Economy/house buying

[DawnM]

I am surprised that housing is not coming down in my area despite the high interest rate.   I am not really an economist, but I am reading various thoughts on which way the economy is going to go.   I have listed to the gloom and doom folks and the more optimistic folks.

Our interest rate is around 2.5%, my friend purchased a house 4 months ago and hers is almost 5%.

Her house was also crazy high priced (IMO and for this area.).  She got a 1400 sq. ft. 2 bedroom house, about 20 miles from the heart of the city, for $450k.   

We moved here from a HCOL area (LA) and really didn't expect this area to get so crazy high so quickly.   I think this is true nationwide in terms of inflation and housing costs.

Where will it go from here?   I want to hear your thoughts.

 

[stephanier.1765]

I wish I knew because we put house buying on pause but I'd really like to buy one sooner than later.

[Pawz4me]

Five percent is still a rather low interest rate historically. It's just that rates have been abnormally low for so long that some peoples' perceptions have been altered, especially young adults who haven't known anything higher. The interest rate on my first house (purchased in 1985) was 7-something, and that wasn't considered bad at the time. A few years earlier than that the rates had been in the double digits, but that was definitely abnormal.

[cjzimmer1]

My son has been trying to find a place for over a year.  And while prices have come down a little bit overall, with the increase in interest rate, the cost is higher than ever.  And rentals are absolutely insane.  We are talking $1500-2000 a month for a 1-2 bedroom with 500-600 square feet in some cases. We are not in a major city.  I only have to drive 6-8 minutes and I'd be in the land of cows and cornfields.  There is a massive housing shortage so anytime something new gets built it gets premium pricing and there simply isn't enough older stuff to meet the demand of "affordable" pricing.  And of course if you move out farther the cost does get a little bit but with the price of gas, it pretty much nullifies the lower price.  I don't see prices coming ddown significantly anytime soon in my area.

[teachermom2834]

Where we are things have stabilized from the craziness of last summer but the bottom has certainly not fallen out. We plan to sell/buy this coming summer. Even though the rates are higher and we will get a little less for the house we sell I think we will do better not having to compete in the crazy market that had houses selling the first day way over asking with buyers waiving inspections etc. 

 

[historically accurate]

I wish I knew because we could really use a "works better for us" house than our mobile home where we rent the land (for ever increasing rent). Our house is fairly large, but very open and doesn't have a whole lot of private space, not great for 2 adults trying to work from home and 2 teens trying to do school. It appears our young adult is going to be home for a good long while due to physical health issues. She literally does not have a space - she's sleeping on the couch or the trundle in youngest dd's room. But we've been priced out of the market even with me going back to work. 

[Sneezyone]

Prices are still high here in part because no one is moving/selling. There’s not a lot of turnover in this neighborhood. People come for the schools and stay a good long while. The interest rates are certainly higher than they once were but our second house was a 7% house in 2006-7? It took 3-4 years before we could refinance it to something lower. There’s new construction in our area and it’s still selling.

[elegantlion]

I live in a low cost of living area and our house prices have not reset from last year. We're fortunate that affordable renting is still possible around here, but inventory is low and our local economy is not great. I watch house prices a lot, it's a bit of a hobby to just look at houses online. Last spring, you could find a small but liveable 3 bed/1 bath house for ~100k. Now those same type of houses have risen to between 130k - 150k in an economy that has not improved. So while those numbers may sound great for a bigger city or someplace where growth is happening, those increases are making it more difficult for people to buy. Add in higher interest rates and it just sucks.

Larger and better homes are risen at similar rates. The same type of homes that SO and I were looking at that sold for 140k a year ago are now going for 180k +. Our income has not increased but the size & quality of a home we'll be able to afford in the next year or so has dropped. 

So many of the smaller 2 bed/1 bath homes for sale need major work before being liveable either that or they've been hastily flipped - you can tell by previous listing dates and prices. 

In general, houses are selling slower.

[Katy]

I doubt they will come down much at all. The government can’t print unlimited money and not have consequences like this. 

[Carrie12345]

Since it’s the dead of winter, I’m having a hard time gauging what’s really going on by me. Houses are priced very high (for here), but the small ones aren’t really selling.

In my immediate area, it’s nearly impossible to find something under $200k. 15 years ago, you could practically swoop up whole streets for under $100k.  
Houses over $300 seem to be doing better.

The spring should bring more info.

[Lecka]

I think prices are starting to come down here.  But I agree about the cheaper houses.  They are much higher than a few years ago and they aren’t coming down.
 

Our area is one where out-of-state investors buy single family homes to rent our.  

Rents are starting to come down in our area too, though.  

 

Edit:  It’s hard for me to know, though.  Rents starting to come down is obvious.  But in my neighborhood I think people are waiting to see what happens, we just had two houses be listed, not sell, and were taken off the market one month later.  They might re-list in the Spring.  
 

Rents are still higher than a few years ago, too, but they are coming down compared to last year.  

My niece had been able to afford a 1-bedroom, and then she couldn’t and moved in with a roommate.  But I think she could afford a 1-bedroom again (or close) but she’s going to stay with the roommate at this point.  

 

 

Edited February 4, 2023 by Lecka

[Spy Car]

Could be that that employers adding a sizzling 517,000 jobs just last month and having the unemployment rate dip down to 3.4%, the lowest level since 1969, gives people a sense of confidence in the economy?

Bill

[Arcadia]

My condo neighbor just sold their 2 bedroom unit last month at $823psf. Sold less than a week after open house. 

During the previous property downturn, many sellers pulled their listing to wait it out so what was left were the expensive ones that doesn’t need to sell fast and the foreclosures. Sometimes sellers would just rent out their homes instead until prices goes up to where they want to sell. Currently the older homes in less popular areas are at around pre pandemic prices but those didn’t rise much during the pandemic. 

[Scarlett]

1 hour ago, elegantlion said:

I live in a low cost of living area and our house prices have not reset from last year. We're fortunate that affordable renting is still possible around here, but inventory is low and our local economy is not great. I watch house prices a lot, it's a bit of a hobby to just look at houses online. Last spring, you could find a small but liveable 3 bed/1 bath house for ~100k. Now those same type of houses have risen to between 130k - 150k in an economy that has not improved. So while those numbers may sound great for a bigger city or someplace where growth is happening, those increases are making it more difficult for people to buy. Add in higher interest rates and it just sucks.

Larger and better homes are risen at similar rates. The same type of homes that SO and I were looking at that sold for 140k a year ago are now going for 180k +. Our income has not increased but the size & quality of a home we'll be able to afford in the next year or so has dropped. 

So many of the smaller 2 bed/1 bath homes for sale need major work before being liveable either that or they've been hastily flipped - you can tell by previous listing dates and prices. 

In general, houses are selling slower.

This is almost exactly how things are here in rural ish OK.

[Lecka]

We are also in OK but not rural.  The reputation is it’s out-of-state investors buying up the affordable starter homes here.  
 

It is very frustrating!!!!!!!

Edit:  I heard 1-2 years ago that a zip code near us was being mentioned as a top rental market to get into on a national real estate podcast, and it’s like — apparently people listen to it and just send in money for them to buy up starter homes to use as rentals.  
 

 

Edited February 4, 2023 by Lecka

[Scarlett]

It does remind me of the housing crash in 2008, but I also am not an economist.  My son and his wife paid $280k for a flipped 2000 sf house in our small town. Less than 3 years earlier, just before Covid, we paid $140k for our 2000sf house with a pool and a building that could be an apartment. On 1/2 an acre.  It wasn’t as shiny and pretty as my sons house but the neighborhood is similar.  
I think a lot of people are going to be upside down in a few years.  

[kbutton]

2 hours ago, elegantlion said:

So many of the smaller 2 bed/1 bath homes for sale need major work before being liveable either that or they've been hastily flipped - you can tell by previous listing dates and prices. 

Here, I hate what most flippers are doing (some really are doing a public service with fixing up rotting houses in decent neighborhoods). They aren't buying homes that need real work; they are buying homes that need a cosmetic update plus a couple of mild but annoying/inconvenient fixes. They are often not done all that well, but the prices rise a lot relative to what was done to the house. Meanwhile, homes that are well-maintained but need cosmetic fixes that the owner isn't excited about doing (like ripping up flooring to make it all grey vs. letting someone choose their own) are expected to receive a significantly lower cost and pay all the buyer's fees even though the buyer will often be getting a much nicer house (structural fixes have been done, etc.) than one of the flipped ones that has trendy floors. It's weird. 

It's really hard to find a reasonably priced house that you can just polish a bit once you move in. You get an overpriced house that's been polished poorly and will need work sooner than later.

You can get new houses all over the place. They are bigger, but everything is builder grade stuff you have to replace relatively soon (and we've seen friends go this route and have to get tons of work done).

 

 

[Shelydon]

3 hours ago, Pawz4me said:

Five percent is still a rather low interest rate historically. It's just that rates have been abnormally low for so long that some peoples' perceptions have been altered, especially young adults who haven't known anything higher. The interest rate on my first house (purchased in 1985) was 7-something, and that wasn't considered bad at the time. A few years earlier than that the rates had been in the double digits, but that was definitely abnormal.

This. The last two houses we bought 25 and 30 years ago were between 7 and 8% interest, which was considered average for the time. One of them we refinanced for 5% interest about 20 years ago. I think over the last 10 to 15 years people got used to abnormally low interest rates. 

[ArteHaus]

Housing prices are insane:/ We have seen houses in our neighborhood a couple of years ago priced a median range of the 300s, to now 700-1.5 mill in a very short time. 

We would love to move to the land, find an old historic home and put work into it. Two or three years ago that was a possibility (not super easy then, either), but now it’s just not there for under 600-700k. Landed properties that are arable are astronomically priced (we do live in a mountainous/rocky region so maybe thats just how it is, but still).

However, my brother and I were able to sell my mother’s home in a matter of hours. So, for us we have benefited. In 2017-18 we were in the market to buy, but the interest rates had risen back then as well. We waited a couple of years and were able to get below 2.5% in 2020. So sometimes, it is a waiting game. 

I feel for those who are renting. Those prices seem almost criminal. I can’t imagine what we would have done in our twenties (ten long years ago), as retail and restaurant employees. It was hard to pay $600/month. So, a married couple just starting out, paying 1500-2000 is inconceivable to me. I don’t think that wages have increases that much. I have also noticed that even though there is affluence in our area, there is the opposite. And the majority of new builds are huge apartment complexes. Like, a lot of apartment complexes. I guess the understanding is that more and more people will be renters and not buyers in the future.

Considering the economy is cyclic, interest rates will more than likely go back down. Hopefully, prices will even out. 

[math teacher]

My son is paying over $1000 per month for a one bedroom apartment. He works Door Dash to help make ends meet, and still has to have help from us sometimes, which makes him feel like a loser. It's really sad!!

[prairiewindmomma]

Our metro is short over 100,000 housing units. We have seen houses turning more slowly here (no more 20 offers in a day, buying sight unseen IRL and waiving inspections) but the market is nowhere near a healthy place here. 
 

We see a lot of multigenerational living or young professionals buying in and then getting 3-4 roommates to swing the payment. 

[Scarlett]

3 hours ago, kbutton said:

Here, I hate what most flippers are doing (some really are doing a public service with fixing up rotting houses in decent neighborhoods). They aren't buying homes that need real work; they are buying homes that need a cosmetic update plus a couple of mild but annoying/inconvenient fixes. They are often not done all that well, but the prices rise a lot relative to what was done to the house. Meanwhile, homes that are well-maintained but need cosmetic fixes that the owner isn't excited about doing (like ripping up flooring to make it all grey vs. letting someone choose their own) are expected to receive a significantly lower cost and pay all the buyer's fees even though the buyer will often be getting a much nicer house (structural fixes have been done, etc.) than one of the flipped ones that has trendy floors. It's weird. 

It's really hard to find a reasonably priced house that you can just polish a bit once you move in. You get an overpriced house that's been polished poorly and will need work sooner than later.

You can get new houses all over the place. They are bigger, but everything is builder grade stuff you have to replace relatively soon (and we've seen friends go this route and have to get tons of work done).

 

 

Agree. Most flip houses around here are not done well.  Including the one that my kids bought. The shower in the master was really pretty but had to be completely ripped out and redone.  Thankfully the plumber filed a claim with his insurance but it was a major pain for a young couple that bought that house because it did not (appear to) need work. 
By contrast our house needed polishing (I like that word lol) and we have done a lot of all hat in three years, plus we have the pool and the apartment all for half the cost of a flipped house.  

Edited February 4, 2023 by Scarlett

[Faith-manor]

I have to say I have cautioned our kids to never buy a flip house. It is pretty much a get rich quick scheme, and a ton of them are disasters...totally, crappy work. We said if they wanted to find a house with good bones, but needing a top to bottom re-do, we would help them do the work. But don't buy one that was recently sold, rapidly "updated", and put right back on the market. Cruddy workmanship, cheapo materials.

[ArteHaus]

1 hour ago, Faith-manor said:

I have to say I have cautioned our kids to never buy a flip house. It is pretty much a get rich quick scheme, and a ton of them are disasters...totally, crappy work. We said if they wanted to find a house with good bones, but needing a top to bottom re-do, we would help them do the work. But don't buy one that was recently sold, rapidly "updated", and put right back on the market. Cruddy workmanship, cheapo materials.

Facts.That is our rule as well. We teach our children the same. It’s all about the bones, all the cosmetic changes are easy.

[Bambam]

We've always paid the money to have a PE do a professional inspection of each house we've bought. Two of those were brand new construction, but they found issues (small ones, but still). We've found it worth the money.

Issues found in various houses:
1. New construction, light switch in master bath was where it could be reached from tub, NEC violation, light switch moved.
2. New construction, foam/blown in insulation was not to the depth they claimed, had to blow in more.
3. Ceramic tiles fallen off one side of outside kitchen grill area (just along the countertop, and we should have noticed, but we didn't)
4. Dirt/mulch too high along foundation. Usually you want to see a decent amount of the solid concrete foundation in TX. Owners had to remove a lot (although I think they just moved it to outlaying tree/landscaped areas)
5. Small things like the rubber drain cover thingee on the kitchen disposal should be replaced. 

Nothing huge, but it was nice to have that assurance. 

I think it helps as we've moved more times/bought more houses, you learn more what to look out for. I'd encourage young folks to bring along parents when looking seriously at houses to get their input.  And I'd hire an inspector too. 

[Scarlett]

1 hour ago, Faith-manor said:

I have to say I have cautioned our kids to never buy a flip house. It is pretty much a get rich quick scheme, and a ton of them are disasters...totally, crappy work. We said if they wanted to find a house with good bones, but needing a top to bottom re-do, we would help them do the work. But don't buy one that was recently sold, rapidly "updated", and put right back on the market. Cruddy workmanship, cheapo materials.

We cautioned them against it too, but they did it anyway.  We did point out that a lot of the materials they used were very cheap.  Over all it is ok, and pretty…..ds is still finishing up school and working full time and she works full time from home..so they were not  in a fixer.  

[kbutton]

2 hours ago, Faith-manor said:

I have to say I have cautioned our kids to never buy a flip house. It is pretty much a get rich quick scheme, and a ton of them are disasters...totally, crappy work. We said if they wanted to find a house with good bones, but needing a top to bottom re-do, we would help them do the work. But don't buy one that was recently sold, rapidly "updated", and put right back on the market. Cruddy workmanship, cheapo materials.

It's hard to find these houses now that flipping is so common. 

[Carol in Cal.]

Couple of things—banks arguably don’t want to be writing mortgages right now because just about everyone thinks that rates will drop some and then they will be refinanced.  And people don’t want to put their homes on the market because prices have definitely softened locally.  So everything has kind of slowed down and mostly the market is currently people who HAVE TO move here, or people who HAVE TO move away, and it’s a toss up what that will do to prices to some extent.  I’m hearing that starter places are still selling pretty fast, but I know people who planned to sell last year who have changed their minds and a couple of them who actually had their homes on the market and took them off to wait this out.  

One thing that is speeding up some sales here is that the rules changed in the last few years about keeping your parents’ property taxes, and so now in most cases property taxes reset 6 months after the owner’s death to the appraised value—usually a HUGE increase here in CA.  So inherited homes have sellers who are extremely motivated to sell them quickly.  That’s why I keep hearing realtor friends ask for referrals to people who have just inherited property.

[TechWife]

We don’t expect housing prices to go down. The economy is in good shape overall - low unemployment, decent interest rates from a historical perspective, new jobs being added to the market on a national level. Aside from that, on a local level, we continue to be in a high growth area, adding both jobs and housing, with new construction starts of pre sold homes daily (so no spec homes). Resales are on the market fewer around 30 days or so right now - some are still going above asking, but most are at or under asking now. It’s still a sellers’ market here.

The difference I see is that most people moving now are either first time homeowners or are moving because they have to, not necessarily because they want to.

 

[Brittany1116]

We bought new construction in last recession. 6% but low sale price and the agents basically worked for free to sell it. Refinanced to a much lower rate later. New construction on adjacent lot of same size is 300sf smaller and sold few months ago for nearly double what we paid. Their mortgage is more than double ours according to Zillow. 

[popmom]

10 hours ago, Faith-manor said:

I have to say I have cautioned our kids to never buy a flip house. It is pretty much a get rich quick scheme, and a ton of them are disasters...totally, crappy work. We said if they wanted to find a house with good bones, but needing a top to bottom re-do, we would help them do the work. But don't buy one that was recently sold, rapidly "updated", and put right back on the market. Cruddy workmanship, cheapo materials.

Yep. My dd and her fiancé are trying to buy in Maryland rn. I told her she’d be much better off buying a fixer and doing it right. I told her to look every “updated” listing up on Zillow for the price history to see if it’s a flip.

To add to the risk of buying a flip last year when the market was so hot… Every decent house was getting above asking price and MOST buyers were WAIVING inspections in order to make their offers more attractive. Even cash buyers were waiving inspections! 

Edited February 5, 2023 by popmom

[popmom]

It’s interesting to hear people say how well the economy is doing. The past 2 years have been really hard for us. Inflation has hit us hard. The pandemic plus weather hit dh’s industry hard so he’s had his pay cut on top of inflation. We rarely ate out at a sit down restaurant before, but that’s down to zero. No grocery or pizza delivery. Chick fil a a couple of times a month is about as spendy as we can do rn. I’ve even cut in half my trips to McD’s with my spoiled doggie for iced tea. (They aren’t doing $1 drinks anymore 😢) Perish the thought! 😂

So…we are actually considering refinancing our house. Between pay cut, inflation, 2 kids in college (all their rents/living expenses up, too), rotting windows, a wedding, etc…we’ve had to use our HELOC. Then interest rates went up on that HELOC. We are looking at refi to just have one mortgage—one payment—fixed rate. Sucks at our age, but we will recover quickly. (Praying dd2 will give us a year before she decides to get married lol)
 

Dd1 is the one getting married and moving to MD. Dd2, her twin was living in ATL paying $1500 a month for a one bedroom on a graphic designer salary. I mentioned on another thread she found a job making more money in Huntsville recently. She found a decent apartment for $1000 a month with a shorter commute. We had been helping her by continuing to pay for her car insurance. She’s super excited that’s she’s about to be 100% financially independent from us lol. SO. AM. I.
 

Then dd1twin marries in March and moves in May—off of our car insurance, too! That’s half my kids off our policy—going to cut our premium by half—at least! Sweet relief! We’re paying $9000 a year in car insurance alone rn.

Homes in my area (B’ham, AL) and in the D.C. burbs where dd is moving—it’s definitely cooling off a bit. Prices are still high, but the bidding wars have ended. Premium properties are still selling quickly but not way above asking price like they were this time last year. 
 

Just read an article on Forbes or CNBC that even tho the fed will raise interest rates again, mortgage rates are expected to drop by the end of the year. This is due to the impending (debatable) recession. 
 

edit to add a link to article OP might be interested in: https://www.nerdwallet.com/article/finance/inflation-and-recession

 

Edited February 5, 2023 by popmom

[Arcadia]

38 minutes ago, popmom said:

It’s interesting to hear people say how well the economy is doing. The past 2 years have been really hard for us. Inflation has hit us hard. The pandemic plus weather hit dh’s industry hard so he’s had his pay cut on top of inflation. We rarely ate out at a sit down restaurant before, but that’s down to zero. No grocery or pizza delivery. Chick fil a a couple of times a month is about as spendy as we can do rn. I’ve even cut in half my trips to McD’s with my spoiled doggie for iced tea. (They aren’t doing $1 drinks anymore 😢) Perish the thought! 😂

Almost half my husband’s pay is in stocks so his 2022 taxable income went down by $65k. We budget based on take home pay so our lifestyle didn’t change. We do miss the dollar menu at Burger King since that was a treat for us a few times a year. We don’t need groceries or pizza delivery since we can get to go pizza from Costco and buy our groceries at the same time. My husband has colleagues that were layoff in November and last month. 

[popmom]

58 minutes ago, Arcadia said:

Almost half my husband’s pay is in stocks so his 2022 taxable income went down by $65k. We budget based on take home pay so our lifestyle didn’t change. We do miss the dollar menu at Burger King since that was a treat for us a few times a year. We don’t need groceries or pizza delivery since we can get to go pizza from Costco and buy our groceries at the same time. My husband has colleagues that were layoff in November and last month. 

I don’t have any idea what it’s like getting paid in stock. That’s interesting. We have always budgeted on take home pay, too. But dh always received a yearly bonus—until the pandemic. We NEVER depended on it until our oldest two started college in 2016. And then we did depend on it. It is what it is. We still are able to put money away for retirement, so we aren’t in a dire situation. It’s just “first world problems” for us. 
 

Eta I do love me a Whopper Jr once in a while. I guess we’re both outta luck on those dollar menus!

2nd eta: I am frugal by nature and never would have considered paying extra for food/grocery delivery prior to the pandemic and autoimmune disease dx. Now those things don’t seem as much of a luxury as prior to 2020.

Edited February 5, 2023 by popmom

[popmom]

1 hour ago, Arcadia said:

 My husband has colleagues that were layoff in November and last month. 

But unemployment is at historically low levels,  tight labor market, the economy is good so they will be fine and have no suffering whatsoever! NOT. The ((positive)) unemployment numbers are meaningless if you (or your dh’s colleagues) are the one who has/have no way to provide for their family. It’s very sobering to know that it can happen to anyone at any time. And it’s not just about the money. Losing one’s livelihood is about much more than money. I know that was hard for both you and your husband to see that happen. Very destabilizing.

Edited February 5, 2023 by popmom

[Carrie12345]

13 hours ago, ArteHaus said:

Facts.That is our rule as well. We teach our children the same. It’s all about the bones, all the cosmetic changes are easy.

In our area, the problem is that almost none of the houses have good bones! The population grew from 2,000 in 1990 to 5,000 in 2000, to 7,000 in 2010. (Approx.) Builders just slapped stuff up and kept going!

[Carrie12345]

18 hours ago, Scarlett said:

It does remind me of the housing crash in 2008, but I also am not an economist.  My son and his wife paid $280k for a flipped 2000 sf house in our small town. Less than 3 years earlier, just before Covid, we paid $140k for our 2000sf house with a pool and a building that could be an apartment. On 1/2 an acre.  It wasn’t as shiny and pretty as my sons house but the neighborhood is similar.  
I think a lot of people are going to be upside down in a few years.  

It does feel that way.   
We bought in 2005, getting what was a reasonable price and rate when things were starting to inch up. Then everything went bananas and we were sunk for so dang long!

Building through Covid was awful, but our much, much bigger, brand new house is $400/mo more than our little starter home because we got in on the rock bottom interest and signed before the big price hike.  I’d estimate that we theoretically have nearly the same equity, possibly even more, in the new house we’ve been in less than 6 months as the house we were in for 17 years.

[historically accurate]

5 hours ago, Arcadia said:

Almost half my husband’s pay is in stocks so his 2022 taxable income went down by $65k. We budget based on take home pay so our lifestyle didn’t change. We do miss the dollar menu at Burger King since that was a treat for us a few times a year. We don’t need groceries or pizza delivery since we can get to go pizza from Costco and buy our groceries at the same time. My husband has colleagues that were layoff in November and last month. 

The largest employer in my county, a huge union-based factory, is closing "indefinitely" in about 3 weeks. I am not expecting a stay, although my co-worker is, but I think that's just wishful thinking since her DH works there. I'm afraid there's going to be a lot of hurt in this area for a long while. 

[Scarlett]

2 hours ago, Carrie12345 said:

It does feel that way.   
We bought in 2005, getting what was a reasonable price and rate when things were starting to inch up. Then everything went bananas and we were sunk for so dang long!

Building through Covid was awful, but our much, much bigger, brand new house is $400/mo more than our little starter home because we got in on the rock bottom interest and signed before the big price hike.  I’d estimate that we theoretically have nearly the same equity, possibly even more, in the new house we’ve been in less than 6 months as the house we were in for 17 years.

And imagine if you had bought when prices were at their highest because you feared you couldn’t get anything if you waited.  Which brings me to how crazy it is that people buy things at such high prices. I think my kids overpaid for this house.  Their mortgage is $2000.  I asked them lots of questions trying to get them to think through job loss, pregnancy, etc.  I tried to get them to buy a less shiny house and pay it off at 2000 a month and then they would be in a good position to remodel, build etc.  But they wanted out of the apartment, their lease was up and this flip house was so pretty and fresh and clean.

[Scarlett]

16 hours ago, Bambam said:

We've always paid the money to have a PE do a professional inspection of each house we've bought. Two of those were brand new construction, but they found issues (small ones, but still). We've found it worth the money.

Issues found in various houses:
1. New construction, light switch in master bath was where it could be reached from tub, NEC violation, light switch moved.
2. New construction, foam/blown in insulation was not to the depth they claimed, had to blow in more.
3. Ceramic tiles fallen off one side of outside kitchen grill area (just along the countertop, and we should have noticed, but we didn't)
4. Dirt/mulch too high along foundation. Usually you want to see a decent amount of the solid concrete foundation in TX. Owners had to remove a lot (although I think they just moved it to outlaying tree/landscaped areas)
5. Small things like the rubber drain cover thingee on the kitchen disposal should be replaced. 

Nothing huge, but it was nice to have that assurance. 

I think it helps as we've moved more times/bought more houses, you learn more what to look out for. I'd encourage young folks to bring along parents when looking seriously at houses to get their input.  And I'd hire an inspector too. 

A PE? As in Professional Engineer?

[Faith-manor]

17 hours ago, popmom said:

Yep. My dd and her fiancé are trying to buy in Maryland rn. I told her she’d be much better off buying a fixer and doing it right. I told her to look every “updated” listing up on Zillow for the price history to see if it’s a flip.

To add to the risk of buying a flip last year when the market was so hot… Every decent house was getting above asking price and MOST buyers were WAIVING inspections in order to make their offers more attractive. Even cash buyers were waiving inspections! 

It was insane. And I know several people who waived inspections and lived to regret that in a big way if they lived in states where the seller does not have to disclose health/life threatening defects.

Edited February 5, 2023 by Faith-manor

[Soror]

 

8 hours ago, popmom said:

It’s interesting to hear people say how well the economy is doing. The past 2 years have been really hard for us. Inflation has hit us hard. The pandemic plus weather hit dh’s industry hard so he’s had his pay cut on top of inflation. We rarely ate out at a sit down restaurant before, but that’s down to zero. No grocery or pizza delivery. Chick fil a a couple of times a month is about as spendy as we can do rn. I’ve even cut in half my trips to McD’s with my spoiled doggie for iced tea. (They aren’t doing $1 drinks anymore 😢) Perish the thought! 😂

 

Ya, it is not so much helpful to hear how well things are when you are struggling. Many people are struggling that I know. Having a job is great but it only gets you so far when inflation is high and very real. Our income last year was about 30% less with prices going up and up. The economy is not great for us. I'm getting a FT job for the first time in 18 years. It's too much stress for me for things to be tight, especially with 3 teenagers now and entering a season of them needing more from us. Plus, yet again things aren't looking good at dh's work (think they might be sold again) and I want a back up plan in case SHTF. 

But I do think people have a short memory on interest rates. My mom was mentioning that to me about the sky high interest rates. But the prices haven't dropped enough to make up for the rising interest rates.

[QueenCat]

It's still a sellers market here. Housing prices have not gone down since they went up almost two years ago. Since we bought after they went up, we don't want to see the prices go down. At least not significantly. We put 40% down, so we'd technically be fine if we had to sell lower, but we'd still lose money overall, as we'd have to use current equity to pay off the loan if we sold for less than we bought. And that would impact our retirement home. 

And no, we couldn't wait on buying. Would have been worse, anyways, since interest rates went up after we bought. 

Edited February 5, 2023 by QueenCat

[ArteHaus]

6 hours ago, Carrie12345 said:

In our area, the problem is that almost none of the houses have good bones! The population grew from 2,000 in 1990 to 5,000 in 2000, to 7,000 in 2010. (Approx.) Builders just slapped stuff up and kept going!

You know what, I absolutely get that. It is very similar in our area as well. I would say around 90% new construction. However, that occasional older home exists, that has beautiful craftsmanship that can be shined up with some elbows grease. More unfortunate, is the older homes that have been “upgraded” with builder grade materials. Ugh. 

We also live in an area that expanded fairly quickly, as well. The area is actually a conglomerate of cities that make a small “metro” area, but the town I grew up in went from 24k in the 90’s to 75k now, and this replicated throughout the 5-10 “towns” that are  in our whole area. So, not only are there a lot new construction-no-care-to-architecture homes, but a lot of those homes are from the 90’s era. And yikes, the aesthetics are just…off.

We actually considered moving to Alabama at one point (my husband does have family there) because we were so disgusted with the housing aesthetic in our area. Alabama, although dripping with lovely homes very well priced, well, let’s just say we came to our senses very fast and stayed put, lol. 

So yeah, I agree, and it can be a real estate bummer. 

[Carrie12345]

12 minutes ago, ArteHaus said:

You know what, I absolutely get that. It is very similar in our area as well. I would say around 90% new construction. However, that occasional older home exists, that has beautiful craftsmanship that can be shined up with some elbows grease. More unfortunate, is the older homes that have been “upgraded” with builder grade materials. Ugh. 

We also live in an area that expanded fairly quickly, as well. The area is actually a conglomerate of cities that make a small “metro” area, but the town I grew up in went from 24k in the 90’s to 75k now, and this replicated throughout the 5-10 “towns” that are  in our whole area. So, not only are there a lot new construction-no-care-to-architecture homes, but a lot of those homes are from the 90’s era. And yikes, the aesthetics are just…off.

We actually considered moving to Alabama at one point (my husband does have family there) because we were so disgusted with the housing aesthetic in our area. Alabama, although dripping with lovely homes very well priced, well, let’s just say we came to our senses very fast and stayed put, lol. 

So yeah, I agree, and it can be a real estate bummer. 

Yup, that’s pretty much it. There are some lovely older homes, but they’re almost never for sale. Our township still had a one room school house in the early 1950s, so the pickings are quite slim, lol, and family holds on to them. Our friends are living in their ancestors’ house, which used to serve as the local government office when there were a few hundred residents.

[Bambam]

4 hours ago, Scarlett said:

A PE? As in Professional Engineer?

Yes. 

[katilac]

On 2/4/2023 at 11:07 AM, Scarlett said:

It does remind me of the housing crash in 2008, but I also am not an economist.  My son and his wife paid $280k for a flipped 2000 sf house in our small town. Less than 3 years earlier, just before Covid, we paid $140k for our 2000sf house with a pool and a building that could be an apartment. On 1/2 an acre.  It wasn’t as shiny and pretty as my sons house but the neighborhood is similar.  
I think a lot of people are going to be upside down in a few years.  

And yet, being underwater on a mortgage might still be better than paying sky-high rent for years, particularly if you are paying down a fixed-rate mortgage at an accelerated rate. 

I'm more like you when choosing a house, for sure, but paying more in a neighborhood that is likely to be more in demand can work also. I have relatives who have always gone for the expensive house, but also always made money in the end. I'm just not suited for that kind of long game, lol 

12 hours ago, popmom said:

 2nd eta: I am frugal by nature and never would have considered paying extra for food/grocery delivery prior to the pandemic and autoimmune disease dx. Now those things don’t seem as much of a luxury as prior to 2020.

Pickup is almost as good, germ-wise, bc you generally only see one person, at a bit of a distance, for a very short period of time. And it's usually free. We do have one store that charges $4 per pickup order, but that's hella cheaper than delivery (and probably less than I spend on impulse items in the store, so I should really give it a try, as they are 2 minutes from my house, lol). 

 

[popmom]

40 minutes ago, katilac said:

 

 

Pickup is almost as good, germ-wise, bc you generally only see one person, at a bit of a distance, for a very short period of time. And it's usually free. We do have one store that charges $4 per pickup order, but that's hella cheaper than delivery (and probably less than I spend on impulse items in the store, so I should really give it a try, as they are 2 minutes from my house, lol). 

 

Yes—I like to do pick up. Definitely helps prevent impulse buys. Downside is I can’t use coupons.
 

Before I was diagnosed and started treatment last November—my fatigue and brain fog were bad enough that I didn’t feel safe driving many days. 
 

***FYI if you live in an area that recently got Kroger delivery service, it’s a flat $6.95 fee and they have a no tipping policy. The fee is offset by the fuel I save. I’ve used it 3 times because they are offering huge credits for trying it out. It’s not “same day”, but still very convenient and surprisingly good prices. 

[popmom]

2 hours ago, ArteHaus said:

 

We actually considered moving to Alabama at one point (my husband does have family there) because we were so disgusted with the housing aesthetic in our area. Alabama, although dripping with lovely homes very well priced, well, let’s just say we came to our senses very fast and stayed put, lol. 

 

Well, if you ever change your mind, I, personally, would welcome you here. 🙂 It’s not for everyone, but most who move here from out of state grow to love it here. Except for August. Nobody loves it here in August lol

[Sneezyone]

43 minutes ago, katilac said:

And yet, being underwater on a mortgage might still be better than paying sky-high rent for years, particularly if you are paying down a fixed-rate mortgage at an accelerated rate. 

I'm more like you when choosing a house, for sure, but paying more in a neighborhood that is likely to be more in demand can work also. I have relatives who have always gone for the expensive house, but also always made money in the end. I'm just not suited for that kind of long game, lol 

Yep. We buy the worst house in the best neighborhood in our range with the highest rated schools (even when homeschooling). The one (out of 4) time we deviated from that was the high-interest loan. It resulted in a seven year recovery period. Not bad if you don't ever plan to move but not good for us/never again. We still advise our kids to buy when able, just in a place they want to stay for a while.