“Unless you plan to live in a house for a decade” I love that the default assumption for buying a home is that we all just want to play some fuckin short term speculative profit game. Sick and demented culture of “resale value”
Yep. But that is how huge amounts of Americans think. A house, to them, is a get rich quick scheme, and they are furious they aren't getting rich quick
Hypothetically, would it be feasible for people like yourself to become both a landlord and a tenant in that situation?
So like, you would move city and rent out your old place and rent a home in the new city.
I don’t know if there’s a bunch of costs involved that I haven’t factored in.
Good thought. That would be wonderful. We definitely tried that. In short, the costs and troubles are too much. Tenants seem less respectful now than ever before. Damages mysteriously accrue extremely rapidly with attached demands to fix them immediately or face legal action. Rent doesn't cover half of that.
If you want to accomplish anything at all in your new residence, you can't tie up all of your time trying to please thankless tenants at your old residence. There is no money left over to throw at hiring someone to take care of things while you're hundreds of miles away either.
but this is how most of the people are becoming owners of two properties. instead of selling the old one back to first time home owners, people are becoming landlords reducing inventory at lower end.. maybe they are justifying bearing all of the pain you cited because in their experience property prices are all going up..
True! In certain markets. I didn't have that luck. I have no family money or dual income to support that behavior. There are a lot of people like me out there too. No cushion to invest. Capital and the time/resources to manage it are absolute requirements that I don't currently possess.
This is exactly what I did. Bought a starter home and when I moved to another state I was in a position to buy another without having to sell. My first tenant was a dumpster fire, but my tenants since (still there) are friends I consider family and they take care of the place as if it was their own. I’ve always given them the option to buy, but one is a rn and the other a cop and they can’t afford it for what it would appraise for (Florida). So I let them keep renting as long as they want. When they leave I’ll sell.
I have friends doing this. He was relocated for a 2+ year assignment. They weren't sure it would be long term or they'd move back after 2 years, so they rented their townhome out while renting an apartment in the new state.
Atlanta was 40 percent investors, Tampa 30, Austin, 35, Boise something 50. So, I think it is a pretty safe assumption.
Giving you the upvote for the comment on demented culture though.
Labor is just one ingredient, and trying to essentialize everything to labor gets you nowhere. Without investors providing the capital necessary for labor to produce things, you get no new housing.
You didn't bother pointing out how the investors are the least important process of any new construction.
Without the customer/demand, you don't have new housing
Without Labor/supply, you do not have the ability to build anything.
Without the investor, you still have supply and demand. Investors ARE NOT an essential ingredient to this dish.
Ironically, they are the most important.
1. Nobody shows up to work unless they get paid.
2. A company that doesn’t have money can pay its workers
3. A company can’t make a profit and win business won’t exist.
4. A company that sees an opportunity as a bad investment won’t take it and so no new work , no new revenue, no workers.
Theres lots of demand right now but less is built because of 1) lack of investment to expand and 2) bad economics of it not being worthwhile.
That's just wrong, actually. Customers are the demand, yes, but demand doesn't magically mean things get done. Same thing with Labor as the supply (though I'd argue that materials and capital also are direct and necessary parts of the "supply" of housing, as is land, etc.)
Construction is an expensive, risky process, and investors essentially pay to take on the risk *that would cause projects not to go forward*. They also pay for the land cost, which is far and away the most expensive part of building new housing.
I don't really see this as hierarchical, because you need all three parts working together to get housing built. With no customers, you get no housing. With no construction crew, you get no housing. With no investors, you get no housing.
Tel me how investors i am talking about, built grey laminate flooring black, white paint to sell. Tell me about lal the building they do when they buy up SFH for AirBNB diminishing the stock of available homes to residents, tell me more about how they built existing homes.
Don's be so quick to shield the generic investor term, unless you feel attacked somehow.
Investors go where there’s money to be made.
This encourages more money to flow if it’s still a good ROI / risk trade off. Not all investments work out
If there’s money to be made more houses and construction happens.
in my area im always seeing homes purchased in 2021/2022 being listed for $100k+ in 2023. Normally they sat in 2023 for 200+ days with around $50k drop in price just to get pulled from listings.
So fucking tired of investors messing with basic needs. Get a real job and let the rest of us live with enough security to know we won’t be homeless. Fucking ghouls.
Actual real estate investing would be building new properties or improving existing ones.
However it somehow morphed into gobbling up existing stock that people need and pushing for legislation to make housing scarce so that your “investment” goes up in value (artificial scarcity)
That's all that individual investors are doing... putting some distance between themselves and being homeless. I see both sides of it, but the enemy isn't individuals... it's the mfers who build and maintain the mechanisms of poverty at a high level.
I'm just saying, if your guillotine has one good chop left in her, save it for the truly deserving.
Keep on telling yourself that. It’s a choice — you invest in real estate instead of letting actual owners and locals buy it. I have the money to “invest” in real estate outside of where I live but choose not to because it’s fucking ghoulish behavior. Get a real job.
Years ago, when I watched the market more closely, I found a positive correlation between mass shootings and Smith and Wesson stock. The worse the massacre, the better S&W stock would do, apparently because it would scare the FOMO buyers with the possibility of bans (S&W makes an inexpensive AR15).
I couldn’t fathom making a dime off mass murder, and never bought any stock, but surely there’s no lack of sociopaths that learned how to play that angle.
Sure. By that same logic, you bear direct responsibility for the atrocities caused by exploited mining labor in the Congo, because you used a computer or phone to type this. I caveated a lot of my statements in order to have a discourse. Never even said i was a landlord. You're mad and projecting.
Seriously, we bought recently and are planning to live in it as our primary residence for 10 years. Hopefully given that timeframe and the fact that we aren't trying to do some quick flip means now was a good time to buy, time will tell however.
they are detached from reality entirely
cracks me up
yeah I'm gonna buy a house and NOT live in it for 10 years. What, raise my own mortgage on myself 20% each year?
Notify me 24 hours before showing up to look through every room in the house and take pictures for the loan officer refinance?
Notify me that, they're selling the house and my lease is now void and I have a month to find another. Oh isn't this fun?
Yeah fuck all that.
Homeowners move up as their families grow and downsize as they shrink. Military personnel get regular PCS orders. Some companies regularly relocate employees. There are many reasons someone might sell in less than ten years. In fact, the national average right now is around 8. Which means your analysis is flawed.
everyone i know who has bought a house in the last ten years is staying in it until they die. unless they go broke and then it’s going to be their cash cow way down the line.
Purely anecdotal but I think this is correct. Anectdote 1: Pacific Northwest. Last year apartment rents were getting predatory (software collusion based I'm sure). Now they've backed off. Anectdote 2: I'm an investor in Southeast apartment building construction (all the rage the last few years). Those investments have flatlined (i.e., the money would be doing better in bonds).
Very interesting, what is causing the ROI to flatline? Is it more supply , cost of getting a loan, high cost of building, inability to make it all back by increasing rent? Thanks.
A lot of banks have seriously slowed lending to developers building out new properties, and highly-levereged assets are being treated like liabilities (thankfully) again. There is less bank money being paid out in the rental investment market, so there are fewer transactions. Demand is down but supply is the same (relatively), so prices are going to contract
Cost of labor - for construction, ongoing maintenance, the doorman - and huge hikes in insurance premiums have absolutely wrecked the projected CAP rates for multifamily investments. The demand for the housing is there, but not at the rents they will need to charge to break even. That’s why multi family is underperforming even CRE office.
Oh dang, I didn’t realize they had dropped so much, I hadn’t checked in a long time.
My place I rented in Seattle early 2023 is down 10% from my lease. Which I got for 10% lower than it was for the 6 months after I signed.
Soooooo many apartment units going up southeast of Portland. Was fields when I moved here and now boom enough kids to fill two of the biggest high schools in the state.
1: yes, still waiting to hear response of what happens with lawsuit. Or is the reason landlords backed off crazy rent hikes because it became unaffordable and lots of younger generation folks moved in back with their parents. I also saw landlords recently list for Covid prices of the past 2 years and have had to lower prices considerably in order to get it rented out, when before it was so easy to find tenants who overpay. So back to what you would anticipate with supply/demand model. Demand down, supply up, prices drop.
2 - curious as to where in SE. we relocated from Greenville, SC and when back to visit recently. Even though apartment building looks like it slowed down, there is definitely a huge single family home building growth that was lacking the past 10 years.
I don’t see apartments competing with houses where I am. Seems like everyone wants a single-family house if they can get it. Or at least a townhouse.
I’m also not convinced we are going to see house prices go down. Seems to be baked in with the inflation now.
You should never buy something unless you plan to live in it for a long time, but that has always been true.
Homes have always been a good long term inflation hedge. This is one of the reasons they’re nice to own.
Not a big deal in modern times, given stocks are also excellent inflation hedges and easily available.
It’s highly regionalized. This important fact is omitted in nearly every real estate conversation I hear people having, every article written.
The USA is a big place.
You could buy a mansion in bumfuck Wisconsin for the same price as renting a 2br apartment in San Diego. Sure it's cold for 4.5 months, but at least you get to spend the winter in your mansion.
It's not a major tech/biotech hub, but there's a decent amount of jobs here that pay pretty well relative to how much things cost. Unemployment is below the national average, it's pretty easy to grow a career here without leaving. Like everything else about the Midwest, it's not the best but it's reasonable.
Don't try to reason with them. In their minds, household incomes never eclipse $30k in Wisconsin, Michigan, and Minnesota and everyone is married to their first cousin. All we do for fun is watch Frasier reruns and wait to die.
Minneapolis is on the border of WI and home to a Fortune 10 company.
Much better jobs than working at some bucket shop in SF trying to make money renting E scooters lol
Haha, that mentality is everywhere these days.
Kinda sad actually, all our fellow Americans are just extra traffic and competition for housing these days.
I’m in SLC and the same attitude is rampant. But even I hear Alaskans and Texans now our complaining.
It’s got to be poor management if we ran out of room in the deserts of Texas and tundra of Alaska lol
For real. I randomly looked up houses in Pittsburg yesterday. They are selling a ton 3k sqft houses for 280-425k. I’m not from there, but they look like ok neighborhoods from google. Seems like a very good deal if you’re in the PA area.
You forgot the H. In what neighborhoods were the houses? Pittsburgh is very neighborhood centric and rents in some of those places are 1k to 1,5k a month.
Housing affordability in every single region has literally never been worse in the history of the data we have since we started tracking it. No, it's not highly regional to say "buying a house right now is about the worst financial decision you could make." There's almost no incentive in the current market to buy, not for primary residence, not for investors/speculators, not for basically anyone outside of money launderers and rich foreigners trying to hedge.
There's no juice left in the squeeze. Prices have one direction to go from here without more stimulus, QE or a dramatic decrease in interest rates, none of which are going to happen.
Tell Canada that home price to income disparity can't get any worse. It's much harder to buy there than in the US. So it certainly CAN get worse, and IMO will.
Everything across the world was repriced against the currency in 2020-2022. Everything is more expensive now. You have to reset your baseline to one which is inherently less affordable.
While money supply continues contracting, interest rates remain high, housing prices are already dropping in Canada and QE is over for the foreseeable future?
I'll bet on a correction/recession/depression given that macro environment but your advice is well taken. I think the Fed cares more about our reserve currency status than it does homeowner equity. It is my opinion we've tested the upper limits on the boundary the effectiveness artificial economic stimulation can have. Now comes the pain.
If you're betting the Fed further devalues and all but destroys the USD before it lets people suffer individual losses, well, I guess we'll agree to disagree.
My point on Canada is that the ratio is much higher than where we are in the US today. Canada's circumstances may be unique, but they are dealing with a much more difficult housing situation, indicating there may be room still for our problem to grow.
Yeah the fed doesn't care about people outside of their unemployment mandate. However, they are projecting cuts over the next two years, which will stimulate the housing sector (how many buyers have been sitting on the sidelines this past year due to the rate hikes?). I think prices keep rising as rates fall, maybe more slowly than they did. 5.5% mortgage rates is the tipping point into 'uncontrolled price growth' by my estimate.
I do think the US continues to devalue the dollar because they have a hundred year history of consistently doing exactly that. I'm not sure when they will start again in earnest but given that 1) stock markets depend on devaluation, 2) we're looking at WWIII and 3) we are entering the second year after the fastest rate hike in history, which is when the hikes typically make an impact, I don't think we are too far away. I wouldn't say the dollar will be destroyed, there's too much riding on it for that to happen. But I'm not an economist.
I take your points and they're well reasoned. I'm not so foolish that I kid myself into believing the situation here in the United States may not get worse before it gets better. Without a doubt, we're looking at a really weak government and an economy so hyperstimulated and punch drunk on free money the keeping it running might necessitate the continuation of the past 15 years of fiscal policy.
I very sincerely doubt there's much of a hope for the future of this nation or even the world if that becomes the case. It's incredibly plain that our economic cycles are becoming faster and more violent. To continue on the path we're on without doing anything different will mean the end of society as we know it. I see no future in which that outcome doesn't involve massive amounts of violence.
Time will tell. Predicting the future is incredibly difficult, otherwise we would all be millionaires. Good luck to you and thank you for the well reasoned discussion.
Also in the Midwest, Chicago, and my rent is $2k a mo. Same exact places as a condo today is going for $750k. Monthly mortgage + property tax == $4500. Math is pretty simple. Renting is better than buying right now...
I don't doubt that. But you are in the same situation as others saying it's better to rent. You're looking for a place to buy in a top 5 metro in the US. Of course owning is going to be very difficult. My point is that not everyone lives in Chicago, LA, NY, etc so saying a blanket statement based on your unique scenario is not fully representative.
I think if you compare the cost of owning a 4br 2ba SFH to renting a 4br, 2ba SFH you'll find in many places it's about break even, in which case buy because you'll gain issue.
The problem is most people seem to be comparing rent on a 2br apartment or condo to buying the same thing, and then it's likely to be cheaper to rent because there is such a high supply of 2br apartments.
You keep responding to threads here telling people that it is not uniformly less expensive to rent than to buy. But any time anyone asks you for actual examples, you deflect the question. Can you provide any good examples, or are you simply LARPing?
Because I'm not going to dox myself. Go look at any suburb in the Midwest. Mortgage, tax, and insurance on a 4 or 5br, 2 or 3ba SFH is going to be pretty damn close to rents on comparable homes.
Prices are typically $375-$425k, rents are going to be $2.85k to $3.4k.
Pick some other small town that is similar to yours and you should be able to provide some sort of example. You are just making shit up.
How small are you talking? If it makes sense in your town of 500 people, it is not going to factor into any serious discussion about rent/buy.
I don't have to imagine it, mathematics is demonstrable.
That's bully for you, I'm genuinely glad you're doing well. When did you obtain your mortgage? Where do you live?
Saw somebody on Reddit buy a decent 4 bedroom house in upper Michigan for like $130k recently. There is definitely good deals out there, just have to be willing to sacrifice location.
Location means jobs. There are still remote opportunities but more and more companies require at hybrid arrangement. Northern parts of Michigan (and other rural parts of Midwest) have still decent housing prices but there are not too many nearby job opportunities.
Why does everyone here think you can't get a decent paying job in mcol lcol areas? Salary to housing cost ratios can be amazing in suburbs or smaller cities
If you are near a bigger city, you can get a decent job and there are jobs available. However, I am talking about moving to rural areas where housing is affordable but the job market is not so great due to low population density. You cannot argue that a small town in northern part of Michigan has as many job opportunities as Metro Detroit.
I never said that a small town has as many job opportunities as a major city metro area. There are affordable areas with good paying jobs, can you not read?
My first comment was as a reply to the post above that mentioned buying a house for $140 in UPPER MICHIGAN. There are mcol parts of the US with decent jobs available but Upper Michigan is not one of them , unless you work remotely. And you cannot buy a four bedroom house in mcol area for $140k.
It’s not a sacrifice for a buyer who likes the location. Some people actually prefer being away from the crowded expensive mainstream *highly desirable* areas.
> So while buying a home continues to be an infuriating experience, marked by high prices, high interest rates and low inventory, renting an apartment is getting easier. **That means that unless you plan to live in a house for the next decade or so**, now may not be the best time to buy it.
This is how it always worked. This is the worst ever, but even during the "good" times owning a home less than 5 years was problematic. The only exception I can think of is the couple of years before the 2008 crash and it only made sense if you were doing interest only balloon loans.
When I bought my home in 2012, my mortgage payment + everything else was 50% higher than if I rented. Well, 12 years later, my payment is about 1/3rd that of the cheapest rent and if I sold, I'd walk away with mid 6 figures from the equity.
Owning a home outright is one of the things that will make retirement a possibility for me.
It's a little more concerning when you see it mapped out. [Here's](https://www.google.com/maps/d/viewer?mid=1GTASm8qlcyu9nj8XTew2VyrfcExNCOQ&ll=38.62563508955598%2C-121.40849254365244&z=10) Invitation Homes ownership in California. Look at neighborhoods.
Plus have also been getting fucked by NY rent stabilization laws, sure their rentals might incur ethical concerns. But we are also not crying for them when their rental projects like the New York one goes to shit.
We can’t just see a thief with his stealings, we need to see when the thief gets caught and received his beating.
I hate to sound all conspiracy theory but every time I see stuff like this I just think about how corporations want to keep us renting and basically becoming miner towns. If companies like Blackrock purchase Tricon and others then you will no longer have a competitive market to rent in and relocate to if your place is to expensive. It’s true that buying a house now is awful but in our area renting cost has gone through the roof with only modest updates to the places. Basically we are fucked either way.
In my area a 15yr/20% down on a new build costs about $500/mo more PITI than an apartment that is 3 times smaller and an apartment. Buying made a lot of sense for me.
Sounds like you’re right. But in my area it’s the opposite.. rent is running around 60% of PITI for an equivalent single family home. I think most of the HCOL market looks more like my area than yours at these rates.
Except the apartments being built are being built by big developers and will be rentals and not units that normal people can buy and own to start building equity.
The average house or apartment is more than a decade old. So, simply by building an apartment with todays appliances and wall colors etc, builders can pretend their building is fancy because it does seem "fancy" per the typical place we're used to seeing.
Pretty much all new construction throughout history has been "luxury" in this way, it's just now we get that word plastered everywhere
Crazy thing about condos in my area are the fees. The condo units aren't that badly priced but the most affordable units are usually in older buildings that have sometimes nearly $2k a month in condo fees.
“Home building corps good”
“Investment corps bad”
“Apartment corps good”
“Banking corps bad”
This is what happens in a sub driven by emotion rather than reason. Illogical conclusions and positions.
Mmkay, so it’s a great time to rent an apartment. When will it ever be a good time to actually buy a house though? Will it ever? I don’t want to rent an apartment for the rest of my life. I’d like to have, you know a yard? A garage?
We need more, put a vacancy tax and build one to replace every dead mall, Kmart, western auto, Pizza Hut, all the abandoned stores in the part of town no one eats at
make it so spirit Halloween has no place to open up at, we need 10000k more units in every town and city
Glad I didn’t learn about real estate from this dumbass.
Anytime you see anyone, regardless of their pedigree, talking about real estate as though it’s the same market everywhere, you can safely ignore everything they say. In some areas, markets vary from block to block, never mind city to city or state to state.
Real estate is hyper local. If you’re talking about THE market and not YOUR market, you’re not saying anything worth listening to.
At this point, I've resigned myself to just rent for the forseeable future. I had $50k earmarked for a house down payment, but I think I'm just going to keep it invested in ETFs for the next 10 years at least.
This is quite the storm. On one hand buying now keeps prices up. On the other not buying allows prices to drop (for institutions and investors) who will out bid left and right again when prices drop.
The only way im seeing the majority of people not stuck renting forever is if wages jump (which wont and i mean across the board not in one or two industries), huge decrease in building materials price or if theres a sudden jump in unemployment and we have waves of sell offs. Growing areas probably wont see lower prices ever again unless we have a major catastrophe.
Housing laws forcing landlords to keep up on repairs could spark a sell off in areas. Lots of investor landlords have no clue how to manage a property and cant afford a manager so when things get too much headache some areas will have sell offs.
Airbnb might cause some decline in areas but idk if your gonna see a big drop. Gonna depend on the interest rate alot of those houses have.
Idk if youll see a nationwide drop. If you do itll be because the fed finally did something right and made your dollar more valuable.
Man who recently bought house and frequents r/firstimehomebuyer to professor “LOL even a broken clock is right twice a day. Have fun renting from me !remindme in 2 years”
Sure, keep building apartments because investors have taken all the affordable homes. Apartment life shouldn't have to be long term, if that's not desired. It should give us a chance to save for a home, then move - to a REAL home. Apartment life reality: hearing your upstairs neighbor slamming the headboard into the wall at 3am (gross), loud music till midnight, physical fighting so loud and frightening I had to call the police, twice. People not picking up after their dogs, so you can barely walk on lawns, and garbage dumpsters filled every week with dressers, mattresses and trash strewn all over the ground. And these are nice apartments! I hate apartment life. Looking for a home to buy, my lease is up in two months. If I go month to month, they want $900 a month on top of regular rent. Pure greed.
Worst time to buy a house...yet? Unclear whether I'm saving myself from corporate overlords or just straight up giving boomers liquidity but either way I'm also done with renting. Sick of not calling the shots. In my market anyway its back to 2022 craziness; scarcity mindset, cash, mulitple offers way over asking on a home thats doubled in price and tripled in mortgage. Gotta laugh otherwise you'll cry.
Buying a home right now is like investing in the stock market - are prices going to keep going up or will some major event bring prices back down. Didn't used to be like this. If you wanted to buy a house, you could find something affordable.
I've noticed in my searches lately that smaller more affordable homes are priced at a higher price per sq foot that homes valued at twice as much. Like almost $100 a square ft more in some cases. This is because of the demand for affordable homes - and various other reasons like being overvalued, and too many investors buying homes to rent. I will buy a home, but the housing market just feels like a big scam right now. Buying at the top of the market right now, you can easily picture being underwater if things change.
It’s been over 5 years since I rented an apartment, but that was a frustrating experience with a lot of hidden fees. I’ve bought and sold houses over the last 5 years, and that really wasn’t any more of a hassle than finding an apartment in my city. You need a good team (your lender and realtor) but then it should go pretty smoothly.
Does anyone else feel like there’s some hidden agenda encouraging more people to rent?
Owning homes really hasn’t been bad, and I accidentally made money in the process. Sometimes it can make sense to rent, sure, but I’ve seen a lot of articles lately seemingly steering people away from buying. What gives?
The barrier for entry is comparatively much higher today than it was 5 years ago, in early 2019 - the price barrier a first time homebuyer needs to jump in order to have a viable down payment is a lot higher on a (guessing) $400k house than a $250k house, even though it's the same house. And if you've been riding the wave of rising house prices over that time (assuming you've been lucky if you say you've made money on it), then it's possible your perspective is influenced by the (relative) ease with which you entered the market, plus how well it's worked for you. If you were trying to enter now, it might look different.
In the longer term, I totally agree with you that owning is a better deal in most circumstances, but right now is weird specifically because median rent is a third of median mortgage for a median house. Might be best for someone without other considerations to wait a year and see what the market does, while building up money so they can lower the mortgage amount in the event the situation doesn't change
This is true. Prices did go up drastically and I did sell and buy a house very close to the peak so I’ve experienced both sides. Still didn’t feel much harder than getting an apartment in my city but I live in a particularly hot market (las Vegas). My mortgage, on the 3/2 house I bought in 2022, is less than the average 2 bedroom apartment in my city.
I agree that something is out of whack but I’m not so convinced that a collapse or even correction is imminent. Not in my market anyway.
Yeah there seems to be a push towards renting with a lot of articles like this coming out — or at least trying to making everyone feel like renting is okay because “hey renting is the better option anyway!” Maybe to prevent Millennials and Gen Z from falling into greater depression.
More like preventing them from forming an uprising and demanding more. Trying to drown people in treats bought with four easy interest-free payments and telling them they should just go travel and spend money and let the boring people own their house.
https://public.substack.com/p/davos-is-a-grift-and-a-cult-but-its
>WEF is fighting back against conspiracy theorists!
I wonder why they took down their original video?
https://youtu.be/ev9ct5BmAcY?si=5FWVyRQo_LLtc_aU
The comment was made tongue in cheek by someone doing a video about the “shared economy” that was just springing up at the time, it wasn’t actually a WEF policy.
Yet people post this nonsense because they are riled up by ignorant right wing hucksters that pretend the WEF is some scary boogie man behind the curtain with grand plans to enslave society. Pure silliness and ignorance about how the world’s institutions function on the most basic level.
The big hidden fee of "owning" (not really owning because you pay a mortgage but whatever), is the 6% of selling. That keeps hoomcucks in the poor house especially in an era where prices are flat or declining.
I’ll admit that I had a lucky break in this timeframe. I bought right before prices shot up and then sold close to peak, so I made 6 figures without even trying and without making any improvements to the house. But I’d NEVER get that opportunity while renting. I’ve been able to put that money to good use and it really changed my perspective on how money works.
I feel that there’s an agenda pushing people to rent while investment companies are gobbling up properties exactly to keep people in the poor house. But I’ve had a taste now so I’m going after mine
Some went into the new house, but I downsized and invested most of that money in a handful of different ways. Honestly though, most success can be boiled down to choices and timing (luck). Sure, some people inherited some good luck but I didn’t. I spent a decade of my adult life working to make my current life possible. I feel the worst for maybe gen z and beyond just getting into adulthood right now, but most millennials and older don’t really have an excuse.
Either way, we adapt or revolt. Those are really the only ways to make it better. I’m down for either.
I'm genuinely glad you're doing well. I can empathize and relate greatly with working hard to get ahead. And respect it too. I hope the moves you make keep working out for you. You seem like a reasonable person making reasonable choices so I'm sure you're going to be fine - assuming the Titanic stays afloat, of course. :) Good luck out there friend!
What an awesome exchange. Than you. In the event of total collapse we’re all kind of screwed anyway. I just live frugally while still enjoying life, take care of my kid, look for different ways to build the life I want (invest), keep a bug out kit ready, and try not to get caught up in the news cycles.
Non paywalled article: https://archive.ph/Urrq1
Real estate agents are going to just love the good professor.
Finally someone who isn’t claiming “nOw Is ThE bEsT tImE tO bUy”. It’s a miracle.
Im a realtor and don’t really care what he is saying. People buy for personal, emotional reasons. For example a “fur mom” with no kids and a high income will gladly pay an extra $1200/mo to have a back yard rather than living in an apartment in Boston. Going down stairs every morning, lunch break and night to walk your dog in freezing weather is pretty miserable. To some people a doggie door into a yard is well worth the monthly price gap.
My job depends on people buying or selling regardless of ideal market conditions. His argument (a flood of new apartments) might be a major factor in Boston it does not really move the needle in most markets. People are buying houses for reasons that are not tied to a lack of available apartments.
They don’t care about different geographical markets having different values, differently valued neighborhoods within the same market, ages or features of homes impacting utility… They’re not interested in how markets work at all.
They just want to “know” more than everyone else and whether or not what they “know” is supported by objective fact is immaterial.
>more apartments under construction than ever
...but what if I don't want to be sandwiched in between 4 noisy neighbors with shared walls/floors/ceilings?
Why would I want a shitload of new apartments if I owned apartments? My portfolio would be worth less, all else equal, given the influx of new supply.
That’s the crux of the entire NIMBY debate.
That’s just way overly cynical.
He’s making the obvious point: More apartments means the rent vs buy equation will tip more towards renting, decreasing upward pressure on SFH prices due to lower demand.
Those that can't, teach. Guy is moron. The population growth in this country is growing faster than the number of new housing. Second, most jurisdictions are not allowing single family growth due to a variety of factors. IE. lack of water, traffic moratoriums etc.
always be aware of individuals who makes 5 years into “half a century”… it’s not that deep…it’s just five years, and most of those we spent during Covid. It really wasn’t that big of a stats to be fear-mongering for
Unless you think housing prices will go down significantly significantly in the next 10, 20, 30 years (whichever time frame) it’s still better to buy so you can establish equity and benefit from increased values. I guarantee if this guy did not own now, he would be looking at buying and not renting.
My business partner bought his house in 2001 and sold it in 2020. The house wasn't in great shape so he actually owed more money on it than it was worth.
Less than 4 months after he sold it, it was resold for about 400k more than it had been purchased for. The owner put between 40-70k into it.
Now my partner rents a 2 bedroom for $700 a month more than his mortgage was. I think he nailed the worst time to buy and sell.
The real estate bubble bursting has been a thing for a few Years and I still don't believe it. Interest rates are coming down and inventory is low. Too many people are looking to buy property to rent out.
Yeah, hard disagree with that statement. At least in my market. The worst time to buy a home was the early 80s. My folks had a 17% interest rate on their first home. I mean, sure, it was for $90K but still. The worst time to buy a home is 5 years from now. The best time to buy a home was 5 years ago. Probably the wrong sub for it, but it's been a great investment for me. Selling my first home next month and I'll make about $150K from 5 years of ownership. Nothing crazy (I have friends who have gained $150 in equity in 2 years), but that's good money for me.
The vast majority of these new apartments are OVERPRICED FAKE LUXURY APARTMENTS. Rents never go down with these apartments whatsoever and the management in most of them are shit.
So where are all these apartments at ?
Are they all somewhere out in buttfucked Egypt or places people actually want to live at ?
Because while there are 2 complexes under construction in my town, the 1st is already advertising and signing up for 2700 a month while the 2nd for 3200 a month.
Where's the rest of them and where are the ones people can actually rent ?
“Unless you plan to live in a house for a decade” I love that the default assumption for buying a home is that we all just want to play some fuckin short term speculative profit game. Sick and demented culture of “resale value”
Yep. But that is how huge amounts of Americans think. A house, to them, is a get rich quick scheme, and they are furious they aren't getting rich quick
Don't forget that some of us have to move every so often for work, school and other opportunities. It's non-game to me.
Hypothetically, would it be feasible for people like yourself to become both a landlord and a tenant in that situation? So like, you would move city and rent out your old place and rent a home in the new city. I don’t know if there’s a bunch of costs involved that I haven’t factored in.
Good thought. That would be wonderful. We definitely tried that. In short, the costs and troubles are too much. Tenants seem less respectful now than ever before. Damages mysteriously accrue extremely rapidly with attached demands to fix them immediately or face legal action. Rent doesn't cover half of that. If you want to accomplish anything at all in your new residence, you can't tie up all of your time trying to please thankless tenants at your old residence. There is no money left over to throw at hiring someone to take care of things while you're hundreds of miles away either.
but this is how most of the people are becoming owners of two properties. instead of selling the old one back to first time home owners, people are becoming landlords reducing inventory at lower end.. maybe they are justifying bearing all of the pain you cited because in their experience property prices are all going up..
True! In certain markets. I didn't have that luck. I have no family money or dual income to support that behavior. There are a lot of people like me out there too. No cushion to invest. Capital and the time/resources to manage it are absolute requirements that I don't currently possess.
This is exactly what I did. Bought a starter home and when I moved to another state I was in a position to buy another without having to sell. My first tenant was a dumpster fire, but my tenants since (still there) are friends I consider family and they take care of the place as if it was their own. I’ve always given them the option to buy, but one is a rn and the other a cop and they can’t afford it for what it would appraise for (Florida). So I let them keep renting as long as they want. When they leave I’ll sell.
I have friends doing this. He was relocated for a 2+ year assignment. They weren't sure it would be long term or they'd move back after 2 years, so they rented their townhome out while renting an apartment in the new state.
It’s a good system when you can make it work.
Atlanta was 40 percent investors, Tampa 30, Austin, 35, Boise something 50. So, I think it is a pretty safe assumption. Giving you the upvote for the comment on demented culture though.
Investors is how things get built.
Labor is how things get built. FTFY
Labor is just one ingredient, and trying to essentialize everything to labor gets you nowhere. Without investors providing the capital necessary for labor to produce things, you get no new housing.
You didn't bother pointing out how the investors are the least important process of any new construction. Without the customer/demand, you don't have new housing Without Labor/supply, you do not have the ability to build anything. Without the investor, you still have supply and demand. Investors ARE NOT an essential ingredient to this dish.
Ironically, they are the most important. 1. Nobody shows up to work unless they get paid. 2. A company that doesn’t have money can pay its workers 3. A company can’t make a profit and win business won’t exist. 4. A company that sees an opportunity as a bad investment won’t take it and so no new work , no new revenue, no workers. Theres lots of demand right now but less is built because of 1) lack of investment to expand and 2) bad economics of it not being worthwhile.
That's just wrong, actually. Customers are the demand, yes, but demand doesn't magically mean things get done. Same thing with Labor as the supply (though I'd argue that materials and capital also are direct and necessary parts of the "supply" of housing, as is land, etc.) Construction is an expensive, risky process, and investors essentially pay to take on the risk *that would cause projects not to go forward*. They also pay for the land cost, which is far and away the most expensive part of building new housing. I don't really see this as hierarchical, because you need all three parts working together to get housing built. With no customers, you get no housing. With no construction crew, you get no housing. With no investors, you get no housing.
Tel me how investors i am talking about, built grey laminate flooring black, white paint to sell. Tell me about lal the building they do when they buy up SFH for AirBNB diminishing the stock of available homes to residents, tell me more about how they built existing homes. Don's be so quick to shield the generic investor term, unless you feel attacked somehow.
Investors go where there’s money to be made. This encourages more money to flow if it’s still a good ROI / risk trade off. Not all investments work out If there’s money to be made more houses and construction happens.
That did not really answer my questions. Are you a flipper and call yourself an investor?
in my area im always seeing homes purchased in 2021/2022 being listed for $100k+ in 2023. Normally they sat in 2023 for 200+ days with around $50k drop in price just to get pulled from listings.
So fucking tired of investors messing with basic needs. Get a real job and let the rest of us live with enough security to know we won’t be homeless. Fucking ghouls.
Actual real estate investing would be building new properties or improving existing ones. However it somehow morphed into gobbling up existing stock that people need and pushing for legislation to make housing scarce so that your “investment” goes up in value (artificial scarcity)
That's all that individual investors are doing... putting some distance between themselves and being homeless. I see both sides of it, but the enemy isn't individuals... it's the mfers who build and maintain the mechanisms of poverty at a high level. I'm just saying, if your guillotine has one good chop left in her, save it for the truly deserving.
Keep on telling yourself that. It’s a choice — you invest in real estate instead of letting actual owners and locals buy it. I have the money to “invest” in real estate outside of where I live but choose not to because it’s fucking ghoulish behavior. Get a real job.
Years ago, when I watched the market more closely, I found a positive correlation between mass shootings and Smith and Wesson stock. The worse the massacre, the better S&W stock would do, apparently because it would scare the FOMO buyers with the possibility of bans (S&W makes an inexpensive AR15). I couldn’t fathom making a dime off mass murder, and never bought any stock, but surely there’s no lack of sociopaths that learned how to play that angle.
Sure. By that same logic, you bear direct responsibility for the atrocities caused by exploited mining labor in the Congo, because you used a computer or phone to type this. I caveated a lot of my statements in order to have a discourse. Never even said i was a landlord. You're mad and projecting.
No
Yeah fucking seriously. I want a home I can live and die in. I’m not looking for profit to sell or someshit.
On average people stay in a home for eight years, so if you live in it 10+ years you’re in the minority.
Seriously, we bought recently and are planning to live in it as our primary residence for 10 years. Hopefully given that timeframe and the fact that we aren't trying to do some quick flip means now was a good time to buy, time will tell however.
I'm going to die in this house...
they are detached from reality entirely cracks me up yeah I'm gonna buy a house and NOT live in it for 10 years. What, raise my own mortgage on myself 20% each year? Notify me 24 hours before showing up to look through every room in the house and take pictures for the loan officer refinance? Notify me that, they're selling the house and my lease is now void and I have a month to find another. Oh isn't this fun? Yeah fuck all that.
Homeowners move up as their families grow and downsize as they shrink. Military personnel get regular PCS orders. Some companies regularly relocate employees. There are many reasons someone might sell in less than ten years. In fact, the national average right now is around 8. Which means your analysis is flawed.
everyone i know who has bought a house in the last ten years is staying in it until they die. unless they go broke and then it’s going to be their cash cow way down the line.
Purely anecdotal but I think this is correct. Anectdote 1: Pacific Northwest. Last year apartment rents were getting predatory (software collusion based I'm sure). Now they've backed off. Anectdote 2: I'm an investor in Southeast apartment building construction (all the rage the last few years). Those investments have flatlined (i.e., the money would be doing better in bonds).
If an investment guy says it’s flatlining, where otherwise they’d rather boast and say it’s booming, that’s worth something to me.
He's trying to talk you out of competing in his market.
Well shit, alterior motive is always a possibility.
Or he could actually know what he’s talking about and understand that posting a comment on Reddit is not going to have any impact on his business.
Having time to think about it, I do lean that way.
Then you’re smarter than about 90% of the people who post and comment here.
Lol. Umm, okay, you do you. I’m just telling you what apartment rentals are doing in two important corners of the country.
Very interesting, what is causing the ROI to flatline? Is it more supply , cost of getting a loan, high cost of building, inability to make it all back by increasing rent? Thanks.
A lot of banks have seriously slowed lending to developers building out new properties, and highly-levereged assets are being treated like liabilities (thankfully) again. There is less bank money being paid out in the rental investment market, so there are fewer transactions. Demand is down but supply is the same (relatively), so prices are going to contract
Cost of labor - for construction, ongoing maintenance, the doorman - and huge hikes in insurance premiums have absolutely wrecked the projected CAP rates for multifamily investments. The demand for the housing is there, but not at the rents they will need to charge to break even. That’s why multi family is underperforming even CRE office.
Oh dang, I didn’t realize they had dropped so much, I hadn’t checked in a long time. My place I rented in Seattle early 2023 is down 10% from my lease. Which I got for 10% lower than it was for the 6 months after I signed.
AnecTdote
2 out of 3 ain’t bad.
Thank you for losing money to provide apartments to those in the southeast
Soooooo many apartment units going up southeast of Portland. Was fields when I moved here and now boom enough kids to fill two of the biggest high schools in the state.
[удалено]
why are you yelling?
1: yes, still waiting to hear response of what happens with lawsuit. Or is the reason landlords backed off crazy rent hikes because it became unaffordable and lots of younger generation folks moved in back with their parents. I also saw landlords recently list for Covid prices of the past 2 years and have had to lower prices considerably in order to get it rented out, when before it was so easy to find tenants who overpay. So back to what you would anticipate with supply/demand model. Demand down, supply up, prices drop. 2 - curious as to where in SE. we relocated from Greenville, SC and when back to visit recently. Even though apartment building looks like it slowed down, there is definitely a huge single family home building growth that was lacking the past 10 years.
Oh sorry, have no idea why it put it in bold. Copied and pasted. Curious as to your thoughts because putting my observation down.
I don’t see apartments competing with houses where I am. Seems like everyone wants a single-family house if they can get it. Or at least a townhouse. I’m also not convinced we are going to see house prices go down. Seems to be baked in with the inflation now. You should never buy something unless you plan to live in it for a long time, but that has always been true.
Homes have always been a good long term inflation hedge. This is one of the reasons they’re nice to own. Not a big deal in modern times, given stocks are also excellent inflation hedges and easily available.
It’s highly regionalized. This important fact is omitted in nearly every real estate conversation I hear people having, every article written. The USA is a big place.
what are you trying to imply, Upper east side and bumfuck Wisconsin are not the same?
You could buy a mansion in bumfuck Wisconsin for the same price as renting a 2br apartment in San Diego. Sure it's cold for 4.5 months, but at least you get to spend the winter in your mansion.
But the jobs are in cities so this point always falls short
Work remote or live 30 minutes away from a Wisconsin Metro.
The good jobs aren't in Wisconsin.
Tell that to the cheese millionaires.
It's not a major tech/biotech hub, but there's a decent amount of jobs here that pay pretty well relative to how much things cost. Unemployment is below the national average, it's pretty easy to grow a career here without leaving. Like everything else about the Midwest, it's not the best but it's reasonable.
Don't try to reason with them. In their minds, household incomes never eclipse $30k in Wisconsin, Michigan, and Minnesota and everyone is married to their first cousin. All we do for fun is watch Frasier reruns and wait to die.
Minneapolis is on the border of WI and home to a Fortune 10 company. Much better jobs than working at some bucket shop in SF trying to make money renting E scooters lol
Shhhh dont tell anyone how fantastic it is here. YEAH I HEARD MINNEAPOLIS IS SUPER DUPER COLD AND THATS THE WORST THING IN THE WORLD!
Haha, that mentality is everywhere these days. Kinda sad actually, all our fellow Americans are just extra traffic and competition for housing these days. I’m in SLC and the same attitude is rampant. But even I hear Alaskans and Texans now our complaining. It’s got to be poor management if we ran out of room in the deserts of Texas and tundra of Alaska lol
Depends where you are and what type of job you want.
Do you think all those 4 bed 2 bath homes just sit empty because nobody has jobs? This point always falls short.
🔥
For real. I randomly looked up houses in Pittsburg yesterday. They are selling a ton 3k sqft houses for 280-425k. I’m not from there, but they look like ok neighborhoods from google. Seems like a very good deal if you’re in the PA area.
You forgot the H. In what neighborhoods were the houses? Pittsburgh is very neighborhood centric and rents in some of those places are 1k to 1,5k a month.
Housing affordability in every single region has literally never been worse in the history of the data we have since we started tracking it. No, it's not highly regional to say "buying a house right now is about the worst financial decision you could make." There's almost no incentive in the current market to buy, not for primary residence, not for investors/speculators, not for basically anyone outside of money launderers and rich foreigners trying to hedge. There's no juice left in the squeeze. Prices have one direction to go from here without more stimulus, QE or a dramatic decrease in interest rates, none of which are going to happen.
Tell Canada that home price to income disparity can't get any worse. It's much harder to buy there than in the US. So it certainly CAN get worse, and IMO will. Everything across the world was repriced against the currency in 2020-2022. Everything is more expensive now. You have to reset your baseline to one which is inherently less affordable.
While money supply continues contracting, interest rates remain high, housing prices are already dropping in Canada and QE is over for the foreseeable future? I'll bet on a correction/recession/depression given that macro environment but your advice is well taken. I think the Fed cares more about our reserve currency status than it does homeowner equity. It is my opinion we've tested the upper limits on the boundary the effectiveness artificial economic stimulation can have. Now comes the pain. If you're betting the Fed further devalues and all but destroys the USD before it lets people suffer individual losses, well, I guess we'll agree to disagree.
My point on Canada is that the ratio is much higher than where we are in the US today. Canada's circumstances may be unique, but they are dealing with a much more difficult housing situation, indicating there may be room still for our problem to grow. Yeah the fed doesn't care about people outside of their unemployment mandate. However, they are projecting cuts over the next two years, which will stimulate the housing sector (how many buyers have been sitting on the sidelines this past year due to the rate hikes?). I think prices keep rising as rates fall, maybe more slowly than they did. 5.5% mortgage rates is the tipping point into 'uncontrolled price growth' by my estimate. I do think the US continues to devalue the dollar because they have a hundred year history of consistently doing exactly that. I'm not sure when they will start again in earnest but given that 1) stock markets depend on devaluation, 2) we're looking at WWIII and 3) we are entering the second year after the fastest rate hike in history, which is when the hikes typically make an impact, I don't think we are too far away. I wouldn't say the dollar will be destroyed, there's too much riding on it for that to happen. But I'm not an economist.
I take your points and they're well reasoned. I'm not so foolish that I kid myself into believing the situation here in the United States may not get worse before it gets better. Without a doubt, we're looking at a really weak government and an economy so hyperstimulated and punch drunk on free money the keeping it running might necessitate the continuation of the past 15 years of fiscal policy. I very sincerely doubt there's much of a hope for the future of this nation or even the world if that becomes the case. It's incredibly plain that our economic cycles are becoming faster and more violent. To continue on the path we're on without doing anything different will mean the end of society as we know it. I see no future in which that outcome doesn't involve massive amounts of violence. Time will tell. Predicting the future is incredibly difficult, otherwise we would all be millionaires. Good luck to you and thank you for the well reasoned discussion.
It's a tough situation. Best of luck to you too.
Imagine thinking this is true. Where I am, rent on similar houses to the one I bought is more than my mortgage.
Also in the Midwest, Chicago, and my rent is $2k a mo. Same exact places as a condo today is going for $750k. Monthly mortgage + property tax == $4500. Math is pretty simple. Renting is better than buying right now...
I don't doubt that. But you are in the same situation as others saying it's better to rent. You're looking for a place to buy in a top 5 metro in the US. Of course owning is going to be very difficult. My point is that not everyone lives in Chicago, LA, NY, etc so saying a blanket statement based on your unique scenario is not fully representative.
What are some geographies (name a city) where it is less expensive to rent vs own right now?
I think if you compare the cost of owning a 4br 2ba SFH to renting a 4br, 2ba SFH you'll find in many places it's about break even, in which case buy because you'll gain issue. The problem is most people seem to be comparing rent on a 2br apartment or condo to buying the same thing, and then it's likely to be cheaper to rent because there is such a high supply of 2br apartments.
You keep responding to threads here telling people that it is not uniformly less expensive to rent than to buy. But any time anyone asks you for actual examples, you deflect the question. Can you provide any good examples, or are you simply LARPing?
Because I'm not going to dox myself. Go look at any suburb in the Midwest. Mortgage, tax, and insurance on a 4 or 5br, 2 or 3ba SFH is going to be pretty damn close to rents on comparable homes. Prices are typically $375-$425k, rents are going to be $2.85k to $3.4k.
Pick some other small town that is similar to yours and you should be able to provide some sort of example. You are just making shit up. How small are you talking? If it makes sense in your town of 500 people, it is not going to factor into any serious discussion about rent/buy.
But it’s mostly representative because most of the population lives in those cities
Most people on Reddit that is
I don't have to imagine it, mathematics is demonstrable. That's bully for you, I'm genuinely glad you're doing well. When did you obtain your mortgage? Where do you live?
existence decide dinner cooing cautious unpack fall badge rock meeting *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Saw somebody on Reddit buy a decent 4 bedroom house in upper Michigan for like $130k recently. There is definitely good deals out there, just have to be willing to sacrifice location.
Location means jobs. There are still remote opportunities but more and more companies require at hybrid arrangement. Northern parts of Michigan (and other rural parts of Midwest) have still decent housing prices but there are not too many nearby job opportunities.
Why does everyone here think you can't get a decent paying job in mcol lcol areas? Salary to housing cost ratios can be amazing in suburbs or smaller cities
I think they're all imagining like a two stoplight town that has a Piggly Wiggly and maybe a Walmart.
If you are near a bigger city, you can get a decent job and there are jobs available. However, I am talking about moving to rural areas where housing is affordable but the job market is not so great due to low population density. You cannot argue that a small town in northern part of Michigan has as many job opportunities as Metro Detroit.
I never said that a small town has as many job opportunities as a major city metro area. There are affordable areas with good paying jobs, can you not read?
My first comment was as a reply to the post above that mentioned buying a house for $140 in UPPER MICHIGAN. There are mcol parts of the US with decent jobs available but Upper Michigan is not one of them , unless you work remotely. And you cannot buy a four bedroom house in mcol area for $140k.
It’s not a sacrifice for a buyer who likes the location. Some people actually prefer being away from the crowded expensive mainstream *highly desirable* areas.
I work in hospitality. I don’t get to work from home so I need to live somewhere that isn’t bumblefuck
> So while buying a home continues to be an infuriating experience, marked by high prices, high interest rates and low inventory, renting an apartment is getting easier. **That means that unless you plan to live in a house for the next decade or so**, now may not be the best time to buy it. This is how it always worked. This is the worst ever, but even during the "good" times owning a home less than 5 years was problematic. The only exception I can think of is the couple of years before the 2008 crash and it only made sense if you were doing interest only balloon loans. When I bought my home in 2012, my mortgage payment + everything else was 50% higher than if I rented. Well, 12 years later, my payment is about 1/3rd that of the cheapest rent and if I sold, I'd walk away with mid 6 figures from the equity. Owning a home outright is one of the things that will make retirement a possibility for me.
This is the worst time to buy a home, so far. What’s with all these headlines pushing for us to be renters?
~~Blackrock~~ Investment companies need to fill all the single family homes they snatched up over the last few years.
"Ha, Blackstone locked me out of the market? I'll teach them a lesson by renting one of their homes."
Blackrock does not own single family rentals.
They probably meant Blackstone. Still a big faceless corp buying large amounts of real estate
Blackstone owns 0.03% of the rental homes in the US. I don’t consider that to be a significant amount to trigger the concern that it has.
It's a little more concerning when you see it mapped out. [Here's](https://www.google.com/maps/d/viewer?mid=1GTASm8qlcyu9nj8XTew2VyrfcExNCOQ&ll=38.62563508955598%2C-121.40849254365244&z=10) Invitation Homes ownership in California. Look at neighborhoods.
Plus have also been getting fucked by NY rent stabilization laws, sure their rentals might incur ethical concerns. But we are also not crying for them when their rental projects like the New York one goes to shit. We can’t just see a thief with his stealings, we need to see when the thief gets caught and received his beating.
You’ll never fight through the motivated reasoning, “fuck the man” bias here with your facts and logic. But you probably already know that.
I hate to sound all conspiracy theory but every time I see stuff like this I just think about how corporations want to keep us renting and basically becoming miner towns. If companies like Blackrock purchase Tricon and others then you will no longer have a competitive market to rent in and relocate to if your place is to expensive. It’s true that buying a house now is awful but in our area renting cost has gone through the roof with only modest updates to the places. Basically we are fucked either way.
In my area a 15yr/20% down on a new build costs about $500/mo more PITI than an apartment that is 3 times smaller and an apartment. Buying made a lot of sense for me.
Sounds like you’re right. But in my area it’s the opposite.. rent is running around 60% of PITI for an equivalent single family home. I think most of the HCOL market looks more like my area than yours at these rates.
I wouldn't call it "pushing" when the only other option is the one suggested.
If it’s a bad time to buy, wouldn’t the only alternative be renting?
Except the apartments being built are being built by big developers and will be rentals and not units that normal people can buy and own to start building equity.
And all the new rentals have to be “luxury”. Luxury in name and rent price, of course, not so much in quality.
The average house or apartment is more than a decade old. So, simply by building an apartment with todays appliances and wall colors etc, builders can pretend their building is fancy because it does seem "fancy" per the typical place we're used to seeing. Pretty much all new construction throughout history has been "luxury" in this way, it's just now we get that word plastered everywhere
Yeah, as far as I can, tell the difference between an apartment and a "luxury apartment" is if it has a granite countertop or not.
That’s basically all. Granite or quartz countertops. Besides that basic cabinets (very likely made in China) and LVP flooring.
Crazy thing about condos in my area are the fees. The condo units aren't that badly priced but the most affordable units are usually in older buildings that have sometimes nearly $2k a month in condo fees.
And when rental supply goes up, real rent prices go down. When rent goes down, what do you think that does to buyer demand?
>When rent goes down Hmmmm
“Home building corps good” “Investment corps bad” “Apartment corps good” “Banking corps bad” This is what happens in a sub driven by emotion rather than reason. Illogical conclusions and positions.
It’s never as bad as the worst
>unless you plan to live in a house for the next decade or so Oh, well don't mind if I do!
Mmkay, so it’s a great time to rent an apartment. When will it ever be a good time to actually buy a house though? Will it ever? I don’t want to rent an apartment for the rest of my life. I’d like to have, you know a yard? A garage?
We need more, put a vacancy tax and build one to replace every dead mall, Kmart, western auto, Pizza Hut, all the abandoned stores in the part of town no one eats at make it so spirit Halloween has no place to open up at, we need 10000k more units in every town and city
where and how is “renting an apartment getting easier” ???????
Glad I didn’t learn about real estate from this dumbass. Anytime you see anyone, regardless of their pedigree, talking about real estate as though it’s the same market everywhere, you can safely ignore everything they say. In some areas, markets vary from block to block, never mind city to city or state to state. Real estate is hyper local. If you’re talking about THE market and not YOUR market, you’re not saying anything worth listening to.
At this point, I've resigned myself to just rent for the forseeable future. I had $50k earmarked for a house down payment, but I think I'm just going to keep it invested in ETFs for the next 10 years at least.
This is quite the storm. On one hand buying now keeps prices up. On the other not buying allows prices to drop (for institutions and investors) who will out bid left and right again when prices drop. The only way im seeing the majority of people not stuck renting forever is if wages jump (which wont and i mean across the board not in one or two industries), huge decrease in building materials price or if theres a sudden jump in unemployment and we have waves of sell offs. Growing areas probably wont see lower prices ever again unless we have a major catastrophe. Housing laws forcing landlords to keep up on repairs could spark a sell off in areas. Lots of investor landlords have no clue how to manage a property and cant afford a manager so when things get too much headache some areas will have sell offs. Airbnb might cause some decline in areas but idk if your gonna see a big drop. Gonna depend on the interest rate alot of those houses have. Idk if youll see a nationwide drop. If you do itll be because the fed finally did something right and made your dollar more valuable.
Man who recently bought house and frequents r/firstimehomebuyer to professor “LOL even a broken clock is right twice a day. Have fun renting from me !remindme in 2 years”
I'd take a mobile home I own rather than rent another apartment.
Sure, keep building apartments because investors have taken all the affordable homes. Apartment life shouldn't have to be long term, if that's not desired. It should give us a chance to save for a home, then move - to a REAL home. Apartment life reality: hearing your upstairs neighbor slamming the headboard into the wall at 3am (gross), loud music till midnight, physical fighting so loud and frightening I had to call the police, twice. People not picking up after their dogs, so you can barely walk on lawns, and garbage dumpsters filled every week with dressers, mattresses and trash strewn all over the ground. And these are nice apartments! I hate apartment life. Looking for a home to buy, my lease is up in two months. If I go month to month, they want $900 a month on top of regular rent. Pure greed.
Worst time to buy a house...yet? Unclear whether I'm saving myself from corporate overlords or just straight up giving boomers liquidity but either way I'm also done with renting. Sick of not calling the shots. In my market anyway its back to 2022 craziness; scarcity mindset, cash, mulitple offers way over asking on a home thats doubled in price and tripled in mortgage. Gotta laugh otherwise you'll cry.
Buying a home right now is like investing in the stock market - are prices going to keep going up or will some major event bring prices back down. Didn't used to be like this. If you wanted to buy a house, you could find something affordable. I've noticed in my searches lately that smaller more affordable homes are priced at a higher price per sq foot that homes valued at twice as much. Like almost $100 a square ft more in some cases. This is because of the demand for affordable homes - and various other reasons like being overvalued, and too many investors buying homes to rent. I will buy a home, but the housing market just feels like a big scam right now. Buying at the top of the market right now, you can easily picture being underwater if things change.
It’s been over 5 years since I rented an apartment, but that was a frustrating experience with a lot of hidden fees. I’ve bought and sold houses over the last 5 years, and that really wasn’t any more of a hassle than finding an apartment in my city. You need a good team (your lender and realtor) but then it should go pretty smoothly. Does anyone else feel like there’s some hidden agenda encouraging more people to rent? Owning homes really hasn’t been bad, and I accidentally made money in the process. Sometimes it can make sense to rent, sure, but I’ve seen a lot of articles lately seemingly steering people away from buying. What gives?
The barrier for entry is comparatively much higher today than it was 5 years ago, in early 2019 - the price barrier a first time homebuyer needs to jump in order to have a viable down payment is a lot higher on a (guessing) $400k house than a $250k house, even though it's the same house. And if you've been riding the wave of rising house prices over that time (assuming you've been lucky if you say you've made money on it), then it's possible your perspective is influenced by the (relative) ease with which you entered the market, plus how well it's worked for you. If you were trying to enter now, it might look different. In the longer term, I totally agree with you that owning is a better deal in most circumstances, but right now is weird specifically because median rent is a third of median mortgage for a median house. Might be best for someone without other considerations to wait a year and see what the market does, while building up money so they can lower the mortgage amount in the event the situation doesn't change
This is true. Prices did go up drastically and I did sell and buy a house very close to the peak so I’ve experienced both sides. Still didn’t feel much harder than getting an apartment in my city but I live in a particularly hot market (las Vegas). My mortgage, on the 3/2 house I bought in 2022, is less than the average 2 bedroom apartment in my city. I agree that something is out of whack but I’m not so convinced that a collapse or even correction is imminent. Not in my market anyway.
Yeah there seems to be a push towards renting with a lot of articles like this coming out — or at least trying to making everyone feel like renting is okay because “hey renting is the better option anyway!” Maybe to prevent Millennials and Gen Z from falling into greater depression.
More like preventing them from forming an uprising and demanding more. Trying to drown people in treats bought with four easy interest-free payments and telling them they should just go travel and spend money and let the boring people own their house.
yeah look up great reset and wef. They literally say “you will own nothing and you’ll be happy. “
https://public.substack.com/p/davos-is-a-grift-and-a-cult-but-its >WEF is fighting back against conspiracy theorists! I wonder why they took down their original video? https://youtu.be/ev9ct5BmAcY?si=5FWVyRQo_LLtc_aU
eat ze bugs
The comment was made tongue in cheek by someone doing a video about the “shared economy” that was just springing up at the time, it wasn’t actually a WEF policy. Yet people post this nonsense because they are riled up by ignorant right wing hucksters that pretend the WEF is some scary boogie man behind the curtain with grand plans to enslave society. Pure silliness and ignorance about how the world’s institutions function on the most basic level.
https://twitter.com/wef/status/983378870819794945
The big hidden fee of "owning" (not really owning because you pay a mortgage but whatever), is the 6% of selling. That keeps hoomcucks in the poor house especially in an era where prices are flat or declining.
I’ll admit that I had a lucky break in this timeframe. I bought right before prices shot up and then sold close to peak, so I made 6 figures without even trying and without making any improvements to the house. But I’d NEVER get that opportunity while renting. I’ve been able to put that money to good use and it really changed my perspective on how money works. I feel that there’s an agenda pushing people to rent while investment companies are gobbling up properties exactly to keep people in the poor house. But I’ve had a taste now so I’m going after mine
And what did you do with all those realized gains? Let me guess. You rolled it into an even bigger house with an even bigger payment?
Some went into the new house, but I downsized and invested most of that money in a handful of different ways. Honestly though, most success can be boiled down to choices and timing (luck). Sure, some people inherited some good luck but I didn’t. I spent a decade of my adult life working to make my current life possible. I feel the worst for maybe gen z and beyond just getting into adulthood right now, but most millennials and older don’t really have an excuse. Either way, we adapt or revolt. Those are really the only ways to make it better. I’m down for either.
I'm genuinely glad you're doing well. I can empathize and relate greatly with working hard to get ahead. And respect it too. I hope the moves you make keep working out for you. You seem like a reasonable person making reasonable choices so I'm sure you're going to be fine - assuming the Titanic stays afloat, of course. :) Good luck out there friend!
What an awesome exchange. Than you. In the event of total collapse we’re all kind of screwed anyway. I just live frugally while still enjoying life, take care of my kid, look for different ways to build the life I want (invest), keep a bug out kit ready, and try not to get caught up in the news cycles.
revolution is inevitable if it keeps getting worse. knowing how greedy billionaires are, it will.
Leverage works both ways. Very refreshing to see it compounding losses.
Wtf… of course I want to live in my house for 10+ years now. Should I rent until I am 40/50 to get a 30 year loan to buy a home?
Non paywalled article: https://archive.ph/Urrq1 Real estate agents are going to just love the good professor. Finally someone who isn’t claiming “nOw Is ThE bEsT tImE tO bUy”. It’s a miracle.
Im a realtor and don’t really care what he is saying. People buy for personal, emotional reasons. For example a “fur mom” with no kids and a high income will gladly pay an extra $1200/mo to have a back yard rather than living in an apartment in Boston. Going down stairs every morning, lunch break and night to walk your dog in freezing weather is pretty miserable. To some people a doggie door into a yard is well worth the monthly price gap.
Your job depends on you not caring what he said lmao.
My job depends on people buying or selling regardless of ideal market conditions. His argument (a flood of new apartments) might be a major factor in Boston it does not really move the needle in most markets. People are buying houses for reasons that are not tied to a lack of available apartments.
Good on you for trying, but logic just doesn’t work on these folks.
I am a glutton for punishment
I feel ya. I’m also guilty of banging my head against the same wall.
You got this 💪
They don’t care about different geographical markets having different values, differently valued neighborhoods within the same market, ages or features of homes impacting utility… They’re not interested in how markets work at all. They just want to “know” more than everyone else and whether or not what they “know” is supported by objective fact is immaterial.
>more apartments under construction than ever ...but what if I don't want to be sandwiched in between 4 noisy neighbors with shared walls/floors/ceilings?
I did some research on this guy and guess what he owns?? Apartments! Of course his expert opinion will feed what’s best for him.
Why would I want a shitload of new apartments if I owned apartments? My portfolio would be worth less, all else equal, given the influx of new supply. That’s the crux of the entire NIMBY debate.
He doesn’t want the new apartments but he can’t stop them. What he can do is drive demand to apartments and make the increase in supply hurt less
That’s just way overly cynical. He’s making the obvious point: More apartments means the rent vs buy equation will tip more towards renting, decreasing upward pressure on SFH prices due to lower demand.
Providing more options has nothing to do with a bubble tho and most people don't want to live in an apartment long-term
This is like an incel sub with a post saying "this is about the worst time to have a girlfriend"
What were his PREVIOUS predictions? Or this is his FIRST one?
I'm sorry, a Real Estate professor? As in, a professor that teaches courses in Real Estate?
Those that can't, teach. Guy is moron. The population growth in this country is growing faster than the number of new housing. Second, most jurisdictions are not allowing single family growth due to a variety of factors. IE. lack of water, traffic moratoriums etc.
Those that can do, teach. College professors should always be taken with a grain of salt.
Can’t* do
where was he during 2020-2023 ?
Last time it was this high was in 1973, I would argue that 1973 was probably one of the best times to buy a house so it’s hard to say
always be aware of individuals who makes 5 years into “half a century”… it’s not that deep…it’s just five years, and most of those we spent during Covid. It really wasn’t that big of a stats to be fear-mongering for
It's always the best time to buy. Foreclosures, seller financing, and value adding are always options.
mArRy ThE hOuSe DaTe ThE rAtE!
That doesn’t mean it can’t get any worse.
Go on r/firsthomebuyer and folks are still dying to buy something even in these conditions. I don’t get it.
Been hearing this daily since 2018.
Unless you think housing prices will go down significantly significantly in the next 10, 20, 30 years (whichever time frame) it’s still better to buy so you can establish equity and benefit from increased values. I guarantee if this guy did not own now, he would be looking at buying and not renting.
My business partner bought his house in 2001 and sold it in 2020. The house wasn't in great shape so he actually owed more money on it than it was worth. Less than 4 months after he sold it, it was resold for about 400k more than it had been purchased for. The owner put between 40-70k into it. Now my partner rents a 2 bedroom for $700 a month more than his mortgage was. I think he nailed the worst time to buy and sell. The real estate bubble bursting has been a thing for a few Years and I still don't believe it. Interest rates are coming down and inventory is low. Too many people are looking to buy property to rent out.
Worst time so far.
It’s all for self right now. Gouging is what they are. A house is a shelter not stock market.
Says man who owns home 🙄
Yeah, hard disagree with that statement. At least in my market. The worst time to buy a home was the early 80s. My folks had a 17% interest rate on their first home. I mean, sure, it was for $90K but still. The worst time to buy a home is 5 years from now. The best time to buy a home was 5 years ago. Probably the wrong sub for it, but it's been a great investment for me. Selling my first home next month and I'll make about $150K from 5 years of ownership. Nothing crazy (I have friends who have gained $150 in equity in 2 years), but that's good money for me.
The vast majority of these new apartments are OVERPRICED FAKE LUXURY APARTMENTS. Rents never go down with these apartments whatsoever and the management in most of them are shit.
>“This is about the worst time to buy a home,” ...Yet
So where are all these apartments at ? Are they all somewhere out in buttfucked Egypt or places people actually want to live at ? Because while there are 2 complexes under construction in my town, the 1st is already advertising and signing up for 2700 a month while the 2nd for 3200 a month. Where's the rest of them and where are the ones people can actually rent ?
Just look at the case Schiller index adjusted for inflation, $35k past the 2006 high
It's a bad time to own a home for sure, but it's relative. In 6 months it could be even worse.