Start of the Real Estate slump?

[JoeWras]

You can’t rely on Zillow as it is all over the place. They say my place gained 5% these past 6 months. A similar sized property 400 yards up the street just sold at a increase of 60% from last year. If there aren’t enough properties being sold Zillow has no data to use. Broker says I can get 25% more than what I paid 18 months ago. After improvements and closing costs for purchase and sale, moving etc it is not worth it. Even at 25% more I think I got a good deal. Due to pandemic mostly rented on AirBnB and my net return is about 14%, Not counting appreciation. so going to pass on all the requests.

In my county, the best place to get a feel for the market is to look at the comparable sales they list. They use these to base the tax evaluation. The comps auto-update and you can follow them. You can also cruise other recent sales.

All of this is freely and easily available on most county sites depending on your state and county. Some make it easy (my county), others make it difficult.

 

[Badger]

You can’t rely on Zillow as it is all over the place. They say my place gained 5% these past 6 months. A similar sized property 400 yards up the street just sold at a increase of 60% from last year. If there aren’t enough properties being sold Zillow has no data to use. Broker says I can get 25% more than what I paid 18 months ago. After improvements and closing costs for purchase and sale, moving etc it is not worth it. Even at 25% more I think I got a good deal. Due to pandemic mostly rented on AirBnB and my net return is about 14%, Not counting appreciation. so going to pass on all the requests.

+1
I have a room addition that is open to the main house by a 48 sq ft opening (archway from removing french doors in a remodel) and another glassed in sun room with a wall air conditioner that total 550 sq ft that are not included in the sq ft of the house for the estimate because they don't have ducts for heating. Those rooms would have increased my sq footage by 35%. Since the ducts for the house are in a concrete slab there is no easy way to tap into them although I individually heat and cool the rooms by other means. If I get the urge maybe I could install one of the European style wall mounted heaters for <$1k to meet the requirements but this is Florida and I am busy living the easy life.



Cheers!

 

[JoeWras]

Speaking of zillow, my neighbor did something to his to make his value go up. He is a Realtor. I think he just sweetened the descriptions and marked stuff new and improved.

I should ask him and maybe do the same. I'm just not sure if Zillow charges you to "claim" your property. Also not sure I want an account with them.

It is actually to all our benefit if the zillow price goes up. Even if I'm not selling now, more accurate prices could lead to higher prices in the neighborhood in general. This is probably why RealtorNeighbor updated his.

 

[ExFlyBoy5]

As we all know, RE is highly regional and there are many variables as to making a certain area (or even a single neighborhood) hot or not. My DW is in the RE leasing management side of the biz and currently oversees rentals in 7 (or 8 maybe, I can't recall) states and for the most part, the time on the market (rentals) is still very low. There has been a slight slow down in the number of investment firms buying up SFHs, but it is still happening.

In our neck of the woods, some home are going quickly while others are sitting. The ones with a little acreage seem to be selling faster. We purchased some acreage behind our home to keep any future development at a distance and we have had 3 unsolicited offers in the last couple of months.

Antidotally, there is also some consolidation of some of the largest RE firms going on, so that *could* be a sign of change...but of course we all know that nothing rarely stays the same, especially these days!

 

[Scrapr]

I should ask him and maybe do the same. I'm just not sure if Zillow charges you to "claim" your property. Also not sure I want an account with them

I claimed my account on Zillow several years ago. IIRC at that time there were people claiming accounts (not the owner) and then offering to rent the house on Craigslist. Our home does not get the Google Maps car down hardly ever. The picture on Zillow was 15 years ago when it was being built. It was ugly. By claiming the house you can change the picture. Before it went on the market I changed the picture on most of the sites.

 

[rodi]

San Diego is very much a sellers market. Stuff is selling quickly for much higher prices than I expect. Only one's sitting are those that are REALLY overpriced. (not updated in 20 years, on a busy street, problems with the house but priced like the fully updated version on a quiet street, that was flawless in location and finishes.)

Big exodus from NYC, perhaps even bigger than after 9/11. [After 9/11, there were plenty of people buying quite far from NYC, but mostly along train corridors and also limited due to the fact that their jobs required them to be in the city. I know this because I lived upstate but was working in NYC. This time around, technology has improved enough to (perhaps) make this a more permanent thing.)

Side note: I started "working from home" in the mid 90's, now it is trendy.

An acquaintance from my beach walks is bi-coastal... He fled NYC at the beginning of covid and lived in his La Jolla home... then went back to NYC/Hamptons for the summer... He said many friends with kids stayed in the Hamptons while kids were attending virtual private school... He loved the empty city. But... with covid numbers creeping up in NYC, he fled back to La Jolla.

In our state, it's property taxes. California has a law; PROP13, where the property taxes are 1% of sale price and limited to a 2% increase max of that amount. I bought my home in 1985 for $96,500. It's market analysis (not an official appraisal) is somewhat north of $700,000. I pay $1,200 a year property tax. The buyer of my home will pay at least $7,000. If I were to sell and buy another home, property taxes on the new home would be beyond my budget. I'd like to downsize someday, but not at the expense of paying a premium to the state for the privilege. So I'll sit on it and probably sell only if I move out of state. This is a HUGE problem in California. There are some contingencies for selling and moving my property tax to a smaller (less expensive) home, but it's based on owner age and cooperative counties.

In most counties you can transfer your prop-13 tax rate to a lesser priced house if you are over 55. Google prop 60 and prop 90 and prop 121. Those amended prop 13.

Also check your ballot. Prop 19 is a further amendment to prop 13 (if it passes.)

We are looking at a downsize in our future - but won't if we'd have to pay much much much higher property taxes. (Ours are low due to prop 13.)

 

[SenorDave]

My bigger concern is commercial real estate... especially office and retail. I've heard numerous stories of companies not renewing office space leases because with so many employees working remotely they don't need as much office space. And retail is just dreadful.

+1

 

[gooddog]

North coast of California has gone up at least 30% over the last year. The Space Coast of Florida, where our other place is, has gone up about 12% over the last 4 months or so. With materials and labor going up, it is only going to get more expensive long term. There may be a crash sometime over the next two years or so, but long term...up up up.

 

[gwix98]

Seattle area is still on fire too.
If you list your house, you better have a place to move to in the works.

 

[ychuck46]

Small Town TN

Here in our small area of TN we live in a development of about 50 homes. People very seldom leave but this summer we had three homes go on the market. All three sold quickly and for their asking price. The market here, admittedly a low cost area to live, appears to be good.

 

[Retch The Grate]

This is in California. So many dotcom businesses are fleeing the SF area for the more rural and suburban areas that it's like a land rush. Huge home equities from Bay Area homes coming in to buy relatively cheaper places that are much larger and can accommodate home offices as well as enough room to make sheltering in place more like a remote resort than the tiny zero setback prison cells Bay Area homes are known for.

Meanwhile we are looking to buy in SF proper, will see what numbers end up looking like but I'm hoping for 2100+sq ft for between 1.4-1.8m. I hope as many people keep decamping for the boonies as possible. We've spent the pandemic watching the available real estate for sale flare up all across the city, heaviest in the neighborhoods that the techies live in. (we are techies too, but are hoping to find a place out in the parts of the city we live in around Mt Davidson).

 

[Kroeran]

Why the boom in home sales Low interest, cheap money must be a part of the reason?

Low interest
24/7 life at home including older kids, need for space
Liberation from commute
Bank accounts fat from no spending on travel, eating out, concerts and the arts
Gardening hobby
Fear of high rise elevators
Fear of retirement institutions and nursing homes leading to more care at home
Gyms/yoga studios closed hence need for gym and virtual yoga space at home

Some of the small villages in Eastern Ontario are approaching 50% and even doubling of house prices year over year

Key is to look over the horizon at what the world will look like once most of the vulnerable population is vaccinated in 6 months

 

[Kroeran]

Homes around here are selling quickly. Prices are definitely up substantially from a year ago. Great time to sell without a realtor and pocket the savings. Ours sold with a posting on Zillow in a day and a half.

We saw a for sale by owner sign in a neighbourhood we watch as a future downsizing option and chatted with the seller. We concluded 10 years too soon for us.

In the past my view was that trying to save on realtor fees was not worth what you gave up on market liquidity plus the fact that persons on the buy side would only be sophisticated buyers who would bargain hard, too hard.

I am totally out of the loop now on the pros and cons of all the different listing and buying options available and how the legal side works without a realtor.

 

[Rambler]

Here in the East valley of the Phoenix region, homes are selling faster than hot cakes. Every one of the 6-7 homes in our development (124 homes) that have gone up for sale this year sold in a couple of days, except for one that had been significantly over priced...that one still sold in about 4 weeks. We had one go on the market for $1.1M, sold in an hour, cash offer, with the stipulation that it had to close in 15 days. We’ve been looking around Cedar City Utah for a smaller summer getaway home...found the perfect place, only a year old, a bit over half acre, RV parking with full hookups...it had four offers in 6 hours, two of which were above asking price. The owner countered higher than the highest, and got it.

I think a lot of it has to do with where you or the property are. Here in AZ, we are having a massive influx from California, as is Utah and Nevada. There isn’t much inventory, and builders can’t get materials fast enough to keep up with the demand.

 

[Chuckanut]

I think a lot of it has to do with where you or the property are. Here in AZ, we are having a massive influx from California, as is Utah and Nevada. There isn’t much inventory, and builders can’t get materials fast enough to keep up with the demand.

So, with all of these Californians leaving for greener pastures, why aren't home prices in California going down? I realize interest rates are historically low, but still....

I have to think the great exodus from California is a fig newton of somebody's imagination.

 

[Rambler]

Well, we left. We overbuilt and took a loss...my bad. Three former neighbors have also left and one more is on their way out, but they all bought after the 2009 crash and made out like a charm. Roughly half of our new neighbors in this 124 home development are California transplants. We are trying to get into a new development about 3 miles away...similar story there. From what I’ve heard, COVID has taught a lot of companies that working from home isn’t all that bad (for some professions), and thus a lot of folks who have worked in the Bay Area are selling while the prices are still outrageous and getting a lot more house for their money, often mortgage free.

 

[Koolau]

So, with all of these Californians leaving for greener pastures, why aren't home prices in California going down? I realize interest rates are historically low, but still....

I have to think the great exodus from California is a fig newton of somebody's imagination.

I suppose by definition, a larger number of homes for sale (Cali or anywhere) will drive down prices. You may just not notice the "effect" because Cali homes are STILL in short supply - just not as short. Prices still climb, but maybe not as fast - "lost in the noise" comes to mind but YMMV.

I can't vouch for this website:

https://strangesounds.org/2019/11/california-exodus-people-leaving-california-for-other-states.html

I just googled it so don't know what political bent (or lack thereof) might be involved. They suggest numbers like 200,000 per year net loss. In a state big as Cali, that would not be noticeable to most folks. But, that kind of change has to affect prices - even if you can't tease out the effect. Once again, YMMV.

 

[bolt]

Everyone has their own personal experiences, biases, and particulars.
Some utilize R.E for an income stream, others, a lifestyle.

Some pay retail/or what the market will bear* & others refuse to on principle alone & because they can, ..concerning R.E.
Amassing capital/leverage is paramount to some people.

RE is its own beast. I know one individual exiting S/CA considering their future taxes alone in the move. Leverage is paramount.
Good luck & Best wishes.....

 

[troutnut1]

Real estate is red hot in Montana with Californian’s and Washingtonians fleeing and trying to find a new state to ruin...

 

[TrvlBug]

People have been leaving California since forever and housing prices keep going up, up, up. Interesting tidbit in today's news that Silicon Valley companies are/are thinking of reducing pay of those working from home and leaving the area. Go for it. My former company did the same. They were unable to compete with pay and hired as well as encouraged California based employees to up and relocate to their other locations. Even with the reduced pay at the non-California locations, moving to the other location still provided a much better quality of life.

It seems that unless you've got mucho $$$ or have lived here forever like DH and I have, you can't afford it. DH and I joke that we could never afford our house if we had to buy it today.

 

[jkern]

People have been leaving California since forever and housing prices keep going up, up, up. Interesting tidbit in today's news that Silicon Valley companies are/are thinking of reducing pay of those working from home and leaving the area. Go for it. My former company did the same. They were unable to compete with pay and hired as well as encouraged California based employees to up and relocate to their other locations. Even with the reduced pay at the non-California locations, moving to the other location still provided a much better quality of life.

It seems that unless you've got mucho $$$ or have lived here forever like DH and I have, you can't afford it. DH and I joke that we could never afford our house if we had to buy it today.

I know it appears that the prices are astronomically high (SF Bay Area), but I believe there are more affordably today than they were 30 to 35 years ago. Interest rates being 3% vs 12% makes a huge huge difference. I don't believe it's impossible for the younger generation either. To purchase a $1M house with 20% down only requires an income of about $160K. That's $80K each for a working couple. Relatively low income for the Bay Area.

 

[KB]

So, with all of these Californians leaving for greener pastures, why aren't home prices in California going down? I realize interest rates are historically low, but still....

I have to think the great exodus from California is a fig newton of somebody's imagination.

Houses in my town in CA are selling at more than the asking price, currently. And selling quickly. The inventory is low right now because houses sell fast. I keep track in my neighborhood, and two house of the same floor plan that I have sold recently at about 2 or 3% over asking price. While that isn't a large percentage on a 550K house, it is a new trend.

With people able to work from home more readily now, they are able to move to areas where they couldn't live before, due to their jobs.