I've been hearing that for two years yet I see zero evidence that demand is dropping in many markets.
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How's your housing market? (2 Viewers)
- Thread starter tommyGunZ
- Start date
I've been hearing that for two years yet I see zero evidence that demand is dropping in many markets.
For the average folk in the Miami area, there is no affordable housing. That's happening in many places in the USA. What's perhaps different about Miami and other places in Florida is the huge influx of capital from outside, mainly the NY area, Latin America, and now some from California. The luxury SFH market on or near the water is crazy, hedge fund people & entrepreneurs. Sea-level rise is too far in the future to have any impact. What surprises me is the amout of capital going into Miami's luxury high-rise condo, both used and new. The Surfside condo collapse has impacted only some older buildings. There's the 100 story Waldorf in downtown Miami with fast sales just after opening the sales office, and multiple other tall condos getting 100% reserves before groundbreaking. The Miami region has the 3rd largest skyline in the USA and its getting taller. Will the bottom fall out?
https://www.thenextmiami.com/another-downtown-miami-condo-tower-reaches-100-reserved-before-groundbreaking/
https://www.thenextmiami.com/another-downtown-miami-condo-tower-reaches-100-reserved-before-groundbreaking/
Alex P Keaton
Footballguy
Different now...so much foreign capital and so much of real estate being treated like a commodity. Wall street is swallowing up 25% of sales out there
Alex P Keaton
Footballguy
I disagree...parking capital in housing is a recipe for it to last. We are moving to a renters economy. Life will be a lot more like feudal times with a few owning the land, the houses and the means of production and everyone else just working for them.
https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html
Housing is detached like the stock market is detached. It doesn't matter what is happening in the greater economy because the concentrated wealth keeps it all propped up.
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In the Miami area, and probably others, prime rental locations like Brickell and South Beach are also seeing huge increases in rent, which many are blaming on outsiders temporarily working virtually. Or in some cases, setting up shop permanently in the Miami area.
It's hard for me to believe that this has anything to do with working remotely honestly. I know they keep saying that but then some markets should see increases while others see decrease as people move away and it's just not happening
I am 100% in the boat it's foreign and wall street capital and we have unearthed the great decoupling for housing from actual home to stock. And of course with that sort of rental consolidation rents will go up as well
Alex P Keaton
Footballguy
Thanks for sharing. It is definitely a market at a crossroads. Time will tell, but I appreciate you sharing your perspective. I enjoy thinking about this stuff.
Uruk-Hai
Footballguy
It's absolutely true where I live. A local RE agent told me recently that just about every contract he's written in the last 18 months in my county have been by folks coming out of the D.C. suburbs who no longer need to drive into town because they can work from home. I'm 90 miles west of Washington. A coworker just sold his house. He had 9 offers - all over listing - the first day he was on the market and all were from the Northern VA suburbs.
Now, it may be a chicken/egg thing. Maybe foreign/venture money has made selling in metro areas so attractive that people are willing to put up with being farther away. Or, maybe the vacating people are opening up properties that foreign/venture money is swooping into the vacuum.
I'm 90 miles west of D.C. in the Shenandoah Valley.
dkp993
Footballguy
It’s absolutely true where I live as well. So many of the ones I went up against in the bidding wars were people coming from orange county with all the equity they had in their home and paying cash for homes where I live. Because they can work remotely now. The person who bought my home is coming from the bay area doing the same. They are working from home now.
Back then the mortgage broker had no doc or “liars loans”. That was artificial demand
this is one point you make that does have me concerned
the valley is a pretty area
Captain Cranks
Footballguy
Regardless of whether you think housing prices will decline or not, the last thing you want to be invested in right now is cash. It is guaranteed that dollars will be worth less in a year than they are now, potentially by a lot.
Alex P Keaton
Footballguy
Where would you put your money that is both safe and inflation-resistant?Captain Cranks said:
Alex P Keaton
Footballguy
No disagreement. But I've yet to see two bubbles that are identical. The Fed is pumping massive amounts of money into the economy. Money is basically free. That is also artificial demand.BassNBrew said:
Captain Cranks
Footballguy
ghostguy123
Footballguy
I sold one of my two rentals a few months ago because property values are way up and I dont trust people and their ability to pay rent, especially in this rental market where people cant get evicted.
I have one rental currently. Best tenant ever. Pays 2 weeks early every month. He makes wine at a large winery near me. Neat freak. He offered to pay half the cost for new flooring in the condo (it needed it badly), and has already paid the company. Floor goes in in two weeks........if he were to move out I would sell.
I have one rental currently. Best tenant ever. Pays 2 weeks early every month. He makes wine at a large winery near me. Neat freak. He offered to pay half the cost for new flooring in the condo (it needed it badly), and has already paid the company. Floor goes in in two weeks........if he were to move out I would sell.
Capella
Footballguy
Did he get an agreement from you to be there for x amount of years in exchange for paying for the floors? Just curious.
Sand
Footballguy
ghostguy123
Footballguy
I do agree with him that I see trouble with prices. Not sure if that means a big decline or a small decline followed by a long lull. My prior house tripled from late 90s to 2005. Sold it after the market started to come down so not quite triple but we also were close to the peak on the new house. Took around a decade or so before our new house to actually appreciate. It’s been on fire the past couple years so I think some of the gains aren’t going away because of that drop/stagnation/slow price recovery from the 2005-2006ish peak to 2018/2019. It was overdue for some appreciation but when house prices go up 50% in half a year, that seems a bit temporary. I don’t really care that much because my house is my house and most likely my entire equity (loan is about 30% of value) is likely to go into the retirement home. Luckily you and I are in a growing population market so I’m not too worried about drops but I have a feeling wherever we retire too will be moving in the same directions.BassNBrew said:
Captain Cranks
Footballguy
Tampa, FL
May 2021- I closed on a 4k sq foot house on the east side (good side) of a ski lake for $720k. It needed some work, so call it $800k.
Nov 2021 - Slightly smaller house directly across the lake on the west side lists for $910k. It closes a month later for $966k.
Feb 2022 - Exact same house with no notable improvements goes back on the market for $1.2 million. It goes pending in a week.
May 2021- I closed on a 4k sq foot house on the east side (good side) of a ski lake for $720k. It needed some work, so call it $800k.
Nov 2021 - Slightly smaller house directly across the lake on the west side lists for $910k. It closes a month later for $966k.
Feb 2022 - Exact same house with no notable improvements goes back on the market for $1.2 million. It goes pending in a week.
STEADYMOBBIN 22
Footballguy
Timely bump. I received a cold call today for the first time in a couple of months.
Checked Zillow just to see what’s available. Looks like there are quite a few houses on the market. Certainly more than last year at this time. Crazy high prices with a few price cuts.
The wife and I have been discussing what the magic number is for us to sell. We don’t really want to but if it climbed to that number we would have some serious conversations.
Checked Zillow just to see what’s available. Looks like there are quite a few houses on the market. Certainly more than last year at this time. Crazy high prices with a few price cuts.
The wife and I have been discussing what the magic number is for us to sell. We don’t really want to but if it climbed to that number we would have some serious conversations.
ghostguy123
Footballguy
The market is crazy almost everywhere. In the South Florida luxury SF market, the realtors say there's 50 people with cash for every house on the market. It's investors fueling the market, along with wealthy people, many relocating to a low tax state. Here's an example from Palm Beach of 33% appreciation in 1 year:
Todd Glaser flips Palm Beach estate to cardiologist for $32M Glaser paid about $24M for the half-acre property in May 2021
Ouch. What did you do with that money? Can't imagine passing on someone basically buying me 4 to 5 shares of Apple each month.
Alex P Keaton
Footballguy
Depends on the market. Largely agree though - lots of pandemic related pent up demand
ghostguy123
Footballguy
I wasnt making any money on that property other than principal pay down. I had a 15 year mortgage, plus maintenance fee, plus general expenses. It wasnt very cash flow positive.
Obviously had I just kept it, it would have been eventually.
What did I do with the money? I bought a car and I am working part time for this entire year......
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Captain Cranks
Footballguy
Existing home sales data just released. Huge beat. 15% annual increase in prices. Record low inventories right now. No signs that this run will abate.
ghostguy123
Footballguy
Yep. Still maxing out my 403b and HSA. Living off a smaller paycheck and one rent check.
Now working two 12 hour shifts per week. Agreed. It's only been a month, but cant put a price on it.
Desert_Power
Footballguy
Market still really hot around these parts. I know the Zestimate is a crap number, but it's crazy what it has the townhome I sold last year at now :X
Battersbox
Footballguy
I guess the upside of living in an area with virtually the highest property taxes in the country is you never have to worry about the timing of a house sale, because your value never increases anyway.
[Illinois sucks]
[Illinois sucks]
Zegras11
Footballguy
2010-2020 saw 70% less homes built in the US that any decade since 1950.
Until this goes inventory issue goes away, it a supply and demand game. Rates are up like 1% from a few months ago and most markets are already crazy again this year. Until this issue goes away, rate increases and the such are only going to make small dents in slowing the price growth.
Until this goes inventory issue goes away, it a supply and demand game. Rates are up like 1% from a few months ago and most markets are already crazy again this year. Until this issue goes away, rate increases and the such are only going to make small dents in slowing the price growth.
Capella
Footballguy
Desert_Power
Footballguy
In this case, it is probably overly aggressive. It is likely pulling in comps from much newer and nicer properties.
Manster
Footballguy
Oregon has been nuts, but I'm starting to see homes being marked down. This could be seasonal, as it always slows down in winter.
Another factor I could see keeping prices high in my hood is how many apartment complexes have popped up over the last few years. Those people are paying crazy high rent. Lots more folks looking to buy a home. I don't see the supply meeting demand for the foreseeable future where I live.
Osaurus
Footballguy
Yup. Southern Hillsborough County is still en fuego. Paid $257k in 2005 for a 2k sq ft house. Today I can get at least $390k for it.
GoBirds
Footballguy
What are you guys expecting this year….we have rates starting to increase yet inventory is at all time lows?
I could see this creating more urgency and another push in prices but who knows. Material cost also through the roof so new homes have to continue going up.
I could see this creating more urgency and another push in prices but who knows. Material cost also through the roof so new homes have to continue going up.
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Chemical X
Footballguy
1800 sq ft home or so in my hood sold in 36 hoors at $225 sq ft. i am sitting on 2595 sq ft with a bigger lot, yard and upgrades.
Captain Cranks
Footballguy
Zillow forecasts another 16% rise in 2022. Forecasts Tampa to be the hottest market this year.
⚡DEADHEAD⚡
Footballguy
Not sure what your property taxes are, but in this part of the Bay Area, they are among the highest in California. And yet property values keep going up, up, up.Battersbox said:
$1,000/sf was the talk two years ago in just a few East Bay communities. Now it's trending toward becoming the baseline for much of it.
It's all supply and demand. And the wealth around here is insane. And another thing. As the administration of some of our cities suffers - looking at you Oakland and San Francisco - the people with $ and children are looking for better alternatives, well-run school districts, etc. Those are the bedroom communities where supply ain't changing any time soon, further pushing prices up. Nice but not exceptional homes sell for $1 million over asking.
dkp993
Footballguy
When I bought my home in July I was expecting and prepared for the fact I was likely buying at the top of the market. I was OK with this as we plan on being here 10/15 yrs. I chronicled my journey here (purchase challenges, bidding wars, etc etc) so I won’t rehash it but needless to say it was an interesting time to buy a home and I had to pay way over listing price. 8 months later and my new home’s value is up another 15% over my purchase price. Un. Real.
snellman
Footballguy
NW Iowa, We built our home in 2018. We built in a "affordable housing" area designed to help get building going without being too over priced. Our home had to be less than 1500 sq feet main floor, can only have a 2 stall garage for 5 years after building (after that we can add a 3rd stall should we choose to) affordable lots (don't get the 5 year property tax break, but it is a wash because the lots were that much cheaper). We have a full finished basement for a total of 5 bedrooms and 3 baths. 3 years later there are new houses being built that do not have a finished basement (so a 2 bedroom, 2 bath) being sold for the same price and other properties being sold that are similar to ours are being sold for $50k more than we paid.
Capella
Footballguy
I’m Tampa adjacent and went from purchasing at 166 a sq foot 3 years ago to a neighbor selling for 320 a few days ago. I get it, but also don’t understand how it can go that much higher here before our home values turn into San Diego.
