U.S. Housing Prices Explosion Making Repatriation a Less Realistic Option for Many?

[Jingthing]

I assume most Americans have been following this. Massive price spikes in real estate in the U.S. for pretty much any place that you might want to live. 

 

If you already own something even marginally decent there, you're probably happy about an unexpected windfall. But what if you don't? 

 

For most expats, the first backup is repatriation. No visa needed. But some kind of housing is needed!

 

To underline this situation, here's the flip side of this historic price spike:

 

Real estate investors from across the U.S. are buying homes in Peoria, Ill., sight unseen - Washington Post

 

Quote

PEORIA, Ill. — A block that had once been home to more than 100 people was down to six who lived amid the ruins of another era. There were gaping holes in roofs and crumbling foundations. Some houses were so bad that even the squatters had quit on them, and now only raccoons and rodents sought them out for shelter.

 

[yankee99]

Peoria what a s&#t hole couldn't pay me to live there

[TooBigToFit]

There are still some places here and there for cheap prices.

 

Okay, it's Flint , MI. but it's a home for cheap. Just get all the other poor expats to buy on the same street and you'll have a Thaitown.

 

https://www.realtor.com/realestateandhomes-detail/709-Simcoe-Ave_Flint_MI_48507_M36641-39386

 

[Jeffr2]

Its crazy times in the US with regards to housing prices. I'm an investor and have been through many booms and busts.

[fredscats]

5 hours ago, Jeffr2 said:

Its crazy times in the US with regards to housing prices. I'm an investor and have been through many booms and busts.

Inflation/interest rate rises will see the recent buyers throwing their keys into the lenders again,same as UK in early 80s

[Jeffr2]

4 hours ago, fredscats said:

Inflation/interest rate rises will see the recent buyers throwing their keys into the lenders again,same as UK in early 80s

That is entirely possible. But most now are with fixed rate mortgages, not the silly adjustable like they had years ago. We'll see. The affordability index is way out of wack.

[fredscats]

9 minutes ago, Jeffr2 said:

That is entirely possible. But most now are with fixed rate mortgages, not the silly adjustable like they had years ago. We'll see. The affordability index is way out of wack.

The fixed rate are only for a limited amount of time,in fact it guarantees far more "key throwing" as financial exposure when the fixed rate finishes 

[Jeffr2]

27 minutes ago, fredscats said:

The fixed rate are only for a limited amount of time,in fact it guarantees far more "key throwing" as financial exposure when the fixed rate finishes 

Not sure what you mean. A fixed rate is for the duration of the loan. And recently, the rates have been really low. At historically low levels.

 

I've got quite a few friends who refinanced this year. 30 year fixed rate loans.

[kingstonkid]

While I think the average person will be ok I do see a bubble forming depending on how the banks handle mortgages that are rental properties.

I think that you may see a lot of these on the market as owners are not getting rental income so eventually the account is going to run dry.

 

 

[John Drake]

With the increase in the value of property, so goes the increase in property taxes too, where applicable. No matter what troubles I see in Thailand, it always looks better here than in the US.

[Tony125]

My home in US listed at $225,000  when I moved here 8 years ago.  Lists for $602,000  now.

[ExpatOilWorker]

4 hours ago, Jeffr2 said:

That is entirely possible. But most now are with fixed rate mortgages, not the silly adjustable like they had years ago. We'll see. The affordability index is way out of wack.

Do you have a chart for the index?

Maybe for the past 10 or 20 years.

 

[AwwYesNice1]

18 hours ago, yankee99 said:

Peoria what a s&#t hole couldn't pay me to live there

 

Try Pretoria if you're looking for a good time.

 

 

[kokesaat]

On the flip side of the baht coin, there are expats who moved here at a certain exchange rate and found their savings/income unable to keep up with fluctuations over the years (May 2013, for example).  Likewise, I'd guess there are some who thought about retiring to Thailand in 10/15 years but saw the typical cost of a low-level subdivision home rise from 1.2 million in the early 2000's to 3.something today.  My wife and I moved here in 1996 after talking about it for 20 years (I was in the military).  The 3 baht bowl of noodle soup that we used to eat back when we got married in 1973 had shot up to 20-25 baht (1996).  Now it's 50 baht.  In Udon.

 

[Stevemercer]

It is the same all over the developed world - house prices going up 15 - 30% over the last year.

 

I always had a safety net of going back to Australia and buying a modest house, if I had too, but now it's pretty marginal. Rents have gone up be a similar amount.

 

It seems to be the opposite in Thailand. The housing market and rents are stagnating or going down.

 

[1FinickyOne]

what has recently struck me too is the rents some of my friends are paying in smaller cities... but you have been playing w/this for a while. I imagine that your lifestyle here cannot come close to being duplicated in USA...

 

 

[emily536]

if I had one, but now it's pretty marginal. Rents have gone up be a similar amount.

[Pravda]

My condo in Toronto too.

 

Told y'all not to sell or burn bridges back home, but you love ur teerak too mutt.

 

But I still wish I invested in crypto. Easy money.

[DBath]

On 8/20/2021 at 4:28 PM, TooBigToFit said:

There are still some places here and there for cheap prices.

 

Okay, it's Flint , MI. but it's a home for cheap. Just get all the other poor expats to buy on the same street and you'll have a Thaitown.

 

https://www.realtor.com/realestateandhomes-detail/709-Simcoe-Ave_Flint_MI_48507_M36641-39386

 

The water there is still probably worse than Thailand's - and that is one crooked porch????

[bendejo]

Buying sight unseen?  Only for those who can afford to absorb the loss should the plan go sideways.  Oh, yeah, it's downwind from the perpetual tire fire, but everybody knows that.  And the flooding in that area is also common knowledge.  Tainted water supply?  Well, that's just your opinion.  Perhaps the stupidity of covid relief recipients who think they are flush enough to invest in real estate but are not thinking beyond the down payment, you know, like all those Thais who bought things on credit when the price of rubber was soaring .

 

You hear about wildfires burning for weeks (or months) on end, thousands losing their homes, etc.  Nearly every western state in the US is affected by this.  So maybe rebuild and not too much danger of a fire next year because there's nothing left to burn.  But no worries, as any GOP politician will tell you: there is no climate change and the phony epidemic is just another flu. 

 

 

[GinBoy2]

Well, we have had countless discussion on here about the cost of repatriation to the US, and housing is always the major stumbling block for many.

 

Now, the recent spike, and it is a spike, hasn't made that dynamic any easier. No as with all housing booms, prices at some point will ease but maybe back down to where it was, which was still too high for many.

 

When we sold our BKK condos in 2017 we re-invested in rental properties here, and we're seen an almost 30% appreciation.

Now is that sustainable, probably not, but what it's also done is drive up rental prices, which if you are in a location with limited availability probably won't drop to the same extent as the property equity, when the correction comes.

 

So yeah, to @Jingthing point it doesn't help if someone wants to do the simplest relocation back home.

 

So as I have always said to folks. If you have a house in your home country, and that applies not only to the US, don't sell it.

Keep it, rent it out if you must but its your ultimate bolthole if push comes to shove

[Henryford]

On 8/20/2021 at 9:28 PM, TooBigToFit said:

There are still some places here and there for cheap prices.

 

Okay, it's Flint , MI. but it's a home for cheap. Just get all the other poor expats to buy on the same street and you'll have a Thaitown.

 

https://www.realtor.com/realestateandhomes-detail/709-Simcoe-Ave_Flint_MI_48507_M36641-39386

 

You are lucky in the States having at least something like that on offer. In the UK even the worst house would be at least $130,000.

[GinBoy2]

51 minutes ago, Henryford said:

You are lucky in the States having at least something like that on offer. In the UK even the worst house would be at least $130,000.

That's scary.

 

At least in the US if you must, there are always locations, not ideal where you can get something dirt cheap.

 

 

[fredscats]

The US especially the increase can be seen as segregation,people want to live in their own communities along with their racial peers,a good thing. when u look at UK  a multi racial hell hole that divides groups by wired fencing,the US whole area's

[Berkshire]

The increase in price is partially to do with people stampeding to get in before the interest rates start to climb.  And if home prices rise, so will the rental price.  I do wonder if this is another real estate bubble destined to burst in the not-so-distant future. 

[GinBoy2]

3 minutes ago, Berkshire said:

The increase in price is partially to do with people stampeding to get in before the interest rates start to climb.  And if home prices rise, so will the rental price.  I do wonder if this is another real estate bubble destined to burst in the not-so-distant future. 

The folks that get burnt when the bubble bursts, as it will, are those who have leveraged themselves up the ying yang.

I'm fairly comfortable that my rentals, which are fully paid for, will still get a recent rental income even when the equity bubble eases

[mtls2005]

Time on the market is quite low. From highs of 60 days not so long ago, now approaching 10 days.

 

Bid/ask now slightly above 1.0.

 

And rents, oy vey, you'd think these would be flat or decline, but price:rent ratio approaching the 2006 height.

 

I guess if I still owned I might think about selling now, unless I had a reliable, long-term renter. 

[GinBoy2]

We're quite lucky in the rental market. 

 

We live next to an AFB which is poised to get a huge increase in personnel ready for the B-21 bomber deployments in 2022/23.

 

So for us the rental market is gonna be quite buoyant for the foreseeable future regardless of what happens to equity

[cmarshall]

It's only a problem if one accepts the bedrock American attitude that membership in the middle class absolutely requires a house and a car.  I myself would rather put my head in a bucket of varnish that own either one.   While US home ownership reached a high of 67% by 2005, just before the bubble burst, home ownership in wealthy Germany as recently as 2017 was only 51%.  The Germans have never been as gaga about owing a house as Americans.

 

Home ownership in the US has been an important way to accumulate wealth, but that is mostly needed during one's working years.  For most of us, once we have retired it is more important to reduce risk than to seek additional gains since we have more to lose.  Ownership entails risks and costs.  

 

 

[tonray]

On 8/23/2021 at 8:47 AM, GinBoy2 said:

At least in the US if you must, there are always locations, not ideal where you can get something dirt cheap.

Never mind the drug dealers and gang activity....because that's what you'll have in those neighborhoods. Crime rates thru the roof and just a miserable existence. Not safe for aging expats for sure