Real estate General topic

[paulsharvey]

We just closed on a pay down refinance. We took the vast majority of the cash off the sale of the old home, and paid down refinanced. Because the first loan was FHA, it couldn't be "Re-cast". Rates didn't really drop, but with dumping the money in, getting rid of the PMI, we got the monthly number down to something more manageable

 

[Hay Dude]

I’m juiced for the upcoming lower interest rates.
Thanks DJT!

 

[ultrarunner]

If rates drop me thinks price of Real Estate will increase?

Back in the 80’s with 12-15% mortgage rates the market for sellers was real bad.

I picked up income property at low prices because of the high rates.

As rates dropped the value increased…

I could have sold but opted to do no cost rate refi.

My 13.5% went to 10% and it did not cost me a penny as no cash out.

 

[WinterDeere]

If rates drop me thinks price of Real Estate will increase?

Yes. If you expect to be buying prior to a rate drop is the time to do it, before prices climb. You can always re-finance.

It’d be nice to pretend it’s possible to time right with the drop, and avoid the need to refi, but timing the entire agreement period to closing and knowing when the bottom has appeared, are more luck than science.

 

[ultrarunner]

I’ve been very fortunate.

That said every investment had to pencil out and high interest rates meant lots of languishing inventory with some sellers just needing to get property sold… settle an estate, relocation, etc.

 

[Hay Dude]

If rates drop me thinks price of Real Estate will increase?

Back in the 80’s with 12-15% mortgage rates the market for sellers was real bad.

I picked up income property at low prices because of the high rates.

As rates dropped the value increased…

I could have sold but opted to do no cost rate refi.

My 13.5% went to 10% and it did not cost me a penny as no cash out.

Mabes
But I know another thing that is going to happen is that home inventory will increase tremendously. There’s a lot of people “trapped” in homes with 4% mortgages they dont want anymore-even though they have a 4% mortgage. They are desperate to move. Once rates drop like 2%, people can finally sell knowing their next home can be financed at 5% instead of 7%.

 

[ultrarunner]

If only a crystal ball to see the future.

Supply/Demand at a given location determines value with a ready, willing and able buyer.

Even with high rates folks are still cashing out of high price areas for least expensive locals… and paying cash at destination.

The California exodus also has effected many nationwide markets driving higher prices.

 

[riptides]

....

Supply/Demand at a given location determines value with a ready, willing and able buyer.

....

Around here there is a housing shortage. So prices will probably go higher.

You know what they say about location.

 

[ultrarunner]

They keep saying the Bay Area has an acute housing shortage and it’s been an ongoing refrain for years.

With inventory now at a 10 year high the refrain has been modified to we have a AFFORDABLE housing shortage which again seems odd with home prices in my heart of the Bay Area down about 30%

It seems no matter what happens housing will always be in the spotlight?

 

[WinterDeere]

They keep saying the Bay Area has an acute housing shortage and it’s been an ongoing refrain for years.

With inventory now at a 10 year high the refrain has been modified to we have a AFFORDABLE housing shortage which again seems odd with home prices in my heart of the Bay Area down about 30%

It seems no matter what happens housing will always be in the spotlight?

Votes are won on sentiment, not facts.

 

[paulsharvey]

I have said for years; a 2x4 doesn't know if its going in a $150k or $750k home. Neither does a yard of concrete or 5/8" drywall, or a 30 year architectural single. Yeah, trim does go up in price; but the normal person can't tell $1.50/sf tile from $9/sq ft tile.

Many years ago, company i worked for built low income apartments and student housing. All 2 or 3 story, upto 36 unit buildings; often as many as 16 building. Anyways, we branched out into high end condos; and guess what; same floor plan, same materials, only difference was black GE appliances instead of white Magic Chef; and 20mm granite counter tops vs laminate. Cabinet boxes, same; tile dame; carpet, same. Even the tube surrou d tile, same.

Point being, we tried for 11% profit; would you rather 11% of $150k or 11% of $500k. for the same effort. It's more than that. cause that $150k home costs close to $135k and that $750k home costs about $300k to build. Also, you can't really make it up with volume; 1 super can do about 20 homes concurrently, maybe 15 if mixed finishes; so, you can't even make up cheap homes with volume

 

[paulsharvey]

Add to that various ordances and stigmas with manufactured and/or modular homes, which are about the only want to get under $250k with a new build. You want more sub $400k homes; cities, counties, and subdivision need to realize a manufcatered home of 2025, isn't the "trailer" of 1970

 

[kenmbz]

In some cases, the only reason builders accept to build "affordable" housing is the rules change over time.
So it might be affordable housing you build in Princeton NJ today, but in 20 years you can now do an upgrade and have high end luxury apartments, and the land value doubles or triples.
This happened in Princeton , NJ , why I am using it as an example.

It is what they want in Palisades California, pay a fraction of the value to build affordable homes.
As soon as the affordable home clause expires, the value goes up by many, many millions.

 

[paulsharvey]

So, not any fix for this, but I got off the phone with my county property appraiser. We got our TRIM notice, basically tax due in spring is $×,××× or $that plus 400 if a bill/reg passes. Well; thats more than double last years.... Call, and yes that $4ish K is right, year one of ownership, previous owners $238k appraisal reduction was in place; our deduction is only $59k... Combination of homestead, save our homes amendment, ag exempt, ect. Kinda a bitter pill to swallow. Year two is well more than double year one taxes. Yes, year 3, 4, ect is capped at 3.5% increase in assessed value

 

[thclimer]

Ouch! I guess no way to predict this before you bought it?

 

[paulsharvey]

Ouch! I guess no way to predict this before you bought it?

Kinda yes, and kinda no. I did know they would go up some, and you can view anyone's tax bill, which we did, but you dont know what discounts they might be getting, like widow, disabled, "ported" homestead savings from a previous home, ect.

 

[grsthegreat]

Yeiks…. That makes my measly $1300 per year tax burden seam ok.

 

[paulsharvey]

Yeiks…. That makes my measly $1300 per year tax burden seam ok.

Well, when we refinanced, the mortage company didn't set up escrow for taxes and insurance, which we can ask them too do; and we probably will, but it makes you start looking at this stuff a bit more. Just taxes and insurance add up to more than the old places total payment.

 

[LouNY]

Well, when we refinanced, the mortage company didn't set up escrow for taxes and insurance, which we can ask them too do; and we probably will, but it makes you start looking at this stuff a bit more. Just taxes and insurance add up to more than the old places total payment.

It's not uncommon around here for the tax and insurance escrows to be more then the mortgage payment. And that is completely screwed up and over taxed.
I get a $50,000 deduct on my property tax for being a Vietnam vet, but it doesn't apply to any other taxes. It takes a bit over $500 per month to cover my homes taxes.

 

[kenmbz]

one of the reasons I moved from NJ, property tax increases $1000/year for many years.
Started at $10,000, when I left 9 years ago was up to $17,000.
The only reason it didn't go up more is I successfully fought my taxes twice.
Then they changed the rules and made it almost impossible to fight.