A correction is going to happen.

More great wins for Bidenomics! https://t.co/0qlGiG8Q2d

— Clay Travis (@ClayTravis) October 19, 2023

According to millenials, the only solution for this is to give everyone $12k after tax raises or the gubmit needs to cover that $1,000/month.

https://www.kxan.com/news/report-austin-losing-homebuyers-to-other-cities-for-1st-time-on-record/?utm_source=t.co&utm_campaign=socialflow&utm_medium=referral
Homebuyers are looking to leave Austin as housing costs stay high

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"Those high home prices have resulted in people needing to leave the Austin metro area for more affordable places, because now locals or even people who moved in during the pandemic, are realizing that it's too expensive to live there," Redfin Chief Economist Daryl Fairweather said.

Fairweather said fewer homebuyers are interested in Austin for several reasons:

Rising home prices
Monthly mortgage payments doubling since before the pandemic
Homebuyers who moved to Austin are leaving

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They're keeping it weird.

From 1975 to 2000, the median home price was on average 3.6 times the median household income.

Now, it is 5.9 times the median income.

— unusual_whales (@unusual_whales) November 1, 2023

The only way this can be so at these rates is that the money supply is too high. And Biden has done nothing about it.

Bidenomics is working!

-yankee islander

FTAC2011 said:

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JobSecurity said:

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not really an "inflation" problem, it's a supply and demand problem. Unfortunately with no obvious solution.

If the fed wasn't focused on a soft landing there might be hope, but I don't see this dropping outside of a recession

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Huh? It has alot to do with inflation…. prices of goods and labor to build homes significantly increased the past few years which in turn raised the prices of new and used homes. Add in the fed raising interests rates significantly to try and slow inflation and you have high prices and high cost of borrowing.

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inflation has little to do with it.

There is currently no housing supply on the market because nobody wants to sell a home with a 2.75% mortgage. On the demand side are a bunch of Boomers who are downsizing and paying cash.

We listed our house a couple weeks ago and had a full price all cash offer within 6 hours.

BREAKING: The housing market is headed back to a 1980s-style recession, Wells Fargo, $WFC, has said.

— unusual_whales (@unusual_whales) November 1, 2023

Sucks if true. But probably necessary

Inflation is definitely a factor in housing prices

You obviously don't live around Canyon lake. There are 40 houses on the market for every one that's pending, and the one pending is most likely <$400K. It's more flooded with houses for sale that aren't selling than when I bought my foreclosure there in 2010.

Sounds like a great opportunity for home builders.

One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.

The youngest boomer is 60.

At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.

Here in central Florida we have seen prices level off, maybe even decrease in some areas, but we still have tremendously low inventory. New construction is going gang-busters here.

Seeing any price decreases? We've been passively watching the housing market around Lake Buchanan for the last year or so, and prices have been decreasing over that time but not a ton. Not enough to make us bite.

Logos Stick said:

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Sounds like a great opportunity for home builders.

One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.

The youngest boomer is 60.

At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.

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Investment groups gonna scoop a significant portion up and rent them out. You will own nothing and like it, remember?

Logos Stick said:

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The only way this can be so at these rates is that the money supply is too high. And Biden has done nothing about it.

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Money supply has been quietly tightening... through Quantitative Tightening. This is happening somewhat quietly and is, to their credit, allowing the Biden admin to work to keep rates from rising ever more to fight inflation.

Quantitative tightening will ultimately lead to the pain you feel but do not see in the economy over the next 12-18 months.

txaggie_08 said:

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Seeing any price decreases? We've been passively watching the housing market around Lake Buchanan for the last year or so, and prices have been decreasing over that time but not a ton. Not enough to make us bite.

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Definitely for ours. We heard the constant "multiple offers 30% over list price" back in 2021 and decided to prove them wrong by listing ours at an FU price, so it didn't sell. Problem solved. But, we've since found a waterfront elsewhere that we bought so got serious about selling it in 22, but that's exactly when all the buying stopped. We dropped ours another $100K and still didn't get an offer. We were the lowest $/SF around the whole lake. Even our realtor said WTF? We took it off the market and made $20K of upgrades. Just waiting for a week to get back up there and re-stage. Not sure what, or when, the next move is.

nortex97 said:

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A correction is going to happen.

More great wins for Bidenomics! https://t.co/0qlGiG8Q2d

— Clay Travis (@ClayTravis) October 19, 2023

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how many Americans can afford an $80,000 down payment now?!?!

Any investment group not playing with cash on hand will not be buying those houses. Rates are high and as mentioned above money supply is and will continue to tighten.

But Texas is still way below a sustainable supply of housing so it will be interesting to see how the market plays out here in the Lone Star state.

LMCane said:

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nortex97 said:

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A correction is going to happen.

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how many Americans can afford an $80,000 down payment now?!?!

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Lots of people who received COVID stay at home money, extended child tax credits, waivers for student loan repayments, and pauses in mortgages and rents.

People should be swimming in cash after the last few years of handouts. Unless they spent it on new cars, traveling on Spirit Airlines and eating out.

Logos Stick said:

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Sounds like a great opportunity for home builders.

One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.

The youngest boomer is 60.

At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.

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As a homebuilder, their are red flags everywhere. Just met with a very well known architect yesterday and half our meeting was about how much today reminds us of 2008. Namely, the inflation in the build cost of a home is challenging any potential reductions from volume

Agthatbuilds said:

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Logos Stick said:

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Sounds like a great opportunity for home builders.

One thing to think about. Boomers own 50% of all single family homes but are about 20% of the population.

The youngest boomer is 60.

At some point soon, there will be a glut of homes on the market as they die and go to retirement homes.

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As a homebuilder, their are red flags everywhere. Just met with a very well known architect yesterday and half our meeting was about how much today reminds us of 2008. Namely, the inflation in the build cost of a home is challenging any potential reductions from volume

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Man...So much of the exact same arguments Im hearing now, I heard in 2008. Like, exactly.

Nanomachines son said:

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Starter homes in decent areas basically don't exist. You can't buy a cheaper affordable house in an area with good schools and low crime in virtually any city nowadays. You can either get good schools, low crime, and expensive houses or bad schools, high crime, and cheap houses.

People are bankrupting themselves to get away from bad areas, which is further driving up housing costs. Crime and bad schools have crushed the starter home housing market.

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Hold up. This is not something new by any measure. Again, this is a matter of folks being entitled to affordable housing, cheap rent with low crime and awesome schools.

Hearne has a B school rating and just remember to lock your doors, which we do regardless in suburban DFW. Average home price is $135k and an easy commute to the B/CS metropolis.

Sorry, not everyone can live in today's version of South Shore Harbor and they couldn't back in the 1990's either.

Not everyone can move to Hearne.

I think his point is valid. It's not about keeping up with the Jones.

Millenials and GenZers will enjoy living in government subsidized commercial office space conversions.

They voted for 15-minute cities, they gonna enjoy 15-minute cities.

Over the next year we'll see more abandonment of loans on class A commercial buildings.

We've already seen this in SF.

Millenials and GenZers have not yet realized that they will have a lower standard of living than their parents.

Their 5 bedroom childhood home with a pool in a master planned community will give way to commercial office space with paper thin walls and broken elevators.

https://instagr.am/p/CzPIKrJP5g8

hph6203 said:

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techno-ag said:

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What did we ever do back when the interest rates were near 18%?

Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.

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You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.

1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%

2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%

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Supply hasn't kept up with population growth.

zoneag said:

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Nanomachines son said:

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techno-ag said:

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Definitely Not A Cop said:

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hph6203 said:

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techno-ag said:

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What did we ever do back when the interest rates were near 18%?

Oh yeah, I remember. We saved up for 20% down, didn't buy more than we could afford, and refinanced when rates went down.

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You have to save 2.5x as long to purchase a home that costs 3x as much monthly. Interest rates are a portion of the equation, but they matter WAY less than price relative to income. Even at 0% interest rates it's more expensive/difficult to buy a home than it was in the early 80's.

1980
Median House Price: 47,200
Median Household Income: 21,000
20% Down: 9,440
Interest Rate: 17%
Tax: 864/yr (72.00/mo)
HOI: 250/yr (20.80/mo)
P&I: 539.00
Total Payment: 631.80
Down payment percent gross income: 45%
Total payment percent of gross income: 16%

2023
Median House Price: 416,000
Median Household Income: 81,500
20% Down: 83,200
Interest Rate: 7.5%
Tax: 7615 (634.59/mo)
Insurance: 2204 (183.67/mo)
P&I: 2327.00
Total Payment: 3145.26
Down payment percent gross income: 102%
Total payment percent of gross income: 46.3%

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Thanks. Some people's inability to admit that economics were more favorable to them in the past is strange. And that's not to absolve the idiocy towards our current economic policies that this generation is perpetuating. I'm sure the millenials will be gaslighting the 30 year olds the same way in 30 years.

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I think it's more modern expectations that are out of whack. A young grad expects $100,000 job on day one. Wants a 5 bedroom $750,000 house with 0 down at 3%.

Examples only of course, but you get the point.

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You could buy a house back then in a relatively safe area for cheap. Thanks to mass immigration and enormously different demographics, the cheap areas are all crime ridden hellholes. If you want your kids to not get shot at or beaten up daily in school, you're going to have to pay out the ass nowadays.

The situation is nothing at all like it uses to be. People are bankrupting themselves to get away from bad areas of town. They have no choice if they have a family.

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Glad someone finally said this. In the midwestern city where I live, former working class neighborhoods with modest starter homes are now crime ridden dumps thanks to runaway third world immigration. The schools are terrible and unsafe. Even in this low cost of living city you need to make well above the median income just to have a chance to buy a home in a decent area with good schools. I'm GenX and am well positioned, but I feel for the young families today because these problems are only going to get worse.

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People would rather be broke in a safe area than rich in a crime ridden hell scape.

Nanomachines son said:

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Buck Turgidson said:

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tk111 said:

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It's really terrible. I know a number of young couples just a few years removed from college that have been very successful and are still absolutely crushed at their prospects of getting a home due to the overwhelming double-whammy that is prices and interest rates.

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Maybe the scale of "starter homes" will shrink back closer to long term norms. Cheap capital and low interest rates for decades helped the typical middle class starter home go from a 1,500 sf, 3BR 1-story back in the early 1970's to a 3,000 sf, 4BR, 2-story by the 2010's. I'll bet young couples with good jobs could still go out today and buy a new 1,500 sf, 3BR house without a lot of trouble.

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Starter homes in decent areas basically don't exist. You can't buy a cheaper affordable house in an area with good schools and low crime in virtually any city nowadays. You can either get good schools, low crime, and expensive houses or bad schools, high crime, and cheap houses.

People are bankrupting themselves to get away from bad areas, which is further driving up housing costs. Crime and bad schools have crushed the starter home housing market.

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A lot of these shifts are driven by lack of accountability and lack of law enforcement. There is a lot more contributing to the rising cost of living than housing. The number of safe areas is declining, and when people say they want to buy a house, implicit in that is that the house is in a safe area. The alternative is they rent small spaces in the same safe area.

California is one area where the effects of law enforcement are very clear between different cities. And the safe cities require one to be very high income or a millionaire to afford, becomes tiny homes that are decades old start at 1.5-2.0 million dollars. Town homes and condos starting 700k+.
Oh, and if you can't afford a house with yard, there's not many great out door spaces to take your kids due to the rampant homelessness and wackos every where in public spaces. This is why so many families leave. Or they raise their family in a tiny apartment, but it's a lot lower standard of living than most other cities.

https://www.marketwatch.com/story/housing-affordability-hits-a-39-year-low-its-fair-to-expect-prices-to-weaken-expert-says-2e7963ad

Quote:

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It's an unwelcome blast from the past home buyers are facing the most unaffordable housing market since the 1980s, according to a new report.

With mortgage rates at 23-year highs, the monthly principal and interest payment on a median-priced home hit a record high in October. That puts the U.S. housing market at its least affordable since 1984, according to a report by Intercontinental Exchange, or ICE ICE, -0.11%.

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Quote:

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The last time affordability was this bad in the 80s, rates were in the double digits and the average home was about 3.5 times median income, in stark contrast to today's price-to-income ratio of nearly 6-to-1."

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Quote:

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Returning the housing market to more affordable levels would require one of three things, ICE said: Either the 30-year mortgage rate needs to fall by 4.4 percentage points, the median household income needs to rise by 62%, or home prices need to fall by 38%.

But "none of which are likely to fully solve today's challenges alone, and none of which tend to move independently of one another," the report stated.

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One might say it's twice as hard to own a home than it was 40 years ago

nortex97 said:

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A correction is going to happen.

More great wins for Bidenomics! https://t.co/0qlGiG8Q2d

— Clay Travis (@ClayTravis) October 19, 2023

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I hate this thread.

I'd be interested to see what the forecasters are saying, but I lost access to that data when I moved for work.

I spoke with an LO in 2021 who had a team that generated analysis of market conditions. I was appraising his home, and he stated that he was told the market would peak soon, and reach long term stability or stagnation...so far they were scary accurate in their prediction.

I never got the name of who he contracted, and he was a dumbass for even telling me that to begin with. Good way to get fired.

Elections have consequences.