Anonymous
10/22/2024 11:55
Subject: Isn't trading up going to end as folks are priced out?
Anonymous wrote:Anonymous wrote:Trading Up Only makes sense when home prices are falling not rising.
Lets say I buy a house for one million cash but want a two million dollar home. Home prices rise 50 percent.
I sell my million dollar home for 1.5 million but that two million dollar home is now three million.
But lets say prices fall 50 percent. I sell my one million dollars home for 500k and buy that two million dollars home for one million.
To trade up in rising market I need to come up with 1.5 million to do it.
To trade up in a falling market I need only 500K to do it.
A family with means to afford the better home isn't going to put off moving indefinitely just because it's not the absolute optimum time to buy.
I know several law firm partners and other high earners buying or building the big home in the great neighborhood. They're not staying in their starter homes with kids when they can easily afford to trade up.
Thank you captain obvious for pointing out that law firm partners can easily trade up. That isn't the question here, nor do future law firm partners represent the majority of folks in starter homes feeling stuck.
Anonymous
10/22/2024 10:08
Subject: Isn't trading up going to end as folks are priced out?
We had to trade up because there was no way we could have afforded a forever home on our incomes. We already traded up once from a condo to a rowhouse before kids. The up and coming neighborhood was fine with little kids and a great charter. We finally moved when I got a job outside DC (Anne Arundel County) in an area with great schools. Our DC rowhouse equity allowed us to get a much larger new build house for the same price. In the current market, we probably would have gone for an older/smaller home we could buy for cash — mainly 1960s-80s homes here.
Anonymous
10/22/2024 09:47
Subject: Isn't trading up going to end as folks are priced out?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:There is an article that shows how the housing market is stuck because of these crushing mortgage rates. No one is going to give up their reasonable sub 3% rate for the crazy 5%+ rates
What area? Homes are still going quickly in my neighborhood and frequently above asking. None of the new owners I’ve met are 1st time buyers, they’ve all sold and taken on the bigger mortgage.
No PP, but instead of writing "no one one is going to give up their reasonable sub 3% rate" they should have written "no one smart is going to give up their reasonable sub 3% rate." Lots of fools get caught up in keeping up with the Joneses in the DMV, which often leads to poor financial decisions. My neighbors are leasing a Range Rover, lol. Because they don't have the money to buy one.
We are in this position - one kid, a HS junior, in a house that we purchased, gutted and renovated 9 years ago, mortgage at 2.625%. Our house is a rarity - a recent renovation that isn't huge, at least for our neighborhood (4 BR, ~2400 sq. feet). We have toyed with various options in the next decade and into retirement - selling and buying a condo in the city after kid leaves for college, selling and buying two smaller places for retirement, etc. But our incredibly low rate changes all that - we will be much better off staying put until we need to move.
No one should feel sorry for us, at all - this is not really a "problem" using any rational definition of the term. But circumstances have forced a change to our plans, and more importantly, a normal-sized house suitable for a family of 4 in a great neighborhood within walking distance to wonderful schools won't be on the market in the near future. This phenomenon, repeated over and over, limits supply, and makes it harder and harder for people to move up.
Only in DCOM do we cry a river for folks stuck in 2,400 houses worth 7 figures.
I'm sorry, perhaps you missed this: "No one should feel sorry for us, at all - this is not really a "problem" using any rational definition of the term."
Anonymous
10/22/2024 09:47
Subject: Isn't trading up going to end as folks are priced out?
Anonymous wrote:Trading Up Only makes sense when home prices are falling not rising.
Lets say I buy a house for one million cash but want a two million dollar home. Home prices rise 50 percent.
I sell my million dollar home for 1.5 million but that two million dollar home is now three million.
But lets say prices fall 50 percent. I sell my one million dollars home for 500k and buy that two million dollars home for one million.
To trade up in rising market I need to come up with 1.5 million to do it.
To trade up in a falling market I need only 500K to do it.
A family with means to afford the better home isn't going to put off moving indefinitely just because it's not the absolute optimum time to buy.
I know several law firm partners and other high earners buying or building the big home in the great neighborhood. They're not staying in their starter homes with kids when they can easily afford to trade up.