You think when people buy an investment property, they rent it out at half their mortgage payment? Same goes for primary residence, you can’t find an equivalent rental for cheaper than your mortgage payment.
The only and only problem with buying a house in the US is the 30 year loan. It's a seriously stressful liability in a country where you are not guaranteed a job for 30 years.
Why take on guaranteed stress for 30 years when your income for 30 years isn't guaranteed? (I know you're gonna say money thrown in rent, building equity blah blah. Let me bust that right now by saying that interest payments + taxes+ insurance = money thrown in the drain)
Seriously, if you are mobile, buy smaller houses on shorter debt duration. Those 30 years of slavery will be killer
Actually the 30 year loan is amazing. At current rates it's free money as the market over 30 years is very likely to return significantly more than 4%. Most people who could pay off the mortgage in cash will keep it for the free leverage and tax advantage. The mortgage is one of the fastest and easiest vehicles to wealth creation. If you are super risk adverse just keep a larger than normal cash reserve so that you can make the payments for several years without any income should you become disabled and not be eligable for insurance during a recession. Interest is not double taxes so it is either money paid to the irs or paid toward a house; will let you guess which is "money down the drain".
1) Only on your primary property. The tax rate on all other property was slashed. 2)10k on your personal and unlimited on all others 3)Land is always cheap, it is insanely expensive to make more. Buy at the peak or valley, long term it's great. 4)Correct, property is low risk. Love the widespread ignorance regarding recessions, time does not cause a recession. Regardless if we see a depression and all propery drops significantly my only action would be to buy a lot more than normal which I last did in 2013. That would be awesome! Not sure how you see foreclosures as a negative, they are great buying opportunities for folks like us!
We got priced out of two houses in Seattle ($75K and $100K, respectively, over asking) three years ago this January. We bought a home on the Martha Lake/Mill Creek border instead.
Even with the market cooling, we are still ahead because we bought the smallest house in a nice cul de sac neighborhood.
With interest rates climbing, it’s a tough choice in Seattle. I can see the market cooling in the hot Seattle neighborhoods but you cannot predict how much it’ll cool. If you’re in it for the long-term and can afford it, go for it.
We decided against Seattle just because after the two over-asking offers, we decided to swallow the hour-long commute to save money on our mortgage payment but also because we love to travel and want to retire early. Even with the extra commuting costs, we are still doing very well and are not paying a $3-4K or more monthly mortgage if we had bought in Seattle.
You're referring only to the areas like Capitol Hill. Rents in most of Seattle and surrounding PS areas are stable / increasing. The whole area hasn't seen the drop in housing prices and rental prices which leads me to believe this is less of an impact than people want to believe. A correction rather than systemic.
This was less of a hypothesis though and more of a point that rental curves don't follow housing price curves so even if houses drop, it may be an attractive time to buy.
I don't regret buying it. I bought mine in 2016 for asking price and the price is up by about 25% from there. My house is smaller than average and had a very modest finish. Very glad I got it because I would be spending more in rent. Hard to predict future, but I knew I shouldn't be paying the crazy prices ppl were paying - I wasn't willing to pay.