The only thing that is sustaining current real estate prices is credit offered by debt-peddlers.

Even in the rural, middle-of-nowhere areas, real estate is still way too high. No jobs, no funding and the only way to get something - anything - is to borrow so much that you are in debt for the rest of your life. That's the SOP.  $150K for a house in rural Kentucky/WV/etc.  With no jobs anywhere? Not even min-wage?  Places where $10/hour Home Depot jobs are considered "good jobs".

The second wave of RE collapse will come when all credit becomes unavailable and the housing prices adjust to the min-wage wages or lack thereof in the boonies. The only thing that's keeping this high is credit.

We will have a RE collapse. We *need* a RE collapse to come back to reality.  140K in rural TX is not viable.

Current prices are just absurd. Especially in the context of the current economic collapse. Jobs are hard to find with dozens of applicants even for janitor positions. Even min-wage jobs has become unobtanium in rural areas. You can only get a job if "you know someone". A janitor job opens up and 12 people show up to apply, what does that tell you?

Here in the District of Corruption, it's even worse. No crash here and prices are just in the stratosphere. $650K for a house. You can sometimes get defaults but even these are way too high.  

I work in IT and they used to get 200-300 applicants per opening 10 years ago, now it's more like 800 people applying for same job. Granted 90% of them are BS candidates with terrible /off-topic resumes but the remaining 10% are still dozens of very strong candidates.

Point is, people have no money and keep financing their lifestyle with credit. That means from food to gas to real estate. It's a narcotic and will soon disappear and then we shall know the meaning of crash. They can extend it but not indefinitely.

Then if you still got the coin - and that's a big "if" - you can buy anything. If the hyperinflation does not wipe out the currency.

The guberment will still print money tho. So the banks will keep lending. Nothing to worry about.

Aren't you a ray of sunshine?

However you are absolutely correct. A catastrophic correction is on the way.

I must be living in a bubble. Real Estate prices in the Tulsa area are still down.

....again?

Hope we can sell our POS townhouse that we are underwater on from the last time to some sucker (with good credit) before it hits again.  

No kidding.

OP, having a 2008 flashback?

We are still at half of 2008 prices here. Houses still selling fine.


I wish the car market would crash so I could pick up a Lamborghini for pennies

banks are actually lending? I hadn't heard that.

Your read on things is correct. Your ability to predict the future is not.

The banks can print unlimited money for free, SO LONG AS THE NUMBERS THEY WRITE DOWN FOR THEIR HOLDINGS JUSTIFY IT. If they refuse to write down lower prices, they cannot fail.

The counties set their revenue based on astronomically overstated values. It is wholesale tax fraud perpetrated against the American people. They will not stop.

"The market" is not free. It is dictated. There will not be a market correction or any market induced change of direction, until it is forced upon us by a global devaluing of our currency.

Here's the prediction:
Container ships of foreign goods will stop floating up to our shores before housing prices reflect the realistic purchase power of the local populations.

We tried selling our house but we are 50k underwater, said screwit and rented out instead.  We will be better positioned to sell it in a few years, but I dont know if I would ever buy again.

The problem is that investors are buying up property and realty companies are raising prices because houses are selling. Atleast thats whats happening around my area.

I can't imagine what the other 11 applicants looked like if 12 people apply for every Walmart job around here.

the main thing sustaining current prices is low interest rates

Every 1% higher in interest rates you lose 10% of your purchasing power.

The prices will collapse when higher interest rates start next year.(if it still goes that way)

My payment is $200 less for a house that cost $15k more than the one I bought in 2006.

The banks, i.e. the Federal Reserve System, can print "money", or Federal Reserve Notes, which are really NOT money, but "Notes", for free and for a very long time but NOT indefinitely.

That is the point.  We are the end of the run, when the bag of tricks is empty. They can play the game for a while longer but not forever.

of course.

that is what ultra low interest rates are all about.

If you seriously believed in the hyperinflation scenario, you too would be addicted to credit.  I know I'd be leveraging all I could to buy as much as I could.

Seems like 2 out of 3 cars on the road here are newer model luxury vehicle or $40,000 trucks.

I doubt I'd be seeing as many of them if interest rates were higher.

Our house is still less than what it was pre '08.
Couldn't get a refi because the value was less than we owed.

Déjà vu

The real estate adjustment will come once the Feds start raising rates.  This country runs on debt now and everything will get more expensive.  Credit card rates will instantly increase.  Car and home loans will have a lot higher payments for the same item.  A 200k mortgage runs $1,373 a month right now at 3.9% but at 6.9% it would be $1,747 for the same house.  People's income will not increase so the amount they can spend monthly on a home will not change.  At 6.9% and the same monthly payment the person will only be able to buy a $155,000 house.  The market will shift to cheaper houses and the expensive houses will have no choice but to drop in value if the owners want to sell.

Our glorious and beloved leader has promised to "restore the value" to our houses.

Back in June I paid $80k less than the original owners on a 6 year old house.  The only thing up around here is Lake Front property, midlands SC.

Ours has gone up $60k in one year.

We are in the damned if you do, damned if you don't situation. The RE situation is just icing on the cake.

The economy runs on credit, debt - called Quantative Easing part X but it just means running the printing press and adding zeros on the computer screen. This leads to higher national debt, deficit, interest payments, and inflation. The end game is currency collapse with a postage stamp costing $10,000. The current debt of 17T can never be repaid - no plans to repay, it's not economically feasible. Even if the fed gov shut down every program, they still could not repay it. The debt is a run away train and the gov just hits the gas pedal. The end game is hyperinflation.  There is no other outcome possible.  That's what happens when there is just too much "money", or Notes printed.
The US had several hyperinflations already. First during the revolutionary war, the Continental currency went to zero. During the Civil war, the Southern currency was almost completely devalued. So it's not like a hyperinflation is a thing that never happened before.

Every president and Congress thinks short term. Everyone adds to the debt, bails out today, but tomorrow is coming. It's like getting another CC to pay off the first credit card ad infinitum.

So with the option of endless QE, wearing out the printing press, "Too big to fail". And much demagoguery about the subject, everyone who does not want to raise the debt limit and print "Notes" forever is the enemy of the people and a Republican. The current path leads to a hyperinflationary depression.  Hyperinflation causes social political instability and usually brings down the government. e.g. The Continental brought down the Confederation of 1777 and led to creation of the US by the Constitutional Convention. The tsarist government collapsed in 1917 when the ruble was destroyed, etc. etc. etc.

The second option is to reduce the debt, stop printing money, stop borrowing, cut social programs.  That might fix thing very long-term but short term too will lead to a depression, more like a huge contraction in business because everything runs on debt, credit and funding. If they seriously reduced the debt, we would be a in a depression far worse than the Great Depression. Which is why nobody wants to do it, it's not possible.

so no matter what they do, we are screwed and well past the point of no return. Hyperinflationary depresson or a deflationary collapse. some choice. Does not take a genius to see which path they have chosen. Hint: Not the deflationary pay-off-the-debt one.

The key aspect you fail to realize is the cost of materials and labor to build a home.




































 

easiest way to fix it make the banks responsible for maintaining and property tax on every foreclosed home on the books make the house a liability not an asset to sit on.   prices will normalize in a week.

A rational voice in a thread full of Derp.

Down from what? Go take a look at midtown.  It has gone up every year.

The banks were NEVER motivated to sell properties even when they were foreclosures or at risk of foreclosure through short-sales, because they all got bailed out. With ZERO motivation to sell they didn't have to really drop prices or do anything to accommodate buyers.  When we purchased our home in 2009 most of the foreclosures demanded either straight cash or that you were financed through them or a private loan rather than government VA loan.  The banks didn't want to maintain the properties at all or bring them into conformity with all the requirements of the government backed loans and they had zero motivation to do so. In other words, the banks were all too happy to take the government bailouts, but were telling buyers with government backed VA loans to go #$%@ themselves. When it came to short-sales they were sitting on those short-sale approvals for MONTHS sometimes.  

Right. Translation: Rates have nowhere to go but up and RE prices has nowhere to go but down.

Lol

that is another astute observation.
Undoubtedly "bailouts" and too big to fail contribute to the state of insane prices today and keeping the corpse walking.

and when your whole paycheck goes to one cart full of groceries how are you going to pay off all the other crap?

This will be very apparent to the fed when they decide to raise rates

Theres always a plus to giving up some gun rights I guess

It's going pretty crazy down here. I came in 10k over asking on a place last month and still didn't get it.

I haven't given up a damn thing actually.

Missed your chance to buy, eh?  You probably thought that anyone who has anywhere, at any time, said, "Buy now or be priced out forever" was just selling real estate?

You're the grasshopper.

OP is mad he can't afford his dream house.

"debt peddlers" LMFAO.

So what you guys are saying is that I should buy a house now instead of later? I've been wanting to move to another state but buy a house and live here while paying for the house while looking for a job in the new location. I've been trying to save up as much as I can to not be much in debt. It would be my first house and am looking in the 100k price. I know I can't get much for that price but its all I can afford.

What would be the effect of requiring a full 20% down to buy a home, but keeping interest rates low?  I guess the crappy economy would be fucked either way if people saved that money for a home rather than spending it in the 'service' economy.

The real estate market I am interested in hasn't changed much in the last 10 years even through the bad times.  Even if a collapse is coming, things will go back up and stabilize again so I am not too worried.  It is still the best form of investment by far compared to stock market.

I heard they were selling houses in Detroit for a dollar and you could prolly deal it down even further!

If the Fed is ever forced to raise interest rates, real estate prices will drop just like in 2008.

I'd bet there isn't as many "bad bets" out there as there were in 2008, though, so the "crash" won't be as bad, but it will be significant.

Again, that assumes that the Fed can actually raise interest rates.

I love how people create these nonsensical scenarios where the price of everything goes up except the assets they own - up to and including their labor they provide.  And, in this case, their homes.  I bet you think rents will go through the roof though, too - just not the rents you can charge on assets you own.

gun laws too strict, though

Refi is a fucking joke.


I've got an 8.25% rate , was told I qualified for a new rate of 3.25 %

Would lower my payment by a whopping $75 a month

And it would only cost me $ 10,000

what the fuck ever

I suppose a Repub will inherit the white house in 2016 and receive all of the blame!