Housing Market – Opinions & Predictions

gim wrote:

<div class=”d4p-bbt-quote-title”>Bearcat89 wrote:</div>
Your realtor sounds like he’s in bed with the inspector. I know a few home inspectors. All of them I wouldn’t trust to make a Jude call on anything. I did my own inspection. And had a hvac buddy inspect that system.

Certainly possible, but I trust my realtor so I trust his recommendations and suggestions.

I personally don’t know any home inspectors.

And I personally am not qualified to make a home inspection myself, as I previously posted.

Buying a house without an inspection is a risk I’m not willing to take.

I have a hard time ” trusting ” someone who just wants maximum profit off me. That’s why we went the lawyer route and saved 12k off the top.

We built last year and couldnt be happier. We signed in 4/2020, sold our house in July in one day (while fishing Mille Lacs with JJ) and moved at the end of October. By the time we closed, our house was already worth more than we paid and our exact model is now starting at 20% more than we signed for if you started today.

We didnt really “want” to build, but couldnt find what we were looking for as far as location, schools and design. So if you are struggling to find something, like we were, new construction is an option. I cut down my commute and can be to Pool 2 in 7 minutes if I make the one stop light on my way!

steveo wrote:

and who knows what will happen the rest of Biden’s term.

almost made it to page 2 without it getting political

Ask a home inspector what their warranty is.

For those that think that home inspections are a money grab you have probably met one that did not have much experience.

I’ve inspected for over 8 years and it has it’s ups and downs for sure. This year I have seen the number of people not having inspections. I’ve inspected some homes that needed over $50k worth of work because the person moves in and finds a few things and calls me. Most people have had minor issues and maintenance items that in the end they ended up fine.

I’ve inspected a lot of homes for general contractors who had wives who hired me. Most of those guys end up happy we inspected. When I get a client like that I will point out things to them and tell them my view of the issue and they will tell me theirs. I see so many homes and know many quirks that most people never see. Home inspections are a lot harder than most people think.

Realtors that ask me to hide things do not like me. Yes I have had that happen but not as much as you would think. The realtors who have been selling a long time that I know want a happy client because happy clients refer more business.

Eelpoutguy, the reason for that is a house is much like a car. Parts can fail with no warning. Furnace, AC, Plumbing leaks can even pop up without warning.

Like every profession there are bad apples.

As for the market…….I doubt we will see a crash like before. It happened because too many homes were taken back at one time. Banks will not make that mistake again.

My son bought a house 7 years ago. Realtor had 1 inspector and the bank a different 1. Both were crooks for taking $$$ as far I was concerned. Both missed things that I pointed out to my son that would need to be fixed when he bought it.
I would like to know who or how a house inspector gets certified.
JMO

MX1825 wrote:

I would like to know who or how a house inspector gets certified.
JMO

There is no licensing in MN or requirements.
The interesting thing is that even in licensed states there is little difference in complaints filed between licensed states and non licensed states.

The Bank does an appraisal not inspection, that is for the bank not for the buyer.
The inspector is your choice. Realtors can refer but the client is always the buyer.

Saw something the other day that they expect home prices to go up 16% by the end of 2022.

Wife and I are seriously considering selling as we could likely get 60K+ over what we paid just 3 years ago. Our only hesitancy is that we are not sure we want to enter a crazy competitive housing market that would likely mean us moving in with her parents until we landed a house.

Jonesy wrote:

Our only hesitancy is that we are not sure we want to enter a crazy competitive housing market that would likely mean us moving in with her parents until we landed a house.

That is absolutely something I’m not willing to do. I refuse to move twice. That’s why I started looking for my next house before I even considered selling my current house. I realize not everyone is in this financial situation because they need the equity of their current house to buy another one though.

gim wrote:

That’s why I started looking for my next house before I even considered selling my current house.

This is the way. If you have a good real estate agent and lender, you should get your financial ducks in a row, be preapproved and find your next home. Even if your offer is contingent on your current home selling, it shouldn’t be an issue as the seller should be able to feel comfortable with your current home selling in this market. You may lose out a couple offers due to cash buyers, but such is life. We bought a year ago contingent on our current home selling and it was no problem.

BigWerm wrote:

<div class=”d4p-bbt-quote-title”>gimruis wrote:</div>
That’s why I started looking for my next house before I even considered selling my current house.

This is the way. If you have a good real estate agent and lender, you should get your financial ducks in a row, be preapproved and find your next home. Even if your offer is contingent on your current home selling, it shouldn’t be an issue as the seller should be able to feel comfortable with your current home selling in this market. You may lose out a couple offers due to cash buyers, but such is life. We bought a year ago contingent on our current home selling and it was no problem.

If someone would have written us an offer last week that was based on the contingency of their house selling first, we would have passed on the offer. It is so competitive that any contingency could cost you. The only way we would have considered such an offer is if it was considerably over asking price. I told our realtor that if they had any contingencies beyond an inspection, she should tell them immediately that their offer better be over asking price or it isn’t worth the time submitting it.

Contingencies in a historic sellers market are going to leave you on the sidelines as a buyer.
Our realtor who is a long-time family friend told us that she just finished the closing on a house where the “second best offer” was $30k over asking price cash offer, with not a single contingency or even an inspection.

Obviously there are some exceptions, but I’d for sure have my current home listed with feedback and viewings going on simultaneously (or have some substantial cash on hand) before considering making offers…as you could just be wasting a bunch of time.

It’s possible there’s enough cash buyers out there that you can eliminate a huge portion of the buying market that can only buy contingent on their home selling. However, I’d say that’s pretty short sighted, at the end of the day you want to maximize what you sell your home for and whether it’s cash or contingent is just one of many factors (down payment, closing time, lender etc.) to take into consideration that usually is after actual offer price.

When we bought one year ago we told the selling agent what we would list our current home for as soon as we had an accepted offer, the selling agent knew our current home at the time would sell immediately, so the seller of our new home took the best offer, ours, and made more money than the cash offer that was less. The problem with listing your current home first, is it’s likely to sell, and then you have to rent at astronomical prices, or live with someone while hopefully finding your new home. Obviously each scenario is different, but it can be done even in todays market, it just may take some patience.

Here’s some pertinent #’s for the metro.

http://www.bringmethenews.com/minnesota-lifestyle/the-crazy-twin-cities-housing-market-is-showing-signs-of-slowing-downm

We’re already seeing a slow down in house sales in our neighborhood compared to a year ago. A house for sale wouldn’t last a week but now it’s turned into months for both new and older homes. It seems people want to ask 50 grand or more over what it’s worth and now it’s catching up to them.

Seeing same slow down. Glad when I bought couple years ago I got $15k under asking lol. Very lucky!

Deuces wrote:

Very lucky!

Same! Bought our forever home in the northwoods(a much needed upgrade with 3 kiddos) in Dec 2019 and got it for around 10K under asking price. Moved in Jan 2020 and watched the world collapse. So lucky we bought when we did! We were so close to backing out and holding off another year. Glad we didn’t! Wife and I were just talking about this the other night and couldn’t imagine still being in that little rambler in town with the kids and chaos that has occurred in the last 2 years, and essentially no real hope to get out of it with how the market has been and currently is.

I have followed these guys economic advice for 20 years and have not been disappointed. Here is what they say about the housing market. https://blog.itreconomics.com/blog/signs-slowdown-housing
Bare in mind that after school starts, thing tend to slow down a bit.

Deuces wrote:

Seeing same slow down. Glad when I bought couple years ago I got $15k under asking lol. Very lucky!

I just bought direct from seller. No realtor. Saved a ton. And then had the house valued at 50k over what I paid. Big win in a loosers market. But i had to settle with no acrage. I’ll buy that soon.

Bearcat89 wrote:

<div class=”d4p-bbt-quote-title”>Mr.Beads wrote:</div>
Seeing same slow down. Glad when I bought couple years ago I got $15k under asking lol. Very lucky!

I just bought direct from seller. No realtor. Saved a ton. And then had the house valued at 50k over what I paid. Big win in a loosers market. But i had to settle with no acrage. I’ll buy that soon.

Very nice.

I know I’m late to the party, but I wanted to explain what is ACTUALLY happening to the housing market and the only way to stop it. Homeowners are buying other houses and renting them out as shared homes. They are buying as many properties as they can afford. My landlord in New York, while a great person to rent from, had seventeen houses in one city. In my case, rent was awesome-$500 a month all utilities included! Keep in mind 6 tenants. So $3000 a month for 12 months equals $42,000. For a property listed at $150k at the time. You could buy and resell within 4 years, assuming no repairs. Of course, repairs do happen, so usually tack on a few years, but the key point is the profit is far exceeding the loss. She was essentially getting paid $3000 a month when she was paying between $800-$1200 on a mortgage payment. And this is lower end…but this is happening all across the country. This is why so many landlords refuse repairs…it delays their money to flip a house. They can easily become millionaires within 20 years. The problem? Once that landlord gets that 100% profit and flips it, the house value is doubled, often times with zero modifications. So now my $500 rent would be $1000 for a shared room. Pandemic had nothing to do with this, it was just an easy excuse.
So what can we do? We need a state of emergency, and we need laws that place limits on how many homes a person can own, probably limited to 2. The reality is the reason for the housing shortage is because they are mostly owned by the same wealthy people.

We ahould limit fishing rods and beers to two per person as well. Anything more is simply unreasonable

Matthew Shults wrote:

So what can we do? We need a state of emergency, and we need laws that place limits on how many homes a person can own

I’m not sure if your just jealous or uneducated??

Some people make a living off from rentals, whether be a VRBO, or a campground/resort on a lake. The last few years of crazy low interest rates made it feasible for many to purchase additional property. If they can afford it all the power to them.

Matthew Shults wrote:

I know I’m late to the party, but I wanted to explain what is ACTUALLY happening to the housing market and the only way to stop it. Homeowners are buying other houses and renting them out as shared homes. They are buying as many properties as they can afford. My landlord in New York, while a great person to rent from, had seventeen houses in one city. In my case, rent was awesome-$500 a month all utilities included! Keep in mind 6 tenants. So $3000 a month for 12 months equals $42,000. For a property listed at $150k at the time. You could buy and resell within 4 years, assuming no repairs. Of course, repairs do happen, so usually tack on a few years, but the key point is the profit is far exceeding the loss. She was essentially getting paid $3000 a month when she was paying between $800-$1200 on a mortgage payment. And this is lower end…but this is happening all across the country. This is why so many landlords refuse repairs…it delays their money to flip a house. They can easily become millionaires within 20 years. The problem? Once that landlord gets that 100% profit and flips it, the house value is doubled, often times with zero modifications. So now my $500 rent would be $1000 for a shared room. Pandemic had nothing to do with this, it was just an easy excuse.
So what can we do? We need a state of emergency, and we need laws that place limits on how many homes a person can own, probably limited to 2. The reality is the reason for the housing shortage is because they are mostly owned by the same wealthy people.

Matt your math is off.
500×6=3000
3000×12 months = 36000

So there is some truth to that anecdote but keep in mind all markets are different. I will say the limitation to how many properties an individual or company can own will probably be looked at. Everyone will cry socialism or anti-capitalism but the fact is, individuals and business were able to lock on ridiculously low interest rates due to government intervention (ehem, the Fed) to buy up so much property with little risk so it’s already socialism. The biggest factor to the rise in prices is lack of inventory (its debatable but I’d definitely take that side) and a huge part of that is people or corporations owning multiple homes at a cost of capital almost equal or in our case right now LESS than inflation so it’s literally free money. They need to curb it somehow otherwise every big city will end up like London/San Fran/etc… Limit how many houses people can buy? Now that’s probably too far, but an increased tax or interest rate on 4 or more properties owned? I could see that idea thrown around. It helps to keep more inventory available for people buying primary residences, raising their children in a school district, getting involved in their neighborhood, giving a damn about the area they live in. It’s a net positive vs neighborhoods of rentals where transients never do anything in the best interest of the community. In the end, the WORST thing that ever happened to the housing market was low interest rates. Period.

Even in rural areas, real estate is quickly purchased by the upper middle class and on up from there. This isn’t anything new. I don’t have anything against people who have the means to buy up property so long as they’re paying taxes and aren’t navigating loopholes to dodge what everyone else has to pay.

I know one family who purchased 9 homes in a town of ~3000 people from Spring 2020 to Summer 2020. Free money at historically low interest rates like we saw was an opportunity. With every opportunity, there will be those who strike it rich and those who miss out. There’s no way to legislate “fairness” in a market based economy.

There’s no way to legislate “fairness” in a market based economy.
[/quote]

Fannie Mae, Freddie Mac, Ginnie Mae, FHA, HUD, the Federal Reserve, etc… tell me of this market economy you speak of?

Kidding aside, the government already stepped in and legislated long ago (and for good reason) but over the past 25 years they’ve grossly shifted the balance of things with low interest rates and more for the benefit of investors. They need to shift things towards owner occupants again. People say things like “free market” but every ‘market’ is different. Were not talking about commodities like corn (wait corn is subsidized too isn’t it?) OK how bout computer chips? Nope, government stepping in again. Cars? Wait a minute… See where I’m going with this.

A home is arguably the single greatest investment a common person gets into, and their shouldn’t be the barriers to ownership that were seeing today. Homeownership is too beneficial to the the national well being to just say “too bad so sad” for those that have been priced out (more like supplied out). Now is it something that should be regulated to the degree of a utility or phone company? I don’t know about that, but should we look at the history of FNMA and Freddie? Some would say it’s sort of half and half.

FinickyFish wrote:

There’s no way to legislate “fairness” in a market based economy.

Fannie Mae, Freddie Mac, Ginnie Mae, FHA, HUD, the Federal Reserve, etc… tell me of this market economy you speak of?

Kidding aside, the government already stepped in and legislated long ago (and for good reason) but over the past 25 years they’ve grossly shifted the balance of things with low interest rates and more for the benefit of investors. They need to shift things towards owner occupants again. People say things like “free market” but every ‘market’ is different. Were not talking about commodities like corn (wait corn is subsidized too isn’t it?) OK how bout computer chips? Nope, government stepping in again. Cars? Wait a minute… See where I’m going with this.

A home is arguably the single greatest investment a common person gets into, and their shouldn’t be the barriers to ownership that were seeing today. Homeownership is too beneficial to the the national well being to just say “too bad so sad” for those that have been priced out (more like supplied out). Now is it something that should be regulated to the degree of a utility or phone company? I don’t know about that, but should we look at the history of FNMA and Freddie? Some would say it’s sort of half and half.
[/quote]

FinickyFish wrote:

There’s no way to legislate “fairness” in a market based economy.

Fannie Mae, Freddie Mac, Ginnie Mae, FHA, HUD, the Federal Reserve, etc… tell me of this market economy you speak of?

Kidding aside, the government already stepped in and legislated long ago (and for good reason) but over the past 25 years they’ve grossly shifted the balance of things with low interest rates and more for the benefit of investors. They need to shift things towards owner occupants again. People say things like “free market” but every ‘market’ is different. Were not talking about commodities like corn (wait corn is subsidized too isn’t it?) OK how bout computer chips? Nope, government stepping in again. Cars? Wait a minute… See where I’m going with this.

A home is arguably the single greatest investment a common person gets into, and their shouldn’t be the barriers to ownership that were seeing today. Homeownership is too beneficial to the the national well being to just say “too bad so sad” for those that have been priced out (more like supplied out). Now is it something that should be regulated to the degree of a utility or phone company? I don’t know about that, but should we look at the history of FNMA and Freddie? Some would say it’s sort of half and half.
[/quote]

What do you know about Fannie Mae and Freddie Mac? Why do they exist? What is Ginnie Mae?

What is this new barrier home ownership, competition???

FinickyFish wrote:

There’s no way to legislate “fairness” in a market based economy.

Fannie Mae, Freddie Mac, Ginnie Mae, FHA, HUD, the Federal Reserve, etc… tell me of this market economy you speak of?

Kidding aside, the government already stepped in and legislated long ago (and for good reason) but over the past 25 years they’ve grossly shifted the balance of things with low interest rates and more for the benefit of investors. They need to shift things towards owner occupants again. People say things like “free market” but every ‘market’ is different. Were not talking about commodities like corn (wait corn is subsidized too isn’t it?) OK how bout computer chips? Nope, government stepping in again. Cars? Wait a minute… See where I’m going with this.

A home is arguably the single greatest investment a common person gets into, and their shouldn’t be the barriers to ownership that were seeing today. Homeownership is too beneficial to the the national well being to just say “too bad so sad” for those that have been priced out (more like supplied out). Now is it something that should be regulated to the degree of a utility or phone company? I don’t know about that, but should we look at the history of FNMA and Freddie? Some would say it’s sort of half and half.
[/quote]

How many people who qualify for those programs, loans, etc have significantly increased their wealth or financial status as a result of it? I don’t know the data, but I’d be curious to see. You can also have countless programs to purchase homes, but a buyer cannot buy something that doesn’t exist. The cost associated with building have ballooned well beyond what what many programs can offset.

As far as the suggestion of tiered taxes based on properties owned…that’s simply going to increase rent for millions. Someone who is considerably wealthy due to real estate and property ownership isn’t going to just fold up shop and stop acquiring properties because of this. Rather, they will kick the costs on down.

How many people who qualify for those programs, loans, etc have significantly increased their wealth or financial status as a result of it? I don’t know the data, but I’d be curious to see. You can also have countless programs to purchase homes, but a buyer cannot buy something that doesn’t exist. The cost associated with building have ballooned well beyond what what many programs can offset.

I don’t disagree with you there. And that’s the point of those programs. The government stepped in and gave others an opportunity to buy and increase their wealth. Problem with programs like FHA (or any convention agency mortgage) is you only need to live in a place a year then you can do whatever and keep the interest rate. So it doest really solve a problem, more treats a symptom but we could go on and on and that doesn’t really work on a forum. Already got Dave wanting me to give the fill history on the agencies! (Just yanking your chain Dave). But the main point i want to make is this whole “can’t buy something that doesn’t exist” problem exists BECAUSE of the government policies that encouraged investors to devour the supply. The shortage was created by policy. Increasing costs are a symptom, not a cause of higher home prices which seems counterintuitive, but supply and demand is a two way street.

TLDR Government policy created the current market and they will need to continue developing policy, I just hope it’s more in favor of owner occupants than investors. There is no free market.

When I sold my previous house in May, I had 3 offers. I took the second highest one because it was a better, more stable buyer with better financial backing even though there was a fairly higher offer sitting there on the table. The problem with the higher offer is that it was backed by a Veterans Administration loan instead of a conventional. Apparently VA loans have clauses in them that allow the buyer to back out for various reasons, including if the appraisal comes in low. Additionally, the VA loan is the only mortgage that allows zero down payment.

Initially, because this offer was about $15 grand higher, I at first thought it was a no brainer. But after sleeping on it and talking to my realtor, I decided that it wasn’t worth accepting based on the riskiness of the VA loan. It creates risk for me, the seller. Sure, I maybe left some money on the table but the lower offer had much less risk.

I don’t know if there are a lot of buyers using VA loans out there, but just something to be aware of. They are risky. I know that the VA is just trying to protect and help their veterans, but they are a lot less stable than conventional loans. Just something to keep in mind when selling a house.