Old world:
A friend of my mother had her mother living with her. No LTC costs, both parents worked, built in babysitter, built in cook, cleaner, grocery shopper and child cop.
New world:
Granny: Wear you boots.
Kid: They're not Gucci.
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COVID and the housing market
- Thread starter mimico_polak
- Start date
Old world:
A friend of my mother had her mother living with her. No LTC costs, both parents worked, built in babysitter, built in cook, cleaner, grocery shopper and child cop.
New world:
Granny: Wear you boots.
Kid: They're not Gucci.
Also kid: Shut up, gramma! Or I'll stick you in a home!
D
Deleted member 50930
Guest
Plus COVID19 further increasing "quantitative" easing and manipulation of CPI
I don't want to be pessimistic but the future looks bleak
?
By squeezing rates, I think they can stop the rise without cratering the prices. That doesn't help the people that are out as prices will hang out well out of reach. It doesn't help the people that are in as they will have much of their equity tied up in an asset that barely appreciates. Maybe that is the most equitable position for all? Nobody makes money on housing any more? It's a tough call. Most of the US housing market is stalled (house prices roughly in line with inflation) but house prices are much lower so they should make up a lot lower percentage of net worth.
Priller
Well-known member
When we first got pre-approved, I was absolutely stunned at how much the charter banks were willing to give us. It was so much I was convinced it was a mistake. Fortunately, a riding buddy is also an excellent broker, and he sat down with us and after going through our situation in detail, suggested we keep our budget to just over half of what we'd been offered. The lesson to me is that the banks know that people will pay their mortgage before any other bills besides basic food, and are happy to bleed every penny of that.
The bit I don't understand is that the banks stand to lose as much as anyone if there's a crash. The reality is, even accounting for insured mortgages, they hold more than a lot of homeowners do in individual houses, so if things take a big tumble, they're underwater with everyone else. Having paying debtors seems like a better plan than a glut of foreclosed properties. Maybe they know they'll be bailed out, so are happy to keep dumping fuel on that fire...
I think most homeowners are stretched thin enough that they are counting on home appreciation as certain as salary income is to fund their HELOC withdrawals.
If the appreciation stops, a stagnant home equity has the same ramifications as a housing crash: inability to service existing debt.
With fears of the inevitable fallout from C19 the banks eased their positions where you could DEFER payments for up to 6 months at the start of all this. However, the interest just kept on going! Guess what happened (to some people I know)...they used that money that they didn't have to pay to the bank, and bought their toys instead. And then were super ****** and complaining ... '******* banks, still charging interest, not fair' lol
Same goes for CERB, I'm ****** because I didn't take it when we didn't qualify. I know plenty of people who 'quit' their jobs because C19 was dangerous, but they'd be super happy to work for cash while they get their CERB also....guess where that went? More toys!
I'm not ****** because CERB went to people that needed it, I'm ****** that people abused it, and I get f'ed because I was honest and could've had 8k of free money! MY MONEY!
Anyway...personally I think the market will crater eventually. My recommendation is keep cash on hand as much as you can in a high interest savings account. Once it does (eventually) there will be a lot of toys, condos, and houses to be had.
moarmoto
Well-known member
There are some ideas that others mentioned that might help, like
1) capital tax gain on primary residence if ownership less than x years
2) limit # of foreign ownership to x
3) higher tax (than current measly one) on vacant property and foreign purchase
4) transparency in bidding process (Aussie model?)
I'm biased, since I'm a buyer, not a RE investor or flipper. But these things sound like it can help with current situation.
Sent from my M2007J20CG using Tapatalk
Yeah the fiction of <2% CPI is starting to wear thin against the insides of people's wallets...
House #1 we were pre-approved for 450 more than we spent. House #2 we were pre-approved for 200 more and were told we could probably push for 400 more. Fack. I was not happy with either mortgage that we actually had. Adding another 400K of debt? No thanks.
I still don't quite understand how they come up with the numbers. I think they probably weight job stability too highly. Other people with similar income but contract instead of full time get approved for half. I don't care who is on your paycheque, I care that you have a history of having a paycheque from somebody. Hustlers make it work regardless of their employer, slackers screw it up regardless of their employer.
I think you are right, banks are just riding the profit side as the know they gov't will bail them out on the downside. They are forced to keep rates low so they do everything they can to drive house prices up to drive gross revenue.
Easy.
When evaluating a stock purchase, do you calculate PE ratio on TTM or forward?
Banks do the same...
Although from the outside, it looks like they're yelling, "DIAMOND HANDS! HODL THE LINE, RETARDS!!11!oneoneone!!"
Still doesn't make sense to me why contract income and full-time income seem to have vastly different weightings.
The problem with enacting any kind of brakes on runaway RE prices is that as more people cross the line to home ownership, their votes and political pressure will be used to keep the gravy train running.
"I just got on the mutha-funkin' train, don't stop it now!!!"
Full time income is more secure. Contract work by definition is not anticipated to stay long term....even though it is often time more than normal full time work.
The people screaming the loudest today to stop destruction of farmland are living on yesterdays farms. Everyone wants the rules changed once they have theirs.
I understand the concept, I don't like the weight involved. Especially if the person can present you will an extended employment history. If you are contract and have worked for 10 different employers in 10 years but show constant income growth and never had a big hole in your employment history, I would not be too concerned. Alternatively if you were contract for the last 5 years with one employer, it is probably the employer playing a game with numbers not actually related to your ability/willingness to work and you can probably get another similar job quickly if for some reason the contract ends.
bigpoppa
Well-known member
I feel like I should have married an indian or maybe asian chick and my life would be so much easier right now
Grandma sitting in the corner and judging you is easier?
Depending on your situation..,,easily done!
bigpoppa
Well-known member
this is why I cant get the kawi financed but a giant mortgage is A-oK!
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