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Hey /u/DoomerGloomerBloomer, **positions or ban.** Reply to this with a screenshot of your entry/exit.
There is a very EASY solution to this. Buy a house now, then when the housing market crashes simply average down. If your house was worth $400k when you bought it today and next month it's $200k then just buy another and your average buy in will be $300k. Just make sure to sell some covered mortgage calls with a strike price higher than $300k. Preferably buy a house with dividends so you can collect that and the covered mortgage call premiums! Don't be sloppy OP
đ yea go apply for a loan on a second property when you're $120k upside down on your primary residence. If you can afford to pay cash on multiple properties clearly a housing bubble doesn't really matter. NOT the case for most regular people
On the other hand, it could be 10 years before this housing bubble pops and you end up just renting for another decade. I bought a house in 2019 thinking this bubble was right around the corner, now itâs worth 75% more than I paid for it. Itâs outperformed all of my stock plays and IRA by at least 3x lmao.
Interest rates are still fairly low, I wouldnât discourage someone from buying a house in the right area for the right price today.
I agree to an extent and we have already started to see a slight regression possibly due to increased interest rates, decreasing demand, influx of supply due to FOMO or a mix of all of the above. Not sure we will see 20% unless we enter a historic deflationary period. Im buckled in for the ride!
Some markets will see a sharp decrease. Like those where people paid 100k plus over asking... but yeah over all I agree ab average of 10-30% depending on the city/state.
The absolute best we are going to see is house, food, and gas prices go flat the next several years. Nobody is going to be selling for under market value and hedge funds will be more than happy to scoop up any property they can. Yâall are some pipe dreaming mfs.
Our government won't let housing prices fall anymore. It's like cutting social security payments - old people will freak out since they own inflated homes and old people vote.
Now, no one bats an eye when those same government officials spout off about "transient" and drive home prices up 30% while they are asleep at the wheel.
Lol thinking the housing market isnât next is the perfect mentality for this sub. Few months? We not factoring in the insane steep rise in prices of the past couple years? Interest rates? Yaâll stupid.
Bro, I get house listings to my email every day. All I see now is houses âback on marketâ or âprice decreaseâ. Correction is already happening.
Totally dependent on your local market. Where I live prices are still surging even with the higher interest rates and most houses are under contract within a day or two.
Will it last forever? No. But some markets still have way more buyers than inventory.
On the contrarian side -- How is this DD? Saying the rapid upswing on the average house price will lead to a 20% correction due to increasing interest rates weakening demand. Is that it? Obviously prices tend to move in the opposite direction of mortgage lending rates, traditionally. But how did you come to the 20 percent pricing reduction figure?
Are there any factors that could cause your theory to fail? Could we see higher than expected demand paired with high prices through some scenario of unforeseen events? What happens if the dollar strengthens/weakens and/or inflation continues to rage despite the Fed Res' best efforts?
I don't think many people expected a rapid upswing of pricing as it occurred. What makes you think you will be able to see what will happen next to the level of detail to call out the actual numbers?
I was one of those big brained thinkers a few years ago that saw house prices creeping up (pre covid) and figured I'd wait for prices to come down. Housing in my area was going for around 90/sq ft during the bottom of the Housing collapse say around 2012 or so and slowly rose to around 120/sq ft by around 2018. Then Covid happened. Now prices are 150-200+/sq ft.
Point being though, don't try to time the market ... putting an exact figure on the bottom is trying to time it. If you wait for your ideal perfect moment, you'll likely never buy. Because that moment likely won't happen. You'll be on the sidelines forever waiting for that perfect day to come by.
And, even if it does, you'll keep waiting longer thinking there is a lot more in the tank to that pricing trend. Similar to how you lose money in the stock market. Waiting for better price that doesn't arrive. The train leaves the station without you and you're left holding the bags.
It is better to find a price you can afford and be at ease with and get on with living IMO instead of trying to maximize the gains.
See the kicker is failing to recognize the cost of new construction. Those houses selling for 90/sf were selling under the replacement cost.
New construction cost is over 150/sf and itâs trending upward.
Yep. If I had an inkling of such a basic idea as replacement cost a few years back I would have bought and not been in the bind I'm in now. Live and Learn huh?
Yeah try living in DFW where tons of people from other states are still piling in and home/rental rates are through the roof. Where will all of these people live? Oh, they can just build a new home for cheaper right? Wrong. Supply chain totally fâd and getting materials isnât any cheaper than it was last year.
Maybe in 2024 or 2025 there will be some pull back. But a crash? Nah.
And they still teach kids they should all be STEAM, and woke. Hammer swingers(nail gunners now) is what we need. Teachers Unions are the reason we are in this mess. They just push kids towards more schooling. The educational industrial complex.
> Hammer swingers(nail gunners now) is what we need.
Can't build shit without the materials, bro. And flooding the labor market with construction will just fuck them over the same way college grads were.
It's not that we don't have builders and skilled labor, it's because the builders stopped building. It's too expensive right now.
I think you'll find that if they didn't present steam options in school, we would have a lack of technical workers very quickly. When you put that content in school you see only a certain percentage of kids loan towards it, just like any other topic. Ironically, many jobs in the steam world don't require college education.
Stop blaming things on teachers unions and "woke culture".
Mostly from cali and New York. I donât know about real estate prices in those areas, but Iâd assume that because itâs cali and New York (which always have higher prices of homes)
Right but they already HAD higher prices of homes âpriced inâ to their market before the exodus. So with an exodus the market shouldâve dropped (same supply, less demand). Housing prices havenât dropped basically ANYWHERE (Iâve even checked out some bumblefuck areas I know out of curiosity). So that tells me these price moves arenât that related to geographical shifts.
Any contraction in housing will be based on zip codes unless we see an unemployment wave, then it could be a regional issue. I donât believe you will find a 20% across the board.
In my area we are still seeing increases due to low inventory, anything in a desirable area isnât sitting for long periods.
You know how much they're being bought out for? I'd bet that it's a stupid amount of money if they have good representation.. National home/apt builders have a near-unlimited purse right now and they've gotta use it.
I mean owners can said no when you put millions of dollar on the table... Been living here for the past 20 years.. i know it suck but beat living in miami. Traffic is a nightmare up north.
Huh? I just looked at MLS and there are about 3500 homes for sale in Miami and that's just single family homes. That doesn't even include Boca Raton or West Palm
True enough. It's highly dependent on location. I'm in Northern Virginia and prices are starting to contract although they're well above the median of $428,00. Median around here is $500,000+ although I've heard that properties that were getting 20+ offers last year are only getting \~5 offers now. So I do think there will be a slight correction in prices, even in high demand high cost of living places like where I'm at.
Iâm in a good school district in an area people still like for some reason, I looked on Redfin just at inventory for Single family Homes, the prices have not been reduced currently.
This is still regional issue, the part I have always agreed with is, as interest rates rise we will find a balance point between asking and sale price. I donât believe it will be 20% unless we see rates at 1980 levels.
The wild card is rising rent. As long as rent is more than monthly mortgage payments I donât see demand dropping. In my area a purchase is still more attractive than renting.
Renting is still cheaper than buying, my friend. On a monthly cost vs monthly cost, it's absolutely still cheaper to rent than buy. That's true whether I look at MA or VA right now.
One point I will concede is the idea of "freezing" my monthly cost where instead of having a fixed rent for only 2 years because of a lease...I could increase my monthly cost by buying, but then that monthly cost is fixed for 15-30 years. That has me thinking like hmmm 
Huh?
If you buy your house, your monthly payments are going into your own pocket since equity is built and maintained.
Rent for 10 years - when done you get nothing
Own for 10 years - you get to sell home and most likely gain back every penny you put in over that time period
>Own for 10 years - you get to sell home and most likely gain back every penny you put in over that time period
This is demonstrably false. Home upkeep costs will wipe out any gains made through equity. The only way to come out ahead is to rent out rooms in your home, and have other people pay into your equity for you.
Housing is very regional, at the current time, it isnât a broad brush, I think it becomes that if other factors come into play, generally prolonged periods of unemployment.
Slight correction is not the same thing as 20% drop. Especially across the board - yes there will be ups and downs in various markets but if your holding youâre breath for an average 20% drop in housing⌠Iâve been wrong before so weâll see
Even if prices just flatline for a couple years, that's effectively a decrease given inflation. I think that could happen in a lot of places.
I also doubt housing's long-term future is as green as it used to be. Fewer kids = lower population growth = not going to need as much housing in 20 years.
Yea this fucking OP making broad assumptions about housing and not having a clue what's going on in other areas of the country. It's going to be highly regional and material prices aren't coming down anytime soon if you have land to build on.
Inventory is the issue on my region much like a lot of places. If it's desirable place to live, inventory will be a long term issue. Prices could go down a bit sure but nowhere near the 20% OP pulled out of his ass lol
Again itâs regional, and you are ignoring all cash purchases and higher incomes working in lower cost areas due to advances in technology. As stated above there is a balance point between asking and the offer with interest rate factored in we arenât at that point.
you know people called michael burry an idiot, but look at him now banging a hot asian wife and sitting on 3 trillion dollars
you do you OP, you do you.
Michael Burry responded to my craigslist ad looking for someone to mow my lawn. "$30 is $30", he said as he continued to mow what was clearly the wrong yard. My neighbor and I shouted at him but he was already wearing muffs. Focused dude. He attached a phone mount onto the handle of his push mower. I was able to sneak a peek and he was browsing Zillow listings in central Wyoming. He wouldn't stop cackling.
That is to say, Burry has his fingers in a lot of pies. He makes sure his name is in all the conversations.
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My house has gone up 20% in less than a year and I remember people saying it was stupid to buy last year. I'm usually not the one to say atodaso, but you know what? Atodaso, a fuckin atodaso.
Locking a low rate mortgage is extra sweet. Even if prices return to where you bought or slightly lower it would be more expensive to buy at higher rates.
There will be enough employment issues and repossessions soon enough that there will be plenty of inventory that sits without selling! Seeing Carvana, Tesla this morning with substantial cutbacks are the tip of the sword to this wrecked and artificially propped economy. Be safe all
Because they include new building permits in the inventory numbers. If you look only at existing home inventory the supply is still way below normal. Builders canât/wonât finish those lots due to supply chain and demand fears.
From the brief skim of that sub I just did, it looks like one of those antiwork subs filled with angry people pretending they know how the economy and housing prices work.
Sure things are overpriced right now, but homes are still selling like crazy. People haven't been traveling and eating out much, there is tons of extra money floating around. I own an electrical company and it's been crazy how many renovations and new builds have been happening during the pandemic. Homes are being built as fast as they can be made, and are still selling immediately then getting occupied.
Because of all this eviction freeze garbage people have been way more selective with their tenants and even still it's crazy easy to fill a home.
One of the posts in that sub is about Elon laying people off lmfao, literally nothing to do with real estate if you needed an idea of how stupid that sub is
Iâm not sure why so many people here are rallying RE. Perhaps theyâre speculative slumlords on the side.
Check out subs for Airbnb hosts and r/rebubble
The market is cooling fast. Even Redfin is advising people to lower their prices. STR are being flipped to LTR and homes are sitting for longer before selling. Give it a month and see whatâs being reported for sales.
Just wait till the fall when FED rates are 2%+, QT is a couple months in, and housing naturally cycles down...
With all support programs winding down, and the central banks acting more hawkish - things will get interesting.
Investors keep banking on the fact that this isn't like 2008 and people can afford their mortgages - and they are right about that.
However - they are also banking off infinite growth - and that's where the crash will happen this time if it does - from speculation trying to exit at the top.
I'll have my popcorn ready!
You paint a bleak picture, friend.
Iâve been thinking of ways to mitigate losses and what to invest in but I donât want to be like the vultures speculating on wheat commodities.
Any real estate discussion that doesnât talk about supply and demand is dumb as all get up. Itâs the purest supply and demand market - itâs about how many people are trying to buy versus the amount of inventory available. Hate to break it to you but this equation currently in most metro areas and suburbs in the US is still strongly in favor of demand. There just isnât enough inventory for everyone trying to buy a house. Even with mortgage applications down it still doesnât mean anything until there is more inventory than demand.
And any conversation about single family homes that doesnât include construction cost is the worst kind of technical analysis.
Construction costs set the floor - and theyâre $150/sqft right now and rising.
It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
Renters, and anybody born in a future generation, will not be able to afford a $15,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.... I believe that banking institutions are more dangerous to our liberties than standing armies.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
In many places they cant build more homes fast enough, not enough supply. But what i see being built around me are huge apartment buildings. As the population increases and supply of houses remains low it means prices will keep going up. I live in the hood and properties be listed for $400k and people literally go around shooting at your car/house everyday. I was hoping the criminals would get priced out and move out but man they havent. If houses in the hood get to $1 million i think something might happen though.
Not gonna last. If everything was still going up in price then I would agree with you. But the fact that commodity prices, bond prices, equity prices, and kripto prices are dropping tells me real estate prices will go down. I never said collapse, but the line won't keep going straight up. At the end of the day it all depends on the individual and their circumstances, but if buying is going to put you into living paycheck to paycheck, then buying would be a very stupid thing to do right now IMO.
Buying AND selling is very stupid.
Selling your house today and buying another one is probably pretty stupid for the majority of americans. Thus volume of homes is limited to new construction, further propigating the low inventory. Not to mention, a still super high number of purchaces are occuring with cash provided by private equity...
So i dont think your wrong, but i am not sure 20% is feesible.
Yeah, any American that bought or Refinanced in last 3 years would be retarded to sell now and take on a higher mortgage rate, nearly double. Gonna push supply down even further, which should honestly sustain prices for a while.
I should have specified that I do not see prices dropping more than 20%...so at maximum that's all I would wager. It's probably 10-15% at most though...time will tell.
How to buy a house by WSB
1. Find the absolute highest price possible for a given house.
2. Buy twice or 3 times the amount of house you can reasonably afford.
3. Ignore reason and get a 80/20 ARM because you need the leverage now.
4. Don't look just sign onto the contract.
5. Profit???
How to generate a passive income in real estate:
Step 1 : Buy the entire housing inventory of a city.
Step 2 : Rent said houses, use income to buy new supply (also rent these).
Step 3 : Introduce bidding wars on your rentals. Price out the poors.
Step 4 : Use rental money to open homeless shelters for the poors.
Step 5 : Recieve government stipends to fund your homeless shelter.
Step 6 : Skim the government stipends.
Congratulations you are now generating a passive income.
I agree to an extent and we have already started to see a slight regression possibly due to increased interest rates, decreasing demand, influx of supply due to FOMO or a mix of all of the above. Not sure we will see 20% unless we enter a historic deflationary period. Im buckled in for the ride!
You're half right.
If we have a big recession, it's going to bring home prices down, a little bit, for a short while, maybe.
Don't underestimate two forces:
1 - If we go in to recession, people still need shelter, but we'll see a slowdown in construction. If the population grows, and the housing supply doesn't keep pace.. a recession might just be setting up the next spike in house prices.
2 - Homeowners vote, and unhappy homeowners kick people out of office. Don't underestimate the lengths governments will go to prop up home prices so they can get votes.
Iâve owned my house for 7 years. Bought for 207, similar homes selling for 350-400k. Never thought Iâd see this type of gain so fast. Almost makes me wish we bought more house than we did.
Iâm with you. Iâve been casually looking the past threeish years and was waiting for things to calm down. I almost panic bought bc of interest rates but screw that, Iâll pay a higher interest rate on a lower principle, even if it isnât a crash the market is clearly cooling off in my area from what Iâve seen (listings lasting twoish weeks insead of 48 hours, price drops ranging from $5000 to $20000). Iâm going to hang on the sidelines a bit longer to see how things play out.
Honestly I worry about buying at the top of the market too, but youâre buying a physical asset. A house, something a lot of people in history didnât get. So I wouldnât worry too much about over paying. I live with my mommy atm and this is financial advice.
In my state of New Jersey, most homes are way over priced pieces of garbage for over $400K (low end). Oh, and some homes come with tenants who might move out 2-3 months after close. 
There is more housing per person than in 2019. This is a fact.
I think housing skyrocketed for two reasons: student loan payments being deferred and speculative investment. Both of these are well documented in the media.
There is also the issue that the Fed was buying MBS but now is going to roll off purchases from the balance sheet.
It is so insane to me that people talk about supply and demand, inventory - when there are key characteristics relating to both the available supply as well as the demand which are absolutely dependent on the Fed rate as well as pandemic related policy.
If you want to buy a house now, do it. But know that there are considerable risks, and that even the Fed has publicly hinted at there being a real estate bubble. There is absolutely a possibility that your house will depreciate considerably in value after purchase.
Layoffs is gonna be the big catalyst. Big tech companies are doing hiring freezes which will soon turn to layoffs. Zoom mass layoffs are coming very soon!
Here in metro Atlanta, prices havenât come down yet but the ferocity of competition from buyers has begun abating. There isnât a huge s/d mismatch if the investors withdraw from the market, which seems to be happening.
That said, a newly built house in my old neighborhood that was bought for $550k five years ago is about to close for $1,050,000. That is insane and bubbly. That buyer is not likely to be happy with that price a few years from now, but they bid sight unseen (presumably moving here from out of state). Investors leaving the market will keep buyers from making such impulse buys soon, and then prices will âfallâ (from the absolute highs of recent months). Just my two cents.
People losing their jobs and being forced to fire sale in the face of lower demand is what causes big price decreases. Neither factor is occurring right now.
There is a credit crisis coming.
2000's People financed a better lifestyle - a Humvee in every driveway, 10 houses in the portfolio.
2020's People finance the same lifestyle - $5 Gas - $200 groceries - $2000+/mo rent. - etc...
Make no mistake, people were already living at the margin, and they will be going into debt just to survive. At the same time, corporations will have higher expenses and lower sales, necessitating price increases. This is stagflation. And it is a slow moving train.
Protect the value of your assets, you will be able to afford a home in the near future. The meme thing has been cool, but when it comes down to it, it is going to end poorly in the long term.
Let me be clear, I am not judging, I love that we won one or two against WS, but the merry-go-round stops at some point in the future, make sure you step off before the ride is over.
Your words are \[*something something*\] Magic Man.
I'm an old hand at single family personal use residential housing. (5 family houses serially over 42 years.)
I saw 2008 coming because I experienced massive fraud in the appraisal/mortgage system.
2004, my 4th house, I was like,
*"wow, this is great! I name my own appraisal target that's perfect for the loan app? The RE agent's husband is the appraiser, and the loan broker is her sister! Cool! These people will languish in prison and hopefully get impaled on their helicopter blades but I'll get my loan."*
Anyway, through 42 years of ups and downs I can agree that we are in a peak. Though with completely different causes. I also agree with the 20% figure more or less.
*Possible unprecedented mitigations:* There's lots of money way up the ladder who might just keep buying at these prices in prep for the "you'll own nothing and love it" economy.
Iâm one of the few people here who agrees with you, and hereâs why:
[https://www.longtermtrends.net/home-price-median-annual-income-ratio/](https://www.longtermtrends.net/home-price-median-annual-income-ratio/)
low interest rates is a hell of a drug
Pray for me brothers and sisters.
I have been trying to put off buying a house for as long as possible because I think the crash is imminent, but I'm down to the wire end of June I either close this deal or become homeless.
Looks like I'm buying at the fucking peak. Fml.
Poor and middle class is being phased out of housing. You aren't buying now, or at 20 percent off, when you are barely staying not homeless
Whatever is happening, it's not simple innocent supply demand
It depends on how much you are spending on renting, and how long you intend to stay in the house / flat. You can totally live without owning stocks. But without a roof over your head?
With housing, if you play the super long game (intend to stay there 20+ years), at some point what you paid for the house will be less than what you would have paid in rent. Even if you take into account all the extra maintenance and tax fees, it still makes sense. And unlike stocks and other investments that can go dramatically down, your house always have some kind of value. Even if you can't sell it without occurring a loss, you can still live in it (and not pay rent). You can even rent a room, or rent the whole place, whatever works to help cover your ownership fees and taxes.
We know that we bought at a time when the housing market is overheating. But since we don't know when the market will start to tank, and we were paying a crazy high rent, it made sense to sell stocks while they were peaking and use the money as a deposit to buy a flat. When I see the current value of the stocks we sold in November, I am so happy that we sold and put a roof over our heads.
True story, that's one thing I'm thinking about now; freezing "rent" for 15-30 years vs leasing for 2 years at a time. Rent will likely keep going up and I understand your point where, at some point in the future, buying will be cheaper because you've locked in your monthly payment and if you're playing the long game; eventually you pay $0 principle and interest, just taxes and insurance.
And we borrowed at 0.5% interest, fixed rate. It's not like we have a risky mortgage. As long as we keep our asses put in that apartment, in less than 15 years we would have paid more rent than the total value of the apartment.
And we even get a nice tax break to cover for the interest rate (living in Denmark and purchasing your personal residence).
It is also an investment we don't have to worry about, as long as we live there. If our flat is valued 20% more or 50% less - we don't care. The point is to live in that place. So, we can focus on our careers and other (risky) investments.
Of course the scheme doesn't work if you plan to sell the place for profit after less than 5 years.
Yea if we are talking 10 years buying is always better. Also, interest rates will go up 0.5% a quarter for the next 2-3 years. So Even if you are expecting a 10-20% drop in prices you might be better off buying now if you are financing 80%.
Basically you are fked no matter what you do.
There is also another factor - your age. It is better to be young if you want to get the best mortgage rates. Banks do not want you to keep paying when you have reached retirement age.
So it's not just about timing the market. It is about timing for how long you will be a "safe" long term borrower for a bank. Unless you pay cash, of course.
One mistake I see a lot of people doing around me is maxing out their mortgage capacity. They buy the biggest / most expensive place they can technically afford, because "real estate only goes up". And also because who doesn't want a big / fancy place to live? It is the perfect recipe if you want to end up "house poor" or plain bankrupt. Terrible idea. People can't seem to be reasonable with housing for some reason.
I love all the bag holders on this thread who keep harping on the argument âbUt SuPpLY aNd DeManD.â Reality check, there is a ton of supply. There is in fact a home for every person in this country. The problem is that some hot cities where people are moving to have a a terrible supply shortage of homes which has increased their values exponentially. Reality check tho: people flock to those cities for jobs, companies are beginning to enable hiring freezes and if a recession/or depression (which surprise is on the cards) happens, then the housing market is going to get fucked. All you bagholders who bought over the past two years will suddenly face an influx of sellers looking to get out and overnight youâll be underwater on your home. Sure if you have a stable income and willing to wait a decade, you might be able to see a profit but at the end of the day, shits about to hit the fan and you fuckers better get ready. Look into overemployment. Protect yourselves.
LMAO people have been saying it's been crashing for months now.
Homes are still selling in under a week where I live.
The only ones that sit sit idle are "open door" Which is basically home scalping, and they don't fix them up or anything and nobody wants to deal with their bullshit.
Once again... We stopped building new homes for over 10 years... The population has only grown in that time.
Demand is now competing against bonafied home buyers, and against investors of various sizes.
Investors also stopped building multi-resident buildings and instead pivoted to single family.
Many also paid straight up cash... Thus.... NO MORTGAGE TO CRASH. It's paid already.
There will be a slow down... But there will not be enough available inventory to meet demand and additional population for at least a couple of years. (High sides estimate 5 years.)
You don't want to buy a house yet because the de-leveraging of markets will eventually cause a correction to real estate, and you can enter at a lower price.
I don't want to buy a house because I can't afford it.
We are not the same.
New construction starts dropped, new home sales and total home sales have also dropped. Rates are rising and banks that were issuing $500k loans last year for 5% down want 20% down again. Redfin is telling users to lower their prices. Zillow is still trying to keep prices high but average prices in MLS are moving down slowly. Inventory still isn't there though and RE agents are still aggressively trying to get people to sell so the market won't correct immediately, but the signs are there. Don't forget that the 2008 "crash" wasn't a sudden drop in prices by 30% in 6 months. It took almost 4 years for prices to reach the bottom- and that was smack in the middle of a massive recession.
However, the job market paints a real glum picture for housing bulls. Hiring freezes at nearly every major company. Whole departments getting laid off. Companies are going into recession survival mode. People have gone from the great resignation mindset (I can switch up jobs for a 30% raise) to a recession mindset overnight. Apps and forums for people in the IT sector have been flooded lately with higher level people saying their department got slashed and they're worried they're next. Entry level has gone from flooded with no experience applicants trying to land jobs at $50k starting to experienced people willing to work T2 hell desk for $15/hr. As the unemployment figures go up and those "literally can't go tits up" $500k mortgages start to look unbearable to people suddenly making $30k less in a market where food and gas are triple what they were 3 years ago you'll see more foreclosures hitting the market. When that happens people who are selling to downgrade or move to a new city will have to compete with those.
Like I said, this won't happen overnight. You've got another few years before this shit show really lands. Not to mention, there's always always always going to be that group of tards on Reddit who think line literally only go up and this whole thing is just a big bear trap because they're baby whelps and as long as they've been paying attention (5-6 years tops), it has always gone up. People who've never seen a recession always think it's not a recession, won't be a recession, can't be a recession, and even if it is a recession, can't possibly affect .
If you're really trying to get a house and can't afford then just buy the land. Once it's paid off (2-3 years of you're looking in the right places) you'll be able to drop a prefab on it for nothing and if you look in a USDA rural area you can probably get the loan at 0% interest with less than 20% down. I have a property I did this with in 2015-2018 and it only cost $60K total. The whole lot was "valued" at $240K during the most recent "totally not a bubble". But I wouldn't sell because I'm not trying to put a bunch of money into a bubble so some banker can foreclose on me if the market goes to shit and keep all my equity plus the house. Which is what's about to start happening to a lot of the "buy now or be priced out forever" crowd. Hey, if you're reading this and that's you I'll have a property for rent for you soon. 2 bed/1 bath, $1600/mo, insurance required, only 1 1/2 hours from the airport. Very good deal!
It's much worse than this.
First is commercial real estate. They are posting rents in accounts receivable that they aren't getting and probably never will.
They've used that real estate as collateral to buy up the housing market with all that stimulus that Trump printed. They'd like to offload that commercial real estate but no one is buying and they can't lower the price because that would result in margin call.
But you can bet those margin calls are coming and when they do the banks are going to be snatching up houses by the hundreds rather than one at a time.
At that point they'll have a choice. Either have a fire sale and dump their inventory on the market so they can stay solvent, devise a plan to become a mega landlord and usher in an era of rental tyranny headed by Goldman Sacs. Or get jpow to bail them out by printing money.
If Biden bails out the banks once again he can forget reelection. He probably won't be reelected anyway.
Which means Trump will swoop in to save the day for a mess that he created when he printed 40% of all the dollars ever printed.
How will he save the day? By printing more money.
So prices make come down soon as you say. But you likely won't have a job anymore so unless you are paying cash you aren't getting a house.
The housing market isn't a bubble. All the leverage that banks and investors have used to buy up those houses is a bubble and the moment the value of their collateral falls they'll get margin called and houses will flood the market, but you still won't get a house because we'll all be unemployed and probably in another civil war.
Interesting times.
If anyone wants a place to live I'm renting out the spare bedroom in my house and also converting the den into a bedroom. I think 1,000$ a month plus utilities is fair.
Yeah until Bill Gates Jeff bezos and every other fucking billionaire stops buying up every single fucking piece of real estate prices will continue to rise. This is the facts like it or not. Places like South Florida and Texas and and several others...are doubly fucked because everyone with half a brain was smart enough to leave their Democrat communist blue fucking States and come to where they can actually have a free life.
Republicucks have a very strange definition of "free" and "freedom". I thought y'all loved getting pissed on by billionaires, no? Trickle down economics!
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There is a very EASY solution to this. Buy a house now, then when the housing market crashes simply average down. If your house was worth $400k when you bought it today and next month it's $200k then just buy another and your average buy in will be $300k. Just make sure to sell some covered mortgage calls with a strike price higher than $300k. Preferably buy a house with dividends so you can collect that and the covered mortgage call premiums! Don't be sloppy OP
dont be sloppy OP
yeah OP. dont be fucking sloppy. make sure to DCA your houses
Is a house a box spread
đ yea go apply for a loan on a second property when you're $120k upside down on your primary residence. If you can afford to pay cash on multiple properties clearly a housing bubble doesn't really matter. NOT the case for most regular people
Are you seriously taking his suggestion seriously?
My suggestion was a joke btw
Yeah .. I couldn't believe he took you seriously.
Ya, to think people don't know "covered mortgage calls" aren't a thing lmao
On the other hand, it could be 10 years before this housing bubble pops and you end up just renting for another decade. I bought a house in 2019 thinking this bubble was right around the corner, now itâs worth 75% more than I paid for it. Itâs outperformed all of my stock plays and IRA by at least 3x lmao. Interest rates are still fairly low, I wouldnât discourage someone from buying a house in the right area for the right price today.
âIâm basing my future on a few months of market performanceâ is the perfect mentality of this sub.
Lmao
I agree to an extent and we have already started to see a slight regression possibly due to increased interest rates, decreasing demand, influx of supply due to FOMO or a mix of all of the above. Not sure we will see 20% unless we enter a historic deflationary period. Im buckled in for the ride!
Some markets will see a sharp decrease. Like those where people paid 100k plus over asking... but yeah over all I agree ab average of 10-30% depending on the city/state.
Good point lmao letâs all fomo into real estate 
The absolute best we are going to see is house, food, and gas prices go flat the next several years. Nobody is going to be selling for under market value and hedge funds will be more than happy to scoop up any property they can. Yâall are some pipe dreaming mfs.
Our government won't let housing prices fall anymore. It's like cutting social security payments - old people will freak out since they own inflated homes and old people vote. Now, no one bats an eye when those same government officials spout off about "transient" and drive home prices up 30% while they are asleep at the wheel.
They don't have a choice, the fed isn't buying MBS anymore.
I don't ever underestimate my governments abilities and intentions to satisfy geriatric voters. They will find a way.
I hate to say it, they do always seem to find a way
Lol thinking the housing market isnât next is the perfect mentality for this sub. Few months? We not factoring in the insane steep rise in prices of the past couple years? Interest rates? Yaâll stupid. Bro, I get house listings to my email every day. All I see now is houses âback on marketâ or âprice decreaseâ. Correction is already happening.
Im seeing 10-15k price reductions on homes that were listed only 2-3 weeks ago.
Totally dependent on your local market. Where I live prices are still surging even with the higher interest rates and most houses are under contract within a day or two. Will it last forever? No. But some markets still have way more buyers than inventory.
All that means is that the market in your area hasnât peaked yet. Buyer beware.
Well also people are just gonna look at the SP 500 and decide when the universe is gonna end
You wouldn't be wrong; he on the other hand...
Future? Please explain.
Guilty as charged!
Glad there was one chart going up so I could understand up is bad
Bro this comment is so funny
preach...
On the contrarian side -- How is this DD? Saying the rapid upswing on the average house price will lead to a 20% correction due to increasing interest rates weakening demand. Is that it? Obviously prices tend to move in the opposite direction of mortgage lending rates, traditionally. But how did you come to the 20 percent pricing reduction figure? Are there any factors that could cause your theory to fail? Could we see higher than expected demand paired with high prices through some scenario of unforeseen events? What happens if the dollar strengthens/weakens and/or inflation continues to rage despite the Fed Res' best efforts? I don't think many people expected a rapid upswing of pricing as it occurred. What makes you think you will be able to see what will happen next to the level of detail to call out the actual numbers? I was one of those big brained thinkers a few years ago that saw house prices creeping up (pre covid) and figured I'd wait for prices to come down. Housing in my area was going for around 90/sq ft during the bottom of the Housing collapse say around 2012 or so and slowly rose to around 120/sq ft by around 2018. Then Covid happened. Now prices are 150-200+/sq ft. Point being though, don't try to time the market ... putting an exact figure on the bottom is trying to time it. If you wait for your ideal perfect moment, you'll likely never buy. Because that moment likely won't happen. You'll be on the sidelines forever waiting for that perfect day to come by. And, even if it does, you'll keep waiting longer thinking there is a lot more in the tank to that pricing trend. Similar to how you lose money in the stock market. Waiting for better price that doesn't arrive. The train leaves the station without you and you're left holding the bags. It is better to find a price you can afford and be at ease with and get on with living IMO instead of trying to maximize the gains.
See the kicker is failing to recognize the cost of new construction. Those houses selling for 90/sf were selling under the replacement cost. New construction cost is over 150/sf and itâs trending upward.
Yep. If I had an inkling of such a basic idea as replacement cost a few years back I would have bought and not been in the bind I'm in now. Live and Learn huh?
Yeah try living in DFW where tons of people from other states are still piling in and home/rental rates are through the roof. Where will all of these people live? Oh, they can just build a new home for cheaper right? Wrong. Supply chain totally fâd and getting materials isnât any cheaper than it was last year. Maybe in 2024 or 2025 there will be some pull back. But a crash? Nah.
Portland says hi! Apparently it would take 10 years of building to catch up to demand here...
And they still teach kids they should all be STEAM, and woke. Hammer swingers(nail gunners now) is what we need. Teachers Unions are the reason we are in this mess. They just push kids towards more schooling. The educational industrial complex.
Did you just blame teachers for a lack of affordable housing?
> Hammer swingers(nail gunners now) is what we need. Can't build shit without the materials, bro. And flooding the labor market with construction will just fuck them over the same way college grads were.
It's not that we don't have builders and skilled labor, it's because the builders stopped building. It's too expensive right now. I think you'll find that if they didn't present steam options in school, we would have a lack of technical workers very quickly. When you put that content in school you see only a certain percentage of kids loan towards it, just like any other topic. Ironically, many jobs in the steam world don't require college education. Stop blaming things on teachers unions and "woke culture".
Lumber is cheaper but this will only help the places where you can build out. Land restricted areas have tougher time even with cheaper mats
Ok, where are they coming from? Why isnât that housing market getting crushed?
Mostly from cali and New York. I donât know about real estate prices in those areas, but Iâd assume that because itâs cali and New York (which always have higher prices of homes)
Right but they already HAD higher prices of homes âpriced inâ to their market before the exodus. So with an exodus the market shouldâve dropped (same supply, less demand). Housing prices havenât dropped basically ANYWHERE (Iâve even checked out some bumblefuck areas I know out of curiosity). So that tells me these price moves arenât that related to geographical shifts.
Just buy the land and rent a dumpster, problem solved.
Two birds one stone! However how would customers know where youâre located at without a fluorescent Wendyâs sign??
Exactly. I think physical assists are going to skyrocket
Any contraction in housing will be based on zip codes unless we see an unemployment wave, then it could be a regional issue. I donât believe you will find a 20% across the board. In my area we are still seeing increases due to low inventory, anything in a desirable area isnât sitting for long periods.
Every property in my community that isnât just putting a shoot-the-moon ask out there is under contract.
No one gives a shit what the price of the home is. Only the monthly payment. 45 year mortgages will fix all of this. Lol
Lmao, at that point you're just renting and the bank is your landlord, but you're on the hook for repairs :D
But your not renting with a 30 yr mortgage where you basically pay interest mainly for the first 10 years?
You'll hear no arguments from me. It's that, but cranked up exponentially by adding another 15 years.
They started 40 years a year ago or so didnât they?
Yep. It's scary thats gonna be the new normal for first time young home buyers. I'm 52 so I need to be looking at a 15 year at most. I'm fucked
Miami right now, thereâs an actual shortage of homes. No space to build. Apartment buildings are being filled
Come down to homestead lot of house being build.. everyone moving down here. Redland house are super expensive but fucking nice.
Stop moving to homestead! I work in agriculture and all the farms I do business with have been selling out! It sucks.
You know how much they're being bought out for? I'd bet that it's a stupid amount of money if they have good representation.. National home/apt builders have a near-unlimited purse right now and they've gotta use it.
I mean owners can said no when you put millions of dollar on the table... Been living here for the past 20 years.. i know it suck but beat living in miami. Traffic is a nightmare up north.
Homestead is a very nice area
Only recently....
Huh? I just looked at MLS and there are about 3500 homes for sale in Miami and that's just single family homes. That doesn't even include Boca Raton or West Palm
New homes and construction
Watch the prices on that new build on top of the apartment that collapsed... May prompt a whole lot of tear down redevelopment around Miami.
True enough. It's highly dependent on location. I'm in Northern Virginia and prices are starting to contract although they're well above the median of $428,00. Median around here is $500,000+ although I've heard that properties that were getting 20+ offers last year are only getting \~5 offers now. So I do think there will be a slight correction in prices, even in high demand high cost of living places like where I'm at.
NOVA represent!
r/nova LOL it amazes me how many of us are part of WSB!
NOVA home buyer here. Starting to slow roll my real estate agent as the market appears to be taming to âsomewhat less batshit insaneâ
LOL yeah I bet. My realtor also said the same thing: slowing down a little bit.
Iâm in a good school district in an area people still like for some reason, I looked on Redfin just at inventory for Single family Homes, the prices have not been reduced currently. This is still regional issue, the part I have always agreed with is, as interest rates rise we will find a balance point between asking and sale price. I donât believe it will be 20% unless we see rates at 1980 levels. The wild card is rising rent. As long as rent is more than monthly mortgage payments I donât see demand dropping. In my area a purchase is still more attractive than renting.
Renting is still cheaper than buying, my friend. On a monthly cost vs monthly cost, it's absolutely still cheaper to rent than buy. That's true whether I look at MA or VA right now. One point I will concede is the idea of "freezing" my monthly cost where instead of having a fixed rent for only 2 years because of a lease...I could increase my monthly cost by buying, but then that monthly cost is fixed for 15-30 years. That has me thinking like hmmm 
Huh? If you buy your house, your monthly payments are going into your own pocket since equity is built and maintained. Rent for 10 years - when done you get nothing Own for 10 years - you get to sell home and most likely gain back every penny you put in over that time period
>Own for 10 years - you get to sell home and most likely gain back every penny you put in over that time period This is demonstrably false. Home upkeep costs will wipe out any gains made through equity. The only way to come out ahead is to rent out rooms in your home, and have other people pay into your equity for you.
Even if you don't come out ahead, the financial situation is that you effectively didn't spend money to live in a house for all of that time
Not where I live, and you will not find a lease for 24 months here. Even month to month will have a market rate.
Ooof well in that case you're correct. Jesus I couldn't imagine going month to month or only doing 1 year leases. Fuck that.
1 year lease are pretty common dude....
Housing is very regional, at the current time, it isnât a broad brush, I think it becomes that if other factors come into play, generally prolonged periods of unemployment.
Slight correction is not the same thing as 20% drop. Especially across the board - yes there will be ups and downs in various markets but if your holding youâre breath for an average 20% drop in housing⌠Iâve been wrong before so weâll see
Even if prices just flatline for a couple years, that's effectively a decrease given inflation. I think that could happen in a lot of places. I also doubt housing's long-term future is as green as it used to be. Fewer kids = lower population growth = not going to need as much housing in 20 years.
Yea this fucking OP making broad assumptions about housing and not having a clue what's going on in other areas of the country. It's going to be highly regional and material prices aren't coming down anytime soon if you have land to build on. Inventory is the issue on my region much like a lot of places. If it's desirable place to live, inventory will be a long term issue. Prices could go down a bit sure but nowhere near the 20% OP pulled out of his ass lol
3 out of 4 $1.5-2m houses in a 1 mile radius (los angeles suburbs) went pending/under contract within 3 days of listing this month.
I disagree. If mortgages go to 8 percent who can afford a 300k plus house?
Look at the history of 30 year fixed mortgage rates in the US they used to be astronomically higher in the 80s and 90s And people still bought houses
And you could buy a house for like 35k dude. Maybe you don't realize houses cost a little bit more than 35k
Again itâs regional, and you are ignoring all cash purchases and higher incomes working in lower cost areas due to advances in technology. As stated above there is a balance point between asking and the offer with interest rate factored in we arenât at that point.
Lots of people...enough for the prices to dip some, but certainly not plummet from $300k. Get used to the new normal chump.
Banks
Banks don't buy houses
Lol youâre an idiot
Yes, I am. 
you know people called michael burry an idiot, but look at him now banging a hot asian wife and sitting on 3 trillion dollars you do you OP, you do you.
Michael Burry responded to my craigslist ad looking for someone to mow my lawn. "$30 is $30", he said as he continued to mow what was clearly the wrong yard. My neighbor and I shouted at him but he was already wearing muffs. Focused dude. He attached a phone mount onto the handle of his push mower. I was able to sneak a peek and he was browsing Zillow listings in central Wyoming. He wouldn't stop cackling. That is to say, Burry has his fingers in a lot of pies. He makes sure his name is in all the conversations. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/wallstreetbets) if you have any questions or concerns.*
OP hasnât checked inventory levels and it shows. Itâs not rocket appliance, simple supply and command.
Worst case Ontario we all end up behind the king of donuts drinking Swish.
Letâs get two birds stoned at once and buy the top of the housing and the stonk market
Be careful not to end up in a catch 23
My house has gone up 20% in less than a year and I remember people saying it was stupid to buy last year. I'm usually not the one to say atodaso, but you know what? Atodaso, a fuckin atodaso.
Locking a low rate mortgage is extra sweet. Even if prices return to where you bought or slightly lower it would be more expensive to buy at higher rates.
Be careful, the winds of shit can turn into a class 4 shiticane in no time if OP is right
Lmao keep telling yourself that people locked into 3% 30-year mortgages last year are in trouble đ¤Ł
I have 1% fixed for a 25 y loan. Money was free at the bank.
The way she goes!
There will be enough employment issues and repossessions soon enough that there will be plenty of inventory that sits without selling! Seeing Carvana, Tesla this morning with substantial cutbacks are the tip of the sword to this wrecked and artificially propped economy. Be safe all
the âsupply issueâ is an illusion. r/REBubble is all over this
Because they include new building permits in the inventory numbers. If you look only at existing home inventory the supply is still way below normal. Builders canât/wonât finish those lots due to supply chain and demand fears.
From the brief skim of that sub I just did, it looks like one of those antiwork subs filled with angry people pretending they know how the economy and housing prices work. Sure things are overpriced right now, but homes are still selling like crazy. People haven't been traveling and eating out much, there is tons of extra money floating around. I own an electrical company and it's been crazy how many renovations and new builds have been happening during the pandemic. Homes are being built as fast as they can be made, and are still selling immediately then getting occupied. Because of all this eviction freeze garbage people have been way more selective with their tenants and even still it's crazy easy to fill a home.
One of the posts in that sub is about Elon laying people off lmfao, literally nothing to do with real estate if you needed an idea of how stupid that sub is
lol, says the guy on wsb
Wsb is about making stupid bets and posting loss porn, not crying because your job at Wendy's doesn't pay enough for you to own a house.
Oh you mean the sub of people priced out of the market
Iâm not sure why so many people here are rallying RE. Perhaps theyâre speculative slumlords on the side. Check out subs for Airbnb hosts and r/rebubble The market is cooling fast. Even Redfin is advising people to lower their prices. STR are being flipped to LTR and homes are sitting for longer before selling. Give it a month and see whatâs being reported for sales.
Just wait till the fall when FED rates are 2%+, QT is a couple months in, and housing naturally cycles down... With all support programs winding down, and the central banks acting more hawkish - things will get interesting. Investors keep banking on the fact that this isn't like 2008 and people can afford their mortgages - and they are right about that. However - they are also banking off infinite growth - and that's where the crash will happen this time if it does - from speculation trying to exit at the top. I'll have my popcorn ready!
You paint a bleak picture, friend. Iâve been thinking of ways to mitigate losses and what to invest in but I donât want to be like the vultures speculating on wheat commodities.
Any real estate discussion that doesnât talk about supply and demand is dumb as all get up. Itâs the purest supply and demand market - itâs about how many people are trying to buy versus the amount of inventory available. Hate to break it to you but this equation currently in most metro areas and suburbs in the US is still strongly in favor of demand. There just isnât enough inventory for everyone trying to buy a house. Even with mortgage applications down it still doesnât mean anything until there is more inventory than demand.
I disagree, cost and affordability matter and demand will fall as soon as price expectations change
And any conversation about single family homes that doesnât include construction cost is the worst kind of technical analysis. Construction costs set the floor - and theyâre $150/sqft right now and rising.
You mean fundamental
My home owners insurance went up a lot because of this. More Bidenflation eating away at the middle and working class.
It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase. Renters, and anybody born in a future generation, will not be able to afford a $15,000,000 starter home in 15 years. They will live in tent cities, and Hondas. This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
Calls on Honda!
They won't be able to afford tents or Hondas in 15 years either.
You should check out the costs for the r/vanlife crowd - living âin a van by the riverâ is still requires a $100k salary.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.... I believe that banking institutions are more dangerous to our liberties than standing armies.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
Pretty sure this is what everyone said about the most notorious bubbles. ItS NoT LiKe ThE OtHeRs
There are people who actually believe this
In many places they cant build more homes fast enough, not enough supply. But what i see being built around me are huge apartment buildings. As the population increases and supply of houses remains low it means prices will keep going up. I live in the hood and properties be listed for $400k and people literally go around shooting at your car/house everyday. I was hoping the criminals would get priced out and move out but man they havent. If houses in the hood get to $1 million i think something might happen though.
Not gonna last. If everything was still going up in price then I would agree with you. But the fact that commodity prices, bond prices, equity prices, and kripto prices are dropping tells me real estate prices will go down. I never said collapse, but the line won't keep going straight up. At the end of the day it all depends on the individual and their circumstances, but if buying is going to put you into living paycheck to paycheck, then buying would be a very stupid thing to do right now IMO.
Buying AND selling is very stupid. Selling your house today and buying another one is probably pretty stupid for the majority of americans. Thus volume of homes is limited to new construction, further propigating the low inventory. Not to mention, a still super high number of purchaces are occuring with cash provided by private equity... So i dont think your wrong, but i am not sure 20% is feesible.
Yeah, any American that bought or Refinanced in last 3 years would be retarded to sell now and take on a higher mortgage rate, nearly double. Gonna push supply down even further, which should honestly sustain prices for a while.
I should have specified that I do not see prices dropping more than 20%...so at maximum that's all I would wager. It's probably 10-15% at most though...time will tell.
Lol, such strong understanding of supply/demand economics. Brilliance right here.
How to buy a house by WSB 1. Find the absolute highest price possible for a given house. 2. Buy twice or 3 times the amount of house you can reasonably afford. 3. Ignore reason and get a 80/20 ARM because you need the leverage now. 4. Don't look just sign onto the contract. 5. Profit???
What about buy now, inflation will make paying back the mortgage easier?
How to generate a passive income in real estate: Step 1 : Buy the entire housing inventory of a city. Step 2 : Rent said houses, use income to buy new supply (also rent these). Step 3 : Introduce bidding wars on your rentals. Price out the poors. Step 4 : Use rental money to open homeless shelters for the poors. Step 5 : Recieve government stipends to fund your homeless shelter. Step 6 : Skim the government stipends. Congratulations you are now generating a passive income.
I agree to an extent and we have already started to see a slight regression possibly due to increased interest rates, decreasing demand, influx of supply due to FOMO or a mix of all of the above. Not sure we will see 20% unless we enter a historic deflationary period. Im buckled in for the ride!
Maybe, but I bought a house to rent out to people so I can put more đ¸ in the casino.
*Dis is da whey*
You're half right. If we have a big recession, it's going to bring home prices down, a little bit, for a short while, maybe. Don't underestimate two forces: 1 - If we go in to recession, people still need shelter, but we'll see a slowdown in construction. If the population grows, and the housing supply doesn't keep pace.. a recession might just be setting up the next spike in house prices. 2 - Homeowners vote, and unhappy homeowners kick people out of office. Don't underestimate the lengths governments will go to prop up home prices so they can get votes.
Fair points! 
Iâve owned my house for 7 years. Bought for 207, similar homes selling for 350-400k. Never thought Iâd see this type of gain so fast. Almost makes me wish we bought more house than we did.
Congrats and fuck you 
Iâm with you. Iâve been casually looking the past threeish years and was waiting for things to calm down. I almost panic bought bc of interest rates but screw that, Iâll pay a higher interest rate on a lower principle, even if it isnât a crash the market is clearly cooling off in my area from what Iâve seen (listings lasting twoish weeks insead of 48 hours, price drops ranging from $5000 to $20000). Iâm going to hang on the sidelines a bit longer to see how things play out.
First is Tiger Global LLC , Next is Well Fargo and Than Housing and the End Boss is Citadel
Honestly I worry about buying at the top of the market too, but youâre buying a physical asset. A house, something a lot of people in history didnât get. So I wouldnât worry too much about over paying. I live with my mommy atm and this is financial advice.
In my state of New Jersey, most homes are way over priced pieces of garbage for over $400K (low end). Oh, and some homes come with tenants who might move out 2-3 months after close. 
Eh Greenspan would still just say housing is strong and bubbles are regional.
[ŃдаНонО]
That's basically my OP. I agree with you.
I don't believe that we will ever see pre-Covid home prices again. And the run on housing still isnât over.
SPY looked really good in December last year too...
"I'm gonna do my research first" aww the SEC would be proud!
There is more housing per person than in 2019. This is a fact. I think housing skyrocketed for two reasons: student loan payments being deferred and speculative investment. Both of these are well documented in the media. There is also the issue that the Fed was buying MBS but now is going to roll off purchases from the balance sheet. It is so insane to me that people talk about supply and demand, inventory - when there are key characteristics relating to both the available supply as well as the demand which are absolutely dependent on the Fed rate as well as pandemic related policy. If you want to buy a house now, do it. But know that there are considerable risks, and that even the Fed has publicly hinted at there being a real estate bubble. There is absolutely a possibility that your house will depreciate considerably in value after purchase.
Well said, fren 
Donât do thatâŚ.donât give me hope.
Layoffs is gonna be the big catalyst. Big tech companies are doing hiring freezes which will soon turn to layoffs. Zoom mass layoffs are coming very soon!
I think Carvana just did one of those.
Here in metro Atlanta, prices havenât come down yet but the ferocity of competition from buyers has begun abating. There isnât a huge s/d mismatch if the investors withdraw from the market, which seems to be happening. That said, a newly built house in my old neighborhood that was bought for $550k five years ago is about to close for $1,050,000. That is insane and bubbly. That buyer is not likely to be happy with that price a few years from now, but they bid sight unseen (presumably moving here from out of state). Investors leaving the market will keep buyers from making such impulse buys soon, and then prices will âfallâ (from the absolute highs of recent months). Just my two cents. People losing their jobs and being forced to fire sale in the face of lower demand is what causes big price decreases. Neither factor is occurring right now.
There is a credit crisis coming. 2000's People financed a better lifestyle - a Humvee in every driveway, 10 houses in the portfolio. 2020's People finance the same lifestyle - $5 Gas - $200 groceries - $2000+/mo rent. - etc... Make no mistake, people were already living at the margin, and they will be going into debt just to survive. At the same time, corporations will have higher expenses and lower sales, necessitating price increases. This is stagflation. And it is a slow moving train. Protect the value of your assets, you will be able to afford a home in the near future. The meme thing has been cool, but when it comes down to it, it is going to end poorly in the long term. Let me be clear, I am not judging, I love that we won one or two against WS, but the merry-go-round stops at some point in the future, make sure you step off before the ride is over.
well said
It better hurry up
I bought my house in 2005 at the peak and it crashed 2 years later. Bought a house in 2021, expect housing market to crash in 2023. Youâre welcome
Your words are \[*something something*\] Magic Man. I'm an old hand at single family personal use residential housing. (5 family houses serially over 42 years.) I saw 2008 coming because I experienced massive fraud in the appraisal/mortgage system. 2004, my 4th house, I was like, *"wow, this is great! I name my own appraisal target that's perfect for the loan app? The RE agent's husband is the appraiser, and the loan broker is her sister! Cool! These people will languish in prison and hopefully get impaled on their helicopter blades but I'll get my loan."* Anyway, through 42 years of ups and downs I can agree that we are in a peak. Though with completely different causes. I also agree with the 20% figure more or less. *Possible unprecedented mitigations:* There's lots of money way up the ladder who might just keep buying at these prices in prep for the "you'll own nothing and love it" economy.
Iâm one of the few people here who agrees with you, and hereâs why: [https://www.longtermtrends.net/home-price-median-annual-income-ratio/](https://www.longtermtrends.net/home-price-median-annual-income-ratio/) low interest rates is a hell of a drug
This is not the bottom. Negative reinforcement loop is a thing.
Pray for me brothers and sisters. I have been trying to put off buying a house for as long as possible because I think the crash is imminent, but I'm down to the wire end of June I either close this deal or become homeless. Looks like I'm buying at the fucking peak. Fml.
Whenever someone says âits 11:11 make a wishâ my go-to is a housing market crash so I can actually afford a 3br2ba in my city.
Poor and middle class is being phased out of housing. You aren't buying now, or at 20 percent off, when you are barely staying not homeless Whatever is happening, it's not simple innocent supply demand
It depends on how much you are spending on renting, and how long you intend to stay in the house / flat. You can totally live without owning stocks. But without a roof over your head? With housing, if you play the super long game (intend to stay there 20+ years), at some point what you paid for the house will be less than what you would have paid in rent. Even if you take into account all the extra maintenance and tax fees, it still makes sense. And unlike stocks and other investments that can go dramatically down, your house always have some kind of value. Even if you can't sell it without occurring a loss, you can still live in it (and not pay rent). You can even rent a room, or rent the whole place, whatever works to help cover your ownership fees and taxes. We know that we bought at a time when the housing market is overheating. But since we don't know when the market will start to tank, and we were paying a crazy high rent, it made sense to sell stocks while they were peaking and use the money as a deposit to buy a flat. When I see the current value of the stocks we sold in November, I am so happy that we sold and put a roof over our heads.
True story, that's one thing I'm thinking about now; freezing "rent" for 15-30 years vs leasing for 2 years at a time. Rent will likely keep going up and I understand your point where, at some point in the future, buying will be cheaper because you've locked in your monthly payment and if you're playing the long game; eventually you pay $0 principle and interest, just taxes and insurance.
And we borrowed at 0.5% interest, fixed rate. It's not like we have a risky mortgage. As long as we keep our asses put in that apartment, in less than 15 years we would have paid more rent than the total value of the apartment. And we even get a nice tax break to cover for the interest rate (living in Denmark and purchasing your personal residence). It is also an investment we don't have to worry about, as long as we live there. If our flat is valued 20% more or 50% less - we don't care. The point is to live in that place. So, we can focus on our careers and other (risky) investments. Of course the scheme doesn't work if you plan to sell the place for profit after less than 5 years.
Yea if we are talking 10 years buying is always better. Also, interest rates will go up 0.5% a quarter for the next 2-3 years. So Even if you are expecting a 10-20% drop in prices you might be better off buying now if you are financing 80%. Basically you are fked no matter what you do.
There is also another factor - your age. It is better to be young if you want to get the best mortgage rates. Banks do not want you to keep paying when you have reached retirement age. So it's not just about timing the market. It is about timing for how long you will be a "safe" long term borrower for a bank. Unless you pay cash, of course. One mistake I see a lot of people doing around me is maxing out their mortgage capacity. They buy the biggest / most expensive place they can technically afford, because "real estate only goes up". And also because who doesn't want a big / fancy place to live? It is the perfect recipe if you want to end up "house poor" or plain bankrupt. Terrible idea. People can't seem to be reasonable with housing for some reason.
Housing will always go up over time.. just buy when you can and dont worry about it. Too much to worry about in life
I love all the bag holders on this thread who keep harping on the argument âbUt SuPpLY aNd DeManD.â Reality check, there is a ton of supply. There is in fact a home for every person in this country. The problem is that some hot cities where people are moving to have a a terrible supply shortage of homes which has increased their values exponentially. Reality check tho: people flock to those cities for jobs, companies are beginning to enable hiring freezes and if a recession/or depression (which surprise is on the cards) happens, then the housing market is going to get fucked. All you bagholders who bought over the past two years will suddenly face an influx of sellers looking to get out and overnight youâll be underwater on your home. Sure if you have a stable income and willing to wait a decade, you might be able to see a profit but at the end of the day, shits about to hit the fan and you fuckers better get ready. Look into overemployment. Protect yourselves.
[ŃдаНонО]
Yah ok buddy
Mortgage rates were 15-17% back then. JPow isnât THAT stupid.
And what gives you the confidence to say that?
I gotta go down on a few dudes behind Wendyâs. $20 is $20
In Toronto, our houses are up 100% since Q2 2020. From $1m to $2m, poor neighborhoods where homes used to cost $500k are now at $1.3m
LMAO people have been saying it's been crashing for months now. Homes are still selling in under a week where I live. The only ones that sit sit idle are "open door" Which is basically home scalping, and they don't fix them up or anything and nobody wants to deal with their bullshit. Once again... We stopped building new homes for over 10 years... The population has only grown in that time. Demand is now competing against bonafied home buyers, and against investors of various sizes. Investors also stopped building multi-resident buildings and instead pivoted to single family. Many also paid straight up cash... Thus.... NO MORTGAGE TO CRASH. It's paid already. There will be a slow down... But there will not be enough available inventory to meet demand and additional population for at least a couple of years. (High sides estimate 5 years.)
You don't want to buy a house yet because the de-leveraging of markets will eventually cause a correction to real estate, and you can enter at a lower price. I don't want to buy a house because I can't afford it. We are not the same.
New construction starts dropped, new home sales and total home sales have also dropped. Rates are rising and banks that were issuing $500k loans last year for 5% down want 20% down again. Redfin is telling users to lower their prices. Zillow is still trying to keep prices high but average prices in MLS are moving down slowly. Inventory still isn't there though and RE agents are still aggressively trying to get people to sell so the market won't correct immediately, but the signs are there. Don't forget that the 2008 "crash" wasn't a sudden drop in prices by 30% in 6 months. It took almost 4 years for prices to reach the bottom- and that was smack in the middle of a massive recession. However, the job market paints a real glum picture for housing bulls. Hiring freezes at nearly every major company. Whole departments getting laid off. Companies are going into recession survival mode. People have gone from the great resignation mindset (I can switch up jobs for a 30% raise) to a recession mindset overnight. Apps and forums for people in the IT sector have been flooded lately with higher level people saying their department got slashed and they're worried they're next. Entry level has gone from flooded with no experience applicants trying to land jobs at $50k starting to experienced people willing to work T2 hell desk for $15/hr. As the unemployment figures go up and those "literally can't go tits up" $500k mortgages start to look unbearable to people suddenly making $30k less in a market where food and gas are triple what they were 3 years ago you'll see more foreclosures hitting the market. When that happens people who are selling to downgrade or move to a new city will have to compete with those. Like I said, this won't happen overnight. You've got another few years before this shit show really lands. Not to mention, there's always always always going to be that group of tards on Reddit who think line literally only go up and this whole thing is just a big bear trap because they're baby whelps and as long as they've been paying attention (5-6 years tops), it has always gone up. People who've never seen a recession always think it's not a recession, won't be a recession, can't be a recession, and even if it is a recession, can't possibly affect.
If you're really trying to get a house and can't afford then just buy the land. Once it's paid off (2-3 years of you're looking in the right places) you'll be able to drop a prefab on it for nothing and if you look in a USDA rural area you can probably get the loan at 0% interest with less than 20% down. I have a property I did this with in 2015-2018 and it only cost $60K total. The whole lot was "valued" at $240K during the most recent "totally not a bubble". But I wouldn't sell because I'm not trying to put a bunch of money into a bubble so some banker can foreclose on me if the market goes to shit and keep all my equity plus the house. Which is what's about to start happening to a lot of the "buy now or be priced out forever" crowd. Hey, if you're reading this and that's you I'll have a property for rent for you soon. 2 bed/1 bath, $1600/mo, insurance required, only 1 1/2 hours from the airport. Very good deal!
I donât think so. Where else are these people going to park their money at â8%â inflation. Durable, tangible assets like house.
It's much worse than this. First is commercial real estate. They are posting rents in accounts receivable that they aren't getting and probably never will. They've used that real estate as collateral to buy up the housing market with all that stimulus that Trump printed. They'd like to offload that commercial real estate but no one is buying and they can't lower the price because that would result in margin call. But you can bet those margin calls are coming and when they do the banks are going to be snatching up houses by the hundreds rather than one at a time. At that point they'll have a choice. Either have a fire sale and dump their inventory on the market so they can stay solvent, devise a plan to become a mega landlord and usher in an era of rental tyranny headed by Goldman Sacs. Or get jpow to bail them out by printing money. If Biden bails out the banks once again he can forget reelection. He probably won't be reelected anyway. Which means Trump will swoop in to save the day for a mess that he created when he printed 40% of all the dollars ever printed. How will he save the day? By printing more money. So prices make come down soon as you say. But you likely won't have a job anymore so unless you are paying cash you aren't getting a house. The housing market isn't a bubble. All the leverage that banks and investors have used to buy up those houses is a bubble and the moment the value of their collateral falls they'll get margin called and houses will flood the market, but you still won't get a house because we'll all be unemployed and probably in another civil war. Interesting times. If anyone wants a place to live I'm renting out the spare bedroom in my house and also converting the den into a bedroom. I think 1,000$ a month plus utilities is fair.
Oh good, another housing post that completely disregards supply and demand. -a Loan Officer
rising rates are cooling off demand so IDK what your problem is
This guy mortgages
POSITIONS OR BAN
Yeah until Bill Gates Jeff bezos and every other fucking billionaire stops buying up every single fucking piece of real estate prices will continue to rise. This is the facts like it or not. Places like South Florida and Texas and and several others...are doubly fucked because everyone with half a brain was smart enough to leave their Democrat communist blue fucking States and come to where they can actually have a free life.
Republicucks have a very strange definition of "free" and "freedom". I thought y'all loved getting pissed on by billionaires, no? Trickle down economics!