Tales from this insane real estate market [Home sales]

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bltn
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Re: Tales from this insane real estate market

Post by bltn »

WhyNotUs wrote: Sun Mar 28, 2021 8:06 am
ASpenderInRecovery wrote: Tue Mar 23, 2021 8:11 pm Bogleheads,

Fortunately for us we are happy to stay put in our townhouse, and this whole experience taught us how fortunate we are to live in a modest townhouse, have a generous dual income, and high savings rate by living far beneath our means. I know we won't live in this townhouse forever, but we won't consider moving again for several years. Since losing the last house, I've decided to take it as a learning lesson and immediately paid off my wife's remaining low interest student loans, and will be moving a good chunk of the former down payment into my taxable.
This is an incredibly sane response to the situation. Thankful for what one has, accepting the unreal reality of the moment, and taking actions that can set the OP up for future choices. Bravo
I agree.
runninginvestor
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Re: Tales from this insane real estate market

Post by runninginvestor »

FIREchief wrote: Sat Mar 27, 2021 4:05 pm What will happen if/when mortgage rates increase 2% from today's record low rates? For those who buy today and stay put. Probably nothing. For those who buy today and then need to sell in 3 - 5 years, the same buying demographic will likely be forced to offer a lot less due to their abilities to qualify and make payments. "Underwater" may again become part of the vernacular in the residential real estate realm.
This is what I think will likely happen.

I was chatting with someone and I said that even if prices don't drop, and they just stabilize, a lot of people with new mortgages during these historically low rate environments could be locked in to only making lateral or step down movements when interest rates rise again. The kind of monthly payment they are making on a house now, would likely put them out of reach on the same house at higher interest rates.

Which could also make it tough if another recession hits and interest rates decline again. The new homeowners now won't be able to refinance their loans to help with monthly cash flows, and may have to resort to cash out refinancing in some aspect.
snowman
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Re: Tales from this insane real estate market

Post by snowman »

runninginvestor wrote: Sun Mar 28, 2021 8:21 am
FIREchief wrote: Sat Mar 27, 2021 4:05 pm What will happen if/when mortgage rates increase 2% from today's record low rates? For those who buy today and stay put. Probably nothing. For those who buy today and then need to sell in 3 - 5 years, the same buying demographic will likely be forced to offer a lot less due to their abilities to qualify and make payments. "Underwater" may again become part of the vernacular in the residential real estate realm.
This is what I think will likely happen.

I was chatting with someone and I said that even if prices don't drop, and they just stabilize, a lot of people with new mortgages during these historically low rate environments could be locked in to only making lateral or step down movements when interest rates rise again. The kind of monthly payment they are making on a house now, would likely put them out of reach on the same house at higher interest rates.

Which could also make it tough if another recession hits and interest rates decline again. The new homeowners now won't be able to refinance their loans to help with monthly cash flows, and may have to resort to cash out refinancing in some aspect.
While that's true, you can also make an argument that people will be reluctant to sell their existing house in higher interest rate environment. And since most buyers today are aware of the fact that these are historic rates, they are buying more house than they need so there is little need to upgrade in the future. A lot of future job-related moves might be eliminated due to WFH. So the final outcome might be that fewer homes hit the market compared to historical precedence, and prices may not take a hit as the usually would.
av111
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Re: Tales from this insane real estate market

Post by av111 »

BradJ wrote: Sun Mar 28, 2021 7:36 am
FIREchief wrote: Sat Mar 27, 2021 4:05 pm What will happen if/when mortgage rates increase 2% from today's record low rates? For those who buy today and stay put. Probably nothing. For those who buy today and then need to sell in 3 - 5 years, the same buying demographic will likely be forced to offer a lot less due to their abilities to qualify and make payments. "Underwater" may again become part of the vernacular in the residential real estate realm.
I agree 100% with this worry. Example: If I price my house 10-15k above worth and a bidding war results in an offer 20k above asking AND worth of the home, how does that new homeowner recover if the market tanks in 3-5 years and they have to move?
This is an interesting question. Have there been situations in the past where housing has dropped significantly when lending has been super restrictive? GFC 2008 comes to the mind but lenders were too easy with the loans at that time so it is not a good example

Rates generally rise in an inflationary environment. Housing values generally appreciate in that environment
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Arabesque
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Re: Tales from this insane real estate market

Post by Arabesque »

Here's a tale:

This discussion inspired me to check back on a house I sold 7 months ago in LCOL area. It had appreciated about 90% in 20 years. According to Zillow (limited, I know), it has appreciated 20% in the last 6 months. It's almost enough to make me wish I stayed put a little longer. Bubble.
Last edited by Arabesque on Sun Mar 28, 2021 4:43 pm, edited 1 time in total.
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unclescrooge
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Re: Tales from this insane real estate market

Post by unclescrooge »

Beensabu wrote: Sat Mar 27, 2021 10:00 pm
sabhen wrote: Sat Mar 27, 2021 9:23 pm
by Cosmo » Sat Mar 27, 2021 4:07 pm

It’s hard to beat sight unseen offers 15 to 20% above ask. It makes sense to stay put. A big house will be a lot of work and money.
Not sure about that. Everyone seems to be leaving CA and moving to Texas and other more tax friendly states.
Everyone?

How do you explain then the current house price boom in CA?
That would be the people leaving and selling their houses to FOMO suckers who are going to end up in foreclosure in the next bust. At least, the non trust fundies are... Also renters. Renters leaving in droves. A lot of born and raised getting priced out of the roof over head situation if they're not part of a multi-generation household. Off to PNW, Texas, Nevada and Arizona mostly. For years now.
Obviously enough people are not leaving. Why else are there still dozens of offers on each property up to a million dollars in SoCal and all houses going into escrow within days of being listed.
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unclescrooge
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Re: Tales from this insane real estate market

Post by unclescrooge »

Beensabu wrote: Sat Mar 27, 2021 11:13 pm
Cycle wrote: Sat Mar 27, 2021 10:23 pm This is how housing becomes affordable in big cities and near the downtowns of suburbs, building 6plexes where there used to be single family homes. These are the missing middle type of buildings.
I'd agree if they weren't all luxury apartments. But they are. They're all luxury apartments.
It doesn't matter what you build. Rent is set by suppply and demand. Today's luxury becomes tomorrow's section 8.
Look at many poorer neighborhoods in Los Angeles. A lot of them have numerous craftsman and Victorian mansions from the early 1900s and were very posh neighborhoods back in the day.

If you overbuild class A buildings, most of them will stay vacant until they drop the rents. Then people currently renting class B buildings will move up the ladder and their vacancies will be filled by renters from class C buildings. Eventually, it will trickle down.
vfinx
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Re: Tales from this insane real estate market

Post by vfinx »

unclescrooge wrote: Sun Mar 28, 2021 11:01 am
Beensabu wrote: Sat Mar 27, 2021 10:00 pm
sabhen wrote: Sat Mar 27, 2021 9:23 pm
by Cosmo » Sat Mar 27, 2021 4:07 pm

It’s hard to beat sight unseen offers 15 to 20% above ask. It makes sense to stay put. A big house will be a lot of work and money.
Not sure about that. Everyone seems to be leaving CA and moving to Texas and other more tax friendly states.
Everyone?

How do you explain then the current house price boom in CA?
That would be the people leaving and selling their houses to FOMO suckers who are going to end up in foreclosure in the next bust. At least, the non trust fundies are... Also renters. Renters leaving in droves. A lot of born and raised getting priced out of the roof over head situation if they're not part of a multi-generation household. Off to PNW, Texas, Nevada and Arizona mostly. For years now.
Obviously enough people are not leaving. Why else are there still dozens of offers on each property up to a million dollars in SoCal and all houses going into escrow within days of being listed.
The California exodus seems to be exaggerated by the media, and people that want to draw attention to problems in the state. There has always been a steady flow of people that arbitrage the greater wealth generation opportunities the state offers, and I haven't seen data to suggest a dramatic surge in that.

https://www.sfchronicle.com/bayarea/art ... 983559.php

I'm also skeptical of the narrative that a lot of people acted irrationally and moved out of state and purchased a house, without guidance from their companies, and will suddenly be forced to move back, triggering a massive real estate crash. Even in tech, most companies did not commit to a permanent remote work force (the media just hyped up the ones that did). The most common pattern I see in tech is a switch to a hybrid model where workers will be expected to be in the office 1-3 days a week, and in my network at least, everyone has planned on that. I know of a few people that are renting a place in a nice location during office closures, but they plan to return (and rent again) once they are called back.
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unclescrooge
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Re: Tales from this insane real estate market

Post by unclescrooge »

runninginvestor wrote: Sun Mar 28, 2021 8:21 am
FIREchief wrote: Sat Mar 27, 2021 4:05 pm What will happen if/when mortgage rates increase 2% from today's record low rates? For those who buy today and stay put. Probably nothing. For those who buy today and then need to sell in 3 - 5 years, the same buying demographic will likely be forced to offer a lot less due to their abilities to qualify and make payments. "Underwater" may again become part of the vernacular in the residential real estate realm.
This is what I think will likely happen.

I was chatting with someone and I said that even if prices don't drop, and they just stabilize, a lot of people with new mortgages during these historically low rate environments could be locked in to only making lateral or step down movements when interest rates rise again. The kind of monthly payment they are making on a house now, would likely put them out of reach on the same house at higher interest rates.

Which could also make it tough if another recession hits and interest rates decline again. The new homeowners now won't be able to refinance their loans to help with monthly cash flows, and may have to resort to cash out refinancing in some aspect.
This why I think interest rates are unlikely to go up until the economy starts to overheat significantly.
capsaicinguy
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Re: Tales from this insane real estate market

Post by capsaicinguy »

Family is moving nearby us in the upper midwest. They are leaving NW indiana. They originally offered on a place in a small town about 20min from us. Lost out on it as it had multiple offers and went about 15-20 over ask from what I understand. (about 7-10%). Have discussed with several realtors locally that say prices are up 10+% from last year and everything is going for about 15-30k over ask (10+%). But my family was able to secure a place as the only offer for a few thousand over ask. :confused Their place in NW indiana, first offer was 30k over list. It's an absolute feeding frenzy for anything sub-300 around here. Contingent within hours. Happy to be in the place we bought last year and sit this one out. We will stay put for quite a while.
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FIREchief
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Re: Tales from this insane real estate market

Post by FIREchief »

lazynovice wrote: Sat Mar 27, 2021 11:00 pm In our last neighborhood, everyone, including us, got rid of all carpet. Just had hard surfaces- tile and hard woods. Great for allergies and in a warm climate. When we moved to a colder climate... back to carpet. Different strokes for different folks.
Ironically, when we had our last house built in the 1990's, everybody wanted tile everywhere. IIRC, it cost about three times the cost of carpet. Due to LBYM, we went with mostly carpet. When we finally sold it two years ago, our realtor told us it was great that it had mostly carpet and little tile. It seems that everybody now wants laminate everywhere, and the cost of ripping out tile can be huge. :P
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ut2sua
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Re: Tales from this insane real estate market

Post by ut2sua »

The sp500 etf shares I bought 2 years ago went up by ~50% in value. Given that new stock shares could be issued and acreage on earth is fixed, may be it is justified that home value goes up with the stock market???
rage_phish
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Re: Tales from this insane real estate market

Post by rage_phish »

unclescrooge wrote: Sun Mar 28, 2021 11:01 am
Beensabu wrote: Sat Mar 27, 2021 10:00 pm
sabhen wrote: Sat Mar 27, 2021 9:23 pm
by Cosmo » Sat Mar 27, 2021 4:07 pm

It’s hard to beat sight unseen offers 15 to 20% above ask. It makes sense to stay put. A big house will be a lot of work and money.
Not sure about that. Everyone seems to be leaving CA and moving to Texas and other more tax friendly states.
Everyone?

How do you explain then the current house price boom in CA?
That would be the people leaving and selling their houses to FOMO suckers who are going to end up in foreclosure in the next bust. At least, the non trust fundies are... Also renters. Renters leaving in droves. A lot of born and raised getting priced out of the roof over head situation if they're not part of a multi-generation household. Off to PNW, Texas, Nevada and Arizona mostly. For years now.
Obviously enough people are not leaving. Why else are there still dozens of offers on each property up to a million dollars in SoCal and all houses going into escrow within days of being listed.

It often seems like a bogus claim made by people who generally don’t like California’s politics
Normchad
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Re: Tales from this insane real estate market

Post by Normchad »

rage_phish wrote: Sun Mar 28, 2021 3:41 pm
unclescrooge wrote: Sun Mar 28, 2021 11:01 am
Beensabu wrote: Sat Mar 27, 2021 10:00 pm
sabhen wrote: Sat Mar 27, 2021 9:23 pm
by Cosmo » Sat Mar 27, 2021 4:07 pm

It’s hard to beat sight unseen offers 15 to 20% above ask. It makes sense to stay put. A big house will be a lot of work and money.
Not sure about that. Everyone seems to be leaving CA and moving to Texas and other more tax friendly states.
Everyone?

How do you explain then the current house price boom in CA?
That would be the people leaving and selling their houses to FOMO suckers who are going to end up in foreclosure in the next bust. At least, the non trust fundies are... Also renters. Renters leaving in droves. A lot of born and raised getting priced out of the roof over head situation if they're not part of a multi-generation household. Off to PNW, Texas, Nevada and Arizona mostly. For years now.
Obviously enough people are not leaving. Why else are there still dozens of offers on each property up to a million dollars in SoCal and all houses going into escrow within days of being listed.

It often seems like a bogus claim made by people who generally don’t like California’s politics
Certainly not *everybody* is leaving CA and going to TX. But according to United Van Lines, an awful lot of people are:

The relocation sweeping the (West of our) nation One of the most interesting trends from the 2019 United Van Lines’ National Movers Study and reports throughout the year is the hefty migration that’s happening between California and Texas. In 2019, of people who moved out of California, 7% of movers relocated to Texas. In comparison, the next most popular state that Californians moved to was Arizona with just 2.8%. Based on some reports, over the last 10 years, nearly one million people have transplanted from California, into Texas. So, naturally, we decided to take a closer look at why this is happening.

I’m looking to buy a house in Texas, and the people there commonly say that transplants from having a big impact on the local RE market.
Tingting1013
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Re: Tales from this insane real estate market

Post by Tingting1013 »

Normchad wrote: Sun Mar 28, 2021 4:27 pm
rage_phish wrote: Sun Mar 28, 2021 3:41 pm
unclescrooge wrote: Sun Mar 28, 2021 11:01 am
Beensabu wrote: Sat Mar 27, 2021 10:00 pm
sabhen wrote: Sat Mar 27, 2021 9:23 pm

Everyone?

How do you explain then the current house price boom in CA?
That would be the people leaving and selling their houses to FOMO suckers who are going to end up in foreclosure in the next bust. At least, the non trust fundies are... Also renters. Renters leaving in droves. A lot of born and raised getting priced out of the roof over head situation if they're not part of a multi-generation household. Off to PNW, Texas, Nevada and Arizona mostly. For years now.
Obviously enough people are not leaving. Why else are there still dozens of offers on each property up to a million dollars in SoCal and all houses going into escrow within days of being listed.

It often seems like a bogus claim made by people who generally don’t like California’s politics
Certainly not *everybody* is leaving CA and going to TX. But according to United Van Lines, an awful lot of people are:

The relocation sweeping the (West of our) nation One of the most interesting trends from the 2019 United Van Lines’ National Movers Study and reports throughout the year is the hefty migration that’s happening between California and Texas. In 2019, of people who moved out of California, 7% of movers relocated to Texas. In comparison, the next most popular state that Californians moved to was Arizona with just 2.8%. Based on some reports, over the last 10 years, nearly one million people have transplanted from California, into Texas. So, naturally, we decided to take a closer look at why this is happening.

I’m looking to buy a house in Texas, and the people there commonly say that transplants from having a big impact on the local RE market.
https://www.sfchronicle.com/bayarea/art ... 955527.php
radiowave
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Re: Tales from this insane real estate market

Post by radiowave »

toomanysidehustles wrote: Sat Mar 27, 2021 7:10 am
mceagle555 wrote: Sat Mar 27, 2021 1:16 am Will there be areas which are more insulated than others?

Places that come to mind:

- Austin, TX (Major migration of tech there)
- Huntsville, AL (Space Force)
- NOVA (Govt, Amazon HQ2)
- Nashville, TN (Low taxes, climate, Amazon, big city, but not a mega-city)
- Silicon Valley


Other areas y'all think of and/or disagree with above?

You can add hundreds of metro's to this list.
-Denver Metro
-Boise Metro
-SLC Metro (Utah actually has/had more action that Austin,TX according to U-Haul data)
-Tucson
-San Antonio
-Houston
-DFW
-Raleigh
-Charleston, SC
-Bend, OR
-Hood River, OR
-etc....

The problem with some areas like Northern Virginia is the traffic was bad pre-pandemic and it was fairly built out. Not much affordable space left. I moved from a super crowded Atlanta, GA to Fort Collins CO to escape my need for a motor vehicle. Now everything I do and go is a 3 mile circle. I hadn't even gone to Denver (an hour south) in 18 months. I think this trend will continue, and hence our market going nuts like many others posted here.

What we are seeing is Denver is now growing, and the people leaving Denver thinking it is too crowded and moving an hour outside Denver. LOTS of Southwest and United pilots moving from CA to CO for a better quality of life. I am sure it is the same for other metro areas and naturally has in the history of population migration now that "city trade" isn't as necessary as before.

My sister moved from Brooklyn NY to Palma de Mallorca Spain. Long time city people are pulling the plug on cities big time it seems now that work from anywhere is a thing.
Yeah, live in south metro DEN, was driving through my neighborhood on Friday and saw a parade of cars waiting to see a new listing, today (Sunday 2 days later) the real estate agent gleefully put a sign up top that said "Gone" Houses that were in the 400 range just a couple years ago are well into the 600s now.
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Re: Tales from this insane real estate market

Post by LadyGeek »

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mikejuss
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Re: Tales from this insane real estate market

Post by mikejuss »

KlangFool wrote: Sat Mar 27, 2021 3:56 pm
ChrisC wrote: Sat Mar 27, 2021 3:33 pm
You appear to view this solely from the perspective of a rational decision-maker devoid of the emotional aspects of housing ownership
ChrisC,

That part is not true. I had seen too many of my peers financially destroyed by their houses. Hence, emotionally, I seen the house ownership as a huge negative. It destroyed financial stability. And, that is a major difference between you and me.

You seen the house ownership as emotionally positive. I seen it as emotionally negative.

KlangFool
In what sense were your peers "financially destroyed" by owning a house?
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Re: Tales from this insane real estate market

Post by KlangFool »

mikejuss wrote: Sun Mar 28, 2021 6:51 pm
KlangFool wrote: Sat Mar 27, 2021 3:56 pm
ChrisC wrote: Sat Mar 27, 2021 3:33 pm
You appear to view this solely from the perspective of a rational decision-maker devoid of the emotional aspects of housing ownership
ChrisC,

That part is not true. I had seen too many of my peers financially destroyed by their houses. Hence, emotionally, I seen the house ownership as a huge negative. It destroyed financial stability. And, that is a major difference between you and me.

You seen the house ownership as emotionally positive. I seen it as emotionally negative.

KlangFool
In what sense were your peers "financially destroyed" by owning a house?
Reposted.

<<ChrisC,

<<but to say the house purchase itself destroyed financial stability seems like a stretch to me,>>

A) Your house is underwater. You cannot sell because you have to pay the bank in order to sell the house. And, you cannot rent out the house.

B) Your industry/region had gone to hell. You need to leave the region in order to find a job.

C) If you are lucky, you find a new job in location (B). You are paying the mortgage in the old location (A) while paying rent in the new location (B). Because the industry had gone to hell, you are underemployed and underpaid.

D) If you are lucky, you survive long enough to sell the house in (A) without a huge loss. If you are unlucky, you lose the house plus everything else.

KlangFool

P.S.: The average gross saving rate of the American is less than 5%. It does not take much unemployment to get a "House Poor" person into serious trouble.>>

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Re: Tales from this insane real estate market

Post by ChrisC »

KlangFool wrote: Sun Mar 28, 2021 7:20 pm
mikejuss wrote: Sun Mar 28, 2021 6:51 pm
KlangFool wrote: Sat Mar 27, 2021 3:56 pm
ChrisC wrote: Sat Mar 27, 2021 3:33 pm
You appear to view this solely from the perspective of a rational decision-maker devoid of the emotional aspects of housing ownership
ChrisC,

That part is not true. I had seen too many of my peers financially destroyed by their houses. Hence, emotionally, I seen the house ownership as a huge negative. It destroyed financial stability. And, that is a major difference between you and me.

You seen the house ownership as emotionally positive. I seen it as emotionally negative.

KlangFool
In what sense were your peers "financially destroyed" by owning a house?
Reposted.

<<ChrisC,

<<but to say the house purchase itself destroyed financial stability seems like a stretch to me,>>

A) Your house is underwater. You cannot sell because you have to pay the bank in order to sell the house. And, you cannot rent out the house.

B) Your industry/region had gone to hell. You need to leave the region in order to find a job.

C) If you are lucky, you find a new job in location (B). You are paying the mortgage in the old location (A) while paying rent in the new location (B). Because the industry had gone to hell, you are underemployed and underpaid.

D) If you are lucky, you survive long enough to sell the house in (A) without a huge loss. If you are unlucky, you lose the house plus everything else.

KlangFool

P.S.: The average gross saving rate of the American is less than 5%. It does not take much unemployment to get a "House Poor" person into serious trouble.>>

KlangFool
They were destroyed because their employment became shaky and they couldn’t meet living expenses. I think the Klang Fool gets it wrong here in terms of the causation for the demise of his peers. Unemployment made the house unaffordable and the mortgage payment became an unbearable weight around their necks but the house purchase itself didn’t financially destroy them. Lack of income to support their living expenses did them in. The house became unaffordable because they lost their current jobs or had to scramble to find new employment and were anchored by a house in a location far from where the new employment was available.
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Re: Tales from this insane real estate market

Post by KlangFool »

ChrisC wrote: Sun Mar 28, 2021 7:52 pm
KlangFool wrote: Sun Mar 28, 2021 7:20 pm
mikejuss wrote: Sun Mar 28, 2021 6:51 pm
KlangFool wrote: Sat Mar 27, 2021 3:56 pm
ChrisC wrote: Sat Mar 27, 2021 3:33 pm
You appear to view this solely from the perspective of a rational decision-maker devoid of the emotional aspects of housing ownership
ChrisC,

That part is not true. I had seen too many of my peers financially destroyed by their houses. Hence, emotionally, I seen the house ownership as a huge negative. It destroyed financial stability. And, that is a major difference between you and me.

You seen the house ownership as emotionally positive. I seen it as emotionally negative.

KlangFool
In what sense were your peers "financially destroyed" by owning a house?
Reposted.

<<ChrisC,

<<but to say the house purchase itself destroyed financial stability seems like a stretch to me,>>

A) Your house is underwater. You cannot sell because you have to pay the bank in order to sell the house. And, you cannot rent out the house.

B) Your industry/region had gone to hell. You need to leave the region in order to find a job.

C) If you are lucky, you find a new job in location (B). You are paying the mortgage in the old location (A) while paying rent in the new location (B). Because the industry had gone to hell, you are underemployed and underpaid.

D) If you are lucky, you survive long enough to sell the house in (A) without a huge loss. If you are unlucky, you lose the house plus everything else.

KlangFool

P.S.: The average gross saving rate of the American is less than 5%. It does not take much unemployment to get a "House Poor" person into serious trouble.>>

KlangFool
They were destroyed because their employment became shaky and they couldn’t meet living expenses. I think the Klang Fool gets it wrong here in terms of the causation for the demise of his peers. Unemployment made the house unaffordable and the mortgage payment became an unbearable weight around their necks but the house purchase itself didn’t financially destroy them. Lack of income to support their living expenses did them in. The house became unaffordable because they lost their current jobs or had to scramble to find new employment and were anchored by a house in a location far from where the new employment was available.
ChrisC,

This is a normal occurrence in a recession. The stock market, housing market, and the job market all goes bad at the same time. Some people are lucky that it did not affect them.

<<Unemployment made the house unaffordable and the mortgage payment became an unbearable weight around their necks but the house purchase itself didn’t financially destroy them. Lack of income to support their living expenses did them in. The house became unaffordable because they lost their current jobs or had to scramble to find new employment and were anchored by a house in a location far from where the new employment was available.>>

This was a not a problem for the renter. Hence, the house destroyed them financially.

KlangFool
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Re: Tales from this insane real estate market

Post by ChrisC »

KlangFool.

Sure it’s a problem for the renter. He gets evicted from his home for failure to pay rent. Hence, unemployment destroyed them financially — why can’t you see that?
KlangFool
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Re: Tales from this insane real estate market

Post by KlangFool »

ChrisC wrote: Sun Mar 28, 2021 8:51 pm KlangFool.

Sure it’s a problem for the renter. He gets evicted from his home for failure to pay rent. Hence, unemployment destroyed them financially — why can’t you see that?
ChrisC,

A) A renter at most has a one year rental agreement. He just need to pay rent for at most one year at the old location while paying rent at the new location.

B) A house owner has a mortgage that he has to pay until the housing market recovers. It could be much longer than one year.

It is easy to see the difference between (A) and (B). A person could survive (A) but not (B).

KlangFool
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ChrisC
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Re: Tales from this insane real estate market

Post by ChrisC »

KlangFool wrote: Sun Mar 28, 2021 9:00 pm
ChrisC wrote: Sun Mar 28, 2021 8:51 pm KlangFool.

Sure it’s a problem for the renter. He gets evicted from his home for failure to pay rent. Hence, unemployment destroyed them financially — why can’t you see that?
ChrisC,

A) A renter at most has a one year rental agreement. He just need to pay rent for at most one year at the old location while paying rent at the new location.

B) A house owner has a mortgage that he has to pay until the housing market recovers. It could be much longer than one year.

It is easy to see the difference between (A) and (B). A person could survive (A) but not (B).

KlangFool
KlangFool,

It’s easy to make stuff up to fit your desired conclusion. Pointless now for us to volley back and forth, as we’re not learning from each other. Have a good evening and I’m turning this off to watch Oregon or USC advance to the elite 8.
vested1
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Re: Tales from this insane real estate market

Post by vested1 »

ChrisC wrote: Sun Mar 28, 2021 9:08 pm
KlangFool wrote: Sun Mar 28, 2021 9:00 pm
ChrisC wrote: Sun Mar 28, 2021 8:51 pm KlangFool.

Sure it’s a problem for the renter. He gets evicted from his home for failure to pay rent. Hence, unemployment destroyed them financially — why can’t you see that?
ChrisC,

A) A renter at most has a one year rental agreement. He just need to pay rent for at most one year at the old location while paying rent at the new location.

B) A house owner has a mortgage that he has to pay until the housing market recovers. It could be much longer than one year.

It is easy to see the difference between (A) and (B). A person could survive (A) but not (B).

KlangFool
KlangFool,

It’s easy to make stuff up to fit your desired conclusion. Pointless now for us to volley back and forth, as we’re not learning from each other. Have a good evening and I’m turning this off to watch Oregon or USC advance to the elite 8.
+1
Obviously the bill for housing, whether buying or renting needs to be paid, regardless of the timing. The argument that there is some difference because a lease normally ends in a year doesn't negate the fact that the cost to rent or lease doesn't end when that year is up. The "simplicity" of saying it is "easier" to pay rent in two places at one time makes no sense when compared to owning, buying or selling real estate. This is a pointless argument at any rate.

The increase in real estate values affects owners, buyers, and sellers because it affects their planning if nothing else. It also affects renters because they end up paying more eventually. The concerning factor is when any particular segment of the economy outpaces inflation. The rapid increase in current real estate and healthcare costs (prescriptions) certainly qualify.
KlangFool
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Re: Tales from this insane real estate market

Post by KlangFool »

vested1 wrote: Mon Mar 29, 2021 7:40 am
+1
Obviously the bill for housing, whether buying or renting needs to be paid, regardless of the timing. The argument that there is some difference because a lease normally ends in a year doesn't negate the fact that the cost to rent or lease doesn't end when that year is up. The "simplicity" of saying it is "easier" to pay rent in two places at one time makes no sense when compared to owning, buying or selling real estate. This is a pointless argument at any rate.

The increase in real estate values affects owners, buyers, and sellers because it affects their planning if nothing else. It also affects renters because they end up paying more eventually. The concerning factor is when any particular segment of the economy outpaces inflation. The rapid increase in current real estate and healthcare costs (prescriptions) certainly qualify.
vested1,

<<The increase in real estate values affects owners, buyers, and sellers because it affects their planning>>

1) In a recession, the real estate value goes down. And, real estate does not go up all the time. It oscillates.

<<Obviously the bill for housing, whether buying or renting needs to be paid, regardless of the timing.>>

2) A) Folks buy a lot more houses than renting. Hence, the mortgage bill is a lot bigger.

B) Renting is a one year or less commitment. Buying is 10+ years commitment.

They are not at the same order magnitude.

KlangFool
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White Coat Investor
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Re: Tales from this insane real estate market

Post by White Coat Investor »

bogledogle wrote: Thu Mar 25, 2021 12:28 pm
AerialWombat wrote: Wed Mar 24, 2021 11:30 pm
drk wrote: Wed Mar 24, 2021 5:35 pm
AerialWombat wrote: Wed Mar 24, 2021 5:24 pm But on the other hand, it's the lowest risk way to build a rental portfolio I've ever seen. It's worked out very well for me. :beer
Do you have a thread about this, by chance? Do you get a new primary residence mortgage every time you decide to move?
No, I do not have a thread on it, but I have posted about it. BH is not kind to real estate investing threads, in general, so I mostly lay low about it.

To answer your question, yes, it’s a new owner occupied mortgage each time. The standard American mortgage contract mandates one year of occupancy as primary residence, after which they don’t care if you move and convert to rental.
Do you break even on all your rentals after paying the property manager? How do you find these deals?
Put more down. The difference between a cash flow positive property and a cash flow negative property is putting down 1/3 instead of 20%.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Calico
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Re: Tales from this insane real estate market

Post by Calico »

I haven't had a chance to read this whole thread, but the stuff I did read is what's making me think I should sell my house now instead of next year (I am moving in a year). I started a thread about it, but I really got nowhere with it (few answers except to tell me about moving and what that might mean with schools).

I plan to sell next year, after my daughter graduates from high school. I was going to move from NoVa to back home (LCOLA) since I can now telecommute. But now I am thinking now might be the time, before the bubble bursts. I could move into a rental and stay here for another year if need be. But there are all kinds of implications from EFC for college, to taxes, to logistics. I did contact a Realtor today about it though. I am also checking out apartments and house rentals. It's a lot to consider.
Last edited by Calico on Mon Mar 29, 2021 3:09 pm, edited 1 time in total.
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Haledom
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Re: Tales from this insane real estate market

Post by Haledom »

This market truly has been insane. We were going to close on a house in February 2020 but had to back out of the deal after things came up during the inspection. We backed out of the deal in January 2020 (pre-COVID). We continued to follow the market through the initial lull through Spring 2020 but since then the market has gotten out of reach. Houses that previously were sitting on the market for months on end are being snapped up and new listings go pending in a matter of hours sometimes. I now see a trend where the realtors have started listing houses with 3-4 pictures and a "coming soon" headline and they don't need to do anymore.

None of us of course when this will end but we are okay with being on the sidelines for now. We have our small starter house and are fine with living below our means.
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Hector
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Re: Tales from this insane real estate market

Post by Hector »

There are at least two posters in this thread who are sitting on sideline because they can afford ~1M$ home. And houses they are trying to buy are bing sold for more than that. I am sure there are more like them. And there might be more than them who are looking to buy $900k house. And there might be more than them who are looking to buy $800k house. And there might be more than them who are looking to buy $700k house. And there might be more than them who are looking to buy $600k house. And there might be more than them who are looking to buy $500k house. And there might be more than them who are looking to buy cheaper than half a million $ house. If/when prices go down, they will jump in to buy and stabilize the market. Seems like it might take forever for housing prices to go down.
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Hector
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Re: Tales from this insane real estate market

Post by Hector »

KlangFool wrote: Wed Mar 24, 2021 12:33 pm
vfinx wrote: Wed Mar 24, 2021 12:17 pm
KlangFool wrote: Wed Mar 24, 2021 12:13 pm
vfinx wrote: Wed Mar 24, 2021 12:07 pm
KlangFool wrote: Wed Mar 24, 2021 10:59 am OP,

Do not get caught up with this craziness. Look at the price history of the house around the area since 2004.

One house in my neighborhood. I am in NoVa.

2/2004 sold for 468K
3/2006 sold for 670K
2/2008 sold for 490K
9/2009 sold for 530K
12/2020 sold for 768K

KlangFool
Can you clarify which point you're trying to make here? Are you saying that since the prices have gone up so little (468K to 768K over 16 years is a ~3% gain per year), that it's still a reasonable time to purchase now?
Price go up and down in this market. It is not consistently up. If you bought this house at 2006, it did not recover until about 2018/2019. Aka 13 years later.

KlangFool
Does that mean we should try to time the housing market? (P.S. Please don't read any any snark in that question. I am genuinely just asking what your belief is.)
vfinx,

I buy a house assuming ZERO appreciation. Aka, it is significantly cheaper than renting. As per my rule, I buy a house when the PITI is 20% to 30% lowered than renting. The PITI is based on 20% down payment and 30 years fixed-rate mortgage. If you do that, you make money purely on imputed rent. You make money when you buy.

I bought my house based on this rule. The PITI was around $1,800 per month. The rent was around $2,300 per month.

Do not buy unless it is significantly cheaper than renting.

KlangFool
Most people that I know have bought bigger houses in expensive locations compare to what they were renting.
We rented a 2 bedroom place a decade ago. We splurged and rented 2 bedroom place when we did not have kids. We are a family of 4 now and are still are in the same place. We want to buy a bigger place if/when we will buy. At your logic, no one that I know would have bought house ever.
Last edited by Hector on Mon Mar 29, 2021 9:05 pm, edited 1 time in total.
KlangFool
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Re: Tales from this insane real estate market

Post by KlangFool »

Hector wrote: Mon Mar 29, 2021 8:24 pm
KlangFool wrote: Wed Mar 24, 2021 12:33 pm
vfinx wrote: Wed Mar 24, 2021 12:17 pm
KlangFool wrote: Wed Mar 24, 2021 12:13 pm
vfinx wrote: Wed Mar 24, 2021 12:07 pm

Can you clarify which point you're trying to make here? Are you saying that since the prices have gone up so little (468K to 768K over 16 years is a ~3% gain per year), that it's still a reasonable time to purchase now?
Price go up and down in this market. It is not consistently up. If you bought this house at 2006, it did not recover until about 2018/2019. Aka 13 years later.

KlangFool
Does that mean we should try to time the housing market? (P.S. Please don't read any any snark in that question. I am genuinely just asking what your belief is.)
vfinx,

I buy a house assuming ZERO appreciation. Aka, it is significantly cheaper than renting. As per my rule, I buy a house when the PITI is 20% to 30% lowered than renting. The PITI is based on 20% down payment and 30 years fixed-rate mortgage. If you do that, you make money purely on imputed rent. You make money when you buy.

I bought my house based on this rule. The PITI was around $1,800 per month. The rent was around $2,300 per month.

Do not buy unless it is significantly cheaper than renting.

KlangFool
Most people that I know have bought bigger houses in expensive locations compare to what they were renting.
We rented a 2 bedroom place a decade ago. We splurged and rented 2 bedroom place when we did not have kids. We are family of 4 now and are still are in the same place. We want to buy a bigger place if/when we will buy. At your logic, no one that I know would have bought house ever.
1) I bought my house a few years ago. I buy what I choose to rent.

2) Most people are not rich.

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smitcat
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Re: Tales from this insane real estate market

Post by smitcat »

KlangFool wrote: Mon Mar 29, 2021 9:26 am
vested1 wrote: Mon Mar 29, 2021 7:40 am
+1
Obviously the bill for housing, whether buying or renting needs to be paid, regardless of the timing. The argument that there is some difference because a lease normally ends in a year doesn't negate the fact that the cost to rent or lease doesn't end when that year is up. The "simplicity" of saying it is "easier" to pay rent in two places at one time makes no sense when compared to owning, buying or selling real estate. This is a pointless argument at any rate.

The increase in real estate values affects owners, buyers, and sellers because it affects their planning if nothing else. It also affects renters because they end up paying more eventually. The concerning factor is when any particular segment of the economy outpaces inflation. The rapid increase in current real estate and healthcare costs (prescriptions) certainly qualify.
vested1,

<<The increase in real estate values affects owners, buyers, and sellers because it affects their planning>>

1) In a recession, the real estate value goes down. And, real estate does not go up all the time. It oscillates.

<<Obviously the bill for housing, whether buying or renting needs to be paid, regardless of the timing.>>

2) A) Folks buy a lot more houses than renting. Hence, the mortgage bill is a lot bigger.

B) Renting is a one year or less commitment. Buying is 10+ years commitment.

They are not at the same order magnitude.

KlangFool
"1) In a recession, the real estate value goes down. And, real estate does not go up all the time. It oscillates."
Similar to the stock market it does occilate but goes up over time. In your general area real estate has risen by 990% over the past 42 years with the advantage that much or most of those increases would be tax free.
Northern Virginia home price appreciation over the years...
$58.7K - 1975
$579.7 - 2017
A multiple of 9.9 times increase over 42 years. Details and descriptions found at this site:
https://www.insidenova.com/news/arlingt ... 0c2f3.html
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Re: Tales from this insane real estate market

Post by smitcat »

KlangFool wrote: Mon Mar 29, 2021 8:38 pm
Hector wrote: Mon Mar 29, 2021 8:24 pm
KlangFool wrote: Wed Mar 24, 2021 12:33 pm
vfinx wrote: Wed Mar 24, 2021 12:17 pm
KlangFool wrote: Wed Mar 24, 2021 12:13 pm

Price go up and down in this market. It is not consistently up. If you bought this house at 2006, it did not recover until about 2018/2019. Aka 13 years later.

KlangFool
Does that mean we should try to time the housing market? (P.S. Please don't read any any snark in that question. I am genuinely just asking what your belief is.)
vfinx,

I buy a house assuming ZERO appreciation. Aka, it is significantly cheaper than renting. As per my rule, I buy a house when the PITI is 20% to 30% lowered than renting. The PITI is based on 20% down payment and 30 years fixed-rate mortgage. If you do that, you make money purely on imputed rent. You make money when you buy.

I bought my house based on this rule. The PITI was around $1,800 per month. The rent was around $2,300 per month.

Do not buy unless it is significantly cheaper than renting.

KlangFool
Most people that I know have bought bigger houses in expensive locations compare to what they were renting.
We rented a 2 bedroom place a decade ago. We splurged and rented 2 bedroom place when we did not have kids. We are family of 4 now and are still are in the same place. We want to buy a bigger place if/when we will buy. At your logic, no one that I know would have bought house ever.
1) I bought my house a few years ago. I buy what I choose to rent.

2) Most people are not rich.

KlangFool
"1) I bought my house a few years ago. I buy what I choose to rent."
How many homes have you bought over your life? How many changed in value either up or down over your ownership?
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JAZZISCOOL
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Re: Tales from this insane real estate market

Post by JAZZISCOOL »

CNN story 3/30/21:

"76 all-cash offers on one home. The housing madness shows no signs of slowing" - DC area.

https://www.cnn.com/2021/03/29/success/ ... index.html
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dogagility
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Re: Tales from this insane real estate market

Post by dogagility »

JAZZISCOOL wrote: Tue Mar 30, 2021 9:32 am CNN story 3/30/21:

"76 all-cash offers on one home. The housing madness shows no signs of slowing" - DC area.

https://www.cnn.com/2021/03/29/success/ ... index.html
My realtor said 43 offers were made on a recently-listed "cheaper" house (300K asking price) - midwest suburbia.
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rage_phish
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Re: Tales from this insane real estate market

Post by rage_phish »

our current house hits the market today and offers are due this afternoon on a house we'll be making an offer on

wish us luck!
bogledogle
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Re: Tales from this insane real estate market

Post by bogledogle »

White Coat Investor wrote: Mon Mar 29, 2021 9:32 am
bogledogle wrote: Thu Mar 25, 2021 12:28 pm
AerialWombat wrote: Wed Mar 24, 2021 11:30 pm
drk wrote: Wed Mar 24, 2021 5:35 pm
AerialWombat wrote: Wed Mar 24, 2021 5:24 pm But on the other hand, it's the lowest risk way to build a rental portfolio I've ever seen. It's worked out very well for me. :beer
Do you have a thread about this, by chance? Do you get a new primary residence mortgage every time you decide to move?
No, I do not have a thread on it, but I have posted about it. BH is not kind to real estate investing threads, in general, so I mostly lay low about it.

To answer your question, yes, it’s a new owner occupied mortgage each time. The standard American mortgage contract mandates one year of occupancy as primary residence, after which they don’t care if you move and convert to rental.
Do you break even on all your rentals after paying the property manager? How do you find these deals?
Put more down. The difference between a cash flow positive property and a cash flow negative property is putting down 1/3 instead of 20%.
Hey Doc!

Sure, putting down 1/3 will certainly force it to be cash flow positive, then you have to factor in the opportunity cost of that downpayment as an overall cost. I guess if your goal is to diversify into real estate, that makes sense. I guess my question is where do folks find real estate deals that make sense as an investment vs a 80/20 VTSAX/VBTLX portfolio?
RetireSomeday5
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Re: Tales from this insane real estate market

Post by RetireSomeday5 »

Hector wrote: Mon Mar 29, 2021 7:07 pm There are at least two posters in this thread who are sitting on sideline because they can afford ~1M$ home. And houses they are trying to buy are bing sold for more than that. I am sure there are more like them. And there might be more than them who are looking to buy $900k house. And there might be more than them who are looking to buy $800k house. And there might be more than them who are looking to buy $700k house. And there might be more than them who are looking to buy $600k house. And there might be more than them who are looking to buy $500k house. And there might be more than them who are looking to buy cheaper than half a million $ house. If/when prices go down, they will jump in to buy and stabilize the market. Seems like it might take forever for housing prices to go down.
My wife and I can afford circa 1m (according to bank approvals more like 1.5M). We are born/raised south Florida. Long story short, we currently rent a condo and are debating as to whether we should displace tenants at 1 of my 2 rental properties (semi-accidental landlord) or if we should just keep renting ourselves. All but giving up on trying to buy something new right now. My newest rental was bought to be a primary residence in 2013 at 271, neighborhood is currently averaging mid 500's.
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Hector
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Re: Tales from this insane real estate market

Post by Hector »

JAZZISCOOL wrote: Tue Mar 30, 2021 9:32 am CNN story 3/30/21:

"76 all-cash offers on one home. The housing madness shows no signs of slowing" - DC area.

https://www.cnn.com/2021/03/29/success/ ... index.html
Seems like there are a plenty of folks with a lot of $$ who are looking to buy. It does not look like housing market is going cool down for a while.
RVAhighway
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Re: Tales from this insane real estate market

Post by RVAhighway »

dogagility wrote: Tue Mar 30, 2021 9:37 am
JAZZISCOOL wrote: Tue Mar 30, 2021 9:32 am CNN story 3/30/21:

"76 all-cash offers on one home. The housing madness shows no signs of slowing" - DC area.

https://www.cnn.com/2021/03/29/success/ ... index.html
My realtor said 43 offers were made on a recently-listed "cheaper" house (300K asking price) - midwest suburbia.
We just missed (by a wide margin) on a house in Richmond VA. Listed at 450k, had 20 offers over the weekend and went 135k over ask. Oh and the current owners will be renting it back gratis for a few weeks after closing. This is the third one in a we've seen that has gone 100k+ over ask in the last couple weeks, one of which has a cracked foundation and no air conditioning. We're not totally ready to sit out but will be likely renewing our lease.
Like some others we're bummed that we had the means to buy something 18 months ago but timing wasn't right personally. Now rapidly being priced out of the neighborhoods that we love.
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changingtimes
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Re: Tales from this insane real estate market

Post by changingtimes »

I had been thinking about buying a second home in what would normally be considered a somewhat out of the way place--but clearly folks with money to burn have decided that "out of the way" works for them, and prices are getting absurd. I'm hoping that before long some of these people realize that a pandemic-impulse buy in that location was perhaps not advisable. In the meantime, I'll just spend time in what I'm sure will be the increasing number of VRBO and AirBnB listings in that area, and wait things out a bit.
likegarden
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Re: Tales from this insane real estate market

Post by likegarden »

Those changes in house prices happened before. My company moved me from upstate NY to North of Boston area in 1985. We bought a ranch there, 1800 sqft, for $150k. I spent $15k to fix things. 2 years later company moved us back to upstate NY and we sold for $250k.
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ASpenderInRecovery
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Re: Tales from this insane real estate market

Post by ASpenderInRecovery »

JAZZISCOOL wrote: Tue Mar 30, 2021 9:32 am CNN story 3/30/21:

"76 all-cash offers on one home. The housing madness shows no signs of slowing" - DC area.

https://www.cnn.com/2021/03/29/success/ ... index.html
Read that earlier and definitely thought it was interesting. WSJ had a similar article that just came out. We are apparently in a "super sellers' market" and that definitely aligns with my experience. Both articles end in saying home prices will continue to increase, but rising interest rates will slow some demand. I'm comfortable staying put and saving more money as this plays. Worst case I pay more in the future, but also have a larger downpayment to put down.

https://www.wsj.com/articles/u-s-home-p ... _lead_pos1

They attribute the red hot demand to:
- Mortgage rates dipping below 3%
- Millions of millennials are aging into their prime-homebuying years in their 30s
- New-home construction has lagged behind demand and homeowners are holding on to their houses longer
- Pandemic has turbocharged this demand. Many Americans sought homes with more space to work remotely during Covid-19, or felt freed to move farther from their offices.

Supply Constraints:
- low interest rates prompted people to refinance and stay put instead of moving
- others delayed their moves due to concerns about virus exposure
- new construction is limited by rising material costs and shortages of land and labor
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Beensabu
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Re: Tales from this insane real estate market

Post by Beensabu »

ASpenderInRecovery wrote: Tue Mar 30, 2021 6:54 pm - new construction is limited by rising material costs and shortages of land and labor
This. So much this. This is why housing is and will continue to be more and more expensive, for buyers and renters. This is why newly developed properties are high end. This is why consumption will go down. Then, one day, seemingly out of the blue, it will change. Because it has to. The eventual recalibration is necessary for the overall economy to continue to function.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Tamales
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Re: Tales from this insane real estate market

Post by Tamales »

ASpenderInRecovery wrote: Tue Mar 30, 2021 6:54 pm [...]
They attribute the red hot demand to:
...
- Millions of millennials are aging into their prime-homebuying years in their 30s
I don't get their comment on this point. "Millennials" is just a made-up grouping; the definitions of what birth year range it covers aren't even consistent.
Every year there are millions of people reaching prime home-buying age. Same for the next year, and the year after that. This just doesn't seem like a valid factor. Maybe I'm missing something.
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Beensabu
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Re: Tales from this insane real estate market

Post by Beensabu »

Tamales wrote: Tue Mar 30, 2021 9:42 pm
ASpenderInRecovery wrote: Tue Mar 30, 2021 6:54 pm [...]
They attribute the red hot demand to:
...
- Millions of millennials are aging into their prime-homebuying years in their 30s
I don't get their comment on this point. "Millennials" is just a made-up grouping; the definitions of what birth year range it covers aren't even consistent.
Every year there are millions of people reaching prime home-buying age. Same for the next year, and the year after that. This just doesn't seem like a valid factor. Maybe I'm missing something.
It's essentially the people in their 30s with money and the people in their 30s with their parents' money deciding they have to get in now. They've been watching prices rise for the last decade and think this is their last best chance. That's all.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
smatter
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Re: Tales from this insane real estate market

Post by smatter »

dru808 wrote: Wed Mar 24, 2021 9:41 pm
smatter wrote: Tue Mar 23, 2021 9:06 pm

We are seeing similar behavior in our neighborhood in Bethesda on the other side of the Potomac ocean.
Interesting, what country are you located?
You obviously don’t live in the DC area. :wink: :wink: :twisted:
slidecreek
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Re: Tales from this insane real estate market

Post by slidecreek »

Tamales wrote: Tue Mar 30, 2021 9:42 pm
ASpenderInRecovery wrote: Tue Mar 30, 2021 6:54 pm [...]
They attribute the red hot demand to:
...
- Millions of millennials are aging into their prime-homebuying years in their 30s
I don't get their comment on this point. "Millennials" is just a made-up grouping; the definitions of what birth year range it covers aren't even consistent.
Every year there are millions of people reaching prime home-buying age. Same for the next year, and the year after that. This just doesn't seem like a valid factor. Maybe I'm missing something.
As a group, millennials were likely impacted the most by the great recession and held off on buying homes until later than previous generations.
Bobby206
Posts: 617
Joined: Fri Oct 05, 2018 4:01 pm

Re: Tales from this insane real estate market

Post by Bobby206 »

vfinx wrote: Sun Mar 28, 2021 12:31 pm
unclescrooge wrote: Sun Mar 28, 2021 11:01 am
Beensabu wrote: Sat Mar 27, 2021 10:00 pm
sabhen wrote: Sat Mar 27, 2021 9:23 pm
by Cosmo » Sat Mar 27, 2021 4:07 pm

It’s hard to beat sight unseen offers 15 to 20% above ask. It makes sense to stay put. A big house will be a lot of work and money.
Not sure about that. Everyone seems to be leaving CA and moving to Texas and other more tax friendly states.
Everyone?

How do you explain then the current house price boom in CA?
That would be the people leaving and selling their houses to FOMO suckers who are going to end up in foreclosure in the next bust. At least, the non trust fundies are... Also renters. Renters leaving in droves. A lot of born and raised getting priced out of the roof over head situation if they're not part of a multi-generation household. Off to PNW, Texas, Nevada and Arizona mostly. For years now.
Obviously enough people are not leaving. Why else are there still dozens of offers on each property up to a million dollars in SoCal and all houses going into escrow within days of being listed.
The California exodus seems to be exaggerated by the media, and people that want to draw attention to problems in the state. There has always been a steady flow of people that arbitrage the greater wealth generation opportunities the state offers, and I haven't seen data to suggest a dramatic surge in that.

https://www.sfchronicle.com/bayarea/art ... 983559.php

I'm also skeptical of the narrative that a lot of people acted irrationally and moved out of state and purchased a house, without guidance from their companies, and will suddenly be forced to move back, triggering a massive real estate crash. Even in tech, most companies did not commit to a permanent remote work force (the media just hyped up the ones that did). The most common pattern I see in tech is a switch to a hybrid model where workers will be expected to be in the office 1-3 days a week, and in my network at least, everyone has planned on that. I know of a few people that are renting a place in a nice location during office closures, but they plan to return (and rent again) once they are called back.

I think there is some exaggeration in the California exodus. However, check how much it costs to rent a U-Haul from LA (or any other California city) to Nashville (or any other city in the southeast) and then check the exact opposite trip on the same day. It will probably cost FIVE TIMES as much to take the truck from California as to drive one west. Simple supply and demand! It tells me there is some net negative migration going on!
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