Crazy Housing Market

[812scottj]

In a previous thread, mentioned that I’m moving to Salina, KS. I bought my house for $360k four years ago, and listed it today for $425k. Had six showings today and got offers for $425 and $432k already More showings tomorrow, so my realtor thinks the bidding to take it to $450k by tomorrow afternoon. Weird, wild stuff!

 

[812scottj]

I guess my whole house filtration system was a good investment after all!!

 

[gamecockcat]

It's pretty much the same in the Denver area. Any home worth having has multiple above asking price offers the first day. It's insane

 

[Lord Z]

In a previous thread, mentioned that I’m moving to Salina, KS. I bought my house for $360k four years ago, and listed it today for $425k. Had six showings today and got offers for $425 and $432k already More showings tomorrow, so my realtor thinks the bidding to take it to $450k by tomorrow afternoon. Weird, wild stuff!

You'll need the extra profit for your storm shelter in Salina, Kansas. Those F5's mean you get a new home every 5-6 years.

 

[812scottj]

My new house has a basement and a concrete safe room!

 

[812scottj]

I’m sure Denver is even crazier! I looked at jobs out there and the salaries don’t seem in line with property values. I don’t know people can afford to live out there.

 

[LineSkiCat14]

Investment properties are even more crazy. A duplex I purchased just over two years ago has gone from $150k to an ESTIMATED $220k. That's not even factoring in improvements to foundation, bath/kitchen remodel. I've heard some stories of rental properties selling for nearly double around me.

A friend just moved into their custom built home.. the price to build that home now, only 6 to 12 months later, went up $60,000.

On the other end: Another friend who was customizing a condo for nearly a year, had to back away because the builders were blatantly stalling and making obvious mistakes. It appears the builder wanted them to back out, with how hot the market is, and the condo is now back on the market for like 20-30k more.

 

[LineSkiCat14]

These prices might be here to stay.. but I dont see any way that there aren't thousands of foreclosed, delinquent, and underwater home owners in the years to come. Too many buyers going above their means, from sellers who are cashing in at the right time.. There will be ample buying opportunities at some point, probably not far off.

 

[Lord Z]

They're creating a giant unsustainable bubble again and they'll keep doing it as effective Government regulations don't exist over anything anymore. It's a free-for-all out there like you see in 3rd world countries because Government has been emasculated in this country.

 

[812scottj]

I’ve heard that corporations are buying up properties to tighten supply…key driver to the insane inflation. No way it’s sustainable. It’s definitely gonna cause issues down the road

 

[thabigbluenation]

They're creating a giant unsustainable bubble again and they'll keep doing it as effective Government regulations don't exist over anything anymore. It's a free-for-all out there like you see in 3rd world countries because Government has been emasculated in this country.

seems you would have a ton of ppl getting into mortgages that are inflated, so if things trend back to where we were, ppl will be in homes worth less that when they bought them, so if you are trying to sell a couple of years from now you could be forced to lose your ***. possibly anyway. sure does seem like we didn't learn anything from the previous bubble.

at least interest rates are low and ppl arent' getting into fixed rates that won't balloon

edit....meant to say adjustable

 

[812scottj]

Or worse…adjustable rates that screw them in a couple of years. Rates have gone up. I refinanced a year ago at 2.875% but locked in my new house at 3.375%. Still very low, but on the rise. Inevitable

 

[ukalumni00]

It is a damn if you do damn if you don’t situation where I live. You can sell and make a substantial profit but then you have to go buy another place which 1. You will be lucky to find something and 2. you are going to pay more for the house. So, in the end, you really did not accomplish anything by selling in the first place.

 

[HagginHall1999]

My in-laws just sold their house in June. They listed while we were all away on a family vacation. They live in Central KY. Listed for $550k and sold for $750k. Had some ridiculous amount of offers over the first weekend on market. They downsized and paid cash for a new house like 10 minutes from old house.

I live in NKY. Our neighbor across the street put their house on market and it sold in 1 day. Not sure how much it sold for but there were a bunch of showings in 24 hours....I saw them coming and going as my office faces their house.

 

[The-Hack]

Heard of a rural farm house in Garrard County, with 10 acres, purchased 11 years ago for $55,000, and just sold for 370,000.00 to a couple from Chicago area.

A 1,200 square foot house with a full basement on .6 an acre sold for $190,000.00 in rural Ky.

Crazy times: yes, we will see inflation, but this is too much!!

 

[_ukcat]

Was talking to a Realator in Lexington over the 4th of July and he told me the Market is nuts at the moment. He seeing bidding wars over his listing and homes going 25 to 50K over asking price.

 

[catlanta33]

Going to be a lot of fun when the eviction ban ends and covid bennies run out. Nothing is cheaper and a lot of folks will be out on their asses.

 

[BlueRaider22]

A few houses in our neighborhood have gone for crazy prices. My wife and I briefly thought about capitalizing on the market and selling ours for a crazy price but then we realized "where are we going to move to?" Wherever we would go the prices would be just as inflated.

 

[Ryan Lemonds Hair]

Or worse…adjustable rates that screw them in a couple of years. Rates have gone up. I refinanced a year ago at 2.875% but locked in my new house at 3.375%. Still very low, but on the rise. Inevitable

I think the low interest rates are a big part of what is driving house prices up along with the increase cost of building. People can afford to pay more for a house when rates are 3% as opposed to 5% and have the same payment.

 

[cricket3]

It's not a great time to buy a house but it's definitely a great time to refinance. I was able to knock $300 off my mortgage without changing the length between the new interest rate and knocking out PMI. Went from 13% equity to 30% equity in a year and a half, and they didn't even do an appraisal so it was likely a conservative estimate.

 

[ukalumni00]

It's not a great time to buy a house but it's definitely a great time to refinance. I was able to knock $300 off my mortgage without changing the length between the new interest rate and knocking out PMI. Went from 13% equity to 30% equity in a year and a half, and they didn't even do an appraisal so it was likely a conservative estimate.

Thought about doing it. Currently have a 30 year 3.6% fixed rate. However, we are not sure how long we will live in this house. Believe it is usually 10 years to get back the closing costs and all from refinancing. We already pay more than the scheduled monthly mortgage amount and plan on paying enough on the principal each month to get the loan paid off in 15 years. Just like having the 30 year in the event something happened where we need the lower payment each month than a 15 year loan payment would be.

 

[WayneDougan_rivals170043]

They're creating a giant unsustainable bubble again and they'll keep doing it as effective Government regulations don't exist over anything anymore. It's a free-for-all out there like you see in 3rd world countries because Government has been emasculated in this country.

Isn't the government pushing home ownership like they did before the housing bubble? Hell, the city of Louisville took my tax dollars and earmarked it for Black people to pay down payments on houses they "couldn't otherwise afford". All that does is inflate the price of the house.

 

[cricket3]

We stayed with the same lender so our escrow transferred out we got a loyalty credit. Closing was less than $1000, since we skipped our July payment we still came out ahead.

 

[Ryan Lemonds Hair]

Thought about doing it. Currently have a 30 year 3.6% fixed rate. However, we are not sure how long we will live in this house. Believe it is usually 10 years to get back the closing costs and all from refinancing. We already pay more than the scheduled monthly mortgage amount and plan on paying enough on the principal each month to get the loan paid off in 15 years. Just like having the 30 year in the event something happened where we need the lower payment each month than a 15 year loan payment would be.

Very smart on your part. Usually their isn't a huge difference in a 15 year rate and a 30 year rate but making a 15 year payment with the additional money toward the principal will pay you off in close to the same time. One other thing to save money, if your lender will do it, is to pay bi weekly payments.

 

[BlueBallz_rivals30790]

A few houses in our neighborhood have gone for crazy prices. My wife and I briefly thought about capitalizing on the market and selling ours for a crazy price but then we realized "where are we going to move to?" Wherever we would go the prices would be just as inflated.

We are in the North Dallas area, it's a crazy hot market here too. We have friends that sold their house two weekends ago for the ONLY reason is the market is so hot. They got an offer the first showing weekend and accepted and looking at a rental next month. He thinks the market is going to crash. At least in North Dallas, it may correct a bit, not crash, I think he's crazy. After costs (realtor, ongoing rent, etc) over two years, I would have to think it's going to drop at least 30% to make this scenario worthwhile. Not to mention, the rental market here is just as hot.

People are doing crazy things.

 

[trueblujr]

It's not a great time to buy a house but it's definitely a great time to refinance. I was able to knock $300 off my mortgage without changing the length between the new interest rate and knocking out PMI. Went from 13% equity to 30% equity in a year and a half, and they didn't even do an appraisal so it was likely a conservative estimate.

Sounds like exactly the same thing I did. My PMI went down to about $30 and I will be able to knock it off in January.

 

[catlanta33]

I think the low interest rates are a big part of what is driving house prices up along with the increase cost of building. People can afford to pay more for a house when rates are 3% as opposed to 5% and have the same payment.

This is a very huge part of it. We're reverting back to pre '08 days in some ways. Buying sight unseen, waiving inspections, overwhelming appraisers/underwriters and people buying above their means.

It's not a great time to buy a house but it's definitely a great time to refinance. I was able to knock $300 off my mortgage without changing the length between the new interest rate and knocking out PMI. Went from 13% equity to 30% equity in a year and a half, and they didn't even do an appraisal so it was likely a conservative estimate.

Definitely refi if you're in a 4% + rate. We refi'd last year from a 30 yr to 15 yr and with our current extra payment, knocked a point and half off our rate and 4 years on paying off the house.

 

[Monroe Claxton]

The government printed so much money that it ain’t worth much any more. You can sell a house for a good profit but when you buy a new one you have to pay a lot more too

 

[LineSkiCat14]

My time with housing interest rates has been minimal (2.5 years), so my line of thinking may not be correct..

But the rates sure seem to move quite a bit. I was at 5% 2 years ago, and refi'd down to 3% last summer. Maybe rates don't always move this much, but I question why people are so trigger happy to buy a house just cause the rate dropped half a percentage point.. you can always refi in the future, make principal payments, use tax deductions, etc.. to combat that half point difference. I dont think its smart to base your "to buy or not" decision on interest rates, which is what do many couples are doing.. Maybe someone can correct me?

 

[Anon1640710541]

Congrats on being poor.

I paid my house off at 38.

 

[CrittendenWildcat]

Would love to sell my home right now, but would hate to buy a home right now. Did refi in December to 2.625% for 15 years. Fiancee and I are hoping the market becomes sane by next April, as my ~1,350' sf home purchased after divorcing my Ex in 2015 as my bachelor pad just isn't cutting it (though even with a 15 yr. mortgage the monthly payment is insanely low, which is REALLY hard to give up).

 

[cricket3]

Congrats on being old.

I'm not 38 yet.

 

[-COUNTRY-CLUB-JOE-]

It's pretty much the same in the Denver area. Any home worth having has multiple above asking price offers the first day. It's insane

East Colfax not bad.

 

[Lord Z]

Sell your home and live off the land. It's an adjustment at first. People walking by and the police hassling you, but once you start to spread that sweet cash around you can't beat it. I pay a Filipino girl $5 to scratch my feet all night and sew the holes in my socks. In winter I know a few nice laundromats to curl up in for the night behind the dryers. So feel your way around and live natural. It really is underrated.

 

[chroix]

Waiving inspections on multiple hundred thousand dollar purchases seems like a move only a true idiot would make.

 

[LineSkiCat14]

Waiving inspections on multiple hundred thousand dollar purchases seems like a move only a true idiot would make.

People getting caught up in the frenzy, following what everyone else is doing. Kinda mirrors the stock market. They see how hot some of these homes are (the same ones that existed for 40+ years lol), and go nuts trying to outbid. And to get those offers in and accepted, they can't wait for an inspection.. it's nuts. And I can't wait for it to open up buying opportunities down the road lol.

I wonder if builders now ramping up (demand, materials coming back, etc), and getting these homes built are going to create a greater supply of homes than we need, almost reversing course. Builders are going bananas in upstate NY. They can't keep up. At some point, everyone who wanted a house right now will have had one (or won't be able to afford these crazy prices). What happens to all these new homes?

 

[Tskware]

FWIW, heard a presentation on "affordable housing" in Lexington a few weeks ago (bottom line - there is very little "affordable housing" in Lexington). But one point made was that there is little reason to expect a housing foreclosure deluge like in 08 and 09 because the prices have gone up so fast, that most borrowers, even if they lose their job, are not underwater like they were back then, and lenders who learned a hard lesson (I know, I represented a bunch of them) are much more likely to work with people to execute forbearance agreements and loan workouts rather than take a deed in lieu. Especially if there is still equity in the property, contrary to the general public view, last thing lenders want back is OREO property (Other Real Estate Owned)

All that being said, I am advising my kids to be very cautious in buying right now, you can always refinance a bad loan, but you can't recover money when you vastly overpaid, unless you are prepared to live in the home for a long time.

 

[BlueRaider22]

All that being said, I am advising my kids to be very cautious in buying right now, you can always refinance a bad loan, but you can't recover money when you vastly overpaid, unless you are prepared to live in the home for a long time.

Very sound advice.

 

[BankerCat12]

It's not a great time to buy a house but it's definitely a great time to refinance. I was able to knock $300 off my mortgage without changing the length between the new interest rate and knocking out PMI. Went from 13% equity to 30% equity in a year and a half, and they didn't even do an appraisal so it was likely a conservative estimate.

As weird as it sounds, its still a great time to buy a house due to low interest rates. I do residential and commercial lending and ran some figures for a group a couple months ago. Based on a $500k loan at 2.5% (where the 30yr was then) compared to where they were 2 years ago at 4%. That is $148k in savings over the life of the loan. So paying 20k-30k over still makes sense due to interest rates alone. Now if you plan on staying in the house for only a few years, I would just go ahead and rent.

The only concern going forward for homeowners if they bought with little to no money down and then for some reason need to move. The market will correct itself at some point and the ones that will be caught are the ones that dont have a decent down payment and they need to move for whatever reason. Hardly any one is doing ARM products now due to how low the rates are. There are not going to be a large amount of foreclosures like someone stated above...this is nothing like the bubble in the early 2000's. I would hate to be a first time homebuyer in this market. Atleast if you are a homeowner, you are buying and selling in the same market.

The Louisville market is still crazy but houses are starting to sit for a day or two now. More likely has to do with summer vacations and school about to start back up, but its not April and May 2021 now. Had a client offer $275k over ask and still not get the house. High end market is just as busy as low end. $1MM+ is up $162% in closed transactions compared to last year. Mind blowing when you really think about it.

 

[BankerCat12]

Thought about doing it. Currently have a 30 year 3.6% fixed rate. However, we are not sure how long we will live in this house. Believe it is usually 10 years to get back the closing costs and all from refinancing. We already pay more than the scheduled monthly mortgage amount and plan on paying enough on the principal each month to get the loan paid off in 15 years. Just like having the 30 year in the event something happened where we need the lower payment each month than a 15 year loan payment would be.

If you cannot recoup your closing costs in 2-3 years, you need to stay where you are. You can refinance now at 2.875%-3% but not sure its really worth it unless your loan amount is above $300k. Some lenders would probably try to sell you on it, but cant make up the closing costs in the time frame above.

Refinances went away in early March. The ideal time was December-February when you could get 2,5% and no closing costs. Rates are still historically low but its a purchase market now. Some people are coming out of the woodworks for refinances but they missed the low point.