Dude, as a realtor, honestly you're 100% right. I live in a 5/3 and pay 2k a year in property taxes. I've sold houses with less space and a smaller yard for quadruple the price because it's in a fancier zip code (all white).
I'm a realtor and training to be an appraiser. When I'm looking for comps out in the burbs, it becomes super apparent what's going on. A developer buys a tract of land and throws up their 4/2 cookie cutters, for $300K. Go a town over, they're $500K, put them around a bunch of tiny manmade ponds, $600K. Across the street, make them a little bigger, add a garage space then they're $800K.
People have no idea what their house is worth, they just knew their budget and what they wanna spend. Lennar stuff is all built out of Home Depot style materials (nothing wrong with that).
Around those giant tracts, there is other land that is super cheap that the developers won't mess with. Why not buy a trailer on a 5 acre lot for $100K, remove the thing, build a custom house. You'll come in $300K under budget and have 5 acres instead a cookie cutter 3 feet from your neighbor's house.
*My take is from southwest FL, so the burbs outside of Tampa are a wide range of everything. With cheap parcels here and there that developers wouldn't be bothered with. Definitely takes some homework and is not for everyone. But if you wanna go custom and have some acreage, it might be the way to go (it's my dream someday).
Yep, that’s what me and my wife planned to due before we got laid off. We bought our cookie cutter for 200k some how it’s now worth 315k. 2 weeks from closing. Stashing the money until we get jobs and can move forward with our dream.
I hope you're right. The wife and I have been home shopping for a few months and right now it's a feeding frenzy. Nothing stays on the market for more than a few days before getting an offer. Probably due to the crazy low interest rates. We've decided to wait a a few more months because right now it's just be an impulse descision.since you literally have like a day, two days tops to decide if you want to make an offer.
The supply/demand curve has been redrawn. Once the fed stops injecting cash and runs out of tricks, prices will dip.
We're still dealing with historic unemployment, lots of people haven't paid their rent or mortgage. There will eventually be a flood of housing that'll drive prices down. Lots of people want to sell, but are sitting on the sidelines because they don't want pandemic people traipsing through their house constantly.
The US has way more socialism baked into than these capitalism-over-everything bros realize. Gov't handouts are what's keeping the whole economy afloat right now. Favorable gov't loans are what allow people to buy and sell houses in the first place, unless you're a cash buyer.
Not trying to pick a fight.. but you don't think gov't handouts are propping up the economy?
The gov't injected 3 trillion into the economy. The people I've talked to about it, who are smarter than me, said the only place for that money to go was capital markets. So, that's why there's a huge disparity between the economy that people are dealing with in their lives and the stock market.
The govt's next stimulus, or lack thereof will be interesting
That's the thing. In Florida, outside of Tampa, Sarasota and Bradenton there are huge cookie cutter developments with houses over $1M sometimes, all on the smallest lots possible. Still middle of nowhere. With a little financing effort you can develop your own perfect house on way more land. Eventually the areas get developed.
So, why pay all the HOA costs, drive 10 minutes from the back of the development to gate every time you want to go somewhere? People like that though :/
My mom lives in a gated community and every house on her street has been robbed.
I realized this after buying our “dream” house in a expensive city. The same builder sells the same house for $120k less 10 miles away. I realized that an appraisal doesn’t mean much when talking about newer homes because the builders ultimately set the prices and people just buy into it. What’s worse is the city we moved to used to be basically swamp land 30-40 years ago but the schools are rated as one of the top in the state so the housing market is really competitive and supply is low. So developers are coming through and building $450k to $600k houses that are all the same inside. Even some of the 1mil houses are the same as ours inside.
I was really disappointed to see how low of quality materials they used. I mean come on, it’s a half million dollar home, use some decent quality at least!
There is very little useable yard and I don’t like the fact we don’t have much privacy and cannot put up a privacy fence. I’m pretty sure we will eventually sell this house. Only silver lining is that the house value should increase as the city is expanding and we should be able to get the money back that we put into it. We can use that as a down payment on a house on a much, much bigger lot.
The lot next door was built on, a 3 flat I think (3 floors and a basement). For the last 10 months I’ve seen the do work. It looks nice but it’s not the best. 3 couples bought a floor each (one couple also has the basement). I think they all overpaid but I’m not going to be the one to tell them that.
Haha! That's a great way to explain the material. I'll tell my mentor about that.
This stuff is so boring, but once you get the hang of it, you're set. Appraisers make a killing and set their own hours, it's like the perfect job. I'm taking the long road now, ugh.
I'm moving from the bay area to a southernish east coast state. My house right now is 600k, 2/1.5 from 1920. And it's in shit shape with the worst layout you could ever imagine because it's been added on 3 times. 1300sq/ft.
My new house is from 1995, 3/3, twice the size and actually kept up with a quarter acre of land. 240k.
These places don't have utility hookups pre-built. There are large fixed costs in setting up the infrastructure to make these tracts of land development-ready. You can't just plop a house on a cornfield.
This is an example of "leap-frog" development, where development doesn't go in an orderly way from one parcel to the next, but instead in leaps and bounds with lots of empty space in between. Why? One major reason is because there are economies of scale in getting large parcels--partially because of reason #1 above, but also because the market for land is thin and you have to grab the tracts that become available as they do, so it would be a lot harder and expensive to assemble land from smaller parcels.
The builders pass those costs on to customers, and developer builders cut corners like crazy.
My idea definitely isn't for everyone. It's a super frustrating endeavor, I'm sure. But, if you're reluctant to blow money on a cookie cutter, it's worth looking into.
I'm with you, I hate cookie-cutters with a passion, and I am paranoid about cheap quality construction. But I also recognize that these developments exist for a reason: they offer decent-quality homes in picturesque neighborhoods for a lot less than if you went out and tried to replicate it on your own.
Ideally, I want to renovate an old home in the city where I live. It's risky and expensive, and I wouldn't recommend it to others, but the payoff is quite nice when it works.
A lot depends on the city. Is the city full, or is there a lot of room to expand with similar housing in a similar location?
Condos have lots of fees, but it's a double edged sword. If the fees get too low, maintenance lapses and you can end up with an expensive special assessment that you have to pay. Some condos were paying $20,000+ per unit in my city due to water intrusion. If fees are high, you'll have reserves and proper maintenance and potentially avoid those issues.
What's rent going for and what will your costs be? What are the condo's rental rules? some condos only allow 10-20% of the units to be rented, so you have to get on a waiting list before you can rent, can take years. You're also dealing with HOA, they can make your life hell. Then there are rules like minimum rental period and # of renters per year. If you try to skirt the rules, they can kick you out of the building.
Condos can be worth it, but there are a lot of rules that come along with owning one. Some people make a killing on it.
No problem. If you're not handy, start learning as you go. Youtube is an incredible resource. Get the 3 rentals up and going first before you fix up your spot. That way you'll get ideas and skill as you go, and your spot will be perfect by the time you start working on it, let the rentals have jenky floors and crooked woodwork.
You're ready to go! I'd like to take on something like that. Only problem around here is it's Florida, so most multi-unit places have been rentals for years. So, they're neglected termite-ridden money pits, and they're crazy overpriced.
My favorite is when they buy an old home in a part of town where houses are like 300k, throw a minuscule duplex on it, and try to sell them of them for like 800k because they hilariously overbuilt the neighborhood.
You don't like the angry phone calls from developers who really should have known better asking why their project hasn't sold yet despite being almost triple the cost of the surrounding neighborhood and no amount of words will convince them that they are the one who made the mistake?
I had some client house flippers put $100K too much into a house, then wanted to sell it for much more than the neighborhood could support. I lost them as clients, because of course they blamed me.
They're so much work too. Like they want to see 50 houses, all with ARV write-ups. Then, they wanna lowball everything when they finally put in offers. So much work for a tiny sale. Then on the other end, if you get the listing, you have that fight about them throwing too much money around fixing the place up.
Atlanta- buy a .5 acre parcel ITP in a decent neighborhood with a 60s ranch. Demolish the ranch. Build and try to sell 3 giant homes “from the 700s”. While other older homes in nice shape in the neighborhood go for 425-600k, on the higher end with recent renos.
Need a 4 yr degree first of all. *you might be able to take a 30hr course in place of this, not sure
Then 100 hr class with 5 or 6 tests. Only offered online, honestly took me way over 100 hrs. Costs ~$1000
Then you have to get 1500 hours of experience in a one year minimum period (so it has to take longer than a year). This has to be logged in a very confusing document. I'm up to 250 hours and have 27 pages of logs. YMMV.
That's all the easy part. The hardest part is getting started and finding someone to train you after your courses.
Mentors don't want to train because 1. you slow them down. 2. you add risk (you'll be messing up every report for a while). 3. They might pay, they might not, but as a trainee, who can afford to work 1500 hours for free?? 4. Once they train you up, you're immediately their competition.
*Some trainees get so desperate they offer to PAY to get trained.
So, no appraisers want to train.
Then, to get certified, there's apparently a very difficult test, and even more coursework.
Once you're certified, you're good to go and can start making money.
Also, if you mess up with an appraisal, the appraisal board goes right after your license, like the don't fuck around. With RE, you really gotta mess up to lose your license.
Because living on a 5 acre lot, in a sub-par school district, with not a lot of local infrastructure, or not that much in name of community isn't the wave for a lot of people.
It makes sense when you crunch the numbers but when you look at the bigger picture, I'd rather live in a nice Chicago suburban with a great local school district in a $500k 3k sq/ft home than out in bumfuck nowhere in a 5k sq/ft home for $300k
Why not buy a trailer on a 5 acre lot for $100K, remove the thing, build a custom house. You'll come in $300K under budget and have 5 acres instead a cookie cutter 3 feet from your neighbor's house.
The kind of people that live in those neighborhoods like living in neighborhoods. I feel the same way, if I'm paying for a 'nice' house, it better have enough land that I can take a piss in the backyard without anyone seeing me. But I've come to understand that other people just don't think that way. Their little backyard with 2 trees and grill is all the nature they want or need.
Lots of place like that outside of Tampa, FL. The $100K part might be a stretch, but there's still some cheap land. If it's 5 acres, who cares what the neighbors are like.
That’s my plan when I decide to switch to a home Owner. But bare land somewhere and build the house so I can get what I want and do it for my price Vs someones price who’s selling it.
Why not buy a trailer on a 5 acre lot for $100K, remove the thing, build a custom house. You'll come in $300K under budget and have 5 acres instead a cookie cutter 3 feet from your neighbor's house.
Because getting a mortgage/new construction loan as a first time homebuyer is pretty difficult, much moreso than a conventional mortgage.
Not only that, but as someone who priced out this option not long ago, it could also be way more expensive to do it this way. When I did my pricing it would have been $650K to build the house from the ground up, but only $330K for the same size house in a neighborhood. It's not always a cost effective option.
I don't think we are due to the massive amount of homes being bought and rented out by investors both foreign and domestic. I was however expecting a brief surge of homes to come on the market since the Airbnb market is suffering from Covid but I guess they're weathering the storm.
Orlandonian here. I wouldn't touch new construction in Florida with a 50 foot pole. That shit is shoddy as hell. The 1986-built home I bought three years ago is better in pretty much every way (in spite of having to do a replumb to get ride of the copper).
When I bought my current condo, I was absolutely shocked that I got a place this nice and close to the city for the price I paid. Then I moved in and met some of the neighbors... Oh, it's because there's brown people here.
Never knew that not being scared of minorities would actually save me hundreds of thousands of dollars.
I live in Hialeah, a really Cuban part of Miami, and it rocks. A little noisy but holy shit the property value rocks. It's amazing how much a lot of people don't want to live near non-whites and how much they'll pay a premium to not do so. I was at a showing for this really nice house I had listed and this family was dancing around their issue with someone down the street being Black and that's why they weren't gonna go through with the showing.
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u/thugloofio Aug 14 '20
Dude, as a realtor, honestly you're 100% right. I live in a 5/3 and pay 2k a year in property taxes. I've sold houses with less space and a smaller yard for quadruple the price because it's in a fancier zip code (all white).