Posts
8797
Joined
4/1/2018
Location
Carson, CA, USA
Edited Date/Time
11/10/2022 9:31am
Is there anyone else here ready to give up on buying a house? My wife and, I are finally in a position to buy our first home but, with the current market, I’m not interested in paying $3700 a month for a 450K shi*box that’s falling apart or, adding 80 miles to my daily commute for something “slightly” more affordable.
A lot of homes in my neighborhood went up for sale, and were purchased by people living out of state. Many sold for 75-100K over asking price. The houses are now rentals.
After looking at the sale history of some of these homes, how is it possible that a house that was 350K three years ago, is now worth just over 600K?
Is anyone else in the same position?
Does anyone have reasonable advice?
This being a new venture for me, I won’t pretend to know jack sh** about the way the housing market works. All I know is, it’s frustrating.
A lot of homes in my neighborhood went up for sale, and were purchased by people living out of state. Many sold for 75-100K over asking price. The houses are now rentals.
After looking at the sale history of some of these homes, how is it possible that a house that was 350K three years ago, is now worth just over 600K?
Is anyone else in the same position?
Does anyone have reasonable advice?
This being a new venture for me, I won’t pretend to know jack sh** about the way the housing market works. All I know is, it’s frustrating.
I don’t know what the answer is and I’m not at all an advocate of government getting involved in this, but having people or firms remotely buy all of the houses sight unseen and relist them as rentals is a huge problem for the average person. I’m renting currently and wanted to buy the house I’m currently in, but the owner just doesn’t want to sell even though they’re up 500% on their investment.
Another issue is, at least in CA, all they’re building are apartment buildings and massive houses with zero yard or space between them. They’re literally giant two story cubes damn near stacked on top of each other, built cheap as shit and selling for huge premiums even though they’ll fall apart within 20 years. Nobody wants that and nobody can afford it, but instead entire families of 6-10 people will buy them together and just crowd in, it’s madness.
I don’t know what the answer is but I’ve been wanting to vent about this for a while, I just don’t see any realistic solution to the problem. Maybe interest rates increasing will calm things down but so far it’s really not looking good.
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We were thinking we bought to deep into a sellers market nack then.
Then 10yrs ago with an impulse buy on a cabin in N.C.
We had many sleepless nights second guessing that purchase.
Who knew those were the best two decisions we've made.
That, and to work and sacrifice to pay off the Tennessee house and land.
Still, right now both states are being inundated with people moving here, buying land, and building their own homes instead of buying an existing home.
Brought me out of semi retirement to capitalize on the opportunity.
Building custom cabinetry for just one builder.
He's covered me with work until the middle of 2024.
Haven't seen it this good since the 80's and early 90's.
With today’s housing market, breaking six figures isn’t enough relief. That’s a pretty disheartening feeling thinking you’re finally in a great position to become a home owner, to watching houses double in price over the last couple years.
I’m renting as well. It’s affordable but, I’m still paying another persons mortgage.
If we weren't such privacy freaks, we have a complete basement build out in our Tennessee home that we've talked about renting out.
There's couples moving here that are renting while they wait on either their home to be built, or the right existing home comes on the market.
Pretty soon prices of homes will come down. I would say the best time to buy, if you can afford to is when prices are low because interest rates are high. Lots of people proudly sitting on second homes that they may struggle to pay for or have adjustible rate mortgages on.
When those houses suddenly are under water, worth less than what is owed, they will flood the market like in say 2008.
IMO the perfect storm is approaching the housing market, Inflation, that makes it harder to make payments, less housing income, higher interest rates, high tax areas, heating, electric costs etc. It's really about disposable income that can be used for housing.
Providing you can afford to it might be advantageous.
What I am getting at is, if people are not able to afford homes at inflated prices when interest rates inflation fuel costs are high, naturally the prices will come down. At some point interest rates will drop again. When this happens you re-finance and end up with a lower cost home at the low interest rate.
As with most things, this benefits, people with more disposable incomes and abilities to purchase these items. Buckle down your finances, it's gonna be a rough ride, get rid of any revolving credit, car payments, etc.
Concentrate on your housing and savings. . When the prices drop considerably, then it is time to buy. Around here I would say housing prices dropped a good 20% at least, in 2008. So say a 500k house was selling for 400k, Difference is, interest rates were dropping to support housing prices, inflation and fuel costs were considerably lower also, if I remember correctly back then.
In any event I think a 25% correction is likely, possibly more depending on other factors stock market, employment numbers, wage growth etc.
Absolutely insane. Do not buy right now if you can hold off. A home in our area that’s half our square feet was listed for $600,000 last week. Already has a contract on it.
We are tempted to sell, but we would have to turn around and buy again. So yes we would make a profit on the sell side but lose ALL of it buying a new home. And you can bet it will be a lot less sqft then we have now.
I love Texas but if you have owned a home for ten or more years here you are absolutely being gutted by new out of state arrivals willing to pay whatever the cost for a house.
It just drives up your price to leave in the same home you always have. Really needs to be a full cap on taxes if you have resided in Texas over ten years. Sucks to think we could lose our house because new residents drive up the house market.
Currently my mortgage payment + interest is equal to my monthly property tax.
The best thing to do would be to sell and then rent. You are going to pay a monthly payment (rent or mortgage) but you would not pay property tax.
There are contractors buying homes, investing $30-50,000 or more in them.
Cabinets.
New roof.
Appliances.
Sound systems.
Alarms.
Heat/AC stystems.
Then flipping them for close to twice what they paid.
All day long.
That's driving up home values in older neighborhoods.
The good side is, like I said earlier, contractors and their subs are raking in the $$$ right now.
Pit Row
The Tax Bill does come though, and you feel the increase.
I do hear you.
If you look at the market as a whole the analyst see that the S&P 500, and Nasdaq are doing "ok". Yet they are being propped up by a few large cap companies IE Apple, Google, Tesla, Oil etc. When you start to actually look at the market you see that 90% of the stock market is showing what is actually happening. It red, VERY red and if you're paying attention you can see it is only a matter of time before it come crumbling down to correct itself. If you would like an example see no further than Netflix and its recent debacle.
Back on topic to the housing issues..... I would buy an RV and wait the storm out and save as much as you can for the next couple years. This isn't going away any time soon. BUT, when you do save that money and can buy properties for cheap when everyone else is bleeding. These are the times that people make the most money
Today? Predominately fixed rate fully amortized loans (nobody has been doing arms….though, as fixed rates keep going up the arms will likely become more appealing), No prepayment penalties, verified income, assets and employment. What this means is that if people can keep their jobs the majority of them SHOULD be able to afford their homes. And NONE of the secondary market shenanigans.
So…I won’t be so bold as to say there won’t be a correction, there will…how significant that correction is will be localized to each individual market…but to hold your breath for an 08 type of correction is a bit off the mark, and I think the chances of that are very very slim. Again, because the fundamentals of mortgage lending and the lack of secondary market shenanigans are completely different than 08.
I think prices will flatten and possibly decrease-how much they will decrease will depend on your specific market…for example, in Utah, fastest growing state in the nation, lowest unemployment, people moving here is creating a housing shortage, and that shortage is causing values to go up…where as in another place in the country that may not be the case.
So don’t look at National numbers, look at your market…is the population growing? What is the local unemployment rate? Those are great indicators of what your housing market will do over the next 12-24 months…
Banks cap their loan amounts on the LESSER of the sales price or appraised value. Fannie/Freddie stuff is 97% of value/purchase price, FHA is 96.5% of appraisal/purchase price, VA and USDA is 100% of value/purchase price.
The problem with today is, trying to have money for incidentals while staying on top of bills. My pressure washer quit working. That was $450. I had to get tires for my truck. Another $1300. Top it off with sticking calipers and, scorched brakes. Another $1100. $2850 in the hole within the the last two weeks. Figure that plus $3500 if I had a mortgage, $6300 without even touching utilities. That’s not a monthly occurrence. However, scrapping by and having sh** hit the fan out of nowhere, a lot of people are setting themselves up for failure. A lot of people live paycheck to paycheck. With rising cost of rent, food, gas, not everyone can save a few months worth of bills either.
Luckily, my kids are grown and, out of the house. It’s just my wife and, I. I’m thankful I’m in the position I’m in. I’m fairly frugal with money and, have a decent job.
Working construction, most people I know are able to pay their bills if they ever were to be laid off with unemployment. Most of them have owned their houses for several years already though. That isn’t the case today for many new home owners. If you lose your job, you’re walking a tightrope. Anyways, sorry if this is a bit long winded. https://www.redfin.com/WA/Federal-Way/36322-25th-Ave-S-98003/home/361696
We have friends/neighbors right now that some how think this is a great time to buy and are convinced they’ll be moved into a new house (like brand new) this summer. Dude makes $18 an hour. His wife doesn’t make much more. I’m not the guy to crush anyones dreams so I just tell them thats awesome.
Guess I’ll just sit and wait too….
1. When we were looking at the home 7 years ago the housing market was way different.
2. The red River has been way way low. Maybe 4 years ago there was crazy flooding. Bringing the river back up to normal levels. It’s been drought stricken for a number of years. That increased property values.
3. With all these new people moving in to the area, of course they like the idea of a weekend lake home. So $160 to me is like $215 to them.
So all of those homes in that area have gone up. From the double wides to the million dollar properties.
That home is now $215 according to home sales of similar type in similar areas.
Financing for them disappeared during Covid. Even housing authorities (which are the go to for manufactured homes) were not financing them during Covid. So whenever banks feel like borrower risk is going to go up (like when the government shut down the economy during Covid) they stop financing manufactured homes (among other restrictions such as requiring higher FICO, lower debt to income limits, lower loan to value ratios, more reserves, etc etc.). So what will happen when the economy slows down and borrower risk starts to increase? Bye bye financing on manufactured homes….
I’ve been doing this for 20 years…
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