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Homes in 97% of U.S. cities are overvalued, Moody's says

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Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#61

Post by beckingz »

alimov wrote: post #40
DoubleDerper wrote: post #31

Earlier quoted context omitted.

Relative to which assets? Stocks? Cars? Forex? IP? Crypto? Genuinely curious because everything is more expensive than it was before. If everything is overvalued, then nothing is overvalued [relatively]

> If everything is overvalued, then nothing is overvalued [relatively] Could it be that maybe peoples work is under valued relative to the value they help create?

Yes. This is why we're seeing a bunch of whining about a labor shortage, because people can now choose to be paid a little more fairly.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#62

Post by nwiswell »

coward123 wrote: post #7

I can’t help but think of that saying “the market can stay irrational longer than you can stay solvent.” Yes, prices in many markets are very high and appreciating at a rapid clip, but if there are buyers, competition, and houses are continuing to move quickly, then it’s a bold statement to say they are overvalued and that we should predict a significant decline.

> if there are buyers, competition, and houses are continuing to move quickly, then it’s a bold statement to say they are overvalued and that we should predict a significant decline.

No, for the simple reason that (most) people buy homes with mortgages. Take a look at the 30 year mortgage interest rate over the past few months.

The total cost to own a newly purchased home is what matters, not the actual sale price. That's mostly paid by the bank.

Even if buyers are prepared to absorb the massive increase in total cost of ownership necessary to keep prices moving upward, it probably doesn't matter because many prospective buyers will no longer even satisfy the mortgage DTI qualification at current prices.

You may object that some are buying with cash. While that's true, it's not enough of the market to sustain prices.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#63

Post by lupire »

fraa-orolo wrote: post #54
toomuchtodo wrote: post #39

Earlier quoted context omitted.

How long is the rate fixed for?

The rate is based on Euribor [1], fixed for 6 months in my case (and commonly most everyone) but anything between 3 to 24 months was possible. [1] https://en.wikipedia.org/wiki/Euribor

Wow. What's going to happen your payment when rates go back above 0 to stop rampant inflation?

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#64

Post by lupire »

vkou wrote: post #10
avelis wrote: post #2

It doesn't help that corporations buy all these houses up at full price and well above listing just so they can use it as rental income.

Listing price is a red herring. Nobody selling a home actually expects to only get listing price for it.

No post body was provided.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#65

Post by mberning »

In my city, 10 years ago, a nice starter home was around 150k. Now you can’t buy a dump for less than 200k. And those same nice starter homes are 250k+. It’s not hard to imagine why. People flipping burgers can easily make 40k per year now just in base pay. A single person working an incredibly low end job now makes enough money to get approved for nearly 200k loan.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#66

Post by nemo44x »

elephanteeee wrote: post #56
nemo44x wrote: post #43

Where I live, in an affluent town on the east coast, homes have been going for 50%+ over ask. And the asks were high. Something is broken. Homes that wound have been listed at $1,000,000 in 2019 are going for $1.750,000 today. Interest rates going up should cool it off but I fear it will break much of the rest of the economy. There was a massive mismatch in executive policy and fed policy and here we are.

What’s the mismatch? Biden got a trillion or two in handouts and Powell bought up all the bonds. Now Biden is taking a step back (not completely but not another trillion) and Powell said he’ll start selling.

Halting rent and college tuition paybacks while also spending trillions for people not to work and businesses to not open while the fed also cut interest rates continuously.

They decided to test MMT and it failed so badly.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#67

Post by lupire »

seanmcdirmid wrote: post #58
torbTurret wrote: post #15

Earlier quoted context omitted.

Such a simple analysis ignores e.g. the higher wages in the US offset by the lack of social nets

Higher average wages, but not do much higher median wages. Unless those rich people who are driving up the average are giving their money away, the ones who are closer to the median are in a sore spot.

Average wage is always reported as median.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#68

Post by nemo44x »

fraa-orolo wrote: post #54
toomuchtodo wrote: post #39

Earlier quoted context omitted.

How long is the rate fixed for?

The rate is based on Euribor [1], fixed for 6 months in my case (and commonly most everyone) but anything between 3 to 24 months was possible. [1] https://en.wikipedia.org/wiki/Euribor

I wish you well but the way things look, you’re completely fucked. Your interest rates have been so unsustainably low for so long. And now things are going up fast and will likely continue to due to rapid inflation.

Good luck!

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#69

Post by lvl102 »

There’s something happening with Euro/JPY vs USD that is forcing a significant inflow into US assets. It’s going to continue because: (1) EU kicked the can for far too long and they cannot meaningfully raise rates without facing the realities of the debt crisis of 2010-12, and now made impossible due to Ukraine, and (2) Japan is committed to driving down the yen even further. USD is king and real-estate will reflect that reality.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#70

Post by [deleted] »

mumblemumble wrote: post #42
DoubleDerper wrote: post #31

Earlier quoted context omitted.

Relative to which assets? Stocks? Cars? Forex? IP? Crypto? Genuinely curious because everything is more expensive than it was before. If everything is overvalued, then nothing is overvalued [relatively]

I remember a family member saying almost exactly the same thing to me in a conversation about the real estate market that took place in early 2008.

[deleted]
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