Reply to Feels like market is hitting a wall

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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]There's no inventory. People with 2-4 percent rates are not gonna sell and take on an 8 percent rate mortgage unless they absolutely have to, and the rates are scaring away potential first-time buyers (unless they are rich enough to pay cash). The market is essentially frozen.[/quote]

Buyers can always refinance later....[/quote]

But no one knows when later will be and *for me* the idea of moving and losing a ton of disposable income for ~10 years until rates go down and we can refinance isn’t prudent, especially with young kids. In an ideal world we would move to a bigger home in NW but there is no way we could justify losing our current interest rate for 600-1000 more sqft. Our house works for us - it’s smaller than what we want - but the space more or less fits our needs and paying a premium for more space seems stupid/wasteful. [/quote]

You already HAVE a house, what about those trying to buy their first house they have saved up for. It's really sad for those people.[/quote]
They can rent another year or two. I really wanted a house in 2006, I waited until 2009.[/quote]

I suppose that in 2006 people weren't required to learn basic math skills in high school either. My how times have changed.

Let's do some basic math then. For an $800K house at a 3-percent mortgage rate, principal and interest for a 30-year loan with 20% down ($160K) are a total of roughly $2700 a month.

In order to keep the $2700 monthly payment for principal and interest for the $800K house, at a 7-percent mortgage rate, the borrower has to put 50% down, or a total of $400K. This means that the borrower has to increase the downpayment by $240K.

Are you saying that it takes most households only 1 to 2 years to save $240K? I know math is sooooo hard isn't it?
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You....missed the point, PP. Home prices were very high in 2006 and the market crashed in 2008, home prices were lower in 2009. But keep it up with the math, good job, I'm so proud of you!!![/quote]

2008 was due to lax lending standards. That is no longer happening. No one can promise a crash in 1 to 2 years for those of us who have scrimped and saved for our first home. When will this market at least run out of cash buyers?[/quote]

Patience grasshopper. It’s going to crack. About 10 percent of low rate era mortgages are adjustable and haven’t hit yet. Air bnb owners are getting crushed and those homes will have to sell. That will be the beginning. Commercial RE is in collapse and much of that land will be converted to housing because it’s the only feasible productive use. We are headed into wild economic times. The debt and deficit have moved into an exponential vortex that is quickly making serious issues.[/quote]

People are AirBnB’ing close-in suburbs? You’re going to see issues in Vegas, Orlando, Phoenix - but this area - esp with RTO initiatives - should remain stable. [/quote]

Have you ever done a search for your neighborhood? I just did one for just Old Town Alexandria and got over 300 hits. Arlington County has over 1,000. Many of those are condos, but flipping through the photos, there are SFHs in there as well. [/quote]

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