The starter homes are still out of reach...

[SQLGeek]

Unfortunately I’ll be paying for their luck in higher taxes.

Going through similar here in Fort Bend county. Lucky us...

Fortunately county commissioners here have reduced the effective rates a bit to ease the overall burden. Doesn't stop the school districts from sticking their hands out though.

 

[tsugsr]

So after a career change with a higher income, I plan to look into buying a house in the near-ish future. Any idea if/when North Texas real estate prices will come back to “normal”?

I need to stay somewhat near the I-35 corridor, and as far north as you can go; that being said, I really don’t want to move to Oklahoma. Being single and no kids, I don’t need much, just don’t want a trailer and don’t need land. Which speaking of, I saw a local listing for 20 acres with no water, limited road access and no trees for $450,000!!!

Any advice for potential first time home buyer during a horrible market for housing?


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[Shady]

Well now is the season to buy most families don't buy during winter and the holidays so make your lowball offers

If you are waiting for a cool off, you will be back into the prime season again.

Sales are slowing things are staying on the market longer so if you find people who want/need to sell pickings can be good.

If someone was just listing and trying to get max profits well they missed the boat and are probably not going to take low offers so the house will sit on the market.

If you look at history for a guide property has always ended up worth than you paid for it if you hold it. If you buy top of the market and sell in a dip well thats your problem over time it will be worth more than you paid.

With the exception of if the Dems keep control and decide to take every ones property and make it fair for everyone to "have a place to live"

 

[toddnjoyce]

…
Any advice for potential first time home buyer during a horrible market for housing?…

Sure, don’t buy at the top of the market. Average first-time homebuyers are going to be in a home for about five years before trading up due to life changes.

Two, I like the following advice on setting a house buying budget: 20% down and never spend more than 25% of your monthly take-home net pay on monthly mortgage payments. The 20% down means you get to avoid mortgage insurance which means more of your monthly payment goes to paying down the principal.

Most online mortgage calculators lie to you: they only show the “P” of PITI as your monthly payment. home Insurance, Taxes, and mortgage Insurance (if required)make up the ITI part of the rest of the story.

Property taxes: use the local CAD property search page to see the historic value and know that your estimated taxes are going to go up annually and you either have to pay the difference to your mortgage servicer or your monthly payment goes up to offset the delta because, by law, they have to maintain enough in escrow to cover all estimated expenses.

This advice may seem harsh, but it sucks donkey balls to be house rich, cash poor, and forced to sell at a loss because you have no equity and can’t afford the increasing cost of the monthly payment AND you can’t keep up with the other expenses that come with ownership.

 

[Fishkiller]

And if you have 20% down you can avoid the escrow account all together. The escrow account is essentially a non interest bearing savings account. The mortgage servicer collects from you monthly then holds the money (and they collect and keep the interest) to pay for taxes and insurance when they come due. My experience is the escrow account is always underfunded and you have to come up with the difference. Just make sure you are setting enough money aside aside every month to cover those expenses when due. I would have X amount of my paycheck go to a separate bank account so we were not tempted to spend it.

And you need to start a home maintenance fund because shit always breaks and either you need a new one or the repair guy wants several hundred..

 

[oldag]

So after a career change with a higher income, I plan to look into buying a house in the near-ish future. Any idea if/when North Texas real estate prices will come back to “normal”?

I need to stay somewhat near the I-35 corridor, and as far north as you can go; that being said, I really don’t want to move to Oklahoma. Being single and no kids, I don’t need much, just don’t want a trailer and don’t need land. Which speaking of, I saw a local listing for 20 acres with no water, limited road access and no trees for $450,000!!!

Any advice for potential first time home buyer during a horrible market for housing?


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Wait a year or so. May take two years.

 

[pronstar]

Looking at data, it appears that Dallas housing prices don’t really dip all that much relative to other markets.

The rate of increase does tend to flatten, but when there’s a systemic shortage of housing in Dallas, which pushes prices up.

So if you’re waiting for some huge drop in prices, you may be waiting a long time.

With inflation being what it is:
- 30 year fixed debt at current interest rates is a great hedge against inflation
- inflation is greater than 30 year fixed debt, so you’re getting paid to borrow
- inflation and demand will continue to push prices higher


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[toddnjoyce]

Looking at data, it appears that Dallas housing prices don’t really dip all that much relative to other markets.

The rate of increase does tend to flatten, but when there’s a systemic shortage of housing in Dallas, which pushes prices up.

So if you’re waiting for some huge drop in prices, you may be waiting a long time.

With inflation being what it is:
- 30 year fixed debt at current interest rates is a great hedge against inflation
- inflation is greater than 30 year fixed debt, so you’re getting paid to borrow
- inflation and demand will continue to push prices higher


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I don’t disagree with any of that. The likelihood of any homebuyer, much less a first-timer to hold on to a home for 30 years is really low.

The big question for me in our local market is how high can prices go before they outpace income.

We’ve been looking at a variety of places lately that better suit our wants; because these are unique properties, the inflation isn’t as bad as a more “desirable” home/location these places are in reach now. Problem is our income isn’t rising as fast as inflation and even if it was, the income tax bite wouldn’t really leave much better off net wise.

We’re really considering a temp shift in our IRAs and 401Ks to the traditional side to lower our MAGI and lower the income tax bite. Counterintuitive, but it looks like that’s how tax policy is going to work best for us for a few years.

 

[TexasRedneck]

Find the "ugly" house in a smaller community IF you're either VERY qualified to DIY or know some GOOD tradespeople. Your competition will be the "Flippers" who are out there with low-ball offers, so you should be able to find something worthwhile. Take your time, and don't rush things. I tend to search on "Realtor.com", because it allows me to filter out homes w/pending contracts, and drill down the various options (size home, lot, locale, HOA, etc). IMO, avoid HOA's at ALL costs - they are rapidly falling out of favor with a lot of buyers (such as ourselves - we won't look in a HOA community). I've seen subdivisions where I wanted to wear body armor, yet they have overbearing HOA's that don't really do much to help their residents.
Smaller towns are usually easier to find things in, especially if they're off the beaten path.

 

[pronstar]

I don’t disagree with any of that. The likelihood of any homebuyer, much less a first-timer to hold on to a home for 30 years is really low.

For sure.
Works best for income property that you buy/hold.


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[pronstar]

Find the "ugly" house in a smaller community IF you're either VERY qualified to DIY or know some GOOD tradespeople. Your competition will be the "Flippers" who are out there with low-ball offers, so you should be able to find something worthwhile. Take your time, and don't rush things. I tend to search on "Realtor.com", because it allows me to filter out homes w/pending contracts, and drill down the various options (size home, lot, locale, HOA, etc). IMO, avoid HOA's at ALL costs - they are rapidly falling out of favor with a lot of buyers (such as ourselves - we won't look in a HOA community). I've seen subdivisions where I wanted to wear body armor, yet they have overbearing HOA's that don't really do much to help their residents.
Smaller towns are usually easier to find things in, especially if they're off the beaten path.

If you want to rehab and force equity, best to buy distressed off the MLS, methinks

For income property, you can still be cash flow positive and have no/little money in the deal by going this route vs buying retail.


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[TexasRedneck]

If you want to rehab and force equity, best to buy distressed off the MLS, methinks

For income property, you can still be cash flow positive and have no/little money in the deal by going this route vs buying retail.

IMO, a first-time buyer is better off buying this way. After all - the idea is to get in for minimal cost, and eventually sell it to upgrade. We stayed in our first home for about 3 years, second one for 4 (divorced 1st wife), third for 5, fourth for 4 (then divorced 2nd), 5th for 4, the 6th...17 years so far. Hell - I even held onto the wife, lol!! Biggest difference, by the time you've owned a few homes you've got a better idea of what you want, and usually have the financial resources to do what you want done.

 

[ArmyDub]

Wow, the middle of the state must have the niiice houses. Over here 3Br 2Ba are $150k. But then you'd be stuck in El Paso.

 

[Lost Spurs]

Find the "ugly" house in a smaller community IF you're either VERY qualified to DIY or know some GOOD tradespeople. Your competition will be the "Flippers" who are out there with low-ball offers, so you should be able to find something worthwhile. Take your time, and don't rush things. I tend to search on "Realtor.com", because it allows me to filter out homes w/pending contracts, and drill down the various options (size home, lot, locale, HOA, etc). IMO, avoid HOA's at ALL costs - they are rapidly falling out of favor with a lot of buyers (such as ourselves - we won't look in a HOA community). I've seen subdivisions where I wanted to wear body armor, yet they have overbearing HOA's that don't really do much to help their residents.
Smaller towns are usually easier to find things in, especially if they're off the beaten path.

Sarcasm....

If you keep looking, you will find the right HOA that bans body armor. Problem solved.

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[TexasRedneck]

Sarcasm....

If you keep looking, you will find the right HOA that bans body armor. Problem solved.

We ALMOST bought a place about 5 miles from here 2 months ago. Literally around the corner from our family cemetery. Was initially told that there was no HOA...then found out there IS one - and these SOB's even had to approve not only ANY outbuilding, but the materials of construction, color, etc. You couldn't trim a tree without their approval - the list went on. The HOA president "stopped by" while we were looking at the place with our contractor. He "helpfully" informed me that we'd have to get any changes "approved" by "HIS" board. I looked him square in the eye and told him to shove HIS HOA right up his a$$. My contractor (literally) laughed out loud, and our Realtor just shook his head as he saw the sale go up in flames. Screw 'em.

 

[TexasRedneck]

Wow, the middle of the state must have the niiice houses. Over here 3Br 2Ba are $150k. But then you'd be stuck in El Paso.

Way things are around here right now, if you want something on a half-acre with a 2,000 sq ft house that isn't falling down, be ready to spend $4-500k and up.

 

[Tex929rr]

Way things are around here right now, if you want something on a half-acre with a 2,000 sq ft house that isn't falling down, be ready to spend $4-500k and up.

In 1998 we bought a 3 acre lot adjacent to our property for 24K. Earlier this year a vacant 3 acre lot down the street sold for $155K. This is no utilities, no improvements in an area where you need your own well and septic. Two adjacent 5 acre lots about a mile away have been bought and then sold three times this calendar year.

 

[Armybrat]

To illustrate how crazy the Austin housing market is.....

In 1959 my brother bought this 2/1 800 sq/ft house on Piedmont Ave. in the Crestview neighborhood of north Austin for $6,500.
I just looked it up on the googles and was amazed to see it appraised on several RE sites between $598,000 And $617,000.
The annual property taxes are now more than what he paid for the place.

 

[msharley]

Way prices are? ($500+K for CIVIL WAR ERA row homes in Pgh)...