Is there another "housing bubble"?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Look at rents for comparable properties. Rents reflect the need for housing in your specific area and property type.

Rents are crazy high. I am interested in the evolution of disposable income versus house prices.

https://www.bloomberg.com/view/articles/2017-03-23/rents-in-megacities-can-t-go-up-forever

This article is by our very own D.C. Food blogger!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Look at rents for comparable properties. Rents reflect the need for housing in your specific area and property type.

Rents are crazy high. I am interested in the evolution of disposable income versus house prices.

https://www.bloomberg.com/view/articles/2017-03-23/rents-in-megacities-can-t-go-up-forever

This article is by our very own D.C. Food blogger!

Yes! http://tylercowensethnicdiningguide.com love his blog. I've always wanted to pursue a pet project like this but never have the time. I should stop making excuses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't think there's a bubble per se, but I do think flippers are essentially stripping the equity out of some neighborhoods by charging up to the very limit of what the market will bear.

That's what always happens, what do you suggest, they lower prices?

why does that strip equity?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No people buying homes can afford to pay without strange loans

But then, why are prices so high?

High incomes, good economy. We made 550k last year, 100k more than the previous.

Lucky you! I think that is annecdotical evidence. Not the standard. Unfortunately.....

[Anonymous]

Anonymous wrote:Funny- I managed to find an unrenovated house.

So did we in a neighbourhood with lots of teardowns bought by builders.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

So did we in a neighbourhood with lots of teardowns bought by builders.

when?? and where??

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

So did we in a neighbourhood with lots of teardowns bought by builders.

when?? and where??

Generally the key is to buy something with a fundamental fault that can't be fixed. Like it's on a busy street, funny shaped lot, but Hills. The builders don't want to deal with that, you can never beat a builder for a truly good property because they come with cash to pay more and no contingency because they can cut the margins elsewhere for nice profit. They need a pipeline of work to keep their crew on payroll and keep their subs happy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

In what neighborhood? Any tips? We found a (mostly) unrenovated house as well, but I think that's only because the difference between renovation and the actual market price would be to little for flippers to mark up.

'09 south Arlington - you can still find them

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

So did we in a neighbourhood with lots of teardowns bought by builders.

when?? and where??

Generally the key is to buy something with a fundamental fault that can't be fixed. Like it's on a busy street, funny shaped lot, but Hills. The builders don't want to deal with that, you can never beat a builder for a truly good property because they come with cash to pay more and no contingency because they can cut the margins elsewhere for nice profit. They need a pipeline of work to keep their crew on payroll and keep their subs happy.

Yes, it's true, some properties are too much work for a builder wanting to turn a quick profit by clearing a flat lot and building a generic house. We bought an irregular hilly lot, which wasn't too desirable for a profit builder. We love it though, because it's beautiful and we have views, but the custom build it requires will be more expensive. We don't need 6000sq.ft though, so we are happy with our remodel.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think there's a bubble per se, but I do think flippers are essentially stripping the equity out of some neighborhoods by charging up to the very limit of what the market will bear.

That's what always happens, what do you suggest, they lower prices?

why does that strip equity?

Because A) they are raising prices by having a monopoly on the cheap housing stock and b) raising those prices further by doing "renovations" that may be unnecessary, that then mean that you are not going to be able to have the same appreciation that you might have had. Basically, the equity is going into the pockets of the developers rather than homeowners.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

So did we in a neighbourhood with lots of teardowns bought by builders.

when?? and where??

It's what DCUM calls shitshacks your basic brick ramblers and split levels, which are not loved, but can make for a spacious enough home for a family without spending a fortune. The key is to find something, that's more difficult for a builder to turn a profit, like a wooded lot or a sloped lot or something irregularly shaped. Builders love flat lots with easy access.

You also can find already remodelled ramblers or split levels, which are usually too expensive for the builders, and not desirable by those with deeper pockets.

Cheaper properties are not plentiful, so you have to keep looking and be ready to jump. Also look during fall/winter, sometimes better deals. Don't be scared of properties, that have been sitting. There are a lot of dumb buyers that are afraid of their own shadow and will not bother with anything less than conventional. If you step away from that mindset and look beyond cosmetic things and don't assume something is very wrong with properties, that's been sitting, you can find better deals.

[Anonymous]

No I don't think so. I don't know anyone who is underwater or having trouble affording their houses. Sure, we all wish our houses cost half as much, but that's life.

[Anonymous]

Prices being historically high, and overdue for a correction, is not a "bubble".

In 2006 prices were unsustainable, since many were made based on loans with weird terms, low intro rates, which counted on appreciation to avoid foreclosure. Prices were also very high relative to rents, due to buyer's panic. It was easy for the appreciation to reverse hard, very quickly.

Prices seem high now - in many places they are high relative to incomes. But they are not that high relative to rents, nor are the loans unsustainable. Prices could come down, but it won't be a "bubble popping"

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny- I managed to find an unrenovated house.

So did we in a neighbourhood with lots of teardowns bought by builders.

when?? and where??

Generally the key is to buy something with a fundamental fault that can't be fixed. Like it's on a busy street, funny shaped lot, but Hills. The builders don't want to deal with that, you can never beat a builder for a truly good property because they come with cash to pay more and no contingency because they can cut the margins elsewhere for nice profit. They need a pipeline of work to keep their crew on payroll and keep their subs happy.

Yes, it's true, some properties are too much work for a builder wanting to turn a quick profit by clearing a flat lot and building a generic house. We bought an irregular hilly lot, which wasn't too desirable for a profit builder. We love it though, because it's beautiful and we have views, but the custom build it requires will be more expensive. We don't need 6000sq.ft though, so we are happy with our remodel.

I actually love hilly lots. Husband and I have been looking and we love neighborhoods like Maywood, Hollin Hills, Great Falls, etc. Are we forgetting any other hilly neighborhoods?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think there's a bubble per se, but I do think flippers are essentially stripping the equity out of some neighborhoods by charging up to the very limit of what the market will bear.

That's what always happens, what do you suggest, they lower prices?

why does that strip equity?

Because A) they are raising prices by having a monopoly on the cheap housing stock and b) raising those prices further by doing "renovations" that may be unnecessary, that then mean that you are not going to be able to have the same appreciation that you might have had. Basically, the equity is going into the pockets of the developers rather than homeowners.

Sorry, that is an illogical argument - and certainly does not "strip" equity or create an asymmetrical market dynamic.

-Wharton MBA