Housing market trash

UTfball68 said:
I laugh...but I can’t help but think how many average families banked $8-10k in stimulus funds over the last year...used it as seed money for a new house or car, and what the financing on that has to look like, and what’s actually going to happen when they find out they can’t actually afford that payment in the next 12-18 months. Maybe I should have more faith in humanity, but as I’ve asked before, who did the stimulus help, because unemployment is still relatively low, in my opinion.
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I’m holding off on buying anything now completely expecting this exact scenario in the near future
 
UTfball68 said:
I laugh...but I can’t help but think how many average families banked $8-10k in stimulus funds over the last year...used it as seed money for a new house or car, and what the financing on that has to look like, and what’s actually going to happen when they find out they can’t actually afford that payment in the next 12-18 months.
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Except interest rates have dropped so much that most people went from a 4-5% loan down to a 2.5-3% loan, so, assuming they have some equity, they really can afford twice the house.
 
jeepinmatt said:
Except interest rates have dropped so much that most people went from a 4-5% loan down to a 2.5-3% loan, so, assuming they have some equity, they really can afford twice the house.
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Valid...but more what I was thinking was that these folks probably got tossed back into gap insurance or PMI...plus property taxes. But I suppose on houses, it just means they probably stretched back out to 30yrs and will have a mortgage payment until they’re 75.
 
jeepinmatt said:
Except interest rates have dropped so much that most people went from a 4-5% loan down to a 2.5-3% loan, so, assuming they have some equity, they really can afford twice the house.
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This. Monthly payments are low on an historical basis.
 
UTfball68 said:
I laugh...but I can’t help but think how many average families banked $8-10k in stimulus funds over the last year...used it as seed money for a new house or car, and what the financing on that has to look like, and what’s actually going to happen when they find out they can’t actually afford that payment in the next 12-18 months. Maybe I should have more faith in humanity, but as I’ve asked before, who did the stimulus help, because unemployment is still relatively low, in my opinion.
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I’m waiting on reality to hit them and pick me up a new to me repo motor home.
 
jeepinmatt said:
Except interest rates have dropped so much that most people went from a 4-5% loan down to a 2.5-3% loan, so, assuming they have some equity, they really can afford twice the house.
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shawn said:
This. Monthly payments are low on an historical basis.
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Some simple math - a 200k 30 yr loan at 4% is a payment of $955
Same loan at 2.5% is only $790.

Or - you can get a $242k loan for that same $955.
 
RatLabGuy said:
Some simple math - a 200k 30 yr loan at 4% is a payment of $955
Same loan at 2.5% is only $790.

Or - you can get a $242k loan for that same $955.
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To be clear, what I meant was a house "twice as expensive "
$200k loan at 5.0% is $1074/month
$272k loan at 2.5% is $1075/month

If you've been living in the $250k house (20% down, $200k financed) for 10 years, your principal should be down to ~$160k, and you can sell it for $500k in today's market. So sell for $500k, minus $30k in fees, minus $160k principal, you have $310k free and clear, plus $272k for the same monthly payment gives you $582k. So more than twice the purchase price of the $250k house you bought 10 years ago. Of course everything is twice as expensive too. Chicken or the egg, right?
 
I know it’s a ‘zestimate’...but...I bought this house 8 years ago for $164k. I sold it a year later to the current owners for $189k...

B7079837-8D84-425E-A7FD-3ECD300B650B.jpeg
 
I think I'm going to buy an Acre of land tomorrow . slap up some cardboard boxes call it a neighborhood and sell each "house" for 10K a pop .
 
UTfball68 said:
I laugh...but I can’t help but think how many average families banked $8-10k in stimulus funds over the last year...used it as seed money for a new house or car, and what the financing on that has to look like, and what’s actually going to happen when they find out they can’t actually afford that payment in the next 12-18 months. Maybe I should have more faith in humanity, but as I’ve asked before, who did the stimulus help, because unemployment is still relatively low, in my opinion.
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Exactly. We used ours to buy 2 vehicles outright, and put the rest in savings. I pity the folks who are over extending because that stimulus is just burning a hole in their pocket.
 
ncpartsguy said:
I'll give you $11,500, cash deal, no inspections, fast closing. :laughing:
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Got another offer for 14,500 cash and says they will sign papers now in 10 minutes , you have a counter?
 
shawn said:
This. Monthly payments are low on an historical basis.
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First time home buyer. I was real intimidated on exceeding $300k. Got 3.25% locked in March 2020 and realized it would be fine. Even with PMI. Our apartment rent and garage rent basically summed up to our new mortgage. I was thrilled.
 
I know that the low interest rates are driving people to want to purchase, and therefore driving the price up... but I believe that, in the end, you will spend more on the house. When I refinanced my house, the lower rate saved me like $20k over the life of the loan, but the house appraised for $70k more than I paid for it. If I were in the market, I would wait it out, if I could.
 
paradisePWoffrd said:
I know that the low interest rates are driving people to want to purchase, and therefore driving the price up... but I believe that, in the end, you will spend more on the house. When I refinanced my house, the lower rate saved me like $20k over the life of the loan, but the house appraised for $70k more than I paid for it. If I were in the market, I would wait it out, if I could.
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It’s better than paying fucking rent. I’ll tell you that much.
 
paradisePWoffrd said:
I know that the low interest rates are driving people to want to purchase, and therefore driving the price up... but I believe that, in the end, you will spend more on the house. When I refinanced my house, the lower rate saved me like $20k over the life of the loan, but the house appraised for $70k more than I paid for it. If I were in the market, I would wait it out, if I could.
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It all depends on the math of what interest you pay now and how much you owe, vs how much less the interest will be and how much more the purchase price is. If you drop 1% in interest rate, that could mean 25% more borrow and the total amount spent is the same.
Now, I suspect few people are upgrading and their cost cgoes sup only 25% - but then you are also likely getting more/better house too.
Plus keep in mind that maket values tend to change as a percent of the base, so if you start high and go higher by the same percent as starting lower, your net difference in dollars is more.

But all that said... obviously it's a sellers market, not good to be a buyer at all. Best is to be selling and holding the cash (well, investing elsewhere) if possible.
 
Related, some neighbors down the road built a new home 3 years ago and rented the one in the neighborhood. The family is military and are moving in June, so they put up ads on FB looking for renters.
The reply posts are hilarious, basically everybody is saying "You are crazy, just sell the house you will make sooooo much money right now."
Meanwhile my wife and their neighbor are like, "No way, let us help you interview applicants bc we want to pick somebody that likes margaritas and dosn't have stupid kids."
 
RatLabGuy said:
Related, some neighbors down the road built a new home 3 years ago and rented the one in the neighborhood. The family is military and are moving in June, so they put up ads on FB looking for renters.
The reply posts are hilarious, basically everybody is saying "You are crazy, just sell the house you will make sooooo much money right now."
Meanwhile my wife and their neighbor are like, "No way, let us help you interview applicants bc we want to pick somebody that likes margaritas and dosn't have stupid kids."
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Welp... so these folks decided to sell.
They had no hurry, the renter are there til june 30.

They listed the house last Thursday. 385k. FYI my neighbor was the most recent purchase, 13 months ago, at 330k.
Between Friday and sat night they had 37 showings. Let it known theyd take all offers and decide today at 5pm.

Well... they took 425k, all costs covered, no contingencies, w a good agreement for the current renters protection of their last month.
Jeebus.
 
A friend listed her house near downtown Raleigh about a week ago for $475k. House went for $38k over asking. Nearly $150k more than she paid in 2016-ish. She moved out near @DSM Turbos .
 
I do the same thing in Pitt County, but on a smaller scale, mostly because of lack of time and funding availability. But it’s getting ready to grow some. :)
 
What happens to all these home buyers when the houses go back to the value of where they should be?
 
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