After seeing a couple of recent threads regarding interest rates, I thought I'd post this.

A friend of mine just finished buulding this spec house on a 10,000 square foot lot in a small town about 30 miles south of Seattle. He listed it last Friday for $875,000. He had three full price offers, and three over list price offers by Saturday. He signed a cash offer with no contingencies Sunday morning for 1.1 million.

If interest rates were around 3% you could tack on another 200K or so.

This just doesn't make sense to me. Are we entering the first stages of hyper inflation?

Wonder what it cost him to build...

I think we are beyond the first stages of hyperinflation at this point.

Have you notice all the commercials lately with cash offers to buy any dump that looks like a house Probably something to do with Blackrock and Vanguard needing housing for our new guest.

The company that has the remainder of the loan on my rent house sent me a letter offering to refinance it sight unseen just signed here for 100k more than I paid for it. I'm sure I could probably sell it for more if they are making that offer in the mail. At the rate I'm paying it off it would almost all went in my pocket.

I do wish I didn't rent it to my in-laws. If it were anyone else I would have sold it before rates went up and the market was hotter.

Down here the market is crazy. Rentals are a hot item but a lot of spec houses are burning up spec builders bank accounts on interest of contstruction loans

I was quoted $620,000.00 for a run of the mill 2500sq/ft house about 8 months ago. 5 months ago the price was $530,000.00 from a different builder.

An excerpt from an article in Barron's yesterday.



"Homes listed during the week ending April 20 stand to draw strong demand and a quicker sale, according to a Realtor.com analysis published Thursday. These conditions mean homeowners have a little extra pricing power: the typical home this week historically has been listed for 1.1% more than average, according to the online home listings company."

https://www.barrons.com/articles/when-best-time-week-sell-house-3525ea79?mod=hp_LEADSUPP_2

Seen a commercial in Vegas saying just that close in 5 days beat any offers.

waggler- No disrespected intended but that house is 10,000 square feet...? Does it have some sort of dog leg in the back that can't be seen because I'm not getting a 10,000 sq foot vibe from that. A true 10,000 sq foot house in my Sioux Falls metro would be at a minimum of 4 stall garage, if not 6 and probably pushing $2 million in price.

Nationwide there is a significant housing shortage and even bigger in the middle income earner ranges. Balance that shortage with what is still modest interest rates, and buyers with enough cash to put down and a willingness or desire to carry large debt and this is where we are at. Potential home owners have always been told that owning a home is a good way to earn equity. a solid investment and home owner debt was or is not considered "bad" debt. When one crunches numbers in our last decade era that sales pitch is not as accurate as it was 20-30 years ago. One of several reasons for high credit card debt, long loans on vehicles etc. is that allows more money to spend on housing. I worked with many couples doing taxes. People would get all excited about saving a few dollars on interest rates, but never seemed to give a lot of thought to all the other costs associated with home ownership, RE taxes, points, insurance, maintenance etc. Lots of hidden costs in owning property. Shoe string buying makes those investments higher risk than many think about.

Bryce

Are you trying to get that poor boy divorced?

10,000 square foot LOT! Not house

Ha ha ha. I read and thought the same exact thing as NonPCed. Then saw your response Jbyrd and went back to read it again. Yes my reading comprehension was lacking and pride took a hit.

Well, there you go!!! Maybe I should move my larger lot and probably similar sized total sq footage house (single level on ground and finished basement) to the Puget Lowlands of WA and double (or more) my money.

Then again, would I want to live 30 miles or so away from Seattle. No, I don't think so. Waggler and the minority sane people in the Puget Lowlands are saints. May God continue to protect them against the general lunacy located there...

Goes to show how 1 million $ isn’t that much money anymore. And getting less by the day

Hate to be one of those guys,,,,,,,but the farther you dive down the “bitcoin” rabbit hole

The more it makes sense,,,,

P.S. We generally don't talk or at least lead with lot sizes unless we're talking "acreage" type of residential living. The lead in the real estate rags around here is always in square footage of finished living space of the house.

I am no economist but my property tax is getting ridiculous. Doesn't help much to contest new assessment's. when it all fell in 2008 or whenever it was it did not decrease. Who woulda thought???

Spent 3 days in San Diego this week. The conversation turned to real estate prices and rental cost. The 30 some year old gentleman at our table said he was paying $3100/month for a 1 bedroom apartment and still had to drive 40 mins one way to work each day.

He said he and his wife hoped to have children one day, but couldn’t afford it. I just don’t see what keeps people in these areas.

I don't know where this guy's company is located, perhaps multiple locations, but there are fewer and fewer full time jobs and more multi-job "gig economy" people trying to get by. The tidbit about a third-party company helping people over an entire month to pay rent (and I'm sure getting a commission to do so) is an interesting twist on things. The de-valuation of the currency over the past 5-10 years has been amazing...

https://www.youtube.com/watch?v=bhagdx3ARj0