Davidlee199 said:
I don?t see how housing prices can go up 10-15% in 2022, just like I don?t expect people continue to pay an average of $5000 mark up for new cars and gas prices won?t go up to $6/gallon in 2022. Supply and Demand are not the only factors to determine housing prices. If mortgage rates went down from 4% to 3% have caused home prices gone up 20% in 2022, I don?t expect housing remains the same once Federal Reserve starts raising interest rate and mortgage rates head back to 4%.
I still remember the demand was high in 2006 & 2007 before the 2008 financial crisis. Listen to what Ivy Zelman said. She forecasted the last housing peak in 2005.
https://youtu.be/FX0-7RoKz0Q
I'm surprised houses went up as much as they did as quick as they did, BUT rents are up too...... alot. There are some areas that have gone up alot (arizona and florida among others) that you can STILL pick up a house for 20% down and be cash flow positive because rents have gone up so much. Investors, rental companies, first time buyers, down sizers, people moving from higher priced states are all competing for houses in those areas.
Of course Irvine is higher priced but you still have people buying who are moving from higher priced areas that feel they are getting a bargain with their even higher priced homes or foreign investors. You have people that are flush with stock option money who will just put down a large down payment in tech areas.
One of my daughters has friends who formed a group of millenial investors. They pool their money and buy up properties that they air bnb. Soon as they are fixed up and making money they set sail to find some more. They came back a couple weeks ago from a trip to Tennessee. They bid on 10 homes and got 6 of them. Those houses aren't coming back to the market for quite a while and they aren't even going to rent to locals.
I plan on moving to AZ. Rents are up koo koo crazy. The house I want isn't released and it will take 13-14 months to build. What's a girl to do? That is longer than a year lease. I don't want to move twice. Where am I going to put a houseful of furniture? I'm buying another house instead of renting. Solves all my problems. I can move when I want from here and into my new place. I can keep an eye on the building, take pix of all the walls etc. And they aren't so dang picky they won't let you on the lot there. I figure if I lose less than 30K on the place, I'm ahead vs. renting and most likely I can lose more than that because rents just keep going up. I don't care. I'm spending my Sunshine Dollars. Everything looks like a bargain there (even after going up alot) and I'm sure we look the same to other people here.
So what is happening here? The poor, the lower class, those just trying to make ends meet or trying to move up by working hard ONCE AGAIN are losing out because of policies that supposedly are to help them. Keep rates low, cuz what would happen to poor people if rates go up? Give them money to offset rent, food, etc. Enact higher min. wage which never keeps up cuz all of that is going right into the pockets of people who rent to them and that is why investors just keep on buying. Thank the fed and the government for making the poor more dependent and poor.
