Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-14-2021, 07:53 PM   #381
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 3,152
Quote:
Originally Posted by SecondCor521 View Post
OK.

But would you rebuild on the same lot or a different one? And if a different one, would you sell your current lot?
I'm sorry, I don't follow your point.

This is the land of Prop 13. I can't sell the lot and retain my base year property tax value. Plus there would be a huge capital gains tax on the sum of the sale price plus insurance proceeds, as I rolled over the basis of the prior primary residence into this one.

My point is that it would be very difficult to replace the structure on the existing lot for what the insurance would pay, even if I could find a contractor.

Market value is based on the principle of substitution. Replacement cost is a method of measuring value, but only if you can replace by building new. While there is a confluence of constraints in the Bay Area that drive prices here into orbit, some of the same factors are now in play in other markets, including shortages of land, materials, and labor.
Another Reader is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-14-2021, 09:49 PM   #382
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 3,138
Quote:
Originally Posted by Another Reader View Post
I'm sorry, I don't follow your point.

This is the land of Prop 13. I can't sell the lot and retain my base year property tax value. Plus there would be a huge capital gains tax on the sum of the sale price plus insurance proceeds, as I rolled over the basis of the prior primary residence into this one.

My point is that it would be very difficult to replace the structure on the existing lot for what the insurance would pay, even if I could find a contractor.

Market value is based on the principle of substitution. Replacement cost is a method of measuring value, but only if you can replace by building new. While there is a confluence of constraints in the Bay Area that drive prices here into orbit, some of the same factors are now in play in other markets, including shortages of land, materials, and labor.
I'm not sure how much it helps, but since Prop 19 passed last November, you can move your tax basis to a new property anywhere in the state if you are a victim of wildfire or if you are over 55. You'd still be stuck with the cap gains though.
cathy63 is offline   Reply With Quote
Old 06-14-2021, 09:54 PM   #383
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,778
Quote:
Originally Posted by Another Reader View Post
I'm sorry, I don't follow your point.
Sorry, I was just confused when you wrote

Quote:
Originally Posted by Another Reader View Post
A lot similar to mine would go for at least $500k.
If you would rebuild on your existing lot (which completely makes sense based on everything you've written, setting aside Prop 19 for the moment) and you're getting rebuild cost on the structure, I'm not sure why the price of a lot like yours is relevant.

Not a big deal in any case.

(I don't live in CA but I know the tiniest bit about Prop 13 and Prop 19.)
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 06-15-2021, 08:10 PM   #384
Full time employment: Posting here.
 
Join Date: Aug 2005
Location: Far NW 'burbs of Chicago
Posts: 781
Quote:
Originally Posted by Another Reader View Post
...

My point is that it would be very difficult to replace the structure on the existing lot for what the insurance would pay, even if I could find a contractor.
...
Here in Illinois, State Farm allows and encourages us to sit down with the agent and calculate what it would actually cost to rebuild after a total loss. Sure, they make more money (premiums) if we select a higher value, but it's optional to do that. They have an automatic inflation adjuster built in to the rebuild cost, sometimes it has had us over insured and sometimes like now, under insured. But we get to pick any reasonable number.
Gearhead Jim is offline   Reply With Quote
Old 06-24-2021, 02:57 PM   #385
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,077
Ok, I think Zillow has jumped the shark. I didn't think there was a bubble but now I'm thinking I was wrong. Zillow just paid cash 3 weeks ago basically full asking + $20k, then turned around and put it on the market for what most would deem now $50k over FMV. That seemed wrong, so I have another neighbor who has to move out of the country, mid July, I tell her go see what they will pay. Zillow just offered her $140k over the house that sold in April across the street from her which is almost identical.. and thats before you consider they will have to re-sell it. So this does not seem to be a fluke and now I'm worried something is way wrong with their algorithm and they will be sitting on a ton of product.. and potentially needing to dump it. $40k I totally could have justified, $140k is just a mistake on their part.
karen1972 is offline   Reply With Quote
Old 06-24-2021, 03:04 PM   #386
Thinks s/he gets paid by the post
 
Join Date: Jul 2009
Posts: 1,263
I'm beginning to sense a slow-down ... anyone else picking up on it?

Could be the time of year, but ...
stephenson is offline   Reply With Quote
Old 06-24-2021, 03:31 PM   #387
Full time employment: Posting here.
ProspectiveBum's Avatar
 
Join Date: Sep 2006
Location: SoCal
Posts: 896
Quote:
Originally Posted by karen1972 View Post
Ok, I think Zillow has jumped the shark. I didn't think there was a bubble but now I'm thinking I was wrong. Zillow just paid cash 3 weeks ago basically full asking + $20k, then turned around and put it on the market for what most would deem now $50k over FMV. That seemed wrong, so I have another neighbor who has to move out of the country, mid July, I tell her go see what they will pay. Zillow just offered her $140k over the house that sold in April across the street from her which is almost identical.. and thats before you consider they will have to re-sell it. So this does not seem to be a fluke and now I'm worried something is way wrong with their algorithm and they will be sitting on a ton of product.. and potentially needing to dump it. $40k I totally could have justified, $140k is just a mistake on their part.
I was confused enough that you made me look it up. Sure enough, Zillow is buying homes. Here’s a blurb that I found from a NYT article from a couple of years ago:

Quote:
Zillow essentially acknowledges that it doesn't expect to make much money per home on its instant-offers program. Instead, it sees selling homes as a way to generate business for its mortgage-lending arm, which it developed after acquiring Mortgage Lenders of America last year, and for other services.
https://www.nytimes.com/2019/05/07/b...al-estate.html
__________________
I can't complain, but sometimes I still do.
- Joe Walsh
ProspectiveBum is online now   Reply With Quote
Old 06-24-2021, 03:38 PM   #388
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Teacher Terry's Avatar
 
Join Date: Jun 2014
Posts: 6,056
Karen, that’s really crazy.
Teacher Terry is offline   Reply With Quote
Old 06-24-2021, 04:01 PM   #389
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ExFlyBoy5's Avatar
 
Join Date: May 2013
Location: ATL --> Flyover Country
Posts: 6,444
Quote:
Originally Posted by Gearhead Jim View Post
Here in Illinois, State Farm allows and encourages us to sit down with the agent and calculate what it would actually cost to rebuild after a total loss. Sure, they make more money (premiums) if we select a higher value, but it's optional to do that. They have an automatic inflation adjuster built in to the rebuild cost, sometimes it has had us over insured and sometimes like now, under insured. But we get to pick any reasonable number.
Not a bad idea. Folks tend to underinsure since they don't take into account the other parts of dealing with "replacing" a house. Disposal of remnants of the old house, permits, etc. It can be significantly more expensive than "starting fresh."
__________________
FIRE'd in 2014 @ 40 Years Old
Professional Retiree
ExFlyBoy5 is offline   Reply With Quote
Old 06-24-2021, 04:01 PM   #390
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ExFlyBoy5's Avatar
 
Join Date: May 2013
Location: ATL --> Flyover Country
Posts: 6,444
Quote:
Originally Posted by stephenson View Post
I'm beginning to sense a slow-down ... anyone else picking up on it?

Could be the time of year, but ...
Maybe where you are, but not in the many markets my DW is involved in. It's still madness.
__________________
FIRE'd in 2014 @ 40 Years Old
Professional Retiree
ExFlyBoy5 is offline   Reply With Quote
Old 06-24-2021, 04:15 PM   #391
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 21,778
Quote:
Originally Posted by ExFlyBoy5 View Post
Not a bad idea. Folks tend to underinsure since they don't take into account the other parts of dealing with "replacing" a house. Disposal of remnants of the old house, permits, etc. It can be significantly more expensive than "starting fresh."
You can google "home replacement cost" and find quite a few calculators that can help with estimating those costs. A good starting point for those who don't already have a good idea.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 06-24-2021, 04:37 PM   #392
Thinks s/he gets paid by the post
 
Join Date: Oct 2007
Location: Willamette Valley, Oregon
Posts: 1,979
Quote:
Originally Posted by stephenson View Post
I'm beginning to sense a slow-down ... anyone else picking up on it?

Could be the time of year, but ...
Just last evening I was surfing the Redfin site of homes for sale, and recently sold in my area. While some of the seemingly reasonably priced homes had sold quickly (less than 7 days on Redfin), I noted several homes I had looked at before were still on the market 12 days, 18 days, 27 days later. These were ones I had thought were pushing it on price, but they were not really ridiculously overpriced.

So, yes, I too started wondering if the madness is beginning to ever so slightly be easing up.
__________________
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
RetireeRobert is offline   Reply With Quote
Old 06-24-2021, 07:18 PM   #393
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,778
Quote:
Originally Posted by RetireeRobert View Post
Just last evening I was surfing the Redfin site of homes for sale, and recently sold in my area. While some of the seemingly reasonably priced homes had sold quickly (less than 7 days on Redfin), I noted several homes I had looked at before were still on the market 12 days, 18 days, 27 days later. These were ones I had thought were pushing it on price, but they were not really ridiculously overpriced.

So, yes, I too started wondering if the madness is beginning to ever so slightly be easing up.
Seems to be easing up here as well.

Inventory is rising (still less than a month, but not as little as a week). Sellers are lowering asking prices. A local builder is offering discounts, especially if you buy by the end of this month. In the case of that builder though, that could just be a builder wanting to improve their balance sheet for whatever reason.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is online now   Reply With Quote
Old 06-24-2021, 07:35 PM   #394
Dryer sheet aficionado
 
Join Date: Jul 2016
Posts: 48
If you subscribe to the Zillow site, you'll notice a change when asking prices are showing up as "reduced". The more you see of this is a tell-tale. During the mist of the crazy market, I never saw anything reduced, but, starting to see just a few.
Deej is offline   Reply With Quote
Old 06-25-2021, 07:45 AM   #395
Recycles dryer sheets
 
Join Date: Aug 2017
Posts: 161
Still crazy in my neck of the woods without any sign of abating.
Attached Images
File Type: png St. Lucie.png (173.2 KB, 68 views)
File Type: png Martin.png (172.7 KB, 64 views)
firemediceric is offline   Reply With Quote
Old 06-25-2021, 09:07 AM   #396
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,251
Quote:
Originally Posted by ExFlyBoy5 View Post
Not a bad idea. Folks tend to underinsure since they don't take into account the other parts of dealing with "replacing" a house. Disposal of remnants of the old house, permits, etc. It can be significantly more expensive than "starting fresh."
I'm not so sure about that.... you'll have water, electric and wastewater all in place... and in most cases a sound foundation with some clean up.

We demoilshed and rebuilt in 2011/2012 and our demolition costs were only $7k and permit was $25 but we are out in the boondocks.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 06-25-2021, 09:11 AM   #397
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 32,251
Quote:
Originally Posted by firemediceric View Post
Still crazy in my neck of the woods without any sign of abating.
You made me look... the Zestimate of my Florida condo is 25% higher than what it was last fall... realtor.com estimate is "only" 15% higher.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 06-25-2021, 09:56 AM   #398
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 3,152
Quote:
Originally Posted by Gearhead Jim View Post
Here in Illinois, State Farm allows and encourages us to sit down with the agent and calculate what it would actually cost to rebuild after a total loss. Sure, they make more money (premiums) if we select a higher value, but it's optional to do that. They have an automatic inflation adjuster built in to the rebuild cost, sometimes it has had us over insured and sometimes like now, under insured. But we get to pick any reasonable number.
Their number grossly underestimates the actual rebuilding cost. I upped my coverage and added the optional 20 percent rider when I recently renewed. I hope to cover most of the current rebuilding cost. Contractors are impossible to find now, imagine what it woud be like after a major wildfire?
Another Reader is offline   Reply With Quote
Old 06-25-2021, 10:01 AM   #399
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 3,152
Quote:
Originally Posted by pb4uski View Post
I'm not so sure about that.... you'll have water, electric and wastewater all in place... and in most cases a sound foundation with some clean up.

We demoilshed and rebuilt in 2011/2012 and our demolition costs were only $7k and permit was $25 but we are out in the boondocks.
The temperatures reached in some of the wildfires here weakened the slabs, rendering them useless. Underground plastic pipes melted and some metal pipes as well. Not your typical house fires.
Another Reader is offline   Reply With Quote
Old 06-25-2021, 10:02 AM   #400
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 4,944
We bought our house in 2016. The housing news says that the housing prices in my area have increased by 30% in one year. Looking at the recent sales prices of the homes that are similar to mine, the housing prices have almost doubled since 2016, which means we couldn't afford our house if we were to a house today.

I feel for the people who are currently in the market...
tmm99 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Real Estate Agent in Down Real Estate Market TromboneAl Other topics 4 06-09-2007 10:20 AM
What Real Estate Bubble? Art FIRE and Money 76 11-09-2006 03:33 PM
The real estate bubble is over cute fuzzy bunny FIRE and Money 43 05-16-2006 03:55 PM
Real Estate Bubble in D.C. - CBS News tonite.... Cut-Throat FIRE and Money 23 05-19-2005 01:44 PM
Shiller - "We now have a Real Estate Bubble"...... Cut-Throat FIRE and Money 29 04-11-2005 05:20 PM

» Quick Links

 
All times are GMT -6. The time now is 05:48 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.