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High Housing Prices

Discussion in 'Personal Finance' started by anotherdevilsadvocate, May 8, 2016.

  1. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Do house/apartment prices seem to keep going up? Let's talk about it in this thread.

    The problem may be that more investors are putting their money into real estate than stocks. This is the result of negative interest rates. Investors "interpret such extreme policy as a sign of crisis with no predictable outcome" (http://www.bloomberg.com/news/artic...ative-rate-experiment-shows-perversions-ahead) And at the same time they see low borrowing rates, so buy a 2nd (3rd, 4th, etc) house.

    There was the canard that real estate always goes up (when I type "real es" into my Google search, it fills out the rest). I mean sure it went down in 2008, but that just means it needs to get back up now.

    [​IMG]

    It's certainly true that housing prices are rising not just because of negative interest rates. But those rates have driven more buyers into real estate, and when the supply in a locale is not increased then you see some price explosions. So if governments want to keep negative rates, should they be forced to take responsibility and increase supply?

    I'm not sure what my disposable income is, but 70% of my paycheck goes to my mortgage. So there's nothing left for disposable income. Thankful for Netflix and Amazon, for cheap streaming video and lowest possible prices in shopping. And for stockaholics.net for being a free media like Facebook/Google.
     

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  2. Onepoint272

    Onepoint272 2019 Stockaholics Contest Winner

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  3. T0rm3nted

    T0rm3nted Moderator
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    It's funny how true this is. Well not funny, but you get the idea. I've been telling my wife that if we decide to have kids, if the college situation is still the same it is today, I don't even know if I'd encourage my child to go, or if I would just suggest to them to develop some sort of specialized skill (mechanic, construction, carpentry, etc.) on their own and get a job doing that.

    So many kids these days don't get jobs out of college and pay it off for decades.
     
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  4. Onepoint272

    Onepoint272 2019 Stockaholics Contest Winner

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    I just wonder how housing prices can go up when so many of the up and coming buyers are already strapped with huge debts and with interest rates having to ramp up......prices have to fall, right?

     
    #4 Onepoint272, May 8, 2016
    Last edited: May 8, 2016
  5. internationalstocks

    internationalstocks Active Member

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    I definitely see a bubble forming for housing prices. My friend got an offer for $5 million for his property in Culver City this month. Small property.
     
  6. Ciao (Sheppy)

    Ciao (Sheppy) Well-Known Member

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    good question anotherdevilsadvocate

    I don't know there (America) but here (Italy) they (Government) keep on telling us that recession is over the house market is picking up etc... but in real is doom:(:mad::eek::):D

    the employment is going up the young unemployment is over 40% + the banks don't issued mortgage/loan very easy.... more and more houses + lands are on sale .... yes cheaper but who ever got money/cash they keep very tight (except of course the multi millionaires) I am referring to mid-low class .. and what is more the local house + land taxes keep going up!!!!

    who got some want to sell not buying, me included (I got 1 apartment+ lands(olives) with a house on sale but nothing doing)

    this is the real thing not what media-government are telling us;):)
     
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  7. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I wonder that too...the only explanation I can come up with is that it's old buyers driving the price of housing up. The baby boomers need to stop causing troubles.

    A big chunk of my paycheck goes to a mortgage, but I can handle it because I have savings. But things would get tight if I just wanted to buy a new car (it's craigslist for my car shopping), and the cost of kids is really formidable (but that tax break tho). Those things that would tap into my savings as well, then it would be real scary trying to build a nest egg with 70% of my paychecks tied up to a mortgage.
     
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  8. T0rm3nted

    T0rm3nted Moderator
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    It's been explained to me that a lot fewer people are buying cheaper houses because they don't want to spend money to fix them up or don't want to have to bother up-sizing in a few years so the younger generation is just skipping to buying nicer homes than past generations would buy as their first homes. You can buy a house nowadays for 5% down...
     
  9. surfsup

    surfsup Active Member

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    I have a few friends who are realtors .

    The realtors are busy, no doubt. I see a bubble forming. The lending is nearly what it was in the early 2000s. And with the banks struggling here, with mortgage in crisis, they won't be too happy. The amount of debt the average person has is astounding and I feel we're running toward an un-sustainable situation again. I believe the prices are pretty hot as they are, although both direct neighbors are selling now and both also dropped their prices recently. So perhaps that is a sign? We're supposed to be in peak season.
     
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  10. InvestingNewbie

    InvestingNewbie New Member

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    I finished my MA in 2012 and couldn't find a job that paid enough to start making payments on my student loan. Thankfully in Canada, we have a repayment assistance option, which allows your loan to sit and not accumulate interest when you are not making enough to meet your minimum payments. Once I moved overseas to try my luck there for work, I was disqualified to stay in repayment assistance and had to start making payments back, even though I didn't have a job yet. That ate away at my savings, but thankfully I got a job before the savings ran out. Currently I am only able to afford to pay the bare minimum (plus an international fee to transfer money to my account back in Canada). The job I have now is just enough to meet my expenses (rent in my tiny shoe box of an apartment, food, mobile and internet, and that student loan payment). Now in 2016 I still have 30 grand to pay back and am still living a student lifestyle. The truth is this generation simply cannot get into the mortgage game. We are starting careers later, and finding actual work that pays much later (or, at least I'm still hoping for this). We can only afford to rent the bare minimum and still meet all of our expenses. We simply do not have the luxury or expendable income to think about buying. That is the reality. And with a massive student loan hanging over our shoulders, securing a loan for a mortgage is just not an option. I'm very much convinced that one they finally deal with this overwhelming problem of the ever increasing cost of education and the ever increasing amount of student loans, the rest of the economic issues that we talk about - like housing - will see improvement as well.

    This video () was circulating through Facebook recently and is incredibly on-point on this issue. I would love to meet this girl. I am currently now in Germany where education is free and I get to see firsthand how this system is working. Honestly, it can work. The people in positions of power and control just need to reprioritize and redeligate funding. And people need to rethink the entire system. Capitalism is not a profitable system. It is time to start encouraging thinking that considers beyond personal financial gain.

    This is also a good read: http://usuncut.com/politics/for-just-70-cents-a-day-you-too-could-save-a-college-student/
     
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  11. T0rm3nted

    T0rm3nted Moderator
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    Average 30-year US mortgage rate rises to 3.64 percent
    Long-term U.S. mortgage rates rose this week but remained at low levels that could entice purchasers amid the current home buying season. Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage increased to 3.64 percent from 3.58 percent last week. It's far below its level a year ago of 3.87 percent.

    Read full article here: http://www.msn.com/en-us/money/real...mortgage-rate-rises-to-364-percent/ar-BBtw8qv
     
  12. T0rm3nted

    T0rm3nted Moderator
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    Pending home sales hit highest level in a decade
    Americans signed more contracts to buy homes in April for the third straight month, driving pending home sales to the highest level in more than a decade. The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index surged 5.1 percent last month to 116.3, the highest since 117.4 in February 2006.

    Read full article here: http://www.msn.com/en-us/money/real...ales-hit-highest-level-in-a-decade/ar-BBtw2zm
     
  13. Clair

    Clair Active Member

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    I've the same problem. Most of money I earn goes to mortrage and it's gonna take me a decade before I pay it off. I'm studying and working two jobs at the same time as well. I think government should definitely take responsibility and increase supply.
     
  14. T0rm3nted

    T0rm3nted Moderator
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    Did you get a 30-year mortgage? And where do you live?
     
  15. Tiptopptrader

    Tiptopptrader Well-Known Member

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    Back when I used to dabble in real estate, the fixer upper brought big rewards especially if you could do the work yourself. I met this family once that would buy and live in a fixer upper and sell it and keep repeating the cycle.
     
  16. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I'll get back to this, there's a lot to discuss here. But at 2:00 you see the picture of "Education is a human right" and the girl talking about how they (students) have been told that getting an education is a requirement for a job.

    Ultimately, they (students) have been lied to. But also, they have been too eager to believe that lie. They think (more like really wanted to believe that) life is some video game, where you have rules given to you and you obey the rules, and you get the reward. It is NOT like that.

    You can get good jobs without education. Life is about connections and who you know. That is what you are paying for at college -- to be around other people with the same aspirations, and to make those connections. Look, you can get an MIT-level education for free online (http://ocw.mit.edu/courses/) and on YouTube (if you think you need to see the professor actually talking).

    I'll get back to this some more, there's lots of blame and understanding to go around. But I just got back from vacation and have a cold.
     
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  17. Ciao (Sheppy)

    Ciao (Sheppy) Well-Known Member

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    Thanks anotherdevilsadvocate I was thinking how to answer-post regarding "job-employment" without make myself misunderstood etc...etc..
    but here come anotherdevilsadvocate to my rescue.
    those lines quoted above say it all.... that is the real thing in the work force .... I can state from experience + I went through that

     
  18. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Yes, finishing college with the degree is not the trump card. Look at Jobs, Gates, Zuckerberg. They all(?) went to Harvard and none of them graduated. Does that mean Harvard is worthless? Heck no, they found people there who gave them what they needed to attain their goals. Zuckerberg took the Facebook idea from the Winklevoss twins and made it what it is today ;).

    Back to what @InvestingNewbie said. Now I have to agree with some things he said. I needed to split these posts up so they didn't seem schizophrenic.

    I think there is indeed a problem with getting those good jobs. I believe the kids are qualified for those jobs (in part thanks to college). But those jobs are inexplicably being held onto by oldsters. What is an 85 year old billionaire (Buffett) doing still working?? He is a grotesquerie, that hides behind a mask of good ol' Americana.

    When I first heard his story decades ago, I liked him. He became a billionaire without ever making anything, but because he had a talent in America. He was not going to bequeath all that money to his children, because they didn't need that much money. What he did, and how he talked was very inspirational.

    But why does he keep holding on, what is he trying to do? Does he not have enough money to live out the rest of his life COMFORTABLY? Every day he holds on to his job, he keeps that job from going to someone else. He is a mockery of 85 year olds that keep working because they do not want to be retired in an old folks home.

    Ultimately, these oldsters will HAVE to give up their jobs, thank death. Like I said in the weekly thread, when these billionaires die it's a good thing. I won't shed any tears for them passing. They have held on too long.

    Capitalism is okay. But a check(?) needs to be put in place to stop capitalists from taking too much for themselves. Let another capitalist have his/her chance.


    .....


    I have one other idea that came to my mind tonight (must be the NyQuil), that I'm not sure fits into this post, but I don't want to make another post just for this idea.

    But it's related to 85 year old billionaires. I think in some way.

    Regarding the tax rate, why is the rate only dependent on dollar amount but disregards length of time? Couldn't there be a higher tax rate if an individual made a million(s) dollars a year for 10 years, compared to another who made a million(s) dollars a year for the first time this year?
     
  19. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    And this all relates to high housing prices, in a way. It seems that supply and demand has been skewed. Not all demand is the same. Demand from house-flippers is not the same as demand from new adults. But they both push the price of all housing upward.

    Just like not all capitalists are the same. Some have been in this game for decades while others are just starting out.
     
  20. sunshinebest

    sunshinebest New Member

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    I'm one of those who have invested in a house and lot because I believe that prices would go up in the near future and I considered it more of an asset than a loss, while I also have stock investments but I only do not put a lot of my money there because I presume that there could be some risks and the rates are unpredictable. Although, there could be much profit too when it rise.
     

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