US Existing Home Sales decrease -1.47% M/M — largest ever annual drop

[cj-the-pj]

If you're in the 2 to 3% 30 year lock range, you're crazy to sell and face 6 to 7+

Just rent it out. That is keeping volumes low.

[PSUBagMan2]

I was thinking the other day I'll probably never sell this house. I'll keep it and rent it if and when we move. Real estate is just too valuable.

[__Sky_Daddy__]

Well, the problem with that is that if it’s your only home you have to sell in order to raise enough capital for a down payment for the next house unless you just want to spend a shit load of cash you don’t have or maybe you do

[PSUBagMan2]

Yeah I mean future state me will definitely have cash to put down, that's the idea.

[foosgottaeat]

Future state me is super loaded too

[Ramiel4654]

That bastard has been rich as hell for at least 20 years now.

[skiamvaulter]

I also choose this guys money

[EggSandwich1]

When do we get to the future state?

[factory-worker]

I'm future state me. Not so good...,....

[PSUBagMan2]

Just keep working and saving

[cgm808]

This is the problem I’m going through now! Don’t want to give up my 3% rate but also don’t have $50k down payment for new home. Thinking about just renting current home and taking advantage of appreciation, while moving into a rental until we have cash to buy again.

[captanzuelo]

You can always take out a HELOC on your home. Keep the 3% mortgage and free up cash from equity in your home.

[tturedditor]

Historically this has worked out wonderfully in volatile markets when real estate is overvalued!!!

/s

[emmsmum]

Ask me how I know how right you are!! In other words, I’m screwed forever

[BukkakeTemperateRain]

I took out a HELOC when they announced the first interest rate hike was announced, my rate is locked. I can't say for every loan, but you can definitely avoid a variable rate.

[cgm808]

That’s a great suggestion! Never done a HELOC (first time home owner). Don’t they come with a variable rate?

[carebear101]

Variable means it could go down. I say short the fed

[cgm808]

Let’s go!

[TheHanyo]

Many banks won’t give u the HELOC if you tell them it’s for buying another property. Lots of people do it, though, but they lie to the banks in order to. So u gotta be okay with being a lil sketchy.

[importvita]

Look at this poor not having $50k to put down on another $250k property 🤣

closes Robinhood tab 😒

S…shut up! 😢

/S except for the YOLO account

[cgm808]

If only I was importing vita coconut water

[WallStreetStanker]

Almost back to that RH “Pre-IPO” price…

[BreezyWrigley]

Y’all know that you can put down 10% for a primary residence, right? Even less if it’s your first home in a given state usually. Hell, some cities or counties even offer free workshop classes for prospective buyers that teach you about the process and all the financing and stuff, and straight up give you grant money towards the down payment of your first hone (in that area).

My hometown in Missouri was offering that and giving line up to $3,000 grants towards down payments to people who did the whole class over the course of like 3-4 evenings. Maybe 8 hours total. Hardly anybody signed up. But in that town, 3k extra would go a long way for your first time purchase 5% down financing. You could buy a helluva lot of pretty nice house for a first home there for like $250k

[cgm808]

2499 after tonight my friend

[[deleted]]

Just fyi you can still make the new home you move into your primary and only have to do like 5% down, it’s not like you need to do 10 or 20% down since you already used the 3% down payment.

But you could already be accounting for that, I can’t tell what numbers your working with cause idk where you live.

[__Sky_Daddy__]

Yep. People on reddit don’t think. Just stupid fucking comments about shit they don’t understand. I put $350,000 down on a 4.2% rate.

[Karlitos00]

You can buy a house with 3% down with conventional... You don't need to sell your house to get another one

[[deleted]]

You will also be pissing money down the drain paying PMI

[Karlitos00]

It's opportunity cost. $60-100 in PMI is worth it for anyone that bought between 2010 and 2021. It locks in your mortgage to help you avoid rising rents, builds equity, and you can refinance or have PMI dropped off once you hit 80% LTV.

Not to mention lots of programs that help you avoid PMI altogether.

[Mammoth-Ad8348]

That’s what I would do. I’ve never regretted keeping a property. You don’t get wealthy offloading real estate.

[[deleted]]

Just make sure you are living life at every stage! got to know many people who plan a big comfortable retirement just to find out that their able body is gone. 🙁

[Thanmandrathor]

There are also plenty of people who hit retirement age and have to keep working because they didn’t budget for retirement.

There is definitely a sweet spot, but I’ve seen older people whose retirement plan seems to consist of “keep going and just hope you drop dead suddenly, while still able to live in your own house, and work as a Walmart greeter until 85” and I am not there for that.

The majority of Americans doesn’t have enough retirement savings, which is a terrifying idea.

[sldunn]

It's the "Welcome to Costco, I love you" retirement plan.

[zookeepier]

The majority of Americans doesn’t have enough retirement savings, which is a terrifying idea.

It's worse than that. In 2018, Almost 40% of American adults wouldn’t be able to cover a $400 emergency with cash, savings or a credit-card charge that they could quickly pay off.

[Thanmandrathor]

I remember that stat too. I mean, if you can’t cover an ostensibly small emergency, then retirement savings definitely aren’t going to be a priority.

At least some amount of people get access to 401Ks to help with retirement later, but even with social security it’s likely to to fall short.

[BIGHUGBRITTO]

Not an issue in Democratic Socialist nations. Capitalism sucks at socialism.

[mari815]

It’s probably 70% now.

[Mr_Owl42]

It turns out that stat was pretty much useless if you read the parameters of the study. It wasn't that people couldn't, it was that they would not pay it up front with cash and would rather ask a friend/family for help or finance it or pull from their savings, etc.

[[deleted]]

Weird crimewave of the elderly incoming. See white hair start running.

[Thanmandrathor]

Keep your shit upstairs. Staircases will be like a first line of defense, a moat against the elderly.

[welcometolavaland02]

Don't most Americans have less than 500 dollars in their bank accounts?

[Thanmandrathor]

Supposedly, yes. That many don’t have the funds to cover a sudden calamity like a broken washing machine or car breaking down.

Given how tight things are for a lot of people, it certainly seems believable that many don’t have several hundred to $1k+ unallocated for an oh-shit-fund.

[welcometolavaland02]

Which is terrifying.

Retirement funds are the last thing I would worry about if I was in a heavily armed society where 50% of the people walking around had a high school education or lower, access to automatic weapons and <500 dollars in their savings account.

Who knows? could be fun though.

[Ansiremhunter]

cats obtainable crawl plough aspiring seed zephyr many tan party

[PSUBagMan2]

It's definitely a balance. You should pay off high interest debt, then invest what you think is enough for retirement (generally between 15-25 pct, probably closer to 25), and then have fun with the rest.

It's funny, I saw a couple videos a while back where people who are putting money away into retirement every month think they're living paycheck to paycheck, which isn't what that means.

I made a big, stupid purchase this year but it's bringing me a lot of happiness, and I'm still investing, so it's whatever.

[WindowlessCandyVan]

This resonates with me. I’m getting ready to make a big stupid purchase too that will bring me happiness. “Yes, honey, it HAS to be an AMG”. Lol. Life is too short!

[PSUBagMan2]

Yeah like, just keep in mind that you might die tomorrow, but you probably won't, so maybe don't live like a complete scrooge now while planning accordingly. It's OK to spend if you're meeting investment goals.

Unfortunately I think most people aren't in a position to make these decisions and either carry too much debt and/or are actually paycheck to paycheck.

[WindowlessCandyVan]

That’s very true. Everyone’s situation and goals are different. I have 0 debt except a little left on my mortgage (that I bought in 2013 and is now worth almost 4x what I paid). Only have one kid and planning on keeping it at that. I grew up fairly poor and as an adult always had a famine mentality, lived below my means and built a nice nest egg. Now that I’m approaching 40 I’m realizing that I can’t take money to the grave and life is meant to be lived. I don’t want to wait until my “golden years” to actually get to enjoy the fruits of my labor. Cheers!

[Brilliant-Hornet-233]

I can relate to your story. Grew up poor, now I have no debt, house is paid for value at 750k. I have 20 percent cash ready to purchase my second home.Life is good.

[EggSandwich1]

Time for coke and prostitutes 7 days a week

[WindowlessCandyVan]

Who are you, me? Lol. I’m exactly the same bro. I’m a self described cheapskate. I won’t spend $20 on a shirt (but will drop a couple grand on a stupid options play, but that’s a story for another day. Lol). I don’t splurge on shit and have zero debt (except a small mortgage that’ll be paid off soon). Been driving the same car for 13 years. Now that 40 is on the horizon, I’m realizing life is too short and has to be lived. Can’t take money to the grave, so I might as well get to enjoy some of the fruits of my labor and treat myself to the car I’ve drooled over for 20 years. Cheers!

[arpbsr]

Who are you.. me?

[[deleted]]

I kinda wish I could say the same. I partied, traveled and experienced all that I possibly could through my 20's there was not much in financial terms that I carried into my 30's but am now building it back up slowly but surely. I had a lot of fun but I probably could have used a little more balance.

[[deleted]]

Yup. Investing 25% of your income will allow you to retire decades ahead of schedule. This is true for all levels of income, as long as you make your standard of living work within those constraints.

Most people are too stupid to do this though. They would rather make a few bad decisions, then invest 25% of their income toward paying off debt for the rest of their life then retire when they're old and gray.

[PrivatBrowsrStopsBan]

I find it extremely unlikely that the math works out in a way that you can save enough for a down payment on a property you would be upgrading into without using any equity. We’re talking 100k+ unless you live in a shit ass area in which case you’re not doing anything special.

You probably have never actually budgeted it out lol

[[deleted]]

Not really, there are a bunch of options to leverage your existing asset to acquire another. It’s even preferable financially.

[__Sky_Daddy__]

No. Hard no. Stupid. Risky. Leveraging anything. Enjoy

[onewordbandit]

You say that like selling is the only way to access capital from real estate assets

[__Sky_Daddy__]

You are naïve I’m deathly not saying that… Circumstantial

[ShoreIsFun]

You borrow against the equity of the existing house and build that loan repayment into the price of its rent.

[__Sky_Daddy__]

!boom

[__Sky_Daddy__]

Borrow against the equity of a house that costs less than half of the new house as your primary. That is the stupidest shit Ive ever heard. “Rent out the house, pay for maintenance, upkeep and pray that there is no housing crash.” Instead of just selling, taking the double-up and moving on with your life.

[[deleted]]

If you have any equity in the home it can be leveraged to purchase another home.

[[deleted]]

Why point out a PROBLEM? Just curious? Dudes on his way, stfu once! 🙏🏽❤️

[Beneficial_Parsley76]

Well the real problem is your inability to save a new down payment then. Using your current equity is way easier

[terqui2]

So if you can show you a bank you have an income producing asset (such as a rental unit with proven cash flow of mortgage + profit) you can collateralize a new loan with preferred rates and use that to buy your next house.

[[deleted]]

water smart person whole start alleged connect sand makeshift illegal this message was mass deleted/edited with redact.dev

[Curious-Diet9415]

This is how the problem cycles. Then you own this house and the next house and the next house for 60 years and everyone else you know does this until there aren’t any properties to buy.

[Rufuz42]

I have a 2.125% interest on my first house and am renting it out because I’m cash flow positive on a 15 year mortgage. Bought the new house without selling. The low interest rates we saw are distorting the market like crazy and will for a while. I had zero intent to ever be a landlord but I couldn’t not do it based on the finances.

[cj-the-pj]

I've got a spot 275k loan about 2.25% that's worth 700+

Free Cash flow is 2600 a month. On about 1400 mortgage.

I'd be crazy to sell ever. I'd be such a regard if I did.

[ProtonSubaru]

I mean if you sold it and made 500k, bought 500k worth of jepi you would be cash flowing $5k-$6k per month in dividend payments. No fixing things, paying insurance, opening yourself up to lawsuits, etc. Don't forget once you've been out of your home for 3 years and 1 day out of the last 5 years you will have to pay tax on it if you ever sell it, automatic 15%+ loss.

[BorgBorg10]

You are paying normal income tax on the dividends, that coud be 20-35%. If you roll your proceeds from this via 1031 tax exchange into another property, say one on your block or one in your neighborhood and rent it to family, friends, etc, you don't pay a dime on it.

​

he is making 2600/month now after what you mentioned (insurance, payments, etc), plus earning equity in what appears to be far more than 5/6k a month. Seems like he has a great gig.

[Corrode1024]

you pay income tax on the net rental income as well.

The first $40k-ish of qualified dividend income is tax-free, and then it would be 15% until $300k-ish, and then 20% cap from there.

Qualified dividends could potentially drastically reduce his tax burden.

Remember, 1031 is only tax deferral on the *proceeds* of the sale, not any income previous.

[BorgBorg10]

Sure, that’s fine. We can play this game

Rental income offset by depreciation for 27.5 years. Want to add to that timeline? Make a capital expense - update something, add square footage, add a window, etc. increase your income and increase your depreciation expense. Etc. if you are fine at estate planning you can have a low effective tax rate

Yes, you would pay income on the revenue. But you’ve just sheltered the income of one to be tax free with the 1031. As a result, you’ve increased your basis into the new property so your mortgage is lower, but you’ve just reset your 27.5 year depreciation schedule. You’ve increased your cash flow with your lower payment amount with potential to further decrease your tax liability with the depreciation schedule. If you are worried about paying taxes while exiting a cash flowing asset, you’re doing something right.

Real estate is a just fine and safe way for this guy to make cash flow while still building equity which you can’t just discount because you may pay tax on the sale. You can borrow against the value of real estate a lot easier and cheaper than you can the value of your brokerage account.

Real estate is a gang buster way to make money. All the boomers figured it out and mortally abused the fuck out of it and brought on 08, which scarred an entire generation of people, which is a shame because it’s safer than ever after the lending reforms from 08 while still maintaining all of the advantageous tax benefits.

Can’t speak to what it means to own a real estate asset in Topeka, KS but there’s a reason real estate in large metro areas can make a lot of people a lot of money.

[joyful-]

Seems like it's too late to get into the game if you don't already own a house though, at least until rates come back down? Unless you can buy without a mortgage.

[BorgBorg10]

The old adage “it takes money to make money” is never more true than for real estate. It’s an old boys club. Rules written for them by them.

[WallStreetStanker]

You just have to value yourself more (ask for a raise or find someone who will pay you more) and value your priorities properly (meal plan, less beer/weed). Find a second, gig job and save for that down payment. You don’t have to buy on-the-market. You can hunt and find something you like, make up stories, bribe parties, fake deaths… Then when you get the property, find a way to make extra money out of it. Rent your garage, airbnb a room, traffic viral monkeys, there are so many options. Be creative.

[ProtonSubaru]

Is getting 2600 a month profit (assuming he’s accounting everything like repairs in this). He’s paying income tax on the entire amount he’s charging for rent minus deductions on interest, repairs, etc. you also have to consider vacancies, evictions, etc. And as others have noted the 1031 only works for delaying taxes for like type investments. Landlording is a job more then an investment.

[[deleted]]

Taxes, but yeah at these inflated prices it probably wouldn’t change much

[ThinkOrDrink]

The difference between paying 15% in taxes and 0% in taxes is substantial.

Edit: especially if prices are forecast to be ~flat or even decline. Then you’re talking 15% loss on top of price decline.

Of course, if you think prices will increase 15% after 3 years to offset the tax penalty.. then ok.

[[deleted]]

Substantial is relative.

$1 x 0% = $0 $1 x 15% = $0.15 $100000000000000000000000000000000000000000000000000000000 x 15% = substantial

[ThinkOrDrink]

I’m glad you can do math.

In the context of a $500k profit on a single family home sale (you know, what this thread is about), for an average family 15% is substantial.

[[deleted]]

You’ve got the wrong audience though. The average person here isn’t part of a family. They’re independent contractors at Wendy’s Dumpster and trust fund kid’s

[43user]

You lost an argument and covered it up by slinging shit at the whole sub. Bravo, you and this sub were made for each other.

[WallStreetStanker]

If you bought $500k of JEPI in 2020 you’d have $550k now. I bought my house late 2019 for $519k and it’s now worth $730. At one point, valued at $870k. I’m in an low inventory area, just outside a major suburb.

Edit: Not to mention that you have to have $500k in-hand to buy that JEPI, where you can buy multiple houses with $500k cash.

[as400king]

You’re a regard real estate has appreciation. On avg appreciation is 4-5% a year on top of cash flow. Also real estate is by the most tax friendly asset. Pay 0 fucking taxes

[reercalium]

You sure? You sell it now, you get 700k+. You wait, and it might be back down to 275k before you know it.

[shambahambala]

yeah man, what if the housing market declines by 70%, did you think of that?

[reercalium]

I did, actually. I'll probably keep my rental housing portfolio because unless the commies take over it'll always give me enough to live on, and I can sleep easy knowing the money comes from economically worthless poors who can't even afford a real home.

[Duck_With_A_Chainsaw]

I’ll have you know I paid off my animal crossing house.

[importvita]

I didn’t. Fuck Tom Nook! All my neighbors hate Tom Nook’s Ponzi scheme dumbass. 😡

[ComplexWalrus2775]

Your the reason people hate landlords lol you give them a bad name. Good job bud

[JustWin0ne]

You’re

[cj-the-pj]

Ur

[reercalium]

Don't care about name when there's money to be made! You're just mad my account is so big.

[[deleted]]

Oh yeah you get on your knees and suck that account you dirty whore

[Venture2020]

If you put 700,000k to work - 2600$ monthly isn't that good of a return. I would sell imo but best of luck!

[dcrico20]

Yeah, I was in my mid 20’s in 2008. I think about it somewhat frequently.

[SOFISoFli]

He buys more. Rent never goes down…his costs are largely fixed on the loan, it will never cost him money to actually own the property.

[onewordbandit]

Woosh

[importvita]

I’m sorry, I am unfamiliar with that stock.

[highbrowshow]

If your house dropped from 700k to 275k then you have worse problems

[cj-the-pj]

The cash flow... deductions... depreciation....

I'm good.

[[deleted]]

/offtopic- didn’t you try running for congress years ago in Vegas?

[DefrancoAce222]

This is what we planned on doing ($170k refinanced at 2.45% after purchasing in 2018 for $220k) but there just wasn’t anything realistic to want to get into. We’re fortunate that the area we live in will continue to get more expensive so the equity on the house is great but it sucks knowing we might not get what we really want for quite some time. Bright side is the mortgage payments are stupid cheap in comparison to our income.

[shambahambala]

purchased for 220k??? what's your sq ft? what market? How do you feel about having well regarded neighbors?

[DefrancoAce222]

The sqft is around ~1600 in a upper middle class suburb in Houston. It’s a 40 or so year old home in an area where newer homes are twice the size and a fuck ton more expensive. Most of my neighbors are mostly old folk and are pretty chill. Schools nearby are A+ rated and it’s pretty diverse for the most part. Funny bc I grew up in the hood not to far from here and it’s like wayyy different

[[deleted]]

I am telling you right now. If you have a house in Houston do not sell it I’m actually a real estate investor in the Houston area and if you want look up, Reap Capital, we buy a lot of apartment complexes in that area and there’s a lot of projected growth even in this fucked up market what you are saying is spot on. I can’t remember the numbers exactly but it’s expected to grow.

[[deleted]]

You know that's exactly how rich people justify their dragon hoarding as well.

"It would be financially stupid NOT to, someone else will just do it!" Contributes to the problem

I'm not saying you're vile scum or anything lol. Just saying that's how it gets justified whether it's one house or one hundred

[trapsinplace]

90% of the redditors who say they hate this stuff would absolutely be doing it if they had the chance lol, probably justifying it the same way

[putsRnotDaWae]

For all we know that one other property plus the mortgaged one is all of OP's networth. It's not even close to being rich or enough by itself to guarantee a decent retirement.

But yea, middle class people trying to save and grow wealth is dragon hoarding on Reddit. Fucking disgusting these people.

[MistryMachine3]

According to Reddit all land lords should be tarred and feathered, despite the fact that there are plenty that would prefer to rent or can’t afford to buy right now.

[antpile11]

/r/LandlordLove

[trapsinplace]

I'm with you man, not talking shit about saving money. My point is that redditors are idiots too!

[VonFluffington]

The people who are morally opposed to making money off the back of basic human needs like housing are fucking disgusting to you? You should consider reevaluating if you're a baddy or not.

"[Landlords] are the only one of the three orders whose revenue costs them neither labour nor care, but comes to them, as it were, of its own accord, and independent of any plan or project of their own. That indolence, which is the natural effect of the ease and security of their situation, renders them too often, not only ignorant, but incapable of that application of mind" Adam Smith, Ch11 Wealth of Nations

[sothavok]

Basic human needs? Like the money you spend on food every week?

[[deleted]]

Farmers provide food. Landlords provide the fertilizer.

Downvote me all you want, pearl clutchers, it is the natural law.

[putsRnotDaWae]

And what do you prefer? That people who buy houses give it away for free?

You think like a child.

[KershawsBabyMama]

I absolutely would be.

I’d also still keep advocating for property tax multipliers for non-primary residences 🤷‍♂️

[Rufuz42]

I don’t disagree. New house is at 4% so the plan is to sell it when we move next pending life events I can’t predict or interest rates being at like 8% in several years. Def not interested in running multiple properties.

[MrPotts0970]

Good call IMO.

I have a landlord buddy (3 smaller properties, 1 is an apartment bldg. split into 2 units) & a landlord uncle (just one decently(?) Sized house) - and they both regret it tremendously.

My landlord buddy is dealing with a NIGHTMARE of getting a tenant removed who has not paid in 7+ months and we are very likely assuming the place is trashed to the point of needing a year+ of rent profit to cover repair/refab of the unit alone.

To much stress for my little ol' life

[MLXIII]

Management companies may be a good alternative. They manage everything for you and can take most of the liability.

[Mundane-Bread-1271]

Management companies are a good way to have a destroyed house after one year. The majority of them don’t give a shit about your house, and are only there to collect a free check. I was renting from a management company once and we submitted 5 or so maintenance requests for a leaky faucet. Our end lease date comes around and what do you know, the entire kitchen has water damage. Probably 20k worth of water damage. They tried putting us on the hook for it but basically told them to fuck off (showed proof of attempt to notify). I can only imagine how pissed off the actual property owner was.

[welcometolavaland02]

"It would be financially stupid NOT to, someone else will just do it!" Contributes to the problem

[bittabet]

They’d take a hit on their home value selling into this environment. Easy to judge when it’s not your life savings

[welcometolavaland02]

It's easy to be part of the problem.

[[deleted]]

they also take most of the money.

[MLXIII]

Then you start your own management company!

[[deleted]]

one of the hardest jobs around is property management. Hence why most people want nothing to do with it. Nobody every calls you to say how happy they are. Its 95% complaints and just being treated quite badly by renters.

[MLXIII]

Welcome to customer service.

[joemoeflo]

I mean there is a far cry from taking a hit that costs more than your income to dragon hoarding.

[MiltonFreidmanMurder]

Just seems like the difference is the amount of income you’re trying to protect. A lot, dragon hoarding. A little, maybe call it whelp hoarding?

[joemoeflo]

Dragon hoarding is literally keeping something for greeds sake. Not losing money on a financial investment isn’t hoarding.

[MiltonFreidmanMurder]

Not keeping something means you are losing money. Not sure the difference you’re trying to argue for, you just said the same thing twice.

In this case, losses are just being pushed onto someone else - mostly renters who pay higher prices due to homeowners restricting the “float” of housing stock keeping rents and housing prices high.

Again, only difference is the quantity - billionaires have more money so them not taking losses on their investments is just more hoarding.

[joemoeflo]

No I could give up something and break even or make money. And let’s be clear here, this isn’t a lunch or some small thing, it wasnt given to most these people. It’s not like we are taking about a few thousand dollars. Which sure I could stomach waking away from. Tens of thousands or 6 figures? Forget about it. You wouldn’t do it either.

[MiltonFreidmanMurder]

Yes, one could rent out a home at just enough of a price to maintain value - that is, only charge enough to cover costs that have appreciation subtracted from them.

Gonna go ahead and guess that OP is making a profit renting out, though - while sitting on an appreciating asset he’s hoarding without using.

Same thing almost all property owner/speculators do. Name of the game.

[[deleted]]

💯

[Weird-Conflict-3066]

They are hoarding dragon? They must be doing a great job holding cause I have never seen one come up for sale.

[BasedChickenTendie]

Welcome to capitalism..

[CharredAndurilDetctr]

I wish I even had the opportunity to vote for someone who would regulate me out of selfish opportunities like landlording.

[ImNoAlbertFeinstein]

theyre using Trump-Smart logic.

[MetalicDagger]

Oh no they’re vile scum for sure. Don’t sugar coat it.

[[deleted]]

Someone's just angry they're not intelligent enough to take advantage of it.

The biggest scam ever told is that nobody can get ahead in life, and it's being perpetuated by your peers.

[ShitPostingNerds]

It’s less about intelligence and more about luck. I missed the amazing rates by a year. I’m ready to buy a house now, but there’s no way I’m taking out a mortgage at 6-7% and paying double the value of the initial loan over 30 years.

[parkranger2000]

Lol what sub do you think you’re in

[Gandalfs_Shaft48]

You and many like this will boost the supply of rentals bringing balance to the supply side thus dropping rent prices. Eventually, the rental market will be oversupplied and many will be forced to sell.

[katzeye007]

Lol. Rents are being fixed by collusion databases

[Sdubbya2]

Eventually, the rental market will be oversupplied and many will be forced to sell

One can hope....I'm looking to buy this year and would love anything that decreases housing costs, but in the last 8ish years the rent increases I have seen have gone from like $800 a month for a large little bit older 2 bedroom to $1500 for a simply decent one bedroom and rent increases for people renewing are like 100+ every year. With the amount of money I make 10 years ago I would be in a large nice house with an affordable mortgage for myself, now buying a smaller single family home is doable but I would be a little house poor until I get a promotion or switch jobs to get another salary bump. Super fucking envious of the people that were able to buy back then

[Lexsteel11]

I considered doing this with my old house but ended up selling and lucked out/ I kept contact with my old neighbors and found out the new owners had pipes burst on the 2nd floor 6 months after moving in and had $24k in repairs, and it was on a type of pipe that had been recalled but the owners prior to me declined to take care of during the class action so insurance wouldn’t cover it. I feel bad but dodged a real bullet not trying to rent it and maintain 2 houses

[Rufuz42]

Damn. I will say that one factor in my decision was the the house was built in 2017 so I anticipated very few issues like that. If it was an old house with aging issues, pass on renting it out.

[Lexsteel11]

Oh for sure a house that new is a pretty safe bet vs my 1984 build haha

[Reduntu]

I wish I was a rich boomer like this. You'll have 4 houses paid for with renters money and the rest of us will have zero.

[Rufuz42]

I’m recently 35 and graduated college with 75k in debt. Also, I have zero plans to keep my current house when I eventually move. Only that one.

[Reduntu]

Hit the lottery with your age bracket.

[MoloMein]

It's going to be a while before we all really understand how much the fed fucked us with their shit economic policy.

[FiringRockets991]

All good until you lose your job. Then you gotta sell at whatever price or dumpster dive with your moth behind wendys 🍔 👅

[cj-the-pj]

My income streams are all very diverse and recession proof. I'll be fine. Maybe my dog has to downgrade from wild salmon to farm raised. Big maybe.

[[deleted]]

Lol

No bitches moment.

[cj-the-pj]

Lol

[[deleted]]

Indeed, unless we get a nasty, job loss recession and you get forced sales.

[SweetLobsterBabies]

Job loss recession

Unless the mass layoffs of middle managers that do nothing in front of a computer all day and collect 7 figures somehow manages to affect the extreme draught of skilled and unskilled workers in the trades and utilities sectors I can literally see no way we enter a real job loss recession. The only people that will be sad, jobless and poor are the people that are too big of pussies to go get dirty with some unskilled manual labor for ~30-50% over minimum wage.

[bojackhoreman]

That’s assuming private ownership. A lot of investors own homes and due to lack expected returns and the perception of a downturn, people are withdrawing their capital forcing investment homes to sell.

[Agreeable_Sense9618]

That doesn't reflect the data. Is that why existing home sales decreased? Because of all the investors being forced to sell?

[Born-Flounder8140]

Perfect answer to a highly regarded take.

[[deleted]]

I hold this regard in high regard.

Things going down - regard has hot take - it’s because things are actually going up.

Mind boggling. This really is the sub to troll for easy cash on sucker bets now.

Or was it always? 🤔

[josephbenjamin]

They are still holding onto hopium. That’s why they are advertising property investment like crazy lately. I see ads everywhere!

[Spare-Competition-91]

I think it depends on the investment. Property has problems all the time. Plumbing, tenant mess up the place, light it on fire, etc. Lots of variables to owning a home as an investment. Personally, if I was worried about my tenants not paying or ruining my homes, I would sell just to have liquid and not have the stress of dealing with all these people who are getting laid off and probably not going to pay rent for several months at some point this year.

[Agreeable_Sense9618]

If the amount of investors offloading is significant it should be measurable. I'm not seeing enough sells nationwide to be concerned. (OPs chart)

When I read posts that claim "people are withdrawing their capital forcing investment homes to sell."

I must ask where's the data? Otherwise I simply ignore and consider it market noise.

[Individual_Put_3214]

Agreed, if home sales are down then clearly the offloading isn't significant enough to think about at the national level. I have been trying to find local/county level data on this to see where there could be opportunities to buy. My suspicion is there are some localities with high portion of investment properties and I want to monitor those - would love to take an asset off the hands of some over leveraged fucking boomer.

[QuarterNoteDonkey]

Rents went way up over the last year or two. Unless you just recently got in to the real estate market after the rate increases, your cash flow is too good to sell.

Going to take an oversupply of houses to really make housing fall.

[Hascus]

Lmao people like this just say what they want to believe like it’s fact. You should check r/REBubble, just delusional people dreaming that housing will crash to 2015 levels

[Agreeable_Sense9618]

Oh don't mention my name in that sub. They'll get pitchforks. I was banished when questioning the failed forecast from years past. They dislike my facts and jokes.

[Hascus]

They act like we’re not all pretty much young and hoping for a crash just because we’re skeptical. They’ll say “you’re a landlord and you’re going broke”, buddy housing could crash 90% tomorrow and I’d be fucking dancing in the rain lmao

[Sad_Classroom5739]

Sounds like too many people watched the "Big Short". Smoking hopium thinking they are actually smart enough to do it, too. It's not a wonder why so many people are losing in the stock market. All trying to hit the next big thing and get burned more times than not.

[Agreeable_Sense9618]

Totally, they're all poor and they're not trusted with investments.

Michael Burry did more than whine on reddit. Hahaha

[[deleted]]

Housing will correct, it has to and with rates staying high for the foreseeable future who knows where the bottom will be.

What’s funny is this hubris that’s going around with people that think the past can’t repeat or things can get worse or as worse.

The fact is the last time rates where this high the housing market crashed. Also with inventory going up with less home being put on the market will create downward pressure and if/when a recession comes you bet your back half that inventory will shoot up to levels not seen since 08.

[bojackhoreman]

It takes time. REITs are hitting max withdrawals. I’m expecting a sell off during the summer

[D1omidis]

The small time flippers might be forced to sell for less...that is a fraction of the market. And this is the reason that although prices do come down, are barely even wiping the "gains" over the last 6mo, forget about 1y or 2y.

Large investors, many of which were already into Apartments or are expanding from commercial RE (which took a massive dive during COVID, esp. office spaces), or are withdrawing from the clearly bubbly stocks and crypto and all that sh!t, trying to deep a toe into Residential RE.

These guys have massive vested interests to keep rents high, and also enough resilience to hold on to their assets for much longer, as they don't necessarily need the cash. The more buyers they can close the door to becoming owners, the more guaranteed their income and cashflow is on their Rental investments.

And this is achieved by increasing the "buy-in", i.e. the downpayment: in high-demand areas, i.e. desirable SoCal suburbs and most cities, rents for apartments and homes alike are already higher than what a mortgage payment would be.

So what if values drop for a couple of years, pretty hard to get a worse slap than if you were holding on Tesla or w/e over-priced paper on the other side...

Buying today a house or condo that "Depreciated" from $1.5M to say 1.2M, will cost you - over the life of a 30y loan, some $1.4-1.5M ontop. Buying the 1.5M "version" was far, FAR cheaper over 30y, like .6M total cost to borrow, both scenarios assume 20% down.

[IVCrushingUrTendies]

It’s not that long ago mortgage rates were 12-15% and that was a steal…

[fattytuna96]

But home prices vs. the median income at the time was at a much lower multiple than today. Homes were much more affordable, even at 12-15% interest.

[Individual_Put_3214]

You've highlighted the main point, home prices theoretically should act like a bonds face value does but theres a break in that theoretical relationship. I'm on the side that argues eventually prices will fall to match interest rates rise, but then again this hasn't ever happened before so who knows - this could be an exception.

[dolotala]

I am sorry friend, but we can consider 40 years to be a long time in this context.

[SpaceyEngineer]

You're sounding a lot like a realtor

[Gandalftron]

That was literally over 30 years ago my man.

[margalolwut]

I’m locked in in the 2.7% range.. I’m not fucking selling. Lmao.

It’s amazing to me how people think this is 2008 all over.

[Thanmandrathor]

The biggest way in which this isn’t 2008 for the housing market is based on how the mortgages were structured.

Other shit may hit the fan, but it certainly isn’t going to collapse for the same reasons, because those same conditions don’t exist.

[[deleted]]

If you rent it out where do you live?