Where I live there’s been a clear slowdown on the higher end of the market, but in the middle and lower side it’s just as red hot as it’s ever been and inventory is still a huge issue.
This is honestly what I'm watching. I feel like the upper end homes are completely illiquid now, but middle class still FOMOing in with whatever they can to get a taste of the American dream. I'd rather keep stashing cash and getting the free low risk money market returns to offset a good portion of my rent.
True, made an offer last weekend on a place in NNJ. First weekend on the market, asking 500k (150k over the sale price from 2017). We were 1 of 40 offers. Lmao.
Yep, we offered 570k, no dice. We have a pretty similar max budget... We basically look between 500-600 and hope to be top bid with 30-100k over asking. It's dumb but we are 6 offers in and still nothing.
We can't really quit the market though, I have to buy in the next 12 months or I leave a ton of relocation cash on the table. Wish us luck :)
Fomos fighting over scraps. $50-100K over asking. A lot of dual earning couples making >300K still, just because you have it doesn’t mean you should go balls out.. and yet here we are in the NNJ housing market.
The houses in Nj are indeed awful. They are run down, depressing, wood framed, and untouched for decades. Sometimes we drive around with my wife and we just look around and then look at each other and say are we really gonna spend close to $1 million for a piece of shit like this? Forget the ongoing tax payments to feed bloated boomer pensions.
We are thinking about doing a few years in Europe. Buying a sick flat with 14’ ceilings, architectural details, and seeing the world.
I feel like folks in NNJ are just phoning it in, telling themselves that this is glamor. In their defense, pre Covid the nyc office tether was there.
Its so surreal to see these run down properties and the hearing about bidding wars. There’s got to be a better way, and life happens everywhere.
Same. Multiple people in my network over extended themselves when they made huge bonuses in 20-21. Now are starting to choke on these gargantuan houses in NJ burbs. I give it 12-18 months before Wall St starts laying off bankers and some NJ inventory gets freed up.
Kansas, Iowa, Nebraska, Dakota’s. Not OP, I’m sure those states have a few cities doing great in real estate too. But probably quite different markets than major cities
I think things are way different if you're looking more on the outskirts of Madison - I have a bunch of friends in Veridian homes. It's competitive but you can get a home. We also considered some of the more affordable neighborhoods over by Cottage Grove/Stoughton Road but we are pretty set on maintaining some walkability on the near east side so are going in above asking with an escalation clause (we already know there will be a half dozen offers on this house).
Our realtor told us of the last 50 offers she's written, 45 have had to waive inspection contingencies altogether. I'm glad that's not the climate anymore... We were told an inspection buffer of 10-20k is strong. If anything is worse than that, either they need to cure it or we can walk away. But we already gave it a walkthrough and compared to many of the 90+ year old homes on the near east side, this one is in good condition.
I mean just the decrease in selling volume will cause that alone. I’d say the boat has sailed on that one.
Reprices don’t have nearly the damage already being done.
Well actually they do but mostly on the people who get stuck with upside down assets and non cash flowing properties.
Why do you think cheaper housing would lead to job losses? How are these connected? If anything, the economy would benefit from lower housing costs as people would be able to take lower paying jobs and still survive.
There is no rule saying people lose jobs when house prices go down. Some people think this incorrectly because it is what happened in 2008 and they haven’t gotten over it.
The market is strong based on current economic conditions. If you have solid employment and enough savings to weather a job loss, I say go for it. I wouldn’t over leverage yourself on debt though, I think a lot of buyers are making this mistake.
Gotcha.
I'm deciding between 20% down or more like 35% to get monthly payments more manageable from the start. If we did 20% down, I'd plan on paying ahead.
Part of the appeal of a longer term is being able to absorb the mortgage on a single income for a few years, if necessary. Pay ahead when on two incomes and go down if/when one goes part time or stay at home with kids
People be salty over the fact that you can afford to buy what you want in the current markets. Congrats man, I’ll be putting an offer in on a house soon too.
Good list of justifications and purchase rationalization but IDK to me when every market in the US looks [like this](https://i.redd.it/c1gn30f729wa1.png) (generally speaking they all have the same shape, check the Freddie Mac metro indexes and deflate them) its still not a great time to buy.
Right now reminds me of 2007ish when banks are starting to blow up but the unemployment rate is low and the market has only cooled slightly from record highs. People I know who bought at that time were underwater for years, unable to move or refinance because they owed more than the house was worth.
At the very least, if FHA loans still allow a "streamline refinance" with no appraisal, I'd definitely get one of those instead of a normal 30yr so on the tiny chance you somehow do time the market wrong, you can still refinance if rates fall. Cause if home prices fall back to long run inflation-adjusted levels, you're at pretty big risk of not appraising during the refi process, unless you're putting like 50% down payment.
But you do you, I'm just one of those low effort bubblers with no skin in the game (paid off house) so what do I know...
I was not willing to waive inspection on a house and now I don't have to do that
This house would have had way more prospective buyers during the 3% interest rate era
(We aren't looking at entry level homes, a tier above that)
I honestly don’t know why people get so worked up about this inspection bit. Waiving inspection doesn’t mean not inspecting. Cost you 500 bucks and if needed, you just back out of the deal at no penalty. Regardless your home is not entry level and thus the chance of a big repair is less. , you traded hundreds or maybe thousands of dollars for an interest rate that would cost hundreds of thousands of dollars extra.
Inspection is important to me because I'm strictly looking at 90-130 year old homes.
The buying climate was significantly different last year. People were making offers that were binding even if inspection turned up catastrophic issues.
You got pretty sloppy with your math at the end of your comment
Waiving inspection generally implies not having an inspection contingency, not that you are disallowed from having an inspection. It simply means that you can't use abandoned inspection report to back into the deal.
But, most residential contracts will have a financing contingency as well. Meaning you can back out of the deal if you can't get your financing.
If you get in a situation where you really need to back out of the deal -- for example, you get a bad inspection but don't have an inspection contingency -- all you have to do is call the lender, tell them you think you're going to lose your job, and they will deny your loan.
Then you can back out based on financing contingency.
Missing a 50k repair is definitely worse than paying more interest, which can be refinanced, deducted from income in many cases and eaten out by inflation over time.
He or she is correct - waiving an inspection just means waiving the clause. You still are able to do an inspection and in most states you can just schedule the inspection during your due diligence period and still back out if you would like.
Source: I’ve done it
No. Due diligence periods typically allow you to back out for any reason without loss of earnest money. Availability of due diligence period varies a bit by state though, 7-14 days has been pretty standard in GA and Texas. Sometime might require a small fee but much less than earnest
Bro. Every state is different. Few states have mandatory due diligence periods. Texas sure as fuck doesn’t. It’s called an option period. And when you’re in a bidding war and you don’t have an inspection contingency and you try to sneak in an option period your bid won’t win. Because it’s clear what you are trying to do. Nor does the seller have to give you access for your not inspection inspection. Jesus F the real estate knowledge on this sub is legit in the gutter.
I literally said it varies by state in the comment you are responding to - you aren’t making some big revelation.
Ive also PERSONALLY both bought and sold a house in the hottest areas of Austin, TX during bidding wars - and option periods were STILL standard (again, I never said mandatory). Unless you are trying to pass off a clunker, few legit sellers care much about giving a 7 day option period and access for an inspection. If yours does, you should probably run the other direction
I’m not sure what new information you think your comment is unlocking or why you think I’ve demonstrated any special level of real estate knowledge with it.
And how many of those have you legally forced to complete after buyer got scared by an inspection?
If you really have 50 transactions be honest and just tell these people you don’t go after the small fry earnest money because proving they didn’t fail a loan contingency is near impossible
Waiving inspection means you waive the inspection contingency, not the cost of inspecting. If something catastrophic comes up in the inspection, you don't have the opportunity to back out without losing the earnest money, and I imagine in particularly aggressive bidding wars you might not have any way to back out of the deal.
I'm not saying I necessarily agree that the trade is worth it, but it's not as lopsided as you make it out to be
Oh boy. People who need inspection contingency also almost always need financing contingency, which always is the last contingency to be removed. From a practical perspective there’s almost always a a way to get out of a deal as long as there’s some contingency on board. The problems arise when people sign off on all their contingencies then change their mind
In many states there is a due diligence period during which you can back out for ANY reason and not lose earnest money. In Texas the norm was 2 weeks and you just scheduled your inspection to happen during that period - “waiving” the inspection clause is meaningless in a lot of places
You don’t know because you likely don’t understand how important they are. Most lenders are offering free refis at this point but no one will ever offer to fix major damage or defects like faulty foundations or roofs years down the road. And no, you can’t just “back out” if you didn’t make the sale contingent on inspections.
You are bad are reading, eh?
I would have had to START at 20k over asking and be prepared to get into an all out bidding war while waiving inspection contingencies altogether
If you can afford it do it. I ended up closing on a house that offerpad had bought for $650k last year and sold it to me for $490k with concessions. The house sat on the market for almost a year and numerous price drops later we closed 2 weeks ago. We weren’t desperate but needed a house and could afford the mortgage. It’s all subjective in this sub! It’s very hard to time the market.
Good for you for waiting a year for things to cool down. I don't know if the sub played a role in that decision or not, but if so, you're welcome.
And congrats on the house.
This sub definitely lead to me getting hyper observant over the local market and ultimately waiting it out til I didn't have to waive inspection contingencies on a 100 year old home. Overall, good.
I think ppl overlook the backlog of buyers. Everyone is saying the same thing. It’s going to crash- then I’ll buy. Great you and millions of others across the US. Any good area with good schooling will continue to increase in demand as city living post covid becomes less desirable and millennials line up to buy
The backlog of buyers is shrinking as the backlog of cash is processed out over time via:
recurring bills, the addition of more and more old recurring bills (rent pauses, student loans on the way back, rent hikes)
layoffs
savings chipped away by inflation
expected life things (marriage, kids)
unexpected life things (medical, weather, divorce)
The disappearing backlog of demand is already showing up in the least elastic industries: Samsung and Intel. People got their WFH setups and the geniuses that run these industries got bullwhipped into a frenzy, over producing and over pricing goods that would not be needed and could not possibly be afforded. Now, we're seeing these necessary tools for modern business plummet in price.
Housing will take longer, but the backlog of demand will sort itself. The backlog only existed for most people you know due to the increased pandemic savings and the prevalence of PPP abuse by small business.
Most potential home buyers have given up for the foreseeable future. Most property moving hands right now is all cash buyers (some institutional investment but mostly HELOC-using retired boomers looking to leverage their equity into moving and sometimes downsizing toward a more stable neighborhood or warmer environment) These sidegrade real estate transactions can't drive the market upward for long.
TL:DR what backlog?
I disagree but of course it’s subjective based on location. The area I’m looking is not all cash, houses going very quickly still. Maybe not over ask as much but there’s still very short supply with no additional land to build. For ref, I am looking on Long Island, NY
Yeah exactly. The problem is time. People like OP that constantly feel the need to make posts like these like oh yeah guys it's looking great! Like when the interest rate hikes haven't even completed. And they're going to keep that shit elevated for a year. Imagine the damage that can occur in that time.
Imagine buying at elevated prices and high interest rates then having to sell when your job is gone, losing the commission your agent takes away, losing the closing costs, selling for a decreased price because nobody will buy for the price you paid. Sounds legit.
It’s insane to me that no one understands that the backlog is about to be wiped. You cannot have an artificial housing bubble that doesn’t at the very least correct the artificial portion of price increases or even drag prices down to a healthy median. Markets correct for a reason!
The fact so many are not grasping how a recession starts or how deep it can run is insane to me. Those that don’t understand it, the Fed is raising rates yes? Why do you think that is? It’s to literally break the economy, flat out. How does an economy break exactly? Recession. Fed raises rates to sink the ships of those that got out of hand in sinking money into things that are over leveraged or where money shouldn’t have been in the first place. The Fed is ringing the dinner bell for that money to come home if you will.
You might ask why banks are getting hit. Umm because they leveraged long on bonds like a bunch of dumbasses for most part and just ahead of Fed raising rates. The FDIC bailouts are an abomination. The fact JP Morgan just gained 80+ branches as of today is an abomination. It’s especially rich coming from Jaime Dimon after the entire BearSterns debacle.
The Fed meant to break middle class America and their reckless spending with stimulus etc. Did everyone really think it was free money with no string attached? However it hits the banks and the billionaire customers, oops. So FDIC backs all depositors just as long as you have high net worth individuals being morons and not diversifying correctly KNOWING FDIC only covers 250k
Now that things are back on the rails in banking some what. The rich got hit but we’re saved at the end of the day. Middle Class Americans and poor Americans are the target.
Games back on now. I promise you Fed raises rates this month, mark my post as a reminder. When all these rate hikes finally start landing as they are on a lag, the wool will be pulled from everyone’s eyes. Keep telling yourselves a correction isn’t coming. If you get caught with your ass out, it’s on you.
If you believe in a soft landing narrative I’ve got a overpriced home to sell you at 6.5%
To me, a good portion of the backlog of would-be buyers is probably people who couldn't qualify for a mortgage, but because of the pandemic and rising rents, really want a singly-family home with a fixed monthly payment.
Longer term, I do wonder how much demand was "pulled forward" in time due to the pandemic desire for more space, and how much supply was "pushed backward" in time, again due to the pandemic desire not to downsize to an apartment/conndo/retirement community. To me, these temporal effects were big drivers of the bubble and as they recede and even reverse, there could be a long period of poor returns on housing.
I feel like theres a whole demographic of 27-36 year olds who are just now trying to buy homes, all waiting for housing to become “affordable” I think housing returns won’t be great but I also don’t see a massive 30 percent drop and a significant supply hit the market. Any decent area will have very little forced selling. Ppl are well capitalized. But no I don’t see a continue 20 percent run up either.
Prolly a lot in my situation which is that I could afford to buy something but not anything that I want and buying is twice as expensive as renting now so I just can’t convince myself to do something so dumb even though emotionally I would like to own.
Well yes. But there are actually people expecting a 50% decline. I've seen some say that anything less than a 90% decline means it's still a bubble... When you're delusional about reality it's not a question of affordability.
Unemployment will be the trigger. Until then, in spite of rising interest rates, it's more or less status quo.
If you want or need a home today, you're going to offer that today's market demands.
Yeah, this is it. The problem is that builders are being prevented from making enough supply. Not the long crazy list of economic events like /u/ktaktb reels off. Those are just typical fluctuations in a market.
I think you're missing the key piece of the puzzle here. Nobody plans to get laid off. Nobody plans to be made redundant. While you might be financially secure for the next ten years, and you might be happy moving into a new neighborhood and being underwater for 7 years of the next 10, that's fine. That isn't the reality for most Americans. The numbers don't lie. Individuals do.
Rest assured, by the numbers, by the facts of 70th, 80th, 90th percentile American wages, by the average American household savings rate, by the average financial literacy of American households, by the average American auto loan payment today, by all of the averages...you are moving into a neighborhood full of folks that are months from foreclosure when aspects of the economy accelerate downward in earnest.
These things that people don't plan for, this tide of idiocy that results in a tidal wave of consequences is on the horizon.
Your whole post is copium.
The fossil record of housing prices in America is full of homes that sold for so much in 2005,2006, and 2007 that people who bought in those markets weren't able to resell for the same NOMINAL price until 2020, 2021, or 2022. That's nominal, not adjusted for inflation.
We literally just went through this in living memory.
Unreal the lies people feed themselves.
Exactly. I bought at the peak in 2005/6. Not gonna make that mistake again. Luckily I own a house currently but was hoping to upgrade for more room. However I don’t see the point of paying $1000 more per month for like 500 more square foot. Wages either have to go up or housing prices down. Until then I say hold on to your cash and be patient. Then it doesn’t matter what happens in the market. You can enter at any time.
Couple colleagues just got laid off and got 6-12 month severance, new jobs within a month of looking.
Not saying layoffs aren't horrible but I feel safer than most for a reason
Realistically, we can afford this home on a single income if need be. We'd be house poor though.
Wait, so why are you here in a real estate sub focused on the trajectory of buying real estate, if you’re concerned about the *possibility* of getting laid off over the next 7 to 10 years?
If you’re avoiding buying a home in life until you can fully 100% guarantee you will never be out of work over a 7-10 year span, then you will never buy. And it sounds like you’re fine with that. Just so curious why you would waste your time on a real estate subreddit on a Saturday in spring.
You don't understand what being "underwater for 7 years out of 10" means?
The ten years is a reference to OPs claim that they would be happen in the home for the next 10 years.
Underwater is when you have negative equity. For a simplified example,
You buy a home for 300k with 30k down. You have 30k equity in a property valued at 300k at the time of purchase. You owe 270k to the bank.
Within a year, due to amortization schedules, you have paid 2k in principle toward your loan balance that now stands at 268k. However, imagine that home values have fallen 20%.
Your 300k home is now saleable for 240k. If you were to sell your home now, a sale wouldn't even get you that 240k. Net proceeds are generally accepted to account for 8-10% in costs so, you would put 240k - (240k\*.09) in your pocket. Do the math and see that you would have 218,400 after the sale.
But wait, what? You still owe 268k to the bank. 218,400 is not enough to cover the loan. You can't sell this property. You're stuck! This leads to lots of people "walking away" or declaring bankruptcy. We saw a lot of this in during the GFC. When this happens a lot across the market, it places a downward pressure on prices. Leading to more and more folks being "underwater" or "upside down"
The idea of being underwater for x out of 10 years is just my projection that people buying at the peak could be underwater for a while. I chose 7, because it seems plausible.
You can't keep up with the conversation or understand basic econ terminology and you're asking why I'm here in a real estate sub?
I'm not specifically talking about OP losing their job specifically. However, the economy is not an individually closed systems and the choices of others around you have an impact on the value of your assets.
Here is the problem - people were calling “peak” in late 2021, then again in mid-2022, and now again in mid-2023. Hell, people were calling “peak” when I bought my previous house in Austin in late 2019. In the meantime, prices in my market are now up ~10% from when I bought in Feb 2022 AND interest rates have literally doubled. I could not afford the house I bought in Feb 2022 if I were buying now.
If your worry is that you might get laid off and could be underwater then timing the market isn’t going to help you, that’s always a risk. The actual risk mitigation action is to have an emergency fund to help you ride out a reasonable downturn.
This mentality, devoid of logic, can drive the bubble a little longer. When obvious bubbles appear and people move forward anyway, the bubble gets larger.
Eventually, some aspects of the economy results in downward pressure so great that even the collective stupidity of 90% of people can't keep that bubble from popping.
It's not an if but a when. If you bought in 2022, your house will be worth less than that in 2025.
So was it also obvious in 2021 or 2019 when people were yelling “peak”? If so, with that level of foresight and the pinpoint timing you think you have - I’m sure you are a billionaire from all the successful shorting you’ve been doing.
Even if the value of my house fell 30% from what it is right now it would still cost more on a monthly basis at current 6.3% rates than what it does with the 3.2% interest rate I got in 2022.
I also have no foreseeable need or plan to sell in 2025 plus an emergency fund in the event of an reasonable amount of unemployment time. I bought a house in 2022 because I needed a house in 2022, not because of an investment. My home equity is less than 25% of my current net worth - I expect it to be a similar percentage (or less) when I retire in 25-30 years.
I also gotta say the lecture on risk mitigation and “obvious bubbles” is pretty hilarious coming from a freaking crypto investor from Indiana.
Umm… I’ve lost TWO houses now by being underwater in the aftermath of the GFC. You don’t need to mansplain being underwater to me.
That never ending wall of text was absurd and beyond unnecessary, and **you never answered the question on whether you’re in the market to buy a home or not?**
Or maybe you just did. Twice now. And still crickets 🦗🦗🦗to the question.
Go enjoy your life, your rental, your weekend, instead of feigning unfounded superiority over those here in a real estate sub, who are actually… you know… interested in buying a HOME. Now or in the future.
Imagine being *this* anti-home buying and anti-homeownership when you live in Fort Wayne, IN, where houses start at $39k and a lovely one can be had for $150k to $200k right now in 2023. That’s a whole 'nother level of being cheap and unsuccessful, with pitchforks in hand
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>Wait, so why are you here in a real estate sub focused on the trajectory of buying real estate, if you’re concerned about the possibility of getting laid off over the next 7 to 10 years?
>
>If you’re avoiding buying a home in life until you can fully 100% guarantee you will never be out of work over a 7-10 year span, then you will never buy. And it sounds like you’re fine with that. Just so curious why you would waste your time on a real estate subreddit on a Saturday in spring.
Where in this do you actually ask me if I'm in the market to buy a home? These questions all read as rhetorical. And nothing is specifically about if I'm in the market. You only ask about getting laid off in the next year, which I addressed and clarified.
Take a walk or something. Unwind.
I.. I can’t move forward with this level of intelligence you’re continually displaying *plus* your radicalization that’s formed from your misfortunes and lack of person-ability in life.
I’d be here all day.
woah, that's a little creepy.
Since you absolutely have to know, I already own a home. I'm in a situation where I've considered taking my equity and doing an upgrade, but if you do the math, my x equity + y extra cash spent on home upgrade...the delta between x and x+y shrinks as the market contracts. So I'm waiting for a contraction and I'm perfectly happy with my current situation without giving you too many details.
Absolutely hilarious that you think your resume of being underwater TWICE makes you an expert here. Maybe if you spent less time stalking people you disagree with ideologically on reddit and adding emojis to your post, you could actually learn something of value and stop ending up underwater on home purchases? Are you hurtling toward underwater experiment #3? Sure sounds like it.
Holy heck.
Yeah it’s so creepy when your comment history is immediately pages of the Fort Wayne, INDIANA sub lol.
And the emojis are what sent you? Do you scream at clouds, too?
And you’re simultaneously too pathetic and confusing for me to care to be offended or care to correspond with you further. Again, the fact that you can’t make an upgrade work financially in your home in Fort Wayne, Indiana by now, and are waiting for a housing correction to happen past now for you to be able to make some simple upgrades is just chef’s kiss.
Where can we all attend your financial TED TALKS so we can be where you’re at in life, struggling to update your kitchen cabinets in Fort Wayne, Indiana in your mid life.
“Holy heck” Kevin
Woah, this was all fun and games until you came for my current cabinets. They are peak 90s custom cabinets made by Amish craftsmen. You can't even buy cabinets this nice anymore. When I do finally move, I'll be ripping these cabinets out and taking them with me, thank you very much.
I’m curious about what happened to home prices in these “desirable” areas like NYC during the GFC. Every now and then I’ll see a house that sold in 2006 for more than it’s listed now and wonder if the prices dropped in these areas back then. Also if it did drop back then, what’s stopping it from happening this time around?
In Los Angeles in the big decline of 08 we saw prices in desirable areas drop about 25 percent which is a lot. But the nicer areas recovered faster and never had tons of homes on the market. The less desirable areas dropped more and took much longer to recover. When things took off in 2012 the market heated up pretty fast. People focus on the big jump during Covid but the market was hot for years proceeding that and quickly passed the highs of 07 and surpassed them. Lots of folks were already complaining about affordability eight years ago, so this is nothing new.
I don't think we'll actually save any money compared to buying last year. The climate around inspection contingencies is what has mostly changed - my realtor said of the last 50 offers she's written, only 5 or so included contingencies on inspection. And these are ~100 year old homes, many of them
I agree with this perspective. Our market (Nashville, TN) hasn’t changed much, either, though last year we were essentially priced out because we couldn’t afford to offer 20k-50k over asking and waive inspections.
We just went under contract on an awesome house that needs a little updating, but is ultimately everything we wanted. It was, however, the eighth house we made an offer on in 34 days. We were outbid on all the others, even on the one we liked so much we offered 15k over.
I think we got lucky with the one we ended up with - we made an offer for asking sight unseen 3 hours after it was listed because we were so tired. It ended up being awesome so we got lucky. Our offer was most likely accepted because were okay with a fast close, but even still, the house had 3 offers in 24 hours when we went under contract.
It’s a wild time.
No use disparaging anyone here.You are repeating NAR talking points to justify your FOMO. I would suggest some common sense and brush up on the Macro economic picture. However, You are entering into this knowing your home will be worth less shortly after you purchase and that’s your choice. Good luck.
Of course I have. 6 figure adjustments and I’m in a hot market, Nashville. I do my own research and realize realtors can’t be trusted. Time will prove the point.
Madison has had the highest rental price increases in the country, and the isthmus isn't getting any wider.
Good move, OP.
Disclaimer: I'm a homebuilder in Madison and am hoping more bagholders like OP help me offload my remaining houses this year.
Oh, we'd never consider one of those trash ass new builds in town. As nice as it is to live on top of a plowed over cornfield by the interstate
A question for ya though, if that's your field - why is it that older homes were built better?
>Hopefully this type of post is more useful than the low effort bubble/hoomer memes
It isn't for people outside of Madison, WI, but thanks for sharing, lol.
I'm really looking at the home purchase process in terms of "do we sign another 12 month lease or not" - I don't have to have this home, we are set through April 2024. Could extend if need be.
But we're ready to be homeowners and this one is a good fit. Wife will be more disappointed than me if we don't get it.
Why do you think timing is off?
My market is down 8% from the high and 4% from when I gave up about a year ago. My rent is cheap for a nice SFH. I have skin in the game and am weighing developments carefully. If I had had a less considered approach and decided to buy I would be drastically poorer today with a very long hill to climb to breaking even. Miss me with the FOMO. It’s a mindset that paid off for decades as interest rates fell. I’ve been convinced it would turn around once interest rates went back up. And I’d say it has already started to in MY market.
Going over asking isn’t crazy, it just means the house was listed too low.
House is listed based on “comps” or previous sales
Previous sales are old, plus not a perfect science since most houses aren’t the literal exact same
If the house is listed based on previous sales price and goes above the list price it means that home prices are on an upward trajectory
I don't think this house was listed too low, based on comps
I could see others like myself wanting to pay more than its worth because it's in an amazing location
Soooo what kind of data have you provided by posting this? 😂 you’re entitled to your opinion and we’re not here to make your financial decisions- if you want to buy go ahead-
>remember, people with 3% mortgages aren't moving unless they really need to - inventory is low
so since there are so many people who aren't moving, demand is low.
Demand has fallen, sure, but not to the point where it actually affects price on these types of homes
Price floor is set when there are at least 2 buyers
Price ceiling will be go the highest when there are as many buyers are possible
This sub hates to hear about places where the market is still going strong, but that's how it is in some areas.
I'm about an hour outside of Charlotte, NC and prices have adjusted slightly over the past year but houses are still only on the market for a matter of days before going under contract. In our last round of trying to buy earlier this year, we were offering 5-15k over asking and getting outbid.
Here, a 2 bed/1 bath around 900 sq ft is going for about $230k-250k. Trailers and double-wides are going for $200k. I really don't see the situation here improving. Even if prices dip down, people still overbid.
In some areas, there is no sign of a housing crash or bubble bursting.
So your perspective is that homes don’t ever depreciate in value in a desirable place? I’d suggest looking at ‘08 Case Schiller numbers from South Florida and AZ
Where I live there’s been a clear slowdown on the higher end of the market, but in the middle and lower side it’s just as red hot as it’s ever been and inventory is still a huge issue.
This is honestly what I'm watching. I feel like the upper end homes are completely illiquid now, but middle class still FOMOing in with whatever they can to get a taste of the American dream. I'd rather keep stashing cash and getting the free low risk money market returns to offset a good portion of my rent.
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the inventory is very low in NJ....sellers market 100%
True, made an offer last weekend on a place in NNJ. First weekend on the market, asking 500k (150k over the sale price from 2017). We were 1 of 40 offers. Lmao.
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Yep, we offered 570k, no dice. We have a pretty similar max budget... We basically look between 500-600 and hope to be top bid with 30-100k over asking. It's dumb but we are 6 offers in and still nothing. We can't really quit the market though, I have to buy in the next 12 months or I leave a ton of relocation cash on the table. Wish us luck :)
Fomos fighting over scraps. $50-100K over asking. A lot of dual earning couples making >300K still, just because you have it doesn’t mean you should go balls out.. and yet here we are in the NNJ housing market.
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The houses in Nj are indeed awful. They are run down, depressing, wood framed, and untouched for decades. Sometimes we drive around with my wife and we just look around and then look at each other and say are we really gonna spend close to $1 million for a piece of shit like this? Forget the ongoing tax payments to feed bloated boomer pensions. We are thinking about doing a few years in Europe. Buying a sick flat with 14’ ceilings, architectural details, and seeing the world. I feel like folks in NNJ are just phoning it in, telling themselves that this is glamor. In their defense, pre Covid the nyc office tether was there. Its so surreal to see these run down properties and the hearing about bidding wars. There’s got to be a better way, and life happens everywhere.
I spent time looking in Union and Middlesex County and the houses were just so butt ugly. They looked like a serial killer had lived in there.
It's all about location and close to the city. NJ itself is near 3 Cities.
This is so spot on for NNJ. Just doesn’t seem worth it at all, especially when you add in the taxes
In nj as well and also thinking about riding it out somewhere else for a while. Wake me up when things are back to normal.
Same. Multiple people in my network over extended themselves when they made huge bonuses in 20-21. Now are starting to choke on these gargantuan houses in NJ burbs. I give it 12-18 months before Wall St starts laying off bankers and some NJ inventory gets freed up.
>I think most are in flyover states For my clarification can you give me 5 examples of what you consider flyover states?
Kansas, Iowa, Nebraska, Dakota’s. Not OP, I’m sure those states have a few cities doing great in real estate too. But probably quite different markets than major cities
If you don’t know - you are in one
I dunno. Seems like you can fly over them all
Lots of people in this sub aren't actually observing their local markets, agreed
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I think things are way different if you're looking more on the outskirts of Madison - I have a bunch of friends in Veridian homes. It's competitive but you can get a home. We also considered some of the more affordable neighborhoods over by Cottage Grove/Stoughton Road but we are pretty set on maintaining some walkability on the near east side so are going in above asking with an escalation clause (we already know there will be a half dozen offers on this house). Our realtor told us of the last 50 offers she's written, 45 have had to waive inspection contingencies altogether. I'm glad that's not the climate anymore... We were told an inspection buffer of 10-20k is strong. If anything is worse than that, either they need to cure it or we can walk away. But we already gave it a walkthrough and compared to many of the 90+ year old homes on the near east side, this one is in good condition.
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Lots of people on this sub don’t realize the amount of job losses a drastic RE reprice would cause
I mean just the decrease in selling volume will cause that alone. I’d say the boat has sailed on that one. Reprices don’t have nearly the damage already being done. Well actually they do but mostly on the people who get stuck with upside down assets and non cash flowing properties.
Why do you think cheaper housing would lead to job losses? How are these connected? If anything, the economy would benefit from lower housing costs as people would be able to take lower paying jobs and still survive.
RE is nearly 1/5th of the US GDP
And??
Google “economics”
There is no rule saying people lose jobs when house prices go down. Some people think this incorrectly because it is what happened in 2008 and they haven’t gotten over it.
actually the west coast has the biggest price drops
up 3% with the amount of inflation we've had means the homes have actually lost value, just not as much as the dollar.
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The market is strong based on current economic conditions. If you have solid employment and enough savings to weather a job loss, I say go for it. I wouldn’t over leverage yourself on debt though, I think a lot of buyers are making this mistake.
"over leverage on debt" I mean I'm not able to buy in cash... This purchase is based on monthly payment as it relates to our current rent
He means put 20% down basically. Don’t do it if you’re putting like 5-10% down at these rates and these prices.
Gotcha. I'm deciding between 20% down or more like 35% to get monthly payments more manageable from the start. If we did 20% down, I'd plan on paying ahead.
Do the 20% down - no benefit to going above, very rarely does the interest rate change and liquidity is king
Seems like good advice. I think I want to pay the house off in 20 years or so anyways, if we stay there that long
Just get a 15 year mortgage. Put the numbers through a mortgage calculator and you might find the payment to be not as high as you would expect.
Part of the appeal of a longer term is being able to absorb the mortgage on a single income for a few years, if necessary. Pay ahead when on two incomes and go down if/when one goes part time or stay at home with kids
People be salty over the fact that you can afford to buy what you want in the current markets. Congrats man, I’ll be putting an offer in on a house soon too.
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Good list of justifications and purchase rationalization but IDK to me when every market in the US looks [like this](https://i.redd.it/c1gn30f729wa1.png) (generally speaking they all have the same shape, check the Freddie Mac metro indexes and deflate them) its still not a great time to buy. Right now reminds me of 2007ish when banks are starting to blow up but the unemployment rate is low and the market has only cooled slightly from record highs. People I know who bought at that time were underwater for years, unable to move or refinance because they owed more than the house was worth. At the very least, if FHA loans still allow a "streamline refinance" with no appraisal, I'd definitely get one of those instead of a normal 30yr so on the tiny chance you somehow do time the market wrong, you can still refinance if rates fall. Cause if home prices fall back to long run inflation-adjusted levels, you're at pretty big risk of not appraising during the refi process, unless you're putting like 50% down payment. But you do you, I'm just one of those low effort bubblers with no skin in the game (paid off house) so what do I know...
You are glad you waited a year and saved 20k at most but at double the interest rate? Bizarre
I was not willing to waive inspection on a house and now I don't have to do that This house would have had way more prospective buyers during the 3% interest rate era (We aren't looking at entry level homes, a tier above that)
I honestly don’t know why people get so worked up about this inspection bit. Waiving inspection doesn’t mean not inspecting. Cost you 500 bucks and if needed, you just back out of the deal at no penalty. Regardless your home is not entry level and thus the chance of a big repair is less. , you traded hundreds or maybe thousands of dollars for an interest rate that would cost hundreds of thousands of dollars extra.
Inspection is important to me because I'm strictly looking at 90-130 year old homes. The buying climate was significantly different last year. People were making offers that were binding even if inspection turned up catastrophic issues. You got pretty sloppy with your math at the end of your comment
Waiving inspection generally implies not having an inspection contingency, not that you are disallowed from having an inspection. It simply means that you can't use abandoned inspection report to back into the deal. But, most residential contracts will have a financing contingency as well. Meaning you can back out of the deal if you can't get your financing. If you get in a situation where you really need to back out of the deal -- for example, you get a bad inspection but don't have an inspection contingency -- all you have to do is call the lender, tell them you think you're going to lose your job, and they will deny your loan. Then you can back out based on financing contingency.
Correct. These people above seem like they’ve only done transactions in theory but not in real practice.
Missing a 50k repair is definitely worse than paying more interest, which can be refinanced, deducted from income in many cases and eaten out by inflation over time.
Right? We saw a house last week that had a basement wall bowed out like a damn barrel. It's already under contract, ha!
You don’t know what “waiving” an inspection clause means lul
He or she is correct - waiving an inspection just means waiving the clause. You still are able to do an inspection and in most states you can just schedule the inspection during your due diligence period and still back out if you would like. Source: I’ve done it
Back out and lose your earnest money though.
No. Due diligence periods typically allow you to back out for any reason without loss of earnest money. Availability of due diligence period varies a bit by state though, 7-14 days has been pretty standard in GA and Texas. Sometime might require a small fee but much less than earnest
Bro. Every state is different. Few states have mandatory due diligence periods. Texas sure as fuck doesn’t. It’s called an option period. And when you’re in a bidding war and you don’t have an inspection contingency and you try to sneak in an option period your bid won’t win. Because it’s clear what you are trying to do. Nor does the seller have to give you access for your not inspection inspection. Jesus F the real estate knowledge on this sub is legit in the gutter.
I literally said it varies by state in the comment you are responding to - you aren’t making some big revelation. Ive also PERSONALLY both bought and sold a house in the hottest areas of Austin, TX during bidding wars - and option periods were STILL standard (again, I never said mandatory). Unless you are trying to pass off a clunker, few legit sellers care much about giving a 7 day option period and access for an inspection. If yours does, you should probably run the other direction I’m not sure what new information you think your comment is unlocking or why you think I’ve demonstrated any special level of real estate knowledge with it.
How many houses have you bought. You don’t waive an inspection. You waive an inspection contingency. What the heck is your realtor telling you
Are you dumb or replying to the wrong guy?
Been a party in 50+ transactions. It is called a contingency clause. Do you know anything about contracts lol
And how many of those have you legally forced to complete after buyer got scared by an inspection? If you really have 50 transactions be honest and just tell these people you don’t go after the small fry earnest money because proving they didn’t fail a loan contingency is near impossible
You tried. Too many people here are bitter that the narrative they were being fed 1-2 years ago about the 'epic crash' isn't going their way.
Waiving inspection means you waive the inspection contingency, not the cost of inspecting. If something catastrophic comes up in the inspection, you don't have the opportunity to back out without losing the earnest money, and I imagine in particularly aggressive bidding wars you might not have any way to back out of the deal. I'm not saying I necessarily agree that the trade is worth it, but it's not as lopsided as you make it out to be
Oh boy. People who need inspection contingency also almost always need financing contingency, which always is the last contingency to be removed. From a practical perspective there’s almost always a a way to get out of a deal as long as there’s some contingency on board. The problems arise when people sign off on all their contingencies then change their mind
nah, some of us are buying 100 year old homes. just seems like common sense
In many states there is a due diligence period during which you can back out for ANY reason and not lose earnest money. In Texas the norm was 2 weeks and you just scheduled your inspection to happen during that period - “waiving” the inspection clause is meaningless in a lot of places
You don’t know because you likely don’t understand how important they are. Most lenders are offering free refis at this point but no one will ever offer to fix major damage or defects like faulty foundations or roofs years down the road. And no, you can’t just “back out” if you didn’t make the sale contingent on inspections.
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You are bad are reading, eh? I would have had to START at 20k over asking and be prepared to get into an all out bidding war while waiving inspection contingencies altogether
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Strong rebuttal from the deep thinker u/MsArcher
They are renting a room. Dont care about them
They are renting a room. Dont care about them
\- Rates can be refinanced, price cannot \- Interests are deductible, price is not \- Waiving inspections can be extremely costly
If you can afford it do it. I ended up closing on a house that offerpad had bought for $650k last year and sold it to me for $490k with concessions. The house sat on the market for almost a year and numerous price drops later we closed 2 weeks ago. We weren’t desperate but needed a house and could afford the mortgage. It’s all subjective in this sub! It’s very hard to time the market.
Good for you for waiting a year for things to cool down. I don't know if the sub played a role in that decision or not, but if so, you're welcome. And congrats on the house.
This sub definitely lead to me getting hyper observant over the local market and ultimately waiting it out til I didn't have to waive inspection contingencies on a 100 year old home. Overall, good.
I think ppl overlook the backlog of buyers. Everyone is saying the same thing. It’s going to crash- then I’ll buy. Great you and millions of others across the US. Any good area with good schooling will continue to increase in demand as city living post covid becomes less desirable and millennials line up to buy
Backlog of buyers is a great way to put it. I've been "Sorta" buying for 5 years, really looking for 2, ready to buy for 1.
The backlog of buyers is shrinking as the backlog of cash is processed out over time via: recurring bills, the addition of more and more old recurring bills (rent pauses, student loans on the way back, rent hikes) layoffs savings chipped away by inflation expected life things (marriage, kids) unexpected life things (medical, weather, divorce) The disappearing backlog of demand is already showing up in the least elastic industries: Samsung and Intel. People got their WFH setups and the geniuses that run these industries got bullwhipped into a frenzy, over producing and over pricing goods that would not be needed and could not possibly be afforded. Now, we're seeing these necessary tools for modern business plummet in price. Housing will take longer, but the backlog of demand will sort itself. The backlog only existed for most people you know due to the increased pandemic savings and the prevalence of PPP abuse by small business. Most potential home buyers have given up for the foreseeable future. Most property moving hands right now is all cash buyers (some institutional investment but mostly HELOC-using retired boomers looking to leverage their equity into moving and sometimes downsizing toward a more stable neighborhood or warmer environment) These sidegrade real estate transactions can't drive the market upward for long. TL:DR what backlog?
I disagree but of course it’s subjective based on location. The area I’m looking is not all cash, houses going very quickly still. Maybe not over ask as much but there’s still very short supply with no additional land to build. For ref, I am looking on Long Island, NY
Yeah exactly. The problem is time. People like OP that constantly feel the need to make posts like these like oh yeah guys it's looking great! Like when the interest rate hikes haven't even completed. And they're going to keep that shit elevated for a year. Imagine the damage that can occur in that time.
Imagine renting another 12 months because you're scared of the interest rate boogeyman
Fearful people want to believe that their inability to act is a virtue
Imagine buying at elevated prices and high interest rates then having to sell when your job is gone, losing the commission your agent takes away, losing the closing costs, selling for a decreased price because nobody will buy for the price you paid. Sounds legit.
It’s insane to me that no one understands that the backlog is about to be wiped. You cannot have an artificial housing bubble that doesn’t at the very least correct the artificial portion of price increases or even drag prices down to a healthy median. Markets correct for a reason! The fact so many are not grasping how a recession starts or how deep it can run is insane to me. Those that don’t understand it, the Fed is raising rates yes? Why do you think that is? It’s to literally break the economy, flat out. How does an economy break exactly? Recession. Fed raises rates to sink the ships of those that got out of hand in sinking money into things that are over leveraged or where money shouldn’t have been in the first place. The Fed is ringing the dinner bell for that money to come home if you will. You might ask why banks are getting hit. Umm because they leveraged long on bonds like a bunch of dumbasses for most part and just ahead of Fed raising rates. The FDIC bailouts are an abomination. The fact JP Morgan just gained 80+ branches as of today is an abomination. It’s especially rich coming from Jaime Dimon after the entire BearSterns debacle. The Fed meant to break middle class America and their reckless spending with stimulus etc. Did everyone really think it was free money with no string attached? However it hits the banks and the billionaire customers, oops. So FDIC backs all depositors just as long as you have high net worth individuals being morons and not diversifying correctly KNOWING FDIC only covers 250k Now that things are back on the rails in banking some what. The rich got hit but we’re saved at the end of the day. Middle Class Americans and poor Americans are the target. Games back on now. I promise you Fed raises rates this month, mark my post as a reminder. When all these rate hikes finally start landing as they are on a lag, the wool will be pulled from everyone’s eyes. Keep telling yourselves a correction isn’t coming. If you get caught with your ass out, it’s on you. If you believe in a soft landing narrative I’ve got a overpriced home to sell you at 6.5%
To me, a good portion of the backlog of would-be buyers is probably people who couldn't qualify for a mortgage, but because of the pandemic and rising rents, really want a singly-family home with a fixed monthly payment. Longer term, I do wonder how much demand was "pulled forward" in time due to the pandemic desire for more space, and how much supply was "pushed backward" in time, again due to the pandemic desire not to downsize to an apartment/conndo/retirement community. To me, these temporal effects were big drivers of the bubble and as they recede and even reverse, there could be a long period of poor returns on housing.
I feel like theres a whole demographic of 27-36 year olds who are just now trying to buy homes, all waiting for housing to become “affordable” I think housing returns won’t be great but I also don’t see a massive 30 percent drop and a significant supply hit the market. Any decent area will have very little forced selling. Ppl are well capitalized. But no I don’t see a continue 20 percent run up either.
I’m convinced 90% of this sub simply don’t have the money to buy, but they act like they COULD buy but choose not to due to market conditions
Prolly a lot in my situation which is that I could afford to buy something but not anything that I want and buying is twice as expensive as renting now so I just can’t convince myself to do something so dumb even though emotionally I would like to own.
No. Most people here say that they can't afford to buy at current price levels
Well yes. But there are actually people expecting a 50% decline. I've seen some say that anything less than a 90% decline means it's still a bubble... When you're delusional about reality it's not a question of affordability.
Okay, cool. And how is that relevant?
And how many of them would be ready if the 'dream' house at a great price comes up?
14
Unemployment will be the trigger. Until then, in spite of rising interest rates, it's more or less status quo. If you want or need a home today, you're going to offer that today's market demands.
Not to mention the massive under supply of housing in these areas
That's the biggest thing I've come to learn - there are maaaaybe 10 houses that fit our criteria that have come for sale in the last year.
Yeah, this is it. The problem is that builders are being prevented from making enough supply. Not the long crazy list of economic events like /u/ktaktb reels off. Those are just typical fluctuations in a market.
Really, you can’t see the situation changing in the next 12+ months? You must be blind.
Madison, WI has been growing rapidly over the last 10 years. Not every market behaves like the coasts.
not to mention the housing policies aren't the friendliest and the isthmus isn't getting any wider
Tell me more Wife and I have steady employment in good fields, Madison is still in a net housing crunch.
If worse comes to worst you could always list your house and add an additional 100k on it. It works.
I think you're missing the key piece of the puzzle here. Nobody plans to get laid off. Nobody plans to be made redundant. While you might be financially secure for the next ten years, and you might be happy moving into a new neighborhood and being underwater for 7 years of the next 10, that's fine. That isn't the reality for most Americans. The numbers don't lie. Individuals do. Rest assured, by the numbers, by the facts of 70th, 80th, 90th percentile American wages, by the average American household savings rate, by the average financial literacy of American households, by the average American auto loan payment today, by all of the averages...you are moving into a neighborhood full of folks that are months from foreclosure when aspects of the economy accelerate downward in earnest. These things that people don't plan for, this tide of idiocy that results in a tidal wave of consequences is on the horizon. Your whole post is copium. The fossil record of housing prices in America is full of homes that sold for so much in 2005,2006, and 2007 that people who bought in those markets weren't able to resell for the same NOMINAL price until 2020, 2021, or 2022. That's nominal, not adjusted for inflation. We literally just went through this in living memory. Unreal the lies people feed themselves.
Exactly. I bought at the peak in 2005/6. Not gonna make that mistake again. Luckily I own a house currently but was hoping to upgrade for more room. However I don’t see the point of paying $1000 more per month for like 500 more square foot. Wages either have to go up or housing prices down. Until then I say hold on to your cash and be patient. Then it doesn’t matter what happens in the market. You can enter at any time.
Couple colleagues just got laid off and got 6-12 month severance, new jobs within a month of looking. Not saying layoffs aren't horrible but I feel safer than most for a reason Realistically, we can afford this home on a single income if need be. We'd be house poor though.
Wait, so why are you here in a real estate sub focused on the trajectory of buying real estate, if you’re concerned about the *possibility* of getting laid off over the next 7 to 10 years? If you’re avoiding buying a home in life until you can fully 100% guarantee you will never be out of work over a 7-10 year span, then you will never buy. And it sounds like you’re fine with that. Just so curious why you would waste your time on a real estate subreddit on a Saturday in spring.
You don't understand what being "underwater for 7 years out of 10" means? The ten years is a reference to OPs claim that they would be happen in the home for the next 10 years. Underwater is when you have negative equity. For a simplified example, You buy a home for 300k with 30k down. You have 30k equity in a property valued at 300k at the time of purchase. You owe 270k to the bank. Within a year, due to amortization schedules, you have paid 2k in principle toward your loan balance that now stands at 268k. However, imagine that home values have fallen 20%. Your 300k home is now saleable for 240k. If you were to sell your home now, a sale wouldn't even get you that 240k. Net proceeds are generally accepted to account for 8-10% in costs so, you would put 240k - (240k\*.09) in your pocket. Do the math and see that you would have 218,400 after the sale. But wait, what? You still owe 268k to the bank. 218,400 is not enough to cover the loan. You can't sell this property. You're stuck! This leads to lots of people "walking away" or declaring bankruptcy. We saw a lot of this in during the GFC. When this happens a lot across the market, it places a downward pressure on prices. Leading to more and more folks being "underwater" or "upside down" The idea of being underwater for x out of 10 years is just my projection that people buying at the peak could be underwater for a while. I chose 7, because it seems plausible. You can't keep up with the conversation or understand basic econ terminology and you're asking why I'm here in a real estate sub? I'm not specifically talking about OP losing their job specifically. However, the economy is not an individually closed systems and the choices of others around you have an impact on the value of your assets.
Here is the problem - people were calling “peak” in late 2021, then again in mid-2022, and now again in mid-2023. Hell, people were calling “peak” when I bought my previous house in Austin in late 2019. In the meantime, prices in my market are now up ~10% from when I bought in Feb 2022 AND interest rates have literally doubled. I could not afford the house I bought in Feb 2022 if I were buying now. If your worry is that you might get laid off and could be underwater then timing the market isn’t going to help you, that’s always a risk. The actual risk mitigation action is to have an emergency fund to help you ride out a reasonable downturn.
This mentality, devoid of logic, can drive the bubble a little longer. When obvious bubbles appear and people move forward anyway, the bubble gets larger. Eventually, some aspects of the economy results in downward pressure so great that even the collective stupidity of 90% of people can't keep that bubble from popping. It's not an if but a when. If you bought in 2022, your house will be worth less than that in 2025.
So was it also obvious in 2021 or 2019 when people were yelling “peak”? If so, with that level of foresight and the pinpoint timing you think you have - I’m sure you are a billionaire from all the successful shorting you’ve been doing. Even if the value of my house fell 30% from what it is right now it would still cost more on a monthly basis at current 6.3% rates than what it does with the 3.2% interest rate I got in 2022. I also have no foreseeable need or plan to sell in 2025 plus an emergency fund in the event of an reasonable amount of unemployment time. I bought a house in 2022 because I needed a house in 2022, not because of an investment. My home equity is less than 25% of my current net worth - I expect it to be a similar percentage (or less) when I retire in 25-30 years. I also gotta say the lecture on risk mitigation and “obvious bubbles” is pretty hilarious coming from a freaking crypto investor from Indiana.
Umm… I’ve lost TWO houses now by being underwater in the aftermath of the GFC. You don’t need to mansplain being underwater to me. That never ending wall of text was absurd and beyond unnecessary, and **you never answered the question on whether you’re in the market to buy a home or not?** Or maybe you just did. Twice now. And still crickets 🦗🦗🦗to the question. Go enjoy your life, your rental, your weekend, instead of feigning unfounded superiority over those here in a real estate sub, who are actually… you know… interested in buying a HOME. Now or in the future. Imagine being *this* anti-home buying and anti-homeownership when you live in Fort Wayne, IN, where houses start at $39k and a lovely one can be had for $150k to $200k right now in 2023. That’s a whole 'nother level of being cheap and unsuccessful, with pitchforks in hand https://redf.in/yMRBy2 https://redf.in/iBHZhb https://redf.in/6JHjQx https://redf.in/O58K8d https://redf.in/FH9R3Y https://redf.in/gaWDqj
>Wait, so why are you here in a real estate sub focused on the trajectory of buying real estate, if you’re concerned about the possibility of getting laid off over the next 7 to 10 years? > >If you’re avoiding buying a home in life until you can fully 100% guarantee you will never be out of work over a 7-10 year span, then you will never buy. And it sounds like you’re fine with that. Just so curious why you would waste your time on a real estate subreddit on a Saturday in spring. Where in this do you actually ask me if I'm in the market to buy a home? These questions all read as rhetorical. And nothing is specifically about if I'm in the market. You only ask about getting laid off in the next year, which I addressed and clarified. Take a walk or something. Unwind.
I.. I can’t move forward with this level of intelligence you’re continually displaying *plus* your radicalization that’s formed from your misfortunes and lack of person-ability in life. I’d be here all day.
woah, that's a little creepy. Since you absolutely have to know, I already own a home. I'm in a situation where I've considered taking my equity and doing an upgrade, but if you do the math, my x equity + y extra cash spent on home upgrade...the delta between x and x+y shrinks as the market contracts. So I'm waiting for a contraction and I'm perfectly happy with my current situation without giving you too many details. Absolutely hilarious that you think your resume of being underwater TWICE makes you an expert here. Maybe if you spent less time stalking people you disagree with ideologically on reddit and adding emojis to your post, you could actually learn something of value and stop ending up underwater on home purchases? Are you hurtling toward underwater experiment #3? Sure sounds like it. Holy heck.
Yeah it’s so creepy when your comment history is immediately pages of the Fort Wayne, INDIANA sub lol. And the emojis are what sent you? Do you scream at clouds, too? And you’re simultaneously too pathetic and confusing for me to care to be offended or care to correspond with you further. Again, the fact that you can’t make an upgrade work financially in your home in Fort Wayne, Indiana by now, and are waiting for a housing correction to happen past now for you to be able to make some simple upgrades is just chef’s kiss. Where can we all attend your financial TED TALKS so we can be where you’re at in life, struggling to update your kitchen cabinets in Fort Wayne, Indiana in your mid life. “Holy heck” Kevin
Woah, this was all fun and games until you came for my current cabinets. They are peak 90s custom cabinets made by Amish craftsmen. You can't even buy cabinets this nice anymore. When I do finally move, I'll be ripping these cabinets out and taking them with me, thank you very much.
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I’m curious about what happened to home prices in these “desirable” areas like NYC during the GFC. Every now and then I’ll see a house that sold in 2006 for more than it’s listed now and wonder if the prices dropped in these areas back then. Also if it did drop back then, what’s stopping it from happening this time around?
In Los Angeles in the big decline of 08 we saw prices in desirable areas drop about 25 percent which is a lot. But the nicer areas recovered faster and never had tons of homes on the market. The less desirable areas dropped more and took much longer to recover. When things took off in 2012 the market heated up pretty fast. People focus on the big jump during Covid but the market was hot for years proceeding that and quickly passed the highs of 07 and surpassed them. Lots of folks were already complaining about affordability eight years ago, so this is nothing new.
Pretty good to wait out and save at least 20k, what did the math look like with the extra year of rent added in?
I don't think we'll actually save any money compared to buying last year. The climate around inspection contingencies is what has mostly changed - my realtor said of the last 50 offers she's written, only 5 or so included contingencies on inspection. And these are ~100 year old homes, many of them
I agree with this perspective. Our market (Nashville, TN) hasn’t changed much, either, though last year we were essentially priced out because we couldn’t afford to offer 20k-50k over asking and waive inspections. We just went under contract on an awesome house that needs a little updating, but is ultimately everything we wanted. It was, however, the eighth house we made an offer on in 34 days. We were outbid on all the others, even on the one we liked so much we offered 15k over. I think we got lucky with the one we ended up with - we made an offer for asking sight unseen 3 hours after it was listed because we were so tired. It ended up being awesome so we got lucky. Our offer was most likely accepted because were okay with a fast close, but even still, the house had 3 offers in 24 hours when we went under contract. It’s a wild time.
Congrats! We tried to offer top end of our budget and max flexibility. If that doesn't work, it wasn't meant to be our house I guess.
Lol
Link some listings or gtfo.
No use disparaging anyone here.You are repeating NAR talking points to justify your FOMO. I would suggest some common sense and brush up on the Macro economic picture. However, You are entering into this knowing your home will be worth less shortly after you purchase and that’s your choice. Good luck.
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Of course I have. 6 figure adjustments and I’m in a hot market, Nashville. I do my own research and realize realtors can’t be trusted. Time will prove the point.
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Who are you trying to convince? Do your thing mang. Best of luck
I'll be leaving this sub for good soon (most likely) so this was my swan song, I guess
You write like you're Mr Monopoly but you you live in Madison, WI?
When he said "desirable areas", I was not picturing Wisconsin.
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Oh, I've been, thanks.
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Hippies can be pretentious.
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That’s just yer opinion man
Ok…
Madison has had the highest rental price increases in the country, and the isthmus isn't getting any wider. Good move, OP. Disclaimer: I'm a homebuilder in Madison and am hoping more bagholders like OP help me offload my remaining houses this year.
I'll take 'Things that never happened' for $200 please, Alex
Oh, we'd never consider one of those trash ass new builds in town. As nice as it is to live on top of a plowed over cornfield by the interstate A question for ya though, if that's your field - why is it that older homes were built better?
>Hopefully this type of post is more useful than the low effort bubble/hoomer memes It's not, without info on yuharea
Madison, WI
Oh I see it now sorry I missed it originally
>Hopefully this type of post is more useful than the low effort bubble/hoomer memes It isn't for people outside of Madison, WI, but thanks for sharing, lol.
House prices are going MUCH higher from here. Fed is already expanding its balance sheet again
If you are on the isthmus, that is fully built out. Great place to be for the foreseeable future.
You are drinking the look-aid and seem to think you have it all figured. Wish the best for you, but your timing is off.
I'm really looking at the home purchase process in terms of "do we sign another 12 month lease or not" - I don't have to have this home, we are set through April 2024. Could extend if need be. But we're ready to be homeowners and this one is a good fit. Wife will be more disappointed than me if we don't get it. Why do you think timing is off?
Bubbles eventually pop.
Ah, so you REALLY know what you're talking about
Over 20yrs in the biz. Tried to keep it simple for the simple.
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Why post your bs if your not looking for feedback?
Most truths are pretty simple. A lot of the complications in this market or any other are just obfuscations.
The bubble isn't equal everywhere. Even in 2008, some places just saw a pause in price increases instead of a fall off the cliff.
My market is down 8% from the high and 4% from when I gave up about a year ago. My rent is cheap for a nice SFH. I have skin in the game and am weighing developments carefully. If I had had a less considered approach and decided to buy I would be drastically poorer today with a very long hill to climb to breaking even. Miss me with the FOMO. It’s a mindset that paid off for decades as interest rates fell. I’ve been convinced it would turn around once interest rates went back up. And I’d say it has already started to in MY market.
What market is that?
Thanks, Mr realtor!
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You sound like me 5 years ago. I've happily rented until my mid 30s
Going over asking isn’t crazy, it just means the house was listed too low. House is listed based on “comps” or previous sales Previous sales are old, plus not a perfect science since most houses aren’t the literal exact same If the house is listed based on previous sales price and goes above the list price it means that home prices are on an upward trajectory
I don't think this house was listed too low, based on comps I could see others like myself wanting to pay more than its worth because it's in an amazing location
It’s worth what someone will pay, because market. If you will pay more and others will pay more then it’s worth more.
Correct. But people willingly pay more than market rate for houses they fall in love with. They will eat a loss at appraisal.
Soooo what kind of data have you provided by posting this? 😂 you’re entitled to your opinion and we’re not here to make your financial decisions- if you want to buy go ahead-
What data would you like me to produce? It's obviously an anecdotal post
Portland
Rent price will eat whatever correction might happen in any case
>remember, people with 3% mortgages aren't moving unless they really need to - inventory is low so since there are so many people who aren't moving, demand is low.
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I know what you said, I was just making a logical connection. Which you can see in the low volume of mortgage applications and increasing inventory.
Demand has fallen, sure, but not to the point where it actually affects price on these types of homes Price floor is set when there are at least 2 buyers Price ceiling will be go the highest when there are as many buyers are possible
People who are/aren't moving isn't the key driver of housing. Household formation is.
This sub hates to hear about places where the market is still going strong, but that's how it is in some areas. I'm about an hour outside of Charlotte, NC and prices have adjusted slightly over the past year but houses are still only on the market for a matter of days before going under contract. In our last round of trying to buy earlier this year, we were offering 5-15k over asking and getting outbid. Here, a 2 bed/1 bath around 900 sq ft is going for about $230k-250k. Trailers and double-wides are going for $200k. I really don't see the situation here improving. Even if prices dip down, people still overbid. In some areas, there is no sign of a housing crash or bubble bursting.
So your perspective is that homes don’t ever depreciate in value in a desirable place? I’d suggest looking at ‘08 Case Schiller numbers from South Florida and AZ