Anyway- the same housing bubble that crashed the economy back in '08 is shaping up in the commercial real estate market. The big banks have lent trillions on big city skyscrappers while the value of same has lost more than 30% value. The owners, like DJT, expect/ count on refinancing their "assett" every 6-10 years. Now with interest rates, vacancies and plumetting value. Foreign investors are buying them up @ 50¢-60¢ on the dollar. Trying to convert them to condos in many cases.
I will say this much. We just went through a ridiculously low prime rate era. I bought my current house with 3.89 % rate. I bought my 1st house back in 1983 when rates were 14.9% range.
The traditional average through post ww2 was around 5-6%. Until the late 70's.
It'll probably be another 20-30 years before you see sub 4% rates.
And even at 7%. Owning a mortgage remains a better deal than renting.
I notice most renters gave upside down priorities.
Investing in a new car that costs more than my mortgage. My house has tripled in value, almost quadrupled in the 12 years Ive owned it. My 3 vehicles are all 20 yrs old or more.
My neighbors new cars from 5 years ago have depreciated far below 50% the price they paid.
They may scoff at the "junkers I drive". But i keep them maintained & theyre reliable. Cars are a tool. Nothing more. Housing is a neccesity.
What'd they think? The prime rate would remain at zero? Or as it was for a while- at a negative?
Thats really bad thinking. It was betting on the recession(s) lasting forever while simultaneously bltching about the bad economy.
Thankfully i finally convinced all of my kids to buy a house right before the pandemic when interest rates were just starting to inch above 4.5%. My advice to everyone has always been, buy a mortgage. As soon as you can. Even if its too small. Lock in a fixed rate. Then you can plan a life knowing your housing costs will remain fixed/ near fixed. ( Property taxes & insurance dont remain, almost always these increase over time).
Renting? You are at the mercy of your landlord, who has invested his money to make profits and will raise his rents as often as he can.
And, can evict you with 2-5 weeks notice depending on the reason.
How do you plan a life with that type of uncertainty. Want a dog? Ask your landlord.
Coat of paint, new fridge? A larger parking area or a deck? Ask your landlord & expect a long delay & much begging.
This is nothing new. Landlords have been tyrants dating back to before Columbus sailed the ocean blue. Unfortunately, far too many believed those low rates for rent & housing lians would be there next year & beyond while they kept taking a $20k hit on their 5 yr old gas guzzling truck.
Lets face it. Ppl today are trained to consume, not plan ahead for that rainy day.
You know what Forests Mama said.....
S is as S does.
Or as my daddy used to say. If you aint planing to own your future, the future will own you.
Nobody can forsee the future. The only thing certain is it wont look like today. The best predictor of the future is thru examing the past.
Where inflation adjusted historic highs & lows dont last forever. So? Buy low- sell high.
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