Is It Really As Hot As We’ve Been Led To Believe?
Barron’s reports on New York. “The prices for real estate are going up everywhere – but in high-end New York. According to a Brown Harris Stevens study, the average Manhattan apartment sales price declined by 2% in the fourth quarter of 2013, to $1,553,599, versus the same time last year. Inventory is about 20% below levels last year, suggesting prices should be tight. They aren’t. Hall Wilkie, president at Brown Harris Stevens, says that after a few years of increasing prices, buyers are again approaching expensively priced condos and co-ops with skepticism. ‘They are very concerned that the price is justifiable,’ Willkie says. ‘They just don’t have the same confidence that prices will rise in the future.’”
The New York Daily News. “South Bronx residents will have to do without a residential component planned for a South Bronx development site. A two-story retail center will break ground in Hunts Point this year. The developer scrapped plans for a mixed-use housing complex above the stores. Now, the site will feature a Deals discount store, a McDonalds and a 312-seat Red Lobster.”
“‘People don’t have jobs,’ said Miriam Maldonado, a Soundview resident. ‘But we have new malls popping up all over.’”
The Boston Globe in Massachusetts. “The real estate market in Cambridge and Somerville is red hot, right? Or is it really as hot as we have been led to believe? Amid all the hoopla over rising prices, here’s a number that should give pause to even the most ardent real estate bulls. The number of expired or cancelled listings in our state’s top hipster hotspots rose sharply in the last three months of 2013 compared to the fourth quarter of 2012, according to Bill Wendel over at the Real Estate Cafe in Cambridge.”
“Somerville saw 50 cancelled or expired listings of homes and condos during the last three months of 2013, up from 37 during the fourth quarter of 2012. Cambridge also saw a jump in the number of sellers striking out, rising to 62 during the final months of 2013 from 59 the year before.”
“What’s telling, though, are the prices. The median price of the eight Somerville listings during the first week of January tops $700,000, with four of them on market in the $800,000 to $1 million-plus range, according to stats Wendel shipped over. That’s compared to a median price of just over $300,000 for the six Somerville listings that were on the market during the first week of January 2013.”
Greenwich Time in Connecticut. “Saving up for a down payment on a home in southwestern Connecticut is no easy task. With many banks standing firm on the need for a 20 percent down payment these days and some home prices topping out at well over $1 million, stashing away funds to make an offer on a ‘typical’ home can take residents well over a decade, according to a Hearst Connecticut Newspapers analysis.”
“In Greenwich, high home prices mean that the town’s average family would have to squirrel away 10 percent of its paychecks for 15.4 years to be able to afford the $200,000 required for a 20 percent down payment. ‘If you say to someone, ‘In order for you to have your home down payment in the next two years, you need to save $312 a week,’ the answer could be, ‘You’re an idiot. There’s no way I can save that,’ said Michael Matson, of Matson Financial Advisors Inc. in Danbury.”
WNPR in Connecticut. “Connecticut officials are campaigning for the extension of a federal tax provision that expired at the end of last year. It’s the tax relief provided for distressed families that have to sell their homes at a loss, or who go through a foreclosure. Debra Chamberlain of the Connecticut Association of Realtors said it’s a significant hardship.”
“‘These families have been hanging on,’ she told a news conference in Hartford. ‘They’ve been hanging on for years, sometimes. And at the point that they finally make the tough choice to sell that house short, or they’re unfortunately forced into foreclosure, we’re there, holding their hands, and helping them wipe away the tears, and figure where they’re going to get the money to move out of the house. The notion that they would then have to pay taxes on money for that shortfall is really unconscionable.’”
The Asbury Park Press in New Jersey. “In the years since the Great Recession tumbled housing prices and eviscerated personal incomes, a growing number of Americans have given up their homes and turned to renting. Many middle class Americans are in the same predicament. In 2013, 43 million Americans rented their homes, according to Harvard University’s Joint Center for Housing Studies. Rentals increased from 31 percent of the nation’s housing stock in 2004 to 35 percent in 2012, researchers found.”
“When John Morales gave up his Howell home of 14 years because his income as a laboratory technician did not rise at the same rate as his taxes and expenses, he said it was the ’saddest and worst’ day of his life. But more than a year after the sale, Morales believes he and his wife are better off. The two now rent a home in an adult community in Brick, he said. Renting has allowed him to concentrate on fewer aspects of the home’s maintenance and worry a bit less about money, he said. ‘I couldn’t keep going the way I was going,’ he said.”
Debra Chamberlain of the Connecticut Association of Realtors said it’s a significant hardship.”
“‘These families have been hanging on,’ she told a news conference in Hartford. ‘They’ve been hanging on for years, sometimes.
You lowlife liars put them in that position so how about you pull the cash out of your own pocket?
Realtors are such pandering liars.
“‘They are very concerned that the price is justifiable,’ Willkie says. ‘They just don’t have the same confidence that prices will rise in the future.’”
Buh, buh, buh…real estate always goes up, DOESN’T IT?!
“In Greenwich, high home prices mean that the town’s average family would have to squirrel away 10 percent of its paychecks for 15.4 years to be able to afford the $200,000 required for a 20 percent down payment.”
Yeah right…like that ever happened in the course of Connecticut state history!
‘The age of bigger, bigger, bigger in Greenwich real estate may be all in the past. Of course, the average size of homes here has never stacked up evenly against the rest of the nation. The Greenwich Town Assessor’s Office reports that the average size of a single-family home in town is 3,493 square feet, about 46 percent larger than the rest of the nation.’
‘But even here — where Realtor Julianne Ward of Berkshire Hathaway New England Properties classifies a 7,500- to 10,000-square-foot home as “medium size,” there’s been a decline in demand for super-sized spreads in the last several years.’
“I think people used to want the bigger the better, and no household could be big enough,” said Ward, who is representing one of the largest homes on the market in Greenwich “a 17,760-square-foot manse listed for $14.5 million.’
‘Valerie Pisano, a Realtor at William Raveis, said she’s had plenty of interest on a home she’s listing at 8 Riverview Court “one of the smallest single-family houses on the market in town right now. The house offers 992 square feet of living space on about a quarter-acre in Glenville and is asking $519,000. “We’ve been showing that house constantly and we’ve gotten multiple offers,” Pisano said this week.’
“17,760-square-foot manse…”
Room for quiet contemplation.
Obviously those “maroons” pay $thousands per year to clean the castle. Maintenance must cost a king’s ransom,
“The house offers 992 square feet of living space on about a quarter-acre in Glenville and is asking $519,000.”
Geez, what a bargain….
The Greenwich mailing address is worth that and more.
Glenville is the hood in Greenwich.
‘Foreclosure filings in Westchester County by mortgage lenders and servicers rose nearly 49 percent in 2013 from the previous year and court judgments against defaulting homeowners rose 77 percent last year from 2012, as banks began clearing a backlog of sold and resold mortgage loans dating from the housing market boom.’
‘The Westchester County Clerk’s office reported 2,694 foreclosure actions started in 2012, up from 1,813 in 2012. The lenders’ filings last year were the highest since 2009, when 3,123 foreclosure actions were started in the Great Recession.’
‘Attorneys and real estate brokers have said they expect the surge in filings to continue in 2014 and that it could be another two to three years before the backlog of mortgage loans in default is cleared.’
‘… it could be another two to three years before the backlog of mortgage loans in default is cleared.’
Did they accidentally say ‘years’ when they meant to say ‘decades’?
Last I read, it takes about three years to complete a foreclosure in NY. I have no idea why.
Blue
Non-Judicial vs. Judicial Foreclosure might be why. California is a Non-Judicial state, but iirc NY is a Judicial, hence the 3 year process.
Blue
California went the same route basically with The Ca Homeowners Bill Of Rights effective Jan. 1, 2013. Actually, I think the handcuffs are tighter for the lenders in Ca now than NY.
2nd post on subject
iirc NY is a Judicial Foreclosure state, whereas Ca is Non-Judicial. Hence the long process in NY.
The handcuffs are NOT tighter in CA.
If a lender wishes to foreclose in CA, they still can do so at the regular pace.
However, if you want to go down that path, lenders cannot simultaneously be negotiating for a short sale or other modification (which may be financially beneficial to the lender).
Really?
I guess Bank of America illegally screwed over my friends, who were dual-tracked out of the home they thought they owned.
Look at all this;
http://calhbor.org/2014/01/13/january-newsletter-covers-new-cfpb-rules-on-respas-revamped-qwr-process-recent-cases-regulatory-updates/
http://oag.ca.gov/hbor
http://defendyourdollars.org/document/californias-homeowner-bill-of-rights-summary
There’s a lot of road blocks, most of which can get the lender or servicer sued.
What is usually missed when these things go up is the banks like this stuff; it’s an excuse to milk fees, delay write-downs and restrict supply. Then, eventually, the government has to back down because the UHS aren’t making enough money, and the road blocks begin to be removed.
Don’t forget the bonus! Politicians get to hold news conferences bragging about how much they’ve done for the poor homeowners.
Really?
I guess Bank of America illegally screwed over my friends, who were dual-tracked out of the home they thought they owned.
————–
When did this happen?
The law became effective January 2013, so before that time, dual tracking was still allowed.
The way I see the HBOR is this:
The laws give people with money and time the ability to delay the process longer (file suits, etc.). If folks don’t have money, or know their rights, they will not squeak very loudly (or at all), and the banks will proceed through the new process largely unfettered…with more notices.
The net result of all of this is that ultimately it will drive the cost of borrowing up in CA as compared to what it was prior to the HBOR.
Property radar has updated their data for December, so the entire year is now available to see the impact of the HBOR on parts of the foreclosure process:
http://www.propertyradar.com/trends/california
The time to foreclose hasn’t really changed much…interestingly, the time for banks to resell homes has steadily increased (which is strange, because you’d think that the HBOR would relate more to an increase in time to foreclose).
However, since the time to resell is in conjunction with a steady (but slow) decline in total REO inventory, it makes we wonder about the dispersion in time for banks to resell…I suspect there are a lot of homes that are resold quickly, but that over time, a greater proportion of REO resales are from more difficult assets to deal with (bankruptcy holding things up, lawsuits, etc.). With an increase in short sales as the way to deal with delinquencies (a byproduct of the HBOR), a greater proportion of sales from banks have been on the books for a while.
California only has the appearance of decreasing foreclosures simply because their foreclosure moratoriums are very effective.
“The law became effective January 2013, so before that time, dual tracking was still allowed.”
Really? At what point in U.S. history was bank fraud legal?
Or do you maintain that pretending to ‘help’ homeowners qualify for a mod by encouraging them to stop making payments, then turning around and foreclosing on them for stopping payments, was not fraudulent behavior?
I guess I just don’t understand banking law.
“‘These families have been hanging on,’ she told a news conference in Hartford. ‘They’ve been hanging on for years, sometimes. And at the point that they finally make the tough choice to sell that house short, or they’re unfortunately forced into foreclosure, we’re there, holding their hands, and helping them wipe away the tears, and figure where they’re going to get the money to move out of the house. The notion that they would then have to pay taxes on money for that shortfall is really unconscionable.’”
Why can’t these people pay income tax like the rest of us have to pay it?
‘we’re there, holding their hands, and helping them wipe away the tears’
See, the FB’s are victims. And the UHS are protecting the victims. This makes them morally superior.
‘and figure where they’re going to get the money to move out of the house’
At this point, the used house saleswoman quietly disappears.
That’s right…. exactly. Run the clueless, pandering mouth until it’s time to get your wallet out. Poof. Disappears into thin air as though the words were never invoked.
More LIEberal tactics on display.
“hanging on for years…”
That means living payment free I imagine.
Our neighbor didn’t pay their mortgage for 5 years, and got a short sale approved.
Timed it such that they qualified for a FHA loan 3.5% down, and remodeled the house across the street on the saving of living mortgage free. Good roi, moral trash. They seem proud of it.
That’s typical of the company you keep. Thanks.
The wife and I get our first house in Belmont Heights/Long Beach, CA in 1997. Two women had bought the house in 1982 then added a second story and a pool in 86-90 using one of the partner’s inheritance.
The house short sales because they didn’t pay their mortgage,taxes or any other bills for about a two year period. The credit union ended up losing close to $40,000.00 by the time that we ended up with the place.
We found out on closing day that the two ladies also had a lean of $5000.00 on the house because of an unpaid credit card. We had to split the difference with the realtors at the last minute to cover that cost.
Near the end of the process we got to sit in the living room and listen to these two pigs squeal (”you’re stealing our house!”) how they were THE victims in this situation when they were told, by their realtor, to sign the 1099 because the IRS was going to consider the $40,000.00 as earned income and that they would be taxed accordingly.
We lived in that house for 6 years and that entire time we continued to have summons servers and bill collectors showing up at our door looking for the former residents as their California crime wave continued.
Both women were formerly employed in the local Long Beach, CA school system, one had been a principal the other as a teacher.
Unfortunately,they were ahead of their time when it comes to the inability to pay one’s debt. We didn’t hear any slanted news stories about tears and holding hands to promote FB bailouts back then.
they have fat pensions now and you don’t
only gov workers get pensions
‘There are two overlapping refrains in coverage of the trendiest boroughs of America’s largest city: “Neighborhood reaches new level of twee luxury” and “Real estate prices reach new level of absurdity.” Stories falling into those two categories account for a good chunk of the New York Times, New York magazine, and the New York Observer. And it’s true that parts of Manhattan can feel like a museum preserved for tourists or an upscale outdoor shopping mall, while “Brooklyn” has become a misused byword for moneyed hipster affectation.’
‘Yet recently released census data paints a different portrait. Measured by median income, Manhattan and (especially) Brooklyn are much poorer than you think. Manhattan’s median annual household income is $66,739, while Brooklyn’s is a mere $44,850. Its less fashionable neighbor, Queens, outearns Brooklyn at $54,373 per year. New York City’s most suburban borough, Staten Island, is also its richest, with a median household income of $70,295, while the suburban counties surrounding New York are all richer than any of the boroughs.’
‘Though all housing prices in New York keep rising, the gains of the current recovery have accrued only to the wealthy, while most residents’ incomes remain stagnant. Consequently, people get pushed into paying more than they can afford for their apartment. According to the census, 64 percent of New York City households pay more than 25 percent of their income in rent and utilities, and 44 percent spend more than 35 percent. Homelessness is also at an all-time high, in part because of the growing gap between incomes and rents. “You have this incredible disconnect, where median income has declined and housing costs have gone up,” says Andrew Beveridge, professor of sociology at Queens College. Beveridge attributes Mayor Bill de Blasio’s victory in part to frustration with the lack of affordability. “The average person is not doing as well in New York,” says Beveridge. “Life is harder for them now than it was 10 years ago.”
‘So next time you’re at a dinner party and somebody complains that New York has become the sole province of rich white people, you can tell him he’s wrong.’
“Manhattan Rental Rates Fall
ThreeFor Four Consecutive Months”http://www.businessweek.com/news/2014-01-09/manhattan-apartment-rents-decline-as-landlords-offer-more-breaks
Maybe that $66,000 is AGI. They have the top tax lawyers. I know of software developers earning $500,000 per year writing financial software in NYC. That was 11 years ago. Wonder how much they make now?
Higher earners can afford to live in the suburbs.
Impossible Bill, as we know from the folks on this blog, it’s impossible to earn that much in IT/software.
Just like there aren’t any CCIEs who have strong storage experience and a VCP who are willing to work for 200K.
However, I will say.. What an utter waste of talent. How much better could the world be if those software guys were writing code that actually does something useful instead of figuring out how to pick up pennies in front of a steamroller more quickly.
“According to the census, 64 percent of New York City households pay more than 25 percent of their income in rent and utilities, and 44 percent spend more than 35 percent. Homelessness is also at an all-time high, in part because of the growing gap between incomes and rents.”
Only slight changes in the numbers are needed to describe San Diego’s situation.
“In 2013, 43 million Americans rented their homes, according to Harvard University’s Joint Center for Housing Studies. Rentals increased from 31 percent of the nation’s housing stock in 2004 to 35 percent in 2012, researchers found.”
Renting a home is the new black!
Renting is freedom
Bill
While I agree for some folks renting is smarter, long term it is financial suicide as you get older. When you buy your toe-tag home in AZ for retirement, your expenses will be age appropriate for a senior.
Stunning someone who committed financial suicide by overpaying 200% for a depreciating house accuses a guy with $1 million in loose cash of….. financial suicide.
HA
Bill never said he was worth $1M.
2. Never accused him of that.
3. Go get a diaper change. You have a stinky.
4. You sure have the day to post on HBB. Are you in mom’s basement?
Yes he did.
Yes you did.
That’s all you’ve got?
That’s really all you’ve got?
‘Although Rhode Island’s median house price rose by nearly 4 percent in November, the number of houses sold fell by 12 percent, “the most significant lull in home sales activity in 30 months,” according to the Rhode Island Association of Realtors.’
‘The association reported that the inventory of single-family houses for sale fell slightly from November 2012, “leaving just over a six-month supply of homes for sale, giving buyers a slight edge in negotiating power.”
‘Massachusetts families on the edge of homelessness have been dealing with major changes in recent months, as HomeBASE, the state program providing rental assistance to families in need, winds down.’
‘Families trying to stay on Cape are doing their own creative thinking and budgeting. Some have moved back in with parents or other family members, and some are pooling their resources, crowding multiple families into houses intended for one. For some, though, no amount of economizing can alter the economic realities.’
“The economy’s been bad, and wages at the bottom have been flat,” says Presbrey. “If housing is as expensive as it is here…how can people afford to live?”
‘Presbrey says short-term fixes like HomeBASE, however effective they are during their finite lifespans, will never address the problem completely. “If you understand that there’s a new crop of needy families every generation, it really only works if there’s a new crop of money every generation,” he says.’
‘Many in that new crop were raised in the midst of the last, their opportunities hampered by uncertainty about basic considerations like housing. “Having a safe and secure place to live is essential,” Presbrey says.’
‘To make a serious dent in the cycle, a significant increase in support for struggling families is necessary, Presbrey says. “Can we afford to provide more rental assistance as a society? I think we can. But we have to change our priorities.” The ideal future, he says, is one in which organizations like HAC are no longer needed. “We shouldn’t be necessary. We’d rather not be necessary.”
Heck of a job Bernanke.
‘We’re seeing more signs of recovery in the housing market. Last month, foreclosure filings dropped to their lowest levels since the housing crisis hit in 2007. And overall home prices are up nationwide. But recovery is not the narrative everywhere. In some states like Connecticut, foreclosures in 2013 have been up significantly over the year before.’
‘Reporter Kaomi Goetz of member station WSHU has the story. KAOMI GOETZ, BYLINE: Holly House has shoulder-length red hair, a big smile and a trusting demeanor. She sits in front of a stack of papers and has no problem talking about one of the biggest messes of her life.’
‘HOLLY HOUSE: My situation is, I’m trying to save my home.’
‘GOETZ: The 45-year-old divorced mother of three was the first one to arrive for a recent foreclosure clinic in Bridgeport, Connecticut. It’s run by a nonprofit that helps people hang onto their homes. Holly House’s ex-husband left her with a loan on a multi-family home with a dollar amount that’s way over her head.’
‘HOUSE: The loan was over $400,000 and the house is only worth $155.’
‘GOETZ: This year, Connecticut is getting hit with 2,000 new foreclosures each month. That’s 200 more a month than last year.’
How come they never really look at this:
‘The loan was over $400,000 and the house is only worth $155(000)’
The reporter never says, “Wow Holly you really paid way too much.” Or “How in the heck were you ever going to pay back that much money?”
“How in the heck were you ever going to pay back that much money?”
So long as How-much-a-month Holly could afford the monthly, why would she have bothered worrying about how much she had to repay?
Possibly her Ex asked these questions before rejecting the debt donkey yoke.
‘The Canadian economy seems to be rolling over. The big question is whether this will prove to be a controlled softening. Or does the Canadian miracle of the past few years merely represent a postponed reckoning with severe imbalances set to be painfully put right.’
‘December’s employment report was a jolt. Canada’s unemployment rate registered its biggest monthly increase in nearly five years to 7.2% from 6.9% a month earlier after 46,000 jobs were lost–against expectations of a 14,000 rise.’
‘there are other worrying signs about the economy. December housing starts weakened and building permits fell sharply in November, while house price inflation ground to a halt during the month.’
‘It would be hard to overstate the danger this represents. Canadian house prices are very clearly bubbly. In the wake of the financial crisis, the Bank of Canada moved aggressively to support the economy with cheap money. It worked. Canada weathered the downturn with ease and quickly returned to solid growth. But one by-product was a re-acceleration of already inflated house prices. And the higher prices rose, the more Canadians borrowed to buy and build them.’
‘Canada’s household debt stood at 164% of incomes in the second quarter of 2013–double where it was two decades ago–and significantly higher than the U.S.’s 130% at the peak of its housing bubble.’
‘Meanwhile, some 7.5% of the Canadian labor force is employed in construction, the most of any time for at least 40 years. Residential construction makes up 7% of the economy. All of these numbers point to the economy’s deeply unhealthy dependence on property.’
Did Canada’s unemployment rate increase (in contrast to the U.S.’s) because they don’t exclude ‘discouraged workers’ from their unemployment rate calculation, or is the picture truly worsening in Canada compared to in the U.S.?
‘The Canadian economy seems to be rolling over…earlier after 46,000 jobs were lost–against expectations of a 14,000 rise ??
And we had 74,000 jobs created when 200,000 + was the expectation…Will see what our January & February look like….We could possibly be rolling over also…
‘THERE are economic wreckers out there who have some misguided goal to keep warning about a housing bubble. And while you’d like to think they are doing it for noble reasons, it looks more likely that they are trying to draw attention to themselves for media exposure.’
‘These commentators, who really should be known as house wreckers, keep telling us that a bubble is brewing, which of course is not only speculation, it is also a pretty bad mixing of metaphors. Bubbles don’t brew, they blow bigger and then blow up.’
‘Some get huge and blow up while others can blow up as small bubbles, so they don’t always have to mean excessive trouble — and that’s the point I have to make.’
‘A small housing bubble is really only a nice recovery and the air can be taken out of it by measured interest rate raisings by the Reserve Bank, higher unemployment, which can KO confidence of homebuyers or there could actually be some enlightened government policy that improves the supply of affordable housing.’
‘Anyone living on the Gold Coast or Palm Beach, north of Sydney, saw prices collapse in the 20 to 40 per cent region post-GFC and so what they are seeing now is overdue relief.
Sure you can get an economist or two to jump on board this bubble warning tale, but not only are economists often wrong — surely you have noticed this — but they are also willing to be speculative to get column inches in a newspaper.’
‘What infuriates me is that these commentators are trying to boil the golden goose — the housing sector — even before the poor bird has had a chance to drop an egg.’
‘With the mining investment boom going off the boil we need the other beaten-up sectors since the GFC — housing, tourism, education, retail and others — to have a solid run.’
“…even before the poor bird has had a chance to drop an egg.”
Something is going to drop from the poor bird, though I’m pretty sure it isn’t an egg.
“A small housing bubble is really only a nice recovery and the air can be taken out of it….”
Peter, why does the air need to be taken out of a nice recovery?
The housing market has slowed because people think if they stall buying a home prices will crash. (Very dangerous approach).
Mortgage interest will rise in May (5-5.5%),waiting for the downturn not going to happen folks. Sellers feel in many cases they are either going to take smaller hit and get from their underwater loan, or price the property with a smaller profit.
People are in a better position to make payments now, short sales, making deals with banks have all but disappeared.
Sellers will now wait to get the right buyer and they will deal, but reduce by a huge amount no way, SORRY THAT BALLGAME IS OVER.
Buyers who wait are going to hurt themselves in the long run. Buyers, now till May 1st is your best chance to make a deal.
“The housing market has slowed because people think if they stall buying a home prices will crash. (Very dangerous approach).”
Anyone who has passed an introductory college microeconomics, which I have to assume includes a vanishingly small share of Realtor®s, realizes that individual households have no market power; i.e. this claim is nonsensical.
“Mortgage interest will rise in May (5-5.5%),waiting for the downturn not going to happen folks. Sellers feel in many cases they are either going to take smaller hit and get from their underwater loan, or price the property with a smaller profit.”
How can you predict how much mortgage rates are going to rise? The bond market sure doesn’t suggest any such future development so far as I am aware.
At any rate, the 100 bps (or so) increase in rates that already played out last year was sufficient to blow demand out of the water; no evil scheming by households hoping to crash the market was necessary.
The poster does not understand that the biggest housing bubble in history is teetering on the edge of a bloody blade.
As interest rates rise, housing prices will fall (in aggregate, of course). Unless, of course, that rise in interest rates is coupled with a rise in wages. Home price fundamentals really are pretty simple. Wages drive the ability to pay. House price and interest rates drive the amount of the payment. All those things are related, but, at the end of the day, it’s really the payment and income that drive the prices of homes (which is why interest only loans caused such a huge spike in prices).
But if inventory falls with rising interest rates, the prices may still continue to rise or stay flat. Demand will fall, thats for sure. This is exactly what is happening now. The sales are falling, buy the prices remain either the same or slightly higher.
Inventory is rising and prices are falling… in Seattle, Denver and California
Realtors Are Liars. Never forget it.
“Debt is dumb”.
Puggs
Not all debt is dumb.
Leverage debt can be brilliant.
Depends.
Consumer debt other than a car is dumb, but not everyone has great cash flow. We have no mortgage or consumer debt, but I am not “anointed” to make blanket statements.
Puggs
A family member leveraged his first strip center into an empire. Now he has the $ to pay cash for centers. Mind you, he was a real estate attorney and is brilliant. He makes me proud. Leverage debt over time makes people rich.
I wish I had his brains and ability to make lots of $. I miss my Aunt Rose (his mom) a lot. She was a visionary herself.
ALL debt is dumb, hence Debt Donkey status.
Or, you can overpay 200% for a rapidly depreciating house and just be a Donkey.
I’m just a parrot. The guy who originally said it is brilliant and built a multi-million dollar company without ever taking out a loan. Unfortunately, there are way more tear laden stories of using leveraged (or should I say over-leveraged) debt than the successful stories you outlined above.
I’ve driven cars with loans and ones without. The cars that didn’t have a payment drove SO much better.
“The borrower is a slave to the lender”
Timeless wisdom.
Puggs
Yeah, there are many roads to building wealth. Ours is living in a paid off home, which gives us lots of options to take risk. My family has made lots of $ in commercial real estate, entertainment, and vineyards in Napa Valley. Their philanthropy record stinks. They are totally selfish unless it’s the “arts”. Photo-ops.
I hear ya on parroting. We all do it.
“Ours is living in a paid off home”
Which you overpaid a 225% premium. Your risk capital is gone and it’s never coming back.