This is all anecdotal, so don’t ask for real data.
Are we heading for a mini housing crash?
I say this because of housing prices in my area and talking to real estate agent friends.
The house next door to us just sold for 15-20% higher than ours appraised for 2 years ago when we refinanced, and ours house is worth 10-15% more than it. It was on the market for less than a week so it went for list or higher.
Also, I was talking to a friend and he said he is having trouble because many houses are selling at or above list and the buyers are waiving the appraisal contingency, meaning that if it appraises lower than the sale price you are still under contract.
This is fine if people are bringing a lot of cash to the table, and I hope the banks aren’t lending more than appraisal value.
Prices are just nuts. I think a lot of luxury goods prices are tied to the stock market. When you can make 100k in a week or two in the market, it makes overpaying for a house less painful.
When is either the market crash or housing crash coming? If I knew that I’d charge for the info.
My wife and I were dumbfounded at the listing price of the house next door, when it sold in mere days, I jokingly said we were selling and living in a trailer for two years until the market resets.
If my kids were out of the house I would seriously consider it.
It is bananas right now. It is going to get worse before it gets better IMO. As soon as the $1400 checks rain down ($5,600 for family of 4), this money is going somewhere. Its all great when you play with house money but when the bill comes due, I think people are going to be in real trouble. Basically in the last 12 months a family of 4 will receive $11,600. When this gravy train dries up, and people are facing inflation where wages don’t keep up, it will be nasty. IMO, we have a recipe for the highest gas prices ever this year. Many wells were shut in last April and the demand will outpace the supply for a while and regulations will slow the new wells from coming online. This will drag large amounts of money out of the monthly budgets of 75% of the households.
I don’t know what the next issue will be. It is highly likely that another covid variant will send people back into panic. There is also the looming evictions coming due that is going to be brutal. The next big wave of bankruptcies could be coming from commercial and rental properties.
The over-priced real estate in high-tax states like NY and CA is definitely headed downward.
My primary residence and rental properties are in the suburbs and in good school districts with little to no available land. These will keep going up in value for awhile. There is virtually no supply and the demand from people fleeing urban and high-tax areas is tremendous.
My ex is a realtor here in KC. I was visiting my grandson over at her house and she was working on an offer - and put verbiage in it that the buyer would provide up to $5,000 more if the house failed to appraise at the offered price. I said if the house didn’t appraise for what I offered, I’d pull the offer. She said usually that would be the case, but there were 30 offers on this house.
I check Trulia a couple times a month and there are very few homes for sale in my area, realtors have buyers lined up before they publicly list them. Prices are up a few percent, but it’s not that crazy. I read the other day lumber prices are adding $20,000 to the cost of new homes.
My area is considered “desirable”. I’m less than 10 minutes from the Plaza and less than 20 minutes from downtown. I usually get something from a realtor once a week asking if I’d want to sell my house. They do look tempting, but when you stop and think about it…I like the area where I live. So I could sell my house and turn around and pay damn near as much for something smaller (and I’m already pretty small). I just can’t justify doing it. I’d contemplated moving to KCMO (Brookside) since I don’t have any kids in school, but those are just as pricey. Plus, my pension isn’t subject to Kansas income tax.
Art Buchwald wrote a a satirical column about 40 years ago relating how he’d sold the home they’d owned for 3 or 4 decades and was worth 4 or times the original purchase price feeling they should be living in a house valued at $100,000 or more home. After selling and searching in vain for a comparable property they ended up buying their old home back at over $100,000 – thus fulfilling his $100k dream.
My son is a sophomore in High School, so we aren’t moving anywhere for two years.
We want to downsize to something lakeside, so we are passively looking right now.
This is likely true. Lumber prices skyrocketed last fall. They were up 300% from the price pre pandemic. They have come down some but still nearly double prepandemic prices. There is a lot of lumber used in a 2,000+ sq ft home so $20K is probably in the ball park. I have some farm fencing to do. It is cheaper for me to build a steel pipe fence then a wood fence.
A lot of framing lumber prices, at the mill level, are double to triple what they were early last year. Plywood and OSB are the same way. Retail numbers for 1/2" sheathing plywood around $40 a sheet. Agree with Bears, industry numbers are saying the wood products are adding $15k-$20k to the cost of a new house. Worked in the wholesale building material industry for 40 years, Never seen anything like this. Yellow pine 2 x 4’s are more on a board foot basis than 2 x 10’s. Never seen it before.