Do you foresee a drop in housing prices in the next 5 years

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Faisal
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Do you foresee a drop in housing prices in the next 5 years

Post by Faisal » Tue Oct 03, 2017 1:38 pm

As the title says do you foresee a drop in housing prices due to prices being too high for new potential home buyers being priced out of the market?

Edit: To clarify I am not asking if there will be another housing market crash, but that a simple supply and demand issue where prices are too high for new entrants so prices may come back down to a "reasonable" price. Or do you expect the prices of homes to increase without any serious corrections?

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by mickeyd » Tue Oct 03, 2017 1:43 pm

To quote Jack Bogle "Nobody knows nothin"
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Faisal
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Faisal » Tue Oct 03, 2017 1:45 pm

I was expecting as much :p Ask a boglehead to forecast is asking to be ridiculed

adamthesmythe
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by adamthesmythe » Tue Oct 03, 2017 1:50 pm

A long time ago interest rates were up near 15% and I was living in Silicon Valley.

You would think that your affordability issue would have caused a massive decrease in prices. It didn't happen. Houses sat on the market. Owners financed mortgages sometimes. People got money from other parents, etc. The way it was described as was "house prices are sticky downwards." Maybe to a large degree because of the unwillingness to recognize a loss (financing a mortgage at a below market rate doesn't really feel like a loss).

So no, I don't think affordability by itself will not cause a significant drop.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Nate79 » Tue Oct 03, 2017 2:11 pm

Maybe but I bought my crystal ball off of ebay.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Texanbybirth » Tue Oct 03, 2017 2:12 pm

No I don't.

WL2034
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by WL2034 » Tue Oct 03, 2017 2:17 pm

I have no idea, but I did come across this headline today which made me wonder.
"Homebuyers rush to riskier mortgages as home prices heat up."
https://www.cnbc.com/2017/10/03/rising- ... gages.html

But then I realize that this is a warning sign from the last bubble, making it easily noticeable. If it were a warning sign for an upcoming bubble, it would pass unnoticed.

Smorgasbord
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Smorgasbord » Tue Oct 03, 2017 2:17 pm

Yes, I am fairly confident that in at least some areas of the country housing prices 5 years from now will be less (possibly significantly less) than they are now. Which areas? Eh, my crystal ball is not that clear.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by mptfan » Tue Oct 03, 2017 2:18 pm

Faisal wrote:
Tue Oct 03, 2017 1:38 pm
As the title says do you foresee a drop in housing prices due to prices being too high for new potential home buyers being priced out of the market?
My crystal ball is in the shop undergoing some major repairs, as soon as I get it back I will answer your question.
I eat risk for breakfast. :)

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Toons » Tue Oct 03, 2017 2:28 pm

Do I foresee a drop in housing prices?
No.
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by KlangFool » Tue Oct 03, 2017 2:36 pm

Faisal wrote:
Tue Oct 03, 2017 1:45 pm
I was expecting as much :p Ask a boglehead to forecast is asking to be ridiculed
If you ask the wrong question, you will never get the right answer!

If you are buying a house, you do not care whether the housing market is up or down. The only thing that matters is the house that you want to buy is at the right price for you.

So, the relevant question is

A) Which house that you are looking to buy at which specific area? Location, location, location.

B) What is the right price for you?

The house around my area is up over the last few years but it is still lower than the peak from 2004/2005. So, how does this information help you? It does not.

I bought my current house at 2012. It was at the right price since the PITI is 20% to 30% than renting the exact house. I did not care how the housing market was doing at that time.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by DVMResident » Tue Oct 03, 2017 3:58 pm

Faisal wrote:
Tue Oct 03, 2017 1:38 pm
As the title says do you foresee a drop in housing prices due to prices being too high for new potential home buyers being priced out of the market?
Could home prices crash? Sure. 'SoCal prices dropped '93~94 ~third and you know the '09 story.
Could the inflated prices continue for a lot longer? Sure. Cheap leverage (see chart) means lots of people aren't priced out of the market. Maybe just the cheap sake BHs are priced out :wink: Check out that median line!

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by denovo » Tue Oct 03, 2017 4:03 pm

Faisal wrote:
Tue Oct 03, 2017 1:45 pm
I was expecting as much :p Ask a boglehead to forecast is asking to be ridiculed
Nobody know nothing. Market timing is folly, applies as much to stocks as to homes. If you believe you can time asset markets, why are you a Boglehead?

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dm200
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by dm200 » Tue Oct 03, 2017 4:05 pm

My guess/opinion is that the answer depends a great deal on the locality.

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Sandtrap
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Sandtrap » Tue Oct 03, 2017 4:13 pm

This is what I foreseee . . . . . . .

Depending on the area, and micro area, "No". There will not be a significant drop in these areas if none at all.
R/E is in a bubble. When will it pop? Who knows. But that is area and region dependent.
R/E is in a stall rather than a bubble, that may or may no last a very long time.
I've often heard this from R/E brokerage offices. But they often say these things.

All the low hanging fruit is bought up by savvy investors with cash in hand and lots of staying power. Other countries, Canada, China money, etc, is getting into the game which sustains the stall. Lot's of overpriced listings from homeowners and investors looking for the gullible. In some areas housing prices will drop as an adjustment as these speculators get a reality check when their listings sit and sit and sit.

Inventory in prime areas is drying up so that will sustain price rises. But, as demographics change what was once a prime area may not be so as new development changes the landscape. Witness unfinished subdivisions and commercial developments. Repurposed buildings.

Developers are finishing or entering into projects that have already been on the board years ago. Look for zoning change requests, permits, etc.
Perhaps a slow rise within this market stall in most of the prime areas.

Super prime areas will always be that way. IE: Hawaii, Scottsdale/Tempe business corridor, etc, etc. Folks with big bucks are more immune to market fluctuation.

IMHO something has to "happen" in the economy to cause housing prices to "drop". A "black swan" event? I hope not.

Disclaimer, this snapshot of the R/E development market will fade in 10, 9, 8, 7, 6, 5, 4, 3, 2, 1. . . . . :shock:
Last edited by Sandtrap on Tue Oct 03, 2017 4:25 pm, edited 3 times in total.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by protagonist » Tue Oct 03, 2017 4:15 pm

Faisal wrote:
Tue Oct 03, 2017 1:45 pm
I was expecting as much :p Ask a boglehead to forecast is asking to be ridiculed
Bogleheads forecast all the time. They just ridicule you when you ask them to forecast something that they don't believe can be forecasted.

And they don't mess around with the easy stuff like five years as you did. They forecast out 10, 20, 30, and more.

You just asked for the wrong forecast. https://www.cnbc.com/2017/03/22/jack-bo ... ecade.html
Last edited by protagonist on Tue Oct 03, 2017 5:28 pm, edited 3 times in total.

bigred77
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by bigred77 » Tue Oct 03, 2017 4:49 pm

I expect housing prices to be local but in aggregate, at the national level, I expect slow and steady gains for the foreseeable future. The millennial generation is huge and more and more of them will eventually want to own property.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by itstoomuch » Tue Oct 03, 2017 5:08 pm

Depends :| .
Depends on the the local planning committees:. As in our acreage :x .
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by hale2 » Tue Oct 03, 2017 5:42 pm

Try to ignore the mocking (which has become way too prevalent over the last couple of years) and read Sandtrap's response. He is a real estate expert and provided an excellent, informed response. I always pay close attention when he responds to a real estate question.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by aqan » Tue Oct 03, 2017 5:44 pm

A fools chase. If you're looking to buy a house buy it at your first opportunity. The longer you wait more anxious you'll be and end up buying at the market top.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by KlangFool » Tue Oct 03, 2017 5:52 pm

bigred77 wrote:
Tue Oct 03, 2017 4:49 pm
I expect housing prices to be local but in aggregate, at the national level, I expect slow and steady gains for the foreseeable future. The millennial generation is huge and more and more of them will eventually want to own property.
bigred77,

But, they do not like existing house design and location. They behave differently from the previous generation. So, it would not help existing home and location.

KlangFool

hale2
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by hale2 » Tue Oct 03, 2017 6:08 pm

KlangFool wrote:
Tue Oct 03, 2017 5:52 pm
bigred77 wrote:
Tue Oct 03, 2017 4:49 pm
I expect housing prices to be local but in aggregate, at the national level, I expect slow and steady gains for the foreseeable future. The millennial generation is huge and more and more of them will eventually want to own property.
bigred77,

But, they do not like existing house design and location. They behave differently from the previous generation. So, it would not help existing home and location.

KlangFool
Actually, as they are starting families they are starting to go to the family areas, although I agree not to the extent of previous generations. And earlier generations didn't like the existing housing designs either. That's remodeling and tearing down and rebuilding are for.

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Pajamas
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Pajamas » Tue Oct 03, 2017 6:14 pm

Housing markets are local, so it depends on what area you are looking at. Some housing prices have already dropped in some areas. In some areas, housing prices never fully recovered from the 2007-2008 financial crisis and its aftermath.

Olemiss540
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Olemiss540 » Tue Oct 03, 2017 7:42 pm

Nate79 wrote:
Tue Oct 03, 2017 2:11 pm
Maybe but I bought my crystal ball off of ebay.
Did you shake it first? That's how I got mine to work.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by kjvmartin » Tue Oct 03, 2017 7:59 pm

Not in my lifetime.

Here's why. Folks with cash/investors purchased cheap income stream houses by the dozen during the crash. They have made enormous profits collecting rent over the last 10 years. They are greedy. If prices fall, they'll buy the properties. This should keep a pretty solid price floor in most middle class real estate markets.

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DaftInvestor
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by DaftInvestor » Tue Oct 03, 2017 8:49 pm

"Come back down to a reasonable price"?
Can you define reasonable and what makes you say today's prices are unreasonable?

runner540
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by runner540 » Tue Oct 03, 2017 10:54 pm

Faisal,

Sorry that you got so much sarcasm about crystal balls. I think there will be a downturn in housing in the next 5 years. It's been hot for years, and 7% annual price growth isn't sustainable based on income of end users of housing. It's being driven by speculation, low interest rates, and ever looser lending. To make this actionable on whether to buy or rent right now, I would recommend you read the following resources and make up your mind about the market where you live.

0. Boots on the ground research. Look for how many places have reduced prices. You can go to open houses and chat with realtors. Where I live, they started telling me 2 months ago that the top end of the market is softening and buyers are more price conscious. Chat with people buying houses and mortgage bankers you know.

1. FAU buy vs rent index: suggests that prices in Denver, Dallas and Houston are out of whack with fundamentals and you're better off renting for now. https://business.fau.edu/departments/fi ... nd-graphs/

2. American Enterprise Institute's Housing Risk Index. Provides context for how lending has gotten riskier every month, and how low down payments and high Debt to Income ratios permitted by lenders is driving house prices up.
http://www.housingrisk.org
Metro level data for Texas and California is included.

3. Read this compilation of headlines from California 2 cycles ago and see where you think we are now. http://www.rntl.net/history_of_a_housing_bubble.htm

4. There are several blogs out there that are very bearish on housing. You'll find them easily.

5. When we start seeing goofy new "innovative" loans to help marginal buyers get into a house, that's a warning sign that demand is slowing down. In the last week, The WSJ reported that Lennar Homes is paying off buyers' student loans, but not calling this a "discount". That would look bad...
Also in the last week, the NYT reported a story about a company that provides a down payment for you, but requires that you rent "your" new home continually on Air BnB...Smells like Uber's car leasing plan that went horribly wrong.

here are some factors that could cause prices to come down:
-a lot of supply hits the market due to people who can't make their payments because they stretched too far
-interest rates go up, resulting in potential owners having to offer less to keep the mortgage payment equal.
-lenders start requiring real down payments again. Median down payment is ~5%!
-rent goes flat or down, reducing demand to buy houses.
-
Last edited by runner540 on Tue Oct 03, 2017 11:08 pm, edited 1 time in total.

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Gamma Ray
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Gamma Ray » Tue Oct 03, 2017 10:59 pm

High interest, buyers market, especially those with cash.
Low interest, sellers market, no need to put too much down.
Is it not? Is there a data on this?

basspond
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by basspond » Wed Oct 04, 2017 4:25 am

Don't foresee drop but maybe more stagnation.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by 3feetpete » Wed Oct 04, 2017 6:14 am

Too many variables to make a prediction although many will try. It will be interesting to see what effect if any the presidents tax plan will have. Eliminating the state and local tax deduction could make home ownership less attractive in areas where these taxes are high. On the other hand, a booming economy and rising wages will make it more attractive. There is probably a lot of pent up demand. Some day the millennials will want to move out of their parents basement.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by djpeteski » Wed Oct 04, 2017 6:46 am

RE and credit markets are tied hand-in-hand. Most people don't look at the price of a home, but how much their monthly payment will be, much like that of a car. If credit tightens real estate will drop.

As many have said, RE is locally driven, and that is demonstrated close to me.

There is a non-desirable area that borders on my development. That non-desirable area is mostly mobile homes and lower income folks. Never mind that the crime rate is pretty low. As such home prices in my development suffer, and even those that are some distance away but are zoned for the same high school. Never mind that high school is rated very highly and has very good opportunities for sports and honors classes. A nearby high school is so overcrowded many kids never have the opportunity to participate in sports or take honors classes or even have a locker.

The next "desirable" neighborhood is being built now, it borders on the county dump and has a pictures view of the county power plant. It is very close to a prison. However, it is zoned for the over priced high school so the prices will be high. Okay, whatever.

Real estate is very much driven by emotions both collectively and individually.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Faisal » Wed Oct 04, 2017 12:25 pm

Thank you all for your comments and the information/links provided. Its a wealth of information that I will definitely read through. I just started getting interested in the US stock and real estate market after living 6 odd years in war torn countries and have settled down in life. Thus information/background/history is interesting. I like to research a subject before committing myself too it.

Also with an economics degree I firmly believe in the cyclical nature of the economy and that the past years of high growth will eventually lead to another recession. I doubt any country has actually achieved 10 plus years of growth without some hiccups and bubbles along the way. And since I am a new father I thought I would read up on the matter and get the opinion of those of you here.

I was also wondering for those who have the time to read this - https://www.extension.harvard.edu/insid ... ing-bubble

What do you think of the above link? And where we are currently in the real estate market. The link makes a lot of sense to me, with significant upward pressure on rents in my area of living. Not to mention there has been a deflation in the higher 1/3rd of the market in my tri-state area. I live in a HCOL area with a lot of foreign investors.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by LeSpy » Wed Oct 04, 2017 12:32 pm

That is way too difficult to determine.

I think there will be opportunities in various metro areas/regions in the long run. Local real estate prices don't go up in a straight line, they zig zag in cycles like everything else.

The economy has largely been deregulated over the past generation and is prone to crises that present opportunities/crashes/declines.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by runner540 » Wed Oct 04, 2017 1:02 pm

Faisal wrote:
Wed Oct 04, 2017 12:25 pm
Thank you all for your comments and the information/links provided. Its a wealth of information that I will definitely read through. I just started getting interested in the US stock and real estate market after living 6 odd years in war torn countries and have settled down in life. Thus information/background/history is interesting. I like to research a subject before committing myself too it.

Also with an economics degree I firmly believe in the cyclical nature of the economy and that the past years of high growth will eventually lead to another recession. I doubt any country has actually achieved 10 plus years of growth without some hiccups and bubbles along the way. And since I am a new father I thought I would read up on the matter and get the opinion of those of you here.

I was also wondering for those who have the time to read this - https://www.extension.harvard.edu/insid ... ing-bubble

What do you think of the above link? And where we are currently in the real estate market. The link makes a lot of sense to me, with significant upward pressure on rents in my area of living. Not to mention there has been a deflation in the higher 1/3rd of the market in my tri-state area. I live in a HCOL area with a lot of foreign investors.
This is what Harvard got so wrong in 2006: https://www.salon.com/2006/06/13/thehousingbubbleblog/

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by an_asker » Wed Oct 04, 2017 1:27 pm

Faisal wrote:
Tue Oct 03, 2017 1:38 pm
As the title says do you foresee a drop in housing prices due to prices being too high for new potential home buyers being priced out of the market?

Edit: To clarify I am not asking if there will be another housing market crash, but that a simple supply and demand issue where prices are too high for new entrants so prices may come back down to a "reasonable" price. Or do you expect the prices of homes to increase without any serious corrections?
Yes, if you want an answer to the title question alone.

I don't have the crystal ball that tells which zip codes the answer will be valid for though ;-)

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by an_asker » Wed Oct 04, 2017 1:28 pm

runner540 wrote:
Tue Oct 03, 2017 10:54 pm
Faisal,

Sorry that you got so much sarcasm about crystal balls.[...]
Whoops! :oops:

In my defense, I did not read the other replies before responding!

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by abuss368 » Wed Oct 04, 2017 9:21 pm

None of us has any idea. Trying to predict any market is useless and a waste of time. Some very good real estate investors I know have said the supply is moderating locally and they are building capital. Once the next downturn occurs, they will invest capital.

Best.
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by itstoomuch » Wed Oct 04, 2017 11:39 pm

Five years is a loonng time.
I challenge anyone to give a 6 month predictive, average 30 year mortgage rate, today?

How about 3 months, Jan 5, 2018?
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by b.lock » Wed Oct 04, 2017 11:58 pm

WL2034 wrote:
Tue Oct 03, 2017 2:17 pm
But then I realize that this is a warning sign from the last bubble, making it easily noticeable. If it were a warning sign for an upcoming bubble, it would pass unnoticed.
Wise words. Very True.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by jadd806 » Thu Oct 05, 2017 9:49 am

bigred77 wrote:
Tue Oct 03, 2017 4:49 pm
I expect housing prices to be local but in aggregate, at the national level, I expect slow and steady gains for the foreseeable future. The millennial generation is huge and more and more of them will eventually want to own property.
I am in my mid-20's. Solidly a millennial. All of my peers who I see buying houses have no business doing so. Every single one that I am aware of is paying PMI. The most common thing that I hear when they talk about getting rid of the PMI is that they are "going to refinance in ~5 years after I've built some equity." They are not planning to make extra payments towards their mortgage to build this equity. Almost universally, they seem to be banking on price appreciation in order to get rid of their PMI.

The most common reasons that I have heard for buying a house seem to be pretty evenly split between fear of getting priced out of the market or it being a "good investment." This is in an area where a house listed for $400k will sit on the market for a few hours before being sold for $430k, cash.

I do not have much experience with real estate, but the way my fellow millennials are approaching real estate seems largely delusional to me. Going into real estate and counting on a continuation of the insane growth that we have seen in the past few years does not seem like the foundation of a healthy market.

People can only afford to allocate so much of their income to housing. There has to be some sort of breaking point that one would logically expect to first effect working class neighborhoods, as opposed to cities with a preponderance of very high income jobs. I would never dream of "market timing" with stocks, but real estate feels different to me. It's a one time purchase that cannot be dollar cost averaged. I will continue to rent and sit on the sidelines. With a 50% savings rate, I have much more shock tolerance than my peers. We will see who "breaks" first. :twisted:

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Pajamas » Thu Oct 05, 2017 10:01 am

jadd806, I agree with what you are saying and will also add that the fixation on buying rental properties or even becoming an "accidental" landlord is a related problem.

I do not see firsthand the same "irrational exuberance" now that I saw during the last big bubble, when there were many apartments turning over and multiple open houses in my building every weekend with so many prospective buyers attending that real estate agents had to bring in extra personnel to manage them. There is also not nearly as much talk about a bubble.

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Re: Do you foresee a drop in housing prices in the next 5 years

Post by bigred77 » Thu Oct 05, 2017 11:26 am

jadd806 wrote:
Thu Oct 05, 2017 9:49 am
bigred77 wrote:
Tue Oct 03, 2017 4:49 pm
I expect housing prices to be local but in aggregate, at the national level, I expect slow and steady gains for the foreseeable future. The millennial generation is huge and more and more of them will eventually want to own property.
I am in my mid-20's. Solidly a millennial. All of my peers who I see buying houses have no business doing so. Every single one that I am aware of is paying PMI. The most common thing that I hear when they talk about getting rid of the PMI is that they are "going to refinance in ~5 years after I've built some equity." They are not planning to make extra payments towards their mortgage to build this equity. Almost universally, they seem to be banking on price appreciation in order to get rid of their PMI.

The most common reasons that I have heard for buying a house seem to be pretty evenly split between fear of getting priced out of the market or it being a "good investment." This is in an area where a house listed for $400k will sit on the market for a few hours before being sold for $430k, cash.

I do not have much experience with real estate, but the way my fellow millennials are approaching real estate seems largely delusional to me. Going into real estate and counting on a continuation of the insane growth that we have seen in the past few years does not seem like the foundation of a healthy market.

People can only afford to allocate so much of their income to housing. There has to be some sort of breaking point that one would logically expect to first effect working class neighborhoods, as opposed to cities with a preponderance of very high income jobs. I would never dream of "market timing" with stocks, but real estate feels different to me. It's a one time purchase that cannot be dollar cost averaged. I will continue to rent and sit on the sidelines. With a 50% savings rate, I have much more shock tolerance than my peers. We will see who "breaks" first. :twisted:
I don't dispute anything your saying. I just want to add "... just like every other generation who came before them" to the end of your first paragraph :mrgreen:

Millennials are just now starting to partner up, starting to have children with an increased frequency, starting to reap the benefits of a dual income household, starting to advance their own careers, etc. Its just happening after a delay compared to their parents and grandparents generations. Just give it time. They aren't going to raise a family of 4 in a shared 2 bedroom downtown condo with their buddies :mrgreen:

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Pajamas
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Pajamas » Thu Oct 05, 2017 12:06 pm

More evidence that the top of the market has peaked locally, although less expensive housing is still in great demand with prices that reflect the demand.

https://www.nytimes.com/2017/10/04/real ... reats.html

Real estate markets are very local and are even be stratified within a local market.

clutchied
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by clutchied » Thu Oct 05, 2017 4:33 pm

Yes! wait... No!

NotWhoYouThink
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by NotWhoYouThink » Thu Oct 05, 2017 4:43 pm

I don't see the crystal ball answers as sarcastic, I see them as instructive. It's hard to admit that there are things that are unknowable, but important to accept that fact.

Many people are able and willing to give you an answer about the forecast for housing prices, in general or in a specific area. Some will be right on the money. Some will be wildly off. It won't be a factor of who is smarter or better informed, it will be a factor of who made a luckier guess. There are some smart and well-informed people on this forum. And your guess may be better than their considered analysis. Or not.

acanthurus
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by acanthurus » Thu Oct 05, 2017 5:12 pm

Removed
Last edited by acanthurus on Tue Oct 31, 2017 6:36 pm, edited 1 time in total.

Dottie57
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Dottie57 » Thu Oct 05, 2017 8:30 pm

Not like the one we saw during the financial crisis.

AlphaLess
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by AlphaLess » Thu Oct 05, 2017 8:31 pm

Faisal wrote:
Tue Oct 03, 2017 1:38 pm
As the title says do you foresee a drop in housing prices due to prices being too high for new potential home buyers being priced out of the market?

Edit: To clarify I am not asking if there will be another housing market crash, but that a simple supply and demand issue where prices are too high for new entrants so prices may come back down to a "reasonable" price. Or do you expect the prices of homes to increase without any serious corrections?
Please define:
- housing market crash,
- back down to "reasonable" price.

AlphaLess
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by AlphaLess » Thu Oct 05, 2017 8:33 pm

dm200 wrote:
Tue Oct 03, 2017 4:05 pm
My guess/opinion is that the answer depends a great deal on the locality.
Excellent point.

Valuethinker
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Re: Do you foresee a drop in housing prices in the next 5 years

Post by Valuethinker » Fri Oct 06, 2017 6:26 am

I believe that in flood and hurricane prone areas prices will stagnate or drop.

The next Irma may go right through Miami, at which point the realization will drop that a city at hurricane latitudes, at sea level, on seawater permeable rock, is not a place to own fixed assets. The sentiment will shift from bullish to bearish as the penny drops.

Something similar may be true of lower Manhattan and parts of Brooklyn Queens the next time a Sandy blows thru.

There may be similar effects in Norfolk Va Charleston SC and Boston etc but I am less familiar w the threats to those cities.

On purely financial criteria Toronto Vancouver BC Sydney Melbourne Auckland all look more overvalued than USA at peak of bubble in 2006. And even more indebted. I think all of those could drop 50 per cent in next 5 to 10 years. A lot sooner than that in Canada.

On New York London San Francisco I am less sure. They are very expensive but land supply issues and the success of key industries provide a justification for that.

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