posted Wed, 04/26/2023 - 11:56
1229
To Buy Or not To buy. Will the real estate market finally crash in 2024?
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To my fellow eroidians.
I’m in a rare situation where I purchased my home in 07 at the previous high of the housing market just before the bubble. My house is now currently worth exactly what I paid for it despite putting about 60k/75k into it. But, it’s still a small home in which my family quickly outgrew. I’m the only person I know who has this particular situation because although everyone has tremendous equity on there home to due to timing of purchase, I’m right at the break even point maybe even a little less which makes me hesitant to pick up and sell just to purchase at another high in the housing market. I live in the northeast where an average home is running around 750k. My house is about 1100 sqft and worth about 425k. Given the high interest rates, I’m not sure I want to sell to buy just to commit to a 4500 mortgage in my area. My question is, have any of you had additions put on your homes or did a complete rebuild? Is this perhaps a better approach depending on the type of build? My home is a ranch but the configuration is a bit weird, I’m not sure if I need another floor or just extend the back of the house to add one more bedroom. Any advice, input or Personal experience is welcomed and thank you.
Simon
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Deflation always immediately follows inflation. You'll see a correct in real estate in most markets with a few excepts. Northeast by DC and states where theres just no more room to build...otherwise you'll see a drop in real estate from peak in 2022. So if you're looking to buy, give it a year and wait for interest rates to drop a bit more. Then it'll be a buyers market.
I haven't personally experienced this, but I know people who've opted for home additions to accommodate their growing families. It can be a cost-effective way to create more space without the hassle of moving.
I just heard on the news last night that interest rates are expected to keep dropping. Of course they are, it’s election year. If you’re going to put on an addition, put on a second floor. It will appreciate your home beyond your expectations. An extension on the same level will end up looking weird and not add as much value besides offering an extra bedroom. It will be a turnoff to most people. I have a friend who bought a ranch in Fairlawn, and added a second floor. Paid $415,000.00 in 2007. Renovated in 2008. House is now worth about $900,000.00 and looks like an original build, not an addition.
Problem is when your friend added an addition, his cost is a fraction of what I have to pay in 2023. I was getting quotes for 400/500 k. At that point, it makes more sense to buy another home because I’ll be priced out. If I added an addition in 08, I wouldn’t be in this predicament now because I could’ve rebuilt my entire home for 250k back in 08.
Yeah, that sucks, sorry, Bro! I hear ya. I’m in distribution sales, and I can promise you that the cost of materials are substantially coming down, but the contractors are lying to people claiming prices are still high. Cost of materials peaked last February, and are now lower than they were before they started going up. I’ve lowered pricing for my larger clients, but anyone avererage sized or under is still paying a premium. Hang in there a little longer, and the contractors that quoted you will be following up in hope of securing the project. That’s when you knock 40% off of what they were asking. The contractors that try to retain their high prices will have no work. Trust me, this is starting to happen now.
Here a broken down ranch house sold as is sells for 430-450. Now add 250,000 addition 2023 price in for
House now like jake said sold as brand new no touch move in BOOOM 750 to 800,000 or more
One thing to factor in also is I won’t be able to live in the home for about 8 months or so which is why I rather move. There’s always a risk of a crash as well.
Hey gentlemen, thank you for all your responses and for requesting an update. After deep contemplation and discussions with my wife, we arrived at a conclusion to settle for converting our garage into a bedroom along with knocking down some walls to create a larger kitchen instead of spending an extra 250/300k on another house while also overbidding 50-100k. I just can’t wrap my head around paying 4500-5500 k monthly on a mortgage. I live in one of the most expensive states.
Before you purchase any of the materials to renovate your kitchen, let me know. I can steer you towards a few of my customers that will sell them to you about 40-50% cheaper than what you would pay without knowing me
Will do my brother. We’ll be in touch my man.
Im glad you found away to make it work for you and your family. Goodluck man
I appreciate that brother. One of the main reasons why I’m cutting corners here as well is because I own a vacation property and I’m trying to upgrade on that buy selling to by a bigger one in a few years. Eventually I’ll end up living there.
How did this workout for ya. What decision did you make
Id say if you like your area build up is cheaper than building out. Also where im from they buy houses FAST then they add double the size or whatever your town allows then sell it again or stay put. Me personally almost 50 years old i dont see a housing crash but hey anything can happen
...If the foundation was designed to support it. Building out would be cheaper and less invasive. No roof demo, footings instead of a poured foundation wall, mostly just lumber. Once the space is enclosed break through the wall or convert a window into a door.
Yhea i guess here is different - here most have to dig out and add block to expand out.
I don’t see the housing market crashing anytime soon. If anything it sounds like you are in a good location and will gain more if you hold onto it longer, I would keep it and add on.
Thanks man, I appreciate the response. Does it make more sense to sell and buy a property within town or just build ?
TricepatopsWould extend the floor not build up. Seen it alot of times when we go to homes for medical care and families have to sell there home or they don't even use the upstairs because of disabilities. I know it doesn't help much but that is something to think about unless you put an elevator or lift to the second floor.
That’s actually a great point. My neighbors house was for sale next store which featured a 3000sqft home with 5 bedrooms and 3baths. I was hanging out there during the open house and what I noticed was everyone that came in that was about mid 50s and up would say “wow, look at all those stairs”. It’s a bitch to clean and also payment for utilities, electric etc.
I’m in the same area. I don’t see it changing anytime soon as although rates are up, inventory is low. My neighbor just sold above asking in less than 1 day. Listed Friday. Gone Saturday. As makwa said, build out if you can. That’s what I did. A whole lot cheaper and a whole lot less disruption. Adding on a level is easy $250-300.
It is cheaper to build out rather than up. Just put an addition on. Do you have a basement you could remodel?
This has always been false atleast in my experiences with New builds. I live in the NE baltimore/Dc area but 4000k sqft rancher vs. 4000sqft mult-level. the mulilevel is always cheaper. Less foundation. Less siding. less roof space, etc etc.
Your existing foundation has to be able to support a second floor plus the roof over the section would be demolished and your lower floor vulnerable until the new second floor is enclosed... then there's placement for the stairwell.
The best way to build up is to lift the house and build under. The foundation can be repoured or reinforced, and you could literally double the size of your house. You can also design the new floor addition to be a future rental when you become an empty nester.
If you're just looking for an extra couple of hundred square feet, and have the room, building out is the cheaper option in a remodel. As a rule of thumb, you're correct with new constriction.
New builds are a totally different story. Existing structure you have to tear half the house off to build up.
So one good thing is my basement is completely remodeled and if I actually build a separate entrance it could be considered a studio.
Taking into account the fact that you own a ranch, I assume you own cows and horses, which makes you a Cowboy Simon! Man we Europeans love cowboys more than you could imagine! :))
Regarding your housing situation, speculation is always bad, do what you feel or want or you find yourself aging waiting for "special occasion".... I bought my place 6 years ago, when everyone told me its the worst time in history. It more than doubled its worth since then.
Haha, I hear you bro. Timing is everything though but no, no cows or horses lol. Just a regular ranch in a densely populated suburban area. I wish my neighbors were cows and horses though. Good for you on your purchase.
In my eyes you remain cowboy anyway. Can't unsee you as a big guy in the big leather cowboy hat since now :)) Ranch in a countryside is a dream, yes, but suburban area is more convenient...
Agreed brother, thank you for that compliment.