patrick.net

https://digg.com/real-estate/link/american-cities-with-highest-year-over-year-median-asking-rent-pending-sales-falling-out-of-contract-Ji2NDMmDhc

Pending Home Sales That Fell Out Of Contract As A % Of All Pending Sales

Florida seems to be dominating this list.

https://www.marketwatch.com/story/scary-times-builders-cut-home-prices-and-slow-construction-as-buyers-pull-back-survey-shows-11657567086

Builders are slashing home prices and slowing construction as buyers pull back, survey shows

Home builders are feeling jittery.

That’s according to a June survey of home builder sentiment by John Burns Real Estate Consulting. Demand for new homes is cooling as buyers cancel orders, and builders are slashing prices to offload homes, the survey found.

“Scary times,” a home builder in Nashville, Tenn. told the company. “Hoard cash and hang on for the ride!”

Sales of new homes fell 31% this June as compared to last year. Cancelation rates jumped in June to 14.5% nationally, up from 6.5% a year ago, as seen in the tweet below.

The monthly survey was based on 320 participants in 84 metro areas.

Texas saw the highest rate of cancelations (when buyers terminate a contract for a new home), followed by the broader Southwest, and Northern California.

A quarter of home builders are reducing their prices, according to the John Burns Real Estate Consulting survey.

There are couple of reasons that homebuyers are pulling back: Mortgage rates have risen considerably since last year, which has made borrowing expensive, on top of rising inventory levels.

Other surveys have suggested that home builder morale is sinking. Builder confidence fell for the sixth straight month in June, according to the NAHB/Wells Fargo U.S. Housing Market Index. This month’s numbers will be released on Monday.

Home builders surveyed by John Burns expressed frustration over the slowdown.

“Someone turned out the lights on our sales in June!” one builder in Atlanta, Ga. told the company.

“Sales have fallen off a cliff,” an Austin, Texas builder said. “We’re selling 1/3 of what we sold in March and April.”

A Boise, Idaho builder said that builders are slashing new home prices by 15% to 20%.

Here in SJ, selling at the bestest most peakest price is not a priority to folks with $1 M equity who want to cash out and retire to a cheaper place.

Of course they will take the most they can get. But bidding wars etc are not their fault: it's the buyers' fault for overpaying.

A subset of sellers are flippers and recent buyer house-poor Greater Fools who over committed to the high monthly cost with the high property tax commitment.

This subset of sellers may be relatively in larger number than the long-time owners I mention above, but they are not everyone. This subset, many stressed out, will react with anxiety to and curse at the long-time owner who will still be pleased to settle for a 100K or more reduction in the asking price.

zzyzzx says

Chinese Homebuyers Across 22 Cities Refuse to Pay Mortgages

What would happen if American homebuyers do this too? There was a fellow in New York who didn't pay his mortgage and used a loophole in bankruptcy laws to live in his home for 20 years.

Opendoor house:

gabbar says

What would happen if American homebuyers do this too?

Bro, can you say Financial Crisis of 2008?

Open door is doing this:

Zillow
$642,798 TYPICAL HOME VALUE
$554,866 TYPICAL VALUE ONE YEAR AGO
-14.4% 1-YEAR FORECASTED VALUE DECREASE
54 HOMES FOR SALE
22 HOMES RECENTLY SOLD

zzyzzx says

“Sales have fallen off a cliff,” an Austin, Texas builder said. “We’re selling 1/3 of what we sold in March and April.”

A Boise, Idaho builder said that builders are slashing new home prices by 15% to 20%.

For every 1% increase in the 30 year mortgage rate, there needs to be a 10% drop in home prices. I expect a 15% to 25% drop overall for housing prices.

.

1337irr says

Where have you bought real estate? I bought near Waco, TX, the soil is kind of bad for foundations.

I've bought two for myself in Chicago and my current one out in the cornfields about 90 minutes outside Chicago. Was partner with my boss in about 10 multiunit properties in Chicago.

I managed a real estate brokerage for 15 years. 90% of non-investment purchases, primary home buyers basically, almost always looked like a ghost by the end of the inspection. And 90% of the time the inspector just brought up shit that didn't matter.

Foundations are always a concern anywhere, even basic slab builds, but 9 out of 10 times something wrong is curable. That goes back to point one. Always assume the worst with a home and hope for the best. Remember that inspectors likely may have only worked in one or two trades or work basic handymen before getting their inspectors license. It's basically the business of networking with Realtors and then justifying fees by find total BS stuff.

People buy cars all the time and ALWAYS have to make repairs generally. But home buyers for some reason don't think they're going to have to fix shit on a house. It's rather bizarre thinking about now.

WookieMan says

I've bought two for myself in Chicago and my current one out in the cornfields about 90 minutes outside Chicago. Was partner with my boss in about 10 multiunit properties in Chicago.

I managed a real estate brokerage for 15 years. 90% of non-investment purchases, primary home buyers basically, almost always looked like a ghost by the end of the inspection. And 90% of the time the inspector just brought up shit that didn't matter.

Foundations are always a concern anywhere, even basic slab builds, but 9 out of 10 times something wrong is curable. That goes back to point one. Always assume the worst with a home and hope for the best. Remember that inspectors likely may have only worked in one or two trades or work basic handymen before getting their inspectors license. It's basically the business of networking with Realtors and then justifying fees by find total BS stuff.

People buy cars all the time and ALWAYS have to make repairs generally. But home buyers for some reason don't think...

I am in the market to purchase a first home in the next few years in Columbus, Ohio. I am considering a small ranch style single family home or a single floor condo. What would be your advice/recommendation? Will finance it and it won't be an issue. I did purchase Patrick's book on housing.

gabbar says

I am in the market to purchase a first home in the next few years in Columbus, Ohio. I am considering a small ranch style single family home or a single floor condo. What would be your advice/recommendation? Will finance it and it won't be an issue. I did purchase Patrick's book on housing.

Depending on your age, I'd avoid the condo. If you're older though and don't want to deal with maintenance, a condo might be better. Depends on any trades you might be handy in.

HOA's were one of the worst parts of a transaction and then you have no control unless you get on the board. Even then it's just one vote. If 4 people agree all the siding for example needs to be replaced, which they're likely unqualified to decide, you're likely to get a monthly increase in assessment that is out of your control.

I'd go the ranch route. More work if you're handy, but idle time is just as bad not doing anything yourself with a condo. Age is a factor in this though and where you're at in life. You also have more freedom. Depending on municipality, you have more freedom to add things to the property, etc. Also you're not sharing walls or floors with a neighbor that can change at any time. Are rentals allowed? Condos get complicated.

Basically I'd only do it if I was retired (60+) or if I was doing a 2nd vacation/rental home that I plan to retire in for the condo route. HOA's are mini governments. Some good, some awful. Do your due diligence if going the condo route. Try to contact the President and other board members directly and chat with them. Don't just assume meeting minutes and documents tell the full picture of the property. Make sure they have reserves as well and not broke, as you'll end up with a special assessment down the road. Take note of common spaces whether it's the lawns, lobby, whatever. If it looks like shit I'd avoid it.

WookieMan says

Depending on your age, I'd avoid the condo. If you're older though and don't want to deal with maintenance, a condo might be better. Depends on any trades you might be handy in.

HOA's were one of the worst parts of a transaction and then you have no control unless you get on the board. Even then it's just one vote. If 4 people agree all the siding for example needs to be replaced, which they're likely unqualified to decide, you're likely to get a monthly increase in assessment that is out of your control.

I'd go the ranch route. More work if you're handy, but idle time is just as bad not doing anything yourself with a condo. Age is a factor in this though and where you're at in life. You also have more freedom. Depending on municipality, you have more freedom to add things to the property, etc. Also you're not sharing walls or floors with a neighbor that can change at any time. Are rentals allowed? Condos get complicated.

Basically I'd only do it if I was retired (60+) or if I was d...

Thank you. You are right, condos do have their disadvantages.

My experience… in general

Don’t buy condo

Don’t buy into HOA

Idea:

Buy 2 properties. 1 in a winter vacation location and another in a summer vacation location. Airbnb the properties when you can get the most rent and live in the other. This coud be a great retirement solution for low living expenses.

BayArea says

My experience… in general

Don’t buy condo

Don’t buy into HOA

That is some wise advise. If you have to buy into a HOA, be on the board.

HOAs eat shit. And most new developments have HOAs. Why?

My first home at age 26 was a condo in the Oakland hills

In the 10yrs I owned the unit, there were 4 and 5 figure surprise HOA costs I could never imagine

There were annoying letters about someone spotting my car hood up briefly in the parking lot.

There were emergency assessments

There were years with 20% annual HOA hikes, maximum allowed by law at the time

Just don’t do it.

BayArea says

n the 10yrs I owned the unit, there were 4 and 5 figure surprise HOA costs I could never imagine

There were emergency assessments

There were years with 20% annual HOA hikes, maximum allowed by law at the time

Sounds like it's a poorly run condo association.

WineHorror1 says

HOAs eat shit. And most new developments have HOAs. Why?

I don't get single family HOA's. We'll have a small $40/mo for our single family but that's for parks and mowing. I have a zero turn and will do it for free. I'm in talks with our neighbor we know and might just build the park on our own on the corner lot no one wants (expensive, but whatever). Plus it would increase values in the long term and my lot then feels like 1.2 acres with a park 50-70' from my house. It's been a ghost subdivision (no houses) for over a decade.

Volunteer time goes a long way in a neighborhood. It would eliminate the fee aspect of it as the village would take care of streets and snow plowing. So hopefully could just dump the HOA outside of covenants and restrictions on building, which is generally in line with muni code.

I know someone who lives in a condo in California. He says that (((people))) think that if the roof doesn't leak while they are living there, that they don't have to pay anything towards eventual replacement of the roof. I had no idea that San Jose had so many Jews.

WineHorror1 says

most new developments have HOAs. Why?

Because FUCK YOU!!!

Might only be worth it if cheap and keeps out Airbnb.

WineHorror1 says

And most new developments have HOAs. Why?

Karens who can't tolerate any dissent and now have means to make everyone conform to their idiocy

This is from a realtor:

Booger says

I know someone who lives in a condo in California. He says that (((people))) think that if the roof doesn't leak while they are living there, that they don't have to pay anything towards eventual replacement of the roof. I had no idea that San Jose had so many Jews.

Reserves are probably the biggest thing on the balance sheet. Then it's the eye test to see if the place is being taken care of. If both seem in bad shape, run.

Generally there are 3 scenarios:

1 - High reserves and immaculate looking building(s) and grounds.
2 - High to medium reserves but a bit rough around the edges, but still looks decent.
3 - No reserves and it looks like a dumpster fire.

There are areas in-between for sure. Never ever go for a 3. Use extreme caution with a 2. Assuming no board turn over or drama, 1's are generally pretty safe. Assessment will likely be higher though.

There's value in HOA's for sure, but need to be careful. Where I live there generally is landscaping necessary. That's worth $200/mo alone, though you have less personal yard space (this is for townhome type developments). But then if you want a pool, a fence, kids swing set, etc. you're at the mercy of arbitrary rules you likely didn't have a chance to set or give feedback on. That's when the drama comes in.

https://www.reddit.com/r/RealEstate/comments/w04sdr/need_help_cross_posting/

Booger says

This is from a realtor:

I wrote shit like this all the time for marketing purposes for the brokers in the office. That's textbook Realtor talk. While I managed the office I still had a boss who was the sales type. I'd be too technical and analytical in our monthly newsletters and he'd have me change it to Realtor talk. I'm like whatever.

Part of the reason I left after a decade plus feeling like crap lying about the market. I wasn't sales, but it just made me feel dirty doing it. Made that guy a lot of money and he pissed it all away multiple times. He had ZERO financial responsibility. I couldn't deal with the instability and all the people involved in RE. You have to be an unethical dick to work in RE and I couldn't do it anymore.

Booger says

I know someone who lives in a condo in California. He says that (((people))) think that if the roof doesn't leak while they are living there, that they don't have to pay anything towards eventual replacement of the roof. I had no idea that San Jose had so many Jews.

Maybe these condo owners refused to pay condo fees.

I’m mystified by the people who call a house an investment.

https://www.reddit.com/r/RealEstate/comments/w035sc/question_for_realtorsthose_who_sold_their_home/

Is it normal to have no offers right after an open house (or during it)? We've always put offers in right away, and I was shocked to not get any. We had an open house on a weeknight and another will be on the weekend. My realtor said because both open house dates were posted when the house was listed, that people are smart to not offer anything until after the weekend open house is over.

Realtor: Here is a nice resale, built in 2021. It's listed for $825,000.

Me: What did the current owners pay for it?

Realtor: $725,000.

Me: What did it list for?

Realtor: $630,000.

Me: So the current owners overbid $95,000, or 15%, on the home?

Realtor: Well, it was a competitive market, and they wanted the home.

Me: And now they want me to pay 14% more on top of that, after they lived in it for one year?

Realtor: Ummm.... Can you put your wife on the phone, please?

Al_Sharpton_for_President says

Realtor: Ummm.... Can you put your wife on the phone, please?

I also think that women are a good part of the reasoning behind the overbidding.

Looks like the backup plan on overpaying on a fix and flip house is to rent it out to cover the mortgage payment. The searches for "property manager" are bit elevated in states like California, Florida and New York. Texas, Colorado and Idaho doesn't seem too bad though. And Wyoming isn't a hot market surprisingly.




Thoughts?