patrick.net

Around Santa Cruz it’s not falling yet I don’t think.

I saw a place 890 square feet for $1.2 million.

My friend sells houses (“homes”) and just sold a guy’s mobile home for $625,000

That’s right, a fucking trailer.

Addendum: The guy was seeking $650 and was pissed, he’s buying a real house in Texas.

Santa Cruz has lots of fire refugees looking for homes and the tech work-at-home refugees, so the market will be artificially inflated for a while. With interest rates below inflation rates, it is not the time to buy. Yup, places in owner mobile home parks are selling now for what individual homes on private lots sold for a few years ago. One manufactured home at Antonelli is asking $750K for 1300 sq. ft.

In Tri Valley, house across the street from me (second one in this year) basically sold as soon as they put the sign up. Great time to sell and skeedaddle from Cali, bad time to buy.

clambo says

That’s right, a fucking trailer.

No, no and no. He did not sell a trailer, he sold a lot.

How big a lot does a trailer sit on?
Can you build a house on the lot? (Nope)

NuttBoxer says

I'll continue enjoying renting for less than 25% of my net income, and using my truly diversified savings(NOT paper), to accumulate wealth while I wait for the bottom. RIP NRA.

I'll take 6% PITI to income and own. 25% is way too high regardless of where you want to live (rent/own). Also knowing with certainty that the landlord cannot pull the rug out under me at a moments notice (has happened before) is a great way to avoid restless nights. Housing could crash 50% and I'd still be in solid shape and not upside-down. CA and major cities is not the norm in the rest of the country mostly. I own for $1,200/mo all in on a 1/3rd an acre, fenced yard, and in-ground pool. Wife and I could both lose jobs, work at McDonalds and still make ends meet. It's a good feeling.

People gotta stop chasing the Jones'. Unless you're shitty with credit cards and stuff like that, housing is the easiest way to cut costs if you're savvy. I look at people with expensive houses and they're all jealous of the travel our family does. We're simply not at our house that much. Between sleeping and work we're maybe here and awake 4-5 hours per day best case. That's a lot of $$$$$ for 4-5 hours of use.

If Nuttboxer lives in an area where wages are 1. High 2. Within commuting distance 3. Taxes and prices are high, his strategy might be good, with the exception of “waiting for the bottom.”

My strategy is similar, but with buying in a different location with cheaper prices as wookie does.

Real estate is a local phenomenon. Maybe your relative lives in a shithole.

Dholliday126 says

Real estate is a local phenomenon.

A lot of it is driven by local job market if it is not a retiree community. However, the Work from Home phenomenon is going to shake the real estate market up.

I recall that median housing is priced at 3 to 5 times the median household income for most places, and I think San Fran Bay Area is going to come to terms with that. Another factor is that home costs are no more than 37% of take home pay for most households.

If you are buying a house, you are acquiring a monthly payment (principal/interest/tax/insurance/hoa fee), not a home. Unless you are an investor putting a 100% down payment.

.

Meh maybe. My friend lives in Mill Valley, CA and his home literally went up 400k over the last six months while SF homes have gone down. I think people are def leaving the city for the burbs. Virtual will prob have an impact but most people I know say its limited, productivity not the same as office.

Dholliday126 says

productivity not the same as office.

You think there will be another reset which brings a lot of the Work From Home (WFH) employees back to the office ?

Or for example, they pay them 65% their salary expecting 80% of their productivity when they worked in an office ?

I suspect there will be wage deflation due to WFH.

Dholliday126 says

My friend lives in Mill Valley, CA and his home literally went up 400k over the last six months

What was the value of the home before it went up $400,000 over the last 6 months ?

Redfin shows that the median home sale price (~$1.7 million) has gone up no more than 2% over the last 6 months for Mill Valley, CA.

Zillow shows for its Zillow Home Value Index about a 10% increase for Mill Valley over the last 6 months.

.

Prices in Orange County are up 7% year over year and rising.
Rule of 10 is in play.

CA has no inventory in the areas where median prices seem to go up, lesser sales = higher median. Also rural and deeply suburbian areas are more popular now. But the market is not healthy, awaiting the forbearance to end 2021, then wait 3-6 months, maybe a little more if they can kick the can down the road again. Lastly SFH are usually more stable than condos or apartments. A Trump win can stem some of the coming decline by opening up again swiftly.

ad says

Dholliday126 says

My friend lives in Mill Valley, CA and his home literally went up 400k over the last six months

What was the value of the home before it went up $400,000 over the last 6 months ?

Redfin shows that the median home sale price (~$1.7 million) has gone up no more than 2% over the last 6 months for Mill Valley, CA.

Zillow shows for its Zillow Home Value Index about a 10% increase for Mill Valley over the last 6 months.

.

Ok, maybe I used a little hyperbole cause I dont look at the guys house all the time...but it went up a lot. Not that its accurate, but here's his zestimate:

mell says

CA has no inventory

That was already a nationwide phenomenon (relatively) before covid due to under building the past 10 years. Then tack on the shit that happened with covid and that fact that we don't have a market. Yeah, you can buy and sell but it's not a market.

Indeed, real estate is local. It's also national and global. The migration to the burbs is a fuck-me thing because that's where I was considering buying!

I'm not touching this shit with a ten foot pole but then again I already own some rentals so I can just keep renting for now.

WineHorror1 says

No, no and no. He did not sell a trailer, he sold a lot.

Or maybe just sold the rights to pay rent on the lot to the park..lol

Dholliday126 says

Ok, maybe I used a little hyperbole cause I dont look at the guys house all the time...but it went up a lot.

Meh, it barely went up about $75,000 in value according to Zillow. That's shit as far as a +$1.55 million shack.

ad says

Dholliday126 says

Ok, maybe I used a little hyperbole cause I dont look at the guys house all the time...but it went up a lot.

Meh, it barely went up about $75,000 in value according to Zillow. That's shit as far as a +$1.55 million shack.

Ok, ok. I retract it. But the fucking guy bought it for like 1.2m in 2018 and he sent me the value the other day and I got pissed, I thought SF real estate was taking a dump.

Dholliday126 says

My friend lives in Mill Valley, CA and his home literally went up 400k over the last six months

Dholliday126 says

Ok, ok. I retract it. But the fucking guy bought it for like 1.2m in 2018 and he sent me the value the other day and I got pissed, I thought SF real estate was taking a dump.

Doc Holiday, I appreciate your posts and thank you for providing more details and insight like this. Did he mention that he had to put a lot of money into improving/renovating and/or repairing it ?

I understand it was $1.2 million in 2018 and now is ~$1.6 million in 2020. That is about a 15% annual increase over the last 2 years.

.

mell says

But the market is not healthy, awaiting the forbearance to end 2021, then wait 3-6 months, maybe a little more if they can kick the can down the road again.

They're not going to foreclose. They're going to make every effort to show the asset as performing so they don't have to raise extra capital/deposits. That may lead to a bigger bubble in the future, but I don't see a housing collapse anywhere. Remember you're looking at 8-10% loss out the gate to foreclose and sell a property as an REO (broker fees, management fees, attorney fees, title, fees, etc). Factor in if payments weren't made on a newish loan, where it's mostly interest based on amortization and banks stand to lose 15-20% plus foreclosing. The dominos would start to fall again and they know that this time around. Lenders screwed themselves last time and this time will be different IMHO.

Condos in cities would probably be the worst market to be in as millennials that own start having kids and the rioting bull shit. They'll move to the burbs after baby 1 or 2. Also the work from home stuff is going to create a 1950-60's like shift to suburbia. If you don't "have" to go into the office, you're going to move outside of a shitty box with feces and needle filled streets. I'd also say with the aging boomers that maintenance free townhome properties outside the city are going to go gang busters the next decade. They'll sell the McMansion and downsize. If I was a developer I'd be heavy into those types of properties right now and for the next decade.

WookieMan says

the work from home stuff

My niece in Mindanao, with a Computer Science degree from the local university, works from home.

The team she's on is fully competent in all the coding languages and data base management same like here in Silicon Valley. Their clients are all in the US, she told me mostly here in the Bay Area.

They were hiring like gangbusters recently, all to support their US customers.

She told me that her salary is about $200 per month, which is a damn good salary in Mindanao. Working from home.