Home prices have increased a lot in 2 years in North Fort Myers. (short sales, to rent)

[JPrzybylski07]

Originally Posted by LifeIsGood01

People have always bought homes even when mortgage rates were 17%.

The magical bubble from last time won't happen if you understand that it was wall street and crooked bankers giving mortgages to unqualified people and then selling them as stable investments.

That's true, but our dollar had a heck of a lot more purchasing power when interest rates were that high too so it took less dollars, and no wages of today have not kept up with cost of living. Everyone knows and would agree with that.


That last magical bubble never ended, the government and Fed just decided to pump massive amounts of cheap money back into the economy to replace all the wealth that was lost on paper further devaluing our dollar .


The crazy appreciation most of the country's real estate has seen the past 5 years is simply unsustainable but the government doesn't want this bubble to pop because people are happy as long as they are rich on paper (equity).


With the average car payment being as high as it has ever been, and credit card debt at and all time high, along with half of American's not even having $500 in savings for an emergency, people are simply too overleveraged and our economy is skating on thin ice. The end.

[JPrzybylski07]

Originally Posted by LifeIsGood01

Last time what? They went down and they came up. Until the banks and wall street can find some other scam to come up with things are fine.

The point is you shouldn't buy a home you can't afford. The people who stopped paying their mortgage because the home dropped in value and now regretting it because prices are back up and now they are probably renting and rent prices are going up fast too.

Anyone who buys a home with a mortgage is buying a home they can't afford. As far as those 50% cash home buyers in our SW Florida market, many of them are just investors that are going to rent out the homes and inflate the rental market. If interest rates were higher they would be pulling their money out of real estate to get their returns in other more conservative investments.

[Compression]

Originally Posted by LifeIsGood01

Starter homes and older inexpensive move in ready homes are the ones that have increased the fastest, In fact they are mostly gone. When 2 years ago you could find a $60K home now they are closer to $100K and that's some homes with problems.

Does low inventory increase appraisal values? Say those low prices homes that are now $100K but there are no comps to support them, does that mean appraisers can look at rising price trends or do they just have to go by sales in the area?

There is a tiny 2/1 about 625 feet and they are asking $115K and a company bought it for 35K last year and fixed it up. I know they are dreaming and don't understand this market. I know it won't sell any time soon for cash and will never appraise for what they are asking any time soon.

They look at price trends in the specific area, first. Absent any comps, they have to necessarily broaden their parameters. And make allowances + or - based upon the area and amenities of the individual properties being compared to the subject property.

Price trends are tracked on a monthly basis.

Price trends are tracked by the local board of Realtors, whom have all the data at their finger tips via the MLS, and the county makes available deed recordings to track the private sales (for sale by owner transactions). A certified real estate appraiser will avail him/herself of all resources.

Those trends are converted into annual percentages, divided by 12 (months in a year) and calculated to the average monthly increase of value. If a Realtor places the property on the market with a 90 day (3 month) listing, typically that asking price should reflect the current value, plus three months of market appreciation (where the theoretical value should be at the end of the listing period). The concept being, that offers entertained during the listing period should be pretty close to the true market value at any given time.

There are of course always outliers with some owners asking (demanding) outrageous prices they will not see, any time soon. It happens.

I'm no expert on appraising, but these are the basics as I understand them. Any Realtor here could give more in depth insight, or correct me where I might be wrong.

What I find perplexing about your post is your second paragraph asks for answers to questions, demonstrating that you have no understanding of how it all works, then the final two sentences in the third admonish others for not understanding the market, and making a blanket statement they will never appraise nor sell for cash.......


CN

[JPrzybylski07]

Originally Posted by LifeIsGood01

Last time what? They went down and they came up. Until the banks and wall street can find some other scam to come up with things are fine.

The point is you shouldn't buy a home you can't afford. The people who stopped paying their mortgage because the home dropped in value and now regretting it because prices are back up and now they are probably renting and rent prices are going up fast too.

Many of those people could not afford those homes even if they wanted to keep making payments. Many people were simply caught playing hot potato trying to flip the property for a profit before even making the first mortgage payment.


A lot of those people, even if they wanted to keep making their payments despite their homes dropping in value, could not because of job loss.


Also....even if they did continue making their payments it would take almost 10 years for them to break even on appreciation. So in 10 years their mortgage payments were basically 90% interest, meaning they barely built up any equity. Point is, don't buy at the height of a real estate market unless you're old and it's the last place you plan on living in.

[LifeIsGood01]

Originally Posted by JPrzybylski07

Anyone who buys a home with a mortgage is buying a home they can't afford.

That is not true. I can't afford to rent, but I can afford my mortgage. My mortgage including PITI is 50% less than what the last renter here was paying and about half of what the going rates are now for rent.

[LifeIsGood01]

Originally Posted by Compression

They look at price trends in the specific area, first. Absent any comps, they have to necessarily broaden their parameters. And make allowances + or - based upon the area and amenities of the individual properties being compared to the subject property.

Price trends are tracked on a monthly basis.

Price trends are tracked by the local board of Realtors, whom have all the data at their finger tips via the MLS, and the county makes available deed recordings to track the private sales (for sale by owner transactions). A certified real estate appraiser will avail him/herself of all resources.

Those trends are converted into annual percentages, divided by 12 (months in a year) and calculated to the average monthly increase of value. If a Realtor places the property on the market with a 90 day (3 month) listing, typically that asking price should reflect the current value, plus three months of market appreciation (where the theoretical value should be at the end of the listing period). The concept being, that offers entertained during the listing period should be pretty close to the true market value at any given time.

There are of course always outliers with some owners asking (demanding) outrageous prices they will not see, any time soon. It happens.

I'm no expert on appraising, but these are the basics as I understand them. Any Realtor here could give more in depth insight, or correct me where I might be wrong.

What I find perplexing about your post is your second paragraph asks for answers to questions, demonstrating that you have no understanding of how it all works, then the final two sentences in the third admonish others for not understanding the market, and making a blanket statement they will never appraise nor sell for cash.......


CN

thanks for the info. my point was that no one is going to pay cash for a tiny 2/1 home in a flood zone when they can buy a much larger 3/2 for the same price. That 2/1 that they are trying to sell is worth $60K at most and they are asking $115K.

I have some understanding of how it works and I was asking questions to be more informed.

[Mr Cape Coral]

Appraisers will not appraise a property above what the market is for that area.
Home sales in the $150,000 and lower have gone down over 50%. Why? Because they are not out there.
With low inventory, it is not unusual for a home to have multiple offers and the winning offer could well be above the list price.
The bank does not run those numbers up.
The real estate agent does not set the sale price, the seller does not set the sale price, the appraiser does not set the sale price.
The buyer sets the sale price.
People want to live in a certain area and they will pay to live there.

[LifeIsGood01]

Originally Posted by Mr Cape Coral

Appraisers will not appraise a property above what the market is for that area.
Home sales in the $150,000 and lower have gone down over 50%. Why? Because they are not out there.
With low inventory, it is not unusual for a home to have multiple offers and the winning offer could well be above the list price.
The bank does not run those numbers up.
The real estate agent does not set the sale price, the seller does not set the sale price, the appraiser does not set the sale price.
The buyer sets the sale price.
People want to live in a certain area and they will pay to live there.

The only good thing is once that buyer buys that property be it cash or the buyer paying the difference of the appraise value it becomes a comp for the next seller. the only bad part is if you have a unique or smaller property that investors are holding on to as rentals, you won't be able to find comps.

[FireStation46]

The market rules

[LifeIsGood01]

Originally Posted by FireStation46

The market rules

Cash Rules Everything Around Me.