Home buying thread

Tuco · Aug 25, 2023

Mist said:
There's just not enough houses, period. "Inflation" is a catch-all term. If you want the price of something to come down in any natural way, the only way to do so is to produce more of it.

These interest rates are only high by comparison to recent times. Historically, they're actually low-mid.

View attachment 487888

OU Ariakas said:
This is true, but they need to be 10 million STARTER homes (2/3 bed 1/2 bath) and they need to be in cities of populations less than 1 million people.

Big Phoenix said:
1985
Median income $23500
Median home price $84300
Interest rate 12.43%

2023
Median income $56600
Median home price $416000
Interest rate 7%+

Yeah the 1980s where a lot more affordable.

Lightning Lord Rule said:
Except you can't.

There are myriad political reasons why, logistical reasons why, and time reasons why you can't just magic 10 million more houses into existence. And to think there's anything 'natural' about the US housing market, or any market in the US for that matter, is nonsense.

If we're talking about things that would be nice but can't happen, I have a huge list to add here. But this is the investing thread, so let's try not to start that derail.

Furry said:
WuT?

This is like saying the sky is blue, because there rocks in my yard. How does one relate to the other though?

Blazin said:
Renovation industry picks up a lot of the slack when people are not moving. Does this really need to be explained. New home sales are up...

split from investing general discussion thread.

As a layman on the topic and someone who lives in an area not likely impacted, I'd be 100% for a federal program to build housing if it moved people out of cities and areas with housing issues. For a lot of market sectors the advent of low-latency, high-bandwidth broadband in rural areas via Starlink makes this a ton more feasible. All these white collar workers crammed into city-shitholes is making less and less sense and the federal govt getting ahead of that with a bill that used the idle hands of the DoD to build housing would be great. Again, I'm an ignorant layman on the topic.

I'd also half-seriously be OK with a program that moved the homeless into what would amount to widely distributed labor camps in Montana.

Furry · Aug 25, 2023

Tuco said:
split from investing general discussion thread.

As a layman on the topic and someone who lives in an area not likely impacted, I'd be 100% for a federal program to build housing if it moved people out of cities and areas with housing issues. For a lot of market sectors the advent of low-latency, high-bandwidth broadband in rural areas via Starlink makes this a ton more feasible. All these white collar workers crammed into city-shitholes is making less and less sense and the federal govt getting ahead of that with a bill that used the idle hands of the DoD to build housing would be great. Again, I'm an ignorant layman on the topic.

I'd also half-seriously be OK with a program that moved the homeless into what would amount to labor camps in Montana.

There's a federal program to fix that!

Yea okay commie.

Blazin · Aug 25, 2023

Tuco said:
split from investing general discussion thread.

As a layman on the topic and someone who lives in an area not likely impacted, I'd be 100% for a federal program to build housing if it moved people out of cities and areas with housing issues. For a lot of market sectors the advent of low-latency, high-bandwidth broadband in rural areas via Starlink makes this a ton more feasible. All these white collar workers crammed into city-shitholes is making less and less sense and the federal govt getting ahead of that with a bill that used the idle hands of the DoD to build housing would be great. Again, I'm an ignorant layman on the topic.

I'd also half-seriously be OK with a program that moved the homeless into what would amount to widely distributed labor camps in Montana.

Federal program sounds awful, affordable housing is a dynamic of archaic building conventions and draconian bureaucracy in land development. I have talked about this before but housing needs a complete shake up in both our conceptions of space and how we go about doing it.

As far as development costs they are outrageous and while I do agree with the need for considerations for things like "storm water management" we are being grossly inefficient applying it. Building my home I had to spend nearly $70k just on water mgmt. There are significant engineering costs that are not really adding value to the process. I spent nearly $30k on engineering and fees. How in the world are we suppose to build a house for $200k that people can afford with these kind of inputs. THe math of $800k+ homes works and those homes are being built for those that can afford them but we have tens of millions of people who need housing at much lower levels. There is no way to get there at this point without some radical thinking.

I don't think I have it in me to want to start a new company but this is one topic that has gnawed at me wanting to try to do something, but it would probably be an insane battle trying to gain traction. I am seeing in local govt though, a building desire to find solutions as the problem becomes more evident to the slow.

THere is so much technology that we have now, today, that is not being applied to this problem. Just building rural wont help that we need too much infrastructure when people are spread out. We must apply deflationary forces against this problem or the conditions in our cities and dense suburbs are going to really start to deteriorate worse than what we are already seeing.

Flobee · Aug 25, 2023

Blazin said:
THere is so much technology that we have now, today, that is not being applied to this problem. Just building rural wont help that we need too much infrastructure when people are spread out. We must apply deflationary forces against this problem or the conditions in our cities and dense suburbs are going to really start to deteriorate worse than what we are already seeing.

Fleeing to the country (I did this) is a temporary reprieve. There is no escaping the issue of the bulk of the population living in areas with aging and failing infrastructure. Rural will eventually be priced out or swamped with refugees. It is one of a slew of impending issues with no clear solution in sight. Maybe you're not the guy to start that business, but there is a real need looming, thats undeniable.

I tell my wife all the time that we didn't create these problems but we're stuck with fixing them, for ourselves first, but ideally for others as we gain competence. I never really wanted to be a 'farmer' but here we are, due to (quality) food security concerns I have. I suspect this trend across the board only accelerates for the foreseeable future. We're just not at the point where a way out is visible. Fourth turning vibes.

Blazin · Aug 25, 2023

Flobee said:
Fleeing to the country (I did this) is a temporary reprieve. There is no escaping the issue of the bulk of the population living in areas with aging and failing infrastructure. Rural will eventually be priced out or swamped with refugees. It is one of a slew of impending issues with no clear solution in sight. Maybe you're not the guy to start that business, but there is a real need looming, thats undeniable.

I tell my wife all the time that we didn't create these problems but we're stuck with fixing them, for ourselves first, but ideally for others as we gain competence. I never really wanted to be a 'farmer' but here we are, due to (quality) food security concerns I have. I suspect this trend across the board only accelerates for the foreseeable future. We're just not at the point where a way out is visible. Fourth turning vibes.

Same as me, I feel like a hypocrite but the solution can't be people doing what I did or it sounds like you are doing. THe people who can afford it can. I moved out to farm country and I'm now surrounded by quite wealthy neighbors. People with means can do it but it's not a solution for the masses. For our generation and older the solution may seem untenable, living with conditions we would not tolerate but a younger generation may be more accepting of different dynamics stuff that would make us shutter. More "shared ownership" of certain hard assets is needed to spread out costs like storm water management. That means homes closer together, less privacy but finding efficiencies that old models precluded.

Sanrith Descartes · Aug 25, 2023

Blazin said:
Same as me, I feel like a hypocrite but the solution can't be people doing what I did or it sounds like you are doing. THe people who can afford it can. I moved out to farm country and I'm now surrounded by quite wealthy neighbors. People with means can do it but it's not a solution for the masses. For our generation and older the solution may seem untenable, living with conditions we would not tolerate but a younger generation may be more accepting of different dynamics stuff that would make us shutter. More "shared ownership" of certain hard assets is needed to spread out costs like storm water management. That means homes closer together, less privacy but finding efficiencies that old models precluded.

One benefit I have already found to being out in the country now is my mail delivery and garbage collection aren't union/govt employees. We are too rural for that. We get small businesses doing it.

Blazin · Aug 25, 2023

Sanrith Descartes said:
One benefit I have already found to being out in the country now is my mail delivery and garbage collection aren't union/govt employees. We are too rural for that. We get small businesses doing it.

Mail for me is still USPS, yours is private? Garbage is private company

Sanrith Descartes · Aug 25, 2023

Blazin said:
Mail for me is still USPS, yours is private? Garbage is private company

Yep. USPS hires bidders to deliver our mail.

Blazin · Aug 25, 2023

Side tangent on garbage, we put out one can every other week and to be honest we could probably stretch it further with even an ounce of effort. I have neighbors on the street with overflowing multiple cans a week I'm legit confused on what even it is they are throwing away every week.

Flobee · Aug 25, 2023

Blazin said:
Side tangent on garbage, we put out one can every other week and to be honest we could probably stretch it further with even an ounce of effort. I have neighbors on the street with overflowing multiple cans a week I'm legit confused on what even it is they are throwing away every week.

Between compost and the burn barrel we don't even need trash service. Just take a grocery bag or two everyone once in a while to the gas station filled with cans/glass etc. They don't really do recycling around here.

Captain Suave · Aug 25, 2023

Blazin said:
Side tangent on garbage, we put out one can every other week and to be honest we could probably stretch it further with even an ounce of effort. I have neighbors on the street with overflowing multiple cans a week I'm legit confused on what even it is they are throwing away every week.

I see lots of people like this and get a peek in their overflowing bins when I walk the dogs. A surprising percentage of people appear to be unwilling to wash dishes and thus eat on disposable plates 7 days a week (and that's if they cook at all and aren't just eating pre-packaged meals). And everything they drink comes in a bottle or can. It's baffling, and explains a lot about our collective state of health.

lurkingdirk · Aug 25, 2023

Yeah, between recycling and composting we have very little trash. I do have a service, though. They're awesome. Usually we have one small can that's about a quarter full each week, but when I'm doing construction projects I've put out as many as 7 over-filled cans with construction debris and they take them all, no questions asked.

But I know people who always put their grass clippings and leaves and all that out for trash. Our grass clippings get mixed into the manure pile, as our leaves do. We have a four year cycle for the manure/leaf/grass piles. Get it all mixed up, then it sits for three years more. Makes for excellent compost and keeps the gardens happy.

Lanx · Aug 25, 2023

Blazin said:
Side tangent on garbage, we put out one can every other week and to be honest we could probably stretch it further with even an ounce of effort. I have neighbors on the street with overflowing multiple cans a week I'm legit confused on what even it is they are throwing away every week.

i see a lot of "drinks"/cans in the trash can on overflow, you can see the shape outline.

actually i just "orderded" a recycling it's 48bucks and not city provided, but they will pick up whatever recycles on route.

obviously i don't give a shit about the environment, i just cannot handle the amount of amazon boxes no more

Daidraco · Aug 25, 2023

Blazin said:
Federal program sounds awful, affordable housing is a dynamic of archaic building conventions and draconian bureaucracy in land development. I have talked about this before but housing needs a complete shake up in both our conceptions of space and how we go about doing it.

As far as development costs they are outrageous and while I do agree with the need for considerations for things like "storm water management" we are being grossly inefficient applying it. Building my home I had to spend nearly $70k just on water mgmt. There are significant engineering costs that are not really adding value to the process. I spent nearly $30k on engineering and fees. How in the world are we suppose to build a house for $200k that people can afford with these kind of inputs. THe math of $800k+ homes works and those homes are being built for those that can afford them but we have tens of millions of people who need housing at much lower levels. There is no way to get there at this point without some radical thinking.

I don't think I have it in me to want to start a new company but this is one topic that has gnawed at me wanting to try to do something, but it would probably be an insane battle trying to gain traction. I am seeing in local govt though, a building desire to find solutions as the problem becomes more evident to the slow.

THere is so much technology that we have now, today, that is not being applied to this problem. Just building rural wont help that we need too much infrastructure when people are spread out. We must apply deflationary forces against this problem or the conditions in our cities and dense suburbs are going to really start to deteriorate worse than what we are already seeing.

When you say water management, what exactly are you referring to? Drainage of the land? Well systems? All of that together, whether city water or well system - I cant imagine it costs anywhere near 70,000. Engineers? For what? To tell you that the gradient is sloping away from the house? ... Ive got more than enough experience in all of this stuff and I just cant make any sense of those prices. Is this in CA or something?

OU Ariakas · Aug 25, 2023

I for one am ok with rates staying where they are for 8 months since we are flush with cash and it is harder for investors to flip right now. This means deals on the types of properties that we look to buy and rent out long term. We are looking a lot of 4 ~800 sq ft houses that aren't on the market yet and we might be able to scoop up for around 77k/house. That is about 15-35% less than market value all because they are only viable for long term holds. If my wife will let me I bet we try for 9 total this year and just ride them at break even until rates come down to 5% or less and we refi.

ToeMissile · Aug 26, 2023

Flobee said:
Fleeing to the country (I did this) is a temporary reprieve. There is no escaping the issue of the bulk of the population living in areas with aging and failing infrastructure. Rural will eventually be priced out or swamped with refugees. It is one of a slew of impending issues with no clear solution in sight. Maybe you're not the guy to start that business, but there is a real need looming, thats undeniable.

I tell my wife all the time that we didn't create these problems but we're stuck with fixing them, for ourselves first, but ideally for others as we gain competence. I never really wanted to be a 'farmer' but here we are, due to (quality) food security concerns I have. I suspect this trend across the board only accelerates for the foreseeable future. We're just not at the point where a way out is visible. Fourth turning vibes.

This made me think of that Netflix documentary that came out recently, Poisoned: The Dirty Truth About Your Food. There was an combined interview w/ a high ranking USDA and FDA official where among other things there was talk about their responsibilities/domains of control. Even if you give them the benefit of the doubt with regard to intention/corruption, it's pretty obvious that the food system in the US is fucked like pretty much any other organization of its size and age. And that drew the parallel of legacy auto OEM's vs Tesla in how they manage/engineer/design holistically

Blazin · Aug 26, 2023

Daidraco said:
When you say water management, what exactly are you referring to? Drainage of the land? Well systems? All of that together, whether city water or well system - I cant imagine it costs anywhere near 70,000. Engineers? For what? To tell you that the gradient is sloping away from the house? ... Ive got more than enough experience in all of this stuff and I just cant make any sense of those prices. Is this in CA or something?

I'm in PA. EPA requires all run off to be captured from all disturbed areas, not just the impervious. I have two massive pits underground that are filled with stone and water is then piped there to seep into the soil over time. The drains capture all water from roofs and paving, then I have grading that captures the water flowing over the ground. I live in PA the state is irrelevant the only thing that matters is if you live somewhere in the country where regulations are simply ignored because local govt lacks the will or resources for enforcement. I'm actually stating the low end of the costs, don't forget about having to pay for bog turtle studies .

Engineering I'm also stating the low end I used connections to get it done a lot cheaper than anyone around me, and I also did all leg work and approval meetings representing myself rather than pay for the engineer to go for me. You say you're familiar but it doesn't sound like you are. You have to submit preliminary plans to a planning commission once you have their approval which takes months it goes to the board of commissioners. While that process is happening you have to be submitting to your local Conservation District because the BoC won't sign off until you have the CD approval. The CD is usually "local" but these are the people who are getting their authority and direction from the EPA. You don't deal with federal people unless you're in deep trouble. You also have to get County approval but they will normally wave their review right to the township/municipality depending on what the scope of the project is.

I'm not going to type the 50 paragraphs to outline the process in detail. Sometimes its that people buy property where this work is already done so they aren't familiar with what it took to get to that point, they just go get their building permit and get to work.

What is your experience with land development, how much do you think engineering on a home would be? Who is putting full sets of plans together for chump change? In a large neighborhood these expenses are probably in $500k range which gets spread out over the building lots, in that some water management pits can be for the entire developments impervious surfaces, some land is cheaper to build on than others maybe there is no creek anywhere near by etc. but in most communities the "best" ie easiest land to develop is already developed.

I wasn't speaking of wells but what do you think a well costs? There is no guarantee, it costs about $7-10k per attempt at a well. My neighbor took 4 tries. I don't live somewhere with high cost of living either we are quite affordable in this area, its not the 1990s anymore, costs have become astronomical. I have been buying real estate for over 20 years and the cost are many magnitudes higher than it use to be.

Blazin · Aug 26, 2023

Just on the topic of costs I really do think people just don't get how quickly the bill climbs. Love when I hear people thinking they can throw a few grand at a scope of work like it's even in the ballpark of realistic. Staying on wells, the steel casing alone is $29/ft, just start doing the math on this shit. I have heard people talking about doing a well for a few thousand dollars, and these are always people talking of a distant past, my water treatment alone which is nothing extravagant was $4k.

Excavation package alone was over $100k , and again I'm paying low numbers. I had bids for excavating pushing $150-200k. It's hard to swallow especially because most rural people have a lived experience of "shit man I built my simple 1600sq ft rancher for $120,000 all in 25 years ago". It's literally everything...FJB you use to be able to buy a decent used skid steer for 15k now people asking $40k for a machine with 3000 hours on it.

Sanrith Descartes · Aug 26, 2023

It's funny how we somehow managed to build houses and get along just fine for hundreds of years without all the gubmint regulations.

TJT · Aug 26, 2023

Blazin said:
I'm in PA. EPA requires all run off to be captured from all disturbed areas, not just the impervious. I have two massive pits underground that are filled with stone and water is then piped there to seep into the soil over time. The drains capture all water from roofs and paving, then I have grading that captures the water flowing over the ground. I live in PA the state is irrelevant the only thing that matters is if you live somewhere in the country where regulations are simply ignored because local govt lacks the will or resources for enforcement. I'm actually stating the low end of the costs, don't forget about having to pay for bog turtle studies .

Engineering I'm also stating the low end I used connections to get it done a lot cheaper than anyone around me, and I also did all leg work and approval meetings representing myself rather than pay for the engineer to go for me. You say you're familiar but it doesn't sound like you are. You have to submit preliminary plans to a planning commission once you have their approval which takes months it goes to the board of commissioners. While that process is happening you have to be submitting to your local Conservation District because the BoC won't sign off until you have the CD approval. The CD is usually "local" but these are the people who are getting their authority and direction from the EPA. You don't deal with federal people unless you're in deep trouble. You also have to get County approval but they will normally wave their review right to the township/municipality depending on what the scope of the project is.

I'm not going to type the 50 paragraphs to outline the process in detail. Sometimes its that people buy property where this work is already done so they aren't familiar with what it took to get to that point, they just go get their building permit and get to work.

What is your experience with land development, how much do you think engineering on a home would be? Who is putting full sets of plans together for chump change? In a large neighborhood these expenses are probably in $500k range which gets spread out over the building lots, in that some water management pits can be for the entire developments impervious surfaces, some land is cheaper to build on than others maybe there is no creek anywhere near by etc. but in most communities the "best" ie easiest land to develop is already developed.

I wasn't speaking of wells but what do you think a well costs? There is no guarantee, it costs about $7-10k per attempt at a well. My neighbor took 4 tries. I don't live somewhere with high cost of living either we are quite affordable in this area, its not the 1990s anymore, costs have become astronomical. I have been buying real estate for over 20 years and the cost are many magnitudes higher than it use to be.

This is really depressing fam.

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