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Comment by supertrope | Hacker News Reader

Because you want to move in this year. Predicting another 2007 is a fool's game. Thanks to our system of mortgages that are implicitly backed by the government, house prices usually only go up. At worse the price just plateaus for a while. https://fred.stlouisfed.org/series/MSPUS

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> house prices usually only go up. At worse the price just plateaus

From the article:

> Home prices have dropped 18% from the pandemic highs seen in May 2022, the most among the 50 largest US metro areas

If I lived in Austin, I would wait another year before buying a house even if I wanted to buy one soon. To the parent's point - it might get even cheaper.

Watching the "value" of your home drop 18% is emotionally hard for people, even people who don't intend to sell. It's risky if you just bought the house because it could put your loan underwater.

My home value has dropped 10% since I purchased it, but I sleep slightly better b/c even if I bought my home at the current market price, I would have a higher mortgage payment than what I do now.

Obviously, this isn't ideal and buying a home today at 7% interest rates (with no plans to increase rates further) would be a tough to pill to swallow if your value will drop further.

Is that "value" real though if nobody will actually pay for it at that "value"? The only thing that is real about that "value" is the property taxes assessed. Also, if you're not actively trying to sell the house, the "value" is meaningless. Unless you're trying to get some sort of loan against the equity, it's just a number on a paper like most of modern finance

If you have a mortgage, it is so meaningless it can bankrupt you.

If you don't have a mortgage, it is money you could spend. What, sadly, a lot of people consider "free money".

If you took out a loan on a meaningless value where the value is later "corrected" to a more sane "value" that forces one to be underwater is not anyone else's fault but the person taking out the mortgage at the higher "value".

Just because someone doesn't have a mortgage doesn't mean they magically have free money. More than likely, they paying rent. Unless you're a zillenial that's moved back in with the parental units, but that's a tangential conversation.

> Just because someone doesn't have a mortgage doesn't mean they magically have free money.

I'm talking about people who have paid off their mortgage. They can re-mortgage their house, which would make a large sum available to them right then and there. I've even heard of people doing this when a house gains value: "extend" the mortgage, which gets you the gain of the house value in spendable cash ...

(and I definitely agree that's a horrible, terrible, no-good, even potentially financial-system-destroying idea, but people will, 100% certainly, do this)

> If you have a mortgage, it is so meaningless it can bankrupt you.

Not sure what this means?

Once you have the mortgage, if you can keep paying it you're fine. Whether the house value on paper is higher or lower doesn't make any difference.

My house has twice gone down in paper value below what the mortgage balance was at the time. As long as I want to keep living there, that doesn't mean anything.

And then interest rates drop, the market clears, housing prices go back up and you just miss timed the market.

I live in the Bay Area (East Bay) and feel like it presents such an interesting view into this.

2 years ago: “Wow, I can’t believe that house went for 20% above asking!”

Now: “Wow, I can’t believe that house went for 20% above asking and has appreciated since 2020.”

If you want a house now and can afford it, you will buy it now.

That's a weird starting point. Half of the East Bay SFH have appreciated 30% since 2020, that was a relative low point...

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