Job losses can lead to foreclosure just as fast as adjusting ARMs. We go headfirst into a recession and it could get ugly fast.
The majority of those mortgages are held by baby boomers too, who won't be needing those houses much longer.
Building a house
- Thread starter Ron Mehico
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The majority of those mortgages are held by baby boomers too, who won't be needing those houses much longer.
The people in this thread who are building are doing so because they can. You know the costs (or have ridden out the cost hikes along the way), but said eff it, are enduring the pain and getting it done. Why? You have the money and will to do it. You are likely secure in your job and are well-versed in the risks you are taking. You are not the average American right now.
You are also invested in this housing market big-time, and might not like hearing what I am saying because it may mean you will soon own a house that you "overpaid" for, which you were hoping would not be the case. Even though I purchased from inventory, I have the same concern. But that's a price you were willing to pay (and I was as well), you wanted this for your family and you plan to be in the house for decades, if not the rest of your life. You accepted the risk.
I can't predict the future, I'm just telling you my opinion based on what I am seeing. Understand I am not predicting that the housing market will crash. At worst, I think the housing market could pull back maybe 5 percent by this time next year. but beyond the housing market, I see an economic downturn which will affect people not in this thread a hell of a lot more than the people in this thread. People who don't own houses and aren't secure in their employment and are already paying out the @ss for an apartment and are getting pummeled by high gas and grocery prices. Those are the people who are about to feel the pain.
You are also invested in this housing market big-time, and might not like hearing what I am saying because it may mean you will soon own a house that you "overpaid" for, which you were hoping would not be the case. Even though I purchased from inventory, I have the same concern. But that's a price you were willing to pay (and I was as well), you wanted this for your family and you plan to be in the house for decades, if not the rest of your life. You accepted the risk.
I can't predict the future, I'm just telling you my opinion based on what I am seeing. Understand I am not predicting that the housing market will crash. At worst, I think the housing market could pull back maybe 5 percent by this time next year. but beyond the housing market, I see an economic downturn which will affect people not in this thread a hell of a lot more than the people in this thread. People who don't own houses and aren't secure in their employment and are already paying out the @ss for an apartment and are getting pummeled by high gas and grocery prices. Those are the people who are about to feel the pain.
Not to mention another sign - food banks are seeing a dramatic increase in customers
Not sure why you think this. At this point if you are taking your inflated equity and putting it in a house you should be fine.
Now if you are leaving yourself on the high end of the debt/income ratio that’s on the bank for allowing it.
That said, the only way a foreclosure bubble happens again is if people are upside down in their house, which takes a plummet of property value to make happen at this point and we’ve gone through a few increased tax values so that isn’t happening. Govt isn’t going backward now on these house values.
It will be interesting, but if you are building NOW, money isn’t your problem nor is credit so I just don’t see it falling like people think it will.
You spectacular sonofabitch. Just don’t ruin the whole experience for me, as I’m sure the next year is going to be a blast!
I've been in the homebuilding industry since 2002. I've seen way too much to be so naive to think that way, especially when it comes to government and economics.
Not sure what else there is to explain that I haven't already stated. Rising materials/ labor, increasing debt servicing, decreasing nominal wage growth, pending recession...
A lot going against the home building industry right now. All those home shortage concerns don't add up either unless baby boomers decide not to die.
Ron, can I have you call my wife every time she suggests that we build our "forever" home?
So if you were in it since 2002 and just got out a year or two ago, you got through 08?
You are guessing people who got overpriced homes are going to lose their jobs?
I guess what I’m saying is a recession isn’t going to last long enough to destroy home values and create an upside down effect that homeowners can’t get out of.
Otherwise it isn’t like there are a bunch of suspect loans out there to go under like in 08 with ARM rates.
I'm still in the industry, and I made it through the great recession too. I remember liquidating RE assets as early as 2006 for that one because a downturn was obviously coming.
I'm saying another recession is coming and shit happens during recessions. Maybe you're right and there will be no fallout with this one, but I doubt it.
I'm saying another recession is coming and shit happens during recessions. Maybe you're right and there will be no fallout with this one, but I doubt it.
A recession is coming if not already here. The question is how bad will it get. We have never dealt with a Pandemic in our lifetimes and what the long term effects from it will be. A lot of us are blessed with good paying jobs, low debt, etc. Millions upon millions of Americans (especially millennials) are getting it up the rear end hard right now. What the long term ramifications for that generation and those behind them will be as costs continue to rise, debts rise, etc has to be a big concern for the viability of the future economy.
I'm just thankful that my house is paid for and I only pay a shitload taxes to Fayette County once a year in November.
There are a LOT of vacant homes around the country. The question I have is this- Are they vacant REO properties that will be dumped on this market at some point, or are they simply properties tha large companies have purchased to drive prices up artificially?
It could be the latter. The market (with interest rates so ridiculously low) wasn't real, and the more recent financial changes of the last 20 yrs (re banks and REO) allowed for such an artificial pump to occur. It's not much different than a stock pump designed to benefit particular players in the market scheme.
It could also be the former. In 2018 tons of REO properties scheduled to hit the market never did. Where did they go? Are they still out there waiting to be dumped? Are those houses the majority of the millions of vacant properties around the country?
Was this a scheme to get people to trade their hard earned equity for properties whose equity will evaporate if these vacant properties are dumped on this market? I don't know the answers but this is certainly a weird time. Not a lot of indicators make this an easy market to prognosticate. What matters for most people is that their property suits THEIR needs and is affordable to them, yet perception is shaky right now.
I think the latter. Well, buying up SF to be able to charge higher rents than apartments. One of our customers is buying 200 a month and is one of the most profitable MF developers right now.
Apartments are stupid expensive now. No cheaper safety net like there was during the last crash.
They did just make a great one acquiring the largest student housing developer in America. Probably a good sign for moving further away from SF.
So our framing finished yesterday and the next step is to put the roof shingles on and then the windows. So framing took 7 weeks - and that’s supposed to be the quick part 😂 JFC I’m doomed. House looks dope though. Windows are actually in so I’m hoping by end of this month we’ll have windows actually installed. Then we were told plumbing and electric is next and will take 2 months.
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If this f*cker gets finished in the next 14 months I’ll shit a brick. At this point I don’t even know why they’re giving time estimates as they’ve been horrendously wrong with everything else. Of course my wife takes it all to heart and I have to keep dealing with her disappointment 🙄
Building is tough when you aren't familiar with the process. There are so many variables and outside forces to contend with that there really is nothing definite until the mortgage is closed. Even then, things can linger.
It’s been eye opening/interesting/impressive/disappointing all wrapped into one. I really like our builder though and he’s been really hands on with us (he only builds 10-15 houses at a time) and that’s been really helpful.
Yup, they were putting that white wrap (tyvec?) on it today
A lot of lumber left over? You watch them build that damn staircase?
We aren’t too far apart in the process. We may have already established that earlier in this thread, but it’s late and I don’t feel like reading back.
We have roof installed and all windows installed. Still waiting on 3 sliding doors to be delivered, however. I am assuming that duct work will start soon.
We have our fireplace being delivered next week. Pretty excited about that. Basically will be the center piece of the entire house. We did a custom gas four sides fireplace that will be positioned between the front door and the living room. Will act as a barrier so that the entrance has more of a entrance feel and you aren’t walking straight into the living room. Thing is massive though. Excited to see it in person.
There’s definitely some left over, the shell and main and second floor is framed but they need to pour the concrete to frame out the basement. He told me the staircase will take 8-10 months to finish and they haven’t even started that yet - excited to see that part actually.
I’ve seen that feature in a couple houses and really liked it, sounds badass!
That must be one hell of a staircase. I've built entire houses in less time than that.
Liquidated damages, retainage, schedules are the most imperative topics in the contract with ‘home builders’ rather than negotiating them down by $10k.
Let them keep their money upfront, but have your contract clear… expose, document, and hammer their lien-able assets if needed.
Let them keep their money upfront, but have your contract clear… expose, document, and hammer their lien-able assets if needed.
That's worth the wait. I'd hate to come home drunk and try to sneak to bed.
Figured I’d give my quarterly update. Framing was done last week as we had to wait like 2 months to get concrete to finish pouring the basement and garage. Started siding this week and am gonna go by and see how much they’ve done. Plumbing starting next week then we’re set to do electrical walkthrough in 2 weeks. 12 months out best case. At this point it is what it is and I’m trying to focus on the positives which is my interest rate was locked in before construction like 2 years ago and it lets us keep saving up money for furniture and the up charges that pop up. Will probably be around 3 years from start to finish.
When we first met him on the lot in February of 2021 he told us 14-16 months.
