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For real. OP’s comment that “Homeowners are dead set on not lowering prices” is laughable.
Why the fuck would anyone lower their selling price if someone else was willing to pay it?
My wife and I are looking for another house. The house we own is worth about 50% more than what we bought it for, 10 years ago. However, anything that we want to buy is also worth that much more than it was 10 years ago, AND interest rates have gone up. It's not like we're making any more money! We will need to get the most we can out of our old house, we're not a charity.
people (from other places in this world) can correct me, but I would say the housing market isnt dominated (at all) by humans who have a second home to offload.
the market is dictated by companies that are buying real estate, hoping for a little growth in prices, to make a lot of money on their investments (powered by banks that rather loan money to companies with assets, than individuals with a dream of owning a home).
I know, right? We already live in a LCOL area. Everywhere I want to live is so much more expensive. She never wants to move from this area so that's another issue.
I had realtors come around my neighborhood about a 2 years ago and they were trying to convince people to sell their homes to them. I laughed at them, I bought my house at the end of the last recession, 3% interest in a house that sat on the market for 6 months, my mortgage is about $900 a month. I asked them if they could match that for a house that is the same size or bigger and with the same property or bigger. They walked away shortly after
It sucks because we need a bigger house, we have 3 kids now but we can't afford more. We would like to do a addition and it's hard to use the equity because interest it to high right now. We're locked into our home till we make more money
I have to pay 3 times more than the price my house is worth now - to buy a newer home in the same size! And my house is only 23 years old and was fully renovated 4 years ago! It’s weird times…
Norway btw.
This is the problem that I think could break the market; we're reaching a point where people are trying to sell, but their target demographic has been priced out. If my budget is 1-2 million, I'm not moving into a small 3 bedroom starter home built in the 60s.
I'm really just operating off vibes here, but my city is composed of most of these small family homes, and every week homes get listed and delisted at outrageous prices. the demographic of the whole city leans older, which means most of these people are listing homes to either move or retire. Almost every other home in my neighborhood has a for sale sign, but no one is making a move and these houses just get delisted and put back up for 10,000 less a month later. There have been some homes up for 3 years now, in a relatively desirable neighborhood to live in.
It's not the fault of the homeowner, because they're just selling it for what the market says it's worth. No one who would want to live in this area can buy though, so what's going to happen when boomers start passing and can't sell those homes beforehand? Idk, it seems like a real problem that could screw everything up in the next 3-4 years.
There's a massive housing shortage that stems from the great real estate crash of 2007. It's exasperated by a shortage of skilled labor, a shortage of land in desirable locations, and materials shortages in metals and wood.
Housing prices will stay high until demand starts to outpace supply, but with a large shortage that's over a decade old, it won't be soon.
>Why the fuck would anyone lower their selling price if someone else was willing to pay it?
But that's not the only way homeowners can oppose lowering prices. For example, they can oppose new development so that supply becomes scarce which makes their own property go up in value.
Homeowners don't even need to do anything for this. In most western countries there is an implicit agreement between homeowners and politicians that home prices must always go up.
Look at the 2008 housing bubble. After it happened, everyone agreed that it was a housing bubble. And yet, housing prices today are far higher than back then. How do you *recover* to a bubble?
It's because housing prices are so linked to so much of our economy that it's impossible for them to go down significantly without also damaging a lot of the rest of the economy.
The best we can hope to do is to slow down housing prices to below inflation. But a sustained reduction in price? Never happening. Politicians and their voters won't let it. Governments will pump untolds amount of money into their economies before they'll accept sustained and significantly lower housing prices.
My friends in the neighborhood (all the homes were built from 2014-2016) and I laughed when we saw the (exorbitant?) price a neighbor was asking for their home.
Then it went under contract within 2 weeks.
Somehow that fell through. It then went under contract again with another buyer within 3 hours.
They close next week.
Another neighbor listed their home for a similar price (within 2%) about two weeks ago. It looks like they're under contract now as well.
Truth be told, we're rapidly approaching the price where I once jokingly said I'd immediately sell my home if someone offered me that much - effectively double what I paid for it.
Point being, I really thought prices had at least plateaued, but evidently, at least here, they are still going up like crazy.
>Truth be told, we're rapidly approaching the price where I once jokingly said I'd immediately sell my home if someone offered me that much - effectively double what I paid for it.
And then where are you going to move?
Seen plenty of people with this mindset, but if you aren't trying to significantly downsize or rent, then there's no point.
I don’t always plan out my jokes well enough to account for details like that…
But that is absolutely the problem, isn’t it? If I move I have to find somewhere else.
Speaking of, another “neighbor” a few blocks away decided to capitalize on the market and sold their home in late 2021 with the intent of renting until “home prices came back down to Earth.”
I don’t know where they are right now, but I’ve gotta believe they at least sort of regret that choice. I mean, Zillow is Zillow so take this with a grain of salt, but their current “Zestimate” is 18% higher than the sale price in October 2021 ($181/sq ft -> $213/sq ft.)
But with that said, their 2021 sale price was double what they paid for it in 2011, so no one needs to feel *too* sorry for them.
Yeah I completely agree.
The US is short roughly 4 million homes at the moment, and unless something drastic happens the worst we will see is these temporary lulls in the price increase.
I just don’t understand what fundamentally changed between 2020 and 2023. I thought Covid killed a lot of people? Is there really exponentially more people that came of home buying age in 2021?
Also the resilience of home prices despite high rates going on 2 years now. Since the fed kept rates low and thus caused prices to go up, and were now stuck in this, should the fed just lower rates again? It’s not like prices or inflation are going down anyways.
At the most basic level, its supply and demand.
There is always at least a bit of a demand because people need to move for one reason or another (bigger home for more kids, moving to a new city, whatever.) We’re currently heading into peak “moving season” right now as people tend to move more often during the summer.
However the supply side of things has been problematic for two key reasons:
1) a lot of people in the USA are “trapped” in their current homes due to the historically low interest rates offered in and around 2020. Now, being “trapped” can be a good thing or a bad thing depending on whether or not your home fills your needs or not. Regardless, people cannot afford nearly as expensive of a home with current interest rates as they could have with lower rates. A rough example is that a $300,000 mortgage at 7% or a $490,000 mortgage at 2.75% would both result in a $2,000/month mortgage payment (P&I anyway.) So people that have those sub-3% mortgages locked in aren’t going anywhere unless they’re downsizing or HAVE to move. So the effect of this is that there just aren’t as many people selling homes as there would be pre-2020.
2) Covid caused a shortage in housing because no one was building houses for a while - and when they wanted to building supplies had increased dramatically in price. So those new homes are all more expensive too.
The question as to why the Fed can’t/wont raise interest rates is an entirely different discussion, but you’re correct: lowering interest rates to 2020 levels would definitely “fix” some of the housing issues.
I mean, it would cause a LOT more problems, but housing would definitely be cheaper.
The housing market crashed in 2008 because:
1. Housing values kept getting inflated.
2. Banks kept offering bad loans.
3. A lot of people defaulted on their loans, thus dripping a bunch of houses into foreclosure.
All the buyers in the world can't fix these conditions.
This is a political red herring. Private equity owns a vanishing small % of the house market.
The legit problem is that most hones are owned by individuals with a mortgage and they can't sell that home for less than the loan value and don't want home prices to crash because most of thier net worth is in thier house. Wishing for millions of regular people to lose all thier money is never going to fix things.
in america it was the companies buying up all the available inventory that created this crisis. the fact that government just stood by and watched as our livelihoods were stolen from us should speak volumes.
That's not true. Plenty of areas have minimnal corporate ownership of houses and still have some of the highest prices in the nation- look at the Boston metro.
Agreed.
I find often times it’s the people with multiple houses that are the problem.
They claim not everyone wants to own and that’s how they justify being landlords but while that’s true there’s definitely more people who want to own than available supply.
Very few individuals own multiple homes and when they do own multiple homes those homes are usually far and excess of what the average American is looking to buy. If they're more typical homes than it's usually only two or three total and The second home is often a place where you don't want to live permanently, like tourist places or a cabin in the woods. Even people becoming landlords owning a single extra home aren't really the problem.
I don’t mean mansions and waterfront properties. I know lots of people who are upper middle class and own regular smaller homes they rent (often times these homes were first homes they outgrew).
In my area there’s lots of regular suburban houses for rent by owner…not corporations.
In the town I went to uni, there's a single dude who owns *dozens* of single family homes and duplexes that he rents to college kids. And he's a slumlord. And a racist. My hubs (then bf) and I rented a two bedroom from him initially with my sister. We're all white. He overcharged but whatever.
Then hubs and I rented a duplex with two friends, both POC. Same landlord. He accused them day one of *stealing the blinds*. There were no blinds, lol. Also refused to fix our AC in the middle of a TX summer until my mom emailed him threatening to take him to court (we were all like 24 years old). Absolute nightmare. Never again.
The real correlation is with long-term under-investment in creation of new housing, which often goes hand-in-hand with restrictive zoning that prevents new housing from being built (especially anything denser than single detached houses on large lots).
There's only so much land that's conveniently located near desirable cities, so if you don't allow people to build up, and building out is undesirable as no one wants to do a daily 3 hour commute, then prices will just go to the moon.
Even if you allow people to build up, building up requires more effort the higher you go. And so building up does not make housing affordable either. No city has made itself affordable through building up.
The only solution is to stop growing the population.
Developers will stop building up when it no longer makes financial sense to do so. That point is significantly past the current limit in detached single family zoned areas.
Also you're underestimating how damn expensive land is. It's much cheaper per housing unit to build something like 8-12 units over 3 floors in a single building over the same piece of land than to build a single house on it. Height isn't THAT much more expensive until we're talking about real skyscrapers.
I live on Cape Cod, and corporate investment and AirBnB have destroyed the local housing market for locals. Corporate investments bought tons of houses and only rent them as short-term summer vacation rentals. Same with many private owners, many from out of state, who buy houses just to rent them for the summer. Martha's Vineyard and many towns have been putting limits and restrictions in place. But the damage has been done. Trying to find ANY place to live, let alone buy a house is incredibly hard.
Not sure if they have this term where you live but "mom and pop investors" are a bigger factor than corporate ownership.
Individuals with enough capital that are hoarding housing stock to use as investment properties, usually by using the equity from the houses they bought when prices were cheap. They buy up as much homes as they can and rent them out at an inflated markup - using the renters to pay off their mortgages and pocketing the rest. Or they'd rent the place out at an Airbnb. There are SO many small-time investors like that in my city.
Corporate owned is corporate owned owning 3+ homes for commercial use limits the available inventory in an already tight market. 30% last year were in this type of situation. That’s a real problem
Yeah, this is one of those things you hear constantly on the doomer / financially illiterate memes subs but I’ve never seen anything that compels me to believe it.
Exactly. There is no scenario in which housing prices crash and suddenly everyone can buy a home: it will crash because people can't buy homes for whatever reason.
I grew up in Vancouver, for the past couple decades people have been waiting for the housing market to crash. I've even known people who sold their homes and started renting with the idea they would buy back in after the crash. All they did was fuck themselves.
Companies not people. 16 thousand homes in the atlanta area are all owned by 1 company. There will be no homes for new families at this rate. Let’s face it they are empty and most likely a way to launder dirty money.
No. It'll stay stagnant longer instead of correcting. Then, it'll continue to rise. If the housing market crashes, we all lose. Therefore, it'll be propped up until it picks back up on its own.
People love to shout "2008" while ignoring all of the systems and measures put in place to ensure 2008 doesn't happen again. I feel like most of the people cheering for this didn't live through 2007-2010, or were too young/disconnected to remember.
Yeah, they were kids. They’re assuming their financial situation will be the same except housing will be cheaper. Most people didn’t come out ahead after the Great Recession. My salary was cut by 10%. I was lucky to keep my job. Unemployment and homelessness were higher than they are now.
They’re assuming everyone is as dumb as them and the same institutional failures happen over and over simply because they don’t understand them.
Truth is. There’s always some new institutional failure to be worried about that we aren’t aware of, but you’re right, we won’t do 2008 all over again.
Can you expand on why we all lose? As in, it would cause a nationwide economic crisis like 2008?
Can’t it (relatively) slowly correct itself without causing a crisis?
If it corrects, that means the prices go way down. Banks give loans based on current value. So, say the bank gave a $300k loan for a $300k house. Now, that house is worth $150k instead of $300k. The bank could be on the line to lose the difference in value multiplied by every single loan given out. That would set almost all banks in default, and we'd be in the next depression. There are no winners there. Guess who will be footing the bill to bail them out....
Do most people really have a choice about buying a house or not? Renting is about as expensive nowadays.
This is a genuine question, i am not that knowledgeable about this subject.
Would it really be an option to keep renting just because the prices might go down in the future?
With renting also comes the downside that you can't really make it your home (drilling holes, etc and making other investment).
I see, i hope for our sake that the prices will go down soon. I am not buying anytime soon but this little conversation did give me some insight, thank you.
Houses still sell usually in a day or two, and the median time on market (in the US at least) is lower than it was recently, so the price isn't going anywhere down.
[https://fred.stlouisfed.org/series/MEDDAYONMARUS](https://fred.stlouisfed.org/series/MEDDAYONMARUS)
Also, the word *crisis* overstates the problem, I think, in the sense that homeownership rates are where they were in the 1950s, and the only higher times have been during actual bubbles. It's always been relatively difficult for young adults to get a house, without a leg up from family or something like GI benefits.
To be fair, rent prices are super jacked-up. I won't say *inflated* because very little of that is to keep up with rising prices generally, it's just landlords raising prices to maximize revenues, often illegally colluding with local competitors to do so. But people still rent at the higher prices, so that keeps going.
Waut so you put the house on the market in the US and its normal to have a buyer two days later?
People at Work (uk) have beeb telling me theirs has been on the market for months which I think is normal here
It's not a bubble. It's based on real demand and a lack of supply. It will "crash" when we build more houses.
E: It's objectively not a bubble, and nothing you say will ever change that. No, saying it's not a bubble doesn't mean it's a bubble. That is a sincerely mentally ill assertion. And no, it's not true that you can't know it's a bubble until it bursts. You absolutely can, and we know it's not.
If you are too much of a child to accept facts that dispute things you badly want to believe, you do not have value in a discussion forum.
But we will never build enough houses because developers will stop building the second it stops being profitable.
The only way to stabilize housing prices is to stop treating housing like an investment.
>But we will never build enough houses because developers will stop building the second it stops being profitable.
It can be profitable to build houses and also reduce prices if you legalize density.
You would need to substantially tank land values in order to make up for lower profits. Developers and major corporations already own the vast majority of valuable land in desirable areas and they will never take a loss selling that land at a lower price than they bought it for.
Good land is a limited resource and there is a maximum to how much density you can fit somewhere determined by engineering and servicing constraints, so it's impossible for someone to "disrupt" the market by flooding an area with housing in the same way that you can with other goods. Housing is not a truly elastic good and therefore regular supply/demand thinking doesn't work to reduce prices.
>Good land is a limited resource and there is a maximum to how much density you can fit somewhere determined by engineering and servicing constraints
It's determined primarily by laws. If you're from North America, I guarantee that your city has, or at least until recently had, single family zoning.
The way you increase the housing supply and also developer profit while lowering prices is simple. Let me give you an example.
I own a single family house. Someone comes to me and wants to buy it for $1M. But then a developer comes along and proposes a deal. They'll buy the land from me for $2M, build a 6-unit small apartment building, and then give me one of the units. They then sell the other units for $750k each.
I've made $2M and still have a house in the same location as before.
The developer sells the other 5 units for a total of $3.75M, which is more than the $2M they spent on the land (I know there are construction costs, but they're not that high).
And the 5 people buying those apartments? They each get housing for 3/4 what it would have cost them to buy a sfh.
Everyone wins. The reason this doesn't happen is because we banned it. We fucking made obviously good deals illegal because of shadows and "those people" and property value Ponzi schemes, and now we're paying the price for it.
The major issue with this line of thinking is that it is basically laying the blame for all ills at the feet of average working people. Notice how these density projects are never proposed in the wealthy neighborhoods? It's always lower middle class people that get their home values tanked by this.
I will support this kind of legislation when they require the richest parts of town be the first place large apartment complexes get built.
>Notice how these density projects are never proposed in the wealthy neighborhoods?
They're banned everywhere. Developers are able to convince the government to change the laws when there isn't local opposition, aka when the locals are poor. That's unfair. That's why we should allow density everywhere. Every neighbourhood in the world should be permitted, but not required, to allow dense housing. It totally removes the wealth aspect and just concentrates density where it's meant to be.
>I will support this kind of legislation when they require the richest parts of town be the first place large apartment complexes get built.
Fuck that. Everywhere needs to densify. The crisis is extremely bad and I will not say no to any housing project because, at the end of the day, this is what determines whether I can afford a roof over my head. The status quo isn't great, but it's better than no development.
A bubble is when the intrinsic value of a commodity surpasses its real world value based on speculation.
Houses are investments that are being speculated on right now.
This is a bubble, the solution making the housing market a commodity market not a speculative financial exchange
Unfortunately the cost of building new housing is just as wild as sales prices. Where I work, it's typical to see basic 1200 sq ft 3 bedroom homes (even townhomes) cost between $500k-$600k to build. Unfortunately a lot of the prices of the houses on the ground would probably cost even more to rebuild something similar.
You don’t know it’s a bubble until it’s already burst lol. We might be in a housing bubble. House prices are extremely speculative. Yes, many very intelligent and powerful people believe the housing market is stable as it is, and these same people are so confident they’re cool with loaning people a million dollars over 30 years and they’re confident the market isn’t going to collapse and fuck up their collateral.
That’s all true, but people are wrong all the time. It’s only in hindsight do people talk about this stuff being obvious
You can know you're in a bubble when everyone believes that whatever it is is an investment you can't lose on. When people ask if it's a bubble, odds are it is!
But the gigantic, sloshing, global pool of cash that is a symptom of inequality can keep pouring in for a very long time to sustain a bubble. The US housing market is a magnet for global kleptocrats cash.
I still don't think it will crash in Californua cuz the foreigners will come in to buy them up in cash before middle class citizens can get them. Doesn't matter how high is interest rate cuz they're paying ALL CASH
You're right but for the wrong reason.
There is plenty of supply.
The people who CONTROL the supply won't allow the market to crash. How? By, well...controlling the supply.
The demand is artificial. A large chunk of it is corporations 'demanding' that they control the market. So they buy anything they think they can at some point make money on, even if it means removing it from the supply for the time being. Double whammy: you've out-priced legitimate individuals and families, AND tightened your grip on the supply.
Without regulatory intervention, there will never be a crash.
Just like the stock market isn't going to crash...until we impose stricter regulations on the corporations that are raping us to death. And when you fix that..we lose our retirement.
Hooray America. The system irreparably broken.
The 2008 crash was based on an abundance of ARM loans. When that 5 year mark hit and interest rates soared, everyone tried to sell and the market crashed. That’s not the case right now. No one is stuck with a mortgage they can’t afford. They all bought when interest was low. They aren’t jonesing to sell because rates are high now and they can’t necessarily afford to move into something nicer or bigger. I think home prices might slowly roll back a little but it won’t be dramatic. Just because prices are high doesn’t mean there’s a bubble.
It’s incredibly foolish to believe there’s no way we’re in a housing bubble and it’s totally different this time. You can’t predict how the market will react to major events nor how devastating the consequences might be.
No one can predict a crash. Believe me. It’s not like in ‘07 people didn’t say the exact same thing.
In my non educated opinion, something has to give eventually. The market is absurdly speculative and people are buying houses that easily exceed 8x their annual income.
People are obsessed with the low interest rates, but no one is gonna be happy with their mortgage if their home value starts falling. People panic when housing prices decrease and this can start a death spiral.
What’s gonna cause prices to suddenly drop though? In 2008 it was the adjustable rate mortgages. What is there right now that is suddenly going to cause housing prices to fall?
People needing to assure other people that "it's a bubble when others say it isn't" is the surest sign it isn't a bubble there is.
Keep your investments, folks.
No one should ever buy or sell based on prediction of a market downturn. No one has enough information to try to predict something like that.
I think the housing market will crash in the next 10 years, but that isn’t gonna stop me from buying a house. Crashes aren’t permanent and if you look at something like 08, the market recovers in a few short years.
You just always need to be financially stable. Like, if a market crash would see your life ruined, you need to make some adjustments.
I think it’s less of an issue in non-Anglophone countries or they may have less clout there.
I am sure there are NIMBYs everywhere but it seems they have inordinate veto power over housing and development projects in places like the UK, US, and Canada.
In the latter two countries, single family residences are seen as a major vehicle for generational wealth creation and preservation to the point that suburban dwellers will vehemently oppose higher density projects like apartments, citing the flimsiest of reasons like preserving a “historic” parking or having their views obstructed by a three story building. The real reason, of course, is that they don’t want their property values to decrease due to increased supply.
Places in continental Europe and major metropolises in Asia are already pretty dense, so I think the NIMBYs there have already lost the battle and war.
>The real reason, of course, is that they don’t want their property values to decrease due to ~~increased supply.~~ large numbers of (poorer) people being crammed into their small communities and making it less pleasant to live in and costing them many tens of thousands if they decide to leave.
FTFY, why would anyone be OK with some external council or body destroying much of what they've worked to build up over decades?
Most people are fine with more houses in general, they just don't want low budget ones crammed into areas that they previously paid a premium to move into to escape from the social ills that comes with that.
when you think about it, homes are - outside of market dynamics like lack of supply and exogenous factors like population growth - pretty lousy stores of wealth tbh.
they require maintenance costs, they’re highly illiquid, they have associated fees (like HOA or condo maintenance), they require renovating from time to time, and they’re taxed in cash each year. i get why they’re currently used to build wealth, but when you look at it a priori they don’t make a ton of sense compared to financial instruments.
that’s to say that points 1 and 2 drive their value. home ownership is important in many - but not all - markets because it’s a hedge against rent hikes, but i don’t quite understand why they’re such new popular investments compared to equities which return 10% compared to 6% per annum on average.
Because you still need to live somewhere while investing.
You can either pay to rent from someone else and invest your remaining money, or you can pay a mortgage that is also building equity while investing your remaining money.
bottom paragraph addresses that, but not true for all markets. nyc, for instance, has a substantial portion of the housing stock that’s rent controlled or stabilized and usually indexed to 3% increases per annum max. you’re effectively paying a mortgage bc you can’t get kicked out, so your capital’s better deployed elsewhere if you’re looking for investments.
I agree that is not the best vehicle, but millions of boomer and other generations’ brains are irreparably broken into believing that. So unless that changes, we are probably stuck in this holding pattern of less/lower housing development.
Interest rates caused this problem. People aren’t selling because it costs too much to purchase. This creates a lack of supply and thus higher and stalled prices.
I honestly do not know where this is all going but I’ll take my chances by NOT purchasing a home in this environment and just saving the difference for retirement or for the next recession cycle whichever comes first
Us too. 20 rejected offers over asking last year, another 20 this year. We have several times a down payment, next year (or year after) we would be cash buyers but this shit just isn't worth it. Would rather let that cash earn enough interest to pay our rent and travel.
There is not a global housing crisis.
There are places where houses sit empty and no one will buy them. And there are places where housing prices are very high.
The problem is not a lack of housing. The problem is a lot of people wanting to move to cities, and certain cities in particular.
As long as more and more people keep moving to the most desirable areas the prices in those areas will keep going up. It is simple supply and demand.
That's like saying "there's no drought. There's water somewhere on this planet"
Mismatch of where housing is and where people want to live is a form of imbalance. If the imbalance is so large that societal issues are popping up, then we have a housing crisis. Evaluating housing stock as a global (or even regional) commodity is utterly pointless.
In fact, both the empty homes and the expensive home you mentioned are symptoms of a housing crisis. Having homes where no one wants to live means that previous investments ar not yielding value due to the said mismatch.
There are reasons people dont want to move to undesirable places. Most middle-class people require some form of employment, and there aren't many jobs available in non-metropolitan areas that have industries to support areas like manufacturing used to do in many places.
Service positions have also mostly been outsourced and the ones that haven't have been highly automated and consolidated so that where it used to be one rep per client, one rep now manages up to 5 clients simultaneously.
What is the product or service that a population uses to drive its economy when most products and most services have been handed to other economies?
There needs to be a reason to be in a place. It can't just be "cheap housing" because you can't pay for cheap housing with no job.
Let me explain you why houses sit empty in some places: they have probably close to no infrastructure, as in probably just tap water & electricity, a barely mantained road and some kind of shitty internet. Even amenities like garbage collection become an issue in such places.
Who knows what kind of services (shops & all) and crime rates from burglary and worse.
You do NOT want the market to crash.
Yes, home values go down. But here's what that really looks like:
Values go down. Interest rates go up. Fixed rate mortgages stay the same, but those folks can't sell their house because they're now underwater. ARM go up, and those folks can't sell because they're underwater. They struggle to make their increased payments. Foreclosures go up, which makes values go down more. The economy takes another hit. Businesses start getting their underwear in a wad and lay people off. More people lose their homes. More foreclosures mean lower values. More unemployment. The next thing you know, Wells Fucking Fargo gets a giant bailout just so we can levelset shit again.
If you're lucky, you keep your job. You're still not gonna have cash in hand to beat out the investors who are gonna snap up the foreclosures.
No, what you want is for lumber and construction prices to stabilize. Most of the housing crisis today is because there isn't enough new construction. Prices went way up because of supply chain issues and they're just starting to come down. Once those level set, it will start to even out some.
My wife and I bought our house in late 2009, at the bottom of the market from the 2008 crash. It blows my mind that our house value is now over 250% of what we paid for it! I mean inflation is one thing, but this is ridiculous! I love our house but there's no way I'd pay that much for it!
Yes, the housing market will definitely crash. How and when are unpredictable.
A World War or some other population collapse would make houses cheaper pretty quickly. Another Great Depression would too. Granted, you probably would not like if any of these things came to pass…
You’re asking if houses are ever gonna be affordable for you personally without some major worldwide tragedy that would supersede a housing collapse, and the answer is probably not, but anything can happen.
The factors that have lead to soaring housing prices are unlikely to be easily lessened in the coming years. There are many reasons for it and the solutions face massive opposition.
Areas with very expensive housing need higher density housing, but current homeowners despise that solution. There’s not really any other way.
Yup if job market crashes say goodbye to your credit for the next 10 years. Being flat on credit obligations is smart anyone wants to invest in a house during any crash and is lucky enough to have continuous income during any major industry workforce downsizing
I don’t know much about the Turkish market. I don’t expect there’s going to be a housing crash in the United States anytime soon, although prices might go down somewhat. Ultimately, the issue here, which might be the same where you live, is a lack of supply.
Hope you saved enough for either the down payment or 1 year of no employment and don't depend on your 401k for retirement if you're hoping for a market crash.
Probably not. People need housing so we are at their mercy.
Like I had to turn down a job offer yesterday because there's no affordable housing anywhere near there. Closest place was twice the average price and it was ugly as hell, just a grey block. Location was trash, too much traffic passing by and not close to amenities. Rooms were tiny, no garage, no garden. But someone will buy it because we need somewhere to live.
It's not the prices that are the crisis, it's the fact that people are not being paid enough for their labor, and thus home ownership becomes unaffordable.
Until the underpaid are successful in getting more from unimaginably greedy companies, there will always be talk of "when's the crash". Boggles the mind that we're hoping for a crash while CEOs and Executives lay off thousands of employees and stroll home with multimillion dollar salaries/bonuses. Completely successful distraction techniques.
Edit: you can square this take with the insane rush in 2021 for houses when interests rates were at all time lows.
A crash is likely, but all it will be is negative growth vs inflation, so if inflation is 3%.it will be an extended period of 0-1% growth.
There is going to be no 20% yearly dip
In my area in the Carolinas we had a rapid influx of people starting at the pandemic 2020-2021. Bunch of New Yorkers and Northeasterners moved here to get away from the big cities, and they ruined the housing market. Overpaid for everything and prices are still way too high for normal folk.
My house in suburban Ohio was barely $90,000 when built in 1993. Today it's worth $700,000. It's a **highly desirable** Cincinnati suburb with excellent schools, and it's completely built out. Most open houses here get 100 people visiting and 2-3 dozen offers. A 5 bedroom house like this in certain Los Angeles or Long Island neighborhoods would be $4 million.
I don't ever see that changing. Even when supply is built, it's dozens of miles out in the sticks, where people don't want to be.
For the housing market to crash, you would have to see so many people willing to eat a massive loss on their mortgage just to sell. And people won't do that unless they can't afford their mortgage. Such as people have lost their job.
If that happens, we are talking a global depression that will hurt millions of people, including yourself. So you won't be able to take advantage of the crashing house prices anyways. You won't have a job most likely.
Yes. Crash is a vague term, but there will definitely have a significant adjustment.
Before every crash there are people who say this time it's different, and every time they're wrong. When there's sufficient speculation on an asset, the clock starts ticking. Housing is no exception. I've lived through a half-dozen of these going back to the '80s, and the fundamentals that make for a bubble/crash cycle haven't changed. A lot of short memories on here. You have to think in decades.
The housing market cannot crash.
Here's the problem.
I bought my house for $1. Am I going to sell it for $.50?
No, I am going to sell it for $2.
So you see, everyone who buys a house has the expectation that they will eventually sell that house for more than they paid for it. You'd have to be really desperate to sell it at a loss (or else there's some objective reason the price is going down, like environmental factors).
If no one is selling their houses for less, the market will never crash. The only way that we'll experience a crash where millions of people are selling their homes for a loss is if the economy was in such a freefall that people couldn't afford to live unless they sold their houses, but at that point, we're probably looking at a societal collapse.
You just bought a house for 500,000 dollars. 3 years from now, you need to move for work. Are you going to list your house for less than 500,000 dollars? There's your answer.
I'm assuming nothing other than the fact that most people prefer to sell a home for equal to or greater than their original purchase price. Sure, exceptions exist, but that is a big part of why home prices usually only go up.
Yeah you're right. Nobody will ever sell their house at less than the purchase price. The market has never And will never crash. Everyone will always what for a buyer that allows them to sell for more than the purchase price 🤡
It might but I think about it this way, at least in the Bay Area where I live, there are soooo many people waiting on the sidelines for interest rates to drop even slightly that the second they do they'll pounce
Well atleast in Bay Area many people have gigantic incomes so it is probably not that bad compared to other areas there wages are low and prices are high, like much of europe.
In the US, There is a theory it won't in the near future. Mortgage rates are high right now, but there is an expectation of interest rate cuts later in the year. That can trigger a higher market as ppl are waiting for lower rates.
The inflation rate in your country is crazy high. The prices of things on the market, like housing, adjust to that. Your should demand that your salary also adjust to inflation if you haven't.
Comparisons to other nations like the U.S. or E.U. don't make sense because the issues in their housing markets are likely different.
Land is a limited resource but population is growing and people also get richer. So no, even if there are short-term corrections, housing (especially in cities) will always become more expensive, much like the stock market.
Short answer: probably not. Housing market standing still for a while, while inflation runs amok is probably the "crash" these days.
A clear buying opportunity will basically never look like a "clear buying opportunity", whether in real estate or other business. That much I'm fairly sure of.
However, I'm real estate, I'm personally going to sit out for a good while. Depends on a lot of factors of course, as always, but I don't trust the trends that raised house prices to where they are to hold for the next decades.
Currency crashed instead of home properties. Likely commercial properties crash in the USA means housing crashes elsewhere in the world because USA has a ton of 30 year fixed rate mortgages and everywhere else it is similar to our commercial real estate market where it's only fixed for 5/7/10 year then it becomes variable.
Well they are continuously coming due to variable interest and the interest rates are blasting off again. With layoffs or only getting lower paying jobs, people are getting pinched while living costs are soaring.
The USA also did something crazy which is lower the interest rates so everyone refinances to a lower rate then monetarily policy was to increase it very fast.
Demand is still high. It would take a lot of convincing not to invest in real estate. Like everyone just decided not to pay their rent or they all moved to the woods and build their own homes. Or suddenly every build project completed at the same time and no one wants anything older than 10 years that's not renovated to modern standards of the area. Or even just something as simple as materials suddenly being really cheap then the forecast for cheap homes will drive demand down now because of the forecast 10 years down the road due to cheap new homes.
I expect it will crash, (eventually) which is why I sold now and will re buy later. Again. I’ve done this a couple of times with a couple of properties. Housing prices are like waves you ride. lol
I can answer the question on why we aren’t lowering prices. Why on earth would I sell it for less than people are willing to pay? Which is about 3 times its worth in my humble opinion but worth is dictated by the buyers and I’m not stupid .
The home market is locked into a vicious loop atm. Rents are high, rates are high, prices are high. Virtually the only reasonable home purchases are people selling their house and buying one without taking out a loan. People aren't selling because it's too expensive to move out. If rates stay high long enough, you'll see people who bought in at the high rates selling, as well as people who bought at the low rates having enough equity that they're just buying houses outright. Alternatively, big drops in rental prices, which you'd see in a job market collapse as renters lose jobs and either need roommates or to move in with families.
The bubble here isn't nearly as speculative as the great recession, the prices aren't even nominally that much higher despite inflation, and interest only loans aren't fueling the bubble.
In general, almost all of the houses’ value rises over time as it’ll rise along with inflation. You can say your house gets more expensive or you could say your money is worth less. It means the same thing. Now, you need to add to or subtract from whatever the supply and demand is in whatever location you’re looking to buy. Some places will stay in demand until long after you have died, other places are never in demand.
I honestly feel like a lot of our problems stem from surpassing comfortable population levels. But those conversations are always fraught with landmines.
The unemployment numbers needs to take off in order for this to happen
As along as there are jobs available people will have 5 jobs to make it work
When there are no jobs available anymore or when people need 10jobs to survive that’s the beginning of the end
Ever? Yeah. Eventually, all markets will go to zero when mankind goes extinct / the sun eats the earth.
In the foreseeable future? Hmm, kinda doubt it. In part because there is a large and powerful bloc (homeowners) who do not *want* the housing market to crash, and who can exert political pressure on governments to prop it up.
Ditto stock markets.
There is no balloon, no bubble. There is still massive amounts of pent up demand for housing. The slightest dip in rates or prices will send it to the moon again and again.
Every country is different and within countries there are submakets, but go look at the data https://tradingeconomics.com/united-kingdom/average-house-prices for example
They won’t come back down to pre 2020 prices without something huge happening. IMO something that could cause a global housing crash would likely make it to where hopeful home buyers still won’t be buying. My area in FL has definitely seen some slow downs and price drops, but still easily double what it was in 2019.
The simplest answer is no, because the housing market is typically the largest income for governments and is therefore too important to maintain status quo in days when government debt is skyrocketing and expensive wars are looming. Governments issue loans to banks which operate as businesses, therefore it is the banks goal to maximize profits while also being able to pay the central bank (the government). This whole scheme is so important that its the sole reason banks went under when the government raised rates - banks had a lot of money out as low fixed mortgages but when the central bank changed the interest they were insolvable as a business and couldn't pay on their debt *to the government*. On this note probably the largest threat of a crash comes from the government continuing to raise rates due to how that impacts banks - but history has shown that the government is willing to "bail out" (forgive debt) for the biggest boys so it can't really be considered a risk anymore.
Since 2008 the government has actually created a specific agency to make sure those conditions (bad mortgage loans to people) could not happen again. So the situation of the 2008 banking crisis cannot occur again.
Besides that there are still many people that qualify for expensive mortgages and housing sees healthy demand. Coupled with NIMBYism zoning/construction issues persisting an ugly scenario of supply restriction prices will likely stay high.
Crash no, at least not anytime soon. While prices shot up so did inflation and the fed is drastically trying to slow inflation but it’s highly unlikely we’ll see deflation. So I think prices are here to stay, some markets will see bigger dips than others
Of course homeowners won’t lower prices - neither would you, if you owned one, and it was worth a certain amount in your market.
Everyone loves capitalism until they’re getting fucked by it.
And I’m no expert, but a lot of real experts don’t actually think this is a bubble, and that the extraordinarily low interest rates in the last decade were the anomaly.
Population increase creates demand. Earthquakes or similar events that make a location unstable and unappealing will deflate values for sure, and in fact tie people to stay in places that suck
What is going on right now
(high housing market, high interest, low supply) it’s similar to what happened in the US late 70s early 80s it was good for a minute but it lead to a recession that lasted for about 16 months and had years of issues after.
I mean it may crash tomorrow or in a couple years but the longer it goes it’s going to hit hard and people will mill themselves from the losses
Wait another two or three generations and see. Many people buying or have bought, had help or bought long ago. Wait until the great grandkids come along and attempt to buy these multi million dollar houses.
In the shorter time, just read many of the subs on how much many have increased upon renewal, increase of taxes or HOA fees. Here is an interesting article from 2023.
https://www.mpamag.com/ca/mortgage-industry/industry-trends/how-severe-could-the-upcoming-mortgage-renewal-shock-be/466730
Many cities have been under building for decades, there aren't enough houses for the populations in many cities. This is causing overcrowding and high prices, which will continue as long as supply is lower than demand.
If banks were to stop loaning out the money, then houses will only be accessible to people with the cash to pay for them. Prices would for sure be lower at that point, even with all these cash holders swooping in.
Houses have turned into a hotel business with airbnb and booking. As long as that is the case the problem will persist because families now compete with businesses and the business will always win.
Housing prices seems to vary a lot based on location, especially certain cities can have very overpriced markets, so avoid those and look for houses in cheaper locations if you have the ability to do so.
This isn't the same as 2008. There is real demand for homes and a lack of supply. Nothing is going to crash because you have a lot of people waiting for the right opportunity to purchase. We need zoning laws to change, more dense housing to be built, and for the starter home to be a thing again but asking corporations to make less money is heresy apparently.
Keep in mind that the "homeowner" in this statement is usually synonymous with "regular working class citizen".
The answer to the question; "Why won't millions of regular people vote to fuck themselves?" should be obvious.
Its overpopulation. The best locations are built first, meaning adding more housing always yields diminishing returns. So past the "settlers" period, any population increase will decrease housing affordability in any given location.
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as long as there are still people lining up to buy houses, the prices won't come down.
For real. OP’s comment that “Homeowners are dead set on not lowering prices” is laughable. Why the fuck would anyone lower their selling price if someone else was willing to pay it?
How could you lower your price? You have a mortgage to pay off and probably want to buy another home somewhere else. You need that money.
My wife and I are looking for another house. The house we own is worth about 50% more than what we bought it for, 10 years ago. However, anything that we want to buy is also worth that much more than it was 10 years ago, AND interest rates have gone up. It's not like we're making any more money! We will need to get the most we can out of our old house, we're not a charity.
Yeah this is really only a big benefit if you have a spare house to offload
people (from other places in this world) can correct me, but I would say the housing market isnt dominated (at all) by humans who have a second home to offload. the market is dictated by companies that are buying real estate, hoping for a little growth in prices, to make a lot of money on their investments (powered by banks that rather loan money to companies with assets, than individuals with a dream of owning a home).
Exactly the issue with my wife and I. We don’t want to live here when we retire but where the hell could we even afford to move??
I know, right? We already live in a LCOL area. Everywhere I want to live is so much more expensive. She never wants to move from this area so that's another issue.
I had realtors come around my neighborhood about a 2 years ago and they were trying to convince people to sell their homes to them. I laughed at them, I bought my house at the end of the last recession, 3% interest in a house that sat on the market for 6 months, my mortgage is about $900 a month. I asked them if they could match that for a house that is the same size or bigger and with the same property or bigger. They walked away shortly after It sucks because we need a bigger house, we have 3 kids now but we can't afford more. We would like to do a addition and it's hard to use the equity because interest it to high right now. We're locked into our home till we make more money
I have to pay 3 times more than the price my house is worth now - to buy a newer home in the same size! And my house is only 23 years old and was fully renovated 4 years ago! It’s weird times… Norway btw.
This is the problem that I think could break the market; we're reaching a point where people are trying to sell, but their target demographic has been priced out. If my budget is 1-2 million, I'm not moving into a small 3 bedroom starter home built in the 60s. I'm really just operating off vibes here, but my city is composed of most of these small family homes, and every week homes get listed and delisted at outrageous prices. the demographic of the whole city leans older, which means most of these people are listing homes to either move or retire. Almost every other home in my neighborhood has a for sale sign, but no one is making a move and these houses just get delisted and put back up for 10,000 less a month later. There have been some homes up for 3 years now, in a relatively desirable neighborhood to live in. It's not the fault of the homeowner, because they're just selling it for what the market says it's worth. No one who would want to live in this area can buy though, so what's going to happen when boomers start passing and can't sell those homes beforehand? Idk, it seems like a real problem that could screw everything up in the next 3-4 years.
There's a massive housing shortage that stems from the great real estate crash of 2007. It's exasperated by a shortage of skilled labor, a shortage of land in desirable locations, and materials shortages in metals and wood. Housing prices will stay high until demand starts to outpace supply, but with a large shortage that's over a decade old, it won't be soon.
How dare those capitalist homeowners! Selling their home for what someone is willing to pay!
>Why the fuck would anyone lower their selling price if someone else was willing to pay it? But that's not the only way homeowners can oppose lowering prices. For example, they can oppose new development so that supply becomes scarce which makes their own property go up in value. Homeowners don't even need to do anything for this. In most western countries there is an implicit agreement between homeowners and politicians that home prices must always go up. Look at the 2008 housing bubble. After it happened, everyone agreed that it was a housing bubble. And yet, housing prices today are far higher than back then. How do you *recover* to a bubble? It's because housing prices are so linked to so much of our economy that it's impossible for them to go down significantly without also damaging a lot of the rest of the economy. The best we can hope to do is to slow down housing prices to below inflation. But a sustained reduction in price? Never happening. Politicians and their voters won't let it. Governments will pump untolds amount of money into their economies before they'll accept sustained and significantly lower housing prices.
My friends in the neighborhood (all the homes were built from 2014-2016) and I laughed when we saw the (exorbitant?) price a neighbor was asking for their home. Then it went under contract within 2 weeks. Somehow that fell through. It then went under contract again with another buyer within 3 hours. They close next week. Another neighbor listed their home for a similar price (within 2%) about two weeks ago. It looks like they're under contract now as well. Truth be told, we're rapidly approaching the price where I once jokingly said I'd immediately sell my home if someone offered me that much - effectively double what I paid for it. Point being, I really thought prices had at least plateaued, but evidently, at least here, they are still going up like crazy.
>Truth be told, we're rapidly approaching the price where I once jokingly said I'd immediately sell my home if someone offered me that much - effectively double what I paid for it. And then where are you going to move? Seen plenty of people with this mindset, but if you aren't trying to significantly downsize or rent, then there's no point.
I don’t always plan out my jokes well enough to account for details like that… But that is absolutely the problem, isn’t it? If I move I have to find somewhere else. Speaking of, another “neighbor” a few blocks away decided to capitalize on the market and sold their home in late 2021 with the intent of renting until “home prices came back down to Earth.” I don’t know where they are right now, but I’ve gotta believe they at least sort of regret that choice. I mean, Zillow is Zillow so take this with a grain of salt, but their current “Zestimate” is 18% higher than the sale price in October 2021 ($181/sq ft -> $213/sq ft.) But with that said, their 2021 sale price was double what they paid for it in 2011, so no one needs to feel *too* sorry for them.
Yeah I completely agree. The US is short roughly 4 million homes at the moment, and unless something drastic happens the worst we will see is these temporary lulls in the price increase.
downsize, rent, or move markets. Retirees cashing in their HCOL houses for a cheap place in Nevada benefit from selling.
I just don’t understand what fundamentally changed between 2020 and 2023. I thought Covid killed a lot of people? Is there really exponentially more people that came of home buying age in 2021? Also the resilience of home prices despite high rates going on 2 years now. Since the fed kept rates low and thus caused prices to go up, and were now stuck in this, should the fed just lower rates again? It’s not like prices or inflation are going down anyways.
At the most basic level, its supply and demand. There is always at least a bit of a demand because people need to move for one reason or another (bigger home for more kids, moving to a new city, whatever.) We’re currently heading into peak “moving season” right now as people tend to move more often during the summer. However the supply side of things has been problematic for two key reasons: 1) a lot of people in the USA are “trapped” in their current homes due to the historically low interest rates offered in and around 2020. Now, being “trapped” can be a good thing or a bad thing depending on whether or not your home fills your needs or not. Regardless, people cannot afford nearly as expensive of a home with current interest rates as they could have with lower rates. A rough example is that a $300,000 mortgage at 7% or a $490,000 mortgage at 2.75% would both result in a $2,000/month mortgage payment (P&I anyway.) So people that have those sub-3% mortgages locked in aren’t going anywhere unless they’re downsizing or HAVE to move. So the effect of this is that there just aren’t as many people selling homes as there would be pre-2020. 2) Covid caused a shortage in housing because no one was building houses for a while - and when they wanted to building supplies had increased dramatically in price. So those new homes are all more expensive too. The question as to why the Fed can’t/wont raise interest rates is an entirely different discussion, but you’re correct: lowering interest rates to 2020 levels would definitely “fix” some of the housing issues. I mean, it would cause a LOT more problems, but housing would definitely be cheaper.
The housing market crashed in 2008 because: 1. Housing values kept getting inflated. 2. Banks kept offering bad loans. 3. A lot of people defaulted on their loans, thus dripping a bunch of houses into foreclosure. All the buyers in the world can't fix these conditions.
Good thing private industry home purchases have soared the past couple years. 🫥🫥🫥
This is a political red herring. Private equity owns a vanishing small % of the house market. The legit problem is that most hones are owned by individuals with a mortgage and they can't sell that home for less than the loan value and don't want home prices to crash because most of thier net worth is in thier house. Wishing for millions of regular people to lose all thier money is never going to fix things.
[https://www.peoplesworld.org/article/wall-street-hedge-funds-are-buying-whole-neighborhoods-driving-up-home-prices/](https://www.peoplesworld.org/article/wall-street-hedge-funds-are-buying-whole-neighborhoods-driving-up-home-prices/)
in america it was the companies buying up all the available inventory that created this crisis. the fact that government just stood by and watched as our livelihoods were stolen from us should speak volumes.
That's not true. Plenty of areas have minimnal corporate ownership of houses and still have some of the highest prices in the nation- look at the Boston metro.
Agreed. I find often times it’s the people with multiple houses that are the problem. They claim not everyone wants to own and that’s how they justify being landlords but while that’s true there’s definitely more people who want to own than available supply.
Very few individuals own multiple homes and when they do own multiple homes those homes are usually far and excess of what the average American is looking to buy. If they're more typical homes than it's usually only two or three total and The second home is often a place where you don't want to live permanently, like tourist places or a cabin in the woods. Even people becoming landlords owning a single extra home aren't really the problem.
I don’t mean mansions and waterfront properties. I know lots of people who are upper middle class and own regular smaller homes they rent (often times these homes were first homes they outgrew). In my area there’s lots of regular suburban houses for rent by owner…not corporations.
In the town I went to uni, there's a single dude who owns *dozens* of single family homes and duplexes that he rents to college kids. And he's a slumlord. And a racist. My hubs (then bf) and I rented a two bedroom from him initially with my sister. We're all white. He overcharged but whatever. Then hubs and I rented a duplex with two friends, both POC. Same landlord. He accused them day one of *stealing the blinds*. There were no blinds, lol. Also refused to fix our AC in the middle of a TX summer until my mom emailed him threatening to take him to court (we were all like 24 years old). Absolute nightmare. Never again.
You mean foreign investors coming in to buy up our houses so they can flip for more money
The real correlation is with long-term under-investment in creation of new housing, which often goes hand-in-hand with restrictive zoning that prevents new housing from being built (especially anything denser than single detached houses on large lots). There's only so much land that's conveniently located near desirable cities, so if you don't allow people to build up, and building out is undesirable as no one wants to do a daily 3 hour commute, then prices will just go to the moon.
Even if you allow people to build up, building up requires more effort the higher you go. And so building up does not make housing affordable either. No city has made itself affordable through building up. The only solution is to stop growing the population.
Developers will stop building up when it no longer makes financial sense to do so. That point is significantly past the current limit in detached single family zoned areas. Also you're underestimating how damn expensive land is. It's much cheaper per housing unit to build something like 8-12 units over 3 floors in a single building over the same piece of land than to build a single house on it. Height isn't THAT much more expensive until we're talking about real skyscrapers.
Stop! You’re making too much sense!
I live on Cape Cod, and corporate investment and AirBnB have destroyed the local housing market for locals. Corporate investments bought tons of houses and only rent them as short-term summer vacation rentals. Same with many private owners, many from out of state, who buy houses just to rent them for the summer. Martha's Vineyard and many towns have been putting limits and restrictions in place. But the damage has been done. Trying to find ANY place to live, let alone buy a house is incredibly hard.
Boston has a huge shortage of property. Probably because it's packed as tight as can be at this point lol
Not sure if they have this term where you live but "mom and pop investors" are a bigger factor than corporate ownership. Individuals with enough capital that are hoarding housing stock to use as investment properties, usually by using the equity from the houses they bought when prices were cheap. They buy up as much homes as they can and rent them out at an inflated markup - using the renters to pay off their mortgages and pocketing the rest. Or they'd rent the place out at an Airbnb. There are SO many small-time investors like that in my city.
Corporate owned is corporate owned owning 3+ homes for commercial use limits the available inventory in an already tight market. 30% last year were in this type of situation. That’s a real problem
vote for ME then!
Yeah, this is one of those things you hear constantly on the doomer / financially illiterate memes subs but I’ve never seen anything that compels me to believe it.
https://www.housingwire.com/articles/no-wall-street-investors-havent-bought-44-of-homes-this-year/
They didn’t buy up 44% instead it was only 30% 🎉
Exactly. There is no scenario in which housing prices crash and suddenly everyone can buy a home: it will crash because people can't buy homes for whatever reason. I grew up in Vancouver, for the past couple decades people have been waiting for the housing market to crash. I've even known people who sold their homes and started renting with the idea they would buy back in after the crash. All they did was fuck themselves.
Companies not people. 16 thousand homes in the atlanta area are all owned by 1 company. There will be no homes for new families at this rate. Let’s face it they are empty and most likely a way to launder dirty money.
No. It'll stay stagnant longer instead of correcting. Then, it'll continue to rise. If the housing market crashes, we all lose. Therefore, it'll be propped up until it picks back up on its own.
Tell that to people in 2008
The present market conditions aren't even close to the same as 2008
People love to shout "2008" while ignoring all of the systems and measures put in place to ensure 2008 doesn't happen again. I feel like most of the people cheering for this didn't live through 2007-2010, or were too young/disconnected to remember.
Qhat watching the big short once does to a mfker
Yeah, they were kids. They’re assuming their financial situation will be the same except housing will be cheaper. Most people didn’t come out ahead after the Great Recession. My salary was cut by 10%. I was lucky to keep my job. Unemployment and homelessness were higher than they are now.
They’re assuming everyone is as dumb as them and the same institutional failures happen over and over simply because they don’t understand them. Truth is. There’s always some new institutional failure to be worried about that we aren’t aware of, but you’re right, we won’t do 2008 all over again.
Can you expand on why we all lose? As in, it would cause a nationwide economic crisis like 2008? Can’t it (relatively) slowly correct itself without causing a crisis?
If it corrects, that means the prices go way down. Banks give loans based on current value. So, say the bank gave a $300k loan for a $300k house. Now, that house is worth $150k instead of $300k. The bank could be on the line to lose the difference in value multiplied by every single loan given out. That would set almost all banks in default, and we'd be in the next depression. There are no winners there. Guess who will be footing the bill to bail them out....
The prices wouldn't be that high if there were no people buying them.
Do most people really have a choice about buying a house or not? Renting is about as expensive nowadays. This is a genuine question, i am not that knowledgeable about this subject.
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Would it really be an option to keep renting just because the prices might go down in the future? With renting also comes the downside that you can't really make it your home (drilling holes, etc and making other investment).
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I see, i hope for our sake that the prices will go down soon. I am not buying anytime soon but this little conversation did give me some insight, thank you.
Corporations have deep pockets
It won’t crash until 6 weeks after OP closes on a new house. As long as OP doesn’t buy a house, prices will stay high and maybe go higher.
Houses still sell usually in a day or two, and the median time on market (in the US at least) is lower than it was recently, so the price isn't going anywhere down. [https://fred.stlouisfed.org/series/MEDDAYONMARUS](https://fred.stlouisfed.org/series/MEDDAYONMARUS) Also, the word *crisis* overstates the problem, I think, in the sense that homeownership rates are where they were in the 1950s, and the only higher times have been during actual bubbles. It's always been relatively difficult for young adults to get a house, without a leg up from family or something like GI benefits. To be fair, rent prices are super jacked-up. I won't say *inflated* because very little of that is to keep up with rising prices generally, it's just landlords raising prices to maximize revenues, often illegally colluding with local competitors to do so. But people still rent at the higher prices, so that keeps going.
Waut so you put the house on the market in the US and its normal to have a buyer two days later? People at Work (uk) have beeb telling me theirs has been on the market for months which I think is normal here
It's not a bubble. It's based on real demand and a lack of supply. It will "crash" when we build more houses. E: It's objectively not a bubble, and nothing you say will ever change that. No, saying it's not a bubble doesn't mean it's a bubble. That is a sincerely mentally ill assertion. And no, it's not true that you can't know it's a bubble until it bursts. You absolutely can, and we know it's not. If you are too much of a child to accept facts that dispute things you badly want to believe, you do not have value in a discussion forum.
But we will never build enough houses because developers will stop building the second it stops being profitable. The only way to stabilize housing prices is to stop treating housing like an investment.
>But we will never build enough houses because developers will stop building the second it stops being profitable. It can be profitable to build houses and also reduce prices if you legalize density.
You would need to substantially tank land values in order to make up for lower profits. Developers and major corporations already own the vast majority of valuable land in desirable areas and they will never take a loss selling that land at a lower price than they bought it for. Good land is a limited resource and there is a maximum to how much density you can fit somewhere determined by engineering and servicing constraints, so it's impossible for someone to "disrupt" the market by flooding an area with housing in the same way that you can with other goods. Housing is not a truly elastic good and therefore regular supply/demand thinking doesn't work to reduce prices.
>Good land is a limited resource and there is a maximum to how much density you can fit somewhere determined by engineering and servicing constraints It's determined primarily by laws. If you're from North America, I guarantee that your city has, or at least until recently had, single family zoning. The way you increase the housing supply and also developer profit while lowering prices is simple. Let me give you an example. I own a single family house. Someone comes to me and wants to buy it for $1M. But then a developer comes along and proposes a deal. They'll buy the land from me for $2M, build a 6-unit small apartment building, and then give me one of the units. They then sell the other units for $750k each. I've made $2M and still have a house in the same location as before. The developer sells the other 5 units for a total of $3.75M, which is more than the $2M they spent on the land (I know there are construction costs, but they're not that high). And the 5 people buying those apartments? They each get housing for 3/4 what it would have cost them to buy a sfh. Everyone wins. The reason this doesn't happen is because we banned it. We fucking made obviously good deals illegal because of shadows and "those people" and property value Ponzi schemes, and now we're paying the price for it.
The major issue with this line of thinking is that it is basically laying the blame for all ills at the feet of average working people. Notice how these density projects are never proposed in the wealthy neighborhoods? It's always lower middle class people that get their home values tanked by this. I will support this kind of legislation when they require the richest parts of town be the first place large apartment complexes get built.
>Notice how these density projects are never proposed in the wealthy neighborhoods? They're banned everywhere. Developers are able to convince the government to change the laws when there isn't local opposition, aka when the locals are poor. That's unfair. That's why we should allow density everywhere. Every neighbourhood in the world should be permitted, but not required, to allow dense housing. It totally removes the wealth aspect and just concentrates density where it's meant to be. >I will support this kind of legislation when they require the richest parts of town be the first place large apartment complexes get built. Fuck that. Everywhere needs to densify. The crisis is extremely bad and I will not say no to any housing project because, at the end of the day, this is what determines whether I can afford a roof over my head. The status quo isn't great, but it's better than no development.
A bubble is when the intrinsic value of a commodity surpasses its real world value based on speculation. Houses are investments that are being speculated on right now. This is a bubble, the solution making the housing market a commodity market not a speculative financial exchange
Unfortunately the cost of building new housing is just as wild as sales prices. Where I work, it's typical to see basic 1200 sq ft 3 bedroom homes (even townhomes) cost between $500k-$600k to build. Unfortunately a lot of the prices of the houses on the ground would probably cost even more to rebuild something similar.
You don’t know it’s a bubble until it’s already burst lol. We might be in a housing bubble. House prices are extremely speculative. Yes, many very intelligent and powerful people believe the housing market is stable as it is, and these same people are so confident they’re cool with loaning people a million dollars over 30 years and they’re confident the market isn’t going to collapse and fuck up their collateral. That’s all true, but people are wrong all the time. It’s only in hindsight do people talk about this stuff being obvious
*2008 enters
You can know you're in a bubble when everyone believes that whatever it is is an investment you can't lose on. When people ask if it's a bubble, odds are it is! But the gigantic, sloshing, global pool of cash that is a symptom of inequality can keep pouring in for a very long time to sustain a bubble. The US housing market is a magnet for global kleptocrats cash.
Oh look! someone feigning superiority they likely can't earn IRL on reddit. That's new! Fucking child.
I still don't think it will crash in Californua cuz the foreigners will come in to buy them up in cash before middle class citizens can get them. Doesn't matter how high is interest rate cuz they're paying ALL CASH
>It will "crash" when we build more houses. This is what's happening in Austin. There are many new builds, and prices are finally dropping.
Correct. It's not a bubble. It's inflation. It's a consequence of devaluing the dollar by 20-30% since covid.
You're right but for the wrong reason. There is plenty of supply. The people who CONTROL the supply won't allow the market to crash. How? By, well...controlling the supply. The demand is artificial. A large chunk of it is corporations 'demanding' that they control the market. So they buy anything they think they can at some point make money on, even if it means removing it from the supply for the time being. Double whammy: you've out-priced legitimate individuals and families, AND tightened your grip on the supply. Without regulatory intervention, there will never be a crash. Just like the stock market isn't going to crash...until we impose stricter regulations on the corporations that are raping us to death. And when you fix that..we lose our retirement. Hooray America. The system irreparably broken.
It will crash when the corporate investors can't sell when they need to to cover their losses, prices will free fall
People needing to assure other people that "It's not a bubble" is the surest sign of a bubble there is. Starting getting your cash together.
The 2008 crash was based on an abundance of ARM loans. When that 5 year mark hit and interest rates soared, everyone tried to sell and the market crashed. That’s not the case right now. No one is stuck with a mortgage they can’t afford. They all bought when interest was low. They aren’t jonesing to sell because rates are high now and they can’t necessarily afford to move into something nicer or bigger. I think home prices might slowly roll back a little but it won’t be dramatic. Just because prices are high doesn’t mean there’s a bubble.
It’s incredibly foolish to believe there’s no way we’re in a housing bubble and it’s totally different this time. You can’t predict how the market will react to major events nor how devastating the consequences might be. No one can predict a crash. Believe me. It’s not like in ‘07 people didn’t say the exact same thing. In my non educated opinion, something has to give eventually. The market is absurdly speculative and people are buying houses that easily exceed 8x their annual income. People are obsessed with the low interest rates, but no one is gonna be happy with their mortgage if their home value starts falling. People panic when housing prices decrease and this can start a death spiral.
What’s gonna cause prices to suddenly drop though? In 2008 it was the adjustable rate mortgages. What is there right now that is suddenly going to cause housing prices to fall?
People needing to assure other people that "it's a bubble when others say it isn't" is the surest sign it isn't a bubble there is. Keep your investments, folks.
No one should ever buy or sell based on prediction of a market downturn. No one has enough information to try to predict something like that. I think the housing market will crash in the next 10 years, but that isn’t gonna stop me from buying a house. Crashes aren’t permanent and if you look at something like 08, the market recovers in a few short years. You just always need to be financially stable. Like, if a market crash would see your life ruined, you need to make some adjustments.
If NIMBYS (at least in anglophone countries) keep getting their way, the price rise won’t let up.
legitimate question: is NIMBYism not an issue in non-anglophone countries or are you just referring to that acronym only working in English?
I think it’s less of an issue in non-Anglophone countries or they may have less clout there. I am sure there are NIMBYs everywhere but it seems they have inordinate veto power over housing and development projects in places like the UK, US, and Canada. In the latter two countries, single family residences are seen as a major vehicle for generational wealth creation and preservation to the point that suburban dwellers will vehemently oppose higher density projects like apartments, citing the flimsiest of reasons like preserving a “historic” parking or having their views obstructed by a three story building. The real reason, of course, is that they don’t want their property values to decrease due to increased supply. Places in continental Europe and major metropolises in Asia are already pretty dense, so I think the NIMBYs there have already lost the battle and war.
>The real reason, of course, is that they don’t want their property values to decrease due to ~~increased supply.~~ large numbers of (poorer) people being crammed into their small communities and making it less pleasant to live in and costing them many tens of thousands if they decide to leave. FTFY, why would anyone be OK with some external council or body destroying much of what they've worked to build up over decades? Most people are fine with more houses in general, they just don't want low budget ones crammed into areas that they previously paid a premium to move into to escape from the social ills that comes with that.
when you think about it, homes are - outside of market dynamics like lack of supply and exogenous factors like population growth - pretty lousy stores of wealth tbh. they require maintenance costs, they’re highly illiquid, they have associated fees (like HOA or condo maintenance), they require renovating from time to time, and they’re taxed in cash each year. i get why they’re currently used to build wealth, but when you look at it a priori they don’t make a ton of sense compared to financial instruments. that’s to say that points 1 and 2 drive their value. home ownership is important in many - but not all - markets because it’s a hedge against rent hikes, but i don’t quite understand why they’re such new popular investments compared to equities which return 10% compared to 6% per annum on average.
Because you still need to live somewhere while investing. You can either pay to rent from someone else and invest your remaining money, or you can pay a mortgage that is also building equity while investing your remaining money.
bottom paragraph addresses that, but not true for all markets. nyc, for instance, has a substantial portion of the housing stock that’s rent controlled or stabilized and usually indexed to 3% increases per annum max. you’re effectively paying a mortgage bc you can’t get kicked out, so your capital’s better deployed elsewhere if you’re looking for investments.
I agree that is not the best vehicle, but millions of boomer and other generations’ brains are irreparably broken into believing that. So unless that changes, we are probably stuck in this holding pattern of less/lower housing development.
Interest rates caused this problem. People aren’t selling because it costs too much to purchase. This creates a lack of supply and thus higher and stalled prices. I honestly do not know where this is all going but I’ll take my chances by NOT purchasing a home in this environment and just saving the difference for retirement or for the next recession cycle whichever comes first
Us too. 20 rejected offers over asking last year, another 20 this year. We have several times a down payment, next year (or year after) we would be cash buyers but this shit just isn't worth it. Would rather let that cash earn enough interest to pay our rent and travel.
There is not a global housing crisis. There are places where houses sit empty and no one will buy them. And there are places where housing prices are very high. The problem is not a lack of housing. The problem is a lot of people wanting to move to cities, and certain cities in particular. As long as more and more people keep moving to the most desirable areas the prices in those areas will keep going up. It is simple supply and demand.
That's like saying "there's no drought. There's water somewhere on this planet" Mismatch of where housing is and where people want to live is a form of imbalance. If the imbalance is so large that societal issues are popping up, then we have a housing crisis. Evaluating housing stock as a global (or even regional) commodity is utterly pointless. In fact, both the empty homes and the expensive home you mentioned are symptoms of a housing crisis. Having homes where no one wants to live means that previous investments ar not yielding value due to the said mismatch.
There are reasons people dont want to move to undesirable places. Most middle-class people require some form of employment, and there aren't many jobs available in non-metropolitan areas that have industries to support areas like manufacturing used to do in many places. Service positions have also mostly been outsourced and the ones that haven't have been highly automated and consolidated so that where it used to be one rep per client, one rep now manages up to 5 clients simultaneously. What is the product or service that a population uses to drive its economy when most products and most services have been handed to other economies? There needs to be a reason to be in a place. It can't just be "cheap housing" because you can't pay for cheap housing with no job.
It doesn't have to be a city at all. Houses by me in rural NYS are going for insane prices
Where in New York?
Let me explain you why houses sit empty in some places: they have probably close to no infrastructure, as in probably just tap water & electricity, a barely mantained road and some kind of shitty internet. Even amenities like garbage collection become an issue in such places. Who knows what kind of services (shops & all) and crime rates from burglary and worse.
Yep there are plenty of options in Michigan if you want "a cheap house" Good luck with living in that neighborhood though lol
You do NOT want the market to crash. Yes, home values go down. But here's what that really looks like: Values go down. Interest rates go up. Fixed rate mortgages stay the same, but those folks can't sell their house because they're now underwater. ARM go up, and those folks can't sell because they're underwater. They struggle to make their increased payments. Foreclosures go up, which makes values go down more. The economy takes another hit. Businesses start getting their underwear in a wad and lay people off. More people lose their homes. More foreclosures mean lower values. More unemployment. The next thing you know, Wells Fucking Fargo gets a giant bailout just so we can levelset shit again. If you're lucky, you keep your job. You're still not gonna have cash in hand to beat out the investors who are gonna snap up the foreclosures. No, what you want is for lumber and construction prices to stabilize. Most of the housing crisis today is because there isn't enough new construction. Prices went way up because of supply chain issues and they're just starting to come down. Once those level set, it will start to even out some.
My wife and I bought our house in late 2009, at the bottom of the market from the 2008 crash. It blows my mind that our house value is now over 250% of what we paid for it! I mean inflation is one thing, but this is ridiculous! I love our house but there's no way I'd pay that much for it!
But, what was it selling for before the crash? You're up 250% from the bottom, what are you up from what it was valued at in 2006?
Sorry I can’t give that kind of comparison. We bought new from the builder so it didn’t exist in 2006.
Yes, the housing market will definitely crash. How and when are unpredictable. A World War or some other population collapse would make houses cheaper pretty quickly. Another Great Depression would too. Granted, you probably would not like if any of these things came to pass… You’re asking if houses are ever gonna be affordable for you personally without some major worldwide tragedy that would supersede a housing collapse, and the answer is probably not, but anything can happen. The factors that have lead to soaring housing prices are unlikely to be easily lessened in the coming years. There are many reasons for it and the solutions face massive opposition. Areas with very expensive housing need higher density housing, but current homeowners despise that solution. There’s not really any other way.
No. It won’t crash. Prices won’t decline either.
lol, the housing market doesnt stand on its own. It crashes, a lot of other things crash and you still won’t be able to afford it
Yup if job market crashes say goodbye to your credit for the next 10 years. Being flat on credit obligations is smart anyone wants to invest in a house during any crash and is lucky enough to have continuous income during any major industry workforce downsizing
I don’t know much about the Turkish market. I don’t expect there’s going to be a housing crash in the United States anytime soon, although prices might go down somewhat. Ultimately, the issue here, which might be the same where you live, is a lack of supply.
Hope you saved enough for either the down payment or 1 year of no employment and don't depend on your 401k for retirement if you're hoping for a market crash.
Probably not. People need housing so we are at their mercy. Like I had to turn down a job offer yesterday because there's no affordable housing anywhere near there. Closest place was twice the average price and it was ugly as hell, just a grey block. Location was trash, too much traffic passing by and not close to amenities. Rooms were tiny, no garage, no garden. But someone will buy it because we need somewhere to live.
It's not the prices that are the crisis, it's the fact that people are not being paid enough for their labor, and thus home ownership becomes unaffordable. Until the underpaid are successful in getting more from unimaginably greedy companies, there will always be talk of "when's the crash". Boggles the mind that we're hoping for a crash while CEOs and Executives lay off thousands of employees and stroll home with multimillion dollar salaries/bonuses. Completely successful distraction techniques. Edit: you can square this take with the insane rush in 2021 for houses when interests rates were at all time lows.
Don’t assume it’s going to crash. The last crash was in 2008. The last crash before that was 1929. It might not crash again in our lifetimes.
No supply.
A crash is likely, but all it will be is negative growth vs inflation, so if inflation is 3%.it will be an extended period of 0-1% growth. There is going to be no 20% yearly dip
In my area in the Carolinas we had a rapid influx of people starting at the pandemic 2020-2021. Bunch of New Yorkers and Northeasterners moved here to get away from the big cities, and they ruined the housing market. Overpaid for everything and prices are still way too high for normal folk.
We're going to build underground houses and call them "Vaults". Who needs windows?
Reserved an awesome spot in “32”…….
Heard those are going at quite the discount. They are still looking for someone to head up 31.
My buddy Bob said it’s all set over there.
These billionaire hedge fund corporations are buying up property and homes away from the average guy. Then reselling much higher or renting out high.
My house in suburban Ohio was barely $90,000 when built in 1993. Today it's worth $700,000. It's a **highly desirable** Cincinnati suburb with excellent schools, and it's completely built out. Most open houses here get 100 people visiting and 2-3 dozen offers. A 5 bedroom house like this in certain Los Angeles or Long Island neighborhoods would be $4 million. I don't ever see that changing. Even when supply is built, it's dozens of miles out in the sticks, where people don't want to be.
For the housing market to crash, you would have to see so many people willing to eat a massive loss on their mortgage just to sell. And people won't do that unless they can't afford their mortgage. Such as people have lost their job. If that happens, we are talking a global depression that will hurt millions of people, including yourself. So you won't be able to take advantage of the crashing house prices anyways. You won't have a job most likely.
Yes. Crash is a vague term, but there will definitely have a significant adjustment. Before every crash there are people who say this time it's different, and every time they're wrong. When there's sufficient speculation on an asset, the clock starts ticking. Housing is no exception. I've lived through a half-dozen of these going back to the '80s, and the fundamentals that make for a bubble/crash cycle haven't changed. A lot of short memories on here. You have to think in decades.
The housing market cannot crash. Here's the problem. I bought my house for $1. Am I going to sell it for $.50? No, I am going to sell it for $2. So you see, everyone who buys a house has the expectation that they will eventually sell that house for more than they paid for it. You'd have to be really desperate to sell it at a loss (or else there's some objective reason the price is going down, like environmental factors). If no one is selling their houses for less, the market will never crash. The only way that we'll experience a crash where millions of people are selling their homes for a loss is if the economy was in such a freefall that people couldn't afford to live unless they sold their houses, but at that point, we're probably looking at a societal collapse.
You just bought a house for 500,000 dollars. 3 years from now, you need to move for work. Are you going to list your house for less than 500,000 dollars? There's your answer.
You're assuming someone's going to buy it for more than 500k and the OP isn't willing to sell for less so they can move
I'm assuming nothing other than the fact that most people prefer to sell a home for equal to or greater than their original purchase price. Sure, exceptions exist, but that is a big part of why home prices usually only go up.
Yeah you're right. Nobody will ever sell their house at less than the purchase price. The market has never And will never crash. Everyone will always what for a buyer that allows them to sell for more than the purchase price 🤡
What a grown up response. Look at you! You can play pedantic patty cake by yourself. Thread has been deleted anyway.
It might but I think about it this way, at least in the Bay Area where I live, there are soooo many people waiting on the sidelines for interest rates to drop even slightly that the second they do they'll pounce
Well atleast in Bay Area many people have gigantic incomes so it is probably not that bad compared to other areas there wages are low and prices are high, like much of europe.
Everything's relative and there are plenty of small homes people can't afford here either.
Probably not no
Probably at some point in the future, but trying to guess when the market is going to go down is a lesson in futility.
probably another 10 years lmao. bubble in 2008 in the US, and then COVID in 2020. so give it another decade or so for another "shot".
In the US, There is a theory it won't in the near future. Mortgage rates are high right now, but there is an expectation of interest rate cuts later in the year. That can trigger a higher market as ppl are waiting for lower rates.
Not in any predictable or meaningful way. Scarcity controls the price and the powers that be are not apt to give it up.
Once the boomers dir
How can it crash? People will immediately bid for houses and bring the price up again. This is a supply issue.
Doubt it. It's being prompted up. I don't see it crashing again like 2008 any time soon.
The inflation rate in your country is crazy high. The prices of things on the market, like housing, adjust to that. Your should demand that your salary also adjust to inflation if you haven't. Comparisons to other nations like the U.S. or E.U. don't make sense because the issues in their housing markets are likely different.
Land is a limited resource but population is growing and people also get richer. So no, even if there are short-term corrections, housing (especially in cities) will always become more expensive, much like the stock market.
No, because there’s a large housing shortage. This isn’t a speculative bubble, but a mismatch of supply to natural demand.
A lack of quality inventory makes this a tough nut to crack. Everything is cyclical, so I imagine prices of quality housing will drop eventually.
Short answer: probably not. Housing market standing still for a while, while inflation runs amok is probably the "crash" these days. A clear buying opportunity will basically never look like a "clear buying opportunity", whether in real estate or other business. That much I'm fairly sure of. However, I'm real estate, I'm personally going to sit out for a good while. Depends on a lot of factors of course, as always, but I don't trust the trends that raised house prices to where they are to hold for the next decades.
Nope
Currency crashed instead of home properties. Likely commercial properties crash in the USA means housing crashes elsewhere in the world because USA has a ton of 30 year fixed rate mortgages and everywhere else it is similar to our commercial real estate market where it's only fixed for 5/7/10 year then it becomes variable. Well they are continuously coming due to variable interest and the interest rates are blasting off again. With layoffs or only getting lower paying jobs, people are getting pinched while living costs are soaring. The USA also did something crazy which is lower the interest rates so everyone refinances to a lower rate then monetarily policy was to increase it very fast. Demand is still high. It would take a lot of convincing not to invest in real estate. Like everyone just decided not to pay their rent or they all moved to the woods and build their own homes. Or suddenly every build project completed at the same time and no one wants anything older than 10 years that's not renovated to modern standards of the area. Or even just something as simple as materials suddenly being really cheap then the forecast for cheap homes will drive demand down now because of the forecast 10 years down the road due to cheap new homes.
It crashed in 2007, then it came back up. However, the crash was not evenly spread out geographically.
I expect it will crash, (eventually) which is why I sold now and will re buy later. Again. I’ve done this a couple of times with a couple of properties. Housing prices are like waves you ride. lol I can answer the question on why we aren’t lowering prices. Why on earth would I sell it for less than people are willing to pay? Which is about 3 times its worth in my humble opinion but worth is dictated by the buyers and I’m not stupid .
The home market is locked into a vicious loop atm. Rents are high, rates are high, prices are high. Virtually the only reasonable home purchases are people selling their house and buying one without taking out a loan. People aren't selling because it's too expensive to move out. If rates stay high long enough, you'll see people who bought in at the high rates selling, as well as people who bought at the low rates having enough equity that they're just buying houses outright. Alternatively, big drops in rental prices, which you'd see in a job market collapse as renters lose jobs and either need roommates or to move in with families. The bubble here isn't nearly as speculative as the great recession, the prices aren't even nominally that much higher despite inflation, and interest only loans aren't fueling the bubble.
In general, almost all of the houses’ value rises over time as it’ll rise along with inflation. You can say your house gets more expensive or you could say your money is worth less. It means the same thing. Now, you need to add to or subtract from whatever the supply and demand is in whatever location you’re looking to buy. Some places will stay in demand until long after you have died, other places are never in demand.
I honestly feel like a lot of our problems stem from surpassing comfortable population levels. But those conversations are always fraught with landmines.
There aren’t enough new homes to make that happen.
Not so long as there is more demand than supply
The unemployment numbers needs to take off in order for this to happen As along as there are jobs available people will have 5 jobs to make it work When there are no jobs available anymore or when people need 10jobs to survive that’s the beginning of the end
Ever? Yeah. Eventually, all markets will go to zero when mankind goes extinct / the sun eats the earth. In the foreseeable future? Hmm, kinda doubt it. In part because there is a large and powerful bloc (homeowners) who do not *want* the housing market to crash, and who can exert political pressure on governments to prop it up. Ditto stock markets.
There is no balloon, no bubble. There is still massive amounts of pent up demand for housing. The slightest dip in rates or prices will send it to the moon again and again.
The city I live in has had a housing crisis for about 1000 years
Every country is different and within countries there are submakets, but go look at the data https://tradingeconomics.com/united-kingdom/average-house-prices for example
They won’t come back down to pre 2020 prices without something huge happening. IMO something that could cause a global housing crash would likely make it to where hopeful home buyers still won’t be buying. My area in FL has definitely seen some slow downs and price drops, but still easily double what it was in 2019.
No
The simplest answer is no, because the housing market is typically the largest income for governments and is therefore too important to maintain status quo in days when government debt is skyrocketing and expensive wars are looming. Governments issue loans to banks which operate as businesses, therefore it is the banks goal to maximize profits while also being able to pay the central bank (the government). This whole scheme is so important that its the sole reason banks went under when the government raised rates - banks had a lot of money out as low fixed mortgages but when the central bank changed the interest they were insolvable as a business and couldn't pay on their debt *to the government*. On this note probably the largest threat of a crash comes from the government continuing to raise rates due to how that impacts banks - but history has shown that the government is willing to "bail out" (forgive debt) for the biggest boys so it can't really be considered a risk anymore. Since 2008 the government has actually created a specific agency to make sure those conditions (bad mortgage loans to people) could not happen again. So the situation of the 2008 banking crisis cannot occur again. Besides that there are still many people that qualify for expensive mortgages and housing sees healthy demand. Coupled with NIMBYism zoning/construction issues persisting an ugly scenario of supply restriction prices will likely stay high.
No, lol. another “question” designed to vent.
Crash no, at least not anytime soon. While prices shot up so did inflation and the fed is drastically trying to slow inflation but it’s highly unlikely we’ll see deflation. So I think prices are here to stay, some markets will see bigger dips than others
Everyone feels entitled to having children, so probably not.
Of course homeowners won’t lower prices - neither would you, if you owned one, and it was worth a certain amount in your market. Everyone loves capitalism until they’re getting fucked by it. And I’m no expert, but a lot of real experts don’t actually think this is a bubble, and that the extraordinarily low interest rates in the last decade were the anomaly.
Honestly no... Inflation just devalued money. Eventually, wages will catch up.
Population increase creates demand. Earthquakes or similar events that make a location unstable and unappealing will deflate values for sure, and in fact tie people to stay in places that suck
Why would it? A lot of people are sitting on low interest mortgages and demand is sky high. This isn’t 2008 again.
What is going on right now (high housing market, high interest, low supply) it’s similar to what happened in the US late 70s early 80s it was good for a minute but it lead to a recession that lasted for about 16 months and had years of issues after. I mean it may crash tomorrow or in a couple years but the longer it goes it’s going to hit hard and people will mill themselves from the losses
Wait another two or three generations and see. Many people buying or have bought, had help or bought long ago. Wait until the great grandkids come along and attempt to buy these multi million dollar houses. In the shorter time, just read many of the subs on how much many have increased upon renewal, increase of taxes or HOA fees. Here is an interesting article from 2023. https://www.mpamag.com/ca/mortgage-industry/industry-trends/how-severe-could-the-upcoming-mortgage-renewal-shock-be/466730
If we had a Thanos snap and half the population disappeared housing would Def be way more affordable. Way more supply than demand
Many cities have been under building for decades, there aren't enough houses for the populations in many cities. This is causing overcrowding and high prices, which will continue as long as supply is lower than demand.
Soon as it “bursts”, all the people holding cash will rush to buy, increasing prices again… right?
If banks were to stop loaning out the money, then houses will only be accessible to people with the cash to pay for them. Prices would for sure be lower at that point, even with all these cash holders swooping in.
No, but the dollar may...In the end, they will do everything possible to prop up housing to prevent am outright rebellion.
Houses have turned into a hotel business with airbnb and booking. As long as that is the case the problem will persist because families now compete with businesses and the business will always win.
In the US, we need to increase incentives for builders to build more houses - especially in the "desirable" cities
No. Not until laws are put in place to precent foreign investing, corporations investing, air bnb empires, and slum lording.
Housing prices seems to vary a lot based on location, especially certain cities can have very overpriced markets, so avoid those and look for houses in cheaper locations if you have the ability to do so.
Housing is plenty cheap in Zimbabwe right now so it's not like there is no affordable housing.
"cheap" does not mean "affordable". With a Zimbabwe income I doubt housing is that affordable to the locals.
This isn't the same as 2008. There is real demand for homes and a lack of supply. Nothing is going to crash because you have a lot of people waiting for the right opportunity to purchase. We need zoning laws to change, more dense housing to be built, and for the starter home to be a thing again but asking corporations to make less money is heresy apparently.
We already had the once in a hundred years housing crash in 2008. You want another one? Wait another 100 years 🤣🤣
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Keep in mind that the "homeowner" in this statement is usually synonymous with "regular working class citizen". The answer to the question; "Why won't millions of regular people vote to fuck themselves?" should be obvious.
Let's all think back to 2008 and make a real good educated guess shall we. Tired of this shit.
Yes. I don't know enough about the housing market to guess when, but it will happen eventually.
Its overpopulation. The best locations are built first, meaning adding more housing always yields diminishing returns. So past the "settlers" period, any population increase will decrease housing affordability in any given location.