Renowned housing analyst who predicted the 2008 home price crash weighs in on the current market

I don't even calculate primary residence into net worth. Don't think it's relevant compared to other assets that can be liquidated.

I don't either for the same reason as you. Like having one car, if I get rid of the roof over my head or my main mode of transportation then I'll still need to find another one. I know others see them as investments and that's fine with me, but I just don't see it the same.

Now....people who McMansion themselves with extravagant possessions are a whole 'nother story but it's their money and I have no say in what they do with their money and vise versa.
 
As a home owner, what benefit am I receiving if my home value stays high? Honest question. Unless you cash out of the house and live in a van, it doesn't matter. My home could be worth 5x more tomorrow, but so will every other home for sale in the area.

A huge downside is that property taxes are higher because of the inflated property evaluations.
You can access equity with reverse mortgage if you qualify. That's a major upside.
 
Anybody who says that to buy a house if you are part of the younger generation is to get a second job is delusional.
 
What I see here is that some of those of us who are boomers are crowing about how hard we worked and shrived to afford our current fortunate position while the younger generations just need to work harder and they can also prosper.
It ain't like that. All of us who have done well also benefited from various breaks along the way.
The world is much harder now for the younger folks to prosper in.
Those of us who were fortunate enough to have matured into a world of cheap houses and good paying jobs with real pensions should be more grateful for what we have and less critical of those now coming into middle age.
With respect, it ain't like that either. Some people get breaks and some people do not. Some people get bigger breaks than others. Some people get shafted from day one. Boomers and Gen X aren't setting some magic bar and we aren't intentionally making life more difficult for younger generations - the world is what it is and requires what it requires to get ahead. If these breaks don't exist then they don't exist and no one said life was going to be fair. That said, I see people who belong to younger generations making it work on two very achievable incomes so long as the goal isn't a 3000 sqft house just outside Boston while driving two $850 per month cars.

Someone can complain about how unfair it is or they can do something about it because they really have no other choice other than to figure it out. If commiserating with younger generations would actually change their station in life or help them at all, I'd do it, but it doesn't, so I'm back to it's up to them, because I can't help and I don't have any answers for them.
 
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That's you, but for me and many others, there is value there.
Yes. A reverse mortgage is one of the most misunderstood loans there are. Yes..it's a loan. But not paid back until you pass. I did this once before-I will do it again as an example. House is worth 400,000. Bank gives you a reverse mortgage of 100,000.00 You die. Heirs sell your house for 400,000. They pay back 100,000.00 ( or whatever principal there is). They keep $300,000. It's a very simplistic example I gave.
 
Hey, your home went up 50% in 2 years. But don't worry, you can get a loan on it! Huge value here!

Color me unimpressed.
What does this mean? It is a value to pull equity out . Obviously you have an issue with taking out some equity. I guess you would rather leave it to your heirs instead of buying a new rv, vehicle, or taking that once in a lifetime vacation. Yea..OK. I sure you kids will enjoy it.
 
What does this mean? It is a value to pull equity out . Obviously you have an issue with taking out some equity. I guess you would rather leave it to your heirs instead of buying a new rv, vehicle, or taking that once in a lifetime vacation. Yea..OK. I sure you kids will enjoy it.

Sure, personally, I love having the option of taking massive equity. But it's a huge price to pay for unaffordable housing for everyone else. Given the choice, I'd rather not have inflated home values.
 
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Yes. A reverse mortgage is one of the most misunderstood loans there are. Yes..it's a loan. But not paid back until you pass. I did this once before-I will do it again as an example. House is worth 400,000. Bank gives you a reverse mortgage of 100,000.00 You die. Heirs sell your house for 400,000. They pay back 100,000.00 ( or whatever principal there is). They keep $300,000. It's a very simplistic example I gave.
There are many other uses as well. Just one example, every business loan I've ever taken and repaid required a personal guarantee and that guarantee was tied to my net worth which was tied to the market price of my home minus the outstanding mortgage. This kept me from having to take SBA loans, the worst and always last resort loans, and instead, get a fixed rate at a much lower interest rate and no closing fees. That directly saved me significant money. There are other examples as well..
 
Hey, your home went up 50% in 2 years. But don't worry, you can get a loan on it! Huge value here!

Color me unimpressed.
I'm a savvy person in finance and business. Yes, that loan based in part on the appreciation of my home, allowed me to reinvest into my greatest asset of all, my business, at a phenomenal rate and terms. That $500K investment in my business within two years was returning 2x that per year and that loan was paid off in year 3. The value of my home allowed me to use OPM at a minimal cost to me, it allowed me to not have to reduce my personal cash flow, and it's paid off. I've done this several times with capital improvements in my business.

I could've cash-flowed the project but why? Why take an income hit when I don't have to? Is there risk there? Sure, but my business is 14 years old and robust and I'll take that bet every time. I know people in real estate who started by leveraging the value in their homes to buy properties and they now own a hundred properties making millions. Every new purchase was simply done by taking equity out of one project and rolling it into the new project. The ROI using leverage is absolutely huge.

So while you may be unimpressed consider this...while there are people who can not use debt and leverage responsibly, there are other people using it responsibly and it is returning millions of dollars to them, and that would not be possible using 100% of their own money.
 
Sure, personally, I love having the option of taking massive equity. But it's a huge price to pay for unaffordable housing for everyone else. Given the choice, I'd rather not have inflated home values.
Ok, but come back to reality, the inflated home values are here, so instead of longing for an alternative universe where home prices are lower, learn to work within reality. You've made two very different statements here. One statement was you see no value in high home appreciation and the other statement now is you wish it hadn't happened. I and others have clearly shown there IS value in home appreciation IF you're smart about it. As for your wish for lower home prices, you can wish in one hand and poop in the other and see which one comes true first. I don't waste time wishing reality was different, I accept it and learn to work within it.
 
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If you were looking to get a loan, this could be an advantage. To many people, myself included, there's no value in this.
I agree. This is a false economy. I am not against reverse mortgages for people late in life who need it - but how does it help someone not so late in life? What do I take a reverse mortgage to pay my insurance and taxes?
 
Ok, but come back to reality, the inflated home values are here, so instead of longing for an alternative universe where home prices are lower, learn to work within reality. You've made two very different statements here. One statement was you see no value in high home appreciation and the other statement now is you wish it hadn't happened. I and others have clearly shown there IS value in home appreciation IF you're smart about it. As for your wish for lower home prices, you can wish in one hand and poop in the other and see which one comes true first. I don't waste time wishing reality was different, I accept it and learn to work within it.
The net negative affect is lack of household formation and delay / cancel of many social norms. Things like low birth rates for example. Us older farts are the past. Nice that we’re wealthy now. How does that help anyone really?

If youth is wasted on the young money is wasted on the old.
 
As a home owner, what benefit am I receiving if my home value stays high? Honest question. Unless you cash out of the house and live in a van, it doesn't matter. My home could be worth 5x more tomorrow, but so will every other home for sale in the area.

A huge downside is that property taxes are higher because of the inflated property evaluations.
One thing I can think of is moving from a HCOL area to a LCOL area. In years past, this was only folks moving out of NY and CA.

We moved from city suburbs of one state to county area of another state in 2022 and were able to get much more for the money in terms of home and land with the added benefit of reduced taxes.

Now, to your point, although comfort increases while decreasing tax burden that money is still tied to the asset and cannot be unlocked unless we get a reverse mortgage or sell and live in a van.
 
The net negative affect is lack of household formation and delay / cancel of many social norms. Things like low birth rates for example. Us older farts are the past. Nice that we’re wealthy now. How does that help anyone really?

If youth is wasted on the young money is wasted on the old.
Well, I'm still in wealth accumulation mode so I'm there yet and I get what you're saying but at the same time I don't control how it works, I've just learned how to navigate my way within the waters I've been thrown into with everyone else.
 
Well, I'm still in wealth accumulation mode so I'm there yet and I get what you're saying but at the same time I don't control how it works, I've just learned how to navigate my way within the waters I've been thrown into with everyone else.
I am not blaming anyone like you. Don’t hate the players hate the game.

They could fix the housing problem with the tax code in an instant but will never do it.
 
One thing I can think of is moving from a HCOL area to a LCOL area. In years past, this was only folks moving out of NY and CA.

We moved from city suburbs of one state to county area of another state in 2022 and were able to get much more for the money in terms of home and land with the added benefit of reduced taxes.

Now, to your point, although comfort increases while decreasing tax burden that money is still tied to the asset and cannot be unlocked unless we get a reverse mortgage or sell and live in a van.
I moved to a lower COL area. Best thing I ever did. However I have a very portable job and I travel for it constantly so where I start in the morning doesn’t much matter. Most don’t have that luxury.
 
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