Houses cost too much!

stever · December 2010

Not in the UP of Michigan.

fintail · December 2010

Those of us not in the witness protection program can't take advantage of that

I have a friend who recently moved to Georgia...amazingly cheap real estate there, but the quality of the houses has me concerned - some seem kind of iffy, and older ones are often not maintained.

stever · December 2010

We fully intended to rent for a while, but the rental stock was either in lousy shape or $900+ a month. So we decided to get a 100 year old classic Midwestern for about cost of an E Class sedan (or maybe the wagon when we update the plumbing - just did the electrical for $3k).

Original woodwork, hardwood floors, newer detached garage, yada yada. We're the second owners.

fintail · December 2010

When rent is so much higher than a mortgage, it'd be silly not to do it indeed. I can't say I've ever been in that situation, but I wouldn't mind. Someplace with a garage and some land where I can start accumulating parts cars and orphans I can save from the crusher :shades:

Second owner? Was it out of an estate? Or just in the family?

stever · December 2010

Just in the family that long.

The realtor kept showing us places with an acre, two acres, 30 acres. I couldn't keep up with the 1.5 acres we had in Boise so I kept vetoing those suggestions. This place is on a small city lot, and I could shovel the whole thing out in a couple of hours. Or mow the grass in 15 minutes.

Mr_Shiftright · December 2010

If you include taxes, insurance and maintenance, it would be the rare house indeed that cost more to rent than to own I would think.

I guess it depends on where you live of course but it seems to me that rental rates and house prices rise up or down together.

I will say, though, from personal experience (lots of it) that renting in a very expensive area is always more of a bargain. I get the same view as the guy next door who owns his house, for considerably less per month.

And when I want to move on, poof! I'm gone in 30 days tops. And when the furnace brakes, I know who to call, and they fix it for free.

As for "equity"---that's gonna take wayyyyy longer than it used to, maybe never.

fintail · December 2010

I'm with you on that. I mowed enough lawns when I was a kid, somehow I have no desire to do endless yardwork today.

One family ownership probably means your house was maintained fairly well anyway. Older houses can suffer neglect, but the quality of materials is insanely better than modern buildings.

fintail · December 2010

I agree wholeheartedly. I live in an area with similarly insane prices (although not as bad as SF area)...buying a place here seems questionable when rents are so much lower, and the promise of appreciation is sketchy at best. Rents will usually rise and fall together, but sometimes not at the same rate.

gagrice · December 2013

Anyone buying homes these days? Something I am seeing here is higher rents on homes than you may pay on a mortgage. A $500,000 mid range home in my area rents for about $3000 per month. Looking at 4.5% interest payments would be about $2500 if it was 100% financed. Add another $450 in property taxes and you are right at the rental level. If you make enough to pay $3000 per month rent you could surely use the interest tax write-off on an $21,000 deduction. The big problem I see is financing. I don't think you can get conventional financing with less than 20% down. Not everyone has $100k around here to put down. Add in the people with hordes of cash and it is a tough market to buy in. I have a friend with $70k for a down payment and he has been shot down twice trying to buy. Someone with cash beat his offers. It is still a buyers market here, even though a house down the street sold for $657,000 and was listed at $649k. We went through it on an open house. Nice but not that nice. It does make us antsy to sell and take our equity where we can get a lot more for the money. It would be difficult to get all we have put in this house. Then we have really enjoyed being here. So that has to be worth a few bucks. I am not used to losing money on real estate. Though I would probably rent if I moved to Hawaii. That market is more volatile than CA or AK. Unless we built on some land we own there. At 70 I may be running out of time.

fintail · December 2013

I wonder where that money comes from, in an area with such a fractured socio-economic base. Lots of overpaid public sector or Praetorian sector leadership types?
There's still a big disconnect between rent and mortgage in the nicer areas around Seattle - I can rent a 600K house for 2K no problem. I still have no real desire to buy, don't want to be tied down, and as a single person with a <100K income, I can't afford anything really decent anyway. No thanks to a 1974 condo that's an old apartment conversion, with no AC or garage, and the nicer condo market has been bid up by offshore speculators, much like the market in much of Canada. I don't mind having the extra money for savings, trips, and toys

I visited a relative at Christmas, who lives in a less posh area south of Seattle. Their house bought in 2004 is still worth ~15% less than they paid. Cardboard 'n plywood 2001 tract house within walking distance to nothing...I could afford it, but no thanks.

It'd be interesting to see what would happen if the IMO undeserved tax credits ever expired.

@gagrice said:
Anyone buying homes these days? Something I am seeing here is higher rents

gagrice · December 2013

I don't think you would ever see that cheap of rent here on a single family residence. Houses in the $350k range rent for $2200 a month. That barely covers expenses of owning a rental property. Looking at Seattle real estate, the prices seem very comparable to So CA. Your taxes look about the same and you have a high foreclosure rate going currently. I would assume people renting for low rents like you mentioned are just trying to keep their homes or are collecting rent until the bank actually forecloses. Around here that takes about 2 years of non payments. An amazing amount of foreclosed homes have renters paying the people that have quit making payments to the lenders. The lenders in turn have to pay the people living in the home moving expenses to get rid of them. What a country. Seattle foreclosures and Preforeclosures.

http://www.zillow.com/homes/make_me_move/Seattle-WA/pmf,pf_pt/house,apartment_condo,duplex,mobile_type/16037_rid/0-2407_mp/priced_sort/47.818918,-122.058449,47.411129,-122.613258_rect/10_zm/

fintail · December 2013

I think a lot of the rentals in my area are in longterm ownership. This area has CA housing prices now, but it didn't 40+ years ago when oldsters and boomers were starting out. Quite a few of the often now whiny geezer set was able to get into property ownership with a lot less work than is needed today, and now have nice portfolios to show for being lucky. Poor things.
The city of Seattle isn't the same as the eastern suburbs - many parts of Seattle aren't exactly nice, and carry low prices for it. If you want something decent, you won't get it via forclosure abandonment.

What a country indeed, when it comes to the obsession about owning a house. It isn't such a thing in much of the world. Mainly in English speaking areas, and kleptocracies like China and maybe Russia. Speaking of that, there are sold out condo developments in my neighborhood that are only maybe half occupied, due to money from those places.

@gagrice said:
I don't think you would ever see that cheap of rent here on a single family residence. Houses in the $350k range rent for $2200 a month. That barely covers expenses of owning a rental property. Looking at Seattle real estate, the prices seem very comparable to So CA. Your taxes look about the same and you have a high foreclosure rate going currently. I would assume people renting for low rents like you mentioned are just trying to keep their homes or are collecting rent until the bank actually forecloses. Around here that takes about 2 years of non payments. An amazing amount of foreclosed homes have renters paying the people that have quit making payments to the lenders. The lenders in turn have to pay the people living in the home moving expenses to get rid of them. What a country. Seattle foreclosures and Preforeclosures.

stever · December 2013

I thought I heard that EU country, Germany iirc, is changing some law or regulation to encourage more home ownership. But I can't find a link so perhaps I misheard.

gagrice · December 2013

Home ownership makes for a more stable community. Pride of ownership that does not exist in most apartment complexes. Over building condos goes back to the late 1970s and 80s. It is not uncommon for a condo high rise to be mostly unsold. Makes it real hard on those that bought in early. One of the biggest money makers in 1980 was buying condos in Honolulu that were not built. You put $1000 down and when they were completed you paid them off or got financing. I know a lot of the guys I worked with in Alaska bought 3 or 4 and sold them at completion for double the agreed on price. Sadly I did not get in on that one. I did do ok on Hawaii real estate several times over the last 25 years. Being at the right place at the right time is the key.

I have one home for sale and will buy more when that one sells. Still better for me than the stock market crap shoot. If worst comes to worst I can always rent the homes I own. I would rather fix and sell.

fintail · December 2013

Does it? The US has some pretty high home ownership rates, but it isn't the most stable place. If anything, home ownership often ties people to a place, and sometimes limits their chances for socio-economic mobility (say, being in an area with low housing prices but low job opportunity), which isn't always positive. Some of that sounds like realtor propaganda - there's a group as coddled and subsidized as any.

Being in the right place at the right time, indeed. That holds true for a lot of senior property owners, especially in my area. I know very few people in my age group in my area who have bought (I can't call it "own" when there's a mortgage, not to mention tax liabilities) a detached house in a halfway decent area without being lucky enough two have two professional salaries, or parental aid (that some confuse with merit).

In many places, houses still cost too much.

@gagrice said:
Home ownership makes for a more stable community. Pride of ownership that does not exist in most apartment complexes. Over building condos goes back to the late 1970s and 80s. It is not uncommon for a condo high rise to be mostly unsold. Makes it real hard on those that bought in early. One of the biggest money makers in 1980 was buying condos in Honolulu that were not built. You put $1000 down and when they were completed you paid them off or got financing. I know a lot of the guys I worked with in Alaska bought 3 or 4 and sold them at completion for double the agreed on price. Sadly I did not get in on that one. I did do ok on Hawaii real estate several times over the last 25 years. Being at the right place at the right time is the key.

I have one home for sale and will buy more when that one sells. Still better for me than the stock market crap shoot. If worst comes to worst I can always rent the homes I own. I would rather fix and sell.

gagrice · December 2013

I think you have observed real estate in volatile areas of the USA. Many places in the USA are very stable. If you are wanting to be mobile in your ability to work where you want to and move in a hurry, owning a home is a bad idea. In the case of my daughter in Indiana homes fluctuated very little during the housing bubble implosion. Their home is still worth about what they paid for it in 2008. It was brand new and with taxes and mortgage their payments are about half of what they paid for rent in a 2 bdrm apt. Today you can still buy a brand new 3 bdrm house where they live for $135k. Payment of $650 a month with no money down. One of my big issues is cost of utilities. Her gas and electric averages $125-150 per month. In the poorly insulated apt they lived in it was close to $300 when it got real cold or hot. They do not have any illusions that their home will appreciate and make them wealthy. Also they were lucky to be transferred to Indiana. As my SIL was offered a raise to leave San Diego when they moved. Lower cost of living and better income. A Win Win except for me not seeing them as often. And after 5 years they have about 10% equity.

fintail · December 2013

I've been observing real estate mostly in an area with a relatively good economy and lots of amenities - population growth is steady in my area, even with the dull weather. Prices did crash a bit here when most places crashed, but have recovered more than most too - at least the nicer stuff. Marginal areas and old condos have fared poorly. My mother lives in a WA state area with prices like you mention in IN - prices didn't crash, I could afford a nice house there - but unemployment is high, amenities are few, and social ills aren't exactly invisible. Location location location.

A friend of mine lived in suburban ATL, where a nice place can be had for well under 150K and decent presentable places can be had for half that. But the developments are poorly sited, quality is low, and local wages aren't great. He moved back here - can't buy a house, but ended up with a 50% raise for a lesser position.

A raise to live in a low cost of living area is like winning a lottery. Your relative got very lucky. And you can still visit them as much as you want - an excuse to take a road trip in the new car

No money down, eh? It seems people never learn. Shouldn't be legal.

@gagrice said:
I think you have observed real estate in volatile areas of the USA. Many places in the USA are very stable. If you are wanting to be mobile in your ability to work where you want to and move in a hurry, owning a home is a bad idea. In the case of my daughter in Indiana homes fluctuated very little during the housing bubble implosion. Their home is still worth about what they paid for it in 2008. It was brand new and with taxes and mortgage their payments are about half of what they paid for rent in a 2 bdrm apt. Today you can still buy a brand new 3 bdrm house where they live for $135k. Payment of $650 a month with no money down. One of my big issues is cost of utilities. Her gas and electric averages $125-150 per month. In the poorly insulated apt they lived in it was close to $300 when it got real cold or hot. They do not have any illusions that their home will appreciate and make them wealthy. Also they were lucky to be transferred to Indiana. As my SIL was offered a raise to leave San Diego when they moved. Lower cost of living and better income. A Win Win except for me not seeing them as often. And after 5 years they have about 10% equity.

gagrice · December 2013

No money down is not likely from any bank. When dad holds the 1st anything is possible. They would have financed through a bank with a nice down, if I had not made them a better offer. It is a win for us both. I am getting 4.5% on money that would bring less than half a percent in the bank. They are saving a lot and putting it away for my grandson's college. So it makes me money and likely saves me money.

gagrice · December 2013

@fintail said:

**A raise to live in a low cost of living area is like winning a lottery. ** Your relative got very lucky. And you can still visit them as much as you want - an excuse to take a road trip in the new car

That is for sure. They were struggling here living in a junkie $1200 per month apartment. Apartments in Indiana were not less, just nicer for the same money. In the 5 years since they left apartment rents went up here for those that work. You and I pay the difference on 1000s of Section8 apartments being put up at breakneck speed. They would likely be still living in a cheap apartment. As no way they could ever afford to buy a home in San Diego.

One time many years ago I considered a job offer in Ocala Florida. I was sent to school for 2 months and really liked central FL. Cost of living was far less than most places I like. I would have made about 2/3rds what I was making in Alaska. But lived a lot less expensive. In retrospect not taking the job paid off. That company got bought out and downsized. I would have a lot less in my pension. My advice is to go where you can make the most money and save, save, save, because one day you will be glad you did.

stever · December 2013

Seems a better plan to move to where you want to live and not move for a job (unless your job is your life). If you scramble too hard to be able to afford where you live, you won't have the energy left to enjoy the surroundings. Or if you make a lot of money but don't like where you live, what's the point of that? We always moved first then found jobs.

fintail · December 2013

Parental financing, lucky! Most don't have it so good

FL has cheap housing, but much of the state is kind of a pit. Although I kind of like the area from Daytona Beach northward. From what I can tell, the wage sacrifice, esp when benefits are included, is more than the low cost of living, especially for a single person. If my job was moved to a low cost area and my salary remained the same, it would be cool - but it seldom works that way. No place is perfect, so I'd rather live in a place where I have a little spending money and can put something away for tomorrow at the same time.

Somewhat on topic, I find section 8 abuses objectionable, just as I do undeserved mortgage interest deductions. I don't know if any other nation has such a system.

@gagrice said:
One time many years ago I considered a job offer in Ocala Florida. I was sent to school for 2 months and really liked central FL. Cost of living was far less than most places I like. I would have made about 2/3rds what I was making in Alaska. But lived a lot less expensive. In retrospect not taking the job paid off. That company got bought out and downsized. I would have a lot less in my pension. My advice is to go where you can make the most money and save, save, save, because one day you will be glad you did.

gagrice · December 2013

That may work if you have skills that are needed everywhere. Where would you go if you were a lug nut assembler in the UAW? Then there are people that will not move from where they are no matter what they have to do to survive in that location. Only place I can think of worth doing that would be Hawaii.

gagrice · December 2013

@fintail said:

** FL has cheap housing, but much of the state is kind of a pit. Although I kind of like the area from Daytona Beach northward.
**

Florida is a very mixed bag. I have gone to 4 telecommunications schools in FL. 3 in Lake Mary Central and one in Sarasota. I also spent some vacation time all along the Keys. Some of the Keys are great weather. Kind of expensive housing. I would have to spend extensive time looking around before I bought anything there. Big problem is insurance. My tax man moved back to San Diego after 6 years in The Villages retirement area. Got tired of playing golf every day and all the family was still here in San Diego. They did ok buying while the prices were depressed in 2008.

http://www.thevillages.com/index.htm

fintail · December 2013

You can no doubt buy a few nice houses in central FL for what your CA place is worth - but then you have a few nice places in an area that might not be as pleasant.
I think many places there are still depressed - they overbuilt, and wages aren't great. Kind of the same issue in the southeast, I think.

@gagrice said:
http://www.thevillages.com/index.htm

gagrice · February 2014

Just to keep you all up to date on San Diego real estate. It is headed to the sky again. Here is home across from a factory with a view of Interstate 5 a block away. It is the worst part of San Diego for crime. And they go up from here as you move downtown.

http://www.zillow.com/homedetails/141-19th-St-San-Diego-CA-92102/17068520_zpid/

fintail · February 2014

Sounds like Bellevue (which has a fraction of the population)

Here's a typical condo in my neighborhood

A LOT of these have sold to sketchy offshore parties, looking to buy residency and play the speculation game. It's funny seeing these supposedly 95% sold highrises at night, where 70% of the windows are dark.

Here's a typical 1960s west Bellevue subdivision house - look at the 1991 price, many young people are pretty bitter about this trend. Many boomers who were nothing but lucky now act like they are the second coming of Warren Buffett because they are house-rich.

gagrice · February 2014

Your prices have mine beat by quite a bit. I would be tickled to get $900k for my place. Mine is a ranch that is bigger and much newer. Plus a view of about 270 degrees and an acre of land. I remember looking at places in Portland and thought they were over priced as well.

Here the boomer is only paying taxes on the price paid with minimal increases allowed (Prop 13). A house bought 30 years ago for $100k worth $700k today, the owner still paying taxes on that original purchase price. My neighbor pays less than $2000 per year on a comparable sized home to mine. I just got my tax bill for $6500. About time to sell and move.

This will go at auction for about $800k

http://www.zillow.com/homedetails/15596-Sleepy-Creek-Rd-El-Cajon-CA-92021/16897469_zpid/

This will not sell until summer is my guess. I think you get a lot more house for the money here than the NW.

http://www.zillow.com/homedetails/9633-Red-Pony-Ln-El-Cajon-CA-92021/16896412_zpid/

stever · February 2014

Our property taxes run around $700 a year; be hard to stomach the numbers in the recent examples. Wonder if two feet of snow in the yard and below 20° highs for two months has anything to do with that. Or maybe it's the paucity of jobs. Living in a van down by the river keeps sounding better and better.

fintail · February 2014

No tax rules like that here, property taxes aren't low. and the condo HOAs can be insane, a decent car payment. This area is inflated by a core of high paying jobs, offshore wealth, and a shortage of land. Doting helicopter parents don't hurt either - I don't know anyone my age who owns a house and didn't at least receive significant down payment help, if not more. Not to mention, I think today, people are more willing to devote a higher percentage of household income to mortgage. I can't believe banks let it happen.

I don't like those early 00s style mcmansions, kind of vulgar, and often shoddy. The second house there looks better, but still too big for my tastes - I don't want to cool, heat, and clean something so big, and if I have land, I will just start accumulating parts cars - not good

I had my eye on this thing, which sold recently - neat old house, not ostentatious, good area. I hope it isn't a teardown. Street View

Looking at the 2007 price makes me laugh a little, while the 1996 price makes me cringe.

gagrice · February 2014

That is a cute little house. The only thing keeping it from being torn down is the lot has no waterfront or view. Crazy prices. Not my cup of tea for sure. I want at least an acre with waterfront or preferably my own lake for irrigation water and fishing. Nothing like that really available on the West coast for a reasonable price. Not to mention the ocean fish are all suspect since Fukishima.

fintail · February 2014

West coast housing prices might go up no questions asked, of course, good place to hide that dirty money

gagrice · February 2014

@fintail said:
West coast housing prices might go up no questions asked, of course, good place to hide that dirty money

I didn't know that was going on. Sounds like Australia is the smartest of the countries. My old gardener must not have scraped together the $1000 he needed to get his Green Card renewed. Haven't seen him for several years. Last I saw him he borrowed some money from me to get it renewed. So you can buy your way into all these countries. Money talks and BS walks. I don't see the draw to Vancouver. I could live on Vancouver Island. That is nice and peaceful.

fintail · February 2014

There are lots of theories about the Vancouver real estate market, and how profits have been mined from it. It's pretty bizarre, insane for a city that is still fairly provincial in some ways. I think all of Canada's urban real estate appreciation is driven by immigration.

Indeed, the ticket price needs to be 5MM or more. Let the crooked officials and sweatshop zillionaires work for it - these aren't striving working class people looking for a better chance. My area already sees a lot of investor visa types, this will just increase it. Maybe I need to start selling MBs.

gagrice · February 2014

@fintail said:

Maybe I need to start selling MBs.

I think the luxury car market is the safest one for the forseeable future. I would sell real estate if I wasn't so lazy and comfortable. I don't know if you saw that Mexico COL website I posted. Mortgage interest in Puebla is 26% Downtown high rises are not too badly priced.

http://www.realtor.com/international/listing-detail/Colonia-San-Jose-Vista-Hermosa-Puebla-Puebla_Puebla_Puebla_MX_9013545?source=web

fintail · February 2014

Cheaper than here anyway. I'd want an engineering report though, judging by the unreinforced masonry I see in smaller buildings there.

Car dealer or realtor...hmmm...:)

@gagrice said:

gagrice · May 2014

The boom is on again in CA. San Francisco is being gentrified. San Diego prices back to 2007 levels and Los Angeles is Mansionizing. Get me outta here......

Under the new rules, a 5,000-square-foot lot in a typical residential zone generally could not have a home of more than 2,500 square feet of "residential floor area," including extra buildings — or a total of 50% of the lot size. Before the change, a home of up to 7,000 square feet, not including garages, could be built on the same size lot, according to the planning department.

But the law includes special exceptions. Builders can get a bonus to build 20% or 30% larger than ordinarily allowed if they design their homes to be environmentally friendly, or if they adhere to certain scaling requirements of home facades and upper floors. The home Edri is building on Stanley Avenue, for example, was allowed hundreds of feet of additional floor area because part of the facade was recessed, according to its building permit.

http://www.latimes.com/local/la-me-mansionization-20140505,0,2947923.story?page=1&sc=5914894196891972245#axzz30u5wqERy

fintail · May 2014

That's a big thing in some of the nicer areas of Seattle metro - older (often modest) houses being torn down and big ugly faux modern boxes being built to replace then, often with money from nowhere, if you know what I mean. They usually look ridiculously out of place in the neighborhood. Some complain, but the golden rule applies, and this is a new gilded age of sorts. Prices haven't returned to bubble levels yet though.

The monster house ideal has been present in Vancouver for decades, with lots of negative sentiment from locals. Usually undocumented offshore money buys its way in, and builds a big tacky house in an old middle class neighborhood. Here and there, probably a good vehicle for money laundering.

gagrice · May 2014

My daughter is considering moving from Indiana to TX. Scanning zillow I have never seen so many BIG houses. You get North of Dallas and they are jammed together like sardines. Most 3k to 5k sq ft. The other thing are Property taxes in TX are high. Of course you save with no state income tax. I worked with some guys from Tyler TX. There are some dandy lakes around there with not so bad prices. I am thinking of downsizing to something like this. I like the idea of living on a lake.

http://www.zillow.com/homedetails/16879-Wilson-Rd-Tyler-TX-75707/52327081_zpid/

gagrice · May 2014

I cannot tell you how many of these over 10,000 sq ft places on the market. All look like they are sitting empty. Built about the time the housing bubble popped. My wife said no to this one.

http://www.zillow.com/homedetails/528-Bay-Hill-Ln-Kerens-TX-75144/87475266_zpid/

fintail · May 2014

Big gaudy mcmansion in Tejas built in 2007 - hard to believe! Lots of big houses in TX, cheap too - think about that. I don't know if I'd want to maintain something huge and likely poorly built when I am in retirement, but that's just me. That lake house looks pleasant enough, makes me cringe to see that for the same money in my area, you'll get an unrenovated 1100 sq ft 60 year old tract house in a non-spectacular area.

Interesting study about renting vs buying by city

gagrice · May 2014

@fintail said:
Big gaudy mcmansion in Tejas built in 2007 - hard to believe! Lots of big houses in TX, cheap too - think about that. I don't know if I'd want to maintain something huge and likely poorly built when I am in retirement, but that's just me. That lake house looks pleasant enough, makes me cringe to see that for the same money in my area, you'll get an unrenovated 1100 sq ft 60 year old tract house in a non-spectacular area.

Funny we have talked about selling out and renting where ever we want to check out. We have so much stuff we should get rid of. Except our very large library of over 2000 books. Many 1st edition classics. That also makes it hard to move period. We just don't want to be in CA when they go bankrupt.

A couple things struck me about that huge house on the lake. First it is within commuting distance of Dallas. It is empty which must mean it belongs to the bank. And the current taxes are over $20k per year. Not for me.

This is more my speed. I can afford to own this and not have to sell the home I am in. We plan to look at a few places in June when we head to Indiana. A place like this we could put in a VRBO pool and generate a bit of income. And have a place to vacation and stop off on trips back East.

http://www.zillow.com/homedetails/21767-Lakewood-Ln-Chandler-TX-75758/75265512_zpid/

fintail · May 2014

Time for a living estate sale or auction. You can't take it with you, and some collectibles might be at or past the height of their market.

The 70s house is kind of cool looking, I like the architecture of custom semi-modern homes from that era. Looking at the price of that makes me cringe compared to what it would be in my area - probably low seven figures.

@gagrice said:
http://www.zillow.com/homedetails/21767-Lakewood-Ln-Chandler-TX-75758/75265512_zpid/

gagrice · May 2014

This is interesting:

Even as deep-pocketed institutional investors pull back on buying homes, all-cash deals accounted for an all-time high of 43 percent of total homes sales in the first quarter, according to RealtyTrac.

The demand is high, supply is low and that is precisely why more homebuyers today are relying on cash to be competitive. It is not just investors.

Indeed, institutional investors, which bought large swaths of distressed properties in the past few years, are actually slowing their purchases, down to just 5.6 percent of all U.S. residential sales in the first quarter of 2014 from 7 percent one year ago, said RealtyTrac.

"Strict lending standards combined with low inventory continue to give the advantage to investors and other cash buyers in this housing market," said Daren Blomquist, vice president at RealtyTrac.

http://www.cnbc.com/id/101654929

fintail · May 2014

Other cash buyers = sketchy unregulated offshore money and various launderers? I don't know how many actual normal working single property owning people are buying for cash these days - not people under 50-60 anyway. Or maybe flippers, as that still seems to be a big thing - maybe even flippers selling to flippers.

gagrice · June 2014

Prices are slowly rising around me. Nothing like NYC. This just blows me away.

“I’ve never seen anything like it,” said John Gomes, a broker with Douglas Elliman Real Estate. He has sold 21 of the 25 units at 215 Sullivan, a new development in Greenwich Village, the majority from a desk at his office in Chelsea. “The model apartment wasn’t finished, and we were able to sell more than half the units just off of floor plans and finishing boards.” Mr. Gomes and his partner, Fredrik Eklund, have sold $485 million worth of real estate so far this year, as much as they sold in all of 2013, he said.

The luxury market has been strong for some time, but it exploded in the first quarter, with prices jumping 45 percent to an average of $7.4 million from $5.1 million, according to data from the appraisal firm Miller Samuel. That is the largest year-over-year increase in six years. Driving the market has been a staggering lack of inventory. Just 174 new condominium units came to market in Manhattan in the first quarter, a 73 percent drop from the first quarter of 2013, when there were 640 new units, according to data from the Corcoran Sunshine Marketing Group. In all of 2013, there were about 2,500 new condominiums, a nearly 70 percent decrease from the roughly 8,000 new units at the height of the last real estate cycle in 2007.

http://www.nytimes.com/2014/06/01/realestate/new-yorks-multimillion-dollar-condo-market-booms.html?hpw&rref=realestate&_r=0

fintail · June 2014

Some areas around Seattle are seeing 20% increases from this time last year. It's pretty crazy, as market fundamentals don't support it.

A lot of the higher end housing market and modern condo market seems to be pushed up by (often sketchy) offshore money, too. I know of a building near me where units start around 600K that claims to be sold out, yet is 75% dark at night, and during the day one can see the units are obviously empty, unlived in since completion a few years ago. BRICers looking for a place to run in case things boil over, I think. I know that's the case in Manhattan, which is a playground for that set.

stever · June 2014

Viewed a dozen of so houses in Las Cruces last week (and a few dozen more on the MLS sites) for our impending move from the UP.

Found a "cheap" one in foreclosure but it needed work to fix it where we would enjoy living there. Windows, some limited remodeling, maybe $30,000 worth total. That would put the house in the higher end of the homes in the neighborhood (another attraction - very walkable and close to stuff). But it didn't really pencil out so we didn't follow through after the bank countered our offer.

Now we're looking at a pricey (for us) custom home with a view. Not walkable (it's perched on its own little hill) and it's about 3 miles to the nearest shopping and restaurants. But it's got all the bells and whistles and needs no work.

My wife keeps telling me to buy a more expensive house since if one of us winds up in long term care, the feds will let the other spouse stay in the home, even if we spend all our other "cash" assets on health care. The house will be the savings account if one of us dies and the other then decides to sell and move. And we starting to get of that age ....

stickguy · June 2014

I think you might miss being walkable in that area.

Sandman6472 · June 2014

Houses down here in South Florida are starting to rise and, at least in my area, for sale signs usually have a "sold" on them relatively quickly. Hell, the house at the end of our street just sold for $350,000 and it has no pool! It's a bit bigger than ours, probably a 4/3, and has good curb appeal so am figuring maybe we could get $280,000 or so for our little 4/2. Checked with the county records and in our housing development, we have the smallest house with the smallest assessed value at the present time. Personally, not surprised one bit and doesn't bother me really, it fits us and sure, we'd like to change a few things but for right now, we're staying. In a couple of years, our middle child will be graduating from pharmacy school and getting a job...a good bet that we'll be moving to where ever she finds work or we'll get her a condo and the wife will commute. But we'll see.
We do need a new kitchen and master bath and painting the inside wouldn't be a bad idea but we'll see how that goes. Luckily I've got the funds put away to cover the expense and will start coming up with a plan of action by the end of the year I hope. We did the kids bathroom a few years back, the wife basically left it in my hands, and it turned out pretty good though I'd go with a different contractor next time. Kind of know what I want this time so should be fun once I make the decision to just do it. Again, I think she'll let me do most of it because she was pleased with what I did before. Also I enjoy this kind of stuff which she does not.

_The Sandman _

stever · June 2014

@stickguy said:
I think you might miss being walkable in that area.

Especially if we try to keep to the one car for the duration. Then again, that would give me an excuse to find that old Miata. There's some interesting "issues" that have come up - no septic permit, but probably not a big deal since they didn't really enforce that until 2010 or so and the tank is big enough for a 3 bedroom. Need to figure out the drain field. The seller must get a permit by law before selling.

There was a roof leak a couple of years ago (everything there seems to be tar and gravel on a flat roof). But nothing too major. We're going to do the lowball tomorrow and see where that leads.

The walkable area is a desirable neighborhood a few miles away - they have long standing water rights (town of Mesilla) so there's big trees and lots of shade. The houses sell pretty fast and some go by word of mouth. The one currently available is 5 bedrooms - way too big - and has way too much grass. I'm done with mowing (and snow shoveling).

Houses cost too much!

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