Housing market

[ClonesFTW]

Just saw a stat that 26% of all single family homes sold in June 2023 were purchased by investors.

2010: 8%
2000: 6%

That is an alarming increase and is going to continue creating a massive problem with housing affordability.

 

[SCNCY]

Just saw a stat that 26% of all single family homes sold in June 2023 were purchased by investors.

2010: 8%
2000: 6%

That is an alarming increase and is going to continue creating a massive problem with housing affordability.

I wonder if that's just institutional investors and similar companies; or if it includes smaller individual investors?

 

[ClonesFTW]

I wonder if that's just institutional investors and similar companies; or if it includes smaller individual investors?

 

[Clark]

I wonder if that's just institutional investors and similar companies; or if it includes smaller individual investors?

I think the rise of the house flipping shows has given rise to more people trying to make money flipping houses.

 

[Clark]

I'm sure I'm missing a reference somewhere.

 

[CloniesForLife]

Just saw a stat that 26% of all single family homes sold in June 2023 were purchased by investors.

2010: 8%
2000: 6%

That is an alarming increase and is going to continue creating a massive problem with housing affordability.

Everyone thinks they can AirBNB or flip a house (because they watch DIY videos) to wealth

 

[SCNCY]

I think the rise of the house flipping shows has given rise to more people trying to make money flipping houses.

True, and don't forget the Instagram and other social media personalities.

But the small investor side makes sense, and was something that I was looking at doing in the late 2010's when I moved out of my house and decided to rent it out. Looking back at it, I'd probably never buy a single family home to rent. I'd want at least a three/fourplex to start.

I assume a lot of the current investor purchases are due to people starting in the early to mid 2010's and are now able to ramp up their efforts due to the cashflow they're producing from their early investments.

 

[Cyinthenorth]

I understand the tongue in cheekness. But that is plenty enough for a down payment

 

[SCNCY]

I'm sure I'm missing a reference somewhere.

I think it's criticism of people who say that if you want to buy a house, stop buying your daily $5 coffee and use it for a down payment. Despite that $5 coffee isn't really that meaningful in the grand scheme of things when talking about housing prices.

 

[Gunnerclone]

I think the rise of the house flipping shows has given rise to more people trying to make money flipping houses.

Is this a throwback post from 2004? Feel like we’re way way on the backside of the “house flipping show” wave at this point.

 

[CloniesForLife]

Is this a throwback post from 2004? Feel like we’re way way on the backside of the “house flipping show” wave at this point.

I think the rise of AirBNB is probably more to blame

 

[Sigmapolis]

I understand the tongue in cheekness. But that is plenty enough for a down payment

On an $83,400 house (and yes yes I know 20% down isn't always required but it helps).

 

[SCNCY]

I understand the tongue in cheekness. But that is plenty enough for a down payment

Depends on what you put down. At 20%, that's an $83,400 house; $166,800 if you only put 10% and decide to pay PMI.

And that's at the end of 10 years of saving. So you'd be renting during that time and not earning any equity.

 

[Gunnerclone]

On an $83,400 house (and yes yes I know 20% down isn't always required but it helps).

Comes with an eat-in bedroom though.

 

[Sigmapolis]

Comes with an eat-in bedroom though.

I'm not sure I could get a cardboard box in an dark alley for $85,000 most places.

 

[Clark]

Is this a throwback post from 2004? Feel like we’re way way on the backside of the “house flipping show” wave at this point.

Nah, 2004 was storage wars culture where people decided they could make a quick buck buying up abandoned storage containers.

Flip or Flop started in 2013
Property Brothers started in 2011
Fixer Upper started in 2013.

So it makes sense that the 2023 stat is much higher than the 2010 stat.

 

[JP4CY]

I think the rise of AirBNB is probably more to blame

Yep. Something I may consider in a few years for a second home/rental.

 

[SCNCY]

Nah, 2004 was storage wars culture where people decided they could make a quick buck buying up abandoned storage containers.

Flip or Flop started in 2013
Property Brothers started in 2011
Fixer Upper started in 2013.

So it makes sense that the 2023 stat is much higher than the 2010 stat.

Also coincides with very low housing prices as well.

 

[SWCy13]

I think the rise of the house flipping shows has given rise to more people trying to make money flipping houses.

This is 100% correct. I've been in so many dog-**** flips in the past 5 years I've been appraising houses. You have all of these online people like Kris Krohn & the BiggerPockets BRRRR people telling everybody how easy "passive real estate" investing is. Not to say that it can't be financially rewarding, but it seems like everybody thinks they're going to become moguls flipping houses without basic understanding of how real estate works. Some people obviously do it well, but that's maybe 1 in every 10 that I see.

The lack of inventory is a HUGE problem. Year to date there are about 600 fewer houses sold in our MLS area (Northeast Iowa, Waterloo/CF as the largest "metro" area) compared to last year at this time. It's a pretty rural market obviously, so I'm sure in bigger markets, the problem is exacerbated. Almost anything under $300k is still gone in a day or two & selling above listing prices. Values have held strong with no signs of dropping here.

All of this is with 7% + percent mortgage rates - if those go down, even to 5.50% which I've seen projected by next year, it's going to be even worse for home buyers to land a property. It's much easier for investors to cash flow at those rates vs the 7-8% rates they can get now.

It's certainly not a healthy housing market, but I don't know what the answer is at this point.

 

[Cyinthenorth]

Depends on what you put down. At 20%, that's an $83,400 house; $166,800 if you only put 10% and decide to pay PMI.

And that's at the end of 10 years of saving. So you'd be renting during that time and not earning any equity.

PMI, yeah, I understand that. Wife and I just recently decided to bite that bullet. Only wound up adding $43/month to our mortgage payment.