5 ms·

This will be the 3rd once in a life-time crash since I left school. This time I finally also have savings that I can lose in the crash.

Tade0 4y ago
Same here. I was meaning to buy an apartment, but that's not going to happen.
- turbinerneiter 4y ago
  During Covid, the price of real estate went up so much, that the increase of the 20% down payment, which is recommended in my country, is more than I can save in year. I'm saving 60% of my income and I'm in the top 20% income bracket.
  - planarhobbit 4y ago
    This is why I’m wary whenever I see “top X% in the income bracket.” I think it’s misdirection, because if you can’t afford something, then you can’t afford it, regardless of how well off the statistics say you are. You can save for a down payment, and then interest rates and mortgage will obliterate you. So really, the scale for these things in terms of affordability starts somewhere beyond what you’re making - and most of the upper 20% I bet, and then extends onwards to the actual ruling/owner class. So the metric we should use isn’t this. It’s something else. I won’t speculate with the usual HN nonsense of armchair economists. I will say I remember Michael O’Church’s two ladder theory and I agree with it based on personal observations.
  - derwiki 4y ago
    Is it expected to be able to save for an entire down payment in one year? It took me and most of my friends closer to 10 years.
    - turbinerneiter 4y ago
      The price increase of the downpayment was higher than my savings in that year.
- mtremsal 4y ago
  If you have cash savings, then you’re ideally positioned to take advantage of lower real estate prices without suffering (as much) from the impact of higher interest rates.
  - turbinerneiter 4y ago
    If prices go down, which they probably won't in my city. Also, Input everything in ETFs, as everyone told me. I will probably escape to the countryside in a couple of years.
  - Tade0 4y ago
    I'm actually not even eligible for a mortgage any more considering that interest rates around here are at 6,50%, which is more than the 30-year average.
chad_c 4y ago
Same here. I graduated college during the financial crisis. It's been a wild ride.
refurb 4y ago
The economy always has cycles. Expecting constant upward growth is unrealistic. I went through 2008 and lost 30% of my portfolio. It’s up 300% since then. You’ll survive.
- turbinerneiter 4y ago
  Surviving isn't the issue, I'm doing fine. Affording a house is. Reaching the standard my parents had.
  - Auracle 4y ago
    Good luck with that. My parents purchased 60 acres of beautiful land and built a very nice house on it. My dad was a construction worker and my mom was a part time school bus driver/eventually USPS worker. My wife and I both have degrees. There's no way we could ever afford their place. The population has increased too much and space - even in rural areas - is finite.
    - refurb 4y ago
      My parents did the same. Of course when they bought it was a podunk town and they bought on the edge of city limits. Now it’s a city of 2M and their property is regarded as central. Of course I couldn’t afford it. But I could certainly buy on the edge of some podunk town today.
      - MichaelZuo 4y ago
        It is weird how the vast majority of commenters on HN ignore any adjustments for changes in quality in housing discussions. Housing prices seem pretty inline with population growth after adjusting for location and building quality differences.
  - refurb 4y ago
    With rising rates expect housing to fall. Canada had a massive run up and with increasing rate the ‘burbs of Toronto are down 25% in the last two months. Unless you have a crystal ball, I wouldn’t count on the current trend continuing.

Tade0 4y ago

Same here. I was meaning to buy an apartment, but that's not going to happen.

turbinerneiter 4y ago
During Covid, the price of real estate went up so much, that the increase of the 20% down payment, which is recommended in my country, is more than I can save in year. I'm saving 60% of my income and I'm in the top 20% income bracket.
- planarhobbit 4y ago
  This is why I’m wary whenever I see “top X% in the income bracket.” I think it’s misdirection, because if you can’t afford something, then you can’t afford it, regardless of how well off the statistics say you are. You can save for a down payment, and then interest rates and mortgage will obliterate you. So really, the scale for these things in terms of affordability starts somewhere beyond what you’re making - and most of the upper 20% I bet, and then extends onwards to the actual ruling/owner class. So the metric we should use isn’t this. It’s something else. I won’t speculate with the usual HN nonsense of armchair economists. I will say I remember Michael O’Church’s two ladder theory and I agree with it based on personal observations.
- derwiki 4y ago
  Is it expected to be able to save for an entire down payment in one year? It took me and most of my friends closer to 10 years.
  - turbinerneiter 4y ago
    The price increase of the downpayment was higher than my savings in that year.
mtremsal 4y ago
If you have cash savings, then you’re ideally positioned to take advantage of lower real estate prices without suffering (as much) from the impact of higher interest rates.
- turbinerneiter 4y ago
  If prices go down, which they probably won't in my city. Also, Input everything in ETFs, as everyone told me. I will probably escape to the countryside in a couple of years.
- Tade0 4y ago
  I'm actually not even eligible for a mortgage any more considering that interest rates around here are at 6,50%, which is more than the 30-year average.

chad_c 4y ago

Same here. I graduated college during the financial crisis. It's been a wild ride.

refurb 4y ago

The economy always has cycles. Expecting constant upward growth is unrealistic. I went through 2008 and lost 30% of my portfolio. It’s up 300% since then. You’ll survive.

turbinerneiter 4y ago
Surviving isn't the issue, I'm doing fine. Affording a house is. Reaching the standard my parents had.
- Auracle 4y ago
  Good luck with that. My parents purchased 60 acres of beautiful land and built a very nice house on it. My dad was a construction worker and my mom was a part time school bus driver/eventually USPS worker. My wife and I both have degrees. There's no way we could ever afford their place. The population has increased too much and space - even in rural areas - is finite.
  - refurb 4y ago
    My parents did the same. Of course when they bought it was a podunk town and they bought on the edge of city limits. Now it’s a city of 2M and their property is regarded as central. Of course I couldn’t afford it. But I could certainly buy on the edge of some podunk town today.
    - MichaelZuo 4y ago
      It is weird how the vast majority of commenters on HN ignore any adjustments for changes in quality in housing discussions. Housing prices seem pretty inline with population growth after adjusting for location and building quality differences.
- refurb 4y ago
  With rising rates expect housing to fall. Canada had a massive run up and with increasing rate the ‘burbs of Toronto are down 25% in the last two months. Unless you have a crystal ball, I wouldn’t count on the current trend continuing.