Outstanding video on home values now and the future

[AZjeff]

Video is long, but if you are looking at buying/ selling, etc...... this video might provide some insight on a six figure (or higher) transaction.

Please clarify something sir, six figure transactions start at $100,000. In our Arizona zip code $160,000 gets you an 1,100 sq ft mobile home built in 1990. $500,000 gets you a reasonably new 1,600-1,700 sq ft subdivision home with some builder upgrades. $999,999 gets you a semi-custom 3,000+/- sq ft home in a subdivision of like homes. Are you tracking real estate from $100,000 to $999,999?

We casually watch home sales in our subdivision that range from mid $400k to $750k and we aren't seeing many if any going under contract in the short times you mentioned. These are all newer builds that I wouldn't call substandard in any way in this market.

 

[wpod]

[The experets] are correct every once in a while. Ususlly when I see experts in a head line I skip over the article or video.

 

[c502cid]

BTW- in this national and international forum, real estate is highly dependent on the local area. No difference than trying to compare car insurance.
NEW Homes are available and being built by the boatloads here. Sure they are selling fast but they are coming on the market way faster than selling. Prices are pretty much to no different from over 1 year ago BUT the new homes do have less options now, meaning pretty much held the line on pricing but included options have been eliminated mostly in our immediate area.

With that said, this is what happens when we have artificial historical low rates for a period of up to 15 years, now it's time to pay. Let's not forget Covid after effects are still in plan too.
We have now entered what I would call a normal interest rate market, if anything still a tiny bit low rates but more normal. A whole almost generation doesnt understand this because it went on for so long. Propping up the economy that they never stopped propping since 2008 and finally back to normal.
It's all fake money, someone will pay someday, I say get in a house now as soon as you can.
P.S. dont listen to me ..

Growing up I was taught anything under 6% was a great loan. My first two house loans were at 7.2 and 7.4% and I didn't think twice about buying the house I wanted. I left a 3.4% loan a year ago to move to exactly where I wanted to be at 5.5%. If it comes down, I'll refinance, otherwise I'm good.

 

[LazyDog]

If one of them was over 65 years of age-they didn't need to sell the house to pay taxes.Reverse mortgages and how they actually work is very misunderstood.
Maybe keeping up your home and paying taxes doesn't make sense in some parts of the country. I paid $200,000 (12 years ago-in foreclosure) for my home and it's now worth over $550,000. But Utah is a hot market.
I could easily take out a reverse mortgage to subsidize my standard of living-or to pay for major repairs, taxes, or insurance.

I know where you coming from but for them w/ age and health issues it was best to pack the bags. I spoke w/ one recently and said he finally feels like a kid w/ no worries about anything: Nice life, I guess.

 

[walterjay]

My first mortgage was 8.5% and I thought it was a great rate. Don't stand by just buy if you can handle the payment.

 

[CKN]

I know where you coming from but for them w/ age and health issues it was best to pack the bags. I spoke w/ one recently and said he finally feels like a kid w/ no worries about anything: Nice life, I guess.

OK-so old age really was a contributing factor-everything else was secondary.

 

[GON]

Please clarify something sir, six figure transactions start at $100,000. In our Arizona zip code $160,000 gets you an 1,100 sq ft mobile home built in 1990. $500,000 gets you a reasonably new 1,600-1,700 sq ft subdivision home with some builder upgrades. $999,999 gets you a semi-custom 3,000+/- sq ft home in a subdivision of like homes. Are you tracking real estate from $100,000 to $999,999?

We casually watch home sales in our subdivision that range from mid $400k to $750k and we aren't seeing many if any going under contract in the short times you mentioned. These are all newer builds that I wouldn't call substandard in any way in this market.

AZJ,

My point was 45 minutes is a lot of time to spend watching a video. If someone is doing a six-figure transaction, giving up 45 minutes to possibly be better informed might be a good use of time. I have never knowingly watched a tik tok video, but it is reported their videos are allowed no more than two minutes, as people today often don't want to spend more than a minute or two watching a video.

The six-figure number was not a reference to what I am wanting to pay for a home, although I expect it will be six figures.

 

[AZjeff]

Totally missed your point. Whoosh

Lowest priced property in our zip code.

7901 State Rte #69-44, Prescott Valley, AZ 86314 | Zillow

7901 State Rte #69-44, Prescott Valley AZ, is a Mobile / Manufactured home that contains 1120 sq ft and was built in 1990.It contains 2 bedrooms and 2 bathrooms.This home last sold for $153,500 in June 2022. The Rent Zestimate for this Mobile / Manufactured is $1,655/mo, which has increased by...

www.zillow.com

 

[gfh77665]

I believe GON's summary is correct. There are always a few exceptions though. Some markets will slump for one reason or another, school issues, an industry in town shuts down, whatever. That may or may not matter to someone, so bargains can still be found somewhere if its a non issue to a buyer. Theres a regional aspect too. Property in TX, OK, LA, AR, etc. is still a great buy. In NY, CA, CO, HI, etc., not so much.

 

[ripcord]

I can't argue with what he says. We have a 300 or 600 unit apartment complex (depending on which neighbor hear what) being built just a mile down the road. The rental prices they are advertising just make my jaw drop. How does anyone afford those prices when just starting out?

 

[SC Maintenance]

@SC Maintenance

,
Over dinner tonight (Sunday night) eating alone, I took a few minutes to think why the Case Shiller survey is different to what I am seeing.

The below is on a MACRO basis:

My speculation is that good houses are simply not hitting the market (MACRO basis). All that is hitting the market are the less than desirable homes. Any good home I have seen is under contract in 72 hours or less, most in under 24 hours. And good homes hitting the market are rare. What is hitting the market are homes with bad lots, bad locations, poorly built, bad floorplans. These less than desirable homes are selling, but not necessarily at a premium.

In the past year, my Wife I have flown out on a moment's notice at a hefty expense to view a home, in hopes of simply getting a decent home. every flight was in vain, although the pictures and marketing of the home were top shelf, the homes all were not desirable for a seasoned home buyer. You would be blown away at the condition of some of the homes we visited- we have so many examples, but maybe the worse was an owner-occupied home that had large sized dog feces on the floor of the master bedroom. I can't believe the listing agent let us tour this home... the smell was just tremendously bad.

Was the same in the past. People always want top dollar for their worn out stuff. I guess someone buys it? First time I gave up and bought a fixer upper and gutted it. Second time I bought new construction.

All markets are local. If you live where people are moving to supply and demand prevail.

Also there is a huge difference in real estate bought for shelter vs as a asset.

 

[JeffKeryk]

I am in the market for a small condo, 2/1, in the Capitola, CA area. $650K would be a great price for a half decent place. Dunno if it's doable; $720K is more like it. $200K down and finance the rest. Maybe more down, depending on the numbers.
Wish me luck.

 

[GON]

I am in the market for a small condo, 2/1, in the Capitola, CA area. $650K would be a great price for a half decent place. Dunno if it's doable; $720K is more like it. $200K down and finance the rest. Maybe more down, depending on the numbers.
Wish me luck.

Jk,

The luck I will wish you is to have the opportunity to buy a two bath instead of a one bath. Massive difference in ability to sell in case you have a urgent reason to sell. I fully comprehend your situation of no supply and high demand. I still would try to get two baths over one bath, regardless of price spread.

 

[JHZR2]

You are absolutely correct. Homeowners insurance and rising multi-family unit HOA fees are other reasons some markets seeing increased sales activity.

I’ve seen some insane HOA fees for some small condos. Like >$1k/mo. For what, taxes and a pool?!? Insane.

 

[JHZR2]

Totally missed your point. Whoosh

Lowest priced property in our zip code.

7901 State Rte #69-44, Prescott Valley, AZ 86314 | Zillow

7901 State Rte #69-44, Prescott Valley AZ, is a Mobile / Manufactured home that contains 1120 sq ft and was built in 1990.It contains 2 bedrooms and 2 bathrooms.This home last sold for $153,500 in June 2022. The Rent Zestimate for this Mobile / Manufactured is $1,655/mo, which has increased by...

www.zillow.com

>$500 to rent the ground under that thing is insane. Particularly given the amount of free space out there.

 

[SC Maintenance]

I’ve seen some insane HOA fees for some small condos. Like >$1k/mo. For what, taxes and a pool?!? Insane.

Usually includes homeowners insurance for the building exterior which if coastal can be a lot. Also exterior maintenance. Might also include money going into escrow for some future repair. You need to look at the books but it's possible $1k isn't as crazy as it sounds.

 

[JeffKeryk]

Jk,

The luck I will wish you is to have the opportunity to buy a two bath instead of a one bath. Massive difference in ability to sell in case you have a urgent reason to sell. I fully comprehend your situation of no supply and high demand. I still would try to get two baths over one bath, regardless of price spread.

There has to be a limit on price. This is for my niece and her younger twins, whose nice condo was totaled by the falling eucalyptus tree.
They have to have a place to live until their place is rebuilt; could be a year or more. Rent is at least $3500, if you can find one. Purchase seems to be the only answer.

 

[samven]

When my second wife and I bought our first home together rates were 12.5%, it was 6 or 7 years before rates fell into the 8's. Housing prices dropped and then rose very very slowly. Our home increased more in value in the last 3 years we were there than in the previous 22 years. I cant remember experts predicting correctly housing prices falling, its always something unexpected that happens that causes the bottom to fall out suddenly. The problem is if you are looking to move up the bottom fell out of your house too so it ends up a wash.

 

[SC Maintenance]

There has to be a limit on price. This is for my niece and her younger twins, whose nice condo was totaled by the falling eucalyptus tree.
They have to have a place to live until their place is rebuilt; could be a year or more. Rent is at least $3500, if you can find one. Purchase seems to be the only answer.

$3500 a month for a $720,000 place is right in range for a rental price.

 

[Hillbilly Deluxe]

I haven't watched the video yet, but here's my perspective from someone who has some money in his pocket wanting to buy some flip homes-

1. Trying to find homes to fix up and re-sell is near impossible.
2. I have seen more houses get reduced in price the last 90 days than I have seen prices increase. This is in an area of Metro Atlanta that is growing by leaps and bounds.
3. I have seen new construction starts/new subdivision development come to a screeching halt.


Me and my business partner in this endeavor have walked away from two homes that we were intent on buying and we've failed to give offers on 3 others in the last 6 weeks. One house was originally priced at $215k, dropped to $195k before we looked at it, we started the offer at $130k. Back and forth a time or two and we settled at $148k with a contingent second look. After the second look with another contractor, we backed out for several reasons- When my partner and 2nd contractor went to take the second look, there were 8-10 males in the street, a group of "upto nogoods". The area is about the worst area in the town and you aren't selling to a nice, new family with that going on. The other reason was we seriously low balled the expected renovation costs and seriously over estimated the potential sale pricing.

The other house we backed out of was a potential rental. This was listed at $155k, it needed $65k in repairs/renovations to just let someone move in. We needed it to bring nearly $2k in rent, it would have been a struggle to get $1k in rent in that area.

There are two things that are hurting us in finding and doing the flip thing - 7.5% interest rates and high cost of construction. Until those two things cool off, houses WILL be dropping in value in many areas.