yupididit said:In reply to frenchyd :
$636k and $538k seems low to me. My wife owns a condo in Hawaii that's worth in the 800s without any upgrades.
Has she considered a condo in WV? They're cheaper for some reason.
yupididit said:In reply to frenchyd :
$636k and $538k seems low to me. My wife owns a condo in Hawaii that's worth in the 800s without any upgrades.
Has she considered a condo in WV? They're cheaper for some reason.
In reply to Steve_Jones :
2 story mobile home.
In reply to STM317 :
The Federal Reserve just figured out that housing demand fluctuates with interest rates??
Seems ridiculously obvious.
Sure glad our tax dollars are so good at producing useful studies.
In reply to SV reX :
Go big or go home:
In reply to Ian F (Forum Supporter) :
I could see why that would be worth more than $800K
...in cleanup fees.
Ian F (Forum Supporter) said:In reply to SV reX :
Go big or go home:
Redneck engineering at it's finest!
Steve_Jones said:yupididit said:In reply to frenchyd :
$636k and $538k seems low to me. My wife owns a condo in Hawaii that's worth in the 800s without any upgrades.
Has she considered a condo in WV? They're cheaper for some reason.
Thats super tempting but I think she'll stick with the rental income and equity lol
Plus, WV'ians never seemed super inviting in my experience LOL. Maybe Frenchy can explain that to me
yupididit said:Plus, WV'ians never seemed super inviting in my experience LOL. Maybe Frenchy can explain that to me
There must be some kind of reason why people in WV would be welcoming to Frenchy and not you... I Can't quite put my finger on why. Maybe it's because you lived in CA - I've heard they really don't like people from California. That must be it.
In reply to yupididit :
Try way, way east of Aurora. You might be able to find something affordable in the Byers area. That's a solid 45 minute drive from me, where High Plains Raceway is. Thing is, most of that land is farm land and I'm not sure is for sale or is zoned for residential use. If it is, expect to have to build and then pay a huge amount for utilities hook up including water. It's a lot harder to find land out here than I ever expected. 5 acres anywhere near the Denver area is multi millions....
What frenchy is suggesting doesn't exist out here. There are no plots of land just sitting around, or widows sitting on land they're going to sell for a song. At least nowhere near the Metro area...
In reply to frenchyd :
Did you seriously just compare W. Virginia to Hawaii and California? Really? No offense to W. Virginia, I'm sure it has beautiful parts but Hawaii and California are the most desirable places to live in weather wise. Yeah, they're going to be more expensive!
In reply to docwyte :
That sounds a lot like this area except 45 min drive only gets you 20 or so miles down the road ha.
SV reX said:In reply to STM317 :
The Federal Reserve just figured out that housing demand fluctuates with interest rates??
Seems ridiculously obvious.
Sure glad our tax dollars are so good at producing useful studies.
I don't think they just figured out that rates impact pricing. The take away for me was that they have data to support the idea that low rates have influenced rising prices more than lack of supply may have. pheller seems to be in favor of policy change to influence housing prices, so if the Fed is correct then policy change to raising interest rates closer to historical norms may be more influential than policy change that results in added supply. Although more supply would probably be welcomed in many places as well.
But I also think it's important to admit that lower prices with higher rates may not improve affordability. That wasn't discussed in the paper.
In reply to yupididit :
That's with no traffic, I'm rarely heading out that way during the week. High Plains is 60+ miles from me.
But I also think it's important to admit that lower prices with higher rates may not improve affordability. That wasn't discussed in the paper.
I think this is important. Even if prices come down some I don't think that makes things more affordable with the rise in rates.
I'm just going to use my house and payment as an example.
We paid $145k for our house at 3.125% interest. My monthly payment is $857, of that only $118/month goes to the principle, the rest is interest and escrow. With interest rates now more than double what we got locked into, and going up again today, the payment with everything else the same is almost $300/ month higher. That's a big increase, that in my opinion, really cuts into purchasing power.
I used my interest rate on the left and the 7.2% that came up on Google as "today's average rate" on the right.
All I changed in the calculator I used was the interest rate, not sure why PMI went from 5 years to 10
In reply to RevRico :
Because you have to have 20% equity to eliminate PMI.
At the higher rate, it will take 10 years to earn 20% equity, not 5.
In reply to SV reX :
It is also a good reason to apply any extra money available that month to the principle. Doing so early can knock years of the mortgage term and quickly increase equity.
I tried to treat the mortgage payment as a "minimum" and usually paid a fair bit more.
In reply to yupididit :
I'm guessing your experience with someone from WV was bad and I don't want to diminish that in any way. Personally I've seen that most people in WV are very welcoming of POC. I am a native and lived there til I was a teen and visit the state often. I have two friends from Ghana, oddly from two different social circles, that moved to WV due to work duties, and they were treated very well, to their surprise. Unfortunately. Very unfortunately, your mileage may vary. Either way, if I took you to Thanksgiving dinner, Mamaw and Papaw would probably give you a hug before you walked in the door.
In reply to Scotty Con Queso :
I've been to WV 6 times and 5 times I had negative experience. But my first time was the worst one, it only takes that for people to feel un-welcomed. The one time it wasn't a negative interaction was when I went to Summit Point to pickup a Jaguar from a non-VW'ian lol. And my first time, I was buying a Galant Vr4 in my young 20s. The seller was cool but his dad wouldn't let me on the property to look at the car and buy it. His son had to drive it down the street, he did apologize for his dad. To be fair, I've had similar interactions in every state I've lived in, including California. My neighbor was a racist and he also hated gays and liberals and then one incident with a E36 M3 cop. I do work with many people from WV who are really accepting people who weren't like that. I'm positive WV isnt like that as a whole.
Perception means a lot in such a diverse place like America but it isn't everything.
I don't think that is the number one reason people do no move to WV. So, no need to go off-topic lol
STM317 said:SV reX said:In reply to STM317 :
The Federal Reserve just figured out that housing demand fluctuates with interest rates??
Seems ridiculously obvious.
Sure glad our tax dollars are so good at producing useful studies.
I don't think they just figured out that rates impact pricing. The take away for me was that they have data to support the idea that low rates have influenced rising prices more than lack of supply may have. pheller seems to be in favor of policy change to influence housing prices, so if the Fed is correct then policy change to raising interest rates closer to historical norms may be more influential than policy change that results in added supply. Although more supply would probably be welcomed in many places as well.
But I also think it's important to admit that lower prices with higher rates may not improve affordability. That wasn't discussed in the paper.
The "secret" that always seems to surprise but shouldn't is that most people buy based on cash flow, yet we talk about house prices.
House price (divided by 360) + interest + taxes + insurance and other financing fees = monthly payment
People buy houses based on monthly payment, but we all seem to think about house prices, and then we are surprised when the other factors become major players.
If Netflix was $4500 and you got access for the next 30 years, ain't no one subscribing.
STM317 said: pheller seems to be in favor of policy change to influence housing prices, so if the Fed is correct then policy change to raising interest rates closer to historical norms may be more influential than policy change that results in added supply. Although more supply would probably be welcomed in many places as well. But I also think it's important to admit that lower prices with higher rates may not improve affordability.
I just don't see how raising rates benefits the majority of people who need A) higher wages and B) cheaper housing.
It seems to me that if you wanted to raise wages and produce more workforce housing, you'd make it less profitable for those who need it the least. You'd figure out some way of shifting the tax code to make it more profitable for businesses to pay their people more money.
Anyone who is flush with cash right now isn't going to build new apartments or new housing, they are going to search for deals among stuff that is already built. How do we convince them it's in their better interest to build a new home (housing ladder) or invest in an apartment building instead of scooping up cheap already built homes that normal buyers can't afford due to interest rates?
RevRico said:But I also think it's important to admit that lower prices with higher rates may not improve affordability. That wasn't discussed in the paper.
I think this is important. Even if prices come down some I don't think that makes things more affordable with the rise in rates.
I'm just going to use my house and payment as an example.
We paid $145k for our house at 3.125% interest. My monthly payment is $857, of that only $118/month goes to the principle, the rest is interest and escrow. With interest rates now more than double what we got locked into, and going up again today, the payment with everything else the same is almost $300/ month higher. That's a big increase, that in my opinion, really cuts into purchasing power.
I used my interest rate on the left and the 7.2% that came up on Google as "today's average rate" on the right.
All I changed in the calculator I used was the interest rate, not sure why PMI went from 5 years to 10
You make a clear case for a lower interest rate. I jumped on 2&1/8back when it was available. The down side is I get to deduct less so I wind up paying more in income taxes.
Using interest deduction I was able to buy a more expensive property and only pay 2% of my annual income for federal income taxes. And 3% of my income for state income taxes.
Owning a more expensive property means with inflation The property appreciates more than a cheaper property will.
A rising tide raises all boats. Just bigger boats more than little boats.
pheller said:How do we convince them it's in their better interest to build a new home
By actually making it in their better interest which it isn't. Most people that are flush with cash are going to wait for...
1. The Fed to stop increasing interest rates (I think the consensus estimate is around late Q1 of 2023)
2. The lag time effect for reduced affordability to pull home values down (say late Q2 of 2023)
Even after that, the risk that some entity forces rent forbearance or rent control or zoning code changes or tax code changes or any other mechanism to redistribute money away from landlords makes real estate investing less attractive so the profit must be higher to account for the new risks we're seeing.
pheller said:STM317 said: pheller seems to be in favor of policy change to influence housing prices, so if the Fed is correct then policy change to raising interest rates closer to historical norms may be more influential than policy change that results in added supply. Although more supply would probably be welcomed in many places as well. But I also think it's important to admit that lower prices with higher rates may not improve affordability.I just don't see how raising rates benefits the majority of people who need A) higher wages and B) cheaper housing.
It seems to me that if you wanted to raise wages and produce more workforce housing, you'd make it less profitable for those who need it the least. You'd figure out some way of shifting the tax code to make it more profitable for businesses to pay their people more money.
Anyone who is flush with cash right now isn't going to build new apartments or new housing, they are going to search for deals among stuff that is already built. How do we convince them it's in their better interest to build a new home (housing ladder) or invest in an apartment building instead of scooping up cheap already built homes that normal buyers can't afford due to interest rates?
Pheller,
realize that the house is a depreciating asset. The land is what appreciates. So tearing down an older house to build a bigger newer house is a lousy investment.
Sell the property and buy the worst house in the best community you can afford is the real way to gain with property.
RX Reven' said:pheller said:How do we convince them it's in their better interest to build a new home
By actually making it in their better interest which it isn't. Most people that are flush with cash are going to wait for...
1. The Fed to stop increasing interest rates (I think the consensus estimate is around late Q1 of 2023)
2. The lag time effect for reduced affordability to pull home values down (say late Q2 of 2023)
I agree with your assessment. But I wouldn't expect to see real bargains for a very long time. Interest rates aren't going to suddenly drop back to zero and with full employment there is little incentive to sell. .
The reason for the massive correction of prices in 2008 was 22 million unemployed people no longer able to make payments. ( and a few hundred thousand speculators Who gambled on property continuing to raise in value).
Make the FEDs the thought on housing is that the people who have houses are going to keep them and so if investors want to make money their going to need to build new houses.
I wish the Biden Administration would give us a first time home buyers, or even a "primary home buyer credit" to offset the increase in interest rates.
How we get higher wages into peoples hands is whole other debate.
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