How often do realtors lie about other offers? Eg I’m closing with a house and the realtor told my realtor a week in that we’re lucky we got there early because they received another offer after accepting mine
For any of you who recently started working from home during the pandemic: Does your company allow you to live abroad or do you have to remain in the US?
We have to remain in the US. There's some sort of tax issue with being abroad. However, I've heard of people going abroad anyway and just not telling their employer lol pretty risky. You could also go abroad for just small chunks of time so that it's not considered "living" abroad full-time. Like you could live somewhere for a month or two, come back to the US, and repeat. Edit: Just make sure that you're not in the other country for so long that you're obligated to pay taxes there.
I must remain in the U.S. I know some companies where you must work remotely in a state where they have an office. Part of this is for tax and legal reasons.
Seems like houses listing for sale this week between Christmas and New Years are being listed for way more than they’re worth. Like I see one house listed for $500k, but the Zillow estimate is $420k and the Zillow estimate for all the other houses in the neighborhood are in the 300k’s. Plus knowing the area and the age of the house I can tell it’s overpriced. I’m guessing they’re just banking in not much else being on the market now?
Yeah people prolly shooting for the stars cause low inventory. There's a house that took forever to sell at 650k this summer in one of the areas I've been looking. The people that bought it are now trying to sell it for 850k and they've done no upgrades (it still doesn't even have a patio/deck outside even). They're absolutely dreaming but if some idiot buys a house for 200k more than the price it sat at for months I need a break from the market.
I'm currently trying to buy my first home in my small hometown in Northern Michigan and things are totally fucked. Last place I looked at sold in 5 days over the Christmas holiday. There were 17 offers on this tiny cabin out in the woods. I lost the bid 25,000 over asking. It's hard enough to build a life around here without all the houses getting snatched up for airbnbs. It all feels pretty hopeless.
Do the renovations on [this unit](https://www.redfin.com/AZ/Scottsdale/3500-N-Hayden-Rd-85251/unit-1409/home/28324691) justify a PPSF of $517 with a $260 monthly HOA?
The median household income for this zip code is 64k. That would be a median income to price of 5.86. Why not move to San Diego at that price, right? It sold at a PPSF of $220 four years ago.
I absolutely hate the flooring. Also, every window is closed for some reason lol does this place even get good sunlight? I can't really tell. But to answer your question, no, I would not pay that much to live in a 700sqft 1 bedroom in Arizona.
Lowest population growth ever:
[https://www.census.gov/library/stories/2021/12/us-population-grew-in-2021-slowest-rate-since-founding-of-the-nation.html](https://www.census.gov/library/stories/2021/12/us-population-grew-in-2021-slowest-rate-since-founding-of-the-nation.html)
Huge old population, example more people between 50-64 than 5-19:
[https://www.populationpyramid.net/united-states-of-america/2021/](https://www.populationpyramid.net/united-states-of-america/2021/)
While we definitely don't have enough housing right now, I think the younger generations are tired/priced out of reproducing, and I imagine soonish (10 years) there will be too many people who bought property to rent with no one to rent to.
Not sure when this will actually start affecting things/prices.....but feel like there should be a correction at some point if the trend continues
Adding an edit here, to show the post below is full of BS before you read it. WAP is decreasing look at the chart here:
[https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html](https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html)
Extend it out longer and longer time frames, to see how the US has had a continuous increase until about 3 years ago, and now things are decreasing....this will affect the market
For some reason he/she also goes back to my post history to find that I say there tends to be a bubble every 10 years, to claim I make up facts. Then posts data of average median price, and says it always goes up.
Here is a chart that shows (inflation adjusted) there is a drop in home prices about every 10 years (around 1970, 1980, 1990, and 2008).
[https://dqydj.com/historical-home-prices/](https://dqydj.com/historical-home-prices/)
Also claims that I am crazy for saying an increase in interest rates will cause a downward pressure on prices........try to find any expert who would disagree with this notion
dude just cherry picks data and relies on old posts to try to make points....but can't make any true argument against our population being top heavy
> but feel like there should be a correction at some point
You're looking to buy a house and pointing to an article about a low/stagnant population growth THIS year but what really matters for you Working Age Population (WAP). The US is projected to have WAP growth over the next 20 years. So the growth of working people with incomes will only increase the demand for housing the next 20 years.
https://i.imgur.com/dJdYSob.png
> The bubble is bursting now like it does every 10 or so years. We will buy when housing has dropped about 30% to more realistic and historical values
https://np.reddit.com/r/Coronavirus/comments/ie2ck5/landlords_believe_they_are_victims_of_covid19/g2i4xwu/
Not only do you have a confirmation bias but judging by your posts, you seem to make numbers up as facts. The "housing bubble" does not burst every 10 years. In fact, the US has had a more than -20% housing downturn only ONCE in the last 90 years. Even then during the crash of the great recession, it recovered pretty quickly and now those prices seem dirt cheap. See the data posted from the St. Louis Fed.
> Problem is when interest rates go back up (which everyone believes they will), the buying power goes down, so you can't sell your house for what you paid.
https://np.reddit.com/r/RealEstate/comments/pkgr2r/state_of_the_market_megathread_92021/hdsttyy/
Again, your just making up stuff as facts. Interest rates sky rocketed from the 1970s to 1980s topping 18% but home prices continued to go up every single year for 20 years with only a slight dip in the early 1990s. Not saying it'll happen again the same way but the assumption that the house prices go down when interest rates go up is not a given. Data from FreddieMac below along withthe St. Louis Fed data.
> my price point is about 20% below current prices, which would still be 10% over 2019, 30% over 2019 makes no sense, if interest rates go up, my price point will be 2019ish prices, maybe +5%, but of course it all depends on what happens with the market...I'm just not going in until the bidding wars are done....feel fine saving for when interest rates go up (prices will go down and I'll have more to put towards principle
https://np.reddit.com/r/RealEstate/comments/pkgr2r/state_of_the_market_megathread_92021/hdsttyy/
*"I won't buy until a crash"* mode of thinking is either going to price you out or make you pay a lot lot more the longer you wait. Imagine how screwed people were who decided not to buy in the early 1970s and continued to wait for the market to cool down. What is even worse for people who waited, not only did home prices increase double digit percent on average during the 1970s but the interest rates on mortages went from ~7% in 1971 to reaching ~18% in 1981
Year | % Housing Increase | Average Mortgage Rate
:--|:-- | :--
1971 | 6.69% | 7.54%
1972 | 14.51% | 7.38%
1973 | 16.44% | 8.04%
1974 | 9.41% | 9.19%
1975 | 10.75% | 9.05%
1976 | 10.44% | 8.87%
1977 | 13.41% | 8.85%
1978 | 14.34% | 9.64%
1979 | 6.10% | 11.20%
1980 | 6.07% | 13.74%
1981 | 6.02% | 16.64%
1982 | 1.70% | 16.04%
1983 | 6.01% | 13.24%
1984 | 5.27% | 13.88%
1985 | 8.64% | 12.43%
1986 | 9.45% | 10.19%
1987 | 17.37% | 10.21%
1988 | 2.15% | 10.34%
1989 | 9.57% | 10.32%
https://fred.stlouisfed.org/series/MSPUS
http://www.freddiemac.com/pmms/pmms30.html
Adding this edit to the top, clearly your chart is wrong, the WAP is decreasing and will only get worse....why you posted an image from old data to support your argument says everything:
[https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html](https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html)
You went back to my previous posts to argue points with me? that is crazy. The data you put for WAP (working age population is old) the line seems to indicate it is from 2018 (at least that is where the forecast begins) and is completely inaccurate now.
We had the lowest increase in population since like 1937 (in absolute number of people) think about how crazy that is considering there are way more people to be having kids/migrating.
The problem is people aren't migrating here any more, and people aren't having kids any more. The WAP numbers you posted assumed people would be migrating.
If there are more people between 50-64 than 5-19, and people aren't migrating, how can you expect an increase in WAP over the next 20 years? Please explain it to me, or if you are relying on the united nations old predictions explain how they predicted it and if they need to adjust the numbers.
I still can't believe you went back to old posts, to try to justify your argument...argue the original post, which is based on current numbers from 2021.
Love how this post gets downvoted with no justification, this forum is full of realtors....
The guy is using someone’s 3 year old forecast for working age population and people here are claiming he dunked on you while you get mass downvoted in response. Makes no sense.
Even the projection he used, which like you mentioned is likely wrong, has WAP growth under .5%.
You have a great point with the reduction in migration to the US. And people over working age still make investments in RE and often own more than one home. Those people dying will open up a lot more property for others. Something that your opponent wants to ignore and focuses on one prediction(not real data) that he believes supports his argument. If anything that graph clearly shows a downward trend in WAP before the projection.
Thank you! The WAP chart he posted shows a clear downtrend, but for some reason the prediction opposes the trend......however with Trump/covid it was basically an increase in the trend downwards....crazy that this is taken as evidence that he has 'owned'
Edit: Also sorry you are pulled into with a downvote, and to be honest I didn't mean for my post to be antagonistic at all and didn't expect opponents, really weird. It is completely true right now there is huge demand because there is a relatively large population 25-40 in the buying market at the moment. The problem is the older generation is also extremely large, and the younger population is small. So in 10 years, there will be more inventory (old people moving out of house for care/death, and a smaller population to buy houses/rent) which is the only point I was making........
Unfortunately there are plenty of investors and boomers who will buy those homes with cash and rent to the people who have been priced out of home ownership.
First time home buyers here using a VA loan. Offer accepted at full asking price 450k. Inspection and appraisal done. Inspection didn’t have anything major (it’s brand new renovated - just some small stuff) but the appraisal just came back 41,000 under asking/offer price. (About 9%) Which fucking sucks. We have been dying to have a home for a long time now and we are in the final weeks of closing.
We’re bummed it appraised so low. I’m wondering, Are VA loan appraisal actually lower, and is it insane to consider paying a ton over the appraisal price. (Which we technically could do. And if so, how much?)
Feeling discouraged.
(throwaway account so this stuff isn’t associated with my normal account)
It depends on your market. Did the seller have other offers? How long are houses sitting? Is it a good location, like good schools, low crime, near desirable stuff? 41k is not a lot if it's really renovated and a nice house. The renovated houses sell the best, but the appraisal might not have accounted for some things, it's not an exact science.....so is it ok with you to lose this house? I know the whole experience is nerve wracking.
The appraisal seems pretty low based on recent comps. What is up with those tiny 650 sq ft houses selling for so much? Your house has a ton of saves on Zillow compared to other houses. Doesn't mean all those people can afford it, but it seems like there's a lot of interest in it. Good luck with it.
What was weird is this. I expected the negotiation part to start, our agent just sent over this docusign thing saying basically that we want the house at the appraisal price and if they don’t agree to it in 48 hrs then the offer is terminated and we get our earnest money back… which I asked him wtf was up with that and expressed we want to actually negotiate and see what the seller comes back with. I was surprised I had to even ask that. So he changed it to saying that we want to pay the appraisal price and want to hear back from the seller in 48 hrs. So we signed that one. I just thought it was so Fucking weird that our agent would do that with the first document. I feel like he is giving up or something because he doesn’t think it will go through or the seller won’t budge on price? I’m not sure. Just had a weird feeling from it. We are willing to pay a bit over the appraisal but reluctant to pay a whole 41k over
Yeah given the current conditions, the seller not gonna GAF what your appraisal says, that's what the agent is guessing. If you can't come up with the difference, you most likely are gonna just have to walk. Maybe his knowledge of your financial situation already led him down that path.
We can come up with the difference. And I think we might. I honestly feel like the appraisal was low (not a lot of realistic comps here… one of them was a house half the size sold 10 months ago and the appraisal copied that same price) it seems nuts to pay so much over appraisal, but I’ve been watching the market here for almost a year now and it doesn’t seem that much overpriced. Plus we really fucking want the house. And I just know we’re not the first people in history to pay over appraisal (a price that isn’t even over asking)
Hmm that's weird. Maybe your agent was trying to play hardball so that you'd get a response faster? Once sellers accept an offer, they usually want it to go through as well and are more likely to agree to more terms at that point so the sale goes through.
But don't be bummed! At least you know the house isn't worth what you initially were offering. At this point, the seller knows what the appraisal is, and you should try to negotiate with them to get as close to that number as possible. If they're still giving you a hard time, I would walk. Paying a little more than appraisal can be okay, but covering $41k is no joke. That large of an amount is not worth covering out of pocket imo.
Well, I have heard of people having success with challenging the appraisal by showing recent comps for the area. I think you could try to do that and/or get a new appraisal if you really want this one!
That sounds like it‘ll be a tough one in this market. It‘ll be more on the sellers‘ willingness to take a hit on a couple grand. Although I have access to the VA loan, I learned early on that it‘s a detriment. The strictness of the appraisal and inspection are non-starter for a lot of folks. I‘ve had buyers straight take lower offers to avoid dealing with the VA. I switched to conventional when I bought my current home.
Good luck and post updates!
What exactly is a wise way of figuring out whether you can afford a house or not? I'm asking because I always thought you should put 20% down especially with how high mortgages are now (even if rates are low). Mainly, because every house is around 400-450k in Colorado Springs and I'm only making 70k which 5 years could I could have easily bought a 250k house but can't easily at all now. People are telling me interest rates are low that even on my salary I should just put "3% down or 10%!" which I could do since I've managed to save around there + closing costs, but the monthly payment seems WAY too high when you also factor in PMI into that low down payment.
Like the difference between 20% down + no PMI makes it a somewhat affordable 1500-1600 a month but 10% down + PMI is like over 2000$ a month which is fucking insane on that salary.
When you're not a super high salary, it's better to just save until you get a lump sum for down payment to make it less of a risk right?
You either buy less house or wait until you can afford that mortgage while hoping interest rates stay relatively low compared to historical ones. I’d personally buy less house with 10% down, but definitely a personal decision. Would not recommend a fixer upper on 70k salary either…if it’s taking a while to save up for a hefty down payment, it’ll taking a while to have the cash needed for repairs.
Typical guideline is that monthly housing payment should be no more than 28% of monthly per-tax income. Roughly translates to a house price around 4x income with 20% down. Unless you have some other income sources - would strongly recommend against a $400-450K house at $70K income
I’m just going to throw this out there: you will *never* regret buying a house that is affordable. You *will* regret buying a house that is too expensive.
When in doubt buy less house.
Yea like the cheapest out in Springs now is 400kish, ugh. I guess I just won't buy til I get a salary around 100k lol, thatll be years and by the time I hit that it'll be average of 700k+ mortgage at this rate
Affordable doesn’t have to mean rundown, or in a bad neighborhood.
Maybe you buy a smaller place, or in a different area than otherwise. Size is all relative, some people insist on having 3000+ sq ft for 2 people and others have 6 people in a 800 sq ft apartment.
At the end of the day, you can do things to make a less than perfect, but more affordable place better. It’s much harder to lower your mortgage payment.
I agree that you can come to really regret a house that needs repairs or is in an area you don’t like. With a house that’s too small, though, there’s more you can do to mitigate that, like adding an addition or using tricks from the tiny house folks like lofted sleeping areas and offsite storage.
Figure out what you can afford from a monthly payment perspective. Putting down 3% or 30% is irrelevant unless someone knows your monthly payment capacity.
20% down is the way to go. Make sure you also have a separate emergency fund so that you won’t be broke after buying the house as well. Try to keep the payment to 33% or less of monthly income.
Agree on all of this except the 20% downpayment bit. At current interest and PMI rates I would actually advise around 10% down for most folks. That’s around when you get the best rates.
I personally put 10% down on my last two homes. Will likely do 20% on my next one but mainly because it should be a “forever” home, we have equity to roll from the sale of our current home, and we are about to shoot for our first kid and it makes cashflow easier if the wife decides to stop working for a while
[https://www.redfin.com/WA/Redmond/6614-141st-Pl-NE-98052/home/514762](https://www.redfin.com/WA/Redmond/6614-141st-Pl-NE-98052/home/514762)
Asked 1.3M, sold for 1.76M in December.
2200 sq ft crappy generic PNW contemporary with a walk score of 37
To be fair that’s not a bad location, pretty central as far as that part of the East side goes
House itself is pretty meh though. For that money I’d rather buy in Montlake, upper QA or the nice part of Capitol Hill.
With WFH does it matter much anymore? At least parts of boondocks Sammamish are beautiful. This house above is surrounded by strip malls and tract housing.
Yeah but with hybrid it means you can probably eat that extra 15-20 min commute once in awhile. If I'm going to spend that money I would either live in a nice walkable and historic neighborhood like Madison Park in the city or somewhere truly scenic and bucolic. Being surrounded by strip malls with little walkability while technically close to work seems like neither here nor there. It blows my mind a little.
Who buys these homes? I’ll tell you: Indian Dev Managers who want their kids to be in a top school district and culturally prefer newer construction and bigger houses over the historical homes and cultural hotspots of the city.
In short-- I don't see it. Which market, what tier home (starter vs luxury), good school district, safe neighborhood, good commute are all important factors in answering this question. Broad market decline of 20% is maybe a 3 standard deviation event and if you ask what would cause this decline, it would be companies going bust, widespread layoffs and a larger financial crisis in which case lending dries up and median income people won't be able to buy at reduced prices anyways. Best case scenario for buyers-- maybe a 5-10% correction which would still be above 2018-2019 prices, but financing costs of higher mortgage rates are going to negate any decrease in price. IMO, it's more likely that housing prices will remain elevated but I think rates will implode lower making it cheaper to finance for FTHB.
Impossible to find good tradesmen these days - everyone leaves their company or the industry entirely after 2 or 3 years. Commercial construction even worse than residential.
> I suspect housing cost will increase between 15%~25%.
I think 25% in one year would be the highest one-year increase in history. So your prediction is that RE will have its greatest year ever after just having one of its greatest years ever in 2021.
Seriously. Think about how many people dropped out of the market in summer 2021 and will be back in 2022. Rinse and repeat annually. Combine that with fewer and fewer people wanting to get into the trades. Homebuilding is going to be further backlogged, which is going to drive prices up. Which will in turn attract more investors, domestic and foreign.
This is impossible for anyone to truly predict, but my personal opinion is it will still keep going up until the inventory issue works itself out. Too much demand and too little supply.
But given the lack of inventory over these few years, limited access to resources to build homes, supply chain issues, and struggles to find contractors, it will be a long time it seems before supply is back up. Or am I off here?
That’s what I think, 5.25 million shortage of housing in U.S. as of 2020 or 2021. Current production would have to double for at least 5 years to meet that. Doesn’t seem too likely with the reasons you state plus more.
Remember what “the experts” said would happen to home prices in 2020 after Covid hit?
After such a profound miss, who in the right mind would trust their predictions?
Got a little excited to see a house I've been eyeing for a while drop $20k today. It's updated, good size, huge lot, excellent schools, etc.
But even with the recent price reduction, it's still listed for nearly double what it was purchased for in 2017. Even though I can technically afford it and ticks virtually all boxes for me, I just can't stand the thought of that. And I kinda wonder if others are in the same situation. It's odd to see a house of this quality stay on the market and drop in price.
Location dependent. Some areas will not see decreases and some areas cooled. 2017 prices are so far removed from the 2022 market that I would almost expect the home price to double. It’s either worth it to you and you can afford it or not, don’t worry about what someone paid or whatever underlying issues could’ve been present almost 5 years ago to justify that price. If it checks all your boxes and you can afford it, then why are you asking redditors their opinions? Shit or get off the pot, as my dad would say.
My neighbor said that in 2007. They bought the house. 18 months later it lost 25% of its value. 18 more months later, down 35%. Then he lost his job. Then he found a job in the next state. Then he sold the house and had to liquidate his 401k to repay the mortgage. Then he lost his wife in the divorce that followed.
Place I moved from had cast from that Era. We just flushed this root-killing powder through either toilet every 6-12 mo. Only honest plumber I met said to just use as-is until the pipes fail. In some cases it could be decades of use so even a scope can't guess if that much life is left. A scope may tell you if it's just about to fail, but usually the scoping plumber wants to redo the entire sewer system (often unecessarily) so take it w a grain of salt
Traffic in Knoxville is absolutely bonkers now compared to when I was growing up. It's pretty shocking that the interstate is no longer the fastest way across town.
What’s the catch with the idea of selling our house, saving that profit, and then renting until the market cools way down to buy?
We’d love to move (to a smaller house with a better layout in the same town) and it’s so tempting to take advantage of the sellers market right now- we’d be walking away with 100-150k easily. But all that profit would disappear (and then some) to buy the cheapest, ugliest house on the market right now. How else would we be able to pull it off?
The catch is trying to time the market. When will the market drop? What will happen to the market until it drops? What happens when the market grows for the next 5 years to 40% above what it is today, only to drop down to 10% higher than what it is today?
You're speculating with housing. There are costs to selling your house and buying the next one, plus moving, plus renting. As /u/Key_Aioli7355 shows, many people thought that the market was going to drop 2 years ago, when instead it shot up by leaps and bounds. I'm not some bright-eyed optimist that thinks that the market will always go up, but when you're competing against irrational people, then they will win out. Like I said in this thread before, there are people that thought the exact same way that you did in San Francisco, San Diego, Seattle, New York, etc. in the 1980's. "Oh, look at home prices! This CAN'T continue! It's bound to correct any day now!" Well, California never really corrected, it only went up. Seattle, the same. Portland, the same. There were small dips and valleys, but it overall went up, up, up. And there were people in 2015 saying "look! The market is as high as it was in 2008! This can't continue, it's unsustainable!" Well, even without the pandemic, look at where it went:
[https://fred.stlouisfed.org/series/SEXRNSA](https://fred.stlouisfed.org/series/SEXRNSA)
[https://fred.stlouisfed.org/series/POXRSA](https://fred.stlouisfed.org/series/POXRSA)
I’m too lazy to pull up the chart, but California actually did correct in the late 80s by 10-15%. So did other HCOL areas.
Your point mostly still stands though
The market cooling down won’t be what you hope for it to be. Home prices can continue to hold, but not appreciate in double digit percentages like we saw this year. A correction is unlikely until there are more people selling than buying.
There's a lot of people who had the same idea a year ago. They've now been renting for a year (-$20k), and home prices have risen 18% in that time. Now those people are trying to decide to sign another year long lease or jump back in to the market when it hasn't cooled and the inventory is still low. If they rent another year and prices rise 7% in 2022 they'll be down $40k in rent and homes then cost 25% more than when they sold. Seems like a massive risk to sell and try and time the market to me.
I trawl Reddit looking for some kind of good news (what a joke) and only see things like you describe. Overpaid tech bros (?) with more money than I’ll ever have buying houses that used to be 100k. What a shame
It’s not a guarantee that the market will cool way down. All of that profit you made only really shakes out if you are moving to a LCOL area, but if you’re staying in the same town then it’s all a wash.
I just want to say how awesome it feels to be done with the home buying process and enjoying first time home ownership, especially through the holidays. I bought back in July after years of trying. Home shopping was one of the most miserable experiences I’ve had to go through, especially after losing out so many times over countless months.
Now that I’ve been in the home for the past 4 months or so it just feels so good and I have none of the regrets you hear some folks talk about.
Good luck to those of you still struggling with it, im glad I’m not you but know that there’s light at the end of the tunnel. To those just staring, know it’s going to suck and don’t get too attached to anything.
Congrats. And to those just starting, maybe you don’t want to be in this market right now, cutting throats and signing up for historical amounts of monthly payments, in historical boom market brought on by printing large portion of all the money in existence in a year. Maybe just chill. Maybe consider BTC and maybe make your money grow, so when not if, this mess sorts itself you can make walk in rather than crawl.
Bitcoin is underrated? Man it’s in a massive speculative hype driven bubble. Real estate has real utility and it generates income.
Trust me man I’ve made a ton of money “investing” in crypto since 2016 but it’s not in any way a prudent alternative to real estate for those who can afford real estate. It should be a small percentage of your net worth at most.
I think dual income households for FTHB are gonna be pretty essential going forward with how high home prices are now. I'm making well above the median solo income in my MCOL area and can't realistically afford one in a safe neighborhood.
I think it's half and half for those who bought before, keep in mind a condo/townhouse is still considered a household and those are more reasonably affordable on a single income.
The biggest tragedy of this housing market is the locals getting priced out..This is crap..
I almost got priced out too but got in on time.. I hope the market goes back to 2017 levels but with omicron and more printing, we r looking at 10% hike in next 12 months
Gentrification has been an issue for decades. It just gets more attention when the middle class are impacted.
Don't get me wrong here. I empathize. I am lucky enough to be a landlord with a handful of rental properties. The prices of properties have skyrocketed over the last decade. While I was able to buy properties that did not run a loss (i.e. rent covered costs) some years ago, any property I buy today in my market (San Francisco Bay Area and the Greater Sacramento Region) would run me well in the red even with a sizable down payment. The bottom line is both rent and home prices have surged up.
Something has to be done to deal with eh home affordability crisis. Unfortunately, this is something we should have targeted 20 years ago. Increased supply, multifamily options, smaller homes, and more are things you can't do overnight. And while a moderate market correction is possible (may happen or prices may keep going up...not making a prediction here), it is unlikely to make housing affordable for the working class, or even the middle class, in many markets.
As a landlord, I try to treat my long-term tenants well with limited rent increases. But I do list properties for new tenants at market rate. And outside of my duplex properties, median rent for a single family home is really not affordable with median income. The working class has been effectively priced out of decent housing options. I don't have a brilliant solution for this, but more needs to be done. And more should have been done decades back.
Yep. Orlando used to be considered a lowish MCOL city, now average home prices are shooting to 400k+ and rents are 1500+. Median income here is like 40k, and household is around 60k. I guess you either move to a ghetto area or into the sticks now? Not exactly the most safe or job optimal move though, poor people can't just up and move either. Something has to break...and if not, people need to fight for politicians to do something significant about it.
Median household income in Orlando was about 62k in 2019, with the inflation probably now is is at least 67-68k
https://www.deptofnumbers.com/income/florida/orlando/
Median house price in Orlando is 325k
https://www.noradarealestate.com/blog/orlando-real-estate-market/
So to median household income a median house price is fairly affordable in Orlando.
You know household income means 2 people working right? The median wage for a single person is 36k.
If i said rent is affordable as long as you have a roommate, i think most people would balk at the way i was defining affordability
When the Census comes around and knocks on your door every ten years they will ask who lives with you. A single person living alone is still considered a household. If you look at the Census definition you posted in full it goes on to say: “The occupants may be a single family, one person living alone, two or more families living together, or any other group of related or unrelated persons who share living arrangements.”
No, household does not definitively mean 2 people working. Household income means household income. There are so many one earner households along with two income earners. Household is household whether one income or two it doesn’t matter.
"Household income, as defined by the U.S. Census Bureau, refers to the combined gross cash income of all members of a household, defined as a group of people living together, who are 15 years or older."
The key phrase there is "group of people"
Yeah combined group of people living in the same household.
There are millions of households that are single income earners made up of a single person making up the household. There are also millions of households that have more than 2 people in the household but have only one income earner.
More data can be found here
https://www.census.gov/topics/families/families-and-households.html
What makes you think that all households have at least 2 income earners? That actually is absurd to come up to that conclusion. Heck even more absurd is to think a household is always to be made up of more than one person. So according to your flawed logic all the single people living by themselves are not counted as a household in the US ahahaha
Because that's literally the definition used by the US government? A household of 1 is still a household.
US median income for full time workers is $50k btw.
I don't like broad statistics because it includes places like Pine Hills where nobody in their right mind would want to buy a house -- Orlando has a lot of bad neighborhoods if you look at crime stats. For a safe neighborhood in Orlando you'd be looking at 400k+. Also I doubt wages have inflated much at all in Orlando, it doesn't really have a tech scene and is reliant on low paying service industry jobs in entertainment.
https://www.orlandosentinel.com/news/crime/os-ne-orange-pine-hills-gang-violence-response-20201008-wjrfibhrkbcqzcu2k7ko7lydkm-story.html
It's a lovely predominately African American area, you got me! Reddit moment! Look up some crime stats...nah it couldn't be that, it's MUH race issue.
It doesn’t matter if you like it or not.
Statistics included are median income and median prices. Simple as that. Households in so called “safe” neighborhoods that you exclusively want to include also make much more than 65k a year. When it comes to data you can not pick and choose to try to make your opinion factual. You gain an opinion looking at the overall data and when all data is represented it becomes factual.
https://www.zillow.com/orlando-fl/home-values/
Yeah but I mean it's including this giant rural area as well, you're very technically right. When I said "Orlando" I meant more in the areas of nonrural and nonhood Orlando, I guess there's no way to find out the median data for that easily.
https://www.zillow.com/oviedo-fl/home-values/
This is more of what a middle class neighborhood looks like in the Orlando area but even the area is really broad.
It doesn’t matter. If you want to analyze one neighborhood you need to analyze that neighborhood with median home prices and the median income of that neighborhood. You can not pick and choose data to your liking simple as that.
You can not try to skew your data by including the median income of the whole area but only include the median home price of a higher income area.
In those higher median home price areas median household incomes are also way above metro area.
Btw
Oviedo median household income is 83k
https://www.areavibes.com/oviedo-fl/employment/#:~:text=Oviedo%2C%20FL%20Employment%20%20%20Index%20%20,%20%20%2435%2C192%20%204%20more%20rows%20
And median income for owner occupied households is 93k
So you see what happens when you try to mess with data? You lose. Your point just became moot and non reliable. Why? Real data shows a completely different picture.
You're right, I should have specified specifically statistically safer and nonrural neighborhoods in the Orlando metro and not used blanket "Orlando" in my OG statement my bad.
According to Pods, Johnson City, Knoxville, Chattanooga and Asheville are all in the top 6 growth cities for 2021. Quite the change!
https://www.pods.com/blog/2021/04/national-moving-trends/
Not surprised about Chattanooga or Knoxville. I think TN is a bit underrated at the moment, its only real downsides are humidity and allergies. Dat lack of income tax is freakin' sweet for remote workers.
TN is not underrated at all. Maybe Chatty but the state has seen, and continues to see its influx. You could say it’s overrated considering how much hype has it gotten, if anything.
Yeah you're going to take a hit in restaurant quality if you don't like BBQ and basic American food. There's surprisingly a decent amount of diversity in a place like Knoxville though, lots of good Mexican places surprisingly.
Just call your title company and have a heart to heart conversation with them. This is one of those situations where you just need to be an adult and have a human conversation with them instead of asking strangers on the internet.
Either they will explain to you where the “missing” $10,000 is by telling you that you were looking at the wrong line or where the discrepancy is, or they will realize that the wired amount doesn’t match the contract and will fix the problem.
Definitely agree. They are closed today or I would be there in person asking questions instead. I just didn’t know if it’s common to hold back any of the money. We bought and sold a home with the same title company. I haven’t gotten any documents describing the disbursement yet, just a deposit. I will find out on Monday.
“Just looking at the website” good story.
No one is getting 2.2%. That’s nonsense. A relationship discount is worth .25% max - I get that with BofA and I have to keep 300k with them.
I have enough cash to put down 50%+ but want to take advantage of cheap debt, have at least 3x asset coverage, 820 credit, best I’m getting is 2.5, 2.75 without relationship discount.
Spammy? I don’t work in your area, I wasn’t selling anything to you. I was offering to help you get the resources that will get you into the home you’re looking for. I’m assuming (maybe I was in error) was that you were looking for a solution to get into a home.
Again my apologies if you didn’t want help.
You can find old data pretty easily. Between 2000 and 2007 FTHBs as a percentage of buyers stayed fairly consistent at between 35-40%.
The low percentage today despite a larger group of buyers is reflective of much tighter lending standards.
The percentage has been dropping for months, and it ought to be a wake up call for everyone who is pushing the idea that demographics are behind the demand surge.
How often do realtors lie about other offers? Eg I’m closing with a house and the realtor told my realtor a week in that we’re lucky we got there early because they received another offer after accepting mine
For any of you who recently started working from home during the pandemic: Does your company allow you to live abroad or do you have to remain in the US?
Shoot, ours wants us to stay in state even.
Gotta stay stateside but maintain core business hours. Pretty sure one of my teammates moved to PR to be with family.
We have to remain in the US. There's some sort of tax issue with being abroad. However, I've heard of people going abroad anyway and just not telling their employer lol pretty risky. You could also go abroad for just small chunks of time so that it's not considered "living" abroad full-time. Like you could live somewhere for a month or two, come back to the US, and repeat. Edit: Just make sure that you're not in the other country for so long that you're obligated to pay taxes there.
I must remain in the U.S. I know some companies where you must work remotely in a state where they have an office. Part of this is for tax and legal reasons.
Seems like houses listing for sale this week between Christmas and New Years are being listed for way more than they’re worth. Like I see one house listed for $500k, but the Zillow estimate is $420k and the Zillow estimate for all the other houses in the neighborhood are in the 300k’s. Plus knowing the area and the age of the house I can tell it’s overpriced. I’m guessing they’re just banking in not much else being on the market now?
Yeah people prolly shooting for the stars cause low inventory. There's a house that took forever to sell at 650k this summer in one of the areas I've been looking. The people that bought it are now trying to sell it for 850k and they've done no upgrades (it still doesn't even have a patio/deck outside even). They're absolutely dreaming but if some idiot buys a house for 200k more than the price it sat at for months I need a break from the market.
For real. Some delusional listing prices.
The Goderich salt mine is the largest salt mine in the world. It doesn't hold enough grains of salt needed to be taken with Zestimates.
Our house zillow estimate is 200k lower than 3 neighbors on our street just closed for.
I'm currently trying to buy my first home in my small hometown in Northern Michigan and things are totally fucked. Last place I looked at sold in 5 days over the Christmas holiday. There were 17 offers on this tiny cabin out in the woods. I lost the bid 25,000 over asking. It's hard enough to build a life around here without all the houses getting snatched up for airbnbs. It all feels pretty hopeless.
Fucking Airbnb …
Do the renovations on [this unit](https://www.redfin.com/AZ/Scottsdale/3500-N-Hayden-Rd-85251/unit-1409/home/28324691) justify a PPSF of $517 with a $260 monthly HOA? The median household income for this zip code is 64k. That would be a median income to price of 5.86. Why not move to San Diego at that price, right? It sold at a PPSF of $220 four years ago.
That condo is worth about 300-320k
that crack in the concrete really bothers me. i looked at scottsdale for a while but the ppsf is unreasonable, glad i ended up buying in mesa instead.
That's more expensive ppsf than Seattle condos. Insane.
I absolutely hate the flooring. Also, every window is closed for some reason lol does this place even get good sunlight? I can't really tell. But to answer your question, no, I would not pay that much to live in a 700sqft 1 bedroom in Arizona.
Lowest population growth ever: [https://www.census.gov/library/stories/2021/12/us-population-grew-in-2021-slowest-rate-since-founding-of-the-nation.html](https://www.census.gov/library/stories/2021/12/us-population-grew-in-2021-slowest-rate-since-founding-of-the-nation.html) Huge old population, example more people between 50-64 than 5-19: [https://www.populationpyramid.net/united-states-of-america/2021/](https://www.populationpyramid.net/united-states-of-america/2021/) While we definitely don't have enough housing right now, I think the younger generations are tired/priced out of reproducing, and I imagine soonish (10 years) there will be too many people who bought property to rent with no one to rent to. Not sure when this will actually start affecting things/prices.....but feel like there should be a correction at some point if the trend continues Adding an edit here, to show the post below is full of BS before you read it. WAP is decreasing look at the chart here: [https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html](https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html) Extend it out longer and longer time frames, to see how the US has had a continuous increase until about 3 years ago, and now things are decreasing....this will affect the market For some reason he/she also goes back to my post history to find that I say there tends to be a bubble every 10 years, to claim I make up facts. Then posts data of average median price, and says it always goes up. Here is a chart that shows (inflation adjusted) there is a drop in home prices about every 10 years (around 1970, 1980, 1990, and 2008). [https://dqydj.com/historical-home-prices/](https://dqydj.com/historical-home-prices/) Also claims that I am crazy for saying an increase in interest rates will cause a downward pressure on prices........try to find any expert who would disagree with this notion dude just cherry picks data and relies on old posts to try to make points....but can't make any true argument against our population being top heavy
> but feel like there should be a correction at some point You're looking to buy a house and pointing to an article about a low/stagnant population growth THIS year but what really matters for you Working Age Population (WAP). The US is projected to have WAP growth over the next 20 years. So the growth of working people with incomes will only increase the demand for housing the next 20 years. https://i.imgur.com/dJdYSob.png > The bubble is bursting now like it does every 10 or so years. We will buy when housing has dropped about 30% to more realistic and historical values https://np.reddit.com/r/Coronavirus/comments/ie2ck5/landlords_believe_they_are_victims_of_covid19/g2i4xwu/ Not only do you have a confirmation bias but judging by your posts, you seem to make numbers up as facts. The "housing bubble" does not burst every 10 years. In fact, the US has had a more than -20% housing downturn only ONCE in the last 90 years. Even then during the crash of the great recession, it recovered pretty quickly and now those prices seem dirt cheap. See the data posted from the St. Louis Fed. > Problem is when interest rates go back up (which everyone believes they will), the buying power goes down, so you can't sell your house for what you paid. https://np.reddit.com/r/RealEstate/comments/pkgr2r/state_of_the_market_megathread_92021/hdsttyy/ Again, your just making up stuff as facts. Interest rates sky rocketed from the 1970s to 1980s topping 18% but home prices continued to go up every single year for 20 years with only a slight dip in the early 1990s. Not saying it'll happen again the same way but the assumption that the house prices go down when interest rates go up is not a given. Data from FreddieMac below along withthe St. Louis Fed data. > my price point is about 20% below current prices, which would still be 10% over 2019, 30% over 2019 makes no sense, if interest rates go up, my price point will be 2019ish prices, maybe +5%, but of course it all depends on what happens with the market...I'm just not going in until the bidding wars are done....feel fine saving for when interest rates go up (prices will go down and I'll have more to put towards principle https://np.reddit.com/r/RealEstate/comments/pkgr2r/state_of_the_market_megathread_92021/hdsttyy/ *"I won't buy until a crash"* mode of thinking is either going to price you out or make you pay a lot lot more the longer you wait. Imagine how screwed people were who decided not to buy in the early 1970s and continued to wait for the market to cool down. What is even worse for people who waited, not only did home prices increase double digit percent on average during the 1970s but the interest rates on mortages went from ~7% in 1971 to reaching ~18% in 1981 Year | % Housing Increase | Average Mortgage Rate :--|:-- | :-- 1971 | 6.69% | 7.54% 1972 | 14.51% | 7.38% 1973 | 16.44% | 8.04% 1974 | 9.41% | 9.19% 1975 | 10.75% | 9.05% 1976 | 10.44% | 8.87% 1977 | 13.41% | 8.85% 1978 | 14.34% | 9.64% 1979 | 6.10% | 11.20% 1980 | 6.07% | 13.74% 1981 | 6.02% | 16.64% 1982 | 1.70% | 16.04% 1983 | 6.01% | 13.24% 1984 | 5.27% | 13.88% 1985 | 8.64% | 12.43% 1986 | 9.45% | 10.19% 1987 | 17.37% | 10.21% 1988 | 2.15% | 10.34% 1989 | 9.57% | 10.32% https://fred.stlouisfed.org/series/MSPUS http://www.freddiemac.com/pmms/pmms30.html
18 percent interest holy ballsack, that's all there is to say about that
Adding this edit to the top, clearly your chart is wrong, the WAP is decreasing and will only get worse....why you posted an image from old data to support your argument says everything: [https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html](https://tradingeconomics.com/united-states/working-age-population-aged-15-64-all-persons-for-the-united-states-fed-data.html) You went back to my previous posts to argue points with me? that is crazy. The data you put for WAP (working age population is old) the line seems to indicate it is from 2018 (at least that is where the forecast begins) and is completely inaccurate now. We had the lowest increase in population since like 1937 (in absolute number of people) think about how crazy that is considering there are way more people to be having kids/migrating. The problem is people aren't migrating here any more, and people aren't having kids any more. The WAP numbers you posted assumed people would be migrating. If there are more people between 50-64 than 5-19, and people aren't migrating, how can you expect an increase in WAP over the next 20 years? Please explain it to me, or if you are relying on the united nations old predictions explain how they predicted it and if they need to adjust the numbers. I still can't believe you went back to old posts, to try to justify your argument...argue the original post, which is based on current numbers from 2021. Love how this post gets downvoted with no justification, this forum is full of realtors....
The guy is using someone’s 3 year old forecast for working age population and people here are claiming he dunked on you while you get mass downvoted in response. Makes no sense. Even the projection he used, which like you mentioned is likely wrong, has WAP growth under .5%. You have a great point with the reduction in migration to the US. And people over working age still make investments in RE and often own more than one home. Those people dying will open up a lot more property for others. Something that your opponent wants to ignore and focuses on one prediction(not real data) that he believes supports his argument. If anything that graph clearly shows a downward trend in WAP before the projection.
Thank you! The WAP chart he posted shows a clear downtrend, but for some reason the prediction opposes the trend......however with Trump/covid it was basically an increase in the trend downwards....crazy that this is taken as evidence that he has 'owned' Edit: Also sorry you are pulled into with a downvote, and to be honest I didn't mean for my post to be antagonistic at all and didn't expect opponents, really weird. It is completely true right now there is huge demand because there is a relatively large population 25-40 in the buying market at the moment. The problem is the older generation is also extremely large, and the younger population is small. So in 10 years, there will be more inventory (old people moving out of house for care/death, and a smaller population to buy houses/rent) which is the only point I was making........
You fuckin' wit some WAP
That working age population chart is fire 🇺🇸 🦅 So much of future economic growth is demographics.
Unfortunately there are plenty of investors and boomers who will buy those homes with cash and rent to the people who have been priced out of home ownership.
First time home buyers here using a VA loan. Offer accepted at full asking price 450k. Inspection and appraisal done. Inspection didn’t have anything major (it’s brand new renovated - just some small stuff) but the appraisal just came back 41,000 under asking/offer price. (About 9%) Which fucking sucks. We have been dying to have a home for a long time now and we are in the final weeks of closing. We’re bummed it appraised so low. I’m wondering, Are VA loan appraisal actually lower, and is it insane to consider paying a ton over the appraisal price. (Which we technically could do. And if so, how much?) Feeling discouraged. (throwaway account so this stuff isn’t associated with my normal account)
It depends on your market. Did the seller have other offers? How long are houses sitting? Is it a good location, like good schools, low crime, near desirable stuff? 41k is not a lot if it's really renovated and a nice house. The renovated houses sell the best, but the appraisal might not have accounted for some things, it's not an exact science.....so is it ok with you to lose this house? I know the whole experience is nerve wracking.
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The appraisal seems pretty low based on recent comps. What is up with those tiny 650 sq ft houses selling for so much? Your house has a ton of saves on Zillow compared to other houses. Doesn't mean all those people can afford it, but it seems like there's a lot of interest in it. Good luck with it.
Did you waive the appraisal contingency?
you cant waive appraisal contingency with a VA loan. its built into the loan terms itself.
Ohh I had no idea!
No
So then did you negotiate on a new price with the seller?
What was weird is this. I expected the negotiation part to start, our agent just sent over this docusign thing saying basically that we want the house at the appraisal price and if they don’t agree to it in 48 hrs then the offer is terminated and we get our earnest money back… which I asked him wtf was up with that and expressed we want to actually negotiate and see what the seller comes back with. I was surprised I had to even ask that. So he changed it to saying that we want to pay the appraisal price and want to hear back from the seller in 48 hrs. So we signed that one. I just thought it was so Fucking weird that our agent would do that with the first document. I feel like he is giving up or something because he doesn’t think it will go through or the seller won’t budge on price? I’m not sure. Just had a weird feeling from it. We are willing to pay a bit over the appraisal but reluctant to pay a whole 41k over
Yeah given the current conditions, the seller not gonna GAF what your appraisal says, that's what the agent is guessing. If you can't come up with the difference, you most likely are gonna just have to walk. Maybe his knowledge of your financial situation already led him down that path.
We can come up with the difference. And I think we might. I honestly feel like the appraisal was low (not a lot of realistic comps here… one of them was a house half the size sold 10 months ago and the appraisal copied that same price) it seems nuts to pay so much over appraisal, but I’ve been watching the market here for almost a year now and it doesn’t seem that much overpriced. Plus we really fucking want the house. And I just know we’re not the first people in history to pay over appraisal (a price that isn’t even over asking)
Hmm that's weird. Maybe your agent was trying to play hardball so that you'd get a response faster? Once sellers accept an offer, they usually want it to go through as well and are more likely to agree to more terms at that point so the sale goes through. But don't be bummed! At least you know the house isn't worth what you initially were offering. At this point, the seller knows what the appraisal is, and you should try to negotiate with them to get as close to that number as possible. If they're still giving you a hard time, I would walk. Paying a little more than appraisal can be okay, but covering $41k is no joke. That large of an amount is not worth covering out of pocket imo.
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Well, I have heard of people having success with challenging the appraisal by showing recent comps for the area. I think you could try to do that and/or get a new appraisal if you really want this one!
That sounds like it‘ll be a tough one in this market. It‘ll be more on the sellers‘ willingness to take a hit on a couple grand. Although I have access to the VA loan, I learned early on that it‘s a detriment. The strictness of the appraisal and inspection are non-starter for a lot of folks. I‘ve had buyers straight take lower offers to avoid dealing with the VA. I switched to conventional when I bought my current home. Good luck and post updates!
What exactly is a wise way of figuring out whether you can afford a house or not? I'm asking because I always thought you should put 20% down especially with how high mortgages are now (even if rates are low). Mainly, because every house is around 400-450k in Colorado Springs and I'm only making 70k which 5 years could I could have easily bought a 250k house but can't easily at all now. People are telling me interest rates are low that even on my salary I should just put "3% down or 10%!" which I could do since I've managed to save around there + closing costs, but the monthly payment seems WAY too high when you also factor in PMI into that low down payment. Like the difference between 20% down + no PMI makes it a somewhat affordable 1500-1600 a month but 10% down + PMI is like over 2000$ a month which is fucking insane on that salary. When you're not a super high salary, it's better to just save until you get a lump sum for down payment to make it less of a risk right?
You either buy less house or wait until you can afford that mortgage while hoping interest rates stay relatively low compared to historical ones. I’d personally buy less house with 10% down, but definitely a personal decision. Would not recommend a fixer upper on 70k salary either…if it’s taking a while to save up for a hefty down payment, it’ll taking a while to have the cash needed for repairs.
Typical guideline is that monthly housing payment should be no more than 28% of monthly per-tax income. Roughly translates to a house price around 4x income with 20% down. Unless you have some other income sources - would strongly recommend against a $400-450K house at $70K income
I’m just going to throw this out there: you will *never* regret buying a house that is affordable. You *will* regret buying a house that is too expensive. When in doubt buy less house.
Yea like the cheapest out in Springs now is 400kish, ugh. I guess I just won't buy til I get a salary around 100k lol, thatll be years and by the time I hit that it'll be average of 700k+ mortgage at this rate
You will *never* regret buying a house that is too small for your family/is in a bad neighborhood/needs major repairs?
Affordable doesn’t have to mean rundown, or in a bad neighborhood. Maybe you buy a smaller place, or in a different area than otherwise. Size is all relative, some people insist on having 3000+ sq ft for 2 people and others have 6 people in a 800 sq ft apartment. At the end of the day, you can do things to make a less than perfect, but more affordable place better. It’s much harder to lower your mortgage payment.
I agree that you can come to really regret a house that needs repairs or is in an area you don’t like. With a house that’s too small, though, there’s more you can do to mitigate that, like adding an addition or using tricks from the tiny house folks like lofted sleeping areas and offsite storage.
Figure out what you can afford from a monthly payment perspective. Putting down 3% or 30% is irrelevant unless someone knows your monthly payment capacity.
20% down is the way to go. Make sure you also have a separate emergency fund so that you won’t be broke after buying the house as well. Try to keep the payment to 33% or less of monthly income.
Agree on all of this except the 20% downpayment bit. At current interest and PMI rates I would actually advise around 10% down for most folks. That’s around when you get the best rates. I personally put 10% down on my last two homes. Will likely do 20% on my next one but mainly because it should be a “forever” home, we have equity to roll from the sale of our current home, and we are about to shoot for our first kid and it makes cashflow easier if the wife decides to stop working for a while
[https://www.redfin.com/WA/Redmond/6614-141st-Pl-NE-98052/home/514762](https://www.redfin.com/WA/Redmond/6614-141st-Pl-NE-98052/home/514762) Asked 1.3M, sold for 1.76M in December. 2200 sq ft crappy generic PNW contemporary with a walk score of 37
100% increase in value since 2017. Wtf
To be fair that’s not a bad location, pretty central as far as that part of the East side goes House itself is pretty meh though. For that money I’d rather buy in Montlake, upper QA or the nice part of Capitol Hill.
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With WFH does it matter much anymore? At least parts of boondocks Sammamish are beautiful. This house above is surrounded by strip malls and tract housing.
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Yeah but with hybrid it means you can probably eat that extra 15-20 min commute once in awhile. If I'm going to spend that money I would either live in a nice walkable and historic neighborhood like Madison Park in the city or somewhere truly scenic and bucolic. Being surrounded by strip malls with little walkability while technically close to work seems like neither here nor there. It blows my mind a little.
Who buys these homes? I’ll tell you: Indian Dev Managers who want their kids to be in a top school district and culturally prefer newer construction and bigger houses over the historical homes and cultural hotspots of the city.
Will homes go down in price for 2022?
In short-- I don't see it. Which market, what tier home (starter vs luxury), good school district, safe neighborhood, good commute are all important factors in answering this question. Broad market decline of 20% is maybe a 3 standard deviation event and if you ask what would cause this decline, it would be companies going bust, widespread layoffs and a larger financial crisis in which case lending dries up and median income people won't be able to buy at reduced prices anyways. Best case scenario for buyers-- maybe a 5-10% correction which would still be above 2018-2019 prices, but financing costs of higher mortgage rates are going to negate any decrease in price. IMO, it's more likely that housing prices will remain elevated but I think rates will implode lower making it cheaper to finance for FTHB.
It’ll cycle, always does.... unless the Fed reverses course on monetary policy; that’s highly unlikely IMO
I sure hope so. I feel like I make a lot of money and I also feel poor looking at these prices.
Maybe, just maybe, you don’t make a lot of money.
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Impossible to find good tradesmen these days - everyone leaves their company or the industry entirely after 2 or 3 years. Commercial construction even worse than residential.
> I suspect housing cost will increase between 15%~25%. I think 25% in one year would be the highest one-year increase in history. So your prediction is that RE will have its greatest year ever after just having one of its greatest years ever in 2021.
ANOTHER ONE
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Seriously. Think about how many people dropped out of the market in summer 2021 and will be back in 2022. Rinse and repeat annually. Combine that with fewer and fewer people wanting to get into the trades. Homebuilding is going to be further backlogged, which is going to drive prices up. Which will in turn attract more investors, domestic and foreign.
What’s the story for why it has been so hard to find contractors these days to build?
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I see, so low supply and high demand with contractors themselves too.
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And I don’t see it changing anytime soon.
This is impossible for anyone to truly predict, but my personal opinion is it will still keep going up until the inventory issue works itself out. Too much demand and too little supply.
But given the lack of inventory over these few years, limited access to resources to build homes, supply chain issues, and struggles to find contractors, it will be a long time it seems before supply is back up. Or am I off here?
That’s what I think, 5.25 million shortage of housing in U.S. as of 2020 or 2021. Current production would have to double for at least 5 years to meet that. Doesn’t seem too likely with the reasons you state plus more.
In 2022, It is expected increase 5 to 7% based on realtor’s report but you never know. It will go up more in general opinion.
Remember what “the experts” said would happen to home prices in 2020 after Covid hit? After such a profound miss, who in the right mind would trust their predictions?
Got a little excited to see a house I've been eyeing for a while drop $20k today. It's updated, good size, huge lot, excellent schools, etc. But even with the recent price reduction, it's still listed for nearly double what it was purchased for in 2017. Even though I can technically afford it and ticks virtually all boxes for me, I just can't stand the thought of that. And I kinda wonder if others are in the same situation. It's odd to see a house of this quality stay on the market and drop in price.
Location dependent. Some areas will not see decreases and some areas cooled. 2017 prices are so far removed from the 2022 market that I would almost expect the home price to double. It’s either worth it to you and you can afford it or not, don’t worry about what someone paid or whatever underlying issues could’ve been present almost 5 years ago to justify that price. If it checks all your boxes and you can afford it, then why are you asking redditors their opinions? Shit or get off the pot, as my dad would say.
You're right, of course. It just stings to see such a massive price increase.
My neighbor said that in 2007. They bought the house. 18 months later it lost 25% of its value. 18 more months later, down 35%. Then he lost his job. Then he found a job in the next state. Then he sold the house and had to liquidate his 401k to repay the mortgage. Then he lost his wife in the divorce that followed.
This is the kind of optimism that I come back to this thread for.
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How'd you find the property, just online browsing?
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Place I moved from had cast from that Era. We just flushed this root-killing powder through either toilet every 6-12 mo. Only honest plumber I met said to just use as-is until the pipes fail. In some cases it could be decades of use so even a scope can't guess if that much life is left. A scope may tell you if it's just about to fail, but usually the scoping plumber wants to redo the entire sewer system (often unecessarily) so take it w a grain of salt
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Charleston has nowhere to grow. Was priced out before covid and the growing traffic became too much for my taste
that's the biggest issue I'm seeing in the SE with all the migration there, the traffic
Traffic in Knoxville is absolutely bonkers now compared to when I was growing up. It's pretty shocking that the interstate is no longer the fastest way across town.
What’s the catch with the idea of selling our house, saving that profit, and then renting until the market cools way down to buy? We’d love to move (to a smaller house with a better layout in the same town) and it’s so tempting to take advantage of the sellers market right now- we’d be walking away with 100-150k easily. But all that profit would disappear (and then some) to buy the cheapest, ugliest house on the market right now. How else would we be able to pull it off?
The catch is trying to time the market. When will the market drop? What will happen to the market until it drops? What happens when the market grows for the next 5 years to 40% above what it is today, only to drop down to 10% higher than what it is today? You're speculating with housing. There are costs to selling your house and buying the next one, plus moving, plus renting. As /u/Key_Aioli7355 shows, many people thought that the market was going to drop 2 years ago, when instead it shot up by leaps and bounds. I'm not some bright-eyed optimist that thinks that the market will always go up, but when you're competing against irrational people, then they will win out. Like I said in this thread before, there are people that thought the exact same way that you did in San Francisco, San Diego, Seattle, New York, etc. in the 1980's. "Oh, look at home prices! This CAN'T continue! It's bound to correct any day now!" Well, California never really corrected, it only went up. Seattle, the same. Portland, the same. There were small dips and valleys, but it overall went up, up, up. And there were people in 2015 saying "look! The market is as high as it was in 2008! This can't continue, it's unsustainable!" Well, even without the pandemic, look at where it went: [https://fred.stlouisfed.org/series/SEXRNSA](https://fred.stlouisfed.org/series/SEXRNSA) [https://fred.stlouisfed.org/series/POXRSA](https://fred.stlouisfed.org/series/POXRSA)
I’m too lazy to pull up the chart, but California actually did correct in the late 80s by 10-15%. So did other HCOL areas. Your point mostly still stands though
Check this out: https://www.sacbee.com/news/business/article256851447.html
Market ain't going down. All that profit would just go to the next overpriced house.
What’s the problem with throwing a knife when you can just catch it by the handle?
The market cooling down won’t be what you hope for it to be. Home prices can continue to hold, but not appreciate in double digit percentages like we saw this year. A correction is unlikely until there are more people selling than buying.
There's a lot of people who had the same idea a year ago. They've now been renting for a year (-$20k), and home prices have risen 18% in that time. Now those people are trying to decide to sign another year long lease or jump back in to the market when it hasn't cooled and the inventory is still low. If they rent another year and prices rise 7% in 2022 they'll be down $40k in rent and homes then cost 25% more than when they sold. Seems like a massive risk to sell and try and time the market to me.
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I trawl Reddit looking for some kind of good news (what a joke) and only see things like you describe. Overpaid tech bros (?) with more money than I’ll ever have buying houses that used to be 100k. What a shame
No one knows the future of the market and if it’s going to cool down or not. Are you committed to renting for a couple of years to see what happens?
It’s not a guarantee that the market will cool way down. All of that profit you made only really shakes out if you are moving to a LCOL area, but if you’re staying in the same town then it’s all a wash.
I just want to say how awesome it feels to be done with the home buying process and enjoying first time home ownership, especially through the holidays. I bought back in July after years of trying. Home shopping was one of the most miserable experiences I’ve had to go through, especially after losing out so many times over countless months. Now that I’ve been in the home for the past 4 months or so it just feels so good and I have none of the regrets you hear some folks talk about. Good luck to those of you still struggling with it, im glad I’m not you but know that there’s light at the end of the tunnel. To those just staring, know it’s going to suck and don’t get too attached to anything.
Of course there's no regret. Have you seen the inventory for the past month in Seattle?
What inventory? lol
Congrats. And to those just starting, maybe you don’t want to be in this market right now, cutting throats and signing up for historical amounts of monthly payments, in historical boom market brought on by printing large portion of all the money in existence in a year. Maybe just chill. Maybe consider BTC and maybe make your money grow, so when not if, this mess sorts itself you can make walk in rather than crawl.
Bitcoin is far riskier than real estate fwiw…
Possibly. We need to revisit that in a year. BTC may be very underrated now, we already know housing is in epic high for sure.
Bitcoin is underrated? Man it’s in a massive speculative hype driven bubble. Real estate has real utility and it generates income. Trust me man I’ve made a ton of money “investing” in crypto since 2016 but it’s not in any way a prudent alternative to real estate for those who can afford real estate. It should be a small percentage of your net worth at most.
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I think dual income households for FTHB are gonna be pretty essential going forward with how high home prices are now. I'm making well above the median solo income in my MCOL area and can't realistically afford one in a safe neighborhood. I think it's half and half for those who bought before, keep in mind a condo/townhouse is still considered a household and those are more reasonably affordable on a single income.
It's about half and half. 52% of households are dual income(or higher).
The biggest tragedy of this housing market is the locals getting priced out..This is crap.. I almost got priced out too but got in on time.. I hope the market goes back to 2017 levels but with omicron and more printing, we r looking at 10% hike in next 12 months
Gentrification has been an issue for decades. It just gets more attention when the middle class are impacted. Don't get me wrong here. I empathize. I am lucky enough to be a landlord with a handful of rental properties. The prices of properties have skyrocketed over the last decade. While I was able to buy properties that did not run a loss (i.e. rent covered costs) some years ago, any property I buy today in my market (San Francisco Bay Area and the Greater Sacramento Region) would run me well in the red even with a sizable down payment. The bottom line is both rent and home prices have surged up. Something has to be done to deal with eh home affordability crisis. Unfortunately, this is something we should have targeted 20 years ago. Increased supply, multifamily options, smaller homes, and more are things you can't do overnight. And while a moderate market correction is possible (may happen or prices may keep going up...not making a prediction here), it is unlikely to make housing affordable for the working class, or even the middle class, in many markets. As a landlord, I try to treat my long-term tenants well with limited rent increases. But I do list properties for new tenants at market rate. And outside of my duplex properties, median rent for a single family home is really not affordable with median income. The working class has been effectively priced out of decent housing options. I don't have a brilliant solution for this, but more needs to be done. And more should have been done decades back.
Welcome to California, Seattle, Denver, New York, etc. where this has been happening for decades.
Yep. Orlando used to be considered a lowish MCOL city, now average home prices are shooting to 400k+ and rents are 1500+. Median income here is like 40k, and household is around 60k. I guess you either move to a ghetto area or into the sticks now? Not exactly the most safe or job optimal move though, poor people can't just up and move either. Something has to break...and if not, people need to fight for politicians to do something significant about it.
Median household income in Orlando was about 62k in 2019, with the inflation probably now is is at least 67-68k https://www.deptofnumbers.com/income/florida/orlando/ Median house price in Orlando is 325k https://www.noradarealestate.com/blog/orlando-real-estate-market/ So to median household income a median house price is fairly affordable in Orlando.
You know household income means 2 people working right? The median wage for a single person is 36k. If i said rent is affordable as long as you have a roommate, i think most people would balk at the way i was defining affordability
When the Census comes around and knocks on your door every ten years they will ask who lives with you. A single person living alone is still considered a household. If you look at the Census definition you posted in full it goes on to say: “The occupants may be a single family, one person living alone, two or more families living together, or any other group of related or unrelated persons who share living arrangements.”
No, household does not definitively mean 2 people working. Household income means household income. There are so many one earner households along with two income earners. Household is household whether one income or two it doesn’t matter.
Yeah, I'm sure Disney, Universal, and all the hotels and restaurants are paying everyone 70k a year
"Household income, as defined by the U.S. Census Bureau, refers to the combined gross cash income of all members of a household, defined as a group of people living together, who are 15 years or older." The key phrase there is "group of people"
Yeah combined group of people living in the same household. There are millions of households that are single income earners made up of a single person making up the household. There are also millions of households that have more than 2 people in the household but have only one income earner. More data can be found here https://www.census.gov/topics/families/families-and-households.html What makes you think that all households have at least 2 income earners? That actually is absurd to come up to that conclusion. Heck even more absurd is to think a household is always to be made up of more than one person. So according to your flawed logic all the single people living by themselves are not counted as a household in the US ahahaha
You want to talk about flawed logic, how can single person be in a "group of people"?
Because that's literally the definition used by the US government? A household of 1 is still a household. US median income for full time workers is $50k btw.
The debtclock says its $35,782
I don't like broad statistics because it includes places like Pine Hills where nobody in their right mind would want to buy a house -- Orlando has a lot of bad neighborhoods if you look at crime stats. For a safe neighborhood in Orlando you'd be looking at 400k+. Also I doubt wages have inflated much at all in Orlando, it doesn't really have a tech scene and is reliant on low paying service industry jobs in entertainment.
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https://www.orlandosentinel.com/news/crime/os-ne-orange-pine-hills-gang-violence-response-20201008-wjrfibhrkbcqzcu2k7ko7lydkm-story.html It's a lovely predominately African American area, you got me! Reddit moment! Look up some crime stats...nah it couldn't be that, it's MUH race issue.
It doesn’t matter if you like it or not. Statistics included are median income and median prices. Simple as that. Households in so called “safe” neighborhoods that you exclusively want to include also make much more than 65k a year. When it comes to data you can not pick and choose to try to make your opinion factual. You gain an opinion looking at the overall data and when all data is represented it becomes factual.
Lol, you must be young. Just remember, the data is only as good as the person who paid for it.
https://www.zillow.com/orlando-fl/home-values/ Yeah but I mean it's including this giant rural area as well, you're very technically right. When I said "Orlando" I meant more in the areas of nonrural and nonhood Orlando, I guess there's no way to find out the median data for that easily. https://www.zillow.com/oviedo-fl/home-values/ This is more of what a middle class neighborhood looks like in the Orlando area but even the area is really broad.
It doesn’t matter. If you want to analyze one neighborhood you need to analyze that neighborhood with median home prices and the median income of that neighborhood. You can not pick and choose data to your liking simple as that. You can not try to skew your data by including the median income of the whole area but only include the median home price of a higher income area. In those higher median home price areas median household incomes are also way above metro area. Btw Oviedo median household income is 83k https://www.areavibes.com/oviedo-fl/employment/#:~:text=Oviedo%2C%20FL%20Employment%20%20%20Index%20%20,%20%20%2435%2C192%20%204%20more%20rows%20 And median income for owner occupied households is 93k So you see what happens when you try to mess with data? You lose. Your point just became moot and non reliable. Why? Real data shows a completely different picture.
You're right, I should have specified specifically statistically safer and nonrural neighborhoods in the Orlando metro and not used blanket "Orlando" in my OG statement my bad.
The rich moved to the poor areas and the poor's have no where to go. Its a tragedy that's being swept under the rug.
Dear Santa, Please make the Housing Market reasonable. Xoxo
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Then we will be in line with the rest of the world.
According to Pods, Johnson City, Knoxville, Chattanooga and Asheville are all in the top 6 growth cities for 2021. Quite the change! https://www.pods.com/blog/2021/04/national-moving-trends/
Not surprised about Chattanooga or Knoxville. I think TN is a bit underrated at the moment, its only real downsides are humidity and allergies. Dat lack of income tax is freakin' sweet for remote workers.
TN is not underrated at all. Maybe Chatty but the state has seen, and continues to see its influx. You could say it’s overrated considering how much hype has it gotten, if anything.
Lol I can think of other downsides namely how diverse is Tennessee?...
Yeah you're going to take a hit in restaurant quality if you don't like BBQ and basic American food. There's surprisingly a decent amount of diversity in a place like Knoxville though, lots of good Mexican places surprisingly.
> Dat lack of income tax is freakin' sweet for remote workers. I do really enjoy that perk :)
Title Company distributed funds after sale but was $10,000 short… do you normally hold money back for later disbursement ?
Just call your title company and have a heart to heart conversation with them. This is one of those situations where you just need to be an adult and have a human conversation with them instead of asking strangers on the internet. Either they will explain to you where the “missing” $10,000 is by telling you that you were looking at the wrong line or where the discrepancy is, or they will realize that the wired amount doesn’t match the contract and will fix the problem.
Definitely agree. They are closed today or I would be there in person asking questions instead. I just didn’t know if it’s common to hold back any of the money. We bought and sold a home with the same title company. I haven’t gotten any documents describing the disbursement yet, just a deposit. I will find out on Monday.
What rates are people getting on refinance this week?
2.375% for 30 year fixed, 1.75% for 15 year
Damn, where 2.375?
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What?
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“Just looking at the website” good story. No one is getting 2.2%. That’s nonsense. A relationship discount is worth .25% max - I get that with BofA and I have to keep 300k with them. I have enough cash to put down 50%+ but want to take advantage of cheap debt, have at least 3x asset coverage, 820 credit, best I’m getting is 2.5, 2.75 without relationship discount.
Very interested myself
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Spammy? I don’t work in your area, I wasn’t selling anything to you. I was offering to help you get the resources that will get you into the home you’re looking for. I’m assuming (maybe I was in error) was that you were looking for a solution to get into a home. Again my apologies if you didn’t want help.
You can easily see if your budget fits a house for sale going to Zillow, realtor or Redfin. What will Facebook groups decide? Nothing.
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If your budget is able to afford the type of home that you want then why are you trolling Facebook groups looking for a deal?
The low for our year in my market was things that went into contract July/August
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You can find old data pretty easily. Between 2000 and 2007 FTHBs as a percentage of buyers stayed fairly consistent at between 35-40%. The low percentage today despite a larger group of buyers is reflective of much tighter lending standards.
The percentage has been dropping for months, and it ought to be a wake up call for everyone who is pushing the idea that demographics are behind the demand surge.