fishythepete

fishythepete t1_j5vc64o wrote

Reply to comment by possiblecoin in WHY ARE HOUSES SO EXPENSIVE by mommy2boy

Yes. And homes were much cheaper. When I said the cost to buy has never been higher, I meant it literally.

Take a home that was valued at $250K at the peak of the last RE bubble. Even if that home were on sale for $250K today, the actual cost of that home is significantly higher than it was at the height of the last bubble because interest rates are significantly higher today than they were then. Prices are higher too. And if you add the impact of interest rate increases to the price increases the housing market has seen over the last 12-18 months on monthly cost to buyer (instead of just focusing on asset price inflation), the rate of change is just unprecedented.

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fishythepete t1_j5uzjf3 wrote

Reply to WHY ARE HOUSES SO EXPENSIVE by mommy2boy

> Some people say there will be a crash but I just don’t believe it anymore.

Instead of operating on belief, look at evidence. The run up in home prices since COVID is close to what we saw 2005-2008. Today we recognize that was an asset bubble driven by lax underwriting standard, poor transparency in the MBS marketplace, and low interest rates. At the time, a lot of folks looking to get into the housing market thought it was a “new normal” and bought in lest they miss their chance, including some friends of ours. Here are two anecdotes:

  • Friend 1 bought a 2 Bed / Bath condo at the height of the market for $230K. They sold in 2016, the condo finally reached that $230K valuation again last year. The sale proceeds didn’t even cover the 3% they put down on their new place.

  • Friend 2 bought a 2 Bed / Bath condo same neighborhood as the market started cooling for $200K. Friend 2 stopped paying his mortgage, and quit his job and worked under the table. His wife kept working. They got their loan adjusted down by about $100K, and made a decent chunk of cash when they upgraded.

Sometimes bad decisions are rewarded and good ones are punished.

>Is there any serious advice for someone looking to purchase their first home?

Wait. With interest rates where they are, the cost to buy has never been higher. Rising interest rates coexisting with rising home prices is an anomaly that cannot continue. If interest rates hit 8% (from 2% when I refinanced last year) that would doubled the monthly mortgage payment at the same purchase price. It’s unsustainable. If you look at the impact of rising interest rates were actually hitting value increases > the run up to the last bubble.

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fishythepete t1_j5tk604 wrote

Reply to comment by CatsNSquirrels in The inventory of houses suck by KindaEgotistical

As a former landlord, and somebody who’s been in that situation, here’s an unethical life pro tip - don’t tell them you’re leaving to buy a new house. Tell them you (and partner if applicable) just lost your job(s), and your hyper specific industry niche as a gerbil pigmentation specialist means you’ll be looking for at least a year. You’d move back into your parents house to save money but you can’t afford to pay the termination fee and the job market is better where the apartment is so you’re going to just stay in the apartment and hope things work out.

Your landlord / property manager is now picturing a 3-12 month late payment / non payment / eviction cycle that will lose them money and be a lot of extra work, and will be very amenable to you just turning over the keys on any day that works for you.

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fishythepete t1_j48jqt3 wrote

Reply to comment by brick1972 in Share your opinion about Fane Tower by quinntronix

>If your attitude is "we have to take what we can get" you end up with a lot of shit.

And if your attitude is “our way or nothing at all” you get Providence. The difference is that reasonable people can disagree on what’s shit, but nothing is the same to everyone.

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fishythepete t1_j474i58 wrote

Reply to comment by cheekiewalrus in Share your opinion about Fane Tower by quinntronix

>Minimal amounts of research would have brought you to this conclusion but you’ve opted to do zero.

Hmm…. Tell me again, how many new housing units built in Boston in the last 10 years, how many new residents, and how many new jobs.

Building the towers didn’t cause more people to move to Boston. It’s emergence as a biotech hub with many high paying jobs did. The new luxury construction has net reduced the impact of this growth in demand beyond what it otherwise would have.

People were moving to Boston for those jobs. The only question is how many locals would no longer be able to compete for housing as a result.

But hey - I’m the one who hasn’t done research. Sure.

ETA: Just to be exceedingly clear - the construction of the fane tower isn’t going to cause people to move the PVD. People making the decision to move to PVD (ie people who live in Boston but now only commute 1x / week post-COVID) do so because it offers something the alternative doesn’t (in the above example, lower CoL). The fane tower will reduce the impact some small number of those people would otherwise have on the housing market when they financially outcompete locals for existing housing.

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fishythepete t1_j46o58q wrote

Reply to comment by PigpenMcKernan in Share your opinion about Fane Tower by quinntronix

Unless the increase in the quantity of housing creates an increase in the quantity demanded for housing (which would be exceedingly unusual), increasing the supply of a good reduces the the value, and thus the cost, of all goods on the market.

To break it down, someone moves here from Boston. They decide to live in the fane tower instead of outbidding a local on a nice place in fox point. As a result, the local is no longer outbidding locals in slightly less desirable (and pricy) neighborhoods. Etc…

There is literally zero legitimate controversy on the topic - increasing the quantity of housing available lowers the cost of housing. Period.

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