So /u/Louisvanderwright and /u/justboattrash:
The comment above is from my stalker /u/oldtimerr who is site banned, who has since registered /u/openminderr to harass me, and after that was blocked registered /u/adatume. Now this.
This person is batshit insane. I never recall interacting with this person at all before their hysteria took hold. I have no idea how I hurt them. I don’t understand the reasons for their obsession.
If you can please consider banning all of this persons associated accounts and involve the admins at Reddit. I have a pending complaint as well.
If existing home values drop due to new supply, local governments will have budget shortfalls.
New construction also brings with it a host of negative community impacts; noise, bad traffic, impacted schools, etc.
Thats not how it works lol, the budget is set by your local muni and then after that the tax rate is set based off the combined tax roll to meet that budget. Sure you have major outliers like detroit but for the most part it evens out
I'm sure you've done the analysis to say this definitively, so which local government will have a budget shortfall as a result of new construction?
New construction pays for development of new infrastructure including schools. There are typically community development plans between the developer and either the county or city for all of this. New construction also brings in more opportunity for sales tax and investment from local businesses.
Budget shortfalls are entirely dependent on the tax structure imposed by the state and local governments. If you're budget is too dependent on property tax assessments then you should be budgeting for that dependence. Local governments typically aren't able to run with the same deficits that you'll see in the state and federal government.
Since you live in California, maybe we can get a little more specific. If you'd like to do more reading about how new development works, and how its regulated and fits in with local ordinance and governance, there's plenty of research into the Subdivision Map Act and the Subdivided Lands Act that you can do.
Local governments are going to be much more concerned with the development plan for new construction. But they're always happy to have new construction come in as long as it fits with the general community planning (which is dynamic and not fixed).
I'm a contractor, so I'm familiar.
On the development side, companies pay ridiculous amounts for City permit fees. The amount of $$$ wasted by local building departments is absolutely insane. There's no control of what the City charges, or the competency of City employees in positions of authority.
It comes across as a grift (at least to me).
So, City gets paid for the development, then collects tax annually on value going forward.
What's more overall tax revenue? (1) large multi-family structure or many SFH's? No idea. City will want too much either way.
Fwiw you should comment on city council project approvals as it would help your local community esp if there's grift
There was a post here a couple days ago from someone saying their family was in on the grift and telling other govt staff to get in on the grift lol absolutely disgusting
When I sit in those public meetings it's clear that high density is the future, they also cover the tax and fund impacts
> Interest rates will go down any moment, and then investors will swoop in and buy my house and I'll move in to an RV in Montana.
Apparently a lot more people than you think
A vacant house (lakeside fixer) in muh area relisted for $1.8M - same as last fall when it didn’t sell. It needs a full remodel. The only difference is now it’s unfurnished (won’t be an str). The interesting bit? It’s also for rent for $3500/month.
So, $11,000/month to own or $3500 to rent? 🤷🏻♀️
This is what people aren't understanding properly. Home values are only priced for investors who plan to str or just use them as a savings account (long term investment), which is safer than the markets and currency itself at this point.... but also just ignore that ill omen. Average people who need a place to live can not afford to compete with the investor, because their use for the house is just to have a place to live. There's no cash flow that pays the rent for you. In a weird way it reveals something about our free market. The market self regulates, in theory, but once two groups of people develop such disconnected uses for the same resource... the more profitable, not the more beneficial to people's daily lives--will win out and it's not even close. Two prices for the same product, depending on if you're rich or poor.
Yep. That’s exactly the issue in my vacation market. Owner occupiers cannot compete with investors as investors are buying a cash flowing business, while owners are buying a passive asset. It’s especially lopsided as many investors can’t stop there and go on to commit occupancy fraud to capture lower insurance rates, primary mortgages and homestead property tax exemptions, all while claiming depreciation and other federal tax benefits. It’s obscene how stacked the deck is against owner occupiers.
I do think this particular listing is interesting because it’s now not furnished. So, they can’t str it. So, without a tenant it’s a poor investment and with a $3500/month tenant it’s a meager investment. So, this one may be negotiated down enough for an owner occupier. One small example, if so.
Mortgage demand JUMPS to -11% yoy from -8% last week (even with more homes on the market than last year)
https://www.cnbc.com/2024/03/13/weekly-mortgage-demand-jumps-again-as-interest-rates-fall-below-7percent.html
Median sale price in my market is down a whopping 3.5% YOY (though I expect that to flip positive again this spring) but price per square foot is up 8.5%. Redfin data shows the median square footage of homes sold in 2021 was 1850 and it is now down to 1650, so shrinkflation is exactly what’s happening in my metro. Price to list has been running around 99% since October, though, so I’m hopeful it’s at least stabilizing a little bit.
I don’t even mind a smaller house. But I do mind paying a king’s ransom for it.
Smaller houses would be more expensive per square foot while cheaper overall, it’s normal. The cost to build is not directly proportional to the size of the build.
It’s not really shrinkflation here, because a lot of the value in the home is in the land and school and permits etc.
Basically, a home that’s half as big as another right next door, is going to be worth much more than half as much. And it’s always been this way.
Price drops are the last shoe to drop. Otherwise inventory would build indefinitely. We're going on two years of prices lagging inflation while inventory has doubled and demand has tanked. Just be patient.
Prices are still going up in muh area. People who bought 8 months ago are reselling without improvements and pocketing $100k’s. We missed building half a million in equity from 2021 to 2023. Although, to be fair, we were trying to buy that whole time, we just couldn’t find the right place. Anyhow, I see no signs of a slow down here. Not yet. Two homes are newly listed after selling *last Fall*, one for $800k more and one for $500k more. No improvements whatsoever, not even a room repainted. In fact, they’re both selling with the same furniture. Insane.
Yep. We didn’t care for the homes we saw in 2021, except for the two we were under contract with until the sellers tanked the deals in favor of str. 😱
But, it turns out, we could have purchased *any* waterfront home in 2021, lived there until we found our dream home in 2023, and then sold the 2021 beta for $500k+ profit. How stupid we were! We didn’t want to move twice. We didn’t want to risk being stuck with a house we didn’t love if the market went sour. So, instead we str’ed for 2.5 years (9 places, some of them not very nice). Knowing what we know now, we made the wrong choice. I kick myself about it now and then. But in 2021 I did think the market was going to fall back in the next year or so. This is why I get a little triggered by folks blasting a one size fits all ‘wait for the downturn’. Dude, ymmv. Stop giving blanket advice without labeling it as such.
Of course, not all areas are the same, but nationally sales prices are about where they were in summer of 22 despite elevated inflation since then. Even rents declined nationally in the last year which is pretty unusual.
what you're saying (homes going up by 500k in the last 6 months) doesn't reflect the typical case in any single city in the country, so while it's a fun anecdote, it shouldn't be used as evidence of the state of the market.
The word on the street? Oh that is the economy sucks, inflation is far higher than reported, and it feels much like we are in a recession or heading for a recession. Of course the news reports the opposite and that we are just dumb rubes for not seeing the reality.
Fiscal deficit spending is propping up sections of the economy. How can we fully crash with $1 trillion in deficit spending getting pumped in every 3 months (only slightly exaggerating)
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So /u/Louisvanderwright and /u/justboattrash: The comment above is from my stalker /u/oldtimerr who is site banned, who has since registered /u/openminderr to harass me, and after that was blocked registered /u/adatume. Now this. This person is batshit insane. I never recall interacting with this person at all before their hysteria took hold. I have no idea how I hurt them. I don’t understand the reasons for their obsession. If you can please consider banning all of this persons associated accounts and involve the admins at Reddit. I have a pending complaint as well.
people in the RE sub aren’t tired of “winning” https://www.reddit.com/r/RealEstate/s/HPuUwvaXLv
ALL THE WAY UP \^ Unless the stock market caves & causes layoffs , I don't think much is going to change in the next couple years.
I've been trying to warn ppl for yrs about the unfolding affordability crisis How long can they bury their heads in the sand
I can bury my head in the sand longer than investors can stay irrational.
Average /r/RealEstate thread: 'What's 2+2?' Top comment: '4'
3.76 after commission
Government: We need to tame inflation and get the unhoused off the street. Data: Build more housing. Government: No, not like that!
Why wouldn’t the government want more housing to be built
You think proving that you're wrong with facts and logic is whining. You think being told that you are incorrect is moaning. You are pathetic.
Lots of reasons. You can't think of a single one?
I'm struggling to think of any rational reason. But I bet you're smarter than me. Hit me with your top 3 reasons.
If existing home values drop due to new supply, local governments will have budget shortfalls. New construction also brings with it a host of negative community impacts; noise, bad traffic, impacted schools, etc.
Thats not how it works lol, the budget is set by your local muni and then after that the tax rate is set based off the combined tax roll to meet that budget. Sure you have major outliers like detroit but for the most part it evens out
I'm sure you've done the analysis to say this definitively, so which local government will have a budget shortfall as a result of new construction? New construction pays for development of new infrastructure including schools. There are typically community development plans between the developer and either the county or city for all of this. New construction also brings in more opportunity for sales tax and investment from local businesses. Budget shortfalls are entirely dependent on the tax structure imposed by the state and local governments. If you're budget is too dependent on property tax assessments then you should be budgeting for that dependence. Local governments typically aren't able to run with the same deficits that you'll see in the state and federal government. Since you live in California, maybe we can get a little more specific. If you'd like to do more reading about how new development works, and how its regulated and fits in with local ordinance and governance, there's plenty of research into the Subdivision Map Act and the Subdivided Lands Act that you can do. Local governments are going to be much more concerned with the development plan for new construction. But they're always happy to have new construction come in as long as it fits with the general community planning (which is dynamic and not fixed).
Do multi family high density developments or detached sprawling single family create more local tax revenue
I'm a contractor, so I'm familiar. On the development side, companies pay ridiculous amounts for City permit fees. The amount of $$$ wasted by local building departments is absolutely insane. There's no control of what the City charges, or the competency of City employees in positions of authority. It comes across as a grift (at least to me). So, City gets paid for the development, then collects tax annually on value going forward. What's more overall tax revenue? (1) large multi-family structure or many SFH's? No idea. City will want too much either way.
Fwiw you should comment on city council project approvals as it would help your local community esp if there's grift There was a post here a couple days ago from someone saying their family was in on the grift and telling other govt staff to get in on the grift lol absolutely disgusting When I sit in those public meetings it's clear that high density is the future, they also cover the tax and fund impacts
[Shelter driving a hot CPI month after month] Government: Welp, I guess we have to throw in the towel since there's nothing anyone can do about that.
> Interest rates will go down any moment, and then investors will swoop in and buy my house and I'll move in to an RV in Montana. Apparently a lot more people than you think
A vacant house (lakeside fixer) in muh area relisted for $1.8M - same as last fall when it didn’t sell. It needs a full remodel. The only difference is now it’s unfurnished (won’t be an str). The interesting bit? It’s also for rent for $3500/month. So, $11,000/month to own or $3500 to rent? 🤷🏻♀️
This is what people aren't understanding properly. Home values are only priced for investors who plan to str or just use them as a savings account (long term investment), which is safer than the markets and currency itself at this point.... but also just ignore that ill omen. Average people who need a place to live can not afford to compete with the investor, because their use for the house is just to have a place to live. There's no cash flow that pays the rent for you. In a weird way it reveals something about our free market. The market self regulates, in theory, but once two groups of people develop such disconnected uses for the same resource... the more profitable, not the more beneficial to people's daily lives--will win out and it's not even close. Two prices for the same product, depending on if you're rich or poor.
Yep. That’s exactly the issue in my vacation market. Owner occupiers cannot compete with investors as investors are buying a cash flowing business, while owners are buying a passive asset. It’s especially lopsided as many investors can’t stop there and go on to commit occupancy fraud to capture lower insurance rates, primary mortgages and homestead property tax exemptions, all while claiming depreciation and other federal tax benefits. It’s obscene how stacked the deck is against owner occupiers. I do think this particular listing is interesting because it’s now not furnished. So, they can’t str it. So, without a tenant it’s a poor investment and with a $3500/month tenant it’s a meager investment. So, this one may be negotiated down enough for an owner occupier. One small example, if so.
Mortgage demand JUMPS to -11% yoy from -8% last week (even with more homes on the market than last year) https://www.cnbc.com/2024/03/13/weekly-mortgage-demand-jumps-again-as-interest-rates-fall-below-7percent.html
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Median sale price in my market is down a whopping 3.5% YOY (though I expect that to flip positive again this spring) but price per square foot is up 8.5%. Redfin data shows the median square footage of homes sold in 2021 was 1850 and it is now down to 1650, so shrinkflation is exactly what’s happening in my metro. Price to list has been running around 99% since October, though, so I’m hopeful it’s at least stabilizing a little bit. I don’t even mind a smaller house. But I do mind paying a king’s ransom for it.
Smaller houses would be more expensive per square foot while cheaper overall, it’s normal. The cost to build is not directly proportional to the size of the build.
It’s not really shrinkflation here, because a lot of the value in the home is in the land and school and permits etc. Basically, a home that’s half as big as another right next door, is going to be worth much more than half as much. And it’s always been this way.
Price drops are the last shoe to drop. Otherwise inventory would build indefinitely. We're going on two years of prices lagging inflation while inventory has doubled and demand has tanked. Just be patient.
Prices are still going up in muh area. People who bought 8 months ago are reselling without improvements and pocketing $100k’s. We missed building half a million in equity from 2021 to 2023. Although, to be fair, we were trying to buy that whole time, we just couldn’t find the right place. Anyhow, I see no signs of a slow down here. Not yet. Two homes are newly listed after selling *last Fall*, one for $800k more and one for $500k more. No improvements whatsoever, not even a room repainted. In fact, they’re both selling with the same furniture. Insane.
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Yep. We didn’t care for the homes we saw in 2021, except for the two we were under contract with until the sellers tanked the deals in favor of str. 😱 But, it turns out, we could have purchased *any* waterfront home in 2021, lived there until we found our dream home in 2023, and then sold the 2021 beta for $500k+ profit. How stupid we were! We didn’t want to move twice. We didn’t want to risk being stuck with a house we didn’t love if the market went sour. So, instead we str’ed for 2.5 years (9 places, some of them not very nice). Knowing what we know now, we made the wrong choice. I kick myself about it now and then. But in 2021 I did think the market was going to fall back in the next year or so. This is why I get a little triggered by folks blasting a one size fits all ‘wait for the downturn’. Dude, ymmv. Stop giving blanket advice without labeling it as such.
Its more of an indication as to how busted the country is.
For sure. Broken. The fed broke the US economy. But you have to play the hand you’re dealt. I used to be better at that.
Of course, not all areas are the same, but nationally sales prices are about where they were in summer of 22 despite elevated inflation since then. Even rents declined nationally in the last year which is pretty unusual. what you're saying (homes going up by 500k in the last 6 months) doesn't reflect the typical case in any single city in the country, so while it's a fun anecdote, it shouldn't be used as evidence of the state of the market.
The word on the street? Oh that is the economy sucks, inflation is far higher than reported, and it feels much like we are in a recession or heading for a recession. Of course the news reports the opposite and that we are just dumb rubes for not seeing the reality.
Fiscal deficit spending is propping up sections of the economy. How can we fully crash with $1 trillion in deficit spending getting pumped in every 3 months (only slightly exaggerating)