re: Let’s discuss the housing market

Yes that would be a problem on new construction, but that shouldn’t affect houses that are being resold - if that makes sense.

Government buying houses to stuff illegals in

Covid created a shift in how people are living and working
The work from home thing is likely going to stay in some form.
That means people can move from an urban area to a sub or rural area and do their job.

Interest rates are low enough to keep the money flowing.

Building costs are at historic highs. Lumber just hit an all time high this week. Other building materials are high too.(metals, cement). Then there’s a shortage of appliances and other materials... it can be a pain in the arse to build.

Then there’s the opportunistic selling going on. I saw some recent houses go on the market just because neighbors got historically high prices. Still though, house inventory is below demand. Agents are knocking on doors now to see if people want to sell. Last time I saw that was 06.

I think the only thing that can slow the pace is a correction in the cost to build and/or an interest rate hike but I don’t see much chance of the latter.
I thought building costs would drop as we got out of covid but they’re still very high. It’s unsustainable though and will correct. That will give buyers some options.
The outlier would be some bump in the economy and we might see something along those lines but I don’t see it anytime soon.

The house two doors down from me just sold for about 45% more than it sold for three years ago. Checking the market my house has gone up in a little over 20% in last 14 months.

We're selling our house for a little over 3x what we paid in 2010.

That means we're probably renting until prices come down for houses or construction.

I've built a house before but no way could i afford it even with the windfall coming

In the height of the real estate boom in Florida house prices were climbing daily ....not weekly ..... daily.

The city and county governments jumped in and rapidly increasing values to make gains in taxes. Home owner's insurance Companies were now adding to match the market values they were seeing ...

That caused the on the edge buyers to collapse. Not a fictitious drop in the value ...The taxes and insurances ..crushed the on the edge buyers. Now you would receive your October notice ..."In December your escrow account will be short 1200 dollars." Those buyers had the mortgage payment and the escrow payment to match or default ....the game was on.

It was so bad on the Pinellas County Beaches that the Cities came in and said "All right, if you tear down this house, you can build a ten unit Condo and we are now taxing according to the value of the ten unit condo. I had owner after owner going under because of City and County taxes.

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The current market just isn’t sustainable.

That’s what they were saying about $150k west coast homes 40 years ago.that are now a million plus.

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It's not sustainable because wages are not keeping up. I keep hearing about raising the minimum wage and how wages have been flat and the widening income gaps between the rich and everybody else, yet we are having a housing boom? Both can't be true.

construction prices are crazy.

It could be that existing homes are way underpriced vs. building a new one.

Also, with all the flush of imaginary capital (trillions being created out of thin air), wealthy people have to find shelters for the cash. They are buying extra homes. Many are sitting empty.

Even banks and companies are buying property and homes to shelter their cash against inflation.

The problem is, you need to have a place to move.

But, yes, it's nuts. House next to me had 2 offers for listing price within 24 hours of it being put on the MLS.

I just bought a 2500+ square foot home in West Little Rock, nice neighborhood for $89 a square foot. It appraised for well over what we bought it for.

I know we got lucky, but i could probably flip this home and make 70k off it. It's our first home and we just locked in at a 2.8% rate so we are going to ride it out.

I viewed about 30-40 other homes, had a couple of contracts on on 2 of them and I was paying over the appraisal. I waited for over a year for this to fall into my lap.