OT: Housing Market

[Jeffreauxdawg]

Wowza. I think it was about a year ago we all really started noticing that housing was skyrocketing. Median home prices nationally are now over $400k and up 20% from a year ago. Goldman Sachs projects prices to increase 16% in 2022 while Fannie Mae says 8%. Either way, that's a handsome gain.

https://finance.yahoo.com/news/the-...-400-k-for-the-first-time-ever-182158249.html

If you have been on the fence about buying (first home or investment property.. Selling your existing and buying another is kind of a wash), I would think this winter will be a good time. It looks like next spring is going to get crazy again in a lot of markets.

 

[mcdawg22]

I was wondering how in the hell the average house price was 400k, then I remembered the pricing in the most populous state is absurd.

 

[She Mate Me]

Wowza. I think it was about a year ago we all really started noticing that housing was skyrocketing. Median home prices nationally are now over $400k and up 20% from a year ago. Goldman Sachs projects prices to increase 16% in 2022 while Fannie Mae says 8%. Either way, that's a handsome gain.

https://finance.yahoo.com/news/the-...-400-k-for-the-first-time-ever-182158249.html

If you have been on the fence about buying (first home or investment property.. Selling your existing and buying another is kind of a wash), I would think this winter will be a good time. It looks like next spring is going to get crazy again in a lot of markets.

ThIs May seem like a good thing, but I have a feeling it is a harbinger of very bad things that have been a long time developing. Like 50 years long.

 

[Cousin Jeffrey]

I bought my current house 2 years ago (DFW). My neighbor just sold his for 45% more per square foot than I paid for mine back in 2019.

It’s nuts out there.

 

[M R DAWGS]

It’s every market, not just the housing.

 

[ZombieKissinger]

Appreciated your advice a while back on this. We're closing in a couple weeks. We got something going $20k over listing, but $5k under appraisal, which is really unusual for our market. We just made our offer very clean and very fast (<2 days). There was another family competing with us for the house, and their offer came in at $65k over asking, but I think their financing was sketchy. I could tell the sellers wanted to move out quickly, so I didn't go any higher, and they went with ours.

 

[greenbean.sixpack]

Appreciated your advice a while back on this. We're closing in a couple weeks. We got something going $20k over listing, but $5k under appraisal, which is really unusual for our market. We just made our offer very clean and very fast (<2 days). There was another family competing with us for the house, and their offer came in at $65k over asking, but I think their financing was sketchyI could tell the sellers wanted to move out quickly, so I didn't go any higher, and they went with ours.

How many murders have take place in that house?

 

[ZombieKissinger]

Not sure but after today's posts, I can't wait to move in and murder some toilets

 

[Msubulldogfan1]

It’s a very unfortunate market imo. It’s basically eliminated first time/young home buyers from competing. That can’t be good long term for the market.

 

[aTotal360]

I put in an offer for a client of mine for $100k over on a $600K property and didn't get it.

In my market, if you aren't committing to $50K+ of appraisal gap coverage, you aren't getting selected. Market value is significantly outpacing what the bank thinks their worth. It's still not stopping any of my clients. With interest rates where they are, they don't give a ****.

 

[57stratdawg]

I think a part of this is a reallocation of value away from corporate facilities. A lot of our homes today serve as an office and living area. Makes sense that would be more valuable.

 

[IBleedMaroonDawg]

Appreciated your advice a while back on this. We're closing in a couple weeks. We got something going $20k over listing, but $5k under appraisal, which is really unusual for our market. We just made our offer very clean and very fast (<2 days). There was another family competing with us for the house, and their offer came in at $65k over asking, but I think their financing was sketchy. I could tell the sellers wanted to move out quickly, so I didn't go any higher, and they went with ours.

You're doing well at least compared to Austin which running a little higher and crazy the past year. For the first time in my life I bought right before the bubble burst a year ago. One year and I could sell and make a ridiculous profit for one year. My house increased about 27%. The influx of companies, one right after the other, coming to Austin to escape Californiskan and Covid cutting off the construction supplies made prices SPIKE and BIG offers over asking a common thing. I also picked one of the I'm still pinching myself because I also picked by chance one of the fastest growing areas for families and those tired of drum circles and demonstrations. If had one here it would be another shut down somehow killing the Mexican restaurants which is impossible.

 

[aTotal360]

And they are raising the conforming loan limits soon as well. It's going to get even harder.

 

[TrueMaroonGrind]

I bought my house last year and am thinking about refinancing. We could possibly cut 9 years off our loan for minimal monthly cost.

ETA: Looking at comps in the area our house has risen in value around 20-30% since we bought in June 2020

 

[Smoked Toag]

No one should be buying right now unless they absolutely have to. You stay put during these ridiculous highs. The thing will correct. Especially knowing the circumstances that are creating the high.

If anything, you refinance now. That’s it.

 

[ZombieKissinger]

I’m in the PNW and the city I’m in was ranked 5th in the country in a hottest market list earlier this year, but it doesn’t show up on most lists that I looked at today. I’m pretty happy with what we got. Lots of Californians making it tight here but I know that’s true of Texas as well

 

[Breazeweaze]

No one should be buying right now unless they absolutely have to. You stay put during these ridiculous highs. The thing will correct. Especially knowing the circumstances that are creating the high.

If anything, you refinance now. That’s it.

We struggled to find a home that we liked for a budget that we could easily afford. We ended up going well over our initial budget (but still affordable for us) and moved in early February 2021.

It was definitely a sellers market. Our house sold in less than 24 hours but then we were looking for a new home for 2 months. We were kind of picky though as we wanted this home to be our long-term place.

My thinking, which I believe still holds true, was that with so much money being pumped into the economy there is a large inflation risk therefore storing value in a physical asset like a nicer home was a good bet.

 

[IBleedMaroonDawg]

The Covid delay of materials made all of us see higher house prices. In your area, if you have good employment you already have a great quality of life if you're not in downtown Portland or Seattle. You have a great climate, cost of living is okay, and quality of life coupled with a plethora of things to do in your spare time. I've never been but it's one of the areas I want to visit and wouldn't mind living in if here didn't live in Texas... the other is Tennessee.

I'm not gonna get started on the Californians.

 

[Jeffreauxdawg]

Good advice Goat.** Same **** was being said this time last year. By some of you because I said so reasoning types. I just closed on a house we contracted to build last September. The day we closed I could have sold it for 50% more than I paid for it. Damn glad I didn't listen back then.


The worst thing that will happen in most markets is a slowing or flattening of prices. If you live in are of declining growth, then prices will decrease at some point when interest rates move up significantly. But most places, will see strong appreciation for years to come. To balance supply and demand overnight we would need to build 5 million single family homes... And then continue the pace of around a million we can currently build.

Where are you going to get the labor, materials, or land to build these things? The faster we build, the higher the price goes.

Goldman Sachs analyst says 16% appreciation next year nationwide. Goat says hold tight. It's going to crash. I guess because people can't find work and wages are falling? Maybe because nobody has any savings? Maybe because banks are giving out loans to unqualified buyers?

Give us a reason other than prices are high?

How this works is I bought my house for $300k 4 years ago. I can sell it for $500K today. And buy one for $600k at the same monthly payment. Because I put $300k down. Rising tides lift all boats. We over built from 03-07. And we underbuilt from 08-20. It will take at least a decade to catch up.

 

[Trojanbulldog19]

Appreciated your advice a while back on this. We're closing in a couple weeks. We got something going $20k over listing, but $5k under appraisal, which is really unusual for our market. We just made our offer very clean and very fast (<2 days). There was another family competing with us for the house, and their offer came in at $65k over asking, but I think their financing was sketchy. I could tell the sellers wanted to move out quickly, so I didn't go any higher, and they went with ours.

We went 7 over and got our new house and sold our other house 10 over asking. So that worked out ok.

 

[TrueMaroonGrind]

Good advice Goat.** Same **** was being said this time last year. By some of you because I said so reasoning types. I just closed on a house we contracted to build last September. The day we closed I could have sold it for 50% more than I paid for it. Damn glad I didn't listen back then.


The worst thing that will happen in most markets is a slowing or flattening of prices. If you live in are of declining growth, then prices will decrease at some point when interest rates move up significantly. But most places, will see strong appreciation for years to come. To balance supply and demand overnight we would need to build 5 million single family homes... And then continue the pace of around a million we can currently build.

Where are you going to get the labor, materials, or land to build these things? The faster we build, the higher the price goes.

Goldman Sachs analyst says 16% appreciation next year nationwide. Goat says hold tight. It's going to crash. I guess because people can't find work and wages are falling? Maybe because nobody has any savings? Maybe because banks are giving out loans to unqualified buyers?

Give us a reason other than prices are high?

How this works is I bought my house for $300k 4 years ago. I can sell it for $500K today. And buy one for $600k at the same monthly payment. Because I put $300k down. Rising tides lift all boats. We over built from 03-07. And we underbuilt from 08-20. It will take at least a decade to catch up.

I honestly thought I was hurting my long term financial future buying a house in 2020. I did think prices would come back down and that it was purely spiking because of covid, but as you pointed out America underbuilt after the crash and now it is causing a massive shortage. It turns out buy last year was one of the best decisions we’ve ever made. It’s not flattening out for a long time. I’m not exaggerating when I say that we saved 100K+ buying last year instead of in 2021 or 2022

 

[PineGroveBully]

View attachment 22595

 

[HWY51dog]

First time home buyers are about out of luck in Desoto County. Hedge funds are putting Cash offers 15,000 over on anything under 300 with a garage. Turning them all into rentals.

Sold my personal house last year and it’s taken me over a year to find land to build in Hernando. Finally close in December.

 

[Mobile Bay]

And here I sit in a paid for house, neighborhood going rental and all that implies, and no idea what to do next.

 

[dudehead]

And here I sit in a paid for house, neighborhood going rental and all that implies, and no idea what to do next.

Why is your neighborhood going rental?

 

[DesotoCountyDawg]

It really has gotten absurd. All the houses in our subdivision are on the market 5 days tops and most of the time they have competing offers.

 

[HWY51dog]

If you have neighborhood covenants, get them changed. You can keep them from buying more. Several neighborhoods have done that.

 

[Jeffreauxdawg]

Good move. It seemed silly at the time, but the writing was on the wall. I was basing my forecast last year on housing related macroeconomic factors. Figured it would be a 1-2 year run and 2021 would be a once in a lifetime opportunity.

Turns out the inflationary pressures that we saw in housing last fall are affecting all of the economy now. There is no excess labor to dump into the housing related industries to increase production. Labor prices will climb. Material prices will too. Some markets will have better appreciation in 2022 than 2021.

I encourage any doubters to read this. As you read the entire article think about one thing that makes me extra bullish on housing for the next 5-10 years. We have been counting on all of the boomers to age out of Single Family homes and go into assisted living or senior communities. After Covid how many millions of them are going to say 17 that and stay in their houses as long as possible? And how many people that lived in a cramped in city apartment, will never return?

https://www.gsam.com/content/gsam/us/en/advisors/market-insights/gsam-connect/2021/US_Housing_Market_Hot_or_Not.html

 

[HWY51dog]

Desoto has an out of state hedge fund buying up everything under 300 unless you have neighborhood covenants.

 

[Jeffreauxdawg]

I will. They suck. It's not about politics either. ******** with a prius or ******** with a closet full of automatic rifles. They are all rude, inconsiderate, low moral character, littering bastards... And good luck borrowing a tool from any of them they think a screwdriver is peanut butter whiskey.**

But they're damn good for property value.

 

[DesotoCountyDawg]

Ours voted to allow rentals to continue a couple of years ago. Dumbest thing I’ve ever seen.

 

[Jeffreauxdawg]

FYI. If you want to know when I am looking at exiting the housing bull market? It's when 3D printed homes gain real traction. I first gained interest in these nearly 10 years ago. They will cut lots of cost and time out of construction.

Expect this to be a battleground over the next 10 years, but it will be a major disrupter and cut the cost of homes in half. Stick built homes will be a luxury item in the future. Only higher end neighborhoods will have them, with covenants of no printed houses of course.

https://www.kxan.com/news/local/austin/100-3-d-printed-homes-coming-to-austin-area-next-year/

If anyone knows how I can invest in this tech, please advise.**

 

[Leeshouldveflanked]

I’m at the other end of the spectrum. I’m ready to downsize. Got paid for 3400 square foot house in grade A public school district 20 miles from Oxford and 18 acres of land… my wife and I are almost empty nesters and want to downsize to a 2 bed 2 bath and put some cash in my pocket. Is now a good time to cash out?

 

[aTotal360]

Not really. I have several clients that are empty nesters and want to downsize and they can't. Even though they can get a mint for their current (older) home, smaller newer construction in a nice area cost just as much or more as their old home. It really is a push.

The real question isn't financial, it's qualitative. Do you think it would improve your life? If so, do it.

 

[Jeffreauxdawg]

I would expect property values that close to Oxford to go to zero any day now. Sell, sell, sell.*

 

[horshack.sixpack]

Housing will level out at some point but it isn’t going back to pre-pandemic lows, primarily because you aren’t likely to see loan default rates at that level this time around so inventory will stay in line.

 

[dog12]

And here I sit in a paid for house, neighborhood going rental and all that implies, and no idea what to do next.

Your neighborhood going rental is not a good thing. (my opinion)

I don't want to live around transient neighbors that are constantly moving in and out. (Of course, you should evaluate the circumstances present in YOUR particular neighborhood and make the decision that is best for you.)

One option: sell your house this coming spring (the market should be hot) and buy something a little further out (or, much further out, depending on your circumstances).

I own two rental properties in our area, and I'm seriously considering selling one of them this spring to take advantage of what I believe will be a very hot market. My plan is to use the money from that sale to buy 2 rental properties further out.

 

[Jeffreauxdawg]

Honestly my take is more on the national average and owning vs not owning real estate right now. Rural areas will probably experience less dramatic swings than say Nashville or Austin, but as long as it's not an area people are fleeing from, you will get some appreciation during this inflationary period.

If you sell a house for $400k and buy one for $275k, you will still get some appreciation, just not as much. But that's up to you. You could look at investing the surplus into a rental property and actually owning more RE, or just taking it easy and putting your money to work somewhere else.

The only bad move in my opinion would be cashing out and renting because you think property values are going to crash soon like goat suggested. That's highly unlikely anytime soon.

 

[dog12]

ThIs May seem like a good thing, but I have a feeling it is a harbinger of very bad things that have been a long time developing. Like 50 years long.

Such as . . . what?

Can you explain?

 

[oxfordrebel22]

I bought my current house 2 years ago (DFW). My neighbor just sold his for 45% more per square foot than I paid for mine back in 2019.

It’s nuts out there.

I can’t even imagine. I know people that have tried to buy in Nashville and houses are selling for 20-30% over asking price. It’s insane.