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All Encompassing Mortgage and Real Estate Thread


UTPhil2006

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8 hours ago, Gil Bang said:

I feel that my value is "un-fuzzying" shit. 

So I've got a view property listed.  It's beachfront/harbor.  Fantastic views of both.  For you texas boys that aren't familiar, ocean views ain't so great after sunset, shit is dark.  But, the harbor component of my listing is tits; the lights of the boats coming in and docking, the restaurants, etc. 

I had a buyer that thinks he's a fucking expert.  Whatever he does for a living, it isn't real estate.  He "checked the internet, because everything is online now".   My listing is on the 5th floor.  He used a comp on the 1st floor, with a shit view.   This property is all about the view.  He's justifying his offer based on the 1st floor comp.   I'm well prepared to inform him that is "comp" isn't a comp, and I have an encyclopedic knowledge of this shit.  

He wouldn't listen to any of my points.  Not at all.  

As far as I'm concerned, he's still fuzzy, because I couldn't un-fuzzy him.   I do this shit all day, every day.

I don't go down to the massage parlor and assume that I can give a handjob as well as Cici, regardless of how much handjob porn I watch on my phone. Because I'm not actually GIVING THE HANDJOBS.

But any asshole with an internet connection thinks that they know as much as I do about my fucking job.

 

 

 

Don’t sell yourself short- I bet you could make some guy incredibly happy with your hand job ability. NTTAWWT. 

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11 hours ago, Gil Bang said:

 

But any asshole with an internet connection thinks that they know as much as I do about my fucking job.

I just had a client send me a screenshot of a zillow mortgage calculator. The rates were VA, and it wouldn't even price his desired 3% down payment, not to mention the property taxes were wrong, and the PMI was 3x my actual real quote. 

This is the age of the internet expert. It sucks, but it is what it is. Doctors probably have it the worst, but everyone has to explain why the information they found on the internet is wrong, or not taking into account 100 other variables. 

 

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11 hours ago, Gil Bang said:

I'm well prepared to inform him that is "comp" isn't a comp, and I have an encyclopedic knowledge of this shit.  

I couldn't agree more, that knowledge is vital in determining current value of a home with reasonable precision.  Over the years, I have gotten better at understanding why certain homes aren't good comps, whether because of their lack of proximity, differences in size or build quality, lot size, schools (sometimes different even in close proximity), etc.  But, it's still fairly seat of the pants for me.

That said, I'm not going to waste a Realtor's time when I'm not going to sell, and I'm not going to hire an appraiser, either.  I am content keeping an eye on broad Austin statistics as reported so I have some idea of the general trend.

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I don’t understand all the arguing in this thread but the right way to look at the market is year over year price differential of a given area. And Jimmys broad statistic is a decent indicator.

Obviously neighborhood specific data is the best. The bottom line is that in the last few months we’ve finally crossed to a year over year decline. Many people get confused because they look at month to month, but that doesn’t take into account the seasonality during the year. There’s more drops coming. Buckle up. 

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I know this isn’t a tax planning thread but figured I’d ask here. I have a HOA that’s 315 a month. I’ve seen if you itemize, you can guesstimate the percentage of sq footage to deduct for home office as a remote worker. Does anyone reading this have experience with this? I generally take standard deduction, so wasn’t sure if worth pursuing just for ease. Not sure how they enforce if you’re actually working from the room or not

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On 1/12/2023 at 8:56 AM, jimmyjazz said:

You need to read the inflation thread.  It's littered with Nobel-winning economists, all who agree this is bad news.

Why bring this pissy comment here? Some folks like @Cheeseweasel are concerned that the trend is going to reverse, the rest of the recent discussion is largely personal disagreement over something benign @trophsaid. My general takeaway is most people are in a wait and see mode. We all want low inflation and a stable currency. Every month we meet expectations is undeniably good. 

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everyone is getting pissy and arguing for a few understandable reasons - first, Texas football has been shit for more than a decade now and people are arguing over whether 8-5 is cause for panic or optimism, then we have wife beater shit from the coach that was going to lead Texas to 10 final 4s in 12 seasons. This isn't exactly making it fun to be on a Texas message board.  Second, we are in our fourth year of a total shit show in the world.  putting politics completely aside, there was a legit worldwide pandemic, it had its own market crash, tons of uncertainty, schools turned completely upside down, we were all in house arrest basically. holy shit that was god awful. and as we come out of it, yay inflation and another 20%+ market decline!  worst since the world was a complete dumpster fire in the 70s and 80s. now they are saying recession in 2023. Oh, then that threat of nuclear war and the complete decimation of sovereign country and its people in the most intense and worst armed conflict in Europe since WWII. Crazy, the threat of nuclear war is an afterthought here.  My god, that is a awful run of sports, economic and geopolitical news that frankly probably pisses all of us off more than we know.  outside of the sports threads, there are three threads that deal with those topics. The Ukraine war thread is just full of the smartest folks here and thankfully it's rather clean and crisp, but inflation and real estate are where the brunt of the economics news is shared, of course it's pissy. the world is on fire.

 

Edited by troph
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4 minutes ago, troph said:

everyone is getting pissy and arguing for a few understandable reasons - first, Texas football has been shit for more than a decade now and people are arguing over whether 8-5 is cause for panic or optimism, then we have wife beater shit from the coach that was going to lead Texas to 10 final 4s in 12 seasons. This isn't exactly making it fun to be on a Texas message board.  Second, we are in our fourth year of a total shit show in the world.  putting politics completely aside, there was a legit worldwide pandemic, it had its own market crash, tons of uncertainty, schools turned completely upside down, we were all in house arrest basically. holy shit that was god awful. and as we come out of it, yay inflation and another 20%+ market decline!  worst since the world was a complete dumpster fire in the 70s and 80s. now they are saying recession in 2023. Oh, then that threat of nuclear war and the complete decimation of sovereign country and its people in the most intense and worst armed conflict in Europe since WWII. Crazy, the threat of nuclear war is an afterthought here.  My god, that is a awful run of sports, economic and geopolitical news that frankly probably pisses all of us off more than we know.  outside of the sports threads, there are three threads that deal with those topics. The Ukraine war thread is just full of the smartest folks here and thankfully it's rather clean and crisp, but inflation and real estate are where the brunt of the economics news is shared, of course it's pissy. the world is on fire.

 

This is a really really great post and puts it in perspective. 

2020 was one of the best years of my life b/c the mortgage industry was obviously on fire and we bought the RV and home schooled our kids from it, and they were perfect age for that kind of thing- as sweet and compliant and full of wonder kids at 5, 8 & 9.  But, the entire time I was on the road everytime we went into town and drove past nothing but empty parking lots on our way to a Walmart to fill up for another week at a great campsite it would make me want to cry to think of all the devastation all those empty parking lots represented. 

21 was sort of shitty in a lot of ways as the pandemic looked like it was going to be over and then it got jammed back into reality for a lot- and inflation started to run amok.  22 was the revenge on my industry for our prosperous times during the pandemic and personally 23 looks like more of the same.  

It's been a bitch of a last 5 years.  
I think football is going to be good again, so in a micro climate that will help. 

Being an Astros fan (and a Texans hater) helps mitigate some of the sports pain, but yeah- it aint great.  

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7 hours ago, troph said:

everyone is getting pissy and arguing for a few understandable reasons - first, Texas football has been shit for more than a decade now and people are arguing over whether 8-5 is cause for panic or optimism, then we have wife beater shit from the coach that was going to lead Texas to 10 final 4s in 12 seasons. This isn't exactly making it fun to be on a Texas message board.  Second, we are in our fourth year of a total shit show in the world.  putting politics completely aside, there was a legit worldwide pandemic, it had its own market crash, tons of uncertainty, schools turned completely upside down, we were all in house arrest basically. holy shit that was god awful. and as we come out of it, yay inflation and another 20%+ market decline!  worst since the world was a complete dumpster fire in the 70s and 80s. now they are saying recession in 2023. Oh, then that threat of nuclear war and the complete decimation of sovereign country and its people in the most intense and worst armed conflict in Europe since WWII. Crazy, the threat of nuclear war is an afterthought here.  My god, that is a awful run of sports, economic and geopolitical news that frankly probably pisses all of us off more than we know.  outside of the sports threads, there are three threads that deal with those topics. The Ukraine war thread is just full of the smartest folks here and thankfully it's rather clean and crisp, but inflation and real estate are where the brunt of the economics news is shared, of course it's pissy. the world is on fire.

 

Other than that Ms. Troph, how was the sailing?

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everyone is getting pissy and arguing for a few understandable reasons - first, Texas football has been shit for more than a decade now and people are arguing over whether 8-5 is cause for panic or optimism

Don’t football the real estate thread
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40 minutes ago, Armybrat said:

Other than that Ms. Troph, how was the sailing?

Like wulaw, we found a way to make some lemonade for sure. I thank Covid for our scuba, sailing and fly fishing adventures. 

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11 hours ago, troph said:

everyone is getting pissy and arguing for a few understandable reasons - first, Texas football has been shit for more than a decade now and people are arguing over whether 8-5 is cause for panic or optimism, then we have wife beater shit from the coach that was going to lead Texas to 10 final 4s in 12 seasons. This isn't exactly making it fun to be on a Texas message board.  Second, we are in our fourth year of a total shit show in the world.  putting politics completely aside, there was a legit worldwide pandemic, it had its own market crash, tons of uncertainty, schools turned completely upside down, we were all in house arrest basically. holy shit that was god awful. and as we come out of it, yay inflation and another 20%+ market decline!  worst since the world was a complete dumpster fire in the 70s and 80s. now they are saying recession in 2023. Oh, then that threat of nuclear war and the complete decimation of sovereign country and its people in the most intense and worst armed conflict in Europe since WWII. Crazy, the threat of nuclear war is an afterthought here.  My god, that is a awful run of sports, economic and geopolitical news that frankly probably pisses all of us off more than we know.  outside of the sports threads, there are three threads that deal with those topics. The Ukraine war thread is just full of the smartest folks here and thankfully it's rather clean and crisp, but inflation and real estate are where the brunt of the economics news is shared, of course it's pissy. the world is on fire.

 

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😄 

yeah, it's been a rough few years. 

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Does anyone have an estimated range for new construction costs in central Austin at the moment? I know there are a million caveats associated with that question, but I'm wondering about buying a property for lot value, demo and rebuild on the site. Not cookie-cutter floor plans and finishes, but architect drawn, designer picked finishes in the 2-3k sqft size range.

I asked a realtor and she told me she thought something like that would be ~$800/sqft right now, but I'm looking for some more input on the topic.

Thanks

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5 hours ago, BTW said:

Does anyone have an estimated range for new construction costs in central Austin at the moment? I know there are a million caveats associated with that question, but I'm wondering about buying a property for lot value, demo and rebuild on the site. Not cookie-cutter floor plans and finishes, but architect drawn, designer picked finishes in the 2-3k sqft size range.

I asked a realtor and she told me she thought something like that would be ~$800/sqft right now, but I'm looking for some more input on the topic.

Thanks

$800 for cost?  I just got an appraisal back today on a central Austin custom new construction (with expensive finishes, pool, etc.) and it was $700 a sq ft-comps were in the $690-$890 or so range.  I’m guessing construction costs wouldn’t be more than half that.  

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11 hours ago, BTW said:

Does anyone have an estimated range for new construction costs in central Austin at the moment? I know there are a million caveats associated with that question, but I'm wondering about buying a property for lot value, demo and rebuild on the site. Not cookie-cutter floor plans and finishes, but architect drawn, designer picked finishes in the 2-3k sqft size range.

I asked a realtor and she told me she thought something like that would be ~$800/sqft right now, but I'm looking for some more input on the topic.

Thanks

DM you my contractor’s info. He’ll ballpark you if you got a rough idea of what you want.

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On 1/17/2023 at 12:17 PM, BTW said:

Does anyone have an estimated range for new construction costs in central Austin at the moment? I know there are a million caveats associated with that question, but I'm wondering about buying a property for lot value, demo and rebuild on the site. Not cookie-cutter floor plans and finishes, but architect drawn, designer picked finishes in the 2-3k sqft size range.

I asked a realtor and she told me she thought something like that would be ~$800/sqft right now, but I'm looking for some more input on the topic.

Thanks

 

19 hours ago, LCHorn said:

$800 for cost?  I just got an appraisal back today on a central Austin custom new construction (with expensive finishes, pool, etc.) and it was $700 a sq ft-comps were in the $690-$890 or so range.  I’m guessing construction costs wouldn’t be more than half that.  

 

4 hours ago, UTPhil2006 said:

I think @troph can prob help as well

ton of caveats that's true. I don't think you're getting out alive below $450 and that might be before builder fees - we typically build spec so we don't price with fees included we take our profits.  But yeah, I'd say if we were looking to start another one, we'd use $450 as our placeholder for actual costs (soft and vertical).  we haven't been in construction since mid 2022 (we are finishing our house) so things may be different.  City of Austin is a big part of it with their requirements and delays.  But at some point, the cost is what it is to use a phrase I hate.  you can easily go up from there.  so with a realistic mark up for the builder, I'd expect $550-$600 psf for a really good build, higher if you can't control yourself (she raises her hand).  Now, we do build a premium product as we spent most of our time in Zilker, Travis Heights and Bouldin with $1M dirt, so you can probably float those numbers down some depending on the kind of build you are doing. But gosh, I wouldn't expect below $450-500 and I would certain talk to actual builders you would consider to get their take before making any permanent decisions of any kind.

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Thanks all for the input.  I'm relieved to hear that construction costs may not be as high as I was initially told.  As this project is an investment and not a primary home, it definitely helps with the economics to be in the $450-$600 /sqft range for the build.  We are looking in 78701 and 78704 (Clarksville, Bouldin, etc) so lot values are a meaningful portion of the overall project cost.

I would love to go with something already built, but the properties we have looked at so far are all on the extreme ends of the spectrum.  Meaning they are either brand-new/re-done asking in the $1,000/sqft range or they are total dumps being sold for lot value.  

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Yeah, costs are way up.  We built our house in 2014-15 for $135/sf and the county now appraises it at $329/sf.  Not that the county is particularly reliable, but I had to disabuse myself of the notion that skyrocketing property values were all about the price of the dirt.  Maybe not.

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6 hours ago, BTW said:

Thanks all for the input.  I'm relieved to hear that construction costs may not be as high as I was initially told.  As this project is an investment and not a primary home, it definitely helps with the economics to be in the $450-$600 /sqft range for the build.  We are looking in 78701 and 78704 (Clarksville, Bouldin, etc) so lot values are a meaningful portion of the overall project cost.

I would love to go with something already built, but the properties we have looked at so far are all on the extreme ends of the spectrum.  Meaning they are either brand-new/re-done asking in the $1,000/sqft range or they are total dumps being sold for lot value.  

my costs do not include the lot (I said only soft (plans) and vertical, land is separate).  if you want the lot included then yes, $800+ psf may be accurate (I did not pull out a calculator).   I'll also tell you if you aren't a builder, then the investment approach can get really tight really fast. I'm as nutty as a nutty brown hare and I LOVE taking risks, I'm probably addicted to stress because my parents fucked me up, etc. etc. and I will tell you spec investment projects are NOT for the faint at heart.  I ran out of ability to cope with it this last year and we had to take a break just to make it as a couple (didn't help the market went to shit in a hurry).  I was willing to take a 40-50% income pay cut because the stress was too much. Every day the clock is ticking and profit is leaking out the bottom.  it's a tough, very tough business.  Adding the layer of paying a builder on top is even tougher. you'll end up stressed out of your mind, two years or more later just breaking even.... or you could make a couple of hundred thousand bucks, it can really be a crap shoot.  But making a profit in excess of that requires that you be the GC in most cases. 

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Thanks for the input and the clarification.

Definitely haven't decided for sure rather or not to dive into this project yet, just trying to gather info to make an informed decision.  Ours would not be a build and flip, but a build and hold/rent.    Seeing as we do not live in Austin, managing the project remotely will be a headache and would necessitate a GC.  We are still in the "tire kicking" phase and are just trying to gather info.

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I build a few specs around in the upper end neighborhoods.  I have one started right now that is $650/ft with no interest carry, selling costs or profit.  Lumber prices are dropping but concrete is being sucked up by Samsung.  Labor costs are coming down on framing, electric and plumbing.  

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4 minutes ago, Neonmoon said:

Fannie/Freddie just fucked non poor people on LLPAs. New Advice, if you plan on borrowing money after 5-1-2023, it would be advisable to probably put down less money. 

https://www.mortgagenewsdaily.com/news/01192023-big-llpa-changes

 

 

 

Awesome! I was just wondering what those fools and morons could do to make the worst lending environment in 25 years worse and they found something. Brilliant!  

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Anyone have more info on these from the article?

  • There's a new generic LLPA for "subordinate financing" (a 2nd loan or HELOC) whereas the previous LLPAs were more granular depending on the LTV of first loans vs subordinate loans
  • BIG increases in fees for many "Cash-Out" loans
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13 minutes ago, Catpfish said:

I know it would be loan specific, but not putting the 20% down to avoid the LLPA would subject you to mortgage insurance, right?  

Is there an easy pretend scenario to show the difference?

Correct. You would subject to Private Mortgage Insurance. It would probably be wiser to put less than 20% down to avoid the higher interest rate hit (LLPA) and pay for a single premium PMI with the extra money you didn't use on the down payment. 

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33 minutes ago, Catpfish said:

I know it would be loan specific, but not putting the 20% down to avoid the LLPA would subject you to mortgage insurance, right?  

Is there an easy pretend scenario to show the difference?

Definitely a case by case and loan amount variable but if you’re between 720-760 and putting 20-25% down it would be worth running a couple MI vs no MI vs 2nd lien vs other options scenario to see what pops the best. 

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33 minutes ago, Neonmoon said:

Correct. You would subject to Private Mortgage Insurance. It would probably be wiser to put less than 20% down to avoid the higher interest rate hit (LLPA) and pay for a single premium PMI with the extra money you didn't use on the down payment. 

It's pretty transparently just another mechanism to extract more money in fees from homebuyers during the closing process. Make shit more expensive, deliver the same service, collect bonus.

My wife is starting to want to move out of a townhouse and into a house with an actual yard, so this is good to know though

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3 hours ago, Neonmoon said:

Yep. If you have good credit and wanted to put down 20%, don't

image.png.9a762d103bedcb689fb919188575fbcd.png

I’m hoping that the various banking PAC’s start giving them an earful.  So much of the pricing is counter-intuitive to how we’ve always understood risk to be managed. 

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59 minutes ago, LCHorn said:

I’m hoping that the various banking PAC’s start giving them an earful.  So much of the pricing is counter-intuitive to how we’ve always understood risk to be managed. 

Not to get political but the last 3 admins basically fucked the dog on both the consumer side and the industry side.  The last guy that was pro homeownership and pro industry was W.  

The CFPB was a debacle and terrible and cost the consumer a bunch of time and money in the transaction without any actual benefit that I can see to the consumer.

Last admin had that stupid adverse pricing scheme and also seemed to want to kill Fannie/Freddie so that all your lending would be done by the biggest 5 or 7 banks in the world

This admin has now fucked up pricing for no good reason and also just fucked anyone up the ass that wanted to buy investment or second home on a conforming size loan limit or under.  

Maybe I'm being unduly negative and I'm forgetting lots of good stuff they've done, if so please feel free to point it out. I can be convinced/persuaded that I'm just being a knee jerk cry baby and not rationally thinking this through. But yeah- no idea who thinks this is a good idea. 

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Best way to finance remodel coming up?  We are going to start a remodel of our mountain house in May (will be our primary residence when finished).  Remodel cost is going to be ~$1.5 million.  I plan on putting in roughly 750k-1 million in cash, but I've got a first mortgage (15 years at 2.5%) that I don't want to get rid of due to rate.  What's the best way to finance the remainder?  Just do a HELOC?  First mortgage is under 300k and as it sits today the house is worth 900k -1 million.

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Just now, Chewbacca said:

Best way to finance remodel coming up?  We are going to start a remodel of our mountain house in May (will be our primary residence when finished).  Remodel cost is going to be ~$1.5 million.  I plan on putting in roughly 750k-1 million in cash, but I've got a first mortgage (15 years at 2.5%) that I don't want to get rid of due to rate.  What's the best way to finance the remainder?  Just do a HELOC?  First mortgage is under 300k and as it sits today the house is worth 900k -1 million.

You in Colorado?  Heloc rules are different in different places so not sure the Colorado rules, but yeah- if you can get all of it from the heloc get all of it from the heloc. 
other option would be to go to a local bank for a construction/rehab loan, pay whatever their deal is and then refinance it out to one loan at the end of the deal. Since you are only talking about 250k on the first lien you could always just pay that off if it’s easier to do than refinancing the second. 

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It's been a minute since I posted one of these.  Remember what this is- not a commitment to lend.  Not what I would give you as an interest rate.  Merely a reflection of what the entire country locked in at yesterday. This also doesn't include points, so if you got a deal at 5.75 with no points you are more like 60 bips better than average as opposed to 45 or so that would be demonstrated in this chart.  The weird Jumbo inversion where that was cheaper than regular 30  year fixed is gone for now.   I know why it existed but it was big weird.  That 9/10 of a point spread between the 30 and 15 is tasty- it's arguing strongly to do a 15 if you can.  I consider par to be about 50 basis points. Anything less is an always 30.  Anything more is a "lets look seriously at 15 if we can afford that". 

30-YR. CONFORMING

6.191% -0.013

30-YR. JUMBO

6.221% -0.288

30-YR. FHA

6.198% -0.048

30-YR. VA

6.038% +0.206

30-YR. USDA

6.214% -0.064

15-YR. CONFORMING

5.332% 
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My guys I pay to read the tea leaves in the market doubled (tripled? Quadrupled?) down on rates at 5 by summertime and we are going into a recession and that is going to bring down rates and inflation.   We shall see. 

They also said inflation is going to come in at expectations or a little better so continue floating...

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1 hour ago, UTPhil2006 said:

We should know in the next 6 weeks I would think a decent projection of where things are headed. Will be enough data and Fed speak to dictate what kind of market both RE and mortgage we’re gonna be looking at going into the buying season. 

My old boss with 50 years in the industry in title (title people either quit on the first day by lunch time or die at their desks at 80 years old seemingly) used to always say don't stress until the super bowl. That's when clients start to get serious about writing contracts.  

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1 hour ago, Wulaw Horn said:

My old boss with 50 years in the industry in title (title people either quit on the first day by lunch time or die at their desks at 80 years old seemingly) used to always say don't stress until the super bowl. That's when clients start to get serious about writing contracts.  

Pretty damn spot on.

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