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Swamp_yankee_ninja t1_jbv1rdy wrote

Patience young millennial, allow the banks to crash again… wait and watch the dominoes fall, save your money and wait for the artificially inflated housing market to burst at the seams. You will know when the time is right.

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cojwa t1_jbvlk7n wrote

For the market to crash the demand has to be lower than the supply

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BlushesandGushes t1_jbvqu6y wrote

which is what happens when the economy dips, unemployment rises, and not everyone qualifies for a mortgage

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Null_Error7 t1_jbw92u2 wrote

When people have 2% mortgages and rents are the same as mortgage payments set pre-Covid people will never sell so supply will never rise and prices will never fall.

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BlushesandGushes t1_jbxbmzs wrote

You have a fair point. Folks who bought with a 2% mortgage will not have incentive to sell. Historically low interest rates were used to stimulate the economy, then the government prevented evictions which meant that roughly 5% of the housing market that is typically in rotation no longer was; further restricting supply.

At some point foreclosures and evictions will need to return and when that happens you will have several years of pent up inventory hitting the market at likely the same time. It is also possible that this will coincide with the rise of unemployment, which is also at historical lows and at some point will return to a more normal rate.

Despite the fact that there is incentive for some with a 2% mortgage to stay put; life will continue. The elderly will die, people will be promoted and relocated, and empty nesters will downsize. Nothing is permanent, just like the fact that in the 1970s mortgage rates exceeded 10%. BITD the opposite thing was being said and folks were saying that people will never be able to buy a home because of the insanely high interest rates and the impact that had on the mortgage payment.

People complain about the economy right now. There is reason to do so; but just wait until the unemployment rate rate spikes and finding a job is more difficult. The amount of housing supply will increase, but those who will qualify for a mortgage will decrease and a portion of the population will remember the good old days of high employment, despite the increase in prices.

The key take aways, especially for young people, is that nothing is permanent. Save your money now, and pounce when the economic changes occur. Buy when the inventory returns. When the interest rates eventually fall, refinance. Just because this isnwhatnhas happened during your early adulthood doesn't mean that the world won't continue to find equilibrium to a state that you have yet to experience.

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5XTEEM t1_jbwd9ay wrote

Never this, never that. Rome didn't fall in a day or whatever. Speaking in absolutes in foolish.

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Swamp_yankee_ninja t1_jbvm843 wrote

A lot of real estate holder may find that they are a wee bit over leveraged. The supply will open up, the values will drop however most won’t have enough capital to get in.

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Distinct-Ad5751 t1_jbvq64b wrote

It’s not 2004, the supply isn’t going to reopen like that.

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[deleted] t1_jbwd0ln wrote

[removed]

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RIDG86 t1_jbwfl5j wrote

If you bought your home, you participated in a market place, and if you bought at a decent prices it’s because it was valued based on how much the house was worth relative to supply and demand for similar properties. So sure your home is not a supply, but it is part of the supply. Not sure what your hang up is..

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etrnlhaze t1_jc9j1jc wrote

UUUH the ppl of the USA are being abused by financial institutions and you serve at their feet , eat their shit and ask for seconds !

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StreamingMonkey t1_jbxytoz wrote

> For the market to crash the demand has to be lower than the supply

This is what people seem to not understand for New England in general. We have a supply issue, despite which way the economy or rates go.

There won’t be a “crash”, so people should simply buy when they see their dream house come available and always be looking.

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voxaroth t1_jby6hmr wrote

What caused it to burst the last time isn’t happening this time.

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Swamp_yankee_ninja t1_jby6rx6 wrote

Never the same way twice, but in the end it’s all about the transfer of wealth. Some will win, many will loose.

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dionidium t1_jbzteii wrote

Fun fact: home prices in Rhode Island fell about 25% between 2008 and 2013. And that was the result of a historic recession caused by massive failures in the banking and lending industry, coupled with an extreme subprime mortgage crisis.

You’re not gonna get the banks failing this time. There is no subprime mortgage crisis. What we have is a lot of demand and not very much supply, because as much as everybody talks a big game about lowering housing prices, nobody wants a bunch of duplexes or triplexes or townhomes or condos built in their own neighborhood.

So everybody is fighting over the same houses, many of which were literally built 100 years ago, because no matter what anybody tells you, the people in this state value living in a museum more than they care about making housing more affordable.

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Swamp_yankee_ninja t1_jbzvr5n wrote

You might want to look at the market tomorrow. In any event the dominoes will continue to fall.

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Icy-Memory-5575 t1_jbvjblb wrote

I doubt it

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Swamp_yankee_ninja t1_jbvmdvj wrote

The dominoes don’t all fall at once, but rest assured they are coming down. Just make sure your money is secure.

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Icy-Memory-5575 t1_jbvmr3w wrote

I think it’ll come down very slowly over time. I mean the next 7-8 years. The interest rate will get to 9-10% just like in 1999 and the prices will come down.

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Swamp_yankee_ninja t1_jbvoaiy wrote

I just have a feeling with current trends that timeline may be sped up. Of course if the housing market crashed again, most people won’t be celebrating.

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