Real Estate Market
- Thread starter The Critic
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No question it's passed on to the buyer.
That was very smart of her to sell that house.
I also know a woman who inherited a $1.3M house in Coral Gables, FL very close to University of Miami and she immediately sold it to the highest bidder.
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Maybe the person moving from CA to Tampa is still of working age and could only find something in that area.... possible job transfer ?
Like any big city in FL there’s pros and cons. Housing is 50% less, much lower property taxes, no state income taxes, not as many crazy politicians, decent weather, etc...
Florida does have some areas with high poverty, drugs and crime. Those are the areas you stay far away from, not everything is sunshine and roses in the ‘Sunshine State’.
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It seems to most, including me, housing market is out of control, but for one reason. Borrowing money is cheap.
The bottom line is, either the banks get the money or the homeowners. The payment is the same.
To me, the scary part for new homeowners is, god forbid the economy gets really strong and interest rates shoot up. Remember the payment stays the same? Well, interest rates high, home prices low, a lot of people will be stuck.
Its one or the other, high interest rates or high home prices. Either the bank gets the money or the seller gets the money.
With that said, the bottom line is, homes are selling because they payment is affordable to the public. There is no denying it or they wouldn't be able to purchase.
I think the biggest influencer of the last 2 decades is simply people are willing to borrow every last dollar for 30 years to buy a home. Before that, people would save up the 20%. We are a nation where many have made debt part of their lives with no plan to ever repay it. Heck, once they own a home, they take out a second mortgage on the home, in addition to the first mortgage to buy even more stuff they cant afford!
So this translates into homes they really should not be buying, cars they should not be buying, other toys they should not be buying. But they do, they chain themselves to debt and paying banks fees to borrow money they cant afford. We really are a fat nation hooked on debt, like no other.
My old hometown for almost my whole life is out of control in NY. smallest of homes up to half a million now, like 1500 sq ft. Crazy. Taxes on a home up to $12,000 a year (twelve thousand) never mind all the other outrageous expenses.
I noticed last summer the same happening in Florida, in just the last two years, at one time I thought maybe I would go there as an option, just for a change. But think Ill stay where I am in SC, bought new here and here we are almost 15 years later, houses half the size now selling for 25 to 50% more and the construction is garbage unless you even spend more up to 100% to 200% more. Or even more *LOL*
The bottom line is, either the banks get the money or the homeowners. The payment is the same.
To me, the scary part for new homeowners is, god forbid the economy gets really strong and interest rates shoot up. Remember the payment stays the same? Well, interest rates high, home prices low, a lot of people will be stuck.
Its one or the other, high interest rates or high home prices. Either the bank gets the money or the seller gets the money.
With that said, the bottom line is, homes are selling because they payment is affordable to the public. There is no denying it or they wouldn't be able to purchase.
I think the biggest influencer of the last 2 decades is simply people are willing to borrow every last dollar for 30 years to buy a home. Before that, people would save up the 20%. We are a nation where many have made debt part of their lives with no plan to ever repay it. Heck, once they own a home, they take out a second mortgage on the home, in addition to the first mortgage to buy even more stuff they cant afford!
So this translates into homes they really should not be buying, cars they should not be buying, other toys they should not be buying. But they do, they chain themselves to debt and paying banks fees to borrow money they cant afford. We really are a fat nation hooked on debt, like no other.
My old hometown for almost my whole life is out of control in NY. smallest of homes up to half a million now, like 1500 sq ft. Crazy. Taxes on a home up to $12,000 a year (twelve thousand) never mind all the other outrageous expenses.
I noticed last summer the same happening in Florida, in just the last two years, at one time I thought maybe I would go there as an option, just for a change. But think Ill stay where I am in SC, bought new here and here we are almost 15 years later, houses half the size now selling for 25 to 50% more and the construction is garbage unless you even spend more up to 100% to 200% more. Or even more *LOL*
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Quote
“We are a nation where many have made debt part of their lives with no plan to ever repay it. Heck, once they own a home, they take out a second mortgage on the home, in addition to the first mortgage to buy even more stuff they cant afford!
So this translates into homes they really should not be buying, cars they should not be buying, other toys they should not be buying. But they do, they chain themselves to debt and paying banks fees to borrow money they cant afford. We really are a fat nation hooked on debt, like no other.”
.
How else can folks buy a car, house, or pay for college..... ?
Most have no choice than to get into debt.
If used wisely, debt can be a very good thing down the road (good education / career training, buying a house) as long as it’s within reason and not foolishly taking on crazy debt.
Problem is that many people know they can simply walk away from debt and don’t worry about paying that debt back. I know a husband and wife that purposely racked up $35,000 in credit card debt (guns, home electronics, plastic surgery / breast implants, etc...) before declaring bankruptcy and divorcing. True story...
Another big problem in the USA is that people use debt to live a lifestyle they really can’t afford. They love posting about their wonderful, fun, upscale lifestyle on social media but they don’t have a pot to piss in.
“We are a nation where many have made debt part of their lives with no plan to ever repay it. Heck, once they own a home, they take out a second mortgage on the home, in addition to the first mortgage to buy even more stuff they cant afford!
So this translates into homes they really should not be buying, cars they should not be buying, other toys they should not be buying. But they do, they chain themselves to debt and paying banks fees to borrow money they cant afford. We really are a fat nation hooked on debt, like no other.”
.
How else can folks buy a car, house, or pay for college..... ?
Most have no choice than to get into debt.
If used wisely, debt can be a very good thing down the road (good education / career training, buying a house) as long as it’s within reason and not foolishly taking on crazy debt.
Problem is that many people know they can simply walk away from debt and don’t worry about paying that debt back. I know a husband and wife that purposely racked up $35,000 in credit card debt (guns, home electronics, plastic surgery / breast implants, etc...) before declaring bankruptcy and divorcing. True story...
Another big problem in the USA is that people use debt to live a lifestyle they really can’t afford. They love posting about their wonderful, fun, upscale lifestyle on social media but they don’t have a pot to piss in.
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Please dont get me started *LOL*Quote
“We are a nation where many have made debt part of their lives with no plan to ever repay it. Heck, once they own a home, they take out a second mortgage on the home, in addition to the first mortgage to buy even more stuff they cant afford!
So this translates into homes they really should not be buying, cars they should not be buying, other toys they should not be buying. But they do, they chain themselves to debt and paying banks fees to borrow money they cant afford. We really are a fat nation hooked on debt, like no other.”
.
How else can folks buy a car, house, or pay for college..... ?
Most have no choice than to get into debt.
If used wisely, debt can be a very good thing down the road (good education / career training, buying a house) as long as it’s within reason and not foolishly taking on crazy debt.
Problem is that many people know they can simply walk away from debt and don’t worry about paying that debt back. I know a husband and wife that racked up $35,000 in credit card debt (guns, home electronics, breast implants) before declaring bankruptcy and divorcing. True story...
Another big problem in the USA is that people use debt to live a lifestyle they really can’t afford. They love posting about the wonderful upscale lifestyle on social media but they don’t have a pot to piss in.
If you need to borrow money from other people, that means you shouldn't be buying it. Oh the countless vehicles on the road, financing out to 6 or 7 years loaded with options, the $500+ cell phones bought on credit!, $100 a month cell phone service instead of $30, eating out instead of cooking in, Costa Sunglasses, $200 headphones/ear plugs.
Hey if you have to borrow money from someone for a vehicle, then buy a $5000 one. NOT a $30,000 one that once paid back over 7 years cost you closer to 40,000. Do you know in the USA, that automobiles are loaded with options because Americans will borrow the money for those options, do you know, the vehicles shipped overseas are "stripped down" because people do not spend like we do.
Ahhh ... college, here we go again, go to trade school if you dont know what you want to do and if you make the choice to go to college, decide ahead of time, if the cost is worth the return. My daughter went to a well known 4 year university. Was focused on her career (after the first year), worked the whole time she was away and attended college, did NOT go on "spring breaks" but WORKED.
By her third year she was attending college and working in the field she chose, part time.
4th year graduated and while still working, found a full job in the same field.
College debt, she had, not much as we also helped and she WORKED from the first week she started her first year of college. Anyway, 10 years worth of loans, I printed out amortization sheets for her. How much she would save by knocking out the loan faster.
She bought an economical Ford Focus that was 2 years old from Hertz for $9000. along with a small loan that was paid off within two years. Still drives that tiny little car and got her college loan paid off in exactly 4 years this year. Has a crappy hand me down phone from us and pays us $240 a year to stay on our plan, as it only cost $20 a month to have her on it.
She doesnt have a $125+ pay TV bill every month, she streams anything she watches. Its a way of living within your means and no one has a right to my money if they cant.
I get sick of the constant whining of people who cant control their own lives and borrow money for things that they can not afford. Well, then, too bad on them, I certainly am not going to support them because they cant run their own life! *L*
BTW- I see we agree on things, Im kind of passionate about the subject if you haven't noticed! Good god, people whining and crying about everything, if they could just take charge of their pathetic thinking...
Im staying quiet now, back onto the housing "bubble" even though this kind of explains what is happening, people leveraging every penny they make will one day be crying for a bailout if the housing market crashes again. All because of their own foolish decisions to get into debt to buy a house they cant not afford.
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A reality show following a family living within their means, going to work everyday, managing whatever debt they have accumulated with a plan to re-pay it wouldn’t last a week. Mods do your thing. Back to civility please. This sounds like pre you know what surrounded by my crazy brothers-in law.
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Alarmguy, these da.
People want instant gratification and can't wait.
People want instant gratification and can't wait.
A bit OT, but high schools need to make basic, solid personal finance and debt management a core curriculum for all students.
The corporation I worked for used to offer a week long Summer class for select high achiever HS students between their Junior and Senior years. Two fold goals; help the kids and identify potential future leadership. A few of my staff and I taught. One of the sessions was personal finance...we made it simple; took a bi weekly pay amount, explained all the deductions (FICA, all taxes, health, etc.), student loans, we came down to the net then asked; "where do you want to live?", "what car do you want or how will you get to work?", "..vacation?"...on and on then did the simple math until we ran out of $$. That segued into a discussion on debt, minimum payments on CC's, etc. Most of the kids knew it or more or less got it, but a number didn't. The first time we taught, we were surprised at how many didn't....and these were the bright kids.
The corporation I worked for used to offer a week long Summer class for select high achiever HS students between their Junior and Senior years. Two fold goals; help the kids and identify potential future leadership. A few of my staff and I taught. One of the sessions was personal finance...we made it simple; took a bi weekly pay amount, explained all the deductions (FICA, all taxes, health, etc.), student loans, we came down to the net then asked; "where do you want to live?", "what car do you want or how will you get to work?", "..vacation?"...on and on then did the simple math until we ran out of $$. That segued into a discussion on debt, minimum payments on CC's, etc. Most of the kids knew it or more or less got it, but a number didn't. The first time we taught, we were surprised at how many didn't....and these were the bright kids.
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Let's see...
People need a place to live.
If you aren't paying for your mortgage, you are probably paying for someone else's.
I ain't gonna work forever, perhaps investing in a home makes sense?
Ownership can offer tons of options; you can leverage your equity, rent a room, change oil in the garage.
That's what I bought our home. Now we have 3.
People need a place to live.
If you aren't paying for your mortgage, you are probably paying for someone else's.
I ain't gonna work forever, perhaps investing in a home makes sense?
Ownership can offer tons of options; you can leverage your equity, rent a room, change oil in the garage.
That's what I bought our home. Now we have 3.
Agreed. I am simply saying there are many considerations in a home purchase. A home purchase is generally the biggest purchase you will make in your life.
Regarding lifestyle, I was thinking about "style" over pragmatics.
Your point is well taken.
There are plenty of people that borrow money for a car and pay the loan without issue. On BITOG many like to dwell on those who default on loans for justification of never buying a new car.Please dont get me started *LOL*
If you need to borrow money from other people, that means you shouldn't be buying it. Oh the countless vehicles on the road, financing out to 6 or 7 years loaded with options, the $500+ cell phones bought on credit!, $100 a month cell phone service instead of $30, eating out instead of cooking in, Costa Sunglasses, $200 headphones/ear plugs.
Hey if you have to borrow money from someone for a vehicle, then buy a $5000 one. NOT a $30,000 one that once paid back over 7 years cost you closer to 40,000. Do you know in the USA, that automobiles are loaded with options because Americans will borrow the money for those options, do you know, the vehicles shipped overseas are "stripped down" because people do not spend like we do.
Ahhh ... college, here we go again, go to trade school if you dont know what you want to do and if you make the choice to go to college, decide ahead of time, if the cost is worth the return. My daughter went to a well known 4 year university. Was focused on her career (after the first year), worked the whole time she was away and attended college, did NOT go on "spring breaks" but WORKED.
By her third year she was attending college and working in the field she chose, part time.
4th year graduated and while still working, found a full job in the same field.
College debt, she had, not much as we also helped and she WORKED from the first week she started her first year of college. Anyway, 10 years worth of loans, I printed out amortization sheets for her. How much she would save by knocking out the loan faster.
She bought an economical Ford Focus that was 2 years old from Hertz for $9000. along with a small loan that was paid off within two years. Still drives that tiny little car and got her college loan paid off in exactly 4 years this year. Has a crappy hand me down phone from us and pays us $240 a year to stay on our plan, as it only cost $20 a month to have her on it.
She doesnt have a $125+ pay TV bill every month, she streams anything she watches. Its a way of living within your means and no one has a right to my money if they cant.
I get sick of the constant whining of people who cant control their own lives and borrow money for things that they can not afford. Well, then, too bad on them, I certainly am not going to support them because they cant run their own life! *L*
BTW- I see we agree on things, Im kind of passionate about the subject if you haven't noticed! Good god, people whining and crying about everything, if they could just take charge of their pathetic thinking...
Im staying quiet now, back onto the housing "bubble" even though this kind of explains what is happening, people leveraging every penny they make will one day be crying for a bailout if the housing market crashes again. All because of their own foolish decisions to get into debt to buy a house they cant not afford.
4WD
$50 site donor 2025
Two years ago I had 3 and could not keep up with things needing attention
… so dropped down to 1 and can not keep up … but the list is shorter
…deleted
A Gen Xer I speak to a lot would accuse you all of "Boomer Think". The reason: interest rates are so low right now it makes no sense not to borrow money for any reason you want - buy a new truck, buy a business, buy expensive houses for Abnb rentals, etc. As long as you have the cash flow and credit, borrow, borrow borrow.
It goes completely against everything I've learned my entire life, but I'm not sure I can prove him wrong. Humor me.
Every bit of training I've had tells me to minimize borrowing, only buy what you can afford, and pay cash. Trouble is, interest rates are so low right now, money is almost free. Navy Federal is offering a 30 year home mortgage for 2.3%. New cars and even $50k trucks can be had with no down and 0% interest.
If you bet wrong and real estate crashes, you can walk away in most states without even having to declare bankruptcy (no recourse on purchase money laws). If, as many think will happen, inflation takes off, you have locked in a lot of money at low rates, and the underlying real estate takes off in value.
While I don't agree with this philosophy, I can't prove it wrong. With 2.3% money available, I feel like an idiot having my house paid off, not putting that equity into the stock market where I can average 8% returns over the long term in index funds. Or buy more real estate (I'm actually downsizing there right now).
It goes completely against everything I've learned my entire life, but I'm not sure I can prove him wrong. Humor me.
Every bit of training I've had tells me to minimize borrowing, only buy what you can afford, and pay cash. Trouble is, interest rates are so low right now, money is almost free. Navy Federal is offering a 30 year home mortgage for 2.3%. New cars and even $50k trucks can be had with no down and 0% interest.
If you bet wrong and real estate crashes, you can walk away in most states without even having to declare bankruptcy (no recourse on purchase money laws). If, as many think will happen, inflation takes off, you have locked in a lot of money at low rates, and the underlying real estate takes off in value.
While I don't agree with this philosophy, I can't prove it wrong. With 2.3% money available, I feel like an idiot having my house paid off, not putting that equity into the stock market where I can average 8% returns over the long term in index funds. Or buy more real estate (I'm actually downsizing there right now).
Ahhh, re-read my past ... my comment is why loans and home prices, people willing to take them out, prices and options higher, same with vehicles, supply, demand and what the public will pay, Americans fat on debt much more then the rest of the world. Never said everyone has an issue, in fact used my daughers car loan as an example.
Don't get distracted by the railings of people who don't have the 20% down payment. I work with lots of buyers. For the most part, they have the 15-20% for a down payment. Very few actually have just the 3.5-5% down payment. And now that I think of it, those that just had the 3.5-5% down payment actually did quite well, prices are probably up at least 5-10% over the last few years when the few I had actually bought so they actually came out ahead. The trip point is basically whatever they were paying for rent. Not buying just meant they paid money for rent and never got anything back. At the high end, it's cheaper to buy than rent.
Bankruptcy does not protect you from foreclosure and walking away certainly has implications on your ability to borrow money, get insurance, the list endless.
The words "bet" is correct if you borrow money to invest.
Borrowing money on your home is betting your house and home that you will do better investing in something else. Doesnt make sense, betting that you are going to average 8% in the index funds, its a bet.
Some will win, some will fail, no one knows the future. Right now you are secure, you own a home. If you want to gamble real estate, purchase another home and rent it out, at least, if you lose it, you wont be on the street.
In my situation I could cover the payment if the equity I withdrew went to zero value, so that isn't a concern. Having invested in real estate and made it work with interest rates from 9-12.5% over the years has me drooling over cheap money. The question is moot though - the spousal unit wants a paid off house, and I want a happy spousal unit.
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