# To Sell, Build Or Not



## brushbuster (Nov 9, 2009)

d_rek said:


> I hear those states have just so-so deer hunting. Might want to consider a different state. Like Florida or Alabama.


Unbelievable what you can get a house out there for. I'm seeing houses for 30k. Not sure about tornadoes risks though. But yeah the hunting would be a draw.


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## DirtySteve (Apr 9, 2006)

wateroperator said:


> Inflated buying power due to low interest rates and a rising economy has promoted lenders to ease the burden of cash down, good credit, etc. Younger generation taking on more debt than they can afford. A predicted wave of foreclosures flooding the market, in turn driving values down and inhibiting selling power. (These are just things that realtors have been telling me). They are all saying it's coming. I'm no expert so I just listen to differing opinion and take in what I consider to be logical.
> 
> I do see lots of young couples buying $250,000 subdivision homes and question whether they can truly afford it. Couple that with a couple of new vehicles and they've strapped on a large amount of debt.
> 
> ...


Inflated buying power? Buying power is buying power in my opinion. They can either afford the payment or they cannot. 

In 08 it was completely different. Those affordable payments were subprime loans with rate increases coming due coupled with a rise in unemployment. That isnt the case these days. The payment you have is the payment you will continue to have. So the cheaper payment on a 250k home stays the same cheap payment long term. The fixed payments we are seeing today are better than the subprime variable rates of 08. 

Wages are pretty good for young people these days. My son goes to michigan tech. MTU median starting salary is 65k. I know kids who started in the 70-90k range. Those young couples you see buying 250k homes can probably afford them alot better than you imagine.


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## kroppe (May 7, 2000)

Today’s data release showed continued strength in residential construction. Available on the Census Bureau and FRED sites.


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## Lund Explorer (Jan 23, 2011)

brushbuster said:


> Unbelievable what you can get a house out there for. I'm seeing houses for 30k. Not sure about tornadoes risks though. But yeah the hunting would be a draw.


Oklahoma, now know far and wide as Tokelahoma since they went all in on recreational marijuana has a funny little room built into the middle of many homes strictly as a place to shelter during tornados. A lot of those places also are build on shallow crawl spaces or a simple slab, so don't plan on a man cave in the basement.


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## CrawlerHarness (Dec 9, 2017)

d_rek said:


> I hear those states have just so-so deer hunting. Might want to consider a different state. Like Florida or Alabama.


Aren’t they much more lenient on machine guns though? Kind of a good trade off


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## Fishndude (Feb 22, 2003)

wateroperator said:


> Inflated buying power due to low interest rates and a rising economy has promoted lenders to ease the burden of cash down, good credit, etc. Younger generation taking on more debt than they can afford. A predicted wave of foreclosures flooding the market, in turn driving values down and inhibiting selling power. (These are just things that realtors have been telling me). They are all saying it's coming. I'm no expert so I just listen to differing opinion and take in what I consider to be logical.


I've worked in mortgages for 25 years. Inflated Buying Power is only due to the lowest mortgage interest rates, EVER, plus relatively high wages. Lenders haven't loosened guidelines a bit in the last 2 years. And, in fact, guidelines have become quite a bit more strict since covid hit. Pretty quickly, self-employed mortgage Borrowers will need to have very high credit scores to qualify for loans. Down payment requirements have _*not*_ been reduced, and have been increased for some Jumbo products. Fixed rates have been so low for so long, that ARM products are rarely the best choice at this time. So young people who can qualify for super-low interest mortgages to buy the most expensive home they can afford, are going to make bank in the future. That, because their fixed rate payment (principal + interest) will remain the same over a long period of time, while it is normal for their income to increase. 

All that aside, there is a LOT of wealth, and property, that is going to change hands due to the covid crisis. It is happening already. I'm not sure the numbers will be significant enough to affect the overall real estate market, and values.


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## d_rek (Nov 6, 2013)

Fishndude said:


> All that aside, there is a LOT of wealth, and property, that is going to change hands due to the covid crisis.


Seems like if there isn't more stimulus ASAP i think we'll be seeing a good bump in defaults and evictions here shortly. I would also expect people to start offloading luxury items and toys (campers, atvs, etc.) in quick order to keep current on their bills. I'm frankly surprised this hasn't happened yet. That being said I don't see a housing market crash coming anytime soon. Maybe fluctuations +/- a percent or two, but no big drops like we saw 2008-2011.


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## CrawlerHarness (Dec 9, 2017)

d_rek said:


> Seems like if there isn't more stimulus ASAP i think we'll be seeing a good bump in defaults and evictions here shortly. I would also expect people to start offloading luxury items and toys (campers, atvs, etc.) in quick order to keep current on their bills. I'm frankly surprised this hasn't happened yet. That being said I don't see a housing market crash coming anytime soon. Maybe fluctuations +/- a percent or two, but no big drops like we saw 2008-2011.


Drek.....I am a gloom and doom guy when it comes to the economy and debt. 

But the economy is booming right now. Jobs have been up every month in a significant way from May thru October. The housing market is booming based on 2 things.....low fixed interest rates, and people buying second homes. 

There will be no severe dumping/offloading of houses and toys. In fact, with a higher % of the population being flush with cash due to 2 things....low interest rates and the booming stock market..... Any dumping of houses / toys will be bid up (so they are not a dump). 

Perhaps in your sector or in your region things are tight. But overall everything but the aerospace and travel sectors are clicking on all cylinders. When you look at the US as a whole, I would predict a continued boom in 2021. Especially since the vaccines are almost here. 

Now the stock market is another story.....I can never figure that one out. But I would guess that will go up next year again.


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## kroppe (May 7, 2000)

CrawlerHarness said:


> Drek.....I am a gloom and doom guy when it comes to the economy and debt.
> 
> But the economy is booming right now. Jobs have been up every month in a significant way from May thru October. The housing market is booming based on 2 things.....low fixed interest rates, and people buying second homes.
> 
> ...


Agree. An estimate is that GDP needs to grow by around 15% on a quarterly basis to get back to Q4 2019. Then add natural growth on top of that 15% number. This means to me that asset prices (homes, stocks) have upward pressure now. The road is usually bumpy, but it leads toward higher ground.


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## stickman1978 (Sep 15, 2011)

CrawlerHarness said:


> Aren’t they much more lenient on machine guns though? Kind of a good trade off


You can have lions and tigers as pets also.


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## AKhunter (Jan 15, 2017)

CrawlerHarness said:


> To me an easy answer. Sell high. Don't worry if you have to also buy high. Interest rates are low, and ultimately you will be happy in the new place.


I agree whole heartedly. Make the money while the market is up. High lumber prices really don't factor that much into a new home.


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## GIDEON (Mar 28, 2008)

So a 2500 sq. ft. home would be over 400,000 on my property to build? Is this stick built of pre-fab?


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## Sasquatch Lives (May 23, 2011)

brushbuster said:


> I'm half tempted to put a large price tag on my log home, sell it retire early and move out to Oklahoma or Kansas. 1500 sqft homes are averaging out 125-135k.


Man I would love to live in Kansas, at least for part of the year.


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