Will house prices eventually start to decline?

Goonerview

Goonerview

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I understand this is dependent on the place, but in the west, it seems to only ever be going in one direction and that is up. Especially in major cities like San Francisco and New York.

I know a lot of people have taken out mortgages and need the prices of their property to stay high or continue increasing, so they don't lose the money that they borrowed.

I'm not an economist or financial wizard by any means, but does anyone here envisage a future where the price of houses and property falls?
 
?? There was a global financial crisis ~10 years ago, coincidentally called "The Global Financial Crisis", which saw real estate prices tank across the world.
 
Rjay said:
?? There was a global financial crisis ~10 years ago, coincidentally called "The Global Financial Crisis", which saw real estate prices tank across the world.
Click to expand...

Then why are so many people homeless/complaining about the price of rent etc?
 
There's a finite amount of land and a growing population.

Americans in particular place a lot if value on owning land with their own yards so I don't see it changing.

I remember in the 99s when the internet was taking off people thought it would lead to unclustering since hypothetically your physical location would be obsolete.

If that were true we'd see more people moving to the sticks while being able to work for Silicon Valley or Wall Street but it appears we're clustering even more now
 
It’s all relative to the time horizon that you choose. Home prices have begun to drop a bit in the 2nd half of 2018 here in the Bay Area. Many believe the decline will continue into 2019 as the Bay Area reforms permitting, thus increasing supply of “middle class” homes. There is also the effect of rising interest rates putting downward pressure on prices.

If you’re talking short term investment then no I would not feel comfortable at all buying a home right now that I intend or have to sell in the next few years. If you’re talking about buying a long-term primary residence here then I feel fine as the Bay Area is still one of the strongest real estate markets in the world and I expect that to continue over the long-term.
 
Nope my generation in my country can pretty much kiss goodbye owning a house lol

#renting4life
 
Immigration means inflation everywhere. House prices included.
 
I would say a big issue we've seen since 2008 especially is that most of the quantitative easing/money creation has tended to go towards speculation(including property) rather than investment, in the UK especially this IMHO probably the biggest political issue of the last decade as we've seen the stock market and house prices hold up but economic growth stagnant.
 
sure they will, after the next economic crash within the cycle
 
moreorless87 said:
I would say a big issue we've seen since 2008 especially is that most of the quantitative easing/money creation has tended to go towards speculation(including property) rather than investment, in the UK especially this IMHO probably the biggest political issue of the last decade as we've seen the stock market and house prices hold up but economic growth stagnant.
Click to expand...
Yep, a huge amount of the increase in property values in Canada has been foreign buyers parking their capital in real estate in major cities.

As far as a decline, government policies instituted to curb this behavior (targeted taxing of foreign citizens buying properties they aren't inhabiting or renting out) have cooled the frenzy somewhat. But as noted, land is the only thing they aren't making any more of. On a long enough time scale (barring corrections) it's pretty much assured it's going to increase in value.
 
Well interest rates were ridiculously low, so I'm not surprised motherfuckers. In many markets, it is bound to go down as prices are already inflated above a realistic long term value.

Two items that do not get enough credit for increase in sales is as follows:

1. Rent prices vs. home prices: In most markets, it will always be more economical to purchase than rent on an apples to apples comparison. In simple terms, the rent price reflects the overhead + profit margin. What I find interesting is that when purchase prices increase, rents often increase (even on rentals purchased far before the price hikes). To me, it seems this is where a landlord could try to get a competitive edge. In my market, they increase rent. The investors that I talk to say that "people that want to buy are going to buy - low rent prices won't change that".

2. Marketing: With realtors taking to instagram and facebook, I truly think that homes listed constantly bombarding people gives them the itch to buy. I know that shit works on my wife. It's so much more effective than the days of real estate books.
 
Housing prices especially here in CA are inflated. I see the Fed raising the interest rate slowing down the cost a bit but it is going to take another market crash for that to happen. It is only a matter of time. With housing being so overly inflated and houses still selling that tells me people are pretty much maxing out on what they can afford. When the economy takes a tumble it will be 2008 all over again. People will lose their jobs and the house they bought won't be worth what they paid. They won't be able to refinance becuase they put 3.5% down.

It is only a matter of time but when?

My advice is stop taking loans now. Pay off your debt while the cash is flowing. Get your cash ready to go
 
Organic Damage said:
Yep, a huge amount of the increase in property values in Canada has been foreign buyers parking their capital in real estate in major cities.

As far as a decline, government policies instituted to curb this behavior (targeted taxing of foreign citizens buying properties they aren't inhabiting or renting out) have cooled the frenzy somewhat. But as noted, land is the only thing they aren't making any more of. On a long enough time scale (barring corrections) it's pretty much assured it's going to increase in value.
Click to expand...

A lot of it is domestic as well though, people buying up property to rent or as an investment is driving up prices the same way its keeping the stock market high rather than just demand from new potential home owners.

From a UK perspective I think what really needs to happen is some kind of clamping down on loans from quantitative easing being used to purchase existing assets rather than investment in new asset creation. All those billions that got pumped in post 2008 really helped the economy very little and only served in reinflate the investment bubble, then again I think that was quite deliberate as the people who benefit from that have so much political influence.

Speculation on the stock market or property shouldn't be able to depend on those kinds of banking loans IMHO, it should have to get by on stuff like issuing bonds.
 
TardStrong said:
Housing prices especially here in CA are inflated. I see the Fed raising the interest rate slowing down the cost a bit but it is going to take another market crash for that to happen. It is only a matter of time. With housing being so overly inflated and houses still selling that tells me people are pretty much maxing out on what they can afford. When the economy takes a tumble it will be 2008 all over again. People will lose their jobs and the house they bought won't be worth what they paid. They won't be able to refinance becuase they put 3.5% down.

It is only a matter of time but when?

My advice is stop taking loans now. Pay off your debt while the cash is flowing. Get your cash ready to go
Click to expand...

That's what I'm doing now. Saving cash. Currently squirreling away a couple of grand a month.

Wait till the next crash before investing in a property.
 
Prices will correct at the next crash.
 
According to this with inflation calculated (blue line) houses are still cheaper than they were prior to the crash
b88a5d8d7ff1286cd49d416ccf4d783b.png
 
You can buy homes in my area for the same price they paid 20 years ago. Yeah it's a pretty shit area
 
Rjay said:
?? There was a global financial crisis ~10 years ago, coincidentally called "The Global Financial Crisis", which saw real estate prices tank across the world.
Click to expand...

Not anywhere you'd want to live.
 
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