CNBC-Investor Peter Boockvar is sounding the alarm on a housing price bubble brought on by the Federal Reserve’s Covid pandemic policies.
He warns first-time homebuyers are most vulnerable to dramatic losses.
“I feel bad for the people who bought homes over the past year because they’re the ones that paid the very elevated prices,” the chief investment officer at Bleakley Advisory Group told CNBC’s “Trading Nation” on Thursday.
He singles out those who put down 5% amid historically low mortgage rates. If home prices correct by 10%, Boockvar sees a world of pain. more
The only home I’m invested in is my own personal home that I’ve bought and lived in for the past 20 years. And NO I’m NOT interested in selling, even at the current “hot” market prices. Where would I move to to that I could afford?
Homes in my neighborhood were valued in the high 200’s a few years ago and are now selling in the low to mid 500’s. Anyone buying a home that has more or less doubled in price in two to three years is insane.
The Dems and Progressives want as many bubbles ready to burst as they can. It is part of the Great Reset. You have to destroy the global money and finance structure before you can rebuild it.
Just move to Illinois. When prices go up, IL stays the same. When prices go down, IL goes down faster. Oh wait, it’s that way because everyone is leaving this shithole. I want to leave also but what am I gonna do? Sell year 1997 prices and buy 2021 prices? Thought about renting for a while but my luck prices will only go higher.
Is this article from the babelon bee?. ” Those home buyers with nothing down will have their entire Investment wiped out”
Jpm, correct. While there will be some loss incurred by the buyer (losses they cannot afford, as well as having to declare bankruptcy), it will be nowhere near the losses by investors, many of whom have no idea how much of their retirement is entwined in real estate and mortgages.
I specifically told my retirement fund that I did not want my money anywhere near real estate or mortgages, but I am not sure they can avoid it.
Oops. Jpm, correct about losses from no money down mortgages being a bit humorous — not that it is from the Babylon Bee.
The dreaded tax accessor made his round a month ago, and no doubt re-accessing property values – at the high rates that came around last year when people from NYC came here to escape. They didn’t care about prices and brought their savings with them. I bet my taxes this fall have risen through the roof.
Personally, I’ve been ticked the county thinks my home is worth 2.3 times as much as it was 3 years ago.
The house next door to me had been sold for WAY too much and the rest of us in the neighborhood have been paying the increased tax price for that ever since.
Sorry new buyers, I’m hoping real estate prices crash in my part of town. Not likely, though. Too many foreigners moving into Dallas throwing money around and available real estate is thin.
Sellers market.
I bought my 3rd house in SoCal at the peak in 1980. It was about 10-12 years before I could refinance to get my interest rate down below 11%. Being the 3rd house I had owned you’d think I would have been smarter…
@ecp DITTO
Illinois is a democrat ridden demon infested hell hole ruled by an obese NAZI wannabe. I can’t get out either
I bought my home for 7k in 1989. It was a real old old dump. I’ve spent most of my life working on it. Now the tax man says it’s worth 150k. Investors call all the time wanting to buy it. I tell them that for 15 kilos of gold they can have this lovely property. That’s how much blood, sweat, and tears I’ve got in this home. They keep calling and I’m thinking of raising my price.
I don’t care, we purchased this foreclosure, don’t owe a thing on it, and even if it dropped 3/4 the market, it wouldn’t hurt me. I don’t plan on moving, taxes are reasonable, people around here don’t bug me, and this isn’t the first RE bubble I’ve been through. Historically, it always bounces back. They don’t make land any more, and few can afford it. For those who kept refinancing your home these past few years, you did the right thing – if you can hold on to it.
We were invaded in Southern Maine by people from NY & CA running away from the cities at the beginning of the China virus. They sold their homes and came to ME with cash. Realtors tell people don’t even make an offer unless it’s at least $50k over asking.
Our kids can’t find affordable rents now. A studio starts at $1500 per mo.
Our city council who loves spending made the assessor revalue. Ours in an industrial area went up $110,000.
People near the beach had theirs go by as much as $800k.
Anyone who buys now will end up underwater.
It happened in the 90’s too.
Real Estate in our NorCal county is on fire. You can blame COVID. With every one working remotely they no longer are required to live in Silicon Valley. The bad news is they’re bring their politics with them. We are hoping to sell and escape before the market tanks. Home values have risen right around 35% in a year. But they are flooding the market with Track home too. Even they start at about 1 mil. It will crash. Eventually.
My hubs and I have been shopping for a home in PA. Like, all over PA. We are not tied to living in a particular town, just somewhere a reasonable day trip to Gettysburg. Let me tell ya – there are some *cough* INTERESTING towns in PA. And the prices for run down crap is pretty crazy. We’ve been charging all over PA in our target area, but these houses are way over priced to begin with, then nearly all of what we have looked at in the 170k-210k range needs min about 50k in urgent repairs/upgrades just to make them livable. I know more about fricken knob & tube wiring than I ever wanted to know because 3/4 of the houses we have looked at have fricken knob & tube wiring. Bad roofs, rotten porches, old windows, wet basements, tiny kitchens with no dishwasher, DROP CEILINGS and paneling everywhere… oh, and teeny closets, no storage – and your house may or may not have parking in the rear on some trashy alley. Usually it will – IF it has parking at all. Most of the towns have such narrow lots you can hand things to your neighbor through the window without having to stretch, which is why you have to park in a scary alley at the back of your property. Very different than what we are used to. We are in no rush.
Hey Brad, send me an email when you have a few minutes.
richtaylor@sbcglobal.net
Must have done something right in my life. Bought ten acres of trees thirty years ago. The owner financed it and we paid it off in two and a half years. We now have a home and two rentals on the property. We’ve never had a mortgage, no credit card debt and everything we own is paid for.
I don’t care much about what the real estate market does or about what xiden and the SC do about rent moratoriums either. After a few bad experiences, I figured out that it’s cheaper to have an empty building than to have a deadbeat that doesn’t pay while trashing my property. Not owing any money means I can be very picky about tenants.
@ ACParker
You’d better be turning 72 in the next year or two because your retirement fund is going to go down to ZERO faster than you can shake a stick.