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Posted: 12/16/2021 11:05:02 PM EDT
[#1]
That's how I rationalized it. Low interest rates and inevitable inflation.
So a $310k compound with 2 rental units paying the note is $2k a month at 2.8% Versus my $150k condo paying $970 a month at 3.87% I now have to deal with tenants, but that's the price of eliminating housing costs. |
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Posted: 12/16/2021 11:07:16 PM EDT
[#2]
It takes a special kind of bad decision making to buy in at the top of the market. Just sayin. Interest rates will climb but prices will collapse soon. All bubbles burst.
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Posted: 12/16/2021 11:08:21 PM EDT
[#3]
Quote HistoryQuoted: It takes a special kind of bad decision making to buy in at the top of the market. Just sayin. Interest rates will climb but prices will collapse soon. All bubbles burst. |
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Posted: 12/16/2021 11:21:49 PM EDT
[#4]
Maybe another way to think about is 1.2 million house today at 3% or 800,000 home at 4% or 5% or 6% in a few months, which would you go for?
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Posted: 12/16/2021 11:24:36 PM EDT
[#5]
Quote HistoryQuoted: Why would home prices drop? Quote HistoryQuoted: Why would home prices drop? Monthly payments determine affordability based on income. This is basic economics. Monthly payments are comprised of loan balance and interest rate that is inversely proportional. If interest rates go up, housing prices go down and payment is roughly the same. If rates go down, housing prices go up and payment is roughly the same. all other factors being equal. Inflation will drive prices up as well, a factor not being equal, but present always. Longer mortgage lengths is also something that could creep in to keep prices high, 40/50+ year terms like in Japan. If prices climb and wages stagnate, there are less that can afford that house, demand drops and prices drop to meet the demand. People can afford todays increasing house prices because payments are relatively low, because of low interest rates. Interest rates reached their highest point in modern history in 1981 when the annual average was 16.63%, according to the Freddie Mac data. Fixed rates declined from there, but they finished the decade around 10%. The 1980s were an expensive time to borrow money. Go ahead and calculate your mortgage with 16% interest rate. Many couldn't afford it. Demand would drop and prices will decline. 300K loan @ 3% @ 30 yr term is $1265 @ 4% is $1432 @ 5% is $1610 @10% is $2633 @16% is $4034 |
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Posted: 12/16/2021 11:24:46 PM EDT
[#6]
Quote HistoryQuoted: Why would home prices drop? Houses are expensive because money is cheap. For example, the Fed could come back and implement reserve requirements on commercial banks. Banks would have to make up for the lost income they made not having said requirement. Aka increasing interest rates on loans. Their money policy is VERY easy right now. The Fed hasn't done anything to fight inflation yet... at all. They have plenty power to do so. |
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Posted: 12/16/2021 11:25:54 PM EDT
[#7]
In Florida? Go for it. Elsewhere? Maybe Texas.
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Posted: 12/16/2021 11:29:03 PM EDT
[#8]
I wouldn't. Everything is in a bubble right now.
The trick is to keep your liquidity and to preserve your wealth. Keeping it in the bank (holidays), dollars under the mattress (devalued due to brrrrrrr!) or the stock market doesn't count (no liquidity). When the wheels fall off, that's when you buy and then some. So, what's the difference between money and currency? Everyone will know in 2022. |
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Posted: 12/16/2021 11:29:13 PM EDT
[#9]
Quote HistoryQuoted: Maybe another way to think about is 1.2 million house today at 3% or 800,000 home at 4% or 5% or 6% in a few months, which would you go for? A few months? Keep talking.. I'd love to hear it. I agree to an extent. A 50% down payment on $1.2m vs 75% down on $800k. No brainer. Pay that bitch off in a year or two. |
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Posted: 12/16/2021 11:34:12 PM EDT
[#10]
Quote HistoryQuoted: A few months? Keep talking.. I'd love to hear it. I agree to an extent. A 50% down payment on $1.2m vs 75% down on $800k. No brainer. Pay that bitch off in a year or two. Quote HistoryQuoted: Quoted: Maybe another way to think about is 1.2 million house today at 3% or 800,000 home at 4% or 5% or 6% in a few months, which would you go for? A few months? Keep talking.. I'd love to hear it. I agree to an extent. A 50% down payment on $1.2m vs 75% down on $800k. No brainer. Pay that bitch off in a year or two. At mortgage rates less than inflation why would you pay off free money in times of high inflation? That makes no sense. |
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Posted: 12/16/2021 11:37:08 PM EDT
[#11]
Quoted: Currently looking at homes in the $800 to $1.2 range to finance. I know these are 25% to 35% more expensive than a year ago, but should I go now or hold out? Interest rates will probably rise from the sub 3ish the broker is currently quoting if locked in, but will prices drop? Or will Blackstone move into this market after swallowing up the $300*/- market for rentals. That you Edmond? |
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Posted: 12/16/2021 11:39:04 PM EDT
[#12]
Quote HistoryQuoted: That you Edmond? Not Edmond but we can meet for a beer. |
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Posted: 12/16/2021 11:40:41 PM EDT
[#13]
Quote HistoryQuoted: At mortgage rates less than inflation why would you pay off free money in times of high inflation? That makes no sense. I don't like having to own anyone anything. Simply a piece of mind. Also, amortization schedules and penalties on non-performance. That's taken many, many people out. We're jacking this thread. Sorry, OP. |
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Posted: 12/16/2021 11:49:38 PM EDT
[#14]
Quote HistoryQuoted: I don't like having to own anyone anything. Simply a piece of mind. Also, amortization schedules and penalties on non-performance. That's taken many, many people out. We're jacking this thread. Sorry, OP. Quote HistoryQuoted: Quoted: At mortgage rates less than inflation why would you pay off free money in times of high inflation? That makes no sense. I don't like having to own anyone anything. Simply a piece of mind. Also, amortization schedules and penalties on non-performance. That's taken many, many people out. We're jacking this thread. Sorry, OP. Yeah…we are. back on topic. How would you finance the house? Jumbo? Or would you piggy back a HELOC to conform to conventional? Yes, prices are stupid high. Mortgage rate are stupid low however. Really depends on how long you plan to be in the house before you would sell. A home is not an investment. It’s a place to live. |
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Posted: 12/16/2021 11:50:40 PM EDT
[#15]
Quote HistoryQuoted: It takes a special kind of bad decision making to buy in at the top of the market. Just sayin. Interest rates will climb but prices will collapse soon. All bubbles burst. Yup, you can always refinance. But the price is locked |
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Posted: 12/16/2021 11:56:47 PM EDT
[#16]
Humble brag thread.
I’m a poor though and also need a house. |
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Posted: 12/17/2021 12:03:26 AM EDT
[#17]
Quote HistoryQuoted: Yeah…we are. back on topic. How would you finance the house? Jumbo? Or would you piggy back a HELOC to conform to conventional? Yes, prices are stupid high. Mortgage rate are stupid low however. Really depends on how long you plan to be in the house before you would sell. A home is not an investment. It’s a place to live. VA for financing, 5% down easily, 10% with a little work. We’d be in the house for at least 8 years but more than likely 10-12 years, possibly longer if the numbers worked out. |
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Posted: 12/17/2021 12:06:56 AM EDT
[#18]
@4v50
What are the books I've seen you recommend? |
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Posted: 12/17/2021 12:14:53 AM EDT
[#19]
Quote HistoryQuoted: A few months? Keep talking.. I'd love to hear it. I agree to an extent. A 50% down payment on $1.2m vs 75% down on $800k. No brainer. Pay that bitch off in a year or two. Quote HistoryQuoted: Quoted: Maybe another way to think about is 1.2 million house today at 3% or 800,000 home at 4% or 5% or 6% in a few months, which would you go for? A few months? Keep talking.. I'd love to hear it. I agree to an extent. A 50% down payment on $1.2m vs 75% down on $800k. No brainer. Pay that bitch off in a year or two. Damn, another Arfcom millionaire with supermodel wife and a mansion. $200k payment in a year or two? |
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Posted: 12/17/2021 12:19:47 AM EDT
[#20]
lol
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Posted: 12/17/2021 12:20:28 AM EDT
[#21]
You can't find a home for $800. Maybe a nice tent.
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Posted: 12/17/2021 12:26:43 AM EDT
[#22]
Quote HistoryQuoted: VA for financing, 5% down easily, 10% with a little work. We’d be in the house for at least 8 years but more than likely 10-12 years, possibly longer if the numbers worked out. Middle of your range; 1,000,000. 5% down… VA loan? Or 50% down? Do VA loans go to that level? Eta, just looked it up, I guess they can… crazy. |
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Posted: 12/17/2021 12:29:48 AM EDT
[#23]
Well it is a mater of what version of events you believe.
1. Your dollar is going to keep its value and its better to stay liquid and wait for a deal. That even with a growing population the market will hit a bubble and prices drop. IE the market on homes is more a supply and demand issue. 2. Your dollar is losing its value and even at the higher prices inflation will continue but your home/land will insulate your earnings as a physical asset. IE your dollar simply has less purchasing power and the cost of homes is a byproduct Not many people who have overpaid on a home have been hamstrung more that a few years before the value has crept back up. The market crash that happen 15 years ago had a lot to do with variable rate loans and qualifying with gross income. Intrest rates going up a bit would stabilize things but what happens if the prices keep going up? It’s a gamble either way I just believe one is safer than the other. |
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Posted: 12/17/2021 12:45:12 AM EDT
[#24]
I'd buy if you actually need a place to live for the long term.
No way I'd buy anything for any reason at 800-1.2m. |
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Posted: 12/17/2021 12:55:49 AM EDT
[#25]
Quote HistoryQuoted: Why would home prices drop? There is a concerted effort in the one state that is a driver of economic forcings in other states' real estate markets (Commiefornia) toward apartmentalization (that is, the increasing of housing density with multi-tenant structures being the inevitable design goal). Increases in numbers of units is radically changing the real estate landscape in Commiefornia and only being offset by a great diaspora from the denser urban areas toward the countryside. As the fools that bought high in the metroplexes leave the metroplexes for the countryside only to buy high in the countryside the residents of the countryside who bought low are selling high and leaving for greener pastures in other states flush with cash which is radically increasing prices in other states. This can only persist for so long. At the same time borrowing money is essentially free right now but that's because of a combination of factors of money supply being artificially increased by federal spending and interest rate gerrymandering to prop up an economy in distress after lockdown induced GDP collapses the world over have wrought huge long term damage to global economies. Artificially low interest rates cannot persist for long. Artificially high property values cannot persist for long. Artificially sustained incomes from government handouts cannot persist for long. We are on the precipice of an economic reset of truly historic proportions. People that buy now are the helpful fools that people like me depend on so we can take advantage of their foolishness as we cyclically buy low and sell high from fools that cyclically buy high and sell low. |
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Posted: 12/17/2021 8:19:32 AM EDT
[#26]
Let's say you find your $800k house.
For round numbers, assume you can put $100k down on it. $700k to mortgage at 3.5% with insurance and taxes in each payment for 30 years. That comes out to $150 per day you have to pay until 2052. Do you want a $4500/month house payment? Because that's how you get a $4500/month house payment. Wait for a little while and pile up cash as best you can. I bet you find a good deal by the end of 2022. |
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Posted: 12/17/2021 8:48:36 AM EDT
[#27]
I'm renting even though it goes against everything I believe in. It's a little easier to do since I pay $550/month for 1600sqft on a farm with access to 2 ponds, a watershed, and 550 acres of land.
I make good money for the area, but I'm not buying at the top of the market. Interest rates drove demand. Interest rates will go up. Demand will go down. Market prices will stabilize accordingly. I've got time to wait it out. |
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Posted: 12/17/2021 9:17:36 AM EDT
[#28]
If Im looking to buy a home I am expecting to live in for a number of years with long term financing I would be less hesitant to pull the trigger. If Im buying now with an eye on selling or moving in less than 5 to 7 years I would think long and hard.
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Posted: 12/17/2021 9:26:03 AM EDT
[#29]
Quote HistoryQuoted: I'm renting even though it goes against everything I believe in. It's a little easier to do since I pay $550/month for 1600sqft on a farm with access to 2 ponds, a watershed, and 550 acres of land. I make good money for the area, but I'm not buying at the top of the market. Interest rates drove demand. Interest rates will go up. Demand will go down. Market prices will stabilize accordingly. I've got time to wait it out. We have a 24 month lease at $2300/month here in CO. Believe it or not, that's a great deal for our location. Same floorplan a few blocks over is up for rent at $2750/month... ours includes water too which is like $200/month here. That place sold for $300k six years ago to a property investment firm that rents it out 12 months at time. According to zillow it sold for $150k in 1998... As much as we want a house of our own, the place we're in now would probably take a $500k mortgage and $50-100k in cash to buy ($50k down and $50k cash to beat off the California's who'd bid on it). I can see both sides of it and am planning to wait until 2023 before we make a decision. By then we should be in a much better financial state too. |
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Posted: 12/17/2021 9:34:14 AM EDT
[#30]
Quote HistoryQuoted: We have a 24 month lease at $2300/month here in CO. Believe it or not, that's a great deal for our location. Same floorplan a few blocks over is up for rent at $2750/month... ours includes water too which is like $200/month here. As much as we want a house of our own, the place we're in now would probably take a $500k mortgage and $50-100k in cash to buy ($50k down and $50k cash to beat off the California's who'd bid on it). I can see both sides of it and am planning to wait until 2023 before we make a decision. By then we should be in a much better financial state too. Quote HistoryQuoted: Quoted: I'm renting even though it goes against everything I believe in. It's a little easier to do since I pay $550/month for 1600sqft on a farm with access to 2 ponds, a watershed, and 550 acres of land. I make good money for the area, but I'm not buying at the top of the market. Interest rates drove demand. Interest rates will go up. Demand will go down. Market prices will stabilize accordingly. I've got time to wait it out. We have a 24 month lease at $2300/month here in CO. Believe it or not, that's a great deal for our location. Same floorplan a few blocks over is up for rent at $2750/month... ours includes water too which is like $200/month here. As much as we want a house of our own, the place we're in now would probably take a $500k mortgage and $50-100k in cash to buy ($50k down and $50k cash to beat off the California's who'd bid on it). I can see both sides of it and am planning to wait until 2023 before we make a decision. By then we should be in a much better financial state too. Oddly enough, I'm looking at early 2023 as well. FWIW, my rent is well below FMV. But I'm a professional with no kids, I maintain the property, and keep the area free from armadillos. The owners told me early on that the unrealized income is worth retaining a good tenant. Probably helps that they're wealthy (elderly brother and sister/multi-generation family farm). |
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Posted: 12/17/2021 9:34:42 AM EDT
[#31]
Quote HistoryQuoted: I'm renting even though it goes against everything I believe in. It's a little easier to do since I pay $550/month for 1600sqft on a farm with access to 2 ponds, a watershed, and 550 acres of land. I make good money for the area, but I'm not buying at the top of the market. Interest rates drove demand. Interest rates will go up. Demand will go down. Market prices will stabilize accordingly. I've got time to wait it out. Keep telling yourself that. |
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Posted: 12/17/2021 9:37:25 AM EDT
[#32]
I bought. Hard times are here and I didn't want to be at the mercy of landlords or rental companies.
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Posted: 12/17/2021 9:44:49 AM EDT
[#33]
Didn't read every post but if you are selling your similarly priced house or already sold it then it's a wash. You can try to rent/live elsewhere and time the bottom but have fun playing around with your primary residence. I like to own my primary outright so I have a stress free place to live and will risk take on investments/vac property.
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Posted: 12/17/2021 9:44:52 AM EDT
[#34]
Do the math.
a $750k loan at 3.25% is about $3250 per month a $575k loan at 5.25% is about $3175 per month If you expect interest rates to rise and plan on being in the house long term, then buying now is the smart move. |
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Posted: 12/17/2021 9:48:47 AM EDT
[#35]
Quote HistoryQuoted: I wouldn't. Everything is in a bubble right now. The trick is to keep your liquidity and to preserve your wealth. Keeping it in the bank (holidays), dollars under the mattress (devalued due to brrrrrrr!) or the stock market doesn't count (no liquidity). When the wheels fall off, that's when you buy and then some. So, what's the difference between money and currency? Everyone will know in 2022. Borrowing money at a fixed low rate when inflation is rampant is a sound move. Will the house devalue enough to offset the savings? If inflation is on the rise, will the house devalue at all? |
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Posted: 12/17/2021 9:49:32 AM EDT
[#36]
Quote HistoryQuoted: @4v50 What are the books I've seen you recommend? 
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Posted: 12/17/2021 9:52:23 AM EDT
[#37]
Quote HistoryQuoted: Do the math. a $750k loan at 3.25% is about $3250 per month a $575k loan at 5.25% is about $3175 per month If you expect interest rates to rise and plan on being in the house long term, then buying now is the smart move. Its also a risk evaluation regarding cash flow/career stability. For many millennials (even old ones like myself), maintaining a degree of career mobility has been one of the few things we had to stay ahead of salary compression. I've moved five times in the past decade for better career opportunities in different states. Finally at a place in mine where both my career and my wife's completely align and we can set some roots down. Wait for it tho, we'll buy a house and then Colorado will pass CA/NY level AWB. ????? |
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Posted: 12/17/2021 10:08:39 AM EDT
[#38]
I'm looking to buy my first house in the next 6 months. I need out of the apartment life.
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Posted: 12/17/2021 10:25:24 AM EDT
[#39]
Quote HistoryQuoted: It takes a special kind of bad decision making to buy in at the top of the market. Just sayin. Interest rates will climb but prices will collapse soon. All bubbles burst. True, except interest rates are very low, and they are going to rise next year. It depends on how high things are in your area. We talking Boise ID where properties are 80% higher, yeah fuck that, or your little town where they are up maybe 10-15%. I do not see properties in my town going down very much, they were increasing anyway. Obviously some of the shit hole places will go back to a reasonable price. |
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Posted: 12/17/2021 10:32:02 AM EDT
[#40]
This shit show will get propped up longer than you think. Buy property.
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Posted: 12/17/2021 10:34:33 AM EDT
[#41]
Quote HistoryQuoted: That's how I rationalized it. Low interest rates and inevitable inflation. So a $310k compound with 2 rental units paying the note is $2k a month at 2.8% Versus my $150k condo paying $970 a month at 3.87% I now have to deal with tenants, but that's the price of eliminating housing costs. |
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Posted: 12/17/2021 10:37:24 AM EDT
[#42]
Quote HistoryQuoted: I'll save you time and money. Buy gold, probably avoid debt. Become a slum lord. HAHA, solid advice. I'm 2 for 3 (No Gold). Could one buy property instead of gold? |
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Posted: 12/17/2021 10:39:26 AM EDT
[#43]
It depends on whether we fail upward or downward.
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Posted: 12/17/2021 10:40:23 AM EDT
[#44]
I would not buy a house now but I would certainly secure some dry spot underneath an interstate bridge.
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Posted: 12/17/2021 10:41:20 AM EDT
[#45]
Lol
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Posted: 12/17/2021 10:42:48 AM EDT
[#46]
Quote HistoryQuoted: A few months? Keep talking.. I'd love to hear it. I agree to an extent. A 50% down payment on $1.2m vs 75% down on $800k. No brainer. Pay that bitch off in a year or two. Terrible advice |
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Posted: 12/17/2021 10:43:17 AM EDT
[#47]
You have to live somewhere.
Compare the mortgage payment against rent on the same house. If it’s the same or less to buy, buy. If it’s much cheaper to rent, rent. We could rent our house out for more than our payment in a 15 year mortgage. So it made sense for us. If you believe the economy is going to collapse though I don’t think I’d be looking at million dollar houses. If I could afford that I’d be looking at 500k houses and putting the rest towards preps. Preferably outside the city and suburbs. |
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Posted: 12/17/2021 10:45:01 AM EDT
[#48]
Quote HistoryQuoted: HAHA, solid advice. I'm 2 for 3 (No Gold). Could one buy property instead of gold? Quote HistoryQuoted: Quoted: I'll save you time and money. Buy gold, probably avoid debt. Become a slum lord. HAHA, solid advice. I'm 2 for 3 (No Gold). Could one buy property instead of gold? |
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Posted: 12/17/2021 10:47:14 AM EDT
[#49]
Quote HistoryQuoted: This shit show will get propped up longer than you think. Buy property. We no longer have Billy beer but we do have Hunter crack |
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Posted: 12/17/2021 10:54:06 AM EDT
[#50]
Quote HistoryQuoted: This shit show will get propped up longer than you think. Buy property. you aint kidding! Bought a house in NV a year ago and it increased by 40%, and at the time got beat out on several others by "cash offers" Been trying to buy a house in Twin falls ID surrounding rural areas, and getting beat out by all cash offers. Not sure who is buying all the houses for cash, but it seems kind of weird to me. |
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