patrick.net

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?

Are we having record inflation or not? Please explain how housing prices are going to drop while everything else is going up 10%+ yoy.

Al_Sharpton_for_President says

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?

The reason why I still haven't bought a home is this. I wanted a 1600 sft ranch home (more than enough for my small family). My wife wanted a larger colonial style home with a sunroom. We argued and fought. Yep, we still rent and are rather happy. We travel and have our kid's undergraduate education 100 percent covered.

pudil says

Are we having record inflation or not? Please explain how housing prices are going to drop while everything else is going up 10%+ yoy.

It's a reversion to the mean. Austin will revert back to the mean increase.

Home values in Austin have increased by 29.4% over the last year. Over the past five years home values in Austin have increased by 99%. Median sales price for a home in Austin is $550,000 based on the most recent report from the Austin Board of Realtors.

The Austin market is the biggest market for flippers and the government/FED at the moment is not subsidizing them as much. Increasing interest rates, takes away the house price increases. 20% of all transactions in the last year were speculators.

"You cannot subsidize irresponsibility and expect people to become more responsible."
- Thomas Sowell

Does that make sense pudil?

I should note, I'm carrying a chip on my shoulder, I should've bought in Austin earlier. However, I did buy in the Waco-area.

A few years back I talked to a mortgage loan officer. At that time we had more than 100k sitting in our checking account and it was in an increasing trend. She said the reason we have this cash in our account was because we live like students. That is, even after we graduated from school and got jobs, we continued to live like students.

What's the mortgage debt about? Is it about keeping the population running on an job treadmill? Is it about a method of preventing mass chaos? Is it about maintaining power status quo? We talk about freedom but seems to me the most important freedom is fiscal freedom.

WookieMan says

You have to be an unethical dick to work in RE and I couldn't do it anymore.

I agree. Is this because agents work only on commission (no salary at all)? They don't eat if they don't kill. And they kill using any means necessary. An ethical real estate agent will soon leave real estate business. In fact, I met a young real estate agent who pretty much told me this.

pudil says

Are we having record inflation or not? Please explain how housing prices are going to drop while everything else is going up 10%+ yoy.

Housing prices are tied to wages, not inflation.

Booger says

pudil says

Are we having record inflation or not? Please explain how housing prices are going to drop while everything else is going up 10%+ yoy.

Housing prices are tied to wages, not inflation.

I would also say house prices are strongly correlated to wages and net wealth.