4 ms·
> Property in desirably places is especially intrinsically limited. Yes...but property values are way up all over. Boise, Phoenix, Nashville...even middle of
by silisili 4y ago
> Property in desirably places is especially intrinsically limited.
Yes...but property values are way up all over. Boise, Phoenix, Nashville...even middle of nowhere Kansas.
El Paso is having it rough. They've always had super cheap houses to the point of unbelievable...what most would consider a decked out mansion for 300k or so, and a 3+ percent property tax. Guess what's happening now that everyone's regular ol 150k house is now worth 400k?
Valuable property will always have value, but the vast majority of US property is not so desirable. It's already stalled, and it's going to be a bloodbath next year.
The real question is what happens when all the buyers of the last 3 or so years are underwater? We either end up in 2008 again, or tons of bailouts which just pushes inflation further towards the houses being worth it again.
- DSingularity 4y agoWhy would they sell? They live there now. Why also would builders not keep prices high buy produce less? 2008 was bad loans coming to head. I don’t think it’s going to be the same.
- silisili 4y ago> Why would they sell In many cases, they don't, they just walk away. Would you stay in a 500k 2000sqft house that you have no equity in, when a 300k 2000sqft house was for sale next door? In a non-recourse state? And even for principled people, when you lose your job or fall behind on something you overpaid for, it's really easy to just walk away.
- thebradbain 4y agoEven in non-recourse states, walking away from your mortgage will decimate your credit score and preclude you from getting a mortgage on a cheaper property in practice, even if theoretically it pencils out on paper.
- yawnr 4y agoBecause you have a 2.5% mortgage and your monthly payment is still smaller than than 300k house at current rates. This is going to be the main issue to me. People are just going to sit in all these houses with bloated prices because the rates they pay are so low, and prices are going to have a very hard time returning to anything close to what they were with inventory so low.
- tjr225 4y agoThis is the situation I’m in. I’m in the Seattle metro and the mortgage on my 3 bedroom ranch is less than a 1 bedroom apartment in Seattle. I can commute if I need to but why would I ever give this up? I have 0 other debts which makes it extra compelling.
- DSingularity 4y agoYou will never get approved, unless you have workarounds. Even if you did that 7% interest rate will make it all even out for most people.
- francisofascii 4y agoBoise, Phoenix, and Nashville are all very desirable, actually. Just not top tier desirable like the Bay Area, NYC, Austin, DC, and Seattle.
- silisili 4y agoI didn't mean to insult those cities per se, I just meant their specific location isn't special. Near-ocean land in California can't really be built forever, nor elsewhere. Whereas, many cities like those I listed (and Austin you listed) don't really have anything inherently special about them, landwise.