In shock at the asking price of single family homes in no growth, low density areas

[GON]

My Wife and I will "retire" from my current job in 2024. I will be 60. I plan on working full time until I am 70. Our grandsons are in Denver, so we have been targeting areas within 500 miles of Denver, but not in the state of Colorado. We are willing to go out from Denver up to 900 miles, but under 500 miles is the preference.

We looked at Southwest Missouri for the past six months, and simply did not find anything that matched. We now turned to searching to the panhandle of Oklahoma and far North West Texas. These areas seem to have static to negative population trends, and no growing industries.

We (I) am in shock at the prices of homes. Unless one is in the energy business, not many employment opportunities to make 100k plus. Yet so many of the homes, with 20 percent down, will require 150k plus salary. Note I am talking about a solid home with updates or a home that is worth updating. We were hoping to buy a home with a nice bones (shell) for under 300k- my Wife will want the interior gutted and we likely will put 100k in the interior. The math of today's home prices in slow selling low growth areas is surprising. I understand the prices in Nashville, Raleigh, Phoenix, Austin, Dallas, etc because of strong population growth and employment opportunities. But I am still confused at the current asking prices for single family homes in places like southwest MO and the panhandle of OK.

How are residents of this area affording 500k plus for a home? Not sure if this is a bubble, or the new norm. Maybe inflation/ cost of materials will significantly rise the price of all homes in the USA, regardless of location?

Looks like the trailer from the Rockford Files might be in my future...

 

[wpod]

Prices are astronomical pretty much everywhere.

 

[GON]

Prices are astronomical pretty much everywhere.

Is that the new normal or a bubble?

 

[ad244]

Looks like the trailer from the Rockford Files might be in my future...

View attachment 85089

That is Paradise Cove in Malibu, CA. You are a very rich man indeed because as many will comment with, its the land that has increasing value as cities expand and expand.

 

[skyactiv]

The sad reality is that new homes aren't being constructed to keep pace with the growing population.
Unfortunately, apartments are what many developers would rather build because it offers more profit.

New apartments have popped up and will continue to pop up making more and more of the population renters as the population grows.

New, small affordable homes like a 1400 SF 3 bedroom ranch in a residential neighborhood are no longer being built.

 

[Leo99]

I'm waiting for my house value to rise to meet the rest of the country. I'm selling my house and buying a retirement house when the time comes and I was hoping to pocket $100k not shell out an additional $100k. Was looking at one of those best places to retire articles and it mentioned Ogden, UT as a great place with affordable real estate. Ha!

St. George looks nice, too. This is a nice house there in my price range. https://www.zillow.com/homedetails/1547-W-Poppy-Hills-Cir-St-George-UT-84790/68530560_zpid/

 

[Snagglefoot]

From this year’s tax assessment in SE BC, not to be confused with the lower mainland, property and house values are up 9%. Rural properties are up 25% ( but from a lower starting point).

 

[GON]

I'm waiting for my house value to rise to meet the rest of the country. I'm selling my house and buying a retirement house when the time comes and I was hoping to pocket $100k not shell out an additional $100k. Was looking at one of those best places to retire articles and it mentioned Ogden, UT as a great place with affordable real estate. Ha!

St. George looks nice, too. This is a nice house there in my price range. https://www.zillow.com/homedetails/1547-W-Poppy-Hills-Cir-St-George-UT-84790/68530560_zpid/

We looked at ST George when we lived in Utah. Huge trend of people from California selling their homes and moving to St George. Made the market in ST George for the richer. The infrastructure in ST George is not the greatest for the size and growth of the population. American Airlines recently started two daily non-stops from St George to DFW which is nice.

Ogden UT is also very nice, but colder than ST George. Like all of Utah, buying now is "late to the dance".

 

[BMWTurboDzl]

Try living in an area which has good medical care for seniors.

 

[tmorris1]

We looked at ST George when we lived in Utah. Huge trend of people from California selling their homes and moving to St George. Made the market in ST George for the richer. The infrastructure in ST George is not the greatest for the size and growth of the population. American Airlines recently started two daily non-stops from St George to DFW which is nice.

Ogden UT is also very nice, but colder than ST George. Like all of Utah, buying now is "late to the dance".

Hopefully they learn their lessons and don't try ruining the states they move to with the same failed policies.

 

[JustN89]

Is that the new normal or a bubble?

It's really neither. This isn't a "bubble" in a similar fashion to 2007/2008, but it's not the new normal, either. It's a result of exceptionally low interest rates, "free" money being dumped into the economy over the past 24 months, and as @skyactiv pointed out, demand being outpaced by supply and supply being further hurt by shutdowns and shipping/labor related issues. Home prices will come down, especially as rates continue to rise, but it might not ever reach the point it was at before. Really, the speed and depth of the prices falling will hinge a lot on the monetary policy moving forward. I have friends who are in the lending business and they're pretty much in consensus that here in the next few years, home mortgage rates will likely be close to the 8-10% range. I'm not sure that I am that convinced of this, but it's certainly a possibility and that would have a drastic impact on home inventory and price.

 

[Lapham3]

It's not only the developers, but also the levels of government that also want the larger homes for more taxation. We built our second home in 1989 and no builder was interested in a one level 1800 sqft home with an attached 1000 sq ft garage. I had to be my own general contractor. My wife liked St George years ago before the high density growth happened.

 

[SwampSurvivor]

Even in dead upstate NY it's pretty bad. 5 years ago you could get a nice raised ranch on 3/4 of an acre with a garage for $140K. Now those homes are going for well over $200K.

We have a budget of $180K and it's looking like we're limited to mobile homes.

Unfortunately, we have to buy during the bubble, because that's the only time our swamp shack is worth anything and someone will actually buy it.

 

[Barkleymut]

My home is finally back to the value it was at in 2008

 

[ironman_gq]

My brother bought his house for $189k 4 years ago, just sold it for $300k first day offer from a couple who lived 20hrs away and had never seen the place.

 

[JavierH19]

As bad as it sounds we really need a recession to pop bubbles and crash prices of everything back to normal.

 

[2strokeNorthstar]

A lot of small towns are like this. It’s people fleeing the big cities with cash to burn. I have family in Montana and people literally come to the door and ask what they would sell for. They aren’t looking to work in the area. They are either done working or maybe remote if at all.

 

[CKN]

It's really neither. This isn't a "bubble" in a similar fashion to 2007/2008, but it's not the new normal, either. It's a result of exceptionally low interest rates, "free" money being dumped into the economy over the past 24 months, and as @skyactiv pointed out, demand being outpaced by supply and supply being further hurt by shutdowns and shipping/labor related issues. Home prices will come down, especially as rates continue to rise, but it might not ever reach the point it was at before. Really, the speed and depth of the prices falling will hinge a lot on the monetary policy moving forward. I have friends who are in the lending business and they're pretty much in consensus that here in the next few years, home mortgage rates will likely be close to the 8-10% range. I'm not sure that I am that convinced of this, but it's certainly a possibility and that would have a drastic impact on home inventory and price.

I bought my home in a suburb southwest of Salt Lake city. In 10 years it has gone up 250%-not far from 300% if things continue. You will not see prices adjust in desirable areas adjust more than 10% downward. The fundamentals for a "bubble" just isn't there as in previous times. It's strictly a supply and demand issue-an unintended consequence of COVID and being able to work from home. My advice to GON would be to buy ASAP-it's only going to get worse and interest rates are creeping up.

Hopefully GON has made alot of money moving around the country-as the downside was not being able to buy a primary residence.

 

[jstert]

Try living in an area which has good medical care for seniors.

respectfully and honestly, i wonder about this rule of thumb sometimes. good medical care for all persons is useful of course and can be found routinely in much of north america. if senior-specific care means an ever-increasing daily doseage of pills to combat a poor lifestyle choices (or sadly poor genetics), endless procedures to futilely reverse the tide of old age and a final home that is easily locked down into a golden prison because of a flu, living where i only see folks nearing our inevitable end, no thank you. i learned from my mom’s several year decline and demise a year ago, and won’t be following her example.

more important than senior-specific medical care imho is a place & climate that encourages one to get outdoors for regular exercise, offers some intellectual stimulation (even a decent library), and convenient transportation links (highway, air, even rail) to avoid isolation & see loved ones.

 

[edyvw]

I understand that you want something cheaper. Also, those areas do not have growth, hence, no one is building. So current inventory is shrinking and prices are going up.
But, IMO these are things you really have to consider.
1. As @BMWTurboDzl mentioned, look for areas with good healthcare. My In laws purchased condo in Colorado Springs last year although they officially live in Las Vegas. Reason? They want to spend summers here and healthcare. In St. George etc. you will not have access to research hospitals which are doing top notch care.
2. Colorado is expensive, but it is growing like crazy which means building, and Front Range has better climate than Utah. Why not Pueblo, CO? Prices are not on par with Colorado Springs, Denver or Ft. Collins, and you are less than an hour from big UC Health hospitals in Colorado Springs, and two hrs from Denver. Not to mention that the Front Range has everything that one needs when it comes to infrastructure, services, etc. There are also some towns in CO like Trinidad, Walsenburg, or the West Slope side like Grand Junction that are more affordable.
3. Winters in the Front Range are mild, and MUCH better than MO, OK, etc. We have more sunny days then Florida, and while Pueblo is bit warmer than the rest of the Front Range, you might have only 3-4 days where temperature creeps in 100's, and in winter during the day rarely drops below 40.