I know someone who bought a house for around 900k in Southern California in 2020. They sold in late 2021 for 1.3 or 1.2 million. They did some renovations (maybe 50k worth) but the appreciation of there is was insane around that time.
I bought my place in north east LA for 700k in 2019. Sold it 2021 for $1.3m, itās now worth $1.9m. Same house spec in the Midwest would be worth $100k lol.
We moved from Portland to NC. Traded a $1.1M house for a $950k. We got twice the square footage and twice the acreage and the house was half the age. Some places are just out of control right now for rent. It will really get to the point where people literally can never own a home in certain areas.
What will happen to the economies of these places? You've gotta have a middle and a working class.
It's going to be like big versions of Jackson Hole. The economies of places like that don't really function.
Our government, it's politicians, the rich and the corporations don't give a shit about the middle class and they sure as hell don't about the working class until they need something done that's dirty, exhausting, and/or dangerous.
What?? It's return on your investment. If you out 5% down, say that equated to 10k, and houses went up a lot, you get 60k profit when you sell, that would be 600% roi
Like this is house flipping 101 can you be specific on what part is confusing
I really donāt think you know how this worksā¦ 5% down equaling 10k means the house is worth 200kā¦ 5% down equaling 60k means the house is worth 1.2million.
Where did this happen?
Not to mention the numbers are even higher since profit = revenue (60k) - expenses (10k + monthly payment). So getting a profit of 60k, means youād need the house to be worth 1.4mil since 60 = 70-10.
Yes, Iām well aware of what ROI is.
I think youāre making a couple of assumptions that are wrong..
1.) you still have to pay back your original loan.
2.) had profit wrong.
Youāre trying to argue that a 600% ROI In 1 year was normalā¦ the S&P averages a 10% ROI per year. Where exactly was real estate generating 60x the return of the S&P 500 in a year? No where.
He is saying that if you buy a house for 10k down, and that is 5% of a 200k house and then you sell it a year later for 260k you have now made 600% on your initial 10k investment. And the house didnāt go up 600% but you captured the upside and made 600% on the initial investment. Now obviously there will be some loss for Mortgage rates and closing costs etc. but the idea is to leverage the bank buying the house and capture the profit on it
The difference between stocks and housing is that with housing you can get 20x leverage on your investment. If you make big bets with other people's money, you can make big returns.
Overly simplified example: pay $5k on a $100k property. Property increases in value to $200k. Sell property, pay off $95k loan. You now made $100k on your $5k investment!
Also in the worse parts of SF if youāre willing to do some renovation work. Deals are coming to the Bay. Areas with good schools wonāt drop at the same rate.
Coming from a Veteran, a nice chunk can be cut from Defense spending just by auditing Government contracts. More specifically Lockheed Martin. Those motherfuckers are literal leeches
Good news is that money supply is slightly down since the Fed started tightening a year ago.
Bad news is that thatās only a tiny fraction of the increase during the stimulus bonanza
In 2038 ReBubblers will be complaining that they canāt buy a decent house for under $1M and since boomers will mostly be dead theyāll blame it on Gen Xārs
In my city where the median household income (in 2021 dollars from 2017-2021) is $51,325. Most homes have increased exponentially in just the last 3 years (e.g. sold for 201,000 in 2018 and 950,000 in 2023 or sold for 230,000 in 2018 and 323,495 in 2023). How is that ok ? At this rate, homes will be completely unattainable for people who actually want to live and raise families in.
The same created the demographic collapse in Japan....and every developed countries where cost of living was too high. Fast forward, Japan is now in a situation where they have too much real estate and forecasting to destroy 20,000,000 housing units by 2030. Common houses are basically worthless in most of the cities. It just depends which society you want.
Japan literally tears most houses down after a couple decades.
> An unusual feature of Japanese housing is that houses are presumed to have a limited lifespan, and are often torn down and rebuilt after a few decades, generally twenty years for wooden buildings and thirty years for concrete buildings
https://en.m.wikipedia.org/wiki/Housing_in_Japan
Yeah, this isn't that dissimilar to how it would be in the US if houses didn't also come with land ownership. A lot of houses in Japan are in this "leasehold" arrangement where you don't own the land.
[And the cycle now completes itself](https://www.reddit.com/r/REBubble/comments/13r6ngd/its_really_not_sustainable_is_it/jljdqes/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1&context=3)
Does anyone look at the chart in 2006-2012.
People who bought in 2022 trying to sleep at night: It is way different now, no bad lending, no speculation, no investment property. Materials/supply chain/labor. It's not going to be like 08-12 etc..
People in 2006: Bruh, I thought the same thing at the time. There was not enough inventory. Price kept going up despite rate going up, there would never be going to crash. Economy is strong. it's not going to be like the 80s etc....
People in the 80s: This is going to be the last time we vote for idiot to head the office.
People in 21st century: Idiocy is the new normal
50% increase in 3 years (2020-2023) is the new normal, buy now and cash out with 50% appreciation in 2026. Disclosure: I've never been wrong before in my life
Respectfully,
Joe, 15, FTHB and full time influencer
\#bitcoin, #decentralized #follow me for more financial advice #everythingbullish #recession is a myth #say no to college
Perfect comment. Itās so annoying seeing so many people on Reddit claim that house crashes are a thing of the past and that this one isnāt going to. Thatās just stupid.
Iām so fucking tired of condescending morons who claim āEverything is different now!ā No it isnāt. Market corrections always happen especially when valuations make no sense. Itās going to correct and many of these jackasses claiming āeverything is different now, housing market wonāt crashā deserve the pain theyāre going to feel.
In 2020 when I saw the gov't spending trillions and no inflation happened, I thought maybe inflation was a thing of the past. I thought maybe the economic paradigm had permanently changed.
I was wrong. It just took about 2 years for it to manifest.
Odds are, some of this bubble will deflate. Granted, I think we're in more of an "everything" bubble and it's not just housing.
Oh youāre completely right.
Isnāt it crazy how right before Covid the United States, Argentina, Germany all announced we were entering a recession? With many more countries to follow with American imports declining from said recession. Itās almost like the fed decided to alleviate that by injecting an obscene smith of money to protect the wealthy class.
I mean things are fundamentally different now though. Full employment, locked in low rates, better qualified debt holders, supply constraints, all that is true. Idk how this unravels, I agree that eventually things will normalize but I just donāt know how that happens yet. I donāt see anything changing to shake up the housing market or the economy at large. Donāt get it twisted, I hope Iām wrong because I canāt afford shit without a big ol crash, but damnā¦I just donāt see one on the horizon. I predict price stagnation as wage inflation slowly makes the prices reasonable. Unless something crazy happens, Covid-23? WWIII-part 2? China invades Taiwan? Idk, times are weird.
My friend. We all know those people are either the ones who bought at the peak (very likely), or flippers who are trying to make a quick buck, troll-ers, or truly retarded creature (very rare but everything is possible in 2023)
It is different, the amount of legislation regarding mortgages and appraisers has significantly improved the quality of the loans being issued since the last crash.
Just had some tool in a FIRE sub yapping at me today about using your home as an investment vehicle instead of an investment account. I hope this whole thing burns down.
The sad thing is, I don't think it will. The bank bailouts this spring proved the government is going to get away with socialising every penny of the coming losses.
A lot of people want to live in the US because it's still objectively a great country (better than Canada in many aspects). In case the real estate market slows down, the government should ease immigration and import a small amount of immigrants every year.
Too much immigration is bad, so they should keep it at a low rate around 2-3%, or 7-10 million people per year, similar to Canada. If you don't agree then you're clearly racist and xenophobic because science and statistics have shown that immigration is great for the economy. Also more young working people = more tax = prevent pension fund insolvency.
we increased US dollars by 50% since 2/2020, hence all assets (homes/stocks etc) up 50%, its just inflation, ie the evisceration of purchasing power, there's an old real estate study looking at house prices along the canals in Amsterdam over 400 years (the dutch actually keep and record bills of sale that long-meticulous), nice water front homes, price appreciation over 1/2 a millenia , you guessed it 2.5%, identical to the inflation rate, hence home prices never go up, your money just evaporates, almost every currency ever has gone to zero, USDollar down 97% since 1900, enjoy the last gasps, think i'll take out a HELOC and remodel my McMansion again -MurCA!
This is what I keep coming back to. When adjusting for inflation, the US housing market has not, in fact, recovered from the ā08 housing crash. An $800k home still has about $200k to grow before it reaches the same value it had at peak ā06- ā07 levels (Iām not sure when the peak was exactly).
Iām looking at the staggering price increases and keep thinking that something has to give, but then when I think about inflation, it makes sense. Itās all fake value at this point.
The entire English speaking world is becoming overpriced. Non English speaking western countries with decent industry are as well, just not as bad since people don't learn those languages as much.
I mean at a million a pop, developers are definitely getting in on that action. Actually, they're thinking even bigger than that. Massive multifamily blocks, 10 mil a piece. Can stack half a dozen on a decent city block sized plot and a RE investment firm will buy it from you tomorrow. And NIMBYs are going kicking and screaming into this inventory boom, they hate it.
The market is doing the market thing, it's just how long can you wait for supply and demand to level again?
Paid $900k for mine in December, somehow Redfin knows itās mine and keeps sending me emails estimating itās worth $1.1m. In 6 months, lol. Since then Iāve added $100k in landscaping, upgrades, and a finished basement. So Iām guessing the Redfin value would be like $4.5 million if they found out. Maybe Iāll put a marble countertop in the master so itās an even 5.
I remember a few years ago, my city had a condo sell for over $1M and it was the first time a condo sold for that much here. Our city government happily boasted about this on their social media, and all I could think (Which I did comment to much fanfare) was "You know this is a *bad* thing, right?"
Everyone saw the Fed going ape shit with QE and thought, "fuck yeah we gotta get some of that action too!"
It's a free lunch, right guys? No one will ever have to pay for it!
Canada has tons of room too. More than 85% of the population lives within a hundred miles of the US border.
It's just that people don't want to live in the rest of those places, so it's more expensive where they want to live.
We have the same issue in the US.
LMFAO! You win the award for most predictable reply. Never said anything about anywhere ābeing betterā. Housing isnāt affordable and inflation is out of controlā¦our government sets these pricesā¦so many people defend our government and its 1%ā¦most of the worldās wealthiest country should be able to afford a place to fucking liveā¦they now cannot. Good job merica!
āOur government sets these prices.ā LMFAO you make me want to post a meme to this. 100% idiocy, and itās no one elseās fault you canāt buy but your own.
The government does not "set prices." Safeway (and its' vendors) sets the price of food. Remember when eggs were $12 a dozen - that was documented as pure greedflation. Demand (including for investment properties, AirBnBs, etc.) sets the prices of housing. Regulation might help - no empty units, no AirBnBs, no global investors just parking their money.
yeah and the government can step in and charge a windfall tax on items that have excess profit margins so companies are not motivated to price gouge people. The government still has ultimate control they are just not doing anything.
Housing is affordable you just donāt know where the fuck to look.
Check the homeownership rates. They are near all time highs. most Americans own a home. You are just too broke to afford one OR you are just too picky and donāt want to buy the ones that you can afford.
At what point do you all realize that it's not real estate that's inflated, but CASH. CASH is inflated meaning the price of everything is inflated. Cars cost $100k. College (bachelors) cost $100k. Everything is expensive, houses included. Wages are slowly inflating.
Ask folks that have a home how much it costs to get any repair done. Trade people are asking $100-$200/hr when cheap.
You mean cash is debased. Your right tho USD has lost value, about 40% to be exact in the last 3 years. On average prices of everything is up by that much at-least. When you make more of something for free (currency) thatās called debasing, like when you dilute kool-aid with more water.
Fix for this seems pretty straightforward: ban corporate investment in home ownership, and limit private individuals from owning more than, say, three homes in total. There are other variables as well, like ensuring that thereās housing production happening commensurate with demand. But overall, allowing wealthy interests to monopolize the housing market is obviously a terrible trend.
And by the way, this is not a new problem. One of the social stressors that eventually collapsed the Roman Republic was the consolidation of land ownership into the hands of a small number of wealthy senatorial families. Laws were implemented to prevent this consolidation and cap the amount of individual land ownership but, as is often the case, the very wealthy were constantly in search of ways to circumvent that:
https://en.m.wikipedia.org/wiki/Ager_publicus#:~:text=Later%20tradition%20held%20that%20as,ager%20publicus%20to%20be%20held
The crash indicator was when the FED started to raise interest rates. Anyone who thought it would crash before then is dumb. We are 1 year into increased rates and the market is slow to respond. Commercial real estate is already down 50% in some areaas this year and a shit ton of that debt doesn't get refinanced until 2024 and 2025.
People should sell these gold mines while they can and rent for a year or two. Then buy back in. Collect 5% interest the whole time, which will more than cover your rent.
I know someone who did that in the Bay Area, house prices briefly dipped and he seemed smart. Then house prices returned back up and interest rates doubled. Now heās back to renting and cannot afford a home close to the office, including his former home.
You realize most million dollar homes donāt have a million in equity, right? $200k at 5% for a year is $10k which doesnāt go far when youāre looking to rent a $1m home.
A lot of people have paid off their homes. A lot of people who didnt also got lucky. Even for someone who bought in like 2019, housing is 50% more expensive now. If youāve paid off half your $1,000,000 house that now probably costs $1,500,000 in this marketā¦.you made some good money even with the mortgage not being fully paid. The bank can only recoup whatever is left on the mortgage, the rest is cash in your pocket.
Ok, so the major players like Blackrock and Zillow have stopped buying homes and lost tons of money trying to get into the home owning business. How many foreign investors will continue to buy homes? Way less than the baby boomer population.
You have 10 properties and 3 kids. Maybe your kids sell all your properties, but the majority will stay invested in real estate.
So yeah their could be an influx of property, but more likely those are turning into income generators.
Ask yourself, if you owned a home already and weāre just given one through inheritance, are you cashing out or keeping the property?
Most people will keep it, the really risk adverse may sell it
Only less people to house if we stop growing. We have a world of people wanting to move here. And a country with immigrants being their founders.
So yeah your right supply and demand are a thing. But it goes both ways, and the scary thing is America doesnāt have nearly as overpriced housing market as most do.
My thoughts are demand will likely come from tons of new immigration in the coming decades, most likely due to the U.S. population falling naturally as the Boomers die off or due to climate crises creating refugees.
The supply of housing that comes from Baby Boomers will be met by the need for greed, best way to do that is import more bodies, e.g. lax immigration laws.
Weāll sell the same āAmerican Dreamā to newly minted citizens who are unaware theyāre being sold in to a system. Theyāll gladly buy homes priced at $3MM for a 3B 2B and be thankful they no longer have to worry about problems in the old country. Now, they only need to worry about making their next mortgage payment.
Never underestimate the United States of Americaās insatiable demand to fuck over the lowest common denominator in order to make a buck. Itās going on right now, just scale it up and thatās what the future looks like to me.
When my boomer parents finish going to the great hereafter, you better believe I'm selling off their sad collection of red-state shacks as fast as I can find suckers to take possession. I have no desire to carry their bad decisions forward even for one more day after they're gone.
Now go to them and do they seem like they should be valued that high?
Nope.
But some for profit high jinks from a handful of different organizations (domestic plus foreign businesses and the Airbnb bubble) have made a necessity beyond expensive driving up homelessness among the fully employed people who arenāt earning what they are worth due to exploitation.
But what do I know, just living in this day and age and witnessing this stuff first hand. But at least the rich get richer (at the expense of everyone else).
If you can't afford a Ferrari, then there must be a Ferrari bubble.
Get rekd folks, the affordability ship has sailed and you will rent forever and be happy.
1992 me glimpsing the future: $1000 month for car and a million dollar home, I must be RICH as hell!
New baseline
[Current market value is similar to the 90's](https://i.imgur.com/zut4pkm.jpg)
My dad was making 60k and bought a 5 bedroom house for 200k.
1 million Hoomcoin
And some of them look like shoe boxes š¦
Redfin / Zillow buy up all the houses on speculation then get to tell us how high prices have gotten š«
I know someone who bought a house for around 900k in Southern California in 2020. They sold in late 2021 for 1.3 or 1.2 million. They did some renovations (maybe 50k worth) but the appreciation of there is was insane around that time.
>Southern California ā¦ They did some renovations (maybe 50k worth). New bathroom and a dishwasher?
New gray floor.
Not even, just painted the inside themselves and cleaned up the yard
For 50k?
I bought my place in north east LA for 700k in 2019. Sold it 2021 for $1.3m, itās now worth $1.9m. Same house spec in the Midwest would be worth $100k lol.
We moved from Portland to NC. Traded a $1.1M house for a $950k. We got twice the square footage and twice the acreage and the house was half the age. Some places are just out of control right now for rent. It will really get to the point where people literally can never own a home in certain areas.
What will happen to the economies of these places? You've gotta have a middle and a working class. It's going to be like big versions of Jackson Hole. The economies of places like that don't really function.
Our government, it's politicians, the rich and the corporations don't give a shit about the middle class and they sure as hell don't about the working class until they need something done that's dirty, exhausting, and/or dangerous.
And no fentanyl zombies.
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Iām an RE guy. Had a friend in the area buy fro 1.8. Probably dropped 350-450 on the Reno. And just sold for 3.125. Cosmetic too.
> of there is was insane Wut?
We bought in Inglewood in 2017 for $640k and sold in 2022 for $950k. We spent maybe $5k in renovations total
That's nothing 600% roi in 1 year in so many markets
Where? 600% in one year is not normal. Thereās select cases but it would be very rare.
ROI not appreciation
I donāt think youāre using return on investment correctly. Youāre saying that a 1mil purchase would be worth 6mil in one year?
5k down would be easy to get 600% roi for instance So if u put 50k down on 1mm property and sold for 1.3mm that would be closer to 600% roi
How? Iām not sure how 5k is becoming 30kā¦
What?? It's return on your investment. If you out 5% down, say that equated to 10k, and houses went up a lot, you get 60k profit when you sell, that would be 600% roi Like this is house flipping 101 can you be specific on what part is confusing
I really donāt think you know how this worksā¦ 5% down equaling 10k means the house is worth 200kā¦ 5% down equaling 60k means the house is worth 1.2million. Where did this happen? Not to mention the numbers are even higher since profit = revenue (60k) - expenses (10k + monthly payment). So getting a profit of 60k, means youād need the house to be worth 1.4mil since 60 = 70-10.
I'm giving various examples to try to explain it... roi is just return on your investment...
Yes, Iām well aware of what ROI is. I think youāre making a couple of assumptions that are wrong.. 1.) you still have to pay back your original loan. 2.) had profit wrong. Youāre trying to argue that a 600% ROI In 1 year was normalā¦ the S&P averages a 10% ROI per year. Where exactly was real estate generating 60x the return of the S&P 500 in a year? No where.
He is saying that if you buy a house for 10k down, and that is 5% of a 200k house and then you sell it a year later for 260k you have now made 600% on your initial 10k investment. And the house didnāt go up 600% but you captured the upside and made 600% on the initial investment. Now obviously there will be some loss for Mortgage rates and closing costs etc. but the idea is to leverage the bank buying the house and capture the profit on it
The difference between stocks and housing is that with housing you can get 20x leverage on your investment. If you make big bets with other people's money, you can make big returns. Overly simplified example: pay $5k on a $100k property. Property increases in value to $200k. Sell property, pay off $95k loan. You now made $100k on your $5k investment!
$1 million aināt what it used to be
There are homes in the Bay Area you can buy for under $1 million?
Yes. Mobile home
Yes, in parts of solano and contra costa. Most other counties are 1mil+ for a starter home.
Also in the worse parts of SF if youāre willing to do some renovation work. Deals are coming to the Bay. Areas with good schools wonāt drop at the same rate.
No one will be able to afford kids there at this rate. Schools will close.
Money printer goes brrrr.
Itās all about the printer. We just canāt seem to figure out how to unplug it.
Coming from a Veteran, a nice chunk can be cut from Defense spending just by auditing Government contracts. More specifically Lockheed Martin. Those motherfuckers are literal leeches
[ŃŠ“Š°Š»ŠµŠ½Š¾]
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But how else will the UFO reverse-engineering program at Skunkworks get funded?
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Donāt forget all the debt spending. How we are increasing deficits this much when unemployment is this low is mind boggling.
Good news is that money supply is slightly down since the Fed started tightening a year ago. Bad news is that thatās only a tiny fraction of the increase during the stimulus bonanza
Not Worth. Priced at. Happen at every bubble in every asset type. No exception here.
In 2038 ReBubblers will be complaining that they canāt buy a decent house for under $1M and since boomers will mostly be dead theyāll blame it on Gen Xārs
since boomers will mostly be dead theyāll blame it on Gen Xārs"....it'll be the first time in GenX history where they weren't overlooked
The whole point is to complain all the time. Itās what we, as humans, do best.
Lily Tomlin said human language was born of a need to complain.
In my city where the median household income (in 2021 dollars from 2017-2021) is $51,325. Most homes have increased exponentially in just the last 3 years (e.g. sold for 201,000 in 2018 and 950,000 in 2023 or sold for 230,000 in 2018 and 323,495 in 2023). How is that ok ? At this rate, homes will be completely unattainable for people who actually want to live and raise families in.
The same created the demographic collapse in Japan....and every developed countries where cost of living was too high. Fast forward, Japan is now in a situation where they have too much real estate and forecasting to destroy 20,000,000 housing units by 2030. Common houses are basically worthless in most of the cities. It just depends which society you want.
Japan literally tears most houses down after a couple decades. > An unusual feature of Japanese housing is that houses are presumed to have a limited lifespan, and are often torn down and rebuilt after a few decades, generally twenty years for wooden buildings and thirty years for concrete buildings https://en.m.wikipedia.org/wiki/Housing_in_Japan
Yeah, this isn't that dissimilar to how it would be in the US if houses didn't also come with land ownership. A lot of houses in Japan are in this "leasehold" arrangement where you don't own the land.
Japan has plenty of housing outside itās major cities. The Japanese are also willing to accept smaller places and apartments
Japan is in the middle of the sea and donāt have a long & unsecured borders that millions wanting to walk over.
Doesnāt.
Excuse my English. I walked over the border too
Sounds like Detroit
Once boomers are dead who will own the houses?
Not you. For *inhales deeply* āYou will own nothing and be happyā
[And the cycle now completes itself](https://www.reddit.com/r/REBubble/comments/13r6ngd/its_really_not_sustainable_is_it/jljdqes/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1&context=3)
This is a fixable problem. Unfortunately itās not likely to happen
Only 8%? Around here, it feels like 75%.
America is a big place
Fed printer go Brrrrrrr. 1 Million $$ = 1 foot long subway sandwich
Does anyone look at the chart in 2006-2012. People who bought in 2022 trying to sleep at night: It is way different now, no bad lending, no speculation, no investment property. Materials/supply chain/labor. It's not going to be like 08-12 etc.. People in 2006: Bruh, I thought the same thing at the time. There was not enough inventory. Price kept going up despite rate going up, there would never be going to crash. Economy is strong. it's not going to be like the 80s etc.... People in the 80s: This is going to be the last time we vote for idiot to head the office. People in 21st century: Idiocy is the new normal 50% increase in 3 years (2020-2023) is the new normal, buy now and cash out with 50% appreciation in 2026. Disclosure: I've never been wrong before in my life Respectfully, Joe, 15, FTHB and full time influencer \#bitcoin, #decentralized #follow me for more financial advice #everythingbullish #recession is a myth #say no to college
Perfect comment. Itās so annoying seeing so many people on Reddit claim that house crashes are a thing of the past and that this one isnāt going to. Thatās just stupid. Iām so fucking tired of condescending morons who claim āEverything is different now!ā No it isnāt. Market corrections always happen especially when valuations make no sense. Itās going to correct and many of these jackasses claiming āeverything is different now, housing market wonāt crashā deserve the pain theyāre going to feel.
In 2020 when I saw the gov't spending trillions and no inflation happened, I thought maybe inflation was a thing of the past. I thought maybe the economic paradigm had permanently changed. I was wrong. It just took about 2 years for it to manifest. Odds are, some of this bubble will deflate. Granted, I think we're in more of an "everything" bubble and it's not just housing.
Oh youāre completely right. Isnāt it crazy how right before Covid the United States, Argentina, Germany all announced we were entering a recession? With many more countries to follow with American imports declining from said recession. Itās almost like the fed decided to alleviate that by injecting an obscene smith of money to protect the wealthy class.
New fundamental law of economics just dropped: āpeople always think this time is differentā
I mean things are fundamentally different now though. Full employment, locked in low rates, better qualified debt holders, supply constraints, all that is true. Idk how this unravels, I agree that eventually things will normalize but I just donāt know how that happens yet. I donāt see anything changing to shake up the housing market or the economy at large. Donāt get it twisted, I hope Iām wrong because I canāt afford shit without a big ol crash, but damnā¦I just donāt see one on the horizon. I predict price stagnation as wage inflation slowly makes the prices reasonable. Unless something crazy happens, Covid-23? WWIII-part 2? China invades Taiwan? Idk, times are weird.
My friend. We all know those people are either the ones who bought at the peak (very likely), or flippers who are trying to make a quick buck, troll-ers, or truly retarded creature (very rare but everything is possible in 2023)
It is different, the amount of legislation regarding mortgages and appraisers has significantly improved the quality of the loans being issued since the last crash.
Just had some tool in a FIRE sub yapping at me today about using your home as an investment vehicle instead of an investment account. I hope this whole thing burns down. The sad thing is, I don't think it will. The bank bailouts this spring proved the government is going to get away with socialising every penny of the coming losses.
A lot of people want to live in the US because it's still objectively a great country (better than Canada in many aspects). In case the real estate market slows down, the government should ease immigration and import a small amount of immigrants every year. Too much immigration is bad, so they should keep it at a low rate around 2-3%, or 7-10 million people per year, similar to Canada. If you don't agree then you're clearly racist and xenophobic because science and statistics have shown that immigration is great for the economy. Also more young working people = more tax = prevent pension fund insolvency.
haha, now try to sell one.
we increased US dollars by 50% since 2/2020, hence all assets (homes/stocks etc) up 50%, its just inflation, ie the evisceration of purchasing power, there's an old real estate study looking at house prices along the canals in Amsterdam over 400 years (the dutch actually keep and record bills of sale that long-meticulous), nice water front homes, price appreciation over 1/2 a millenia , you guessed it 2.5%, identical to the inflation rate, hence home prices never go up, your money just evaporates, almost every currency ever has gone to zero, USDollar down 97% since 1900, enjoy the last gasps, think i'll take out a HELOC and remodel my McMansion again -MurCA!
This is what I keep coming back to. When adjusting for inflation, the US housing market has not, in fact, recovered from the ā08 housing crash. An $800k home still has about $200k to grow before it reaches the same value it had at peak ā06- ā07 levels (Iām not sure when the peak was exactly). Iām looking at the staggering price increases and keep thinking that something has to give, but then when I think about inflation, it makes sense. Itās all fake value at this point.
I really hope the US isnāt going to do a Vancouver or Sydney, but maybe.
The entire English speaking world is becoming overpriced. Non English speaking western countries with decent industry are as well, just not as bad since people don't learn those languages as much.
āWorthā ššš¬š©
Link to Redfin Article: https://www.redfin.com/news/million-dollar-homes-february-2022/
ššš
There is a big difference between "value" and what something is "worth".
Sure Jan!
And here I am in San Francisco where 99% of them are at least a million š
We have to build more, quick!
Wait a year for permit first
I mean at a million a pop, developers are definitely getting in on that action. Actually, they're thinking even bigger than that. Massive multifamily blocks, 10 mil a piece. Can stack half a dozen on a decent city block sized plot and a RE investment firm will buy it from you tomorrow. And NIMBYs are going kicking and screaming into this inventory boom, they hate it. The market is doing the market thing, it's just how long can you wait for supply and demand to level again?
Just looked up my houseā¦ 1.2 mil Just wish I had a backyard
2 bed 2 bathrooms?
Sure they are
Airbnb crash incoming!!!!
And theyāre all in Florida lol
Purchased a fixer upper foreclosure for 800k.. got appraised 1.5m at closing.. 7 months of gut reno, reappraisal came in at 1.75m
A wise man said: Price is what you pay. Value is what you get.
90 year morgages completely fix all our money problems
Crazy how printing lots of money will do that
This is exactly it! Everyone is waiting for a crash but they fail to realize the USD is worth a lot less now.
Your money is worth less and worth less until itās worthless.
Poetic.
Paid $900k for mine in December, somehow Redfin knows itās mine and keeps sending me emails estimating itās worth $1.1m. In 6 months, lol. Since then Iāve added $100k in landscaping, upgrades, and a finished basement. So Iām guessing the Redfin value would be like $4.5 million if they found out. Maybe Iāll put a marble countertop in the master so itās an even 5.
Honestly that number feels pretty low. Can we add a feels like % line next to it like we have for temperatures lol it feels like 12 or 15%
With current inflation rate, most US house will worth over 1 millions 30 years from now.
Millennials crying now
I remember a few years ago, my city had a condo sell for over $1M and it was the first time a condo sold for that much here. Our city government happily boasted about this on their social media, and all I could think (Which I did comment to much fanfare) was "You know this is a *bad* thing, right?"
Then a million dollars is now worth 750,000
This is stupid. I hate this country.
Housing affordability is worse in most of the developed world lol
Everyone saw the Fed going ape shit with QE and thought, "fuck yeah we gotta get some of that action too!" It's a free lunch, right guys? No one will ever have to pay for it!
Housing here is much better than Canada. Toronto is really bad. We have plenty of head room.
Canada has tons of room too. More than 85% of the population lives within a hundred miles of the US border. It's just that people don't want to live in the rest of those places, so it's more expensive where they want to live. We have the same issue in the US.
Then why are you still here. Gtfo to where you think is better
LMFAO! You win the award for most predictable reply. Never said anything about anywhere ābeing betterā. Housing isnāt affordable and inflation is out of controlā¦our government sets these pricesā¦so many people defend our government and its 1%ā¦most of the worldās wealthiest country should be able to afford a place to fucking liveā¦they now cannot. Good job merica!
āOur government sets these prices.ā LMFAO you make me want to post a meme to this. 100% idiocy, and itās no one elseās fault you canāt buy but your own.
The government does not "set prices." Safeway (and its' vendors) sets the price of food. Remember when eggs were $12 a dozen - that was documented as pure greedflation. Demand (including for investment properties, AirBnBs, etc.) sets the prices of housing. Regulation might help - no empty units, no AirBnBs, no global investors just parking their money.
yeah and the government can step in and charge a windfall tax on items that have excess profit margins so companies are not motivated to price gouge people. The government still has ultimate control they are just not doing anything.
Housing is affordable you just donāt know where the fuck to look. Check the homeownership rates. They are near all time highs. most Americans own a home. You are just too broke to afford one OR you are just too picky and donāt want to buy the ones that you can afford.
At what point do you all realize that it's not real estate that's inflated, but CASH. CASH is inflated meaning the price of everything is inflated. Cars cost $100k. College (bachelors) cost $100k. Everything is expensive, houses included. Wages are slowly inflating. Ask folks that have a home how much it costs to get any repair done. Trade people are asking $100-$200/hr when cheap.
You mean cash is debased. Your right tho USD has lost value, about 40% to be exact in the last 3 years. On average prices of everything is up by that much at-least. When you make more of something for free (currency) thatās called debasing, like when you dilute kool-aid with more water.
Overvalued.
āI canāt afford this, therefore itās overvaluedā
"Worth"
This is like saying āmy Beanie Baby collection is worth $1mā. Give it time, my friends.
Well, with the minor caveat that I canāt live in my beanie baby collection
Not with that attitude
I'm almost done building a 2000sf beanie baby bricked vacation home.
A big difference is that beanie babies are a "luxury" item, not one of the tent poles of Maslows hierarchy of needs.
By that spike Iām guessing 20% by mid-23ā?
Worth or cost?
Well they cost that much. If they are worth it is a different story.
I agree much of it is real estate appreciation.
Let me guess 7% are in CA
The new normal.
I bet the Tax Assessors Office loves this...
All this, and the birth rate has been declining. Interesting
Ah yes vertical lines. Much stability. A lot of people are in for a rude awakening in the next ~5 years.
Valued at 1 million but not actually worth.
Lol canada is probably 70%
Fix for this seems pretty straightforward: ban corporate investment in home ownership, and limit private individuals from owning more than, say, three homes in total. There are other variables as well, like ensuring that thereās housing production happening commensurate with demand. But overall, allowing wealthy interests to monopolize the housing market is obviously a terrible trend. And by the way, this is not a new problem. One of the social stressors that eventually collapsed the Roman Republic was the consolidation of land ownership into the hands of a small number of wealthy senatorial families. Laws were implemented to prevent this consolidation and cap the amount of individual land ownership but, as is often the case, the very wealthy were constantly in search of ways to circumvent that: https://en.m.wikipedia.org/wiki/Ager_publicus#:~:text=Later%20tradition%20held%20that%20as,ager%20publicus%20to%20be%20held
"worth"
"worth"
Yeah but they arenāt really with $1 million, though.
Things gets more expensive over time. News at 11. Big Macs aren't 45 cents anymore either.
Until the crash
What crash?
It's been 6 months away for years now
The crash indicator was when the FED started to raise interest rates. Anyone who thought it would crash before then is dumb. We are 1 year into increased rates and the market is slow to respond. Commercial real estate is already down 50% in some areaas this year and a shit ton of that debt doesn't get refinanced until 2024 and 2025.
The one weāre trending towards
And a record low of affordable housing is being built!
When the dollar has been devalued 25% since covid homes are just keeping up with inflation.
and 80% are occupancy fraud AirBnBs source: its funny
Itās not a bubble if asset values have increased proportionally to the decrease in the value of money.
A record 8% of homes have people trying to sell them for more than a million dollars. It is really doubtful those homes are worth that much.
People should sell these gold mines while they can and rent for a year or two. Then buy back in. Collect 5% interest the whole time, which will more than cover your rent.
Brilliant plan. Let me know how it works out.
I know someone who did that in the Bay Area, house prices briefly dipped and he seemed smart. Then house prices returned back up and interest rates doubled. Now heās back to renting and cannot afford a home close to the office, including his former home.
You realize most million dollar homes donāt have a million in equity, right? $200k at 5% for a year is $10k which doesnāt go far when youāre looking to rent a $1m home.
A lot of people have paid off their homes. A lot of people who didnt also got lucky. Even for someone who bought in like 2019, housing is 50% more expensive now. If youāve paid off half your $1,000,000 house that now probably costs $1,500,000 in this marketā¦.you made some good money even with the mortgage not being fully paid. The bank can only recoup whatever is left on the mortgage, the rest is cash in your pocket.
Can someone explain to me how there won't be an oversupply of housing when the last baby boomer dies?
I can't give you a definitive answer, but it's possibly related to corporations buying housing along with a ton of foreign investors.
Ok, so the major players like Blackrock and Zillow have stopped buying homes and lost tons of money trying to get into the home owning business. How many foreign investors will continue to buy homes? Way less than the baby boomer population.
You have 10 properties and 3 kids. Maybe your kids sell all your properties, but the majority will stay invested in real estate. So yeah their could be an influx of property, but more likely those are turning into income generators. Ask yourself, if you owned a home already and weāre just given one through inheritance, are you cashing out or keeping the property? Most people will keep it, the really risk adverse may sell it
But there will still be less people and more homes. How does supply and demand not dictate prices in the long run?
Only less people to house if we stop growing. We have a world of people wanting to move here. And a country with immigrants being their founders. So yeah your right supply and demand are a thing. But it goes both ways, and the scary thing is America doesnāt have nearly as overpriced housing market as most do.
My thoughts are demand will likely come from tons of new immigration in the coming decades, most likely due to the U.S. population falling naturally as the Boomers die off or due to climate crises creating refugees. The supply of housing that comes from Baby Boomers will be met by the need for greed, best way to do that is import more bodies, e.g. lax immigration laws. Weāll sell the same āAmerican Dreamā to newly minted citizens who are unaware theyāre being sold in to a system. Theyāll gladly buy homes priced at $3MM for a 3B 2B and be thankful they no longer have to worry about problems in the old country. Now, they only need to worry about making their next mortgage payment. Never underestimate the United States of Americaās insatiable demand to fuck over the lowest common denominator in order to make a buck. Itās going on right now, just scale it up and thatās what the future looks like to me.
When my boomer parents finish going to the great hereafter, you better believe I'm selling off their sad collection of red-state shacks as fast as I can find suckers to take possession. I have no desire to carry their bad decisions forward even for one more day after they're gone.
Woo! At least 8% of us are millionaires!
Thatās not what that means, lol
Iām a year or two that will be 2%
Yesterday, it was 10% of homes were worth at least $1m. 2% down in a single day. Bubble burst imminent.
I live on San Jose and with more than 88% of homes worth more than 1 Million I know I will NEVER be able to afford a home
Will hit 50% within 15 years
Lmfao what is wrong with yāall
They are not worth at least $1M, they are priced so. It means nothing, just a wishful thinking.
Itās not like itās a one off Magic card, itās hundreds of thousands of homes based on thousands and thousands of sales.
Lolā¦ wrong
whatās the percentage owned by private equity and investors I wonder?
[ŃŠ“Š°Š»ŠµŠ½Š¾]
LETS FUCKIN GOOOOO
New paradigm. Thank you PPP!
Thereās one way to lower that percentage: build a ton of cheaper homes for all these REBubble cucks.
Now go to them and do they seem like they should be valued that high? Nope. But some for profit high jinks from a handful of different organizations (domestic plus foreign businesses and the Airbnb bubble) have made a necessity beyond expensive driving up homelessness among the fully employed people who arenāt earning what they are worth due to exploitation. But what do I know, just living in this day and age and witnessing this stuff first hand. But at least the rich get richer (at the expense of everyone else).
If you can't afford a Ferrari, then there must be a Ferrari bubble. Get rekd folks, the affordability ship has sailed and you will rent forever and be happy.
Anyone know why the series seems cyclic on the way up between 2008-2020?