I guess that is nice. It's really far from a major airport, still has tons of open land for future growth making your 2021 built million dollar sorta normal house look old. It's not like the desireable parts of the salt lake valley where land is in short supply.
Trend of single family home prices dropping hard in "non-hot markets"
- Thread starter GON
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This a kinda an interesting question…..but short answer is -no.
We will have sort of a bubble, but prices really won’t drop much for two reasons:
1- Builders that survive will be building more expensive housing- it’s what the public thinks they want. This area I live in could use some simple, sub 200k housing. I have yet to see anything new start under 400k…. This alone is going to force the surrounding homes stay up in price…
2- Foreign Buyers- Many folks are already seeing investors coming though their area buying up houses. Now I am seeing it even in areas like the Detroit/Flint area. There is going to be some money made on rent, that is for sure! I’ve already seen what happens to areas that already have this problem….
We are not going to see the days like the great recession. Like when I bought my house at almost a third of it’s current value. Here, like many other things currently overpriced- showed what kind of money can be made. Even when the economy tanks, not expecting much savings here…..most likely more homeless people…..
We will have sort of a bubble, but prices really won’t drop much for two reasons:
1- Builders that survive will be building more expensive housing- it’s what the public thinks they want. This area I live in could use some simple, sub 200k housing. I have yet to see anything new start under 400k…. This alone is going to force the surrounding homes stay up in price…
2- Foreign Buyers- Many folks are already seeing investors coming though their area buying up houses. Now I am seeing it even in areas like the Detroit/Flint area. There is going to be some money made on rent, that is for sure! I’ve already seen what happens to areas that already have this problem….
We are not going to see the days like the great recession. Like when I bought my house at almost a third of it’s current value. Here, like many other things currently overpriced- showed what kind of money can be made. Even when the economy tanks, not expecting much savings here…..most likely more homeless people…..
I did for fun more than anything pass the real estate exam quite a few years ago, took classes at Foothill college related to it and all. If I could remember better is another thing, it’s quite complex actually. It was a difficult exam to pass honestly. Some brokers have all the answers and the agents pay a fee to get them and can pass by studying the answers. Totally illegal. I was shocked to see this. I did it the honest way.
There won’t be any lawsuits filed. A buyer has no power at all until a contract is signed. Real estate brokers don’t sue their customers, and there is always a way out of it as I explained. An offer isn’t just the price, but many other elements. There is always a time element for one. The offer has a response time and if the seller doesn’t meet the deadline it’s over. There is nothing in any law that says you have to decide when someone tells you to decide. Everyone is protected by fair housing laws. Everyone can be discriminated against in one way or another.
Prices seem to be stabilizing in the areas I track. Arlington TX seems to be slowing a bit; Silicon Valley is not seeing the huge over price offers.
And houses here can stay on the market longer if the asking price is too outta whack.
But the houses in good shape that show well sell fast.
And houses here can stay on the market longer if the asking price is too outta whack.
But the houses in good shape that show well sell fast.
Old age is a "protected class", in case you wonder. Age discrimination lawsuits happen all the time.
OPEC tanked the oil priced in the last several years to drive shale oil out of business, and now that they are bankrupt they can finally raise prices. Previously it was the other way around when shale boom drove prices so low OPEC went into trouble, not picking side but it is really just a geopolitical turf war. I haven't forgiven them for driving oil price up to 120 / barrel (and $5/gallon in 2008 money, that's basically $7/gallon in 2021 money) back in Bush 2.0's time and I think they all deserve what they get now.
The 2008 collapse was caused by NINJA loans, but today's boom is driven by cashing out of stock market and QE (international money realize Treasure Note is a scam as well as Fanny Mae Freedie Mac bundled home loan, so they just invest in the single family home market for rental themselves, as they are easier to sell and political wise more tolerant to rent control, as it impact regular home owner as well as just institutional investors own apartment complex).
It won't collapse until interest rate rise and people pouring money and leverage to get into crypto or other high risk high yield products that collapse. It may slow down like the 80s with high interest rate though.
If you look at the international standard (if there is such a thing), we have seen home prices WAY HIGHER than the $300-400k we typically see in the US. So far they have been sustaining it very well because data shows they make adjustment to 1) live in condos instead of detached home, 2) live further away due to urban sprawl or work from home (we have seen how "cities" grow from walkable distance to trolley commute to driving every day for 2 hrs to now commuting to the office one day a week), and finally this thing called "inflation".
Our economy is always going to have some winners and some losers, it doesn't mean we will all be taken care of but prices eventually will work out to the market rate. In 2008 not all prices tank, and in 2012 not all of them recovered. What we have seen is the depressed towns tanked way more in 2008 (i.e. 60% instead of 20%) and didn't recover till much later (i.e. 2015 instead of 2012). Sadly the reality is real estate is a rich get richer and poor gets poorer game if you want any kind of capitalism or market economy.
Personally I would not try to time the market for my own long term home, but now is not a good time to speculate the rental market unless you really just want to avoid inflation eating cash away. If I must, I would buy suburb close enough to commute to job hub rather than a big house in a run down town with massive job loss.
The bigger problem I see is the Millenials' student debt load, they are not making enough to pay it off so they will likely not be the one holding the boomers' bag when they want to cash out their home value to retire into nursing home.
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Did you see my post? Very little inventory....that's the reason. Put that same home in So Cal-and it's three or four million. A So. Cal resident moving to Utah thinks that's a bargain.
The only winners from high housing costs are the bank and the taxman
Housing costs mirror inflation and ability to borrow which means like stocks they currently have no bearing on reality
The fact that 40 and 50 year interest only mortgages are much more common today than even 15 years ago is a good indication we are in pure fantasy mode.
How long is this sustainable? Considering under 50% of buyers qualify for credit my guess is when we start running out of exceptionally qualified loan applicants which is already happening as we run out of suckers and the normal folks refuse to participate
Current state of affairs is self feeding since normal people who have a home can’t move and those heading toward foreclosure and eviction are still likely protected in most states until September keeping low end housing bound up.
Then you have horrifying groups like Bergshire Hathaway and it’s ilk buying up tracts of “units” that never enter the retail market and camping on them trying to wring out the last buck before things collapse after which they will try to get another government bailout
It’s worth noting the guy that laid out what happened in 2009 back in 2005 is stating that all 3 metrics are in bubbles at the same time which has never happened
He states it will be very hard to predict when a collapse will occur but that all 3 systems will likely fail at the same time considering how overextended everything is.
good times.
Housing costs mirror inflation and ability to borrow which means like stocks they currently have no bearing on reality
The fact that 40 and 50 year interest only mortgages are much more common today than even 15 years ago is a good indication we are in pure fantasy mode.
How long is this sustainable? Considering under 50% of buyers qualify for credit my guess is when we start running out of exceptionally qualified loan applicants which is already happening as we run out of suckers and the normal folks refuse to participate
Current state of affairs is self feeding since normal people who have a home can’t move and those heading toward foreclosure and eviction are still likely protected in most states until September keeping low end housing bound up.
Then you have horrifying groups like Bergshire Hathaway and it’s ilk buying up tracts of “units” that never enter the retail market and camping on them trying to wring out the last buck before things collapse after which they will try to get another government bailout
It’s worth noting the guy that laid out what happened in 2009 back in 2005 is stating that all 3 metrics are in bubbles at the same time which has never happened
He states it will be very hard to predict when a collapse will occur but that all 3 systems will likely fail at the same time considering how overextended everything is.
good times.
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My Parents and Aunts and Uncles taught my kids how to save and invest their hard earned cash, both kids have their degrees and no student debt along with each owning Two paid for rentalm homes. They are reallt competitive with eacher accomplishment wise. I just wish i paid attention like they did.
They have 40 and 50 year loans now? That is scary…..
Yes, but I still see prices in all the markets you mentioned going up. Other countries (like China) see the dollar signs in buying many homes for an constant upstream flow of income. And if enough are able to buy into a market- they can set the prices to the maxium of what people can afford.
I simply don’t see prices going down much at all…..if we get the predicted foreclosures mentioned, they will just end up as rentals…..
You do that to meet a payment point if you have exceptional credit and you expect either a large increase or decrease in value in which case you walk either with a fight or with a payout.
if your credit is good enough and your lifespan in the home is meh you can maybe win the TCO lottery using that approach (sometimes) and the bank gets the house if you don’t
What I do see is the international buyers are buying higher quality homes, those near job hubs in upper middle class area (must have good schools). They are likely either cash buyers or helping our their US educated children who already immigrated into the US, neither would likely be foreclosed.
What I do see is the lower income neighborhood might be in a bubble. The solid middle class neighborhood gets those cash out buyer from the upper middle class neighborhood bidding them up, like those in Bozeman Montana or Salt Lake City with work from home family relocating there. While I do see some move from San Jose to Tracy / Modesto and gentrify the area, this seems like a "I can borrow and buy this" move and as a result lower income cities like Tracy / Modesto may get a bust while Bozeman / Salt Lake City "I can sell my California home and buy this with cash" move would not.
One thing I noticed is the high price area like Saratoga / Los Altos / Palo Altos are not going to collapse overnight, but they have peaked and won't go above 4M. So far it seems like even the tech bros have a hard time affording a home more than 3.5M, so maybe 3.5M is the new 1M? I don't know, looks like inflation to me.
I wonder what his theory on that was. Never really heard of that type of lawsuit working. It's one thing to worry about a lawsuit based on some legal theory, another to have case law and precedent. You could easily bluff if you want to demand more money at asking price, say you have another buyer or that you're expecting another offer to come in at a higher price. The counter to that is of course the buyer withdrawing their offer or not accepting the higher counter offer. Then you can always made demands even at full price, later closing date, some buyer concessions like maybe not broom swept condition etc, rent back, etc.
Deleted due to political veering off. Real estate contracts are in writing signed by both parties. Nothing else is a contract. There is no buyer only contract.
Bruss was considered a real estate guru and saw land and housing as the best choice for investment. He had best-selling books about it.
He followed federal tax and law changes closely and was broadly familiar with state laws and normal practices in real estate. If he said that a full-price offer could be treated as enforceable in some states, which he did often, then he must have had some basis for saying it. I would believe him. My digging online suggests that most states today will not force a sale after a full-price offer is turned down. Things might have been different some years ago.
Some of his guidelines are highly valid today. For example, he said not to buy vacant land you don't plan to use within a year. The odds were that you never would use it or that something would eventually change so that you couldn't.
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