Heh, anyone who has looked at their Zestimate metric could’ve told you that.
I think it’s a fair statement. According to that article, they got into this business in 2018. Volatility has shot up dramatically since then. One could argue that they should have been more cognizant of the volatility in the the 2000’s as an example, but it’s possible this cycle is even crazier, due to pandemic issues. The rest of the article lays out that the whole thing was basically more than they wanted to bite off, after implementing. It’s not easy to back out, but better that than throwing good money after bad.
They bought a house in my neighborhood. Paid at least 100k over current comps for it. Now trying to sell it for the same price as they bought it for and it’s been on the market for 3 weeks in a market where houses are selling before they are even listed.
On the bright side I guess I now live in a million dollar home according to Redfin and Zillow.
Here’s the house in case you want to share in the schadenfreude:
https://www.zillow.com/homedetails/25462-Morningstar-Rd-Lake-Forest-CA-92630/25534257_zpid/
Friends a cul-de-sac over from us recently sold their house almost $50k above asking price, after one day. They had fixed it up although I hate the floor plan. Huge lot though with a pool.
Lake Forest has some nice neighborhoods. That house would be close a million in Mission Viejo for sure.
Our previous house had all tile floors downstairs, like that house. We ended up hating it—so cold on the feet (we’re Asian). Probably less of an issue in So. Cal., though.
I mean, it’s a nice house, sure, but…
The weird thing is they say their risk tolerance before going into this was 2%, which over the three to six month timeframe they were looking at for flipping these properties is really not that much.10% per annum price moves in housing are not uncommon.
So no problem stepping on grapes, but issues stepping on tile?
Not even the weirdest thing on Qt3 this afternoon.
It feels like people around here are listing their house for way more than what they paid just to see if it actually sells. And in almost every case it is (for at least the asking price, if not more). Even tiny 2 bedroom 1000 sqft houses are being listed for $170,000, when even just a year ago you could buy something more than twice that size for the same price.
Even land is insanely priced right now. $4,000 an acre used to be the norm but right now it’s more like $10,000 an acre. And there are even 1 acre lots in nondescript areas listed for $50,000. That might be normal for certain areas of the country, but out here in the middle of nowhere that’s stupidly expensive.
I really want to buy a house this year, but I feel like no matter what I buy I’m going to end up owing vastly more than what it’s worth within a couple years.
Is there any reason to believe housing prices are going to go significantly down any time soon?
Rising interest rates will make mortgages much more expensive which has a depressive affect on housing prices, but inflation will make money worth less so they’ll cost more, and the disrupted supply chain means building a house will be much more expensive. Overall I would expect prices to continue rising, while perhaps buying power required to purchase stays relatively steady. But it’s impossible to predict these things, really.
All the things you said may be true, but this is the key. Especially since what matters isn’t if housing prices rise, but if your house’s price rises. And a bigger effect on that than any of these global forces is what happens in your city–does a big tech firm move in or out, what happens with the rest of the housing stock in the area, etc etc.
Well a couple meth heads got arrested and we got a new Dairy Queen…
Sounds like those should cancel each other out! ;)
Our house, which nominally has three bedrooms but is only just under 1000 square feet (not including basement), is valued for a lot more than that on the tax rolls. $170k here won’t cut it unless you really head to the boonies or luck into a decent prefab/mobile. All the new stuff is $300k and up at least.
Which is to say, it sucks all over for sure.
Home prices usually are not very volatile but they also rarely go down. Interest rates going up would slow things down. Of course some locations are more volatile than others.
I look at new houses every day in our area, and from what I’ve seen the worst of the FOMO rush is tapering somewhat. From what I’ve read by experts, there’s no anticipation of prices going backwards but we’ll likely see the values increase at a more reasonable pace going forward. Long story short, you can still buy as long as you don’t do something silly and still expect appreciation going forward, even in this market.
I’m moving from Oklahoma City and shopping for a place in Westwood, LA. The sticker shock for renting an apartment out there compared to owning a large house in the midwest - it’s borderline depressing. I figure I’ll just rent my place in OKC, the returns on selling it wouldn’t make a dent in trying to own a place in LA.
Which is why I’m planning to move from the SF Bay Area to Austin early next year. I’m tired of renting. I want a house, and there’s no way I can get that in California.
Our house in a small town 45 miles North of Seattle has gone up from 525K to 830K in 4 years. I told my wife that we can sell the house after the kid is out of school (owe 400K still) and use that money to buy a house in full in so many other places…warm places too like New Mexico or AZ…then I can fully retire and not have to worry about a house payment so I can actually retire! Nope she said, she moved from Croatia to the US and hates moving and does not want to move again. So, I might be working till I die! Damn home prices.