Home Values

[2forISU]

Home values in San Jose are rising $800 a day vs. the national avg. of $50 a day. This is crazy and makes you wonder what is going to happen to the real estate market over the next 3-5 years.

https://www.bloomberg.com/news/articles/2018-04-09/home-values-are-rising-by-800-a-day-in-san-jose

 

[Cyclonepride]

Oh, housing values can be pushed up higher and higher with no repercussions. It's not like we've ever seen this become a problem before!

 

[jdcyclone19]

My wife and I have been trying to find a house to upgrade from our 920sqft house. Its crazy that a house that would be considered an upgrade (12-1400sqft) in the Ankeny/PC area is a minimum of 100-125K more expensive than our current mortgage.

Which begins the question of whether or not we should finish the basement and remodel, which would still be lower cost than a different house.

 

[Cyclone.TV]

My wife and I have been trying to find a house to upgrade from our 920sqft house. Its crazy that a house that would be considered an upgrade in the Ankeny/PC area is almost 100K more expensive than our current mortgage.

Which begins the question of whether or not we should finish the basement and remodel, which would still be lower cost than a different house.

Bigger houses usually cost more money. Just FYI.

 

[2forISU]

Oh, housing values can be pushed up higher and higher with no repercussions. It's not like we've ever seen this become a problem before!

The difference is that these are cash buyers vs. borrowing 80-90% of the value. I'm a little concerned with the cash-out refinance and what could happen there.

 

[Stewo]

Bigger houses usually cost more money. Just FYI.

When you make outlandish statements, you should provide a link.

 

[3TrueFans]

Bigger houses usually cost more money. Just FYI.

Unless they're haunted or someone was recently murdered inside, they should add that as a filter criteria on Zillow.

 

[Clone83]

An 800K burned down, fixer-upper for anyone interested:

. . . “They did leave it standing so you can remodel it versus tearing it down so you save a lot of money when you can leave a wall up and do a remodel versus a complete tear-down,” . . .

A post Monday on the Willow Glen Charm page on Facebook lists a $799,000 asking price. Barr told KTVU she’s already received at least 10 offers and expects to sell the property in the next few days. . . .

Read more here: http://www.sacbee.com/news/state/california/article208596279.html#storylink=cpy

 

[Stewo]

An 800K burned down, fixer-upper for anyone interested:





Read more here: http://www.sacbee.com/news/state/california/article208596279.html#storylink=cpy

If that was in Des Moines, it would be around $20k.

 

[jdcyclone19]

Bigger houses usually cost more money. Just FYI.

Thank you for this very informative post.

 

[cycfan1]

Can you not build for cheaper in California? Cost of materials/labor can't be that much different than the rest of the country.

 

[KnappShack]

Bigger houses usually cost more money. Just FYI.

My much bigger home in Chicago was much much cheaper than the condo I sold in California.

Location. Supply. Demand. Access to financing.

Watch loan default rates. Right now loans are still performing. I've seen some choppiness in performance, but it doesn't seem to be a red flag yet.

If that canary in the coal mine dies.....

If you want to go where homes don't appreciate then move to Chicago. The real estate market here is still pretty flat

 

[Cyclonepride]

The difference is that these are cash buyers vs. borrowing 80-90% of the value. I'm a little concerned with the cash-out refinance and what could happen there.

Where does it say that they are all cash buyers? Surely not everyone buying a home is, and when there's a loan against an inflated value, it will get upside down in a big way if the market goes down significantly (and it will at some point).

 

[Clonefan32]

I work some in real estate and I've seen a handful of houses not appraise for sale price lately. Used to never see that. Some of it is the post-housing market burst regulations on bank's relationships with appraisers. But I also think there are a lot of people throwing a crazy asking price out and getting it.

 

[somecyguy]

My wife and I have been trying to find a house to upgrade from our 920sqft house.

California is insane. I've had garages that big.

 

[jdcyclone19]

Can you not build for cheaper in California? Cost of materials/labor can't be that much different than the rest of the country.

Have you ever been to California? Almost everything is twice as expensive and the cost of living is outrageous. The population areas are so dense, if you want to build cheap you need to leave the populated areas and risk a 2-4 hour commute each way.

So no, you can't really build for cheaper.

 

[jdcyclone19]

California is insane. I've had garages that big.

My garage is 720sq ft and is where I am most of the time while I'm home.

 

[Clone83]

Click through this blog post for link to a recent Forbes article on Vancouver:

Forbes Mention: The Austrian von Mises/Hayek Theory of Speculative Bubbles (Vancouver Edition)
http://www.economicpolicyjournal.com/2018/04/forbes-mention-austrian-von-miseshayek.html

Walter Block points me to a Forbes article written by Bob Haber.

The essay discusses what appears to be a speculative bubble in the Vancouver real estate market.

Canadian Real Estate Bubble Blowing Up North

According to the Real Estate Board of Greater Vancouver, single detached homes in Vancouver (on a local currency basis) have risen from approximately $400K CAD to $1.75 million CAD since 2002. That’s a 337% increase in 15 years. . . . .

 

[cycfan1]

Have you ever been to California? Almost everything is twice as expensive and the cost of living is outrageous. The population areas are so dense, if you want to build cheap you need to leave the populated areas and risk a 2-4 hour commute each way.

So no, you can't really build for cheaper.

I haven't actually - so serious question.
I realize everything is expensive though - so question is i guess if its mainly the lot/space that is appreciating or the actual home... because given the costs of raw materials/transportation costs - should be some healthy margins in new home building.

 

[KnappShack]

Have you ever been to California? Almost everything is twice as expensive and the cost of living is outrageous. The population areas are so dense, if you want to build cheap you need to leave the populated areas and risk a 2-4 hour commute each way.

So no, you can't really build for cheaper.

I always said that if I had to go into Riverside County to buy that I'd just keep driving.

The desert in California looks like the desert in Arizona.

Looking at appraisals in LA you'll see values of a half a million just for the lot the home sits on. Not including the value of the home.

It's a different market. A detached condo in my old town, 1300-1400 sq ft would be in the high 600's to low 700's.

Was reading in Burlington that people think rents are too high. So I guess everything is relative