Mortgage rates

Discussion in 'Business, Investing & Finance' started by Zambo, Jul 3, 2019.

  1. BMF

    BMF Bad Mother....
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    I'll be curious if builders start putting out smaller (less sf) homes, especially starter homes - w/ 9x11 bedrooms, smaller master bathrooms, laundry "room" in the garage, etc.
     
  2. Detroitgator

    Detroitgator Well-Known Member
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    ALL new construction in our area (and I'm talking about several 300+ homesite developments, one with over 700) are in what I'd call the "modern era first time new homebuyer" price range and square footage category. All right around $225K (+/- $50K), all 2100-2400 sq ft. Homes that are a step up from renting/owning a 1500+/- sq ft ranch built in the 1950's/60's.
     
    • BMF

      BMF Bad Mother....
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      For most of (working) America (except for maybe the most rural parts of the country), anything under $300K is "affordable", especially w/ today's interest rates and a dual-income household. I'd love to land a 2100sf brand new house for $225k-$275k! I don't think the 'cost of construction' has been factored into a lot of these pre-planned communities - but a lot of the builders have signs that say "From $225k" - and there's nothing anywhere close to that price available.
       
    • Detroitgator

      Detroitgator Well-Known Member
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      Elite Son #2 just turned in a paper on Saturday night for his Elite Special Topics in Real Estate class at UF. It was comparing/contrasting events leading into 2007 with today. Basically, "while the current boom does appear to be truly demand driven (vs almost pure speculation going into 2007), there are several similarities that must be watched." My #1 concern is exactly what you just said. Not since 2005is have I seen these massive 300+ home developments get started... and they ALL busted here in the panhandle in 2007 and took 10 full years to build out. It is looking EXACTLY like that here all over again.
       
    • Detroitgator

      Detroitgator Well-Known Member
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      Here's a "for instance." This is Ashley Plantation here. In 2006, all those streets, sewage, street lights, and power were in place. From 2007 until about 2015-16, there were exactly FIVE houses in that neighborhood (it's where I took both sons to learn to drive because it was just streets). It's a little more built out than this pic, but there are STILL empty streets to this day.
      Google Maps

      So yes, the fact that this still isn't built out (very nice homes though, most bigger than what I mentioned is going in now) while we have 4+ new massive ground clearings going on right now, is HIGHLY concerning to me.
       
    • BMF

      BMF Bad Mother....
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      I see some of these big communities going in when I travel, but around here in the DC area it's so built up you rarely see enough land for more than a few houses (that a builder buys up and puts in several new homes). I have seen them in rural parts of Virginia when I drive out to our cabin property. I think Son #2 is spot on that 2005 vs. 2021 is different in the 'supply driven' sense. But another BIG difference is, in 2005-2008 there wasn't a government mandated foreclosure/eviction mandate in place.

      I said this earlier, but I do think we'd have already seen a housing correction had covid not happened. It would have likely happened sometime between last fall and now. But, due to covid: 1) demand went up, 2) interest rates fell drastically, 3) lumber/building costs went up (supply issue?), 4) people are working from home more and want a larger house (home office), 5) the foreclosure/eviction mandates are still in place, 6) people relocating to Red states - and I'm sure I'm missing a few other factors. I expect once Blue states reopen and most of the country is vaccinated we'll see a little boom (some people are scared to sell/move due to covid - and people are ready to let loose/spend money/travel/move). But once that settles down (by late fall? early winter?) what happens? Will the eviction/foreclosure protections still be in place? Will interest rates rise? Who knows. I'm sellilng/moving soon, so I'm not sure what we should do (the wife is hell bent on buying something, even if it's a smaller, less desirable house/location).
       
    • Detroitgator

      Detroitgator Well-Known Member
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      I'm going to do this the quick/easy (i.e., "lazy") way... ;)
      1. I understand DC, and it doesn't count in this as far as I'm concerned (neither does a place like Huntsville) because all jobs are either direct govt, govt contract, or own a business where the first two types shop for everything... the local economy is effectively "immune from reality/downturn."
      2. Son #2 addressed the eviction/foreclosure issue, even used the graph/cited the source for the post in this forum! ;)
      3. Second paragraph: agreed, and he mentioned all of those.
      4. Yeah, the decision to sell/buy now is a tough one... we've though about it too. :(
       

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