Real-Estate Bubble Popping?

[Tezz500]

You might be right, I don't know. And it seems realistic IMO. To go from $400k to $275k that is a decrease of about 42%. If you apply that to my situation, the value of my home would be about $575k. If you told me I would buy a house and in 2 years the value would increase by $50k I'd be happy; that's about 5% growth per year. Seems "normal" to me. For a home's value to be artificially pumped up by over $300k in 2 years is unrealistic. Easy come, easy go!

Your scenario also seems more likely given the fact that wages/compensation are becoming stagnant again after increasing rapidly over the past year or so. With workers' pay not increasing dramatically, they have less spending power.

It’s crazy how different every market is…

Florida I4 corridor you can find some nice homes all ranging from 700k down to 450k with reasonable starter homes in the 250k range.

Memphis TN, that Market is gorgeous.

Same with KC Missouri.

Here in Colorado, Denver Metro…..

330k will get you this sweet little shit box lol

9260 Fir Drive, Thornton, CO 80229 | Zillow

9260 Fir Drive, Thornton CO, is a Single Family home that contains 1176 sq ft and was built in 1955.It contains 3 bedrooms and 2 bathrooms.This home last sold for $418,000 in February 2023. The Zestimate for this Single Family is $426,600, which has increased by $455 in the last 30 days.The...

www.zillow.com

 

[Fat Boss]

Not all that far from me, you can get a nice house (lol hard to type with a straight face) for $260k. I wonder if it comes with a banjo?

7445 Croy Rd, MORGAN HILL, CA 95037 - 1 bed/1 bath

(MLSListings) For Sale: 1 bed, 1 bath ∙ 622 sq. ft. ∙ 7445 Croy Rd, MORGAN HILL, CA 95037 ∙ $259,900 ∙ MLS# ML81854276 ∙ This permitted cabin includes 2 parcels for a total of 7.9 acres. Mostly hillside. Amazing...

www.redfin.com

A friend of mine just bought a ranch a few hundred yards from me for $6M. It comes with 180 acres and apparently a couple hundred grand worth of tractors and equipment. He probably overpaid a little, but he's been eying the property for 30 years and made his money the old fashioned way- he inherited it. All $65M or so...

 

[black4vcobra]

We moved to the Las Vegas metro in 2018 but lived in Madison prior to moving here. We lived in Cottage Grove (I think that is where they built the Amazon distribution center?). When we left Cottage Grove it was a small, sleepy little place with the only houses being built over behind Glacial Drumlin MS and they were bigger homes that were expensive. There was absolutely no building going on when we lived there. My wife and daughter went back to visit in May of this year and said the town is blowing up. Upscale apartments and new single family homes. Place is growing like CRAZY.

I never understood the attraction to Madison city. My buddy lives in Tenny Park (has rented there for at least 8-10 years) and the prices of real estate 10 years ago was insane. Old homes, no central AC, no attached garages. I never understood the attraction. I guess the park is nice, and a lot of young people with good jobs like city living there. We had some great parties in his neighborhood because it was a younger crowd. But for me, I wouldn't consider city living like that if we still lived in WI.


As far as the topic discussion goes, we bought our house in Henderson/Vegas two years ago for $525k. It is valued at $840K currently. Even if it lost 25% of its value due to a "crash" it would still be worth $640k, which is insane considering we purchased it two years ago. The market has to cool. That type of increase in value cannot be sustained.

Yup, the Village of Cottage Grove has approved that Amazon distribution facility. No active construction yet but I've seen some sporadic activity out there with drill rigs and excavators. I'd imagine that was the field exploration for the requisite geotechnical report. Not a lot of details on the schedule but I did see one article mention that pending permitting, construction could yet begin in 2022 and the site completed within 18 months.

But ya, there are nice apartments and houses going up everywhere. He's only 3 now but in the future my son will be made to walk to Glacial Drumlin middle school on all but the nastiest of winter days as it's not too far.

Agreed about living in the "old" sections of Madison. I don't get the appeal either, everything is just too space constrained and the rough areas are only spreading.

That's a nice return on investment on your current home and from what I understand, Henderson is world's different than Vegas as far as raising a family. I will likely be going to stay at Sunset Station for a few days in November for work. Will have to drop you a message to see if you would be interested in swinging by for a beverage.

 

[jpro]

It’s crazy how different every market is…

Florida I4 corridor you can find some nice homes all ranging from 700k down to 450k with reasonable starter homes in the 250k range.

Memphis TN, that Market is gorgeous.

Same with KC Missouri.

Here in Colorado, Denver Metro…..

330k will get you this sweet little shit box lol

9260 Fir Drive, Thornton, CO 80229 | Zillow

9260 Fir Drive, Thornton CO, is a Single Family home that contains 1176 sq ft and was built in 1955.It contains 3 bedrooms and 2 bathrooms.This home last sold for $418,000 in February 2023. The Zestimate for this Single Family is $426,600, which has increased by $455 in the last 30 days.The...

www.zillow.com

I wonder about the Vegas market. The metro area has been a magnet for people for decades and they are projecting that the population will continue to increase over the next 40-50 years. It could mean that our prices stay elevated due to demand, which would be good for us as homeowners. It will be interesting to see just how artificially inflated our market is once it stabilizes.

Yup, the Village of Cottage Grove has approved that Amazon distribution facility. No active construction yet but I've seen some sporadic activity out there with drill rigs and excavators. I'd imagine that was the field exploration for the requisite geotechnical report. Not a lot of details on the schedule but I did see one article mention that pending permitting, construction could yet begin in 2022 and the site completed within 18 months.

But ya, there are nice apartments and houses going up everywhere. He's only 3 now but in the future my son will be made to walk to Glacial Drumlin middle school on all but the nastiest of winter days as it's not too far.

Agreed about living in the "old" sections of Madison. I don't get the appeal either, everything is just too space constrained and the rough areas are only spreading.

That's a nice return on investment on your current home and from what I understand, Henderson is world's different than Vegas as far as raising a family. I will likely be going to stay at Sunset Station for a few days in November for work. Will have to drop you a message to see if you would be interested in swinging by for a beverage.

Yeah, Henderson is great. I was just at Sunset yesterday. My kids wanted to go bowling and they have an alley with like 100 lanes. It is crazy! And it was packed on a Tuesday afternoon...maybe due to the heat LOL.

Would love to grab a beverage if you're ever in town! And you're right, Henderson is great for families! So is Summerlin.

 

[MG0h3]

Don’t forget increased property taxes.

Coworker bought at 440k here 2-3 years ago. This is/was upper end for the county for sure. His taxes were a touch over 14k a year.

They reassess yearly here. They proposed almost 20k in tax for the upcoming year.

The taxes alone here having me looking elsewhere.


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[PhoenixM3]

The real estate fluctuations in the housing market is due to the two completely opposing consumers.

You have tycoons and developers that use real estate as investments with multiple properties they buy and sell. In these cases real estate is an investment and ups and downs affect the pocket book.

Then you have the average buyer and unlikely occasional seller that is looking for single housing only. In this case a home is not an investment its a neccessity that cannot gain or loose value tangibly since its value is nonusable. Even if it were to proposely double its value overnight it would be of no use to that consumer since they couldnt tap in to any of that. For example I paid 165k for my house (pre-foreclosure take over) more than a decade ago. Im in the process of putting 125k in on renovations. House is expected to appraise for 800k but its of no use to me since I cant use any of that. If I were to sell Id loose my ass on taxes and it would cost me at least that much to find something comparable so its useless.

The fluctuations come in the market when more investors sell while single consumers need housing and have no other option than to buy or be homeless.

Im big in to real estate and I cant seem to pass up a deal. Last deal I seen was over 2 years ago now. The real estate market in the greater new orleans area has been dead since.

Staging a home is for ignorant buyers. When I see a house I want to see all the walls and floors unobstructed to evaluate actual condition.

The majority of real estate agents are shit.
Biggest problem with agents are they fail to give accurate descriptions and lack pertinent info.
Agents that use the MLS only are useless.
If an agent doesnt have a book full of investors and buyers they are useless.
If an agent isnt closing on at least 4 homes a week they aren't worth a damn.

If an agent doesnt list the actual lot sq ft, rear yard access, flood zone, doesnt include half baths, the age of roof ac and major appliances they are useless.

And for the love of god the biggest problem with most agents IME is they do not include the cost of the land.

Some idiotic agent sold an inherited 4bath 2br 1500 sq ft home in the greater new orleans area for 150k. Idiot failed to realize the acerage it was on was worth 3 times that. The buyer knew and subdivided it. Sold the acerage for a cool half mil the same day and then sold the house for 300k after putting 80k in on it.

Again most agents are idiots.

You wouldn’t lose your ass on taxes if you did a 1031 exchange….

 

[decipha]

Not now but 15-20% down the line is not ideal either.

 

[MG0h3]

You wouldn’t lose your ass on taxes if you did a 1031 exchange….

Unless I’ve understood incorrectly, that’s just a deferral.

If you convert or sell later, you’re paying taxes on all of it. The tax code actually calls it a deferral.


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[AustinSN]

It’s crazy how different every market is…

Florida I4 corridor you can find some nice homes all ranging from 700k down to 450k with reasonable starter homes in the 250k range.

Memphis TN, that Market is gorgeous.

Same with KC Missouri.

Here in Colorado, Denver Metro…..

330k will get you this sweet little shit box lol

9260 Fir Drive, Thornton, CO 80229 | Zillow

9260 Fir Drive, Thornton CO, is a Single Family home that contains 1176 sq ft and was built in 1955.It contains 3 bedrooms and 2 bathrooms.This home last sold for $418,000 in February 2023. The Zestimate for this Single Family is $426,600, which has increased by $455 in the last 30 days.The...

www.zillow.com

Holy cow, that house is unbelievably close to where I lived (0-5 years old).

My parents were renting, it was $100 per month. Similar layout to that one lol.

Unless I’ve understood incorrectly, that’s just a deferral.

If you convert or sell later, you’re paying taxes on all of it. The tax code actually calls it a deferral.


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I have a customer who did one, her father had a big piece of property near a port on the east coast that he bought for cheap back in the 1930s (she is old). He died, kids inherited it, they did a 1031 exchange and bought a very expensive rental property. After 2 years of creating income on the property they can turn around and sell it and only pay taxes on the income from the rents. At least that's how she explained it to me.

 

[Blown 89]

As a few have said, the carrying cost of low interest debt means it’s more valuable to keep your money in your pocket.
For example, you’re paying 3% on your mortgage. By keeping this loan, you keep cash that can be invested at say 8%. That’s +5% to you, roughly

That's assuming people actually invest the money. Most people talk a big talk and end up buying stupid shit instead.

 

[jpro]

Don’t forget increased property taxes.

Coworker bought at 440k here 2-3 years ago. This is/was upper end for the county for sure. His taxes were a touch over 14k a year.

They reassess yearly here. They proposed almost 20k in tax for the upcoming year.

The taxes alone here having me looking elsewhere.


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In our state (NV) property tax increases are capped at 3% per year. So if you're paying $4k per year in taxes and they increase by the maximum, your tax bill the next year will be $4,120.

Seems insane but I'll take it! LOL

 

[MG0h3]

Holy cow, that house is unbelievably close to where I lived (0-5 years old).

My parents were renting, it was $100 per month. Similar layout to that one lol.



I have a customer who did one, her father had a big piece of property near a port on the east coast that he bought for cheap back in the 1930s (she is old). He died, kids inherited it, they did a 1031 exchange and bought a very expensive rental property. After 2 years of creating income on the property they can turn around and sell it and only pay taxes on the income from the rents. At least that's how she explained it to me.

I really don’t think that’s right.

Otherwise everyone would do a 1031 and never pay capital gains.

Curious how she pulled that off anyways as they are supposed to be “like kind”.

I just googled this again. Absolutely says yes, you pay them.

I have a coworker that owns millions in real estate and he said don’t do it.

If you keep rolling it into one eventual sale later on, you may be paying a higher tax rate.

Sell 10 properties in your life with 100k profit and you’re on the hook for 1 million. First 40k is not taxed so smaller portions are better

I recall another guy on here did that and was wondering why the state of CA pinged him every year regarding th status of his property.

It’s because when he sells it, he’s paying them there taxes. Plus the Fed.


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[AustinSN]

I really don’t think that’s right.

Otherwise everyone would do a 1031 and never pay capital gains.

Curious how she pulled that off anyways as they are supposed to be “like kind”.

I just googled this again. Absolutely says yes, you pay them.

I have a coworker that owns millions in real estate and he said don’t do it.

If you keep rolling it into one eventual sale later on, you may be paying a higher tax rate.

Sell 10 properties in your life with 100k profit and you’re on the hook for 1 million. First 40k is not taxed so smaller portions are better

I recall another guy on here did that and was wondering why the state of CA pinged him every year regarding th status of his property.

It’s because when he sells it, he’s paying them there taxes. Plus the Fed.


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Interesting.

Well I learned something.

 

[PhoenixM3]

Unless I’ve understood incorrectly, that’s just a deferral.

If you convert or sell later, you’re paying taxes on all of it. The tax code actually calls it a deferral.


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Sure, it's a deferral. Unless you want to sell and re-invest again. Or hold it until you die. Your kids won't inherit the tax hit.

 

[Mpoitrast87]

It’s crazy how different every market is…

Florida I4 corridor you can find some nice homes all ranging from 700k down to 450k with reasonable starter homes in the 250k range.

Memphis TN, that Market is gorgeous.

Same with KC Missouri.

Here in Colorado, Denver Metro…..

330k will get you this sweet little shit box lol

9260 Fir Drive, Thornton, CO 80229 | Zillow

9260 Fir Drive, Thornton CO, is a Single Family home that contains 1176 sq ft and was built in 1955.It contains 3 bedrooms and 2 bathrooms.This home last sold for $418,000 in February 2023. The Zestimate for this Single Family is $426,600, which has increased by $455 in the last 30 days.The...

www.zillow.com

I’d take that any day for that price considering what my area is like lol

 

[MG0h3]

Interesting.

Well I learned something.

Realtor I was working with once tried to tell me the same thing.

I see so many people say you won’t ever pay the taxes so I question myself. But I trust my friend/coworker and Google supports what he says.

It’s really a pain in the ass to be honest. I looked into it when I sold the last place but said to hell with it.

The money from the first sale goes into an escrow held by a third party. You have to have the properties identified before the sale of the first place and have 90 days from the sale to close on the new place.

Def has to be like kind.

Looked into it when I was selling the last place in Dec but what a hassle. Plus the urgency to buy before March22’ negated half the reason I sold the place.

Had to pay tax on the @150k I got out of it but at least it’s not hanging over my head on the next deal.



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[Klaus]

 

[PhoenixM3]

I really don’t think that’s right.

Otherwise everyone would do a 1031 and never pay capital gains.

Curious how she pulled that off anyways as they are supposed to be “like kind”.

I just googled this again. Absolutely says yes, you pay them.

I have a coworker that owns millions in real estate and he said don’t do it.

If you keep rolling it into one eventual sale later on, you may be paying a higher tax rate.

Sell 10 properties in your life with 100k profit and you’re on the hook for 1 million. First 40k is not taxed so smaller portions are better

I recall another guy on here did that and was wondering why the state of CA pinged him every year regarding th status of his property.

It’s because when he sells it, he’s paying them there taxes. Plus the Fed.


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That guy was probably me. I have to report to CA (each year) that we still own the houses which we purchased using the proceeds from the sale in CA. That state wants it's taxes, and unless I sell the property acquired in CO (and don't re-invest for property of equal or greater value), we would indeed get jammed hard on capital gains tax. I sold a property here two years ago (non-1031, rental property) and paid $45K in capital gains taxes, and another $10K for "investment tax". Still cleared $200K, but damn that tax hit hurt.

 

[MG0h3]

That guy was probably me. I have to report to CA (each year) that we still own the houses which we purchased using the proceeds from the sale in CA. That state wants it's taxes, and unless I sell the property acquired in CO (and don't re-invest for property of equal or greater value), we would indeed get jammed hard on capital gains tax. I sold a property here two years ago (non-1031, rental property) and paid $45K in capital gains taxes, and another $10K for "investment tax". Still cleared $200K, but damn that tax hit hurt.

****ers. Our tax system is a joke.

Love the whole narrative that “rich” people don’t pay taxes.

Ya right.

Poor people don’t pay taxes. They actually get more back than they pay in sometimes.


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[PhoenixM3]

****ers. Our tax system is a joke.

Love the whole narrative that “rich” people don’t pay taxes.

Ya right.

Poor people don’t pay taxes. They actually get more back than they pay in sometimes.


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I don't know at what level people would be considered "rich" but I'm certainly not there. I'd consider myself in the "lower well off" group. If I had servants, a cook, and a driver, I'd think that I'd feel rich.....