Housing Prices..hmm

[73Z L92]

I think its hit and miss for some younger folks these days. I worked for manufacturing company for over 36 years. Most of the younger folks I worked with were pretty darn sharp. I have know idea if they lived pay check to pay check. I suspect some did. A small part of them weren't so sharp and typically didn't last too long. They were so good at keeping me up to date with all the technical changes over the years. I can't tell you how many times these younger folks helped me understand how this new device would make the customers machine better so I could do a proper sales presentation.
As said above I do see some younger folks with newer cars/trucks, huge wake board boats and other toys and wonder how they do it. But not any of my business.

 

[76z28]

I think its hit and miss for some younger folks these days. I worked for manufacturing company for over 36 years. Most of the younger folks I worked with were pretty darn sharp. I have know idea if they lived pay check to pay check. I suspect some did. A small part of them weren't so sharp and typically didn't last too long. They were so good at keeping me up to date with all the technical changes over the years. I can't tell you how many times these younger folks helped me understand how this new device would make the customers machine better so I could do a proper sales presentation.
As said above I do see some younger folks with newer cars/trucks, huge wake board boats and other toys and wonder how they do it. But not any of my business.

See, but then I think back to my parents and realize they were doing the same thing when they were my age(had a Travel trailer, motorcycles, nice house, etc) so I think it's just perspective. I think part of today is also what they want to afford versus what I want to afford and that might blur my thoughts on what's going on around me in that sense.

 

[TommyRS70]

Yeah, it feels like a scam, but here's the thing... property taxes are some of the most local-into-local taxes that get paid. They go mostly to the county/city budget, so your friendly neighborhood policemen, firemen, teachers, bus drivers, etc are getting paid out of that. A little bit to infrastructure here and there, too.

If the amount is the issue, get involved with your local politics- show up at budget meetings, ask them to put costs out front in plain english for people who don't politic for a living, etc.

...and at 65 , there's the homestead reduction act to lower your tax liability...

 

[tom3]

My deal since I ever had a dollar in wages was to stay out of debt as humanly possible. A necessary evil in some cases but that policy has worked out real well over the years and losing a job wasn't the end of the world in a couple cases. A huge house payment for decades would keep me up at night.

 

[Jimmac]

where I work, they don't pay for jury duty, covid etc. if you have vacation or sick time, you can use pto to make up your hours. I was out 8 days with covid a couple weeks back. Felt good not having to worry about wasting my pto for a stupid unexpected sickness. I kept the vacation time to use when I want to use my time off. The boss used to ask if I needed to use vacation hours whenever my time was short during the week. He doesn't bother asking any more.
My wife and I always tried not to live above our means. if we want something, we save for it, if we don't need anything we still save for a rainy day. jim

 

[ssupercoolss]

My wife and I always tried not to live above our means.

I think this needs to be tattooed on most people so they see it everyday. An acquaintance of mine with like 8 kids, lived so far beyond his means......i mean it wasnt hard to see it was going to be a problem at some point. Just the house he somehow managed to get a mortgage for had to put him with nothing left at the end of the month. he got injured at one of his part time jobs, thus enacting the "go fund me" campaign. I have such a hard time with that to begin with, and maybe im a huge a-hole for saying it, but what ever, the icing on the cake was when his work-age son still living at home, was on facebook flaunting his new tattoo.

 

[aviator2007]

ssuprecoolss I just saw a similar thing happen with a co-worker over the past few years, thankfully she left us. This next bit is hard to imagine but I swear it's true. She and her husband moved in with her parents to "help" them and not long after that their two adult children moved in and one of the adult children had 2 young kids. So literally four generations under one roof. The couple with kids managed to have two more over the next few years. Not a one of these people worked a true full-time job other than my co-worker. After several years their behavior ran the parents out of their own home. The parent's eventually needed to sell their home to get the equity out so she, her kids and grandkids moved to Florida. They were running out of money after the move, none of them still worked anything but a gig job part time, so the daughter started a hard luck story go fund me page. They blamed liberal politics for their woes yet they were on welfare and have been for more than a decade. Then literally the next day she was posting pictures on her FB page their trip that day to Disney World with the entire family. Such a sense of entitlement none of them willing to work and support their own families. I'll keep my own problems, maintain my work ethic and do my best to live within my means.

 

[tom3]

And those last two posts, those pictures were probably posted using their thousand dollar iPhones.

 

[8pack]

Circling back to the original question.......The housing market will cool and retreat. As we move into September through February Prices will trend down mostly, certain markets will lag and the hot markets will probably just level off.

Bidding wars will be far less common, and people will find themselves cutting prices as houses stay on the market longer. That won't directly translate to falling prices necessarily, but it will take the peak off some of the irrationality.

As mortgage rates rise, and they will, the cost of money will start to get in the way of some of the mid to higher value markets. Rates were around 3% for a 30 year fixed a year ago for those with top credit. Today they are 5.75% as I write this. That is an additional carrying cost of $162/month/$100k in borrowed money. That's a 38% increase in carrying costs. Add cost of insurance which is going up and increased taxes on the increased value of the home and that can add up pretty quickly. If taxes and insurance both go up $100/month due to higher values that is almost $400/month more.

The current national average for a mortgage loan is $460k. So the increased carrying costs from just over a year ago are potentially close to $1k /month. That will definitely start to slow the market and if interest rates continue to climb even the mid to upper borrowers will start to get pinched....

So my guess is the spring sales market next year will be down about 10% in prices and the big question is what will interests rates be? So buy now with rates where they are or wait until prices come down a bit and risk rates being higher? From a cash flow perspective it is a but of a multidimensional decision with falling prices against rising rates. The positive side of high rates is if they bring home prices down and then rates ultimately drop you can always refinance.

My 2 pennies for the day. Let's look back here in May of next year and see what I got right......

 

[76z28]

Circling back to the original question.......The housing market will cool and retreat. As we move into September through February Prices will trend down mostly, certain markets will lag and the hot markets will probably just level off.

Bidding wars will be far less common, and people will find themselves cutting prices as houses stay on the market longer. That won't directly translate to falling prices necessarily, but it will take the peak off some of the irrationality.

As mortgage rates rise, and they will, the cost of money will start to get in the way of some of the mid to higher value markets. Rates were around 3% for a 30 year fixed a year ago for those with top credit. Today they are 5.75% as I write this. That is an additional carrying cost of $162/month/$100k in borrowed money. That's a 38% increase in carrying costs. Add cost of insurance which is going up and increased taxes on the increased value of the home and that can add up pretty quickly. If taxes and insurance both go up $100/month due to higher values that is almost $400/month more.

The current national average for a mortgage loan is $460k. So the increased carrying costs from just over a year ago are potentially close to $1k /month. That will definitely start to slow the market and if interest rates continue to climb even the mid to upper borrowers will start to get pinched....

So my guess is the spring sales market next year will be down about 10% in prices and the big question is what will interests rates be? So buy now with rates where they are or wait until prices come down a bit and risk rates being higher? From a cash flow perspective it is a but of a multidimensional decision with falling prices against rising rates. The positive side of high rates is if they bring home prices down and then rates ultimately drop you can always refinance.

My 2 pennies for the day. Let's look back here in May of next year and see what I got right......

I like that perspective.... makes it even seem more crazy!