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You point out the Catch-22 that a lot of people miss on this stuff. They get so fixated on increasing their property values because they want to screw someone over when they finally sell their house....not stopping to think that the same thing is about to happen to them when they go to buy one. Not to mention, higher property values means higher property taxes (in some places, anyway).
Yeah like it's cool my 200k town home I bought 4 years ago is now selling for 400k (neighbor just sold for that much).
Except that means that the 350k home I was thinking might be a nice upgrade one day, is 700k.
Like I'm way more screwed over now unless I intend to like sell my home then move to the middle of nowhere. All that higher value means is property taxes like you said. But of course renters are the most screwed.
This is precisely why your home price won't crash. You are locked in and so is everyone else. You literally can't do better, so selling is a bad move.
Yep. Nobody's buying, because they can't afford to, and nobody's selling because they can't afford to.
I just sold my condo and went back to renting. Best choice ever. Feels great to be free.
If it makes you feel good, I'd say congrats. I've never owned a condo and it has different considerations than a home. I sold my first house in March 2021 after I bought our current house in 2020. Both felt like some of the smartest, best times moves. I actually do wish I would have bought a more expensive house in 2020, but we're likely buying more land in the next 2-5 years. Not holding some kind of property right now (again, idk about condos), feels like leaving stupid money on the table.
This was actually my thought process when I got divorced. It probably would have been prudent in many ways to downsize to a condo, since it’s just me, however I could afford to buy my ex out of the house and any percent gains will be off a much higher base. I’m hoping that when I do eventually downsize, that my equity will be higher than if I had a paid off condo. In your example, doubling prices gained $200k inequity for the condo owner, vs $350k gain for the house owner (of course it’s more complicated when you factor in the mortgage)
… so yeah, it would suck for the housing market to crash, or stay down
A housing crash is only bad for you if you’re either outright selling, or moving to a less expensive house.
A bad crash can make you owe more than you can get for the house, which can make it impossible for you to move without losing money. If you lose your job or have to relocate involuntarily, property being cheaper elsewhere isn't much consolation if you are under water on your existing loan.
Yes, so outright selling, or moving to a less expensive house, voluntarily or not.
I have like 15 years left on a 30 year fixed rate. I'd like to move closer to where I work, but I don't want another 30 year loan and a 15 year would currently be a much higher interest rate, so I'm stuck with my house until it's close to being paid off. Doesn't really matter what homes are costing when you have to buy another after selling. Expensive houses only help people who own multiple homes and aren't replacing what they sell.