The crazy real estate Pandemic housing at any cost thread

For those interested-

I have been watching the real estate around here going weird (to my thinking) for some time. Million dollar plus homes with 17K a year RE tax bills after tearing down a pretty nice home boggles my mind. Of course the whole current economy boggles my mind as so many aspects really don't add up- to me.

I wonder how cities and towns are going to cope with the sudden expansion, or contraction, of their populations. A perfect example would be southern New Hampshire where the locals blame much of the cost of living change on people from Mass moving in and demanding the same services (conditions) that they just moved away from.

And when the economy turns.........

From CBS Sunday Morning


OM

The amount of money some people have blows my mind.

It's a sellers market, had been for several years. Houses jumped 21.4% in the city next to me, mine jumped 20.6% last year.

The U.S. housing market was 3.8 million single-family homes short of what was needed to meet the country's demand in 2020. The estimate represents a 52% rise in the nation's home shortage compared with 2018.

Supply and demand. The demand is/was there due to mortgage rates that continued to drop for the last 4 years. More people could afford more expensive homes for the same monthly payments.

2021, the national average for homes to rise is 10.4% more. It'll end when interest rates get crazy stupid again, and they will.

Last year, the average price of a home in Bend, OR was $450K...this year it's $650K. That's a $200K (or nearly 50%) increase in just one year, driven primarily by people from the Bay area of California moving here with substantial equity from their homes. It's hard to imagine how this is all going to play out, but it certainly seems unsustainable. Bend has a history of feast and famine real estate, but that's back when the real estate was typically being driven by the vacation home market. With changes in work circumstances brought on by the pandemic, this feels much different.

I guess time will tell.

I totally agree with Brownie. Welcome back to the Carter/Reagan inflation days. Where interest rates came several years behind the inflation of home prices; but when they finally did catch up, the price and purchase rates of homes plummeted. How does 18% with ARM mortgages being the way to go??????

My own observation and participation of the current trends began several years ago with one of the Reverse Mortgage vehicles with AAG. Why not? I plan to stay here for a long time; but who knows what life brings?? How can you turn down all the equity that you have being given to you interest free in a fund that is there for you to use. We can talk about reverse mortgages in another thread; but this is something that is a no brainer.........FOR ME!!!

The cost of housing locally has climbed like a rocket in just the last few years. When the last appraisal happened 3 or so years ago the place was going in the mid 2's with VERY FEW comps to compare it with........NOW, in just the past few months, I bet there are 10 to 15 places for sale, that are being snapped up within a month, in a mile or so radius. In addition most of these, it seems, are up by 20% or more of what they were just a year or so ago.........

So for me, my place with this appraisal for AAG, taking advantage of the 1.9% interest rate, came in at a full 30% higher than previously 3 years ago. THIS IS UNBELIEVABLE!!!!!!!!!!! The fund that I can draw out of in the reverse mortgage, which I have never touched, is now up into the several hundred thousands of dollars rather than in the double didget thousands.........So, I sell the place now and walk away with over $350K TAX FREE to buy someplace else where I want to move..............OR Just hang in a couple of years until the interest rate wagon begins to rise and sell to A VERY MOTIVATED buyer...............

lol.........what to do with my mules when I buy a condo in Del Rio???????????

My daughter's neighbors built a house 5 years ago for $400K. Recently put it up for sale for $550K. They got $720K in a week from someone in California who had never set foot in Montana, let alone the house. This sort of thing is common these days. I can only hope that the three days of snow we are experiencing in late May will change their minds about staying here.

Boy, this sure sounds like a year or so before 2008. Remember what happened then?

CRASH....

DaveSlash5 said:

Boy, this sure sounds like a year or so before 2008. Remember what happened then?

CRASH....

Click to expand...

When people pay too much it eventually catches up with them, or their estate.

PGlaves said:

When people pay too much it eventually catches up with them, or their estate.

Click to expand...

Also to the banks and investment groups with real estate holdings. Then it hits us all. How many houses were the banks left holding, below value, when 2008 ended?

My daughter and her husband just bought a house in Colorado Springs for $435K. They told me if you find a home you like, you make and offer because if you think about it for a couple hours it was sold. She called the other day. A house a block down the street, same builder, similar floorplan, but a bit smaller listed for $510K and sold the same day. She did the math per square foot and it would put there home at about $100k more than their buying price six months ago. Over a 20% increase in value in six months.

It will adjust one of these days and the people that bought late are going to suffer!

Not uncommon here in the SF Bay Area to see many, many offers high over asking.

Two house sold around here recently for $530K or more over asking. I’ve heard of some going for $1M over asking price …


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I had a friend just sell a home. The realtor told him to asked $225K he told the realtor to list it for $275K, he was told he was crazy, but they did what he wanted. They sold the home in a couple days for $295K.

It is nuts!

I watch Banker & Tradesman- an excellent publication of RE transactions, tax liens and the like. While it lists information that I think should be a bit harder to find, it's quite comprehensive with the expense history.

I am amazed when I see/hear of people 50+ taking mortgages of $200K on. Seems like a lot of later year pressure

OM

I've seen a lot of millennial (my people) buying homes recently...I thought our generation agreed to pretend we're broke and have no money but everyone in my age group is spending half a million on these starter homes. hmm..

I have been trying to hunker down and fix up the right sized place we live in and get ready for later years. Had a friend that sold his house and thought he was in the cat bird seat but is now watching everything climb in price, looking for a replacement. I am a little interested in the solar options and trying to do remodeling in a sensible fashion. Fortunately the shop is separate from the house so if we have a house fire we don't lose the good stuff.

Wayne Koppa
Grayling, MI
#71,449

On the other hand- my son is buying a condominium apartment on the upper west side of NYC and the price, though crazy to sensible people, is lower than it might be at any other time!

I am in the building trades in the "Lakes Region " of NH. This craz started in late March of last year and hasn't stopped. Materials and labor are up over 230% over a year ago. I recently built a new home prior to the pandemic flight, and figured if I was going to build to day, it would cost another 150 thousand just for the same house. CDX plywood 5/8" thick is up over $50.00 a sheet, where I paid $21.00 a sheet 1 1/2 years ago, material quotes from my supplier are only good for 48 hrs. My friends in real estate tell me it's out of hand , list an offering price and watch it climb like Game Stop stock, every sale is being co brooked ,so if you think they are making money they aren't. It's beginning of May and the traffic is like July, AAAAHHH. They all came to change their life style ,but brought it with them, and think we should change. I say hold on to your hat, because when these people feel safe to move back from where they came, the crash comes whaaahoo. I told my banker get ready for the voluntary foreclosures, just like the crash in 1994.

crows said:

I am in the building trades in the "Lakes Region " of NH. This craz started in late March of last year and hasn't stopped. Materials and labor are up over 230% over a year ago. I recently built a new home prior to the pandemic flight, and figured if I was going to build to day, it would cost another 150 thousand just for the same house. CDX plywood 5/8" thick is up over $50.00 a sheet, where I paid $21.00 a sheet 1 1/2 years ago, material quotes from my supplier are only good for 48 hrs. My friends in real estate tell me it's out of hand , list an offering price and watch it climb like Game Stop stock, every sale is being co brooked ,so if you think they are making money they aren't. It's beginning of May and the traffic is like July, AAAAHHH. They all came to change their life style ,but brought it with them, and think we should change. I say hold on to your hat, because when these people feel safe to move back from where they came, the crash comes whaaahoo. I told my banker get ready for the voluntary foreclosures, just like the crash in 1994.

Click to expand...

You and I should go for a ride & Lunch. we're in a similar industry but I'm over in Sunapee. Very similar situation here. I have a lot of folks born and raised here picking up and moving to Florida early because their homes are worth a lot more than they ever expected.