Home prices getting interesting, what price are homes in your neighborhood?

[ShokWaveRider]

BUT, if one sells, where does one go? Without cutting one's QOL that is.

[isisdave]

Three years ago, our only child, working for Lowe's in SoCal, quickly figured he'd never be able to buy a house there. So he got a transfer to Evansville IN. Same salary, housing prices about 70% less, and in less than a year he had his starter house.

We figured we'd follow when we got "old" but Covid and the RE bubble convinced us to pull the trigger early. Sold the 3100-sf mostly empty place (bought 1994 $218k) for nearly $700k, moved to Evansville, rented an apartment for six months to make sure we could tolerate the summer weather, and then bought a perfectly nice one-story, 2000-sf place with losts of renovations for $199k. We haven't seen a tax bill yet, but last year's was $1350 and we're expecting under $2000.

Evansville is a city of 116k but -- I think this is important -- it's a 2-hour drive from any other city that large or larger. That means all the major store chains are here, there are two humongous healthcare systems and lots of chain and local restaurants, some of them surprisingly good. The city library has eight branches (vs one in SoCal for same population), etc. There are theater companies and a small but decent orchestra. (There are two universities here.) Gas is currently 3.10.

Or you can live "in the county" -- ten minutes from the city -- and get the same house on two acres with a pole barn and maybe a tractor thrown in, for a little less money. If that's not modest enough, drive across that they call the "Money-Saving Bridge" into Kentucky, and for the price of a 10-minute drive you can get a further 15% of the cost of almost everything.

Indiana is not California nor Florida, and there is a little cultural adjustment to be made, but nothing you haven't done when traveling to other countries for vacation. It helps if you don't have strong political views either way. The public schools are generally not as good, but you're retired. Spring and fall are nice, summer is kinda steamy and the lows might be 72. Winter is milder than the Northeast, where I have had some experience. The drivers are no crazier than SoCal (except that EVERYONE runs red lights, and it's expected), and the roads are way emptier and in much better condition.

We actually came for the family connection, not the prices, and I'm not pitching this particular town for you, but there are lots of Evansvilles in the US. They do tend to be in the midwest and states like OH and PA, the weather is not "coastal" and it's kinda flat here, but if you're flexible and want a less-expensive retirement, you can find one you like. Find one of those "America by night from space" photos and look for a good-size bright spot surrounded by some darkness. Visit in the summer and go to an actual pie-eating contest at the county fair.

[Out of Steam]

Quote:

Originally Posted by Gumby I'm not convinced that Zillow is correct on an absolute basis, but if I assume that their methodology is at least consistent over time, then my house value has gone up by about 20% in two years.

The Zillow value for our house is wildly low; less than our 2019 purchase price. Realtor.com and our county assessment are close together, between 15 and 20% above our 2019 price.

[Aerides]

Zillow, for my area is outdated BS. I think the algorithm they use runs an average that has a look-back for at least 18 months, if not longer.

So my pre-pandemic price was about $430 - which was stable and aligned with then-current home prices.

Today Zillow has me at about $550, which would be a joke of a giveaway vs. current comps of the past 90 days - avg around $700, and mostly homes that have a lot more need of upgrades. If I listed today, I'd ask $780.

Not gated...not sure what relevance that had in the original question. The gated community next door isn't comparable, as their homes require a massive country club equity payment and annual membership dues.

[Dtail]

Quote:

Originally Posted by ShokWaveRider BUT, if one sells, where does one go? Without cutting one's QOL that is.

SWR - you mentioned in the past about downsizing. That may be the route you take, while still moving to the same or comparable neighborhood.

[ShokWaveRider]

Our Zillow estimate is 20% too low. I got 4 pieces of mail offering to buy our home today. I am sure they are based on the Zillow prices, hoping that the homeowner will use them too.

[ShokWaveRider]

Quote:

Originally Posted by Dtail SWR - you mentioned in the past about downsizing. That may be the route you take, while still moving to the same or comparable neighborhood.

Agreed, if only it were that easy. Saving 10% to downsize is not really an option, that is basically or almost what it cost to sell & buy again at the end of the day.

[Dtail]

Quote:

Originally Posted by ShokWaveRider Agreed, if only it were that easy. Saving 10% to downsize is not really an option, that is basically or almost what it cost to sell & buy again at the end of the day.

True. Tough spot for you with a coastal desire, desire to keep excellent medical options, political leaning ruling out much of FLA, etc.

[Montecfo]

Quote:

Originally Posted by travelover Why are home prices up so much? Covid? Interest rates? Stock market?

Classic supply-demand mismatch.

Low supply due to depressed building since financial crisis, new housing construction shut down or delayed during covid, people who wish not to show their homes due to pandemic.

Increased demand due to housing formation deferred since financial crisis, greater ability to work from home, people spending freed up commuting funds on larger homes in the burbs and fleeing cities, pandemic changing people's mindset about housing. Low interest rates drive affordability...

For now at least.

[pacergal]

Homes in our direct neighborhood are selling for $650,000-800,000.
Homes w/i 3 miles can be similar or in the multi-millions. Depends on the view, water, mountains, etc.
We live in a simple 1700 sq ft 1960's Ranch, on a good sized lot, as are most on this street. But there are many McMansions and even larger homes within the city.
So far, our little neighborhood has managed to have homes remodeled and sold, rather than torn down and rebuilt into larger homes, or frequently 2 homes on the lot due to the lot size.

[clifp]

On the accuracy of Zillow.
I'm getting mortgages on three rental properties in Vegas before rates go up (2.875 15 year, rental rates are 50-100 basis higher than owner-occupied.)

All properties are in working to middle class neighborhoods, three different appraisers
House 1 Zillow estimate $357,600 Appraiser 357.000
House 2 Zillow 320,000 Appraiser $302,000
House 3. Zillow 320,000 Appraiser $315,000

So Zillow was a bit high, but overall was awfully close, an average of 2.3%

Back in May, I refinanced my Honolulu house Zilliow had it at 1.4M, but the appraiser said it was only worth $1.2M Zillow says it closer to $1.5 million now.

[schenbew]

Quote:

Originally Posted by travelover Why are home prices up so much? Covid? Interest rates? Stock market?

Blogger Bill McBride has done some great analysis on this. Bottom-line: increasing household formation. Here's his post from Sep 2021 on the subject:


https://calculatedrisk.substack.com/...drives-housing


If you're interested in real estate, the Calculated Risk blog is a phenomenal resource to follow.

[Bamaman]

Quote:

Originally Posted by travelover Why are home prices up so much? Covid? Interest rates? Stock market?

Maybe the millennials are getting tired of living in their parents' basements. It's the young adults that are mostly driving the retail market.

Rentals have gone up in price to where in many places it's just as cheap to live in an entry level home.

There is also a migration going on in this country with people moving to different cities and states. Our local job economy is so hot with 2000 incoming FBI employees, 4000 Mazda-Toyota employees and 500 engineers designing a new generation missile system.

With the current interest rates, anyone that's going to buy needs to do it now. And too many "nows" at one time have driven demand to an all time high.

I would be hesitant to build a new home today. Increasing labor costs and the unavailability of many building supplies have also driven the building costs much higher. We've seen $250-$450K homes not to be a great value. But if you step up to the $600-800K existing homes, you'll be in 5,000+ square feet in a relative bargain.

[daylatedollarshort]

Home price are up by $1M+ in our neighborhood since we retired (Bay Area suburbs) due to in part to the work at home movement. Families are moving out of the city but many are just moving to the suburbs.

With Prop 13 it makes more sense to rent than sell. We've thought about downsizing and renting out the house, but since everything is up here there is really no place cheaper to move to without moving outside the Bay Area. Smaller homes are even more expensive per square foot, presumably because they are more affordable and have a larger number of potential buyers. We really like the weather, parks, theater scene and all the things to do here. It has been a great place to be retired, so we'll probably just stay put for now. It can actually be pretty inexpensive to live here if you don't have to pay a lot for housing or property taxes.

[ExFlyBoy5]

Quote:

Originally Posted by Bamaman Maybe the millennials are getting tired of living in their parents' basements. It's the young adults that are mostly driving the retail market.

You do know that the "millennials" you speak of are getting close to 40 years old (or 30s for those born in the later years) and make up over 40% of the workforce, right?

[Slater]

same here in san diego....
my gal brought to my attention today the house that I sold about 5 years ago for $450k is valued @ $770k...

[cyber888]

Here in NC - A single-detached Townhouse 4br in my subdivision was selling for $370K in 2021. Yesterday, Feb. 8, 2022, exactly the same model and size, had a pending offer for $460K .. that's a $90K upside for exactly the same home. The developer is raking in money. My custom-made house was around $380K-$390K in Zillows pre-pandemic, and last year (2021) my neighbor's house (comparable to mine) sold for $535K. Today, I'm seeing a house in a neighboring subdivision selling at $699K and some at just a tad below $600K. I suppose custom-made homes in my area is moving to the $600 range.

[latexman]

Around here, $230/sq. ft.

[Surewhitey]

Had to go 5 miles out as there's nothing, not pending. Our 50's "low rent district" neighborhood is $400m to $1.2mm when there is something. On average $350-400/sq ft. On the "other side of the lake" I've seen as high as $18mm, but many $1-3mm

Zillow is pretty accurate for our home...

[laurence]

Quote:

Originally Posted by ExFlyBoy5 You do know that the "millennials" you speak of are getting close to 40 years old (or 30s for those born in the later years) and make up over 40% of the workforce, right?

I have a cranky buddy who complains about millennials and I'm like, "Dude, you are 43" Lol.