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.
|
-
03-25-2024, 04:37 PM #1
Real estate really has gotten out of hand. My experience
Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
-
03-25-2024, 06:11 PM #2
-
03-25-2024, 06:13 PM #3
-
03-25-2024, 06:18 PM #4
-
-
03-25-2024, 06:19 PM #5
-
03-25-2024, 06:20 PM #6
- Join Date: Feb 2013
- Location: East Coast, Australia
- Posts: 20,589
- Rep Power: 397575
Incorrect
See below
By reading this post you acknowledge r32gojirra is an online persona and all posts by r32gojirra are satirical in nature. Comments by r32gojirra shall not reflect on the integrity and morals of the author portraying the online character nor any professional or contractual affiliates of the author.
AP4C
HTC
Repped by kimm into 200kcrew crew
-
03-25-2024, 06:20 PM #7
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!Jesus wasn't a pacifist
-
03-25-2024, 06:30 PM #8
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.Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
-
-
03-25-2024, 06:34 PM #9
-
03-25-2024, 06:38 PM #10
-
03-25-2024, 06:39 PM #11
-
03-25-2024, 06:40 PM #12
-
-
03-25-2024, 06:40 PM #13
-
03-25-2024, 06:59 PM #14
- Join Date: Feb 2013
- Location: East Coast, Australia
- Posts: 20,589
- Rep Power: 397575
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 improbableBy reading this post you acknowledge r32gojirra is an online persona and all posts by r32gojirra are satirical in nature. Comments by r32gojirra shall not reflect on the integrity and morals of the author portraying the online character nor any professional or contractual affiliates of the author.
AP4C
HTC
Repped by kimm into 200kcrew crew
-
03-25-2024, 07:48 PM #15
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.Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
-
03-25-2024, 08:04 PM #16
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?FA Crew
Always Pick 1 Crew
"Experience is something you get right after you need it."
-
-
03-25-2024, 08:07 PM #17
-
03-25-2024, 08:08 PM #18
-
03-25-2024, 08:09 PM #19
-
03-25-2024, 08:21 PM #20
-
-
03-25-2024, 08:24 PM #21
-
03-25-2024, 08:26 PM #22
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.
Light weight! Light weight baby!!!!
-
03-25-2024, 08:29 PM #23
-
03-25-2024, 08:30 PM #24
-
-
03-25-2024, 08:33 PM #25
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.FA Crew
Always Pick 1 Crew
"Experience is something you get right after you need it."
-
03-25-2024, 08:51 PM #26
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?Last edited by coast2coastam; 03-25-2024 at 08:57 PM.
-
03-25-2024, 08:58 PM #27
-
03-25-2024, 09:07 PM #28
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.Monster0ultra self proclaimed "Chad" face pic looks like vtech school shooter: https://i.imgur.com/z2m6Why.jpg
-
-
03-25-2024, 09:15 PM #29
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.
-
03-25-2024, 10:09 PM #30
- Join Date: Apr 2012
- Location: Alberta, Canada
- Age: 39
- Posts: 26,193
- Rep Power: 236269
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
Bookmarks