Another article showing concern in the housing market- yet the author may have lacked critical thinking

[GON]

Here either. Following the normal supply / demand curve - down to the right. When Prices and rates are high, demand is low.

Not disputing your or @walterjay observations on the market.

We closed on a home last AUG 2024, and paid $30k USD above listing price, waived inspection, and waived appraisal. Not sure we would have been able to buy the home with paying above listing price and the waivers. This is an interim home for us, although it may end up being a permanent home.

We are looking for a second home at this time. We are looking primarily in South Dakota, Montana, and Idaho, but also search numerous other states. Essentially little to nothing for sale, unless we want to grossly overpay for a poorly designed home. We even started looking at lots/ land and build a home as an option, very little land for sale.

My observations of the market continue to show that a nicely built home that is appropriately updated and priced at the same square foot price at other homes in the subdivision, will go under contract 24 hours after being listed. I don't care if the home is in Ohio or Arizona or Florida. If someone is selling a Dodge Hornet and expects to get the same price a Toyota RAV4 gets, yes, the Dodge Hornet Seller will find it challenging to find a buyer.

 

[SC Maintenance]

Not disputing your or @walterjay observations on the market.

We closed on a home last AUG 2024, and paid $30k USD above listing price, waived inspection, and waived appraisal. Not sure we would have been able to buy the home with paying above listing price and the waivers. This is an interim home for us, although it may end up being a permanent home.

We are looking for a second home at this time. We are looking primarily in South Dakota, Montana, and Idaho, but also search numerous other states. Essentially little to nothing for sale, unless we want to grossly overpay for a poorly designed home. We even started looking at lots/ land and build a home as an option, very little land for sale.

My observations of the market continue to show that a nicely built home that is appropriately updated and priced at the same square foot price at other homes in the subdivision, will go under contract 24 hours after being listed. I don't care if the home is in Ohio or Arizona or Florida. If someone is selling a Dodge Hornet and expects to get the same price a Toyota RAV4 gets, yes, the Dodge Hornet Seller will find it challenging to find a buyer.

I am sure your right, and all real estate markets are local. So comparing national trends to any local market is a fools errand.

However even on a national level its hard to get real estate data. I believe the real estate industry does this on purpose.

September had the lowest number of resale closures since 1999, and that is not adjusted for population. If there were a huge demand at these price levels, the flippers would upgrade all these lousy homes that won't sell.

If there was demand, the builders would build more. There are massive profits in building homes currently. But new construction has been flat for years.

Case Shiller is pretty accurate, but it does not include condo, co-op or new construction. There are very good technical reasons for this, but it doesn't reflect the whole market.

So we sit on the left side of the supply demand curve - with high prices and low volume.

Back to local, my master planned neighborhood which in 2022 houses sold at ask or above without ever getting a sign, are stagnant and have been for a while. There are 2 or 3 huge developments in the area that are supposed to start but the builders are slow walking them, They literally have a couple guys doing site prep and have been for a year. I presume its to feign to the county that they are actually doing something - so they don't loose there permit.

I have no prediction on where it goes from here. I also would like to buy a second house, but like you I don't see anything I wish to buy at a price I wish to pay. Funding is not the issue.

At current levels most analysts call housing "frozen"

 

[GON]

I am sure your right, and all real estate markets are local. So comparing national trends to any local market is a fools errand.

However even on a national level its hard to get real estate data. I believe the real estate industry does this on purpose.

September had the lowest number of resale closures since 1999, and that is not adjusted for population. If there were a huge demand at these price levels, the flippers would upgrade all these lousy homes that won't sell.

If there was demand, the builders would build more. There are massive profits in building homes currently. But new construction has been flat for years.

Case Shiller is pretty accurate, but it does not include condo, co-op or new construction. There are very good technical reasons for this, but it doesn't reflect the whole market.

So we sit on the left side of the supply demand curve - with high prices and low volume.

Back to local, my master planned neighborhood which in 2022 houses sold at ask or above without ever getting a sign, are stagnant and have been for a while. There are 2 or 3 huge developments in the area that are supposed to start but the builders are slow walking them, They literally have a couple guys doing site prep and have been for a year. I presume its to feign to the county that they are actually doing something - so they don't loose there permit.

I have no prediction on where it goes from here. I also would like to buy a second house, but like you I don't see anything I wish to buy at a price I wish to pay. Funding is not the issue.

At current levels most analysts call housing "frozen"

View attachment 253204

Thanks for the post- good information and helpful.

You brought up flippers. We viewed hundreds of homes that were flipped. Not a single flipped home did we ever consider a deeper review, not a desire for a second look. I can tell a flipped home immediately. Flippers on a MACRO basis simply are putting lipstick on a pig, but the home is still a pig. I am aware some "gut to the studs" flips for seven/ eight figure homes might be done right, but those homes are the exception.

 

[SC Maintenance]

Thanks for the post- good information and helpful.

You brought up flippers. We viewed hundreds of homes that were flipped. Not a single flipped home did we ever consider a deeper review, not a desire for a second look. I can tell a flipped home immediately. Flippers on a MACRO basis simply are putting lipstick on a pig, but the home is still a pig. I am aware some "gut to the studs" flips for seven/ eight figure homes might be done right, but those homes are the exception.

The whole Census newsletter is here - if interested - published monthly. https://www.census.gov/construction/nrs/pdf/newressales.pdf

 

[Dave Hess]

Isn't the median LISTING price still less than $400,000 in the Orlando area?

Not that I know of, if so it’s in a terrible neighborhood with lots of crime.

 

[zzyzzx]

and paid $30k USD above listing price, waived inspection, and waived appraisal.

IMO, that makes you part of the problem. People need to stop doing this.

 

[alarmguy]

I would expect 2022 would be an explosive market simply because we were coming out of the Covid years and pent up demand as well as low interest rates.

We’re on the North Carolina side of the South Carolina border, and things still seem strong here. In fact, our National builder is out of homes to sell yet hundreds more planned, but they can’t get the roads in fast enough, the roads are now in, and I saw the utility companies laying the underground electric wires yesterday.

I have noticed after we purchased our home in 2023 that the new homes in 2024 have had many options stripped out of them. So pretty much they played games with the pricing.
they made the houses seem like they were on sale, but in reality, they were selling the homes stripped of options for the same price that we bought our home loaded with options. I guess it worked because right up until the last house was sold. People were fighting over it and now the others have to wait until next spring before foundation start getting put in.

Anyway, for you data nerds
https://www.nar.realtor/sites/default/files/2024-11/ehs-10-2024-summary-2024-11-21.pdf

Source https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

 

[GON]

IMO, that makes you part of the problem. People need to stop doing this.

The home was the first decent home we found in our price range, after a daily multi state search for over five years.

Regardless of what the charts imply, good homes go under contract 24-48 hours after being listed.

We are currently looking for a second home in a handful of states west of the Mississippi. Anytime I see a listed home that looks like a match, the same result is always returned ----- listing under contract.

See a home that is a right fit in today's market, don't be afraid to pay more than the listing price. That is something I would not have said if I hadn't researched homes daily for the past five plus years.

Good homes are simply not on the market more than 48 hours before going under contract.

 

[zzyzzx]

I have noticed after we purchased our home in 2023 that the new homes in 2024 have had many options stripped out of them. So pretty much they played games with the pricing.
they made the houses seem like they were on sale, but in reality, they were selling the homes stripped of options for the same price that we bought our home loaded with options.

What options were omitted in the newer houses?

 

[zzyzzx]

 

[GON]

 

[zzyzzx]

 

[BMWTurboDzl]

I was a first-time homebuyer in 1984. I purchased a new construction home in Royal Palm Beach Florida. 3 bedrooms, 2 bathrooms, 1040 square feet on a 1.25 acre lot with a pond. $54,000 USD. I suppose I could have got a better price, but I was young.

For those who are interested that would be $167,189 in 2024 dollars per the BLS.

https://www.bls.gov/data/inflation_calculator.htm

 

[SC Maintenance]

For those who are interested that would be $167,189 in 2024 dollars per the BLS.

https://www.bls.gov/data/inflation_calculator.htm

I'll take it for $167,189. Site unseen.

 

[BMWTurboDzl]

View attachment 254573

One reason for the increase is in the securitization of mortgages in the 1970's. The double edged sword of increasing liquidity also causing an increase in overall demand which pushed up prices.

 

[alarmguy]

What options were omitted in the newer houses?

Gourmet kitchen, this is a significant option as it includes all upgraded appliances, gas cooktop, separate dual wall oven integrated with a higher end microwave/convection oven, upgraded self closing cabinets upgraded dishwasher, stainless steel exhaust above the cooktop and updated bathroom cabinets, the cabinets and upgraded appliances are real sweet.

Other upgrades that are missing are a Home office with French doors and now an open space as a dining room. roof gutters, lighting, and fan package, an example would be all of our rooms have an extra switch for those who wish to have fan lights, no longer, another example is for example the room I’m sitting in right now has five LED ceiling lights, the new homes have one

No more electronics package, our house has Z wave (and wifi) controlled thermostat, security system, garage door, front door deadbolt and doorbell security camera, Moen automatic water cut off. ALL controlled by an app on your phone

Some of the homes no longer come with screened lanai

No more gas fireplaces (and it’s a good one vented with automatic blower) no more engineered wood throughout the house which previously included the bedrooms, the bedrooms in the new homes now have carpeting

Thank goodness for community restrictions as the outside of the house still has to have landscaping on all four sides with specific plantings and irrigation system. So the exterior of the homes are still nice.
The interiors are still nice just void of all the options, but the standard stuff isn’t that bad and if we didn’t know any better would have still purchased. Another example is the carpeting that they put in bedrooms instead of the engineered wood seems like a mid grade type of carpeting instead of a budget builder carpeting.

However, knowing what we do now, we are absolutely thrilled with what we have. Even more so as I remind myself making this list.

 

[Dave Hess]

The Gourmet kitchen, this is a significant option as it includes all upgraded appliances, gas cooktop, separate dual wall oven integrated with a higher end microwave/convection oven, upgraded self closing cabinets upgraded dishwasher, stainless steel exhaust above the cooktop and updated bathroom cabinets, the cabinets and upgraded appliances are real sweet.

Other upgrades that are missing are a Home office with French doors and now an open space as a dining room. roof gutters, lighting, and fan package, an example would be all of our rooms have an extra switch for those who wish to have fan lights, no longer, another example is for example the room I’m sitting in right now has five LED ceiling lights, the new homes have one

No more electronics package, our house has Z wave (and wifi) controlled thermostat, security system, garage door, front door deadbolt and doorbell security camera, Moen automatic water cut off. ALL controlled by an app on your phone

Some of the homes no longer come with screened lanai

No more gas fireplaces (and it’s a good one vented with automatic blower) no more engineered wood throughout the house which previously included the bedrooms, the bedrooms in the new homes now have carpeting

Thank goodness for community restrictions as the outside of the house still has to have landscaping on all four sides with specific plantings and irrigation system. So the exterior of the homes are still nice.
The interiors are still nice just void of all the options, but the standard stuff isn’t that bad and if we didn’t know any better would have still purchased. Another example is the carpeting that they put in bedrooms instead of the engineered wood seems like a mid grade type of carpeting instead of a budget builder carpeting.

However, knowing what we do now, we are absolutely thrilled with what we have. Even more so as I remind myself making this list.

How much did you pay for your home ?

I just got back from Greenville, SC (looking around again).

 

[Dave Hess]

View attachment 253884

I’ve mentioned before most younger adults have given up hope on buying a starter home they could afford.

 

[SC Maintenance]

US housing market will likely be worst year since 1995 - when we had 25% lower population. The market remains frozen.

https://wolfstreet.com/2024/10/16/h...xisting-homes-head-for-worst-year-since-1995/

 

[GON]

US housing market will likely be worst year since 1995 - when we had 25% lower population. The market remains frozen.

https://wolfstreet.com/2024/10/16/h...xisting-homes-head-for-worst-year-since-1995/

Interesting charts, thanks for posting.

I follow single family home price trends, not single family home sales trends, although I am sure the latter has some helpfulness.

My (micro) experience is that very few desirable homes on the market. We are currently looking for a second/permanent home. Anytime I see a home that might match, that home is ALWAYS on the market.

So what is left on the market but under contract is a home that is likely not so desirable. Nobody wants to pay full price, and above six percent mortgage, for a home that is not so desirable.

On a side note, core inflation continues to be over three percent for the last twelve plus months. Yet, is is clearly published that the fed will drop interest rates a 1/4 point later this month. My takeaway is the fed is willing to let inflation rise higher, for the trade-off of reduced interest payments on the debt. No idea how this will impact single family home sales or prices.

And a final trend, the spread between buying a home and renting is reported highest in history. If the report is accurate, renting a home is a considerable cost savings over buying at this time.