Why No One Laughs at the "Pepitos" Who Bought Homes Anymore

What they were laughing at: the "pepito" who bought a home was right

Buying a home at the peak of the bubble was foolish. Signing a thirty-year mortgage seemed like the joke of the decade. Twenty years later, that joke has become a real estate payment that the tenant pays every month and the owner no longer does. The pepitos —those who committed when everyone pointed fingers— are not only still here: those who held on are, in many cases, on the verge of finishing their payments.

The change in narrative doesn't come from a Banco de España (Spain's central bank) report. It comes from the current account. Those who bought more than two decades ago are now facing the final stretch of their mortgage, sometimes with refinancings along the way, but with an asset in hand. Those who decided to wait for prices to fall are still waiting. And paying.

He who waited for prices to drop: between 50 and 10,000 euros

The patience thesis has some truth to it. There have been periods where holding on meant real savings, which one forum user calculates between 50 and 10,000 euros depending on the time and city. It wasn't always a bad idea to watch from afar. But the balance of two decades of waiting is different: housing prices have trinc an upward trajectory since the seventies, with dips that buried those who bought at the top and a subsequent climb that devoured any advantage.

Therein lies the uncomfortable paradox. The bubble existed, yes. And there also existed —exists— a market where major capitals rise because the need for housing exceeds the available supply. The price doesn't matter. The regime doesn't matter. There aren't enough units.

Why is rent eating up salaries?

Because the owner charges what the market will bear, and the market bears a lot. The rule a forum user defends is simple: the purchase should not exceed 30% of the average salary in the area, and rent should not exceed 15%. In a Spanish capital, these numbers haven't been seen for years. As one forum user argues, if rent hadn't skyrocketed to the stratosphere, almost all tenants would pay religiously. The problem isn't default: it's the monthly payment.

The bailout no one repaid

There's a figure that a forum user repeats in any discussion about properties and banks: 122 billion euros of public money injected into the financial bailout, plus interest. According to that same narrative, homes bought with that money remain vacant or in portfolios that never returned to the taxpayer: the banks kept the real estate, and the citizen, the bill.

On that foundation lies the distrust that permeates any conversation about buying or renting. As one forum user summarizes, buying a home is like investing in the stock market: there's risk, and the good day was yesterday. Luck rewards some and ruins others with the same move. That it turned out well for someone doesn't make their decision a good one.

The scarcity that can't be fixed by giving away homes

This is where optimism breaks. In the capitals, prices rise because there aren't enough units, not because credit is being handed out freely. Give away the homes, and there will still be a shortage: you'll just change the filter to access them. According to one forum user, the new housing needed now costs over 300,000 euros with sky-high materials and labor costs.

While the debate gets stuck between those demanding a fair price and those recalling that the market sets that price, according to a circulating calculation, rental profitability in Madrid ranges between 2.1% in Recoletos and barely better figures elsewhere in the city. With those margins, there's plenty of reason not to risk savings on brick. And yet.

The question is no longer whether the "pepito" was right, but how much right the person who buys today believing they are repeating his luck actually has.