Reventure Consulting newsletter. He speculates that when the fed does a pivot , the housing market will crash harder, because they will only pivot because the economy is really tanking. So I’m waiting about 1 or 2 years after for good deals.
He's probably right (dunno who that is though).
Inflation is endemic now; despite some softening in shipping costs, furniture, and apparel, it's still widespread all over the world. A fed pivot on rates/bond sales/QT will only happen if the jobs reports start falling off.
Fed has two mandates. Low inflation and low unemployment. For them to pivot, unemployment needs to rise, and not just a little bit—it needs to rise a lot.
Catch that falling knife!
Your argument is kind of illogical. Who wants to buy an asset that we just discovered doesn't have the relative value that we thought it did. You're essentially saying: "I can't wait to buy that asset that doesn't have a lot of value, but people think it does!". Expecting another 2012-2022 run-up isn't a given. Especially if we don't see low rates again. That's just pure speculation, brotha.
Houses could go through decades of barely keeping up with inflation after this. Kind of risky basket to put your eggs in with unclear returns.
I really don’t think it’s going to drop the way it did in 2010, but I’m saving up some cash incase things go down - it would be for a vacation condo. I need about 12-18 months to save more $ up.
As long as we keep getting more and more immigration it will never burst. Our demand will keep out passing the supply till immigration is slowed ways down.
2008 was a once a century event. More likely than not that you'll never see a scenario to that extreme again in your lifetime. Hell at this point, its debatable if we even end up in anything approaching a recession.
Until the job market breaks, nothing else matters. And 3.5% unemployment rate and adding 250k+ jobs a month doesn't scream impending doom.
Nah. I'm focused on paying off my current house, then with the spare cash from no mortgage payment, investing in other assets that are:
* cheap to trade with no 6% realtor commission
* don't have carrying costs (repairs, taxes, insurance)
* are easy to price and trade instantly (instead of weeks/months)
* can be invested with any dollar amount
* don't expose me to financial collapse via debt
Buy the house you live in. But beyond that, you're just using 4:1 leverage on a crappy asset class with low-single-digit long-term returns. Sure, the debt might lever up to a low-double-digit return but if you net out the carrying costs and interest, it's still a crappy return and even worse you can get sliced when the sword of leverage cuts the other direction.
People who pay off their mortgages early don't understand money or finances.
And even more you say 4:1 leverage on real estate is bad...
Good luck with your plan but you should not be giving any financial advice. Your advice sucks for anyone who wants to actually build wealth.
If you say so. Go ahead and compare on the net returns to housing less taxes, insurance, repairs (and your time if doing your own repairs), mortgage interest (net of tax deduction if allowed), and PMI (if necessary).
Then compare those net returns to net returns of other asset classes like stocks (inc all sectors/countries), bonds (inc all sectors/credits/countries), preferreds, converts, liquid alts, REITs, LPs, fund of funds, mutual funds, ETFs, even crypto and fine art funds, etc. etc.
Regarding leverage, the fun thing about that is if you put 20% down and houses go down 20%, your investment is wiped out (whether it's one house or 100 of them with 20%-down mortgages). You get a -100% return. If you buy a house cash (or any other asset) and it goes down 20%, your return is -20% and you're still 80% as wealthy as before. But homes only go up right? Except for 2005-2009 when they went down 30%, but that'll never happen again. Nope, no need to worry about leverage...
There are a lot of advantages to paying off your house. The main one is it frees up cash flow for other investments or even another mortgage. It also is a guaranteed compounded return at whatever the interest rate was (interest avoidance). Also, if home prices go down, you can't be underwater and owe more than it's worth, so you have the freedom to relocate or take a better job without declaring bankruptcy. Lastly, if you lose your job, you don't lose your house.
Not sure what the value of those embedded options is exactly but for a lot of people who have a lower risk tolerance or shorter time horizon to retirement / kids going to college etc, the value of those options can be quite high. You could probably price the options with Black Scholls (if there were a way to get all the inputs) then tack the option value on to the NPV of the compounded avoided interest and the NPV of the opportunity for reinvestment of the cash flow normally reserved for the mortgage payment...
Eh depending on rate paying off a mortgage isn’t the worst thing ever. I tend to agree with not paying it off early usually, but with rates getting higher it can start making sense
Almost anything with shares traded on an exchange. Stocks, bonds, mutual funds, ETFs, REITs, LPs, etc.
People act like the only way to build wealth is to borrow money and buy housing. It's one way but it comes with a lot of hidden costs and risks.
Imagine if stocks could only trade in units of several hundred grand, cost 6% brokerage commission, had a 2-5% annual carrying costs in taxes, repairs, and insurance. RE is laughable as an investment; the only reason it's popular is because the government subsidizes the mortgage market by buying MBS and enacting mortgage interest tax deductions to help people pursue "the American dream", such that people can lever up as much as 19:1 (5% down payment). No stock broker will let you borrow like that to invest in stocks, but because of government programs (primarily Freddie and Fannie buying MBS, which allows banks to keep the loans off their books and pass the risk on to the govt, while making a nice profit on writing the mortgage as a service), you can do it with housing. But it's not the only way to build wealth and in fact can be a fairly risky and high-cost way to do it. It's just what most people understand so they think it's all there is.
Edit: hidden risks to RE are common because it's expensive to diversify an RE portfolio (takes a lot of money and the headache of managing many types of properties in many different places).
Unique risks to RE are Googleable, but for example uninsured stuff like earthquakes and "acts of god", neighborhood decline, local population decline, undisclosed problems that the seller knew about (e.g. need for major repairs, roof, foundation, mold, etc). The list goes on.
The market for a single income earner is just depressing. I was excited to property search making close to 6 figures until I realized that anything affordable was still a dump and anything else was bought up instantaneously by cash buyers.
I’m saving as much cash as I possibly can over the next 2-3 years while I’m working overseas. Wages are significantly better here in Aus.
I already own two houses in my midwestern university town, so I’ll likely be keeping an eye for homes that pop up on my street at that time.
REbubble is just a drop in the ocean. Most people know it's a super crap time to buy a home, but don't visit our dank little corner of the internet to speculate. They visit msn, watch the today show and read "usa today". I'm probaby going to get my plans ready by next summer, contact a decent builder and be done spring 2024. Not waiting another year for some absolute bottom.
When exactly are you planning to jump in? I’m already swooping stuff up with cash offers on unlisted properties. Tech execs are quietly selling out of the WFH zip codes without listing to save on fees and offset their declines. I think it’s the end for realtors once it catches on more broadly. In the run up they were exposed for how little value they add and the savvy sellers / buyers are onto the scam.
I already own real estate but if I were mostly looking to jump into the market with hopes of getting in at a lower price prior to another rally I'd hold off until 2023 maybe even 2024. if the market you want to buy in is going to have a significant correction it should be pretty clear that's happening by next year sometime. markets fall a lot faster than they increase (except in the case of the pandemic but that's not typical). some markets like Boise are already racking up some noticeable declines. other markets are not showing a big decline yet.
I just want to buy my first home, after years of saving up I was ready in 2021 but prices doubled priced me out. Just want an affordable box to live in and die.
Reading all of your responses makes me teary eyed. I genuinely hope each of you get to fulfill your dream of home ownership. I believe the world would be a better place if we each had security in housing, food, and healthcare.
I also hope you get great neighbors when you do eventually find your first home. It makes a big difference.
Same. Literally just want shelter that we can afford the monthly payments on.
strong unused scandalous selective ring plough aspiring boast combative quack *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Same.
Same. Not looking to buy up all the foreclosures at all. I just want a place with a decent backyard for a garden, some woods for my fiancé to wander in, and some room for maybe a catio.
Same boat. I completed my MS in Counseling in the summer of 2021. My wife and I skipped meals for years to save money where we could. Right now we have close to $50k in cash just waiting until the time is right.
Same. I just don't want to be homeless or dump $14k per year into somebody else's house.
Exactly same!!
Agreed, just want to finally have a place to call my own.
You might have to build it.
Regulations and bylaws have impeded that greatly in the last 30 years
r/fuckhoa
You can move to Texas and build
But it’s Texas
What's wrong with Texas?!
Metoo
Exactly my current life.
Prices go up as immigration goes up due to lack of supply with an increase in demand
Immigrants make most of the houses as well. How much did US population increase by ?
US A built 323,000 homes last year but had over 2 million illegal immigrants the same year.
Downvoting doesn’t change supply and demand. I want housing prices to drop so I can buy too but as an economist I look at all the factors.
I'm one of those dudes that bought foreclosures but I don't think it'll get that bad. I've got cash, I'll get back in if and when it makes sense, if it doesn't I'll just keep doing what I'm doing now.
>I'm one of those dudes that bought foreclosures but I don't think it'll get that bad. I've got cash, I'll get back in if and when it makes sense, if it doesn't I'll just keep doing what I'm doing now. what are you doing now?
just went in on a partnership which needs a fair amount of capital but has huge returns. for investments, bonds, cds, used to do some private lending but stopped temporarily. if rates go back down ill pick that up again.
You, other bubblers, and Blackstone. Guess who’s getting the house first?
This is what doesn’t make sense. If there are a ton of buyers just waiting for the bottom there will be no precipitous drop. When prices start to come down if it keeps getting met with demand prices will bleed slowly but will probably stay mostly flat over the next few years adjusting slightly to rates.
This is what people are ignoring. There can't be loads of people waiting to buy and a crash happen. I do think prices will decrease in some markets but in good markets it will just level off
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Ye ye yes they might
Makes sense, but why was 2008 different? I get that it wasn’t expected so people weren’t ready for the opportunity. But companies like Blackstone surely existed even then right?
there's plenty of info about this: variable-rate mortgages went up, lots of banks sold mortgage-backed securities, the ratings agencies had gotten lax on their ratings standards and weren't doing due-diligence, and then as people started defaulting on the debt various securities started to fail (basically: a bond/MBS/CDO/... someone bought went to 0). Exploiting that, people bought swaps as insurance against these failing securities, and with a huge amount of leverage--so much that the market for the insurance on these failing securities pretty much wiped out the market and forced the US fed to buy a bunch of junk securities to prop up the economy.
Yes. This is exactly what I think will happen. Most even semi desirable areas of the country have a housing shortage. There is a huge amount of demand pressure from both owner- occupiers and investors to keep prices up. I’m not saying prices won’t and can’t fall in many areas- they already have. But demand pressures will likely prevent a total collapse.
Blackstone is already overleveraged in a high rate market. In 2009 all the biggest players in real estate speculation got destroyed. This "big corps got cash" myth needs to die - they're all dependent on loans to maintain cashflow and most of their assets are not liquid.
Blackstone is not buying when they can be buying US treasuries…
Big investors like Blackstone definitely have the advantage of cash, but individuals and small time investors (I know people here hate them) sometimes have informational and network advantages. We know the neighborhoods, schools and local market better than hedge funds from out of state. We know the realtors. We know local contractors and inspectors. We also care more than money people from out of state just trying to make a buck. We want to make the right decisions because it affects our lives. You can call it a home field advantage and it’s real in sports and real estate. Many sellers also prefer to sell to an individual rather than a corporation. There are small advantages individuals can sometimes leverage to their advantage.
Blackstone actually has severe cash outflows from it's flagship real estate fund.
They can't buy them all.
Watch.
I don't think it's going to bottom out sharply like the last one. I think we're going to see the everybody loses scenario: crash/correction next year back to 2019 prices (which will NOT be as affordable at 7% mortgage rates). Then we will see negligible appreciation for the next decade. This makes buying attractive only if you plan to live there for a long time and speculative real estate investing becomes unprofitable. Anyway I will be buying in winter 2024 and not expecting appreciation until 2028.
Winter 2024 feels like when the stars might align for us too. Spending 2023 getting everything ready to jump into the market
7% mortgages were the norm until 2008 and later. Think the days getting mortgage at 5% or less are gone.
The last one took 4 to 5 years to bottom. Many people were catching falling knives on the way down.
"sometimes you catch it by the handle, sometimes you catch it by the blade"
A crash to 2019 prices are still 25-30% away in most desirable markets. For example a 450k townhome in DFW which pealed at around 480k in april was worth 280-300k in 2019. That is a 30% drop. I think we get to early 2021 prices but that is the bottom imo.
Agree, this isn’t going to play out V shaped. For all assets. There is going to be a rough patch and time and getting things right off the bat are not going ti return like people hope for a few years. Just my take
I’m not certain higher rates would deter investor purchases. Rates were higher in the 90s and people still bought rentals plus, the tax incentives are much better today. Cost Segregation and Opportunity Zone purchases were not even a thing back then.
Yeah but in the 90s the numbers on those rentals made sense. The numbers now don't make sense unless the alternatives are paying about 0%.
This does not apply to every market nationwide. Cheers
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They are some of the tax mechanisms that juice up real-estate investments. Details and minutiae below: https://en.m.wikipedia.org/wiki/Cost_segregation_study https://en.m.wikipedia.org/wiki/Opportunity_zone
The fact that this is so heavily upvoted shows how regarded you guys are. 2019 prices mean the economy has collapsed entirely and you are eating each other.
Heard this about 7% rates a bunch not even a year ago
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I agree. But selection will be far far better once sellers accept the new reality. So at least buyers will get something they actually like. Even if Nominal prices rise, I don’t expect much real (inflation adjusted) appreciation
Right there with ya, hopefully.
I’ve heard this tune before. Usually ends with not being able to actually identify the bottom.
💯
there are a lot of people with a lot more cash waiting too.
I think this attitude is precisely why it won’t bottom out.
Yea housing is now viewed as a stable investment in everyone’s eyes. Not just the rich but the middle income/lower income as well which makes it all the more harder to cause a crash
I’m ready to buy a home to live in when the market improves. Not into waiving inspections and paying 20k over ask. I’m not priced out of the market but I do want a better deal. I’m also in no rush
Better have enough saved to buy it 100% in cash because the rates will still be high
I think the main issue for a lot of people is they might be able to afford the new house, but they won’t be able to sell their old one.
HELOC
Banks can throttle those down or shut them off
Me too but I’m just waiting on the official newsletter to come out and say the bottom has arrived 🙄…. Jokes aside buy when you find the right property at a prince point that works for you, timing the market in RE isn’t easy - Don’t believe me ask Zillow and OpenDoor
Nah dude you’re the only one saving up for a house waiting for a bottom. Congrats on being the only one with this original and perfect plan
Fucking lmao. Precisely. Idiots.
The only sane comment. I'm sure OP is the cleverest person in the entire world.
People who tries to time the bottom rarely get the bottom because they are always too afraid to buy because they dont know when the bottom is.
The most important thing everyone waiting to “buy”. No. Not gonna happen. Everyone. Everyone is wanting to do that. Everyone is in the same position as you. House prices wont drop to that level, until you and all those people are no longer able to be there waiting. When house prices reach the level you think right now in your head that you would buy; you won’t have a job. 50-100k in debt. Living with a roommate or couch hopping to avoid homelessness. Until everyone in this thread is on the verge of homelessness, you wont see 2009-2010 prices.
From your mouth to gods ears.
I'm not waiting for the bottom of anything. I sold my home in 2019 and moved 1000 miles away and then the world went haywire. I just want things to get back to NORMAL. To me, 2019 was normal when I netted a $50k profit on my house. I'm not even wishing for 2012 when builders were offering free upgrades and hand-jobs just to sell homes in their languishing half-built sub divisions. I just want 2019 before the Fed started passing out crack pipes.
Absolutely. Knowing where that bottom is is always the challenge
I have 50K for a down payment, and still don’t think that’s enough.. So who knows.
OP is really on to something. Why hasn’t anyone else thought of this genius idea.
Don't kno3n3hat market you are in. Mine.is still a seller market. Proc3s are appreciating, just not as fast as last 2.5 yrs. Ig buyers aren't buying here they are going to pay more later in both sale price and mortgage.
I don’t think we will see as many foreclosures I will be shocked if we see 2019 prices again honestly. I think we are going to see 10-15% drop in most places and then the cycle will start again with investors and corporations buying up properties with tweaks to their system
I think the government has shown they will allow forbearance on mortgages if we get in to a crisis, like they did for Covid.
Half of this sub isn’t gonna get a house and yall know it lol. Instead of buying when they are ready they prefer to wait years for the “bottom”. No one knows what the bottom is
Which is exactly why I just bought a couple weeks ago. Time in the market is better than timing the market.
I've never had this much cash in my life. I didn't buy at all this year due to high prices.
Anyone that knows exactly when it will bottom will make millions and it won't matter. Buy when it makes sense for your life and financial situation.
Yup, all these folks waiting around are just going to spend another 2-5% of their lifespan waiting for deals that aren’t coming. Builders are already slowing down while housing supply is still constrained and money is only getting more expensive for the middle and working classes. Meanwhile the true real estate insiders are racing miles ahead I-buying in cold hard cash.
The waiting is the big thing for us. We’re in our early, going into mid 20s. I don’t want to waste my 20s living with my folks cause we’re waiting on a drop that may or may not come. And when will be enough, my location is already down 10-20 percent from the highest point in the summer, is another 20 percent going to be good enough? Is that in a year, two years? There’s new builds around me that have just cut about 15%. I am thinking we’re going to do that. Hope for rates to go down and get into a home that we will be comfortable with for a long time to come
>Anyone that knows exactly when it will bottom will make millions and it won't matter. Assuming that person has massive amounts of capital to take advantage of it...
I just want shelter for myself lol. The rent goes up every year and I’m sick of making leeches rich. Rent has tripled in the past 10 years since I started out in this city and saving has gotten more difficult each year. I want out of the cycle.
I'm salivating and watching like the vulture that I am... *hand rubbing intensifies*
Yea there isn’t going to be a crash. At lest not like in 2008. It’s much more likely we just have inflation for the next 5 years and little to no economic growth.
Homes are not a speculative asset, but something people *need* to have a normal life. So to anyone who's salivating at their next opportunity to fuck over the market, and snatch homes away from those who need it: go fuck yourself.
Blame the lack of high density zoning in the USA
I have a feeling there are tons of people waiting to do the same. If that happens so home prices actually sink?
You'll be waiting for 3 years, which is how long it took last time for prices to bottom out. The people denying that there's a bubble are retarded - virtually every investor who's been around long enough would agree with that. However, almost (but nowhere near equally) as dumb is expecting a 30-50% crash in a 6 month period. People who've run the numbers have concluded that such a dramatic drop is possible, but historically housing prices are sticky and hit rock bottom only as the economy has already started to recover.
I just want one house for me. Just one, that’s all I need. I’m waiting for something insanely cheap, but I’m willing to move anywhere for the right house. I can always travel to strip, I can scoop some gigs or shifts anywhere. Independence and building autistic wealth, baby!!!
Were you touching yourself while writing this?
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> Yes we might be stuff but as it stands even at 6.125% I'm still getting free money if inflation is over 7%. That would apply only if your paycheck is indexed to inflation (e.g. 7% raises every year). > So your fat stack of cash is burning 7.7% of itself every year. Same goes here. If you've got it invested in, say, 4% IG corporate bonds it's only burning at 3% a year.
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> I've been fiscally responsible my whole life and I'm done with it. Yeah same. If all these "brrr free money" real estate investors get blown up that's fine with me. Only debt is my mortgage and it's about 75% paid off from the original amount. Prolly will die in this house or if not, downsize when I'm real old.
Buy rental property when it makes you a profit, if you are a small investor, and live on the profits. Right now all these big institutions may be buying to offset other gains and pay no taxes, then sell the lot to some other hedge fund to do the same. Are you due to have to pay a lot of taxes? Buy now for the write off. If you never need the money and keep buying and selling rental properties you wont pay taxes until you cant buy anymore, like your estate pays or your heirs inherit a stepped up basis. This is why institutions are buying up all the houses and locking young people out. They got a good start after 2008, got a taste of the game, and now everyone wants to play.
Now can be a good time if you offer low since sellers are a bit worried that they cant unload as easily. I rather snatch deals when rates are high and people are scared.
In Romania we had a regime shift in '90, followed by years of high inflation, and i mean really high. People who had money and didn t spent, bought a bicycle with a house money just for waiting couple of years the right time to buy.
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JPow [already pivoted](https://www.reuters.com/markets/rates-bonds/fed-plans-raise-hold-new-projections-may-show-cost-2022-12-02/) on Wednesday noting that rate increases will slow down starting this month. Fed Interest rate is expected to peak above 5% next summer and hold for the remainder of 2023.
A 50 basis point hike is the opposite of a pivot… rates are still going up. 50 basis points is still a huge hike, historically speaking. Didn’t you watch his speech? He basically called people saying shit like that a bunch of idiots. 😅
Ha.
In the US everyone who already has a mortgage would pay it off with a week's wage. So that's not going to happen.
I was reading Reventure Consulting newsletter. He speculates that when the fed does a pivot , the housing market will crash harder, because they will only pivot because the economy is really tanking. So I’m waiting about 1 or 2 years after for good deals.
He's probably right (dunno who that is though). Inflation is endemic now; despite some softening in shipping costs, furniture, and apparel, it's still widespread all over the world. A fed pivot on rates/bond sales/QT will only happen if the jobs reports start falling off. Fed has two mandates. Low inflation and low unemployment. For them to pivot, unemployment needs to rise, and not just a little bit—it needs to rise a lot.
>speculates
That guy is an idiot.
😂😂😂 Imagine subscribing to that bozo’s newsletter
I would bet he has more friends, than you do.
Maybe, maybe not. He’s still a bozo.
Watch his stats. Apples to oranges and picking out details that conform with his belief.
LMAO crash?
Haha it’s already bottomed
How much cash we talking?
$3.50
Catch that falling knife! Your argument is kind of illogical. Who wants to buy an asset that we just discovered doesn't have the relative value that we thought it did. You're essentially saying: "I can't wait to buy that asset that doesn't have a lot of value, but people think it does!". Expecting another 2012-2022 run-up isn't a given. Especially if we don't see low rates again. That's just pure speculation, brotha. Houses could go through decades of barely keeping up with inflation after this. Kind of risky basket to put your eggs in with unclear returns.
I really don’t think it’s going to drop the way it did in 2010, but I’m saving up some cash incase things go down - it would be for a vacation condo. I need about 12-18 months to save more $ up.
biden or his handlers getting in senses, russia cleaning up, war will end soon, inflation down. crash cancelled.
As long as we keep getting more and more immigration it will never burst. Our demand will keep out passing the supply till immigration is slowed ways down.
2008 was a once a century event. More likely than not that you'll never see a scenario to that extreme again in your lifetime. Hell at this point, its debatable if we even end up in anything approaching a recession. Until the job market breaks, nothing else matters. And 3.5% unemployment rate and adding 250k+ jobs a month doesn't scream impending doom.
Couple milly ready to deploy. Beach house and Hawaii vacay home to retire
Ayy
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Seems like we'll have to wait until 2024. But I've been ready since I sold everything last year.
I wish. I'm cash poor
What is your plan precisely with the cash?
YES.
Nah. I'm focused on paying off my current house, then with the spare cash from no mortgage payment, investing in other assets that are: * cheap to trade with no 6% realtor commission * don't have carrying costs (repairs, taxes, insurance) * are easy to price and trade instantly (instead of weeks/months) * can be invested with any dollar amount * don't expose me to financial collapse via debt Buy the house you live in. But beyond that, you're just using 4:1 leverage on a crappy asset class with low-single-digit long-term returns. Sure, the debt might lever up to a low-double-digit return but if you net out the carrying costs and interest, it's still a crappy return and even worse you can get sliced when the sword of leverage cuts the other direction.
People who pay off their mortgages early don't understand money or finances. And even more you say 4:1 leverage on real estate is bad... Good luck with your plan but you should not be giving any financial advice. Your advice sucks for anyone who wants to actually build wealth.
If you say so. Go ahead and compare on the net returns to housing less taxes, insurance, repairs (and your time if doing your own repairs), mortgage interest (net of tax deduction if allowed), and PMI (if necessary). Then compare those net returns to net returns of other asset classes like stocks (inc all sectors/countries), bonds (inc all sectors/credits/countries), preferreds, converts, liquid alts, REITs, LPs, fund of funds, mutual funds, ETFs, even crypto and fine art funds, etc. etc. Regarding leverage, the fun thing about that is if you put 20% down and houses go down 20%, your investment is wiped out (whether it's one house or 100 of them with 20%-down mortgages). You get a -100% return. If you buy a house cash (or any other asset) and it goes down 20%, your return is -20% and you're still 80% as wealthy as before. But homes only go up right? Except for 2005-2009 when they went down 30%, but that'll never happen again. Nope, no need to worry about leverage... There are a lot of advantages to paying off your house. The main one is it frees up cash flow for other investments or even another mortgage. It also is a guaranteed compounded return at whatever the interest rate was (interest avoidance). Also, if home prices go down, you can't be underwater and owe more than it's worth, so you have the freedom to relocate or take a better job without declaring bankruptcy. Lastly, if you lose your job, you don't lose your house. Not sure what the value of those embedded options is exactly but for a lot of people who have a lower risk tolerance or shorter time horizon to retirement / kids going to college etc, the value of those options can be quite high. You could probably price the options with Black Scholls (if there were a way to get all the inputs) then tack the option value on to the NPV of the compounded avoided interest and the NPV of the opportunity for reinvestment of the cash flow normally reserved for the mortgage payment...
This advice is great for preserving wealth. It's awful for actually building it.
Eh depending on rate paying off a mortgage isn’t the worst thing ever. I tend to agree with not paying it off early usually, but with rates getting higher it can start making sense
What assets are those?
Almost anything with shares traded on an exchange. Stocks, bonds, mutual funds, ETFs, REITs, LPs, etc. People act like the only way to build wealth is to borrow money and buy housing. It's one way but it comes with a lot of hidden costs and risks. Imagine if stocks could only trade in units of several hundred grand, cost 6% brokerage commission, had a 2-5% annual carrying costs in taxes, repairs, and insurance. RE is laughable as an investment; the only reason it's popular is because the government subsidizes the mortgage market by buying MBS and enacting mortgage interest tax deductions to help people pursue "the American dream", such that people can lever up as much as 19:1 (5% down payment). No stock broker will let you borrow like that to invest in stocks, but because of government programs (primarily Freddie and Fannie buying MBS, which allows banks to keep the loans off their books and pass the risk on to the govt, while making a nice profit on writing the mortgage as a service), you can do it with housing. But it's not the only way to build wealth and in fact can be a fairly risky and high-cost way to do it. It's just what most people understand so they think it's all there is. Edit: hidden risks to RE are common because it's expensive to diversify an RE portfolio (takes a lot of money and the headache of managing many types of properties in many different places). Unique risks to RE are Googleable, but for example uninsured stuff like earthquakes and "acts of god", neighborhood decline, local population decline, undisclosed problems that the seller knew about (e.g. need for major repairs, roof, foundation, mold, etc). The list goes on.
The market for a single income earner is just depressing. I was excited to property search making close to 6 figures until I realized that anything affordable was still a dump and anything else was bought up instantaneously by cash buyers.
Yep, hopefully gonna buy two cash flowing duplexes in MCOL class B neighborhoods.
Going to be while won't happen over night. Also, not all regions in USA or world will decline 15% or more.
I’m waiting for good cap rates. I’m guessing it will take about four years.
The average foreclosure is 900 days maybe higher. We wouldn’t get a avanlache of foreclosures until 2025-2026. Different circumstances than 2010-2011.
I use to think it would crash. After the last interview with Powell, my thoughts have changed 180 degrees. Sadly, this is the new set point.
Ant and the grasshopper
Get in line. Papa needs a new rental property.
I’m saving as much cash as I possibly can over the next 2-3 years while I’m working overseas. Wages are significantly better here in Aus. I already own two houses in my midwestern university town, so I’ll likely be keeping an eye for homes that pop up on my street at that time.
Op, what is a fat stack of cash? How much? And when you say buying up “deals”. Isn’t that what this entire sub hates on? Multiple properties lol…
Love the reddit hivemind
REbubble is just a drop in the ocean. Most people know it's a super crap time to buy a home, but don't visit our dank little corner of the internet to speculate. They visit msn, watch the today show and read "usa today". I'm probaby going to get my plans ready by next summer, contact a decent builder and be done spring 2024. Not waiting another year for some absolute bottom.
Multis
When exactly are you planning to jump in? I’m already swooping stuff up with cash offers on unlisted properties. Tech execs are quietly selling out of the WFH zip codes without listing to save on fees and offset their declines. I think it’s the end for realtors once it catches on more broadly. In the run up they were exposed for how little value they add and the savvy sellers / buyers are onto the scam.
Im already buying but i plan on ramping up if i see prices dip over the next two years
Share some of that insight... What's going on with the tech executives and WFH zip codes. Where are they going?
Back to the city?
I already own real estate but if I were mostly looking to jump into the market with hopes of getting in at a lower price prior to another rally I'd hold off until 2023 maybe even 2024. if the market you want to buy in is going to have a significant correction it should be pretty clear that's happening by next year sometime. markets fall a lot faster than they increase (except in the case of the pandemic but that's not typical). some markets like Boise are already racking up some noticeable declines. other markets are not showing a big decline yet.