Boomers won't let go of their homes

That is me other than the busy street.

 

I moved to South Florida from Tampa in 2019 and was shocked by the housing prices. I bought anyway as I hate renting. Now those 2019 prices feel like a decade ago.

Unfortunately I don’t see much of a correction coming. The rates have doubled and while the market has slowed down significantly, pricing corrections have been uneven. At the lower end you’ve seen higher percentage drops, but medium and higher end the prices have not relented at all. And if/when the rates come back down to the 5s, I think it’s going to get worse. There’s so much pent up demand.

 

To add to this, overall, in the US, there is a housing shortage. There aren't enough new homes being built to meet the natural demand of new families coming onto the market. So I agree that it's unlikely we'll see much of a correction in housing. Lower rates would fuel more purchasing power and thus likely put pressure on home prices to rise. Banks are not foreclosing like they used to. You can get a forbearance for just about any reason nowadays.

Real estate in the United States is going to become a luxury item and in many cases, already has. Unless your house becomes too much for you to take care of, keep it updated and hang onto it. You can always pay for somebody to help with upkeep.

 

Good l

Good lord! Pays well, I bet.

 

Annual carrying costs are far less than what rent will be anywhere inside I285 (where we currently live). Maintenance can be costly.

Agree on travel. As long as we remain in good health we plan to take 2-3 active vacations a year (this year was hiking in Patagonia, sailing in the BVI’s and a Backroads bike trip from Burlington VT to Montreal). Next year is hiking the Chilean mountain desert and two weeks on the Dalmatian Coast and North Africa.

I’d love to live a little more urban/walkable life but that would mean giving up half the house for the same or more cost, which seems to make no sense given all the efficiencies we have now. And we live our house.

Everyone is different and there’s “right” way. For the young folks on here, the key is to have a good plan and invest wisely. Buying Apple stock 15 years ago at 100/share seemed expensive. Having 20x shares today due to splits at 200 seems like it was worth it. Plan, execute and be patient. Accumulated wealth and a mortgage free home don’t happen overnight.

 

People only discuss the supply when we are talking about supply and demand. Demand has slowed down, which will increase supply or drop prices. We are at the point were the prices no longer make sense. There are over 600 homes that meet my basic search criteria in my area, but the vast majority are over priced and are sitting. It's not that there isn't supply, it's that the asking price is outrageous.

 

In most areas of the country, inventory is still quite low compared to previous cycles. The asking prices are what they are due to this. In the aggregate, homes aren't sitting that long.

 

But the point is, there is plenty of inventory that is sitting. To say that there is limited supply is not accurate. There is limited supply of reasonably priced inventory. The vast majority is people looking to get rich off the home sale.

 

I don't think any of the inventory is reasonably priced, at least in most areas, when you look at the price to household income ratios in most major markets. The average house-price-to-income ratio in the U.S. is 5.8, more than double the 2.6 experts recommend. None of the 50 most-populous metros in the U.S. have a home-price-to-income ratio that's equal to or below the recommended 2.6.

Home prices are rising 2x faster than income.

And this is where you see just how bad inflation has been and how it still is today. The government inflation data have a way of softening the reality. The truth is people can afford far less today than they could 3 years ago.

 

Regular gated subdivision (Encore) where you have to be 55 and over to own and live here. We have 254 homes and townhomes. We are inside another community called Fishhawk Ranch West in Lithia Fl. $405 assn dues per month in Encore and $69 per month to FRW.
Lots of bells and whistles for what we pay including yard maintenance, upgraded cable and internet, etc.

encore fishhawk - Google Search

 

Agreed.

I can buy a house, but it wouldn’t be the level I am accustomed to, so as much as I hate renting, I will not buy unless it makes sense. It took years of work and sacrifice to amass what I have and I can’t with good conscience just hand it over to someone. I remember the last crash. Nobody thought it was possible, but then it happened. I ended up buying several properties at a discount. It’s not the same conditions, but there are similar elements at play.

 

Been looking around some, zillow website give the last 8 or 9 years values...most have almost doubled in the last 3 years. Freaking ridiculous.

 

Demand is pent up, it isn't dropping.

 

What are your cdd fees? Show up as taxes on your annual tax bill

 

There were a lot of people that thought a correction was coming in the mid 2000s. But nobody thought it would be as severe as it was. Around 2004, I was in the market for my first house. I remember having several conversations with a buddy at work about the coming correction. I also remember going to parties and half the people I met where investing in real estate which scared me. We both watched housing continue to skyrocket for another year while we sat on the sidelines and we both finally bought houses in 2005. By 2009 we were both underwater. I no longer own that house but it’s probably worth twice what I paid for it.

Timing the market is impossible. I think when it comes to your primary residence, you buy something where you can be comfortable for 10+ years, in a city/neighborhood where people will always want to live, and let the market take care of itself.

From an investment perspective, I’ve been hearing and predicting a correction since about 2018. I’ve been humbled and now I’m starting to invest again.

 

Demand has dropped, due to prices.

 

The current housing shortfall has been accumulating over decades. After the mid-2000s housing boom, the U.S. has consistently underbuilt compared to the historical average. There isn’t enough inventory to keep housing prices from climbing. I had an industry consultant say that before the pandemic we were 5-7 years away from catching up… then the pandemic set it back further.

 

Yeah… if I knew for certain I wasn’t moving for 10 years, I wouldn’t care as much. Since I don’t know, I am hesitant to overpay. Like I said, I’m not unrealistic and expect to pay less than what the last guy paid, but the markup is insane. Can’t give you $1.3M when you bought it for $450K in 2018. I guess I’ll keep renting or be moving to Ohio or something. I can understand California and NY being high priced because of their wages. Florida job pay is terrible in comparison. I am a remote worker so I don’t have the Florida pay, but you never know what could happen with employment. If I was forced to get a similar job in under a Florida employer, I’d likely get paid half my current salary.

 

I hear that argument all the time, but there are so many houses for sale. It’s not like there is nothing to buy. It’s the price. It just doesn’t math out.

Look at this house’s price history. It’s just a regular house in a working class neighborhood. Estimated mortgage is $9,705. So just using a rough calculation where no more than 25% of your net pay should go to your mortgage, the buyer would likely need to net $38,820 per month to buy this house. We are talking about a regular house where you need to make roughly $466K per year to afford unless you overextend yourself. That’s assuming a $300k down payment, mind you. Now also look at what they paid for it just 3.5 years ago. So even if you can afford it… should you buy it? Should you reward the greed? This is typical for my area.