Gad! House buying today

[ultrarunner]

Real Estate is being fundamentally transformed in California from various factors… cost, insurance, use, restrictions, etc.

That said I can show where single family homes tripled in 12-14 years.

The current market is seeing price reductions and/or owners on the sidelines.

No doubt about it the availability of property insurance anyplace remotely tractor oriented is killing lots of transactions… unless you are able to self fund everything without borrowing.

Insurance was almost an afterthought is now deal stopper.

Add to that squatters and under used or vacant parcel taxes and close to 20k property tax on an average cost home here sale and sustainability isn’t in the equation.

When prices were drastically down 2009-2012 those with the means were largely on the sidelines which is why prices were drastically down… buy opportunity of the century.

Don’t forget the skyrocketing cost to build in both time, gov fees, labor and material… if you are allowed/permitted to build.

Forget about investing in residential rentals as owners are subject to a bevy of new tenant rights and 3 years of Covid restrictions owners had not even the right to evict but still had to provide all services with zero income coming in.

Cashing out is fine but with inflation erosion of any gain and taxes and selling costs… what you end up may leave you really short in the long term.

Maybe those that got out while the going was good are the ones that hit the property lottery?

 

[JeepHead]

Houses are flying off the market as fast as they're listed where I live and at premium prices!

 

[ultrarunner]

Houses are flying off the market as fast as they're listed where I live and at premium prices!

Maybe by those fleeing the East and West Coasts?

Growing up in California it seemed like everyone was from somewhere else… grade school was full of kids with parents new to California and the car business would always have out of state plates set aside for me from out of state cars traded in.

Out of state plates at the dealership very rare now…

That said when I’m traveling outside of California there is no shortage of California expats I come across… seems as if the pattern fully reversed.

 

[ruffdog]

Covid had a big impact on the housing market. Suddenly a lot of people wanted to live somewhere else. Usually out of the city, which would affect rural and suburban markets. A lot of people I know in tech bought rural places and worked from home.

Another factor is large private equity firms have been buying up houses to rent. Many thousands of them. Mostly suburban. They have also been buying farm land, which is one of the reasons it's so high these days.

Once farm land and suburban houses became "investments" for corporations, the supply and demand of real estate went crazy. Something like 600k (some estimates are much higher) homes are corp owned in the US. In one area I know, an investor from way west of here bought up 2000+ acres of rural land. It affected the prices and availability for farm land tremendously. I don't think he would know which end of shovel to hold either.

 

[JeepHead]

Maybe by those fleeing the East and West Coasts?

Growing up in California it seemed like everyone was from somewhere else… grade school was full of kids with parents new to California and the car business would always have out of state plates set aside for me from out of state cars traded in.

Out of state plates at the dealership very rare now…

That said when I’m traveling outside of California there is no shortage of California expats I come across… seems as if the pattern fully reversed.

No, not really seeing any new comers to our small town. Lots of kids are buying homes earlier now in my area. Also lots of people upgrading homes. The realtors are snatching up homes left and right to remodel, flip, or rent out. Rent here is going for $1500 for a small 3/1 home. Very few apartments around, either.

 

[ultrarunner]

Sounds similar to the run up a few years back with so many flips.

With prices taking a step back the flippers have also.

 

[geteh]

Yes, it's the combination of skyrocketing prices (which was livable with low intrest rates) mixed with the high intrest rates.

The average new home is $411,000; a 4% intrest, 3.5% down, at 3%=is only $1730/month before property taxes and insurance;

now; $411,000 @ 7%=$2910

Now; the hidden part; the taxes and insurance; that's gonna be close to directly tied to purchase price; Excpet; all our homestead tax breaks; which come off the top; so you get $50,000 off the appraised value, and then pay about 1.8% of the remaining appraised value per year;

What that kills you on; a $150,000 home, your taxes were like $1,800/year; but a $500,000 home. that's gonna be $8100/year.

We are in the realm of a new purchase of an average home being $2910+541.50+300=$3755 per month Learn more about APKs

10 years ago; we probably were $150,000k home; $790/month+$100 in insurance; and $150 in taxes=$1040;

So; a average home is 3.6 x the cost per month as 10 years ago.... How's your pay check compare to that? If we assume you got 3% per year, each year for last 10 years; we are at like a 35% increase in pay vs 360% increase in cost of new housing.


Edit: that probably extreme, 10 years ago was 2014; so that $150,000 should have actually been $178,000.

just purchased my first home, the survey threw up a few things but was deemed to be structurally sound and okay for its age. I knew it would need some things doing but accepted it for the price. However I’ve moved in now and the weight of being a first time homeowner, my existing anxiety issues and being in a new environment have taken their toll on me all of a sudden. The house doesn’t feel homely, I suddenly really dislike it and am looking at every single surface and panicking that there’s something hugely wrong with the house. I feel scared to be in here and wish so much that I hadn’t bought this place, but now it’s too late. I just wondered if anyone has felt the same and how I can move past this? I feel my anxiety is making me unwell. my thoughts seem to focus on either the house falling down or if I discover something where it’s unsaleable one day. (Full survey was done and mortgage lender had no issues so maybe I’m being totally unreasonable here) Any advice would be gladly received, right now I just dislike the house so much and am so afraid of what I’ve done and if I’ve made a huge mistake. It’s making me feel so sick.

 

[Joel/ak]

just purchased my first home, the survey threw up a few things but was deemed to be structurally sound and okay for its age. I knew it would need some things doing but accepted it for the price. However I’ve moved in now and the weight of being a first time homeowner, my existing anxiety issues and being in a new environment have taken their toll on me all of a sudden. The house doesn’t feel homely, I suddenly really dislike it and am looking at every single surface and panicking that there’s something hugely wrong with the house. I feel scared to be in here and wish so much that I hadn’t bought this place, but now it’s too late. I just wondered if anyone has felt the same and how I can move past this? I feel my anxiety is making me unwell. my thoughts seem to focus on either the house falling down or if I discover something where it’s unsaleable one day. (Full survey was done and mortgage lender had no issues so maybe I’m being totally unreasonable here) Any advice would be gladly received, right now I just dislike the house so much and am so afraid of what I’ve done and if I’ve made a huge mistake. It’s making me feel so sick.

My advice is too relax. A first home can be overwhelming at times but take it in steps. Can't fix or deal with everything over night.

Don't let the house run your life.

 

[ponytug]

@geteh X2 on @Joel/ak's advice. Being new to a home or property can certainly feel overwhelming. Try to remember not to try to eat the elephant in one bite. I make lists of things that need doing, sort them for things that are more important, or more doable, and chip away at the list as time and resources permit. Yes leaking pipes, or smoking outlets might be all hands on deck emergencies, but most other things are not urgent, or nice to have items.

If you have sustained anxiety, I would go check in with a doctor. Lots of things can help. Even "chatting with strangers on social media...

Hang in there.

All the best,

Peter

 

[ultrarunner]

Same happened to the godmother of the kids…

Single and missing out with a very good job.

She jumped in and after 2 years pulled the plug but her timing was impeccable.

She cleared enough to retire student loans, payoff car and add a little to IRA.

29 months ownersaw the place go from 300 to 450k

Unless your home is sinking in quicksand or about to slide down a cliff most can be prioritized and inductance will help with a busted pipe, storm damage, etc.