They are sitting very well financially.
Still, in a typical year (pre-pandemic) 12.5% of homes were listed for sale, (got married, got divorced, offered a better job, lost a good job, retired, didnât need vacation home anymore or just wanted to test and see if they could get a great price etc.)
Fast forward from the Dec 2021 end of the jackpot, and the chart below roughly 1-in-4 homeowners is now in some sort of âgolden handcuffsâ and within 6 years A LOT OF homeowners will be.
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Idea being folks will learn âI got 8 jackpot yearsâ
does not mean âI never need to be concerned about my house losing value prices will stay up here forever and besides, I am entitled to a lifetime of jackpot years forever.â
I look forward to houses going down in value for a change.
Itâs always rough.
I always want people to do well financially, especially when they do well because of things like working and saving.
I am as bearish on the housing market as I am on the stock market.
You pretty much describe NJ to a tee. However, if you donât mind driving a little further, you can find a house in the 400k range in a decent area. My cousin, first time buyer in his early 30s just got married and bought a house about an hour south of me for just under 400k. But his parents did give them a large monetary gift. He said he couldnât do it otherwise.
Apparently, banks donât trust that these 70%-appreciated home prices will hold,
so they are not giving out home equity loans.
One way of thinking is âWell they are probably right.â
Another way of thinking is âFree markets are stupid. PhDs are not smart unless they work for central planners. Central planners should enact plans so banks make these risky loans and sell them to the government immediately.â
Is it more a function of the low supply of homes available or a function of the low supply of people able to afford the homes?
Both. (supply always equals demand.)
People who sell their homes have to live somewhere.
According to WSJ:
38% of homeowners (nearly 80% of those still paying their mortgage) could not afford their homes if they were buying today.
Home construction has definitely kept pace with population growth, but it has not kept pace with the # of households.
Before:
- marry young and stay married (2 households become one)
Now
- marry late, if at all, get divorced (approaches twice as many houses needed per capita)
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Before
- buy in 20s, sell to upsize, or for job transfer, for retirement etc.
Now
- 38% of homeowners (nearly everyone with a substantial mortgage payment) cannot afford to move because they cannot afford their home if they were looking today. (Golden handcuffs)
Itâs probably both, by much more the affordability. I canât afford the house Iâm living in if I were to buy it. Itâs over half a million dollars. What do you get for that? A 1500Sq Ft. 3BR colonial with a 1 car garage and 1 1/2 baths. Not impressive. I donât have a mortgage. I bought it in 2000 for 187k.
My cousin and his wife make a combined income of a bit over 100k, and they needed their parents to help them buy a house.
Kinda sorta good news for those of us who own one or more homes.
Although the median sales price of homes is declining, that reflects âsmaller homes are being bought.â According to the Case Shiller Index, (which is a better measure of an existing homeâs value,) the price of existing homes increased nearly 1% Y-o-Y.
(ttm ending Feb)
