[Donatello.]

Originally Posted by heitzke

Just jumping into this thread after stalking for a while. Currently looking to potentially downsize and lessen my financial footprint despite being able to easily afford my current (albeit, too large of a home).

Purchased at 493 in 2020, and talking with the realtor who sold me the house we're looking at a listing price of ~825. Houses here are also consistently entering bidding wars, etc.

Possibly looking a little further outside the city, smaller home and/or just a move to a more midsize city where I can have a tiny mortgage, maybe some more space, land, etc. I work from home full-time so commutes and physical location are no longer concerns of mine.

Wow!

While I am shopping right now, I do not expect to actually buy anything b/c I will not offer over asking or get into a bidding war or skip an inspection etc like a lot of these morons out there right now. I also want seller to pay at least some of closing blah blah.

In other words, everyone will tell me to pound sand LOL.

We have only gone out to see 2 houses so far in months of actively shopping. Sunday will be #3. It has the perfect garage for me with the room for plenty, a lift etc. That means another moron will pay over asking. That won't be me


People act like there will never be another house for sale. WTF?!

Also, the guy at the mortgage company keeps bothering me about $500 (non-refundable) to "lock in" my rate. Dude, $2k on a $500k purchase doesn't move the needle. Go get your commission elsewhere

[MaC-N54-E82]

Originally Posted by kscarrol

Not a lawyer but I did stay at a Holiday Inn Express last night... But seriously, with the "significant" property assets you are inheriting, I would consult a real lawyer. I can imagine owning rental properties exposes you and you personal assets to significant risk of litigation. You want this structured right to maintain your access to the income but shield you as much as possible from the liabilities.

I agree. For what it's worth, we have a few companies. The "operating" companies are all SCorps. The company that owns the real estate and the parent company that owns all the subsidiaries are LLCs. Talk to a lawyer.

This…. LLC is the answer but get a lawyer on retainer and start getting advice from a professional.

[redswaq]

I agree with all of you. Because of the pandemic, prices have started to behave terribly.

[Pablo Chacon]

Originally Posted by redswaq

I agree with all of you. Because of the pandemic, prices have started to behave terribly.

Wen edit ?

[vreihen16]

Originally Posted by Pablo Chacon

Wen edit ?

.

[M-technik-3]

Sad fact is many can't afford to build new so this creates stress on the system and with so many investment groups buying up properties and using them as rentals also causes demand to be so high.

Here in Western Mass many houses are now going cash says from NYC, Weed being legal to grown on your property has turned it into lucrative business. Granted they are growing far more than 24 plants in a house. I know of 5 houses in town that this has happened with.

[DETRoadster]

I'll add to the stories here. My younger brother is house shopping. He's laughably priced out of Seattle so he's looking up North in Everett which is 30 miles away. 30 minutes drive at 2:00 AM on a Tuesday. 1.5 hours during commute time. He just toured a 1 bedroom, 1 bath, 600 sqft, 100 year old home that's sitting on a sub 4,000 sqft lot that's contaminated with arsenic. $350,000 and a bidding war is expected!

[Alfisti]

Yikes... arsenic.... maybe best t pass on that mate.

[RickFLM4]

Originally Posted by Alfisti

Yikes... arsenic.... maybe best t pass on that mate.

I’ll go with definitely instead of maybe.

[dreamingat30fps]

Originally Posted by RickFLM4

I’ll go with definitely instead of maybe.

Originally Posted by Alfisti

Yikes... arsenic.... maybe best t pass on that mate.

C’mon guys! Did you not read the part where he said 1 bedroom, 1 bath, 600 sqft, 100 year old home outside of Seattle! PLUS it’s only 1.5 hours to work! For only $350k! Jeez! I think that’s totally worth a little arsenic.

[RickFLM4]

Originally Posted by dreamingat30fps

C’mon guys! Did you not read the part where he said 1 bedroom, 1 bath, 600 sqft, 100 year old home outside of Seattle! PLUS it’s only 1.5 hours to work! For only $350k! Jeez! I think that’s totally worth a little arsenic.

A little asbestos or lead maybe, but I don’t know about arsenic.

[DETRoadster]

It's not like he's going to be eating the arsenic laced dirt. Doesn't matter anyway, he bid $100k over asking and didn't make it into the top 20.

Nah I'm just kidding, he walked out of the open house and said "forget it." On to the next one.

[Joe T]

looked at something today after work, lakefront, 1250 sq ft. on just over 1/4 acre, hit the market yesterday at $850k

Walked into the door and the selling realtor said they already have multiple offers over asking, and if interested, best and final offers must be turned in by 5pm Wednesday

It sold last in 2016 for $379k. Not a bad 6 year investment...

Thinking that as interest rates climb the market will slow, and those with cash will have an advantage again

[kscarrol]

Originally Posted by Joe T

Thinking that as interest rates climb the market will slow, and those with cash will have an advantage again

They already do as they can pay whatever and not worry about the mortgage company balking at the way above appraisal price...

That and they will be able to scoop up properties when the bubble goes pop.

[Chick Webb]

Originally Posted by kscarrol

That and they will be able to scoop up properties when the bubble goes pop.

Won't high interest rates (which ARE coming) kill off the flippers because they rely heavily on acquisition/construction loans from so-called "hard money" lenders and the risk of a flip not pricing high enough in a decelerating market will be too high to justify? So that will help reduce competition a bit?

And won't the investors also go somewhere else with their money, due to the real risk of negative equity and unsustainably negative cash flow as rents either fall or fail to rise fast enough to cover their loan payments?

On the other hand, inventories continue to drop, days-to-pending appears to be at an all-time low, and rates have already started to head up. So what the hell do I know? Maybe the Fed will jack rates up enough to burst the bubble. Glad I'm not out in that market trying to buy, for certain.

[chassis]

The topic not many people are talking about is a general shortage of housing. This keeps upward pressure on prices, independent of interest rates. People need places to live.

Look at home construction data. It has been on a tear for 10 years. I don't see this changing.

Pre-GFC the US housing market got overbuilt. How much is anyone's guess, maybe not by much. The lending debacle is unrelated - this is a story of housing unit availability.

Post-GFC the US housing market was underbuilt, by a lot. We are now feeling the pinch of this. Population steadily grows, and housing units need to grow also. Housing units go out of circulation through obsolescence, demolition and similar reasons. This is a separate driver which adds to housing unit demand.

Until supply (housing units) comes into balance with demand, price inflation will not moderate. Flippers will flip. It's what they do. The underlying driver is tight supply, plus growth in demand.

If people in NorCal, SoCal or Seattle get sick of the prices, move to eastern Arkansas or northwest Mississippi.

[kscarrol]

Originally Posted by Chick Webb

Won't high interest rates (which ARE coming) kill off the flippers because they rely heavily on acquisition/construction loans from so-called "hard money" lenders and the risk of a flip not pricing high enough in a decelerating market will be too high to justify? So that will help reduce competition a bit?

And won't the investors also go somewhere else with their money, due to the real risk of negative equity and unsustainably negative cash flow as rents either fall or fail to rise fast enough to cover their loan payments?

On the other hand, inventories continue to drop, days-to-pending appears to be at an all-time low, and rates have already started to head up. So what the hell do I know? Maybe the Fed will jack rates up enough to burst the bubble. Glad I'm not out in that market trying to buy, for certain.

I was not talking about flippers but investors and general homeowners. With the threat of higher rates, folks are likely scrambling to lock in and buy now before rates go higher. Will the bubble burst, yes, but what is that pain point when inventory is so low? A 30 year mortgage is still just 4%. In an inflationary environment you want to borrow money at a low rate and invest in physical asset appreciating at a a higher rate.

As for negative equity, many are cash buyers so they might have a loss but no negative equity.

Edit: And as chassis mentions, folks leaving CA, WA, NY, NJ etc are selling and the price to buy in the fly over state are a bargain. We see it here in NOLA all the time, house hits the market and within 24 hours there are 6-8 cash offers over asking. Many are not from NOLA but are coming from NY or LA and what we view as expensive they view as cheap and can walk away with cash left over after selling the LA or NY home.

The music will end one day and forecast that but someone will be left without a chair. There are always players late to the game that are left standing.

[ryan stewart]

Originally Posted by TboneS54

Very very happy to have bought in 2012 and 2016. Good luck to those hunting.

Same, I couldn't rebuy my own house right now if I was coming in under the same conditions. I have occasionally looked at an upgrade but you're just paying the same massive up charge for the upgrade that you're getting for your own house.

[dreamingat30fps]

Originally Posted by kscarrol

Edit: And as chassis mentions, folks leaving CA, WA, NY, NJ etc are selling and the price to buy in the fly over state are a bargain. We see it here in NOLA all the time, house hits the market and within 24 hours there are 6-8 cash offers over asking. Many are not from NOLA but are coming from NY or LA and what we view as expensive they view as cheap and can walk away with cash left over after selling the LA or NY home.

This makes sense, but my question is why are they not giving away houses in CA, WA, NY or NJ? If a max exodus is driving prices up in other areas shouldn’t it also be driving prices down in those areas? Or are they ALL buying second homes and keeping their properties there?

The house in NC we had to pay cash for and it had like 12 offers after 1 day of showing (she was going to show it 2 days but changed her mind after day 1). That was like June of last year. Around Dec I decided to get a cash out mortgage because of the crazy low rates. Had to get it appraised for that… I was worried… I was pretty sure it would come back lower than what we paid. Ended up coming back $50k higher! I’m always browsing the listing for the hell of it and even much crappier houses on less land are listing for $75k+ more than we paid less than a year ago!

[DETRoadster]

Originally Posted by chassis

If people in NorCal, SoCal or Seattle get sick of the prices, move to eastern Arkansas or northwest Mississippi.

Yeah, but then I'd live in Arkansas. No thanks.

[zx10guy]

Originally Posted by dreamingat30fps

This makes sense, but my question is why are they not giving away houses in CA, WA, NY or NJ? If a max exodus is driving prices up in other areas shouldn’t it also be driving prices down in those areas? Or are they ALL buying second homes and keeping their properties there?

The house in NC we had to pay cash for and it had like 12 offers after 1 day of showing (she was going to show it 2 days but changed her mind after day 1). That was like June of last year. Around Dec I decided to get a cash out mortgage because of the crazy low rates. Had to get it appraised for that… I was worried… I was pretty sure it would come back lower than what we paid. Ended up coming back $50k higher! I’m always browsing the listing for the hell of it and even much crappier houses on less land are listing for $75k+ more than we paid less than a year ago!

Did a cash out refi in December. Didn't even have to get an appraisal. What I wanted out of the house for the cash out plus the remaining balance on the then mortgage I guess didn't trigger any alarm bells. Plus my closing costs where minimal. Think it was $2200 or there abouts with no points. Even if an appraisal was needed, I didn't have to worry about comps as my immediate neighbor to the left of the house just closed on selling it to the new homeowners. So I had an actual value for a comp.

[Bc2005]

We are in the process of selling our house in Texas, and the biggest issue for many buyers is the lack of comps, and therefore no decent appraisal.

Very few houses are on the market this spring, and comps from a few months ago aren’t “comparable” to today’s prices. And it can take up to three weeks to get an appraisal that may not be high enough to get lender approval of a loan. We have rejected offers that are contingent on appraisal because we have to sit on an offer while we wait for the appraisal.