What is up with people putting a home on the market for say $200,000. Then buyers are going crazy like sharks in the water and making bids 10,20,even 40,000 over asking price to get the home. Houses are selling the day they are listed and prices are crazy. Old average Joe is out of luck these days.
Free money, on top of a decade + of incredibly cheap money, add in low inventories of homes available, a dash of inflation, a dollop of Chinese nationals buying up property just to get some cash out of China........
Buddy just sold his double wide trailer on a shy acre for over a half million. I mean, he took the wheels off and put a tin roof on it, but damn.....
And it’s everywhere now. 5 years ago it was Denver, Seattle, SLC...... Today it’s going crazy in Westfugk Arkansas.
Daughter put her house up for sale at $650, sold it for $676,000 in four days. She paid about $500,000 for it couple years ago. Makes no sense to me. But I expect lots of people are getting caught up in these bidding wars on houses, and they’re going to get in over their head in debt.
My buds brother built a house yrs ago and sold it for 5 times as much yrs later due to getting people building around him.
He didnt make a profit.
For him to move to a spot w a house like he had, and no neighbors like when he started, cost what he sold for.
And it took him a half hour longer to get to work.
Too many IMHO fall for that fake gain stuff. Know a dude in real estate thata had two big fancy houses in hot areas and broke even or lost money on either
They fall for their own BS about how great an investment it is.
I aint rich. Got a spot picked out, 5 acres w dwcent house n barn. If it comes up for sale when things crash Im moving. Not until then.
My house worth more than I paid but the livin is cheap and its good enough for me. I dont give a flip about keepin up w the Jones
Been trying to buy for the past year. Every place we wanted (5 now) gone within a day or two tops and the broker said they all sold by at least 20 grand over...Texafornia
I just closed on the sale of my CA house and it's nuts in the Bay area. I actually couldn't afford to buy my own house again.
When you have fast food jobs paying $20 an hour to start, everything follows with price increases. Add to that the massive influx of money from China and India and the tech billionaires and you get a bubble that will be devastating when it bursts.
We accepted an all cash, no inspection, no contingency, two week close offer that was 40% over the asking price. No way that house would have appraised for even the ask, so we had to hope for a cash offer.
As rates rise, and cash offers become less frequent, the market is going to implode.
The only way to make a profit is to move someplace cheaper. Problem is finding such a place and still be close enough to get to work, etc, unless like me your job is waiting for direct deposit.
I’ve got too much sweat equity invested here, mostly in landscaping, and like the area, so I’m staying put and upgrading stuff. Saves all that miserable moving work.
One would hope that the shady loan qualifications and trick mortgages that got people into trouble the last time aren’t happening now, but that’s probably a forlorn hope……
I have a friend that does landscaping and artificial turf. He has been doing a lot of curb appeal projects for sellers lately and he says a new tactic is for buyers to go around the agent and offer the seller cash to accept their bid on the house. It's crazy.
What is up with people putting a home on the market for say $200,000. Then buyers are going crazy like sharks in the water and making bids 10,20,even 40,000 over asking price to get the home. Houses are selling the day they are listed and prices are crazy. Old average Joe is out of luck these days.
200k? couldn't buy a Home Depot shed for that out west. 650k is about the entry level for a basic home on a small parcel of land.
I bought an acre on a local lake and waiting for building supplies to drop more if I can find a contractor. It's tripled in value in one year. I'm even considering selling it and look for a bargain next year if or when reaestate drops. I bought another 5 acres recently and will probably flip it in a month or so if this craziness continues.
My 2005 bought properties outside Sandpoint are valued stupid expensive. I have no reason to sell as the three boys love the place. We own both free and clear.
Small town thirty miles south of Charlotte, in SC. House across the street listed on Friday for $275,000. I thought that was low. No "Sold" sign for a month. Then a couple moved in. Had sold the Monday after listing for $290,000. Daughter getting a divorce. They listed their house in Charlotte a week ago Thursday. Sold on Monday. Six showings. Three offers. Bought house at $495K. Listed at $658. Sold at $683.
Not just the housing market that is crazy. The mortgage market is. I get four or five letters a week with some mortgage company trying to refinance me. Have a VA mortgage. The rate is already low. I tell them they will need to drop the rate to 2%, no fees, just refi the balance owed and I'll bring the pre-paids for taxes and insurance to closing we'll have a deal. They offer a "lower monthly payment". People just don't understand they add thousands in fees and although a lower rate, you are refinancing several thousand more than your balance. Crazy.
I don't understand why folks are so shocked about the prices. People are running from the northern and coastal liberal communist high crime, locked down schitholes. They'll do anything to get out of there. Can't say that I blame them. It's not going to slow down here. Plus, We've got DeSantis as governor.. for now. He just signed another EO against county school boards and the commie teachers' unions re: masks for kids in school. Welcome to free America. Let the liberals suck on what they've created.
What gets me is everyone who is banking on it dropping. It may lower a little slightly when it stabilizes but it'll never drop back to precovid times. Anyone who is "cashing in" will be living in a van down by the river unless they hold a place in reserve to fall back on, even then with inflation your cash position strength will erode daily. I hope I'm wrong. If you think I am then please tell me what's gonna happen long term in your mind.
Sold my dads house within a week. There are groups going round w cash trying to buy up areas....to make rentals.
Even in nicer neighborhoods.
When it crashes all.the housing will drop in value, like 2008. Iguess they think folks will lose their homes and need to rent after?
Some towns will be hit harder than others.
Note: the cash offer folks buying rentals aint going over asking price. However, those buying for themselves are.....wonder how that competition influences prices here.
The ol ladys kid bought an older nice home in good school district for 5% over asking. She missed out of two others where folks bid up to 15%.
Work from home got her a new gig making more $, so she thinks, like many others......she can afford the place
Still a dumbass, so when the crash comes she will probably end up losing it ( her husband a POS ).
I had a very nice summer home on a small lake in the Poconos, sold for $100K more than I paid for the house. Chinese feller from NYC came up with all cash. We did have a home inspection, they found a couple of small things. Told him I'd give him $1K credit, if not, get your deposit back from the real estate agent, we closed shortly thereafter.
Give it 6-9 months and the market is going to tank like nothing we’ve ever seen
Not unless interest rates are hiked to control inflation Demand is way out pacing supply which is still being suppressed by supply chain issues. Any rural areas will continue to see growth as the urban flee continues.
The broader economy, specifically the service industry and retail is what would worry me, and the local economies of the large cities. Like shopping malls, theyll be ghost towns.
Give it 6-9 months and the market is going to tank like nothing we’ve ever seen
Not unless interest rates are hiked to control inflation Demand is way out pacing supply which is still being suppressed by supply chain issues. Any rural areas will continue to see growth as the urban flee continues.
The broader economy, specifically the service industry and retail is what would worry me, and the local economies of the large cities. Like shopping malls, theyll be ghost towns.
Our malls have lost mid level stores and replaced them w low level. Think there 3 tennis shoe stores in one, but then again our local gov ( dems ) built new housing for a chitload of big city transplants.
WTH is it w blacks wearing red tennis shoes? Gang stuff or just look at me nonsense?
Have to admit, aint seen a purple GM land yacht for ages. But Jeeps on 24" rims theres been a few.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
We're not moving, unless it's to an assisted care place someday. Bought this house in 1985 for $85k and paid the 20-yr mortgage off about 15 years later. We did a $100k renovation eight years ago. The official tax valuation is now at $366k and knowledgeable people tell us they'd list it for no less than $495k if we decided to do so. Likely it'd bring more, as discussed here.
But...as mentioned, the facts are that the money we'd pocket for selling would be gone in the trade for the next place.
my house is finally going up in value. i bought in 99 at the height of a boom around here and paid top dollar because i had sold out elsewhere and needed a house and this was exactly where/what i wanted. it stagnated for 10 or so years but according to zillow it is now worth about 3 times what i paid, not counting all the crap i've done like roof, electrical, kitchen, outbuildings, etc. and they are building some real nice cribs around here going for 600+ which is doing nothing but helping our value. but it ain't doing me any good. i ain't going nowhere.
Son sold his house for 27k over asking g in 3 days. Then finally bought one 25k over after loosing 3 at 20k over offers. Lady he bought from Cant find one to buy yet including offering 70k over on 1
Given the market shouldn't you buy first then sell?
I . People are running from the northern and coastal liberal communist high crime, locked down schitholes. They'll do anything to get out of there.
Yes, and as soon as they get to somewhere else, they immediately start working on turning the new place into another locked down, high crime liberal schithole.
What gets me is everyone who is banking on it dropping. It may lower a little slightly when it stabilizes but it'll never drop back to precovid times. Anyone who is "cashing in" will be living in a van down by the river unless they hold a place in reserve to fall back on, even then with inflation your cash position strength will erode daily. I hope I'm wrong. If you think I am then please tell me what's gonna happen long term in your mind.
The two house I sold are not the house I live in. Both houses I bought on active duty and served as my primary residence for a few years before becoming rentals. One of them was a struggle to keep occupied and well managed over the years, and would have been a money loser until the market rebounded for the first time in over ten years this past winter. I was able to recoup my investment in full with a little left over, and very happy to be done with it.
The second one I have personally managed from afar and have had the same tentants since moving out 6 years ago. The house is close to 40 years old and could use numerous upgrades, to the tune of 30k+. However the market is strong enough now to sell as is. I am selling to the tentants. I made the decision to sell now a year ago. I gave them a year to come up with financing. I am pocketing 30k more than I expected to last summer, plus an a additional year of equity and small monthly rent profits. No down time, no upgrades. If I had kicked them out and just sold as is I probably could have done a little better in the months of June and July.
I still own 3 other houses that are not rentals that I am not even considering selling.
I just spoke to a friend yesterday who is an agent an the market where I lived has cooled in the last 3 weeks. They don't know if it is temporary or the beginning of a downward trend. I have been in the real estate game long enough to know that it swings widely and once prices come down it can take many years for them to recover. Now is the time to sell investments if you don't plan on holding on to them for life.
I . People are running from the northern and coastal liberal communist high crime, locked down schitholes. They'll do anything to get out of there.
Yes, and as soon as they get to somewhere else, they immediately start working on turning the new place into another locked down, high crime liberal schithole.
I'm loud and proud when I talk do any of those squirters from NY, NJ, MA, CA, IL and others. I tell them flat out, if you're still voting for the communists, GTFO. We don't want you here. Sorry, no white kid's gloves here.
Buddy bought a house for a little over 300k couple years ago, just closed on it at 680k. If I listed my place I could easily double my money and move. But I'm a ways out from retiring yet, and I don't buy houses with the intent of flipping them any more than I do vehicles or guns. I buy what I want and use the piss out of it. I'd be lying if I said it wasn't tempting though lol.
Lots of folks around here that were renting and saving money to someday buy their own got turned out on their asses because the landlord sold the house out from underneath them. Now they can't afford going rate on rentals, and sure as fugk can't buy anything. Borderline criminal what's been happening.
When I win the lotto I'm going to buy a bunch of lots in Wokefish and drag singlewides in and let my lawyers litigate it with the city. Going to set up businesses too and deny service to anyone without a MT DL.
Went into the bank to get my daughter set up with a checking account, and as she's a minor I'm on it to so it's linked to my other accounts with them. Banker dude made a point to congratulate me on my mortgage interest rate lol. Weird dude, I just said yeah we refinanced. Thanks for that, saved me a ton of dough.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
THat's what the creepy banker dude was trying to say to me yesterday, but I don't pretend to understand it. Was basically saying when rates are higher, the banks in their bottomless graciousness have more money to loan out to people, but when rates are low they don't make any money. The poor dears. Fugk the banks, fugk the landlords and absentee homeowners.
My 2005 bought properties outside Sandpoint are valued stupid expensive. I have no reason to sell as the three boys love the place. We own both free and clear.
Back in 2007, everyone I know told me that I had to buy something ASAP or I'd never own a home because it would only go higher. It just felt crazy and I waited. Then we had a real estate recession until 2011 and I bought a house about 30% lower. Today feels the same to me like there's just no way the market can support it's own weight for much longer.
People feel locking in at a low rate is the reason to buy. Problem is, the rates have trended down for 40 years now and are near zero. That long term trend down has given people and property brokers the leverage they need to just keep jacking prices higher for decades. The current inflation terrifies me for the property market frankly. The Feds weapon against inflation is higher rates.
Commodity prices are high, millions of people flat out refuse to work, even though nearly every major employer in America has jobs they can't fill. That is going to force wages higher. And the government just keeps printing money. Commodity prices, money supply and wages are three biggest causes of inflation. If we see a reversal in the nearly half century down trend in interest rates, it will create the reverse effect on the property market.
Instead of raising home prices for every incremental drop in rates, peoples' buying power will marginally drop for every incremental rise in interest rates. That could create a persistent overhead resistance through which prices struggle to break. It'll be interesting to see how it plays out.
My girlfriend's daughter lives in a nice suburban neighborhood in north Atlanta. Nice big brick houses going for $400K and up from there. Monica told me that last week, a house went on the market for $425K. It sold in ten minutes for $465K, to a buyer in Chicago who had never even seen the house. Crazy times in real estate.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they cant afford.
Originally Posted by JakeBlues
Back in 2007, everyone I know told me that I had to buy something ASAP or I'd never own a home because it would only go higher. It just felt crazy and I waited. Then we had a real estate recession until 2011 and I bought a house about 30% lower. Today feels the same to me like there's just no way the market can support it's own weight for much longer.
People feel locking in at a low rate is the reason to buy. Problem is, the rates have trended down for 40 years now and are near zero. That long term trend down has given people and property brokers the leverage they need to just keep jacking prices higher for decades. The current inflation terrifies me for the property market frankly. The Feds weapon against inflation is higher rates.
Commodity prices are high, millions of people flat out refuse to work, even though nearly every major employer in America has jobs they can't fill. That is going to force wages higher. And the government just keeps printing money. Commodity prices, money supply and wages are three biggest causes of inflation. If we see a reversal in the nearly half century down trend in interest rates, it will create the reverse effect on the property market.
Instead of raising home prices for every incremental drop in rates, peoples' buying power will marginally drop for every incremental rise in interest rates. That could create a persistent overhead resistance through which prices struggle to break. It'll be interesting to see how it plays out.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
Im hoping it does and can jump in again. I still remember my parents mortgage rates and the economy in the mid to late 70's.. Good times
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
Im hoping it does and can jump in again. I still remember my parents mortgage rates and the economy in the mid to late 70's.. Good times
I know many people here would say cash is that last thing you want right now. But I sold my house a couple years ago, took my profits, went debt free, put it in the stock market, and have been saving since then. And even my market investments are hedged right now. I am mostly cash and my cash balance is going up month after month. It may be brilliant or it may be stupid, time will tell. I'm hoping that when the time is right, I'm still debt free and sitting on a pile of cash to jump in and take advantage of the blood in the streets. We'll see.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
Im hoping it does and can jump in again. I still remember my parents mortgage rates and the economy in the mid to late 70's.. Good times
I know many people here would say cash is that last thing you want right now. But I sold my house a couple years ago, took my profits, went debt free, put it in the stock market, and have been saving since then. And even my market investments are hedged right now. I am mostly cash and my cash balance is going up month after month. It may be brilliant or it may be stupid, time will tell. I'm hoping that when the time is right, I'm still debt free and sitting on a pile of cash to jump in and take advantage of the blood in the streets. We'll see.
Did the same. Sold house two years ago. Dumped he proceeds in the market April 2020. Sitting on the sidelines still. Bought some land with some of the profits, paid off any debt.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
Im hoping it does and can jump in again. I still remember my parents mortgage rates and the economy in the mid to late 70's.. Good times
I know many people here would say cash is that last thing you want right now. But I sold my house a couple years ago, took my profits, went debt free, put it in the stock market, and have been saving since then. And even my market investments are hedged right now. I am mostly cash and my cash balance is going up month after month. It may be brilliant or it may be stupid, time will tell. I'm hoping that when the time is right, I'm still debt free and sitting on a pile of cash to jump in and take advantage of the blood in the streets. We'll see.
Our area, wages are rising fast. Real fast. With wages goes the costs of goods and services, it’s inevitable. The liberal socialists wanted a “living wage” and they’re getting it, only problem is the cost of “living” is going right up with it. Inflation is here to stay, you can’t inject this level of liquidity into the broader economy and not devalue the dollar. I’m more concerned with the good chance the USD becomes no longer the worlds reserve currency, or that were forced into a govt controlled digital currency. Cash is the last place I’d be.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
THat's what the creepy banker dude was trying to say to me yesterday, but I don't pretend to understand it. Was basically saying when rates are higher, the banks in their bottomless graciousness have more money to loan out to people, but when rates are low they don't make any money. The poor dears. Fugk the banks, fugk the landlords and absentee homeowners.
Quit hatin’ on people for making $$ Gruff, It’s not a bad thing. They like spending it which winds up in our pockets eventually.
What gets me is everyone who is banking on it dropping. It may lower a little slightly when it stabilizes but it'll never drop back to precovid times. Anyone who is "cashing in" will be living in a van down by the river unless they hold a place in reserve to fall back on, even then with inflation your cash position strength will erode daily. I hope I'm wrong. If you think I am then please tell me what's gonna happen long term in your mind.
I pretty much agree. It's economics 101. National Real Estate association predicts that the market is still short close to 4 million homes. My prediction is that at this point there are so few houses on the market and very few people want to put their house on the market because they have no way to replace it. I think that prices will level off through the winter because that's the slowest time anyway and people have their kids in school. If someone decides they are going to sell their house they need to have an idea where they are going to move and what house they are going to buy. New construction is minimum 6 months behind and the fact that people can't sell their home and get into something in a timely fashion will also result in the pricing leveling off, or at least the increase will slow down some.
Those people predicting the "bubble bursting" is way off on that. There has only been one market bubble in 40 years and that was created by government making it so easy to buy houses people got in over their heads. The bubble in 2008 is most likely the ONLY one most people will ever see. If people missed that opportunity they will likely never get another. When construction catches up with demand so people can actually get in the house they are selling, demand will pick up again.
California still has the demand in the sense that if you put a reasonable house on the market it will sell in a fairly short time. As more people leave (and it will NOT happen in a short time) even those prices will level off. The average person can't just pick up and move with out a job waiting for them somewhere. At this point no one knows where the jobs will be and what will be required of you if you take a job. If you don't want to take the vaccination, then you don't want to move and find out the job you took will require you to get the vaccination of you are out of a job again.
At least that's the way that I see it, at this point in history.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
That wasn't the case in the Carter years. Each time the interest rates went up people got more panicky to buy something before the rates go up again. That's what's going to happen again if the rates go up. Many folks have missed opportunities to jump in when they could afford it, and interest rates are going to make that more difficult. At the same time wages are finally going up. Inflation has got to be effected with the amount of money that's being printed. Schumer is pushing to vote on this new bill, that is not even finished. It's said to be just over a trillion, but they haven't had an opportunity to actually price it out, and rumor has it, it will be well over 3 trillion before it's over then there will be another bill spending more money. Interest rates have to go up at some point.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
THat's what the creepy banker dude was trying to say to me yesterday, but I don't pretend to understand it. Was basically saying when rates are higher, the banks in their bottomless graciousness have more money to loan out to people, but when rates are low they don't make any money. The poor dears. Fugk the banks, fugk the landlords and absentee homeowners.
Quit hatin’ on people for making $$ Gruff, It’s not a bad thing. They like spending it which winds up in our pockets eventually.
hah ain't hatin on anybody for making their way in this world. At least now with the laws in place, if you read the fine print you know what your'e getting in bed with in regards to the bankers.
Absentee landowners? lol. If their shidt burns down and they lose their ass on the rebuild I won't be shedding a tear. You want it, then live there, or free it up for folks to raise their families there and spend your money on crossdressing hookers and wine in the city.
I know that's not a popular position here, with the retirees and multiple homeowners. So fugking be it.
My girlfriend's daughter lives in a nice suburban neighborhood in north Atlanta. Nice big brick houses going for $400K and up from there. Monica told me that last week, a house went on the market for $425K. It sold in ten minutes for $465K, to a buyer in Chicago who had never even seen the house. Crazy times in real estate.
Why in the world would someone move from the frying pan to the fire.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
THat's what the creepy banker dude was trying to say to me yesterday, but I don't pretend to understand it. Was basically saying when rates are higher, the banks in their bottomless graciousness have more money to loan out to people, but when rates are low they don't make any money. The poor dears. Fugk the banks, fugk the landlords and absentee homeowners.
Quit hatin’ on people for making $$ Gruff, It’s not a bad thing. They like spending it which winds up in our pockets eventually.
Trickle down is non-sense. Capital is spent with the intention of minimizing trickle down. That is the basis of capitalism. I'm not against capitalism but we can't delude ourselves with the idea large wealth aggregations are good for everyone.
The problem with large aggregations of wealth is the large aggregation of power that follows. That power is ALWAYS used to reduce everyone else's power. That is what gives us the oligarchy.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
THat's what the creepy banker dude was trying to say to me yesterday, but I don't pretend to understand it. Was basically saying when rates are higher, the banks in their bottomless graciousness have more money to loan out to people, but when rates are low they don't make any money. The poor dears. Fugk the banks, fugk the landlords and absentee homeowners.
Quit hatin’ on people for making $$ Gruff, It’s not a bad thing. They like spending it which winds up in our pockets eventually.
Interest rates control house prices. Right now the selling trend will continue since rates are so low. The Fed just announced they have no plans to push rates up until maybe 2022.
THat's what the creepy banker dude was trying to say to me yesterday, but I don't pretend to understand it. Was basically saying when rates are higher, the banks in their bottomless graciousness have more money to loan out to people, but when rates are low they don't make any money. The poor dears. Fugk the banks, fugk the landlords and absentee homeowners.
Quit hatin’ on people for making $$ Gruff, It’s not a bad thing. They like spending it which winds up in our pockets eventually.
Trickle down is non-sense. Capital is spent with the intention of minimizing trickle down. That is the basis of capitalism. I'm not against capitalism but we can't delude ourselves with the idea large wealth aggregations are good for everyone.
The problem with large aggregations of wealth is the large aggregation of power that follows. That power is ALWAYS used to reduce everyone else's power. That is what gives us the oligarchy.
Gruff was talking about landlords and a local banker. Don’t think he was talking about bezos, Gates, Soros etc….
In different parts of the country, the surge is fueled by different influences. CA has been surging for years for many reasons. Same with the states that people are moving to from CA.
But here in VA I am very confident that, other than low rates, it is mainly driven by a string of covid related influences: supply shortage of building supplies causing a short supply of new homes, eviction moratorium causing homes to remain off the market that otherwise might be available, to a huge degree people looking to flee the city.
The price of raw land in my area just got back to pre-2008 levels in the last year or so, then surged ahead. But, the housing market may be cooling. Having liquidated two rentals, and not head any other projects sucking my money for the last 2 years, I am cash heavy. I will be buying land when the time is right. Not as an investment but for the pure enjoyment of it.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
The driving factor for increasing property values is banking. Used to be people were(wisely) opposed to debt. The standard was on weeks salary for a mortgage. At a time when you took home a higher percentage of your wage. And 15 years was a long mortgage.
Today, people have the "gotta have it now's". They only care about keeping debt close to income. Mortgages are 30 years.
Mix all that with stupid low interest, and the low interest allows them to... borrow more. It all combines to push up prices. Now the $100k home is $150k. Over 30 years they will be pushing a half mill on the thing, especially if they are typically stupid. And they are buying the same house as a couple years ago.
Funny how things have/haven't changed. People that bought homes in the 70's paid 10% interest. OMG! But for 10 or 15 years. Today it's only a few percent. But figure mortgage insurance due to a small down, And a 30 year loan, maybe some other stupid thrown in...
Both ended up paying back 3 times what they borrowed.
I laugh like hell at these discussions. Everyone forgets financing cost. Buy a house, pay back 2-3x what was borrowed. Sell house for 2 1/2x purchase price. Brag on the money they made.
Ugh, no! You broke even. Maybe lost. Figure taxes, repairs, improvements.... You probably lived there much cheaper than renting, considering sale price. But you didn't make a whole lot.
Flipping, rentals, other investing are different. Hopefully!
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
The driving factor for increasing property values is banking. Used to be people were(wisely) opposed to debt. The standard was on weeks salary for a mortgage. At a time when you took home a higher percentage of your wage. And 15 years was a long mortgage.
Today, people have the "gotta have it now's". They only care about keeping debt close to income. Mortgages are 30 years.
Mix all that with stupid low interest, and the low interest allows them to... borrow more. It all combines to push up prices. Now the $100k home is $150k. Over 30 years they will be pushing a half mill on the thing, especially if they are typically stupid. And they are buying the same house as a couple years ago.
Funny how things have/haven't changed. People that bought homes in the 70's paid 10% interest. OMG! But for 10 or 15 years. Today it's only a few percent. But figure mortgage insurance due to a small down, And a 30 year loan, maybe some other stupid thrown in...
Both ended up paying back 3 times what they borrowed.
I laugh like hell at these discussions. Everyone forgets financing cost. Buy a house, pay back 2-3x what was borrowed. Sell house for 2 1/2x purchase price. Brag on the money they made.
Ugh, no! You broke even. Maybe lost. Figure taxes, repairs, improvements.... You probably lived there much cheaper than renting, considering sale price. But you didn't make a whole lot.
Flipping, rentals, other investing are different. Hopefully!
We bought our first house in 1981 for less than the price of a new truck and had an adjustable mortgage rate. I'm thinking we paid over 18% interest rates on our loan, after putting 20% down and $3k in an escrow CD account for insurance and taxes. I think the $3k CD ended up being over $10k in the 11 years it took us to pay that house off.
I think we are missing the one critical part of the equation that is making real estate go nuts: human nature. I think it is correct to point out factors such as sustained low interest rates, influxes from foreign cash buyers, reduction is supply from C19 (and previously, from delayed responses from the 2008 - 2011 real estate recession).
The major factor why we are seeing (economically) bizarre behavior by buyers is much the same as it was in previous real estate booms. In the land boom of the late 8-0's iot was peop;e buying land as a hedge for inflation. In 2008, it was a "can't lose in real estate" mindset, fueled by "lending innovations" such as NINJA loans.
Today, the emotion is fed by a generation of millenials who have grown up in the "everybody gets a trophy" era. They have never gotten their pee-pee whacked for being stupid. There is no fear of failure, mommy and daddy will bail the out if it goes sideways. Add to that a Zeitgeist of FOMO, fear of missing out, fueled by foreign and corporate cash buyers. People think they have no choice but to join the bidding war and throw insane amounts or money at sellers to "be able to get a house". It's a form of mass-hysteria. Some markets, like California, are quite cyclical, and when things are cooling down (like they are right now), all it takes is one little corner of the market to start creeping down, and the whole thing will lock up, as the usual scenario for the housing market is not for prices to fall as much as for buyers to disappear. When a market stagnates like that, it's not unusual for prices to be flat for close to a decade, until inflation has sapped away the excess from the market.
We called it "stagflation" in the '70's The emotion of the peoiple changed to one of gloom and despair, and it took Ronald Reagan to pull the nation out of it along with draconian interest rate policies. but the biggest change was people believing they could again. So I look more towards sentiment than fundamentals right now, because the fundamentals do not explain the market.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
The driving factor for increasing property values is banking. Used to be people were(wisely) opposed to debt. The standard was on weeks salary for a mortgage. At a time when you took home a higher percentage of your wage. And 15 years was a long mortgage.
Today, people have the "gotta have it now's". They only care about keeping debt close to income. Mortgages are 30 years.
Mix all that with stupid low interest, and the low interest allows them to... borrow more. It all combines to push up prices. Now the $100k home is $150k. Over 30 years they will be pushing a half mill on the thing, especially if they are typically stupid. And they are buying the same house as a couple years ago.
Funny how things have/haven't changed. People that bought homes in the 70's paid 10% interest. OMG! But for 10 or 15 years. Today it's only a few percent. But figure mortgage insurance due to a small down, And a 30 year loan, maybe some other stupid thrown in...
Both ended up paying back 3 times what they borrowed.
I laugh like hell at these discussions. Everyone forgets financing cost. Buy a house, pay back 2-3x what was borrowed. Sell house for 2 1/2x purchase price. Brag on the money they made.
Ugh, no! You broke even. Maybe lost. Figure taxes, repairs, improvements.... You probably lived there much cheaper than renting, considering sale price. But you didn't make a whole lot.
Flipping, rentals, other investing are different. Hopefully!
The market has always cycled here in Southwest Florida. I have been here since 86 in commercial real estate and I have been through 3 full cycles and we are near the top of my forth. Near the top of every cycle I heard experts say this time was different and there will be no correction. Every cycle was different and the correction occurred for different reasons, at slightly different time spans and to different degrees. But there was always a cycle.
One thing they all had in common was that money to buy got harder to borrow. Once the banks tighten up the market stalls , inventory increases and prices correct. Older cash buyers with paid off or tons of equity in homes or properties depend on younger buyers with less equity to be able to borrow to buy.
People that can move are selling in high priced areas and moving to areas that they can get a nice home for less. A lady I date is in residential real estate. At her New Years eve party I met a gentleman who recently sold his smallish ranch style house in a so so location in California for $2.2 mil. He bought a $2.1 mil beautiful house here on the water in an upscale area that is three times the size of the Cali house. He latched on to me as he quickly identified me as a fellow conservative.
The market has always cycled here in Southwest Florida. I have been here since 86 in commercial real estate and I have been through 3 full cycles and we are near the top of my forth. Near the top of every cycle I heard experts say this time was different and there will be no correction. Every cycle was different and the correction occurred for different reasons, at slightly different time spans and to different degrees. But there was always a cycle.
One thing they all had in common was that money to buy got harder to borrow. Once the banks tighten up the market stalls , inventory increases and prices correct. Older cash buyers with paid off or tons of equity in homes or properties depend on younger buyers with less equity to be able to borrow to buy.
People that can move are selling in high priced areas and moving to areas that they can get a nice home for less. A lady I date is in residential real estate. At her New Years eve party I met a gentleman who recently sold his smallish ranch style house in a so so location in California for $2.2 mil. He bought a $2.1 mil beautiful house here on the water in an upscale area that is three times the size of the Cali house. He latched on to me as he quickly identified me as a fellow conservative.
I cant speak to what happens in other areas.
Most folks can't afford to pay the $62,000 in yearly taxes and insurance on his new to him house. Add in maintenance, power and water he probably pays north of $100,000 yearly for the privilege of living on the water in Florida. I don't know how people can afford to pay the taxes and mortgage on new property purchases in Florida.
...People that can move are selling in high priced areas and moving to areas that they can get a nice home for less. A lady I date is in residential real estate. At her New Years eve party I met a gentleman who recently sold his smallish ranch style house in a so so location in California for $2.2 mil. He bought a $2.1 mil beautiful house here on the water in an upscale area that is three times the size of the Cali house. He latched on to me as he quickly identified me as a fellow conservative.
I cant speak to what happens in other areas.
This has been the case around my general area for years. The folks who moved off to the East and West coasts and big cities back in their younger years, retire, sell their high dollar properties there, move back, buy or build much bigger and better homes in prime locations and typically still have a tidy sum left over. Even with the high prices of homes in most all areas now, including this area, homes are still comparatively a good bit cheaper here.
We have an entire generation of buyers who only know low interest rates. For the most part these rates have been low since 2008. For the last 13 years consumers are used to low rate home loans as well as 0 - 4% auto loans for good credit scores. Pulling the plug on these low rates will create a serious recession and Uncle Sam knows it.
I'm not sure what is fueling the upswing in property prices. I just talked to our new neighbor who bought some acreage next to ours. He paid 5 times what we did per acre in 2014, He was ecstatic to get the property and told me he could already flip it for a huge profit. And the kicker is he only lives a few miles away and isnt someone moving from a high priced state into ours. He plans to build a new "forever" house and expects it to be completed within 6 months. Time will tell, A lot of people are flush with cash and either dont trust the markets or are unhappy with low rates of returns from a bank and are buying assets. They are not making any more land.
My wife has finally conceded to move to Northern MI where I am from. She has had an open invitation to take a position at her sister station. She never considered it until our first grandchildren are now up there. Her area would put her smack in the middle of them. Problem is just like what is said previously. Houses are way over priced. When homes up there are selling for more than what they are in my area, things are out of wack. I told the wife lets just sell, put our stuff in storage and rent. Things are going to burst and home prices will plummet. If we can wait it out I think they will soon be reasonable. Biden will make sure of that!
Sold a home last fall, 4 offers the first evening, we let it ride one more day, got more than asking and buyers paid all of closing. We actually didn't take the highest offer, we took the sure thing and closed in 30 days no problem.
...People that can move are selling in high priced areas and moving to areas that they can get a nice home for less. A lady I date is in residential real estate. At her New Years eve party I met a gentleman who recently sold his smallish ranch style house in a so so location in California for $2.2 mil. He bought a $2.1 mil beautiful house here on the water in an upscale area that is three times the size of the Cali house. He latched on to me as he quickly identified me as a fellow conservative.
I cant speak to what happens in other areas.
This has been the case around my general area for years. The folks who moved off to the East and West coasts and big cities back in their younger years, retire, sell their high dollar properties there, move back, buy or build much bigger and better homes in prime locations and typically still have a tidy sum left over. Even with the high prices of homes in most all areas now, including this area, homes are still comparatively a good bit cheaper here.
maybe not for less, but for less in taxes in neighboring counties for sure. Those taxes and utilities add up. I bought twice the house, 3 times the land and my taxes are half what they were at the old house. Utilizes are are easily half too.
I put off refinancing since we just bought the house less than two years ago, but back in May I did the math, got 15 year with a great rate and put another chunk down on it also. My goal is to have it paid off before the first born goes to college in the 6 years. We'll see but it sure is nice to have so much equity in it so quick.
March 2018 I bought a 1bed1bath1car garage condo 3miles from the Auburn campus for $95,000. Today it's worth about $135,000.
July 2020 I bought 25 acres about 15 minutes outside Auburn, Alabama for $107,000. Exactly a year later, a 20 acre tract due west of me is being listed at $230,000.
This housing market, it doesn't seem like it can keep this going forever.
When I was 17 in 1969, I had a 17 year old girl friend who worked in real estate office. She got me a job sweeping the parking lot for an hour every Friday for $5. I was getting too much money for the work. The place was flush with money. The real estate agents had a $100k club. Anyone who sold $100k in houses in one month got to go out and get drunk with them.
The Seattle real estate was in a boom in 1969. The Seattle real estate was in a boom in 1979. The Seattle real estate was in a boom in 1989. The Seattle real estate was in a boom in 2000. The Seattle real estate has ramped up at 9%/year between 2010 and 2021, due to Amazon.
What happens in the boom year is rising prices while sales volume is high. What happens between boom years is flat prices while sales volume is low. These are called "sticky prices". Sticky prices are because no one want to sell for less than they paid.
For a typical young American home buyer, he puts 20% down [ with help from Daddy down payment] on a home that appreciates at 6%. He will be making 30%/ year on his down payment from appreciation, while his house payments tax deductible....and he gets to live there. So I would advise any young American person to buy a home as soon as possible.
For a typical young Seattle couple, you had better both be writing code to have a $400k down payment.
The Midwest wages can’t compare to the west or east coast, but our cost of living isn’t off the scale either in comparison. The people that make out big time are like a plant manager that the company moved in from California and he had a hard time finding a place equivalent locally where he wouldn’t get hit with capital gains taxes.
Selling doesn’t always end well for the high rollers. Brett had the place on the end of the cul-de-sac that he listed for 1.4M. It has sold twice since we’ve lived here the first time for $650,000. and a couple years later for $605,000. There are a lot of locals who can get a loan for 2-3K, but darned few at double that.
We have an entire generation of buyers who only know low interest rates. For the most part these rates have been low since 2008. For the last 13 years consumers are used to low rate home loans as well as 0 - 4% auto loans for good credit scores. Pulling the plug on these low rates will create a serious recession and Uncle Sam knows it.
I'm not sure what is fueling the upswing in property prices. I just talked to our new neighbor who bought some acreage next to ours. He paid 5 times what we did per acre in 2014, He was ecstatic to get the property and told me he could already flip it for a huge profit. And the kicker is he only lives a few miles away and isnt someone moving from a high priced state into ours. He plans to build a new "forever" house and expects it to be completed within 6 months. Time will tell, A lot of people are flush with cash and either dont trust the markets or are unhappy with low rates of returns from a bank and are buying assets. They are not making any more land.
My wife has finally conceded to move to Northern MI where I am from. She has had an open invitation to take a position at her sister station. She never considered it until our first grandchildren are now up there. Her area would put her smack in the middle of them. Problem is just like what is said previously. Houses are way over priced. When homes up there are selling for more than what they are in my area, things are out of wack. I told the wife lets just sell, put our stuff in storage and rent. Things are going to burst and home prices will plummet. If we can wait it out I think they will soon be reasonable. Biden will make sure of that!
I got a few friends who are feeling the pull of those grandchildren. Some that swore they would never move back North.
The market has always cycled here in Southwest Florida. I have been here since 86 in commercial real estate and I have been through 3 full cycles and we are near the top of my forth. Near the top of every cycle I heard experts say this time was different and there will be no correction. Every cycle was different and the correction occurred for different reasons, at slightly different time spans and to different degrees. But there was always a cycle.
One thing they all had in common was that money to buy got harder to borrow. Once the banks tighten up the market stalls , inventory increases and prices correct. Older cash buyers with paid off or tons of equity in homes or properties depend on younger buyers with less equity to be able to borrow to buy.
People that can move are selling in high priced areas and moving to areas that they can get a nice home for less. A lady I date is in residential real estate. At her New Years eve party I met a gentleman who recently sold his smallish ranch style house in a so so location in California for $2.2 mil. He bought a $2.1 mil beautiful house here on the water in an upscale area that is three times the size of the Cali house. He latched on to me as he quickly identified me as a fellow conservative.
I cant speak to what happens in other areas.
Most folks can't afford to pay the $62,000 in yearly taxes and insurance on his new to him house. Add in maintenance, power and water he probably pays north of $100,000 yearly for the privilege of living on the water in Florida. I don't know how people can afford to pay the taxes and mortgage on new property purchases in Florida.
Most of these kind of people I know and some who are my clients have large passive incomes. Many have incomes in the millions per year on various investments. What is out of reach for most is peanuts for them. I have one client who owns a warehousing project that throws off a little over $200k a month in net rents. And that is only one of his properties. No mortgages.
Ive been thinking the same. We're in for some interesting times and yet most Americans seem oblivious and keep buying more toys, more vacations, new vehicles, houses they can afford.
People have a paradigm that long term property just goes up in price, well, because it has for the better part of our entire lives. A certain amount of modest property inflation should be expected, but what we've seen is the combined effect of that modest inflation coupled with the down trend in rates since the 70s. Most people alive today have not experienced the impact of a longer term up trend in rates and it's impact on property prices. We may be seeing the perfect storm of factors that could cause that trend reversal to happen.
The driving factor for increasing property values is banking. Used to be people were(wisely) opposed to debt. The standard was on weeks salary for a mortgage. At a time when you took home a higher percentage of your wage. And 15 years was a long mortgage.
Today, people have the "gotta have it now's". They only care about keeping debt close to income. Mortgages are 30 years.
Mix all that with stupid low interest, and the low interest allows them to... borrow more. It all combines to push up prices. Now the $100k home is $150k. Over 30 years they will be pushing a half mill on the thing, especially if they are typically stupid. And they are buying the same house as a couple years ago.
Funny how things have/haven't changed. People that bought homes in the 70's paid 10% interest. OMG! But for 10 or 15 years. Today it's only a few percent. But figure mortgage insurance due to a small down, And a 30 year loan, maybe some other stupid thrown in...
Both ended up paying back 3 times what they borrowed.
I laugh like hell at these discussions. Everyone forgets financing cost. Buy a house, pay back 2-3x what was borrowed. Sell house for 2 1/2x purchase price. Brag on the money they made.
Ugh, no! You broke even. Maybe lost. Figure taxes, repairs, improvements.... You probably lived there much cheaper than renting, considering sale price. But you didn't make a whole lot.
Flipping, rentals, other investing are different. Hopefully!
My wife has finally conceded to move to Northern MI where I am from. She has had an open invitation to take a position at her sister station. She never considered it until our first grandchildren are now up there. Her area would put her smack in the middle of them. Problem is just like what is said previously. Houses are way over priced. When homes up there are selling for more than what they are in my area, things are out of wack. I told the wife lets just sell, put our stuff in storage and rent. Things are going to burst and home prices will plummet. If we can wait it out I think they will soon be reasonable. Biden will make sure of that!
I got a few friends who are feeling the pull of those grandchildren. Some that swore they would never move back North.
He's moving from southern Michigan to northern Michigan. That's like moving from the the liberal side of town to the slightly less liberal side of town.
My wife has finally conceded to move to Northern MI where I am from. She has had an open invitation to take a position at her sister station. She never considered it until our first grandchildren are now up there. Her area would put her smack in the middle of them. Problem is just like what is said previously. Houses are way over priced. When homes up there are selling for more than what they are in my area, things are out of wack. I told the wife lets just sell, put our stuff in storage and rent. Things are going to burst and home prices will plummet. If we can wait it out I think they will soon be reasonable. Biden will make sure of that!
I got a few friends who are feeling the pull of those grandchildren. Some that swore they would never move back North.
He's moving from southern Michigan to northern Michigan. That's like moving from the the liberal side of town to the slightly less liberal side of town.
My wife has finally conceded to move to Northern MI where I am from. She has had an open invitation to take a position at her sister station. She never considered it until our first grandchildren are now up there. Her area would put her smack in the middle of them. Problem is just like what is said previously. Houses are way over priced. When homes up there are selling for more than what they are in my area, things are out of wack. I told the wife lets just sell, put our stuff in storage and rent. Things are going to burst and home prices will plummet. If we can wait it out I think they will soon be reasonable. Biden will make sure of that!
I got a few friends who are feeling the pull of those grandchildren. Some that swore they would never move back North.
He's moving from southern Michigan to northern Michigan. That's like moving from the the liberal side of town to the slightly less liberal side of town.
Thanks for explaining, Mr Sherbert.
Still smoking pot and living with your grandmother?
