Home prices

[merlin6666]

Not here. I used a huge chunk of my retirement savings when I bought my house 10 years ago at the peak of the market. Since then it has lost at least a third of its value and it brakes my heart when I see the nice houses that are on the market now for what I paid then. I would love to get rid of it and upgrade, but also want to retire soon and don't need more debt for time without income.

 

[mushroom]

Yeah, we moved about 2 miles. But that was like a million trips in the truck, even with the moving van and the guys. It's just crazy how much "stuff" we accumulate!!!

2 miles.
I am envious.
We moved about 2000km off the mainland during the covid lockdowns here in Aus. It took about 2 weeks for our stuff and 3 weeks for our car to get here (via truck/train/ferry/truck). During that time we were staying in hotels with a suitcase each.

And that is an example of what not to do

 

[davismanLV]

2 miles.
I am envious.
We moved about 2000km off the mainland during the covid lockdowns here in Aus. It took about 2 weeks for our stuff and 3 weeks for our car to get here (via truck/train/ferry/truck). During that time we were staying in hotels with a suitcase each.

And that is an example of what not to do

Wow!! How traumatizing!! I swore that I was only gonna move ONE TIME and asked how to make that happen. Our realtor/friend said, the only way you can guarantee that and be calm about purchasing a new home is to buy the new one first, then sell your old one after you move. I thought, "They're never gonna give us a loan for another house!" But they did. So then we moved and luckily the prep for sale didn't take long and with the crazy market here it was only listed fore a week. All cash offer way over list, and they were like "when can we close?". Today is fine with me. And so we did. I'd imagine getting services and things to move during lockdown must've been NOT fun!! Truck/train/ferry/truck sounds so complicated. Wow!! I'm feeling super lucky right now.....

 

[Opsimath]

Regarding the people able to offer way more than asking price for a house, what lines of work are they in? I'm considering a career change ....

 

[Midnight Toker]

Regarding the people able to offer way more than asking price for a house, what lines of work are they in? I'm considering a career change ....

My nephew graduated from Clemson in business admin last fall. He landed a job w/ one of the world's biggest consulting firms, and this being his first ever non temporary full time job, his starting salary, right off the bat, makes him my family's highest earner ever. He'll have his college loan paid off in 2 years and is currently shopping for a ritzy condo in downtown Charlotte.

 

[matsickma]

I've been out bid on a few vacation/retirement homes last year. Decided to buy one of the last acre lots in a lake community. Now watching for a decent home for sale at a reasonable price or build. "To build or not to build? That is the question!"

So many homes are being flipped for profit that building may be the right answer. No rush to build so I'll keep an eye open for a place another year. If nothing reasonable comes on the market I'll build. But I do hate to have that hastle!

 

[GAD]

Here in NJ a large number of the big money buyers are coming from NYC.

 

[matsickma]

NYC buyers buying up a lot of homes in less affluent towns of eastern PA also. You would be shocked at home prices for the beat up homes in the old coal towns. Since most of those purchases are cash I think the plan is make them rental units.
M

 

[Boneman]

Prices are getting out of whack everywhere. Here in So Cal no different with buyuers waiving inspections, all cash offers above asking. Like others said, now's the time to sell if you want to make the nice profit, but then you have to move somewhere to live and either the rents are going to be astronomical or you will likely be paying way above value for said new place. Sad times indeed, bubble has to burst soon.

 

[PreacherBob]

I live outside Columbia SC, in the farm area. My dad lives closer, at Lake Murray. He passed away end of 2019. I had a realtor come and appraise the house for the market. They came back with a reasonable asking price of $175k. So I held on after Covid hit, until I sold it last summer for $250k. I listed it with a realtor, it went live at 9am, Had 4 offers by 11am, and took the cash offer, no condition, the guy just wanted me to leave. So my wife told me a couple weeks ago, she saw it had already sold again for $300k. So what’s up with that

 

[davismanLV]

Congratulations!! Pulling into the garage is the easy part. Backing out not so much......

 

[Stuball48]

Location location location

 

[davismanLV]

Have you ever tried to go forward on stairs when they're level.... meaning parallel to the ground? Grab a rail if you can find one!!

 

[JohnW63]

My big question is "why?".

I pulled up a chart on house prices per year from 1963 until now, or as close to now as the web site would go. You could see the steady climb with ups and downs and the 2008 thing and then recovery. My sister bought their house just at 2008 and it took them 15 years to not be underwater. Then the graph hit 2020 and it shot up. Again, why? I suspect some of the Real Estate Funds or REITs may have something to do with it. Investment firms buy up realestate and turning them into stockmarket shares for all intents and purposes, but their has to be more.

 

[GAD]

My big question is "why?".

I pulled up a chart on house prices per year from 1963 until now, or as close to now as the web site would go. You could see the steady climb with ups and downs and the 2008 thing and then recovery. My sister bought their house just at 2008 and it took them 15 years to not be underwater. Then the graph hit 2020 and it shot up. Again, why? I suspect some of the Real Estate Funds or REITs may have something to do with it. Investment firms buy up realestate and turning them into stockmarket shares for all intents and purposes, but their has to be more.

Covid was a huge part of it.

People in the cities suddenly realized that if they could work from home, then they didn't need to live in the cities. Coupled with some socio-economic-political stuff that we won't get into here meant people were starting to think that maybe they didn't like being in the city as much as they once did. Meanwhile people who lived in the suburbs maybe thought they could capitalize on that, and prices started to go up. Additionally, since everyone was working from home, the people who had houses and were happy where they were weren't inclined to sell, so there became a shortage of houses available. A shortage drives prices up, an the loop began.

Some of the people who lived in the cities had a LOT of money and started throwing it at the houses they wanted, thus frustrating the normal buyers who couldn't compete.

The supply chain pretty much broke, and suddenly wood became super expensive and that meant that new homes weren't being built as quickly, and that meant fewer homes available for sale, and that further fed the loop. Thanks to that same broken chain along with a bunch of other socio-economic-political stuff, the prices of *everything* went up. Including houses. Again.

 

[matsickma]

Home purchasing mania happens often! Seems ever 15 yesrs or so. In the '70's home growth was slow. High interest rates of early 1980's slowed the market to a crawl until the Fed under Paul Volker (and Ronald Reagan) froze the money supply, forced a major recession, and finally broke the back of inflation. (Biden or the next president may have to do something similar after the next election!)
A few years later housing prices shot up like crazy. The 1st wave of BabyBoomer and older had massive home equity values that the 2nd home in the mountains and down the shore became vogue. So much traffic running north on the PA turnpike up to the mountains and on Sunday back to the city and burbs that the traffic jams led to an additional tunnel to handle the traffic. The 2nd wave of Babyboomers,( my group born'50 - '58) were buying first houses driving up the market. However by the late 1989-1990 the bubble burst! My boss at the time bought a home that year north of Philly. When he retired in 2006 he told me his house value finally got up to the 1990 level! The Philly housing market of that time was one of the faster growing markets in the country.
Then the housing crash of 2008 and Great Recession. And now 2020 it started again.
Yep...the cycle seems to be around every 15 years +/-.
I think a similar thing happened after WW2.
M

 

[matsickma]

The Covid plus cheap money definity led to the latest housing boom. Covid had a big impact on the more rural or vacation shore / mountain type locations!
I fell short in that area by not buying in 2019!
Couldn't get the wife to consider it. I was working away and she was frantic. When she retired last summer it was just about to late. And we were late to the party but bought one of the last lake community lots.

 

[fronobulax]

As noted, Covid and investors. Covid increased demand and various issues, related to Covid, reduced supply. Investors decided the market was hot enough to make money. There is some backlash in places because investors are keeping first time and less affluent buyers from the market. There are municipalities that are trying to find ways to discourage investors in favor of owners who will occupy the property. The Atlanta suburbs are one area where investment is causing a lot of concern because there is a concern about discrimination.

Since both the economics and social policies have roots in political decisions this is not an especially safe to topic to discuss on LTG in any depth.

 

[matsickma]

10-4 Good Buddy!

 

[JohnW63]

I think I read somewhere that contractors aren't building smaller, lower cost, homes much because the land itself costs so much that the only way to pull a decent profit is to build more expensive homes and build the profit from all the nice extras that push the total value up. Not sure how true that is, but it does make some sense.

After looking at the graph I mentioned before, even if the market "corrects" I don't see it cutting values in half and making it affordable for first time buyers.

Here is the chart I mentioned:

Average Sales Price of Houses Sold for the United States

Graph and download economic data for Average Sales Price of Houses Sold for the United States (ASPUS) from Q1 1963 to Q4 2023 about sales, housing, and USA.

fred.stlouisfed.org

By a quick line up your ruler to hit as much of an line, I would say that the prices as the start of 2020 would be about where we should be. That drops the prices from roughly $475K to $375K. Call it a 20% drop.