Tales from this insane real estate market [Home sales]
Re: Tales from this insane real estate market [Home sales]
I’m hoping to sell my previous condo quickly. It will go on the market late next week. Fresh paint and carpeting. It should look good. Am hoping it sells in a couple of weeks. Pricing is fair according to comps.
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Re: Tales from this insane real estate market [Home sales]
Reporting from peninsula Bay area.
1) Almost 25-30% of condos and townhomes lowered price this week after 2 weeks on market. That is a substantial numbers in my view. SFH are holding the price.
2) If the house is fully upgraded(these are CA homes from 1950-1970) they will go into contract in 2 weeks. If not they linger.
3) Foot traffic drops and some panic sellers if they did not see an offer in the past few weeks.
Overall sales so far has been in the range. There are no crazy 250k over asking like before but sticking to average prices rather than outlier jumps.
Calculatedrisk posted today morning:
https://twitter.com/calculatedrisk/stat ... Hs3u8qAAAA
Inventory in Denver : Up 412% since Jan 2022.
1) Almost 25-30% of condos and townhomes lowered price this week after 2 weeks on market. That is a substantial numbers in my view. SFH are holding the price.
2) If the house is fully upgraded(these are CA homes from 1950-1970) they will go into contract in 2 weeks. If not they linger.
3) Foot traffic drops and some panic sellers if they did not see an offer in the past few weeks.
Overall sales so far has been in the range. There are no crazy 250k over asking like before but sticking to average prices rather than outlier jumps.
Calculatedrisk posted today morning:
https://twitter.com/calculatedrisk/stat ... Hs3u8qAAAA
Inventory in Denver : Up 412% since Jan 2022.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939
Re: Tales from this insane real estate market [Home sales]
Thanks !
I will be happy to get the listed price and ecstatic if it goes over.
Re: Tales from this insane real estate market [Home sales]
I just did some random calculation for monthly payment.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
Re: Tales from this insane real estate market [Home sales]
True, but one must remember how historically low sub-4% rates really were. Even today's 5.5 percent isn't that high.newyorker wrote: ↑Wed Jul 06, 2022 9:20 pm I just did some random calculation for monthly payment.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
But I get your point that historically low interest rates were an important factor in price escalation.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson
Re: Tales from this insane real estate market [Home sales]
Yes, very important to lock in as many mortages as possible back in 2020 and 2021.deanbrew wrote: ↑Wed Jul 06, 2022 9:36 pmTrue, but one must remember how historically low sub-4% rates really were. Even today's 5.5 percent isn't that high.newyorker wrote: ↑Wed Jul 06, 2022 9:20 pm I just did some random calculation for monthly payment.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
But I get your point that historically low interest rates were an important factor in price escalation.
Re: Tales from this insane real estate market [Home sales]
We've been in the market to purchase a home since late 2020. We had submitted offers on 7 homes in a VHCOL area with limited inventory and got outbid by mostly cash offers, all over asking. After all of this, DH and I felt defeated and was going to pause our home search but miraculously, we were given the opportunity to purchase an off-market property from a friend of a friend. We saw the home, liked it and submitted an offer. We even got the house inspected and was able to negotiate a price cut for a few things that needed to be fixed. We're still in escrow but everything looks good so far. The other harrowing part was locking in the interest rate the week of the Fed's meeting in June. We locked in at 5.5%, which seems high compared to the last two years but it doesn't look too bad historically. I think if we weren't presented with the off-market opportunity, we may be sitting on the sidelines for a couple more years before being able to purchase anything.
“Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.” - Kenneth Boulding
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Re: Tales from this insane real estate market [Home sales]
Congrats ! I hope your purchase goes through for you.
as you mention -- historically -- 5.5% isn't horrible. and if you're so fortunate -- perhaps in a couple years rates will drop and you can re-cast / refi.
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as you mention -- historically -- 5.5% isn't horrible. and if you're so fortunate -- perhaps in a couple years rates will drop and you can re-cast / refi.
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Re: Tales from this insane real estate market [Home sales]
Everyday, I get an email or two from Redfin about price decrease.
Re: Tales from this insane real estate market
Well, they're both pending.pasadena wrote: ↑Thu Jun 16, 2022 12:16 pm I live in a nice neighborhood made up of townhomes, built in the 80's. A couple of weeks ago, one went up for sale at $800k for 760sqf (2bd, 1bath). This was apparently roughly in line with the infamous Zestimate, but also the craziest price I've seen here. My reaction: .
Well yesterday another one went up. 1320sqf, 2 bedrooms, 3 baths (Probably really 2 bathrooms and one toilet). For sale at $768k.
Still high, but not nearly as eye popping as the first one. So the first one reduced the price by $70k today. I'm expecting it to be further reduced in the coming weeks. Both homes have been recently renovated with similar finish quality. Same number of shared walls.
Sellers are still riding on the euphoria wave, but it seems that they're getting a reality check these days.
- #1 for $730k = $961 per sqf. Took about a month and a $70k price reduction.
- #2 for $781k = $582 per sqf. Took about a week, no price reduction.
OK so the first one is probably more modern with hardwood floors all over (no carpet) and repainted kitchen cabinets. Overall same quality (I've visited both during open house). I don't understand the difference in $/sqf, that's absolutely crazy to me. There's a HUGE difference in habitability between 760sqf and 1,320sqf for the same number of bedrooms and two floors.
Last edited by pasadena on Fri Jul 08, 2022 6:17 am, edited 1 time in total.
Re: Tales from this insane real estate market
Crazy.pasadena wrote: ↑Thu Jul 07, 2022 9:16 pmWell, they're both pending.pasadena wrote: ↑Thu Jun 16, 2022 12:16 pm I live in a nice neighborhood made up of townhomes, built in the 80's. A couple of weeks ago, one went up for sale at $800k for 760sqf (2bd, 1bath). This was apparently roughly in line with the infamous Zestimate, but also the craziest price I've seen here. My reaction: .
Well yesterday another one went up. 1320sqf, 2 bedrooms, 3 baths (Probably really 2 bathrooms and one toilet). For sale at $768k.
Still high, but not nearly as eye popping as the first one. So the first one reduced the price by $70k today. I'm expecting it to be further reduced in the coming weeks. Both homes have been recently renovated with similar finish quality. Same number of shared walls.
Sellers are still riding on the euphoria wave, but it seems that they're getting a reality check these days.
- #1 for $730k = $961 per sqf. Took about a month and a $7ok price reduction.
- #2 for $781k = $582 per sqf. Took about a week, no price reduction.
OK so the first one is probably more modern with hardwood floors all over (no carpet) and repainted kitchen cabinets. Overall same quality (I've visited both during open house). I don't understand the difference in $/sqf, that's absolutely crazy to me. There's a HUGE difference in habitability between 760sqf and 1,320sqf for the same number of bedrooms and two floors.
It is hard to believe that $51K is the dealbreaker on a house, but
that is probably the difference between approved for the mortgage and not.
That and that they need another $10K in down payment if they want to avoid PMI.
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Re: Tales from this insane real estate market [Home sales]
If you are paying cash, yes wait. If you are going to get a mortgage, your guess is as good as mine. No idea if price drop will negate rate hike.Marseille07 wrote: ↑Thu Jul 07, 2022 9:42 pmShould I wait till the Fed's done hiking? I have some flexibility to make a move this year or 2023 or even 2024.
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Re: Tales from this insane real estate market [Home sales]
Yes, cash. I need to save up a bit to reduce the amount of equities I have to sell, so waiting is not an issue.
Re: Tales from this insane real estate market [Home sales]
No brainer then.Marseille07 wrote: ↑Thu Jul 07, 2022 10:44 pmYes, cash. I need to save up a bit to reduce the amount of equities I have to sell, so waiting is not an issue.
Re: Tales from this insane real estate market
I know right? Or maybe they really, really didn't want to have to rip out the carpet and paint the kitchen cabinets lol.Nyc10036 wrote: ↑Thu Jul 07, 2022 9:38 pmCrazy.pasadena wrote: ↑Thu Jul 07, 2022 9:16 pmWell, they're both pending.pasadena wrote: ↑Thu Jun 16, 2022 12:16 pm I live in a nice neighborhood made up of townhomes, built in the 80's. A couple of weeks ago, one went up for sale at $800k for 760sqf (2bd, 1bath). This was apparently roughly in line with the infamous Zestimate, but also the craziest price I've seen here. My reaction: .
Well yesterday another one went up. 1320sqf, 2 bedrooms, 3 baths (Probably really 2 bathrooms and one toilet). For sale at $768k.
Still high, but not nearly as eye popping as the first one. So the first one reduced the price by $70k today. I'm expecting it to be further reduced in the coming weeks. Both homes have been recently renovated with similar finish quality. Same number of shared walls.
Sellers are still riding on the euphoria wave, but it seems that they're getting a reality check these days.
- #1 for $730k = $961 per sqf. Took about a month and a $7ok price reduction.
- #2 for $781k = $582 per sqf. Took about a week, no price reduction.
OK so the first one is probably more modern with hardwood floors all over (no carpet) and repainted kitchen cabinets. Overall same quality (I've visited both during open house). I don't understand the difference in $/sqf, that's absolutely crazy to me. There's a HUGE difference in habitability between 760sqf and 1,320sqf for the same number of bedrooms and two floors.
It is hard to believe that $51K is the dealbreaker on a house, but
that is probably the difference between approved for the mortgage and not.
That and that they need another $10K in down payment if they want to avoid PMI.
I'll keep checking to see what they both end up selling for. Apart from the interior renovations, general orientation of the houses and floor plan due to the difference in size, they're the same. All the houses in my neighborhood are the same.
Maybe the bigger one had something I didn't see that justifies the lower $/sqf but I doubt it.
Re: Tales from this insane real estate market [Home sales]
It depends where you're planning to buy. Different markets are going to react very differently over the next couple of years.Marseille07 wrote: ↑Thu Jul 07, 2022 9:42 pm Should I wait till the Fed's done hiking? I have some flexibility to make a move this year or 2023 or even 2024.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Tales from this insane real estate market [Home sales]
A Seattle townhouse builder put out a clearance sign:
This Listings with Price Reductions search on Redfin actually produces some results in the central neighborhoods, with a lot of houses down south and up north. Inventory still isn't back to normal levels, but it's definitely increasing.Isola Homes wrote: We're happy to announce that you can now take advantage of a 4% seller concession on all of our available homes!
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Tales from this insane real estate market
I am househunting now.pasadena wrote: ↑Fri Jul 08, 2022 6:22 amI know right? Or maybe they really, really didn't want to have to rip out the carpet and paint the kitchen cabinets lol.Nyc10036 wrote: ↑Thu Jul 07, 2022 9:38 pmCrazy.pasadena wrote: ↑Thu Jul 07, 2022 9:16 pmWell, they're both pending.pasadena wrote: ↑Thu Jun 16, 2022 12:16 pm I live in a nice neighborhood made up of townhomes, built in the 80's. A couple of weeks ago, one went up for sale at $800k for 760sqf (2bd, 1bath). This was apparently roughly in line with the infamous Zestimate, but also the craziest price I've seen here. My reaction: .
Well yesterday another one went up. 1320sqf, 2 bedrooms, 3 baths (Probably really 2 bathrooms and one toilet). For sale at $768k.
Still high, but not nearly as eye popping as the first one. So the first one reduced the price by $70k today. I'm expecting it to be further reduced in the coming weeks. Both homes have been recently renovated with similar finish quality. Same number of shared walls.
Sellers are still riding on the euphoria wave, but it seems that they're getting a reality check these days.
- #1 for $730k = $961 per sqf. Took about a month and a $7ok price reduction.
- #2 for $781k = $582 per sqf. Took about a week, no price reduction.
OK so the first one is probably more modern with hardwood floors all over (no carpet) and repainted kitchen cabinets. Overall same quality (I've visited both during open house). I don't understand the difference in $/sqf, that's absolutely crazy to me. There's a HUGE difference in habitability between 760sqf and 1,320sqf for the same number of bedrooms and two floors.
It is hard to believe that $51K is the dealbreaker on a house, but
that is probably the difference between approved for the mortgage and not.
That and that they need another $10K in down payment if they want to avoid PMI.
I'll keep checking to see what they both end up selling for. Apart from the interior renovations, general orientation of the houses and floor plan due to the difference in size, they're the same. All the houses in my neighborhood are the same.
Maybe the bigger one had something I didn't see that justifies the lower $/sqf but I doubt it.
Ripping out old carpet and having new one installed would be low on my list of difficulty.
I wouldn't even considered it to be a negative when evaluating.
However, hardwood floors are the "in" thing.
I helped my mom paint her kitchen cabinets when she sold her house.
It was very tedious. We re-sanded the wood by hand.
Thankfully it was a very small kitchen.
The buyer of the smaller house will find that selling a 1 bedroom vs a 2 bedroom is a big deal even if it wasn't for them when buying.
Re: Tales from this insane real estate market
The smaller house is also a 2-bedrooms, although they're both very small. It has one bathroom when the bigger house has 2.Nyc10036 wrote: ↑Fri Jul 08, 2022 9:35 amI am househunting now.pasadena wrote: ↑Fri Jul 08, 2022 6:22 amI know right? Or maybe they really, really didn't want to have to rip out the carpet and paint the kitchen cabinets lol.Nyc10036 wrote: ↑Thu Jul 07, 2022 9:38 pmCrazy.pasadena wrote: ↑Thu Jul 07, 2022 9:16 pmWell, they're both pending.pasadena wrote: ↑Thu Jun 16, 2022 12:16 pm I live in a nice neighborhood made up of townhomes, built in the 80's. A couple of weeks ago, one went up for sale at $800k for 760sqf (2bd, 1bath). This was apparently roughly in line with the infamous Zestimate, but also the craziest price I've seen here. My reaction: .
Well yesterday another one went up. 1320sqf, 2 bedrooms, 3 baths (Probably really 2 bathrooms and one toilet). For sale at $768k.
Still high, but not nearly as eye popping as the first one. So the first one reduced the price by $70k today. I'm expecting it to be further reduced in the coming weeks. Both homes have been recently renovated with similar finish quality. Same number of shared walls.
Sellers are still riding on the euphoria wave, but it seems that they're getting a reality check these days.
- #1 for $730k = $961 per sqf. Took about a month and a $7ok price reduction.
- #2 for $781k = $582 per sqf. Took about a week, no price reduction.
OK so the first one is probably more modern with hardwood floors all over (no carpet) and repainted kitchen cabinets. Overall same quality (I've visited both during open house). I don't understand the difference in $/sqf, that's absolutely crazy to me. There's a HUGE difference in habitability between 760sqf and 1,320sqf for the same number of bedrooms and two floors.
It is hard to believe that $51K is the dealbreaker on a house, but
that is probably the difference between approved for the mortgage and not.
That and that they need another $10K in down payment if they want to avoid PMI.
I'll keep checking to see what they both end up selling for. Apart from the interior renovations, general orientation of the houses and floor plan due to the difference in size, they're the same. All the houses in my neighborhood are the same.
Maybe the bigger one had something I didn't see that justifies the lower $/sqf but I doubt it.
Ripping out old carpet and having new one installed would be low on my list of difficulty.
I wouldn't even considered it to be a negative when evaluating.
However, hardwood floors are the "in" thing.
I helped my mom paint her kitchen cabinets when she sold her house.
It was very tedious. We re-sanded the wood by hand.
Thankfully it was a very small kitchen.
The buyer of the smaller house will find that selling a 1 bedroom vs a 2 bedroom is a big deal even if it wasn't for them when buying.
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Re: Tales from this insane real estate market [Home sales]
This is an awesome post. Just goes to show you that "Staying the Course" in your home search paid off. In an insane market, whether being a house, car, or TV there is no need to pay over inflated pricing. With patience, all markets will course correct to the mean given time. While 5.5% would appear high to most, our recent low rates were an anomaly and would not last. Again, reversion to the mean. 5.5% is still historically not a bad rate. My first house was 10% that I refinanced to 6.5% and I was ecstatic! Congratulations and have a long happy life in your new home. Be sure to provide an update after the closing.MrsRoos wrote: ↑Thu Jul 07, 2022 2:47 pm We've been in the market to purchase a home since late 2020. We had submitted offers on 7 homes in a VHCOL area with limited inventory and got outbid by mostly cash offers, all over asking. After all of this, DH and I felt defeated and was going to pause our home search but miraculously, we were given the opportunity to purchase an off-market property from a friend of a friend. We saw the home, liked it and submitted an offer. We even got the house inspected and was able to negotiate a price cut for a few things that needed to be fixed. We're still in escrow but everything looks good so far. The other harrowing part was locking in the interest rate the week of the Fed's meeting in June. We locked in at 5.5%, which seems high compared to the last two years but it doesn't look too bad historically. I think if we weren't presented with the off-market opportunity, we may be sitting on the sidelines for a couple more years before being able to purchase anything.
It is not about how much you make; it is about how much you keep and how well you invest it. - Author Unknown |
Dream as if you’ll live forever. Live as if you’ll die today. - Author James Dean
Re: Tales from this insane real estate market [Home sales]
Sold our 3x2 single story, 1372 sq ft 50 year old ranch in 2019 and moved to the east coast. Our agent wanted to list it for 645k but I insisted that we list it for 665K. It sold immediately for 675K. The listing was 10% above comps. We lived there for 25 years.
The house just went back on the market of 969k almost exactly 3 years after we sold it. That's down 30k from the top of it's highest estimate on Zillow a couple of months ago. People are insane to pay those prices.
If we would have stayed in the house and sold it for the current asking price we would have owed around 40k in capital gains taxes, rather than having no taxes due with the the 500k exemption per couple.
The house just went back on the market of 969k almost exactly 3 years after we sold it. That's down 30k from the top of it's highest estimate on Zillow a couple of months ago. People are insane to pay those prices.
If we would have stayed in the house and sold it for the current asking price we would have owed around 40k in capital gains taxes, rather than having no taxes due with the the 500k exemption per couple.
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Re: Tales from this insane real estate market [Home sales]
Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
"I do not think myself equal to the Command I am honored with." -George Washington (excerpt from Journals of the Continental Congress, 16 June 1775)
Re: Tales from this insane real estate market [Home sales]
4.5x in one year is insane.FoundingFather wrote: ↑Sat Jul 09, 2022 12:27 pm Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
Real estate, where even the most mediocre can become wealthy.
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Re: Tales from this insane real estate market [Home sales]
Wow!FoundingFather wrote: ↑Sat Jul 09, 2022 12:27 pm Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
Think of the taxes!
Every day I can hike is a good day.
Re: Tales from this insane real estate market [Home sales]
Take the money and run!FoundingFather wrote: ↑Sat Jul 09, 2022 12:27 pm Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
This is a real estate jackpot
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Re: Tales from this insane real estate market [Home sales]
That is what I told them - especially since, at their age most of their investments will become a part of my future "What should I do with this windfall?" post.newyorker wrote: ↑Sat Jul 09, 2022 7:18 pmTake the money and run!FoundingFather wrote: ↑Sat Jul 09, 2022 12:27 pm Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
This is a real estate jackpot
Unfortunately, I fear that my father is going to let the tax tail wag the dog on this one - we'll see.
Founding Father
"I do not think myself equal to the Command I am honored with." -George Washington (excerpt from Journals of the Continental Congress, 16 June 1775)
Re: Tales from this insane real estate market [Home sales]
FoundingFather wrote: ↑Sat Jul 09, 2022 8:55 pmThat is what I told them - especially since, at their age most of their investments will become a part of my future "What should I do with this windfall?" post.newyorker wrote: ↑Sat Jul 09, 2022 7:18 pmTake the money and run!FoundingFather wrote: ↑Sat Jul 09, 2022 12:27 pm Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
This is a real estate jackpot
Unfortunately, I fear that my father is going to let the tax tail wag the dog on this one - we'll see.
Founding Father
Mind asking where in MT this is?
Even 3 years ago, MT was just a flyover country but now everyone is moving there!
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Re: Tales from this insane real estate market [Home sales]
Far western part of the state, just west of Glacier, in the Kalispell-Whitefish corridor. My parents picked it because it was a bit more 'sleepy ski town' than some of the better know places in which the billionaires have pushed out the millionaires.
For better or worse, it looks like the big money is moving in there too.
Founding Father
"I do not think myself equal to the Command I am honored with." -George Washington (excerpt from Journals of the Continental Congress, 16 June 1775)
Re: Tales from this insane real estate market [Home sales]
Congratulations on an awesome investment!FoundingFather wrote: ↑Sat Jul 09, 2022 10:37 pmFar western part of the state, just west of Glacier, in the Kalispell-Whitefish corridor. My parents picked it because it was a bit more 'sleepy ski town' than some of the better know places in which the billionaires have pushed out the millionaires.
For better or worse, it looks like the big money is moving in there too.
Founding Father
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Re: Tales from this insane real estate market [Home sales]
Just got back from the Flathead Valley. It rained 10 days straight. Last winter we were there 10 days over Christmas and never saw the sun once. No thanks. My inlaws live on Eagle Bend golf course in Bigfork with a sweet lake view and their house was 447k to build in 2007 is now worth over 3.5m. I don't get the draw to that area but hey it is historically nice in the summer for about 12 weeks. At least Bozeman gets some sun!FoundingFather wrote: ↑Sat Jul 09, 2022 10:37 pmFar western part of the state, just west of Glacier, in the Kalispell-Whitefish corridor. My parents picked it because it was a bit more 'sleepy ski town' than some of the better know places in which the billionaires have pushed out the millionaires.
For better or worse, it looks like the big money is moving in there too.
Founding Father
Re: Tales from this insane real estate market [Home sales]
My guess is Aspen just got to "Bougie" for your buyer. Totally relatable...newyorker wrote: ↑Sat Jul 09, 2022 10:57 pmCongratulations on an awesome investment!FoundingFather wrote: ↑Sat Jul 09, 2022 10:37 pmFar western part of the state, just west of Glacier, in the Kalispell-Whitefish corridor. My parents picked it because it was a bit more 'sleepy ski town' than some of the better know places in which the billionaires have pushed out the millionaires.
For better or worse, it looks like the big money is moving in there too.
Founding Father
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Re: Tales from this insane real estate market [Home sales]
incredible. good for them !! as they always say -- something's worth what another person is willing to pay for it ...newyorker wrote: ↑Sat Jul 09, 2022 7:18 pmTake the money and run!FoundingFather wrote: ↑Sat Jul 09, 2022 12:27 pm Just a quick reminder that insanity continues to abound in some markets.
My parents own a townhouse in a ski resort town in Montana. They purchased it one year ago for $665,000 and have done nothing to the place (it was recently built and is in good condition). Six month ago they were approached and offered $1.7 million. This last week they were approached by a buyer through a realtor and offered $2.9 million. They are planning to sell.
Founding Father
This is a real estate jackpot
Re: Tales from this insane real estate market [Home sales]
I think I would've tried hard to line up an assumable mortgage if I was a buyer in the last few years.newyorker wrote: ↑Wed Jul 06, 2022 10:01 pmYes, very important to lock in as many mortages as possible back in 2020 and 2021.deanbrew wrote: ↑Wed Jul 06, 2022 9:36 pmTrue, but one must remember how historically low sub-4% rates really were. Even today's 5.5 percent isn't that high.newyorker wrote: ↑Wed Jul 06, 2022 9:20 pm I just did some random calculation for monthly payment.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
But I get your point that historically low interest rates were an important factor in price escalation.
Re: Tales from this insane real estate market [Home sales]
Do these still exist? In my area, the MLS listings have a financing field where this is one of the options you can list, but nobody bothers to fill it out. It's just assumed you will bring cash or have your own mortgage lined up. No lender we talked to has ever mentioned it as a possibility.
But it would be nice to have that option. We bought a 2900 SF house about a year ago and our rate is 2.875%. We leveraged it at 80% because the rate was so good, so our monthly payment came in at $2300 (this is PITI, not just P&I). A year later, that's about what a starter house will do to your monthly budget. If we bought the same house today and did the same 80% LTV at current rates, the payment would be about $3700, give or take, due to both appreciation and higher rates. So being able to transfer that mortgage would be appealing to a hypothetical buyer, but as far as I know, that's just not a thing anymore. Ours certainly has a no-transfer clause, as did our last one.
I do think things are cooling off slightly near us... in the sense that we were doing 120 mph and now we're doing 90. About three months ago, I saw a house that was (optimistically) listed for $725k and somehow sold for $875k. That seems to have been the high water mark. More recent closings have been for around list price, give or take maybe $10k, and there's also the occasional price cut. I think some of it is seasonality and some of it is due to the broader macro environment, but the area is still in high demand and prices aren't really going in reverse. Seems like more of a levelling off.
Edit: A few more sales have come in over the last few days. I am no longer sure of this.
Last edited by mbnc on Thu Jul 14, 2022 9:48 am, edited 1 time in total.
- unclescrooge
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Re: Tales from this insane real estate market [Home sales]
Tell him to research opportunity zone funds. Great way to sell appreciated assets without much tax headaches.FoundingFather wrote: ↑Sat Jul 09, 2022 8:55 pm
Unfortunately, I fear that my father is going to let the tax tail wag the dog on this one - we'll see.
Re: Tales from this insane real estate market [Home sales]
From the NYTimes today: Would-be buyers are thinking twice. Redfin said roughly 60,000 home-purchase agreements across the country fell through in June, the highest rate since March and April 2020 when the pandemic began, amounting to nearly 15 percent of homes that went under contract. The slowdown in competition is making buyers more inclined to act on inspection and appraisal contingencies that they may have previously waived in the rush to close, said Taylor Marr, an economist at Redfin. “That gives them the flexibility to call the deal off.”
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Re: Tales from this insane real estate market [Home sales]
Yes. To keep the monthly cost the same, the reduction in home price is ~9% for every 1% increase in the mortgage rate.newyorker wrote: ↑Wed Jul 06, 2022 9:20 pm I just did some random calculation for monthly payment.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
However if it’s done right, the reduction in price is to put an emergency brake on an overheating market.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
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Re: Tales from this insane real estate market [Home sales]
This seems a little off. If I look at:finite_difference wrote: ↑Tue Jul 12, 2022 9:05 amYes. To keep the monthly cost the same, the reduction in home price is ~9% for every 1% increase in the mortgage rate.newyorker wrote: ↑Wed Jul 06, 2022 9:20 pm I just did some random calculation for monthly payment.
For a 500k house at Current Rate of Mortgage at 5.5 percent, in order to have the monthly rate stay the same.
At 5.5 percent = 500k
At 4.5 percent = 545k
At 3.5 percent = 596k
At 2.5 percent = 653k
So unless you are getting 25 percent discount from the peak, you are paying more monthly than precovid.
However if it’s done right, the reduction in price is to put an emergency brake on an overheating market.
$500k price/20% down/5.5% Rate - $2,271 principal & interest
$560k price/20% down/4.5% Rate - $2,270 principal & interest
$632k price/20% down/3.5% Rate - $2,270 principal & interest
$718k price/20% down/2.5% Rate - $2,270 principal & interest
With 20% down the rate sensitivity is around 12% at rates ~5%, increasing slightly as rates drop. Either way though, your point is valid and a reason why asset prices jumped so quickly when rates were slashed. All houses became 10-13% more affordable per $100k overnight. It's lso a reason why inventory will remain depressed in some areas as people in those low rates lose affordability on a loan when they move.
Re: Tales from this insane real estate market [Home sales]
https://mobile.twitter.com/sfchronicle/ ... 3340943361
As mortgage rates climb and stock prices founder, 5 Northern California cities are among the 10 metro areas where housing markets are cooling faster than anywhere else in the country.
As mortgage rates climb and stock prices founder, 5 Northern California cities are among the 10 metro areas where housing markets are cooling faster than anywhere else in the country.
Re: Tales from this insane real estate market [Home sales]
Anyone think it is a good idea to buy a lot at cheap price now and build later once labor goes down?
Re: Tales from this insane real estate market [Home sales]
I know a couple of people who just walked away after signing a sales agreement on new construction. The prices for the upgrades were not known until after signing the sales agreement and they seemed excessive. Construction wasn't scheduled to begin for a couple of months. They forfeited their earnest money. If construction actually began I imagine it would be more costly for the buyer to walk away.remomnyc wrote: ↑Tue Jul 12, 2022 7:52 am From the NYTimes today: Would-be buyers are thinking twice. Redfin said roughly 60,000 home-purchase agreements across the country fell through in June, the highest rate since March and April 2020 when the pandemic began, amounting to nearly 15 percent of homes that went under contract. The slowdown in competition is making buyers more inclined to act on inspection and appraisal contingencies that they may have previously waived in the rush to close, said Taylor Marr, an economist at Redfin. “That gives them the flexibility to call the deal off.”
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Re: Tales from this insane real estate market [Home sales]
I’ve recently started looking.... a hand full of 10 % price reductions this week in southern CA.
Glad to see reality setting in. Big slow down. Mortgage apps have crashed. At work during The last year we were running 25 deals concurrently..
We have had 4 deals in the past 2 months.
I’m waiting for more of a reduction. Properties are just sitting now...
Good place to be.
Glad to see reality setting in. Big slow down. Mortgage apps have crashed. At work during The last year we were running 25 deals concurrently..
We have had 4 deals in the past 2 months.
I’m waiting for more of a reduction. Properties are just sitting now...
Good place to be.
Re: Tales from this insane real estate market [Home sales]
Homes in our town had crept into the low 2M range during the 2% mortgage days are now seeing price cuts back down into the 1.7-1.9M range, although not quite back to pre pandemic levels. The next town over is very wealthy (3M-20M) and hasn't seen price cuts due everyone buying in cash.
Re: Tales from this insane real estate market [Home sales]
Reporting from bay area, I have seen couple of homes that were on market for more than 4 weeks being pulled and now rented out. I guess the owners do not need to budge in Bay area and continue to wait for top dollar.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939
Re: Tales from this insane real estate market [Home sales]
I saw a huge run-up in prices for bargain bin starter homes (where the schools are 2nd rate but okay) when interest rates rose. These homes might have been 25-30% cheaper than nicer homes (at better schools) just one or two years ago. Now the spread between these homes is about 10%.mbnc wrote: ↑Mon Jul 11, 2022 9:17 amIt would be nice to have that option. We bought a 2900 SF house about a year ago and our rate is 2.875%. We leveraged it at 80% because the rate
I do think things are cooling off slightly near us... in the sense that we were doing 120 mph and now we're doing 90. About three months ago, I saw a house that was (optimistically) listed for $725k and somehow sold for $875k. That seems to have been the high water mark. More recent closings have been for around list price, give or take maybe $10k, and there's also the occasional price cut. I think some of it is seasonality and some of it is due to the broader macro environment, but the area is still in high demand and prices aren't really going in reverse. Seems like more of a levelling off.
Edit: A few more sales have come in over the last few days. I am no longer sure of this.
Re: Tales from this insane real estate market [Home sales]
For my recent house hunting, I created a spreadsheet of similar homes.sandan wrote: ↑Sat Jul 16, 2022 12:05 pm I saw a huge run-up in prices for bargain bin starter homes (where the schools are 2nd rate but okay) when interest rates rose. These homes might have been 25-30% cheaper than nicer homes (at better schools) just one or two years ago. Now the spread between these homes is about 10%.
The lower priced homes calculated out to have a higher $ per square foot than the larger homes.
It is unfortunate for those of us who don't have unlimited resources. Sigh.
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