Current Advice from Real Estate Agents

[JanT]

When we sold our house in Texas last year we rented an apartment - initially for 3 months so we could wrap up a few things and also to see how Covid shook out. Our plan after that was to do a fair amount of traveling if Covid was under control. Well, we all know how that's worked out. So, we extended our apartment lease for 6 months thinking that would give us some time to do some travel planning and to continue to see how Covid was going. Then in February our apartment was flooded during the big storm there when an upstairs apartment's pipe broke. We headed to a hotel for awhile and decided with interest rates so low (and Covid still playing havoc with travel, maybe we should go ahead and buy another house....somewhere. Because they didn't have another apartment for us they let us out of our lease and we headed out to see what we could find.

We checked out Florida and Arizona and quickly scratched them off the list for various reasons. We headed to Henderson, NV (suburb of Vegas) and have looked and looked and looked - until I am ready to SCREAM! It is crazy out here and builders/developers are playing all kinds of games - only releasing two or three lots at a time, allowing people to bid lot premiums up, outrageous lot premiums period (think $30K - $160K for pretty much standard lots). Housing prices are escalating like crazy (new and resale homes) and they're trying to get $600K for a house that in normal times would be priced around $450K. Calls to sales agents don't even get returned because they are so busy with sales they don't care if they lose one. The one area we are really interested in is not releasing any more lots until mid-May and I can only imagine what prices will be like then. On top of that the sales woman was so snotty and snooty it pissed us off.

So....we're heading to Arizona for 7 weeks where we'll be staying at Sheraton Desert Oasis on Getaway weeks I scored when they were on sale. After that, we'll have to decide what we're doing. But right now, we've put the brakes on buying a new house period. We're thinking we're going to probably just get another apartment in Texas, go through our storage units again deciding on what we can get rid of, and just ride this crazy housing market out. It's going to settle out at some point and we'll be ready then. But, hopefully by then we'll be able to travel internationally which is what we wanted to do anyway.

Bottom line is things are just too crazy right now and we're not going to invest in a house that in a year will appraise for less than what we paid for it (most likely).

 

[klpca]

When we sold our house in Texas last year we rented an apartment - initially for 3 months so we could wrap up a few things and also to see how Covid shook out. Our plan after that was to do a fair amount of traveling if Covid was under control. Well, we all know how that's worked out. So, we extended our apartment lease for 6 months thinking that would give us some time to do some travel planning and to continue to see how Covid was going. Then in February our apartment was flooded during the big storm there when an upstairs apartment's pipe broke. We headed to a hotel for awhile and decided with interest rates so low (and Covid still playing havoc with travel, maybe we should go ahead and buy another house....somewhere. Because they didn't have another apartment for us they let us out of our lease and we headed out to see what we could find.

We checked out Florida and Arizona and quickly scratched them off the list for various reasons. We headed to Henderson, NV (suburb of Vegas) and have looked and looked and looked - until I am ready to SCREAM! It is crazy out here and builders/developers are playing all kinds of games - only releasing two or three lots at a time, allowing people to bid lot premiums up, outrageous lot premiums period (think $30K - $160K for pretty much standard lots). Housing prices are escalating like crazy (new and resale homes) and they're trying to get $600K for a house that in normal times would be priced around $450K. Calls to sales agents don't even get returned because they are so busy with sales they don't care if they lose one. The one area we are really interested in is not releasing any more lots until mid-May and I can only imagine what prices will be like then. On top of that the sales woman was so snotty and snooty it pissed us off.

So....we're heading to Arizona for 7 weeks where we'll be staying at Sheraton Desert Oasis on Getaway weeks I scored when they were on sale. After that, we'll have to decide what we're doing. But right now, we've put the brakes on buying a new house period. We're thinking we're going to probably just get another apartment in Texas, go through our storage units again deciding on what we can get rid of, and just ride this crazy housing market out. It's going to settle out at some point and we'll be ready then. But, hopefully by then we'll be able to travel internationally which is what we wanted to do anyway.

Bottom line is things are just too crazy right now and we're not going to invest in a house that in a year will appraise for less than what we paid for it (most likely).

Our friends are moving to Texas and just sold their house. It is a fine house, but nothing special. No special view/landscaping/decor. A vanilla house. It was listed, sold within a few days, and just closed for 60k over asking. I can't even imagine. We would love to downsize but we can't move away - we have family to care for. So here we will sit. But goodness it is tempting. The only issue is finding another place to land and truly that is the issue.

 

[VacationForever]

We just sold our condo and closed on a single family home in January. If we had waited to sell now we could have gotten another $300k on the condo. Our agent got a buyer 4 days after we told her to sell our home and without a listing. The market had not moved up too much when we accepted the offer on our home in October. When we started looking for a home in November we saw signs of supply shortage. We made a full price offer on a home the day it hit the market. They had 5 offers on the same day and the selling agent picked another offer with the same price.

At the beginning of December, our agent just learned of a couple who were thinking of selling their home, but without listing it. She called us and we jumped on it and offered their full asking price. It is a beautiful home and we knew going in that we would need to spend another $100k or more to fix the swimming pool and the DIY leaking master shower, and remodel of 2 bathrooms.

We are glad we now own the home. For the past 3 months, MLS lstings in the community go straight into pending sale after a day or two with much inflated price. Our friend who lives down the street from us told us that she gets a ton of solicitation calls to sell her home. One of the agents asked her to name a price and she said $1.2m to get the agent off her back. The agent said done as he had a ready buyer! Before the run up, her house would have gone for about $650k. The majority of the buyers are from California. Definitely crazy.

 

[klpca]

We just sold our condo and closed on a single family home in January. If we had waited to sell now we could have gotten another $300k on the condo. Our agent got a buyer 4 days after we told her to sell our home and without a listing The market had not moved up too much when we accepted the offer on our home in October. When we started looking for a home in November we saw signs of supply shortage. We made a full price offer on a home the day it hit the market. They had 5 offers on the same day and the selling agent picked another offer with the same price.

At the beginning of December, our agent just learned of a couple who were thinking of selling their home, but without listing it. She called us and we jumped on it and offered their full asking price. It is a beautiful home and we knew going in that we would need to spend another $100k or more to fix the swimming pool and the DIY leaking master shower, and remodel of 2 bathrooms.

We are glad we now own the home. For the past 3 months, MLS lstings in the community go straight into pending sale after a day or two with much inflated price. Our friend who lives down the street from us told us that she gets a ton of solicitation calls to sell her home. One of the agents asked her to name a price and she said $1.2m to get the agent off her back. The agent said done as he had a ready buyer! Before the run up, her house would have gone for about $650k. The majority of the buyers are from California. Definitely crazy.

Because our vanilla houses are selling for ridiculous prices. It is breathtaking really.

 

[rapmarks]

My daughter bought a house in South Dakota in 2014 for $450 and was forced to sell in 2016 for $400
that house is back on the market, the new people haven’t done a thing, not even planted a bush, and it is $589. She wants to move back to that area, and I was hoping to find one with a mother in law set up. At that price for a smaller house , no way

 

[am1]

Just a matter of time for a crash. Hopefully people see it coming and are preparing.

 

[Sugarcubesea]

Just a matter of time for a crash. Hopefully people see it coming and are preparing.

How can you prepare for a housing crash?

 

[Gypsy65]

My wife is a manager for a real estate company and out of state buyers were putting in offers on several homes before ever setting foot in the State and getting them under contract
Then once in town they would pick the one they wanted and find a reason to cancel the rest

We also purchased a home for my wife’s dad about 10 years ago for $60,000 ( we did do some upgrades )
Realtor came and looked at it and feels around $300,000 would be a fast sale

The making $$$ on a sale only works though if you have a place to ride it out or change zip codes to a less demand area
otherwise the profits you made on your sale will be spent on the person selling you your next home for an increased sale price

 

[mdurette]

How can you prepare for a housing crash?

I would say if you own a house and don’t want to be upside down, don’t go pulling cash out via refinancing or heloc. Especially smart if you think you may need to sell in a few years.

I find it strange mortgage lenders haven‘t started to tighten equity requirements yet.

 

[Brett]

How can you prepare for a housing crash?

I guess by living in an inflated price house

 

[joestein]

So, our house went on the Market on Thursday. We had 54 parties come to the house through Sunday to tour the house.

So far, we have 2 offers. 1 at asking and 1 that is 4% over. We are hoping to get more offers later today or tomorrow. Then we will decide on Tuesday.

 

[Snazzylass]

I find it strange mortgage lenders haven‘t started to tighten equity requirements yet.

ehemmmm...can't speak for all lenders but the big ones shut down their HELOC departments a year ago along with significant reductions in programs available. The smart shops really got out in front of what is still expected to flush out. This will not be like 2008. Some lenders are approaching this completing differently.

 

[VacationForever]

We have not taken a mortgage in the previous 2 homes which we owned. With the home we just closed in January, we decided to take a mortgage to make use of the low interest rates. The bank was very thorough and intrusive and we almost decided that it was not worth the angst and just pay for our home in full and not take up a loan. What we are seeing in the run up in real estate prices feels very different from 2008.

 

[Snazzylass]

builders/developers are playing all kinds of games - only releasing two or three lots at a time,

uhmmmm...doubtful that anyone is playing games. On the other hand, the price of lumber has skyrocketed a 1000% over the last 6 mos or so, and then there is labor. Labor has been an issue since the previous collapse of the housing industry.

I would guess even if labor is not a problem, it makes sense to be careful about limiting the number of builds when the price of materials is uncertain. I've been around builders for 40 years. They are either rolling in the dough or bk. It's always been that kind of business. Worse, most builders have no idea where they stand on each house, ie if they are making a profit.

 

[TheTimeTraveler]

Right now certain building supplies are not only hard to find, but at substantially higher prices to buy if you're lucky enough to find them. This leads to delays in completion of projects.

With that said, Covid has brought out higher per square footage costs to build or remodel a home, and that is just one of many reasons that is currently causing housing prices to escalate. Add this to the fact that city folks now want to move out to the 'burbs and you have a perfect scenario for a supply/demand caused issues.

Supply/demand issues are definitely evident in housing prices all over the country. When will it end? Who knows. New history is being written......

Buckle up!


.

 

[bizaro86]

We are the process of helping my father in law downsize. His detached house sold at asking price (which was 15% more than I thought he'd get when we started the process a month ago) in 1 day.

But the senior living condo he bought had been on the market for nearly a year. Others in the same building sold for much more than he paid. I think its very likely the original (very ugly) carpet was an issue for buyers, and the discount he got will more than cover replacing the flooring (with enough to buy a new sedan left over).

I think part of the issue is the people selling a seniors condo are either usually moving into LTC or its the family of a deceased resident. In either case not a group that wants to do a reno before they sell. But buyers are also less likely to want to do a reno. So the premium for units that were already updated was very high.

The sale of my father in laws house fell through, as the buyers couldn't get their financing lined up. So it went back on the market. Multiple offers this time, now 10k above asking.

 

[mdurette]

ehemmmm...can't speak for all lenders but the big ones shut down their HELOC departments a year ago along with significant reductions in programs available. The smart shops really got out in front of what is still expected to flush out. This will not be like 2008. Some lenders are approaching this completing differently.

True....I have seen HELOCs tighten up this past year. But, I think some of it had to do with the insane amount of refinancing going on. Needing to slow down the HELOC business in order to handle the refi business and move personal around. The refi boom is starting the end.....will be interesting to see if these lenders open back up the HELOCs and at what loan to value.

 

[JanT]

There is certainly truth to what you have said, however, developers are playing games. KB announced that its housing gross profit margin excluding inventory-related charges increased to 21.1% in the first quarter, compared with 17.9% in the same quarter last year. Their stock is up 300% from its low during the pandemic. Developers aren't hurting and they are sticking it to people. Even our realtor friend admits it's what developers are doing. What they're doing is in direct correlation with what you said is true of the business - they roll in the dough or go bankrupt. They're raking it in now while they can and they're looking to score as much as they can. And if builders have no idea where they stand on each house in terms of profit they're not very good business people in my mind.

Bottom line is there are several things driving housing prices right now but eventually there's going to be a correction and for most people buying at the top of their particular market it may not end well. If people are comfortable with a 10-15% correction (my guess), then good on them. We're not going to get into that game.

uhmmmm...doubtful that anyone is playing games. On the other hand, the price of lumber has skyrocketed a 1000% over the last 6 mos or so, and then there is labor. Labor has been an issue since the previous collapse of the housing industry.

I would guess even if labor is not a problem, it makes sense to be careful about limiting the number of builds when the price of materials is uncertain. I've been around builders for 40 years. They are either rolling in the dough or bk. It's always been that kind of business. Worse, most builders have no idea where they stand on each house, ie if they are making a profit.

 

[DebBrown]

We're in the trying to downsize group. Unfortunately, we really don't like smaller homes and we have dogs so condos aren't going to work. For the last few months, I've been stripping wallpaper and repainting. We're in the midst of a sump pump installation. But maybe we should just get it listed. We have a lake house in Michigan that we can move to. We were planning a room addition there but the building costs have skyrocketed.

This is super stressful for me!

 

[Gypsy65]

We're in the trying to downsize group. Unfortunately, we really don't like smaller homes and we have dogs so condos aren't going to work. For the last few months, I've been stripping wallpaper and repainting. We're in the midst of a sump pump installation. But maybe we should just get it listed. We have a lake house in Michigan that we can move to. We were planning a room addition there but the building costs have skyrocketed.

This is super stressful for me!

I would talk to a realtor
With the madness I’m sure you can get above market and not update a thing

We were in the construction trades and in a slow market you need the granite tops while you neighbors identical home was Formica to sell
Now?
Not so much as the demand is still ridiculous

You obviously want to make as much as you can
But you also don’t want to miss this opportunity
If you can sell them ride it out you will buy low on the other side

 

[Snazzylass]

There is certainly truth to what you have said, however, developers are playing games. KB announced that its housing gross profit margin excluding inventory-related charges increased to 21.1% in the first quarter, compared with 17.9% in the same quarter last year. Their stock is up 300% from its low during the pandemic. Developers aren't hurting and they are sticking it to people. Even our realtor friend admits it's what developers are doing. What they're doing is in direct correlation with what you said is true of the business - they roll in the dough or go bankrupt. They're raking it in now while they can and they're looking to score as much as they can. And if builders have no idea where they stand on each house in terms of profit they're not very good business people in my mind.

Bottom line is there are several things driving housing prices right now but eventually there's going to be a correction and for most people buying at the top of their particular market it may not end well. If people are comfortable with a 10-15% correction (my guess), then good on them. We're not going to get into that game.

It's a feast or famine business. Got to make hay while the sun is shining.

The thing is, right now there are buyers lining up! If you don't want to be in the market right now, that's your choice. However, as long as buyers are lining up, expect the current conditions to continue. It's not a game. It's an opportunity. Things will change when demand dwindles.

 

[Snazzylass]

True....I have seen HELOCs tighten up this past year. But, I think some of it had to do with the insane amount of refinancing going on. Needing to slow down the HELOC business in order to handle the refi business and move personal around. The refi boom is starting the end.....will be interesting to see if these lenders open back up the HELOCs and at what loan to value.

HELOC's will return - when it makes sense. Maybe 2022 at the soonest? Right now, for most folks, they are better off doing a cash out refi. That will change when they have their 1st at a rock bottom rate which they would not want to disturb, but still want to tap into their equity.

 

[MULTIZ321]

Home prices are climbing alright, but not for the reason you might think.

Home prices are climbing alright, but not for the reason you might think

We've plenty of homes. Rents have barely moved for half a decade

theconversation.com

.


Richard

 

[joestein]

Home prices are climbing alright, but not for the reason you might think.

Home prices are climbing alright, but not for the reason you might think

We've plenty of homes. Rents have barely moved for half a decade

theconversation.com

.


Richard

Your article is about home prices in Australia and is centered around the tax policy of Australia. Really not applicable to this conversation.

 

[joestein]

So, our house went on the Market on Thursday. We had 54 parties come to the house through Sunday to tour the house.

So far, we have 2 offers. 1 at asking and 1 that is 4% over. We are hoping to get more offers later today or tomorrow. Then we will decide on Tuesday.

An update... We ended Monday with 4 offers. The one we accepted - waived the appraisal and will limit the inspection to structural. It was also 8% over asking.