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19% decline in new home sales for December

Discussion in 'Too Hot for Swamp Gas' started by WarDamnGator, Jan 11, 2019.

  1. oragator1

    oragator1 Premium Member

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    The article summed it up.
    Rising rates depressing interest, people reluctant to move because of historically low payments further slowing the wheels, and a 10 year boom that was bound to slow down. Those things tend to find equilibrium eventually.
    So I wouldn’t read too much into it quite yet, you will know by end of q2 or so if it is a real problem.
     
  2. danmann65

    danmann65 GC Legend

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    The youth dont want to drive anymore they dont want to own a home and have to mow a yard. I dont understand it. Maybe it's all economic but the darn kids after they get off my lawn they are going to change a lot of things we take for granted.
     
  3. citygator

    citygator Premium Member

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    I had kids late. Didn’t need a yard and house til 32 and didn’t have second kid and bigger house for 5 years after that. That seems normal now.
     
  4. danmann65

    danmann65 GC Legend

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    Germany, Japan and Russia all have negative birth rates. China, Europe and the U.S. are drifting that way. We may be close to peak population. Things are changing.
     
  5. surfn1080

    surfn1080 GC Legend

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    I do not think it is any secret that rates increasing was going to affect home sales. The hope is it should soften home prices which we have seen in the Central Florida area already.
     
  6. RealGatorFan

    RealGatorFan Premium Member

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    It's not the normal interest rates that is the issue, it's the rebound of home prices since the Great Recession plus historically-low interest rates. People have gotten used to the low rates and now that they are finally rising along with the extremely high prices, people are nervous. Case in point, why in the world would I ever buy a $1.5M outhouse in San Francisco at today's rates? Have you looked at the average price of any home in San Francisco? Or any metro area in the country? Unless you are Pelosi, you can't afford to buy a home in any major metro city in California.
     
  7. citygator

    citygator Premium Member

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    Hmm. Who wants to live in San Fran the houses are too expensive??
    BD15EE17-0726-45D1-B0E6-0171C079CA12.png
     
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  8. danmann65

    danmann65 GC Legend

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    I was walking thru my neighborhood in downtown deland when I saw an open house sign. I went and walked thru it. It had had the crappiest tile work I have ever seen and the place was filthy. They wanted 179k for a house that was bordered on two sides by a cement plant. I went home and saw that someone had bought it for 75k about 6 months ago and did some crappy renovations. That house will be on the market for awhile.
     
    Last edited: Jan 13, 2019
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  9. gatorknights

    gatorknights GC Hall of Fame

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    Ah, another "Flip This House" genius. I'll bet they didn't cover how to valuate and overcome the external obsolescence factor that the cement plant. You can't put carpet/tile/vinyl and paint over the adjacent property.

    I did an FHA appraisal in Apopka years ago that backed up to a landfill. You go into the back yard and have a beautiful view of a mountain of garbage. The realtor didn't say anything about it in their marketing materials, but you can see the hill of garbage and there is no escaping the stink factor, especially in July. Needless to say, the lender and FHA would not finance the house because of that, and when I reported it complete with pictures and aerial maps, I was attacked mercilessly by dooshbaig realtard and mortgage joker. Since the Maitland Blvd extension, the landfill was closed for operations, but there is still a mountain of buried garbage right out the backyard, so it now has a view of a stinky hill and now the added bonus of the traffic noise of a busy expressway.

    Had that house closed when I appraised it, not mentioned the external obsolescence and "hit the magic number" that realtor and mortgage broker demanded, it would have artificially inflated the market due to fraud on my part. Sorry Charley, no dice.
     
  10. VAg8r1

    VAg8r1 GC Hall of Fame

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    Market is almost (not quite) like that in the DC metro area. A friend of ours sold her house in October, 2 bedrooms, 2 bathrooms for $530,000. Sold after one day on the market at the asking price. Small house but actually very nice on a nice lot (close to one-half acre) in a nice neighborhood. We saw an ad for a house in Alexandria, VA listed at $495,000. Two bedrooms, 1 bath on a small lot. From the photo it looked kind of dumpy. I suspect it may be sold as a tear down with the new owners building a completely new home.
     
  11. WarDamnGator

    WarDamnGator GC Hall of Fame

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    Lets remember though that talking about outrageous home prices in Metro areas in this discussion is a bit off course ... not many new houses are being built in the cities. The bread and butter for home builders has always been these semi-rural areas, but still close to major cities, where they can buy 100s or 1000s of acres of farm/ranch/raw land and build 3 or 4 houses per acre, at a price that they sell fast but still make a lot of money. I tend to think that new construction is slightly more expensive to buy than a "used" home that is similar, but not so much that it's unfordable or priced out of the market.
     
  12. danmann65

    danmann65 GC Legend

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    My neighborhood is super hot right now, but houses that were worth 120k 6 months ago are not worth 220k now.
     
  13. gatorknights

    gatorknights GC Hall of Fame

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    That is eerily similar to the run-up that led to the crash of 2008. And by eerily similar, I mean exactly identical. ;) With very rare and few exceptions, "values" do not appreciate almost 100% in 6 months. "Prices" might, like in an artificial run up, but "values" do not, unless there has been a monumental change in the economic conditions in the subject market area. It is important for everyone to understand that price does not always equal value. The old saying is "price is what you paid, value is what you got". If price always by definition equaled value, then by definition nobody ever paid too much or too little for anything ever in the history of human commerce. I'm pretty sure all of us here have gotten a great deal or gotten hosed a time or two in our lives. :)
     
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