Real estate prices......are they going crazy where you are too?

I know rates have dropped, but I find some of the prices I'm seeing here in OKC lately kind of bonkers. We aren't on the coasts and typically don't see the boom/bust cycles associated with housing prices in the largest markets (we are like the 25-26th largest city in the country, 1.4 million people for the entire metro which drops us down to around 40th for the combined statistical area).

For example, this new neighborhood on the south side of the river from downtown.......

https://www.wheelerdistrict.com/home/

You can buy actual historic properties in Mesta Park, Crown Heights, Edgemere Park........like listed on the National Historic Register, just a few miles north of downtown instead of south and to the west (where everything to your south, east, and west is properties worth 1/8th of what you're buying). In the same price range as stuff like this or other new properties I'm seeing.

In other areas, in some of the "desireable" neighborhoods, I see stuff like a 1400 sq ft 3/2 bungalow, with no garage with asking prices of $300k. This is insane to me. Oklahoma is a cheap state to live, but the salaries are also lower. 

The only thing I can think of is that OKC had the lowest unemployment numbers in the country before the pandemic and we are still 2nd or 3rd best in the country since it's started. 

San Diego is still as nuts as ever. Maybe even more so. ~60% increase in my house value in the last 6 years. Average time on market in my zip is 6 days and for a few months the average, average, downpayment was in the 90% range which means almost everything is being bought in cash. In a neighborhood where a 1200sqf house that needs gutting if it has a view is 900K. 

Yeah, prices are surging here in my Chicago suburb. I don't quite understand it fully, but I think there are a few contributing factors that are not universal everywhere: 

• Rates are low (FACT)
• People in the city are looking to get out of the city because of social unrest and they want more space. With a ton of leases up in the summer and fall, people are not renewing (CONJECTURE)
• With more places being WFH, and somewhat permanently, they no longer need to be in the city/close to work

I'm not sure where/how school districts are impacting this right now, if they are any differently. 

EDIT: Important to realize here that the floor in a good neighborhood is going to be around $350k. That buys you a teardown. Which is insane, these teardowns are often really nice.

mtn (Forum Supporter) said:

Yeah, prices are surging here in my Chicago suburb. I don't quite understand it fully, but I think there are a few contributing factors that are not universal everywhere: 

• Rates are low (FACT)
• People in the city are looking to get out of the city because of social unrest and they want more space. With a ton of leases up in the summer and fall, people are not renewing (CONJECTURE)
• With more places being WFH, and somewhat permanently, they no longer need to be in the city/close to work

I'm not sure where/how school districts are impacting this right now, if they are any differently. 

 

 

I hope this is all true, because I live in the burbs and want to move closer into the city.  Right now I don't want to put my house up for sale though due to all of the uncertainty.  Actually, I don't want to BUY with the uncertainty, but selling leads to that etc.

A newly renovated 3 bedroom 1,300 sq ft ranch with a finished basement and 3/4 acre of land near us just sold for $425,000.   We’re 40 ish miles from Boston and in a town with two commuter rail stations.   It’s crazy. 

Last fall it took us 3 months to sell a house, and we had 1 offer.  The same neighborhood now has all houses getting 10+ offers in the first week and selling immediately.  
 

I live in a "transitional" area of Atlanta. Stuff that was $110k a few years ago is now selling for $200k in less than five days on the market. We renovated our house last year and just had it appraised to refinance into a normal mortgage. The appraisal came back at $340k! Blew my mind.

New townhomes around the corner are already selling for $349k, the first new housing development in our area in 20 years is advertising "affordable" housing at mid $300s, and just outside our city limits new houses are selling at $450k.

I'm minutes from downtown Atlanta and on near several main arteries to get in/out of the city (including rail). Traffic is so bad in Atlanta that being close to the city now outweighs moving into what was a "bad" area a few years ago. We've been here 15 years, my wife grew up in the house we bought from her parents, so at least we can claim OG status.

I just sold my house in 2 days in Southern NJ for 50k more than we were going to list it for last year. Realtor said inventory is low, rates are low and that is increasing the prices.

Finding a new house is a whole other challenge though

Meanwhile - the house we sold two years ago came back on the market. We sold it in about 3 days in April 2018. The new owners put it up for sale in June for 8% more than they paid. A month later, they dropped it to right about what they paid. Last week, the listing was pulled. The house, if anything, looks better than it did when we sold it due to some interior paint combos I wish I'd tried.

I've been Zillow shopping for houses in VT and NH.  Nothing seems too out of the ordinary, there.  In fact, VT seems very reasonable.

In reply to Keith Tanner :

Recent appraisal by the bank has my home $240,000 higher than last year. 
 

It's simple.  United States is 23 trillion dollars in debt and we aren't earning enough to pay that off.  Can you say inflation?  
inflations makes assets worth more.  Stock prices are up many many times earnings driven up by management buying back shares. Gold and precious metals are at record highs. All that is left is real estate. 
We've been here before. Post Vietnam America never paid for that war by increasing taxes instead we inflated our way out of that debt. Now we are in the same situation. It's also how we dealt with WW2 & 1 

we just did a HE line of credit. Without even looking at the house they appraised us at $300k, which is about $50k more than 2 years ago. 

frenchyd said:

In reply to Keith Tanner :

Recent appraisal by the bank has my home $240,000 higher than last year. 
 

It's simple.  United States is 23 trillion dollars in debt and we aren't earning enough to pay that off.  Can you say inflation?  
inflations makes assets worth more.  Stock prices are up many many times earnings driven up by management buying back shares. Gold and precious metals are at record highs. All that is left is real estate. 
We've been here before. Post Vietnam America never paid for that war by increasing taxes instead we inflated our way out of that debt. Now we are in the same situation. It's also how we dealt with WW2 & 1 

An appraisal is not a sale. It doesn't matter what the appraisal of the house I sold two years ago is, what matters is that nobody wants to buy it for what it sold for two years ago. That's the true market talking.

Crazy high here in Easton right now. The other side of the twin I live in sold for more than asking in one day on the market last October. Nearly 3 times what I paid for my side too. I think the demand is going to drop soon due to decreased incomes from Covid though.

Keith Tanner said:

frenchyd said:

In reply to Keith Tanner :

Recent appraisal by the bank has my home $240,000 higher than last year. 
 

It's simple.  United States is 23 trillion dollars in debt and we aren't earning enough to pay that off.  Can you say inflation?  
inflations makes assets worth more.  Stock prices are up many many times earnings driven up by management buying back shares. Gold and precious metals are at record highs. All that is left is real estate. 
We've been here before. Post Vietnam America never paid for that war by increasing taxes instead we inflated our way out of that debt. Now we are in the same situation. It's also how we dealt with WW2 & 1 

An appraisal is not a sale. It doesn't matter what the appraisal of the house I sold two years ago is, what matters is that nobody wants to buy it for what it sold for two years ago. That's the true market talking.

agreed, but I'd be shocked if our place didn't sell in a couple days at $310k.

Keith Tanner said:

frenchyd said:

In reply to Keith Tanner :

Recent appraisal by the bank has my home $240,000 higher than last year. 
 

It's simple.  United States is 23 trillion dollars in debt and we aren't earning enough to pay that off.  Can you say inflation?  
inflations makes assets worth more.  Stock prices are up many many times earnings driven up by management buying back shares. Gold and precious metals are at record highs. All that is left is real estate. 
We've been here before. Post Vietnam America never paid for that war by increasing taxes instead we inflated our way out of that debt. Now we are in the same situation. It's also how we dealt with WW2 & 1 

An appraisal is not a sale. It doesn't matter what the appraisal of the house I sold two years ago is, what matters is that nobody wants to buy it for what it sold for two years ago. That's the true market talking.

Our appraisals in one area of the city are whacked because a big non-profit decided they wanted a parcel of land and paid the owner WAY over market for it. Like double. Then they overpaid for a tiny house that was nearby, way over what it was worth. So now all the houses around those parcels are supposedly worth more, but no way anyone would pay those inflated prices.

It feels very 2007-ish, to me.  Prices are high, everyone is saying it can't possibly drop, and this is just the new normal.  But I don't care how many $400k+ houses change hands, eventually you come up against the wall of having to actually pay for it with real money, and for that you need to look at household incomes, and to a lesser extent, corporate earnings.  Everyone can close a deal right now, that doesn't mean they can pay for it long term.  Similar to bragging about "buying" a $50K car.  There's a difference between, "I wrote a check to the dealer for $50K", and "I have the ability to get financing for $50K", and one is a lot less impressive than the other. 

It is possible we can inflate it all away with the Fed buying everything (incl. junk bonds....), and the Dept. of the Treasury printing money to support that, but we can't just inflate asset prices, we would eventually need to inflate (raise) incomes/wages/salaries to match.  And I haven't seen any evidence of that so far.  If anything, just the opposite, we took a 7% pay cut at work last week.

Going to be very interesting to see what the next 12-24 months bring.  As long as most people keep the money coming in, we might be OK.  If the income stops, so does the financing game of musical chairs.

In-berkeleying-sane in my area. I live in a modest little raised ranch and have seen the price of houses in my hood go up by $100k since Covid struck.

It makes no sense. To me at least. Must make a lot of sense to those buying.

Housing is insane around here. 

I paid $48k for my first house in the late 80s. It was 1000 sqft on a 7200 sqft lot. No garage, no central AC, no real appeal other than location. Due to the "Grand Oak" on the lot there was no room to put a larger house or shop on it which was one of the reasons I moved. I sold it for $270K. 5 years later, that same house, still with no garage and no central AC, recently sold for $430k. 

Any house under $200k frequently sells within 24 hours no matter where it is and on occasion for more than the asking price as people get into a bidding war over them. 

Apartments are renting for over $1k for a 1 bedroom in a E36 M3ty neighborhood. If you want a nicer area or in the city they are $1500 and up. 

There just isn't enough housing available to absorb the number of people that are moving to the area. According to the last report, 26 people per day are moving to the area. If you include births and deaths, it's net increase of 34 people a day.

Keith Tanner said:

frenchyd said:

In reply to Keith Tanner :

Recent appraisal by the bank has my home $240,000 higher than last year. 
 

It's simple.  United States is 23 trillion dollars in debt and we aren't earning enough to pay that off.  Can you say inflation?  
inflations makes assets worth more.  Stock prices are up many many times earnings driven up by management buying back shares. Gold and precious metals are at record highs. All that is left is real estate. 
We've been here before. Post Vietnam America never paid for that war by increasing taxes instead we inflated our way out of that debt. Now we are in the same situation. It's also how we dealt with WW2 & 1 

An appraisal is not a sale. It doesn't matter what the appraisal of the house I sold two years ago is, what matters is that nobody wants to buy it for what it sold for two years ago. That's the true market talking.

I'm in a position where I don't have to sell. In fact have no intention of selling.  Houses around me are selling in a few days if on the lake  and a few weeks if off. Lake homes are in the millions. 

Some of that is driven by desire to "buy" recreational property. Some by rapid appreciation. And some just by snob appeal. 
 

Around here everything has doubled in the last 5 years. Rent is worse. We have nearly the lowest avg income in the state, and about the highest real estate not counting resort towns. Unless a major correction happens in the next few years, I don't see myself buying anything locally.  
We moved here in 2001 and things were on the up, then the 08 thing brought prices back down to 01 levels. Now it seems to be 50% higher than peak 07/08. Nuts is the right word. 

In reply to frenchyd :

His point was, something is only worth what someone is willing to pay. Let's say you have a classic Jaguar that appraises for $100,000. But the most anyone is willing to pay is $50,000. 

So the car is not "worth" $100k, it's worth $50k. 

Yes.  The "Zillow estimate" for my house has gone up about $40K in the last year or so - about a 25% rise.  Granted, I've been predicting prices of the houses in my area to go up for awhile now based on it being reasonably quiet and close to highways/services.  Oddly enough, my taxes have barely gone up in a few years (exactly the same as last year).  They are perfect little DINK starter houses, as long as you don't have kids (schools are bit crappy).

A house down the street from me was listed a couple of weeks ago.  Not 100% sure of the asking price, but I think in the $200K range. Sold in less than a week.

I have no intention of selling anytime soon or in the next couple of decades or more.  However, the increase in values does make the idea of doing a major renovation easier to justify. 

No idea.  Not selling, not buying.  Don't care. 

The county assessment keeps going up, so I suspect prices are going that way also.

I hear rates are low.

We just sold our old house after having it sit too long while we got it sorted out and were heading towards renting it.

Our realtor put it in these terms; normally, our area has something like 17 or 19 months' worth of inventory. Right now, it has about two.

We probably slightly underpriced it, but had eight offers over asking in the three days it was on the market. The highest offer actually said they would increment their base offer by $5k any time another offer was higher up to 12% over. (We eventually reached an impasse on concessions and sold to a calmer couple for 7% over asking)

There's not enough available housing here, and there are plenty of people who can afford it. However, we've also got just as much or more shortage among people who can't afford what houses are going for here.