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.
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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.

Haha, you could do better in a money market only for the last year or two. High rates on MM and savings account won’t last.

[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.

Then you were hanging out with idiots. There's absolutely nothing about 2006/07 that is comparable to now. Absolutely zero.

[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.

Excuse me but where do you live??? My neighborhood is having houses sell for $80K - $150K over listing and the listing prices are what houses were selling for a year ago. You are delusional and clearly NOT in the market for a new house right now. Talking out of your a$$.

[Anonymous]

Anonymous wrote:How can prices stay constant while inflation rips. Housing is the biggest component in gauging inflation.

Lol, the same way that the stock market was down 20% last year with red-hot inflation.

[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.

Not if they ever plan to sell because then they/you will give up the capital gains exclusion and have to repay the depreciation tax benefit, which is one of the most attractive parts of owning a rental property in first place.

[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.

It wasn't like this. The last time there was a surge in prices it was artificially created and massaged by real estate agents. Sub prime lending and deregulation put a ton of people in houses that couldn't afford them.

This surge had to do with shortage of housing, supplies, people moving toward the suburbs. And we aren't surging, it is a calm market with higher rates. So, now there isn't going to be a crash. Things are just returning to normal and rates will drop.b

[Anonymous]

Anonymous wrote:

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.

Not if they ever plan to sell because then they/you will give up the capital gains exclusion and have to repay the depreciation tax benefit, which is one of the most attractive parts of owning a rental property in first place.

You just move in for two years and sell. When kids are off to college it’s easy.

[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.
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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.

Lol, tell me you don’t understand rental real estate without telling me…you know the rest.

1). On top of the $20-$30K they’re netting in cash, the principal is also being paid down every month.

2). Since the property is now a rental, the mortgage interest is a business expense and can be fully deducted, unlike the mortgage on a primary residence due to the SALT cap. Assuming they have a 3% interest rate on their $600,000 mortgage, that’s an extra $18,000 deduction they now get every year.

3). They will also get to claim a deduction for depreciation. This deduction is often bigger than the mortgage interest deduction for rentals.

4). Even 2% appreciation on a $1.6 million house is $32,000 per year.

Add it all up and that’s not a bad return for a $1 million investment – and they won’t have to endure the wild swings of the stock market. There’s a reason that real estate is the way that most wealth is accumulated in this country.

[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.

No irresponsible borrowing and lending this time.

[Anonymous]

Anonymous wrote:Really? Were you at an agent bar? Where's that?

I'm imagining a place decorated in greige and gray. Cashmere throws placed strategically. No artwork that could be considered provocative. The clientele is mostly white and wears Banana Republic with maybe someone in a St. John suit here or there. Lots of Chardonnay being served. The parking lot is full of Lexuses and lower-end Mercedes. The conversation is along the lines of "It's a great time to sell." And "it's a great time to buy".

[Anonymous]

Anonymous wrote:

Anonymous wrote:How can prices stay constant while inflation rips. Housing is the biggest component in gauging inflation.

Lol, the same way that the stock market was down 20% last year with red-hot inflation.

No. The stock market does not figure into how they calculate inflation. Housing does. It is the biggest component.

[Anonymous]

inflation is making my mortgage payment the least of my problems. the vast majority of homeowners have sub 4% rates. nominal wages have been going up.

sure everything else is getting more expensive, but my mortgage has been getting cheaper every day!

[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.

Not in my neighborhood, Houses seem to be selling at last year’s rates. It kind of flat lined. We are in inner McLean along Old Dominion as you head towards Arlington (Kent Gardens, Franklin Sherman, Chesterbrook).

[Anonymous]

Anonymous wrote:inflation is making my mortgage payment the least of my problems. the vast majority of homeowners have sub 4% rates. nominal wages have been going up.

sure everything else is getting more expensive, but my mortgage has been getting cheaper every day!

Only if your wages are increasing

[Anonymous]

I've been watching townhouse sales in Silver Spring/Wheaton. I have not seen any consistent signs of a drop in nominal prices. Overall it seems to have increased a little but it is hard to say for sure. I guess real prices (accounting for inflation) have probably dropped a little. Some developments have had houses sell for less than they did in 2021, and some for more. Of course not every townhouse is the same and I think some of these differences are due to differences in the houses themselves rather than the market. It is definitely a slower market.