bostonbubble.com Forum Index bostonbubble.com
Boston Bubble - Boston Real Estate Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

 
Go to: Boston real estate bubble fact list with references
More Boston Bubble News...
DISCLAIMER: The information provided on this website and in the associated forums comes with ABSOLUTELY NO WARRANTY, expressed or implied. You assume all risk for your own use of the information provided as the accuracy of the information is in no way guaranteed. As always, cross check information that you would deem useful against multiple, reliable, independent resources. The opinions expressed belong to the individual authors and not necessarily to other parties.

Am I stupid for not buying a house now???
Goto page 1, 2, 3, 4, 5, 6, 7, 8, 9, 10  Next
 
Post new topic   Reply to topic    bostonbubble.com Forum Index -> Greater Boston Real Estate & Beyond
View previous topic :: View next topic  
Author Message
Bostonlilypad
Guest





PostPosted: Wed Feb 07, 2018 2:36 pm GMT    Post subject: Am I stupid for not buying a house now??? Reply with quote

Hey all! I’ve been following this forum and the real estate market since the crash. I was in my mid-20s in 2011 and didn’t have enough money to buy, and ever since I did have enough of a down payment the market has been too expensive for me. I know it’s an insane time to buy a house with the uncertainty of the economy and high RE prices.

BUT as I read more and more there’s a threat of hyperinflation and the impending rate hikes with quantitative tightening this year. With hyperinflation and rate increases will that make RE even more unaffordable around here even if prices decrease? The difference in monthly payments between a 4% mortgage and a 7% one is massive - I had no idea until I actually calculated it yesterday. Also with the threat of hyperinflation my hard earned savings won’t go as far.

I’d love to hear all your opinions, I was strickly in the “this is a horrible time to buy” camp until thinking about these other factors.
Back to top
Guest






PostPosted: Wed Feb 07, 2018 3:24 pm GMT    Post subject: Re: Am I stupid for not buying a house now??? Reply with quote

Bostonlilypad wrote:
Hey all! I’ve been following this forum and the real estate market since the crash. I was in my mid-20s in 2011 and didn’t have enough money to buy, and ever since I did have enough of a down payment the market has been too expensive for me. I know it’s an insane time to buy a house with the uncertainty of the economy and high RE prices.

BUT as I read more and more there’s a threat of hyperinflation and the impending rate hikes with quantitative tightening this year. With hyperinflation and rate increases will that make RE even more unaffordable around here even if prices decrease? The difference in monthly payments between a 4% mortgage and a 7% one is massive - I had no idea until I actually calculated it yesterday. Also with the threat of hyperinflation my hard earned savings won’t go as far.

I’d love to hear all your opinions, I was strickly in the “this is a horrible time to buy” camp until thinking about these other factors.


Even if your scenario- strong inflation with commensurate increases in the 30-year mortgage- occurs (which is far from certain), your personal situation likely is the key. Your wage could inflate faster than the real-estate market, for example, so waiting might be beneficial. On the flip side, if you know that you will be in an economic and personal position to stay in whatever house you purchase now for 10 years, there is a high likelihood that you will not lose nominally. The last two cycles in Boston took just about 10 years to recover from the absolute peak.

Seems like some folks here worry a lot about a repeat of stagflation. Stagnant wages with increasing interest rates would put a real bind on home affordability. Again, though, if you are fortunate enough to be in a position to know that you will be able/willing to stay put for a while, you'll do OK. I guess it depends on what your may driver for purchasing is- investment vs. other considerations- and whether or not you can find a place in which you would enjoy living.
Back to top
Bostonlilypad
Guest





PostPosted: Wed Feb 07, 2018 4:32 pm GMT    Post subject: Thank you Reply with quote

Thanks for the reply!! I would plan on keeping the house for 10 years, or most likely forever and renting it out if I move. I currently rent but my rent is dirt cheap at $900 in Newton for a 1 bedroom, but my landlord is elderly and her children may sell the home up from under me, she lives on the 1st floor. I’m in my mid-30s and I’m ready to buy BUT I want to be very smart about it too. I work at a tech company so I’m not sure if my wages will increase with inflation. I guess I was just so shocked when I looked and say a 400k mortgage at today’s rates would really be more like a 250k at a 7-8%ortgage rate - I don’t know what type of purchasing power I’ll have even if houses drop 20% here Shocked
Back to top
Guest






PostPosted: Wed Feb 07, 2018 7:55 pm GMT    Post subject: Reply with quote

Keep saving your deposit and paying cheap rent. As rates rise you can find a decent return somewhere on your cash. After rates rise house prices will flatten then fall. Use a larger deposit to buy cheap, rather than a small deposit to buy high. Plus, these prices are STUPID high. The sellers don't deserve the money and the only people dumb enough to buy are foreigners or uneducated Americans.
Back to top
bostonlilypad
Guest





PostPosted: Wed Feb 07, 2018 10:23 pm GMT    Post subject: thanks again Reply with quote

Anonymous wrote:
Keep saving your deposit and paying cheap rent. As rates rise you can find a decent return somewhere on your cash. After rates rise house prices will flatten then fall. Use a larger deposit to buy cheap, rather than a small deposit to buy high. Plus, these prices are STUPID high. The sellers don't deserve the money and the only people dumb enough to buy are foreigners or uneducated Americans.


thanks, Guest! You're just confirming what I wanted to do before I started getting worried about rates rising - I have a very large deposit saved up and I think I'll just keep saving for when prices come down and hopefully I can pick up 1-2 rental houses at the same time for some investments - being patient is really hard though! haha
Back to top
Guest






PostPosted: Thu Feb 08, 2018 2:16 pm GMT    Post subject: Reply with quote

Quote:
thanks, Guest! You're just confirming what I wanted to do before I started getting worried about rates rising - I have a very large deposit saved up and I think I'll just keep saving for when prices come down and hopefully I can pick up 1-2 rental houses at the same time for some investments - being patient is really hard though! haha


Good for you for using your brain. These "pro" buyers right now are the same type of fools that bought late cycle 2004-2007 and we all paid the price for bailing them and the banks out. This time the Fed Reserve isn't coming to the rescue. Given Jerome Powell an all the right wing hawk replacements at the Fed, I am very confident they will let free markets start to become free again-unless there is a complete meltdown. A correction of 30% is not a complete meltdown, but only a cleansing of the foolish buyers. This time they'll get what they deserve.
Back to top
bostonlilypad
Guest





PostPosted: Thu Feb 08, 2018 6:45 pm GMT    Post subject: I hope youre right Reply with quote

Anonymous wrote:
Quote:
thanks, Guest! You're just confirming what I wanted to do before I started getting worried about rates rising - I have a very large deposit saved up and I think I'll just keep saving for when prices come down and hopefully I can pick up 1-2 rental houses at the same time for some investments - being patient is really hard though! haha


Good for you for using your brain. These "pro" buyers right now are the same type of fools that bought late cycle 2004-2007 and we all paid the price for bailing them and the banks out. This time the Fed Reserve isn't coming to the rescue. Given Jerome Powell an all the right wing hawk replacements at the Fed, I am very confident they will let free markets start to become free again-unless there is a complete meltdown. A correction of 30% is not a complete meltdown, but only a cleansing of the foolish buyers. This time they'll get what they deserve.


I hope you're right so I can start on my homeownership dream Smile
Back to top
Guest






PostPosted: Fri Feb 09, 2018 2:31 am GMT    Post subject: Re: Thank you Reply with quote

Bostonlilypad wrote:
Thanks for the reply!! I would plan on keeping the house for 10 years, or most likely forever and renting it out if I move. I currently rent but my rent is dirt cheap at $900 in Newton for a 1 bedroom, but my landlord is elderly and her children may sell the home up from under me, she lives on the 1st floor. I’m in my mid-30s and I’m ready to buy BUT I want to be very smart about it too. I work at a tech company so I’m not sure if my wages will increase with inflation. I guess I was just so shocked when I looked and say a 400k mortgage at today’s rates would really be more like a 250k at a 7-8%ortgage rate - I don’t know what type of purchasing power I’ll have even if houses drop 20% here Shocked


You have such cheap rent that it makes no sense to buy. Keep renting.
Back to top
Guest






PostPosted: Fri Feb 09, 2018 3:44 am GMT    Post subject: Reply with quote

What is your current salary? mid 30's in tech means your wages WILL go up ONLY and ONLY if keep increasing your skill level. If you become too stale or out of date, watch your back for out-sourcing. But you are in full control of your career if you study and work hard.

Eventually u will start a family and good schools and safe area will become a bigger priority than squeezing best deal out of a house. BTW, how do you like living in Newton? fixer uppers in the mid 600's pop up now and again...
Back to top
Guest






PostPosted: Fri Feb 09, 2018 12:16 pm GMT    Post subject: Re: Am I stupid for not buying a house now??? Reply with quote

[quote="Anonymous"]
Bostonlilypad wrote:


BUT as I read more and more there’s a threat of hyperinflation and the impending rate hikes with quantitative tightening this year. With hyperinflation and rate increases will that make RE even more unaffordable around here even if prices decrease? The difference in monthly payments between a 4% mortgage and a 7% one is massive - I had no idea until I actually calculated it yesterday. Also with the threat of hyperinflation my hard earned savings won’t go as far.



There's not going to be hyperinflation in the US. Buyers will just switch to adjustable rate mortgages as rates go higher and refinance to fixed rate mortgages when the economy tanks and the Fed drops rates back down to 0. You want to buy after the economy tanks. The people who lose their jobs and can't find a job will lose their houses to foreclosure. The bad news is that the foreclosure process in MA takes 2-3 years now. You might be lucky and get a foreclosure condo/house in Newton for 20% discount.
Back to top
Guest






PostPosted: Fri Feb 09, 2018 10:55 pm GMT    Post subject: Re: Am I stupid for not buying a house now??? Reply with quote

Anonymous wrote:
The bad news is that the foreclosure process in MA takes 2-3 years now. You might be lucky and get a foreclosure condo/house in Newton for 20% discount.


What changed exactly to make this a 2-3 year process?
Back to top
Guest






PostPosted: Sat Feb 10, 2018 1:58 am GMT    Post subject: Reply with quote

Lets use stats from the last collapse (2008-2011) to help answer.

If you are eyeing a place in a town with poor schools or over hour commute, I would say the risk/reward is tilted towards waiting.

However, if you want a good school district the answer is not so clear. I was watching Newton home prices during the collapse.. I thought I could finally watch the prices collapse their and buy something. Wrong

I watched prices drop around 10% with the quality of inventory getting worse. More than 10% and the houses were snapped up, forclosures around 15% off but again were snapped up VERY quickly.

Essentially you have 2 types of people living there
1) live for the schools. for the kids, they will ramen noodle daily just to stay if need be
2) seniors who paid off the house decades ago, set in their ways and have no intention of moving

the sellers were:
seniors who wanted to retire, but could ride out because they didnt really need to sell. over leveraged buyers and speculators. Lack of condos kept the speculators out...

Looking back at what happened in hindsight is really useful to know what might happen again
Back to top
Guest






PostPosted: Mon Feb 12, 2018 3:25 pm GMT    Post subject: Reply with quote

This time the correction will be different. It will be real. Last time was fake because of Global Central banks and QE. That will never happen again in our life times, and I caution those that think Jay powell's fed will come to the rescue if the markets tank. Won't happen.
Happy shopping
Back to top
guest
Guest





PostPosted: Mon Feb 12, 2018 7:26 pm GMT    Post subject: yep Reply with quote

Anonymous wrote:
This time the correction will be different. It will be real. Last time was fake because of Global Central banks and QE. That will never happen again in our life times, and I caution those that think Jay powell's fed will come to the rescue if the markets tank. Won't happen.
Happy shopping


Yeeepppppp! How are they going to help if the market crashes soon and the interest rates are still at zero? Not much left to help with...unfortunately people and the govt will never learn and it will happen again and again
Back to top
Guest






PostPosted: Mon Feb 12, 2018 10:17 pm GMT    Post subject: Reply with quote

Anonymous wrote:
This time the correction will be different. It will be real. Last time was fake because of Global Central banks and QE. That will never happen again in our life times, and I caution those that think Jay powell's fed will come to the rescue if the markets tank. Won't happen.
Happy shopping


Oh, this time the great pumpkin will be real too. Powell actually voted for QE. He will do the same when the next time comes.
Back to top
Display posts from previous:   
Post new topic   Reply to topic    bostonbubble.com Forum Index -> Greater Boston Real Estate & Beyond All times are GMT
Goto page 1, 2, 3, 4, 5, 6, 7, 8, 9, 10  Next
Page 1 of 10

 
Jump to:  
You can post new topics in this forum
You can reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present, bostonbubble.com.
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group