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Buying A House In the Covid Era?

Cinnahs

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Just watched this video and made me think of this thread.


The housing market is unsustainable and will eventually crash. Mortgage rates are beginning to climb and the prices are insane. Once the pandemic is over, new housing construction can begin. It is not a good time buy a home given the inflated prices. It's an issue of supply and demand and it is making harder for your average Joe trying to buy a primary residence or rental property.
 

ILoveMyGirls

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If you can buy BUY.

I sold my home and bought something else in prime location. I’m in Ontario so people sitting and waiting for the market to crash...good luck!

location/ desirable neighbourhood is more important to me than size.

Good luck!
 

bullish af

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The housing market is unsustainable and will eventually crash. Mortgage rates are beginning to climb and the prices are insane. Once the pandemic is over, new housing construction can begin. It is not a good time buy a home given the inflated prices. It's an issue of supply and demand and it is making harder for your average Joe trying to buy a primary residence or rental property.
Yeah it’s a whole mess. They basically promised that the rates would be low for the foreseeable future and did a total 180. Now mortgage companies like Quicken, Amerisave, Rocket are going to focus more on FHA loans and not refinances. Since interest rates are going up it costs them more to do it so someone with a 3.25% rate for example, can’t refinance because they can’t get a cheaper rate so instead they talk them into taking an even higher rate with debt consolidation, which is basically a home equity loan. They want to focus on FHA because it’s aka subprime. They’re probably back to barely verifying information. FHA defaults are through the roof and after the pandemic forbearance ends not only will there be a huge amount of FHA foreclosures, but everyone’s property value will go down. Did you see that Michael Burry(Big Short; who predicted the last crisis?) has been on Twitter warning about all of this for a while? And he deleted his Twitter the other day.
'Big Short' investor Michael Burry deletes his Twitter profile after warning of market bubbles for months
 

Loso1

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Just watched this video and made me think of this thread.


This is is how I feel. I live in freaking Missouri and you can’t get anything decent in a good neighborhood outside of St. Louis for less than 300k and there is bare bones of inventory from 250-350k. I’m sitting here thinking imma get an old ass ugly house for a 2k a month mortgage payment in the freaking Midwest. Prices have easily increased by 100k for existing homes and new builds.
 

Loso1

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Yeah it’s a whole mess. They basically promised that the rates would be low for the foreseeable future and did a total 180. Now mortgage companies like Quicken, Amerisave, Rocket are going to focus more on FHA loans and not refinances. Since interest rates are going up it costs them more to do it so someone with a 3.25% rate for example, can’t refinance because they can’t get a cheaper rate so instead they talk them into taking an even higher rate with debt consolidation, which is basically a home equity loan. They want to focus on FHA because it’s aka subprime. They’re probably back to barely verifying information. FHA defaults are through the roof and after the pandemic forbearance ends not only will there be a huge amount of FHA foreclosures, but everyone’s property value will go down. Did you see that Michael Burry(Big Short; who predicted the last crisis?) has been on Twitter warning about all of this for a while? And he deleted his Twitter the other day.
'Big Short' investor Michael Burry deletes his Twitter profile after warning of market bubbles for months
People are forgetting about the potential risk of increase in property taxes. Let’s be honest about 30% of mortgagors bought at the top of their price range and are living paycheck to paycheck. They are literally one repair or one increase in taxes and insurance away from defaulting. The government need to step in and either stop kicking the can and let the inevitable happen now or get something in place because it’s going to be a complete sh!t show and I’m here for it waiting to swoop in and buy a house at a reasonable price.
 

Teigh

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People are forgetting about the potential risk of increase in property taxes. Let’s be honest about 30% of mortgagors bought at the top of their price range and are living paycheck to paycheck. They are literally one repair or one increase in taxes and insurance away from defaulting. The government need to step in and either stop kicking the can and let the inevitable happen now or get something in place because it’s going to be a complete sh!t show and I’m here for it waiting to swoop in and buy a house at a reasonable price.
They will probably let the chips fall when unemployment numbers are back to normal. Prices are up because supply is short. If you can't pay then you are not gonna move. I refuse to believe these numbers represent true market value. Then again, this is nothing new.

People are constantly purchasing outside their paycheck lane. I am not going to be one of those who buy just to say I'm a homeowner. If I buy right now, my choices would be condos that will drive my expenses up by $1500 per month and the worst part is that they are no bigger than my current apartment.
 

Zahungscyn

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We closed on a home because we wanted to. Paid 85k above the asking price and cash. We are in the Austin area though and tech is booming here. This will def be the next San Francisco or Seattle and we want a lot of equity gain.
 

rhyse

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Yeah it’s a whole mess. They basically promised that the rates would be low for the foreseeable future and did a total 180. Now mortgage companies like Quicken, Amerisave, Rocket are going to focus more on FHA loans and not refinances. Since interest rates are going up it costs them more to do it so someone with a 3.25% rate for example, can’t refinance because they can’t get a cheaper rate so instead they talk them into taking an even higher rate with debt consolidation, which is basically a home equity loan. They want to focus on FHA because it’s aka subprime. They’re probably back to barely verifying information. FHA defaults are through the roof and after the pandemic forbearance ends not only will there be a huge amount of FHA foreclosures, but everyone’s property value will go down. Did you see that Michael Burry(Big Short; who predicted the last crisis?) has been on Twitter warning about all of this for a while? And he deleted his Twitter the other day.
'Big Short' investor Michael Burry deletes his Twitter profile after warning of market bubbles for months
FHA is not a subprime loan. It is simply a guaranteed differently. Y’all really need to read more before you make those type of declarations.
 

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We closed on a home because we wanted to. Paid 85k above the asking price and cash. We are in the Austin area though and tech is booming here. This will def be the next San Francisco or Seattle and we want a lot of equity gain.
How did you make a decision on the neighborhood in the Austin market?
 

bullish af

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FHA is not a subprime loan. It is simply a guaranteed differently. Y’all really need to read more before you make those type of declarations.
I said “aka subprime” because of the credit score requirement being POOR and they are more likely to default and that’s exactly what’s happening. Many buyers with FHA would never qualify for a conventional loan. Maybe you should read the whole picture of what I actually said before you think you’re correcting someone...
 
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Pearlfection

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Going through this right now

200.gif


All I want is a cute little renovated uptown cottage next to the park. Is that too much to ask for???

tumblr_mywshsLtSG1ql5yr7o1_400.gif


I guess I'll be waiting with the rest of y'all
 

rhyse

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I said “aka subprime” because of the credit score requirement being POOR and they are more likely to default and that’s exactly what’s happening. Many buyers with FHA would never qualify for a conventional loan. Maybe you should read the whole picture of what I actually said before you think you’re correcting someone...
I said what I said. And if that’s what you meant then that’s what you would have said!
 

Loso1

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I said “aka subprime” because of the credit score requirement being POOR and they are more likely to default and that’s exactly what’s happening. Many buyers with FHA would never qualify for a conventional loan. Maybe you should read the whole picture of what I actually said before you think you’re correcting someone...
Do you work for hud or a lender that deals with fha loans? Where are your sources to make this claim.
 

rhyse

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Do you work for hud or a lender that deals with fha loans? Where are your sources to make this claim.
You’re the wrong. The burden of proof is on you. I know what I know and you obviously don’t. Stop responding to me and use this time to educate yourself.
 

Zahungscyn

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How did you make a decision on the neighborhood in the Austin market?
School ratings, proximity to domain area where my husband works, community where we were buying. Proximity to shopping areas. It is in an HOA and is in a highly sought after community.
 

Ntsap

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This crazy market has gotten my financial irresponsible parents act together because people have been snatching up the homes in our part of the neighborhood for way over listing price. Our part looks like the hood compared to the new part. I’m pissed now they want to move to a gated community closer in town when I’m about to move out. I thought they were joking but they’re serious serious.

They rushed into a sh!tty 30 year old mortgage with terrible credit in a new subdivision with new builders in the middle of nowhere with so many restrictions and so little amenities just to save $40,000 from all of our dream house. We’ve been here since Labor Day 2006. If they would have just waited a few more years when my mom graduated and became a RN and my dad started his own business and doubled his salary, they could have gotten a better deal during the housing crash but no my dad’s ego was bruised because my grandma’s friend who lives halfway across the country and visits every 5 years said our first house was a nice starter house.
 

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Do you work for hud or a lender that deals with fha loans? Where are your sources to make this claim.
I am close to someone in lending and banking. I posted that information directly from someone who had a conference call with their superiors who were giving these directions. That poster doesn’t understand what I am trying to say. I know the diff between a true subprime loan and FHA. They now prefer FHA loans because of the ease to get approval. They are pushing people through with bad credit, high DTI ratios, etc. There is another housing crisis coming and that’s not a trade secret.
 

Cinnahs

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I said “aka subprime” because of the credit score requirement being POOR and they are more likely to default and that’s exactly what’s happening. Many buyers with FHA would never qualify for a conventional loan. Maybe you should read the whole picture of what I actually said before you think you’re correcting someone...
I thought that was what you meant. FHA is for subprime borrowers and you're right, the majority of people going through FHA would never be able to go conventional. I am trying to convince a family member to hold off right now because of the very high prices, their fair to middling credit score, and the lack of a 20% down payment. It's time to hold out for the inevitable drop in prices when these borrowers default and the foreclosure process begins.
 

Loso1

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You’re the wrong. The burden of proof is on you. I know what I know and you obviously don’t. Stop responding to me and use this time to educate yourself.
Where you trying to reply to me lol? I directed the question to someone else.
 

Archeo

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I'm considering buying a house that's about $375k. Well the appraisal came in and it was $15,000 under it's listed price.

The seller was not willing to negotiate and was already saying he has a cash buyer as a backup! I was looking online seems like this is the norm.

Some are willing to pay 20K, 50K, even 100k out of pocket to be in their desired neighborhood. Some are waiving appraisals and inspection contingencies.

Is anyone else seeing this in their market?
I experienced this recently, except the appraisal came in at $30K lower than the contract price. I'm looking into the modular option now, since the inventory is so low in my area.
 

Archeo

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Just want to add that I wouldn't get it with the appraisal $15k less. Continue to look until you find something.

I don't believe that seller has a cash buyer lined up because if they did, they would accept cash over dealing with a bank. I think they are using that as a tactic to get you to buy.
Facts. In my case, the seller said there was a cash investor so they wouldn't budge. I canceled the contract and the seller came back asking if I would be willing to sell at the previously agreed-upon price. The whole experience was full of red flags (even before the low appraisal) so I said no.
 

twistedsista

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Why put your house up for sale if your payments are deferred? We will learn the true effect of the pandemic once rent/mortgage deferment expires.

I think you have to qualify for the deferred payment program and I wouldn't go that route unless necessary. I'm sure the mortgage company probably resets the clock on your 30 years and I wouldn't be surprised if they increase the interest rate.
 

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I think you have to qualify for the deferred payment program and I wouldn't go that route unless necessary. I'm sure the mortgage company probably resets the clock on your 30 years and I wouldn't be surprised if they increase the interest rate.
The recommendation is not to do it but some people have no choice. From what I've read, it appears to be a balloon payment that is due once everything is lifted. Not too many people will be able to pay that especially if unemployment didn't cover it.

Just another lesson in living within your means.
 

twistedsista

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The recommendation is not to do it but some people have no choice. From what I've read, it appears to be a balloon payment that is due once everything is lifted. Not too many people will be able to pay that especially if unemployment didn't cover it.

Just another lesson in living within your means.

Okay, I knew there was going to be some kind of catch.

Sad, because a person that lost their job and can't pay won't magically get the funds needed to survive and catch up on the mortgage in one lump sum once the program ends. It's going to be a train wreck if they don't figure this out before snatching the rug out.
 

Teigh

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Okay, I knew there was going to be some kind of catch.

Sad, because a person that lost their job and can't pay won't magically get the funds needed to survive and catch up on the mortgage in one lump sum once the program ends. It's going to be a train wreck if they don't figure this out before snatching the rug out.
Yeah, people are not going to be able to make up those payments. It's impossible. The housing correction is being delayed.

This is how I know things are bad but have not come to head yet. I receive daily emails from Fannie Mae on foreclosures, when you start seeing homes in desirable neighborhoods that's when you know something is happening.

I live in Cali (LA) and from time to time I see these types of properties.

People are maxed out, where are they gonna get the money?
 

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The recommendation is not to do it but some people have no choice. From what I've read, it appears to be a balloon payment that is due once everything is lifted. Not too many people will be able to pay that especially if unemployment didn't cover it.

Just another lesson in living within your means.
If it’s a true covid hardship(meaning they fell behind after March of 2020), the banks are putting it on the back end of the mortgage or modifying the loan if the borrower still has income. When these forbearance and foreclosure stays are up we will see an increase in inventory but not enough to change these list prices. I do think it will help take some pressure off of seeing homes with 20plus offers.
 

Teigh

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If it’s a true covid hardship(meaning they fell behind after March of 2020), the banks are putting it on the back end of the mortgage or modifying the loan if the borrower still has income. When these forbearance and foreclosure stays are up we will see an increase in inventory but not enough to change these list prices. I do think it will help take some pressure off of seeing homes with 20plus offers.
That's good to know. It helps temporary. The worst part is you are not paying down anything and the interest continues to accrue. These people can stay in their homes but once this is over that is when the real story begins especially if they can't find a job.
 

CherriGarcia

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I'm looking now because I'm trying to buy next year and so many homes are overpriced, should I wait a couple more months longer
 

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