Home prices are going to start falling, and it's going to be a major shitshow for the country

[mnhtnbb]

55. Prices aren't falling here in the Triangle area of NC any time soon.

Last edited Sat Jun 18, 2022, 09:29 AM - Edit history (1)

This area is experiencing a lot of growth as major employers are moving to/opening offices here. Demand exceeds supply. Location, location, location.

I have two sons. The oldest elected not to go to college and has pursued a career in IT. Self taught. In 2007--when he was 21--we helped him buy his first townhouse--being built in a new development not far from the Raleigh/Durham airport--by giving him money to help with a down payment (so he could qualify for a mortgage at his level of income) equal to what we were putting toward college expenses for his brother, who did choose the college path after graduation. He was laid off from his job just as the townhouse was due to close. He scrambled and got lucky, securing a job with a local city government--doing IT--and was able to hold that job through the 2008 recession, and for five more years, so he could continue to afford the mortgage on his townhouse. He took in a roommate to help with the expenses and started putting extra money towards paying down the mortgage. He is now a senior software engineer with an international company that has offices here in the Triangle.

In 2019, he and his partner were looking for a larger townhouse and found one--being built--which will be less than 10 minutes away from where Apple will be building a huge campus as they come to NC. He had built up a nice amount of equity to help with the down payment on the slightly larger townhouse, that was purchased for more than double the cost of his first one. One of his neighbors--on the same street and with the same model townhouse--just sold for $100K MORE than list price (in less than a week), for a total of $233,000 more than what those people paid in 2019.

My other son chose the higher education path. He just was awarded his Doctorate in Fine Arts from Yale in May. He lives in Chapel Hill with his partner, a tenured associate professor at UNC Chapel Hill. Last summer, the owner of the house the professor had been renting for 10 years--who was still paying off student loans from years of his higher education--decided to sell the house. They scrambled and found a townhouse to rent. Chapel Hill is a tough rental market because it's a college town. In April, the owner of the townhouse decided he wanted to cash in on the price appreciation (having only bought it the year previously) and told my son and the professor he was going to sell. Did they want to buy (at a hugely inflated price)? I told my son I could help with the down payment, but in order to buy they would only be able to use the professor's income to qualify for a mortgage, because my son's stipend from Yale would end (when he was awarded his degree) and he would have no income going forward to use without a job. And there are no jobs in his field. (He's been developing a podcast and hopes that will grow into something, but it could take some time.) So, they scrambled again and found a house to rent in their old neighborhood. Housing--for them--has some specific requirements. Neither of them drives (my son is legally blind due to a genetic disease, but sees with his peripheral vision) and the professor prefers not to drive, so they live within walking distance of UNC and near the fare free bus lines of Chapel Hill. And my son is a drummer. Yesterday they moved into the "new" house, which is in a delightful location at the end of a dead end street, with lots of big trees and adjacent woods. But the house is a dump! It has to be at least 60 years old--maybe older--with the original kitchen cabinets and countertops. Low ceilings. Dark wood paneling. No energy efficient windows (or insulation, I'm guessing). Basically, a 1400 sq ft tear down, and the landlord bought it a year ago for $285,000. They are paying more than $2K/month in rent. For a dump. Last night my son texted me a photo of a kitchen cabinet door which split in two when he went to close it after unpacking some kitchen stuff to put it away. He feels like they will never be able to afford a house. They will have to keep throwing $25,000+/year away on rent for the forseeable future, so they can live in a dump.

Two sons. One didn't go to college, bought a townhouse (with parental help) when he was barely 21, and is building wealth. The other, only 3 1/2 years younger, went the higher education route and does not think he will ever be able to afford a house (until I die and he comes into his inheritance).

I never thought I'd own a house again. I'd been renting from the time I separated in 2017, my husband died in 2018, and our house sold. Then COVID. By 2020 I had predictable income from SS, a pension, and investments, and with interest rates so low--and equity from our house--I could qualify for a mortgage. So I bought a house in April 2020--to be built--and moved in Jan 6 2021. Zillow says my house is now worth over $200K more than I paid for it. That's crazy. Just crazy. I could see $100-150K more, but $200K in 2 years? Nobody has yet sold in this new development of 93 houses. The developer has just closed on an adjacent piece of land and has plans to put up 68 more houses. He won't divulge pricing. By the time he finishes building those houses, Apple should be well into construction of their new billion dollar campus, which is just 15 minutes from here, and has plans for 3000 employees. It's not just Apple that has found this area of North Carolina attractive, but Google and Microsoft are hiring here, too. https://www.newsobserver.com/news/business/article258173948.html

There are a lot of California license plates showing up around here--as well as from many other states in the country. I don't see prices going down any time soon. They might level off, but I would expect to see price escalation similar to what happened in California over the last few decades. Location, location, location. Demand and supply.