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So when’s the housing bubble bursting?

Dr. Truth

Dr. Truth

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4 Dimensional said:
Fam, there are some suckers out there that wildly overpaid for a house that isn’t going to hold value. Especially in these rural areas that doesn’t have a high economy.
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Location matters. It’s why people pay a lot to live in certain metros. Rural and shitholes will not hold value. NYC, The Bay Area, Los Angeles etc will not drop. It will level off but the high values here will remain. People over paying in places like Texas because they get killed on property taxes. Mad people left California thinking shit was sweet until they saw them property tax bills . Now they stuck paying California money in Texas
 
DC_Dude

DC_Dude

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Dr. Truth said:
Location matters. It’s why people pay a lot to live in certain metros. Rural and shitholes will not hold value. NYC, The Bay Area, Los Angeles etc will not drop. It will level off but the high values here will remain. People over paying in places like Texas because they get killed on property taxes. Mad people left California thinking shit was sweet until they saw them property tax bills . Now they stuck paying California money in Texas
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100%
 
OutlawR.O.C.

OutlawR.O.C.

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4 Dimensional said:
Fam, there are some suckers out there that wildly overpaid for a house that isn’t going to hold value. Especially in these rural areas that doesn’t have a high economy.
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That's the key and the takeaway from what happened in 2008.

People were overpaying for houses in new/unestablished areas that totally went under once the market crashed.

Same thing happened to Hammer and Holyfield.

They built those luxurious, beautiful mansions in areas where other people who could afford them wouldn't want to live so once their money got tight and they tried to sell they couldn't get anywhere near what they paid and had to eat the loss.
 
OutlawR.O.C.

OutlawR.O.C.

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Dr. Truth said:
Location matters. It’s why people pay a lot to live in certain metros. Rural and shitholes will not hold value. NYC, The Bay Area, Los Angeles etc will not drop. It will level off but the high values here will remain. People over paying in places like Texas because they get killed on property taxes. Mad people left California thinking shit was sweet until they saw them property tax bills . Now they stuck paying California money in Texas
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Sort of true.

Location matters absolutely but property in smaller cities/towns can be just as steady and reliable as the larger markets as long as they are well established areas.
 
4 Dimensional

4 Dimensional

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Dr. Truth said:
Location matters. It’s why people pay a lot to live in certain metros. Rural and shitholes will not hold value. NYC, The Bay Area, Los Angeles etc will not drop. It will level off but the high values here will remain. People over paying in places like Texas because they get killed on property taxes. Mad people left California thinking shit was sweet until they saw them property tax bills . Now they stuck paying California money in Texas
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This is my city all day. We don’t have a high economy. Not nearly on the level of people that are buying these houses. Many people will definitely be stuck. House prices here will most certainly drop.

Plus, my city is old as fuck. Lots of baby boomers dipping out.
 
Dr. Truth

Dr. Truth

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OutlawR.O.C. said:
That's the key and the takeaway from what happened in 2008.

People were overpaying for houses in new/unestablished areas that totally went under once the market crashed.

Same thing happened to Hammer and Holyfield.

They built those luxurious, beautiful mansions in areas where other people who could afford them wouldn't want to live so once their money got tight and they tried to sell they couldn't get anywhere near what they paid and had to eat the loss.
Click to expand...
That house hammer had was in Fremont it would be worth double or triple what he paid if he kept it. The median home price in Fremont is a million dollars . That’s Silicon Valley now.
 
4 Dimensional

4 Dimensional

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OutlawR.O.C. said:
That's the key and the takeaway from what happened in 2008.

People were overpaying for houses in new/unestablished areas that totally went under once the market crashed.

Same thing happened to Hammer and Holyfield.

They built those luxurious, beautiful mansions in areas where other people who could afford them wouldn't want to live so once their money got tight and they tried to sell they couldn't get anywhere near what they paid and had to eat the loss.
Click to expand...

It’s definitely happening again. We got a lot of new neighborhoods coming up and overpricing the houses. We’ve already seen a 20-30k price cut in some of these new houses. Now imagine if you bought a house in a new neighborhood at 350k and you neighbor comes in 6 months later and got a house at 320k. Not a huge deal until the mofo a year later bought his @ 250k. Lol
 
Dr. Truth

Dr. Truth

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OutlawR.O.C. said:
Sort of true.

Location matters absolutely but property in smaller cities/towns can be just as steady and reliable as the larger markets as long as they are well established areas.
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Well established areas is location which proves my point. Small towns in Idaho ain’t holding shit . Small suburban areas in the Bay Area will, DMV will , NYC borough’s will. Some suburb of Birmingham Alabama isn’t desirable
 
OutlawR.O.C.

OutlawR.O.C.

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Dr. Truth said:
That house hammer had was in Fremont it would be worth double or triple what he paid if he kept it. The median home price in Fremont is a million dollars . That’s Silicon Valley now.
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No doubt.

But not at the time he built it.

It wouldn't have been an issue or considered a bad investment if the money kept coming in.

Same with Holyfield.

In the long run they probably would have been considered wise investments.
 
Dr. Truth

Dr. Truth

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OutlawR.O.C. said:
No doubt.

But not at the time he built it.

It wouldn't have been an issue or considered a bad investment if the money kept coming in.

Same with Holyfield.

In the long run they probably would have been considered wise investments.
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The house was actually a good investment . It was in the hills you can still see it from the freeway. Silicon Valley had just begun to take off.His problem was he had a 200 people paid entourage and couldn’t afford to furnish his house. Nigga was putting Levitz furniture in a multi million dollar crib .
 
OutlawR.O.C.

OutlawR.O.C.

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Dr. Truth said:
The house was actually a good investment . It was in the hills you can still see it from the freeway. Silicon Valley had just begun to take off.His problem was he had a 200 people paid entourage and couldn’t afford to furnish his house. Nigga was putting Levitz furniture in a multi million dollar crib .
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Yeah he said the biggest mistake he made was the overpriced, opulent shit inside like italian marble floors and I think he even had a gold toilet :lol:
 
TheFuser

TheFuser

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4 Dimensional said:
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Cant even be mad. Sometimes you just gotta admit...

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B

babygwirl18

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Dr. Truth said:
The fuck? Wrong
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I’ll use numbers to illustrate the point. The numbers are rough, and not exact.

If you buy a house worth $1m and pay 2.4% interest that’s let’s say $24k a year, or $2,000 a month.

Now the interest rate jumps to 7.2%. Now if you bought a $1m house, you’d pay $6k a month.

Typically when rates rise like this, housing prices drop. But in order for the housing price to drop so much so that you’d be paying less than the $2,000 a month you’re paying now (i.e. getting a better deal) the house price would have to drop 68%, to $320,000.

Even in the most horrible market, a 68% drop is almost unheard of.

As for inflation, they say that we are poised for A 10-15% inflation rate, annually. That’s bad, but that just means that you’re really paying $2,300 a month, in current dollars, not $2,000.

So in short, no inflation would not wipe out the gains you get from getting an extremely low rate.

A different, yet related point is that your house may be “under water” or have negative equity. That is a big problem if you need to move/sell the house. So you’re stuck in the house, that’s the downside.

The upside is that you are paying less (monthly) than you would if you were tryingto buy the exact same house today.
 
Louis Koo

Louis Koo

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babygwirl18 said:
I’ll use numbers to illustrate the point. The numbers are rough, and not exact.

If you buy a house worth $1m and pay 2.4% interest that’s let’s say $24k a year, or $2,000 a month.

Now the interest rate jumps to 7.2%. Now if you bought a $1m house, you’d pay $6k a month.

Typically when rates rise like this, housing prices drop. But in order for the housing price to drop so much so that you’d be paying less than the $2,000 a month you’re paying now (i.e. getting a better deal) the house price would have to drop 68%, to $320,000.

Even in the most horrible market, a 68% drop is almost unheard of.

As for inflation, they say that we are poised for A 10-15% inflation rate, annually. That’s bad, but that just means that you’re really paying $2,300 a month, in current dollars, not $2,000.

So in short, no inflation would not wipe out the gains you get from getting an extremely low rate.

A different, yet related point is that your house may be “under water” or have negative equity. That is a big problem if you need to move/sell the house. So you’re stuck in the house, that’s the downside.

The upside is that you are paying less (monthly) than you would if you were tryingto buy the exact same house today.
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I'm a CPA and CFA charterholder, specializing in mortgage backed securities. I'm saying this to show that I'm not financially illiterate.

The answer you give is based completely on the context and assumptions. My assumption is that the home prices are not overinflated (in the current economy yes, but it just depends on the market you're in). That inflation rate of 10 to 15% is just the projected rate of inflation, which is totally unsustainable. It would literally cause a revolution in the US because even I won't be able to afford to live (I make more than 99% of America). I can easily prove you wrong with amortization tables, why the mortgage is an inflation hedge, etc... but I need to sleep cuz I got work tomorrow.
 
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Dr. Truth

Dr. Truth

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Louis Koo said:
I'm a CPA and CFA charterholder, specializing in mortgage backed securities. I'm saying this to show that I'm not financially illiterate.

The answer you give is based completely on the context and assumptions. My assumption is that the home prices are not overinflated (in the current economy yes, but it just depends on the market you're in). That inflation rate of 10 to 15% is just the projected rate of inflation, which is totally unsustainable. It would literally cause a revolution in the US because even I won't be able to afford to live (I make more than 99% of America). I can easily prove you wrong with amortization tables, why the mortgage is an inflation hedge, etc... but I need to sleep cuz I got work tomorrow.
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Nothing you said disproves what he was saying. SMH
 
Kubrick

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Dr. Truth said:
Well established areas is location which proves my point. Small towns in Idaho ain’t holding shit . Small suburban areas in the Bay Area will, DMV will , NYC borough’s will. Some suburb of Birmingham Alabama isn’t desirable
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Some are. Im from Birmingham and Suburbs like Homewood and Mountain Brook are highly desirable for a metro with a large Medical industry
 

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