Tales from this insane real estate market [Home sales]

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vfinx
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Re: Tales from this insane real estate market

Post by vfinx »

Bobby206 wrote: Tue Mar 30, 2021 10:25 pm
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

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!
You are correct, but this has been true for several years. If you do a Google News search for u-haul prices and filter to older articles, you'll see that this multiple is not a new phenomenon. Example: https://fee.org/articles/u-haul-rates-s ... elerating/

So the question is whether there is truly a more recent Covid-specific surge (on top of the pre-existing trend) that is causing a housing bubble in other states. I won't claim to know the answer, but I haven't seen a convincing data-driven one. Just anecdotes both ways.
vested1
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Re: Tales from this insane real estate market

Post by vested1 »

vfinx wrote: Tue Mar 30, 2021 10:57 pm
Bobby206 wrote: Tue Mar 30, 2021 10:25 pm
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

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!
You are correct, but this has been true for several years. If you do a Google News search for u-haul prices and filter to older articles, you'll see that this multiple is not a new phenomenon. Example: https://fee.org/articles/u-haul-rates-s ... elerating/

So the question is whether there is truly a more recent Covid-specific surge (on top of the pre-existing trend) that is causing a housing bubble in other states. I won't claim to know the answer, but I haven't seen a convincing data-driven one. Just anecdotes both ways.
California has the third best retention rate for residents of all states, with only Texas and Michigan having a higher percentage of residents staying put. Outward migration decreased by 5.4% in 2020, which may have been partially affected by the pandemic.

https://www.ocregister.com/2020/11/17/w ... ince-2011/

This article mentions that the higher cost of rental trucks in California is due to supply and demand, with one of the main reasons being not enough inventory to meet the demand. There are almost 40 million residents in California after all. In my experience living there for 66 years it was necessary to reserve a truck long in advance to get one, even for a local move. There is also the fact that, on average, California residents can afford to pay more because of their higher average salaries.

https://www.businessinsider.com/uhaul-b ... 20Jalopnik.

For all the talk about residents fleeing California it is still a fact that during the last 170 years since statehood was established, the population of California has increased every year without fail.

https://calmatters.org/commentary/my-tu ... alifornia/
rage_phish
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Re: Tales from this insane real estate market

Post by rage_phish »

rage_phish wrote: Tue Mar 30, 2021 11:29 am 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!
Offer was accepted!
Tingting1013
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Re: Tales from this insane real estate market

Post by Tingting1013 »

rage_phish wrote: Wed Mar 31, 2021 9:13 am
rage_phish wrote: Tue Mar 30, 2021 11:29 am 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!
Offer was accepted!
How much over asking did you pay
rage_phish
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Re: Tales from this insane real estate market

Post by rage_phish »

Tingting1013 wrote: Wed Mar 31, 2021 9:15 am
rage_phish wrote: Wed Mar 31, 2021 9:13 am
rage_phish wrote: Tue Mar 30, 2021 11:29 am 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!
Offer was accepted!

How much over asking did you pay
$175,018 which barely got the job done
The house was listed low even relative to today over bidding
Last edited by rage_phish on Wed Mar 31, 2021 9:56 am, edited 1 time in total.
LittleMaggieMae
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Re: Tales from this insane real estate market

Post by LittleMaggieMae »

Just did a "wilf" around the real estate listings for my suburb. And as expected there are an astonishing amount of listings for houses in the 500K range - and then the majority in the 300 to 400K range.

What caught my attention was the number of apartment buildings 3 flats and 6 flats that were up for sale. The 3 flats (2 flats with 3b/1b and a garden appt with 2b/1b) all flats completely remodeled (new baths/kitchens/flooring) were in the low 300's. The 6 flats had the same remodels and were in the upper 300 to 450K range. the 6 flats are a mix of 2br/1b and 1b/1b apartments.

I'm more interested in the 3 flats... some of them were in "complicated" locations - busy street, with little to no space between each building, and a full city block of apartment buildings - so too many people and too many cars (not enough parking) in a small amount of city space. But, some of them are in less complicated areas - on a residential street with mostly houses on the block - which means the apartment building is on a bigger lot and there might only be 3 to 5 of the 3 flats on the block. Also these apartments tend to be bigger and built more elaborately (aka vintage).

Anyway... I have to admit I am tempted by the "vintage" residential 3 flats at 350K... I'd have nearly 6K in rental income every month.... with a mortgage (PITI) of about 4K. And the building has already been "updated".... it's tempting.

I offer this as an example of the "bubbliness" as what would appear to be income generating real estate is selling for less than Single Family Homes.
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TomatoTomahto
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Re: Tales from this insane real estate market

Post by TomatoTomahto »

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.
Many people don’t consider buying until they’re beginning a family. Having children is occurring later for many couples. I think that accounts for a lot of what they’re referring to with “millennials.”
I get the FI part but not the RE part of FIRE.
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JAZZISCOOL
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Re: Tales from this insane real estate market

Post by JAZZISCOOL »

I listened to a Goldman Sachs podcast where they said 2020 was a "hot" RE market with about 10% price appreciation. They expect 2021 to evolve to a "warm" RE market with price appreciation of 4-5%, FWIW. One data point.

The numbers I see on BH and in other articles suggest we're still seeing the "hot" market so far in 2021. :?
KlangFool
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Re: Tales from this insane real estate market

Post by KlangFool »

LittleMaggieMae wrote: Wed Mar 31, 2021 9:40 am Just did a "wilf" around the real estate listings for my suburb. And as expected there are an astonishing amount of listings for houses in the 500K range - and then the majority in the 300 to 400K range.

What caught my attention was the number of apartment buildings 3 flats and 6 flats that were up for sale. The 3 flats (2 flats with 3b/1b and a garden appt with 2b/1b) all flats completely remodeled (new baths/kitchens/flooring) were in the low 300's. The 6 flats had the same remodels and were in the upper 300 to 450K range. the 6 flats are a mix of 2br/1b and 1b/1b apartments.

I'm more interested in the 3 flats... some of them were in "complicated" locations - busy street, with little to no space between each building, and a full city block of apartment buildings - so too many people and too many cars (not enough parking) in a small amount of city space. But, some of them are in less complicated areas - on a residential street with mostly houses on the block - which means the apartment building is on a bigger lot and there might only be 3 to 5 of the 3 flats on the block. Also these apartments tend to be bigger and built more elaborately (aka vintage).

Anyway... I have to admit I am tempted by the "vintage" residential 3 flats at 350K... I'd have nearly 6K in rental income every month.... with a mortgage (PITI) of about 4K. And the building has already been "updated".... it's tempting.

I offer this as an example of the "bubbliness" as what would appear to be income generating real estate is selling for less than Single Family Homes.
LittleMaggieMae,

Just to confirm.

It is cheaper to buy than rent in this case. The PITI is 30% less than renting. Is the PITI based on 20% down payment and 30 years fixed rate mortgage?

KlangFool
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ResearchMed
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Re: Tales from this insane real estate market

Post by ResearchMed »

LittleMaggieMae wrote: Wed Mar 31, 2021 9:40 am Just did a "wilf" around the real estate listings for my suburb. And as expected there are an astonishing amount of listings for houses in the 500K range - and then the majority in the 300 to 400K range.

What caught my attention was the number of apartment buildings 3 flats and 6 flats that were up for sale. The 3 flats (2 flats with 3b/1b and a garden appt with 2b/1b) all flats completely remodeled (new baths/kitchens/flooring) were in the low 300's. The 6 flats had the same remodels and were in the upper 300 to 450K range. the 6 flats are a mix of 2br/1b and 1b/1b apartments.

I'm more interested in the 3 flats... some of them were in "complicated" locations - busy street, with little to no space between each building, and a full city block of apartment buildings - so too many people and too many cars (not enough parking) in a small amount of city space. But, some of them are in less complicated areas - on a residential street with mostly houses on the block - which means the apartment building is on a bigger lot and there might only be 3 to 5 of the 3 flats on the block. Also these apartments tend to be bigger and built more elaborately (aka vintage).

Anyway... I have to admit I am tempted by the "vintage" residential 3 flats at 350K... I'd have nearly 6K in rental income every month.... with a mortgage (PITI) of about 4K. And the building has already been "updated".... it's tempting.

I offer this as an example of the "bubbliness" as what would appear to be income generating real estate is selling for less than Single Family Homes.
Are some of these multi-units for sale b/c of the eviction ban, and owners can't recover? What does that suggest, if anything, about the future?

Note: I got my "start" ages ago by owner-occupying one of a 3-family. Best decision ever! :happy
But there was a huge need for nice rentals then, not a glut or some sort of eviction ban.

RM
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LittleMaggieMae
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Re: Tales from this insane real estate market

Post by LittleMaggieMae »

KlangFool wrote: Wed Mar 31, 2021 9:54 am
LittleMaggieMae wrote: Wed Mar 31, 2021 9:40 am

Anyway... I have to admit I am tempted by the "vintage" residential 3 flats at 350K... I'd have nearly 6K in rental income every month.... with a mortgage (PITI) of about 4K. And the building has already been "updated".... it's tempting.
LittleMaggieMae,

Just to confirm.

It is cheaper to buy than rent in this case. The PITI is 30% less than renting. Is the PITI based on 20% down payment and 30 years fixed rate mortgage?

KlangFool
Actually, it's cheaper to buy a 3 flat - live in the nicest unit and rent the other 2 units - than it is to buy a SFH in my neighborhood. You can buy a nice 3 flat with a side yard, yard, two car garage and 2 car pad on the alley and plenty of street parking on a residential street in a good school district for a cost LESS than one of the SFH's down the block. And the building doesn't need to be gutted/rehabbed. It needs some "elbow grease" maintenance and the units are ready to go. And if you live in the building and take the nicest unit and rent the other two flats - the mortgage will easily cover the mortgage PITI with some left over for "maintenance" costs. But, you are a landlord.

I would think this as a "wealth building" strategy would work quite well. I guess it takes the right kind of mind set/personality/risk level to take it on though.

I'm kind of tempted to buy one of these as an investment property. Unfortunately, I need another year to build up my "resources" before I buy another investment property.
KlangFool
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Re: Tales from this insane real estate market

Post by KlangFool »

LittleMaggieMae wrote: Wed Mar 31, 2021 10:12 am
KlangFool wrote: Wed Mar 31, 2021 9:54 am
LittleMaggieMae wrote: Wed Mar 31, 2021 9:40 am

Anyway... I have to admit I am tempted by the "vintage" residential 3 flats at 350K... I'd have nearly 6K in rental income every month.... with a mortgage (PITI) of about 4K. And the building has already been "updated".... it's tempting.
LittleMaggieMae,

Just to confirm.

It is cheaper to buy than rent in this case. The PITI is 30% less than renting. Is the PITI based on 20% down payment and 30 years fixed rate mortgage?

KlangFool
Actually, it's cheaper to buy a 3 flat - live in the nicest unit and rent the other 2 units - than it is to buy a SFH in my neighborhood. You can buy a nice 3 flat with a side yard, yard, two car garage and 2 car pad on the alley and plenty of street parking on a residential street in a good school district for a cost LESS than one of the SFH's down the block. And the building doesn't need to be gutted/rehabbed. It needs some "elbow grease" maintenance and the units are ready to go. And if you live in the building and take the nicest unit and rent the other two flats - the mortgage will easily cover the mortgage PITI with some left over for "maintenance" costs. But, you are a landlord.

I would think this as a "wealth building" strategy would work quite well. I guess it takes the right kind of mind set/personality/risk level to take it on though.

I'm kind of tempted to buy one of these as an investment property. Unfortunately, I need another year to build up my "resources" before I buy another investment property.
LittleMaggieMae,

Thanks. Very interesting!

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alfaspider
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Re: Tales from this insane real estate market

Post by alfaspider »

TomatoTomahto wrote: Wed Mar 31, 2021 9:48 am
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.
Many people don’t consider buying until they’re beginning a family. Having children is occurring later for many couples. I think that accounts for a lot of what they’re referring to with “millennials.”
If you look at the demographic numbers, there are numerically more Millenials (defined as folks currently in their late 20s to early 40s) than the Gen X generation (mid 40s to early 50s). They are the children of the Baby Boomers, who were also a numerically large generation (hence the name). So there really are more people in their 30s (prime home buying age) than there were 10 years ago.
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dogagility
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Re: Tales from this insane real estate market

Post by dogagility »

Beensabu wrote: Tue Mar 30, 2021 9:37 pm
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.
We signed a new construction house contract 5 weeks ago in FL. In the intervening time, the price of the same house has increased 7%.

The builder has also had to put a hold on signing new contracts because demand can't keep up with the available labor.
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LittleMaggieMae
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Re: Tales from this insane real estate market

Post by LittleMaggieMae »

ResearchMed wrote: Wed Mar 31, 2021 9:59 am
Are some of these multi-units for sale b/c of the eviction ban, and owners can't recover? What does that suggest, if anything, about the future?

Note: I got my "start" ages ago by owner-occupying one of a 3-family. Best decision ever! :happy
But there was a huge need for nice rentals then, not a glut or some sort of eviction ban.

RM
I dug a little deeper into 2 of the buildings in the "I would buy that!" category. Both were purchased 7 to 10 years ago for 100K and were 'rehabbed' and the units rented. (I'm guessing about 60K were put into the rehab - maybe less if the owners were contractors or had access to contracts - might have been more like 80K if the owners did DIY and hired out some work- those are my estimates from when I was running numbers if I bought one of these 10 years ago. Either way - a good deal.) I couldn't tell if they are owner occupied. Rents have gone up consistently in my area - I'm sure the buildings were cash flowing positive - even if owner occupied right from the beginning.

The two buildings are currently offered at 325K and 350K.

I don't think the eviction ban (not even sure if my suburb has one) is the issue. Rents have been pretty high here for the last 5 to 7 years.

It might just be the landlords wanting to get out of the landlord business. The buildings are both going to need some big ticket work - roof or boiler if that wasn't done 7 to 10 years ago. I'm guessing the units may be needing new appliances at this point. It may need some windows replaced/repaired (old double hungs replaced with "replacement windows" - it's common). If the building wasn't tuckpointed when purchased it's probably gonna need it (based on the age of the building). Not sure what state the garages are in. Any of the "fix ups" they didn't do when "rehabbed" are gonna need to get done probably after the sale. (I'm guessing there's still a drum trap or two on a drain in these buildings that's at the end of it's life). You get the idea. If the owner is looking to make the jump to SFH ownership - this might be the time to do it. I'm guessing they are sitting on some money. :)
PowderDay9
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Re: Tales from this insane real estate market

Post by PowderDay9 »

vested1 wrote: Wed Mar 31, 2021 2:53 am For all the talk about residents fleeing California it is still a fact that during the last 170 years since statehood was established, the population of California has increased every year without fail.

https://calmatters.org/commentary/my-tu ... alifornia/
According to this source, it decreased last year.

https://www.macrotrends.net/states/cali ... population

Regardless, it's clear that over the last decade the population growth in California is slowing and is much lower than other states like Nevada, Arizona, Texas, Florida and Washington.

https://www.macrotrends.net/states/nevada/population
https://www.macrotrends.net/states/arizona/population
https://www.macrotrends.net/states/texas/population
https://www.macrotrends.net/states/florida/population
https://www.macrotrends.net/states/wash ... population
Walkure
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Re: Tales from this insane real estate market

Post by Walkure »

Beensabu wrote: Sat Mar 27, 2021 11:13 pm
Cycle wrote: Sat Mar 27, 2021 10:23 pm Here is an example of a developer getting criticized for making money, when the effect is the housing unit cost in this neighborhood is reduced from $1M to $600k. The developer made money of course, but now a housing unit is within reach of people with budgets of $600k. People who buy this $600k unit are no longer competing for rentals with lower income people, so demand is alleviated a little at the lower income tier and that alleviates some pressure from the government sponsored affordable housing units.
Trickle down doesn't work for housing either. People who can afford a $600k condo/apartment were never competing for rentals with lower income people. They were competing for rentals with each other.
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.
I'm an architect. We don't do anything different for a so-called luxury apartment unit, maybe some extra common amenities. (Real luxury is different, it's called custom and we're hired by the tenant. Yes, some people will actually spend a small fortune on property they don't even own...) "Luxury" is just an adjective that the marketing people slap on it that really means "market rate." The fact is that most "affordable" housing actually costs more to build because taking public money means getting roped into prevailing wage tables and all the procurement hoops with the public finance agencies and local hiring requirements. The market rate developers take a portion of this savings and plow it back into bathroom fixtures and granite countertops (*ooh look, it's luxury!*) so they can lease at a higher price point, but there's nothing magical about the actual apartment. If a glut of apartments came on the market those prices would drop back down to earth in a heartbeat. It is simple supply and demand.
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Re: Tales from this insane real estate market

Post by drk »

Tamales wrote: Tue Mar 30, 2021 9:42 pm 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.
Are you familiar with the phrase "critical mass"? Between 2020 and 2024, the largest birth-years in American history turn 30. That's a natural glut of demand that amplifies all the other factors (elder Millennial FTHBs, lower supply, more aging-in-place).
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Hector
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Re: Tales from this insane real estate market

Post by Hector »

One positive point about this market is that we are not spending our energy in looking at houses.
jcricket73
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Re: Tales from this insane real estate market

Post by jcricket73 »

PowderDay9 wrote: Wed Mar 31, 2021 12:07 pm
vested1 wrote: Wed Mar 31, 2021 2:53 am For all the talk about residents fleeing California it is still a fact that during the last 170 years since statehood was established, the population of California has increased every year without fail.

https://calmatters.org/commentary/my-tu ... alifornia/
According to this source, it decreased last year.

https://www.macrotrends.net/states/cali ... population

Regardless, it's clear that over the last decade the population growth in California is slowing and is much lower than other states like Nevada, Arizona, Texas, Florida and Washington.

https://www.macrotrends.net/states/nevada/population
https://www.macrotrends.net/states/arizona/population
https://www.macrotrends.net/states/texas/population
https://www.macrotrends.net/states/florida/population
https://www.macrotrends.net/states/wash ... population
Cool graphs. Fun to play with the 10 and 20 year views. What's interesting from these graphs isn't just California (which at 40M people is still huge), but that Texas has seen a pretty consistent 15-year decline in YoY percentage growth. And in Arizona from 2000-2010 it was in the 2-3% range (retiring baby-boomers?), then it went quite a bit lower (financial crisis?), but has picked up from 1% to almost 2% (YoY) in the last decade (jobs/other reasons?).

To me the clear takeaway is that what you read in the public discourse about where people are moving, and why, are not supported by the data. State's growth patterns are caused by a complex mix based on where jobs are, changing interests from "new entrants to the work force", population trends (immigration, aging, generational shifts) and so on.

It's rarely a single factor that the "best places to live/retire/work" articles cite.
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Re: Tales from this insane real estate market

Post by White Coat Investor »

bogledogle wrote: Tue Mar 30, 2021 1:03 pm
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

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?
All over the place. IMHO it doesn't take much of a real estate deal to add benefit to a 2 fund portfolio that doesn't even diversify internationally. Heck, you could just add a little slice of the Vanguard REIT fund and add some benefit there in my opinion.
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
Jaylat
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Re: Tales from this insane real estate market

Post by Jaylat »

vested1 wrote: Wed Mar 31, 2021 2:53 am California has the third best retention rate for residents of all states, with only Texas and Michigan having a higher percentage of residents staying put. Outward migration decreased by 5.4% in 2020, which may have been partially affected by the pandemic.

https://www.ocregister.com/2020/11/17/w ... ince-2011/
One major reason why California's retention rate is so high is Prop 13, which keeps property taxes at extremely low levels for long term residents. As an example, our friends who bought 30 years ago in SF owe less than $1,500 a year in property taxes on a house worth over $1.5 million. Their older neighbors pay under $800 per year (!). You can never find a new house in the US with taxes that low, not to mention the tax hit of selling your house at over $1mm in profit. New-coming suckers like us pay ten times that amount.

Without Prop 13 the CA outflow would be much higher. In fact, it's amazing it's as high as it is given the strong tax disincentives.

Locally, we are seeing lots of Nor Cal residents buying here in North San Diego County. My neighbor put his place on the market at $1.6 million and it sold for $1.8 mil within a week. The new buyers I talked to cited high COL and poor quality of life in Silicon Valley.
Jeff P
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Re: Tales from this insane real estate market

Post by Jeff P »

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.
I bought a house in 2013 with a 2.75 interest rate and thought i’d never be able to move. I was pretty worried interest rate go up and we’d lose money on the house.

Got a dream job and sold the house. Probably came out more or less even after improvements.

Rented for a year foe the first time ever but didnt like uncertainty of rent increases or having to pay renters to move ($7000 quotes the first time) so bought last year at 2.85. Guess I can never move again.

Renting is probably more expensive for me than buying, especially once i start making improvements. But house is mine. I can do what i want with it. And my monthly payment is locked in until retirement where it will decrease to just taxes, which are also pretty locked since I am in California, whereas Rents are only going to go up.
iamblessed
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Re: $11,000 to $350,000 in real estate

Post by iamblessed »

Taylor Larimore wrote: Thu Mar 25, 2021 7:48 pm Bogleheads:

In the late 80's we put $11,000 down on an unbuilt condominium in Miami (Yacht Harbor) priced at $110,000. About 10 years later we sold our unit for $350,000. The identical unit next door sold for $250,000 three years later.

Lesson learned: Real Estate can be profitable -- and it can be risky.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "If I liked real estate and was capable of putting up with the risks or willing to put up with the risks of that securitization, I’d say invest in an index fund based on real estate and then you’re not taking any manager risk at all.”
Wonder what they sell for today?
stocknoob4111
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Re: Tales from this insane real estate market

Post by stocknoob4111 »

well, at least Dave Ramsey thinks we are definitely NOT in a bubble:

https://www.youtube.com/watch?v=r8B-Com5Z2k
Shalom Aleichem
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Re: Tales from this insane real estate market

Post by Shalom Aleichem »

jcricket73 wrote: Wed Mar 31, 2021 2:11 pm
PowderDay9 wrote: Wed Mar 31, 2021 12:07 pm
vested1 wrote: Wed Mar 31, 2021 2:53 am For all the talk about residents fleeing California it is still a fact that during the last 170 years since statehood was established, the population of California has increased every year without fail.

https://calmatters.org/commentary/my-tu ... alifornia/
According to this source, it decreased last year.

https://www.macrotrends.net/states/cali ... population

Regardless, it's clear that over the last decade the population growth in California is slowing and is much lower than other states like Nevada, Arizona, Texas, Florida and Washington.

https://www.macrotrends.net/states/nevada/population
https://www.macrotrends.net/states/arizona/population
https://www.macrotrends.net/states/texas/population
https://www.macrotrends.net/states/florida/population
https://www.macrotrends.net/states/wash ... population
Cool graphs. Fun to play with the 10 and 20 year views. What's interesting from these graphs isn't just California (which at 40M people is still huge), but that Texas has seen a pretty consistent 15-year decline in YoY percentage growth. And in Arizona from 2000-2010 it was in the 2-3% range (retiring baby-boomers?), then it went quite a bit lower (financial crisis?), but has picked up from 1% to almost 2% (YoY) in the last decade (jobs/other reasons?).

To me the clear takeaway is that what you read in the public discourse about where people are moving, and why, are not supported by the data. State's growth patterns are caused by a complex mix based on where jobs are, changing interests from "new entrants to the work force", population trends (immigration, aging, generational shifts) and so on.

It's rarely a single factor that the "best places to live/retire/work" articles cite.
I think there's a big difference though as to WHO is moving where. Are job creators moving in or out of CA? Texas? I don't know where to look it up but my gut tells me - as well as many discussions with regular folk - people with jobs and job creators are moving out of the high tax, no reward for high tax areas (CA, NY, NJ, IL) and moving to lower tax areas where the schools and streets are no worse and often better (TX, TN, FL).
jarjarM
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Re: Tales from this insane real estate market

Post by jarjarM »

Shalom Aleichem wrote: Fri Apr 02, 2021 9:03 pm
I think there's a big difference though as to WHO is moving where. Are job creators moving in or out of CA? Texas? I don't know where to look it up but my gut tells me - as well as many discussions with regular folk - people with jobs and job creators are moving out of the high tax, no reward for high tax areas (CA, NY, NJ, IL) and moving to lower tax areas where the schools and streets are no worse and often better (TX, TN, FL).
This is not very up to date but it shows that the outward migration from CA usually concentrated in the lower income sector and inward migration is in the higher income sector, which explains partially why the housing price around here is still so high. This is actually a concern as the service sector in CA is decimated because of these, one can get much better service at an IHOP in Texas than a Fairmont here in SJ downtown.

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LittleMaggieMae
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Re: Tales from this insane real estate market

Post by LittleMaggieMae »

I think there's a big difference though as to WHO is moving where. Are job creators moving in or out of CA? Texas? I don't know where to look it up but my gut tells me - as well as many discussions with regular folk - people with jobs and job creators are moving out of the high tax, no reward for high tax areas (CA, NY, NJ, IL) and moving to lower tax areas where the schools and streets are no worse and often better (TX, TN, FL).

The thing is - businesses can negotiate the "taxes" or the "benefits" they will receive - especially in the high tax areas mentioned.
That's pretty much what big businesses do - and even medium businesses. It doesn't really matter if a state is "high tax" or not. Not all businesses pay the same or get the same benefits in any given area.
guitarguy
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Re: Tales from this insane real estate market

Post by guitarguy »

This RE market is stressing me out...and I won’t be ready to move until 4-5 more years go by! Haha. Anyone else in that boat?

I just wonder...will the market ever come back down. Who’s to know?

We are in a small <1000 sqft house, in a terrific location. We have lived here 13 years and love basically everything about our spot. However, now with 1 toddler and another on the way, we know that in a few years we’re going to need more space. We have watched 3 consecutive neighbors move in, have 2 kids, and then move out. Haha.

Since we’ve moved in, the Greatschools ratings have declined in our school district. The elementary is still pretty good, but middle and high schools have really declined (down to 3-4). I know these ratings aren’t everything, but we are pretty confident that between that and our lack of space, we’ll be in the market to move in 3-4 years.

Really...we are hoping for a market tank so we can buy another house and keep this one...make it a rental. But the way things are now just has me stressed even thinking about it. We bought our house for $100k in 2009. It’s now worth $250k.

Buying a $400k house scares me...but that’s looking like what we’ll have to to spend to get what we want in the areas we want to live...at least the way things are now.

Anyone else hoping for a market tank? Haha.
KlangFool
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Re: Tales from this insane real estate market

Post by KlangFool »

guitarguy wrote: Fri Apr 02, 2021 9:46 pm
Really...we are hoping for a market tank so we can buy another house and keep this one...make it a rental. But the way things are now just has me stressed even thinking about it. We bought our house for $100k in 2009. It’s now worth $250k.

Buying a $400k house scares me...
guitarguy,

I don't get it. If you sell your 250K house, you should have plenty of money to rent a 400K house for quite a long time. Why do you have to buy a 400K house?

In my area,

A) Yes, the real estate is going up for the last few years.

B) But, it has only surpassed the 2004/2005 price level this year.

Please look at the longer (20 to 30 years) price history of the house in your area. It oscillates. You seen a rise because you bought in 2009. It was right after the GFC aka a crash.

Keep renting until it is worthwhile for you to buy.

KlangFool
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Ketawa
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Re: Tales from this insane real estate market

Post by Ketawa »

All real estate is local. It's clear from the posts in this thread and others that the consternation over home prices is concentrated in SFHs.

I am in DC and just bought a 2 bed/2 bath apartment in a 300+ unit co-op. I had been researching buildings in my neighborhood since July of 2020 and started the purchase process in January 2021. There were no appreciable changes in the price of the homes I looked at during that time period, otherwise I could have continued to rent. I knew which building I wanted to buy in and toured a few of the listed places including the one I liked the most.

For additional anecdotal evidence, a friend listed her 1 bed/1 bath condo she purchased new (developed/converted in an older building) about 12 months ago, and it was on the market for 4 months before she accepted an offer at her original purchase price.

The unit in the co-op where I wanted to purchase was on the market a little over a week and I submitted an offer 3% below asking. The sellers received another offer the same day, so the other bidder and I submitted escalation clauses. I based my escalation cap on similar units listed for sale in the same building; my cap was 2% over asking since I thought it was priced a little low. The seller accepted my offer at my cap, which was actually $1K less than the other bidder's cap, stating they appreciated my career. I also waived property inspection contingencies (not sure if other bidder did) and had 20% down with plenty of extra cash available in case of issues with the appraisal, vs 10% down for the other bidder.

Prices appear to be entirely reasonable for places in the city without outdoor space or in large buildings. When I run my purchase figures through a rent vs buy calculator, I get equivalent rent about 20% lower than what I could find on the rental market. Other units in the same building have sold with prices in the same ballpark as mine. I think it was an excellent time for me to buy.
guitarguy
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Re: Tales from this insane real estate market

Post by guitarguy »

KlangFool wrote: Fri Apr 02, 2021 11:03 pm
guitarguy wrote: Fri Apr 02, 2021 9:46 pm
Really...we are hoping for a market tank so we can buy another house and keep this one...make it a rental. But the way things are now just has me stressed even thinking about it. We bought our house for $100k in 2009. It’s now worth $250k.

Buying a $400k house scares me...
guitarguy,

I don't get it. If you sell your 250K house, you should have plenty of money to rent a 400K house for quite a long time. Why do you have to buy a 400K house?

In my area,

A) Yes, the real estate is going up for the last few years.

B) But, it has only surpassed the 2004/2005 price level this year.

Please look at the longer (20 to 30 years) price history of the house in your area. It oscillates. You seen a rise because you bought in 2009. It was right after the GFC aka a crash.

Keep renting until it is worthwhile for you to buy.

KlangFool
Yeah...I have thought of renting. We would be tough on a rental property with toddlers plus 2 dogs and a cat. I’m not even sure if someone would ever rent to our clan haha. Maybe there is a property and landlord out there...I don’t know. Haven’t looked because...we’re not looking.

We truly still LOVE our house and location. Having good friends (multiple) with kids the same age as ours (days apart) as neighbors is priceless. Despite the profit we’d see from selling now, we just have zero interest in leaving. Money isn’t everything. But even looking at it monetarily...the house was cheap and it still fits our needs. We have no intention of leaving until it doesn’t.

I know prices fluctuate. And I know we bought low...we were lucky. But I guess at the end of the day what I’m really hoping for is to see that luck continue with a slow down in the market in a few years when we’re ready to move. Fortunately that time isn’t right now in this crazy market. The whole thing is just so frustrating, even as an outsider/onlooker, just knowing that a move is coming for us at some point.
av111
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Re: Tales from this insane real estate market

Post by av111 »

guitarguy wrote: Fri Apr 02, 2021 9:46 pm I just wonder...will the market ever come back down.
While overall strength of the RE prices depends on the fed policy and general economic conditions but price variations (ups and downs) appear to be different in different areas. Prices in some local markets have not reached the pre GFC peak even now. In other areas they are 2.5 times that same peak. When recession hit last time, the prices dropped 80% in the first location and 25% in the other. You probably bought the dip.

But this change in price does not affect people who do not have to sell. Kind of like the variations in price of s&p do not affect people who don't sell the stocks

Generally people treat housing as a big ticket critical consumption item and buy/lease according to their needs, what they can afford and their general purchase patterns . Like a car maybe. For some people only the latest and greatest model will do and others are happy with 20 year old manual shift with dripping oil.
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RubyTuesday
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Re: Tales from this insane real estate market

Post by RubyTuesday »

Bobby206 wrote: Tue Mar 30, 2021 10:25 pm
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!
Interesting. This presents an opportunity for folks.

Someone build an app that allows folks from Nashville (St. Louis, Chicago, Austin, etc) to hook up with folks from San Fran (LA, San Diego, etc) and share a local U-Haul rental.

For example, NashvilleToSanFran person rents U-Haul in Nashville for 2 weeks and agrees to deliver it to SanFranToNashville person in San Fran in 1 week for 50% of the cost (maybe 60% since NashvilleToSanFran has more risk). NashvilleToSanFran Loads up, drives to San Fran, unloads and delivers U-Haul to SanFranToNashville. SanFranToNashville loads up, drives to Nashville, unloads and returns U-Haul.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
djsander2022
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Re: Tales from this insane real estate market

Post by djsander2022 »

We received a taste of the insane housing market by taking a recent trip to the area we are retiring to. We knew the housing prices had jumped and their was little inventory. We got there and toured two houses with our realtor. We bid on one and it was quite frustrating as the selling agent was slow on the responses. Even our agent was frustrated with the selling agent. We didn’t get the house which was ok with us. It was near the higher end of our range and after some thought smaller than we were looking for. We returned from our trip to re-evaluate our strategy and increase our budget. We will probably relocate to an apartment then search on a more regular basis. The low interest rates and FOMO by the buyers are really throwing everything out of wack. I think we can go to a little more expensive house and probably stand a better chance as the price range we were in seems to be the spot everybody wants to buy in the market we are looking at. We can also unload our house and move ensuring we have that capital ahead of our purchase although we didn’t need it for the purchase, but it will ease my wife’s worries. Strange times in the real estate market.
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orcycle
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Re: Tales from this insane real estate market

Post by orcycle »

A house in my neighborhood went on the market two weeks ago for $685,000. It's a dated ranch house (1,616 sf/0.18 acre lot) that I thought was supremely overpriced. The seller accepted an offer three days after listing it.

Yesterday I rode by it and noticed a dump trailer in the driveway, so I checked and saw that it closed two weeks after it listed and ten days after the offer was accepted. For $790,000!

Now I don't know the particulars of the sale, so maybe there are some offsets that distort the dollars/square-foot equation, but if this was a straightforward transaction, that's $488/sf. I have a rental property on the same street so I am watching in amazement. I have been wrong before on how much a home builder will pay to buy a teardown house and put up a monstrosity, they seem to buy ever smaller lots and build ever larger homes and still manage a profit. I don't know if that's the case for this particular house, or if it will be owner-occupied; I don't see the numbers working for a rental.

I think after this frothy period ends, there will be a fair amount of lawsuits from buyers who bought as-is, no inspection, sight unseen, etc., claiming hidden defects and improper disclosures/disclaimers from sellers. I just wish I was in a position to downsize now and relocate, but my timing is off by a few years.
jcricket73
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Re: Tales from this insane real estate market

Post by jcricket73 »

Shalom Aleichem wrote: Fri Apr 02, 2021 9:03 pm I think there's a big difference though as to WHO is moving where. Are job creators moving in or out of CA? Texas? I don't know where to look it up but my gut tells me - as well as many discussions with regular folk - people with jobs and job creators are moving out of the high tax, no reward for high tax areas (CA, NY, NJ, IL) and moving to lower tax areas where the schools and streets are no worse and often better (TX, TN, FL).
Not matching my evidence, nor flows or returns for venture capital dollars, which is one measure of where people anticipate job creation happening. VC investment still skews heavily to CA, NY, MA, with only TX being the "low tax" exception. Other states high on the list include WA. Or look at megacorp Amazon, who hates taxes. They picked Northern Virginia as their second headquarters and have expanded in Boston and New York.

And I've seen one study that showed the people most likely to be leaving CA for TX, are mid to low-earners. Perhaps it's just high profile Musk types who dominate the news. That kind of "below median wage can't afford it here anymore" outflow has its own consequences, not all of it good for the states they're leaving either.

Plenty to argue about, I'm sure, but I'm pretty sure your "no reward for high taxes" statement is a disputable, personal opinion, not a statement of fact.
stocknoob4111
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Re: Tales from this insane real estate market

Post by stocknoob4111 »

Say what you will but This TOTALLY reminds me of 2008, buyers now waiving contingencies....

https://www.youtube.com/watch?v=mZ6psQPOupE

Remember, in 2008 too people were saying that it is the new normal... especially Real Estate professionals would shrug and say it is what you have to do to compete. Well, this IS NOT normal, this is not how home buying is supposed to be. The truth is that the housing market has been massively dysfunctional since 2003.
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dogagility
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Re: Tales from this insane real estate market

Post by dogagility »

stocknoob4111 wrote: Sun Apr 04, 2021 3:19 pm Say what you will but This TOTALLY reminds me of 2008, buyers now waiving contingencies....

https://www.youtube.com/watch?v=mZ6psQPOupE

Remember, in 2008 too people were saying that it is the new normal... especially Real Estate professionals would shrug and say it is what you have to do to compete. Well, this IS NOT normal, this is not how home buying is supposed to be. The truth is that the housing market has been massively dysfunctional since 2003.
It's great feeling when you're a seller and the buyer pays over asking, pays all closing costs, is a cash buyer, and waives all contingencies. No complaints from me. :twisted:
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lazynovice
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Re: Tales from this insane real estate market

Post by lazynovice »

I haven’t seen this article shared yet

https://www.wsj.com/articles/if-you-sel ... 1617544801
Bobby206
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Re: Tales from this insane real estate market

Post by Bobby206 »

RubyTuesday wrote: Sat Apr 03, 2021 8:42 am
Bobby206 wrote: Tue Mar 30, 2021 10:25 pm
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!
Interesting. This presents an opportunity for folks.

Someone build an app that allows folks from Nashville (St. Louis, Chicago, Austin, etc) to hook up with folks from San Fran (LA, San Diego, etc) and share a local U-Haul rental.

For example, NashvilleToSanFran person rents U-Haul in Nashville for 2 weeks and agrees to deliver it to SanFranToNashville person in San Fran in 1 week for 50% of the cost (maybe 60% since NashvilleToSanFran has more risk). NashvilleToSanFran Loads up, drives to San Fran, unloads and delivers U-Haul to SanFranToNashville. SanFranToNashville loads up, drives to Nashville, unloads and returns U-Haul.
Great idea! I like it. I think the insurance issue could be a problem though!? I like the concept though!
Random Poster
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Re: Tales from this insane real estate market

Post by Random Poster »

Bobby206 wrote: Mon Apr 05, 2021 9:17 am
RubyTuesday wrote: Sat Apr 03, 2021 8:42 am Interesting. This presents an opportunity for folks.

Someone build an app that allows folks from Nashville (St. Louis, Chicago, Austin, etc) to hook up with folks from San Fran (LA, San Diego, etc) and share a local U-Haul rental.

For example, NashvilleToSanFran person rents U-Haul in Nashville for 2 weeks and agrees to deliver it to SanFranToNashville person in San Fran in 1 week for 50% of the cost (maybe 60% since NashvilleToSanFran has more risk). NashvilleToSanFran Loads up, drives to San Fran, unloads and delivers U-Haul to SanFranToNashville. SanFranToNashville loads up, drives to Nashville, unloads and returns U-Haul.
Great idea! I like it. I think the insurance issue could be a problem though!? I like the concept though!
Uhaul would likely see this as a local move, given that the truck is being picked up and delivered to the same location, so the rental would come with mileage limits that would be exceeded somewhere around Jackson, I’d suspect.

Or if local moves are on a pay-per-mile basis (I don’t remember how they are treated), that would get pricey quick.

As I recall, when I exceeded my mileage limit for an interstate move with Uhaul, the overage charge was something around 49 cents a mile. Not bad, but it adds up.
gubernaculum
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Re: Tales from this insane real estate market

Post by gubernaculum »

This has been a real estate market in the Bay Area for a number of years now. Welcome to the new reality!
Bobby206
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Re: Tales from this insane real estate market

Post by Bobby206 »

Random Poster wrote: Mon Apr 05, 2021 2:54 pm
Bobby206 wrote: Mon Apr 05, 2021 9:17 am
RubyTuesday wrote: Sat Apr 03, 2021 8:42 am Interesting. This presents an opportunity for folks.

Someone build an app that allows folks from Nashville (St. Louis, Chicago, Austin, etc) to hook up with folks from San Fran (LA, San Diego, etc) and share a local U-Haul rental.

For example, NashvilleToSanFran person rents U-Haul in Nashville for 2 weeks and agrees to deliver it to SanFranToNashville person in San Fran in 1 week for 50% of the cost (maybe 60% since NashvilleToSanFran has more risk). NashvilleToSanFran Loads up, drives to San Fran, unloads and delivers U-Haul to SanFranToNashville. SanFranToNashville loads up, drives to Nashville, unloads and returns U-Haul.
Great idea! I like it. I think the insurance issue could be a problem though!? I like the concept though!
Uhaul would likely see this as a local move, given that the truck is being picked up and delivered to the same location, so the rental would come with mileage limits that would be exceeded somewhere around Jackson, I’d suspect.

Or if local moves are on a pay-per-mile basis (I don’t remember how they are treated), that would get pricey quick.

As I recall, when I exceeded my mileage limit for an interstate move with Uhaul, the overage charge was something around 49 cents a mile. Not bad, but it adds up.
I am doing a "local" move for my move out of state in a few weeks. I already have the truck reserved in the other state. I'll drive one of our cars down there and drive the truck back to Cali to load it up. Even with the mileage charge and the gasoline I save a couple thousand bucks. The prices are 5 and 10 times more to rent in CA rather than the other way around. Check it out! It's comical really.
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Watty
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Re: Tales from this insane real estate market

Post by Watty »

Bobby206 wrote: Tue Apr 06, 2021 8:57 am I am doing a "local" move for my move out of state in a few weeks. I already have the truck reserved in the other state. I'll drive one of our cars down there and drive the truck back to Cali to load it up. Even with the mileage charge and the gasoline I save a couple thousand bucks. The prices are 5 and 10 times more to rent in CA rather than the other way around. Check it out! It's comical really.
Be sure to check the rental agreement to make sure that you are allowed to take it to California. I have seen rental car agreements where you were only allowed to take it to adjacent states.
Shalom Aleichem
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Re: Tales from this insane real estate market

Post by Shalom Aleichem »

jcricket73 wrote: Sat Apr 03, 2021 3:18 pm
Shalom Aleichem wrote: Fri Apr 02, 2021 9:03 pm I think there's a big difference though as to WHO is moving where. Are job creators moving in or out of CA? Texas? I don't know where to look it up but my gut tells me - as well as many discussions with regular folk - people with jobs and job creators are moving out of the high tax, no reward for high tax areas (CA, NY, NJ, IL) and moving to lower tax areas where the schools and streets are no worse and often better (TX, TN, FL).
Not matching my evidence, nor flows or returns for venture capital dollars, which is one measure of where people anticipate job creation happening. VC investment still skews heavily to CA, NY, MA, with only TX being the "low tax" exception. Other states high on the list include WA. Or look at megacorp Amazon, who hates taxes. They picked Northern Virginia as their second headquarters and have expanded in Boston and New York.

And I've seen one study that showed the people most likely to be leaving CA for TX, are mid to low-earners. Perhaps it's just high profile Musk types who dominate the news. That kind of "below median wage can't afford it here anymore" outflow has its own consequences, not all of it good for the states they're leaving either.

Plenty to argue about, I'm sure, but I'm pretty sure your "no reward for high taxes" statement is a disputable, personal opinion, not a statement of fact.
I doubt either of us can find good data. My gut of course tells me that job creation - I don't mean small VC startups, I mean large numbers of jobs - are moving from high tax to low tax states. I don't know what metric would be a good measure but the U-haul index (or whatever you want to call it) of people moving out of CA to TX seems not unreasonable...

https://www.kxan.com/news/local/austin/ ... n-reverse/
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unclescrooge
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Re: Tales from this insane real estate market

Post by unclescrooge »

Shalom Aleichem wrote: Thu Apr 08, 2021 7:54 pm
jcricket73 wrote: Sat Apr 03, 2021 3:18 pm
Shalom Aleichem wrote: Fri Apr 02, 2021 9:03 pm I think there's a big difference though as to WHO is moving where. Are job creators moving in or out of CA? Texas? I don't know where to look it up but my gut tells me - as well as many discussions with regular folk - people with jobs and job creators are moving out of the high tax, no reward for high tax areas (CA, NY, NJ, IL) and moving to lower tax areas where the schools and streets are no worse and often better (TX, TN, FL).
Not matching my evidence, nor flows or returns for venture capital dollars, which is one measure of where people anticipate job creation happening. VC investment still skews heavily to CA, NY, MA, with only TX being the "low tax" exception. Other states high on the list include WA. Or look at megacorp Amazon, who hates taxes. They picked Northern Virginia as their second headquarters and have expanded in Boston and New York.

And I've seen one study that showed the people most likely to be leaving CA for TX, are mid to low-earners. Perhaps it's just high profile Musk types who dominate the news. That kind of "below median wage can't afford it here anymore" outflow has its own consequences, not all of it good for the states they're leaving either.

Plenty to argue about, I'm sure, but I'm pretty sure your "no reward for high taxes" statement is a disputable, personal opinion, not a statement of fact.
I doubt either of us can find good data. My gut of course tells me that job creation - I don't mean small VC startups, I mean large numbers of jobs - are moving from high tax to low tax states. I don't know what metric would be a good measure but the U-haul index (or whatever you want to call it) of people moving out of CA to TX seems not unreasonable...

https://www.kxan.com/news/local/austin/ ... n-reverse/
I don't recall where I saw it, but out of a population of $39 million, a mere couple hundred thousand moved out of California last year.

I'm guessing most of these were low income earners. Although I personally know three high-income earners who moved out to different states last year - UT, OR and TX.

One you have a foot hold in the CA housing market, it's harder to move out.
drk
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Re: Tales from this insane real estate market

Post by drk »

For those interested, a pair of worthwhile blog posts on why this isn't a housing bubble:
  1. Calculated Risk: Is there a new housing bubble? ("From a historical perspective, house prices are high. But lending standards have been solid, and we haven't seen significant speculation - so I wouldn't call this a bubble.")
  2. Ben Carlson: Why This is Not Another Housing Bubble
They're not housing perma-bulls or boosters. Bill McBride labeled the housing bubble back in early 2005.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
rage_phish
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Re: Tales from this insane real estate market

Post by rage_phish »

Bought out house for $580k 6 years ago

Listed it last week for $800k

After 5 days we had 14 offers and accepted one for $935k

Very happy with the outcome :)
Normchad
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Joined: Thu Mar 03, 2011 6:20 am

Re: Tales from this insane real estate market

Post by Normchad »

rage_phish wrote: Fri Apr 09, 2021 8:12 pm Bought out house for $580k 6 years ago

Listed it last week for $800k

After 5 days we had 14 offers and accepted one for $935k

Very happy with the outcome :)
That’s amazing. Congratulations!
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