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My definition of a bubble is when the masses start buying something because the value is climbing, vs. buying to use the item.
Prior to the 2008 crash, we saw people of limited means buying multiple houses thinking they would sell a few months later at a profit. That is far different than buying a house in which to live. I don't see that now. People are scrambling to buy a place to live. Bottom line? I don't have a clue what real estate prices will do. Part of me is thinking that house values are fairly stable, but the price increases are the value of the dollar being reduced by printing presses running 26 hours a day. |
Strike while the iron is hot !...meaning sell now, and enjoy less stress about future profits, or declines.
Right now, lots of folks are flush with cash from not being able to do much over the last Covid year, 3 rounds of stimulus, and tax returns arriving. The housing market is crazy good for sellers also right now, why would you wait ? |
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I tend to think of bubbles in terms of sustainability, mostly because I’m simple. Does it pass the smell test? Does it make sense that in Wichita where I live, where there is no economic growth of note and their primary industry (aerospace) has had a number of recent layoffs, that houses are selling in 24 hours for over asking price with multiple offers? There’s no real growth, there’s not a shortage, so why?
I think there’s a lot of people with a lot of money and nothing to spend it on, so they are sinking it into all sorts of stuff. I think eventually they’ll all start asking, “wtf am I going to do with this?” I’m not just talking houses either, the same seems to be happening with boats, cars, RVs, and vacation condos. Someday when things are all open back up again, does the stuff and accompanying payment fit with their lives? |
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But for these two mortgages, I am debt free and have been for some time. I have enough liquid assets to solve any minor problem like a transmission or even a whole car. Just mortgages and utilities. Water/sewer, electricity/gas, garbage, internet/phones. Plus....getting rid of mortgages and owning my home outright would likely make the think more seriously about retirement. I should be thinking more seriously about that. I should have one foot in retirement and the other foot on a banana peel, as they say. |
There is another option besides the "bubble bursting", and one I think could very likely happen.
The craziness dies down and home prices stay relatively stable/flat for an extended period of time. So that house across the street that is crazy to think is worth $800k, is still worth $800k 10 years from now. |
Supe, I’m just one little data point but I can tell you that becoming debt free was the best financial decision I’ve ever made. It just removes so much stress from life. I’ll also qualify that statement by the fact that part of my becoming debt free was selling my FD RX-7 and 911SC, two cars I never planned to sell. I miss them but I don’t regret it!
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We just bought a 2nd home today. We plan on using as a cottage now and possible retirement in the future. I fully expect it to stay stagnant over next 10 years. Hopefully not fall. Thought about waiting for a crash or correction but it may not happen. Plus if we wait 5 more years kids will be gone and those summer weekends will be gone, and 5 more years off my life. May the 4th be with us!! |
Congrats, Reg. Enjoy it and your family in good health.
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I wouldn't holdout for any predicted future outcome.
I just sold my house at top of market values (or close enough to) Paid off all debts and went to renting. Whatever happens next will probably make 2008 & 2009 look tame! |
Oddly enough, lots of people who sold a year or two ago said the same exact thing.
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Was the same back in the early 2,000's. Depends on the size of the local bubble, some were far in excess of others. |
There is a reason its called "Real Property"
There is only a finite amount as compared to derivatives, options & cyber dollars |
river front comes available from time to time. i've been looking to move money out of the market. but things have been getting snapped up in days, even out here in bum****.
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I’m glad I bought April 2020. I moved from the golf coarse to saltwater access. The canal homes down here have really jumped in price, some are tear down now.
The spread is higher now, I probably wouldn’t pay the difference. |
Real estate values depend on the ability and existence of buyers with $. With interest rates expecting to rise (per Ms. Yellen) and the current absurd market, I'd say sell it now. Save on property taxes, insurance, etc.
Enjoy your retirement and dont waste it spending too much time over on PARF ;) |
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