Real estate really has gotten out of hand. My experience

[TugOfPeace]

Was in Dallas the past couple weeks. To give some context, my parents bought a new construction home for $400k in 2021. Today that home would sell for $700k.

I was looking to buy an investment property and browsed around the various neighborhoods, and new construction homes are a MINIMUM of $800k now.

Even in some small town 20 miles north, new construction homes start at $400k.

What was most shocking to me was a family friend's ordeal - they bought a home near/in DC in 2012 for $500k, and sold it in 2022 for $900k. They then used that equity/profit to buy a new $2M home.

Unreal.

Is the price appreciation generally like this in the entire country? I could comfortably afford to buy, but it seems like a ripoff for what some of these homes offer. Especially when considering Dallas, there is literally nothing here so I don't even know why people are paying so much. In places like Chicago and St. Louis it isn't that bad.

Even though interest rates are high now and home prices seemed to have softened, not quite sure what happens towards the end of the year when rates fall by 75 basis points. That's not a huge number but it would put mortgage rates at around 5.75% which is not much higher than what they were in the 2010s.

[401Delta]

You sound like an entitled kunt.

Srs.

It isn't written anywhere that you deserve a brand new home with numerous amenities just because.

****kin' kids these days. You're nothing but punks. In my day this was all we needed.

*holds up fists*

[OliverHeldens]

Lol, imagine thinking these prices are sustainable.

[Swiftology]

da fuq is real estate?



Then what tf is fake estate?

[401Delta]

da fuq is real estate?



Then what tf is fake estate?

Bitcorn.

[r32gojirra]

Incorrect

See below

[4g64fiero]

Lol, imagine thinking these prices are sustainable.

Bro, america still has the cheapest housing of any 1st world country when comparing income vs home cost.

It can get way worse and it looks like elites are following the blueprint laid out in other countries. We don't have a capitalistic economy, we have an aristocracy that manipulates markets masquerading as capitalism.

Good luck!

[TugOfPeace]

Bro, america still has the cheapest housing of any 1st world country when comparing income vs home cost.

It can get way worse and it looks like elites are following the blueprint laid out in other countries. We don't have a capitalistic economy, we have an aristocracy that manipulates markets masquerading as capitalism.

Good luck!

As housing prices outpace wage inflation, I have a feeling that landlords looking to rent out their properties will eventually be cashflow negative. Wages will not be able to keep up with rising rent costs that landlords need to charge in order to make their rentals profitable.

For example a $600k home with 25% down will require a rent payment of $3400/month. With utilities that could easily be $3700/month.

That would require someone to make $148,000/year.

Prepandemic that home would've likely cost $400k at a lower interest rate and might've rented out for $2k/month, which equates to a wage of $80,000/year.

Who would be able to afford these new rent prices?

Market would eventually reach an equilibrium point IMO and prices will either stabilize or decline.

[4g64fiero]

As housing prices outpace wage inflation, I have a feeling that landlords looking to rent out their properties will eventually be cashflow negative. Wages will not be able to keep up with rising rent costs that landlords need to charge in order to make their rentals profitable.

I don't think landlords will have an issue until people lose jobs. The landlords are already paying what they're always going to pay. Rent is already much lower than home values imply and the landlords are dealing with it.

[uneducated]

I am just loving how strident capitalists are suddenly seeing how the system is failing. Soon, even the GOP will acknowledge the need to build a welfare state and transition to a form of socialism.

[BiteTheHand]

only on the misc people claim to buy homes and in 3.5 years they have nearly doubled in value

LMAO

YEAH RIGHT

[SaltyDog920]

Incorrect

See below

Lol

[uneducated]

only on the misc people claim to buy homes and in 3.5 years they have nearly doubled in value

LMAO

YEAH RIGHT

Do you understand how crazy the economy has been? I nearly doubled my money in stocks this year.

[r32gojirra]

Do you understand how crazy the economy has been? I nearly doubled my money in stocks this year.

The AVERAGE rate of increase in house prices was mid-30’s percentage points just during COVID

There would have been a lot of properties that increased by less but many that increased more

Aggregate price increases of 100% in the 3.5 years period would not be impossible or even improbable

[TugOfPeace]

I don't think landlords will have an issue until people lose jobs. The landlords are already paying what they're always going to pay. Rent is already much lower than home values imply and the landlords are dealing with it.

I'm talking about new purchases within the past few years and afterwards.

People who were lucky enough to buy prior to the pandemic or at low interest rates will be able to be cash flow positive, but people trying to get in now, including the big fish like Blackrock, will have to charge lower rents than it takes to stay cashflow positive on their properties.

Not sure how they will handle that, but if you read my example above, homes literally went up 80-100% in terms of mortgage costs within the past few years, but wages didn't. If wages don't rise accordingly, nobody will be able to afford the rents these homes are requiring. At that point the landlords will have to take a hit.

[FAPhaggot]

Agreed with OP that the payment vs rent situation is untenable. Here in San Diego, it costs like 20%-30% more to make payments on a property than to rent out that property, which is totally azz backwards.

But we also live in a society where a 2 year bond pays higher rates than a 30 year bonds, so there's a lot of stuff that's backwards right now. Eventually that all will have to unkink.

RE bulls will say that rents will crash upwards to meet mortgage payment prices, but I don't know where the phukk that extra money would come from. Rentcels are tapped out, and wage suppression has pretty much been the government's prime directive for the past 40 years. Why do you think the Mexican border is wide open?

[Anachron]

Agreed with OP that the payment vs rent situation is untenable. Here in San Diego, it costs like 20%-30% more to make payments on a property than to rent out that property, which is totally azz backwards.

But we also live in a society where a 2 year bond pays higher rates than a 30 year bonds, so there's a lot of stuff that's backwards right now. Eventually that all will have to unkink.

RE bulls will say that rents will crash upwards to meet mortgage payment prices, but I don't know where the phukk that extra money would come from. Rentcels are tapped out, and wage suppression has pretty much been the government's prime directive for the past 40 years. Why do you think the Mexican border is wide open?

Such a succinct post with a lot of truths in it. Especially the bolded.

[HateLiberals]

It is sustainable and will never drop lower. Just will be normal to add more people per house (gross)

[LaCosaNostra90]

should see it in Canada. 700k can only get you a 1 bedroom condo

1.2 million for a 1970s unrenovated bungalow an hour outside the city

[TugOfPeace]

should see it in Canada. 700k can only get you a 1 bedroom condo

1.2 million for a 1970s unrenovated bungalow an hour outside the city

what led pricing to become like that in Canada? that sounds like an abnormal case, Destor is a Canadian miscer that bought a large home for 1M or so

[LaCosaNostra90]

what led pricing to become like that in Canada? that sounds like an abnormal case, Destor is a Canadian miscer that bought a large home for 1M or so

Unlimited amount of immigrants, zero housing supply and lots of big $$ being laundered. Mostly only relates to BC and Ontario

[frankdtank20]

Pretty similar conditions here in Wake County, NC. Most new single family homes have gotten ridiculous, which is why the suburbs of Raleigh have grown like mad while the city hasn't much. I've never understood why it's more expensive here than in Charlotte or Atlanta.

[elterrible987]

I am just loving how strident capitalists are suddenly seeing how the system is failing. Soon, even the GOP will acknowledge the need to build a welfare state and transition to a form of socialism.

wincel detected

[6gorillion]

who the fuk is paying for these bullchit prices on dog chit houses?

[FAPhaggot]

what led pricing to become like that in Canada? that sounds like an abnormal case, Destor is a Canadian miscer that bought a large home for 1M or so

Destor lives out on a frozen prairie in central Canada. The two places where everyone wants to live in Canada are Vancouver and a strip of land in the east that all sits south of Seattle. Places where you don't have a moose as your neighbor.

Real estate throughout that whole country is insane, but those two locations are insane squared.

[coast2coastam]

Bro, america still has the cheapest housing of any 1st world country when comparing income vs home cost.

It can get way worse and it looks like elites are following the blueprint laid out in other countries. We don't have a capitalistic economy, we have an aristocracy that manipulates markets masquerading as capitalism.

Good luck!

Check Spain and Italy, or do you guys not consider that the first world?

Was in Dallas the past couple weeks. To give some context, my parents bought a new construction home for $400k in 2021. Today that home would sell for $700k.

I was looking to buy an investment property and browsed around the various neighborhoods, and new construction homes are a MINIMUM of $800k now.

Even in some small town 20 miles north, new construction homes start at $400k.

What was most shocking to me was a family friend's ordeal - they bought a home near/in DC in 2012 for $500k, and sold it in 2022 for $900k. They then used that equity/profit to buy a new $2M home.

Unreal.

Is the price appreciation generally like this in the entire country? I could comfortably afford to buy, but it seems like a ripoff for what some of these homes offer. Especially when considering Dallas, there is literally nothing here so I don't even know why people are paying so much. In places like Chicago and St. Louis it isn't that bad.

Even though interest rates are high now and home prices seemed to have softened, not quite sure what happens towards the end of the year when rates fall by 75 basis points. That's not a huge number but it would put mortgage rates at around 5.75% which is not much higher than what they were in the 2010s.

I'm guessing they got in early in 2021, because that's when prices started taking off.

Here's a house I recently Airbnbed in Fort Myers. This wasn't in a good area, the house was built in the 60s, the walls were paper thin etc etc. Look at this:

Lol

There are also no good paying salaried jobs anywhere near this area. It's all services. How does this work long term?

[Basedbaby]

da fuq is real estate?



Then what tf is fake estate?

I’m investing in real and estate

[TugOfPeace]

Check Spain and Italy, or do you guys not consider that the first world?

I'm guessing they got in early in 2021, because that's when prices started taking off.

Here's a house I recently Airbnbed in Fort Myers. This wasn't in a good area, the house was built in the 60s, the walls were paper thin etc etc. Look at this:
Lol

There are also no good paying salaried jobs anywhere near this area. It's all services. How does this work long term?

That has to be the greatest percentage increase I've seen yet. Wtf!

If you stayed there through airbnb maybe that's the only way it would work. $400k mortgage is like $3k/month with taxes and utilities. If salaries in that area aren't at that level, nobody could really afford to live there.

Either that or a couple rents it out at $1500/each.

[j1rr]

I'm in a unique situation in Canada because I'm a rentcel and a homeowner.

Moved across the country and renting out my duplex, cash flow is still 1k per month.

Price on my house has doubled in 5 years.

I just happened to be looking at duplexes in Fort Worth last week, lots available for 400k USD which still seems fairly reasonable compared to Canada.

[Destor]

The US and Canada need to continue bringing in more and more people to deal with our aging populations, and the US is currently forecasted to exhaust its social security trust fund by the early 2030s

Buy a home now while you can, because outside of the craziest market swings they likely aren’t getting cheaper