Updated observations on single family home market in South and Southwest USA

[GON]

It looks like a nice place. Still - $800K for a house in what appears to be the middle of nowhere. Am I missing something? Is there major industry / job opportunities nearby?

As for the seller - people that have never worked in any kind of B2B environment see every transaction as a used car sale, and if someone makes an offer they don't like they perceive that as trying to take advantage of them. So I doubt they regret it. They should have countered with 850K and moved on, but again - those who have never put together a B2B deal don't realize it has to be a win - win deal for everyone involved or it doesn't get done.

You are correct, the area has limited job opportunities. The area is a reasonable commute (time- not distance) to Tucson, easy and stress-free drive. Under one hour to Tucson airport. I would equate the area as a good match at the $800k price point for people like retirees, commercial aviation pilots, remote workers. The area is stunningly beautiful and has a more moderate climate than Phoenix.

Seller dropped the home to $890k. At $890k $45k in real estate commissions. Then an inspection likely identifies another $40k USD in required maintenance. Then the risk the home doesn't appraise for even $890k. Loss of interest on $800k for a year is $32k USD. And, maintenance and utilities on an empty home for a year ($3k USD?). Seems our off market offer at over $800k USD cash, no appraisal, no inspection might have been a golden goose for the seller. Who knows.

If the home didn't need updating, we may have gone to $900k USD. We estimated the home needed $100k USD in updating and deferred maintenance.

 

[SC Maintenance]

Of course it would. It’s folly IMO.

Functional areas of the NE, CA, etc… areas where jobs and money actually existed, were so for a reason.

Lots of folks, sure. And that brings problems. Sure. And taxes, and costs for infrastructure and upkeep.

But sleepy areas without infrastructure were cheap for a reason. Places that the industrial era forgot, or even post civil-war reconstruction forgot… or were never even developed..beautiful spots in some conditions… but many that are oppressively hot, excessively humid, hurricane prone, lack of fresh water, lack of infrastructure, lack of power.

Sure, it’s cheap (at least it used to be, not any more in many places). Sure some places have tax advantages so companies moved in (after manufacturing was decimated to China over the last 50 years). But those issues still exist.

And then, compound it. Poor schools, everything far apart, reliance on bussing and driving, and people moving in, requiring infrastructure, congesting roads, etc. How exactly is Atlanta, Charlotte, DFW, Houston, Austin, Phoenix, etc. better than the “legacy” cities?!?

The folks that moved there brought their failed policies. The crime, congestion, etc. all existed. Trash people are everywhere.

Only it’s hotter, no season, bad conditions when it storms, increasing prices, increasing taxes, increasing costs. For what redeeming quality exactly?

I’m sure folks will have dissenting opinions to mine, as a lifelong mid-Atlantic living person. And that’s fine. Folks can do their own thing as they see fit. But I never saw the redeeming quality of uprooting to any of these boom places. Beautiful places, many of them. But a place to move? Meh.

The Northeast and Midwest rust belt exist because at the time Geography was on their side. The steel was in the iron range, and it was easiest to trasport it by ship to mills along the Great lakes, so manufacturing grew out of that. Commodities kept going down the lakes, down the Hudson, and terminated to NYC - so NYC became the global banking center. Geography.

California was not too dis-similar. In the 30's people fled the dust bowl for farm jobs in the area - spurred by the Colorado river compact and such. At the start of an post WW2 the government realized they needed to rapidly expand their abilities in the Pacific and poured lots of money into the area, which was a spiral that spurred private industry.

So the question becomes what next? The largest draw of foreign direct investment for the last decade has been into South Carolina, Georgia and Alabama. They offer a business friendly climate and easy port access to the rest of the world.

A decade from now - who knows. But its always changing. If your assuming NYC will always be the top banking center or Silicon Valley will always be the tech center - go visit Detroit. 60 years ago no one on earth would have believed you if you told them it would no longer be the Automobile center of the world - the Silicon Valley of the 60's.

 

[Cujet]

This is the home in Rio Rico we made an offer on. no appraisal, cash offer of over $800k.

Home is very nice, but needs a lot of updates and work.

Seller laughed at our offer. Home is now on the market about one year.

You make a superb point. My neighbor directly to the South may make an offer. No realtor, no repairs, no nonsense, these are good things.

Can't go nearby and purchase a similar home for that though. Not even close. Homes in the $770K range are 1400 sq ft, smaller lot, wood frame, older.

In perf cond, my home now appraises at $950. Knock off a good bit of the price for roof and doors, no questions or take a year to update. Not sure I have the luxury of wasting another year. Windows are low E double pane and in good shape. Although not hurricane glass, they are tempered and tough, with steel shutters.

Anyway, you make a good point. Cash in hand matters.

Kitchen and granite countertop are at least 'acceptable' although 23 years old. Since it's just two of us, low wear n tear.

 

[GON]

You make a superb point. My neighbor directly to the South may make an offer. No realtor, no repairs, no nonsense, these are good things.

Can't go nearby and purchase a similar home for that though. Not even close. Homes in the $770K range are 1400 sq ft, smaller lot, wood frame, older.

In perf cond, my home now appraises at $950. Knock off a good bit of the price for roof and doors, no questions or take a year to update. Not sure I have the luxury of wasting another year. Windows are low E double pane and in good shape. Although not hurricane glass, they are tempered and tough, with steel shutters.

Anyway, you make a good point. Cash in hand matters.

Kitchen and granite countertop are at least 'acceptable' although 23 years old. Since it's just two of us, low wear n tear.

View attachment 281095

Kitchen looks great. Rich, neutral cabinets. Can't tell if your granite countertops are Uba tube or peacock green. Consider having a professional rejuvenate the granite right before the listing pictures.

Floors look great. Only thing recommendation is to consider removing everything from the countertops for staging pictures.

 

[RhondaHonda]

Floors look great. Only thing recommendation is to consider removing everything from the countertops for staging pictures.

I can’t stress this enough. Nothing on any counters, minimal, if anything on walls.

We don’t notice the stuff in our daily lives but it makes for terrible photos. Remove everything then go back and remove even more stuff.

 

[Cujet]

Kitchen looks great. Rich, neutral cabinets. Can't tell if your granite countertops are Uba tube or peacock green.

I remember it being called "Tropical Green Granite" or something similar. It is in perfect shape, like I mentioned, just two of us, and I was away my entire career.

 

[Cujet]

I'd love a bit of advice or discussion today to help me focus on not making a mistake.

My neighbor says he wants to make an offer on my house and meet with me today after 5:30. I am aware my home needs certain work and willing to discount the home fully at the market prices for that work. I have roof quotes. Yes, my roof is repairable for a fraction of the cost, but any new owner would be subject to insurance difficulties with an older roof.

While I've not hired an appraiser yet (had planned to, but had a health downturn) I was able to come up with a comps that match my home very closely. I'll use that as a starting point and discount from there. I verified with Grok3, using recent sales and listings. Came up with much the same as my 2 real estate friends did.

I really don't want to reject an offer and find myself unable to sell for a year or two. Nor do I want to take a lowball offer, which is what I expect.

Thoughts please! And thanks!

 

[alarmguy]

Well you heard me talk in the past about the amazing amount of homes being built here. Here is my county in NC also another "coastal" county in SC both near the top in the nation. It is scary, with all the building I honestly think when these over ten thousand plus homes ( I think there are 40,000 permits filed in my NC county alone) and communities are finished there maybe a glut. I dont know right now they sell as fast as they are built but wow, there is currently well over ten thousand being developed, meaning various phases of utilities and streets being put in. I dont see how it can continue. One concern might be less expensive track housing in an area where nice homes are not that expensive to begin with.

Source - https://www.census.gov/newsroom/press-releases/2025/vintage-2024-popest.html

 

[Cujet]

OK, thanks. I have a plan as to where to go. But not how to negotiate with a neighbor that wants to make an offer.

I do feel my house has some really good points that won't be found in other homes. Including a separate gated driveway for a boat or RV. That's a big deal here, as you must have a sufficiently strong culvert pipe.

 

[Nukeman7]

I'd love a bit of advice or discussion today to help me focus on not making a mistake.

My neighbor says he wants to make an offer on my house and meet with me today after 5:30. I am aware my home needs certain work and willing to discount the home fully at the market prices for that work. I have roof quotes. Yes, my roof is repairable for a fraction of the cost, but any new owner would be subject to insurance difficulties with an older roof.

Don't shortchange yourself if you opt to discount the house for roof repairs. If the current roof needs limited repairs, only adjust for the repairs, not the cost of a full roof replacement. Any buyer has to understand this is not a recently built home where a completely new full roof would be expected.

View it like buying a used car that has 2 bald tires and 2 tires with 75% remaining tread life. Would it be reasonable to expect the seller to replace all 4 tires if only 2 were bad?

While I've not hired an appraiser yet (had planned to, but had a health downturn) I was able to come up with a comps that match my home very closely. I'll use that as a starting point and discount from there. I verified with Grok3, using recent sales and listings. Came up with much the same as my 2 real estate friends did.

Based upon your research on comps and the two realtors estimates, I suggest that you do not waste money on hiring an appraiser up front. You might be able to save that cost if a quick discounted sale materializes rapidly.

I really don't want to reject an offer and find myself unable to sell for a year or two. Nor do I want to take a lowball offer, which is what I expect.

Let the interested neighbor know upfront that you will need ~10 days to make any decision. If necessary, make up an excuse (e.g., need to discuss with children & spouse, busy with medical appointments, need to firm up future relocation plans, etc.) to avoid a hasty decision and think it through completely (unless the offer is insultingly low).

 

[JayhawkRoy]

Back in 2014, when my FIL passed, the neighabor made an offer on his house: $187,000 using a friend's RE agent evaluation. We hired an appraiser and he estimated $198,000 in current condition. Our agent listed and sold within 4 days at $222,000. The market offers were moving upward faster than most appraisers, etc could keep up.

It was a very hot market at the time. Needless to say, we rejected the neighbor's offer after receiving the appraiser's appraisal. Your situation is a little different, and I don't know the Florida market at all, so best of luck. Don't short yourself but be realistic about the true value of your home.

 

[JeffKeryk]

@Cujet good luck. Ya never know, so you make your best decision and live with it either way. I just bought a well lived in studio condo nearby. Very old converted apartments. Paid $450K and needs work everywhere. Another 1 bedroom just dropped from $500 and sold at $465; it appeared to be nicely upgraded. So I could have done better, but I had a goal and accomplished it.

Do your homework; talk to a good realtor. And remember everything changes. IMO, if you get what you need for to complete the next steps, you've done well.

 

[PandaBear]

Functional areas of the NE, CA, etc… areas where jobs and money actually existed, were so for a reason.

But sleepy areas without infrastructure were cheap for a reason. Places that the industrial era forgot, or even post civil-war reconstruction forgot… or were never even developed..beautiful spots in some conditions… but many that are oppressively hot, excessively humid, hurricane prone, lack of fresh water, lack of infrastructure, lack of power.

Sure, it’s cheap (at least it used to be, not any more in many places). Sure some places have tax advantages so companies moved in (after manufacturing was decimated to China over the last 50 years). But those issues still exist.

And then, compound it. Poor schools, everything far apart, reliance on bussing and driving, and people moving in, requiring infrastructure, congesting roads, etc. How exactly is Atlanta, Charlotte, DFW, Houston, Austin, Phoenix, etc. better than the “legacy” cities?!?

The folks that moved there brought their failed policies. The crime, congestion, etc. all existed. Trash people are everywhere.

Only it’s hotter, no season, bad conditions when it storms, increasing prices, increasing taxes, increasing costs. For what redeeming quality exactly?

I’m sure folks will have dissenting opinions to mine, as a lifelong mid-Atlantic living person. And that’s fine. Folks can do their own thing as they see fit. But I never saw the redeeming quality of uprooting to any of these boom places. Beautiful places, many of them. But a place to move? Meh.

You are very close to the reality of real estate market in general. A property is not just a plot of free land and construction cost, it is what the market collectively decided how much it is worth with demand and supply.

The demand side is really up to the job market and income level nearby. A beautiful farmland with no internet access and horrible traffic to nearby job hub will not be worth a lot compare to a world class financial hub where tons of money are around and people get hired, and can commute to work within reasonable time. Many people fail to accept that there are those who can afford and will spend for the home near their income level, regardless of whether it make sense in manufacturing cost (land + construction) of such home.

The supply side? Land is a finite resource obviously. If you are in an area covered by water and mountains nearby, the only way to build more homes are either 1) buy a house and tear it down, turn it into higher density homes (more house in the same lot, condos, townhouses, etc), 2) expand your small house into a big one. That's why you see people buying a 1M burnt out house with a big yard because they are just going to tear it down and build 3 houses on it. No need to do the same in Dallas as they can keep going north all the way from Allen to Oklahoma with no mountains in between. This means land will never be expensive in some areas but will likely keep value in others, and some homes will stay desirable no matter how old while others will just depreciate like an old cars that got trade to 2nd, 3rd, 4th owners with lower and lower income and turn into a beater vehicle equivalent.

Historically cities and valuable homes are build near economic centers, that used to mean water source and farmland, then turn into energy source like Niagara Falls, then docks for merchant marines (and ports), then railroad interconnects, then highway interconnects, etc. Every time something changes in civilization those locations move and in the end, better places become more desirable and prices went up, pushing out people who couldn't afford it. It doesn't mean these people are dishonest and criminals, but people who could afford to and value quality of life tends to move away from where dishonest people and criminals gather.

I'm sure market everywhere is cooling. A lot of the money regardless of where it was originally QE goes into real estate from retail investors, funds going into landlording (Blackrock), or indirectly into employees income via tech companies or startup through VC funding from sovereign nations like Saudi, Norway, Singapore, Japan, etc. The low interest rate since 2010 and Covid QE money is ending and interest rate rising, thus tech jobs getting cut and landlord funds starting to reduce investment and unloading some of those holdings. The effects, if follow the same pattern as 08, would hit the lower income lower priced neighborhood all over more than the higher income ones. I have seen in 08 the blue collar area like Hayward CA dropping 30-50% while the upper middle class neighborhood (i.e. Saratoga CA) dropping only 10-20%.

 

[Dave Hess]

Interesting. I'm in Jupiter Farms, FL. It's the semi-rural NW area of the 114 mile long West Palm, FT. Laud, Miami metro area (now one big city). As such, it is a wonderful escape from city life. The market seems pretty strong here in my 'hood.

There is a nice natural area (Northeast Everglades Natural Area, NENA) behind my home. So no neighbors behind and some addl land I do not own, yet is on my side of the canal and makes my oversized lot even bigger.

However, I've had a bit of a time determining a price for my home. I get a lot of pressure to price it at a point where I could never purchase a similar home in my area. Maybe it's just realtors and potential buyers looking to optimize their side of the equation. Neighbor verbally offered me $770k. Zillow says $854K, Zillow also says our sister home (identical and on my street 10 homes down, same side) is $999K. But we have a larger lot, a 3 car garage, gas appliances and so on.

My home needs a new roof, or adequate repairs, and could use new French doors as some are rusting and some are foggy. So discount fully for that.

What’s the lowest cash offer would you accept ?

Definitely sell and move out of Florida.

 

[Cujet]

What’s the lowest cash offer would you accept ?

Definitely sell and move out of Florida.

I guess it would be the assessed value of the house, minus the actual cost of repairs.

As to moving out of FL, I absolutely LOVE Florida. I'd prefer to be in a more rural location. TN is appealing on many levels, but locations in FL that are not "South Florida" really appeal to me. I've lived in Jax, Daytona, Stuart and Jupiter FL.