Real Estate Crash thread

[Hugh Conway]

Even if rates continue to decrease, they just can't get much lower: mathematically, when you're already at 3-4%, it just can't get a whole lot cheaper.

negative interest rates: http://snbchf.com/wp-content/uploads...-Interests.pdf

negative real interest rates: see China currently.

[Benny Profane]

Why "ponzi scheme" - ?

Even if rates continue to decrease, they just can't get much lower: mathematically, when you're already at 3-4%, it just can't get a whole lot cheaper.

If you're able to buy, and interested in buying, the housing market can't get a whole lot better than it has been for the past 6-12 months. Rates are at or near all-time lows. Prices seem to be on the upswing, so current buyers probably missed the "bottom" of the market.

It's a trap right now. Suppose you're seduced into buying some overpriced crap because it's so "affordable" with no money down and low rates. Fine. FF to ten years from now when you want to sell, and interest rates are normal at 6% and money is harder to get. Hope you can breathe underwater. Or bring whatever savings you have to the table just to close. Hasn't anybody learned that RE can go down in value?

[El Chupacabra]

negative interest rates: http://snbchf.com/wp-content/uploads...-Interests.pdf

negative real interest rates: see China currently.

How does that work? (bank "loans" me $, but it's actually going to accrue interest?)

[4matic]

How does that work? (bank "loans" me $, but it's actually going to accrue interest?)

Japan has had negative actual interest rates in the past. It's like a checking account that you pay to have money in. It's safe but costs you money. Switzerland is trying to fight a rising currency like most Central Banks.

[El Chupacabra]

It's a trap right now. Suppose you're seduced into buying some overpriced crap because it's so "affordable" with no money down and low rates. Fine. FF to ten years from now when you want to sell, and interest rates are normal at 6% and money is harder to get. Hope you can breathe underwater. Or bring whatever savings you have to the table just to close. Hasn't anybody learned that RE can go down in value?

I have to live somewhere, and I'm in the camp of "I'd rather own than pay rent."

Real estate can decrease in value, but generally, it increases over time. Savings have to go somewhere; everywhere you can think of putting $ carries with it a degree of risk, if you want to beat inflation.

[H0G]

Waiting to find a place before I put my house on the market here in North Metro Denver. I thought I would be lucky to get $230k late last year, but now the comps are almost $250k!!! Everything is under contract in this neighborhood. I am seriously considering FSBOing even though I'm an agent.

Lost 2 homes so far. Bid $15k over asking on 1 and $10k under on a beat up HUD home. The winner paid full price minus commissions. Bidding on another HUD today. Fingers crossed as the wife is already emotionally attached. . But after the last two, her expectations are low.

[4matic]

I am seriously considering FSBOing even though I'm an agent.
.

Why wouldn't you? You could still list it on MLS.,

[Benny Profane]

I have to live somewhere, and I'm in the camp of "I'd rather own than pay rent."

Real estate can decrease in value, but generally, it increases over time. Savings have to go somewhere; everywhere you can think of putting $ carries with it a degree of risk, if you want to beat inflation.

I understand, but, I just think you can do much better with your money these days in much more liquid investments, and just rent until sanity returns to the market. You also don't have that ball and chain.

[H0G]

Why wouldn't you? You could still list it on MLS.,

Managing broker wants 25% of a "normal commission," from the selling end, and I would have to pay the selling agent for bringing the buyer.

[cramer]

Because you ended up buying right which, after all, is timing and luck. Had you bought wrong you'd be getting raped in other ways.

Valid point. It pretty much was luck, well and the government offering you a down payment. Thats what forced the timing. I bet on things being on the bottom and won. Now if i could take some of this luck to the casino, i'd be really happy, hehe.

[4matic]

Managing broker wants 25% of a "normal commission," from the selling end, and I would have to pay the selling agent for bringing the buyer.

I was going to do that on my fsbo but being that it was an entry level home I figured every buyer would have an agent. I was never contacted directly by an individual buyer. Always an agent. You'll get it done.

[Mazderati]

Anyone checked into assumable mortgages, FHA or otherwise? Seems like a viable method of mitigating the effects of an increasing interest rate.

[liv2ski]

Only available on FHA and VA loans. Buyers will obviously need the cash difference between the assumable 1st TD loan balance and the sales price or be able to get a 2nd TD.

[reganized]

Just inked the P&S today. Off market property that my wife heard the owners might be interested in selling. She heard about it on Thursday. We saw it on Thursday night, shook on a price Thursday night, completed inspection on Friday. Inked P&S today!

They had a dumpster delivered on Friday and their phone has been ringing off the hook with people begging to buy it. They signed a P&S Agreement on their new house on Wednesday so we caught it just right.

I'm pessimistic on the whole ponzi scheme but we have no intentions of ever selling and a great interest rate.

[schuss]

Just inked the P&S today. Off market property that my wife heard the owners might be interested in selling. She heard about it on Thursday. We saw it on Thursday night, shook on a price Thursday night, completed inspection on Friday. Inked P&S today!

They had a dumpster delivered on Friday and their phone has been ringing off the hook with people begging to buy it. They signed a P&S Agreement on their new house on Wednesday so we caught it just right.

I'm pessimistic on the whole ponzi scheme but we have no intentions of ever selling and a great interest rate.

That's the thing - if you're ok with owning the property for 30+ years at the payments you locked in, it's a winner no matter what.

[Mazderati]

Congrats, reganized.

Went to an open house today. On the market for two days before the open house. Had five offers before the showing even started. I bet there were 30 other people in and out in the two minutes or so I was there.

Here is the trend of the local price per square foot. I'd hazard a guess next month will show an even higher number.




The last two places I've submitted offers went for $34k and $21k over asking. Another place on the radar was under contract in less than a day with a closing in two weeks so you know that's a cash sale. It's good to be a seller.

[4matic]

Section 1 repairs came back at $4100 on my sale. $3k in dry rot from copper/galvanized reaction and a window sill. Termites weren't noted last summer but no big deal. Surprised the buyer wants me to fix them but it's all to bring the comp in higher. I really don't mind doing the work in case this deal falls through I know it's fixed. The bathtub fixtures were crap anyway.

[sfotex]

Our house has been on the market for about a month here - median sized/median priced for the area/county, new paint, kitchen, etc. Nice landscaping, great location/neighborhood/schools. Priced at 'market' - so far we've had 4 people look at it.... Listed with a good realtor/MLS, etc. I keep hearing about low inventory, stuff is heating up, etc. but it seems like people are looking for low end stuff (rentals?) or high end nice stuff (got hammered the hardest?) . I see a lot of people are dumping their prices down after a few weeks on the market, or I suspect just taking it off the market. Maybe just fishing?

I just get the feeling the real estate market hasn't recovered and there's artificial low inventory because of the lack of new construction/people are still flat/under water on their houses and aren't selling....

[El Chupacabra]

Our house has been on the market for about a month here .... Priced at 'market' - so far we've had 4 people look at it....

4 showings over 1 month seems very low to me, but IDK what the SLC market is like, and particularly, for your neighborhood.

Have you done your own searches for comps for your house? i.e., is your house priced where it should be for the location, size, features, etc.? Your realtor should provide you with a list of comps for (a) what's on the market that is similar to your house, and (b) what has sold in the last 3-6 months that is similar to your house.

[sfotex]

4 showings over 1 month seems very low to me, but IDK what the SLC market is like, and particularly, for your neighborhood.

Have you done your own searches for comps for your house? i.e., is your house priced where it should be for the location, size, features, etc.? Your realtor should provide you with a list of comps for (a) what's on the market that is similar to your house, and (b) what has sold in the last 3-6 months that is similar to your house.

Been eyeing the comps, we could maybe come down 5% on the listing (but the other comps are on busier streets/crappier condition/worse locations), but if ~$10k is a barrier to people looking at a house in 'hot' market I gotta call BS. My point more is the hype doesn't seem to live up to reality. We're getting tons of 'articles' like this in Salt Lake:

http://www.sltrib.com/sltrib/money/5...-salt.html.csp

[MontuckyFried]

It certainly seems to be dependent on your local markets. Where I'm at, inventory has pretty much disappeared, prices seem to have shot up about 30% since we first bought in the area last November, and things are starting to move quite quickly.

We are so fortunate that we bought when we did, because in my neighborhood there were only 3 homes available that we were seriously interested in. We bought one of them, and the other 2 ended up closing within a week or two of ours. It's only been a few weeks, and seems we've already been priced out of our own neighborhood. Getting ridiculous. Tons of new construction in the area this summer. Hope we're not headed into another bubble so soon!

[skier666]

After around a 2 month process of gathering all my DNA for a San Francisco REFI, all docs signed and scheduled to record tomorrow. Rates have gone down during my process by about .2% but I really don't think I have the patience to start with a new lender anyway. The house was appraised 6.2% higher than when we purchased on September 20th, 2012. Crazy.

[sfotex]

It certainly seems to be dependent on your local markets. Where I'm at, inventory has pretty much disappeared, prices seem to have shot up about 30% since we first bought in the area last November, and things are starting to move quite quickly.

...... Hope we're not headed into another bubble so soon!

If it looks like a bubble and smells like a bubble.....

[4matic]

After around a 2 month process of gathering all my DNA for a San Francisco REFI, all docs signed and scheduled to record tomorrow. Rates have gone down during my process by about .2% but I really don't think I have the patience to start with a new lender anyway. The house was appraised 6.2% higher than when we purchased on September 20th, 2012. Crazy.

That .2% is gone today and more.

If it looks like a bubble and smells like a bubble.....

I just don't think you can have a true bubble without more supply.

[sfotex]

That .2% is gone today and more.




I just don't think you can have a true bubble without more supply.

Agreed, maybe 'micro' bubble is a better term.

Thought on the housing market - low interest rates are going to appeal to those with a tight budget (lower end homes/1st time buyers) and people buying high price homes (California, etc. and high end homes). For stuff in the middle it doesn't matter as much (and these people probably are already in a home..) Add some low inventory and things get interesting.