I'm finally getting to the point where I'm in a good spot to buy, but don't really have a big reason to right now given the market. My rent is cheap in Edgewater and I'm saving money due to working from home and nothing to spend on during a year of quarantining. Want to stay in the area, ideally would be right off Clifton in eastern half of Lakewood or in Cleveland so I can ride the 55 downtown.

 

Anyways, I re-signed my lease so hopefully things get a little more reasonable by next summer. Another year of socking away cash as well. Ultimately, I can't fathom moving further out so I feel like I'll just have to pay the price to be here.

Edited May 3, 20214 yr by mu2010

‘People are returning to the city,’ including Nashville and other affordable areas, says Redfin chief economist

Published: May 1, 2021 at 7:01 a.m. ET

By Howard Gold

Prospective home buyers “want more space,” preferring single-family houses to condos in urban areas, says Daryl Fairweather.

 

Q: Is this a nationwide phenomenon?

A: It’s pretty much everywhere except Manhattan and San Francisco. Even there, home prices are pretty much flat. Honolulu is also suffering a little bit, too, because they’re tourism-based.

Q: Denver and Seattle have been hot for a long time. And Detroit actually showed the biggest increase, 52%. Is that because the market’s been depressed for so long?

A: Well, Detroit is working from a much lower baseline. It’s one of the most affordable markets in the whole country. If a property goes from selling from $150,000 to $200,000, it’s a really big percentage increase.

Q: That’s a bit of an anomaly, and I would assume the same thing is true of another hot market, Cleveland?

A: Yes.

 

https://www.marketwatch.com/story/people-are-returning-to-the-city-including-nashville-and-other-affordable-areas-says-redfin-chief-economist-11619812478

Mortgage Delinquency Rate Declines at Unprecedented Pace 

https://dsnews.com/daily-dose/05-07-2021/mortgage-delinquency-rate-declines-at-unprecedented-pace

19 hours ago, KJP said:

Mortgage Delinquency Rate Declines at Unprecedented Pace 

https://dsnews.com/daily-dose/05-07-2021/mortgage-delinquency-rate-declines-at-unprecedented-pace

The unprecedented pace looks like regression to the mean to me. Let's hope a relatively high pace continues and it doesn't take us ten years to reach 2019 numbers again.

 

18 minutes ago, KJP said:

 

 

It's the "No State Tax" tornado and hurricane alley.   What insurance doesn't cover our federal taxes does (socialism).  

23 minutes ago, KJP said:

 

 

If it's not a tax it's not a "real bill", duh. Let alone things like having to install garage anchors and high-winds roofs like you see in Florida and the rest of the Coastal South. Of course rich people don't notice that stuff. California has earthquakes yet the insurance adjusters (who are very good at their jobs) don't raise the bill much more than we pay in Ohio. You wonder why the SD and NE are so much more than neighboring states. More people living close to rivers?

And both payroll taxes and sales taxes don't count since they are flat and regressive, respectively. Only progressive taxes count since they "punish success". Ohio state income tax is "super evil" since it is aggressively progressive.

Quote

A lot of this is a result of state & local development practices and a de facto tax.

 

Is it? I think it's mostly just the result of how likely your home is to be damaged or destroyed. The map looks almost exactly like a map of the states with the most tornadoes/severe thunderstorms. Wind, hail, and lightning make up the majority of homeowners claims. Freezing/water damage also makes up nearly 1/4 of claims.

 

Source: https://www.kin.com/blog/most-common-home-insurance-claims

 

People might think CA would have higher insurance rates because of the earthquakes and wildfires, but those events are extremely rare. Meanwhile they experience virtually zero severe thunderstorms and no freeze/thaw cycles.

 

I'm also suspicious that coverage like flood and earthquake insurance, both purchased separately or in addition to a standard homeowners policy, are not included in the map above.

 

 

I think earthquakes are a lot harder on commercial and multifamily than SFH.

A more valuable map would show the cost of insurance as a percentage of home value. Housing in California is 4X more expensive than housing in Alabama, and yet if we are to believe this map, the average homeowner in Alabama pays almost 3X more annually than California for a home that has 1/4 of the value

48 minutes ago, ryanlammi said:

A more valuable map would show the cost of insurance as a percentage of home value. Housing in California is 4X more expensive than housing in Alabama, and yet if we are to believe this map, the average homeowner in Alabama pays almost 3X more annually than California for a home that has 1/4 of the value

Exactly my thoughts. This map tells us very little without knowing WHAT is being insured for these prices.

 

I know several people who chose to move to Florida, "because it's cheaper" but then when you factor in that housing is more expensive than Ohio and your insurance is thousands more, and then you factor in things like Florida having some of the highest car insurance rates, etc. and suddenly that lack of state income tax fades away real fast and those "savings" don't actually manifest at all. I wish this type of info (with more in depth info on what it's really telling you) was more prominent. Because people make decisions solely based on "taxes!!!" then ignore everything else and find themselves digging a hole they can't afford to get out of.

Edited May 26, 20214 yr by jmicha

I think the above map boils down almost entirely to natural disaster propensity. The only exception is CA with earthquakes, but I would point out 1) damaging earthquakes are pretty rare compared to tornadoes or hurricanes, and 2) the CA building codes are very exacting, so there’s even less of an earthquake risk than you’d think. Wildfires are also a relatively low risk because they tend to hit more rural areas where fewer people live. You will hear about Houston or Miami getting slammed by a hurricane, but you’re not gonna get a wildfire in central LA.

 

 

Despite falling that much in June, lumber costs are still more than double what they were pre-COVID. Prices peaked in May '21 at 5 times the pre-COVID price.

 

I'm curious to see where it levels off but I don't think we'll be seeing $2 2x4s any time soon. An 8' stud is still $7.76/each at Home Depot as I type this.

 

https://www.corelogic.com/intelligence/2020-corelogic-hottest-cities-for-homebuyers-report/

My wife and I lost out to a few all cash offers. Sadly, Cleveland didn't make this list but I found the below bullet point shocking. "A majority of those surveyed said they'd use savings instead of bank loans to purchase a home..." Gives me confidence that this market won't be coming down any time soon. 

 

 

On 7/1/2021 at 2:17 PM, Ram23 said:

Despite falling that much in June, lumber costs are still more than double what they were pre-COVID. Prices peaked in May '21 at 5 times the pre-COVID price.

 

I'm curious to see where it levels off but I don't think we'll be seeing $2 2x4s any time soon. An 8' stud is still $7.76/each at Home Depot as I type this.

And today that same 2x4x8 is $3.55

How about things like electrical and PVC? Electrical didn't start going up until much later, 6+ months after lumber went up. Are prices sticky due to that lag?

10 hours ago, GCrites80s said:

How about things like electrical and PVC? Electrical didn't start going up until much later, 6+ months after lumber went up. Are prices sticky due to that lag?

Copper is still almost 3x more expensive than it was end of last year. Not sure about PVC.

I cannot get anything made from PVC for my business at all. The retail value of the products is too low ($3-5 a piece) and you pretty much can't raise it since they are non-essential hobby products.

Edited August 26, 20213 yr by GCrites80s

 

SATURDAY, AUGUST 28, 2021

Seeds & Sprouts XIX -- Cleveland apartment demand soars, downtown expansions & more

 

CoStar report: Cleveland apartment demand set to break records

 

International real estate research, marketing and analytics firm CoStar released a report this week showing that demand for apartments in the Greater Cleveland market is on track for a record-breaking year.

 

So far in 2021, more than 2,500 apartments have rented in Greater Cleveland, keeping pace with 2015 which holds most recent record. The pandemic was a dominant factor in this year's performance. After a sharp drop in demand in 2020, CoStar cites "a return to the office and to downtown living are fueling demand in the market."

 

MORE:

https://neo-trans.blogspot.com/2021/08/seeds-sprouts-xix-cleveland-apartment.html

46 minutes ago, KJP said:

 

SATURDAY, AUGUST 28, 2021

Seeds & Sprouts XIX -- Cleveland apartment demand soars, downtown expansions & more

 

CoStar report: Cleveland apartment demand set to break records

 

International real estate research, marketing and analytics firm CoStar released a report this week showing that demand for apartments in the Greater Cleveland market is on track for a record-breaking year.

 

So far in 2021, more than 2,500 apartments have rented in Greater Cleveland, keeping pace with 2015 which holds most recent record. The pandemic was a dominant factor in this year's performance. After a sharp drop in demand in 2020, CoStar cites "a return to the office and to downtown living are fueling demand in the market."

 

MORE:

https://neo-trans.blogspot.com/2021/08/seeds-sprouts-xix-cleveland-apartment.html

Ken, I know I'm asking an impossible question, but you would have a better grasp on it than most people. About how many new housing units (of all types) do you believe will be completed this year, and how many do you think are in the pipeline? For Cleveland proper that is, I could care less about the exurbs. 

I don't see new rental construction slowing down anytime soon either. My data is only limited to South Euclid, but I'm sure its representative of the wider region, and other cities as well. Over the last 4 years, the number of rental properties has decreased over 15%. From 2018 through 2020 roughly 100 rental properties became owner occupied each year. So far this year, 79 have, and I have another 100 or so on my watch list that are somewhere in the process of selling (though not guaranteed to become owner occupied). Suffice to say, this year will be substantially ahead of the last few. All of those renters need to go somewhere. Yes, some are becoming homeowners, but there is a substantial section of the population that either doesn't want to own, or can't. The rental market is becoming pretty tight now. Just look at how much rents have been increasing in the region lately. It's no surprise we are seeing new build apartment projects popping up all over the place.

 

 

6 hours ago, KFM44107 said:

Ken, I know I'm asking an impossible question, but you would have a better grasp on it than most people. About how many new housing units (of all types) do you believe will be completed this year, and how many do you think are in the pipeline? For Cleveland proper that is, I could care less about the exurbs. 

 

There is no way to know that number until Cleveland adds up all of their building permits for new housing units after the end of the year. There are so many infill housing units (Knez alone is building hundreds of them), small apartment buildings (look at the many four-unit micro apartment buildings being built by Maron/Berusch or rebuilt by others throughout Glenville, Detroit-Shoreway, etc), and when do we count the big projects' (like Intro, Axis on Ansel, etc) contributions to the housing market? When they get their building permits? When they start leasing? When they get their certificates of occupancy? 

FACT SHEET: Biden-⁠Harris Administration Announces Immediate Steps to Increase Affordable Housing Supply

SEPTEMBER 01, 2021

STATEMENTS AND RELEASES

Immediate Steps Supplement the Biden-Harris Administration’s Push for Historic, Long-Term Investments in New Housing as Part of the Build Back Better Agenda

https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/01/fact-sheet-biden-harris-administration-announces-immediate-steps-to-increase-affordable-housing-supply/

Dispatch: Columbus forecast to be nation's fifth hottest housing market in 2022

 

“Columbus home shoppers hoping for a break in the hot housing market aren't likely to get it next year, according to a forecast by Realtor.com.

 

The listing service pegs Columbus as the nation's 5th-hottest housing market in 2022, and predicts that the area's home sales and asking prices will rise twice as fast as national rates.

 

Demand for Columbus-area homes will remain high because of their relative affordability, immigration into Columbus, the area's high share of millennials, and the region's strong job growth and schools.
 

Realtor.com forecasts Columbus-area home sales to rise 13.7% next year and prices to climb 6.3%.”

 

 

https://www.dispatch.com/story/business/2021/12/07/housing-market-columbus-predicted-fifth-hottest-home-prices-sales-2022/8886204002/?utm_source=dispatch-Daily Briefing&utm_medium=email&utm_campaign=daily_briefing&utm_term=list_article_thumb&utm_content=OHIO-COLUMBUS-NLETTER65
 

I believe all of the Ohio metros ranked in the top half of the list. Not really surprising considering the skyrocketing costs in the Sun Belt. 

https://markets.businessinsider.com/news/commodities/lumber-prices-above-1000-first-time-since-june-housing-commodities-2021-12

 

Quote

Lumber prices spike above $1,000 for the first time since mid-June as hot housing market drives renewed demand

 

Lumber booming again.

Cuyahoga County specific, but we're working on daylighting fiscal data (sales, tax distribution, etc.) in an easily digestible format. For now, we have our Recent Sales Viewer active but pay attention to the below site for additional pieces being added in the new year. 

 

https://fiscalgishub.cuyahogacounty.us/

 

Other counties with GIS Departments are standing up similar viewers- google Equitable Property Value and (county) and there's a good chance you'll find something out there!

 

I'm never really sure what to make of these Zillow stats. Anyhow, still an interesting article on 2022 market:

 

Inventory & Velocity

Both restrictive supply overall – fewer sellers willing to sell, fewer homes built by builders – and sky-high demand can both lead to low inventory. The former is probably self-explanatory, but the latter is also interesting: When demand is very high, even a decent number of homes on the market can still sell very quickly given a high number of buyers, contributing to an overall low level of homes on the market at any given time even if the pace of new listings is healthy. And when new listings are quickly snatched up, it’s likely that means some buyers were left out, either moving too slow to secure a home while it was on the market, or not being able or willing to make a competitive enough offer. 

 

We can see where buyers had the hardest time finding a home in 2021, and so where there may be the most pent up demand in 2022. The fewest (standardized) listing days per home were in New Orleans, Cleveland, and Kansas City. These markets are forecast to have less deceleration than most other markets as well.

 

https://www.zillow.com/research/zillow-2022-hottest-markets-tampa-30413/

 

 

Another housing bubble? ‘We’re skating close to one,’ says Realtor.com economist

 

This might be the hottest housing market ever recorded. Over the past 12 months, U.S. home prices are up a staggering 19.2%. For comparison, in the years leading into the 2008 housing bust, the biggest 12-month jump was 14.5%.

 

Heading into 2022, real estate research firms forecasted that the ongoing housing boom would lose some steam and home price growth would decelerate. It hasn't come to fruition—yet. Actually, if anything, this year it has gotten a bit hotter, with housing inventory on Zillow down 52% from pre-pandemic levels.

 

MORE:

https://finance.yahoo.com/news/another-housing-bubble-skating-close-215143199.html

 

What are the top cities from where people are searching for apartments in Akron, Cincinnati, Cleveland, Columbus, Dayton and Toledo? Answers...

 

https://www.apartmentlist.com/research/apartment-list-renter-migration-report-2022-q1

 

I wish people would stop referring to what's happening as a bubble, or the current price chops as a bubble starting to pop. It's not accurate at all. The issue for the last 14 years since 2008 is a lack of supply. That hasn't changed. There's still not enough housing. The price chops you're seeing now are the result of rising interest rates reducing buying power, not a bubble that is popping. Once interest rates are stable for a bit (looks like that may be happening now) don't expect further price reductions. It's a correction to accommodate reduced buying power nothing more. The underlying issue of a lack of supply still exists, just as much as ever.

16 minutes ago, jmicha said:

I wish people would stop referring to what's happening as a bubble, or the current price chops as a bubble starting to pop. It's not accurate at all. The issue for the last 14 years since 2008 is a lack of supply. That hasn't changed. There's still not enough housing. The price chops you're seeing now are the result of rising interest rates reducing buying power, not a bubble that is popping. Once interest rates are stable for a bit (looks like that may be happening now) don't expect further price reductions. It's a correction to accommodate reduced buying power nothing more. The underlying issue of a lack of supply still exists, just as much as ever.

 

And unfortunately, increases in both material and labor costs are going to keep a fairly high floor under most new construction, whether urban multifamily or greenfield single-family.

1 hour ago, Gramarye said:

 

And unfortunately, increases in both material and labor costs are going to keep a fairly high floor under most new construction, whether urban multifamily or greenfield single-family.

Yep. Thankfully certain aspects of construction have stabilized, and some materials have even seen slight drops, but anyone holding out hope that things are going to go back to where they were a year or two ago are fooling themselves. The baseline price per square foot for construction is just going to be a lot higher now than it used to be. Meaning supply will continue to lag demand essentially forever unless there's some major rift somewhere in the equation. Like population growth stopping or even shrinking, some major advancement in technology enabled material creation, etc. But those are unlikely to happen, so this is just where we are now for the foreseeable future.

2 hours ago, jmicha said:

I wish people would stop referring to what's happening as a bubble, or the current price chops as a bubble starting to pop. It's not accurate at all. The issue for the last 14 years since 2008 is a lack of supply. That hasn't changed. There's still not enough housing. The price chops you're seeing now are the result of rising interest rates reducing buying power, not a bubble that is popping. Once interest rates are stable for a bit (looks like that may be happening now) don't expect further price reductions. It's a correction to accommodate reduced buying power nothing more. The underlying issue of a lack of supply still exists, just as much as ever.

 

They don't have the vocabulary that real estate, economics and secondary market people do. So everything is "soaring", "tanking" or a "bubble". They don't know "cooling" or "easing".

 

I remember in game collecting during the early 2010s tons of people were already saying "when is the bubble going to burst?" The median game price on most retro systems would reach nearly five times the 2010 price by the time the "bubble burst" in 2017. At that time the games only went down about 10-20% in value from their all-time highs in 2016. You could not get rid of the stuff though. Prices were too sticky. It sold just enough to keep prices stable. All that bubble talk in the early 2010s was met with mockery by experienced collectors even then.

 

Back to housing though, the fundamentals are completely different than 2008 and if people are somehow seeing similarities they don't know what they are doing. Unlike tech, real estate is built on fundamentals.

Edited July 5, 20222 yr by GCrites80s

2 hours ago, jmicha said:

I wish people would stop referring to what's happening as a bubble, or the current price chops as a bubble starting to pop. It's not accurate at all. The issue for the last 14 years since 2008 is a lack of supply. That hasn't changed. There's still not enough housing. The price chops you're seeing now are the result of rising interest rates reducing buying power, not a bubble that is popping. Once interest rates are stable for a bit (looks like that may be happening now) don't expect further price reductions. It's a correction to accommodate reduced buying power nothing more. The underlying issue of a lack of supply still exists, just as much as ever.

 

In fact, by the time the loan is paid off the borrower is still paying the pre-price cut amount for the house due to the increased amount of interest they pay. This doesn't happen perfectly on each transaction but on the market in the aggregate.

22 minutes ago, jmicha said:

Yep. Thankfully certain aspects of construction have stabilized, and some materials have even seen slight drops, but anyone holding out hope that things are going to go back to where they were a year or two ago are fooling themselves. The baseline price per square foot for construction is just going to be a lot higher now than it used to be. Meaning supply will continue to lag demand essentially forever unless there's some major rift somewhere in the equation. Like population growth stopping or even shrinking, some major advancement in technology enabled material creation, etc. But those are unlikely to happen, so this is just where we are now for the foreseeable future.

 

Even more unfortunately, the development most likely to return construction prices to where they were in 2020 at this point is a nationwide recession.  If that happens, most people won't get to enjoy the benefit of the price drops because (a) too many of those who would be prospective first-time homebuyers are likely to be in the most affected demographics (as opposed to a senior citizen who is likely to have moved most of their 401(k) to recession-proof investments and/or is on a fixed income), (b) the inflationary bite during the time leading up to said recession will have depleted savings, and (c) one of the most likely impetuses for such a recession will have been the corrective policy of the Federal Reserve, meaning interest rates will be high and therefore lower sticker prices won't turn into as much increased affordability unless a buyer is in a position to pay cash.

 

Increased material availability would obviously be a much preferable way to get supply prices back down to something closer to what they would be if cost growth had been more normal since 2020, but like you said, it would take a major and probably unlikely advancement in material creation to bring something like that about.  I'd been hopeful that supply bottlenecks would ease with the pandemic, but Canadian total lumber production, for example, was within a rounding error of being the same in January 2020 and January 2022 (I figured I should compare identical months because of seasonality).

The recession that is predicted for later this year, if it even happens, is going to be so weak that its just going to be a "relative recession" that is in response to the warpdrive economy of 2021.

On 5/3/2021 at 10:12 AM, mu2010 said:

I'm finally getting to the point where I'm in a good spot to buy, but don't really have a big reason to right now given the market. My rent is cheap in Edgewater and I'm saving money due to working from home and nothing to spend on during a year of quarantining. Want to stay in the area, ideally would be right off Clifton in eastern half of Lakewood or in Cleveland so I can ride the 55 downtown.

 

Anyways, I re-signed my lease so hopefully things get a little more reasonable by next summer. Another year of socking away cash as well. Ultimately, I can't fathom moving further out so I feel like I'll just have to pay the price to be here.

Curious, @mu2010, it’s been more than a year since this: Did you end up renewing your lease again to wait on the market a little longer?  Finally find a place and take the plunge?

18 minutes ago, Gramarye said:

Curious, @mu2010, it’s been more than a year since this: Did you end up renewing your lease again to wait on the market a little longer?  Finally find a place and take the plunge?

Quite a few doubles for sale in the area... 

10 hours ago, Gramarye said:

Curious, @mu2010, it’s been more than a year since this: Did you end up renewing your lease again to wait on the market a little longer?  Finally find a place and take the plunge?

 

Started looking seriously in March (2022). It's been pretty brutal, we lost a few bidding wars in April/May. Then in June there really just wasn't a ton on the market at all. We just got back from a two week trip so now going to get back into looking and hopefully find something in July or August.

 

But then we'll need to find an apartment or somewhere to live as my lease here ends at end of September.

 

Still looking in Lakewood ideally between Detroit and Clifton, something that's not updated that we can put some TLC into. so we're still relatively picky but we know what we want so at this point might as well wait for it. I'm not sad about interest rates going up because I'd rather not overpay and end up underwater.

Edited July 6, 20222 yr by mu2010

10 hours ago, Cleburger said:

Quite a few doubles for sale in the area... 

 

I gotta get back to the bank and see if I can get a pre-approval letter for doubles. Third Fed is my main lender and they don't finance them but FFL i think does.

 

In theory we're open to doubles but haven't seriously pursued one yet.