2 more weeks!

Folks that don’t understand we have supply/demand doing what it does and trying to wait for prices to fall, at the same time saying mortgage rates must rise.

I just don’t how to comment to that…wishful thinking I guess and a fundamental lack of understanding of supply and demand.

The free money won’t last forever. And nobody knows when it will stop. But I like free money (mortgage rates way below inflation, free fucking money)

Low interest rates have nowhere to go but up.

High, absurdly high property values have nowhere to go but down.

Only a matter of time.

This is an incredibly astute observation.

People said the same thing a year ago…yet here we are.  Even a decade ago.

The price on homes is supply/demand. Being a doomer for a decade, well you guys just lost a decade you’ll never get back.

It has to be a “bubble” to burst.

The “special kind” are the folks who make proclamations without knowing the factors moving the market.

The flaw in this logic is that when rates go up, prices go down.

In fact, the very reason we are in this mess, with RE prices being what they are, is because of absurdly low interest rates.

In fact, 1970's with very high interest rates like 19% had housing prices that were 30-40K on the average, and in rural areas, even less than this. Actually much less.
I get it the 1979 dollar is not the same as 2022 dollar, obviously,  but things are so out of whack.
what's is so good about very low interest rates when RE in major metro areas is just absurdly priced.

I would prefer a 40K house at 22% versus $599K townhouse in DC area for 2.5% or whatever it is. Even adjusted for inflation.

I don't know how people make ends meet in major metro areas like Jersey or DC or Chicago.

RE has become less and less affordable than ever. No matter how they spin interest rates or prices. It has become an investment vehicle.

Work from home changed everything.  Fueled demand bigly. Combine with low supply….

Supply/demand

This.  When interest rates bump up, real estate values will bump down.  If you buy now and prices dip back 20% or 30% or more (it's happened before) you end up in a position where if you have to sell, YOU get to write the check at closing.

New homes that were 40K in the 1980's here,  are now selling for close to 500K. SICK!

Then don’t put yourself in a condition of have to sell and treating a house as an investment.

It’s not.  Your primary residence is NOT an investment. It’s a place to live.  This concept isn’t that damn hard.

My thought is this:
You can always try and get a lower interest rate than what you bought with.
You can never get a lower price than what you paid.

And why would that matter if you don’t sell?

That’s why I asked way early in the thread “how long do you plan on living here”

A house is not an investment. It’s an illiquid asset where you sleep.

Interesting. Because real estate is in the institutional phase right now/smart money phase.

Do you even know what that chart means or the time line?

But I repeat. Your primary residence is NOT an investment. It’s a place to sleep and spend most of your time outside of work.

Thx for the correction. People don’t know opportunity when it’s staring them in the face.

The same reason they dropped last time.

Is this really a bubble?  I have no doubt there will be a correction but subprime loans aren’t being given out like pre 2008.  It wouldn’t surprise me in the least if there’s on a small correction.

I sold at the top and bought at the top because I’d rather be stuck in the new house.

If the economy really does collapse the price won’t matter, being able to defend it will.

Liquidity has opportunity cost too.  It doesn’t do you much good to have liquid assets if they lose the ability to buy tangible things.

All depends on your confidence in being able to make the payments.

Shit happens.

It happens a lot worse when you have a big mortgage.  

If it came down to it, we could shit the cash to pay off the house. That provides a huge peace of mind while the world goes to shit.


Don’t listen to me though, I’d take what cash you have, blow 90% on land and 5% on the residence.

I see a lot of reference to ‘08 & “bad” loans as a justification to go ahead and get on this balloon.

The bottom line is, in ‘08, a lot of people quit paying their mortgage. The reason is not important.
One would be a fool to think we’re not on the cusp of that again.

I just wrote the check to pay off my house yesterday.

It will save me 150k in interest over the term of the loan that I will never get back. Most of the interest you pay is in the beginning of the loan.  So now instead of paying interest and losing $500/  month I keep that 500 per month when it is worth more than it will be later. Fuck that. Ill pay it off now. Makes no sense to pay interest if you dont have to. Inflation rates dont always equal an equal amount of added costs to your budget anyway. How many light trucks and houses do you buy every year? Food/gas sure.

The reason is important. They stopped paying because their ARM reset and their mortgage payment quadrupled.

If you are going to make predictions about something then should know at least basic information.

This is right but it depends on what you expect

If youre waiting for a crash based on a recession then i would wait

I think rates are going to go up to tamp down inflation. In this case your house value would drop because the amount people are willing to pay will stay the same. But only now it will involve higher interest rates. If youre paying cash then wait. If youre going 30 year then you have to decide what the point of buying is.

That’s cool. I refi’d for 30 years, including cash out for 200k, then another 100k heloc. Refi was 3%, heloc 2.5%.  

While you’re concerned with paying interest, my money is making way more that generates serious income so I won’t need to work.  Inflation is my friend, it’s a constant. As is my mortgage rate, for 30 years at least.

Your cash loses value every single day.

I would say buy something you can pay for free and clear and put your money into something that will out perform inflation and then build a house when you are ready to retire in some place where cost of living and crime is low.

Now go calculate what servicing the national debt would cost at 16% interest (I'll help, it is currently $350b/yr at 1.5%, so $3.7tr/yr.) now do you understand why the answer to all your questions is: inflation.

Depends, if they're bringing in $25k a month before taxes, $4500 isn't that scary.

this assumes you are independently wealthy, have a pile of gold and do not depend on a source of income.

In the real world, most people are creditors and get paid via whatever method. Inflation hurts creditors. So what if a mortgage is turned onto pocket change via inflation? Your paycheck or income has also turned into dust.


In reality, the latter will cancel out the former.

nobody knows, but the comparisons to 2008 are retarded

djia goes down 50% on monday, i'm calling it now

Wow. This kind of thinking keeps you beholden to a paycheck instead of building wealth in what is the most opportunistic time I’ve ever seen in my life.

You’re a slave. This kind of thinking will keep you there.

Full disclosure, I still “have” to work. Only because if I don’t I can’t make more money.

Doomer thinking will keep you a slave, because that’s all you know. And build your cage around you.

They've persisted longer than some of our members have been alive. We've been in the same zero-boundary crisis for 20 years with short rates below the real inflation rate, and there's no reason to believe that's going to change. This isn't 1980, the government can't afford to pay 18% on it's debt.

Nobody who has any chance of being in any position of power any time soon is going to choose a deflationary depression over an inflationary one. The vast majority of Americans either have lots of debt, lots of assets, or both, relative to their actual worth and compared to anywhere else.

What I was thinking.

My business sold only into the new home market (middle 50%) for thirty years. I started when prime was 18%. The market was DEAD. It had no place but up to go. I rode the bucking bronc through three meltdowns. If you want to see WHEN the next one has started find a friend in the carpet biz or some other last in line vendor and ask him how his receivables are. There's your sign.

Many times homes in Kali have been bought and sold over the last few decades with each successive sale being higher than the last. Ask yourself WHEN the group of idiots willing to pay over $1M for an eighty year old one bedroom frame house built in the late '40s or '50s is going to dry up if not disappear all together. It truly will be a domino effect IMO where a single area in/of the country will fail , word will spread, more will halt the buying and then boom. No more sales. It's a giant game of musical chairs at that point.

In the past it was slightly different in that there were underwriting failures being responsible or interest rates or another trigger that started the decline. This time I'm convinced that it will be a combination of those things only highly aggravated by the illegal alien invasion. Mom and Pop "mortgage" companies will skirt the rules with corrupt politicians trying to get in on the goldmine. Impossible terms will be sold to people with "no money down!" or some other gimmick and the pin will be pulled.

To the OP,,You must be a person of means as you're asking about homes that most only dream of. The laws of supply and demand don't care about your intentions, education, profession or anything else. The only thing that matters to the mortgage company is did you check enough boxes to allow them to sell the note before you default. In 1986 my building note was a bit over $12,000 per month. My bank called my note even though I was current and well capitalized. Didn't make ANY DIFFERENCE. The "RTC" came in and took over all the commercial RE loans no matter the condition of the loan. The taxpayers took a bath as the "RTC" made me a NEW loan with a 60% reduction in our principal. They did this with LOTS AND LOTS AND LOTS of commercial loans. My payment went to just under $4k per month over night. I wanted to pay the bank. They didn't want me to pay. They were closed and renamed and then re-opened. We took the deal and never looked back. We literally had no choice in the matter.

Soon there will be bargains galore for astute investors I suppose but I have a sinking feeling that this time around the recovery period will be longer by an order of magnitude. My Son and DIL , both with advanced degrees, would like a larger home but they have decided to stay put even though their home value has seen a rather large increase. It's a smart move I firmly believe. It just made sense to them to stay put for a few years and continue to increase their savings rates as opposed to spending their money on interest.

And their savings is getting eaten alive by inflation in a time of 3% mortgage rates, in a time where their cashflow and career would be taking off.

But socking away cash is a good financial move.