How much house do you need?

[JJ 911SC]

Originally Posted by dscabra

View of Pikes Peak...

Location, Location, Location...

[E92inNC]

I’m looking to move to the east coast in a few years, so far it’s looking like northern FL or mid NC. Even with this crazy housing market a 1000-1200 sq ft 2bd/2br 2 car garage for just me is around 175-250k depending on location, much cheaper than here in Phoenix. Plus most of the homes I’ve looked at is on good sized lots.

[Maestro]

The wife and I are in the same situation. Almost have last kid off the payroll and decided the current house has more rooms we do not want to deal with anymore. The house is not too big 2700 SqFt main living space with another 1000 SqFt finished basement which has our theater room and work out space. We only have 2 car garage which is half filled with car stuff.

We bought 7.5 acres and plan to build the retirement home which will be about 2000 SqFt main living space with first floor master. We will have 2nd floor with 2 more bedrooms and bonus room for when the kids come and visit. The most important part I'm adding 5 car garage. The architect has challenge has to make it look like it's not this massive garage which happens to have house attached.

[3.0L]

I agree, location is a top priority. After that, whatever floats your boat.

[Bruuuce]

Ill play

3 car garage and entry and storage on the main floor. Plenty of parking space for the truck and trailer in from of the house. There use to be a 4th garage door, but that was converted into a more formal entry. Then two floors on top of that, like a warehouse, which is what I call it. One floor open concept with one guest bedroom, then three more on top of that. Each floor around 2k feet.

Just me and a bunch of cars, more home than needed, but gotta have car and jeep space. I will say, makes working form home nice, just close that door when the day is done.

[JP10]

Didn't feel like starting a new thread in regards to the topic, but along the same lines, do you feel like the housing market will drop soon? Obviously I'm not looking for a specific date and expect some smart ass responses here haha, more so just an opinion of the overall market. I feel as if inflation is just through the roof right now. Supply chain throughout the country is hurting. At what point is the market going to take the brunt of the damage?

Just tied the knot a little over a month ago, and we are coming up on renewing our lease (about 3 months out). I really would like to buy as house prices just continue to rise, especially in this area where people seem to continue to be flooding in. Come October will be 2 years in this home and I am tired of renting.

I had a separate question for those that have rental properties; what would it take for a tenant to buy you out of the property? The wife and I have unfortunately been great tenants over the last 1.75yrs, I believe we only had one issue since we moved in (by issue I mean problem that we could not fix on our own - electrical water heater), and have even made minor improvements on our own dime because the other half is quite picky. With that said, we love the area, and have even become really good friends with our neighbors across the street. Ideally we would like to stay in the current home although eventually we would like a larger place (it is 3bd 2.5bath roughly 1900sqft). Also, just as we are currently doing, it could make a great rental property when we decide to add to our troops. So does anyone think the owners would be susceptible to release the home - is it even worth my time to ask?

[Joekerr]

Originally Posted by JP10

Didn't feel like starting a new thread in regards to the topic, but along the same lines, do you feel like the housing market will drop soon? Obviously I'm not looking for a specific date and expect some smart ass responses here haha, more so just an opinion of the overall market. I feel as if inflation is just through the roof right now. Supply chain throughout the country is hurting. At what point is the market going to take the brunt of the damage?

Just tied the knot a little over a month ago, and we are coming up on renewing our lease (about 3 months out). I really would like to buy as house prices just continue to rise, especially in this area where people seem to continue to be flooding in. Come October will be 2 years in this home and I am tired of renting.

I had a separate question for those that have rental properties; what would it take for a tenant to buy you out of the property? The wife and I have unfortunately been great tenants over the last 1.75yrs, I believe we only had one issue since we moved in (by issue I mean problem that we could not fix on our own - electrical water heater), and have even made minor improvements on our own dime because the other half is quite picky. With that said, we love the area, and have even become really good friends with our neighbors across the street. Ideally we would like to stay in the current home although eventually we would like a larger place (it is 3bd 2.5bath roughly 1900sqft). Also, just as we are currently doing, it could make a great rental property when we decide to add to our troops. So does anyone think the owners would be susceptible to release the home - is it even worth my time to ask?

Of course it is worth it to ask - what's the downside? They say no - you are still in the same position. Just don't expect it will be cheap - they'll probably put a premium on it knowing you are interested but at least then you know what it would take. There are no deals right now. The market is stupid. And I say that as someone who has benefited greatly at least on paper from the housing market.

[Maestro]

Originally Posted by JP10

Didn't feel like starting a new thread in regards to the topic, but along the same lines, do you feel like the housing market will drop soon? Obviously I'm not looking for a specific date and expect some smart ass responses here haha, more so just an opinion of the overall market. I feel as if inflation is just through the roof right now. Supply chain throughout the country is hurting. At what point is the market going to take the brunt of the damage?

Just tied the knot a little over a month ago, and we are coming up on renewing our lease (about 3 months out). I really would like to buy as house prices just continue to rise, especially in this area where people seem to continue to be flooding in. Come October will be 2 years in this home and I am tired of renting.

I had a separate question for those that have rental properties; what would it take for a tenant to buy you out of the property? The wife and I have unfortunately been great tenants over the last 1.75yrs, I believe we only had one issue since we moved in (by issue I mean problem that we could not fix on our own - electrical water heater), and have even made minor improvements on our own dime because the other half is quite picky. With that said, we love the area, and have even become really good friends with our neighbors across the street. Ideally we would like to stay in the current home although eventually we would like a larger place (it is 3bd 2.5bath roughly 1900sqft). Also, just as we are currently doing, it could make a great rental property when we decide to add to our troops. So does anyone think the owners would be susceptible to release the home - is it even worth my time to ask?

Here is my general understanding with the current market situation. There will not be any near term reduction in the pricing of homes. Right now there is more demand for single family homes than homes which are available. The millennials are finally have kids and realizing they want a home verses rental property to raise a family. Also interest rates are very lower and people are sitting on lots of money. I have been hearing people are putting more than 10% or 20% down payments unlike back in the early 2000's where people were highly leverage on their home purchases. The majority of the people were over paying and leveraging the entire amount of the home.

Since people are putting large down payments, banks do not care as much if people are over paying. Around me, homes are only on the market for 2 days with multiply offers with the winner adding $50K to $100K over asking and many of them are cash deals. Many of the people moving to where we live are people escaping NJ and NY high taxes.

Then add in the fact of all the supply chain issues and lumber pricing through the roof, lower end homes are not being build now. However higher end home are still being built. My neighbor who sells new homes for one of the largest builders in the country said their $800K to $1M homes are now selling for $1.2 to $1.4 due to material costs and people are still paying the price.

My wife and I have held off building our home on land we bought last year because we did not want to add another $300K to the cost of the house due to materials and add another 6 months to the building time due to long lead time on some material.

[e90335e36m3]

Originally Posted by Maestro

Here is my general understanding with the current market situation. There will not be any near term reduction in the pricing of homes. Right now there is more demand for single family homes than homes which are available. The millennials are finally have kids and realizing they want a home verses rental property to raise a family. Also interest rates are very lower and people are sitting on lots of money. I have been hearing people are putting more than 10% or 20% down payments unlike back in the early 2000's where people were highly leverage on their home purchases. The majority of the people were over paying and leveraging the entire amount of the home.

Since people are putting large down payments, banks do not care as much if people are over paying. Around me, homes are only on the market for 2 days with multiply offers with the winner adding $50K to $100K over asking and many of them are cash deals. Many of the people moving to where we live are people escaping NJ and NY high taxes.

Then add in the fact of all the supply chain issues and lumber pricing through the roof, lower end homes are not being build now. However higher end home are still being built. My neighbor who sells new homes for one of the largest builders in the country said their $800K to $1M homes are now selling for $1.2 to $1.4 due to material costs and people are still paying the price.

My wife and I have held off building our home on land we bought last year because we did not want to add another $300K to the cost of the house due to materials and add another 6 months to the building time due to long lead time on some material.

My thing is...if this thesis is generally correct...who are these millennials that have more than 10-20% saved for a down payment? The vast majority of them do not have two cents to rub together, let alone when they are simultaneously having kids. I keep reading all these stories that millennials and other generations have $0 savings and insurmountable credit card debt. Yet, somehow, they are all buying homes at a premium with a significant down payment up front. Something doesn't add up.

[RickFLM4]

Originally Posted by e90335e36m3

My thing is...if this thesis is generally correct...who are these millennials that have more than 10-20% saved for a down payment? The vast majority of them do not have two cents to rub together, let alone when they are simultaneously having kids. I keep reading all these stories that millennials and other generations have $0 savings and insurmountable credit card debt. Yet, somehow, they are all buying homes at a premium with a significant down payment up front. Something doesn't add up.

There are a lot of millennials. Not all are the same financially and past generations have commonly received money from family for down payments. Doubt they are any different in this regard. If motivated, people can find a way.

[Maestro]

Originally Posted by e90335e36m3

My thing is...if this thesis is generally correct...who are these millennials that have more than 10-20% saved for a down payment? The vast majority of them do not have two cents to rub together, let alone when they are simultaneously having kids. I keep reading all these stories that millennials and other generations have $0 savings and insurmountable credit card debt. Yet, somehow, they are all buying homes at a premium with a significant down payment up front. Something doesn't add up.

There is definitely two camps of Millennials, I have seen them both. There are the ones who believe the world owes them everything these are the people who are looking to have all their student loan debt paid off by the rest of us. The other camp are the people who have been out there working hard who got married later and started having their kids in their 30's.

I can not tell you where all the money they have is coming from, as it was pointed out it could be their parents helping them out which would not surprise me. My kids are gen Z, my son could be Gen Z or Millennial depending on where you cut the line, but I could see helping both kids with a down payment, not because they need it, because if I can help now verse giving them the money later when it may not be needed, this make more sense. Both my kids graduated college with a nice investment portfolio, in stead of letting them spend all the money they got growing up I put most of it in the market, when they graduated college the investments were equal to student loan debt they took out. This is how you help your kids.

In the last year in our neighborhood at least 15 homes sold in under a week and 5 in the last month alone. This is more than in the last 10 years, our neighborhood is transitioning from the original owners who are empty nesters to the next set of families. The homes that sold in the last months have young families with one or 2 kids under 5 moving in. I have not spoken to any of them but I am told many of them are coming out of the cities since they are realizing the city may not be the best place to raise their kids especially with all the stuff happening in the schools. The school district we live in is the 3rd largest in the state and the highest ranked in the state for public schools, only very expense private schools rank better.

Any place that has lots to offer families are seeing huge demand for homes.

The other group driving demand is the older people who are trying to escape high taxes, these are people who are now are making a good wage and do not have lots of house expense and kids are gone and see all the taxes are now paying, they are leaving those places and coming to places with lower taxes. We have these people coming to our area as well, but they seem to be the one buying the newer more expense homes.

[CTinline-six]

A raised ranch with 1-2 acres and a garage to work on the cars is really all I need.

My grandparents currently have too much house. They are both 80, both not doing so well health-wise. They own a raised ranch, and a 20 acre piece of land. Most of it is fields, along with a barn and a few sheds, as well as a long u-shaped driveway. It's becoming a lot for them to maintain. I help out where I can, but you can easily spend an entire weekend trying to maintain the property.

I grew up in a small town in the middle of nowhere, and worked on a neighboring farm in high school. I spent hours riding my dirt bike through the woods and along the miles of train tracks in my area. I always dreamed of having 50+ acres of property all to myself. Now I'm not sure I would want that burden. It's one thing to have the peace and quiet, but another when you spend all of your time off mowing grass and fixing stuff.

[2 SLOW]

Originally Posted by e90335e36m3

My thing is...if this thesis is generally correct...who are these millennials that have more than 10-20% saved for a down payment? The vast majority of them do not have two cents to rub together, let alone when they are simultaneously having kids. I keep reading all these stories that millennials and other generations have $0 savings and insurmountable credit card debt. Yet, somehow, they are all buying homes at a premium with a significant down payment up front. Something doesn't add up.

There is a wide range of millennials. Most are doing really well since they are starting to hit some of the bigger earning years. I'm 36 and almost all of our friends are on their 2nd or 3rd house.

[strohw]

The housing market is absolutely going to be interesting in the next few of months. The moratorium on foreclosures was suppose to end tomorrow but was pushed back another month. I know plenty of people working in the court system in various towns around me claiming that there are stacks of foreclosures just waiting to be processed. I can't imagine it being much different in most towns or cities.

[XutvJet]

Originally Posted by JP10

Didn't feel like starting a new thread in regards to the topic, but along the same lines, do you feel like the housing market will drop soon? Obviously I'm not looking for a specific date and expect some smart ass responses here haha, more so just an opinion of the overall market. I feel as if inflation is just through the roof right now. Supply chain throughout the country is hurting. At what point is the market going to take the brunt of the damage?

The housing, lumber, automotive parts, electronics, etc. shortages were caused by COVID. The world locked down and companies reacted (over-reacted in many cases) by shutting things down, laying off people, rental car companies selling fleets, etc. The world came out of the lock-downs quicker than expected and it has caused major supply issues. It will take time to ramp up production, hire/train people, etc.

With respect to housing, the demand initially plummeted early to mid and many homeowners were reluctant to sell for a number of cautious reasons. The inventory went down dramatically and then in late 2020, the demand for homes took off, but sellers simply weren't there. Then factor in all the people renovating their homes, building depts. having limited staff to approve new builds, few contractors available to build homes (because they were busy renovating), etc. etc. and you get the supply issue weren't facing.

My wife and I have been looking for a new home since October 2019 and been actively going through the process since that time. We have seen just how nuts things have become and have decided to wait it out now because we're not interested in paying 20+% over appraised/assessed value. People are being absolutely stupid paying so much for homes (and cars). Think about all that extra property tax you'll be stuck with. Higher insurance costs. Dumb.

We're probably 4 to 6 months from some equilibrium and those the paid so high now and are really going to regret it.

Barring some unexpected X-factor COVID variant that evades immunity and is way more deadly, things will improve slowly. With that said, things could get hairy overseas, especially in China and Asia. Those are huge areas with big populations, much of which didn't get COVID because of extreme lock-downs. COVID is sitting on the other side of the door, waiting patiently. Those countries simply don't have the means to vaccinate and the vaccines they have are largely ineffective. Like with what's going on in Australia and New Zealand, China and other Asia countries will be in perpetual states of lock-down until either they get a good vaccine or they come to terms that you can't control COVID with lock-downs. The constant lock-downs in places like China will have an impact on the production of goods for the next 2 to 3 years. When it comes to COVID, you're damned if you do and you're damned if you don't.

[omega2733]

Originally Posted by Maestro

There is definitely two camps of Millennials, I have seen them both. There are the ones who believe the world owes them everything these are the people who are looking to have all their student loan debt paid off by the rest of us. The other camp are the people who have been out there working hard who got married later and started having their kids in their 30's.

I think when most people think millennial, it's usually ones who are younger. I unfortunately fall in the middle of this generation (kill me), however you are right. There are two camps, lazy ones and ones who are not, most are in the lazy camp.

We're people, not all equal, a lot of millennials are high earners (SW engineers etc., it's what I do). Now that we've been remote for over a year, a lot of people from NY, Silicon Valley, etc. are moving to lower cost of living states with a lot of $$ in tow if they were in a high-earning profession.

[Efthreeoh]

Originally Posted by fgpalmer71

My sentiments exactly. Downsized 2 years ago and it was just my 16 yr old daughter and I. Went from a household of 4 in a 4k sq ft house (basements don't count towards square footage where I'm located....it was more like 5k sq feet). Bought a 2 bed, 3 bath house that's 1200 sq ft with a heated 3 car garage, complete with a full bathroom, with ~ the same 1200 sq feet. I'm happier then ever with my decision! The only thing that's missing is a lift. Unfortunately the garage ceilings aren't tall enough to have one installed and raising the ceiling isn't an option.

If the ceiling is 9 feet Bend Pack has two choices. There are a few more too.

[XutvJet]

Originally Posted by omega2733

Now that we've been remote for over a year, a lot of people from NY, Silicon Valley, etc. are moving to lower cost of living states with a lot of $$ in tow if they were in a high-earning profession.

Companies will soon stop paying high cost of living (COL) salaries for those that work remotely and/or move to areas with lower COLs. I know my company is going to adjust salaries to compensate for this. Many companies are willing to be flexible with remote working, but they aren't going to go for paying high COL salaries in the long term for those that move to cheaper areas.

[JP10]

Originally Posted by XutvJet

The housing, lumber, automotive parts, electronics, etc. shortages were caused by COVID. The world locked down and companies reacted (over-reacted in many cases) by shutting things down, laying off people, rental car companies selling fleets, etc. The world came out of the lock-downs quicker than expected and it has caused major supply issues. It will take time to ramp up production, hire/train people, etc.

With respect to housing, the demand initially plummeted early to mid and many homeowners were reluctant to sell for a number of cautious reasons. The inventory went down dramatically and then in late 2020, the demand for homes took off, but sellers simply weren't there. Then factor in all the people renovating their homes, building depts. having limited staff to approve new builds, few contractors available to build homes (because they were busy renovating), etc. etc. and you get the supply issue weren't facing.

My wife and I have been looking for a new home since October 2019 and been actively going through the process since that time. We have seen just how nuts things have become and have decided to wait it out now because we're not interested in paying 20+% over appraised/assessed value. People are being absolutely stupid paying so much for homes (and cars). Think about all that extra property tax you'll be stuck with. Higher insurance costs. Dumb.

We're probably 4 to 6 months from some equilibrium and those the paid so high now and are really going to regret it.

Barring some unexpected X-factor COVID variant that evades immunity and is way more deadly, things will improve slowly. With that said, things could get hairy overseas, especially in China and Asia. Those are huge areas with big populations, much of which didn't get COVID because of extreme lock-downs. COVID is sitting on the other side of the door, waiting patiently. Those countries simply don't have the means to vaccinate and the vaccines they have are largely ineffective. Like with what's going on in Australia and New Zealand, China and other Asia countries will be in perpetual states of lock-down until either they get a good vaccine or they come to terms that you can't control COVID with lock-downs. The constant lock-downs in places like China will have an impact on the production of goods for the next 2 to 3 years. When it comes to COVID, you're damned if you do and you're damned if you don't.

The bold is my exact concern. I feel the fall is imminent, but at the same token prices keep rising. It's like I'm watching bitcoin back when it was at $16,000 and thought "it can't keep going up".

[RickFLM4]

Originally Posted by XutvJet

The housing, lumber, automotive parts, electronics, etc. shortages were caused by COVID. The world locked down and companies reacted (over-reacted in many cases) by shutting things down, laying off people, rental car companies selling fleets, etc. The world came out of the lock-downs quicker than expected and it has caused major supply issues. It will take time to ramp up production, hire/train people, etc.

With respect to housing, the demand initially plummeted early to mid and many homeowners were reluctant to sell for a number of cautious reasons. The inventory went down dramatically and then in late 2020, the demand for homes took off, but sellers simply weren't there. Then factor in all the people renovating their homes, building depts. having limited staff to approve new builds, few contractors available to build homes (because they were busy renovating), etc. etc. and you get the supply issue weren't facing.

My wife and I have been looking for a new home since October 2019 and been actively going through the process since that time. We have seen just how nuts things have become and have decided to wait it out now because we're not interested in paying 20+% over appraised/assessed value. People are being absolutely stupid paying so much for homes (and cars). Think about all that extra property tax you'll be stuck with. Higher insurance costs. Dumb.

We're probably 4 to 6 months from some equilibrium and those the paid so high now and are really going to regret it.

Barring some unexpected X-factor COVID variant that evades immunity and is way more deadly, things will improve slowly. With that said, things could get hairy overseas, especially in China and Asia. Those are huge areas with big populations, much of which didn't get COVID because of extreme lock-downs. COVID is sitting on the other side of the door, waiting patiently. Those countries simply don't have the means to vaccinate and the vaccines they have are largely ineffective. Like with what's going on in Australia and New Zealand, China and other Asia countries will be in perpetual states of lock-down until either they get a good vaccine or they come to terms that you can't control COVID with lock-downs. The constant lock-downs in places like China will have an impact on the production of goods for the next 2 to 3 years. When it comes to COVID, you're damned if you do and you're damned if you don't.

Appraisals are just a piece of paper and lag price movements in both directions, especially when prices are volatile. I think there are more than a few times in history that show appraisals are used almost exclusively to support lending regulations and are often not really indicative of fair market value to buyers and sellers.

There was a thread about a year ago when someone was insisting home prices were about to drop, so they were waiting. It is really difficult to time a long-term purchase to optimize price, whether its a house or an investment like stocks. I think things will obviously cool off in the housing market at some point but doubt there will be a plunge like during the financial crisis. It is possible prices will pull back, but also possible the rate of increases will moderate to be closer to long-term historical levels but with prices that have stepped up permanently.

(I'm not suggesting you should go do something that makes you uncomfortable. Just suggesting that appraisals are not the anchor one might think they are. If people are consistently paying in excess of appraisals, or if they aren't willing to pay as much as appraised value, that's a sign there is something wrong with the appraisals.)

[CTinline-six]

Originally Posted by XutvJet

Companies will soon stop paying high cost of living (COL) salaries for those that work remotely and/or move to areas with lower COLs. I know my company is going to adjust salaries to compensate for this. Many companies are willing to be flexible with remote working, but they aren't going to go for paying high COL salaries in the long term for those that move to cheaper areas.

This. Right now they are realizing they can save money by getting rid of building leases. Once they can offer fully remote work at lower wages than the employees they are paying now, they will.

[2 SLOW]

Originally Posted by XutvJet

My wife and I have been looking for a new home since October 2019 and been actively going through the process since that time. We have seen just how nuts things have become and have decided to wait it out now because we're not interested in paying 20+% over appraised/assessed value. People are being absolutely stupid paying so much for homes (and cars). Think about all that extra property tax you'll be stuck with. Higher insurance costs. Dumb.

We're probably 4 to 6 months from some equilibrium and those the paid so high now and are really going to regret it.

You started before the market went up and inventory dried up too.

But you make some points that don't completely add up. You pay property taxes based on what you argue the values worth to be, not what you paid for it. Our house tax value is $250k less than what we bought it for (and about $550k less than what we could sell it for).

And you pay for insurance based on the cost to rebuild, not necessarily the market value.

The other thing to consider is the interest rate. If you can lock in a 2.8% now for a house, how does that look 6 months or a year from now? 4-5% maybe?

That could easily be a $500 a month difference which also could buy you $100,000 more of a house today.