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It's kind of amazing how the (as far as I know) unique 30 year fixed rate mortgages you get in the USA make the fed even more powerless to do anything about housing prices. At least here where you can fix interest for a few years max raising interest rates tends to effect everybody with a mortgage sooner or later, in the US all it does is gently caress over people trying to get onto the ladder or people who are forced to sell for some external reason (obviously cash buyers keep winning in all markets forever, just as God intended). Edit: Also obviously the fed doesn't give a poo poo about making housing prices go down, their stated primary goal is to punish workers.
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Jan 13, 2023 03:27
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bawfuls posted:What is their incentive to sell? If they've been in the home for 10-15 years, then they not only saw some appreciation before the covid-run up, but also likely refinanced at some point in the last 3 years with bottom basement rates. Again they'd have no incentive to sell in the event of falling prices because what are they going to do at that point? Buy something else with a much higher rate? Start renting again just for fun? If they've been in the house for 10-15 years that means that they are unlikely to be stretched financially to make the payments, because they probably made initial payments that were higher than what they're paying now after a low-rate refi. These are the last people who would sell in the event of a downturn. This is all anecdotal but from people I know, including realtor friends and my landlord: - their sale profit is high enough to pay off the principal in full and buy in cash elsewhere - they are second properties held purely as investments and the seller simply keeps the cash - they are long-time owners who have already paid off the principal and want to maximize their sale return - the terms of their loan allow them port the mortgage to another property in a less volatile market, or buy a larger property in a lower CoL area while also lowering their payments by applying sale profits to the principal Some of these obviously don’t apply to people who bought in the last 3-4 years, but the fact that even those people are exiting the local market means there’s still a pretty big buffer for prices to fall before literally everyone refuses to sell.
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Jan 13, 2023 03:29
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TheSlutPit posted:This is all anecdotal but from people I know, including realtor friends and my landlord: Basically what I'm saying is people who bought 10+ years ago have more flexibility to sell when it is opportune for them, and are LESS likely to be forced to sell during tough times which would contribute to falling prices. bawfuls has issued a correction as of 03:37 on Jan 13, 2023 |
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Jan 13, 2023 03:33
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i had no idea you could port a mortgage
actionjackson has issued a correction as of 04:01 on Jan 13, 2023 |
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Jan 13, 2023 03:59
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Ornery and Hornery posted:I wish anybody knew actual poo poo about what home prices are going to do.
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Jan 13, 2023 04:05
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Ammanas posted:somehow people here in california are able/willing to spend 55+% of their pretax income on housing. i don't get it and it seems like a recipe to catastrophe...then again literally every marker in the American economy feels like it should result in catastrophe but things just keep chugging along. that’s the magic of America; stories of heroism are spread far and wide. people suffering catastrophe fall into a crevice and become invisible
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Jan 13, 2023 04:12
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TheSlutPit posted:I mostly agree with this, but I think you underestimate the proportion of homeowners who have been sitting on property for 10-15 years and their ability to drive a major sell off. Someone who bought a home before 2015 in an attractive neighborhood could eat a 20% drop-off from the peak in a sale and still walk away with a substantial profit, and they have every incentive to exit once their homes are no longer printing money. Meanwhile the demand—largely driven by young moneyed techies selling stock to cover mortgage payments beyond their means—diminishes due to a deflation of the tech bubble. I certainly don’t think it’s a sure thing but the whole market has seemed like an unstable system for quite a while and a self-reinforcing downturn is not out of the question. Hi, I am a person that your post describes and let me just say plain and clearly, no we don't. Home bought in 2014, refinanced with super low rates in 2020. We make decent money but could literally not afford to live in our neighborhood, much less our home, if we bought now. It went from ~280 to in 2014 to a bit under ~600 now, our interest on our mortgage is under half of what modern rates are. It's not a special house, it certainly shouldn't be worth over half a million dollars, but that's just the housing market for you now. Out of curiosity I've looked at 30 year mortgages at present rates if we literally bought our own home from ourselves we'd go from "currently have enough money pay off the mortgage but our rates are so low that'd be a poor financial decision" to "could not afford where we live because payments would over double, and we'd be at risk of losing everything if one of us lost our job". No one who lives in a property in question is going to sell now unless you force them to at the economic equivalent of gunpoint. Your average person may not be good at math or economics but they can google what modern payments on a 30 year mortgage would look like. If you want to encourage mass selloffs and lower housing prices you're gonna have to put pressure on institutional investors that do not live in the property they own, but that's prolly not happening in america. ArbitraryC has issued a correction as of 04:21 on Jan 13, 2023 |
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Jan 13, 2023 04:19
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my chiropractor at the physical therapist can’t buy a house in ft collins colorado
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Jan 13, 2023 04:22
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ArbitraryC posted:Hi, I am a person that your post describes and let me just say plain and clearly, no we don't. Home bought in 2014, refinanced with super low rates in 2020. We make decent money but could literally not afford to live in our neighborhood, much less our home, if we bought now. It went from ~280 to in 2014 to a bit under ~600 now, our interest on our mortgage is under half of what modern rates are. It's not a special house, it certainly shouldn't be worth over half a million dollars, but that's just the housing market for you now. Out of curiosity I've looked at 30 year mortgages at present rates if we literally bought our own home from ourselves we'd go from "currently have enough money pay off the mortgage but our rates are so low that'd be a poor financial decision" to "could not afford where we live because payments would over double, and we'd be at risk of losing everything if one of us lost our job". https://www.nerdwallet.com/ca/mortgages/porting-a-mortgage-explained Sorry if this doesn’t apply to you but it does to many other homeowners
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Jan 13, 2023 04:23
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TheSlutPit posted:https://www.nerdwallet.com/ca/mortgages/porting-a-mortgage-explained But you only get your current rate for what you have left on your current mortgage right? Why is this better than just selling your home and applying that money to a new mortgage as a larger down payment?
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Jan 13, 2023 04:28
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actionjackson posted:But you only get your current rate for what you have left on your current mortgage right? Why is this better than just selling your home and applying that money to a new mortgage as a larger down payment? The poster is just grasping at straws in hopes the stark reality of "every year that passes without having a home makes me less likely to be able to afford one" somehow goes away. Insisting that logically, it must be a good idea to sell now in spite of your lying eyes sadly doesn't fix the issue. There's gonna obviously be people moving around for jobs/life circumstances/whatever, but basically everyone lucky enough to have a house in the city they intend to live in within a reasonable drive of their job is gonna hold onto it until they die barring an unexpected lottery-esque windfall because having a house priced even half a decade ago with a ~3% refi rate is unimaginably better than anything you can do now.
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Jan 13, 2023 04:38
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TheSlutPit posted:This is all anecdotal but from people I know, including realtor friends and my landlord: I hate to break it to you but your landlord and people who make money off home sales do not have your best interest at heart when trying to explain to you why long-term stable home ownership is a bad call.
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Jan 13, 2023 04:44
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ArbitraryC posted:The poster is just grasping at straws in hopes the stark reality of "every year that passes without having a home makes me less likely to be able to afford one" somehow goes away. Insisting that logically, it must be a good idea to sell now in spite of your lying eyes sadly doesn't fix the issue. There's gonna obviously be people moving around for jobs/life circumstances/whatever, but basically everyone lucky enough to have a house in the city they intend to live in within a reasonable drive of their job is gonna hold onto it until they die barring an unexpected lottery-esque windfall because having a house priced even half a decade ago with a ~3% refi rate is unimaginably better than anything you can do now. yes i'm fortunate enough to be in that situation, but it would also be nice not to feel like i can literally never move again
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Jan 13, 2023 04:52
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actionjackson posted:yes i'm fortunate enough to be in that situation, but it would also be nice not to feel like i can literally never move again Part of the ship, part of the crew.
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Jan 13, 2023 05:05
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ArbitraryC posted:The poster is just grasping at straws in hopes the stark reality of "every year that passes without having a home makes me less likely to be able to afford one" somehow goes away. Insisting that logically, it must be a good idea to sell now in spite of your lying eyes sadly doesn't fix the issue. There's gonna obviously be people moving around for jobs/life circumstances/whatever, but basically everyone lucky enough to have a house in the city they intend to live in within a reasonable drive of their job is gonna hold onto it until they die barring an unexpected lottery-esque windfall because having a house priced even half a decade ago with a ~3% refi rate is unimaginably better than anything you can do now. You’re insane dude I’m literally giving homeowners advice on how to leverage their existing mortgages and equity into more money/leverage.
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Jan 13, 2023 05:06
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i am harry posted:my chiropractor at the physical therapist can’t buy a house in ft collins colorado a good start but quackery should be outlawed entirely
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Jan 13, 2023 06:52
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i am harry posted:my chiropractor at the physical therapist can’t buy a house in ft collins colorado Chiropractors should be paid in monopoly money anyway.
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Jan 13, 2023 10:38
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TheSlutPit posted:You’re insane dude I’m literally giving homeowners advice on how to leverage their existing mortgages and equity into more money/leverage. You're not explaining why anyone would sell at a reduced price, though. You're just giving an explanation for how people can trade homes back and forth at the current inflated prices. Like the key issue here is why people would be desperate enough to sell their homes well below (current) market value, not why or how people should sell. Prices don't just dive because of forces of nature, they dive because tons of people are constantly lowering their sales price so that someone will actually bite. You're suggesting that existing homeowners who want to take their profits will, for some reason, drop their prices by huge margins so they can instead move their mortgage onto another home being sold by another homeowner who for some reason is also dropping their price by a huge margin. People who want to cash in on their homes are not going to take huge hits to their home's sale value so they can port their mortgage. That doesn't make sense. That's realtor logic trying to escape the reality that the market is locking up.
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Jan 13, 2023 11:51
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Paradoxish posted:High home prices are terrible, you just need policy to fix those prices. Relying on the market (ie, some kind of price crash) means that you're rooting for a situation that absolutely will not make homes more "affordable," even if they sell for much less. Unfortunately, relying on the policy being fixed is rooting for a situation that will not happen. I live in the suburbs of Saint Paul, Minnesota and there is a lot of new housing going up, a mix of apartments and houses. Problem is that of the new homes going up, a lot of them appear to be homes "in the low $700,000s". The average person cannot afford to make a down payment on this home, even if they were to get an FHA loan, that is still like a $7,000-20,000 down payment. The market for "average" or "starter homes" is highly competitive because of the homes above, but also because of private equity turning starter homes in to rentals and a mixture of small business tyrants and people who want "passive income" wanting to be landlords. The reason that rooting for a policy change is kind of a fools errand is that the only policy that could lower the cost of housing is for a government ran/sponsored program that built affordable single family housing. And as much as that might probably do the trick, America is no longer that kind of country, if it ever was.
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Jan 13, 2023 13:08
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no, the government should not run/sponsor a climate arson program it already does enough of that
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Jan 13, 2023 14:32
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Exodus1984 posted:Unfortunately, relying on the policy being fixed is rooting for a situation that will not happen. I never said that policy solutions will happen. You are absolutely correct: home prices will never become more affordable.
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Jan 13, 2023 16:13
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https://www.post-gazette.com/local/city/2023/01/12/roosevelt-building-downtown-pittsburgh-fatal-fire-eviction/stories/202301120093 Subsidized low income highrise apartment building in a prime location has a small fire that affects a small part of the building, owner decides that the entire building has to be shut down and everyone needs to be evicted so they can "fix" the damage and, no doubt, come back next year with premium-priced market rate units. A judge shut it down for now but I'm sure it'll work out for the owners in the end. poo poo like this makes me spitting mad.
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Jan 13, 2023 16:36
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Paradoxish posted:You're not explaining why anyone would sell at a reduced price, though. You're just giving an explanation for how people can trade homes back and forth at the current inflated prices. why would you take a hit on your home's sale value by porting your mortgage?
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Jan 13, 2023 17:15
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bawfuls posted:What is their incentive to sell? If they've been in the home for 10-15 years, then they not only saw some appreciation before the covid-run up, but also likely refinanced at some point in the last 3 years with bottom basement rates. Again they'd have no incentive to sell in the event of falling prices because what are they going to do at that point? Buy something else with a much higher rate? Start renting again just for fun? If they've been in the house for 10-15 years that means that they are unlikely to be stretched financially to make the payments, because they probably made initial payments that were higher than what they're paying now after a low-rate refi. These are the last people who would sell in the event of a downturn. drat good post
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Jan 13, 2023 17:20
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the downside is that if you have a neighbor that you really hate you won't be able to get away from them the only reason I can see selling if you bought at low prices and rates (outside of major life changes of course) would be if you had enough equity in your home to buy your next home fully (or at least mostly fully) in cash. obviously then interest rates don't matter
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Jan 13, 2023 17:25
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actionjackson posted:why would you take a hit on your home's sale value by porting your mortgage? Might have been unclear, but that's not what I was saying. I was saying that being able to port your mortgage doesn't explain why people would sell in a down market, because you'd still be selling your house for less money.
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Jan 13, 2023 17:29
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i love the small size of this house and the location is really nice, but lol at the price. obviously it's a flip and https://www.zillow.com/homedetails/4108-E-27th-St-Minneapolis-MN-55406/1977399_zpid/ edit: the county valuation is 260K lol actionjackson has issued a correction as of 17:57 on Jan 13, 2023 |
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Jan 13, 2023 17:41
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^^ tbh im semi-surprised zillow still reports price history. all they're doing it broadcasting how loving stupid you are to even be looking at this blatant attempt to rip you off.actionjackson posted:the downside is that if you have a neighbor that you really hate you won't be able to get away from them what do you mean 'if'. one of the american ten commandments is to Hate Thy Neighbor.
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Jan 13, 2023 17:44
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actionjackson posted:i love the small size of this house and the location is really nice, but lol at the price. obviously it's a flip and One of the good bits of shopping for a house with a good realtor is seeing all the photos and information on the previous times the home was listed. Get to see all the poo poo house flippers painted over. Blackhawk posted:It's kind of amazing how the (as far as I know) unique 30 year fixed rate mortgages you get in the USA make the fed even more powerless to do anything about housing prices. At least here where you can fix interest for a few years max raising interest rates tends to effect everybody with a mortgage sooner or later, in the US all it does is gently caress over people trying to get onto the ladder or people who are forced to sell for some external reason (obviously cash buyers keep winning in all markets forever, just as God intended). Something like 90% of American home loans are 30 year mortgages. edit: I guess the real unique thing about the US is how low a fixed rate mortgage is, especially for the last decade. Don't really see that anywhere else. Deadly Ham Sandwich has issued a correction as of 17:57 on Jan 13, 2023 |
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Jan 13, 2023 17:49
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bawfuls posted:What is their incentive to sell? Just want to point out that even for people who bought recently, being underwater is not going to be an incentive to sell in this market. That just means you are going to get absolutely hosed and never be able to get back on the ladder (or it'll take many, many years) if you bail out. If you can afford the payment and the upkeep, the incentives right now are all to dig in like a tick and figure out a way to make it work come hell or high water and those incentives are even more the case for folks who have no equity to cash out.
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Jan 13, 2023 17:57
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Ammanas posted:^^ tbh im semi-surprised zillow still reports price history. all they're doing it broadcasting how loving stupid you are to even be looking at this blatant attempt to rip you off. you're going to be SHOCKED what I found in the recording history (sorry it's a bit blurry)
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Jan 13, 2023 18:00
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Ammanas posted:yeah im pretty sure its 60% 'parents gave us 200k for a house' , 10% bay area high earners relocating, and 30% 'well we want a house and my agent says we can refinance in 6 months so our payment will only be $2.5k instead of $3600 so lets do it!!!!' I was under the impression mortgage companies check for large infusions of cash into your accounts before offering you a mortgage? The idea being if someone just hands you a fat wad of cash that could imply you don't have the financial stability to make your monthly payments? That happened to us, anyway, on both our mortgages. Or is this a "rich people can get away with anything" thing?
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Jan 13, 2023 18:21
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There are some extra hurdles, but I don't think it's usually an issue as long as you can qualify for the loan you're taking and you can prove that the "gift" isn't a secret loan that you need to pay back. I know a couple that got $100k toward a house from their parents as a bribe to have kids and I don't think their mortgage company thought twice about it. like to be clear, you have to say "we're getting a gift" because a huge lump sum appearing in your bank account will definitely raise red flags for a lot of lenders Paradoxish has issued a correction as of 18:27 on Jan 13, 2023 |
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Jan 13, 2023 18:25
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please give me a large lump sum of cash
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Jan 13, 2023 18:32
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my three closest friends either had their own parents front them the down payment or their spouse's parents did. must be nice. but also, what a poo poo society.
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Jan 13, 2023 18:34
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The majority of buyers under 35 purchased via a gift from their parents back in 2012 and I can only imagine that number has gotten higher in the interim.
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Jan 13, 2023 18:35
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Paradoxish posted:There are some extra hurdles, but I don't think it's usually an issue as long as you can qualify for the loan you're taking and you can prove that the "gift" isn't a secret loan that you need to pay back. Yeah, pretty sure it has to come from family and there has to be paperwork that says “this is absolutely unequivocally a gift” but as long as you do that and otherwise qualify for the monthly payments it’s fine to have somebody else pay your down payment
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Jan 13, 2023 18:38
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Thanks for the clarifications. This all very well may have been explained to me previously but usually when people start talking about money, specifically the tedious arcana of the financial industry, my eyes glaze over and I can't make myself understand or care.
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Jan 13, 2023 18:40
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Ornery and Hornery posted:please give me a large lump sum of cash a mortgage broker unironically advised me to ask this of my friends and family
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Jan 13, 2023 18:41
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edit: already explained like four times
bawfuls has issued a correction as of 18:48 on Jan 13, 2023 |
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Jan 13, 2023 18:45
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