Crazy RE - Redfin CEO Tweetstorm

[Tekward]

Crazy changes in RE. Thoughts on Redfin CEO insights?

1of 15: It has been hard to convey, through anecdotes or data, how bizarre the U.S. housing market has become. For example, a Bethesda, Maryland homebuyer working with @Redfin included in her written offer a pledge to name her first-born child after the seller. She lost.
2 of 15: There are now more Realtors than listings.
3 of 15: Inventory is down 37% year over year to a record low. The typical home sells in 17 days, a record low. Home prices are up a record amount, 24% year over year, to a record high. And still homes sell on average for 1.7% higher than the asking price, another record.
4 of 15: But in two of America’s largest cities, inventory has increased, in New York by 28%, in San Francisco by 77%. San Francisco hasn’t had an inventory increase this large since 2008. And still in both markets, prices are increasing.
5 of 15: In 2020, new-construction permits were down 13% in DC and New York, 40% in LA, 48% in Chicago, 50% in Seattle, 79% in San Francisco. Permits were up 25% in Miami, 56% in Vegas, 96% in Greenville, 122% in Detroit, 246% in Knoxville.
6 of 15: Lumber prices are up 300%.
7 of 15: In Redfin’s annual survey of nearly 2,000 homebuyers, 63% reported having bid on a home they hadn’t seen in person.
8 of 15: In an April survey of 600 Redfin.com users who had relocated in the past year, about two thirds of the people who moved got a house the same size or bigger, but about the same proportion, two thirds, spent the same or less on housing.
9 of 15: Even though most of the people who moved got a bigger home, 78% reported having the same or more disposable income after their move. Idaho home prices could triple and still seem affordable to a Californian.
10 of 15: For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes, after many promised new money for social justice; the federal government will have to fund long-term investments.
11 of 15: This migration to lower-cost areas may lead to lower workforce participation. For many families @Redfin has relocated, the money saved on housing costs lets one parent stop working. A wave of Redfin customers are retiring early.
12 of 15: Lenders are calling employers to confirm that the homebuyer will have permission to work remotely when the pandemic ends. Rates are lower for loans on primary residences, and the lender also wants to make sure the borrower actually plans to work after getting the loan.
13 of 15: The average housing budget for out-of-towners moving to Nashville was $720K, ~50% higher than locals’ $485K budget. It used to be coastal elites who worried that every adult in the family had to win a career lottery, just to afford a home. Now that feeling may spread.
14 of 15: it’s not just income that’s k-shaped, but mobility. 90% of people earning $100,000+ per year expect to be able to work virtually, compared to 10% of those earning $40,000 or less per year. The folks who need low-cost housing the most have the least flexibility to move.
15 of 15: an investor recently said, with an ancient touch of awe but also greed, that one source of America’s miraculous economic recovery was the bounty of “the land itself.” We have more room to grow than we ever imagined. We just have to make sure that benefits everyone.
https://www.businessinsider.com/hous...eo-2021-5?op=1

[mickj]

Nuts!

[ExFlyBoy5]

We were in Nashville a few months ago and couldn't help but noticed the explosive growth that was going on. I have never seen so many cranes...and this observation from a guy who watched Atlanta's epic growth over the years...but this part:

Quote:

The average housing budget for out-of-towners moving to Nashville was $720K, ~50% higher than locals’ $485K budget.

The strange times keep on rolling on.

[tmitchell]

This is astounding. I have been searching for a place outside SoCal for over a year and now due to market issues looking at having to either keep working or totally reimagine my plans.

Talking to my friends who know RE well, the consensus is this isn’t a bubble either. Guess we’ll see.

[Nick12]

Lumber yards better get some security to watch their product. Some may be using the five finger discount to get the product.

[harley]

Yeah, I was trying to slip a couple of sheets of plywood under my shirt, but my recent weight loss tripped me up. My new t-shirts are too small.

[Nick12]

Quote:

Originally Posted by harley Yeah, I was trying to slip a couple of sheets of plywood under my shirt, but my recent weight loss tripped me up. My new t-shirts are too small.

Then you must live in a box. And hurricane season starts June 1.

[Out of Steam]

Quote:

Originally Posted by harley Yeah, I was trying to slip a couple of sheets of plywood under my shirt, but my recent weight loss tripped me up. My new t-shirts are too small.

Have to wear your old, larger clothes for that. In college, a smaller classmate asked to borrow my jacket as we were leaving a reception. He came back to me outside and pulled a handle of vodka out from under my coat as he handed it back.

[Nick12]

Quote:

Originally Posted by Out of Steam Have to wear your old, larger clothes for that. In college, a smaller classmate asked to borrow my jacket as we were leaving a reception. He came back to me outside and pulled a handle of vodka out from under my coat as he handed it back.

Used the tip jar to pay for drinks at a wedding reception.

[Out of Steam]

One thing we're seeing is the realization that any place within an hour's drive of 500,000 people probably has all the restaurants, shopping, and cultural resources the average person needs. Unless someone is in a specialized line of work, it also likely to have jobs adequate to let the residents take advantage of those things.

[Out of Steam]

Quote:

Originally Posted by Nick12 Used the tip jar to pay for drinks at a wedding reception.

Don't like the idea having a cash bar at a wedding reception anyway, at least not before dinner.

[24601NoMore]

Hmmm..now that work is becoming more virtual, people don't want to live in states that tax them to death and are seeking out lower tax states to live in.

Who would have ever guessed?

CA, NJ, NY, MI and other similar states could be in real trouble in terms of people moving out..I know we're looking hard to do so for the same reason - taxes on a decent house here are > $1,000 per MONTH. No thanks. That's an ER budget killer for sure.

[John Galt III]

Quote:

Originally Posted by ExFlyBoy5 We were in Nashville a few months ago and couldn't help but noticed the explosive growth that was going on. I have never seen so many cranes...and this observation from a guy who watched Atlanta's epic growth over the years...but this part: The strange times keep on rolling on.

Flying into Atlanta airport to change planes last week, could not believe all the red clay torn up for brand new developments. Must have been 10 or more huge neighborhoods being built, with brand new roads visible from on high. Traffic is already unbearable there, isn't it?

[Walt34]

Quote:

Originally Posted by 24601NoMore CA, NJ, NY, MI and other similar states could be in real trouble in terms of people moving out..I know we're looking hard to do so for the same reason - taxes on a decent house here are > $1,000 per MONTH. No thanks. That's an ER budget killer for sure.

A lot depends on what the definition of "a decent house" is, but (ssshhhh) here in WV we're paying just over $1k a YEAR.

Now, I get a little bit of a break being over 65, but still....

[24601NoMore]

Quote:

Originally Posted by Walt34 A lot depends on what the definition of "a decent house" is, but (ssshhhh) here in WV we're paying just over $1k a YEAR. Now, I get a little bit of a break being over 65, but still....

Wow - lucky you. My property taxes last year were over $9K ($9,600'ish IIRC). And what did we get for that? Snow removal and trash pickup. Oh, and we got to fund the local schools - even though we don't have kids.

By 'decent' house - I mean your typical 4BR subdivision house in a decent to nice neighborhood built in the past 20-25 years. Nothing super "fancy". Those are even more.

We'd love to downsize and move to a nice cabin in TN or similar, but like the article says..the housing market is absolutely bananas and we're unlikely to find anything like we'd ideally be looking for anytime soon..we do candidly feel a bit 'trapped' by it all at the moment and the one regret I have in my whole ER decision was not having the retirement house either built or purchased BEFORE we both ER'd..lot easier to do that when you have decent sized paychecks coming in.

[Jerry1]

Quote:

Originally Posted by 24601NoMore Hmmm..now that work is becoming more virtual, people don't want to live in states that tax them to death and are seeking out lower tax states to live in. Who would have ever guessed? CA, NJ, NY, MI and other similar states could be in real trouble in terms of people moving out..I know we're looking hard to do so for the same reason - taxes on a decent house here are > $1,000 per MONTH. No thanks. That's an ER budget killer for sure.

Not sure why you put MI in the same category as the other three. While our Governor is made a name for herself nationally, our taxes are not bad at all. Certainly not in the league of the other three.

This article puts us closer to the middle of the pack.

https://wallethub.com/edu/best-worst...-taxpayer/2416

Plus, my personal opinion is that fresh water is going to become more and more valuable. Hail to the Great Lake State!

Don’t get me wrong, I’m no MI fanboy, but my family is here and I find no problem living well in retirement here. FWIW, I just over $4K a year in taxes on my house which has a market value around $275K. A lot of that is our school district which is one of the better districts in the state.

[Al in Ohio]

Quote:

Originally Posted by Tekward Crazy changes in RE. Thoughts on Redfin CEO insights? 1of 15: It has been hard to convey, through anecdotes or data, how bizarre the U.S. housing market has become. For example, a Bethesda, Maryland homebuyer working with @Redfin included in her written offer a pledge to name her first-born child after the seller. She lost. 2 of 15: There are now more Realtors than listings. 3 of 15: Inventory is down 37% year over year to a record low. The typical home sells in 17 days, a record low. Home prices are up a record amount, 24% year over year, to a record high. And still homes sell on average for 1.7% higher than the asking price, another record. 4 of 15: But in two of America’s largest cities, inventory has increased, in New York by 28%, in San Francisco by 77%. San Francisco hasn’t had an inventory increase this large since 2008. And still in both markets, prices are increasing. 5 of 15: In 2020, new-construction permits were down 13% in DC and New York, 40% in LA, 48% in Chicago, 50% in Seattle, 79% in San Francisco. Permits were up 25% in Miami, 56% in Vegas, 96% in Greenville, 122% in Detroit, 246% in Knoxville. 6 of 15: Lumber prices are up 300%. 7 of 15: In Redfin’s annual survey of nearly 2,000 homebuyers, 63% reported having bid on a home they hadn’t seen in person. 8 of 15: In an April survey of 600 Redfin.com users who had relocated in the past year, about two thirds of the people who moved got a house the same size or bigger, but about the same proportion, two thirds, spent the same or less on housing. 9 of 15: Even though most of the people who moved got a bigger home, 78% reported having the same or more disposable income after their move. Idaho home prices could triple and still seem affordable to a Californian. 10 of 15: For low-tax states, 4 people move in for every 1 who leaves. For Texas, this ratio is 5:1; for Florida, 7:1. Cites & states have no leverage to raise taxes, after many promised new money for social justice; the federal government will have to fund long-term investments. 11 of 15: This migration to lower-cost areas may lead to lower workforce participation. For many families @Redfin has relocated, the money saved on housing costs lets one parent stop working. A wave of Redfin customers are retiring early. 12 of 15: Lenders are calling employers to confirm that the homebuyer will have permission to work remotely when the pandemic ends. Rates are lower for loans on primary residences, and the lender also wants to make sure the borrower actually plans to work after getting the loan. 13 of 15: The average housing budget for out-of-towners moving to Nashville was $720K, ~50% higher than locals’ $485K budget. It used to be coastal elites who worried that every adult in the family had to win a career lottery, just to afford a home. Now that feeling may spread. 14 of 15: it’s not just income that’s k-shaped, but mobility. 90% of people earning $100,000+ per year expect to be able to work virtually, compared to 10% of those earning $40,000 or less per year. The folks who need low-cost housing the most have the least flexibility to move. 15 of 15: an investor recently said, with an ancient touch of awe but also greed, that one source of America’s miraculous economic recovery was the bounty of “the land itself.” We have more room to grow than we ever imagined. We just have to make sure that benefits everyone. https://www.businessinsider.com/hous...eo-2021-5?op=1

Thanks for sharing these statistics. It was very interesting.

[24601NoMore]

Quote:

Originally Posted by Jerry1 Not sure why you put MI in the same category as the other three. While our Governor is made a name for herself nationally, our taxes are not bad at all. Certainly not in the league of the other three. This article puts us closer to the middle of the pack. https://wallethub.com/edu/best-worst...-taxpayer/2416 Plus, my personal opinion is that fresh water is going to become more and more valuable. Hail to the Great Lake State! Don’t get me wrong, I’m no MI fanboy, but my family is here and I find no problem living well in retirement here. FWIW, I just over $4K a year in taxes on my house which has a market value around $275K. A lot of that is our school district which is one of the better districts in the state.

I put MI in the same list as the other high property tax states not just because of the tax RATE, but because of average total property taxes paid by homeowners which is largely dependent on what the house is valued by the State at -not what you paid for it or what you think it's currently worth.

A great example is California. On the list you referenced, CA is actually "less" than MI on RATE but as we all know, it's ridiculously high on "average" taxes actually paid - because many houses in CA are insanely expensive and valued as such by the state.

Regardless of what Wallethub and others may think, the average home VALUATION (tax base) in MI is a lot higher than in many other states. I have a good friend who lives in the Denver area in a nearly 5,000 sq ft house. (Why, I have no idea, but that's what she has). Her property taxes are in the $2K/yr range IIRC. Our house is considerably smaller than that and we're at ~$9K. Because it's not just the tax rate, but the "State Equalized Value" or valuation that also is a big part of determining total property taxes.

I think most would agree that $9K+ on a not that "fancy" of a house in INSANE, and a big impediment to ER. Sure, we could find another house (I personally prefer TN with it's incredibly low by comparison tax rates) but there just aren't any out there to buy that are even remotely close to what we'd be looking for in terms of privacy, floorplan, nearby amenities including good healthcare, parks & trails, etc. We've been looking for a whole lot of years now, even before the market going totally crazy as it's been in the past several months.

[Nick12]

Quote:

Originally Posted by Jerry1 Not sure why you put MI in the same category as the other three. While our Governor is made a name for herself nationally, our taxes are not bad at all. Certainly not in the league of the other three. This article puts us closer to the middle of the pack. https://wallethub.com/edu/best-worst...-taxpayer/2416 Plus, my personal opinion is that fresh water is going to become more and more valuable. Hail to the Great Lake State! Don’t get me wrong, I’m no MI fanboy, but my family is here and I find no problem living well in retirement here. FWIW, I just over $4K a year in taxes on my house which has a market value around $275K. A lot of that is our school district which is one of the better districts in the state.

No wonder why people flock to parts of FL. A home valued at $280K and property taxes are $1.4K per year and no state income tax.

[FlaGator]

Quote:

Originally Posted by Nick12 No wonder why people flock to parts of FL. A home valued at $280K and property taxes are $1.4K per year and no state income tax.

I’d like to know the FL county where taxes are 0.5% for a new purchase.

Bought several years ago, have a homestead and/or other exemptions, J can believe it.

I’m in one of the lowest property tax rate counties at ~1%. Broward was about 2% when I bailed, many others in broadly considered attractive places are similar.

Enlighten me, please. I like to move to a warmer part of the state in a few years