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

[Highlander 1459]

Social media? Don't have it.

Zoom out, look at the data regarding wages and home prices. It's easy to subscribe to the idea "I made it, so you figure it out for yourselves..." Trust me, I'm there with you, it makes no difference to me personally what home prices are.

Everyone I've talked to has similar concerns regarding home affordability. Fresh graduates working in healthcare (nurses, etc.) not sure if they'll ever be able to afford even a starter home. "I couldn't afford my house now.." is the common theme for the existing home owners I know.

These are real concerns and not "complainers" you are so quickly to dismiss them as.

you are using Social Media to make that statement..

 

[Highlander 1459]

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

up to a point that is true... ownership of my home is part of what makes some of us technical millionaire's..

but it's value to me isn't what it is worth but what it does for me
and as you stated it is not a liquid asset that I can cash in on in a minute.

figure you have to live somewhere and money is always going to be tied up in that housing aspect, one way or another.

 

[Highlander 1459]

Just because you can, doesn't mean that you should.

I've heard it said that no one ever borrowed their way out of debt..

 

[SC Maintenance]

People DREAM of a life in the USA. Im pretty connected in that way.
Here is an amazing story, since graduated Harvard, used to walk to school 2 hours each way in order to better himself. The USA is still looked upon as the land of opportunity and why so many people overseas do well here. They work and do what it takes to make things happen and grateful for this a country like ours that they can do it in. Just ask @JeffKeryk whom I am sure met many of those people in Silicon Valley.

Im pretty connected in ways I rather not disclose but know of this individual and the struggles to achieve what he has.
A dirt poor farm boy in the Philippines, with the determination to walk to school TWO hours each way, everyday in order to build a better life for himself, against what Americans would call impossible odds. With some caring help he recently graduated from Harvard.
This was his story before that time. https://www.esquiremag.ph/the-good-...lacan-made-it-to-harvard-a00181-20170807-lfrm

I actually know several Harvard grads. You don’t get into Harvard without a sponsor. They told me themselves. Esquire magazine is hardly a realistic cross section on the world.

I graduated at the top of my rural high school went to a ho - hum college and graduated towards the top of my class there and was recruited by a large company. I was lucky. You shouldn’t need to be in the top 10% to own a modest family home.

Did you go to Harvard?

 

[Highlander 1459]

somebody spoke about luck... there is alot of that in life and you have no control over it except for me to think
you make your own luck... sometimes a person has to move on from whatever it they are doing in order to get a break.

 

[2002 Maxima SE]

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.

Same here. Best decision we've ever made. My current job only requires a laptop, phone and close proximity to an airport for customer travel.

 

[Tharber]

That is what makes FL such an attractive place to live. Our property taxes have limited yearly increases. It migh not be perfect but I think it is fair. Our labor for services is somewhat less than other stats as we really do not have active unions( which I am nbot against) but the biggest scam is if we do not pay increases to fierfighters, teachers, LEO, etc that we are putting ourselves in danger. I was once very politically involved in the county commission, at that time we hade a budget was under $1M, now it is $2.5M with zero increasre in services. Our public servants have forgotten who they serve and that pisses me off. Lets not even get into fee's for this and that, permits, etc. The whole system is money hungry and until people stand up and say NO, it will never change.

 

[PWMDMD]

Did you go to Harvard?

No, but I know several people very well who completed undergrad, dental school, medical school, or their MBA at Harvard. I know people who went to Columbia, UPenn, Cornell, my ex-partner was a Princeton undergrad and Harvard dental grad, and my associate went to Brown for undergrad. Fundamentally, no difference in intellectual ability and I can run circles around many of them intellectually as a SUNY grad. We all ended up in the same place. There are still pathways to success and wealth without having to go to Harvard or spend $350K.

 

[Highlander 1459]

That is what makes FL such an attractive place to live. Our property taxes have limited yearly increases. It migh not be perfect but I think it is fair.

I live in the same state.. yeah, property tax deal with the SOH law is great, especially for long term residents living in the same home.
my property taxes are basically uinchanged after 12 year in the same house, even though the value of the home has increased by about 4 times.

That ssaid, you hit on the other side of the coin.
FL is a great place to be if you already have money, but it aint so great if you need to earn money working a regular job.I have 2 neighbors wo are public school teachers.. and neither of them would do that again if they knew then what they know now.

 

[SC Maintenance]

No, but I know several people very well who completed undergrad, dental school, medical school, or their MBA at Harvard. I know people who went to Columbia, UPenn, Cornell, my ex-partner was a Princeton undergrad and Harvard dental grad, and my associate went to Brown for undergrad. Fundamentally, no difference in intellectual ability and I can run circles around many of them intellectually as a SUNY grad. We all ended up in the same place. There are still pathways to success and wealth without having to go to Harvard or spend $350K.

Exactly. You shouldn’t need to go to Harvard to own a home. Or even really need an advanced degree. But with home prices 6x household income that’s where we are.

When the average person can’t afford an average life when they follow the rules and work hard then you end up like Argentina or Venezuela.

 

[dja4260]

My wife and I are Millennials. We have been very lucky as it pertains to owning a home(s). However I do see if we choose to not put in the work and buy/sell, that we couldn't afford to live like we do now. There is no possible way we could afford our current property. I fear for my 3 kiddos when they are of home ownership age.

Our circumstances are the result of timing, hard work, and flat luck.

2013- Bought our first home while in the military. ~750 sq ft row home. 80k. Spent some money, had family help. Sold for 135k 15 months later. Rolled money into next project.
2015- Bought a mess of a house. I barely got conventional financing due to deplorable condition. ~1900 sq ft, 225k. Spent some money and worked HARD for two years. Sold and walked with a 180k check of straight profit.
2017- Moved out of state to a much lower COL. Bought beautiful house, had a 50k, 15 year mortgage. Paid off all our student debt (40k)
2019- Sold house, broke even. Bought home w/ walkout basement on 4 acres w/creek. Amazing schools. 15 yr 2.5% mortgage, we owe 100k. This house is now worth 3x what we paid. But so is everything else!!!!
2019-Present- wife said she would leave me if I made her move again...

That was a fun trip down memory lane!

 

[SC Maintenance]

My wife and I are Millennials. We have been very lucky as it pertains to owning a home(s). However I do see if we choose to not put in the work and buy/sell, that we couldn't afford to live like we do now. There is no possible way we could afford our current property. I fear for my 3 kiddos when they are of home ownership age.

Our circumstances are the result of timing, hard work, and flat luck.

2013- Bought our first home while in the military. ~750 sq ft row home. 80k. Spent some money, had family help. Sold for 135k 15 months later. Rolled money into next project.
2015- Bought a mess of a house. I barely got conventional financing due to deplorable condition. ~1900 sq ft, 225k. Spent some money and worked HARD for two years. Sold and walked with a 180k check of straight profit.
2017- Moved out of state to a much lower COL. Bought beautiful house, had a 50k, 15 year mortgage. Paid off all our student debt (40k)
2019- Sold house, broke even. Bought home w/ walkout basement on 4 acres w/creek. Amazing schools. 15 yr 2.5% mortgage, we owe 100k. This house is now worth 3x what we paid. But so is everything else!!!!
2019-Present- wife said she would leave me if I made her move again...

That was a fun trip down memory lane!

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They all look great. Presumably those are the after pics.

Our first house was a fixer upper. I thought it went quite well. My wife said never again.

 

[97K15004WD]

There are some things that can be done to "pad" your "luck". For example - while in college, don't do an internship with a "meh" company. Intern at a company that will be a positive for you and your career. If you do a respectable job during the internship you will most likely get a job offer and have a great start on "who is who" in the company. Join clubs that interest you and invest in the relationships to help you find a job that will pay the bills.

Don't expect your college education to get you anything other than what you put into it, and even then it's only worth what you prove it to be. There are free lunches in life, but they are worth what you pay for them (and what I mean is just because you go to a great school, it doesn't mean you get a "pass" for the rest of your life - at some point you have to prove you are worth it to an employer, spouse, whatever or whomever regardless of what school you went to).

Things are most definitely hard now for most kids, but those that have the "drive" will succeed. I tell my kids the two most important things to have are perseverance and resilience. Housing prices always go up and down.

As I've said before, any of us old timers have seen this cycle more than once. It's a "normal" thing that happens and will even back out in the near future.

 

[goingplacesanddoingstuff]

There are some things that can be done to "pad" your "luck". For example - while in college, don't do an internship with a "meh" company. Intern at a company that will be a positive for you and your career. If you do a respectable job during the internship you will most likely get a job offer and have a great start on "who is who" in the company. Join clubs that interest you and invest in the relationships to help you find a job that will pay the bills.

Don't expect your college education to get you anything other than what you put into it, and even then it's only worth what you prove it to be. There are free lunches in life, but they are worth what you pay for them (and what I mean is just because you go to a great school, it doesn't mean you get a "pass" for the rest of your life - at some point you have to prove you are worth it to an employer, spouse, whatever or whomever regardless of what school you went to).

Things are most definitely hard now for most kids, but those that have the "drive" will succeed. I tell my kids the two most important things to have are perseverance and resilience. Housing prices always go up and down.

As I've said before, any of us old timers have seen this cycle more than once. It's a "normal" thing that happens and will even back out in the near future.

Respectfully disagree. Housing prices are not going down anytime soon. There may be some slight relief in mortgage payments if rates come down, but housing is not going down in price at any point in the next decade or so.

Demand is too high.

 

[CKN]

Just because you can, doesn't mean that you should.

Again-it's a great tool. Or-your kids can spend it after you pass.

 

[CKN]

up to a point that is true... ownership of my home is part of what makes some of us technical millionaire's..

but it's value to me isn't what it is worth but what it does for me
and as you stated it is not a liquid asset that I can cash in on in a minute.

figure you have to live somewhere and money is always going to be tied up in that housing aspect, one way or another.

If your home is worth substantial amount-yes it has cash you can pull out.

I don't understand what is so difficult to understand here.

 

[alarmguy]

I actually know several Harvard grads. You don’t get into Harvard without a sponsor. They told me themselves. Esquire magazine is hardly a realistic cross section on the world.

I graduated at the top of my rural high school went to a ho - hum college and graduated towards the top of my class there and was recruited by a large company. I was lucky. You shouldn’t need to be in the top 10% to own a modest family home.

Did you go to Harvard?

My knowledge of this individual and the organization is first hand and if your looking to somehow spin this like it wasnt some kind of great achievement into something else I cant help you. The story is 100% correct, I didnt choose the publication because of the name of the publication, I choose the publication that best told the story in the shortest form possible. You can do a search and pick whatever publication that you want to read about him.

The point of my story is, I read some of these threads and some people think life is rough in the USA. Yet determined individuals in impoverished areas of the world can make it by working hard because they DREAM of coming here and IT STILL IS the land of opportunity out of the whole world.

Life is only what you make it out to be and there is no greater country in the world where you can make it happen in the USA> Ive known first hand people who have waited over a decade from first applying to legally come here. That is how long the list is in some countries.

Curious did you also walk to school 2 hours every day on dirt roads AND through streams to get to high school? If you did, I suspect many others would never.
Maybe I am reading your response wrong but disappointed if I am reading it correctly.

 

[thastinger]

A huge downside is that property taxes are higher because of the inflated property evaluations.

Now you're catching on.

 

[PWMDMD]

Respectfully disagree. Housing prices are not going down anytime soon. There may be some slight relief in mortgage payments if rates come down, but housing is not going down in price at any point in the next decade or so.

Demand is too high.

You are claiming omniscience and to know the unknowable. There are an effectively infinite number of events that could take place between now and ten years from now that could have a profound effect on housing demand.

 

[wpod]

I have more success than most boomers and still the line is “quit whining and get a job.” I have a job, investments, etc.

The problem is that the system is degrading faster than successful young people can keep up. Their lifestyles are in severe retrograde, even as they continue adding to their success. We’re running on a treadmill that is increasing in speed.

That has been the plan for decades.