Real Estate Market

[AZjeff]

I was a sucker. I paid too much for my home, in the late 1990's. Like $340K for a broken down house built cheaply in 1962. 1,200 square feet.
Put $150K into it. I got ripped off for a ton of that money; the guy went to prison for fraud, grand theft and other charges. More people than me were involved.
My house is probably on the low end on my block; it would sell for the better part if $2M in a matter of days. The 2 recent sales on my street were $2M and $2.3M.

It's good to be JeffK! Did your property ever dip below the $500k you had in it or did the value rise steadily right to today? Based on seeing your house in the background of your car photos where I'm from in NW Pa it would be a $150k-ish property and around here in northern Az it would be in the low 300s. We just sold my mom's small brick ranch on a corner lot in NW Pa for $120k. Amazing.

 

[JeffKeryk]

It's good to be JeffK! Did your property ever dip below the $500k you had in it or did the value rise steadily right to today? Based on seeing your house in the background of your car photos where I'm from in NW Pa it would be a $150k-ish property and around here in northern Az it would be in the low 300s. We just sold my mom's small brick ranch on a corner lot in NW Pa for $120k. Amazing.

I sold a house in the Cambrian area of San Jose that I lived in for 6 years. I actually lost money; I paid $203K and was LUCKY to get $185K at the bottom of the market. I walked with some money, due to 20% down and always making the highest payments I could. I bought the worst house in Los Gatos; there were 2 under $400K. One was marketed in LG but was not actually a LG address. The other was a piece of trash. So I went in at full value. The property steadily rose. This is a really nice place to live. LG is the southern most city in Silicon Valley, so it is somewhat out of the churning mass that is SIlicon Valley that chews up people and spits out $$.

By the way, I live in the poor part of Los Gatos.
As some say, it is better to be lucky than good.
You know, sometimes you get lucky. I love living here.
I am not really comfortable talking about money, as I am just a recovering member of AA, 34 years sober this month.
Trust me, I know the other side of life and I know who I am; just another homeless drunk that got lucky.
AA, San Jose State and Silicon Valley have been very good to me.
All good.

 

[2strokeNorthstar]

Real estate broker here. Probably been on over 100+ home inspections. The lender requires an appraisal. Depending on the state and property, they might require a termite inspection. For instance they're not going to do a termite inspection for a condo that's on the 20th floor. Some home inspectors are also qualified to do the termite inspection, depends on the home inspectors. The home inspectors I like are former construction supervisors so they have previous construction/contracting experience. The inspector I know says he got out of it because he got tired of workers that would either show up drunk or not show up so it was a hard business. The appraisers are the only thing the bank requires, the home inspection is basically for the buyer's info.

You'd have to read a lot of books to be able to do a good one and you'd need experience to know what you're looking at. Usually on a home inspection I know most of what is seen, but still run into new items all the time. Although to be fair, the last couple of properties I bought, I skipped the home inspection. They were rental properties so I didn't really care that much. Usually there's always 5-10k worth of issues and I figured if there was much beyond that, I'd just fix it.

To do a good inspection you would have to read a lot. I did construction work for many years so take it for granted I guess. The home inspectors I have come across are pretty much a complete rip off. They just do a walk through and water pressure test. Poke their head in the attic for effect. Someone with the most basic knowledge and eyes for common covered up problems can do a better job is all. Like you said an old contractor or supervisor has come across most everything and has an eye for bad repairs and neglect.

 

[brianl703]

Last home inspector I used had a thermal camera and found some missing insulation between the garage and the rest of the house, which I made the builder fix (it was a new house).

(I have since gotten my own thermal camera).

 

[clinebarger]

It's absolutely insane, I now pay more in property taxes in 2 years than I originally paid for the 4 Lots & 2 dilapidated/condemned houses in the early 90's.
I get daily phone calls & sometimes knocks at the door with investors wanting to buy my property.....They don't have enough money! It's all about multi family/multi story apartments & my property overlooks the Trinity River & Downtown Fort Worth making it prime real estate. Funny it wasn't worth anything in the midst of "White Flight" to the suburbs??

 

[wings&wheels]

Locally our market is madness. I believe people from cities NYC/Boston/large cities have moved in scooping homes. The hottest commodities are condos. There is a housing shortage in coastal NH.

We are tempted to sell my wife's first condo ($55k 25 years ago) as market has spiked but rental income is nice:
https://www.zillow.com/portsmouth-nh/condos/

Yeah, the Boston market is crazy. Our suburb has always been hot due to the school system, but post COVID it has accelerated w/ families seemingly seeking to be out of the city. I was looking at our town metrics and we have a sub .5 month supply, with ~5 mos or so being average, below that being a sellers market.

The Cape market hasn't slowed earlier, in fact it accelerated a bit early in the Summer. One of the local realtors I know said they saw a spike in Summer renters buying, figuring they were working remotely anyway...

 

[JHZR2]

Crazy prices. House across the street sold recently for about 10% over asking. We saw five different groups of people coming to look at it on the first day on the market, despite covid lockdowns. Property taxes here temper total pricing, but the market is crazy.

Prices at the beach are also raising fast. I suspect that older folks are selling their high priced homes, and moving to the beach and or a smaller suburban home with lower taxes, and a beach house. I know a good number of folks who are nearing retirement and are doing this... Im preparting to be in the market for a beach house too. Lots of demand, but Im waiting for the drop...

 

[jhs914]

I can understand escaping from Kalifornistan, but Tampa?

Details, please.

The Tampa Bay metro area population is approaching 3 million. That is a big city by any definition. Traffic, congestion, crime.

I live in a small town/rural area. Good schools, low property taxes, low crime rate, traffic is getting worse but nothing like the big metro areas of Florida. A slower pace of life appeals to a lot folks. Not everyone wants to live packed together in a big city.

 

[JeffKeryk]

Im preparting to be in the market for a beach house too. Lots of demand, but Im waiting for the drop...

I am working with a friend to help get him and his daughter into something. We have been waiting for a drop as well...
And things have gone the other way.

Good luck.

 

[JHZR2]

I am working with a friend to help get him and his daughter into something. We have been waiting for a drop as well...
And things have gone the other way.

Good luck.

Im buying a second home, a beach house. I can wait, I have no timeline and its not like I need a place to live, or want to change from renting to owning. Ideal may actually be after the next hurricane, FWIW...

Markets drop, including in CA. Overall trend over decades is up, understantably. As inflation shows up, if interest rates rise, that would likely have a real effect too....

 

[JeffKeryk]

Im buying a second home, a beach house. I can wait, I have no timeline and its not like I need a place to live, or want to change from renting to owning.

Markets drop, including in CA.

Not over time. At least in the SF Bay Area.
Again, I wish you the best of luck and enjoy your new place.

 

[JHZR2]

Not over time. At least in the SF Bay Area.
Again, I wish you the best of luck and enjoy your new place..

Yup...

Over time it will rise, to be expected. But its about finding the right place, the right deal, at the right time, and hopefully catching a dip.

Given your outlook, your friend should have jumped in both feet on day 1, no?

 

[CKN]

Inspections are still done. However now when there is a defect found-instead of the seller fixing it-or making a price adjustment, sellers are telling buyers if you want the house take it "as-is" because here there is 20 offers behind the first one.

 

[JC1]

Inspections are still done. However now when there is a defect found-instead of the seller fixing it-or making a price adjustment, sellers are telling buyers if you want the house take it "as-is" because here there is 20 offers behind the first one.

Yes that sucks for the buyers. Wonder when this madness will slow down???

 

[JeffKeryk]

Yup...
View attachment 37185

Over time it will rise, to be expected. But its about finding the right place, the right deal, at the right time, and hopefully catching a dip.

Given your outlook, your friend should have jumped in both feet on day 1, no?

Yes. I was sure he would be in something by March-April od this year.
The only thing $400K gets you is a mobile home. Sheesh. $500K ain't much better.

 

[SeaJay]

The house sold needing $100k or $150K of repairs or possibly upgrades depending on one's point of view may very well sold at an appropriate market price. If that was the case, the seller should not have offered any concessions on the price.

If it wasn't sold at an appropriate market price, then the buyer made a mistake by overpaying.

 

[Wolf359]

Yes that sucks for the buyers. Wonder when this madness will slow down???

Not really. At least they know what they're getting into. Buyers can always withdraw and the seller can take their chances with the next buyer who didn't bid as much.

 

[CKN]

Yes. I was sure he would be in something by March-April od this year.
The only thing $400K gets you is a mobile home. Sheesh. $500K ain't much better.

Here you can get a very nice home for $500,000. That's why Californians are leaving the state for Idaho, Utah and Montana (among other states). I understand there are bidding wars for property in Star Valley, Wyoming of all places.

 

[PandaBear]

Here you can get a very nice home for $500,000. That's why Californians are leaving the state for Idaho, Utah and Montana (among other states). I understand there are bidding wars for property in Star Valley, Wyoming of all places.

Depends. Those who move to Idaho, Utah, Montana are not the same people who bid up the property and stay here.

The people who got out look at real estates different than those who stay but move further away (i.e. longer commute) or pay more by leveraging more (dual incomes, or at least 1 tech worker, look at real estate as asset and investments).

I don't think a $500k house in Idaho would appreciate much because there is always green field construction and nearly free land there. Your $500k house will be a $60k lot and $400k construction cost, and the structure will depreciate, the income level of the residents will lower as it age and higher income folks move to new neighborhood and selling to lower income folks, it will still appreciate due to inflation in general. Income wise, even if you are tech worker for Micron. You may make $140k the rest of your life in Boise vs $250k in San Jose (on the low end) vs $350k in San Francisco (on the high end). It is not the same lifestyle, just like you need to make $500k to live in Queen or $2M to buy a house in Manhattan.

In California due to land shortages in major cities (or in Jeff's case, LG or other SV area), the higher income neighborhood is in short supply so prices stays high, people then gradually buy into slightly cheaper neighborhood and "transform" it into a higher income neighborhood. A lot of people leverage more because to them it is an "investment" to get into the up and coming neighborhood. The appreciation is mainly due to the tech boom and the tech stock appreciation, and the shortage of land (it is a bay, with a lot of mountains, and the zoning / public hearing hell for rebuilding, and rent control, etc).

The lifestyle is different, they will likely cash out eventually or pass down to their children, instead of moving to Idaho early and invest in dividend stocks or index fund.

Yes, a lot of people are leaving, but a lot of people are still buying. The market is functioning as expected.

 

[JeffKeryk]

Here you can get a very nice home for $500,000. That's why Californians are leaving the state for Idaho, Utah and Montana (among other states). I understand there are bidding wars for property in Star Valley, Wyoming of all places.

In comparison, that $500K property will not appreciate. That's the difference.
Silicon Valley is not for everyone, but there is gold here.
I tell people, if you can't make it here, you cant make it anywhere. Opportunity abounds.
That's my experience.