3 ms·

To be fair to the authors of the article the majority of people who buy homes are buying with a mortgage. Cash buyers are the minority. To add to that if you

To be fair to the authors of the article the majority of people who buy homes are buying with a mortgage. Cash buyers are the minority. To add to that if you were a cash buyer, yes its cheaper than last year but I would probably hold because theres lots more to come out of this market as the rates go up and the sustained pressure of higher mortgage rates filter through peoples personal costs. I'm just happy that people buying home property strictly for speculative purposes are feeling heat. I'm looking at REITs etc.

CuriouslyC 4y ago
They're feeling a lot less pain than people who need to take out mortgages for property. Rents are skyrocketing, and with home prices dropping all cash buyers who are renting the properties out are laughing all the way to the bank while everyone else suffers.
- mint2 4y ago
  Well yes, someone with >1M of extra cash on hand is going to be not hurting too much. That’s at least 35k of interest alone if they they don’t buy a house and put it in a treasury bill. If the interest rates continue to raise, which they might suspect or a recession happens, then house prices would drop and their 1M house may be a 950k house in a year. A net loss of 85k versus safe treasury bills. Maybe if they rent they can only be out 50k in that scenario. This isn’t definite but people comfortably sitting on piles of cash do have reasons to pause too. (I’d love to be in that situation)
- boringg 4y ago
  I agree with your sentiment of concern but I don't think there's all of a sudden a lot of cash buyers converting homes to rental units and making a killing. Thats a lot of risk, work and capital being put to work for not a particularly great return. Especially into one asset thats currently devaluing pretty quickly. I don't buy your logic.

3 ms·

To be fair to the authors of the article the majority of people who buy homes are buying with a mortgage. Cash buyers are the minority. To add to that if you

by boringg 4y ago

CuriouslyC 4y ago
They're feeling a lot less pain than people who need to take out mortgages for property. Rents are skyrocketing, and with home prices dropping all cash buyers who are renting the properties out are laughing all the way to the bank while everyone else suffers.
- mint2 4y ago
  Well yes, someone with >1M of extra cash on hand is going to be not hurting too much. That’s at least 35k of interest alone if they they don’t buy a house and put it in a treasury bill. If the interest rates continue to raise, which they might suspect or a recession happens, then house prices would drop and their 1M house may be a 950k house in a year. A net loss of 85k versus safe treasury bills. Maybe if they rent they can only be out 50k in that scenario. This isn’t definite but people comfortably sitting on piles of cash do have reasons to pause too. (I’d love to be in that situation)
- boringg 4y ago
  I agree with your sentiment of concern but I don't think there's all of a sudden a lot of cash buyers converting homes to rental units and making a killing. Thats a lot of risk, work and capital being put to work for not a particularly great return. Especially into one asset thats currently devaluing pretty quickly. I don't buy your logic.