Real Estate Crash thread

[muted reborn]

Well, Jackson has very strict (and enforced) STR policies, (and capped them really early) and look at the shit-show here.

I can go into the details, but basically there are NO permits unless you own in a “resort overlay” zone, which actually makes sense.

IMO Jackson shouldn't be mentioned as a real estate data point in this or any conversation because we all know it's unique and irrelevant to the big picture.

Palm Springs recently capped STR and their house prices have been reported to be dropping because of it and a few other factors. I hope these caps become a trend nationwide.

Two years ago, YouTube star Luan Palomera paid $1.5 million for a chic vacation home in Palm Springs.
Today, he’d be lucky to get $1 million for it.
As L.A. continues its crackdown on Airbnb, city officials can turn toward the desert for an example — perhaps a cautionary tale — of the potential side effects of curbing the short-term rental market.
In Palm Springs, a cap on short-term rentals in specific high-demand neighborhoods has all but frozen the market in those communities.
Sales are down. Homes languish on the market for months. And investors who bought up Palm Springs properties during the COVID-19 pandemic are facing hundreds of thousands of dollars in losses.
Palm Springs, a city dependent on tourism, tried something new in an attempt to preserve its local identity in the era of Airbnb.
In 2022, the City Council adopted an ordinance that capped the number of rental certificates in any given neighborhood to 20% of the homes there.
If you live in one of 10 Palm Springs neighborhoods that already are over the limit, you’re trapped in permit purgatory, stuck on a waiting list for a rental license that may take years.
Those with licenses before the cap were grandfathered in. Those count toward the cap, so most of the capped neighborhoods were over the limit as soon as the ordinance passed. Some, like Movie Colony East at 21.8%, are just above the limit. Others, like Racquet Club Estates at 41.6%, have blown through it.
But beyond the grandfathered homes, the rules are extremely strict. If you have a license and sell your home, the license isn’t passed down to the buyer.
Real estate agent Tim Sarlund had a homeowner client who died with a rental license. When the client’s brother took over the property and applied for the license to be renewed, he was denied because there was technically a change in ownership, according to Sarlund.
Of the 66 organized neighborhoods in Palm Springs, the 10 over the limit are spread throughout the city: Desert Park Estates, El Mirador, El Rancho Vista Estates, Gene Autry, Lawrence Crossley, Movie Colony East, Racquet Club Estates, Ranch Club Estates, Sunmor and Vista Las Palmas.
At a time when many Palm Springs home buyers have purchased properties specifically to list them on Airbnb, having one that you can’t rent out quickly loses its luster. And the new ordinance is killing home values in those 10 neighborhoods, real estate agents say.
A “Stunning Mid-Century Palm Springs Oasis,” as an Airbnb listing brags, could — if sold — become an overpriced, mostly unoccupied box getting blasted by the brutal desert sun for most of the year. Listings in these neighborhoods carry a proverbial scarlet letter as Palm Springs becomes a city of rentable homes versus non-rentable homes.
Michael Slate, a local real estate agent, said most agents don’t even bother hosting open houses for listings in capped neighborhoods.
“No one shows up,” he said. “Buyers are aware of the cap, and properties on the market in those neighborhoods don’t get a lot of activity.”
Slate has one client who paid $1.1 million for a home and spent $300,000 on renovations. Then the cap kicked in. Now, she’s not sure she’d be able to sell it for $1 million.
The good news is that there are plenty of great deals to be found for those in the market, as long as you’re only looking to live there yourself. In the Gene Autry neighborhood, one listing warns potential buyers: “Property can not be short term rented as there is a STR permit cap in the neighborhood.”
Michael Copeland said the cap came as a surprise to many, including some investors who bought homes in 2022 hoping to rent them but didn’t secure a permit before the ordinance passed.
Copeland, a resident and real estate agent, is facing a similar predicament. He bought a home in the Gene Autry neighborhood for $1.8 million in March 2022 and quickly obtained a rental license. The ban kicked in eight months later.
But now he wants to sell the home, and Gene Autry has the longest waiting list of any neighborhood in the city, with 32 applications in limbo. Copeland listed the home for $1.725 million, but with no takers he slashed the price to $1.595 million. It still hasn’t found a buyer after more than a year on the market.

Michael Copeland’s home is currently listed at $1.595 million. It still hasn’t found a buyer after more than a year on the market.
“One of the things Palm Springs did wrong with this ordinance is not letting licenses transfer when you sell a home,” Copeland said.
In the second half of 2022, Desert Park Estates saw 42 sales with a median price of $908,500, and the average home sold after 38 days on the market. During the same stretch the following year after the cap was introduced, there were only 22 sales with a median price of $832,500, and the average home took 74 days to sell. Half the sales, double the time.
To be clear, caps aren’t the only thing driving down prices. The market in Palm Springs — and all of Southern California — is still nursing a hangover from the wild pandemic market. Low interest rates led to record prices in the last few years, but as interest rates climbed higher and higher, home values dipped across the board.
In addition, people simply aren’t renting as many Airbnbs in Palm Springs these days.
“Occupancy rates are dismal,” said Sarlund, who runs a small short-term rental business in addition to working as a real estate agent. “Even people with rental licenses aren’t getting as many contracts as they used to.”
But to many in the 10 affected neighborhoods — and neighborhoods inching closer to the 20% mark, such as Twin Palms and Little Beverly Hills — the cap is a major factor in declining home values.
Dealing with the influx of rentals has been a priority for the city and its residents for years. Of the 35,127 residential units in Palm Springs, 2,813 are registered as vacation rentals — roughly 8%, according to city data.
The city has been more lax than others in the desert on short-term rentals. A handful of Coachella Valley cities such La Quinta, Cathedral City and Indian Wells have more or less banned new short-term rental permits entirely, with a few exceptions.

[byates1]

FACT: There's no more ski bum houses in ski towns because now that's where the fucking

New ski bum housing= van down by the river brah!!!!

I prefer to think of.myself as a Renaissance bohemian.

It's a spiritual journey.

[dan_pdx]

New ski bum housing= van down by the river brah!!!!

I prefer to think of.myself as a Renaissance bohemian.

It's a spiritual journey.

Have you seen what vans are going for these days?!?

[neckdeep]

[QUOTE=byates1;7013783]New ski bum housing= van down by the river brah!!!!
/QUOTE]


True.

That worn out 1960's ranch design with all original fixtures, bad roof, hobo spiders and sketchy septic system is now a highly coveted starter home for a two income couple with some family money for a downpayment.

[dunfree]

[QUOTE=neckdeep;7013815]

New ski bum housing= van down by the river brah!!!!
/QUOTE]


True.

That worn out 1960's ranch design with all original fixtures, bad roof, hobo spiders and sketchy septic system is now a highly coveted starter home for a two income couple with some family money for a downpayment.

that was mostly out of ski bum reach by the 90s, depending. Ski bum was a 2bd condo with 8 dudes and a coffee table that was 1/4 sheet plywood resting on someone’s summer tires

[G. Gordon Liddy]

Thanks. I think we'll try the real estate attorney idea. Probably going to be way less than an agent at this point. Thanks for the replies.

[Iowagriz]

What state? How long have the covenant been in place and what was the threshold for approval? I think the challenges in Colorado is that a. too many owners are pro STRs to pass the super majority (2/3s usually I think)? And the HOAs have such little legal teeth that they would be unable to inforce.

Montana. In place from the beginning of the development (from what I can tell). Developer still has about 50% of the voting rights and all lot owners seem to be on board with tight rules. In fact, we raised the annual payment last year by $100, earmarked for a legal fund to go after the few contractors that don't want to abide by the rules to keep a clean worksite (amongst other problems).

[ColMan]

There’s also an HOA in Dillon/Summit Cove that doesn’t allow STR’s (minimum is 6mo as well). Covenants have been in place from the getgo (2000 or so).

[Shredhead]

Thanks. I think we'll try the real estate attorney idea. Probably going to be way less than an agent at this point. Thanks for the replies.

Depending on where, state approved forms maybe available.

[XXX-er]

Thanks. I think we'll try the real estate attorney idea. Probably going to be way less than an agent at this point. Thanks for the replies.

LHutz Esq wrote up my deal fo free

but then he got all the usual fees, disbursements, filings and yada fucking yada

and he was probably doubling billing someone

[anotherVTskibum]

Quick topic change, but my folks passed away last year and I'm trying to sell their home. I haven't listed it yet, but a family friend of a friend reached out and wants to buy it. So my question is that as long as it's a fair price, do a I bring in a real estate agent, and if so, can I negotiate a flat fee for helping us with paperwork etc? Any real estate folks have some thoughts here?

Is it now yours or are you executing a sale on behalf of their estate? I think around here the latter could be more complicated (and you might want to use an agent just to prove you got the best deal possible for the estate), but I have no idea what your local laws are. Real estate attorney should be able to provide some clarity, I would expect, as well as help establish what documentation you may need if the deed isn't already in your name.

[liv2ski]

Quick topic change, but my folks passed away last year and I'm trying to sell their home.

GGL, in the event you didn't know this, an appraisal of the property is required by the IRS, if more than 6 months has elapsed since the death of the last parent before selling. It is called a DOD (value as of Date Of Death) appraisal. If the property is sold within the 6 month window, you can use the sales price to establish the new basis and there should be no gain. If it has been more than 6 months you need the DOD appraisal to establish if there was a gain/loss from the sale.

[G. Gordon Liddy]

GGL, in the event you didn't know this, an appraisal of the property is required by the IRS, if more than 6 months has elapsed since the death of the last parent before selling. It is called a DOD (value as of Date Of Death) appraisal. If the property is sold within the 6 month window, you can use the sales price to establish the new basis and there should be no gain. If it has been more than 6 months you need the DOD appraisal to establish if there was a gain/loss from the sale.

Good reminder. We had it appraised at the first death, but we just passed six months, so I'll inquire if I need to get another. Our tax system is so fun, and it's extra fun when you pass away!

[Core Shot]

Great opportunity in grand junction!

https://ktla.com/news/human-head-han...olorado-house/

[frorider]

^ that should’ve been on the disclosure amirite?

[californiagrown]

Great opportunity in grand junction!

https://ktla.com/news/human-head-han...olorado-house/

In the master bedroom of the house i grew up in, underneath the carpet on the hardwood floor, there was a large stain from where the previous owner had died and decomposed. It was one of the reasons why my parents were able to afford that bungalow in such a nice area.


The house i share a backyard corner with had a drugdeal-gone-bad murder happen in it 2 months after we moved into our place. The owner was in an eldercare facility with dementia and his nephew lived there and was a meth/pillhead. A few months after the murder the house was sold without disclosing the murder because... the owner of the house technically had no knowledge of the murder... or of reality. The new owners are a nice young couple, but they were not happy to learn about what had happened at the house from neighbors after they had moved in.

[I Skied Bandini Mountain]

^ that should’ve been on the disclosure amirite?

I'll tell you my first rule while doing home inspections is NEVER open a refrigerator or freezer. NEVER.

[Core Shot]

I'll tell you my first rule while doing home inspections is NEVER open a refrigerator or freezer. NEVER.

My first rule. In a house for sale or rent. Is flush the toilet before you use it.
It’s embarrassing to realize the water is off.

[TAFKALVS]

https://www.summitdaily.com/opinion/...own-economies/

The mental gymnastics here are incredible.

[singlesline]

Montana. In place from the beginning of the development (from what I can tell). Developer still has about 50% of the voting rights and all lot owners seem to be on board with tight rules. In fact, we raised the annual payment last year by $100, earmarked for a legal fund to go after the few contractors that don't want to abide by the rules to keep a clean worksite (amongst other problems).

Rode a chair (Whitefish) the other day with a guy who is the only actual resident on his entire block. All the other units are vacation rentals, which probably don't have the locally-required STR permits, but can still do 30-day rentals (and my understanding is lots of people just cheat the system on that...e.g. the contract says 30 days but they only plan to stay for a week). And of course it is winter and the snowpack sucks, so right now they are all sitting vacant. Regardless of the affordability aspect, that sucks.

He also put forward the same complaint that has been tumbling around my head: all of the new construction going up is 100% intended for use as a vacation rental or 2nd home. These are not homes designed for actual families to live in...they are designed for 6 people to come hang out for a week of skiing or national park visiting. No storage, no privacy, no place for kids to do homework, just bunkrooms and big open plan kitchen/dining/living rooms.

So not only are the new homes expensive, but they are *less* attractive to actual residents. Simultaneously they are more appealing to investors/vacationers.

It would take years to resolve, but I do believe that effective restrictions on furnished vacation rentals would not only directly lower prices, but would also increase the supply of homes intended for actually being lived in.

[rideit]

https://www.summitdaily.com/opinion/...own-economies/

The mental gymnastics here are incredible.

Umm… ORLY?

“a depreciating short-term rental property.”

[Toadman]

He also put forward the same complaint that has been tumbling around my head: all of the new construction going up is 100% intended for use as a vacation rental or 2nd home. These are not homes designed for actual families to live in...they are designed for 6 people to come hang out for a week of skiing or national park visiting. No storage, no privacy, no place for kids to do homework, just bunkrooms and big open plan kitchen/dining/living rooms.

So not only are the new homes expensive, but they are *less* attractive to actual residents. Simultaneously they are more appealing to investors/vacationers.

It would take years to resolve, but I do believe that effective restrictions on furnished vacation rentals would not only directly lower prices, but would also increase the supply of homes intended for actually being lived in.

So, they actually furnish these STR's. That's nice.

[rideit]

Not Jackson

https://www.latimes.com/california/s...e-in-free-fall

[schuss]

Rode a chair (Whitefish) the other day with a guy who is the only actual resident on his entire block. All the other units are vacation rentals, which probably don't have the locally-required STR permits, but can still do 30-day rentals (and my understanding is lots of people just cheat the system on that...e.g. the contract says 30 days but they only plan to stay for a week). And of course it is winter and the snowpack sucks, so right now they are all sitting vacant. Regardless of the affordability aspect, that sucks.

He also put forward the same complaint that has been tumbling around my head: all of the new construction going up is 100% intended for use as a vacation rental or 2nd home. These are not homes designed for actual families to live in...they are designed for 6 people to come hang out for a week of skiing or national park visiting. No storage, no privacy, no place for kids to do homework, just bunkrooms and big open plan kitchen/dining/living rooms.

So not only are the new homes expensive, but they are *less* attractive to actual residents. Simultaneously they are more appealing to investors/vacationers.

It would take years to resolve, but I do believe that effective restrictions on furnished vacation rentals would not only directly lower prices, but would also increase the supply of homes intended for actually being lived in.

Capitalism is a motherfucker when people build to what's demanded. His best route is to get actual residents running the town and prioritizing community things. Or tax the shit out of 2nd homes to fund year round resident housing.

[fastfred]

Capitalism is a motherfucker when people build to what's demanded. His best route is to get actual residents running the town and prioritizing community things. Or tax the shit out of 2nd homes to fund year round resident housing.

pretty much what is happening in scummit county co
we have endless affordable housing projects which is great but growth for the sake of growth makes you wonder
and hey an affordable gov't funded studio starts at $1,500 a month plus utilities

the colorado state legislature is looking at taxing short term rentals at the commercial property tax rate of 27% people are freaking out there will be a fire sale of sorts
but the fantasy that these units will all go back to locals is pretty comical