Home buying thread

Sanrith Descartes said:

Went under contract with the condo I have been renting out. Renter who is buying wanted to wait to sign to see what the Fed did.

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So about those rate cuts:



40-50ish BP RISE in mortgage rates post-Fed!

Jysin said:

So about those rate cuts:

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40-50ish BP RISE in mortgage rates post-Fed!

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Don't mortgage rates follow Treasury note yields more than the prime rate

My post was more of a commentary on how everyone has been clinging to rate cuts as the big mover to instantly unclog the housing mess.

There is a long way to go.

Anecdotally, the FL market I have been looking in has nothing but exploding inventories and price cuts. Objectively speaking, this market ran up 50-80%+ gains in the last 5 years, so it has a long way to fall to get back inline with national statistics. Housing seems to work at a glacial pace though, so it will never react as quickly as say, the equity markets.

Jysin said:

My post was more of a commentary on how everyone has been clinging to rate cuts as the big mover to instantly unclog the housing mess.

There is a long way to go.

Anecdotally, the FL market I have been looking in has nothing but exploding inventories and price cuts. Objectively speaking, this market ran up 50-80%+ gains in the last 5 years, so it has a long way to fall to get back inline with national statistics. Housing seems to work at a glacial pace though, so it will never react as quickly as say, the equity markets.

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That's why it's doubtful it will "reset" where some people think prices will drop 50% to return the trend line to magical 2018 linear price changes. It seems like only the outrageously overextended markets are getting any price cuts. We're still on track for 5% increase over the next year, because there is just no inventory and way more demand. Then again that was always the case, just accelerated the demand to complete +comp value cycles from 10 years in 2.

As someone who would consider moving into a different house, I'm not sure how I feel about it overall or if it's a real positive. "Free" equity isn't bad, but as much as I'm glad to have been in the game rather than out with my money, the net result is that accessory costs (realtor, taxes, fees, etc.) mean that the net cost of doing anything is a still a net 2-3x tougher pill to swallow. And that's ignoring the rate question right now, since in practical terms what I want to pay won't get me a new house I'd want to buy until something changes like mortgage rates coming down a bit.

It does leave me feeling a bit trapped, not in a literal sense but in terms of options. There doesn't seem to be a set of circumstances coming soon that will effectively let me trade my current property for another one of equivalent value, which is what would make a healthy market. This is a positive thing in some respects because my mortgage on a nice property is the rental cost of a shitty apartment in the larger cities within commuting distance. But then it quickly becomes a negative as I might price out just wanting to move to find a better house, to change jobs or anything else.

It's certainly a time to be alive, I'll give it that. I feel even worse for some of my friends who weren't in a house by 2020, as now they are so far behind it's an insane commitment ( financial and mental) to enter it now. As much as I would grumble about moving due to circumstances, at least I can without needing to radically increase my income.

Florida in its “real” areas is not down… well around me at least.

1 lot corner, one small house sold to a developer. They split the lot into 4 and b hilt 4 thin tall houses. 1m$ each. Insane

Jysin said:

Housing is (and always has been) quite regional. FL / TX have some distressed areas with 30%+ price cuts already and inventories hitting much higher than pre-covid levels. Some of the NE, however, is still low inventory and short listing periods. I can see if we hit recession / layoffs in the next 6-12mo, those FL / TX areas will have deeper cuts.

Anecdotally, the area I have been looking in FL has over 35% of the listings with price cuts. Some in my budget that I have been tracking cut by 15%+ and still considered stale listings with 90+ days on market.

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FL has 2 huge issues killing their market right now. The insurance changes and the condo changes. The condo one especially is driving most of the excess inventory and price drops. Most condos were keeping their reserved at the bare minimum, and not keeping enough on hand for structural issues and mandatory inspections. FL decided to close that loophole and set into law that all condos have to have those reserves funded yeseterday which has resulted in huuuuuuge fucking assessments on every condo association that has been around for over 25 years, which is most of them.

I was looking into buying one a few months ago to be near sister and her son. Learned more than I wanted to about all of it.

On a different note, I am going to refi with my current bank. The rate they quoted me will shave 10% off my monthly costs, which will help a lot. I figure getting locked in for now, and waiting to see if the feds follow through on their promises to keep cutting hold true or if this is just an election stunt.

TJT said:

How much will the refi cost you out of pocket? Like in terms of redoing the loan process/new closing costs?

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$2500 out of pocket, but I will get $1100 from my old escrow back and have no payment in November, so I will be back to where I was almost immediately.

moonarchia said:

FL has 2 huge issues killing their market right now. The insurance changes and the condo changes. The condo one especially is driving most of the excess inventory and price drops. Most condos were keeping their reserved at the bare minimum, and not keeping enough on hand for structural issues and mandatory inspections. FL decided to close that loophole and set into law that all condos have to have those reserves funded yeseterday which has resulted in huuuuuuge fucking assessments on every condo association that has been around for over 25 years, which is most of them.

I was looking into buying one a few months ago to be near sister and her son. Learned more than I wanted to about all of it.

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The insurance thing is out of control.

Our house is coming up on 3 years old. Our insurance company sent us a letter a few months ago saying they were dropping us completely. We are no longer insurable with them. A 3 year old house.

We've gotten a couple quotes and so far they're about 250% of what we've been paying.

I imagine in another 5 years our house will become completely uninsurable outside of the state coverage.

Sanrith Descartes said:

The legislature needs to step up and fix this before it breaks completely. Just pass a bill that if you sell home policies in other states, you cant sell any insurance product (like auto) in FL without also offering home.

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My understanding is that the Florida legislature really contributed to the problem by passing a bunch of laws that essentially allowed for widespread fraud in the roofing business

Sanrith Descartes said:

The legislature needs to step up and fix this before it breaks completely. Just pass a bill that if you sell home policies in other states, you cant sell any insurance product (like auto) in FL without also offering home.

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Florida auto isn’t that much better. I think you would reach the point California got to where they just say ok and leave entirely.

the problem is the astronomical costs of building a house that is compliant with modern code coupled with the nature of the disasters in these states. The disasters being mass disaster events affects insurance company decision a lot. A house damaged in a mass disaster can from a $ standpoint cost 50-100% more to repair than one damaged in like a random fire or tree fall in the northeast because surge pricing, scarcity of contractors, secondary damage from lack of timely repair all set in.

Sanrith Descartes said:

The legislature needs to step up and fix this before it breaks completely. Just pass a bill that if you sell home policies in other states, you cant sell any insurance product (like auto) in FL without also offering home.

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Congratulations on your 5-figure car insurance bill.