Another Housing Crash

[djd09]

"DeFranco further said: “Our research shows few signs of a housing bubble because the typical warning signs aren’t present. Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill.”

Boston, a city millennials love continues to have inventory and affordability issues. According to Zillow, the median price for homes currently listed in Boston is $735,000.

“I would be surprised to see a slowdown. I see increasing demand and very good appreciation,” adds Bates who is also known for writing about the Greater Boston real estate market for Banker and Tradesman, Boston Magazine, The Boston Globe, Boston Herald and Boston.Curbed.com.

https://www.forbes.com/sites/ellenp...e-a-first-time-millennial-buyer/#310b712d1885

I love it. The banksters telling you not to fret. hahahahaha

 

[Mr Rex]

Are you renting? How much are you saving over ownership?

If not why not with all the rhetoric? I don't disagree that we may be on the way to another bubble giving the government involvement in artificially lower rates etc. but I totally dismiss your premise that you can rent for less currently and come out ahead later. Investors are not renting properties under their market value in most cases which means in the majority of cases, if you qualify for a loan you will pay less than if you don't and must rent. The reality is that most investors would rather turn their money over and sell now in a low interest market than hold and rent. Do your own research, but it is what it is.

 

[djd09]

This is not about me. Believe in the crash or not. I don't care. The prices in my area are beyond bloated.

 

[Mr Rex]

Including rental prices. Get it?

 

[Overimprovement]

Each rental market is unique. There are some areas where it makes more financial sense to rent, others, to own. Invariably, length of stay comes into play. If one plans on living in an area for 12 months (say a visiting doctor or student), unless prices are appreciating rapidly, it typically makes more sense to rent, due to the closing costs on both ends.

There are several rent vs own worksheets on the internet, but the main point is it depends on length of time involved, and local market activity. It also depends on borrower's credit and financial condition. If credit is tight for that individual, or they have zero savings, they may have no real choice BUT to rent.

 

[Bob Ipock]

I saw a mulitude of new for sale signs up today. The wise home owner will reconginize the over priced market and try to cash out. Now the supply and demand puppets can chime in.

These sellers have to buy another home.......at top of the market prices. They can cash out but they can't replace the home for the same money.

 

[Mr Rex]

Doh, the prior poster intimated that a qualified buyer would "profit" from exiting ownership in favor of becoming a renter. While no an expert in all US markets, I can say IMHO that in the markets I am aware of that include rural, suburban and urban market areas with great diversity, that this is simply not true. Rents are higher than they have ever been but investors are willing to sell below the income value as they recognize the market dynamics that created this artificial bubble are not sustainable. The Real question is can the economy outpace the decrease in value created by a natural and required increase in interest rates or will the Obama administration go down as the worst abomination in the economic history of the US for not letting the market correct itself. Not to say that the Bush administration and Greenspan in particular should not be hung as an enemy of the state for his actions as Fed Chair. MHO. YMMV.

 

[djd09]

Some one call the rent is too dang high guy. In the end high rents will only slow the bubble bursting, but will make the explosion bigger. Stagnat wages, inflation, and a major disconnect from wall street to main street will be a storm to watch.

 

[George Hatch]

I think rents provide a floor for sale prices. If the costs of owning aren't way out of line with the rents then there's not enough margin to lose because at whatever point the properties cash flow off the rents then the investors will buy.

 

[djd09]

Fannie sale price confirmation bias propaganda is coming at about the right time. Gotta blame someone.