bostonbubble.com

[Bostonlilypad]

Hey all! I’ve been following this forum and the real estate market since the crash. I was in my mid-20s in 2011 and didn’t have enough money to buy, and ever since I did have enough of a down payment the market has been too expensive for me. I know it’s an insane time to buy a house with the uncertainty of the economy and high RE prices.

BUT as I read more and more there’s a threat of hyperinflation and the impending rate hikes with quantitative tightening this year. With hyperinflation and rate increases will that make RE even more unaffordable around here even if prices decrease? The difference in monthly payments between a 4% mortgage and a 7% one is massive - I had no idea until I actually calculated it yesterday. Also with the threat of hyperinflation my hard earned savings won’t go as far.

I’d love to hear all your opinions, I was strickly in the “this is a horrible time to buy” camp until thinking about these other factors.

[Guest]

[Bostonlilypad]

Thanks for the reply!! I would plan on keeping the house for 10 years, or most likely forever and renting it out if I move. I currently rent but my rent is dirt cheap at $900 in Newton for a 1 bedroom, but my landlord is elderly and her children may sell the home up from under me, she lives on the 1st floor. I’m in my mid-30s and I’m ready to buy BUT I want to be very smart about it too. I work at a tech company so I’m not sure if my wages will increase with inflation. I guess I was just so shocked when I looked and say a 400k mortgage at today’s rates would really be more like a 250k at a 7-8%ortgage rate - I don’t know what type of purchasing power I’ll have even if houses drop 20% here

[Guest]

Keep saving your deposit and paying cheap rent. As rates rise you can find a decent return somewhere on your cash. After rates rise house prices will flatten then fall. Use a larger deposit to buy cheap, rather than a small deposit to buy high. Plus, these prices are STUPID high. The sellers don't deserve the money and the only people dumb enough to buy are foreigners or uneducated Americans.

[bostonlilypad]

[Guest]

[bostonlilypad]

[Guest]

[Guest]

What is your current salary? mid 30's in tech means your wages WILL go up ONLY and ONLY if keep increasing your skill level. If you become too stale or out of date, watch your back for out-sourcing. But you are in full control of your career if you study and work hard.

Eventually u will start a family and good schools and safe area will become a bigger priority than squeezing best deal out of a house. BTW, how do you like living in Newton? fixer uppers in the mid 600's pop up now and again...

[Guest]

[quote="Anonymous"]

[Guest]

[Guest]

Lets use stats from the last collapse (2008-2011) to help answer.

If you are eyeing a place in a town with poor schools or over hour commute, I would say the risk/reward is tilted towards waiting.

However, if you want a good school district the answer is not so clear. I was watching Newton home prices during the collapse.. I thought I could finally watch the prices collapse their and buy something. Wrong

I watched prices drop around 10% with the quality of inventory getting worse. More than 10% and the houses were snapped up, forclosures around 15% off but again were snapped up VERY quickly.

Essentially you have 2 types of people living there
1) live for the schools. for the kids, they will ramen noodle daily just to stay if need be
2) seniors who paid off the house decades ago, set in their ways and have no intention of moving

the sellers were:
seniors who wanted to retire, but could ride out because they didnt really need to sell. over leveraged buyers and speculators. Lack of condos kept the speculators out...

Looking back at what happened in hindsight is really useful to know what might happen again

[Guest]

This time the correction will be different. It will be real. Last time was fake because of Global Central banks and QE. That will never happen again in our life times, and I caution those that think Jay powell's fed will come to the rescue if the markets tank. Won't happen.
Happy shopping

[guest]

[Guest]