I know I’m supposed to want it to keep going up as a wealth generator or whatever.
But like… I wouldn’t be able to afford the monthly payments if I bought my house right now and it’s scary. Also none of my friends are buying homes, none of them are even renting full places. Just like renting rooms.
So what are your feelings home owners of lemmy?
I hate that we lost sight of what wealth really is and replaced it with the idea of profit. I bought my house to provide myself with financial security, not profit.
My monthly “rent” (mortgage payment) is locked in for the next 25 years and will not go up. At the end of those 25 years when I’m ready to retire, I’ll have housing with only taxes and insurance payments. THAT is wealth. THAT is what home ownership is meant to be. If housing prices fall, it won’t change my life a bit.
Man I wish we could get 25 year fixed rate terms in NZ. Longest anyone would quote me is 5.
That’s why I bought a house instead of renting. One day it will be paid off, and from that on, as long as I keep paying the property tax nobody can kick me out. They can cut my water and electrcity, but the house and the plot remains mine.
Let it crash!
Big housing prices only benefit the people owning multiple homes.
Because it doesn’t matter what the housing cost is if you sell your only home, because you will need to buy a new home at the same cost anyway. Since everyone need a house to live.
Your house isn’t increasing in value, the buying power of your currency is falling.
And that explains increased cost for imported houses. But what about those that are build locally by local craftsmen?
Bought my house in 2019, and it’s apparently worth 30% more than what I paid for it if my rates bill (local property taxes for the US people) is anything to go by.
Problem is, it’s all paper gains. The only way I see any of that money is by selling my house - which I kinda need in order to live in - and buying something else that has also gone up by 30%, so I’m net-even, less increased property taxes which I directly benefit from via improved infrastructure.
Now if I was a blood sucking parasite and bought a second house as a rental property by using my increased capital to muscle out first home buyers with less capital, then the gains might be enough to allow me to sleep at night under the weight of my own crushing dread at the person I had become. Maybe.
Homes should not be considered investments.
Your home rising in value doesn’t benefit you, because you still need to live in one if you sold it, and that home has likely also risen in value. Your house doesn’t grow when its value does. It doesn’t sprout an extra bedroom.
If you own multiple homes, then you can view all but one of them as an investment, as you can sell them when the market is good.
If you own one house and have a mortgage on it, then the market going down is bad because you end up with negative equity.
If you own one house with no mortgage, then the market going up is bad because it’s harder to upgrade. I wouldn’t mind my house being only worth £10,000 if it meant that I could buy my dream house for £20,000.
You’re not supposed to own a second one… otherwise you will be literally the devil !!! /s
I bought this year in the US w/ my partner. Thanks to my credit union, got a rate about 1% lower than average at the time. Mortgage payment is significantly less than rent and most importantly: it’s going to be way, way, WAY less than rent in 10-15 years. Sure, we’ll have other associated home ownership costs, etc etc, but it’s worth it to us. Also, honestly, we LOVE this house. Took our time to find the right place and it has paid off, much happier here than any of the places we rented.
We need a housing market crash. My pocket book be damned. We’ll figure it out. The next generation won’t.
Houses are not wealth generating. They are a long term investment. So long that the value of the dollar declines so much that it makes you think that your wealth has increased. At best, buying a house is a hedge against inflation.
Buy a house when you feel like its a good decision for you and your family. Until that day just save your money and stack sats.
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A house is a home for many. For others, a house is an investment. Betting on the value of your house to increase is the same as betting on the devaluation of the dollar. A house holds its value but doesnt increase. A house degrades and cost money to keep in good, usable shape. The reason you can sell a house for more than you paid for it is the value of the dollar.
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If the market crashes hard enough these huge corporations that have been sucking up all the single family homes will probably start unloading them at lower and lower prices to pay their creditors. It could be good for people who want to buy. Couple that with the coming crash of corporate office space and it could be quite an interesting time.
The real truck is going to be coming up with legal/constitutional bans on corporate ownership of single family houses.
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You point out the Catch-22 that a lot of people miss on this stuff. They get so fixated on increasing their property values because they want to screw someone over when they finally sell their house…not stopping to think that the same thing is about to happen to them when they go to buy one. Not to mention, higher property values means higher property taxes (in some places, anyway).
Yeah like it’s cool my 200k town home I bought 4 years ago is now selling for 400k (neighbor just sold for that much).
Except that means that the 350k home I was thinking might be a nice upgrade one day, is 700k.
Like I’m way more screwed over now unless I intend to like sell my home then move to the middle of nowhere. All that higher value means is property taxes like you said. But of course renters are the most screwed.
This is precisely why your home price won’t crash. You are locked in and so is everyone else. You literally can’t do better, so selling is a bad move.
I just sold my condo and went back to renting. Best choice ever. Feels great to be free.
If it makes you feel good, I’d say congrats. I’ve never owned a condo and it has different considerations than a home. I sold my first house in March 2021 after I bought our current house in 2020. Both felt like some of the smartest, best times moves. I actually do wish I would have bought a more expensive house in 2020, but we’re likely buying more land in the next 2-5 years. Not holding some kind of property right now (again, idk about condos), feels like leaving stupid money on the table.
US person here
I was lucky to be in a position to buy shortly after the 2008 crash, so another crash would erase a good chunk of equity (but I see most of it as fantasy equity anyway) but otherwise I’ll be fine. I was in DevOps/SysOps for a real estate tech company at that time (and until recently) so I got to see the weird market moves in real time.
Nationwide we’ve already seen about a 4% drop from the end of the 2022 sales season (Memorial Day - Labor Day) to the end of the 2023 season. That decrease is actually as bad the height of the 2008 crisis but the drops were most felt in the most overpriced markets. This allowed the rest of the nation buffer against it so it’s not having a big effect on main economy metrics (like the consumer confidence index).
Basically the bubble deflated considerably without popping, which is overall a guard against a (really bad) crash. Of course 1/3rd of China’s economy is their housing market and it’s on the verge of collapse… I don’t know what that will do to the US but it won’t be good.
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The cascade of failures is a few steps further along. We had a total of about a 12% market decline in 2008 before enough dept bundles turned toxic for Bear Stearns and ANB to become insolvent. Those potential chickens are still in their eggs.
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I don’t know why you think that’s going to happen. Supply is down and demand is as strong as ever. Policy to make housing more plentiful is woefully lacking.
What’s the mechanism for a housing crash?
Legislation could also force a lot of homes on the market.
Houses and condos should only be available to be owned by individuals. Ban corporate / hedge fund ownership of everything except high density apartments (that aren’t individually owned).
Ban / cap short term rentals.
Add a tax penalty for individuals after X properties. Ex: if you own more than 3 residential properties, you pay extra taxes.
All of these encourage houses to be occupant owned, while still enabling small scale landlords, because we need both.
I personally would love a crash. I sold my small condo last year in an attempt to upgrade to a house due to getting married and needing more room. I was hoping to time the market, but houses are still out of reach for two middle aged professionals with strong careers, if we ever want to retire.
Edit - to illustrate the problem. In San Diego, where I live, depending on the source, the median home is about $1m.
If you take the estimated monthly cost of leading real estate cites, that’s around $7200/mo.
The median household income in San Diego is $83500.
Do the math.
Legislation could also force a lot of homes on the market.
Gonna stop you right there because the rest of your response is fantasy, if legislation can’t be passed.
Whose gonna propose those bills? Who is going to vote on them? Where are they going to pass? Give me reasonable answers to those questions and we can proceed.
I bought in Honolulu in 2020 after owning in Oregon for 6 years. The average sale price is 1.5 million, median is 1.1 million, and the houses are straight up rotten garbage (I grew up in North County San Diego in a construction family, SD has much higher build quality).
There are basically no homes for sale in Honolulu county right now. Just scanned the numbers this AM. Tear downs are going for 600-800k.
A crash wouldnt bother me, but its basically unbelievable to me. Ultimately all that money printed is going to find its way into inflated durable goods, and (ding ding ding) residential property.
Sorry to let you know this brother (or sister or non-gender conforming individual), but selling that condo might have been a fatal mistake. Its not clear to me based on macro economic and ongoing political conditions that housing prices will ever materially go down. Honolulu has a ban and cap on short term rentals. Didn’t do shit. We’ve got more homeless than ever and rents have gone up 30% since. Add onto that losses of structures due to climate related disasters. California had the Tubbs fire (1k homes?) and then the Paradise fire (11k homes). We just had the Lahaina fire. Those homes aren’t getting rebuilt into affordable housing, I promise.
I’ve done the math. There is no reasonable scenario I can see where housing prices go down substantially over the next 20 years. We’re going to be supply side constrained with ever increasing demand. This is a hold/ buy and hold time.
I don’t want either a crash or stability. I just want a nice house.
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You are probably in a different tax bracket than us.
The median house hold income is 60kish in the US. Meaning half of all households make less than that.
2k for rent or 3k mortgages just isn’t doable. But that is the only thing availabe for most of us. The math can’t work with taxes, insurance, and utilities. Children right now is a poverty sentence for 50% of Americans.
And “make more money” can’t work for everyone. The median is 60k per household, meaning 10s of millions of people would need to find much higher paying jobs to be able to deal with this. But that’s not possible, there are not 10s of millions of 80k+ jobs just sitting around.
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When people can’t even afford 2K rent, there are no games to play. Median house hold income is 60k After taxes that’s closer to 40k. When rent alone is 24K, there are no games to play, no moves to be made. The math doesn’t work. 2K isn’t me over exaggerating, it’s median.
Then you’re supposed to put 6% into your 401k, then how ever how much for medical insurance , then cost for car insurance ,gas… where is money for food? Where is the 20% for investing for retirement? The basic of budget is 50,30,20. You’re not supposed to spend more than 50% of your income on “needs”, yet the median rent is more than 50% of the median after tax household income.
All those tricks are just putting the debt ahead into the future. That only works if you think you’ll be making more in the future, but wages have been super stagnant.
You can’t play games when rent requires more than half your income.
I own my home, life is fine, I’m fine. But try to do the math, try to make it work. For 60k gross pay and 24k yearly rent, explain how to make it work, how to save up the 10% down for a house and save for retirement.
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Cost of living, rent, and taxes are all lower in Australia than US on average. Also median income is higher in Australia.
And where did you live? Did you have room mate or live with family?
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And what was your rent?
