Desert_Power
Footballguy
Bingo. Soon people are going to have more experiences to actually spend money on again too.
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Mortgage Rates (7 Viewers)
- Thread starter MechEng
- Start date
fruity pebbles
Footballguy
You have to think rates are going to rise here soon. They rose so quickly it’s pretty natural to correct a bit. Consumer inflation is going through the roof. Wage inflation is next. Places are having a very hard time finding employees. When that happens the Fed will be forced to raise rates.
The Z Machine
Footballguy
No, but Baltimore has lost population in every census since 1950. It's got lots going on still though and it's anything but boring.
Chadstroma
Footballguy
1950?! That is crazy. Even more so with the explosion of NOVA with so much centered around DC. Baltimore should be a recipient of that growth too. Sad.
Chadstroma
Footballguy
Inflation is coming (in my best Ned Stark voice)
And with the fiscal and monetary policies it has to be elevated to much higher than "target" levels and the Fed will respond. That will influence the rest of the system and rates will go up. No doubt.
Chadstroma
Footballguy
Trying to convince my in laws to move out of IL (they go my wife will follow and then I get out!). MIL said Indiana, Texas or Florida. I said no Florida! Texas or Indy... sign me up.
Doing my part for you!
⚡DEADHEAD⚡
Footballguy
Random thoughts...
1. Pricing in parts of the East Bay market in the Bay Area have for the better part of 2 decades been designed to drive traffic and generate bidding wars. Multiple bidders, 30%, 40% and even 50% over asking was normal. If you did not know that, you could not buy. You had to have a local realtor who knew how to play the game. When COVID hit, our market changed to transparent pricing. The prices went up, but they reflected the actual value. If someone offered that price, the seller was willing to sell at that price. That lasted maybe 4 or 6 weeks. Then the transparent price became the new underpriced value, again designed to drive "traffic" (as COVID allowed) to the home. Suddenly homes were again going for well over the list price, a new higher baseline. It's rough. I have friends who just can't get into the market.
2. I see a lot of homes change hands despite never being listed, or at least advertised. I think there are a lot of sellers mentioning to their realtor "Hey, we'd be interested in selling but we don't want to stage, repaint, have open houses, etc. If you can get me X dollars, we'd sell but if not, no biggie."
3. I think a lot of older people are staying in their homes longer, pressuring further the supply problem. My mother is in a 3 BR house and has no interest in leaving. People are living longer, are healthier later in life (nobody smokes anymore, for example), more capable and less interested in senior citizen long-term care if they can avoid it. I know a lot of friends who have parents in their 70s and 80s who have lived in the same home for 4 decades.
4. What confuses me is the property tax issue. CA property taxes are high. If you buy a $1.5 million house, you're gonna pay somewhere around $20k/year in property tax. Those are not easy checks to write, but maybe salaries are super strong in addition to stock plans. Title 13 also disincentivizes selling in California. Your property tax is locked in based on purchase price, which is very attractive once you've owned your home for 30 years. People don't want to buy and incur a new tax basis, further limiting supply.
1. Pricing in parts of the East Bay market in the Bay Area have for the better part of 2 decades been designed to drive traffic and generate bidding wars. Multiple bidders, 30%, 40% and even 50% over asking was normal. If you did not know that, you could not buy. You had to have a local realtor who knew how to play the game. When COVID hit, our market changed to transparent pricing. The prices went up, but they reflected the actual value. If someone offered that price, the seller was willing to sell at that price. That lasted maybe 4 or 6 weeks. Then the transparent price became the new underpriced value, again designed to drive "traffic" (as COVID allowed) to the home. Suddenly homes were again going for well over the list price, a new higher baseline. It's rough. I have friends who just can't get into the market.
2. I see a lot of homes change hands despite never being listed, or at least advertised. I think there are a lot of sellers mentioning to their realtor "Hey, we'd be interested in selling but we don't want to stage, repaint, have open houses, etc. If you can get me X dollars, we'd sell but if not, no biggie."
3. I think a lot of older people are staying in their homes longer, pressuring further the supply problem. My mother is in a 3 BR house and has no interest in leaving. People are living longer, are healthier later in life (nobody smokes anymore, for example), more capable and less interested in senior citizen long-term care if they can avoid it. I know a lot of friends who have parents in their 70s and 80s who have lived in the same home for 4 decades.
4. What confuses me is the property tax issue. CA property taxes are high. If you buy a $1.5 million house, you're gonna pay somewhere around $20k/year in property tax. Those are not easy checks to write, but maybe salaries are super strong in addition to stock plans. Title 13 also disincentivizes selling in California. Your property tax is locked in based on purchase price, which is very attractive once you've owned your home for 30 years. People don't want to buy and incur a new tax basis, further limiting supply.
Chadstroma
Footballguy
no, not really.... everything is subjective in life. Look at IL, NY and NJ property taxes and you will feel sooooo much better.
The Z Machine
Footballguy
The flight to the suburbs was massive in the 60s and 70s. That was followed up by a collapse of heavy industry (steel making, bulk shipping, textile mills, etc. in the 80s and 90s). It's rebounding but not quite there yet.
It does allow regular middle class folks to buy a 100 year old house with a 10 minute bike ride from downtown and a 10 minute walk to the waterfront.
Desert_Power
Footballguy
Yikes. My brother in law just went $70k over asking on a $750k townhome in Irvine, CA. HOA and taxes ontop of that for 1.5k sqft. Hopefully Amazon pays their employees better than they have been returning capital to shareholders.
The Z Machine
Footballguy
This is an excellent post. If retired folks aren't leaving their houses in their 80s, going to senior living or with the next generation, then those houses aren't going onto the market.
Both of my parents fit this bill. Both are in their mid 70s and neither has any intention of leaving their houses any time soon. In fact, my mother is getting bids to remodel her kitchen right now. My dad says he's only leaving his (fully paid off) house "feet first".
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Capella
Footballguy
Yea hadn’t thought of this but my wife’s grandmother owns two houses (one for her and the neighbor house for her daughter) and she’s 99 and living there. Refuses to go to a home. In another time she would have went to senior living a decade ago.
Zegras11
Footballguy
Big story here yesterday was an asparagus grower just inside The Oregon/Idaho bordercould not get anyone to pick his crop. So he gave it all away. 5,000 people showed up and hauled away $175,000 worth of asparagus.
The program to get workers up from Mexico is messed up now and way behind. Too slow. And no one here wants to do the job as they are getting free money from unemployment and stim checks.
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Desert_Power
Footballguy
I think a lot of these old northern industrial cities with excess infrastructure will see a resurgence as temperatures rise (nobody @ me to argue those politics please), but is Baltimore too exposed to rising sea levels? I know nearby areas like Ellicott City have had issues with flooding.
The Z Machine
Footballguy
I hope you're right. BMore needs some breaks... Yes, if sea levels rise there will be quite a few areas affected right around the harbor, but not like he whole city is in a flood path.
But in terms of infrastructure, there's no fiber internet here where I live, despite some homes being sold above $800k. Only crappy Comcast cable internet and DSL. There's also been blackouts due to overheated power lines during peak summer AC usage. I'm talking multiple days of blackouts. Not fun.
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Westerberg
Footballguy
Okay, let me see if I've got this right: housing prices are nuts, but if you want to buy a house in the next few years now is the time to do it with how low interest rates are right now. Do I have that right? Any experts want to weigh in?
⚡DEADHEAD⚡
Footballguy
Zegras11
Footballguy
flapgreen
Footballguy
That's exactly what I'm thinking. Worth 400 right according to Chad's monthly update thing. Was going to tell him 450.
Westerberg
Footballguy
Zegras11
Footballguy
It used to be only Yankees coming down. Some are now coming from California. Lockdowns up north, SALT, and of course, nice winters & no state income tax. The perfect storm to ensure that over 1,000 plus people keep moving here every day of the year. I think it's more than that now.
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Insoxicated
this is my parents exactly (early 70s)... up to and including the kitchen remodel
culdeus
Footballguy
I hadn't thought about the, can't drag me out, issue. And I'm ground zero of that in a neighborhood where there are a ton of olds that are taking up one of 4 bedrooms watching TV and letting their home rot around them.
What seems to be happening is that they are able to get someone to check on them 1-2x a day, and sometimes it seems like maybe people are more or less sleeping there in the night time then going off in the day. I wonder what that pays? An orderly job with room (probably not board).
I can obviously understand the appeal of this over a nursing home, but hadn't considered the impact on real estate prices. Once the boomers all die off what are we left with?
What seems to be happening is that they are able to get someone to check on them 1-2x a day, and sometimes it seems like maybe people are more or less sleeping there in the night time then going off in the day. I wonder what that pays? An orderly job with room (probably not board).
I can obviously understand the appeal of this over a nursing home, but hadn't considered the impact on real estate prices. Once the boomers all die off what are we left with?
Senor Schmutzig
Footballguy
culdeus
Footballguy
BassNBrew
Footballguy
Stop talking about my MIL
Decks and railings rotted. Mold growing on the cedar. 40 yo carpet. Driveway crumbling. Retaining wall collapsing.
problem is the house is worth more in this condition then fixed up less expenses
Capella
Footballguy
My aforementioned wife’s grandmother’s house looks like it’s stuck in 1985. Like a time capsule in there.
-OZ-
Footballguy
My parents moved from Michigan to Arizona a few years ago. In May they'll move from Arizona to Indiana. (My oldest sister lives there).
I'd stay away from Texas unless maybe San Antonio or Austin if the job led there. But in retirement? No Texas (imo)
-OZ-
Footballguy
This is why flippers who do their own work can do really well.
I'm trying to convince my oldest, who wants to either be an electrician or do HVAC installation, to develop his general repair skills. I'll help him buy rentals if he can do the work.
BassNBrew
Footballguy
I haven’t been seeing great returns on these. Too many people in the game right now and not enough distress property on the market. I’m getting multiple calls from the We Buy Houses types every week
My cousin is getting killed on his rental unit. He is in his early 20's and it is a 6 unit building that is rough but has tenants. He thought it would be a good investment. Now the government says they don't have to pay rent and 4 of the 6 are not paying and he is stuck with the mortgage.
BassNBrew
Footballguy
Total horse dung. If he tries to break their unconstitutional order he faces a year in jail and a half million dollar fine. When the courts eventually unrule the order the people who came up with it will face zero repercussions.
Capella
Footballguy
Chadstroma
Footballguy
Chadstroma
Footballguy
There is no "skip". Payments can be placed on hold but then when that is over they are due or there will need to be a modification of the loan.
Meanwhile... doo you think there is a moratorium on property taxes and insurance? Further, he still needs to upkeep the maintenance.
The mentality this has created is corrupting. In a First Time Home Buyers group, some chick says her closing is getting pushed back a week but lease ends so was looking for guidance. A number of realtors and lenders and otherwise responsible people told her variations of contact the landlord and see if they would be willing to do a rent by week after the lease. Her response was "well, he can't make me move if I don't pay, right?" There is a "F, you" mentality that has been assisted with this. So many don't care about being a good decent person doing the right thing. Sure, the intention of the moratorium well but like so many other things there are unintended consequences. His cousin being put in bad spot is just another example.
Capella
Footballguy
Bro I was just asking a question. I don’t care what they do. Chill out already, Christ.
-OZ-
Footballguy
Depends on the area, but I'm also looking a few years down the line ave not immediately.
-OZ-
Footballguy
⚡DEADHEAD⚡
Footballguy
I think Chadstroma is good people. Not sure why you have an issue with him, but he's pretty much the guy who keeps this very valuable thread going. Perhaps take it offline? Would hate to see this one go south.
Capella
Footballguy
Rodrigo Duterte
Footballguy
Sand
Footballguy
I have only ever really walked around the inner harbor area, but always liked that part of the city.
Landlords are evil, enough so that the current, unconstitutional abrogation of all these rental contracts is a-ok.
flapgreen
Footballguy
Question about doing things this way if it worked out and he wanted it. Would the same realtor fees still apply or is there a cheaper way to do it this way that's still secure?
Zegras11
Footballguy
Realtor fees are never the same. They are always negotiable.
This type of situation for sure.
I know agents that are putting together buyers and sellers before hitting the MLS. Could very well be earning every penny because seller has to move quickly or is contingent on new home.
And then sometimes the seller knows someone and they find the buyer that way and things are very negotiable
flapgreen
Footballguy
How does that work? My buddy is our realtor and charges us 5.5% fee. If we found the buyer ourselves and this guy makes an offer, should I tell my buddy we think it shouldn't be that high of a fee for that reason and he just does the paper work?
-OZ-
Footballguy
If you don't need a realtor to show you places, to help with the offer etc, you don't need one.
We bought our house without a realtor involved at all. No sellers agent no buyers agent. We paid a lawyer to complete the closing. Where the realtor would have cost around $20k (6%) the lawyer cost a few hundred dollars (probably helps that I knew the guy but I don't think he cut us a deal).
Capella
Footballguy
wanted to do this on our last sale and wife freaked about it. Still makes me mad. Paid a realtor a similar amount. Absolutely grinds me, no offense getzlaf.
-OZ-
Footballguy
Yeah, we still had to get an appraisal and we did the inspection. But we were living in the home, bought from our landlord (who happens to be an astronaut now, but that's not the point)
