Low interest rates are the root of all of this. People, companies, and investors took on more debt than they would otherwise as the cost of 'money' was so low. My son and his wife started looking in early 2021, as a 'no life' year of 2020 meant they had piled up enough cash for a down payment a year ahead of their plans. I initially advi…
Low interest rates are the root of all of this. People, companies, and investors took on more debt than they would otherwise as the cost of 'money' was so low. My son and his wife started looking in early 2021, as a 'no life' year of 2020 meant they had piled up enough cash for a down payment a year ahead of their plans. I initially advised them to wait a year or 2 as the market was going nuts in the winter/spring of 2021 and concerned they would overpay. But then they pre-qualified for 2.99%, which I knew wouldn't last. Ran an amortization schedule and noted that at 3.99% at the middle of their price range would cost them about $35K over 30 years if they didn't pay it off early. So I just told them not to pay more than $35k over offer. Lost bid after bid on move in ready. Last straw was a house they really loved, bid $35K over ask and still didn't get it. At that point they ditched move in ready and dropped 'must haves' to large yard (2 big dogs) and good school district. Found a very dated house with 'good bones' that had actually been on the market for 3 months. Peeling paint, weedy yard, shag carpet, yellow linoleum in the kitchen but a half acre lot, 1900 sq ft. Listed at $249, offered $245 and got it. Similar house fully renovated in the same neighborhood went for $325K. Owner had moved into memory care and the family just wanted to be done. They are cash flowing renovations and doing a lot of it themselves, his wife's parents have been doing fix and flips her whole life and her dad has a plumbing biz so she actually has more skills than my son. Wife's brother moved in and is paying rent, was going to be temporary, but they decided he might as well stay - he works 3PM-Midnight so they only see him on the weekends and they get extra cash to throw at more renovations. They may be the only ones who got a good deal in 2021. Only downside (to me) is they are 45 minutes from us but closer commutes to their jobs.
I am waiting for the shoe to drop on cars. Mine is 13 years old and hubby's is 10. Sticker shock has kept us on the sidelines. Given all the crap coming down from this administration, though, and we may have to just bite the bullet at some point.
Low interest rates are the root of all of this. People, companies, and investors took on more debt than they would otherwise as the cost of 'money' was so low. My son and his wife started looking in early 2021, as a 'no life' year of 2020 meant they had piled up enough cash for a down payment a year ahead of their plans. I initially advised them to wait a year or 2 as the market was going nuts in the winter/spring of 2021 and concerned they would overpay. But then they pre-qualified for 2.99%, which I knew wouldn't last. Ran an amortization schedule and noted that at 3.99% at the middle of their price range would cost them about $35K over 30 years if they didn't pay it off early. So I just told them not to pay more than $35k over offer. Lost bid after bid on move in ready. Last straw was a house they really loved, bid $35K over ask and still didn't get it. At that point they ditched move in ready and dropped 'must haves' to large yard (2 big dogs) and good school district. Found a very dated house with 'good bones' that had actually been on the market for 3 months. Peeling paint, weedy yard, shag carpet, yellow linoleum in the kitchen but a half acre lot, 1900 sq ft. Listed at $249, offered $245 and got it. Similar house fully renovated in the same neighborhood went for $325K. Owner had moved into memory care and the family just wanted to be done. They are cash flowing renovations and doing a lot of it themselves, his wife's parents have been doing fix and flips her whole life and her dad has a plumbing biz so she actually has more skills than my son. Wife's brother moved in and is paying rent, was going to be temporary, but they decided he might as well stay - he works 3PM-Midnight so they only see him on the weekends and they get extra cash to throw at more renovations. They may be the only ones who got a good deal in 2021. Only downside (to me) is they are 45 minutes from us but closer commutes to their jobs.
I am waiting for the shoe to drop on cars. Mine is 13 years old and hubby's is 10. Sticker shock has kept us on the sidelines. Given all the crap coming down from this administration, though, and we may have to just bite the bullet at some point.