True, but it also sets the market and every idiot with a heloc takes out additional cash thinking they have extra equity. Plus I've had a couple of friends that have used companies that allow you to make an all cash bid, when in fact financing has already been agreed to behind the scenes. Just makes your bid stand out. My guess is the property will have a mortgage within days of closing.
this thread demonstrates that 1) the mortgage market is more misunderstood than the Montana DEA draws 2) when people don’t understand something they just make stuff up.
And what LTV will that mortgage have? 90%? 80%? 50%?
In our section/ a lot of Boston it's the opposite, which has been a head scratcher for me.
Out of curiosity, what are property taxes like in your neighborhood and Beacon Hill? It's still kind of crazy to me that my mortgage payment (PITI) here in TN is roughly equal to my mortgage payment in FL despite my mortgage balance here being 60%+ higher and having a higher interest rate. It's directly due to the high insurance and taxes in FL.
I'm sure nobody is hoping for that at least I hope not. It just didnt seems like there was much help to keep people in those houses like you mentioned there is this time around.
Prices will react slowly due to anchoring bias. I.e., The person sees the neighbor's house down the street go for $X00k six months ago and thinks they can sell at that too because their house is just as good or better. They don't consider that mortgage rates doubled. It will take some time for everything to reset. Nice houses will still go fast and maybe at a premium because there are still a lot of buyers on the sidelines. But you can see small evidence of changes in the market.
Totally agree. Dealing with that right now with a private seller that is getting there parents place ready to sell. I approached him and they replied yah it appraised for 500k. It won't be up for sale for a few more months. I didn't want to be the guy to say yah you had it appraised in December when rates were sub 3 now were knocking on the door of 6%. I told them I'd do 425 but nope. So now they'll probably list it for 500 sit on it for a while get 430 to 450 and end up with 425 after the realtor fees.
what are you gonna do. I agree nice houses will still go fast but I feel like slowly but surely the sellers who are stubborn because they won't dare take a penny less than there neighbor sold for during covid rates will help build back a little inventory.Complicated question, so the answer is it depends. Maybe if the older home was closer to urban center, house was probably smaller so the buyer was getting starter home. The larger problem today is that older Americans stay in their homes longer. Today's "middle class" isn't as big as the middle class in 70's and 80's. So there is a demographic mismatch. An area can outrun or hide this mismatch for a while, but if school districts decline and house characteristics can't keep pace (tear down and rebuild) then the area becomes out of favor.
Denver... 08' didn't have much of an effect on the marketTotally agree. Dealing with that right now with a private seller that is getting there parents place ready to sell. I approached him and they replied yah it appraised for 500k. It won't be up for sale for a few more months. I didn't want to be the guy to say yah you had it appraised in December when rates were sub 3 now were knocking on the door of 6%. I told them I'd do 425 but nope. So now they'll probably list it for 500 sit on it for a while get 430 to 450 and end up with 425 after the realtor fees.
www.wsj.com
i keep wondering if there is going to be a flood of new construction sitting empty due to bailed buyers.
but, everyone still seems to be flush with cash and remain employed.... for now.
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They Signed Contracts for Their Dream Homes Last Year. Now Their Borrowing Costs Are Ballooning.
People who agreed to buy homes under construction but haven’t yet closed are facing mortgage-interest rates that could be nearly double what they anticipated.
The scale of your chart is deceiving the drop. Denver market still fell considerably in GFC. The recent rise just makes the whole thing look minor.
$29,000 invested in S&P500 index fund in 1976 (the first index fund coincidentally) would be worth over $4,000,000. A good reminder not to focus too much on paying off houses (provided you have a decent fixed-rate mortgage) - historically your money is worth more in the market.
Come to MN and pay 2x of that. It's good to see not all of our MN taxes are in 2nd place behind Mass. - it feels good to be no. 1 sometimes
The math always makes it look great and I’m a nerd, wouldn’t argue with anyone going this route assuming the rest of your finances are in order. Paying off the house early isn’t solely a goal to achieve the highest return possible for me. It’s something my wife and I agreed to shoot for as more of a feeling for security in a world that seems more bat s*** crazy every day.
Peak in Denver pre crisis was 06' it dropped ~10% to a low in 09'
