What is going on with all of this 400K homes listed at 600K (buying a home, buying)

[TheOverdog]

I saw in the newspaper the other day that DFW passed 100,000 home sales in one year for the first time. Part of that is due to a generally growing metro, but rising prices aren't scaring people away. DFW only built around 25,000 new homes, so 75,000 of those sales were existing homes being sold. DFW isn't losing population so a lot of those were move-up buyers.

[avayan]

Originally Posted by frisco19542

a lot people want to say there is a bubble have a hard time understand markets.

I think I have already been told MANY times how little I know of markets because of my expectation that homes should have remained in similar prices as a few years ago, and my expectation that a house that looks, feels and IS a 450K home should not be priced at 600K. But the truth is that EVERYTHING is a bubble! EVERYTHING dies! not 99.99% of things, EVERYTHING!!! Whatever has value today, will not on some tomorrow. When will that be? Who knows! How will it come to be? Who knows!


Everything is a bubble and every bubble will burst. The questions are when will it burst and how will it burst.


When we bought our home in 2007, a few years after it went to depreciate as much as 50K. You guys remember that! How could I have known that 2008 was going to kick us in the gonads? Ultimately, it didn't for me because I didn't have to sell! But if I had been obligated to? Uff, dear immolation of doom!


As I see it today, the risk of buying a 600K home is too big. If I could afford a 1 million dollar home, then it would be peachy to go for one of these overpriced 600K homes. And if something was to happen? Who cares! I would be a rockefellarian with so much dough in my bank account, Yeah baby, hit me big, you didn't even scratch my check book! But I am not a member of that club...

Originally Posted by frisco19542

The price of a home has no bearing what a value was two years ago.

Yes, this I understand perfectly fine! And I completely agree, 100%. But let's not forget it goes both ways. If somebody is willing to give me 600K for a house which would have been 450K two years ago just because the county is growing madly, that is AWESOME!! Yeah Baby!


What happens to that sucker when he has to sell in the down turn? Will he get 600K? Heck no! He will go "But I paid 600K for it! It should be worth more!" And the other guys will be "Well, sorry you fool! But there is a gazillion of similar homes priced at 450K at the moment, so suck it up!"


Clearly the economy is going up right now, and the only plausible mechanism is for home prices to go up. It is also very possible when the time comes for the home prices to come down, they will not go a lot. Maybe this 450K homes priced at 600K will go down to 525K. Maybe in two years they are in the 700K and in the down turn they settle at 600K. How would I know? Who can possibly know?


What I can tell you for a fact is that I waited too long and I am paying the price for it. Kind of an useless piece of information as there is not much anybody can learn from this. Unless they have access to a time machine...

[UnfairPark]

I agree in principal that what goes up, eventually comes down. However, my neighborhood in Willow Bend area was built 25 years ago and price has been continuously going up since then. My partner's home in HPISD is about 45 years old, haven't gone down once. It may take longer to sell in a bad market as there are less buyers but these markets don't tank.

If you fall for a newer area away from the job hubs, where there is plenty of land and new builds and ho hum schools then downturn will be scary.

[Katana49]

Originally Posted by avayan

What I can tell you for a fact is that I waited too long and I am paying the price for it. Kind of an useless piece of information as there is not much anybody can learn from this. Unless they have access to a time machine...

LOL

Those who forget the past are doomed to repeat it. What you were supposed to learn from your mistake was that sitting on the sidelines because of an obstinate view that houses should only be priced according to a value that YOU decide is right is only causing you to miss out on further rises in the real estate market.

Honestly, I feel for people who were planning on buying a home the past few years but were waiting to come up with a down payment or had other issues preventing them from buying. They're going to have to pay more and get less.

But you seem to think... well I really have a hard time following your logic, or lack thereof. You reap what you sow. You want to keep banging your head against the wall, lamenting these higher prices, 2-3 years from now, you're going to post a new thread whining that you should have bought a house NOW, but you can't bring yourself to buy a $600k house when it's priced at $700k.

[serger]

Originally Posted by UnfairPark

I agree in principal that what goes up, eventually comes down. However, my neighborhood in Willow Bend area was built 25 years ago and price has been continuously going up since then. My partner's home in HPISD is about 45 years old, haven't gone down once. It may take longer to sell in a bad market as there are less buyers but these markets don't tank.

If you fall for a newer area away from the job hubs, where there is plenty of land and new builds and ho hum schools then downturn will be scary.

On average, house prices in both, WP and Park Cities did drop during the last downturn. And actually pretty significantly. Even the appraisals eventually dropped, and that's with counties dragging their feet for obvious reasons. Also, many times the actual listing price meant nothing because, it would just sit forever at that price.
Lower priced (but built out areas) were affected less. The new construction (not built-out) areas were affected more.

[TheOverdog]

On average, house prices in both, WP and Park Cities did drop during the last downturn. And actually pretty significantly.

Sure, they dropped. Houses in San Francisco dropped too. But the time period was pretty short before they rose again, and higher than before, so I guess as long as you are able to wait, not having to sell your existing property into a downturn, and have a large stable fund available to buy at the bottom that won't be hurt by the market swings then you'll make out like a bandit if you are able to endlessly wait. Most of us don't really have that.

[CREW747]

I think it is difficult to grasp that the "new" prices in desirable suburbs and parts of Dallas could very well be here to stay.The growth that DFW has seen in the past decade is truly staggering.Business is booming here...Partly due to the mass amount of upper middle income families with spending power and high earning potential flocking to the DFW metro.

I work in the Legacy area.The construction going on to accomodate the new job growth down that entire stretch is massive.If you have not been over there recently,take a drive through.South Frisco/North Plano is now competitive with downtown Dallas as a job center.I would think that areas close to Legacy that offer good schools and newer housing like Frisco and Prosper are going to see further price increases in 2017-2018 with McKinney and Allen following on a lesser scale.When we moved here years ago, our goal was a newish house/new build close to work on a large lot.While I totally agree with considering older homes if the situation is right,there is value to be found in an energy efficient newish house/new build close to job centers.The last thing we wanted to take on when we moved here was major updating and high electricity bills.I would purchase our large,single-story,energy efficient, turn key home again in a heartbeat.I think a lot if people moving to this area may go in a similar direction.It seems like AC bills here can really be a surprise if you are not prepared.A 2 story house built in 1990 with 20 foot ceilings can be problematic when it comes to AC bills.

Those who have been renting for years here without a large down payment saved for a purchase will have to decide if they want to keep renting or maybe consider less expensive areas.If you have first time home buyers doing say Bedford,Forney and North Richland Hills instead of Frisco and Prosper due to being priced out,that will eventually result in a shift of area desirability.Areas like Bedford,Forney and North Richland Hills could see school reputation improve,desirability go up etc.

[Shysister]

Originally Posted by Katana49

LOL

Those who forget the past are doomed to repeat it. What you were supposed to learn from your mistake was that sitting on the sidelines because of an obstinate view that houses should only be priced according to a value that YOU decide is right is only causing you to miss out on further rises in the real estate market.

Honestly, I feel for people who were planning on buying a home the past few years but were waiting to come up with a down payment or had other issues preventing them from buying. They're going to have to pay more and get less.

But you seem to think... well I really have a hard time following your logic, or lack thereof. You reap what you sow. You want to keep banging your head against the wall, lamenting these higher prices, 2-3 years from now, you're going to post a new thread whining that you should have bought a house NOW, but you can't bring yourself to buy a $600k house when it's priced at $700k.

Totally agree and at this point OP's sentiments are redundant because ultimately he's digging deeper into his own grave by complaining about what he could have got 2 yrs ago vs coming up with a plan on how he can maximize his options in the CURRENT market.


As you stated, even if he sits around and wait for a "burst" you don't know how much the burst is actually going to be. Could be 50K or 100K+ but bottom line you will never get back what "could have been" In the end what it boils down too is as long as you're getting what you feel meet your needs, mission accomplished.


I'm sure everyone miss the days when gas was $1 a gallon but those days are never coming back but does gas go down? Sure it does but the fact of the matter is it will never go back down to being $1 a gallon. So you either pay $2+ or stop driving. It's that simple.

[Rakin]

Originally Posted by Beaching

Our realtor knew that we were not going to put our house on the market until we had a firm contract to purchase another house. There was no way we were going to lose the house we had and have no where to go, apartment living is not our way of life. Nor is renting. We are too picky to settle for any house that only has half of what we want. The OP really should have followed that example, don't sell until you have a new house under wraps, especially if you are picky.
.

That's OK if you can do the Buy without making it Contingent on the 1st house. Few sellers will take a Contingency thus many have to sell and go into temporary living.

[ThomasCrown]

Originally Posted by avayan

I think I have already been told MANY times how little I know of markets because of my expectation that homes should have remained in similar prices as a few years ago, and my expectation that a house that looks, feels and IS a 450K home should not be priced at 600K.

How many times is it going to take before you start to listen?

Your expectations are incorrect. That's all there is to it.