Posted on 09/18/2020 8:19:24 AM PDT by Vigilanteman
House across the street from my brother went on the market last month, had 35 showings and visitors at the first weekend’s open house - and had 3 offers well above asking price within days.
A co-worker just completed a cash out refi on his property, and the appraiser pegged it at $100k more than it reasonably is worth - at least before all this inventory-constrained escalation started. That seems to be driving much of it, the fact that there aren’t very many houses out there for sale.
In my neck of the woods I’ve seen a dramatic increase in home prices even as dozens of FORECLOSURES are showing up in the property listings. That seems like an indicator of totally irrational behavior by home buyers.
Lumber/plywood/osb are at record high prices currently. However, they increase in a 2500sq ft house is probably $8-15K. It is NOT $100K. something else is up.
Lower rates is creating real estate equity. That equity is being tapped by refinance activity. The money then is going into the economy, with a majority going into home improvement/remodel. That equity is also allowing people to trade up, or down.
The trade up is where someone is buying a bigger and more expensive house to fit their needs or ego.
The trade down is for empty nester types that have too much house, too much maintenance, impractical. In those cases, many people are pocketing the cash and then improving the smaller house/condo. Or, they are putting that money into the stock/bond/investment markets or even local banks.
The economy being strong, means that incomes are rising, making more expensive houses with lower interest rates affordable to them.
There are some regions yes, that are growing disproportionately, but that kind of thing is always a factor.
The massively dominant factor in R/E right now is low interest rates with rising wages.
Here in eastern TN — definitely. Prices are up, and properties are hard to find. I did a search on the KAARMLS site with certain parameters. Twelve properties showed up; eleven are “pending” sales.
Not many people can in Naples.
“I believe this is a very temporary...”
I agree 100%! So, let’s say you decide to sell now in a hot market. Whatever increase you experience will only be taken out when you buy on the other side. Secondly, as the unemployment stays very high (now at 8.9%) there are not going to be enough people to sustain this bubble. So, expect a big decline when defaults begin to creep up. If you are a big time gambler, then by all means sell now and hope for the best. Your odds might be better in Las Vegas, though.
I left seattle for rural KY 9 years ago and it was the best move I ever made.
My friend in Seattle just sold his house and is moving to Idaho.
My daughter and her husband left Seattle for the distant suburbs east of Louisville.
My middle daughter left seattle for a town in Arizona
My youngest daughter still lives in Seattle but her husband’s company is there. He’s getting out of the office lease and going all WFH employees and They are looking for a different state. Right now it’s looking like Kentucky or maybe Tennessee.
One of my sons, who is gay and has a 15 year live in partner, lives in Capital Hill in Seattle, about five blocks from CHOP. They are moving to Texas.
This city flight thing is very real.
The issue is Zillow. Zillow apparently has a handle on the market but their recent increase make one wonder.
I haven’t had calls but the Zillow projected square foot price has risen considerably over a very short time
We noticed when trying to find a house for my sister to buy. Doubled in price quickly.
This lockdown is helping some and hurting others. The awesome deli in my building in downtown Louisville is shut down permanently. This could have resulted in a foreclosure on the owner’s home.
Meanwhile, I had a 3 hour daily commute, but now work from home. This saves me, after taxes -—drum roll-— almost $800 a month. That is fairly good money anywhere in the country, but in an area where that is more than many house payments, it’s a windfall.
So, WFH people are getting out of the cities, while people outside of cities are either seeing their home foreclosed on because they don’t have a source of income, or they are seeing their property values skyrocket as the city folks migrate.
I would not be buying a house right now. The time to buy is when interest rates are high. It depresses prices, and gives you the opportunity to refinance later when interest rates come down again.
Don’t count on all the northerners keeping their Dem stripes...I came to SE Florida as a Dem (many years ago) but now am deep red and live in a deep red part of FL (not SE FL, lol) and had six children five of which are voting age and are all staunch conservatives, and are raising their kids similarly. Sometimes it just takes the change of scenery and getting away from the influence.
I live in PA and make a good living flipping properties, but I haven’t seen an uptick. However, kin with properties in sprinting distance of Manhattan are getting calls and offers aplenty, and they’re not even looking to sell.
I would think it’s the same in Philly or any big urban area. I’m in a rural region. I get triple the price I paid, sometimes more, plus permanent gratitude from buyers, so I’m contented.
I also have a winter home in Arizona and I'm starting to get cold calls from realtors asking if I want to sell. I will be selling that property, probably next fall. The last home in that neighborhood with my same floor plan sold for almost double what I paid for it six years ago. I just hope that the capital gins tax is still at 15 percent by the time we sell. A Biden "win" would probably screw that up.
Have a house North of Austin, Tx. and a small one on the Tx. coast. Demand and prices are up in both places, particularly in the $250K to $300K range.
Suburban Omaha, NE. Houses are selling for maybe 15% over what would be expected, at asking prices or close to it. They are on the market for only a couple days to a week.
I think part of it is people moving out of the city school district (which is closed still) to the suburban districts (which are open and working well), but that would really only explain the last 6-8 weeks. The quick sale/good price phenomenon has been going on pretty much all of 2020, after a brief slower period in April.
However, they increase in a 2500sq ft house is probably $8-15K. It is NOT $100K. something else is up.
I think the increased cost is only part of it. Another aspect may be that they know they can get a lot more for it now, so they are happy to undo the deal that they entered into several months ago.
We are forming a top right now in the real estate market. It has been going up for eight years here.
There will be foreclosures in about 2 years. That will be the time to buy back in again. IMHO.
By the way, zillow is a PITA to navigate. I cut my teeth on ebay, though I don’t recommend it now. Craigslist is free and gets you a lot of views.
I believe anyone who can make temporary arrangements might opt to do so then buy back in when things settle down; I also think anyone with property in the new expanded “sh!thole” zones should sell because I don’t see any recovery for those areas at any point in the coming decades. On top of that, they are often in areas where ChiCom virus lockdowns have seriously impacted tax revenues, so the prospects for those areas are even dimmer.
Many of these sh!tholes are banking on a bailout from “President Joe Biden”; turning them from tax generators to just more outstretched palms doesn’t bode well for any normals/makers there.
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