Housing prices are nuts, paid $17 million now

I went back home to Serbia last summer after 12 years of not visiting.

was reeeeaaaally tempted to sell my house which has tripled in value in 8 years and move back home.
Average pay there is thousand bucks a month. A condo is 80 to 150k. A house with some land is 200k. I can sell my house for 1.2 mil and walk away with 800k.
Part time work/remote work/investment properties and I’d be set. I had to think about that hard.

 

Just make sure you got something here to come back. Those fuckers will start killing each other in near future
btw. I am next door, same shit.

 

I'm considering doing the same and heading back to Ireland.

I'll be fiddy in May, pulling just enough from our company to get me by here in California.

My brother and I already have a 10 acre working farm/horse breeding facility there.
Our parents are there now, actually my wee brother's been there since August 2021 helping out as my dad had heart surgery 6 months ago.
Wee brothers loving it, and dad's loving having him there helping with the horses.

The rat race was fun in my 20's and 30's, 40's have been a drunk fest.

I'll have to wait till March to firm up future plans as we've a hearing regarding flood damage to the house here, due to a water main break/flood from Jan. 2019.

 

In Canada just outside Toronto or within an hour the hose prices have gone bananas. If I sell today I could make around $800k after being here 13yrs and spending around $60k in upgrades. If you don’t offer $100k over asking you’re not going to be considered.

 

Yup.

GFs looking to buy a property....London. Run down Pieces of shit listed for 500k are being bid up to 650k, In DECEMBER! normally in the north, house buying goes dead past september and doesnt pick up till march. Not anymore.

So ultimate "hell yea" plan is. Rent the house here, i already rent out basement, combined income will cover mortgage+property tax + $1000. I tell work i wanna work remotely, phone support, training material creation, occasional fly to North America for a few weeks at a time for work.
This would let me "try" living abroad without loosing my house here. If i end up hating it, it goes to shit, whatever. I got somewhere to come back to.

Man thats like....dream scenario for me.

 

This thread is depressing....i swear im gonna get a $50k double wide on 2 acres....$75k and done. Call it a life.

 

If we stay here my kids will never be able to own a house. They’re even having bidding wars for rentals. If you want to leave in the shittiest hole where you’ll end up with a meth head trying to live in your shed, $500k.

 

That 2 acres up here will cost you $350k lol

 

a postage stamp that a double wide would barely fit on just up the road from me just sold for 250 grand

 

Well just want to say life is good being a realtor. LOL

 

where i am in cincinnati, 10 -20 miles in any direction gets you 2 acres for $1.5 mil or $25k.

neighbors place somd for $390k recently, 3 houses across the street are upwatds of $500-600k…. My place sold for $65k in ‘08. I offered my landlird $25k and he consudered it.

 

This might be worth it's own thread but....

Years ago, seemed like standard auto loan was 5 years. Now you can get 6, 7, 8 years.

Why haven't mortgages changed as well? I would think a 40 or 50 year mortgage would make the current housing market more affordable for lots of people.

Would that just drive up prices even more?

 

I think that your answer might lie somewhere in this post: (basically there's little incentive for the industry to do so)

 

Loan terms longer than 30 years are considered "Non-QM", not eligible to be sold to Fannie and Freddie. This presents a lot of liquidity problems for lenders and are typically avoided. You covered the affordability issue with your last sentence as pricing would simply increase even higher anyway. The average consumer is buying on monthly payment, not transaction price. If you tell them 2500 bucks a month will get you 500k one way, or 600k the other way (made these numbers up, but you get the idea). They are going to take the 600k nearly every time. Which is what you saw happen with auto loans. This is one of the reasons that terms longer than 30 years are Non-Qualified Mortgages.

 

I feel like I make a lot more money during downturns. When it's hot, everything I make is on the retail side (lending primarily for me), when it's stagnant, everything I make is on the investor side. Which has the benefit of significantly lower tax rates as well. Although you agents get to have your cake and eat it to in that regards.

 

I would say interest rates have been well below 5% for the majority of borrowers over the past 2 decades so what would be the point of churning refis other than to make brokers & closing some loot? I feel like the "cheap money" generation is spoiled in borrowing regards. There is no incentive to pay a loan off and I cant see borrowers benefiting even at 5% unless there is something Im missing?

My first mortgage would have cost me more than I paid for the place, in interest, if I carried the whole 180 month term.

 

To your first point, it resets the amortization schedule. So the lender is now making more in interest at 2.5 on a new mortgage, than they were on 5 percent on a loan that was ten years old. You can play with the numbers and see how this plays out on any online mortgage amortization calculator. The first several years of a mortgage are nearly all profit. So if people keep churning their loans chasing a rate figure, the lender/investor is making a bit in fee income and enjoying a reset on the profitable portion of the loan. The customer is trading total financial outlay for cashflow at that point without realizing it. The customer is just going to come back after they max out their cards or buy a car and the cycle repeats itself.

To your second point, yes, you are going to pay out 2-4 times what you borrowed if you simply make the minimum payment. I think the confusion is that most people seem to think that mortgage loans are calculated on simple interest like a credit card, and it's simply not the case. Even making minimal additional principal payments drastically alters this scenario. It's just that 99 percent of people pay whatever the "minimum" is for everything and generally live paycheck to paycheck. Particularly people under 40 I notice in my experience.

Now if someone is refinancing an old loan and taking the additional cash flow and putting it into investments that are returning more than they are paying out, then yeah, makes total sense. That's a rare client though. Most of them max out all their consumer debt, get over their heads. Refinance to make ends meet. Then suddenly have all this "extra" money and simply repeat the cycle. I personally talk many people out of refinances, though ultimately they just end up calling someone that tells them what they want to hear and do it anyway. Usually because they want to buy something shiny.

 

Here is a picture to illustrate what I'm saying. I just snagged this off a google search, you can run your own scenario on any calculator as I mentioned before. Note, the first several years of the mortgage is all interest. People refinancing constantly are just staying in the term of the loan that is primarily interest, the debt line is decreasing slowly and the equity line is minimal. Now, you do get some smart people going from a high rate, long term, to a low rate, shorter term. But again, pretty rare overall. I know all the smart ones will chime in and say they are paying ahead, paid cash or own their house free and clear, and to them I say congrats. But your average person is kinda dumb and will never own their house.

 

I bought my first house 4 years ago, I was fine with 4.5%/30 year at the time but ended up refinancing to a .2.375/15 and couldn’t be happier with that decision. It’s crazy to me now when I see people getting 30 years, why give them all that interest up front just to save a little money in the short term?

 

"affordable" for a house is ~3x your annual income, imho.