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Old 04-22-2021, 10:08 AM   #81
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Have you read this thread lots of good feedback on realtor...
https://www.early-retirement.org/for....php?p=2593206


I will try and keep this brief so feel free to ask any questions you might have.<br />
4 siblings inherited house we grew up in when both our parents passed away in late 2019 and early 2020. Its in the SF bay area and no one party can afford to buy out the others and keep it even if we all agreed to give the buying party a deep discount. Plus the house could really use total remodel inside.<br />
Due to Covid we had delayed the sale till now. Two brothers who live in the area have been clearing things out and getting the place ready for selling. Parents were smokers so they removed the carpet and had the inside repainted. Still things are going to look outdated.<br />
The one brother who has done the majority of the planning and work has lined up a realtor he knows of who is going to do the sale at 5%. They are suggesting listing it on the lower side of what houses in the area are going for. Expecting multiple offers in the hot housing market.<br />
One sibling who is watching Redfin and Zillow estimates and recent sales thinks we should list it much higher because of the hot market.<br />
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I can see both points of view. Any thoughts would be appreciated.
Zillow has become practically useless for estimating value and it's not just a recent event. In my neighborhood Zillow is off by as much as 40%. Using recent comps is by far the best way to estimate value. A common theme these days is to price it low and let the market set the sales price. I'm sure not matter which pricing strategy you use it will be fine.
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Old 04-22-2021, 10:11 AM   #82
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People are not dumb. They see Washington DC printing presses running overtime, printing money out of thin air, for one multi trillion dollar extravaganza after another. People are running to put their rapidly devaluing dollars into some real asset---houses! And the good thing about a house is, you can live in it. Better to have a house with an inflating value, than to leave one's wealth in dollars which are being rapidly devalued.
The federal government has long been run in deficit fashion - no new news there, but there may be some psychological basis in folks wanting to own a home to be able to retreat into - rather than an apartment?
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Old 04-22-2021, 10:11 AM   #83
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It seems to vary a lot around the country.

By looking at various comps in my neighborhood I came up with my own estimate of what my place would sell for.

Redfin's estimate was extremely close, less than 1% higher.
USAA's estimate was around 5% higher.
Zillow's estimate was over 20% higher.
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Old 04-22-2021, 10:44 AM   #84
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last 10 years renting was more encouraged to change the location for better career. but now they allow work at home. Internet is the changing key in this housing market.

renter dont wanna live in apt due to covid.

last year stock and crypto were so good, if they could make down payment from it, I would buy a house if I am young generation. They have been waiting so long for house price going down, but it kept going up, so they are anxious to have their own now.

also building cost are too high, so I dont see much construction going on. And I see ppl dont wanna work. hard to find labors.

It is a bit bubble, but I think it will continue to this way for a while. But inflation would go up in my opinion.
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Old 04-22-2021, 11:26 AM   #85
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Some homeowners who love their homes and have no desire to move (like F and me), are finding this real estate bubble to be amazing and infinitely entertaining. I'm living in what is literally my Dream Home, the house that I always wanted all of my life. F is happy with his house as well.

What amazes me is not only the great increase in selling prices in our neighborhood, but also (looking at the online photos), what DUMPS some of these places are inside. Honestly even among the non-dumps I have not seen any that I would want to live in. They don't even bother to clean, renovate, or fix anything between grampa dying and the heirs taking photos of his house for realtor dot com. Despite that, houses are selling really fast.

Another astounding thing (to me) is that in our neighborhood, empty lots are now going for more than I paid for my house+lot back in 2015. We live in an older neighborhood with mostly houses built in the 1950's and 1960's, but builders are buying up lots and building on them at a pretty rapid pace. Yes, even with the high price of building materials they are still able to do this somehow. The prices of these new homes are sky high, almost (but not quite) "California prices".

Who needs TV or movies? Just checking realtor dot com to see what came on the market in the past few hours and for how much, is a thrill and a half.

But as Frank puts it, "If we sold our houses, where would we live?" Good question since it seems like house prices are increasing a lot in every location where we might want to live. So, we are happily staying put and watching the show.
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Old 04-22-2021, 11:47 AM   #86
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But as Frank puts it, "If we sold our houses, where would we live?" Good question since it seems like house prices are increasing a lot in every location where we might want to live. So, we are happily staying put and watching the show.
Careful - what if he suggests selling his and moving in with you to reap the riches!
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Old 04-22-2021, 11:48 AM   #87
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Three homes within 300 ft from me have been listed and sold recently. They were on the market for just a couple of days, and bid up above the asking price. One home did not even bother to have the For Sale sign planted.

Remaining neighbors all get excited about the appreciation of their home. Meh! My 2 homes are not that big a percentage of my net worth, I worry more about the stock market.
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Old 04-22-2021, 11:52 AM   #88
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Some homeowners who love their homes and have no desire to move (like F and me), are finding this real estate bubble to be amazing and infinitely entertaining. I'm living in what is literally my Dream Home, the house that I always wanted all of my life. F is happy with his house as well.

What amazes me is not only the great increase in selling prices in our neighborhood, but also (looking at the online photos), what DUMPS some of these places are inside. Honestly even among the non-dumps I have not seen any that I would want to live in. They don't even bother to clean, renovate, or fix anything between grampa dying and the heirs taking photos of his house for realtor dot com. Despite that, houses are selling really fast.

Another astounding thing (to me) is that in our neighborhood, empty lots are now going for more than I paid for my house+lot back in 2015. We live in an older neighborhood with mostly houses built in the 1950's and 1960's, but builders are buying up lots and building on them at a pretty rapid pace. Yes, even with the high price of building materials they are still able to do this somehow. The prices of these new homes are sky high, almost (but not quite) "California prices".

Who needs TV or movies? Just checking realtor dot com to see what came on the market in the past few hours and for how much, is a thrill and a half.

But as Frank puts it, "If we sold our houses, where would we live?" Good question since it seems like house prices are increasing a lot in every location where we might want to live. So, we are happily staying put and watching the show.
I would argue that for those that have ZERO desire to move the great increases in price would be more nauseating than entertaining; greater costs mean greater assessments which means more taxes and more expensive insurance. This is even more bothersome for those that are older and/or on a fixed budget. They can quite literally be run out of their homes because of these rapid increases in value. Yes, some places have restrictions in place (senior exemptions, value caps, etc.) but they aren't universal.

My Dad's neighbor was always so impressed at how the value of their house had increased since they purchased in the early 80s. As far as I know, they are still in that house, but the taxes are SIGNIFICANTLY more than they were a few years ago. I wonder if they are as thrilled with the run up in values today?
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Old 04-22-2021, 12:07 PM   #89
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Zillow has become practically useless for estimating value and it's not just a recent event. In my neighborhood Zillow is off by as much as 40%. Using recent comps is by far the best way to estimate value. A common theme these days is to price it low and let the market set the sales price. I'm sure not matter which pricing strategy you use it will be fine.
Zillow is fun and easy to get a ballpark. But yeah, comps is where it is at.

Our county does some of the comp work for us. Its computer chooses 12 recent sales from the neighborhood, or close by, of houses of approximately the same size. It is just a few hyperlinks to see what the tax assessor thought the value was 1 1/2 years ago. Then using this as a ratio, you can get a better ballpark to my home value.

It is still a bit tricky because the tax assessor may not know the house is trashed inside, or heavily updated. So, you have to kind of average a few properties. Most still have inside pictures on Zillow to give an idea of condition.

What I'm seeing in our neighborhood is a consistent 25% to 40% higher than the assessor's value of just 1 1/2 years ago. I've never seen it go that crazy in the 20 years or so the records have been online. BTW, our county uses "true" value assessing, which means it is usually within 10% or so of reality on a standard condition home, on the day they did the assessment.
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Old 04-22-2021, 12:29 PM   #90
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the great increases in price would be more nauseating than entertaining; greater costs mean greater assessments which means more taxes and more expensive insurance. This is even more bothersome for those that are older and/or on a fixed budget. They can quite literally be run out of their homes because of these rapid increases in value.
Bingo!

All the cheering from homeowners seeing real estate prices shooting up, do they not realize that just a couple years from now when they get their property tax bills, they will likely have heart attacks?

No chance the counties will decrease their tax levy rates because of the tons of new revenue coming in based on inflated RE values. They will instead expand and find ways to spend their new bounties.
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Old 04-22-2021, 12:34 PM   #91
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Bingo!

All the cheering from homeowners seeing real estate prices shooting up, do they not realize that just a couple years from now when they get their property tax bills, they will likely have heart attacks?

No chance the counties will decrease their tax levy rates because of the tons of new revenue coming in based on inflated RE values. They will instead expand and find ways to spend their new bounties.
I guess this is where CA has one positive tax law (the politicians hate it), the assessed value can only increase by 2% per year.
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Old 04-22-2021, 12:38 PM   #92
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I guess this is where CA has one positive tax law (the politicians hate it), the assessed value can only increase by 2% per year.
But isn't that California tax cap negated when a home sells? New owner loses the old capped value and gets stuck with new assessment value?
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Old 04-22-2021, 12:39 PM   #93
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I guess this is where CA has one positive tax law (the politicians hate it), the assessed value can only increase by 2% per year.
Right, it’s a good benefit for California residents. But there must be similar laws in other states besides California that protect homeowners from rapidly rising home values. Otherwise people could end up losing their homes because they couldn’t afford to pay the taxes on a home they’ve owned for many years but purchased at a much lower price than the current value.
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Old 04-22-2021, 12:43 PM   #94
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But isn't that California tax cap negated when a home sells? New owner loses the old capped value and gets stuck with new assessment value?
Yes, when the home is sold a new tax basis is created. Then, 2% per year thereafter.
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Old 04-22-2021, 12:56 PM   #95
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Fully agree with the comments regarding exorbitant, gut-punching property tax rates. We are buying a new construction home in SE FL (I did not want to buy into this insane market, but we did not have a choice, for reasons that would be too complex to explain here), and our property taxes will be about $12K/year. Not to mention, good luck finding somebody who is willing to insure you (one of the main reasons we went with a new construction home). In other words: this is not a party, but a concerning trend that will have serious repercussions for all of us.
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Old 04-22-2021, 01:08 PM   #96
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In other words: this is not a party, but a concerning trend that will have serious repercussions for all of us.
You are so right about that!
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Old 04-22-2021, 01:10 PM   #97
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Yes, when the home is sold a new tax basis is created. Then, 2% per year thereafter.
Same in FLA, but with a maximum increase of 3% yearly.
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Old 04-22-2021, 01:13 PM   #98
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There is nothing crazy about the R/E market...geez.

https://www.cnbc.com/2021/04/22/unin...g-profits.html
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Old 04-22-2021, 01:17 PM   #99
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Fully agree with the comments regarding exorbitant, gut-punching property tax rates. We are buying a new construction home in SE FL (I did not want to buy into this insane market, but we did not have a choice, for reasons that would be too complex to explain here), and our property taxes will be about $12K/year. Not to mention, good luck finding somebody who is willing to insure you (one of the main reasons we went with a new construction home). In other words: this is not a party, but a concerning trend that will have serious repercussions for all of us.
Property taxes are crazy high. Perhaps we need to find another way? Below is comparing 2020 taxes for some Bay Area homes in Newark CA. These are all on the same street we grew up on. Many were still original owner occupied until the last few years. The homes were built around 1960. All homes are in similar shape and square footage. Average value is crazy $900,000 for average track homes. This is good if your selling but not so good if your buying. If it were not for prop 13 many original owners would have probably been taxed out of their homes.

Our Mom And Dads home....original owners....sold1961....$1,234.00

Sold 1986.................$3,830.00

Sold 2001.................$7,190.00

Sold 2004.................$8,963.00

Original owner...$1,174.00....just sold 08/18...now $11,153.00. That's almost $10,000 more a year........and that's every year forever. Plus they have a $888,000 house they*have to pay for.*

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Old 04-22-2021, 02:26 PM   #100
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Look at avg days on market, around Cincinnati area suburbs is approx 2 days for houses under $300K. Even though a bit longer for the more expensive houses, they are also near record low days on market. The number of actual houses being sold is at a high rate, but current number of houses on market is at near record lows. So it is definitely a supply and demand issue around here.

Do I think we are in a bubble? Yes in that sales prices are at record levels and a lot of the bidding wars. Seems to be a bit of FOMO. At some point it will slow down. Don't think it will be a bubble pop, but my thought is more of a leveling off and staying there for a while. Look at foreclosure rates as an indicator. If/when rates do increase, that will have a natural leveling off effect. As more go back to in-work vs work from home, it will also be a leveling off effect.

Inflation is near or already present, and that will cause the real estate bubble to stop the huge increases. Corresponding increase in rates will also contribute.
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