Tiny
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Post by Tiny on Jun 20, 2021 11:31:22 GMT -5
To this point: I'm getting the feeling "investors" are buying the houses in my area, too. In the past - usually a rehabber/flipper would buy a house, rehab it and flip it to a Homebuyer. Right now, if I'm reading the public documents correctly, I'm seeing an "investor" buying the Rehabbed houses at TOP dollar from the rehabber/flipper. I'm not sure if the "investor" is planning to "flip" the house to a homebuyer in a few months at a higher price than they paid? Or if the "investor" is planning to rent the house.
There are two houses across the alley from me.... one was rehabbed (a rehabber bought it from the 'estate' of the little old lady who lived there - she died 2 years ago). The rehabber just sold it to an "investor" (for 500K) and who is now renting the house. (this is the crappy rehab job I've mentioned previously).
The other house just a nice up to date house (move in condition) that was sold (closed) at the beginning of May and appears to be currently empty. I can't tell if someone bought it to rent it or not. I'm guessing maybe they hope to re sell the house in a month or two for a quick profit.
You (generic you) can do some math to determine if "investors" are actually making money: On the 500K house in my example above: 20% down gives a 400K mortgage. Interest rate is higher than for a primary home - so I'm going with 3%... that's $1690 in PI. Property taxes will be 8K or higher plus insurance - lets just guesstimate 12K total so 1K per month. The landlord needs to "make some money" on rent - and they are at $2690 just to cover the mortgage. I'm guessing the house will need to rent for a minimum of $3500 but probably more like $4,000 or higher to make it worthwhile to the "investor".
I have a feeling who ever bought the other house is going to sit on it for a couple of months and then attempt to re-sell it for a higher price. They NEED the housing market to keep going up a little longer to make a profit.
I'll be honest - I'm not sure HOW "investors" are making money if they plan to rent the house they paid top dollar for... rents will have to go up accordingly. I'm not sure what kind of house hold income can afford 4K per month. I don't earn enough to pay that much. Maybe if I was a Double Income High Earner family...
The big risk for the investor who paid top dollar for a property they plan to rent - is what happens when they can't find renters able to pay the amount they need to make the "investment" profitable?? The big risk for the investor who paid top dollar for a property they plan to re-sell in a short period of time (and may have put very little down and maybe doesn't have the money to make more than 2 or 3 "mortgage payments" ) is what happens if houses STOP going up in value? Or if they can't resell the house quickly even for a break even amount (remember they may not have the money to make the monthly mortgage payments).
I think bad things are gonna happen for "investors" buying houses NOW... it's the top of the market.
I've been hearing this too... but I have to wonder how many "regular people" are actually looking to buy a house and if they really NEED to buy a house versus a case of FOMO (presumably they are living somewhere now - that they can hopefully continue to live even if they'd like to buy a house.)
(FWIW: I'm a landlord - but mostly I want rent to cover the yearly expenses and upkeep of the property... which meant I needed to pay as little as possible for the property I'm renting. I'm not spending any "rent income" on fun stuff for me... To date - once I got a rental fixed up and rented - I've never had to use my "day job" income on it - rent has covered all of my expenses for the properties. I'm all about the equity in the house (and OK, I like the location of one house and I can totally see myself using it as my 'retirement' home in 10 years or less or selling it and buying a house in that area with the proceeds (even if I have to pay taxes on the income.) I am not a "good business woman" when it comes to my rentals. )
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Post by Deleted on Jun 20, 2021 14:31:29 GMT -5
Well, the house next door that was supposed to sell for a price that I thought was an encouraging indicator of how much mine had appreciated is still on the market. It was supposed to close this past Friday, June 17. Realtor.com shows it as Pending but there's no addition to the "For Sale" sign here.
The prospective buyer had not been given copies of the Restrictions before he made the offer but somehow tracked down our HOA Treasurer. Weird since one of the sellers has been on our Architectural Review Board. The buyer wanted to put up a fence for his dog and maybe install a pool. Neither is permitted for lakefront lots because a fence may interfere with the view of the lake. An "invisible fence" may be a solution for the dog but not the pool.
I suspect the buyer got cold feet.
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pooks
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Post by pooks on Jun 20, 2021 16:21:43 GMT -5
Neighbor listed for 1 mil, a couple of months ago he would have gotten it. Now I wait and see, how much the market has shifted. I haven't seen as many lookers at his house, as I saw at past sales, even though it is arguably a better house/location.
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Post by The Walk of the Penguin Mich on Jun 20, 2021 16:56:22 GMT -5
My stepmom put my dad's house on the market. The house was priced $50K more than it was in 2019, and it sold in 24 hours for $7K under asking price. The price run up in less than 2 years from when it was last on the market was comparable to a normal 10-15 years.
I'm glad she struck while the iron is hot.
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taz157
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Post by taz157 on Jun 20, 2021 19:15:15 GMT -5
My stepmom put my dad's house on the market. The house was priced $50K more than it was in 2019, and it sold in 24 hours for $7K under asking price. The price run up in less than 2 years from when it was last on the market was comparable to a normal 10-15 years. I'm glad she struck while the iron is hot. Is the house fully sold now? All paperwork signed by you, the other sellers, and the buyers? I hope so!
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Post by The Walk of the Penguin Mich on Jun 20, 2021 23:01:14 GMT -5
My stepmom put my dad's house on the market. The house was priced $50K more than it was in 2019, and it sold in 24 hours for $7K under asking price. The price run up in less than 2 years from when it was last on the market was comparable to a normal 10-15 years. I'm glad she struck while the iron is hot. Is the house fully sold now? All paperwork signed by you, the other sellers, and the buyers? I hope so! Contingent on inspection, I guess. I signed what needed to be signed earlier and closing is set for July 27.
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bookkeeper
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Post by bookkeeper on Jun 21, 2021 7:58:41 GMT -5
In this little town of 14,000 people, there are exactly 14 houses for sale. 4 of those are over $800,000. We have had quite a bit of turnover in our neighborhood. Split level homes built in the 1970's with a double garage are going for $300,000. The value of our home has finally caught up with the cash I had to sink in it. We wanted to get new windows this year, but all the contractors are busy with new builds. I can wait. I have seen boom and bust like this before. As far as a house being sold and no one moving in: That's what we did . Bought this house in January and didn't move in until April. We were out of towners, 50 and 55 years old, without jobs, buying a house we were in no hurry to move into. That had the neighborhood wondering what's up. In the end, the neighbors were just happy we knew how to mow and paint!
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tskeeter
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Post by tskeeter on Jun 21, 2021 16:29:51 GMT -5
OK. Looks like the run up in the housing market may be easing. The Zillow estimate on our house dropped about 1% last week.
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Post by Deleted on Jun 21, 2021 18:56:21 GMT -5
OK. Looks like the run up in the housing market may be easing. The Zillow estimate on our house dropped about 1% last week. Ours has been up and down on Zillow lately, but always more than we paid for it almost 2 years ago, so I’m good with that. Sometime during the last few days, it jumped to more than its ever been, more than $50k over what we paid for it. My other house seems to be stuck though. But it’s still quite a bit more than I paid for it and a lot more than all the years Zillow said it wasn’t worth much more than 2 wooden nickels. So, I’m good with that too.
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giramomma
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Post by giramomma on Jun 24, 2021 21:56:40 GMT -5
So, the average house cost in our county has exceeded the run up of 2008.
It's up to 345K. The average household salary in my county is 73K. I would really like to know how someone or a couple making 73K can afford a 345K house without a lot of extra help. I don't see how this is sustainable long term.
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steff
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Post by steff on Jun 24, 2021 22:11:44 GMT -5
My next door neighbor's house went on the market for sale yesterday at 8 am. He called to warn me because he agent told him that the first 48 hours it will show well over 100x. Yesterday at 5 pm we had at least 40 people milling around the cul de sac in little groups. 2 agents were taking groups in to see the house. There were at least double that many thru the day today. I saw him this afternoon & he said the bidding war has already started. 3 bedroom, 2 bath ranch on an unfinished basement 1650 square feet with 1/2 an acre...$289,000 is what they listed it for. It's just mind blowing.
When we bought our house in 2009, we got it during the housing crash, so it was damn near half price of what it was valued at the year before. It's more than twice as big as my neighbors house & on a full fenced acre. 3 stories, 5 bedroom, 3.5 bathrooms, 4,600 square feet, full finished basement with a 2nd kitchen. My basement is basically a 1 bedroom, 1 bath apartment with it's own entrance. It's STAGGERING what mine is currently valued at. We paid under $120,000 for it. And no, I have no desire or interest in selling my pink Barbie house.
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TheOtherMe
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Post by TheOtherMe on Jun 25, 2021 7:52:37 GMT -5
Even in the small towns around here, it's hard to find any kind of house under $300K. The few I look up on Zillow I would not pay that kind of money. The median income for a couple is $63,000. I don't know how they make payments either.
I know the farmers that retire to town can pay cash, but families with children are the ones working shouldn't be taking on that kind of debt.
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giramomma
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Post by giramomma on Jun 25, 2021 22:56:32 GMT -5
Even in the small towns around here, it's hard to find any kind of house under $300K. The few I look up on Zillow I would not pay that kind of money. The median income for a couple is $63,000. I don't know how they make payments either. I know the farmers that retire to town can pay cash, but families with children are the ones working shouldn't be taking on that kind of debt.And there's really what I don't get. Assuming a family puts something away for retirement, after benefits, they are looking at a net of about 4500/month. A PITI on a 200K mortgage is going to run about 1400-1500/month. I'll say this family found unicorn child care for one kid and only pays 1200 a month. (Infant care in centers are approaching 2K a month now).
So, over half of your net income is tied up with just the mortgage and daycare. I've softened a little bit, but with those to bills, I can't see how finances will simply work themselves out.
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countrygirl2
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Post by countrygirl2 on Jun 25, 2021 22:57:04 GMT -5
Here our small town just got $11 million infused. They are building 26 more units, most are duplexes and 2 single family homes. We had over 20 built a couple years ago. This mayor we have is something else. They must apply for every grant out there and gets them. They have beautified the down town. New streets, lighting, pretty brick sidewalks. Are repaving streets all over. Tearing down old houses. Now they are working on redoing the old 60 plus year old swimming pool they had to close down 2 years ago. I just donated another $100 toward that. The kids around need it and even though I'm not in the town, I'm all for it.
They saved the gym from a school that was torn down and made a small convention center, it is always busy. Soon they will have a big carnival there and they have live music events come in. Since they have all the grounds from the school its a city block or more, so plenty of room. Before covid hit they were to build a hotel next to it, don't know if that is still going to happen or not. But we need more housing for people, this area could really expand if it was available.
We have a lot of restaurants a new one just came in we have to try. But just little retail. They are building a new paint and body shop, we got a new wrecker yard on the south end of town. And a hardware, a real one in the small town south of us, took over a vacated carpet store and has fixed it up. If we just had retail clothing and shoe stores other then Walmart it would be something else. There is a nice park and lake with camping here too.
We just got our road all chip and sealed in front of the house and they are doing it for miles upon miles.
Now I heard today there are 5 huge solar farms coming to the county, I know of 2, so that should add some tax base. There is housing demand here, but most here want to buy and these will end up all rentals.
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countrygirl2
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Post by countrygirl2 on Jun 25, 2021 22:58:50 GMT -5
Yep a lot of the houses here for sale are over $200k. The ones that are cheaper are in such poor condition costs a ton to fix them up, so big problem. Lack of available housing is hurting this community.
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TheOtherMe
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Post by TheOtherMe on Jun 26, 2021 6:53:01 GMT -5
If the family has children, they are "required" to have a new SUV, take vacations every year, decorate the house with expensive furniture, etc.
I see people on our local Marketplace on FB trying to sell couches for several thousand dollars. They comment it will need cleaned due to pets and kids.
If I am paying that much money for a couch, at least clean it.
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minnesotapaintlady
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Post by minnesotapaintlady on Jun 26, 2021 10:24:23 GMT -5
Zillow is on crack. It has my house going up almost 100K in the last 9 months. If people are REALLY paying this much, I see 2008 happening all over again and it's going to crash.
You can still get a perfectly nice little house around here for around 200K. One I would want would be about 250K. Ex-BIL just closed on one for 139K yesterday. It's only 1200 square feet, has no garage, not much of a yard either, and could use some new siding (or paint), but it's cute and well kept up inside with beautiful hardwood floors.
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wvugurl26
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Post by wvugurl26 on Jun 26, 2021 11:16:32 GMT -5
One townhouse similar to mine on my side of the street but without my updates went for $280k last month.
Two end units on the opposite side (less indoor square footage than me, but walkout basements) both went for $305k in the last two weeks.
DH paid $204k in 2014. It's tempting to let those get on the record as comps and pull cash to finish our remodeling. Everything is 20 years old and if we are staying we'd like to redo some spaces to better work for us. The last of the carpet needs to go.
I don't see these prices lasting.
ETA: Zillow says $267k but it's got messed up data. It doesn't know how many bedrooms it is and it says the basement is finished and we have a fireplace. Not sure why it's so inaccurate.
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TheOtherMe
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Post by TheOtherMe on Jun 26, 2021 13:00:16 GMT -5
Zillow says $235K for mine. There are so few comparables because only about 4 or 5 houses in town have been for sale this past year.
DN3 and his fiance looked at one of them and said it was a flip and not worth the money they were asking for it. It was all cut up and on a tiny lot with a short driveway that is at about a 60 degree angle going from the road to the one car garage.
That one actually stayed on the market the longest but did eventually sell. There are lots for sale here in town but no building is happening.
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tallguy
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Post by tallguy on Jun 26, 2021 13:04:40 GMT -5
All y'all need to put a 1 in front of those numbers....
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Opti
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Post by Opti on Jun 26, 2021 14:11:16 GMT -5
My next door neighbor's house went on the market for sale yesterday at 8 am. He called to warn me because he agent told him that the first 48 hours it will show well over 100x. Yesterday at 5 pm we had at least 40 people milling around the cul de sac in little groups. 2 agents were taking groups in to see the house. There were at least double that many thru the day today. I saw him this afternoon & he said the bidding war has already started. 3 bedroom, 2 bath ranch on an unfinished basement 1650 square feet with 1/2 an acre...$289,000 is what they listed it for. It's just mind blowing.
When we bought our house in 2009, we got it during the housing crash, so it was damn near half price of what it was valued at the year before. It's more than twice as big as my neighbors house & on a full fenced acre. 3 stories, 5 bedroom, 3.5 bathrooms, 4,600 square feet, full finished basement with a 2nd kitchen. My basement is basically a 1 bedroom, 1 bath apartment with it's own entrance. It's STAGGERING what mine is currently valued at. We paid under $120,000 for it. And no, I have no desire or interest in selling my pink Barbie house.
Nice. Fantastic timing. One acre and big. I expect the market to crash, possibly hard when things open up.
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Opti
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Post by Opti on Jun 26, 2021 14:14:41 GMT -5
To this point: I'm getting the feeling "investors" are buying the houses in my area, too. In the past - usually a rehabber/flipper would buy a house, rehab it and flip it to a Homebuyer. Right now, if I'm reading the public documents correctly, I'm seeing an "investor" buying the Rehabbed houses at TOP dollar from the rehabber/flipper. I'm not sure if the "investor" is planning to "flip" the house to a homebuyer in a few months at a higher price than they paid? Or if the "investor" is planning to rent the house. There are two houses across the alley from me.... one was rehabbed (a rehabber bought it from the 'estate' of the little old lady who lived there - she died 2 years ago). The rehabber just sold it to an "investor" (for 500K) and who is now renting the house. (this is the crappy rehab job I've mentioned previously). The other house just a nice up to date house (move in condition) that was sold (closed) at the beginning of May and appears to be currently empty. I can't tell if someone bought it to rent it or not. I'm guessing maybe they hope to re sell the house in a month or two for a quick profit. You (generic you) can do some math to determine if "investors" are actually making money: On the 500K house in my example above: 20% down gives a 400K mortgage. Interest rate is higher than for a primary home - so I'm going with 3%... that's $1690 in PI. Property taxes will be 8K or higher plus insurance - lets just guesstimate 12K total so 1K per month. The landlord needs to "make some money" on rent - and they are at $2690 just to cover the mortgage. I'm guessing the house will need to rent for a minimum of $3500 but probably more like $4,000 or higher to make it worthwhile to the "investor". I have a feeling who ever bought the other house is going to sit on it for a couple of months and then attempt to re-sell it for a higher price. They NEED the housing market to keep going up a little longer to make a profit. I'll be honest - I'm not sure HOW "investors" are making money if they plan to rent the house they paid top dollar for... rents will have to go up accordingly. I'm not sure what kind of house hold income can afford 4K per month. I don't earn enough to pay that much. Maybe if I was a Double Income High Earner family... The big risk for the investor who paid top dollar for a property they plan to rent - is what happens when they can't find renters able to pay the amount they need to make the "investment" profitable?? The big risk for the investor who paid top dollar for a property they plan to re-sell in a short period of time (and may have put very little down and maybe doesn't have the money to make more than 2 or 3 "mortgage payments" ) is what happens if houses STOP going up in value? Or if they can't resell the house quickly even for a break even amount (remember they may not have the money to make the monthly mortgage payments). I think bad things are gonna happen for "investors" buying houses NOW... it's the top of the market. I've been hearing this too... but I have to wonder how many "regular people" are actually looking to buy a house and if they really NEED to buy a house versus a case of FOMO (presumably they are living somewhere now - that they can hopefully continue to live even if they'd like to buy a house.) (FWIW: I'm a landlord - but mostly I want rent to cover the yearly expenses and upkeep of the property... which meant I needed to pay as little as possible for the property I'm renting. I'm not spending any "rent income" on fun stuff for me... To date - once I got a rental fixed up and rented - I've never had to use my "day job" income on it - rent has covered all of my expenses for the properties. I'm all about the equity in the house (and OK, I like the location of one house and I can totally see myself using it as my 'retirement' home in 10 years or less or selling it and buying a house in that area with the proceeds (even if I have to pay taxes on the income.) I am not a "good business woman" when it comes to my rentals. ) The investor may be holding the property lining up what they want to do. Mine was bought at a loss (mine & second mortgage) by an investor in the 2007/2008 timeframe. They razed the house, regraded the property and put up a home worth more than double mine. In places there is not much buildable land, teardowns are common. Some do go the rental route, but many aim for a 50% return on purchase price ... at least that's what I was told by multiple investors/flippers b4 my last home sold.
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countrygirl2
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Post by countrygirl2 on Jun 26, 2021 16:25:52 GMT -5
I agree with some comments, we bought the best we could or the money, made them nice and rented them. We have a 50% return at least, some more then that.
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azucena
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Post by azucena on Jun 26, 2021 17:36:08 GMT -5
Redfin and zillow both have my house up 12% for the yr. I'll take it. Houses in my stl suburb neighborhood are sold within 12 hours.
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Opti
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Post by Opti on Jun 27, 2021 8:19:35 GMT -5
Redfin and zillow both have my house up 12% for the yr. I'll take it. Houses in my stl suburb neighborhood are sold within 12 hours. Housing prices are transitory and go down as well as up. The credit crash circa 2006 to 2008, was something that made most of the US acknowledge that. I've seen in happen in CNJ several times, so to me it was no shock. I'd like to get in on the down cycle sometime, which might not be until 2023/2024 or even later. IDK. Much depends on the economy and irrational exuberence so ... TBD.
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giramomma
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Post by giramomma on Jun 27, 2021 8:54:00 GMT -5
Zillow is on crack. It has my house going up almost 100K in the last 9 months. If people are REALLY paying this much, I see 2008 happening all over again and it's going to crash.
You can still get a perfectly nice little house around here for around 200K. One I would want would be about 250K. Ex-BIL just closed on one for 139K yesterday. It's only 1200 square feet, has no garage, not much of a yard either, and could use some new siding (or paint), but it's cute and well kept up inside with beautiful hardwood floors.
I just looked. A two bedroom, 1100 sq foot house in a neighborhood most folks try to avoid just sold for 213K. I don't even think there's a normal garage from the pictures.
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Post by The Walk of the Penguin Mich on Jun 27, 2021 10:32:12 GMT -5
My niece and her SO are currently looking for a house. Being home bound the last year meant that they were able to save for a down much faster than they expected AND more $$ than they expected. Both also got significant raises, which helped.
Their lease is up in Oct and they want to be out by then, but they have been outbid by $50k or more over asking. They can’t be the only people who are in this situation, and add this to the increased price of building materials and scarcity of some, you have a deficit.
Locally, when builders started back there were 2 houses being built on my way into town. The houses are done, but for garage doors. Between the 2 houses, there is a single garage door, a double door and one that would fit an RV all still missing to be complete.
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azucena
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Post by azucena on Jun 27, 2021 11:56:15 GMT -5
My 34 yo brother started looking for his first house in Feb. He's since decided to sit out this market run-up and continue to stockpile cash. Pretty sure he could pay $300k in cash already, but will likely take a 15 yr loan if rates stay low. He's higher income, never married, no kids. He's negotiated a six month lease to tide him over. Maybe your niece can do the same.
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taz157
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Post by taz157 on Jun 27, 2021 12:22:37 GMT -5
One of my co-workers is looking for a house with his fiancé. They have placed a bid on 11 houses in the past few months and haven't gotten any of them. I think they were looking this weekend and if they didn't get anything, they were going to rent instead and have a place picked out. Currently, each are living with their parents and they are ready to be back together again. They aren't getting married until October 2022.
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Post by The Walk of the Penguin Mich on Jun 27, 2021 12:48:00 GMT -5
My 34 yo brother started looking for his first house in Feb. He's since decided to sit out this market run-up and continue to stockpile cash. Pretty sure he could pay $300k in cash already, but will likely take a 15 yr loan if rates stay low. He's higher income, never married, no kids. He's negotiated a six month lease to tide him over. Maybe your niece can do the same. 2 issues….. Their current apartment is not sufficient for 2 working from home (and their respective companies are not looking at bringing them into an office anytime soon…..if at all) and a larger apartment is going to be more than a mortgage payment. I think they are currently paying $1800 for a 1 BR with a den and that does not include parking.
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