General Discussion
In reply to the discussion: three quarters of recent home buyers expressed some regret [View all]mnhtnbb
(31,388 posts)will result in higher prices all the time.
That's Econ 101 in a nutshell. Classic situation.
The US hasn't been adding enough new homes to the housing supply for years, since the recession of 2008. The pandemic pushed demand for single family homes for all kinds of reasons. I know, I was one of the buyers who wanted out of a high rise apartment because I felt like I was playing Russian roulette every time I rode the elevator. And I wanted my own little outdoor space for a garden, more than just a patio or terrace. So I bought a house to be built, where I got to make design choices, and moved in (January 6, 2021) eight months later. Now I'm dealing with issues around freezing water lines that weren't adequately insulated. Just yesterday I was bemoaning not being in my apartment where I could file a maintenance request online and management would send someone to fix whatever the problem was. But rent is now a lot higher for that apartment. And Zillow says my house is worth 33% more than I paid for it when I signed the contract in April 2020.
There is still inadequate supply in the area where I live. Big employers are moving here. Retirees are moving here. I watch the local real estate market. Houses that closed in January--that went on the market in December-- are still selling for 10's of thousands over list price in only a day or two. It remains to be seen how much the market will cool come spring when rising interest rates might start dampening demand. But rents have risen here, too.
It remains to be seen how this plays out. Supply might catch up with demand or prices might rise to the point that demand cools.
Personally, I regret being forced to change my downtown high rise living because of the pandemic. I loved it. But I'm happy I was fortunate to be able to buy a house that I like and that will hopefully continue to be a good investment. This is my last house. My plan is to have the mortgage paid off in 10 years, if I live that long, since I'll be 71 next month. Then the equity goes to my sons.