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Old 09-15-2018, 01:26 PM
 
25,839 posts, read 49,753,618 times
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This is why the old adage Location, Location, Location describes Real Estate.

I like homes that need work... they can often be bought right.

On the other hand... a well done home can also be a great value.

The homes that have suffered through mediocre renovations are the ones I like least.

Early on I bought a home from the 1920's that had only a single owner... the widow was 18 when they bought the home new... the last few years her cats had pretty much free run but the home was all 1920's... down to the high leg stove.

My friends were all eager for the demo party... I was on a very tight budget and spent just about all of my free time cleaning, refinishing and repairing what I had... new sash cords for the wood windows, new glazing, refinished the match stick hardwood... etc...

When it came time to sell... the home fetched the highest price ever... some of my neighbors with Harvest Gold appliances and gold fleck lino couldn't understand... they had spent a lot over the years upgrading...

Fortunately for me... I found buyers that loved stepping back in time to the 1920's... right down to the push button light switches.
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Old 09-15-2018, 06:15 PM
 
Location: Tennessee
21,009 posts, read 15,317,177 times
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Quote:
Originally Posted by Ultrarunner View Post
Property tax can be a real killer... also a disincentive to maintain for fear or taxes going up.

It also forces people from homes when neighborhood gentrify... those that can afford take over.

Thankfully, in California, property tax is not based on what your neighbor does or doesn't do... each tax bill stands alone and is based on what YOU paid for the home... not on what someone down the street paid for theirs...
Property taxes here are probably still a low rate compared to what a long time Californian pays. It all boils back to the location. Most of CA is desirable - northeast TN, aside from retirees looking for cheap mountain/rural property, is not in demand. There are no jobs here. People flock to jobs, and as long as jobs are available in any given place, the housing market won't completely collapse.

Quote:
Originally Posted by ohio_peasant View Post
And more importantly, given the glacial (if not outright negative) growth in local housing, prices, is it not the case, that improving one's house is a financially unsound proposition?

Example: $100K house sorely needs a kitchen renovation. The renovation would cost $20K. If the house were to be sold upon completion of the renovation, its market-price would rise to $110K. Ten years in the future, the house - if updated - would still be $110K. Meanwhile, the un-updated house would have declined to $95K.

In the above example, which action is the better financial proposition: to update, or not to update?
IMO, if in doubt, the best thing to do is nothing.

My grandmother has a 1200 sq. ft 3BR/2BA tri-level here. Tiny bedrooms. The master bathroom is tiny. The toilet area is so narrow that, as a muscular, 230 lb guy, one shoulder hits the vanity, and it only has a single shower. No dishwasher - original kitchen. It's not the style people want these days, in a bad school district (that was once good). It's a tough sell.

Last edited by Serious Conversation; 09-15-2018 at 06:53 PM..
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Old 09-18-2018, 09:15 AM
 
2,772 posts, read 1,504,936 times
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Quote:
Originally Posted by ohio_peasant View Post
And more importantly, given the glacial (if not outright negative) growth in local housing, prices, is it not the case, that improving one's house is a financially unsound proposition?

Example: $100K house sorely needs a kitchen renovation. The renovation would cost $20K. If the house were to be sold upon completion of the renovation, its market-price would rise to $110K. Ten years in the future, the house - if updated - would still be $110K. Meanwhile, the un-updated house would have declined to $95K.

In the above example, which action is the better financial proposition: to update, or not to update?

I suppose each of our situations makes some assumptions. Mine presumes they have no disposable (read, available extra) income and could not get a home improvement loan. Mine also assumes the priority of saving for retirement (etc) over having a new kitchen. Too many variables involved here perhaps.
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Old 09-18-2018, 09:41 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,114 posts, read 3,409,203 times
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Quote:
Originally Posted by RatherBeOnSafari View Post
2018 vs the early-mid-2000's are 2 different markets.

1. Lending requirements are stricter. No more liar loans.

2. No more obvious fraud where a housekeeper at the MGM Grand owns 6 homes. (Not joking)

3. Due to changing in non-resident home ownership law in Canada. Very high taxes and unfriendly fees to non-residents. US residents are moving back to the US. (My neighbor got caught up in this.) And the Chinese wave of people who were moving to Canada are now coming to the US.

4. Depending on where you live, not enough inventory for sale.

5. Not a lot of buyers for many years. People getting back into the game that stayed away for years cause they lost a house. Hopefully, they learned a lesson.

6. Millennials are in their late 30's to mid 20's. There are more of them than the baby boomers who are starting to pass away. Many now have the money for a down payment after living with their parents. Seen this several times.

7. Transfer of wealth from older generate to younger. Younger using the money to buy a home.
All very good points and many will agree these are why we won't see a crash but maybe a slowdown.
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Old 09-18-2018, 10:34 PM
 
Location: Gulf Coast
1,036 posts, read 547,524 times
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Today I talked with someone who has one of "those" mortgages, the ones where you only pay the interest payments for a certain number of years and now in about 5 months her payment is going to triple because now the principal is coming due also. I thought those loans were part of the recession problem and no longer given out. Don't know how they even qualified for this mortgage because their income is very limited. There is no money to fix or maintain. I fear a foreclosure is in their future.


How many of those loans are still out there?
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Old 09-18-2018, 10:53 PM
 
Location: Phoenix-Valley of the Sun
2,462 posts, read 1,206,832 times
Reputation: 3047
While I agree that lending standards are more strict, our economy is very uncertain. And with more people than ever living paycheck-to paycheck, and with more people taking out more debt than ever before, there's going to be a surplus of people who cannot afford to pay for their mortgage if/when a recession hits. (depending on the recession) Even though lending companies are more strict with their standards, they cannot help people's stupidity with debt and with people living beyond their means.
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Old 09-19-2018, 08:43 AM
 
3,562 posts, read 2,000,887 times
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Housing going lower is good from the aspect of negative inflation. Affordable housing and depth of inventory is healthy long run for the economy.
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Old 09-19-2018, 12:30 PM
 
Location: East of Seattle since 1992, originally from SF Bay Area
28,424 posts, read 50,666,198 times
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In our area where the median home price is now above $800,000, there has been a slowing in the last couple of months. The home next door, for example at $779,000 has had open house 4 weeks in a row and is still for sale. There is a sweet spot, though, and those homes under $700,000 are still getting multiple bids over asking, some with cash. Another near us is at $699,950 and went on the market last Friday. Today they are "accepting offers" and yesterday there were 3-4 cars there all day long. I expect to see a sold sign there by tomorrow. Both of these homes are the original owners from new, now paid off by boomer empty nesters moving to less expensive areas of the region and paying cash with the equity. There will be more of this in the future, adding more inventory, including us in 4-5 years.
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Old 09-19-2018, 01:09 PM
 
25,839 posts, read 49,753,618 times
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Quote:
Originally Posted by Hemlock140 View Post
In our area where the median home price is now above $800,000, there has been a slowing in the last couple of months. The home next door, for example at $779,000 has had open house 4 weeks in a row and is still for sale. There is a sweet spot, though, and those homes under $700,000 are still getting multiple bids over asking, some with cash. Another near us is at $699,950 and went on the market last Friday. Today they are "accepting offers" and yesterday there were 3-4 cars there all day long. I expect to see a sold sign there by tomorrow. Both of these homes are the original owners from new, now paid off by boomer empty nesters moving to less expensive areas of the region and paying cash with the equity. There will be more of this in the future, adding more inventory, including us in 4-5 years.
Exactly.... homes in the 650 and under are selling fast... homes at million... not so much.
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Old 09-19-2018, 01:11 PM
 
25,839 posts, read 49,753,618 times
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Quote:
Originally Posted by Pat Answers View Post
Today I talked with someone who has one of "those" mortgages, the ones where you only pay the interest payments for a certain number of years and now in about 5 months her payment is going to triple because now the principal is coming due also. I thought those loans were part of the recession problem and no longer given out. Don't know how they even qualified for this mortgage because their income is very limited. There is no money to fix or maintain. I fear a foreclosure is in their future.


How many of those loans are still out there?
There have always been adjustable rate mortgages... plus a lot of variations.

Loans intended to be sold on the secondary market have become much tighter but these loans do not reflect the entire marker... just the lion's share.
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