What (if anything) should be done about housing prices?

Irwin

Well-known Member
I saw an article yesterday that house prices went up 40% in the past year in Austin, Texas. The average house price here in Denver is now over half-a-million dollars! Back in the 90s, you could buy a nice house here for under $100,000. There was a thread about houses in San Francisco going for more than a million dollars over asking price!

I don't understand why there's such a housing shortage. It started back in the late '90s and doesn't seem to be letting up. The American dream is way out of reach for a lot of people.

So... what, if anything, should be done to bring prices back down or to help people buy houses?

Personally, I have no idea, but maybe other people do.
 

Don't see the gov't has any right to force prices down. Helping people buy houses................................the way I see it, wealthy folks will invest in houses, all real estate, and Most of us will be Renters. I owe my soul to the company store.
 
People need to lose the greed and sell the house for what it's worth and not what they think they should get for it. A little profit is one thing but an average house for $500,000 is ridiculous.

Most of us aren't movie stars and can't afford to buy like them either.
 

People need to lose the greed and sell the house for what it's worth and not what they think they should get for it. A little profit is one thing but an average house for $500,000 is ridiculous.
Most Americans see their homes as their biggest investment and most work on their houses expecting a return. It's the pay off for the investment. What anything is worth is what someone is willing to pay.

You're right, Marci, the prices are, in my view, insane.
 
Most Americans see their homes as their biggest investment and most work on their houses expecting a return. It's the pay off for the investment. What anything is worth is what someone is willing to pay.

You're right, Marci, the prices are, in my view, insane.
Someone like me is never going to buy a house anyway. But if I wanted to, I could never get a loan for the prices they want for this stuff. A hundred year old house that needs new electrical wiring and new plumbing throughout was priced at $100,000 back home. WTH? Who is gonna wanna pay that plus the financing to fix all that. It is still sitting empty today. Most homes that old are filled with issues and rotted wood. The cheapest home was a "fixer upper" for $10,000. Neither of which I could afford or would want to.

I get where you're coming from on that biggest investment stuff but when an average home goes for that much money something is wrong.
 
I think houses are going up due to people moving . Those living in more confined places , like apartments are moving into individual homes allowing for more privacy and space mainly due to the pandemic.

If someone offers you more for your home than itā€™s actually worth because they really want it, do you say no?
 
I think houses are going up due to people moving . Those living in more confined places , like apartments are moving into individual homes allowing for more privacy and space mainly due to the pandemic.

If someone offers you more for your home than itā€™s actually worth because they really want it, do you say no?
How would you determine what your home is "actually worth"?
 
If someone offers you more for your home than itā€™s actually worth because they really want it, do you say no?
Of course Iā€™d take it, if I wanted to sell. What itā€™s worth is whatever someone will pay.

Interest rates are incredibly low. People forget about all the hidden costs of maintaining a house. Many donā€™t know about the time and effort required to maintain a house.

ā€œI must have a four bedroom, 3 BA, with a remodelled kitchen, even though I donā€™t cook. I will pay whatever it costs to get it. The long commute is no big deal.ā€ Thatā€™s the essence of some of these purchasers.
 
If someone offers you more for your home than itā€™s actually worth because they really want it, do you say no?
I would absolutely say 'Yes!' if I was offered more than my house was really worth, but I'm worried about the effect on property taxes if the state thinks my house is worth what people are paying, and then after I get stuck with higher property taxes for years no doubt the housing market would crash when I want to sell.šŸ˜–
 
How would you determine what your home is "actually worth"?
You hire the proper professionals to do it.

Of course Iā€™d take it, if I wanted to sell. What itā€™s worth is whatever someone will pay.

Interest rates are incredibly low. People forget about all the hidden costs of maintaining a house. Many donā€™t know about the time and effort required to maintain a house.

ā€œI must have a four bedroom, 3 BA, with a remodelled kitchen, even though I donā€™t cook. I will pay whatever it costs to get it. The long commute is no big deal.ā€ Thatā€™s the essence of some of these purchasers.
I agree. Itā€™s not a good idea for everyone.
Itā€™s a big commitment. Plus those who pay more than the house is worth might not qualify for a mortgage once the bank finds out how much itā€™s actually worth. If you have purchased it above asking price, when prices go down, you can lose a lot of money.
 
I saw an article yesterday that house prices went up 40% in the past year in Austin, Texas. The average house price here in Denver is now over half-a-million dollars! Back in the 90s, you could buy a nice house here for under $100,000. There was a thread about houses in San Francisco going for more than a million dollars over asking price!

I don't understand why there's such a housing shortage. It started back in the late '90s and doesn't seem to be letting up. The American dream is way out of reach for a lot of people.

So... what, if anything, should be done to bring prices back down or to help people buy houses?

Personally, I have no idea, but maybe other people do.
One of the problems with the cost of homes is the cost of materials. Developers and builders should start looking at alternatives to wood and bricks, imo.
 
I would absolutely say 'Yes!' if I was offered more than my house was really worth, but I'm worried about the effect on property taxes if the state thinks my house is worth what people are paying, and then after I get stuck with higher property taxes for years no doubt the housing market would crash when I want to sell.šŸ˜–
If someone has offered you more than your house is worth and you sell it, you no longer have to worry about the property tax since itā€™s no longer yours. Besides which, your property tax isnā€™t based on what someoneā€™s willing to purchase it for. Itā€™s based on square footage of living space, number of bathrooms & bedrooms, what the value of the properties around you are worth, public services etc.
 
You hire the proper professionals to do it.


I agree. Itā€™s not a good idea for everyone.
Itā€™s a big commitment. Plus those who pay more than the house is worth might not qualify for a mortgage once the bank finds out how much itā€™s actually worth. If you have purchased it above asking price, when prices go down, you can lose a lot of money.
As far as I know, here in the US banks assess a home's value themselves before they'll approve a loan.
 
Changing the subject a bit.

When I was a young fella, you know, when dinosaurs strutted up and down our streets :) , the houses were mainly Victorian, and if anyone bought one them, they could be fairly sure that they would be able to pass it on to their children, however, some of the stuff they are building now I doubt very much if they will still be standing before the mortgage is fully paid.
I really feel sorry for todays youngsters trying to get started in their own home.
 
Let me start by saying I am no expert, not on real estate or the economy - so take what I say with as many grains of salt as you like.

That said I believe this is simply a supply and demand thing, houses sell for what people can get for them, and in a time of scarcity with demand prices go up. Just the way things work. Right now interest rates are low enough that people can spend a lot more money on a house than they could have a few years ago.

I believe interest rates are possibly the biggest factor in driving up real estate right now. People look at the payment they have to make more than the bottom line price, and that is understandable. So if you can afford a house payment of say $1,000 per month then you can probably afford to buy at house for almost $250,000, at a 3% interest rate. If rates go up to 6% that drops to around $170,000 and at 9% its closer to $130,000. And in my house owning life I have paid more than 9%. When interest rates go back up into the range they have been in for most of modern times people's ability to afford houses will go way down. I suspect that will be the cause of our next recession, and it could be a bad one. Though my crystal ball doesn't have a good track record on such predictions.

About the only thing the government could do is force interest rates up. It would bring prices down but also probably trigger a recession, not politically acceptable. And it would not make houses more affordable, less actually. So I am thinking we are all just along for the ride on this, I just hope when the next downturn comes it isn't too painful. In the meantime I am lucky and old enough to have paid off my mortgage and without any need or desire to sell. So I should be ok no matter what. Unless the bottom drops out of my 401k or something, which I know if not impossible.
 
In a buyers market, houses are often sold unconditionally meaning all conditions are wavered.

Interest rates are really low but I still believe itā€™s due to the pandemic. Banks want people to continue to purchase houses so lowering interest rates makes it much more appealing, in my opinion.
 

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