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JLeslie's avatar

Are you glad interests rates are so low and housing prices are going up?

Asked by JLeslie (60735points) 1 month ago from iPhone

Do you think it’s a housing bubble that will burst?

Lots of people are moving. Californians and people from some northern and upper Midwest states moving to Texas and Nashville. Lots of people moving to Florida. Housing prices are becoming impossible. Typical salesperson line “interests rates are so low you can afford more.”

Are you investing in real estate? Trying to flip properties while prices are going up?

I hate this situation, there you go, you have my opinion, what about you?

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10 Answers

canidmajor's avatar

No, I am not glad that this stupid bubble, in this time of extreme strife prevents so many from buying homes.

kritiper's avatar

Very quickly now housing prices will be so high that no one at all will be able to afford to rent.

Tropical_Willie's avatar

In Raleigh NC there is only about 30 days of real estate inventory; two years ago it was over 3 and half months. Some houses are sold in 1 to 2 days and many have a bidding war too upping the price more.

It maybe a bubble but low interest rates and remote working has caused movement out of other centers.

JLeslie's avatar

@kritiper Yes, the equation is getting harder for investors to hold properties with tenants covering the costs. A lot of investors hold properties at least one year for lower taxes on the gain and rent it out during that year, or few years.

Smashley's avatar

Not really thrilled about it. I’m looking to build a house soon and material prices are high, and you never get a loan nearly as low as the ’‘official” interest rate, so I’m not getting a whole lot of help there. If I had a house I could sell, I’d be pretty happy to do it right now, however.

I do think it’s part of a bubble. Similar to the stock market, there are fewer safe places to invest your money these days, so a disproportionate amount of money is entering these markets and distorting the data. Real estate is often seen as a safe investment, since it can earn money while you hold it, can easily be remodeled to increase value, and mortgage interest can often be tax deductible. Sounds great, right? Well, yeah, until everyone gets the same idea, invest heavily, creating a feedback loop of increasing prices, without a whole lot of real value being created. Then, suddenly, the value of your house can fall 50%, but you need to pay full price for granite countertops, contractors and appliances. When interest rates go up, or housing demand falls otherwise, which it will because fundamentally we are weak economically, and inflation is probably coming for us, a lot of value will evaporate, people will default, and there will probably be another financial crisis.

I dunno, there’s a lot of moving parts here, and it’s very hard to prognosticate about housing prices. I see a stock market and housing downturn coming, eventually, but nailing it down is hard.

stanleybmanly's avatar

These low interest rates mean that people are losing money on their savings. Only a sucker puts money in the bank, and people are throwing their money at the casino (stock market). I would love to know what percentage of the covid relief money winds up on Wall Street from all of those receiving relief who don’t need it.

elbanditoroso's avatar

Interest rates are going back up, and housing prices will fall concomitantly. Your post is a couple weeks too late.

JLeslie's avatar

@elbanditoroso We’ll see how long it takes. I’m not feeling or seeing a slow down yet.

YARNLADY's avatar

No, it is not a good thing. My son was hoping to buy, but out of luck.

tedibear's avatar

Mortgage interest rates in my area have started to very slowly creep back up. Most houses here are for sale 30 days are less. If it means deposit rates will grow a little, then it’s okay with me. I’m tired of listening to people complain about CD interest rates. Yes, they suck! I know! It’s not up to me! Ack!

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