Discussion thread - housing market

[cattledogkisses]

Just here to commiserate. We're in an area that currently has a severe housing shortage. It's a popular vacation destination, and was also a very popular place for people to move to during the pandemic. Homes have been selling within hours of being listed, for over asking price (we got outbid on a house that ended up selling for $75,000 over asking), cash offers, inspections waived. I keep thinking this can't be sustainable, but it doesn't seem to be slowing down.

[bugandbibs]

Jun 1, 2023 12:07:40 GMT -5 Velar Fricative said:

Jun 1, 2023 11:35:50 GMT -5 bugandbibs said:

A trend that I am noticing in my area is homes going back to generational ownership. Adult children moving into their parent's house when they die/move into an elder home situation. Or in some cases, grandparents selling to their millennial grandchildren. For many, this is their first time owning a home. Or selling a house between siblings.

I don't know how regional this is, but housing has long been an issue in my area even before this due to urban growth boundaries and housing shortages. My peers haven't been able to duplicate the wealth accumulation of their parents for a variety of reasons and housing is a huge issue. Another factor in this type of house selling may be race- many of my friends are 1st and 2nd generation American born and in general family homes are cultural for a lot of us.

This is totally happening more here. We have a decent amount of two-family homes and it's becoming more common for a set of downsizing parents to buy with their adult children. The adult children need their parents to be able to enter a market and the parents want their children close for assistance as they age. Win-win (if they all get along lol). 

And then again, multigenerational homes have always been a thing, especially among immigrant and/or non-white Americans. Now younger people who didn't live in such a living situation growing up and likely seeing the benefits of multigenerational living because they're basically being forced to due to rising home/rent costs. 

I think what separates this for me from traditional multi-generational households is that the children are buying the family home versus having an elder parent move in with them or adult children not moving out.  It's been very much a decision about housing versus caretaking. I think it was more common before to sell the home and use the profits for purchasing something else instead of actually moving into it.

[agnes]

Jun 1, 2023 12:00:43 GMT -5 Velar Fricative said:

Rents seem to be rising more than home prices are, at least in my area. People are just getting squeezed no matter what they want or need to do. Even if people prefer to rent, at some point these landlords (which aren't the landlords of yore anymore, i.e. not individuals) are just increasing and increasing because they know someone will always pay more. Or, that's how they feel - there certainly is a limit.

This is happening in my area.  My renter friends talk about how their rents have gone from say $2k/month for a 1 bd, 1 bath to $2.5k in just 1 year, because the landlords know that their current renters 1.) can't find anywhere else in their budget 2.) someone else will pay more if the current renters won't 

And here H & I have over 200k in a down payment and can't afford shit at these rates.  My $1800 PITI/HOA per month is way less than renting. Even if you account for maintenance like the new water heater we put in this year, or the plumber who came out last week, etc, renting a comparable (not really) place would still be more expensive.  You guys might remember me posting about some cute houses we offered (and in escrow!) on last year...None of them worked out and then we got priced out! 

[pixy0stix]

Jun 1, 2023 14:12:39 GMT -5 agnes said:

Jun 1, 2023 12:00:43 GMT -5 Velar Fricative said:

Rents seem to be rising more than home prices are, at least in my area. People are just getting squeezed no matter what they want or need to do. Even if people prefer to rent, at some point these landlords (which aren't the landlords of yore anymore, i.e. not individuals) are just increasing and increasing because they know someone will always pay more. Or, that's how they feel - there certainly is a limit.

This is happening in my area.  My renter friends talk about how their rents have gone from say $2k/month for a 1 bd, 1 bath to $2.5k in just 1 year, because the landlords know that their current renters 1.) can't find anywhere else in their budget 2.) someone else will pay more if the current renters won't 

Which brings us to (what I think my decade old stance is) is that in owning rental properties and renting them this way, is a moral wrong. Which made a ton of people mad, because, again, our society looks at real estate as a right/sound investment that we can do whatever we please with it. Such as renting it out for "current market rates" that people can barely afford. Or turning it into AirBnbs, or having a vacation home that sits empty for most of the year. Much of the CO mountain town housing is sitting at about 50+% empty because of vacation homes. Meanwhile the people that actually live there and provide services can't find affordable housing, or even any housing at all. (Source: coloradosun.com/2021/08/30/colorado-high-country-vacancy-rates/ )

[chickadee77]

Jun 1, 2023 9:38:03 GMT -5 mrsd2006 said:

Jun 1, 2023 7:45:15 GMT -5 chickadee77 said:

Tell me about it *groan* - Ontario is charging 25% tax for anyone not yet a PR to buy (I understand the logic, but ouch for those of us that aren't quite there yet). We're just hoping the rebate process is smooth

What is a "PR"? 

And it's not just primary houses, it's second houses as well. Where we have a cabin, the prices have doubled or more. There's a 768 sq foot cabin (2/1) that just sold- listing was $394K but not sure the flnal price. It sold 12/30/21 for $150k, and sold again 5/30/22 (5 months later!) for $365k. That's insane. And it's happened all over this neighborhood. And now our property taxes are skyrocketing. 

PR is a permanent resident.

[TR]

Jun 1, 2023 14:35:18 GMT -5 pixy0stix said:

Jun 1, 2023 14:12:39 GMT -5 agnes said:

This is happening in my area.  My renter friends talk about how their rents have gone from say $2k/month for a 1 bd, 1 bath to $2.5k in just 1 year, because the landlords know that their current renters 1.) can't find anywhere else in their budget 2.) someone else will pay more if the current renters won't 

Which brings us to (what I think my decade old stance is) is that in owning rental properties and renting them this way, is a moral wrong. Which made a ton of people mad, because, again, our society looks at real estate as a right/sound investment that we can do whatever we please with it. Such as renting it out for "current market rates" that people can barely afford. Or turning it into AirBnbs, or having a vacation home that sits empty for most of the year. Much of the CO mountain town housing is sitting at about 50+% empty because of vacation homes. Meanwhile the people that actually live there and provide services can't find affordable housing, or even any housing at all. (Source: coloradosun.com/2021/08/30/colorado-high-country-vacancy-rates/ )

Yep. I don't have a source for this just anecdotal from visiting and being on local Facebook pages and talking to locals, but Red Lodge, MT is having that issue. People who work in the town can't afford to live there. And homes are being built, they're just priced out. And people who moved there during the pandemic who have had to move back are just keeping their homes as AirBnbs.

ETA: I found an article from 2022 and the problem is only getting worse: www.montanarightnow.com/news/new-regional-report-shows-114-000-affordability-gap-in-carbon-county-home-prices/article_387416de-027c-5091-8e50-07d00538a0e9.html

[pinkdutchtulips]

As a single parent in the SF Bay Area who just broke the 6 figure salary ceiling ... I'll NEVER be able to buy on my own. I rent for $2500/m. There is no way I could buy a house w/ a mortgage (PITI) remotely close to that amount. 

Even with my bf and our salaries combined ($200k) we're still priced out of buying as the ONE county we can live in (due to his job and the custody agreement re his son) has a median home price of $1.7M .. we'll be renting until both kids are 18 and move out of state and buy. 

[mrsslocombe]

Jun 1, 2023 11:07:09 GMT -5 Jalapeñomel said:

Jun 1, 2023 10:11:57 GMT -5 mrsslocombe said:

We do own our apartment (co-op). But have no desire ever to have a house. We have to manage a lot for my in-law's 3,000 sqft house in PA and it's a nightmare. Our maintenance fees are insane because we live in a full service community but it's worth it to just be able to call management if there's any issue whatsoever and they deal with it. Plus not being responsible for lawn care, the roof, heating, etc.

Also we are paying more in mortgage + maintenance than we did as renters, NYC is the rare place where a lot of times it IS cheaper to rent.

I find the co-op situation here mindboggling...I don't quite understand why this exists. I had never heard of it before I moved here. 

I have no idea why co-ops evolved in NYC but there are two huge advantages. 

1. Most co-ops severely restrict your ability to rent out your unit, so it keeps people from buying them as investment properties. This helps keep resale prices down. My co-op, for instance, you have to live here 5 years before you can rent out your unit, and even then you can only do it for one year. And in most cases, people rent to other co-op owners who need a place to live while they renovate their unit. No short term rentals (and the board heavily polices AirBNB, etc to make sure you are not listing your unit). They also charge things like a flip tax (you pay a higher % the less time you've owned your unit). Basically-they want people to actually live here, and live here a long time. There's a lot to hate about co-op rules and the drama is REAL but sometimes I think the model would help alleviate some of the issues with housing. But I also think the way AirBNB and VRBO operate is destroying communities and the planet so...

2. Price per square foot is about 50% less than a condo. We also have lower property taxes. 

[goldengirlz]

I don’t think I was here for the earlier debates, but being pro-rent is definitely coming from a place of privilege. The geographic mobility that makes renting more appealing? The ability to absorb uncertain rent increases? Confidence that you’ll be able to find properties that fit your needs (if you have mobility issues, for example)? Having a landlord that actually responds to issues when things go wrong? All privilege.

Buying a house was always supposed to be an investment — but an investment in your own future. Trading houses like stock, that’s what’s problematic.

[quesyrah]

Jun 1, 2023 11:35:50 GMT -5 bugandbibs said:

A trend that I am noticing in my area is homes going back to generational ownership. Adult children moving into their parent's house when they die/move into an elder home situation. Or in some cases, grandparents selling to their millennial grandchildren. For many, this is their first time owning a home. Or selling a house between siblings.

I don't know how regional this is, but housing has long been an issue in my area even before this due to urban growth boundaries and housing shortages. My peers haven't been able to duplicate the wealth accumulation of their parents for a variety of reasons and housing is a huge issue. Another factor in this type of house selling may be race- many of my friends are 1st and 2nd generation American born and in general family homes are cultural for a lot of us.

This is our situation.

My MIL had been living alone in her home since the early 80s when DH’s dad left. She was getting older, having some health issues and was struggling to keep up with the house. We life in a fairly HCOL area and were renting and paying about $2K a month.

So 5 years ago, we moved into her house and built an apartment off the side of the house for her. Our mortgage is very very low because we only took out enough to build her apartment.

It has worked well for us. We are the most financially stable we’ve ever been. We’ve been close by to help as MIL been through some major health issues. I was able to quit my job so I was available when my own parents went though a major emergency health situation. During the pandemic when my husband was furloughed for over a year, we were only okay because of our low mortgage. Even when EDD stopped paying for a few months.

The downside is it’s a less desirable city/location. The house is on a huge lot that we hate maintaining and the house needed a lot more $$$ maintenance than we ever would have thought.

In the end, I’m happy we did it and I don’t mind living here. On the other hand we are totally stuck here until MIL dies because I don’t know where else we would find a house that suits our needs for a price we can afford.

[sent]

Jun 1, 2023 17:12:59 GMT -5 mrsslocombe said:

I have no idea why co-ops evolved in NYC but there are two huge advantages. 

1. Most co-ops severely restrict your ability to rent out your unit, so it keeps people from buying them as investment properties. This helps keep resale prices down. My co-op, for instance, you have to live here 5 years before you can rent out your unit, and even then you can only do it for one year. And in most cases, people rent to other co-op owners who need a place to live while they renovate their unit. No short term rentals (and the board heavily polices AirBNB, etc to make sure you are not listing your unit). They also charge things like a flip tax (you pay a higher % the less time you've owned your unit). Basically-they want people to actually live here, and live here a long time. There's a lot to hate about co-op rules and the drama is REAL but sometimes I think the model would help alleviate some of the issues with housing. But I also think the way AirBNB and VRBO operate is destroying communities and the planet so...

2. Price per square foot is about 50% less than a condo. We also have lower property taxes. 

One of the huge problems with co-ops is they control who they let move in. So this can be problematic for all the obvious reasons - racism, discrimination, etc. When we briefly considered buying in Manhattan over 10 years ago, we didn't bother to look at co-ops because of the enormous paperwork involved and we knew we wouldn't be a building's first choice for many reasons, one of which is the color of our skin. 

www.theguardian.com/lifeandstyle/2022/feb/08/new-york-housing-co-ops-apartments-discrimination

[rubytue]

Back when I had a rental property, and really wanted to invest in rentals more, I would read this website. And apparently, they have revived their mailing list and I’m still on it. Anyway, this article today seemed appropriate for this discussion. There are only 4 metro areas right now where it’s cheaper to buy than rent. (If you read it, keep in mind it’s target reader is the individual investor. www.biggerpockets.com/blog/rents-exceed-housing-payments-in-just-four-markets

Side note, I quickly realized property owning/management was not for me. Never raised the rent once in 9 years, jumped on almost everything. They moved out because I told them their renters insurance pays for a TV killed by a power surge, not me.