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For transplants who are just buying a home there is quite a bit to consider.
This is the first time I've lived in an area where I can buy a home and possibly not make any money when I sell it even if I live in it for 10+ years. So the price point matters to me.
It would be nice to at least have someone point this out to me so I can weigh my options.
I notice when I click around on Redfin, it appears to me that folks who bought newer homes in Cary back in the 2005, before the housing crash in the $600s and $700s are selling their homes now 13 years later for the $600s and $700s. So they are barely getting out even. Folks that bought less expensive homes are doing much better on a % basis at least as far as I can tell.
I already know we are not going to live in our home for very long so it matters to me to know whether or not I am buying in the right price point and location so I am not going to lose money if things "normalize", ie go down in value, and I am not losing money when I sell.
For people that just moved here and recently bought a home or considering buying one at a potential peak in the housing cycle, it matters.
Perhaps if they view their home as a rapidly-appreciating asset instead of a place to live.
If they are from a place where you can buy a home for X, then in 10 years, sell it for double what you paid, yes... they should be aware things do not typically appreciate around here like that. But... news flash... they didn't last year, either. Or the year before.
We bought a house in 2013. We're going to put it on the market in the early spring of 2019, if all goes according to schedule.
We don't expect, after realtor fees, cost to stage it, spruce up stuff you don't notice (like paint scuffs and the like) because the house is full of furniture and/or it got scuffed by movers on your way out...to make a whole lot more than we bought for.
Now, we do expect more, just not dramatically more. I'll tell you why. New construction can still be had in Cary. We are not selling a home in the hot, 300k and under price bracket.
So, we know that there are plenty of people who might prefer a brand-new house to our house that was built in 2007. We aren't looking for those people. We are looking for people who want to live where our house is located, who want to buy in an established community, etc.
If the Triangle suddenly had little to no new land on which to build homes, you'd see some pretty sharp appreciation going on. The area gets over 50 new residents PER DAY.
And, as wheelsup pointed out, even if we only made back exactly what we bought for after fees and other expenses, we would still come out with a good chunk of change, because we paid IN that money and we owe far less than what we paid to pay off this house. All that principal comes back to us when we sell in the form of equity.
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Where did you buy? You can believe what you want but even the local stats show the market topped out earlier in the year.
Wait, you're saying the market topped out earlier in the year, which is when literally EVERYONE on this board has told you is the hot time? Stop the presses, Captain Obvious!
Not sure your background, but when I look at that graph, all I see is YOY the hot time was higher than last (which was higher than previous). Yeah, we get it, December is slow (which is why I bought now).
Builders serve the market, or are left behind. When customers focus on quality, good builders will deliver.
When people focus on getting 5 bedrooms and 5 bathrooms and granite and espresso for $125/SF, and builders oblige, you will have crackerboxes.
Wait, you're saying the market topped out earlier in the year, which is when literally EVERYONE on this board has told you is the hot time? Stop the presses, Captain Obvious!
Not sure your background, but when I look at that graph, all I see is YOY the hot time was higher than last (which was higher than previous). Yeah, we get it, December is slow (which is why I bought now).
But, yeah, carry on.
Which graph is "that graph" since I posted 5 of them
Tell me which one is up YOY by a significant amount. Answer: none of them, even during peak selling time. There isn't a single area that is even beating the historical average for house appreciation.
And this is probably as good as it's going to get for the next few years.
You might want to read the article I posted as well and then look at today's news on the Fed.
PS Show me where new housing prices are still going up now as you claimed. Show me the stats.
Last edited by myname_isborat; 12-19-2018 at 08:20 PM..
Which graph is "that graph" since I posted 5 of them
Tell me which one is up YOY by a significant amount. Answer: none of them, even during peak selling time. There isn't a single area that is even beating the historical average for house appreciation.
And this is probably as good as it's going to get for the next few years.
You might want to read the article I posted as well and then look at today's news on the Fed.
PS Show me where new housing prices are still going up now as you claimed. Show me the stats.
Indicators, smindicators... they all lag the market, so it's really just educated guessing. We can only assume the "next few years" and you have to know that. Don't get me wrong, I don't necessarily disagree with the logic - it makes sense. But, we have to wait and see what Spring of 2019 brings at the micro market level before we call anything.
In the end, it's different for all of us... we all have our own unique situations. Some of us owe very little on a home, some not so much on the correct side of the ledger. For those who are in it to have a nice safe place to raise a family, it still could easily be a win without "significant appreciation of the asset".
Isborat, since you like graphs, go graph housing prices vs fed overnight rates over time.
I'm not sure what your agenda is. Since by your own admission you're not going to stay put for a long time, you need to rent. Why give yourself a conniption when the housing market and what it does is meaningless to your situation?
Indicators, smindicators... they all lag the market, so it's really just educated guessing. We can only assume the "next few years" and you have to know that. Don't get me wrong, I don't necessarily disagree with the logic - it makes sense. But, we have to wait and see what Spring of 2019 brings at the micro market level before we call anything.
In the end, it's different for all of us... we all have our own unique situations. Some of us owe very little on a home, some not so much on the correct side of the ledger. For those who are in it to have a nice safe place to raise a family, it still could easily be a win without "significant appreciation of the asset".
I agree with you on all accounts. We will have a better picture in a few months. I am someone that wants full disclosure of info so I can make the best decision. The real estate industry likes to give you the positive information during the good times but you really need to be diligent when things are slowing down which seems to be the growing consensus.
This is a desirable area, with affordable house and I don't think things will drop significantly but I do think new houses, in the higher price range, out on the outskirts of the more popular communities around here are not a wise purchase right if one cares about at least getting out whole if they are selling 10 years out or less.
Call me old fashioned but I believe your choice of primary residence should be based mostly on how it immediately improves your quality of life. Safe, convenient to work/commute, good schools, amenities, recreational opportunities, general home layout, neighborhood “vibe”, cultural events, community support, traffic. If it goes up in value significantly that is a bonus -maybe? Maybe not -depending on how your income has kept up with property taxes and relative to prices of other houses in the area (if you plan to “upgrade” and stay in area).
The idea of your house primarily being an investment vehicle is what got us into that mess back in 2008.
If you want to invest in real estate then go buy up property that is not desirable now but maybe in the future. I’m thinking either on the edge of a metro or an inner-city place that could gentrify; places you would never consider living in currently. Again, not desirable now… but in time. Think of buying property in Fuquay-Varina, that is now sprawling with brand new 400K+ subdivisions, 15 years ago. Or certain locations in DT Durham or Raleigh.
Call me old fashioned but I believe your choice of primary residence should be based mostly on how it immediately improves your quality of life. Safe, convenient to work/commute, good schools, amenities, recreational opportunities, general home layout, neighborhood “vibe”, cultural events, community support, traffic. If it goes up in value significantly that is a bonus -maybe? Maybe not -depending on how your income has kept up with property taxes and relative to prices of other houses in the area (if you plan to “upgrade” and stay in area).
The idea of your house primarily being an investment vehicle is what got us into that mess back in 2008.
If you want to invest in real estate then go buy up property that is not desirable now but maybe in the future. I’m thinking either on the edge of a metro or an inner-city place that could gentrify; places you would never consider living in currently. Again, not desirable now… but in time. Think of buying property in Fuquay-Varina, that is now sprawling with brand new 400K+ subdivisions, 15 years ago. Or certain locations in DT Durham or Raleigh.
Could also invest in REITS.
Just jumping in to say that I agree with the bolded portion of your post.
I can only speak for myself but as a somewhat recent transplant to the area (moved here in March of 2017) your point factored into my calculus.
My equation was basically this.
We lived in a very expensive part of the country, 40 miles from my office (on days I went to it), with great schools where I could afford a place to live that wasn't "superficially nice" but that even in a "down or recovering" economy I knew I could get 4% annual rate of return on my house (and we did get that when we sold).
I was willing to trade all of that for a less expensive part of the country (at least for RE and RE Taxes), good to great schools, a McMansion that cost about half here what it did there, with a great neighborhood and neighbors.... and I did this knowing full well that RE appreciation here wont ever (more than likely) equate to there.
If I can sell our house someday for what we bought it for, I'll gladly walk with the equity I have in it. Anything more is just gravy.
We are fine with a "home" not a "house".
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