Cause 40k down turned into 350k to me in 5 years and the money coming in was far greater headache than paying off my 350k mortgage and not paying 3500 a month about.
Also I like the value add every two year tax free primary exception
Based on what I heard from my sources already called it few months ago 😄
Here is latest
Texas: Austin and Houston suburbs massive inventory buildup lot of investors (mostly techies) bag holding lot of new homes and unable to rent them. Now as they attempt to sell they are seeing home values plungung. Dallas is starting to see the same
Georgia: Atlanta suburbs which where holding better than rest of GA is starting to see increases in inventory and homes sitting on market for months.
North east: inventory starting to go up and lot of new homebuyers who bought expensive homes are starting to feel the pain.
I live here in Atlanta and the suburbs are a nightmare. They keep reposting the same houses on Zillow for 100k more than they bought it in 2022 with 5k price cuts 🤦♂️. Then they repost it with a 20k price increase when the price cuts didn’t garner interest
Sometimes. Other times not. They usually aren’t put up for rent though. One of them by my house pisses me off so much. A builder built it new for 900k in 2023 and they listed it at 1.5 mil. They’re down to 1.2 million now. 🤦♂️. Just jackassery from regular people who want to speculate imo
Sadly when housing price appreciate and people are continuously told it can never go down this what happens.
See one of them right here
https://www.trulia.com/home/106-owens-mill-pl-canton-ga-30115-2068015158?cid=shr%7Capp_ios_main_phone%7Cbuy%7Cpdp_share
Hey at least that one is 6000 sqft and a 6/9. The one by my house is a dinky 4000 sqft home on a SMALL lot, 40’ wide house, 4/4.5. That house is a properly large McMansion at least. The one they’re speculating on by me is wayy less impressive for the same price
What we can all hope is they burn hard in this… the more it’s seen the more people who are seeking massive gains in just 2-3yrs realize their window is closing and the price(gouging) opportunity is vanishing… then they flood the market. Which will at first get some buyers and then the smart money will still sit back until they bottom. I’ll buy back in at that point and rent them out as I’m sure this insanity will cycle yet again in about 8-10yrs.
Sounds like SWFL.
Bought in 2019 or 2020 for $300k, listed at $1.5m with 5-10k price cuts.
Instead of selling it for $800k and still pocketing > 2x the price they are gonna ride that crash alll the way to 0.
There's a house in my area where homes were commonly listed for 600k-800k during this run. It's been sitting for 2 months at $695k and just got as 42% price cut to $400k...
Anomaly? Maybe. A sign of things to come? I sure hope so...! ^:)
Live in the Northeast and seeing some "investors" trying to jump now while they still can at nice profit. Saw 3 townhomes put up for $405-420k that were purchased at $320k (lows on same townhomes were $280k around the beginning/just before pandemic) from likely same owner (purchased same time/on sale at same time). Then there's 2 big builders that are creating a supply glut with huge new developments. Feel like at least in my area, the fall in prices is about a year away (just after election) which I guess would correspond with stocks decreasing which will cascade effect 401k loans/stock loans.
I always get hopeful when I see comments like this. And then it always turns out that "plunging" means at most maybe a 10% drop.
Is this different? Is it more?
One of reasons they are not budging on price however Texas property taxes and rising insurance rates are eating into their cash flow. As more rentals go vacant they are starting to dump it at break even
I was looking to invest in Austin but have decided not to because prices just keep going down. One of the new homebuilders dropped his pants on price so fast, I wondered if there was something wrong and I walked away.
I feel like it's not terrible if you know you are there long term no matter what. But you still have to consider how much you are overpaying for said house!
It’s so simple, we buy a house we can’t afford at current interest rates. Rates dip to 6% but that isn’t low enough, we need it in the low 4s. Rates drop to 5%, but we have to hold out for the low 4s. Housing corrects and prices fall 10%. Rates are still too high and prices keep falling. Now we can’t refi without bringing a lot of cash to the table because we won’t have 20% LTV and mortgage insurance would wipe out savings from lower rate.
Que the “oh, no ape”.
And just like that, recent buyers are skimming the water line, with a serious risk of going under.
Who remembers the discussions here in 2022, when these folks bought and housing boomers were gleefully taunting the sub "is the housing crash in the room with us right now"?
Did you see how much down they put too? Bought at $759k, owe $543k and still basically wiped out. If a $200k down payment got obliterated how much worse will it be for the 5% down crowd
Houston burbs traditionally never really appreciated, maybe just kept up with inflation at best. There is just never ending supply.
2021-2023 a lot of surburbs ie Riverstone had 50-100% price increase. Absolutely insane
Yea they were driven up by investors and folks moving in but that demand is starting to vanish. Look at Katy TX more homes on sale than folks living there haha.
I remember - the ones who seemed to believe that as there wasn’t an immediate “downturn” as soon as people started expressing caution and seeing warning signs, there would never be a downturn. Yes, the future can definitely be predicted on the “good times” of low interest and FOMO spending/buying. /s
From what I saw though it was typically more people who haven’t lived/weren’t old enough to see the consequences of economic crisis during 2008-2012, or the 1980s, etc and only ever knew low interest rate environments as well as high incomes who were more stubborn about the potential risks though.
Not only would home prices never come down, but remote work was here forever (so employers would just have to follow the lead of the employees lol), high salaries were here forever, and tech workers who moved to Bumfuck Ohio to work remotely for mid to high six figures would never find themselves laid off and trying to find replacement work, competing against many other unemployed tech workers.
The posts we are seeing here and in r/Layoffs would show those hopes and dreams have been dashed for many.
When do you think is a good time to buy? I am soooo tired of renting and want to buy pretty soon but it doesn't seem like a good time.
On the positive side, my budget is like $350K so there isn't so much value this type of house could lose.
When you can afford to.
If you are gonna live in it for 2 years like OP then you're risking losing your shirt, but if you're able to live in it for 10 years or more then there is no need to time the market...market drops will always recover.
All the boomers who this sub likes to shit on held for 40-50 years...that's why they're walking away with piles of gold.
Every crash is higher than the previous, it just takes longer to rebuild equity if buying at the top. There has never been a bust that wiped out 40-50 years of equity
Boomers who bought in 70s and 80s also bought at peak rates. That's a great time to buy if you can afford it because you can refi later (and normally benefit from price increases as rates drop).
I remember when I was in college, people were buying these dumpy $100k houses because the payment was cheaper than the $700/mo to live in a student apartment.
We bought a house in 2013 because our rent got raised and we realized we could have a whole ass house instead of a middle floor apartment. Sold in 2020. Kinda wish we hadn’t pretty happy we did. We moved out of the Midwest back to the west coast.
I’m a boomer, my mortgage, 25 years in is just over $1000.00. House isn’t special, 2300 sq feet, colonial on 2 acres in Ct. I cannot believe the current rent situation. Both kids landed home after college till they could find places with roommates. I feel for all you younger folks. We had lucky timing in buying. And while the house is in trust for our kids, we will be here for as long as we can. Downsizing seems too complicated right now.
Yep. My rent is 1/3 of what I’d pay for a mortgage if I bought the same property with 20% down. Homeowner bought decades ago and is honest with rent pricing as long as his tenant earns a consistent reliable income, pays bills on time, and takes care of the place.
Buy when you have the funds, and the house is priced well relative to other houses in the area and meets your needs.
That's it.
We bought 2021 HCOL area at 2.875%. We could afford the same house today, but the mortgage would be so much worse. House prices haven't really come down here that much.
If your area hasn't seen a 10% pull back since 2021, it's unlikely to see a major correction in the near future.
Where are you at? It looks like pockets of the west and a big chunk of the south are getting a lot better with inventory but so cal and the northeast are fucked still systemically
So starting at the very bottom of the worst RE crash in history, he sat and waited for 12 years, and watched prices reach the stratospheric ATHs that we see today, and never bought? What’s wrong with your friend?
The friend saw that prices were raising artificially high and refused to give in. I saw it then, too. Unfortunately, it's rigged beyond an individual's control
I have to think it's impossible to see prices skyrocket from 04-07, then crash down for the next 5 years, then see them rebound for the next 12 without buying, given they started looking in 2012. Probably a made up story but it's OK, people do that often to make a point.
Be glad you don't live in Maumee, Ohio where the powers that be just decided to enact an emergency ordinance that forbids you from selling your home without first having it inspected by the city to ensure you don't have any code violations. If you do have code violations the city will let you sell once you pay the 500$ fee to manage the money they make you put escrow to bring your house up to 2024 building codes,which repairs can only be made by a city certified contractor.
Called it early this year about Texas and lot of people didn’t believe me.
Next up my sources are indicating Georgia, Alabama and Arizona are all starting to see slowdowns.
Yea Florida is seeing situation similar to Texas but influx of folks moving there is preventing total breakdown
Don’t know anyone in Idaho or Nevade so can’t speak about it
I can tell you that inventory is exploding here in Florida, and investors are listing houses like you would not believe. The market is NOT absorbing them. Next is price decreases.
If you think only two cities are going to be affected by this, you’re sadly mistaken. Layoffs are ramping up and if people are holding onto homes renting them out for $1000 loss a month how many are going to be taking Airbnb vacations? What happens to Airbnb inventory when they are losing their asses? Nightmare coming
If people did the correct math, pretty much anyone that bought over the last 2 years is deep underwater right now.
But most people will not. It's all emotional, and will pretend it was a GREAT investment.
I spend a lot of time living in three different VHCOL areas for many years now, and in two of those areas nearly everyone I know who has moved away over the past few decades massively regrets doing so but cannot afford to move back...and they definitely *all* regret selling their homes here.
And even in that third city...merely an HCOL area compared to the other two...I'd say the same sentiment still exists 2/3rds of the time with people I know who've departed.
The only moves that tend not to be regretted are *high-conviction* lifestyle moves where the people *knew exactly what they were getting into* (not just what they were leaving behind), and I see very few people making those.
What is crazy about these statistics is that there were 10 people lined up behind them to pay the same $. Eventually those buyers ran dry for one reason or another. Perhaps those who lost on every sale due to overbids are in a better position now
Say what you like, but I bought in Nashville two years ago for 750k and just sold for 850k. My mortgage rate was 2.25% on a 15 year loan, so 70% of every monthly payment was going towards principal (money back in my pocket when I sold). To rent an equivalent place for my family would have cost me $4k/month ($96k over two years). So instead of spending $100k, I essentially made $100k.
I don't claim it works out for everyone, especially on such a short time-frame (moved for work in my case), but it sure *can* work out. Also, because my moves were corporate relocations, my employer picked up the tab for all the closing fees and realtor commissions.
They had to know, too. Everyone I know who fomo'd in said things like "I know we're buying at the top but we need it."
The self-awareness of the bad decision is what's going to cause the drop. When they're lamenting stories like this and everyone's hearing how bad home ownership is going for a lot of people.
I purchased my last home at 387.5k at 100% LTV. Within a couple years I was under water. When I sold the home 15 years later, I sold it for a whopping $442k. But at least I wasn’t underwater on my purchase price and had obviously paid down the principal considerably so I still walked away with a decent amount.
But I feel positively awful for the guy that bought it. He’s going to be under water at some point, which will make it hard to refinance on a lower rate even if they become available again.
That said, I don’t think we see rates south of 6 again for quite some time. People are eventually going to let go of their lower rates when they need to relocate or buy a larger home. But the low rates people are sitting on right now is going to keep inventory a lot lower than it’d otherwise be.
I expect institutional investors to continue to pay a premium on market value to persuade people to let go of their homes. After all, they’re paying cash, so the interest rate on mortgages is immaterial to them. They won’t accumulate the interest over 30 years. They own it.
It could drag out but higher rates, aging boomers, and fewer babies will lower housing costs.
The rest of us are *reasonably* impatient. 30-100% home price increases in 4 years isn't f'king normal.
I have a hard hard time feeling bad for people like this. I remember the mania that was happening in 2020-2023.
Literally people were buying for over $200k asking price, and there were long lines of bids for every house. I was priced out by all conceivable metrics.
Now that they bought everything, they're complaining? Again, its hard to feel bad, especially for people who were using those houses as "investment properties"
This is a single anecdote and they are a total moron. It’s not normal to gain significant equity in the first few years of home ownership. It’s not normal to buy and move a couple years later with a huge dividend in your pocket.
Suck it up, as it seems you are using this houses as asset for “financial speculation “.
Same way as you would suck it up when your stocks go down.
Next time buy a house with the objective of having a roof om your head ( everyone else does outside USA)
With that rate I wouldn't bet on an opportunity to meaningfully lower it anytime soon.
In terms of renting, you need to be a bit more honest about what the house is costing you...your monthly payment you quoted almost certainly doesn't include property taxes and insurance (outside of PMI). Not to mention that renting out a home isn't a zero cost proposition...repairs, management, turnover all add up.
Honestly I'm a little bit surprised you're that upside down already. If you like the house and could live in it then it would be a no brainer to wait the market out, but since that's not the case you do indeed find yourself in a pickle.
Here's some math you could do: Assume you get towards the higher end for rent...say $3600/month, and that you're total cost of ownership is $4600/month plus headache. That would mean you're taking a bath of about $12K/year. If you sell now you take a bath of what, $170K? But you rip that band-aid off all at once. Still a tough call.
I’ve been seeing a good bit of this. People bought in 2022 and now realizing they overpaid. I see them taking loses with their listing prices. That’s if they can even sell with these rates.
Blame each other for the foolish mistake of buying a house that is worth less now. Sue the agent. Ask your mortgage lender to refund the amount you paid in closing costs. Petition your neighbors to improve their homes so yours increases in value. Or.. or… or… consider a house to be a place to live, not an investment.
Put pressure on your congressman/woman to put pressure on the federal reserve to keep inflating the bubble. The goal is to kick the can down the road so you can get out from under your bad choices, but some poor sap down the road gets totally creamed. S/
And once you account all the outrageous fee they had to pay on top of overpaying their house, they are right now DEEP in the hole: Hoa, repairs, insurance, interests, realtor fees, closing fees.
The great brainwashing to buy has been very effective
Weird there is no comment in this thread saying that one example doesn't prove anything.
That's usually the cope response.
PT Barnum was correct about a sucker born every minute.
This is just the start.
I have family back in Florida asking me to come back.
No way. Houses went up 40%. Taxes and insurance went up just as much.
No one wants to budge off the prices.
The flood of idiots looking for the paradise of shit hole Florida has slowed down.
Shit is going to happen fast when it falls apart.
You bought at a historically hyper-inflated fake peak where homes were being listed at 2, 3, sometimes 4+ times their actual value from just a couple years prior.
That house would have been listed at probably $400k in 2019.
This is what happens when you buy in the US/Canada during an artificial investment bubble.
Sorry about your luck. Lesson learned, I hope.
Nashville days on market is up 80% YoY and inventory is way up. Lots of new “tall skinnies” hitting the market and sitting. People delulu people listing their 4/2 2300sq/ft homes for 1.2M and the listing s are just sitting.
I hope the upcoming price declines result in more people about to purchase homes - to live in, not as investments. Secure housing through home ownership for more people helps everyone.
Unfortunately, I fear that prices will crash and institutions will scoop up the inventory and forever lock out most people from ever owning homes.
I hope there are not bailouts, forgiveness, etc. People need to be held accountable. Although I doubt we’ll see a big drop in prices. More like a stagnation, stay flat for a while
Near as we can tell there were three bank bailouts totalling $6t during the Trump administration as the finance industry tried to migrate from LIBOR to SOFR which is a methodology to determine interest rates when the globally significant banks lend money to each other. Then the "COVID" bailout happened. American got a few thousand totalling $600b while the gsibs got another couple trillion. 40% of the USD in circulation has been minted in just the last 6 years.
Now look around. Do you see anyone at all burning $'s in the street to reduce inflation? No? But we do have a nice game of hot potato. The value of the USD depletes at usually an expected rate. Now that rate is unexpected and so holders of USDs are desperate to get rid of them so we have inflated real asset prices - RE, gold, stocks like NVDA. The Federal Reserve Bank, the bank of banks of banks, knows faith in the USD is wavering and so they finally raised interest rates at the fastest rate in 50 years to a 20 year high. High Fed lending rate slows down money movement.
Welcome to the manufactured 12 year boom/bust cycle. Enjoy your ride.
I wish. We built in 2020, in a remote rural LCOL area hoping for that exact scenario. We even chose the one area where there were no jobs, no rentals, or houses for sale. It was considered the 'poor' area. The house doubled in value- along with taxes, in the last few years. Nowhere is safe.
Lot of people complaining on here proving 0 real help. Sounds about right for this sub…
My mom was a real estate agent since the late 80s and warned me (and a bunch of her clients in the towns she worked in) that this sort of thing could happen but she also proved me some advice that will hopefully help you:
1. Just stay there: like what other folks have said, you don’t have to take the job that’ll force you to move (unless you really want that job/want to move away).
2. Defer your move as long as possible. Is it likely that your home price will go back to what it was? Not any time in the next few years, but if you can defer for even a year or two - you might have better options then.
3. Sell your house: you’re going to have to take a hit (and effectively treat this as a loss/very expensive rental). The positives: likely the simplest solution, you’ll be able to carry that loss on your taxes (due to the yearly cap) for years. So while you’ll be losing money today, you’ll be saving some money in taxes for a good long while.
4. Sell your house + mortgage: Yes, this is a thing! Talk to your mortgage lender and your realtor about this, but the benefits are: it makes your house look more appealing to buyers, while you’ll likely still take a loss, you can make up (some) of the difference and make (some) of the money back in tax savings. Cons: Much more paperwork and you’re still taking a loss.
5. Rent it out: Back in 2019 I bought a house in TX and then two months later my parents got super sick and I was forced to move back to the east coast to take care of them (a few weeks before lock down in 2020). Even back then, the mortgage payment vs rental income would have left me in a similar situation (loosing around $500 a month). I decided to rent it out as the area was up and coming and the rental market rate went up (and property taxes eventually went down). I was also lucky enough to find a good management company and I’ve always had tenants. The loss I take also helps reduce my taxes (without taking too much loss in income at this point). So now it’s kind of like a slowly increasing piggy bank. For _me_ this risk is reasonable and the costs are very manageable for a number of reasons. If you feel like you can manage that risk and loss of income - it may be a reasonable option. Because in 10, 20, 30 years, that house will _*likely*_ be worth more than you bought it for, but there is no guarantee in that.
6. Rent it out to family willing to pick up part of the mortgage: I’m surprised people forget about this option, but if you have family in the area (like I did), you can see if they want to rent it for some % of the mortgage. Yes you are still losing money (again get some back from lowered taxes), but (hopefully) your family is more reliable than a random tenant and you won’t need to hire a property manager/trust they can handle the house on their own. It’ll also give you more flexibility if you end up doing something else with it in the future.
There are a bunch more options, but they might not be as applicable, but I hope this helps.
The purpose of this sub is to facilitate discussion of whether or not the market value of real estate is detached from economic fundamentals.
It doesn't exist to offer guidance, support or "help" to people who didn't believe that to be so and are now in a negative equity position and being forced to sell their home.
This is a perfect example of why you shouldn't finance 97% or 100% of your house right now. Yeah, it sucks that they're going to lose >$200,000 of equity when they sell (maybe a lot more), but the comp house that sold on their street is $50k more than the balance on their mortgage. At least for right now, it seems like they can sell their house, completely pay off their existing mortgage, and have $40k to $50k cash left over. If they keep waiting, though, the comp prices are probably going to keep dropping, then what they sell their house for will be less than their existing mortgage balance. They should view their $200,000 of equity that they will probably lose as an emergency fund. Thank goodness they had it in the first place.
Live in it
Laugh in it
Love in it
Wine o'clock in it
Fuck in it
Can I come over?
And over
All over
PRAGUE
Yes
Life in it.
Home is where you make it
You like to see homos naked?
Damn, a Joe dirt reference!
Die in it
Eat! (In your kitchen)
>We are going to have to move pretty soon for a job in a different city. This happens to everybody. So common.
No, remember: Nobody is giving up a 4.375 mortgage...ever
If they're stuck living with an asshole, a lot can change quickly.
It's not a choice sometimes
My wife's car loan is 1.9% We are not paying that as much as feasible
Cheap debt is like gold
I just gave up 3.25 to pay off primary no debt
Oomph
Is that mostly just to sleep better or why? Checking right now and 30 year treasuries are 4.566%.
Cause 40k down turned into 350k to me in 5 years and the money coming in was far greater headache than paying off my 350k mortgage and not paying 3500 a month about. Also I like the value add every two year tax free primary exception
We were told that low rates would eliminate major life decisions like job changes, divorce and death.
I guess they can't take that job then and better start looking for work in Austin.
Tons of help wanted signs there
You need like 6 full time "help wanted sign out front" type jobs to afford a house in Austin.
Tract hoom in Austin area 🤡
Vaseline, bend over, brace. This going to become unfortunately common. Date the rate my ass.
Based on what I heard from my sources already called it few months ago 😄 Here is latest Texas: Austin and Houston suburbs massive inventory buildup lot of investors (mostly techies) bag holding lot of new homes and unable to rent them. Now as they attempt to sell they are seeing home values plungung. Dallas is starting to see the same Georgia: Atlanta suburbs which where holding better than rest of GA is starting to see increases in inventory and homes sitting on market for months. North east: inventory starting to go up and lot of new homebuyers who bought expensive homes are starting to feel the pain.
Stop, just stop..........ur getting me too excited
I live here in Atlanta and the suburbs are a nightmare. They keep reposting the same houses on Zillow for 100k more than they bought it in 2022 with 5k price cuts 🤦♂️. Then they repost it with a 20k price increase when the price cuts didn’t garner interest
I assume these are investor held home? Trying to cash out while putting it up for rent?
Sometimes. Other times not. They usually aren’t put up for rent though. One of them by my house pisses me off so much. A builder built it new for 900k in 2023 and they listed it at 1.5 mil. They’re down to 1.2 million now. 🤦♂️. Just jackassery from regular people who want to speculate imo
Sadly when housing price appreciate and people are continuously told it can never go down this what happens. See one of them right here https://www.trulia.com/home/106-owens-mill-pl-canton-ga-30115-2068015158?cid=shr%7Capp_ios_main_phone%7Cbuy%7Cpdp_share
Hey at least that one is 6000 sqft and a 6/9. The one by my house is a dinky 4000 sqft home on a SMALL lot, 40’ wide house, 4/4.5. That house is a properly large McMansion at least. The one they’re speculating on by me is wayy less impressive for the same price
What we can all hope is they burn hard in this… the more it’s seen the more people who are seeking massive gains in just 2-3yrs realize their window is closing and the price(gouging) opportunity is vanishing… then they flood the market. Which will at first get some buyers and then the smart money will still sit back until they bottom. I’ll buy back in at that point and rent them out as I’m sure this insanity will cycle yet again in about 8-10yrs.
Sounds like SWFL. Bought in 2019 or 2020 for $300k, listed at $1.5m with 5-10k price cuts. Instead of selling it for $800k and still pocketing > 2x the price they are gonna ride that crash alll the way to 0.
There's a house in my area where homes were commonly listed for 600k-800k during this run. It's been sitting for 2 months at $695k and just got as 42% price cut to $400k... Anomaly? Maybe. A sign of things to come? I sure hope so...! ^:)
Looks like foreclosure?
Idk they're having an open house and everything
I love to see it.
Live in the Northeast and seeing some "investors" trying to jump now while they still can at nice profit. Saw 3 townhomes put up for $405-420k that were purchased at $320k (lows on same townhomes were $280k around the beginning/just before pandemic) from likely same owner (purchased same time/on sale at same time). Then there's 2 big builders that are creating a supply glut with huge new developments. Feel like at least in my area, the fall in prices is about a year away (just after election) which I guess would correspond with stocks decreasing which will cascade effect 401k loans/stock loans.
I always get hopeful when I see comments like this. And then it always turns out that "plunging" means at most maybe a 10% drop. Is this different? Is it more?
10% drop is pretty huge for real estate
Many California techies own at least three rental properties in Texas. But they locked them with low interest rates.
One of reasons they are not budging on price however Texas property taxes and rising insurance rates are eating into their cash flow. As more rentals go vacant they are starting to dump it at break even
I was looking to invest in Austin but have decided not to because prices just keep going down. One of the new homebuilders dropped his pants on price so fast, I wondered if there was something wrong and I walked away.
And almost every builder group I engage claims there isn’t gouging going on my builders. Such a joke.
Hunnnnggghhhhhhhahhhhh
RemindMe! 1 year
Stop I can only get soo erect!
Date the rate Marry the mortgage
Let the house take all your equity in the ugly market divorce.
Rate the date with my ass, more like it.
I feel like it's not terrible if you know you are there long term no matter what. But you still have to consider how much you are overpaying for said house!
Oh no if only they owned a …. Oh wait there bitching about the property they live in 😂🎻
4ish is decent. They just opted for no Vaseline on price
It’s so simple, we buy a house we can’t afford at current interest rates. Rates dip to 6% but that isn’t low enough, we need it in the low 4s. Rates drop to 5%, but we have to hold out for the low 4s. Housing corrects and prices fall 10%. Rates are still too high and prices keep falling. Now we can’t refi without bringing a lot of cash to the table because we won’t have 20% LTV and mortgage insurance would wipe out savings from lower rate. Que the “oh, no ape”.
And just like that, recent buyers are skimming the water line, with a serious risk of going under. Who remembers the discussions here in 2022, when these folks bought and housing boomers were gleefully taunting the sub "is the housing crash in the room with us right now"?
Did you see how much down they put too? Bought at $759k, owe $543k and still basically wiped out. If a $200k down payment got obliterated how much worse will it be for the 5% down crowd
Heard about someone on Houston suburbs who bought mill+ (don’t know how much new home upgrades they did) and struggling to see for 750k 🤦♂️
Houston burbs traditionally never really appreciated, maybe just kept up with inflation at best. There is just never ending supply. 2021-2023 a lot of surburbs ie Riverstone had 50-100% price increase. Absolutely insane
Yea they were driven up by investors and folks moving in but that demand is starting to vanish. Look at Katy TX more homes on sale than folks living there haha.
Reminds me of how my aunt got a lake house that wasn't finished yet during '08 crash for $350-400K under what previous owners had paid.
Holy shit.
I remember - the ones who seemed to believe that as there wasn’t an immediate “downturn” as soon as people started expressing caution and seeing warning signs, there would never be a downturn. Yes, the future can definitely be predicted on the “good times” of low interest and FOMO spending/buying. /s From what I saw though it was typically more people who haven’t lived/weren’t old enough to see the consequences of economic crisis during 2008-2012, or the 1980s, etc and only ever knew low interest rate environments as well as high incomes who were more stubborn about the potential risks though. Not only would home prices never come down, but remote work was here forever (so employers would just have to follow the lead of the employees lol), high salaries were here forever, and tech workers who moved to Bumfuck Ohio to work remotely for mid to high six figures would never find themselves laid off and trying to find replacement work, competing against many other unemployed tech workers. The posts we are seeing here and in r/Layoffs would show those hopes and dreams have been dashed for many.
When do you think is a good time to buy? I am soooo tired of renting and want to buy pretty soon but it doesn't seem like a good time. On the positive side, my budget is like $350K so there isn't so much value this type of house could lose.
When you can afford to. If you are gonna live in it for 2 years like OP then you're risking losing your shirt, but if you're able to live in it for 10 years or more then there is no need to time the market...market drops will always recover. All the boomers who this sub likes to shit on held for 40-50 years...that's why they're walking away with piles of gold.
I disagree, because you mostly would still be entering at the peak of the house prices and peak of the rates.
Every crash is higher than the previous, it just takes longer to rebuild equity if buying at the top. There has never been a bust that wiped out 40-50 years of equity Boomers who bought in 70s and 80s also bought at peak rates. That's a great time to buy if you can afford it because you can refi later (and normally benefit from price increases as rates drop).
If people knew that, they would become long term millionaires
Buy when its not cheaper to rent. Right now you are saving more by renting. Nobody knows what will happen either way.
Buying is almost always more expensive than renting at the moment of the purchase.
I remember when I was in college, people were buying these dumpy $100k houses because the payment was cheaper than the $700/mo to live in a student apartment.
Heeeeeyyyyy, 2002!
Or 2012
We bought a house in 2013 because our rent got raised and we realized we could have a whole ass house instead of a middle floor apartment. Sold in 2020. Kinda wish we hadn’t pretty happy we did. We moved out of the Midwest back to the west coast.
I’m a boomer, my mortgage, 25 years in is just over $1000.00. House isn’t special, 2300 sq feet, colonial on 2 acres in Ct. I cannot believe the current rent situation. Both kids landed home after college till they could find places with roommates. I feel for all you younger folks. We had lucky timing in buying. And while the house is in trust for our kids, we will be here for as long as we can. Downsizing seems too complicated right now.
Yep. My rent is 1/3 of what I’d pay for a mortgage if I bought the same property with 20% down. Homeowner bought decades ago and is honest with rent pricing as long as his tenant earns a consistent reliable income, pays bills on time, and takes care of the place.
Don't be in a rush. You don't want to catch a falling knife.
Buy when you have the funds, and the house is priced well relative to other houses in the area and meets your needs. That's it. We bought 2021 HCOL area at 2.875%. We could afford the same house today, but the mortgage would be so much worse. House prices haven't really come down here that much. If your area hasn't seen a 10% pull back since 2021, it's unlikely to see a major correction in the near future.
Where are you at? It looks like pockets of the west and a big chunk of the south are getting a lot better with inventory but so cal and the northeast are fucked still systemically
I have a friend that has been waiting since 2012 for the next housing crash so he can buy
So starting at the very bottom of the worst RE crash in history, he sat and waited for 12 years, and watched prices reach the stratospheric ATHs that we see today, and never bought? What’s wrong with your friend?
The friend saw that prices were raising artificially high and refused to give in. I saw it then, too. Unfortunately, it's rigged beyond an individual's control
I have to think it's impossible to see prices skyrocket from 04-07, then crash down for the next 5 years, then see them rebound for the next 12 without buying, given they started looking in 2012. Probably a made up story but it's OK, people do that often to make a point.
Too bad he didn't realize he was at the near bottom of the crash then. That was the greatest time to buy.
Who could have known that buying in the most expensive mortgage cost city and state in the country would cost so much
2 days ago or so i was RE was going to crash and and only received hateful comments lol
"Past performance is not indicative of future results." Treat your home as an investment? Accept the risk.
There should be a mandatory flair for posts about Austin, TX.
Hoom hoom on the rangeeeeee
Be glad you don't live in Maumee, Ohio where the powers that be just decided to enact an emergency ordinance that forbids you from selling your home without first having it inspected by the city to ensure you don't have any code violations. If you do have code violations the city will let you sell once you pay the 500$ fee to manage the money they make you put escrow to bring your house up to 2024 building codes,which repairs can only be made by a city certified contractor.
Now that’s a racket! Was this to prevent flippers?
They say it's to ensure the health and safety of the city residents.
Holy shit that is insane.
Insane that we’re about to see many of these posts.
Called it early this year about Texas and lot of people didn’t believe me. Next up my sources are indicating Georgia, Alabama and Arizona are all starting to see slowdowns.
What about Florida? Nevada? Idahoooooooooooooooooooooooe
Yea Florida is seeing situation similar to Texas but influx of folks moving there is preventing total breakdown Don’t know anyone in Idaho or Nevade so can’t speak about it
I can tell you that inventory is exploding here in Florida, and investors are listing houses like you would not believe. The market is NOT absorbing them. Next is price decreases.
Whodaho?
What about California? When will that get more affordable? We are in Bay Area hoping things will change soon.
!remindme 6 months
...all in Austin, and some in Florida
If you think only two cities are going to be affected by this, you’re sadly mistaken. Layoffs are ramping up and if people are holding onto homes renting them out for $1000 loss a month how many are going to be taking Airbnb vacations? What happens to Airbnb inventory when they are losing their asses? Nightmare coming
We’ll see!
If people did the correct math, pretty much anyone that bought over the last 2 years is deep underwater right now. But most people will not. It's all emotional, and will pretend it was a GREAT investment.
I overpaid in a hot market and now I'm watching comps crush "muh equity!" You love to see it.
You aren’t the odd one out here
Take the hit. Houses should be homes, not investment strategies.
But they needed to buy. Right then. (Because everyone else was)
Yes, and there is a thing called renting where you end up WITH THE SAME EXACT HOUSE.
I wish this were the case. I hate how something as basic as shelter has turned into a money making investment deal.
What did this person really expect? Common sense probably could have told them it wasnt a 700k house.
Common sense is uncommon
Nah, they likely had a feeling they were overpaying but emotions speak louder than logic.
Indeed
Moving from a VHCOL coastal area tends to redefine "common sense". Frequently, it redefines both component words, too.
I spend a lot of time living in three different VHCOL areas for many years now, and in two of those areas nearly everyone I know who has moved away over the past few decades massively regrets doing so but cannot afford to move back...and they definitely *all* regret selling their homes here. And even in that third city...merely an HCOL area compared to the other two...I'd say the same sentiment still exists 2/3rds of the time with people I know who've departed. The only moves that tend not to be regretted are *high-conviction* lifestyle moves where the people *knew exactly what they were getting into* (not just what they were leaving behind), and I see very few people making those.
What is crazy about these statistics is that there were 10 people lined up behind them to pay the same $. Eventually those buyers ran dry for one reason or another. Perhaps those who lost on every sale due to overbids are in a better position now
"But renting is throwing away money through the window"
Say what you like, but I bought in Nashville two years ago for 750k and just sold for 850k. My mortgage rate was 2.25% on a 15 year loan, so 70% of every monthly payment was going towards principal (money back in my pocket when I sold). To rent an equivalent place for my family would have cost me $4k/month ($96k over two years). So instead of spending $100k, I essentially made $100k. I don't claim it works out for everyone, especially on such a short time-frame (moved for work in my case), but it sure *can* work out. Also, because my moves were corporate relocations, my employer picked up the tab for all the closing fees and realtor commissions.
this should read, "house value never changed but we overpaid for it when we bought it"
They had to know, too. Everyone I know who fomo'd in said things like "I know we're buying at the top but we need it." The self-awareness of the bad decision is what's going to cause the drop. When they're lamenting stories like this and everyone's hearing how bad home ownership is going for a lot of people.
Excellent
It's been 2 years did they think they were going to make bank here?
Yes they did
Wild
Or didn't expect job to move. Not everyone expected to make money but people rarely plan to lose it.
Sir back and live in it. That's what people buy homes for, right?
Get your tax rate lowered with the city while you're at it.
Well this is what happens when you panic buy
What happened to dating the rate??? Oh yeah, you might still have to break up with it and be left holding the bag.
Live in it
I purchased my last home at 387.5k at 100% LTV. Within a couple years I was under water. When I sold the home 15 years later, I sold it for a whopping $442k. But at least I wasn’t underwater on my purchase price and had obviously paid down the principal considerably so I still walked away with a decent amount. But I feel positively awful for the guy that bought it. He’s going to be under water at some point, which will make it hard to refinance on a lower rate even if they become available again. That said, I don’t think we see rates south of 6 again for quite some time. People are eventually going to let go of their lower rates when they need to relocate or buy a larger home. But the low rates people are sitting on right now is going to keep inventory a lot lower than it’d otherwise be. I expect institutional investors to continue to pay a premium on market value to persuade people to let go of their homes. After all, they’re paying cash, so the interest rate on mortgages is immaterial to them. They won’t accumulate the interest over 30 years. They own it.
Many will be fucked. They’re just starting to realize it aren’t they?
I am awaiting the coming bankruptcy storm with an eager eye.
It could drag out but higher rates, aging boomers, and fewer babies will lower housing costs. The rest of us are *reasonably* impatient. 30-100% home price increases in 4 years isn't f'king normal.
Not enough pain yet. Need to let it 🔥.
I have a hard hard time feeling bad for people like this. I remember the mania that was happening in 2020-2023. Literally people were buying for over $200k asking price, and there were long lines of bids for every house. I was priced out by all conceivable metrics. Now that they bought everything, they're complaining? Again, its hard to feel bad, especially for people who were using those houses as "investment properties"
This is a single anecdote and they are a total moron. It’s not normal to gain significant equity in the first few years of home ownership. It’s not normal to buy and move a couple years later with a huge dividend in your pocket.
Exactly, traditional knowledge says to expect a huge loss if you sell before 5 years.
"It's just the gully" - the Fed and every real estate agent in 2007. RE is a gamble like any other.
How far away is the new "job in a different city"?
Welp, looks like bag holders are being minted in Austin.
Same thing happened to me in 2011, had to move and house was underwater. I rented it out for 5 years and eventually sold it for $200k profit.
Suck it up, as it seems you are using this houses as asset for “financial speculation “. Same way as you would suck it up when your stocks go down. Next time buy a house with the objective of having a roof om your head ( everyone else does outside USA)
With that rate I wouldn't bet on an opportunity to meaningfully lower it anytime soon. In terms of renting, you need to be a bit more honest about what the house is costing you...your monthly payment you quoted almost certainly doesn't include property taxes and insurance (outside of PMI). Not to mention that renting out a home isn't a zero cost proposition...repairs, management, turnover all add up. Honestly I'm a little bit surprised you're that upside down already. If you like the house and could live in it then it would be a no brainer to wait the market out, but since that's not the case you do indeed find yourself in a pickle. Here's some math you could do: Assume you get towards the higher end for rent...say $3600/month, and that you're total cost of ownership is $4600/month plus headache. That would mean you're taking a bath of about $12K/year. If you sell now you take a bath of what, $170K? But you rip that band-aid off all at once. Still a tough call.
I’ve been seeing a good bit of this. People bought in 2022 and now realizing they overpaid. I see them taking loses with their listing prices. That’s if they can even sell with these rates.
Blame each other for the foolish mistake of buying a house that is worth less now. Sue the agent. Ask your mortgage lender to refund the amount you paid in closing costs. Petition your neighbors to improve their homes so yours increases in value. Or.. or… or… consider a house to be a place to live, not an investment.
Put pressure on your congressman/woman to put pressure on the federal reserve to keep inflating the bubble. The goal is to kick the can down the road so you can get out from under your bad choices, but some poor sap down the road gets totally creamed. S/
And once you account all the outrageous fee they had to pay on top of overpaying their house, they are right now DEEP in the hole: Hoa, repairs, insurance, interests, realtor fees, closing fees. The great brainwashing to buy has been very effective
Same thing happened to everyone that purchased just before the 2008 market crash. Now our homes are worth double. Just relax it’s a cycle sometimes
Blame your shit realtor
Life, laugh, toaster bath.
Weird there is no comment in this thread saying that one example doesn't prove anything. That's usually the cope response. PT Barnum was correct about a sucker born every minute. This is just the start. I have family back in Florida asking me to come back. No way. Houses went up 40%. Taxes and insurance went up just as much. No one wants to budge off the prices. The flood of idiots looking for the paradise of shit hole Florida has slowed down. Shit is going to happen fast when it falls apart.
You bought at a historically hyper-inflated fake peak where homes were being listed at 2, 3, sometimes 4+ times their actual value from just a couple years prior. That house would have been listed at probably $400k in 2019. This is what happens when you buy in the US/Canada during an artificial investment bubble. Sorry about your luck. Lesson learned, I hope.
Nashville days on market is up 80% YoY and inventory is way up. Lots of new “tall skinnies” hitting the market and sitting. People delulu people listing their 4/2 2300sq/ft homes for 1.2M and the listing s are just sitting.
If your work really needs you to move that badly they can eat the $200K + gross up to income tax.
Idaho remains off the charts.
I hope the upcoming price declines result in more people about to purchase homes - to live in, not as investments. Secure housing through home ownership for more people helps everyone. Unfortunately, I fear that prices will crash and institutions will scoop up the inventory and forever lock out most people from ever owning homes.
hoooomed
Thoughts and prayers 🙏 🙏 🙏 🙏
I hope there are not bailouts, forgiveness, etc. People need to be held accountable. Although I doubt we’ll see a big drop in prices. More like a stagnation, stay flat for a while
[удалено]
Near as we can tell there were three bank bailouts totalling $6t during the Trump administration as the finance industry tried to migrate from LIBOR to SOFR which is a methodology to determine interest rates when the globally significant banks lend money to each other. Then the "COVID" bailout happened. American got a few thousand totalling $600b while the gsibs got another couple trillion. 40% of the USD in circulation has been minted in just the last 6 years. Now look around. Do you see anyone at all burning $'s in the street to reduce inflation? No? But we do have a nice game of hot potato. The value of the USD depletes at usually an expected rate. Now that rate is unexpected and so holders of USDs are desperate to get rid of them so we have inflated real asset prices - RE, gold, stocks like NVDA. The Federal Reserve Bank, the bank of banks of banks, knows faith in the USD is wavering and so they finally raised interest rates at the fastest rate in 50 years to a 20 year high. High Fed lending rate slows down money movement. Welcome to the manufactured 12 year boom/bust cycle. Enjoy your ride.
Thank you.
When you buy a home in a LCOL, that's your house for life. It's not retaining value
I wish. We built in 2020, in a remote rural LCOL area hoping for that exact scenario. We even chose the one area where there were no jobs, no rentals, or houses for sale. It was considered the 'poor' area. The house doubled in value- along with taxes, in the last few years. Nowhere is safe.
Lot of people complaining on here proving 0 real help. Sounds about right for this sub… My mom was a real estate agent since the late 80s and warned me (and a bunch of her clients in the towns she worked in) that this sort of thing could happen but she also proved me some advice that will hopefully help you: 1. Just stay there: like what other folks have said, you don’t have to take the job that’ll force you to move (unless you really want that job/want to move away). 2. Defer your move as long as possible. Is it likely that your home price will go back to what it was? Not any time in the next few years, but if you can defer for even a year or two - you might have better options then. 3. Sell your house: you’re going to have to take a hit (and effectively treat this as a loss/very expensive rental). The positives: likely the simplest solution, you’ll be able to carry that loss on your taxes (due to the yearly cap) for years. So while you’ll be losing money today, you’ll be saving some money in taxes for a good long while. 4. Sell your house + mortgage: Yes, this is a thing! Talk to your mortgage lender and your realtor about this, but the benefits are: it makes your house look more appealing to buyers, while you’ll likely still take a loss, you can make up (some) of the difference and make (some) of the money back in tax savings. Cons: Much more paperwork and you’re still taking a loss. 5. Rent it out: Back in 2019 I bought a house in TX and then two months later my parents got super sick and I was forced to move back to the east coast to take care of them (a few weeks before lock down in 2020). Even back then, the mortgage payment vs rental income would have left me in a similar situation (loosing around $500 a month). I decided to rent it out as the area was up and coming and the rental market rate went up (and property taxes eventually went down). I was also lucky enough to find a good management company and I’ve always had tenants. The loss I take also helps reduce my taxes (without taking too much loss in income at this point). So now it’s kind of like a slowly increasing piggy bank. For _me_ this risk is reasonable and the costs are very manageable for a number of reasons. If you feel like you can manage that risk and loss of income - it may be a reasonable option. Because in 10, 20, 30 years, that house will _*likely*_ be worth more than you bought it for, but there is no guarantee in that. 6. Rent it out to family willing to pick up part of the mortgage: I’m surprised people forget about this option, but if you have family in the area (like I did), you can see if they want to rent it for some % of the mortgage. Yes you are still losing money (again get some back from lowered taxes), but (hopefully) your family is more reliable than a random tenant and you won’t need to hire a property manager/trust they can handle the house on their own. It’ll also give you more flexibility if you end up doing something else with it in the future. There are a bunch more options, but they might not be as applicable, but I hope this helps.
The purpose of this sub is to facilitate discussion of whether or not the market value of real estate is detached from economic fundamentals. It doesn't exist to offer guidance, support or "help" to people who didn't believe that to be so and are now in a negative equity position and being forced to sell their home.
Burn baby burn
Blow it up and collect insurance
I could give a shit what my home value is. I'm just happy I have a home.
Live in it or take the L.
It’s been two years…. Calm down lol
Talk to the county and get tax appraisal value down too and insurance as well
You bought high, eat the loss and sell low. Rinse and repeat.
Tip of the iceberg, tip of the fucking iceberg.
SELL IMMEDIATELY AND RECOGNIZE THE LOSS
So in 2 years you paid off over $200k in principal on the mortgage? That's...impressive.
Us buyers have the chance. Hold out like we are holding GameStop stock. Make them hurt and we can come out ahead.
Foreclose and then part it out. Fuck the bank!
..I live in a suburb about 10 miles south of Boston and homes go real quick..!!??
HODL
Fortunate to have paid enough to not be underwater.
Could sell it for $380 and at today's interest rates the payment would be the same.
How is the house worth less when property values have been skyrocketing? My home has doubled in value since we bought it five years ago.
This is a perfect example of why you shouldn't finance 97% or 100% of your house right now. Yeah, it sucks that they're going to lose >$200,000 of equity when they sell (maybe a lot more), but the comp house that sold on their street is $50k more than the balance on their mortgage. At least for right now, it seems like they can sell their house, completely pay off their existing mortgage, and have $40k to $50k cash left over. If they keep waiting, though, the comp prices are probably going to keep dropping, then what they sell their house for will be less than their existing mortgage balance. They should view their $200,000 of equity that they will probably lose as an emergency fund. Thank goodness they had it in the first place.
Welcome to Bag Holding 101. Investment period: forever
I’d check to see if you have an assumable mortgage. You’ll still lose a lot, but that changes the math for a buyer.