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  1. #20876
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    Real Estate Crash thread

    Quote Originally Posted by Truckee Joe View Post
    Wow you can barely build a garage in Tahoe for that price. It's like Monopoly money up here. Completing the project is the hard part right now with so many shortages of materials and labor. Many people don't care about the cost they just want it done. This ride is far from over.
    Note to self, any new home, home improvements or supporting building built in the last 2yrs (and for the foreseeable future) are a construction nightmare, and likely not worth the taxation improvement, let alone maintenance, over the next 10yrs.

    Makes that 50yr old fixer-upper with good bones much more attractive.

  2. #20877
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    Quote Originally Posted by Truckee Joe View Post
    Wow you can barely build a garage in Tahoe for that price. It's like Monopoly money up here. Completing the project is the hard part right now with so many shortages of materials and labor. Many people don't care about the cost they just want it done. This ride is far from over.
    So true. Around here part of the problem is the DGIF stupid money is consuming all the resources. I have no idea how honest the GCs are pre-construction with there customers but I do know the culture is that the pressure is off on deadlines because the culture and company line is "supply chain, labor shortage, affordable housing, dog ate my homework etc."

  3. #20878
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    Indeed, I continue to be amazed by clients who are totally unfazed when I tell them that shit is craaaaaazy and that random delays and cost over-runs will inevitably ocurr. They really seem to be hell-bent on re-doing their bathrooms/kitchens/sitting rooms, etc. NO MATTER WHAT. They seem utterly convinced that their real-estate values will just keep climbing the 5.12 that they've been on for the past few years.

    In some ways it has made client meetings easier, though. I just tell them "It's all T&M now, and I can't even hazard a guess as to what materials/appliances will cost or when/whether we can get them." Then they sort of shrug and say "When can you start?" I respond "I'm not sure, but I'll keep you in the loop and we'll get there when we can."

    The real problem with all of this is that some contractors are inevitably going to take advantage of the situation to just cash in. I've heard a few really terrible stories already, and I feel bad for the regular people who just need to update their 70s kitchen or whatever. The small project folks are just completely out of luck.

    New construction now seems so obviously ludicrous that I can hardly believe how much of it is going on. There's this new fancy-pants development about 2 miles from my house (Clear Creek Tahoe {not actually on the lake}) that is sucking all of the energy and resources out of the construction industry around here. The engineer I've been using for the last 10 years straight-up told me a while back that he's just doing work up there now and doesn't even bother with remodeling anymore. Houses are going for $5-13M. That puts construction costs at around $900+ /sqft.

    I can hardly believe that people want to spend that much to live (really just own a house since I suspect most of them won't actually live there) near here, but I spoke with an investment advisor guy a while back and he told me about his buddy who is building a place up there. It's about $10M in construction costs, but he's viewing it as "free" because he's saving more than that by moving his wealth out of CA. Man, our world is fubared.
    ride bikes, climb, ski, travel, cook, work to fund former, repeat.

  4. #20879
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    Pffft, if he is saving that kind of money leaving CA 13% tax rate then he is fucking loaded anyways and a $10M house is chump change to him.
    Quote Originally Posted by leroy jenkins View Post
    I think you'd have an easier time understanding people if you remembered that 80% of them are fucking morons.
    That is why I like dogs, more than most people.

  5. #20880
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    I'm guessing he wants to take a big capital gain from his market or real estate holdings.

    I'm also guessing he engaging in a little hyperbole.

  6. #20881
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    I've seen a few charts recently that a lot of people are actually moving to California these days.

  7. #20882
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    Exactly what Climbervan said. I don't even know what the game is anymore. I just try and keep my head down and make the place look sweet. My business is relationship based so on the pricing side I usually ask what they think is fair. The good GCs self estimate and the prices they give me are, how should I say, more than fair.

  8. #20883
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    Quote Originally Posted by fastfred View Post
    vail is over rated truck stop
    morning star, bachelor gulch, and cordillera are nice neighbor hoods in eagle county
    aspen is international ultra billion dollar wealth and porn stars
    telluride is pricey and remote
    cb is a pretend small western town that is pretend down to earth that has really been ruined by mid level wealth
    so yeah that leaves breckenridge you can hang out here not draw any attention to yourself and do what you want which works out well for some people
    the money is pouring in left and right
    wut....sum porn stuff in asspen??
    www.freeridesystems.com
    ski & ride jackets made in colorado
    maggot discount code TGR20
    ok we'll come up with a solution by then makers....

  9. #20884
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    Sep 2006
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    Quote Originally Posted by climberevan View Post
    Indeed, I continue to be amazed by clients who are totally unfazed when I tell them that shit is craaaaaazy and that random delays and cost over-runs will inevitably ocurr. They really seem to be hell-bent on re-doing their bathrooms/kitchens/sitting rooms, etc. NO MATTER WHAT. They seem utterly convinced that their real-estate values will just keep climbing the 5.12 that they've been on for the past few years.

    In some ways it has made client meetings easier, though. I just tell them "It's all T&M now, and I can't even hazard a guess as to what materials/appliances will cost or when/whether we can get them." Then they sort of shrug and say "When can you start?" I respond "I'm not sure, but I'll keep you in the loop and we'll get there when we can."

    The real problem with all of this is that some contractors are inevitably going to take advantage of the situation to just cash in. I've heard a few really terrible stories already, and I feel bad for the regular people who just need to update their 70s kitchen or whatever. The small project folks are just completely out of luck.

    New construction now seems so obviously ludicrous that I can hardly believe how much of it is going on. There's this new fancy-pants development about 2 miles from my house (Clear Creek Tahoe {not actually on the lake}) that is sucking all of the energy and resources out of the construction industry around here. The engineer I've been using for the last 10 years straight-up told me a while back that he's just doing work up there now and doesn't even bother with remodeling anymore. Houses are going for $5-13M. That puts construction costs at around $900+ /sqft.

    I can hardly believe that people want to spend that much to live (really just own a house since I suspect most of them won't actually live there) near here, but I spoke with an investment advisor guy a while back and he told me about his buddy who is building a place up there. It's about $10M in construction costs, but he's viewing it as "free" because he's saving more than that by moving his wealth out of CA. Man, our world is fubared.
    Speaking from first hand experience on the new construction process, I am glad that it's almost done. I have seen and been part of some of these "stories", and it was quite painful to the mental state of mind and the pocket book.

    Just one story I will share is the cost of having our siding installed. The contractor wanted an extra $7k to do the work. He said he had no choice because the going rate for construction crews had gone from about $20/hr to $25/hour. (I'm sure now it's probably closer to $30) Our builder called 3 of his other siding contractor buddies and they were all booked. So, we shelled out an extra $7k. I have no doubt that this is going on for all the building trades. Then after we agreed to pay the extra $7k, one of the workers came down with COVID. Then another crew member came down with COVID. Then our contractor came down with COVID, then I not surprisingly came down with COVID.

    I can imagine what some folks who have embarked on the new construction journey are about to encounter and getting that call from the contractor on an almost weekly basis asking for yet another meeting about price increases for this that an the other thing. Our soon to be next door neighbors are going through the new construction process as well. They might be lucky to be in their house by the end of June. I'm guessing whatever their T&M quote was has gone up by at least 15% minimum since last June. Probably more like 25% on certain materials.

    And yet, here in Bend the building craze continues unabated. So the builders are still very optimistic in the face of what will soon be 5%+ mortgages in another month. There are several new home construction companies cropping up in Central Oregon looking to cash in on the gold rush. I don't know where they are finding bodies to put to work.

    Was it worth it? Well, our house appraised for about 35% more than the build cost. But the mental stress was something that I will never go through again. It was a relief to get the keys and moved in, but I think it will take some time before we really feel like we can appreciate living in the house. And of course there's always something that you wished you had thought of or done differently. Something that everyone we talked to that has gone through the new construction process has said.
    "We don't beat the reaper by living longer, we beat the reaper by living well and living fully." - Randy Pausch

  10. #20885
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    Toadman-
    good to hear that things are wrapping up it will be a good 4-6 months before it can all sink in and your not looking around at everything and feeling the stress that it took to get one simple task figured out and done

    any type of home renovation or new home construction can be one of the most stress inducing happenings in a persons life

    contractors get a bad wrap and yes alot of them are dipshits and idiots way in over there head
    a good contractor will also be a people person (not a bullshit artist) will be able to empathize with the client and work to solve problems that cause mental anguish it's difficult to figure that out when your interviewing potential contractors

    I have had customers have complete break downs in front of me, I have watch couples bicker about stupid ass shit and you have to play the ref, I've had dumb husbands try to mansplain shit to their wife and not even be close, but instead of talking down to them I point out where they are right and let the rest go, you never get in a shouting match, you let them tell you how much they hate you because the next day you will be best friends again

    thankfully I hate my job with a passion but it provides for me and gives me the time to post on tgr instead of doing paper work
    I used to get wrapped up in the emotional side of stuff many years ago now I don't give a fuck it's just a business

    as for costs shit man
    you kinda notice the 50 cent increase on your yogurt and the store
    but when you lump all the construction costs together labor and materials it's ugly

  11. #20886
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    Aug 2007
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    Fred, you really hate your job? I don't love my profession but it provided my family a good standard of living, plenty of time for me to fuck off and I am good at it, so not bad all things considered. Pretty sure you're in the same boat or you're doing it wrong.
    I have a GC buddy in town. Sure his clients are a bunch of entitled narcissists, but he makes bank, so it is all good.
    Quote Originally Posted by leroy jenkins View Post
    I think you'd have an easier time understanding people if you remembered that 80% of them are fucking morons.
    That is why I like dogs, more than most people.

  12. #20887
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    Without weed fastfred would be in jail. Or a mental institution.
    . . .

  13. #20888
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    Dec 2010
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    Whatever. You missed the part about IDGAF

    People like me and Fred look at the world like this

    https://youtu.be/qIqeXSYc8nE

    I'm out happens when we leave the workforce and retire. Hopefully by then the boomers in charge don't fully ruin this planet. It's already hard enough to try to please people that think they are the most important person in the room or on the road.

  14. #20889
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    Sep 2006
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    fastfred - We are fortunate to have a good contractor. He has dropped stuff to fix stupid things like a door hinge same day. Redid part of our driveway after they screwed it up and didn't try to push the cost on to us.

    Total legit on the contractor being able to explain things to the client and why that quote on the change order is going to cost you an extra $10k, and are you really sure you want to do it? Fortunately only once did our contractor get sworn at, and that was by the Mrs. who was pissed that they had forgot to install heated floors in the master bath after being told that, "oh, yes, the heated floor is installed."

    One thing is for sure, couples will find out if they really love each other by going through the process of building a house. It's not for the faint of heart.
    "We don't beat the reaper by living longer, we beat the reaper by living well and living fully." - Randy Pausch

  15. #20890
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    Got to say, heated floors would be nice.
    Quote Originally Posted by leroy jenkins View Post
    I think you'd have an easier time understanding people if you remembered that 80% of them are fucking morons.
    That is why I like dogs, more than most people.

  16. #20891
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    Quote Originally Posted by Toadman View Post
    Mrs. who was pissed that they had forgot to install heated floors in the master bath after being told that, "oh, yes, the heated floor is installed."
    I had 110v heated floor installed because I didn’t have enough juice for 220v. 110v is inadequate for convenient use. It takes forever to heat and is expensive to run. It was nice when I was sick or really tired to leave it on and have a hot room. Same with the towel heater. If I were to re-model another I would get a small wall heater so I could easily make the room warm quickly.

  17. #20892
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    My sisters home in Kelowna is heated with geothermal heated floors. Frickin sweet and cheap.
    Quote Originally Posted by leroy jenkins View Post
    I think you'd have an easier time understanding people if you remembered that 80% of them are fucking morons.
    That is why I like dogs, more than most people.

  18. #20893
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    Dec 2016
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    In a van... down by the river
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    Buncha goddam pansies 'round here that could stand to HTFU.


  19. #20894
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    Jun 2020
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    Quote Originally Posted by Toadman View Post
    One thing is for sure, couples will find out if they really love each other by going through the process of building a house. It's not for the faint of heart.
    The house we sold in 2020, if you looked at the fridge door in the right light, you could see the imprint of my knuckles from when I punched it when my wife pissed me off one time during the building process.

  20. #20895
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    Apr 2006
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    Mortgage rates today make a $500k loan balance $800/month more expensive than it was at the end of last summer. That's significant money to the average American family. That's what- a car payment or an extra couple bananas at the grocery store?

    Pure speculative predictions on where we go from here-

    -Demand cools off this summer as mortgage rates melt upward and people get priced out. News stories will read something about the "market reaching equilibrium" as days on the market go up across the county. There will be quotes from experts about how things are fine because the buyers in the past couple years have been so well qualified.

    -later in the year, non-profitable companies with high burn rates (pretty much every early to mid stage "growth" company) start to run out of runway. These companies have been fueled by cheap money and haven't had to worry at all about profitability. With interest rates high, money from private and public markets is running dry. Companies are forced to cut costs. Layoffs ensue. Some companies fail. The pool of qualified buyers is reduced.

    - Q3 and Q4- Commodity markets are still fucked. High fertilizer costs and climate change induced drought causes crop production globally to go down. Poor countries go hungry. Inflation is still running high. The federal reserve can't quickly lower rates to help shore up the employment rate or inflation will really take off.

    -Q1 and Q2 2023- Builders who built mediocre houses in 2nd and 3rd tier metros at $500 or $600 per square foot can't find qualified buyers at 7% 30 year interest rates. Bankruptcies ensue. Layoffs continue. Unemployment goes up. Days on the market goes up. Renters start to fall behind. "Is there a real estate slowdown?" news stories start to become more prevalent.

    -Q3/Q4 2023- New "first time buyer tax credit" get bounced around in congress?

  21. #20896
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    You forgot to add: Q1 2024, dan_pdx buys a fucking house in Bellingham for 15% less than owners paid (in cash) in summer 2021, thank you very much

  22. #20897
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    ^ thanks kevo I always pay attention to what you have to say and usually agree
    I vote for your break down seems right to the point and I'm guessing a slow fizzle liek you predict
    but hey if the gov't decides to start dumping money again we'll put everything off for another year or so

    dear blog trying to decide if I want to get high and go skiing the dog wants to go skiing he always does
    spent most of today arguing with insurance companies think I'm going to become a consultant for how to stick your dick up an inusrance compines ass I was very polite and nice with everyone until I told some chick on the phone that I've been very patient but at some point I'm going to start filleting people later today

    told a sub not to worry about anything I have all the permits undercontrol we just keep working like we are working and if there is an issue I know who to call

    back when I was a sub on a job this couple was at the end with each other ran into the homeowner a couple months later and he said the marriage was over he thought it was the stress of the house but instead his wife was sleeping with a 23 year old employee

    still hate my job

  23. #20898
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    Yeah, tell me when the Rootskier family picks back up the cast-off architectural plans that they paid out the ass for and then abandoned when everything went crazy and the estimates went up by over 75%.

  24. #20899
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    Not sure about a 7% 30 year fixed, as I doubt Powell will go full Volcker on inflation. If anything I am suggesting to clients that a recession is likely this year and likely lower rates down the road, so get a low cost loan today and refi when rates are lower.
    Quote Originally Posted by leroy jenkins View Post
    I think you'd have an easier time understanding people if you remembered that 80% of them are fucking morons.
    That is why I like dogs, more than most people.

  25. #20900
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    Quote Originally Posted by Toadman View Post
    Redid part of our driveway after they screwed it up and didn't try to push the cost on to us.
    .
    That this even warrants praise really says something about the state of affairs. Redoing one's own fuckup is not optional. What kind of asshole would try to pass that cost along to his customer?

    A few weeks ago I had to redo a shower curb bc my tile guy sloped it out. It took me 6 hours and a few pieces of tile, and the fucking shower door guy charged me $440 to remove and replace the glass. Charging the client was never even on the radar. WTF.
    ride bikes, climb, ski, travel, cook, work to fund former, repeat.

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