Howdy, So, let's talk real estate prices, shall we? Real estate prices soar in most countries. Today's prices make the pre-2008 crisis prices a joke. One wonders, where does it end? So, what do you think? Personally, I think prices are outrageous. If people are buying like there is no tomorrow, that is not going to end well, to put it mildly.
It's all relative unless you're a first time buyer. What you lose in buying a house, you make up most of it selling yours. If you're trying to get onto the property ladder, first time buyer, then high prices are pretty bad.
It ends when non institutional buyers have bought enough, and demand begins to dry up. Right now prices already have put most single family housing out of the market of working and lower middle class, but the houses keep selling. When Blackrock and other institutions stop buying, this will end.
Moral of the story: young people are screwed. One more shell to be fired in the generational war. Thank God I'm not young. P.S. I watch "Escape to the country" from time to time. Prices are bonkers!
So, lesson from 2007-2008 not learned, got it. The banksters, with their money printing presses, have played us again.
Pretty high here in FL, but its not so high to make 2008 look like a joke. Inventory is low, and many hot real estate areas are out of room to build more. Miami-Ft Lauderdale is out of lots. My neighbors are selling, and we watch those houses get torn down and new ones put in (this area was build in 1950s). Having ocean access canal is a big selling point. And yes, its not just the US, but elsewhere too. IMO this is no time for speculation like it was in 2008. Its much harder to get a loan, and if you buy now, you might get burned. Also, the rate hikes should quiet things down some.
Never mind the facetious video in the OP. In the next one they claim home prices have gone up 23.4% just for past year. And they have been appreciating for years. Don't get me started on construction materials cost.
There is quite a bit of new construction here in FL, but the cost of construction in general ensures existing homes will be in high demand.
I think it depends on the location, and the price point. Bigger markets, more competition. I disagree with the boomers and bankers being the main reasons that are driving millennials out of the home buying market. Many, many factors. One aspect not mentioned is the supply chain nonsense, the cost of lumber, and the back order wait time of appliances, lighting fixtures, etc. another aspect not mentioned is the shortage of construction workers. Another aspect not mentioned is the foreign investors buying property and land in the US. If you are a millennial, you can find a home.
So, the question is: why are satanist-bankers keep interest rates so low and drive people not only taking ludicrous mortgages but also withdraw most of their money (cause there is no even a small profit in the bank, you know) and "inflate" them in the housing bubble? Of course you can but at what price? Giving half of your income on rent/mortgage doesn't seem OK with me.
Right now I am renting but I'm always looking for a small and reasonably priced a lot to put a mobile home on eventually. The lot comes first and then I can take my time putting a mobile home on it. I've seen a few small lots around here like two tenths of one acre for less than $10,000 but invariably when I call the realtor it's already under contract.
The 'youngsters' haven't learned the difference between want and need yet. They'll spend a large portion of their income for all the toys and status stuff, but don't see saving up for a house as important. The dislike of the responsibility that goes with it seems to be part of the reason. Generally, prices are to the high side in my area, a great deal to do with Northerners migrating semi-south where the cost of living is about 30% less then the Tri-State area, and the weather more temperate.
yeah, may be because that's nearly impossible now. OK, let say your "gringo" paycheck rises the same as real estate - 20% annually. $3000 per month + 20% = $600 increase per month 12 months x $600 = 7200$ annual increase. The house you wanted to buy - $300 000 + 20% annually -> $360 000 $60 000 annual appreciation. So, your income rose $7200 per year and the house you wanted to buy rose $60 000. How is that working for you? Mind the gap? And that is if your income rose at all.
Given a lot of millennials are working from home, you can live anywhere. Find a reasonably priced area of the country and buy a house there. Plenty of reasonable priced real estate markets.
So you feel someone earning only $36,000 a year should be able to buy a house worth $300,000? Or even $43,000? Assuming you are working with a single person, average income is closer to $70,000 across the US, excluding top earners. Home ownership isn't a 'right', and until people figure out the difference between want and need, they may never reach the point where home ownership is within their grasp.
Average income is $31K, or $67 per household. Average price of 3 br house in Florida is $313 000 You need an income of about $70K to afford such house. Contrary to the popular belief that FL is cheap, it is actually the 12th most expensive place in US to buy a house. Note, that the insurance on such house will be around $4000 + very high hurricane deductible + high property tax. Japan real estate is so expensive they have 100 yr mortgages, and they are available in US too. With 100 yr mortgage, your monthly payments will be about $1800 (tax, insurance etc included) and when its all said and done, you will have paid the bank about $1.5 million https://www.mortgagecalculator.org/calcs/100-year.php
OK, I wasn't entirely correct here. In reality no one will buy a house alone, unless you are a bit of a loony. And a bachelor probably doesn't need a 300K house anyway. So, suppose a wife and a husband want to buy a family home. Assuming kids are small, they don't earn money. I can still see the house sealing away because the appreciation gap between income and house price is growing.
Average price. So people no longer believe in buying what they can afford, but what they want. I will repeat again, there is a difference between need and want. There is an old term that seems to have gotten lost along the way. Starter homes. Nothing fancy, a basic 3/2, and that's even more then most first time buyers likely need. But somewhere along the way, that's just not good enough for some people. I have one, near where I work. Paid $125,000 for it in 2018. 1140 square feet, 3/2 on .4 of an acre. Value today, $225,000. While I put a chunk down, my mortgage is less then most people's car payments. So listening to people say that young people can't afford a house, perhaps if they saved and put something buy, they may actually accumulate a down payment. Then get their foot in the door with a 'starter home'.
I won't argue that prices are rising faster then income, but then again, the cost of pretty much everything is going up into the stratosphere. It's the fact that people seem to think that they need all their wants' in the first house they buy, regardless of what they can actually afford. You might take a peak at what I responded to Pro_line. Reality doesn't always bow to one's wishes.
OK then. So, you admit yourself, the house you bought almost doubled in price for less than 4 years. I guess that proves my point to a greater degree. Regarding the "starter home" argument, I believe you will find the proper information in this video:
Everyone would be living in 10 000 square foot ocean front mansion if they got what that they want, but they settle for what they can afford. This is nothing new, - people buy the house they can afford, usually in the "barely afford" end. First home is practically always modest, because that's what people can afford. Its simple, - banks won't lend you the money unless you can show that you can make the payments, including interest, tax, HOA, insurance etc. The banks will do the math for you. Where do you get the idea that everyone is buying houses they can't afford? Some push the limits, and they they live in a nicer house but can't afford much else. Its not new. There has always been people like that. I have bought and sold quite a few houses, I know something about it.
I happened to buy in an up and coming area. Not all areas have 'almost doubled', but the purpose of my post is that there are homes available not in the $300,000 range that are affordable. And with current interest rates, mortgages are affordable. I can't do videos at work....
