Home buying thread

Fucker

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Onoes said:
I don't understand the market at all right now.

A high school friend found out she had a brain tumor a year ago. She's dating a guy in Phoenix who told her to come move in with him to get medical treatments and such. She had to leave her pets behind(he couldn't have them at his place), but has had another friend feeding and watering them this whole time. She has dog doors, so the cats and dogs just come and go as they please. A few weeks ago she got moved to hospice and they said she didn't have much time left. The boyfriend posted on her facebook asking if her friends could go to her house - fill up a tote or two with anything her daughter might want (pictures etc) and just donate everything else to charity. HE also said if we wanted anything, just take it, and if we want to donate some cash for anything we take, they would appreciate it. They had found a rescue place for the animals, and wanted to sell her house asap to leave her daughter with something.

Me, trying to be a good guy, go to the house... which is a super run down trailer. Door hanging off the doorframe, weeds up to your waist, and big patches of siding just gone. The town we live in only has a couple area's that are absolute shitholes, and this is one of them. We go inside and the place is fucking 1,000 times worse than I could have imagined.

I thought I was going to help load furniture up to take to Goodwill, not a chance. Apparently, when you leave food and water in an abandoned house with a doggy door for a year, other animals make it their home too. The whole place reeked of piss and shit, and most everything was just fucking ruined. It took around 10 of us two days to take something like 30+ pickup loads of shit to dump, and maybe 6 or so salvageable loads to Goodwill. Some of the ladies said they were going to go back the next weekend to try and clean it, but holy shit I can't imagine that did much good. We left an empty shell of a trailer, vile but empty.

They listed the place this morning for $90,000 which sounded like a fucking pie in the sky idea to me. I'm going "MAYBE like 40k for the land, but this whole place just needs to be dragged off and destroyed. Man, even then, WHO would want to live next to these crack houses? No way she gets $90k for this disaster."

She got a cash offer of $130,000 within 2 hours. House is now Pending sale. What the actual fuck.
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It wasn't that long ago when starter homes were $70-$75k. Prefabs were $50k. I don't know how much mobile homes were, but I'd imagine no more than $15k. Now, starter homes are $350k+, Prefabs are $200k+, and mobile homes are $110k+. Not very aspirational.
 
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Lambourne

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People have been talking about a new bubble forming in the US housing market for years now. Affordability has been lower than it was in 07-08 for a while already. I think the expectation is that if Trump gets his wish and the fed cuts rates it's going to blow up prices even more.


1753257039401.png


Another warning sign is that house prices in the US have increased a lot more than they have in Europe. Again just like in the last bubble.

1753256554315.png


Bunch more of those graphs here. Pretty much every metric is pointing towards a bubble worse than 07-08

realestatedecoded.com

15 Interactive Case-Shiller Home Price Charts for 20 Metros & USA

Case-Shiller house price index 2020. Includes inflation-adjusted prices for New York, Los Angeles, Chicago, Miami, Boston, Phoenix, San Francisco & 13 more.
realestatedecoded.com realestatedecoded.com
 
Onoes

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My first house was built in 2006, sold in 2007 for $311,000 and foreclosed a few months later. I bought it in 2008 from the bank for $118,000 which was kind of a steal (3 bedroom, 2 car, 1600sqft). We lived in it for 12 years, and sold it in 2020 for $167,000. I just checked Zillow and it estimates its worth $297,000 right now.

So in the 12 years I lived there the value went up $40,000
In the last 5 it's gone up another $130,000?

Yeah, something's not working right.
 
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Pharazon2

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Not complicated - its the covid money + work from home. One way or another, those trillions make their way into the US housing market. Suburban and rural prices have likely appreciated the most due to work from home flexibility. Then end.
 
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Big Phoenix

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Lambourne said:
People have been talking about a new bubble forming in the US housing market for years now. Affordability has been lower than it was in 07-08 for a while already. I think the expectation is that if Trump gets his wish and the fed cuts rates it's going to blow up prices even more.


View attachment 595242

Another warning sign is that house prices in the US have increased a lot more than they have in Europe. Again just like in the last bubble.

View attachment 595241

Bunch more of those graphs here. Pretty much every metric is pointing towards a bubble worse than 07-08

realestatedecoded.com

15 Interactive Case-Shiller Home Price Charts for 20 Metros & USA

Case-Shiller house price index 2020. Includes inflation-adjusted prices for New York, Los Angeles, Chicago, Miami, Boston, Phoenix, San Francisco & 13 more.
realestatedecoded.com realestatedecoded.com
Click to expand...
Of course lowering interest rates will add fuel to the dumpster fire of housing.
 
Fucker

Fucker

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Pharazon2 said:
Not complicated - its the covid money + work from home. One way or another, those trillions make their way into the US housing market. Suburban and rural prices have likely appreciated the most due to work from home flexibility. Then end.
Click to expand...
The money supply has increased by 50% since 2019. In overall terms, house prices have risen to match inflation.
 
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tugofpeace

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Hey guys. Looking for some advice.. I'm likely moving back to Chicago and might be moving into the same building I lived in years ago. Saw a property that seems reasonable but I'm not sure if it's worth it from an investment perspective.

$225,000 selling price
$7680/year HOA fee
$4400/year taxes

If I put down 10% along with 5% closing costs, it comes to about $2250/month including parking, at a 6.25% interest rate. I can get $150/month for that parking spot so if I rent it out, effectively my mortgage is $2100/month.

Units in that building typically rent for that much so I may actually be cashflow positive, or be very close to breakeven. It also looks like rents are on the rise in Chicago.

I only plan on living there for a year and then renting it out.

Any thoughts? I'm wondering if I can close on this place within two weeks as I want to move ASAP.

Never bought a home before but I heard something about condo "reserves" and that I need to get a lawyer.




Otherwise, it is much simpler for me to just rent a place for a year and leave.
 
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Mizake

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tugofpeace said:
Hey guys. Looking for some advice.. I'm likely moving back to Chicago and might be moving into the same building I lived in years ago. Saw a property that seems reasonable but I'm not sure if it's worth it from an investment perspective.

$225,000 selling price
$7680/year HOA fee
$4400/year taxes

If I put down 10% along with 5% closing costs, it comes to about $2250/month including parking, at a 6.25% interest rate. I can get $150/month for that parking spot so if I rent it out, effectively my mortgage is $2100/month.

Units in that building typically rent for that much so I may actually be cashflow positive, or be very close to breakeven. It also looks like rents are on the rise in Chicago.

I only plan on living there for a year and then renting it out.

Any thoughts? I'm wondering if I can close on this place within two weeks as I want to move ASAP.

Never bought a home before but I heard something about condo "reserves" and that I need to get a lawyer.




Otherwise, it is much simpler for me to just rent a place for a year and leave.
Click to expand...

Personally, I would not buy that property. I can’t believe the HOA is that high relative to the price of the property. While your mortgage may be fixed, your HOA and property taxes will not, and will likely go up over the years.

I don’t know much about the Chicago market first hand, but I do try and invest in properties across the country, and I think Chicago is a depressed market without much upside, of course I could be mistaken and you have first hand knowledge, but I’ve visited Chicago for over a decade now and I haven’t seen much appreciation in property values, especially in comparison to other cities.

The other thing is you are only planning on living it in for a year. So this is truly an investment play. In which case…..is that the best use of your money? You would only be making a small return at best. Not to mention the head ache of managing properties, which, if you don’t do yourself, will cost you about 6-8% of your rental income, at best, and if you are going to manage it yourself, will tie you down to the area.

I still can’t get over that HOA fee, that is whack for a property of that value.

My advice would be to rent and research the market for a better play.
 
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tugofpeace

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Mizake said:
Personally, I would not buy that property. I can’t believe the HOA is that high relative to the price of the property. While your mortgage may be fixed, your HOA and property taxes will not, and will likely go up over the years.

I don’t know much about the Chicago market first hand, but I do try and invest in properties across the country, and I think Chicago is a depressed market without much upside, of course I could be mistaken and you have first hand knowledge, but I’ve visited Chicago for over a decade now and I haven’t seen much appreciation in property values, especially in comparison to other cities.

The other thing is you are only planning on living it in for a year. So this is truly an investment play. In which case…..is that the best use of your money? You would only be making a small return at best. Not to mention the head ache of managing properties, which, if you don’t do yourself, will cost you about 6-8% of your rental income, at best, and if you are going to manage it yourself, will tie you down to the area.

I still can’t get over that HOA fee, that is whack for a property of that value.

My advice would be to rent and research the market for a better play.
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Very helpful. Thanks.

It is a condo building and generally speaking any condo building in the city will have a similar HOA.

I'm finding that it is somehow the same price to own such a unit as it is to rent, which is why I thought of buying it.
 
Mizake

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tugofpeace said:
Very helpful. Thanks.

It is a condo building and generally speaking any condo building in the city will have a similar HOA.

I'm finding that it is somehow the same price to own such a unit as it is to rent, which is why I thought of buying it.
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Understood, and often times people say it’s better to rent than to buy. However, home ownership comes with a LOT of hidden costs, such as maintenance and repairs. Generally speaking, it’s better to own than rent, but only if you plan on living in the property for a long time, allowing you to build equity while owning and living under your roof.

In your instance, you would move out in a year, and the have to look for another place to live. Where are you going to live in a year? You are going to have to rent a place, because now your income/debt ratio is lowered because you have a loan out on your rental property. This will affect your ability to purchase your next home in case you find your “forever” home, because a chances are you won’t qualify for another mortgage. The fact your are only putting down 10% instead of the traditional 20% signals to me that you are already at your financial limit with the mortgage for this condo, and therefore highly unlikely to qualify for any additional secondary home loan unless your income increases substantially.

I would advise that when purchasing your first home, make it one you plan on living in for a good long while. Consider that your fortress of solitude and base of operations to conduct your future investments from.
 
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Gravel

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The rent vs buy prospect looks a lot worse with 6% interest rates.

Take your Chicago down payment and put it into equities, make 10%, and call it a day.
 
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Daidraco

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Gravel said:
The rent vs buy prospect looks a lot worse with 6% interest rates.

Take your Chicago down payment and put it into equities, make 10%, and call it a day.
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Local credit unions will usually "beat" your current rate just to secure the loan. For example, my latest property is at 3.97%. Thats not "insane" by any means, but thats a ~$500/month difference on a $400k loan.

You also have a DSCR loan available if you're already planning on renting it out and dont have a lot of down payment available to you. Which you can convert to a traditional mortgage loan after a short time frame for a lower interest rate. Wait an additional 3 months and refinance that loan with the previously mentioned credit unions.

Until next time, kids!

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See Ya Do Not Want GIF by reactionseditor
 
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Intrinsic

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Oh my God looking for a new house is depressing. We're still probably (hopefully) 18 months from moving but spend yesterday driving around to a few open houses and holy shit I want to kill myself. We looked at this $950k 4,400 sq ft new construction, and it was just the most sterile and soulless thing. Sure, it is open and has nice finishing touches and we could repaint walls to be colorful, but just walking in didn't feel anything like a home.

For example, this is back in an area close to us we were driving around. This is the top top of our price range but there's just no way I could consider spending that much money for this.

We went to a different neighborhood still close to us that had a 10-15 year old house for $600k, was well lived in and some some character. The main issue there is it felt so lateral to what we're already in that going from $450k > $600k home we basically gain nothing for $150k.


We've got a lot to figure out in 2 years. It almost makes me want to just remodel where we are and make this work until the kids are in high school or something and we can really move far outside town.
 
Falstaff

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I know social media is the dregs of society and people only post the worst but after having home inspectors for new construction in my Instagram algorithm I would never want to buy a new construction house... granted nothing is perfect but some of the shit is so egregious.
 
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Sanrith Descartes

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Falstaff said:
I know social media is the dregs of society and people only post the worst but after having home inspectors for new construction in my Instagram algorithm I would never want to buy a new construction house... granted nothing is perfect but some of the shit is so egregious.
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its all the shit Mexican contractors. A day doesn't go by where I don't find some petty shit they fucked up in my 2-year old house. Its like they did the important stuff correctly (the stuff the County inspectors look at) but the minor stuff is all worthless. Example: toilet paper rollers would never stay secured. Open them up and they only put in 1 screw in the baseplate even though the baseplate has two holes for two screws to secure it and stop it from moving.
 
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TJT

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Intrinsic said:
Oh my God looking for a new house is depressing. We're still probably (hopefully) 18 months from moving but spend yesterday driving around to a few open houses and holy shit I want to kill myself. We looked at this $950k 4,400 sq ft new construction, and it was just the most sterile and soulless thing. Sure, it is open and has nice finishing touches and we could repaint walls to be colorful, but just walking in didn't feel anything like a home.

For example, this is back in an area close to us we were driving around. This is the top top of our price range but there's just no way I could consider spending that much money for this.

We went to a different neighborhood still close to us that had a 10-15 year old house for $600k, was well lived in and some some character. The main issue there is it felt so lateral to what we're already in that going from $450k > $600k home we basically gain nothing for $150k.


We've got a lot to figure out in 2 years. It almost makes me want to just remodel where we are and make this work until the kids are in high school or something and we can really move far outside town.
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That's a lot of house. Do you need smth this big?

I am looking at getting a house in Laramie, WY in the next year or so. It has nice things for sale so I am not much concerned about it for the time being. Just waiting for the right time when I have enough cash on hand. Which will likely be next year.
 
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Intrinsic

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TJT said:
That's a lot of house. Do you need smth this big?

I am looking at getting a house in Laramie, WY in the next year or so. It has nice things for sale so I am not much concerned about it for the time being. Just waiting for the right time when I have enough cash on hand. Which will likely be next year.
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No, I definitely wouldn't argue that "need" is the right word. We did need to see that to know we don't want it though, so it was an important step in the process. We have (will have in Oct) three boys and we're both full time WFH so we're falling into the trap of wanting 3 rooms for the kids, a master bedroom, and 2 office spaces for us, and that drives the space need a little unreasonably high. Our current house is like 2,800 listed sq ft but more realistically 3,300 with the bonus areas.

We need to find our sweet spot. The two young boys can share a room just like I did with my brother growing up. I could downsize my office into the old nursery, turn this above garage space into bedroom for two of the boys since they're 2 years apart. Upgrade our Master Bath and Kitchen. We'd survive for 10 more years her. And just because we could afford it doesn't mean we should. I'd much rather continue juicing our Roths, SEPs, HSA, kids accounts, and spending frivolously on guns.
 
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Fucker

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Intrinsic said:
No, I definitely wouldn't argue that "need" is the right word. We did need to see that to know we don't want it though, so it was an important step in the process. We have (will have in Oct) three boys and we're both full time WFH so we're falling into the trap of wanting 3 rooms for the kids, a master bedroom, and 2 office spaces for us, and that drives the space need a little unreasonably high. Our current house is like 2,800 listed sq ft but more realistically 3,300 with the bonus areas.

We need to find our sweet spot. The two young boys can share a room just like I did with my brother growing up. I could downsize my office into the old nursery, turn this above garage space into bedroom for two of the boys since they're 2 years apart. Upgrade our Master Bath and Kitchen. We'd survive for 10 more years her. And just because we could afford it doesn't mean we should. I'd much rather continue juicing our Roths, SEPs, HSA, kids accounts, and spending frivolously on guns.
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I figure 1000 sq ft per person to be comfortable. 4400 is fine esp WFH x 2.
 
Sanrith Descartes

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Fucker said:
I figure 1000 sq ft per person to be comfortable. 4400 is fine esp WFH x 2.
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I would add on to this that the amount of yard can lower the sq ft per person. Ours is only 2200 sq ft but have an 1/2 acre back yard and we are outdoor people so the interior feels fine for us because of how much time we spend out back. Pool area, decks, lanai etc get a ton of use.
 
Intrinsic

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Sanrith Descartes said:
I would add on to this that the amount of yard can lower the sq ft per person. Ours is only 2200 sq ft but have an 1/2 acre back yard and we are outdoor people so the interior feels fine for us because of how much time we spend out back. Pool area, decks, lanai etc get a ton of use.
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Yeah, that was the other depressing thing about everything we saw. The McMansions come on like .2 acre lots. We play outside in the back as much as we can and there's virtually no room for them in these houses.
 
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