The Housing Market (2021)

[Neal]

I read this morning on Facebook friends in my area at home are seeing home sales with people offering 100K over asking. It makes me wonder if I should sell mine!!! I love my house but the area not so much but I have no clue where I'd want to live given a choice. This is part of the reason I have a RV, I'm out looking wondering where I would want to live someday other than where I am now. I don't know why the housing market is doing this, my hunch is one of two things: 1) The stock market has peaked and people want to take profits before an expected decline/collapse? 2) Expected interest rate rises, inflation, etc. so now is the time to capture loans? I don't know, I haven't searched for answers, I haven't googled it.

We all know the RV market has been on fire but we've attributed that to the pandemic. I face the same situation with my house in that this fall is an ideal time for me to sell my coach probably at the highest I could ever profit on this coach. I'm going to Newmar in September for the warranty reupholstering of the furniture and I'm having some other things done such as getting the carpet replaced since the furniture will be removed, saving on labor costs. After Newmar's work is done this would be an ideal time to sell the coach, it's also at that point in which most coaches sell, 4.2 years of age. But I love my coach, I've spent 3 years making it my own, the list of mods and additions is large but highlights being Summit Stainless, HWH Active Air, 1800W Solar with front A/C wired for solar, Victron web enabled system, Drainmaster gates with Sanicon all controlled from inside, LED lighting including underglow, under slides, and top side lighting both passenger and driver sides. Office setup, the list goes on. But the coach is PERFECT, perfect size, perfect running, everything is great (knock on wood). Why sell a coach that is perfect to you or do you do so simply for the financial timing of max profit opportunity?

So I'm faced with whether to capitalize on the housing market and also the RV market. Not a bad dilemma, most likely I'll sell neither but what is your opinion, what are you facing and how are you rationalizing the hot sellers market we're in now?

 

[Neal]

Please do not bring politics into this discussion. I realize there could be a relation to that situation but let's discuss outside of politicians names, politics, etc. Let's just discuss the housing and RV market as it is and any speculation as to why within those bounds.

 

[Kevin D Pem]

was not trying to do that. That is just what I heard.

 

[Neal]

No problem Kevin, it's okay, I just think some would complain and for all of our mental health let's just avoid going there. That speculation is far off from the current situation, I don't think the future election is driving the current events, I'll leave it at that to help others understand what you and I are talking about.

Why this is happening is one thing. To act on it is another and I welcome advice.

 

[Jabber Jaw]

Neal, as you know; we Sold the house in Rockville Va, to move to Florida. Two reasons, the tax advantages which Florida offers, and downsizing, but to an RV port home.
We caught the market at a pretty good time, mortgage rates at about the lowest I've ever seen them; so we actually took out a small mortgage to save some cash for travel, etc.
Regards selling, the market was trending upward, and we had several offers at $10K over asking price.

I would suggest looking into selling your Va. home, to take advantage of the exceptional prices, and then look at downsizing, maybe here in Florida (tax advantages) or another similar state.
Cash can be a motivator!

As for the RV market; I actually had a Dealer from Texas call (no idea where he got my info); but offered right at what I paid for my coach new! Now that's great, but no way am I selling my coach for a while. I say that to point out how "Hot" the market is at this time.
Since you have done so much to your coach, and it fits your needs, not sure that I would suggest selling & buying another, unless it is a "want to update" process for you. You invested so much time and effort to make it just like you want it. My advice.....keep it & enjoy it!

Then take all the money you make from selling in Virginia, and find a place that will make you happy; or like a lot of folks, "Full Time" & invest the rest!

Hope whatever decisions you make, will add to your happiness! Good Luck!

PS: Florida living is saving about $900-$1,000 a month vs. Virginia

 

[Scooterfan]

Such a broad question with a zillion possibilities. However for us it's simple. We stay put because we can be with family within six hours any direction. Neal, you travel all around this country and know there are countless wonderful places to own a home, but the intangible attraction is where "home" is for you. If we didn't have family we would build an RV-condo on some acreage in Idaho and use that as a home base. But that's not my suggestion for you (of course)...you do what works for you. Although I would have thought housing prices would have started a decline by now, it appears to be getting stronger. So maybe there is no decline. Maybe your house just keeps appreciating thus making selling now moot. You said no politics (but), we sold stock in anticipation of a decline with a new administration and that's proven to be wrong (so far). So good luck my friend with your dilemma. It's one that plagues us all ?

 

[murphysranch]

I believe, having worked for a bank as a contractor for a whooping four months, that the housing market has responded to the lower interest rates that have been available the last two years. Millennials who thought they'd never own a home, found a way with the 2.++ something rates and a 90/10 loan to equity ratio to really stretch themselves. It does vary widely within the US and the states, as we all know.

Put the home up for sale. Pocket the money. Then as you travel, you've got your wad just waiting for your next landing place. It will give you some peace and motivation.

 

[Joe Hogan]

Real Estate is a reasonably good hedge for inflation, especially if you can finance it on the cheap. Are there that many smart people out there hedging for inflation, doubtful.
IMO there are lots of lemmings following some smart people, and lots of folks that have been driven from their home state due to their home economic climate...
Currently I am working with family members to sell several North East Properties. Moving the investments south to FL.
The Florida Real Estate market is nuts. Property in my community are selling in hours at full asking price or above.

 

[NWIP]

I can’t really answer why but can say that I have 2 properties in So Cal that my father left and am getting the same story, people are getting multiple offers above asking price. Hope the market stays hot while we work thru the estate matters, and can get them on the market.

We sold our house in 2017 when we decided to go full time. Original plan was to purchase a condo in Florida, then decided to travel before investing in real estate. Now I’ll wait till the market soften. We did buy a RV lot where we will spend winters and travel the other 7 months.

 

[kayakterp]

For me it’s a catch 22, if you sell then yes it’s good profit but if you have to turn around and buy something else you’re going to pay. My sister & husband finally retired and want to downsize but if they sell they’d have to turn right around and buy at the same inflated market so she’s staying put until she has a different plan.
Same goes with RV, if you sell and plan to buy again you’ll pay inflated prices for a different RV. Being you have what you want and made it your own and the size is perfect, it will be harder to replicate that for a different RV

 

[BGMAC]

Well, the market is doing the same thing around Nashville and Memphis, but in our area which is one of the poorest counties in Th. It has been cheap and stable. If your not worried about working, or you can bring your own work with you, I would choose an area like I’m in. Property is fairly cheap, houses are cheap, no building permits, and taxes are cheap. If your going to travel around. What does it matter?

 

[FL-JOE]

I know you have at least found conversations about full timing interesting Neal, not that you are actually thinking of doing it, but.......

The housing market is going nuts right now. The price of a 2x4x8 a year ago was under $2.00 on sale. Now you are lucky if you can buy one for under $7.00 on sale, with a normal national price of almost $8.00. New construction has almost doubled in some parts of the country and I think that is the main driver on existing home prices rising.

The next couple months would certainly be a great time to sell a home, invest the money, and live in an RV for awhile IMHO.

 

[BuckyII]

The next couple months would certainly be a great time to sell a home, invest the money, and live in an RV for awhile IMHO.

Agree. Great time to sell IF you don't need to turn around and buy another place. Already having an RV is a perfect way to sit on the home profits until the housing market cools down again. That is, if you can handle fulltiming"for awhile.

 

[Neal]

I would not buy another house as I don't know where that would be, not sure I'd even buy again as I don't like being anchored. I did watch a video today that I think shedded some light on the housing market which @FL-JOE mentioned above - LUMBER. Builders are trying to talk buyers of new homes out of their contract by telling them they can't complete on time, or even near the agreed time because they want the buyer to cancel the contract. They can now sell at a much higher cost so the builders are playing games to get out of contracts. But the lumber situation seems to be what's driving this situation. My issue with selling is my 81yo mother I help out by not living too far from her. I do have a sister 45 minutes away from her and this long trip I'm on has been a test of that support system. Some here know me well and know selling my house for this reason is unlikely. I've owned one other house in my life while in the military and selling that sucked, I lost big. This house I think the prices have finally come back to where I bought in 2005, then the situation currently is a tough situation I have to think about. But who knows, could the housing market double in a few years to come, could it get even better or completely tank which is possible with inflation and expected interest rates I think will rise?

As to my RV. Yes, I love it. Yes, there are things I could do better. But the one reason for selling and buying something else is storage space. Newmar has really improved storage in the basement and I'd go with a 43 or 45 as I cannot pack light. Granted, I added a Dometic cooler which is in one of the best compartments in the Ventana for storage. If I gave that up I'd gain a lot of space back. Quite frankly I've hardly used it other than to store beverages I really didn't need to store. But again if I was to go fulltime which I would really love then I'd want more space.

I agree and have also mentioned those that are selling in this sellers market are re-entering right back into the market as a buyer so it's a wash.

Tough decision, have to really think things through and I have until summer to figure out the house, fall for the RV. Then I have to figure out capital gains and how that's going to play in.

 

[FL-JOE]

I would not buy another house as I don't know where that would be, not sure I'd even buy again as I don't like being anchored. I did watch a video today that I think shedded some light on the housing market which @FL-JOE mentioned above - LUMBER. Builders are trying to talk buyers of new homes out of their contract by telling them they can't complete on time, or even near the agreed time because they want the buyer to cancel the contract. They can now sell at a much higher cost so the builders are playing games to get out of contracts. But the lumber situation seems to be what's driving this situation. My issue with selling is my 81yo mother I help out by not living too far from her. I do have a sister 45 minutes away from her and this long trip I'm on has been a test of that support system. Some here know me well and know selling my house for this reason is unlikely. I've owned one other house in my life while in the military and selling that sucked, I lost big. This house I think the prices have finally come back to where I bought in 2005, then the situation currently is a tough situation I have to think about. But who knows, could the housing market double in a few years to come, could it get even better or completely tank which is possible with inflation and expected interest rates I think will rise?

As to my RV. Yes, I love it. Yes, there are things I could do better. But the one reason for selling and buying something else is storage space. Newmar has really improved storage in the basement and I'd go with a 43 or 45 as I cannot pack light. Granted, I added a Dometic cooler which is in one of the best compartments in the Ventana for storage. If I gave that up I'd gain a lot of space back. Quite frankly I've hardly used it other than to store beverages I really didn't need to store. But again if I was to go fulltime which I would really love then I'd want more space.

I agree and have also mentioned those that are selling in this sellers market are re-entering right back into the market as a buyer so it's a wash.

Tough decision, have to really think things through and I have until summer to figure out the house, fall for the RV. Then I have to figure out capital gains and how that's going to play in.

Our situations are somewhat similar Neal. My Mother (92 years old) needs help from time to time. We camp close to her every year for anywhere from 2 to 3 months. The rest of the year if something would happen I can either get there by RV within 3 days, or fly if need be. My sister is only 90 miles away from her so that helps.

As far as capital gains goes on selling your home, it used to be around $250,000 profit for a single person ($500,000 for couples) before you had to pay anything.

It may be time to put "pin to paper" and see exactly how much it is actually costing you to spend what little time you do in your sticknbrick. Add up all costs associated with your crib (property taxes, insurance, utilities, maintenance, payment/interest, etc.....). We have friends we winter with and sometimes do a little traveling with during the year. They recently figured all of this up because they only spend 2 months a year in their Kentucky home. It was costing them about $7,000 a month for the two months they actually lived there!

 

[Neal]

The other factor to weigh in is storage costs. I could not and would not sell everything. My S&B serves as my storage unit as well as my home. I know I'd have to add up total monthly costs, factor in real-estate as an investment but it has NOT been an investment I don't believe since I bought it at the peak of the bubble in 2005. Maybe we are not entering into a new bubble? But if I sold I'd have to store what I would expect to cost at least $500/mo in storage costs. I've also thought of buying a condo in St. Petersburg FL area. I do like the west coast of FL but there are some negatives I have to weigh as well. And again, I'm sure home prices are not on a decline there, so if you sell now you're going to buy right into the madness on the other side.

 

[Retired]

Im in Middle Georgia. Not my first, second or third choice.

We had a house built 3.5 years ago for 162k, no mortgage. All brick, laminate flooring, granite counter tops, high ceilings. 1325sf, all we wanted, small lot, low maintenance.

Taxes and insurance are low, low crime rate, low cost of living.

At age 62 Georgia doesnt tax the first 35k in retirement income, it goes up to 65k at age 65.

Everything we need is near the house. I use about a tank to a tank and a half of gas in the F150 every month.

Atlanta is an hour away. Orlando is 6 hours away, Savannah is 3 hours. I like Florida but there is just to many people there, to much traffic and if you are in S. Florida, pack a days provisions, it takes forever to leave. Forever and a day if it is a hurricane evac.

Wife will work another 4-6 years or until she has had enough. She has M-J-J off so we can travel every summer and chase the cooler weather.

Middle Georgia is a good compromise.

 

[murphysranch]

Every state is soooo different! In so many ways. Climate, taxes (personal, sales, real estate), housing, food, gasoline, outdoor activities, etc.

Washington state has no income tax, which is benefiting my Software eng DD and her hubs. It wouldn't help me as I'm low income at the moment.

Oregon is in a housing crunch, which was exacerbated by the many fires last fall that destroyed entire towns. Rebuilding is very very costly now due to lumber and supply prices. The Cement fiber siding (hardi board) used to be about $25 or so a sheet and now is $42 a sheet. (I just went to Lowes and HD online and its over $50 a sheet!!). Appliances are on a 5 month back order and people are paying anything and more, for them. Roofing materials are in short supply. Not a good time for builders as someone explained above, if you've presold your new spec.

 

[Jim]

Taking advantage of the housing market is great but if you're looking to take the cash and build a home, then you might want to reconsider, at least for awhile. Lumber has hit an all time high, at least around here it has. A piece of 3/4' plywood is pennies shy of $100.00, and 2x4's have hit as high as $13.00. It's unbelievable!

We were going to complement the RV park by building 3-4 cabins on the mountain, but have decided to take a watch-n-see approach for a bit. Not sure what's driving this crazy lumber market, but it's scary to think what building a house would cost at those prices.

 

[Retired]

Canadian imports are down, some mills went idle last year and demand is very high.

Sometime later this year it should return to normal.

If you can sell and avoid capital gains, now is a good time to do so. A friend just sold land in TN and was hit with a 28k capital gains tax bill from the feds. Ouch.