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Location: In a city within a state where politicians come to get their PHDs in Corruption
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I don't know that they're necessarily falling, but I do think the frenzy has stopped, and houses coming on market that are automatically pricing 5-10% above last sold comp are sitting and seeing price reductions.
I don't think people are well served by a crazy market that encourages overbidding and waiving of inspections.
But I don't see anything that resembles 2008, at all.
In 2008 we had banks qualifying questionable buyers, sometimes without proper documentation of the buyer's creditworthiness or income.
What's happening now is different. Now we have real local buyers who need financing to buy their first home getting pushed out of the market by buyers from more expensive areas coming in and outbidding them AND PAYING CASH.
If that blows up on us, it won't be because they're upside down in their mortgage. If they end up upside down in their house, it's because they overbid on a house in Podunk when they were fleeing the city during riots and covid, who eventually will have to go back to work in the city. I'm a little afraid we may end up with a glut of rural homes on the market next year because working from home didn't end up being as permanent as people thought.
But only a little upset, hopefully we will be able to get those first time buyers in on some good deals then. There's very few good deals to be found for them now.
Starting to see it quite a bit here in Virginia. Houses are starting to sit and even have price cuts.
Feeling very 2008 with people asking a ton, but nothing is moving.
Anomaly? Or first domino?
Not seeing it here. Three houses sold in my neighborhood in the $360k to $400k range within the past two weeks. They would have sold for $200k to $230k two years ago when I bought mine for 238k (twice the lot size of the others).
One that went for $370k has a construction dumpster in front of the house and all the cabinets have been ripped out so far. Whatever they do might bring resale value up past $400k.
Two more houses just went on sale for $380k each within two blocks of each other.
All 5 houses are comparable (within 100 sf) in design, size, rooms, lot size and all still have the 1980s interiors.
Of course, I am happy with the appreciation, but I'm not selling any time soon. Worked very hard finding this one and making it my own.
I don't think people are well served by a crazy market that encourages overbidding and waiving of inspections.
But I don't see anything that resembles 2008, at all.
In 2008 we had banks qualifying questionable buyers, sometimes without proper documentation of the buyer's creditworthiness or income.
What's happening now is different. Now we have real local buyers who need financing to buy their first home getting pushed out of the market by buyers from more expensive areas coming in and outbidding them AND PAYING CASH.
If that blows up on us, it won't be because they're upside down in their mortgage. If they end up upside down in their house, it's because they overbid on a house in Podunk when they were fleeing the city during riots and covid, who eventually will have to go back to work in the city. I'm a little afraid we may end up with a glut of rural homes on the market next year because working from home didn't end up being as permanent as people thought.
But only a little upset, hopefully we will be able to get those first time buyers in on some good deals then. There's very few good deals to be found for them now.
Here in Park City, there is an influx of out-of-state buyers. Most homes are 2nd or 3rd residences, and are of course being purchased without a mortgage. It is a simple portfolio asset class rebalance from one asset type (say, investment in stocks & bonds) into the real property asset class (a vacation house or two).
At least here, I don't see the potential blow-up you describe of people who must return to elsewhere for work.
In my Las Vegas neighborhood, I live in a development of about 33 homes. My entire block has turned over to out-of-state buyers, all buying via asset class transfers. My neighbors now include the founder of MySpace, a just-now-retired member of the board of directors of Tesla, the owner of a NASCAR team, the founder of Halo Top ice cream. No one bothers with a mortgage.
Last edited by RationalExpectations; 06-18-2021 at 12:29 PM..
Here in Park City, there is an influx of out-of-state buyers. Most homes are 2nd or 3rd residences, and are of course being purchased without a mortgage. It is a simple portfolio asset class rebalance from one asset type (say, investment in stocks & bonds) into the real property asset class (a vacation house or two).
At least here, I don't see the potential blow-up you describe of people who must return to elsewhere for work.
In my Las Vegas neighborhood, I live in a development of about 33 homes. My entire block has turned over to out-of-state buyers, all buying with cash. My neighbors now include the founder of MySpace, a just-now-retired member of the board of directors of Tesla, the owner of a NASCAR team, the founder of Halo Top ice cream. No one bothers with a mortgage.
Everyone’s first friend Tom? Lol. My buddy grew up with him here in San Diego and last I heard he’s living in LA.
Are you certain everyone paid cash? Did you look on the MLS or ask them all personally? The reason I ask is I know some ultra wealthy people and they all have mortgages because they can make more off their money than having it tied up in a house. I’ve actually talked to them about it. Credit is cheap, especially when you’re wealthy. Why tie up a few million when you can make a guaranteed return multiple times of what you can borrow it at?
This one just had a 2.9% price reduction.. one of the cheapest SFH in Fairfax County. We bought one just like it in 1963 for 16,500. Could have got it under 200k in 2010, 2011.
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