Real Estate Crash thread

[dan_pdx]

Market still hanging on...friend in Beaverton, OR threw his home on the market 2 weeks ago for $1.5M, got an offer over asking before open house. Closed in less than 2 weeks - all cash...$1.74M (15% over asking).

Perhaps this was the last bagholder to get in?

Nah, I think the goose is cooked. We're closing on a house in Spokane tomorrow, so pretty sure the market will be going into freefall by Monday at the latest.

[summit]

What are highcountry build costs for SFH in the in the 1500-2000sqft? I'm updating insurance coverages for fire season...

[liv2ski]

Likely over $500 a sq ft.

[summit]

Ouch. I know I'm under insured at $281/sqft

If I max out my coverage I can get $578/sqft for dwelling, but its an extra $100/mo even if I also up my deductible to 2k. Ow.

Although there is a free endorsement that will "provide up to 25% additional coverage if the amount of a covered loss exceeds your Dwelling coverage limit because of increased building costs, building code changes, inflationary effects from material shortages or additional debris removal expenses." (USAA gives this if you cover at or above their estimated minimum rebuild which is $385 LOL).

But that is really not clear... if a wildland fire takes my place out (seems to me the most likely disaster that could befall me) whether they then just give you your full dwelling coverage and then up to an extra 25% if you can prove costs that fit into that definition. I should probably call up USAA and ask.

[Foggy_Goggles]

I would say $400-600sq. ft. it probably the median build cost for that size of home with modest design and finishes. The problem with rebuilding after a wildfire is that the demand becomes so high, prices skyrocket. That is what is happening with the East Troublsome rebuilds.

[fastfred]

summit-
I just upped my insurance earlier this week w ussaa after having a sticky note for months on my desk, you can do it all on line without talking to some idiot who doesn't know shit
the way the internet worked I could only up it to 475 sq ft I think maybe it was 485

for anyone up in the mtn regions up your ins asap, people on the front range in that fire down there are getting dicked hard because they had coverage that was set at 250 or 350 sq ft for rebuild costs it's sad that this happening to them right now and they are getting hosed so bad by insurance companies

insurance companies are the scum of the earth and will do anything and everything to not pay you what you deserve some bean counting piece of shit is reporting to the ceo of the ins company knows that mtn costs are starting at 500 a sq ft right now but they will do nothing to reach out and make sure you adjust your coverage then god forbid something terrible happens and the cock sucking ins companies just say sorry you declared that your house only costs 250 sq ft to rebuild so we only pay 250 sq ft

[summit]

Seems like I insure high for the summer and low for the winter

[Conundrum]

insurance companies are the scum of the earth and will do anything and everything to not pay you what you deserve some bean counting piece of shit is reporting to the ceo of the ins company knows that mtn costs are starting at 500 a sq ft right now but they will do nothing to reach out and make sure you adjust your coverage then god forbid something terrible happens and the cock sucking ins companies just say sorry you declared that your house only costs 250 sq ft to rebuild so we only pay 250 sq ft

They will pay you the coverage you buy. Why is it their job to tell you how much insurance to buy? Would you bitch if an insurance company that you already buy insurance from called you and said you should buy more or that you should spend another $1,200 per year in premium because they called you? Everyone likes getting calls from insurance salesman right? No bad reps there...*

Now, my homeowners agent called me and asked to chat about build costs. I know build costs in my area but hadn't really thought about insurance limits. That's a good agent. I upped my home limits.

*I'm not a fan of insurance company practices most of the time.

[VTeton]

We put a small 2bdrm up for rent and had over 100 applicants. Showed it to 8 applicants and they were offering extra cash up front to get the apartment. Had people crying, begging. It's a summer town and there isn't a single other place for rent anywhere nearby.

The asking rent on the unit was higher than any rent comp ever.

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[yeahman]

We put a small 2bdrm up for rent and had over 100 applicants. Showed it to 8 applicants and they were offering extra cash up front to get the apartment. Had people crying, begging. It's a summer town and there isn't a single other place for rent anywhere nearby.

The asking rent on the unit was higher than any rent comp ever.

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That all sucks.

[North]

I should probably call up USAA and ask.

Call up United Policy Holders and ask. Plenty of informed and unbiased folks with a lot of recent experience in this exact area due to the Marshall Fire.

[Core Shot]

Aside from not being covered for a total loss, there’s also the 80% rule

==v=
What Is the 80% Rule for Home Insurance?
The 80% rule is adhered to by most insurance companies. According to the standard, an insurer will only cover the cost of damage to a house or property if the homeowner has purchased insurance coverage equal to at least 80% of the house's total replacement value. If the amount of coverage purchased is less than the minimum 80%, the insurance company will only reimburse the homeowner a proportionate amount of the required minimum coverage that should have been purchased.

KEY TAKEAWAYS:
The 80% rule means that an insurer will only fully cover the cost of damage to a house if the owner has purchased insurance coverage equal to at least 80% of the house's total replacement value.
If the coverage is purchased covers less than 80% of the replacement value, the amount paid by the insurance company will be proportionate to the amount of coverage originally purchased.
Capital improvements and inflation affect the value of a property and the 80% rule.
How the 80% Rule Works for Home Insurance
For example, James owns a house with a replacement cost of $500,000, and his insurance coverage totals $395,000. An unanticipated flood causes $250,000 worth of damage to James' house. At first glance, you might assume since the amount of coverage is higher than the cost of the damage ($395,000 vs. $250,000), so the insurance company should reimburse the entire amount to James. However, because of the 80% rule, this is not necessarily the case.

According to the 80% rule, the minimum coverage that James should have purchased for his home is $400,000 ($500,000 x 80%). If that threshold had been met, any and all partial damages to James's home would be paid by the insurance company. However, since James did not buy the minimum amount of coverage, the insurance company will only pay for the proportion of the minimum coverage represented by the actual amount of insurance purchased ($395,000/$400,000), which amounts to 98.75% of the damages. Therefore, the insurance company would pay out $246,875 and, unfortunately, James would have to pay the remaining $3,125 himself.

[jackstraw]

Market still hanging on...friend in Beaverton, OR threw his home on the market 2 weeks ago for $1.5M, got an offer over asking before open house. Closed in less than 2 weeks - all cash...$1.74M (15% over asking).

Perhaps this was the last bagholder to get in?

Jeezus. What did he buy it for?

I'm looking at a house next week for 775. It's an old beach shack probably worth 200 in reality. The average is going for 10% over asking around here, so I'm not sure I can stomach the purchase as much as we want to move.

[fastfred]

They will pay you the coverage you buy. Why is it their job to tell you how much insurance to buy? Would you bitch if an insurance company that you already buy insurance from called you and said you should buy more or that you should spend another $1,200 per year in premium because they called you? Everyone likes getting calls from insurance salesman right? No bad reps there...*

Now, my homeowners agent called me and asked to chat about build costs. I know build costs in my area but hadn't really thought about insurance limits. That's a good agent. I upped my home limits.

*I'm not a fan of insurance company practices most of the time.

I absolutely hate insurance companies so I don't cover that fact up in real life or online I spend over 40k a year in premiums between personal and business insurance and those scum bags do everything they can to not pay out or to try to rail you as hard as they can

and all you see on tv is these insurance companies talking about how they care so much about you and how they take care of you biggest lie in the world they should have a discalimer at the end of each commerical saying they will more than likely fuck you the poor people down in boulder county who lost their homes are finding out the hard way they are all confused and can't belive they are getting screwed hard I have filed complaints with the state numerous times against insurance companies and guess who runs the state division of insurance that watches over these people well shit it's some exective from an insurance company so talking to the state is like talking to an insurance company it's bullshit

getting prepared to do battle with an insurance company within the next two weeks it's going to be fun and entertaining I am going to waste so much of their time and energy

[jackstraw]

^exactly Fred. Drive into a city and look at the tallest building and see who's name is on it. Even local insurance guys print money. It's a scam right up there with Health insurance.

[sirbumpsalot]

Jeezus. What did he buy it for?

I'm looking at a house next week for 775. It's an old beach shack probably worth 200 in reality. The average is going for 10% over asking around here, so I'm not sure I can stomach the purchase as much as we want to move.

Unknown....Original owner, looks like he paid $80K for the acre of land 31 years ago and its a custom home and he added a good 800-1000sqft addition about 10 yrs ago. Acre of land in that area right now goes for $600K-700K when available.

I was looking at beach homes myself pre-covid, but in OR...$400K-500K for ocean front shacks. Now they go for $800K to well over $1M....no thanks!

Inflation!

[altacoup]

Only product I can think of in which one pays money on the promise that they’ll be reimbursed and then ended they need the money the seller tells them to get fucked. And that’s home and car shit. Health insurance companies have basically zero interest in your health and well being. Soulless fuckers each and everyone of them!

[4matic]

Rates take another leg higher

[rideit]

Well, the bubble here continues to grow. The average median price of a home in Teton County just climbed to over $4 MILLION. (Is there anywhere higher in the US? I really don’t know).
Our neighbor’s basic-ass house just went on the market two days ago, and got four bids in the first few hours. We bought our true skid-shithole in ‘13 for a laughable amount, renovated it, and is now is the nicest/biggest on the block.
On the one hand, it means our tax bill is increasing by 30-50%. OTOH, we will be able to rent it at below market rates to a family we like when we retire, and live off of it.
SMDHJFCLOL


https://www.zillow.com/homedetails/4...94365523_zpid/

[alpinevibes]

Well, the bubble here continues to grow. The average median price of a home in Teton County just climbed to over $4 MILLION. (Is there anywhere higher in the US? I really don’t know).

At least for 2021 Jan-Nov, Pitkin was at $4M average.

Q1 2022 data shows that for specifically Aspen and Snowmass Village, both SFH and condo sales being up roughly 60% in average price sold and up ~50% on price per sq ft over the 2021 numbers!! Insanity!!

[jackstraw]

People are going to be upside down for a long time when this crashes. It's inevitable and unfortunate.

[goldenboy]

So many of my college classmates really struggled with micro and macro economics 101. This thread is a constant reminder of that.

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[liv2ski]

People are going to be upside down for a long time when this crashes. It's inevitable and unfortunate.

What economic event do you anticipate tanking housing nationally? In my 63 years I have seen a S&L crisis create a 30% decline in values (not sure why), local defense contractors leaving San Diego caused a 40% reduction in price during Clinton's first administration and of course the Liar Loan crisis.
Sure it can happen, but it takes a pretty major event that I just do not see coming unless the economy just massively shits the bed.

[dan_pdx]

I think the economy is on the brink of massively shitting the bed, but given that housing demand still outstrips supply, I'd expect housing will have a soft landing. Of course, as someone who just bought a house, what else am I going to say?

[RootSkier]

I should probably call up USAA and ask.

No, you should WRITE USAA and ask.