Bought a second home with an adu. Fucking 7.125 % mortgage. If that don’t slow things down nothing will.
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Bought a second home with an adu. Fucking 7.125 % mortgage. If that don’t slow things down nothing will.
Since asking price is just Smith saying "look at what the Jonses got, and our place is way nicer!" they'll always overshoot the true market value. This is probably that moment for that market.
In my town, interest rates have split the market between those who need to borrow, and those who don't. People coming in hot with cash are still scooping up stuff that's frankly not worth what they're paying, but mid-priced stuff is tight because owners are sitting on what are now crazy good mortgages.
Yeah, the RE industry reminds me a lot of the CNBC headlines....the stock market is up 200 points due to the CPI data. Then an hour later the same headline reads....the stock market is down 300 points due to the (same) CPI data. Always an explanation even when it does a complete 180. I think 2024 gets interesting in most sectors, including Real Estate.
From 2003 to 2023:
Cost of used cars up 331%
Cost of new cars up 221%
Avg cost of home up $311%
Household income up ONLY 61%
Something's gotta break. Interestingly enough, used car prices dropped more this past month than it had in the past 10 years combined. Hold out if you're car (and probably home in many areas) shopping. Like 2008, things can turn pretty quickly and start to snowball.
As someone with a super low rate on my mortgage, and a reflexively frugal nature i dont see a reason why i would ever sell the place. Fix it up, yeah sure, but if i was to buy my home right now i would be paying almost double my current mortgage. If i could come up with cash to buy a nicer home i would just keep my current place and rent it out. Basically, unless i am forced out of my current house it is never going up for sale again. And i think a lot of folks are in that boat (people who bought or refied to super low rates).
Man you're killing that dog off already??
LOL, no, I love him to death but I have no plans for another one and the stark reality is that there's a >90% chance he'll be in doggie heaven 10 years from now.
Or snow to shovel. HOA dues, but with most covering water/sewer/trash I'm close to breaking even on that as it is. Shit, I'm tempted to pitch the idea to the wife today.
Doesn’t really make sense.
1. A good buy vs what? A year ago? Three years ago?
2. How much new construction is going on? If new home sales stall existing prices are going to fall more.
I remember in 2013 when I was selling a house and the local realtor said sales can stop on a dime. You never know. With all the new rental units coming on line and a good chance rents soften the rent vs buy calculation is going to swing back to rent.
The XHB etf is getting smashed. If rates don’t cool off soon the home building stocks are going to crater.
Good buys as in unique properties that are priced right and don't have 15+ offers and go to pending in 48 hours or less.
There isn't a bunch of new home inventory. Inventory in general is still well behind demand. I'd love to be wrong, but if inflation continues to cool and we get anywhere close to 5% by next spring......get an agent that can write their offers fast because it's gonna be back to the 20/21 craziness.
In the meantime values will still go up in desirable areas and there is a somewhat intangible value in being able to slow your roll a bit and buy something at a "normal" pace without having to waive every contingency and put in an offer 30 minutes after a place gets listed.
Pfft. That’s a drop in the bucket…
“About 74 percent of Suffolk County’s 1.5 million residents utilize cesspools.”
https://www.longislandadvance.net/st...-systems,88061
This, in a land where 100% of the population’s water supply is from ground water.
It's a crazy market right now so its all a guess, but by and large I'd agree with whiteroom. If rates drop much (and I think they will), it'll be gasoline on what is right now a little campfire. 20/21 again. Yeah, I know, dirt pimps sticking together or something, but that's what I see.
We need so much more inventory and nothing of any note is being built in my area.
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Rates went down and prices declined for 5 years after gfc. Inventory for who? Shuffling chairs on the titanic? Here's an analysis of what I think awaits:
https://www.jchs.harvard.edu/blog/su...housing-demand
"With additional increases in headship rates unlikely, population growth will retake its historical role as the main driver of household growth. But population growth has slowed to a near standstill, and it remains unclear when and if it will fully recover. So, although we haven’t felt it yet because of the jump in headship rates and the fact that some of the decline in population growth has been fewer births (which don’t affect household growth), the record low population growth levels will soon be reflected in lower levels of household growth. And these lower levels could be around for a while.
Over the long term, less population growth could also mean future household growth will continue to depend more on driving factors that are less stable and predictable, such as immigration and headship rates and the factors that support them, including changes in incomes and housing affordability. Given that household growth is the largest source of new housing demand, the impact on markets could be significant."
What say all about rfk's proposal in home ownership?
Something about uncle sam being a cosigner? Epic dumpster fire most likely.
"You will own nothing"
RFK is a total clown, so that's the kind of stuff I'd expect. No one should take proposals offered by clowns seriously.
IMO pent up demand for moving and new household formation will drive things for a while until the low population growth starts to manifest. At least in my area, people are still building like crazy and others can't get enough of expensive remodels.
2 houses just went on the market on my street (like 15 houses total). One of them is by far the fanciest, and the other is probably second place. The first was on the market a year or so ago for over double what the last house on the street sold for, then it disappeared. Now it's back on for that same price. Someone might just pay $1.6M to live next door to a guy with like 10 broken antique tractors next door and my junk show down the street. People are loony.
RFK is a Socialist. Or is it a Communist. No, I'm pretty sure that RFK is a Marxist. We already have enough gov't involvement in the housing market.
But there definitely is a need for more housing. With all those millions of not legal immigrants coming across the border, they will need roofs over their heads too.
Unfortunately, the majority of housing being built is high end, high dollar product.
NYT gift link--article on big rental companies scooping up SFH and renting them in places that were historically owner-occupied.
https://www.nytimes.com/interactive/...smid=url-share
No one wants to move these days. I have a former co-worker who took a job in the mid-west. Sold a home with a 3% mortgage and bought one with a 6.7% rate. Ouch. (I believe his new employer provided some moving funds that included some cash to help with the RE fee to sell his home.)
Quote:
According to Redfin, 91.8% of US homeowners with a mortgage have an interest rate below 6%; 82.4% have a rate under 5%; and 62% have a rate below 4%. That’s far below last week's rate of 7.18% and a good reason to avoid selling a home and lose a much more attractive rate.
Well the back-to-office people will have to balance the rate vs a new job. Or they'll rent a new place and rent out the old.
Anyone who doesn't face that quandary is gonna sell.
That stat posted a page or two back: wages vs cost of major purchases over the last 20yrs is the main issue
No one wants inflation unless it’s their salary
RE market is going to continue to be a seller’s market because money is expensive and people can’t afford to find the next place even when the interest rates relax
Those with equity, and those without.
Interesting. Weird market indeed. FWIW, the home we were considering just went under contract, BUT with a lowball cash offer after sitting on the market for months. Lots of homes sitting with recent price drops. The higher end is completely tapped out and isn't budging. Big price drops on those. Seller of that home (relative of ours - estate sale kind of deal) said that she was in the agent's office this week and overheard a panicked co-worker complaining that TWELVE deals (in a not large market btw) have fallen through this week alone due to financing falling apart at the final hour. More deals there are crumbling than going through. That's not a good sign.
However, this makes me happy if things crash because these market do NOT reflect local wages and hasn't for years. Buncha Bay Area tech ex-pats continuing to screw everybody over with their WFH jobs. A solid correction is massively overdue. I'm truly hoping we're seeing the first pieces of this house of cards start to fall. I don't GAF if our own house halves in value if it means EVERYTHING gets adjusted to what it should be. Fingers crossed!
[not holding my breath tho cuz I've been holding out for a crash for years now and nothing seems to change]
Why would 2nd home STRs reflect local wages. Look around. The mountain town dirt pimps have been selling insanely priced houses based on the dream of easy passive income.
Price doesn't matter if the basic pitch is that the house pays for itself, generates some extra cash flow and appreciates faster than Tesla stock. The STR market was the best thing in decades to come along for realtors and the towns run for the benefit of dirt pimps reflect this.
Inventory for the people who want to buy homes. We haven't built enough homes for 15 years and there is a massive shortage across most areas of the country. That's why real estate is expensive, supply and demand 101. Right now the real estate market looks like the toilet paper aisle in March of 2020 (although that was a demand side shortage, not a supply side one).
The .1%ers aren't afraid of real estate right now, that's for sure. In the past couple of weeks a home sold for $10M (the first one ever at 10+), and another at 8.55. Those numbers might be an everyday occurrence in Aspen, but they're unheard of in Crested Butte.
The Franger buying a sub $1M ST rental with a loan though? They're still looking but they're scared. If there is even one thing slightly off they're out (not that there is much to look at anyway)
This is certainly true overall, BUT for the first time in a long time, I've been seeing some listings of unfinished new builds and extensive remodels. I believe the costs of construction may have outpaced the builders' original budgets, they've gone broke, and banks ain't lending out spec cash so easily anymore. I'm seeing them listed for good prices and they aren't budging. That has to mean something, right? Been following a listing nearby for a unfinished BIG home in a nice area. About 9000 sq ft on 2 acres. This should easily be 1.5-2 million dollar home given the market these last few years. It really only seems to wall texture (it's been rocked) and trim/finish work. It's mostly completed. Saw it listed for nearly 900K. Didn't budge. Dropped to 550K. Didn't budge. Just dropped to 249K and is finally under contract. I also caught wind of an entire brand new subdivision (more middle of the road prices) that is also unfinished and developer's trying to dump ASAP. Wife knows of one of the homeowners there and lady is not stoked that she just bought last Spring and now they're offering the homes for over a 100K less than what she paid. Seems to be a bit of a fire sale going on. Also a nice part of town. Hmmm......
I have 3 multi-million dollar homes going up within 2 blocks of me. Those with money have no issues. I'm guessing these are Cali. transplants. I've met our future neighbors but don't know their background. But they dropped some serious coin for the lot, and are bldg a mini-McMansion.
But living here in Bend, the 7 figure housing market seems to still be chugging along. Certainly not like during COVID but it is still alive and kicking.
The billionaire tech bros? No. But the more run of the mill software engineers, absofreakinglutely. CA license plates are in abundance here and I can't tell you HOW many people I've met (often parents at my kids school or newcomers at the neighborhood pool) who have told me they're software who have recently come from CA. So yeah, they have definitely migrated to all over the country. I mean, look what happened to Boise!
I'm hearing that San Francisco office rentals are increasing, which HOPEFULLY is a sign that companies are calling their chickens back home. That would be rad for the rest of the country. Time for this RE idiocy to (hopefully) finally come to a stop.