Im bowing out

[Deleted member 28227]

we signed our contract on our new build at the end of march 2021. we closed middle of december.

base price for the house when we signed last march was $484,950. now of course that's before you have to choose all your features, lighting, cabinets, floors, paint, fixtures, etc etc. so the real price of the house is ultimately much much higher.

just checked the base price for our home right now from the builders website: $549,950

65k base price increase in like 10 months.

obviously that doesn't necessarily equate to equity we theoretically have in the house after barely 2 months of ownership, but holy shit.

Purchased 1970 -> 30K
Remodel 2004 -> 400k
Sale price 2021 -> 3,125,000

 

[LousyResident]

We have all but given up too, it'll happen... I think. I'll be curious to see how rite hikes will affect things. Everybody keeps saying that there will be no correction which is exactly what they said before the last one. Just my gut feeling.

A 1% rate hike from 3.5% to 4.5% results in less than $300/month payment increase on a $500K, 30 year mortgage. I bet that isn't enough to matter to most people.

 

[Bigjay73]

A 1% rate hike from 3.5% to 4.5% results in less than $300/month payment increase on a $500K, 30 year mortgage. I bet that isn't enough to matter to most people.

The fact that 4% seems like a high interest rate is mind boggling. My last mortgage was 6%

 

[Deleted member 28227]

The fact that 4% seems like a high interest rate is mind boggling. My last mortgage was 6%

My mom always brings up that she bought her first house for 9.75% and thought it was a steal.

 

[Nick87]

A 1% rate hike from 3.5% to 4.5% results in less than $300/month payment increase on a $500K, 30 year mortgage. I bet that isn't enough to matter to most people.

Do you think that 1% is all were going to see? Serious question. I think it will make a difference there's people who I have a pretty good idea what they make. They go out to eat and vacation a lot more than I do. They've got to be living check to check so I would think that $300 would be a big difference. Especially with literally everything else going up in price, which probably equates to more than $300. I have no data to back this up just what I see going on.

 

[BigHornRam]

A 1% rate hike from 3.5% to 4.5% results in less than $300/month payment increase on a $500K, 30 year mortgage. I bet that isn't enough to matter to most people.

Borrowing half a million on a house! I don't care what the interest is, you still have to pay the principle back.

 

[JohnCushman]

The house I bought 9 years ago that appraised for $114K now appraises at $265K. I'm doing some work on it and selling ASAP and you better believe I'm going to take advantage of it.

 

[Deleted member 28227]

Borrowing half a million on a house! I don't care what the interest is, you still have to pay the principle back.

Is it sad that I'm like 500k what a steal...

 

[SwaggyD]

A 1% rate hike from 3.5% to 4.5% results in less than $300/month payment increase on a $500K, 30 year mortgage. I bet that isn't enough to matter to most people.

That is true, but you still lose $64k in buying power with a 3.5% rate.

 

[seeth07]

times might be changing. On my flight home on Monday, I sat next to a realtor from Texas who just got off the phone with an upset client because the appraisal came in way lower than his accepted offer price. He had to back out of the deal because he therefore couldn't get the financing.

The realtor went on to state that in the last two weeks, this is the third time this has happened to him where the bank appraisal came in significantly lower indicating that the banks are instructing the appraisers to stop overvaluing the homes due to the crazy market that has been set.

Yesterday I talked with a close friend who is a realtor. He had one instance of this happening in the last week.

The change in the market might be coming and its going to result from these accepted offers no longer going through due to financing

 

[LousyResident]

Do you think that 1% is all were going to see? Serious question. I think it will make a difference there's people who I have a pretty good idea what they make. They go out to eat and vacation a lot more than I do. They've got to be living check to check so I would think that $300 would be a big difference. Especially with literally everything else going up in price, which probably equates to more than $300. I have no data to back this up just what I see going on.

That 4.5% would be higher than the rate I got back in 2017 well before Covid. I wouldn't be surprised to see higher, but I don't see any reason for it to go a bunch higher.

Borrowing half a million on a house! I don't care what the interest is, you still have to pay the principle back.

Just an example. Borrowing less just means less of a difference to the payment when the rate changes.

 

[SAJ-99]

Borrowing half a million on a house! I don't care what the interest is, you still have to pay the principle back.

Stange comment give the source. What is the labor and materials cost on a 3000sq ft house you build?

 

[LousyResident]

times might be changing. On my flight home on Monday, I sat next to a realtor from Texas who just got off the phone with an upset client because the appraisal came in way lower than his accepted offer price. He had to back out of the deal because he therefore couldn't get the financing.

The realtor went on to state that in the last two weeks, this is the third time this has happened to him where the bank appraisal came in significantly lower indicating that the banks are instructing the appraisers to stop overvaluing the homes due to the crazy market that has been set.

Yesterday I talked with a close friend who is a realtor. He had one instance of this happening in the last week.

The change in the market might be coming and its going to result from these accepted offers no longer going through due to financing

I think it means that a cash buyer will swoop in and just pay the difference. I think this will happen more as people who don't understand the borrowing process just bid whatever to win. That client clearly didn't understand that the purchase price has to be supported by other sales in the area. But, once a few cash buyers come in and pay over appraised value those comps will be in place.

 

[Deleted member 28227]

3000sq ft ? 1800sq ft

lol

 

[SwaggyD]

banks are instructing the appraisers to stop overvaluing the homes due to the crazy market that has been set.

Banking regulations require banks to have no affiliation or contact with appraisers before an appraisal is complete. If they bank were caught instructing appraisers to do this, that would be very bad news for that bank.

 

[LousyResident]

My mom always brings up that she bought her first house for 9.75% and thought it was a steal.

My grandparents have stories of 12-20% from the 70's I think. Crazy to imagine.

 

[BigHornRam]

Stange comment give the source. What is the labor and materials cost on a 3000sq ft house you build?

I'm not building right now. Guy's that are, are building for cash buyers at cost plus.

 

[HighDesertSage]

I left CO in summer of 2020 because it was no longer fiscally sustainable. We jumped into the market about 7 years to late. Moved to Iowa, make more money here and cut my expenses 76%. No regrets.

 

[LousyResident]

Banking regulations require banks to have no affiliation or contact with appraisers before an appraisal is complete. If they bank were caught instructing appraisers to do this, that would be very bad news for that bank.

*Insert "just because it's illegal doesn't mean it doesn't happen all the time!"*

To be fair, I've seen appraiser's pull some, uh, unusual comps to try and support sales prices. We usually go back and make them pull better (usually closer) comps. Either the comps support the value or they don't, (mostly) end of story.

 

[Deleted member 28227]

I think it means that a cash buyer will swoop in and just pay the difference. I think this will happen more as people who don't understand the borrowing process just bid whatever to win. That client clearly didn't understand that the purchase price has to be supported by other sales in the area. But, once a few cash buyers come in and pay over appraised value those comps will be in place.

Our sale was 1MM loan and the rest cash, I can't even remember what the appraisal was... not relevant at all

The entire time I was just like is this real... are we really doing this?

Craziest part is after the sale closed several others went using the sale I managed as a comp and now that property is up 350K from when we sold on the zillow estimate (which is a silly tool) but still...