Home prices getting interesting, what price are homes in your neighborhood?

[clifp]

On the accuracy of Zillow.
I'm getting mortgages on three rental properties in Vegas before rates go up (2.875 15 year, rental rates are 50-100 basis higher than owner-occupied.)

All properties are in working to middle class neighborhoods, three different appraisers
House 1 Zillow estimate $357,600 Appraiser 357.000
House 2 Zillow 320,000 Appraiser $302,000
House 3. Zillow 320,000 Appraiser $315,000

So Zillow was a bit high, but overall was awfully close, an average of 2.3%

Back in May, I refinanced my Honolulu house Zilliow had it at 1.4M, but the appraiser said it was only worth $1.2M Zillow says it closer to $1.5 million now.

 

[schenbew]

Increasing Household Formation Driving Home Demand

Why are home prices up so much? Covid? Interest rates? Stock market?

Blogger Bill McBride has done some great analysis on this. Bottom-line: increasing household formation. Here's his post from Sep 2021 on the subject:


https://calculatedrisk.substack.com/p/household-formation-drives-housing


If you're interested in real estate, the Calculated Risk blog is a phenomenal resource to follow.

 

[Bamaman]

Why are home prices up so much? Covid? Interest rates? Stock market?

Maybe the millennials are getting tired of living in their parents' basements. It's the young adults that are mostly driving the retail market.

Rentals have gone up in price to where in many places it's just as cheap to live in an entry level home.

There is also a migration going on in this country with people moving to different cities and states. Our local job economy is so hot with 2000 incoming FBI employees, 4000 Mazda-Toyota employees and 500 engineers designing a new generation missile system.

With the current interest rates, anyone that's going to buy needs to do it now. And too many "nows" at one time have driven demand to an all time high.

I would be hesitant to build a new home today. Increasing labor costs and the unavailability of many building supplies have also driven the building costs much higher. We've seen $250-$450K homes not to be a great value. But if you step up to the $600-800K existing homes, you'll be in 5,000+ square feet in a relative bargain.

 

[daylatedollarshort]

Home price are up by $1M+ in our neighborhood since we retired (Bay Area suburbs) due to in part to the work at home movement. Families are moving out of the city but many are just moving to the suburbs.

With Prop 13 it makes more sense to rent than sell. We've thought about downsizing and renting out the house, but since everything is up here there is really no place cheaper to move to without moving outside the Bay Area. Smaller homes are even more expensive per square foot, presumably because they are more affordable and have a larger number of potential buyers. We really like the weather, parks, theater scene and all the things to do here. It has been a great place to be retired, so we'll probably just stay put for now. It can actually be pretty inexpensive to live here if you don't have to pay a lot for housing or property taxes.

 

[ExFlyBoy5]

Maybe the millennials are getting tired of living in their parents' basements. It's the young adults that are mostly driving the retail market.

You do know that the "millennials" you speak of are getting close to 40 years old (or 30s for those born in the later years) and make up over 40% of the workforce, right?

 

[Slater]

same here in san diego....
my gal brought to my attention today the house that I sold about 5 years ago for $450k is valued @ $770k...

 

[cyber888]

Here in NC - A single-detached Townhouse 4br in my subdivision was selling for $370K in 2021. Yesterday, Feb. 8, 2022, exactly the same model and size, had a pending offer for $460K .. that's a $90K upside for exactly the same home. The developer is raking in money. My custom-made house was around $380K-$390K in Zillows pre-pandemic, and last year (2021) my neighbor's house (comparable to mine) sold for $535K. Today, I'm seeing a house in a neighboring subdivision selling at $699K and some at just a tad below $600K. I suppose custom-made homes in my area is moving to the $600 range.

 

[latexman]

Around here, $230/sq. ft.

 

[Surewhitey]

Had to go 5 miles out as there's nothing, not pending. Our 50's "low rent district" neighborhood is $400m to $1.2mm when there is something. On average $350-400/sq ft. On the "other side of the lake" I've seen as high as $18mm, but many $1-3mm

Zillow is pretty accurate for our home...

 

[laurence]

You do know that the "millennials" you speak of are getting close to 40 years old (or 30s for those born in the later years) and make up over 40% of the workforce, right?

I have a cranky buddy who complains about millennials and I'm like, "Dude, you are 43" Lol.

 

[ExFlyBoy5]

I have a cranky buddy who complains about millennials and I'm like, "Dude, you are 43" Lol.

I recall talking to a young fella at a bar a few years ago. Somehow we got to talking about millennials (of which he was a cohort) and the "participation trophy" came up. He made an excellent point in that it wasn't HIS generation who decided to give out those "awards" and to blame Gen X. I couldn't really find an error in his logic.

As to home prices, I live in the city limits of moderate sized city of a midwestern state but are in a fairly rural area. The house prices vary GREATLY since there are few comparables in the immediate areas. Zillow and Realtor are distinctly different in their values...differing by nearly 100K.

 

[tmm99]

I live in Ontario, Canada, and the home prices were going up a lot even before the pandemic, but the situation has escalated since the beginning of the pandemic (Over 30% increase in prices in the last year alone in my area). This is obviously not sustainable, and the younger generations are totally out of the game at this point... We will see what happens when the government starts raising the interest rate this year... Something has to happen to stop this nonsense IMO.

 

[Ian S]

We bought in May 2019 in Sedona, AZ. Here, it's all about the views and our home is nicely located for that. We have a nice neighborhood of older (80's to 00's) well maintained homes and nothing cookie cutter. Based on Zillow, the home has appreciated over 70% in that short timeframe. Of course this is our retirement home and we don't plan to move until something like health forces us to.

 

[wildsun]

Portland Oregon, 2 miles from Downtown

Our house is currently worth $1.1 million.

Houses in the neighborhood range from about $500k to occassionally over $5 million.

I would say the average price is about $1.3 million. Appreciation in the is said to be about 9%/year

 

[Paulz]

Virginia, suburb roughly 30-35 miles out of DC. Bought our house for $650k in 2009 and just sold it for $1.4m. Townhouses are seeing similar spreads of $350-$400k now selling for $650k-$700k. Seems the only folks not getting the appreciation are the folks in condos.

 

[GaryInCO]

We built our house in 1990 for $270k -- $570k in current $$. In the last 5 years I've put over $100k into it, and other improvements before that. So I'm into it for at least $750k in 2022 dollars. Zillow says it's currently worth $850k. So in reality, in constant dollars, it's barely appreciated at all, about 0.6% per year. And if I sold it, I'd owe cap gains taxes. I bought out my ex's half 10 years ago when the house was worth $550k so even with the $250k exemption I'd owe cap gains on at least $50k. On the bright side, in 10 years my house has appreciated more than I paid my ex for her half.

That's for a large custom lakefront home in a desirable and booming area of Colorado. Lakefront houses in the neighborhood are in the $900k - $1.2M range, though the house next door just sold for $2M, nearly double what I expected. (It was an unusual situation and most buyers would not have paid that much. Zillow valued it at $1.2M before the sale.) Houses around the tonier lake 1/2 mi south are $1M - $2M. Go a block or two away from the lake and prices drop to the $400k-$750k range.

 

[meleana]

We live in the Lakes Region of NH. Where we are is a mish mosh of trashy bungalows in a honky tonk area and multimillion dollar homes - mostly lakefront- owned by a lot of rich and even famous folks.

We are part of a small city but are separated from it by a bay- which is the reservoir for the city. So we don’t really feel like part of it. In fact, in the 90’s I hear some state reps tried to have it secede from the city but were unsuccessful.

Our 1100 square foot cookie cutter home with a full walk out basement and small one car garage almost looks like a manufactured home but it’s not. It’s on a teeny, tiny lot as well in an HOA community of 85 homes. No views really. Within walking distance to the big lake and public beach and boardwalk.very touristy and busy. But also somewhat rural ,but every inch of land being taken up. We’re going to lose a gorgeous view when we pull out of our road due to town homes being built.

It was a new build in 2019 that started at $249,000 and we closed at $274,400. We put maybe $25,000 more into it mostly on basic, practical things you wouldn’t.notice like a whole house generator and a radon system, light fixtures, some decor, etc. etc. We used the builders realtor for everything and we didn’t bother with a buyers realtor. ( we did hire an atty for the contract and closing despite it not being required here.)

Redfin shows it as worth $340,000 - $380,000 and Zillow and Trulia have it at $400,000.

Compare that with our totally remodeled 2600 square foot family home with a huge 2 car garage on 10 1/2 wooded acres with rock walls, a stream, a bridge, etc. that we sold in Upstate NY in Sept 2019 for $317,000- just had one offer. (we listed it at $319,000. Realtor wanted us to list it at $340,00 and we thought that was too high. We interviewed several realtors). Zillow and Trulia have it worth $457,800 and Redfin has it at $463,600.

As far as NH goes, there are barely any homes for sale in the entire state! I think something like 600 total! Prices are outrageous and good luck even finding affordable rentals if you can find them at all. I feel for our 34 year old son who probably will never be able to buy an affordable condo in the town he’s in. There’s zero homes or condos for sale there or in the close surrounding area.

 

[Helen]

Our nextdoor neighbor's and the house across the street went on the market last weekend. Both had pending signs within a few days. Both houses were listed for $800k. We are five miles from downtown Portland, OR.

 

[BarbWire]

Santa Fe, NM -- where I have been trying to buy a 2/2 or 3/2, about 1800 ft^2 with a garage, on the more desirable East side of town, since 2019.

2019: visited several times, working with a great realtor. What I wanted was about $300/sq ft and went under contract within 72 hours. So, I decided to spend spring of 2020 there to find a house and strike within 24 hours. Oops --Covid. In four months we saw one house -- with severe problems -- at $275/sq ft, which was high by historical standards. I left my 4-month STR in May and from a distance watched the market for 2020 very slowly come back to life. My realtor was inundated with calls from NY and CA and MA and WA -- potential clients all wanting to buy houses for cash from a distance with no contingencies.

2021: the frenzy really began. Prices were up about 20% 2020 over 2019, and again 20% 2021 over 2020...and under contract in 1 day. Facetime showings, bidding wars, waiving all inspections...and cash. I was not there, having hunkered down from Covid in a TX apartment near friends in fall 2020. Fall of 2021 there were four homes in Santa Fe that fit my bill -- all under contract within 24 hours in bidding wars. Avg'd about $375/sqft.

January 2022: returned to Santa Fe for another three month STR. Realtor and I agreed that I would be facing $400-$450 /sq ft for what I want....if it ever came on the market.

In the six weeks I have been here there has been one house to see, asking $490/sqft and under contract in 24 hours. Allegedly a 2/2, the second bed and bath were in a separate building across a courtyard! Two more listings were out of my range at $550 and $650/sq ft.

There are fewer than 200 houses available in Santa Fe County -- and back in 2017/2018 a "balanced market" had 2,000. Nearly 800 realtors and their many clients are chasing those houses. My realtor, who has many clients looking, has had no income since October. She has no listings, and none of her clients have been able to buy.

I will give it another month (my STR obligation) and then I will probably become a van-lifer/nomad again for 5 years. I never thought that selling in 2018 to travel for a year or two would put me in this kind of predicament when ready to settle down and buy a home again.

 

[Steevo]

Whaaaaat?

Purchased our retirement home in 2007 for $280k, in a neighborhood of similarly sized and priced homes in an Eastern Idaho town of about 80k population.
Current market value is over $600k, and average price for the neighborhood is mid $600k range with a few up into the low $1M range now. Our sleepy burg is the fastest growing city in Idaho now.
Homes are selling in a day or two, some in just hours.

 

[MC Rider]

We live in the Lakes Region of NH. Where we are is a mish mosh of trashy bungalows in a honky tonk area and multimillion dollar homes - mostly lakefront- owned by a lot of rich and even famous folks....

We are part of a small city but are separated from it by a bay- which is the reservoir for the city. So we don’t really feel like part of it. In fact, in the 90’s I hear some state reps tried to have it secede from the city but were unsuccessful. ....

No views really. Within walking distance to the big lake and public beach and boardwalk.very touristy and busy. But also somewhat rural ,but every inch of land being taken up....................

Love your neighborhood description.

 

[ProspectiveBum]

A house in my subdivision sold a few weeks ago for $1.6M. We paid $390k for this place back in 1999. These are non-descript So Cal stucco tract homes. Less than 3000 sf, and smallish lots. We’re in an upper-middle-class community with good schools, but still…. It’s absurd!

We like our neighborhood, and have no plans to move, so we’re just watching this as relatively detached spectators. Not sure how our kids will be able to afford to live in the area. Most likely, they won’t.

 

[Bamaman]

All of the prices discussed here makes me proud my ancestors chose to move to this ultra LCOL region when it was the edge of the frontier.

I understand supply and demand, but I'm not about to pay 3 times what the cost of building supplies and labor are. I call $450 a square foot to be a demand driven real estate market.

Despite our county being one of the faster growing cities in the country, our new homes are running about $155 per square feet. 1500 square foot brick starter homes advertise starting @ $200K, which means they average $250K after options. Next size up is an 1800 square foot home with triple car garages @ $270K--which means they'll cost $300K after options. They're nice, but the yards are so small that you'd know every time the next door neighbor flushes the toilet. Right now, 4,900 new homes are in the process of construction.

We bought our all brick 3900 square foot home in a really nice neighborhood with a 1 acre yard for $89 a square foot two years ago. The house has a very elaborate roof design, and it's quite beautiful. Needless to say, we could make good money selling it, but my wife and I have no more moves left in us.

Our public schools have the children of rocket scientists and thousands of engineers enrolled, and the kids are as smart as their parents. The school board runs like it should--no complaints from us.

Our low cost of living is what's allowed me to purchase my sister's half of our inherited lake house. The property's been in my family 75 years. We have a 3/2 home with a 36' screen porch with a 7 mile water view to the sunset. Our double boathouse is 50' from our front door, and it's like living on Golden Pond--except for all the McMansions around us. We're just 6 miles to a town of 170,000 people--with shopping and great restaurants. We're perhaps the best large smallmouth and catfish lake in the U.S. too.

 

[Chuckanut]

If my place burnt to the ground tomorrow and I had the option of taking the money and rebuilding, or keeping the insurance money and selling the lot. I think I would do the later. It's not just the cost of housing, but all the other costs that contribute to that high cost of living. Taxes, maintenance, insurance, repairs, etc. are all up, Up and UP.

 

[azxracer]

85254 (Scottsdale AZ) A lot of the homes are 30 - 60 yrs old. If they have not been updated ever (highly unlikely) figure $300 per sq ft. Updated in the last 15 -20 yrs, figure $400 per sq ft (plus or minus). If you have a home that is updated in the last 2 yrs, has a pool (most homes) and bit of land ( 1/3 acre) expect $5-600 per sq ft. Our 45 yr old house with a big update, no pool but new landscaping, and 16,500 sq ft lot sold for $575 per sq ft (2000 sq ft house) last yr. Probably be even more this yr.