House prices up 40% in one year (effective)

[Rickeroo]

If we go just by median sales price, prices are up 4% (actually down 2% if you factor in inflation). However, for the masses that borrow money:

Last year: $411k median price, 3% interest 30 yr mortgage, $1733 a month

Now: $428k median price, 5.5% interest 30 yr mortgage, $2430 a month

People who would have budgeted for a house for $411k last year would need to look at a $305k house today for the equivalent monthly payment.

 

[Crovax]

If we go just by median sales price, prices are up 4% (actually down 2% if you factor in inflation). However, for the masses that borrow money:

Last year: $411k median price, 3% interest 30 yr mortgage, $1733 a month

Now: $428k median price, 5.5% interest 30 yr mortgage, $2430 a month

People who would have budgeted for a house for $411k last year would need to look at a $305k house today for the equivalent monthly payment.

Not only is it hard to find a house for $305k but you would need an income of $83k to afford that mortgage. The median salary is $44k.

This is why the house market is due for a crash.

 

[jnug]

Not only is it hard to find a house for $305k but you would need an income of $83k to afford that mortgage. The median salary is $44k.

This is why the house market is due for a crash.

YUP...won't be the first time...won't be the last

 

[aociswundumho]

If we go just by median sales price, prices are up 4% (actually down 2% if you factor in inflation). However, for the masses that borrow money:

Last year: $411k median price, 3% interest 30 yr mortgage, $1733 a month

Now: $428k median price, 5.5% interest 30 yr mortgage, $2430 a month

People who would have budgeted for a house for $411k last year would need to look at a $305k house today for the equivalent monthly payment.

On top of all that, property taxes will also be increasing big time, thus increasing the monthly payment even more.

 

[Hypothetical]

Not only is it hard to find a house for $305k but you would need an income of $83k to afford that mortgage. The median salary is $44k.

This is why the house market is due for a crash.

yeah I am waiting till this happens to look for a new house.

 

[aociswundumho]

YUP...won't be the first time...won't be the last

I'm old enough to have lived through several boom/busts, and this one is not like the others. In the mid-2000s, loans were being handed out like candy, but today loans are not easy to get. The other is inventory, which is still extremely low. That has not been the case in other US real estate booms.

 

[Nomad4Ever]

I'm old enough to have lived through several boom/busts, and this one is not like the others. In the mid-2000s, loans were being handed out like candy, but today loans are not easy to get. The other is inventory, which is still extremely low. That has not been the case in other US real estate booms.

Doesn't help that investors are buying up like 10-30% of the housing inventory in some places.

 

[Crovax]

I'm old enough to have lived through several boom/busts, and this one is not like the others. In the mid-2000s, loans were being handed out like candy, but today loans are not easy to get. The other is inventory, which is still extremely low. That has not been the case in other US real estate booms.

Do you think that means it will be worse than previous busts?

 

[itstony]

Until supply catches up there won't be a crash, just an adjustment. I've made $500K on a house I bought in 2019 for $503, that's insane and not sustainable.

 

[aociswundumho]

Doesn't help that investors are buying up like 10-30% of the housing inventory in some places.

That only happens because the housing supply is being artificially restricted by state and local governments. This creates an opportunity to make money. If the government restricted new car and truck production the way it restricts new housing production, the price for used vehicles would skyrocket, and it would become profitable to buy used cars and trucks as an investment.

Do you think that means it will be worse than previous busts?

I have no idea. I don't even know if it will bust. Toronto's housing market has be going up for over 20 years, and it still hasn't busted.

 

[HIP56948]

On top of all that, property taxes will also be increasing big time, thus increasing the monthly payment even more.

Excellent point!

 

[Superfly]

Not only is it hard to find a house for $305k but you would need an income of $83k to afford that mortgage. The median salary is $44k.

This is why the house market is due for a crash.

It's why I'm trying to unload my house as quickly as I can. Then I'm gonna sit on the money and wait on the crash before I buy another one.

 

[HIP56948]

Here in Florida, Hedge managers and such have been buying houses like a proverbial drunkin' sailor.
My wife pointed out that on quite a few home sales, they buy up on "Lines"..like 1733, 1735, 1737, 1741, 1745 Palmer street.. (All in a line)
Of course, they put a little money in those homes and then raise the prices much higher.

 

[The Old Soul]

It's why I'm trying to unload my house as quickly as I can. Then I'm gonna sit on the money and wait on the crash before I buy another one.

Just did the same thing with my one and only rental property; even though the market looks good for at least one more year, it was the rent that threw up the red flag. Charge (overcharge) for rent, and it puts the renter on the offensive. The last renters were told 18 months prior to the lease expiring that they would be leaving because the house badly needed a major renovation that would take months (which it did), and they became squatters because they couldn't find another rental they could afford.

Suddenly I went from being a good landlord to a slum lord in their eyes, and not only did they refuse to move after the lease expired, but quit paying rent altogether. They left the place a mess, including an entire garage stall full of trash and moving debris. I do plan on buying another rental property in the future, but only if and when prices come back down to values the average person can afford.

Prices are not just a bump in the housing road, but the end of the road for too many people.

 

[Superfly]

Just did the same thing with my one and only rental property; even though the market looks good for at least one more year, it was the rent that threw up the red flag. Charge (overcharge) for rent, and it puts the renter on the offensive. The last renters were told 18 months prior to the lease expiring that they would be leaving because the house badly needed a major renovation that would take months (which it did), and they became squatters because they couldn't find another rental they could afford.

Suddenly I went from being a good landlord to a slum lord in their eyes, and not only did they refuse to move after the lease expired, but quit paying rent altogether. They left the place a mess, including an entire garage stall full of trash and moving debris. I do plan on buying another rental property in the future, but only if and when prices come back down to values the average person can afford.

Prices are not just a bump in the housing road, but the end of the road for too many people.

I had that problem with my tenants too, but unfortunately they were my angry children that moved when I told them I was selling the house so I could buy another one in my new town, and stop paying a fortune for rent.

I'm sorry that happened to you. It's frustrating - especially when you're a good landlord. People will turn on you on a dime.

 

[Crovax]

I have no idea. I don't even know if it will bust. Toronto's housing market has be going up for over 20 years, and it still hasn't busted.

Well housing going up doesn't matter if incomes reasonably go up with it and we are talking about an entire country. Sure people can move around to get a small leverage on the price but for all intents and purposes you can't really move away from the price increases like you could if they are mainly happening in one city.

 

[HangLow]

​

 

[Razoo]

If we go just by median sales price, prices are up 4% (actually down 2% if you factor in inflation). However, for the masses that borrow money:

Last year: $411k median price, 3% interest 30 yr mortgage, $1733 a month

Now: $428k median price, 5.5% interest 30 yr mortgage, $2430 a month

People who would have budgeted for a house for $411k last year would need to look at a $305k house today for the equivalent monthly payment.

And to think mortgage lenders are financing this inflation knowing full well that when the bottoms falls out homes will not bring enough to cover the mortgage = exactly like the two previous GOP home loan scams.

NO MORE BAILOUTS

 

[Lord Tammerlain]

That only happens because the housing supply is being artificially restricted by state and local governments. This creates an opportunity to make money. If the government restricted new car and truck production the way it restricts new housing production, the price for used vehicles would skyrocket, and it would become profitable to buy used cars and trucks as an investment.



I have no idea. I don't even know if it will bust. Toronto's housing market has be going up for over 20 years, and it still hasn't busted.

Toronto's will if interest rates go up quite a bit higher. Mortgages in Canada are different than the US they are typically 5 or fewer years before they get renegotiated with new rates. A $1 million dollar mortgage on a family home at 5% would see the interest alone per year amount to $50 000

 

[Superfly]

And to think mortgage lenders are financing this inflation knowing full well that when the bottoms falls out homes will not bring enough to cover the mortgage = exactly like the two previous GOP home loan scams.

NO MORE BAILOUTS

It’s gonna get ugly. Really ugly. People are panic-buying houses they can’t afford, just to have a house.

 

[Outlook]

If we go just by median sales price, prices are up 4% (actually down 2% if you factor in inflation). However, for the masses that borrow money:

Last year: $411k median price, 3% interest 30 yr mortgage, $1733 a month

Now: $428k median price, 5.5% interest 30 yr mortgage, $2430 a month

People who would have budgeted for a house for $411k last year would need to look at a $305k house today for the equivalent monthly payment.

It is not the time to buy a house unless you have cash and want to overpay.

 

[Lord Tammerlain]

It is not the time to buy a house unless you have cash and want to overpay.

Now is the time to sell and rent. The only issue is where to put the money as inflation will destroy the value and the stock market is overvalued

 

[Outlook]

Now is the time to sell and rent. The only issue is where to put the money as inflation will destroy the value and the stock market is overvalued

No No No. If you own a house, don't sell, stay in your house. Rent is going through the roof.

 

[Lord Tammerlain]

No No No. If you own a house, don't sell, stay in your house. Rent is going through the roof.

Sell, live cheap for a couple of years buy cheap after the market corrects

 

[Outlook]

Sell, live cheap for a couple of years buy cheap after the market corrects

No, No, No.
My 30 year note on a home purchased two years ago is $1,500 a month for 3 bathroom place. I would have to pay $1,700 plus a month to rent and most of those places are only two bedrooms. Some of these corporations like Black Rock are buying up homes causing rents to sky rocket.
Stay in your home.