Housing market trash

UTfball68 said:
FYI…offer was accepted. I think she’ll handle her financial situation just fine. But if I’m looking at it on paper, I just can’t wrap my head around loaning someone $1,000 with no/minimal work history, no/minimal credit history and a 50+% DTI if I give them my money…much less giving 274x that amount.

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They probably use this math -



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Which is dumb as hell, even the fact they base it off gross is stupid, let alone not looking at your other bills.

But maybe she will get a roomate and make it cheaper?
 
Tom@Hilltop_Machine said:
Wow. A starter home like that was $115k 20 years ago.
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Our first home was $100k, a 1100 sf '67 rancher in the outskirts of Lewisville in '02.
At the time I was in grad school w/ a whopping $16k stipend and wife was a 3rd year teacher. We did some kind of 1st time homebuyer program bc we only had like 5% down. At the time I was pretty shocked we were able to buy at all. I'm guessing our DTI was something around 30%. But we happily sold it for $128k 6 years later w/ no problems.
 
DSM Turbos said:
They probably use this math -



FB Post

Which is dumb as hell, even the fact they base it off gross is stupid, let alone not looking at your other bills.

But maybe she will get a roomate and make it cheaper?
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WOW that shit is scary.
No accounting for.... taxes? Other debt?
 
DSM Turbos said:
They probably use this math -



FB Post

Which is dumb as hell, even the fact they base it off gross is stupid, let alone not looking at your other bills.

But maybe she will get a roomate and make it cheaper?
Click to expand...

RatLabGuy said:
WOW that shit is scary.
No accounting for.... taxes? Other debt?
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He did say "zero other monthly liabilities" or something like that.

And that $700k was based on a 5.25% interest rate. Make it 2.5% like was possible last year and that number jumps to $950k :eek:

So a married couple both making $55k could have "easily" ( :laughing: ) afforded a million dollar house last year :rolleyes:
 
DSM Turbos said:
They probably use this math -



FB Post

Which is dumb as hell, even the fact they base it off gross is stupid, let alone not looking at your other bills.

But maybe she will get a roomate and make it cheaper?
Click to expand...


I don’t disagree…seems to me like the math has changed in the last decade. Which then just tells me we’re gonna have a whole bunch of folks stuck in $250k 1400sq/ft homes for quite some time. As time progresses, it’ll be interesting to see if that becomes the new baseline nationally, if the bottom falls out, or it’ll depend on geography. I just don’t see rockwell/granite quarry, NC being able to carry those prices for very long (inside a decade). They’re not destination areas for remote work opportunities, job opportunities/median income won’t support it either and people don’t tend to like to have to spend 1.5hrs in traffic each way to Charlotte.
 
@UTfball68 tell your sister to back out and buy this instead:
www.zillow.com

372 Gene Hege Rd, Lexington, NC 27295 | Zillow

372 Gene Hege Rd, Lexington NC, is a Single Family home that contains 1377 sq ft and was built in 1900.It contains 3 bedrooms and 1 bathroom.This home last sold for $266,400 in July 2022. The Zestimate for this Single Family is $305,800, which has increased by $3,668 in the last 30 days.The...
www.zillow.com www.zillow.com
 
shawn said:
LOL at y'all doing math with 2019 dollars....
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Income/home price ratio doesn't care which years dollars you use. People can scream from the roof tops that 200k today is the 150k of yesterday to justify these stupid house prices, but if someone makes 50k today and buys a 250k house, that's fuzzy math any way you slice it.
 
Had to sit through a boring ass call yesterday, so pulled up the homes-on-market data for 4/22 and 7/16. The July 2016 data is generally representative of normal market conditions (90-day supply). Compared to current supply (400k), we need to add 1.1mm houses to the market just to restore the market to historical norms. NC needs about 45k houses. I didn't look at household creation rates over the last five years, but I suspect that number might be low. Contrary to anecdotal claims in this thread about people from up north causing the housing shortages, New England states have some of the worst supply issues. Connecticut only has 15% of normal supply available. Maine (12%), New Hampshire (12%), Vermont (10%), Wisconsin (13%), Delaware (18%), Indiana (19%) and Ohio (20%) all have severe shortages. New York is the best out of all 50 states, but still only has half of what a healthy supply would be.
 
So.... for those who like to bitch and moan about what all this housing growth does to us....
what are the primary drivers of it? Is it just the annual net increase in bodies that are in the country? [sum of birth rate plus immigration rate minus death / departure rate]
Is the social demand for living on your own, or at least not living with other people, the same as its always been, or greater?
 
Google "US household formation". For example:

www.realtor.com

US Housing Supply Continues to Lag Household Formations

The pandemic exacerbated the already growing issues of housing supply in the United States. Home construction has lagged household formations year after year with few exceptions. Between 2012 and 2021, the gap between household formations and homes built grew to 5.24 million homes.
www.realtor.com www.realtor.com
 
shawn said:
Had to sit through a boring ass call yesterday, so pulled up the homes-on-market data for 4/22 and 7/16. The July 2016 data is generally representative of normal market conditions (90-day supply). Compared to current supply (400k), we need to add 1.1mm houses to the market just to restore the market to historical norms. NC needs about 45k houses. I didn't look at household creation rates over the last five years, but I suspect that number might be low. Contrary to anecdotal claims in this thread about people from up north causing the housing shortages, New England states have some of the worst supply issues. Connecticut only has 15% of normal supply available. Maine (12%), New Hampshire (12%), Vermont (10%), Wisconsin (13%), Delaware (18%), Indiana (19%) and Ohio (20%) all have severe shortages. New York is the best out of all 50 states, but still only has half of what a healthy supply would be.
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Supply only tells half the story though. Lower than traditional supply with lower than traditional demand is a stale market.

To get the true picture you’d need supply levels and ADOM and overlay.

That’s what the big boy investors do.

What’s been interesting here is seeing the institutional guys buying up the …other side of the tracks for normal per sqft values.
 
Ron said:
Supply only tells half the story though. Lower than traditional supply with lower than traditional demand is a stale market.

To get the true picture you’d need supply levels and ADOM and overlay.

That’s what the big boy investors do.

What’s been interesting here is seeing the institutional guys buying up the …other side of the tracks for normal per sqft values.
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I tried buying on the other side of the tracks…

Selling for “normal” prices but 200% more than it did 2 years ago and isn’t appraising, which is no surprise. Challenge I have, those rental units have less than ideal tenants which have higher than average turnover, repairs, and vacancy.
 
rockcity said:
I tried buying on the other side of the tracks…

Selling for “normal” prices but 200% more than it did 2 years ago and isn’t appraising, which is no surprise. Challenge I have, those rental units have less than ideal tenants which have higher than average turnover, repairs, and vacancy.
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Man, this is something my dad deals with. All his rentals are that way. I'm trying to decide if it's worth selling them or not.
 
rockcity said:
I tried buying on the other side of the tracks…

and isn’t appraising
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I have a buddy with about 100 of these ‘other side of the tracks’ properties. I asked why dafuq he’s not retired yet. Says he’s sold a couple to cash buyers, but he says he needs to come down to half ‘market price’ so the majority of buyers’ loans will appraise out. Conversely, same buddy just bought 8 acres to build his second (bigger) storage unit lot…apparently part of it is flood plane and deemed a ‘marshland’…and couldn’t do what he wanted without spending some big bucks in permits and culverts…Sold it and doubled his money to a developer that was willing to eat the added expense.
 
rockcity said:
I tried buying on the other side of the tracks…

Selling for “normal” prices but 200% more than it did 2 years ago and isn’t appraising, which is no surprise. Challenge I have, those rental units have less than ideal tenants which have higher than average turnover, repairs, and vacancy.
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That’s the cool dynamic of a small town. When these investors started buying up these areas , since total Inventory number are so low, they created their own comps in a way.

It’s been crazy to watch. At least in 29745 they have been getting the appraisals and loans
 
Ron said:
That’s the cool dynamic of a small town. When these investors started buying up these areas , since total Inventory number are so low, they created their own comps in a way.

It’s been crazy to watch. At least in 29745 they have been getting the appraisals and loans
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Yep. I’ve tried that with some of my properties but some of the appraisers are dicks or idiots and always use 2019 data when comparing the sales approach versus the replacement approach. So it’s been a struggle to get some of the appraisers to catch on and get with the times. 🙄

Just this past property I purchased…

Mine appraised at $15k below purchase price. The unit next door is identical except it needs $20k in repairs and within a week it appraised $20k above. There was a $35k delta in appraised value of identical units not even considering the $20k in repairs needed on the other property. My guy was an old duck that didn’t understand why the market is doing what it’s doing and other investors and builders knew him by name and had issue with him as well. He’s screwed up quite a few deals for buyers and sellers that need that appraisal to purchase. I found multiple errors and inconsistencies in his appraisal but he still refused to make corrections.

So, there are just some that, beyond their errors, are using cost approach data from where they think it should be rather than actual and screwing things up. It’s a real PITA.
 
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For what its worth, there is an old quote that I think is very pertinent to anyone who wants to fancy themselves as a real estate investor right now.

In times of change the learners will inherit the earth while the knowers will find themselves beautifully equipped to deal with a world that no longer exists.
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I cant learn fast enough to meet my own security standards. Im exiting on anything above las vegas gamble level money. I will learn, adapt and re-enter (maybe) in the future.
 
Ron said:
I will learn, adapt and re-enter (maybe) in the future.
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Any time I've dabbled in real estate, I've absolutely hated it...just not my cup of tea. But I do like money...and after seeing this the last 2 years, I'd be down for giving it another go.
 
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