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Leon[_7_] Leon[_7_] is offline
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Default OT: House Offer Accepted. What A Crazy Market!

On 5/6/2021 10:06 AM, DerbyDad03 wrote:
On Thursday, May 6, 2021 at 10:50:40 AM UTC-4, Leon wrote:
On 5/5/2021 1:04 PM, DerbyDad03 wrote:
On Wednesday, May 5, 2021 at 10:45:46 AM UTC-4, Leon wrote:
On 5/5/2021 8:57 AM, Scott Lurndal wrote:
Leon lcb11211@swbelldotnet writes:
On 5/4/2021 9:48 PM, DerbyDad03 wrote:
On Tuesday, May 4, 2021 at 6:30:47 PM UTC-4, Leon wrote:
On 5/4/2021 10:09 AM, Scott Lurndal wrote:
Leon lcb11211@swbelldotnet writes:
On 5/3/2021 8:52 PM, wrote:
On Mon, 3 May 2021 18:10:26 -0500, Leon lcb11211@swbelldotnet wrote:

On 5/2/2021 2:43 PM, DerbyDad03 wrote:
What a crazy housing market this is! My #1 son and his GF just
found out that their offer has been accepted.

Here is how houses are being bought these days€¦


If the house appraises at the $410K level, they will end up paying $55K
(15%) over the listing price. Holy crap!


Not a good idea to buy a home for the time being. Prices are going
crazy and for no good reason. It is a fluke.

I thought you were.

Yes we were. No longer. The home we went into contract for in late
September, $365K is not welling for $430K. Almost 10K per month price
increases in the last 7 months.

Our home went up in value, in the past 7 months, from $232K to $274K.

There is a "reason". Whether it is good or not depends on whether you
are buying or selling.

Lack of supply, high demand.
Lack of supply was a temporary fluke. Building supplies are readily
available. Homes are being built at a record rate in my area. Demand
is up but supply has not been an issue since summer of last year.

While economics has a theory for supply and demand, this ain't that. It
is greed and demand. The builders are saying, lets see how much these
people will pay.


What's going on in your area might not be the norm.

The lack of supply appears to relate to both existing homes and building
supplies.

My son is a RE agent in Las Vegas. He tells me that they usually have a 6
month of supply of houses in their listings. Currently, it's less than a month.

He, my daughter and my other son have all been on the buying side of the
market in the last 6 months. NY, NV and IN. Finding a house wasn't easy in
any of those areas. They all paid a lot more than they would have just a few
years ago due to the lack of supply.

Now, as to building new, these articles were written in March 2021. They both
discuss a shortage of wood and the associated price increase of (and delay in)
getting a house built.

https://www.businessinsider.com/real...ruction-2021-3

https://www.wmbfnews.com/2021/03/29/...ces-skyrocket/





Well I am certain different locations will be different but in San
Antonio and Houston, there is no shortage of building materials. Never
really was except for a brief period last year, just like groceries were.

New homes/new neighborhoods are going up at a shocking rate. There is a
new neighborhood, being built by Meritage homes, across the street from
our subdivision. This was in the plans a couple of years ago, a 130
home community, buy there was just an empty field of grass in December.
Now there are streets and a model is going up along with 6 spec homes.
Another near by neighborhood that will likely have a thousand homes
started a couple of months earlier in October, also in a grass covered
field. The are probably 40 or 50 new homes in that location now. And
the one we were going to have a home built in has probably built 50
homes since October.

50 homes in the Houston metro area isn't even in the noise....
No kidding, the real number is probably 100 times that. I was just
talking about within a 5 minute drive from our home. You cannot drive
any where, in only the west Houston area, with out seeing 5~10 new
neighborhoods that were not there a year ago.

And I am not saying that our market for new homes is the hottest, just
that there is no shortage of materials to build these homes.

Record low inventory:

https://www.noradarealestate.com/blo...estate-market/
https://www.houstonchronicle.com/bus...p-15852599.php

"\u201cI\u2019ve got more buyers than I have homes to sell them,\u201d said Shad Bogany, a
broker associate with Better Homes and Gardens Real Estate Gary Greene in Houston. \u201cWe just don\u2019t have the inventory.\u201d"

Supply and Demand indeed.
Supply of new homes yes, supply of materials NO. So there is really no
reason for material prices to be as high as they are.

I *just* got off the phone with a friend that had house built recently.

They signed the deal in February 2020, just before Covid hit. The build started in
August of 2020 but they were luckily locked in at the February number.

They were talking to the builder last month when he started construction on a
house in the next lot over. I don't know the price of either house but I do know
that the builder told my friend that the new build is a couple of hundred square
feet smaller but was costing $36K more than her house. He also told them that
he didn't know the exact number, but if he had charged them what he should have
in August, it would have easily added $15K to their cost. The profit he made on her
house was significantly impacted. The builder said that the lumber shortage is
the cause of the increase.

No one will sell him huge stacks of lumber like he used to buy. He used to buy
in "bulk" for a better price and store it for future builds. Now he's being told that
if they fulfill large orders, they will have to say "No" to other clients and risk loosing
them as customers when things settle down. That means that the builders are
being hit twice. Once because of the price increase of the material itself and
again because they can't get the same bulk pricing that they got on the larger
orders. That problems works it way back up the supply chain so everyone is
being impacted.

She also mentioned that friends of theirs had been working with an architect on
a renovation project. They are still in the design phase, so no orders have been
placed. They just put the project on hold due the high cost of lumber and how it
was driving the price way beyond their budget.


This is a classic case of some one ****ing on your boots and telling you
it is raining.

Inflated materials costs should no longer be inflated, there has not
been a reason for high materials cost for several months. But when the
uneducated first time home buyers are willing to pay those
extraordinarly prices why would a supplier go back to regular pre-covid
pricing.


Don't blame it all on "uneducated first time buyers". This particular case
involves homes being built for the retirement segment. Single level, no
trip hazards, wider "aisles" for ease of getting around so they can age
at home.

Uneducated? *Maybe* but since the houses are still being built, that
must mean that the older crowd is just as ignorant as the youngsters.



Just to clarify, I meant to say uneducated in home buying and ownership.

Every age group has it's deficiencies. But right now, today, at the all
time high of home building, what is the ratio of older buyers to first
time home buyers.

And most older buyers have experience with home costs like property tax
increases.
The home we were going to buy would have had a $2K property tax increase
from contract date to closing, and going up from there.







Wait until people start going back to work and not needing a home with
an office and the new home building goes back to normal rates and you
will see materials prices go back to what they should be.