I’ll tell you what NOT to do when you are thinking about buying your first/next house; DO NOT read The Big Short. “Who reads a book after the phenomenal movie comes out?” may be your first question, and look, I get it and completely agree, books are for nerds, but my wife and I are seriously considering buying our first house together.
We even recently made an offer on a house we were very excited about that we saw as not a starter home, but a place that we could live forever. It was a fixer (though mostly cosmetic) in a very desirable neighborhood of Seattle, had great bones, and a lot of space to grow into. Sure that house sold for close to 25% more than asking and had 15 offers, but we were pretty disappointed when we didn’t get it. They are not making more land (as they say), but how can we not be repeating some of the same stuff that happened less than a decade ago.
Realtors, Mortgage Brokers, and other people with vested interest in getting you to BUY NOW are all saying the same thing, that, “we haven’t hit the top of the market yet.”
I’m someone that bought their first house at what was the theoretical height of the real estate market in June 2007. The Big Short is all about the financial ponzi scheme that caused the last housing market crash which started it’s precipitous decline in July of 2007. And I’m freaking out.
I wrote something over 2 years ago which surmised that we must be in another bubble — and prices have gone way up since then! In 2007 I really didn’t know anything about real estate, finance, or other things that most sensible people have some working knowledge of when they decide to borrow hundreds of thousands of dollars.
It was a time that screamed from the mountain tops, “BUY NOW!!! Because surely housing will keep going up!!” And from reading the Big Short, I realize that by the time our dumb selves were buying, the jenga tower (Tranches of dogshit home loans repackacked as financial instruments) was already crumbling. That was the end of 2006 — yet prices continued to go up until right when we bought.
Now China is experiencing a housing bubble and people in the Northwest (Seattle and especially Vancouver, BC) complain that Chinese investors are coming in and inflating our markets. This makes some sense as there are a lot of people in China, and now a lot of rich people in China, and the Chinese markets are tanking and so you need to park your money somewhere safe… like US residential housing!
It’s also common for people in Seattle to complain that tech workers are driving everyone out because they are the only ones who can afford to buy. I don’t believe that. I think we are due for a big housing crash and I didn’t even want that stupid house in Greenlake anyway.