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Started By
Message
Home price growth outpacing wage growth in Baton Rouge region
Posted on 4/7/22 at 11:05 am
Posted on 4/7/22 at 11:05 am
I know....same problem everywhere else. Seems like we really need to boost inventory of housing, but that's going to be hard to do when lumber prices are sky high, parts shortages are everywhere, and interest rates are going up.
LINK
quote:
The average wage earner in the Capital Region’s three biggest housing markets still can qualify to buy a house, though that may change as prices continue to rise faster than wages, a new national report suggests.
Historically low mortgage rates and higher wages helped to offset rising home prices in recent years, but as prices and interest rates rise, more consumers are going to struggle to find a property they can afford, says Rick Sharga, executive vice president of market intelligence for ATTOM.
The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses—including mortgage, property taxes and insurance—on a median-priced single-family home assuming a 20% down payment and a 28% maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the U.S. Bureau of Labor Statistics.
quote:
ATTOM’s first-quarter 2022 home affordability report shows median-priced single-family homes are less affordable compared to historical averages in 79% of the counties (or parishes) across the nation with enough data to analyze. That is the highest point since 2008 and up from 38% in the first quarter of 2021, the report’s authors say.
LINK
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Posted on 4/7/22 at 11:06 am to goofball
Housing market will surely crash.
Posted on 4/7/22 at 11:07 am to goofball
quote:
Home price growth outpacing wage growth in Baton Rouge region
In America
Posted on 4/7/22 at 11:12 am to goofball
insane
Posted on 4/7/22 at 11:14 am to udtiger
gonna be painful when it finally corrects.
Posted on 4/7/22 at 11:18 am to goofball
It's not just real estate. At least real estate can make sense even with high prices.
It's everything. Boats, gas, food. Every damn thing is outpacing wages and inflation. Plan and budget accordingly.
It's everything. Boats, gas, food. Every damn thing is outpacing wages and inflation. Plan and budget accordingly.
Posted on 4/7/22 at 11:27 am to Earnest_P
quote:
Housing market will surely crash.
Define crash, the worst decline in history was 2007-2008, home prices declined a average of 14%, not exactly a game changer.
Posted on 4/7/22 at 11:28 am to goofball
Interest rates are killing the market too. I have borrowers that can't find houses and their pre-approval amounts are dropping almost daily. Some people that are waiting for their homes to be built are gonna be upset when they can't afford it when it's done.
Posted on 4/7/22 at 11:33 am to EA6B
quote:
Define crash, the worst decline in history was 2007-2008, home prices declined a average of 14%, not exactly a game changer.
This is an eye-opener too from 1987 after the stockmarket crash:
AFR
But, those whining about real estate prices should pay attention to this:
quote:
The acceleration in property prices coincided with mortgage rates reducing from 15 per cent in September 1987 down to 13.5 per cent in June 1988. But then mortgage rates started to rise and the pace of capital gains started to ease. By mid-1989 mortgage rates increased to a high of 17 per cent. Then in 1990 the housing and commercial property markets stumbled.
Posted on 4/7/22 at 11:35 am to goofball
Reported on the news last night that the inflation rate is the highest in 40 years and it's Brandoning us now.
Posted on 4/7/22 at 11:37 am to goofball
I finally just bought earlier this year (I didn't really have a choice...casually put in an offer thinking it'd never go through in this market, and nearly fell over in the floor when I found out it was accepted).
I've spent way too much of my time and anxiety on researching what's going to happen to the housing market, but the take away from all of that effort is that truly no one knows what's about to happen and anyone that says anything with certainty is talking out of their arse.
Personally I don't see a bunch of people selling anytime soon and jumping into a new mortgage at 6%, but if things really took a sharp downturn it might spark some panic selling that could prove me wrong. I've seen way too many posts on Reddit of 28 year old couples bringing in 135k a year that were somehow approved to purchase an 800k house (listed at 675k of course) with 5% down and I think these will be the first people trying to get out before it's too late.
I'm in an area where houses are up maybe 50-60% from their lows a decade ago, so I don't stand quite as much to lose as someone who just paid 900k for a shitty rancher in Florida or Arizona. The chance that I made a bad decision seems equally as likely as the chance that I made a fine decision, so just have to stop thinking that I can rationalize any of this and ride out whatever happens.
I've spent way too much of my time and anxiety on researching what's going to happen to the housing market, but the take away from all of that effort is that truly no one knows what's about to happen and anyone that says anything with certainty is talking out of their arse.
Personally I don't see a bunch of people selling anytime soon and jumping into a new mortgage at 6%, but if things really took a sharp downturn it might spark some panic selling that could prove me wrong. I've seen way too many posts on Reddit of 28 year old couples bringing in 135k a year that were somehow approved to purchase an 800k house (listed at 675k of course) with 5% down and I think these will be the first people trying to get out before it's too late.
I'm in an area where houses are up maybe 50-60% from their lows a decade ago, so I don't stand quite as much to lose as someone who just paid 900k for a shitty rancher in Florida or Arizona. The chance that I made a bad decision seems equally as likely as the chance that I made a fine decision, so just have to stop thinking that I can rationalize any of this and ride out whatever happens.
This post was edited on 4/7/22 at 11:39 am
Posted on 4/7/22 at 11:41 am to reddonuts8
quote:
The chance that I made a bad decision seems equally as likely as the chance that I made a fine decision, so just have to ride out whatever happens.
Even if the market collapses or stalls, your mortgage payment is still the same excepting property tax increases. If you stayed renting you have no such guarantee and you're still going to be subject to the same increase in property taxes passed on to you. Unless you bought the property with intent to flip it for a large profit in 2-3 years and move up somewhere else there's really no downside.
Posted on 4/7/22 at 11:45 am to reddonuts8
We just recently bought a home in prairieville bc my wife has to move for her job.
we were losing hope because every house we put an offer in on also had like 7-8 other offers all over asking, some cash with no appraisal clause. It’s insane, we were almost accepting we would never get our money back on anything we buy.
Then we found one fsbo where my wife’s cousin knew the owner. All they wanted was appraised value, thank god.
If you can find a situation where you’re avoiding competition, pay what you have to pay. At least you’ll get your money back.
Frick all these bidding wars. It’s insane
we were losing hope because every house we put an offer in on also had like 7-8 other offers all over asking, some cash with no appraisal clause. It’s insane, we were almost accepting we would never get our money back on anything we buy.
Then we found one fsbo where my wife’s cousin knew the owner. All they wanted was appraised value, thank god.
If you can find a situation where you’re avoiding competition, pay what you have to pay. At least you’ll get your money back.
Frick all these bidding wars. It’s insane
Posted on 4/7/22 at 11:47 am to Cymry Teigr
quote:
Even if the market collapses or stalls, your mortgage payment is still the same excepting property tax increases. If you stayed renting you have no such guarantee and you're still going to be subject to the same increase in property taxes passed on to you. Unless you bought the property with intent to flip it for a large profit in 2-3 years and move up somewhere else there's really no downside.
That was another big piece of it -- we just actually implemented rent control here (terrible idea btw) which means that my current rent wouldn't go up much, but I know for a fact I don't want to live in this place forever and everyone else is hiking their rent way up knowing that they'll only be able to raise it a small amount year over year for tenants that stay on. My mortgage is well within my means so there's some comfort in having that stability.
Posted on 4/7/22 at 12:02 pm to goofball
With the prices going up around my neighborhood we were starting to think about selling and moving to the St. Francisville area but now that interest rates are going up?
We would end up paying more per month for less house/property. We'll just hang tight with our low interest rate while the market shits itself, maybe sell/move if rates come back down in a few years.
We would end up paying more per month for less house/property. We'll just hang tight with our low interest rate while the market shits itself, maybe sell/move if rates come back down in a few years.
Posted on 4/7/22 at 12:08 pm to goofball
There are gonna be some really upset people that bought a 1700 sq ft starter home for 330-350k when this thing come crashing down.
Gonna be wayyyyyy upside down in that house and never get back the money.
Pay at jobs won’t increase enough to think that most people could afford that size house if it ends up being worth 375-400k
Gonna be wayyyyyy upside down in that house and never get back the money.
Pay at jobs won’t increase enough to think that most people could afford that size house if it ends up being worth 375-400k
Posted on 4/7/22 at 12:11 pm to goofball
quote:
Seems like we really need to boost inventory of housing, but that's going to be hard to do when lumber prices are sky high, parts shortages are everywhere, and interest rates are going up.
I bet that St George has a woefully low number of apartment complexes and dense living opportunities.
Posted on 4/7/22 at 2:40 pm to Earnest_P
I hear the “Housing market is gonna crash” prediction a lot. Obviously, no one knows what will happen, but for these reasons I do not see some some huge correction happening in our local market:
Where will the supply come from? There isn’t a ton of developable land in the metro BR area and further development is being restricted because of flooding impacts. We are years behind on number of new homes being built.
People with homes locked into low interest rates are going to be reluctant to sell because of rising interest rates.
Movement of large investors and hedge funds that will build to rent to hedge inflation making the supply crunch worse.
Home prices are strongly correlated with inflation and I think inflation will continue to be well above average.
Typically interest rates rising means falling home prices but I don’t think that we will see enough supply any time soon to allow for some crash or huge correction.
Where will the supply come from? There isn’t a ton of developable land in the metro BR area and further development is being restricted because of flooding impacts. We are years behind on number of new homes being built.
People with homes locked into low interest rates are going to be reluctant to sell because of rising interest rates.
Movement of large investors and hedge funds that will build to rent to hedge inflation making the supply crunch worse.
Home prices are strongly correlated with inflation and I think inflation will continue to be well above average.
Typically interest rates rising means falling home prices but I don’t think that we will see enough supply any time soon to allow for some crash or huge correction.
Posted on 4/7/22 at 2:43 pm to Fat and Happy
quote:
Gonna be wayyyyyy upside down in that house and never get back the money.
They'll most likely make it up eventually if they have enough time to wait out a decline in values assuming the neighborhood doesn't go to shite.
We never made back what we paid for our first house we bought in 2005 or 2006 though. We sold it at a loss in 2013.
We'd have eventually made our money back + if we would have stayed in it for another 5 years or so.
This post was edited on 4/7/22 at 2:48 pm
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