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House Prices 2021 | Crash Still Coming? (Should You Buy)

AtomicPissAtomicPiss Administrator, Swaye's Wigwam Posts: 64,410 Founders Club
edited May 2022 in Tug Tavern
https://www.youtube.com/watch?v=Fenl5fgrFDM
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  • BleachedAnusDawgBleachedAnusDawg Member Posts: 11,924
    They've been saying this for 5 years.
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  • greenbloodgreenblood Member Posts: 14,505
    edited February 2021
    Prices are rising do to the lack of supply. At least on the west coast, the housing inventory is at record lows. Combined with record low mortgage rates, prices have to go up. When the pandemic is over, expect to see interest rates to rise and add to that an increase of supply, you'll have a housing price correction.
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  • BleachedAnusDawgBleachedAnusDawg Member Posts: 11,924
    edited February 2021
    If supply were to increase I would agree, but I don't see supply increasing fast enough, especially on the West Coast due to red tape and many areas which have limited land and restrictive zoning. Also, rates would have to go up by double or more IMO to make a significant dent in demand.
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  • YellowSnowYellowSnow Moderator, Swaye's Wigwam Posts: 36,074 Founders Club
    "There are thousands of sub markets". Yep, all real estate is local.
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  • YellowSnowYellowSnow Moderator, Swaye's Wigwam Posts: 36,074 Founders Club
    BleachedAnusDawg said:

    If supply were to increase I would agree, but I don't see supply increasing fast enough, especially on the West Coast due to red tape and many areas which have limited land and restrictive zoning. Also, rates would have to go up by double or more IMO to make a significant dent in demand.

    All the desirable places to live with good jerbs have the same issue you describe above- i.e., no land on which to add new supply and restrictive zoning. I agree with your assessment.
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  • 1to392831weretaken1to392831weretaken Member, Swaye's Wigwam Posts: 7,674 Swaye's Wigwam
    Disclaimer: zero research into this. Just shooting from the hip:

    How much of the lack of inventory now is linked to an inability to foreclose or evict? Is it possible that restrictions will be lifted and foreclosures and evictions/sales will flood the market (relatively speaking), depressing prices? In 2008, the economy crashed, and suddenly the market was flooded with foreclosures and short sales. The difference this time is that Regular Joe has been propped up alongside big banks/etc. What happens when that support ends? Unemployment reached record highs in 2020 and still remains awfully high. It's hard to believe that all of those jobs will just be magically restored once everyone is vaccinated and restriction are lifted. Many employers have either closed down shop or how figured out ways to work lean (from an employee count standpoint) that they won't reverse unless they absolutely have to.

    Jobs will take time to recover is my point, and I doubt all of these temporary measures to protect homeowners and tenants will last long enough that there won't be a substantial gap. With how low inventory is now, it won't take much of an increase to have a significant impact on price.

    At least that's my theory. I hope values stay high long enough for me to finish my current remodel and borrow against it, but I work incredibly slowly, so I doubt it.
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  • BleachedAnusDawgBleachedAnusDawg Member Posts: 11,924
    The stuff for renters and landlords is going to be extended another 2 years. At some point the chickens have to come home to roost, though.
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  • RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 107,458 Founders Club
    BleachedAnusDawg said:

    The stuff for renters and landlords is going to be extended another 2 years. At some point the chickens have to come home to roost, though.

    At this rate they'll extend it enough so the state gets the homes for failure to pay property taxes

    5 or 7 years
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  • GreenRiverGatorzGreenRiverGatorz Member Posts: 10,165
    YellowSnow said:

    BleachedAnusDawg said:

    If supply were to increase I would agree, but I don't see supply increasing fast enough, especially on the West Coast due to red tape and many areas which have limited land and restrictive zoning. Also, rates would have to go up by double or more IMO to make a significant dent in demand.

    All the desirable places to live with good jerbs have the same issue you describe above- i.e., no land on which to add new supply and restrictive zoning. I agree with your assessment.
    I disagree with both of you.

    I think we're at the very beginning of a major societal shift out of cities and suburbs. Remote work is, if not the new norm, at least going to be much more prevalent than it was pre-pandemic. People are going to begin emphasizing physical proximity to economic/financial hubs a lot less, and you're going to see a sizable migration of middle-to-high income folks from these commutable hubs to outlying, lower cost areas (rural and second-rate cities alike). Why wouldn't people move from high-cost areas that they only live in because of commuting distance if they can work from anywhere?

    It'll take awhile for the markets to begin to fully reflect that shift, but it's coming. Now is a good time to buy land in Bellingham or Cle Elum.
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  • RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 107,458 Founders Club
    On the other hand buyer remorse stories are popping up after the rush last year to GTFO.

    The other thing is when do people feel like a sucker for continuing to pay rent?

    Biden should let the chickens come home now while he can still blame Trump
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  • BearsWiinBearsWiin Member Posts: 5,034
    GreenRiverGatorz said:

    YellowSnow said:

    BleachedAnusDawg said:

    If supply were to increase I would agree, but I don't see supply increasing fast enough, especially on the West Coast due to red tape and many areas which have limited land and restrictive zoning. Also, rates would have to go up by double or more IMO to make a significant dent in demand.

    All the desirable places to live with good jerbs have the same issue you describe above- i.e., no land on which to add new supply and restrictive zoning. I agree with your assessment.
    I disagree with both of you.

    I think we're at the very beginning of a major societal shift out of cities and suburbs. Remote work is, if not the new norm, at least going to be much more prevalent than it was pre-pandemic. People are going to begin emphasizing physical proximity to economic/financial hubs a lot less, and you're going to see a sizable migration of middle-to-high income folks from these commutable hubs to outlying, lower cost areas (rural and second-rate cities alike). Why wouldn't people move from high-cost areas that they only live in because of commuting distance if they can work from anywhere?

    It'll take awhile for the markets to begin to fully reflect that shift, but it's coming. Now is a good time to buy land in Bellingham or Cle Elum.
    Now is also a good time to own in Aptos
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  • dfleadflea Member Posts: 7,242
    RaceBannon said:

    On the other hand buyer remorse stories are popping up after the rush last year to GTFO.

    The other thing is when do people feel like a sucker for continuing to pay rent?

    Biden should let the chickens come home now while he can still blame Trump

    Now, THIS is showing some political savvy.

    "But, but, BUSH!!" lost something in year 3 or 4.

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  • YellowSnowYellowSnow Moderator, Swaye's Wigwam Posts: 36,074 Founders Club
    GreenRiverGatorz said:

    YellowSnow said:

    BleachedAnusDawg said:

    If supply were to increase I would agree, but I don't see supply increasing fast enough, especially on the West Coast due to red tape and many areas which have limited land and restrictive zoning. Also, rates would have to go up by double or more IMO to make a significant dent in demand.

    All the desirable places to live with good jerbs have the same issue you describe above- i.e., no land on which to add new supply and restrictive zoning. I agree with your assessment.
    I disagree with both of you.

    I think we're at the very beginning of a major societal shift out of cities and suburbs. Remote work is, if not the new norm, at least going to be much more prevalent than it was pre-pandemic. People are going to begin emphasizing physical proximity to economic/financial hubs a lot less, and you're going to see a sizable migration of middle-to-high income folks from these commutable hubs to outlying, lower cost areas (rural and second-rate cities alike). Why wouldn't people move from high-cost areas that they only live in because of commuting distance if they can work from anywhere?

    It'll take awhile for the markets to begin to fully reflect that shift, but it's coming. Now is a good time to buy land in Bellingham or Cle Elum.
    Hey man you don't need to convince me of the flood of people leaving the big cities. I've already done it and have made some significant dealing in hypotheticals money as a result. But there remains a shit ton of high paying work in places like Seattle that's not all going 100% virtual. I think condos in downtown are going to suffer for a while, but my gut tells me single family detached doesn't see much of a correction.

    I'd love to see some data on what percentage of Seattle family homes are behind on their mortgages, both for owner occupied as well as rental properties. All my friends who own single family rentals are still collecting the rent on time.
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  • BleachedAnusDawgBleachedAnusDawg Member Posts: 11,924
    YellowSnow said:

    GreenRiverGatorz said:

    YellowSnow said:

    BleachedAnusDawg said:

    If supply were to increase I would agree, but I don't see supply increasing fast enough, especially on the West Coast due to red tape and many areas which have limited land and restrictive zoning. Also, rates would have to go up by double or more IMO to make a significant dent in demand.

    All the desirable places to live with good jerbs have the same issue you describe above- i.e., no land on which to add new supply and restrictive zoning. I agree with your assessment.
    I disagree with both of you.

    I think we're at the very beginning of a major societal shift out of cities and suburbs. Remote work is, if not the new norm, at least going to be much more prevalent than it was pre-pandemic. People are going to begin emphasizing physical proximity to economic/financial hubs a lot less, and you're going to see a sizable migration of middle-to-high income folks from these commutable hubs to outlying, lower cost areas (rural and second-rate cities alike). Why wouldn't people move from high-cost areas that they only live in because of commuting distance if they can work from anywhere?

    It'll take awhile for the markets to begin to fully reflect that shift, but it's coming. Now is a good time to buy land in Bellingham or Cle Elum.
    Hey man you don't need to convince me of the flood of people leaving the big cities. I've already done it and have made some significant dealing in hypotheticals money as a result. But there remains a shit ton of high paying work in places like Seattle that's not all going 100% virtual. I think condos in downtown are going to suffer for a while, but my gut tells me single family detached doesn't see much of a correction.

    I'd love to see some data on what percentage of Seattle family homes are behind on their mortgages, both for owner occupied as well as rental properties. All my friends who own single family rentals are still collecting the rent on time.
    Rental side apartments are at 8% default, SFH rentals are 15-20% but vary by area and market. SFH market is still cooking away because there is no space to build new SFH's in Seattle.
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  • RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 107,458 Founders Club
    YellowSnow said:

    RaceBannon said:

    At the start of Feb our hot water heater went out. No worries we rent so not my problem. Called the property manager and they get a plumber out and he gets it running and tells them its time for a new one. They dick around and do nothing

    Two weeks later its out again. This is a Wednesday. Call the property manager and they get a plumber out. I'm laughing with the plumber at how fucking stupid the property manager is. He tells them we need a new one. Property manager says we can get the part in by next Tuesday. We have no hot water keep in mind.

    I tell then no. Guy number 3 shows up. He starts asking me what the issue is. I ask him who he works for. I'm with the property manager.

    So did you talk to either of the two plumbers you sent here?

    Uh no

    Don't you think that would have been a good idea in my Michael Corleone voice. Dude is near tears I kid you not when my wife steps in to stop the fight. This is Thursday

    Friday the plumber sends their field super by and this guy actually gives a shit and has it fixed by Friday night. As always there are dumb fucks and there are get it done guys.

    The moral of this story is that I turned to my wife and said - why the fuck are we paying rent when we don't have to and they can't kick us out?


    Because I am not wired that way. Sad. But now I want to threaten them with that just to see how they react.

    Not paying the rent when you have the funds is immoral.
    Under what moral code? As I recall your an atheist

    A serious question

    I agree with you by the way
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