When will it reset or crash

[Anonymous]

Anonymous wrote:Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.

Here come the "how dare you" hog a house when other's need one crew!

[Anonymous]

I think prices may dip another 5%. Already down here about 10% from 2021 or 2022 highs. If it's gonna happen, would be next year. I mean, if sky high inflation and high mortgage rates doesn't move the needle much more soon, forget about it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Resumption of student loan payments later this year (on hold now for over 3 years, which is longer than any other covid benefit) will take many buyers out of the market.

Some but not that many. Most people don't have loans or manageable loans. Especially the more expensive markets.

Yeah this could maybe possibly have an impact on the condo market in the DMV, but only ripple effects farther up (i.e., condo owners looking to sell and buy starter homes cannot find buyers, and so slightly decrease demand for those). Might be a 2-5% drop for a year but I would be shocked if it goes any lower. More likely to just keep treading water.

[Anonymous]

Anonymous wrote:I think prices may dip another 5%. Already down here about 10% from 2021 or 2022 highs. If it's gonna happen, would be next year. I mean, if sky high inflation and high mortgage rates doesn't move the needle much more soon, forget about it.

Source? What market are you talking about?

[Anonymous]

Anonymous wrote:Resumption of student loan payments later this year (on hold now for over 3 years, which is longer than any other covid benefit) will take many buyers out of the market.

+1

[Anonymous]

Anonymous wrote:Hanging out with real estate agents yesterday and they were reminiscing about 2006/7 being the latest time they could recall market being like this. Then the crash happened.

2007/08 was really interesting. Lived in California at the time so it was pretty obvious to anyone with two brain cells that things were getting ridiculous. Sold all real estate. Shorted the market. Bought gold mining stocks. Made bank. 2008 was an awesome year. Let us hope the idiots rise again

But this doesn't feel like 2008. Residential real estate has supply issues that will float prices in most markets regardless of interest rates. Plus many buyers are all cash. Commercial real estate is f-d though. That's some bad money that needs to make its way through the system. But I don't think there's a systemic risk.

Think we're in a muddling along moment in time

[Anonymous]

There's a crazy oversupply of airbnb rentals, so I would expect an imminent crash in markets that are heavily geared toward vacation rentals. Lots of owners will struggle to stay afloat when the rental income decreases.

[Anonymous]

Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.
[Report Post]

A $20-$30K profit on an investment of 1M is not a good return. It's 2-3%. You can do better in a money market account. That said, you might have some appreciation on the house, but it also could be flat for a long time.

[Anonymous]

Anonymous wrote:There's a crazy oversupply of airbnb rentals, so I would expect an imminent crash in markets that are heavily geared toward vacation rentals. Lots of owners will struggle to stay afloat when the rental income decreases.

Vacation areas will be the first to fall

[Anonymous]

Anonymous wrote:Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.

If there is a crash, this is how it will happen. Rental market will be going down and people with 3% interest rates renting out their 2nd and 3rd homes with no tenants will be looking to sell.

[Anonymous]

Anonymous wrote:

Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.
[Report Post]

A $20-$30K profit on an investment of 1M is not a good return. It's 2-3%. You can do better in a money market account. That said, you might have some appreciation on the house, but it also could be flat for a long time.

Also you lose the capital gains tax exclusion if you sell later. Might still be worth it, but something to think about.

[Anonymous]

There are a few area of instability now:
-commercial real estate and whatever that touches
-vacation rentals (more work than a lot of people thought)
-HELOCs with floating rates and overstretched people
-possible layoffs
-tightening lending
-higher returns with no risk available elsewhere in market as above poster noted

[Anonymous]

Anonymous wrote:Hanging out with real estate agents yesterday and they were reminiscing about 2006/7 being the latest time they could recall market being like this. Then the crash happened.

keep dreaming

[Anonymous]

Anonymous wrote:

Prices will not decline imho. Too many people have mortgages that are very affordable and will stay put. Or if they have to move, they will hold on the house and rent it.

We are looking into moving for a possible job change and are considering renting our house using a property management company rather than selling. After taxes, mortgage, and property fees, we would make about $20-$30K a year.

We purchased in 2008 and watched the homes in our neighborhood hold their value during the worst of the recession. Refinanced in 2020 at a 2.9% interest rate and only have about $600K mortgage on a $1.6M home in a great school district.

We will probably sell the house once we get close to retirement or if the annual profits drop below $10K for three years in a row. I can imagine that there are a lot of families in our financial position where it actually makes financial sense to hold onto a home and rent if the interest rate is low enough.
[Report Post]

A $20-$30K profit on an investment of 1M is not a good return. It's 2-3%. You can do better in a money market account. That said, you might have some appreciation on the house, but it also could be flat for a long time.

Yes, this is the thing that many owners are not considering. You really have to be planning on significant appreciation, or high interest rates to be temporary, for it to be worth it to hold onto a property right now. If you can make $50K in a money market account with zero risk and effort, versus $25K profit with lots of effort (and assuming full occupancy), that's a $250K difference and many fewer headaches over the course of 10 years.

[Anonymous]

First of all yoy cannot predict what will happen to real estate prices.

Second comparing to 2008 is stupid because the factors that led to the 2008 crash such as surprise lending and bundling of risk mortgages are not thecthings that would lead to a current crash if there is one.