No point applying for a mortgage when the market is out of control that only hedgies with cash offers 200% over asking have a chance at buying anything/everything. Most first time buyers have given up at this point.
The bigger question everyone should be asking is why the hedgies are doing this. Why are they buying properties for insanely more than they’re worth? I have a couple theories and it all has to do with the collapse of the dollar.
I think that is definitely a byproduct of what they’re doing and certainly something they consider a win but I don’t think it’s actually their main objective right now. I believe wealth preservation during this inflationary period is the immediate objective paired with continued “creation” of “wealth” by driving the real estate market up so that they are not only converting worthless fiat to shelf-stable real estate, they are also pumping up the value of that real estate artificially by manufacturing scarcity. If they manage that and there isn’t a major crash of the housing market, then they will then shift their focus to what you are talking about.
I’m looking too. I’m finding some homes are going for about what they should be priced—even in Florida. You can find a decent condo near Delray on the east coast and near Ft Myers on the west for under $200,000. You have to be ready to buy and to jump quickly, but not everything is going for double what it should be. Particularly in a condo complex, you can’t double the price when the place next to you went for half as much. No one would buy anything in the complex if they were scamming or over-inflating.
South Carolina has some decent housing that doesn’t feel like you’re being raped. Much lower priced than Florida. The Charleston area is dynamic and worth looking at.
I’m just in the frame of mind that A) Something big is coming if not stopped B) Hard assets are the way to go C) warmer climates continue to lure and fascinate and with some good research, you can make a good investment there and D) There is no price tag on happiness. We’ve all seen that life is pretty fragile these last two years. Live somewhere that fulfills your soul. Where you live is the most important choice you can make. It accounts for a lot of your life.
Oh man I’m so sorry you’re stuck there, that sucks. I’m in IL so I can relate to some extent. There are some small towns here that still have houses that come up for reasonable prices. In a different part of this thread I also mentioned fixer uppers. If you’re not queasy at the idea of living in something that needs a lot of work and doing most/all of that work yourself you’d be shocked what a bank will sign off on. You’d have to move though I’m sure, I would be surprised if there is anything affordable in NY, fixer or otherwise.
I don’t remember what it was, and I’m kicking myself for not saving it, but I read about some change that Trump made in 2018 or 19 that kicked off this frenzied buying.
Oh interesting, I don’t think I heard about that. Until last fall I had not purchased anything since early 2018. I was pretty stunned at the prices and how fast everything was selling when I started looking early last year. I’d originally wanted to move state but that proved utterly impossible because there was no way to even look at a property before it went contingent. I’m open to some risk but buying sight unseen is not for me.
It could be. But a company won't fire people they can make money with. They'll fire them when they aren't making money with them. So this isn't about some future but about something that has happened in the past month or year.
It is much more ominous. We can talk about rate hikes and economic collapse all we want. But none of that talk can even scratch the surface of reality. When you or your neighbours are losing your houses, or fighting for food in a manufactured food shortage.
Here in Canada virtually everyone in my circle of friends has about 500k in mortgage debt. People with variable rates paying 1% last year would be paying about $400 in interest costs a month, plus about $2,000 in principal, so $2,400 total. In the last year that rate has jumped to 2.5%, meaning their payments are now $3,000 per month. We’re barely even getting started, if rates get to 20% like in the 70’s that payment will increase to over $10,000 per month. A LOT of people are going to lose their homes.
This! ☝🏻 I don’t understand this concept ever, but especially after the housing crisis in during Obama’s first term. It’s a no brainer. We’re in a fixed mortgage w/ an insanely low interest rate and we were planning on doing a new build soon and moving. Well again, it’s a no brainer w/ the mortgage rates steadily increasing and set to increase even more throughout the year, there’s no way we’re going to attempt to move and lose our low interest rate.
i think bad credit or anticipation of market improving or ability to unload the house. it's not ideal, but somexs when ppl have bad credit this looks like a better deal. (never had one myself, but thinking that is the logic)
Lots of people had them, particularly when rates were 1% and fixed was 2%. Standard mortgages here only offer 5 year fixed rates, so even amongst those that got fixed rates, 20% come up for renewal on any given year. Most people who have their mortgages coming up in a year or so have no idea what kind of pain they are in for.
I was in this crowd and had to pay $5k penalty to switch lenders and lock in a better rate last fall.
It’s a game that’s rigged so that a good chunk of people will fail, and everyone gets squeezed.
I did a couple years ago. It dropped my interest rate dramatically. All this was so I could double and triple my principal payment. I dumped tax returns and my annual bonus in there as well. Paid my house off three weeks ago. Mortgage debt free. Bought the house in 2006 for $225k. It was the best way for me to max out my principal payments so that I could finish the mortgage off. It only made sense by doing the math and maximizing my principal payments to put me on a 3 year payoff. The interest rates were so incredibly low, it worked in my favor.
You have to pay interest because the banks bribed politicians to give them the ability to print and loan money. It has also distorted the system, ramping up the prices for everything and forced almost everyone into debt.
HOW are people still signing up for ARMs after what happened in 2008??? There was even a very popular Hollywood movie about it and still morons are buying more house than they can afford and agreeing to adjustable rates. Fucking staggering.
Might have been my thread. I wasn’t dismissing potential shortages but questioning whether the sudden attention by the MSM on food shortages was fear mongering, because whenever they get involved in an issue you know there’s more behind it.
They wouldn't lay off in anticipation though. They obviously don't have need of them now.
No point applying for a mortgage when the market is out of control that only hedgies with cash offers 200% over asking have a chance at buying anything/everything. Most first time buyers have given up at this point.
The bigger question everyone should be asking is why the hedgies are doing this. Why are they buying properties for insanely more than they’re worth? I have a couple theories and it all has to do with the collapse of the dollar.
Right. Property is a good hedge against inflation. Follow their lead. Max out your debt and buy property.
It's part of their great reset.... to turn this nation into renters vs owners - ie "you'll own nothing and be happy"
I think that is definitely a byproduct of what they’re doing and certainly something they consider a win but I don’t think it’s actually their main objective right now. I believe wealth preservation during this inflationary period is the immediate objective paired with continued “creation” of “wealth” by driving the real estate market up so that they are not only converting worthless fiat to shelf-stable real estate, they are also pumping up the value of that real estate artificially by manufacturing scarcity. If they manage that and there isn’t a major crash of the housing market, then they will then shift their focus to what you are talking about.
This
Wouldn't even stop the federal government from revoking your land and citing reasons though.
I’m looking too. I’m finding some homes are going for about what they should be priced—even in Florida. You can find a decent condo near Delray on the east coast and near Ft Myers on the west for under $200,000. You have to be ready to buy and to jump quickly, but not everything is going for double what it should be. Particularly in a condo complex, you can’t double the price when the place next to you went for half as much. No one would buy anything in the complex if they were scamming or over-inflating.
South Carolina has some decent housing that doesn’t feel like you’re being raped. Much lower priced than Florida. The Charleston area is dynamic and worth looking at.
I’m just in the frame of mind that A) Something big is coming if not stopped B) Hard assets are the way to go C) warmer climates continue to lure and fascinate and with some good research, you can make a good investment there and D) There is no price tag on happiness. We’ve all seen that life is pretty fragile these last two years. Live somewhere that fulfills your soul. Where you live is the most important choice you can make. It accounts for a lot of your life.
Oh man I’m so sorry you’re stuck there, that sucks. I’m in IL so I can relate to some extent. There are some small towns here that still have houses that come up for reasonable prices. In a different part of this thread I also mentioned fixer uppers. If you’re not queasy at the idea of living in something that needs a lot of work and doing most/all of that work yourself you’d be shocked what a bank will sign off on. You’d have to move though I’m sure, I would be surprised if there is anything affordable in NY, fixer or otherwise.
I don’t remember what it was, and I’m kicking myself for not saving it, but I read about some change that Trump made in 2018 or 19 that kicked off this frenzied buying.
Oh interesting, I don’t think I heard about that. Until last fall I had not purchased anything since early 2018. I was pretty stunned at the prices and how fast everything was selling when I started looking early last year. I’d originally wanted to move state but that proved utterly impossible because there was no way to even look at a property before it went contingent. I’m open to some risk but buying sight unseen is not for me.
It could be. But a company won't fire people they can make money with. They'll fire them when they aren't making money with them. So this isn't about some future but about something that has happened in the past month or year.
House by me was purchased for 450,000 a few years ago and just sold for 900,000. A 2 family, not huge or anything.
Bubble.
Same where I live. There isn't a house on my street that would sell now for under 750,000. Not mansions, just regular three and four bedroom houses.
It is much more ominous. We can talk about rate hikes and economic collapse all we want. But none of that talk can even scratch the surface of reality. When you or your neighbours are losing your houses, or fighting for food in a manufactured food shortage.
Here in Canada virtually everyone in my circle of friends has about 500k in mortgage debt. People with variable rates paying 1% last year would be paying about $400 in interest costs a month, plus about $2,000 in principal, so $2,400 total. In the last year that rate has jumped to 2.5%, meaning their payments are now $3,000 per month. We’re barely even getting started, if rates get to 20% like in the 70’s that payment will increase to over $10,000 per month. A LOT of people are going to lose their homes.
This! ☝🏻 I don’t understand this concept ever, but especially after the housing crisis in during Obama’s first term. It’s a no brainer. We’re in a fixed mortgage w/ an insanely low interest rate and we were planning on doing a new build soon and moving. Well again, it’s a no brainer w/ the mortgage rates steadily increasing and set to increase even more throughout the year, there’s no way we’re going to attempt to move and lose our low interest rate.
fixed rate, 30 year beats inflation.
ARMs can be fixed rate for terms such as seven or 10 years, and are now underwritten much more carefully than they once were.
i think bad credit or anticipation of market improving or ability to unload the house. it's not ideal, but somexs when ppl have bad credit this looks like a better deal. (never had one myself, but thinking that is the logic)
Lots of people had them, particularly when rates were 1% and fixed was 2%. Standard mortgages here only offer 5 year fixed rates, so even amongst those that got fixed rates, 20% come up for renewal on any given year. Most people who have their mortgages coming up in a year or so have no idea what kind of pain they are in for.
I was in this crowd and had to pay $5k penalty to switch lenders and lock in a better rate last fall.
It’s a game that’s rigged so that a good chunk of people will fail, and everyone gets squeezed.
I did a couple years ago. It dropped my interest rate dramatically. All this was so I could double and triple my principal payment. I dumped tax returns and my annual bonus in there as well. Paid my house off three weeks ago. Mortgage debt free. Bought the house in 2006 for $225k. It was the best way for me to max out my principal payments so that I could finish the mortgage off. It only made sense by doing the math and maximizing my principal payments to put me on a 3 year payoff. The interest rates were so incredibly low, it worked in my favor.
You have to pay interest because the banks bribed politicians to give them the ability to print and loan money. It has also distorted the system, ramping up the prices for everything and forced almost everyone into debt.
Aaaaaand who owns the banks, hmm?
Exactly; the banks truly have NO skin in the game.
HOW are people still signing up for ARMs after what happened in 2008??? There was even a very popular Hollywood movie about it and still morons are buying more house than they can afford and agreeing to adjustable rates. Fucking staggering.
ARMs can be fixed rate for terms such as seven or 10 years, and are now underwritten much more carefully than they once were.
Might have been my thread. I wasn’t dismissing potential shortages but questioning whether the sudden attention by the MSM on food shortages was fear mongering, because whenever they get involved in an issue you know there’s more behind it.
The benefit of this might be a slow decline of home prices.
The downturn is already well under way --
https://www.cnbc.com/2022/04/20/mortgage-demand-falls-to-nearly-half-of-what-it-was-a-year-ago.html