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I assume that you're referring to a specific location, because there have been (literally) tens of thousands of new houses built in Omaha in the past 10 years. To the point that I've been dumbfounded, wondering who in the world is buying them. There have also been thousands of apartments/condos/townhouses built in midtown and downtown during the past 10 years. Honestly, I don't know where all the people are coming from.
The same is true where I live (Loudoun County, VA). In the past ten years construction has skyrocketed. I've often wondered if it was a good thing but so far they seem to be selling.
Inventory still seems to be tight for resales, so I guess all this building isn't hurting our chances of selling our house (I hope). Although I can't fathom who all these new buyers are.
On a side note, it's interesting that not everyone wants the new construction being built here, which seems to be either tall and skinny townhouses (buyers want at least a little bit of yard for kids to play in) or 5,000 sf houses (buyers don't need something that big and can't afford the prices). The goodness we own a smaller sized resale with a yard, not sure inventory is quite as low for bigger resales.
I'm not buying unless I can get a good deal, because I don't wanna be stuck with a house worth less than the mortgage.
Some experts are saying that this is different from the last bubble, and the market won't crash. But other experts, including a guy who predicted the last crash, are saying that it will crash. I don't wanna be one of the people who buys an overpriced house at market rates right before the crash. So I won't buy unless I can get a great deal.
I am thinking about buying something in a deeply rural area, with stable house values that have not changed. Then waiting to buy something closer to the city when the market crashes and I can get a house for less.
I'm also thinking about doing the "RV living" thing. Then we can move around the state, and test-live in different communities to see where we want to buy when the prices come down. I have a friend who sold her house and is living in an RV, and she really likes it. Another friend is thinking of doing the same thing, and is closing on the sale of her house this month. She bought her house for 180k about 3 years ago, and just sold it for 255k. If she waits until the market tanks to buy a new house, she could get another bargain on a nice house.
We're looking at doing the RV thing (again, we did this until we found our current house) but this time I'm pushing to buy a one acre lot in a place that we like (but don't LOVE) as a backstop. From what I can tell in the places we're looking building is less expensive than buying existing as long as you're reasonable when you build and have a hand in the build.
New build prices in AZ are shooting up as materials and labor costs have gone up, not to mention many/most of the new builds are zero lot line no yard houses.
I assume that you're referring to a specific location, because there have been (literally) tens of thousands of new houses built in Omaha in the past 10 years. To the point that I've been dumbfounded, wondering who in the world is buying them. There have also been thousands of apartments/condos/townhouses built in midtown and downtown during the past 10 years. Honestly, I don't know where all the people are coming from.
I know California, Vegas, Florida, all the big boom states weren't building. There was a glut of housing. I remember I was shopping back in 2010 and I used to literally see whole streets in Corona where there was a for sale sign literally on 90% of the houses on any street. You couldn't give a house away. I put offers over offers and banks sat on them.
I'll tell you where they are coming from. They are all getting pushed out of the high col areas. People walked in some cases. But sometimes they stayed and squatted for years because banks weren't foreclosing. So what do you think happened? People pocketed the money. Eventually they hit kicked out, they rented a few years and still had the money to put a down on a house n another state,
Remember all those homeowners who got "burned" back in the downturn are now back in the market looking to buy and have been for a while now
Remember all those homeowners who got "burned" back in the downturn are now back in the market looking to buy and have been for a while now
It's ironic that if they had just stuck the bubble out they would have probably reached today and regained all the value they lost during the bubble. -- I can't find any statistics. Maybe I'm wrong.
We have many new construction builders in our area and people are building because of low inventory. No one knows what will happen in a year, but rates are increasing so if I was in the market to buy a home I would do it now while interest rates are still good!
It's ironic that if they had just stuck the bubble out they would have probably reached today and regained all the value they lost during the bubble. -- I can't find any statistics. Maybe I'm wrong.
No you're somewhat right. I think it depends a lot on where you live. We built a home in 2006 (top of the market) and lost A LOT of value. Prices started to come up last year and we sold as we were relocating. We did recoup most of what we lost but not all. Had we been able to wait till this year we would have recouped all plus some!
Some of the "buy now or be shut out of the market, this is not a bubble" sentiment really really starts to sound just like the lead in to the last crash.
This. Exactly. We are selling our home due to a relocation, and will be renting (somewhat out of necessity) for a bit, and I'm actually glad. We were considering entering the housing market as first time buyers back in 2006/2007 and it felt like everyone was basically urging us to get in, hurry hurry hurry, the housing market is only going to go up. Man, am I glad we waited until we were ready... We bought a foreclosure at the beginning of the collapse, and although our house value stagnated for a while, we could afford it when times were tough during the recession when my husband lost his job. And now we're selling at a decent profit. I know several people who couldn't spend money fast enough in 2007 and then had to sell their homes at a loss. We barely escaped overpaying last time, through just a little patience and luck, and I really don't want to jump into something foolish this time around. I'm ok sitting on the sidelines for a little bit, and looking long enough to find a place we really want to live for the next several years without having to make a split-second, high-pressure decision in a crazy market. The inventory problem part of it WILL ease up at some point.
No you're somewhat right. I think it depends a lot on where you live. We built a home in 2006 (top of the market) and lost A LOT of value. Prices started to come up last year and we sold as we were relocating. We did recoup most of what we lost but not all. Had we been able to wait till this year we would have recouped all plus some!
Well then at least in some locales I'm right. If you had just stuck it out there wouldn't have been any bubble for you. Bubbles only count for people are moving. The value of your house while you are living in has no effect on your life. I'm living in a house I may keep for the rest of my life. It's worth a lot. Why should I care? I'll probably be dead when it's next sold. Dead people don't need houses, and I don't have any close relatives that I care what they inherit from me, no children to pass anything on to.
I see my house has gone up $100K since I bought it. Woo hoo. So not caring. It's value only matters to me if I decide to sell and relocate, something I'm thinking about since California is getting so crazy lately. I have an area in mind to move to that has much lower housing prices so I can probably move and get a better house and maybe even cash back out of the deal. Well I guess I'm drifting off topic.
I still think houses are drifting upwards in all popular markets. I still think higher interest rates are coming. I still think that if you are contemplating buying your first home there will be no better time than the present.
People contemplating changing one house to another are in somewhat a different position depending on how much equity they have and their current interest rate. However if contemplating a move like I may make, those who move from a higher cost of living area to a lower COL area may reap good benefits.
People who are changing houses but staying in the same area are in a sort of position that the house they own is appreciating at a similar rate to the house they want to move too, so they are in sort of a nice limbo where they may be somewhat isolated as both house values are moving in parallel.
But to sum it up, I think it is a good time to move unless you are happy where you are. Interest rates are as low as they will get. And if you intend to stay in your house quite some long time then a bubble may make little difference to you.
Myself I'm in either my last house or last but one, and the area I would move to if I move has a much lower COL, so I'm almost assured to come out well no matter what I do. My only questions are: do I move or do I stay? and if I move, when?
I'm in SoCal now so housing values are shooting through the roof, and I can have a pile of money in my pocket as I cross the state line if I decide to leave.
The recent thread on low inventory brought back memories of 2005-2006. Back then it was more about rising prices rather than low inventory, but the effect was the same. A few people I knew then got caught up in "must buy now while we still can" fever. Then they wished they had waited a year, because prices went back down.
Will the same be true this year? If people wait for a year will inventory return to normal levels (and the pickings be better)?
Or is this a different situation, since low inventory is mostly due to not having much new construction in recent years, plus Millennials starting to buy en masse as well as Boomers buying retirement properties (both trends that will only grow stronger over time)?
What do the rest of you think?
1) I think that all you need is one house, the right house for you, at the right price for you. It doesn't matter how many other houses are for sale if you find what you want at the price you want. I'd start looking now.
2) Life is short.
As the saying goes, I "put my money where my mouth is" in the summer of 2015, when inventory in my neighborhood was very low and prices were rising dramatically. Suddenly the perfect house came on the market! I was the first to see it, and immediately offered (and paid) the asking price, which seemed a little steep at the time. But that's OK because real estate here has been getting more and more expensive since that time, so now what I paid seems unbelievably cheap. In the long run I got a bargain. Plus, I have had the joy of living in my beautiful dream home for about 21 months by now and I have loved every day of it.
I read an article this morning about my area, where they stated that home prices have risen over 75% since 2010, but median income has only increased by 4%. That is alarming and scary to me. Very few homes in our immediate area now that are less than $300K. Feels like every person from California is fleeing to our area and not sure where the end is in sight. Several homes in our neighborhoods with little to no updates are flying off the market within a weekend. Friends of ours attempted to bid on one, and it received over 30 offers within 3 days and sold for almost $30K over asking (granted, we live in one of the most desirable school districts and zones in the area).
Will be interesting to me to see if this is sustainable (especially with the property taxes we pay here in TX). I am a bit torn right now on if I should continue to beef up my next home downpayment fund to improve our affordability (we're looking to move within 3 to 5 years). Or if I should continue to gung-ho on my retirement. Seems that I can't have my cake and eat it too and it's an interesting thing to prioritize. My current thought is to bring our retirement savings from 18-20% down to 15% for a couple of years and continue to enlarge our downpayment. With higher interest rates most certainly coming, the larger downpayment will go much further is my initial thought.
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