Real estate thread

[aynrus]

I have very little experience building but we're considering giving it a go. Maybe. I read a few articles on what to do...but I was still like, this seems like a lot and I don't know where to start and how not to get totally screwed. I've seen people get screwed with properties that fell apart within a decade after being built. These friends also had construction experience (but there were sometimes design problems).

Any advice?

I know one older lady, whom I rented a cabin from before, who's got no construction profession, no education, little money and grew up in a very poor family, plus she barely knows how to use internet. She managed to built 4 houses in her life. 1st one was build together with her husband (who also was not in construction and they used a kit to build 1500 sq ft home, doing a lot of work themselves), the other 3 she had done on her own, acting as own general contractor, and there're no issues with any of these homes (2 of them used kits).
Can't be that hard, even with all the major hurdles for building anything that were put up in the US... She built in rural few-restrictions jurisdiction, this really helps

I guess building something big and fancy will involve more risks.
The key is a good ground and correct foundation construction - soil engineer test/report and good foundation/concrete contractor are important.
I'd only want to build as own general contractor, having control over all the steps and subcontractors. If using a kit I guess important to research the reputation/reviews.

 

[cowboy]

Everything runs in cycles, this market included. The question isn’t if the market crashes/corrects itself but when.

 

[aynrus]

There're books on building as owner-builder/own general contractor, by the way. Being owner-builder saves money.
I'd only want to build something that isn't big, 1 story and of simple style, without fancy design elements that can add to the risk.
A lot of rural places do not enforce building codes or only partially enforce (only electrical and plumbing) even if there's statewide building code, because often this is left up to the rural county whether to enforce and they don't enforce.
I'm not talking about building something unsafe, but about avoiding unnecessary hurdles and delays with inspections.
In many Western states, they mostly do go out and enforce general building code, no matter how rural it is.
Kit homes should meet International Building Code, normally, and come with engineer stamped plans, to get approval from local government.
But I think kits can be expensive these days, more expensive than just building after buying engineered plans and own lumber/metal.
Buying own lumber there's definitely more control over quality.

 

[aynrus]

I posted before about US 18.5-year real estate cycle.
This cycle worked since 1792, and I don't see why it should stop working now.

Other countries most likely have similar cycles, though length might be different - as soon as there's market economy.

US economist who specialized in real estate had discovered US 18-year cycle back in 1930s, after researching old records.
It was revisited in the 1970s and it was found that the cycle continued. It had been revisited since, and the cycle apparently continues to work.

18.5 year cycle does not mean, of course, that every time it's the same down to the month. It can be 20 years and 16 years next time, but on average it fluctuates around that number. Full cycle = bull + bear market duration.
Last low was in 2013.
This means that this bull market can easily continue into 2022 and even up to 2024 in the case of long cycle this time (another thing, the bull leg of the cycle can be longer than bear leg, like was with the last cycle). Plus, the decline isn't instant and can take years for significant effect to be seen in the bear market. So I don't think there's a sure bet on rapid easing of the market for buyers... and then there's high inflation which guarantees prices won't go down.

Real estate bull markets trigger increased construction, and once too much housing is built, there's a decline. It also goes along with general economic cycles and Fed rates lately as there's mortgage industry. Right now, construction has constraints of limited labor availability and materials, there're still shortages of materials (not to mention they got jacked up in price), which prevents creating more supply.

Waiting for reversal can mean more expenses on rent and devaluation of savings by inflation, more than would be saved by buying in the next bear market - especially since bear market does not guarantee big price drop (and 2008 was very likely once-in-a-lifetime event/opportunity) but may simply mean slowed appreciation that doesn't catch up with inflation. Availability and options definitely should greatly improve, though, once real estate goes into bear market.

 

[Dr Mantis Toboggan]

Everything runs in cycles, this market included. The question isn’t if the market crashes/corrects itself but when.

Historically and in theory this is true, question this time will be how the cycle is affected by the neverending flow of Monopoly money from the Fed.

 

[jonNorth]

Historically and in theory this is true, question this time will be how the cycle is affected by the neverending flow of Monopoly money from the Fed.

Monopoly money and social engineering where they pick winners and losers.

Bannon and Navarro were speaking about this just now on WarRoom, they are trying to crush the automobile and its place in American society.

Navarro described how they are forcing a switch to electric vehicles while simultaneously shutting the power plants(many have targeted decommissioning before 2030)

My analysis is that this would greatly impact development patterns and real estate, the suburbs would not even exist without the automobile

 

[aynrus]

No matter what money they're printing, housing supply and demand laws are still valid.

Right now, estimated US housing shortage is around 3.8 million units, this is what's needed to meet "consumer demand".
(this consumer demand might not count all kinds of investors and 2nd home buyers, but just people who need own roof over their head)

Right now, there're roughly around 6 housing starts per 1000 of households per year. Which means at current pace of construction, around 5 years to meet the demand (assuming demand would not change, which won't be the case - demand should increase due to backlog + population increase, but construction pace too).
128M (US households) / 1000 * 6 = 768K
3.8M/ 7.68K = 4.94 ~ 5 years

 

[C-Note]

There are forums on the Internet, like Houzz and Archinect, in which they trade advice on building your own home. I did not visit those forums to check their quality, just did a quick DuckDuckGo search.

If I were looking for a home to buy right now, I'd probably just bite the bullet, play the game, and overbid on an available house like everyone else. Buying a condo in the downtown area of my nearby, run-down, dangerous Democratic-governed city wouldn't be an option because I have kids. I would probably go smaller on the house, however, such as getting a 1500 sq ft instead of 2000 or whatever.

If you don't have kids, however, you might should consider buying a downtown condo, because that's currently where the buyer's market is. Nobody wants condos in the center of liberal cities right now (at least, in my trashed liberal city) because of the current situation. If you can stick it out in the condo for a few years, then you can sell it and move to a house during the next bear market.

 

[LawTalkingGuy]

I decided to pick up, pack it all in, and I am about to buy 200 acres in a remote rural area and my intention is to have a fairly self-sufficient spread and build about an 8,000 square foot house on said land. I hope to be situated in a finished house by the middle of 2022.

 

[fastandfurious]

It's important to also consider that corporations are buying more land as a store for wealth. Low interest rates and high uncertainty in assets make this a promising investment. Maybe we'll have a WSB Real Estate Squeeze megathread in the future?

 

[FactusIRX]

There are forums on the Internet, like Houzz and Archinect, in which they trade advice on building your own home. I did not visit those forums to check their quality, just did a quick DuckDuckGo search.

If I were looking for a home to buy right now, I'd probably just bite the bullet, play the game, and overbid on an available house like everyone else. Buying a condo in the downtown area of my nearby, run-down, dangerous Democratic-governed city wouldn't be an option because I have kids. I would probably go smaller on the house, however, such as getting a 1500 sq ft instead of 2000 or whatever.

I'm doing that. I'm just going to bite the bullet and overpay. It might be years before the market corrects itself, or it collapses in a spectacular fashion, at which point you don't want to be anywhere near the city.

 

[budoslavic]

 

[berserker2001]

For teaching yourself how to build a relatively simple home, I love this little website: https://www.countryplans.com/
It has very detailed, affordable plans, and a very supportive, friendly, and knowledgeable user forum to help guide you along the process. I was actually going to do this a couple years back, but where I bought land turned out to be prohibitively costly for the building permit process.

For actually designing a house, software such as this will automatically generate the framing design and roof for you to make it easier, and then you can generate a supply list from there. Easily editable to meet local codes. https://www.homedesignersoftware.com/products/home-designer-pro/

In my opinion, you can still find homes and land to build on by sending out bulk mailers, for those who want to get creative and do a little legwork. Spend $1-2000 on a bulk mailer campaign to a targeted area you are interested in, maybe even with a cold offer included, and you could end up purchasing a house way below market value from a motivated seller. Many web resources for such a strategy of home buying on the cheap.

I myself bough a lake house because the basement was flooding, and it has taken 17,000 lbs of concrete and a ton of remodeling/ engineering solutions to get it into shape, but I now have a nice little dream property because I was willing to think outside the box and take a risk. No one wanted my house because they weren't willing to take on the headaches; I got it cheap because I was. All about how creative you want to get, there's always a way.

 

[Arado]

There are forums on the Internet, like Houzz and Archinect, in which they trade advice on building your own home. I did not visit those forums to check their quality, just did a quick DuckDuckGo search.

If I were looking for a home to buy right now, I'd probably just bite the bullet, play the game, and overbid on an available house like everyone else. Buying a condo in the downtown area of my nearby, run-down, dangerous Democratic-governed city wouldn't be an option because I have kids. I would probably go smaller on the house, however, such as getting a 1500 sq ft instead of 2000 or whatever.

If you don't have kids, however, you might should consider buying a downtown condo, because that's currently where the buyer's market is. Nobody wants condos in the center of liberal cities right now (at least, in my trashed liberal city) because of the current situation. If you can stick it out in the condo for a few years, then you can sell it and move to a house during the next bear market.

Do you think the mainstream disinterest in downtown condos is because of the virus and teleworking or is it because of a subconscious need to prep and be further away from urban chaos? If the former then the market should die down soon enough, if the latter then things may never equalize.

With vaccinations and gradual return to normal will the appeal of the suburbs go down, even if the long term threats to social stability remain?

 

[LawTalkingGuy]

Do you think the mainstream disinterest in downtown condos is because of the virus and teleworking or is it because of a subconscious need to prep and be further away from urban chaos? If the former then the market should die down soon enough, if the latter then things may never equalize.

With vaccinations and gradual return to normal will the appeal of the suburbs go down, even if the long term threats to social stability remain?

The USA is in a long-term decline which is also likely an irreversible decline.

People who are smart enough to make millions, tens of millions, or hundreds of millions of dollars are also smart enough to recognize what is going on, even if they do not fully understand the causes and reasons. Most of these people are going to leave areas that they anticipate will be hot-spot of chaos, conflict, etc.

We will probably live to see the USA crumble before our eyes.

 

[jonNorth]

Homeowners behind on their mortgages could get a reprieve on any foreclosures until 2022

The Consumer Financial Protection Bureau is looking to give homeowners in Covid-19 forbearance programs a reprieve from foreclosure proceedings until 2022.

www.cnbc.com

"To help homeowners who are behind on their mortgages, the CFPB is proposing a new rule that would establish a “temporary Covid-19 emergency pre-foreclosure review period” that would essentially block mortgage servicers from starting the foreclosure process until after December 31, 2021."

 

[theythempronouns]

this aged well...I'm inversing everything you fools say. What everyone start to return to the city by next year kek, USD shits on the Euro, and SEA kicks all of you monkeys out

 

[rainy]

Where I live houses are going for 15-20% above listing price, bidding wars with cash buyers.

 

[NoMoreTO]

It's important to also consider that corporations are buying more land as a store for wealth. Low interest rates and high uncertainty in assets make this a promising investment. Maybe we'll have a WSB Real Estate Squeeze megathread in the future?

Yes. Farms in region of Ontario have been being bought more and more by corporations. In Manitoba, corporations are buying up huge swaths of land. The Teachers pension fund here in the province is known for being quite saavy and are now buying up farms.

A farmer explained it to me:
- Typical Return on Investment for a Farm is 1.5-2.0% (not including capital gains)
- The typical individual buyer takes on a mortgage at 3.5% interest, meaning that he has to gap the difference by either supporting the investment with other farm income, refinancing older farm properties, or off farm income (job).
- Investment funds already place large amounts of money in low risk asset classes, government bonds would be an example, yielding only 2% in many cases, but secure. They simply sell these and put them into farmland - CASH.
- On the other hand you have ETFs which when people buy, they basically just have to go out and allocate the funds into farms - further pushing the prices up.

I don't think we'll see a squeeze on real estate, but the WEF promise of "you'll own nothing and be happy" does linger in the background. To me that is how they would do it, just make housing so expensive no one can buy one. Then tax the properties upon death so that they children are almost unable to purchase. We are seeing this in farm real estate in the US with Joe Bidens pushing of "unrealized gains".

 

[berserker2001]

Where I live houses are going for 15-20% above listing price, bidding wars with cash buyers.

This is exactly what I'm seeing in my little rural community in western Michigan too, as well as Grand Rapids and the Chicago suburbs - it's wild. Conventional wisdom and "experts" were saying that the housing market was peaking hard in late 2019, and then COVID hit and prices only shot through the roof and obliterated any predictions. It's basically a rogue market right now, but fascinating to watch and comment on. I'd post the Redfin graph but don't have such privileges yet; national median sales prices are 12.4% higher than this time 2020, and 18.4% higher than this time 2019 when everyone thought median prices couldn't climb any higher... Lot of money changing hands, no doubt about it. Has to be a massive wealth transfer behind the scenes, nothing like this is ever coincidence