Listening to the radio on the way into work today, as of now 1 in 37 (weird metric??) home owners are severely underwater (25% or greater) on their mortgage due to homes dropping in value since the COVID peak.
That means there are still a lot of people underwater in general.
Happened to my Uncle in 08, lost everything.
Source - 930AM WBEN* Interview with Peter Hunt of Hunt Real Estate
Edit - Quick google search
I max out my 401k and usually put the rest in a taxable account, but I’ve been reducing the amount in taxable and contributing more to my HYSA, I’m ready to pick something up cheap hopefully in the next few years.
I can wait.
TLDR - People are going to start cutting the prices of their homes if they actually want to sell.
It’s gotta crash eventually because this just isn’t sustainable. I was talking to my neighbor a couple days ago and she was telling me her son and his fiance are looking for their first house in the Rochester suburbs. Found one listed at $299k, went to the open house and 90 people were signed up for the open house. Told their agent to bid up to $350k. House sold for $440k all cash.
I’ve been hearing this for at least a year now and yet it hasn’t happened. Demand is high and supply is low, interest rates be damned. Sure, parts of TX and FL are decreasing, but to my understanding that’s due to over supply.
Yeah, at least it’s not like it used to be though, where they’d qualify you for some stupid amount you could never afford. When we bought our first home my wife and I sat down and put all our income/expenses in Excel and figured out a mortgage amount we could afford. They qualified us for about 2.5x that number. It was laughable. Had we taken the full amount we’d have been just another one of many bankruptcies of that era.
when we applied for our first home they approved us for $450k… i lol’d and we spent $201k and made sure we had a basement unit for cashflow… that’s why we’re not poor.
I remember when I was still broke just out of college making shit money and some friends who were in healthcare right out of school were talking about what they were “qualified” for. It was laughable to think a single income of $60K could get back then. Though most were smart and didn’t go too crazy.
I ended up spending $75K on a duplex in 2007, best decision I ever made.
Every young person I talk to I tell them to go this route. Grab any multi family that you can. And Buffalo is a market where it’s possible to not only find them, but rent can meet / exceed the mortgage.
You may have to deal with living in an unglamorous area though and some are not ready for that.
Right… but do it for 5 years then take the money you banked to buy the house you really want where you want and now you can add another tenant. This is the one thing I wish my wife and I would have done. We’d still have likely ended up where we are now, but we’d have a rental property with 2 rental incomes that would be paid off by now and basically just printing money every month.
I do the exact same thing. If they’re hell bent on staying around here for the foreseeable future it’s a no brainer. I used to go back and talk to the upcoming graduates at Daemen and would have this discussion with them.
there is also a bunch of new fees being applied in FL to certain condos as well and insurance premiums are also increasing quite a bit so there ar a few catalysts for a serious downturn there.
i waslooking at a personal transaction with a Canadian seller who has a few condos near the ocean in New Smryna Beach and he said they felt the decline in prices already started over a year ago and that they expected it to continue for a while.
My friend has a condo in Ft Myers and his insurance has gone up a crazy amount in the past 2 years. His condo building lost a roof during the last hurricane but insurance wouldn’t even cover it so basically the condo association hasn’t had any major claims yet their rates still went up.
yeah i remember seeing a thread on Rolex Forums where a lot of dudes who didnt have a mortgage on thier FL properties didnt bother to pay for insurance because the premiums were more than the cost of repairs.
the insurance industry is crazy right now. many of the majors are pulling out of large state and provincial markets in Canada and the US.
the void is being filled by smaller, digital carriers that don’t have the claims depts to handle or manage the claims coming through… and in an economic downturn there is always more fraud.
