Im actually kinda shocked that this wasn't on your radar. Anecdotally, everyone I know has been screaming this for years. I have enormous frustration towards planing and zoning allowing the momentum of putting up single family homes, Strip malls and u-stores. In the middle of nowhere. And not helping to drive housing costs down elsewhere. We are being priced out of what we want. And what's being built is just more of the same regardless of what we, Millennials want. I hope this doesn't come off as antagonistic
Currently in Orlando, my fiancé and I are older Gen Z. We don’t see it possible to stay in Orlando, unless we want to rent for the rest of our lives. Another problem with owning besides the entry price is HOA and closed communities too far to walk to any store.
In the German city that the HQ of my lasAny was, the town was full of three story beautiful homes. When I mention it to my German coworkers, they said most are three generations. Grand parents on bottom floor, parents on 2nd floor, and adult kids on third.
This video reminds me of that scene in the big short where Christian Bale as Dr Bury is all frusterated and demoralized by the fact that the bubble hasn't popped yet. Defining exurbs here as "small towns," are these then just towns that haven't yet experimented with / learned the lesson of unprofitable suburbs? Maybe the cities that suffered the most the earliest will be the first to stop making those sorts of investments, but then all the other smaller towns will want their shot to try it as well.
Community Development and Housing Specialist, former banker and organizer. This book is everything I would share during presentations and homebuyer education courses 15+ years ago.
Now we're talking finance. Everyone considering a mortgage should observe the simple math of interest on principal. It's not complicated. Typically the unpaid balance accrues monthly, at a monthly pro-rated fraction of the Annual Percentage Rate (APR). So every month you can avoid is that much kept in your pocket over the long term. Resist the idea of buying whatever monthly payment you can afford. Instead, decide how many times you want to pay the purchase price. At zero % interest, you pay for it once regardless how many years. But at a non zero % interest rate for a non-zero number of years, you might pay for that property once, twice, three times, four times, (panic now). If you decide you only want to pay for it once, then you need a low interest rate for a low number of years - like about 10 years. Typically each decade you pay for it another time, so you pay for it once in about 10 years, twice in about 20 years, three times in about 30 years, & so on. Most people don't think about it this way, because they are financially ignorant & afraid & stressed. Think about it now.
In Canada everyone wants to live in the major cities, but demand is so high that people are forced to move to less desirable places (cities of provinces with low population) of the country to afford a home.
MBS is like buying other bonds...you are guaranteed a specific rate of return for a specific duration of time with a face value payout at the end of term - the return is very similar to bonds (both govt and corporate). This means that the net return is fixed (principle + interest) for the term of the investment - they aren't meant for people looking for short term investments...if you want to exit early, you get a face value premium if the MBS pays more interest than market returns and less than face value if the returns are lower...the total return in the investment will not change... Also, I think the thought that a 5yr+balloon will fix market appreciation pressures and localize things is inaccurate - just look to Canada...they have the same affordability issues with the 5yr+balloon loan structure...i beleive the same is true for the UK and many parts of Europe...
20:49 love the show and all the content, but the point made here about stability is flatly wrong. If you look at historic pricing trends, the NY, SF type large market pricing is far more stable than in smaller markets; by this i mean that their floor is higher as a % of starting/peak value when markets fall and they rebound faster than in smaller markets...this is seen when comparing trends in the SF, LA, NYC, Seattle real estate market to markets like Las Vegas, Orlando, PHX, etc... The smaller/lessser markets saw bigger dips in the last 2-3 RE market crisis' and took much longer to start correcting once markets hit bottom...
Very american to first think about how to fix things on a local level. A more european reaction would be to question the rulebook on the national level.
Im actually kinda shocked that this wasn't on your radar. Anecdotally, everyone I know has been screaming this for years. I have enormous frustration towards planing and zoning allowing the momentum of putting up single family homes, Strip malls and u-stores. In the middle of nowhere. And not helping to drive housing costs down elsewhere. We are being priced out of what we want. And what's being built is just more of the same regardless of what we, Millennials want. I hope this doesn't come off as antagonistic
Currently in Orlando, my fiancé and I are older Gen Z. We don’t see it possible to stay in Orlando, unless we want to rent for the rest of our lives. Another problem with owning besides the entry price is HOA and closed communities too far to walk to any store.
In the German city that the HQ of my lasAny was, the town was full of three story beautiful homes. When I mention it to my German coworkers, they said most are three generations. Grand parents on bottom floor, parents on 2nd floor, and adult kids on third.
This video reminds me of that scene in the big short where Christian Bale as Dr Bury is all frusterated and demoralized by the fact that the bubble hasn't popped yet.
Defining exurbs here as "small towns," are these then just towns that haven't yet experimented with / learned the lesson of unprofitable suburbs? Maybe the cities that suffered the most the earliest will be the first to stop making those sorts of investments, but then all the other smaller towns will want their shot to try it as well.
Plus the sale price of your home is not what you pay for it. We don’t get to deduct mortgage interest in Canada.
Community Development and Housing Specialist, former banker and organizer. This book is everything I would share during presentations and homebuyer education courses 15+ years ago.
Bought my first home in 86, interest rates were 18%. & we don’t get to deduct our interest.
Now we're talking finance. Everyone considering a mortgage should observe the simple math of interest on principal. It's not complicated. Typically the unpaid balance accrues monthly, at a monthly pro-rated fraction of the Annual Percentage Rate (APR). So every month you can avoid is that much kept in your pocket over the long term.
Resist the idea of buying whatever monthly payment you can afford. Instead, decide how many times you want to pay the purchase price.
At zero % interest, you pay for it once regardless how many years. But at a non zero % interest rate for a non-zero number of years, you might pay for that property once, twice, three times, four times, (panic now). If you decide you only want to pay for it once, then you need a low interest rate for a low number of years - like about 10 years. Typically each decade you pay for it another time, so you pay for it once in about 10 years, twice in about 20 years, three times in about 30 years, & so on.
Most people don't think about it this way, because they are financially ignorant & afraid & stressed. Think about it now.
In Canada everyone wants to live in the major cities, but demand is so high that people are forced to move to less desirable places (cities of provinces with low population) of the country to afford a home.
The suburbs here in Canada are now being discovered by Millennials & Gen Z’s. Most of my neighbourhood is flipping over now.
MBS is like buying other bonds...you are guaranteed a specific rate of return for a specific duration of time with a face value payout at the end of term - the return is very similar to bonds (both govt and corporate). This means that the net return is fixed (principle + interest) for the term of the investment - they aren't meant for people looking for short term investments...if you want to exit early, you get a face value premium if the MBS pays more interest than market returns and less than face value if the returns are lower...the total return in the investment will not change...
Also, I think the thought that a 5yr+balloon will fix market appreciation pressures and localize things is inaccurate - just look to Canada...they have the same affordability issues with the 5yr+balloon loan structure...i beleive the same is true for the UK and many parts of Europe...
20:49 love the show and all the content, but the point made here about stability is flatly wrong.
If you look at historic pricing trends, the NY, SF type large market pricing is far more stable than in smaller markets; by this i mean that their floor is higher as a % of starting/peak value when markets fall and they rebound faster than in smaller markets...this is seen when comparing trends in the SF, LA, NYC, Seattle real estate market to markets like Las Vegas, Orlando, PHX, etc...
The smaller/lessser markets saw bigger dips in the last 2-3 RE market crisis' and took much longer to start correcting once markets hit bottom...
Very american to first think about how to fix things on a local level. A more european reaction would be to question the rulebook on the national level.
Fun Fact: Abby plays the intro music on that piano keyboard behind her.