Author Topic: Anyone buying a home in the near future? Housing prices inflated?  (Read 6159 times)

WoodsRun

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I was wondering if anyone was following their local real estate markets because they are thinking of buying a home soon. There has been a lot of data showing that home prices have been increasing in the 5-10% range every year for the past five years or so. That is well over inflation, does that mean that home prices are in frothy territory again like they were 10 years ago?

I am not in any rush to buy a home yet, I am willing to wait a year or two if it means that home prices will come down at least a little again. And if interest rates rise that must be a guarantee for lower home prices. Is anyone else waiting it out to buy a home until prices come down to earth?

Two bedroom condos (which is what I want) is selling in the 120k - 200k range here which seems really high to me.

ShoulderThingThatGoesUp

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #1 on: July 10, 2015, 08:01:24 AM »
Market timing is for suckers. If the math works to rent vs buy, then rent. If there are good reasons to buy that might not all be financial and the numbers work, do that instead.

humbleMouse

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #2 on: July 10, 2015, 08:06:26 AM »
I think real estate is highly dependent on location.  You can't throw blanket statements across the entire US.  Also, the data I look at is how risky the loans FNMA makes are.  They keep extensive data about who they borrow to and what standards the loans are held to.  If you examine this data you will find that the amount of risky loans right now is approximately 1/20th the size of in 2006-07. 

You have to know your neighborhoods and know your city and rental market.  You need to know why people live in certain neighborhoods and need to know the gentrification trends that are happening. 

Ftao93

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #3 on: July 10, 2015, 08:09:30 AM »
I'm in a similar boat.  Rent is cheap because we share a house with friends.  We're going to lose our scoot/motorcycle storage to a duplex (so that my landlords can retire before they die) that will benefit them greatly.  We really want to buy in the near future, but the prices in Denver (and anywhere feasible to live nearby) have gone up drastically.  They won't come down a ton, but they're super inflated right now.

The math doesn't add up for us to buy.  750 rent vs minimum 250k house to buy (and we don't have enough to make even a 1st time buyer purchase yet) which would be probably 2k with all the bills, plus having to own 2 cars and commute a long distance.

so for now we just save save save.

If you're not in a hurry, don't worry about it, just keep on truckin' so you can have the $$ handy when it's time to pounce!

frugaliknowit

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #4 on: July 10, 2015, 08:22:32 AM »
Real Estate is local.  Here in Chicago, overall, the market is still below peak.  In some of the prime areas it is close to peak, but in most it is well below.  The employment market is not great here. 

Trying to time the market is a losing game.  The most important questions:  1.  How long will I live in a purchase?  In my opinion, that should be 10+ years.  2.  How much can I rent for?

TheThirstyStag

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #5 on: July 10, 2015, 08:27:59 AM »
I agree with all that's been said here.  It's very location-specific. 

In my area, certain zip codes have low inventory and properties are being snatched up at a slightly higher price per square foot, however it's still not quite pre-2007 level.

slugline

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #6 on: July 10, 2015, 08:30:23 AM »
Employment drives housing. If the local job market is healthy, then there is no need to fret over whether there's a bubble. If the area you're looking in depends on cyclical employers that tend to ride boom/bust cycles, then exercise more caution.

You have to make a judgment call on whether you think a place is where you want to plant roots for several years, and if it won't be too much of a burden on your income.
« Last Edit: July 10, 2015, 08:32:03 AM by slugline »

WoodsRun

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #7 on: July 10, 2015, 08:31:40 AM »
Right now the math works out to rent but that is because I live in a not bad but not great neighborhood. I'm content with renting here because I know it is not permanent. I like the apartment and I'm sharing this two bedroom with someone else so rent is pretty cheap.

But when I buy I am looking at two neighborhoods:
One is close to the center of a nice town with lots of bars and restaurants around. Really safe, people are friendly, lots of trees, etc. This was always a nice neighborhood so it's not that housing prices are increasing because of gentrification. This is why I feel that it is overpriced currently compared to historical prices.

Another neighborhood is the downtown of the city here. It seems up and coming but not gentrifying as fast as a lot of other cities, so it's not like I need to pounce right away before it becomes really expensive.

If prices don't move much in the next year or two then I will probably buy then. For the time being I will just save as much as I can.

If they go down in the next year or two then it will be a pretty nice win!

If they go continue to go up really quickly...well then I don't know.

I see myself living here for a very long time so I'm not worried about resale value.

Kiwi Mustache

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #8 on: July 11, 2015, 02:29:22 AM »
I was wondering if anyone was following their local real estate markets because they are thinking of buying a home soon. There has been a lot of data showing that home prices have been increasing in the 5-10% range every year for the past five years or so. That is well over inflation, does that mean that home prices are in frothy territory again like they were 10 years ago?

I am not in any rush to buy a home yet, I am willing to wait a year or two if it means that home prices will come down at least a little again. And if interest rates rise that must be a guarantee for lower home prices. Is anyone else waiting it out to buy a home until prices come down to earth?

Two bedroom condos (which is what I want) is selling in the 120k - 200k range here which seems really high to me.

Try coming to Auckland where 2 bedroom small units in average income suburbs are selling for 800k (540k USD).

forummm

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #9 on: July 11, 2015, 06:27:27 AM »
I was wondering if anyone was following their local real estate markets because they are thinking of buying a home soon. There has been a lot of data showing that home prices have been increasing in the 5-10% range every year for the past five years or so. That is well over inflation, does that mean that home prices are in frothy territory again like they were 10 years ago?

In some places prices went down over 50% just before this 5 year period you mention. They were overpriced before the crash, but definitely corrected to be underpriced because of all the foreclosures flooding the market and the inability for many to get loans. Significant increases after the crash are expected.

WoodsRun

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #10 on: July 11, 2015, 07:33:35 PM »
The prices in Auckland sound ridiculous lol. Surely at some point people will start refusing to pay that much for such small units though, I can't imagine it will continue to go up and be crazy overpriced forever, can it?

And I wish I had the opportunity to snatch up a home at something like a 50% discount, that would have been so convenient.

Dicey

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #11 on: July 11, 2015, 08:19:34 PM »
And I wish I had the opportunity to snatch up a home at something like a 50% discount, that would have been so convenient.
The problem is that when the market takes a dump, everybody runs for the hills. It's not convenient at all.

If you know anything about craps, the odds are better when you're betting against the house. Problem is, you're also betting against most, if not all, of the other players at the table. You must have an abundance of knowledge and self-confidence plus a willingness to go where others fear to tread. Easy or convenient it is not.

The same principle applies to the stock market. Are you fearless enough to jump aboard when the market is hemorrhaging? Can you double down when all around you are panicking? Most people can't or won't.

powskier

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #12 on: July 12, 2015, 12:29:56 PM »
Market timing is for suckers. If the math works to rent vs buy, then rent. If there are good reasons to buy that might not all be financial and the numbers work, do that instead.

For any market buying or selling it comes down to above quote.
You could amend your question to : "are housing prices inflated compared to last year or compared to 25 years from now when I want to sell?". Nobody knows.

Rosbif

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #13 on: July 12, 2015, 02:45:22 PM »
I was wondering if anyone was following their local real estate markets because they are thinking of buying a home soon. There has been a lot of data showing that home prices have been increasing in the 5-10% range every year for the past five years or so. That is well over inflation, does that mean that home prices are in frothy territory again like they were 10 years ago?

I am not in any rush to buy a home yet, I am willing to wait a year or two if it means that home prices will come down at least a little again. And if interest rates rise that must be a guarantee for lower home prices. Is anyone else waiting it out to buy a home until prices come down to earth?

Two bedroom condos (which is what I want) is selling in the 120k - 200k range here which seems really high to me.

Try coming to Auckland where 2 bedroom small units in average income suburbs are selling for 800k (540k USD).

HAHAHA finally someone who feels my pain. Paris real estate is about 1,000 per square foot, about 10,000 per square meter. So a 1,000 square feet would be an even million.

wtjbatman

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #14 on: July 12, 2015, 05:26:53 PM »
My wife and I were looking at new construction homes here in Missouri, but at around $90 a square foot, they are just too expensive for the size of house we would really want and be happy with long term. We will continue renting for now. Our 2 bedroom 2 bath apartment is $620 a month, which is expensive for southwest Missouri, but very affordable for us.

cchrissyy

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #15 on: July 12, 2015, 05:30:11 PM »
Too local to say.  Just do what makes sense for you.

the neighborhood where I bought my house as a foreclosure deal 3 years ago is in seriously soaring price mode, multiple offers and all-cash deals everywhere I look.

the city where i wanted buy 10 years ago (my college town) has not yet recovered to 2005 levels.

lifeinhd

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #16 on: July 12, 2015, 07:22:00 PM »
Is anyone else waiting it out to buy a home until prices come down to earth?

Aye!

The way I see it, owning a home is not a necessity. Therefore, I have all the time in the world to wait for housing prices to become reasonable again, and I can rent in the meantime. If they don't, but I still want a house, NBD-- I save 53% of my AT income, which vastly outpaces housing price growth, so my savings will eventually be more than sufficient no matter what.

But I expect they will crash again. And when the time comes, I'll be ready.

Annamal

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #17 on: July 12, 2015, 07:36:13 PM »
The prices in Auckland sound ridiculous lol. Surely at some point people will start refusing to pay that much for such small units though, I can't imagine it will continue to go up and be crazy overpriced forever, can it?


It's been on a massive growth spike since the early 2000s, it tailed off a bit during the GFC but then roared back into life again and is now showing insane gains(like $1000   $3000 a week level gains).

At this point I suspect if (when?) it does go down it will drag the entire economy down with it.


Edited because I lowballed the price rise in Auckland...I think it might be  a little excessive and possibly bubbly.
« Last Edit: July 12, 2015, 07:46:29 PM by Annamal »

Syonyk

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Re: Anyone buying a home in the near future? Housing prices inflated?
« Reply #18 on: July 12, 2015, 07:37:54 PM »
Detroit has some great bargains on houses!  You can get some for a dollar!

Oh, you don't want to live in Detroit? :p

My wife & I are in the process of buying a home, but it's not exactly where most people want to live - it's where we want to live. :)  And I can work remotely, so we come out ahead with either savings rate or "me working a lot less to raise kids."  Either one.  Not terribly picky.

Most people wouldn't want to live where we do, though, so land is cheap, and housing is cheap.  $140k for 2k sq ft?  Why, yes, please. :)  (yes, 2k sq ft, I'll be working from home, plus we want a nice board game room)