Reply to Anyone else who will likely never be a home owner?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We didn't buy our first home until we were in the mid-thirties, but took quite a few years of saving $$$ to get there. This was about 10 years ago. Since then, we've been able to buy four additional homes as investment properties. The trick? As our income grew over 10 years, we kept our spending habits more or less the same as 10 years ago, so we've had 6x growth in saving over the year. Takes strong discipline, being handy helps (fixing things in the house ourselves and doing most of car maintenance self also.....w/both cars being 15+ yrs old)

You can do it, discipline and trading off current consumption for future consumption.

Best of luck![/quote]

Your trick? Buying at the bottom of a crash and then hoarding properties. You’re not that smart. My worst financial decision was being born too late to do what you did. Those of us who are born later and did the right thing and worked hard to save for a down payment are getting screwed because the cost of housing has artificially increased over the last two years far faster than we can save. It is utterly unprecedented and you are in no position to give advice.[/quote]

Amen.[/quote]

No. Your generation had access to the lowest interest rates in history. You couldn’t afford bc you wanted to enter the property ladder without compromise. Buy further out, buy smaller, buy a condo, buy in a lower cost of living area, build equity, enjoy appreciation, sell and enjoy a tax free profit and climb the ladder.  I’ll never forget my first real estate agent. She bought in Capitol Hill 40 years ago. She said no one would even come to their house. Now she owns a boss home in a prime location. But it did not come easy. [/quote]

How would I have afforded to buy a property while in school and making no income? What about people who graduated in say 2019 and needed to work a few years to save up for a down payment? You don’t make any sense. The cost of housing right now in every corner of America is vastly less affordable than it was just a year ago. Not everyone was in a position to buy last year or before that, and even if they could it was very hard to “win” a bidding war. [/quote]

We're supposed to cry because 24 year olds can't buy right now? There's been a 2-year blip of homes being either overly priced, high interest rates, or both. Just ride it out and you'll be in a great position to buy in 6-18 months.[/quote]

No, that’s the point. You’re not supposed to cry. All the PPs were going on and on about how great things turned out because they bought when they were young, and it’s just a totally different scenario right now. They are telling people to buy right now and “compromise” because it worked out when they were young, when really the best thing to do is just wait it out.[/quote]

PP here. I think most people (except realtors) are saying don't buy right now. Like I said, wait 6-18 months to buy. [/quote]

The problem with this is that people have been waiting years already and have just seen prices escalate. I started looking pre-COVID, thought prices had gotten crazy, and now those prices would be a screaming bargain. On top of that, inventory is low in a lot of places, even before the spike in interest rates. For example, I, like many people here, want to stay in my general area so that my kids stay in the same schools and are near their friends. We have outgrown our house, and then some.

So if you see a good house that you could afford (even if expensive) and would be happy living in for 10 years, do you wait another 6-18 months in the hope that prices go down? Or do you buy it and accept the higher cost and hope that interest rates go down at some point and you can refinance? Even if someone could guarantee that prices would be at prepandemic levels in a year AND an acceptable house would be available in an area where you want to live, those prices would still be high, the interest rates would still be high, and you've lost a year of building equity.

So the people who had the means to buy a house that is comfortable enough and at great interest rates and relatively low prices should just recognize the good fortune and not act like it's no big deal to wait another year or more. It is a tough decision with little clarity on the financial and other tradeoffs.[/quote]

When the Fed literally says we are in a bubble, you should not buy.[/quote]

You are the same guy who keeps posting that comment from Powell over and over in these threads. It's weird. Powell was talking about across the country, and he never said that prices will return to anywhere near pre-pandemic, especially in desirable neighborhoods. He said that price increases would moderate until supply and demand came in line. If you want to buy in a particular desirable neighborhood and live there for 10 years, it makes absolutely no sense to pass on a good house in the hope that prices will be 5% lower in a year. You would really have to believe that prices will be much, much lower in a year to make the gamble worth it. It just doesn't make sense to time the market if your plan is to buy a house you can afford and stay there for 10 years. The problem is that there are no houses to buy! We shall see when the Spring rolls around. I hope that the inventory of good houses in my neighborhood spikes, but I have zero belief that it will.[/quote]

Right, when Powell said we “had a housing bubble,” what he really meant was, “we had a housing bubble across the country, except in special neighborhoods of the DMV because those areas are *chef’s kiss*. Folks buying now in those places, don’t worry, we are increasing the cost of purchasing houses there by 50% in the span of just months because we want to make sure that housing prices there stay exactly that elevated or more for perpetuity. You snowflakes are golden, carry on!”[/quote]

Well you aren't really engaging in good faith, which is fine. But interest rates are much higher, yet prices around here have barely moved down compared to many other parts of the country. So clearly the effects are not felt equally. And maybe you are right that some time in the indeterminate future, prices here will be lower than prepandemic prices to offset the increased interest rates, but I wouldn't want to bank on that if the right house came along and I could afford it. And the real question is whether waiting for a year to buy makes sense given how much you expect prices to decline and how much you think they will eventually go up after 10 years or however long you plan to stay in the house. If you think that prices are going to stay depressed for 10+ years, I would happily bet against you. And if that's the case, we will have bigger problems in the economy. So, yes, it may be true that prices will be somewhat lower in a year, but it isn't at all clear that it makes sense to wait a year to buy. But I am sure all this is obvious to a guy LARPs as a macroeconomist on an anonymous message board.[/quote]

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