My wife an I are possibly getting ready to buy another home in the next few months.
By my estimation, home prices will NOT go down, and there should NOT be a crash (housing)
1) Supply is still very low while demand is still at a high,
2) There is no catlayst that I can see to make home owners to forcibly sell there exisitng homes to start a crash.
3) When interest rate cuts come this summer/fall...that will increas demand and prices more than they are currently.
I honestly welcome anyone to tell me Im wrong and why...seriously.
because I am wracking my brain trying to come up with a situation where housing will make a correction in the near future.
I once bought a home (a considerable upgrade at the time) and a housing crash occurred shortly thereafter. While it was distressing to see the builder pack up and vacate the community, I wasn’t really concerned because the purchase of our primary residence was made with numerous considerations in mind (i.e., it met pretty much all of our needs and wants). The fact that our home had suddenly decreased in value was of little concern as it was our primary residence in a community we wanted to live in and we were planning to live there a long time.
Part of your ROI on a home relates to its utility value. That is to say it is basically your home, not an investment per se. If you run a discounted cash flow analysis on home ownership you’ll find that there are so many carrying costs that its not really a great investment. There are other far more attractive places to put your money to work than in a home IMO.
If you’re looking at the home more as an investment then as your personal “castle” than remember that recessions can be stressful game changers if losing value in your home bothers you.
I have another property that was bought primarily as an investment a couple of years ago when interest rates had a 2 handle. I would not buy the same place today as it would not be an attractive investment for me. The point here is the dichotomy between a residence and an investment. That’s just how I look at it.
I totally agree with you and purchased my home a month ago. I lucked out and got it at asking price before others could come in and bid above. I, like you, don’t see housing prices falling anytime soon.
If you move, odds are your property tax bill will skyrocket, and that’s one reason why people are not moving from their homes.
100%
Yes I believe that will happen. We have have two houses empty as my husband tries to Reno them. A tenant of 13 years always on time had been hosting many ferals inside and outside. We are like Jethro and Ellie Mae getting them out before another litter hits. Done with that finally ..6 months of 2500 monthly income lots more ahead drywall , resurfacing flooring etc. other house in Tyler sits… another major project. Just read Biden wants Capitol gains at over 50%…. Think that will complicate matters. We are thinking our twenty something kiddos may need these shelters one day.
You are right on your reasons home prices will not go down.
One situation where housing will make a correction downwards, is where the government pays down the federal debt. Another is where there are massive tax cuts across the board. Another is where the government changes monetary value and exchanges all paper money for newly valued dollars (old $1 is now one penny, old $100 bill is now $1, etc.). But none of these are going to happen until the nation collapses.
There absolutely “should be” a crash. Despite believing otherwise, the Boomers will not live forever. They are the largest generation, if they are gone then who will fill those homes?
Seats are fought over in musical chairs because there are less chairs than there are butts. There arent enough people needing a house “right now” to create the demand necessary to float the present price. Yes, younger generations want a house but if all Boomers were whisked away tomorrow, would all the M/Z be able to run out and move in at the present price? Would they actually want to when they realized paying a mortgage means no Grubhub delivered avocado toast?
When I read what was happening in Japan it made me think that the plan to make sure you owned nothing and enjoyed it was to turn homes into disposable consumer goods like they have in Japan. As the population fell there, houses started standing empty. To make sure that people didnt just live mortgage free they started coming up with more and more environmental rules for homes. The rules are too expensive to comply with so there is no point in maintaining a home. No point in maintaining a home if it will be obsolete within 20 years. Either buy new or rent.
If you mean demand as in every M/Z wants one then there is demand but if you mean who can afford to buy a half million mcmansion then demand has absolutely nothing to do with anything. Half a million, thats actually pretty cheap for many locations these days. Where are all these Walmart employees going to come up with that? The new job they get when boomers actually stop showing up for work? You think that this shelf stocker is going to move overnight to a job selling freighters of goods to be able to afford such a thing?
Then I heard that Blackrock was buying up everything here and losing money doing it. I also have learned that places like NY are paying ridiculous amounts of money (I dont remember, Im using $387 as a place holder) per day to house immigrants. There are bonuses on top for housing whole families and other things.
Let me see here, if I build a 200 unit apartment building and support candidates encouraging replacement then when my new immigrants get here...200 times $387...minus bribes and campaign funds...carry the one...
That is the only way that prices could even possibly stay where they are let alone go up.