Hot Housing Market

[gregkl]

I have always stayed conservative. I hope it pays off. I have had mortgages now for over 30 years. I remember when loan officers would say "no". And I remember getting my first mortgage. He made sure I could handle the monthly payment and that I had enough downpayment to avoid pmi.

I sold that house after two years of sweat equity for $75k. I paid $44k. That allowed me to build another one and that set me on a path of having equity in my homes enough to weather downturns.

Then life took a turn, I had to move here to Indiana and lived in a house in Lafayette that I sold for only $16k more than I paid for it 16 years prior. Then moving to Bloomington where house prices were probably 30% higher than Lafayette, I had to buy a project.

So life got put on hold for the last five years to get this house functional. I still have a deck to replace, a porch to rescreen and landscaping. But at least I'm fully
functional inside now.

 

[OkieGirl]

This current market looks weird, though. It doesn't look like it's being driven by the government or subprime lending, from what i can see. Where's this coming from?

I would just be guessing, but I think it's a lot of factors.
*I do think there is a growing slice of the general population that does have a better grasp on their finances and have reserves to survive a few bumps in the road (thank you, Dave Ramsey). Those folks are proceeding with life as normal and are ready to buy a home or need to move up to a larger home with space for a work-at-home office.
*It also 'feels' like there are more people seeking housing than I can remember previously. The number of corn fields being flipped to housing is remarkable. Apartments are popping up at record pace and appear to be filled the minute the units are available. I'll defer to others as to where the population increase might be coming from...

 

[Cameramonkey]

There were lenders out there that would write anything!

Like us. We were approved for $250k. We looked at our agent like he grew a third head when he told us that. "we cant afford that much house! That's easily $100,000 over our budget!"

"I didnt say you could afford it. That's just what you are approved for. *shrug*"

 

[churchmouse]

I would just be guessing, but I think it's a lot of factors.
*I do think there is a growing slice of the general population that does have a better grasp on their finances and have reserves to survive a few bumps in the road (thank you, Dave Ramsey). Those folks are proceeding with life as normal and are ready to buy a home or need to move up to a larger home with space for a work-at-home office.
*It also 'feels' like there are more people seeking housing than I can remember previously. The number of corn fields being flipped to housing is remarkable. Apartments are popping up at record pace and appear to be filled the minute the units are available. I'll defer to others as to where the population increase might be coming from...

This all started when DJT put his hand on that bible and swore the oath. The money markets re-opened their doors and portals after 8 years of Obama and Bidden regulating everything into a crawl. I still know more than a few people in the Mortgage broker arena and they hated those 2 with an angry passion.
2 years in and the markets were booming. New construction was off the rails. Things were literally jumping out of the ground. Money is easier to get. Rates are lower than I remember ever seeing them. People also know if those 2 **** heads get the big boy office all of this will be in that tank in short order. Its what they do. The take something good and **** it up.

So the rush is on before the doiors close again.

Prove me wrong. Please.

 

[tv1217]

Like us. We were approved for $250k. We looked at our agent like he grew a third head when he told us that. "we cant afford that much house! That's easily $100,000 over our budget!"

"I didnt say you could afford it. That's just what you are approved for. *shrug*"

Call it wiggle room

Rocket/Quicken pre-approved me for 250, my credit union approved 200. The house I'm in process on buying now is 165.

 

[Dirtebiker]

Housing is incredibly hot right now. The boom is a mix of city folks fleeing to the burbs in light of covid and civil unrest. Also the school systems. The city schools are often underfunded and lack the needs to help the students excel. The other part is the low rates. Lowest in history for lending. People are getting qualified left and right. Good credit, halfway decent down payment and passable work history and youre in there. Another factor is cash surplus and stimulus. People have been sitting on cash and saving and havent done anything with it. Home builders have done interviews indicating the hike in price of materials and how its beginning to affect their bottom line. Lumber is at an all time high. Supplies are thinning out. Labor is stretched thin. Home builders like Olthof, Poulte and others have been securing lots and selling them the same day they get zoned. They raise the price and people still pay.

Couple things to look at here.
1) if you have a mortgage and your rate is above 3%, go for a refinance. Get your rate lower. Get your monthly lower.
2) you may want to do a "cash out" refinance. If you owe 20k on your house, refinance for $50k and go buy yourself a new car. Or do some home improvements. Or buy that McMillan 50cal . Pay off other debts you may have. You get the picture right..
3) If you've thought about selling, make the move. Plan ahead and secure youre new place. Like others in this thread have said, people are overpaying for houses right now. Just like with stock trading. Don't hesitate on your execution, you might miss your moment.

Yeah, that makes total sense.
Extend your mortgage to buy a car!
why not pay the house off THEN pay cash for the car!? Personally I like 0% better than 3%!

 

[CampingJosh]

I have friends who listed their house (west side of Indy) on a Friday, then picked from 5 offers on that Monday. The offer they took was basically "whatever it appraises for plus $500" with a price floor. I never knew such an offer existed.

It's crazy out there.

 

[churchmouse]

I have friends who listed their house (west side of Indy) on a Friday, then picked from 5 offers on that Monday. The offer they took was basically "whatever it appraises for plus $500" with a price floor. I never knew such an offer existed.

It's crazy out there.

It is nuts.
We were considering selling the house we own next door. The kids were thinking of moving with a growing family and issue we were having with them. So we finished up a few of the upgrades we had started and let a few folks know it "MIGHT" be coming on the market. 1 was the Hispanic neighbor to our south and the other a Mortgage broker the spouse used to work for.
We had 6 people wanting to see it the next day and 3 offered up some stupid money in cash. Stupid being $10K over what we thought it was worth.

The kids got kicked in the "Reality" of whats out there and how much. We have gotten those issues solved and we are not selling the house but man the market will never be here again.

 

[rob63]

This all started when DJT put his hand on that bible and swore the oath. The money markets re-opened their doors and portals after 8 years of Obama and Bidden regulating everything into a crawl. I still know more than a few people in the Mortgage broker arena and they hated those 2 with an angry passion.
2 years in and the markets were booming. New construction was off the rails. Things were literally jumping out of the ground. Money is easier to get. Rates are lower than I remember ever seeing them. People also know if those 2 **** heads get the big boy office all of this will be in that tank in short order. Its what they do. The take something good and **** it up.

So the rush is on before the doiors close again.

Prove me wrong. Please.

FWIW, our realtor was very anxious for us to get our house on the market before the election. I couldn't get him to explain his reasoning, but it was clear that he felt a change in politics will adversely effect the market. I really don't want to derail the thread into another argument about politics, just offering my experience with our realtor.

 

[churchmouse]

FWIW, our realtor was very anxious for us to get our house on the market before the election. I couldn't get him to explain his reasoning, but it was clear that he felt a change in politics will adversely effect the market. I really don't want to derail the thread into another argument about politics, just offering my experience with our realtor.

As with the last bubble it is generated by political influences. Not to start that argument but if one does the research it will become very obvious.
Our friends in the housing arena say it all the time. It is a roller coaster. When "O" was selected the money tap dried up very quickly. He and his ilk regulated the market into submission. Trump dropped most all of that over reach and the market went nuts.

With us it was a no brainer to keep the house so the terrorists (see avatar) could remain close to us. We all have our motivations.

 

[BE Mike]

It was crazy a dozen or 15 years ago. I was getting all these unsolictited mailers telling me I was pre-approved for ridiculous amounts. My credit score was high, but my income was E-7 pay. Sure, I could afford that mortgage if I didn't have to eat or have utilities. They burned so many people with that, and at the governments behest. They created the bubble, then they burst it.

This current market looks weird, though. It doesn't look like it's being driven by the government or subprime lending, from what i can see. Where's this coming from?

I too have been wondering about the big boom. For my daughter, her ability to move into a more expensive home was because she and the SIL took the "Financial Peace University" course and stuck with it pretty closely. She was also able to accrue substantial equity in her home, which will make a big down payment possible on the new home. My neighbors of over 20 years, put their house up for sale several years ago. It had "issues", which he addressed (I don't know how successfully) so the house stayed on the market for 2 years without any offers. He passed away a couple of years ago and his widow put the house up for sale about a year ago. It was sold in a matter of weeks! My guesses for the boom are rock bottom interest rates, the economy (before covid) was booming and before 2016 we were in a recession. The population is growing due to new business. The pandemic caused a pent-up consumer demand. Some of the shifting to permanent at-home work sounds plausible, too.

 

[hoosierdoc]

I am glad we built a house way under what we could "afford", which was way less than we were approved for.

loans be crazy. the interest rate now though makes it very attractive to refinance and pay off any other debt you have.

 

[CampingJosh]

and before 2016 we were in a recession.

The Great Recession ended by June of 2009. We were not in recession at all from 2010 to 2019.

There are lots of other ways that policy can limit growth--and I'm guessing that's what you're pointing to--but "recession" has a specific definition, and it wasn't happening.

 

[IndyIN]

I started to post this earlier... there are a lot of folks that are a water heater going out away from not being able to pay that month’s mortgage. I sold my home in Greenwood in January 2019, and the family buying it was completely maxed out. Any issues and they were screwed, and I assume they still are based on a recent drive-by in October.

I really wonder if all these loans are going through at the rates people think they will get? Pre-approval isn’t hard, but the underwriting can change things.

I hope people are not being stupid, but I suspect a few are.

 

[ChristianPatriot]

Pretty tempting to sell now and wait for the bubble to pop.....

 

[gregkl]

Pretty tempting to sell now and wait for the bubble to pop.....

Hey, I asked you once in another thread if that is your truck in the avatar and I'm sure it got lost in the subject matter.

That is cool if it is. Well, it's cool even if it isn't but you get the picture.

 

[ChristianPatriot]

Hey, I asked you once in another thread if that is your truck in the avatar and I'm sure it got lost in the subject matter.

That is cool if it is. Well, it's cool even if it isn't but you get the picture.

I wish. It’s Roadkill’s “Muscle Truck”. There’s plenty of clips on YouTube of it. It’s a ripper for sure.

 

[gregkl]

I wish. It’s Roadkill’s “Muscle Truck”. There’s plenty of clips on YouTube of it. It’s a ripper for sure.

Ah, I see.

I have been thinking about my "retirement" vehicle. I have another 9 years, maybe 6 if the stars line up right until that day. I am thinking a "square body" Chevy would be cool to have or the opposite end of the spectrum and get an electric and be done with maintenance!


I'll look it up on YouTube.

 

[NKBJ]

Based upon comments recession must be a matter of perception management.

 

[The Dawg]

I am glad we built a house way under what we could "afford", which was way less than we were approved for.

loans be crazy. the interest rate now though makes it very attractive to refinance and pay off any other debt you have.

The pre-approval value the bank gives is crazy. I bought a house that was about 1/3 of that amount. I got married shortly there after, so it's even more affordable now.