Is the housing market overheated?

[snookdoctor]

I suppose that if and when interest rates are adjusted the market will cool off.

Very true. With every .25 rise in interest, you lose $25,000. in buying power.

 

[oldfella1962]

Goldman Sachs predicts that housing prices will rise another 16% before the end of 2022 because millennials are entering their peak home buying years. That would be almost a 40% increase in house prices in 3 years.

I am thinking that not enough paychecks will have increased enough to sustain this. Plus, the millennials came of age in the midst of the great recession. They remember bottom dropping out.

I don't think housing is affordable for enough young people right now. It doesn't matter if they are in their peak homebuying years. I am also not seeing the baby boom that Goldman predicted. I don't think it is going to happen with the average price for a month of daycare being around $900.

I think the housing market will cool a bit starting in 2022.

Anybody else have an opinion?

goodness! A month of daycare is about equal to my mortgage payment!

Hate to sound old fashioned, but unless a woman (married to a man making decent money) has a very good paying job, it would make sense just to stay home and take care of her young children herself. No worries then about your kids not being cared for properly. Just sayin'

 

[pjciii]

Part of what i dont understand for those that are financing would be how are the appraisers justified In appraising out these home for that kind of money. Are there going to be a bunch of lawsuits Against appraisers and mortgage Companies?

 

[sinclair1]

Part of what i dont understand for those that are financing would be how are the appraisers justified In appraising out these home for that kind of money. Are there going to be a bunch of lawsuits Against appraisers and mortgage Companies?

It’s a racket, but most appraisals are waved because the offers have enough down the bank doesn’t need. We had both our buyers waive appraisal.
Since they waived it and bought high with big down payment or cash! It is now a comp for the guy who is getting a 30 year mortgage.

we waived the appraisal on the one we just purchased. I don’t need to pay for some guy who took a correspondent course to tell me diddly. We over paid, it’s not rocket science.

 

[ucfireman]

I think when or if the interest rates go back up or to the old normal you will see a big slowdown in the real estate market, Autos too.
I'm 48 and interest rates when I was young were all around 6-8% or so. They were 12+ in the mid to late 70s.
All the folks today know are 2-4%. I got my mortgage in 2010 and 4% was good for a 30y with 20% down. Now 2 1/2 to 3% for a 30y low 2's for 15y. No one is buying thinking they are buying their home, its just a house and will move in a few years so go with the lowest rate possible. And rents are stupid so you are better off buying even at high prices.
And heck auto loans are in the 2% range, even for used form the credit unions. Or refinancing.
I believe all this inflation (in the housing and auto) is due to the interest rates. And the yanks moving down here. My 0.02.

 

[natureman]

Bought my first home fresh out of college in 1982 with a FHA loan at 13.5% interest. It was not difficult to save up for the down payment. First time buyers today are in a much tougher position with inflated prices even with ultra low rates.

 

[earlthegoat2]

I had an FHA loan on my house in 2011 too. It was only 5% down. So around $4000 for our 90k mortgage plus closing costs.

Looking back, we spread ourselves way too thin. But it worked out so all is well for us but it is very precarious for our peers.

If I hadn’t been in the military, we never could have afforded an apartment let alone a house. I was OK with my money while in service and had a nice wad of cash and investments when I got out. My wife’s grandfather had passed away recently and her mother gave us an extra 1k. This is the only reason we were able to afford what we did.

I have no clue how people are buying 300k “starter” homes.

 

[gobbleinwoods]

I suppose that if and when interest rates are adjusted the market will cool off.

Thinking the move by Zillow to stop buying houses is the both the sign it is cooling off and the trigger start the cooling. As that will put more on the for sale market.

 

[snookdoctor]

Zillow's business plan may have worked. Buy low and sell higher. Their problem was timing, since they launched in a hot, over inflated market. They are dumping 25,000 employees, and all of the properties they bought, regardless of profit.

 

[livinoutdoors]

Zillow's business plan may have worked. Buy low and sell higher. Their problem was timing, since they launched in a hot, over inflated market. They are dumping 25,000 employees, and all of the properties they bought, regardless of profit.

You would think that a company whos job it is to track home values would know better huh? Just goes to show, people cant help themselves. Everybody knows the market is way overpriced, but people are still buying.

 

[livinoutdoors]

Right now all the markets are just waiting on that "thing" that starts the panic. Hard say what will be the trigger, but you will know it when you see it. If you ever wondered what the folks in the 1920s were thinkin about before 1929 happened well, now you know.

 

[westcobbdog]

This market is different than the last bubble we experienced. Before there was mortgage fraud galore and also many folks getting approved for loans they had no business obtaining. This time there is no mortgage fraud. I am seeing quite a few appraisals coming back for less than sales price. Maybe 4 out of my last 7 sales with issues. Appraisers seem to be trying to put the brakes on the market momentum. Right now it’s too much cash chasing too few homes.

 

[westcobbdog]

Zillow's business plan may have worked. Buy low and sell higher. Their problem was timing, since they launched in a hot, over inflated market. They are dumping 25,000 employees, and all of the properties they bought, regardless of profit.

My co just put out the word that Zillow lost 378 million recently, either in a yr or quarter. Those Idjits paying retail for a beat up unloved home thinking they can make $12 profit when they flip it.
The dude that owns Zillow sold his house recently on the left coast. The infamous “zillestimate” was a little off real world. It sold for about 72% of their estimate of value. Zillow and the others like it like open door are not profitable. How long will
they last to the money dries up?

 

[Lukikus2]

I’m a millennial. I’ve been saving for a house for years. I had planned to buy this past year but prices keep going up. So, I’ve given up on buying a house. I’m confused as to how so many people can have so much money. I guess I’m either pore as dirt or there’s a lot of fake money out there. Kind of feels like my life’s been on hold because everything is so unaffordable.

Look into a FHA or FMHA loan. A good realtor can help you out. You can roll the closing costs over into the loan or seller pays. I probably put 10 bids on houses that cash buyers bought out from under me before getting this one. Good luck.

 

[Kev]

Look into a FHA or FMHA loan. A good realtor can help you out. You can roll the closing costs over into the loan or seller pays. I probably put 10 bids on houses that cash buyers bought out from under me before getting this one. Good luck.

I’m just not going to overpay $100,000 just because everyone else is.

 

[Lukikus2]

I’m just not going to overpay $100,000 just because everyone else is.

Don't blame you for that. I ended up with a reverse mortgage bank foreclosure fixer upper. Just try to buy while interest rates are down.

 

[NE GA Pappy]

If the market isn't overheated, it will be soon. The Biden BBB bill for .1.2T will continue to raise the inflation rate, and eventually the balloon will pop. Right now, no one knows if it will be a pop or a BANG!.

we will know soon though

 

[jdgator]

Everyone keeps asking where the money is coming from. The answer is simple: large employers have adapted to COVID and have transitioned a large majority of their white-collar workforce to work-from-home. That said, people are moving back home or to wherever their dream destination is because they now have the luxury. People will spend more money to live where they want to live. As well, you have people from big market states like CA and NY who are cashing out on $1 MM homes that are equivalent to $400k homes here, hence all the cash offers.

That is true but I think a lot of companies are going to stop paying high cost of living wages to employees telecommuting from less expensive areas.

So a family that relocates from California to Georgia has a lot of buying power when they still have their California wages. But as soon as they change jobs they find they don’t get those premium salaries. They get regular salaries. I think they’re going to find that they’re really overextended.

I know this is really pessimistic, but I’m also afraid that the people who insist they can work from home could find their jobs outsourced. If you can do your work from your living room in Arizona, somebody can do it in India or Argentina.

 

[georgia_home]

Well, just got back from Kroger a short time ago. The 3lb pack of ground turkey that use to sell for 8.99 a few months ago, is now selling for 10.99. Today.

hmmm. just about 30% inflation on such things.

299 gas now 399

why not housing.

no mean tweets from the president lately, well, maybe a few OWG rants when he gets caught in lies and a MSM that doesn’t call for that. So it’s wash.

 

[Para Bellum]

goodness! A month of daycare is about equal to my mortgage payment!

Hate to sound old fashioned, but unless a woman (married to a man making decent money) has a very good paying job, it would make sense just to stay home and take care of her young children herself. No worries then about your kids not being cared for properly. Just sayin'

It’s a conversation that happens more often than you’d think.