this post was submitted on 31 Jan 2024
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Good. Sorry to every mom and pop who treated housing like an investment, but at least you still have the house. Hope they slash the market 90%. Hope everyone who's been waiting for a decade gets a place to live. Hope opportunistic landlords choke and go bust when they can't pay three mortgages on their tenants' salaries anymore. Housing is a human right.
90%? Ha!
Opportunistic landlords? Those are the ones who are going to swoop in and buy everything if it drops 15%.
Everyone waiting for a decade!? Everyone waiting that long who were ever going to own bought 3-4 years ago at record low sub 3% interest rates. That makes more of a difference in what you pay than the price of the house if you're getting a mortgage, which is who you're talking about here.
That last part isn't entirely true: some of us were "waiting" as in not currently making enough to buy, but working on it. I literally just started making enough to consider buying a home when COVID hit and the WFH movement took my plan, threw it down a flight of stairs, and pissed all over it.
Houses would have to go down by nearly half in order to make the total cost of the loan equal what it did with the record low rates during covid and the following year.
A 300k house at today's rates costs about the same over the loan as a 600k house at the record low rates, about 900k over the life of the loan, to paint a picture of how much rates effect your buying power. And everyone locked in to those rates will never sell, which is everyone. Why walk away from that loan. It makes more sense to rent out the house to pay the mortgage than to sell. I know that's what I'd do, I'll never walk away from this loan.
So unfortunately, folks who missed those record low rates likely missed the bus, buying will still be possible but it will be much more of a slog, buying a shitty starter home and throwing tons of you're money into mortgage payments that go mostly to interest.
Pretty much, just another thing that got added to my gigantic pile of "reasons to be extraordinarily depressed in perpetuity" over the last like decade now...
Life is different for everyone, but for me it's really amazing how it just only gets worse year after year.
Dang I'm sorry to hear that. I feel like I caught the last good wave. I learned to code when the bootcamps we're booming and cheap and you could get a tech job anywhere easy. Worked my way up to senior engineer and got really good in time to avoid all the layoffs. Took my permanent remote silicone valley salary and moved to a small town and bought my first house on acres of forest right as lockdown hit full swing. Got locked into that sub 3%, got married and have a kid, wife doesn't have to work, and my salary is very comfortable in this town which is nestled into stunning natural beauty, where the redwoods meet the California coast. It's paradise.
Maybe there's abother boat coming.
I locked in a sub 3, and this is basically in my opinion the only plan, I can never walk away from this mortgage, the only way Im not in the house is via renting it out, the difference in prices now and when i bought are almost comically high and its only been 4 years.
Yeah it makes zero sense to give up the loan. It's the closest to a free loan any normal person can get. I refinanced even like 6 months after buying. The value of the house had gone up by like 100k, so I pulled out 50k, got a lower rate, and my monthly went DOWN. My wife was like, where's the catch this can't just be free money, and I'm like, actually it kind of is.
It's definitely not going to slash it 90% to do that you'd have to make moves to guarantee houses are always losing value, much in the same way cars do, so that you have a thriving used house market for people that can't afford, or don't care, to buy new.
That means either implementing the construction of houses with materials that have a short life, or forcing houses to be torn down after, let's say 50 years.
I'd prefer just getting rid of ownership of property, but i dont know if we are ready for that as a society.
This is basically how it is in Japan and why Tokyo is actually affordable to live in. https://youtu.be/d6ATBK3A_BY
Of course, this might not be implementable anywhere else.
That's not the real reason housing in Tokyo remains affordable. The real reason is they allow developers to build enough housing to meet demand. Places that were small hamlets filled with single family homes 30 years ago are now very densely populated and filled with midrise apartment buildings. Good luck trying to get anything like that built anywhere in America, or most of the western world.
Gift link: https://www.nytimes.com/2023/09/11/opinion/editorials/tokyo-housing.html?unlocked_article_code=1.SE0.FEn5.DUkcV7dCs21X&smid=nytcore-ios-share&referringSource=articleShare
"affordable"
Seems relatively affordable for a city considered to be one of the most economically important cities in the world.
Affordable, that's God damn cheap idk what salaries are in Tokyo but that sounds pretty good.