Should I wait to buy a house?

[southLA]

Don't wait to buy real estate. Buy real estate and wait.

 

[wind gypsy]

Have you considered buying raw land and building a small home to start with, down the road you can expand.

Personally I would look for a great piece of raw land and start small vs buying what is currently what you would want in a home.

I've been monitoring the land market around me for a couple of years, would like to find that perfect 40+ acres and build a forever home. As of now it's just so insanely expensive to build it would have be done knowing you're making a poor financial choice to get exactly what you want. The sad thing is just finding the land (if not looking to be in a neighborhood) is a challenge!

My gut tells me the interest rates and a declining economy might sort out the demand side of things before the cost of building materials comes down..

Maybe I'm missing something?

 

[CorbLand]

Have you considered buying raw land and building a small home to start with, down the road you can expand.

Personally I would look for a great piece of raw land and start small vs buying what is currently what you would want in a home.

My wife and I looked at doing this. The problem we ran into is that materials are hard to get and the price is changing daily. You cant lock anything in and have an idea of where you will be when it all settles.

My father in law does concrete. He was telling me that companies come out, give you a quote, you will agree to have them do it and they will tell you they are six to eight weeks out. A couple days before they are scheduled to come, they will call you and tell you prices have gone up and its going to be XXXX amount more.

 

[tdhanses]

My wife and I looked at doing this. The problem we ran into is that materials are hard to get and the price is changing daily. You cant lock anything in and have an idea of where you will be when it all settles.

My father in law does concrete. He was telling me that companies come out, give you a quote, you will agree to have them do it and they will tell you they are six to eight weeks out. A couple days before they are scheduled to come, they will call you and tell you prices have gone up and its going to be XXXX amount more.

That’s why you have to build yourself, one can do it by working nights and weekends, it will take much longer but if you guys had started 3 years ago you would probably be close to done.

It comes down to ripping the bandaid of and doing it, either way, but waiting to buy or building will just be more expensive in the long run, we may see a drop like we did in 2008 every 50 years that bounces right back in a few years.

 

[tdhanses]

I've been monitoring the land market around me for a couple of years, would like to find that perfect 40+ acres and build a forever home. As of now it's just so insanely expensive to build it would have be done knowing you're making a poor financial choice to get exactly what you want. The sad thing is just finding the land (if not looking to be in a neighborhood) is a challenge!

My gut tells me the interest rates and a declining economy might sort out the demand side of things before the cost of building materials comes down..

Maybe I'm missing something?

I have a feeling neither will come down or if they do it’ll be only slightly even if it slows, last year I was watching the lumber market like a hawk but what i learned is like everything, the prices jump fast but lower slow, we’ll never get back to the prices we had in 2019 for materials.

 

[CorbLand]

That’s why you have to build yourself, one can do it by working nights and weekends, it will take much longer but if you guys had started 3 years ago you would probably be close to done.

It comes down to ripping the bandaid of and doing it, either way, but waiting to buy or building will just be more expensive in the long run, we may see a drop like we did in 2008 every 50 years that bounces right back in a few years.

I get what you saying but I know people that have waited 8 months for stuff. Even getting someone there to dig you a hole or to pour your concrete is a hassle. My father in law does concrete and told me he couldnt pour a foundation for me until August or September and he is my father in law.

Building yourself is not a bad option but unless you have the know how and the tools to do it, it is not as feasible as it is made out to be.

The crunch is on everything right now. I have a buddy that is trying to put a fence in right now and waited 3 months for the materials and they told him if he wanted them to put it in, it would be 6 months.

 

[tdhanses]

I get what you saying but I know people that have waited 8 months for stuff. Even getting someone there to dig you a hole or to pour your concrete is a hassle. My father in law does concrete and told me he couldnt pour a foundation for me until August or September and he is my father in law.

Building yourself is not a bad option but unless you have the know how and the tools to do it, it is not as feasible as it is made out to be.

The crunch is on everything right now. I have a buddy that is trying to put a fence in right now and waited 3 months for the materials and they told him if he wanted them to put it in, it would be 6 months.

Dang, I’ve been lucky and haven’t had any issue getting stuff when I need it and hopefully it stays that way.

 

[wind gypsy]

I have a feeling neither will come down or if they do it’ll be only slightly even if it slows, last year I was watching the lumber market like a hawk but what i learned is like everything, the prices jump fast but lower slow, we’ll never get back to the prices we had in 2019 for materials.

Whether material prices revert back (doubt it) or not, it would be much more enticing to build if the gap between new and existing homes was closer.

It seems like the gap between new build and buying existing has widened considerably. I don't have apples to apples #'s but the median new vs existing home is 70%+ more in a lot of the midwest compared to a gap % in the teens 15 years ago.

Maybe the gap is a good thing.. Urban sprawl and watching habitat turned into subdivisions is depressing to me. The premium to build new has to slow that a little..

 

[tdhanses]

Whether we get back to materials prices or not, it would be much more enticing to build if the gap between new and existing homes was closer.

It seems like the gap between new build and buying existing has widened considerably. I don't have apples to apples #'s but the median new vs existing home is 70%+ more in a lot of the midwest compared to a gap % in the teens 15 years ago.

Maybe the gap is a good thing.. Urban sprawl and watching habitat turned into subdivisions is depressing to me. The premium to build new has to slow that a little..

I’m seeing so much new it’s crazy, I’m also seeing a ton of older homes torn down and new bigger homes going up in areas of KC. The builders are paying a premium for these older homes but it makes sense when you can tear down a $350k house and still make a profit selling a new home at $900k. Areas that used to be safe good starter home areas are not so much that anymore but it could push into areas that traditionally were not desirable to become desirable.

I prefer the rebuilding of existing areas vs the continued expansion we see. Heck Colorado Springs to Fort Collins is really just one big urban development.

 

[CorbLand]

Dang, I’ve been lucky and haven’t had any issue getting stuff when I need it and hopefully it stays that way.

I think it depends on where you are at. The area I live in is seeing the fastest growth it has in 20 plus years. Housing is up 50% since March of 2021 and it shot up considerably before that.

Land is pretty hard to come by as anyone selling is doing so in large chunks to developers. A 1/3 acre in a subdivision is about 250,000 right now.

My wife and I have looked to buy anything from .5 to 1 acre and just build a shop with an apartment above it to live in until we can build. We cant find the ground.

 

[tdhanses]

I think it depends on where you are at. The area I live in is seeing the fastest growth it has in 20 plus years. Housing is up 50% since March of 2021 and it shot up considerably before that.

Land is pretty hard to come by as anyone selling is doing so in large chunks to developers. A 1/3 acre in a subdivision is about 250,000 right now.

My wife and I have looked to buy anything from .5 to 1 acre and just build a shop with an apartment above it to live in until we can build. We cant find the ground.

What if you look outside of town 30 mins, land still crazy expensive?

I’ve been lucky, I bought 2acres with a tiny little home on it in 2007 for cheap that is 15-20 mins from everything, got marrried and rented it out while we bought a new house, had kids, got divorced and moved back into the shack. Now I’m building a new house on it and will tear down the old one once it’s done.

 

[CorbLand]

What if you look outside of town 30 mins, land still crazy expensive?

We looked at doing that as well and yes, its just as expensive. We live in a bowl surrounded by mountains, you cant go farther east. Most of the towns out to the west have rules that you cant build on less than 5 to 10 acres. North is just as expensive and south is even worse.

On top of that, nobody is selling land and anyone that is, is selling the ground against the mountains and they are building 3000 plus square foot homes on them or they are selling it in large tracts.

 

[tdhanses]

We looked at doing that as well and yes, its just as expensive. We live in a bowl surrounded by mountains, you cant go farther east. Most of the towns out to the west have rules that you cant build on less than 5 to 10 acres. North is just as expensive and south is even worse.

On top of that, nobody is selling land and anyone that is, is selling the ground against the mountains and they are building 3000 plus square foot homes on them or they are selling it in large tracts.

That is a bummer, might need to move to KC

 

[CorbLand]

That is a bummer, might need to move to KC

Trust me, it has been discussed.

I know the cost of living has increased across the country but N. Utah has been insane.

 

[RSather528]

After months of looking and 8 offers denied we actually just got an offer accepted. The rising rates affected the buyer they had lined up and the sale fell through. They dropped the price a good amount and put it back on market contingent on us being able to close fast. It’s nothing special but for how inflated prices have been, this one was more down to earth. Hoping everyone on here can get through the crazy market with some sanity left. It’s been a ride but even with our accepted offer a whole lot can happen before closing.

 

[CorbLand]

After months of looking and 8 offers denied we actually just got an offer accepted. The rising rates affected the buyer they had lined up and the sale fell through. They dropped the price a good amount and put it back on market contingent on us being able to close fast. It’s nothing special but for how inflated prices have been, this one was more down to earth. Hoping everyone on here can get through the crazy market with some sanity left. It’s been a ride but even with our accepted offer a whole lot can happen before closing.

Congrats man.

 

[RSather528]

Congrats man.

Thanks, it’s tough so hang in there. Houses we put offers on have finally closed and ended up going for $60k-$90k over asking. Absolutely insane. With those numbers our offers were probably thrown out right away. People either have a lot of money to burn or are being reckless with it.

 

[CorbLand]

Thanks, it’s tough so hang in there. Houses we put offers on have finally closed and ended up going for $60k-$90k over asking. Absolutely insane. With those numbers our offers were probably thrown out right away. People either have a lot of money to burn or are being reckless with it.

I think its a combination of both.

We are 8 offers deep as well. Been second on two and signed to be the back up but didn't get either. Around here the increased interest rates havent slowed it down yet.

 

[MattB]

My crystal ball says that, with raising interest rates, affordability will suffer and home prices will have to come down for sales to happen. Mortgage rates are still really attractive right now so, if my plan was to buy and live in the property for 5+ years, I would still be aggressively pursuing a purchase. If I didn't see myself living a home that long, I would wait as it is highly likely prices will decline when rates move up and you could find yourself in a negative equity position in the next ~1-5 years. Even if you have a long term strategy, you need to be comfortable going into it with the expectation your property value will decline in the coming years.

Rents on the other hand will likely continue to increase as many who could afford to buy a home with ultra-low rates will not be able to do so in a more normalized market and will be stuck renting.

Another PSA: do yourself a favor and look to resources other than Youtube when researching life-changing decisions.

 

[Binz17]

Rates are still good, however, you will see more ARMS, FHA and USDA to accommodate the lower down payments and higher purchase prices and the corresponding payments. I finished construction on my forever home in 2018 on land I bought in 2014. I look like a genius now, lol. There are still deals to be had but you gotta know someone who knows someone if you know what I mean.