Triangle Housing Market (2014 update)

[MOD]

Originally Posted by BoBromhal

on the lower end, FHA underwriting will already catch a lot of the flipping.

I'd like to ask for some more details on this, as that hasn't been what I've seen. In fact, one could argue that the FHA is inadvertently supporting the flippers. A shady flipper's favorite loan is the FHA 203k, which due to it's now - onerous long term insurance requirements means it's no longer an option for an owner-occupant looking for a reasonable single closing rehab loan. Completely unintentionally, it's now a loan designed for flippers who won't be holding the house all that long.

Originally Posted by BoBromhal

if the Buyer has their own independent agent, and as importantly inspection, then the lack of proper permit process (cause you have to not only file for but get an approval on) will show up quickly.

If that's the case, I'm not sure how all these terrible flips keep selling so easily. People know but just don't care?

And I'm not sure if you were hinting that a home inspection is enough to make sure things are OK, but city/county inspections are a whole different ballgame than a home inspection. There's a lot that just can't be seen once the drywall goes up and the shingles go down.

Originally Posted by BoBromhal

I generally disagree that flipping in our market is or has been for 20 years a big issue.

From what I've seen, shady flips started to be notably common in the run up to the bubble and again now that things are mostly back. So about 10 years. And I think we have some time before the full gamut of problems show up from things that have been done more recently.

Originally Posted by BoBromhal

There are certainly a very few small areas throughout the Triangle where a savvy contractor can buy at 50-60% on the $, put in 10-30% on the $, and sell the home thus at a profit after all is said and done of 30-5% of the final price.

From what I have seen/heard in neighborhoods around downtown Durham, that's approximately the average math for someone who gets permits, does things adequately, and hires professional subs in one of the upcoming or semi-established neighborhoods BCR mentioned. The guys who are hiring day laborers to do just about everything, avoiding permits, and getting their appliances off Craigslist are, of course, more profitable, and much more common. Cleveland Holloway is fast becoming a wreck of horrible work sold at shockingly high prices.

[BoBromhal]

Intentionally or not, you've affirmed everything I've said.

For example, from my understanding of the rules, a person is going to have a very hard time getting a 2nd FHA 203K loan within a short period (must prove a hardship/valid reason to be moving), and thus should be impossible to get a 3rd one.

[superhero]

the fact that investors are "flipping" homes for profit in this market is 4 year old news. The RDU market in general is screaming for turn key move in ready homes. That is why when they hit the market some smart knowledgeable home buyers viewing homes online are making offers before they "physically" see the property.

Ask any buyer that went to place an offer on a home only to find out there were 4 other offers already on the table.

[GotHereQuickAsICould]

Originally Posted by superhero

the fact that investors are "flipping" homes for profit in this market is 4 year old news. The RDU market in general is screaming for turn key move in ready homes. That is why when they hit the market some smart knowledgeable home buyers viewing homes online are making offers before they "physically" see the property.

Ask any buyer that went to place an offer on a home only to find out there were 4 other offers already on the table.

That has certainly been our friends' experience. They've made full price offers on several homes the first time they've seen them only to have other, higher offers already in place.

They've seen one home come back on the market. From what they could tell, the bank appraisal didn't support the contract price and the sellers didn't want to budge.

[Kids_Dentist]

ITB is quite a hot market at the moment. Inventory is low and good houses are going very quickly. I had heard that a lot of the movement goes on behind the scenes but never really believed it. That is until we moved into our current neighborhood. Many houses are sold before hitting the open market. Just as an example we got an email from a neighbor who send it out to the neighborhood listserv about selling their home. Within six hours or so we watched the cars all creeping by checking it out.