Mortgage Rates????

[MuggsyB]

Anyone else amused that Muggsy has derailed his own thread with multiple exchanges with Hards?

No more discussion about mortgage rates please. Just dining options in Madison.

I can get distracted Scoop Snoop unless it's watching MU hoops. 

[TSmith34, Inc.]

There needs to be a lot more context in all of this discussion.

You guys had high interest rates when you bought in the 80s and 90s, but the houses were far cheaper.  Approaching 7% interest rates on a 300k house... it becomes a lot more difficult to pay than 7% on your 100k houses.  Especially since real wages haven't risen at the same rate to help afford those houses.

There is a ton of nuance to these discussions,

True

[forgetful]

As individuals have noted, the mortgage rates themselves are not the problem. It is the big picture for housing.

Interest rates are high, and housing prices are high. In some markets right now, individuals are essentially priced out of the market, and a lot of the sales (particularly in respect to more affordable housing) are all cash purchases by investment firms.

I know in my market, we would be hard pressed to find a home that we could afford, and would be competing against all cash offers.

I'd call that a housing crisis.

But the potential real crisis may be on the horizon. Some of these homes being purchased, are essentially being bought at a loss. What I mean, is there are individual investors (the ones Jwags references as IG investors) who are buying homes and renting them at a loss (losing money each month with the note higher than rent revenue). The plan, rent prices will soon go up, and the increase in home prices will leave them with a profit longer term.

That only works until prices drop and we suddenly have a ton of people underwater again and the system crashes on itself.

[ChitownSpaceForRent]

I know in my market, we would be hard pressed to find a hoe that we could afford,

Well now...That certainly is a problem.

[Skatastrophy]

Housing market is still solid, imo

Avg days on market for a listing - Inventory is moving quickly so it must be priced appropriately



Avg housing new starts - A leading indicator for residential RE, check out the housing crash 2008. Developers will not lay out cash when the market starts softening

[Hards Alumni]

Well now...That certainly is a problem.

Or it's a sign of an up and cumming neighborhood!

I'll see myself out.

[ZiggysFryBoy]

Ziggy,.

Are you in Madison or Milwaukee?

Madison.

[TSmith34, Inc.]

But the potential real crisis may be on the horizon. Some of these homes being purchased, are essentially being bought at a loss. What I mean, is there are individual investors (the ones Jwags references as IG investors) who are buying homes and renting them at a loss (losing money each month with the note higher than rent revenue). The plan, rent prices will soon go up, and the increase in home prices will leave them with a profit longer term.

That only works until prices drop and we suddenly have a ton of people underwater again and the system crashes on itself.

It happened during the 2009-10 financial crisis. Had I been more prescient, homes in AZ and NV could have been purchased dirt cheap. FL too, but thankfully dodged that shithole.

[TSmith34, Inc.]

https://finance.yahoo.com/news/10-things-that-are-getting-cheaper-185133196.html?.tsrc=372

"The chart below shows 10 spending categories where prices have declined during the last 12 months. We also include the two-year change in prices for those categories, to capture the broader price trends since inflation became a problem in 2021. Average incomes have risen by 4.4% during the last year, and 10% during the last two years. Anything that has risen by less than incomes is getting cheaper on a real, inflation-adjusted basis.

Rents are up 8% since this time last year, and 15% since 2021. Housing costs are the biggest expenditure for most families, and elevated rents remain the biggest unsolved inflation problem. Most homeowners were able to lower their housing costs during the last few years, by refinancing their mortgages when rates were at record lows. Renters didn't get that break. Help may be coming, however. A Zillow measure of rent inflation peaked last year, and has been dropping since then, which may portend lower rents as leases come due and renters re-sign or move."

[MU82]

It happened during the 2009-10 financial crisis. Had I been more prescient, homes in AZ and NV could have been purchased dirt cheap.

We visited the Phoenix area in the winters of 2009 and 2010, and man ... you're right.

We took a look at a couple Scottsdale houses that were listed for under $250K just a year or two after the owners had paid $400K+ for them. Bank-owned houses were all over the place, some reduced by 50% over the asking price just 6 months earlier. One 55+ community we looked at reduced the minimum-age requirement to 45, and you could buy new-construction houses there for under $150K.

If only the ol' balls had been crystal!

[MuggsyB]

Madison.

I sent you a PM. 

[forgetful]

Well now...That certainly is a problem.

Well that typo certainly led to a completely different type of financial crisis.

[Lennys Tap]

Florida will be much harder. Our property assessor is highly competent and our valuation is on the nose. If you disagree with them, they invite you to come in and talk and they'll work with you. It's ahrd to argue with someone who is right and knows their stuff!

Brother dgies:

In Illinois (Cook County) we appealed every three years and always won because the assessor was either incompetent or following orders to grab all the $ they could (I know a lot of people never bothered to appeal). In Florida (as you say) there's no need to appeal. Fairness and competence takes care of that.

The contrast between state government agencies in Illinois (former home) and Florida (current home) is (per my experience anyway) amazing. When I walked into my local DMV to change my residence and get a driver's license I was amazed at how much more professional, personable and helpful they were in Florida vs Illinois. They made something I always dreaded into an easy, pleasant experience.

[Frenns Liquor Depot]

Lenny at the FL DMV

[dgies9156]

Brother dgies:

In Illinois (Cook County) we appealed every three years and always won because the assessor was either incompetent or following orders to grab all the $ they could (I know a lot of people never bothered to appeal). In Florida (as you say) there's no need to appeal. Fairness and competence takes care of that.

The contrast between state government agencies in Illinois (former home) and Florida (current home) is (per my experience anyway) amazing. When I walked into my local DMV to change my residence and get a driver's license I was amazed at how much more professional, personable and helpful they were in Florida vs Illinois. They made something I always dreaded into an easy, pleasant experience.

Brother Lenny:

Same in our County (Indian River). The DMV stuff is delegated to our county collector, who works furiously four months a year and ordinarily, hardly at all the remaining eight. This approach utilizes a bureaucracy every day of the year.

The folks there are competent and hard working. They were really helpful and also made sure I was registered to vote in Florida.

There's a different culture about public service in Florida versus Illinois. In Florida, they are expected to serve.