Start of the Real Estate slump?

[freedomatlast]

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.

 

[ShokWaveRider]

No slump in NE. FLA.

 

[JRon]

In South Dakota the news just reported that there are about 1/2 the homes on the market compared to a year ago, but more sales than a year ago so home selling has been hot, but should slow now due to low inventory.

 

[jkern]

Hot RE market here in the East Bay (SF).

 

[LRDave]

I agree with a couple of the sentiments in this thread regarding all the "We Buy Houses" signs and solicitations everywhere, in that it feels a little 2007ish.

 

[Markola]

One couple we know are a realtor and an appraiser in the Twin Cities of MN and they said they’ve never been so busy. Also, any plot of land within a quarter mile of the Mississippi River has a luxury rental apartment building going up, as does every light rail and express bus stop. All this during record low interest rates, enormous unemployment for many and working-and-schooling -from-home for many others. I wouldn’t want to try to predict anything or bet my dollars in that market.

 

[Spanky]

The market is still on fire in inland NorCal. I assume not so much down in 'Frisco though.

So are the houses.

 

[JoeWras]

Still hot in NC. Our neighborhood median has gone from 250K to 350K in 5 years.

Slight cracks are showing, however. Seeing more listings make it a day or two. For a while, listings were sucked up before they even hit market, or they were bid out in hours.

We are seeing a lot of layoffs in the area lately. Seems like a lot of the big companies held on for a while, and now are letting go. Let's see if this has an effect.

 

[Spanky]

The housing market is still hot because of the low mortgage rates.

 

[skipro33]

I'm still getting alerts from Redfin on potential home after I had it turned on for my purchase/sell recently. One popped up on my purchase street with a note I have not seen for a very long time. Short Sale.

Looks like they have been in 4.5 years. Listing plus Realtor fee about equals what they bought for. They will pull a little equity out but it won't be much. Depending I guess on the repair addendum

edit: Since it's a short sale they will be pulling zero equity out.

A short sale in real estate is when a financially distressed homeowner sells their property for less than the amount due on the mortgage. The buyer of the property is a third party (not the bank), and all proceeds from the sale go to the lender. The lender either forgives the difference or gets a deficiency judgment against the borrower requiring them to pay the lender all or part of the difference between the sale price and the original value of the mortgage. In some states, this difference must legally be forgiven in a short sale.

 

[Scrapr]

A short sale in real estate is when a financially distressed homeowner sells their property for less than the amount due on the mortgage. The buyer of the property is a third party (not the bank), and all proceeds from the sale go to the lender. The lender either forgives the difference or gets a deficiency judgment against the borrower requiring them to pay the lender all or part of the difference between the sale price and the original value of the mortgage. In some states, this difference must legally be forgiven in a short sale.

Yeah, i clarified in a later post. Buyer won't be pulling out any cash. So must have been a 100% loan (or close) roll the closing costs into the loan, miss some payments. Tadaa...short sale


This article shows 30 & 90 day late payments. Since there are foreclosure restrictions in place not many are happening. Year over year 90 day lates are up 1.9 million

https://www.blackknightinc.com/black-knights-first-look-at-august-2020-mortgage-data/

I talked with a developer/builder on Friday & he was thinking about not buying any more property. He's a small guy so no economy of scale. His company broke even in 2019. And I think he had 7 million in land loans out. Developers frequently use aggressive accounting so I take that comment with a grain of salt. He was thinking the risk reward was out of balance. Then I see the short sale

I'm not spooked yet....but

 

[Poopycat]

Initially, I was shocked by the number of “our location is hot” and “it’s a seller’s market” comments. How could that be in a pandemic with so many unemployed or struggling?

Then I remembered that I was an economics major all those years ago, and that price is a function of supply and demand. Demand may not have changed much, or may have even dropped since many do t want to move during a pandemic. But supply has also dropped for the same reason. I moved because I had to relocate for a job, but I think many people are putting off selling until we are in more stable times.

Anyway, selfishly, I’m hoping that the market in the areas I’m interested in drop off a cliff in 2022 when I’m ready to buy! I think they may, as we see people potentially have to sell their second home/vacation home, or possibly face foreclosure on a primary residence. I don’t want people to lose their primary homes, but I do t see how it can be avoided if the economy doesn’t go back to pre-COVID levels.

 

[Teacher Terry]

Northern Nevada is definitely not in a slump either.

 

[JoeWras]

Then I remembered that I was an economics major all those years ago, and that price is a function of supply and demand. Demand may not have changed much, or may have even dropped since many do t want to move during a pandemic. But supply has also dropped for the same reason.

Yep, and on top of that, there's the liquidity element which is necessary for large purchases. Consider loan money to be a necessary third party. That third party has plenty of supply at low prices.

 

[skipro33]

Yeah, i clarified in a later post. Buyer won't be pulling out any cash. So must have been a 100% loan (or close) roll the closing costs into the loan, miss some payments. Tadaa...short sale

I'm not spooked yet....but

A home across the road from mine (we are on 5 acre minimum and his backs up to open wild land of 100's of acres) was on a short sale. The realtor told me it could take years to sell. It sold in less than 6 months. The owners made zero payments and severely damaged the place as well as did zero upkeep. The pool was allowed to drain and it lifted and cracked for example. It had been sold to those owners for around $600,000 and the short sale sold for $425,000. I was darn near tempted myself to buy it, fix it up and flip it. I'm quite good with construction, have all the tools and skill. (I'm just not fast. Ha!) I'm glad I didn't. Talking to other contractors lately, no one can get materials. Another neighbor is getting a new concrete patio and cover added along with all sorts of grading, a small shop built, etc. The project is stalled on the concrete; no one can deliver concrete sooner than 3 weeks out. Until the pour, the job is on hold. Contractors are all busy as well. I tried to hire a plumber to relocate a propane gas line for a fire pit out back in order to overhaul some landscaping. Simply can not find anyone who will do this small job. I trenched the old line, trenched the new line. All I need is someone to swing the old line to the new line or cut-n-splice the old line to a new line.
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.

 

[skipro33]

Initially, I was shocked by the number of “our location is hot” and “it’s a seller’s market” comments. How could that be in a pandemic with so many unemployed or struggling?

Then I remembered that I was an economics major all those years ago, and that price is a function of supply and demand. Demand may not have changed much, or may have even dropped since many do t want to move during a pandemic. But supply has also dropped for the same reason. I moved because I had to relocate for a job, but I think many people are putting off selling until we are in more stable times.

Anyway, selfishly, I’m hoping that the market in the areas I’m interested in drop off a cliff in 2022 when I’m ready to buy! I think they may, as we see people potentially have to sell their second home/vacation home, or possibly face foreclosure on a primary residence. I don’t want people to lose their primary homes, but I do t see how it can be avoided if the economy doesn’t go back to pre-COVID levels.

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.

 

[cyber888]

I got a letter from a real estate company that said the want to buy my home now for $365k cash. 3 houses away from me sold for $402K w a much lower sq. Footage. A builder just advertised they will be constructing a new house for $450k with smaller sq.ft. In my section. Im in NC .. not selling below $450K

 

[Perryinva]

Central VA is a sellers market. No 100% gains in 2 year kind of stuff, but 10%/yr over the last 2, easy.

 

[cathy63]

Funny, I just read this article right before coming here and seeing this thread at the top of the list: San Diego Community News Group - The fall real estate market remains strong

In the 92115 zip-code, the median home price jumped to $649,000 with very little inventory of only 25 homes for sale. In the 92119, inventory of homes is even lower with only 16 homes for sale, less than one month’s supply and the median home price increased to an all-time high of $718,000! And finally in 92120, the median home price rose to a jaw dropping $812,500 with only 11 homes actively for sale.

These zip codes are inside the San Diego city limits, but inland, about 10 miles from the coast, and have mostly older single-family homes with yards.

 

[firemediceric]

Anyway, selfishly, I’m hoping that the market in the areas I’m interested in drop off a cliff in 2022 when I’m ready to buy! I think they may, as we see people potentially have to sell their second home/vacation home, or possibly face foreclosure on a primary residence. I don’t want people to lose their primary homes, but I do t see how it can be avoided if the economy doesn’t go back to pre-COVID levels.

Like you, I am selfish in this regard hoping for a housing price reset around the beginning of 2023. Probably just wishful thinking.
I've been renting for the past couple of years socking money away so as to be prepared to move out of state once I retire in a couple of more years. It is depressing to see my purchasing power, as well as selection, rapidly diminishing.

 

[pb4uski]

The residential real estate market has been really strong in Vermont.... lots of people moving in from out-of-state. End of our street sold recently in less than a month whereas 5 years ago when the previous owner sold it took 2 years. A friend recently moved back from California... he is tickled pink at the nice 1920s house he bought for $750k... says it would have cost $3.5m in California.

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.

 

[Chuckanut]

COVID means too many unknown people marching through your house, touching things, sneezing, etc. so owners may be sitting tight.

Then there are new building rules that require things like fire sprinkler systems that add costs. It’s to expensive to build starter homes. Starter homes are now older homes in less well located neighborhoods. What else is new?

 

[zedd]

My goodness! This is "flyover country", not California or Manhattan!

I smiled at that remark. Somebody's cow wandered into our yard this morning and I had to make several calls to neighbors find out who she belonged to. I think I'm in flyover country too.

Oh and yeah, the real estate market is hot here too.

 

[Retired Expat]

Can’t rely on Zillow

In the last couple of months we started receiving mailings from local outfits offering to buy our home for cash (HA!).

In the last 2 weeks we have gotten 3 calls from realtors checking if we were interested in selling our home and promising a fast, profitable sale due to the market.

The price on Zillow is up to IMHO a crazy amount

The last time all of these things happened in our area was 2007...

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.

 

[Koolau]

I smiled at that remark. Somebody's cow wandered into our yard this morning and I had to make several calls to neighbors find out who she belonged to. I think I'm in flyover country too.

Oh and yeah, the real estate market is hot here too.

We lived in a farm house back in the midwest for several years (didn't own the farm.) More times than I wish to recall, we had to chase a small heard of Charolais cattle back into their own "yard" and call the owner to fix the fence. More than once, on a dark night, we nearly hit black (angus?) on our narrow country road. THAT would ruin your day. Flyover country, indeed. Actually miss those days, the corn fields, the cattle and horses, etc. - once in a while.

DW keeps up on the markets back "home." They have been on a tear of late. Must be all them fancy rich folks movin' outta the Big City! YMMV