4 ms·

Are we running out of people with the incomes to support the higher monthly payments? That's what we have to be asking. A house across the street from me just s

Are we running out of people with the incomes to support the higher monthly payments? That's what we have to be asking. A house across the street from me just sold in a couple of days for $555,000 ($20K over asking). Previously sold in 2018 for $424,000. The similarly sized house next to it sold for $149,000 in 2012. This is looking pretty bubbly to me.

Ancalagon 6y ago
We are probably not yet running out of buyers, because interest rates are low (and hence monthly payments are low). In a way, right now is a bad time to buy if you have cash in hand _because_ interest rates are low causing prices to skyrocket and the overall amount of money you would spend on a mortgage to increase over a 30 yr period. Despite this, I think whales and normal people are buying property all over the place anyways because its one of the few safe, good remaining investments left, and as the article pointed out, people prefer investing in their own homes more than any other asset.
aphextron 6y ago
>The similarly sized house next to it sold for $149,000 in 2012. This is looking pretty bubbly to me. But 2012 was also the absolute bottom of the worst housing slump in US history. If you averaged out the appreciation of a median priced home at the beginning of the housing bubble in 1998, which was $175,000 [0], at 3.8% annually, the historical average [1], until 2021, the median price would now be just shy of $400k. We currently stand at $350k median price, and that's with a generational tailwind of millennials (the largest generation in US history) now just starting to buy homes. The fact is that it's still the single best financial decision an average person can make, even at what seem like inflated prices. [0] https://dqydj.com/historical-home-prices/ https://dqydj.com/historical-home-prices/ [1] http://www.fedprimerate.com/new_home_sales_price_history.htm http://www.fedprimerate.com/new_home_sales_price_history.htm
cryptonector 6y ago
Monthly payments stay level even if principals go up, as long as interest rates go down.
- UncleOxidant 6y ago
  It seems much more likely that rates go up from here rather than down.

Ancalagon 6y ago

We are probably not yet running out of buyers, because interest rates are low (and hence monthly payments are low). In a way, right now is a bad time to buy if you have cash in hand _because_ interest rates are low causing prices to skyrocket and the overall amount of money you would spend on a mortgage to increase over a 30 yr period. Despite this, I think whales and normal people are buying property all over the place anyways because its one of the few safe, good remaining investments left, and as the article pointed out, people prefer investing in their own homes more than any other asset.

aphextron 6y ago

>The similarly sized house next to it sold for $149,000 in 2012. This is looking pretty bubbly to me. But 2012 was also the absolute bottom of the worst housing slump in US history. If you averaged out the appreciation of a median priced home at the beginning of the housing bubble in 1998, which was $175,000 [0], at 3.8% annually, the historical average [1], until 2021, the median price would now be just shy of $400k. We currently stand at $350k median price, and that's with a generational tailwind of millennials (the largest generation in US history) now just starting to buy homes. The fact is that it's still the single best financial decision an average person can make, even at what seem like inflated prices. [0] https://dqydj.com/historical-home-prices/ https://dqydj.com/historical-home-prices/ [1] http://www.fedprimerate.com/new_home_sales_price_history.htm http://www.fedprimerate.com/new_home_sales_price_history.htm

cryptonector 6y ago

Monthly payments stay level even if principals go up, as long as interest rates go down.

UncleOxidant 6y ago
It seems much more likely that rates go up from here rather than down.