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Originally Posted by DodgingCars
Without the help of "experts" though, I think some housing markets have to be at their peak. There are lower-middle class neighborhoods near me that have houses selling for $500-600k. That's nuts. Who's buying these houses? .
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I read the same articles from the FW thread. You know who's buying the houses?
1. Makeshift "investors" who hope that the real estate market continues growing at it's current rate, and who either take out money from their primary home to invest in a second one, or just take out an interest-only or ARM and hope to sell in a couple of years (although that new law will kill short term sellers with taxes) They don't mind paying the appreciated price because they assume some other guy will pay even more later on down the line.
2. Young families who are afraid of being priced out of the housing market and are forced to take IO or ARM loans to even afford the monthly payments on the house. They are assured that the equity will continue to grow at this insane rate so that by the time they have to pay off principal or the rate becomes adjustable and their payments rise, they should have enough to cover it.
I'm really, really close to being buyer number 2.