3 4 5
nedc Reader
11/26/22 8:28 a.m.

In reply to mtn :

" I'm waiting on my water heater to go out, and I'm hoping it holds out until spring." You know a water heater is just a big tank with two heating elements and two thermostats which can be replaced with new for about $30 and an hour or so of your time? As long as it's not rusted out you can flush them and rebuild for almost nothing.

Steve_Jones SuperDork
11/26/22 8:56 a.m.

In reply to frenchyd :

That's perfect advice 6 years after he bought the house....

gearheadmb UltraDork
11/26/22 9:58 a.m.
Opti said:

In reply to gearheadmb :

Some of the analysts are concerned about the massive amounts of people that bought or refinanced when rates were low and have no intention of selling because of their rate. They think this will contribute to low inventory levels and keep prices high.

That doesn't make much sense to me, unless people are selling their houses to live in a van. If few people are selling then yes there are less houses for sale, but those people arent trying to buy. If many people are selling there are more houses available, but also those people need to buy a replacement, so there is more competition on the demand side. At least that's the way it seems like it should work. 

I'm pretty open to change, but I think the more old fashioned way of buying a house and settling in as a home for long time is probably a better,  more sustainable way of doing things than the trend of the last two decades of buying and selling every 3-5 years and trying to make 75k profit every time. But what do I know?

Opti Dork
11/27/22 8:51 p.m.

In reply to gearheadmb :

I get what your saying, about a seller also being a buyer, and Im no expert, but Ill tell you what smarter people have told me. Ill probably do a terrible job explaining it.

 Its not just a mortgage rate lock down, its just one part, that combined with all the other parts causes a problem.

Most of the time if someone sells a house, they are probably also going to buy one, but those two things dont always happen simultaneously, and having that home on the market before they become a buyer fills in the small gap. Normally with stable rates as the market it turned constantly it acts as lubrication for the market.

In the same vein, even if you are buying and selling simultaneously, you still add to inventory, even if you are adding to demand. Having higher instances of buying and selling, in a normal market, leads to less volatility in that market. Home values are based on other home values, you have more info points and you are less likely to see fast wild swings one way or the other.

It also affects the type of inventory. Most people sell a house and upgrade. If people quit upgrading because of rates, your inventory can get lopsided. First time home buyers are still entering the market but there is no inventory for them. because the people in the first time owner homes arent selling. In my area new construction heavily leans higher up the market. It wasnt long ago there was a bunch of sub 200K first time buyer type homes going in, I dont think Ive seen a single sub 350K home go in, in the last couple years.

I believe it boils down to inventory levels, which are cyclical but have been pretty much trending down since like 2014, and if a mortgage rate lockdown is going to hurt inventory levels, its bad for buyers. Im pretty close to the home building industry, and I dont see it getting better for buyers anytime soon.

Building new houses is terrible right now. Home builders saw costs skyrocket, but it wasnt a big deal because money was free, so people didnt mind the ballooning prices. Now they are sitting on houses that are overpriced for the market and they cant sell, but their costs havent decreased. So most of them have two choices, take a bath on the inventory you have and try to move downscale (which isnt easy because costs arent decreasing), or slow down and scale back, and wait for some stability to return to the market, then decide if moves need to be made. Im seeing more of the second option which is bad for inventory levels, which is bad for buyers.

Im with you about the current trend needs to change, I also thing money needs to cost more than a couple percent. I dont think we will return to any type of normal until the fed quits messing with rates, but i think they will continue to raise it until they recession pressure outweighs the inflation pressure and then they will start dropping it, and it will start all over again. I was told the number 1 reason for canceled real estate contracts recently is uncertainty, not cost, uncertainty.

pheller UltimaDork
11/28/22 11:54 a.m.

Just to follow up on this post since people loving digging up my historical posts for posterity's sake (or bots do it). 

We bought our first house in 2016 in a cabin community south of Flagstaff. It was a 9 year old house at the time, and my LOVED the details of the house. It felt like we lucked out getting it for $300k. 

After a few years we started to see the pitfalls of the house. 

- We were surrounded by junky homes with lots of trash out front. 

- We were at the bottom of a very steep hill that became a deathtrap in the winter. There were multiple accidents in front of our house. 

- Our house sat very close to the road - only about 20' seperated the front corner of our garage from the street, meaning kids couldn't play out front and if I parked my truck in front of the garage it was almost in the road. 

- It sat very high "up" - we had two big straight tall hardwood staircases inside the house, and a significant outdoor staircase to get into the house. My wife broke her femur into a bunch of pieces slipping down one staircase, and I was worried about something worse happening to kids if we stayed there. 

So in 2019, we sold for $314k, and bought our new place: a 20 year old single story, slab on grade, in a wonderful neighborhood filled with young families for $372k. It's within city limits and even has unobtrusive HOA. We're 1000' from a firehouse, and our daughter may be able to walk to school (if she gets into the nearest charter school.) The lower interest rates, equity and slightly higher sale price allowed us to get into the next house for only $3000 out of pocket and a $200 increase in our monthly payment. 

Our current house is not without its faults. It significantly smaller and has more "dead space" than our last house. It's not nearly as efficient. It's required new floors, skylights, a new much larger deck, a bathroom remodel, lots of paint - but those expenses seem more worth it because we love our neighbors and our neighborhood. 


frenchyd MegaDork
11/30/22 4:34 p.m.

In reply to pheller :

That's the magic ticket.  Neighbors you like.  But there is no way to ensure that will always be.   
 I moved in to great neighbors.   But one moved and the neighbor from Hell moved in.  
     HaHa. I put lived her!  Only took a little over 25 years.  

3 4 5
Our Preferred Partners