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Housing market

BryceC said:
I think prices will come down. the price of lumber and everything will drop once mills open back up to full capacity and then the cost of new construction will drop. I'm very curious to see what we could get for our house. I had a friend who sold his house in Ankeny in less than a day. I think we could slay but I never want to move again in my life. I hate moving.
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This article was enlightening regarding lumber prices. It makes the case that it’s not an issue of mills running at a lower capacity. It’s that they’re at max capacity and it’s too costly/timely to increase capacity to meet demand. Apparently lots of places went belly up in the 2008 crash because they had previously ramped up to meet demand. Now you have less mills, and the ones remaining won’t/can’t expand.

I think prices will come down (and already have to some degree). But it will be interesting to see how long that actually takes.


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I don't see a 2008 situation happening. People are buying these houses with low interest rates in a pretty strong economy.

As others have said, banks have been using higher lending standards as well.

It reminds me a little of people predicting a farm crisis when farmland shot up to around $10K in a lot of places, but we've been at that level for nearly a decade without a huge crash, largely because this growth wasn't being done via high interest loans.
 
dmclone said:
It's ridiculous and rarely gets talked about. In the DSM metro all you hear about is things like "Urbandale has cheap property taxes". Yes they do, but only when you compare it to other places in the DSM metro. My taxes this year will be $6,300 on a $300k assessment. This is after Polk county promised lower property taxes when they raised the sales tax to 7%.
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at least you get drinkable water. high performing schools. forward thinking leaders. oh wait....
 
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Al_4_State said:
I don't see a 2008 situation happening. People are buying these houses with low interest rates in a pretty strong economy.

As others have said, banks have been using higher lending standards as well.

It reminds me a little of people predicting a farm crisis when farmland shot up to around $10K in a lot of places, but we've been at that level for nearly a decade without a huge crash, largely because this growth wasn't being done via high interest loans.
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Are “ARM’s” even a thing anymore?
 
Gunnerclone said:
Are “ARM’s” even a thing anymore?
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Only if you can’t qualify for secondary market loans. They are out there but it’s a small percentage.

I personally think we see a slight pull-back on the market once all the stimmy money has worked through and people go back to spending money on travel, entertainment, and other things. For a lot of households we are talking a total net swing of up to $10,000 extra that some households have just based on the items above, and they’ve chosen to capitalize that money into their home. Now they have a newer home with higher insurance, taxes, toys, upgrades, and when that $10,000 swing goes the other way it could cause some pain.

I don’t think we see carnage like 08 but I do think this is a “mini bubble.”
 
dmclone said:
It's ridiculous and rarely gets talked about. In the DSM metro all you hear about is things like "Urbandale has cheap property taxes". Yes they do, but only when you compare it to other places in the DSM metro. My taxes this year will be $6,300 on a $300k assessment. This is after Polk county promised lower property taxes when they raised the sales tax to 7%.
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Politician talk. Our local town routinely said they were lowering our property taxes. They would shave the mil rate by 0.25% but the assessments went up 10%. They knew the assessments flew up and tried to play the word game of lowering them since they lowered the mil rate a tiny amount but overal collections jumped 8-9%.
 
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farminclone said:
Only if you can’t qualify for secondary market loans. They are out there but it’s a small percentage.

I personally think we see a slight pull-back on the market once all the stimmy money has worked through and people go back to spending money on travel, entertainment, and other things. For a lot of households we are talking a total net swing of up to $10,000 extra that some households have just based on the items above, and they’ve chosen to capitalize that money into their home. Now they have a newer home with higher insurance, taxes, toys, upgrades, and when that $10,000 swing goes the other way it could cause some pain.

I don’t think we see carnage like 08 but I do think this is a “mini bubble.”
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Not true. People take 10/1 -15/1 ARM can get other loans, but are betting they won't be in the home for extended period of time. The average person doesn't live in the same home for more than 9 years.
 
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The amount of Down payments on many houses is crazy. A high percent of homes we go through are 5% down, a few even less. FHA backing to guarantee the loan. I don’t see their financials but if you struggle to come up with ten grand for a down payment then you have a mess. Quite often, the realtors are trying the trick of having the seller pay 3-5% closing costs. Well if the person has 5% down and have to have the seller kick in 3% for closing costs, there really is no skin in the game for the buyer.

It won’t be 2008 since there were several factors at play there, but the prevalent talk in the appraisal world is be prepared for the foreclosure wave coming.
 
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2forISU said:
ARMs are still a thing...
www.usbank.com

Current mortgage rates | Mortgage rates today | U.S. Bank

See current U.S Bank mortgage rates for our various home loan products.
www.usbank.com
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Yes, they serve their purpose. There are several people who Change jobs/move every 3-5 years. Or they are sitting on a high rate due to poor credit of have PMI. You will see these situations use 5 year ARMs somewhat regularly. They look at the low rate and figure if they won’t be there after 5, save the money.
 
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Al_4_State said:
I don't see a 2008 situation happening. People are buying these houses with low interest rates in a pretty strong economy.

As others have said, banks have been using higher lending standards as well.

It reminds me a little of people predicting a farm crisis when farmland shot up to around $10K in a lot of places, but we've been at that level for nearly a decade without a huge crash, largely because this growth wasn't being done via high interest loans.
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I actually think the probability is really high that it happens again fairly soon. Even though people are borrowing money at incredibly low rates they are ultimately house poor. You can talk about "higher lending standards" all you want but I know what I'm pre approved for and I'm not comfortable purchasing anything close to that amount. Using farmers as an example doesn't really work since they are continuously getting bailed out...
 
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BCClone said:
Yes, they serve their purpose. There are several people who Change jobs/move every 3-5 years. Or they are sitting on a high rate due to poor credit of have PMI. You will see these situations use 5 year ARMs somewhat regularly. They look at the low rate and figure if they won’t be there after 5, save the money.
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Correct-they are hedging their bet for whatever reason.

Commercial is basically all ARM's
 
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2forISU said:
Not true. People take 10/1 -15/1 ARM can get other loans, but are betting they won't be in the home for extended period of time. The average person doesn't live in the same home for more than 9 years.
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www.veridiancu.org

Mortgage Purchase and Refinance Rates | Lending

View our 15-year and 30-year mortgage loan rates for new purchases and refinancing. Get prequalified for a mortgage loan with Veridian today.
www.veridiancu.org www.veridiancu.org

Your argument about length of time in the home would make sense if the ARM rates were cheaper than the secondary market fixed rates, but they aren't.
 
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Heard a story from a guy on my bowling team, he works for his buddy's construction business as a part-time second job. Anyway...the company had agreed to build a ~375k house around the CR metro area a while ago but now its going to cost almost ~600k to build because of materials cost. Ouch!
 
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I'm most likely going to have to buy at my next project site since it's a relatively rural area (Mt Vernon, WA). Not looking forward to being a first time buyer in this market. I've got no issue renting (been doing it for 13+ yrs now) but in a relatively small town there aren't many options (especially when you are used to being in much, much larger markets).

Maybe things will calm down by September?
 
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