Housing market is too far gone.

zizi

OT Supporter
Jan 11, 2005
9,810
Why aren’t you shopping with a budget

We are but prices seemed to have dropped over the past 1-2 weeks and seeing homes that might have been in the 500s now in the 400s. When we were looking 2+ weeks ago the inventory in the 400s in the areas we wanted seemed to be a lot lower.
 

Menger

OT Supporter
Nov 23, 2011
23,792
That sucks, sorry, but ever onward and upward. Good luck on the next one.

Edit: the 5k repairs; does that mean you are expecting the sellers to fix items found during inspection?
Thanks. Realtor said you could agree to not bother them about anything the inspector found as long as it was under $5k of repairs needed. Basically agreeing not to use small things the inspector finds to nickel and dime them and renegotiate. That’s as much as I took from the explanation.
 

hootpie

OT Supporter
Oct 5, 2003
48,218
Northern California
That’s normal in an appreciating market, nothing alarming about it. Just the nature of the sales comp based methodology.
Nothing is normal about how much the market has appreciated here. $2M for a 3br/2ba 1300sq ft built in 1952 is abnormal at best.

3 homes appraising for exactly what the offer is when the offer is $200-$300k over an already insane price is quite suspicious.

People are relying on inflated stock prices to purchase inflated homes. This isn’t going to end well.
 
  • Like
Reactions: Jd and intro_vert13

Boing

OT Supporter
Jun 30, 2007
88,097
Anyone got any good docs/advice/links on buying new construction?

Things to look for, be aware of, include in contract etc. I will likely be bidding on some released homes soon, and so will my soon retired parents, so just looking to do all the research possible before we dive in.

I assume the first step would be to get a buyer’s agent to help with the contracts/bidding offers?
Are you able to choose the options in the house or are you just buying something that's already being built and available?
 

Slimmy

Yep.
Mar 14, 2000
140,484
Ft. Lauderdale
Are you able to choose the options in the house or are you just buying something that's already being built and available?
They’re releasing them pretty much as is with options already chosen, can do minor things like upgrade cabinet colors or change tiles but not much really. Nor do I think I would option anything extra, just bid on one that matches my preferences.
 
Last edited:

A.Smith

Member
Sep 19, 2015
60
Nothing is normal about how much the market has appreciated here. $2M for a 3br/2ba 1300sq ft built in 1952 is abnormal at best.

3 homes appraising for exactly what the offer is when the offer is $200-$300k over an already insane price is quite suspicious.

People are relying on inflated stock prices to purchase inflated homes. This isn’t going to end well.
You’re definitely wrong about this.
 
  • Like
Reactions: Mejnoon

kwhitelaw

OT Supporter
Sep 1, 2004
41,757
virginia
Anyone got any good docs/advice/links on buying new construction?

Things to look for, be aware of, include in contract etc. I will likely be bidding on some released homes soon, and so will my soon retired parents, so just looking to do all the research possible before we dive in.

I assume the first step would be to get a buyer’s agent to help with the contracts/bidding offers?
If it's essentially a spec home with minimal cosmetic choices to possibly make there won't be much to it. Be wise to the overall timeframe they have (and you agree) to complete and deliver. In 10+ years I'd never had a builder completion not hit on time (save for a couple days) until recently due to Covid. Had some buyers get keys right around a year later than original expected settlement, with every excuse you could imagine.. my folks ended up in 2 different rentals due to it, wasn't the end of the world and luckily rates weren't crazy when they eventually did settle but it was still frustrating for all parties
 

Slimmy

Yep.
Mar 14, 2000
140,484
Ft. Lauderdale
If it's essentially a spec home with minimal cosmetic choices to possibly make there won't be much to it. Be wise to the overall timeframe they have (and you agree) to complete and deliver. In 10+ years I'd never had a builder completion not hit on time (save for a couple days) until recently due to Covid. Had some buyers get keys right around a year later than original expected settlement, with every excuse you could imagine.. my folks ended up in 2 different rentals due to it, wasn't the end of the world and luckily rates weren't crazy when they eventually did settle but it was still frustrating for all parties
They seem to be releasing these homes while already in construction, so the timeframe they’ve given us is 6-8 months after release/bid acceptance.

My biggest concerns are more contract related for things like providing our own inspections, appraisal contingencies/allowances, standard features listed for delivery, etc. Seems like we may want to at least have a real estate attorney review the contract or get a realtor, still determining if the developer will allow for that broker commission after initial contact without an agent. Can’t hurt to ask I guess.
 

Mejnoon

Well-Known Member
May 6, 2000
39,489
Omaha, NE
Nothing is normal about how much the market has appreciated here. $2M for a 3br/2ba 1300sq ft built in 1952 is abnormal at best.

3 homes appraising for exactly what the offer is when the offer is $200-$300k over an already insane price is quite suspicious.

People are relying on inflated stock prices to purchase inflated homes. This isn’t going to end well.
Yes, I realize that the recent rate of appreciation in the housing market is abnormal.

Homes appraising for exactly the contract price in an appreciating market is not abnormal, it is a function of appraisal methodology and not “suspicious.”
 

CopenKagan

Well-Known Member
Feb 27, 2003
91,243
Salt Lake City, Utah
As much as the housing market sucks right now, my sister gave me her story tonight that gives me a little faith in humanity as a whole.

She was trying to buy new construction that's intended for people in public service. She couldn't get an offer accepted because she didn't have the biggest deposit/down payment. Anyway, this same builder had another house that wasn't intended for that program that was available. So she made an offer on it and it was accepted which was $50,000 more than the other, but essentially the same house.

Well, she was working with their preferred lender, and wired her $30,000 deposit. The lender screwed up and had gotten her approved for the Workforce house instead of the one that was $50,000 more. She didn't qualify for the higher amount. So long story short, the builder offered to pay 100% of her closing costs, pay off her car, and bought the rate down a quarter percent. Granted, they 100% did it for damage control, but they could have given her deposit back, told her to kick rocks, and sold that house within a few hours.
 

Boing

OT Supporter
Jun 30, 2007
88,097
. In 10+ years I'd never had a builder completion not hit on time

Our builder missed two dates. We closed a bit over 2 months late in 2019 :wtc:

We had to sell our old house by a specific date to meet the initial closing date on the new place. We did. Then a week later the builder was like lol we can't close then it's being pushed back.

So the buyer of our old home dropped out. We sold it again a few weeks later to a couple that was ok with any delays. It was delayed again and we ended up closing on the old house and then renting it back for a month until the new house was ready.
 

Boing

OT Supporter
Jun 30, 2007
88,097
determining if the developer will allow for that broker commission after initial contact without an agent. Can’t hurt to ask I guess.
The few builders I interacted with here wouldn't deal with you if you didn't have a realtor.
 

Hisma

OT Supporter
Apr 2, 2006
59,254
Reno, NV
According to @Mejnoon it will never go down again
I remember the real estate agents saying the same damn thing in 2007. You have to do some serious mental gymnastics to think the market can support these prices and volume indefinitely. "This time is different". Yeah no shit. It's not bad loans this time. It's the worst inflation since the late 70s. And in those days houses were around 100k on average. 2 things will happen from here. Rates continue to go up, & more buyers get priced out. Or, inflation keeps going up, buyers have less disposable income, get priced out.
Sales are already down across the board. This is just the beginning.
 
May 8, 2001
39,729
Colorado
They seem to be releasing these homes while already in construction, so the timeframe they’ve given us is 6-8 months after release/bid acceptance.

My biggest concerns are more contract related for things like providing our own inspections, appraisal contingencies/allowances, standard features listed for delivery, etc. Seems like we may want to at least have a real estate attorney review the contract or get a realtor, still determining if the developer will allow for that broker commission after initial contact without an agent. Can’t hurt to ask I guess.

In Colorado, builders use their own contracts that are written with many of their own protections in mind. I would definitely use either an agent familiar with new con., or an attorney.

The few builders I interacted with here wouldn't deal with you if you didn't have a realtor.

Also in Colorado, if you don't mention that you're working with a broker when you first speak with the builder. They will not pay any commissions to one.
 

Mejnoon

Well-Known Member
May 6, 2000
39,489
Omaha, NE
I remember the real estate agents saying the same damn thing in 2007. You have to do some serious mental gymnastics to think the market can support these prices and volume indefinitely. "This time is different". Yeah no shit. It's not bad loans this time. It's the worst inflation since the late 70s. And in those days houses were around 100k on average. 2 things will happen from here. Rates continue to go up, & more buyers get priced out. Or, inflation keeps going up, buyers have less disposable income, and get priced out.
Sales are already down across the board. This is just the beginning.
I called the last crash a couple years before it started. It was inevitable - once the money supply tightened and ARMs started converting it was going to spiral.

The thing that made it inevitable is that a huge number of homeowners couldn’t afford to service the debt against their homes - they were always going to have to either sell, refi or walk away eventually.

That is not the case today. Dodd-Frank tightened lending guidelines dramatically and the vast majority of loans written during this boom are fixed rate, full doc/full verification loans approved subject to reasonable debt to income ratios - pretty much everyone who has bought during this boom can afford to keep their home with out refinancing out of bad debt.

And there is still a very significant supply shortage. So while single family sales are softening due to borrowing costs they are not about to crash - there is just no mechanism by which that occurs.

One other thing - money exiting equities tends to find its way in to commercial real estate, and housing is the hottest asset class in CRE right now. The stock market softening is just going to fuel additional institutional investment in housing.
 

Slimmy

Yep.
Mar 14, 2000
140,484
Ft. Lauderdale
In Colorado, builders use their own contracts that are written with many of their own protections in mind. I would definitely use either an agent familiar with new con., or an attorney.



Also in Colorado, if you don't mention that you're working with a broker when you first speak with the builder. They will not pay any commissions to one.
Yes, that seems to be the policy with this one, so not sure can introduce one at this point.
 
  • Sad
Reactions: Downset

Hisma

OT Supporter
Apr 2, 2006
59,254
Reno, NV
I called the last crash a couple years before it started. It was inevitable - once the money supply tightened and ARMs started converting it was going to spiral.

The thing that made it inevitable is that a huge number of homeowners couldn’t afford to service the debt against their homes - they were always going to have to either sell, refi or walk away eventually.

That is not the case today. Dodd-Frank tightened lending guidelines dramatically and the vast majority of loans written during this boom are fixed rate, full doc/full verification loans approved subject to reasonable debt to income ratios - pretty much everyone who has bought during this boom can afford to keep their home with out refinancing out of bad debt.

And there is still a very significant supply shortage. So while single family sales are softening due to borrowing costs they are not about to crash - there is just no mechanism by which that occurs.

One other thing - money exiting equities tends to find its way in to commercial real estate, and housing is the hottest asset class in CRE right now. The stock market softening is just going to fuel additional institutional investment in housing.
You're the expert so I won't try to argue with you. But you still didn't address the fact that rates will keep going up until inflation is under control. If you think that won't have a cooling effect on the housing market I guess we'll just agree to disagree.
 

Menger

OT Supporter
Nov 23, 2011
23,792
There’s still a lot of job change going on, which makes people switch houses. So that will need to cool down, too. But it will.
 

Leonard Washington

Well-Known Member
Aug 15, 2004
45,801
Our builder missed two dates. We closed a bit over 2 months late in 2019 :wtc:

We had to sell our old house by a specific date to meet the initial closing date on the new place. We did. Then a week later the builder was like lol we can't close then it's being pushed back.

So the buyer of our old home dropped out. We sold it again a few weeks later to a couple that was ok with any delays. It was delayed again and we ended up closing on the old house and then renting it back for a month until the new house was ready.

My builder missed the date by 10 days which really wasn’t too bad except I was out $1k ish for a u haul rental to store my whole house belongings for the whole time and they didn’t pay for it.

I got them back when they fucked up the drainage during the build and I had a shitload of algae ridden standing water on my property, they dug an 85 foot long, 3 foot French drain which took a crew two days to do since my back yard isn’t exactly accessible with larger equipment. I know that would have cost thousands of dollars and all I had to do was pay half of the cost of reinstalling my fencing ($600).

The builders were pretty decent people, their realtor was a total piece of shit greasy weasel who I wouldn’t piss on if he were on fire. bonus: he bought on my street so I drive by him twice a day
 
  • Like
Reactions: Boing

lescivic

OT Supporter
Oct 13, 2003
1,837
Space Coast FL
On the FB group for our community that is around 2 years old and they’re finishing up the final houses. First house I’ve had with pex pipes but lady posted over the weekend that her house flooded and then others started complaining about different things. We had an issue with the sewer line but city came out and fixed it. Said the builder didn’t cap the line and was full of sand.
 

Users who are viewing this thread

About Us

  • Please do not post anything that violates any Local, State, Federal or International Laws. Your privacy is protected. You have the right to be forgotten. Site funded by advertising, link monetization and member support.
OT v15.8.1 Copyright © 2000-2022 Offtopic.com
Served by fu.offtopic.com

Online statistics

Members online
105
Guests online
40
Total visitors
145

Forum statistics

Threads
369,779
Messages
16,919,574
Members
86,876
Latest member
ddunn9448