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Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for
by cammikebrown 4y ago
Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.
- alexb_ 4y ago"Cracking down on Airbnb"... you say this as if Airbnb is a horrible thing or something LOL
- Raed667 4y agoAirbnb is a horrible thing if you (like me) live in a tourist city and making rent inaccessible to the local residents
- dominotw 4y agowhy do you live there though. Can't you ask your employer to match the deficit.
- throw8383833jj 4y agoemployers could not care less about your housing problems because employers have greater bargaining power than workers. places like CA think they can control where people live by depriving people of housing but it's not true. people just become ever more desperate, paying more and more for shelter. It's employers who decide where people are. this is because we've created a world where people can't live without money. so he who controls wages, controls where people live.
- broken8ball 4y agoIt’s my understanding that Airbnb is pretty bad when it comes to gentrification and driving city natives out of affordable housing.
- woodruffw 4y agoI don’t know about other places, but Airbnb has been a mixed bag for NYC: I’ve seen it used to keep housing stock off the market, to dodge the obligations associated with keeping a property livable, and to essentially run entire illegal hotel businesses without attracting regulatory (including safety) scrutiny.
- baisq 4y ago
- plazmatic 4y ago
- Balero 4y agoSo it's ok if someone moves next to you, plays music all hours, leaves rubbish everywhere, and are generally annoying to live next to. And then the next week a whole new group of people move in forgetting any requests you made, but act the same way because they are specifically there for a fun weekend. Also this stops you getting to know your neighbors and form a community and friends that live around you. Any improvements you make to the local area and street have the owner uninterested or pushing back because they do not want to invest in the area.
- bobthepanda 4y agoAlso, tourists are the absolute worst to have as neighbors. Warnings for noise complaints and rubbish don't really work if the person is just going to be gone by the time a third strike happens.
- raverbashing 4y agoAirBnb in NYC is also a fertile ground for scams
- crate_barre 4y agoExplain. I thought finding a high rated host is enough?
- throwaway578309 4y agoIt is if you live next to a landlord that houses loud guests. Is this even a question?
- justsomeguy123 4y agoAirBNB, like Uber, lives on sucking externalities. They are the modern Oil that sometimes spill and kill some ecosystem, but because the ecosystem is far away nobody cares. Like a pimp, AirBNB is the helpfull middleman for the desperate or the sociopaths. So, yes, at it's core AirBNB is horrible.
- raesene9 4y agoAirBnB (and similar) has been really bad for the property market in the Scottish Highlands. Lots of people buying up scarce housing stock to use for holiday lets, means that locals who work in the area (where a lot of local employers can't pay stellar rates) can't afford to buy. Combine that with the fact that these areas are often in National Parks which have restrictions on new-builds and you'll inevitably reduce the amount of people actually living in the area.
- jimbob45 4y agoThink about a hypothetical city where 100% of the properties are AirBNBs. There will be no source of employees for any local businesses because there are no long-term residents. There is no vested interest to improve the city via taxes and volunteerism, because no one truly lives there. No one will move to that city because the property rates are so absurdly inflated thanks to AirBNB rates. It’s an absurd example but cities frequently see these effects when they let AirBNB and rental properties run wild.
- dominotw 4y agothis is basically all mountain towns now.
- itsmejerry 4y agoOther than perhaps zoning restrictions, how does this differ from traditional hotels/motels in extreme tourist areas, like Niagara Falls. If people don't want to live permanently in a city for whatever reason, of course the city will suffer.
- jimbob45 4y agoHotels/motels are dense enough that they don't take usable land away from residential housing while still allowing for short-term residents to enjoy the city. However, AirBNBs and rental houses suck away the usable land such that you begin to meaningfully remove potential long-term residents from the city. The flipside of this, of course, would be apartments/duplexes, which would add more long-term residents than single-family zoning would allow, even with the problem of AirBNB proliferation.
- globalise83 4y agoMixed bag if you live next door to one. We had one guy wake us up early in the morning on a Sunday because he locked himself out. Another time we were gifted half a cooked spiced lamb from a Saudi Arabian family.
- theferalrobot 4y agoI’m seeing 5.0% most places (see ally bank). Still higher than its been but not pushing 6% by any stretch.
- broken8ball 4y agoAllegedly 6 more rate hikes from The Fed this year too, so this could just be the beginning.
- anm89 4y agoI personally do not believe they have a shot in hell at making it through 6.I think there is going to be some serious chaos in markets well before then. We haven't seen chaos in markets without immediate fed support for decades. It's going to get bad IMO. It will be surprising if Powell doesn't do a second pivot and go Dovish well before 6. Obviously I'm not a fortune teller and many people disagree.
- paxys 4y agoAnd it is still relatively easy to get ~4-4.25% with a little bit of negotiating.
- crysin 4y agoBy negotiating do you mean taking points? I can’t imagine many lenders are willing to go below prime for a 30 year conforming loan.
- s1artibartfast 4y agoI'm in escrow with less than 4% today w no points. Took some negotiating
- ab_testing 4y agoHow to negotiate rates? What do you usually tell them in the phone ?
- elevaet 4y agoIn Canada rates are creeping up from really low, often under 2% still.
- jbay808 4y agoThat's probably because Canadian mortgages are essentially all adjustable rate.
- refurb 4y agoAnd a median sale price that has hit ~$800,000, which is double the US.
- elevaet 4y agoIt's nuts. Canada has a lot of good things going for it, but housing affordability is at a crisis point.
- refurb 4y agoIt is. You can just look at the US and Canada over the same time period to see how out of wack Canada is. Canada is basically the US minus the 2008 crash. It's just price inflations non-stop for 20 plus years.
- onlyrealcuzzo 4y agoIsn't it 40 years?? My understanding is prices crashed hard in the 70s, there was a slight decline in 1990 and 2008, and other than that they've been going up 5-10% per year.
- refurb 4y agoThe last big crash was 1990 in Toronto. Price dropped and didn't recover until the early 2000's. https://urbaneer.com/blog/when-dreams-of-domesticity-became-nightmares-steve-fudge-urbaneer-bosley-recounts-the-1989-toronto-housing-market-crash https://urbaneer.com/blog/when-dreams-of-domesticity-became-...
- hans1729 4y agoI mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase, even at those completely-out-of-touch prices, and b) that people were given loans they should either never have gotten (2008) or that they shouldn't have asked for (because it's dumb to buy estates where the price is set by people and institutions that have n times your own income/net worth) When 90 (?) percent of people simply lack the buying power to participate in the real estate market, but the other 10% happily sell each other estates, that's not a bubble, the real estate market just stopped interfacing with the vast majority of the population.
- cdiddy2 4y agoIts really not that bad in the US especially compared to its peers https://awealthofcommonsense.com/wp-content/uploads/2021/09/Screenshot-2021-09-07-115719.png https://awealthofcommonsense.com/wp-content/uploads/2021/09/...
- crate_barre 4y agoHousing legislation is something that few politicians have been talking about in the last decade. We have spent a lot more time talking about healthcare, and student debt, but not the number one financial factor which is housing. You really can’t leave it alone with legislation every 20 something years, you sort of have to keep evaluating and reevaluating it. Otherwise while we let the current systems in place fester, what you get is side effects that we simply can’t address until decades later (e.g Canada banning foreign buyers, ok great, the damage has already been done). Many of the investor class had the first mover advantage where they simply bought a house before everyone else and can now leverage those gains into more investment/rental income property. Couple that with foreign investment. Couple that with home equity and margin loans. Couple that with the private sector collecting houses. Couple that with mortgage fraud where people don’t pay investor taxes and continuously buy homes as a first time home owner. Couple that with with all kinds of things. I know a home owner that owns multiple homes, stopped paying taxes on one and had a tax lien discharge. They go on to sell that other home at profit and pay off the IRS. They never took the hit on their first home in any way. Multiple ownership is a problem, period. We finally end up to where we are today and the only powerful entity that modulates this is the Fed, but not a single politician is taking up the battle over the fact that the multiple home ownership is killing our society at the moment.
- apexalpha 4y agoThat's really high compared to Europe! I just bought a new house with 2% on the interest-only part and 1.6% on the annuity part! In the month after rates grew by about 0.5% though. Seems like we hit the bottom and are climbing very slowly.
- oliwarner 4y agoWhole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.
- s1artibartfast 4y ago>why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty Because you are leveraged to the gills and a rate hike could lose you your entire principal.
- runeks 4y ago> My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? To fix your monthly payment for the next 30 years. Furthermore, with a fixed rate mortgage you can benefit from interest rate volatility since you can always buy back the debt at par. In practice this means you can: 1. Take out a fixed rate loan for $n at x% 2. If the rate doubles (to 2x%) you can refinance and you now only owe half ($n/2) 3. If the rate falls to x% again you can refinance again and now you owe the original amount ($n/2) at the original rate (x%) This ignores the cost of refinancing the loan, so you’ll be paying some fixed sum for that (which is lost), but if rates moves sufficiently this is a huge benefit that you don’t get with a variable rate mortgage loan. * This is based on how the Danish Realkredit mortgage works. I’m not certain, but I believe fixed rate mortgages work the same way in other countries.
- shawabawa3 4y agoCan you explain point 2? Why do you refinance if rates go up? Surely the point is that if rates go up you've locked in a better rate How does half your debt disappear if rates go up?
- ilammy 4y ago
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- taf2 4y agoIt seems like interest rates need to get to maybe 9% to bring down inflation… see: https://www.federalreservehistory.org/essays/recession-of-1981-82 https://www.federalreservehistory.org/essays/recession-of-19...
- mensetmanusman 4y agoThis is also what the pushback against asset price inflation looks like.
- deleted 4y ago[deleted]
- davio 4y agoRefinance applications were down 70% compared to year ago. Combined with low home inventory, the mortgage industry looks pretty grim. I'm expecting rates to reverse at some point. Mortgage companies will either need to compete to get some business or just give up.
- s1artibartfast 4y agoLast years rates were a historic low, lower than the last 40 years at least. How do refinances compare to 3, 5, or 10 years ago
- gowld 4y agoWhich bubble? A refi bubble? Maybe (but that's more of a fad than a bubble) Real estate bubble? Sort of. Housing affordability bubble? Not really. Interest rates move profits from home sellers to banks. Housing affordability is driven by supply+demand. Housing prices are driven by" Affordability minus Interest Rates: Low Rates + High Price = Monthly Payment = High Rates + Lower Price
- xphilter 4y agoSure, but there’s still no supply of homes. There are presently 2 houses for sale in my neighborhood of about ~750 homes. I don’t have historical data, but 0.002% seems very low for spring.