patrick.net

WookieMan says

But can you imagine paying $3MM, followed by $300k rehabilitation, waiting nearly 2 years, and then finally moving into your not-new 1555 square foot house! Yikes.

This is life in the Bay Area.

WookieMan says

$300k is insane for a rehab of 1,555sf.

As BACAH notes, this is California with an extra bonus cost for Bay Area. If you wanted to bulldoze, you'd pay a bundle just for the bulldozing of hazardous materials (lead paint mitigation and probably also small amounts of asbestos) and then the building permits would be expensive and slow down the works even more.

A while back there was a house that came to internet fame because it had suffered a fairly extensive fire damage but went up on Zillow "as is." It promptly sold for $xxx above asking all-cash. That got me thinking that, actually, a burned out house might allow you to skip some of the extra costs associated with bulldozing a house, so buying such a house would actually fetch a premium because it is already destroyed.

Al_Sharpton_for_President says

https://www.zillow.com/homedetails/604-Cheshire-Way-Sunnyvale-CA-94087/19614174_zpid/

Crap box.

Only bought because they work in Sillycon Valley. Not like its a Baby Boomer or recently retired Gen X'er vacation home in Panama City Beach.

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WookieMan says

Not cheap

You really need to stop basing your reality on Dumfuq, IL.

You do not know what the words 'not cheap' mean

MolotovCocktail says

WookieMan says

Not cheap

You really need to stop basing your reality on Dumfuq, IL.

You do not know what the words 'not cheap' mean

Is AD lying when he talks about townhomes in PCB? High $200's. Minutes from the gulf.

Here's some data and links. All are below $400k and closer to around $300k and a few new.

MO: On water and a dock included https://www.realtor.com/realestateandhomes-detail/1034-Indian-Pointe_Osage-Beach_MO_65065_M89125-41916

FL: Probably somewhat near AD. Community amenities and close to amazing beaches. Far enough from the shore to likely avoid storm surge. Can't avoid the wind. https://www.realtor.com/realestateandhomes-detail/The-Aldridge_Liberty_6225-Chapman-Lane_Panama-City_FL_32404_P417000746682

IL: Not near me. https://www.realtor.com/realestateandhomes-detail/2230-Barbera-Dr_Oswego_IL_60543_M94606-46827

https://www.realtor.com/realestateandhomes-detail/507-Sangamon-Ln_Dixon_IL_61021_M80139-59679

https://www.lennar.com/new-homes/illinois/chicago/malta/prairie-springs/aspen/18918710831

WI: https://www.realtor.com/realestateandhomes-detail/301-Harbour-Town-Dr-Apt-326_Madison_WI_53717_M78159-10302

MT: https://www.realtor.com/realestateandhomes-detail/917-N-17th-Ave-Apt-3_Bozeman_MT_59715_M85556-10308

AZ: https://www.realtor.com/realestateandhomes-detail/2609-N-65th-Dr_Phoenix_AZ_85035_M18172-88318

OH: https://www.realtor.com/realestateandhomes-detail/1011-Brookview-Blvd_Cleveland_OH_44134_M31969-68548

I could go on forever. There are plenty of homes out there for 3-4x a McDonalds two income home. CA is not the country. There are plenty of cheap homes out there. You selectively quoted as usual. I was talking about the materials.

WookieMan says

Not cheap builder grade stuff either.

Let me know the last house you built. I'll wait.

WookieMan says

Let me know the last house you built

What does that have to do with anything?

You don't know shit outside of Dumfuq, IL on that topic, either. ESPECIALLY on that topic.

WookieMan says

You selectively quoted as usual.

Right. You make universalist statements all based on Dumfuq, IL. I quote you and...that's 'selective quoting'?

One can not make 'selective' quoting out of universalist statements. Just like something AND something else is not something AND/OR something else except in your little world as well.

MolotovCocktail says

WookieMan says

Let me know the last house you built

What does that have to do with anything?

You don't know shit outside of Dumfuq, IL on that topic, either. ESPECIALLY on that topic.

I actually do. It's okay you don't know. You're talking about land value, not building materials and labor. Building costs are generally universal across the country. They're within 5%-10% on the high end, which really is nothing. $20-40k on your average home build. Custom mansions is completely different. A 1,500sf home rehabbed or new build is about the same nationwide price wise.

My house would cost the same in CA as IL. It's the value of the land. Patrick has brought this up before with Georgism or whatever the term is.

Again. I'm also talking about the materials. Trumps gold bathroom is going to be more expensive than mine with Kohler plumbing fixtures. While you probably go with Glacier Bay. Something I use 30-60min a day is important to me.

As usual, you're missing the point. Tear down the house and rebuild it. The value is in the location of the land.

WookieMan says

As usual, you're missing the point. Tear down the house and rebuild it. The value is in the location of the land.

The land here is really expensive, but I think you are wrong about the cost of building. It's more like 2x the cost compared to other states. Between higher labor costs, sales tax (nearly 10%), higher cost of materials (because the warehouses that hold the stuff have to charge more because it costs them more), etc. And then there's permitting; that alone can cause stratospheric costs and long delays.

Just look at the California "high speed" train to nowhere... 10 years in, billions spent, and not a single foot of track laid.

Or look at the improved southern approach to the Golden Gate Bridge — a series of upgraded approach roads. It cost more than the original Golden Gate Bridge even after adjusting for inflation.

WookieMan says

Is AD lying when he talks about townhomes in PCB? High $200's. Minutes from the gulf.

here you go boy

this one sold recently and look at how far it is away from the world's best beaches, boy ...

and the starting hourly wage for service workers is now $16 an hour on average in Panama City Beach, according to what I've learned going to the local economic development alliance meetings and also from bubba/redneck friends who I fish with

https://www.zillow.com/homedetails/1882-Annabellas-Dr-Panama-City-Beach-FL-32407/87630869_zpid/

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WookieMan says

There are plenty of homes out there for 3-4x a McDonalds two income home.

yeah boy, i could take you about 45 minutes north of panama city beach and there are homes (not trailers) selling for around $230,000

i think i saw a dr horton or toll brothers ad about a new single family detached homes selling for $225,000 near chipley or defuniak springs (about an hour north of panama city beach)

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SunnyvaleCA says

The land here is really expensive, but I think you are wrong about the cost of building. It's more like 2x the cost compared to other states. Between higher labor costs, sales tax (nearly 10%), higher cost of materials (because the warehouses that hold the stuff have to charge more because it costs them more), etc. And then there's permitting; that alone can cause stratospheric costs and long delays.

Ahem, Homie: we are wrong and he knows.

Because he is an Expert on just about everything: day to day life in California and the Bay Area, real estate values in the Florida Panhandle, aviation, aerospace, manufacturing, military combat. Oh yeah, and what exactly is a "coastal" region (like Dallas Texas).

MolotovCocktail says

You don't know shit outside of Dumfuq, IL on that topic, either. ESPECIALLY on that topic.

Yes he does. He Knows It All. No bother posting a disagreement.

Just kick back and enjoy the entertainment of hilarious over-the-top assertions.

AD says

this one sold recently and look at how far it is away from the world's best beaches, boy ...

When talking condos/townhomes note that most tent to have high HOA fees. Your example has an HOA fee of $420/mo.

WookieMan says

You're talking about land value, not building materials and labor.

I think you are confusing me for what someone else posted.

WookieMan says

My house would cost the same in CA as IL.

Really? Tell me. Do IL require basically two plumbing systems in order to deal with grey water? Or is that optional per the person having the home built (because they are California Fuktards moving in). Just one example.

HeadSet says

When talking condos/townhomes note that most tent to have high HOA fees. Your example has an HOA fee of $420/mo.

Yeah, but the HO-3 or HO-6 insurance is lower since the insurer knows that the HOA covers "master insurance" (i.e., coverage of "dry wall out"), and other home ownership costs are saved such as on landscaping and replacement of the roof.

I drove by a DR Horton community northwest of Panama City Beach (about an hour away) and they were showing around $240,000 for single detached homes with garages. I suspect the HOA assessment is no more than $50 a month there.

AD says

I drove by a DR Horton community northwest of Panama City Beach (about an hour away) and they were showing around $240,000 for single detached homes with garages. I suspect the HOA assessment is no more than $50 a month there.

With teaser rate incentives. Why pay just $20-40k less for an 80s-90s era ranch at the full rate with no teaser? Any "Savings" in price is just the minimal amount to bring things up to date, clean out the ducts, replace the water heaters and countertops, get rid of the dark grout spaced "Florida Tile", paint over the billard green walls, the handle-less white (now off-white from age/dust) cabinets with the darker wood colored frame, replace the rose-colored sink with the crystal ball faucet, Duran Duran era golden-framed mirrors and built-ins if any, etc. Oh, and end up with 100-200 sq ft less under air if one picks the older house, too. And likely a smaller garage if any at all.

At least there's no Hotel California wood paneling.

This real estate market (nationally) is so interesting. Once time and increasing demographic pressure pries the "sticky upwards" mentality finally off the wound, prices will collapse. Fed could drop the rates 2% and it won't prevent the inevitable price discovery.

WookieMan says

As usual, you're missing the point. Tear down the house and rebuild it. The value is in the location of the land.

LOL You are almost correct even in CA with little extra prices, ONLY if you can keep few wood/bricks from old the house in its place to keep the CA Prop 13 Ponzi Scheme property taxes to show that its a "repair" ;)
On a second "repair", that old ugly patch get replaced as well ;)
Under CA Prop 13, you never ever use certain words like "rebuild" to maintain 1970s taxes forever!

Blue says

Under CA Prop 13, you never ever use certain words like "rebuild" to maintain 1970s taxes forever!

100% get that. My point overall is you're given the land for free the cost to build is within 5-10% up or down nationwide. It's not necessarily more expensive to build in CA. Probably more expensive in WY or MT because it has to ship further with no water routes. This is basic economics.

AD says

Yeah, but the HO-3 or HO-6 insurance is lower since the insurer knows that the HOA covers "master insurance"

Thanks, I may be able to use that info, as I am looking at a place to but for my daughter and I ruled out condos with high HOA fees. I will now check to see the insurance offset on any place that looks doable.

PanicanDemoralizer says

With teaser rate incentives. Why pay just $20-40k less for an 80s-90s era ranch at the full rate with no teaser?

What the fuck are you talking about boy ? These are brand new homes, and in the best part of the USA , a rural part of Florida panhandle and only a 30 minute drive to the Alabama border

"I drove by a DR Horton community northwest of Panama City Beach (about an hour away) and they were showing around $240,000 for single detached homes with garages. I suspect the HOA assessment is no more than $50 a month there."

AD says

What the fuck are you talking about boy ? These are brand new homes, and in the best part of the USA , a rural part of Florida panhandle and only a 30 minute drive to the Alabama border

I'm not talking about those, I agree 110% with what you say:

PanicanDemoralizer says

With teaser rate incentives. Why pay just $20-40k less for an 80s-90s era ranch at the full rate with no teaser?

I'm comparing what delulu used home sellers are asking for vs. the new builds YOU are talking about. And adding the fact most builders are offering builder-financed teaser incentive rates well below what qualified mortgage applicants would get for a used house from their bank.

But it was kinda of unclear and I could have worded it better.

The same thing is happening on the Space Coast. An 80s-90s Ranch is in the high $200k's - but the brand new build in the same neighborhood is going for barely over $300k with more square feet under air and new everything AND a bigger garage to boot plus the 2-year teaser rate offered by the builder which the used house seller cannot match.

This is why used home sellers are fucked in Florida but haven't realized it yet and haven't accepted post-COVID reality.

PanicanDemoralizer says

This is why used home sellers are fucked in Florida but haven't realized it yet and haven't accepted post-COVID reality.

yeah, forgot the name of the reliable poster who lives in central Florida and posts about Titusville and Merritt Island concrete blocks homes built in 1960s

but from my first hand observations, townhomes in Panama City Beach are selling if they are discounted about 20% from their all time high prices set in early 2022

PD, have you SEEN any of the garbage quality on these new builds that these asshole “builders” are putting out these days? If you’re not working with a custom builder of quality or doing it yourself, you are playing craps. Take a gander at the absolute trash these home inspectors are exposing on BadTube….

Same dude, altered username.

Rents have collapsed here. Was over $2000 easy for a two bed, even on the mainland during and a bit after COVID. Now under $1700, including some decent 90s-2000s era entire houses.

PanicanDemoralizer says

Same dude, altered username.

Rents have collapsed here. Was over $2000 easy for a two bed, even on the mainland during and a bit after COVID. Now under $1700, including some decent 90s-2000s era entire houses.

yeah you have been following the Space Coast market for a while

same here in best place on Earth (Florida panhandle) as far as rents at early 2021 levels for 3 bedroom townhomes

.

Back in the 90's, I could rent a 2-bedroom, one bath pad in TX for $240 a month.

Then shit went fucking insane.

ForcedTQ says

PD, have you SEEN any of the garbage quality on these new builds that these asshole “builders” are putting out these days? If you’re not working with a custom builder of quality or doing it yourself, you are playing craps. Take a gander at the absolute trash these home inspectors are exposing on BadTube….

Yeah, some really blow. I'm still not thinking about touching jack and shit for at least a couple of years to buy again.

My idea would be a 90s-2000s build where Grandpa and Grandma actually did something to keep up the retirement home over the past decades and, if lucky, replaced the ol' Florida Contractor Special grout-gap tile for gapless Vinyl/PVC Tile. Problem with homes older than that is no Walk-Ins. I got kids and guns and lawyers and paperwork that need to be kept under air but locked up. Hard to lock sliding/accordion doors, and then you have no space for actual clothes.

The funniest thing about Florida is the Old Person Mail Patrol. "He's usually here at 1PM. Where the hell is he! It's 2:30 already! I'm calling the Post office to report him."

Soc Sec does direct deposit these days, and probably every kind of pension is now direct deposit, so it can't be those things. But I guess they just want to see the print out summary of it all.

WookieMan says

It's not necessarily more expensive to build in CA. Probably more expensive in WY or MT because it has to ship further with no water routes. This is basic economics.

Basic economics says that massive regulation causing all sorts of restrictions means costs skyrocket. And if you want to build a whole development complex (to amortize the permits and other government-related restrictions) you'll be forced to put in subsidized "low income" units and special handicapped units and have special "green" areas. Parking will have to be in a vertical garage because heaven forbid you take up more green space. All houses now have to have hookup for solar panels. Many places disallow natural gas, so you'll be building heat-pump heating.

stereotomy says

Back in the 90's, I could rent a 2-bedroom, one bath pad in TX for $240 a month.

Then shit went fucking insane.

I rented a 1 bedroom unit for $300 (included electric and water) in 1993 in Panama City Beach, it was a very nice garage apartment

same unit likely rents for $1500

about a 5% annual increase in rent over last 32 years

ForcedTQ says

PD, have you SEEN any of the garbage quality on these new builds that these asshole “builders” are putting out these days? If you’re not working with a custom builder of quality or doing it yourself, you are playing craps. Take a gander at the absolute trash these home inspectors are exposing on BadTube….

yeah we got around a $185,000 brand new 3 bedroom, 2 car garage townhome in Panama City Beach in 2016

its not perfect but its a nice home and a very good deal

yes there were punch list items we had to take care of on our own

it also held up very good in hurricane michael with +180 mile wind gusts

and citizen insurance (essentially a state run insurance) sent an adjuster / inspector to our home to inspect it prior to approving our insurance coverage and he said its a good solid home

.

MolotovCocktail says

Homes were never, ever meant to be (near guaranteed) slot machines. Most people considered breaking even on a house was a pretty damn good deal.

You can look up addresses on Zillow to find what it'd cost per month to buy ('refi"), and what it'd cost per month to rent. It says my residence would be $7k per month to own, $4300 to rent. That's an "ownership premium" of 63%, which I think is insane. Folks are still buying.

This is why homie is not impressed when "Bay Area, Cool And Hip" homeowners Talk Smug.

B.A.C.A.H. says

MolotovCocktail says

Homes were never, ever meant to be (near guaranteed) slot machines. Most people considered breaking even on a house was a pretty damn good deal.

You can look up addresses on Zillow to find what it'd cost per month to buy ('refi"), and what it'd cost per month to rent. It says my residence would be $7k per month to won, $4300 to rent. That's an "ownership premium" of 63%, which I think is insane. Folks are still buying.

This is why homie is not impressed when "Bay Area, Cool And Hip" homeowners Talk Smug.

If they can afford it and believe the prices will rise forever, it makes sense to own even though it costs more to do so.

B.A.C.A.H. says

You can look up addresses on Zillow to find what it'd cost per month to buy ('refi"), and what it'd cost per month to rent. It says my residence would be $7k per month to won, $4300 to rent. That's an "ownership premium" of 63%, which I think is insane. Folks are still buying.

Around here, that same Zillow shows about a $2,000 "ownership premium" on a million-dollar home. if so, I cannot see why so many people are buying, especially when closing costs are added in. I would assume that the owners of million dollar homes do not want to rent them out so renting is not really a choice.

B.A.C.A.H. says

You can look up addresses on Zillow to find what it'd cost per month to buy ('refi"), and what it'd cost per month to rent. It says my residence would be $7k per month to won, $4300 to rent. That's an "ownership premium" of 63%, which I think is insane. Folks are still buying.

B.A.C.A.H. says

MolotovCocktail says

Homes were never, ever meant to be (near guaranteed) slot machines. Most people considered breaking even on a house was a pretty damn good deal.

You can look up addresses on Zillow to find what it'd cost per month to buy ('refi"), and what it'd cost per month to rent. It says my residence would be $7k per month to won, $4300 to rent. That's an "ownership premium" of 63%, which I think is insane. Folks are still buying.

This is why homie is not impressed when "Bay Area, Cool And Hip" homeowners Talk Smug.

My area of the 'vale seems particularly skewed towards better to rent. My house has a rent Zestimate™ of a a mere $5760. To buy my $2.6MM turkey, your monthly mortgage and taxes would be $15,000 and $2500. So, there's a 3x premium cost to owning by that metric.

One of the earlier themes here on Pat Net was the number of years it took paying rent to equal the purchase price of a house. For example, if a house rented for $50k per year but cost $800k the number was 16 — a fairly reasonable number. If the number was higher it was better to rent; if it was lower it was better to buy. My house is a factor of 37.

Why do people hold onto their houses even after fleeting the state? Perhaps they look at the last 30 years of ownership and assume the 7 to 10% annualized gain will hold on forever; that's better than any bonds you might buy. Another consideration is that old people might want to hold until they die so that their "kids" can inherit tax free. Either way, people are stubbornly holding excess houses and keeping the purchase prices artificially high compared to rents.

SunnyvaleCA says

Either way, people are stubbornly holding excess houses and keeping the purchase prices artificially high compared to rents.

There are various end games to housing. My mom now owns my home. It's in a trust and I will get it back and can rent it out with no mortgage. My wife is not listed in the trust. By the time my mom passes it will be $3k in rent and only about $4k/yr in taxes. Kids will be gone, so expenses are only the wife and I.

I'm basically retired and it wouldn't be this way without owning a home. And we're talking low prices on houses where I'm at in IL. Outside of tech workers that get stock options I make more than guys/gals in CA paying $1-3M for a house similar to mine OR rent. Not a brag, but I get shit on for my point of view about RE from people that don't understand it. It's made me wealthy enough to not work at 42.

My next goal is vacation/retirement property. Goal is by about 48 to be living in St. Thomas or St. John during the winter months. Stay in IL with hopefully a paid off new home that's 6 years old in spring, summer and fall.

Hated my dad, but he did teach me great financial advice. I've done well.

GNL says

If they can afford it and believe the prices will rise forever, it makes sense to own even though it costs more to do so.

Right, it's all about the expected rise in price compensating for the monthly loss in cash compared to renting the same kind of house.

When prices start falling, they are likely to keep falling down to the level actually justified by rents, as people stop betting on appreciation.

Patrick says

GNL says

If they can afford it and believe the prices will rise forever, it makes sense to own even though it costs more to do so.

Right, it's all about the expected rise in price compensating for the monthly loss in cash compared to renting the same kind of house.

When prices start falling, they are likely to keep falling down to the level actually justified by rents, as people stop betting on appreciation.

Yes, I would think so but, I also think we are in an extreme wealth/income inequality system now. No, I am not woke or some other BS. I don't think "they" were kidding when they said you won't own anything but, they were wrong about the you'll be happy part.

It’s colossal stupidity that we let turn housing into ever appreciating CC. That kind of system sinks society.

GNL says

Right, it's all about the expected rise in price compensating for the monthly loss in cash compared to renting the same kind of house.

When prices start falling, they are likely to keep falling down to the level actually justified by rents, as people stop betting on appreciation.

There's lots of stuff on the internet about AI causing elimination of white collar "knowledge" jobs. Peggy Noonan, a political commentator, penned an editorial in the weekend WSJ about the phenomenon.

Here in the BayAreaCool And Hip, I have immediate family employed at some of those household name Silicon Valley companies you all have heard of, who have front row seats to what is happening. Job eliminations at employers with revenue and profit soaring as roles are replaced by AI. A long-time friend of mine was laid off with fifteen others in a manufacturing department where the "knowledge work" was sufficiently automated to retain two engineers from the original 18, - making 16 redundant. The AI changes are real. What's happening now is the tip of the iceberg.

When I was working in hardware technology development, I suppose about 80% of the time I spent on the job was doing stuff that an unsavvy person like me could train an AI to perform. Another way of saying that is my department could reduce the number of engineers by 80% and get the same results.

All the decades that manufacturing was leaving the region (first aerospace, then computers, then semiconductors) the region's cheerleaders crowed that our region will thrive because we're a knowledge economy, where knowledge workers are in demand and the pay is high. We don't need manufacturing. We have the world at our fingertips and The Sky Is The Limit.

I get it. Some AI will need some retained knowledge workers to run it. Maybe I would have been one of the 20% to stay on in my department to do that. What about the other 80% who drive the local economy?

If this AI deployment unfolds the way it looks like it's unfolding, Silicon Valley and the Bay Area are in the direct sights of the change. Other regions' knowledge worker payrolls in jobs like paralegal, accounting, etc will be reduced. But the Cool And Hip Bay Area may be hammered, since our Knowledge Worker employment cohort is highly paid and has driven our regional economy for a long time. Laid off techies competing for a shrinking number of jobs even as colleges continue to crank out new engineers is going to hit salaries and compensation for those who land a gig.

Time will tell if the changes affect rents and house prices.

WookieMan says

Not a brag, but I get shit on for my point of view about RE from people that don't understand it. It's made me wealthy enough to not work at 42.

From your posts, it looks like your wealth is more from parental hand me downs and a highly paid wife. Didn't you say your mom bought your old house and you borrowed against your mom's stock portfolio? Are you now claiming to be a self-made real estate investor? Or is this just another of your extreme exaggerations? Leveraging your mother's money makes you a shrewd RE businessman in the same way that having a drone permit makes you an "FAA certified" expert competent enough to lecture actual pilots about flying. Is this why you have not published the promised pictures of your home build, since it would expose the house as being just another mid-sized minimum code structure?