How's your housing market? (4 Viewers)

[BassNBrew]

Personally, I would sell and put the money into a no-load investment fund.  Of course, I really don't want the hassle of dealing with a rental property which colors my decision.

I know many people who sold their rental homes in the last 2-4 years that missed out on life changing wealth.  If you hire a good PM it won't be a hassle.

Here's one of my homes based on Zillow in the last month.

Home value

Zestimate

$209,200

Zestimate range

$197,000 - $222,000

Last 30-day change

+ $5,374 (+2.6 %)

Zestimate per sqft

$186

That's basically double in four years.

The other homes are up $9k, $10k, and  $2k.  All are cashing flowing so my tenants paid me to put $26k in my pocket in one month.

My opinion is that if you own a home or rental property do whatever you have to to hang onto it.  More so if you are paying 2.5-4.0% interest rates.  

 

[Mrs. Rannous]

I know many people who sold their rental homes in the last 2-4 years that missed out on life changing wealth.  If you hire a good PM it won't be a hassle.

Still didn't want it.  If we were younger, maybe.  But I didn't want even the hassle of having someone else run it.  And I did about as well with the mutual fund and no annoying rental stuff.

Eidt:  Checking, I see I did better with the fund.

 

[Captain Cranks]

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.

Update on the house that closed in December for $966K. Sold again yesterday for $1.175M. 

 

[FreeBaGeL]

I know many people who sold their rental homes in the last 2-4 years that missed out on life changing wealth.  If you hire a good PM it won't be a hassle.

I  bought two short term rentals last year and they are making crazy good money.  I could pretty easily quit my job and live well off that income.

Now I'm stuck because I want to buy more, and have tons of equity to play with, but I'm weary of buying more at current prices.  It's a bit of a catch-22 because if prices come down I'll lose a lot of that equity I have to use to acquire more.

 

[Bankerguy]

Bought my home 3 years ago for 389k. 
 

Appraised last month at 750k. 
Confident I could sell for 800+ very easily. 

 

[Osaurus]

Tampa Bay housing up 28% in a year. I’d say that’s on the low side. 

 

[Mrs. Rannous]

We need an emoji for "That's Insane!"

 

[Chadstroma]

It is pretty crazy, pretty much everywhere. The only real question right now is how crazy is it. First time home buyers are being squeezed out of the market. The crazy thing is that rent will continue to be driven up by demand and exasperated by inflation. Homeowners make out well with inflation as the crazy increases we are seeing now will get "locked in" as inflation buoys it all. Rates remain low as most everyone has a fixed rate loan these days and the money owed is diminished by inflation. 

Demand is crazy. The best way to explain it is this data. 
 

Numbers of houses built by millions

1930-39: 5.4

1940-49: 9.6

1950-59: 21.4

1960-69: 20.2

1970-79: 25.8

1980-89: 25.2

1990-99: 26.7

2000-09: 27.1

2010-19: 5.8

And we have added 31+ million people in this country since 2008. 

 

[Mrs. Rannous]

It is pretty crazy, pretty much everywhere. The only real question right now is how crazy is it. First time home buyers are being squeezed out of the market. The crazy thing is that rent will continue to be driven up by demand and exasperated by inflation. Homeowners make out well with inflation as the crazy increases we are seeing now will get "locked in" as inflation buoys it all. Rates remain low as most everyone has a fixed rate loan these days and the money owed is diminished by inflation. 

Demand is crazy. The best way to explain it is this data. 
 

Numbers of houses built by millions

1930-39: 5.4

1940-49: 9.6

1950-59: 21.4

1960-69: 20.2

1970-79: 25.8

1980-89: 25.2

1990-99: 26.7

2000-09: 27.1

2010-19: 5.8

And we have added 31+ million people in this country since 2008. 

You can see the Baby Boom and urban flight in those numbers.  And the 2008 economic bust.

 

[STEADYMOBBIN 22]

Wait a couple of years, sell and move to Thailand. 

 

[The Z Machine]

Anyone gone through getting a mortgage + construction loan for a remodel of a 100+ year old home?  Last update was in 1981...

Purchase would be $500k and remodel might be $200k? 250k?

We'd bring $250k in cash to the deal (after selling our current place).

Is this even feasible?

 

[Da Guru]

Home in my sub was asking $500.000  sold in 4 days for $610,000

 

[Chadstroma]

Anyone gone through getting a mortgage + construction loan for a remodel of a 100+ year old home?  Last update was in 1981...

Purchase would be $500k and remodel might be $200k? 250k?

We'd bring $250k in cash to the deal (after selling our current place).

Is this even feasible?

It is not a construction loan but a rehab loan. FHA 203K is most well known but conventional have rehab loans too. The big note on this is that you don't get a check and head to Home Depot. The work is through contractors and the whole process.

 

[Shula-holic]

So we rent our old home out and I’m think about pulling the trigger to sell in this market and setting funds aside as rates go up to be a cash move up buyer in upcoming years if we get a value pullback. Do you guys see a pullback coming in upcoming years or is inflation and lack of inventory going to keep driving things higher? Check your crystal balls friends, would you sell a second home now? 

I'm holding my rentals, not so much worried about the single family and college rentals, but I'd love to sell my beach place right now.  The problem is my kids are 11 and 7 so now is the time to have it and enjoy it.  I bought it pre construction in June 2017 and could sell it for 2x today.  I'm at least getting the much better than budgeted rental projections for the days we don't use it.  It's easy to say now, but should have bought 2 of them and considered it for awhile.  I think when we inevitably have a pullback, vacation rentals like that will be the first to suffer when the economy shows it's turned over.

 

[GoBirds]

I'm holding my rentals, not so much worried about the single family and college rentals, but I'd love to sell my beach place right now.  The problem is my kids are 11 and 7 so now is the time to have it and enjoy it.  I bought it pre construction in June 2017 and could sell it for 2x today.  I'm at least getting the much better than budgeted rental projections for the days we don't use it.  It's easy to say now, but should have bought 2 of them and considered it for awhile.  I think when we inevitably have a pullback, vacation rentals like that will be the first to suffer when the economy shows it's turned over.

We built our beach home in 2018 and are holding for the same reason, our kids are same range and you can’t put a price on these memories. Even if we cashed in where would I put it right now is my dilemma. I did go under contract on our old home we rented before even listing with a strong offer. 

 

[Shula-holic]

We built our beach home in 2018 and are holding for the same reason, our kids are same range and you can’t put a price on these memories. Even if we cashed in where would I put it right now is my dilemma. I did go under contract on our old home we rented before even listing with a strong offer. 

This is the key part.  I don't have a good answer for that either.  I'm a little heavy on cash allocation as is.

 

[The Z Machine]

It is not a construction loan but a rehab loan. FHA 203K is most well known but conventional have rehab loans too. The big note on this is that you don't get a check and head to Home Depot. The work is through contractors and the whole process.

Can you point me to any reference info on how to navigate this?  Do most mortgage brokers know this process?

 

[culdeus]

This #### is stupid.  At least around here the rental market has not caught up.  I'm seriously considering selling a home and just renting one until things calm down.  Went to one showing yesterday, the first one the house had had.  I thought it was meh, it was one of those "4 bedrooms" that was fairly small going for a premium to others in the area.  Was under contract by 5pm for 50k over asking triple no.

 

[The Z Machine]

What's a "triple no"?

 

[Mrs. Rannous]

What's a "triple no"?

A hard pass with attitude?

 

[dkp993]

This #### is stupid.  At least around here the rental market has not caught up.  I'm seriously considering selling a home and just renting one until things calm down.  Went to one showing yesterday, the first one the house had had.  I thought it was meh, it was one of those "4 bedrooms" that was fairly small going for a premium to others in the area.  Was under contract by 5pm for 50k over asking triple no.

What's a "triple no"?

I believe … no inspection, no appraisal, no repairs

 

[culdeus]

What's a "triple no"?

No inspection, appraisal, contingencies.

 

[Chadstroma]

Can you point me to any reference info on how to navigate this?  Do most mortgage brokers know this process?

You would work with the Loan Officer. I don't know if any good source to refer you to that I trust. 

It depends really. It is a specialty product that some have experience in and some ddon't. For example, I personally have never completed one as every time a client asks about it and I go through it with them they decide on something else. (To be fair most of them thought they would get a check and then head to Home Depot to get to work). On a 203K for most loans you have to hire a project manager which assists in the construction/contractor side of things. 

 

[eoMMan]

Most of the talk in this thread is about people who currently own a home and whether or not they should sell.

Is anyone on the other side? Planning on a buy within the next year or two? What’s your plan?

Wife and I are planning on renewing our rental lease soon that will have us renting through August 2023 (we sold for a profit in August 2021). I don’t want to fight with a million other potential buyers for a house we’re not crazy about and one that I, personally, think is overvalued (in market at least).

 

[eoMMan]

Downturn in home sales predicted

 

[culdeus]

I'm willing to gamble and wait out 6-12 months in a rental, even a crappy one.   Once mortgage rates and tax valuations start to catch up it will come with it a huge drop in demand I think.  Certain price ranges will do worse than others.  Gut says the 500k-1M range gets hit hardest.

 

[BassNBrew]

Certain price ranges will do worse than others.  Gut says the 500k-1M range gets hit hardest.

I doubt the starter home market is impacted 

 

[BassNBrew]

Downturn in home sales predicted

seems like mostly opinion. Also lots of statements like drop in the rate of increase. 
 

I’m now seeing most local builders are switching from sell and build to build and sell. 

 

[BassNBrew]

It would be good to see the flip market come back. I’m seeing crappy home + plus Reno cost > move in ready home. 

 

[culdeus]

It would be good to see the flip market come back. I’m seeing crappy home + plus Reno cost > move in ready home. 

Where isn't it hot?  It's crazy big here.  Lots of full guts now and some surface flips all making $$$

 

[culdeus]

I mean the flip thing is easy.  Now that nobody wants Gaines look it's the hospital faux mid century modern look with white orange peel walls and blonde floors and white quartz counters and subway tile and chrome fixture.  

That #### is cheap, brainless, and has all the chardonnay moms gushing. 

 

[BassNBrew]

Where isn't it hot?  It's crazy big here.  Lots of full guts now and some surface flips all making $$$

Charlotte accordingly to many of the people I speak to.  Just not seeing the condition discount right now like you usually do.  When folks are selling I'm telling them not even to bother painting or doing cosemetic work because you won't get your money back.

The WeRipOffYourMomma.com folks might be doing OK but most flippers I know aren't interested in selling snake oil to get their properties.

 

[The Z Machine]

Charlotte accordingly to many of the people I speak to.  Just not seeing the condition discount right now like you usually do.  When folks are selling I'm telling them not even to bother painting or doing cosemetic work because you won't get your money back.

The WeRipOffYourMomma.com folks might be doing OK but most flippers I know aren't interested in selling snake oil to get their properties.

How much has the cost of reno increased in the last 2 years?

 

[BassNBrew]

How much has the cost of reno increased in the last 2 years?

I know my painting costs have moved from 70-80 cents a sf to $1.50 a sf.  Paint (material) is up 50%.  Appliances have increased 30%.  LVP seems to have held steady likely because competition has expanded.  Lumber is insane and has gone up 2-3x.  Cleaning that was $25-$30 an hour is now $40-$45.

 

[Buckna]

It would be good to see the flip market come back. I’m seeing crappy home + plus Reno cost > move in ready home. 

I have seen a lot of mom and pop flippers so to speak and other small timers get out of the business in my area. Things like Real Estate Investment Associations and Investor meetups are down like 50% in attendance and interest since pre-pandemic. The ones still in are doing well but generally because the massive increases in home prices are bailing them out (or they are the ones that cut corners and give everyone a bad name.) I have increasingly heard that Reno budgets are exploding for over a year now but if the finished price goes up 15% in the meantime you still make out in the end. I am doing one project at the moment which is my only one in over a year and hoping to get it sold before June as county permits are taking forever.

The high volume flippers are still churning and are vacuuming up most of the supply of homes that have enough margin to still make it worthwhile. Those folks have access to cheap money and can run in house crews for cheaper for Reno. But they can’t survive without volume so they will take on even low or no margin projects to keep their machine humming along.

 

[Buckna]

I know my painting costs have moved from 70-80 cents a sf to $1.50 a sf.  Paint (material) is up 50%.  Appliances have increased 30%.  LVP seems to have held steady likely because competition has expanded.  Lumber is insane and has gone up 2-3x.  Cleaning that was $25-$30 an hour is now $40-$45.

I am finding everything has gone up considerably. Appliances are difficult to source thanks to supply chain disruptions, a lot of items in the mid to high end is on a multi-month wait. The cheap stuff you can still get readily but those won’t work in some homes/price points. I had to piece together a Kitchenaid package from 3 different suppliers.

Massive sticker shock for me on new kitchen cabinets the other day. I have priced 3 different suppliers and they are all double the price of what they were 2 years ago.

 

[Capella]

Somebody in my neighborhood bought a house in June 2020 and just flipped it for 51% more. Jesus. 

 

[culdeus]

I mean in D/FW area the big boom here happened in the 60s so there are a ton of ranch style homes.  These are easy to convert to a more modern look and usually have decent bones to work with.  I've seen flippers easily gross +300k on a 500k heavy flip and make an easy 150k just on a cleanup job more or less.  

The big problem is construction costs are so high that you can't really knock down houses and start over.  Building materials are too much to sustain that, the guys in the biz of doing full tear downs are not doing well, nor are the realtors.  It's all fun and games when houses go for 50k over list, but when there's no inventory the realtors take a bath.  In D/FW there are now 2.5x as many realtors as there are homes for sale and even if all those aren't active it's not 1:1 for sure.  

 

[BassNBrew]

I have seen a lot of mom and pop flippers so to speak and other small timers get out of the business in my area. Things like Real Estate Investment Associations and Investor meetups are down like 50% in attendance and interest since pre-pandemic. The ones still in are doing well but generally because the massive increases in home prices are bailing them out (or they are the ones that cut corners and give everyone a bad name.) I have increasingly heard that Reno budgets are exploding for over a year now but if the finished price goes up 15% in the meantime you still make out in the end. I am doing one project at the moment which is my only one in over a year and hoping to get it sold before June as county permits are taking forever.

The high volume flippers are still churning and are vacuuming up most of the supply of homes that have enough margin to still make it worthwhile. Those folks have access to cheap money and can run in house crews for cheaper for Reno. But they can’t survive without volume so they will take on even low or no margin projects to keep their machine humming along.

Thanks for sharing your perspective.  I get calls daily attempting to buy property I have.  They always ask would you sell and my standard answer is "yes, but more than what you want to pay".  That doesn't deter them from wanting to run through their questionaire.  I'm on the do not call list so I'm not sure why I'm getting the volume of calls I do.

As you state, a rising tide is probably saving most people.  That will stop eventually and that business model will get crushed.  I do think Zillow and friends had a big impact on people being able to find potential flips.  They were paying at or above market price for inferior homes.  Open Door bought the home next door to me and took a $40k loss plus $11k buyers agency, plus $3k HOA dues, $5k HOA fines, plus paint/carpet, plus taxes and legal.  Easily a $60k loss for them.  Property was dated and had fridge that was 5 tall by 2 ft wide staring you in the facing when you entered the home.

 

[Buckna]

Thanks for sharing your perspective.  I get calls daily attempting to buy property I have.  They always ask would you sell and my standard answer is "yes, but more than what you want to pay".  That doesn't deter them from wanting to run through their questionaire.  I'm on the do not call list so I'm not sure why I'm getting the volume of calls I do.

As you state, a rising tide is probably saving most people.  That will stop eventually and that business model will get crushed.  I do think Zillow and friends had a big impact on people being able to find potential flips.  They were paying at or above market price for inferior homes.  Open Door bought the home next door to me and took a $40k loss plus $11k buyers agency, plus $3k HOA dues, $5k HOA fines, plus paint/carpet, plus taxes and legal.  Easily a $60k loss for them.  Property was dated and had fridge that was 5 tall by 2 ft wide staring you in the facing when you entered the home.

I’m in Colorado and pretty much the only houses sitting on the market are the Zillow houses they paid way too much for.

As for the phone calls, those are likely all the big volume flippers and more likely wholesalers that are buying lists and/or driving for dollars and then skip tracing to find the phone numbers. Most of these folks don’t abide or don’t know about Do Not Call and such. Feel like it’s only a matter of time before the state gov’t’s start coming down on these types of people hard (the stealyourparentshouseforpennies.com types.) But I’ve also thought this for years and only here and there has there been talk of licensing and such.

Many people I know have switched to mostly flipping out of state. Everybody targets KC, Indy, Cleveland, etc. where they can buy crap houses for 40~60k, put 30k to 40k into them, and list for well above 100k. I’ve thought about doing that but barely have time enough as it is to do a house project here and there.

 

[Mrs. Rannous]

Here's the latest on Houston's housing prices.

 

[eoMMan]

Pending home sales sink in February, setting a grim tone as housing market enters key spring season

Article is a little misleading though because if inventory is at historic lows, it makes sense that overall home sales will continue to go down. Personally, I’d like to see average home sale prices go down. 

 

[Captain Cranks]

Somebody in my neighborhood bought a house in June 2020 and just flipped it for 51% more. Jesus. 

That was the market low with everything shut down from the pandemic. My neighbor began renting her house around that time with a buy option. Needless to say they pulled the trigger. I looked up the closing price from Nov 2021:  $540K. The house is easily worth over $900K right now. 

 

[Capella]

That was the market low with everything shut down from the pandemic. My neighbor began renting her house around that time with a buy option. Needless to say they pulled the trigger. I looked up the closing price from Nov 2021:  $540K. The house is easily worth over $900K right now. 

Wow. 

 

[PhillipPhoto]

Still on my old relator's email list.  Sent me a notice of a 1,500 square foot house that sold just shy of 700K.  Hard to wrap my head around it.

 

[The Z Machine]

I have increasingly heard that Reno budgets are exploding for over a year now

This is why I walked away from an amazing house.  It would have been $250k easy in reno and that could have exploded.  I've never done one before, so that was a risk I couldn't take, despite the opportunity. 

 

[Mrs. Rannous]

The house next door just sold.  It was sold for 252K in 2017.  It was listed for 390K.  Goodness only knows what it sold for.

 

[skol asylum]

Zillow has us at $699K. Up and up and up. :knockonwood:

Bought in 2010 for $260K. Refied a couple of times pulling out cash, first for new AC and exterior paint and second to pay off alot of other debt. Current balance is around $272 on a 15 with about 13.5 years to go at 2.5%.

Toyed with the idea of going back up to a 30 and using savings to buy a small second home in the north country. Rates have gone up though and not really digging the idea of more debt. We both work from home and really could possibly talk our employers into working elsewhere. Sell and take the profit and potentially buy almost outright in a cheaper location. Ok maybe not exactly because prices have gone up everywhere.

A month later, $731K.

 

[Buckna]

Brother-in-law is being re-stationed back in Colorado Springs, put an offer on a place earlier this week. Only two houses have sold at 600k & 610k in this particular neighborhood ever before. Estate sale, Listing agent didn’t even bother to put up pictures, listed it on a Tuesday morning for 600k, interior is dated but clean, multiple offers first day. BiL offered 50k over and didn’t get it. Listing agent told us they had 2 other offers above his with one going another 25k over his.

 

[STEADYMOBBIN 22]

A month later, $731K.

Same. Up $35k in a month.