The Price of A House

[RSteve]

The house directly across the street from mine went on the market Monday afternoon. It's a rambler, three small bedrooms, two bathrooms, finished basement. It sold two years ago for $315,000. It's listed at $450,000. I expect that it will ultimately sell for about $385,00.

Friday, just before noon. I went outside to check the mail and the realtor, who I was surprised greeted me by name, walked over to my mail box to "chat."
"Well, Steve, are you about ready to list your house. I have the perfect condo for you that just was listed."
I asked if there was any action on the house across the street. He said there were multiple offers around $400,00, but the owner isn't in any hurry to sell and will wait for a while, until he gets closer to the listing price.
The owner hasn't lived in the house for a couple of years. It's been rented to a friend of his who is moving out of state.

 

[ftrplt]

So much for "affordable" housing!! FTRPLT

 

[RSteve]

So much for "affordable" housing!! FTRPLT

Not in metro St. Paul-Minneapolis. It's going to get much worse. With St. Paul's new 3% annual rent control, most building owners will turn their buildings into condos, finance the sale, and adjust the association fee based on building costs, inflation, taxes, etc.
As I wrote earlier, in St. Paul, most construction of apartment buildings has come to a halt. Those in mid-construction are being converted to co-op buildings or condominiums.

 

[Zeno Marx]

So much for "affordable" housing!! FTRPLT

That's everywhere. And then some would say, "Get a better job and buy a dang house then." As our culture moves the goal posts around the field, it won't be just the poor losing out on creating wealth. Middle-class, and even middle-upper-class in some regions, won't be able to afford housing. DUH. We already know that, but this is even beyond what we've seen. What I'm most curious about is will cities and states relax/change their building codes to allow for much smaller, and even "tiny", homes to be built? Or parking codes altered as couples and small families move into vans and rehabed school buses rather than homes? Or create parking/living areas away from people clutching onto their property values? Something has to change, and it is clear Wall St isn't going to alter its behavior. Real Estate developers with DEEP pockets from 90 miles away from me are buying up houses like crazy. Turning them into high-priced rentals for the bigger city folks who can no longer afford to live in the bigger city where they work and who will commute, higher range condos, etc. Wall St isn't stepping back. They're jumping into it all guns a-blazing. So are local governments going to adjust? Somebody has to.

 

[Ranger107]

Happening around here too. Crazy Californians moving in and paying ridiculous prices. Homes that sold for 4/500K 3 years ago now going for 8/900K.

 

[RSteve]

It makes it very difficult not to "cash in" while the market is so hot.

 

[Brewdude]

It makes it very difficult not to "cash in" while the market is so hot.

Ya, but that also raises the issue of "where ya gonna move to"? As many areas are experiencing similar meteoric price rises, the list of options narrows considerable. That is, unless one is will to move to the boondocks....



Cheers,

RR

 

[RSteve]

Ya, but that also raises the issue of "where ya gonna move to"?

My older daughter's basement is a walkout/unfinished. For the cost of two years rent, I can convert that totally unused portion of her house into an apartment. I'd wager that neither she nor her husband goes down there more than once a month. She says it's mine anytime I want it. Her laundry is on the main floor.

 

[Brewdude]

My older daughter's basement is a walkout/unfinished. For the cost of two years rent, I can convert that totally unused portion of her house into an apartment. I'd wager that neither she nor her husband goes down there more than once a month. She says it's mine anytime I want it. Her laundry is on the main floor.

Well then, that sounds like a better deal than moving to a condo or apt where you can't smoke. Plus you'd be closer to family if you need an assisted living situation.


Cheers,

RR

 

[tslots]

Ya, but that also raises the issue of "where ya gonna move to"? As many areas are experiencing similar meteoric price rises, the list of options narrows considerable. That is, unless one is will to move to the boondocks....

Cheers,
RR

We live in the "boondocks", surrounded in all directions by orchards, farms and an 11,000 acre wildlife refuge. The nearest grocery / gas station is 6 miles away.
My wife and I had our custom home built in 2016 for $250K and the value has more than tripled.

 

[Ranger107]

Moving is just not an option for some people due to work, family, etc. We had friends who sold their house here for $600K 3 years ago. Hi ex to Kentucky and bought a 3900 square ft house for $290K. However, they were retired, no fami,y here, and not many friends. So for them it made sense to move. Could we do the same? Maybe, but not likely. First, wife doesn't want to go to Ky. 2nd, we .of a this area. Have lots of friends here and a nice lifestyle that suits us. And we are close to medical care, important at our age. Thus, many factors to consider when asking "where ya gonna go".

 

[RSteve]

The house directly across the street from mine went on the market Monday afternoon. It's a rambler, three small bedrooms, two bathrooms, finished basement. It sold two years ago for $315,000. It's listed at $450,000. I expect that it will ultimately sell for about $385,00.

It sold on Tuesday for full asking price, $450,000.

 

[RSteve]

The house, directly next door to the house that sold, went up on St.Paul Multiple Listing yesterday. It does not have a finished basement, as the other house did. My daughter said the opening price is $385,000 and there have already been 400 "looks". I spoke to the owner about two hours ago. The house is too small for their family. When they moved in, they had an infant and a toddler and were done having kids until the wife became pregnant with twins when the infant was eight months old. Now there's four kids under age five. Really nice young couple.
I asked why they listed at $385,000 when the house next door already sold for $450,000. He said they've already had multiple offers over $400,000.

 

[urbino]

Yeah. Winning offers these days are usually substantially above asking price.

 

[Timbo]

Yowzers thats mad, here in Aus it's even more insane. We paid 1.2 M for a 7 bedder house on three blocks in 2018 that I would've valued at about a million and the local real estates are now saying it is worth 2.5 M. That's in the boondocks too.

A converted public toilet, a couple of yards square, sold for a million bucks a few years ago in the city and a three bedroom house in Sydney recently sold for 5 mill.

I pity the people that can't afford to live in their own city these days, but it has been like that for decades here. Prices just keep going through the roof.

Soon the support staff will no longer be able to get to work without a several hour commute.

 

[Blackhorse]

Portland is crazy. Our medium sized 3 BR 2 BA attached garage ranch is worth just under 400K. We bought it 25 yrs ago for 80K.

 

[Ranger107]

Seems like it's that way most places. Damn Californians moving in here are payng exhorbitant prices for homes. Our place that we bought for $480K 6 years ago has almost doubled in value. Which would be great if we were planning to move but we are not going anywhere. Only thing it does is raise our taxes.

 

[RSteve]

The house, directly next door to the house that sold, went up on St.Paul Multiple Listing yesterday....

Sold for over $4, but the current owner would not tell me the exact sale price. My guess, substantial cash prior to the actual contracted price to lessen the property tax increase.

 

[Zeno Marx]

Wall St. A couple of interesting TV news pieces lately. First, 60 Minutes highlighting skyrocketing rent, and one reason for that is investment firms buying up houses for cash so they can rent them at absurd, inflated prices. Their piece shows a group from Toronto buying up small family homes (affordable small homes), so they can rent them to those same needy families for profit. Tell me that guy from Toronto doesn't look like the stereotypical used car salesman scumbag. This isn't inflation. This is greedy opportunism. I love how the "expert" opinions in this piece are other greedy outfits from the same problem. How are average people, even middle-upper class at some point, going to build any wealth?


I'm looking for the other link. I thought it was on PBS Newshour Weekend, but I'm not seeing it in the bullet points. This one highlights that investment firms are paying cash for houses, and the average person cannot compete with cash, no contingencies, and 7-day closings. So, other industrious investment firms fill that gap by giving cash to people for a 1% final sale fee. If they want to end up buying a house, and not losing out endlessly to corporations, there aren't a lot of options other than to do this, if they can afford the extra 1% cash on top of booming home prices. The subject in the piece had lost out on ten homes over a 1 year+ period, and with this "help", they were able to buy the next house they wanted. Great, another type of Wall St creation getting their hands in wallets.

 

[Carlos]

Around here any place that is decent enough to simply move in and live in it, is selling quickly. Usually to the first person. A lot of folks get in a bind because they close so quickly and have to be moved so the new owners can move in. We discussed it briefly. No doubt with little work we could sell for a nice tidy sum. But then we would be in the bind trying to find something affordable. Building new isn't affordable. Not to mention that I have been unimpressed with new build quality.