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dinneR

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I listened to this recently. It's good.

https://www.npr.org/2021/03/15/977533022/please-sell-me-a-home

Just read this. One problem here is the rich buying up homes, tearing them down and building a little mansion then living in it for a couple of months a year. The waiting list for an affordable is many years.

https://buckrail.com/housing-in-jackson-teton-county-by-the-numbers/

Norton also shared examples of how real estate prices have also increased significantly in the past few decades. She used a single-family home in Cottonwood park as an example. The three-bedroom, two-bathroom, 1,320 square-foot home was built in 1991 and sold for $120,000, which was affordable to a household earning the median income at that time, explained Norton. In 2021, that same home was listed for $1,295,000, “by the time it did hit the MLS, it was already under contract. Cash buyer, sight unseen,” said Norton, “That’s 11 times the median family income.” The home is only affordable to someone making over $210,00 per year. The buyer, noted Norton, does not live full-time at the home.

Another home, located in Melody Ranch, was listed recently for $2,969,000. The three-bedroom, two and one-half-bathroom, two-car garage, single-family home sold in 2003 for about $460,000, which at that time was seven times the median family income. “It’s about 25 times the median family income, that’s 25 times,” repeated Norton.

Cash buyers and investors are outbidding the local community, and many homes are not even reaching the market. According to data collected by the Housing Department, in April 2021 alone, the real estate market reported $151,500,000 in total sales volume, with only 52 closings reported on the MLS. About 40%  of listings do not even reach the MLS because they are sold immediately through interoffice emails. “Our local workers who are trying to get into units are competing against some pretty deep pockets,” said Norton.

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@denniS IIRC you are a renter. Have the rising home prices affected rents yet? 

I bought my home in September last year. Last weekend the same plan a block over had a coming soon sign. By Sunday night (3 days) it was under contract for $125k more than I paid for mine

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1 minute ago, Scrapr said:

@denniS IIRC you are a renter. Have the rising home prices affected rents yet? 

I bought my home in September last year. Last weekend the same plan a block over had a coming soon sign. By Sunday night (3 days) it was under contract for $125k more than I paid for mine

Rent is insane here. I have four co-workers looking for housing. We can't hire because the rents are too high for people to move here.

My place is rent controlled so I am safe at the moment. 

Currently available for rent. $20,000/mo 3 bd3 ba 2,200 sqft

As many community members are experiencing first-hand, rental rates are on the rise in Teton County, as well as the surrounding areas, as demand for rentals continues to increase. The Housing Department found that between quarter four of 2019 and quarter four of 2020, rental rates in Teton County increased 9% for a two-bedroom apartment. The average two-bedroom apartment costs $2,472 per month. Mobile home lots also increased 11% to $730 per month.

 

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We are seeing a spike in asking prices locally.  We aren’t seeing the out of town buyers like Dennis but rates are low, inventory is low and so asking prices are high. 

We have a place in my neighborhood asking nearly $700K and it’s not really updated where as low $600 was the range for the updated units a year ago. 

I also keep seeing new neighbors but not For Sale signs so they are getting gobbled up quickly.   

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We would take vacations in June to places for day hiking.  Two places we visited had similar issues with escalating real estate;   Telluride Colorado in 2000 and Whistler, British Columbia in 2006.

Houses in Telluride, that would sell for $40K here, were going for $1+ million back in 2000.   I'd guess by now, closer to $2 or $3 million. 

Whistler was worse.  We talked to some of the people working at Whistler, they were upset.  The area was being built up getting ready for the 2010 Olympics.  Most local people, needed to move to areas they could afford.   So they had to drive at least 50 miles (or more) to go to work.

4 hours ago, denniS said:

My place is rent controlled so I am safe at the moment. 

I sure hope you don't end up like the 'local' people that used to live near Whistler.   

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8 hours ago, Razors Edge said:

Location. Location. Location.

There are tons of affordable homes, just not necessarily where folks want to find an affordable home.

But when entire areas no longer have affordable homes but need middle-class workers to do jobs in the area, that means those people are denied being able to own a home and often pay enormous rents.  It's almost like an American version of India's Caste System.

Housing prices are enormous in a lot of areas.  My small mini-Cape Cod, once rebuilt, would sell in the $250,000 - $300,000 range if I wanted to sell. Most of the new developments are listing the prices in the $499K to $799K range. A lot of people in Central Maryland buy homes along either side of the PA border in semi-rural communities for half the price of suburban Baltimore and then drive 1 1/2 - 2 hours to work each day.  The family of a boy while played on a baseball team with my nephew Ryan wanted to buy a home so they moved to Tennessee to do it after both spouses were able to find employment there.

A childhood friend of a neighbor owns the McDonald's in Ocean City, Maryland.  The prices became so high he needed to build dormitories to house summer help and housing for permanent workers because no one would be able to work for him and pay rent  ptherwise.

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36 minutes ago, MickinMD said:

A childhood friend of a neighbor owns the McDonald's in Ocean City, Maryland.  The prices became so high he needed to build dormitories to house summer help and housing for permanent workers because no one would be able to work for him and pay rent  ptherwise.

Our Corporate Office is in a really high rent neighborhood 25+ miles from where my contract staff live.  I pay them $2.50 more an hour (well I authorize the billing for the higher pay rate) than positions they could get closer to home as I know it’s hard to get folks to drive that far for meager wages.  We also throw them numerous perks, bonuses & company swag to make them feel part of the team. 

The industry has about 250% annual turnover but we have had under 100% the past few years and most of my team has been with me over a year.

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42 minutes ago, MickinMD said:

A childhood friend of a neighbor owns the McDonald's in Ocean City, Maryland.  The prices became so high he needed to build dormitories to house summer help and housing for permanent workers because no one would be able to work for him and pay rent  ptherwise.

And there you have it...  in a few years the return of company towns.  I guess ultimately there will be many places that will be similar to Potterville.   

http://bullandbearmcgill.com/big-tech-and-the-return-of-company-towns/

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36 minutes ago, MickinMD said:

But when entire areas no longer have affordable homes but need middle-class workers to do jobs in the area, that means those people are denied being able to own a home and often pay enormous rents.  It's almost like an American version of India's Caste System.

Housing prices are enormous in a lot of areas.  My small mini-Cape Cod, once rebuilt, would sell in the $250,000 - $300,000 range if I wanted to sell. Most of the new developments are listing the prices in the $499K to $799K range. A lot of people in Central Maryland buy homes along either side of the PA border in semi-rural communities for half the price of suburban Baltimore and then drive 1 1/2 - 2 hours to work each day.  The family of a boy while played on a baseball team with my nephew Ryan wanted to buy a home so they moved to Tennessee to do it after both spouses were able to find employment there.

A childhood friend of a neighbor owns the McDonald's in Ocean City, Maryland.  The prices became so high he needed to build dormitories to house summer help and housing for permanent workers because no one would be able to work for him and pay rent  ptherwise.

You hit the nail on the head Mick. Teachers, police, hospital staff all have trouble finding housing. Many employers offer employee housing. The ski resort has many buildings that are shared apts. The airport offers $500/month housing subsidies to TSA staff. The park and forest service have employee housing. 

Commuting here is a big challenge. The closest towns are 30-50 miles away. On paper that sounds okay until you realize one town is on the other side of the pass that can close for multiple days in a row during the winter. To the south, the canyon can close as well because of avalanches. 

Vail corp wanted to build employee housing. They needed county approval but asked for no funding from the county. The residents opposed it saying it would disrupt the wildlife and natural landscape. These people live on a golf course with tennis courts, a pool, and a restaurant. A golf course is natural? WTF? They want the grounds crew to manicure their nature, someone to serve them a meal, and clean up their trash, they just don't want these people to have a roof over their heads.

I saw a job listing for a pizza place paying $25-35/hour. That would be a pay increase for me, but I'd have to give up my apt to do it. 

The rec center will rent you a parking space for around $80/month

Workforce camping shrunk and delayed until July

 

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10 hours ago, Bikeguy said:

We would take vacations in June to places for day hiking.  Two places we visited had similar issues with escalating real estate;   Telluride Colorado in 2000 and Whistler, British Columbia in 2006.

Houses in Telluride, that would sell for $40K here, were going for $1+ million back in 2000.   I'd guess by now, closer to $2 or $3 million. 

Whistler was worse.  We talked to some of the people working at Whistler, they were upset.  The area was being built up getting ready for the 2010 Olympics.  Most local people, needed to move to areas they could afford.   So they had to drive at least 50 miles (or more) to go to work.

I sure hope you don't end up like the 'local' people that used to live near Whistler.   

It continues to be a problem to find local workers for service industry.  Squamish, about 30-40 km. south of Whistler used to be the place for some workers to live. 

100 kms. west of us is Canmore right at the foot of Banff National Park where home prices are rising rapidly. It really is lovely there, with mountains so close around you. Let's see what happens after covid.. it won't be pretty for local folks working service jobs for tourists.

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Same thing is happening here but to a lesser extent. Average house is getting snapped up and either updated and flipped or scraped and McMansioned.

The one area I do not see selling his people trying to sell the scrapes and McMansions for 1,000,000+ are not selling fast or at all.

People that have the funds to do that sort of thing apparently want to have the house built to their exact specifications and not by somebody else’s ideas

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We bought our home in 1996. I would guess it's going to sell for 250-300% of what we paid. Our city is also short of housing. They are expecting even with contractors working at full speed, it will be 15-20 years before supply catches up with demand. There were concerns about more outward migration as some of the employers closed their offices and told people to work from home. Instead the opposite has happened. Several young families native to the city are moving back from larger cities because they can bring their job with them. We are expecting to see a rise in migration back to even more rural surroudings if they can get reasonable broadband internet. 

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For a while I was thinking that our lot and home was going to end up way expensive than just getting an existing lot.  The extreme ramp we are experiencing proved that this thinking was wrong.

Homes with less amenities than ours are now getting listed for about what we have invested here.  I imagine that within a couple years, our home will be worth way more than what we paid at around 300 a sq ft.  Building a home is expensive, but prices are off the chain. 

How can this be sustainable?  I am not sure it is.  

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7 minutes ago, Dirtyhip said:

How can this be sustainable?  I am not sure it is.

It's not. But it will be a different bubble than the one from 2008. Mostly because of the investment firms are the primary reason demand in a lot of markets has skyrocketed.  YMMV on your market but in ours it is very much speculation investing causing a lot of this. 
It's like any product out there on the market; someone figures out a way to monetize a limited supply item, driving up the costs. Until the price is unsustainable and/or inventories catch up with demand. Look at the computer GPU market, "rare shoes" market, or any others to see the trend.

The inevitable crash/downturn is going to be interesting. 

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3 minutes ago, goldendesign said:

It's not. But it will be a different bubble than the one from 2008. Mostly because of the investment firms are the primary reason demand in a lot of markets has skyrocketed.  YMMV on your market but in ours it is very much speculation investing causing a lot of this. 
It's like any product out there on the market; someone figures out a way to monetize a limited supply item, driving up the costs. Until the price is unsustainable and/or inventories catch up with demand. Look at the computer GPU market, "rare shoes" market, or any others to see the trend.

The inevitable crash/downturn is going to be interesting. 

I have said to my friends..."If the market crashes one day after we move in, I don't care."  Now that we sold our home, if it crashes next week, I still don't care.

We are happy with the choice and our lot.  Small chunk of paradise.

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13 minutes ago, goldendesign said:

It's not. But it will be a different bubble than the one from 2008. Mostly because of the investment firms are the primary reason demand in a lot of markets has skyrocketed.  YMMV on your market but in ours it is very much speculation investing causing a lot of this. 
It's like any product out there on the market; someone figures out a way to monetize a limited supply item, driving up the costs. Until the price is unsustainable and/or inventories catch up with demand. Look at the computer GPU market, "rare shoes" market, or any others to see the trend.

The inevitable crash/downturn is going to be interesting. 

Golden, I disagree that the heat in the market is caused by investment firms.  It may be in some pockets but time and time again the stories are homebuyers out bidding each other.  That's what's driving the market.  Is it a bubble - maybe.  Will it burst - probably not because there isn't one factor that is there to cause that to happen like in 2008.  2008 was a boat load of liability by mortgage firms that didn't have enough assets to back up their loans.  ANYONE could get a loan and no downpayment needed.  And the feds allowed it to happen.  The first sign of a downturn and the whole industry that was built on a house of cards crashed.  Now if there is a downturn, financial intuitions have liquidity to back up their loan portfolio - because now the feds care.  This is a classic supply vs. demand - economics 101 - scenario.  Will prices drop - probably no/never.  Will prices level off? - yes when supply meets demand.  Maybe increases in prices will reduce demand, maybe increases in supply will reduce demand.

And maybe I'm wrong.

 

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2 hours ago, Razors Edge said:

Nomadland!!!!  Woot woot!  BLM has to be cheaper than rec center, though! 

There is not much BLM land around here. NF allows camping, but you can only stay 14 days I believe. Traffic in Curtis Canyon has it's own rush hour.

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5 minutes ago, denniS said:

There is not much BLM land around here. NF allows camping, but you can only stay 14 days I believe. Traffic in Curtis Canyon has it's own rush hour.

You are correct.  14 days is the max.  

Boondocking tip, when a ranger gets there and asks when you arrived, you say "today."  :D

Even if I own the land, you are only allowed to camp on it for 14 days.  The exception is if you have a building permit pulled and are making regular inspections within the last 6 months.  In that case you can drag out the process for a long while.  You just have to be makonig progress on it

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13 minutes ago, Kzoo said:

Golden, I disagree that the heat in the market is caused by investment firms.  It may be in some pockets but time and time again the stories are homebuyers out bidding each other.

In our area it is a 70/30 for investors to homeowners. Exactly why I believe it is a YMMV problem right now. 
I have several personal friends whom I trust with their assessment of the current market in our are. One is a solo-investor, buy an flip guy, and the other runs the largest Re Max office in Tampa. The Flip guy is completely out of the market right now due to being so heavily outbid by outside cash offers. He's not competing with people hoping to buy a new home  but with faceless offers at 20-30% of list price. The Re Max agent gave me some numbers to mull over as if you recall I was asking about investing in property here:

In Tampa year over increases from 2020 is about 18%. Only 32% of homes sold in Tampa were from MLS listings, meaning the vast majority of sales happened before they were even offered to the public. He has 3 investment firms that have open offers to several zip code areas where they have given his company direction to present any property with an understanding they will purchase well above market price. 

Maybe in other markets things are different but even new homes in my neighborhood have been bought and then sold without a family residing in them. Example a home down the road was purchased and built, the base price for this home was 750k, had a family name on the "home being built for XXXX family" sign. When it was finished, it sat without anyone in it for 3 months. Got a sign in the driveway and was listed as sold in 3 days. Price was $820, the county listing shows a LLC, not a family name.

Our home is mortgaged for less than $150 right now but valued in the upper $500s but I wont sell cause I have nowhere else I could go that I could afford the same amount of house I have. Many of homeowners are in the same boat here.

 

To your point about the previous downturn. I agree. Mortgage firms were overleveraged. This isn't the apparent case here. But what happens when an investment firm is over leveraged? Will it be a Wall Street bailout for these companies that hold massive amounts of property on the speculation of XX% growth but the market dips instead? Who is going to hold the bag at the end of this is my concern.

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12 minutes ago, Kzoo said:

Golden, I disagree that the heat in the market is caused by investment firms.  It may be in some pockets but time and time again the stories are homebuyers out bidding each other.  That's what's driving the market.  Is it a bubble - maybe.  Will it burst - probably not because there isn't one factor that is there to cause that to happen like in 2008.  2008 was a boat load of liability by mortgage firms that didn't have enough assets to back up their loans.  ANYONE could get a loan and no downpayment needed.  And the feds allowed it to happen.  The first sign of a downturn and the whole industry that was built on a house of cards crashed.  Now if there is a downturn, financial intuitions have liquidity to back up their loan portfolio - because now the feds care.  This is a classic supply vs. demand - economics 101 - scenario.  Will prices drop - probably no/never.  Will prices level off? - yes when supply meets demand.  Maybe increases in prices will reduce demand, maybe increases in supply will reduce demand.

And maybe I'm wrong.

 

This won't crash like 2008 because there is no debt. Most sales are cash. I was talking to a real estate agent and he said every time he sees a high offer, he thinks the bank will never approve it and then the offer is cash so no need for a bank. 

We have a few unique factors at play here. We cannot build our way out of this. 97% of the land in the county is owned by the U.S. Gov't.(NP, NF, Wildlife refuge). We have the highest income inequality in the country. #1 and nobody else is even close. We have no state income tax. People buy homes here to hide their money. They don't live in the homes. The house across the street from my GF has been vacant since the day it was built. Many of these homes are held in a trust or LLC. Commercial jets at our airport are outnumbered by private jets 5 or 6 to 1. You can watch the planes take off and land all day long. 

image.jpeg.373786f1a003225715b8be8706ad043e.jpeg

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I don't think the rise is all investment firms.  Low inventory is also driving it.  There was a lull in new homes being built in 2020.  That caused an inventory issue.  Let's face it... population is increasing.  Humans need somewhere to live.

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