What is going on with all of this 400K homes listed at 600K (2014, mortgages)

[UnfairPark]

Originally Posted by serger

Yes, the prices will continue to rise indefinitely, lol.

Let's see at 20% a year, 10 years, your 300k starter home becomes:
300k * 1.2^10 = 1.86 mil.

Now the good thing is, since the taxable value increase is limited to 10%, you'll be paying taxes on only 780k or so.

Nobody is saying that. What goes up eventually comes down but is it going to come down when OP wants it or price point where OP wants it to be? I doubt it.

[TurtleCreek80]

Originally Posted by UnfairPark

Nobody is saying that. What goes up eventually comes down but is it going to come down when OP wants it or price point where OP wants it to be? I doubt it.

Not everything goes down eventually- maybe for a blip in time but consistently, prices move up. My parents paid $80k for their first home in UP in the early 1980's. It's worth about $1.1M today (just sold recently. House has never been added onto and kitchen/baths have been refreshed but it certainly doesn't have a $100k kitchen).

$80k in 1980 dollars is worth about $235k today. Even with inflation, that house's value has consistently moved upwards over the last 35 years.

Same thing with my next door neighbor in PH. Original 1950's owner paid something like $20k for the house then - no expansion, and not much remodeling at all. $20k in 1955 dollars is worth $130k today. House is worth about $750k.

[UnfairPark]

You are absolutely right. I was talking about a down market cycle. Prices can't keep going up continuously, after peak of a high demand if there is a recession then they can come down for a while. It doesn't mean they'll come to original prices or lowest prices, they may only come down 5% and then go up again. Question is that in today's market, is it worth to wait for that small change that would be neutralized by interest hike anyways.

[TurtleCreek80]

Originally Posted by UnfairPark

You are absolutely right. I was talking about a down market cycle. Prices can't keep going up continuously, after peak of a high demand if there is a recession then they can come down for a while. It doesn't mean they'll come to original prices or lowest prices, they may only come down 5% and then go up again. Question is that in today's market, is it worth to wait for that small change that would be neutralized by interest hike anyways.

Gotcha. It's VERY hard to time any market (stocks, real estate, etc). If someone is going to buy a home and stay there for 7-10+ years, "buy now & hold" is usually the most successful strategy.

I think that once rates really start to increase, it will put more fuel on the fire in the short-term as people get worried about being priced out due to rates. Then, things should stabilize. High end market ($2.5M+) in Dallas has started to stabilize this fall.

[oldoak2000]

Originally Posted by avayan

I know we are riding in a sellers market (or so I've heard), but after selling my home am kind of stuck in this hole as every home resembling what I am looking for is priced in the ~600K range. These are homes that were priced in the 350K's by mid 2013. How is it possible that anything almost doubles in price in a mere 3 years? Some of these homes would require some serious leap of faith to even acquire at 450K!
I am thinking this is a bubble and it will burst which is why there is no way I can even entertain getting on such ridiculous wagon!
Anybody has some sort of indication of when this bubble may burst or if this is just how it is going to be from now o
The homes I refer to are 1 to 2 acres, between 2500 and 3500 SQFT and built between 1975 and 2000. The towns I have been looking at are Prosper, Lucas, Frisco, McKinney, Allen and Parker.
And no, they don't mention having a gold mine in their backyard...
Thanks for your input!

I haven't read all of thread, but you need to be looking in Lake Cities area, and not prostper/lucas/frisco....

but don't wait too long, the 300/400 k homes in this area will DOUBLE in next year or two (NEW Lake-Lewisville bridge open and NEARING COMPLETION - will open-up MASSIVE migration to the area....

[numbersguy100]

Originally Posted by oldoak2000

I haven't read all of thread, but you need to be looking in Lake Cities area, and not prostper/lucas/frisco....

but don't wait too long, the 300/400 k homes in this area will DOUBLE in next year or two (NEW Lake-Lewisville bridge open and NEARING COMPLETION - will open-up MASSIVE migration to the area....

dude, stop shilling for this development. it's annoying and clearly unrelated to the topic of this thread.

[TeamLynn]

That's our market and a perfect price storm.
You get the people moving with Toyota and other CA companies.
One just told me they live in a 2bed 1bath about 40 years old a couple of blocks from the beach.
They think it is worth mid 700s....so they think the $400k house that is now $600k is a bargain.

It doesn't look like or feel like a bubble, but lots could happen.
What if new president makes the H1b visa go away?
That could kill Collin county.
What if China real estate bubble crashes, then their banks crash, then Japan crashes.....
Then I think you could see some effect on the $600k frisco and Prosper home.

What you want is going to be further out I expect.

[HP48G]

Originally Posted by TeamLynn

It doesn't look like or feel like a bubble, but lots could happen.
What if new president makes the H1b visa go away?
That could kill Collin county.
.

Then we're safe because the president can't make any visa go away. It takes an act of Congress to modify any existing visa program.

[mSooner]

70% in Coppell sounds a bit high. I would have guessed 30% to 50%.

Sure, Zillow may make you think a house is worth more than it is. The truth comes when you actually place a house on the market.

Rereading this, it seemed high to me too. I realized I did the math incorrectly. Let's blame it on having three children 5 and under and a drive by post...I feel stupid now.

Actual increase: ~48% in 4.5 years. This is based on the actual recent sale prices of similar homes in our neighborhood with the same floor plan and similar (or honestly less) upgrades. It was appraised by a bank for a refi at a 30% increase 1.5 years ago. The additional 18% in the past 18 months was honestly unexpected. Still not bad for 4.5 years!

FWIW, Zillow has been pretty spot on in the past few years for our neighborhood. I have definitely seen instances where it is not, though.

Honestly, it is something we never expected--and I would be surprised if it goes up much more in the next 3-5 years before we sell. I'll be more than happy to get what it is "worth" now in 5 years.

Conversely...I've been eyeing larger homes in Coppell, Argyle, Colleyville and a few other areas for a few years--we are hoping to end up in one of those areas and I like to keep an eye on the market and just dream. What we could get (even in the higher price ranges) for a set amount has most definitely decreased. You pay at some end unless you move to a cheaper market.

[Lowexpectations]

If you didn't sell until Aug 2016 didn't you benefit from the appreciation yourself?