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The rise of buy-to-let schemes have only made matters worse. Investors are buying real estate to rent at a high profit whilst a couple of decades ago individual

by eyko 10y ago

The rise of buy-to-let schemes have only made matters worse. Investors are buying real estate to rent at a high profit whilst a couple of decades ago individuals would buy a second and third home as a future investment for their children (or whatever other reason) and would put it in the rental market, which was competitive, in order to help pay the mortgage. Low interest rates meant by the time their kids were of age the house could have almost paid itself. Many of us chose to rent because rent was cheap, we were young, not wealthy, and most importantly didn't know if we would love in this or that city for much longer (perhaps we came to study and moved on to look for our first jobs). By the time rent became unaffordable, or at least much more expensive than a (lengthy) mortgage, we had also been prices out of home ownership because we don't make enough even with our partner's wages combined. We just couldn't get a mortgage at the prices houses are going. It feels like been between a rock and a hard place.

jfolkins 10y ago
In my opinion what people are feeling now is a shadow tax in the form of increased cost because the US FED flooded the global markets with cheap USD and shored up the banks. The psychology of pain applies to both the individual, the city, and all the way to the state and federal government. Which is that in comfort, no one changes. The only one motivated to change in this scenario currently is the individual (household). In planning, I generally try and first determine if a market is frothy and then predict where the pain could/should/will come from. If I can't determine a pain point, I assume that either a) I missed something or b) there is yet to be a point of inflection. My plan for housing ended up by waiting 7 years (2005-2012) to purchase my home as a foreclosure. So it certainly took some patience and planning. With that said, if I hadn't seen some pain in the local RE market by around 2009, I would have moved to some place that afforded me a similar lifestyle but one that I could purchase a home, given my priorities.

by eyko 10y ago

jfolkins 10y ago

In my opinion what people are feeling now is a shadow tax in the form of increased cost because the US FED flooded the global markets with cheap USD and shored up the banks. The psychology of pain applies to both the individual, the city, and all the way to the state and federal government. Which is that in comfort, no one changes. The only one motivated to change in this scenario currently is the individual (household). In planning, I generally try and first determine if a market is frothy and then predict where the pain could/should/will come from. If I can't determine a pain point, I assume that either a) I missed something or b) there is yet to be a point of inflection. My plan for housing ended up by waiting 7 years (2005-2012) to purchase my home as a foreclosure. So it certainly took some patience and planning. With that said, if I hadn't seen some pain in the local RE market by around 2009, I would have moved to some place that afforded me a similar lifestyle but one that I could purchase a home, given my priorities.