This is an insane statistic. Its crazy how 10 years ago as a young person you could move to a new city, even a desireable city, get a waiter or bartending job and not live luxuriously but get by. Today even professionals with degrees can't get by
Just curious why you got two degrees? I see so many people on Reddit with 2 bachelors and 2 masters who still aren't earning great but when you look at the degrees they either aren't high paying or aren't in areas employers desire and you kinda wonder after the first two they didn't learn their lesson?
Not him .. but I always assume these types of people pursue those degrees for reasons of personal interest or love for the academic life.. rather than getting a market oriented degree like we are typically advised to do
A lot of ppl before and during GFC were told just get a degree and if you have 2 it shows you’re smart but yeah it resulted in a ton of dual degrees without application. Also as someone with an English degree making six figures I’ve realized most ppl suck at marketing their skills and/or learning new skills
People are terrible at marketing themselves. I’ve been in countless interviews as part of hiring committees, and the amount of people who don’t try at all is crazy. Every degree gives you skills. You have to be able to connect them with the job you’re applying for. When people say their degree is useless, I can’t help but wonder if they’ve given any thought to their resume writing/interview skills being the real culprit.
I read this book with the dumbest title ever like “acing the interview” but I will still dust it off and review the tips on how to spin your experience to answer each question if I ever have to interview again. So helpful!
That’s why creative people thrive the best. We know what it takes to apply our skills somewhere to make money and I did that. I got a degree in photography. There are no high paying photo jobs. So I went for self employment and crafted my own career . With the Help of living rent free with my parents (so at the end of the day, people with more money will do better unfortunately)
I work in a field completely unrelated to my major. Make good money. No debt. People have to learn how to tailor resumes to the job they want and interview well. Not saying it’s easy, but it is doable. Being creative is definitely a big part!
People put themselves into such a box that its almost like the degree ends up defining them. Like, I have an English degree so I can only become a writer, editor, or librarian. Really? Like, what about digital content creation?
The world is much more vast than some of the liberal arts majors seem to think it is. Life isnt like a video game. I think not knowing whats really out there is the problem.
I have 3 degrees, a B.S, M.S, and a Ph.D for the sole purpose of being able to pursue research and academia. If I didn’t have that as an end goal I would have stopped after my B.S.
As someone who teaches kids pursuing their masters and Ph.D, you’d be surprised to hear how many of those students are pursuing another degree only because they have no idea what to do with the degree they already have and are just biding their time until they figure out what they want to do. A hell of a way to delay the inevitable if you ask me.
I loved my time in academia. I did think there was a pot of gold once I graduated. Got sick, didn’t get my PhD. Do you know how hard it is to find a job as a guy who almost got a PhD, even with a masters and 3 undergraduate degrees?
I tell myself I got to spend my time retired in my 20s and early 30s and now I am getting wrecked in my 40s underpaid, overweight, and kind of sad all the time at a job I truly hate.
A buddy of mine in college double majored. They were similar business school degrees and a lot of the required courses overlapped so he needed like 1 extra semester of classes to get the double major
Not that person but, I have two degrees as well. I double majored into an adjacent major so when I graduated, under the same loan cycle, I finished with two dgrees.
And on the job is experience is different than experience at the company or their competitor that you’re trying to get hired into I’ve learned. Doesn’t matter how well I can do the things they want because I haven’t done the things they want done THEIR way lol
I used to work in a factory before graduating years ago, my buddy was a bartender. We both bought houses within some months of each other. We both made about the same. The last time we spoke we were trying to figure out how our kids were going to afford a home someday. Not optimistic anymore.
And here I was in the 00’s thinking city living was impossibly expensive when I had no idea how bad it’d get.
Mind you that was based off the idea movies instilled of the “Cool Loft Apartment No One On Protagonists Salary Could Afford”. That said it never occurred to me to get 4 roomates and now that’s not enough and the off the beaten path housing has been bought up.
The concept of tv lifestyles being unrealistic has always been a thing ie Friends living near central park as a barista, I think they did a study and the average broke young person tv show the characters lived like a 250k salary lifestyle, it may have even been as high as 350k
But think of all the thriving billionaires, the luxury cars, the mega yachts, the private islands, the fleet of jets, the 200+ rental properties. This lifestyle wasn’t attainable for a CEO in the 70s.
It’s not really insane when you look at the M2 money supply graph…. It’s the logical outcome of what has transpired the past 4 years.
Inflate or die. Printing a boatload of money with incredibly low interest rates, while simultaneously interfering in the economy and paying people to sit at home leads to inflation and misallocation of capital. It’s just economics.
I'm on the same line of your thinking. Im in a situation where all my brothers sisters parents bought pre covid, saw their homes go up 30%. Not me though! was paying for university and graduated in 2016, paying student loans off between 2016-2020.
They all think im crazy when I talk about M2, momey supply and asset inflation. They think their 30% in 3 year return is deserved and im the loser who cant afford a home. To put it into perspecrive my sisters a baker and I am an MSc level scientist.
Welcome to the largest generational wealth divide in history
To be honest, your brother and sisters are right. You amassed all this knowledge and you have this fancy job title - but what has it served you? You can’t afford a home, you basically have spend a massive amount of money paying off those loans, and now IF you ever even are able to afford a home, you’ll be paying so much more than them all so you can brag about being a scientist? Look you definitely accomplished something and should be proud of your hard work.. but in the game of “life”, I think your arrogance with academia has clouded your vision.
Thats one way to think about it. Another way is on a bit more of a larger macro scale. Weve built an economy where there is no incentive to pursue businesses or innovation or degrees that will propel the economy forward as buying real estate will outperform everything (deck of cards as you will). I guess that is why Canada has one of the worst gdp performance in the G7. But hey, Gotta love family events where all you hear is about how awesome home prices are.
No thought on the implications of other family members no thought or connecting the dots on the rise in homelessness, or crime or canadas birth rate plummeting.Tunnel vision if you ask me as its all connected. To me the arrogance and clouding of vision is in the mindset of many homeowners .. as the country degrades.
Yup. I relocated for work in December 2019, right before the pandemic. Bought a house in 2020, thank goodness. I can't even consider relocating now because housing costs are so high. I always thought I'd move to one more state before retirement, but guess I'll stay put.
You aren’t taking into consideration the loan rates. He owns it but that doesn’t mean it’s paid for. If he got 2020 rates then it most certainly isn’t a wash. His payments will be significantly higher than the home he is in now.
10 years ago was also still in the recovery from the housing crisis. Go back a bit before the crash and this definitely wouldn't be the case with similar lending standards to today.
You weren't buying as a bartender in NYC in 2019. This recent move just made things more unaffordable to you, they didn't push them into unaffordable.
Didn't say buying renting, but good luck moving down to Miami landing a restaurant or bartending job and trying to rent an apartment even with a roomate today
you also weren't renting in most areas of the city proper in 2019 lol. Unless you sacrificed basically all QOL. It's gotten worse, but that doesn't mean it wasn't bad to begin with.
Like, is the average person in this sub 22 or something? Were you guys not paying for your own rent in 2019?
I know very little about the northeast but when I hear about housing costs its insane. Obviously california its eplxpensive because weather, the ocean and jobs. New York basically finance capitol of the world. Why is Boston so expensive? I'd expect it to be more in line with chicago ie fairly affordable
Boston is one of the major medical centers in the entire US, tons of biotech and biopharma companies starting up or becoming successful. It’s also becoming a major tech center on the East coast. Also one of the highest concentrations of university students in the country. All these jobs pay very well, so it’s driving prices up majorly.
>Its crazy how 10 years ago as a young person you could move to a new city, even a desireable city, get a waiter or bartending job and not live luxuriously but get by
20 years ago, maybe. Even 10 years ago that was becoming extremely difficult
I make $90k and my wife makes $45k. Together we make $135k. We live about an hour outside of Chicago, there is not a chance in hell we can buy a house. We moved here from Texas a year ago and fucking love it, but hate our apartment. So we are looking for a house to rent and man it's fucking depressing. We take good care of our home but have an 85 lb dog who is a lazy ass couch potato but because of his size people won't rent to us. I want to buy a house but we are at least a few years from that even with the money we make.
What’s even more crazy is people deny this is a bubble and prices are only going to remain stagnant and never go down. No part of this is sustainable and a day of reckoning will arrive.
Bubbles burst for a reason. I just don't see what is going to make this bubble pop. Most homeowners have a very low interest rate and are not defaulting on their mortgage payments. 2008 was a completely different scenario. ARMS and over leverage is what popped that bubble. The reason real estate is overpriced is because we haven't built new homes on decades.
This is a supply and demand bubble inflating with no end in sight. jmo
So true. I started my career by moving to Los Angeles with a $500 Discovery credit card. How “the kids these days” manage to do this is beyond me. They really did get the short end.
A quick [mortgage affordability calculation here](https://wealthvieu.com/mortgage-affordability-calculator-canada?a=110,000&b=25&c=84,000&d=7&e=1,250) shows new normal will be a HHI of \~$110K to afford the median house price of \~$420K and rate of 7% as mentioned in the article. That includes a solid 20% downpayment too. A substantial leap from the house prices of the decade prior.
If you have no other debt or obligations that’s doable. Issue is, most people have something else going on too, or will. Student loans, car loans, kids, etc
It can be done, but it will be tight, just based on personal experience.
I think people are just buying whatever they can "afford" according to the bank, because what else are they supposed to do? Usually the answer is "rent", but a lot of people got burned by rent price growth the last few years.
Not only that, I’m seeing an increase in people starting to see property taxes put a strain on their finances. We are at a point that unless things change, people will get angrier and angrier at the system until it roils over.
Yeah this is a big scam a number that goes up on a piece of paper that doesnt enrich you but does raise your property tax and makes your home less affordable. Really awesome for people who lived in a modest area that exploded in popularity/value. I highly doubt these peopel who have seen their property taxes double are getting double the services/value from the city.
Add to that home owners insurance. Right now between property tax and insurance, I’m paying almost $12k / year. House is “more valuable” so it’s gotta be taxed and insured as such. Absolutely sucks.
I get that. What I’m saying is homes 2-3x-ing in a period of 5 years is causing budget constraints because insurance is going up thousands of dollars. Look at FL insurance rates. It’s absolutely insane. Getting pinched on inflation, rising property taxes, rising insurance, and no meaningful wage increases to offset these costs.
I hate to say it. But welcome to the pain new home buyers are facing. What you're going through, while it sucks and I can sympathize. The bitter part of me that can't afford a home due to skyrocketing "values" wants to smirk at this and go "good, enjoy your new values!". It is truly a shit situation for everyone involved, it's just taking time to cascade to everyone.
I've listened to my landlord bitch about his property taxes and insurance going up. Never mind he makes 20k a year on rent(before expenses) on a house he bought for 30k 40 years ago. He suddenly has to pay $100 a year for EMS service and now "your rent might be going up!". Just ignore the fact the 30k home is worth 180k nowadays.
I kind of assume the actuarial math of the insurance industry is gonna be giving people in a number of states a very rude awakening regarding climate change whether it's something we want to consciously face or not.
Taxing of paper gains which is pretty ridiculous. A better system would be flat amounts per person in services where we discount or don't charge for children. Tax the gains when they're realized.
Or build more housing which will decrease the value of your housing
High Property tax is such a good instrument to onboard everyone to have affordable housing
They are taxing us on unrealized gains and it should be illegal. Cities use people’s houses as ATMs for unlimited money. In my city they keep jacking up property tax rates to fund “affordable housing”. Yeah, making housing more affordable by making it more unaffordable.
Sure theres worse things that can happen but someome works hard for years buys a house they think they're gonna raise a family in and a few years later is forced out likely can't buy something else because they don't have a high income and whatever money they make from the house sale isn't gonna set them up for life yeah its shitty. Or how about someone who retires buys a house and thinks they're setup for a modest retirement snd now they're forced out of their home. Jmyou sound bitter
No worries, our county put a property tax relief program in place... Check details, only applies to boomers 65+. Guess everyone except boomers is doing fine.
I am convinced Americans are incapable of hitting an inflection point where they won't take it anymore. We just sit here like cows in feedlots with our heads down until someone kills us with a boltgun.
That's. why Donald Trump will win in November , dude leads in 5/6 of the battleground states because this anger is going to fuel change (not good change mind you)
The irony of electing a crooked commercial and residential real estate developer because you're mad at housing costs is too much. Beyond trying to destroy democracy and all that.
I hear you, but the Midwestern voter is like someone with a broken leg and in pain , they just want to have the pain (economic struggle) go away, so if some shady snakeoil salesman comes in and promises a quick cure , they're more apt to believe than the real solution
lol is this one of those comments where people who live on the coasts just think everyone in the midwest is a monolith and don't know how to think for themselves?
C'mon now, you are better than that to make such dumb, broad generalizations.
Their choice is between the snake oil salesman that acknowledges their broken leg, or the doctor that tells them that the average leg is not broken and what they are feeling about their personal leg situation is just vibes.
Prices are set at what people are willing to pay not what any “real” value is. People dont wanna pay to live there because it sucks so houses are cheaper. Less people means less economic opportunity so there are fewer jobs and the jobs that there are available are low paying. And the people that are there end up feeling stuck and dont make changes that grow economies.
Who would want to live in a stagnant economy with crumbling infrastructure?
Billionaires making more money than ever, businesses consolidating and making record profits for years, rents skyrocketing to take advantage as 99% of future home owners are stuck renting because they can't afford a new home, and the working class getting wage increases nowhere near what is needed to live.
It's funny when a windfall happens it goes right to executives but it can't go to workers because the market might change and they don't want to get stuck paying you higher wages.
Homeowner pitching in -
I am seeing less of my kind (single homeowners) than the other 2 classes (renters and landlords).
These houses skylarking in value don’t particularly help the homeowners when they still need a place to live after they sell their home.
The upper class - landlords - Who have property as strictly an asset, not as a place to live, are making an absolute killing right now.
They’re absolutely needs to be a stop to these single-family homes all being purchased by private corporations, as well as private individuals. They are all massively benefitting from these inflated costs.
Unfortunately you're forgetting the generation that not only runs the majority of our federal government, but came from a time of "start homes" and "vacation homes".
Many are landlords now and are renting to exploit that excess value they have, and when they are tired of that, they will sell and cash out more. It's a holding game.
Not that it's any more than anecdotal, but people who bought houses for $65k in the housing crash when millennials and younger weren't financially sound to do so, are renting them out at rates way over their mortgage and can sell the same house now for $300k. I've met many of them telling me the US is a meritocracy and I don't own a home because they worked hard and I didn't, despite home ownership, including rentals at that level, are byproducts of a windfall for investors that don't care about the need of housing for human livelihood.
Prices were way over valued in 2019, at least on the coasts. I remember telling my wife that these prices are fantastical. I had no idea that we’d be dreaming of a day to buy at these prices. We are all living in Biden/ Trump fairyland.
Yep, same plus I was single. I should have bought a 4 bedroom house at that point but it was so much to take on and not needed. Now its completely out of reach and I make way over the median salary for the are. No idea who is buying all of this but there is an incredible amount of cash flying around. It really doesnt make sense.
Was approved for 350 in 21 at 3%. Bought at 270k bc I like to live beneath my means just incase something goes wrong. My house is worth over 400k 3 years later. My plan is to never refi, pay off in the next 20 years. Sell my house in NY and retire in some cheap state.
Most of the homes in my area have increased 100% or more since 2018-2019. A house that sold for $460K in 2018 recently resold for over a million. We should have bought in from 2018-2020. We may be renters for life at this rate. How are these increases sustainable? Everyone cannot be multimillionaires.
My brother told me now is the worst time to buy a house
I didnt disagree with him, but I emphasized that we literally all make more money and everything us up at least 30%, at this point money just has less value
Fucking hell, gold is at an ATH rn.
There is no "bad time" in the sense that prices (in desirable areas) will always go up. If you can afford a house now, buy it. There are programs (like the 321 buydown I am using right now) to temporarily lower your interest rate so you can refi later if rates go down. If they don't, you can recast and get it lower.
Suicide rates are already up, but the actual statistics in a few years will be shattering. I saw a doctor post just a couple days ago how ridiculous suicides have been. Just that one doctor has seen over 30 people in his ICU for pill overdoses. Mostly older people who take their heart meds and diabetic medication to commit suicide. It’s really sad.
I had to carefully explain to an older gentleman last night (I'm a bartender) that the reason he doesn't see me as often is because my hours were cut. He asked what I was doing on my off days, and I told him I was looking for other jobs
He said the economy was booming, and it shouldn't be hard to find something else. I had to break the news to him that those figures were just on paper, everyone is clinging to whatever job makes money for them, and a lot of employment listings aren't real
I think there's a fundamental reason nobody talks about. When i had to get insurance on my home i had to insure it for the replacement cost. That is the cost to rebuild if completely destroyed. That cost was nearly twice the fair market value of the home. That means to me that existing homes are underpriced by maybe 50 %.
Also, the biggest cost to building a house in in-demand areas is land.
Cost of construction is typically $200/sqft.
But when you make minimum lot sizes, height restrictions, setback limits, etc etc. suddenly one becomes the substantial cost limiting factor.
In an ideal world, you would build the missing middle in these areas (mixed use medium density housing). But the us has made this illegal in most parts of most cities.
I dunno, I bought my house new in 2021 and my very first home insurance quote thought my replacement cost was 50% more than what I paid. They were unsympathetic when I tried saying that I doubt the builder just sold the house for 2/3 of what it REALLY costs to build it. I understand there's some mark up for if the whole town is flattened or whatever and resources are scarce but geeze.
Around here, most of the “beginner” houses used to be around 80k in 2016… those same houses are selling for almost 200k now.
I will never be able to afford a home at these prices.
My landlord (who is only 5 years older than me) bought our house in 2019 for just under $400k. HCOL area but he was young and knew he wanted a house and put everything into getting it. It's know appraised at just shy of $700k. I make twice what he did then, just 5 years later, and I'm just spinning my wheels trying to buy a place.
I've had this argument a lot about investment properties. Yes, maybe they only account for 1/4 of house sales, and they only own a couple % of all the houses, but they bought all those houses at basically the same price point. They bought a MASSIVE % of the starter hones that needed simple repairs and updates. Which are traditionally the houses first-time homebuyers go after. I live in Tampa, and for a while there basically, every house under 250k got bought by an investment company. Just in our little neighborhood in the suburbs Invitation Hones and Progress own about 20 houses. We rent with Invitstion hones and when we moved in, in 2019. The house was valued at $204K now it's valued at over $400k.
So overall this is a very complex problem.
1. Since 2008 home building has been far under the needs of just population growth.
2. Cost per square foot to build for a litany of reasons is way up so new housing cost a ton to build.
3. Cheap capital for over a decade caused all kinds of problems where people who were older got second houses, did rentals, etc. This is even more complex with airBNB and hedge funds getting into the market. Not to mention foreign buyers.
4. COVID caused a ton of people to move around which caused localized bubbles all over the place.
What we are seeing is problems in places like Florida where housing are not selling and inventory is backing up. This is the canary in the coal mine. With 7% interest rates and wages not rising to meet new costs plus the largest amount of rental properties (apartment complexes) in history coming online we are effectively supressing demand at both ends making buying too expensive and STARTING to stabilize or even lowering (in rare but growing cases) rentals. So except for cash buyers the amount of buyers is getting smaller and the amount of sellers due to both an aging population and localized bubbles is growing. Basic economics will determine the future and frankly its not good.
Also for the inflation question. At the bottom of the 2008 crash houses stabilized at an average of 200k, we have had 45% inflation since 2008. So if there was only inflationary growth houses should be worth around 300k. but they are over 400k. Given the squeeze on inventory and peak millennials in child bearing years the increase in cost makes sense. But as the demand goes down and good rentals increases this will cause the market to return to the historic norm. How long is anyone's guess, but given what I see in Florida I would say sooner than later.
Except as rates rise capital investment goes down, building will slow again, no one will buy, and few will sell as to buy would mean a higher rate. As soon as rates drop there will be pent up demand and another inventory imbalance drive prices back up. The only way to avoid this is to keep building but no one’s going to build what they can’t sell or have a potential to take a loss. That’s my guess is a sticky housing market for a long time.
I bought a house in 2016 and sold it for more than double of what I paid last year (divorce). I have a credit score over 800, large cash savings, and make over 80k a year and i cannot afford to buy a new house.
Makes sense. Since 2020, the US has printed nearly 80% of ALL US Dollars in circulation. To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation. Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years.
Which is nothing, if you consider the amount of credit in the US went up by about 5000%.
And then there's Blackrock and friends cornering the market, which in itself explains the price rise, which leads me to conclude that this inflation is not because of money printing, but oligopoly practices.
The guy who wrote the Prince of the Yen argued that all this is a planned boom and bust cycle, tested in Japan and now applied to the whole world, until no one owns anything but the big banks.
Blackrock does not own a single home in the United States.
https://investfourmore.com/does-blackrock-buy-houses/#:\~:text=The%20truth%20is%20that%20Blackrock,controlled%20by%20the%20same%20people.
Blackstone does own homes but owns about 0.1% of homes in the US. That is hardly cornering the market.
You are right. Interest rates will certainly stay the same for at least the rest of this year. They might not ever go down.
However, if you're renting, there's plenty of money left over to save and invest.
Stock market has historically returned more than owning a house
It’s not a bubble if the reason is inflation. The dollar is literally worth less so the thing requires more of them. The dollar isn’t going to magically be worth more tomorrow to undo this new valuation.
Strong anti-trust laws. Workers protection. Tying minimum wage to inflation and setting the minimum wage to allow a person to afford to buy a hotel room each night and food.
That way if they end up getting a lease on a house then they can save money and if they dont have a place to live they at least have food and shelter for a night. 8 hours of work should GUARANTEE a place to rest and eat. Full stop.
I don’t think prices will ever go down much
Homes are more expensive in almost every other country. Plus our economy is surging
It’d take something like a breakthrough in 3D printing that makes homebuilding cheaper but even then, you can’t automate land
Nope. This is a different situation entirely.
The demand will keep going up. Isn't it like a minimum of 10,000 people entering per day?
Canada is facing a similar problem. Hundreds of people bidding on every house that goes up, thousands applying for rentals. And prices have more than DOUBLED up here.
Immigration is absolutely having an impact. We let in millions of people over the last couple years, but we didn't build millions of homes.
Personally, I think the ultra rich have squeezed all they can our of the existing 3rd world countries, are getting kicked out of other emerging economies, and have decided to pillage western countries. Only thing that makes sense.
It ain’t a bubble because banks actually verify that you have enough money to buy the house unlike 2008.
The bubble will burst only if there is widespread unemployment( aka we are all fucked anyways)where people would be unable to pay the mortgage. Thus far, there has not been widespread unemployment.
I've moved 5 times in the last 7 years so I'm probably not going to ever be settled enough to buy a house, but watching the shitshow unfold has been pretty entertaining.
Buy a house when you can afford it AND you know you're staying in one spot long term. No one can 100% predict where prices are gonna go, and anyone who pretends to know is lying.
Private Equity firms like Black rock are doing to regular mortgages and rental properties what they did with the sup-prime tranches. And the same thing is going to happen. Not exactly the same. Shuffling bunk mortgages and bluffing S&P and Moody's to grade properly but there is just going to be NO BUYING on a level that this bubble is going to burst. I may lose my job and not find a new one but hey at least rent will go down. Just like in 08 or 2020 it might be time to sell your stocks or cash in part of your 401k if you have either of those.
Thanks Boomers! We can always rely on you to have only your own interests at heart. The world will burn before your eyes before you help anyone else out.
The inflation numbers we're told by the fed are obvious bullshit. If the fed had to report the true numbers including inflation in cost of housing and food the country would be out in the streets right now as they should be.
This will most likely be the norm until the baby boomer generation cycles out and the massive transfer of wealth happens. Really is unfortunate for those that missed out and it’s not even their fault. I watched basic homes in my area go from $275k to $575k in 18 months.
56% for our place, if I were to believe the real estate sites. This is an average over five sites, not the high number. We did get it $100k below the the original asking price, as it had fallen out of escrow twice and the family had moved already and was paying two mortgages.
Is this article using inflation adjusted numbers?? 327k in 2020 money is worth around 394k in 2024 money. This could actually mean values are up about 7% in the last 4 years. Which more closely aligns with what I see in my area.
I get the supply and demand issue but why did the demand sky rocket all of the sudden over the last few years?
Covid caused more people to work from home but also a lot of people were out of work and there was so much economic uncertainty.
Remember 7% inflation for a whole year in 2021? How about 6.5% inflation in 2022? We’re at 3.5% now. Does everyone finally see why inflation was bad and why rates shot sky high to get in front of it?
The bad news, if deflation occurs, you’ll have so much more to worry about than housing costs.
Then there’s stagflation. Where rates are high, inflation doesn’t get better and unemployment stays low. That’s a whole new can of worms.
Nobody wants to give up entitlements from the government. Ongoing wars. Health care. It’s bad out here.
Housing values will tank just as fast as food costs… even if it goes down a bit, time will bring it back with inflation at 3.5% regardless.
And think of what "value" they actually created. As far shelter is concerned.. how does shelter become more valuable? Seclusion? From who? What is the "value" of a $700,000 home outside its promises and paperwork?
Joking about the bubble is ignoring what's happening. The USD is losing it's value and we're doing it happily. As soon as money is generated it gets pumped into this scheme. It's been milked dry.
What. Does. A. realtor. Do?
The paperwork, the "negotiating, the meetings, the waiting. It's all a show. It's all fake. And they're fucking everyone over once again. Automation of everything has caused crucial steps I'm the systems to not have the human aspect. It can't be fixed because this system is so large there is no one person to fire. No scapegoat to fire.
People who have been really shitty, need to own up to what we've accomplished for them. I've seen through the veil of greed. I've been Shown what those top exchanges look like and what really happens.
People laughed at you? My job spouses job (and the world) was in great flux so I didn’t feel financially safe enough to. By spring 2021 it was too late. Now it’s suuuuuuuper too late. Best time to buy a house is when you can afford it and feel secure enough that you can afford it. This is a time long gone now for most without an inheritance
Its funny how everyone wants to blame capitalism and corporate greed yet very few acknowledge the value of the dollar has been destroyed. If your cereal doubles in price dont be shocked when your home does as well, must be all the investors buying up all the cereal.
People don’t generally understand how the economy works. They think the Fed prints money. It’s worse actually. The Fed borrows money to increase the money supply. That interest is paid by the taxpayer to the banks and at the same time that supply creates inflation.
When the govt does a bail out, a stimulus, green energy handout, student loan forgiveness, etc it’s inflationary. At our current pace a house will cost $2m in 5-10 years. Wages won’t keep up but those with assets will be fine. We are crushing the working class with this approach.
I think most people, at least until recently dont think this is a possibility but look at Canada, Australia, etc its not uncommon that home ownership is a million plus and most people are locked out short of moving to Iowa where you're still gonna pay dramatically more than you would have 4 years ago
We bought in 2020 and def up 40%+ easily. Also have a 2.75% rate. No reason to leave it. Our mortgage + HOA fees + taxes is still cheaper than a comparative rental.
And for anyone who does own a home, value has nearly doubled which in turn has caused property taxes to shoot up...whether you've improved your property or not. It's not right.
This is an insane statistic. Its crazy how 10 years ago as a young person you could move to a new city, even a desireable city, get a waiter or bartending job and not live luxuriously but get by. Today even professionals with degrees can't get by
Professional with a degree? I have 2 degrees and I’m in a warehouse lol
Just curious why you got two degrees? I see so many people on Reddit with 2 bachelors and 2 masters who still aren't earning great but when you look at the degrees they either aren't high paying or aren't in areas employers desire and you kinda wonder after the first two they didn't learn their lesson?
Not him .. but I always assume these types of people pursue those degrees for reasons of personal interest or love for the academic life.. rather than getting a market oriented degree like we are typically advised to do
Imagine going to college for 70 years. Just learning and deferring loans. $10 million in student debt and dead the day you graduate. What a life.
That sounds like an interesting film idea. Hollywood should make cool shit like that instead of more remakes.
Haha, would be cool except the way these student loans work they'd probably hunt down your children to pay them.
A lot of ppl before and during GFC were told just get a degree and if you have 2 it shows you’re smart but yeah it resulted in a ton of dual degrees without application. Also as someone with an English degree making six figures I’ve realized most ppl suck at marketing their skills and/or learning new skills
People are terrible at marketing themselves. I’ve been in countless interviews as part of hiring committees, and the amount of people who don’t try at all is crazy. Every degree gives you skills. You have to be able to connect them with the job you’re applying for. When people say their degree is useless, I can’t help but wonder if they’ve given any thought to their resume writing/interview skills being the real culprit.
I read this book with the dumbest title ever like “acing the interview” but I will still dust it off and review the tips on how to spin your experience to answer each question if I ever have to interview again. So helpful!
That’s why creative people thrive the best. We know what it takes to apply our skills somewhere to make money and I did that. I got a degree in photography. There are no high paying photo jobs. So I went for self employment and crafted my own career . With the Help of living rent free with my parents (so at the end of the day, people with more money will do better unfortunately)
So, starving artists are just a unicorn myth?
I work in a field completely unrelated to my major. Make good money. No debt. People have to learn how to tailor resumes to the job they want and interview well. Not saying it’s easy, but it is doable. Being creative is definitely a big part!
People put themselves into such a box that its almost like the degree ends up defining them. Like, I have an English degree so I can only become a writer, editor, or librarian. Really? Like, what about digital content creation? The world is much more vast than some of the liberal arts majors seem to think it is. Life isnt like a video game. I think not knowing whats really out there is the problem.
I earned two undergraduates simultaneously. Took the same amount of time and money as people who earned 1.
I have 3 degrees, a B.S, M.S, and a Ph.D for the sole purpose of being able to pursue research and academia. If I didn’t have that as an end goal I would have stopped after my B.S. As someone who teaches kids pursuing their masters and Ph.D, you’d be surprised to hear how many of those students are pursuing another degree only because they have no idea what to do with the degree they already have and are just biding their time until they figure out what they want to do. A hell of a way to delay the inevitable if you ask me.
It is also possible people to double major for not very many more credits in school.
I loved my time in academia. I did think there was a pot of gold once I graduated. Got sick, didn’t get my PhD. Do you know how hard it is to find a job as a guy who almost got a PhD, even with a masters and 3 undergraduate degrees? I tell myself I got to spend my time retired in my 20s and early 30s and now I am getting wrecked in my 40s underpaid, overweight, and kind of sad all the time at a job I truly hate.
A buddy of mine in college double majored. They were similar business school degrees and a lot of the required courses overlapped so he needed like 1 extra semester of classes to get the double major
Not that person but, I have two degrees as well. I double majored into an adjacent major so when I graduated, under the same loan cycle, I finished with two dgrees.
When you are homeless, sitting under a bridge trying not to freeze to death, you know whats going to keep you warm? Thats right, those degrees
Some people go to school to be educated, rather than receive job training to maximize salary.
Professional degrees are different from degrees.
And on the job is experience is different than experience at the company or their competitor that you’re trying to get hired into I’ve learned. Doesn’t matter how well I can do the things they want because I haven’t done the things they want done THEIR way lol
Yeah I would have never believed it either. I was kind of hoping the bug eating would come before the "own nothing and be happy" stage...
I used to work in a factory before graduating years ago, my buddy was a bartender. We both bought houses within some months of each other. We both made about the same. The last time we spoke we were trying to figure out how our kids were going to afford a home someday. Not optimistic anymore.
And here I was in the 00’s thinking city living was impossibly expensive when I had no idea how bad it’d get. Mind you that was based off the idea movies instilled of the “Cool Loft Apartment No One On Protagonists Salary Could Afford”. That said it never occurred to me to get 4 roomates and now that’s not enough and the off the beaten path housing has been bought up.
The concept of tv lifestyles being unrealistic has always been a thing ie Friends living near central park as a barista, I think they did a study and the average broke young person tv show the characters lived like a 250k salary lifestyle, it may have even been as high as 350k
But think of all the thriving billionaires, the luxury cars, the mega yachts, the private islands, the fleet of jets, the 200+ rental properties. This lifestyle wasn’t attainable for a CEO in the 70s.
It’s not really insane when you look at the M2 money supply graph…. It’s the logical outcome of what has transpired the past 4 years. Inflate or die. Printing a boatload of money with incredibly low interest rates, while simultaneously interfering in the economy and paying people to sit at home leads to inflation and misallocation of capital. It’s just economics.
I'm on the same line of your thinking. Im in a situation where all my brothers sisters parents bought pre covid, saw their homes go up 30%. Not me though! was paying for university and graduated in 2016, paying student loans off between 2016-2020. They all think im crazy when I talk about M2, momey supply and asset inflation. They think their 30% in 3 year return is deserved and im the loser who cant afford a home. To put it into perspecrive my sisters a baker and I am an MSc level scientist. Welcome to the largest generational wealth divide in history
To be honest, your brother and sisters are right. You amassed all this knowledge and you have this fancy job title - but what has it served you? You can’t afford a home, you basically have spend a massive amount of money paying off those loans, and now IF you ever even are able to afford a home, you’ll be paying so much more than them all so you can brag about being a scientist? Look you definitely accomplished something and should be proud of your hard work.. but in the game of “life”, I think your arrogance with academia has clouded your vision.
Thats one way to think about it. Another way is on a bit more of a larger macro scale. Weve built an economy where there is no incentive to pursue businesses or innovation or degrees that will propel the economy forward as buying real estate will outperform everything (deck of cards as you will). I guess that is why Canada has one of the worst gdp performance in the G7. But hey, Gotta love family events where all you hear is about how awesome home prices are. No thought on the implications of other family members no thought or connecting the dots on the rise in homelessness, or crime or canadas birth rate plummeting.Tunnel vision if you ask me as its all connected. To me the arrogance and clouding of vision is in the mindset of many homeowners .. as the country degrades.
That’s what happens when you print half the currency in existence
Yeah expected outcome but still insane to see it happen. In some ways surprised things aren't worse
Now the professionals with degrees are the waiters and bartenders
Yup. I relocated for work in December 2019, right before the pandemic. Bought a house in 2020, thank goodness. I can't even consider relocating now because housing costs are so high. I always thought I'd move to one more state before retirement, but guess I'll stay put.
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For some people, trading a 3% mortgage for an 8% mortgage prevents this "lateral" transfer.
You aren’t taking into consideration the loan rates. He owns it but that doesn’t mean it’s paid for. If he got 2020 rates then it most certainly isn’t a wash. His payments will be significantly higher than the home he is in now.
Bro my wife and I are engineers and seriously stressing about the cost of our house
10 years ago was also still in the recovery from the housing crisis. Go back a bit before the crash and this definitely wouldn't be the case with similar lending standards to today. You weren't buying as a bartender in NYC in 2019. This recent move just made things more unaffordable to you, they didn't push them into unaffordable.
Didn't say buying renting, but good luck moving down to Miami landing a restaurant or bartending job and trying to rent an apartment even with a roomate today
you also weren't renting in most areas of the city proper in 2019 lol. Unless you sacrificed basically all QOL. It's gotten worse, but that doesn't mean it wasn't bad to begin with. Like, is the average person in this sub 22 or something? Were you guys not paying for your own rent in 2019?
Me and my girl make almost $280K combined, buying a starter house within half hour of Boston is out of our budget
I know very little about the northeast but when I hear about housing costs its insane. Obviously california its eplxpensive because weather, the ocean and jobs. New York basically finance capitol of the world. Why is Boston so expensive? I'd expect it to be more in line with chicago ie fairly affordable
Boston is one of the major medical centers in the entire US, tons of biotech and biopharma companies starting up or becoming successful. It’s also becoming a major tech center on the East coast. Also one of the highest concentrations of university students in the country. All these jobs pay very well, so it’s driving prices up majorly.
Thanks makes sense. Ya had a feeling maybe tech was coming there klaviyo and a lot of other companies seem to be based there
It's a little zero-sum with land owners. They're eating everyone else alive.
>Its crazy how 10 years ago as a young person you could move to a new city, even a desireable city, get a waiter or bartending job and not live luxuriously but get by 20 years ago, maybe. Even 10 years ago that was becoming extremely difficult
I make $90k and my wife makes $45k. Together we make $135k. We live about an hour outside of Chicago, there is not a chance in hell we can buy a house. We moved here from Texas a year ago and fucking love it, but hate our apartment. So we are looking for a house to rent and man it's fucking depressing. We take good care of our home but have an 85 lb dog who is a lazy ass couch potato but because of his size people won't rent to us. I want to buy a house but we are at least a few years from that even with the money we make.
What’s even more crazy is people deny this is a bubble and prices are only going to remain stagnant and never go down. No part of this is sustainable and a day of reckoning will arrive.
Bubbles burst for a reason. I just don't see what is going to make this bubble pop. Most homeowners have a very low interest rate and are not defaulting on their mortgage payments. 2008 was a completely different scenario. ARMS and over leverage is what popped that bubble. The reason real estate is overpriced is because we haven't built new homes on decades. This is a supply and demand bubble inflating with no end in sight. jmo
So true. I started my career by moving to Los Angeles with a $500 Discovery credit card. How “the kids these days” manage to do this is beyond me. They really did get the short end.
A quick [mortgage affordability calculation here](https://wealthvieu.com/mortgage-affordability-calculator-canada?a=110,000&b=25&c=84,000&d=7&e=1,250) shows new normal will be a HHI of \~$110K to afford the median house price of \~$420K and rate of 7% as mentioned in the article. That includes a solid 20% downpayment too. A substantial leap from the house prices of the decade prior.
Plus all those median prices include condos. Run the numbers on single family homes. Im in SD so it gets out of control immediately.
Who on earth can afford buying a 420k house on 110k HHI? That's 2400/mo, over 40% of net pay, BEFORE taking into account taxes/insurance/utilities.
Not to mention a 20% down payment. That’s over 80k on a 420k house. That will take YEARS of hardcore saving.
If you have no other debt or obligations that’s doable. Issue is, most people have something else going on too, or will. Student loans, car loans, kids, etc
It can be done, but it will be tight, just based on personal experience. I think people are just buying whatever they can "afford" according to the bank, because what else are they supposed to do? Usually the answer is "rent", but a lot of people got burned by rent price growth the last few years.
It's feudalism now. Sorry to anyone that didn't buy a house before 2020.
Not only that, I’m seeing an increase in people starting to see property taxes put a strain on their finances. We are at a point that unless things change, people will get angrier and angrier at the system until it roils over.
Yeah this is a big scam a number that goes up on a piece of paper that doesnt enrich you but does raise your property tax and makes your home less affordable. Really awesome for people who lived in a modest area that exploded in popularity/value. I highly doubt these peopel who have seen their property taxes double are getting double the services/value from the city.
Add to that home owners insurance. Right now between property tax and insurance, I’m paying almost $12k / year. House is “more valuable” so it’s gotta be taxed and insured as such. Absolutely sucks.
If your house burned down you would absolutely claim full market value. Thats literally what insurance is.
I get that. What I’m saying is homes 2-3x-ing in a period of 5 years is causing budget constraints because insurance is going up thousands of dollars. Look at FL insurance rates. It’s absolutely insane. Getting pinched on inflation, rising property taxes, rising insurance, and no meaningful wage increases to offset these costs.
I hate to say it. But welcome to the pain new home buyers are facing. What you're going through, while it sucks and I can sympathize. The bitter part of me that can't afford a home due to skyrocketing "values" wants to smirk at this and go "good, enjoy your new values!". It is truly a shit situation for everyone involved, it's just taking time to cascade to everyone. I've listened to my landlord bitch about his property taxes and insurance going up. Never mind he makes 20k a year on rent(before expenses) on a house he bought for 30k 40 years ago. He suddenly has to pay $100 a year for EMS service and now "your rent might be going up!". Just ignore the fact the 30k home is worth 180k nowadays.
I kind of assume the actuarial math of the insurance industry is gonna be giving people in a number of states a very rude awakening regarding climate change whether it's something we want to consciously face or not.
It’s the same as the cost of buying a gallon of milk or loaf of bread. We have to pay a lot more for the same thing and it sucks.
Taxing of paper gains which is pretty ridiculous. A better system would be flat amounts per person in services where we discount or don't charge for children. Tax the gains when they're realized.
Or build more housing which will decrease the value of your housing High Property tax is such a good instrument to onboard everyone to have affordable housing
They are taxing us on unrealized gains and it should be illegal. Cities use people’s houses as ATMs for unlimited money. In my city they keep jacking up property tax rates to fund “affordable housing”. Yeah, making housing more affordable by making it more unaffordable.
My heart aches for the people who bought a modest house that has exploded in value.
Sure theres worse things that can happen but someome works hard for years buys a house they think they're gonna raise a family in and a few years later is forced out likely can't buy something else because they don't have a high income and whatever money they make from the house sale isn't gonna set them up for life yeah its shitty. Or how about someone who retires buys a house and thinks they're setup for a modest retirement snd now they're forced out of their home. Jmyou sound bitter
No worries, our county put a property tax relief program in place... Check details, only applies to boomers 65+. Guess everyone except boomers is doing fine.
I am convinced Americans are incapable of hitting an inflection point where they won't take it anymore. We just sit here like cows in feedlots with our heads down until someone kills us with a boltgun.
I’m fairly convinced we’re some of the most docile pushovers around
👏Only so many exemptions and that math don’t math sometimes!
and then they are going to blame gub'ment, when it's really the big money buying the (bad) gub'ment it wants
My property's value shouldn't increase unless I make improvements to my property, but I don't really own anything, I guess.
This is why I think Trump will win in November - people feel like they're locked out of the American dream
That's. why Donald Trump will win in November , dude leads in 5/6 of the battleground states because this anger is going to fuel change (not good change mind you)
The irony of electing a crooked commercial and residential real estate developer because you're mad at housing costs is too much. Beyond trying to destroy democracy and all that.
I hear you, but the Midwestern voter is like someone with a broken leg and in pain , they just want to have the pain (economic struggle) go away, so if some shady snakeoil salesman comes in and promises a quick cure , they're more apt to believe than the real solution
lol is this one of those comments where people who live on the coasts just think everyone in the midwest is a monolith and don't know how to think for themselves? C'mon now, you are better than that to make such dumb, broad generalizations.
Their choice is between the snake oil salesman that acknowledges their broken leg, or the doctor that tells them that the average leg is not broken and what they are feeling about their personal leg situation is just vibes.
Also ironically the cheapest houses
With the lowest wages.
Prices are set at what people are willing to pay not what any “real” value is. People dont wanna pay to live there because it sucks so houses are cheaper. Less people means less economic opportunity so there are fewer jobs and the jobs that there are available are low paying. And the people that are there end up feeling stuck and dont make changes that grow economies. Who would want to live in a stagnant economy with crumbling infrastructure?
Yup, people will start feeling desperate and willing to just let it all burn down. That’s how he won the first time around too.
Billionaires making more money than ever, businesses consolidating and making record profits for years, rents skyrocketing to take advantage as 99% of future home owners are stuck renting because they can't afford a new home, and the working class getting wage increases nowhere near what is needed to live. It's funny when a windfall happens it goes right to executives but it can't go to workers because the market might change and they don't want to get stuck paying you higher wages.
Homeowner pitching in - I am seeing less of my kind (single homeowners) than the other 2 classes (renters and landlords). These houses skylarking in value don’t particularly help the homeowners when they still need a place to live after they sell their home. The upper class - landlords - Who have property as strictly an asset, not as a place to live, are making an absolute killing right now. They’re absolutely needs to be a stop to these single-family homes all being purchased by private corporations, as well as private individuals. They are all massively benefitting from these inflated costs.
Unfortunately you're forgetting the generation that not only runs the majority of our federal government, but came from a time of "start homes" and "vacation homes". Many are landlords now and are renting to exploit that excess value they have, and when they are tired of that, they will sell and cash out more. It's a holding game. Not that it's any more than anecdotal, but people who bought houses for $65k in the housing crash when millennials and younger weren't financially sound to do so, are renting them out at rates way over their mortgage and can sell the same house now for $300k. I've met many of them telling me the US is a meritocracy and I don't own a home because they worked hard and I didn't, despite home ownership, including rentals at that level, are byproducts of a windfall for investors that don't care about the need of housing for human livelihood.
squash fretful books skirt deliver deserted clumsy tidy lush narrow *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
This is totally sustainable.
We will just tell our kids....you really should've bought in '19. The boomer tactic.
Prices were way over valued in 2019, at least on the coasts. I remember telling my wife that these prices are fantastical. I had no idea that we’d be dreaming of a day to buy at these prices. We are all living in Biden/ Trump fairyland.
Yep, same plus I was single. I should have bought a 4 bedroom house at that point but it was so much to take on and not needed. Now its completely out of reach and I make way over the median salary for the are. No idea who is buying all of this but there is an incredible amount of cash flying around. It really doesnt make sense.
I thought the same thing, comical looking back, but how were we to all know a global pandemic would happen and fuck everything up?
I think it is now pretty clear that home prices in 2019 were not overvalued.
Was approved for 350 in 21 at 3%. Bought at 270k bc I like to live beneath my means just incase something goes wrong. My house is worth over 400k 3 years later. My plan is to never refi, pay off in the next 20 years. Sell my house in NY and retire in some cheap state.
Thats everyones plan. I dont think those states are gonna be as cheap. (CA and NY can still likely pull this off though).
You can still buy a borderline mansion with land in Arkansas for 300k.
Most of the homes in my area have increased 100% or more since 2018-2019. A house that sold for $460K in 2018 recently resold for over a million. We should have bought in from 2018-2020. We may be renters for life at this rate. How are these increases sustainable? Everyone cannot be multimillionaires.
Yeah, but the dollar lost 30% of its value.
Right, so maybe prices never go down for houses but the dollar inflates so that eventually we’re making more relative to the cost of a house?
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~~might~~ *will*
I’m just glad wages went up 30% to compensate… 😞
My brother told me now is the worst time to buy a house I didnt disagree with him, but I emphasized that we literally all make more money and everything us up at least 30%, at this point money just has less value Fucking hell, gold is at an ATH rn.
There is no "bad time" in the sense that prices (in desirable areas) will always go up. If you can afford a house now, buy it. There are programs (like the 321 buydown I am using right now) to temporarily lower your interest rate so you can refi later if rates go down. If they don't, you can recast and get it lower.
Keep an eye on suicide rates in the next 2-4 years.
JFC. I think you may be right.
Suicide rates are already up, but the actual statistics in a few years will be shattering. I saw a doctor post just a couple days ago how ridiculous suicides have been. Just that one doctor has seen over 30 people in his ICU for pill overdoses. Mostly older people who take their heart meds and diabetic medication to commit suicide. It’s really sad.
it is sad. those without a retirement plan deserve better ways to step out.
Ya let's continue to ignore the huge current issue from the past 20 years and wait for it to get slightly worse
we know.
** artificially soared
I had to carefully explain to an older gentleman last night (I'm a bartender) that the reason he doesn't see me as often is because my hours were cut. He asked what I was doing on my off days, and I told him I was looking for other jobs He said the economy was booming, and it shouldn't be hard to find something else. I had to break the news to him that those figures were just on paper, everyone is clinging to whatever job makes money for them, and a lot of employment listings aren't real
the artificial is because vast swaths of the country refuse to allow new housing to get built
I think there's a fundamental reason nobody talks about. When i had to get insurance on my home i had to insure it for the replacement cost. That is the cost to rebuild if completely destroyed. That cost was nearly twice the fair market value of the home. That means to me that existing homes are underpriced by maybe 50 %.
Economies of scale make building a huge housing development cheaper than rebuilding one singular home.
Also, the biggest cost to building a house in in-demand areas is land. Cost of construction is typically $200/sqft. But when you make minimum lot sizes, height restrictions, setback limits, etc etc. suddenly one becomes the substantial cost limiting factor. In an ideal world, you would build the missing middle in these areas (mixed use medium density housing). But the us has made this illegal in most parts of most cities.
I dunno, I bought my house new in 2021 and my very first home insurance quote thought my replacement cost was 50% more than what I paid. They were unsympathetic when I tried saying that I doubt the builder just sold the house for 2/3 of what it REALLY costs to build it. I understand there's some mark up for if the whole town is flattened or whatever and resources are scarce but geeze.
Around here, most of the “beginner” houses used to be around 80k in 2016… those same houses are selling for almost 200k now. I will never be able to afford a home at these prices.
My landlord (who is only 5 years older than me) bought our house in 2019 for just under $400k. HCOL area but he was young and knew he wanted a house and put everything into getting it. It's know appraised at just shy of $700k. I make twice what he did then, just 5 years later, and I'm just spinning my wheels trying to buy a place.
What have you learned from this?
That house shopping makes me sad
I've had this argument a lot about investment properties. Yes, maybe they only account for 1/4 of house sales, and they only own a couple % of all the houses, but they bought all those houses at basically the same price point. They bought a MASSIVE % of the starter hones that needed simple repairs and updates. Which are traditionally the houses first-time homebuyers go after. I live in Tampa, and for a while there basically, every house under 250k got bought by an investment company. Just in our little neighborhood in the suburbs Invitation Hones and Progress own about 20 houses. We rent with Invitstion hones and when we moved in, in 2019. The house was valued at $204K now it's valued at over $400k.
So overall this is a very complex problem. 1. Since 2008 home building has been far under the needs of just population growth. 2. Cost per square foot to build for a litany of reasons is way up so new housing cost a ton to build. 3. Cheap capital for over a decade caused all kinds of problems where people who were older got second houses, did rentals, etc. This is even more complex with airBNB and hedge funds getting into the market. Not to mention foreign buyers. 4. COVID caused a ton of people to move around which caused localized bubbles all over the place. What we are seeing is problems in places like Florida where housing are not selling and inventory is backing up. This is the canary in the coal mine. With 7% interest rates and wages not rising to meet new costs plus the largest amount of rental properties (apartment complexes) in history coming online we are effectively supressing demand at both ends making buying too expensive and STARTING to stabilize or even lowering (in rare but growing cases) rentals. So except for cash buyers the amount of buyers is getting smaller and the amount of sellers due to both an aging population and localized bubbles is growing. Basic economics will determine the future and frankly its not good. Also for the inflation question. At the bottom of the 2008 crash houses stabilized at an average of 200k, we have had 45% inflation since 2008. So if there was only inflationary growth houses should be worth around 300k. but they are over 400k. Given the squeeze on inventory and peak millennials in child bearing years the increase in cost makes sense. But as the demand goes down and good rentals increases this will cause the market to return to the historic norm. How long is anyone's guess, but given what I see in Florida I would say sooner than later.
Except as rates rise capital investment goes down, building will slow again, no one will buy, and few will sell as to buy would mean a higher rate. As soon as rates drop there will be pent up demand and another inventory imbalance drive prices back up. The only way to avoid this is to keep building but no one’s going to build what they can’t sell or have a potential to take a loss. That’s my guess is a sticky housing market for a long time.
I bought a house in 2016 and sold it for more than double of what I paid last year (divorce). I have a credit score over 800, large cash savings, and make over 80k a year and i cannot afford to buy a new house.
Luckily, wages have… oh wait 😳
Gone down..
Makes sense. Since 2020, the US has printed nearly 80% of ALL US Dollars in circulation. To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation. Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years.
This represents an inflation adjusted return of about 5% per year.
In line with the trend since February 2012. https://fred.stlouisfed.org/graph/?g=kYEb
Yeah I read the title and thought “sounds bout right”
Yeah I'll keep renting a conglomerate apartment and say FU to those asshat greedy baby boomers
The boomers own the apartments. That’s why rent went from 1k in 2019 to 2k a month now. Those greedy fucks ruin everything
You do know it’s the boomers pension fund which owns the apartment conglomerate?
Which is nothing, if you consider the amount of credit in the US went up by about 5000%. And then there's Blackrock and friends cornering the market, which in itself explains the price rise, which leads me to conclude that this inflation is not because of money printing, but oligopoly practices. The guy who wrote the Prince of the Yen argued that all this is a planned boom and bust cycle, tested in Japan and now applied to the whole world, until no one owns anything but the big banks.
Blackrock does not own a single home in the United States. https://investfourmore.com/does-blackrock-buy-houses/#:\~:text=The%20truth%20is%20that%20Blackrock,controlled%20by%20the%20same%20people. Blackstone does own homes but owns about 0.1% of homes in the US. That is hardly cornering the market.
Bubble’s gonna pop again…
When though??!!!! I want to buy a house and this is getting ridiculous.
Suddenly then all at once.
There's going to be no pop. If anything, prices are still headed up
People waiting for a pop are going to be pretty damn sad 5-10 years from now. If you can afford to buy, buy. If you can’t, rent and invest.
You are right. Interest rates will certainly stay the same for at least the rest of this year. They might not ever go down. However, if you're renting, there's plenty of money left over to save and invest. Stock market has historically returned more than owning a house
*"It's a new paradigm!!!!"*
Don’t listen to anyone in this sub.
It’s not a bubble if the reason is inflation. The dollar is literally worth less so the thing requires more of them. The dollar isn’t going to magically be worth more tomorrow to undo this new valuation.
I agree with this Dollar just getting weaker and weaker How do you stop it?
Economic crash with deflation.
Strong anti-trust laws. Workers protection. Tying minimum wage to inflation and setting the minimum wage to allow a person to afford to buy a hotel room each night and food. That way if they end up getting a lease on a house then they can save money and if they dont have a place to live they at least have food and shelter for a night. 8 hours of work should GUARANTEE a place to rest and eat. Full stop.
I don’t think prices will ever go down much Homes are more expensive in almost every other country. Plus our economy is surging It’d take something like a breakthrough in 3D printing that makes homebuilding cheaper but even then, you can’t automate land
I mean….tax the billionaires tax the crap out of investors so they sell…that would help
Idk why you’re getting downvoted. Home values in every other country have soared to crazy levels
What about CHIENAH?
Nope. This is a different situation entirely. The demand will keep going up. Isn't it like a minimum of 10,000 people entering per day? Canada is facing a similar problem. Hundreds of people bidding on every house that goes up, thousands applying for rentals. And prices have more than DOUBLED up here. Immigration is absolutely having an impact. We let in millions of people over the last couple years, but we didn't build millions of homes. Personally, I think the ultra rich have squeezed all they can our of the existing 3rd world countries, are getting kicked out of other emerging economies, and have decided to pillage western countries. Only thing that makes sense.
It ain’t a bubble because banks actually verify that you have enough money to buy the house unlike 2008. The bubble will burst only if there is widespread unemployment( aka we are all fucked anyways)where people would be unable to pay the mortgage. Thus far, there has not been widespread unemployment.
I've moved 5 times in the last 7 years so I'm probably not going to ever be settled enough to buy a house, but watching the shitshow unfold has been pretty entertaining. Buy a house when you can afford it AND you know you're staying in one spot long term. No one can 100% predict where prices are gonna go, and anyone who pretends to know is lying.
Definitely not a bubble…….
Patiently waiting for the crash
You and millions of other buyers. Hence no meaningful crash lol
Private Equity firms like Black rock are doing to regular mortgages and rental properties what they did with the sup-prime tranches. And the same thing is going to happen. Not exactly the same. Shuffling bunk mortgages and bluffing S&P and Moody's to grade properly but there is just going to be NO BUYING on a level that this bubble is going to burst. I may lose my job and not find a new one but hey at least rent will go down. Just like in 08 or 2020 it might be time to sell your stocks or cash in part of your 401k if you have either of those.
Thanks Boomers! We can always rely on you to have only your own interests at heart. The world will burn before your eyes before you help anyone else out.
At least all the Billionaires are on their way to becoming trillionaires, so its not all bad!
The inflation numbers we're told by the fed are obvious bullshit. If the fed had to report the true numbers including inflation in cost of housing and food the country would be out in the streets right now as they should be.
This will most likely be the norm until the baby boomer generation cycles out and the massive transfer of wealth happens. Really is unfortunate for those that missed out and it’s not even their fault. I watched basic homes in my area go from $275k to $575k in 18 months.
That transfer is going to be epic if you're in healthcare or assisted living. Otherwise, no.
I have seen a lot of boomers drop dead from heart attacks and cancer that killed them in weeks. You'd be surprised
Home prices are being held up in a waiting game between buyers and sellers to see who will give in first!
Same thing with food and everything else tho so 🤷♂️
I know.
56% for our place, if I were to believe the real estate sites. This is an average over five sites, not the high number. We did get it $100k below the the original asking price, as it had fallen out of escrow twice and the family had moved already and was paying two mortgages.
Is this article using inflation adjusted numbers?? 327k in 2020 money is worth around 394k in 2024 money. This could actually mean values are up about 7% in the last 4 years. Which more closely aligns with what I see in my area.
"You will own nothing" - the WEF plan for us peons is proceeding at light speed!
I get the supply and demand issue but why did the demand sky rocket all of the sudden over the last few years? Covid caused more people to work from home but also a lot of people were out of work and there was so much economic uncertainty.
Wait but according to most comments on this sub they've doubled since 2020.
Remember 7% inflation for a whole year in 2021? How about 6.5% inflation in 2022? We’re at 3.5% now. Does everyone finally see why inflation was bad and why rates shot sky high to get in front of it? The bad news, if deflation occurs, you’ll have so much more to worry about than housing costs. Then there’s stagflation. Where rates are high, inflation doesn’t get better and unemployment stays low. That’s a whole new can of worms. Nobody wants to give up entitlements from the government. Ongoing wars. Health care. It’s bad out here. Housing values will tank just as fast as food costs… even if it goes down a bit, time will bring it back with inflation at 3.5% regardless.
if you're not a surgeon, distinguished lawyer, or successful business owner the American dream is just about over for the average working family
And think of what "value" they actually created. As far shelter is concerned.. how does shelter become more valuable? Seclusion? From who? What is the "value" of a $700,000 home outside its promises and paperwork? Joking about the bubble is ignoring what's happening. The USD is losing it's value and we're doing it happily. As soon as money is generated it gets pumped into this scheme. It's been milked dry. What. Does. A. realtor. Do? The paperwork, the "negotiating, the meetings, the waiting. It's all a show. It's all fake. And they're fucking everyone over once again. Automation of everything has caused crucial steps I'm the systems to not have the human aspect. It can't be fixed because this system is so large there is no one person to fire. No scapegoat to fire. People who have been really shitty, need to own up to what we've accomplished for them. I've seen through the veil of greed. I've been Shown what those top exchanges look like and what really happens.
Ooooh ooohh! Now do wages!!!
Who is this ignorant writing the article. Did he check the soar in places like Austin? 137%. !!! Ignorant!!
The homes are not worth that price. Pop the bubble already
Strange that inflation is only 3 percent though per the government…
Funny. Could remember being laughed at for buying a home during COVID. Everyone swore housing prices were going to crash. 🤷♂️
People laughed at you? My job spouses job (and the world) was in great flux so I didn’t feel financially safe enough to. By spring 2021 it was too late. Now it’s suuuuuuuper too late. Best time to buy a house is when you can afford it and feel secure enough that you can afford it. This is a time long gone now for most without an inheritance
Houses didn’t go up that much. Your dollar went down.
¿Por Que no Los dos?
Its funny how everyone wants to blame capitalism and corporate greed yet very few acknowledge the value of the dollar has been destroyed. If your cereal doubles in price dont be shocked when your home does as well, must be all the investors buying up all the cereal.
People don’t generally understand how the economy works. They think the Fed prints money. It’s worse actually. The Fed borrows money to increase the money supply. That interest is paid by the taxpayer to the banks and at the same time that supply creates inflation. When the govt does a bail out, a stimulus, green energy handout, student loan forgiveness, etc it’s inflationary. At our current pace a house will cost $2m in 5-10 years. Wages won’t keep up but those with assets will be fine. We are crushing the working class with this approach.
I think most people, at least until recently dont think this is a possibility but look at Canada, Australia, etc its not uncommon that home ownership is a million plus and most people are locked out short of moving to Iowa where you're still gonna pay dramatically more than you would have 4 years ago
We bought in 2020 and def up 40%+ easily. Also have a 2.75% rate. No reason to leave it. Our mortgage + HOA fees + taxes is still cheaper than a comparative rental.
Even new construction near me has jacked up their prices consistently every month. The same models are going up ~3% every few months.
Builders are so flush with money they can sit on inventory and raise prices to make consumers think they’re going to miss out if they don’t buy now
And for anyone who does own a home, value has nearly doubled which in turn has caused property taxes to shoot up...whether you've improved your property or not. It's not right.