How's your housing market? (1 Viewer)

[SoBeDad]

The large increase in housing prices is good news for those who own a property or 2 or more. But not good for those of us who don't own, which includes many of our children. 

In much of Latin America, home ownership was always out of reach of a large percentage of the population. Now, home ownership is out of reach for many in developed countries such as Australia:

>>Australia’s runaway house prices are making the national economy less stable and lowering productivity, according to research which warns home ownership is now out of reach for anyone under the age of 35 as governments repeat failed policy fixes.

Special research led by UNSW finds the property market is now a “triple threat” to the nation’s economic future with the ongoing surge in prices creating economic instability, diverting money away from more productive pursuits and affecting the lending policies of the nation’s major banks...

"A system that raises housing costs for all Australians, that raises instability and lowers productivity does not serve the nation well,” said the researchers, headed by the university’s City Futures Research Centre’s Duncan Maclennan and Hal Pawson.

“And as for rising housing wealth, it is not like the wealth created from effort and innovation, for that creates gains for all. Rather, it makes some Australians, the affluent and older, better off by making younger and poorer Australians, and also future buyers, worse off.”

House prices globally have accelerated since the middle of last year as government stimulus and record low interest rates have been funnelled into property markets. Melbourne’s median house price has reached $908,000 while in Sydney, it is $1.2 million.<<

 

[joffer]

If I understand it correctly, the issue isn’t what the market bears, rather what the house appraises for. Cash buyer at that increase? I’m selling. 

and go where?

 

[SoBeDad]

and go where?

That's why most people are staying put.

In 2004-2005, almost my entire family relocated from Miami to Jacksonville/Orange Park to take advantage of about a 2 to 1 price differential in housing costs, and less stressful lifestyle. My mom and step dad, 2 of my sisters and their families, and a niece. Moving is stressful, finding good jobs isn't always easy. All of them improved their quality of life, IMO. Of course, situations vary. The jobs were easy to find: an air traffic controller, 2 nurses, an AC mechanic, vet assistant and retirement. Salaries were just slightly less than in Miami. You can buy a lot of house in a good neighborhood in Jacksonville (and Tupelo and many other cites) for $650k, or even $350k. It's unusual for 3 or 4 households in a family to move together.

 

[Cold Dead Hands]

and go where?

I have been tempted to buy some land, even at the elevated prices. Buy two camper trailers and live out of those for a while. Based on some research, I could quadruple my property size, and have 250k in the bank. The temptation exists. Especially since I found two campers that are almost nicer than my house.

 

[dkp993]

If I understand it correctly, the issue isn’t what the market bears, rather what the house appraises for. Cash buyer at that increase? I’m selling. 

and go where?

Well each situation is different.  Due to the equity gained I was able to significantly level up in my home in the same area while also locking in a historically low rate on that larger mortgage. Something I couldn’t do prior too this spike up.  As I’m looking long term to live in the new home, 10/15 yrs, buying at the top of today’s market isn’t a major concern.  

 

[flapgreen]

Lol my zestimate goes up like 10 grand every time I look at it. 

Our zillow was way off. House went for 90 more 

 

[JetMaxx]

and go where?

Alaskan yurt. Happily 

 

[culdeus]

Our zillow was way off. House went for 90 more 

They buy houses. They have no motivation to put a high estimate up.  

 

[brun]

Our zillow was way off. House went for 90 more 

They buy houses. They have no motivation to put a high estimate up.  

Zillow estimates my house about 20% higher than Redfin. I assumed Zillow was off, but maybe Redfin is off.

 

[culdeus]

Zillow estimates my house about 20% higher than Redfin. I assumed Zillow was off, but maybe Redfin is off.

Odds are both of them are off.  

 

[moleculo]

zillow estimates my house appreciated $212k since I bought it in 2014.  My realtor wife thinks Zillow is low by about $110k (assuming we do some remodeling).

To be fair, Zillow doesn't know we refinished the basement, adding about 1300 SF, 2 bedrooms and one full bath. 

 

[Osaurus]

Doesn’t look like Elsa scared anyone out of Florida yet 

 

[Chadstroma]

zillow estimates my house appreciated $212k since I bought it in 2014.  My realtor wife thinks Zillow is low by about $110k (assuming we do some remodeling).

To be fair, Zillow doesn't know we refinished the basement, adding about 1300 SF, 2 bedrooms and one full bath. 

Realtor wife > Zillow 

And it isn't close. 

 

[Chadstroma]

Data and hearing from the grapevine says things are cooling off a bit. More leveling out than anything. Seems to be pretty much nationwide. 

 

[Osaurus]

Data and hearing from the grapevine says things are cooling off a bit. More leveling out than anything. Seems to be pretty much nationwide. 

Doesn't seem like a bad thing just as long as it doesn't swing the other way which is unlikely.

 

[Chadstroma]

Doesn't seem like a bad thing just as long as it doesn't swing the other way which is unlikely.

Agreed. Pulling back is healthy as the increases were just insane. You can't have such a hot market like that for too long REGARDLESS of how much the supply and demand drives it without at some point having to have to pay the piper on the other side. 

I don't see a major swing anywhere on the horizon. We may have a slight correction once the moratorium is lifted but I am less and less worried about that. The data just shows this is really all about supply and demand and until the supply is increased or demand is greatly decreased, there is no other data that suggests anything different to happen.

 

[STEADYMOBBIN 22]

I think its just summer/vacation time and everyone hears how difficult it is to buy right now. Most people dont think its a great idea to buy at historic highs and are waiting until things cool off. 

Just my guesses. Nothing to back it up. 

 

[General Malaise]

I have been tempted to buy some land, even at the elevated prices. Buy two camper trailers and live out of those for a while. Based on some research, I could quadruple my property size, and have 250k in the bank. The temptation exists. Especially since I found two campers that are almost nicer than my house.

I listen to a couple local sports guys that talk about sports maybe 20% of their show.  Very entertaining.  One of the guys vacationed to some island in the Caribbean, can't remember, Virgin Islands or something?  Anyhow, he met a fellow that bought some land on the beach and built a house out of shipping containers and said it was really quite nice.  

And that's all I've been thinking about for the last year or so.  Selling everything, moving to an island country and building a house with shipping containers.  Trade my portfolio during the day, gamble on sports, drink beer, fish, cook......man.  That's the life I want.

 

[Zegras11]

I think its just summer/vacation time and everyone hears how difficult it is to buy right now. Most people dont think its a great idea to buy at historic highs and are waiting until things cool off. 

Just my guesses. Nothing to back it up. 

This actually happens at this time every year.  Probably doubling it this year is that just about everything opened up about 4 to 5 weeks ago and everyone made a mad dash to go somewhere after 16 months inside.  

Still getting multiple offers.  But 4 instead of 12 at the moment. 

 

[Capella]

Odds are both of them are off.  

Zillow seems pretty accurate based off what houses are going for in my neighborhood. Redfin is a 100k under comps. I’d be laughed out of the neighborhood if I sold my house at the Redfin price price now. 
 

They’re just all algo based obviously. Just look at comps imo. 

 

[culdeus]

Zillow seems pretty accurate based off what houses are going for in my neighborhood. Redfin is a 100k under comps. I’d be laughed out of the neighborhood if I sold my house at the Redfin price price now. 
 

They’re just all algo based obviously. Just look at comps imo. 

It's just a heat map based thing where they extrapolate /sqft pricing based on asking prices in an area, but lean heavily towards what the last asking or sales price was.  If you want to jump your house value to 5 million on zillow list it for 10 million for a few days.  It will move.  

The houses where it gets in the weeds are those without a MLS listing in prior 10 years.  

 

[Zegras11]

It's just a heat map based thing where they extrapolate /sqft pricing based on asking prices in an area, but lean heavily towards what the last asking or sales price was.  If you want to jump your house value to 5 million on zillow list it for 10 million for a few days.  It will move.  

The houses where it gets in the weeds are those without a MLS listing in prior 10 years.  

what about non-disclosure states where they don't have this info?

 

[culdeus]

what about non-disclosure states where they don't have this info?

Texas is a non-disclosure state.  They scrape the tax valuations and the MLS listings to get the values here.  

 

[Zegras11]

Texas is a non-disclosure state.  They scrape the tax valuations and the MLS listings to get the values here.  

Idaho is non-disclosure also.  How do you know they do that?  trying to figure out how they do it here.

 

[culdeus]

Idaho is non-disclosure also.  How do you know they do that?  trying to figure out how they do it here.

Realtor explained it to me.  Every state is a little different but MLS listings really drive the value overall. .  

 

[Capella]

It's just a heat map based thing where they extrapolate /sqft pricing based on asking prices in an area, but lean heavily towards what the last asking or sales price was.  If you want to jump your house value to 5 million on zillow list it for 10 million for a few days.  It will move.  

The houses where it gets in the weeds are those without a MLS listing in prior 10 years.  

Just looked again for kicks and it’s up another 55k from……yesterday.    

 

[Zegras11]

Just looked again for kicks and it’s up another 55k from……yesterday.    

LOL.. mice went up $18k.

 

[Zod]

I must be the only guy not participating.  Bought a new house in late December and Zillow has our house value 4% lower.

 

[culdeus]

I must be the only guy not participating.  Bought a new house in late December and Zillow has our house value 4% lower.

Detroit?

 

[Zod]

Detroit?

Eugene

 

[Capella]

LOL.. mice went up $18k.

 

[Tecumseh]

We’re looking at cashing in by selling while it’s hot, dumping a good chunk of the profit into a down payment, and still being able to bank six figures. We found a house that we really like, that also has a great air bnb history (there are 2 upscale yurts on the property). Problem is that the house has polybutylene plumbing, and the owners won’t budge on replacing or negotiations. We’re moving on…

 

[⚡DEADHEAD⚡]

Zillow: Up $340k in last 30 days. $42k bump yesterday.

Question: We're remodeling parts of our house, including our kitchen and our attic. We had a weird room next to our kitchen, which was technically a bedroom, so we knocked down the wall and are expanding the kitchen into that space. We're going from 5 to 4 "official" bedrooms. We're also adding official square footage in our attic, somewhere around 300 sf or so. This will be legit, livable, pretty darn nice space.

So we're losing a bedroom, so the value of our home should decline on Zillow, right? And we're adding square footage, so the value of our home should increase, right? 

Think it'll be a wash for property tax purposes?

 

[Zegras11]

Zillow: Up $340k in last 30 days. $42k bump yesterday.

Question: We're remodeling parts of our house, including our kitchen and our attic. We had a weird room next to our kitchen, which was technically a bedroom, so we knocked down the wall and are expanding the kitchen into that space. We're going from 5 to 4 "official" bedrooms. We're also adding official square footage in our attic, somewhere around 300 sf or so. This will be legit, livable, pretty darn nice space.

So we're losing a bedroom, so the value of our home should decline on Zillow, right? And we're adding square footage, so the value of our home should increase, right? 

Think it'll be a wash for property tax purposes?

1. Zillow doesn't know what you've done to the home 

2. No real difference in property tax in regards to bedroom count if square footage is the same between 4 an 5 bedrooms or even 3 and 4 bedrooms. 

3.  If you get this remodel permitted and the sq footage is officially added to accessor rolls, properly tax would be adjusted accordingly. 

 

[Chadstroma]

Zillow: Up $340k in last 30 days. $42k bump yesterday.

Question: We're remodeling parts of our house, including our kitchen and our attic. We had a weird room next to our kitchen, which was technically a bedroom, so we knocked down the wall and are expanding the kitchen into that space. We're going from 5 to 4 "official" bedrooms. We're also adding official square footage in our attic, somewhere around 300 sf or so. This will be legit, livable, pretty darn nice space.

So we're losing a bedroom, so the value of our home should decline on Zillow, right? And we're adding square footage, so the value of our home should increase, right? 

Think it'll be a wash for property tax purposes?

DO NOT care what Zillow values your home. It has ZERO weight to reality. If anything, Zillow does more harm than good from understanding the value of a property because it is mostly always significantly off in the amount- either high or low. I advise to forget Zillow exists and never go on there again. If you want to window shop, head to realtor.com or homesnap.com- at least those are tied into MLS and will have listings accurately. Otherwise, seriously, clear your browser and never go back on Zillow ever again. It is useless. 

sqft is more important than bedrooms in valuations unless it is highly unusual number for the area which can impact the valuation. But generally going from 4 to 3 or 3 to 4 isn't going to make an appraisal amount much different. Depending on the area it could impact the property on the actual market. (e.g. a younger neighborhood with a good school system will generally want more bedrooms)

Taxes will only be impacted by the sqft if the increase is noted in the county records (through permit). If not then it will not be a factor. 

 

[Harry Frogfish]

DO NOT care what Zillow values your home. It has ZERO weight to reality. If anything, Zillow does more harm than good from understanding the value of a property because it is mostly always significantly off in the amount- either high or low. I advise to forget Zillow exists and never go on there again. If you want to window shop, head to realtor.com or homesnap.com- at least those are tied into MLS and will have listings accurately. Otherwise, seriously, clear your browser and never go back on Zillow ever again. It is useless. 

I wouldn't call Zillow useless.  I have been tracking the market in my area for a couple years now.  Their estimates have been pretty darn accurate.  They are more often than not lower than what homes ended up going for, but that's also the market we're in.  

I could see it being way off in certain areas for sure, but for a free, super easy barometer to check on in a matter of seconds, it's been quite helpful.

 

[Capella]

DO NOT care what Zillow values your home. It has ZERO weight to reality. If anything, Zillow does more harm than good from understanding the value of a property because it is mostly always significantly off in the amount- either high or low. I advise to forget Zillow exists and never go on there again. If you want to window shop, head to realtor.com or homesnap.com- at least those are tied into MLS and will have listings accurately. Otherwise, seriously, clear your browser and never go back on Zillow ever again. It is useless. 

sqft is more important than bedrooms in valuations unless it is highly unusual number for the area which can impact the valuation. But generally going from 4 to 3 or 3 to 4 isn't going to make an appraisal amount much different. Depending on the area it could impact the property on the actual market. (e.g. a younger neighborhood with a good school system will generally want more bedrooms)

Taxes will only be impacted by the sqft if the increase is noted in the county records (through permit). If not then it will not be a factor. 

Zillow was extremely accurate for my last house I sold and two houses sold by family. Like, within thousands. 

 

[Chadstroma]

I wouldn't call Zillow useless.  I have been tracking the market in my area for a couple years now.  Their estimates have been pretty darn accurate.  They are more often than not lower than what homes ended up going for, but that's also the market we're in.  

I could see it being way off in certain areas for sure, but for a free, super easy barometer to check on in a matter of seconds, it's been quite helpful.

I do mortgage loans for a living. I see this all the time multiple times from all over the country (CA, IL, VA, and FL being the states most often) and anytime it is brought up it is harmful because it is no where near what an actual appraisal will bring in. 

My own home is a great example. Purchased in 2012 Zillow had it at $243K. Purchased at $265K and appraisal came in at $270K. Two appraisals have been done since then. Zillow was off by $80K on one and $40K on the other. 

You are right, it isn't useless. It is downright HARMFUL. 

AVOID. 

 

[Osaurus]

Tampa market still crazy today 

 

[⚡DEADHEAD⚡]

@Getzlaf15 @Chadstroma

Thanks guys. I don't know why I mentioned Zillow in my question. Half asleep. Really what I want to know is, what impact is there on us in adding sf to the house vs. losing a bedroom. I want to know tax liability. At $1,000/sf, the added costs of adding the sf to the house are real. But we want to do it because valuation here is often tied closely to "official" square footage.

 

[Zegras11]

@Getzlaf15 @Chadstroma

Thanks guys. I don't know why I mentioned Zillow in my question. Half asleep. Really what I want to know is, what impact is there on us in adding sf to the house vs. losing a bedroom. I want to know tax liability. At $1,000/sf, the added costs of adding the sf to the house are real. But we want to do it because valuation here is often tied closely to "official" square footage.

if you add on, you likely have to get it permitted. Ask them how your property taxes get adjusted if you do this?

I had a closing last Friday.  The one car garage was turned into living space at least 15 years ago as there are now 4 sales in the MLS since 2006 on the property at 1160 sq ft.

The FHA appraiser on this deal called out the entire garage changed space because it was never permitted.  He only counted 842 sq ft in his report. Because the city is so backed up from 2020 shutdown, no way seller could get it permitted in time.  Appraisal came in 21k short and seller ate 14k of it.  Buyer payment went down $105/per month. Being first timers, they were still a little hesitant with all this news right at the end of the deal.  I told them I'd help them get it permitted if they sold in the future (or if they decide to add 2nd bath)

Really weird thing is half the garage space was walled off and dry walled and painted and looked like any other room in the house.  The three prior sales were cash, conventional and FHA and this wasn't called out before. Love appaisers with sticks up their bung hole.

 

[Harry Frogfish]

Zillow was extremely accurate for my last house I sold and two houses sold by family. Like, within thousands. 

Yeah, I mean, what's the harm exactly?  Of course they aren't perfect but I'm not there for that.  It's a ballpark number is all and they've been surprisingly accurate where I'm at.  No way are they going to be super accurate nationwide -- some places don't afford the metrics to get there -- but for me, it's fine.  Pretty sure it cost me nothing too.

 

[Capella]

Yeah, I mean, what's the harm exactly?  Of course they aren't perfect but I'm not there for that.  It's a ballpark number is all and they've been surprisingly accurate where I'm at.  No way are they going to be super accurate nationwide -- some places don't afford the metrics to get there -- but for me, it's fine.  Pretty sure it cost me nothing too.

I mean, I’ve dealt with some incredibly horrible appraisers before so I’m not sure an algo isn’t necessarily better than the human element at times. Last appraisal I had done the guy came in complaining about how hot the housing market was and another bubble was going to burst and people were going to be left holding the bag. I was like uhhhhh

 

[SFBayDuck]

Eugene

Still unpacking at our place in FSB neighborhood, Zillow shows down $3,680 in the last 30 days, but still $12K higher than we paid for it when we closed in May.  Even though the market seems to be slowing down a bit the past few weeks pretty sure it would go for a good bit above the Zestimate based on nearby recent sales.

 

[Zod]

Still unpacking at our place in FSB neighborhood, Zillow shows down $3,680 in the last 30 days, but still $12K higher than we paid for it when we closed in May.  Even though the market seems to be slowing down a bit the past few weeks pretty sure it would go for a good bit above the Zestimate based on nearby recent sales.

Nice!  We bought a house just north of Costco in FSB area.  Looking at buying some Duck season tickets now.

 

[SFBayDuck]

Nice!  We bought a house just north of Costco in FSB area.  Looking at buying some Duck season tickets now.

Just up Coburg Rd from us, we're off Willakenzie. 

I already have football season tix through a friend (he's had them for 21 years but just moved to Florida), have women's hoops season tix, and waiting for men's hoops and track & field to go on sale.  

 

[Bogart]

I listen to a couple local sports guys that talk about sports maybe 20% of their show.  Very entertaining.  One of the guys vacationed to some island in the Caribbean, can't remember, Virgin Islands or something?  Anyhow, he met a fellow that bought some land on the beach and built a house out of shipping containers and said it was really quite nice.  

And that's all I've been thinking about for the last year or so.  Selling everything, moving to an island country and building a house with shipping containers.  Trade my portfolio during the day, gamble on sports, drink beer, fish, cook......man.  That's the life I want.

I'm taking the new girlfriend to a shipping container treehouse East of Dallas when the weather cools off. Something like this would be perfect for the GM clan.

Air Castle

 

[Chadstroma]

@Getzlaf15 @Chadstroma

Thanks guys. I don't know why I mentioned Zillow in my question. Half asleep. Really what I want to know is, what impact is there on us in adding sf to the house vs. losing a bedroom. I want to know tax liability. At $1,000/sf, the added costs of adding the sf to the house are real. But we want to do it because valuation here is often tied closely to "official" square footage.

sqft is the biggest factor in valuations for sure but there are always things that can make things screwy too. So, for example, if the sqft increase makes it very unusual for your area then you would lose a lot of the the 'value' out of it. If you had a house on the bigger side for the neighborhood already adding my sqft really loses it's ROI. However, if your house is on the smaller side then the added sqft would have a much greater ROI.

In general, the losing bedroom versus adding sqft should be favorable to you in valuation. 

Keep in mind, appraisal and being attractive for selling are not exactly one in the same. @Getzlaf15 could touch on this more from the realtor perspective... but from the OP, it sounded like the bedroom you are losing was in an odd spot of the house. So, on paper it may show 4 beds but when it shows, people will not really like it or consider it a 4th bed. A larger and more open kitchen (which is a big selling point these days) is likely to play better for showing than an odd 4th bed. And then there is there is another though with the attic, if you add an egress (window that can be used to exit), have it's own door and has a closet then that is bedroom too. (I think there is a min sqft requirement which I don't remember but 400sqft is surely large enough). Then you keep a 4th bedroom, add 400 sqft and enlarge/open up the kitchen. No loss and all gain. 

Also, I am going to say that this is outside of my expertise... I know enough to be dangerous since I deal with appraisals often but I don't have near enough knowledge to actually write one up if I needed to. So a certain amount of salt to be added here but the above is solid info. The specifics of all that gets harder. 

 

[Chadstroma]

if you add on, you likely have to get it permitted. Ask them how your property taxes get adjusted if you do this?

I had a closing last Friday.  The one car garage was turned into living space at least 15 years ago as there are now 4 sales in the MLS since 2006 on the property at 1160 sq ft.

The FHA appraiser on this deal called out the entire garage changed space because it was never permitted.  He only counted 842 sq ft in his report. Because the city is so backed up from 2020 shutdown, no way seller could get it permitted in time.  Appraisal came in 21k short and seller ate 14k of it.  Buyer payment went down $105/per month. Being first timers, they were still a little hesitant with all this news right at the end of the deal.  I told them I'd help them get it permitted if they sold in the future (or if they decide to add 2nd bath)

Really weird thing is half the garage space was walled off and dry walled and painted and looked like any other room in the house.  The three prior sales were cash, conventional and FHA and this wasn't called out before. Love appaisers with sticks up their bung hole.

Freaking appraisers.... it like a purchase agreement of $250K and they come back with a valuation of $249,500. Really guy?!

My list of frustrations with people I have to deal with right now....

Appraisers

Realtors (no offense)

Title

Clients

Lawyers

(A few months ago title was easily on top but that has relaxed and appraisers are Satan spawn now. Realtors are always hit and miss.... good ones are great, bad ones make you want to start raising money with a carboard sign saying will work for food.... Most of my clients are great and I generally don't deal with the clients lawyers so they are on the bottom of the list) 

 

[Chadstroma]

Yeah, I mean, what's the harm exactly?  Of course they aren't perfect but I'm not there for that.  It's a ballpark number is all and they've been surprisingly accurate where I'm at.  No way are they going to be super accurate nationwide -- some places don't afford the metrics to get there -- but for me, it's fine.  Pretty sure it cost me nothing too.

When you deal with people having drastic misconceptions of valuations based on lead generation website over and over and over again.... then you see the harm. Giving poor information and people even thinking it has any value is not a good thing.