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I think eventually new home prices would have to drop, unless new home builders are just going to roll the price of the rate buydown into the MSRP. Perhaps that will just continue indefinitely. Could see a scenario where existing homes have to adjust pricing. Eventually buyers will wake up to the fact that it's essentially the new/used car phenomenon where you can get 0-2% financing on a new car, or 7+% on a used car at a comparable price. Add in the fact that one product is brand new, with a warranty and one is not, and the choice is obvious.
I'm a builder. You cannot build a new 2000sf home ANYWHERE, NOT including land it cost $200k to build, than I mark up plus cost to sell ect I'm at $300k on just the home no land cost.... labor is getting scarce in the trades and so more expensive. Materials came down a little from covid but will never return to pre covid prices. Inflation. Stole all our wealth.
When was the last time we saw a major city like Austin take a double-digit dive in real estate prices? Go ahead, ponder that one-I'll wait. Spoiler alert: it hasn't happened in 11 years! This is like the housing market waving a giant red flag, and people are just scrolling past it like it's another cat meme. "Oh, it's just a few areas. No big deal. Nothing to see here." These folks wouldn't notice the Titanic sinking even if they were the ones steering it into the iceberg!
But inventory is still historically low, and the market has self-corrected often during the last decade. We don't 'know'.....but RE prices can at most see a small correction it appears.
I'm in Austin even with the cuts it's still way higher than it was. This is an adjustment it cost too much to build for you to see affordable houses anytime soon.
Isn’t buying down the rate lowering the price indirectly? They just want don’t want the home market prices to drop. So they’re putting out incentives. Either they lower prices to accommodate higher interest rates or the interest rate down themselves.
It's a concession but the concession in rate is preferable to both the seller (the builder) and the buyer. The seller isn't faced with cutting prices and angering earlier buyers and the buyer gets a much lower payment than if the price were cut.
@@TheEducatedHomebuyer So who would be buying down the rate? Would it be the builder? Or is there some type of state program that is funding these rate buy downs?
My co-worker just bought a brand new home in Santa Paula...the builder was very aggressive, and gave a 4.9% mortgage to sell the home the them. The loan actually starts out at 2.9, then 3.9 and finishes at 4.9. I haven't heard of this stuff since 2008 etc..
Builders have been heavily incentivizing with financing concessions ever since rates spiked in 2022. It's a big reason why new home market share is 3x what it was in 2014. Builders are still hitting 20% profit margins after 3-5% financing concessions.
You have any advice for a possible 1st time home buyer in Las Vegas (yes I'm in my mid 40s), where my spouse and I are both retiring from state jobs with pensions in less than 9 years - but are currently in a smaller 1800 sq. ft. 2-story, older (22 year old) home with very low HOA ($150 a YEAR) in a fairly good part of town? My now wife purchased the home in the early 2000s for a great price back then before we got married (we have built around $300k in equity), and we are nearly done with the mortgage (should be paid off right before retirement). We are on the fence in the next 2-3 years - we want to get a newer single-story home so we have no stairs as we get older...but many of the homes of this type are fewer in number for purchase and from what we have seen so far majority of them are priced high with high tax bills, and are in areas with significant HOA monthly dues. We noticed with these newer homes the backyard space isn't nearly as much as we have with our current home, newer lots seem smaller. I'm not sure if we are ready to take on another mortgage for 30 years in retirement, although we would keep the house we are in now for a long-term rental to offset the cost of a new home. Our other option into retirement was to take a rehab loan out of about $150k-200k to fully redo our current home with some needed repairs, TLC, and modern amenities to make us comfortable. We feel the payment in retirement may be lower and more manageable for us to handle. Of course this would mean we may never be able to move again to another home. I know it's a lot to ask and I apologize, but it's a big decision we don't want to make a big blunder on. Any wisdom on what may be the smart move in our current housing climate? Thanks!
Based on your detailed situation, here's our perspective: Given your circumstances - nearly paid off home in a good area, significant equity, and approaching retirement - your best financial move would be to stay and renovate your current home. Here's why: Taking on a new 30-year mortgage just before retirement would significantly impact your monthly cash flow, even with rental income from your current home Your current home has advantages that are hard to replace: ➡️ Extremely low HOA fees ($150/year vs likely $200+ monthly for newer homes) ➡️ Larger lot size ➡️ Established neighborhood ➡️ Nearly paid off mortgage A $150-200k renovation loan would allow you to: ➡️ Add aging-in-place features like a first-floor primary suite ➡️ Update and modernize the home ➡️ Address needed repairs ➡️ Keep your favorable location and low carrying costs ➡️ Have a much lower payment than a new mortgage on a $500k+ home The scenario where moving might make more sense is if renovating wouldn't adequately address your needs (like if adding a first-floor bedroom isn't feasible). In that case, you might consider selling and buying a single-story home, but I'd recommend doing this before retirement while you still have employment income. Shoot us an email if you need any more feedback: info@theeducatedhomebuyer.com
@@TheEducatedHomebuyer thanks for the detailed advice guys! My wife & I have some things to think about! One great advantage to our current home now is that the master suite is actually located on the 1st floor! She was thinking ahead on that one when she purchased way back then. You have got a new sub, I hope to learn more along on this home journey! You can guarantee we'll keep watching the channel and probably shoot you an email (or 10) too!
I ask if there was any promotion or buy downs at a new build since I saw most of the initial phase houses are now being sold by investors. Instead I got laughed out of the room and was shown their deal is having an extra room for 1.7mil now. 😅
The builders have better data than just about anyone. If they aren't offering incentives, it means they don't need them to move the product. If you read/listen to the quarterly earnings calls for the big national builders, they're very open about using dynamic incentives to make sure they aren't sitting on homes. In one part of the country, you may get a great concession package. In another part of the country, or sometimes even the same state, you may not get anything.
Dude's, you have been continuing to gas light the viewers. 1 simple argument. If there is so much demand in the NEW housing market, why the heck does DR Horton and Lennar - the top 2 builders in the US have "black friday deals"? Like New houses are a kin to shiny TV's or some fancy blanket sales at the Mall or big box retailer. One does not need any details like, oh, these builders are ONLY discounting rates, or these builders are trying to move inventory by offering incentives. Anyway, any or all of your explanations ONLY run CONTRADICTORY to your statement that things in the NEW HOUSING MARKET are GREAT. If they are so great, WHY are the Top 2 Builders or any Home Builder in the US offering "BLACK FRIDAY" deals. Has the public seen "Black Friday" deals for New houses in the past years. Can you name them or provide any evidence of that? You fellows are part of the industry and are the problem. Continue to gas-light people into buying things they cannot afford.
Yes....all of the companies that flooded your inbox with Black Friday/Cyber Monday offers are on the verge of going bankrupt....otherwise they never would use such marketing tactics....thanks for enlightening us and saving our audience from the impending crash! Much appreciated.
@@TheEducatedHomebuyer Wow, such an arrogant reply. Its not surprising for the so called "non-doomsday", "macho/bravo" bros who keep gas lighting housing market (this includes the paid puppets at CNBC etc.) see everything other people say with cynicism. Dude, there is a HUGE DIFFERENCE, I repeat HUGE DIFFERENCE between getting a mobile phone or a Flat screen TV on Black Friday Deals VS. a BRAND NEW HOME. You have conveniently NOT ANSWERED the question. How often does any one see Black Friday Deals on BRAND NEW HOMES from TOP BUILDERS. If everything is "hunky dory" in "NEW Housing" land, why are the builders having "Flash" sale or Black Friday deals to everything in between. Where is your so called "DEMAND". BTW, my point was NOT about HOME BUILDERS going bankrupt, you are completely misreading things.
If you yell it in all caps, it makes it true....if you watched the space at all, you'd know the "black friday" sale is no different than the incentives they've been offering for over 2 years, just with a fancy name.
🤣🤣🤣🤣 It's funny how 10% of the viewers are convinced we're far left, blue state, ultra progressive liberals....another 10% is certain we are Ultra MAGA Trumpers. Which group you fall in tells you far more about yourself than it does about us. Thanks for watching.
✅Connect Directly With Our Team - www.theeducatedhomebuyer.com/expert
⏩Mortgage Interest Rates Will Stay HIGH - ua-cam.com/video/CY07hb_6XXQ/v-deo.html
⏩The Housing Market Is About To SHIFT - ua-cam.com/video/avjEiAir5u8/v-deo.html
It's all about price. On the sidelines waiting for now... but the prices are way too high for what's out there. It's just not affordable.
It's a personal decision. You have to be comfortable with the payment. If you aren't, then it's absolutely the right call to hold off on buying.
This economy is not working for Americans. I earned 100k a year and I can’t afford a home. That doesn’t make any sense.
It is not a house. It is а shed.
I think eventually new home prices would have to drop, unless new home builders are just going to roll the price of the rate buydown into the MSRP. Perhaps that will just continue indefinitely. Could see a scenario where existing homes have to adjust pricing. Eventually buyers will wake up to the fact that it's essentially the new/used car phenomenon where you can get 0-2% financing on a new car, or 7+% on a used car at a comparable price. Add in the fact that one product is brand new, with a warranty and one is not, and the choice is obvious.
I'm a builder. You cannot build a new 2000sf home ANYWHERE, NOT including land it cost $200k to build, than I mark up plus cost to sell ect I'm at $300k on just the home no land cost.... labor is getting scarce in the trades and so more expensive. Materials came down a little from covid but will never return to pre covid prices. Inflation. Stole all our wealth.
When was the last time we saw a major city like Austin take a double-digit dive in real estate prices? Go ahead, ponder that one-I'll wait. Spoiler alert: it hasn't happened in 11 years! This is like the housing market waving a giant red flag, and people are just scrolling past it like it's another cat meme. "Oh, it's just a few areas. No big deal. Nothing to see here." These folks wouldn't notice the Titanic sinking even if they were the ones steering it into the iceberg!
But inventory is still historically low, and the market has self-corrected often during the last decade. We don't 'know'.....but RE prices can at most see a small correction it appears.
I'm in Austin even with the cuts it's still way higher than it was. This is an adjustment it cost too much to build for you to see affordable houses anytime soon.
Isn’t buying down the rate lowering the price indirectly?
They just want don’t want the home market prices to drop. So they’re putting out incentives. Either they lower prices to accommodate higher interest rates or the interest rate down themselves.
It's a concession but the concession in rate is preferable to both the seller (the builder) and the buyer. The seller isn't faced with cutting prices and angering earlier buyers and the buyer gets a much lower payment than if the price were cut.
@@TheEducatedHomebuyer So who would be buying down the rate? Would it be the builder? Or is there some type of state program that is funding these rate buy downs?
The national builders pay for the rate buydown through their wholly owned or affiliated mortgage companies.
My co-worker just bought a brand new home in Santa Paula...the builder was very aggressive, and gave a 4.9% mortgage to sell the home the them. The loan actually starts out at 2.9, then 3.9 and finishes at 4.9. I haven't heard of this stuff since 2008 etc..
Builders have been heavily incentivizing with financing concessions ever since rates spiked in 2022. It's a big reason why new home market share is 3x what it was in 2014. Builders are still hitting 20% profit margins after 3-5% financing concessions.
You have any advice for a possible 1st time home buyer in Las Vegas (yes I'm in my mid 40s), where my spouse and I are both retiring from state jobs with pensions in less than 9 years - but are currently in a smaller 1800 sq. ft. 2-story, older (22 year old) home with very low HOA ($150 a YEAR) in a fairly good part of town? My now wife purchased the home in the early 2000s for a great price back then before we got married (we have built around $300k in equity), and we are nearly done with the mortgage (should be paid off right before retirement). We are on the fence in the next 2-3 years - we want to get a newer single-story home so we have no stairs as we get older...but many of the homes of this type are fewer in number for purchase and from what we have seen so far majority of them are priced high with high tax bills, and are in areas with significant HOA monthly dues. We noticed with these newer homes the backyard space isn't nearly as much as we have with our current home, newer lots seem smaller. I'm not sure if we are ready to take on another mortgage for 30 years in retirement, although we would keep the house we are in now for a long-term rental to offset the cost of a new home. Our other option into retirement was to take a rehab loan out of about $150k-200k to fully redo our current home with some needed repairs, TLC, and modern amenities to make us comfortable. We feel the payment in retirement may be lower and more manageable for us to handle. Of course this would mean we may never be able to move again to another home. I know it's a lot to ask and I apologize, but it's a big decision we don't want to make a big blunder on. Any wisdom on what may be the smart move in our current housing climate? Thanks!
Based on your detailed situation, here's our perspective:
Given your circumstances - nearly paid off home in a good area, significant equity, and approaching retirement - your best financial move would be to stay and renovate your current home.
Here's why:
Taking on a new 30-year mortgage just before retirement would significantly impact your monthly cash flow, even with rental income from your current home
Your current home has advantages that are hard to replace:
➡️ Extremely low HOA fees ($150/year vs likely $200+ monthly for newer homes)
➡️ Larger lot size
➡️ Established neighborhood
➡️ Nearly paid off mortgage
A $150-200k renovation loan would allow you to:
➡️ Add aging-in-place features like a first-floor primary suite
➡️ Update and modernize the home
➡️ Address needed repairs
➡️ Keep your favorable location and low carrying costs
➡️ Have a much lower payment than a new mortgage on a $500k+ home
The scenario where moving might make more sense is if renovating wouldn't adequately address your needs (like if adding a first-floor bedroom isn't feasible). In that case, you might consider selling and buying a single-story home, but I'd recommend doing this before retirement while you still have employment income.
Shoot us an email if you need any more feedback: info@theeducatedhomebuyer.com
@@TheEducatedHomebuyer thanks for the detailed advice guys! My wife & I have some things to think about! One great advantage to our current home now is that the master suite is actually located on the 1st floor! She was thinking ahead on that one when she purchased way back then. You have got a new sub, I hope to learn more along on this home journey! You can guarantee we'll keep watching the channel and probably shoot you an email (or 10) too!
Good stuff guys smashed the thumbs up 👍
Thanks 👍
@TheEducatedHomebuyer your welcome the knowledge you guys share is priceless 😀
Thank u. For the info. Makes me def not listen to them.
Resale, and refinance are the keystone of the market… without this…. new home sales don’t have a chance…imo…😬
Location loca, L… is paramount in this “new” normal…
I ask if there was any promotion or buy downs at a new build since I saw most of the initial phase houses are now being sold by investors. Instead I got laughed out of the room and was shown their deal is having an extra room for 1.7mil now. 😅
The builders have better data than just about anyone. If they aren't offering incentives, it means they don't need them to move the product. If you read/listen to the quarterly earnings calls for the big national builders, they're very open about using dynamic incentives to make sure they aren't sitting on homes. In one part of the country, you may get a great concession package. In another part of the country, or sometimes even the same state, you may not get anything.
Dude's, you have been continuing to gas light the viewers. 1 simple argument. If there is so much demand in the NEW housing market, why the heck does DR Horton and Lennar - the top 2 builders in the US have "black friday deals"? Like New houses are a kin to shiny TV's or some fancy blanket sales at the Mall or big box retailer. One does not need any details like, oh, these builders are ONLY discounting rates, or these builders are trying to move inventory by offering incentives. Anyway, any or all of your explanations ONLY run CONTRADICTORY to your statement that things in the NEW HOUSING MARKET are GREAT. If they are so great, WHY are the Top 2 Builders or any Home Builder in the US offering "BLACK FRIDAY" deals. Has the public seen "Black Friday" deals for New houses in the past years. Can you name them or provide any evidence of that? You fellows are part of the industry and are the problem. Continue to gas-light people into buying things they cannot afford.
Yes....all of the companies that flooded your inbox with Black Friday/Cyber Monday offers are on the verge of going bankrupt....otherwise they never would use such marketing tactics....thanks for enlightening us and saving our audience from the impending crash! Much appreciated.
@@TheEducatedHomebuyer Wow, such an arrogant reply. Its not surprising for the so called "non-doomsday", "macho/bravo" bros who keep gas lighting housing market (this includes the paid puppets at CNBC etc.) see everything other people say with cynicism. Dude, there is a HUGE DIFFERENCE, I repeat HUGE DIFFERENCE between getting a mobile phone or a Flat screen TV on Black Friday Deals VS. a BRAND NEW HOME. You have conveniently NOT ANSWERED the question. How often does any one see Black Friday Deals on BRAND NEW HOMES from TOP BUILDERS. If everything is "hunky dory" in "NEW Housing" land, why are the builders having "Flash" sale or Black Friday deals to everything in between. Where is your so called "DEMAND". BTW, my point was NOT about HOME BUILDERS going bankrupt, you are completely misreading things.
If you yell it in all caps, it makes it true....if you watched the space at all, you'd know the "black friday" sale is no different than the incentives they've been offering for over 2 years, just with a fancy name.
These 2 guys also voted for Kamala thinking she be better for the country so take their advice w grain of salt
Did the vaccine comment trigger you
🤣🤣🤣🤣 It's funny how 10% of the viewers are convinced we're far left, blue state, ultra progressive liberals....another 10% is certain we are Ultra MAGA Trumpers. Which group you fall in tells you far more about yourself than it does about us. Thanks for watching.
@@colinvanwinkle3000 If you supported the clot shot, then you definitely voted for Kamala. Explains a lot.
All Yall craxy thinking there’s 2 Americas y’all better learn how to collab wit one another .. dummies