Renting another year? Sitting on cash or investing it? Pulling the trigger on a massive or small mortgage? And what's your reason? Is it due to market predictions or inability to further delay (family, etc.)?
Ask HN: What are idling first-time home buyers doing?
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Re: Ask HN: What are idling first-time home buyers doing?
#2[deleted]
Re: Ask HN: What are idling first-time home buyers doing?
#3Hoping the prices drop
Re: Ask HN: What are idling first-time home buyers doing?
#4Saving cash, because the obvious situation is to wait for the crash. It’s going to happen and then I won’t be wasting 2/3rd of my money on the inflated market investment value of what is one of the basic human needs. Real estate as an investment is the sand that a big part of the currently precarious global financial situation sits on. It’s going to collapse in my lifetime and I’d rather be sitting on a pile of cash the moment it happens than be leveraged hip deep in some stock brokerage unable to turn my cash into the one thing my parents and their parents generation got to take for granted, ownership of the land they lived on.
Re: Ask HN: What are idling first-time home buyers doing?
#5I think of pricing as a probability distribution, and while it's possible that prices continue to increase, in my view the downside risk on house prices predominates. Here are a few possibilities:
1. high interest leads to an increase in rates, significantly increasing payments and making current prices less affordable.
2. A recession drops wages
3. Stock prices drop precipitously, devaluing a lot of paper money in some markets (e.g., RSUs)
4. Previous 'hot-markets' have their use-value decrease substantially due to greater availability of remote work
5. In concert with a rate increase, if house prices look to be dropping housing as an investment vehicle may become unappealing, causing a flight and a downward spiral
All of this has to be balanced with the risk of holding onto cash or putting the money into other vehicles. Inflation is eating at the cash pretty aggressively right now and many other more liquid investments suffer similar risks as housing, but you don't get to live in your stock portfolio. If inflation doesn't get reigned in, housing may hold its nominal value or even increase and there's probably a sizable contingent of policy makers that would rather inflate than suffer significant nominal housing value decreases. For me, I'm basically watching what happens with inflation and how policy makers look to be acting. I'm holding a decent amount of cash, but I'm looking for a place to put it near-term and have limited patience on housing in the face of continued high inflation.
Re: Ask HN: What are idling first-time home buyers doing?
#6I’m Denver a single family home within 20 minutes of downtown starts at $300k for a very small or rundown house. I’m continuing to rent apartments that are near-luxury for less per month.
My friends who are purchasing homes either move very far from the city or their parents pay for the down payment.
Re: Ask HN: What are idling first-time home buyers doing?
#7This question seems to have an implicit assumption that buying a house is a superior investment than other investment vehicles.
I believe it's been shown that investing in equities outperforms housing historically.
Re: Ask HN: What are idling first-time home buyers doing?
#8[deleted]
Re: Ask HN: What are idling first-time home buyers doing?
#9Investing cash in other places and expecting a big crash. Laugh at me if you want.
Re: Ask HN: What are idling first-time home buyers doing?
#10Saving cash, because the obvious situation is to wait for the crash. It’s going to happen and then I won’t be wasting 2/3rd of my money on the inflated market investment value of what is one of the basic human needs. Real estate as an investment is the sand that a big part of the currently precarious global financial situation sits on. It’s going to collapse in my lifetime and I’d rather be sitting on a pile of cash…
Given how rare a 66% crash is, it seems suboptimal to sit on cash until one occurs.
I think there are only two instances in the past century where prices crashed 66% from all time highs.
At a 7% annual return, you’ll triple your principal in 16 years, at which point you will still come out ahead even after a 66% crash.