All Forum Posts by: Josh Edwards

@David A.

So my question is how is the current student loan situation any different from the housing market in 2008? Isn’t the exact same thing happening right now with student loans that happened in 2008?

I don’t understand why the government is backing such high risk loans understanding the fact that many of these loans may not be payed back?

@Bill Brandt

I 100% agree Bill! I go to Stony Brook University, a local university near me that I used to commute to but now I’m online. I’m very fortunate to where my dad helps me pay for it but I’m make sure to do well and everything else.

But when I first got to the school, all they talked about was the buildings they newly constructed and the dorms they were building for students. But not much about the programs themselves. And this is a state school, not even a private university. I could not even imagine going into exorbitant amounts of debt for education that could possibly not even be utilized in my career later down the road.

I don’t know if you watch Dave Ramsey on YouTube, but it’s unbelievable how many students call in saying how they have over $100k in student loan debts and they’re making $40k a year! With increasing rents and housing prices how are they supposed to pay off these loans? They can’t, and to be truthful I think they know they can’t and they accept it. Students are waiting for a break from the government but I really do not think it will come. This is not a political issue but more of an economic one.

Students should have never been allowed to borrow this money in the first place and the fact that it is being backed by the government as an ‘investment in your future’ is completely ridiculous. It’s pretty much a calculated gamble at that point. Most students still don’t know what they want to do after school. Maybe we should start implementing rich dad poor dad into our school’s curriculum so we can learn that investments make you money, not make you lose money LOL!

@Cathryn Sta

Hey Cathryn!

I see where you are coming from. It seems that many first time homebuyers by me are also having a hard time buying so like you said they are happy to get the home even if that means over paying a tad bit. Something about it just does not sit right with me though. Maybe I’m overthinking it, but if the average person stays in a house for 7-8 years and they’re not really paying towards principal during this time doesn’t it seem a little concerning? What if rates do go up and values go down? Or maybe I’m wrong, maybe they keep going down, or maybe they go up and housing prices still keep increasing? What then?

@Russell Brazil

Got it thanks for explaining that to me Russell! So I guess the real question has to be if wages will follow in the increase of housing prices then correct? To increase household spending, people need higher wages no? The more you explain it the more it makes sense to me that I’m wrong, haha! I just like to hear other peoples perspective on this.

@Paul Scozzari

Hey Paul thanks for the response!

I saw the big short I’m a very big fan of that movie! I see what you are saying about the fact that people were getting approved for mortgages when they realistically couldn’t afford them at all.

What I’m more concerned about is the people possibly over leveraging and over paying for their homes. It seems by me at least that middle class homebuyers need to be paying at least 10-20k over asking price just to compete with the cash offers. That’s some pretty serious money for a first time homebuyer. And when interest rates go up, market value goes down correct? Wouldn’t this lead to many people being underwater on their loans in a few years?

@Bill Brandt

Hey Bill, thanks for the response!

I’ve never seen it from that perspective. I do agree college is completely ridiculous in the way they take advantage of these kids. I know a friend my age (20 years old) that will graduate with $75,000 worth of student loan debt! Why are they letting students borrow this exorbitant amount of money? Is it because they are getting funding from the government?

@David A.

Interesting perspective David,

I’m seeing the same thing that you are, I feel that we’re in a big bubble right now, but stocks, real estate and other assets just keep going up.

Maybe this is the new normal after all.

I just don’t see anything in the future that can cause the bubble to pop. Even after seeing unemployment numbers go up the stock market is red for a day, but then proceeds to reach all time highs in the next couple of days. Weird world we’re living in today.

@Russell Brazil

Yeah that makes sense but I’m curious to see how much homes have appreciated over the years while factoring in for inflation.

@Russell Brazil

Hey Russell,

Thanks for the response!

Yeah I see what you mean, it’s definitely interesting to see how much home prices have appreciated over the years!

Josh

Hey guys,

I’m relatively new to BiggerPockets and I am having a hard time understanding our current market conditions.

I am from Long Island, New York, last summer due to COVID there was lots of cash buyers entering the market and they were often overbidding on properties by tens of thousands.

How is it possible that is has become normal for agents to start recommending people to bid over asking price on houses? I get the basic facts of supply and demand and low interest rates.

But how is this sustainable in the long term? In my opinion rates have become way too low and this has caused almost this bubble of inflated housing prices. I think that we will see interest rates go up by the end of this year if not then next year.

Would this lead to lower values of homes? Or would we keep seeing this insane demand for housing? I’m pretty young so I don’t have much understanding of what happened in 2008, but something about this seems pretty similar.

Please correct me if I’m wrong, I want to hear everyone’s opinions on this matter so I can better understand what’s going on.

Thanks!

Josh