Author Topic: Lakewood housing price bubble- unique or not?  (Read 3388 times)

Offline avromie7

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Re: Lakewood housing price bubble- unique or not?
« Reply #40 on: June 26, 2022, 11:28:03 AM »
All I know about this is that I was looking at some houses in Jackson and my parents were looking in TR.  Both locations the houses did not just get grabbed l, and a few weeks later we were both approached with a price cut.  This was in the last two months.  12 months ago this would never happen as each house had a bidding war.
The idea that housing prices won't come down regardless of interest rates is ludicrous. A $600k loan requires $50k/year in additional income compared to a year ago to qualify. It definitely prices out a lot of prospective buyers.
I wonder what people who type "u" instead of "you" do with all their free time.

Offline aygart

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Re: Lakewood housing price bubble- unique or not?
« Reply #41 on: June 26, 2022, 12:48:56 PM »
The idea that housing prices won't come down regardless of interest rates is ludicrous. A $600k loan requires $50k/year in additional income compared to a year ago to qualify. It definitely prices out a lot of prospective buyers.
On the flip side the past low interest rates took pressure off some p potential sellers and the rising rates may price some or from Florida or the like.
Feelings don't care about your facts

Offline jye

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Re: Lakewood housing price bubble- unique or not?
« Reply #42 on: June 26, 2022, 01:59:05 PM »
The idea that housing prices won't come down regardless of interest rates is ludicrous. A $600k loan requires $50k/year in additional income compared to a year ago to qualify. It definitely prices out a lot of prospective buyers.
Well, theoretically if rentals continue to support sky high pricing that would support higher housing prices. Say you pull in 4000 from an upstairs and 2200 from a basement. Thatís 74k minus taxes and maintenance. For a house going for 900k you get a cap rate approaching 6%. With a 10 year fixed at just above 5% that could work for investors and support pricing. But if prices are approaching 1.2 as they are in some spots, or rents soften, you end up with a 4-5 cap and thatís when you have negative leverage. That means the bank is making a higher return on its secured debt than the investor with the higher risk. That spells trouble for pricing going forward.