This insane housing market.

[Lilias]

We moved in late 2018 (I think the housing market started getting crazy late 2019/early 2020?) and got a crazy deal on our house because it had been on the market for over a year. It's a big house that was out of our price range, but they were desperate to sell it (the land it's on is kind of hazardous to children, but we're dinks, so didn't matter to us lol). We already paid much less than the appraisal, and now the zestimate (I know it's not that accurate, but it's fun to look) is like 100k over that! Our neighbors aren't the greatest, but we just deal with it because there's no way we'd be able to get another house right now. Or...ever? I feel like the market's been nuts like this for 2-3 years now with no signs of stopping. I have no idea how people are just...affording this. Or getting bank approvals with such a discrepancy in appraisal value (though, after what I went through selling my first house, I think that whole system might be full of lies anyway...)

One of our friends searched for a house for a year and settled for a fixer upper that would've been like 150k four years ago and they paid 270! And another friend managed to get a house no problem in 2020, it was a nice house but it didn't have a garage, so I guess there wasn't a bidding war on it for that reason? They had been so discouraged because they couldn't afford to pay twice what a house was worth (which was happening with other houses they'd put offers on), but they happened to be the first offer on their now-house and the sellers must not have known about the market because they accepted it when it was just like $1000 over asking, lol.

 

[Miffy]

I bought in 2007 so I felt the crunch of 2008. I think a lot of people panicked unnecessarily. Don't get me wrong, I didn't like paying a mortgage on a home that lost 30%-40% of it's value, but unless I sold I didn't actually lose that 30%. I just knew I needed to stay in it until it came back which it did long before the current housing inflation.

Yes, that's a good point. I think it's more important if you get a mortgage you can afford

Houses in my area (outside DC) have always been way higher than the national average, but now it’s insane. A house on my parents street just sold for over $600,000. This is for a typical suburban 1800 sq foot, 4 bedroom, 2 car garage house. 2 or 3 years ago it wouldve sold for 350-400,000, which is crazy too. A house like this in other states used to be about 200-250,000

That house would cost way more if it were in SoCal. There's pretty much nothing in the L.A. area for under $1 million, and that's probably a low estimate.

 

[LYSE]

We bought our place for 450 a year ago and put 100k into it, it's now worth maybe 600

We bought our Tesla less than a year ago and put 18k miles on it...and now we have a wholesale value of 10k more than I paid.(offer in hand)

I'm more impressed with the used car prices than I am with the housing market

 

[DLgal]

Yes, that's a good point. I think it's more important if you get a mortgage you can afford

That house would cost way more if it were in SoCal. There's pretty much nothing in the L.A. area for under $1 million, and that's probably a low estimate.

Right? I'm over here in So Cal like "I would buy a $600k, 1800sq ft 4 bedroom house YESTERDAY. Sign me up!"

 

[DLgal]

We bought our place for 450 a year ago and put 100k into it, it's now worth maybe 600

We bought our Tesla less than a year ago and put 18k miles on it...and now we have a wholesale value of 10k more than I paid.(offer in hand)

I'm more impressed with the used car prices than I am with the housing market

LOL. So true! My husband's 2017 Civic with 75k miles is worth almost $23,000. Like, what? That's almost what we paid for it 5 years ago!

Even my 15 year old CR-V is worth about $8500. It's just crazy.

 

[RogueX]

When my little 816 sq. foot house was bought in 2008, we paid $199k. Today it's estimated value is around $430k. Whenever my husband talks about buying something larger, I point out that I'd like to actually have something in savings from when we're older.

 

[Skippy918]

LOL. So true! My husband's 2017 Civic with 75k miles is worth almost $23,000. Like, what? That's almost what we paid for it 5 years ago!

Even my 15 year old CR-V is worth about $8500. It's just crazy.

My civic is worth more than I paid for it too! Mine is a 2016. I’ve only got about 33k miles on it.

 

[nene0182]

I am so thankful my parents moved to FL when they retired in 2014 and were able to buy a new home in a retirement community for well under $200k

Same here. My parents moved to FL in 2014 as well and bought a brand new house for about $175k which was the same price they sold their house for here. The same model is now selling for over $300k there while prices here have increased but not that much. Since my mom passed away in 2020, I’m so grateful they were able to pay cash for their house and my dad doesn’t have the burden of a mortgage on top of everything else. They had planned on waiting to move until my son graduated HS in 2021 so who knows what would have happened if they did.

 

[disneyseniors]

Do you have any crazy stories to share about the current housing market in your area?

Thankfully, I am not in the market for a new home and am just watching this insanity from the sidelines, but I feel badly for anyone who’s trying to buy right now. Inventory is so tight, competition is so tough, and the houses in my neighborhood are selling upwards of 50% more than we paid for our house just under two years ago.

This past Saturday I noticed an unusually high number of cars kept driving past my house. I made a comment to my husband about the “heavy traffic” which is funny because we live on a cul de sac street and there really shouldn’t be any traffic at all. Turns out, a house on the street went up for sale and mobs of people were coming to see it. It was not an open house, yet there was a line of cars parked on the street and people lining up on the sidewalk to see it all day Saturday and Sunday. This house had the highest asking price ever for my neighborhood and they stopped taking offers after 48 hours, so I’m pretty sure they got what they were asking for if not more.

Reading through a Nextdoor thread this week I saw the following:

• A man who said he’d successfully bought a home a few months ago against 20 other offers by offering 10% more than asking without ever seeing the house in person. A realtor responded to him saying he was lucky, that 10% above asking won’t get you into a house anymore.
• A woman who sold her house in a nearby gated country club ($$$$) a year ago, has submitted “all way above asking” offers on 13 homes since then and has been rejected every time. (I was surprised to see things are so competitive for the high-end inventory like it is for the rest of us unwashed masses.)
• The realtor who said she just took her client to see a house that had more than 100 offers on it.
• The woman who just listed her home and said most of the “well-above asking” offers she’s received are from buyers who haven’t even seen the house.
• The realtor who said asking prices are more or less moot at this point, the only thing that matters is how high the buyer is willing to go.

I mentioned on another thread a few weeks ago that I’d seen a realtor say the only people who were getting into houses were cash buyers and that she’d been advising her clients, if they couldn’t make a cash offer themselves, to have a (wealthier) family member buy the house for them in cash and then turn around and sell it directly to the client with a mortgage.

What a crazy time. I’m in the North Atlanta area. How are things in your area?

It is a crazy world right now, OP.
A house next door to ours was sold in 2 weeks sight unseen by people in Missouri! They told us this when we met them.
We live in the lake country of N. Mn. and there is not alot around here except lakes and forest! We are not a major hub or a major destination, but we have been having a housing growth in the past 2 years. Everywhere you go there are new houses, condos, and apartments!
I asked our telephone man who was at our house fixing the phone line about all the new building. He would know because he puts the lines in for all the residences in our area. He said that they were mainly from California, Colorado, and Texas. We are about as far from Texas as you can get, same with California. I don't know why our little community is so popular now? We had oil line workers for the past 2 years so maybe they liked it and moved? I don't know.. Our area is mainly a summer destination for vacations. Some people are retiring from the Twin Cities to live up here. But it's not for everyone. I wonder how the Texans and CAlifornians are tolerating our bitter winter this year. It is one for the record books, brrr.
Anyway, that's what's happening here in NoWhere, Mn., LOL
My brother lives 30 miles West of Nashville, and he said the housing situation is crazy right now. Alot of people are moving to his area with a 30 minute drive to Nashville, or longer. I-40 is a nightmare with semi's and traffic so I bet that drive is over an hour now. Crazy!

 

[Mackenzie Click-Mickelson]

We had our house built when it was buyer's market in 2014 but 6 months into it the market was starting to shift and within a year it was a seller's market and has been ever since.

I just checked and a house for sale (completed in 2020 not lived in yet) across the street and 2 houses down is on the market for $667K reflecting a price increase as of 1/10. The house was first placed on the market at the very end of December 2020 at $537K and they've just raised the price more and more over time. That is completely and utterly crazy that in 13 months on the market the home has gone up in price by $130K. That also by the way is pushing close to $300K (at the present selling price) more than our house was completed for in 2014 which is more reflective of the pricing of our neighborhood that has just kept going up in average costs. Present marketing sign at the entrance to the neighborhood lists high $500k-$900K+ and we know homes have sold for $1.2-$1.4 million.

Another new home that just sold on the street is $633K (also completed in 2020 and never been lived in yet). That house was put on the market when it was in still under construction (as is common) in August 2020 at $520K and every price change since has been an increase. I don't know what the final selling price was but they last did a price increase to the $633K in September 2021. This represents an increase in costs over a 13 month time period of $113K.

We've got 2-3 homes (hard to tell if the last lot is actually being built right now) and I shudder to think what those selling prices will end up being.

 

[DLgal]

Same here. My parents moved to FL in 2014 as well and bought a brand new house for about $175k which was the same price they sold their house for here. The same model is now selling for over $300k there while prices here have increased but not that much. Since my mom passed away in 2020, I’m so grateful they were able to pay cash for their house and my dad doesn’t have the burden of a mortgage on top of everything else. They had planned on waiting to move until my son graduated HS in 2021 so who knows what would have happened if they did.

Yeah, my parents paid around $160k, but they put $60k down and financed the $100k. They have been able to refinance several times now, most recently last October which was a HUGE decrease in their interest payment and saved them like $300/month.

Their house is also worth about $300k now. I guess it's good news for us kids too...it will be worth more than they owe when they pass away, so that's nice, I guess.

 

[DisneyHardin]

Same here. My parents moved to FL in 2014 as well and bought a brand new house for about $175k which was the same price they sold their house for here. The same model is now selling for over $300k there while prices here have increased but not that much. Since my mom passed away in 2020, I’m so grateful they were able to pay cash for their house and my dad doesn’t have the burden of a mortgage on top of everything else. They had planned on waiting to move until my son graduated HS in 2021 so who knows what would have happened if they did.

My aunt and uncle retired to Florida about 10 or 12 years ago and now have decided to move back to Kentucky. They were originally going to keep their house in The Villages for when they wanted to go to Florida, but decided to sell it because they could make a killing on it. They said once the bubble bursts, they will just buy another Florida house if they find that they miss it.

 

[GreatLakes]

People are so easily influenced. Look at all of the rubes buying into the bitcoin scam. They even bid up Dogecoin which was invented as a complete joke.

You are right. If people can be convinced to eat Tide Pods they can be convinced of anything.

 

[WAstateDVCDaddy]

We had a strict rule when buying our house - the mortgage couldn’t be higher than we could afford on my salary alone. We could have qualified for a mortgage 40-50% higher, but even though I’d love to have a nicer house, we can make improvements to ours to make it a good Home.

It’s a good thing we stuck to our guns when we bought. My wife’s work scaled back, and then we had our daughter, so only part time consulting for my DW now.

while I feel bad for uneducated people who didn’t understand the possible impacts of their ARM’s, I have much (much) less compassion for people who buy more home than they can afford, and who know that they’re just hanging on by a thread. Or the people who are over leveraged so they could by multiple homes, to take advantage of the high rents or flipping value. Know your chances of failure going in, and then accept the losses if it happens. And build your finances around safety for your family, not around how you’re going to get rich, or FOMO. As a society I think we’ve lost our sense of personal responsibility in so many respects.

My nephew and his girlfriend just bought a house. He was in community college 5 years ago, and working a regular retail job 2 years ago. They paid $800k. It’s a bit of a fixer upper, but definitely not what I’d call a starter home. Now I know they can always turn to Mom and Dad (on either side) if something goes wrong, but personally I would never recommend something like that for my first home.

I’m sure they’ll get it fixed up, and it’ll be a great investment, but the whole situation is way outside my personal risk profile.

 

[disneyseniors]

One of the downsides of this craziness is the lack of affordable housing for newlyweds and young couples'
My grandson and wife are expecting their first baby and are looking for a house. As of right now, there is nothing they can afford. It's just crazy. I don't know if they will find a house even close to his work. Hopefully, this bubble will burst and people can find adequate housing.
My grandson is a firefighter, so he has to live close to the fire house.

 

[Lilias]

My civic is worth more than I paid for it too! Mine is a 2016. I’ve only got about 33k miles on it.

We traded in my husband's 2018 Civic last summer after the AC broke (watch out if that happens to you! The AC condensers on civics are so bad that there's actually an extended warranty from Honda to fix them. I'm glad I spent hours researching it or else we would've been out $1000+ replacing it. I'm not sure what year the warranty starts, though). Even though it was replaced with a warranty, it was just replaced with the exact same condenser that Honda knows is bad, so our AC could just die at any time randomly! We go on a lot of roadtrips! So, we traded it in for another car and I was shocked at the trade-in value! We got basically what we paid for it, and it had like 60k miles on it! :O

 

[Mango7100]

The house 2 doors down just sold around Thanksgiving for 250k more than what the people bought it for 3 years ago with no up grades (but it didn’t need any). it sold in 2 days and the first day when the realtors could see it there were cars lined up and down the street. Our house is now valued at 300k more than what we paid 12 years ago—we are one of the cheaper, smaller homes in the subdivision at 3400 sq ft. Its so tempting to put it up for sale, but then we would have to find something else and pay crazy for it. And we would have to pack…

 

[Skippy918]

We traded in my husband's 2018 Civic last summer after the AC broke (watch out if that happens to you! The AC condensers on civics are so bad that there's actually an extended warranty from Honda to fix them. I'm glad I spent hours researching it or else we would've been out $1000+ replacing it. I'm not sure what year the warranty starts, though). Even though it was replaced with a warranty, it was just replaced with the exact same condenser that Honda knows is bad, so our AC could just die at any time randomly! We go on a lot of roadtrips! So, we traded it in for another car and I was shocked at the trade-in value! We got basically what we paid for it, and it had like 60k miles on it! :O

The a/c issue is news to me.

 

[AvidDisReader]

It is important to understand why we are in the position - supply and demand are not in sync. From 1992 to 2007 there were never less than a million new 1 unit new construction, there were 9 years of over 1.2 mill units. With the mortgage melt down, the country did not hit a million new units until 2021 with several years less than half a million units. The big change is in buyers, Millennials stayed out of the mortgage market until just recently. Now you have this generation jumping in. Low supply with heighten demand and you have the super heated mortgage market. As for another bubble, thanks to the Frank - Dodd bill the exotic/toxic mortgage products no longer exist. The penalties for bait and switch were strengthened (meaning now a Federal violation with real jail time) makes it not worth the risk for most in the mortgage sales end. So it is not nearly as likely to happened.

 

[MillauFr]

It is important to understand why we are in the position

In Seattle it is because tech companies have hired tens of thousands of people and are paying them very high salaries. Plus there is no large plots of land to build new houses within a hour of downtown Seattle where most of the new jobs are.

The federal reserve running the printing press 24/7 also has contributed.