House prices surpass housing-bubble peak on price-to-rent ratio

Post by throwaway210222 » Wed, May 26, 2021, 11:09 AM UTC

ChrisLomont wrote: post #17

JimTheMan wrote: post #12

Earlier quoted context omitted.

The repayments seem to stay about the same but the overall payment is incredibly large. And because getting the % deposit is a big factor in whether you can afford a house, it pushes lower income people out of the market. And if you bought in 1980, the high rates kept the lid on prices. However while you may have started with the same payment but the rates have been steadily ticking down since then. Creating a massiv…

>And because getting the % deposit is a big factor in whether you can afford a house, it pushes lower income people out of the market. Median downpayment is 6%, a common low end is 3%, some places and programs go lower. Median house price sold in 2020 was 347k, well over 25% of houses sell for under 250k [1]. So, for a starter home, saving 3% of say 200k is 6k. If someone can pay this mortgage without killing themsel…

Post by jebdbdb » Wed, May 26, 2021, 11:17 AM UTC

bko wrote: post #7

helen___keller wrote: post #5

Earlier quoted context omitted.

> the main driving factor is very low interest rates and massive amounts of credit. This doesn't tell the whole story. Low interest rates don't make people offer 150k over asking while waiving all contingencies. I'm closing on a home soon and I saw this kind of stuff. I myself went 25k over with all contingencies waived on a condo in a 100 year old multifamily building. Relatively speaking, I was quite lucky to get t…

> Low interest rates don't make people offer 150k over asking while waiving all contingencies Paying above offer always struck me as strange. In my housing market its very common as well, to the point I believe under-pricing the home is intentional. There's no reason the home should be priced considerably below the market price. Sometimes you get it wrong but homes consistently selling above ask tells you the sellers…

Post by hellbannedguy » Wed, May 26, 2021, 11:20 AM UTC

bko wrote: post #7

helen___keller wrote: post #5

Earlier quoted context omitted.

> the main driving factor is very low interest rates and massive amounts of credit. This doesn't tell the whole story. Low interest rates don't make people offer 150k over asking while waiving all contingencies. I'm closing on a home soon and I saw this kind of stuff. I myself went 25k over with all contingencies waived on a condo in a 100 year old multifamily building. Relatively speaking, I was quite lucky to get t…

> Low interest rates don't make people offer 150k over asking while waiving all contingencies Paying above offer always struck me as strange. In my housing market its very common as well, to the point I believe under-pricing the home is intentional. There's no reason the home should be priced considerably below the market price. Sometimes you get it wrong but homes consistently selling above ask tells you the sellers…

Post by bequanna » Wed, May 26, 2021, 11:28 AM UTC

aurizon wrote: post #20

Of course, this is a massive arranged crime akin to and having it's roots in the sub-prime mortgage crash. Rates are low. corporations can borrow unlimited cash and buy a residence, then rent it out to get 4-5% interest and pay 1.5 to 2.5 = risk free make the spread with no limits. I would like to borrow 10 billion and buy a zillion homes and make the spread ~~3%. They hire property managers and that costs .5% to .75…

Post by ghaff » Wed, May 26, 2021, 11:45 AM UTC

MobileVet wrote: post #26

Clearly there are a lot of variables including interest rates, desire for better space due to Covid lockdowns and more recently FOMO. One thing that should not be overlooked is the basic economics of supply and demand. Right now the supply is extremely low compared to much of our historical data. This at the same time as demand has been red hot (due mostly to Covid). Check out the data below, especially over the last…