6 ms·

congrats! but risk is obviously that property prices as a whole will start to deflate but if its your primary residence and you are going to live in forever it

congrats! but risk is obviously that property prices as a whole will start to deflate but if its your primary residence and you are going to live in forever it will be fine, you are on the hook for whatever you bought the property for vs market price. people that were using cheap mortgages to purchase additional properties with the aim of flipping it, who were also leveraged, are screwed. the last bit of bad news is that property prices may not rise for people who buy the dip, we are entering into a global recession and the world's biggest real estate market have declined with no hope of making a comeback.

toomuchtodo 5y ago
> people that were using cheap mortgages to purchase additional properties with the aim of flipping it, who were also leveraged, are screwed. They'll convert to rentals and make back any acquisition overpayment over time. Even if we hit a recession, with so many people having left the workforce and continuing to leave over time through retirement, rental demand should remain firm.
- tomatowurst 5y ago
  it would be a renters market and you would be bidding down to the point you are making marginal impact on your debt repayment.
Nbox9 5y ago
This comment is too bleak. If they refinanced in 2020 then they likely bought in 2019 or earlier. If prices fell to 2019 levels it would be a crash —- and probably merit all sorts of government response including lowering interest rates. No one that entered the market before 2020 is “screwed”. Housing prices even in the markets hit hardest by 2008 recovered in ten years. You aren’t stuck living in your current home forever. If you bought an investment property then relax, there’s no indicator that rents are going to decrease anytime soon.
- merrywhether 5y ago
  If only the younger generations had more political power, there’d be no government intervention in the event of a crash. The older generations that bought houses and then pulled ladders up in order to politically engineer constant wealth growth should be left to deal with it on their own for once. The house of cards is going to completely collapse eventually, so the sooner the better.
  - mywittyname 5y ago
    The GFC hit during my early 20s. And I remember the zeitgeist of people my age during that time. Many young people put off home ownership specifically because we watched slightly older friends lose their shirts on their houses. I remember specifically one friend who had to save up to sell their house, not only was he selling for 20% less than he bought for, but he was making $20k in out-of-pocket concessions to the buyers. Popular opinion was that houses were too risky. Plus, there was the issue of, we all either were laid off recently, or had friends who had been laid off. It's kind of hard to think about long term planning with that hanging over you head. So when the house of cards collapses, young people won't be the beneficiaries. They will suffer long-term because they lack the experience and context to internalize concepts like business cycles. I remember my mom telling me to use the $8000 first buyer credit from the government to buy the house across the street from her for $78,000. That house is how worth a quarter of a million. But I didn't buy it because I was worried about layoffs or further market collapse.
    - tomatowurst 5y ago
      what year was it when you were 23? not to mention 1 out of 2 GEN-Z and 1 out of 4 millenials are hodling crypto, the situation is far more bleak than ever before.
      - mywittyname 5y ago
        08-09 So yeah, just got footing as an adult, then bye bye economy.
wil421 5y ago
When have prices deflated over a forever period? It wasn’t even close to a decade after the last recession that housing prices caught back up.
- tomatowurst 5y ago
  again 08 produced a zero interest rate QE that got us to where we are today. 80s, 90s were very different
beeboop 5y ago
>people that were using cheap mortgages to purchase additional properties with the aim of flipping it, who were also leveraged, are screwed. good

toomuchtodo 5y ago

> people that were using cheap mortgages to purchase additional properties with the aim of flipping it, who were also leveraged, are screwed. They'll convert to rentals and make back any acquisition overpayment over time. Even if we hit a recession, with so many people having left the workforce and continuing to leave over time through retirement, rental demand should remain firm.

tomatowurst 5y ago
it would be a renters market and you would be bidding down to the point you are making marginal impact on your debt repayment.

Nbox9 5y ago

This comment is too bleak. If they refinanced in 2020 then they likely bought in 2019 or earlier. If prices fell to 2019 levels it would be a crash —- and probably merit all sorts of government response including lowering interest rates. No one that entered the market before 2020 is “screwed”. Housing prices even in the markets hit hardest by 2008 recovered in ten years. You aren’t stuck living in your current home forever. If you bought an investment property then relax, there’s no indicator that rents are going to decrease anytime soon.

merrywhether 5y ago
If only the younger generations had more political power, there’d be no government intervention in the event of a crash. The older generations that bought houses and then pulled ladders up in order to politically engineer constant wealth growth should be left to deal with it on their own for once. The house of cards is going to completely collapse eventually, so the sooner the better.
- mywittyname 5y ago
  The GFC hit during my early 20s. And I remember the zeitgeist of people my age during that time. Many young people put off home ownership specifically because we watched slightly older friends lose their shirts on their houses. I remember specifically one friend who had to save up to sell their house, not only was he selling for 20% less than he bought for, but he was making $20k in out-of-pocket concessions to the buyers. Popular opinion was that houses were too risky. Plus, there was the issue of, we all either were laid off recently, or had friends who had been laid off. It's kind of hard to think about long term planning with that hanging over you head. So when the house of cards collapses, young people won't be the beneficiaries. They will suffer long-term because they lack the experience and context to internalize concepts like business cycles. I remember my mom telling me to use the $8000 first buyer credit from the government to buy the house across the street from her for $78,000. That house is how worth a quarter of a million. But I didn't buy it because I was worried about layoffs or further market collapse.
  - tomatowurst 5y ago
    what year was it when you were 23? not to mention 1 out of 2 GEN-Z and 1 out of 4 millenials are hodling crypto, the situation is far more bleak than ever before.
    - mywittyname 5y ago
      08-09 So yeah, just got footing as an adult, then bye bye economy.

wil421 5y ago

When have prices deflated over a forever period? It wasn’t even close to a decade after the last recession that housing prices caught back up.

tomatowurst 5y ago
again 08 produced a zero interest rate QE that got us to where we are today. 80s, 90s were very different

beeboop 5y ago

>people that were using cheap mortgages to purchase additional properties with the aim of flipping it, who were also leveraged, are screwed. good