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How's your housing market? (1 Viewer)

I was wondering for the new sales, how much of that drop is supply chain related. In the stock thread, we’ve seen Target, Walmart and others mention supply chain issues hitting them recently. I can see the drop due to interest rates as well, but definitely wondering if there were also supply chain type issues or even inflation (builders upping price).

Anecdotally, we have friends who sold at a great price 2-3 months ago but we’re living in an apartment while the new house was being built. They are stressing over the interest rates because their window between deposit/contract and closing on a loan had the doubling of interest rates. I’d assume their mortgage isn’t huge as they definitely had a good chunk of equity, but maybe they didn’t have as much as I think. They did a few remodels before selling and I’m sure that cost a pretty penny. Our house is worth about the same, but I think we’ve probably got more equity than most getting a nice amount from first house (before the crash) and the recent few years of jumping prices. I’m still wondering what the future holds for a semi-retirement move (both WFH but kids will be done with HS/college) in a few years, definitely want to see where things land. We’re at 75% equity right now, but would we keep it and rent it considering the 2.375% interest rate?

 
Harry Frogfish said:
The info on Zillow is what it is, good and bad, depending.  It's not that difficult to figure out what parts are useless.  For basic, super easy browsing, it serves its purpose.  If you are using that info as gospel, you have a lot to learn, that's all.  

Whatever the case may be, it's not like it should be nixed completely.  It's kind of funny how upset people get over that site.
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It just has the easiest UI for browsing about and getting data on prior transactions IMO. Need to have actual MLS or access to a wholesaler to actually buy.

 
STEADYMOBBIN 22 said:
A lady bought the house next door to me about 10 years and the house has been vacant for 7 of those years. (She’s rented it out twice but that was when she first got it) She won’t even entertain my offers to buy it. So weird. I want to buy it so I can bridge my house to it and use it as a garage. They have the lawn mowed and the power is on but otherwise it just sits. 
 

What’s the logic in this? Just an investment?
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Yeah, that's strange she won't even hear your offers to consider.  If it's 'just an investment" then that investment time is now after 10 yrs and prices the way they are.

ETA: could obviously be many misc. reasons, but one theory could be she doesn't need the money and plans to gift it (or will it) to a grandchild at some point (assuming it's a nice area?)

 
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Houses have been flying out of here within 48 hours of being listed, but last Monday somebody listed theirs for $120 a square foot more than the typical house sells for here - it was completely renovated, gutted and everything new inside, new roof, landscaping etc — and it hasn’t moved. Think we finally found the price people will say no to. 

 
Capella said:
Houses have been flying out of here within 48 hours of being listed, but last Monday somebody listed theirs for $120 a square foot more than the typical house sells for here - it was completely renovated, gutted and everything new inside, new roof, landscaping etc — and it hasn’t moved. Think we finally found the price people will say no to. 
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I see this now and then also on these reno's. Priced to high from the start.  Also, last week might have been the worst week to list a home with this weekend being the first big, getaway holiday of the year and graduation season starting in some areas.

 
Last week I received a letter with an offer of $287,700 from a property management company.  They bought the house across the street from me for $360000 but it's a 3 income rental.

I bought my house in 2001 for $101,000. It's a 3 bedroom 3 bath 1,600 sq ft. No way is it worth that much.

No way I'm selling. Why would I ? Everybody and their brother is moving down here for a reason. I've got both coasts 90 minutes away and about 100 lakes within 15 minutes. I love my house.

 
Chatted with a mortgage guy today that @Chadstroma tipped me off to to get a pre qualification for a new construction.  Said he's been working with people that have missed on nine houses in this area.   

He does say things are dying down though, but still frantic

 
man, i’m thinking of moving in a year and really tempted to get out of here now for a profit rather than wait and chance a total collapse here in marin. 

 
Getzlaf15 said:
I see this now and then also on these reno's. Priced to high from the start.  Also, last week might have been the worst week to list a home with this weekend being the first big, getaway holiday of the year and graduation season starting in some areas.
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Yea I’ll be very interested to see what this one gets. It’s waaaaaay more expensive than any other house here and this place has been on fire. It’s wild. 

 
culdeus said:
Chatted with a mortgage guy today that @Chadstroma tipped me off to to get a pre qualification for a new construction.  Said he's been working with people that have missed on nine houses in this area.   

He does say things are dying down though, but still frantic
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Yup, still a definite sellers market but definitely slowing. I agree 100% from what I can see and hearing from other brokers.

 
For those that have read some of my comments on this, the real estate thread, the mortgage rates thread and even the stock thread you may be familiar with Mat Ishbia, the CEO of UWM, the largest wholesale lender in the country is one of the potential bidders for the Denver Broncos. Not really thread worthy by itself and pretty much doesn't exactly fit any of the threads but thought some might find it interesting as it does intersect dual interests for some around these parts. 

 
rustycolts said:
Last week I received a letter with an offer of $287,700 from a property management company.  They bought the house across the street from me for $360000 but it's a 3 income rental.

I bought my house in 2001 for $101,000. It's a 3 bedroom 3 bath 1,600 sq ft. No way is it worth that much.

No way I'm selling. Why would I ? Everybody and their brother is moving down here for a reason. I've got both coasts 90 minutes away and about 100 lakes within 15 minutes. I love my house.
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Some people in Miami Dade and Broward are moving north, mostly to the Carolinas and Tennessee, but some are moving to more affordable housing in central Florida and Jacksonville. $287,000 looks very affordable to many of them.

 
Had a couple of parties from Chicago yesterday, looking at 20 acres of woods next to me.   Asking price of $250k.  A million dollar house will help my value I guess.

 
Rising interest rates plus inflated home values.  Not a great time to buy.   Good time to sit things out.

Unfortunately a) I already have a house, b) the Mrs won’t let me sell it because the kids are entering high school.  Ugh.

 
My SiL has tried to sell her house twice now.......  she way over priced it the first time and now hitting inflation......

Her realtor tell her how much she can get but tbh its a small buyer pool since her whole back yard is a pool - yes literally almost the whole yard and she hasnt fixed anything.

Id say it needs 50K of work ......

 
East Bay still pretty hot in spots. Interest rates a concern? Yeah, here and there ,but people are still buying all cash.

This $2.4 million modest house, we understand sold for $3.8.

If/When the country returns to pre-COVID levels, the Bay Area will probably still be nuts. Even the 2008 Great Recession was modest in comparison. But I'll tell you, there are places less desirable around here than they were not that long ago (I'm looking at you, Oakland).

 
Punxsutawney Phil said:
Near me, listed for $624k sold for $780k

https://www.zillow.com/homedetails/2108-W-Fore-Dr-Tampa-FL-33612/44906283_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
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Also in Tampa, the mania phase seems to have ended. Homes on the water in my 'hood were selling for $240 - $260 per sf (up from $200 in mid-2021). A bunch of inventory has hit the market in the last few weeks over $300 per sf and they're having to cut prices. Nothing new has gone pending in 2-3 weeks. 

 
Captain Cranks said:
Also in Tampa, the mania phase seems to have ended. Homes on the water in my 'hood were selling for $240 - $260 per sf (up from $200 in mid-2021). A bunch of inventory has hit the market in the last few weeks over $300 per sf and they're having to cut prices. Nothing new has gone pending in 2-3 weeks. 
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Yup. Seeing the same thing here in Riverview.

 
A thought came to mind while I was sipping on some beverages this weekend. It's probably a stupid thought, so don't hesitate to say so - not that any of you would hold back anyway. This would not be an imminent move, but rather something to ponder a year or so from now - if interest rates regress to something closer to what they were a few months ago and the housing market morphs from ####### ridiculous to just plain expensive. 

If I can justify the time commitment would it make sense to rent our current house and buy high elsewhere? We bought this as a foreclosure in 2008, so to say our buy was dirt cheap would be a vast under statement. The plan all along was to move a year or two ago once our outstanding mortgage dipped below $20K, but then the explosion happened and now we're in a holding pattern. Our house is a little small for a family of 5 and as the kids ages increase from 6, 9, and 12 it'll keep getting smaller too. We have a large suburban yard so this time of year it doesn't feel too compressed, but winter's a different story.

Anyway, beyond equity we have plenty liquidity available to float two mortgage payments short term until rent revenue begins accumulating and my rough math indicates we'd need just 6-7 months rent to cover our existing mortgage. I figure by keeping our existing house that'd serve as a safety net should the housing market regress. It'd offer flexibility for us to adapt to whatever curveballs the future market throws at us - i.e. can more easily justify taking a loss with the new buy if we have a no mortgage situation that's a good size for 2-3 of us (but not 5!) to return to.

I'm also sure there are items I'm not accounting for and there may be a better way for us to leverage this situation to our advantage anyway.

 
MAC_32 said:
A thought came to mind while I was sipping on some beverages this weekend. It's probably a stupid thought, so don't hesitate to say so - not that any of you would hold back anyway. This would not be an imminent move, but rather something to ponder a year or so from now - if interest rates regress to something closer to what they were a few months ago and the housing market morphs from ####### ridiculous to just plain expensive. 

If I can justify the time commitment would it make sense to rent our current house and buy high elsewhere? We bought this as a foreclosure in 2008, so to say our buy was dirt cheap would be a vast under statement. The plan all along was to move a year or two ago once our outstanding mortgage dipped below $20K, but then the explosion happened and now we're in a holding pattern. Our house is a little small for a family of 5 and as the kids ages increase from 6, 9, and 12 it'll keep getting smaller too. We have a large suburban yard so this time of year it doesn't feel too compressed, but winter's a different story.

Anyway, beyond equity we have plenty liquidity available to float two mortgage payments short term until rent revenue begins accumulating and my rough math indicates we'd need just 6-7 months rent to cover our existing mortgage. I figure by keeping our existing house that'd serve as a safety net should the housing market regress. It'd offer flexibility for us to adapt to whatever curveballs the future market throws at us - i.e. can more easily justify taking a loss with the new buy if we have a no mortgage situation that's a good size for 2-3 of us (but not 5!) to return to.

I'm also sure there are items I'm not accounting for and there may be a better way for us to leverage this situation to our advantage anyway.
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Here are the only variables I'd be concerned with. 1. Are you comfortable buying a new house at today's prices and today's mortgage rates? 2. Can you comfortably say you can rent out the current house at levels equal to or above your mortgage payment if the market turns south. I'd want to play it safe and assume rents take a dip.

 
Captain Cranks said:
Here are the only variables I'd be concerned with. 1. Are you comfortable buying a new house at today's prices and today's mortgage rates? 2. Can you comfortably say you can rent out the current house at levels equal to or above your mortgage payment if the market turns south. I'd want to play it safe and assume rents take a dip.
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Today's prices and rates? No. If the 15% over asking all cash no inspection market goes away and interest rates fall back to 4% then yes. If we can get in under $400K that'd be awesome, but I think we'll have to go north of that. That's the scenario I'm preparing for anyway. We aren't bothering if the market doesn't change. I'll just get a larger shed and hide out there all winter.  :lol:  We like this house, we'd just like it a whole lot more if it were 1800 sq ft instead of 1200 and there isn't a good way to add-on without demo'ing part of it (which we want no part of).

I am very comfortable saying no matter what happens in the housing market that we'll be able to rent this for > our current mortgage though. We bought it for $85K. I don't think it'd fetch $200K right now, but it'd probably be close. We pay $750-800/month and rent's never been anywhere near that low since the year after we were in. 

 
MAC_32 said:
Today's prices and rates? No. If the 15% over asking all cash no inspection market goes away and interest rates fall back to 4% then yes. If we can get in under $400K that'd be awesome, but I think we'll have to go north of that. That's the scenario I'm preparing for anyway. We aren't bothering if the market doesn't change. I'll just get a larger shed and hide out there all winter.  :lol:  We like this house, we'd just like it a whole lot more if it were 1800 sq ft instead of 1200 and there isn't a good way to add-on without demo'ing part of it (which we want no part of).

I am very comfortable saying no matter what happens in the housing market that we'll be able to rent this for > our current mortgage though. We bought it for $85K. I don't think it'd fetch $200K right now, but it'd probably be close. We pay $750-800/month and rent's never been anywhere near that low since the year after we were in. 
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If you are in any sort of reasonably ok area near Cleveland, you can probably get 1500 a month in rent for a house like you described you have.  

 
Captain Cranks said:
Also in Tampa, the mania phase seems to have ended. Homes on the water in my 'hood were selling for $240 - $260 per sf (up from $200 in mid-2021). A bunch of inventory has hit the market in the last few weeks over $300 per sf and they're having to cut prices. Nothing new has gone pending in 2-3 weeks. 
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Yeah. I've been noticing things slowing a bit in Charlotte too. Anyone that pushes the envelope over $350 per sqft in this neighborhood seems to be getting a haircut.

 
MAC_32 said:
Today's prices and rates? No. If the 15% over asking all cash no inspection market goes away and interest rates fall back to 4% then yes. If we can get in under $400K that'd be awesome, but I think we'll have to go north of that. That's the scenario I'm preparing for anyway. We aren't bothering if the market doesn't change. I'll just get a larger shed and hide out there all winter.  :lol:  We like this house, we'd just like it a whole lot more if it were 1800 sq ft instead of 1200 and there isn't a good way to add-on without demo'ing part of it (which we want no part of).

I am very comfortable saying no matter what happens in the housing market that we'll be able to rent this for > our current mortgage though. We bought it for $85K. I don't think it'd fetch $200K right now, but it'd probably be close. We pay $750-800/month and rent's never been anywhere near that low since the year after we were in. 
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I have several clients doing something like this.  They buy a house and live in it 1-2 years. Then they buy the next one and rent out the one they were living in. Always start out with $300-500/mo cash flow that keep going up every year. The cool thing is that when they move out, they know everything about that home. Should be no surprises down the road.

5% rates?  If it makes sense and you can afford it, then do it.  I started when rates were 7-8% and breaking even to start was the goal. Maybe look into a 7-yr arm to start that you can refi in a few years before you move out.  The cool thing is you get to keep the lower residential loan rates the entire time on all the properties and never have to pay investor rates.

My clients all have a goal of doing this for 10 years and getting at least 5 houses. They will all have $2-3 mil in equity in 20-30 years.

I have one client that is a vet. He gets in for zero down. Then refi's to a normal conventional loan in two years. Then goes out and gets another zero down home to live in as his VA benefit resets. He has three currently, and sold one Jan 2021 and netted $190k and started a junk removal service and also does local moves with the proceeds and he's killing it. He left his $38k/yr job.

 
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CGRdrJoe said:
man, i’m thinking of moving in a year and really tempted to get out of here now for a profit rather than wait and chance a total collapse here in marin. 
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That's not gonna happen.  Inventory is limited by geography and NIMBYism in Marin as much as anywhere, and the Bay Area isn't going to run out of SF tech and finance people that age into wanting to move out of The City and into the burbs.

 
Desert_Power said:
Yeah. I've been noticing things slowing a bit in Charlotte too. Anyone that pushes the envelope over $350 per sqft in this neighborhood seems to be getting a haircut.
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Wouldn't call it a haircut.  More of a make me move price.  Seeing some go on and off the market to see if they can get a price they need to move or build. 

 
culdeus said:
Wouldn't call it a haircut.  More of a make me move price.  Seeing some go on and off the market to see if they can get a price they need to move or build. 
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Have seen that too, particularly on teardowns. One of my neighbors had to drop their price $75k and schedule an open house so I think they were caught out. 

 
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Desert_Power said:
Have seen that too, particularly on teardowns. One of my neighbors had to drop their price $75k and schedule an open house so I think they were caught out. 
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The worst situation I've heard is someone bought a lot for a teardown then couldn't get the new construction loan approved because costs went up so much.  Then tried to unload the lot and couldn't.  It's on my street so now they seem to be trying to do a thin flip.  The house is disgusting on the inside though.  Hadn't been touched in 20 years.  

 
Dr_Zaius said:
I'm not seeing it yet personally, but fortune article suggests prices have peaked.
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“The Fed won't be appeased with simply slowing home sales, Zandi says. It will also want home construction to slow. Elevated home construction, which this year hit its highest level since 2006, has put upward pressure on everything from lumber to steel to kitchen tables. If the housing market heats back up before inflation has been tamed, Zandi says, the Fed would simply push mortgage rates even higher. Already, over the past five months the average 30-year fixed mortgage rate has spiked from 3.11% to 5.1%.”
 

Seems to counter his argument on prices dropping by much. Housing supply is still super tight, cutting new construction and continuing to raise rates will only constrict supply even more IMO. There are definitely mania areas/markets that are going up unsustainably and that needs to stop/come back down, but manipulating these items he discussed does nothing to solve the long term housing supply problems in most parts of the country.

 
Inventory is increasing. 43% increase month over month. That actual data is in line with what I have been picking up anecdotally and among the industry chatter. 

 
Dr_Zaius said:
I'm not seeing it yet personally, but fortune article suggests prices have peaked.
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RE is local, local, local.... there are always national trends but some markets will be hotter or colder depending on the a number of factors. I think peaked values is likely for the time being. I think we will see a bit of a minor correction before the recession numbers come rolling in, inflation is shown to be in check and they start to pump everything back up with lower rates. 

 
So, question for the group to help figure something out.

When we first moved here in 2008, we bought a house that we lived in for several years.  After moving, we couldn't sell it for anything more than we paid so we've been renting it for the last 7 years. It's our only rental property. We had a solid rate on the mortgage and were even able to refi last year (despite being an investment property) and currently have it at 3% on a 15 year fixed (14 years left).

Our current tenants who have been there for 4 years are moving in 3 months. I never previously considered selling the house because of the rate we had and the rent covers our mortgage. We don't really get a profit but we are basically getting the house paid for at this point by rentals. 

That said, with the current market, I started thinking maybe it's worthwhile selling at this point. What's the best way to figure out which option makes sense. 

1) Is it a certain amount over what we paid in 2008?

2) Is it a certain amount over the remaining balance of our mortgage (which is currently about half of what we paid)?

3) Do we factor the amount of rent we can take in?

I don't care much about being a landlord. It's a pretty easy property to maintain although it's approaching almost 20 years old and most everything in it is still original. It's not a big headache, but not having to worry about it would be a little bonus. 

Basically, if someone offered me double what we paid, I'd take it right now. But if we are talking 50% more, I'm not sure it's worth it. So I'm trying to figure out how to figure out which number makes  sense.

Thoughts?

 
gianmarco said:
So, question for the group to help figure something out.

When we first moved here in 2008, we bought a house that we lived in for several years.  After moving, we couldn't sell it for anything more than we paid so we've been renting it for the last 7 years. It's our only rental property. We had a solid rate on the mortgage and were even able to refi last year (despite being an investment property) and currently have it at 3% on a 15 year fixed (14 years left).

Our current tenants who have been there for 4 years are moving in 3 months. I never previously considered selling the house because of the rate we had and the rent covers our mortgage. We don't really get a profit but we are basically getting the house paid for at this point by rentals. 

That said, with the current market, I started thinking maybe it's worthwhile selling at this point. What's the best way to figure out which option makes sense. 

1) Is it a certain amount over what we paid in 2008?

2) Is it a certain amount over the remaining balance of our mortgage (which is currently about half of what we paid)?

3) Do we factor the amount of rent we can take in?

I don't care much about being a landlord. It's a pretty easy property to maintain although it's approaching almost 20 years old and most everything in it is still original. It's not a big headache, but not having to worry about it would be a little bonus. 

Basically, if someone offered me double what we paid, I'd take it right now. But if we are talking 50% more, I'm not sure it's worth it. So I'm trying to figure out how to figure out which number makes  sense.

Thoughts?
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The current markey value. 

You can get a CMA from a realtor for free (Comparative Market Analysis) which is a realtors version of an appraisal. Realtors will fall over themselves to do this for you. From there, they should have a pulse on what you may want to lust at as part of a strategy to get the best offer. 

From there in whether you want to or not... it depends. There are a ton of factors that are individual to each person and situation. 

 
Chadstroma said:
The current markey value. 

You can get a CMA from a realtor for free (Comparative Market Analysis) which is a realtors version of an appraisal. Realtors will fall over themselves to do this for you. From there, they should have a pulse on what you may want to lust at as part of a strategy to get the best offer. 

From there in whether you want to or not... it depends. There are a ton of factors that are individual to each person and situation. 
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Already talked to our realtor and I'm getting that.

The question is more about how to calculate the number to pull the trigger.

 
gianmarco said:
Already talked to our realtor and I'm getting that.

The question is more about how to calculate the number to pull the trigger.
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You can't go wrong selling now IMO.  Especially if you want to get rid of a headache and any potential future headaches.  

Invest the profit.  That investment might make you more long term than keeping the house anyway.  

Just my 2 cents.  I had two rentals, sold one last year for a good profit.  Still glad I sold it.

 
Chadstroma said:
Inventory is increasing. 43% increase month over month. That actual data is in line with what I have been picking up anecdotally and among the industry chatter. 
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Everything is relative. The sky is falling articles are already out there. For example, I read one article quoting that the share of homes having their price reduced increased from 6.2% last May to 10.5% this year, nearly doubled!! Sounds dire, yet that is still about 2/3rds of the average it was prior to the pandemic. Nationally, the inventory of homes actively for sale on a typical day in May increased by 8.0% over the past year, the first time active inventory has grown since June 2019. Sounds like a lot and is certainly a big change... until you realize that overall Active Inventory is still nearly 50% below pre-pandemic levels.

We're slowing from completely insane down to just normal sellers market. If it continues past that we will see, but there is still a massive shortage of houses overall even with demand starting to decline due to increasing interest rates.

 
gianmarco said:
Already talked to our realtor and I'm getting that.

The question is more about how to calculate the number to pull the trigger.
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I don't think there is such a thing.  Collect all the info you can and make a decision which works best for you.

Also talk to your CPA.  Find out what the tax hit would be.  Did you depreciate the home those 7 years?  

 
Buckna said:
Everything is relative. The sky is falling articles are already out there. For example, I read one article quoting that the share of homes having their price reduced increased from 6.2% last May to 10.5% this year, nearly doubled!! Sounds dire, yet that is still about 2/3rds of the average it was prior to the pandemic. Nationally, the inventory of homes actively for sale on a typical day in May increased by 8.0% over the past year, the first time active inventory has grown since June 2019. Sounds like a lot and is certainly a big change... until you realize that overall Active Inventory is still nearly 50% below pre-pandemic levels.

We're slowing from completely insane down to just normal sellers market. If it continues past that we will see, but there is still a massive shortage of houses overall even with demand starting to decline due to increasing interest rates.
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It it is like saying the car is going 80 mph slower now but not starting with it was at 200mph and 120mph is still pretty dang fast. 

 
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