The Home Ownership Thread

[nootje]

?

 

[Van Veen]

So I have an area at the back of the yard that looks to be a mix of various vines, weeds, and poison ivy. How have others dealt with this in the past? My current thought is layer up, rip it out, then spray Round Up. I just realized this yesterday so likely won't deal with it until the weekend when I have a game plan for it.

Roundup works by being absorbed through foliage. It is inactivated when it hits soil. Either you should spray it first, or just use it to treat any regrowth after you rip everything out.

Speaking of I think I got about 90% of the poison ivy in my front yard, which is better than I expected. Going to have to suit up and make a 2nd pass in a week or so.

 

[Numbernine]

Weed burners are good for regrowth but you gotta get it quick before the root system gets too viable

 

[Fueco]

Weed burners are good for regrowth but you gotta get it quick before the root system gets too viable

You said weed burner. I heard:

Spoiler

 

[NakedYoga]

If you pour bong water on the poison ivy it will probably kill it. Or at least make it really hungry.

 

[Omega Male]

East Bay market is so hot, houses are selling for more than $1M over asking

Especially in the East Bay, this type of sale isn’t an anomaly anymore.

www.sfgate.com

 

[otc]

So...are values just going to stagnate and not appreciate much for the next decade as high-payers refuse to sell at a loss and their neighbors refuse to list below recent comps?

Anytime something is such an obvious sellers market just seems like an awful time to make a purchase unless you truly have no other options. It is not like the supply-side drivers here aren't obvious--there's no inventory and building costs are extremely high for reasons that are known to be mostly temporary (such as sawmill timing/production issues).

I guess maybe the equation is different for someone who is simply moving within/between hot areas--you can sell your current house at inflated value, buy another one and end up in roughly the same spot...

 

[sftiger]

I bought a home a couple of years ago in the Bay Area. Home prices have been on the rise for 10 years in the Bay Area, so I guess I could try to time the market around a correction, but if I could actually time the market I would be a billionaire by now. Plus I have a family and wanted a nicer SFH with a yard, and not a condo, and those are harder to rent. This was pre-COVID, but I imagine the availability of SFHs to rent is even smaller now.

With my friends (most of whom are married and starting families) who have bought since the beginning of COVID, people just realized that they wanted more space and liked the certainty that they could stay in a place for a long time and make it their own, since everyone is stuck in their homes for so long with SIP + WFH. Plus everyone's portfolio is doing extraordinarily well, so borrowing money for mortgage + renovations is very easy and cheap.

 

[otc]

I bought a home a couple of years ago in the Bay Area. Home prices have been on the rise for 10 years in the Bay Area, so I guess I could try to time the market around a correction, but if I could actually time the market I would be a billionaire by now. Plus I have a family and wanted a nicer SFH with a yard, and not a condo, and those are harder to rent. This was pre-COVID, but I imagine the availability of SFHs to rent is even smaller now.

I dunno--for the most part, the "don't time the market" evidence is based on the stock market and broad based portfolios. It isn't quite the same when you are talking about a single real asset in markets that are sitting on zero inventory. Kind of an extraordinary circumstance here--trying to buy a house with a yard today is a different world than it was pre-covid, even in hot markets.

Bidding wars leave you plagued with the winners curse and a lack of options leads to you bidding on properties that are less than ideal...and residential purchases get emotional in the way that strict investments do not. I think its really the winners curse issue that gets me the most. Whoever bid up a $2m house to $3m almost certainly overpaid and I would happily make a bet that that home will underperform the local market over the next decade.

Not that there aren't rational reasons for doing it anyway. Maybe you really can't find an acceptable rental (even if you are willing to overpay) or maybe you have enough money that it doesn't really matter if you overpay and you really want this house.

 

[brokencycle]

I dunno--for the most part, the "don't time the market" evidence is based on the stock market and broad based portfolios. It isn't quite the same when you are talking about a single real asset in markets that are sitting on zero inventory. Kind of an extraordinary circumstance here--trying to buy a house with a yard today is a different world than it was pre-covid, even in hot markets.

Bidding wars leave you plagued with the winners curse and a lack of options leads to you bidding on properties that are less than ideal...and residential purchases get emotional in the way that strict investments do not. I think its really the winners curse issue that gets me the most. Whoever bid up a $2m house to $3m almost certainly overpaid and I would happily make a bet that that home will underperform the local market over the next decade.

Not that there aren't rational reasons for doing it anyway. Maybe you really can't find an acceptable rental (even if you are willing to overpay) or maybe you have enough money that it doesn't really matter if you overpay and you really want this house.

A good friend of mine lives in a suburb of Milwaukee, and he sends me postings all the time. $200k houses (which were $170-180k pre-COVID) are getting bid up to $250k (though they aren't appraising that high). A 25% over list bid on a house that has increased 10-20% in one year (where it is averaging like 3-4%) is absolutely insane.

 

[sftiger]

I dunno--for the most part, the "don't time the market" evidence is based on the stock market and broad based portfolios. It isn't quite the same when you are talking about a single real asset in markets that are sitting on zero inventory. Kind of an extraordinary circumstance here--trying to buy a house with a yard today is a different world than it was pre-covid, even in hot markets.

Right, but if you had waited for a correction for the last ~10 years in SF (or most major metro areas in the US I think?) you would not have found one outside of a very brief period in Q2 and part of Q3 2020 when people thought the world was ending.

So if you're in a position where you have a new or growing family, or are trying to downsize, or have some other non-financial reason to cause you to want/need to move, what do you do? Just wait another year, keep renting, and hope the market cools down? Maybe that's the rational thing to do.

Not a rhetorical question by the way, my wife and I talked about this a lot.

 

[Omega Male]

I should probably sell my house before it burns down.

In the meantime, getting some nice roses.

 

[otc]

A literal correction? I mean I'm not willing to commit to that happening for the reasons I listed earler--home prices tend to be sticky and people don't want to sell for less than they paid or less than recent comps. For a literal correction, I'd need to see some exogenous factor like a true recession that suddenly decimates individual income, pushes up foreclosures, and forces sales that otherwise wouldn't have happened.

But I could see a market that goes flat where people who bid 50% over asking on a house struggle to resell at an acceptable price or even are just left with a house that is only worth 5% more than they paid 5 years later while the stock market has gone up 40% in the same time (which is low for the S&P500).

A good friend of mine lives in a suburb of Milwaukee, and he sends me postings all the time. $200k houses (which were $170-180k pre-COVID) are getting bid up to $250k (though they aren't appraising that high). A 25% over list bid on a house that has increased 10-20% in one year (where it is averaging like 3-4%) is absolutely insane.

Maybe its just that I can't wrap my head around what is essentially "table stakes" in the bay area...but at least I can understand that more.

$50k isn't really all that much if you are talking about a city dweller saying "I'm working remote now and I need an extra room and a yard, but I don't care about the commute anymore". Like an extra $200 a month on your mortgage? I know a guy doing exactly that next month...they are moving to a suburb on the north side of MKE because they can both work remotely. They probably bid up the MKE house, but they could easily be paying *less* than they pay for their house here

 

[sftiger]

But I could see a market that goes flat where people who bid 50% over asking on a house struggle to resell at an acceptable price or even are just left with a house that is only worth 5% more than they paid 5 years later while the stock market has gone up 40% in the same time (which is low for the S&P500).

Sometimes the "X% over asking" headlines are overblown because they were underpriced to begin with compared with $/sf in the area. We got fooled on this when the first place we bid on went nearly 50% over "asking" but the final sale price was only slightly above the average $/sf in the neighborhood and they had just put the asking price very low. Not sure why our agent didn't warn us of this, but clearly a rookie move on our part.

But we haven't looked in a few years, and it seems like there is some uniquely crazy stuff going on right now.

 

[Fueco]

This convo prompted me to look at listings in the area. There’s very little going for under a million around here. The estimate for our house is just over a million. We paid 720k only five years ago...