Don’t be stupid. Realtors said they “had to” because there were 5-40 offers on every property. So yes, if they wanted to win, they “had to” overbid. It’s called “REALITY”.
Over bidding is not the issue. I feel the issue is the amount qualified vs what they can actually afford. Buyer overreach's based on what they qualified or the realtor will see the proof of funding letter and will start pushing homes at that level vs actual budget level.
My realtor in our last negotiation phone call regarding price couldn’t convince me to raise $1,000. Staying objective and treating it like a business deal is hard. That’s why I handled it for my family. It’s all business not a dream.
And because the lenders were urging them to and enabling them to borrow far over their heads. You cannot believe the amount of loan fraud there was. Loan salespeople were brazen in encouraging borrowers to grossly overstate their incomes, and if the borrower filled out an honest application, the loan broker would "correct" the documents to state a much higher income than the borrower had. Most borrowers moreover had no understanding of the terms of the loan and how badly that ARM with the 1% "teaser" interest was actually deferring both the interest and principal, and that would all come due when the loan reset or recast.
Here's a news flash for everyone. 7% or 6% are not high interest rates. In 1998 I had a 7% rate on a mortgage and was happy to have it. The difference between then and now is the price of the home. Then were talking about $100k vs today at $400k plus.
Man, this all sounds familiar. My parents got pinched in this scenario back during the 2000’s housing bubble. They were convinced to refi their 11% FHA mortgage from the 1980s to a zero percent teaser (for the first year), interest only variable loan on a promise of being able to “Fix your credit and refi with a normal loan before the first year is over” Well, the crash came, they didn’t have enough equity, and ended up treading water for over a decade paying a 14.6% loan. In the end, they were foreclosed on for a property they’d been making payments on for over thirty years and got zero equity out of it. I guess the moral of this story is, if someone tries to sell you a loan you can’t afford or understand with the promise of “don’t worry, we can refi it and you’ll come out on top later.” Run.
How did they have no equity in the house unless they pulled a bunch of equity when they did the refi? That’s what a lot of people are doing now. Refinancing the 3% into a 6.5% to pull out equity to pay off stuff while also paying $30k in closing costs.
@@barnabusdoyle4930 Yeah, that’s exactly what happened. That was the ‘fix your credit’ part of the plan. They rolled all their unsecured debt into the mortgage, wiping out the equity they’d built over twenty years. Ended up owing almost double the initial mortgage, at a higher interest rate, and now it was tied to the house. They would have been better off taking the hit of a bankruptcy on the unsecured debt and at least keeping the house.
I tried to tell people not to borrow the way your parents did back in the credit rampage of the 00s, but people were so giddy with excitement over the insanely rapid appreciation that they could not grasp that it was the dodgy lending of any amount of money to anybody for any absurdly overpriced property, that was driving that appreciation. They were all convinced they were going to get rich, and that they were entitled to make obscene profits merely by borrowing to the hilt to buy a place and sit in it for a few years.
“ …and ended up treading water for over a decade…” See? That’s why I see this going on practically indefinitely. If all these people hang on to their homes that they can barely afford for a decade or more, there’s not going to be a crash and wave of foreclosures for many years to come. There’s folks sitting around waiting for home values to go down, so they can buy. But it’s an unrealistic expectation. Better to just pack up and move to a different state where homes are more affordable. I’m sure you can still get the same job over there.
Same here. 2 homes, 1 I live in and the other I rent to a close friend for 10 years now...... Every time I get my property tax and insurance I cringe big time because I have to pass the cost through to him. The increase is $150 a month this year which is ridiculous imo It's not like pocket more $, I just pass thru increases. It's getting to the point that I have been considering selling Time will tell
What you don’t understand is money isn’t even the same, that 100k you thought was 100k isn’t. It’s not more like 65k. Why anyone would want to buy a home in this market is beyond me
By that logic it’s best to buy now since the dollar is devalued what you have in the bank is slowly being worth less at least a home is a tangible asset that is a necessary asset and intrinsically has value a necessity once inflation hits you don’t go backward you just stabilize like a pack of gum was .25 the same gum is 1.50 today it never goes backward to 0.25 homes may decrease for correction but not for long
@@marcusbutron4580 I bought in 2014 when everyone was calling for a 40% crash. Nothing happened. They called buying a home the most unaffordable thing you can buy. I was told no home purchase would good as renting is always cheaper than buying. Again the fake experts are wrong then and now they still are wrong.
Why anyone would buy an investment property now, is beyond me. But if you need somewhere to live, now's as good a time as ever. Buy what you can afford to finance, comfortably. Make the house/condo/shack work for you rather than you working for it. If your first primary property falls in value, who cares? You've got somewhere to live, somewhere to store your stuff, somewhere to cook, sleep have a shower and watch TV. That's its value, not its resale value. It costs to live, whether you're renting or buying. Try asking your landlord for all your rent back in 10 years time when you decide to move. At least if you sell your house, chances are that you'll get something back. Just don't over extend.
I backed out of a buying a house a couple weeks ago. I overbid, went through inspection...only to start budgeting out all the stuff that needed fixed on this place. Nope, not worth it. I will wait
That's the main key,almost every one of the home buyers were told they could refinance later,BUT what they were not told is you cannot refinance with no equity, funny how the lenders and Realtors left that part out too the buyers.
The foolish bought into this ridiculously overpriced market and believed these Godless, money grabbing corporate monsters.😮 I trust in God, walk by Faith. Not by sight and stay vigilant and discerning. So these corporate monsters’ consumer marketing schemes/traps won’t work on me. I don’t need their shiz. Our family of retirees is gratefully blessed and thriving. We’re enjoying our comfortable retirement.😊
Buyer beware. If you have to explain to people they'd have NO equity in something you bought with almost NOTHING down in a year or two, you're dealing with MORONS, and whose fault is that? It's NO ONE else's fault but the people who took out the loan. NOTHING is guaranteed, obviously. Maybe they can sneak out of the country, walk across the border and pretend they don't speak English, and problem solved. Mumble's administration .............
OR the fact that they conveniently quit lending, or doing refinancings, EVERY TIME! Anyone foolish enough to get suckered- into buying at the TOP of a market cycle (pre- correction...) is at least as gullible as those who don't SELL before the next price decline. (Generally from 20- 60%, like clockwork... every 6- 12 years!) Wall Street, the FED and Banksters are now 100% PREDICTABLE... Don't buy- into their bought and played for, MS Medea and crony industry, HYPE! (This crap has been going on since BEFORE the FED and IRS acts, in 1913, like clockwork. (i.e. Bank panics, market crashes, depressions, wars, etc., ALL... by design!!)
As one of emy favorite commentators says in reference to salespeople "Whenever a salesperson makes a claim, look at the clock on the wall or check your watch. You'll notice that every time a salesman says something, it's bullshit o'clock".
The funny part is that these recent buyers bought something they didn't even like. They settled because there wasn't much of a selection. Now they're stuck in something junky.
I feel sorry for the people who bought my house. I’m not sure they truly understood the real costs. Taxes, utilities, maintenance, repairs. Houses can be a real money pit.
Houses can be money pits, no doubt. But I just left an apartment a year ago where they were charging me $2300 a month for two bedrooms and then when I went month to month they jacked up the rent to $2600 a month.
@@carlossummers4992 He said "can be". If you don't think a house is capable of being a money pit, you're one of the gullible people this video is talking about.
Why are people buying these homes if they can't afford their mortgage? Yes, they were told a lie but the owners knew they were skating on thin ice. People! We already went through this in 2008. Where were you?
10 years of a booming market skews one’s perspective. I purchased a while back after prices had already doubled, at the time it appeared foolish. Prices doubled, can they really go up more? Yep, prices doubled again! I now look like a genus… Pure chance. No one predicted the gov would intervene, dropping and holding interest rates for so long. That said, worst case, I could afford my mortgage. Buying with the hope of refinancing to afford your home is pure gambling if not stupidity.
Yeah, they not only lied about that lower rate being right around the corner; but they also didn’t tell buyers that they would need a minimum of ten percent earned in equity in order to refinance without coming out of pocket. I’m not a licensed realtor, but I’ve taken the courses several times over the past twenty years to simply be a smarter buyer. After selling in 2015 after a divorce, my current wife and I have been casually shopping since mid-2019. We’ve come close to jumping the gun lately out here in LA but now we’re officially on the sidelines indefinitely after doing the math: a one-million dollar home at our 2021 rate of 2.25% would’ve produced a mortgage of 6.1k per month. That same home or price range today at 7.5% costs $3000 more at 9.1k per month. No thanks! We’ll wait!
Could be waiting a long time, meanwhile inflation will destroy your savings. They didn't lie, to have trusted someone spouting a forecast as certainty is your own fault.
There is a steel factory that makes the 40,000 lbs. coils near me. When I drive by I always look at the inventory in the yard. It told me economy was doing good when they were low on coils. Drove by it the other day and I was like Utt Ohh. The yard was loaded with coils like 5 times more than normal. The place is called Northstar Bluescope in ohio. looks like more lay offs coming this factory is huge. Probably 700 coils untouched. Not good people!!
Yet another fact that isn't told to the buyer who thinks they will be able to refi is that those first few years of making payments at a high interest rate is almost all going to interest. So, if they are able to refi in even 5 years time, almost all of the mortgage payments will have gone toward interest and they will find that their note, once refinanced with closing costs paid may be larger than the initial note. Now they have wasted 5 years of mortgage payments, are back to another 30 year mortgage, and owe more than they did 5 years ago. Sounds like Admiral Ackbar was right......
I remember people on Facebook talking about these outlandish prices they paid for houses thinking that prices would go up for decades . I said you have no equity in your house when interest go up your prices will drop. Here we are 2 years later
2020 got people assuming that the Federal Government would always take care of them. I have no idea why people believed that. The Government will do what is best for the Government. They knew that a stimulus would increase inflation long-term and that is exactly what happened.
The stimulus isn’t really the main factor that caused inflation, it was a factor but there are other much larger things that gave us our inflation. The narrative from DC is that it was the stimulus, so that Congress can say in the future, “The last time we did stimulus for the people, inflation went crazy.” They are lying. Remember who’s telling you in was that stimulus. There were other factors that pushed up prices that everyone of ignoring. Tariffs, sanctions, oil prices, vaccine mandates and so on.
That’s an econ 101 concept. It ignores the fact China is imploding, supply chains were destroyed, and businesses still have to pay the rent and keep the lights on.
Great Advice ! No one should ever believe their realtor for mortgage advice. All they care is making the sale. Their clients is nothing but a Transaction. We are always concentrating on Mortgage rates. Even if they come down HOA INSURANCE AND TAXES ARE HEADED SIGNIFICANTLY HIGHER
Mostly lies in the real estate industry. People lie to get what they want. Right now they say everything is fine, when it probably isn't. Thank you Michael.
It wasn't b/c the brokers, real estate agents or banks lied to them. It was b/c they suffered from FOMO. Stop blaming others for poor choices. What next? Blame your parents for not sending you to a good school or didn't force you to study harder? Grow up folks.
It's very sad to see so many people duped Michael. People should have waited until the price of homes came down. Delayed gratification is an important trait to have. 😔😐🤔
@@joeswanson733actually the reality is, if no one were to buy for one or two years.. whoever told those lies will be living on the streets. So I can't blame them for doing whatever it takes. It's better you than them. 😂 😂😂
Any one that listens to a lender or realtor telling them “not to worry, you can refinance later” should perhaps stop, and walk away from the transaction. 🤦♀️
Bought a house in July. Had a realtor tell me in February/March tell me there is this great deal available called a 2-1 or possibly a 3-1 rate buy down…I called the mortgage broker they recommended and they pushed hard for the buy-down. I did my research the prior 6 months and dropped the realtor. Decided to represent myself (no realtor). Took longer to land a house because people didn’t like it but was able to assume a loan at 4.25%. Realtors are trash and will never use one again!
I know a single mother whose realtor convinced her to buy an expensive house at a high interest rate in Northern Virginia a few months ago, with the info that rates would be going down and she could refinance. I tried to warn her realtors will say anything to get the commission, but she went ahead anyways. I hope she makes it ok. I don't suspect the housing prices in that area will drop much, but I could get surprised.
@@thetrailoutthere WEll, that assumes rates will drop, but we haven't seen any indication of that being true yet. Inflation high, gas prices will rise because of war, increasing prices of everything else. But assuming rates drop, if housing prices keep rising, that isn't a win because houses are still unaffordable for most. Although it could be a win for those that purchased high and at a high rate, so they can refinance. But that is a lot of speculation.
When I hear a realtor say “you can’t time the market, marry the mortgage date the rate, or it’s a great time to buy” I cringe and take the information with a grain of salt. People swear prices will just go up and up forever and never go down.
Oh heck ya IF YOU DON'T BUY NOW! How am I going to buy my 9k sft. Mansion and Lamborghini? You better buy! And you better buy the price I told you to pay. 😂
@@markme4 They also expect to make 6% on the sale of your house for doing very little work. I sold my last house in 2000 by advertising it in the local newspaper. I don’t think anyone puts ads for real estate in that paper anymore because hardly anyone subscribes to it anymore. Times changed. The multiple listing service is a monopoly for real estate agents.
Sure you can't time the market in the short term. But that's for traders that buy and sell frequently. If you're looking for an investment that you hold for decades you definitely can time the market. You might not buy at the bottom of the deepest valley, but you can at least avoid buying at the peak of mount everest.
I worked for a doctor who once told me that he doesn’t talk patients into a surgery or procedure that they were having doubts about b/c the outcome might not be good and he didn’t want that on his conscience.
Inflation isn’t helping. Everything in the grocery store has gone up 40-110% in the last couple years. Gas prices high , insurances going up car prices through the roof. None of that helps
Adjustable rates, I assume. By the way, adjustable mortgage rates weren't even allowed before the 1980s. It was fixed rate only for the life of the loan. Of course, that was back when things were actually, you know, watched over and regulated? Before the Reagan Revolution got government off businesses' back and let them do any damned thing they wanted.
As long as it's wanted. My new build from 2019 is great now, considering what people in my area are paying for rent. My mortgage is low compared to rent in my area.
I’m in the same boat. Bought in 2011. I want to move to tampa area but need prices to drop. The wife and I plan to rent our current house with 486 a month mortgage. So don’t need prices to drop much. Can swing it now but it would make me sick to my stomach thinking about how much I over paid. Planned our buy in 2011 perfectly. And will do the same this coming crash
Thank you, Michael. My real estate agent has been trying to get me to buy a home with the promise of "refinancing later" like you said. But thanks to your videos, I managed to avoid getting duped into buying an overvalued property in Chicago in this market. I think I should just wait a year or two, save up for a bigger deposit with a high yield savings account, and wait for the market to come back to earth.
Financial institutions have the game rigged, you buy at a high price now or prices would only go down if they stop lending, cash is the only choice on those markets
That's a good approach if you find a reasonably priced rental, but rents have inflated obscenely here in Chicago in the past few years. At least I could hole up in a cheap and nice rental for the duration of the Great Rampage of the 00s, and bought a nice place very cheaply in the wake of the Great Bust when condos were practically being given away. But rentals are so overpriced now that you really have to run the numbers and do a side-by-side comparison. Do the rental parity test on anything you're thinking of buying- if, after a 20% down payment, your total monthly outlay including mortgage, property taxes, insurance, heat, and any HOA is equal to or less than your rent for a comparable dwelling, it's a good purchase. Right now, many Chicago condos are priced below rental parity and would be good rent hedges at the prices they're offered. But if the total monthly outlay would far exceed your rent, back away and wait.
@@chicagonorthcoast Chicago property tax is obscene. Anyone I know with brains fled Chicago already. I live 3 hours away and turn down work that requires me to even travel there. The city is more dangerous than Afghanistan. It's what happens when cities are run by democrats for decades. I am very excited to hear Chicago as a sanctuary city is getting border crossers because they deserve it.
As a retired person, I’m happy to see higher interest rates because it means higher income from CDs and treasuries. No mortgage to worry about. My first home I had a 10 1/2% interest rate in 1987. I bought a home I could afford. No mortgage for me anymore. I prefer collecting interest rather than paying it.
Boomers who bought in the 80’s paid little for their homes- not just in price, but in income to house price ratio. Nowadays, a mortgage is roughly 8x salary. Back in the 80’s, it was roughly 3x salary. Boomers think they’re smarter than younger generations, but they simply got lucky that homes were much cheaper back then.
Yeah same here. My bank us offering 1, year cds for 5.5% so we got 4 cds spaced out every 3 months. Also got an online bank account for 4 1/2 % for some emergency funds. Interest rates haven’t been that high in years. The bad part is that we have to pay taxes on bank interest. Treasury Bonds are state income tax free…
Your making an analysis in a vacuum so it’s not apples to apples. Median income vs home prices were higher back then so rates could be high and housing affordable. Problem today is housing prices are high and have well outpaced median income .
I see realtors jumping on FB posts from posters asking about looking for properties. Coming from being a renter. Those realtors all say I would love to help you. Owning is cheaper than renting. They fail to disclose the closing costs, taxes, homeowner insurance, etc. Plus owning a house costs a lot more with landscaping. Landscaping tools. Maintenance. Things break all the time. How many trips you end up making to home depot.
I pay my landscaper $60 for mowing, edging and trimming bushes. If you add up the time it saves me and wear and tear on tools, I am coming out on top. It's not that much money at all.
Michael, the thing that you said about home buyers getting lied to and now coming to understand that they were lied to....the same thing happened a few years ago with the 'shot'. So many people fell for the lies and now it's starting to come out about dangerous it actually is.
Tell that to the relatives and loved ones of the 1,000,000+ people who died from COVID because they WEREN'T vaccinated. Or the people who took horse medicine instead. Or gargled bleach. Or the people who refused vaccination and ended up passing COVID on to an elderly parent or family member who ended up dying. Tell THEM that.
@@gregoryabbot420 they most likely survived if they took "horse medicine." It's now a proven effective treatment and recommended by the CDC. Why you are you spewing nonsense that has been proven false 3 years later? Anyone who gargled bleach most likely got vaccinated because only a bleach (kool aid) drinker would do either one of those things lmao
Maybe the best time to buy is when you have the opportunity? We bought our modest studio in GFC year 2009; we both worked. Prices and rents have escalated astronomically since then. Buying low and selling high sounds like good advice. We prefer to live simply with less anxiety and be relatively cashed up.
Overpriced is not possible. Houses only sell for what someone will pay, for what they are worth. No one, of course, is going to pay more than they are worth.
It's sad that most people don't do their research on purchasing a home and future expenses but most people buy homes they really don't need I'm sure that couple need a five bedroom home the bigger the home the better they look to family and friends...we are doing so good look at us and then...the true cost of owning a house sinks in and a major expense comes and their in trouble or a major tax hike or insurance hike and it's game over it's too bad it takes a ressession to make people get a financial clue
The real estate industry is dilutional 😢. There will come a time when our society will come to terms and understand that these home prices are pricing out even buyers with a stable financial sheet.
@@cybermuse6917hes probably referring to the idea that the US is paying too much for Euro security and entanglement, eg Ukraine. Thats just how lot of American right wing feel, justificably or unjustiably.
Zillow offers 1% down trying to keep the house price high and to trap more buyers 😂!!!! This could be the good time to sell, pocket a huge profit and stay rent for a couple years....No interest, no mortgage, no insurance, no home repair cost, no property tax , no worrisome at night.... Just relax and enjoy your life. Things go up must come down!!!!
Too many foolish individuals falling for these corporate monsters’ ridiculous consumer marketing schemes/traps.😢 Hence the wealthy growing wealthier and the poor, poorer. I can’t feel sorry for these people living well above their means, paycheck to paycheck and drowning in debt. It’s self inflicted. As the saying goes, “You made your bed; now you have to sleep in it”.😮 I happily retired at 60 free of debt in 2021 and today, our family of retirees is gratefully blessed and thriving.😊 We’re enjoying our well earned stress free, comfortable retirement. Debt free=Freedom and Peace of mind. Praise God!.
Adjustable rate mortgages should be illegal or should be capped within a reasonable percent persons wage because some people just cant make more money right away. if it is capped to a percent of someones wage then the banks will have to do their due-diligence to make sure that their customers can actually afford their products. Until they do adjustable rate mortgages are a scam
@joeswanson733 the dynamics of purchasing a home will need to change such as putting up more money and children living with parents longer. The government may need to intervene in housing like after WW2. That probably won't until the out of touch ghouls leave the office.
Why anyone is buying a house now is beyond me, when the crash comes, and it's coming, your home value will be slashed. So you will be paying a mortgage on a 700k house now worth 400?? SMH
I bought a home 2 months ago, now with student loans, and interest rate rising, job cut hours I may lose home. The roof is leaking and I waved inspection, stuck with a 700K loan at 7.7 interest rate. I didn’t factor student loans and in 3 months I may have to sell if I can’t get student loans restructured. Cashed out 401K 20 years of savings gone. Living check to check and credit cards. I made a mistake.
So sorry to hear this happened to you! I've made worse Mistakes Than This. Hang on to your job if you can and just keep on shoveling you'll make it eventually.
A BIG mistake. I went through the 2008-2014 recession in Florida and I was in construction which took the biggest hit It was horrible. I managed to save everything because I mostly lived debt free other than my mortgage. It was really tuff to make it even without debt. I really hope you can pull this off.
Michael: You're right. It will be interesting to see how this plays out. I see a slow bleed in the housing market, rather than a crash. Many will end up homeless, forced to move in with family. I have seen that in my own neighborhood. Unless you are in the military or working for the Federal Government, your job is not safe right now.
Dave Ramsey just told someone that home prices are still going up and will continue to do so. 🤔 So now is a good time to buy. I don’t see it. Maybe I’m missing something.
He says that because of demand. Prices will not come down with demand so high. I’m kind of with Ramsey on this one. Different markets will have different results, but generally this is likely the new norm. Of course, it’s anyone’s guess. No one knows for sure.
Years ago they used to say date the rate and marry the house. Its still true today. Rates will fall and you can refinance your house then. It might not be yet in 2023, but definitely in the mid-20s. Lets put it this way....are you going to pass up your dream house (which might not be available for another half century or more) due to higher interest rates today? 99.9% of people will not pass up their dream house....the other 0.1% are lying.
Never, ever take out an ARM. If you can’t afford the payments of a fixed rate mortgage, save your nickels and be patient. Better to delay your housing gratification than to go into poverty because of a dim-witted financial decision.
I bought my first house in 2007. Interest rate was around a 3.5%. When we were talking to a realtor, she told us it was a great time to buy since rates were so low. Luckily we bought a house well within our means and 08-11 didn’t affect us. But I knew ppl that were and got foreclosed on. They were a family where just the husband worked or income wasn’t great. Also in 2008 I bought a 2004 4Runner SR5 V8 for $12K. It booked at $20K. But no one was buying and since gas was high, didn’t want a V8 SUV. When the bubble pops, there will be great buying opportunities if you can truly afford it. I remember seeing all kinds of foreclosed houses for sale in 2008-2009. A lot of them.
A nice stack of cash is always nice when the tables turn. In this case, that stack is dying in your pocket because of inflation. And the way to beat the inflation that is killing you, is to buy a house, with a monthly payment you can afford, which is off the table for many people.
I have 2.60% refi done in 2021. I feel like i wouldnt be able to move for 20 years lol. Everything i see noaday cost DOUBLE the monthly payment just because the interst rate
Reminds me of 2004-2008 when ARMs were popular. They said “just refi after 3 years”…..no one had equity to refi. This time is different though. Just too much equity and not enough inventory. No crash will happen in the next two years.
My ex works as a bartender at a fancy expensive restaurant. She said it’s still busy but you can tell that the ppl that could barely afford it or probably couldn’t afford it but went..not coming in anymore. She said once the ppl that can afford it die off…crap just got real.
Rates aren't high right now- they are returning to normal after a prolonged low. My 1st house loan was 8.25% & that was low. Retes a few years before were where credit cards are now.
The concept of individual responsibility in this country has disappeared. People don't want to put any thought into major decisions or do any research prior to making a major decision. People want to do whatever and if there are consequences, it's somebody else's or some "thing's" fault.
If your upside-down on your mortgage you could make principal payments for a period of time to pay down the principal & build inside your own deal equity. Example. Mortgage $400k, 360 months, 6.5% fixed rate. P&I=$2550/month. If you can affird to pay an extra $500/month you can get the balance down to aboy $340k in 60 months. Thats less than $20/day. See where your wasting money daily right now. I'll be you can find it. Thats $125/week. Its like getting 6.5% on your money. That alone turns that particular loan tern to 292 months instead of 360 months. The higher your interest rate the more sense it makes. Your also paying off your debt with inflated dollars. You own the lender at that point. Then if rates do come down later you'll have the equity to refi. Just be sure to pay with a separate check & write for principal payment only right on it. The bank hates this so they'll play games with u & try & stick it into suspense or apply to future payments. You always have right to pay principal on your mortgage if its conventional. Good luck
I was chatting with a guy, maybe in his late 20s, while waiting to get tires put on my truck, he said he bought a house 6 months ago with an ARM loan because his payment will lower itself as rates drop and he won't have to do anything , i had no response, i just got in my truck and left like ...😮
Times are definitely tight, though it’s just another cycle. My first home was at a 12% rate (1980) though the price was only 65K. I still own that home and have moved up to a better home in 1988.
Michael, I think you might be missing something. I’m a Realtor in SW FL and have been a broker for many decades. I watch some or all of nearly every one of your videos and you make many good points. In a normal situation and environment home prices might likely drop considering some of the headwinds the market is facing. And, to be honest, you may be right and home prices will in fact drop. However……..There are several unique factors at play currently that we haven’t faced before so IMHO I’m not 100% convinced we will have the drastic price reductions many are predicting and in fact hoping for. When you are in this area sometime touch base and we’ll discuss some of those factors over lunch. Keep up the good work on the videos as I always enjoy them. We’ll see how this plays out in the future.
Even when you own the house there is still property tax, utilities, maintenance and whatever major repairs needed in the future. Renting is best but not by much these days rents are high in most areas.
The people who can't continue to make their payments will lose their homes. The house will be purchased by an investment group, then become a rental. Maybe the original owner can arrange to rent it in the future? Just trying to find the silver lining......
Without regulation and oversight? Awful things ALWAYS happen. To the average person. And to varying degrees? That's pretty much ALL of us. No matter how unique and special some people view themselves.
The last “real” recession was 2008. Let’s be honest. If you were 18 (born 1990) in 2008 you have never experienced a recession that you have knowledge about. So we have 35 year olds that do it understand what a real recession is. A few months ago my 23 year old son asked me what a recession is.
In 1978 , ...8% and 9% mortgages were very common , 20% down payment was standard and homes were cheap. ( the price of a home was about double the price of a new auto). Now the price of homes are like NFT's. Line goes up, up, up.....
Not nearly as bad as what country wide did to me in 2004 when I bought my first home. Buried in the documents was a line that said "This may or may not be an introductory rate". After two months my payment went up because the interest rate went up a point and a half. 😡 The agent also tried to sell me a house that I knew I couldn't afford. They wanted to make a bigger sale. Didn't care weather I could pay for it or not.
My 30 yr fixed rate in 2008 was 6.25 % AND I was the fifth highest buyer in the townhouse complex 30 yr history . I sold it because the HOA went fro 210 to 765 in 12 years .I learned so much from that mistake . My real estate agent was useless and unexperienced
Anyone buying under that "refi" rainbow, doesn't think clearly. In addition to what you said Michael...we all know that your credit health can change in a year or two. Job loss can strike at any time as can divorce (often messes up credit report). Another thing...if you take a 30 yr mtg, just make an extra payment twice a year or...pay something extra each month towards princpl. You will save on interest that way.
The highest interest i ever Paid on a mortgage was 6.5% in 2002 then when it drop to 4% i refinance to 15 years loan i paid it off in 2010 then bought 2 more home in 2013 Both of them mortgage interest @3.25 Now I paid it off 1 more Another 1 is still owed 29k on mortgage All in California coastal city
Real estate in a nutshell: 1. Realtors will ALWAYS say it’s a great time to buy. 2. The supply of money and dollar purchasing power have drastically changed in last few decades. 3. Wall Street owns many, many empty homes. 4. Airbnb did not exist before 2008 crisis. 5. 44% of people’s salary are going to their house. WAY TOO HIGH to be sustainable. What happens to all this when the economy enters a downturn and unemployment rate shoots up?
There is a thing called individual responsibility. People want to act however they want, but they always want an out to be able to blame someone or something if everything goes sideways.
only thing i have its 150k available to buy. I know with that money i wont be able to, so im waiting to see if😢im lucky and i get the chance to get something in the future or use it as a dwn payment for a house no too expensive
If "if and buts" were "candy and nuts" every day would be Christmas. The point being prepare for the worst and hope for the best! Don't trust anyone in the Real Estate business except for Michael.
How is it 2008? People have tons of equity and 3-4% mortgages and you think there going to walk? And pay more to rent? You people don't think you only wish. It's supply and demand nothing more. There's very little inventory and enough demand that prices are not going to drop by much if at all. When interest rates go down there going to be a lot of demand and prices will up.
It's worse than 2008 imho. Mortgages coming up for renewal, cost of living keeps rising. People are selling cause they can't afford the payments. Inventory rising dude. Prices goin down. Interest rates will continue to rise. It's all by design. Own nothing and be happy. @@bigmike9433
2008 with just a slightly different twist. For the average schmuck though, the end result is the exact same. It's ALWAYS the exact same for schmucks. REGARDLESS of the details.
Michael, You can lead horses to water. But you can’t stop them from jumping in with a weight around their neck and drowning themselves. I was one who listened. We sold at the top in June of 22 and paid off all of the high interest debt. No more weight around our neck. 31 and Happily renting with our first child on the way. Stacking savings and building credit while we wait for market to break. Thank you to you and other content creators like you who helped show me where the water is. -Aleski
We ate at a Darden restaurant this weekend because my husband wanted a certain item. My 20 + combo meal was really bland and I am a good cook that could have done the same meal at home for much less. THAT is the reason these chains are suffering. My demographic has money to spend and I don't want to cook all of the time... but I also don't want cafeteria grade food at premium prices. I have two filet mignons in the fridge that I will grill tonight that cost 25 bucks, so $12.50 per steak. Same steaks at a chain restaurant like Capitol Grill would run us over $100 easily. They will be within degrees of flavor- people just don't want to throw their money away.
I read somewhere that smart people invest in real estate and dumb people save their money. Tell that to the retirees living on their savings and watching the interest rate on cd’s going up every quarter.
No one ever told people to put all their money as cash. That would just be silly as there has not been many vehicles that outpaces inflation. Getting into real estate for rental properties in the past has always been daunting for the normies. Being a landlord isn't fun. You do need access to capital and a lot of folks don't have access to it for the down payment
CD's are investments, not exactly the same as a "Savings" account. Also, land is a better option. Purchased 10 acres in Central Texas, closed a few days ago. It has appreciated by $20K in only three months, between the time I agreed to buy it and closing.
The only person I listen to is President Biden. I know that he would never lie to me because he knows what is best for me. I may not realize it but that is just because I am not as smart as him. The war in Ukraine, high home prices, high inflation, taxes, and gas prices are all for my benefit. With the high food prices, I will eat less and lose weight, see he knows how to help me.
I did an inspection on a 1450 s.f. house that just sold for 650k in Stuart Fl, and at the end I asked the owner if they ever actually thought about how much money 650k is? They said all they cared about was the payment.......
