The Home Ownership Thread

[bdavro23]

Based on what people like in new construction tract homes and all the remodel shows and the like, I think most people just have no imagination/any desire to be remotely different, and they are probably using some construction company's 'architect' that is basically just using some bog standard mcmansion layout. Then again, I'm sure there are plenty of terrible architects.

We are in the process of building a house with an architect on an original design. If we went with a spec house from a builder, we could build 30% bigger for literally half the cost.

 

[Van Veen]

We are in the process of building a house with an architect on an original design. If we went with a spec house from a builder, we could build 30% bigger for literally half the cost.

I wonder how much of this is to do with how prevalent engineered components are nowadays. It has to be cheaper to use standard trusses, for example, and lego them together to make those frankenstein mcmansion rooflines rather than custom engineering trusses or using traditional rafter framing.

 

[RedLantern]

So finally got together my tile order for the two bathrooms we are going be renovating. I first started looking at this company (B&W tile) back in 2016/2017 when planning the bathroom in our last house and the pricing was reasonable. I ended up going with Daltile for that because they had the color that I wanted most. Apparently in the interim B&W was bought by someone and they really jacked up the pricing and the tile is going to run almost 3x as much as I thought it would. I budgeted conservatively and there's not any real viable less expensive alternative for what I'm looking for so I'm going to make the order, but still, got me jibbity.

 

[brokencycle]

We are in the process of building a house with an architect on an original design. If we went with a spec house from a builder, we could build 30% bigger for literally half the cost.

That's probably true. You have to pay for a lot more upfront work, and I would guess you're not using standard size windows and the like. What would be the comparison if you used builder grade materials?

The reality is people value more and choose easy and more square footage over cost or design or higher end materials normally.

 

[1969]

Total insanity here right now. From a friend, and this is the low end stuff. Stories daily from friends about people knocking on doors offering 3-5 million for 2 million dollar homes.

 

[ValidusLA]

I have a friend shopping in Pasadena right now. Lost on last 4 attempts. Latest one was listed at 895k, she bid 995k. They didn't even bother to counter her.

 

[venividivicibj]

I have a friend shopping in Pasadena right now. Lost on last 4 attempts. Latest one was listed at 895k, she bid 995k. They didn't even bother to counter her.

Whats the thought in listing it so low? I get the 'entice more offers', but if you're off by over 20%, it just seems like the realtor isn't really good at their job...

 

[ValidusLA]

Whats the thought in listing it so low? I get the 'entice more offers', but if you're off by over 20%, it just seems like the realtor isn't really good at their job...

Just driving traffic. Sub 1 million is Pasadena is insanely hot. 20-30 offers per house. These houses are like sub 1600 sq ft often on small lots, depending on neighborhood.

 

[brokencycle]

Whats the thought in listing it so low? I get the 'entice more offers', but if you're off by over 20%, it just seems like the realtor isn't really good at their job...

Chief economist at Zillow wrote in his book that listing high actually results in a higher offer. That was 5 years ago though.

 

[otc]

Yeah, this just seems to me like comps didn't react fast enough and real estate agents weren't bullish enough in their valuations.

Those are huge discrepancies. If you're hoping for more than 733k and list at 550k, you're just asking to to a bunch of extra work fielding requests and offers from people who think your house is actually available for 550.

 

[jbarwick]

Even taking rates into consideration, I feel like there are going to be a lot of recent buyers who end up house poor. The rule of thumb used to be 3x gross income to mortgage but even before COVID that was creeping into the 3.5x-4.0x range.

 

[brokencycle]

How is this not a bubble? It seems like the prices are being driven by a huge surge in demand by a subset of people while supply is at a historical low. On top of that, interest rates are at historical lows making monthly payments look cheap.

What happens when there is a normal supply again? Prices should fall as we become unconstrained by supply. Then those people buying at the inflated prices now will have lower comps and potentially be stuck (particularly as interest rates rise).

 

[ValidusLA]

Even taking rates into consideration, I feel like there are going to be a lot of recent buyers who end up house poor. The rule of thumb used to be 3x gross income to mortgage but even before COVID that was creeping into the 3.5x-4.0x range.

100% i think there will be a lot of pain.

We bought in 2017 (right before they took away the SALT deduction... grumble grumble). If we tried to buy our house now our mortgage would be beyond responsible levels.

 

[double00]

where will additional supply come from in pasadena? there are structural barriers to housing equilibrium

 

[ValidusLA]

where will supply come from in pasadena? there are structural barriers to housing equilibrium

Hits the nail on the head. It won't. Some areas are more bubbly than others. Since Covid, all my friends who thought it was cool to spend 4k a month on rent in downtown or the west side all of a sudden crave yard space on the suburbs. Their barrier to entry is down payment, not income.