The bigger problem though is that private equity firms are buying up all the property and turning it into rentals. Itās artificially inflating prices, decreasing the ability for home ownership, and if you follow the trend line to the end, we will all be paying rent to corporate overlords and no one will own anything anymore. Feudal system 2.0.
What we need is a severe decline in demand (which would be hugely painful for current homeowners especially recent buyers) to put a stop to this.
Banks have a much biggest issue with their commercial loan profile. Hard to see demand slowing in an area so many people are relocating and retiring to. Thereās more cash in local real estate that Iāve even seenā¦ itās like the coastal markets.
That decline comes at a high risk with this possible scenario playing out.
Government the back stop or forced to take on obligations is always fun.
Thats the 3rd article I have read on this subject in last 2 weeks so industry is taking notice.
Privatize profits, socialize losses. Iām pretty tired of execs getting 300x the average employees salary then running companies into the ground or worse, crashing the economy. These people arenāt geniuses. We need to stop with the myth that every executive at a big company is a genius. A lot of them are not.
They are never held responsible and spend their days with tens or hundreds of millions as rewards for crashing their companies into the ground. Itās disgusting.
My kid and her boyfriend just bought a Town house in
LoSo. Itās nice but for the money theyāre paying, wowā¦.
That said, the rent they pay is freaking unreal so I guess itās a wash
Iām assuming they were over $300/sq ft. $400/sq ft+ is becoming the norm around Dilworth and only going up and makes areas as you leave uptown increase as well.
But yeahā¦ Iām glad Iām not a first time home buyer. That would be rough. Nice homes in good neighborhoods within 485 have tripled in the last 15 years. Maybe salaries have a well. Depends on the person.
What really hurts is the interest rate change. From 2.625% to 7% is a HUGE change. I bought and sold late last year and hated for the rate change (had to buy down to 6% for how i did the transaction) but figured couldnāt live my short life around an interest rate that āhopefullyā one day will drop to below 5s again. Hopefully itās within the next 2 years.
clt recommends living in a van down by the river
You hit the nail on the head. Our rate on the house we built 6 yrs ago is 2.25 fixed. My kids rate is 6.75. Helluva difference
The other problem is when rates do finally drop ( if we are not in a stagflation cycle) that will drive housing demand and prices for one final push up before something will have to give.
At the same time, all these low rate mortgage payers are ātrappedā in their current homes by the rate disparity. Theyāre still better off than new home buyers, but itās not fun if you actually need to move for work, family, etc.
Iām leaving my daughters two houses. Thatās their inheritance. Iām not paying for for weddings but they are gonna get two houses.
Of course Iām gonna be old living with them in one of them.
My 25 year old son (Charlotte Engineering Grad) just built his first house last year. Moved in around Thanksgiving. He is really good with his money and built a very reasonable house (3 bedrooms, 2 baths) but his interest rate is ~7% IIRC. Its crazy how much difference that rate makes in his mortgage payment versus what it would have been a few years ago. We gave (my wife and I) him the 2 acres of land he built on, so that helped a lot, but still.
His sister was on the other end of the spectrum. She (and my son-in-law) sold their house in late 2022 and made a killing.
Iām glad you put trapped in quotes. Itās probably kinda true for a lot of people. Weāre in a different situation but weāre old and weāre not moving. I can see how it would be an issue in some of the cases you used as an example.
My wifeās company is making people move to strategic cities or youāre packaged out. Sheās gonna be in that situation sometime in 2025 but weāre in a position where we can just retire. Some of her fellow employees are gonna get screwed by it though.
100% that most execs are not geniuses. However, if you can mismanage a company and still get someone to pay you millions then you gotta be pretty damn smart or talented at something. 
Bet I can guess which one that is, in under 3 tries.
I also think this is B.S. Why are they doing this? Solely to support their CRE footprint in that market. Itās stupid and grossly unfair to long-term, quality employees.
.but thatās getting way off topic.
My first mortgage back in 2002 was 6.75% and I remember thinking that was a great rate. We all got hooked on cheap money
Mortgage rates shouldnāt be in the 2s or 3s in a healthy economy and the fed held rates down too long during the Trump presidency. Unfortunately for first time home buyers prices are at record all time highs by many multiples even adjusted for inflation, and higher rates make it even worse for them.
I need that unhealthy economy back sooner than later
