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Sort of a couple of trip reports:
1. My high school pal who is senior at DR Horton and who was overseeing 150 houses being built at this same time last year says they aren't doing anything right now.
2. I just remodeled a rent house that easily fetched $2050 monthly rent before the remodel and almost no showings the past 2 weeks. One low ball offer that soon will have made sense to accept. One price drop so far. I've never had a vacancy like this since I started it in 2013.
(San Antonio)
wide range of consumers are finally pushing back ?
Mortgage rates dropped to 6.50%, the lowest since May 2023, according to the Mortgage Bankers Association today. But instead of re-igniting demand for homes from buyers who need mortgages, these dropping rates have caused potential buyers to wait for mortgage rates to drop further, and to wait for home prices to drop, as prices are way too high, and so demand has dropped further, with applications for mortgages to purchase a home dropping toward their historic lows.
1. My high school pal who is senior at DR Horton and who was overseeing 150 houses being built at this same time last year says they aren't doing anything right now.
https://wolfstreet.com/2024/08/28/treasury-department-aggressively-pushes-down-long-term-interest-rates-via-shift-to-t-bill-issuance-and-bond-buybacks/
2. I just remodeled a rent house that easily fetched $2050 monthly rent before the remodel and almost no showings the past 2 weeks. One low ball offer that soon will have made sense to accept. One price drop so far. I've never had a vacancy like this since I started it in 2013.
Hey kids, The days of >5% 13-week T-bills is slipping away.
SoTex says
2. I just remodeled a rent house that easily fetched $2050 monthly rent before the remodel and almost no showings the past 2 weeks. One low ball offer that soon will have made sense to accept. One price drop so far. I've never had a vacancy like this since I started it in 2013.
Still nothing. I may be replacing 4 black kitchen appliances with stainless to keep up with the competition in addition to asking for lower rent. I guess there are labor day sales this weekend so there's that.
Realtor pictures of the place suck too so I'll be doing that myself this holiday weekend as well.
One good piece of news is DeSantis signed a bill that severely restricts HOAs in limiting work vehicles in driveways, requiring them to keep itemized expenses, banning fines without multiple warnings, requiring new fineable rules to be promulgated in writing to all members and not enforceable until after the next board meeting (which by law must be announced well in advance in writing), redefining HOA entry to immediate emergencies only, limiting backyard restrictions, limiting fines to less than the county/cide code violation equivalent, etc. etc.
Excellent news, and this is actually the Realtors and Developers pushing this, since people are shying away from HOAs but 3/4 of the new housing in FL has been under HOAs this century so far.
Haha, make sure to post your better photos of what your Realtor provided. Seriously, I’d like to see them.
HOA expenses and insurance expenses wipe out any "savings" from a lower price
During the 2024 Florida legislative session, the legislature passed CS/CS/HB 1049 Flood Disclosure in the Sale of Real Property. The bill requires sellers of residential real property to provide a completed flood disclosure form to the purchaser before a sales contract is executed. The bill requires the following of the flood disclosure:
- The form's title must be “FLOOD DISCLOSURE.”
- A flood insurance disclaimer must be provided stating: “Flood Insurance: Homeowners' insurance policies do not include coverage for damage resulting from floods. Buyer is encouraged to discuss the need to purchase separate flood insurance coverage with Buyer's insurance agent.”
- The seller must state whether they have filed a claim with an insurance provider relating to flood damage on the property, including, but not limited to, a claim with the National Flood Insurance Program.
- The seller must state whether they have received federal assistance for flood damage to the property, including, but not limited to, assistance from the Federal Emergency Management Agency.
The bill defines flooding as a general or temporary condition of partial or complete inundation of the property caused by any of the following:
- The overflow of inland or tidal waters.
- The unusual and rapid accumulation of runoff or surface waters from any established water source, such as a river, stream, or drainage ditch.
- Sustained periods of standing water resulting from rainfall.
This bill's passage is considered a significant win in Florida’s floodplain management community. A majority of local floodplain administrators and the Florida Floodplain Managers Association supported the bill. Florida now joins 32 other states requiring some form of flood disclosure to sell real property as it becomes more flood-damage resilient. Potential buyers, both in-state and out-of-state, will be informed of flooding risks before purchasing a home and may avoid flood-related costs.
The effective date of this bill is October 1, 2024, unless vetoed by the Governor.
Unless DeSantis exercises his veto power - unlikely - It will be law that all House Sellers must reveal if they've claimed flood damage during their entire ownership of the property. Including filings with any federal programs, not just private insurance. It must be provided Prior to contract execution.
Yes, disclosures. Is that not law in FL??? We had to settle out of court over a property that flooded. That's common law in pretty much every state. I've never heard of a state the doesn't require flooding as part of disclosures. Federal programs don't matter, you have to disclose if your house floods.
WookieMan says
Yes, disclosures. Is that not law in FL??? We had to settle out of court over a property that flooded. That's common law in pretty much every state. I've never heard of a state the doesn't require flooding as part of disclosures. Federal programs don't matter, you have to disclose if your house floods.
^^^^ this was my line of thought when reading that too.
But then I thought: FLORIDA
The Realtor's last year excuse of no inventory/no choice rings hollow as Florida inventory skyrockets.
FL saw an influx of retirees and thought it wouldn't stop. It is.
The coming Fed Rate cut is already priced in by the banks. Wall Street fled the SFH market last year.
Needs to be 3.5% to adjust for median income, something that happened for a few months in the last 25 years.
And 2.75% to adjust for the 25-30% nationwide increase property tax and insurance markups these last few years. And the AirBNB battering from both the Economy and from Local Ordinances.
WookieMan says
FL saw an influx of retirees and thought it wouldn't stop. It is.
Yup. And this has happened before with gaps between the Greatest and the Silents, too.
When you don't build that shit was fake. FL saw an influx of retirees and thought it wouldn't stop. It is. There goes the market. It's pretty basic if you think about it. Covid bump and poof, it's over. 2-3 years from now I'd be intrigued in the FL market after it crashes. It's got a way to go.
The big lie is that we never built enough housing; the real truth is we built enough, a million a year, but the wrong kind.
Single Childless Cat Mom Middle Aged Florida Teachers don't need and can't afford to really keep a $420k 4 bed/2 bath.
At 4% or 7%. And definitely not with the 30% blowup in insurance and property taxes.
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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net
Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.
Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.