cross-posted from: https://lemmy.world/post/3560407
Considering how crazy expensive accommodations have become the last couple of years, concentrated in the hands of greedy corporations, landlords and how little politicians seem to care about this problem, do you think we will ever experience a real estate market crash that would bring those exorbitant prices back to Earth?
I (age 60) remember buying my condo in 1991 or so, interest rates about 7% with a VA-guaranteed loan. My parent's first mortgage was 2% or 3% but my mom, a Realtor, said those days were permanently gone. (They weren't. I had that in the house I bought in 2010.) But it felt forever at the time, and she thought it would be forever.
Nothing is forever. It may crash, but something else we can't imagine might happen too. I think we all agree the present situation is unsustainable.
I was looking at the numbers up until about May/June of this year. What drove housing prices down before doesn't seem to be driving them down now. You plentiful construction, relative to now. Construction workers haven't recovered from 2008. There is still a running shortage of construction workers.
There is also a COVID backlog of started but not finished homes. Because supply chains were backed up. The cost of soft lumber, sheet goods, and milling are all near all-time highs. Once these homes start hitting the market, supply will go up and maybe prices will go down a little bit, but not 10-years-ago-low
If commercial real estate crashes then some of those investors might have to unload their residential assets to offset losses. That's about the only scenario I can see where we get a sudden flood of supply.
Defaults on residential is still pretty low. Credit defaults are climbing but not outside of 1 std deviation, yet. Lease defaults are low. So with restricted supply, few being built, fewer workers, more expensive materials, and everyone paying their loans, I can't see a sudden crash anytime soon. Also it doesn't look like mortgage fraud (people lying about their identity or their worth) is particularly high either. Though that stat is much harder to track.
IMO housing prices will go up before the end of the year.
I think housing costs will stay high and the next "innovation" will be disposable housing or something vile. That'll be the only way you can afford to own something. You buy a house you throw away in 10 years.
I think the disposable housing is already a major concern in regards to small manufactured homes on lots leased to those in less than ideal financial situations.
Sure, as long as you redefine your concept of "housing" to be reduced to a tent or less.
