When you’re offering thousands over asking and sometimes sight unseen you may be taking part in a feeding frenzy. I hope at least they’re not surprised.
WIth increased mortgage rates, their monthly payments would likely be the same now, even with a lower house price.
Happened in 2008 when the subprime bubble burst.
Droves of people found themselves underwater on home mortgages and just walked away.
Short sells were the order of the day back then. The difference today is that there isn’t any cheap rentals to move into, so sure you can abandon your underwater mortgage, but there’s nowhere to go.
“unexpected costs of homeownership that first-time homebuyers encounter”
Had a neighbor like that.
No idea how to take care of a yard or even much of a grasp on even basic home maintenance.....but they had those shiny cars in the driveway though.
And eventually the house went into foreclosure. SMH
I’m beginning to see “open house” signs from realtors lately.
So some definite slowing.
Another part of the problem is Banks offering you loan amounts that you technically qualify for, but realistically leave you pinching pennies to pay your bills and groceries. First time home buyers don’t see that picture. They just get caught up in “more is better”. It’s not.
Older homes in my area are selling at over $100K. A half-dozen years ago, those same houses were selling for $40K.
New subdivisions have price tags of $250K to nearly $500K.
The town has grown from 8,500 in the mid-2000s to 25,000 now. I don’t know where the money is to support that growth and housing costs but they are building homes and strip shopping centers as fast as the city council can approve the plats.
Tyson HQ 20 miles away and Walmart HQ 25 miles away are the corporations behind the growth.
It will be interesting to see what impact the Biden inflation/recession has in the next few years. Typically, following economic booms comes economic busts.
Never saw that coming, LOL.
Here’s a quick tip for these buyers:
You are House Poor too
I’ll watch. Unfortunately some people I know bought at the top in spite of my suggesting otherwise. I hope they don’t get burned but they are going to have to hold it and make payments for a very long time. They are stuck with it now and I am sorry but I told them so.
I won’t say I never saw such greed but this ranks right up near the top. Property I thought was too high in the summer of ‘21 is now asking and not getting three times the price. They can choke on it, I hope. It is mostly flood prone. Anybody that asks I tell them how many times I have seen almost the entire property under water. I laugh, the water is why I didn’t buy it a year ago. Being close to a development does not make it one.
House prices always cycle up and down. When they go down you bite the bullet because they eventually recover.
Bought my house in 1983. I’m still in it and it’s paid for. It’s a matchbox but it’s mine thank God. my payments were around $280 per month which fluctuated some due to refinancing several years ago. Anyway I look at the market now and am stunned at what is being asked and paid for homes. And everyone seems to want 3000+ SF and newly built. It’s ridiculous imho.
Who didn’t see that coming. It’s the perfect set up for a deflationary Depression.
These guys aren’t homeowners, but merely proud owners of a mortgage. If ya really bought the house, there isn’t a concern for the long term. Only a fool would ‘own’ a home now, especially concerning the need to move for work, local tax collectors, etc.
During the great depression, millions of Americans lost houses and farms to THE TAXMAN! Mortgages were far less common.
Today you might lose them due to nonpayment of your mortgage.
You can’t fix stupid
I bought right at the start of a 5-year real estate crash in 1984. Didn’t matter, since I had just bought I had no interest in selling. Sold in ‘92 for a tax-free profit and moved to a nicer home and area.
Especially in high property tax states.
Age old story played out over and over again...
At the outset of the pandemic realtors quit selling houses and started selling FOMO, much to their advantage and skillset, since most realtors have little to no understanding of basic construction, maintenance and condition concepts of houses.
Their clientele grew up in a consumer culture with no economic understanding, no sense of comparative value, loads of entitlement and unprecedented access to other people’s money.
In that environment it didn’t take much for an agent to convince a less-than-astute buyer to bid thousands over list, waive contingencies and inspections, blindly go along with the agent’s preferred lenders and sign on the dotted lines without reading so much as a paragraph of contracts and lending agreements. And about as much attention was paid to personal due diligence throughout the process.
Now the FOMO buyers are coming out of their stupor after the fact and have discovered the meaning of “caveat emptor” just like they’re about to discover the meaning of “negative equity”.