How's your market these last few weeks?

Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes

Things are flying off the shelf in Rochester NY. This is definitely an early start to the spring market. We're still at 36 degrees and buyers are flooding to the market. The market is being pushed, and it is selling.

Are you seeing this as well? Higher than normal prices and lots of action?

Cheers,
Mark

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Bill Coleman

Real Estate Investor · Westminster, CO · Member since 2014 · 201 posts · 74 votes

12y

@CK Hwang Exactly what you are saying happened on Long Island in 2004-2008. Prices shot up faster than income levels and rents. Then it popped. I am nervous that I am seeing the same pattern here in Denver. Income has to rise relative to the rise in housing prices or people can't afford to buy (or they get loans they should not have been qualified to get and you know what happens then.)

@Account Closed When you say things like "if you think prices are high now, wait until next year" that was the thinking back in the internet bubble days. Better buy now before the price goes up tomorrow and you miss out on all that gain. Same thing with the Long Island market. I had tons of friends who were underwater as a result.

I think caution is in order. I don't plan to pull the trigger unless the deal meets my financial requirements. And if I don't do any deals this year, it would suck but I know I will be better off waiting. It takes a strong stomach to stay on the sidelines.

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Sharad M.Pro Member
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
12y
Hi @Mark Updegraff

Things are heating up in my market too at the price point where I invest. I am making offers on anything that's open for investor bidding. I am trying more and more to buy package deals to give me some advantage over a retail buyer or an investor looking to purchase 1-2 properties.

I have mixed feelings about it. I have a decent portfolio, so the uptick helps my balance sheet, but the downside of that is that I am paying more this year than I was for similar properties 6 months ago.
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Ginger C.
SFR Investor · Warsaw, IN · Member since 2014 · 59 posts · 13 votes
12y
Same here but its more the floodgates are opening after the horrible winter we've had. Close realtor friend closed 1 house in Jan, 2 in Feb and is on track to close 15 in March. Many of which were delayed because of the weather preventing inspections.
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Mark UpdegraffBusiness Member
OP
Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
12y
Awesome! I've closed 7 so far this year but put a bunch into the pipe over the last couple of weeks. Had a day where I wrote 5 offers... I'm already getting burnt out and we're just getting started!
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John Rooster
Denver, CO · Member since 2013 · 409 posts · 105 votes
12y
Denver market has picked up quite a bit in the past three weeks, especially at the low end, I put a townhouse on the market Friday at 109K, I got an offer Sat. for 115k no concessions. It was a foreclosure I bought 3.5 years ago for 45k. I estimate I could only have gotten 80k march 2012, and 95k March 2013. And it snowed Saturday
1 Reply
Anson YoungBusiness Member
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
12y
I'll echo that the Denver resale market is kicking ***. Any flip we have put on the market this year is gone in 1 day, over full price.

One was $20k over asking price... In Aurora.
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Jeremy BakerPro Member
Real Estate Investor · Aurora, CO · Member since 2014 · 240 posts · 109 votes
12y
Originally posted by @Anson Young:
I'll echo that the Denver resale market is kicking ***. Any flip we have put on the market this year is gone in 1 day, over full price.
One was $20k over asking price... In Aurora.

That's awesome @Anson Young ! My wife and I are just starting out here in Denver and look forward to sharing our successes on threads like these.
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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
I recently read an article about the 5 fastest moving housing market. Here they are......

1) Oakland, CA

2) San Jose, CA

3) San Francisco, CA

4) Denver, CO

5) San Diego, CA

So I concur Denver, CO market is kicking a$$. With that said, our market is dry and red hot. The inventory is about 1 month. The dilemma for move-up buyers is that there is nothing to buy. The dilemma for FTHB is that there is nothing affordable to buy. Therefore, people are staying put, and agents are starving. This makes the rental market extremely tight. I believe the vacancy rate for San Jose is 2.7% from another article I read last month.

All in all, it sucks to be a FTHB and a renter looking to rent.
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Bill Coleman
Real Estate Investor · Westminster, CO · Member since 2014 · 201 posts · 74 votes
12y
There was just a piece on NPR this morning about how hot the market is in Denver. Wish I had some completed flips right about now!
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Bill S.Pro Member
Moderator
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
12y
Yesterday, in NW Denver, I went to one of my places and a block away I saw an open house sign. I thought, I'll stop by and see what it is and how much. This was a very nicely done but only 875 square feet. The "partial basement" was maybe 6' 3" headroom with no egress window and you had to duck and stoop over to navigate the narrow steep stairs to get there. The agent holding it open said they put it in the MLS at noon and it was under contract in 1 hour for full price. The full price $385,000!!!! Over $400 per square foot. The owner bought the house just 4 years ago at $265,000. I can't believe it. Maybe it's time to sell but then what?
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Kyle Doney
Flipper/Rehabber · Golden, CO · Member since 2013 · 590 posts · 319 votes
12y
@Bill S. That's unreal. Which neighborhood? How much higher can the market get. Its mind blowing it continues to rise and people will pay $400 a sq/ft.
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Bill S.Pro Member
Moderator
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Kyle Doney Berkley. I have no idea how high it can go. I do know when I first bought in Denver (~1995-1996) that someone mentioned a house in Wash Park went for $100 per square foot and everyone shook their heads.
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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
Originally posted by @Bill S.:
Yesterday, in NW Denver, I went to one of my places and a block away I saw an open house sign. I thought, I'll stop by and see what it is and how much. This was a very nicely done but only 875 square feet. The "partial basement" was maybe 6' 3" headroom with no egress window and you had to duck and stoop over to navigate the narrow steep stairs to get there. The agent holding it open said they put it in the MLS at noon and it was under contract in 1 hour for full price. The full price $385,000!!!! Over $400 per square foot. The owner bought the house just 4 years ago at $265,000. I can't believe it. Maybe it's time to sell but then what?

Wow.... Denver is getting even more expensive than the Bay Area. What happened to the 2% rule or even the 1% rule? LOL!!!
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Bill S.Pro Member
Moderator
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Account Closed that area is something like the 0.5% rule. We got in years ago and lived there and then moved to the burbs and kept property. Wish I could have figured out a way to have had more of the local RE stick to me along the way.
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Bill Coleman
Real Estate Investor · Westminster, CO · Member since 2014 · 201 posts · 74 votes
12y
Bubble anyone?
1 Reply
CK Hwang
Capistrano Beach, CA · Member since 2013 · 283 posts · 169 votes
12y
Bill, I agree with you, I am getting a little nervous. I just sold one flip here in Socal, and what would have traditionally sold to a young middle income family can now only be afforded by relatively wealthy retirees.

Personally, for my market in South Orange County, CA, it is a strange mix of low but increasing inventory, but also slowing price gains as the housing prices are bumping up against the ceiling of the buyer's level of affordability.

So from my perspective, it feels like my market is slower compared to 2012 and 2013 as prices of homes coming onto the market are priced high enough for buyers to walk away, so I feel we are on the cusp of something happening. Not sure what though.
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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
Originally posted by @Bill S.:
Wish I could have figured out a way to have had more of the local RE stick to me along the way.

Don't we all? I talked to a lot of older folks, and everyone wished they had bought a boat load of properties back in the days. Some sold and traded up. Now they wished they had rented those properties out instead of selling them.

It pays to talk to older folks and pick their brain. :)
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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
Originally posted by @Bill Coleman:
Bubble anyone?

Unfortunately, we're no where near bubble territory. If you think prices are high now, wait until next year. :)
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Albert Hasson
Investor · Paradise Valley, AZ · Member since 2012 · 361 posts · 214 votes
12y
Things are much slower here in the Metro Phoenix area this year vs. the last two. Price appreciation has slowed markedly, inventory is up and demand down. This is not necessarily bad, it feels like a sane, balanced market right now.
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Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
Originally posted by @Albert Hasson:
Things are much slower here in the Metro Phoenix area this year vs. the last two. Price appreciation has slowed markedly, inventory is up and demand down. This is not necessarily bad, it feels like a sane, balanced market right now.

I long for this day to happen in the Silicon Valley. Money is so cheap right now, but deals are so rare out there. A sane & balanced market would be great. Unfortunately, the market doesn't listen to me. Sigh........
0 Reply
Bill Coleman
Real Estate Investor · Westminster, CO · Member since 2014 · 201 posts · 74 votes
12y
@CK Hwang Exactly what you are saying happened on Long Island in 2004-2008. Prices shot up faster than income levels and rents. Then it popped. I am nervous that I am seeing the same pattern here in Denver. Income has to rise relative to the rise in housing prices or people can't afford to buy (or they get loans they should not have been qualified to get and you know what happens then.)

@Account Closed When you say things like "if you think prices are high now, wait until next year" that was the thinking back in the internet bubble days. Better buy now before the price goes up tomorrow and you miss out on all that gain. Same thing with the Long Island market. I had tons of friends who were underwater as a result.

I think caution is in order. I don't plan to pull the trigger unless the deal meets my financial requirements. And if I don't do any deals this year, it would suck but I know I will be better off waiting. It takes a strong stomach to stay on the sidelines.
2 Reply
Kevin Fletcher
Denver, CO · Member since 2013 · 185 posts · 160 votes
12y
@Bill Coleman Timing is crucial of course, but its way better to sell a little early and miss out on some gains then to be too late and have deal with spiraling prices and no buyers. I think when it falls it will fall fast. So, At the moment I'm trying to decide exactly when to I will sell some of my holdings. I really want to be on the right side of the impending bubble so I can take advantage in the aftermath.
1 Reply
Account Closed
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
@Bill Coleman ,

You used the term bubble, but we're no where near a bubble if you look at the housing affordability index and the long term trend of the housing market. Also, there are no signs that we're close to the top of the market yet. How can we be at the top of the market when inventory is still scarce?

I agree with Kevin that you'd rather be a little early than a little late if you decide to liquidate some of your holdings. However, if you're too early, you're leaving a lot of money on the table. If you don't think people can time the top and bottom of the housing market, you haven't listened to Bruce Norris.

Some economist like Nouriel Roubini called the top of the housing market since 2002. That was a horrible call and costed a lot of his followers anguish and money. Some of them are probably still renting now and might have been locked out of the housing market again for the next few years. That's a lot of years to be renting when the house could have been 1/2 way paid off by now. Unfortunately, the media worship him when the market eventually crashed in 2008-2009. Sometimes, staying on the sideline costs money too.
2 Reply
J. MartinPro Member
Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
12y
Where @Account Closed and I invest around the Bay, it seems like the market has been on fire for the last 2 years at least (extra hot on peninsula, SF, and certain East Bay markets). I don't think we have as much seasonality in the prices/sales here than in markets where there are actual "seasons"/cold/snow etc.

Regarding price increases and calling the "top" of a market.. I've asked many questions about whether I would be able to identify it.. There are hints and signs. But so hard to call it, AND be able to predict investor's sentiment/mentality and where they are willing to take the market. AND not miss out on good runs too, plus transaction costs eating up profit.. There are a lot of "false positives" on signs of potential market crashes.

As Minh pointed out with Roubini. Another example - many people think an inverted yield curve is a good predictor of future recessions. But I've also heard the joke that an inverted yield curve has predicted 20 of the last 5 recessions! In other words, you may have sold everything 15 times too many, and missed out on a lot of compound returns.. Greenspan made his famous "irrational exuberance" quote about the stock market in Dec 1996. But the market kept running for years before it crashed. And many people who called it then, lost a lot of money trying to short it.. "The market may stay irrational longer than you can stay liquid."

So when do you deleverage to prepare for a downturn? How long are you willing to miss out on returns to protect yourself against risk? I'm not sure, but I do have some more questions about it.. Especially if you use a lot of leverage..

http://www.biggerpockets.com/blogs/4579/blog_posts/32645-if-ca-h-is-king-then-leverage-is-god---loans-cash-roe-roi-and-risk
1 Reply
Micki M.
Flipper/Rehabber · York, UK · Member since 2013 · 895 posts · 453 votes
12y
I agree with @Account Closed People are seeing bidding wars and quick appreciation in Denver and getting scared. But realistically properties are only just recovering the value they lost so we are playing catch up. With the influx of young professionals, new business, and people from the coasts who are tired of Cali prices, Denver is seeing steady growth on a lot of fronts, and I believe it's sustainable in the short & medium term at least. There is a lot of opportunity to be had in both residential and commercial RE here if you're smart about your deals.
0 Reply
Justin S.
Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
12y
I echo @Albert Hasson comments. Our market has slowed considerably and I don't think we will see much appreciation this year and may even see a down tick come this fall and winter.

Auctions are still very aggressive but you can buy off the MLS pretty easily right now.
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