A global house-price slump is coming and it will be scary

Walt said:
If rents go up, people will invest. With rents uncertain, people are pulling back.
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Rents have been going up though while investors have pulled back. Rents increasing is obviously good for investors but if your cost of capital is higher then increasing rents don’t guarantee the necessary returns will pencil out
 
Primavera said:
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Over the past decade owning a house has meant easy money. Prices rose reliably for years and then went bizarrely ballistic in the pandemic. Yet today if your wealth is tied up in bricks and mortar it is time to get nervous. House prices are now falling in nine rich economies. The drops in America are small so far, but in the wildest markets they are already dramatic. In condo-crazed Canada homes cost 9% less than they did in February. As inflation and recession stalk the world a deepening correction is likely—even estate agents are gloomy. Although this will not detonate global banks as in 2007-09, it will intensify the downturn, leave a cohort of people with wrecked finances and start a political storm.

The cause of the crunch is soaring interest rates: in America prospective buyers have been watching, horrified, as the 30-year mortgage rate has hit 6.92%, over twice the level of a year ago and the highest since April 2002. The pandemic mini-bubble was fuelled by rate cuts, stimulus cash and a hunt for more suburban space. Now most of that is going into reverse. Take, for example, someone who a year ago could afford to put $1,800 a month towards a 30-year mortgage. Back then they could have borrowed $420,000. Today the payment is enough for a loan of $280,000: 33% less. From Stockholm to Sydney the buying power of borrowers is collapsing. That makes it harder for new buyers to afford homes, depressing demand, and can squeeze the finances of existing owners who, if they are unlucky, may be forced to sell.

https://www.economist.com/leaders/2022/10/20/a-global-house-price-slump-is-coming
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Nice! Daddy needs a mansion!
 
It's something that has always occasionally happened.

A house is a place to live. Treat it like an investment, and you're not making it a home.

Real estate prices deflate from time to time, market corrections are made, and then they go right back up again in time.

It's only a problem for those looking to sell now.

When it's not a problem for them, it's a problem for those looking to buy.

Real estate, like life itself, has always been about timing, but long term, it retains its value because it's real.
 
Trumpet said:
At the rate that housing has been appreciating, it's very clear that this is not sustainable, just look back at what happened in the past, ( the S&L crisis, and then the great recession of 2008) for guidance.
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One of the reasons I'm looking to retire elsewhere is I can't afford a decent property in the Seattle area anymore.
 
Concart said:
Home prices are at least 25-30% too high. Interest rates are going to have a downward impact on that, as they should. The question for the moron who wrote the OP is..... do you want inflation or not? I guess if it's the value of YOUR HOUSE inflation is pretty hunky dory. Since rents reflected the largest share of inflation last month, this should be good news. You can't have it both ways. If you bought during the pandemic and you are house poor, THAT'S YOUR FUCKING PROBLEM. Been there, done that. Try some fiscal responsibility.
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Even the MAGA's are correct in this thread. Property prices in Seattle, for example, have been taking off for years. I don't want a "bubble burst", but a slight correction downward would be very nice - especially for those of us tired of paying rent.
 
LurchAddams said:
Even the MAGA's are correct in this thread. Property prices in Seattle, for example, have been taking off for years. I don't want a "bubble burst", but a slight correction downward would be very nice - especially for those of us tired of paying rent.
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Agreed. The problem is that they whine about high housing prices, and then they whine when the price of a house comes down. So which one is Biden's fault. I can't wait to find out.
 
Concart said:
Agreed. The problem is that they whine about high housing prices, and then they whine when the price of a house comes down. So which one is Biden's fault. I can't wait to find out.
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Inflation is worldwide. I guess they want to make Biden responsible for the price of cheese in France. MAGA's don't know which end is up here. I've not found one MAGA bitch here smart enough to try to explain to me why trump's tariffs and tax cuts didn't make us all billionaires! They can't defend their own policy.
 
Walt said:
If rents are going up, then investors will want to make that money, and will invest in housing. Capital follows return on investment.
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yes but interest rates put houses out of reach. they were WAY out of reach for those trying to escape rent already. Of course Blackrock etc will be hoping to move all these houses they've been buying. they will get a bad surprise.
 
Celticguy said:
who cares ? I'm not living in a mohadan country so its meaningless.
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There are plenty of Muslims in the US. The point of posting about Islamic mortgages though is to indicate that nobody has to be a slave to usury.

Usury (/ˈjuːʒəri/)[1][2] is the practice of making unethical or immoral monetary loans that unfairly enrich the lender
https://en.wikipedia.org/wiki/Usury
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Islam forbids interest-bearing loans

What is an Islamic mortgage and how do they work?

https://www.unbiased.co.uk/life/home...w-do-they-work
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If it was called a ' Christian mortgage ' everybody would want one.


Haw, haw.....................................haw.
 
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Trumpet said:
If you're considering New Hampshire, then look at the very northern part of the state.
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I've been there, actually, and to Maine. My local team did a "tour of The Colonys", we called it, where we visited most of the New England states. We visited DC on that trip as well. We had a match in August on the lawn in front of the US mint.

We camped on same field we had our match in Maine. I remember Vermont, Maine, New Hampshire being very pretty. I went back to Vermont years later on bus. in the fall... OMG the tree leaf colors and the old Cemetaries everywhere is what I remember.
 
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