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Old 05-03-2021, 09:23 AM   #241
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The supply of homes has been low for a number of years. This past year, the price of building materials shot up like crazy, so I don't think builders are making up for the lack of inventory anytime soon.

I don't think it's so much existing buyers playing musical chairs, as it is the demand is growing with new buyers coming online with historically low interest rates and no homes for them to buy. Because this has been going on so long, it is not likely to be resolved quickly. As long as the economy keeps clicking along, I'd expect that rising interest rates will slow rising prices before inventory adjustments do.
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Old 05-03-2021, 09:56 AM   #242
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Originally Posted by Ed Waggoner View Post
Hello Mr. Tightwad, whats your thoughts moving forward on selling or keeping SFH rentals with the thought of the 43.8% capital gains taxes Biden is proposing, that would most likely bring down property values. I own 40 paid off houses in Richmond VA that my wife and I self manage.I'm 57, wife is 55. We have a good network of handyman to take care of all issues, as well as a great lawyer and low vacancy rates. We just sold two houses to put a few 100k in the bank just incase.Thanks in advance. Ed
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Old 05-03-2021, 11:44 AM   #243
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Isn't this a game of musical chairs, eventually bay area prices should flatten out somewhat

Its good for us with our home and rentals in the area. But itís heartbreaking seeing young growing families that we know in our local area priced out of the market.
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Old 05-04-2021, 06:27 PM   #244
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Been a RE investor for 30 years ....

First 5 properties (late 80's) ... lost money ... wrote checks at closings.

Next 13 properties where purchased at RTC (Resolution Trust Corp) auctions (mid 90's)

Dumped a bunch in 2005-2006 ... made a killing (FIRE'd).

Tried a flip 2010-2012 .... made peanuts.

Still carrying an RTC purchase ... paid 15k for ... realtor says 250k "minimum".

Yes ... it's a bubble. Enjoy the ride!
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Old 05-04-2021, 06:54 PM   #245
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I feel like I've seen this movie before. Not just regarding housing, but also raw land, stocks, commodities, trading cards, tulips, etc. etc. As human beings willingly decide to pay staggeringly higher and higher prices for something, we get peppered with explanations and rationalizations as to how things are "different this time" and we are in a "new paradigm".

The assets and the facts may indeed be different each time, but the human emotions driving and yes compelling people to sign the contracts are the same - fear, pride, greed, envy. Perhaps no asset stirs the emotions more than residential real estate. When you have a market that is comprised of bidding wars with many losers and only one winner per house, the impact on the losers' mentality going into the next "auction" is significant. Contracts get signed at price levels that probably seem crazy to the purchaser, yet they sign anyway.

I have no idea if it's really "different this time", if we we really are in a "new paradigm'". But I am hearing the explanations about why it is, just like every bubble de jour in the past. If I had to bet, I'd say this is just another sequel to the prior Bubble movies, and the ending is going to be pretty similar. Thankfully, I don't have to bet and can just watch this thing with a beer in my hand and my feet up.
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Old 05-04-2021, 07:43 PM   #246
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Yellen's remark on the "i" word, interest rates, in an interview recorded yesterday and broadcast today had an effect on today's stock market. Will it have an effect on consumer demand for single family homes? I don't see that happening.
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Old 05-04-2021, 11:51 PM   #247
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Not all cities and towns in the US see a big housing price increase. The following article lists 50 cities where the average home price stagnates, or even drops as much as 9% in the last 12 months. Among the list are Jackson, MS, San Mateo, CA, Laredo, TX, and even San Francisco and Chicago.

https://www.msn.com/en-us/money/real...ly/ss-BB1agCW5
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Old 05-05-2021, 09:16 AM   #248
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Not all cities and towns in the US see a big housing price increase. The following article lists 50 cities where the average home price stagnates, or even drops as much as 9% in the last 12 months. Among the list are Jackson, MS, San Mateo, CA, Laredo, TX, and even San Francisco and Chicago.

https://www.msn.com/en-us/money/real...ly/ss-BB1agCW5
I'm not sure where they get the data from, but I'm not buying their numbers. I'm from San Mateo and currently live in the East Bay. San Mateo has not dropped by 6% over the last two years. Even if the drop was accurate, the neighboring cities (Burlingame, Belmont) would have dropped too. However, they are no even on the list. Totally bogus.
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Old 05-05-2021, 09:19 AM   #249
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This article is a click-bait with old data. I saw reference to 2019 in one of the city. I stopped reading at that point.
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Old 05-05-2021, 06:11 PM   #250
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Not all cities and towns in the US see a big housing price increase. The following article lists 50 cities where the average home price stagnates, or even drops as much as 9% in the last 12 months. Among the list are Jackson, MS, San Mateo, CA, Laredo, TX, and even San Francisco and Chicago.

https://www.msn.com/en-us/money/real...ly/ss-BB1agCW5
I don't know about the city of Chicago itself, but out here in the distant suburbs, prices are zooming. We've lived in this neighborhood for 40 years and houses here have appreciated more in the last year than in the previous couple of decades.
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Old 05-05-2021, 06:57 PM   #251
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Itís insanity! If this continues normal people who donít already own will be priced out of any house. How is that even possible?

I hope this madness ends because Iím sure there are some sad renters out there.

We just sold (full ask in 2 daysÖand asking 30% more than we paid 3 years ago) and one canít help but feel the pressure to buy before things go up another 10-30% in the next few months. We wanted to move geographic areas for personal reasons.

Irrational FOMO at its worse.
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Old 05-05-2021, 08:19 PM   #252
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Itís insanity! If this continues normal people who donít already own will be priced out of any house. How is that even possible?

I hope this madness ends because Iím sure there are some sad renters out there.

We just sold (full ask in 2 daysÖand asking 30% more than we paid 3 years ago) and one canít help but feel the pressure to buy before things go up another 10-30% in the next few months. We wanted to move geographic areas for personal reasons.

Irrational FOMO at its worse.
Absolutely insane. I listed one last Friday for 298K that I paid 87K for in 2012. By Sunday we had 15 offers, all but one over asking price. I chose the highest cash offer of 355K. Never in my wildest dreams did I think it would be selling for so much let alone 57k over asking.

I literally sold a larger house right across the street from this one that had more updates in Feb/2020. That was at the start of Covid when less people were buying. That one sold for 222K and took longer to sell.

Prices had been rising but not like they have over this past year. This is Florida and it is crazy.

And to think I offered the one I just sold to the tenants who were there in October for 235K. I feel very lucky they said no because they didnít think it was big enough to buy. Almost made a 120K mistake.
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Old 05-05-2021, 08:25 PM   #253
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This isn't going to end well but I am unsure how to profit off of it.

It isn't like March 2020 when you could predict somewhat that COVID was going to spread around the world and cause problems.

How do you buy a put on the housing market?
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Old 05-05-2021, 08:48 PM   #254
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This isn't going to end well but I am unsure how to profit off of it.

It isn't like March 2020 when you could predict somewhat that COVID was going to spread around the world and cause problems.

How do you buy a put on the housing market?
Buy residential construction-related stocks. Building materials, logistics, transportation, home systems.

When won't it end well? What will be the reason it doesn't end well? What is "it"?
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Old 05-05-2021, 10:46 PM   #255
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Itís insanity! If this continues normal people who donít already own will be priced out of any house. How is that even possible?

I hope this madness ends because Iím sure there are some sad renters out there.
+1

It's heartbreaking for so many.

Frank and I are lucky, in that we have no reason to move and plan to stay in our homes as long as possible. But wow, my heart goes out to those who need to move, whether for family reasons, work reasons, downsizing for retirement, and so on. Most of us have "been there done that" and know how difficult life can be.
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Old 05-06-2021, 05:52 AM   #256
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+1

It's heartbreaking for so many.

Frank and I are lucky, in that we have no reason to move and plan to stay in our homes as long as possible. But wow, my heart goes out to those who need to move, whether for family reasons, work reasons, downsizing for retirement, and so on. Most of us have "been there done that" and know how difficult life can be.
Well if you have a house to sell at top dollar you can buy another one at top dollar, even if downsizing. The ones it hurts the most are first time buyers and renters. I believe one of the contributing factors is the poorly thought out illegal eviction moratorium is a contributing factor.

I am fortunate to have a lot of homes to sell. For those I might keep I can no longer keep them at rents so far below current market value because the costs of everything has greatly increased (taxes, insurance, and all labor and materials cost for maintenance). So I plan to get out while the getting out is good. Having the government take away my rights to my property for over a year was just too much. And now my very good tenants will all be affected one way or the other. Then again the government never considers long term consequences. It absolutely pains me.
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Old 05-06-2021, 08:55 AM   #257
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Don't forget that a lot of people are on mortgage forbearance at this time. They have been granted a reprieve from paying for the past year or so. At some point banks are going to demand payments, so these people will have to sell their homes or foreclose if they can't resume payments.
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Old 05-06-2021, 09:16 AM   #258
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Don't forget that a lot of people are on mortgage forbearance at this time. They have been granted a reprieve from paying for the past year or so. At some point banks are going to demand payments, so these people will have to sell their homes or foreclose if they can't resume payments.
Well of course. Banks are not free housing providers nor are landlords. But our system has turned them into that. And those owners and tenants who refuse to pay may have been housed for free for a year but will have more difficulties in the future renting or getting credit again. As it should be.

If the government really wanted to help them they would have made sure their landlords and banks werenít screwed over by their policies.
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Old 05-06-2021, 09:22 AM   #259
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Well of course. Banks are not free housing providers nor are landlords. But our system has turned them into that. And those owners and tenants who refuse to pay may have been housed for free for a year but will have more difficulties in the future renting or getting credit again. As it should be.

If the government really wanted to help them they would have made sure their landlords and banks werenít screwed over by their policies.

Agree completely. Gov't artificial interference in a market. But then when a large percentage of the population has their hand out and not contributing, it provides an opportunity for exploitation.
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Old 05-06-2021, 09:28 AM   #260
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Agree completely. Gov't artificial interference in a market. But then when a large percentage of the population has their hand out and not contributing, it provides an opportunity for exploitation.

My point exactly. How sustainable is this? People not paying mortgages/rent and living for free?
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