Real Estate Crash thread

[Toadman]

Very nice! I'll pay you 130% of what you've got into it, as long as we can close by the end of the week

Our builder offered us that 3 months ago. It appraised for close to +50% above what we will end up paying for the land and the build. (That includes the extra $30k we spent over the original quote on the lumber package.) Probably could get double based on the recent comps.

[dan_pdx]

Our builder offered us that 3 months ago. It appraised for close to +50% above what we will end up paying for the land and the build. (That includes the extra $30k we spent over the original quote on the lumber package.) Probably could get double based on the recent comps.

HFS, mind=blown. It would be nice if we could depend on all appraisers being so rosy on housing prices - we're working on putting together an offer in Bellingham now (because buy high, sell low is the way to get rich, right?), and if we felt confident the lender's appraisal was going to come in high, it would impact our strategy. As it is, we have to assume the appraisal will fall short of our offer price and we'll have an un-financeable gap that we have to make up with more cash or mortgaging my left testicle or something.

[Toadman]

HFS, mind=blown. It would be nice if we could depend on all appraisers being so rosy on housing prices - we're working on putting together an offer in Bellingham now (because buy high, sell low is the way to get rich, right?), and if we felt confident the lender's appraisal was going to come in high, it would impact our strategy. As it is, we have to assume the appraisal will fall short of our offer price and we'll have an un-financeable gap that we have to make up with more cash or mortgaging my left testicle or something.

We looked at a 2k sq ft house yesterday at an open house in NW Bend. New development with 450 homes going in. Part of Brooks Resources that doled out lots to 20 local builders. In any event this 2k sq foot house sold for $935k right after construction broke ground. $467.50 sq/ft!? WTF? This is just an average 2 story house on a 5k sq ft lot. But the bldg materials cost have gone up to the point that it added based on what we are dealing with by about $50k. And the finishes are all just lower grade HD/Lowes type finishes. Plus those 5k lots were selling for around $300k. The larger 8k-10k lots were going for $400k-$450K. So, those larger lots will build 3k + sq foot homes that will sell for $1.2-$1.5 million if not more.

Lumber prices continue to remain above the national avg. here in Bend because all these home construction companies are booked up for the next 2 years solid.

[Benny Profane]

Absolute pinnacle of regressive taxation would be student loan relief... but boy do sob stories echo

No, because the 1%, who get all the tax breaks, especially with Trump and McConnell's recently, don't borrow for the familiy's education. They pay cash. Fuck, and bribe with some more, as that recent admissions scandal proved.

[Supermoon]

Absolutely. Most small businesses on average don't have that much revenue and the owners are probably well below 100k themselves for a 24/7 job.

Housing market is so fucked.

I don’t like this argument very much. It ignores the fact that 1, most people are employed by large employers, who use this argument to keep paying their employees shitty wages. 2, with all the shaming of people who don’t want to come back to work for shot wages,nobody seems to think there is a moral imperative to pay the people who are giving you control of their housing and healthcare a wage that allows them to, you know, afford a house and health insurance. If you can’t survive without exploiting your workers or the environment then maybe you need to find a new business.

[anotherVTskibum]

Total speculation:

Because you could work banging nails but couldn’t work at a restaurant during the pandemic, so you made the move and aren’t going back. Or you got some training and are doing something else.

Or like summit suggests the extra unemployment and forbearance programs worked and when they go away these businesses won’t struggle to find workers. Certainly possible that certain businesses are just waiting out the unemployment, etc so they can hire at lower rates.

Anecdotally, I know at least three service-industry people from a small town in Montana who couldn't get hours in during the height of the pandemic, used the time to pick up other skills, and are now working white-collar gigs. It's not a huge percentage of the industry folks I know there, but it's not trivial, either, and good help was already hard to find before the pandemic.

I suspect that's not an atypical scenario, particularly for intelligent and motivated people who were too busy working on normal circumstances to chase those additional skills. My gut feeling is that the service industry will feel an impact for a long time to come.

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[jono]

Anecdotally, I know at least three service-industry people from a small town in Montana who couldn't get hours in during the height of the pandemic, used the time to pick up other skills, and are now working white-collar gigs. It's not a huge percentage of the industry folks I know there, but it's not trivial, either, and good help was already hard to find before the pandemic.

I suspect that's not an atypical scenario, particularly for intelligent and motivated people who were too busy working on normal circumstances to chase those additional skills. My gut feeling is that the service industry will feel an impact for a long time to come.

Another option on UI was doing your own home remodel/flip. A couple of those around here. Much more lucrative than working for someone else for an extra $200/week. Why would you look back?

The biggest problem low end employers are going to have for a while is that the best people figured out something better. That's disruptive, but welcome to capitalism. Some of these people are now more mobile and entrepreneurial and in the long run that's a plus.

Low end employers need automation and efficiency and managers that know how to implement that. But people who know how to make money also know how not to take crappy wages, so most of the whining employers are in for more pain.

[sirbumpsalot]

Another option on UI was doing your own home remodel/flip. A couple of those around here. Much more lucrative than working for someone else for an extra $200/week. Why would you look back?

The biggest problem low end employers are going to have for a while is that the best people figured out something better. That's disruptive, but welcome to capitalism. Some of these people are now more mobile and entrepreneurial and in the long run that's a plus.

Low end employers need automation and efficiency and managers that know how to implement that. But people who know how to make money also know how not to take crappy wages, so most of the whining employers are in for more pain.

Sounds like robot run chipotle's are our only dining choice of the future.

[neufox47]

Teton Valley seems like the extreme end of the labor shortage, I see ads around here still looking for manual labor, retail, etc. still trying to pay $11-15 an hour. I talk to business owners all the time who lament the labor shortage but no one seems to be dramatically increasing rates. Often they will say, “if I post a job for $20, then I have to give others raises too”. When real wages have increased 20%, then I think we can start worrying about supply.

I personally know 3 moms who have not returned to work since COVID. All three are educated and left white collar careers.


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[old_newguy]

I personally know 3 moms who have not returned to work since COVID. All three are educated and left white collar careers.


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I don’t know about anyone else, but childcare hours and availability are an issue.

[jono]

Sounds like robot run chipotle's are our only dining choice of the future.

Hopefully. Also McD's, Taco Bell etc. Robots will produce a more consistent product than most current fast food places and (unlike childcare) there's no redeeming value in teaching a kid to be a fry cook. You want to eat food cooked by a human? Pay a living wage.

[wooley12]

I don’t know about anyone else, but childcare hours and availability are an issue.

My niece had to think twice about spending $4k/mo to go back to work.

[hatchgreenchile]

My niece had to think twice about spending $4k/mo to go back to work.

We call it the Right to Work Tax in our house.

When care got to $3200 p/month, plus the associated costs, work strains and stress, we said "fuck it" and pulled the cord.

[sirbumpsalot]

Hopefully. Also McD's, Taco Bell etc. Robots will produce a more consistent product than most current fast food places and (unlike childcare) there's no redeeming value in teaching a kid to be a fry cook. You want to eat food cooked by a human? Pay a living wage.

Sit down fine dining will be an experience only for the 1%....same with skiing....

[MontuckyFried]

I don’t know about anyone else, but childcare hours and availability are an issue.

It's true. Childcare costs are a real issue. Was going to hit us hard last year so one of us bailed as it was literally more cost effective to not work than spend the $$$ on daycare (which sucks for the kiddos anyway usually). However, contrary to popular opinion, I don't believe it's the government's problem (ie your tax dollars) to pay for the care of my spawn. I chose to have 'em. So it's my problem to figure shit out. Also an unpopular opinion, even as a breeder, I wish that childless people could opt out of paying school taxes, but I digress. ^_^

[sirbumpsalot]

My niece had to think twice about spending $4k/mo to go back to work.

Babysitters demand and deserve a living wage too!

[alpinevibes]

Who is buying all these houses in Seattle and California?

Lotsa millennials [who were lambasted since the last RE boom/bust for not buying/owning/"accumulating wealth"] but are in a strong place financially and have young families. They feel the housing need and sudden desire for space, privacy and autonomy, They've got boomer parents with cash who want to "see their kids settle down" and "start their family life off right." You also have boomers downsizing and/or buying something else they like - all with a fair amount of cash in their pockets. I'm 35, from Seattle and pretty much all my HS and college friends are buying or have bought in the last couple years. I know quite a few who've jumped ship to Boise for lower housing costs and a mellower existence. Not really my scene, but I understand why many would flock there if you're standards are average.

If you had a loan, and it was common knowledge that you didnt need to make payments on it for a year or more, and no additional interest would accumulate, would you make payments on it? Or would you put that free money to use elsewhere and only start paying off that loan again once interest started accruing on it?

It's amazing to think that a vast majority of student loan holders think this is a good strategy, instead of being diligent to cut the balance down. I get holding off if you've only got $10-20k, but the national average is $40k.

My wife has $70k left, today, in grad debt from a $150k balance 10yrs ago. We've continued paying well above the monthly minimum since March 2020 to lower that balance, so when the interest turns back: on the principle, payment amount and future interest costs are dramatically lower. Our biggest aim is to alleviate that debt and stress (since it won't be forgiven, ever), but with her loans averaging 6% interest rate, paying it down now would seem to act as a 10%+ ROI, which is similar to general investment options. I know that's not apples to apples by throwing the cash to Wall Street, but I feel better getting that fucking $150k debt cloud moved out of my life ASAP.

[alpinevibes]

I don’t know about anyone else, but childcare hours and availability are an issue.

And when your school/daycare closes or goes back to remote because of quarantine, your ability to perform your job (often for only slightly more net pay, and less sanity) becomes pretty hard. I have friends who've had to pay $3000/mo for 2 months of closed daycare AND take time off from their jobs to take care of their kids. Massive double hit financially, outside of just a massive stress. If one parent can get paid/huge tax break for watching johnny, while the other works, I get it.

[ntblanks]

Unskilled local labor is commanding $45 an hour to pull weeds and clean houses. $30/hr plus tips sounds about right for restaurant work. Just saw a 3 bedroom apartment in Victor for $3700 per month. It'd be possible to afford your own bedroom on the $30/hr plus tips if you had roommates.

I think it'll be the local retail businesses that struggle. No way the hardware stores and gear shops can afford to pay those market wages.

i wonder if any shops start noodling with profit sharing on top of lower wages. seems it would attract the more entrepreneurial types and incentivize hard(er) work.

[Conundrum]

We're trying to hire for my team. We promoted my lead person with the stipulation that they stay with our team until we hire a replacement. Old salary range for the position was $42-60k/year, full benefits including health, dental, disability, education reimbursement, four weeks PTO, 3% 401k match...decent for the work or so we thought. We were also two days per week WFH pre-pandemic if people wanted to. Had someone from the area who moved to Oregon and wants to come back. She wanted the job but looked at housing costs and said she couldn't afford to move home. I've talked to the powers that be and now the range is $50-75k/yr plus team based bonuses that total $2-10k more and we're not getting applicants. She still couldn't pencil it at $75k. The position doesn't require a degree and we'll train on the job.

Housing is an issue right now and it will be interesting to see when UI and moratoriums drop. Crazy to think we could have hired top talent for what we need at $50k 1-2 years ago...

[Mustonen]

It's true. Childcare costs are a real issue. Was going to hit us hard last year so one of us bailed as it was literally more cost effective to not work than spend the $$$ on daycare (which sucks for the kiddos anyway usually). However, contrary to popular opinion, I don't believe it's the government's problem (ie your tax dollars) to pay for the care of my spawn. I chose to have 'em. So it's my problem to figure shit out. Also an unpopular opinion, even as a breeder, I wish that childless people could opt out of paying school taxes, but I digress. ^_^

Except that, as we measure it, one of the best things you can do to guarantee the success of our economy is to keep breeding and from a strictly economic perspective we should be incenting that.

[Conundrum]

No kids here and I'll always vote yes for school levy's. Selfishly, I want smart people not robbing from me and taking care of me when I'm older. Plus our retirement ponzi SS scheme needs people paying in when I'm old enough to get my money.

[Dantheman]

Except that, as we measure it, one of the best things you can do to guarantee the success of our economy is to keep breeding and from a strictly economic perspective we should be incenting that.

Birth rates below replacement are a ticking time bomb. Decreasing the size of the human population is a noble goal (well, probably), but declines in population need to happen very slowly and be carefully managed. Rapidly declining population is seriously disruptive shit.

[dunfree]

i wonder if any shops start noodling with profit sharing on top of lower wages. seems it would attract the more entrepreneurial types and incentivize hard(er) work.

Tipped restaurants are short on help right now too.

for years people said “minimum wage jobs pay shit because you aren’t supposed to work one for long” and the workforce called that bluff and people are losing their shit

[altasnob]

A country like a US could have extremely low birth rates and yet be fine economically so long as they keep population numbers growing through immigration. The countries with low birth rates and poor economies (Japan, Italy) are because they also hate immigrants.