The Housing Market

[TDIRunner | 2,742]

41 minutes ago, arch_8ngel said:

Last time I checked, there are lots of high schools in lower cost of living areas than DC-metro    

I'm assuming he is referring to the commute.  I recently found a perfect house that I would love to buy out in the middle of nowhere.  Lots of land and outbuildings, which is my dream.  I could live there because I work remotely now, but it would be a 50 minute commute (each way) for my wife to get to the school she teaches from.  I drove a commute like that for over a decade and I would never want to do that to my wife.  So a house like this will just have to be a retirement dream for us.  

[a3quit4s | 4,102]

1 hour ago, arch_8ngel said:

Last time I checked, there are lots of high schools in lower cost of living areas than DC-metro    

Yeah I've brought it up to her but she doesn't really handle change well hahaha

[Pendragonx | 117]

insanity.. seems like the exact opposite of the crash back in '08

[arch_8ngel | 1,597]

1 hour ago, TDIRunner said:

I'm assuming he is referring to the commute.  I recently found a perfect house that I would love to buy out in the middle of nowhere.  Lots of land and outbuildings, which is my dream.  I could live there because I work remotely now, but it would be a 50 minute commute (each way) for my wife to get to the school she teaches from.  I drove a commute like that for over a decade and I would never want to do that to my wife.  So a house like this will just have to be a retirement dream for us.  

My point was -- there are almost certainly schools with open positions within reasonable commutes of cheaper places, if one was so inclined.

[arch_8ngel | 1,597]

36 minutes ago, Pendragonx said:

insanity.. seems like the exact opposite of the crash back in '08

?

Seems like the lead-up to the '08 crash on steroids.

[TDIRunner | 2,742]

11 minutes ago, arch_8ngel said:

My point was -- there are almost certainly schools with open positions within reasonable commutes of cheaper places, if one was so inclined.

But the opportunities are fewer and further between.  I'm not sure what he meant by "country," but when you live in the "country" out here, one single school will act as the grade school and high school for 5 or 6 neighboring towns.

[TDIRunner | 2,742]

13 minutes ago, arch_8ngel said:

?

Seems like the lead-up to the '08 crash on steroids.

I'm not saying there won't be a crash, and I'm certainly not saying there won't be an eventual drop in prices, but the biggest difference I'm seeing this time around is that there are a lot more cash buyers, and those who are financing are having trouble getting the appraisal to match the offer on the house because so many people are overpaying.  In other words, it's slightly more difficult for people to buy more house than they can afford.  When the prices fall, there SHOULD BE fewer people upside down on their mortgages compared to 2008.  

[Code Monkey | 2,011]

My listing went live an hour ago. My house is now officially for sale.

[MrWunderful | 2,927]

1 hour ago, arch_8ngel said:

?

Seems like the lead-up to the '08 crash on steroids.

I get it and agree to some extent. But are there people getting crazy loans like back then?

 

I knew a guy that tried to sell real estate back then with Intero (which their whole “training” program was basically a scam in my opinion) and one of his only sales was of a single family home where basically 2 and a half families all put their earnings together to  afford the mortgage on a house, and they did it low documentation? Or something it felt super sketchy and risky when he was telling me about it. 
 

Anyways I thought they were just giving away crazy loans to people who should have never gotten them. Is that still happening? Theres a lot of cash offers around here from what I hear

[a3quit4s | 4,102]

1 hour ago, Code Monkey said:

My listing went live an hour ago. My house is now officially for sale.

Does it come with games?

[DoctorEncore | 3,691]

My wife and I capitalized on the big run up in prices perfectly. At the start of this madness, our previous house sold for $30k above asking and we bought our current house at asking. In one year since buying, our house has increased in value by $100k. Nailed it!

I still talk to the realtor occasionally and she says this is the craziest market she's ever seen. 

[Californication | 1,477]

24 minutes ago, MrWunderful said:

I get it and agree to some extent. But are there people getting crazy loans like back then?

 

I knew a guy that tried to sell real estate back then with Intero (which their whole “training” program was basically a scam in my opinion) and one of his only sales was of a single family home where basically 2 and a half families all put their earnings together to  afford the mortgage on a house, and they did it low documentation? Or something it felt super sketchy and risky when he was telling me about it. 
 

Anyways I thought they were just giving away crazy loans to people who should have never gotten them. Is that still happening? Theres a lot of cash offers around here from what I hear

It's not just families. Hedge funds are buying up property hence cash.

[arch_8ngel | 1,597]

3 hours ago, TDIRunner said:

I'm not saying there won't be a crash, and I'm certainly not saying there won't be an eventual drop in prices, but the biggest difference I'm seeing this time around is that there are a lot more cash buyers, and those who are financing are having trouble getting the appraisal to match the offer on the house because so many people are overpaying.  In other words, it's slightly more difficult for people to buy more house than they can afford.  When the prices fall, there SHOULD BE fewer people upside down on their mortgages compared to 2008.  

While the number of cash buyers is way higher -- the real question in a crash, is whether those people are turning around and refinancing immediately (i.e. end up massively underwater in a crash, no different than '08).

I haven't seen any stats on that, but I have a hard time believing these people are buying in cash and staying 100% equity rather than refinancing.

[arch_8ngel | 1,597]

1 hour ago, Californication said:

It's not just families. Hedge funds are buying up property hence cash.

See my post above -- it isn't clear that they are buying in cash and STAYING fully bought-in.

 

The point of a "cash purchase" is that it is guaranteed to the seller that the deal with close.

There is no prohibition on the buyer then turning around, post-deal, and pumping up the leverage as if they had a mortgage in the first place.

And at current interest rates, they'd be pretty dumb to not maximize their leverage.

[phart010 | 1,707]

2 hours ago, Californication said:

It's not just families. Hedge funds are buying up property hence cash.

This it it. Hedge funds. As others have said they are probably also financing the homes at low interest after they are acquired so their cash isn’t tied up in equity. If there’s a lot of inflation, then all the additional money washes away at the debt.

[TDIRunner | 2,742]

1 hour ago, arch_8ngel said:

While the number of cash buyers is way higher -- the real question in a crash, is whether those people are turning around and refinancing immediately (i.e. end up massively underwater in a crash, no different than '08).

I haven't seen any stats on that, but I have a hard time believing these people are buying in cash and staying 100% equity rather than refinancing.

In that instance, you will still run into the appraisal issue if you are financing 100%.  It's still harder this time around to finance more than the house is worth.  That doesn't mean it isn't happening at all, but at least there are some checks in place to make it more difficult..... for now.

[avatar! | 1,819]

BlackRock Is Not Ruining the U.S. Housing Market

The real villain isn’t a faceless Wall Street Goliath; it’s your neighbors and local governments stopping the construction of new units.

https://www.theatlantic.com/ideas/archive/2021/06/blackrock-ruining-us-housing-market/619224/

Rental-home companies own less than half of one percent of all housing, even in states such as Texas, where they were actively buying up foreclosed properties after the Great Recession. Their recent buying has been small compared with the overall market.

Far worse than corporations taking a few thousand units off the market for owners are the governments and noisy NIMBYish residents taking millions of units off the market for owners and renters alike—by blocking construction projects in the past few decades. (California alone has an estimated shortage of 3 million housing units.) From New York to California, deep-blue cities and states have amassed a pitiful record of blocking housing construction and failing to meet rising demand with adequate supply. Many of the people tweeting about BlackRock are represented by city councils and state governments, or are surrounded by zoning laws and local ordinances that make home construction something between onerous and impossible.

[phart010 | 1,707]

49 minutes ago, avatar! said:

BlackRock Is Not Ruining the U.S. Housing Market

The real villain isn’t a faceless Wall Street Goliath; it’s your neighbors and local governments stopping the construction of new units.

https://www.theatlantic.com/ideas/archive/2021/06/blackrock-ruining-us-housing-market/619224/

Rental-home companies own less than half of one percent of all housing, even in states such as Texas, where they were actively buying up foreclosed properties after the Great Recession. Their recent buying has been small compared with the overall market.

Far worse than corporations taking a few thousand units off the market for owners are the governments and noisy NIMBYish residents taking millions of units off the market for owners and renters alike—by blocking construction projects in the past few decades. (California alone has an estimated shortage of 3 million housing units.) From New York to California, deep-blue cities and states have amassed a pitiful record of blocking housing construction and failing to meet rising demand with adequate supply. Many of the people tweeting about BlackRock are represented by city councils and state governments, or are surrounded by zoning laws and local ordinances that make home construction something between onerous and impossible.

This story brought to you in part by our sponsor

[spacepup | 2,405]

It has been a very interesting market for sure.  

I'm currently in the process of trying to sell my house and buy another.  The difficult part has been finding (and acquiring) a new house.  I've now made three offers on houses, and lost each of them.  I offered above asking for each one, to the tune of 20K, 30K, and 35K, respectively.

New houses on the market are in short supply, and when one pops up, people flock to it like crazy and get desperate.  I'm hopeful that I'll be able to find one that works (and get it!) - just have to be patient and keep at it.  

I do feel bad for first-time homebuyers, as it is extremely difficult right now for them.  And while it's easy to say "oh, just wait" - when you are someone who has been cramped in an apartment and ready to buy a house and make the next step in life, it's hard to just wait it out.  

Good luck to everyone out there trying to navigate this market - it's definitely a bit wacky!

[SailorScoutMandy | 782]

It's so annoying. Even here the prices are going up, up, up. We are stuck in an apartment and the rent goes up each year as well. Makes it a bitch to try and save for a house, just to see that day get pushed back. There is no way we can compete in this market. 

 

Too bad the house we tried to buy in 2017 fell through. Haha

 

I just hope this really calms down soon. 

 

[Generic | 215]

My wife and I are in the middle of purchasing a home (new construction). We got locked in at a purchase price last year in September. Since then, the value of our home has gone up and it hasn’t even been completed yet. It’s supposed to be finished by the end of this month. 
 

The builder is probably not making much money from our purchase especially since the cost of lumber is skyrocketing. The builder even offered to buy us out.

[VGCollectaholic | 111]

I'm in the NYC metro area (Fairfield County, CT) and have been house hunting for about a year.  This wasn't a reaction to COVID, it was just the poor luck of my down payment liquidity timeline and so Q2-3 2020 had been my plan for a couple years prior.  Poor timing indeed.  

I'm looking primarily in smaller towns in my area, where all of the properties are relative large (for being in a "town", 2-3 acres) with lots of privacy.  That has made this area a hotbed for people leaving NYC itself.  Every open house I go to has 12-20 cars and they all have NY plates.

Interestingly though, in the past 2-3 weeks the frenzy does indeed seem to be starting to slow.  Where literally everything on the market would sell in days (a week tops) for well over asking price, I am not starting to see listings sit on the market a bit.   I even got a bunch of "price reduction" alerts from my Realtor.com app the past couple days.

The stats seem to be backing up my anecdotal observations too.  The number of new mortgage applications being filed nationwide (the US MBA Purchase Index) has plummeted in the past month.  In fact, it's now basically back down to the level that it was in 2018-2019 before COVID.   Here's the link if anyone's interested.

So perhaps the tide is turning.

[Californication | 1,477]

You guys are looking for houses and I'd be content if I could find a car at a decent price. Lol. Fuck me if I can't find something decent for 20K cash.

Edited June 19, 2021 by Californication

[DoctorEncore | 3,691]

1 hour ago, VGCollectaholic said:

I'm in the NYC metro area (Fairfield County, CT) and have been house hunting for about a year.  This wasn't a reaction to COVID, it was just the poor luck of my down payment liquidity timeline and so Q2-3 2020 had been my plan for a couple years prior.  Poor timing indeed.  

I'm looking primarily in smaller towns in my area, where all of the properties are relative large (for being in a "town", 2-3 acres) with lots of privacy.  That has made this area a hotbed for people leaving NYC itself.  Every open house I go to has 12-20 cars and they all have NY plates.

Interestingly though, in the past 2-3 weeks the frenzy does indeed seem to be starting to slow.  Where literally everything on the market would sell in days (a week tops) for well over asking price, I am not starting to see listings sit on the market a bit.   I even got a bunch of "price reduction" alerts from my Realtor.com app the past couple days.

The stats seem to be backing up my anecdotal observations too.  The number of new mortgage applications being filed nationwide (the US MBA Purchase Index) has plummeted in the past month.  In fact, it's now basically back down to the level that it was in 2018-2019 before COVID.   Here's the link if anyone's interested.

So perhaps the tide is turning.

I've heard this as well. The local market in my area is still insane, but nationwide it's definitely slowing.

[Code Monkey | 2,011]

23 hours ago, a3quit4s said:

Does it come with games?

I'd have to double the sale price.