The housing market in our pandemic era

[kevink]

Excellent, substantive article in Forbes yesterday on what look like lasting real estate trends due to the combination of the pandemic with demographic trends:

https://www.forbes.com/sites/peterta.../#7bd253f261fe

This should be of interest to many here - both those contemplating a move and those who plan to stay put and wonder what the future holds for real estate values.

We live in Tucson and have certainly seen the effect of folks fleeing the West Coast. Looks like the exodus is still in its early stage.

[ShokWaveRider]

We get our fair share of those from the North East here in FLA too.

[stepford]

Well, they seem to think those bad blue states out west are primed to empty out. Fortunately, that's where I'm most interested in buying.

[daylatedollarshort]

Maybe all real estate is local. Home prices in the Bay Area were up 18.7% this past year. Strange times.

[RobbieB]

Can't be. I keep hearing of the CA exodus.

[Teacher Terry]

I really don’t see the West coast getting empty. I have lived all over the country and no way do I want to go back to the Midwest or East coast.

[Freedom56]

The home next door sold last month for $1,0060,000 with multiple offers and at $61K over asking price. The offers started coming 24 hours after listing. The "for sale" sign didn't even go up. The previous owners, our former neighbors, owed $977K on the property that they purchased in 2000 for $320K. They moved out of state and are renting now. Two other people on our street did the same. They all have one thing in common. They used their home as an ATM machine to support lifestyles they could otherwise never afford. The debt wall hit them all when they retired with much lower income. Yes the media reports that people are leaving California but what they don't mention these are people with lower income or people who no longer can pay their mortgage. They are being replaced by more affluent people from out of state. If that wasn't the case, real estate prices would be crashing but they continue to rise. The agent that sold their home approached us to see if we would be interested in selling. She said we could easily get $1.3-1.4M (our home is larger) or more if we waited for a higher offer. We said no, it costs us just $900 per month in property taxes, insurance, maintenance, utilities, cable, and internet to stay in our home. California is actually inexpensive for those who live responsibly and pay off their home. Our 2 bedroom condo in Florida now costs us more to maintain than our 5 bedroom home in Southern California.

[Gumby]

The real estate market seems pretty robust in my coastal Connecticut town. Three houses on my street just sold this summer. All above asking price, after bidding wars. All to couples moving out of Brooklyn.

[MichaelB]

A breakdown of US population by 5 year age groups shows the two largest cohorts are 25-29 and 30-34. The fourth cohort is 35-39. These are large “first home buying” age groups. This age distribution, combined with very low mortgage rates, are very bullish for the housing market (and the economy overall).

[daylatedollarshort]

Quote:

Originally Posted by Freedom56 Yes the media reports that people are leaving California but what they don't mention these are people with lower income or people who no longer can pay their mortgage. They are being replaced by more affluent people from out of state. If that wasn't the case, real estate prices would be crashing but they continue to rise.

I have read that it is households making under $100K who are leaving. I am not sure why choice of state has to be such a divisive issue, or why it is important for some journalists who don't live here and aren't familiar with the economy to portray a false narrative of all the wealthy people leaving. As you said, if there was a wealth exodus, the homes already prices at $1M wouldn't be going up even more in price. Many of our adult kids' friends have left simply because they can't afford housing.

[Freedom56]

Quote:

Originally Posted by daylatedollarshort I have read that is is households making under $100K who are leaving. I am not sure why choice of state has to be such a divisive issue, or why it is important for some journalists who don't live here and aren't familiar with the economy to portray a false narrative of all the wealthy people leaving. As you said, if there was a wealth exodus, the homes already prices at $1M wouldn't be going up even more in price. Many of our adult kids' friends have left simple because they can't afford housing.

Here are some facts per the article below:

California exports its poor to Texas, other states, while wealthier people move in

https://www.sacbee.com/news/californ...136478098.html

This has been going on for the past 30 years and property prices continue to climb. It's all about the weather, some of the best universities and hospital systems in the country.

[aaronc879]

I have lived in small town Wisconsin all of my 41 years and have never seen the RE market this hot. Nearly every house is selling immediately for full asking price. That just doesn't happen around here, or at least it didn't before.

[jrcunniff]

For several years now, I’ve been keeping an eye on Cape Cod realty, thinking of a potential retirement property. I’ve noticed in the last 6-8 months that there are fewer properties than normal, and they’re higher priced than they had been. I attributed it to Boston relo’s due to COVID and working from home.

I hadn’t realized it was a national trend until yesterday, when I was reading responses to a Twitter thread on housing shortages in Bozeman MT. (!) Replies in the thread indicated the same thing was happening in Idaho (Boise and Couer d’Alene), Utah, Colorado, etc. Here is a recent article about the situation in Montana.

https://www.distinctlymontana.com/wh...K0s0TfUVVZgQJ8

So I searched a bit, and found this thread. I guess it’s a seller’s market, which is somewhat surprising to me. Probably putting the search for a retirement home on hold for the moment.

[Poopycat]

Quote:

Originally Posted by stepford Well, they seem to think those bad blue states out west are primed to empty out. Fortunately, that's where I'm most interested in buying.

Me too! I hope everyone moves out of the west and prices drop way down so I can buy something at a discount

Unfortunately, even though those western markets are apparently not as hot right now, someone must be buying there because prices continue to rise in the areas where I’m most interested.

Hurry up, westerners! Move out quickly!

[Poopycat]

I do wonder whether it’s a seller’s market because of high demand or primarily because of short supply. Many people put off showing their homes because they didn’t want strangers wandering through their houses during COVID. As the virus becomes less of a factor, perhaps we will see more supply, which would make the markets a little more balanced for buyers.

I also think that at some point, maybe even in the next couple of years, those big-city markets will rise up again. Employers might tolerate more working from home right now, but there has been more than one company that initially embraced remote work years ago that changed course and demanded that workers come to the office. Some employers will continue to embrace remote work but many others will eventually expect their employees to return.

[RobbieB]

It's fast and furious here. A home close by was listed at $550,000, received 23 offers and sold at $635,000.

[W2R]

I'm just so glad that I bought my wonderful Dream Home back in 2015! The rate at which home prices are increasing around here is enough to make my eyes water.

Even with low interest rates, to me it seems like a miracle if first time home buyers can possibly afford even a "starter home".

When the pandemic first hit, I thought it would kill the real estate market. My (mistaken) reasoning was that nobody would want to buy a home that could have had someone with COVID living there. That turned out to not be a problem for local real estate sales.

[Chuckanut]

People predict a lot of stuff. Some of it comes true. Some of it doesn't.
Trends change. If there truly is an exodos from states like California, especially an exodus of the talented people in medicine, tech, etc. then I would expect to see housing prices fall. They might even reduce taxes and regulation. Maybe Californians will be able to buy goose patè again. Or maybe not.

The most powerful forces often come from what we don't see coming at all. At the January 2019 Davos Conference on the world economy there was little if any talk about corona virus. Very little. Almost none.

Check out the 8 Top Stories from Davos 2019. There is not a mention of Corona Virus.
https://www.weforum.org/agenda/2019/...om-davos-2019/

The real issues are: What unexpected thing will come out of nowhere and upset your plans? And how will you deal with it?

[tmm99]

A duplex in our city (it's called a semi-attached around here) in Ontario, Canada was sold for over 300K CAD the asking, after getting close to 60 offers. It got sold for around 800K CAD. Evidently, people in Toronto (which is about 2 hours away by car) are moving out of there as they can now work from home. I imagine the real estate in Toronto is a bust. Someone who goes there often said some areas of downtown looked like a ghost town. People here are worried that they are now priced out of the market.

[REWahoo]

Our zip code typically has 25+ single family homes listed for sale on Realtor.com, and 3 or 4 of those show as "pending", which I define as sold but not yet closed. Currently there are 10 listed and 7 show as pending. That level of demand is just nuts.