Investor · Krum, TX · Member since 2015 · 3 posts · 0 votes
We were considering purchasing our forever home now to take advantage of low rates. We own land and rentals in the area we would be moving back to. Houses and land in that area are at a peak price right now. I have watched numerous speakers predicting a crash in 2021. We are probably a couple of years from retirement. I have 85% equity in the house I live in. I am also debating when to sell this house. Should I wait to see what happens in 2021?
@Ray Miller the word "houseing crash" alone guarantees clicks and tickets, so it is a very popular topic on social media. Fear based marketing, works also really well in politics. I work on the topic a lot and can not find any evidence that we will see a crash that would even remotely look like 2008. Back then we had an oversupply and high vacancies. Today we have not enough houses and too many buyers - 84 million millennials have started to buy and they are not going to move back home.
We will probably see a good amout of forebearance deals go bad, but over 80% of them have a substantial amount of equity and can easily sell the property before having to face forclosure, which neither banks nor borrowers want. Whatever is left and will hit the market is going to be absorbed by demand quickly.
I don't know about Texas, but I expect existing home prices in Wisconsin to keep going up, as they tend to follow new construction prices, which are on the rise and more than double of existing homes.
We pay significantly more for lumber, OSB and plywood. Yesterday I found out that appliances have gotten pricy too, about 20% more for a typical stainless steel kitchen package for a rental - and lead time! Looks like inflation is starting to climb too.
Thats a very personal question base on risk because you are going to be retiring soon. But I also believe you shouldn't wait for the right time to do what you really want to.
@Ray Miller the word "houseing crash" alone guarantees clicks and tickets, so it is a very popular topic on social media. Fear based marketing, works also really well in politics. I work on the topic a lot and can not find any evidence that we will see a crash that would even remotely look like 2008. Back then we had an oversupply and high vacancies. Today we have not enough houses and too many buyers - 84 million millennials have started to buy and they are not going to move back home.
We will probably see a good amout of forebearance deals go bad, but over 80% of them have a substantial amount of equity and can easily sell the property before having to face forclosure, which neither banks nor borrowers want. Whatever is left and will hit the market is going to be absorbed by demand quickly.
I don't know about Texas, but I expect existing home prices in Wisconsin to keep going up, as they tend to follow new construction prices, which are on the rise and more than double of existing homes.
We pay significantly more for lumber, OSB and plywood. Yesterday I found out that appliances have gotten pricy too, about 20% more for a typical stainless steel kitchen package for a rental - and lead time! Looks like inflation is starting to climb too.
I have no expectation of a Housing "Crash" there may be a pull back to a more balanced market at some point, and certainly there will be places that are bad, some are bad right now. But if you look at the big picture, Housing demand is high, people like to live under a roof, so weather it is rentals or owners we have not stopped making more people at a pace faster than others are dying. so for now thats not changing. the difference today vs 2007 is people have equity in their homes by a big margin, and the vast majority have fixed rate long term loans, 2007 a significant number had ARM's. Also Investors are chomping at the bit for a down turn, with money ready to invest, with deals being sparse today, the slightest "better deal" will bring money in quickly. The other factor is Unemployment is low, very low, along with cheap gas and low interest rates, the ship will be slow to turn if it does. Wall Street is the wild card, but Housing tends to lag Wall Street by a year here in the Mid West, and we dont fall hard or fast like the east and west coast does. I think you are waiting for something you want to see happen but realistically if it does, how much equity will you lose selling your home in a down market? So unless you are willing to sell Now risk the loss of a little upside, and rent or live in an RV then buy at the bottom, your question is Moot.
Who knows if and when there will be a crash and what specific markets it will hit.
Krum looks pretty strong for now....and all along the 380 corridor.
Will you buy preowned or build? Where are you planning to move?
Just lots of moving targets....how fast do we resolve Covid? What companies like TikTok come to north Texas with 25000 employees, do college students move online or come back to in person classes. Where do oil prices go? Where to natural gas prices go?
Will banks do workouts and workarounds or do they foreclose? Does the government want us to go thru another housing crisis?
I do not think the real estate market will crash at all. Most of the properties that were bought earlier this year went up 5% - 10% already due to housing shortage and very high demand on buyers side. People can easily sell their house and get that instant equity if anything goes bad with their financial situation. We will most likely see more inventory next year, but I’m pretty sure we are not going to see something like the 2008 market crash.