Comment by ren_engineer | Hacker News Reader

Comment by ren_engineer | Hacker News Reader

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historical rates don't matter because a significant chunk of the people making decisions weren't around for that time period. And even those who were around were still incentivized to make risky decisions to try and find yield with 0% rates

we've got a lot of fake growth on paper fueled by 0% rates that never existed and has to be shaken out of the system. The fundamental problem is economists thinking they can twist dials on the financial system and play god to prevent recessions and depressions, which will just result in rarer but more extreme financial crises when reality hits them in the face

the economy is fundamentally less efficient and less productive due to the covid pandemic(people not working) and the economic decoupling from China and Russia. Printing money doesn't change those fundamentals, the end result in the short term will be lowered living standards for everybody. More money chasing fewer goods equals inflation, not complicated

>More money chasing fewer goods equals inflation, not complicated

It's not complicated, except those who missed out on the 0% rates are hit the hardest and want to catch a similar boom that isn't coming back.

Those looking to buy a house now feel cheated. The prices are similar to ~2020-2022 but the rates are much higher. The rates being lower than historical average is irelevant for those looking to buy know because the current housing prices are also much higher than historical averages.

Our entire economy is now addicted to cheap money so those who missed out on the cheap money will want it back.

I was listening to a local real estate talk show this weekend.

They said the largest generational group buying and selling houses pre-COVID were the Millennials.

Now?

Its the Baby Boomers. They can pay cash so they are immune to the interest rates and they tend to have more equity in their properties so they're in a very advantageous position to take advantage of really bad time for real estate.

I live in Minneapolis. The inventory here has been historically low since Covid hit. Normally we should have around 15K properties for sale in the seven country metro area here. Right now, its closer to about 4,200 which is crazy. A lot of people are not even putting their houses on the market. They find an agent and within days they have several buyers. We've had three families just POOF move out of our neighborhood. No "for sale" sign, no showings, just gone.

That’s going to hurt them over time. Current RE values assume abnormally low interest rates in their valuations. Over time, reversion to the mean in both interest rates and valuations will eat away their equity.

Further, not letting the property go to market is just bizarre. It’s saying they think they can’t get a better deal by letting more people bid on it. That’s categorically false unless the seller knows the value of their property is below current market conditions. Being that they’ve probably not transacted much in the current market this is erroneous. Let the property go to market and take in bids over at least a couple weeks.

Any bidder saying their bid evaporates if the property goes to market is not worth believing.

Of course, maybe I’m wrong and there are serious buyers who make true highest offer off market. But that probably signifies something truly and even bizarre - and possibly a tendency towards market failure.

Do you think we're gonna see another real estate crash?

No

The prices are not similar to 2022. I’ve seen prices drop by 15% already.

Where? Not where I live (Europe). Prices here have dropped max 5%. But if you take the increased rates in to consideration then the total price you'll be paying till the end, is actually higher than before the discount.

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