Is there a serious housing market bubble forming again?
Today while I had CNBC on in the background (yeah yeah I know but you can't tune out what is going on) I heard the CEO of Zillow, Spencer Rascoff, make one of the most insane arguments for housing being a good investment and "safe" right now!
46% of home buyers are now under 36. The millenial buyer is the buyer...
Millenials are getting "creative" and borrowing from friends and family for their down payment and due to a shortage of homes in the lower price range, are purchasing more expensive homes than they can afford.
- Spencer Rascoff - Paraphrased from CNBC Live broadcast 11am September 27, 2017
Forgive me for paraphrasing, if I can find the video from this morning's cnbc live feed I will update. But the word he used a few times was "creative". Millenials are getting "creative" he suggested in order to purchase a first time home. He also went on to say how home prices have been sky rocketing and that it is a "sellers market". Funny he says the millenials are the ones buying now at all time highs..
Sounds like NINJA loans from the early 2000s all over again!
Buy a home you can't afford, with money you don't have, in a market where housing has gone ABOVE the ALL TIME highs in 2007/2008 (before the last housing collapse)!
To me it sounds like you have to be slightly insane to even consider buying a home right now UNLESS you can afford the down payment, have a stable long term career AND lock in your interest rate with today's LOW rates (NO Variable Rate Adjustable Crap!).
Do NOT let these banking wallstreet crooks ruin your credit, steal your time and make billions off you, family and friends AGAIN!
Remember the banks will take all these loans and bundle them together into a form of "Mortgage Backed Security" that they then earn HUGE fees selling to YOUR 401k programs! Remember pensions being wiped out or reduced to pennies on the dollar? That is the defaults in the underlying mortgages that failed which trickled upward to the MBSs the banks sold to the people that were in charge of managing the pensions and retirement plans!
If you are unfamiliar with how the bank made things in 2008 so bad, you should go read about MBS and the 08 housing collapse OR just watch the hollywood movie with Steve Carell "The Big Short":
[Update Below]
My Opinion
If you are about to buy a home you should re-consider! I think now is a bad time to be buying unless you really know what you are doing OR out right NEED to.
Renting until the next crash, THEN buying when you have more cash on hand AND banks are offering even better rates (they will have to cut them to bail out the economy again) will most likely be a smarter move!
nice post !
I sold my house this past summer. And I made some money! :) It was near the highs of 07-08 and we wanted to get out anyway. We will not be buying a house until the market crashes again, the prices are too high.
Smart! Renting is just too cheap now, lock in a 2-3 year lease at a good rate with a good landlord and wait for the next crash OR even buy up some land now that is still cheap and start building. Construction loans are still relatively cheap and building is always cheaper than buying all things equal (long term investment).
Nice explanation, you are wright ...
You are very nice, thank you very much
Great info! I will wait to buy 'til my cryptos go to the moon. Forget the Lambo.
yes, let's get to the crypto moon first
Agreed I am keeping my money in crypto until the next housing collapse and our crypto buying power is many many times what it currently is. We will be buying homes with a few coins!
market history is cyclical
agreed my post from last week regarding macy's stock shows this cycle is playing out. https://steemit.com/investing/@bigdeej/how-macy-s-chart-could-have-predicted-2008-crash-and-a-nearly-risk-free-trade-potential
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And it is a sellers market. I had 10 offers the first day my house was on the market.
^^^ Exactly! The moment they start telling you to buy and that home prices are going higher and higher and give BS ways to access the loans it is time to get out or be prepared to ride it out.
Look if you have $100k in the bank and want to take out a $200k mortgage to buy a home you plan to live in for 15+ years, the market probably isn't of issue. My concern is those millions of young people under 40 buying that first home that is over valued, with an adjustable rate mortgage, borrowing the down payment from family/friends! That is just a recipe for disaster and not something we should encourage!