Real Estate Crash thread

[climberevan]

when real estate became a get rich quick scheme instead of putting a roof over ones head things went down hill from there
when the avg joe could pump and dump their house it became a game

This.

Those of you who oppose the CO ADU plan: what's your preference? Would you like to see apartment complexes, or duplexes, or what? Tear down the SFHs and replace with density? Your concerns about transit, water, etc are legit, but I'd like to hear your alternative vision.

Surely you don't think the status quo of NIMBYism is working well. If you want more housing, it has to go somewhere. It seems that many of the concerns here could be alleviated by just banning STR in either the new ADUs or in the existing homes. I'd prefer to just ban STR altogether in non-owner occupied SFHs. If you want tourists, build hotels.

[mcski]

[phatty]

Airbnbust.

The Superbowl is literally peak demand for short term rentals but 40% of vacation rentals were unoccupied in Phoenix over Superbowl weekend. The other 51 weekends are much more grim.

Its happening everywhere. The dream of easy passive income is being replaced with declining occupancy and stiff competition on price, quality and location, location, location. Hosts who bought in at the top of the market are in for a rude surprise: just like Uber, Airbnb only cares about its stock price.

Uber diluted its driver's pay and then told them they needed to spend on expensive vehicles to compete. Airbnb is in the process of doing the same but with real estate.

Yeah, I'm down in PHX this week for our spring break. My wife was looking at Airbnbs in Scottsdale and said the number of available was insane compared to the last time we rented one a couple years ago. Prices were low and dropping the whole time. Lots of amenities being added and competition. This is over Easter weekend and then the full week, a time it should be busy due to spring breaks.

Contrast to my sister who went to St. George UT and said there was nothing available under $500 a night for Easter weekend and said the whole town was insanely packed.

[neckdeep]

STR market turn over seems like an issue most impactful to destination areas and not something applicable to 'most MLS regions.' Even so, the glut of would-be buyers is deep and the number of new starts to population growth historically low. I think that keeps prices up this year at least. Lots of pundits thought 2023 was a year of reckoning and here we are again with bidding wars and sales over ask.

Bidding wars are ending here. Average prices flat or down 2%. Moody's Analytics estimates that speculation from out of state investors has distorted Idaho prices to 50-70% overvaluation.

There is sustainable, organic demand for affordable housing here; there are also over 1000 STRs sitting mostly empty. IMHO, the solution is to put a stiff license fee on STRS. Paying $5000 annually for a STR license will help put the marginal STRs back into long term, especially at the lower end of the market. Seriously, for every 1 bedroom available to rent, there's 5 more sitting unoccupied as STRs because someone thought it was going to be all passive income, easy money gravy.

But, if the nice houses on ski hill rd are barely making 50% occupancy at $250/night and 10% at $1000/night, then STRs hosts in less desirable locations are going to get fucked in the ass if they have high costs. And that was during a record season for snow. You can bet the numbers will be downright ugly in a drought winter.

[snapt]

Bidding wars are ending here. Average prices flat or down 2%. Moody's Analytics estimates that speculation from out of state investors has distorted Idaho prices to 50-70% overvaluation.

There is sustainable, organic demand for affordable housing here; there are also 1000 STRs sitting mostly empty. IMHO, the solution is to put a stiff license fee on STRS. Paying $5000 annually for a STR license will help put the marginal STRs back into long term, especially at the lower end of the market. Seriously, for every 1 bedroom available to rent, there's 5 more sitting unoccupied as STRs because someone thought it was going to be all passive income, easy money gravy.

I’m all for the fee but that’s a huge legal gray area per the Idaho state law concerning STR’s pushed and passed by the state association of….realtors.

[neckdeep]

I’m all for the fee but that’s a huge legal gray area per the Idaho state law concerning STR’s pushed and passed by the state association of….realtors.

I'd say it's actually a small gray area. Counties and municipalities cannot "restrict" STRs in Idaho. So, is charging a permit fee a "restriction" or just the cost of doing business, just like it is for all the other types of businesses that have to pay fees and taxes.

I think it's the latter. Let's not forget that STRs are a business and as much as Airbnb likes to promote a mom and pop image, a huge proportion of its income comes from a small percentage of hosts who are running management companies covering hundreds of properties. Look it up. Airbnb is a front for professionals, 1% of the hosts manage nearly 25% of listings and account for appx. 30% of
revenues.

[4matic]

JPM mandating 5 days a week in office for some officers. Work from anywhere is going to stall and Airbnb will be affected

[Kevo]

@snapt- I had no idea about all the other united you mentioned and also had no idea the Marriott was going to be 4 stories. Wow.

All those units will surely put a dent in local housing needs if they don't turn all turn into STRs.

If Targhee sells or enters a pass agreement we're pretty screwed. Vail sold 2.3 million epic passes last year including hundreds of thousands in the SLC area. There is one stop light between downtown SLC and downtown Driggs. It's a pretty easy drive most of the way; easier than Denver to Steamboat Springs.

1000 vacation rentals and a few hundred hotel rooms won't be enough to stem the tidal wave of demand for short term vacation housing/ hotels in that scenario.

On a different/ positive note, I just got word today that we've collected enough impact fees in our neighborhood to build a municipal soccer field and a bathroom in the neighborhood park. It might even happen this year. Woot.

[summit]

No they are just the same tired points all NIMBY's use as cover for saying no to new development.

BS

The following are practical failings of the legislation, not NIMBY:

1. ADUs in resort areas are going to be STRs or used as owner occupied while they STR the SFH.

2. Mandating deed restriction of the ADUs is NOT ALLOWED per the legislation, so there is no requirement or motivation to LTR to local workers when STR is higher yield (so is LTR to non-local workers or seasonal ski rental).

3. If the legislation did allow mandated deed restrictions for ADUs, it would be a little more on target, but it would not be economical to build the ADUs as deed restricted, particularly in terms of the required rent to motivating the ADU build compared to the rents a deed restricted lower per unit cost MDU build provides.

The community I live in is over 95% multidwelling units, AND there is a lot of unbuilt land. It's mostly market condos/townhomes, employee housing, and deed restricted townhomes/apartments. The workforce housing problem is not due to SFH dominance, nor buildout requiring densification, and it is not solvable with ADUs for reasons listed above.

[neckdeep]

It's still the same place, you know. People gonna come up here and, as always, discover it's a mountain that's not really for them. Poor layout, flat terrain, long traverses, not enough lifts, limited grooming, no snowmaking, no airport and minimal nightlife.


Oh yeah, and most of its terrain faces southwest and turns into a frozen turd pile after a few hours of sunshine. Targhee is awesome with fresh pow but one of the shittiest hills in the country after a dry week. Sure, they will come, but then 90% won't come back. I don't think epic or ikon will change that.

Just like how old farts buy up property here but soon become seasonal and eventually sell. Its so beautiful, they think. Then they discover it's an hour drive to see a specialist and rich retirees demand healthcare nearby, not on the other side of a fucking mountain range. Five months of harsh winter is a long time for the newbs.

If you are a young remote worker who doesn't have a kid, it works, I guess. If you need things like convenient healthcare, a quality school for your kids or a job that matches the cost of living,p this isn't the place. It's not Jackson and it will never be Jackson. It thrived as a cheaper alternative to Jackson but now prices are high enough for people to question if what they get is really a bargain. People came here because it was uncrowded. Whats the selling point now? The poor man's Jackson with all the hassles of Jackson but with few of the amenities or conveniences? There's a good reason why Jackson prices boom and plateau while prices on this side boom and bust.

[summit]

More CO legislation crazyiness in the same bill:

Re STR: one thing local communities have done is limit STR licensed capacity for the rental based on the number of bedrooms and parking spaces to prevent 40 college students from renting a house in a residential neighborhood, preventing party houses, etc.

This new legislation removes any local ability to limit the number of unrelated people that can occupy any domicile. So now the STR can rent to 40 college students and the LTR can rent to 40 Denver skiers who go in on the place together and set up bunks the garage and closets.

Call that a NIMBY complaint, but literally nobody wants that in their backyard. That fucking sucks for people who will have to live around that. It only profits the landlord while fucking those who live around the rental. This is of course why local rules exist...

[plugboots]

Kind of weird. I’m just like fastfred,but I don’t wear PJs.

[fastfred]

Kind of weird. I’m just like fastfred,but I don’t wear PJs.

At the end of the day str and real estate is full of stupid

Why would someone pay top dollar to rent a shitty property or mediocre at best owners are idiots renters want to feel pampered I'd rent a place w nice showers and solid surface counter tops vs formica and 1 piece fiberglass showr surround for 75 bucks more

Same w real estate I look at shit boxes in shit locations one house I'm in love w is listed at 500k it needs 200k worth of work all baths new kitchen flooring plus windows. So im all in at 250k. But some idiot is willing to pay that 500k and accept a crap kitchen and carpeted bathrooms.

[neckdeep]

I know a friend of a friend of a friend who is illegally renting a 10x15 storage shed furnished with dumpster quality furniture. It's literally in a junkyard surrounded by a dozen junk cars and corroded RVs. No kitchenette. No water even, you have trek over to the main house to use the bathroom in the basement.

For this, he's gouging desperate workers $800 a month. Its usually occupied. He thrives off of people who are terrified that losing their housing will cost them their jobs. Scumbag takes in $8000 a year untaxed and won't even drop $500 to put in furnishings that don't look like they're salvaged from a flophouse. Meanwhile, maybe a thousand STR houses are empty tonight.

That's where things are these days.

[Ted Striker]

...and I thought this town was bad. Wow

[schuss]

I know a friend of a friend of a friend who is illegally renting a 10x15 storage shed furnished with dumpster quality furniture. It's literally in a junkyard surrounded by a dozen junk cars and corroded RVs. No kitchenette. No water even, you have trek over to the main house to use the bathroom in the basement.

For this, he's gouging desperate workers $800 a month. Its usually occupied. He thrives off of people who are terrified that losing their housing will cost them their jobs. Scumbag takes in $8000 a year untaxed and won't even drop $500 to put in furnishings that don't look like they're salvaged from a flophouse. Meanwhile, maybe a thousand STR houses are empty tonight.

That's where things are these days.

And yet I bet you aren't reporting it. All of the NIMBY points are valid, but we're people actually moving with any alacrity to fix them? I'd guess not.
ADUs are an easy band-aid to start, as most communities are more interested in circling the wagons and "maintaining character" than doing sustainable growth.

[neckdeep]

And yet I bet you aren't reporting it. All of the NIMBY points are valid, but we're people actually moving with any alacrity to fix them? I'd guess not.

Is he the disease or merely a symptom?

The real disease is that 25% of the county's housing is locked up in STRs. The price of housing was pushed into the stratosphere by STRs because everyone started thinking a $300k condo would pay for itself and provide a fat passive income gravytrain, even if they paid $550k for it. Now those condos are dark.

Prices at my mom's condos jumped from 300k to 550k in 18 months. Owners jumped at the chance to sell out at those prices. Now it's a ghost town. $3500 a month is too steep for locals and theres way nicer locations for folks to airbnb. Ghost town.

[snapt]

And yet I bet you aren't reporting it. All of the NIMBY points are valid, but we're people actually moving with any alacrity to fix them? I'd guess not.
ADUs are an easy band-aid to start, as most communities are more interested in circling the wagons and "maintaining character" than doing sustainable growth.

The sad irony is the county has been trying to hire a code enforcement officer at upper middle class wages for a few years now and can’t find anyone to enforce things like this even if Neckdeep did report it.

[schuss]

Is he the disease or merely a symptom?

The real disease is that 25% of the county's housing is locked up in STRs. The price of housing was pushed into the stratosphere by STRs because everyone started thinking a $300k condo would pay for itself and provide a fat passive income gravytrain, even if they paid $550k for it. Now those condos are dark.

Prices at my mom's condos jumped from 300k to 550k in 18 months. Owners jumped at the chance to sell out at those prices. Now it's a ghost town. $3500 a month is too steep for locals and theres way nicer locations for folks to airbnb. Ghost town.

So pass STR limits in town and enforce them. Most town leaders I see don't bother to try to enforce because it's extra work.
Just need to monitor listings or force compliance on Airbnb/listers (ie Airbnb give us regular activity or any Airbnb listers gets fined). Have a 10x fine if people want to cheat. It's not rocket surgery. Use some of the mtn town cops as they're probably bored anyway.

[wkd-rdr]

Well, except that all those fuckers are clogging the chairlifts, the grocery stores, and the bike trails at 11:00 am, when they should be at work.

1pm is the new 11am

[neckdeep]

So pass STR limits in town and enforce them. Most town leaders I see don't bother to try to enforce because it's extra work.
Just need to monitor listings or force compliance on Airbnb/listers (ie Airbnb give us regular activity or any Airbnb listers gets fined). Have a 10x fine if people want to cheat. It's not rocket surgery. Use some of the mtn town cops as they're probably bored anyway.

No, this is idaho so any common sense planning is anathema. Munis, counties and HOAs are forbidden to "restrict" the STR business. The preferred Idaho method is market forces. That way the land owners, dirt pimps and developers can fleece the out of state folks during the boom and laugh all the way to the bank after the bottom falls out. It's an Idaho tradition and a staple of the state economy.

I've been here long enough that this is my third real estate boom and bust. We get one about every 10 or 12 years. It takes about 8 years for everyone to forget about how badly the previous one ended for leveraged speculators. Then a new crop of second home investors comes along, enticed more by the lure of easy profits than actually living here in Redneckistan Wash, rinse, repeat.

In 2007, the sky was the limit. By 2009, we had 60% price declines, two failed banks and the dubious distinction of being the foreclosure capital of the Rockies. Just like today, the boom was mostly fueled by out of town money expecting big profits. When that easy gravytrain stopped chugging along, the out of state money tucked tail and ran. FOMO had caused a lot of locals to buy in during the boom and they ended up in underwater mortgages. Those lucrative construction jobs paying the mortgage just dried up and blew away like dust. Demand for housing dried up too. I knew several guys who had to leave their families for four years and go to work in the oil patch to keep their house. I knew a few more who lost their house. Targhee didn't have lift lines for years afterwards. One day the valley was packed and all go, go, go and then next year the place had just emptied out.

That's how we do here; we get this sucker up into fifth gear and drive it straight into a fucking brick wall.

[Kevo]

No, this is idaho so any common sense planning is anathema. Munis, counties and HOAs are forbidden to "restrict" the STR business. The preferred Idaho method is market forces. That way the land owners, dirt pimps and developers can fleece the out of state folks during the boom and laugh all the way to the bank after the bottom falls out.

I've been here long enough that this is my third real estate boom and bust. We get one about every 10 or 12 years. It takes about 8 years for everyone to forget about how badly the previous one ended for leveraged speculators. Then a new crop of second home investors comes along, enticed more by the lure of easy profits than actually living here in Redneckistan Wash, rinse, repeat.

In 2007, the sky was the limit. By 2009, we had 60% price declines, two failed banks and the dubious distinction of being the foreclosure capital of the Rockies. Just like today, the boom was mostly fueled by out of town money expecting big profits. When that easy gravytrain stopped chugging along, the out of state money tucked tail and ran. FOMO had caused a lot of locals to buy in during the boom and they ended up in underwater mortgages. Those lucrative construction jobs paying the mortgage just dried up and blew away like dust. Demand for housing dried up too. I knew several guys who had to leave their families for four years and go to work in the oil patch to keep their house. Targhee didn't have lift lines for years afterwards. One day the valley was packed and all go, go, go and then next year the place had just emptied out. That's how we do here; we get this sucker up into fifth gear and drive it straight into a fucking brick wall.

Not doubting any of your historical perspective. It is fascinating watching shit here blow up and the drive it into a fucking wall mentality is certainly playing out again.
That said, there are ways that counties and municipalities can restrict STRs. The law in question is entitled "LIMITATIONS ON REGULATION OF SHORT-TERM RENTALS AND VACATION RENTALS".

So many people misunderstand the title to mean that STRs can't be restricted. Several locally elected representatives have told me that you can't restrict STRs in Idaho. I don't think any have actually taken time to read the legislation.

(1) Neither a county nor a city may enact or enforce any ordinance that has the express or practical effect of prohibiting short-term rentals or vacation rentals in the county or city. A county or city may implement such reasonable regulations as it deems necessary to safeguard the public health, safety and general welfare in order to protect the integrity of residential neighborhoods in which short-term rentals or vacation rentals operate. A short-term rental or vacation rental shall be classified as a residential land use for zoning purposes subject to all zoning requirements applicable thereto.
(2) Neither a county nor a city can regulate the operation of a short-term rental marketplace.

Here is the entirety of the bill- https://legislature.idaho.gov/wp-con...tion/H0216.pdf

They can't outright be banned, but they can be taxed and they can be restricted in number. It's insane to me that there hasn't been a cap yet at the county or municipal level.

[zion zig zag]

I know a friend of a friend of a friend who is illegally renting a 10x15 storage shed furnished with dumpster quality furniture. It's literally in a junkyard surrounded by a dozen junk cars and corroded RVs. No kitchenette. No water even, you have trek over to the main house to use the bathroom in the basement.

For this, he's gouging desperate workers $800 a month. Its usually occupied. He thrives off of people who are terrified that losing their housing will cost them their jobs. Scumbag takes in $8000 a year untaxed and won't even drop $500 to put in furnishings that don't look like they're salvaged from a flophouse. Meanwhile, maybe a thousand STR houses are empty tonight.

That's where things are these days.

My neighbors are doing this exactly. They have a shed at the end of their driveway that they rent out for someone to live in. Nearly two years now with two different renters. The shed has no water, no bathroom and no kitchen and they stack hay bales around it in the winter to try and hold some heat in. No telling how much the people pay to live there.

[Foggy_Goggles]

Good talk...good talk...what are we fighting about again?

Regarding STR Regulation: The horse is so far out of the barn that the argument that limiting STR will cause pain is real. It today's world, nobody is willing to give up anything. At least locally, the elected officials own STRs, are realtors, own property management companies, and so on. They are just trying to engineer a faux solution while keeping there revenue stream going. Very few people have the attitude that, "I'm willing to knock $20K off my annual earnings or forego my ski condo because I'll sleep better at night knowing that I'm renting to a kindergarten teacher".

Workforce Housing: I honestly surprised that the Summit County system is so well received. But if that is the future, so be it. I just wish there was more understanding and honesty surrounding what it is. The deed restricted owner gets a. sub market cost of living b. no downside risk c. a tax payer subsidized leveraged saving account. I look at the residents of WP's affordable housing that won the lottery 20ish years ago and their standard of living greatly exceeds the intents of the system. I have friends that live in Sky Ranch outside Silverthorne. They are living the soft life. Lots of vacations, Tesla's, 25-30 hours a week at a low stress job that is far from essential.

If we want socialized housing, let er rip. Lets build what used to be called projects. It you wanna but a yoga studio and a ski tuning room is the basement, sounds good. But lets make it for rent only and lets have some type of funding exception for people that would qualify but don't will the lottery. You want uncomfortable silence, tell your friends that you can't go to Mexico or get a new bike because your have a mortgage to pay.

[summit]

Workforce Housing: I honestly surprised that the Summit County system is so well received. But if that is the future, so be it. I just wish there was more understanding and honesty surrounding what it is. The deed restricted owner gets a. sub market cost of living b. no downside risk c. a tax payer subsidized leveraged saving account. I look at the residents of WP's affordable housing that won the lottery 20ish years ago and their standard of living greatly exceeds the intents of the system. I have friends that live in Sky Ranch outside Silverthorne. They are living the soft life. Lots of vacations, Tesla's, 25-30 hours a week at a low stress job that is far from essential.

If we want socialized housing, let er rip. Lets build what used to be called projects. It you wanna but a yoga studio and a ski tuning room is the basement, sounds good. But lets make it for rent only and lets have some type of funding exception for people that would qualify but don't will the lottery. You want uncomfortable silence, tell your friends that you can't go to Mexico or get a new bike because your have a mortgage to pay.

Rent only? Rent only? Housing Projects? What is wrong with you?

Don't you know all the nurses and teachers and police and assistant bank managers will move away because they don't want to only rent. The American dream is to be accessible in ski resorts too, buddy.

People have a RIGHT to live in the most expensive and desirable locations on the planet and to do so without giving anything up because they are WorkForce(tm). There are to be NO sacrifices in paradise.

Also, they don't want 1 or 2BR apts. They want their 4br SFH or least a 3br duplex with a 2 car garage. (I mean, who wouldn't?) Haven't you heard the "Missing Middle" that has been in the paper lately in Summit talking about people who make too much qualify for deed restriction but can't afford market units suitable for a family, meaning SFH or large townhouse/duplexes? Their situation will get better once they can buy a SFH with the ability to build an ADU to STR!

But seriously, it is hard. I detest the lottery nature of deed restrictions, the cost burden that is shared by locals rather than just tourists/tourism companies, and the appreciation cap. I absolutely think deed restrictions need to be rent only. I think that purchase support should be by subsidized downpayment assistance loans with in county employment requirements for x years and a repayment penalty if they flip the property before the term is up. This would allow locals to compete for market units and ensure that it is locals meaning to stick around who get them.