Market decline within 2 years and a credit crunch crashing prices and only allowing for big credit or cash buyers?
Real estate thread
- Thread starter Roosh
- Start date
It's both. A large percentage of urban office workers are liberals and they're expecting to be mainly teleworking from now on, so they're looking for a more pleasant, comfortable house to do it from. Also, many of them are terrified of the virus, so they want to move to an area that is less densely populated. They would never admit it, but the rise in crime, chaos, and taxes in Democratic-run cities is also a factor.
Yes, I believe that liberals will eventually return to their gentrified neighborhoods in city centers, unless they can create those kinds of neighborhoods in the suburbs. The restaurant/bar/lounge/arts lifestyle is really important for these liberal types, especially the gay ones. They say they want to be surrounded by "diversity," but really what they mean is they want an active social, hedonistic life among other like-minded liberals. If the lawlessness and virus restrictions in liberal cities continue, then I would expect liberals to start creating Portlandias (probably in the style of hipsterish town center living and shopping areas) in the suburbs. If that occurs, then urban city centers will become ghost towns.
Let´s say I have had more opportunities to "settle" with a girl coming from wealthier family. And I am not saying I wouldn´t accept such girl only as a protest or demonstration of my manliness. On the other hand, I can´t build relationship on that and choose my life partner based on how wealthy her family is. That´s what I wanted to say.
I live in different real estate market than US, but if some big crash is going to happen, it will certainly influence all the markets world wide, as recently. But I read some prognosis from people in market and it mostly says, that there might be price stagnation or some decrease in prices in near future (next few years), but not very dramatic (let´s say 10%) and it will hit mainly older apartments in communistic tower-blocks and less attractive areas. While prices of houses and land shouldn´t be dramatically touched. And I pretty much agree with this and stick with this prognosis.
And even though, there might be some more serious crash (as some guys in this thread mentioned), buying a property isn´t short-term thing (or investment if you want), unless you are flipping houses for profit. That means, if you buy a house/flat and just next year, there will be some serious downturn, 20 year later, when you pay off your mortgage, it won´t be relevant, because the value will be probably much higher. It has been like that and always will be (unless some certain location turns into ghost town or gang slum).
As I mentioned in my previous post, situation on real estate market in my country is totally ridiculous. Definitely some cool down is necessary. Prices were constantly wildly rising up for years and last year, government lowered down law requirements for getting mortgage. The main advantage of this move was probably lowering necessary downpayment from 20% to 10% and also cancelling 4% tax for "starting to own a property". This was actually big move, because even 10% of price of some cheaper property (smaller flat) equals more (might be much more) than year netto sallary and it´s pretty difficult to save such money for young person with current cost of living. And to save twice as much (20%) is almost impossible.
This move, together with cheap mortgages stimulated buyer side even more and demand is really huge.
I don´t know what was situation in US before crash, but I can say, that bar for getting a mortgage here is still pretty high for many people and they are not giving it to anybody. Banks are actually quite selective and that support stability of the system.
So I am between those, who used this opportunity, even though I have to move to not very attractive location in smaller city, because I can´t simply afford anything else. I am really surprised, that I got lucky to be the one being sold that flat, because there were dozens of people interested in buying it. I have been looking around for longer period and talked to more real estate agents, so I knew once I decide for something, I have to be really agressive and go for it. Also I am lucky that I ran into fair real estate agent, who kept his word.
I´am pretty much sure, that after 5 years of interest fixation expires, it will go up. But still I have made a financial decision, which is not going to totally ruin me of money and there´s still some space in my financial options for paying more.
I don´t have time to wait for some potential crash, that might happen, but doesn´t have to. I am getting near to be 30 years old and banks won´t give me 30 years mortgage, when I will be 40 years old. And the predictions say, that even though I might wait for some little downturn, I will pay more on interest rate anyway. Situation for me isn´t ideal (generally it sucks pretty much for my generation), but I couldn´t do this move 5 years ago and wait another 5 years might steal my chance to ever own anything, because the entry bar of ownership might be much higher. So I´m taking my chance and also a risk.
I believe, that people owning real estate (whether they´re living in it or just investing) will never have the reason to sell, unless they get into existential crisis (which is less likely to happen in large scale, because system is very stable) or they use the cash to buy another real estate property. Imagine situation years before, there wasn´t such demand and people didn´t realize it´s importance in context of what´s happening in the world. Also they weren´t so financially aware, didn´t know much about investments and didn´t live in challenges of today.
Today, everybody has internet to be well informed, there´s endless stream of information on this topic and everywhere (social media) you are convinced that RE is best investment (it is). And everybody sees, that dollar is dead and stocks and metals are manipulated.
And I will say once more - lifestyle of people is changing and more and more people are living alone or in smaller groups (smaller families), so there´s need for much more apartments, than ever before.
Maybe there was some possibility to invest on your savings acount in bank before (I don´t know, lets say at least 5%?), but nowadays it doesn´t even cover inflation (which will be bigger and bigger in my opinion in the future). So what´s left today?
Stocks - that are nearing it´s peak for long time and the industry you are investing in can literally end from the day to day.
Crypto - it can provide you with nice gains, but it´s risky and once you save ammount of money, you don´t want to invest all in crypto. And also the most of the people simple won´t invest in it, at least in near future.
Real estate - from long-term view, it´s only gaining value. And most importantly, it provides actual value and it´s important for every person on this planet. 50 years in the future, there might be no stock market, but definitely people will need a roof over their head. It isn´t influenced by political system and unless half of the human kind will be wiped out, there will be demand for that.
One can just travel to wast rural landscapes of North-Western California to see it, former city liberals had taken over the entire region long time ago(and it had been weed-growing region for a long time). If you go to many other rural areas in California, Nevada, Arizona, New Mexico, Colorado, Washington, Vermont and other New England places you can these formerly very conservative areas having tons of liberals, masks on everyone, certain types of establishements they like in towns, etc. Just the expansion of gentrification to outside of the cities/suburbs. I would not expect them to just easily go back once they had ventured out of their cities.
Even if they move back to the city because their employer cuts off remote working, they can keep that house as a 2nd home, airbnb or rent it out long term. There's real shortage of housing in the States, and it's very severe in some of those rural locations, where it's hardly possible to rent anything at all, plus airbnbs are springing up, so they can always just turn it into a rental. To reverse the trend, it'd take major economic downturn with money not being printed to really reverse this, I think.
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Any recommendations as to ETFs on agricultural land / farmland to hedge against coming inflation? Can't afford to buy a farm property directly so I guess ETFs are my next best option - was looking into the iShares COW ETF (agricultural) but was wondering if there are any others out there to consider?
Honestly not sure. I've never bought one.
Biden’s Infrastructure Plan Seeks to Ease Housing Shortage With Looser Zoning Rules
The proposed program of at least $5 billion would offer grants to cities and towns that relax restrictions on new construction.
www.wsj.com
Obama 2.0 housing policies will influence housing dynamics, picking winners/losers and strong arming communities to cede their authority on housing to the Federal Government
As one of the WSJ commenters states, the WSJ basically just packages up White House press releases into an article.
Marc Zandi, a 'subject matter expert' for the far left pretending to be a neutral economist, disguises his paper with reasonable data analysis but then jumps right into recommending communist wealth redistribution tactics without any evidence to back up the efficacy of these policies or the side effects that would occur.
From Zandi and Parrott (former Obama housing advisor),
"Policymakers can do this by conditioning some of the considerable federal aid they provide to local governments on a commitment to make their communities more hospitable to the construction of affordable housing."
"Another candidate is transportation funding. One of the costs of local decisions that limit affordable housing is that it forces those of modest means to commute longer distances, putting a strain on roads and highways; it makes sense to reward those communities with policies that make it easier for people to live near where they work."
"Policymakers could provide additional incentives by offering competitive local housing innovation grants to state and local governments that make their land-use policies friendly for building affordable housing."
"In particular, policymakers should send more funds to the Housing Trust Fund and the Capital Magnet Fund, which provide grants to preserve and produce affordable housing for low- and very low-income households,10 and expand the Low-Income Housing Tax Credit, section 142 tax-exempt bonds for the development of rental housing, and the New Market Tax Credit, each of which has proven effective in promoting development in underserved communities."
"Developing an effective education pipeline into the trades will take time, so over the near term the Department of Labor should scale up the number of H-2B visas available to foreign workers who commit to working in these sectors."
"Most pressing is settling the ongoing trade dispute with Canada over softwood lumber. This dispute has persisted for decades, leading to a significant underinvestment in capacity by Canadian producers. If the U.S. were to signal a clear and lasting end to the tariffs and the trade dispute, investment would increase quickly, capacity would soon follow, and prices would eventually moderate. An easing in the trade tensions with China would also help ease the cost of other critical building materials."
Claim: all those cash buyers are really banks.
feedproxy.google.com
I have been wondering how so many people seem to have hundreds of thousands of dollars on hand.
Vox Popoli: Mailvox: why you can't buy houses
If you think real estate prices can´t grow up forever, here is a curiosity from abroad.
At this moment I live in village just next to major city of this area, it´s only few kilometers from official border of the city.
There are some new houses for sale. Nothing special, only ground floor, 3 bedrooms and tiny garden.
The price is $600 thousands. In a country, where average salary is $12-15 thousands per year . That means that person earning average salary would have to work 50 years to get this house without spending single dollar.
Ridiculous.
At this moment I live in village just next to major city of this area, it´s only few kilometers from official border of the city.
There are some new houses for sale. Nothing special, only ground floor, 3 bedrooms and tiny garden.
The price is $600 thousands. In a country, where average salary is $12-15 thousands per year . That means that person earning average salary would have to work 50 years to get this house without spending single dollar.
Ridiculous.
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There're lots of people with cash on hand in the US right now. If a rural house is listed for 150K (which is fairly typical price for West Virginia) it's literally nothing for many from big cities looking to get a rural property. A lot of people get paid 200-400K a year, but 150K cash is managed by much lower earners, especially on dual income.
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It's a tough situation. You could see if your parents will cosign the mortgage and back you up on the house. In many cases the older generation has alot of equity and really needs to help the younger generation to stay in the real estate market.
I really don't know what to suggest with respect to price and where it is going. Sticking with the parents and living cheap might be your only option, Patience is a virtue but it seems those who take on huge loans irresponsibly are winning.
Remember MORTgage comes from France, where people would die carrying the loan. MORT
westernman
Robin
I think the implementation of UBI unemployment gives cover for this housing buy up
If you were 25 and had... 50,000 cash, right now, What would you do with it?
If you were 25 and had... 50,000 cash, right now, What would you do with it?
I'd buy a monster box of 500 - 1oz silver coins. That'd be litter over 15K USD. See you on the silver squeeze thread.
Monster Box
The rest you could put into crypto, hard assets, things that you could use to earn money, and keep some FIAT in case you're in a pinch.
Canadian Housing has "Hottest Month Ever"
This goes with my friends prediction about a month ago, that supply would come on with prices this high. Still no abatement in the price, must be all the Trudeau bucks and diversity loans.
National Post - Hottest Month Ever
This goes with my friends prediction about a month ago, that supply would come on with prices this high. Still no abatement in the price, must be all the Trudeau bucks and diversity loans.
National Post - Hottest Month Ever
The "cash buyers" are a combination of a few things:
-Real estate investing corporations straight up paying cash with the intention of turning the house into a rental
-Individual buyers pre-approved for a mortgage up to X amount which effectively puts them on close to equal footing with actual cash buyers (since the seller isn't risking that their financing will fall through on the strength of the buyer's credit alone, although there is still risk it will after appraisal)
-People selling their $1m house in NY, CA, etc and offering to pay cash for a $350k house elsewhere (if they're smart they'll then immediately refinance to get most of their cash back at low interest rates)
-Real estate investing corporations straight up paying cash with the intention of turning the house into a rental
-Individual buyers pre-approved for a mortgage up to X amount which effectively puts them on close to equal footing with actual cash buyers (since the seller isn't risking that their financing will fall through on the strength of the buyer's credit alone, although there is still risk it will after appraisal)
-People selling their $1m house in NY, CA, etc and offering to pay cash for a $350k house elsewhere (if they're smart they'll then immediately refinance to get most of their cash back at low interest rates)
There's also a lot of people with just plain liquid cash right now and without 1M house in big cities, including people who've been renting in these metros or living with parents while holding high-paying jobs.
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Yeah, true. Not so much the renters (that eats up just as much of your paycheck as a mortgage if not more) but people living with their parents for years after college for sure.
If you make around 150K in a big city, which is pretty ordinary professional salary now (100K is like minimum wage in those, in SF Bay area 120K is considered minimum wage making one eligible for rental assistance since years ago), and you pay, say, 40% in taxes, you are still left with tons of money on hand to save. A lot of professionals are renting rooms in cities further reducing expenses. Buying 150K cash rural house in WV, Midwest or South to work from home as they're able to now is no big deal for such person. You mentioned 350K - it's really "luxury" or city homes that sell for this in many of these states, rural homes with some land cost around 150K-200K (homes in small towns can cost a lot less). If that big metro renter was sitting on 150-200K saved downpayment for jumbo mortgage (jumbo mortgages are around 20%, I believe), they might have just bought rural cash house instead last year.
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Thank you for the Kitco Canadian mint 1oz monster-box link .. Silver melt value $25oz and reputable local dealers I was buying US 1oz silver eagles about 100 plus and about 20 lbs of pre 1964 ms63 to ms65 silver coins at about $16 to $20oz silver weight per oz makes me look prescient now as 1oz US Silver Eagles selling for a whopping $42 each yes a $10 distributor commission plus $7 dealer commission per coin... Supposedly due to U.S. Mint shutting down all but one production line due to NY State covid-protocols. Looks like an opposite supply issue with Kitco Canadian Mint 1oz silver maple leaf coins... I have a few Canadian .999 pure 1$ maple leaf and a few 1oz .9999 pure $5 Canadian coins... Assume the monster box is .999 pure 1oz maple leafs... Now to monetize my collection with ETH based NFTs adding a few CAD maple leaf monster boxes to the mix.
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