Me too
Unfortunately, “investors” are buying up properties as fast as they hit the market. The collapse isn’t for a while.
Using your comment to add: never forget Jeff Bezos is now in the game of buying up single family homes to rent out…Try to push your local government to make this shit illegal.
A people can never revolt if they’re too busy, stressed, uneducated and financially weighed down. Whether you believe in the Four Turnings or not, just imagine if you had enough money to accelerate such events, just for profit, just to strengthen your control…
Eat the rich.
Trying to help my mother in law. Low income, no savings, some debt we’ve tried to help to pay off. Starter homes are over $200k now. 6-7 years ago these are the same houses that were $110-140k. She can’t afford the down payment, hell the bank won’t pre-approve her to even put a bid in. Crazy. And yeah, as others have said, the price won’t go down because any discount will be immediately snatched up, more often by a large investment firm, thus locking the price and not allowing the market to cool.
To provide some context, she wants a very basic home. A small yard primarily to start a garden, maybe 800-1000 sq ft on the high end, and not much more. The only places she and we can find that are in her range are in rough neighborhoods we wouldn’t want her living. And also her work, which is 100% remote, constantly threatens return to office requirements which forces her in a 40 mile vicinity.
As melinneals, we got lucky. Purchased at literally the very beginning of covid (3.20) and have seen our home value skyrocket (+50% from purchase price). Rental homes in the neighborhood regularly charge 90% over our mortgage + property tax + home insurance rate. A house down the street (we got to know them as we both had young puppies) was abandoned because they raised the price +20% in the time the family lived there. It was a mother, both adult children and their spouses, and grandchild, 7 in total, in a 4 bedroom. They left one day and last I saw was an $8k bill taped to the door for 3 months of unpaid rent, they had moved out 4 months prior.
Yeah, I managed to buy at the bottom of the interest rates, but before prices truly skyrocketed.
Because of some other life circumstances, I ended up having to move a few months back and finances just weren’t there to hold onto it.
Having to rent again has been the most mental health destroying financial back step I think I could have ever taken. I pocketed a nice chunk of change, but it’d only be enough for a ~5% down payment in the current town.
Hoping to get back to owning some day, but not hopeful that that day will be soon.
she wants a very basic home. A small yard primarily to start a garden, maybe 800-1000 sq ft on the high end, and not much more.
…and…
And also her work, which is 100% remote,
This one is one hour outside Pittsburgh and 1.5 hours outside of Cleveland. So you’re still close two a couple sizable international airports, theaters, museums with great food scenes. Both cities host large Universities so you’re close to a fairly highly educated population.
If only you had read a bit more to see that her work keeps threatening return to office.
I saw it. Lots of orgs are threatening. Very few have actually acted on it. I wanted that poster to have the info about options.
Your house didn’t increase 50% in four years, that’s the kind of unrealistic investment expectation that makes the housing market unaffordable. That’s not going to get fixed no matter how many houses are built. People ask unreasonable amounts of money for their shitbox (not saying your house is a shitbox) even if it’s on a bad piece of land. I am not sure what’s the solution for this other than teaching people critical thinking skills for objectively evaluating things.
But an “easy” one for a separate but related problem: corporate investors need to be legislated out of owning single family houses.
Except many housing markets have been doing exactly that for the past decades. Also with the period of hyper inflation we went through easily means the house has gained about 30% value purely through being a durable good that holds it’s value with inflation. Another 20% due to the crazy '21-'22 housing market plus general “most houses gain value” housing market is not hard to believe
Hmm, 50% in 4 years? I haven’t seen the data so it’s hard for me to say either say. Maybe you’re right.
Edit: or if you’re going to make claims, then the onus of providing data and facts is on you, I think. OTOH, with crazy trends like NFTs and speculative stocks, I don’t know what to believe.
If you want to make the market crash, you gotta make renting look like a poor investment. Like what if rental units had a high chance of catching fire or something? That would be a shame wouldn’t it.
I wish more people shared the sentiment of just wanting a home and not an investment. I don’t care how much my house goes up or down in speculative value.
Then, rent? It’s actually cheaper to rent a home than buy it these days in most cases. You also don’t need to spend money on upgrades and repairs.
Edit: the downvotes and general backlash against this comment likely all come from folks who don’t own a home and don’t really know the stakes because they haven’t been in a position to consider them. It’s mob mentality. Around me a house is a $10k/monthly payment, renting is $5k. Renting is a no brainer, especially considering that you don’t need to make repairs. The $10k/month is the minimum you’ll pay. Need a new HVAC? 20k. Need a new roof? 40k. Need to remodel an outdated part of the house? 10-60k. Garage door spring broke? $350. Plumber fixed a leak? $500. Need an exterminator to kill some rodents? $150. Tree removal to take down a dangerous tree? $3k. These are all costs that you’ll eventually need to pay as an owner. Given this and the fact that being a landlord involves taking a financial risk on a tenant, buying should be cheaper than renting. If you think of being a landlord like running a business, you’ll quickly realize that no business would operate at a loss willingly for long. Well, when renting is cheaper than buying, that’s essentially what is happening. The market is such that buyers are paying a premium for an asset they can’t get much of a return on, so you’re better off renting. This was actually one of the indicators that predictors of the 2008 housing crash looked at. But, go ahead, tell me I’m an idiot. Follow the mob. Recite platitudes. Don’t think critically or evaluate the nuance in things, it’s your money, not mine.
It’s rarely cheaper to rent when you factor in that you’ll never own the asset.
No. I want the freedom of changing my house to my exact liking and renting doesn’t allow for that. Furthermore if I’m renting, then I’m paying for someone else’s speculative property.
Prices around me are insane. It’s twice the monthly payment to buy than to rent. And, that’s before spending on repairs and upgrades. This means most people are not buying to speculate because there is very little upside and no way to cover the monthly costs by finding a renter.
This is moronic advice.
I’d rather own my home and not worry about some asswipe jacking up rent.
If you rent every cent that goes towards rent is paying someone else’s mortgage and you’ll never see that money again.
If my home value goes down I still have equity. I can sell and regain at least some of that money instead of flushing all of it down the toilet.
Rent is skyrocketing right now. My mortgage is still the same. If I were renting I’d be much worse off.
You’re making several assumptions in your comment.
-
Like a landlord can raise rent infinitely at will. This is not true. Renting is a market. It’s why renting is cheaper than buying right now. Don’t you think the people buying right now with high prices and high interest rates would like to know they can rent their property for the same price as their monthly costs? Yes. Then why don’t they? Because the rental market is a market. They might try to charge a tenant the $5k/month they’re paying for their mortgage + tax + insurance, but if the going rate is $2.5k, there is no way they can raise rent to that level. Also, depending on where you live, your monthly payment can be very much dependent on property taxes. It may not be the landlord raising your monthly payment, instead it will be the local government. All that increase in equity on your home just becomes extra money every year that you’ll shell out to the city or county.
-
If you rent, you’re basically paying to live in a house as a service. You have almost zero risk. Your monthly payment is locked in for 12 months. If anything needs repair, you aren’t on the hook. How awesome! That $40k roof replacement? Not your problem. Random $1k furnace repair? $500 plumbing bill? $350 garage door spring replacement? $1500 termite tenting bill? $100 rodent extermination bill. None of your problems! Renting is fixed cost, low stress, and pretty much risk free. If you’re an owner, all those bills are your problem and it’s also money that you aren’t going to see again. All properties will eventually have these costs.
If your home value goes down, I still have equity. I can sell and regain at least some of that money…
Not necessarily. The moment you buy a property you are underwater on selling fees. Even if you turned around and immediately resold the property for the same price you bought it for, you’re going to lose 5-8% on selling costs. Also, home values don’t always go up all the time. You might have to wait years before you can sell the property for more than a loss. This means you really can’t leave or get out of the property unless you’re willing to take a loss. If you’re a renter, you can pack up as soon as your lease ends and wash your hands of the place.
Also, remember your monthly payment includes taxes and interest. That’s money you won’t get back. Depending on your rate, you’ll likely pay 2-3x the value of your house in interest over a 30 year mortgage. That means even if you sell the property for 2-3x what you bought it for, you’re just breaking even. That doesn’t include the annual tax you’re paying the city or county, or repairs and maintenance.
So, when renting is half the price of buying (which it is around me), you’re better off renting. Buying should be cheaper than renting given all the risks and extra costs I cited above. In a normal market, that would be the case. When it’s not that way, be suspicious.
