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[Celcius]

Inflated prices are up, interest rates are up, and it seems everyone wants a house these days.

I’m starting to doubt that houses ever go back to pre-pandemic levels but how does this madness end?

Do you just need to “git gud” and save more hardcore to afford the higher prices? Start being ok with spending like 40% of your monthly income on housing? Get married for double income no kids (DINK) living? Or does everyone here already own a house?

 

[Guy_who_thinks_hes_cool]

private sale my friend, private sale

 

[Deleted member 1159]

Inflated prices are up, interest rates are up, and it seems everyone wants a house these days.

I’m starting to doubt that houses ever go back to pre-pandemic levels but how does this madness end?

Do you just need to “git gud” and save more hardcore to afford the higher prices? Start being ok with spending like 40% of your monthly income on housing? Get married for double income no kids (DINK) living? Or does everyone here already own a house?

Incoming recession, raising interest rates, people trying to cash out before prices come down = buyers' market soon, IMO.

 

[Maiden Voyage]

I'm not in the house market but I can confirm there is also a contractor constraint.

I am grateful we bought our house in 2017. Also grateful we paid the sucker off quickly.

 

[EviLore]

 

[12Goblins]

honestly not sure where all this money is coming from where people are rushing to pay 150% asking price for some already overpriced piece of shit.. just seems like everything going to fall apart soon

 

[chromhound]

Prices are starting to cool down . Waiting for the perfect timing

 

[Brazen]

private sale my friend, private sale

That is precisely the issue at hand, unfortunately. Monolithic corporations and tech giants buying up housing for pocket change and/or turning it them in to rent housing/investment.

 

[Guy_who_thinks_hes_cool]

That is precisely the issue at hand, unfortunately. Monolithic corporations and tech giants buying up housing for pocket change and/or turning it them in to rent housing/investment.

as much as it saddens me to admit it

that is correct

 

[DKehoe]

So glad I managed to buy a place a few years back. Seems like so many people my age just aren't going to be able to get on the property ladder.

 

[ClanOfNone]

I've never wanted to own, though I realize the value of it. I hate dealing with maintenance and upkeep, and I like having the ability to pick up and go, so I've always rented.
Rents have gone up at an insane level. Living in Florida certainly doesn't help. Come this November my rent jumps from $1750 to $2500, and it's bullshit. How is a jump that large even legal?
I dunno how regular blue collar Joes even float it down here anymore. If you're not in a 2 income household pulling down close to six figures you're at the poverty level.

 

[p_xavier]

There are about 200000 new housing constructions a year and a million new immigrants a year. Yeah, logic. Plus cities refuse to densify because of bad urbanists and NIMBYs. Urban sprawl my ass.

 

[StreetsofBeige]

I dont know about the US, but Canada has had stress tests for years where the interest rate is faked at 5.29% (I think) just to see if you can pass the screener rate. If you do, then you go through the process of getting the real rate which is more like 2-3%.

Everywhere in Canada homes have surged for years including covid years which you'd think every numbnut would be more cautious and saving. But instead it's bidding war mania again.

It seems to have cooled off the past few months, but the peak high was in Jan-Feb. I think things stabilized now.

Either there's shit loads more people with money than I think (to pass the screener rate), or there's some stupidity going on where people are getting approved behind the scenes.

The mortgages rates were super low bottom out at around a 1.1% variable rate (at least thats what I got offered for renewal in Feb). Now it's up to 1.90% as rates have gone up 0.75% this year. And more coming. Whomever is straggling the fine line of budgeting at let's say a 1.5% variable rate in January is now at 2.25%. And if the rates keep going up (which everyone says they are) that person might be at 3% by year end.

There's going to be a lot of people blasted out of the stratosphere going broke. Might be another housing crash like 2008/2009 again because too many people jumped it at the bottom rate hoping rates never go up.

 

[p_xavier]

They make it sound good but Canadians are much poorer than Americans.

 

[p_xavier]

I dont know about the US, but Canada has had stress tests for years where the interest rate is faked at 5.29% (I think) just to see if you can pass the screener rate. If you do, then you go through the process of getting the real rate which is more like 2-3%.

Everywhere in Canada homes have surged for years including covid years which you'd think every numbnut would be more cautious and saving. But instead it's bidding war mania again.

It seems to have cooled off the past few months, but the peak high was in Jan-Feb. I think things stabilized now.

Either there's shit loads more people with money than I think (to pass the screener rate), or there's some stupidity going on where people are getting approved behind the scenes.

The mortgages rates were super low bottom out at around a 1.1% variable rate (at least thats what I got offered for renewal in Feb). Now it's up to 1.90% as rates have gone up 0.75% this year. And more coming. Whomever is straggling the fine line of budgeting at let's say a 1.5% variable rate in January is now at 2.25%. And if the rates keep going up (which everyone says they are) that person might be at 3% by year end.

There's going to be a lot of people blasted out of the stratosphere going broke. Might be another housing crash like 2008/2009 again because too people jumped it at the bottom rate hoping rates never go up.

I mean Toronto is going for Hong Kong style pods. Canada has the lowest supply of housing in the G7.

 

[clem84]

They make it sound good but Canadians are much poorer than Americans.

Value is based on demand as you all know. I live in Quebec and demand is not slowing down here, despite prices continuing to climb. Everyone I've talked to about this don't think the prices will go down. They might stablelize at some point. The situation is worse in Toronto, and much worse in New York.

 

[p_xavier]

Value is based on demand as you all know. I live in Quebec and demand is not slowing down here, despite prices continuing to climb. Everyone I've talked to about this don't think the prices will go down. They might stablelize at some point. The situation is worse in Toronto, and much worse in New York.

Demand is due to not enough housing being built and with immigration/foreign buys. I sold my 512sf condo in Montreal for 460k$ in 2020. How the fuck is that sustainable for a poorer family? I didn't even have a bedroom...

 

[StreetsofBeige]

I mean Toronto is going for Hong Kong style pods. Canada has the lowest supply of housing in the G7.

I'll take it. Anything that bumps up the price of my properties I'm all ears. If it's the tried and true supply and demand, thats fine with me.

The GTA gets roughly 60,000-70,000 new people per year. Got to put them somewhere. And there's barely any townhouse and detached home developments unless it's out of town or a small pocket of new homes worth $1M for a townhouse. Condos are fastest way at lets say 40 floor/10 units per floor towers. That's 400 units = around 800 people assuming 2 people per unit. GTA would have to build around 70 towers at 40 floors per year.

All ballpark math but you get the idea.

Anyone can buy a condo, but if someone wants a townhouse or detached, they got to fight with the tight supply. During covid I know a bunch of people who sold and moved hours away. One guy moved out of province for cheap. Everyone just does remote work. The nearby people have committed to coming in once every couple weeks which management is good with. The guy who moved out of province banked $1M in his pocket. The others banked half a mill or moved to a much bigger house for the same price.

Toronto, Canada Metro Area Population 1950-2025

Chart and table of population level and growth rate for the Toronto, Canada metro area from 1950 to 2025. United Nations population projections are also included through the year 2035.

www.macrotrends.net

 

[p_xavier]

I'll take it. Anything that bumps up the price of my properties I'm all ears. If it's the tried and true supply and demand, thats fine with me.

The GTA gets roughly 60,000-70,000 new people per year. Got to put them somewhere. And there's barely any townhouse and detached home developments unless it's out of town or a small pocket of new homes worth $1M for a townhouse. Condos are fastest way at lets say 40 floor/10 units per floor towers. That's 400 units = around 800 people assuming 2 people per unit. GTA would have to build around 70 towers at 40 floors per year.

All ballpark math but you get the idea.

Anyone can buy a condo, but if someone wants a townhouse or detached, they got to fight with the tight supply. During covid I know a bunch of people who sold and moved hours away. One guy moved out of province for cheap. Everyone just does remote work. The nearby people have committed to coming in once every couple weeks which management is good with. The guy who moved out of province banked $1M in his pocket. The others banked half a mill or moved to a much bigger house for the same price.

Toronto, Canada Metro Area Population 1950-2025

Chart and table of population level and growth rate for the Toronto, Canada metro area from 1950 to 2025. United Nations population projections are also included through the year 2035.

www.macrotrends.net

That's my point, not enough supply. We let in about 5x more people in than new builds. But for what reasons? I mean the only way I could afford my house was me being a top 1% earner, having my dad winning the lottery, twice and giving me money. How fucked up are we as a society?

 

[Haint]

honestly not sure where all this money is coming from where people are rushing to pay 150% asking price for some already overpriced piece of shit.. just seems like everything going to fall apart soon

It's coming from the professional class. More than 40 million US households earn well over 6 figures, there's no shortage of people who can afford 30 year mortgages on ridiculously priced homes. Through sheer volume, this is who controls the housing market, not hedge funds, not a shadowy "1%", and not foreign investors. There are 10's of millions of young professional couples bring home nearly $200K/yr and up who could not give 2 shits about inflation, gas prices, food prices, or offering a 30% price premium on their dream home or car.

 

[Raven117]

I keep reading b.s. about "this isn't a bubble" "things will just cool, not crash."

Uh-huh. Real estate is absolutely going to take a hit, its just usually a lagging economic indicator. Only idiot real estate people don't realize it until much later.

 

[Lunarorbit]

Inflated prices are up, interest rates are up, and it seems everyone wants a house these days.

I’m starting to doubt that houses ever go back to pre-pandemic levels but how does this madness end?

Do you just need to “git gud” and save more hardcore to afford the higher prices? Start being ok with spending like 40% of your monthly income on housing? Get married for double income no kids (DINK) living? Or does everyone here already own a house?

I'm giving the fire emoji to you cause you used dink correctly.

I'm a dink. I live in an area with limited space for new housing. Its getting nuts how much little space contractors are building on and yet the prices are more expensive for places with a quarter of the land I have.

There needs to be a reset at some point. Foreign money and investment firms shouldnt be allowed to take all the properties while actually working Americans can't buy anything

 

[StreetsofBeige]

It's coming from the professional class. More than 40 million US households earn well over 6 figures, there's no shortage of people who can afford 30 year mortgages on ridiculously priced homes. Through sheer volume, this is who controls the housing market, not hedge funds, not a shadowy "1%", and not foreign investors. There are 10's of millions of young professional couples bring home nearly $200K/yr and up who could not give 2 shits about inflation, gas prices, food prices, or offering a 30% price premium on their dream home or car.

I'm giving the fire emoji to you cause you used dink correctly.

I'm a dink. I live in an area with limited space for new housing. Its getting nuts how much little space contractors are building on and yet the prices are more expensive for places with a quarter of the land I have.

There needs to be a reset at some point. Foreign money and investment firms shouldnt be allowed to take all the properties while actually working Americans can't buy anything

As Reallink said, if there's enough people with cash to pump up prices, it'll keep going until they max themselves out. Then assuming people dont all dump their homes later on, a new threshold of property prices is set for each neighbourhood.

People say there's got to be laws or limits, but you cant really do that aside from the gov doing taxes or stress test mortgage rates, or something really draconian like only citizens of the country are allowed to own property (which is not a very western/democratic kind of law). They arent going to limit the number of people who move into a city or force people to sell their homes for a government set approved price.

It's really no different than ebay auctions. Highest price wins even if it means the bidders with the most money are the ones with the best capacity to drive it up.

 

[Amiga]

USA is massive, people not tied down by work location should just move to the cheaper states. If you connect with extended family and friends you can just build your own town.

 

[Go_Ly_Dow]

Accepted that I'll live at home with my parents and continue saving until I can afford about a 50% downpayment. 20% to go....

But also hoping that prices edge down a bit with interest rates / inflation here in the UK, so that when I do jump in it's a bit more reasonable than it is now. Looking for a £250-270k property, so about 2-3 bedrooms.

 

[Fools idol]

I know a handful of very very wealthy individuals in the LA real estate market and every single one of them has fully liquidated their portfolio in the last 6 months anticipating a crash.

I don't know much about US property markets but they do, and it's not looking good.

My buddy's direct advice was if you are thinking about buying, maybe hold off until next year. High chance you could get a far cheaper place after this shit melts.

 

[jshackles]

I bought my place a few years ago, before things really going gangbusters here. The "value" of my property has doubled in less than 2 years. My neighbors are selling their houses for $250k more than I bought mine. Shit is bananas.

I don't really care if it crashes or not at this point, it's not like I'm planning on selling ever. And my mortgage payment ended up being $600 / month less than I was paying in rent two years ago. That same house I was renting back then went on the market again with a $1,000 markup on top of what I was paying then. As I said, bananananas.

 

[casablanca]

Prices are going down in Paris right now.
First time in years that a handful of districts cost less then 10k€/m2.
Don’t know if it’s a worldwide trend tho.

 

[jason10mm]

It's all about location. If you are buying in a growing area and new construction is limited, the price ain't never going down. If you are in an area losing people or where they can slap a band new subdivision across the street from you.... beware.

 

[haxan7]

Dave Ramsey keeps saying home value growth is going to go back to normal levels, but not crash like in 2008. I didn't buy yet so I would love to see a big drop.

 

[Jaybe]

It’s going to get interesting with rising rates, inflation, and an ever increasing likelihood of recession. Plus the news has shifted to more doom and gloom putting more downward pressure.

https://www.ctvnews.ca/business/rea...estate-market-slowdown-materializes-1.5908296

I’m In Toronto in a box in the sky. Wish I had land, but I still don’t see how they can keep up with demand from immigration. Some of the elite class have a goal for 100 million people in Canada. I’d love to cash out on my place for more property far away from the city some day or an area with better value.

 

[MikeM]

Come on man. Be an entrepreneur. Start an OnlyFans. Make that $$$ with feet pics.

In all seriousness, I fear for my toddler for what this will look like in 15 years. Maybe a wild amount of boomers will die resulting in the flooding of their homes on the market.

 

[Vicetrailia]

I know a handful of very very wealthy individuals in the LA real estate market and every single one of them has fully liquidated their portfolio in the last 6 months anticipating a crash.

I don't know much about US property markets but they do, and it's not looking good.

My buddy's direct advice was if you are thinking about buying, maybe hold off until next year. High chance you could get a far cheaper place after this shit melts.

Problem is it needs to be hundreds of thousands cheaper. It won’t crash that hard.

 

[DeaDPo0L84]

Me and my wife just sold our house for $460k that we initially purchased for $245k, and owe $210k on so we made a decent profit on it. We only made the decision to do so cause we're building a new home for $390 so it all worked to our benefit to do it.

If you're just jumping in to buy your first home, honestly I don't really have any good advice except maybe find a newly developing community that you can put a deposit down on and wait a year for it to be built so you have time to work on credit/income, plus you get a brand new home.

 

[haxan7]

Come on man. Be an entrepreneur. Start an OnlyFans. Make that $$$ with feet pics.

In all seriousness, I fear for my toddler for what this will look like in 15 years. Maybe a wild amount of boomers will die resulting in the flooding of their homes on the market.

 

[jason10mm]

In all seriousness, I fear for my toddler for what this will look like in 15 years. Maybe a wild amount of boomers will die resulting in the flooding of their homes on the market.

This is kinda how neighborhoods evolve though, at least in areas with new contrustion and steady growth. A new subdivision is built, mostly young families move in. 30-40 years later its just the now old folks left, so they sell to young families, usually with a higher income level as home values went up and the area gentrified as the city expanded outwards around it.

I just bought a house built in 1990. At that time it was probably a $200K home. I bought for 2.5x that and now its up another 100k or so. So as these old folks cash out for 600k cash only the wealthiest of families can afford to buy in, these ain't starter homes anymore. But there is no place closer to downtown unless you buy into a much lower quality/smaller home and build a mcmansion on it, hard to do since the lots are so small. So I think my area is pretty firmly locked at a high value since the only comparable new homes are 15-30 minutes farther out and who wants that commute? My state is booming with Cali refugees so barring a mass exodus in the distant future (thanks to climate change perhaps) I don't see any drop in real estate value, maybe a flattening of the curve at best as interest rates rise. Problem is that even if I sell for big money any new house I buy would be at a much worse interest rate than what I got, wiping out the surplus cash unless we flee to an even cheaper area. So folks CAN'T sell because they can't get a comparable house somewhere else, driving down availability and raising prices even more.

 

[Marc13]

If you're a first time home buyer, I would say wait the market out for another year or two. I doubt the market will crash rather it should cool off and prices will slowly trickle back down. Just my opinion. Take it for what it's worth.

 

[Lady Redfield]

Houses in Canada have been ridiculously priced for years, much before covid came along. Certainly no young people can afford to even put a down payment, they will never be able to afford a house, especially when the cost of living in general has gone up.

 

[nocsi]

Check out /r/rebubble. The crash has already started. 2008 was mortgage backed securities, now it’s securities backed mortgages. I’m in the Seattle area and prices have deflated and started to drop.

 

[IntentionalPun]

Mine is worth 2.5 times what I bought it for 12 years ago.

Hit 7 figures a while back.

BUY THE DIP

(and about the sell since things are cooling off and I want to be mobile for a while)

 

[Porcile]

Save like a mad man and cut back on really dumb expenses that are equivalent of just burning money. See how that goes.

 

[TransTrender]

Check out /r/rebubble. The crash has already started. 2008 was mortgage backed securities, now it’s securities backed mortgages. I’m in the Seattle area and prices have deflated and started to drop.

Wow, yeah, that was an interesting romp through that sub.
Some of those prices and "appreciation" curves were fucking insane.
Sooo
Many
People
Will
Be
Holding
Bags

Also megacorp real estate companies can get fucked. People need to be able to buy homes. Actually heard of a few locals who refused higher cash offers from investors to sell to actual humans who will use it as their actual home.

 

[Celcius]

Save like a mad man and cut back on really dumb expenses that are equivalent of just burning money. See how that goes.

That's my current plan.... just saving and saving and saving...

 

[nocsi]

Wow, yeah, that was an interesting romp through that sub.
Some of those prices and "appreciation" curves were fucking insane.
Sooo
Many
People
Will
Be
Holding
Bags

Also megacorp real estate companies can get fucked. People need to be able to buy homes. Actually heard of a few locals who refused higher cash offers from investors to sell to actual humans who will use it as their actual home.

We live in some fucked times. I’ve been waiting for a while now, I could’ve bought cash but every sign points to it being too stupid to enter now.

 

[Lady Redfield]

Save like a mad man and cut back on really dumb expenses that are equivalent of just burning money. See how that goes.

It’s not always that easy. Things happen in life that may require unexpected spending. People may not have a job that pays high cuz it’s all they could get. Life is expensive, you have to get food, gas, and other necessities to live.


If it were that easy to save, everyone would have a house.

 

[Kenpachii]

My house went up by like 2,2x the amount in the last 6 years i believe. Before 2 people had to work to pay for it, now u need 4? its so stupid i have friends moving in with there parents again because they simple are not capable to buy anything.

I got lucky that i bought my house when the prices where still normal, but god dam the prices now are ridiculous.

It gets even worse when u have kids and no parents to take care of it, which one of my buddy's has which basically makes them sol directly.

 

[Sleepwalker]

Sold a house in Canada, bought 2 apartments in South America, got leftover cash. I would advise to wait as much as possible, people don't really know what's coming in terms of macroeconomics.

 

[Ozzy Onya A2Z]

I'd say wait to see where inflation rises and settles at over the next 1-2 years, unless you're able to lock in a 4-7 year fixed rate home loan and come out on top before rising interest rates. Work out the saving vs the spend and your/combined predicted cashflow to answer the question yourself if you should buy or not. On a long enough time line real estate will have opportunities to sell and make money. If you're looking to flip and make cash then now isn't the time to be buying, it's selling time. Over the next 1-3 years it will turn to a buyers market. Honestly to save money move back with your family and just put away all you can. Once you're out it's all on you so don't overstretch either.

If you have opportunity to buy and rent it out, now and the immediate future is still a great time due to 1 to 1 rental revenue vs mortgage costs. Rent costs are at an all time high in a lot of countries. You can pay down some serious principal if you do things right but you need some cash and cashflow to back those things. Long game stuff though. If you have a renter it can be easier to sell a property to an investor as well, should you need to exit. You could look at having friends live with you and part pay things to your mortgage. You could have your parents live/share costs as many do these days too. There are some other weirder opportunities out there e.g. buy a decent house and rent it to maximise while you live in a rental shit hole on the super cheap and spend 5+ years paying the hell out of thing to get mortgage free/reduction early in life (brilliant interest saver over your life). The latter isn't an option the misses and I chose but we looked at it seriously when younger.

I own our house with the misses, prior to having kids. Renovated the old one. Knocked it down and built a new one. Rode the insanity in the Australian market over the last 15 years and have about 5.2X the original purchase price. Stupid bubble down under that is about to burst and houses will likely drop 10-15% over the next 1-2 years. Lots of people who bought down here in the last 5 years have no idea what it's like in a rising inflation/mortgage rates economy. Things will tighten up all round, not just housing. We also have a family trust and self managed super funds for investments e.g. shares/property/company etc. It's not brand new to us but we're not property flippers either. It's more like retirement planning for us or a place for our kids as they get older and possibly live with friends/renters or move out etc. We don't expect them to be able to buy easily in the next 10-15 years unless they move way out to bum fuck nowhere.

 

[FunkMiller]

Rode the insanity in the Australian market over the last 15 years and have about 5.2X the original purchase price. Stupid bubble down under that is about to burst and houses will likely drop 10-15% over the next 1-2 years. Lots of people who bought down here in the last 5 years have no idea what it's like in a rising inflation/mortgage rates economy. Things will tighten up all round, not just housing.

I, for one, hope so. I'm looking to get a place up in Cairns for the investment, and to be able to stay close to family when I'm over, and the prices have been fucking laughably high in recent months. There's shit going for two/three hundred grand more than its worth at the moment.

 

[OmegaSupreme]

I'm depressed now. Thanks everyone. I was hoping to own a house by the time I was 40 but it's not looking like it's going to happen.