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Housing market is crazy

ponyo

ponyo

Lifer
Spent some time browsing Zillow looking at single family residential housing market in Austin, TX, and it's absolutely insane. Prices are bonkers and like every semi-desirable listings have bidding wars with multiple offers with deadline for bid entry. So I was curious and checked the listings where I live. Not the same multiple offers bidding wars but inventory is slim and almost every listing is under contract pretty much soon as it lists. And prices are way up.

It was eyeopening experience. Million dollar+ homes are still ok. But anything in the $400k-$800k ranges are being snapped up and bought like PS5 and GTX3070. Crazy demand and very limited supply.
 
It's kinda like that here, I've got to back off looking until late spring since all the decent ones in the price range I'm looking at are moving to "pending" in 1-7 days after being listed, and often going for over asking price by $10-40k, and I'm not looking to close until June.
 
ponyo said:
Spent some time browsing Zillow looking at single family residential housing market in Austin, TX, and it's absolutely insane. Prices are bonkers and like every semi-desirable listings have bidding wars with multiple offers with deadline for bid entry. So I was curious and checked the listings where I live. Not the same multiple offers bidding war but inventory is slim and almost every listing is under contract pretty much soon as it lists. And prices are way up.

It was eyeopening experience. Million dollar+ homes are still ok. But anything in the $400k-$800k ranges are being snapped up and bought like PS5 and GTX3070. Crazy demand and very limited supply.
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Sure - if you limit yourself to horrible places. Move a good 40+ miles away from the inner-city and there is plenty available for rock-bottom prices.

Austin is being taken-over by Californians. You can already tell it's going to be over-regulated and become the exact same thing that they tried to leave.

Houston and Dallas are much better - with better infrastructure, much more open and lots more suburbs at better prices.

Obviously COVID has proven that companies no longer give a shit for you to suffer through 2 hours of commuting to go to downtown locations. So why live near it?
 
ponyo said:
Spent some time browsing Zillow looking at single family residential housing market in Austin, TX, and it's absolutely insane. Prices are bonkers and like every semi-desirable listings have bidding wars with multiple offers with deadline for bid entry. So I was curious and checked the listings where I live. Not the same multiple offers bidding war but inventory is slim and almost every listing is under contract pretty much soon as it lists. And prices are way up.

It was eyeopening experience. Million dollar+ homes are still ok. But anything in the $400k-$800k ranges are being snapped up and bought like PS5 and GTX3070. Crazy demand and very limited supply.
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It's great in theory when your house is worth a fortune, but if you sell it you won't be able to buy another one and the property tax on the inflated values will be a massive pain in your ass every year.
 
My house has appreciated $80k in three years and I live 20 miles east of Dallas. The reality is it is the cheap money that’s driving the housing market and increase in prices.
 
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Midrange home prices are so crazy, I think it's better value to just bite the bullet and buy the million dollar home. You get lot more house for your money and you don't have to compete so hard with everyone else to buy a house.
 
It's been like that around my town this year too. I had a friend try to close on 3 houses before he could get one to stick. Listings would last a few hours to a few days before being put under contract.

There's an theory that COVID is driving a lot of people to move to more sparsely populated places. That's caused an influx of demand that's mixing with the cheaper mortgage rates and most markets are getting that boom of outside money + increased local demand. The moral of the story is....if you're going to play the real estate game and moving to an area that's on the upswing, you may be better off buying ANYTHING now near where you want to be...just so you can ride the appreciation wave and then change it up in 5 years. Otherwise, you're going to miss out and be paying even more once demand spikes everyone's home values.
 
I think the extreme low mortgage rate is playing a huge part in the run up pricing of RE. Chase is having (APY) 2.59% for 30 years and 2.16% for 15 years. Nothing this cheap for the last few decades, not years. Darn cheap indeed.

Will we get another huge bubble as we did in 08-09? Stay tuned.
 
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When the Fed and the Treasury infuse trillions proping up the markets. In turn that keeps interest rates in a free fall, it is all ripe for prices to skyrocket because of cheap money.

Heck I thought I got a good rate in November at 2.85 on a 30 year note. You can get a 30 year note for about 2.35 now.
 
The Jersey Burbs, Westchester and Connecticut burbs have been smoking hot since last summer. Bidding wars everywhere. Any good property went on the market mid to late week, had an open house on the weekend, best and finals were held Monday or Tuesday. Heard of multiple cases of people going 100K over asking on sub million dollar properties and still not winning.

The Manhattan rental market is a tenant's game now. Had some relatives move up near Columbia university. They negotiated the rent down and got 3 free months in a 14 month lease in a gorgeous door-manned building 2 bedroom unit. It's about time the Manhattan market corrected itself, it was getting crazy. Some people are taking advantage that always dreamed of living in Manhattan but just couldn't afford it, or taking advantage to upgrade to a bigger place than what they have now. Of course some landlords are holding out but a lot are seeing the writing on the wall and adjusting with demand.
 
s0me0nesmind1 said:
Christ, $425k for that little shithole?

They really have already fucked up Austin beyond repair...
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Welcome to Northeast housing prices. We hope you enjoy your stay...

$240/sq. ft. is at the higher end of reasonable here in Central MA which is ~1-1.5 hours west of Boston, but not terrible if you're in a good area (i.e. not farther west out in podunk country where there's really nothing but farmland). A few neighbors have sold their homes for $255/sq. ft; I bought mine in 2012 for $176/sq. ft. and that was a good price back then (cheapest house on the block).

It's both good and bad that I can't afford to buy a home in my own neighborhood. Needless to say, I'm staying put for a while.
 
Wreckem said:
When the Fed and the Treasury infuse trillions proping up the markets. In turn that keeps interest rates in a free fall, it is all ripe for prices to skyrocket because of cheap money.

Heck I thought I got a good rate in November at 2.85 on a 30 year note. You can get a 30 year note for about 2.35 now.
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Unfortunately, I can't qualify for traditional Fannie Mae/Freddie Mac backed bank mortgage because I technically don't have a job and income anymore. So the banks can't bundle my loan with others and sell it to Fannie or Freddie. It doesn't matter how high my credit score is or how much money or assets I have. The only mortgage loan I can qualify from the bank are portfolio loan which is mortgage loan the bank originates and actually keep on their book and not sell it off to Fannie/Freddie. But since the bank takes a risk by keeping my loan, the mortgage rate is way higher on portfolio loan than conventional Fed backed loan and most banks do not offer it. They don't want to deal with the headache involved in making such uncommon mortgage loan.

I can easily get pledged asset line loan from Interactive Brokers or Charles Schwab by pledging my stocks. And rates are really low at IB. Like 1% for $1 million loan. I could use that to buy the house for cash and then take out home equity line of credit or loan from a bank and payoff the pledged asset line balance. Or I could just buy the house with cash from my savings and then take out home equity line of credit/loan from a bank if I want. But the home equity loan/line will have higher interest rate than traditional conventional mortgage. This is one of the pitfalls of not having a job and income. This only matters for mortgage and nothing else. Doesn't affect car loans, boat loans, personal loans, etc. Only matters for conventional mortgage because the banks sell the loans to Fannie/Freddie and have to play by their rules. And Fannie/Freddie only want cookie cutter traditional borrower with a job.

I don't mind buying house for $500k cash. But I really don't want to tie up $1 million cash in a second home I might use couple times a year. But this crazy market is forcing my hand and I might have to pay $1 million cash if I want second home in or near Austin, TX.
 
ponyo said:
Midrange home prices are so crazy, I think it's better value to just bite the bullet and buy the million dollar home. You get lot more house for your money and you don't have to compete so hard with everyone else to buy a house.
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that's why i am thinking about something a little nicer

an old small house on a tiny town lot is selling for 200-250$k here

but for 600$k, there's a fancy 4000 sq ft house on 50 acres outside of town

600$k aint that bad when spread out over 30 years at minuscule interest rates
 
s0me0nesmind1 said:
Christ, $425k for that little shithole?

They really have already fucked up Austin beyond repair...
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Expensive and not worth the $425K price? Absolutely.

Shihole? Not at all. Not a bad looking house. Around here, it would be about $250K or so in a nice neighborhood with good school. I like the all wood/non carpet floor in the whole house. Can't stand carpet.
 
Svnla said:
Expensive and not worth the $425K price? Absolutely.

Shihole? Not at all. Not a bad looking house. Around here, it would be about $250K or so in a nice neighborhood with good school. I like the all wood/non carpet floor in the whole house. Can't stand carpet.
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Wood is great for 1-story homes. Horrible for 2nd story where you can hear loud creeks everytime anyone takes a step upstairs.
 
Well its a good thing there is no inflation. Can you imagine how high home prices would be? .....oh wait We are beyond inflation. We are in a bubble.

In the late 1970s we had a similar situation where home values doubled, tripled, quadrupled or more. The Fed jacked up the prime rate to 21% to crush the housing, food and commodity bubbles.

A 13% fixed rate home loan was not considered uncommon. High rates with the anticipation of lower rates in future gave rise to ARM loans, buydown loans and GPM/Step Rate mortgages...and a whole new world was opened up in the mortgage industry. I spent about 17 years servicing variable rate/ payment loans. I had to be an expert in deciphering paragraphs of mumbo jumbo as these documents were not really standardized until the late 1990s. Even then we still had garbage loans come in all the time with all sorts of caveats, clauses and special procedures for figuring rates and payments.
 
Torn Mind said:
Just what exactly are you looking for location-wise?
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I want to be in or around Austin, TX, area. I think Austin will be the next Silicon Valley or something like it. I think you'll see boom in Austin like we haven't seen in years. Tesla is building their Gigafactory right now in Austin and I 100% believe the area is going to blow up in the next 10-20 years. I watched Joe Rogan 3 hour interview with Elon Musk that was released earlier this week and Elon thinks Austin will have growth like we haven't seen in 50 years. He thinks the city and the area will explode as everyone moves there for jobs and opportunity. Joe Rogan thinks the same. I don't care about Joe's opinion since he's not really big job creator but Elon's comment has value. I'm visiting Austin next month to check out the area. I will check out Austin and Round Rock. I browsed Round Rock as well since Austin was so expensive and Round Rock isn't as crazy and prices are really reasonable. But I need to check out the areas in person myself so I can have better idea and understanding. Real estate is about location and growth. You have to follow the money.
 
s0me0nesmind1 said:
Christ, $425k for that little shithole?

They really have already fucked up Austin beyond repair...
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6,700 in property taxes at as assessed value of 284k. I guess it really depends on how much income tax you pay find the break-even point of having no income tax as being an actual benefit.

So when the gubment updates in the future....it's gonna be around 9k in taxes, maybe less if a principal residence?
 
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