5 ms·

I hadn't considered the impact of #3, even though I knew it was a reality. Being in a position to buy a new house but not take advantage of low interest rates (

by debacle 13y ago

I hadn't considered the impact of #3, even though I knew it was a reality. Being in a position to buy a new house but not take advantage of low interest rates (because I don't want a long amortization on the mortgage), it actually makes little sense to buy right now except maybe if I planned to leverage a diminished equity in a different market. #6 seems somewhat tinfoil-hatty. Does anyone have some data to back up #7? > Buyers should be rioting in the streets, demanding an end to all mortgage subsidies. ...and we went off the deep end. #9 is incredibly specious. Why would retired people sell? Where are they going to live? #10 is very true, however it's so difficult to trust a new home builder. Even if you know what bad construction looks like, it takes an immense amount of effort to ensure that everything is done properly and you'll probably be adding 20% onto your cost just to babysit the construction.

huherto 13y ago
#9 They will probably try to downsize. Or they can do a reverse mortgage, but I don't know how that would affect the market.
rhplus 13y ago
#9 is incredibly specious. Why would retired people sell? Where are they going to live? If a person is physically able, then a smart option is to move to a small apartment in a location close to services and shops. Downsizing reduces unnecessary energy costs, taxes, maintenance, yard work, etc. Based on my city, the equity in a median suburban home could easily pay 15 years of rent without investment, maybe 25 - 30 with really good investment. If there's physical support required, then an apartment in the massively booming "Retirement Living" industry might be a good choice. Here's an example that costs ~$4,500/month, meaning you could probably pay 10 - 15 years after good money management from the sale of a median suburban house in these markets: http://www.retirement.org/financial-info/home-cost-calculator/ http://www.retirement.org/financial-info/home-cost-calculato... The other option is to sell the house now to investors and use the equity to support living and healthcare costs. Then you simply move out at a more convenient later date (i.e. when you die): http://en.wikipedia.org/wiki/Reverse_mortgage#When_the_loan_comes_due_3 http://en.wikipedia.org/wiki/Reverse_mortgage#When_the_loan_...
muzz 13y ago
#7 is the Shadow Inventory Myth. Completely unfounded rumors were spread in 2009,2010, etc that banks had a huge backlog of foreclosures that they were keeping off of the market. Completely baseless however.

by debacle 13y ago

huherto 13y ago

#9 They will probably try to downsize. Or they can do a reverse mortgage, but I don't know how that would affect the market.

rhplus 13y ago

#9 is incredibly specious. Why would retired people sell? Where are they going to live? If a person is physically able, then a smart option is to move to a small apartment in a location close to services and shops. Downsizing reduces unnecessary energy costs, taxes, maintenance, yard work, etc. Based on my city, the equity in a median suburban home could easily pay 15 years of rent without investment, maybe 25 - 30 with really good investment. If there's physical support required, then an apartment in the massively booming "Retirement Living" industry might be a good choice. Here's an example that costs ~$4,500/month, meaning you could probably pay 10 - 15 years after good money management from the sale of a median suburban house in these markets: http://www.retirement.org/financial-info/home-cost-calculator/ http://www.retirement.org/financial-info/home-cost-calculato... The other option is to sell the house now to investors and use the equity to support living and healthcare costs. Then you simply move out at a more convenient later date (i.e. when you die): http://en.wikipedia.org/wiki/Reverse_mortgage#When_the_loan_comes_due_3 http://en.wikipedia.org/wiki/Reverse_mortgage#When_the_loan_...

muzz 13y ago

#7 is the Shadow Inventory Myth. Completely unfounded rumors were spread in 2009,2010, etc that banks had a huge backlog of foreclosures that they were keeping off of the market. Completely baseless however.