A Boring Dystopia

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Housing market affordability is so bad that Zillow says it will take you 13.5 years to break even on a purchase from July onward (finance.yahoo.com)

submitted 10 months ago by return2ozma@lemmy.world to c/aboringdystopia@lemmy.world

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[–] oo1@kbin.social 64 points 10 months ago (4 children)

break even?
makes it sound like like they're talking to investors not residents.

i dread to think how their "anslysis" works.

cant bear to do any more than skim this article though.

[–] echodot@feddit.uk 5 points 10 months ago* (last edited 10 months ago) (2 children)

I'm not sure I quite understand what that means how would they even know if I've broken even or not?

I own my house but the only way I would know if I'd "broken even" was to constantly get it evaluated. Also is their analysis assuming that I'm going to do improvements or not?

Because you can buy a house, own it for 6 months and sell it again for a profit, and you can do that if you do renovations. Equally you can buy a house own it for 5 years and sell it and make a loss because you've not done any maintenance or renovations in that time.

I know for a fact the person I bought the house of hardly made any money on the sale because the roof has a giant hole in it. Obviously that brings the price down.

[–] Moneo@lemmy.world 3 points 10 months ago (1 children)

assumptions for closing costs, agent fees at the time of sale, home maintenance costs and interest payments

Break even being your house has increased in value by the amount you've spent on those expenses.

[–] Poem_for_your_sprog@lemmy.world 2 points 10 months ago (1 children)

So it takes 13 years to get out from being upside down on the loan? Yikes

[–] Moneo@lemmy.world 1 points 10 months ago (1 children)

Not if I understand the phrase correctly. The house may be valued more than what is remaining on your loan, but you've spent a lot of money closing the house. So if you sold before the 13 years you would be able to pay off your loan but you would have lost money.

[–] Poem_for_your_sprog@lemmy.world 1 points 10 months ago

Gotchya, so if they had 0% or low down payment they would be upside down for 10+ years.

[–] watty@lemm.ee 2 points 10 months ago

Based on the actual Zillow report, it's just based on home values across the board in different regions. So, these are averages. Of course, if you make more improvements and stuff, your result would vary.

[–] JackbyDev@programming.dev 4 points 10 months ago

My house is an investment in the sense that I'm putting money into a giant hole as opposed to an infinite hole like renting. But no, I don't view it like I would a stock.

[–] joel_feila@lemmy.world 4 points 10 months ago

Back in the 50s to 70 we teeated hoises more like food. No one bought up all tge bread at a grocery store in hopes of selling letter at a high profit. During this time houses inflated mostly along side wages.

The the dark times came. The risr of the secondary real estate market ment people couldcquickly trade mortgages* like stock. This decoupled house prices from wages and turn te whole 2nd market into a new stock market

*technically they are not mortgages but mortgage back securities

[–] watty@lemm.ee 3 points 10 months ago

You can just click through to the actual Zillow report instead of Yahoo's article about it: https://www.zillow.com/research/years-to-profit-33215/

They discuss the analysis right there.