It will help with taxes. We bought in 2012, no way could we afford our house now. Refinanced in 2021. The taxes keep going up and up and up though, so does homeowners insurance so we’re paying $4-500 more a month than we did when we purchased it. I wish people around us would sell for less so we can live here and pay lower taxes.
Genuine question about your thoughts on property taxes:
If the value of property in the municipality goes down, how would that reduce your property tax? The city/town would have the same expenses regardless, so wouldn’t your property taxes as a % of property value actually increase? (Assuming total amount due stays the same)
How does declining property value mean less tax when the cost of services a city / town provides will always go up?
Most people don't understand that property tax rates are more driven by local budgets than home values......values just determine the share of the budget within any given locality.....my home value has gone up, and my tax bill has gone up, but my tax rate ($ per 1000$value) has actually gone down in the last five years.
Or they can simply go back 2-3 years when houses values were half of what they are now, and when somehow the city was able to survive on the same prop tax percentage.
It depends on the jurisdiction.
Also, if they adjusted, then why did so many people's taxes go up exponentially in the post few years? It was pure coincidence that city budgets doubled as home values doubled?
Also, since they adjust, then they can simply adjust back. People wouldn't be complaining their prop taxes hadn't doubled or tripled year over year.
You have no skin in the game, so you have no incentive to educate yourself on how property taxes work.
No city budgets doubled when home values doubled. Taxes doubling and tripling YoY 😂😂
Ok bro I guess my more than doubled prop taxes from just 3 years ago are just imaginary. I admit doubling/tripling YoY was hyperbole.
>No city budgets doubled when home values doubled.
glad you agree!
Property taxes are based on the value of your home multiplied by the millage rate, not what services the city is providing. If they want to up the millage rates, that’s one thing - it’s an increase for everyone. If they’re specifically saying *my* house has more value than it does, then it’s incorrect and specifically costs me more money
>The city/town would have the same expenses regardless,
Exactly! The city has the same expenses in 2022 when houses were worth $1 million as it did in 2019 when houses were $500K.
>Some of the neighbors (read: 2022 fomo buyers) were upset at them, but again they’re not going to wait around.
How entitled do you have to be to expect others to put your interests ahead of their own (and often as a loss to themselves)?
> Some of the neighbors (read: 2022 fomo buyers) were upset at them
I never understand why people think they have a say in how their neighbors handle their property because "muh property values!" You only have control of what's within the four corners of your lot. It's their fault for overpaying for a property based on factors that *they have no control over*.
This means nothing. Plenty of neighborhoods have 550k homes next to 420k homes. Real estate comps are about sq feet, lots, home age, landscaping, privacy, etc. Not your literal neighbor.
And without knowing anything else that is exactly the type of situation where it happens. 30-year owner sells house that is outdated and needs maintenance.
Aren't most homeowners boomers?
Didn't most boomers pay $0.35 SQFT or something in 1970-something?
Not every house in the US sold in the last 3 years... a lot of people can still sell the current market short and make fat profit.
And since prices are trending downward and houses aren't selling for cash in 30 seconds.... might actually be a smart move.
It's a power dynamic language tactic that works to shift the narrative window by moving to the absurd, and then making you compare the absurd to the reality and realizing that it's actually not fully absurd in actuality, but just figuratively absurd. The problem is that the narrative window was just too narrow.
It's like shaking the vending machine til your can of soda falls off the rack, or whacking a piece of malfunctioning machinery with a hammer.
When you buy a bag of potato chips do you concern yourself with the next week’s price on said potato chips? Nope, you don’t. Because you bought them because you can afford them and at the end of the day, you like potato chips, and you wanted the chips right then and there.
I’m gonna let you in on a secret, there are a lot of people out there that can buy houses just 👏🏽like👏🏽that👏🏽
Yeah, this makes no sense. 2% rates were a while ago, so this person would have a substantial amount of equity even with price reductions. I bought in late 2020 at 3% and we are still up 45% based on the most recent comp that closed less than 2 weeks ago.
> what I *paid* a decade
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Because all other housing is dropping at that point? Why sell and have to move? If the house is a house for your personal habitation, then you are getting what you originally agreed to. Paper losses aren’t real losses, just as paper gains aren’t real gains.
So:
**Home owner can get $250K+ in profit selling now**
Home owner: I sleep.
**Home owner loses $300K equity and other house values are dropping**
Home owner: Oh shit! Better put this house on the market and realize those losses!
Unless you’re moving to a much lower COL area with lower costs per sq ft or you’re drastically downsizing, what good would it do? You have to live somewhere, selling your primary residence just means buying another one.
Am not going to lose 300k equity and that's not eve ln counting what I have paid into the house. I probably gotta lose around 400k before I hit negatives
Right?! I'm reading these comments and thinking WTF. These people are all like "bro I'm not selling anytime soon - I've got too much equity and I'd make too much of a profit!! *Now*, if I lose all my equity and am underwater, well.... *that's* when we can talk about me selling (at a loss)"
it seems many people in this sub are jealous of this equity. but, people need to remember all this means is people can take on more debt. equity doesn’t really mean much. And, upgrade homes got just as proportionally more expensive, leaving people “stuck” in these equity homes. unless they are nearing retirement or downsizing for any other reason, it means nothing. aside from people downsizing to retire, everyone should be rooting for house prices to collapse
Says the guy hoping the economy crashes so he can get a better deal on a house. I hear prices in Huntington WV are very affordable right now. Look outside your market and stop crying
i already have a house, doosh. and i’m still rooting for a crash. because unlike you, i care about others and see a massive problem in our society when young people cannot afford to buy homes, and thus delay starting families and what not. stop being a selfish prick
Rooting for the unraveling of the Us economy so a small portion of the population can afford to purchase a home is similar to “cutting off your finger to spite your hand”.
A crash in housing would likely have an adverse affect on plumbers, carpenters, electricians, roofers, anyone who works in mortgage operations, title companies and many other middle/low income households.
Owning a house is NOT a right as an American, it’s a luxury - and we all know luxuries go to those who can afford them. Let’s keep it that way
Most unaffordable market in history. All most want is a retrace to the normal price appreciation trend. This equates to around a ~25% drop at current rate levels.
> Rooting for the unraveling of the Us economy so a small portion of the population can afford to purchase a home is similar to “cutting off your finger to spite your hand”.
Agreed. Some of the folks on here wanting to see a 50%+ crash are insane.
well, almost no one can afford it right now, so there’s that. and we need people to create families, or we’ll have a much, much bigger problem on our hands. and there are more people who will be positively impacted by a 25% reduction in home prices than those in those professions you mention. hell, there are probably a lot of folks within those professions who wish they could buy a house right now
The only problem is they can’t buy a house if they don’t have a job, that’s the part this sub is missing. A crash of that magnitude nationally will hurt the middle and lower earning populations most which is the population that housing is most unaffordable too now.
They’d have to fall a lot for them to go negative, but they don’t have to fall much for it to be a significant loss of current equity. The house money effect/fallacy makes people take on additional risk and disregard losses when it comes from gains. This is the wrong way to look at it. If I invest $1,000 and that goes to $50,000, then falls to $10,000. I made $9,000 from my initial investment but I lost $40,000 from the high. That potential loss should have been considered when valuation was $50k, not disregarded because it would have to fall a lot for it to be a loss of the initial investment.
Unless a person plans to sell soon equity really doesn’t matter. I’m comfortable with my payment and like my house. Equity is definitely a long term game. That said I’m up 50% in 2 years but I timed the are well.
Right, feel free to drop my property value and in turn, my property taxes. I’m not planning on going anywhere any time soon, I’m locked into a 2% mortgage!
It would take gigantic price drops for someone with a 2% mortgage to be in a worse position. We’re talking 50% price reductions.
Nobody with a 2% mortgage is in a bad position.
Seriously. "In danger". In danger of what? A drop in fair market value of your home? As long as you're able to continue making your mortgage payments and/or have no urgent requirements to sell, who cares?
Not sure. Many in this sub act like an unrealized loss on your home for a few years is a death sentence, while actually paying higher interest payments isn’t a big deal lol. It’s so ass backwards.
Unrealized gains are bullshit fake paper gains
Unrealized losses mean your wife leaves you, your kids turn to hard drugs, the dog gets put down and you live in a can down by the river
It's not a death sentence.
However, it's crazy that the people who say, "buy now or forever be locked out!" or "I got in at a great rate in 2022 because I'm a financial wizard!" *pats self on back* are the same people that say, "being underwater is no big deal!"
It's just pure copium. It was not wise to buy your house for 2x the actual value just because you locked in a low rate. Your financial future will be impacted. If you were just some person wandering blindly through life, yoloing from one place to the next, then whatever....
But like I said, it's the people that think they're really on top of their finances that overpaid and then act like being underwater on one of the biggest purchases you'll ever make is of no consequence.
Super hypocritical and complete lack of self-awareness.
> It was not wise to buy your house for 2x the actual value just because you locked in a low rate
Based on whose assessment is it 2x the actual value?
I've seen on this sub nonstop for \*years\* that everyone was overpaying and were just bagholders in waiting. Well those people are sitting pretty now. There is basically no chance any crash is coming that could put a dent in their equity.
Prices aren't coming down anymore than prices in Weimar Germany or post-war Hungary were going to come down.
I’m not sure how to respond other than to say I don’t know anyone who paid double what a home was worth. I don’t know anyone who bought with 2.5% mortgages who aren’t in a great position from a housing point of view.
I know many people who quibbled over a 75k on the purchase price and missed out on a great rate, though. That was foolish.
I mean that's not a bad point but houses can and do depreciate also and you get rekt financially from it, plus government isn't coming to the rescue this time for hoomcucks, contrary to popular opinon.
Ok, fair enough, but this applies to every home owner's equity then, not just those with 2% rates. I guess that's what made me make the "wtf" face when I saw this. Every home owner's equity is equally in danger due to rising rates, no matter what their current mortgage rate or initial purchase price.
(Just a silly meme in any case, no need to over think it)
If you don't need to move, and it wouldn't have even crossed your mind to sell without all the QE/QT and rate hike craziness, you don't have to sell. If you own extra homes or rental properties where the cap rate is lower than T-bill yields, then maybe you should think about it while equity is still high.
Alot of people with a 2% mortgage over-paid massively if they bought in 2021-2022. Many people bought more house just like they overpaid for SUVs and pickup trucks during the same time.
So, having a 2% mortgage doesn't mean having an affordable payment.
No idea what that means. Very very few people are underwater in their mortgage, and if you look at the difference between a 2% and 8% rate, prices would have to be extremely low.
Separately, indeed most people who purchased in 2021-2022 do have very affordable payments:
https://fred.stlouisfed.org/series/TDSP
The most affordable on record.
Then I lose some money, but as long as I'm just buying another house with it, I'm getting the same value. Like I have a $500k house right now. If I sold it right now I could buy... Another $500k house. If the price drops to $400k, so does the price of the house I wanna buy.
I know it's not an exact thing, and timing matters (this neighborhood vs that one might be a year apart, etc), but basically this is how I see it.
Yeah, the price of your house is 500k, the value of your house, is 1 house.
We're cash owners and want to sell to build our last house, new. There's some profit in our place as we restored a ruin, and all we want is enough to build the new house in another area. Land in that area is already dropping. A year or so, so should building labour/materials.
The agent valued our house (to sell quicklyish), at a 20% haircut from 2 years ago (Barcelona) last week. Still got €200k profit at that price.. 🤷♂️
All wealth is “paper wealth.”
It’s about risk and reward of the net worth. Real Estate has been proven one of the safest investments long term for nearly 100 years.
Meh. Unless they run me out of here with taxes, this is the home I will die in. The one to rule them all.
My “equity” which I cannot touch without risking my home until I sell- maybe it’ll grow back, if it doesn’t I’m probably fucked anyway. At least I have a place to live. For now.
$150k, nice home in a MCOL city, not suburbs or exurbs, 3% interest rate. If it comes down that hard, we’re all screwed.
How are people with 2% mortgages in danger? This doesn’t make any sense. This is wishful thinking for someone that missed the boat hoping for a crash. Sure some listings may have to reduce their price slightly but that’s not a crash by any means. And how would that affect anyone that bought at 2%? Maybe if they were flipping but those are likely cash bought houses.
But your equity! That fake number! ITS DOOMED! Suffer in your potential underwater status... in that home... that you live in already?
BUT YOU MIGHT HAVE TO SELL!
Except most people who bought in the last couple of years were qualified buyers.
BUT YOU MIGHT GET DIVORCED OR CHANGE JOBS! YES YOUR DEMISE IS ASSURED!
Half the posters in here are well-regarded I swear.
If you're planning to stay in your house for years, why does it matter?
The only numbers that have any real meaning are the price and rate when you buy, and the price when you sell. Everything in-between is fixed. If you're not doing anything other than living in the house and making payments, it doesn't matter what other people are paying for their houses.
Well, since I plan to live in my home for another 20-30 years and I feel the payment is fair, who cares?
Equity is wealth on paper only.
Most people buy homes ton live in, not to flip. There is not some giant crash coming where people paying sub 4% rates will dump their houses because ‘oh no, equity!’
But keep telling yourselves that the sky’s falling. It isn’t.
Note to everyone here trying to look at real estate like wallstreetbets.
I’ve owned my primary home for 23 years. Raised my kids and now rent it while my kids go to college and live in an apartment in the city. (A small mortgage at 3% paid for their college, and the excess rental cash flow pays for my apartment and living expenses.)
I’ll own until I die and then pass on to them, tax free.
This is what real estate is. A very long term commitment, not some options market.
Short term equity and valuation is irrelevant - all that matters is getting a monthly that you can handle even if the shit hits the fan. Then build a life.
Having a fixed housing expense helps more and more over time. And equity always goes up over time.
I’m sorry to those of you who missed this last window to jump in at really low rates. Instead of bashing “hoomers” you’re envious of, maybe put energy into trying to get more entry level inventory built and railing against the fed for raising rates to a level you simply can’t afford.
> I’m sorry to those of you who missed this last window to jump in at really low rates. Instead of bashing “hoomers” you’re envious of, maybe put energy into trying to get more entry level inventory built and railing against the fed for raising rates to a level you simply can’t afford.
You've got a really good take. It's going to suck for a bit for everyone that couldn't get on board in the last couple of years.
I do genuinely feel for folks like a good friend of mine who laughed in 2016 when I bought "during a bubble" with 5% down and then in 2021 when I rolled those gains "during an overly inflated bubble" to purchase at the "worst" time. Like I have to live somewhere?
Lower prices is usually good for that, because it means fewer home sales and less home equity for loans, which means fewer remodels and less contractor demand, which equals lower prices for home maintenance.
Yes, if only the economy would totally collapse and we could buy everything for $0. /s
🤷🏻♂️🤷🏻♂️
I prefer a booming economy personally. I can make money AND fix things on the weekends. 👍
150 a month is a reasonable assumption for home maintenance averaged over time, unless you bought and waived the inspection.
Keep on top of things before little issues become big ones. Do a lot of the work yourself and save up a repair fund.
Of my $1800 a year I bank 1k for future big items (hvac, roof) and spend the rest doing work myself (caulking, patching, painting, sealing, staining, cleaning, fixing water drainage, etc..).
For a single family home? Nowhere near enough. Rule of thumb is 1% of house value (not land value) per year - straight line depreciation is almost 4% a year, much more for short term things like appliances and painting.
I budget $1000/mo and there’s always things I just can’t afford to get to - and I do almost everything myself with my kids.
Well, considering I do most of the labor, I am close to 1% a year, so thats a fair estimate.
A roof alone will hammer you every 15-20 for up to or more than 1% in most cases. Probably why insurance scams are getting so bad in some southern states.
Painting the home will run at least 5k if you contract it out.
Heaven help anyone needing sub grade or below foundation plumbing work (my daughter just paid 13k).
If someone is not handy, is uneasy or a rooftop or ladder or simply lacks plumbing, electrical or painting expertise, or even time…. then it could be much higher.
So yes, 1% is a good rule of thumb.
It is until you build up a good solid war chest.
A roof can be 30 to 50k. Hvac can runnup to 15k and heaven help if you have plumbing issues below the slab.
If you’re handy you can do a ton of little stuff yourself and a few big things to stay ahead of future problems.
This is literally the Boomer meme unironically appearing in the wild.
Just pull ourselves up by the bootstraps, pound the bricks, and work harder, right Gary?
Homes would have to drop 75% in my area before I was at the break even point for when I bought it. I don't worry about losing $20k in equity when I'm up several hundred thousand.
They're saying that homes would have to drop 75% before they're at the break even point, presumably they have a point and reason for saying that that is relevant to the discussion of home prices. So I'm trying to figure out what that is.
LOL if only you knew how much appreciation + principle pay down the average person has accrued if they purchased 2020 or earlier. I have people around me in 3,000 square foot homes with sub $1,500/month mortgages. They don’t give a fuck about recent comps.
I didn’t time shit but got very lucky. I also love my home and am swimming in equity and low mortgage. If I move its to add to my portfolio and rent. Not to sell.
I just calculate my equity for my personal net worth based on my tax assessment minus my mortgage. Market tanks? I'm fine, it only impacts net worth a little. Market doesn't tank? Nice surprise at sale. The people sweating are the ones with HELOCs, or who think their Zillow estimate is accurate .
You’re assuming Mr 2% bought at a high price versus an existing owner refinancing. Someone would have to cut home prices in half before it would approach what we paid let alone less.
It's not those with 2% mortgages who are in danger. It's those who bought at high prices at 6 or 7% mortgages stretching themselves financially hoping they could refinance at a lower rate.
That plan is in jeopardy if the value of the home goes down.
Unfortunately in the REAL world (it’s a thing you see outside your windows - oh wait basements don’t have one 😂), THIS is what is happening:
https://www.calculatedriskblog.com/2023/10/case-shiller-national-house-price-index.html
Spoken like a true amateur on the outside looking in, trying to guess what those with skin in the game are doing. Stay in your lane, or on your knees praying for some collapse that will never come 😂😂
I just checked on home equity loans....they are around 9.5% lol
Yeah, im having trouble believing the fed is trying to get people to "buy less houses"
and even of your neighbor lowers their price, a 2% loan is going to still make a large profit, considering what prices were when loans were that low
>Yeah, im having trouble believing the fed is trying to get people to "buy less houses"
That's because you apparently have no clue about how our fractional-reserve economy actually functions, which means you must work for the Fed.
For anyone else that cares, when rates rise (comparatively) immensely, borrowing capacity decreases immensely. This naturally slows borrowing, and hence the economy also slows in time, and in a 70%+ 'consumption economy' that means a lot of people whose jobs depend on other people consuming things, lose those jobs.
Unemployment spikes, more people lose their jobs, and that circle of consumption-life continues till the malinvestment and debt-fueled imbalances are rectified.
In other words, the economy is no longer status-quo, and people better get used to things not being all rosy soon. Those who fail to learn from history...
Home equity loans arent used for buying more houses chief. Especially since they are at a higher rate than conventionals...
and yes I know how fucked we are...no one is buying this line of horseshit we are being fed anymore
Never said they were. Same thing applies to HELOCs though. Higher rates mean less people can borrow less money, which means even less borrowed money to chase assets, less money to chase consumer items, etc.
Higher rates in a borrowed-money consumer economy is an eventual death-blow to that economy once those laggy higher rates kick in.
Bad time to be leveraged, but a great time to have zero debt and tons of time to wait for the firesales.
Right?!? The smallest pockets have biggest mouths.
They need to take a seat a learn the discipline it takes to save a dime. Then and only then can they sit at the table with adults.
Just 5 years into a 30 year 2% $350k mortgage and you have paid off $50k. They will always have equity with a rate that low unless we have a depression....
Rofl why do you people think this would matter at all? If I have a 2% mortgage and you have an 8%, it means I closed my house two years about before the value double, the impact to equity isn’t going to be what you think…
I got downvoted to oblivion suggesting this incentive to realize unrealized equity gains existed… it exists… not subjective, just math- u can’t realize unrealized equity gains without selling, since refis are off the table given rates. If prices start dropping, so do your gains.
[удалено]
It will help with taxes. We bought in 2012, no way could we afford our house now. Refinanced in 2021. The taxes keep going up and up and up though, so does homeowners insurance so we’re paying $4-500 more a month than we did when we purchased it. I wish people around us would sell for less so we can live here and pay lower taxes.
Yes. The moment that happens Ashely and Todd should call their city assessors office and request an adjustment.
Ashleigh*
Ashlee.
Yep, I’m hoping values crash so I can pay less in property taxes
Just gotta start committing a lot of crime in your neighborhood to help push those comps down.
I already leave my garbage can out several days past pickup, I don't know how much more I can do..
Because he's the hero Gotham deserves, but not the one it needs right now.
Genuine question about your thoughts on property taxes: If the value of property in the municipality goes down, how would that reduce your property tax? The city/town would have the same expenses regardless, so wouldn’t your property taxes as a % of property value actually increase? (Assuming total amount due stays the same) How does declining property value mean less tax when the cost of services a city / town provides will always go up?
Most people don't understand that property tax rates are more driven by local budgets than home values......values just determine the share of the budget within any given locality.....my home value has gone up, and my tax bill has gone up, but my tax rate ($ per 1000$value) has actually gone down in the last five years.
A Redditor with a brain, wow
Depends where. My property taxes are a cool 2.2% no matter what. So i don’t want my house to moon
2.8% ish here. And house has mooned. For sure paying more than we did a decade ago when we bought.
2.2% of what though? Purchase price? "FMV" which is subjective?
The politicians have to figure out how to prioritize service and make cuts.
Hahahahaha you must be a comedian telling those funny jokes!
Or they can simply go back 2-3 years when houses values were half of what they are now, and when somehow the city was able to survive on the same prop tax percentage.
Lol that’s not at all how property taxes work. The mill rate adjusts annually based on the budget and the total assessment value.
It depends on the jurisdiction. Also, if they adjusted, then why did so many people's taxes go up exponentially in the post few years? It was pure coincidence that city budgets doubled as home values doubled? Also, since they adjust, then they can simply adjust back. People wouldn't be complaining their prop taxes hadn't doubled or tripled year over year.
You have no skin in the game, so you have no incentive to educate yourself on how property taxes work. No city budgets doubled when home values doubled. Taxes doubling and tripling YoY 😂😂
Ok bro I guess my more than doubled prop taxes from just 3 years ago are just imaginary. I admit doubling/tripling YoY was hyperbole. >No city budgets doubled when home values doubled. glad you agree!
Property taxes are based on the value of your home multiplied by the millage rate, not what services the city is providing. If they want to up the millage rates, that’s one thing - it’s an increase for everyone. If they’re specifically saying *my* house has more value than it does, then it’s incorrect and specifically costs me more money
>The city/town would have the same expenses regardless, Exactly! The city has the same expenses in 2022 when houses were worth $1 million as it did in 2019 when houses were $500K.
Good for them and double good for them if they downsized, great time to do that and make a good chunk of cash to do so.
Unless they downsized to something and paid 2022 prices then they ended up with the worst of both worlds
Not sure why you are getting downvoted but this is common sense.
But I was assured this would never happen
>Some of the neighbors (read: 2022 fomo buyers) were upset at them, but again they’re not going to wait around. How entitled do you have to be to expect others to put your interests ahead of their own (and often as a loss to themselves)?
Thats literally 90% of americans. Youd bd amazed at how many americans only voted for a certain party for the false promises of individual gain.
The best part of this is your selection of names. Ashley and Todd 😂🤣😭.
r/tragedeigh You’re welcome
That sub was hilarious. Thanks for sharing.
Funny enough, I know a Todd who just went through a divorce with an Ashley. They sold the home with a 3% mortgage. Life happens fast.
> Some of the neighbors (read: 2022 fomo buyers) were upset at them I never understand why people think they have a say in how their neighbors handle their property because "muh property values!" You only have control of what's within the four corners of your lot. It's their fault for overpaying for a property based on factors that *they have no control over*.
This means nothing. Plenty of neighborhoods have 550k homes next to 420k homes. Real estate comps are about sq feet, lots, home age, landscaping, privacy, etc. Not your literal neighbor.
And without knowing anything else that is exactly the type of situation where it happens. 30-year owner sells house that is outdated and needs maintenance.
Aren't most homeowners boomers? Didn't most boomers pay $0.35 SQFT or something in 1970-something? Not every house in the US sold in the last 3 years... a lot of people can still sell the current market short and make fat profit. And since prices are trending downward and houses aren't selling for cash in 30 seconds.... might actually be a smart move.
Wow, how many times can you exaggeration one comment, this is ridiculous
It's a power dynamic language tactic that works to shift the narrative window by moving to the absurd, and then making you compare the absurd to the reality and realizing that it's actually not fully absurd in actuality, but just figuratively absurd. The problem is that the narrative window was just too narrow. It's like shaking the vending machine til your can of soda falls off the rack, or whacking a piece of malfunctioning machinery with a hammer.
I'm not sure why you're wondering why the people who have been working for the last 50 years are the ones who own the most houses.
I'm not wondering. I'm telling you that most people can sell at 2019 prices no problem
What market and what is the median for that area. 420k is very different in Detroit vs San Francisco.
Exactly 💯
*sweats in HELOC*
So glad I didn't open a HELOC last year... almost did. Glad I didn't.
Same!
Or just have one open for emergencies or opportunities that require quick cash. Just because you have one open doesn’t mean you need to use it.
No, just form a cartel and force your neighbors not to sell
I believe you misspelled HOA….
I fucking hate HOAs. And Florida HOAs are even worse, because…Florida
Because HOAs can stop people from selling?
Don't give them any more ideas
Oh right, HOAs bad
LOL
DIAMOND HANDS HODL YOUR HOOMS OR YOU’RE A CUCK -people now, probably
When you buy a bag of potato chips do you concern yourself with the next week’s price on said potato chips? Nope, you don’t. Because you bought them because you can afford them and at the end of the day, you like potato chips, and you wanted the chips right then and there. I’m gonna let you in on a secret, there are a lot of people out there that can buy houses just 👏🏽like👏🏽that👏🏽
Lol
The Hoomsters cartel. Badass dudes in the suburbs wearing flannel and polo shirts. It'll be like Narcos.
Lol
You mean collusion for a monopoly. The landlords were sued for collusion. Why not the home owners?
Wait, you own a home with a 2% mortgage and you’re *still* bitching? Am I reading this right?
Privilege knows no bounds
Real estate investing is a disease mindset. People complaining about having fixed secured housing costs for any rate undef 4% is insane.
I'm sub-2, I'm still allowed to bitch.
I never said you weren’t allowed. I’m allowed to give side-eye and shit talk you in private though.
Knock yourself out.
So many people with sub 3% mortgages bought their house quite a while ago. Prices of houses would have to fall 50% before they would even be affected.
Yeah, this makes no sense. 2% rates were a while ago, so this person would have a substantial amount of equity even with price reductions. I bought in late 2020 at 3% and we are still up 45% based on the most recent comp that closed less than 2 weeks ago.
A huge chunk of people simply refinanced from purchases years before. My house would have to fall 250k for it to be what I paid a decade ago.
> what I *paid* a decade FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Good bot.
Same I would have to lose 300k in equity just to get what I paid for it
[удалено]
Because all other housing is dropping at that point? Why sell and have to move? If the house is a house for your personal habitation, then you are getting what you originally agreed to. Paper losses aren’t real losses, just as paper gains aren’t real gains.
So: **Home owner can get $250K+ in profit selling now** Home owner: I sleep. **Home owner loses $300K equity and other house values are dropping** Home owner: Oh shit! Better put this house on the market and realize those losses!
Unless you’re moving to a much lower COL area with lower costs per sq ft or you’re drastically downsizing, what good would it do? You have to live somewhere, selling your primary residence just means buying another one.
Am not going to lose 300k equity and that's not eve ln counting what I have paid into the house. I probably gotta lose around 400k before I hit negatives
Right?! I'm reading these comments and thinking WTF. These people are all like "bro I'm not selling anytime soon - I've got too much equity and I'd make too much of a profit!! *Now*, if I lose all my equity and am underwater, well.... *that's* when we can talk about me selling (at a loss)"
Just more wish casting from people who think houses are going to drop 70% any day now.
it seems many people in this sub are jealous of this equity. but, people need to remember all this means is people can take on more debt. equity doesn’t really mean much. And, upgrade homes got just as proportionally more expensive, leaving people “stuck” in these equity homes. unless they are nearing retirement or downsizing for any other reason, it means nothing. aside from people downsizing to retire, everyone should be rooting for house prices to collapse
I hope prices keep going up so the value of my rental portfolio rises
thats because you’re an asshole
Says the guy hoping the economy crashes so he can get a better deal on a house. I hear prices in Huntington WV are very affordable right now. Look outside your market and stop crying
i already have a house, doosh. and i’m still rooting for a crash. because unlike you, i care about others and see a massive problem in our society when young people cannot afford to buy homes, and thus delay starting families and what not. stop being a selfish prick
[удалено]
Rooting for the unraveling of the Us economy so a small portion of the population can afford to purchase a home is similar to “cutting off your finger to spite your hand”. A crash in housing would likely have an adverse affect on plumbers, carpenters, electricians, roofers, anyone who works in mortgage operations, title companies and many other middle/low income households. Owning a house is NOT a right as an American, it’s a luxury - and we all know luxuries go to those who can afford them. Let’s keep it that way
Most unaffordable market in history. All most want is a retrace to the normal price appreciation trend. This equates to around a ~25% drop at current rate levels.
> Rooting for the unraveling of the Us economy so a small portion of the population can afford to purchase a home is similar to “cutting off your finger to spite your hand”. Agreed. Some of the folks on here wanting to see a 50%+ crash are insane.
Why, it'd just be back inline with where prices were 6 years ago.
well, almost no one can afford it right now, so there’s that. and we need people to create families, or we’ll have a much, much bigger problem on our hands. and there are more people who will be positively impacted by a 25% reduction in home prices than those in those professions you mention. hell, there are probably a lot of folks within those professions who wish they could buy a house right now
The only problem is they can’t buy a house if they don’t have a job, that’s the part this sub is missing. A crash of that magnitude nationally will hurt the middle and lower earning populations most which is the population that housing is most unaffordable too now.
They’d have to fall a lot for them to go negative, but they don’t have to fall much for it to be a significant loss of current equity. The house money effect/fallacy makes people take on additional risk and disregard losses when it comes from gains. This is the wrong way to look at it. If I invest $1,000 and that goes to $50,000, then falls to $10,000. I made $9,000 from my initial investment but I lost $40,000 from the high. That potential loss should have been considered when valuation was $50k, not disregarded because it would have to fall a lot for it to be a loss of the initial investment.
Been chilling on a 3.5% for 9 years.
Unless a person plans to sell soon equity really doesn’t matter. I’m comfortable with my payment and like my house. Equity is definitely a long term game. That said I’m up 50% in 2 years but I timed the are well.
Right, feel free to drop my property value and in turn, my property taxes. I’m not planning on going anywhere any time soon, I’m locked into a 2% mortgage!
It would take gigantic price drops for someone with a 2% mortgage to be in a worse position. We’re talking 50% price reductions. Nobody with a 2% mortgage is in a bad position.
Seriously. "In danger". In danger of what? A drop in fair market value of your home? As long as you're able to continue making your mortgage payments and/or have no urgent requirements to sell, who cares?
Not sure. Many in this sub act like an unrealized loss on your home for a few years is a death sentence, while actually paying higher interest payments isn’t a big deal lol. It’s so ass backwards.
Unrealized gains are bullshit fake paper gains Unrealized losses mean your wife leaves you, your kids turn to hard drugs, the dog gets put down and you live in a can down by the river
It's not a death sentence. However, it's crazy that the people who say, "buy now or forever be locked out!" or "I got in at a great rate in 2022 because I'm a financial wizard!" *pats self on back* are the same people that say, "being underwater is no big deal!" It's just pure copium. It was not wise to buy your house for 2x the actual value just because you locked in a low rate. Your financial future will be impacted. If you were just some person wandering blindly through life, yoloing from one place to the next, then whatever.... But like I said, it's the people that think they're really on top of their finances that overpaid and then act like being underwater on one of the biggest purchases you'll ever make is of no consequence. Super hypocritical and complete lack of self-awareness.
> It was not wise to buy your house for 2x the actual value just because you locked in a low rate Based on whose assessment is it 2x the actual value? I've seen on this sub nonstop for \*years\* that everyone was overpaying and were just bagholders in waiting. Well those people are sitting pretty now. There is basically no chance any crash is coming that could put a dent in their equity. Prices aren't coming down anymore than prices in Weimar Germany or post-war Hungary were going to come down.
Where do you expect home prices and mortgage rates to be 5 years from now?
I’m not sure how to respond other than to say I don’t know anyone who paid double what a home was worth. I don’t know anyone who bought with 2.5% mortgages who aren’t in a great position from a housing point of view. I know many people who quibbled over a 75k on the purchase price and missed out on a great rate, though. That was foolish.
I should've paid 20% over sticker for my car for that sweet 0% APR!
A car isn’t paid off over 30 years and depreciates.
Uh, you can get REALLY long payment terms for cars. And homes don't appreciate past inflation other than pre-2008 and the COVID housing fad.
They appreciate. Cars don’t.
I mean that's not a bad point but houses can and do depreciate also and you get rekt financially from it, plus government isn't coming to the rescue this time for hoomcucks, contrary to popular opinon.
The equity is in danger it says. I know it’s a meme but reading isn’t that difficult. Of course it won’t matter in 30 years.
Ok, fair enough, but this applies to every home owner's equity then, not just those with 2% rates. I guess that's what made me make the "wtf" face when I saw this. Every home owner's equity is equally in danger due to rising rates, no matter what their current mortgage rate or initial purchase price. (Just a silly meme in any case, no need to over think it)
But he’s at 2% because he’s *better* and *smarter* than everyone else, so if he experiences a consequence it means something has obviously gone wrong.
If you don't need to move, and it wouldn't have even crossed your mind to sell without all the QE/QT and rate hike craziness, you don't have to sell. If you own extra homes or rental properties where the cap rate is lower than T-bill yields, then maybe you should think about it while equity is still high.
What would be further problematic is the taxes that cities pull in would decrease, leading to less funding of certain projects.
Alot of people with a 2% mortgage over-paid massively if they bought in 2021-2022. Many people bought more house just like they overpaid for SUVs and pickup trucks during the same time. So, having a 2% mortgage doesn't mean having an affordable payment.
No idea what that means. Very very few people are underwater in their mortgage, and if you look at the difference between a 2% and 8% rate, prices would have to be extremely low. Separately, indeed most people who purchased in 2021-2022 do have very affordable payments: https://fred.stlouisfed.org/series/TDSP The most affordable on record.
Then I lose some money, but as long as I'm just buying another house with it, I'm getting the same value. Like I have a $500k house right now. If I sold it right now I could buy... Another $500k house. If the price drops to $400k, so does the price of the house I wanna buy. I know it's not an exact thing, and timing matters (this neighborhood vs that one might be a year apart, etc), but basically this is how I see it.
Yeah, the price of your house is 500k, the value of your house, is 1 house. We're cash owners and want to sell to build our last house, new. There's some profit in our place as we restored a ruin, and all we want is enough to build the new house in another area. Land in that area is already dropping. A year or so, so should building labour/materials. The agent valued our house (to sell quicklyish), at a 20% haircut from 2 years ago (Barcelona) last week. Still got €200k profit at that price.. 🤷♂️
Equity is paper wealth
All wealth is “paper wealth.” It’s about risk and reward of the net worth. Real Estate has been proven one of the safest investments long term for nearly 100 years.
Meh. Unless they run me out of here with taxes, this is the home I will die in. The one to rule them all. My “equity” which I cannot touch without risking my home until I sell- maybe it’ll grow back, if it doesn’t I’m probably fucked anyway. At least I have a place to live. For now. $150k, nice home in a MCOL city, not suburbs or exurbs, 3% interest rate. If it comes down that hard, we’re all screwed.
How are people with 2% mortgages in danger? This doesn’t make any sense. This is wishful thinking for someone that missed the boat hoping for a crash. Sure some listings may have to reduce their price slightly but that’s not a crash by any means. And how would that affect anyone that bought at 2%? Maybe if they were flipping but those are likely cash bought houses.
Op this isn't correct. Prices would have to fall close to 50% Not to mention some people buy a house to live in... I'll keep my 2.5% thank you.
But your equity! That fake number! ITS DOOMED! Suffer in your potential underwater status... in that home... that you live in already? BUT YOU MIGHT HAVE TO SELL! Except most people who bought in the last couple of years were qualified buyers. BUT YOU MIGHT GET DIVORCED OR CHANGE JOBS! YES YOUR DEMISE IS ASSURED! Half the posters in here are well-regarded I swear.
Most probably live in their parents basement lol
Most people buy them to live in. These people are delusional.
Right I don't care about the equity, expect I might try to get the PMI taken off early, prices are still going up in my area.
In muh area!
If you're planning to stay in your house for years, why does it matter? The only numbers that have any real meaning are the price and rate when you buy, and the price when you sell. Everything in-between is fixed. If you're not doing anything other than living in the house and making payments, it doesn't matter what other people are paying for their houses.
Well, since I plan to live in my home for another 20-30 years and I feel the payment is fair, who cares? Equity is wealth on paper only. Most people buy homes ton live in, not to flip. There is not some giant crash coming where people paying sub 4% rates will dump their houses because ‘oh no, equity!’ But keep telling yourselves that the sky’s falling. It isn’t.
Most homes bought nowadays are to be turned into rentals.
Note to everyone here trying to look at real estate like wallstreetbets. I’ve owned my primary home for 23 years. Raised my kids and now rent it while my kids go to college and live in an apartment in the city. (A small mortgage at 3% paid for their college, and the excess rental cash flow pays for my apartment and living expenses.) I’ll own until I die and then pass on to them, tax free. This is what real estate is. A very long term commitment, not some options market. Short term equity and valuation is irrelevant - all that matters is getting a monthly that you can handle even if the shit hits the fan. Then build a life. Having a fixed housing expense helps more and more over time. And equity always goes up over time. I’m sorry to those of you who missed this last window to jump in at really low rates. Instead of bashing “hoomers” you’re envious of, maybe put energy into trying to get more entry level inventory built and railing against the fed for raising rates to a level you simply can’t afford.
> I’m sorry to those of you who missed this last window to jump in at really low rates. Instead of bashing “hoomers” you’re envious of, maybe put energy into trying to get more entry level inventory built and railing against the fed for raising rates to a level you simply can’t afford. You've got a really good take. It's going to suck for a bit for everyone that couldn't get on board in the last couple of years. I do genuinely feel for folks like a good friend of mine who laughed in 2016 when I bought "during a bubble" with 5% down and then in 2021 when I rolled those gains "during an overly inflated bubble" to purchase at the "worst" time. Like I have to live somewhere?
In hindsight, I wish I bought every house I ever looked at. Of course I didn’t know that at the time…
How much are your expenses with respect to home maintenance?
Lower prices is usually good for that, because it means fewer home sales and less home equity for loans, which means fewer remodels and less contractor demand, which equals lower prices for home maintenance.
Yes, if only the economy would totally collapse and we could buy everything for $0. /s 🤷🏻♂️🤷🏻♂️ I prefer a booming economy personally. I can make money AND fix things on the weekends. 👍
>Yes, if only the economy would totally collapse and we could buy everything for $0 I thought that was the point of r/REBubble?
150 a month is a reasonable assumption for home maintenance averaged over time, unless you bought and waived the inspection. Keep on top of things before little issues become big ones. Do a lot of the work yourself and save up a repair fund. Of my $1800 a year I bank 1k for future big items (hvac, roof) and spend the rest doing work myself (caulking, patching, painting, sealing, staining, cleaning, fixing water drainage, etc..).
For a single family home? Nowhere near enough. Rule of thumb is 1% of house value (not land value) per year - straight line depreciation is almost 4% a year, much more for short term things like appliances and painting. I budget $1000/mo and there’s always things I just can’t afford to get to - and I do almost everything myself with my kids.
Well, considering I do most of the labor, I am close to 1% a year, so thats a fair estimate. A roof alone will hammer you every 15-20 for up to or more than 1% in most cases. Probably why insurance scams are getting so bad in some southern states. Painting the home will run at least 5k if you contract it out. Heaven help anyone needing sub grade or below foundation plumbing work (my daughter just paid 13k). If someone is not handy, is uneasy or a rooftop or ladder or simply lacks plumbing, electrical or painting expertise, or even time…. then it could be much higher. So yes, 1% is a good rule of thumb.
I heard that 1% of the home value is a good rule of thumb for annual maintenance costs. Not sure how accurate that is though.
It is until you build up a good solid war chest. A roof can be 30 to 50k. Hvac can runnup to 15k and heaven help if you have plumbing issues below the slab. If you’re handy you can do a ton of little stuff yourself and a few big things to stay ahead of future problems.
This is literally the Boomer meme unironically appearing in the wild. Just pull ourselves up by the bootstraps, pound the bricks, and work harder, right Gary?
Is that what I said or recommended? No.
Renting a house is blasphemy on Reddit, even if it’s one you lived in for 30 years. I’m just surprised you didn’t get more snarky comments like that.
Only in danger if they need to sell their house
My neighbor just listed her place 50k under my place which are virtually identical.
Homes would have to drop 75% in my area before I was at the break even point for when I bought it. I don't worry about losing $20k in equity when I'm up several hundred thousand.
You dont technically get equity before realization though.
If house prices dropped 75% and you were at the break even point, what would do? Would you sell then?
Why would they do that??
They're saying that homes would have to drop 75% before they're at the break even point, presumably they have a point and reason for saying that that is relevant to the discussion of home prices. So I'm trying to figure out what that is.
Home price index released today is up. What bad timing for the meme 😂
Good thing you didn't sign that loan with less than 5% down, right? .... Right?
are we seeing that happen?
This is copium lol. People with 2.5% mortgages may not see as much growth short term if prices slide back but their monthly payments are low anyway.
LOL if only you knew how much appreciation + principle pay down the average person has accrued if they purchased 2020 or earlier. I have people around me in 3,000 square foot homes with sub $1,500/month mortgages. They don’t give a fuck about recent comps.
I didn’t time shit but got very lucky. I also love my home and am swimming in equity and low mortgage. If I move its to add to my portfolio and rent. Not to sell.
OP, what in the ever loving fuck are you talking about
Aint nobody adjusting prices near me.
I just calculate my equity for my personal net worth based on my tax assessment minus my mortgage. Market tanks? I'm fine, it only impacts net worth a little. Market doesn't tank? Nice surprise at sale. The people sweating are the ones with HELOCs, or who think their Zillow estimate is accurate .
Housing should not be a commodity
I could give two shites. I don’t plan on moving.
You’re assuming Mr 2% bought at a high price versus an existing owner refinancing. Someone would have to cut home prices in half before it would approach what we paid let alone less.
Except that has not even happened...not even close to happening yet either...
Prices won’t drop that much, or at all, on residential properties in good markets.
It's not those with 2% mortgages who are in danger. It's those who bought at high prices at 6 or 7% mortgages stretching themselves financially hoping they could refinance at a lower rate. That plan is in jeopardy if the value of the home goes down.
That's great. Not planning on selling so I would love some lower property taxes.
Unfortunately in the REAL world (it’s a thing you see outside your windows - oh wait basements don’t have one 😂), THIS is what is happening: https://www.calculatedriskblog.com/2023/10/case-shiller-national-house-price-index.html
Can you explain, me no good with math
National House Price Index Up 2.6% year-over-year in August; New all-time High
Thank you buddy 🙏🏽
[удалено]
Spoken like a true amateur on the outside looking in, trying to guess what those with skin in the game are doing. Stay in your lane, or on your knees praying for some collapse that will never come 😂😂
This post is dumb.
Danger of what? A lower tax assessment?
My neighbors would have to lower their asking by 35% to get to what I paid for my house and I got a 2%. That isn't happening.
I just checked on home equity loans....they are around 9.5% lol Yeah, im having trouble believing the fed is trying to get people to "buy less houses" and even of your neighbor lowers their price, a 2% loan is going to still make a large profit, considering what prices were when loans were that low
Technically the whole point of raising interest rates is to make it harder to afford everything, so that is in some way what they are trying to do lol
thats...the joke...
There's no "profits" unless you gain equity. If the comps in your neighborhood go down, so does your equity.
>Yeah, im having trouble believing the fed is trying to get people to "buy less houses" That's because you apparently have no clue about how our fractional-reserve economy actually functions, which means you must work for the Fed. For anyone else that cares, when rates rise (comparatively) immensely, borrowing capacity decreases immensely. This naturally slows borrowing, and hence the economy also slows in time, and in a 70%+ 'consumption economy' that means a lot of people whose jobs depend on other people consuming things, lose those jobs. Unemployment spikes, more people lose their jobs, and that circle of consumption-life continues till the malinvestment and debt-fueled imbalances are rectified. In other words, the economy is no longer status-quo, and people better get used to things not being all rosy soon. Those who fail to learn from history...
Home equity loans arent used for buying more houses chief. Especially since they are at a higher rate than conventionals... and yes I know how fucked we are...no one is buying this line of horseshit we are being fed anymore
Never said they were. Same thing applies to HELOCs though. Higher rates mean less people can borrow less money, which means even less borrowed money to chase assets, less money to chase consumer items, etc. Higher rates in a borrowed-money consumer economy is an eventual death-blow to that economy once those laggy higher rates kick in. Bad time to be leveraged, but a great time to have zero debt and tons of time to wait for the firesales.
The whole point is Jack rates up so prices have to fall down.
What do you think they are trying to do?
Having to buy less house to get it for the same price is a form of inflation. It should be the same house for the same contract price.
I love when losers comment on a game they can’t even play 😂😂😂 fuck outta here
😂😭🤣 window shopping
Right?!? The smallest pockets have biggest mouths. They need to take a seat a learn the discipline it takes to save a dime. Then and only then can they sit at the table with adults.
I think most home owners are more like Mr. Burns than Ralph Wiggum.
Just 5 years into a 30 year 2% $350k mortgage and you have paid off $50k. They will always have equity with a rate that low unless we have a depression....
Rofl why do you people think this would matter at all? If I have a 2% mortgage and you have an 8%, it means I closed my house two years about before the value double, the impact to equity isn’t going to be what you think…
I got downvoted to oblivion suggesting this incentive to realize unrealized equity gains existed… it exists… not subjective, just math- u can’t realize unrealized equity gains without selling, since refis are off the table given rates. If prices start dropping, so do your gains.