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For me it has. I try not to think about it too much, but it's depressing. 5 years ago I could have bought a pretty nice place for half what they go for now. Now you could barely buy a condo for what a nice single family was going for then. But, I didn't have the credit and savings in place.
Also, our inventory seems pretty short in the sub $170k category. I'm seeing mostly 70s and 80s ranches on small lots, with ugly, outdated builder kitchens and bathrooms, often tight layouts and small rooms, 8 foot ceilings everywhere (and sometimes less), outdated bare aluminum framed windows and flat doors, old flooring, etc.
Some of these homes are listed at $160-170k now and are described as "starter homes." I'm sorry but $160k is not a starter home, IMO, especially when they need this much work. Not when the median income here is $36k a year. People think houses are cheap here, but they're coming from areas with incomes double to triple ours.
$160k here used to buy you a nice 3/2/2 newer home in a nice neighborhood with vaulted ceilings, tile floors and some upgrades all day long. Now it buys you a 1970-something 2/2/1 of about 1200 square feet that maybe has a new roof and A/C if you're lucky.
I get that the interest rates are good now, and that's nice. But I'm not interested in buying a house like that at these prices. I could see maybe $100k for a house like that, but not more, especially considering the extra $60k probably means you'll never get to do a new kitchen and baths or anything else.
Anyone else having this issue? I don't get what happened to the middle range inventory. Now it seems like older homes that need lots of work are already at around $150k, anything sub $100k is basically a cottage in a sketchy area or an old mobile on a few acres, and $200k+ for newer construction near a golf course or on the water.
Are the newer homes in a good subdivision just not getting on the market these days?
If there are any "deals" they seem to get immediately snatched up by the flippers for cash. They install new carpet, repaint the place, then list it about a month or two later for $50k more than they spent for it. Ok, I'm not stupid, I know how to use Zillow and the Property Appraiser and I can put new flooring and paint myself for way less than what you're trying to profit.
The only thing I can see is to save for 5 more years (I was planning to be in a house long ago) to try to make up the difference, and hope prices don't increase much more. I don't really see how they can bear to increase much, or people aren't going to be able to buy anything.
We're already at or worse than pre-2008 prices here, JMO.
Wanna be even more depressed? The prices you’re quoting for purchase of homes in your area will cover 20% down on most houses and closing costs maybe moving costs here where I live.
For me it has. I try not to think about it too much, but it's depressing. 5 years ago I could have bought a pretty nice place for half what they go for now. Now you could barely buy a condo for what a nice single family was going for then. But, I didn't have the credit and savings in place.
Also, our inventory seems pretty short in the sub $170k category. I'm seeing mostly 70s and 80s ranches on small lots, with ugly, outdated builder kitchens and bathrooms, often tight layouts and small rooms, 8 foot ceilings everywhere (and sometimes less), outdated bare aluminum framed windows and flat doors, old flooring, etc.
Some of these homes are listed at $160-170k now and are described as "starter homes." I'm sorry but $160k is not a starter home, IMO, especially when they need this much work. Not when the median income here is $36k a year. People think houses are cheap here, but they're coming from areas with incomes double to triple ours.
$160k here used to buy you a nice 3/2/2 newer home in a nice neighborhood with vaulted ceilings, tile floors and some upgrades all day long. Now it buys you a 1970-something 2/2/1 of about 1200 square feet that maybe has a new roof and A/C if you're lucky.
I get that the interest rates are good now, and that's nice. But I'm not interested in buying a house like that at these prices. I could see maybe $100k for a house like that, but not more, especially considering the extra $60k probably means you'll never get to do a new kitchen and baths or anything else.
Anyone else having this issue? I don't get what happened to the middle range inventory. Now it seems like older homes that need lots of work are already at around $150k, anything sub $100k is basically a cottage in a sketchy area or an old mobile on a few acres, and $200k+ for newer construction near a golf course or on the water.
Are the newer homes in a good subdivision just not getting on the market these days?
If there are any "deals" they seem to get immediately snatched up by the flippers for cash. They install new carpet, repaint the place, then list it about a month or two later for $50k more than they spent for it. Ok, I'm not stupid, I know how to use Zillow and the Property Appraiser and I can put new flooring and paint myself for way less than what you're trying to profit.
The only thing I can see is to save for 5 more years (I was planning to be in a house long ago) to try to make up the difference, and hope prices don't increase much more. I don't really see how they can bear to increase much, or people aren't going to be able to buy anything.
We're already at or worse than pre-2008 prices here, JMO.
To me, just because a home is outdated doesn’t mean it needs work. A house needs work when things aren’t functioning or are unsafe. If a new/updated house is now $250-$350k+, then an outdated house for $160k sounds like a starter home to me. You can always upgrade over time. House values usually increase over time, so buying the old $160k house and updating it, then waiting 10 years, you’ll most likely make a tidy profit. Which you use to springboard yourself into an even nicer house, if you want.
For me it has. I try not to think about it too much, but it's depressing. 5 years ago I could have bought a pretty nice place for half what they go for now. Now you could barely buy a condo for what a nice single family was going for then. But, I didn't have the credit and savings in place.
Also, our inventory seems pretty short in the sub $170k category. I'm seeing mostly 70s and 80s ranches on small lots, with ugly, outdated builder kitchens and bathrooms, often tight layouts and small rooms, 8 foot ceilings everywhere (and sometimes less), outdated bare aluminum framed windows and flat doors, old flooring, etc.
Some of these homes are listed at $160-170k now and are described as "starter homes." I'm sorry but $160k is not a starter home, IMO, especially when they need this much work. Not when the median income here is $36k a year. People think houses are cheap here, but they're coming from areas with incomes double to triple ours.
$160k here used to buy you a nice 3/2/2 newer home in a nice neighborhood with vaulted ceilings, tile floors and some upgrades all day long. Now it buys you a 1970-something 2/2/1 of about 1200 square feet that maybe has a new roof and A/C if you're lucky.
I get that the interest rates are good now, and that's nice. But I'm not interested in buying a house like that at these prices. I could see maybe $100k for a house like that, but not more, especially considering the extra $60k probably means you'll never get to do a new kitchen and baths or anything else.
Anyone else having this issue? I don't get what happened to the middle range inventory. Now it seems like older homes that need lots of work are already at around $150k, anything sub $100k is basically a cottage in a sketchy area or an old mobile on a few acres, and $200k+ for newer construction near a golf course or on the water.
Are the newer homes in a good subdivision just not getting on the market these days?
If there are any "deals" they seem to get immediately snatched up by the flippers for cash. They install new carpet, repaint the place, then list it about a month or two later for $50k more than they spent for it. Ok, I'm not stupid, I know how to use Zillow and the Property Appraiser and I can put new flooring and paint myself for way less than what you're trying to profit.
The only thing I can see is to save for 5 more years (I was planning to be in a house long ago) to try to make up the difference, and hope prices don't increase much more. I don't really see how they can bear to increase much, or people aren't going to be able to buy anything.
We're already at or worse than pre-2008 prices here, JMO.
As to what is a starter home $170K is probably less than average nationwide so it depends where you live, in places like Seattle a tear down on a regular sized lot costs $1 million or more.
If you would have bought that ugly house that you had so many complaints about 5 years ago with an FHA loan it would have doubled and you would have been able to buy a better home now.
I got lucky three and a half years ago and bought a starter home. Now that it has more than doubled in price I would not be able to afford it now. Now I would have to look a few hours away at a mobile home. Now mobile homes on private land are getting overpriced same as the ones on owned lots with HOAs on 55 and over communities.
But you better find something now because prices have recovered from the crash and will flatten, but will most likely go up. Rates going up or the economy tanking may not make them go up otherwise another Wall Street or bank scam might tank the market but that will take years and we won't know it's happening,. So buy that 170K starter before it's a $200K starter in 3 years when all the lower inventory is gone.
Last edited by LifeIsGood01; 09-22-2019 at 01:41 PM..
We bought the type of houses you described and fixed things up as we could afford to when young. You have unrealistic expectations.
Meanwhile we built equity is what we had "settled" to purchase. Over time, we were able to move up into the houses that were bigger and had more updates.
Our first place was a singlewide trailer while we worked and saved for a bigger than the trailer, but small townhouse. We lived there for a few years, doing some updating, sold it and bought a house we loved in a popular area (we paid $170K for that house, but it had burned and had been rebuilt by the owner who was also a builder). We did updates over the 14 years we lived there and sold it for $80K more than we had paid for it. Next house we bought was a bit less expensive than the previous home and we did lots of updates that we'd never see the benefit of because we only lived there for 3 years. Our current home was a flip that also had burned a few years ago. It's basically new with some cheap flip stuff that we'll need to update over time. We plan on staying here for several years, if not forever, so we're good with updating over time. This area is growing and the value of our house goes up regularly.
What I'm saying is, buy the old house that needs updates. Take your time and update it. The value will continue to grow and you'll have an investment you can turn around and put into your next home (investment).
We bought the type of houses you described and fixed things up as we could afford to when young. You have unrealistic expectations.
Agree. OP many of the things you are complaining about are not essentials, they are cosmetic. Your demands are out of step with your budget in that market. You may end up waiting forever unless you adjust your thinking. The market won't care either way.
My previous homes were modest but sound. Their values increased, allowing me to get a little more of what I wanted each step. I put a lot into my current house (partially voluntary partially necessary) but that equity just permitted me to buy what I hope will be my last house. Ironically it is smaller, simpler, but a new energy efficient build on nice undeveloped natural acreage (I don't have to spend much maintaining it, just enjoying it). Without making those previous steps it wouldn't have happened.
But you better find something now because prices have recovered from the crash and will flatten, but will most likely go up. Rates going up or the economy tanking may not make them go up otherwise another Wall Street or bank scam might tank the market but that will take years and we won't know it's happening,. So buy that 170K starter before it's a $200K starter in 3 years when all the lower inventory is gone.
I really hate this line, the go-to of those in the REIC. "Buy now or be priced out forever". One of the most well-respected economists, who called the 2008 bust and developed the gold-standard Case-Shiller index, Robert Shiller, recently said he expects home prices may fall: https://www.bloomberg.com/news/artic...-start-falling
I'm not one for telling people to time the market, but is is very clear we are very late in this market cycle. Those hoping for a 2008-style crash will be waiting forever, no doubt, as the next downturn won't be housing-caused. But, no one should rush to buy a suboptimal house in fear of being priced out. Home prices are bound to incomes, and every time in modern history, when the price to income ratio has gotten out of whack, it has corrected.
And on the "lower inventory" being gone. Remember, people are always selling. Those homes will not evaporate into thin air.
Mortgage rates have started ticking up over the past two weeks, still below 4, but up about 25bp. It's already resulted in a significant decrease in pending home sales for those two weeks from some preliminary data. That level of interest rate sensitivity is a telltale sign of a market that's overheated and peaking.
You may end up waiting forever unless you adjust your expectations. The market won't care either way.
edited very slightly. very spot on already.
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